A Policy Problem or Virtual Opportunity? Business Model Implications of Distributed Antennas, Ad Hoc Networks, the Internet of Things and the FCC's Open Internet Order

Distributed Antenna Systems or Heterogeneous Network (HetNet) small cell wireless solutions are liberalized and their growth encouraged by a recent FCC rulemaking. HetNets are from a regulatory policy perspective a logical or physical extension of Internet Service Provider networks, even when owned and operated by 3rd parties. In a mobile ad-hoc network (MANET) or vehicle ad-hoc network (VANET) devices, people and/or connected cars, or perhaps drones or wearables, are both independently owned and operated, and linked together as nodes participating in the joint routing and dynamic sharing of information. This paper evaluates virtualized network, cloud and Internet of Things services. Other trade-offs such as energy use, security vulnerabilities and resultant lack of trust must also be accounted for in these new and proliferating ad hoc networks. These new more fluid and flexible networks can flexibly link to data centers to offer a variety of public, private and hybrid cloud applications as a service. The objective of this paper is to review ad hoc networks, technologies and business models in light of the FCC small cell and distributed antenna system rules, and the subsequent conclusion of the FCC Open Internet order. The first hypothesis is that the 2 new FCC rules are logically inconsistent. Second, if assessed in light of infrastructureless or ad hoc network business models, the move away from lightweight information service regulations represented by the Open Internet Order may inhibit growth of the Internet of Things. The third hypothesis tested is that a new Open Specifications Model may enable both standards and policy intermediaries to engender trust sufficient to enable these new services to grow, in spite of the identified policy and regulatory barriers. This is especially significant for public policy in the case of, emergency services, whose unique characteristics may require transcendence of policy barriers blocking other categories of shared, infrastructureless ad hoc network services. Specifically, the high degree of flexibility and mobility needed in emergency situations requiring agility, rapid adaptation, and resiliency, and the role of Over the Top services delivered by MANETS, VANETs and HetNets are highlighted as posing particularly problematic challenges for the FCC given its public safety mission and stated intent to encourage mesh networks for public safety purposes. Digital services outside of emergency contexts which could be impacted by the intersecting rules include cloud TV or Over the Top (OTT) video and social media services, as well as any number of other possible digital services for the Internet of Things and other industrial Internet solutions. The access ISPs under the 2015 FCC Open Internet rules are treated the same in all cases whether offering wired or wireless, mobile or fixed access, as some have long advocated. Except for the sections of Title II which the FCC has determined it will forebear application to access ISPs at present. How these rules may intersect with emerging architectures and business models for Internet of Things services is the principal focus of this paper. Data comes from analyses of the fall 2014 and spring 2015 FCC rules applied to Internet of Things and cloud services. Advanced architectural and innovation policy initiatives of US Ignite and the Industrial Internet Consortium are reviewed as well... The paper concludes that the Internet of Things requires greater architectural and business model flexibility than is afforded by the FCC’s initial efforts to apply portions of the Telecommunication Act of 1996 to cloud services without accounting for ad hoc networks, and will offer policy recommendations for FCC and OECD consideration.