Bandwidth Demand: Increasing Faster than Moore's Law

The thing about technological change is that lots can change underfoot without people really noticing it. And then some point is reached where the accumulated weight of those changes causes a tipping point. And we might be watching for such a tipping point in business broadband.

You'd be hard pressed to find much widespread evidence of the trend if you look at what small businesses are buying, but if one looks at enterprises, "T1 and DS0 already starting to go away," says Pieter Poll, Qwest chief technology officer. "More and more people are preferring metro Ethernet at the high end, so low-speed private line revenue and demand is decreasing."

At some point that will start to be a bigger, or more noticeable trend within the smaller and mid-sized business market as well, simply because the bandwidth intensity of modern business and consumer applications is increasing.

Average 2007 IP traffic was over 9,000 terrabytes a day in the consumer segment, for public Internet. The average in 2012 will be over 21,000 terrabytes a day, Poll says.

Qwest itself "sees our data networks doubling traffic every 16 months," Poll noes. "That's a faster rate of increase than Moore's Law," says Poll.

"There are just more customers, more are wireless and content also is shifting to richer media," he says.

"Our residential broadband base grows traffic 39 percent annually, no matter what size pipe they buy," Poll notes.

All of which has got Qwest's planners looking for ways to grow bandwidth faster. "We are doomed over time if bandwidth demand grows faster than Moore's Law," says Poll.

So how does Qwest do that? IP directly over optical waves, where the router and the optical transmitter are all one device. Meshing the edge devices also helps, as it reduces backbone network hops, and hence bandwidth usage.

Poll also thinks major backbone providers will start swapping fiber to gain greater topological diversity and improve protection from fiber cuts.

As for his views on where the next increment of backbone bandwidth will come, Poll notes there are some carriers wanting 40 Gbps equipment, though he personally thinks running 10 Gig E waves is more affordable. Still, "that could change soon," says Poll.

The bigger issue for him is that 40 Gbps will be stranded investment when 100 Gbps equipment is available.

"My personal feeling is that 100 Gbps is the step we want," says Poll.

Safari for PCs

As part of a recent update of my Apple iTunes software for my Windows-driven PC, I discovered that the Safari browser also was available. I suppose I didn't realize Apple was working on PC versions of Safari. I haven't had time to play with it yet.

Google's New Terrain

With the bulk of the U.S. auction for new 700-MHz spectrum now over, some observers note that Google was a big winner, though it didn't win any spectrum. Well, that's true, but so are nearly all potential or existing application or device providers.

In fact, it might be worth noting that Google's apparent strategy--to extract regulatory concessions without winning actual spectrum--illustrates the nature of the business environment Google now is entering.

Simply, to the extent that Google's financial interests now require involvement in regulated industries, it has to play the regulatory game, as do all major media and communications industries and contestants.

In the communications and "electronic media" industries, government decisions literally can create the potential for an industry to exist at all, and then dramatically affect its profit potential.

Obviously, scarce spectrum has to be allocated, either terrestrially or in space. But "smaller" decisions also can create fertile or hostile conditions for business activity. At once point early in its history, the cable industry was barred from the practice of importing broadcast TV signals from distant metropolitan areas to cablecast them in outlying areas.

Without access to those signals, there was no foundation for even rudimentary cable services. Without orbital slots, satellite providers could not create the "cable programming" industry. Without franchises, no cable operator can offer service in a city. In the early 1980s, those franchises were monopolies, and only later became non-exclusive.

Likewise, until the Telecommunications Act of 1996, it was not legal for companies to compete with the local phone companies to offer "dial tone" and other services to consumers. AT&T once was a single national monopoly provider, until the threat of a forced breakup lead to the creation of the "long distance" company AT&T and the separate local communications companies US West, Ameritech, Southwestern Bell, BellSouth, Nynex, Pacific Telesis and Bell Atlantic.

Likewise, though people might think movie studios do not have such concerns. They do. The reason movie studios may not own theater chains is because they are barred by law from doing so. The thinking originally was to prevent excessive industry concentration and monopoly.

As Google and other application providers discover their futures lie, in great part, in mobile services, they necessarily will have to participate in efforts to sway the regulatory and legislative process.

In that sense, Google, clearly a winner in the 700-MHz auctions, is starting to pay attention to the ways in which governmental regulations and statutes create, deny, enhance or limit business prospects.

The U.S. VoIP community made just such a rude discovery over the past several years as regulators and lawmakers began to take a look at VoIP, and figure out how to regulate it. Many had hoped that, as a "data" application, VoIP would be exempt from all or most regulations that apply to standard voice services.

That remains largely true for instant messaging-based, or Web site-based forms of voice. But other forms of VoIP, such as services that ultimately will replace today's "phone" services, increasingly are subject to the same sorts of regulations that govern "phone services."

Google has been spectacularly effective in its new rule as a stakeholder in the regulatory process surrounding communications. But its actions are hardly unprecedented.

Palm Centro: Major Shift to Smart Phones, Data

Smart phones do indeed drive consumer purchases of data plans, new data from Palm suggests. Palm reports that 95 percent of new Centro buyers signed up for a data plan.

More than 70 percent of Centro buyers also appear to be upgrading to a smart phone for the first time, Palm says.

Keep that up for a long enough period of time and mobile providers will discover that most users have data plans and smart phones.

Which is just what they plan.

Apple Sales Explode: It's a Cloud Computing Effect

Among the conclusions one might draw from the explosion of Apple market share in the U.S. PC market--in February 2008 Macs got 14 percent unit share and 25 percent dollar share--is that the "Web" really is becoming a computing utility. The results are drawn from a survey of buyers by NPD Group.

As more things can be done "in the cloud," the operating system of the access device matters less. To use an analogy, we aren't yet to the point of simple mobile phones, where most features except for subscriber identity are properties of the network.

We more nearly are in a position analogous to smart phones, however, where some important functionality resides locally, and much is in the network.

If you like, think about PC use pre-Web or pre-local area networks. Initially, with the exception of connection to a printer, a wide area network connection was not necessary to derive value from a PC. Later, as more PCs appeared in the workplace, it became necessary to connect PCs locally.

Operating system mattered greatly, in those applications. Once people started to interconnect over the wide area network, though, things began to change. Obviously one needed the "right" physical interface to support a dial-up modem service. But beyond that the PC operating system begins to matter less.

The wide area network is designed to work transparently to edge devices, so long as the wide area network transmission protocols and interfaces are supported.

That's what is starting to happen with computing applications and services--and video and audio plus multimedia content now are computing applications. The details of edge devices will matter less once "networked" applications take firmer hold.

To use another analogy, consider televisions. The internal details are unimportant so long as the communications interfaces are standard. A TV must tune to standard NTSC signals now, and then HDTV formats in 2009. The display technology must render those pictures properly. Other than that, the details of device operation don't matter.

That perhaps is one reason buyers now are more free to buy Macs, and abandon the Microsoft operating system: OS choices aren't so important now as more value is drawn from the network.

Pacific Crest Securities analyst Andy Hargreaves says the latest NPD results represent 60 percent Apple unit growth and 67 percent revenue growth over the same period one year ago.

At the same time, overall U.S. PC retail shipments grew just nine percent on a five percent increase in revenues.

Apple saw particular strength in notebook systems, which rose 64 percent in units and 67 percent in revenues, suggesting strong sell-through of the company's new MacBook Air, a device specifically designed to rely on the Web and Internet more extensively than a typical machine.

Apple also saw robust demand for its desktop systems, which grew 55 percent on a 68 percent increase in revenues, compared to the overall retail segment which saw unit sales decline of five percent on a two percent drop in revenues.

Of course, Apple design smarts and the spillover glow from the iPod and iPhone probably are enticing buyers who might not have considered a Mac before.

But users wouldn't be doing so unless they were convinced their computing experience won't not be disrupted unnecessarily. One reasons for that greater level of confidence is simply that much of that experience now hinges on access to the Web and Internet.

700 MHz: No Big Surprise

As most observers probably would have bet, Verizon won the C block while at&t won hundreds of local licenses to augment the 700 MHz spectrum it already owns. Those two developments arguably were the most-likely outcomes all along.

EchoStar, though, won enough E block spectrum to create a nearly-national footprint as well. What it plans to do with that spectrum isn't so clear at this point. There isn't enough spectrum in that block to run WiMAX or probably even Long Term Evolution protocols with any kind of loading.

Many argue that slice of spectrum is best suited to mobile video delivery.

31% Smart Phone Sales by 2013

The market for smartphones will grow from around 10 percent of the total handset market in 2007 to 31 percent of the market in 2013, say researchers at ABI Research.

Fueling he growth: carrier interest in boosting data revenues and the migration of advanced “smart” operating systems down into middle tier devices.