Virtual Currency is "Currency," U.S. Treasury Decides

The U.S. Treasury has decided to apply  money laundering rules to "virtual currencies" such as "bitcoin." 

The move illustrates a principle. Very often, new Internet-based alternatives to legacy products and processes get created.

For a time, those innovations are ignored. As they start to become more significant, a regulatory rule tends to emerge, namely that if something "walks like a duck, and quacks like a duck, it is a duck."

In other words, the new form of a legacy product or process or function comes under the same regulatory framework as the original product or function. Virtual currency has gotten to that point.

The other observation is that new IP-based or Internet-based alternatives to legacy ways of doing things often are based on arbitrage of some sort. That typically allows competitors to get started. But the arbitrage opportunity rarely lasts. 

Regulators tend to move to level the playing field, in regulatory terms. And competitors respond. 

The Treasury says money-laundering rules apply to 'virtual currencies.'


The move means that firms that issue or exchange online "cash" will now be regulated in a similar manner as traditional money-order providers such as Western Union Co.

As a practical matter, that will mean more costs, as suppliers would have new bookkeeping requirements and mandatory reporting for transactions of more than $10,000.

HBO Go a High Speed Access "Enhanced Service?"

Broadband Internet service providers always are looking for ways to enhance their services and add value, to avoid a "commodity" approach. Could HBO GO, a streaming service sold by HBO, be such an example of a value-added feature?

It wouldn't be easy, as HBO's important cable, telco and satellite video distributors would not necessarily take kindly to HBO essentially making an end run around them. 

HBO's "HBO GO" online streaming service presently is available only to subscribers to video entertainment services who also buy HBO. 

But HBO continues to talk about the possibility it could be sold, perhaps as a feature of a high-speed access service, to customers who buy voice or broadband access from a  partner, but do not buy a video service. 

It would be a delicate balancing act, and it remains unclear whether the business model actually would work, HBO executives are careful to point out. 

HBO now is talking about an incremental fee of $10 to $15 on top of the customer's high speed access fee, for example. 

By extension, where ISPs have sold security services as an add-on to their access services, perhaps one day streaming video will be another type of add-on feature. 

Each Generation of Mobile Networks Has Required More Backhaul

There’s a very simple reason mobile backhaul demand is growing. By 2017, U.S. mobile data consumption will grow by 11 times the 2012 volume. The other issue is a change in network architecture. With each generation of mobile networks, the number of cells required to cover any area has grown.

That order of magnitude increase will create a market for consumer, enterprise and carrier small cells of about 21 million units, according to researchers at iGR.

What that could mean for mobile backhaul is fairly clear. The number of outdoor small cell backhaul connections deployed by service providers  is forecast by Infonetics to grow more than 100-fold from 2012 to 2016, according to Infonetics Research.

So an order of magnitude increase in mobile bandwidth consumption will lead to two orders of magnitude growth of service provider small cell sites.

What already seems clear is that many of those sites will require wireless backhaul. Smaller, cheaper radios will be needed. But lower cost backhaul connections also will be crucial. In some cases that will mean using consumer grade or business grade digital subscriber line or cable modem connections.

In many other cases unlicensed or licensed radio spectrum will be the connections of choice.

LTE Device Sales Grow 151% in 4Q 2012

Sales of 4G LTE devices were up 151 percent in the fourth quarter of 2012, according to Infonetics Research.

Infonetics expects the number of global mobile broadband subscribers (phone and mobile Internet dongles) to grow from 1.2 billion in 2012 to nearly three billion by 2017. 

Regulating IP Communications is Like Fighting the Last War

It often is said that generals always are ready to fight the last war, especially if it was a lost war. It's catchy, and probably wrong, but you get the point: it is awfully easy to view the future through the lens of the past.

So it also is easy to argue that it is time to stop obsessing over legacy voice regulation at a time when that part of the business actually is "dying."

More than 40 percent of U.S. homes have abandoned their landline phone service in favor of cable, VoIP and mobile.

By the end of 2013, according to USTelecom, less than 30 percent of U.S. homes will rely on a wired connection as their primary telephone service. 

Mobile service providers already are trying to get ahead of the game as well. AT&T, Verizon Wireless (and likely T-Mobile USA, soon) already have moved to a preferred retail packaging that bundles unlimited domestic calling and text messaging with a variable bucket of data usage that drives most of the account revenue.

They are doing so to protect voice and messaging revenues that are expected to begin a long, steady decline.

That is not to say every actor in the communications ecosystem will be happy about a rapid transition to all-IP communications and a new regulatory framework.

But the point is clear enough: we would be wasting time heavily regulating a service that is in"sunset" mode. We essentially made a similar, if smaller mistake when creating the Telecommunications act of 1996. The whole idea was to shake up the voice business.

The whole effort missed the fact that the Internet, mobile and IP communications were about to displace huge chunks of the old voice business.  The principle should now be clear: don't spend lots of time and effort "regulating" a service that is not driving communications in the 21st century. 

Email Isn't Dead Yet

There are three times as many email accounts as Twitter and Facebook accounts combined, according to Wrike.  And email represents 38.5 percent of mobile time spent on the Internet.

What is SDN Good For?

At least in some quarters, we are in a growing hype cycle related to software defined networks. As I simplistically understand it, SDN is about separating the "control plane" from the "data plane." 

In a probably over-simplistic way, that means putting intelligence in a headend or central office location, while using much-simpler, cheaper devices "out in the network" that only have to deal with "data," while the centralized controller does the computation that formerly was "out in the network."

The broad analogy will be familiar to those who once worked with "client-server" computing architectures. It isn't a case of "mainframe-dumb terminal" models, because the SDN clients are not "dumb" devices. But the big computation loads are handled centrally (control plane) while the many distributed data plane devices can work fast because they don't have to deal with local computing chores, and just handle the data.

As we typically do, there will be years of wrangling over "what SDN" really is, and how it is implemented. There will be many attempts to graft SDN onto the existing base of platforms that actually have intelligent devices scattered all over the network.

What probably will be lost is the "so what" part of the discussion, for service providers or their customers. 

Most lost in the discussion will be the end user benefit. But some might argue that's what we really should be talking about. 

It is perhaps not required that SDN be used to provide a user-defined set of policies relating to use of bandwidth. That could logically be provided other ways, including the use of intelligent devices scattered throughout the network.

But it might arguably be much easier, much faster, more dynamic and more affordable to supply end-user define policies on an SDN network than it is today. 

For service providers the advantages might be even simpler. SDN might enable "bandwidth on demand" in a reliable, robust, affordable way. 

But all that will likely be lost in the wave of hype we are about to start hearing.