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The Industry

Are There any Cable Companies Left?

Are there any companies left that we can still call cable companies? Everything in the business press still refers to Comcast and Charter as cable companies and AT&T and Verizon as telephone companies. It’s getting harder to justify using these traditional labels and maybe the time is finally here to just start calling them all ISPs.

After all, these four companies collectively have 80 million broadband customers, meaning these four ISPs now have around 73% of all broadband customers in the country. They also have about 73% of all traditional cable customers, at 58 million, but that number has been tumbling and is down from 64 million just a year ago. It was only a few years ago where the broadband and cable TV markets crossed and broadband became the predominant product for these companies – but since then, the gap is growing quickly between the two product lines.

FierceVideo published an article in September that interviewed the CEOs of Comcast, Charter, and AT&T that asked each their views on the future of cable TV. Their responses are not surprising in an industry where traditional cable subscribers are shrinking quickly.

Brian Roberts of Comcast said he is “indifferent” for having customers on traditional cable TV or in Comcast’s Flex product that is free and ad-supported. And that doesn’t even count in the 14 million people who are now watching Comcast’s online Peacock service. Comcast sees all video products as important in making Comcast’s broadband customers stickier. AT&T’s John Stankey said something similar. He says he values the traditional cable TV product, but that the company is betting on the online offerings like AT&T TV and HBO Max.  Charter is the only large company still on the traditional track, and the company added cable customers in the second quarter of this year. But Charter CEO Tom Rutledge foresees growth coming to an end since the company feels obligated to pass video content rate increases on to cable customers.

Both Comcast and Charter have made up some of the loss in cable customers by launching a successful cellular product. At the end of the third quarter this year, Comcast had 2.6 million cellular customers and Charter had grown to 2 million. Both companies will be working to increase the profit margins of the cellular product by shifting traffic from resold cellular to company-owned small cell sites. Both companies have a built-in advantage in that they already own fiber deep into neighborhoods, so both should be able to deploy cellular small cells without having to lease transport. I find it interesting that these two traditional cable companies seem to be doing a better job of bunding in cellular service than was ever done by AT&T and Verizon – those two companies never seemed to find a way to do that.

In my writing about the industry, I have lately been referring to these big companies as ISPs or incumbents because the terms cable company and telephone company seems to have lost relevance. It’s becoming hard to distinguish between Comcast and AT&T in markets where AT&T is competing against Comcast using gigabit fiber.

I’m at a loss to explain why the industry continues to call Comcast a cable company. The percentage of revenue that comes from cable TV is dropping quickly, and the share of margin from cable is dropping even faster. The amount of money that AT&T makes from traditional telephone service is so small that it’s a challenge to even find the word telephone in the company’s financial report. But I guess old habits are hard to break. We instantly know who is being referred to when somebody says “large cable companies” or “large telcos”. But I’m still looking forward to a time when these monikers are so rare that we’ll have to explain what they mean to children.

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The Industry

Broadband Growth Continues During the Pandemic

Leichtman Research Group recently released the broadband customer statistics for the end of the third quarter of 2020 for the largest cable and telephone companies. Leichtman compiles most of these numbers from the statistics provided to stockholders other than for Cox, which is estimated. Leichtman says this group of companies represents 96% of all US landline broadband customers.

The second quarter shows big growth in broadband customers with over one and a half million new broadband subscribers customers added by the big ISPs. The following are the statistics for the first and second quarters of 2020.

9/30/20 3Q Change % Change 2Q 20 Adds
Comcast 30,062,000 633,000 2.2% 323,000
Charter 28,633,000 537,000 1.9% 850.000
AT&T 15,375,000 174,000 1.1% (114,000)
Verizon 7,069,000 110,000 1.6% (23,000)
Cox 5,330,000 50,000 0.9% 50,000
CenturyLink 4,563,000 (75,000) -1.6% (29,000)
Altice 4,363,500 26,000 0.6% 70,400
Frontier 3,119,000 (23,000) -0.7% (41,000)
Mediacom 1,425,000 29,000 2.1% 47,000
Windstream 1,102,300 12,900 1.2% 22,100
Cable ONE 865,000 27,000 3.2% 45,000
WOW! 808,900 3,300 0.4% 8,000
Consolidated 792,211 1,008 0.1% 5,078
TDS 487,700 8,200 1.7% 19,500
Atlantic Broadband 492,212 13,523 2.8% 6,000
Cincinnati Bell 434,500 2,500 0.6% 4,500
104,922,323 1,529,431 1.5% 1,243,578
Total Cable 71,979,612 1,318,823 1.9% 1,399,400
Total Telco 32,942,711 210,608 0.6% (115,822)

Going purely by the numbers, the cable companies collectively added 1.3 million customers in the third quarter  – 80,000 less than the second quarter. The telcos made a huge turnaround and adding 210,000 customers in the quarter after having lost 116,000 customers just a quarter earlier.

There are still a few factors that probably make 2020 subscriber numbers a little soft. For example, most of the big ISPs are still not disconnecting customers for non-payment. At some future date that back billing is going to come due, and one might expect that due to widespread unemployment that there will be a significant downside adjustment. Some of the ISPs have also been providing free or low-cost broadband to students working from home – something that will also eventually end. One piece of evidence that subscriber numbers are soft is that the third quarter also saw 1,500,000 homes disconnect traditional cable TV, largely to save money.

Probably the most important thing demonstrated by the growth numbers is the huge and growing demand for broadband during the pandemic – even if the numbers are masking homes that might not be able to afford broadband post-pandemic. We continue to find evidence that broadband has become a necessity for homes.

There is another industry trend that is not reflected in these numbers. OpenVault reported recently that at the end of the third quarter that 5.6% of homes were now subscribed to a gigabit broadband product. That means that just in the third quarter that 875,000 homes upgraded to gigabit. Similar upgrading can be seen for subscribers to bandwidth tiers between 200 Mbps and gigabit speeds. People are clearly finding existing broadband products to be inadequate and are upgrading to faster products.

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The Industry

Continued Bans Against Municipal Competition

There are still states around that don’t let municipalities participate in finding broadband solutions. In a world where it’s now clear that broadband is vital to homes, it’s hard to understand how such bans make any sense. I’m going to write today about my state of North Carolina as an example of how continued bans are harming the citizens of the state.

This is a state where the telecom lobby has been historically generous with state lawmakers and has been able to pass desired legislation for decades. The municipal ban in North Carolina was passed a decade ago when lawmakers reacted to a citywide fiber network constructed by the City of Wilson. The big ISPs at the time – Time Warner Cable (now part of Charter), AT&T, and CenturyLink argued that municipal competition was unfair and that the private sector should be allowed to take care of the broadband needs of communities.

The pandemic has highlighted the fallacy of the big ISP argument. In the ten years since the law passed, the state has seen some improvements in broadband. When Google Fiber popped up in the Research Triangle, both AT&T and Time Warner reacted quickly and a few lucky households can buy gigabit broadband today from three providers. There are a few telephone cooperatives in the state that have built fiber in rural areas, including one that is extending into some neighboring counties. A few WISPs have built wireless broadband to pockets of rural customers. Charter upgraded a few years ago to DOCSIS 3.1 and cable broadband in the cities is decent – although upload speeds now look to be inadequate to handle the pandemic.

But the households that had no broadband, or poor broadband a decade ago when the municipal ban was passed still had no broadband when the pandemic sent students and adults home to work. AT&T has gone so far as to announce on October 1 that it will no longer install new DSL customers – so it’s ceding the towns and cities in the states to become monopoly markets controlled by cable companies. CenturyLink got billions of federal dollars to improve rural broadband to at least 10/1 Mbps, but nobody in North Carolina can find where these upgrades have been made.

The big ISPs are lobbying against a bogeyman that doesn’t exist. Municipal competition has been allowed in a lot of the country for twenty years and there are still only around 200 communities that have built fiber – most of them small and most of them already having a municipal electric utility.

Communities only look for broadband solutions when prompted to do so by their citizens. A big percentage of rural communities are now exploring better broadband because their citizens are screaming loudly about the inability to participate in normal daily life without good broadband. At the local level, broadband is a non-partisan issue and you won’t find many local politicians in rural areas who are not strong proponents of solving the broadband gaps.

But unfortunately, at the state level, politics as usual still controls the municipal ban on broadband. Almost annually in North Carolina, proponents for better broadband take a shot at overturning the municipal broadband ban. But year after year the lobbyists kill such efforts. In the last legislative session the story I heard is that AT&T lobbyists were able to change the wording of the proposed new law to the point of neutering it. This is the same AT&T that publicly announced a year ago that it was finished building residential fiber and that this year decided to bow out of the business of providing broadband using DSL on copper wires. This is a big ISP that is not spending any money to help North Carolina households but that still is still spending on lobbyists to kill any law that even hints at broadband competition.

The AT&T tactic used to kill a pro-broadband law earlier this year demonstrates the newest big ISP tactic. Lobbyists get language inserted into proposed bills that kills them – but the language is always subtle, and to a layperson never sounds bad. This gives cover to state politicians that can tell their rural constituents that they are pro-broadband while still voting against pro-broadband laws.

What’s ironic about the municipal broadband ban is that there are only a few communities that are willing to become an ISP. The vast majority of communities that spend money looking for a broadband solution are trying to lure a new ISP to serve their community. But of course, the big ISPs don’t want that any more than they want municipal competition.

The pandemic may have changed the calculus of the legislative process enough to overturn the bans against municipal broadband. Rural residents are now up-in-arms about lack of broadband and are letting politicians know their unhappiness. But since the legislative process is done behind closed doors, it’s sadly likely that the lobbyists of the big ISPs will continue to hold enough sway to keep killing competition.

 

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Current News The Industry

Why I am Thankful for 2020

Every year I write a blog at Thanksgiving talking about the things in our industry for which I am thankful. Most years it’s not hard to do this because there are always a lot of great things happening in the broadband industry. But 2020 has been hard on the broadband industry just like it’s been hard on all of us. I had to reach a little deeper this year to make a list. Please feel free to comment on this blog with things you are thankful for this year.

Response to the Pandemic. To me, the big story of the year is the way that local officials and local ISPs quickly responded to the pandemic. It was a shock sending kids home to do schoolwork who didn’t have computers or home broadband connections. I’ve talked to dozens of school districts that scrambled and found hot spots and computers so that within a short time kids had some options.

Unfortunately, this wasn’t always easy. For instance, there are a lot of rural places with poor cellular coverage where sending home a wireless hotspot wasn’t a viable solution. Communities and ISPs found ways to install public hot spots at schools, parked school buses, restaurants, fire stations – any place where people could park cars and where ISPs could get a broadband signal. I’m thankful for the thousands of people who mobilized quickly to make this happen.

Rural Broadband Problems Got Noticed. Politicians at every level heard from angry constituents who will no longer tolerate the sad state of rural broadband. All of a sudden, almost every politician is talking about solving the rural broadband problem. We’ll have to see how this translates into action when the pandemic is over, but there is no mistake that rural residents were finally heard loud and clear.

Rural Spectrum. Probably the brightest broadband news this year is that the FCC released a ton of new spectrum that can be used for rural broadband. Broadband purists want everybody in America to have fiber, but until we figure out how to pay for that, today’s wireless technology can deliver 50 Mbps to 100 Mbps broadband in rural areas and is a badly-needed solution. The new spectrum gives WISPs a chance to step up their game.

Better WiFi on the Way. The industry released the WiFi 6 standard and the FCC approved 6 GHz spectrum for WiFi use. These two innovations are going to revolutionize WiFi. A lot of the problems that homes cite with broadband performance can be blamed on our currently overloaded WiFi spectrum bands. Within a few years, most of these problems should melt away with new WiFi gear.

A New FCC Coming. While this FCC did some positive things, they have gone too far in the direction of catering to the big ISPs at the expense of the public good. The ideal FCC balances the needs of the industry and the needs of the public. I expect a new FCC is going to swing the regulatory pendulum away from a carrier emphasis back closer to where the FCC ought to be.

Cybersecurity Getting Better. Early news reports say there was no apparent tampering of voting machines in the recent elections. That’s great news and is a reminder that cybersecurity has quietly gotten a lot better at protecting computer networks. There hasn’t been a big hack of corporate or government networks announced for a while. The biggest threats to computer networks continue to come from disgruntled employees or employees that inadvertently let bad actors into networks.

Growth of Video Conferencing. I don’t know how others feel, but I like video conferencing. I find it refreshing to see who I’m talking to. As a lifetime road warrior, I really like not getting on an airplane to make a presentation. We’ve learned this year that people can communicate well from a distance. I don’t know about the rest of the world, but I won’t be flying across the country without a very good reason when the pandemic is finally over – and for that I’m thankful.

It’s Almost 2021. Perhaps the best thing about 2020 is that it’s almost over and we’ll soon get a new year, and hopefully a reset. May 2021 be better for you all.

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The Industry

Traditional Cable Losses Slow in 2Q 2020

The largest traditional cable providers collectively lost almost 1.1 million customers in the third quarter of 2020 – an overall loss of 1.5% of customers. This is smaller than the loss in the second quarter of 1.5 million net customers. To put the quarter’s loss into perspective, the big cable providers lost 12,641 cable customers per day throughout the quarter.

The numbers below come from Leichtman Research Group which compiles these numbers from reports made to investors, except for Cox which is estimated. The numbers reported are for the largest cable providers, and Leichtman estimates that these companies represent 95% of all cable customers in the country.

Following is a comparison of the third quarter subscriber numbers compared to the end of the second quarter of 2020:

3Q 2020 2Q 2019 Change % Change
Comcast 20,094,000 20,367,000 (273,000) -1.3%
Charter 16,235,000 16,168,000 67,000 0.4%
DirecTV 13,600,000 14,290,000 (690,000) -4.8%
Dish TV 8,965,000 9,052,000 (87,000) -1.0%
Verizon 4,000,000 4,062,000 (62,000) -1.5%
Cox 3,710,000 3,770,000 (60,000) -1.6%
AT&T TV 3,500,000 3,400,000 100,000 2.9%
Altice 3,035,100 3,121,500 (86,400) -2.8%
Mediacom 663,000 676,000 (13,000) -1.9%
Frontier 518,000 560,000 (42,000) -7.5%
Atlantic Broadband 317,787 311,845 5,942 -1.9%
Cable One 277,000 290,000 (13,000) -4.5%
Total 74,914,887 76,068,345 (1,153,458) -1.5%
Total Cable 44,331,887 44,704,345 (372,458) -0.8%
Total Satellite 22,565,000 23,342,000 (777,000) -3.3%
Total Telco 7,696,000 8,082,000 (4,000) 0.0%

Some observations about the numbers:

  • The big loser is AT&T, which lost a net of 590,000 traditional video customers between DirecTV and AT&T TV (relabeled from AT&T U-verse). It’s worth noting that AT&T added 100,000 telco cable customers for the quarter.
  • The big percentage loser continues to be Frontier which lost 7.5% of its cable customers in the quarter.
  • Charter has gained cable customers for two quarters in a row. The company credits the gains to offering a lower-price package and also to a marketing campaign that is giving two months free of broadband to new customers during the pandemic. Charter has been beating the industry as a whole every quarter since Q3 2018.

The loss of traditional cable customers continues to mount at dizzying levels for the industry. This is the seventh consecutive quarter where the industry lost over one million cable subscribers. It’s especially worth noting that these losses happened during a quarter when the biggest ISPs gained over 1.5 million customers for the quarter.

One interesting thing to note is that people cutting the cord seem to be switching to online video sources that carry many of the same channels as traditional cable TV, In the third quarter the combination of Hulu + Live TV, Sling TV, and AT&T TV Now, and fuboTV collectively added over one million customers for the quarter. This count doesn’t include YouTube TV or Philo which don’t report customers quarterly. The online industry pins the increases on the return of live sports. It’s worth noting that Hulu + Live TV would now rank as the fifth largest cable provider, ahead of Verizon.

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The Industry

Broadband Usage Stays Strong in 3Q 2020

OpenVault recently released its Broadband Insights Report for the third quarter of 2020. OpenVault supplies software used by the companies that run the Internet and is able to provide some interesting insights into the state of broadband.

Probably the biggest news in the report is that increased household usage due to the pandemic has not abated. The average US home in September used 384 gigabytes of data, up slightly from 380 gigabytes in June, but up 40% from September 2019. Perhaps the most interesting thing about that number is that schools returned to live classes in many parts of the country in September, and yet average Internet usage did not decline.

The 384 gigabytes represent total household bandwidth usage, both upload and download combined. OpenVault reported average upload and download usage separately for the first time and reports that the average home downloaded 359 gigabytes and uploaded 25 gigabytes of data. That second number is shocking and just a year ago the average upload usage would have been a lot smaller.

Power users of the Internet remain high with 8.8% of all US households now using more than 1 terabyte of data per month, including 1% of households now using over 2 terabytes per month. This is more than double the 4.2% of households that used a terabyte of monthly data in the third quarter of 2019. This has to be good news to ISPs with data caps – most are not billing data caps during the pandemic, but they will realize significant new revenue when they go back to billing for high broadband usage.

Subscriptions to faster broadband continue to climb as households upgrade to faster broadband tiers. Since the second quarter, nationwide subscribers to gigabit broadband increased from 4.9% to 5.6% (an increase of over 875,000 new gigabit subscribers). Subscribers to speeds between 500 Mbps and gigabit grew from 5% to 5.24%, and subscribers to speeds between 200 Mbps and 500 Mbps grow from 13.5% to 14.1%.

OpenVault reports two numbers that rural America will find disheartening. They report that the average nationwide download speeds in September was 170 Mbps and the average upload speed was 13 Mbps. That average highlights better than any other statistic the sad state of rural broadband where the FCC defines broadband as 25/3 Mbps but where most rural homes fall far short of even that modest goal. It’s worth noting that the average speeds are now being influenced heavily by the households subscribing to gigabit speeds.

Remembering that OpenVault works for the largest ISPs, the report closes with a conclusion that the increased broadband usage means increased revenue opportunities for ISPs as customers migrate to faster broadband speeds and spend between $20 and $30 more per month for broadband.

The OpenVault statistics should be a reminder that broadband usage has been growing at a torrid rate for years, with residential broadband usage increasing annually by 21% for the last decade. The pandemic has accelerated that growth a bit, but to the extent that millions of workers might remain working at home after the pandemic – this one-time burst in increased usage likely represents a restart of the curve. Broadband usage has remained at 40% to 50% above 2019 levels this year, but there is no reason to think it will ever recede to past usage levels. People are going to work from home more in the future. We have all incorporated video meetings into our routines. Millions of households during the pandemic upgraded to 4K TVs and are not going back to watching lower resolution video. Higher broadband usage volumes are here to stay.

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The Industry

Will Cable Companies Tackle Faster Upload Speeds?

The number one complaint I’ve been hearing about broadband during the pandemic is that people found that they were unable to conduct multiple online sessions for working or doing schoolwork from home. I’ve talked to a lot of people who have been taking turns using broadband, which is an unsatisfactory solution for everybody involved. This phenomenon became instantly apparent for people with slow rural broadband connections, but a lot of people in towns using cable company broadband hit the same roadblock.

Cable companies have always been stingy with upload speeds because it hasn’t really mattered to the public. Only a handful of customers who wanted to upload large data files ever cared much about upload speeds. But connecting to a school or work server or talking on Zoom requires dedicated upload connections – and when those functions suddenly became a part of daily life, people suddenly cared a lot about upload broadband speeds.

By now, most cable companies have upgraded their networks to DOCSIS 3.1. This allowed upgrades of download speeds from a maximum of perhaps 200 Mbps up to a gigabit. Unfortunately, as part of this upgrade, many cable providers did nothing to improve upload speed.

People may not realize that the signals inside of a cable company network use radio frequencies to transmit data, meaning a cable network is essentially a captive radio network kept inside of the copper coaxial wires. As such, the signals inside a coaxial system share the same characteristics as any wireless network. Higher frequencies carry more data bits than lower frequencies. All of the signals are subject to interference if external frequencies leak into the cable transmission path.

The DOCSIS specification for cable broadband sets aside the lowest frequencies in the system for upload bandwidth – the spectrum between 5 MHz and 42 MHz. This happens to be the noisiest part of cable TV frequency – it’s where outside sources like appliances or motors can cause interference with the signal inside the cable network.

The DOCSIS 3.0 specification, released in 2006 allowed for other parts of the spectrum to be used for upload data speeds, but very few cable companies took advantage of the expanded upload capability, so it’s laid dormant. This DOCSIS 3.0 standard allowed a mid-split option to increase the frequency for upload to 85 MHz. or a more-aggressive high-split option to assign all of the bandwidth up to 204 MHz to data upload. DOCSIS 4.0 is going to offer even a wider range of upload speeds, as high as 684 MHz of spectrum.

It’s been widely reported during the pandemic that millions of households have upgraded to faster broadband packages in hopes of solving the upload problem. But upgrading download speed from 100 Mbps to 200 Mbps won’t help a household if the upload path is the same with both products.

Cable companies are faced with a big cost dilemma. It’s costly to upgrade a cable network from today’s stingy upload speeds to the mid-spit or hi-split option. Rearranging how the bandwidth is used inside of a cable network means replacing many of the key components of the network including neighborhood nodes, amplifiers, and power taps. It could mean replacing all cable modems.

It’s hard to know what cable companies will do. They might be hoping that the issue blows over when people and students move back out of the home. And to some extent that could happen. We saw the average monthly download bandwidth used by homes drop this year from 404 gigabytes in March to 380 gigabytes in June after home-schooling ended for the spring school year. There is likely going to be some relief for upload bandwidth demand when the pandemic is finally over.

But there is a lot of evidence that the increased demand for upload bandwidth will never drop to pre-pandemic levels. It seems likely that millions of jobs are going to permanently migrate to the home. It seems likely that schools will more freely allow students with illnesses to keep up with schoolwork remotely.  High school students are likely to see more options for advanced placement classes online. It looks like video conferencing is here to stay.

Will cable companies make a big investment just to improve upload speeds? Most of don’t plan to upgrade to DOCSIS 4.0 until near to the end of this decade and might decide to spend no other capital until then – since that future upgrade will mean replacing all components of the network again. The cable companies have the ability to greatly increase upload speeds today – but my bet is that almost none of them will do so.

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The Industry

The Speed of Thought

Verizon has created a 1-hour documentary on the potential for 5G called the Speed of Thought. It’s available on Amazon Prime, on Comcast’s Peacock, as well as on Verizon FiOS on demand. Here is the trailer for the film.

It’s an interesting video that looks a decade into the future from the eyes of 5G developers. The main thrust of the video is that the future of 5G is going to offer a lot more than just faster data speeds for cellphones. The documentary looks at some specific examples of how 5G might interface with other technologies in the future to provide solutions that are not needed today.

The documentary looks at the potential for marrying 5G and augmented reality for firefighters to better let them navigate inside buildings during fire to find and save people. This will require having building plans on file for the fire department that could then be used by firefighters to navigate during the near zero visibility during a fire. I have to admit that this is a pretty cool application that would save lives if it can ever be made to work. The application requires fast wireless broadband in order to communicate a 3D image of the inside of a building in real-time.

The documentary also explores using 5G to assist in emergency medicine in remote places. In Western North Carolina where I live this is a real issue in that residents of many western counties live hours away from a hospital that could save lives for heart attacks, strokes, and accidents. The example used in the film is the use of a robot that assists with a heart procedure in San Francisco, but controlled from Boston. I have a hard time thinking that’ll we’ll ever trust broadband-enabled surgery in major hospitals since an unexpected broadband outage – something that happens far too often – means a loss of life. But the idea of being able to administer to remote heart attack and stroke victims has major potential as a lifesaver.

There is also a segment where students are taught about the civil rights movement in an interactive environment using augmented reality. I have to think this technology will be introduced first in schools which largely have been connected to gigabit fiber in most of the country. However, the idea of tying augmented reality to places like a battlefield or an art museum sounds appealing. It’s hard like immersive learning – actually seeing and participating in events – would be a much more effective way to learn than reading books.

Finally, there is a segment on a test program in Sacramento that uses 5G to provide instant feedback on traffic conditions to drivers, pedestrians, and bicycle riders. This is obviously the first generation of using 5G to create smarter or self-driving vehicles while also benefitting pedestrians and others who enter traffic lanes. Verizon has been talking about using 5G for smart cars since the earliest days of talking about 5G. There is still a long way to go, and even when this gets here it’s likely to appear in places like Sacramento and not in rural America.

The documentary is well done and ought to be interesting to anybody in the industry. But it is still an advertising piece intended to convince people that 5G is a great thing. What I don’t see in all of these applications is a giant new revenue stream for Verizon. Using augmented reality for education is likely to evolve and use landline broadband long before it’s made mobile. Applications like the one that makes life easier for firefighters are intriguing, but it’s hard to envision that as a mover and shaker of Verizon’s bottom line. I think the one that Verizon is hoping for is smart vehicles and traffic control. The company hopes that every car of the future comes with a 5G subscription. Verizon also hopes that people in the future will wear augmented reality glasses in daily life. I really like the imagery and stories told in the documentary, but I remain leery about the predictions.

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The Industry

Comcast Offers New Work-from-home Product

The pandemic has forced millions of people to work from home. This instantly caused heartburn for the IT departments of large corporations because remote workers create new security vulnerabilities and open companies to cyberattacks and hacking. Big companies have spent the last decade moving data behind firewalls and suddenly are being asked to let thousands of employees pierce the many layers of protection against outside threats.

Comcast announced a new product that will alleviate many of the corporate IT concerns. Comcast, along with Aruba has created the Comcast Business Teleworker VPN product. This product creates a secure VPN at an employee’s home and transports the VPNs for all remote workers to a remote datacenter where corporate IT can then deal with all remote workers in one place.  This isolates the worker connections from the corporate firewalls and employees instead deal with copies of corporate software that sit in a datacenter.

There is a perceived long-term need for the product since as many as 70% of companies say that they are likely to continue with the work-from-home model after the end of the pandemic. Working from home is now going to be a routine component of corporate life.

At the home end, the Comcast product promises to not interfere with existing home broadband. The only way for Comcast to do this is to establish a second data stream from a house using a separate cable modem (or utilizing modems that can establish more than one simultaneous connection). This is an important aspect of the product because one of the biggest complaints about working from home is that many homes have problems accommodating more than one or two workers or students at the same time. This new product would be ill-received by workers if implementing it means less bandwidth for everybody else in the home.

By routing all remote employees to a common hub, Comcast will enable corporate IT staff to mimic the work computing environment for remote workers. Many companies are currently giving remote employees limited access to core software systems and data, but this arrangement effectively establishes the Comcast hub as a secure node on the office network.

This is something that any ISP with a fiber network should consider mimicking. An open-access network on fiber already does this same thing today. An open-access network creates a VPN at each customer of a given ISP and then aggregates the signals, untouched, to deliver to the ISP. On a fiber network, this function can be done by fairly simple routing.  Fiber ISPs can also provide the home working path separate from the consumer path by either carving out a VPN or else providing a second data path – something most fiber ONTs already allow.

Comcast has taken the extra step of partnering with Aruba to enable a corporation to establish a virtual corporate data center at a remote site. But fiber ISPs don’t have to be that complicated and rather than offering this to only large corporate clients, a fiber network could deliver a secure path between home and office for a business with only a few remote employees.

This could even be provided to sole proprietors and could safely link home and office on a VPN.  That allows for the marketing of a ‘safe office’ connection for businesses of any size and would provide the average small business a much more secure connection between home and office than they have today.

Every fiber provider that serves both residential communities and business districts ought to develop some version of this product by year-end. If working from home is a new reality, then fiber-based ISPs ought to be catering to that market using the inherent robustness and safety of a fiber network to create and route VPNs over the local fiber network.

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The Industry

You Can’t Force Innovation

The new video service Quibi failed after only 7 months of operation and after having received $2 billion in backing from big industry players. The concept was to offer short 5 to 7-minute video serials that would get viewers engaged in a story from day-to-day and week-to-week. The failure seems to be due to nobody being interested in the format. Younger viewers aren’t interested in scripted Hollywood content and instead watch content created by their peers. Older people have now been trained to binge-watch. It turns out there no audience for the concept of short cliff-hanger videos.

The Quibi failure reminded me that you can’t force innovations onto the public. We live in a society where everything new is hyped beyond belief. New technologies and innovations are not just seen as good, but in the hype-world are seen as game changers that will transform society.  A few innovations live up to the hype, such as the smartphone. But many other highly-hyped innovations have been a bust.

Consider bitcoin. This was a new form of currency that was going to replace government-backed currency. But the public never bought into the concept for one big fundamental reason – there is nothing broken about our current form of money. We deposit our money in banks, and it sits there safely until we’re ready to use it. For all of the endless hype about how bitcoin would change the world, I never heard a good argument about why bitcoin is better than our current banking system – except maybe for criminals and dictators that want to hide wealth.

Another big bust was Google Glass. People were not ready to engage with somebody in public who could film them and replay a casual conversation later or post it on social media. People were even more creeped out by the stalker aspect of men using facial recognition to identify and stalk women. To give credit to Google, the folks there never envisioned this as a technology for everybody, but the Internet hype machine played up the idea beyond belief. The public reaction to the technology was a resounding no.

Google was involved in another project that hit a brick wall. Sidewalk Lab, a division of Alphabet envisioned a new smart city being created on the lakefront in Toronto. To tech folks, this sounded great. The city would be completely green and self-contained. Robots would take care of everything like emptying trashcans when they are full, to setting up picnics in the park and cleaning up afterwards. Traffic was all underground and an army of robots and drones would deliver everything people wanted to their doorstep. But before this even got off the drawing board, the people of Toronto rejected the idea as too big-brotherish. The same computer systems that catered to resident demands would also watch people at all times and record and categorize everything they do. In the end, privacy won out over technology.

Some technologies are hyped but never materialize. Self-driving cars have been touted as a transformational technology for over a decade. But in the last few years, the engineers working on the technology acknowledge that a fully self-sufficient self-driving car is still many years away. But this doesn’t stop the hype and there are still articles about the promise of self-driving cars in the press every month.

Nothing has been hyped more in my lifetime than 5G. In the course of recently watching a single football game, I must have seen almost a dozen 5G commercials. Now that 5G phones are hitting the market, the new technology is likely going to soon be perceived by the public as a bust. The technology is being painted as something amazing and new, but recent tests show that 5G is no faster than 4G in 21 of 23 cities. 5G will eventually be faster and better, but will today’s hype make it hard for the cell companies to explain when 5G is actually here?

I could continue to list examples. For example, if I had believed the hype, I’d now live in a fully-automated home where I could talk to my home and have it cater to my every whim. I’d have unlimited power from a cheap neighborhood fusion power plant that produces unlimited and clean power fueled by water. I’d be able to avoid a commute by using my flying car. There is much to like in the hype-world, but sadly it’s not coming any time soon.