Tag Archives: broadband

Broadband at 1 Gbps in 2012!!

korea2012

Koreans and Japanese enjoy today broadband connections at 100 Mbps. Not being enough, the Korean Communications Commission wants to boost the country broadband infrastructure to provide 1 Gbps service in 2012!!

That  is a tenfold increase from today’s speed and in only three years from now. If the objective is achieved, that increase in performance would even surpass Moore’s Law, initially forecasting doubling of computing performance every 18 months, and shortened by the industry to only 12 months. But Koreans would even go faster with this!

This aggressive objective makes the $6 billion broadband stimulus package of Obama’s administration quite shy, if we are to believe that broadband infrastructure is an asset for the economy to drive innovation and growth.

Quoting Om Malik:

Availability of such high-speed connections has allowed Korea to emerge as a leader in the MMO and online gaming industries. Even higher broadband speeds are going to unveil many new usage scenarios, which can lead to new company creation. […] IPTV is another area of focus for KCC. […]

The efforts are part of giving Korean IT infrastructure a boost, according to KCC. The plan is going to cost about $24.6 billion and will create 120,000 jobs. KCC was established because of the convergence of telecom, broadcast and broadband industries.

Image from JoongAng Daily.

Telecom at the Speed of Moore’s Law

While the IT industry has Moore’s law in their DNA, the Telecom industry (both telcos and vendors) have not yet been able to embrace the concept and many analyst keep raising doubts about the sustainability of Telecommunications decreasing margins.

Microprocessors, hard-drives and memory cards double its performance/cost ratio every year. The price of an 8GB SD card was $50 last year. Now you can get a 16GB SD card for the same money. The price of a mid-range laptop has been just under $1000 for many years, only that each year you get a substantially better machine.

The Telecom industry has not been able to find the trick. Voice has been the key revenue generator service for ages. With voice revenues clearly declining, the industry is only now, beginning to switch to fix monthly fee models with a cap on voice minutes. People use the phone more and more. So the focus of telcos is now to keep the monthly fee price level, but give more minutes for the same fee, instead of reducing tariffs. The model also applies to broadband. Mobile broadband is capped, but telcos will aim at sustaining the monthly fee price, and focus on adopting more performing technology that will enable to increase the volume cap every year while slightly increasing the monthly fee. On fixed broadband the game is not capping but increasing the bandwidth. If you plot the increase of broadband bandwidth over the past years the growth is also exponential, and telcos should not focus on capping, but on making sure the technology enables them to increase bandwidth every certain time.

Moore’s Law is the self-fulfilling prophecy that keeps the dynamism of the IT industry and a sustainable market. Consumers and enterprises are now used to renew their PCs even before those are 4 years old, so in mature markets the demand does not seem to decrease, but at least sustain. Add the next billion of PCs in emerging countries like China, India or south east Asia and judge if the industry is still healthy.

As IT and Telecom converge, can Moore’s Law bring the same dynamism to the Telecom vendors and operators? Will they be able to keep the pace?

Telcos do not need Metered Broadband

Building a broadband network based on Fiber-To-The-Home (FTTH) is a big investment. Once the fiber is deployed Telcos usually offer IPTV as one of the main revenue generating services to pay-back the investment.

Some Telcos argue that once they put all this huge capacity available to the user, anyone can benefit from their infrastructure investment to provide advanced services. With 100Mbps broadband, Unbox or iTunes downloads are clear competitors to IPTV, and Telcos are concerned that they invest for others to profit.

Telcos enjoy substantial revenue from monthly fees now that Broadband is a mass market. Only these fees should pay back the infrastructure, considering that fees increase over time, while the Moore’s Law applied to network equipment will deliver increasing bandwidth at lower costs.

Internet is an engine of innovation, and the Society demands it stays like that. An open Internet with flat data rates has enabled a number of applications we would have never enjoyed with a metered model: YouTube, Bittorrent, Google Earth, Skype or SETI@home. Doesn’t ISPs benefit from these applications to pull demand for higher bandwidth and therefore higher broadband fees?

We need Internet the way it is today. That does not mean that Telcos have to made all their IP capacity available for basic broadband service. IPTV is one of the services that should run on an overlay IP network, with differentiated traffic from Internet in order to preserve QoS. “Leased lines” services based on MPLS tunnels are also being sold at a premium compared to regular broadband access. High QoS, carrier-grade communications services powered by IMS are also an added-value on top of regular broadband. Managing the Digital Home network is another opportunity for growth for Telcos, as the Digital Home gets more sophisticated with IPTV, Home Automation, Femto cells and multiple connected devices (NAS, Media Servers, Media Players, IP Cameras, digital frames and WSNs)

Internet the way we know is a cornerstone of the digital revolution that is bringing so much progress. Telecommunication companies should be the guardians to preserve it and make it grow.

Should Broadband be charged as an Utility?

Defenders of Metered Broadband argue that other Utilities such as Electricity and Water are all charged based on usage: The more Watts-hour you consume the more you pay. So why not the same for broadband: the more gigabytes you download, the more you pay. Yet there is a big difference. Water and electricity are limited scarce resources, but bits are not. The more electricity we consume, the more that needs to be generated and that has a cost (as Al Gore taught us, not only for our pockets but also for the planet). In Broadband, once the bandwidth is provisioned, the transferred bits have a zero marginal cost for the ISP. The capacity has the same cost whether idle or in use.

Broadband services should instead be compared with Pay-TV services. The marginal cost of people watching one more hour of TV is zero. That is why no one could imagine that a Broadcaster or Cable Operator would cap the number of hours of TV that you consume. Imagine Comcast or Canal+ limiting to 4 hours per day the Pay-TV you can watch. That would be good for our mental heath but insane from the user point of view. What Pay-TV Service Providers limit is the capacity offered: e.g. basic package has 40 channels and you can upgrade to premium packages with additional channels. Similarly, ISPs are expected to charge based on capacity (bandwidth) provided, with premium options (more bandwidth). But please not on usage.

Note: Only Mobile Operators can rightly argue that spectrum is an scarce resource, and therefore they need to cap traffic to preserve it.

Metered Broadband: Pay-per-Use or Abuse?

Competition among ISPs used to be fierce in the initial times of dial-ups access, with tens of ISPs in the market. That might explain why ISPs did not manage to retain any control of users and flat rates were made the rule to provide plain open Internet access. Comparatively, the much less competitive mobile market has enjoyed a controlled Internet Access and near-abusive mobile data rates (Ask anybody that has used data while on roaming)

Later ISP consolidation came, together with the increasing investments to deploy broadband. This ended up reducing the number of players and therefore competition. With less options for users, we start to see ISPs experimenting with tiered broadband plans. GigaOm reports that Time Warner Cable Broadband “… has set up a pricing plan that ranges from $29.95 a month for […] 768 kbps with a 5-gigabyte monthly cap to $54.90 per month for 15 Mbps and a 40-gigabyte cap. Overage fees will be $1 per gigabyte”

Some could argue that these limits are reasonable for a normal use, and could incentive ISPs to invest in infrastructure and provide increasing bandwidth at a better price due to the savings in backbone that the cap would allow. But for users, this is a breach in the current understanding of Internet, and threatens the sense of freedom Internet Access provides. And what is worse, it reminds of the caps and volume-based abusive rates charged by mobile telcos.

Internet is an engine of innovation. First was email and FTP, then Gopher, the Web, ICQ, Messenger, Skype, YouTube, Social Networks, SaaS, P2P file-sharing, iTunes… not to mention scientific initiatives like SETI@home, where you lend some free computing resources in your PC or PS3 for the Search of Extraterrestrial Intelligence. How can you donate some spare computing for research if you risk to find an abusive Internet bill at the end of the month? Even if the Tiers are reasonable today, who can guarantee those will be reasonable tomorrow with High-Definition downloads, video communications and new applications coming?

3G brings Mobile Broadband at last

I just discovered this interesting graph in Brough Turner’s post 3G’s biggest success is as a dumb pipe.

The graph highlights two main points: 1) 3G data trafffic has increased more than 10 times in Finland, and 2) 92% of that traffic is Internet Access from PCs. UMTS modems and Data Cards in combination with emerging data flat rates are making mobile broadband a reality. Another reading from the graph is the comparatively low growth from Symbian devices, mainly due to the poor usability of its handset browsers.  iPhone’s Safari and Android’s WebKit based browser will surely outpace Symbian in data traffic when they reach Finland.

Skype and IMS should benefit from true broadband IP access. Once there is a proper wireless pipe, IMS becomes key for telcos to own the subscribers and provide value-added services. For the users, IMS brings a richer communication, Skype-like, only that this time carrier-grade.

Skype service is absolutely great, but would you rely purely on it as a replacement of your mobile line? Wouldn’t you trust an Skype-like service (with presence, IM, network address book, high-def videocall, file-sahring, etc) if offered by AT&T, Vodafone or Telefonica instead?

 

Transforming Telcos: Telco 2.0

Imagenio
Two weeks ago I found, as a guest post at GigaOM, an interesting article from  STL Partners  on the future of broadband. While I disagree on a few points, it does bring some fresh ideas about the evolution of telcos:

Wholesale. Increasingly important model as we see in wireless with MVNOs reselling capacity from operators. New application service providers could be envisioned to re-sell connectivity as part of a Service, like high-def video streaming with some QoS assurance on top of the basic package. “Postage and packing included” models will proliferate, like the Amazon Kindle, where Amazon pays for the EVDO service on behalf of the end-user.

Two-side business model. Service providers will monetize revenues from new sources, like: advertisement, e-commerce or access to user profiles, location and presence.

– The control of the Home Network. What is simple for techies and early adopters it is still too complex for the mainstream. Telcos are in a privileged position to manage the home network for their customers and make life easy for their mainstream users.

Virtual Networks overlaid on Internet. Broadband Service  Providers can offer best-effort Internet as a standard package to comply with net-neutrality issues, and still deploy overlay networks with a guaranteed QoS for bandwidth demanding or sophisticated usages: Hi-Def Videoconferencing, Hi-Def live events broadcast, etc. This overlay networks could be provided from the telco as a wholesale for Applications providers to re-sell it bundled with their Service.

Where I disagree with STL Partners article is in the inability of telcos so sell applications or media content. IPTV and Mobile TV are in their infancy yet, and operators are still learning. Many telcos have launched successful services, like Telefonica Imagenio (IPTV), AT&T U-verse (IPTV), KDDI Lismo (Music) or Telstra Mobile TV, that demonstrate how user experience in content services can be improved through technology, and this is something telcos do master.