Friday, October 23, 2009
Wednesday, September 16, 2009
The Smart Network Prevents HD Voice
At the HD Communications Summit in New York yesterday, a wide variety of conflicts were clarified, but the starkest of those conflicts is that between the business model of the cablecos and telcos and new technologies like HD Voice.
HD Voice samples a greater amount of spectrum, at least twice as much of it as a regular phone call does, to make calls easier to hear. Early adopters might be first responders, financial companies, medical institutions, and anyone else for whom a small misunderstanding could involve a significant risk.
But in the long term, the technology is likely to succeed or fail depending on whether or not consumers like it. The benefits, such as intimacy, clarity, and simply not having to repeat yourself during a call, will not be immediately obvious to anyone who buys the service because it only delivers clear benefits if the network and both phones are using HD Voice.
In some cases, only the person who has not purchased the technology benefits from it. If your phone if HD and the phone at the other end is not, you may hear static and other artifacts and those at the other end might hear a clear call.
So the technology will be difficult to sell to consumers until there's widespread adoption, and one company is taking the lead: Orange, the mobile wing of France Telecom.
HD Voice does not disrupt the business model of the cellular network. Because the cellco controls the network and the devices on it, HD Voice is easier to roll out there. Ironically, Moldova is the first nation to get HD Voice, as of September 13, 2009. The rollout by Orange currently has only one HD handset, from Nokia, but more are expected, perhaps when Orange rolls out the service in the UK, France, and Belgium.
"I believe that when Orange rolls out HD voice service in the UK, France, and Belgium, that will be the tipping point," said Brough Turner, Dialogic Chief Strategy Officer.
While HD voice is coming to mobile networks, cablecos and wireline telcos are reluctant to sell it.
The problem is not technology -- it's all about business models. At the conference, every attendee received a Gigaset HD-ready phone (which I have not yet tried but will write about soon).
The key question from the audience was this: "How will a company pay for a Gigaset-like handset when that handset allows the user to route around the provider's voice service?"
Gigaset's device, when connected to a network, automatically obtains a SIP number. That's not all you need to make a voice call, but many consumers have the necessary software, such as Skype, to make HD calls. They don't need a cable or phone service to do it -- in fact, if the call routes over cable or phone lines, it will be degraded to standard definition. That's because the old networks are only built to handle SD voice transmissions.
So a phone or cable company that sold HD Voice handsets to its customers would, in effect, be encouraging them to route their calls over the internet.
Skype does not compete as a primary phone line provider, noted Michael Jablon, Time Warner vice president of digital phone strategy.
But Skype could lower the value of the services provided by phone and cable companies, noted Julian Spittka, Skype product manager and senior engineer. He said that the old networks have failed to adapt to two key disruptions of the past two decades: the change from circuit-switched to packet-switched voice and the substition of software for hardware.
Spittka noted that Skype performs, in free software on the desktop, many functions that required big iron in the past. He added that free software downloads will always have a greater reach than hardware, which must be purchased.
Dialogic's Turner pointed to a third major change in the past decade: the sale of several billion SIM cards worldwide.
As the mobile network adopts new technology, in part because it is closed, software available for free on the internet will disrupt the business model of cablecos and telcos that provide internet service but still rely on voice services for the bulk of their revenue.
"70 percent of telco revenues come from voice," said Dan Berninger.
With HD, those revenues are threatened -- and, for the first time, VoIP with HD will be able to provide a higher quality call than wireline in SD.
These are interesting times.
The technology
HD Voice samples a greater amount of spectrum, at least twice as much of it as a regular phone call does, to make calls easier to hear. Early adopters might be first responders, financial companies, medical institutions, and anyone else for whom a small misunderstanding could involve a significant risk.
But in the long term, the technology is likely to succeed or fail depending on whether or not consumers like it. The benefits, such as intimacy, clarity, and simply not having to repeat yourself during a call, will not be immediately obvious to anyone who buys the service because it only delivers clear benefits if the network and both phones are using HD Voice.
In some cases, only the person who has not purchased the technology benefits from it. If your phone if HD and the phone at the other end is not, you may hear static and other artifacts and those at the other end might hear a clear call.
So the technology will be difficult to sell to consumers until there's widespread adoption, and one company is taking the lead: Orange, the mobile wing of France Telecom.
Why it will be deployed in cellular networks first
HD Voice does not disrupt the business model of the cellular network. Because the cellco controls the network and the devices on it, HD Voice is easier to roll out there. Ironically, Moldova is the first nation to get HD Voice, as of September 13, 2009. The rollout by Orange currently has only one HD handset, from Nokia, but more are expected, perhaps when Orange rolls out the service in the UK, France, and Belgium.
"I believe that when Orange rolls out HD voice service in the UK, France, and Belgium, that will be the tipping point," said Brough Turner, Dialogic Chief Strategy Officer.
While HD voice is coming to mobile networks, cablecos and wireline telcos are reluctant to sell it.
The problem is not technology -- it's all about business models. At the conference, every attendee received a Gigaset HD-ready phone (which I have not yet tried but will write about soon).
Disruption by hardware
The key question from the audience was this: "How will a company pay for a Gigaset-like handset when that handset allows the user to route around the provider's voice service?"
Gigaset's device, when connected to a network, automatically obtains a SIP number. That's not all you need to make a voice call, but many consumers have the necessary software, such as Skype, to make HD calls. They don't need a cable or phone service to do it -- in fact, if the call routes over cable or phone lines, it will be degraded to standard definition. That's because the old networks are only built to handle SD voice transmissions.
So a phone or cable company that sold HD Voice handsets to its customers would, in effect, be encouraging them to route their calls over the internet.
Skype does not compete as a primary phone line provider, noted Michael Jablon, Time Warner vice president of digital phone strategy.
But Skype could lower the value of the services provided by phone and cable companies, noted Julian Spittka, Skype product manager and senior engineer. He said that the old networks have failed to adapt to two key disruptions of the past two decades: the change from circuit-switched to packet-switched voice and the substition of software for hardware.
Spittka noted that Skype performs, in free software on the desktop, many functions that required big iron in the past. He added that free software downloads will always have a greater reach than hardware, which must be purchased.
Dialogic's Turner pointed to a third major change in the past decade: the sale of several billion SIM cards worldwide.
As the mobile network adopts new technology, in part because it is closed, software available for free on the internet will disrupt the business model of cablecos and telcos that provide internet service but still rely on voice services for the bulk of their revenue.
"70 percent of telco revenues come from voice," said Dan Berninger.
With HD, those revenues are threatened -- and, for the first time, VoIP with HD will be able to provide a higher quality call than wireline in SD.
These are interesting times.
Monday, September 14, 2009
The Professor Calls Out Internet Lies Again
Professor Andrew Odlyzko may not be a household name, but he should be to anyone who cares about the internet. Odlyzko is an internet statistician who dives into the past two centuries' worth of statistics, citing the rates of growth of traffic over British steam railroads, the early postal service, laws regarding lighthouses.
In 1998, he said many, including former FCC Commissioner Reed Hundt, were culpable in the telecom bubble. He called out the myth that the internet was doubling every 100 days, noting in section 3 of "Internet traffic growth: Sources and implications" that if the internet were really doubling every 100 days, as was widely reported, it would be growing over 10 times per year, and over 1,000 times every three years.
The telcos had an interest in perpetrating this myth. They were looking for handouts from the government. Other companies such as Inktomi also benefited from the myth. The equipment providers clearly benefited. "The growth rate in Internet traffic is the most important factor in determining demand for equipment," Odlyzko wrote.
These lies should be remembered because they contributed to the boom and the telcom crash that followed it, Odlyzko wrote.
"There are several lessons to be drawn from the myth of astronomical Internet traffic growth. One is that almost all people are innumerate, lacking the ability to handle even simple quantitative reasoning, and in particular to appreciate the power of compound interest. Another one is that people are extremely credulous, especially when the message they hear confirms their personal or business dreams."
This is strong language for a math paper and shows why Odlyzko is frequently quoted by such publications as The Economist.
More recently, Odlyzko wrote that the telcos don't need Deep Packet Inspection, an invasion of privacy that the telcos claim they need in order to free up congestion in home internet connections, in a paper called "The Delusions of Net Neutrality".
"What service providers publicly promise to do, if they are given complete control of their networks, is to build special facilities for streaming movies. But there are two fatal defects to that promise. One is that movies are unlikely to offer all that much revenue. The other is that delivering movies in real-time
streaming mode is the wrong solution, expensive and unnecessary," Odlyzko wrote.
The telcos make money from voice, not internet service, and definitely not from movies, and there's not enough money in the movie industry to change that. "For all the hoopla about Hollywood, all the movie theater ticket sales and all the DVD sales in the U.S. for a full year do not come amount to even one month of the revenues of the telecom industry. And those telecom revenues are still over 70% based on voice, definitely a connectivity service," Odlyzko wrote.
So why do the telcos want to have DPI? Video services such as YouTube work fine -- but they don't require streaming technology and the telco derives no income from them.
Odlyzko said there are two reasons why the large internet providers want DPI: "to prevent faster-than-real-time progressive downloads that provide low-cost alternative to [their] expensive service" and "to control low-bandwidth lucrative services that do not need the special video streaming features."
"Communications service providers do have a problem. But it is not that of a flood
of video. Instead, it is that of the erosion of their main revenue and profit source, namely voice. Voice is migrating to wireless. Second lines, and to an increasing extent, even primary landlines, are being abandoned. And voice is (with today’s technologies) a low-bandwidth service, that takes just a tiny fraction of the capacity that modern broadband links provide," Odlyzko concluded.
The propaganda campaign in favor of DPI and against net neutrality is all about who gets to control the internet. The phone and cable companies want to charge for the most basic of services, from e-mail to Google.
When Ed Whitacre, then CEO of AT&T (now CEO of GM) asked for extra cash from Google in a now-famous Businessweek interview, there was widespread revulsion from customers.
"It certainly has the feel of extortion: pay up or no one on our network will be able to reach your website," wrote one commentator.
Some even hoped that Google would become their own internet provider.
Here's the bottom line: net neutrality must not be stopped by lies that are as damaging as those that inflated the telecom bubble.
In 1998, he said many, including former FCC Commissioner Reed Hundt, were culpable in the telecom bubble. He called out the myth that the internet was doubling every 100 days, noting in section 3 of "Internet traffic growth: Sources and implications" that if the internet were really doubling every 100 days, as was widely reported, it would be growing over 10 times per year, and over 1,000 times every three years.
The telcos had an interest in perpetrating this myth. They were looking for handouts from the government. Other companies such as Inktomi also benefited from the myth. The equipment providers clearly benefited. "The growth rate in Internet traffic is the most important factor in determining demand for equipment," Odlyzko wrote.
These lies should be remembered because they contributed to the boom and the telcom crash that followed it, Odlyzko wrote.
"There are several lessons to be drawn from the myth of astronomical Internet traffic growth. One is that almost all people are innumerate, lacking the ability to handle even simple quantitative reasoning, and in particular to appreciate the power of compound interest. Another one is that people are extremely credulous, especially when the message they hear confirms their personal or business dreams."
This is strong language for a math paper and shows why Odlyzko is frequently quoted by such publications as The Economist.
The telcos don't need DPI
More recently, Odlyzko wrote that the telcos don't need Deep Packet Inspection, an invasion of privacy that the telcos claim they need in order to free up congestion in home internet connections, in a paper called "The Delusions of Net Neutrality".
"What service providers publicly promise to do, if they are given complete control of their networks, is to build special facilities for streaming movies. But there are two fatal defects to that promise. One is that movies are unlikely to offer all that much revenue. The other is that delivering movies in real-time
streaming mode is the wrong solution, expensive and unnecessary," Odlyzko wrote.
The telcos make money from voice, not internet service, and definitely not from movies, and there's not enough money in the movie industry to change that. "For all the hoopla about Hollywood, all the movie theater ticket sales and all the DVD sales in the U.S. for a full year do not come amount to even one month of the revenues of the telecom industry. And those telecom revenues are still over 70% based on voice, definitely a connectivity service," Odlyzko wrote.
So why do the telcos want to have DPI? Video services such as YouTube work fine -- but they don't require streaming technology and the telco derives no income from them.
Odlyzko said there are two reasons why the large internet providers want DPI: "to prevent faster-than-real-time progressive downloads that provide low-cost alternative to [their] expensive service" and "to control low-bandwidth lucrative services that do not need the special video streaming features."
"Communications service providers do have a problem. But it is not that of a flood
of video. Instead, it is that of the erosion of their main revenue and profit source, namely voice. Voice is migrating to wireless. Second lines, and to an increasing extent, even primary landlines, are being abandoned. And voice is (with today’s technologies) a low-bandwidth service, that takes just a tiny fraction of the capacity that modern broadband links provide," Odlyzko concluded.
The propaganda campaign in favor of DPI and against net neutrality is all about who gets to control the internet. The phone and cable companies want to charge for the most basic of services, from e-mail to Google.
When Ed Whitacre, then CEO of AT&T (now CEO of GM) asked for extra cash from Google in a now-famous Businessweek interview, there was widespread revulsion from customers.
"It certainly has the feel of extortion: pay up or no one on our network will be able to reach your website," wrote one commentator.
Some even hoped that Google would become their own internet provider.
Here's the bottom line: net neutrality must not be stopped by lies that are as damaging as those that inflated the telecom bubble.
Thursday, September 10, 2009
Two Rounds, Not Three, for the Stimulus?
It looks like there will be only two rounds of the stimulus.
In addition, Congressman Rick Boucher wants more needy areas in the Eastern U.S. to be eligible in round 2.
Expect the cash from round 1 to go out faster than expected -- and the start of round 2 to be delayed.
The grant applications from round 1 are in and there are a wide variety, from Hughes Network Systems requesting almost $500 million to local libraries asking for no more than $25,000.
What happens next is this: we learn what technologies will be funded, what entities will be funded, and get a large number of other questions answered.
And then the rules for round 2 will be changed.
In addition, Congressman Rick Boucher wants more needy areas in the Eastern U.S. to be eligible in round 2.
Expect the cash from round 1 to go out faster than expected -- and the start of round 2 to be delayed.
The grant applications from round 1 are in and there are a wide variety, from Hughes Network Systems requesting almost $500 million to local libraries asking for no more than $25,000.
What happens next is this: we learn what technologies will be funded, what entities will be funded, and get a large number of other questions answered.
And then the rules for round 2 will be changed.
Sunday, August 30, 2009
Speech at One Web Day NYC Workshop, Sat. Sept. 19, 2009
I will be speaking at One Web Day New York on September 19th, 2009.
Here is the first draft of the speech, "What Is Broadband And Why Do We Need It"
Comments welcome!
Here is the first draft of the speech, "What Is Broadband And Why Do We Need It"
Comments welcome!
Monday, August 17, 2009
400 Characters to Introduce Your Grant Application
What can you do with 400 characters? Describe the area covered by the grant, the purpose of the grant (anchor institutions served and key statistics about the area), and the technology used.
You have to say what makes your application different. Is it the libraries, telemedicine, or a local green energy project?
Finally, say something about the skills your team brings to the project.
= 386 characters
Get a writer.
= 397 characters
You have to say what makes your application different. Is it the libraries, telemedicine, or a local green energy project?
Finally, say something about the skills your team brings to the project.
= 386 characters
Get a writer.
= 397 characters
Tuesday, July 14, 2009
Interested in Stimulus Funds? Start Planning NOW!
I have not seen much commentary on this but any company hoping to obtain simulus funds must submit basic information by August 4th, according to the NOFA.
The NTIA and RUS prefer electronic applications, saying that electronic applications will be judged faster.
Applicants must have a DUNS number and must be in the Central Contractor Registration (CCR) database (I'll describe how to do this in a later post).
Applicants have to provide a business plan including milestones and a description of offerings and their service area in step one. The business plan must cover at least 15 other topic areas, but the requirements are slightly different for the RUS and NTIA programs.
More later -- but start making plans now!
Electronic applications must be submitted between July 14, 2009, at
8 a.m. ET and 5 p.m. ET on August 14, 2009...Paper submissions must be postmarked no later than August 14, 2009, or hand-delivered no later than 5 p.m. ET on August 14, 2009.
The NTIA and RUS prefer electronic applications, saying that electronic applications will be judged faster.
Applicants must have a DUNS number and must be in the Central Contractor Registration (CCR) database (I'll describe how to do this in a later post).
Applicants have to provide a business plan including milestones and a description of offerings and their service area in step one. The business plan must cover at least 15 other topic areas, but the requirements are slightly different for the RUS and NTIA programs.
More later -- but start making plans now!
Sunday, July 12, 2009
The Federal Definition of Broadband
The definition of broadband in the Notice of Funds Available (NOFA) (large file here) is 768 Kbps downstream and 200 Kbps upstream.
This definition is out of date. In a complaint in 2005, S. Derek Turner of the Free Press noted in a report that Canada defined broadband as 1.5 Mbps in both directions.
In the past, the definition of broadband was cut low to satisfy the demands of cable operators, who at the time had not built an architecture that could sustain high upload speeds.
At the present time, cable and telephone companies are delivering speeds far higher than those defined as broadband by the NOFA. Even mobile wireless services can achieve double the speeds described in the definition, both in upload and in download speeds, although mobile wireless networks are not built to handle significant demand (see the David Isenberg blog post When is normal use a DOS attack? for one example).
A poor definition of broadband encourages the wrong kind of innovation. There are serious class and race issues on the internet, but this definition encourages most companies to build a slow tier that will deliver cheap service to poor people and to the elderly.
Such a service would satisfy the agencies' goals as they have defined them, but fail to deliver long term growth. Instead, the services built would be obsolete fast, unable to handle the demands of the services of the future such as rich media, medical imaging, the sharing of business presentations -- and participating in government by using the Obama administration's trasparency sites, such as broadband.gov and recovery.gov.
The government can do better -- and it will do better if it funds those companies that promise to deliver real broadband highways, not the slow roads that the NOFA allows.
This definition is out of date. In a complaint in 2005, S. Derek Turner of the Free Press noted in a report that Canada defined broadband as 1.5 Mbps in both directions.
In the past, the definition of broadband was cut low to satisfy the demands of cable operators, who at the time had not built an architecture that could sustain high upload speeds.
At the present time, cable and telephone companies are delivering speeds far higher than those defined as broadband by the NOFA. Even mobile wireless services can achieve double the speeds described in the definition, both in upload and in download speeds, although mobile wireless networks are not built to handle significant demand (see the David Isenberg blog post When is normal use a DOS attack? for one example).
A poor definition of broadband encourages the wrong kind of innovation. There are serious class and race issues on the internet, but this definition encourages most companies to build a slow tier that will deliver cheap service to poor people and to the elderly.
Such a service would satisfy the agencies' goals as they have defined them, but fail to deliver long term growth. Instead, the services built would be obsolete fast, unable to handle the demands of the services of the future such as rich media, medical imaging, the sharing of business presentations -- and participating in government by using the Obama administration's trasparency sites, such as broadband.gov and recovery.gov.
The government can do better -- and it will do better if it funds those companies that promise to deliver real broadband highways, not the slow roads that the NOFA allows.
Thursday, June 18, 2009
RUS and NTIA Will Work Together
Liz Zucco of MarketSys told me to take a look at the fine print of the RUS announcement from June 11th (.pdf) and what she said I'd find is indeed there.
The announcement says:
What that means is this: there will be a division of labor. It is probable that the RUS will focus on delivering broadband to rural homes and that the NTIA will focus on delivering it to strategic institutions, which the ARRA describes as:
The implication is that EVERYONE needs to learn how to deal with the RUS. Many hope to just deal with the NTIA. If you are one of those, start learning about the RUS now.
People want to deal with the NTIA because its brief is more straightforward: it provides up to 80 percent of hardware costs. That's direct cash. The RUS provides loans, and the paperwork for loans involves a detailed business plan, potentially requiring quarterly forecasts for a 20 year period.
The announcement says:
By early summer 2009, RUS and NTIA will publish a joint Notice of Funding Availability (NOFA) in the Federal Register seeking applications for assistance. We anticipate three NOFAs. Timing on the subsequent NOFAs will be dependent upon results from previous NOFAs and our coordination with NTIA and consultation with the FCC as we deploy funds. This implementation plan is subject to change.
What that means is this: there will be a division of labor. It is probable that the RUS will focus on delivering broadband to rural homes and that the NTIA will focus on delivering it to strategic institutions, which the ARRA describes as:
(A) schools, libraries, medical and healthcare providers, community colleges and other institutions of higher education, and other community support organizations and entities to facilitate greater use of broadband service by or through these organizations;
(C) job-creating strategic facilities located within a State-designated economic zone, Economic Development District designated by the Department of Commerce,
Renewal Community or Empowerment Zone designated by the Department of Housing and Urban Development, or Enterprise Community designated by the Department of Agriculture;
The implication is that EVERYONE needs to learn how to deal with the RUS. Many hope to just deal with the NTIA. If you are one of those, start learning about the RUS now.
People want to deal with the NTIA because its brief is more straightforward: it provides up to 80 percent of hardware costs. That's direct cash. The RUS provides loans, and the paperwork for loans involves a detailed business plan, potentially requiring quarterly forecasts for a 20 year period.
Thursday, June 11, 2009
For-Profit Corporations Must Follow Microsoft to Stimulus Cash
Microsoft today announced that it is joining the Schools, Health and Libraries Broadband Coalition.
While some commentators see this as a big win formedical and educational institutions, I find it to be a big win for Microsoft.
I've been telling those I advise for some time that they need to contact any educational or medical customers to get stimulus cash because the stimulus is directed at key institutions and the money can only go to non-profits.
In fact, the money will be directed by the net's powerhouses, such as Microsoft, but it will be nominally granted to institutions that are the lynchpin of their community.
The goal of the act is that for-profit institutions be binded to non-profits in a patriotic network that serves the national interest.
I'm hoping for the best, but watching closely.
While some commentators see this as a big win formedical and educational institutions, I find it to be a big win for Microsoft.
I've been telling those I advise for some time that they need to contact any educational or medical customers to get stimulus cash because the stimulus is directed at key institutions and the money can only go to non-profits.
In fact, the money will be directed by the net's powerhouses, such as Microsoft, but it will be nominally granted to institutions that are the lynchpin of their community.
The goal of the act is that for-profit institutions be binded to non-profits in a patriotic network that serves the national interest.
I'm hoping for the best, but watching closely.
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