Taiwan’s largest P2P operator, as we’ve covered)with P2P software distributor Grokster in the US, Web services should perhaps consider adopting their model to clearly benefit three parties – record labels, P2P operators and consumers – paying careful attention to copyrights.
Category: Regulation
FCC Rules VoIP Outside State Regulations
The US Federal Communications Commission (FCC) has ruled that US states are now barred from imposing telecommunications regulations on Internet phone providers, treating Voice Over IP(VoIP) calls no differently than any other application on the Internet.
The significance of the ruling is that US states cannot subject VoIP providers to their rules – the difference between a draconian and very light regulatory environment for the carriers. However, FCC Chairman Michael Powell and two of the four FCC commissioners suggested that states still have a role to play – namely to protect consumer interests.
Of course, Internet phone service providers were pleased with the decision. Vonage, for example, had postponed plans to expand into several rural areas while it awaited the FCC action. It can now ramp up those plans again and expects to announce it has entered those new markets in the next two to three months, according to a company representative.
The ruling will come as very bad news to the four regional Bell operating companies, which had a near-monopoly lock on local phone services until Internet phone providers came onto the scene. In a statement, BellSouth Vice President Jonathan Banks urged the FCC to “create a similar regime for all IP-enabled networks and services.” He describes the FCC’s decision as a “critical step towards encouraging the deployment” of such services nationwide.
Cable providers, such as Time Warner Cable, most of which now sell VoIP plans, fear that they’ll be left out of the ruling because their services run over privately owned and operated networks, not the public Internet. “In a perfect world, it would be great in just one proceeding to deal with all the issues, but we can’t do that here,” said FCC Commissioner Kathleen Abernathy. “It would be a mistake to be on sidelines and try and deal with these other regulatory framework issues.”
However, a tougher FCC ruling would have hurt projections that VoIP services will expand from the 1 million homes foreseen at year’s end to about 10 million by the end of the decade. As traditional phone carriers see more local calls flow over the Internet rather than their own more expensive networks, they have been adding their own VoIP-based services to lure business customers away from those companies that specialise in Internet phone technology.
On a slightly different note, Communications Commission Chairman Michael Powell said on Tuesday he planned to stay at the agency, possibly through 2007 when his term expires, now that President Bush has been re-elected. Powell, the son of Secretary of State Colin Powell, became a commissioner in 1997 and was elevated to chairman in 2001 by Bush. “It’s been one of my great privileges to serve under his leadership and right now that’s what I plan to continue to do,” Powell told reporters. “I’m happy where I am for the moment”, although he also stated that he plans to stay “no later than 2007.”
OFT’s Spam Crackdown
The Office of Fair Trading, a UK government organisation set up to protect consumers, has launched a new initiative to protect internet users from spam and misleading websites. The OFT are promoting global co-operation at a conference in London today bringing together consumer protection, data protection and telecommunications agencies from more than 20 countries.
John Vickers, OFT Chair, said in a statement: “Spam is not just annoying and intrusive. It gets in the way of legitimate e-commerce, and is often a vehicle for scams and computer viruses. International collaboration by enforcement agencies, the efforts of the computer and communications industries, and smart consumers at home (who take steps to protect themselves) are all needed to combat the internet scammers.”
To date, the OFT has fought a couple of successful actions against spammers and scam sites – but with a lack of results from other global initiatives, it remains to be seen if this latest conference will have any effect. Global spam traffic increases every week, and the numbers of scam sites, viruses and spyware applications is simply going up, not down.
The OFT’s main policy at the moment is to educate the public – their site has the usual hints and advice for email and web users, but these are hardly “tips to help you fight back”. A spam filter is not “fighting back” by any definition. Fighting back would be giving the anti-spam laws some teeth, and giving global law enforcement agencies the funding and co-ordination to combat spam at it source.
Ofcom: A New Framework for Public Service Broadcasting
Ofcom, the UK communications regulator has published the second phase of their review of public service broadcasting. Their review contains a number of proposals intended to enhance and strengthen public broadcasting in the UK to ensure that it is not damaged by the country’s transition to a multichannel, digital market. Ofcom are also keen that the public’s subsidy of the TV market, currently standing at around UK£3 billion (€4.35 billion) should not increase.
The frame work has seven proposals and includes:
- Supporting a independent, fully-funded public BBC
- Channel 4 to remain as a non-profit free to air broadcaster capable of entering alliances and joint partnerships with other organisations.
- A competition to run a new Public Service Publisher using new technologies and distribution systems to meet audience needs – though the BBC is obviously disqualified from entering.
The closing date for responses to the Ofcom report is 24th November 2004, though the review will not be completed until after Phase 3 is published.
Rajar Propose Move to Electronic Measurement
Rajar, Joint Radio Audience Research Ltd, has published its roadmap for updating the way that it measures radio audiences in the UK.
The schedule includes a tendering process to begin in April 2005, with the new contract to be awarded in September 2005, or later. After that, new versions of the Arbitron Portable People Meter (PPM) and the GfK Radiocontrol systems will be vaildated and tested, alongside a new meter from Eurisko.
Sally de la Bedoyere, managing director of RAJAR, said in a statement: “The RAJAR roadmap to enhanced radio audience measurement is ambitious, but certainly achievable. It is the final stage of a journey RAJAR began in 2001 and it leads to a seismic change in radio audience measurement, namely the possible move to electronic measurement. We are optimistic that, by 2007, we will be heralding the introduction of an audio-meter based methodology, which measures analogue, digital, digital TV and Internet listening and we shall continue to work vigorously in the pursuit of this goal.”
Kelvin Mackenzie has already announced that the tests are “twaddle”, and indeed his Wireless Group is suing Rajar, as they are claiming lost revenue due to the lack of an electronic measurement system.
BT Drops the Cost of Local Loop Unbundling
For a very long time UK broadband providers have claimed that BT have had an obvious lack of enthusiasm for letting them in to telephone exchanges to install their own equipment, to offer services to rival BT’s. Known in the trade as local loop unbundling (LLU), BT’s rivals see it as the only profitable way to provide broadband and high-speed services, so they don’t have to pay BT for each customer, as they do if BT equipment is used.
Following on from continuous pressure from Ofcom, the UK super-regulator, and LLU price reductions announced in May, BT has now cut the cost further.. . They put this down to their investment in new automated processes. From now the cost of a shared LLU line is 62% less than it was in June of this year, the connection charge is now standing at £37 (~$64, ~€52) while the annual rental is £27.12 (~$48, ~€36). It looks like BT might be on a roll and if it continues, prices may be reduced by up to 70% by the end of the year.
Ofcom already indicated its enthusiasm for LLU to play a greater role in stimulating competition in the wholesale broadband sector. Last April its chief executive, Stephen Carter, hinted that Ofcom would be proactive in making LLU more attractive to rival operators.
In real terms, cutting the cost of LLU will encourage the deployment of more 3rd party equipment in BT’s exchanges, giving more choice to UK customers. As if to prove how serious they are about it, BT is appointing an LLU director of ceremonies. NTL and Cable & Wireless (Bulldog) have already announced multi-million-pound plans to invest in LLU in the UK, and they must be chomping at the bit to install their kit in BT exchanges and get on with the business of offering a service to their customers.
The UK is now a respectable 8th in the list of DSL countries, according to the DSL Forum. And as a member of the European Union, it is in the number one DSL region with more than 23 million subscribers. With lower prices bringing the UK more in line with its European counterparts, and higher speeds, customers should notice improvements as the LLU market in the UK is finally ignited.
McCain’s US Bill seeks $1Bn for Digital TV
The world over there is a general move towards replacing analogue television with digital. US Senate Commerce Committee chairman, John McCain has now raised the stakes.. His proposed bill calls for analogue switch off by 2009 but offers financial aid. Current law requires broadcasters either to give up their current airwaves by 2007, or when 85 percent of the nation can receive the new digital signals – whichever comes later. Many US TV stations already broadcast both digital and analogue signals, but few Americans own digital television sets, which are currently a lot more expensive than their more traditional counterparts.
McCain proposes a bill that that would require broadcasters to switch off analogue signals by 2009 and would subsidise the cost of consumers upgrading their equipment to digital. Currently there are about 70 million analogue sets in the US. Even though the Federal Communications Commission has mandated that by July 2007 all new television sets with screens 13 inches or larger must be able to receive digital signals, the fear is that digital TV will not be universal by then. This is because, according to the Consumer Electronics Association, Americans replace their sets only every eight to 10 years – messing up the math for the lawmakers.
McCain argues that it will take $1 billion to make the shift and this magic sum will be garnered through a rather circuitous route. When the government) gets their hands on the airwaves that broadcasters are now using, they will probably auction it for commercial wireless services, and this could potentially earn billions of dollars, and Senator McCain’s $1 billion would come from the auction proceeds.
Some of this $1 billion could also be used as a benevolent fund to enable people who do not have a digital television set to install a pay television service that would either offer them the new signals or a converted signal they could see. This will allow millions of consumers to continue watching television once broadcasters begin airing only in digital. Understandably though, those same broadcasters are concerned about their signals being switched back into analogue after they have spent millions of dollars upgrading their facilities to offer digital.
McCain’s draft legislation gives priority to those households that rely solely on over-the-air television, and in particular lower-income homes. The legislation is scheduled to be considered by the committee on Wednesday, but it is hard to anticipate any meaningful progress since Congress is trying to adjourn by early October and the U.S. House of Representatives has not acted as yet.
If the Bill is passed analogue -only television sets made after September 2005 will be obliged to include a warning label stating that without additional equipment, it would not work after 2008.
So far the UK government has rejected any call for it to contribute to the public’s cost of making the change to digital TV. McCain’s bill will give further weight to those who feel they should.
UK Apple iTunes Too Expensive says Consumers’ Association
Ever since Apple iTunes Music Store and Napster 2.0 launched in the UK, we at Digital Lifestyles have been thinking that the UK pricing has been unreasonably high, being out of step both with the US and Europe. The UK Consumers’ Association (CA) has today mounted a campaign to increase the public understanding of the problem.
The CA has written to the UK Office of Fair Trading (OFT) explaining the situation and highlighting that the current position is possibly in breach of European law. Under Euro law all consumers in all member states should enjoy the same benefits that the single market brings – it’s like if citizens in Seattle had to pay more for their iTunes music than the rest of America. Clearly with a differential between iTunes UK (79p, 1.15 Eu) and Germany & France (0.99 Eu, 67.7p UK) there is not a level playing field. Those UK citizens who understand that they can use either the French or German sites to order directly on find they are charged the UK price if they are not able to supply as an address in either of these countries.
Although the CA campaign is focused on iTunes, perhaps because of the mainstream press attention it has attracted, Apple are not the only service where UK consumers are overcharged. The differential on Napster UK is even greater when comparing their UK pricing at 99p (1.44 Eu) against Apple European iTunes at 99c Eu (67.7p UK). This becomes even more distorted when US prices are used as a comparison 99c US = (55.4p). Clearly albums bought on the any of the services multiply the differential by a factor of 10, as most of the albums cost ten times a much as single tracks.
When we queried the UK Napster price back on 1 June 2004, Adam Howorth, Communications director at Napter UK told us: “it’s simply down to the higher wholesale price we get from the record companies in the UK. If they would reduce their prices, so would we.”
Overcharging UK citizens had always been the way business has been done, but most had imagined that this discrepancy would evaporate with digital goods. The old arguments that were always given; it’s a small market; goods are hard to distribute; it’s more expensive to support, all fall away with digital distribution. It is to Apple’s great shame that they have continued the overcharging, while clearly understanding all of the advantages that digital distribution brings.
We will be watching with interest the reaction of the British public to this. It may give an indication to their reaction when they start to realise that the DRM-protected goods that they are beginning to buy do not work on all of their various devices.
US Analogue Switch Off: 2009
Michael Powell, US Federal Communications Commission Chairman, has endorsed a January 2009 date for the country’s analogue to digital TV broadcast switchover.
And what a commitment it was! Although he requested an unspecified date for the switchover during his testimony in front of the Senate Commerce Committee, when questioned by reporters about the FCC-proposed 2009 date he was heard to say “Yes, I’m saying it really strongly.”
The UK’s own switch-over is likely to happen sometime between 2010 and 2012, depending on who you believe. Americans have a lot of work to do to meet their 2009 date, as only 2% of households have digital TV equipment. I guess they must replace their televisions more frequently than us British.
Congress have set a trigger point requiring broadcasters to switch to digital television signals once 85% of homes can be reached.Powell’s key motivator behind the switch-over is freeing up the analogue spectrum for the emergency services and public-safety broadcasts, as evidenced in his statement. Since the project is being tackled as a defence against terrorism, them no doubt a lot of resources will be thrown at it.
Ofcom Confirms 056 Numbers for VoIP Services, Begins New Consultation
Ofcom, the UK’s telecoms regulator has confirmed that voice over IP services will use the 056 prefix, first reported here in February.
The new prefix will give all VoIP users a fixed number, so will be able to place calls with subscribers who have signed up for different VoIP services. It will also allow non-VoIP subscribers to make calls to VoIP numbers.
Ofcom are leaving the assignment of numbers down to VoIP providers. 056 numbers will not be geographic, as was originally feared, meaning that subscribers can be contacted wherever they are. Having a geographic VoIP number makes about as much sense as a geographic mobile number, and we’re glad someone saw sense.
Stephen Carter, Ofcom Chief Executive said “Broadband voice services are a new and emerging market. Our first task as regulator is to keep out of the way.” In this spirit, Ofcom has begun a new consultation to receive input on what needs to be done to protect the users of this nascent industry. Traditional telephone companies have number of regulations to comply with before they can offer a service to the public, such as ensuring access to the emergency services, and Ofcom wishes to explore what subset of these obligations should be applied to VoIP providers.