An Ignoble Experiment

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The battle over net neutrality and related pushes to rewrite the Telecommunications Act of 1996 are sure to have major impacts, one way or another, on the future of consumers' communications and entertainment options. But those effects will themselves be influenced by ever-changing marketplaces, which are undergoing rapid transformations.

Many are calling for the FCC to regulate all broadband providers--big and small, wireless and wireline--under Title II of the Communications Act of 1934. This would categorize those providers as a "telecommunications service" rather than an "information service" and would subject them to more heavy-handed regulation.

But a new report issued by the Internet Innovation Alliance (IIA) highlights the fact that vast choice in the marketplace means "while regulators still have varying degrees of control over various network-providers, and a great deal of control over POTS [plain old telephone service] providers, they have effectively lost control over consumers."

To me, that means adding more regulation to the mix will likely have lots of unintended consequences.

The 36-page report, which was authored by Anna-Maria Kovacs, notes one of those consequences, which is that network-based operators will probably have less money for infrastructure investment. "Because consumers can easily abandon the services required by regulators and shift their spending to other providers, the regulated carrier's revenues are no longer assured and neither is the floor below its earnings. That makes it more difficult for it to attract investors' capital," she said.

Moreover, if tighter regulation, say of wireless services, results in higher prices or fewer features, consumers are likely to find more preferable alternatives. "Consumers' ability to leave providers also limits regulators' ability to ensure that consumers get what regulators think they need. If consumers choose to move to a platform that is less secure or offers less consistent quality in exchange for either a lower price or other desired features (e.g. Skype instead of POTS), regulators can't force them to buy security or consistency. Nor can they force consumers to cross-subsidize other consumers," Kovacs wrote.

AT&T (NYSE: T) is a big supporter of the IIA, which was founded in 2004, and the group's arguments favor the telco/business side. Nonetheless, I think IIA's latest study brings up some salient talking points regardless of which political slant one has...Continued

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Today's Top News

1. Apple iPhone 6 will support VoLTE, says Mavenir's CEO

By Tammy Parker

Comment |

2. Alcatel-Lucent narrows loss, but U.S. sales drop

During his company's second-quarter 2014 earnings call with analysts, Mavenir Systems' CEO Pardeep Kohli gave a couple of shout-outs to Apple (NASDAQ: AAPL), citing the importance of the vendor's support for operator-enabled voice over IP (VoIP) services in its upcoming products, including the iPhone 6, which Kohli said will support voice over LTE (VoLTE).

Kohli

Kohli referenced Apple when he cited several operators that have introduced Wi-Fi calling, including France's Orange, O2 in the UK and Rogers Wireless in Canada. Apple has said it will support Wi-Fi calling, also termed voice over Wi-Fi (VoWiFi), in iOS 8. Apple's confirmation "is a major development for the industry because that will significantly boost a number of compatible devices for Wi-Fi calling," Kohli said, according to a Seeking Alpha transcript of the call.

T-Mobile US (NYSE:TMUS) CMO Mike Sievert previously said that with Apple's support of Wi-Fi calling, more than 90 percent of all T-Mobile smartphones will include the feature. T-Mobile is the only U.S. carrier that has so far confirmed it will support Wi-Fi calling for Apple's iPhone. The operator uses Mavenir's converged voice solution, introduced in 2011, to power its voice over Wi-Fi service.

Apple announced iOS 8 during its Worldwide Developers Conference in June. The iPhone 6 has not been officially introduced, but many Apple watchers expect an announcement in September. Though Apple said during the WWDC that iOS 8 will support Wi-Fi calling, GigaOM noted the vendor did not mention VoLTE support at that time.

However, Kohli said Apple has indicated that iOS 8, the expected operating system for the iPhone 6, will support VoLTE. "This will be the first Apple phone to support VoLTE, and its introduction this fall is expected to further the progress of VoLTE," Kohli noted.

FierceWirelessTech has reached out to Apple for comment regarding Kohli's remarks. Apple plays very close to the vest with iPhone design and even its close partners often profess not to know what is coming.

According to the Global mobile Suppliers Association (GSA), there are 92 smartphone models, including operator and frequency variants, which already support VoLTE.

"The wave of VoLTE launches and announcements during the second quarter signals the increasing momentum in this next major phase of LTE network evolution. Along with the progress in the device ecosystem, the encouraging sign is that the VoLTE is on its way to become a mass-market service," Kohli said.

He noted numerous devices that are shipping can be activated remotely to support VoLTE once an operator's network is ready. "For example, T-Mobile recently made a software update available for Samsung Galaxy S5 to activate VoLTE service on devices that were sold prior to the VoLTE launch in May," Kohli said.

The GSA reports there are 66 operators in 35 countries investing in VoLTE studies, trials or deployments, including 10 operators in Hong Kong, Japan, Singapore, South Korea and the United States that have commercially launched HD voice service using VoLTE.

Mavenir countes14 Tier 1 VoLTE customers. It provided the IMS core network and voice solution for MetroPCS, when it launched VoLTE in August 2012. T-Mobile, which subsequently acquired MetroPCS, is also using Mavenir's IMS core and voice solution in its VoLTE service, which launched May 22 and is available in15 markets, Kohli said.

For more:
- see this Seeking Alpha transcript (sub. req.)
- see this GSA release

Read more about: VoWiFi, IMS
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Join us for CCA's Annual Convention, then use your CCA pass to attend CTIA. http://www.cca-convention.org

By Tammy Parker

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3. Freescale exec: '5G is coming fast and furious'

Alcatel-Lucent (NYSE: ALU) capped off the second quarter of 2014 with a narrower loss. Yet sales in the United States fell and investors have grown worried that the company's reliance on large contracts from U.S. carriers could hurt it if network activity drops.

In the first six months of 2014, Verizon Communications (NYSE: VZ), AT&T (NYSE: T) and Sprint (NYSE: S) represented respectively 15 percent, 14 percent and 10 percent of Alcatel-Lucent's revenues. In the second quarter, the vendor had sales in the U.S. of $1.89 billion (€1.41 billion), down around 7.6 percent from $2.04 billion (€1.53 billion) in the second quarter of 2013.

BNP Exane Paribas analyst Alexandre Peterc told Reuters the company's overall second-quarter results were in line with forecasts but that there were grounds for concern. "It seems investors are fearing that the U.S. will slow down and that will derail Alcatel despite the good execution of its turnaround," he said.

The vendor also said it is close to regaining full ownership of its patents, which were used as collateral for a loan in 2012, and is also preparing an initial public offering of its submarine networks unit.

Combes

"With the upcoming reimbursement of the secured loan and the subsequent recovery of the full ownership of its patents, Alcatel-Lucent recaptures the full control of its destiny and can close the first step of its transformation. The group can now embark on the second chapter of its turnaround story: innovate, transform and grow while keeping intact the commitment of returning to positive free cash flow in 2015," said Michel Combes, company CEO.

Alcatel-Lucent recorded a net loss of $399.26 million (€298 million) during 2014's second quarter, a vast improvement over the year-earlier loss of $1.19 billion, which was due largely to layoff-related restructuring charges during 2013's second quarter.

The infrastructure vendor reported revenues for continuing operations of $4.39 billion, an improvement on a like-for-like basis of 0.7 percent over the prior-year period. However, excluding managed services-- which has been exiting unprofitable contracts--the company said its revenues actually grew 5 percent over 2013's second quarter. That improvement was driven by robust growth in Alcatel-Lucent's wireless business, thanks in large part to LTE rollouts in China and the United States.

In fact, Alcatel-Lucent's "access" unit, which includes its wireless business, experienced a 9.5 percent increase in revenues over the prior-year period, reaching $2.56 billion during 2014's second quarter. Even more impressive, wireless access revenues were $1.74 billion, a 28.1 percent-year-on-year increase. Legacy 2G and 3G technologies continued to see sales declines, and represented less than 25 percent of Alcatel-Lucent's wireless access revenues in the second quarter.

Taking a look at the company's geographical performance, despite strong LTE rollout numbers, overall sales in North America slid 2.6 percent from 2013's second quarter. However, Asia Pacific posted especially positive results with 25.2 percent year-on-year growth, boosted by LTE network rollouts in China. Excluding managed services, Europe showed a 6 percent revenue improvement. Alcatel-Lucent's Middle East and Africa results remained fairly stable, while the Caribbean and Latin America "remained challenging," the company said.

The vendor's managed services revenues were $103.17 million, a slide of 62.8 percent from second-quarter 2013 results, which reflects the company's moves to exit or change loss-making contracts.

Alcatel-Lucent also said its overall gross margin reached 32.6 percent of revenues, a year-on-year improvement of 140 basis points, which the vendor attributed to cost savings. The company has been restructuring its business under CEO Combes' Shift Plan, which includes a focus on IP networking and broadband access as well as massive cutting of fixed costs.

In addition, Alcatel-Lucent is planning an initial public offering for its submarine networks business during the first half of 2015. The vendor will use money raised to strengthen the business and fund its diversification into the oil and gas markets and will retain majority interest in it.

Meanwhile, the vendor has reportedly outsourced all of its 2G and 3G technology efforts to India's HCL. The move is said to be part of Alcatel-Lucent's Shift Plan, unveiled by Combes during June 2013, which aims to help the vendor achieve profitable growth and much-needed liquidity.

Moreover, Alcatel-Lucent has recently entered some high-profile contracts. It is part of AT&T's User-Defined Network Cloud, which seeks to virtualize the operator's architecture so it can deliver rapid, on-demand services to customers. The vendor is also involved in more than 55 network functions virtualization (NFV) projects, including the first deployment of virtualized radio access network (RAN) software at Mobiliy in Saudi Arabia.

In July, Vodafone, as part of its massive Project Sprint network investment effort, made Alcatel-Lucent its supplier of reference for LTE metro cells that come integrated with Wi-Fi. ABI Research recently estimated that Alcatel-Lucent placed first in small cell equipment market share during 2013, ranking above Airvana, Cisco and ip.access.

For more:
- see this Alcatel-Lucent release
- see this Bloomberg article
- see this Reuters article
- see this ABI release

Special Report: Wireless in the second quarter of 2014

Phil Goldstein contributed to this article.

Read more about: Michel Combes, LTE
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By Tammy Parker

Comment |

4. Cablevision tops 1 million Wi-Fi hotspots, upping ante in challenge to cellular

2020 may seem like a long way off, but it is less than six years from now. That means although 5G is still not officially defined, every company on the industry value chain is already working out how its products will fit into this next generation of wireless connectivity, said Tareq Bustami, vice president of product management of Freescale Semiconductor's digital networking group.

Bustami

"5G is coming fast and furious," he told FierceWirelessTech, with many operators planning to commercialize services in 2020. Working backward, that means initial deployments and field trials will start happening in 2018, so standards must be set in 2016.

"And if you're somebody like us down in the value chain, you better start working on your silicon platform and your software platform three or four years before the field trials, which means 2015," Bustami said.

The tricky part is that nobody knows what 5G is. So for now, companies are participating in industry forums and working closely with clients to conceive the 5G roadmaps. "Given our domain knowledge and connection to our industry and customers, we're using that to stay hooked into what's happening," Bustami added.

Bustami also addressed the impact of software-defined networking (SDN) and network functions virtualization (NFV) on Freescale's QorIQ line of SoCs. "It is an evolution. It's not something that is dramatically different," he said.

SDN and NFV are all about open standards, and "QorIQ is evolving in the sense that we are adding an ARM portfolio," Bustami said. In addition, Freescale is also ensuring that Linux can be ported to its SoCs and that its Linux drivers are real-time aware.

Another important angle is enabling ease of use and programmability through software-aware silicon. "The magic sauce that's built into our QorIQ, which is how we accelerate packet processing, has to evolve and change in a big way to be suitable for SDN and NFV. A big part of that is to make it programmable and easy enough so you don't need a PhD to program it," Bustami said.

Freescale's digital networking group includes sales of communication and digital signal processors serving the networking and communications markets. For the second quarter of 2014, the group's sales were $291 million, up from $229 million a year earlier.

The company said that second-quarter networking sales growth was broad-based across service provider, enterprise and the general embedded segments. One particularly bright area was wireless base station sales in China due to the ongoing TD-LTE expansion.

"A lot of our revenue growth is driven by LTE, especially from China. That is still mostly based in macro cell deployments," Bustami said.

However, Freescale is also deeply involved in small cells. "On the small cell side, we were the first LTE SoC in small cells, delivering not just hardware but software as well," Bustami said, noting the company "went through a lot of growing pains" due to its pioneering efforts.

"We now have small cells deployed in the major operators in Japan, Korea and North America," he added.

The design of metrocells, for urban deployments, is particularly demanding. "That to us is a place where you need macro-class performance and capacity but with a small cell deployment model," Bustami said.

"At the end of the day, a small cell from the chip point of view is not just a piece of silicon that Alcatel-Lucent (NYSE: ALU) or Ericsson (NASDAQ: ERIC) or others will drive software on," Bustami added. "It's a turnkey solution that we're expected to provide."

He said the baseband processing, MAC scheduling, Layer 2 and 3 functions are increasingly "expected to come from the chip company," particularly in the small cell environment as opposed to the macro cell environment.

For more:
- see this Freescale release

Read more about: SDN, Tareq Bustami, silicon
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By Tammy Parker

Comment |

5. Cambium quickly jumps on 5150-5250 MHz bandwagon

Cablevision (NYSE: CVC) said earlier this year said it would reach some 1 million public Wi-Fi access points by the end of 2014. The cable MSO beat its forecast by five months, announcing it has already reached that 1 million hotspot goal.

The company has boosted its Wi-Fi presence thanks not only to equipment rollouts in public places--such as the Coney Island Boardwalk in Brooklyn, N.Y.--but also due to deployment of Wi-Fi "smart routers" in customers' residences, which provide private Wi-Fi service to those subscribers but also turn those locations into publicly accessible hotspots for nomadic customers.

Cablevision said its Optimum WiFi service currently hosts in excess of than 250 million sessions each month. Moreover, customers average 4 GB of data per month, a number the company noted exceeds the data limits of many common cellular data plans.

"Connectivity is the driving force behind our WiFi expansion; our customers love using their mobile devices when on the go, and Optimum WiFi keeps them connected," said Kevin Packingham, Cablevision's executive vice president of product. He added that Cablevision's customers are "passing more and more data over Optimum WiFi as an alternative to cellular data plans."

Cablevision customers can sign in once and from then on automatically connect, via an automatic sign-in feature, to the network whenever they are in an Optimum hotspot.

For more:
- see this Cablevision release

Read more about: Cablevision
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By Tammy Parker

Comment |

eBrief | Connected TV Advertising's Growing Potential

Cambium Networks announced products designed to operate in the 5150-5250 MHz frequencies that the FCC recently opened for fixed outdoor wireless use.

Cambium said its existing PTP 650 platform, for point-to-point wireless broadband backhaul, can immediately access the additional 100 MHz spectrum via the download of a new software release.

"This new spectrum was not previously in use, and is not subject to dynamic frequency selection or radar detection. With higher power limits, the PTP 650 offers longer range and higher capacity to reach more customers with new applications," said Scott Imhoff, Cambium vice president of product management.

In addition, Cambium introduced its ePMP Force 100, a high-gain integrated subscriber solution that is intended to improve performance range in high-interference deployments. It includes Cambium's latest ePMP software release, which expands the operating range of 5 GHz ePMP radios to include 5150 MHz. The release also enhances the eCommand suite of network management tools and eFortify, which allows the platform to recognize and react to external interference.

The ePMP Force 100 can be deployed as a subscriber module that can connect to any ePMP access point, as well as peer nodes in point-to-point deployment configurations, Cambium said. The ePMP Force 100 is the latest addition to the vendor's ePMP platform, launched in October 2013.

Cambium's products are used by service providers; enterprises; governmental and military agencies; oil, gas and utility companies; Internet service providers; and public-safety networks.

The FCC voted 5-0 in March to broaden use of 100 MHz of the 5 GHz U-NII-1 band (5150-5250 MHz), whose unlicensed use was previously restricted to lower wattage and indoor operations. The order eliminated a rule that had prohibited outdoor operations in the band and also increased allowable power levels in the band.

For more:
- see this Cambium release and this release

Read more about: Cambium Networks, U-NII-1
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Also Noted

This week's sponsor is Placemedia.

The lack of industry standards coupled with an uncertain business model is making connected TV ads a challenge, but many companies are preparing for what could be a huge opportunity. In this eBrief, FierceCable discusses the future of connected tv and its advertising marketplace. Download today.

SPOTLIGHT ON... AT&T, IBM slash set-up times for cloud connectivity to seconds

AT&T (NYSE: T) is pursuing its plans to create a cloud-based network architecture via numerous research projects, including one in which the operator joined IBM and Applied Communication Sciences (ACS) to create a prototype technology that reduces set-up times for cloud-to-cloud connectivity, particularly between data centers, from days to seconds.

The companies said their research might ultimately lead to sub-second provisioning time with IP and advanced optical networking equipment. Further, their approach could elicit "elastic bandwidth between clouds at high connection request rates using intelligent cloud data center orchestrators, instead of requiring static provisioning for peak demand," they said.

The work was performed under the auspices of the U.S. government's DARPA CORONET program, which focuses on rapid reconfiguration of terabit networks. AT&T was responsible for developing the overall networking architecture for this concept, while IBM provided the cloud platform and intelligent cloud data center orchestration technologies. ACS handled network management and optical-layer routing and signaling.

AT&T's vision for the network of the future--the User-Defined Network Cloud--aims to enable bandwidth on demand in the wide-area network (WAN) via software-defined networking (SDN) and intelligent network routing. For more, see this release and this FierceTelecom article.

Wireless tech news from around the Web.

> SoFIA is Intel's new super-cheap smartphone chip. Article

> Mobile apps testing firm Leanplum lures $4.8 million in investment round led by Shasta Ventures. Article

> London's mayor is promising to roll out a 5G network in London by 2020. Article

> Nokia Networks trials LTE Broadcast for "national" services. Article

> Anite launched Triton, a multi-purpose LTE wireless core networking testing tool. Release

> Fitness devices can share your location and leak your data. Article

> Ericsson boosts IoT, XaaS, billing capabilities with MetraTech acquisition. Article

> Google told the FCC no issues were reported during testing of its new TV whitespace database. Filing

> Alcatel-Lucent earned the top spot in small cell equipment market share during 2013, ABI said. Release

> France is eyeing dynamic spectrum sharing. Article

And finally… A New Mexico woman allegedly pulled a gun on a Comcast worker over cable fees. Article

Jarich: LTE TDD - Looking back to the birth of a standard

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