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Wi-Fi offload can help mobile operators deliver network neutrality

Network neutrality has come back to the boil in 2014 following US carrier Verizon’s famous Federal court victory in January over the regulator FCC (Federal Communications Commission), allowing it to differentiate between services delivered to its broadband customers. This was followed in April by the European Union approving strict network neutrality with the message it would take a much tougher stance than the FCC in upholding the rules. Naturally this was widely interpreted as setting Europe apart from the US, but the reality is that both are taking a more nuanced approach than in the past. Even the EU proposals allow for provision of specialized services, providing they do not intrude into network capacity set aside for the general Internet. The tones may be different but the broader implication both in the US and Europe is that network neutrality can never be fully attained through legislation, any more than true equality of wealth can be achieved via measures such as progressive taxation – both are aspirations or focal points.

For mobile operators the aspiration of network neutrality has assumed a logistical and economic dimension with the great proliferation of data hitting their infrastructures. Many have opposed strict net neutrality for the simple reason that their core and backhaul networks have limited capacity and would be unable to cope without traffic engineering and the ability to differentiate between different service or application types.

But now Wi-Fi offload has entered to change the game, giving operators an option for relieving their overstretched backhaul networks and for that matter their radio access capacity as well, by taking advantage of broadband infrastructures. It was at the Mobile World Congress in 2013 that offload first seemed to have risen right up the agenda for mobile operators. Generally, particularly before deployment of 4G/LTE, broadband networks had greater capacity and crucially lower costs than the fixed backhaul networks serving radio base stations. For this reason those major Telcos with their own network of hot spots have been leading the march towards Wi-Fi offload. In the US AT&T has built large Wi-Fi hot zones in mostly urban areas with high levels of cellular traffic, specifically for offload to help relieve congestion on its core mobile network.

The implications of such offloading for network neutrality have not attracted much attention, but are likely to be profound nonetheless. The fundamental point is that by freeing up capacity on the mobile network, offloading can help mobile operators meet their net neutrality obligations as laid down by regulators in the region concerned, while still having scope to offer specialized services. An operator could say offer an OTT video service such as Netflix with guaranteed QoS over the cellular network, resorting to Wi-Fi offload for third party OTT services such as YouTube. Alternatively Wi-Fi could be used for specialized services, especially by operators like AT&T that have their own overlapping hot spots and cellular networks on a large scale.

We are already seeing this happen, with Sprint in the US now offering calling and messaging over Wi-Fi when within range of suitable hot spots. Sprint incidentally was one of the first major carriers in the world to make serious use of Wi-Fi offloading for data.

We are going to see plenty more such offerings over the coming years. It will be interesting to see the extent to which operators will align Wi-Fi and cellular within heterogeneous service offerings effectively to escape the shackles of net neutrality while obeying the basic rules as stipulated by regulators.

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Have we finally reached the inexorable end unlimited data plans? Amdocs thinks we have.

During a business lunch in 2002 I had my first real conversation with my boss’s boss’s boss in France Telecom. Joining the table late, I found the discussion already heated. Jean-Jacques Damlamian, the longest standing board member the company has ever had was then the acting CTO (I say acting because there was no such title, JJD as he was known internally is now retired). He was adamant: « We have just made the biggest mistake in the telecoms industry’s history, since Graham Bell. » France Telecom had launched its first commercial ADSL packages for private subscribers just a few years previously. Damlamian was referring to the fact that these packages were limited only in speed, and unlimited in volume of data. Already it was becoming clear some users’ requirements were thousands of times higher than the average user. France Telecom was budgeting millions of Capital expenditure for just a handful of subscribers.

Last week, David Amzallag, Amdocs’ new CTO explained to me how he believes his company’s vision might contribute to getting the industry out of the fatal trap it set for itself over a decade ago. I met him in the run up to the 2011 Broadband Forum in Paris.

David just left from a 4-year stint as BT’s chief scientist. Those years spent on capacity planning, convinced him that even if networks get smarter and grow in capacity as fast as possible, current usage trends will outstrip our best efforts, leading to major bottlenecks and frustrated subscribers. David went as far as to say that T1s and T2 are in serious trouble as their bread and butter gets commoditized.

MPLS, one of those technologies supposed to make capacity management much more flexible, has delivered only part of the promises so far; capacity is running out anyway, however flexibly it’s managed. Amdocs see a metered future.

So based on the assumption that demand is going to exceed capacity, Amdocs commissioned a study on the future of data pricing from Heavy Reading. Amdocs’s core business is where Operations Support Systems (OSS) and Billing Systems (BSS) meet customer experience so they have a vested interest in the outcome. Reassuringly, the study concludes that operators believe users are willing to pay more for more and are willing to accept some kind of flexibility (Over 80% of interviewed operators said that their future plans include data plan shared between several devices e.g. tablet & smartphone. Also, over 65% said their future plans include data plans shared between several family members). Heavy Reading appropriately interviewed operators, because they are Amdocs’ customers. The research would carry more weight if it also included the opinions of real subscribers.

Amdocs don’t believe the problem will be solved with sponsored connectivity, where, for example, Facebook pay the ISP a few dollars to carry their traffic. David went on to say that the only way forward is for the network’s Operational Support Systems (OSS) to be better linked to the business issues.

He described several use cases with an overall data quota for the whole family across many devices. Parents might be prepared to pay a premium to be assured that during their single daily leisure hour, bandwidth was guaranteed. Children could swap their leftover bandwidth allowance amongst themselves. For the more tech savvy families, the hard-core gamer might even give up some bandwidth in exchange for better latency that the bandwidth hungry movie-buff sibling doesn’t need. Towards the end of the month, if the operator sends a warning message that data limits will be probably be exceeded, the family could decide either to extend existing plans for a premium or enforce lower usage until next month. Thus maybe watching a few older movies from the home NAS instead of streaming from the cloud.

For other customer segments like single adults, Amdocs sees people wanting to fulfil unique needs at specific times through different devices. Subscribers will be prepared to pay for this and data plans will need to be so flexible that David says the real name of the game will be personalization. He used the expression of “Quality of Service On Demand” and “dynamic customer profiling” to describe such cases.

These quota based premium packages could co-exist with unlimited ones, but Amzallag insists the latter would suffer much lower bandwidth. He said that net neutrality wouldn’t be completely gone as prioritization isn’t based on packet contents but on whether the customer is paying a premium or not. Of course the Net Neutrality activists would disagree saying that the corollary of prioritization is de-prioritization, which means blocking if congestion is too bad.

Other detractors can forcefully argue that there will be no turning back from “as much as I can eat” data plans. But the Amdocs vision addresses that pretty squarely saying unlimited data can co-exist with quota based plans. My remaining doubt is a central one. Do subscribers want this? The "Global Tribes" consumer research, conducted by Coleman Parkes, that Amdocs published earlier this year, addresses the question "are consumers prepared to pay more for more?" For most segments and markets it concludes reassuring that yes they are. However, having myself witnessed first hand how incredibly different markets around the world are; I avoid using patterns from one market to make deductions for another. UK and US customers are clearly being weaned away from unlimited plans. My gut feeling is that subscribers in the rest of Europe and places like Russia that benefit from fierce ISP competition might be harder to transition away from unlimited plans. Despite its recent problems, the Netflix model has proven it can fly; limited data packages could shoot the model straight out of the sky.

The context of the data plan debate will probably evolve rapidly as the boundary between the fixed-line and the mobile broadband markets gets fuzzier all the time. Quota based plans have been becoming the norm on mobile broadband. My daughter left home for a tiny 1-roomed flat in Paris last month and in looking for an ISP on a very tight budget, we concluded that using a mobile broadband subscription might be best – she only uses Facebook and email regularly and will keep away from streaming for now (which could incite illicit downloading when she’s back home, but that’s another story...) So I look forward to talking again with David maybe at next year’s Broadband World Forum, to see how things have panned out.

After writing this I found out on twitter that fierce competition on the iPhone 4S launch is pushing the big US operators back towards unlimited ... looks like the market may not be ready after all. Exciting yoyo times.