Net Neutrality Thursday

This Sunday Game of Thrones starts its 7th Season.  This has reminded me of the change in tone at the FCC.  The new administration has brought a new viewpoint to the Iron Throne as it survey’s the Communications Industry Landscape.  I want to talk about a couple of the challenges along this line and then be clear about what I think should happen.

DSL, Cable and Fiber in the general case can have multiple networks running over the same medium.  They do this by using different parts of the frequency spectrum to run different services.  DSL is the simplest case of this and the spectrum from 0 – 4KHz is used for voice.  The rest of the spectrum (and it varies based on the technology) is used for Broadband Data.  This is similar to having many radio stations sharing the air to deliver different music, news and talk.  How this spectrum is used is not part of the debate.  What we will talk about is the usage of the Broadband Data part of the spectrum.  You can see immediately there are gaps in what we are going to discuss, for good or ill.

The question that really drove the Net Neutrality debate is this part about “Fast Lanes” or in Communications parlance – parts of the traffic with a Higher Quality of Service.  This is very standard throughout many networks today regardless of the technology used.  Within that Broadband Data, our current rules have that function unavailable.  That was the entire debate over the last few years.  Smaller companies argued that they might be able to deliver competent services over the network if you were allowed to pay for better service.  Note, that video in Cable and in Fiber often runs outside the Broadband Data part of the spectrum and thus can have whatever Fast Lanes it likes.  That is why you don’t see buffering from Cable offerings.

The flip side of this is whether the very high performance video – 4K and 8K TV – will actually work at scale as deployed without a “Fast Lane”.  There is no obligation for ISPs to make this work.  It will cost them a lot of money to do so at large scale so it might take a long time to get there from here.  What would be the recourse then?  We can’t make them build new networks.  It is pretty clear that nobody is about to install a 3rd or 4th competitive network (or it already would have happened).  By the way, I believe that it will be too much work to create “Fast Lanes” for it to be worth it.  Nobody is paying more without a guarantee.  And meeting a guarantee is a lot more than where we are today.

In the long run, I think the bandwidth providers will fall further and further behind their ability to apply strict rules and make them stick.  The best thing we can do on this is NOTHING.  If predatory practices happen, then crack down on them with all speed. I am much more concerned about deploying better infrastructure more broadly.

So watch Game of Thrones whether it is on your OTT service like Sling TV or on your Cox Cable and have a great day!

Jim Sackman
Focal Point Business Coaching
Business Coaching, Leadership Training, Sales Training, Strategic Planning

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Net Neutrality Friday

Well, now that the new FCC Chairman is in place we have a number of NPRMs being floated and issues being discussed.  In the grand scheme of things, I don’t think the outcome of all of this will amount to much in practice.  As you are probably aware by now, that the way I feel about the implementation of Title II for Internet Service in response to the question of Net Neutrality.  I don’t think that Service Providers have slowed the rollout of new services and networks.  I don’t think that anybody was slowed and now sped up.  I think this whole thing was much ado about nothing.

I do have one thing that troubles me with the discussions as they are held now.  The changes seem to have some political methodology in both the old FCC and the new one.  They have models of economics (which in this context is a political exercise) with more or less regulation and control.  I think that having these models is a wondrous thing but really don’t apply to this little branch of the world.  I have two reasons for saying so:  Technology and Natural Monopoly.

To address this first point, there is an ongoing evolution of technology.  If you go back 30 years, we had separate cable and phone networks and they served different purposes.  Today, these networks serve essentially the same purpose and that purpose is converging.  In the long term, there will be no residential and few business services not delivered over the Internet.  Some things will take more or less time to get there and it will be decades for this transition to complete.  Now, the only question is if there will be something to replace this connectivity that gets invented in the next 20 years or so.  It is possible, but going over the Internet is the trajectory we are on today.  There is significant change going on in the transmission world with the rise of mobile devices.  Internet connectivity of embedded devices under the IoT moniker is another change.  All of this and more will keep froth around the whole network in technology.

The second point is that there is this notion of Competition to drive behavior.  This works in some parts of our business and not in others.  Capitalism wants lots of competitors and allow them to compete with differentiation in the marketplace.  We work in a business of significant capital outlays.  Service providers work very hard to evaluate the Return on Investment on that Capital Outlay.  It has turned out to this point that we want more people choosing to deploy than are actually deploying.  I don’t think there is much we can do to change this.  If municipalities choose to add to the competition, it will likely mean the withdrawal of other Service Providers over time.  I think a more practical approach is to assume 2 – 3 (or some other low number) of providers in any area and manage to those numbers.  That is the method to overcome the Natural Monopolies in the Service Provider business.

So, I implore those in the regulatory world to be more practical and less dogmatic when they approach regulating the network.  The economy needs the network to be growing and robust, but also broadly available and affordable.  Those should be our common goals.

Jim Sackman
Focal Point Business Coaching
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Net Neutrality Friday

Last week I talked about defining a vision of what we want.  Today, I want to outline the major choices for this vision and then we can explore these choices deeper over time.

As we have looked at the problem of getting more universal broadband at higher speeds deployed, there are fundamentally two camps.  The first camp wants this to be done by increasing competition.  The second camp wants to do this with additional regulation.  In order to get additional competition, there might actually be a requirement for increased regulation.  By changing the regulatory paradigm, we might actually get increased competition.  Let me start with the additional competition camp.

You probably have read about or know some folks that want overbuilders or municipal networks to be created.  This is how people see additional competition being created.  Overbuilders are those non-incumbent providers who build their own facilities.  The largest example would be Google Fiber, but there are many regional and local examples of this type of player.  Some of these players work with or are started by the local community.  Project Utopia in Utah is such a network.  There has been mixed results with these types of networks, often blaming the incumbents for the failure of the network.

The alternative is to go back in time and create a regulated utility network like we had with Phone Service prior to the breakup of AT&T.  In this case, regulators (State PUCs and FCC) would have to build a plan to have the utility follow in order for it to operate effectively.  The challenge with this is structural.  These utilities are now mixed in with non-utility elements of the business.  The good news is that if could define a common way for this network to be built, we might be able to spur additional service competition.

I want to note that this is focused on Residential Networks.  Business networks have had both a wholesale and retail component for some time.  The question is how do you choose which path to follow.  By default, we are on the attempting to increase competition path.  I would argue that not much is going to change on this front unless people get exasperated by the cost and availability of high speed networks.  For all the complaining about this topic, it has not actually generated a lot of will for change.

So, I will expand down this branch first.  Have a great weekend!

Jim Sackman
Focal Point Business Coaching
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Net Neutrality Friday

As we enter 2017, there is a big change coming. We have a new FCC coming with the new Administration. There will probably be some changes coming with that new FCC. Instead of a 3 – 2 Majority for Democratic Politicians, it will be a 3 – 2 Republican majority. By the way, that should tell you something. Being an FCC Commissioner is a political position. In general, those folks are worried about being reelected or positioning themselves for their next appointment. We don’t have 5 Engineers there that make the best technical decisions. We have 5 Politicians that make political decisions. They are backed up by a Bureaucracy. That is called the FCC Staff and it is mostly lawyers. Very little technology understanding goes on there either, but at least they have no formal ties to parties or next steps up the political ladder. If it is not blatantly obvious, I am highly cynical when it comes to politicians. I have visited the FCC many times and have not come back with a great deal of respect.

The one thing that we do know is that President-Elect Trump has taken a negative view on the AT&T-Time Warner Deal. People in communications services probably forget that the FCC has jurisdiction over the broadcast industry as well. I am not sure if it will go through, be modified, or blocked by the FCC or DOJ.

What I hope we don’t see is a repeat of CAF and CAF-II. CAF stands for the Connect America Funds and was intended to help get us to Universal Broadband coverage. We have allocated Billions of dollars and essentially nothing happened. There were some networks built but in the grand scheme of things we have not seen the kind of gains on this.

I have recently run into the second push I have seen for Open Access, particularly funded by Municipalities. This time it comes from the MEF (Metro Ethernet Forum). One of the problems with Forums like this is that they try to keep going after they have won. They want this notion of services over Ethernet instead of over the Public Internet. For residential services, I think this is a failed approach equivalent to the old walled garden services of the feature phone era of cell phones. That ship has sailed and we now have completely viable OTT (Over The Top) video services on the public Internet including Netflix, Hulu, Sling TV and many others. That kind of approach is a step into the past and I think it is a bad idea. The MEF should probably just throw a victory celebration and declare itself defunct. The former CEO of Vinci Systems had an ATM concentrator company that he exited out of cleanly as ATM died. There was no bankruptcy and all the employees were laid off with severance. Now that is a clean death for an organization that has lived past its useful life. The MEF should do the same. It created standards, promoted them and got them adopted by the industry. It won and that means it is done.

So, we are probably up for another eventful year. I look forward to sharing it with you!
Jim Sackman
Focal Point Business Coaching
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Net Neutrality Friday

Pretty soon the FCC will be getting some new commissioners after the election.  The big change in the past term was the imposition of Title II on Residential Broadband Access.  Anybody notice a difference?  I don’t think so, and I have considered this a big waste of time standing in the way of Universal Broadband Access.  Nothing wrong with Title II.  Just not the biggest issue.

On a more positive note, the FCC has a mixed record on mergers -, especially in cable.  Some have gone through, other’s haven’t. I think Comcast is a bit of a problem as it is the outlier owning significant amounts of content.  Allowing Comcast to get bigger worries me.  The company is by far the largest ISP in the US and has extensive media properties.  I would like to see its growth come from something other than M&A.

On the topic of cable, Adtran bought some EPON assets this week from Commscope.  That is news because Adtran is primarily a telco vendor.  They might be trying to expand into cable and this would give them an edge in.  Cable has been a relatively closed vendor community and has not really accepted telco vendors in the past.  But given the limited growth in telco access, this could be a good hedge for Adtran if it works.  The other thing to ponder is the NG-PON RFP at Verizon.  Calix and Adtran are the front runners and this could be a sign that Adtran is not counting on this deal at all.  Could it mean good news for Calix or is this independent of that decision?  Only time will tell.

I want to go back to the commentary of physical access rules.  This is super important for the 5G builds, especially if we are expecting small cells to be able to boost wireless transmission speeds.  There are 2 problems to solve.  First, where do the antennas get placed?  There are going to be a LOT of them if we are going to significantly change the speed that most of us see.  Secondly, how do wireless companies get bandwidth out to these antennas?  That depends on a lot on where you are going to put them but imagine that you might have one on every corner of a major city.  Then make it denser like say one per street light. And then you have to figure out how to get bandwidth to each of them.  This build is where I see NG-PON technology fitting at least to solve the bandwidth issue.  Now we still have construction challenges, but that is “only money”.

FYI, the EC is facing similar challenges with seeing how all this construction is going to get done by private firms.  The question I want you all to think about is as follows.  A long time ago, roads were sometimes made by private companies and they billed for usage.  Governments realized that the roads stimulated economic growth so started building them.  Are networks not our roads in the future?  Are we sure that we still want network access to be a private concern?

Have a nice weekend!

 

Jim Sackman

Focal Point Business Coaching

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Net Neutrality Friday

There have been rumors floating around about cutbacks and potential freezes of Google Fiber. The company has announced that it is not moving forward in some parts of the business until it has had a chance to understand and integrate Fixed Wireless as an alternative last mile architecture.

Separately, Google is trying to get Nashville to loosen up the rules for utility pole attachment. This is all part of this whole picture and I want to talk a bit today about what Google is facing.

When you want to use the utility easements that a municipality has, there are rules. These rules are different for every community. Sometimes there are height restrictions. Sometimes you have to put shrubs around structures to hide them. Wireless antennas have to look like trees or other natural elements. There might be coverage obligations. In other words, you can’t just cherry pick the nice neighborhoods and deliver service. You have to do it to all of them. When Google Fiber started, it was trying to work around all of these challenges. It was attempting to use its cachet to get cities to waive many of the social obligations that other service providers have to abide by. You can imagine that these workarounds did not make the other service providers happy.

This is only going to get worse. The problem is coming with 5G Wireless technology and small wireless cells. You have to remember Shannon and Nyquist still rule the roost in data transmission capacity. The basic concept is that the higher the Signal to Noise Ratio (SNR) in any channel the more information can be passed through it. Fiber Optics has the highest SNR, so it has the best capacity. Below Fiber you have (in order) coaxial cable, twisted pair copper, and lastly wireless. There has been a lot of work done to improve wireless capacity through smart control and use of antennas. We can’t really increase the signal more (do you really want a higher power microwave transmitter next to your brain?). So, the best thing we can do is reduce the noise. The easiest way to do this is to reduce the distance between transmitter and receiver. So, there is a lot of thinking around how to deploy smaller cell sites to provide better quality wireless coverage.

But where do you put them? I know of some work to potentially put them in street lights. But there will be a lot of work to build a bandwidth distribution network to get what we want out of this. So, expect to hear more in the future about the use of rights of way and utility easements. This will be on top of all the other things that impact how networks get built.

Have a great Labor Day Holiday!

Jim Sackman
Focal Point Business Coaching
Business Coaching, Executive Training, Sales Training, Marketing

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Net Neutrality Friday

Last week I talked about my reasoning for why I think Universal Broadband Access was a more important issue than Net Neutrality. I said that even that the phone network had eventually required Universal Service regulations to make it ubiquitous. I want to provide a bit of history here.

For most folks in my generation, AT&T was the phone company. That was not true at the time but it was for most people in the United States. What was true was that some communities did not get serviced in a timely fashion by AT&T and decided to create their own company or were serviced by other providers to build networks. Example of this would be (and these are old names) Rochester Telephone, United Telecom, and GTE. In fact, there were 1,100 or 1,200 local phone companies in the United States going back over 75 years. The vast majority of them served rural towns in the Western half of the United States. As a counter-example, Rochester Telephone served the Rochester, New York area and is now part of Frontier Communications. United Telecom ran Las Vegas and eventually became part of Sprint Local Telephone Division and is now part of Centurylink.

Many of the smaller companies still exist. Examples might be Valley Telephone in Texas or Consolidated Communication in many places in the US. Some of these companies were and are community based. They were started by the town and still really support only one town or a few towns in an area. These companies may have a few hundred or a few 10s of thousands of phone lines. There are much smaller group (like Consolidated) that are collections of these smaller companies and have 100s of thousands of phone lines. But essentially the smaller companies started because AT&T did not reach out to lots of small, out of the way communities and deliver phone service. For a long time, phone service was not mandatory so AT&T only went where it would make the most money.

In order to keep prices low for rural Americans, the US created the Universal Service Fund to help make these remote phone lines less costly to operate. I recall one line that we had that supported a cabin 80 miles from the Central Office. Imagine that line breaking and having to drive sometimes hours to figure out what was wrong to repair it.

My point in Broadband is that we have reached this kind of penetration. The large providers see no gain in expanding their broadband footprint compared to other possible investments. Small companies have great broadband networks, but very rural subscribers have few, if any options. By making Broadband a Universal Service then all Americans would get Broadband Service.

Anyway, think about the choices we have in front of us!

Jim Sackman
Focal Point Business Coaching
Business Coaching, Executive Training, Sales Training, Marketing

Change Your Business – Change Your Life!

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