The Future of AT&T and Verizon

The cellphone companies have done such a great job of getting everybody to purchase a smartphone that cellular service in the country is quickly turning into a commodity. And, as is typical with most commodity products, that means less brand loyalty from customers and lower market prices for the products.

We’ve recently seen the cellular market demonstrate the turn toward becoming a commodity. In the first quarter of this year the cellular companies had their worse performance since back when they began. Both AT&T and Verizon posted losses for post-paid customers for the quarter. T-Mobile added fewer customers than expected and Sprint continued to lose money.

This is a huge turnaround for an industry where the big two cellular companies were each making over $1 billion per month in profits. The change in the industry comes from two things. First, people are now shopping for lower prices and are ready to change carriers to get lower monthly bills. The trend for lower prices was started by T-Mobile to gain market share, but low prices are also being pushed by cellular resellers – being fed by the big carriers. The cellular industry is only going to get more competitive when the cable companies soon enter the market. That will provide enough big players to make cellular minutes a true commodity. The cable companies have said they will be offering low prices as part of packages aimed at making customers stickier and will put real price pressure on the other cellular providers.

But the downturn in the first quarter was almost entirely due to the rush by all of the carriers to sell ‘unlimited’ data plans – which, as I’ve noted in some earlier blogs, are really not unlimited. But these plans offer lower prices for data and are freeing consumers to be able to use their smartphones without the fear of big overage fees. Again, this move was started by T-Mobile, but it was also driven heavily by public demand. AT&T and Verizon recognized that if they didn’t offer this product set that they were going to start bleeding customers to T-Mobile.

It will be really interesting to watch what happens to AT&T and Verizon, who are now predominantly cellular companies that also happen to own networks. The vast majority of revenues for these companies comes from the cellular parts of their companies. When I looked at both of their annual reports last year I had a hard time finding evidence that these companies were even in the landline network business. Discussions of those business lines are buried deeply within the annual reports.

These companies obviously need to find new forms of revenues to stay strong. AT&T is tackling this for now by going in a big way after the Mexican market. But one only has to look down the road a few years to see that Mexico and any other cellular market will also trend towards commoditization.

Both companies have their eyes on the same potential growth plays:

  • Both are making the moves necessary to tackle the advertising business. They look at the huge revenues being made by Facebook and Google and realize that as ISPs they are sitting on customer data that could make them major players in the targeted marketing space. Ad revenues are the predominant revenue source at Google and if these companies can grab even a small slice of that business they will make a lot of money.
  • Both are also chasing content. AT&T’s bid for the purchase of Time Warner is still waiting for government approval. Verizon has made big moves with the purchases of AOL and Yahoo and is rumored to be looking at other opportunities.
  • Both companies have been telling stockholders that there are huge amounts of money to be made from the IoT. These companies want their cellular networks to be the default networks for collecting data from IoT devices. They certainly ought to win the business for things like smart cars, but there will be a real battle between cellular and WiFi/landline connections for most other IoT usage.
  • Both companies are making a lot of noise about 5G. They are mostly concentrating on high-speed wireless connections using millimeter wave spectrum that they hope will make them competitive with the cable companies in urban areas. But even that runs a risk because if we see true competition in urban areas then prices for urban broadband might also tumble. And that might start the process of making broadband into a commodity. On the cellular side it’s hard to think that 5G cellular won’t quickly become a commodity as well. Whoever introduces faster cellphone data speeds might get a bump upward for a few years, but the rest of the industry will certainly catch up to any technological innovations.

It’s hard to foresee any business line where AT&T and Verizon are going to get the same monopoly power that they held in the cellular space for the past few decades. Everything they might undertake is also going to be available to competitors, meaning they are unlikely to make the same kind of huge margins they have historically made with cellular. No doubt they are both going to be huge companies for many decades to come since they own the cellular networks and spectrum. But I don’t think we can expect them to be the cash cows they have been in the past.

Machine Generated Broadband

One of the more interesting predictions in the latest Cisco annual internet forecast is that there will be more machine-to-machine (M2M) connections on the Internet by 2021 than there are people using smartphones, desktops, laptops and tablets.

Today there are a little over 11 billion human-used machines connected to the Internet. That number is growing steadily and Cisco predicts that by 2021 there will be over 13 billion such devices using the Internet. That prediction also assumes that total users on the internet will grow from a worldwide 44% broadband penetration in 2016 to a 58% worldwide penetration of people that have connectivity to the Internet by 2021.

But the use of M2M devices is expected to grow a lot faster. There are fewer than 6 billion such devices in use today and Cisco is projecting that will grow to nearly 14 billion by 2021.

So what is machine-to-machine communication? Broadly speaking it is any technology that allows networked devices to exchange information and perform actions without assistance from humans. This encompasses a huge range of different devices including:

  • Cloud data center. When something is stored in the cloud, most cloud services create duplicate copies of data at multiple data centers to protect against a failure at any given data center. While this does not represent a huge number of devices when measured on the scale of billions, the volume of traffic between data centers is gigantic.
  • Telemetry. Telemetry has been around since before the Internet. Telemetry includes devices that monitor and transmit operational data from field locations of businesses, with the most common examples being devices that monitor the performance of electric networks and water systems. But the devices used for telemetry will grow rapidly as our existing utility grids are upgraded to become smart grids and when telemetry is used by farmers to monitor crops and animals, used to monitor wind and solar farms, and used to monitor wildlife and many other things in the environment.
  • Home Internet of Things. Much of the growth of devices will come from an explosion of devices used for the Internet of Things. In the consumer market that will include all of the smart devices we put into homes such as burglar alarms, cameras, smart door locks and smart appliances of many kinds.
  • Business IoT. There is expected to be an even greater proliferation of IoT devices for businesses. For example, modern factories that include robots are expected to have numerous devices that monitor and direct the performance of machines. Hospitals are expected to replace wires with wireless networked devices used to monitor patients. Retail stores are all investigating devices that track customers through the store to assist in shopping and to offer inducements to purchase.
  • Smart Cars and Trucks. By 2021 it’s expected that most new cars and trucks will routinely communicate with the Internet. This does not necessarily imply self-driving vehicles, but rather that all new vehicles will have M2M capabilities.
  • Smart Cities. A number of large cities are looking to improve living conditions using smart city technologies. This is going to require the deployment of huge numbers of sensors that will be used to improve things like traffic flow, monitoring for crimes and improvement everyday things like garbage collection and snow removal.
  • Wearables. Today there are huge numbers of fitness monitors, but it’s expected that it will become routine for people to wear health monitors of various types that keep track of vital statistics and monitor to catch problems at an early stage.
  • Gray Areas. There are also a lot of machine-to-machine communications that come from computers, laptops and smartphones. I see that my phone uses data even at those times when I’m not using it. Our devices now query the cloud to look for updates, to make back-ups of our data or to take care of other tasks that our apps do in the background without our knowledge or active participation.

Of course, having more machine-to-machine devices doesn’t mean that this traffic will grow to dominate web traffic. Cisco predicts that by 2021 that 83% of the traffic on the web will be video of some sort. While most of that video will be used for entertainment, it will also include huge piles of broadband usage for surveillance cameras and other video sources.

If you are interested in M2M developments I recommend M2M: Machine2Machine Magazine. This magazine contains hundreds of articles on the various fields of M2M communications.

The Future of WiFi

There are a lot of near-term improvements planned for WiFi. The IEEE 802.11 Working Group (part of the Wi-Fi Alliance) has a number of improvements being planned. Many, but not all of the improvements, look at the future of using the newly available millimeter wave spectrum.

It’s been twenty years since the first WiFi standard was approved. I remember how great it felt about fifteen years ago when Verizon gave me a WiFi modem as part of my new FiOS service. Up until then my computing had always been tied to cables and it was so freeing to use a laptop anywhere in the house (although that first generation WiFi didn’t do a great job of penetrating the plaster walls in my old house).

Here are some of the improvements being considered:

802.11ax. The goal of this next-gen WiFi is to enable speeds up to 10 Gbps using the 5 GHz band of free WiFi spectrum. The standard also seeks to provide more bandwidth in the 2.4 GHz band. The developing new standard is looking at the use of Orthogonal Frequency Division Multiple Access (OFDMA), multi-user MIMO and other technology improvements to squeeze more bandwidth out of the currently available WiFi frequency.

Interestingly, this standard only calls for an improvement of about 37% over today’s 802.11ac technology, but the various improvement in the way the spectrum is used will hopefully mean about a four times greater delivery of bandwidth.

Probably the biggest improvement with this standard is the ability to connect efficiently to a greater number of devices. At first this will make 802.11ax WiFi more useful in crowded environments like stadiums and other public places. But the real benefit is to make WiFi the go-to spectrum for use for the Internet of Things. There is a huge race going on between WiFi and cellular technologies to grab the majority of that exploding market. For now, for indoor uses WiFi has the lead and most IoT devices today are WiFi connected. But today’s WiFi networks can get bogged down when there are too many simultaneous requests for connections. We’ll have to wait to see if the changes to the standards improve WiFi enough to keep in ahead in the IoT race.

Of course, the 10 GHz speed is somewhat theoretical in it would provide all of the bandwidth to one device that was located close the transmitter – but the overall improvement in bandwidth promises to be dramatic. This new standard is expected to be finalized by 2019, but there will probably be new hardware that incorporates some of the planned upgrades by 2018.

802.11ay. 802.11ay is the successor to 802.11ad, which never got any market traction. These two standards utilize the 60 GHz spectrum and are intended to deliver big amounts of bandwidth for short distances, such as inside a room. This new standard promises to improve short-range bandwidth up to 20 Gbps, about a three times improvement over 802.11ad. The new standard might have the same market acceptance issues if most users are satisfied instead with 802.11ax. The primary improvements over 802.11ad are the addition of MIMO antennas with up to four simultaneous data streams.

802.11az. The earlier two improvements discussed above are aimed at improving bandwidth to WiFi users. The 802.11az standard instead looks at ways to improve the location and positioning of users on a WiFi network. Since many of the improvements in WiFi use MIMO (multiple input multiple output) antennas, system performance is improved significantly if the WiFi router can accurately and quickly keep track of the precise location of each user on the WiFi network. That’s a relatively simple task in a static environment of talking to fixed-location devices like a TV or appliances, but much harder to do with mobile devices like smartphones, tablets, etc. Improvements in locating technology allows a WiFi network to more quickly track and connect to a device without having to waste frequency resources to first find the device before each transmission.

The other big improvement promised by this standard is increased energy efficiency of the network. As the network becomes adroit at identifying and remembering the location of network devices, the standard allows for WiFi devices to shut down and go to sleep and drop off the network when not in use, saving energy for devices like IoT sensors. The WiFi hub and sensor devices can be ‘scheduled’ to connect at fixed times allowing for devices to save power by sleeping in between connections.

These changes are necessary to keep WiFi useful and relevant. The number of devices that are going to be connected to WiFi is expected to continue to grow at exponential rates, and today’s WiFi can bog down under heavy use, as anybody who tries to use WiFi in a business hotel understands. But a lot of the problems with today’s WiFi can be fixed with the combination of faster data throughput along with tweaks that reduce the problems caused by interference among devices trying to gain the attention of the hug modem. The various improvements planned by the IEEE Working Group are addressing all of these issues.

Ready or Not, IoT is Coming

We are getting very close to the time when just about every appliance you buy is going to be connected to the IoT, whether you want it or not. Chips are getting so cheap that manufacturers are going to soon understand the benefits of adding chips to most things that you buy. While this will add some clear benefits to consumers it also brings new security risks.

IoT in everything is going to redefine privacy. What do I mean by that? Let’s say you buy a new food processor. Even if the manufacturer doesn’t make the device voice-controlled they are going to add a chip. That chip is going to give the manufacturer the kind of feedback they never had before. It’s going to tell them everything about how you use your food processor – how long before you take it out of the box, how often you use it, how you use the various settings, and if the device has any problems. They’ll also be able to map where all of their customers are, but more importantly they will know who uses their food processor the most. And even if you never register the device, with GPS they are going to know who you are.

Picture that same thing happening with everything you buy. Remember that Tostitos just found it cost effective to add a chip to a million bags of chips for the recent Superbowl. So chips might not just be added to appliances, but could be built into anything where the manufacturer wants more feedback about the use of their product.

Of course, many devices are going to go beyond this basic marketing feedback and will also include interactions of various kinds with customers. For instance, it shouldn’t be very long until you can talk to that same food processor through your Amazon Alexa and tell it what you are making. It will know the perfect settings to make your guacamole and will help you blend a perfect bowlful. Even people who are leery of home automation are going to find many of these features to be too convenient to ignore.

There is no telling at this early stage which IoT applications will be successful. For instance, I keep hearing every year about smart refrigerators and I can’t ever picture that ever fitting into my lifestyle. But like with any consumer product, the public will quickly pick the winners and losers. When everything has a chip that can communicate with a whole-house hub like Alexa, each of us will find at least a few functions we love so much that we will wonder how we lived without them.

But all of this comes with a big price. The big thing we will be giving up is privacy. Not only will the maker of each device in our house know how we use that device, but anybody that accumulates the feedback from many appliances and devices will know a whole lot more about us than most of us want strangers to know. If you are even a little annoyed by targeted marketing today, imagine what it’s going to be like when your house is blaring everything about you to the world. And there may be no way to stop it. The devices might all talk to the cellular cloud and be able to bypass your home WiFi and security – that’s why both AT&T and Verizon are hyping the coming IoT cloud to investors.

There is also the added security risk of IoT devices being used in nefarious ways. We’ve already learned that our TVs and computers and other devices in the house can listen to all of our private conversations. But even worse than that, devices that can communicate with the world can be hacked. That means any hacker might be able to listen to what is happening in your home. Or it might mean a new kind of hacking that locks and holds your whole house and appliances hostage for a payment like happens today with PCs.

One of the most interesting things about this is that it’s going to happen to everybody unless you live in some rural place out of range of cell service. Currently we all have choices about letting IoT devices into our house, and generally only the tech savvy are using home automation technology. But when there are chips embedded in most of the things you buy it will spread IoT to everybody. It’s probably going to be nearly impossible to neutralize it. I didn’t set out to sound pessimistic in writing this blog, but I really don’t want or need my toaster or blender or food processor talking to the world – and I suspect most of you feel the same way.

Standards for 5G

itu_logo_743395401Despite all of the hype that 5G is right around the corner, it’s important to remember that there is not yet a complete standard for the new technology.

The industry just took a big step on February 22 when the ITU released a draft of what it hopes is the final specification for 5G. The document is heavy in engineering detail and is not written for the layman. You will see that the draft talks about a specification for ‘IMT-2020’ which is the official name of 5G. The goal is for this draft to be accepted at a meeting of the ITU-R Study Group in November.

This latest version of the standard defines 13 metrics that are the ultimate goals for 5G. A full 5G deployment would include all of these metrics. What we know that we will see is commercial deployments from vendors claiming to have 5G, but which will actually meet only some parts of a few of these metrics. We saw this before with 4G, and the recent deployment of LTE-U is the first 4G product that actually meets most of the original 4G standard. We probably won’t see a cellular deployment that meets any of the 13 5G metrics until at least 2020, and it might be five to seven more years after that until fully compliant 5G cellular is deployed.

The metric that is probably the most interesting is the one that establishes the goal for cellular speeds. The goals of the standard are 100 Mbps download and 50 Mbps upload. Hopefully this puts to bed the exaggerated press articles that keep talking about gigabit cellphones. And even should the technology meet these target speeds, in real life deployment the average user is probably only going to receive half those speeds due to the fact that cellular speeds decrease rapidly with distance from a cell tower. Somebody standing right next to a cell tower might get 100 Mbps, but even as close as a mile away the speeds will be considerably less.

Interestingly, these speed goals are not much faster than is being realized by LTE-U today. But the new 5G standard should provide for more stable and guaranteed data connections. The standard is for a 5G cell site to be able to connect to up to 1 million devices per square kilometer (a little more than a third of a square mile). This, plus several other metrics, ought to result in stable 5G cellular connections – which is quite different than what we are used to with 4G connections. The real goal of the 5G standard is to provide connections to piles of IoT devices.

The other big improvement over 4G are the expectations for latency. Today’s 4G connections have data latencies as high as 20 ms, which accounts for most problems in loading web pages or watching video on cellphones. The new standard is 4 ms latency, which would improve cellular latency to around the same level that we see today on fiber connections. The new 5G standard for handing off calls between adjoining cell sites is 0 ms, or zero delay.

The standard increases the demand potential capacity of cell sites and provides a goal for the ability of a cell site to process peak data rates of 20 Gbps down and 10 Gbps up. Of course, that means bringing a lot more bandwidth to cell towers and only extremely busy urban towers will ever need that much capacity. Today the majority of fiber-fed cell towers are fed with 1 GB backbones that are used to satisfy upload and download combined. We are seeing cellular carriers inquiring about 10 GB backbones, and we need a lot more growth to meet the capacity built into the standard.

There are a number of other standards. Included is a standard requiring greater energy efficiency, which ought to help save on handset batteries – the new standard allows for handsets to go to ‘sleep’ when not in use. There is a standard for peak spectral efficiency which would enable 5G to much better utilize existing spectrum. There are also specifications for mobility that extend the goal to be able to work with vehicles going as fast as 500 kilometers per hour – meaning high speed trains.

Altogether the 5G standard improves almost every aspect of cellular technology. It calls for more robust cell sites, improved quality of the data connections to devices, lower energy requirements and more efficient hand-offs. But interestingly, contrary to the industry hype, it does not call for gigantic increases of cellular handset data speeds compared to a fully-compliant 4G network. The real improvements from 5G are to make sure that people can get connections at busy cell sites while also providing for huge numbers of connections to smart cars and IoT devices. A 5G connection is going to feel faster because you ought to almost always be able to make a 5G connection, even in busy locations, and that the connection will have low latency and be stable, even in moving vehicles. It will be a noticeable improvement.

Time for a New Telecom Act, Part 2

FCC_New_LogoYesterday’s blog postulated that we would see a new telecom act this year from Congress. That blog looked at what was accomplished by the last Telecommunications Act of 1996. Today I’m looking ahead at the issues that a new Act needs to address.

Last week we learned more about how the process will probably work. A new telecom act would likely be spearheaded by the Energy and Commerce Subcommittee on Communications and Technology. Last week Rep. Marsha Blackburn, head of that committee, told the press that she favored giving the new FCC a shot at fixing the things under its purview before the House would tackle a new Act. The FCC doesn’t have the authority to make many of the needed changes in telecom regulation, but it does have considerable power. Anyway, this probably means a new act is at least a year away.

Here are some of the things that I think the FCC and Congress need to address to modernize telecom:

Need for More Spectrum. It’s becoming clear that a lot of big ISPs are thinking of deploying 5Gn and various other millimeter wave technologies. The FCC needs to continue to open up more spectrum for broadband. There is still a lot of spectrum has been reserved for government use and there needs to be more attempts to share frequency when possible. There also needs to be a fresh look taken at how frequency is used. Historically many bands of frequency had narrow channels aimed at accommodating voice traffic or a single channel of television. From an engineering perspective we can get a lot more out of spectrum if we can make wider channels in the spectrum bands that are already in use.

Tackling Cybersecurity. 2016 was a year when security breaches led the industry news weekly. There is no easy fix for security issues, but there are big steps that can be taken. For example, we are flooding the world with IoT devices that are easily hacked and which can now be used to launch coordinated denial of service attacks. With Congressional backing the FCC could create standards to make IoT devices more secure. The government will never make us free from hacking, but there are a lot of sensible standards and fixes needed for IoT devices.

Expanding Access to Fast Broadband. As somebody who works regularly in rural America I know that lack of broadband there is now one of the biggest problems identified by rural households. We need to find ways to get good broadband to more places, and we have to do this smartly by building infrastructure that will last for decades. We’ve already seen how not to do this with the CAF II program that is being used to expand DSL and LTE wireless – two technologies that are already inadequate today.

Unless we see that fiber is built everywhere this is going to be an ongoing major issue. For example, if we fix broadband for those that have none but ignore the bigger swathe of the country that has only marginally acceptable broadband today, we will be back in a decade looking at how to fix broadband in those places.

We also need rules that unleashes anybody willing to spend money on fiber. I see numerous rural counties and towns that are ready to spring for bond issues to get fiber. We need rules that allow anybody willing to invest in fiber be able to do so – be that local governments, electric cooperatives, rural telcos or anybody else.

Infrastructure Issues. There are still a lot of infrastructure roadblocks to deploying fiber. We have never done a good job of fulfilling the mandate from the 1996 Act to provide access to poles and conduit. And we are now looking at deploying a fiber-fed wireless network that is going to mean bringing both fiber and power to buildings, rooftops, poles and other infrastructure. We need to find a way to get this done without also trampling over the legitimate concerns of local jurisdictions. For example, the FCC can’t just demand that cities allow free and quick fiber construction if that means digging up newly paved streets or overburdening poles – we need to find rules that work. And we need to do a much better job of this than we have done so far.

Programming. It’s now clear that online video content is competitive alternative to traditional cable TV. We need rules that unleash cable companies and anybody else to sell programming that people really want to buy. That means stepping away from the current rigid cable rules that mandate the giant channel lineups. Companies need to be free to create programming bundles that people want to buy. This might mean allowing a la carte programming. And there must be rules that require content providers to sell to everybody in an unbiased manner.

I don’t know how many of these big issues the current FCC is going to be willing to tackle. It seems like a lot of their agenda for the first six months will be to undo things ordered by the previous FCC. While I understand the desire to mold the FCC to the political persuasion of whatever party is in power, most of the issues on my list above are not partisan. They are just things that we all need to solve if we are to have a telecom infrastructure that serves us all well.

Regulating the IoT

Nest_Diamond_ThermostatThe FCC has joined other government agencies and private organizations that are concerned about the lack of security with the Internet of Things. The agency issued a 50-page research paper that discussed the issue and came to some troubling conclusions.

From the report: The large and diverse number of IoT vendors, who are driven by competition to keep prices low, hinders coordinated efforts to build security by design into the IoT on a voluntary basis. Left unchecked, the growing IoT widens the gap between the ideal investment from the commercial point of view and from society’s view.

That’s not nearly as strident as the sentiment expressed by most industry experts who understand that most IoT device makers look at security only as an afterthought. It’s been demonstrated repeatedly that almost every IoT device on the market can be hacked, often quite easily. There are exceptions, but a large percentage of devices have little or no defense against hacking.

The Department of Homeland Security is also looking at IoT and issued a set of guidelines they want to the industry to adopt. DHS believes that unprotected IoT devices are a national security threat. We now saw good evidence of this last month after massive denial of service attacks were launched from security cameras and home appliances. The DHS guidelines suggest some common sense requirements like allowing devices to have unique passwords and allowing IoT devices to receive needed software updates.

The Federal Trade Commission is also looking at IoT security issues. The agency recently announced a $25,000 prize to anybody who could offer a security solution for dealing with outdated software in IoT devices.

The Department of Commerce also recently issued IoT guidelines, but the guidelines seem to be aimed internally at the agency and not at the wider world.

This all raises the question of who should be regulating IoT? Right now the answer is nobody – there is no agency that has clear jurisdiction to impose any requirements on the IoT industry. And that is because such authority can only be granted by Congress. We’ve seen this same thing happen many times in the last fifty years as new technologies spring into existence that don’t fit neatly into any existing jurisdictional bucket.

The closest process we have to what is needed to regulate at least part of the IoT today is the way the FCC certifies new wireless and other telecom devices. Most people don’t realize it, but all phones and many other kinds of telecom gear undergo vigorous testing at the FCC to make the sure the devices do what they say they do and to make sure that they won’t interfere with the rest of the world. We need a similar process to tst and certify IoT devices because we can’t ever just take the IoT manufacturers’ words that their devices meet and standards that are developed.

But the FCC today has zero authority to regulate the IoT. For now they have created the ability to regulate ISPs through Title II regulations – but that is expected to be reversed or watered down soon. But even that authority doesn’t give them any jurisdiction over the IoT. Like many technologies, the IoT is something new that doesn’t fit into any existing regulatory framework.

It’s not really comforting, but there are a bunch of other new industries with the same situation. There is no agency that has any clear regulatory authority over driverless cars. Nobody has any real authority to regulate artificial intelligence. There are only very minimal regulations for gene-splicing.

I think most of us believe that some level of regulation is good for these big society-changing technologies. Certainly if nobody regulates the IoT we will have disaster after disaster from misuse of the technology. I hope we don’t wait too long to tackle this until it’s too late and there are billions of poorly manufactured IoT devices in the world that can’t be fixed.

The Internet of Everywhere

tostitos-logoForget the Internet of Things. That is already passé and I saw something yesterday that made me realize we have now moved on to the Internet of Everywhere.

Tostitos has put out a special ‘party bag’ of chips for the SuperBowl. The bag contains a chip and a tiny sensor that can detect traces of alcohol on your breath when you breathe on it. If you test as intoxicated the bag will light up red and flash “Don’t Drink and Drive.” But that’s only the beginning. If you set off the red flash you can tap the bag against your smartphone and it will automatically call Uber and give you a $10 discount on your ride.

This is obviously a super-cool marketing idea and I expect the company to sell lots of bags of chips and will get a lot of positive press. And I would expect a lot of people will strive to make the bag flash red. But this demonstrates how cheap computer chips have become when a company can design a campaign using millions of chips in throwaway bags for a one-time promotion. This goes to show how amazingly small sensors have become that this bag can give you a mini-breathalyzer. I’m sure the test is not super-accurate, but the very fact that it can do this and still be affordable is amazing.

Engineers have been predicting this sort of technology for a few years. For example, there are now chips that can be printed onto human skin and can act as a keypad for your smartphone. We are not far away from having chips printed on every grocery item in the store, which will simplify checkout and will fully automate inventory control. With cheap chips we can literally sprinkle sensors throughout a farm field to cheaply monitor for the localized need for water, fertilizer or the presence of pests.

The real Internet of Things isn’t going to be unleashed until we can develop affordable swarms of sensors and also provide a way for them to communicate with each other. Today the IoT is being used mainly to monitor factory production and in homes for alarm monitoring and other similar functions. But the revolutionary value of IoT will come when it can grow to be the Internet of Everywhere.

Then we can have constant monitors inside our blood stream to sense for diseases and to fight them off early. We can monitor sensitive environmental areas to protect endangered wildlife. We can monitor our homes to a degree never done before – want to know if a mouse just snuck in – done!

There have been a lot of breakthroughs in creating small, low-power sensors. But the real challenge is still to find a way to communicate easily and reliably with a cloud of sensors. We are not going to be able to create a WiFi path with a thousand different home sensors but will need some sort of mesh technology that can first collect and make sense of what the sensors are telling us.

But I have no doubt that if a potato chip bag can tell me if I’ve had too much to drink and can then call for a ride to take me home, that we are making great progress.

And as I write this blog I’m sitting here thinking of if only I could show this bag to one of my long-passed grandparents. What would they ever make of this flashing chip bag, of my smartphone and of Uber? But then again, perhaps their biggest question might first be, “What is a Tostito?”

2017 Technology Trends

Alexander_Crystal_SeerI usually take a look once a year at the technology trends that will be affecting the coming year. There have been so many other topics of interest lately that I didn’t quite get around to this by the end of last year. But here are the trends that I think will be the most noticeable and influential in 2017:

The Hackers are Winning. Possibly the biggest news all year will be continued security breaches that show that, for now, the hackers are winning. The traditional ways of securing data behind firewalls is clearly not effective and firms from the biggest with the most sophisticated security to the simplest small businesses are getting hacked – and sometimes the simplest methods of hacking (such as phishing for passwords) are still being effective.

These things run in cycles and there will be new solutions tried to stop hacking. The most interesting trend I see is to get away from storing data in huge data bases (which is what hackers are looking for) and instead distributing that data in such a way that there is nothing worth stealing even after a hacker gets inside the firewall.

We Will Start Talking to Our Devices. This has already begun, but this is the year when a lot of us will make the change and start routinely talking to our computer and smart devices. My home has started to embrace this and we have different devices using Apple’s Siri, Microsoft’s Cortana and Amazon’s Alexa. My daughter has made the full transition and now talks-to-text instead of screen typing, but us oldsters are catching up fast.

Machine Learning Breakthroughs will Accelerate. We saw some amazing breakthroughs with machine learning in 2016. A computer beat the world Go champion. Google translate can now accurately translate between a number of languages. Just this last week a computer was taught to play poker and was playing at championship level within a day. It’s now clear that computers can master complex tasks.

The numerous breakthroughs this year will come as a result of having the AI platforms at Google, IBM and others available for anybody to use. Companies will harness this capability to use AI to tackle hundreds of new complex tasks this year and the average person will begin to encounter AI platforms in their daily life.

Software Instead of Hardware. We have clearly entered another age of software. For several decades hardware was king and companies were constantly updating computers, routers, switches and other electronics to get faster processing speeds and more capability. The big players in the tech industry were companies like Cisco that made the boxes.

But now companies are using generic hardware in the cloud and are looking for new solutions through better software rather than through sheer computing power.

Finally a Start of Telepresence. We’ve had a few unsuccessful shots at telepresence in our past. It started a long time ago with the AT&T video phone. But then we tried using expensive video conference equipment and it was generally too expensive and cumbersome to be widely used. For a while there was a shot at using Skype for teleconferencing, but the quality of the connections often left a lot to be desired.

I think this year we will see some new commercial vendors offering a more affordable and easier to use teleconferencing platform that is in the cloud and that will be aimed at business users. I know I will be glad not to have to get on a plane for a short meeting somewhere.

IoT Technology Will Start Being in Everything. But for most of us, at least for now it won’t change our lives much. I’m really having a hard time thinking I want a smart refrigerator, stove, washing machine, mattress, or blender. But those are all coming, like it or not.

There will be More Press on Hype than on Reality. Even though there will be amazing new things happening, we will still see more press on technologies that are not here yet rather than those that are. So expect mountains of articles on 5G, self-driving cars and virtual reality. But you will see fewer articles on the real achievements, such as talking about how a company reduced paperwork 50% by using AI or how the average business person saved a few trips due to telepresence.