Changes Coming to Smartphones

looking_glassLike many people I often wonder what the next big transformational technology will be. The most recent one was clearly the smartphone. I remember the day in 2007 when Joe, an early-adopter friend of mine got one of the first iPhones. My reaction that day was that it was a device that could make calls like my flip phone plus play a few games. It didn’t seem worth the extra cost at the time. But within a year or two thousands of applications were created and all of a sudden the smartphone became a handheld computer. And now smartphones have the vast majority of the cellphone market and have changed our lives for the better.

Like any new invention there have been some changes made to smartphones, but nothing earthshattering. Screens have gotten bigger, batteries have gotten better and the cameras take a better picture. But today’s iPhone is not a lot different than that first one in 1997. People have stopped getting excited about new releases of phones because it’s the same old thing, just a little better. But there are some more new changes coming to cell phones in the very near future that are worth looking at.

Lock-out Switch. Apple has patented a lockout switch that would disable texting capabilities for someone driving a vehicle. This is a badly needed change and today when you see somebody driving erratically you no longer think they might be drinking, but texting. I see this every day and the world will be a lot safer if this is deployed.

The technology works by detecting if the phone is being used by a driver and not a passenger of the vehicle. Apple would create zones within a vehicle in order to distinguish drivers from passengers. There are already apps that parents can deploy that will disable texting when a car is moving, but making it automatic and built into the chip set is the only foolproof way to stop texting and driving. It’s already illegal in almost every state, but it’s incredibly hard to police.

Mobile Payments. The US lags behind Europe and Asia in the ability to use cellphones to make mobile payments. In Japan you have been able to walk up to a vending machine and pay with a cellphone for well over a decade. The major reason for the hold-up here is that the major cell phone carriers, AT&T and Verizon have been blocking mobile wallets because they felt that they needed enhancements to the SIM cards to securely store payment data.

But at the end of last year there were a few breakthroughs. Selected android phones now support Isis, a mobile wallet solution. Sprint now supports Google Wallet. Starbucks has launched an in-store only application. Apple says that their next generation iPhone will come with Apple’s iWallet.

Until now the banks, with ATM cards and the credit card companies have had a virtual monopoly on taking payments. But the cost of entry into taking mobile payments is low and doesn’t even require a tie-in to a credit card. You can expect large stores like Walmart and Costco to launch their own payment applications. With the mobile application genie now out of the bottle we can expect payments using smartphones to be routine within a few years.

New Phones. There are several big changes coming to phones. One of the coolest ones is flexible phones and Samsung says they will be introducing a flexible smartphone in 2015. Picture a phone that will easily bend in your pocket to match your movements. This technology is enabled using organic LEDs. These phones can be bent and twisted without losing electronic integrity. The biggest promise with flexible phones is that we won’t be always frightened to death of the expense mistake of dropping and breaking our smartphone. Flexible phones promise to be lighter and tougher than the current square boxes.

Then there are transparent phones. Polyton from Taiwan demonstrated a prototype of a completely transparent cell phone. It’s made from OLEDs using switchable glass technology that uses liquid crystal molecules to form the display. When not in use the phone is transparent, but the crystals align to create images and text when in use.

These two technologies together can bring about a future generations of phones that will be different than today’s phones. I find it somewhat humorous that in the big patents battle between Apple and Samsung that one of the claims that Apple made was that Samsung stole the shape of their phone. I mean what else are you going to shape it like other than a rectangle? But in the future that might be the one thing that phones are not shaped like, assuming we can see them at all.

The Story of the Numbers

I ran across some interesting statistics from the Leichtman Research Group. They track a lot of basic industry statistics and the ones I found most interesting are summaries showing the number of cable and data customers at all of the largest carriers in the industry. Consider the following table that I have created from their statistics:

Data Customers 2013 2012 2011
Comcast 20,662,000 19,366,000 18,143,000
Time Warner 11,606,000 11,395,000 10,909,000
Charter 4,640,000 4,269,000 3,946,000
Cablevision 2,740,000 2,723,000 2,633,000
Suddenlink 1,059,500 1,002,100 948,700
MediaCom 965,000 915,000 851,000
Cable One 472,631 459,235 451,082
Major Cable 42,145,131 40,129,335 37,881,782
AT&T 16,425,000 16,390,000 16,427,000
Verizon 9,015,000 8,795,000 8,670,000
CenturyLink 5,991,000 5,851,000 5,659,000
Frontier 1,836,000 1,724,000 1,702,000
Windstream 1,170,900 1,214,500 1,207,800
FairPoint 329,766 324,977 312,745
Cincinatti Bell 268,400 259,400 257,300
Major Telco 35,036,066 34,558,877 34,235,845
Major Carriers 77,181,197 74,688,212 72,117,627
Cable Customers 2013 2012 2011
Comcast 21,690,000 21,995,000 22,331,000
Time Warner 11,393,000 12,218,000 12,743,000
Charter 4,342,000 4,158,000 4,314,000
Cablevision 2,813,000 3,197,000 3,250,000
Suddenlink 1,177,400 1,211,200 1,249,000
Mediaom 945,000 1,000,000 1,069,000
Cable One 538,894 593,615 621,423
Major Cable 42,899,294 44,372,815 45,577,423
DirecTV 20,253,000 20,084,000 19,885,000
Dish 14,057,000 14,056,000 13,967,000
DBS 34,310,000 34,140,000 33,852,000
AT&T 5,460,000 4,536,000 3,983,000
Verizon 5,262,000 4,726,000 3,981,000
Major Telco 10,722,000 9,262,000 7,964,000
Major Carriers 87,931,294 87,775,815 87,394,423

This table only looks at the major carriers, but in this country that is almost everybody. For example, missing from the table of cable customers are all of the other providers, who altogether only have 7% of the total cable market.

There are some interesting things to notice about these statistics:

  • The number of high-speed data customers continues to grow and the major providers added 2.5 million more customers in both 2012 and 2013.
  • The major cable companies either have or soon will have more data customers than cable customers. This explains why they now view themselves as ISPs who happen to sell cable.
  • The cable companies lost 2.7 million cable customers from 2011 to 2013. This may have more to do with service and competition than anything else since AT&T and Verizon picked up 2.7 million cable customers during that same time period.
  • The Comcast / Time Warner proposed merger is gigantic since those two firms are two of the top three data providers today and two of the top four cable providers.
  • As much effort as the satellite companies expend in advertising they are barely growing. Dish Networks, for example added a net 1,000 customers in 2013.
  • A few companies are really bleeding cable customers and Cablevision and Cable One both lost 14% of their cable subscribers over a two year period. Even Time Warner lost 11%.
  • As well as AT&T and Verizon have done in cable, together they have only grown to be 12% of the cable market.
  • The fastest growing ISPs over the two-year period are Charter (17%), Comcast (13%) and MediaCom (13%).

Training for a Telecom Career

800px-OSU_Bucket_TruckI was talking to one of my nephews and he said he is getting an IT degree so that he can move ahead in his career. He currently is a repairman for Frontier, the mid-sized teleco. That certainly gives him a lot of hands-on experience in telco. But there are drawbacks in working for an under-capitalized company who is still trying to find ways to modernize its DSL. I would have to agree with him that his experience in keeping old copper working is not going to make for a lifetime career. When I look at how hard Verizon and AT&T are working to get out of the copper business one can imagine that it will be obsolete within a few decades.

So my first question is to ask him what he wants to do with the degree, and his answer to me is networking. Whew. Because in my opinion nobody should be spending energy on specializing in servers these days. With the explosive growth in cloud computing that whole business line is going to be mostly be reduced within a few years to giant server farms run by Google and Amazon.

I remember when my own company had an IT guy who ran our server and internal network. At forty employees we thought we needed this because storing our files and keeping PCs working seemed like a lot of work. And servers were more art and science in those days and I don’t think any of us really understood what he was doing half the time. I am not sorry to see those days go. There are many tools today that make IT easy for small companies and our need for an IT guy died a decade ago.

But there are still technicians out getting Cisco certified and I shake my head at the world that would take their money to do so. One doesn’t have to look around very much to see that we are headed for a world that is taking the brains away from the edge of the network. Every part of the industry is working on technologies that will collapse all of the brains to huge centralized hubs. There is not a need for more than a few gigantic cable TV headends in the country. The cellular companies plan on migrating all of the brains from cell sites back to data centers within the next decade. Centralization and efficiency is the new mantra of the carrier world and this doesn’t bode well for companies or technicians who sell and work on the edge of the network.

In these cases bigger really is better, and centralized hubs will win because of the huge savings in hardware, software and labor. It is incredibly expensive for AT&T to upgrade all of their thousands of cell sites and it takes six months and an army of technicians. But make those sites into dumb transmitters and put all if the smarts in a data center and AT&T could effectuate a nationwide upgrade nationwide on the fly.

I saw an article yesterday that talks about the fact that Google doesn’t require a college degree to get hired there. In fact, the word college isn’t even listed in their hiring guide. They instead look at what people know and what they can do. They value expertise and the ability to think over a college degree. This doesn’t mean that they don’t hire people with degrees; it just means that they don’t believe that a degree demonstrates any particular expertise that can’t be gotten from real life experience.

So where is the best place to start in telecom today? If I was starting at the bottom I would look for a job as a trouble-shooter on FTTH networks. That experience is going to teach you a lot about networking and also a fair amount about the triple play products and integration. And it will teach you to work well with customers and other technicians. With the explosion of fiber networks these jobs must be one of the fastest growing segments of the industry, so a person starting their career ought to be able to find such a job if they are mobile and ready to move where the work is. If I didn’t want to be a technician I would look to work at one of the engineering companies that design fiber networks. The typical engineering firm works on enough different projects to give you a taste of everything. Engineers are forced to keep up with the cutting edge while a fiber provider like Verizon gets very locked into their specific version of the technology.

Do People Need Gigabit Fiber?

WDM_FOA few weeks ago I talked to a guy who has gigabit fiber at his home. There aren’t many people who have this service today, but with all of the announcements being made by Google, AT&T and others there are going to be a lot more of them over the next few years. My discussion with him has made me think about whether people really need gigabit fiber.

The guy I was talking to is one of the technical people working for CSpire, the group that is bringing gigabit fiber to Mississippi. I quizzed this guy about his gigabit experience. He admitted that his PC wasn’t really capable of a gigabit throughput and he is thinking of finding one that is. But he was getting a good fraction of a gigabit in his home. He said that this clearly put the Internet at his fingertip. Anytime he went to search for anything on the web it was there instantaneously. He was particularly impressed when he would do an image search on Google and see thousands of images appear immediately.

In contrast to him I have a 50 Mbps connection from Comcast and I must say that I rarely feel like I am waiting. There are a few times when I download a very large program or video where I have to sit and wait a bit, but my computer lets those sorts of things happen in the background while I do something else and I don’t have to sit and stare at the screen while I download something.

My experience tells me that there are very few people for whom a gigabit is needed today. Maybe some scientist who works at home while connected to a supercomputer might need it, but the average person does not. But I never heard Google tell people that they need a gigabit today. They have always said that they are building a network for the future. And this got me to thinking.

Certainly there are no applications today that need that kind of speed. But we have lived through many upgrades in network speeds and what I’ve always seen is that when people are given more bandwidth that they always find ways to use it. I think back and remember when I had 8 kbps dial-up and thought that the upgrade to 56 kbps was awesome. I remember getting my first DSL which was probably something like 512 kbps and thinking that was the end all and be all. I felt the same way when I moved up to 3 Mbps, then 10 Mbps and recently to 50 Mbps.

And everywhere along the line, I first thought the new higher speed were great, and then within a few years they started to feel slow, because the web has always kept pace with the speeds that people can use. Web pages added video, got more graphics and freely included links to huge pdf files. And now everything is moving to the cloud. My PC is backed up all of the time. All my emails are in the cloud. And as we start migrating into the Internet of Things we are going to be sending a lot more data into the cloud.

Up until now my incremental improvements in speed have been between 3 and 8 times faster than what I had before. A gigabit is 20 times faster than what I have today, and I already have more speed than the vast majority of people. So it’s going to take longer for the web and the world to catch up to a change that is 20 to 100 times faster than what people have today. It might take a decade or even two for the average home to grow into routinely needing gigabit speeds. But we will do it, just like we have grown into all of the other speeds that we have ever been given.

So what concerns me is not gigabit speeds. I’m more bothered that networks are being built that aren’t capable of being upgraded to a gigabit. For example, there was a lot of money spent from the federal stimulus grants on wireless networks that can provide 30 Mbps speeds at best. While that is a fine speed today, those networks are not upgradable to faster speeds. Five years from now those networks are going to feel slow, and the small companies that built then are not going to have the money to keep them running. While many cities are going to have gigabit speeds by then, there will be many rural areas with much slower speeds and with networks that are crumbling, dying or growing obsolete.

After giving this some thought I conclude that we will find ways to use gigabit speeds and that there will be a lot of homes with that speed over the next decade. What we should not be doing is investing in networks that are not capable of gigabit speeds. Federal, state or other grants should not be used to build wireless networks that will feel very slow in less than a decade. Because once a rural area gets a wireless network, nobody else is going to invest more there. It’s a real dilemma for a rural area that has terrible broadband to choose between wireless and fiber. But I know when we look back in a decade that every place that picked something other than fiber is going to be kicking themselves in the rear.

Chipping Away at the Cable Industry

Digital-tv-antenna-620x400It seems that every day I read a story about some big company who is working very hard to break the cable monopoly and to bring alternate programming packages to the market. Aereo is at the Supreme Court this week for trying just that – for bringing a small package of network channels to cell phones and tablets in major metropolitan areas.

Yesterday I read that Dish Networks expects to have a new service out by late this summer that is going to further chip away at the cable industry. They plan to offer a smaller package of programs over the web that are aimed at Millennials that will let them watch TV on smartphones and tablets for $20 – $30 per month. But I think a package like that is going to be appealing to a lot of households and is going to lead to a lot more cord cutters.

Dish has already signed up Disney, which brings them Disney, ESPN and ABC. They have reportedly been in negotiations with A&E, Turner, Comcast (which includes NBC) and CBS. The largest content providers have reportedly placed some contractual conditions on Dish getting such a package. They must include at least two of the major networks of ABC, CBS, FOX and NBC. They also must include at least ten of the highest-rated other networks in the package.

This concept is not new for Dish and they already sell packages on the web in fifteen different languages that they market under the name of DishWorld. This includes packages at $14.95 per month in Arabic, Hindi, Cantonese, Urdu, Filipino, Punjabi and many other languages and is a great way for emigrants to see programming from their home countries.

In another announcement that came out today, HBO, a division of Time Warner agreed to sell its library of original content to AmazonPrime. This is the first time that HBO or any cable network has made such a deal. This content has been made available on the web to people who subscribe to HBO at a major cable company like Comcast or Verizon. But the content has never been available to people who did not subscribe to HBO.

No one of these deals is going to break the cable industry. However, these two particular deals will chip away at the subscribers who buy traditional cable packages. These are deals that will let people get content on the web in a way they could not get it before. I think it is these sorts of deals that will chip away at the cable industry, and the industry won’t die in a big bang but will die from a thousand cuts.

Dish will lure away a pile of cord-cutters with this package. Verizon Wireless will lure away another pile. Google, or somebody non-traditional will get the rights to the NFL Sunday package and will lure away a pile. Somebody will make a deal with ESPN and the other key sports networks and take a pretty big pile. The Dish deal is the first major OTT deal but it will not be the last. As the programmers find a way to monetize their content over the web we are going to see more and more people dropping the giant packages. Virtually nobody is happy about paying for content they never watch.

Interestingly, not everybody sees the world in this same way. Here is one guy who sees a rebound for the traditional cable providers. He sees an increase in both customers and penetrations through 2019 for the cable industry. Nothing is impossible and we don’t have to wait long to see if he is right, but just about everybody else predicts that the large cable companies are going to keep losing customers and that the rate of loss will accelerate. Every little side deal made with Dish Networks or Verizon Wireless or Google is going to drag another pile of customers away from the big dollar, big-channel packages.

And at some point, the big line-up model starts breaking when programmers start getting less revenues for the less popular channels that are not being included in the new Internet-only alternatives. ESPN and Disney and the other popular networks are going to do just fine since they will probably be viewed by more people than ever. But the other 80% of networks have to be very worried about the trend towards OTT.

Why We Need Network Neutrality

Network_neutrality_poster_symbolWhile the FCC has been making noise about finding a way to beef up net neutrality, the fact is that the courts have gutted it and ISPs are more or less free today to do whatever they want. In March, Barbara van Schewick, a Stanford professor had several ex parte meetings with the FCC and left behind a great memo describing the current dilemma with trying to rein in network neutrality violations.

In this memo she describes some examples of bad behavior by US and British ISPs. While she highlights some well-known cases of overt discrimination by ISPs, she believes the fact that the FCC has actively intervened over the last decade in such cases has held the ISPs at bay. But now, unless the FCC can find some way to put the genie back into the bottle there are likely to be many more examples of ISPs discriminating against some portions of web traffic.

Certainly ISPs have gotten a lot bolder lately. Comcast essentially held Level3 and Netflix hostage by degrading their product to point of barely working in order to extract payments out of them. And one can now imagine AT&T and Verizon doing the same thing to Netflix and all of the ISPs then turning to other big content providers like Amazon and Facebook and demanding the same kind of payments. It seems that we have now entered a period where it’s a pay-for-play network since the FCC did nothing about the issue.

The US is not the only place in the world that has this issue. We don’t have to look at the more extreme places like China to see how this might work here. Net neutrality violations are pretty common in Europe today. A report in 2012 estimated that one on five users there was affected by ISP blocking. The things that have been blocked in Europe are across the board and include not only streaming services, but voice services like Skype, peer-to-peer networks, Amazon cloud services, gaming, alternate email services and instant messaging.

If we don’t find a way to get net neutrality under control the Internet is going to become like the wild-west. ISPs will slow down large bandwidth users that won’t pay them. They will block anybody who is doing too good of a job of competing against them. The public will be the ones who suffer from this, but a lot of the time they won’t even know it’s being done to them.

I don’t know anybody who thinks the FCC has the courage to take the bold steps needed to fix this. The new Chairman talks all the right talk, but there has been zero action against Comcast for what they did to Netflix. I imagine that the ISPs are still taking it a little easy because they don’t want to force the FCC to act. But the FCC’s threats of coming down on violators are going to sound hollow as each day passes and nothing happens.

Professor van Schewick points out that absent strong rules from the FCC that there is no other way to police network neutrality. Some have argued that antitrust laws can be used against violators. But in the memo she demonstrates that this is not the case and that antitrust law is virtually worthless as a tool to curb ISP abuses.

It’s not just the big ISPs we have to worry about. There are a lot of smaller ISPs in the country in the form of telcos, cable companies, municipalities and WISPs. It’s not hard to picture some of the more zealous of these companies blocking things for political or religious reasons. One might assume that the market would act to stop such behavior, but in rural America there are a whole lot of people who only have one choice of ISP.

I hope that things don’t get as bad as I fear they might and that mostly common sense will rule. But as ISPs violate the no-longer functional net neutrality rules and nothing happens they are going to get bolder and bolder over time.

Statistics on How We Watch Video

Old TVExperian Marketing has published the results of yet another detailed marketing survey that looks at how adults watch video. This is perhaps the largest survey I’ve seen and they talked to over 24,000 adults about their viewing habits. This one has a bit of a different twist in that it correlates TV viewing with the use of various devices. The conclusion of the survey is that people who use certain devices are much more likely to be cord cutters.

Probably the most compelling statistic from the survey is their estimate that as of October 2013 the number of cord cutters has grown to 7.5 million households, or 6.5% of all households. This is several million higher than previously published estimates. This survey shows that age is an important factor in cord cutting and that 12.4% of households that have at least one family member who is a millennial between the ages of 18 and 34 are cord cutters. And something that makes sense is that over 18% of those with a NetFlix or Hulu account have become cord cutters.

The survey also shows that the number of people who watch streaming video continues to grow and that 48% of all adults and 67% of those under age 35 watch streaming or downloaded video from the Internet each week. And this is growing rapidly and both of those numbers increased by 3 percentage points just over the prior six months.

The main purpose of this survey was to look at viewing habits by type of device. One of the surprising findings to me is that smartphones are now the primary device used to watch streaming video. I guessed it surprised me because this is not one of the ways we watch video in our household other than videos that pop up from Facebook. But during a typical week 24% of all adults or 42% of smartphone users watch video.

The television set is still the obvious device of choice for viewing content and 94% of adults watch something on their television each week. Only 84% of adults now use the television to watch live programming and the rest are watching in some different manner. For instance 40% of television watchers still view content from DVDs, 32% get content from a DVR, 13% watch pay-per-view and 9% watch streaming video. As of February 2014, 34% of television sets are now connected to the Internet. Of those 41% use AppleTV, 35% use Roku and the rest have Internet-enabled TVs.

Adults are watching content on a lot of different devices now. Something that might be surprising to bosses around the country is that 16% of adults with a PC at work use it to watch streaming video. One fourth of adults who own game consoles watch streaming video, 26% of adults who own a home PC use it for videos, and 42% of adults who have either a smartphone or tablet use them to watch video.

The survey also looked at what people watch and the time spent with specific programming on each kind of device. For example, YouTube is the source for 59% of the video watched on PCs and the average adult spends over 21 minutes per week watching it. Only 7% of content viewed on PCs is NetFlix, but the average time spent is over 23 minutes per week. And over 10 minutes per week is spent on PCs watching Hulu, Bing Videos and Fox News.

The survey also asked how adults feel about advertising that comes with the video on each kind of device. Not surprising to me, only 9% of those over 50 found the advertising on their smartphone to be useful and 14% found advertising on the TV to be useful. But younger viewers are not quite as jaded as us baby boomers and 36% of millennials find advertising on their smartphone to be useful and 39% find TVs advertising to be useful.

AT&T’s Vision of the Future PSTN

AmericanBellTelephone_Boston_Bacon1892AT&T recently met with the FCC staff and issued a memo after the meeting outlining their vision for the future PSTN (public switched telephone network). It’s routine for any ex parte meetings with the FCC to be documented in this kind of memo so that everybody knows what was discussed. There is nothing shocking in what AT&T said, because they have been saying the same things for several years. But I’d like to discuss AT&T’s vision and talk about what such changes mean to the current carrier world.

The memo outlines what the AT&T wants the national telephone network to look like after a transition from today’s TDM-based telephone network to an all-IP network. Here are a few things that AT&T sees in the IP telephone world:
• There will only be a few nationwide points of interconnection. This memo doesn’t say how many, but it probably means just at the major Internet hubs that exist today like Dallas, Chicago, Los Angeles, New York City, Washington DC, etc.
• They don’t think there should be any more distinction between long distance and local calls. Basically, in their new world a minute is a minute.
• Each carrier would be responsible for getting their traffic to and from these few points of interconnection.
• They see the interconnection process handled largely by what they call ‘indirect interconnection’, meaning that smaller carriers will contract with larger carriers to connect to others.
• They liken their vision of the future network to today’s peering and transit arrangements.

So what does this all mean to smaller carriers? I’m afraid this is very much in AT&T’s favor and bad for everyone else:
• Today a CLEC can meet a carrier at any technically feasible location, and then each side is responsible for the cost of their own network. AT&T’s proposal would put 100% of the cost of network and the transport needed to meet AT&T on LECs and CLECs.
• By getting rid of the distinction between toll and local minutes this proposal changes the way that smaller telephone companies get compensated. This would eliminate cost separations for the ILECs. It would eliminate NECA. It would remove long distance as a source for funding the Universal Service Fund. It would essentially remove the FCC from telephone regulation.
• When they say they want the world to look like today’s transit arrangements, AT&T is making a huge money grab. Today local traffic is exchanged for free, or virtually free between carriers. In a transit world (with AT&T presumably being the transit provider) AT&T would charge every carrier for every minute they pass to another carrier. What AT&T likes about transit charges is that they are not regulated in the same manner as access charges, and AT&T will get to set that transit rate.
• This would also make it hard for telcos to continue to give free local calling. Where local calls are swapped for free today, in a world when a carrier has to pay to send and receive each call it’s hard to see that cost not being passed on to customers.
• Also, getting rid of the distinction between local and long distance traffic is AT&T’s way of asking for the end of all access charges. The FCC has already begun a multi-year transition to get rid of terminating access charges at the end-office level. But AT&T envisions the end of both originating access and of transport and tandem access charges. This would destroy some smaller local telcos who rely on those revenues. Getting rid of transport charges is particularly egregious since those costs compensate somebody for building rural fiber. Who will ever build new long-haul rural fiber if they can’t get reimbursed for it?
• These changes would also undo all of the changes made by Judge Greene when he divested Ma Bell in 1984. It gets rid of LATAs and everything associated with that change and basically puts AT&T back where they were before divestiture. Only richer.

One has to admit that AT&T’s version of the future world might well be the most efficient way to do this. But it also very conveniently shifts all costs away from them and gives them a huge windfall in transit charges. This is a massive power play from AT&T that is disguised as an engineering discussion about efficiency.

One would hope that the FCC can see through this because AT&T’s proposal undoes both the divestiture changes from 1984 and the Telecom Act of 1996. And in doing so it makes it far more expensive for any telco other than AT&T to do business by both adding costs and eliminating revenues.

Scratching My Head Over Gigabit Wireless

Wi-FiOver the last few weeks I have seen numerous announcements of companies that plan to deliver gigabit wireless speeds using unlicensed spectrum. For example, RST announced plans to deliver gigabit wireless all over the state of North Carolina. Vivant announced plans to do the same in Utah. And I just scratch my head at these claims.

These networks plan to use the 5 GHz portion of the unlicensed spectrum that we have all come to collectively call WiFi. And these firms will be using equipment that meets the new WiFi standard of 802.11ac. That technology has the very unfortunate common name of gigabit WiFi, surely coined by some marketing guru. I say unfortunate, because in real life it isn’t going to deliver speeds anywhere near to a gigabit. There are two ways to deploy this technology to multiple customers, either through hotspots like they have at Starbucks or on a point-to-multipoint basis. Let’s look at the actual performance of 802.11ac in these two cases.

There is no doubt that an 802.11ac WiFi hotspot is going to perform better than the current hotspots that use 802.11n. But how much better in reality? A number of manufacturers have tested the new technology in a busy environment, and with multiple users the new 80211.ac looks to be between 50% and 100% better than the older 802.11n standard. That is impressive, but that is nowhere near to gigabit speeds.

But let’s look deeper at the technology. One of the biggest improvements in the technology is that the transmitters can bond multiple WiFi channels to make one data path up to one 160 MHz channel. The downside to this is that there are only five channels in the 5 GHz range and so only a tiny handful of devices can use that much spectrum at the same time. When there are multiple users the channel size automatically steps down until it ends up at the same 40 MHz channels as 802.11n.

The most important characteristic of 5 GHz in this application is how fast the spectrum dies with distance. In a recent test with a Galaxy S4 smartphone, the phone could get 238 Mbps at 15 feet, 193 Mbps at 75 feet, 154 Mbps at 150 feet and very little at 300 feet. This makes the spectrum ideal for inside applications, but an outdoor hotspot isn’t going to carry very far.

So why do they call this gigabit WiFi if the speeds above are all that you can get? The answer is that the hotspot technology can include something called beamforming and can combine multiple data paths to a device (assuming that the device has multiple receiving antennas). In theory one 160 MHz channel can deliver 433 Mbps. However, in the real world there are overheads in the data path and about the fastest speed that has been achieved in a lab is about 310 Mbps. Combine three of those (the most that can be combine), and a device that is right next to the hotspot could get 900 Mbps. But again, the speeds listed above for the Galaxy S4 test are more representative of the speeds that can be obtained in a relatively empty environment. Put a bunch of users in the rooms and the speeds drop from there.

But when companies talk about delivering rural wireless they are not talking about hotspots, but about point-to-multipoint networks. How does this spectrum do on those networks? When designing a point-to-point network the engineer has two choices. They can open up the spectrum to deliver the most bandwidth possible. But if you do that, then the point-to-multipoint network won’t do any better than the hotspot. Or, through techniques known as wave shaping, they can design the whole system to maximize the bandwidth at the furthest point in the network. In the case of 5 GHz, about the best that can be achieved is to deliver just under 40 Mbps to 3 miles. You can get a larger throughput if you shorten that to one or two miles, but anybody who builds a tower wants to go as far as they can reach, and so 3 miles is the likely networks that will be built.

However, once you engineer for the furthest point, that is then the same amount of bandwidth that can be delivered anywhere, even right next to the transmitter. Further, that 40 Mbps is total bandwidth and that has to be divided into an upload and download path. This makes a product like 35 Mbps download and 5 Mbps upload a possibility for rural areas.

If this is brought to an area that has no broadband it is a pretty awesome product. But this is nowhere near the bandwidth that can be delivered with fiber, or even with cable modems. It’s a nice rural solution, but one that is going to feel really tiny five years from now when homes are looking for 100 Mbps speeds at a minimum.

So it’s unfortunate that these companies are touting gigabit wireless. This technology only has this name because it’s theoretically possible in a lab environment to get that much output to one device. But it creates a really terrible public expectation to talk about selling gigabit wireless and then delivering 35 Mbps, or 1/28th of a gigabit.

People are Part of the Equation

RobotSurvey results from the Pew Research Group were announced today that summarize their findings about how Americans feel about our scientific future. The survey asked questions in several areas such as how people feel about technology changes and which changes people believe will be coming.

Anyone who follows my blog knows that I am a bit of a futurist in that I think technology is going to be a very positive force in human life during the rest of this century. There are amazing technologies under development that will transform our lives. Technological upgrades are so common any more that I don’t know that the average citizen stops and thinks about how technology has already changed our lives. I saw guys watching NCAA basketball games on their cellphones a few week ago and I’m sure they didn’t appreciate how many kinds of technology had to come together to make that happen and also how many billions of dollars of investments had to be made in cellular networks. In my experience, Americans have already been trained to take new technology for granted.

Which made me a little surprised by some of the responses in the survey. For example, only 59% of the people surveyed thought that the technology changes we are going to see over the next decades will make life better. A surprising 30% felt they would make people worse off than they are today. I find this interesting in that far more than 59% of us now own and use a smartphone which is one of the more recent manifestations of new technology, and yet many people still fundamentally fear new technology

And this is why I say you can never take the human equation out of planning. There are going to be technological breakthroughs that the public will reject, no matter how good they are for the majority of mankind. Let’s look at a few of the technologies that people are most skeptical about:

  • 66% of respondents say it would be a change for the worse if parents were able to manipulate the genes of their children to make them smarter, healthier or more athletic.
  • 65% think it is a bad idea to have robots become the primary caregiver for the elderly or people in poor health.
  • 63% think it is a bad idea to allow personal and commercial drones into US airspace.
  • 53% think it’s a bad idea if people wear implants that let shows them information on the world around them.

The survey also asked if people would be willing to try some new inventions that are now on the horizon.

  • 50% of people say they are not interested in trying a driverless car.
  • Only 20% of people are willing to try meat grown in a lab.
  • 26% of Americans say they would get a brain implant if it would improve their memory or mental capacity.

The survey also asked what future invention people would most like to own. Over 31% of young people were interested in a wide variety of ways to make transportation easier such as a flying car, a self-driving car or a personal spacecraft. But middle-aged people were more pragmatic and a number of them wanted a robot that could help with housework. There were a few questions on the survey that everybody agreed with. For example, over 80% believe that within a few years that doctors will be able to grow organs for people who needs organ transplants.

This kind of survey tells us a lot more about people’s hopes and fears than it does about the various technologies. People are very distrustful of many new technologies and it has always been that way. Generally there are some early adopters that try the newest stuff and take some of the mystery out of it for everybody else. Not every new technology becomes popular, but the kinds of major technologies covered by this survey are likely to become widespread once they become affordable. But the survey reminds us that we can’t assume that any technology will be automatically accepted because people are part of that equation.