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From creating sophisticated pricing packages that let families slice and dice their data usage to using personal preferences to create customized services and applications, policy control tools hold a lot of potential for the future. Although policy control tools are available for todays 3G networks, most experts say that policy control is an afterthought for operators and therefore we will likely see more sophisticated use of policy control when carriers deploy their LTE networks. What will likely be the first iterations of policy control? Some believe tiered pricing packages will be the mainstay for awhile before we see policy control 2.0 techniques, which include real-time transactions and the ability to activate or de-activate new services on the fly. Whatever the implementation, policy control tools will likely be a hot topic of discussion in the months and possibly years ahead as more operators migrate from 3G to 4G. In this eBook, FierceWireless will take a deep-dive into all the various aspects of policy control from the potential that it holds to the possible problems and issues operators may face. sue marek editor-in-Chief /// FierceWireless Thank you To our sponsors:

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Policy control:
Putting a value on Policy control
As more devices become wirelessly-enabled and mobile data consumption intensifies, wireless operators will likely need to find new ways to manage and optimize their networks. Policy control tools hold that promise but very few operators are taking advantage of these tools today. Why? Because after encouraging consumers to use mobile data with flat-rate data price plans, wireless operators now fear they will alienate the consumer if they dramatically alter this business model. AT&T Mobility and Leap Wireless boldly stepped into the limelight by being the first operators to offer tiered data price plans in the U.S. Early indications are that this plan

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Tools for The nexT-generaTion neTwork

was a success. AT&T has said that its low-priced option (200 MB for $15 per month) allows consumers to upgrade to an integrated device with data services without forking over $30 or more per month. Nevertheless analysts say that these steps are minor compared to the potential business models that policy control tools may unleash.

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Technology, Experimentation are Keys to Policy Controls Future

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Pricing Models for Todays Wireless Consumer

Evolution of Policy Network Throttling: Management: from A Courtesy or Network Controls to Hindrance to Service Differentiation Heavy Users? *Sponsored Content*

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Do Customized Services Impede on Customer Privacy?

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Policy: Shaping the Future *Sponsored Content*

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Unleashing the Possibilities of Next-Generation Policy Control

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Does The Net Neutrality Debate Help or Hinder the Need for Policy Control Tools?

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Technology, Experimentation are Keys to Policy Controls Future

by tammy parker Experts say that policy control tools will offer a lot of advantages when LTE is deployed. But for now, very few operators are using them. The need for policy control is increasingly evident as mobile data traffic builds, but operators are sidestepping full-blown policy control as they try to discern approaches that are not only technologically possible but also politically savvy. Its no secret that mobile network congestion is being driven by a boom in data usage. According to Forrester Research, some 52 million U.S. mobile subscribers accessed the Internet from their phones at least once a month during 2009. By 2014, 106 million U.S. mobile customers, or 39 percent of the nations customer base, will be categorized as regular mobile internet users. However, although Forrester predicts U.S. mobile data access revenues will near an impressive $20 million in 2014 the rate of growth will slow as the average monthly price of a data bundle decreases from $17.34 per month in 2009 to $16.64 in 2014. Flat-rate unlimited usage plans for all data types have powered the adoption of mobile data and the mobile Internet. These plans have a downside in that they limit future
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data revenues while encouraging wanton usage, Forrester said in its report. Therefore, carriers are attempting to shift from flat-rate pricing using various methods. Some operators are engaging in traffic throttling for users who surpass usage caps, while others, such as AT&T Mobility, have initiated price hikes or tiered pricing for high-megabyte users. Yet operators for the most part are taking baby steps toward fullblown policy control. Peter Jarich, service director at Current Analysis, contends that operators find it difficult to select a specific a path

Right now were charging everyone the same for a certain level of service, and were really not using policy or related tools much at all, said Jarich, who noted that tiered services the proverbial gold, silver and bronze pricing packages are often discussed but not actually implemented.

Be more than bandwidth. Personalize your pipes.

Dumb pipes cant personalize the mobile Internet. But a smart network can. Users gain customized services and bandwidth choice. You gain new revenue streams, reduced costs and sustained protability. Visit tellabs.com/4g to download a free white paper and learn more.

Policy inherent in new networks

The deployment of next-generation networks will bring a new dawn for policy control, which will no longer be an add-on for postpaid-network architecture but will instead become an integral part of the core network. Policy for 3G was almost kind of a retrofit. It came along after the initial definition, and so it

Policy for 3G was almost kind of a retrofit. It came along after the initial definition, and so it wasnt greatly adopted.
dan Warren, senior direCTor oF TeChnology, gsma

that takes them away from flatrate pricing. Jarich recalls that years ago, a hot topic was the idea of leveraging premium charges for different content, such as charging differently for real-time video vs. Web browsing vs. email downloads. According to Jarich, this idea has so far been left in the dust because operators couldnt discern how to charge for different types of content without alienating users.

wasnt greatly adopted, said Dan Warren, the GSMAs senior director of technology. However, policy is a fundamental part of LTE architecture. You cant implement an LTE core network easily without having a policy control function, Warren said. The business case becomes trivial when policy is a key part of the network you want to deploy. continued on page 5
Copyright 2010 Tellabs. All rights reserved. The following trademarks and service marks are owned by Tellabs Operations, Inc. or its afliates in the United States and/or other countries: TELLABS, TELLABS and T symbol

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continued from page 3 According to Warren, those infamous gold, silver and bronze pricing packages will finally see the light of day once LTE is implemented, with tiered packages offering, for instance, differentiated peak rates or prioritization within the network. You can do a whole bunch of clever stuff around not just offering better quality of experience around all applications but being able to offer a premium service to customers, which would generate a higher ARPU, and a service more similar to the best-efforts service that we have today to those who would want to remain on the consumerbased package and not pay for that kind of premium treatment, Warren said. One key ingredient in policy control is deep-packet inspection (DPI),

good or the greatest force for evil, depending upon how you look at it, said Warren. Carriers might also open themselves to criticism if they give higher prioritization to one kind of traffic vs. another. Operators right now are very sensitive to the focus which regulators are placing on a level playing field, he said, adding that, nonetheless, there is a growing appreciation that some traffic requires a certain kind of handling within a network.

Pondering the Possibilities

Warren foresees a day when operators make policy and DPI tools available to developers for use in application differentiation. That could produce a really nice end-toend story which allows developers to responsibly define the policy which should be applied to their

annual data access revenues ($ billions)

Forecast: U.S. Data Access Revenues, 2009-2014

$10.7 2009 $17.34 $12.9 2010 $14.7 2011 $16.4 $18. 1 $19.8

2012

2013

2014

$17.24 $17.13 $16.99 $16.83 $16.64 average monthly data access Price

Source: Forrester Research Mobile Adoption and Sales Forecast 9/09 (U.S.)

which riles consumer watchdogs. Though DPI need not be applied to most traffic on a network, it is sometimes necessary, such as when an operator must filter traffic from potentially nefarious sources. DPI can be the greatest force for
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applications, Warren said. Policy-based apps with fundamentally different QoS requirements could all coexist on a single device and be handled automatically and correctly in the network for an overall positive

consumer experience, he said. Jarich, meanwhile, hopes operators become more upfront about their pricing motives. He noted, for instance, if a carrier throttles down a customers download speeds once a usage cap is surpassed, even when the network is not congested, then the throttling is being initiated more as a matter of principle or in an attempt to make more money off of the customer, who might be led to sign up for a plan with a higher usage cap in order to avoid being throttled. In that circumstance, said Jarich, then dont tell me this is all about network constraints or resource constraints. He added that operators should make it easier for customers to upgrade service plans on the run, so users can, for instance, increase short-term download speeds or exceed a spectrum cap once in a while. Not making things as simple as possible is leaving a lot of money on the table, Jarich said. According to Warren, once operators can quickly shape traffic by adjusting delays, bit-error rates, packet delivery, buffers and more that will change the service model on a per-application and perconsumer basis. Because policy control will be inherent in LTEs architecture, then its down to the operator to almost play with it once theyve got the tools in their hands to find what works best for them and their consumers, Warren said. Current Analysis Jarich also said carriers need to start experimenting with different policy tools and usage plans, adding that he believes operators ultimately will figure this out. l

Customized Services Lead to New Mobile Pricing Models

Customers are in love with smartphones and other advanced wireless devices. They use them for everything from watching videos late at night to working on projects during morning commutes. With so many application downloads consuming huge amounts of bandwidth, mobile operators traditional pricing modela flat monthly fee for unlimited data usagejust doesnt work any longer. Some operators switched to tiered billing, in which subscribers pay a flat rate for data usage limited to, say, 200 Mbps or 2 Gbps per month. They hope this approach discourages excessive use of bandwidth, helps them control the CAPEX/OPEX costs of adding more network capacity and still satisfies subscribers.

to individual subscribers usage patterns. These might include, for instance, one for parents who use smartphones to monitor their childrens Internet activities; another for movie buffs who watch streaming video on mobile devices; and another for road warriors who need mobile access to enterprise productivity applications.

a two-Part Pricing model

A subscriber-aware network also makes it possible to develop a two-part pricing model. One part consists of a base plan, priced at a fixed monthly fee, which covers a defined amount of data usage. On top of that is a value-based plan, priced at an incremental level, for the customized services selected by the consumer. Because the user pays for these services as part of value-added pricing, the data involved are not included with the data measured for the tiered portion of the plan.

shock when their bills arrive. They may defect to another operator in search of a better deal.

bundling value-added services with tiered Pricing

Tiered pricing based on policy control is an important first step. But, by incorporating customized services in pricing models, operators can avoid the aforementioned problems and achieve their primary goals. The ability to create valued-added services and bundle them with tiered pricing requires a subscriberand content-aware networking solution, such as the Tellabs SmartCore 9100 Platform. Compatible with 3G and 4G technology, this type of solution delivers real-time intelligence about subscriber behavior, including where a given customer is physically located and the content he/she is using. With this intelligence, the operator can create content-inspection services mobile Internet offerings tailored

limited value of tiered Pricing alone

Yet chances are tiered pricing will prove to be of little value to operators or subscribers. For operators, tiered pricing relegates them to the role of a utility provider of a dumb pipe, which does nothing to help them achieve long-term success in the market. Subscribers behavior wont change overnight. Many people inevitably will go over datausage limits and experience sticker

intelligence delivers a win-win solution

Value-added services give subscribers more control over bandwidth usage and keeps them in the fold. For operators, they create new revenue streams, reduce costs and help sustain profitability. Its an intelligent pricing scenario tailored for success. l

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Pricing Models for Todays Wireless Consumer

by Lynne t te Luna As unlimited data pricing nears the end of its lifespan, U.S. operators will experiment with userfriendly plans. Thanks to compelling smartphones and flat-rate data pricing, data usage has skyrocketed on the nations 3G networks. So far the trend has translated into significant revenue growth for operators, but soon data traffic will outpace revenue. Wireless operators will need to find new ways to monetize their networks. As such, it appears unlimited data plans are on their way to extinction. According to a recent survey from international law firm Freshfields Bruckhaus Deringer, nearly half of international mobile executives 48 percent predict mobile operators will focus on developing new pricing models over the next three years, with 55 percent agreeing that tiered pricing is the way forward in mature markets and 47 percent arguing that flat-rate all-you-can-eat data tariff plans are damaging their ability to increase revenue. The question now is: How do operators craft userfriendly plans that make
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more efficient use of their network resources? In the U.S., AT&T Mobility and Leap Wireless have taken the plunge into tiered pricing. AT&T had already felt the pain of network capacity problems in several big cities throughout 2009 thanks in part to the popularity of the iPhone. For smartphones, AT&T offers 200 MB for $15 per month or 2 GB for $25 per month, and users can purchase additional buckets of data in each billing cycle. Leap is now offering 2.5 GB of data for $40 per month, 5 GB for $50 per month or 7.5 GB for $60 per month. Previously, Leap offered 5 GB for $40 per month. AT&T declined to be interviewed by FierceWireless but pointed to

comments its executives made during the companys most recent quarterly conference call about some of the trends it is seeing. AT&T CFO Rick Lindner said that early results from the companys move to tiered data pricing plans have been encouraging. In particular, he said the company had expected a lot of customers to migrate to the lower price point ($15 per month for 200 MB of data) but a large portion migrated to the $25 per month for 2 GB of data plan. In addition, he said AT&T is seeing benefits from lowering the point of entry so customers can move into the integrated device category and try data services. We believe over time they will migrate to higher-tiered plans, he said. A drawback to megabyte pricing, however, is the fact that operators put the onus on the end user to continued on page 9

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Today, AT&T has separate tiered pricing for the iPad but analysts say that this model may change in the future.

continued from page 7 figure out what a megabyte of data really is, despite real-time alerts about usage and other tools from operators that try to help customers understand what sort of actions might gobble up their megabytes. As such, megabyte-pricing is expected to serve as the launching pad for more innovative usagebased pricing. Susie Kim Riley, chief marketing officer with network policy company Tekelec, sees AT&Ts recent move as an encouraging sign as the company seeks to segment data services. They are starting off by counting bytes, but that is only the beginning, she said. Operators will be able to do a lot more creative things. Riley said options could range from paying for a higher quality of service such as faster data speeds to picking and choosing video packages or paying for better quality for certain applications such as gaming.
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TeliaSonera, which operates the worlds first LTE networks in Sweden and Norway, is mulling a new mobile data pricing model that involves bundling the network usage charges with the cost of mobile content used into a single pricing plan. As such, subscribers would pay for the content and network resources they use instead of simply paying for a certain amount of data. Roger Entner, senior vice president and head of research and

calls the total communications package. Just as operators on the voice side have instituted family plans that pool voice minutes, they will do the same on the data side, and charge another $5 to $10 per person. Mark Lowenstein, managing director of Mobile Ecosystem, also expects to see a more aggressive move to incorporate data as a part of family plans. Thats one of the major benefits of AT&Ts $15 pricing plan. We will see creative ways to add members of a family onto data plans via lower priced plans or plans that include buckets of gigabytes that can be shared across the family, he said. In the same vein, smartphone users are increasingly becoming tablet users as well. Operators will also have the opportunity to offer single-pricing package plans for both devices, Entner said. Today, AT&T charges separate tiered pricing for both Apples iPhone and iPad. The iPad, however, uses a pay-as-you-go pricing plan. It will be about this: I take care of you and have a relationship with you as the customer. I dont

Evolution of Policy Management: from Network Controls to Service Differentiation

Jonathan Downe y, Director of proDuct marke ting at opene t With the current demand for broadband, operators are being forced to walk a tightrope between competitively priced customer offers to grow market share, and managing the network costs of surging data traffic. Policy Managements ability to dynamically control and manage the subscriber experience, when using a service or application, has emerged as an enabler of service differentiation and a source of incremental revenue. As well as providing a means to better allocate network capacity, and manage the associated capital expenditure. Intelligent next generation networks bring with them the promise of a more personalized, immediate and connected experience for subscribers. If the financial benefits of this investment are to accrue to operators, theyll need to evolve their offerings beyond current approaches that simply offer a big bucket of data or flat-rated plans. subscribers consume even for customers using similar devices. Policy Management facilitates data plan innovation, enabling operators to flexibly configure a combination of bandwidth speed, data allowance, device type, duration, time-of-day, or the exclusion of certain applications into attractive market offerings.

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self-care portal in real-time, operators can respond dynamically to changes in subscriber or network state or activity. This makes it possible for operators to dynamically offer promotions, based on an individual subscribers activity to up-sell and cross-sell services e.g. to renew a data allowance, purchase a roaming bundle, or request a bandwidth boost.

subscriber -configured controls

Increasingly, operators are also looking to policy management to differentiate their services, by adding value to the user experience. Policy-based controls such as notifications, bill shock / roaming controls, parental and content controls, URL filtering, and time-of-day restrictions shape the customer experience, especially when these can be configured and controlled by subscribers.

Simply offering a big bucket of data provides limited scope for service differentiation or value-add
It makes it easier for operators to segment their customer base, offering data plan options and prices to cover heavy and light users. This ensures subscriber revenues are optimized, and ensures those who use the most data, contribute most to the costs. It also provides an incentive for subscribers generally, to moderate their usage, providing some protection against network congestion.

summary
Policy Management helps operators to efficiently allocate finite network resources, improve business models, and offer a differentiated customer experience. In a rapidly evolving market for data access, policy controls give operators much needed flexibility to quickly respond to competitor tactics, new devices, applications and changing consumer data habits. Learn more: www.openet.com l

Smartphone users are increasingly becoming tablet users as well. Operators will also have the opportunity to offer single-pricing package plans for both devices.
roger enTner, senior viCe presidenT and head oF researCh and insighTs, TeleCom praCTiCe oF nielsen

business model imProvement

Policy Management provides operators with a means to improve their current business models, improving how data subscriptions are packaged, and creating opportunities for incremental revenues. There is a huge disparity in the amount of data and bandwidth

Promotions
Policy Management, when combined with charging capabilities, also makes it easier for operators to promote and sell services. Triggering an in-session redirect, a subscriber can be re-directed to a

insights for the Telecom Practice of Nielsen, believes the next innovation in packaging pricing will come in the form of what he

have a relationship with the phone or the tablet. I want to take care of your communication needs, Entner said. l

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Network Throttling: A Courtesy or Hindrance to Heavy Users?

by peggy aLbright

Bandwidth throttling is one way to control subscribers who use excess data but consumers typically dont find this tactic appealing. Bandwidth throttling is an easy way to control subscribers excessive data consumption to free up capacity for other users, but due to the punitive nature of the technique, operators hesitate to apply it. Throttling is finding new acceptance, however, in value-added services and applications. It will also have a place in emerging advanced traffic management strategies that, combined with service prioritization techniques, should make better use of the network overall. Throttling refers to the practice of slowing the data speed for individual users who exceed their monthly bandwidth limits. Throttled customers can still make voice calls and use mobile data, but they may not receive the full bandwidth they previously enjoyed for downloading or uploading content. Throttling is temporary; as soon
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as the subscribers account enters a new billing period, the feature is cancelled and the subscribers service returns to normal. Throttling gained attention this year when T-Mobile USA divulged that it would slow data speeds for subscribers who exceed their 5GB monthly limits. T-Mobile positioned the method as a means to deter excess usage and help customers avoid costly overage fees. Sprint Nextel is adamantly against slowing data speeds for customers of its 3G or Clearwire-based mobile WiMAX services. However, it has reserved the right to suspend off-network data services for customers that use data excessively while roaming on other operators mobile broadband networks. In general, throttling is intended to prevent individual subscribers from using the network unfairly, to the detriment of other customers. It is applied according to fair usage and bandwidth limits delineated in a customers mobile data service contract.

Throttling has several benefits. It can help free needed spectrum for operators whose network limitations are too severe to allow for true, all-you-can-eat services and help ensure that all customers receive the highest-possible service quality. It can make a difference for operators that are short on radio access network capacity, struggling to obtain cell site permits, or engineering around backhaul bottlenecks. It also can help an operator maximize the value of its operational and capital expenditures. Throttling is often positioned as a courtesy to heavy usage customers, who might unknowingly incur exorbitant per-megabyte charges when they exceed their service plan limits. Operators must have the capability in Europe, where laws designed to prevent bill shock caused by mobile data roaming require notifying customers when their data roaming reaches a certain trigger point and stopping service under certain conditions.

The biggest disadvantage for throttling is the negative association of being heavy handed. Even though it is applied under strictly defined terms, many customers dont pay attention to their service agreements and can be surprised when throttling occurs. Throttling can also be misconstrued as getting in the way of net neutrality. Because of this sensitivity, operators need to make sure they are explaining it clearly to their customers. You dont want it to be confused with blocking access, said Rehan Jalil, senior vice president for IP and mobile Internet at Tellabs. Essentially, an operator enables throttling by programming the policy controller to activate the throttling feature when the network observes that a user has exceeded their usage quota. It is fairly easy to implement because it does not require more complicated and sometimes controversial approaches such as deep packet inspection. Most operators have the capability in their networks, even if they dont use it. Any operator that has a fair usage clause in their contracts needs to have this capability, said Ali Shah, director of broadband strategy in the strategy and marketing organization for Ericsson North America. Often, throttling will deliver only incremental improvements to network capacity. Because heavy data users represent a small portion of the customer base, and because throttled customers represent an even smaller segment, its use is generally limited. Also, because

throttling is triggered by an individual subscribers usage and not network conditions, it may not be necessary if the network has plenty of capacity available at that time. Finally, throttling one customer in a cell site can be futile if multiple, other heavy users in the site are adversely affecting network performance anyway. As operators move away from all-you-can-eat plans and adopt volume-based pricing, and as more operators add policy controllers to their networks, more will have opportunity to introduce throttling mechanisms. Vendors

The myPolicy application offered by Bridgewater Systems, for example, enables customers to connect to the policy controller to set their own usage limits and usage alerts, provision quality-of-service preferences for their accounts. The application also helps educate users about data consumption. Ericssons Shah and Tellabs Jalil are each excited about the capabilities throttling will offer when it is enforced on a dynamic or as-needed basis to help relieve network congestion. Doing it more intelligently, could, I think, be the biggest opportunity we have, Jalil said. Shah recommends combining it with prioritization. If capacity is available, a customer who has exceeded their quota will not experience throttling. When congestion occurs, the network will allocate data throughput to users based on the priority level they have paid for. The network will manage the traffic from quota-violators or all users if necessary according to fair usage terms and in ways the customers understand. In theory, the approach optimizes network access at all

We believe if prioritization is added to throttling, there is a major advantage of combining these two.
ali shah, direCTor oF broadband sTraTegy in The sTraTegy and markeTing organizaTion, eriCsson norTh ameriCa.

are already finding innovative ways to employ tools developed originally for throttling purposes to create more personalized plans and quality-of-service features for individual customers.

times in a way that should keep users satisfied. We believe if prioritization is added to throttling, there is a major advantage of combining these two, Shah said. l
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Do Customized Services Impede on Customer Privacy?

by peggy aLbright

Policy: Shaping the Future

by Jonathon gorDon, Director of marke ting, aLLot communications Whats in a name? That which we call Policy Control by any other name would not sound so dire. The people that came up with the industry term that refers to our niche of the telecommunications industry really didnt seem to think things through sure technically it might have some merit, but to the wider public it just sounds scary. Policy Control is essentially implemented in mobile networks to achieve two distinct tasks: Maximize the efficiency of the data network that is to make sure that even when parts of the network are congested, time or delay sensitive traffic (such as VoIP or Video) can still operate effectively and deliver an acceptable level of user experience (Control or Optimization) Offer mobile broadband subscribers (i.e., customers) a better quality and more personalized mobile Internet experience. Fundamentally, we are concerned with keeping the networking running, the applications flowing and enabling access to content. When conditions on the data network are less than optimum we endeavor to ensure all subscribers get fair access to whatever bandwidth is available. While individual operators may have different views of how to best manage their own network under adverse conditions, tools that provide granular visibility down to the application, subscriber and into the topology are critical for making an intelligent decision on how to optimize their infrastructure. The same technology enables operators to differentiate customer offerings. For too long subscribers have had little choice in how they purchase Internet access and over-the-top services. Mobile Internet and Policy Control are together changing that. Policy Control enables operators to set policies for individual subscribers, giving customers the chance to choose an Internet experience (or service plan) that suits both their needs and their budget. While some internet users just like to catch up on the latest news and email, others may be heavily into online gaming, or social networking. Different content, applications, usage habits and devices all contribute to where the Mobile Internet is heading. It seems viable that the mobile core, of which policy control is already an essential feature, will become the central hub for all access topologies. We are already seeing the convergence of fixed and mobile networks, where operators want to provide custom-

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Policy control tools can be used to better understand the customers usage patterns and activities. But operators must be mindful of how they implement these services. In years past, mobile operators used policy management tools to control bandwidth or balance load at the network level. Today, with the use of policy control technologies deployed in the packet core, operators have new opportunities to configure services in much more specific ways and at the individual user level. However, the new business opportunities created by these cutting-edge policy control tools also introduce new complications, and that is the issue of customer privacy. Customization by definition requires a close understanding of what the user wants or needs, but the highly granular understanding of user subscriptions, application requirements, location or other personal details that many new applications require can involve particularly sensitive matters of confidentiality. To what extent do customized services undermine the customers privacy? How do operators build businesses with technologies and services that involve privacy issues? Fortunately, while many emerg13 sep tember 2 010

ing customization services require that the network have an understanding of potentially confidential information, this is not always the case. Policy management doesnt necessarily require drilling into individual user information, said Fred Kemmerer, chief technical officer at Genband. Policy controls used to adjust an individuals data bandwidth, for example, can be activated by metering triggers in the network that identify when the customers usage quota is exceeded, without the need to observe characteristics of customers traffic. Policy controls can also be used in ways that are highly transparent to the user, and with the users

Policy management doesnt necessarily require drilling into individual user information.
Fred kemmerer, ChieF TeChniCal oFFiCer, genband

direct consent and involvement. As operators introduce data plans that have bandwidth limits, for example, they will be able to offer policy control applications that subscribers can activate to customize, monitor and manage their data consump-

tion and presence, location and other personal information. To suggest another example, parents will be able to use policy control applications to specify which hours during evening when their young children can access certain mobile data services, or provision their childs phone to disallow service during certain periods of the day. continued on page 15

ers with a single policy (service plan) across all types of topologies, whether mobile, WiFi, DSL Cable, etc. The intelligence and the decision making ability of the Policy Charging and Control functionality as defined in the 3GPP will enable users to benefit from a single policy across multiple devices (smartphone, iPads, ebooks, dongles, etc.), topologies, applications and content. The bottom line is that Mobile Broadband is the future a future that is already here. Enabling policies on networks to better optimize the delivery of content, and at the same time giving the consumer choice in how they use (and pay for) that content is key in shaping how that future will look. l

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continued from page 13 As operators offer policy-related options that have privacy implications, Kemmerer says they will draw from established and welldeveloped mechanisms to protect privacy and make sure data is not used inappropriately. What were all about here is extending the privacy protections that carriers have used for years in the areas of their business where the regulatory framework is more clear, as well as extending the users ability to adopt services and control them to make the whole thing work, he said. Privacy control applications that are most likely to generate privacy concerns are those that will be used in conjunction with subscriber data management tools to add a measure of sophistication to mobile advertising, location-based and other value-added services. In these cases, the application of easy-to-understand and very specific privacy precautions will do much to make these emerging services more acceptable, appealing and meaningful to customers. For example, policy control techniques can be employed, along with strict rules on how the data will be used and shared with third parties, to let customers define when, where and under what circumstances they are willing to receive mobile advertisements and whether those ads should have access to location-related information. The tools also can be used to let customers control how presence-related information on social networking sites is used.
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If you have opt-in and opt-out capabilities, a sense of who the customer is, what is valuable to them and what would be useful, then I think you have a stronger offering, said Shira Levine, directing analyst for next generation OSS and policy at Infonetics Research. In fact, when it comes to mobile advertising and location-based services, operators will need to have that understanding if they want the program to succeed. An advertising solution that does not employ some level of analytics to make sure advertising reaches only those customers who are friendly to it, for example, could risk alienating the larger customer base or, worse, create a backlash in the media. Kemmerer described a scenario in which a customer might agree

to opt-in to a program that offers the customer a higher amount of bandwidth per month if they allow the operator to observe aspects of their traffic, make it anonymous and aggregate it with other data for use in advertising programs. Assuming that operators will protect user privacy and promise anonymity in ways that compare, at minimum, to those used legally by search engines today, there is certainly a strong component of people in the industry that believes operators should be allowed to employ such techniques, he said. So far, operator concerns about privacy and uncertainty surrounding regulatory treatment of privacy issues have discouraged most companies from allowing services such as targeted mobile advertising on their networks. Eventually, however, operators needs to create advanced services strategies to drive revenues on their 4G networks will motivate them to introduce customized value-added services. And as advertising regulations becomes clearer, the need to ensure privacy could become a driver for investing in policy control solutions, Levine suggested. Any mobile advertising initiative will need to include some sort of policy element to really ensure that subscribers are being treated in a way that protects their privacy, Levine said. l

Unleashing the Possibilities of Next-Generation Policy Control

by Lynne t te Luna

Network throttling is the start but more advanced policy control solutions offer the potential for real-time transactions. Its clear that the popularity of wireless data has caught on in most places around the globe witnessed by the fact that AT&T Mobility the exclusive provider of Apples iPhone and other providers such as Orange in the U.K. found themselves grappling with network congestion that hit its peak in 2009. As such, a host of companies offer solutions to throttle and shape network traffic to handle the congestion. But policy companies say managing congestion is just the beginning

of what operators can do to help better monetize data services. Bill Diote, president of policy management company BroadHop has termed network throttling solutions as Policy 1.0 that will progress into more sophisticated policies for charging for services and their attributes, such as quality of service. He calls this Policy 2.0. Policy 2.0 goes hand in hand with enforcement functions but digs down into an operators network to finely slice and dice new service offerings based on policy and charge them in real time. Rather than focusing closely on mobile gateway control such as current generations of policy control solutions,

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Policy 2.0 requires software-based components that are centralized and can communicate in real-time with multiple mechanisms, from the mobile gateway to the GGSN, and have the capacity to process a massive amount of real-time transactions, Diote said. It creates a host of possibilities. Peter Ahimovic, head of bandwidth and policy management with Telcordia, talks about the ability for operators to sell base packages but allow subscribers to continually add on to their packages, whether thats for 30 days, one day or an hour. For instance, a subscribers plan may not include peer-to-peer file sharing, but if that subscriber attempts to perform that type of function, he or she may receive a notification the service can be added for a fee. Perhaps a subscriber wants better quality of service for a particular video download but not others. Operators can charge for that, he said. Now it gets into the whole paradigm of giving feedback to the customer, Ahimovic said. You have a base service and can upsell packages, all of which would have their own corresponding charges and QoS. Diote also envisions operators beginning to layer additional services onto base packages for data users, and he sees policy capabilities added to devices, turning them into remote controls of sorts to select programs, applications and service levels. You can tie it into the whole throttling story by offering people a continued on page 17
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continued from page 16 choice to continue their application in high bandwidth or switch to low bandwidth in exchange for credits to use later, Diote said. The key is giving users a choice. Diote said North American operators are still skeptical about such charging mechanisms, and, ironically, emerging markets are coming to the forefront of this concept. North America has been focused on Policy 1.0, which has been about defensive uses of technology telling customers what they could and couldnt do on the network, Diote said. Meanwhile, the CTOs and CMOs of operators in emerging markets were sitting with us asking us how to use policy to be a platform for innovation. Indeed, in emerging markets like India and Malaysia, where cutthroat prepaid plans are the norm, operators are deploying differentiated services such as a parental control service that enables parents to create individual settings for their childrens phones that includes capabilities such as selecting times during school hours that texting is allowed, limiting Internet access or even turning off devices at certain times. Ahimovic believes North American operators will first evolve tiered pricing plans, which are still in their infancy. He calls that Policy 1.5. North America may go through this stage of sharing quotas, such as family data plans for one price and everyone gets to use it, he said. But I look at it as a consumer myself, and the feedback is how do I know how much a megabyte is? l
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Does the Net Neutrality Debate Help or Hinder the Need for Policy Control Tools?
by Lynne t te Luna Operators have to manage network traffic to stop congestion. But the key is making sure they dont discriminate one type of traffic from another. The wireless industry is hoping the Federal Communications Commission will tread lightly when it comes to placing net neutrality requirements on wireless network. If it doesnt, there will be a tangled web of unintended consequences that will stymie the operators ability to innovate and simply offer quality service, industry experts warn. Of course, such statements are viewed by consumer advocates as threats. When Verizon and Google announced a joint public policy statement on net neutrality that forbids any kind of prioritization of Internet traffic over wired networks but proposed to exempt wireless networks, Google the staunch support of net neutrality was labeled as anti-consumer.

The argument for exempting wireless from the net neutrality debate has centered on the fact that wireless spectrum is a finite resource and operators cant easily throw more capacity into their networks to continually meet the insatiable demand from their customers for mobile broadband services. They must be allowed to shape traffic, throttle heavy users when needed, charge those who want to take up more network resources and prioritize more critical traffic, such as VoIP, over other traffic.

Operator Use Cases for the 3 Ps: Policy, Personalization and Profitability
by DaviD sharpLe y, senior vice presiDent, briDge water systems

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The importance of the mobile control plane, including subscriber, service and policy controls, is essential to operators as they manage the complexities of rapid growth in the number of devices accessing mobile data services and the corresponding increase in mobile data traffic. To date, operators have focused on implementing fair usage controls, driven by the extensive use of flatrate plans. However, as operators move to tiered and usage based service plans, the role of policy control is evolving beyond fair usage to include a plethora of use cases.

the transition from flatrate to Personalized, tiered services

Network, device, and application policy provides operators with controls to implement tiered service plans that let subscribers choose the combination of usage and price that best meets their needs. In a tiered model, lower-cost plans can be used to target casual users, middle-of-the-road plans can be crafted to meet the needs of the average user, and premium plans can be used to target tech-savvy consumers and business users. To successfully introduce tiered services, operators must give

subscribers a way to monitor their mobile data usage in real time such as on device policy solutions. Bridgewaters myPolicy solution provides enterprise and consumer customers with a real-time view of their mobile data usage via a smartphone application. It also enables operators to provide real-time, personalized offers such as: temporary service upgrade; free day pass for a new service; bandwidth boost services; unlimited downloads during offpeak hours; and location-based social networking services.

In this scenario, policy control enables usage to be metered based on time or volume which must be paid for in advance by the consumer.

machine-to-machine services
Machine-to-machine (M2M) services are growing rapidly, with an estimated 60 billion machines serving a global audience of six billion people. Applications in areas such as healthcare, public safety, and energy are fuelling the drive towards more ubiquitous M2M services. The control plane function in 3G and 4G networks plays a central role in the delivery of these services by managing network resources, devices, and applications. Public safety services, for example, can benefit from automated communication between traffic cameras, health monitors, and devices, with priority given to emergency data traffic. These use cases demonstrate how policy control as an integral part of the mobile control plane has evolved, with fair usage controls just one of many ways that operators are implementing smarter network, device and application controls to deliver new services. l
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Pre-Purchase data services

Pre-paid services are a popular way of increasing market penetration. They give subscribers the flexibility to buy a preset amount of data with the convenience of paying for these services via credit card, voucher or promotional offers. With the recent growth in mobile data traffic, the pre-paid billing servers used by operators have become increasingly complex. Prepurchase plans make life simpler for the customer as well as the operator, who no longer has to deal with the cost and complexity of deploying a pre-paid billing server.

The FCC acknowledged the need to regulate traffic on wireless networks when it comes to net neutrality, but its unclear just how far operators will be allowed to go. In September the FCC issued a notice of proposed continued on page 19

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continued from page 17 rulemaking that pertains to how wireless networks and specialized services should be handled under a net neutrality regime. The NPRM seeks comment on how, to what extent, and when openness principles should apply to mobile wireless platforms, with a particular emphasis on furthering innovation, private investment, competition and freedom of expression, the FCC said. Mobile broadband providers such as AT&T Mobility and Leap Wireless have recently introduced pricing plans that charge different prices based on the amount of data a customer uses. The emergence of these new business models may reduce mobile broadband providers incentives to employ more restrictive network management practices that could run afoul of open Internet principles. Additionally, Verizon and Google issued a proposal for open Internet legislation that would exclude wireless, except for proposed transparency requirements. Just taking away the ability to prioritize traffic would undermine the very nature of mobile broadband networks as the quality of services such as video and VoIP will be severely compromised, said Phil Marshall, head of Tolaga Research. You cant do that. Otherwise, the reduced quality of service will make these networks less economical, much less economical, Marshall said. There is no mobile broadband business case if you are unable to manage traffic. Susie Kim Riley, chief marketing officer with network policy com19 sep tember 2 010

pany Tekelec, has spent time with the FCC looking to understand the commissions concerns around net neutrality. She said its clear that operators have to manage their networks to mitigate congestion. The key is making sure operators dont discriminate one type of traffic such as peer-to-peer traffic over another when throttling that traffic. Everyone agrees that operators need to actively manage networks, but they have to put in techniques that do it in a non-application-specific way. That is network neutral friendly, Riley said. However, the FCC is most concerned about are service providers who charge content providers to transmit content over their broadband pipes, she said. But that doesnt mean mobile operators

its NPRM, the emergence of new usage-based pricing plans could give operators less incentive to throttle and manage usage on their networks in the first place. Jonathon Gordon, director of marketing at Allot Communications, said many aspects of policy control are positive for the subscriber, but the industry has been stuck on talk of throttling users rather than improving service delivery. A lot of what we do now is building on technology that ensures the network runs more efficiently by giving operators the ability to manage services and offer things such as premium video and content adaptation for making services work faster on smartphones, Gordon said. This concept is part of the next

Beyond Policy Control: Developing Customized and Targeted Data Plans

by ken Denman, ceo of openwave systems The flat-rate unlimited data plan is an unsustainable business model which has dangerously trained consumers to believe that data is cheap. Tiered pricing, courtesy of policy control, is a step in the right direction, but its not the final answer. Consumers appetite for mobile data is here to stay, so there is little risk of a serious backslide in mobile data usage as tiered packages become the norm. The main risk is a return to uncertainty as consumers will again be left wondering how much it costs to go online. Is it cheaper to take a taxi or walk using GPS on a mobile device? Confusion leads to dissatisfaction which leads to churn. So, if unlimited and quota-limited data packages have inherent dangers, what else can policy control offer to improve the situation? In its current form, not much; that is probably why the basic quotacounting and quota cut-off has been pushed so hard. However, with a new, subtler breed of applicationspecific policy control systems, the context of what a consumer is doing can allow service providers to richer, more personalized offerings to consumers.

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value-based Pricing
Tiered pricing plans need to be presented to the end-user in a meaningful way that directly relates to value. Megabytes and gigabytes of data simply do not have meaning to the majority of users. In the retail world, consumers inherently understand the cost and value of buying a DVD. The cost of the content (the movie) and the means of delivering it (the store) are integrated, so there is no confusion. But if they had to pay the retail outlet and studio separately each time they viewed it, would they be confused? Absolutely. Thus, the danger of todays tiered plans is that it disconnects the inherent value of the content with the cost of delivering it.

There is no mobile broadband business case if you are unable to manage traffic.
phil marshall, head oF Tolaga researCh

themselves cant offer a service that a subscriber is willing to pay more for, Riley said. Its no longer the operator charging the content provider. Its now about the subscriber choosing to pay more for a better service, Riley said. Sign up for a higher charging plan of certain applications you care about and could perform better. Tiered service pricing based on certain buckets of megabytes is the first step in that direction, Riley said. And as the FCC alludes to in

generation of policy control that enables operators to charge based on services and quality of service, which in turn have the effect of mitigating network congestion. The concern I have is that consumers might look at it in a negative way since they are getting charged because they want better video, Riley said. Consumers are conditioned to pay for this big bucket. Its like everyone being conditioned to fly first class and all of a sudden they have to pay for it. l

todays data plans is to integrate web actions like sending a Facebook message into a more compelling, more personalized package. Why force consumers to consider the per-byte cost of accessing the Internet on their mobile device to send a message to a friend on Facebook? Instead, operators could offer a text-savvy package for a certain demographic that included 1,000 messages SMS, Facebook, Twitter doesnt matter. Its not about paying for something that was previously free; it is about putting a fair price on something that has real value to consumers and letting them monitor their own behaviour which includes easy upgrade or downgrade options. In order to roll out richer pricing plans which are more relevant to consumers lives, operators need to find a more dynamic, applicationaware version of policy control with greater transparency so consumers can self-regulate. Without it, the tiered pricing model will be fraught with confusion and dissatisfaction. Openwave Traffic Mediation powers more service-oriented policy management which will open the door to the market demands for dynamic and targeted data plans. l

web-integrated Packages
One way to inject real value into

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