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News recap: Market uncertainty after net neutrality vote

The USTA is preparing for legal action following the FCC's net neutrality vote, while Google unveiled its mobile service plans.

In telecom news, the telecom industry is facing uncertainty after the Federal Communications Commission (FCC) net neutrality vote. Comcast's proposed merger with Time Warner Cable is also in doubt over whether net neutrality rules will help or hinder the acquisition. Meanwhile, at the Mobile World Congress, Google announced plans to build a cellular service.

AT&T revealed its progress in its transitions to software-defined networking (SDN) to support the growing data needs of its customers.

Net neutrality rules bring market uncertainty

The U.S. Telecom Association plans to appeal the FCC's net neutrality rules once they are made public.

U.S. Telecom CEO Walter McCormick told Light Reading the vote showed the federal government was unnecessarily overstepping its authority. The Internet has not been regulated by standards set by the International Telecommunications Union (ITU), a UN agency that oversees issues relating to information and communication technology, because it was never considered a telecom service, he said. Now that it has been reclassified under Title II regulation, the Internet will be subject to the ITU, leading to uncertainties in the global telecom market.

Net neutrality rules also cast a shadow of uncertainty over Comcast's $45 billion proposed merger with Time Warner Cable.

According to The Hill, newer, tighter regulations could help the merger, as they would ease merger opponents' fears of a cable monopoly. But net neutrality rules could also mean the FCC will crack down on larger companies. John Bergmayer, senior staff attorney at Public Knowledge, said the vote shows the FCC is not afraid to take on an established industry.

Daniel Ernst, industry analyst at Hudson Square Research, said there is no legal reason to deny the merger and fears that a larger Comcast can't be regulated will be assuaged because of the new rules.

Google plans mobile service

Google is expanding its role in the telecom world as it prepares to create its own wireless service.

Sundar Pichai, senior vice president of products for Google, said in a Mobile World Congress keynote that Google does not intend to be a large-scale network operator; rather, the company will work with carrier partners to build the mobile service. Google is rumored to be working with T-Mobile and Sprint to build the service, which will be augmented by local Wi-Fi networks.

But a Google mobile service has the potential to shake up the wireless industry as Google Fiber has for the broadband industry, according to CNet. Google Fiber offers speeds up to 1 Gpbs at a low cost, causing Internet Service Providers like AT&T and Verizon to increase their speeds and cut costs.

Pichai said to expect more announcements regarding the mobile service in the coming months.

AT&T makes progress on SDN transition

AT&T is making progress in its shift to software-defined networking , as the carrier says it is leaving the old telecom network model behind.

AT&T Vice President John Donovan discussed in a blog post why AT&T made the shift to SDN and its goals over the next five years. Donovan said in the last eight years traffic on AT&T's wireless network increased by 100,000%, driven primarily by video. The carrier discovered that its network couldn't support increased usage of streaming video, social media and high-definition gaming.

"We've been able to keep up with the increase by using more and more sophisticated, complex routers, switches and other gear," Donovan said. "But this just isn't feasible for much longer. It's too slow, too inefficient and too expensive."

Donovan said AT&T has moved 40% of strategic apps to the cloud and is moving its business and consumer VoIP architecture onto one network. The carrier plans to virtualize 5% of its network by the end of the year and reach 75% network virtualization by 2020.

By moving to a software-defined network, AT&T will accelerate the growth of its connected car apps and MVNO services this year, he said.

Next Steps

Net neutrality milestone: AT&T fined $100m by FCC

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