Tag: China

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The Industry

Are We Facing the Splinternet?

One of the consequences of the war between Russia and the Ukraine is that Russia has largely stopped participating in many large worldwide web applications. Russia has blocked Facebook and Twitter. Other applications like Apple, Microsoft, TikTok, Netflix, and others have withdrawn from Russia.

The European Union is in the process of trying to block Russian-generated content such as the state-owned news outlets of RT (formerly Russia Today) and Sputnik. There are discussions of going so far as block all Russian people and businesses from EU search engines.

Russia has responded by declaring Meta, the owner of Facebook, Instagram, and WhatsApp, to be an extremist organization. This has also led the Russian government to withdraw its participation in organizations that set international policies such as the Internet Council of Europe. The EU countered by suspending Russia from the European Broadcasting Union.

There is a new phrase being used for what is happening with Russia – the splinternet. In a full splintenet scenario, Russia could end up being totally separate from the rest of the world as far as participating in the Internet.

There are already countries that don’t fully participate in the worldwide web. North Korea has blocked participation in much of the web. China and Iran block a lot of western content. However, these countries still participate in supporting the general structure and protocols of the Internet, and not all western applications are blocked.

The folks from the worldwide governing bodies that oversee Internet protocols are concerned that Russia, and perhaps China and Iran could decide to fully withdraw from the web and develop their own protocols for use inside the countries. If the countries that have peeled off from the rest of the web don’t maintain the same protocols, then communications with the rest of the world eventually becomes difficult or impossible.

This would have a drastic impact on the web as an international means of communication. There are huge amounts of digital commerce between these countries and the rest of the world over and above social apps. Commerce between these countries and the world depends on email, messaging apps, and collaboration platforms. People and businesses in these countries participate in digital meetings in the same manner as the rest of the world. The economic impacts of large countries effectively withdrawing from worldwide e-commerce would be immense.

This is something that we’ve seen coming for many years. For example, Google and Facebook located servers in Russia so that content generated in Russia would stay in the country and not be stored in servers and data centers outside the country.

A Russian withdrawal from the Internet would be far more drastic than Chinese censoring of web contact – it would cut communications with the outside world to zero. It’s hard to even imagine the impact this would have on Russian businesses, let alone cutting the ties between the Russian people and everybody else. This would create a digital Berlin Wall.

It doesn’t seem likely that having Russia or China withdraw from the web would have much impact on how the rest of the world uses the web. It would mean that citizens in those countries would not benefit from the newest innovations on the web. But most countries already today understand how important the web is for commerce, and for most countries, that’s a good enough reason not to tinker with something that works.

From my perspective, the whole world suffers if folks stop participating in worldwide communications. The web is the great equalizer where folks with similar interests from around the world get to know each other. But we live in a world full of politics and controversy, so it’s probably inevitable that this will spill eventually over to the Internet, like it does to many other parts of the world economy.

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The Industry

5G in China

There is an interesting recent article in the English version of a South Korean newspaper, the ChosunILBO, that talks about 5G in China. According to the article, the Chinese 5G rollout is an expensive bust.

There are a number of interesting facts disclosed about the Chinese 5G roll-out. First, it’s clear that the roll-out is using millimeter wave spectrum. The article says that the 5G towers in the Chinese networks are being installed about 200 meters apart (600 feet) since the signal from each transmitter travels between 100 and 300 meters. That’s consistent with millimeter wave hot spots being deployed in downtown cities by Verizon.

It takes a huge number of millimeter wave cell sites to cover a city and the article says that by the end of June 2020 that the Chinese had installed 410,000 cell sites. The article estimates that to get the same coverage as today’s 4G that the network would eventually need over 10 million cell sites. The article quotes Xiang Ligang, the director-general of the Information Consumption Alliance, a Chinese telecom industry association, who said the plans are to build one million new cell sites in each of the next three years.

The 5G coverage isn’t seeing wide acceptance. The article cites a recent Chinese survey where over 73% of the public says there is no need to buy 5G phones. This matched the findings from another survey that also said the public saw no need for 5G.

One of the more interesting things cited in the article is that the 5G cell sites use a lot of energy and that starting in August, China Unicom has taken to shutting the cell sites down from 9 PM until 9 AM daily to save on electricity costs. They say each cell site is using triple the power of a 4G cell site, and there are a lot of sites to power. The new 5G specifications include a provision to significantly reduce power consumption for 5G cell sites, but in the early days of deployment, it looks like this has gone in the wrong direction.

The article concludes that the Chinese 5G experiment might end up as an economic bust. What’s interesting about this article is that a lot of the same things can be said about 5G in South Korea. It’s been reported that South Korea has the biggest percentage penetration of 5G handsets, but that the public has largely been panning the service.

None of this is surprising. The 5G deployment using millimeter wave spectrum is an outdoor technology and can only be brought indoors by installing numerous 5G transmitters inside a building since the spectrum won’t pass through walls. There is no doubt that the millimeter wave signals are fast, but as has been demonstrated here, the reception of signal is squirrely. Apparently, bandwidth comes and goes by a simple twist of the hand and the user’s body can block the millimeter wave signals. Add that to the inability to continue with a connection when walking into a building or around the corner of a building, and the millimeter wave product doesn’t sound particularly user friendly.

The outdoor product possibly makes sense in places where people stay and work outside, such as public markets. But it’s not an inviting technology for people who are only outside to go between buildings or to commute.

There are no indications that Verizon intends to deploy the product widely in the US, or at least not in the same manner that would cover a city in cell sites every 600 feet.

There has been a huge amount of hype in this country about being in a race with the Chinese over the deployment of 5G. But after seeing articles like this, perhaps our best strategy is to lay back and wait until 5G equipment gets cheaper and until the new 5G cell sites are made energy efficient. For now, it doesn’t sound like a race we want to win.

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The Industry

Broadband in China

For years I’ve been hearing how we are losing the broadband battle with China, so I decided to take a look at the current state of broadband in the country. The China Internet Network Information Center (CNNIC) publishes statistics about the state of broadband in the country, and I used the Statistical Report on Internet Development in China from August 2019 in writing this blog.

Here are some of the more interesting statistics about the state of broadband in the country:

  • China is a lot larger than the US with a current population just below 1.4 billion, compared to an estimate of US population of around 327 million.
  • As of June 2019, China had 854 million people connected to the web in some manner, for an overall Internet penetration based on population of 61.2%. It’s not easy to compare that statistic to the US since we track Internet usage using subscriptions to households.
  • China is still rapidly adding people to the internet. In the first six months of 2019, the country added 26 million new Internet users.
  • The Chinese interface with the internet in a variety of ways, with the following statistics for June 2019:

Cellphone        847 million      99%

Desktop           394 million      46%

Laptop             308 million      36%

TV                     283 million      33%

Tablet              242 million      28%

  • As of June 2019, China had 396 million users on fiber-to-the-home. China is adding fiber faster than the US and there were over 67 million customers added for the year ending in June 2019.
  • Chinese speeds for landline connections averaged 31.3 Mbps in June 2019, up 25% since 2018. Mobile speeds in 2019 averaged 23 Mbps, up 7% from 2018.
  • Like the US, China has a rural digital divide. In 2018 the country had 225 million rural Internet users representing a 39% penetration. Urban Internet users were 630 million, a 77% penetration. There are 347 million rural Chinese without access to the Internet, almost 25% of all citizens in the country. It’s hard to compare that statistic to the US since the FCC does such a lousy job of counting households with broadband.
  • China is working to solve the rural digital divide and added 3 million rural Chinese to the Internet in the first half of 2019. However, much like here, that rate of growth is glacial, and at that rate of growth it will take 36 years for the rural population to grow to the same current penetration seen in urban areas.
  • The Chinese are heavy users of instant messaging with 96.5% of Internet users using messaging in 2018.
  • It’s important to remember that Chinese web users are monitored closely and live behind what the west calls the Great Firewall of China. The government tracks how people use broadband, and we don’t have direct statistics for the following:

Watch online video       88.8%

Use online news            80.3%

Shop online                   74.8%

Online bill payment      74.1%

Order meals online       49.3%

Car hailing services       39.4%

  • China’s mobile data traffic is growing even faster than in the US. In the first half of 2018, the Chinese mobile networks carried 266 petabytes of traffic. By the first half of 2019 that traffic had doubled to 554 petabytes. China’s cellular data usage doubled in one year, while here it’s taking two years to double. The numbers are huge, and a petabyte equals 100 billion gigabytes.
  • The average Chinese broadband user spent 27.9 hours online in 2019.
  • The CNNIC tracks why people don’t use the internet. 45% don’t have access to broadband; 37% lack the skills to use broadband; 15% don’t have computers; 11% say they have no need. The interesting thing about the list in China is that nobody said they couldn’t afford Internet access.

There was one interesting thing missing in the Chinese report. There was no mention of 5G. That means, at least to the government agency that tracks broadband usage in China, there is no 5G race. It’s obvious that the Chinese need 5G, probably more badly than here since the volumes of data on their mobile networks are doubling annually. But the topic wasn’t worth a mention in their annual report of the status of broadband.

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Regulation - What is it Good For? Technology

The 5G Summit

There was recently a 5G Summit held at the White House to discuss how the administration could encourage the public sector to deploy 5G as quickly as possible. The purpose of the summit was summarized well by Larry Kudlow, the director of the National Economic Council who said the administration’s approach to the issue is ‘American first, 5G first”.

Kudlow went on to say that the administration wants to give the wireless industry whatever they need to deploy 5G quickly. The FCC recently took a big step in that direction by speeding up and cutting the costs for attaching 5G small cell sites to poles and other infrastructure in the right-of-way.

There are a few other ways that were mentioned about how the administration could foster 5G deployment. David Redl, the head of the NTIA called for the government to make the needed spectrum available for 5G. The FCC is in the process of having an auction for spectrum in the 25 GHz and 28 GHz bands. The FCC is also working towards finalizing rules for the 3.5 GHz and 3.7 GHz spectrum (the 3.5 GHz CBRS band will be the subject of tomorrow’s blog).

I hope that the fervor to promote 5G doesn’t result in giving all of the new spectrum to the big wireless carriers. One of the best things the FCC ever did was to set aside some blocks of spectrum for public use. This fueled the WiFi technology sector and most homes now have WiFi networks. The spectrum also powers the fixed wireless technology that is bringing better broadband to rural America. While 5G is important, the administration and the FCC need to set aside more public spectrum to allow for innovation and broadband deployment outside of the big ISP sector.

I found this summit to be intriguing because it’s the first time I recall the government so heavily touting a telecom technology before it was introduced into the marketplace. There was mention in the Summit that the US is in a race with China to deploy 5G, but I’ve never seen anybody explain how that might give China an advantage over the US. China is far behind the US in terms of landline broadband and it makes sense for them (and much of the rest of the world) to stress wireless technologies.

There certainly was no similar hoopla when Verizon first announced the widespread deployment of fiber – an important milestone in the industry. In fact, at the time the press and Wall Street said that Verizon was making a mistake. It’s interesting to see that Verizon is again the market leader and is the only company, perhaps aside from T-Mobile, that has announced any plans to deploy 5G broadband. It’s worth looking back in history to remember that no other big ISPs followed Verizon’s lead and for over a decade the only other fiber to residences was built by small telcos, municipalities and small overbuilders.

Even if the government makes it as easy as possible to deploy 5G, will other big ISPs follow Verizon into the business? For now, AT&T has clearly decided to pass on the technology and is instead investing in fiber to homes and businesses. The big cable companies have shown no interest in the technology. The cellular companies will upgrade mobile networks to 5G but that’s expected to happen incrementally over a decade and won’t be a transformational technology upgrade. 4G LTE is still expected to be the wireless workhorse for many years to come.

There was one negative issue mentioned at the Summit by Rep. Greg Walden of Oregon. While praising efforts to deploy 5G he also said that we needed to take steps to protect the supply chain for 5G. Currently the FCC has precluded the use of any federal funds to buy technology manufactured by Huawei. But a more pressing issue is the current tariffs on China that are inflating the cost of 5G electronics – something that will be a barrier to deployment if they remain in place for very long.

It’s likely that the Summit was nothing more than politicians climbing onto a popular bandwagon. There has been enough hype about 5G that much of the public views it as a cutting-edge technology that will somehow transform broadband. We’re going to have to watch the Verizon deployment for a while, though, to see if that is true.

The administration has it within their power to create more benefits for companies willing to invest in 5G. However, helping huge companies like Verizon, which doesn’t need the help, is not likely going to bring 5G to more homes. And federal money won’t transform 5G into a technology that can benefit rural America, since 5G requires a robust fiber network. I just hope this doesn’t signal more giveaways to the giant ISPs – but if the FCC’s small cell order is any indicator, that might be all it means.

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