Will 28 GHz Work for Consumer Gigabit Access?

“Will it work?” is a question more executives are going to be looking at, where it comes to fixed wireless platforms for Internet access. Technology issues (coverage, rain fade, interference) are important, as always.

Just as important are the payback questions: can the new networks deliver enough bandwidth, far enough, to be a functional substitute for fiber access, at prices consumers will pay?

Executives have been asking these sorts of questions for decades.

If you have been around long enough, you have seem several iterations of the “fixed wireless is the answer” for access operations, for a number of potential audiences and customer segments, in a number of different settings.

The rise of competition in the long distance voice communications business was pioneered by Microwave Communications Inc. (MCI), which used point-to-point microwave to compete with the AT&T system in the 1980s.

Also in the 1980s, point-to-point microwave was seen as a platform for educational TV. The MMDS bands (2.5 GHz to 2.7 GHz), also originally licensed for educational TV, were repurposed for delivery of multichannel television subscriptions. Now those bands are available for mobile communications.  

Sprint is a major holder of former MMDS spectrum, for example.

Fixed wireless now is enjoying something of a renaissance, as firms including Google, Facebook, Verizon and AT&T now are testing new forms of fixed wireless, including but not limited to use of new 5G spectrum, and also millimeter wave bands.

The attractions are the same as ever: fixed wireless promises lower deployment costs and access to additional customer locations that otherwise would lack a payback model.

That is especially important for fixed network providers faced with higher levels of competition, and therefore lower potential addressable market, higher risks of stranded investment and growing demands for consumer bandwidth at gigabit speeds.

The value is highest for providers not using the cable TV hybrid fiber coax platform, which can reach gigabit speeds on already-deployed platforms.

Some tests suggest signal propagation at 28 GHz will not be as big a problem as many fear.

In fact, the LMDS band has been available for decades, originally as a platform for TV distribution, and later viewed as a platform for high-bandwidth communications for business customers in urban markets.

What remains unknown is how much propagation distances might change as 28 GHZ is adapted for small cell network architectures, instead of point-to-point links. In an earlier period, reach of 1.5 miles was routine for point-to-point links, and distances up to three to five miles sometimes were possible.

In a new small cell deployment, transmitting at lower power, distances of 1,000 meters (about 0.6 miles) might be reasonable.

We do not have all the answers, yet. What we do know is that reasonable people believe technology advances will offer a better solution than possible in the past, just at a point when gigabit speeds are market necessities, and deployment costs are more crucial than ever.

High Speed Access Top of Amenities List for Renters, Study Finds

High speed access is among the top-two amenities for an apartment rental, a study by RVA for the FTTH Council suggests. Both potential renters and property owners rank high speed access at the top of a list of amenities, along with in-unit washers and dryers.

The study provides “direct evidence that satisfaction with broadband correlates with overall MDU property satisfaction itself.”

As always is the case with arguments and beliefs about the role of Internet access as a driver of economic growth or social well-being, correlation is not necessarily causation, a fact briefly noted by the study.

But “causation is not proven,” the study says.

Though we always act as though high speed access matters for economic activity, learning and social well-being, about all we really can say is that there is a correlation. We cannot prove causation.

Nearly 40% of All Internet Users are Members of LinkedIn

Time will tell whether Microsoft can spin value out of its LinkedIn acquisition. But LinkedIn's reach is impressive: nearly 40 percent of all Internet users appear to be members of LinkedIn, according to GlobalWebIndex. 

iPhone Prices Could Rise $60 to $80 for a "U.S. Made" Device

source: MIT Technology Review

Domestic production of iPhones with simple U.S. assembly could add $30 to $40 to the retail cost of devices built and sold in the United States, an analysis by MIT Technology Review suggests. If component parts also could be built domestically, retail prices could rise another $30 to $40.

Complete domestic sourcing is impossible, since the component rare earth elements are not found in the United States. The bottom line: if an iPhone were made of as much domestic components as possible, and fully assembled in the United States, an iPhone might cost $60 to $80 more than at present.

Smart Cities Proposal Shows How Hard it is To Envision, Much Less Create, Any Part of a Smart City

Denver’s proposal to the  U.S. Department of Transportation as part of its Smart City Challenge might show why smart city programs are such complicated undertakings, under the best of circumstances. The DoT program will award one U.S. city about $40 million for a smart city project, with an expected award of up to $10 million also provided by Vulcan.

In fact, it probably is a bit of a misnomer to talk of “smart cities.” Instead, there are lot of potential ways intelligence, big data and sensor networks can actually produce valuable outcomes.

But those real outcomes are going to be few and far between for some time, because the infrastructures do not yet exist.

What Denver wants to do first is “establish a robust data management and sharing platform that will connect disparate data sets from multiple agencies.”

That information will be made available in the form of mobile apps and at kiosks, integrating information about  the city’s five car sharing and three ride sharing companies with the bicycle program and the city bus and rail services.

Denver also proposes to electrify taxi and City vehicle fleets and introduce wireless charging (including for transit buses). Useful, but not necessarily “smart.”

The proposed project also will test autonomous vehicles, introducing autonomous elements to fleet and transit vehicles while testing autonomous vehicle business models. Also useful, but not something that will affect consumers.

Denver proposes an integrated data system that would draw real-time information from many sources, providing a detailed picture of travel through the city.

That, in turn, is supposed to support programs that give residents and commuters access to more transportation options, initially. Useful, but essentially an “uber app” (in the sense of amalgamating and integrating other exists information sources, not in the sense of the ride-sharing app).

Eventually, the information system is seen as supporting “smart vehicles” and autonomous vehicles.  to the street grid and to each other, helping to pave the way for self-driving cars. Again, useful, but not something that will be seen or touched by citizens and users.

Some elements focus squarely on making it easier for residents of low-income neighborhoods — especially those without credit cards or smartphones — to connect with ride-sharing services such as Lyft, check out B-cycle bikes or find other ways to fill in transit gaps.

There will be some visible changes: charging stations and information kiosks. Lots of sensors likely will be deployed to gather and update the information base. But most consumers will “see and use” a new transportation app.

The project would convert a significant percentage of the city’s fleet vehicles to electric power. That leads to a greener city, but is it necessarily a “smart city” development?

More electric vehicle charging stations would be added. An additional 15 miles of new bike lanes would be added per year. Both good things, one might argue. But hardly “smart.”

Many of the other outcomes are process related, such as creating a policy and regulatory environment inviting for automated vehicles, or create plans for an 80 percent reduction of greenhouse gas emissions by 2050, supporting efforts to increase bike and pedestrian commuter mode share to 15 percent by 2020, or reduce single-occupant vehicle mode share to 60 percent by 2020.

The project also implements a safety program to reduce and ultimately eliminate vehicle-related crashes, injuries and fatalities.

The point is that the “smart” part of the projects involve collecting and making information available.

Most of the other activities are not necessarily “smart,” but green. There is nothing wrong with that.  But it does suggest how hard it will be to create even one element of a smart city (in this case, smart transportation).

AT&T Will Likely Have to Boost FTTH Investments to Meet FCC Requirements

At some point soon, AT&T likely will have to hike spending on fiber to home passings if it is to satisfy a Federal Communications Commission condition that is part of the FCC's approval of AT&T’s purchase of DirecTV.

The approval includes a requirement for AT&T to add 12.5 million fiber to premise locations and 13 million fixed wireless connections.

The fiber to customer deployments are supposed to happen over a four-year period, including about one million by the end of 2016.

Some question whether that is going to happen, and how soon, given fixed network capital investment of about $2 billion a year at the moment.

In addition to boosting capital spending, AT&T might be banking on the ability to build more affordably than was the case when Verizon Communications installed most of its fiber to home networks.

Indeed, Verizon’s unexpected decision to deploy FiOS in at least some neighborhoods in Boston suggests something has changed in the perceived business model.

Perhaps one key element is the difference between cost to “pass a location” and “cost to connect a customer.” AT&T could pass many more homes than it “connects,” as perhaps half the total cost of activating a customer is related to installing drops and network interface units for each paying customer.

The amount of deployed capital therefore includes a fixed element (fiber pass a location) and a variable component (cost to activate a location).

Forced to predict, some of us would argue that many more passings will be covered than “connected,” as initial take rates for consumer optical fiber connections can be as low as 20 percent in the first year.

So, of 100 locations passed, about 20 will require additional capital to activate. Assuming new deployments are targeted neighborhood by neighborhood, where propensity to buy is the highest, the amount of stranded capital is reduced.

Back in 2008, it might have cost $3,800 just to pass a location. Now it might cost $600 or less per passing. But you can see the reason for skepticism in some quarters.

It might cost $600 million to pass a million homes, at $600 per passing. At $500 per passing, it still costs $500 million to pass a million homes.

Using the $500 per passing figure, AT&T would have to invest at least $1 billion in capital to pass two million homes. On an annual fixed network capital budget of $2 billion, that suggests AT&T might be able to add about two million passings a year.

That works out to a total of about eight million over four years, short of the total of 12.5 over four years.

So, yes, one might argue, capital investment would have to climb beyond $2 billion a year to satisfy the FCC requirements.

App Store, Google Play to Boost App Provider Revenue Share to 85%

source: Nielsen

Driven by marketing concerns, both App Store and Google Play are poised to raise the share of revenue going to their app store partners. Apple plans to boost app provider share of revenue from 70 percent to 85 percent, if an app can maintain a subscription from a customer for at least a year.

Google Play also is said to be planning an increase in app provider share up to 85 percent.

Apple’s move seems driven, in part, by a new focus on growing subscription revenues. Google likely is moving more to keep pace with the App Store. Both, in doing so, will strengthen their dominance of the app store markets.

source: Wall Street Journal

Growing competition from Amazon likely also is a factor. But the shift of app revenue to developers will likely increase developer commitment to both platforms.

The new revenue splits might be especially interesting for content providers, especially streaming video providers. Sales of streaming content subscriptions is becoming more important for content owners and distributors.