TDS Fiberville: One More Way Google Fiber Has Changed U.S. Internet Access

TDS Telecommunications Corp. now is using a “Fiberville” concept to introduce social inducements for potential customers of its new optical fiber access network, apparently inspired by Google Fiber’s pioneering use of the “Fiberhood” concept to identify early adopter populations.

TDS is expanding its fiber access network in Concord, Tenn. and parts of Knoxville, Tenn. The Fiberville concept offers benefits for potential customers who pre-subscribe. The offers and discounts include free whole-home installation, when any neighborhood qualifies for Fiberville status.

If 15 percent of residents in a neighborhood sign up before a deadline, each of the pre-subscribed homes is eligible for a free lifetime upgrade, including either high-definition programming or Internet speed.

TDS has divided these new fiber-served areas into neighborhoods, each of which has the opportunity to become a “Fiberville” by having residents pre-register for TDS TV.

Neighborhoods with high TDS TV pre-registration rates will qualify for Fiberville status and will receive exclusive offers and discounts.

As did Google Fiber, TDS has created a web site that allows potential buyers to track their neighborhood’s progress toward Fiberville status on the new TDSfiber.com web site.

Aside from showing it is possible to use social principles to improve initial takeup of new high-speed access services, Google Fiber more importantly is likely responsible for faster and more extensive deployment of higher-speed Internet access networks by competitors.

Tizen Travails

Mobile service providers are starting to shift more marketing support to mobile operating systems other than Apple iOS or Android, trying to gain a bit more leverage over suppliers of devices using either of those two operating systems. 

Tizen, the Linus-based operating system backed by Samsung and Intel, has been considered one of the new OS alternatives in the mobile handset business, but there are some signs its backers are rethinking the value of a new operating system that has not yet attracted a wide range of application support.

These days, an OS to a great extent can be successful only to the extent it can create a robust developer community, able to supply lots of popular applications. It doesn't appear Tizen has been able to do so. 

So there is new thinking about new interest in Android, especially on Intel's part. And Firefox and Windows Phone are contending as well for what most expect will be the number-three spot in mobile operating system share. 

"Law of Internet Bandwidth" Has Since 1998 Suggested 1 Gbps by 2020

In April 5, 1998, Jakob Nielsen projected that Internet access bandwidth was on a growth path to reach 1 Gbps by 2020, growing about 50 percent a year.

Up to this point, Law of Internet Bandwidth has proven quite accurate.

Nielsen plotted access speed starting with 300 bits per second in 1984, and updated the data through 2010 when Nielsen was using a 31 Mbps cable modem service.

Extrapolating just a bit further, one reaches 1 Gbps by 2020.

EE Launches LTE, Promising 48 Mbps to 60 Mbps Speeds

EE is launching Long Term Evolution fouth generation service in twelve U.K cities on the 4th of July, 2013, at speeds EE says will at double current LTE speeds offered elsewhere in Europe, typically ranging from 24 Mbps to 30 Mbps.

That implies EE 4G network speeds of between 48 Mbps and 60 Mbps, "faster than mobile networks in the United States and Japan, and equal to the best in South Korea," EE says. 

The faster services, made possible because EE has doubled the amount of spectrum available for the 4G network, will initially be available in Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, London, Manchester and Sheffield.

EE got permission from Ofcom, the U.K. regulator, to use some existing 1,8 GHz spectrum for 4G, before other service providers are able to deploy new 2,6 GHz 4G spectrum won in the recent U.K. spectrum auctions. 

Speeds up to 300 Mbps could be possible after EE adds its new 2.6 GHz spectrum.

EE Launches LTE, Promising 48 Mbps to 60 Mbps Speeds

EE is launching Long Term Evolution fouth generation service in twelve U.K cities on the 4th of July, 2013, at speeds EE says will at double current LTE speeds offered elsewhere in Europe, typically ranging from 24 Mbps to 30 Mbps.

That implies EE 4G network speeds of between 48 Mbps and 60 Mbps, "faster than mobile networks in the United States and Japan, and equal to the best in South Korea," EE says. 

The faster services, made possible because EE has doubled the amount of spectrum available for the 4G network, will initially be available in Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, London, Manchester and Sheffield.

EE got permission from Ofcom, the U.K. regulator, to use some existing 1,8 GHz spectrum for 4G, before other service providers are able to deploy new 2,6 GHz 4G spectrum won in the recent U.K. spectrum auctions. 

Speeds up to 300 Mbps could be possible after EE adds its new 2.6 GHz spectrum.

Sometimes "Just a Little Bandwidth" is Quite Valuable

Though gigabit networks now have assumed a higher profile on policy and ISP agendas in some markets, the real challenge in many other markets is making "just a little bandwidth" available to billions of people with no Internet access. 

O3b Networks says it has successfully place four new satellites into orbit, part of a fleet of eight satellites to be placed into “medium earth” orbit. That means the satellites will not be “geosynchronous,” or constantly transmitting from a single location above the earth.

And though its marketing emphasizes "fiber" capacity arguments, no satellite fleet can match optical fiber backhaul capacity or access speed.

But that isn't really the point. In many cases, it is the ability to provide what we might call "just a little bandwidth" that is important, especially where people have no Internet access.

The advantage of the MEO approach is latency performance, since the roundtrip distance between earth stations and satellite, and back to earth, is far less than for a geosynchronous satellite. A geosynchronous satellite has 500 millisecond latency. Ob3 says it will have latency of about 150 milliseconds.

When the network is completed, O3b satellites will provide Internet backbone connectivity between 45 degrees north and 45 degrees south latitude, covering roughly 70 per cent of the world's population, especially in the global south.

The current business model calls for sales to distributors rather than end users, so O3b will be a “backhaul” provider.

As with any satellite service, aggregate bandwidth does not indicate what amount of capacity will be available to any single distributor or location. That is partly a matter of buyer desire (how much bandwidth can I afford to buy?) and transponder limits.

As one example, O3b has sold capacity to an ISP in the Democratic Republic of Congo, providing an aggregate 500 Mbps of capacity for the whole nation. What isn’t clear is whether this means 500 Mbps distributed across all potential access points, or 500 Mbps at each of the contracted distribution points.

O3b will provide higher satellite bandwidth than has been available before, and that is a good thing. But the new capability probably will get other people thinking about what else might be possible in the near term and medium term, using satellite and other network platforms.

It is in some real ways as big a challenge to get megabits to places with no access, as it is to get a gigbit to places that only have access to megabits.

Scale Matters

The telecom business no longer is thought of as a natural monopoly, but retains the characteristic of a business where economies of scale matter. Were that not the case, dozens of networks would get funding in the local access business, for example, because the business case would be robust enough to support that level of competition.

In fact, economists and policy analysts at the Phoenix Center for Advanced Legal & Economic Public Policy Studies consistently have argued that the facilities-based access business is so scale intensive that only a few providers in each market can hope to make a business out of local access.

But there now are even more reasons why scale matters in the communications business. In many markets, revenue is flat or declining. Scale means the ability to grow, when organic growth is difficult.

Scale also means the ability to achieve greater economies of operating cost and some advantages in capital cost as well.

Under those conditions, scale is even more important, as it might make the difference between profit and loss, or a bigger profit compared to a smallish level of profits.

But scale also affects a firm’s ability to create or enter new markets, or create new applications. Only a large firm can hope to create an application business with enough users to sustain a good revenue opportunity.

Smallness, in other words, works against the ability to create compelling and profitable applications and services.

Our investment thesis is simple: scale matters," said Tribune CEO Peter Liguori.

Liberty Media Corp. John Malone, likewise says "the whole name of the game in the cable business is scale."

The only issue is how the need for scale will play out in other market segments.