Wireless

Editors' note: This is a guest column. See Larry Downes' bio below.

The Obama administration and its allies at the Federal Communications Commission are retreating from a militant version of Net neutrality regulations first outlined by FCC Chairman Julius Genachowski in September.

That's my reading of a number of recent developments, underscored by comments made by government speakers on a panel on the first day of a Tech Policy Summit at CES in Las Vegas.

Genachowski had initially described his vision for the future role of the FCC as a "smart cop on the beat preserving a free and open Internet." Communications companies understood that to mean aggressive and detailed enforcement of rules that would, among other things, prohibit ISPs from offering premium, or "fast lane," services.

Such services, which content providers could use to prioritize their interactions with customers over the parts of the Internet controlled by the ISPs, have yet to be offered. But the possibility that they would be ignited a firestorm in 2007 that has grown hotter since the election of President Obama, who proclaimed himself in favor of Net neutrality regulation during the 2008 campaign. Early in his administration, Obama appointed Genachowski, a longtime adviser, as the new head of the FCC.

Last fall, Genachowski proposed six Net neutrality rules and asked the full commission to approve them. The proposed rules could be adopted as early as spring.

But even as the commission concludes its collection of public comments next week, both the White House and the FCC appear to be dialing back their expectations.

A resignation
Signs of more modest Net neutrality regulations include resignation in late October of Susan Crawford, who took part in Thursday's panel discussion and who was previously a key adviser to the president on technology and communications. According to the conservative-leaning American Spectator, Crawford's version of Net neutrality was too radical for White House economic adviser Lawrence Summers, contributing to her early departure.

Crawford, who has returned to the faculty of the University of Michigan Law School, told the CES audience that the proposed rules are not radical and are, in fact, necessitated by consolidation in the broadband industry.

But she also acknowledged that U.S. communications law, which still operates under the assumption that voice, data, and television content are carried on separate networks, no longer makes sense. The likelihood of significant reform, however, given the "slow and clunky" legislative process, is slim. "It's time...and it's impossible," Crawford concluded.

On the same panel, White House deputy CTO Andrew McLaughlin reminded the audience that the FCC had yet to determine whether Net neutrality is needed to preserve the open Internet. He and Crawford both characterized the proposing of the rules as simply opening a dialogue on the subject to allow the FCC to collect data.

McLaughlin raised eyebrows last year when he equated network management practices of cable companies that limited the speeds of large file downloads to Chinese-style Internet censorship.

Today, McLaughlin seemed more measured in his comments. He did, however, dismiss concerns that strong Net neutrality rules would slow the deployment of higher-speed technologies. "There's little evidence," McLaughlin said, "that non-discrimination is going to disincentivize investment."

Panel member Neil Fried, who is minority counsel to the House Committee on Energy and Commerce, took objection to that claim and offered as evidence findings from within the administration itself. Fried pointed to recent filings by the Department of Commerce and the Department of Justice as part of the FCC's preparation of a national broadband plan. The DOJ's letter, for example, found no evidence of market failure in broadband today and warned the commission against premature regulation.

Political pressure
The administration is clearly backtracking. But why?

Part of the reason is some unexpected political pressure, including a letter signed by 72 congressional Democrats opposing the FCC's proposed rules soon after they were announced.

But the bigger explanation is the growing priority within the administration for nationwide, affordable broadband service. In the course of preparing the national broadband plan, mandated by the 2009 stimulus bill, universal high-speed access has taken on increased significance in the government's hopes for a rapid economic recovery. Beyond the current financial woes, Congress, the FCC and the White House all recognize the importance of improving the communications infrastructure to maintain U.S. competitiveness in technology innovation.

As Fried pointed out, however, nationwide broadband coverage would require an additional investment of $350 billion, much of it for fiber optic cabling. While the FCC was developing its plan and spending "too much time on Net neutrality," he said, the communications industry had already invested $60 billion toward that effort. By contrast, the stimulus bill allocated only $7 billion for broadband projects. Clearly, Fried noted, satisfying the goals of the national broadband plan will require significant private investment.

The major carriers are making the investments, and have every business reason to make more. But the Net neutrality rules, depending on how the FCC defines key terms, could hamstring their efforts to make their money back. Net neutrality is making Wall Street uncomfortable about financing broadband deployment. That in turn is making the White House nervous.

Net neutrality is turning out to be a noisy side show and a growing distraction from the real priority for both the White House and the FCC: getting the country wired for recovery.

LAS VEGAS--Mobile TV may finally hit the mainstream when cell phones throughout the U.S. are able to access local TV for free.

The Open Mobile Video Coalition, an organization made up of consumer electronics companies, broadcasters, and mobile TV companies, has finished a standard for new chips that will allow mobile devices, such as cell phones, to receive broadcast TV signals. The new technology is already making its way into prototype devices and is being shown off here at the Consumer Electronics Show.

Samsung Moment and live local TV via DTV.

(Credit: Marguerite Reardon/CNET)

Starting in March, broadcasters in Washington, D.C. will be the first to test the mobile DTV capability in a proof-of-concept trial with real live consumers. Several device makers, including Dell, LG, and Samsung are making products available for the test.

The devices for the test include a smartphone by Samsung, a Netbook from Dell, a portable DVD player from LG, and a mobile DTV bridge device called the Tivit that receives digital TV signals and retransmits it over ... Read the full post at CNET's CES 2010 blog

Steve Elfman

(Credit: Sprint)

LAS VEGAS--On the eve of CES, Sprint announced its Overdrive 3G/4G Mobile Hotspot, a 4.5-ounce device measuring 3.15 by 3.14 inches by .61 inch that creates its own Wi-Fi hot spot.

The Overdrive can serve up to five Wi-Fi-enabled devices with a range of about 150 feet. I'm using it now with my laptop, an iPhone, and the new HTC Nexus One smartphone, which runs Google's Android operating system and supports Wi-Fi connectivity.

The device, which is manufactured in an unlocked state, can support Sprint's 3G and 4G networks. 3G connectivity, which supports speeds up to 3 megabits per second, is available in most parts of the United States. Typically, 3G runs between .5Mbps and 1.5Mbps.

Sprint's 4G network, which, in theory, can operate at up to 10Mbps, is currently available in 27 markets, including here, but it is slated to be rolled out to several more markets this year. By the end of 2010, Sprint says its 4G network will reach ... Read the full post at CNET's CES 2010 blog

$529. That's the price of Google's new Nexus One and admittedly a small price to pay for the eternal bliss promised by its backers.

(Credit: Google)

If T-Mobile is willing to subsidize the cost of the Nexus One in return for a services contract, why isn't Google subsidizing the device, given that it's effectively a one-way trip into Google Land and all of its services?

Tom Foremsky rightly notes that "Nexus phone does nothing to challenge the power of the telcos," given that it leaves them in the position to dictate what customers can do with their phones.

He goes on to argue that Google should buy a telco and thereby assert control over the complete customer experience.

It's a nice thought (though completely out of keeping with Google's business model of leveraging others' infrastructure), but Google could get much of the way there, I suspect, by simply subsidizing the phone itself, thereby cutting into the telcos' leverage over their customers.

That's what the unlocked $529 version does, after all. It positions the customer to be one SIM card swap away from a new telco. It makes wireless competitive again.

TechCrunch groks this when it writes:

Is there any question what Google is doing here? They're taking the traditional mobile model in this country, where you first choose your carrier, and then choose your phone, and turning it upside down. It's what Apple started with the iPhone. But Google goes farther, because they already have multiple carriers....

Or, as Ars Technica's Jon Stokes argues, "Google's biggest announcement was not a phone, but a URL."

Bingo. And subsidizing the Nexus One would take this strategy even further.

Google "generates more money per unit of online end-user activity than any other Web-focused organization," writes Carmi Levy in BetaNews. Nexus One is an on-ramp to more online end-user activity and hence more money.

Why not subsidize that so as to keep that revenue stream safe from the prying hands of the telcos? And to head off Microsoft, which now has carte blanche to push forward with Project Pink?

Google is happily paying telcos as much as $25 to $50 per device to sell Android phones, as Benchmark Capital's Bill Gurley indicates. Why not "pay" its customers to use them?

Follow me on Twitter @mjasay.

LAS VEGAS--Sprint Nextel introduced a 3G/4G wireless router Wednesday night called the Sprint Overdrive that will allow subscribers to share their wireless broadband connection among Wi-Fi devices.

Sprint 3G/4G Overdrive wireless router

(Credit: Sprint Nextel)

The Overdrive router, made by Sierra Wireless, uses Sprint's 4G WiMax network, where it's available, to allow customers to access the Internet and then it shares that bandwidth among Wi-Fi-enabled devices. Where 4G service isn't available, the router connects to the Internet using Sprint's 3G EV-DO wireless network. Subscribers can connect up to five Wi-Fi-enabled devices, such as laptops, cameras, game consoles and other Wi-Fi-enabled devices.

Sprint, which showed off the new device at an event the night before the Consumer Electronics Show kicks off here, claims that the 4G wireless network provides enough bandwidth to allow users to easily wirelessly stream high-definition video and music, play games on consoles like the Microsoft Xbox and surf the Web all at the same time.

The Overdrive will be sold at Best Buy stores in 10 ... Read the full post at CNET's CES 2010 blog

LAS VEGAS--From new cell phones to set top boxes to emerging devices, AT&T is looking beyond the iPhone as it focuses on a rapidly expanding application business.

The company's top wireless executive, Ralph de la Vega, told developers at the company's fourth annual application developer conference here Wednesday that AT&T's future is in applications.

AT&T wireless chief Ralph de la Vega addresses application developers.

(Credit: Marguerite Reardon/CNET)

De la Vega noted the explosion in application growth in the U.S. cell phone market over the past year. "No country has seen the growth we have seen," he said. In 2009, U.S. wireless consumers downloaded 832.7 million applications, a ninefold increase over the past two years. He also noted that revenue from these downloads has increased some 60 percent.

At the company-sponsored event held on the eve of the Consumer Electronics Show, de la Vega outlined AT&T's strategy for pushing new applications onto a slew of new devices, and he provided a glimpse into how ... Read the full post at CNET's CES 2010 blog

Updated 1/6/10 12:55 p.m. PT: More up to date information on where the Nokia Ovi store is offered has been added to this story.

LAS VEGAS--Nokia on Wednesday said its Ovi application and mobile-content store is now available in the United States for AT&T wireless customers.

Consumers using Nokia devices such as the E71x, the Surge, the Mural, the 6650, the 6555, and the 6350 are now able to download free and paid content from the Ovi Store. Paid content will be billed directly to their AT&T bill. Nokia said more devices soon coming to AT&T's network will be able to access the Ovi Store.

Nokia announced in May that AT&T would make the Ovi Store available. AT&T customers will be able to access the Ovi Store via their Nokia phone's browser. They then can download the store and to download content such as games, ringtones, productivity applications, and movie trailers.

The Ovi storefront is now up and running in 17 countries: Australia, France, ... Read the full post at CNET's CES 2010 blog

High-quality online video has been in high demand in China, and Chinese search provider Baidu is hoping to fulfill that need.

Baidu announced on Wednesday that it is creating an independent company to offer premium online videos to Chinese Internet users. The new entity is designed to work with content providers to supply copyrighted material, including movies, TV shows, sports, and animation, and it will generate its revenue through advertisements.

"As China's Internet industry evolves, we have seen increasing demand for high-quality video content on our search platform. By establishing this new company, we will be able to better serve our users and customers with superior content and focused resources," Xuyang Ren, Baidu's vice president of marketing and business development, said in a statement.

"Online video is a rapidly growing sector in China, and I believe Baidu's search platform will provide a solid foundation for the new company to address the increasing demand for premium content," said Yu Gong, former president and chief operating officer of China Mobile's 12580 hotline service, who is set to head the new venture as CEO.

Baidu, which has outshined Google's Chinese search engine to become China's top search provider, has been eager to get into the online-video business.

But video has long been a thorny issue in China, as the country has grappled with video piracy for years. DVDs of pirated movies and TV shows have been a lucrative business in the Chinese market, with obviously no compensation to the studios, networks, and other content providers. Pressure from the United States has pushed the Chinese government to try to crack down on the illegal trade. But the low cost and wide availability of pirated videos have kept it a thriving market.

Piracy has gone more high-tech in recent years. More and more illegal videos, including full-length movies and TV shows, have shown up on popular Chinese video-streaming sites such as Youku and Tudou. A group of content providers filed a lawsuit late last year against some of these Chinese sites, charging them with copyright violation, China.org reported. So far, the case has resulted in a legal judgment against Youku, ordering it to pay a small sum in damages.

TVs with Internet access have also become a new haven for video piracy, as Chinese users can now download illegal videos directly off the Web into their living rooms. The Google-funded service Xunlei, a Chinese peer-to-peer file-sharing service, has been the target of lawsuits, alleging that it distributes copyrighted movies and TV shows without compensating the studios or networks.

Changes in 2009 market share for browsers

(Credit: Net Applications)

Last year brought market share growth for all major browsers except Microsoft's Internet Explorer, according to Net Applications' annual industry report released Wednesday.

The year ended with Mozilla's Firefox and Google's Chrome enjoying gains of about 3 percentage points, while Apple's Safari climbed a single percentage point. Opera stayed relatively flat with a gain of 0.23 points, but IE saw a decline of nearly 8 percentage points.

Though IE's popularity may have sunk, the Microsoft browser still boasts a greater market share than all the other browsers combined with 62.69 percent of the audience.

Firefox now has a 24.61 percent share, leaving Chrome with 4.63 percent, Safari with 4.46 percent, and Opera with 2.4 percent.

Internet Explorer's gradual loss of market share occurred despite Microsoft's launch of IE 8. The new version may not be able to stem the tide, according to Net Applications. For years, IE faced virtually no competition, so Microsoft had few reasons to enhance or innovate as market leader. As Firefox usage started to climb and Chrome joined the ranks, Microsoft released IE 8 and hoped that its new features would halt the browser's decline. But with more browsers in the market, competition is tighter than ever. And so far, IE 8 hasn't had much impact on recapturing lost market share.

Microsoft also now faces a cloudy browser environment in Europe. In 2007, Norway-based Opera Software pressed the European Commission to investigate Microsoft over IE's alleged browser monopoly on the desktop. To placate the EC, Redmond was forced to design a Choice Screen that displays a list of 12 different browsers that people can install and set up as the default. Though the effect of the Choice Screen remains to be seen, Net Applications believes it will significantly alter browser market share in Europe.

(Credit: Net Applications)

For relative newcomer Chrome, 2009 was a banner year. After its unveiling in late 2008, Google's browser took awhile to catch on but then saw its use double over the first half of 2009. Chrome, which trailed Safari in market share virtually all of last year, finally surpassed Apple's browser in December for the first time, making it the third most popular browser.

Though Chrome's 4.63 percent share of the market is still far behind that of second place Firefox, Mozilla now needs to look at not just catching up with IE but at holding off Google's up and comer, Net Applications said.

Safari's gains have come about mostly as the Mac OS has grown in popularity. With the debut of Windows 7 OS in October, Windows seems to have halted some of the loss in market share to Apple, notes Net Applications. But Safari still grew throughout the year, especially in December, thanks in large part to its use on mobile devices. Mobile browsers now account for 1.3 percent of all Web browsing.