It Has Taken a Couple of Decades, but Fixed Wireless is Coming Back in a Big Way

Windstream plans to expand its fixed wireless access operations in 40 U.S. markets, using 39-GHz millimeter wave spectrum, presumably for backhaul and business customer access.

Ironically, Windstream in 2008 wrote down the value of its 39 GHz spectrum holdings to zero, as part of a sale of mobile and wireless assets to AT&T Mobility.

The collapse of a millimeter-wave access services business is not terribly unusual. Whole companies (Windstar and Teligent, for example) went bankrupt after trying to build an enterprise access business using millimeter wave technology, after the passage of the Telecommunications Act of 1996.   

But times change. Platforms become more capable. Costs go down. And with coming 5G mobile networks embracing millimeter wave technology, what was a broken business model two decades ago might well become an essential underpinning of next generation networks, both mobile and fixed.

Google Fiber, Facebook, AT&T and Verizon are a few of the leading firms now developing or planning to use fixed wireless in a significant way for Internet access.

Cambridge Broadband Networks (CBNL) is providing the radios and and Straight Path Communications is supplying the spectrum licenses for the Windstream rollout.

The new technology will allow Windstream customers data speeds of up to 275 Mbps full duplex, and it also supplements Windstream's other fixed wireless access technologies that range in speed from 1 Mbps to 1 Gbps.

Windstream will deploy in seven existing markets where it currently offers fixed wireless access technology - Chicago, New York City, Boston, Cleveland, Philadelphia, Milwaukee and Little Rock  using equipment from CBNL and spectrum from Straight Path.

Windstream will also deploy CNBL equipment in 33 new markets where it will begin offering its fixed wireless technology. Those markets include Atlanta, Baltimore, Charlotte, Cincinnati, Dallas, Detroit, Kansas City, Miami, Minneapolis,Nashville, Oklahoma City, Phoenix, Richmond, San Antonio, Seattle and St. Louis.

Under the agreement, Windstream has the option of eventually expanding fixed wireless to an additional 32 markets where Straight Path owns 39 GHz spectrum.

Ericsson Not at "the Beginning of the End," CEO Insists

You can draw your own conclusions about Ericsson CEO Jan Frykhammar saying “this is absolutely not the beginning of the end for Ericsson.” Those remarks came in the context of a warning that “business result for the third quarter 2016 will be significantly lower than company expectations.”

In the first half of 2016, with demand for mobile broadband products has been negative. Sales declined by 14 percent year over year, while gross profit margin declined 34 percent.

Ericsson said “business result for the third quarter 2016 will be significantly lower than company expectations,” driven by macro-economic toughness in some markets, as well as completion of some mobile network upgrades in Europe.

Ericsson did not specifically mention competition from either Huawei or Nokia Networks, but many will say that also is part of the problem.

Metric	Q316	Q315	YoY change	Q216	QoQ change
Sales	51.1	59.2	-14%	54.1	-6%
Sales in Networks segment	23.3	28.8	-19%	26.8	-13%
Gross income	14.5	20.1	-28%	17.5	-17%
Gross margin	28.3%	33.9%	-	32.3%	-
Operating expenses	-14.1	-14.9	-6%	-14.5	-3%
Operating income	0.3	5.1	-93%	2.8	-88%
Income in Networks segment	-0.3	2.8	-109%	1.6	-116%
Operating income excluding restructuring charges	1.6	6.1	-73%	3.8	-58%

Over the past several decades, many former big brand names in telecommunications have disappeared, as the global industry has consolidated. One might point to Nortel and Lucent, for example, as the most-obvious examples.

Some seem to be thinking Ericsson could be next.

Can Connected Health Help With Widespread Pain Issues?

More than half of U.S. adults (125 million) had a musculoskeletal pain disorder in 2012, according to the U.S. Centers for Disease Control. Though it is not yet clear that connected health devices can help people manage or alleviate such pain, the wide extent of such problems suggests the potential for such innovatins.

Just over 20 percent of U.S. adults had arthritic conditions (22.1 percent) or lower back pain (20.3 percent). A smaller percentage of persons reported having non-arthritic joint pains or other joint conditions (17.5 percent) and neck pain or problems (14.3 percent).

Some 9.8 percent had sciatica issues. A significant proportion of the population reported having at least one other musculoskeletal problem that was not examined independently (28.1 percent).

Pain also is correlated with another problem, namely lack of sleep. The 2015 Sleep in America Poll found that pain is a key factor in “sleep debt:” Some 21 percent of people have experienced chronic pain and lose 42 minutes of sleep due to it; 36 percent have experience acute pain, resulting in 14 minutes of lost sleep each night.

source: Sleep Foundation

Colt Creates Multi-Carrier SDN Capability

Colt says it now can enable its customers to configure and activate Ethernet networks across service provider boundaries software defined networking capabilities very rapidly. Colt says  

collaboration with an unnamed North American partner allows Colt customers to locate a service on the Colt On Demand portal, set up a data service, run video over the connection, flex the available bandwidth and then shut the service down all within 10 minutes.

That is important when enterprises need a temporary change in bandwidth at any specific location, or when connections to new partners must be quickly adjusted. According to a recent survey, the average European enterprise uses 987 cloud services. Furthermore, the number of cloud providers grew 61 percent, year over year, according to Colt.

"Average" U.S. Internet Access Speeds are Highly Dynamic

If in the second quarter of 2016, average connection speeds in U.S. cities ranged from 17 Mbps to 24 Mbps, while Internet service providers are selling gigabit access, as well as services in the 100 Mbps to 300 Mbps range, it is obvious that most consumers are not buying either gigabit or hundreds-of-megabits services.

On the other hand, speeds are increasing rapidly. In fact, according to Okla, fixed network customers in the first half of 2016 got an average of over 50 Mbps for the first time ever.

That represents a speed improvement of more than a 40 percent since July 2015.

Similarly, mobile Internet access customers saw speeds improve by more than 30 percent since last year, with an average download speed of 19.27 Mbps in the first six months of 2016.

In other words, by some measures, mobile Internet access download speeds are as fast, or nearly as fast, as the “average” U.S. fixed network connection in at least some cities.

Just as important are speed differences between various ISPs. Where Google Fiber might offer an average speed in excess of 300 Mbps, Comcast and other cable TV ISPs might average about 50 Mbps to 45 Mbps. Telcos tend to deliver slower speeds than that, with the exception of Verizon FiOS, which has an average speed of about 50 Mbps.

source: Ookla

source: Ookla

There's a Reason You Don't Hear Specifics About Gigabit Take Rates

Back in the days when cable TV operators first were rolling out consumer Internet access at speeds of 100 Mbps, it was virtually impossible to get subscriber numbers from any of the providers, largely because take rates were low.

In the United Kingdom, then planning on upgrading consumer Internet access speeds to “superfast” 30 Mbps, officials complained about low demand. In fact, demand for 40 Mbps was less than expected.

In 2010, for example, about 40 percent of U.S. consumers were buying Internet access at about 6 Mbps.   

It is possible the same remains true for gigabit access services. No Internet service provider of any size actually releases the number of accounts, though most are happy to cite cities and neighborhoods served, or homes able to buy the service (passings).

Those are significant indicators, but still do not address the question of how many customers actually buy.  

Early in 2016, Paul de Sa, Bernstein Research equity analyst, predicted Google Fiber would reach roughly 2.4 million homes by the end of 2017.

MoffettNathanson at roughly the same time predicted that AT&T would reach 5 million "customer locations" by the end of 2017. CenturyLink estimated in late 2015 that it would have 700,000 households passed by gigabit access networks in operation by the end of 2015.

Comcast, for its part, plans to upgrade 100 percent of its consumer base to gigabit access over the next few years.

The issue will still remain the take rates.

CenturyLink executives, for example, have said that gigabit marketing primarily drives new sales of accounts buying 20 Mbps or 40 Mbps service.

It is clear that price matters. When Internet service providers drop the price enough to create a really-compelling value-price offer, consumers respond.

If ISPs do not readily announce the number of gigabit accounts they have in service, it likely is because relatively few consumers are buying those services.

Municipal gigabit access provider NextLIght expects a take rate of about 37 percent after five years, selling gigabit service at a charter rate of $50 a month ($100 a month is the standard rate).

Based on experience from other markets, NextLight will have the best chance to reach those adoption goals if it sells at the $50 price, not the the $100 price.

New Special Access Rules Could Lower Frontier Revenue Modestly

Lower price caps for special access services (“business data services”) will be the result of proposed Federal Communications Commission rules. The moves will mean lower prices for enterprises and service providers who do not own fixed network assets, and lower revenues for firms with such assets.

AT&T will suffer the most, with Verizon, CenturyLink and Frontier Communications also losing revenue.

The proposed rules call for a one-time downward adjustment of 11 percent, phased in over three years, beginning in July 2017 (three percent in year one, four percent in year two, and four percent in year three).

As always, there are trade-offs. Enterprises will get rate relief. But lower investment in new facilities will happen, says Zacks Equity Research.

Though Frontier Communications once argued the FCC rules would not affect its revenue, Frontier now estimates the rules, if implemented on July 1, 2017, will have a revenue impact of approximately $10 million in 2017, $20 million in 2018 and 2019, with subsequent annual impacts declining after that.

Some estimate the rules will reduce overall industry revenue by $1.6 billion or so, per year.

The Communications Workers of America also anticipates lower investment and lower revenue will mean lost jobs as well.

Perhaps the biggest long-term impact will be felt by cable TV operators who supply such services, as the new rules appear to bring the cable TV industry into the framework for the first time.

The FCC has received confidential information on service provider revenues, without releasing that information, so it is difficult to predict precisely how much revenue might be affected the proposed rules, beyond what Frontier estimates.

source: Bloomberg