Actress Hedy Lamarr was Awarded a Key Patent in 1942 Paving Way for Wi-Fi

Actress Hedy Lamarr was familiar with both radio technology and the weapons industry. She had the idea of using multiple, changing frequencies to make signal sabotage harder, and referred to it as frequency hopping. We now call this spread spectrum .

Hedy Lamarr

Composer Antheil had extensive experience with the synchronization of player pianos, or pianolas. The two took inspiration from this to develop a secret communication system for the remote control of torpedoes, based on a frequency hopping mechanism that switched between 88 different frequencies. In 1942, they received a patent for this system. 

U.S. and World Internet Access Prices Have Dropped Continuously Since 2008

U.S. prices for mobile service and internet access have been dropping virtually continuously since 2000, something also a trend in the rest of the world. Since 2010 alone, U.S. fixed network internet access prices dropped 45 percent to the end of 2019, for example. 

source: Federal Reserve Bank 

One analysis of the costs of fixed network internet access conducted by the International Telecommunications Union, using the purchasing power parity method, shows that by 2016, internet access prices--adjusted for differences in local prices--actually were quite consistent across nations.

In all countries, prices hovered around a $50 a month level, after PPP adjustments. 

source: ITU

The point is that, even if nominal retail posted prices in the U.S. market seem higher than in Western Europe, Japan, South Korea or China, PPP prices in all countries are about the same. 

Policymakers typically want their citizens to have quality broadband access at affordable prices, but have the luxury of setting policy without consequences. Internet service providers face very real consequences if they guess wrong about competitor supply and consumer demand. 

As recently as 2016, for example, there were eight facilities-based mobile operators in India. In early 2020, there are just three, and many expect just two are expected to be in operation by 2021, as Vodafone Idea might simply go bankrupt. Sustainability therefore is a real ISP issue, and prices matter. But it is harder than one initially believes to determine what “price” is, in any market. 

Real Internet Access Prices are about $50 a Month, Globally

Some argue U.S. consumers suffer from high prices for internet access. It is a highly-nuanced matter, though. Some issues are methodological. To make a valid price comparison, any researcher has to choose a method--picking plans that are widespread enough to be comparable across many or most nations.

source: cable.co.uk

Then one has to adjust prices using some measure of currency conversion that accounts for relative price differences for all manner of goods and services in any particular country. The reason is that general price levels for the same products are higher or lower in different countries, across the board. 

Add to that cases where half of all purchases occur in bundles that obscure the “price” of service. 

Then there is the matter of value. Price is one thing, while typical speeds and service quality or(outage performance) are different. There is no convenient way to adjust prices to incorporate quality differences (cost per Mbps, for example).

Also, customers in different countries buy different plans. As always, the method of determining “average” matters. Median (half higher, half lower) prices can be quite different from “mean” prices (average of all plans) when plans cover a high range (high to low). 

It matters greatly which plans are most-often purchased, in other words. In the U.S. market, 60 percent to 75 percent of internet access plans are bought in a bundle, so there is no way to directly state the internet access price. Price has to be inferred. 

To my knowledge, nobody actually uses bundle prices to compare internet access prices across nations. So comparisons are made on the basis of published retail prices for stand-alone internet access. By definition, up to 75 percent of U.S. consumers do not buy internet access that way. 

So the price comparisons are made on the basis of retail tariffs alone, without considering the frequency of plan purchase. Under such conditions, all one can say is that published retail tariffs are at certain levels. That tells us nothing about which products customers actually buy, at what volume, and therefore the effective or actual purchase price.

The further nuance is that posted retail prices often are not “final prices” paid by consumers, since taxes, fees, equipment charges and so forth are included. No comparison of retail prices captures the final price. 

In the U.S. market, where 60 percent to 75 percent of all purchases are on bundle plans where price cannot be determined, prices are inferred based on allocations. The easy method is to take the total price of the bundle and then divide by the number of services in the bundle to derive an “average” price. 

There are obvious methodological issues. Video service tends to be twice as expensive as internet access. And internet access tends to be twice as expensive as voice service. So some method of weighting is required. So the cost pattern is 4:2:1. 

Consider a bundle costing $175 a month. The simple “divide total cost by number of services” method gives you a mean cost of $58 a month for each service.

That ignores the retail price differential for each service, however. Retail prices might have a pattern something like $90 for video, $50 for internet access and $30 for voice (after including taxes, fees, customer equipment rentals). So the $175-per-month bundle has video at 53 percent of total cost, internet access at about 29 percent of total cost, and voice at about 18 percent of total cost. 

So in a $175 a month package, internet access might cost about $50 a month (including taxes, fees, CPE). That is just an allocation, though. One could argue for a higher or lower price, making different assumptions about the cost of the other components. Video often represents a higher cost, voice arguably a lower cost, in many packages. 

And then one has to adjust for internet access price tiers, since faster service costs more than slower service. This deconstruction of bundle prices actually agrees with the cable.co.uk estimates. 

Those prices are not adjusted for price levels in each country, however. So comparisons often adjust for purchasing power parity, normalizing for general price level differences across countries. This look at country cost of living indexes, for example, shows areas in red that have higher living costs generally. So all prices would normally be expected to be higher in those areas. Note that these comparisons are not adjusted for purchasing power parity, though. 

source: Numbeo 

One analysis of the costs of fixed network internet access, using the purchasing power parity method, shows that by 2016, internet access prices--adjusted for differences in local prices--actually were quite consistent across nations.

In all countries, prices hovered around a $50 a month level, after PPP adjustments. 

source: ITU

The point is that, even if nominal retail posted prices in the U.S. market seem higher than in Western Europe, Japan, South Korea or China, PPP prices in all countries are about the same.

Government Broadband Policy Too Often Ignores Moore's Law

Government planners often are too optimistic about what their proposed programs can achieve. In the case of broadband, they have tended to be too modest. The U.K. government launched in 2010 an effort to enable superfast internet access across the country. Keep in mind that a year earlier, the government said it wanted a 2 Mbps minimum speed across the country. 

In 2011 the goal goal was bumped up 24 Mbps per household by about 2015. To be sure, there is a difference between a minimum floor and a maximum aspiration. But past experience with speed increases--even in 2010--should have prompted lawmakers and policymakers to aim higher. 

Speeds increase at Moore's Law rates, one can argue, at least for some suppliers, such as the cable companies. 

Comcast has doubled speed every 18 months, for example. In 2010, typical Comcast speeds already were up to 100 Mbps. Few customers bought the fastest-available service, of course. But the minimum speed of about 12 Mbps grew to about 50 Mbps by 2015. Using the Moore’s Law doubling in 18 months would have produced speeds in excess of 100 Mbps by 2015, which is what happened. 

source: Comcast

This example from the Australian National Broadband Network actually is too conservative. Extrapolating from 1985, it suggests typical internet access speeds “should” have grown from about 10 Mbps in 2009 to perhaps 100 Mbps by 2015. 

source: NBN

When at least some suppliers are doubling speeds every 18 months, most targets and goals set by government are going to be eclipsed very quickly, no matter how ambitious the goals seem at the moment.

The point is that although government goals will tend to focus on minimums, as for universal service, aspirational targets need to incorporate what we know about Moore’s Law and its application to internet access bandwidth. 

With or without any specific government policies (other than staying out of the way), typical and minimum speeds would double about every 18 months to 24 months. So, one might argue, the U.K. government goal quickly was surpassed by commercial supply that did, in fact, increase at Moore’s Law rates, as did computing.

Most rational observers would have argued that physical networks could not improve speed so fast, as labor intensive and capital intensive as outside plant remains. Perhaps few thought Moore’s Law  rates of progress were possible for outside plant. On the other hand, few probably believed Moore’s Law would apply to computing hardware, either. 

The most-startling strategic assumption ever made by Bill Gates was his belief that horrendously-expensive computing hardware would eventually be so low cost that he could build his own business on software for ubiquitous devices. .

How startling was the assumption? Consider that, In constant dollar terms, the computing power of an Apple iPad 2, when Microsoft was founded in 1975, would have cost between US$100 million and $10 billion.

source: Hamilton Project

The point is that the assumption by Gates that computing operations would be so cheap was an astounding leap. But my guess is that Gates understood Moore’s Law in a way that the rest of us did not.

Reed Hastings, Netflix founder, apparently made a similar decision. For Bill Gates, the insight that free computing would be a reality meant he should build his business on software used by computers.

Reed Hastings came to the same conclusion as he looked at bandwidth trends in terms both of capacity and prices. At a time when dial-up modems were running at 56 kbps, Hastings extrapolated from Moore's Law to understand where bandwidth would be in the future, not where it was “right now.”

“We took out our spreadsheets and we figured we’d get 14 megabits per second to the home by 2012, which turns out is about what we will get,” says Reed Hastings, Netflix CEO. “If you drag it out to 2021, we will all have a gigabit to the home." So far, internet access speeds have increased at just about those rates.

Enterprises Buy Solutions, Consumers Buy Products

Big buzzwords inevitably are misunderstood and misused. “Solution” is one such word in the software industry, used in place of “product” to emphasize the problem to be solved, rather than the means. 

One might argue that all products are, in reality, solutions to perceived problems. But most of us, as consumers, would likely agree that we tend to buy products, not solutions, where enterprises most often think about problems that are more complex, and therefore require complex "solutions."

We classically argue there is a difference between a product and a “solution.” A product is a good or service that essentially “does something,” whether the product is a screwdriver, notebook PC  or Amazon Elastic Compute Cloud. 

The distinction between product and solution arguably is most relevant for complex problems encountered by large organizations. It seems less an issue for consumer purchases, if only because most consumer outcomes--and the products that produce outcomes--are rather simple. More often than not, “solutions” are unstated and “products” are the functional definition of “the tool to solve a problem.”

A solution, some say, is the application of a product to solve a specific industry need or business problem. The difference can be subtle. Amazon Web Services offers “products” such as compute, storage, databases, security and compliance, migration, analytics, internet of things or security.

But AWS groups its “solutions” by industry vertical, including financial services; digital marketing; enterprise IT; gaming; media and entertainment. 

United Parcel Service offers many products, but groups it solutions into a few industry verticals, including automotive; industrial manufacturing; healthcare; high tech and retail.

AT&T offers a number of products, including mobility, virtual private networks, internet access, voice over IP and web conferencing and network security. But AT&T markets small business solutions including remote information technology; website and marketing; facsimile solutions; data backup and security. 

Some insist that the definition must also include “a set of related software programs and/or services that are sold as a single package.” 

The overarching point is that products represent capabilities, while solutions are products applied to solving specific business problems in particular industries. 

AppDirect provides a commerce platform that enables its customers to directly sell cloud services. Prior to using AppMarket, companies “lacked a platform to offer software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a-service (IaaS) products,”  a study by Forrester Research notes. 

So one might say the product is an online marketplace capability, while the solution is the ability to sell a variety of cloud services to small businesses from a single portal. 

AppMarket’s “solution” allows organizations to quickly launch a marketplace to sell their own services, third-party services (Microsoft, Google, Amazon Web Services) or build their own software ecosystem to sell to small businesses. 

The products include automated billing, provisioning, and subscription management, if some might say these are features of the product. That is perhaps the best illustration of the subtlety: it sometimes is hard to tell the difference between a product and a solution. 

Likewise, applications might sometimes be terms used interchangeably with products, though some would say applications are used to create products. 

Perhaps often, the key concept is that a solution creates a business outcome. Outcomes result from the application of tools or products. Or, to put it another way, customers look to buy solutions to their problems, enabled by products. Suppliers hope to sell products that are solutions to customer problems. 

If that is an unsatisfying description, it might be because it is unsatisfying. In principle, every buyer wants a “solution,” but every customer also buys specific products that hopefully will solve the problem. 

I actually buy tools (hammers and nails) which are products, not storage solutions (put up a shelf) or “display solutions” (hang a picture on the wall). Sometimes I buy tools to anticipate that they might be part of the solution to some future problem to be solved.

So, in practice, I often buy products, not solutions, even if the products eventually will be tools used to solve actual problems I encounter. Enterprise buying scenarios are much more complicated, of course. 

But is an e-commerce marketplace capability a product or a solution? Maybe it is both, at different times: a product (capability) before you buy it; a solution (business results) once you get it up and running. 

Or maybe it is simply a matter of complexity: solving many business problems requires use of many tools, capabilities and features to create a single business outcome (sales, churn reduction, incident management, regulatory compliance). 

Most consumer desired outcomes are not complex. Groceries and fast food; going to the store and having food delivered all are “solutions” to the problem of hunger. But it is fairly simple to buy products to solve such problems. 

Seeing friends and family or earning money might require transportation “solutions.” But I mostly consume products: airplane tickets, using public transportation, car purchases or rentals, using Uber or Lyft, or riding with a friend. 

Intel Announces Portfolio for 5G Network Infrastructure

Outcomes, Not Inputs, are the Point of All Advanced Technology Supply and Adoption

If you follow statistics about U.S. communications infrastructure long enough, you know that the United States rarely, if ever, is at the very top of any measure of communications performance, where that is “teledensity” (the number of phone lines compared to population) or internet access speed, adoption or low price. 

The frequent pattern has been lagging adoption followed by a swift uptake once customers figure out the value proposition, networks reach critical mass or some new use case emerges. 

Fundamentally, investment in, and usage of, advanced communications or computing really only makes a difference if it contributes to economic or social outcomes.

In fact, the assertion that the U.S. is behind, on some key measure of communications usage, has been a frequent charge. In the past, it has been argued that the United States was behind, or falling behind, for use of fixed network voice, mobile phones, smartphones, text messaging, broadband coverage, fiber to home, broadband speed or broadband price.

In fact, the “U.S. is falling behind” meme never goes away, where it comes to communications. The latest assertion in some quarters is that the United States is falling behind in 5G. That claim has been made many times in the past, and always has proven wrong.

Consider voice adoption, where the best the United States ever ranked was about 15th globally, for teledensity (people provided with phone service). A couple of thoughts are worth keeping in mind. First, large countries always move slower than small countries or city-states, simply because construction of networks takes time and lots of capital. 

With the caveat that some rural and isolated locations never got fixed network phone service, not many would seriously argue that the supply or use of fixed network voice was an issue of any serious importance for the nation as a whole, though it is an issue for rural residents who cannot buy it.

Some even have argued the United States was falling behind in spectrum auctions.  What such observations often miss is a highly dynamic environment, where apparently lagging metrics quickly are closed.

To be sure, adoption rates have sometimes lagged other regions. 

Some assertions are repeated so often they seem true. Among such statements are beliefs that U.S. internet access is slow and expensive, or that internet service providers have not managed to make gigabit speeds available on a widespread basis. In fact, gigabit coverage is about 80 percent, but take rates might be as low as two percent. 

Other statements, such as the claim that U.S. internet access prices or mobile prices are high, are not made in context, or qualified and adjusted for currency, local prices and incomes or other relevant inputs, including the comparison methodology itself. 

Both U.S. fixed network internet prices and U.S. mobile costs have dropped since 2000, for example. 

source: in2013dollars.com

source: in2013dollars.com

The latest data from Ookla’s Speedtest service shows that U.S. fixed network internet access speeds are on par with South Korea, for example, while mobile access speeds are on par with Western Europe. 

Mobile performance should change significantly, however, as upgrades to 5G using millimeter wave frequencies takes hold. Even before millimeter wave began to be used, mobile speeds were climbing. Between 2018 and 2019, for exampole, U.S. mobile speeds grew about 24 percent. 

source: Ookla Speedtest

Such metrics should always be kept in context, however. What matters with the application of technology is what impact can be wrung from the investments. Speed, coverage, latency and price do matter, but only as enablers of economic and social impact. 

source: Ookla Speedtest