Lots of Possibilities With the Right Mindset

Mindset change, new business opportunities and cybersecurity are three terms that describe some of the highlights of last week’s 2015 IP Possibilities conference and trade show. The sessions were terrific and the exhibit floor featured some interesting innovations, but the best part of the show, was the interaction with innovators from around the country. In the near-future, we will point readers to a series of Viodi-produced videos about the event, but, in the meantime, here are some highlights.

David Seda describes his concept of the service provider flop.
David Seda & The Service Provider Flop

Tim Bryan, NRTC CEO, kicked off IP Possibilities with a humorous introduction that one could say was about a completely different mindset than telecom. Flipping the mindset to a customer viewpoint was the theme of David Seda’s entertaining keynote speech. He emphasized the service providers need to develop products from the needs of the customer, instead of leading with the network side of things.

Changing culture to be more nimble, react and create the type of services that customers need, was a common theme, even in panels that were ostensibly about technology. Jeff Leslie, CEO of ITS Fiber, emphasized the importance of bringing on board the right sort of staff when he stated, “Don’t be afraid to hire people you can’t afford.” His point being that knowledgeable, trained people will help retain existing and generate new business that will more than pay for the salaries of those skilled individuals.
There were plenty of ideas on how to create new revenue streams at this two-plus day event. Examples of new revenue services included approaches such as:

  • Using fiber networks and secure local data centers to sell cloud voice and IT Services to local and, with the help of groups like WIN and INDATEL, regional and major corporate businesses
  • Installing and managing Bluetooth Low Energy devices that help businesses and institutions provide information on a micro scale to consumers
  • Creating skinny managed broadband video services that complement over-the-top services and provide a new offering to those consumers who don’t want to pay for a cable package filled with content-owner, required programming.

Regarding content challenges, Tom Whitaker, Vice President, Cable for Shentel, a Virginia-based rural operator said, “They are in the content business and not the customer business.” Whitaker was referring to content providers, whether they are providing their content through the operator or as an over-the-top service.

He also made the important point that content is not just video, but includes customer generated and purchased content, such as email, online documents, music and books. His comment was made in the context of Google and their decision to drop their ISP program and the negative repercussions that will have on the consumer of those services.

Whitaker mentioned that one of the features they liked about Google Apps Partner Edition™ and one of the reasons they moved 20k accounts to that service was its effective spam control. Spam is really a window into the threat posed by cyber criminals and terrorists.

The importance of fighting cybercrime through operators’ adoption of the NIST cybersecurity framework was made clear in an excellent panel moderated by NTCA’s Jesse Ward and featuring the FCC’s Jeff Goldthorp and Silver Star Communications’ CFO Jeff England.

That a CFO gave the presentation indicates that cyber security is primarily a business and process decision and secondarily a technology issue. England discussed how they went about implementing the NIST framework and it started with a commitment from leadership. England’s views were echoed in another excellent session that the seemingly overwhelming NIST framework can be split into baby-sized steps.

The important thing is to get started. Bill Trelease, Vice President/CTO of Delhi Telephone, suggested mapping out one’s network and identifying those customers with critical infrastructure (e.g. hospitals, institutions, etc.) and identifying weak points. In many ways operators will find that they are already doing the things that need to be done and it is the conversations with vendors and customers that will provide the most value in both identifying gaps, as well as opportunities.

Jeff England has found that the process has given them a competitive edge, as customers are becoming more aware of the dangers of cybercrime. Keeping customers’ data on-network (away from the Internet) offers potential new revenue opportunities for operators. Still, as he points out, the government needs to aggressively find and prosecute the people behind cyber crimes.

Stay tuned for links to the video interviews with many of the folks mentioned above, as well as many others who had valuable insights about the possibilities of IP and the opportunities it opens to service providers.

Viodi View – 05/16/12

A long time ago, a friend once made the observation that frequent travel allows one to see some unusual things and meet people who either are unusual, famous or both. He said that people sometimes didn’t believe the things he had seen in his travels. Roger and I have been lucky to capture memories of our unusual encounters in our travels through the heartland via the magic of video.


Sustainable Broadband

Lawrence Strickling, Assistant Secretary for Communications and Information National Telecommunications and Information Administration United States Department of Commerce
Lawrence Strickling, NTIA

In addition to the heartland, we have recently interviewed folks from inside and outside the beltway. In this interview, filmed at the 2012 Broadband Communities Summit, we caught up with Lawrence Strickling, Assistant Secretary for Communications and Information NTIA United States Department of Commerce, Lawrence Strickling. Strickling faced Congressional critics Congress today as he discussed the progress and effectiveness of the NTIA’s stimulus efforts. In this brief interview, he discusses the next phase, which is about driving adoption on the completed networks, as well as finding way to expand the reach of the broadband.

Stay tuned for a related ViodiTV story about two stimulus winners who found each other and the small rural community, which will benefit from these two complementary winners.


Documonials to Inform, Inspire and Promote

email documonials@viodi.com to transform your marketing

Press and conference organizers; contact us if you need video for your web sites or conferences.


Transition Time in Tennessee

Larry Drake of the TTA
Larry Drake of the TTA

Larry Drake, Executive Director of the Tennessee Telecommunications Association, discusses the Spring Meeting held in Franklin, TN this week.  He also talks about some of the regulatory challenges and uncertainties his 18 members face.  Drake has an interesting background with a comprehensive knowledge of the telephone industry, having worked for organizations such as Bellcore and US Telecom. He also briefly provides his thoughts on the challenges of ensuring all parties adhere to standards.  Click here to view.


Battle of the Airwaves

Battle Of The Airwaves
Battle Of The Airwaves

Broadcasting is another industry that is in transition and adjusting to a world where broadband and mobility are king.  A new way for broadcasters to go over the top is described in this video that features an interview with Jack Perry, founder of Syncbak, as well as a demonstration of the nascent Syncbak service.  Available as a free app for mobile phones (iOS and Android), it has been rolled out in several markets, such as Spokane and the San Francisco Bay Area.  Click here to view the video.


The Elements of TV Everywhere

Sam Blackman of Elemental Technologies
Sam Blackman of Elemental Technologies

Transcoding of video streams to serve multiple devices via multiple networks is becoming a core element of a video solution, regardless of the type of delivery method.  As explained in this video interview with Elemental Technologies’ CEO Sam Blackman, the use of Graphic Processing Units (GPUs) is the secret sauce behind their encoding and transcoding products.

The growth of Elemental Technologies has mirrored that of Apple’s iPad, as they introduced their first product a month after the launch of the iPad. Click here to view the video interview with Blackman where he talks about the challenges and opportunities of video delivery to multiple screens.


OTN Switching Gains Market Traction- but will it replace SONET/ SDH? by Alan Weissberger

Image Courtesy of Infonetics
Image Courtesy of Infonetics

The results of Infonetics Research OTN Deployment Strategies survey show that OTN switching will play a leading and significant role in the regional and long haul networks of most, but not all carriers. “Most notable is the fact that about three-quarters of the service providers interviewed plan to deploy OTN switching (see comment below).  This sample  represents 90% of all respondent capex, which means most optical dollars will be spent by carriers with OTN switching,”  according to Andrew Shmitt,  Infonetics Principal Analyst for Optical Networks.  Click here to read more.


For communications professionals, the main event at TiECon2012 -May 18th & 19th in Santa Clara, CA- will likely be Friday morning’s Mobile panel session.  The status and dynamics of the mobile industry will be assessed along with the key technologies and applications that will impact the entire mobile ecosystem.  Emerging trends, outlook and opportunities will be identified during what promises to be a stellar session.  Click here to read more.

  • Comcast addresses my concern that Xbox app chews into monthly broadband allocation.
  • Sign of the times- Lady at hotel check-in answers “Charter” when asked what telephone company is the provider for her employer.
  • Interesting that white spaces is the second thing mentioned by Commissioner McDowell in this congratulatory note.

The Korner – Day One With the Mayor

Mayor of Wisconsin Rapids
Mayor of Wisconsin Rapids

Since election season is here, it seems appropriate that we met with the freshly elected mayor of a rural burg that is at a bit of a crossroads.  It was a chance meeting with the mayor’s uncle that led us to the post inauguration party and our introduction to the new mayor.  He graciously accommodated us and we were his first official appointment on his calendar on his first day in office.

As it turns out, Zach Vrumink is the youngest mayor in Wisconsin Rapids, WI history.  From a line of entrepreneurs, he kept up the family tradition by starting a computer and networking technology business when he was 14.  With branches in several Wisconsin cities, he is now an absentee owner and is now focusing his energy on transforming the local city government to help his area compete.

His combination of enthusiasm, common sense and experience made us think that the mayor’s office is only the start for this young man who wants to make his community and country a better place.  Click here to view the interview with him and to read Roger’s thoughts on our impromptu meeting with the new mayor.

Viodi View – 05/08/09

wsta banner

 

 

 

 

 “Déjà vu’ all over again”, as Yogi Berra reportedly once said, is the term that describes today’s popular news events. The stagnant economy and, more importantly, consumer confidence seem reminiscence of the 70s. There is a definite tension in the air as we are waiting for the affects of the government spending to kick-in and wondering if the result will be stable growth, high inflation or, that ugly 70s term, stagflation.

Government spending in the form of the stimulus was the topic of many of the conversations and panels at the IP Possibilities Conference last month in San Diego. There was talk of the broadband stimulus being the first part of a national broadband strategy (see this link to Bennet & Bennet for a good summary), whereby every American has to have access to broadband capability, that will culminate in a plan that FCC must deliver to Congress by February 17, 2010 (ironic date, given it will be exactly one year after the delayed DTV transition date).


Click here to watchLooking Down Under to Stay on Top of Broadband

In this video, Steve Klein of ViodiTV sponsor Allied Telesis discusses the role of technologies such as IP and Fiber to the Home in the context of an overall national broadband plan. His comments about Australia and their plan to bring fiber everywhere are esepecially interesting.Click hereto watch the video.


A New Way at Looking at Over the Top at IP Possibilities

click here to watch this insightful video regarding over the top applicationsA big question in any discussion of broadband policy is the role of the service providers; the folks who are investing large sums on the last mile infrastructure. The question is often posed as to whether the service providers will end up being dumb pipes or something much bigger. In this video, Andrew Randall of ViodiTV sponsor Metaswitch provides a nuanced view of how independent telcos can approach applications that could be considered friend or foe, depending upon one’s viewpoint.  Clic here to watch the video.


Open Standards Smart Grid via WiMAX by Alan Weissberger

San Francisco start up software company Grid Net, is using WiMAX technology in its wireless smart meter instrument. The meter, being built by GE, uses Intel’s WiMAX chip and Grid Net software. It is said to be one of the first truly "open-standards" based approaches to building a meter. Click here to read more.


50K WiMAX Subscribers Today – > 13 Million By 2013 by Alan Weissberger

The Economic Times of India reports that Tata Communications (TCL) has signed up 50,000 subscribers for its fixed WiMAX service. TCL, earlier known as VSNL, had received WiMax spectrum in the 3.3 GHz band under its Internet Service Provider (ISP) licence with the Indian government.   Other Indian network operators- Bharti Airtel, Aircel, Sify and Reliance Communications – also own spectrum in this band.  Click here to read more.


New Apps and Smart Phones to Drive Demand for 4G Mobile Networks by Alan Weissberger

We now believe that smart phones and "all-in-one" gadgets will drive the need for more bandwidth and QOS and accelerate mobile network movement to 3.5G (EVDO, HSPA, mobile WiMAX, etc) and 4G (LTE and Advanced WiMAX- IEEE 802.16m).  Click here to read more.


Brief Kudos & Upcoming Events

  • DSL Prime – Congratulations Dave Burstein and Jenny Bourne of DSL Prime/DOCSIS Report/Fiber News on the look of their new web site. Bursteing brings an insightful view and valued information in his newsletters and web site.
  • Entone – Congratulations to Steve McKay and the folks at long time Viodi View sponsor Entone for their deal with Vudu. I had the pleasure of speaking at Entone’s User Group meeting last year and came away impressed with the organization.
  • Nokeena for making their public announcement about their streaming solution that could change the economics of content delivery networks and have a big impact in rural and less served areas.
  • Verismo Networks – Congratulations on the launch of their VuNow Internet TV platform with Act Television in Bangalore.

 


The Korner – More than Possibilities at IP Possibilities

some beautiful scenary at IP Possiblities.  Check out this overview video

With the stress of the economy and the general pressure created by our 24 hour a day, social network connected society, it is sometimes difficult to step back and, at least for me, take a moment to look at the beauty that is in our midst. The IP Possibilities Conference was a blur and I certainly didn’t take in the scenery and the cool outdoor sea breezes as much as I would have liked.

Thus, I found this video from Roger Bindl to be refreshing, as he captures, not only highlights of the conference, but some of the ambience that helped make it an enjoyable experience. Roger has become quite skilled at turning what could be a boring talking head experience and turning it a rich media production with effects and images that add value to the speakers’ words. Click here to watch his summary video of this very important conference regarding IP and broadband.  Click here to watch the video.  

Telecom Council panel session: Update on U.S. Broadband Policy

Abstract:

In a lively Telecom Council panel session sponsored by AT&T, seven industry executives discussed the ramifications for the U.S. government’s stimulus package and federal budget proposal as related to broadband policy. The sober and candid assessments offered a realistic view at what is involved in building out broadband, particularly using wireless technology, to underserved and rural areas in the U.S.

Backgrounder:

The Obama Team pitched improved broadband access and "Network Neutrality" as key priorities during the Presidential campaign. The stimulus bill the new administration initiated and the U.S. Congress passed (as the American Recovery and Reinvestment Act) on February 17, 2009, set aside $7.2 billion in funds for broadband build-outs. Of that, the Commerce Department’s National Telecommunications and Information Administration (NTIA) will administer $4.7B, while the Department of Agriculture’s Rural Utilities Service (RUS) will control $2.5B. Wireline, unlicensed wireless broadband (WISPs), and high-speed cellular data service are all eligible for grants and/or loans. Companies can tap into one, but not both of these pools of funds, if their application is approved by the respective government agency (NTIA or RUS).

The final version of the bill maintains that projects funded by NTIA must adhere to "nondiscrimination and openness principles." The funds must be dispersed before September 30, 2010, to projects that can be completed within two years. The RUS funds, to be awarded by Sept. 30 of this year, focus more on rural broadband access, requiring that at least 75 percent of an area receiving funds be in a rural area without sufficient high-speed broadband access. The RUS will give priority to projects that give consumers a choice of more than one service provider. Although rural telcos are not the only companies eligible to receive RUS money, they may be best positioned to receive it because many of them are already familiar with the process. Recipients of RUS funding traditionally have been required to use equipment approved by RUS, and that is not expected to change. The approval process relies heavily on the experiences of fund recipients, who must install and use a product for six months before it can be approved. That requirement favors companies that already have RUS approval.

It’s hoped that this new funding will create jobs and provide broadband Internet access to many communities that don’t have it now. Maybe the U.S. telecom industry will become more competitive and innovative as a result? But there are many issues involved and many industry players may stay on the sidelines. There are also many rules and regulations that have yet to be set by the government agencies before funds will be dispersed. For example, there is no part of the bill that defines the terms "broadband," "unserved area," or "underserved area." The NTIA will work with the Federal Communications Commission (FCC) to define those terms and spell out guidelines for funding.

While the focus of this panel session was on wireless broadband access, wire-line solutions (e.g. Fiber to the Node/Premises, Broadband over Power lines, etc) are also possible.

For more information, please refer to:

Stimulus bill includes $7.2 billion for broadband

http://news.cnet.com/8301-13578_3-10165726-38.html

Author’s note: The rural or underserved includes 12M households and 35M people in the U.S. According to Pew Research, 38% of rural Americans have broadband, which implies that 62% don’t.

http://pewresearch.org/pubs/888/home-broadband-adoption-2008

Prior definitions of Broadband, and “served area” in the USA have been deceptive at best. Historically, residents of a zip code were said to be in a “served area” if only a single subscriber in that zip code had broadband access. This distorts the US availability numbers and paints a deceptively positive picture.

Panel Discussion:

The panel was co-moderated by Derek Kerton of the Kerton Group and Jon Metzler of Blue Field Strategies. The five panelists were:

  • Christopher Boyer, AT&T, AVP – Internet & Technology Policy
  • Danielle Coffey*, Vice President, Government Affairs for Telecommunications Industry Association (TIA)
  • Mike Masnick, founder Techdirt; CEO, floor64
  • Robert Rini*, Partner, Rini Coran, PC (Washington DC based law firm representing WISPA)
  • David Pejcha, Marketing Director, Silver Springs Networks

* These two panelists dialed in from DC as Dulles Airport was closed and their flights cancelled.

Jon Meltzer noted that the $7.2B for broadband is the largest such government funded disbursement ever. It is about the size of the Universal Service Fund (USF)- which was approximately $7.6B total at last check. The USF is a fund that is mandated by the U.S. Federal government for the purpose of subsidizing rural, low income, and health/ education telecommunications customers. Jon notes that USF subsidization of broadband is still expected (perhaps to decrease its bias toward copper wire voice service).

Chris Boyer stated that AT&T was supportive of a flexible framework to deploy broadband services. However, AT&T was not seeking funds from the stimulus bill during the legislative process. However they are looking at how the legislation may advance their already substantial investment in broadband and projects currently in progress. Chris sited AT&T’s experience in California remarking that AT&T currently makes available broadband to around 90% of its service territory and getting broadband to the last 10% of the population (that does not yet have the infrastructure in place to realize broadband service) was a very expensive proposition. He later commented that AT&T’s broadband network is closer to 85% (give or take) built out elsewhere in the U.S.

The panelists agreed that the requirements for filing grant/loan applications needs to be clearly defined as do the previously mentioned terms- "broadband," "unserved area," or "underserved area." It would also be useful to define "over served area" for contrast with "underserved area." While creating jobs is the number one goal of this legislation, it’s equally important that the technology selected meets the need of the targeted user community.

If “rural” is defined as 20,000 or less, and grants/loans are contingent on addressing the “unserved” or “underserved” rural markets, the likelihood that an incumbent carrier would use the funds to roll out a broadband network for a city of 250,000 or so would be unlikely, according to Jon Meltzer.

Danielle Coffey said that TIA would ask for the time for grant/loan disbursement be accelerated, that the filing requirements not be too onerous, and that the selection criteria be technology neutral.

Robert Rini’s law firm (Rini Coran, PC) has been working with several wireless companies and Wireless ISPs (WISPs) who have asked how they can gain access to licensed spectrum to deploy wireless broadband technologies. The WISPs are interested in receiving government funding to build out wireless broadband in "small, granular service areas."

Derek Kerton observed that it’s a natural tendency of SP’s to deploy new wireless technology in densely populated areas, (e.g. Towerstream’s fixed WiMAX deployment in major U.S. cities) so they can get a better ROI. Greenfield operators often prefer to be the fourth or fifth provider in a dense city than the first provider in an underserved rural zone. So if rural deployment is the priority, then special requirements need to be attached to the funding. The population addressed by the new deployments is also important and should be taken into consideration when approving grants/ loans. Derek was concerned that job creation was more likely to come from incumbent SP’s, but they were not the likely candidates to provide broadband to rural areas (it’s the independent telcos and WISPs). Would a stimulus whose goal was to provide jobs also move the country forward in terms of the global broadband race?

Mike Masnick opined that more broadband competition in the market would create more jobs than a narrowly targeted government sponsored program, and especially so over the long-term. A narrowly defined jobs program would not really help the U.S. economy, which would face the same problems in 12 to 18 months.

Bob Rini, along with several other panelists, felt the final bill "was not stimulating enough." While Clearwire and Digital Bridge Communications may benefit from the bill, due to their synergy with educational institutions and ownership of 2.4G-to-2.5GHz spectrum, the WISPs would also benefit because they are well positioned to provide wireless broadband to rural and underserved areas. WISPs are generally very small businesses operating on a shoestring budget. They have expressed a keen interest in building out wireless broadband in their service areas, perhaps using WiMAX technology at 700MHz or 2.3G-to-2.5GHz licensed frequencies. WISPs (along with this author) believe that licensed spectrum is necessary to provide a carrier grade service- to eliminate interference, noise and signal distortion. Note that AT&T wireless broadband services operate on licensed spectrum.

Some WISPs are considering the 3.65GHz “lightly licensed” band for fixed WiMAX service, but there is no method yet defined by the FCC (or anyone else) to resolve contention amongst multiple possible users of that band. The rural telcos would have to work out spectrum re-use zones or other sharing agreements prior to turning on wireless broadband service. WISPs have not competed well at auctions for licensed spectrum, so a lightly licensed approach would be better for them if a contention or spectrum sharing arrangement can be defined. Rini said, "The FCC has one year to figure this out."

David Pejcha company (Silver Springs Network) builds smart power grids– a communications overlay over the last mile for electricity distribution. Utilities are considering smart grids to better manage their electricity distribution, provide automated remote meter reading, electricity switching for efficient distribution to customers. In addition, they plan to offer on-demand customer notification of electricity use. Electricity demand is outpacing supply so the power delivered needs to be more efficiently managed and usage monitored automatically. Solar energy producing modules might also connect to a smart power grid. Silver Springs Networks builds wireless communications systems using unlicensed 900MHz spectrum. Their network provides a direct link between the electric utility and its customers. It is an "Open IP network" that permits many different devices to attach to it. AT&T provides backhaul transport for some smart grids.

The discussion returned to licensed spectrum being more "investable" than unlicensed spectrum. Again, licensed spectrum prevents noise and interference. It was noted that cordless phones, microwave ovens, and wireless microphones operate at 2.4GHz, which would create interference for any unlicensed service at that frequency, e.g. long range/mesh WiFi. Further, the transmit power levels might be too high in an unlicensed service arrangement. Licensed spectrum, on the other hand, provides a de facto monopoly for the network operator- he has paid for the right of exclusion to keep competitors away.

Where will the licensed spectrum come from? The FCC is freeing up vacated UHF spectrum ("white spaces") for wireless Internet access and intends to make it available to SP’s as unlicensed spectrum for two classes of wireless broadband service: fixed access and personal/ portable access. The white space rules currently specify a 30-foot antenna on the receiver, fixed or portable. That’s a vestigial holdover from the TV broadcast world, according to Jon Meltzer.

With the transition to Digital TV, analog TV broadcasters will free a great deal of spectrum up on June 12th (DTV Delay Act),. But Rini is concerned that the FCC has not comprehensively specified how that spectrum will be used and distributed to interested SPs. WISPs are lobbying the FCC to create a lightly licensed regime for the vacated analog TV spectrum. Meanwhile, the "White Spaces Database Group," plans on formulating a plan to create, govern and maintain a wireless broadband network on abandoned analog television spectrum. When the spectrum is finally vacated, the group hopes that system in place, which will allow for the creation of an open wireless broadband network, which could be accessible by any device.

Currently, there is a secondary market for licensed spectrum in the U.S. Incumbent operators are leasing spectrum at wholesale rates directly to smaller SPs. In addition, Spectrum Bridge has become "the eBay" of auctioned spectrum. The Spec Ex or spectrum exchange is offered by Spectrum Bridge (http://www.spectrumbridge.com/).

Which companies might benefit from the broadband grants/ loans?

Mike Masnick opined that the stimulus funding criteria would be based on the projected number of jobs created by the broadband build-out, rather than any consideration of the requesting company to turn a profit. Since start-up companies are too small to be on the government’s radar screen, they are unlikely to get stimulus money. And since they focus on keeping costs down, and NOT hiring excessive headcount, they are not aligned with the stimulus’ goals. Start-ups are about long-term value creation, and the stimulus is about rapid job creation, thus Silicon Valley’s innovators probably will not participate in the broadband funding program. That is somewhat of a disappointment, as it’s the start-ups that provide long-term job growth and keep the US competitive with the rest of the world.

Counterpoint: We think that independent telcos, utilities, and WISPs will apply for the funding and start-up network equipment manufacturers will likely benefit. On February 17, 2009 (date the final bill was passed by Congress) start-up Airspan Networks announced the availability of what they claim is the industry’s most complete FCC and Rural Utilities Service (RUS) certified lineup of fixed and mobile WiMAX Base Stations and Customer Premises Equipment (CPE) for the U.S. rural market. RUS approval is obtained from the U.S. Department of Agriculture, affirming Rural Development acceptance and “Buy American” status of equipment. Airspan is among a select few WiMAX equipment manufacturers with this coveted “Buy America” status.

How are Capex and Opex impacted by the broadband stimulus?

The panelists and moderator pointed out that capex and opex are different accounting items. Jon Meltzer believes that the broadband stimulus may help with capex, but it won’t help lower opex. Still, offsetting capex is a non-trivial benefit. Grants could be used to offset the civil and construction costs of putting up a cell tower for rural broadband.

What is the FCC’s role in determining U.S. Broadband Policy?

Bob Rini provided this information: The FCC has one year to deliver Congress a report containing a national broadband plan “to ensure that all people of the United States have access to broadband capabilities” and establish benchmarks for reaching that goal. The plan will include:

  • Analysis of the most efficient and effective mechanisms for ubiquitous service
  • Strategy for achieving affordable service
  • Evaluation of broadband deployment, including progress of funded projects
  • lan for use of broadband to support national purposes

The FCC is expected to invite public comment to help develop national broadband plan

Finally, a questioner asked about "spectrum fees" in Obama’s new budget. No definitive answer was provided regarding renewal fees for operators that already owned licensed spectrum. But it’s something to watch down the line.

Reference:

What the broadband stimulus package means to rural telcos

http://telephonyonline.com/independent/news/broadband-stimulus-rural-telcos-0223/?smte=wr

Acknowledgement: The author would like to thank Bob Rini, Jonathan Meltzer and Derek Kerton for their diligent review of this manuscript and very helpful comments and clarifications.

3G and LTE squeeze WiMAX- is the market window still open?

Summary:

Many pundits have declared the window of opportunity for WiMAX has closed.  Squeezed between he enhanced capability of 3G technologies (e.g. HSPA/HSPA+ for GSM) and accelerated LTE roll-outs, (notably Verizon Wireless) the claim is that WiMAX is DOA.  We disagree!  In particular, we believe there is a reasonable market for WiMAX fixed and nomadic/portable service in developing countries.  We also see possibilities for mobile WiMAX in Korea, Taiwan, Japan, Malaysia, Russia and other developing countries (but not necesarilly in the U.S. or Western Europe).

For more details on WiMAX in emerging markets, please refer to:

WiMAX Continues to Make Progress in Developing Countries

http://www.wimax360.com/profiles/blogs/wimax-continues-to-make

When used for either nomadic/portable or true mobile service, both LTE and WiMAX devices will need to have roaming and handoff between either HSPA/HSPA+ or EVDO rev xyz.  That is because those latter 3G networks will still be the predominant way users access the Internet- especially during the early days of LTE/WiMAX deployment.

While LTE is thought of as a mobile technology, it will be also used for BWA (e.g. Century Tel and VZW plan on LTE for rural BWA).  Similarly, IEEE 802.16e compliant WiMAX can be used to deliver both fixed/nomadic and mobile services if permitted by the regulator in the country where service is offered.

The LTE Express- has it really accelerated?

In the U.S., VZW’s aggressive LTE roll out plans have put pressure on Clearwire, which asserts that its mobile WiMAX network is superior to the LTE service Verizon Wireless will soon launch. Once projected to reach 100 million subscribers by the end of 2008, the new Clearwire joint venture is commercially available in just two metropolitan areas – Baltimore, MD and Portland, OR. What about the 7 other cities that were to be operational by end of 2009?

Clearwire plans to provide more details about its WiMAX deployment strategy on March 5, when it announces its financial results for the fourth quarter of 2008. Those details may include dates for commercial availability of mobile WiMAX service in Chicago, Washington, Boston and Dallas-Fort Worth, Texas, possibly very soon. Sprint Nextel’s WiMax division was already building networks in those cities before the joint venture with the original Clearwire was completed in December. Clearwire is also working on converting its more than 40 pre-WiMax networks to true, standardized WiMax over time. No plans have been announced yet for VoIP over WiMAX which negates any WiMAX smart phones (which Sprint has announced for its mobile WiMAX MVNO unit).  For more information see:

Clearwire readying WiMax game plan as rival LTE gains steam

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9128221&intsrc=news_ts_head

Robert Syputa of Maravedis disagrees with all the hype about the VZW stepping up its LTE deployment.

"Verizon has not recently accelerated the roll out of LTE in their 700 MHz spectrum. If anything, recent announcements including Barcelona (WMC) amount to a 2-3 month push out from previous statements that they would luanch commercial networks by the end of 2009.

We have held that Verizon was posturing in their earlier announcements because suppliers could not be ready for commercial state deployment. What’s more, there has been no chance that there would be many devices available and too little time to do conformance and compatibility testing among vendors.

Verizon is pushing their own requirements which presage official LTE standard conformance and compatibility. This can be looked at as being similar to the way Sprint pushed the supply ecosystem including running their own test labs outside of those established by the WiMAX Forum. But this is jumping the gun; the LTE standard has yet to be published and chips, devices, and network equipment is at an earlier stage of commercial maturity.

This jousting of PR about availability should be evaluated in the context of what Verizon and other firms are attempting to achieve: Verizon has achieved the market position and PR image as being among the world’s leading networks. That contributes to their ability to hold onto and gain subscribers. Meanwhile, Sprint has succumbed to problems stemming from conversion of iDen, and upgrades to their 3G network and service problems. Even though they can now claim high 3rd party service reliability ratings, their image continues to suffer. Combined with pull from new phone and service offerings from Verizon and AT&T including iPhone, Google Android, and expanded push to talk, Sprint has continued to lose market share.

3G operators like Verizon can continue to build out higher density 3.5G HSPA & EVDO networks but added capacity comes at an escalating price tag. Both WiMAX and LTE next generation networks are, according to the competing camp’s AT&Ts network director, 1/4-1/2 the cost of delivering similar capacity on an advanced 3G network. Despite the higher cost, they say that they will continue to put most of their capital behind 3G over the next 2-3 years. The reason they don’t switch to LTE or WiMAX for the bulk of deployments is because LTE is at least 2-3 years away from being a mature ecosystem and it will require multiple mode or a transition to new devices in order to transition the customer base. The issue is hardly as simple as which technology works best.

What works best for Verizon is holding onto the image of being the leading network and not cannibalizing their fat 3G revenues more than is necessary until the market pressures them do to so. Eventually the market will press on for ever higher bandwidths and combined services that drives operators to adopt 4G. WiMAX and LTE are at a ‘pre-4G’ stage of evolution.. the systems and device evolution, needed disruptive re-farming of spectrum, and marketplace demands are building toward but are still years away from widespread adoption.

Verizon’s pursuit of LTE is pressing on but it will be more about holding onto image and 3G customers than about carving out revenue on a comparative scale for a few years.

A major advantage of 700 MHz is they can deploy thinly to achieve broad coverage. They will leverage that but it is not a panacea."

Opinion:   One thing I’ve learned in over 38 years in the telecom industry, is that new network infrastructures- especially a new high speed wireless network – takes much more time to be fully operational than anyone thinks. Once the infrastructure is in place, several levels of interoperability testing are required along with provisioning systems, monitoring, OSS and back end billing/accounting.

Will 3G Improvements Kill WiMAX?

The Ericsson view of comparisons between 3G/HSPA abd mobile WiMAX was outlined in a white paper released last month (January 2009):

"While the peak data rates, spectral efficiency and network architecture of HSPA Evolution and Mobile WiMAX are similar, HSPA offers better coverage. In short, Mobile WiMAX does not offer any technology advantage over HSPA. What is more, HSPA is a proven mobile broadband technology deployed in more than 100 commercial networks… [and] can be built out using existing GSM radio network sites and is a software upgrade of installed W-CDMA networks. Compared with other alternatives, HSPA is the clear and undisputed choice for mobile broadband services."

http://www.ericsson.com/technology/whitepapers/hspa_and_mobile_wimax…

But there’s a contrary point of you that favors WiMAX performance over 3G.  Many think that HSPA/GSM 3G will be overloaded when more mobile users access the Internet, upload photos and videos and watch streaming video on their devices.  Essentially, 3G is a TDM voice network with a data overlay. WiMAX is a flat (non-hierarchial) IP only network.

For EVDO/CDMA 3G, WiMAX avoids expensive royalty payments to Qualcomm, which owns most of CDMA intellectual property. Still, building a ubiquitous WiMAX network would be far more expensive than buying wholesale access to 3G with a Mobile Virtual Network Operator (MVNO) agreement.  But there is also the possibility of being a WiMAX based MVNO.  That is exactly what Sprint plans to do- using Clearwire’s mobile WiMAX network and supplying its own multi- mode (CDMA/WiMAX/WiFi) mobile phones that will operate on the CLEAR network. 

For more details, please refer to:

Sprint may sell tri-mode phone in 2010 that will include VoiP over WiMAX

http://www.wimax360.com/profiles/blogs/sprint-may-sell-trimode-phone

Conclusions

We do not believe the market window is closed for WiMAX.  The technology works, is available now, and can offer download speeds of 2 – 4 M b/sec per user (depending on cell size- number users per Base Station).  However, we continue to believe the most lucrative market for WiMAX will be for fixed/nomadic services in developing countries.   While most WiMAX (IEEE 802.16e compliant) deployments will actually be used for fixed BWA, the same network can also support mobile BWA at 2.3G, 2.5G, or 3.5GHz spectrum.  That’s a key advantage for network operators that want to deploy a combination of fixed/nomadic and mobile services to subscribers.

You need to segmrent the market for WiMAX.  It is definitely the answer for fixed/nomadic broadband wireless access in developing countries and rural areas.  It is also a success in South Korea (WiBro) as a fixed/mobile technology

It may or may not succeed as a globally ubiquitous mobile wireless technology.  The places to evaluate that are Japan, Taiwan, India, and other Asian countries.  I do not think people should be so hung up on whether or not Clearwire suceeds in the U.S.  Think global, especially Asia, for mobile WiMAX.    Once WiMAX netbooks, MIDs, other CPE, and smart phones are available, then there will be a better outlook for mobile WiMAX.  But that will happen, if and only if,: the regulator in the country permits mobile service at the licensed frequency(s), the operator builds out the mobile network, and implements roaming agreements with both mobile WiMAX and 3G carriers.  That remains to be seen. 

There is another market segment where WiMAX has huge potential- backhaul (WiFi hot spots, video surveillance cameras, etc) and wireless backbone for campus/ private networks.  This is a dark horse growth area in my opinion!

Addendum: In-Stat: 30% of subscribers will be 3G or 4G by 2013

In-Stat says that 30 percent of subscribers worldwide will be using some form of 3G or 4G cellular technology by the end of 2013. With mobile WiMAX needing to prove itself in the market as LTE deployments expand, In-Stat predicts that WiMAX networks will find favor in developing countries. In addition to expected LTE deployments in the United States and other developed markets, the research firm predicts that numerous vendors will pick up on the mobile WiMAX trend in emerging markets.

ACLU Northern CA: Cloud Computing- Storm Warning for Privacy?

Summary:   In a February 10th presentation at SCU, ACLU-Northern CA Technology and Civil Liberties Policy Director Nicole Ozler warned that Cloud Computing could compromise privacy rights of its users. The problem is that since the information stored in "the cloud" is not in your office or data center, it may not be considered as your private property or an extension of your filing cabinet.  Once this information is located in one or more databases "in the cloud", it may be accessed and used in ways that individuals never envisioned or intended, and with little oversight. Governments can dip into this treasure trove with a subpoena; companies can mine this information to build profiles, deliver targeted advertising, and share with others. And with the lengthy data retention periods and ineffective deletion procedures of many companies, we may find it very difficult to remove their data once it is uploaded.

In particular, the state or federal government could order a subpoena that would force the cloud computing provider to turn over its records on your computer usage. Such subpoena’s have no judicial oversight, meaning that your privacy rights would be compromised and you would be denied due process!

Background:  Many companies are interested in cloud computing as a potential solution to computer and storage capacity constraints. The idea is an extension of a virtualized data center, where the cloud could potentially be an "overflow data center." In other words, computing capacity would expand during periods of high demand by using the virtual compute servers in the cloud. The major advantage here is that if the cloud can extend your data center, then you don’t need to build another one or increase the capacity of the one you have just to handle intermitted spikes in computing demand.

We have previously written about cloud computing at Viodi View:

Cloud Computing Issues: State of the Net West Conference – August 6, 2008, Santa Clara, CA

http://viodi.com/2008/08/11/cloud-computing-issues-state-of-the-net-west-conference-august-6-2008-santa-clara-ca/

The Privacy Problem:  The legal precedents being set around the U.S. are potentially devastating for enterprise adoption of cloud computing. The executive branch is repeatedly taking the position that data stored in the cloud does not have the same assumptions of privacy and due process as does data stored in your own infrastructure. The very fact that you put the data "out there" somehow strips any "expectation of privacy" which is a key criterion for the level of due process protection (based on my limited understanding of law).

A recent decision by the Sixth Circuit Court of Appeals (Warshak vs U.S.) seemed to agree to this idea of a lower "expectation of privacy."

For more on this reference case, please refer to:

 

http://w2.eff.org/legal/cases/warshak_v_usa/

Key Question: Can the state or federal government issue a subpoena to access information you have stored with an on-line backup storage facility? Is privacy for on line storage covered under any law?

It turns out, that it is not an easy question to answer:

Looking at online data, the first question is whether the Fourth Amendment (4A) requires a search warrant to access that data. This depends on whether the record is treated as "in storage" (in which case 4A does apply and a warrant is needed) or as a "business record" (in which case 4A doesn’t apply and no warrant is constitutionally required).

There have been too few decisions on the topic of cloud computing to answer with any certainty at all.  However, the more a site/service looks like a "storage facility" – a site designed solely for online storage – the better the argument for constitutional protection.   Conversely, if the site uses your content for various purposes (e.g., advertisements or recommendations) and asserts some ownership over data about or generated by users, the constitutional argument is weaker.

Regarding statutory law, the primary federal law is ECPA (Electronic Communications Privacy Act), which applies (with different standards) to both communications in transit and stored communications. ECPA’s application to cloud computing is equally murky, but the same rough spectrum likely applies: the more user control, the greater protection, and the more the site controls or uses the information, the weaker the argument for protection. It’s worth noting that ECPA as written assumes that 4A does not cover cloud computing in many forms, as it proscribes much weaker protections than the Constitution would demand for web email in particular. The courts haven’t really addressed that assumption much, but one recent court held that 4A does apply to online email before the decision was vacated on unrelated grounds.

 

 

Viodi View – 02/07/2009

Super Bowl party at NTCA's 2006 Annual Meeting and ConventionThe Super Bowl is the ultimate social networking facilitator. This year the actual content (i.e. the game) made for good water-cooler talk. Of course, as written before, the Super Bowl is as much about the ads as it is football and a big part of the post-game buzz was discussions of the various commercials. Ironically, the commercial that, according to the Wall Street Journal, was in the top 2 was a user generated piece that was birthed as part of an online campaign.

Some of the best Super Bowl parties I have attended were at the NTCA Annual Meeting and Expo. There is nothing like being in a room with 2,500 of your closest friends watching the pinnacle in sporting entertainment. This year, NTCA’s Annual Meeting and Expo does not overlap the Super Bowl. Still, I look forward to seeing Viodi View readers at next week’s event.

Somewhere in the Viodi archives is a video interview with Todd Buchholz, who will be speaking on Wednesday, February 11. A noted economist, it would be interesting to get Buchholz’s take on the current economic climate and his feelings on the proposed stimulus package.


Check out Viodi View and ViodiTV sponsorship & video creation opportunities by clicking here.


Will the U.S. Stimulus Package Boost Broadband Deployments? by Alan Weissberger

Regarding the Stimulus Package, Alan Weissberger provides an excellent summary Alan of what is happening with the so-called stimulus as it relates to broadband. This is a much different picture than the speculation from only a month ago. Check out the comments to his article as well as my earlier post on the stimulus and please weigh-in with your thoughts.


TWC WiMAX Update by Alan Weissberger

Weissberger provides an update of how Time Warner’s recent financial results impact its WiMAX efforts in this brief article.


HTHH – High Tech Happy Hour by Roger Bindl

Roger reports on the Madison, WI technology scene in this brief video synopsis of the High Tech Happy Hour. Although it looks and sounds like he is in a casino, he does get the skinny on InTime Tools, a Software as a Service company that provides complete customer communication solutions (e.g. customer relationship management, web site, sales management, etc.).


Roger's report from WSTAWSTA 2009 PR/Marketing Seminar Day 1 by Roger Bindl

Reporting from the Wisconsin Dells, Roger provides an excellent video summary of WSTA’s 2009 PR/Marketing Seminar. His video includes interviews with Bill Albertson of Badger Communications who talks about the history of VoIP, Marty Snustead of Midwest Video Solutions on the future of IPTV and Don Stephan of the TDS-powered, Wisconsin Sports Network; a state-wide local broadband video network.


It’s a Phone, It’s a Camera, It’s Camera-Phone Envy???

A Touchscreen Phone?A Camera?I recently purchased the G-Phone. I have not yet finished the review; part of the reason for that will be in the review. The best feature of the G-Phone is the ability to easily and quickly snap and share photos via Gmail or Picasa. I am feeling a bit of buyer’s remorse or maybe I have camera-phone envy after looking at some photos of a new Samsung camera-phone that features a touch screen and an 8 Megapixel camera.


People on the Move:

Listen to Lowten's prediction regarding HDTV implementationLastly, with DTV transition being pushed off a few months, check out this excellent presentation from Peter Lowten and Doug Mielke regarding HDTV.  Given in 2003, it is amazing how much has changed and hasn’t changed.  Peter Lowten’s humorous prediction on when the tipping point would occur (his birthday, 2/17) is especially entertaining. Happy Birthday, Peter.

For those of you with the Showtime Television service, check out Blacks without Borders which debuts today at 4 PM (Showtime) and airs multiple times over the next couple of days. Longtime friend and colleague, Brian Stevenson had a hand in the creation of this series that is trying to get a regular slot in Showtime’s rotation. If you can’t view it on Showtime, check out the trailer on their web site, which provides a quick recap of this thought-provoking production.

I look forward to seeing Ed Heuck at next week’s NTCA, a leader in deploying video at the large independent telco, Hargray in South Carolina. He is now with Graycliff Enterprises, which is focused on construction and installation of telecom networks for service providers.


 The Korner – Kontests, Kontests & More Kontests

the dorrito's commercialThe Super Bowl Doritos spot, which was rated as #1 in USA Today’s Ad Meter, was a contest-generated commercial. The one million dollar prize Doritos offered to the winner will be an economic stimulus for the two unemployed, Batesville, Indiana brothers behind this piece of creative. It proves the mantra from Viodi’s Local Content Workshops that talent is everywhere.

Roger's pitch for adult beverages - have you no shame RogerOn the topic of user submitted commercials, Roger is involved with a couple of other contests that generate advertising through user participation. The first contest’s ads will never be suitable for television, at least as we know it today, as it promotes an adult beverage company. Roger appears to be in 4th place in the voting.

Roger is a finalist in DSL Modem maker Actiontec’s video contest which asks contestants why they love broadband. Roger recites a nice poem and has some good visuals, but he is going to face stiff competition from a 4 year old and her dad’s green screen. Voting for the finalists begins on Monday and will be at Actiontec’s web site. Good luck, Roger. Actiontec's contest on Youtube
 

Viodi View – 01/23/09

Something is different this third week in January. No, I am not talking about the historic inauguration of the first U.S. President born in the 1960s, but I am referring to missing this week’s OPASTCO’s Winter Convention. Unfortunately, we did not get our act together and, consequently, did not produce ViodiTV at this OPASTCO Convention. The agenda and locations are always interesting at these events, but the most enjoyable part of the experience is meeting with the people of OPASTCO.

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Green Cell Tower – Efficient and Effective

Click here to watch this video of Pat Riordan talking about Cellcom's green cell towerTo remind myself of how much fun we had at last summer’s event, I posted a video interview with Pat Riordan, President and CEO of Nsight. Riordan discusses the implementation of a ‘green’, off-the-grid, cell phone tower by its wireless subsidiary, Cellcom. Prior to Cellcom’s construction of this unique repeater site, cell service was not available in this rather remote area of the Eagle River of Northern Wisconsin.


And More Recently at this Week’s OPASTCO Winter Convention

John Rose, in his speech at the OPASTCO Winter convention this week, reinforced the idea that broadband is changing everything and that rural carriers need to address the desires of consumers who increasingly wish to access content in locations and on devices of their choosing. He indicated that the industry’s future prosperity is also dependent upon the right regulatory environment.


The one good thing about not producing ViodiTV at OPASTCO was it gave Roger to catch up on some earlier reviews as well complete part 3 of a series on over the top video.


Vudu On-Demand and On-Line by Roger Bindl

Well… it’s one step closer to better television over the Web. Vudu now has Network and Studio TV episodes for purchase and download, plus it now has Vudu Labs which consists of YouTube videos, On Demand TV, Flickr, Picasa, and a couple of on-line games.


Click here to see Roger's latest installment of his series about over the top videoVideo and TV Over the Net – Part 3 in a Series by Roger Bindl

 

Voice narration isn’t necessary to make the point of this two minute video as it notes the progression of IP in telecom and the progression of Video and TV over the Net. IP displaced ATM in an industry that would have said "no way" ten years ago. And now, Video and Television over the Net have progressed to a point where few are questioning or doubting, but many are jumping on the band wagon to provide products and service.


Alan Weissberger added interesting commentary to his earlier article on Cisco’s plans to move into consumer electronics with a discussion of their plan to move into servers.  Weissberger also wrote a very interesting piece about WiMAX MIDs. Ironically, I read the first draft of this piece on a Google Phone, which is 3G enabled and WiFi. Check out the article, as well as the associated comments.

 


Where Are the WiMAX MIDS? by Alan Weissberger

Did you notice the absence of any major WiMAX device announcements at CES? With all the talk by Sprint and Clearwire about mobile WiMAX at the show, we were expecting a raft of WiMAX capable Mobile Internet Devices (MIDs) to be announced at CES. We were disappointed.  Click here to read the rest of the article.


People on the Move:

Congratulations to Ron Strecker of Panhandle Telephone Cooperative, Inc. for his OPASTCO Grassroots Advocacy Excellence Award.

Congratulations to Rob West of CoBank’s communications division and communications and energy banking group for his OPASTCO Associate Member Distinguished Service Award.

Congratulations and good luck to Jay Cuthrell, formerly CTO of Digitel and NeoNova Network Systems. Jay is providing his consulting services on a full-time basis to independent telcos and others entities. Operating from Raleigh and Missoula, his understanding of technology and the independent telco industry is unique and valuable for telcos in their transition to broadband providers.


The Korner – Stir Krazy

Producing ViodiTV at an OPASTCO event or any other event is a great deal of work. Roger ends up doing most of this work when we produce these video compilations of telco conferences.

[Sponsor Alert – Viodi in the planning stages for the Minnesota Telecom Alliance Convention in March]

It is great fun and a great break, however, as it takes us away from our normal locales and puts us in places that are normally warm when it is cold everywhere else. I appreciate the nice weather, but given the fairly mild climate of the Valley of the Heart’s Delight (aka, Silicon Valley) that I call home, I don’t appreciate it nearly as much as does Roger.

click here to watch Roger's latest creationI didn’t realize this until I watched a video that Roger created earlier this week. I call it Stir Krazy, because it is obvious that my friend needs to get away from the cold and snow and go where it’s warm. He co-produced this video with a collaborator who was a thousand-plus miles away in Portland.

Like a street corner rapper, who comes up with lyrics off the top of his head, Roger made this little ditty up as he went along. It has sort of a country feel. Country and Rap, I will let the reader do the math on that one. Seriously, it grows on you and it is quite clever. Help Roger go viral with this by passing it on to someone who needs a pick me up from the winter blues.   Click here to watch his video.

The DTV Transition – At What Cost?

[Author’s Note:  Thank you very much to David Irwin, Director of the Communications Law Institute at The Catholic University of America, for his review and suggestions for this article]

Click here to learn the detail of the DTV Transition from the official government web siteMuch has been made about the recent 700 MHz spectrum auction and the potentially billions of dollars raised for the U.S. Treasury, but this is just one part of a complex equation related to spectrum management and economics that may be implicitly costing U.S. citizens much more than they are receiving.

For example, there is the opportunity cost of the new, digital broadcast spectrum, given away to existing broadcasters by the government that is worth untold billions of dollars. Unfortunately, this article is probably about 10 years too late to affect a change, but maybe it will serve as a warning for future generations.

Prior to auctions, back in the early days of the FCC, spectrum was regarded almost like land during the homestead days of the eighteen hundreds.  That is, entities were given spectrum in exchange for building out the infrastructure, providing certain public goods and accepting regulations and restrictions.  Where more than one entity sought spectrum in a given locale, each spectrum application being mutually exclusive to the other, evidentiary-type hearings were held to determine which applicant would best serve the “public interest;” but, at the end of the hearing process a spectrum license was simply awarded by the government to the winner.

Much like homesteading, this policy lessened the risk for entrepreneurs and was a catalyst that expedited the build-out of the radio, television and original cellular infrastructures. These build-outs evidenced the inherent value of the spectrum and, as result, Congress turned to spectrum auctions as the prevalent way to ensure that the public received a return on its spectrum assets; that is, except for the give-away of digital television broadcast spectrum.

Giving away spectrum may have made sense in the 1990s when Congress and the FCC began laying the foundation for what what has become known as the 2009 digital television transition. In February 2009, all legacy television stations (with the exception of low-power stations) will turn off their analog transmitters and thereafter only broadcast digital signals; this may include high-definition TV.

The intent of Congress, heavily lobbied by the broadcast industry, was to free up the analog spectrum for other uses, as well as ensure that the U.S. remained competitive with other nations by having a digital broadcast infrastructure that supported HDTV. Like in the 1940s, the Federal Government essentially gave away spectrum to broadcasters in return for a digital build-out and exchange of bandwidth that had been used for analog signals. There have been significant and unanticipated changes since the DTV legislation was passed in the 90s, including:

  • The continued growth of cable, telco video distribution via fiber optics and copper DSL and DBS operators, such that the number of households receiving off-air broadcasts is estimated by Jeff Zucker, CEO of NBC-Universal at 10%.  He suggested at NATPE 2008 that the number of households receiving off-air only will drop to approximately 5% after the transition.
  • The transition of the Internet into a video distribution medium is a true unknown — a “sleeper” in this equation.  Broadcasters and television networks are “re-inventing” themselves, embracing the internet, proving by their own actions and plans that broadband is a viable distribution outlet for video.
  • The success of unlicensed WiFi spectrum also indicates that spectrum does not have to be licensed in order to have value.  On the horizon is WiMax, which may be thought of as WiFi on steriods; WiMax is a potential threat to cable, satellite and telcos.  In all events, it appears that the concept of device-regulated spectrum (the devices are network-aware and transmit data accordingly, minimizing interference), instead of the traditional agency-licensed and regulated spectrum.
  • Improvements in video compression, which frees up bandwidth for uses that were probably never anticipated by Congress.
  • The success of auctions in allocating spectrum.

The transition to digital television broadcast required a huge investment by the broadcast industry and probably never would have been justified by better picture quality alone (although, the broadcast industry did make feature upgrades to include color and stereo in earlier days, but these didn’t involve such an extensive infrastructure upgrade).

That is, there is probably no new revenue for the broadcaster who only replaces a standard definition digital signal, albeit better than analog, with HDTV programming.   It is thus understandable why broadcasters are looking for ways to monetize their investments in digital technology including the use of the bandwidth not utilized for their primary digital and/or HDTV signal by:

  • Creating mini-cable systems by developing new content to go along with their primary channel
  • Potentially creating “pay versions” of popular programming (several years ago, one industry pundit suggested networks could create two versions of the same show; a tamer version for general broadcast and a wilder version that people would be willing to pay for as a premium service).
  • Leasing out bandwidth to third-parties that would essentially act as aggregators
  • Offering a mobile video solution that would extend their service offerings onto personal video devices.

Policy makers and broadcasters believe that these new applications of the broadcast bandwidth will have value to some consumers.  But, there are, as noted above, real costs, as well as opportunity costs that need to be considered.  Some of the real costs to the DTV transition include:

  • The $1.8 B in coupons provided by the Federal Government to consumers to pay for digital set-top coversion boxes that will let analog televisions play digital broadcast signals.
  • The costs that my telco friends and others had to spend as a result of an FCC mandate to publicize the digital TV transition.
  • The costs associated with cable systems and telcos having to support standard definition, long after the broadcasters make the switch to digital.
  • The big cost is probably the opportunity cost, as the digital spectrum given away would have value that could be realized explicitly through an auction process or as an unlicensed public good.  Based on the recent $19.6 B expected from the auction of the 700 MHz spectrum, the remaining 200+ MHz of spectrum could be well worth many multiples of the 700 MHz spectrum bids.

As much as I would like to be able to present a silver bullet that would change the situation, I doubt there is anything that could be done politically or practically to improve the value of the DTV transition for the U.S. taxpayer (it is our spectrum).  After making such a huge investment and with rules in place for so long, it simply isn’t fair to the broadcast industry to change the rules of the game at this late date.  Economists will suggest that there is nothing like political uncertainty to impede business investment and it would be bad precedent to make significant changes to DTV.  The time to make changes was 10 years ago.

It will be interesting to see how economic historians view the digital TV transition. Hopefully, they will learn from it and be able to influence politicians and regulators the next time we have the opportunity to make such a historic shift in our communications’ infrastructure.

Mining Data & More in St. Louis

I have found vendor user group meetings can be as every bit as valuable as for-pay conferences. The Entone User’s Group meeting held in the convenient, historic and revitalized downtown St. Louis last week, was extremely valuable for the participants, who included Entone customers, prospects and partners. Entone has been a long-time supporter and sponsor of the Viodi View and ViodiTV and it was an honor to moderate a couple of the panels at this event and I enjoyed the interactive nature of the panels, as well as the openess of the discussions. 

Steve McKay, CEO of Entone, kicked off the conference by suggesting that Triple Play has become a zero sum game and that operators will need to continue to refine their offering to compete. McKay emphasized the importance of a whole-home media offering for operators as they seek to differentiate themselves from CATV and DBS.   Features of this offering include DVR, ability to view over the top videos, inclusion of personal media, in-home distribution and place-shifting tied together with an integrated and easy to use interface that only requires one simple-to-use remote. What McKay is calling for is not trivial and he called on the operators to push the vendor community for these sorts of whole home media devices. 

Colin Dixon of The Diffusion Group gave backed up McKay’s comments with some interesting data, particularly on home networks (going from 150 million in 2010 to 1 billion in 2030). Dixon stated that, "The PC is not and will not be the center of the home entertainment universe. The PC is a disabler." He suggested a much more TV-centric view of where over the top video is going, when he suggeested something like 12% of broadband viewers are watching 5 or more hours of video on the Internet per day and 84% of people who watch video on broadband want it on TV. 

Along these lines, he emphasized, "That the Internet is transitioning from a technology to a medium." He called what is happening the greatest realignment of television services in 60 years. He suggested that, "Bringing the web to TV is a losing proposition, while bringing the TV experience through the web is a winning proposition." To bolster this argument, he cited TDG’s primary research that suggests more than 3/4 of people prefer to watch DVDs in a social setting some or all of the time. His point was that new media must leverage existing behavior to be successful. He stressed the importance of the guide in helping people to discover content, as opposed to searching which is difficult with a television interface. He also called on telcos to look at new kinds of programming, such as gaming.  

Dixon provided an excellent overview of the entire over-the-top value chain, from content ingest to content delivery. It was a great set-up to my conversation about independent telcos and what they are doing in terms of local content. Several of the telcos in the audience mentioned that they are utilizing their VOD servers to store and stream local content. And local content is a differentiator, but it may not always be enough to keep a customer from churning. 

Doug Abolt described Consolidated Communications‘ process of how they mine their data to determine which customers are likely to churn. This has allowed them to target their marketing dollars and offers, such that they are able to get a better return on those investments. At the same time, there have been unexpected benefits, like identifying weak points in their networks. He described the virtual focus groups that are part of this process as being much more efficient, less costly and timelier than the traditional focus group. Abolt’s presentation was a good exclamation point on a couple of very productive days of learning.