Why AT&T is Aggressive about Software Defined Networks

The cost of bandwidth on AT&T’s networks has not strictly followed the cost curve for computing or storage. Any access networking professional knows why: access networks are construction projects, bound by atoms as much as bits.

So AT&T believes there is room for improvement of about four orders of magnitude, in fact.

That is one reason why AT&T has been so aggressive about software defined networks. SDN is seen as one key tool for driving out the cost of delivering bits over AT&T networks. And AT&T estimates the savings will have huge magnitude.

Will 40% of U.S. Households Use Wireless Charging by 2020?

More than 270 million households worldwide will be using wireless charging technology by 2020, including nearly 40 percent of households in the United States and over 20 percent  in Europe, according to Juniper Research.

The primary barrier to market for wide-area charging technologies is regulatory requirements, such as the U.S.  Federal Communications Commission Code of Federal Regulations part 15, which stipulates that output from radio transmitters operating at frequencies of 45kHz and above cannot emit more than one watt of output power.

This severely limits the transmission of power over distance. For power transfer to be quick enough for most mobile computing devices, which typically charge at between 5 and 15 watts, substantially higher output power would have to be allowed.

That might be a key obstacle. The solution, of course, is not to transmit at a distance, but only in close proximity, as with charging furniture. Such limitations are one reason why Low Power Wide Area standards for Internet of Things devices will include batteries.

Which "Zero Billion Dollar Market" Strategy is Netflix Pursuing?

There are any number of ways to use the term “zero billion dollar market.”

The term can refer to any market potential less than $1 billion; a market that does not yet exist, but which can be created; or an existing market a disruptor can enter, capturing leadership of a much-smaller market.

And sometimes it is not clear which sense of the term ultimately will apply, even for successful attackers that create whole new markets. Apple often is cited as practicing the "create a market that does not yet exist" version of the strategy.

Other services, such as Skype or WhatsApp, might represent some combination of strategices--both creating a new market and cannibalizing an existing market that winds up being smaller.

So two of the ways the term of art "zero billion dollar market" is understood are negative for communications service providers. Any market smaller than $1 billion in annual revenue is too small for a tier one service provider to address. You can think of any number of products telcos have chosen not to create and sell as examples.

When products are sold through channel partners, those are examples of “zero billion dollar markets.” Service providers use channel partners because they cannot afford to sell direct, as the markets are not big enough to support the costs of selling direct.

Any disruptive attacks that shrink the size of the market likewise are unhelpful. Skype, or any other major voice over Internet Protocol app or service that is a direct or indirect substitute for carrier voice, provide examples of that.

Messaging apps such as WhatsApp provide other clear examples. Even Netflix now destroys the linear video subscription market.

Keep in mind the key distinction. In most competitive markets, contestants try and gain or hold  more market share, to build scale and thus obtain higher profit margins.

But many practitioners of the zero billion dollar market strategy are not playing that game. Instead, the objective is to essentially destroy the economics of the present business model.

Skype and messaging services give away for free what telcos try to sell. They hope to create a new business selling new or complementary products. The new revenue streams do not have to be as big as the former revenue streams. They simply have to be quite attractive for the new providers.

Skype, Netflix and WhatsApp therefore raise uncomfortable questions for access providers and incumbent Internet service providers. Those services are not trying to take market share in the legacy business. Instead, they literally destroy the existing business, allowing them to create a new one that is far smaller than the older business, but dominated by the attacker.

It isn’t yet clear which flavor of “zero billion dollar market” Netflix actually will win. Netflix clearly represents a new category that did not exist before. In that sense it is like Apple creating the iPod.

But Netflix success--and that of similar efforts to follow--also could shrink the size of today’s linear video business, making it similar to Skype or WhatsApp.

Use of over the top messaging apps is shrinking demand for text messaging services sold by carriers. Both VoIP and OTT messaging likely will wind up disrupting legacy services and creating a smaller market for voice and messaging services sold by carriers.

It is not so clear what role Netflix ultimately will represent. As it creates a new business, Netflix might also reshape what remains of the linear subscription business.

source: Portio Research, Fierce Wireless

GoGo Expects to Supply 70 Mbps Aircraft Internet Access in 2016

Gogo has received the final Supplemental Type Certificate (STC) from the U.S. Federal Communications Commission required to launch Gogo's 2Ku next generation satellite connectivity service.

The technology currently is installed on Gogo's 737-500 test plane and is now cleared for in-flight testing. Gogo expects to launch commercial service of its 2Ku technology later this year.

The 2Ku system using two phased array antennae to boost reception and therefore speed.

Seven commercial airlines have signed up for either a trial or fleet deployment of 2Ku covering more than 500 commercial aircraft.  Gogo expects to launch commercial service later this year and begin rapid installation of the backlog of 500 aircraft in 2016.

2Ku is expected to deliver peak speeds of more than 70 Mbps to the aircraft, which is more than 20 times the bandwidth provided by Gogo's first generation Air to Ground solution in the U.S.

Windstream Selling Data Center Business

In the data center business, scale matters. Even if data centers are the new central offices, in terms of aggregating edge traffic for transport across the wide area networks, smaller providers competing against Amazon Web Services, Microsoft and Google, plus other providers, will find it tough to compete.

So it is that Windstream is pondering a sale of the data center business  it purchased in 2010.

That will free up capital Windstream can deploy elsewhere, but might also dent its enterprise revenue streams. Windstream earns nearly 80 percent of its revenue from the business segment.

In its second quarter of 2015, Windstream had revenues of $1.4 billion. Consumer revenues represented just $314 million--about 22 percent--of total revenues.

Since about 2010, both Windstream and similar profile service provider Frontier Communications have earned most of their money in the business segment, despite the continuing preponderance of consumer accounts.

Cable One Doubles High Speed Access Speeds, Moving to Gigabit

Cable ONE, a quadruple-play service provider with 700,000 customers in 19 states, is doubling downstream speeds for new and existing residential high speed Internet access customers in more than 90 percent of its markets beginning October 2015.

The Streaming 50 Mbps plan will double to 100 Mbps; the 75 Mbps Premier plan will double to 150 Mbps and the 100 Mbps Ultra Plan will double to 200 Mbps.

Cable ONE will invest $67 million in 2015 on network upgrades and enhancements, a necessary step in providing gigabit service to residential customers. The company plans to announce residential gigabit markets in September 2015.

Who Can Afford to "Educate" Small Business About Value of New IT, Communications Services?

In case you needed a reminder why channels are so important for sales of information technology and communication technology products, consider new research from

Parks Associates, which looks at spending on IT and Support Services for Small Businesses.

The study finds that small and mid-sized businesses, which have between one and 250 employees, spend only $90 to $150 per month for IT services, including server maintenance, virus protection, and backup services.

“SMBs rely heavily on computing devices, but their spending on IT services, such as network security, cloud storage and IT support, has not matched this growing dependence,” said Patrice Samuels, Research Analyst at Parks Associates. “

In part, that might result from the laborious effort to communicate actual value in a sales environment where the potential buyer is quite busy, generally not so sophisticated in terms of IT knowledge, and very conscious of value and price.

SMB decision makers who are familiar with the benefits of an IT service are more than nine times more likely to subscribe than decision makers who are unfamiliar with the service, says Samuels.

The issue is whether most channel partners, indeed at such levels most mass market sales efforts, can cost effectively communicate value.

In other words, how much time can a sales associate afford to spend educating a customer who’s spending might represent $100 incremental per month?

Can a sales associate even be an effective channel, under such circumstances? There is a reason small business generally is lumped in with “mass market” by tier one service providers.

The hard reality is that no tier one service provider can afford to spend very much on “educating” buyers in that space. The other problem is that a relatively low percentage of very small business owners are highly interested in buying new IT services.