Wireless Has Transformed Network Architectures, More Coming

Wireless and the internet have radically transformed access network topologies. In the past, the architecture featured a long distance (core) network, distribution networks (metro trunking network) and access networks (local loop) plus premises wiring. 

Mobile networks--depending on how one wishes to describe it--substitute a wireless access network for cables or add a wireless tail to the cabled access network. These days, the indoor private network tends to use Wi-Fi rather than cabled Ethernet. 

source: Ericsson

Wireless local loop is a concept some service providers have employed for many decades, largely as a solution for customer access in lower-density scenarios, and initially seen as a voice solution.

 Wireless internet service providers and satellite providers are other connectivity providers that have for decades used either point-to-point or point-to-multipoint microwave networks to provide communications. But many thought DECT might become a standard for wireless local loop, in the mid-1990s. 

Satellite direct has been a delivery technology since the 1980s for video and other services, including both direct to consumer and master-antenna services aimed at residential complexes. Geostationary satellites provide internet access today, while new constellations of low earth orbit satellites are likely to do so in the future, with additional use of non-traditional platforms that might include free-floating balloons or other high-altitude platform systems (HAPS).  

source: Semantic Scholar

The point is that wireless “last mile” or “first mile” approaches have become more common since the early 1980s, reaching significant adoption in the 4G era in the form of mobile internet access, sometimes as a substitute for fixed access. Many believe 5G fixed wireless will be more attractive, as it will better match cabled network speeds and prices. 

Fixed wireless based on 5G will allow new entrants such as T-Mobile to attack the home broadband market that has, up to this point, been dominated by cable TV companies. That can be quite attractive for an attacker with zero present market share. 

Fixed wireless using 5G might also provide new opportunities for existing providers where other approaches, including fiber to the home, do not seem especially attractive. 

But network architectures are affected in other ways, as well. Small cell networks extend the metro optical fiber network much deeper towards end users, creating a “fiber to the small cell” network. 

At the service level, the 5G network core being fully virtualized, network slices through the core network, terminating at wireless and mobile endpoints, represent a new level of service assurance formerly possible only with virtual private networks.

Moore's Law Matters for Rural Internet Access

At some point, Moore’s Law matters for rural internet access supply and costs. The reason is that communication networks serving low-density areas are expensive, but Moore’s Law materially reduces such costs by constantly increasing the power of computing solutions and slashing the cost of such capabilities. 

That can be seen in the cost of a transistor over time, which allows the cost of computing to decline in half every 18 months to 24 months. 

The reason we are able to use millimeter waves commercially for consumer communications is Moore’s Law, which reduced the cost of applying sophisticated signal processing so much that the formerly-unusable millimeter wave spectrum now can be used even for consumer communications and access networks. 

The Tennessee Advisory Commission on Intergovernmental Relations estimated in a 2017 report that connecting 160,000 unserved homes in areas of the state ineligible for funding through the FCC’s Connect America Fund would cost $125 million to $799 million. That works out to about $78,125 per location. Other estimates place network costs at $33,000 per customer even at 70-percent take rates. Lower take rates raise the cost per customer. 

No consumer-reaching commercial network could ever hope to break even on a network with such high costs, as even networks costing $2,500 per location often face challenging economics. 

source: NTCA

But Moore’s Law, applied to space-based network launch costs, for example, has reduced costs for low earth orbit satellites by 20-fold over the last decade. 

Moore’s Law also allows us to do sophisticated spectrum sharing and spectrum aggregation, again improving our ability to supply connectivity services at lower costs than was possible in the past. 

Moore’s Law also powers the increasing bandwidth of optical fiber and hybrid fiber coax, enables the application of artificial intelligence to voice processing and pattern recognition, all of which mean e-commerce insights and customer service capabilities grow more powerful over time. 

Moore’s Law underpins our ability to create virtualized networks that cost less to build and operate, as well. 

That is not to underestimate the importance of financial subsidies or human agency,, as in many rural areas even the most-efficient platform might fail to generate sufficient revenues to sustain operations and service. 

Lower costs per bit for mobile bandwidth as well as fixed network  capacity have been the trend for decades. Slowly, those advantages will accrue in rural areas, even if the bandwidth gap between urban and rural areas does not completely close.

India Mobile Battle Over Revenue Recalls U.S. Battle over Common Carrier Regulation

Adjusted gross revenues taxes represent four percent to eight  percent of India mobile operator gross revenue. But there had been a dispute between mobile operators and the Indian government about the definition of gross revenue, resulting in a 14-year battle that ended in 2019 when the highest Indian court upheld the government’s definition. 

source: Bloomberg

At stake is possible sustainability of Vodafone-Idea, as the firm does not generate enough cash flow to pay the owed amounts. Bharti Airtel owes a sum representing perhaps three full quarters of cash flow. The owed sums also represent something like a fifth of Airtel and Vodafone Idea debt. 

The government said AGR included all revenue, from all sources. Operators sid it applied just to connectivity revenues earned from communications service supplied to customers, and not to any other sources, such as interest income, for example. 

The disagreement is reminiscent of the distinction between regulated, rate-controlled telecom service and non-regulated services supplied by U.S. telcos. That dispute also concerned the regulation--and hence taxes upon--new services, as distinct from legacy services.

That important difference grew in 1960 as then-monopolist AT&T began to offer data processing services, with a Federal Communications Commission decision referred to as Computer I. The decision established a principle that data processing would not be regulated under common carrier rules. 

The issue was further clarified in 1979, when a regulatory distinction was drawn between “basic” service (common carrier regulation) and “enhanced” service (computing or data services, for example, which are unregulated) by the Second Computer Inquiry, generally referred to as Computer II. 

If a service provider offered a pure transmission over a path that is transparent in terms of its interaction with customer supplied information, the FCC considered this to fall into the basic service category. 

Basic service includes processing the movement of information and computer processing, which includes protocol conversion, security, and memory storage. The category of basic service is everything from "voice telephone calls" to a phone company's lease of private line service. 

If a carrier offers services over common carrier transmission facilities that employ computer processing applications that act on the format, content, code, protocol or similar aspects of the subscriber's transmitted information; provide the subscriber additional, different, or restructured information; or involve subscriber interaction with stored information, the FCC considered that to fall into the enhanced services category, not governed by common carrier rules.

EIU Finds U.S. Internet Access Prices Lowest Globally, When Compared to Incomes

Many observers believe that fixed network internet access in the United States is expensive and slow. According to the Inclusive Internet Index produced by the Economist Intelligence Unit, the U.S. market in fact has the most affordable internet access, based on retail price in relation to income. 

source: Economist Intelligence Unit

Adjusting for local purchasing power, fixed network internet access costs around $50 a month in almost every country. Adjusting for purchasing power parity normalizes internet access prices for general price level differences across countries. 

Doing so is revealing: In most countries, prices hover around a $50 a month level, after the PPP adjustments. 

source: ITU

The Inclusive Internet Index (3i), produced annually since 2017 by The Economist Intelligence Unit and commissioned by Facebook, benchmarks countries on the Internet’s availability, affordability, relevance and the readiness of people to use it. 

Among high-income nations, the United States ranks third. 

source: EIU

Spanish Internet Tends to be Symmetrical, U.S. Services are Mostly Asymmetrical

Compared to the way fixed network consumer internet access is supplied in the United States, Spanish fixed network access tends to be symmetrical. Uploading of 4K video is the most-obvious driver of need for higher upstream bandwidth. Uploading of HDTV quality video normally requires only single-digit upstream speeds.  

source: Speedtest

Videoconferencing is another consumer app that generally requires more symmetrical bandwidth as well. Gaming and e-learning applications using video arguably also increase the need for more-symmetrical bandwidth. 

source: Researchgate

That noted, downstream entertainment video is the overwhelming driver of bandwidth globally, and arguably drives the primary need for downstream bandwidth. The other issue is that access platforms traditionally have been asymetrical. Newer optical fiber to premises networks tend to feature symmetrical bandwidth. So much hinges on what sort of platform--hybrid fiber coax, mobile network or which generation of optical fiber access is deployed.

source: Cisco

5G Use Cases Mostly Will be Enterprise Driven

Enterprise applications--not consumer use cases--will drive the value of 5G, many, including Marcus Weldon, Nokia Bell Labs president, believe. He speaks about this in this Futurithmic Podcast episode 13: Waves of innovation with Marcus Weldon. 

There are both consumer and enterprise use cases, of course, but most are likely to be found in enterprise segments of the business. Consumers will in some cases benefit from faster internet access speeds or virtual reality or augmented reality. 

But except for “faster access,” most of the AR/VR use cases will be supported by enterprise business models, though consumers will be end users in many cases, as Facebook is used by consumers, but has a business-to-business revenue model. 

source: Nokia

Fixed wireless, for example, will be used to deliver consumer internet access, but provides revenue upside for service providers because it allows them to compete with cable operator services at lower cost than building fiber-to-premises networks. 

Immersive experiences will be provided by AR/VR that is a feature of some other product. 

How Fast Might Private 5G Networks be Adopted?

Some believe private 5G someday might be as common as Wi-Fi is today, the reason being that millimeter wave 5G signals will not generally be able to penetrate building walls and energy-efficient glass. 

“Buildings will have to create their own internal 5G networks because they won’t be able to get it from the outside network,” Arie Barendrecht, WiredScore CEO says. “Low-E glass is one of the best insulators from the 5G coverage, and if a building is over 15 stories, it gets worse.” 

Barendrecht thinks that in two to three years there will be an expectation from tenants that their buildings will support 5G service and speeds. 

One might suspect his forecast is too aggressive. By some estimates, Wi-Fi, which was commercially introduced in September 1999, had reached adoption of about half of U.S. homes by about 2005. The other half used Ethernet cable networks. 

Also, offloading in-building access to Wi-Fi will still be possible. And the voice default might still be to 4G, which does have (compared to 5G) much better inside signal strength. And carriers will have more incentives to support VoIP as well, taking advantage of Wi-Fi offload.

The displacement of Ethernet cabled networks by Wi-Fi, in enterprises, took at least a decade. 

source: Xirrus

Not until about 2010 or 2011 were there as many as one million public Wi-Fi hotspots globally. Some say public hotspots reached five million locations by 2013. Some argue that, by 2015,  there were 70 million public Wi-Fi hotspots in operation. 

source: Xirrus

That history suggests some circumspection about the pace at which most buildings will have private 5G networks.