Welcome to the XCellAir Blog! A few promises:
Enjoy the reads, join in on the conversation and come back often!
July 2017 saw a few dozen websites, including heavyweights such as Netflix, Amazon, Spotify and Reddit, slow down to a crawl. It wasn’t a technical issue, but a protest. Unhappy at the FCC’s plans to end net neutrality, these websites were both trying to change the FCC’s mind, and also trying to show what the end of net neutrality might look like: while some websites slow down, others that have paid ISPs for priority access load instantly.
Many see net neutrality as a fundamental right, making free access to information and services possible, and a key principle responsible for making the internet such a success. For others, it’s a shackle that limits innovation and investment. For mobile network operators, whether they agree with the principle or not, network neutrality makes some of their efforts to differentiate tricky.
One such service is Vodafone’s VOXI service in the UK. Aimed at a young demographic, the service will offer unlimited texts and calls, a 4G connection, and a data allowance between 2 and 15 GB. It will also offer unlimited use, or “zero-rating”, of Facebook Messenger, Instagram, WhatsApp, Pinterest, Snapchat, Twitter, and Viber. As long as you have some data left in your monthly plan, using these services won’t eat into that allowance – you can be as social as you like, without worrying that you will need to pay to top up your data.
This seems at first to be uncontroversial. The operator is giving its customers exactly what they want, while also retaining some control over its network. Applications that use a lot of data and put a strain on the network, such as video streaming or downloading large files, are not zero-rated, but the operator can differentiate itself by giving customers unlimited access to popular apps.
The problem is that zero-rating some data, but not all, has been criticized as going against the principle of net neutrality. Giving certain apps an advantage over their rivals could be considered anticompetitive — any rival to Facebook or WhatsApp now not only has the problem of competing with a much more established brand name, but also convincing potential customers to use an app that will also use up their data allowance.
Zero-rating has been controversial enough to be banned in Canada, India and Holland, while the EU has banned the use of zero-rating once a data cap has been exceeded. With zero-rating a good way to attract both customers and the ire of regulators, what should operators do?
The solution is to sidestep the issue of net neutrality altogether, and instead offer zero-rating for all applications when using unlicensed or lightly-regulated spectrum.
At the moment, consumers often offload data themselves. By switching to a Wi-Fi connection at home, at work, and anywhere in-between, they avoid using up their precious mobile data allowance and can keep it for when they really need it. Some operators already supplement this by offering Wi-Fi hotspots for their customers. In the UK, O2, Virgin and Sky all have extensive Wi-Fi networks, while in the US, there are over 17 million hotspots provided by cable carriers alone. Use of these Wi-Fi hotspots are included in the internet service and are excluded from the data cap, essentially making them zero-rated.
The rollout of LTE and the beginning of LTE-A networks means greater bandwidth for users, and mobile operators will be under pressure to increase data caps — what’s the point of a fast network capable of HD video if it burns through a small data allowance at speed? Zero-rating services would be one way to appease customers, but another would be to look at new unlicensed bands as a way to offload and provide ‘zero-rating’ this way.
Two unlicensed LTE technologies are being trialed now that could also provide zero-rating. MulteFire/LTE-U is LTE that operates wholly in unlicensed spectrum alongside other technologies, such as Wi-Fi. LTE-LAA is anchored in licensed spectrum, but the base station can also aggregate unlicensed spectrum when needed for extra capacity. Both LTE-U and LTE-LAA offer operators a way to expand their networks and relieve the strain from increased data traffic, but they also offer another opportunity.
Operators could offer zero-rating not on selected services, and not only on Wi-Fi, but on any use of unlicensed spectrum. If customers can be made aware of when they are using this “Wi-Fi-like” service and that it won’t affect their data allowance, everyone can win. Customers can get a better experience overall and use large amounts of data out of their home, while operators can limit the data being transmitted across the licensed parts of the network and make sure heavy data users doesn’t mean others end up with a poor experience.
The zero-rating of specific services means that operators understand what their customers want: unfettered access to their favorite services. But going down this route means risking regulatory pushback, and taking away zero-rating from customers, even if it’s down to regulation, will never be a popular move. Instead, operators need to look at where they can emulate zero-rating, and balance unlimited data with the needs of the network. Using unlicensed spectrum could provide this balance.