Don't Have It, Don't Want It

One line of reasoning about broadband deployment is that carriers and government have failed to push it hard enough. There's another way of looking at matters, however. In the U.K. market, for example, respondents who don't buy broadband access services recently told researchers that they didn't want broadband, or didn't own PCs.

Some 27 percent just didn't want it, and some 22 to 23 percent don't own PCs in the home, so broadband has no value. About 15 percent said they couldn't afford it. This will change as compelling services aimed at TVs and game consoles, for example, become available.

In some cases, the ability to use mobile handsets inside the home for a flat fee each month might be so compelling that will drive broadband adoption. The point is that people buy things when they find things valuable, and many end users still haven't been persuaded.

Wireless IS Voice

This probably won't be the year that everybody agrees mobile voice is THE way to do voice. In fact, mobile might never be THE way to do voice. But there's no question that mobile handsets are becoming the convenient single device to use voice and other apps. There's no question the amount of conversation initiated and terminated on mobile devices is increasing. Nor is there much doubt that tethered devices and apps have to start offering value beyond "simple" conversation to remain highly relevant.

P2P Could Drive Architectural Change

Some trends we now are seeing in the Japanese broadband access market raise potential issues for all access network architects. Specifically, the issue is that consumer networks are designed asymmetrically, and P2P uploading requires symmetry. One might like to design a network so flexible that bandwidth can be provisioned "on demand."

The problem is that such a network typically implies an optical infrastructure with a fairly sophisticated degree of intelligence, to supply granular increases in bandwidth, on a "dial it up and it happens" basis.

And that's expensive, particularly so since the network has to be built past all potential end user locations, even when actual demand will vary widely, stranding some of the assets.

Some networks, with short access loops, might finesse the issue by deploying VDSL. Others are simply going to have to look at fiber-rich networks. Expensive stranded assets might result, in that case.

Oddly Enough, Access Is Where QoS Really Helps

Brough Turner, NMS Communications CTO, argues that quality of service measures in the Internet backbone provide negligible benefits. It's in the access links where QoS really can make a difference, and that's the area where at&t's merger approval agreement with BellSouth prohibits it from doing so. Oddly enough, the inability to "discriminate" between packets prevents users from experience improvements they might like to have.

Once packets get beyond the access network, every link in the Internet is carrying multiplexed traffic that is statistically relatively predictable, Turner argues. "Traffic volumes vary by time of day, but these links don't saturate, except as a result of poor engineering or forecasting on the part of the ISP or failures in other parts of the network causing rerouted traffic," says Turner. "Either case generates a rapid response from any ISP that expects to remain in business."

"In short, except at the edges of the access network, Internet links may be heavily loaded but are not saturated," says Turner. "Best effort is good enough even for low latency applications like voice telephony" in the backbone, as a result. "Except during major failures, the effect of QoS in the Internet backbone is negligible."

That isn't the case for access links, Turner argues. "There is one place in the public Internet where limited, highly specific QoS measures make sense and are being deployed," and that is "at the consumer end of an asymmetric broadband access link."
Specifically, it is the upstream links that can saturate. The other issue is that it frequently is not possible to buy additional capacity in the upstream direction, at any price. And that makes routing policies very valuable.

His full comments can be viewed at http://blogs.nmss.com/communications/.

Incentives Still Remain the Issue

Nobody yet knows how much bandwidth typical consumer users will want, and be willing to pay for, in the future. Demand may prove less robust than many now believe. But if customers really want, and will pay for, 50 Mbps or 100 Mpbs access pipes, then a fiber direct to residence network is about the only thing that really works, if demand is strong enough that little sharing is possible.

So the problem is how to get such networks built, at a time when capital providers are skeptical, to say the least, about the wisdom of building such networks.

Perhaps we should simply acknowledge that some partisans in communications policy debates seem to prefer government solutions that remove profit motives entirely from broadband infrastructure efforts. There is a logic there. Some sorts of infrastructure might indeed be natural monopolies that simply can't be created by the private market. And if that is the case we are wasting our time thinking such sorts of networks can be created any way but sanctioned franchises and monopolies.

And that remains one of the issues at the heart of the network neutrality debate. To the extent that we honestly expect private capital to flow into infrastructure, we have to honestly confront the issue of whether profits can be made, and how they can be made, by entities trying to supply such infrastructure, especially when we haven't tackled the issue of how different regulatory regimes can be reconciled. Why, in the same market, do we regulate providers of similar services using entirely distinct frameworks? It's a rhetorical question, of course.

Some contestants come out of a broadcast mass media model with greater degrees of content freedom, while others come out of a common carrier model with drastically less freedom. But by universal agreement, all the services provided by all of these contestants will be the same. Because of the immense commercial interests in play, nothing signficant is going to be done about this growing inconsistency any time soon.

Nor is it likely private communications firms will simply be nationalized and operate as regulated utilities. That being the case, the issue of incentives will remain key if we are to have any hope at all at mass and robust broadband availability.

ILECs will Lose 30 Percent of Households by 2010

By 2010, 30 percent of households in the United States will completely cut their service with their local phone company, predict analysts at The Yankee Group. These households will upgrade to broadband and choose VoIP for their home phone service or become wireless-only households. But there are countervailing pressures.

Some 48 percent of households with both a wireless and landline phone say their wireless phone will never replace their landline phone. The main barriers to wireless-only service include reliability and quality. Some 19 percent of wireless users cited quality and reliability as primary reasons for retaining the landline phone. Twenty-two percent of wireless users cited indoor wireless coverage and 28 percent cited battery life as reasons not to cut the cord. Wireless quality and reliability will continue to improve, and will weaken as reasons to keep the landline phone.

About 37 percent of wireless users say Internet access requirements are a primary reason for retaining the landline phone. About 45 percent of households have DSL or dialup, which both require a landline connection. With the exception of Qwest and a few others who offer it as a retention strategy, local phone providers are still not offering consumers stand-alone DSL service. Over the next few years, Yankee Group researchers expect local phone providers to offer DSL without local phone service ("naked DSL"), reducing the need to keep a POTS line in service.

About 37 percent of wireless users cited emergency calling as a primary reason for retaining the landline phone. Some 26 percent of wireless users cite a unified family phone number as a primary reason for keeping the landline phone. A single phone number that provides a family identity, that can be given as the main contact number, is valued by this consumer segment.

Consumer Directory Services: A Work in Progress

The majority of consumers still use a traditional paper address book to keep the names and numbers of their friends and families but the mobile phone and instant messaging services are increasingly important, and points out the way service providers or portals can use directory services--especially enhanced with availability features--to "glue" customers to their offerings. Some 25 percent of households recently interviewed by The Yankee Group said that they always or sometimes keep contacts on a web-based e-mail account. About 32 percent of users say the mobile phone is the device where directory information is kept.