2014 Hot Interconnects Highlight: Achieving Scale & Programmability in Google's Software Defined Data Center WAN

Introduction:

Amin Vahdat, PhD & Distinguished Engineer and Lead Network Architect at Google, delivered the opening keynote at 2014 Hot Interconnects, held August 26-27 in Mt View, CA. His talk presented an overview of the design and architectural requirements to bring Google’s shared infrastructure services to external customers with the Google Cloud Platform.

The wide area network underpins storage, distributed computing, and security in the Cloud, which is appealing for a variety of reasons:

  • On demand access to compute servers and storage
  • Easier operational model than premises based networks
  • Much greater up-time, i.e. five 9’s reliability; fast failure recovery without human intervention, etc
  • State of the art infrastructure services, e.g. DDoS prevention, load balancing, storage, complex event & stream processing, specialised data aggregation, etc
  • Different programming models unavailable elsewhere, e.g. low latency, massive IOPS, etc
  • New capabilities; not just delivering old/legacy applications cheaper

Andromeda- more than a galaxy in space:

Andromeda – Google’s code name for their managed virtual network infrastructure- is the enabler of Google’s cloud platform which provides many services to simultaneous end users. Andromeda provides Google’s customers/end users with robust performance, low latency and security services that are as good or better than private, premises based networks. Google has long focused on shared infrastructure among multiple internal customers and services, and in delivering scalable, highly efficient services to a global population.

An image of Google's Andromeda Controller diagram.
Click to view larger version. Image courtesy of Google

“Google’s (network) infra-structure services run on a shared network,” Vahdat said. “They provide the illusion of individual customers/end users running their own network, with high-speed interconnections, their own IP address space and Virtual Machines (VMs),” he added.  [Google has been running shared infrastructure since at least 2002 and it has been the basis for many commonly used scalable open-source technologies.]

From Google’s blog:

Andromeda’s goal is to expose the raw performance of the underlying network while simultaneously exposing network function virtualization (NFV). We expose the same in-network processing that enables our internal services to scale while remaining extensible and isolated to end users. This functionality includes distributed denial of service (DDoS) protection, transparent service load balancing, access control lists, and firewalls. We do this all while improving performance, with more enhancements coming.  Hence, Andromeda itself is not a Cloud Platform networking product; rather, it is the basis for delivering Cloud Platform networking services with high performance, availability, isolation, and security.”

Google uses its own versions of SDN and NFV to orchestrate provisioning, high availability, and to meet or exceed application performance requirements for Andromeda. The technology must be distributed throughout the network, which is only as strong as its weakest link, according to Amin.  “SDN” (Software Defined Networking) is the underlying mechanism for Andromeda. “It controls the entire hardware/software stack, QoS, latency, fault tolerance, etc.”

“SDN’s” fundamental premise is the separation of the control plane from the data plane, Google and everyone else agrees on that. But not much else!  Amin said the role of “SDN” is overall co-ordination and orchestration of network functions. It permits independent evolution of the control and data planes. Functions identified under SDN supervision were the following:

  • High performance IT and network elements: NICs, packet processors, fabric switches, top of rack switches, software, storage, etc.
  • Audit correctness (of all network and compute functions performed)
  • Provisioning with end to end QoS and SLA’s
  • Insuring high availability (and reliability)

“SDN” in Andromeda–Observations and Explanations:

“A logically centralized hierarchical control plane beats peer-to-peer (control plane) every time,” Amin said. Packet/frame forwarding in the data plane can run at network link speed, while the control plane can be implemented in commodity hardware (servers or bare metal switches), with scaling as needed. The control plane requires 1% of the overhead of the entire network, he added.

As expected, Vahdat did not reveal any of the APIs/ protocols/ interface specs that Google uses for its version of “SDN.” In particular, the API between the control and data plane (Google has never endorsed the ONF specified Open Flow v1.3). Also, he didn’t detail how the logically centralized, but likely geographically distributed control plane works.

Amin said that Google was making “extensive use of NFV (Network Function Virtualization) to virtualize SDN.” Andromeda NFV functions, illustrated in the above block diagram, include: Load balancing, DoS, ACLs, and VPN. New challenges for NFV include: fault isolation, security, DoS, virtual IP networks, mapping external services into name spaces and balanced virtual systems.

Managing the Andromeda infrastructure requires new tools and skills, Vahdat noted. “It turns out that running a hundred or a thousand servers is a very difficult operation. You can’t hire people out of college who know how to operate a hundred or a thousand servers,” Amin said. Tools are often designed for homogeneous environments and individual systems. Human reaction time is too slow to deliver “five nines” of uptime, maintenance outages are unacceptable, and the network becomes a bottleneck and source of outages.

Power and cooling are the major costs of a global data center and networking infrastructure like Google’s. “That’s true of even your laptop at home if you’re running it 24/7. At Google’s mammoth scale, that’s very apparent,” Vahdat said.

Applications require real-time high performance and low-latency communications to virtual machines. Google delivers those capabilities via its own Content Delivery Network (CDN).  Google uses the term “cluster networking” to describe huge switch/routers which are purpose-built out of cost efficient building blocks.

In addition to high performance and low latency, users may also require service chaining and load-balancing, along with extensibility (the capability to increase or reduce the number of servers available to applications as demand requires). Security is also a huge requirement. “Large companies are constantly under attack. It’s not a question of whether you’re under attack but how big is the attack,” Vahdat said.

[“Security will never be the same again. It’s a losing battle,” said Martin Casado, PhD during his Cloud Innovation Summit keynote on March 27, 2014]

Google has a global infrastructure, with data centers and points of presence worldwide to provide low-latency access to services locally, rather than requiring customers to access a single point of presence. Google’s software defined WAN (backbone private network) was one of the first networks to use “SDN”. In operation for almost three years, it is larger and growing faster than Google’s customer facing Internet Connectivity between Google’s cloud resident data centers and is comparable to the data traffic within a premises based data center, according to Vahdat.

Note 1.   Please refer to this article: Google’s largest internal network interconnects its Data Centers using Software Defined Network (SDN) in the WAN

“SDN” opportunities and challenges include:

  • Logically centralized network management- a shift from fully decentralized, box to box communications
  • High performance and reliable distributed control
  • Eliminate one-off protocols (not explained)
  • Definition of an API that will deliver NFV as a service

Cloud Caveats:

While Vahdat believes in the potential and power of cloud computing, he says that moving to the cloud (from premises based data centers) still poses all the challenges of running an IT infrastructure. “Most cloud customers, if you poll them, say the operational overhead of running on the cloud is as hard or harder today than running on your own infrastructure,” Vahdat said.

“In the future, cloud computing will require high bandwidth, low latency pipes.” Amin cited a “law” this author never heard of: “1M bit/sec of I/O is required for every 1MHz of CPU processing (computations).” In addition, the cloud must provide rapid network provisioning and very high availability, he added.

Network switch silicon and NPUs should focus on:

  • Hardware/software support for more efficient read/write of switch state
  • Increasing port density
  • Higher bandwidth per chip
  • NPUs must provide much greater than twice the performance for the same functionality as general purpose microprocessors and switch silicon.

Note: Two case studies were presented which are beyond the scope of this article to review.  Please refer to a related article on 2014 Hot Interconnects Death of the God Box

Vahdat’s Summary:

Google is leveraging its decade plus experience in delivering high performance shared IT infrastructure in its Andromeda network.  Logically centralized “SDN” is used to control and orchestrate all network and computing elements, including: VMs, virtual (soft) switches, NICs, switch fabrics, packet processors, cluster routers, etc.  Elements of NFV are also being used with more expected in the future.

References:

http://googlecloudplatform.blogspot.com/2014/04/enter-andromeda-zone-google-cloud-platforms-latest-networking-stack.html

https://www.youtube.com/watch?v=wpin6GKpDm8

http://gigaom.com/2014/04/02/google-launches-andromeda-a-software-defined-network-underlying-its-cloud/

http://virtualizationreview.com/articles/2014/04/03/google-andromeda.aspx

http://community.comsoc.org/blogs/alanweissberger/martin-casado-how-hypervisor-can-become-horizontal-security-layer-data-center

http://www.convergedigest.com/2014/03/ons-2014-google-keynote-software.html

https://www.youtube.com/watch?v=n4gOZrUwWmc

http://cseweb.ucsd.edu/~vahdat/

Addendum:  Amdahl’s Law

In a post conference email to this author, Amin wrote:

Here are a couple of references for Amdahl’s “law” on balanced system design:

Both essentially argue that for modern parallel computation, we need a fair amount of network I/O to keep the CPU busy (rather than stalled waiting for I/O to complete).
Most distributed computations today substantially under provision IO, largely because of significant inefficiency in the network software stack (RPC, TCP, IP, etc.) as well as the expense/complexity of building high performance network interconnects.  Cloud infrastructure has the potential to deliver balanced system infrastructure even for large-scale distributed computation.

Thanks, Amin

Google’s Potential End Game – Transport and Organize the World’s People, Not Just Information

The Year 2040 – Somewhere in Silicon Valley

[dropshadowbox align=”right” effect=”lifted-both” width=”250px” height=”” background_color=”#ffffff” border_width=”1″ border_color=”#dddddd” ]Read More

[/dropshadowbox]It’s 8:07 am and my next door neighbor, cheapskate Charlie, has been waiting outside his door for a few minutes for his ride, which is guaranteed to be at his house within a 10 minute window. He looks at his garage and is reminded that he will soon be renting it as storage space to his neighbor, Rich.

As the electric Gee-Auto arrives, Charlie notes that another neighbor, tightwad Tom, is joining him today and on their journey they will pick up parsimonious Paula. Despite sharing a vehicle with two to three people each day, the efficiency of a packet network of autonomous vehicles has reduced his average commute time from 30 minutes to 23 minutes, eliminated the need for auto insurance and given Charlie the opportunity to play his virtual piano on his morning commute, instead of focusing on the car in front of him.

Parsimonious Paula likes the Gee-Mobile service as she no longer has to rely on the discontinued and obsolete county transit. Her monthly subscription to the Gee-Mobile service is comparable to what she used to pay for a monthly transit pass and she doesn’t have to walk half-a-mile in the rain to catch a bus.  It would make bringing groceries home easier, but Gee-Autos have been delivering goods directly to homes for decades.

It’s 8:15 am and across the street, just like every workday, a Gee-Auto meets my spendthrift neighbor, Rich, at his doorstep exactly as he opens his front door. He hops in the Gee-Auto and waiting for him is a morning latte, a freshly toasted bagel, along with morning news, entertainment and education tuned especially for his viewing, listening and olfactory pleasure.

The garage is no longer needed for car storage when one has a vehicle-on-demand service.
The garage is no longer needed for car storage when one has a vehicle-on-demand service.

Rich has a tinge of disappointment that his 15 minute commute (which used to be 30 minutes before the arrival of self-driving, always-connected vehicles) couldn’t be just a little longer, as he really enjoys this daily ritual of breakfast and relaxation in a moving pod. That disappointment is soon forgotten, as he realizes today is the day when a contractor and his team of droids will begin the conversion of his garage into a tricked-out, man-cave.

Along the way, the Gee-Auto’s speed is constantly and automatically adjusted to traffic conditions. The queuing algorithms are working especially well these days and intersections that were formerly regulated by stoplights are now sophisticated roundabouts and it will be a non-stop trip for Rich. There is one stop for the Gee-Auto transporting Charlie and that is to drop off Paula at her banana stand.

Like most days, Rich and Charlie arrive within a few minutes of each other at the Acme Anvil Company (Charlie is the CFO and Rich is in marketing). They wave adieu to Tom, who works about a half-mile away, and go about their day. In the meantime, the Gee-Auto that had transported Rich to work slips into the median, where an embedded wireless charging pod rapidly recharges the hybrid super capacitor-graphene battery system, before receiving its next assignment to pick up groceries for delivery to another Gee-Mobile subscriber.

[Note: The above scenario of an automated people mover seems ridiculous, but it wasn’t too long ago that the idea of talking to one’s phone to get directions would be absolute lunacy. The idea of an on-demand transit system providing door-to-door transport goes back to at least the mid-1970s, as the first major expansion for Silicon Valley’s public transit system was such a service, Dial-a-ride (dial-a-ride used the old school telephone to beckon a mini-bus directly to one’s residence). Dial-a-ride didn’t scale, however, as the staffing and equipment costs were greater than the traditional public transit approach of aggregating people at transit stops.]

Technology to Make the Science Fiction, Fact

Although fictional, the above story isn’t science fiction, as the technology now exists to make the above scenario real. Many companies could potentially implement such a people transport system, including car manufacturers, auto-rental and logistic companies, but it is likely to be outsiders (Amazon, Walmart, Google, etc.) that disrupt this multi-trillion dollar industry.

The focus of this article is Google and how the elements it already has in place could be stitched together to create an end-to-end, subscription (as well as Pay Per Ride) people transport service that generates tens of billions of new revenue, while building upon its existing businesses.

One of the oft-cited barriers to the autonomous car is the question of who is liable in the case of an accident (e.g., the manufacturer, the driver, etc.)? A subscription model doesn’t remove liability factor, but by taking a holistic view of the driving experience and owning the “last mile” transport method, Google could greatly reduce its exposure.

Like its cloud services, Google would have complete control over the design (ensure no single points of failure), the maintenance (no mechanical error by ensuring equipment is always up-to-date) and the software (e.g. secure it from hacking).

Further, removing the constraint of having to accommodate a driver would allow for a rethinking of a vehicle’s design (see the above video). There is no need for a steering wheel, which could change the form factor, while improving the safety of the passenger who occupies the driver seat.

The need for windows goes away and could be replaced with electronic screens, such that one could choose the environment that he wants to see (think advertising space for Google). Without windows, presumably the vehicle’s body could be made stronger (e.g. more cross-members where the windows would have been). Additionally, the seats could be placed backwards as there is no longer a need to face forward.

[dropshadowbox align=”right” effect=”lifted-both” width=”150px” height=”” background_color=”#ffffff” border_width=”1″ border_color=”#dddddd” ]With a 5% market share, the annual revenues could exceed $32B.[/dropshadowbox]Last week’s announcement that they have designed their own prototype car is consistent with other initiatives, like Google Fiber, where they want to control the entire experience. A custom design also reduces vehicle cost by eliminating overhead that an individual consumer normally pays when she buys a car from a dealer (which passes on the sales, marketing, engineering and other overhead costs of the manufacturer, along with the dealer costs, etc.).

Google, along with other entities, have a number of initiatives that set the stage for a subscription-based, autonomous transport system, including:

  • Google has proven it can create an autonomous vehicle that can drive hundreds of thousands of miles without an accident.
  • Google’s Waze application, coupled with their Google Maps already provides a real-time view of traffic allowing drivers to select the best route. Having a vehicle automatically make the decisions as to the best route is the next step (and safer). The more vehicles that are directed in this manner, the better, in terms of route optimization (i.e. traffic reduction); the Gee-Auto and their control become more and more like the Internet, as the underlying signaling improves the throughput of the overall transportation network.
  • Google, as well as Amazon and others, are investing heavily in on-demand delivery of goods. This effort is a great testing ground to understand the best routing of vehicles. As Google is wont to do, they are also building the associated apps and signaling technology via the broadband network to ensure orders are relayed through the delivery chain. If Google can prove this model with a driver, then eliminating the driver via an autonomous car makes the model work that much better.
  • The idea of a subscription service for a car rental isn’t new, as evidenced by the rise of ZipCar in urban areas. The autonomous car would allow this concept to spread into suburban areas, as the cars would automatically appear at the subscriber’s house [Added 12/23/14 – the idea of an on-demand, shared, last-mile car service may become reality in 2015, as Singapore is looking to open up one of its neighborhoods to such an experiment].
  • Relay Rides, Uber and Lyft provide models for the electronic dispatch of vehicles – albeit with human drivers – using a Smartphone or tablet. It isn’t a stretch to envision the elimination of the driver. It is important to note that Google Ventures is already an investor in Relay Rides and Uber [Note, since this article was published, Uber has suggested that the elimination of the driver could be part of their long-term plans – one industry executive even predicted that Uber might purchase a auto manufacturer, so that they could control the experience and have cars that last a million miles].
  • The concept of a relatively low-cost ($24k), electronically controlled electric pod car is close to reality with the soon to be released vehicle from LIT Motors; a small San Francisco start-up that promises to disrupt the auto industry with its Silicon Valley business model.
  • Building a car with screens, instead of windows, provides Google with an opportunity for more “ad-space”. This is ad-space that is not only location-aware, but location-directed (e.g. sensing the rider might be hungry for a certain food item, it would be easy to automatically reroute to one’s favorite restaurant and provide incentives for stopping at said restaurant).
  • A Google Fiber/Wireless backbone, although not necessary, could be tuned to off-load signaling information emanating from the vehicles peer-to-peer communications systems. These two networks (P2P vehicle and the Fiber backbone) could become an integrated central nervous system for the network of vehicles. [Added 6/6/2014] Google’s request for a Statutory Temporary Authority from the FCC for the nationwide testing of millimeter frequencies (77 GHz) looks to be part of an effort to detect objects around a car. [Added 8/25/2014] Further, the conversation on Vehicle to Vehicle communications continues with the NHSTA’s release of it’s Advanced Notice of Proposed Rulemaking.

Tens of Billions of New Revenue – It Moves the Needle

A picture of an electric vehicle from LIT Motors at CES 2014.
A picture of a drive-by-wire, electric vehicle from LIT Motors at CES 2014.

Why would Google ever want to jump into such a seemingly tangential business model of being a Subscription Vehicle on Demand service provider? Simply, a project of this sort could move their revenue needle, produce great margins and augment their advertising business. As importantly, the notion of organizing the world’s atoms is akin to its initial mission of organizing the world’s information.

For simple modeling purposes, let’s assume the IRS reimbursement rate of 55.5 cents per mile (gas, maintenance, amortized car payments, etc.) and that the average person drives 10k miles per year (AAA estimates 59.5 to 97.5 cents per mile for 10k miles/year for a small to large sedan, respectively). That would mean $5,550 a year in transport costs per car or approximately $460 per month.

It isn’t too difficult to imagine a 3 tier subscription offering, similar to what Google is doing with their broadband offering to meet the needs of the various customer profiles:

  • The Parsimonious Paula Offer$125/month – Gee-Auto guaranteed within 10 minutes – have to share with others, advertisements, plus goods delivery within 8 hours  – 500 miles per month (overages apply).
  • The Mainstream Mary Offer$300/month – Gee-Auto guaranteed within 5 minutes, sometimes have to share depending upon demand, limited advertisements, plus goods delivery within 4 hours – 1,000 miles/month limit (overages apply).
  • The Regal Rich Offer$1,000/month – Gee-Auto is ready when the person opens their door, no sharing with others and no advertisements, plus goods delivery within 1 hour – Unlimited distance per month

Further, assume take rates of 10% for the Regal Rich offer, 40% for the Parsimonious Paula offer and 50% for the Mainstream Mary offer, the weighted average would be $300 per month per subscriber (33% less than the assumed conservative average of $460/month in transportation costs).

Assuming a 5% market share of today’s 18+ population, this would mean approximately 9 million subscribers or about $2.7B monthly or > $32B annual business, not counting any uplift to existing businesses (e.g. advertising, broadband, etc.), on-demand business (taxi-replacement business) or fleet/logistic replacement.

Because of the sharing nature of the business, Google’s costs would be lower than the IRS reimbursement rate of 55 cents/mile. Even the most expensive option in the above scenario would be shared (e.g. once a Gee-Auto pod drops off one person, it could pick up another nearby person). Assuming a sharing ratio of 1/3 (one Gee-Auto for every 3 people [8/19/2014 update – When I wrote this, the 1/3 ratio was a gut-feel guess. As it turns out, some MIT scientists using  mathematical algorithms and real-data from  Singapore determined that a 1/3 ratio is about right as summarized here about their white paper]), the costs, based on the IRS figures would be $153/subscriber/month (1/3 of the single driver’s cost of $460) or almost 50% gross margin ($153 costs versus $300 in revenue/subscriber); not a bad business and with $30B+ in revenue, a business that is approximately 50% of Google’s current business.

Granted, there would be significant capital costs to such an endeavor, but, because electronics and software are the significant cost components associated with the above scenario, cost reductions would more closely follow Moore’s Law than the traditional cost for building automobiles. There are also costs associated with upgrading roads, etc. that would need to be factored in as part of a capital build. Still, by building this on a city-by-city basis over time, much like Google Fiber, the capital costs would drop with each deployment. Even at $20k per vehicle, the capital costs to create 3 million vehicles would be $60B; not insignificant, but within the realm of possibility given current costs for low-end electric cars.

There are several upsides, both the aforementioned uplift to their existing businesses, as well as opportunities to reduce expenses relative to traditional transportation systems, as well as find new revenues:

  • Lower Insurance Costs: Google would probably self-insure, given the sheer volume of business, as well as the confidence they would have in their technology and the indemnification clauses their attorneys would include in their subscription agreements. Self insuring would remove the costs of the insurance company middleman. Additionally, given the potential improvements in safety from autonomous vehicles (Google suggests that human error causes 90% of the 1.2 million vehicle deaths each year), the effective cost of insurance would be lower than the costs for insuring human-driven autos.
  • Lower Operational Costs: Being all-electric, the operational costs from maintenance and fuel would be less than traditional hydrocarbon vehicles. Additionally, it wouldn’t be a stretch for Google to create a network of its own power stations (which, as alluded to in the above story, could be in medians and other non-usable areas).
  • Local Subsidies: At $125 per month, the Parsimonious Paula tier is more than 10% cheaper than the existing Silicon Valley public transportation option (a monthly pass on Silicon Valley’s VTA is $140). Given that public transit authorities operate bus systems at a loss, it might be cheaper for a transit authority to pay Google on a variable cost basis and retire the bus systems (particularly in suburban areas). Google probably would run the transit system without subsidies, as the political benefits of saving the local taxpayers money would outweigh the marginal revenue.

Policy Implications at the Local Level  – From First Mover Advantage to Must-Have

A picture of a Google truck at a customer install. Note, the lawn sign promoting the Google Fiber project.
Image courtesy of Google

One of the brilliant insights from the Google Fiber management team is its understanding of the importance of speed; not just speed in broadband access, but speed to market. The longer it takes to deploy Google Fiber, the higher the costs of make-ready and the more opportunity competitors have to thwart its efforts. As such, one of the most important factors in determining where they deploy Google Fiber is the willingness of local cities and agencies to work with them to smooth out the barriers to deployment (e.g. obtaining permits, rights-of-way, etc.).

The Google Fiber project has forged the sort of local relations that would be necessary to implement such a revolutionary approach to transportation. A project of this scale would require working with local government to support infrastructure improvements, such as distributed power charging stations (or some equivalent, such as solar roadways), improvements in traffic light signaling (making it more dynamic, based on real-time traffic demands or [link added 8/17/14] eliminating it as seen in this video) and other road improvements (e.g. roundabouts).

It’s not too difficult to imagine Google pursuing a nationwide competition like it did when it introduced the Google Fiber concept. If Google were to target a community with a population of 100,000 adults and assuming a 5% subscription rate, with a 1/3 ratio of vehicle per subscriber, they would be looking at 1,700 vehicles and assuming a near-term cost of $100k per vehicle, this would be a $170M investment; an amount that is pricey, but would provide a good field test and refine the commercial project, just like Kansas City did for Google Fiber (this is in the realm of possibility, as Google recently announced that they will be building 100 prototype vehicles for testing purposes).

Like the Google Fiber project, which received over 1,000 applications from communities of all sizes, a Gee-Auto contest would grab the attention of forward-looking cities and Google would probably have its choice of cities to pilot such a project. By staying on a city or regional basis, Google might be able to avoid the regulatory reach of some federal and state agencies. As they cross beyond county or state lines, however, the regulatory environment would become more complicated.

Assuming the above tack where Google starts local, policy makers would have many things to ponder over such an application including:

  • How to create an open network, such that vehicles from multiple operators can traverse the same roadway and still communicate in such a way that all operate in a seamless fashion, regardless of the underlying transport technology?
  • Who controls the signaling system and should that entity be a private operator (e.g. Google), a quasi-private entity or a municipal entity?
  • Should the entity that controls the signaling system be able to prioritize traffic, based on subscription tier, (e.g. public safety vehicles would still get first priority), etc.?
  • How to charge operators for the use of the roadways (e.g. pay per mile) and pay for ongoing infrastructure upgrades as well as upgrades that such a transportation system would entail?
  • What are the privacy implications of knowing a person’s movement at such a micro-level?

A shared vehicle society has long-term implications for local planning officials and could change how they plan for parking, design roads and the economic implications of the hollowing out of the traditional automobile trade.

  1. The Gee-Mobile service could potentially reduce the number of parking spots at a given building. Garages in single family residences might no longer be necessary in the autonomous auto world. At night or other times of slack demand, the Gee-Auto would park itself in unoccupied locations, which wouldn’t have to be near a residence. Further, because a Gee-Auto is dynamically assigned, parking lots could be structured to eliminate the space between cars (Last-In, First-Out). Additionally, parking lots and charging stations could be located in what are currently unusable spaces (e.g. in a median).
  2. The roads could be optimized for the autonomous vehicle. For instance, because it would be possible to create a narrower vehicle (LIT Motors, as an example), as well as pack the vehicles closer together, it might be possible to effectively create, say 3 lanes where there are two. These high density lanes could dispense with painted lines, as electronics would keep the autonomous vehicles in place. These virtual lanes would only be for the higher speed, autonomous traffic and not traditional motorists [Added 8/25/2014 – similarly the number of lanes for a given direction could be dynamically assigned, depending upon time of day – e.g. a 4 lane road might use 3 lanes for one direction in the morning and change the direction of those lanes when the traffic pattern changes in the afternoon).
  3. The local economic impact of the reduction of traditional automobiles will be huge. Of course, gasoline taxes to pay for infrastructure go away (an issue with electric cars that need to be addressed, regardless). The bigger impact might be on the restructuring of local economies. From the local auto shop to the gas station to the car dealer to the insurance agent, the traditional automobile has a huge economic impact on a community and the lost revenue would have to be made up with new opportunities from existing and new employers.

One aspect that a local economic agency could tout when trying to get those new jobs is the superior quality of life (e.g. not having to fight traffic, lower cost of transport, freedom for senior citizens and those with physical disabilities to leave their domicile without depending upon others, etc.) Like with gigabit broadband there will be a first-mover advantage for those communities that successfully implement an autonomous vehicle network. Eventually, however, being a “Smart Transport Community” will become a must-have.

The Big Question

Although all the technological elements of the so-called Gee-Mobile service exist today and the pricing is even within striking range, the bigger barriers will probably be business model and regulatory. It looks like there is a path to a business model (particularly as autonomous vehicle costs fall). Google has proven that it can work with local governments with its Google Fiber initiative, which would be helpful in getting past regulatory concerns. The biggest question in the above story is what jobs will cheapskate Charlie, parsimonious Paula, tightwad Tom and regal Rich will be driven to in 2040?

Meanwhile – Back in the Year 2040

It’s 8:30 a.m. and, at the same time Rich and Charlie arrive at their office, I am sitting down to work from home in a virtual environment via my 10 terabit connection. Just as I am about to start, I am pleasantly surprised by the appearance of a Gee-Air, the flying drone that whisked my 113 year old mother from her engagement residence (the term retirement home was retired from the vernacular decades before), located some 60 miles away. She had decided to surprise me with freshly made cinnamon rolls for breakfast. But that’s a story for another time.

Viodi View – 04/08/13

Are Google’s fiber networking efforts a small part of something that is much bigger; something that even Google may not be able to envision? That’s the impression I got from listening to a recent presentation from Google’s Milo Medin. Perhaps the network becomes a central nervous system for the sensors and machines that become part of Ray Kurzweil’s Singularity.


Google Fiber – A Step Function Connectivity Improvement

The Google Fiber Space retail store hints at some of the developments in the future that a gigabit network enables.
Image Courtesy of Google

A step function improvement in capability is how Milo Medin described Google’s Kansas City fiber project at the February 13th IEEE ComSoc meeting in Santa Clara. That huge improvement in customer experience is in contrast to the incremental gains of MSO [Multiple System Operator] and telco broadband networks, which have much lower access speeds. Click here to read more.


Marketing Smart Energy

austin-energy-debbie-kimberly
Click to View

The rumors that Austin will be Google’s next fiber city makes sense, given Austin’s high-tech culture and workforce. What might not be so obvious is the role their municipal utility could play in facilitating a gigabit network. Austin Energy has been an innovative; being one of the first to deploy smart meters and the associated data network. Marketing and showing the value of smart energy is one of the topics discussed with Debbie Kimberly of Austin Energy. Click here to view.


Multi-Screen Video Content and OTT Partnerships Enabled by New Video Network Architectures – Part 2 of 2 by Alan Weissberger

Image depicting a unified video delivery network.
Image courtesy of Alcatel Lucent and Microsoft

This is the second of a 2 part article on the 2013 OTTCON.  The first article looked at how Pay TV providers could offer OTT content on second screen devices and also how OTT and local providers (Pay TV or ISPs) could partner together to offer OTT content to subscribers.  This second article examines how video network infrastructures need to evolve to support both Pay TV and OTT content.

[Note: This article and the associated comments, which features coverage of a joint Alcatel-Lucent/Microsoft presentation, becomes particularly relevant given Ericsson’s announcement of its acquisition of Microsoft’s Mediaroom software.] Click here to read more.


Aereo Ruling – Opportunity for Broadband Providers?

Ken Pyle interviews Barbara Esbin of Cinnamon Mueller at MTA.
Click to View

Barbara Esbin of the law firm of Cinnamon Mueller  provides an overview of the Aereo court case. Aereo just won a major decision last week in the Second Circuit Court of Appeals. She suggests that there is a good chance that this case could go to the Supreme Court, given the Second Circuit’s split with the Ninth Circuit Court of Appeals. In December, the Ninth Circuit Court granted broadcasters’ motion for a preliminary injunction against a similar service, FilmOn (also known as Aereokiller).

Out of this seeming chaos, Esbin indicates there could be opportunities for operators to fashion various hybrid services that respect copyright laws, while providing broadband providers another way to offer their customers a video solution. Click here to view.


The Message Is Being Heard

Ken Pyle interviews Ross Lieberman at the 20th Anniversary ACA Summit.
Click to View

Congress is beginning to hear the message of the challenges small operators and their customers face with regards to retransmission consent, sports programming, program access and broadband regulation, according to Ross Lieberman of the ACA. Filmed at the 2013 ACA Summit, Lieberman gives a preview of a panel he was part of at the MTA 2013 Convention. Click here to view.


The Korner – Fashion Mind Reading – Part 2

Ken Pyle interviews Ariel Garten of Interaxon
Click to View

It may look like a fashion statement, but the Muse brain-sensing headband from Interaxon, allows one to control games with their thoughts; no hands or voice required. As Ariel Garten, Interaxon CEO and founder, says, it allows one to, “See inside your brain in action.”

Gartner describes how this product was built on technology developments that began a decade ago. This will be their first foray into the consumer market and is due out in September packaged with multiple brain fitness apps. A Software Development Kit is available, so as Garten suggests, “You can build whatever you can dream of,” or think of.

Couple the sort of technology produced by Interaxon with Google Glass or the Innovega’s contact lenses and one could receive information through a private screen and control things by merely thinking. This is the man-machine interaction that Kurzweil describes. Click here to view the view interview with Garten of Interaxon.

Google Fiber – A Step Function Connectivity Improvement

A step function improvement in capability is how Milo Medin described Google’s Kansas City fiber project at the February 13th IEEE ComSoc meeting in Santa Clara. That huge improvement in customer experience is in contrast to the incremental gains of MSO [Multiple System Operator] and telco broadband networks, which have much lower access speeds.

Picture of a boom truck with a technician pulling fiber on an existing utility pole line for Google.
Image Courtesy of Google

Medin, who is VP of Access for Google, described a Gigabit/second fiber network that eliminates the bottleneck between home and the cloud, unleashing new applications and devices both in the home and, by implication, throughout a city. Google’s incremental improvements in its construction and operations, its relatively simple offering and its grass-root marketing are as important to its success as its innovative fiber and home networking technologies.

The story of Google Fiber is pretty well-known by now; Google issued an RFI a couple of years ago to which 1,100 cities responded to be the test bed for Google’s fiber to the home project. What isn’t so well-known is that the motivation for this was the middling price/bandwidth performance of the U.S. as compared to other countries. Medin, who was a key figure in the early success of cable modems through his affiliation with @Home, suggested that, instead of complaining to government, Google decided to solve the problem. The unexpected response of so many communities was a surprise to Google and, according to Medin, an indicator of a pent-up demand.

Interestingly, government turns out to be part of the reason for their success, but not in the form of subsidies or tax breaks. The techniques Google and the local city are using to streamline the permit process and literally work together is saving an estimated 2% of the build cost. Similarly, attachment of fiber to the poles is made somewhat easier because the local utility is municipally owned.

Thanks a Bunch CEQA, No Google Fiber for California

Rules and regulations are definitely shaping where and how the service will develop. Echoing testimony before Congress, Medin suggested that as long as CEQA [California Environmental Quality Act] is in place in its current form, Google Fiber will be virtually non-existent in California (there is a 850 home Google FTTH project on the Stanford campus). The irony that Google’s home state will not see its fiber network anytime soon was not lost in the room full of engineers at the IEEE meeting.

Medin explained that anyone can use CEQA to initiate a lawsuit to block a development. He cited the example of the use of CEQA to delay the rollout of Uverse in San Francisco for years. A linchpin of Google’s approach is achieving scale at a fast-rate and the uncertainty caused by CEQA sinks their business case. And there is a business case, as Medin pointed out that the margins on broadband are as high as 95% for incumbent providers in urban areas.

To critics who suggest an infrastructure play is far afield for a “search” company, they should think again:

  • With YouTube and their other Google properties, Google already operates one of the world’s largest Content Delivery Networks
  • With a Fiber to the Home network, outside plant maintenance is almost zero, as compared to a traditional cable or telephone network.
  • With a gigabit connection and customized hardware, the home becomes an extension of their data centers. Although it wasn’t said in his talk, they are sure to have TR-069 or equivalent technology to allow the monitoring of devices within the home. Additionally, network managed WiFi routers integrated into each set-top will deliver a better experience than the home WiFi networks cobbled together by consumers.
Depicted is a Google optical/electrical converter (ONT) that resides in the home. What's not clear is whether or not it has built-in battery back-up.
Image Courtesy of Google

Google is taking an approach that, in some ways, is reminiscent of the old Ma Bell, whereby Google designs their own equipment. From Optical Network Terminals [ONTs] to set-top boxes, Google has created devices that maximize the customer experience [a DVR that records 8 programs at once] and minimizes operational cost. Medin indicated that Google has some of the world’s best optic engineers on staff.

Unlike the days of Ma Bell, Google can work with third-party manufacturers to build what they need, allowing them to introduce devices without the overhead burden of owning factories.

Keep It Simple Marketing

As with Google’s other offerings, they are taking a brand follows product approach to their fiber product. That is, the end service is the focus on creating an offer that provides great value and a high customer loyalty/buzz factor that will essentially market and sell itself. Like Google’s approach to their search home page, Google is keeping their offer simple. Unlike the Chinese food menu of a seemingly infinite number of tiers that traditional video and broadband operators offer, Google has only three tiers:

  • 5 Mb/s  with $300 construction charge (may be amortized at $25/month for 12 months) & no recurring charges for 7 years
  • 1 Gb/s broadband with 1 Terabyte storage For $70 per month
  • 1 Gb/s broadband with video for $120 per month with a Nexus 7 as a remote control

These three offerings probably cover 95% of the market. Amortized over 7 years, the 5 Mb/s tier exceeds the National Broadband Plan’s minimum at a very affordable rate of less than $4 per month and serves those who can least afford broadband. The $120 per month tier includes a basic level of video that many people would like. On a dollar per bit basis, the $70 provides great value to cord-cutters, while providing a superior broadband option for those who do not want to switch their existing video providers.

Further simplifying their offering is the decision they made not to offer telephone as part of their bundle. Although this decision was made for regulatory reasons, this reduces the operational complexity of their network and minimizes the staff required to run their network. With one less complex feature to offer, their network implementation is faster. They probably don’t lose much of their Total Addressable Market, given the number of people who are either wireless only or can easily pick a VoIP service (including Google Voice, which works great with a Obihai VoIP adapter).

A picture of a Google truck at a customer install. Note, the lawn sign promoting the Google Fiber project.
Image Courtesy of Google

Like what so many independent, rural operators have done with their Fiber to the Home deployments, Google is taking a grass-roots approach to marketing. Google uses a crowd-sourcing technique to determine where to build. Instead of taking a top-down approach that focus on demographics, Google split the Kansas City market into neighborhoods. When a critical mass of people commit to service in a given neighborhood, Google builds out that area creating what they call a “Fiberhood”.

Where they build is thus dependent upon the citizens of a given neighborhood. Like the way it has marketed its other Internet businesses, Google is betting on and seeding efforts to create a viral buzz about their network. One of the more interesting developments is their retail store. Although not mentioned in a recent Wall Street Journal article about Google’s rumored jump into retail, this point of presence offers a physical location to educate potential customers and the local influencers who will help sell their neighbors on the service.

And this approach seems to be working as Medin reported that in some neighborhoods 50% of the residents are committing to Google Fiber prior to build.

Just the Beginning

The Google Fiber Space retail store hints at some of the developments in the future that a gigabit network enables.
Image Courtesy of Google

A gigabit to the home with its low latency and high-speed brings the compute power of the cloud to the home; particularly when much of the content is cached locally within Kansas City. In a sense, this extends Google’s cloud platform to the home and business, such that the performance at the end point is virtually the same as what it would be in the data center. Medin hinted that 1 Gb/s is just a start. It is not too difficult to imagine the types of things that could be enabled with this sort of bandwidth, such as:

  • City-wide WiFi or some other wireless solution (Google has been received FCC authorization to experiment with various wireless approaches for access). City-wide wireless could offer a low-cost mobile/nomadic solution for its customers. It could also be important for autonomous transit options.
  • Distributed data centers – with 1 Gb/s connections, a Peer to Peer compute network (think connection of those DVRs) becomes a possibility. Why not use the computing power as well and create a virtual data center spread over hundreds of thousands of residences.
  • Like what Google has done with its Android and Chrome operating systems, the fiber network has the potential to enable applications from third-parties. It is possible that some of these apps might even come from existing telecom providers.

The Google fiber project in Kansas City is on its way to meeting its goal as a showcase of how low latency, Gigabit per second bandwidth can transform a city one neighborhood at a time. The fiber is really serving as a last mile nervous system that connects the seemingly disparate pieces to an ever-expanding Google ecosystem, which is where the change will really take place. Unfortunately for California residents, and particularly ironic for Silicon Valley residents, new Google Fiberhoods won’t be making their way to the Golden State anytime soon.

[Author’s Note: Thank you IEEE for the facilitating the excellent program that featured Medin as one of the speakers and thank you Alan Weissberger for your editing assistance].

Viodi View – 11/16/12

Shedding light on the unique stories of the rural carriers and their impact on the heartland has been one of the most rewarding aspects of the Viodi View and ViodiTV. This month marks 10 years since the Viodi View’s inaugural issue. The articles that seem to resonate the most are those about the people of the industry. Hopefully, in some small way, we are preserving the memories those people make and the lives they touch.


New Opportunities in a Changed World

Kevin Larson, of CTC in rural northern Minnesota, suggests that communities may need to form their own broadband networks, much like cooperatives were formed decades ago to bring telephone service to rural areas. In the final segment of this 4-part interview, Larson suggests that this could be an opportunity for existing telecom operators to lend management and operational experience that would help these communities in their quest for broadband. Click here to view.


Days of the Fiber Future Are Past

Congratulations to Diane Kruse of NEO fiber for her appointment as the chairperson for the 2013 Broadband Communities Summit. In this interview, filmed at the 2010 Broadband Communities Summit, Kruse discusses the federal government stimulus and the fears some had surrounding the stimulus. She also discusses the Google fiber project which, at that point, was still a contest to see which community would be the winner. It truly is amazing that only two years later the first Google fiber customers are being activated, as this type of outside plant project often gets way-laid by non-technological considerations. Click here to read more and to view.


Google Advocates Unlicensed Spectrum Sharing via TV White Spaces for Wireless Broadband Access by Alan Weissberger

Image courtesy of Google.

Alan Norman, Principal of Google’s Access Strategy group, presented the company’s plans for wireless broadband using white spaces at a Nov 2nd Wireless Symposium sponsored by Joint Venture Silicon Valley. Google wants to demonstrate that over-the- air TV and wireless broadband using white spaces can co-exist with licensed spectrum. In this article, a summary of Google’s efforts in this are given, including its trial in Capetown, South Africa, its proposal to share infrastructure among carriers and its muni-WiFi effort in Kansas City (where they are also deploying fiber to the home). Click here to read more.


AT&T to Expand U-Verse & IP-DSLAM; Bring Fiber to Commercial Buildings & Cover 99% of US with LTE! by Alan Weissberger

AT&T's wireline coverage
Image Courtesy of AT&T

In the most significant announcement since SBC acquired the old AT&T and became “the new” AT&T, the telco giant announced it will spend $14B over the next three years to expand its wireline and wireless networks under its newly coined “Project Velocity” initiative.  The company wants to move to an all IP network platform, which means they’ll be phasing out TDM transmission and the PSTN. Click here to read Weissberger’s unique take and the ensuing comments on this well publicized announcement.


Is 2013 the Year for a Revolution in Retransmission Consent Rules?

From multi-screen and over-the-top video to media consolidation, the technological and business landscapes have changed significantly since retransmission and must-carry rules were created by Congress almost 20 years ago.  Retransmission consent and must-carry rules have remained among the most contentious and challenging for operators offering video services.

It is an honor to be moderating a webinar panel on this topic in two weeks with Chris Cinnamon of Cinnamon-Mueller, John Hane of Pillsbury Winthrop Shaw Pittman LLP and Matt Polka of the American Cable Association. Email me with any questions you would like asked of these esteemed panelists. Click here for registration information.


Some Tweets and Short Thoughts:

  • I know this story is anecdotal at this point, but this could be significant for smart phone users and wireless carriers if a link is established between cancer and where a cell phone is carried on a person’s body.
  • As was alluded to in this earlier article, Olympusat announced a strategic partnership with Kit digital and Akamai,to offer Content Delivery Network (CDN), Enhanced Storage Capabilities, video transcoding and digital media players to its customers for multi-screen applications.
  • The SmartPhone as a digital thermometer. Will IR sensors & associated apps be the next point of differentiation for smart phone makers.
  • Am honored to have been a part of this and being able to help bring attention to the cool and important things these entities are doing in the production of local content.

The Korner: He Made a Difference

Warren Lee Presenting at 2009 NTCA Annual Meeting

We all make a difference. This thought comes to mind with the unexpected and untimely passing of Warren Lee from stroke at age 50. The former CEO of NeoNova, Lee and his team spun off the DSL service from Nortel. This team had developed the multi-megabit modem service; allowing independent telcos to offer DSL services for the first time. NeoNova continued to be a pioneer in that space, becoming a managed services provider for telcos throughout the country.

Click here to read this brief memorial and associated comments about Warren and the many people he touched in the rural telecom industry.

Google Advocates Unlicensed Spectrum Sharing via TV White Spaces for Wireless Broadband Access

Alan Norman, Principal of Google’s Access Strategy group, presented the company’s plans for wireless broadband using white spaces at a Nov 2nd Wireless Symposium sponsored by Joint Venture Silicon Valley. Mr. Norman joined Google’s Access Strategy team in 2010 and has since worked on a variety of projects and initiatives.

Google’s goal is to support robust, affordable and open Internet access – via both wireless and wireline technologies.  The company has been running the free WiFi network in Mt View, CA for several years,  is building out fiber to residential customers in Kansas City for 1 G bit/sec access, and (as described below) is involved in a White Spaces wireless broadband trial in Capetown, South Africa.

There are 4 ways to improve wireless network capacity, according to Mr. Norman:

  1. Use a better wireless broadband technology, e.g. 3G–>4G, higher speed WiFi (i.e. IEEE 802.11n or 802.11ac).
  2. Acquire more spectrum (but that can be very costly).
  3. Use smaller cells (macro–>nano or pico cells) with backhaul transport for each.  Smaller cells facilitate spectrum re-use within a given geographical area.
  4. Offload cellular traffic to WiFi hot spots (which use different spectrum than 3G/4G cellular networks).

Google’s view of how to achieve robust, affordable and open wireless access:

  • Support use of a balanced allocation of licensed and unlicensed spectrum
  • Advocate unlicensed spectrum sharing using  a dynamic spectrum management scheme
  • Wherever possible, support a shared wireless infrastructure (especially real estate, conduit and fiber back-haul)

Unlicensed spectrum is important because it enables:

  • Greater economies of scale in the number of wireless network endpoints and types of devices
  • Consumer identification, which results in increased investment in infrastructure
  • Lower barriers for new network operators (and new services)
  • Active competition and innovation across the value chain

Mr. Norman talked about use of TV white spaces as an example of dynamic spectrum access and spectrum sharing.  He said the U.S. has a lot of TV White Spaces (6 MHz unused TV Channels) that could be used for unlicensed wireless broadband access.  Google wants to demonstrate that over the- air TV and wireless broadband using White Spaces can co-exist with licensed spectrum.  This, in turn, would create economic opportunities and more available wireless broadband access in the U.S.


The Capetown TV White Spaces Trial:

A White Spaces wireless broadband trial in Capetown, South Africa was cited as an example of unlicensed spectrum sharing.  Alan said that 10 white space channels will be available for wireless broadband access with each one delivering 2M bit/sec Internet access to schools over 10Km distances from the carrier PoP (Point of Presence).

We later did some research on this trial and found the following information:

A group of partners, including Google, TENET, CSIR Meraka Institute, eSchools Network and WAPA, has formed to run South Africa’s first TV White Spaces trial (TVWS trial). This wireless broadband network will make use of spectrum which has been allocated to broadcasting services in South Africa, but which is not currently used (hence the term TV white spaces).

The objective of the TVWS Trial network is to provide a fast and reliable connection to the schools identified.  The trial is being overseen by ICASA- the communications regulator of South Africa.

With ICASA’s support, this group will plan, execute and report on the results of a TVWS trial to 10 schools in Cape Town in order to:

  1. Demonstrate that TVWS can be used to deliver affordable broadband and provide important Internet services without interfering with TV reception
  2. Dramatically increase awareness of the potential for TVWS technology in South Africa and on the continent more generally.
  3. The Trial Network – The trial will be conducted across a TVWS Trial Network which will include a Base Station (high site or BS) and approximately ten schools (Trial Sites) located within a 10km perimeter around the high site.

This TVWS trial network is expected to launch in December, 2012, according to Arno Hart, TENET‘s project manager for the trial.

For more information, see:

http://www.tenet.ac.za/about-us/the-cape-town-tv-white-spaces-trial

http://mybroadband.co.za/news/wireless/62522-tv-white-spaces-broadband-network-here-soon.html

Google’s goal in this and other experimental projects is to demonstrate that TV broadcasts and wireless broadband can co-exist with licensed spectrum. They also want to show that wireless broadband using white space frequencies will not interfere with TV reception.


Proposal to Share Mounting Spaces, Power and Fiber Back-Haul Facilities:

Mr. Norman said that the cost of telecom equipment is tracking Moore’s law for semiconductors.  However, the cost of construction, civil works, conduit for fiber cables, etc continues to increase.   This has an adverse impact on fiber optic based wireless back-haul

One solution would be to share the conduit or fiber (presumably different carriers would get different fiber cables within the same conduit or use different wavelengths over the same fiber cable via DWDM).  Alan said that power for base stations/wireless access points mounted on poles or street lights could also be shared.

The bottom line here is that sharing back-haul facilities among multiple wireless broadband access providers, including light pole sharing for mounting different wireless network nodes there, would lower barriers to entry and free up capital for network growth.


Call for White Space Wireless Broadband in the U.S.:

Figure 1, heat map showing number of channels available for white space communications. Rural areas have the greatest availability. Image courtesy of Google.

Mr. Norman summed up by calling for White Space based wireless broadband in the U.S.  He said that there are plenty of unused TV channels in the 400M to 698MHz band.  He hinted that with less than five percent (5%) of the population watching over-the-air TV over only a few channels, that as much as 250 MHz of spectrum might be freed up for wireless broadband.

After his talk, I asked Alan what technology Google proposes to use for White Space based wireless broadband, considering that the standard IEEE commissioned for that is a commercial failure (802.22) with little or no global deployments.  He cited IEEE 802.11af for WiFi sharing and said there was work going on in 3GPP for spectrum sharing using LTE (that’s news to me!).

AW Comment:  Wireless broadband via TV white spaces would be particularly useful for deployment of rural broadband, because it would give rural residents broadband wireless access in areas that U.S. carriers feel aren’t densely populated enough to justify a 3G or LTE build-out.

According to the UK Telegram,

“Google and Microsoft are expected to launch a major charm offensive to win control of the valuable airwaves. They could also use the white spaces to provide widespread broadband access, potentially giving them an important calling card with which to win over customers. Google could use the white spaces as a way of offering free wi-fi services to customers with phones powered by its Android operating system, as well as to other members of the public.”

For more information, see:
http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/digital-media/9653318/Google-and-Microsoft-go-on-wi-fi-offensive.html

Investment focused Forbes magazine recently weighed in on the rumored Google-Microsoft White Space broadband push in the U.K.

“Could it be in fact that Google and Microsoft also see a way to augment their ability to control infrastructure? And will CISCO be forced to make move into a more consumer-oriented mode? In effect, White Spaces look like a new broadband mobile system.”

For more information, see:
http://www.forbes.com/sites/haydnshaughnessy/2012/11/05/why-google-and-microsoft-are-competing-for-the-airwaves-and-what-it-says-about-opportunity/


Muni WiFi access in Kansas City’s Google Fiber Neighborhood:

During the Q and A, Mr Norman said that there was a muni-WiFi component to Google’s Kansas City FTTH trial.  We did some research on this capability and came up with the following:

The Kansas City Star reports that, in promotional fliers for the Google Fiber service, the company said it would also install “Google-powered WiFi hotspots in your favorite public spaces around Kansas City.”  A spokesperson for the company said that the WiFi hotspots were part of the agreement with both cities for the initial Google Fiber launch.

Google will install, at their expense, WiFi antennas at over 400 locations in Kansas City. While the WiFi can be set up to be free for the public to use, Google’s spokesperson said, “It’s really up to the discretion of the public building managers.”

For more information see:
http://www.neowin.net/news/google-fiber-to-offer-wifi-hotspots-in-kansas-city

Reference:

A more complete summary of the Nov 2nd Wireless Symposium, including keynote presentations from Leon Beauchman, Director of the Wireless Communications Initiative at Joint Venture Silicon Valley, and Congresswoman Anna Eschoo is at:

http://community.comsoc.org/blogs/alanweissberger/summary-nov-2nd-wireless-symposium-sponsored-joint-venture-silicon-valley

[Editor’s note: The heat map, in figure 1, showing channel availability was added to this article on 11/15. Thank you Mr. Norman for sharing this important visual aid.]

Viodi View – 08/17/11

Alan Weissberger may have said it best when he suggested that the Google purchase of Motorola Mobility is representative of what has become a sort of patent mania these days.  At approximately $734k per existing patent or $500k if pending patents are included, this is a good deal compared to the $750k per patent that the Apple/EMC/Ericsson/Microsoft/RIM/Sony consortium paid for the intellectual property assets of Nortel.  Those figures ignore Motorola Mobility’s business ($3.3B revenue in the latest quarter and $3B+ cash in the bank) and the well reported synergies of bringing a hardware manufacturer with deep ties to service providers into its fold.


VC Falling over Internet Start-Ups, Telecom & Networking Left in Dust; TiE Angels Wins for Smaller Deals! by Alan Weissberger The just released PricewaterhouseCoopers National Venture Capital Association MoneyTreeTM Report for 2Q-2011 contains some very revealing information about the amounts and types of companies venture capitalists (VCs) are investing in. VCs opened their wallets and invested $7.5 billion in 966 deals in 2Q-2011. That was an increase of 19% in terms of both dollars and the number of deals compared to the first quarter of 2011 when $6.3 billion was invested in 814 deals. The quarterly investment level represents the highest total in a single quarter since the second quarter of 2008.  Click here to read more.


ViodiTV @ WSTA
ViodiTV @ WSTA

Sponsor Message Sponsor WSTA’s Fall Conference and receive video vignette produced by Viodi. This sponsorship generates revenues for WSTA and is specially packaged by Viodi to produce short video interviews, customer testimonials, or product highlight video segments. Click here for more details from WSTA website.


TiE Angels 1 Year Check-Up: Outstanding Health & Getting Stronger! by Alan Weissberger Just over one year ago, TiE Angels was started as an experiment by the Silicon Valley (SV) Chapter of TiE. Short for “the Indus Entrepreneurs,” TiE is the world’s premier non-profit organization promoting entrepreneurship. The Angels seem to fit perfectly with TiE’s charter–to inspire the next generation of entrepreneurs and to educate and mentor them. TiE had been doing this with great success for close to 20 years but somehow it did not provide an organized platform for angel investing until August of 2010.  Click here to read more about this unique organization.


Original Content 

John Penney of Starz
John Penney of Starz

Last week’s announcement of the Starz, LLC partnership with the BBC to co-produce content for their respective networks was hinted at in this interview with John Penney, EVP of strategy and business development, of Starz at the 2011 Connections™.  He was a keynote speaker at Connections™ and one of the things he spoke of is the continued high cost of making television programming.  He said that there are overhead costs that continue to make scripted television expensive.  Click here to view.


Fiber to the Wireless Drop

Rob Riordan at IP Possibilities-2011
Rob Riordan at IP Possibilities-2011

Building a robust last mile is a challenge for broadband operators.  In this interview, filmed at the 2011 IP Possibilities,  Rob Riordan, EVP and director of corporate development for Nsightan award-winning pioneer in the deployment of femtocell technology, advances an idea for using hardened femtocells at the pedestal to solve the drop part of the last mile access challenge.  Click here to view.


New Telecom Services that Capitalize on Broadband Connectivity – Part 3 by Alan Weissberger The theme of this three-part series is to examine potentially new and different telecom services that enable telcos to participate in the value chain created by broadband Internet access. Pressure is on telcos to build out their fiber based and/or mobile broadband networks for greater coverage and higher traffic carrying capacity. Yet it is other companies (and not the telcos) that are making money from the value added services and apps they’ve created which take advantage of the telcos broadband network. So are telcos nothing more than purveyors of a fat, dumb pipe? Or can they find new services that will generate revenues and profits? That is, can telcos transform a “dumb pipe” into a “smart pipe” which they can make money from?  Click here to read more.


Crossroads for Mobile Carriers

Harry Wang of Parks Associates
Harry Wang of Parks Associates

Mobile carriers are at a cross roads in terms of being able to monetize the investments they have made in their infrastructure, according to Harry Wang, Director of Health and Mobile Research for Parks Associates.  Looking at other markets and ways, such as Machine to Machine connectivity, to build on that infrastructure will be critical in order for them to justify their network investment.  In this interview, Wang indicates that the carriers have only just begun to exploit these new opportunities.  Click here to view.


Some Tweets, Google+ & Other Short Thoughts:

  •  IAB Opposes New Web Domain Program From ICANN – This seems like a cybersquatter opportunity-albeit ones w/deep pockets
  • Gadget support services going mainstream, as evidenced 2 clever ads in the same 30 minute program for Xfinity’s (Comcast) Signature Support.
  • bitflx – interesting spin on local content from former Raynet colleague who makes video relevant to locale & time
  • Sign of the times – so my 12-year-old,tech savvy son asks me, in all seriousness, to look at a paper phone book. He says he never has seen one and can’t believe that it could hold all the phone numbers of our county. Interestingly, we couldn’t find one in our house.

The Korner – 11 Miles Down Pena Boulevard Pena Boulevard is a familiar trek for anyone who has rented a car out of the Denver International Airport.  The drive through the prairie to I-70 seems like the world’s longest off-ramp and can be frustrating for someone who wants to just get to their destination.  After listening to Sean Riley’s track, Pena Boulevard, I now think of that song’s hook line, instead of the realities of this lonesome road.

image courtesy of seanriley.com

Pena Boulevard is off Riley’s album, Not Like Them, and is representative of  his music, which has a 70s feel and is reminiscent of artists from that era, such as Roger McGuinn or Dan Folgerberg.   The lyrics of the dozen songs on his Johannes Luley-produced CD are personal and range from heartbreak to the frustration felt by an overnight disc jockey.  The songs are radio friendly.

What makes Riley unique is that, despite what his album says, he is like us, at least in one sense.  Being entrenched in the distribution side of the media business (you can find him in past ViodiTV interviews), he has a bit of a double life, as hinted at in his song, Somebody Else.  And Riley’s story of what he has done to create this first-rate album while having a day job reminds me of the first lesson of local content – that is, talent is often in our midst. And, if you are in the LA area on August 26th, you can catch this talent at his CD Encore party at the Genghis Cohen restaurant, bar and music room.

A Boon for IPTV Operators? – GoogleTV’s Acquisition of Widevine

Access to mainstream programming is one obvious reason Google purchased Widevine (announced on 12/3). With Widevine’s well-respected content protection system it should follow that the major TV brands will release their product in one form or another to a GoogleTV offering. With Widevine, Google could allow the content owners to set their own rules for how they package and sell their product on GoogleTV.

A less obvious meaning of this move is that it may create a new middleware option for IPTV providers. At last month’s TelcoTV, Iacta demonstrated their casual gaming service operating on the GoogleTV platform (see page 10 of the latest edition of Screenplays Magazine for my article on this demonstration). Iacta’s port to GoogleTV preserved the ability of the operator to include their branding as part of Iacta’s service. In other words, from a customer user interface perspective, it looked like an Iacta/Operator-branded service and not GoogleTV.

Using Iacta’s demonstration as an example, why couldn’t operators customize the open source GoogleTV to create their own interface? The addition of the Widevine content protection system would provide the authentication and security necessary to assuage the concerns of content owners. If someone were to add the hooks into things such as billing and Emergency Alert System, GoogleTV might serve as sort of an open source middleware for traditional, franchised IPTV systems.

This might significantly improve cost, time-to-market and innovation compared to the traditional approaches to IPTV. I think Google would encourage this type of development. For instance, their online bookstore, that will soon launch, centers on the revolutionary idea of working with independent booksellers. In this light, it is not hard to fathom a scenario where Google, through its purchase of Widevine, encourages independent Communications Service Providers to adopt their platform in order to promulgate GoogleTV.

What do you think? 

Image courtesy of Iacta

TiECon 2010 Report: Wireless Market Status, Trends and Future Directions

Introduction

TiECon is 'The Indus Entrepreneurs' (TiE) flagship annual conference and signature event. It typically draws a mix of entrepreneurs, venture capitalists, investment bankers, market researchers, technology executives and strategic marketing professionals from all over the world. The participants come together to network, learn and hear about latest industry and technology trends in the varied fields of software, mobile computing, biotechnology, clean technology, Internet and others.

At TiEcon 2010: It’s in Your DNA, we attended a "Business Boot camp" session on communications and networking skills, as well as three sessions related to Wireless Communications . The conference was held May 14-15th in Santa Clara, CA. The three wireless sessions were:

  • Wireless Power Connect 1 – The Big Market Triggers

  • Wireless Power Connect 2 – Audience Engagement and Metrics in Mobile – Leveraging Mobile Apps, Metrics and Targeting to Drive Value

  • General Session: Mobile Consumer and Enterprise Applications – Leveraging the Power of LBS and Real Time Web

Hakan Eriksson, Sr VP and CTO of Ericsson, made a very interesting comment at a pre-conference VIP panel session which set a high bar for the wireless sessions to follow. "Connectivity is the most important requirement between the cloud and device. Though we have started taking it for granted like breathing, more needs to be done in the US to invest in connectivity," he said. This seems quite reasonable, as more and more people use mobile computing devices (e.g. smart phones, eReaders, and tablets), enhanced and better wireless connectivity is needed for broadband Internet access and to cloud computing services. With current 3G networks at or near capacity how will they accommodate all the new bandwidth hungry devices forecast for the next few years? And how can such connections be made more reliable and available- independent of the user's location within a cell or sector?

This first article in a two-part series, reports on the first TiECon wireless session, which actually covered much more than its title – “Big Market Triggers.” The session assessed the changing wireless world landscape, examined the new market dynamics, and explored future opportunity areas for entrepreneurs in the wireless space. But first, a word about the TiE 50.

TiE 50 Wireless Winners for 2010

The TiE50 list of top start-up companies was started in 2009. Last year's winners created over $2B in market value. Several of the winning companies enjoyed successful exits (great for VC investors) within just the last year. There were 4000 submissions received for the 2010 TiE50 awards. Vish Mishra, President of TiE Silicon Valley had this to say: "The TiE 50 represents the best in entrepreneurship. The winning companies have to be risk-taking yet pragmatic, visionary but market-aware, and a passion to be the best. We hold up these companies as role models for any enterprise, big or small, established or being incubated, which aspires to success in a dynamic and demanding marketplace. We fully expect that the TiE 50 winners in 2010 will build on the success of winners in 2009 like Kazeon, Mimosa and Mint.com." Within the 2010 TiE 50, there were 10 winners in the Wireless space. These were: Avatron Software; BuzzCity Pte Ltd.; deCarta; Metismo Ltd.; mFoundry; Movirtu Limited; Rayspan Corporation; SiBEAM; SpiderCloud Wireless; and Ubiquisys. The complete list of winners may be viewed at:

http://www.tie50.net/Winners/

 

Review of Wireless Power Connect 1. – The Big Market Triggers

Session Description (from TiE):

The mobile ecosystem couldn’t have finished the decade with more of a bang. Android was the face of the show at MWC with 200M mobile devices forecast by the end of 2010. Mobile advertising has finally hit that tipping point with the Google and Apple acquisitions of Admob, Quattro and others. App stores have gone mainstream creating an ever-larger battle of control between OEMs and operators. Location services are finally emerging with proximity advertising and Google Maps becoming the industry standard. At the same time, Microsoft has shown that they may still have their mojo with an overwhelmingly positive response to the Windows Mobile 7. And Nokia may be passed their trough showing improved earnings while Apple continues to lead the charge. All of this represents only a preview of some of the many hot-button issues in 2009. This panel should make for some great industry debate and discussion!

Moderator: Mark Lowenstien, Managing Director, Mobile Ecosystem

Panelists:

  • Sudhi Herle, VP of Mobile R&D for Samsung

  • Mario Queiroz, VP Product Management, Google, Inc.

  • Arpit Joshipura, VP Strategy and Business, Ericsson Silicon Valley

  • Richard Wong, Partner, Accel Partners

Session Summary:

TiE host Raj Singh welcomed the attendees by stating, "The wireless industry has never been so exciting. There are a great variety of new (mobile) devices, corporate acquisitions, and many innovative applications."

Moderator Mark Lowenstein of Mobile Ecosystem followed with a few opening remarks and issues for the panel to discuss.

"Where's the (mobile) industry going?" he asked and then attempted to set the stage for the panelists to answer that question by detailing the changes the industry has experienced.  Mark noted that there has been an important shift in the balance of power in the wireless industry, with Apple and Google playing a much more significant role in the mobile ecosystem. This has resulted in substantially lower "barriers to entry" for applications sold through (Apple) app stores and mobile devices that support the (Google-led) Android platform. There has been "unbelievable growth in mobile data." It now accounts for 30% of mobile operators revenue. (Ericsson claims that in Dec 2009, mobile data traffic surpassed cellular voice traffic for the first time). A few other data points are the following:

  • Smart phones account for 35% of North American cell phone sales now, up from zero before the iPhone came out a couple of years ago.

  • There is an accelerated and compressed innovation cycle in mobile data. Network operator CAPEX has increased – even during the recent recession- to handle the big boom in mobile data traffic.

  • Wireless is a very personal technology, especially when it is location enabled. Mobile advertising is and will take advantage of personal user preferences and locations to deliver more targeted ads.

  • But there are limitations (or impediments to growth): small screen size, difficulty inputting data (via keyboard or touchscreen), ROI economics of wireless are very different from fixed broadband wireless access, network capacity and aggregate bandwidth limitations have been important issues for mobile network operators (especially for AT&T's 3G network). Mark did not mention battery life/ charging as a limitation, but it did come up in the Q and A session.

The key wireless trends, according to Mr. Lowenstein are the following:

  • Growth of app stores to sell applications developed by small, embrionic software start-ups

  • Finding better ways of discovering (presence and location) of mobile data users

  • Voice will play a key role in mobility (presumably referring to Google voice and Skype over VZW)

  • How will "Always on" devices be distributed and priced?

  • Mobile commerce and advertising offer huge opportunities. How will this evolve?

In these opening remarks and later comments, Mark did not address issues related to Machine to Machine (M2M) communications, "the Internet of things," the battle of mobile media players (e.g. Adobe Flash disallowed on Apple iPhone and iPad), impediments to mobile data growth (especially capacity limitations of 3G networks), or fixed/ nomadic wireless broadband access (e.g. WiMAX). But in fairness to him, this 75 minute session was too short to cover all the important wireless issues.  In fact, it went into an "overtime" Q and A session, as described below.

Sudhi Herle of Samsung made many profound, insightful comments during the discussion. His first of these was, "How can multiple (wireless) devices be linked together to create a better and more cohesive user experience? There are less than 500M smart phones worldwide. How can we make them more relevent to the farmer in India, the fisherman in Bangladesh, and the 3.5B mobile users in the world?" Sudhi asked, "How can a smart phone enrich a person's life and make it more meaningful?"  The challenge for device makers is to be able to target a "smart" handset to a particular class of users, who will need customized applications. Mr. Herle believes the industry needs to pay more attention to consumer satisfaction. We concur.

According to Sudhi, "Everything we call a smart phone is in reality a dumb phone. There are too many clicks required for the user to get to where he wants to go. As a result, the smart phone is actually just a small PC in your pocket. There is no inherent smartness in the smart phone. Why isn't there an app to tell me what the traffic is like on my route from home to work in the morning?  The challenge is to make the phone smart, relevent, timely and cost effective for the user." 

In a post session email exchange, Mr Herle stated that the "Traffic and Commute" smart phone app is not very difficult to do at all.  However, no one has done it yet.  Here are the suggested steps to realize it:

   a) User selects one of many routes as their "favorite" and saves it.
   b) Traffic information is available as a service from many operators and Google
   c) It is straight-forward to match the traffic alerts to the saved favorites routes.
   d) If there is a match, display an alert to the user, else, don't.

A really smart phone could recorded the user's daily commute and over time "learn" which routes are most frequent. The "learn" part is based on statistics.  Then, the app woud match the traffic alerts to the learned routes and notify the user accordingly.

 

Mario Queiroz, VP Product Management for Google's Android Program offered quite a bit of insight and plenty of statistics.

He described Android1 as "an open mobile OS and application platform" that has reduced the cost of mobile devices by 20% (no source was given for this statistic) and has stimulated the creation of many new mobile apps. Google expects "the mobile web will bring the Internet into the hands of many more people." This will be accomplished via a large range of mobile devices, form factors, display and keyboard types. 

Editors Note: Google is only working with a small number of Android enabled device vendors, e.g. Motorola and HTC and is no longer selling Android phones on its web site.

According to Mario, Android and the mobile web will make the wireless space a lot smarter (but how?). The more people use the Internet, the more they will use Google search and Google apps.

In its first two years of existence, the mobile Internet has grown eight times faster than the wireline Internet during its comparable first two years (no source was given for this statistic). For Google, "mobile has become the primary Internet access device." Mobile device search generates five times more search queries than for fixed access PCs. And smart phone searches are 30 to 50 times more than searches initiated from feature phones.

A very interesting statistic was that for Android enabled smart phones, 30% of searches have been through voice queries (rather than touch screen or keyboard entries). Another is that there are more than 50M active users of Google Maps- most of them from mobile devices. 65K Android phones are sold everyday by Google and partners (e.g. network operators offering Android phones from Motorola and HTC). Mario ticked off the following key issues for the mobile industry:

  • Availability and adoption of 3G and soon 4G mobile data networks

  • Smart browsers and OS's (e.g. Chrome OS) to make Internet access simpler and faster

  • Making phones "smarter"

  • Powerful application development platform (e.g. Android)

  • Simple data plans (will flat rate with costly overage charges prevail in the near future?)

Arpit Joshipura, VP Strategy and Business, Ericsson Silicon Valley has a very keen perspective on the wireless industry. He has twice participated in IEEE ComSocSCV meetings in the last six months on the topics of IP, converged networks, LTE, and the mobile packet core. Ericsson is the world's largest telecom equipment and wireless infrastructure vendor. Their equipment is in 180 countries, including AT&T, T-Mobile, and LTE/EPC wins at Verizon and Metro PCS in the U.S. They also manage network operations for Sprint's wireless and wireline networks.

Here are a few key industry trends he sees:

  • A tipping point was reached in Dec 2009 when mobile data traffic first surpassed cellular voice traffic at 140K terabytes per month and forecasted to grow at a 100% annual growth rate (by Cisco and several market research firms).

  • Huge connectivity will happen from M2M communications. The industry should think beyond phones and consumer gadgets. Ericsson predicts there will be 50B connected devices by 2020.

  • U.S. has taken the lead in mobile devices and 3G network access. Carriers (AT&T and VZW) have judiciously used the 700MHz spectrum they've acquired

  • Network and infrastructure business case: 1G bytes of mobile data costs < $1 to produce. So operators charging $30 per month for a mobile data plan can make money. (But I don't think Arpit took into account that data plan also has to recover the cost of the mobile handset that carriers heavily subsidize- please see Sudhi's emailed comments below).     

  • In a post session email, Arpit stated, "this was a Europe Business case where subsidies are not that common."

  • LTE is real! Telia-Sonera has deployed a live LTE network in Sweden (with Ericsson gear, of course). Users there are getting 20- 50 M bits/sec in motion, which is true 4G performance. At the MWC this year in Barcelona, Ericsson demonstrated 1.2 G bits/sec over the air with LTE.

Richard Wong, Partner, Accel Partners said that relative to 10 years ago, business conditions have changed dramatically for mobile network operators. The industry is moving from a carrier centric/ walled garden model to an open model for devices and applications. Android is breaking down the walled garden and creating new opportunities for start-ups and new players to enter the mobile eco-system. The caveat is that there's a lot of fragmentation in this space. Differentiation of device (software) platforms limit interoperability of applications.

Mark Lowenstein chimed in that "there are tectonic changes in business models and the balance of power in the mobile space. He asked what are the real needs of the industry.

Richard responded first by suggesting the mobile industry needs to be more intuitive with better discovery (of what?) capability. Mr. Wong also believes that mobile context should be integrated into voice activated searches. Location Based Services (LBS), the subject of the third TiECon Wireless Session, was described as a "worm hole between the real world and the digital world." The challenge is to relate the digital world to real world transactions via LBS's.

Arpit surprised some attendees by saying that Ericsson is NOT looking for incremental innovation (as is the case with many research labs today). On a global scale, Ericsson i looking for disruptive technologies that can change our thinking and improve the user experiences. They are looking for technologies with "built-in" interoperability that might solve the problem of market fragmentation. For example, interoperable multi-media technologies that might replace point to point or multi-point video conferencing. "Value and experience wins, not technology," Arpit said (and we certainly agree with that from over 40 years of experience).

How will the 50B connections (projected by 2020) get used? Arpit opined they'd be mostly in health care and automation. Not necessarily smart grids or utility networks, which are "taking a different standards track." What kind of network demands (bandwidth, latency, jitter, error rates, reliability/ availability) will these huge number of devices require? And how will they all get integrated into the back end of the network?

Mario jumped in to state that "cloud services are very enticing for many entrepreneurs."  The key is to be able to take advantage of cloud platforms to build applications.

Sudhi shifted the topic to LTE by asking "what does LTE mean to the average (mobile) consumer?  Answer: speed and latency.  There is almost a 10x speed improvement over 3G and the latency of a Google search query will be noticably shorter.   He then related LTE with cloud computing:  "Cloud services will enter a totally new dimension with a 10x improvement in bandwidth and latency for an "always ON" device. This will help mobile users quickly find information and experience new services that take advantage of faster speed and lower latency.

Arpit agreed that connectivity to the cloud will be extremely important.  He further opined that mobile network operators are at a very low level in the value chain.  They currently own the licensed spectrum – a precious resource equivalent to oxygen.  They also provide billing, customer care, and back end network management.  However, they need to move up the value chain to capitalize on the mobile broadband opportunity.  Will they focus their efforts on value added services over LTE?

Mobile operators took their time getting 3G deployed in mass, but it looks like LTE might be deployed much faster.  There are already 65 mobile operators committed to LTE and there is a massive push to show innovation and leadership.

Mario then weighed in with the comment that Android device are being shipped by 62 mobile operators that have 3G networks.  He would like to see operators invest in technologies to make networks "smarter."

Sudhi said that the operators have a key role to play, but for how long remains to be seen.  Users don't want to pay more than $199 for a smart phone, but the production cost is much higher.  If operators continue to subsidize smart phone sales (hoping to make up the difference in multi-year data plan contracts), they will charge many users more than they are willing to pay for service, especially if they exceed the traffic quota and incur overage charges.  Wireless is a last mile technology, where operators pay for spectrum and infrastructure.  Sudhi estimated it costs the operator $5 to $15 per subscriber per month to recoup the cost paid for the licensed spectrum it owns.  

Another issue is trust.  Customers trust Amazon, Google and Yahoo, but not most mobile network operators.  How can operators win users trust?  Can they do so just by providing mobile access, reselling phones/devices, offering flat rate data plans and doing mobile billing?  That remains an unkown, huge question mark.

In a post session email, Sudhi elaborated on the changing role of the mobile network operator.  He made three important points:

  1. Consumers are unwilling to digest a price point of more than $199 for a smart phone.  Since the cost of a smartphone is much higher than $199 (it's between $800 – $1K), the operators have been subsidizing the difference and recouping the cost by locking in the user to a multi-year contract.  If the operators don't continue this subsidization, then adoption of smartphones       will fail. This subsidy is one of the main reasons for the explosive adoption of
  2. Apple's iPhone $5-$15 per month – the spectrum auction cost, when spread across the mobile subscriber base, works out to $5-$15/subscriber. It is a one time thing.  In other words, spectrum is NOT free and subscribers (eventually) will pay for it.
  3. Trust – my observation is that a consumer already has a "trust relationship" with Amazon, Google etc. for reasons that have nothing to do with wireless. So, when there is Internet connectivity in the palm of your hand the operator providing that mobile connectivity is in some sense "marginalized."

Richard said that operator are in a very difficult position and would not likely be the portal to provide consumers with a variety of mobile services.  Who will was not mentioned.

This author believes that operators are in danger of being marginalized or disintermediated by value added players that use their infrastructure.

Arpit affirmed that charging and billing plans would need to change to attract more mobile customers.  But how and when?

The topic than shifted to mobile advertising.  What opportunities are there for innovators in that space?

Mario noted that mobile display advertising has gotten a lot smarter and better, but it's a very young industry.  He believes we'll see a lot of targeted ads, based on customer preferences, in the near future.  By knowing the mobile subscribers location, what her or she is doing, mobile ads can be more personal and hence more effective. 

Richard commented that "we're at the end of the beginning" in this space.  He noted the "phenomenal growth of AdMob's presence" and predicted that "the gradient of distribution (of mobile ads) would spread out."  There are "massive opportunities" to add value here, he concluded.

Sudhi opined that "mobile advertising is in its infancy."  The goal should be to facilitate or complete a transaction.  The number of transactions the ad produces should be the most important metric; not CPMs (Cost per thousand impressions). The CPM model refers to advertising bought on the basis of impression,  in contrast to the various types of pay-for-performance advertising, whereby payment is only triggered by a mutually agreed upon activity (i.e. click-through, registration, sale).

Arpit commented that global (mobile) advertising revenue only pays for 30% of the mobile infrastructure, which is insufficient to subsidize "free" content.

Mario got in the last word on this topic, by stating that "due to improvements in mobile browsers, the mobile web is becoming more like the desktop web.  Queries on mobile phones are simpler than they've ever been and this will be a big boon to mobile advertising."

Question and Answers

There was only time for a couple of questions from the audience as the session time had expired.  The first such question in the "overtime" session was about power management and battery life of mobile devices.

Sudhi noted that battery life has actually decreased in recent years and that most people carry arround chargers to recharge their mobile devices when not in use.  He said there is a constant battle (more like a tug of war) between advances in battery technologies and power hungry rich functions built into mobile devices.

Arpit offered a way forward.  He suggested that app developers need to work on understanding and writing energy efficient applications that don't use too much power.

Sudhi said that it was the LCD screen that was the biggest power hog on mobile phones today.

The next question was for Sudhi who was asked to elaborate on his earlier remark about the need for innovation on low end mobile phones sold in developing countries (e.g. India and Bangladesh).  He said that Samsung and the industry at large was grappling with the relevency of producing smart phones for poorer developing countries.  "The low end market is extremely cut throat," he said (meaning that any profit margin would be hard to realize).

Sudhi then brought up an area that he thought might be attractive to entrepreneurs involved in analog circuit design:  how to reduce the complexity of supporting multiple radios, operating over multiple frequency bands, in the same hand held device?  He suggested the solution might be tunable antennas and analog front ends.  Better and more efficient power amplifiers are also needed, he asserted.

At this point, Mark closed the session and invited the attendees to move to the reception area for networking.  This author attempted to do so, but was unsuccessful.  The reason why is beyond the scope of this article.

Stay tuned for the second article in this series and please submit comments in the box below.  Type "anonymous" if you don't want to reveal your name.

 


 

1 Google's Android was the fourth most popular operating system on smart phones sold in the first quarter, according to the Gartner Group. This puts the company ahead of Microsoft (Windows Mobile) and in a very good position going forward, as mobile web browsing and search may soon surpass desktop and notebook PC web access.

The Korner – There Is a Map for That – Just Make Sure It's Accurate

Just in Time; a manufacturing buzzword phrase from the 1980s reminds me of travel these days. The advent of smart phones and communications eliminate much of the friction of getting from one place to another. With GPS and integrated mapping on a smart phone, one does not even need paper to navigate his way around a strange locale. 

So, the night before heading out to the IP Possibilities conference in St. Louis, I decided it was time to make my hotel accommodations. Being naturally parsimonious and given that I would see my room for all of six or seven hours, I carefully calculated the price versus distance equation and, using Google Maps and its search feature, found a hotel approximately three blocks from the conference center. I couldn’t and, in retrospect, shouldn’t have believed my good fortune that I would find a room for $56 in an upscale neighborhood; Internet was included, so I was a happy camper.

Departing the airport, I shunned the taxi and opting instead for public transportation in the form of light rail. My smartphone gave step by step directions from the light rail train station to my destination and the walk in the early evening air was quite pleasant.

A map with a corrected crowd-sourced descriptionThe neighborhood was lovely and I figured the motel must be a converted apartment because of the residential nature of the locale. Then, my smartphone told me I had passed my destination. Totally confused, I reverted to something people used to do last century and asked a couple for directions.  They were more confused than I was, as they said there was no La Quinta Inn & Suites nearby.

I took another look at the map on my phone and, although it showed a hotel at 318 Taylor Avenue (along with its website and phone number), I found another La Quinta Inn & Suites at another address identified as 318 Taylor Road in Hazelwood, MO; a suburb of St. Louis; the real La Quinta Inn & Suites was in a neighborhood one would expect for $56. A $45 cab ride later and I was enjoying the bundled internet of this rather remote La Quinta inn & Suites.

It was a bit painful when I figured out that I spent more on cabs, than I did my accommodations and that I could have spent the same total amount and stayed with the rest of my tradeshow colleagues had I just not attempted to be so frugal. Oh well, at least I got a priceless story and I learned a valuable lesson about being a bit more weary of what I read on crowd-sourced web sites. Oh, and as shown in this picture, I did change the description on the Google map to "apartment," so someone else won't make my penny-wise, pond-foolish decision.