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AT&T stands by femto pricing strategy and explains why Microcell traffic counts towards subscribers' data caps

AT&T Defends Data Caps on Femtos

Michelle Donegan
LR Mobile News Analysis
Michelle Donegan
6/22/2010
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LONDON -- Femtocells World Summit -- AT&T Inc. (NYSE: T) today defended its policy to count data traffic from its femtocell, the 3G Microcell, towards subscribers' monthly data caps, as it revealed that it has completed the national rollout of its home base stations. (See AT&T Enforces Data Cap on Femtos .)

As of Sunday, the 3G Microcell can be bought anywhere in the continental US, said Gordon Mansfield, AT&T's executive director for radio access networks. The carrier started the national deployment of the Cisco Systems Inc. (Nasdaq: CSCO) femtocells in April. (See CTIA 2010: AT&T Femtos Go Commercial in April, AT&T's 3G Femtocells Now in More US Cities, AT&T Takes MicroCells to Vegas, and Cisco Claims AT&T Femto as Its Own.)

But while consumers can now get the AT&T femto anywhere in the US to improve indoor cellular coverage, they will not get a break from the carrier's newly capped mobile data pricing policy by using their Microcell at home. That's because data traffic from AT&T's femtos counts toward subscribers' monthly mobile data caps. WiFi usage, meanwhile, does not count toward a subscriber's monthly data allowance. (See AT&T Intros Mobile Data Caps, Capping the Data Gusher, BillShrink: AT&T Data Caps Mean Paying Twice, and 5 Mobile Apps That Bust Data Caps.)

Mansfield today stood by AT&T's femtocell data pricing strategy. And here's why: Unlike WiFi traffic, femto traffic travels over AT&T's core network. Furthermore, AT&T is not allowed to divert or offload femto traffic from its core network because of the legal requirement to provide lawful intercept to law enforcement agencies.

So, AT&T charges subscribers for data used on the femto, and not on WiFi, because femtocells use more carrier network resources than WiFi. And this is likely to be the case for some time due to the Federal Communications Commission (FCC) 's lawful intercept requirements.

"Today, femtocells really are using a significant portion of our network," said Mansfield. "With WiFi, traffic goes straight from the access point on to the Internet. Femto traffic goes via a VPN tunnel straight to our network and to our core and then to the Internet."

Mansfield said there is standardization work being done to develop a way to offload femto traffic from the carrier's core networks; and AT&T is investigating whether its interpretation of the FCC's lawful intercept rules is indeed correct as they apply to femtocells.

It's understood that any traffic that originates on licensed spectrum has to be sent over an operator's core network and managed by the operator to meet the FCC's regulations, and technically, this would include femtocell traffic.

This regulatory requirement in the US, as well as other countries, could inhibit the opportunity for femtos when it comes to mobile data offload, according to Stuart Carlaw, VP and chief research officer at ABI Research .

"Regulation is still a big hurdle and may significantly reduce the proposition of femtocells," he notes.

Just use WiFi
Regarding AT&T's femto pricing policy, Mansfield also noted that part of the strategy is based on the fact that most (in fact, 96 percent) of its customers have WiFi at home and that all of the smartphones in AT&T's portfolio have WiFi -- and from a consumer's point of view, there are latency benefits to using WiFi, compared to femtocells, because traffic does not have to pass through as many network elements.

But he also conceded that there is still work for AT&T to do on the positioning of femtocells in the market. Right now, AT&T's femtos are pitched simply as devices for enhancing voice and data coverage indoors.

"The position of the product in the market remains an area that we have to put more intense focus on," he said.

— Michelle Donegan, European Editor, Light Reading Mobile

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paolo.franzoi
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paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 4:31:42 PM
re: AT&T Defends Data Caps on Femtos


 


My UMA phone.


 


seven


 

OpEd
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OpEd,
User Rank: Light Beer
12/5/2012 | 4:31:41 PM
re: AT&T Defends Data Caps on Femtos


The clever chaps at AT&T have found a regulatory reason to hang their femtocell usage policy, but one has to wonder if they are...well...blowing smoke.


Gateway solutions exist that offload selective traffic from mobile core networks and that also provide Lawful Intercept.  So while it may be true today that on the AT&T network femtocell traffic must traverse their network core for LI, but it needn't be that way for long.


However, I am thinking the real reason not to give a green light to femtocell users is the additional data tsumai and resulting network nightmare that it might create. Unlike users connected via the macro cellular network that share the cell's available bandwidth with other mobile users, femtocell users have all of the bandwidth the femtocell offers and a 2+Mbps fixed line broadband connection back to the core at their disposal.  Imagine tens of thousands femtocells hitting the AT&T core network as the users settle in to watch a movie on their laptops...  Meltdown.


So kudos to AT&T for the PR effort, but let's be real; controlled usage is the new normal.

krishanguru143
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krishanguru143,
User Rank: Light Beer
12/5/2012 | 4:31:38 PM
re: AT&T Defends Data Caps on Femtos


I find it ironic that people bash AT&T because the 3G Microcell uses minutes and data from their plan.  Maybe it should be looked at how Verizon Wireless, Sprint and T-Mobile handle femtocells.  On the Verizon Wireless front; yep, it uses your plan as well.  Maybe Sprint is different; nope, they are the same.  Surely T-Mobile must be different; sorry but they follow the same procedure.  The technology requires that it gets sent back to the carrier.  So now you know, it is just not AT&T that does this, they ALL do.

paolo.franzoi
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paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 4:31:37 PM
re: AT&T Defends Data Caps on Femtos


 


Michelle,


Isn't the big cost of the AT&T network the backhaul and the RAN?  We are talking about traffic that is groomed straight to the packet core here.


 


seven


 


PS - and my UMA T-mobile phone did not use minutes.

Michelle Donegan
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Michelle Donegan,
User Rank: Light Beer
12/5/2012 | 4:31:37 PM
re: AT&T Defends Data Caps on Femtos


Yes, and Vodafone in the UK prices their Sure Signal the same way too -- voice and data come out of subscribers' monthly plans. 


I think the reason why there is so much uproar over AT&T's femto pricing is because AT&T just capped data usage (which, by the way, so has Vodafone in the UK), and suddenly the Microcell proposition looks different. 


AT&T's reasoning is that the femtos use a big portion of their network. So why shouldn't it charge subscribers for services that use its networks?


 

krishanguru143
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krishanguru143,
User Rank: Light Beer
12/5/2012 | 4:31:37 PM
re: AT&T Defends Data Caps on Femtos


Verizon Wireless has had a cap for ages; they just don't talk about it.  They consider unlimited as full access to the Internet.  If you start to go above 5GB every month; they will drop you.  Verizon doesn't sell you anymore data transfer either; AT&T will.

krishanguru143
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krishanguru143,
User Rank: Light Beer
12/5/2012 | 4:31:36 PM
re: AT&T Defends Data Caps on Femtos


It is all still used with the Microcell.


 


T-Mobile charges $10 per month for the UMA.


http://wifinetnews.com/archive...


You do not need to buy a plan with the 3G Microcell.  You can IF you want unlimited calling.  If you already have unlimited calling on your plan, then it is a waste.

paolo.franzoi
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paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 4:31:36 PM
re: AT&T Defends Data Caps on Femtos


 


Yep, $10 bucks a month for unlimited calls over any WiFi that you can get to not just the one at your house.  You also don't have to buy a femtocell.


seven


 

paolo.franzoi
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paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 4:31:35 PM
re: AT&T Defends Data Caps on Femtos


 


It is a different technology, but accomplished for voice essentially the same goal.  I was using this as an equivalent for the pricing model comparison:


UMA - $10/month.  All calls made on WiFi were not counted in the minutes after that.  In fact, when I was doing this any calls started on WiFi were free even if you switched to cellular during the call.  Not sure if they have plugged that hole.


Femtocell - Calls come out of your planned minutes and have to buy the Femtocell. 


The other issues that I saw with UMA related to phone choice and battery life.  Now in terms of using the core network, given that there is actually a piece of phone company gear at the premise it could be reorganized to lower the backhaul costs by terminating the web traffic locally (offload).  Given that the carrier has an interface to the femtocell, they could certainly deal with the CALEA requirements if required.


seven


 

krishanguru143
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krishanguru143,
User Rank: Light Beer
12/5/2012 | 4:31:35 PM
re: AT&T Defends Data Caps on Femtos


The traffic CANNOT be offloaded on the femtocell; it just doesn't work that way.


 


The back haul costs are not the real issue; it is the back end costs.  The back end is the same if you use a femotcell or the macro network.  With the femtocell though, they do need to add additional equipment to handle the tunnel.


 


So to repeat, the 3GPP/ITU does not have a way to offload the traffic.  This is not an AT&T issue or anything unique to them, it is just HOW the technology works.


 


Lastly, the femtocell provided voice and data for any 3G phone regardless if it has WiFi or not.


 


I also wouldn't say you have to buy a femtocell.


 


The issue with using WiFi is the lack of QoS on the AP.  The same can he said for the femtocell depending on the ISP and the equipment used.


 


What is the big deal if the minutes come out of the plan or not?  If they didn't have a femtocell, then any calls made would still be coming out of their plan.  It just sounds like people like to complain about anything they can.

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