Ofcom’s spectrum licence fee increases: The carrier backlash begins

The UK’s big four mobile providers — EE, O2, Vodafone and Three — woke up to a figurative punch in the gut this morning. Telecoms regulator Ofcom announced its final decision on increases to spectrum licence fees, and collectively, the carriers are looking at an annual bill of almost £200 million, compared with the £64.4 million they currently pay. The jump is said to realise the true financial worth of the mobile spectrum each provider licences; as the regulator puts it, spectrum “is a valuable and finite resource, and the new fees reflect that value.” Ofcom’s decision is set in stone, and mobile service providers have to come up with the money if they hope to continue, you know, providing mobile service.

We can only speculate on how it’ll play out, but you’d have to be incredibly optimistic to think consumers aren’t going to be on the hook for at least some of the inflated bill. At this point, damage control and blame shifting are of primary importance to everyone involved. The backlash begins…

EE

EE, being the spectrum hog it is, stands to suffer the most damage to its bottom line. The carrier is looking at a yearly pay-out of £75 million, triple its previous £24.9 million bill. Understandably, the provider’s been the most vocal about the increases:

“We think Ofcom has got this wrong. The proposed licence fees for 1800MHz spectrum are based on a flawed approach. The trebling of fees is bad news for British consumers and business as it raises the risk that we won’t be able to offer the best prices, and invest and innovate at the pace we and our customers would like. We’re also very disappointed that Ofcom has not reflected the higher costs we’ve taken on to meet enhanced coverage obligations that Ofcom and Government encouraged us to accept.”

Within its statement, EE acknowledges that the licence fee increase will undoubtedly have an impact on the prices it can offer Joe Public. It also questions Ofcom’s use of a recent spectrum auction in Germany as a benchmark for setting the higher fees, noting that it’s already out of pocket under an agreement with Ofcom and the government to improve geographical mobile coverage.

Ofcom

Of course, it’s in EE’s interests to paint Ofcom as the bad guy. The regulator isn’t going to sit by and take flak quietly, though, preparing a pre-emptive defence:

“Mobile operators have a strong incentive to invest in networks and to keep prices competitive. The operators have had five years’ notice that the fees would be increased to reflect full market value and we expect them to have budgeted for this. We’ve listened carefully to the arguments and evidence put forward by industry. The fees announced today are in line with analysts’ expectations and with the amounts that operators pay for accessing spectrum in other countries.”

Not one to beat around the bush, Ofcom’s basically said: “You knew this was coming…” And the regulator isn’t wrong. A licence fee increase has been the cards for five years now, and an industry consultation that really got the ball rolling started off in 2013, after the 4G spectrum auction. It’s also important to note that Ofcom’s final decision on licence fees is the lowest increase it’s ever proposed, so perhaps the regulator is right to imply carriers should’ve been fattening their piggy banks to make ready for this inevitable price hike.

Vodafone

Vodafone is also looking at a three-fold increase to its licence fee, rising from £15.6 million to £49.8 million per year. The provider doesn’t have a great deal to say in the immediate aftermath, but the company has sent us this statement:

“We will be reviewing Ofcom’s proposed spectrum fees over the coming days as they represent a significant increase when we are already investing around £1 billion on our network and services this year.”

Like EE, Vodafone notes it’s already dumping a shedload of money into improving its network, hinting its coffers aren’t full enough to simply write the licence fee increase off without significant impact elsewhere. We expect to hear a more elaborate response from Vodafone in the near future, when its done “reviewing” the new terms, which we assume is code for looking at the bill and scratching its head.

O2

O2’s in exactly the same boat as Vodafone, with its licence fee also increasing from £15.6 million to £49.8 million annually. In a slightly cryptic statement, O2’s said:

“We’re examining the decision in detail before deciding how best to proceed.”

What that means is anyone’s guess at this point. When pushed for an explanation, O2 said they didn’t have any further comment right now, but we expect a lengthier monologue in due course. “How best to proceed” is an interesting choice of words, because barring some grand legal challenge, the only way to proceed is to pay the piper. Perhaps the carrier means “how best to proceed” drumming up the extra cash.

Three

Three is the only carrier keeping mum for now, declining to comment on the licence fee increase altogether. It, too, is looking at a three-fold hike for its small slice of spectrum, jumping from £8.3 million to £25 million per year. Maybe it’s still reeling from the blow; maybe it’s taking its time to prepare a statement; or maybe it’s trying to figure out how its going to pay for its spectrum and O2’s when its acquisition of the network goes through. Undoubtedly it’ll release some form of comment soon — today is just the beginning of what’ll likely be months of back and forth between the disgruntled carriers, and their overlord Ofcom.

[Image credit: Alamy]

IBM’s Watson heads to SF with upgraded speech and vision analysis

Almost a year since IBM unveiled a huge new home for its Watson AI in New York City, the company is bringing the Jeopardy champ west. The new headquarters, dubbed Watson West, will launch in San Francisco next year and will serve as a regional hub for communicating with startups, VCs and the rest of Silicon Valley. It’ll also be the new global HQ for IBM’s Commerce business, which will focus on bringing Watson’s capabilities to retailers and more consumer-focused companies. Watson has also gotten much smarter of the past year: For one, it’s a much better conversationalist, with the ability to understand intent and meaning in language, as well as produce more realistic sounding speech. Watson has also received some major “vision” updates, with improved image and facial recognition. Devs can now also have Watson analyze photos and video from social media. Finally, Watson’s new “Concepts Insight” service lets apps connect to deeper ideas, moving beyond the mere surface-level interpretations of text.

IBM is also making life easier for developers with the new Watson Knowledge Studio, which allows them to tap into Watson’s APIs faster. So far, the company says more than 100 partners have launched Watson-enabled apps. That may not sound like a huge figure today, but it’s impressive given that Watson’s cognitive computing capabilities are so new. Rather than programming software for very specific behavior, developers have to wrap their heads around using Watson to unearth insights from very large data sets.

A video tour of the 1,000MPH Bloodhound supersonic car

It’s been almost seven years since the Bloodhound project was first announced at London’s Science Museum. The team’s mission is a simple one: to build a car that can thrash the 763MPH (1228KMH) land speed record set by the Thrust SSC in October 1997. The supersonic vehicle is designed to eclipse 1,000MPH (1609KMH) and after numerous setbacks and delays, it’s almost ready to hit the racetrack. Needless to say, it’s an absolute monster. Slideshow-322723

The Bloodhound is being shown to the public for the first time today at London’s Canary Wharf. It has three different power sources: a Rolls-Royce EJ2000 jet engine from an RAF Eurofighter Typhoon, a cluster of Nammo hybrid rockets and a supercharged Jaguar V8 engine that drives the rocket oxidizer pump. Together, they produce 135,000 break horsepower: more than nine times the power of all the cars in Formula 1 combined.

RAF Wing Commander Andy Green, who set the previous record in the Thrust SSC, will drive the Bloodhound and attempt to make history once more. The team is planning some slower tests in Cornwall next Easter — another agonising delay from November — before hitting the desert in South Africa. A perfectly flat track 12 miles long and two miles wide has been constructed in the Hakskeen Pan, located in the country’s North Western corner. The team will first attempt to reach 800MPH — thereby setting a new world record — before returning to the UK and reviewing the data. Once they’re happy with the vehicle’s performance, they’ll travel to South Africa again to attempt the 1000MPH milestone.

Watch the Oculus Connect 2 keynote right here

Can’t make it to Hollywood for Oculus’ second virtual reality conference, Oculus Connect 2? Fret not — the Facebook-owned VR company will be livestreaming the event’s opening keynote on Twitch. But better yet, because this is Oculus after all, there’s also going to be a stream in virtual reality, which you can check out if you have one of Samsung’s Gear VR headsets. The keynote, led by Oculus VR CEO Brendan Iribe, starts at 1PM ET today. To enjoy the 360-degree immersive experience, you’ll need to download the NextVR app on your headset, otherwise we have a 2D way for you to watch the keynote right here.

http://www.twitch.tv/oculus/embed

[Image credits: Associated Press]

Source: Oculus (Twitch)

Zane Lowe Announces Launch of New Beats 1 Shows from Haim, Major Lazer & Eric Prydz

Apple Music DJ Zane Lowe has recently begun discussing the upcoming shows for a few artists on the Beats 1 radio service, including hour-long series centering around Haim, Major Lazer, and Eric Prydz. Speaking with Entertainment Weekly, Lowe discussed how difficult it was to essentially build an entire radio station from the ground up in just a few months, along with the challenge he and his team faced in gathering enough talent to fill his idea for weekly shows.

“[And] I’ve spent so much time trying to elicit information from musicians,” he continues. “Knocking on doors and hoping for 30 minutes or an hour. That’s hard! That’s really hard! So we thought, ‘What would happen if we convinced them, the artists, to invest in it and create their own platform? What road might that take us down?’ And now, 70-80% of what goes to air is made by people who make music.”

“We knew a lot of the people were only available for a short amount of time. So we were immediately thinking about how it was going to end, which got us to the idea of doing it all in seasons. Once we decided to do that, as challenging as that can be, it created a far more exciting prospect.”

The original programming blocks put into rotation after Apple Music’s launch included shows from Elton John, Pharrell, and Dr. Dre. Today’s announcement confirms that users will be able to look forward to a new slate of shows coming this fall, with Major Lazer’s “Lazer Sound” launching on Friday, October 2 at 6 p.m. Eastern.

A week later, Eric Prydz’s show will debut and alternate Friday’s with “Lazer Sound.” The slot for the band Haim — which is composed of a trio of sisters from southern California — has yet to be announced, but Lowe hinted at a show filled with the group’s brand of “infectious” music coupled with personal stories about their upbringing. Ultimately, Lowe plans to keep Apple Music and Beats 1 on a path of unique diversity among its music offerings and programmed shows, and thinks that’s what ultimately makes the service unique for its users.

“You’re either going to get this really intimate, closed door experience (Homme, St. Vincent), or a very genuine depiction of the banality and craziness of being in different hotel rooms and bus stops (WRTJ),” Lowe says. “I love that. There doesn’t have to be a barrier between us and artists, it can be just as creative of a pursuit as designing your stage set or t-shirt design. Seeing how people have used that has been really, really cool. It’s like, let’s give people all the options, so they can choose. Let’s give them the best, easiest place to hear what they love and maybe find out a thing or two.”

When Apple Music launched over the summer, it was met with a somewhat mixed reaction, balancing praises of its convenience and robust offerings but hampered by its UI and layout, among other launch issues. Many of those who initially signed up for Apple Music and received its three-month-long free trial will soon have to decide whether to commit to paying its $9.99 per month charge or cease using Apple’s new streaming music service.

A report from August suggests many of the service’s initial users have already begun to stop using it even before their free trial ended. Fortunately for those interested in the radio aspect of Apple Music, Beats 1 and its upcoming shows are available without a subscription.