Communications

The Dumb Pipe Paradox ― How open access networks build shareholder value

On more than one occasion, "natural monopoly" arguments have been used to obtain, and/or hold onto, a government granted monopoly,  This is definitely true of access networks where the physical right-of-way to any specific real estate parcel is a limited resource, but the economics of what you put in it have changed over time.  At one time it made sense to consider telephone service a natural monopoly.  And for most of the twentieth century, telephone service was operated that way (think Bell System in the US and government run PTTs in most of the rest of the world).  In the latter 20th century, cable TV became a second such monopoly.  Today, it's increasingly clear that telephony and television are higher layer services, not inherently tied to the access network.  Yet our laws and regulation have barely evolved ― each access network is still regulated as a different vertically integrated monopoly.  And, managers in each business focus on preserving their historic monopoly even as market forces or government regulations force them to also offer Internet access.

So it's interesting to see solid economic analysis showing that access network shareholders would make more money if management was willing to open up their access networks, i.e. become "dumb pipes."

The first such argument I encountered was by Craig Moffett and Amelia Wong of Bernstein Research who wrote an interesting paper The Dumb Pipe Paradox, early in 2006.  The original paper is not on line but I have some quotes here and there are some other comments here.  Craig and Amelia were looking at Cable TV's hybrid fiber-coax networks and concluded that cable companies could make more return on investment if they were in the pure dumb pipes business.

More recently, I reported on a speech given by Benoît Felten of Yankee Group and Fiberevolution in which he argued that new fiber to the home (FTTH) investments could be paid back more rapidly if the FTTH network were open, i.e. offered to competitors at attractive wholesale rates.

Now Benoît has written a detailed report describing his findings.  Although the report is for Yankee Group subscribers only, Benoît is also giving a webinar on the subject next Tuesday and that's open to all.  Register here.

I particularly liked the polite suggestion near the end of Benoît's report:

Recommendations for Incumbents
• Re-examine your economic fundamentals in light of the FTTH business model. It’s irrational to cling to antiquated business practices if new approaches, no matter how disruptive, deliver better shareholder value.

Open Spectrum slide deck is now on-line

Here's the slide deck I used at last Thursday's meeting of the Boston section of the IEEE Communications Society.

Open Spectrum - Physics, Engineering, Commerce and Politics

View more presentations from Brough Turner.

Among other things, I debunk the following spectrum myths:

• Spectrum is scarce
• 4G is the future of wireless
• Auctions drive efficient use of spectrum
• Spectrum utilization requires massive investments
• TV spectrum is “beach front” property

The full write up from the IEEE announcement:

Communications Society

7:00 PM, Thursday, May 14

The Open Spectrum Potential for Evolutionary and Revolutionary Technology and Business Solutions

Brough Turner; Founder and CTO at Ashtonbrooke and Chief Strategy Officer at Dialogic

In November 2008, the FCC voted unanimously to permit unlicensed wireless devices that operate in the empty "white space" between TV channels. Their “TV White Spaces” decision was the culmination of many years of proceedings, but it's just one step in a much larger discussion, commonly referred to as “Open Spectrum.”

Our use of radio spectrum is regulated under principles that were established in the 1920s, when radio spectrum appeared to be a scarce resource and frequency was the only reasonable basis for allocation. Today’s wireless technology vastly exceeds anything imagined in the 1920s and from physical principles we know that many, many orders of magnitude further improvement are possible. Already the application of new approaches in just a few slivers of spectrum has fostered new industries – WiFi, Bluetooth and more.

The presentation discusses the predecessors, potentiality, and directions for Open Spectrum, including:

• A brief history spectrum regulation from before the Radio Act of 1927 to today.
• Results from measurements of actual spectrum utilization in New York and Washington DC.
• An overview of "Open Spectrum" experiments to date, including “license exempt sharing” in the 900 MHz, 2.4 GHz and 5 GHz bands and different forms of "secondary use" including UWB, 3650 MHz and now TV White Spaces.
• The physics of propagation and its impact on the range of White Spaces services vs. WiFi, WiMAX, 3GSM and LTE.
• IEEE 802.11y protocols and the prospects for expanding secondary use beyond TV White Spaces.

Brough Turner is founder and CTO at Ashtonbrooke and Chief Strategy Officer at Dialogic. Formerly he was founder and CTO at Natural MicroSystems and NMS Communications. He speaks and writes on a variety of communications topics including 3G and 4G wireless tutorials. He presented most recently at the 4G Wireless Evolution conference in February. Brough is an electrical engineering graduate of MIT and has 25 years experience in telecommunications.

Open Spectrum ― I'm presenting at an IEEE meeting this Thursday

This Thursday evening (May 14th), I'll be discussing Open Spectrum at the May meeting of the Boston chapter of the IEEE Communications Society.  My working title:  Open Spectrum ― Physics, Engineering, Commerce and Politics.  This is a technical audience, so we'll touch the physics of electromagnetic propagation and examine radio engineering solutions as they stood in the 1920s, as they are today and where they're likely to take us in the coming decade.  But we'll also look at the politics of spectrum regulation and the commercial implications of recent developments.

Just to get your attention:

• We'll explain why the TV White Spaces (TVWS) won't be considered  "beach front spectrum" in the future, and
• Why the lasting impact of the FCC's recent TVWS decision may be what it does for "secondary access"

If you're in the greater Boston area and at all interested in spectrum policy or the commercial evolution of WiFi and other unlicensed technologies, please stop by. 

The meeting begins at 7 p.m. and the presentation soon after at the Verizon Labs, 117 West Street, Waltham. The meeting is preceded by an optional dinner at Bertucci's, Winter St, Waltham, at 5:30 p.m.  The meeting is open to all, but please let Paul Zorfass know if you plan to attend the dinner at Bertucci’s. Paul can be contacted at paul.zorfass@embeddedtrade.com.  More directions and details here.

Spectrum Transparency: Can the US catch up with France?

Richard Whitt has a good article, Taking stock of the nations airwaves, on the Google Public Policy Blog.  He focuses on the Radio Spectrum Inventory Act, a bill introduced in the US Senate by Senators John Kerry (D-MA) and Olivia Snowe (R-ME).

It's hard to argue spectrum policy if you can't actually determine who has what rights in which parts of the radio spectrum.  This bill is a start.

For a first cut at what we should aspire to, look at this site by the Autorité de Régulation des Communications électroniques et des Postes - the French equivalent of the US FCC.  Try typing in a frequency or a frequency range; then hit "Rechercher."

I haven't figured out how to determine who owns individual licenses to spectrum in France and, of course, that is critical.  The proposed US law, S.649, explicitly calls for such information to be gathered and made available to the public on a website.  Let's hope this passes.

40th anniversary of RFC 1

April 7, 1969 was the day a graduate student at UCLA, Steve Crocker, published RFC 1 to the somewhat informal Network Working Group associated with the ARPA Network project.  I have heard Steve Crocker speaking informally about those days and my understanding is he created what became the "Request for Comments" series because anything more formal would have brought down several layers of governement bureaucracy.

It's interesting that the Internet owes its origins to a government project, but a lot of what happened was done by individuals and groups working around and/or in spite of government processes.

Highlights from eComm 2009

This year's Emerging Communications conference, eComm 2009, was the best telecom conference I've been to in ages (ever?).  Now presentations and videos from the conference are becoming available on the web.  The presentations are on SlideShare; search by speaker name or for the tag "eComm."  Here's my presentation, Structural Bypass - A simple proven path to "Real Broadband."

Brough Turner's Presentation at eComm 2009

View more presentations from eCommConf.

Videos and transcripts are also coming, although not as rapidly as I'd like (a matter of resources - one person editting and releasing 2-4 videos per week).  Here's a transcript of the Spectrum 2.0 panel that I moderated.

Videos will show up on Fora.tv, for example, here is the really cool keynote address by Ge Wang entitled "New Expressive Social Mediums on the iPhone."

For more information and pointers, subscribe to the eComm blog.

David Weinberger is blogging F2C rather completely

And David is a expert blogger!  i.e., really good coverage.
  http://www.hyperorg.com/blogger/

The first Freedom to Connect conference entry is here. 

Latency is the cause; bandwidth is the solution

Actually, what Herman Wagter of Amsterdam's Citynet said at F2C 2009 was:  latency is the cause, bandwidth is the effect.  But his explanation matched my title above.

If you are attempting to interact with other people, whether by VoIP or just playing cards together (with video) you need less than 200 milliseconds of end-to-end delay.  If it's playing cards together, with video, and you need to exchange 500 Kbps in less than 200 ms, you need a 100 Mbps pipe!

It's latency that drives the need for high bandwidth.  Most people won't fill that pipe most of the time, but they need the pipe to guarentee that what they do send gets through rapidly.

Highlights from Day 1 of F2C

Shamelessly ranked by my areas of interest...

Tim Nulty of East Central Vermont Community Fiber.  Tim is a veteran network builder and a forceful speaker, so he's happy to tell it like is.  He's also got that Yankee mix of liberal politics with extreme fiscal conservatism.  He's building fiber networks, in rural Vermont, which pay for themselves.

Ken Biba of Novarum has been measuring actual wireless networks in buildings and in cities for years.  While the detail is in a report available for purchase, the summary is that WiFi-based Muni WiFi yields significantly better performance than 3G cellular.  Interestingly coverage and reliability is right up there in selected cities, as well.  The take-away - 802.11n really rocks. I.e., the next cycle of WiFi is going to be vastly better than what he's been measuring over the past 3 years.

Ellen Miller of Sunlight Foundation was low key by comparison with Tim or Ken, but her stories were compelling - multiple instances of Internet community feedback creating the kind of information that the "open government" initiatives aspire to.

Finally, Dewayne Hendricks is always interesting.  This year he seemed more optimistic than last, presumably the result of the recent election.  In any event, here's another speaker with deep experience in building networks.

I'm off to the Emerging Communications Conference in San Francisco

It's snowing in Boston and my American flight has been cancelled but Virgin America claims their 8:35am flight is going to leave on time.  So here I am in the Virgin gate area.  Wish me luck.

At this point there are a ton of people I'm hoping to hook up with at eComm 2009.  The agenda looks really good.  And, of course I'm looking forward to good discussions around two favorite policy topics: broadband access and wireless spectrum.

My talk on Wednesday is: Structural Bypass: A simple, proven path to “Real Broadband.”

While the US struggles to define "broadband," high speed Internet access (100 Mbps & above) is widely available at modest cost in several countries and quite a few more cities. So far, US political discussion has largely neglected these successes. Brough will point out what's common among diverse international success stories and propose a path for the US that has proven to work elsewhere, despite established monopolies and political processes dominated by vested interests.

On Thursday, I've organized a panel entitled:  Spectrum 2.0 - What's really happening?

WiFi, UltraWideBand and now TV White Spaces represent new commons-based approaches to radio spectrum regulation. While some advocate commons-based approaches for all wireless spectrum, that's hardly acceptable to broadcasters or the mobile phone industry. By questioning a diverse panel of industry experts, we will expose the roots of today's controversy - technical, commercial and political - and see what's likely to occur over the next two to five years and in the long term.

The panelists are top notch:  Richard Bennett, Maura Corbett, Peter Ecclesine, Darrin Mylet and Richard Whitt.

If you're attending, please say hello.