Google Wants to Test Millimeter Radio Systems

Given its commercial Google Fiber service, as well as Wi-Fi networks at other venues, plus Project Loon tests, and its ownership of an unmanned aerial vehicle company, all of which deal with ways of providing Internet access, it might not be totally surprising, or even unexpected, that Google wants to test millimeter wave radio access systems as well.

Google has asked the U.S. Federal Communications Commission for permission to conduct tests in California across different high-frequency spectrum bands, including millimeter-wave systems operating in the 71 GHz to 76 GHz band and the 81 GHz to 86 GHz range.

Those bands have not been used for communications purposes in the past.

Google also has asked to test systems in the 5.8 GHz band as well, at three sites in the San Francisco Bay Area, including one in San Mateo county and two locations a half-mile apart which appear to be on Google’s Mountain View, California campus, according to Reuters.

Historically, the millimeter bands have not been so useful for communications purposes because of distance limitations and the requirement for line-of-sight paths. That has meant millimeter communications have been practical for point-to-point backhaul connections.

Rain fade and other signal attenuation issues have limited theoretical reach to a kilometer or less.

In the United States, the 38.6 GHz to 40.0 GHz band is used for licensed high-speed microwave data links, and the 60 GHz band can be used for unlicensed short range (1.7 km) data links.

The 71 GHz to 76 GHz, 81 GHz to 86 GHz and 92 GHz to 95 GHz bands are also used for point-to-point communication links.

The upcoming Wi-Fi standard IEEE 802.11ad will run on the 60 GHz (V band) spectrum with data transfer rates of up to 7 Gbps, and might be properly considered a local distribution platform (as a local area network technology), rather than a local access (connection between a place and the wide area network) platform.

The issue is how much can be done, using antenna arrays and spatial division, for example, to create an Internet access capability, beyond point-to-point backhaul.

All of that exploration by Google, and growing efforts by Facebook, does raise the question of vertical integration, to some extent. Google Fiber already creates a vertically-integrated operation that combines access, managed apps and then, in a less direct way, Internet apps.

That somewhat resembles the way telcos or cable TV companies, TV broadcasters and radio broadcasters earlier integrated access and apps.

Apple is another firm with potentially similar interests, though coming at the issue as a supplier of managed apps (iTunes, App Store) and devices. Some have suggested there could come a day when Apple might want to package apps, devices and access.

All that illustrates what might be an obvious point: it arguably is easier for tier one app or device suppliers to add access, than it is for tier one access providers to add devices and apps.

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Will Apple Pay be a Mobile Payments Breakthrough?

With Apple’s Apple Pay launch, set to go live October 20, 2014, we might finally get an inkling of whether contactless mobile payments can become a relatively common form of retail payment, outside the confines of Starbucks locations.

Apple Pay offers an easy, secure and private way to pay using Touch ID on iPhone 6  and iPhone 6 Plus devices.

Apple Pay also will be enabled on  iPad Air 2 and iPad mini 3 tablets as well.

If security is an issue, Apple Pay is designed to protect the user’s personal information and overcome that objection.

Apple Pay doesn’t collect any transaction information that can be tied back to a user and payment transactions are between the user, the merchant and the user’s bank.

Apple doesn’t collect purchase history, so when a user is shopping in a store or restaurant Apple doesn’t know what a user bought, where the user bought it or how much the user paid for it.

Actual card numbers are not stored on the device, either. Instead, a unique Device Account Number is created, encrypted and stored in the Secure Element of the device.

The Device Account Number in the Secure Element is walled off from iOS and not backed up to iCloud, either.

Apple Pay supports credit and debit cards from the three major payment networks, American Express, MasterCard and Visa, issued by the top US banks.

In addition to American Express, Bank of America, Capital One Bank, Chase, Citi, Wells Fargo and others, who announced support in September, more than 500 new banks from across the country have signed on to Apple Pay.

Users can make purchases in stores and within apps, with credit cards issued by many of the leading banks nationwide, which make up 83 percent of the credit card purchase volume in the United States.

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In addition to the 262 Apple retail stores in the US, availability from leading retailers at launch include: Aéropostale, American Eagle Outfitters, Babies”R”Us, BJ’s Wholesale Club, Bloomingdale’s, Champs Sports, Chevron and Texaco retail stores including ExtraMile, Disney Store, Duane Reade, Footaction, Foot Locker, House of Hoops by Foot Locker, Kids Foot Locker, Lady Foot Locker, Macy’s, McDonald’s, Nike, Office Depot, Panera Bread, Petco, RadioShack, RUN by Foot Locker, SIX:02, Sports Authority, SUBWAY, Toys”R”Us, Unleashed by Petco, Walgreens, Wegmans and Whole Foods Market. In addition, many others will add support this year, such as Anthropologie, Free People, Sephora, Staples, Urban Outfitters, Walt Disney Parks and Resorts.

Apps with the ability to use Apple Pay at launch include: Apple Store app, Chairish, Fancy, Groupon, HotelTonight, Houzz, Instacart, Lyft, OpenTable, Panera Bread, Spring, Staples, Target and Uber. Many more will support Apple Pay by the end of this year with popular apps such as Airbnb, Disney Store, Eventbrite, JackThreads, Levi’s® Stadium by VenueNext, Sephora, Starbucks, StubHub, Ticketmaster and Tickets.com, among others.

As might be expected after several years of consumer exposure to the idea of contactless payments, awareness no longer is the biggest barrier. That includes both efforts to commercialize mobile payments, as well as to promote use of contactless payment cards.

A study conducted for Visa recently found that 45 percent of Internet users in France who owned a contactless bank card had already used it.

About 25 percent of respondents said they were ready to pay this way.

Contactless payment cards might allow users to complete transactions nearly twice as fast as traditional payment methods.

When asked about the main advantage of completing a transaction with such a device—an open-ended question with no prompted responses—nearly half of France’s web users mentioned contactless payments’ speediness.

No other benefit was cited by more than 15 percent of respondents.

In principle, use of a mobile phone for contactless payment is functionally equivalent to using a contactless payment card.

Do Mobile Usage Caps Really Block App Development?

Do high prices for mobile Internet access, or limited usage caps, really block a cycle of virtuous app development? Some think so.

“While fees remain high, the virtuous cycle of development and user deployment that drives the demand for bandwidth can’t get started,” says Mark Pesce, a contributor to The Register. “Killer mobile apps never make it through the development process.”

Maybe not. Smartphones are to some extent content consumption devices, and also content creation devices, to the extent that taking photos and videos and sharing them is an act of content creation.

In 2011, for example, video entertainment represented 42 percent of all mobile Internet data consumption, according to Allot Communications.

File sharing represented 26 percent of mobile Internet data bandwidth.  Web browsing represented 24 percent of bandwidth consumption from mobile devices.

Moreover, Internet traffic is shifting to devices other than PCs. Over half of all IP traffic will originate with non-PC devices by 2018. By 2018 the non-PC share of total IP traffic will grow to 57 percent, according to Cisco.

Traffic from wireless and mobile devices will exceed traffic from wired devices by 2018, as well, Cisco predicts. What that suggests is that many of the activities and apps people use will shift from PCs to mobiles.

That means consumption of entertainment video. By 2018, global IP video traffic will be 79 percent of all consumer Internet traffic.

That does not include video exchanged through peer-to-peer (P2P) file sharing. Adding in P2P video, all forms of video (TV, video on demand, Internet, and P2P) will be in the range of 80 to 90 percent of global consumer traffic by 2018.

The point is that bandwidth, as such, is not a barrier to app development or innovation. People are choosing to consume video, at least so far the heaviest bandwidth consumer, and that drives bandwidth demand.

If developers and business strategists had been able to come up with big new apps that use as much bandwidth as video, and if people really wanted to use those apps, they could.

Sure, bandwidth and access speed so far in excess of current app requirements should lead to creation of apps and features that use lots of bandwidth.

Whether that results in lots of innovation or not is hard to say.

When computing cycles got cheap, software developers often just wrote what some might call “sloppy code” and created “bloatware.”

In the earlier days, coding had to be economical because computing resources were relatively expensive. These days, coding efficiency might be nice, but is often unnecessary. People can “waste cycles.”

It is hard to argue that lack of bandwidth (in the form of caps) or access speeds really are a major barrier to app development in developed markets.

But compelling apps and business models that require lots of bandwidth have been relatively few, beyond entertainment video.

So some might argue that human ingenuity and user demand are the key barriers, not speeds and feeds. Faster networks and devices are nice. But, so far, the new mass apps requiring lots of bandwidth and usage caps are pretty “dumb.”

As some of us might be tempted to say, “all this work, all this capability and power and we use it to watch television.” Really?

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CBS Joins HBO in Over the Top Video Streaming Market

The crack in the over the top video streaming market just widened a bit more. CBS Corporation has launched CBS All Access, its new over the top subscription video service, following the announcement by HBO earlier in the week that it is launching its own over the top streaming service.

CBS All Access offers subscribers thousands of episodes from the current season, previous seasons and classic shows on demand, as well as the ability to stream local CBS Television stations live in 14 of the largest U.S. markets at launch.

CBS All Access is available at CBS.com and on mobile devices through the CBS App for iOS and Android.

CBS All Access will be available on other major connected devices in the coming months.

For $5.99 per month, CBS All Access includes the full current seasons of 15 primetime shows with episodes available the day after they air.

Oddly enough, as more programmers launch their own over the top streaming services, consumers will have more choice, and also face more more potential hassles.

Already, most Netflix customers also buy a linear video subscription. And some consumers might already buy a few over the top video services, as well. That potentially will create a fragmentation issue, where multiple subscriptions are necessary.

So, as more channels launch their own streaming offers, a new problem is going to develop.

One advantage of the linear video subscription model is that it bundles channels and genres, so customers do not have to buy discrete channels, one by one. That also is the downside, as users complain that they are forced to buy networks and channels they do not want to watch.

Ironically, end user hassles will grow directly as each channel makes it own over the top offers available. Inevitably, demand for a bundled solution will grow again.

Still, lighter users may well benefit. Heavy users might continue to find a linear subscription, with over the top access as a feature, still makes better sense.

The first new crack in the streaming market was caused by HBO, long expected to take the lead in transitioning to a full streaming capability, among traditional cable channels.

The leading subscription services already in the market, including Netflix, Amazon Prime and others, have emphasized movie content. In a real sense, HBO itself relies substantially on movie content, though it long has emphasized its original series.

HBO always has been sold as a “stand-alone” product, separate from the advertising-supported channels and networks that are part of standard subscription video packages.

For that reason, HBO has less to lose than the ad-supported channels by offering its content both as part of a linear subscription video package, and as a streaming service.

That is not to say risks are absent, or negligible. It isn’t clear how many incremental subscribers would buy a streaming HBO service if they did not also have to buy a linear video service first.

Nor is it clear how HBO’s current distribution partners will react.

But the big new developments are over the top offerings from providers of live television, such as CBS, the other broadcast TV providers, and then the ad-supported “cable channels, since much movie content already is available from the likes of Netflix or Amazon Prime.

The CBS service also includes the ability to live stream local CBS stations in 14 of the largest markets at launch, with more to be added as affiliates join the new service.

Full past seasons of eight major current series, including “The Good Wife,” “Blue Bloods” and “Survivor” also are included.

CBS All Access also offers more than 5,000 episodes of CBS classics, including every episode of “Star Trek,” “Cheers,” “MacGyver,” “Twin Peaks” and “CSI:Miami.”

Subscribers also will be able to view the Grammy Awards, Academy of Country Music Awards and the Victoria’s Secret Fashion Show, CBS says.

“Everything that we’re seeing is completely consistent with the whole society, not only the U.S., but around the world is moving to Internet video and Internet television,” Netflix CEO Reed Hastings has said.

“We saw Starz a week ago announced that they are doing an Internet video service; we saw HBO; perhaps all the other providers over the coming weeks,” Hastings said. “And so think of all the big networks are moving to Internet video and it’s just becoming a very large opportunity.”

How much more growth can Netflix expect in its most-mature markets? Extrapolating from recent comments by Reed Hastings, Netflix CEO, about double the number of subscribers it already has gotten.

If Netflix has about 50.65 million subscribers, with 72 percent of that in the U.S. market, then Netflix has about 36.47 million subscribers.

If Netflix really is in the middle of the product life cycle “S curve,” then Netflix might expect to add another 36.5 million U.S. subscriptions until it reaches market saturation.

But tomorrow’s market now is starting to become more crowded. Now that HBO, CBS and Starz have made OTT moves, others will follow.

Just how fast the cracks cause the dam to crumble is not clear. But a reasonable observer would have reasoned that a long period of gestation ultimately would culminate in an inflection point where consumer behavior could change quite quickly.

Maybe we haven’t reached the inflection point, yet. But that moment is approaching.

Why Common Carrier Regulation is Such a Bad Idea Now

source: ITU

One of the ironies of the debate over how to best regulate Internet access services is the call for utility style common carrier regulation of the industry, something that arguably could only be argued by observers who really do not remember what monopoly telecommunications was really like.

As the old adage goes, "if you do not know your history, you are doomed to repeat it."

Those who call for a return to common carrier regulation simply do not remember, or have not studied, what end user value, choices, prices and features were like, in the monopoly era. 

According to virtually any analysis, global investment and consumer benefit have improved since the 1980s shift to privatization and competition.

source: Management Information Systems

For example, since 1981, when long distance competition began to take hold in the U.S. market, long distance calling within the continental United States decreased 95 percent.

Since 1999, after the Telecommunications Act of 1996 was passed, business single-line voice prices have dropped 67 percent. Since 1999, T-1 prices dropped 88 percent.

Since the refrain often is heard that U.S. Internet access prices are “too high,” one might say that claim is only possible because “price per Mbps” trends in the U.S. market are ignored.

In the mobile segment, the effective price per megabyte of Internet access has declined from 47 cents per megabyte in the third quarter of  2008 to about 5 cents per megabyte in the fourth quarter of 2010, about an 89 percent decrease.

Likewise, the cost of a text message dropped from about six cents a message in 2005 to about one cent a message in 2010.

On the wholesale side of the business, Internet transit prices declined from about $1200 per Mbps in 1998 to about $0.94 in 2014.

At the same time, end user bandwidth has grown about 50 percent a year.

At the same time, though retail high speed access prices in developed countries have shrunk slightly, as a percentage of gross national income (2.5 percent in 2008 to 1.7 percent in 2012), the effective price per Mbps has declined substantially.  

As is true for many products related to computing, cost might not change much from year to year, but features, processing speed and memory grow at about 60 percent a year.

From 1995 to 2003, for example, the cost of a kilobit per second of internet access fell from about $1.50 per kilobit to about two cents per kilobit.

The point is that calls for a return to utility regulation (“common carrier”) would jeopardize such achievements. Only people who haven’t lived through deregulation and the advent of competition would think common carrier will lead to similar boosts in capacity and declines in cost.

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For Massachusetts Town, 2 Bad Choices for Entertainment Video Service?

There is some irony in a recent city council vote to reject transfer of a cable TV franchise from

Charter Communications to Comcast. For starters, the council vote is not binding. Second, the rejection itself is only to allow two more weeks for Comcast to address council concerns.

The irony is that, on the most-recent rankings of customer satisfaction by the American Customer Satisfaction Index, a national cross-industry measure of customer satisfaction in the United States, Charter and Comcast have identical scores of 60 on the ACSI consumer satisfaction index. Only Time Warner Cable, with a score of 56, ranks lower.

Among the various industries tracked by the ACSI, only the Internet service provider industry has worse overall scores. Video subscription service ranks next to last out of all industries monitored by ACSI.

“Customer satisfaction is deteriorating for all of the largest pay TV providers,” ACSI has said. To be sure, there are nuances.

Consumers are much more dissatisfied with cable TV service (average score of 60) than fiber optic and satellite service (average score of 68).

Though both companies drop in customer satisfaction, DIRECTV (-4 percent) and AT&T (-3 percent) are tied for the lead with ACSI scores of 69.

Verizon Communications FiOS (68) and DISH Network (67) follow.

DISH Network may be the lowest-scoring satellite TV company, but it is better than the top-scoring cable company, Cox Communications (-3 percent to 63), according to ACSI.

Cable giants Comcast and Time Warner Cable have the most dissatisfied customers. Comcast scores fell five percent to 60, while Time Warner registered the biggest loss and plunged seven percent to 56, its lowest score ever.

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SDN, NFV Seen Boosting Revenue Potential, Reducing Capex

A survey of global service providers suggests that software defined networking and network functions virtualization is seen as valuable as a means of enhancing revenue and reducing capital cost.

A study conducted by Infonetics Research found that “service agility,” the ability to quickly add, drop and change services and applications was viewed as an enabler of revenue.

At the same time, NFV functions were seen as a way to reduce capital spending in the network.

(SDN tends to be term of art for data center personnel, NFV tends to be the term of art used by a growing number of service providers)

The study by Infonetics Research suggests 29 percent of respondents already have plans to deploy SDN or NFV solutions for mobile backhaul networks, for example, to gain flexibility and achieve cost savings.

Respondents suggest they might shift as much as 20 percent of backhaul traffic from the macrocell network to small cells of some type by 2018. And it is those new network elements where one might expect SDN or NFV deployments to happen, as adoption will not require displacing existing network elements or systems.

Ranked on a scale of one to seven, where one is “not important” and seven represents something “very important” for producing new revenue, bandwidth on demand was rated important by about 58 percent of respondents, who gave that value a score of six or seven.

And service providers see advantages in both the consumer and business customer segments.

Businesses can get more bandwidth, instantly,  if they expect an uptick in web traffic or host a videoconference or must support seasonal shopping traffic peaks.

Consumers could be offered instant “turbo” boosts when they are watching videos, and then scaling back down when they are finished.

As you would expect, service providers believe that dynamic bandwidth policies could create an opportunity for dynamic pricing, or at least dynamic provisioning of bandwidth to priority or high-value customers, as well.

About 52 percent of respondents saw that as a value provided by NFV and SDN, the study suggests.

About 48 percent of respondents saw value in “elastic service chaining,” which allows processing of different services to scale out when needed and scale back in when not required.

A similar percentage saw SDN and NFV as helpful for creating, selling and supporting virtual managed services.

Scaling services up or down quickly was rated six or seven by 86 percent of respondents asked about NFV. That was seen as an advantage for introducing new services quickly, by about 69 percent of respondents asked to rank their interest in NFV.

Also important: the ability to test new services on a small group of customers before expanding for wider commercial availability, modify the service and give it another try, or scrap services without too great an investment if it’s not working out.

Operationally, respondents valued the “global view” of the network across multi-vendor networks and multiple layers.

That is believed to offer more granular control of resources, which in turn will allow networks to be operated more efficiently, reducing capital investment.

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