Colorado Towns and Counties Win Right to Build Their Own Broadband Networks

It is too early to know what might come next, but voters in at least seven Colorado communities--and some say as many as 43 cities or counties--on Nov. 3, 2015 opted out of state rules preventing municipalities from creating their own telecommunications networks.

That might lead some to consider building Wi-Fi access facilities, optical backbones or even considering other more direct challenges to telco and cable TV high speed access.

At the very least, the new freedoms will provide continual pressure on CenturyLink, Comcast and other firms to continue significant bandwidth investments.

Comcast, for example, already has committed to upgrade all its networks to 1 Gbps speeds in 2016, with 2-Gbps access available in perhaps 85 percent of locations.

CenturyLink already is rolling out gigabit service in a number of neighborhoods in its metro Colorado locations.

But the local governments now have the right to build and operate their own facilities, if they choose to do so.  

Useful Wisdom from "Dr. Seuss"

In the Dr. Seuss book Horton Hears a Who, Horton the elephant, splashing in a pool, hears a small speck of dust talking to him. The speck is a tiny planet, home to a community called Whoville. "A person's a person, no matter how small," the mayor of Whovillle says. Yes, indeed!

Will VoLTE Revenue Be Net "Zero"?

What are the revenue implications for service providers if two billion VoLTE (Voice over LTE) connections are in service by 2020? One possible explanation is that VoLTE will represent $100 billion in annual service revenue.

But that is hard to parse, since VoLTE in one genuine sense only represents the ability to sell mobile voice service over a fourth generation network, with native support by the 4G network. For the most part, VoLTE therefore only represents voice revenue that already had been provided using 2G or 3G platforms.

In other words, net revenue might not be much more than "zero."

“Direct revenues from VoLTE will be limited at first,” argue analysts at Juniper Research. Mobile operators initially will focus on experience and quality of service, rather than monetization.

You might say the same is true for Wi-Fi calling (VoWi-Fi). “Operators are launching the service to add value for the customers with little investment, where VoLTE is focused on operator network efficiency,” Juniper Research said.

Whether high definition voice provides a better revenue opportunity might also be questionable. The problem is that HD voice might wind up being mostly a way to compete with over the top voice apps.

If so, then is is unlikely a premium of any sort can be charged for the HD quality.

Facebook Messenger, for example, recently launched free high definition VoIP calling over mobile and Wi-Fi networks. It is tough to compete with “free,” so carrier HD voice is unlikely to represent a chance to hike prices.

In most cases, VoLTE, VoWi-Fi and HD voice are likely to be features, rather than revenue drivers.

Cloud Traffic Drives 83% of Data Center Traffic in 2019

Some trends in communications--such as the relationship between computing and communications-- are drop-dead simple. Information technology and communications have been increasingly intertwined for decades, as computing architectures have grown more distributed.

Globally, of every dollar spent on enterprise information technology spending technology, 43 cents are expended for communications services.

That also is true of consumer computing. By 2019, 55 percent of the residential Internet population will use personal cloud storage (up from 42 percent in 2014), in addition to most apps also reliant on cloud computing, according to Cisco.

To state the obvious but important fact, cloud computing requires communications. As cloud computing grows, so does demand for communications.

Annual global data center IP traffic is projected to reach 10.4 ZB by the end of 2019, up from 3.4 ZB per year in 2014. But that is not the key figure. 

Cloud traffic is key, since cloud traffic necessarily requires outside the building communications. Data center traffic often moves within a building, server to server.

Annual global cloud traffic is projected to quadruple, reaching 8.6 ZB (719 EB per month) by the end of 2019, up from 2.1 ZB per year (176 EB per month) in 2014, and is expected to account for more than 83 percent of total data center traffic by 2019.

Overall data center workloads will more than double from 2014 to 2019. Cloud workloads will more than triple over the same period, Cisco predicts.

Cloud traffic, a subset of data center traffic, is generated by cloud services accessible through the Internet from scalable, virtualized cloud data centers.

Total data center traffic includes all traffic traversing within and between data centers as well as to end users.

Some suggestions of consumer services reliance can be gleaned from the prediction that software as a service (SaaS) will be the most popular and adopted service model for public and private cloud workloads, respectively, by 2019. Those workloads are the other side of a consumer’s use of mobile and Internet applications.

By 2019, 59 percent of the total cloud workloads will be Software-as-a-Service (SaaS) workloads, up from 45 percent in 2014.

As an example, the Cisco forecast estimates that by 2017, global smartphone traffic (201 EB per year) will exceed the amount of data stored (179 EB per year) on those devices – necessitating the need for greater storage capabilities using the cloud.

Worldwide IT Spending Forecast by Sector (Billions of U.S. Dollars)
	2014	2014	2015	2015
	Spending	Growth (%)	Spending	Growth (%)
Devices	693	2.4	654	-5.7
Data Center Systems	142	1.8	136	-3.8
Enterprise Software	314	5.7	310	-1.2
IT Services	955	1.9	914	-4.3
Communications Services	1,607	0.2	1,492	-7.2
Overall IT	3,711	1.6	3,507	-5.5
Source: Gartner (June 2015)

Orange Business Services Intros Faster Business Cloud Access

A new global business-grade Internet service from Orange Business Services--Business VPN Internet Accelerate--provides access to cloud applications up to ten times faster (based on a test of the Paris-to-Singapore route).

Based on Akamai Cloud Networking, the business-grade Internet service is built on the Akamai Intelligent Platform, which includes nearly 200,000 servers across more than 110 countries and advanced optimization technologies.

Sometimes, such content delivery networks improve response time because they cache content closer to a user’s location.

source: wpmudev

Project Loon for India?

The Indian government is considering a test of Google’s Project Loon. The pilot project might also involve use of BSNL 2.6 Ghz spectrum for downlink.

Three leading mobile service providers in Indonesia, plus authorities in Sri Lanka, also are testing Project Loon as a backhaul platform.

Can mobile service providers across South Asia, Southeast Asia and Oceania get Long Term Evolution coverage at an order of magnitude lower costs by partnering with Google’s Project Loon?

Project Loon supporters believe that is possible.

In tests, Project Loon has partnered with mobile service providers with in-place LTE towers to provide backhaul to Project Loon balloons, along the 40th parallel.

At the 30th parallel, winds are easterly. Near the equator the winds are westerly. Presumably the same techniques would work at other latitudes.

By definition, some LTE tower infrastructure is required, as those towers provide uplink to the balloons.

But the balloons then provide LTE coverage directly to LTE-capable handsets. At this point, it likely makes sense for mobile service providers to source wholesale retail capacity on the balloons, which essentially substitute for fixed mobile cell sites.

The mobile service provider networks and towers, on the other hand, will provide Project Loon with backhaul.

Google says it can now deliver data at 5 Mbps to mobile phones, or 22 Mbps to fixed antennas.

Unlicensed Spectrum Sustainability Model Still Will Be an Issue in a "Shared" Environment

Use of license-exempt spectrum always has posed--and continues to represent--business model challenges. Initially, Wi-Fi mostly had an indirect business model in the consumer segment of the business.

Access to public Wi-Fi hotspots was an amenity gained from using a specific high speed access provider.

These days, public Wi-Fi plays a role on the capital investment side of the infrastructure business. Mobile service providers offload half or more of their customers usage from the core networks, slowing the rate at which core network upgrades are required.

In a coming iteration, public Wi-Fi will play a role supporting upstart mobile service providers.

Some firms have created direct revenue models by using public and amenity Wi-Fi to support enterprise and business customers.

But most services using unlicensed spectrum tend to face key business model challenges. Shared access to 3.5-GHz spectrum in the U.S market will not be exempt.

As envisioned, a formal tripartite model would be applied. Licensees would continue to be protected for the purposes the spectrum originally was intended to support.

But where surplus exists, commercial users would be allowed to have subsidiary rights to use spectrum, and likely would pay for the privilege. Where even the primary and secondary users are accommodated, opportunistic access would be allowed (on the model of Wi-Fi spectrum use, with license-exempt access, but without guarantees of quality or availability).

One might argue there is no fundamental business model issue with either primary licensed access or secondary usage. Primary licensees already have a sustainable model of some sort.

Commercial users would have to create a sustainable model. But some potential users, including cable TV companies, mobile service providers or possibly some app providers, have existing models that benefit--indirectly or indirectly--to an existing revenue model.

The traditional issue has been the sustainability of business models based strictly on opportunistic access, though. As anybody familiar with the fixed wireless business understands, lenders have been cautious about any business models founded on use of license-exempt spectrum, because there is a not a defensible “moat.”

In other words, there is no enforceable scarcity that keeps competitors out. That does not mean there are no “moats.” Geography sometimes creates potential barriers to entry. Large sports stadiums and airliners provide examples, says Armand Musey, Summit Ridge Group founder.

The other obvious potential model is a wholesale infrastructure model, which U.S. cable TV companies have suggested is a possibility for them, at least as a business model for their access facilities, which might become an attractive backhaul platform for small cell deployments, for example.

The point is that shared spectrum, as such, does not pose major unknown issues, as far as business model, for some commercial entities, especially when spectrum is used as on sub-licensed basis.

On the other hand, some traditional issues faced by small wireless Internet service providers and amenity Wi-Fi providers will remain, when opportunistic access is the platform.

Some things do seem to change.