Friday, May 25, 2018

No Demand for Gigabit?

Among the most-dangerous of statements is that something cannot be done, violates the laws of physics, costs too much, is too difficult to manage, or is not wanted by consumers or other users.

The reason such statements can be quite dangerous is that they are sometimes spectacularly wrong, in ways that dramatically affect whole indus

I can remember being at a meeting at the headquarters of the National Cable Television Association, in the earlier days of high definition television discussions, where it was proposed that a full HDTV signal could be squeezed from about 45 Mbps of raw bandwidth to the 6-MHz channelization used by the North American television industry.

The room essentially exploded, as the attendees, mostly vice presidents of engineering from the largest cable TV and broadcast firms, disagreed with the sheer physics of the proposal. Later, the executive who suggested HDTV in 6 MHz was indeed possible talked with his firm’s engineering vice president, about the the science, to reaffirm that such a thing actually could be done. “Are you sure about this?” was the question, given the magnitude of opposition.

To make a longer story short, it did prove feasible to compress a full HDTV signal into just 6 MHz of bandwidth, making for a much-easier financial transition to full HDTV broadcasting, as well as an ability for cable TV operators to support the new format.

Similarly, when the U.S. cable TV industry began to ask for analog optical transmission systems capable of carrying 20 channels of standard definition video without complicated channel-by-channel coding and decoding, a distinguished engineer from Bell Laboratories privately assured me that such a thing was in fact not possible, and that people who claimed it was possible were simply wrong.

To make a longer story short, it did indeed prove possible to take a full complement of analog video signals (40 channels, as it turned out), convert the full set of broadband signals to analog optical format, and deliver them over distances useful for cable TV purposes.

On another occasion, the vice president of one of the world’s biggest suppliers of equipment said privately that “digital subscriber line does not work” as a platform for high speed Internet access, even at relatively low speeds. Ultimately, that also proved incorrect. Over time, DSL performance was not only proven to be commercially viable, but also delivered much-faster speeds, over longer distances, as experience was gained.

The point is that when a smart, experienced, thoroughly-knowledgeable executive says that something “cannot be done,” one has to translate. What the statement means is only that, at a given point in time, before the application of effort and ingenuity, a given entity has not been able to do something.

That does not actually mean something literally “cannot be done.” Quite often, formerly impossible things actually are made possible, after dedicated investigation and development.

That applies to consumer demand for internet access, as well. It might well have been true two decades ago, or a decade ago, that there was no appreciable consumer demand for gigabit internet access, if such services could have been provided, and at retail prices those services would have cost, back then.

There was a time when the computing power (in constant dollar terms) of an Apple iPad 2, when Microsoft was founded in 1975, would have cost between US$100 million and $10 billion.

But when gigabit internet access is priced at a relatively modest premium to the standard offers (gigabit for $100, standard 200 Mbps for possibly $50 to $70), then there is much more demand.

“There is no demand for gigabit internet access” is a conditional statement. At some point, there will be lots of demand, on both mobile and fixed networks. All that has to happen is that price changes.

Comcast, for example, has increased the highest offered internet access speed at nearly Moore's Law rates. So the unstated qualifiers “at this price, at this time,” have to be kept in mind.

There will be a time, and a price, that has many, if not most, consumers buying gigabit rate internet access.

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