Fairs Fair

The increased uptake of mobile data services has been one of the defining industry trends of the past 12 months. As smartphones have begun to thrive with the mass market, access to web services on the mobile device has grown at a phenomenal rate. However, the revenue promise of this mobile data explosion is under threat, as operators’ networks struggle to meet the growing consumer demand.

Consequently, the net neutrality debate has begun to heat up. Operators are blaming content providers for the resulting network congestion, while regulators are fearful that operators will begin to block services, infringing customers’ civil rights regarding access to information and communication.

There is growing cross-industry recognition of the dilemma which, on the one hand, is trying to sustain uptake of mobile data services without compromising the principle of net neutrality, and on the other hand, means resolving the problem of network congestion to ensure that Quality of Experience issues do not ultimately discourage this uptake.

This dilemma is in turn reflected in high-profile players’ mixed opinions on the topic. Google recently announced a ‘joint policy proposal’ with Verizon which ‘will preserve the open internet while allowing network operators the flexibility and freedom to manage their networks’, suggesting that it is reneging on its once staunch advocacy of net neutrality.

Similarly, Eric Huggers, the BBC’s director of future media & technology, recently published a post on the broadcaster’s blog stating that ‘traffic management may sometimes be necessary for technical reasons’ but that the trend of operators discriminating against certain traffic depending upon who provides it is a ‘worrying developmenet.

Net neutrality: an idealistic notion?
The principle of net neutrality within a mobile context is even more contentious. Net neutrality asserts that operators should treat all subscribers equally in terms of internet use and access, preventing them from inspecting, shaping or controlling any traffic running over their networks.

Bearing in mind the issue of mobile network congestion, however, one might ask, is this realistic? The extent of the strain on mobile broadband capacity as a resource is such that demand will fundamentally outstrip supply for the foreseeable future. If no ‘checks’ are implemented, it is possible that congestion will become a permanent feature of mobile broadband, turning it into a service which ultimately denigrates the end-user experience, and limits access to the majority in favour of a minority of heavy data users.

In the UK, mobile broadband laptop penetration is approximately 15 per cent (Ofcom, October 2010), while smartphone penetration is 18 per cent (Cisco VNI Mobile, Informa Media & Telecoms, In-Stat, Gartner, 2009, 2010). Meanwhile, US laptop penetration is estimated at less than 5 per cent, and smartphone penetration at 33 per cent (Cisco VNI Mobile, Informa Media and Telecoms, In-Stat, Gartner, 2009, 2010). In spite of these relatively low levels of penetration, networks on both sides of the Atlantic are already experiencing congestion and Quality of Service (QoS) issues.

In our recent UK mobile broadband research conducted with YouGov, the results highlighted that 84 per cent of consumers had experienced QoS issues, suffering slow speeds (67 per cent), poor network coverage (49 per cent), inability to get connected (45 per cent) and connection loss (40 per cent). The same research conducted among N. American consumers last month revealed similar results: 74 per cent experienced QoS issues, with slow speeds (60 per cent), poor network coverage (35 per cent), inability to get connected (29 per cent) and connection loss (29 per cent) once again cited as the most common problems.

From a consumer perspective, 75 per cent of the respondents in the UK would accept intervention from the operator to improve QoS, while 48 per cent are willing to pay an additional fee. For the US, we found similar support, with 64 per cent accepting intervention and 45 per cent willing to pay an additional fee.

With this in mind, and while understanding that spectrum is a finite resource, LTE (Long Term Evolution) alone will not be able to deal with the subscriber uptake and related data explosion. Operator intervention is a requirement in order to secure QoS. Therefore, the discussion should be around how to come to a model of sustainable net neutrality, which cannot be solved just by the regulator and the operator; will also need representation from the consumer as well.

Towards a model of sustainable net neutrality
Given that mobile broadband penetration is a long way from saturation point, these issues are serious, and explain why operators in developed markets have taken the action to cap data usage, realign their fair usage policies and introduce tiered pricing models. These decisions have been met with mixed reaction, with consumers, perhaps unsurprisingly, the most perturbed.

Increasingly, rather than addressing the issues from a holistic cross-industry perspective, stakeholders are resorting to blaming one another. What is required to facilitate the establishment of a more viable mobile broadband service is collaboration and cooperation among all stakeholders, including operators, consumers, content providers and regulators.

Bearing this in mind, the time has come to move towards a model of distributing available bandwidth among as many users as possible, in order to guarantee consumers’ civil rights for unrestrained access to information and communication.

In order to achieve consensus on the issue, while simultaneously maintaining a strong user experience, net neutrality should be considered from a much wider perspective, based on the principle of ‘defining fairness’, as underpinned by the following cornerstones:

  • The consumer has the right to information, communication and content
  • The content provider has the right to indiscriminate access to its content
  • The operator has the right to run a sustainable business

For these principles to work in practice requires action on the part of both the operator and the consumer. From the operators’ side, they need to implement access control mechanisms which both allow them to better manage the network, and provide notification capabilities which will give consumers the requisite level of transparency and accountability. On the other side, consumers need to be more realistic about the level of service they expect to receive at a given time, in a given place or according to the type of content that they are accessing. These should all be governed by defined ‘fair use’ standards.

Next steps
In order to improve the level of customer satisfaction in a financially viable way, operators need to do the following:

  • Control costs by employing techniques such as data compression and defining rules and policies to help better manage peak traffic
  • Optimise video traffic based on the availability of bandwidth, and prioritise time-sensitive applications by providing the users with real-time notifications
  • Introduce differentiated offerings in order to raise Average Revenue per User (ARPU)

As mobile broadband usage continues to surge, consumers are becoming increasingly aware of QoS issues. Operators need to take decisive action now, by asserting control over the management of mobile data, and by working with the wider industry to help communicate proposed changes. In doing so, they will create for themselves a strong platform from which they can seek to raise customer satisfaction and loyalty levels, which will in turn help them to reduce customer churn and provide a better mobile broadband future for all.

Steven van Zanen is SVP marketing, mobile data control, at Acision