Apple, Regs, 5G, FTTH, Content, Cloud: Telco 2.0 News Review

Posted on

Apple's €13bn tax bill; HomeKit as standard; "$1m Dissident" iPhone defies UAE; China ASPs; iRules

The EU inquiry into Apple's tax affairs is in, and it's pretty stern news for Apple; the EU wants it to repay €13bn in back tax.

Even though this is coming out of the pool of Apple profits held offshore that it can't distribute for US tax reasons, and it has more than enough cash to pay the bill, expect all sorts of trouble. To begin with, here's the Irish finance minister trying desperately to turn down the €13bn in raw cash - the problem is that the EU ruling isn't so much about Apple's behaviour as it is about the Irish tax code they have been exploiting, which it considers to be illegal state aid to business. And the US Department of the Treasury is hopping mad. (Also, if the TTIP was looking shaky earlier on, it's surely done for now.)

But it's good being Apple. Major US construction companies have started installing HomeKit-compatible controls into every new house they build. So the buildings will, in a sense, be giant adverts for the iPhone.

The ubiquity of Apple's products also makes them a target. The UAE's secret police made no fewer than three concerted attempts to hack this dissident over 5 years, without success. But their latest attack, using SMS spear-phishing, went badly wrong. Not only did he become suspicious of the dodgy SMS, he passed it on to volunteer hackers who identified the attack server...in Israel. Oops. Also, they documented the three new zero-day exploits against WebKit the attack targeted, and now Apple has patched them.

Here's an interesting look into Xiaomi's terrible year so far, making the point that smartphone ASPs are rising remorselessly in China. So far that's hit Xiaomi and buoyed Huawei up, but they're heading for levels at which Apple might get a tailwind, especially if the SE gets a refresh when the iPhone 7 lands. On the other hand, here's a glowing review of the Samsung Note 7.

IDC reckons we might be seeing a long overdue upgrade cycle in European PCs, at least in the ultrabook/detachable segment. No.1 in detachables is of course the iPad Pro, and No.1 in ultra-slim notebooks is of course the MacBook Air.

AMD is taking GPU market share off Intel and NVIDIA again, although the wider market is still shrinking.

Here's Hyper, an app that aims to recreate something like Apple's iconic HyperCard from the 1990s.

And is Apple's policy of letting apps run their own payments for anything except media downloads (i.e. iTunes competitors) anti-competitive?

Facebook wants to slurp WhatsApp phone nos; e-privacy regs battle; 5.9GHz row; Cicconi steps down

So, remember when WhatsApp founder Jan Koum said he wanted to know as little about his customers as possible? Now WhatsApp is part of Facebook, and Facebook would very much like to link the phone numbers WhatsApp uses as anchor identifiers with Facebook profiles. This recaps a privacy row from years back when Facebook started matching phone numbers from user A with user B, even if user A didn't explicitly share them with, say, user C. The UK Information Commissioner wants to "monitor it" and it's a good bet they won't be the last. Note: you can opt out via the settings menu.

Meanwhile, Facebook has laid off the team of editors who picked the "trending" stories, and that went as well as you might have expected.

Not surprisingly, Facebook and Vodafone are on opposite sides of the European Union's planned e-privacy directive. Vodafone thinks OTTs should be regulated like telcos; Facebook doesn't. That said, in the light of the project to hoover up WhatsApp phone numbers, it's somewhat ironic that Facebook is specifically complaining about providing a phone directory.

Another example would be the requirement to provide automatic call forwarding and directories of subscribers, which "hardly fit the services provided by online service providers", said Facebook.

The European Commission also this week took another whack at the old why-won't-Google-News-pay-for-links chestnut. The EFF isn't keen.

Over at the FCC, the advertised row about the 5.9GHz spectrum assigned for either WiFi or car-to-car systems is bubbling up as a team of consumer lobbies hand in their protest.

The 600MHz incentive auction ticks on. The take is now up to $18.5bn, having risen $8.5bn in a week. This means that the auction has now hit one of three milestones needed for it to actually hand out spectrum. Next week, the minimum ante goes up from 5% to 10%, which may kick off a surge of bidding. So far, spectrum over Los Angeles is most in demand - five out of 62 bidders are chasing the same block.

India's so-called mega auction has been put back by two days to make sure that it clashes with a religious festival. Yes, to make sure it clashes - it's considered lucky, apparently.

Sprint got caught sticking to rebates it was told to pay out, and has to fork out with interest.

And AT&T's chief lobbyist Jim Cicconi is taking his carriage clock and hat. Harold Feld, ironically, has a gracious appreciation.

VZ "ready to launch 5G before the standard"; Google 3.5GHz alliance; Vodafone-Idea denied

The one thing everyone wants more spectrum for is 5G. It's getting more obvious with every passing day that Verizon is determined to be the first 5G carrier in the field - this week, VZ announced the second wave of specifications from its own 5G development effort, covering authentication and protocol design, and suggested that it would be willing to deploy a pre-standard system on its own hook.

It also said that the job is between 75 and 80 per cent done, at least as far as fixed-wireless goes, that its own spec should be complete this year, and that the vendor partners have enough detail to start work on products. Not surprisingly, it's hoping that 3GPP will just ratify the results once the new radio is working.

In the meantime, it deployed LTE-A this week across the footprint, using 2xCA to double the uplink bandwidth. This is an important step, as it expects to use LTE-A as the anchor for early 5G, with the new radio slotting in as another aggregated carrier. Sprint and Samsung, meanwhile, say they've deployed 3xCA to 500 cells around Chicago. The next step will no doubt be one of the US carriers managing to squeeze a gigabit; here's Elisa and Huawei claiming 1.9Gbps.

Vodafone-Hutchison Australia is sticking to the official 5G timeline of no movement before 2020, but they are going to do some demos and trials later this year.

MIT has demonstrated a new technology for coordinating distributed MIMO arrays, MegaMIMO 2.0. This is in the context of WiFi, but it's obviously also relevant to 5G.

Part of the early-5G alliance - Intel, Nokia, and Qualcomm - have formed a new alliance to develop solutions for the 3.5GHz shared band the FCC just created, the so-called Citizens' Broadband Radio Service. Interestingly, the other members are Google and Ruckus Wireless. Even more interestingly, the proposed technology is specifically "LTE-based" - a surprise from WiFi specialists at Ruckus.

CableLabs says it will have as many as 9 partners in the CableWiFi roaming network by next year. SigFox is deploying in Colombia.

Idea Cellular denies roundly that it might be selling out to Vodafone India. Orange denies it's going to take a piece of Telecom Italia off Vivendi. Axiata has mixed Q2s. EE puts its out-of-bundle roaming charges up. FreedomPop snags a $50m investment from Alfa Group's Mikhail Fridman.

Big changes at Google Fiber; cable won US Q2; UK broadband numbers

What's up at Google Fiber? We know there's been a surge of interest at Google in 5G wireless - note the 3.5GHz story above - and interestingly, a decline of interest in robot space balloons and the like. We also know that the Fiber business unit has been "challenged" to reduce its costs by 90%. Does this mean they're flipping to wireless? Giving up? Or does it mean they're increasingly keen on sharing dark fibre with other deployers?

Another view would be that they've decided that national gigabit connectivity is coming, and it's coming from cable first of all. This roundup of Q2 data suggests that the cablecos are winning and the only way for the telcos is to roll out either fibre, or something equivalent.

That said, in Australia where once NBN Co dreamed of building fibre to basically everybody, they're even cutting back the numbers of people who will get gigabit cable, in favour of VDSL. It turns out competition is worth having.

In the UK, there's finally some momentum behind FTTH roll-out. We're now up to 780k passed, and growth is accelerating. CityFibre is planning to overbuild Hull's unique incumbent KCOM. That said, BT is arguing that it should either be exempt from the planned broadband universal service obligation, or perhaps the USO shouldn't include use cases like using more than one device in one house.

Meanwhile, the opposition has come right out and promised to build national FTTH.

Olympics TV dives; BBC data; Comcast-Dreamworks; the digital stadium; Spotify rights

Here's a very interesting data point - while Comcast's broadband operation was triumphing, its joint Comcast-NBC TV coverage of the Olympics was doing poorly indeed. Viewership was down 15% compared to the London Games, and they ended up giving away ads during the closing ceremony to fill in space. Streaming - you guessed it - almost doubled.

The BBC, meanwhile, reports that just under half of the 29 million unique users it observed during the Games came from a mobile device. UK-only traffic doubled compared to the London experience.

Comcast, meanwhile, closed its acquisition of Dreamworks, which gives outgoing CEO Jeffrey Katzenberg a $391m payday.

Here's an interesting piece on how American football has digitised the stadium. Important point: it's all WiFi. No telcos.

Spotify's contracts with the big three record labels have all come up for review without reaching agreement, so its rights continue on a month-by-month basis. The labels think Spotify is pricing itself low. Spotify hopes it's big enough that they can't afford to just pull the plug (and of course that would look deeply cartel-ish), they know Spotify can't walk away. Expect the negotiations to drag.

Is TV advertising still managing to defend share against online, or is that just an Olympics bump?

And Google may be about to shoot those annoying interstitial ads in the head.

Rackspace goes private, pivots; VMWare new strategy; how telcos failed in cloud; IDC IT spending data

Rackspace has gone private, as Apollo Global pays $4.3bn for the company. Dealbook points out that this is a bet on its new strategy of being a top-tier integration partner for all the major clouds, a big change from the days when it helped to invent the cloud. That said, its founder status in OpenStack probably helps.

VMWare is doing something similar - it is reorganising its various products as a single stack, offered as a service (infrastructure-as-a-service software, as a service!) and very often running in a big four public cloud. A bit more here.

How did telcos fall so far behind the big four? Perhaps because they failed to realise how quickly the big four were improving their security.

IDC reckons total IT spending will grow 3.3% annually over the next five years, with the growth concentrated in banking, manufacturing, and healthcare, and in medium-sized companies among those sectors.

81% of telcos expect to have some NFV deployed by the end of next year. The typical use case is business CPE.

Scepticism about Cisco's prospects in SD-WAN. AT&T takes charge of OPNFV's end-user advisory group. Will IoT be the key driver for micro-data centres?

Why failover doesn't work. Tropo has an app store, Tropo Solutions. GE, the software company. And 25 years of Linux.

Here's the world's biggest Blue Screen of Death, 50 feet tall.