Would You Build a Municipal Broadband Network Costing $23,000 Per Passing?

If you ran an internet service provider company, and you were looking at new markets to enter, would you attack where there are two suppliers of gigabit internet access already operating, with full-city networks and prices ranging from $65 to #110 a month?

Would you see unmet demand where 84 percent of households already buy service, and service at 40 Mbps costs $45 a month; 140 Mbps costs $65 a month, 250 Mbps service costs $60 and where lower prices are available in bundles?

None of that stopped the Tallahassee city council from voting to study the feasibility of a

municipal broadband network, in a city where adoption rates already exceed 84 percent and where 19 competitors offer service.

The city early estimated it would cost $280 million to $300 million to establish a city-run broadband utility. That works out to a cost of more than $23,000 per household.

For the sake of argument, assume that network eventually got 33 percent market share. That would be capex of $69,000 per account. In other words, there is no payback, as the typical customer pays $30 a month for service.

It is hard to see how there is a payback on such an investment. Nor does there evidence of big market gaps.

Comcast sells stand-alone internet access operating at 100 Mbps for $50 a month and gigabit service for $110 a month.  CenturyLink sells 40 Mbps service for $45 a month, 140 Mbps service for $65 a month and gigabit service for $65 a month.

Economic rationality does not always win out against political rationality. Bad ideas get funded when the benefit does not outweigh the cost. But one of the council members now will rescind her "yes" vote on proceeding with the feasibility study, perhaps after realizing how big the risks were.

The city of Tallahassee provides an example of economic reality creating a brake on an almost-fanciful public policy initiative to create a municipal broadband network where there is almost no evidence of need.  

Next-Generation Networks Might Cost Less Than You Might Think

Lots of people remain concerned about the cost of building new 5G mobile networks. But capital investment plans, the way 5G is built on 4G and open, dynamic, virtualized and lower-cost platforms all combine to reduce cost.

That is important because it means our existing notions of what it costs to build an advanced next-generation platform are less than once supposed. Also, the new platforms tend to be more efficient, wringing more value out of any specific asset.

And that leads to lower service costs, lower app creation costs and potentially higher financial returns and lower cost per bit.

Consider use of existing 4G spectrum.

In all prior generations, frequency division was used to add new mobile platforms while the older platforms continued to operate. In the 5G era, time division is possible, allowing 4G spectrum to support 5G devices--using the same spectrum--as demand requires.

Discussions of spectrum sharing have so far centered on innovations such as Citizens Broadband Radio Service, where multiple license modes are available to users sharing a single block of spectrum.

That provides huge economic benefits, since new users can take advantage of new spectrum resources without the cost and complexity of migrating legacy users off those bands.

Discussions of dynamic spectrum use have centered on innovations such as TV White Spaces, where cognitive radios sense where unused spectrum is and tune to those frequencies when transmitting.

Now dynamic spectrum sharing will be used in the transition from 4G to 5G, allowing existing 4G spectrum to support 5G devices, in the existing 4G spectrum. That is one more example of the way 5G builds on 4G, as well as the growing importance of new ways of allocating spectrum that are far more efficient than past methods.

source: Ericsson

"Dynamic sharing just allows you to use the same spectrum for both LTE and (5G) NR," says Igal Elbaz, AT&T SVP.

The Ericsson Spectrum Sharing software, for example, dynamically shares spectrum between 4G and 5G within the same frequency band, based on the actual traffic demand. The solution is available on all Ericsson Radio System products shipped from 2015 onwards.

More Enterprises Adding LTE 4G for Fixed Connections

Advanced LTE and emerging 5G services are set to become bigger substitutes for fixed network access over the next three years, a survey conducted by IDC of 505 mid-size and larger enterprises with 500 to 10,000 employees suggests.

Mobile network access is increasing as enterprises connect more IoT devices, vehicles and temporary network endpoints.

On average, enterprises connect 2.7 different type of endpoints, including branch locations (77 percent), IoT devices (68 percent), fleet vehicles (51 percent) and pop-up networks (50 percent). Nearly a quarter of respondents (22 percent) are connecting all of these different endpoints.

About 62 percent of the respondents plan to increase LTE usage within their WAN in the next three years.

Gigabit LTE and 5G will increase usage, the survey suggests. Fully 90 percent of respondents say gigabit LTE and 5G would lead to increased usage.

Volumetric Video as NFL and Verizon Might Use It

There are volumetric video applications for sports-themed video games, virtual reality and possibly live sports. 

51% of Seattle Homes Can Buy Gigabit Internet Access

Residential gigabit broadband internet service is available to more than 170,000 Seattle households, according to the City of Seattle.

There are about 335,000 households in Seattle. So roughly 51 percent of homes in Seattle can buy gigabit internet access service.

Beyond that, the absolute lowest rate of buying of fixed network internet access is 93 percent of homes. Keep in mind, those are take rates, not “availability.”

source: City of Seattle

Apple Video Streaming is Not First, Apple Never is First

Apple never is first to market with any new product. It was not first in personal computers, MP3 players or music downloads, mobile phones or smartphones or tablets. Apple has not been first with video streaming services, either.

And while success is not guaranteed, Apple has the scale to make a good run at the market, which continues to face new challenges. Aside from Apple, AT&T and Disney are among the firms entering the video streaming market.

Comcast still resists. The firm has stayed away from launching its own streaming service in the past, trying to protect its legacy linear services.

Comcast now is selling Xfinity Flex, but positioning it as an “ease of use” service, not a content service in a direct sense. Xfinity Flex essentially is a navigation service for customers of Netflix, Amazon Prime, HBO or YouTube, with voice commands. It does not offer access to Comcast linear content or services of competitors such as DirecTV Now.

source: S&P Global

It is probably foolhardy to believe that Apple will not gain significant share in streaming, eventually. What remains to be seen are relative market size and market share for pre-recorded (not real time) content, compared to live streaming. Live streaming might eventually be the bigger market.  

SD-WAN Proves 4X Cheaper, While Boosting Bandwidth 4X, Says Cato Networks

MPLS was four times the cost of SD-WAN while delivering about 25 percent of SD-WAN bandwidth, say executives at Centrient Pharmaceuticals.

Centrient replaced an MPLS network with SD-WAN supplied by Cato Networks, linking headquarters in the Netherlands with nine manufacturing or office locations in China, India, Spain, Mexico and inside the Netherlands, as well as smaller offices in Egypt, Cairo, Moscow and the United States

The firm’s applications include Office 365, internet access, VoIP, SAP and other cloud-based applications using Azure.

To be sure, one issue was that the firm’s MPLS connections often ran at 6 Mbps, where the SD-WAN apps often run at 20 Mbps to 50 Mbps, when multiple local internet access connections are multiplexed.

In other cases, firms with global networks also saw an improvement in latency performance, ease of adding or dropping locations and also a reduction in cost.

The SD-WAN cost advantage, in terms of bandwidth, is stark. On the other hand, creating a new SD-WAN will increase operating costs, and requires new networking gear. Over five years, SD-WAN will, in many cases, be cheaper than an MPLS solution.

source: Netmanias