December 2010

Ofcom’s fifth annual report on the consumer experience of telecoms, the Internet and digital broadcasting discusses the results of research which measured how well consumers have fared over the past year in their use of these services.

Key findings include:

• Increases in take-up levels across all communications services, except fixed line
• Consumer awareness of choice in communications services varies by market
• Switching levels have remained stable across most markets while levels of engagement are falling in all but the broadband and TV markets
• An improvement in a number of areas of consumer complaints
• While fixed-line mis-selling, silent calls and customer service continue to be the main complaint generators, there have been significant developments in these areas in 2010

The European Telecommunications Network Operators association (ETNO) has called upon EU telecoms ministers to create conditions that will stimulate private sector investment in mobile and fixed next-generation networks. ETNO stresses the importance of opening the 'digital dividend' spectrum band to prevent the 'digital divide' and to address the huge increase in mobile data traffic.

Analysts are applauding the Federal Communication Commission's endorsement of usage-based pricing for Internet broadband as part of the FCC chairman's network neutrality proposal.

The move, they say, would be a significant benefit for cable firms concerned that video Web streaming could cause customers to cancel TV service. Craig Moffett, an analyst at Bernstein Research, wrote in a note to investors that the agency's approval of pay-as-you-go broadband access "can't be overstated." "Usage-based pricing will preserve, and even enhance, the economics of cable’s infrastructure... even if consumers eventually get some, or even all, of their video content over the Web," Moffett wrote. "Usage-based pricing is a clear positive for cable/telecom/wireless providers, but it also might be a concern for Netflix," said MF Global analyst Paul Gallant. "Depending on where the tiers were set, usage-based pricing on wire line broadband could end up deterring some people from dropping cable for over-the-top video."

In a filing to the Federal Communications Commission, Comcast contends that the exchange of broadband network traffic it sends out and receives as part of peering agreements with Internet backbone service providers is relatively equal, and where it isn't those fee-free agreements are adjusted, just as they were with Level 3.

Comcast says Level 3 is trying to avoid paying fees the cable company normally charges other providers. Comcast argues that now Level 3, which struck a deal to deliver Netflix traffic, is sending it five times as much traffic as Comcast sends Level 3. Comcast says that in "almost all cases" of fee-free reciprocal agreements with other broadband services companies, the balance "does not approach that [5:1] level," and that across its 40 or so settlement-free peering arrangements, Comcast is actually sending more traffic than receiving in a third of those. It says that in only one of those 40 is the traffic out of balance to the extent that Level 3's is and that in that case Comcast has also informed them that a "settlement-free" peering arrangement is not acceptable, which means Comcast will have to start charging them, too. "Level 3 wants discrimination - in its favor - in a manner that will undermine the well-settled and successful framework that has governed the exchange of traffic on the Internet, around the globe, for a decade," said Comcast. "Instead, we continue to ask that Level 3 work with Comcast to find a reasonable business solution to Level 3's self-inflicted business problem." Comcast has said it is willing to negotiate with Level 3 to resolve the issue, which was being used by public interest groups both as ammunition for online access conditions on the Comcast/NBCU merger and for adopting network neutrality rules.