Light Reading reports that AT&T plans to leverage its extensive network reach in order to improve its position competing against content delivery companies like Akamai and Limelight.

According to the article, AT&T plans to add content servers to its internet data centres around the world, providing a sixfold increase in its caching and live streaming capabilities by the end of 2008.

AT&T’s group president of global business services Ron Spears, said:

In very short order, we will have the ability and all of the asset capacity necessary to optimally deliver and host content in the needed formats with the superior quality of service that our customers demand.

Yesterday’s post referred to a paper published by Hal Singer of Criterion Economics. That paper discusses a Quality of Service (QoS) service, purchased by many online video game providers, that could be placed at risk by net neutrality legislation.

For example, Sony produces EverQuest, a three-dimensional, fantasy, massive multiplayer online role-playing game (MMORPG) that requires users to pay a recurring monthly fee. For a time, EverQuest was the most popular MMORPG in the industry. Blizzard Entertainment produces World of Warcraft, another MMORPG set in a fantasy environment. As of September 2006, World of Warcraft had almost 7 million active subscriptions worldwide.
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To achieve the best possible fantasy environment for their online gaming websites, Sony and Blizzard place their servers in idcs owned by broadband service providers around the world. They simply cannot afford for the players of their games to experience jitter.

Ron Spears is a past keynote presenter at The Canadian Telecom Summit. We will be exploring Net Neutrality from all angles at The 2008 Canadian Telecom Summit in June.

A couple of academic papers that I have recently seen, including a forthcoming paper to be published by Toronto-based telecommunications lawyer Dr. Alexander J. Adeyinka, refer to net neutrality as a variant of Aesop’s Fable of the Dog in the Manger.

A dog looking for a quiet and comfortable place to take a nap jumped into the manger of the ox and lay there on the hay. Some time later the ox, returning hungry from his day’s work, entered his stall and found the dog in his manger. The dog, in a rage because he had been awakened from his nap, stood up and barked and snapped whenever the ox came near his hay. The ox is a patient beast, but finally he protested: ‘Dog, if you wanted to eat my dinner I would have no objection. But you will neither eat it yourself nor let me enjoy it, which strikes me as a very churlish way to act.’

Moral: Some begrudge others what they cannot enjoy themselves.

[Grosset & Dunlap, 2000]

How does this fit the discussions surrounding Net Neutrality?

In economic terminology, a Pareto improvement occurs when one group is made better off without causing another group to be made worse off. Economists argue that Pareto improvements should always be encouraged.

Economists would argue therefore that access tiering would be a Pareto improvement relative to the status quo; there is no economic reason why one group of subscribers should not be permitted to benefit if there is not deterioration in the service provided to others.

Why is it that proponents of network neutrality build their arguments on what might be called an “anti-Pareto principle.” We hear claims that no one should be able to receive faster delivery paid by the supplier of content or applications unless everyone does.

Georgetown University law professor Gregory Sidak argues that the “dog-in-the-manger” response to access tiering – some call it differential pricing – is intended to prevent a purely voluntary transaction from occurring. Dr. Adeyinka also noted that in a paper published this past summer, Hal Singer of Criterion Economics describes such net neutrality as the politics of envy. Net neutrality says: if a website cannot afford certain bells and whistles, then its rivals should not be allowed to acquire such enhancements.

We will be exploring Net Neutrality from all angles at The 2008 Canadian Telecom Summit in June.

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Reference
I’ll provide a link to Alexander Adeyinka’s forthcoming paper, titled “Net Neutrality Law or Dog in the Manger Jurisprudence – Law & Economics of Net Neutrality in Canada“, once it has been published.

My niece is overdue for a new phone. She has been holding out, delaying a long overdue upgrade, waiting for the introduction of the iPhone.

Many have pointed to iPhone-envy as one of the reasons that the government is facilitating the entry of another wireless competitor into the market.

iPhone aside, we have had lots of product innovation in Canadian wireless. Last week’s launch of Rogers’ voicemail to text is just another in a series of North American firsts in 2007. Video calling, the GPS equipped Blackberry 8310 are among some others.

The Washington Post reports that Alltel has launched its version of SpinVox Voice2TXT service a week after Rogers and at a price point that most users will find higher than Rogers.

I had an interesting conversation with a York University business student about wireless pricing last week. He commented to me that his friends found Canadian wireless prices to be too high, although he acknowledged that all of these friends had cell phones. I suggested that this was actually evidence that the prices were just right. People are still subscribing. There are more than 500,000 new mobile subscribers each quarter.

I’ve said it many times before: I’d like to see prices drop – not just for wireless, for lettuce, for gas, for hockey tickets, for coffee – you name it!

More than anything, I’d like to see my taxes drop. Of the items on my wish list, taxes are the only place that I think government intervention is warranted.

So we didn’t get the iPhone in time for Christmas. I can wait. After all, it’s my brother who has to deal with my niece.

Last Monday, the CRTC gave interim approval to a Bell tariff for wholesale voice services: TN 7088 Wholesale Local Service and Features (WLSF).

The offering is designed to allow competitive service providers to resell primary local phone service to end-users.

WLSF thus provides resellers a mechanism to provide local service to end-users at competitive rates. In addition, WLSF service enables facilities-based providers to provide local service to end-users in areas beyond the reach of their network facilities.

While the rates do not appear to be particularly aggressive, there is a $50 reward being offered to the reseller for each line that is is won back from a competitor [Item 317 – 4(d)]. Competitors thus have an incentive to compete more for lines that have already switched off the Bell network.

As much as WLSF is described in the tariff notice as helping competitors, it may be more of a reflection of the new reality of aggressive displacement of traditional local phone service. Local telephony is under attack from cable companies and wireless substitution.

WLSF appears to be an attempt to use competitors as an alternate channel.

Technorati Tags:
Bell, local service

A few interesting news items this week relating to the evolution of sales models for Apple, RIM and other intelligent devices. Alec Saunders and others write about Tryphone, a web-based handset simulator.

The Detroit News is reporting that RIM has opened its first Blackberry store in the upscale suburb of Farmington Hills. The store, owned by retailer Wireless Giant is carrier neutral and will handle activations for AT&T;, Sprint, T-Mobile and Verizon Wireless.

The concept of a Blackberry store will be interesting to track as more devices move into the hands of consumers and SOHO users, who don’t have access to a corporate trainer.

I also noticed a news item about the iPhone. Perhaps in a sign that pent-up demand has been satisfied, Apple has increased its limit on orders for iPhone from 2 to 5. Orders still require credit cards – no cash – in an effort to control resale and unlocking.

It is interesting to look at the evolving approaches in retailing intelligent devices.

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Update [December 14, 9:40 am]
David George-Cosh, of the Financial Post has also written about the Blackberry store in today’s paper.

There was also an interesting story out today about the LG Voyager displacing the iPhone as the most searched for phone on US wireless carrier websites. I wrote about the Voyager in October when Verizon launched the phone as part of its Christmas line-up.