Fixed Networks Bore Most of the Stay-at-Home Traffic Increase, Says Ericsson

Most of the 20 percent to 100 percent increase in network traffic caused by lock down policies was handled by the fixed networks, says Ericsson. Mobile network traffic increased 10 percent to 20 percent. 

source: Ericsson

As you might expect, given the stay-at-home orders, use of some apps related to mobility saw less usage. Travel and booking app activity was down about 33 percent, while ride hailing app usage dipped a bit more than 20 percent, Ericsson says. 

Use of location apps dipped about 22 percent. Use of parking apps declined about 13 percent.

As you might also guess, use of some apps related to people staying at home grew. Remote working app usage increased about 30 percent, for example. Use of instant messaging grew about 53 percent; use of social media about 50 percent. Use of news and video apps also grew more than 40 percent. 

source: Ericsson

Rural Internet Program Politics

The U.S. Federal Communications Commission’s rural broadband funding program, the 

Rural Digital Opportunity Fund, is pretty much technology neutral. What it arguably is not so much is supplier neutral, even if such programs have become more neutral over time. 

Even if the regulations do not specify it, all rural support programs historically have favored rural fixed network telcos who are carriers of last resort. 

The assumptions for the subsidies are sound enough. Since there actually is no sustainable business case for fixed network communications in many rural areas, the only way service will be provided is by use of subsidies. 

But the need for subsidies does not, in and of itself, explain why most of the funding has traditionally gone to rural fixed network telcos, even if the obvious answer was that, in the monopoly era, there was only one firm to which such funds might have been given.

That has changed over time, as other platforms have emerged. 

When voice was the issue, mobile networks arguably would have been capable. In the broadband era, cable TV companies are obvious suppliers, and many fixed wireless or new alternatives such as low earth orbit satellite firms will eventually emerge as potential suppliers as well.

You can assume the funding decisions will not--as a political matter--be based strictly on which platforms can deliver suitable broadband access. There is a requirement to supply voice services, which many internet service providers might prefer not to do. There are some regulatory oversight conditions cable TV or other smaller independent companies might shy away from. 

And then there are the non-network issues. Most rural telcos are “significant” providers of local jobs and have significant political support in states. Nor is it clear those businesses are sustainable without direct subsidies, where others might well survive without the funds. Mobile operators, wireless ISPs and cable TV operators might have a business case without subsidies. 

Some argue the past programs have not worked, or might not actually be needed as much as often is claimed. Perhaps 60 percent of high-cost funds support corporate overhead, not the expansion of networks. And since funding is based on “high costs,” applicants have incentives to keep their costs high. 

The need for subsidies and societal value is clear enough. The politics of funding arguably are also clear. Carriers of last resort arguably will carry some political weight that is not reflected in funding criteria in a direct sense. 

Publisher or Platform? Or Both?

Some issues--including network neutrality and regulation of publishers and platforms--are nettlesome and complicated, as much as we might prefer absolute simplicity. In part, that is because new platforms and industries do not conform neatly to our prior models. 

Platforms might be likened to common carrier products: all users are treated the same way, at standard prices, terms and conditions. The platform makes publishing possible, as formal common carrier networks simply “transport” products, but do not exercise editorial control, as do publishers of newspapers, for example. 

But big content platforms no longer operate as pure platforms. They also exercise content moderation and make choices about what gets published, under the guise of community moderation. That makes them publishers more akin to newspapers or magazines. 

That is why the debate over Section 230 of the Communications Decency Act is important.  Title V of the Telecommunications Act of 1996 was intended to protect platforms from content posted by platform users, exempting the platforms from laws pertaining to other publishers. On the other hand, platforms claim the right to censor and remove content under the rubric of community standards. 

But there arguably is a crucial difference between “offensive” speech and “political” speech. Most people might agree that bans on obscenity or violence are one thing, but restrictions on clearly political speech are questionable. 

Nor is it easy to apply First Amendment protected speech rules, which classically protect speakers from government restrictions, not listeners and readers from private company restrictions. 

On the other hand, “while the First Amendment generally does not apply to private companies, the Supreme Court has held it ‘does not disable the government from taking steps to ensure that private interests not restrict’ . . . the free flow of information and ideas,”  say Adam Candeub, law professor at Michigan State University, and Mark Epstein, antitrust attorney. 

We do not yet have good models for regulating such hybrid industries. But that is likely to change, as regulation changed with the emergence of over the air broadcasting and then cable TV, with a hybrid model not fully in the realm of either common carrier nor unregulated publishing. 

As platforms become a mix of content delivery (platform) and curated and created speech (publisher), some new hybrid form of regulation is likely to emerge and evolve, given a government interest in fostering open and fair debate where it comes to political speech. That was the approach taken with broadcasting, for example. 

Less Change Than You Think, Early On; More than You Expect Later

It is not hard to find projections that the Covid-19 pandemic will create a new normal that radically reshapes key elements of life and work. One might note similar projections about 5G, artificial intelligence, virtual reality, edge computing, unmanned vehicles or internet of things. 

History and science suggest we ought to be cautious about early levels of change, but also remain open to greater than expected long term changes. 

There is a bit of business wisdom that argues we overestimate what can be done near term, but underestimate the long term impact of important technologies or trends. The reason is that so many trends are an S curve or Sigmoid function. 

Complex system learning curves are especially likely to be characterized by the sigmoid function, since complex systems require that many different processes, actions, habits,  infrastructure and incentives be aligned before an innovation can provide clear benefit. 

source: Rocrastination 

One practical implication of the S curve or Sigmoid function is that the search for the next wave of products must begin before the current wave is exhausted. John Chambers of Cisco was fond of noting the importance of catching such transitions.

source: John Lusink

Another practical implication is that we generally cannot reap the benefits of new technology immediately. A learning curve happens as firms and industries gradually learn how to use new technology to transform their core business processes. 

Video Seen as Top 5G Use Case in Enterprise; Fixed Wireless in Consumer Space

Enterprise information technology professionals widely believe video applications will be an early lead application for 5G, with 83 percent of 1,000 IT professionals surveyed by Parks Associates naming video detection and alerts as a 5G use case of interest. An equal percentage named video surveillance as a promising use case. The study was sponsored by Nokia. 

source: Nokia

A companion survey of consumers found fixed wireless cited by 76 percent of consumers as a “most appealing” use case. The consumers were surveyed in the United States, United Kingdom and South Korea. The study conducted by Parks Associates was sponsored by Nokia. 

At least in part, that might be because 41 percent of respondents believe they can buy internet access from just one service provider. Some 66 percent of respondents claiming they would subscribe to 5G FWA if it cost the same as their current broadband service and delivers the same or better performance.

source: Nokia

As always, consumer research on new products they have not used yet can be misleading. Many such surveys have consumers saying they are willing to pay more to use a proposed new product or service, with high interest in the new products. 

Actual consumer behavior can diverge significantly from survey findings, of course. But there was significant reported interest in a range of use cases, which appear to have been “prompted” choices. In other words, researchers picked the use cases and asked for opinions about the proposed use cases. 

That prompted approach also appears to have been used in the study of enterprise IT professionals. 

Mobile Teledensity is 5X Fixed Network Peak

Sometimes technology and policy changes really do have a big impact. Consider “teledensity,” measured for decades as the number of phone subscriptions for every 100 persons. Globally, teledensity rose until about 2005 globally, peaking about 2000 in the United States. Even at its peak, though, fixed network teledensity was less than 20 lines per 100 people. 

source: ITU

The technology disruption was mobile phones and networks, which rapidly shifted demand away from consumer fixed services. 

In 2020, there are about 8.3 billion mobile subscriptions in service, greater than world population. Mobile teledensity, in other words, is over 100 accounts per 100 people. 

source: World Bank

Building Networks to Handle Video Protected Experience During Pandemic

As it turns out, building access networks meant to handle entertainment video and content has other benefits, such as protecting user experience when a sudden spike in usage happens. That was not expected, back in 2009, and seems to have been a major reason why global internet access networks did not crash during the Covid-19 pandemic. 

Basically, ISPs and wide area network providers expect traffic to grow as much as 40 percent every year, and have built their networks to match. 

The other important change arguably is that lots of content, application and transaction platform firms build their own private global networks, which has the effect of adding much more capacity to the global network than would have been the case if the primary suppliers were telcos. 

In a serious pandemic, U.S. businesses, government agencies and schools could experience absenteeism (or forced dispersal of workers as precautionary measure) that could reach 50 percent or higher ranges, thereby displacing Internet access demand from normal daytime sites to homes, predicted a 2009 study by the Government Accountability Office.

The GAO expected residential internet access to be disrupted, as the networks are “not designed to handle this unexpected load.”

Of course, a pandemic did happen in 2020, did result in the shutdown of most of the economy, people did have to stay at home, away from school and work. But the feared internet access disruption never happened. 

In fact, the percentage of people required to stay at home vastly exceeded the 50 percent figure the GAO assumed. It was virtually 100 percent in most parts of the United States. But the networks proved resilient, in most parts of the globe, despite an immediate increase of internet access data volume between 30 percent and 45 percent. 

For the week of March 15 to March 21, 2020, as people were ordered to stay at home,  internet access services in 200 U.S. cities maintained service levels, though 13.5 percent of cities had seen average speed dips of 20 percent of typical ranges, according to Broadband Now. 

In late March and early April, consumer traffic was up possibly 30 percent to 40 percent in affected countries where stay at home policies were in effect. 

The reason seems to be that internet service providers have built their networks to handle ever-growing traffic volumes. Doing so meant they had headroom to handle the sudden traffic upsurge. It arguably also helped that today’s networks are built to handle video bandwidth as a routine matter. 

Video is the widely-used app that is most demanding of network bandwidth, and also drives nearly zero incremental revenue unless the ISP owns the content, which in the streaming era only applies to a few big ISPs. Even then, no ISP owns more than a fraction of all the streamed content. 

The point is that the networks must be built to handle video, and lots of it. A byproduct is that bandwidth to support work from home, email, VoIP, web content, database access and conferencing is, if not trivial, relatively easy. 

An earlier  2007 DHS study was said to “confirm that the increased traffic generated in neighborhoods during a severe pandemic is likely to exceed the capacity of the providers’ aggregation devices in metropolitan residential neighborhoods.” That has not proven to be the case. 

Notably, the GAO report said that at 40 percent of absenteeism (workers forced to stay home),  “at the 40 percent absenteeism level, the study predicted that most users within residential neighborhoods would likely experience congestion when attempting to use the Internet.” 

The Covid-19 pandemic caused close to 99 percent stay at home behavior. 

The point is that predictions always are hard to make. In this case, ISPs built robust networks that were able to handle the absolute worst case scenario for internet usage caused by a pandemic, with only a slight slowing of peak speeds. 

That is most welcome, given the dire predictions GAO issued. "Increased use of the Internet by students, teleworkers, and others during a severe pandemic is expected to create congestion in Internet access networks," GAO warned. That did not happen. 

"Localities may choose to close schools and these students, confined at home, will likely look to the Internet for entertainment, including downloading or 'streaming' videos, playing online games, and engaging in potential activities that may consume large amounts of network capacity.” That did happen, but the networks were able to handle the extra load. 

"Additionally, people who are ill or are caring for sick family members will be at home and could add to Internet traffic by accessing online sites for health, news, and other information," GAO added. That seems to have added so little additional strain it would be very hard to measure. 

"If theaters, sporting events, or other public gatherings are curtailed, use of the Internet for entertainment and information is likely to increase even more," GAO said. Indeed, people turned even more to reliance on streaming networks. 

But the networks had been built to handle that demand, so keeping up with relatively low-bandwidth work from home demand was not a problem.