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Broadband cord cutters? If this is a thing, ISPs, regulators and Silicon Valley have utterly failed

Stacey Higginbotham — Thu, 30 May 2013 20:26:07 +0000

I’m supposed to be covering the internet of things, but the story today in the Wall Street Journal on the one percent of people who have reportedly cut their wireline broadband subscriptions to use wireless instead is a hot mess that requires some careful rebuttal. But first, that the Wall Street Journal is even writing about this issue at all, as a possible “thing,” and doing so without directly citing the high cost of wired broadband until the fifth paragraph is rage-inducing.

The WSJ minces around the cost issue by distracting readers with the chimera of more Wi-Fi hotspots and better cellular coverage as the reason people are cutting the wireline cord. But its examples show cost is the issue for most people. Essentially Patrick Downs, quoted in the story, doesn’t want to pay for a wireline connection and a wireless connection, so he picked wireless because mobility is a higher value-add for him. Apparently youth in Japan were doing the same thing, prompting NTT to lower its fiber to the home prices.

Sticker shock is an issue

And if cost is the primary reason people are electing to ditch their wireline service we have two problems. One, wireline broadband costs too much, and the second is wireline can’t convincingly differentiate its value from the current LTE-wireless offerings. The first is a problem that can be laid at the door of ISPs and our regulator’s inability to boost competition or innovation in broadband. It’s taking private companies like Google and Gigabit Squared to move the needle on faster speeds and lower costs in wireline after Verizon all but stopped deploying its FiOS fiber to the home service to its customers.

As the WSJ story notes:

Leichtman Research surveys show that spending for home Internet service has risen steadily over the years, to an average of $46.78 a month last year from $28.46 in 2005. People trading up to faster services—from dial-up to DSL to cable to fiber-optic—accounts for some of the increase, but so do rising prices.

What it barely mentions is that broadband is just part of a growing telecommunications bill for most Americans, that includes cellphones, pay TV and broadband (and sometimes home voice). And what it skips over, but would be a great business story, is that despite the world moving to all-IP, where it is technically possible to deliver TV, voice and data all via the same packet network and infrastructure, prices have not dropped, and have indeed risen. The issue here is a lack of competition and regulatory will. Consumer habits are also hard to break.

For example, on the regulatory side the FCC defines anything over 4 Mbps down as broadband, which means wireless LTE networks are broadband, just like a gigabit network is. The FCC also doesn’t have a real solution for boosting speeds and pushing innovation other than empty goals that are announced after companies have already put in the real work of building out new infrastructure.

On the consumer side, people are sticking with their existing carriers (they like the subsidies) despite the nation’s top 2 carriers implementing pricing plans that eliminate many of the savings one might earn by using over-the-top IP services like Google Voice, Skype or WhatsApp.

The bigger problem is that both services look the same

That’s the pricing side. But the second problem is a bigger one in my mind. That people don’t differentiate between wireless and wireline means that the technology and entertainment industry is failing to deliver apps and experiences that make people want and demand a fast wireline service. The carriers (especially in rural areas) love that people are willing to look at wireless and wireline and see the same service, because delivering wireless has higher margins and it means carriers don’t have to invest in costly underground network upgrades.

Is Netflix a good enough reason to buy wireline broadband?

And, despite the real issues I think consumers will have if they embrace LTE in exchange for a wireline connection, the fact that Netflix or Hulu streaming is the main argument people in the story seem to have for keeping wireline broadband, means we need to push the envelope on building better apps.

While we may all have that quirky friend who chooses Clearwire or just uses their cell phone data plan (I have a co-worker who does this), if this becomes a real thing, it’s not just some pithy story about how people are giving up wireline connections because they cost a lot and we have a lot of free Wi-Fi and good cellular networks. It’s an indictment on our telecommunications policies over the years and our failure to offer visionary apps and services that make people look at wireline broadband as indispensable.

Right now, these 1 percent cutting their broadband cords, look at broadband the way early adopters might have looked at electricity. You got electricity so you could get light bulbs. But electricity brought so many other innovations and improvements to our quality of life that even though flashlights are cheap and widespread, no one says they are going off the grid because their Maglite gives them all the lumens they need. Broadband is the web today. But as more devices get connected, broadband will become more than just access to Facebook. It will be access to healthcare, to education, to entertainment and to our relationships. And it will allow smarter devices in our homes to connect, get and share useful data.

Our regulators, our innovators and our ISPs need to see that. Otherwise, we’ll be sipping our lives through cocktail straws and marveling at those who invested in the firehose of innovation that superfast wireline broadband can provide.

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It’s official: Tom Wheeler is the nominee for the FCC chair

Stacey Higginbotham — Wed, 01 May 2013 18:52:24 +0000

President Obama has nominated former cable and wireless lobbyist Tom Wheeler as the future chairman of the Federal Communications Commission. The president also nominated Commissioner Mignon Clyburn as the acting chair for the time between Wheeler’s Senate confirmation and the departure of current Chairman Julius Genachowski in mid-May.

As we covered yesterday, Wheeler is a choice that both sides of the regulatory divide support, which is something in an arena as divisive as telecommunications regulation. The congratulations from public interest groups and industry are pouring in, and we’re setting down to compose or list of the challenges we believe Wheeler will face, including the IP transition and the upcoming incentive auction.

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Rumor has it the new FCC chair is Tom Wheeler, a former cable lobbyist

Stacey Higginbotham — Tue, 30 Apr 2013 19:41:08 +0000

The Wall Street Journal is reporting that President Obama will nominate Tom Wheeler as the next chairman of the Federal Communications Commission, a choice that has been anticipated for weeks. Wheeler was the top choice to replace Julius Ganachowski, who said he would step down in late March.

Wheeler’s history as a former cable and wireless lobbyist (he was the president of the National Cable Television Association and as well as the former CEO of the Cellular Telecommunications & Internet Association) might give some pause, although other chairpersons have had close industry ties, including Genachowski, who was an entrepreneur but also a former executive for media company head Barry Diller — an area regulated by the FCC. Wheeler is currently a managing director at D.C.-based firm Core Capital Partners.

So, rather than presend the revolving door between politics and industry doesn’t exist, we’ll point out that Wheeler has the backing of some influential people in the telecommunications regulatory environment from both sides of the aisle. From a letter to President Obama endorsing Wheeler signed by 11 former regulators and industry veterans:

Tom has had an impressive career in the telecommunications and high-tech field that makeshim eminently qualified for this position. He has consistently fought on the side of increasingcompetition, including representing the cable television and wireless industries in their early years whenthey were the insurgents challenging the established players. He has started or helped to start multiplenew, high-tech companies that created quality American jobs while pushing the frontiers of technological innovation. He understands the importance of reclaiming the pro-competition, pro-innovation, pro-growth regulatory ideal.

From our perspective at GigaOM, what’s most important here is what Wheeler will have to face in his upcoming session, should he get approved by Congress. He’ll be dealing with a controversial spectrum auction that seeks to get broadcast TV owners to give up their spectrum for mobile data use, as well the transition from a copper-based wireline network to an all IP-based network. He has written a blog (the last post was in December), so go check it out for perhaps deeper insights on how he may regulate the internet going forward.

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How many people have a gigabit connection? Fewer than you think.

Stacey Higginbotham — Tue, 23 Apr 2013 15:56:58 +0000

As Google expands its commitment to bringing fiber-to-the-home gigabit connections to more places, I wondered exactly how many people actually have gigabit connections. So I asked Ookla, the company that operates the Speedtest.net service for its data. Turns out, there’s no real way to calculate who has a gig, but the numbers we do have indicate that not too many people are living in the future when it comes to connectivity.

It turns out that between the first of this year and April 8 (when I got the data from Ookla) roughly one in 10,000 devices in the U.S. are surfing at gigabit speeds and roughly 1 in 5,000 homes worldwide can match them. Ookla runs the popular Speedtest.Net service and got this data from users who tested their connections during that time period.

Unfortunately, the data on this is relatively inexact, because the art of measuring a gigabit is complicated. As late as last summer when Google launched the first plans for a fiber to the home buildout in Kansas City, the search giant had to work with Ookla to upgrade the test to even be able to read a gigabit. Even so, some customers with a gigabit might not show up because their Wi-Fi routers or computers can’t achieve those speeds and, thus, throttle them back to a mere 100 Mbps or so.

And the numbers provided by Ookla actually measure customers with speeds of above 800 Mbps, which is what it classifies as a gigabit. In the U.S. only 4,110 people have test results at that speed out of 45,468,731 people who used the Ookla tests. Globally, 34,721 users have speeds that high out of 224,404,945 tests. But, clearly not every broadband user is running Speedtest.net or has the right equipment.

Ookla also provides data on the number of people whose connection speeds are 300 Mbps or greater. In the U.S. this was about 51,100 devices or about 11 in every ten thousand users. Globally it was 204,315 devices or 9 in every 10,000 users.

For additional data points, we can turn to the Fiber to the Home Council, which said a few weeks ago that 640,000 subscribers are buying connections of 100 Mbps or more across North America. That’s a significant number, although the FTTH Council is measuring capacity that is 10 times less than what a gigabit connection can offer. For reference, the FCC in February noted that the average U.S. subscribed broadband speed is now 15.6 Mbps, representing an average annualized speed increase of about 20 percent. And below is a chart from FCC data at the end of 2011 showing the distribution of broadband speeds at the time.

This chart measures both wireless and wireline speeds as of Dec. 2011.

But it looks like the FTTH Council — as well as Google’s experience in getting 90 percent of the neighborhoods in Kansas City signed up for fiber — can tell us something definitive about gigabit connections: People want them. When fiber-to-the home is offered 44.8 percent of the homes passed take the service. Given that those are generally the most expensive connections, that’s a pretty high take rate.

So it looks like even a few thousand Kansas City, Austin, Texas or Provo, Utah homes connected via Google Fiber will not only significantly change the percentage of gigabit customers in the U.S. but also around the globe. Still, we have to start somewhere.

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The fastest way to speedy networks: ignore Uncle Sam

Blair Levin and Ellen Satterwhite, Guest Contributors — Sat, 13 Apr 2013 17:30:37 +0000

When we were working on the National Broadband Plan, which was released in 2010, we were dismayed to learn that not one American city had made it to the list of “fastest cities in the world” – and worse, there was no prospect of any joining the list in the foreseeable future.

This obviously concerned us, as that list means far more than simply being fast. As our analysis suggested, America needs a critical mass of communities with world-leading bandwidth in order to develop the human capital required to design, build, operate and, above all, innovate on top of the best networks in the world.

Thankfully, it looks like that list is finally about to get a little more red, white and blue.

The key to boosting economic development

This week’s announcement that Google is bringing its Google Fiber product to Austin, last week’s news that the North Carolina Next Generation Network (NC NGN) project had eight bidders, and similar projects in communities including Chattanooga, Chicago, Seattle and Gainesville, suggest that local leaders are starting to crack the code for how to drive network upgrades in their communities.

What these efforts have in common is leadership that understands that world-leading connectivity is the foundation for future economic development and competitiveness. Though still nascent, anecdotal evidence is mounting of success stories, from the bond rating increase Kansas City received (thanks in part to Google Fiber), to the miraculous turnaround of Chattanooga, which as Tom Friedman reports has changed the city from “a slowly declining and deflating urban balloon, to one of the fastest-growing cities in Tennessee.”

Local leaders are learning to build agreements with private enterprise that work for both the private and public interests. These efforts lower deployment and operating costs as well as risk, while at the same time creating numerous public benefits including attractive service levels and reasonable consumer pricing. These agreements, in effect, are new versions of the social contracts that enabled phone companies and cable companies to build out their networks in the last century.

While the network upgrade may seem to be only about speed, in actuality it will also drive other public improvements as well. Expectations are that the upgrade Kansas City is now enjoying will result in increased adoption of information technologies, more effective government use of broadband for education, health care, public safety and other public goods – as well as creating competition.

Of course, this is a dance in which it takes “two to tango,” and it would not work without private sector entities willing to find a way to provide abundant bandwidth. Google deserves much praise for leading the charge, and the fact that the Research Triangle’s NC NGN project received a number of bids – including from the incumbent cable provider Time Warner Cable – suggests others are finally starting to figure out the new math.

Local leaders can’t wait for federal moves

Federal policymakers certainly understand the importance of faster networks, but as a recent workshop at the FCC demonstrated: The federal government’s actions, other than a one-time Recovery Act investment, have been neutral, at best, and probably negative. There are positive steps that can, and should, be taken.

Sen, Jay Rockefeller (D-WV) wisely noted that the E-rate program – which delivers bandwidth to schools and libraries – should be updated to provide gigabit connectivity to the classroom. This program could be structured to catalyze broader community upgrades. Other federal agencies can be enlisted to support community efforts in ways that will not cost taxpayers more but will result in better services.

Unfortunately, as we discussed in a recent speech, the federal government seems ill equipped to approach the opportunity with the analytic, experimental, action-oriented frame of mind that we see in the Gig.U communities. We are hopeful that with new leadership coming to the FCC, this will improve. To date, however, it has been local leadership in partnership with companies willing to invest ahead of the current market that is driving the engine for American leadership in a big bandwidth economy.

For gardeners everywhere spring’s arrival is a time for new beginnings and hope; fail to tend to your garden, however, and you don’t get to harvest. So it is with bandwidth: There is still much to do, the projects that are underway still have hurdles to cross, more communities need to consider how existing projects chart a path for their community, and the federal government must figure out how to move beyond rhetorical support. But now we are finally taking the first steps, have seedlings taking root. With a little luck, they will flourish and spread at gigabit speed.

Blair Levin is the Executive Director of the University Community Next Generation Innovation Project, or Gig.U; he led the development of the National Broadband Plan in 2010 for the Federal Communications Commission. Ellen Satterwhite is Program Director at Gig. U; follow her on Twitter @esatts.

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Photo courtesy Steve Cukrov / Shutterstock.com.

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Analyst: Verizon’s network neutrality challenge may have to wait until fall

Stacey Higginbotham — Mon, 25 Mar 2013 20:57:17 +0000

The D.C. Circuit Court of Appeals is likely to wait until September before hearing arguments in a case that challenges the Federal Communication Commission’s right to implement network neutrality, according to a research note. This would delay a decision until the end of this year or early 2014. Originally the arguments in the case, which was filed by Verizon and Metro PCS, were anticipated by May, with a decision made some time over the summer.

At this point the excruciating slog that has been the network neutrality rule-making process just continues to play out like some sort of successful Disney franchise moving from movie theaters to several straight-to-video releases. The news about the shift in timing from the court comes via a research note penned by Stifel Nicolaus, an investment bank, on Monday afternoon. The note said:

The briefing schedule was completed in January and there seemed to be a good chance a three-judge panel would be named any day to hear the case, with oral argument scheduled for no later than May and a ruling possible over the summer. But our understanding is the case will not be scheduled for oral argument before next September (absent unforeseen circumstances), though the panel could be named sooner. The court generally takes a break from oral arguments between May and September.

Analysts Chris King and David Kaut note that the timing for the eventual ruling would subsequently get pushed back to the fourth quarter of this year or early next year. They also note that the timing is likely a disappointment for both Verizon and Metro PCS. Recall that the network neutrality regulations were released in Dec. 2010 and weren’t published in the Federal Register (and thus becoming both real regulation and now open to a lawsuit) until November 2011.

I suppose another nine months or a year before the fate of those rules will be decided is just par for this particular regulatory course.

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Rating the legacy of outgoing FCC Chairman Julius Genachowski

Stacey Higginbotham — Fri, 22 Mar 2013 23:19:37 +0000

After almost four years in the role, FCC Chairman Julius Genachowski said Friday that he was stepping down.During his four years as the head of the FCC, he failed to stop a stunning loss of regulatory authority as a result of a court case started by his predecessor, and made minuscule strides in boosting broadband competition. To top it off he also oversaw regulations that may further diminish the FCC’s authority as we head into the IP age.

He did however, forge better connections between the tech industry and the FCC and managed to stop a merger that would have certainly hurt consumers. He also tried to make more wireless spectrum available — taking on the powerful broadcast industry to do so. But instead of listing his achievements and capitulations, I dug up a list that my colleague Om Malik and I wrote back in 2009 when he was named to the role.

In the post we told him what he needed to focus on during his tenure. Now, it’s time to look back and see what he has accomplished.

FCC Chairman Julis Genachowski

An internet bill of rights: While Genachowski did manage to pass a version of network neutrality regulations in 2010, he did so in a way that leaves those rules in doubt before a lawsuit that has been filed by Verizon and MetroPCS. Instead of addressing the idea that the FCC has no power to regulate things that occur on information services (basically anything that’s delivered via the internet) which surfaced after a court ruling in 2010, Genachowski’s FCC did nothing to try to strengthen its authority before passing those rules. Now, the case is before the same court of appeals that decided against it the first time around. Grade: C

A focus on one key metric for all FCC decisions — namely returning the U.S. to the global forefront of Internet and mobile technology: On the mobile side, the chairman focused on LTE deployments and getting more airwaves for mobile broadband. And U.S. carriers have already deployed LTE networks ahead of many other countries. On the wireline side, it’s a bit mixed. Broadband caps and a lack of wide scale fiber to the home projects are keeping the U.S. far from the top in international rankings. According to the most recent (June 2012) OECD reports, the U.S. isn’t tops in terms of average or median advertised speeds. We were No. 1 in terms of connections, however. Grade: C+

An emphasis on future technologies (mostly wireless) that boost marketplace competition: Here the FCC has done a lot, despite political and unexpected technical hindrances. Genachowski’s FCC attempted to create a wholesale 4G network using satellite airwaves only to see that idea flail as interference with GPS spectrum was discovered. He also stopped a merger between AT&T and T-Mobile that was not in consumers’ best interests while also pushing for more spectrum and setting in motion an incentive auction that could provide airwaves for the carriers as well as for unlicensed broadband. Grade: B

Special incentives to attract new players (and not older companies) that bring broadband to the masses : Genachowski hasn’t done much here except issue press releases, but others have stepped up including Google and Gigabit Squared to bring gigabit fiber broadband to a few cities. Grade: B-

Tax credits for widespread deployment of broadband speeds of upwards of 20 Mbps down and 10 Mbps up for less than $50 a month without caps: That’s not happening. Grade: F

Better and more connectivity to office buildings, especially from newer players: While companies like Webpass or Sonic.net continue to deploy faster services in more places, business broadband wasn’t an issue the FCC has touched. Grade: F

An IP-centric, rather than voice-centric, approach to reforming the Universal Service Fund: This is a thankless task, but the FCC has started on the road to an all-IP world first with universal service fund reforms as well as a current debate on how to make the transition to an all-IP world, as well as what rules the agency should enforce. Grade: B

FCC Chairman Julius Genachowski.

Policies that bring quality of service into the wireless agenda: Om envisioned this as something like penalties for dropped calls, but I’ll expand it to issues like Verizon’s phantom data charges and the fights between app makers, phone companies and carriers that tended to catch consumers in the middle. The FCC was actually pretty vocal in these cases, even if it only managed to draw attention to bad behavior. Grade: A

An understanding that Google, and other web companies, are not the consumer’s friend, so their agenda shouldn’t automatically be trusted: Politics is a sport for big boys and Genachowski’s FCC was pretty transparent in pitting Google and other tech companies against the cable guys and the telcos and assuming that the resulting middle ground was an okay place for consumers. Grade: D

Final summary

All in all, Genachowski spent a lot of time on wireless, believing that to be an area where the FCC had room and regulatory authority to add capacity and improve competition. He was utterly neglectful on the wireline side, not doing much to strengthen competition, or even address issues such as caps and the virtual standstill on investment in rural areas. He also exits an agency that is weaker on the regulatory front than when he started and may end up weakening it further depending on the rulings in the network neutrality case.

He did start the arduous process of reforming the telecommunications regulatory regime to reflect the IP-based future and tackled universal service fund reform. Without a successor named yet, it’s hard to say what the next priorities will be for the FCC, but bringing off a successful auction of airwaves taken from the broadcast industry will be on the agenda as will the issue of how to regulate (and transition to) an all-IP telecommunications network.

Meanwhile, consumer issues such as the high cost of broadband, data caps and the eventual fate of network neutrality are all issues that may or may not change regardless of the new chair. The more things change, the more things still manage to stay the same.

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White spaces networks are not “super” nor even Wi-Fi

Peter Rysavy, Guest Contributor — Sun, 17 Mar 2013 20:30:32 +0000

Recently there has been a push to make a significant amount of unlicensed white-space spectrum available in the 600 MHz band as part of the Broadcast Television Spectrum Incentive Auction Rulemaking. As reported in BNA, the FCC is considering making an additional 30 MHz of spectrum available for unlicensed use, augmenting existing white-space spectrum. Proponents of this unlicensed band are using the term “Super Wi-Fi” to describe the technology that would use this spectrum. The only problem is that it’s not super for multiple reasons, and it’s definitely not “Wi-Fi.”

The term Wi-Fi refers to interoperability compliance with specific IEEE 802.11 standards, and is a designation controlled by the Wi-Fi Alliance, the organization that certifies Wi-Fi gear. The Wi-Fi Alliance is not happy about the term “Super Wi-Fi” had this to say in a press release last year, “The technology touted as “Super Wi-Fi” does not interoperate with the billions of Wi-Fi devices in use today.” In addition, they state, “Wi-Fi is a registered trademark of the Wi-Fi Alliance and the term ‘Super Wi-Fi’ is not an authorized extension of the brand.” So let’s just call it “white-space” network, which is the origin of this technology.

Since it’s not Wi-Fi, it needs new radios

Because super Wi-Fi isn’t a new band and has a new radio standard, existing Wi-Fi radios in phones, tablets, and laptops won’t work with these white-space networks. Any user wishing to connect over a future white-space network will need entirely new equipment, most likely a USB form-factor modem. Another possibility would be a wireless router that connects to the white-space network and provides Wi-Fi connections as a hot spot; however, that newly created Wi-Fi hotspot is then subject to all the congestion frailties we currently experience on Wi-Fi networks today.

Another important issue is the radio standard itself. There are two different standards being developed for white-space spectrum, IEEE 802.11af and IEEE 802.22. IEEE 802.22 was just recently completed but IEEE 802.11af is still in development. It’s not at all clear which of these standards will prevail in the market, or whether something entirely new will come along. Dueling standards generally serve to confuse and delay markets.

Now let’s try to understand the “super” part of this technology, since I don’t really see anything that “super” about it. First, it’s quite slow compared to existing Wi-Fi technologies, limited to a peak rate of 29 Mbps. In contrast the latest Wi-Fi standard, IEEE 802.11ac which is still under development but available in commercial product, can deliver throughput rates close to 1 Gbps (800 Mbps) in a base configuration, and over 6 Gbps in its most advanced configuration.

Who will build the networks?

Second, claims about its superiority are based on an assumption that as-yet-unidentified service providers will deploy networks to operate on this white space spectrum all over the country and offer wireless broadband service. Policymakers seem to hope that these new networks will somehow alleviate the mobile broadband capacity crunch that we are experiencing.

This notion, however, is flawed. First, it is extremely unlikely that any entity will invest billions of dollars in massive amounts of network infrastructure to use unlicensed spectrum to support commercial wireless broadband services. The carrier’s inability to guarantee service quality, predict and manage capacity, and eliminate or prevent interference render unlicensed spectrum an inferior solution for providers who compete based on quality of service and ability to support bandwidth-hungry apps and devices.

Add to this the possibility of different technologies using this band and it looks like an even less attractive basis for a significant capital expenditure which needs a return on the investment. For example, an IEEE article states that there is likely to be heavy degradation of 802.22 performance if it operates alongside an 802.11af network.

One thing we have learned over the least twenty years of building wireless data networks is that large volumes of users, whether its consumers, business users, or even M2M applications, subscribe to a wireless network technology only if they can obtain really broad coverage. Wireless network technologies with limited coverage have achieved only limited commercial success, including technologies such as Cellular Digital Packet Data (CDPD), Metricom Ricochet, and most recently Sprint/Clearwire’s WiMAX network.

The Google white spaces database in action.

White-space networks will be similarly limited in its coverage, but will further be complicated by being suited only for fixed operations. This is because the technologies currently envisioned to operate in the white space spectrum rely on the modem’s current location to query a database to learn what frequencies it is authorized to use.

Is LTE a better bet for this spectrum?

In contrast, wireless data technologies that have enjoyed wild success, such as EV-DO, HSPA, and LTE are technologies with extremely broad coverage, coverage achieved from tens of thousands of base stations covering almost all of the population. It may seem to be an apples to oranges comparison to compare a commercial LTE network with a white space network, yet it is exactly this comparison that needs to be made, because the spectrum being contemplated will end up being used for LTE networks or for white-space networks. There is no middle ground currently under discussion or development.

I believe one effective basis for such a comparison is to consider the aggregate capacity the two different networks might provide. The math for this is straightforward. Simply consider the number of possible sites, multiplied by the amount of spectrum, and multiply that by the spectral efficiency.

According to CTIA, there are some 285,000 cell sites. Assuming the spectrum was auctioned, cellular operators would likely deploy the spectrum across most of these sites, but a conservative estimate would be half these – 142,000 sites, each with 3 sectors. Taking 30 MHz of spectrum under consideration and average LTE spectral efficiency of 1.4 bps as per my studies and writing on this topic, that amounts to 17,640 gigabits/second (Gbps) of additional national mobile data capacity.

White-space networks could have comparable spectral efficiency and could also be deployed in 3 sector configurations. The only variable in question to determine the total capacity delivered by white-space networks using the same amount of spectrum is the number of sites (access points). Given my previous arguments of interference concerns, it’s inconceivable that anybody would build out white-space networks with density equivalent to cellular network.

White spaces are for local networks, not national ones

White spaces might be good for coffee shops?

Usages are more likely to be adhoc and localized – just as with Wi-Fi. It might make sense to deploy a white space network on a campus, at an oil well, or in a town, but given the lack of control over the spectrum, it won’t make sense for any entity to deploy a national network. As a consequence, my expectation is that the total number of white space sites will be significantly lower than that of today’s cellular networks, and thus the aggregate national data capacity provided by the use of that spectrum will also be significantly lower. This lower data capacity represents a lost opportunity for the spectrum.

It’s all well and good to create experimental networks and to foster innovation, but the 600 MHz band represents a precious resource at a time when providing sufficient capacity to foster the mobile broadband revolution is crucial, and a time when new sources of spectrum seem ever more challenging.

I believe applying that spectrum to technologies that will use it the most fully will provide the greatest societal and economic benefit. Right now, those technologies include LTE and LTE-Advanced. We should continue to foster innovation and experimentation with white space spectrum and Wi-Fi, but not at the expense of also expanding the base and capabilities of our best-in-class, commercial wireless broadband networks that depend on licensed, exclusive use spectrum for their core operations.

Peter Rysavy is President of Rysavy Research, a wireless network engineering firm.

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The technologies that will save us from the “mobile data crunch”

Bob Goodman, Guest Contributor — Sun, 10 Mar 2013 16:00:22 +0000

It’s hard to believe that it’s been less than five years since Apple introduced the App Store, launching a multi-billion dollar industry around content and services for mobile devices. Since then mobile apps have helped propel smartphone sales through the stratosphere, with shipments topping 720 million units last year. Meanwhile NPD predicts 2013 could be the year tablets outsell notebooks.

Correspondingly T-Mobile has said that smartphone users are consuming as much as 30 times more data than just a few years ago, and that appetite grows each year. Cisco estimates that global mobile data traffic is nearly doubling each year and will grow 13-fold in the next 5 years. As that growth comes at larger and larger scale, network operators are finding themselves at overcapacity. While the FCC is exploring ways to make more spectrum available, there is simply not enough to go around in the short term, and it’s only going to get worse.

This “mobile data crunch,” as we at Bessemer (and others) refer to it, offers one of the best investment opportunities there has ever been around telecom infrastructure. Here’s a look at a few key sectors we believe will experience outsize growth, and are investing accordingly. (Disclosure: Bessemer has investments in or a relationship with two of the companies mentioned in this piece; see below for those disclosures.)

New cell site technology

So if more spectrum isn’t available, how can carriers get more capacity out of existing airwaves? Many are looking to add new cell sites, as cellular spectrum can be “reused” at multiple locations if there is enough separation between sites. Carriers are very excited about moving to a “HetNet,” which will incorporate thousands of small cells – or low-powered radio access nodes that provide the same functionality as a larger tower for a small region. The HetNet will make the network vastly more complex, with the small cells adding thousands more points of interference that will need to be managed.

Companies like Ubiquisys are building intelligent software for small cells to make them more manageable within the Radio Access Network (RAN). Small cells also introduce complications with backhaul (that is, returning the signal to the core network). For all of their flexibility, they are often placed in locations where traditional methods of backhaul like fiber cables or line-of-sight-microwave are impractical or unavailable. Blinq Networks and Siklu are among the companies working on new methods of backhaul for otherwise hard-to-reach small cell deployments.

Offloading alternatives

An easier way for carriers to ease the spectrum crunch is simply to get rid of as much data traffic over their networks as possible, enabled by the use of Wi-Fi offload technologies from companies like AirSense, WeFi, and Devicescape.

Ralph de la Vega, CEO of AT&T Mobility, told an audience he “has been preaching about” this for some time. But he’s done more than that – AT&T now owns hotspots at some 30,000 McDonald’s and Starbucks locations, which handle traffic from the network’s customers when they are in the store. This is more difficult than it may seem, as carriers need to ensure that the consumer experience on Wi-Fi is as good or better than using the mobile network. Bringing awareness of which hotspots are accessible and have a strong signal as well as being able to seamlessly transition a user between the cellular and Wi-Fi network without interrupting service are critical areas being addressed by new companies.

Network shaping

Finally, some startups are going directly at the core network with software solutions that optimize the flow of mobile data traffic. This is perhaps the area we are most excited about, as evidenced by our investments in Intucell and Vasona Networks (Note: Intucell was recently sold to Cisco, but I remain on the board of directors; Bessemer still maintains an investment in Vasona Networks).

Earlier this year, Intucell signed a multi-million dollar deal to deploy its self-optimizing network technology across AT&T’s entire U.S. network. Intucell’s solution optimizes the RAN by identifying in real time faulty or underutilized cells and adjusting their configuration automatically to provide the optimal level of coverage. Similarly, Vasona is leveraging its position as software in the network to deliver IP video and data at the appropriate time and bit rate over a given cell.

What makes us particularly excited about this last category? Carriers can test software solutions on their network at a low upfront cost and see proven results in a short time before committing to a more substantial order. From an investor perspective, this means shorter sales cycles and a more capital-efficient business: We are now seeing startups that have never raised money before yet have already completed successful trials with major operators.

Bob Goodman is a partner at Bessemer Venture Partners.

Photo courtesy of E.O./Shutterstock.com.

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White House: “It’s time to legalize cell phone unlocking”

Kevin C. Tofel — Mon, 04 Mar 2013 18:34:15 +0000

After a petition to the U.S. Federal government to review cellphone unlocking legislation gained more than 114,000 online signatures, the White House was required to officially respond. On Monday it did, citing consumer support for legal cellphone unlocks.

The petition, started by Sina Khanifar, was filed in response to a Jan. 26 date that put cell phone unlocking activities in control of the network operators, essentially making it illegal for consumers to unlock their own phones, even if out of contract or paid in full. The White House response indicates that understands various circumstances where consumers should have the right to unlock their devices, saying,

“This is particularly important for secondhand or other mobile devices that you might buy or receive as a gift, and want to activate on the wireless network that meets your needs — even if it isn’t the one on which the device was first activated. All consumers deserve that flexibility.”

So what happens next?

The Obama administration publicly supports consumer choice in this matter according to the official White House response, but it’s more likely that the Department of Commerce’s National Telecommunications and Information Administration (NTIA) will work with the FCC for further action in support of consumer unlocking of cell phones and tablets.

No action is being taken now that will immediately overturn the current rules. However, now that this has an official White House response, complete with support and a set of actions that can be taken, I hope we see a change sooner rather than later.

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