Tag: Verizon

Data centres are an albatross

General_FOLDER_16 July_Albatross (RL_30June2015)This week Verizon and CenturyLink have been off-loading their data centre investments suggesting that the days of everyone+dog wanting a data centre business are past.

IT and telco providers are concluding that owning datacentres is too much of an effort and are off-loading them as soon as they can find a buyer.

Verizon this week flogged 29 datacentres to Equinix for $3.6 billion in a deal involving the transfer of 250 staff.

CenturyLink closed the sale of its data centre and colocation business, which has 700 staff, to a consortium of private equity investors.

In all cases the moves have been to release capital into their businesses. The companies feel it is better to invest in things like networks, instead of trying to support datacentres – particularly when there might be companies out there better suited to it.

UK-based resellers and hosting players are also having to re-assess their data centre strategies.

With more use of the cloud happening, even companies that own their own data centres are having to become increasingly technology-agnostic and data centre owning companies are having to change their operations.

Enterprises will adopt internet of things

Internet of ThingsA report commissioned by Verizon looks today at enterprise adoption of the internet of things (IoT).

While only 10 percent of organisations currently are using IoT extensively, that picture will rapidly change.

Verizon said it saw a 45 percent increase in its IoT business last year, and a 135 percent increase in activations using 4G LTE, year on year.

The highest growth sector is manufacturing which saw a 204 percent increase in 2014, but other sectors are showing big growth figures too – finance and insurance experienced a 128 percent increase and media and entertainment 120 percent increase.

Verizon has a dedicated IoT VP. Mark Bartolomeo said: “IoT covers a multitude of solutions from wearable devices, to remote monitoring of energy management devices to industrial transportation.”

He said Verizon has seen a number of new entrants creating an IoT “roadmap”.

Currently, Verizon estimates that by 2020 there will be around 5.4 billion connections globally.

LTE gains grip on the market

PhoneBy the end of 2014 over 100 million people were using LTE Advanced networks and that’s set to grow so that by 2018 a billion people will be covered.

That’s according to a report from ABI Research which said a number of developments this year will spur the makeup of 4G networks.

Those include an LTE spectrum auction in India on the 25th of this month. France has recently confirmed the 700MHz frequency band can be used for telco services.

ABI Research said it expects “fierce competition” in the marketplace over the next four years as more LTE and LTE Advanced systems are rolled out.

According to ABI, there were 49 commercially available LTE Advanced networks globally, with Europe leading the way, followed by the Asia Pacific region. However, the USA is top in population coverage at 7.8 percent with AT&T, Spring, Verizon and T-Mobile all in the fray to capture the market.

Verizon’s end-to-end encryption has back door

back-doorUS carrier Verizon really does not understand why people want end-to-end encryption on their phone lines.

The outfit just announced that it is bringing in an expensive service which guarantees security by providing the sort of encryption on the line which users want following the Edward Snowden revelations.

Verizon Voice Cypher, the product introduced with the encryption company Cellcrypt, offers business and government customers’ end-to-end encryption for voice calls on iOS, Android, or BlackBerry devices equipped with a special app. The encryption software provides secure communications for people speaking on devices with the app, regardless of their wireless carrier, and it can connect to an organization’s secure phone system. All this will cost you $45 per device each month.

All sounds good but then comes the part which Verizon and Cellcrypt fail to understand why people want their product in the first place.

Cellcrypt and Verizon both say that law enforcement agencies will be able to access communications that take place over Voice Cypher, so long as they are able to prove that there is a legitimate law enforcement reason for doing so.

Seth Polansky, Cellcrypt’s vice president for North America, said building technology to allow wiretapping was not a security risk. “It’s only creating a weakness for government agencies,” he says. “Just because a government access option exists, it doesn’t mean other companies can access it.”

While Verizon is required by US law to build networks that can be wiretapped, the Communications Assistance for Law Enforcement Act requires phone carriers to decrypt communications for the government only if they have designed their technology to make it possible to do so. All Verizon and Cellcrypt needed to do is structure their encryption so that neither company had the information necessary to decrypt the calls, they would not have been breaking the law.

Verizon believes major demand for its new encryption service will come from governmental agencies conveying sensitive but unclassified information over the phone. It might have a point – such agencies want encryption and do not have to worry about others snooping on them.


US manufacturers don’t want enforced net neutrality

U.S.-ManufacturingThe US National Association of Manufacturers  (NAM) has written to congressional and Federal Communications Commission leaders to oppose stricter regulations for Internet service providers.

The FCC is hatching out new plans that would dictate internet service providers’ freedom to manage web traffic on their networks, aiming to ensure that ISPs do not discriminate against any content in ways that could harm competition or consumers.

President Barack Obama wants the FCC to have the strictest rules possible to protect net neutrality. He suggested a legal pathway that would reclassify internet service so it is regulated like a utility.

Needless to say the telecom and cable companies think this will stop them from charging their consumers twice for the same service and they say this will be a bad idea.

NAM wrote that current proposals to regulate the Internet with early 20th Century–era laws severely threaten continued growth.  It urged everyone to oppose any efforts to regulate the open Internet.

Though business groups NAM and the U.S. Chamber of Commerce have both previously submitted comments to the FCC opposing utility-style Internet regulations.

Verizon and AT&T are among 14,000 members of the manufacturers’ association, so we guess we can see where the outfit is coming from.

“The internet and technology is a critical tool for manufacturers to grow their business,” NAM Technology Policy President Brian Raymond said in an interview. “(Our members) get concerned if the government is going to slow down their business in any way and they see this as one of those ways.”

Raymond pointed out that AT&T’s recent tactic of threatening to  pause investments in new high-speed internet connections unless it gets is way is proof that an enforced open internet was a bad idea. Of course you could also argue that AT&T is just trying to scare the FCC into doing what it is told and it will lose a lose a lot of money in the long term if it does not move to high-speed internet connections.

“Whenever there’s a pause in investment by any kind of company due to regulatory uncertainty, it’s going to have a trickle-down effect on the whole manufacturing community,” Raymond said.

Internet of Things “is already here”

Internet of ThingsA report commissioned by Verizon suggests that rather than being science fiction, the Internet of Things (IoT) is already here and producing business results.

Verizon commissioned the Harvard Business Review to conduct a report and that suggested the IoT is already here in the shape of connectivity, cloud computing, and miniaturisation of sensors “making it possible” for over 10 billion devices to be networked.

Nevertheless, HBR’s Analytic Services surveyed 269 business leaders and says the number of deployments is still relatively small.

While estimates say that IoT could add 10s of trillions of dollars to GDP in the next 10 years, HBR says defining it goes way beyond wearable devices, smart meters and connected cars.

The survey, conducted last September on early IoT adopters, concludes those using it were doing so to improve customer services, increase revenues from services and products, better using assets in the field, and picking up additional data for analytics.

Applications include asset tracking, security, fleet management, field force management, energy data management and “condition based monitoring”.

There are challenges to adopting IoT that include pivacy and regulatory compliance.  HBR said most legislation and industry regulations predates the use of IoT.  Managing the sheer amount of data will also be a problem, and finding people with skill sets capable of using IoT data.

The report said in healthcare, Varian, a manufacturer of medical devices, says the IoT meant a 50 percent reduction to repair connected devices.  Pirelli is using the IoT to manage data from sensors embedded in its Cyber Tyre range.  And Ford’s Connected Car Dashboards programme collects and analyses data from cars to better understand driving patterns and behicle performance.

Internet of things war hots up

Internet of ThingsA wave of consolidation in the internet of things (IoT) market is assured in the next few years.

That’s according to financial company Hampleton Partners, which said in a report that vendors have spent over $9 billion in the marketplace in the last few years in a bid to put their stake in the ground.

And early players in that market include Google, Samsung, Verizon and others.  Apple wants to make a play in the market too.

In the next year, Hammpleton thinks that other companies will make acquistions in the next year or so to get into a market estimated to be worth many billions by the end of the decade.

Those include Intel, TI, Texas Instruments and AT&T.

One of the problems is that when there are countless devices equipped with semiconductors and the ability to be connected to the internet, is that there are few standards and so far few attempts to create such standards.

Estimates vary about the number of devices connected by the end of the decade but it’s certain the number will be in tens of billions.  Each device, however, will cost very little – money to be made will be in the way such things are interconnected and structured.

Verizon uses Dalek diplomacy on FCC

DayoftheDaleksUS telco Verizon has revealed its compromise on net neutrality which appears to have been drawn up by a Dalek PR – it has promised not to sue the FCC if the watchdog does exactly what it tells it to.

Verizon has promised that it will not sue to block net neutrality rules as long as they’re issued without reclassifying broadband providers as utilities.  There is a concern that Verizon would do this because that was exactly what it did last time.

In 2010, the FCC issued rules preventing Internet service providers from blocking or discriminating against traffic by relying on Section 706 of the Telecommunications Act, rather than the stronger powers the FCC has under Title II, which covers utilities or “common carriers”.

Verizon sued and won, with a federal appeals court stating that the FCC could not issue what amounted to common carrier rules without first reclassifying broadband service as a utility, similar to the traditional phone network.

Ironically, that is why the FCC is now considering reclassifying broadband. It wants the next set of net neutrality rules to survive a court challenge.

FCC Chairman Tom Wheeler said last week that whatever the FCC did, Verizon would sue it.

However Verizon Executive VP Randal Milch said that  statement was completely unfair. Verizon will not sue if the FCC uses Section 706, even though that is exactly what Verizon did last time.

Section 706 requires the FCC to encourage the deployment of advanced telecommunications capability to all Americans, and it can be used to govern broadband providers’ treatment of Internet traffic.

Milch’s e-mail was made public in an ex parte letter filed with the commission yesterday. Milch wrote that rules based on Section 706 “will not be the object of a successful court challenge—by Verizon or anyone else”.

So in otherwords, the FCC will be ok provided it obeys Verizon in all things. It is a bit like the burglars threatening to sue you if your watchdog bites them as they break into your house. In this case the burglars are telling you in advance that you will not be sued if your watchdog does not bite them while they make off with your TV. You cannot be fairer than that.


Verizon paid its CEO more than it did the taxman

taxman sheet musicIf you want to know how silly the tax avoidance of US companies has become, you only need to look at Verizon.

It paid its CEO Lowell C. McAdam more than it paid the in U.S. federal income taxes.

According to a study compiled by the Institute for Policy Studies and the Center for Effective Government, which has been denied by Verizon, it was one of seven companies paid their CEO more than they paid in tax,  including Boeing, Ford, Chevron, Citigroup, JPMorgan Chase & Co and General Motors Co.

The study said the seven companies, which in 2013 reported more than $74 billion in combined U.S. pre-tax profits, came out ahead on their taxes, gaining $1.9 billion more than they owed.

At the same time, the CEOs at each of the seven companies last year was paid an average of $17.3 million.

The Institute for Policy Studies and the Centre for Effective Government, the study’s co-authors, said its findings reflected “deep flaws in our corporate tax system.”

Verizon insisted that it paid $422 million in income taxes in 2013. “We do not provide a breakdown between federal vs. state in that total; however, I am confirming for you that the federal portion of that number is well more than Verizon’s CEO’s compensation,” a spokesman said in an email.

Boeing said its 2013 global tax bill was $1.6 billion, though all but $5 million was deferred due to development and production investments. A spokesman said current tax expense and cash taxes were likely to rise as 787-jet deliveries ramp up.

Both automakers Ford and General Motors said their current U.S. tax bills are reduced by tax loss carry forwards stemming from severe losses suffered a few years ago.

Energy group Chevron said its 2013 current U.S. federal income tax expense of $15 million “was much lower than normal” due to several factors. Echoing other companies, Chevron stressed it pays taxes worldwide.

Either way it appears that there is something wrong with the US tax system, which seems to focus on taxing the poor and middle class while the rich and corporates avoid paying.

US telcos claim that 10Gps is “too fast” for broadband

the-tortoise-and-the-hareShowing that they are at the cutting edge of technology profits, the US telcos have told regulators that 10Gps is too fast for broadband.

They have asked the Federal Communications Commission not to change its definition of broadband from 4Mbps to 10Mbps.  We guess anything faster than 4Mbps requires a man on a horse with a red flag ridding in front of it.

According to AT&T, internet users get by just fine at the lower speeds and have no need for broadband that fast.

“Consumer behaviour strongly reinforces the conclusion that a 10Mbps service exceeds what many Americans need today to enable basic, high-quality transmissions,” AT&T wrote.

Verizon and the National Cable & Telecommunications Association (NCTA), agreed.

“The Commission should not change the baseline broadband speed threshold from 4Mbps downstream and 1Mbps upstream because a 4/1 Mbps connection is still sufficient to perform the primary functions identified in section 706 [of the Telecommunications Act]—high-quality voice, video, and data,” the NCTA wrote.

More than 47 percent of Comcast subscribers get at least 50Mbps, the company says.

The FCC has periodically raised the minimum standard for Internet service to be considered “broadband.” This affects how the commission measures industry progress in deploying sufficient Internet service to Americans, particularly in rural areas.

There are signs that the Telcos might have a job convincing FCC Chairman Tom Wheeler who thinks that  10Mbps is too low and that a 25Mbps connection is fast becoming ‘table stakes’ in 21st century communications,” he said.

If the definition is kept at 4Mbps, statistics on broadband deployment and competition make the telcos look brilliant and they don’t actually have to upgrade their aging infrastructure.

Vodafone sells Verizon stake

vodafoneVodafone is reportedly in the late stages of selling its 45 percent stake of Verizon, the largest mobile company in the USA, for as much as $130 billion. [It was confirmed this afternoon, Ed.]

Over the weekend, Vodafone said it will be looking for the full $130 billion for its stake and said talks were at an advanced stage.

It is reported that the agreement now just needs the approval of the Verizon board.

Vodafone hopes that – should the deal go through – it will be able to expand further and raise value for shareholders.

In Robert Peston’s BBC business blog, he reported Vodafone may not need to pay any UK tax at all on the £84 billion deal – citing Labour’s 2002 Finance Act which introduced an exemption from tax on capital gains from substantial shareholdings held by companies.

For the three months ending 30 June, Vodafone’s revenues plummeted 3.5 percent – with the company directing the blame at economic difficulties across Europe. But even in Germany, where Vodafone holds its largest share of the market, revenues dropped by five percent. Vodafone also cited market regulation in some European countries as a problem.

Earlier this year, Vodafone bought Kabel Deutschland for €7.7 billion in a bid to diversify its service offerings, including in sectors like broadband and TV.

Shareholders will be expecting the company to turn the ship around,

There could be final confirmation from Verizon later today.