Mavenir raises $100M to build more AI into its cloud-based automated network technology for telecoms services

One of the bigger trends in telecoms has been the evolution of cloud computing and how software operating in the cloud is being used by carriers to build out and manage their networks — moves disrupting traditional business models based around the purchasing and deployment of costly telecoms routers, switches and other costly physical equipment. Today, Mavenir — one of the hopefuls in that space, with a focus on Open Radio Access Networks and related services for 5G networks — is announcing $100 million in funding to expand its technology and its customer base.

The first of those will involve bringing more AI tools into the mix, the company said; and as for the latter, the company already has a sizable business: it currently has more than 250 service provider and enterprise customers across 120 countries, services that altogether cover more than half of the world’s mobile subscribers. The plan will be not just to continue expanding that pool, but to build more services to sell to current customers.

Mavenir described the funding as “anchored” by Siris, a PE firm that’s been backing the company for years. Mavenir is not naming further investors in this latest capital injection, but other existing backers include Koch and Pendrell. Koch and Siri also participated in the company’s last financing, a $155 million round in October 2022. It’s not disclosing its valuation but we have contacted the company to ask.

Mavenir has been through a couple of different ownership structures, including at one point being majority owned by Siris and used as the umbrella for a roll-up of telecoms software vendors Mitel and Xura — both also of the bigger consolidation trend — to capitalize on new opportunities with 5G networks. After selling a $500 million stake to Koch in 2021, Siris remained at least a partial shareholder, and given the $255 million raised in the last seven months, it seems Siris is back into investment mode with the company now.

Mavenir is part of the wave of companies that also includes companies like DriveNets, Arrcus, and even AWS looking to capitalize on the so-called trend for digital transformation in the telecoms industry. Telecoms carriers are on the hunt for more ways to bring down their own capital and operational expenditures while providing more flexible services to business and service provider customers as they scale up and down. Kit from the likes of Cisco, Juniper and Arista represents the legacy, incumbent approach to network provision and operation; now, the pitch is that software, delivered via cloud services, is the new and better solution.

“This new capital will allow us to accelerate our capabilities in automation, sustainability, and use of AI as we enable our customers to efficiently deploy and operate Open RAN based end-to-end cloud-native networks,” said Mavenir CEO and president Pardeep Kohli in a statement. “Our unique strategy incorporates best practices from the hyperscale, cloud and IT industries, to transform how the world connects and builds the future of networks.” Kohli has been with Mavenir for years — initially directly with the company and then reappointed the head of the business after his next employer — Xura, where he was also the CEO — was acquired and rolled up into Mavenir.

“This investment enables Mavenir to further scale its business and maintain its leadership in Open RAN and 5G transformation,” said Hubert de Pesquidoux, a Siris executive partner who is also chairman of Mavenir, in a statement. “We firmly believe in the automated networks of the future that are cloud-native, AI-native and Green-native, and we are confident that Mavenir’s innovations are essential in driving that evolution.”

Mavenir raises $100M to build more AI into its cloud-based automated network technology for telecoms services by Ingrid Lunden originally published on TechCrunch

Amazon’s AWS cozies up to carriers, launches 2 services to build and operate networks in the cloud

Amazon has been working on ramping up how it works with telecoms carriers as customers and partners — an ambition pushed in no small part by slowing growth for cloud services overall at AWS and its big rivals Microsoft Azure and Google Cloud. Now, one week ahead of MWC in Barcelona — one of the biggest trade gatherings in the telecoms industry — AWS is announcing two big products in aid of that: a “Telco Network Builder” for carriers to use its cloud to build and scale 5G and other telecoms networks; and a service to use AWS to build and manage private wireless networks for enterprises.

The two new services — which Amazon describes as “offerings” — are meant to complement (and give a head start on) news that AWS plans to put out next week at MWC, detailing how it’s working with carriers — and working on building more trust with them — with tools to give third-party access to networks to build services and more.

The telco network builder will see Amazon opening up its cloud network so that telcos can plan, run and scale 5G, 4G, and other networks more quickly, by turning them into managed services banked around AWS infrastructure.

Carrier customers, AWS said, will use a template to detail parameters like connection points, networking requirements, compute, and geographies; these are then run through an automated engine to build out a network architecture. That architecture (unsurprisingly) will include AWS compute and other AWS resources, with the sweetener being that the process can be carried out and adjusted and updated over a period of hours, versus the days or weeks or months that it typically takes to provision networks. The idea here is that carriers need to work in more dynamic ways these days — whether it’s to boost network capacity during specific event-based surges, or because people are taking up (or quitting…) a new service, or it’s picking up business customers and working on quick turnarounds for their services.

On top of this is the “burden” of 5G: it’s been a big investment to build out the latest generation of network infrastructure, so carriers are now driving hard on building new services to generate revenue from those networks, with one of their main targets being B2B and enterprise opportunities. The idea here is that making it easier to build those networked services will reduce the costs. It’s not quite “build it and they will come” (a mantra that spelled disaster for the telco industry 20 years ago) but it’s build the ability to build fast, in case they come.

The second product is in that a regard a continuation on that theme. It takes on some of the makings of the network builder and applies it to how carriers can provision private wireless networks. These are essentially mini service providers of their own, which are often used by smaller carriers or larger enterprises that run their business data and voice networks like small telecoms service providers in themselves. The big selling points for private wireless networks is that they are potentially more robust, more cost-effective, and more secure than WiFi networks.

Typically a private network stitches together network capacity from multiple carriers in multiple regions. AWS has a massive global footprint for its cloud business, which gives it a good basis for building and provisioning that, and it also already has a number of carrier partners signed up to underpin that with regional network capacity, including T-Mobile and Deutsche Telekom, Orange, Telefonica and KDDI, with more reportedly coming on and getting announced alongside these.

The idea here is that AWS will act as the portal, but telcos will be the managed service providers for the network on behalf of those enterprises or smaller service providers, the company said. As with the telco network builder, AWS will provide a dashboard for monitoring performance and modifying it as needed.

“That’s one of the friction points we saw as we started looking at the private network space,” said Ishwar Parulkar, chief technologist for the telco industry at AWS, in an interview. “There are a lot of enterprise customers who really don’t care about all of this. They just want to be able to use the network and run some applications on top. That’s one of the primary values that we bring with this: lifting that undifferentiated work away from them and managing it in the cloud.”

For Amazon, telcos represent a prime business opportunity: as carriers build new networks with increasing reliance on software and cloud services, Amazon is positioning itself as a tech and cloud partner to help run those services better and more cheaply.

But it’s been interesting to watch how it has worked to build trust among a group of businesses that have at times been very wary of big tech and the threat of being reduced to “dumb pipes” as tech companies lean on their own architecture and technology advances to build faster and cheaper services that compete directly with what carriers have and plan to roll out. As one example, the company is clear to call these new products “offerings” and not services to make clear that it is not the managed service provider, the carriers’ role.

“We’ve been on this journey for a few years now in terms of really getting the cloud to run telco networks,” said Parulkar. “Our goal here is to make AWS the best place to host 5g networks for both public and private. And on that journey, we’ve been making steady progress.”

For carriers, they are now in a world where arguably communications is just another tech service, so many of them believe that running them with less costs and in more flexible ways will be the key to winning more business, introducing more services and getting better margins. Whether carriers want to wholesale work closer with Amazon, or with any of the cloud providers, for such services, will be the big question.

Amazon’s AWS cozies up to carriers, launches 2 services to build and operate networks in the cloud by Ingrid Lunden originally published on TechCrunch

Sinch acquires Inteliquent for $1.14B to take on Twilio in the US

After raising $690 million from SoftBank in December to make acquisitions, the Sweden-based cloud communications company Sinch has followed through on its strategy in that department. Today the company announced that it is acquiring Inteliquent, an interconnection provider for voice communications in the U.S. currently owned by private equity firm GTCR, for $1.14 billion in cash.

And to finance the deal, Sinch said it has raised financing totaling SEK8.2 billion — $986 million — from Handelsbanken and Danske Bank, along with other facilities it had in place.

The deal will give Sinch — a competitor to Twilio with a range of messaging, calling and marketing (engagement) APIs for those building communications into their services in mobile apps and other services — a significant foothold in the U.S. market.

Inteliquent — a profitable company with 500 employees and revenues of $533 million, gross profit of $256 million, and Ebitda of $135 million in 2020 — claims to be one of the biggest voice carriers North America, serving both other service providers and enterprises. Its network connects to all the major telcos, covering 94% of the U.S. population, with more than 300 billion minutes of voice calls and 100 million phone numbers handled annually for customers.

Sinch is publicly traded in Sweden — where its market cap is current at $13 billion (just over 108 billion Swedish krona) — and the acquisition begs the question of whether the company plans to establish more of a financial presence in the U.S., for example with a listing there. We have asked the company what its next steps might be and will update this post as and when we learn more.

“Becoming a leader in the U.S. voice market is key to establish Sinch as the leading global cloud communications platform,” said Oscar Werner, Sinch CEO, in a statement. “Inteliquent serves the largest and most demanding voice customers in America with superior quality backed by a fully-owned network across the entire U.S.. Our joint strengths in voice and messaging provide a unique position to grow our business and power a superior customer experience for our customers.”

Inteliquent provides two main areas of service, Communications-Platform-as-Service (CPaaS) for API-based services to provide voice calling and phone numbers; and more legacy Infrastructure-as-a-Service (IaaS) products for telcos such as off-net call termination (when a call is handed off from one carrier to another) and toll-free numbers. These each account for roughly half of the total business although — unsurprisingly — the CPaaS business is growing at twice the rate of IaaS.

Its business, like many others focusing on services for people who are relying more on communications services as they are seeing each other in person less — saw a surge of use this past year, it said. (Revenues adjusted without Covid lift, it noted, would have been $499 million, so still healthy.)

Sinch is focused on delivering unparalleled customer experiences at scale and with the investors we have today, we believe we have the financial muscle for both extensive product development and M&A that is needed to take advantage of a consolidating global market as we continue building the leading CPaaS company,” Werner told TechCrunch over email.

As for Sinch, since spinning out from Rebtel in 2014 to take on the business of providing comunications tools to developers, it has been on an acquisition roll to bulk up its geographical reach and the services that it provides to those customers.

Deals have included, most recently, buying ACL in India for $70 million and SAP’s digital interconnect business for $250 million. The deals — combined with Twilio’s own acquisitions of companies like Sendgrid for $2 billion and last year’s Segment for $3.2 billon, speak both to the bigger trend of consolidation in the digital (API-based) communications space, as well as the huge value that is contained within it.

Inteliquent itself had been in private equity hands before this, controlled by GTCR based in Chicago, like Inteliquent itself. According to PitchBook, its most recent financing was a mezzanine loan from Oaktree Capital in 2018 for just under $19 million.

Interestingly, Inteliquent itself has been an investor in innovative communications startups, participating in a Series B for Zipwhip, a startup that is building better ways to integrate mobile messaging tools into landline services.

“We’re excited about the tremendous opportunities this combination unlocks, expanding the services we can provide to our customers. Combining our leading voice offering with Sinch’s global messaging capabilities truly positions us for leadership in the rapidly developing market for cloud communications“, comments Ed O’Hara, Inteliquent CEO, in a statement.

Cellwize raises $32M to help carriers and their partners adopt and run 5G services

As 5G slowly moves from being a theoretical to an active part of the coverage map for the mobile industry — if not for consumers themselves — companies that are helping carriers make the migration less painful and less costly are seeing a boost of attention.

In the latest development, Cellwize, a startup that’s built a platform to automate and optimize data for carriers to run 5G networks within multi-vendor environments, has raised $32 million — funding that it will use to continue expanding its business into more geographies and investing in R&D to bring more capabilities to its flagship CHIME platform.

The funding is notable because of the list of strategic companies doing the investing, as well as because of the amount of traction that Cellwize has had to date.

The Series B round is being co-led Intel Capital and Qualcomm Ventures LLC, and Verizon Ventures (which is part of Verizon, which also owns TechCrunch by way of Verizon Media) and Samsung Next, with existing shareholders also participating. That list includes Deutsche Telekom and Sonae, a Portuguese conglomerate that owns multiple brands in retail, financial services, telecoms and more.

That backing underscores Cellwize’s growth. The company — which is based in Israel with operations also in Dallas and Singapore — says it currently provides services to some 40 carriers (including Verizon, Telefonica and more), covering 16 countries, 3 million cell sites, and 800 million subscribers.

Cellwize is not disclosing its valuation but it has raised $56.5 million from investors to date.

5G holds a lot of promise for carriers, their vendors, handset makers and others in the mobile ecosystem: the belief is that faster and more efficient speeds for wireless data will unlock a new wave of services and usage and revenues from services for consumers and business, covering not just people but IoT networks, too.

Notwithstanding the concerns some have had with health risks, despite much of that theory being debunked over the years, one of the technical issues with 5G has been implementing it.

Migrating can be costly and laborious, not least because carriers need to deploy more equipment at closer distances, and because they will likely be running hybrid systems in the Radio Access Network (RAN, which controls how devices interface with carriers’ networks); and they will be managing legacy networks (eg, 2G, 3G, 4G, LTE) alongside 5G, and working with multiple vendors within 5G itself.

Cellwize positions its CHIME platform — which works as an all-in-one tool that leverages AI and other tech in the cloud, and covers configuring new 5G networks, optimizing and monitoring data on them, and also providing APIs for third-party developers to integrate with it — as the bridge to letting carriers operate in the more open-shop approach that marks the move to 5G.

“While large companies have traditionally been more dominant in the RAN market, 5G is changing the landscape for how the entire mobile industry operates,” said Ofir Zemer, Cellwize’s CEO. “These traditional vendors usually offer solutions which plug into their own equipment, while not allowing third parties to connect, and this creates a closed and limited ecosystem. [But] the large operators also are not interested in being tied to one vendor: not technology-wise and not on the business side – as they identify this as an inhibitor to their own innovation.”

Cellwize provides an open platform that allows a carrier to plan, deploy and manage the RAN in that kind of multi-vendor ecosystem. “We have seen an extremely high demand for our solution and as 5G rollouts continue to increase globally, we expect the demand for our product will only continue to grow,” he added.

Previously, Zemer said that carriers would build their own products internally to manage data in the RAN, but these “struggle to support 5G.”

The competition element is not just lip service: the fact that both Intel and Qualcomm — competitors in key respects — are investing in this round underscores how Cellwize sees itself as a kind of Switzerland in mobile architecture. It also underscores that both view easy and deep integrations with its tech as something worth backing, given the priorities of each of their carrier customers.

“Over the last decade, Intel technologies have been instrumental in enabling the communications industry to transform networks with an agile and scalable infrastructure,” said David Flanagan, VP and senior MD at Intel Capital, in a statement. “With the challenges in managing the high complexity of radio access networks, we are encouraged by the opportunity in front of Cellwize to explore ways to utilize their AI-based automation capabilities as Intel brings the benefits of cloud architectures to service provider and private networks.”

“Qualcomm is at the forefront of 5G expansion, creating a robust ecosystem of technologies that will usher in the new era of connectivity,” added Merav Weinryb, Senior Director of Qualcomm Israel Ltd. and MD of Qualcomm Ventures Israel and Europe. “As a leader in RAN automation and orchestration, Cellwize plays an important role in 5G deployment. We are excited to support Cellwize through the Qualcomm Ventures’ 5G global ecosystem fund as they scale and expedite 5G adoption worldwide.”

And that is the key point. Right now there are precious few 5G deployments, and sometimes, when you read some the less shiny reports of 5G rollouts, you might be forgiven for feeling like it’s more marketing than reality at this point. But Zemer — who is not a co-founder (both of them have left the company) but has been with it since 2013, almost from the start — is sitting in on the meetings with carriers, and he believes that it won’t be long before all that tips.

“Within the next five years, approximately 75% of mobile connections will be powered by 5G, and 2.6 billion 5G mobile subscriptions will be serving 65% of the world’s population,” he said. “While 5G technology holds a tremendous amount of promise, the reality is that it is also hyper-complex, comprised of multiple technologies, architectures, bands, layers, and RAN/vRAN players. We are working with network operators around the world to help them overcome the challenges of rolling out and managing these next generation networks, by automating their entire RAN processes, allowing them to successfully deliver 5G to their customers.”

FCC declares Huawei, ZTE ‘national security threats’

The Federal Communication Commission has declared Chinese telecom giants Huawei and ZTE as a “national security threat,” banning U.S. telecom companies from using federal funds to buy and install Huawei and ZTE equipment.

FCC chairman Ajit Pai said that the “weight of evidence” supported the decision to ban the technology giant. Federal agencies and lawmakers have long claimed that the tech giants are subject to Chinese law, which “obligates them to cooperate with the country’s intelligence services,” Pai said.

“We cannot and will not allow the Chinese Communist Party to exploit network vulnerabilities and compromise our critical communications infrastructure,” the FCC said in a separate statement.

Huawei and ZTE have repeatedly rejected the claims.

The order, published by the FCC on Tuesday, said the designation takes immediate effect, but it’s not immediately clear how the designation changes the status quo.

In November of last year, the FCC announced that companies deemed a national security threat would be ineligible to receive any money from the Universal Service Fund. The $8.5B USF is the FCC’s main way of purchasing and subsidizing equipment and services to improve connectivity across the country.

Huawei and ZTE were “initially designated” as security threats at the time, but the formal process of assigning them that status has taken place in the intervening months, resulting in today’s declaration.

We’ve asked the FCC for comment but did not immediately hear back. In a public statement, Commissioner Geoffrey Starks explained that labeling the companies threats is a start, but that there is a great deal of Huawei and ZTE equipment already in use that needs to be identified and replaced.

“The Commission has taken important steps toward identifying the problematic equipment in our systems, but there is much more to do,” he wrote. “Funding is the missing piece. Congress recognized in the Secure and Trusted Communications Networks Act that many carriers will need support to transition away from untrustworthy equipment, but it still has not appropriated funding for replacements.”

The declaration is the latest move by the FCC to crack down on Chinese technology providers seen as a potential national security threat, fearing that they could be compelled to comply with demands from Chinese intelligence services, putting both Americans and U.S. networks at risk of surveillance or espionage. But it puts telecom companies working to expand their 5G coverage in a bind. Huawei and ZTE are seen as leading the way in 5G, far ahead of their American rivals.

Many of the claims against Huawei and ZTE stem from a 2012 House inquiry, at which the companies were first labeled a potential threat.

Spokespeople for Huawei and ZTE did not immediately comment.

Liberty’s Virgin Media and Telefonica’s O2 to merge in the UK in $39B deal

The regulators said “NO” when Telefonica tried to combine its O2 operations in the UK with rival carrier, Hutchison-owned Three, back in 2015. But Telefonica didn’t let go of the idea of divestment, and five years later, in the middle of a health pandemic with related threats of a global economic depression looming over us, comes the latest effort on that front.

Telefonica and Liberty Global today announced a plan to merge the Spanish telco’s UK mobile carrier O2 with Virgin Media, a pay-TV and broadband provider in the country owned by Liberty.

The deal is huge. Based on a valuation of £12.7 billion for O2 and £18.7 billion for Virgin media, it works out to a combined enterprise valuation of £31.4 billion, or nearly $39 billion at current rates. It will create a business with 46 million video, broadband and mobile subscribers and £11 billion of revenue, the companies said.

As a point of reference, BT — one of Virgin’s and O2’s biggest competitors on the fixed-line, broadband and TV front, which long ago used to own O2 before spinning it out — is valued at only £10.4 billion, or $12.8   billion. Vodafone — a big competitor mostly on mobile — is valued at $358.95 billion, or $456 billion, although it has vast international holdings; its UK business would represent a fraction of that.

O2 is coming into the deal on a debt-free basis while Virgin Media is bringing “£11.3 billion of net debt and debt-like items” into the marriage. The transaction, they said, is expected to close around the middle of 2021 and is subject to regulatory approvals.

The deal underscores the bigger consolidation trend that has been playing out for years, where smaller and more narrowly focused businesses are coming together with those that offer either complementary services to offer better bundles, or overlapping ones for more economies of scale.

But its timing is also very notable. As we’ve pointed out before, M&A activity has largely slowed down in the current market, but we’re still seeing deals (and funding rounds) in cases where the price is right or a business is worth keeping around and bolstering.

This deal ticks both of those boxes, but you could add a third line of reasoning, which is that we may be in a more likely moment to see these deals get a nod when they might have been scrutinised more in the past. Both Telefonica and Liberty Global have had tastes of costly M&A efforts thwarted after regulators put up flags over antitrust violations.

Vodafone’s efforts to buy Liberty Global assets some years ago pointedly did not include Virgin Media in the UK as a result of that, and of course Telefonica’s previous efforts to divest O2 in a merger with Three went nowhere, also out of competition concerns.

However, we are seeing a different tack at the moment from regulators, who have pointedly said that not only are they aiming to approve and clear faster a backlog of deals, but to give them a more open-minded treatment given the current state of the market, to keep the economy turning.

The Competition and Markets Authority outlined its updated approach in its recent decision to approve a merger between Takeaway.com and JustEat, a deal that had been in the works for months:

“During the COVID-19 outbreak, the CMA is working with businesses where it can to be flexible – for example, by recognising that there may be delays in providing the information it needs to conduct investigations,” it said at the time. “However, it is also trying to complete investigations efficiently at this time, wherever possible, to provide businesses with certainty. In this case, the CMA was able to publish its final decision 26 days ahead of the statutory deadline.”

That doesn’t mean, of course, that existing rivals will not make appeals to block or change the terms of the deal, nor that they may not themselves seek to start some M&A activity of their own in response.

In the case of O2 and Virgin Media, the deal is very complementary, since the former’s primary and strongest business continues to be as a mobile carrier, while Virgin Media’s is of being a broadband and pay-TV provider. Both have operations in each other’s service areas but not nearly at the same scale.

“Combining O2’s number one mobile business with Virgin Media’s superfast broadband network and entertainment services will be a game-changer in the U.K., at a time when demand for connectivity has never been greater or more critical,” said Telefonica CEO, Jose Maria Alvarez-Pallete, in a statement. “We are creating a strong competitor with significant scale and financial strength to invest in UK digital infrastructure and give millions of consumer, business and public sector customers more choice and value. This is a proud and exciting moment for our organisations, as we create a leading integrated communications provider in the U.K.”

Mike Fries, Chief Executive Officer of Liberty Global, added in his own statement: “We couldn’t be more excited about this combination. Virgin Media has redefined broadband and entertainment in the U.K. with lightning fast speeds and the most innovative video platform. And O2 is widely recognized as the most reliable and admired mobile operator in the U.K., always putting the customer first. With Virgin Media and O2 together, the future of convergence is here today. We’ve seen the benefit of FMC first-hand in Belgium and the Netherlands. When the power of 5G meets 1 gig broadband, U.K. consumers and businesses will never look back. We’re committed to this market and are right behind the Government’s digital and connectivity goals.”

The House and Senate finally agree on something: Robocalls

In these times of political strife, it’s nice that despite our differences we can still band together as a nation in the face of a catastrophe that affects us all equally. I speak, of course, of robocalls, and it seems that the House and Senate have put their differences aside for the present in order to collaborate on a law combating this scourge.

Despite a great deal of FCC, a few high-profile fines, and some talk from telecoms about their plans to implement new anti-robocall standards, half the country’s phones are still blowing up regularly with recordings and scammers on the other side.

If regulators find it difficult to act, ultimately what’s needed is legislation, and lawmakers — who no doubt are receiving the calls themselves, which might have given the task a special urgency.

As often happens in Congress, two competing versions of the bill emerged to address this issue, and both passed in their respective chambers earlier this year. Now the leaders of the committees involved have announced an “agreement in principle” that will hopefully allow them to pass a unified version of the bill.

The “Pallone-Thune TRACED Act” owes its name to its primary sponsors — Rep. Pallone (D-NJ) and Sen. John Thune (R-SD) — and the earlier and superior acronym from the House act, Telephone Robocall Abuse Criminal Enforcement and Deterrence.

“Our agreement will require telephone carriers to verify calls and allow robocalls to be blocked in a consistent and transparent way, all at no extra charge to consumers. The agreement also gives the FCC and law enforcement the ability to quickly go after scammers,” said Rep. Pallone in a statement accompanying the news.

The bill text is expected to be finalized in a matter of days, and it will hopefully make it onto the legislative calendar in a hurry.

Meanwhile the FCC has been waiting patiently for telecoms to implement SHAKEN/STIR, an anti-spoofing measure they can implement on their networks, repeatedly warning that it will eventually take action if they don’t. A resolution in June made clear that robocalls from outside the country are legal to block, but didn’t say anything about potential fees. Fortunately the act mentioned above does make sure consumers don’t get dinged for the service.

FCC’s broadband deployment report called ‘fundamentally at odds with reality’

The FCC has officially issued this year’s Broadband Deployment Report, summarizing the extent to which the agency and industry have closed the digital divide in this country. But not everyone agrees with it: “The rosy picture the report paints about the status of broadband deployment is fundamentally at odds with reality,” said Geoffrey Starks in a lengthy dissenting statement.

The yearly report, mandated by Congress, documents things like new broadband customers in rural areas, broadband expanding to new regions, and all that sort of thing. The one issued today proclaims cheerfully:

[The FCC] has made closing the digital divide between Americans with, and without, access to modern broadband networks its top priority. As a result of those efforts, the digital divide has narrowed substantially, and more Americans than ever before have access to high-speed broadband.

We find, for a second consecutive year, that advanced telecommunications capability is being deployed on a reasonable and timely basis.

Naturally the FCC wants to highlight the progress made rather than linger on failures, but this year the latter are highly germane, as Starks points out, largely because one error in particular threw off the results by millions.

The statistics in the report are based on forms filled out by broadband providers, which seem to go unchecked even in the case of massive outliers. Barrier Free broadband reported having gone from zero subscribers in March of 2017 to,  seven months later, serving the entirety of New York state’s 62 million residents with state of the art gigabit fiber connections. There are so many things wrong with this filing that the freshest intern at the Commission should have flagged it as suspect.

Instead, the data was accepted as gospel, and only a full year later did reporters at Free Press notice the discrepancy and call it to the FCC’s attention.

That this error, so enormous in scope, so obvious, and so consequential (it skewed the national numbers by large amounts), was not detected, and once detected was only cursorily addressed, leaves Starks flabbergasted:

The fact that a 2019 Broadband Deployment Report with an error of over 62 million connections was circulated to the full Commission raises serious questions. Was the Chairman’s office aware of the errors when it circulated the draft report? If not, why didn’t an “outlier” detection function raise alarms with regard to Barrier Free? Also, once the report was corrected, the fact that such a large number of connections came out of the report’s underlying data without changing the report’s conclusion, and without resulting in a substantial charge to the report, calls into question the extent to which the report and its conclusions depend on and flow from data.

In other words, if the numbers can change that much and the conclusions stay the same, what exactly are the conclusions based on?

Starks is the latest Commissioner to be appointed and one of the two Democrats there, the other being Jessica Rosenworcel (the Commission maintains a 3:2 party balance in favor of the current administration). Both have been outspoken in their criticism of the way the Broadband Deployment Report is researched and issued.

It’s the same data used to create the FCC’s broadband map, which ostensibly shows what carriers and speeds are available in your area. But the issues with this are many and various.

The data is only broken down by census tract, a unit that varies a great deal in size — some are tiny, some enormous. Yet if one company provides service to one person in that tract, it is considered “served” with that broadband capability throughout. The resulting map is so full of inaccuracies as to be useless, many argue — including Microsoft, which recently said it had observed “significant discrepancies across nearly all counties in all 50 states.”

The good news is that the FCC is aware of this and currently working on ways to improve data gathering. In future years better rules or more location-specific reporting could make the maps and deployment report considerably better. But at present, Starks concludes, “I don’t believe that we know what the state of broadband deployment is in the U.S. with sufficient accuracy.”

Commissioner Rosenworcel was similarly unsparing in her dissent.

“This report deserves a failing grade,” she wrote. “Putting aside the embarrassing fumble of the FCC blindly accepting incorrect data for the original version of this report, there are serious problems with its basic methodology. Time and again this agency has acknowledged the grave limitations of the data we collect to assess broadband deployment.”

The data also do not address problems that are unlikely to be addressed in forms filled out by the industry, such as redlining, shady business practices, and high prices for the broadband that is available.

“We will never manage problems we do not measure,” she continued. “Our ability to address the challenge of uneven internet access across the country is only made more challenging by our inability to be frank about the state of deployment today. Moreover, we need to be thoughtful about how impediments to adoption, like affordability, are an important part of the digital equity equation and our national broadband challenge.”

The Republican Commissioners, Brendan Carr and Michael O’Rielly, supported the report and did not mention the systematic data sourcing problems or indeed the enormous error that caused the draft of this report to be totally off base. O’Rielly did have an objection, however. He is “dismayed by the report’s reliance on purported ‘insufficient evidence’ as a basis for maintaining—for yet another year in a row—an outdated siloed approach to evaluating fixed and mobile broadband, rather than examining both markets as one.”

This has been suggested before and is a dangerously bad idea.

It should be said that the report isn’t one big single error. There’s more to it than just repackaging the aspirational numbers of the telecoms industry — though that’s a big part. It still holds interesting data that can be used in apples-to-apples comparisons to previous years. But more than ever it sounds like that data and any conclusions made from it — or for that matter rules or legislation — should be taken with a grain of salt.

Europe to cap intra-EU call fees as part of overhaul to telecoms rules

European Union institutions have reached a political agreement over an update to the bloc’s telecoms rules that’s rattled the cages of incumbent telcos.

Agreement was secured late yesterday after months of negotiations between the EU parliament and Council, with the former pushing for and securing a price cap on international calls within the bloc — of no more than 19 cents per minute. Texts will also be capped at a maximum of 6 cents each, Reuters reports.

While roaming charges for EU travelers were abolished across the bloc last summer, the parliament was concerned that charges for calls and texts between EU Member States is often disproportionately high — hence pushing for the cap, which was not in the original EC proposal.

The Commission proposed a new European Electronic Communications Code back in 2016, to modernize telecoms rules that had stood since 2009 — to take account of technology and market shifts, and align the rules with its wider Digital Single Market strategy.

The proposal broadly focused on pushing for consistency in spectrum policy and management; reducing regulatory fragmentation; ensuring a level playing field for market players and protections for consumers; and incentivizing investment in high-speed broadband networks.

And on the incentivization front, the new rules agreed yesterday update the powers of national regulators to act against dominant players — such as by being able to impose access to their network.

For a case study on why such interventions might be necessary you could look at the fiber investment and network-access foot-dragging of a former incumbent telco such as BT in the UK, for example, which has long favored eking out copper. While its network infrastructure division OpenReach was last year ordered to be legally separated — around a decade after it was functionally separated by the regulator. Yet complaints over BT’s lack of investment in broadband infrastructure and access for rivals to its networks have, nonetheless, persisted.

On the consumer front, the new EU telecoms Code also includes measures intended to make it easier to change service provider and keep the same phone number; measures around tariff transparency to make it easier for people to compare contractual offers, and the ability to terminate a contract without incurring additional costs; as well as additional protections around bundled services.

For operators there are deregulation measures for co-investments — intended to promote “risk sharing in the deployment of very high capacity networks”. And the Code sets wireless spectrum licenses at at least 20 years — also intended to give carriers the “predictability” they need to speed up 5G and fiber deployments.

Though this is shorter than operators had hoped, and the European Telecommunications Network Operators’ Association (ETNO) — whose membership is made up of incumbent telcos such as BT — has been quick to voice its displeasure, describing the code as a “missed opportunity“, and complaining that it adds extra complexity while also failing to incentivize investment.

“The Code will not ignite the much needed rush to invest in 5G and fibre networks and it will add complexity to an already burdensome system,” it writes. “The agreed law foresees only limited progress on spectrum policy, a complex and watered down compromise on incentivising fibre investment, uncertain triggers for imposing regulatory remedies and no fair playing field for digital services users and providers.”

Smaller, fiber-to-the-home broadband players are sounding much happier though…

ETNO also criticizes what it describes as “the unfortunate decision to regulate intra-EU calls” — arguing this is an unjustified, populist measure, and sniping that it creates legal uncertainty by setting what it couches as “a highly dangerous precedent for all other European industries”.

That’s not the view of the European Consumer Organization, BEUC, which describes the measure as “a good next step towards a real single market for consumers”.

“Consumers should no longer have to worry about excessive costs when calling another EU country from home. The end of roaming charges was a big first step, but it did not deal with the high costs of phone calls to another EU country when at home,” its director general, Monique Goyens, told us in a statement.

“Market concentration is bad for prices and consumer choice. A small group of players should not be able to take control of the market. Thanks to what has been agreed, national regulators can take measures to intervene and maintain a healthy level of competition,” she added.

“Telecom services regularly rank among the top most complained-about markets. This new law upgrades some important consumer protection measures. Telecom clients will for instance be able to end their contract early and choose a better deal.”

And of course the Commission is putting a positive spin on the outcome, two years on from its proposal to modernize the rules.

In a statement welcoming the end of the negotiations, Andrus Ansip, the VP in charge of the Digital Single Market, said: “This agreement is essential to meet Europeans’ growing connectivity needs and boost Europe’s competitiveness. We are laying the groundwork for the deployment of 5G across Europe.”

In another supporting statement, Mariya Gabriel, commissioner for digital economy and society, described the new rules as “bold and balanced” — saying they would provide “faster access to radio spectrum, better services and more protection for consumers, as well as greater investment in very high speed networks”.

While political accord on the new telecoms code has indeed been reached between the EU institutions, members of the EU parliament and Council still need to vote to adopt it — after which the bloc’s Member States will have two years to transpose it into their national laws.

Europe to cap intra-EU call fees as part of overhaul to telecoms rules

European Union institutions have reached a political agreement over an update to the bloc’s telecoms rules that’s rattled the cages of incumbent telcos.

Agreement was secured late yesterday after months of negotiations between the EU parliament and Council, with the former pushing for and securing a price cap on international calls within the bloc — of no more than 19 cents per minute. Texts will also be capped at a maximum of 6 cents each, Reuters reports.

While roaming charges for EU travelers were abolished across the bloc last summer, the parliament was concerned that charges for calls and texts between EU Member States is often disproportionately high — hence pushing for the cap, which was not in the original EC proposal.

The Commission proposed a new European Electronic Communications Code back in 2016, to modernize telecoms rules that had stood since 2009 — to take account of technology and market shifts, and align the rules with its wider Digital Single Market strategy.

The proposal broadly focused on pushing for consistency in spectrum policy and management; reducing regulatory fragmentation; ensuring a level playing field for market players and protections for consumers; and incentivizing investment in high-speed broadband networks.

And on the incentivization front, the new rules agreed yesterday update the powers of national regulators to act against dominant players — such as by being able to impose access to their network.

For a case study on why such interventions might be necessary you could look at the fiber investment and network-access foot-dragging of a former incumbent telco such as BT in the UK, for example, which has long favored eking out copper. While its network infrastructure division OpenReach was last year ordered to be legally separated — around a decade after it was functionally separated by the regulator. Yet complaints over BT’s lack of investment in broadband infrastructure and access for rivals to its networks have, nonetheless, persisted.

On the consumer front, the new EU telecoms Code also includes measures intended to make it easier to change service provider and keep the same phone number; measures around tariff transparency to make it easier for people to compare contractual offers, and the ability to terminate a contract without incurring additional costs; as well as additional protections around bundled services.

For operators there are deregulation measures for co-investments — intended to promote “risk sharing in the deployment of very high capacity networks”. And the Code sets wireless spectrum licenses at at least 20 years — also intended to give carriers the “predictability” they need to speed up 5G and fiber deployments.

Though this is shorter than operators had hoped, and the European Telecommunications Network Operators’ Association (ETNO) — whose membership is made up of incumbent telcos such as BT — has been quick to voice its displeasure, describing the code as a “missed opportunity“, and complaining that it adds extra complexity while also failing to incentivize investment.

“The Code will not ignite the much needed rush to invest in 5G and fibre networks and it will add complexity to an already burdensome system,” it writes. “The agreed law foresees only limited progress on spectrum policy, a complex and watered down compromise on incentivising fibre investment, uncertain triggers for imposing regulatory remedies and no fair playing field for digital services users and providers.”

Smaller, fiber-to-the-home broadband players are sounding much happier though…

ETNO also criticizes what it describes as “the unfortunate decision to regulate intra-EU calls” — arguing this is an unjustified, populist measure, and sniping that it creates legal uncertainty by setting what it couches as “a highly dangerous precedent for all other European industries”.

That’s not the view of the European Consumer Organization, BEUC, which describes the measure as “a good next step towards a real single market for consumers”.

“Consumers should no longer have to worry about excessive costs when calling another EU country from home. The end of roaming charges was a big first step, but it did not deal with the high costs of phone calls to another EU country when at home,” its director general, Monique Goyens, told us in a statement.

“Market concentration is bad for prices and consumer choice. A small group of players should not be able to take control of the market. Thanks to what has been agreed, national regulators can take measures to intervene and maintain a healthy level of competition,” she added.

“Telecom services regularly rank among the top most complained-about markets. This new law upgrades some important consumer protection measures. Telecom clients will for instance be able to end their contract early and choose a better deal.”

And of course the Commission is putting a positive spin on the outcome, two years on from its proposal to modernize the rules.

In a statement welcoming the end of the negotiations, Andrus Ansip, the VP in charge of the Digital Single Market, said: “This agreement is essential to meet Europeans’ growing connectivity needs and boost Europe’s competitiveness. We are laying the groundwork for the deployment of 5G across Europe.”

In another supporting statement, Mariya Gabriel, commissioner for digital economy and society, described the new rules as “bold and balanced” — saying they would provide “faster access to radio spectrum, better services and more protection for consumers, as well as greater investment in very high speed networks”.

While political accord on the new telecoms code has indeed been reached between the EU institutions, members of the EU parliament and Council still need to vote to adopt it — after which the bloc’s Member States will have two years to transpose it into their national laws.