How High is Home Broadband Churn?

If we can assume a monthly churn rate for home broadband of about two percent a month, annual churn could reach nearly 25 percent of the installed base. As often is the case for consumer surveys, behavior might not match stated intentions. 

source: TiVo 

Those stated intentions seem out of line with actual monthly churn rates in developed markets, which seem to hover between 0.75 percent and 1.25 percent per month. That suggests annual churn in the range of 12 percent of the installed base. \

source: Analysys Mason 

Metaverse is a Decade Away

Some technology transformations are so prodigious that it takes decades for mass adoption to happen. We might point to artificial intelligence or virtual reality as prime examples. Now we probably can add Web 3.0 and metaverse to that list. 

At a practical level, we might also point to the delay of “new use cases” developing during the 3G and 4G eras. That is likely to happen with 5G as well. Some futuristic apps predicted for 3G did not happen until 4G. Some will not happen until 5G. Likely, many will not mature until 6G. 

The simple fact is that the digital infrastructure will not support metaverse immersive apps, as envisioned, for some time. Latency performance is not there; compute density is not there; bandwidth is not there. 

In fact, it is possible to argue that metaverse is itself digital infrastructure, as much as it might also be viewed as an application supported by a range of other elements and capabilities, including web 3.0, blockchain and decentralized autonomous organizations, artificial intelligence, edge computing, fast access networks and high-performance computing. 

source: Constellation Research 

Scaling persistent, immersive, real-time computing globally to support the metaverse will require computational efficiency 1,000 times greater than today’s state of the art can offer, Intel has argued. 

To reduce latency, computing will have to move to the edge and access networks will have to be upgraded. 

All of that takes time, lots of capital investment and an evolution of business models and company cultures. Metaverse is coming, but it is not here today, and will take a decade or more to fully demonstrate its value. Major technology transformations are like that.

Web 3.0 Will Not Prevent the Rise of Powerful New Platforms

Many would argue that since Web 3.0 is the future of the internet, and since blockchain is among the key enablers of Web 3.0, that blockchain is therefore the future of the internet. We might at least agree that blockchain is part of the foundation of the future internet, as we might argue for artificial intelligence, edge computing or the metaverse. 

One of the principles of Web 3.0 is that it is more distributed, in terms of ownership of data. That is inherently part of the design of blockchain, so there is a clear logic there. Some proponents of Web 3.0 also tout some other possible advantages, including user ownership of their own data. 

Many argue that decentralization will prevent the rise of new gatekeepers that have been a criticized feature of Web 2.0. And this is the tricky part. It remains unclear whether technology decentralization necessarily leads to dispersed power within the ecosystem, or not. 

Keep in mind that the internet is, by design, similarly disaggregated. Owners of apps and services do not have to own networks to reach their users or customers. Functions within the ecosystem similarly are disaggregated. The use of layers allows a modular approach to supplying and upgrading functions. 

At least in principle, any end user can reach any other end user, so long as that is lawful. But it does not seem likely that new platforms will be prevented from arising. Though any entity can use blockchain, that does not prevent the rise of new platforms, any more than leaders can be prevented from emerging in any industry.

The existence of a public road, rail, airline or other infrastructure does not prevent the emergence of auto, airline or electrical and energy leaders. Blockchain might, in some cases, eliminate “middle man” functions for commerce, content or application supply. 

But that disintermediation does not prevent new platforms from emerging. Suppliers will still exist. And some suppliers will gain leadership of markets. Efficiency is the benefit of blockchain: it allows disintermediation.  

source: WallStreetMojo 

But disintermediation in no way prevents the rise of powerful platforms. It simply allows greater supplier efficiency. So though some believe Web 3.0 necessarily prevents the rise of centralized power on the internet, some will disagree. In any market, for any product or service, leaders emerge. The databases, currencies and technologies we use do not seem to affect such processes.

Is Growth an Unsolvable Problem for Service Providers?

Virtually all observers praise AT&T's "return to connectivity" as the fundamental business strategy. Some hail a new era for the company. Others might point to aggressive marketing tactics that could be hard to sustain longer term, even if they work in the short term.  

But monopoly market dynamics are fundamentally different from those with competition. Slow growth is not a problem for a regulated monopoly that earns a guaranteed--if low--return from investments made with almost zero risk. 

But that same business is fraught with danger in a competitive situation, where profit margins are squeezed; bad investment choices have real consequences and new competitors reduce the effective size of the market any single firm can grab. 

The simplest analogy: in a monopoly market the theoretical share is nearly 100 percent. In a competitive market with two competent suppliers the theoretical market share is 50 percent, In a market with three competent suppliers theoretical market share is reduced to 33 percent of total. 

In practice, a stable competitive market often will have a 4:2:1 pattern of market share among the top-three firms.  

In a mature competitive market it is conceivable that one supplier gets 50 percent share; a second 25 percent; a third 12.5 percent and the rest is divided amongst scores to hundreds of suppliers. But the biggest three suppliers can have close to 90 percent share. 

Few--if any--national communications markets have reached that shape, which suggests the markets remain unstable. 

The access business (voice, internet access, messaging, mobility) has other problems, though. Competition has meant declining profit margins; a lower return on invested capital and, often, lower average revenue per account over time. Revenue growth also is a persistent issue.

And that is the fundamental conundrum big access companies (telcos, cable TV, other ISPs) face. Competitive access markets feature low rates of growth; ARPU pressures; profit pressures and low rates of financial return on invested capital. 

“Sticking to the basics” (connectivity services) was always a low-growth business in the monopoly era. In the competitive era it often is a “close-to-zero growth” or even “negative growth” sort of business. 

That remains a key issue for connectivity providers that “sticking to the core business” does not necessarily solve. Market share gains and losses will remain a key variable under conditions where big gains in ARPU are close to impossible.

Wireless Power Delivery: Kilowatts at a Kilometer

Yes, substantial amounts of electiical energy can be converted into microwave radio frequencies and delivered without wires. 

Monetization of Higher Data Consumption Remains a Key Issue for ISPs

Virtually all internet service providers worry to some degree about monetizing growing data consumption on the part of their customers. But monetization is a bigger problem in some markets than in others. 

If consumption and revenue were strictly linear, as once was the case for long-distance telephone communications, the highest usages would correlate with the highest revenue, all other things being equal. Looking at mobile ARPU, some markets including India and South Africa show the monetization issue.

soruce: Cisco, Kagan Research 

In most markets, though, monetization is sticky on the revenue side. Average revenue per user might not increase as usage grows. To remain viable under such circumstances, an ISP must reduce costs per delivered bit or find additional revenue sources with higher profit margins and stronger revenue growth profiles. 

Who is the "Speaker?" The Platform or the User? Does it Matter?

Free speech always has been a difficult and complicated subject in the United States. Time, place and manner restrictions have been upheld as lawful. But the First Amendment to the U.S. Constitution only binds the federal government. 

The Amendment says “Congress shall make no law. respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Over time, many have emphasized a few key words. It is “Congress” that can “make no law” regarding the “establishment” of any religion or abridging “freedom of speech” or “press.” 

The Constitution therefore restricts the federal government, not other entities, jurists have concluded. But the meaning of “make no law” has been debated. Though intended to protect political speech, the courts have, over time, concluded that other forms of expression with political implications also are protected.

All those issues now are complicated, many would argue, by suppression of political speech by social media platforms. To be sure, such entities are not bound by the First Amendment to the U.S. Constitution. Neither are newspapers, radio stations or other publishers of content. 

But such issues have been raised before. Consider the issue of “who is the speaker whose rights are protected? In the 18th century the right was said to be held by the owners of printing presses. In the 21st century it is social media platforms. 

But where jurists might agree that a newspaper is a “speaker” for reasons of protection, who is the “speaker” on a social media platform? Is it the platform (which insists it is not responsible for the views expressed on its sites) or the users of the platform? 

And, to be sure, in either case, no matter which definition is used, the constitutional protection of speech might not apply. The platform, speaking for itself as a legal entity, has the right to express its own views. What is unclear is whether, for all other purposes, the views expressed on the platform are distinct. 

Though courts have refused to consider private property venues areas of protected speech, that arguably remains an issue. In other words, is a major social media platform the equivalent of the village commons. So far, courts have not agreed. 

Still, naked suppression of political speech arguably rankles most people. And at least so far, none of the historical precedents seem to provide much room for adapting First Amendment law to 21st century political speech.