Femto Applications

Light reading published an article describing work that is going on to develop applications that run on femto cells. There is discussion that we will see femto application stores in the future.

Many of the applications are based on presence. One example is an application that will tell your room mate to feed the fish when the femto recognizes that the room mate has returned home from work. Other applications involve home control including remotely controlling the TV or home entertainment system, the home heating and cooling system, or other home appliances.

This is interesting; however, the home controller idea has not taken hold as yet. Maybe the femto is the missing element that will make it work.

Femto Cells Coming in the UK and the U.S.

Vodafone will introduce a 3G femto service in the UK on July 1, 2009 using an Alcatel-Lucent gateway. The femto service will be available under several plans that include no charge to a cost of $250 for the gateway and $8 per month.

ATT is expanding its current 3G femto technical trial with 200 users to a marketing trial where it will be sold at ATT stores in several cities. It plans a full rollout by the end of 2009.

The telcos have significant challenges in pricing and marketing femto cells. They will have to convince a broad market what femtos do and what their benefits are.

UK Digital Britain Report

The UK government has published its Digital Britain report along with an Impact Statement. These are extensive reports. The Executive Summary by itself makes 83 separate points. There are a couple of significant things that I saw:

• It wants to increase the households that can access broadband at 2 Mbps from under 90 percent to 100 percent. It expects that wireless will be important in accomplishing this. It expects to make 200 million pounds available to support this goal. It also encourages the allocation of new spectrum for this purpose.
• It encourages the deployment next generation fixed broadband, which it defines at 50 Mbps by example.

This is not an ambitious set of goals. A number of other European countries have much more aggressive programs, including France, Switzerland, and the Scandinavian countries. It does not come close to matching what is going on in Asia, especially Japan, Korea, and China.

Following this plan will keep the UK at the back of the pack. At least it will be in good company along with those of us in the U.S.

Broadband Providers "Not So Fair Use" Violates Net Neutrality

A couple of articles have been published recently describing how broadband providers are managing their traffic to their advantage and to the detriment of specific services. The BBC has published an article describing how BT throttles the bandwidth on its broadband service and degrades the quality of the BBC iPlayer at certain times of the day. The second is a Light Reading article describing the results of femto cell testing by Epitiro that shows that traffic management by broadand providers will negatively affect the performance of femto cells during peak traffic periods.

The BBC has identified a clause in BT's fair use policy that permits it to reduce the bandwidth on its broadband service to below 1 Mbps, which degrades the quality of the BBC iPlayer over the top IPTV service. The article cites an example of a user who has been affected by this policy.

The traffic analysis performed by Epitiro shows that some broadband providers are throttling IPSEC traffic so that it provides worse performance that best efforts Internet traffic at the same time.

These are the kind of situations that those promoting the Net Neutrality agenda are concerned about. In both cases the broadband providers are throttling the traffic of competitors. The BBC iPlayer competes with BT's BT Vision IPTV service. Femto cells will compete with the broadband provider's VoIP and POTS services. The broadband providers are building the case for Net Neutrality when they do this and will produce a regulatory reaction that they will not like at all.

LTE Issues

Light Reading published an article based on discussions from the LTE World Summit. Carriers there identified a number of issues that need to be resolved before they deploy LTE, including:

• Support for voice and SMS services including circuit switching as well as packet switching.
• Building enough back haul capacity into the network to realize LTE's performance promises.
• Intellectual property rights.
• Spectrum

Much of this discussion revolved around lessons learned from 3G. It does point out the real problems carriers will have rationalizing both their 3G and 4G strategies. I think that they will either stay with 3G or replace their 3G networks with 4G networks. I think that trying to provide both will be a real mess.

Verizon to Deploy 4G by 2014

Light Reading has published a Verizon interview that states that the timetable of Verizon's planned LTE deployment of a couple of test markets in 2009 and "30 or so" markets in 2010. He then suggests that the build out could be completed relatively quickly after that.

This is an aggressive deployment schedule and I expect that it will be 2012 or 2013 before Verizon's 4G build out is complete.

Telenor and Tele2 to Build 4G Network in Sweden

Telenor Sweden and Tele2 Sweden plan to build a joint 4G network in Sweden. The agreement includes the formation of a joint venture for network construction and sharing of spectrum. The roll-out will start in 2009 with the intent of launching LTE based services in the end of 2010.

In 2013, the operators expect 99 percent of the Swedish population to have access to mobile broadband at speeds of up to 80 Mbit/s in rural areas and up to 150 Mbit/s in urban areas. The roll-out includes an extension of the GSM network by 30-50 percent, resulting in better indoor and outdoor coverage on mobile voice communication.

This is another example of resource sharing between operators for building 4G networks. I think this will become a common approach for 4G and is likely to become important for FTTH networks.

FCC to Create U.S. to Create National Broadband Plan

The recent American Recovery and Reinvestment Act of 2009 also known as the stimulus act, charged the Department of Agriculture’s Rural Utilities Service (RUS) and the Department of Commerce’s National Telecommunications and Information Administration (NTIA) with making grants and loans to expand broadband deployment and for other important broadband projects. Congress provided $7.2 billion for this effort but is not insufficient to support nationwide broadband deployment. Consequently, the Recovery Act charges the FCC to create a national broadband plan by February 17, 2010, that will seek to ensure that every American has access to broadband capability and establishes clear benchmarks for meeting that goal.

This kind of comprehensive plan is over due. Europe and countries such as Japan, Korea, and Australia are well ahead of the U.S. in this effort.

The problem is that such a comprehensive view is very a very complex project. It will be difficult to bring focus to such a large effort that will make it effective. It could easily end up so general that it does not provide a useful perspective.

I think that the FCC should focus on creating an open environment that creates a competitive service environment based on fiber to the home and 4G wireless. The current approach that relies on competition between the telco and cable giants impedes competition. ADSL, VDSL, 2G, and 3G wireless are all technologies that are either now obsolete or rapidly approaching their obsolescence. Drawing such clear lines will help the FCC make this effort meaningful.

Femto Cell Standards Complete

The 3GPP has published standards for femto cells listed in a release from the Femto Forum. The Broadband Forum also contributed to these standards. The new standards cover four main areas: network architecture; radio & interference aspects; femtocell management/provisioning and security.

These standards are based on the 3GPP UMTS protocols and extend them to support the needs of high-volume femtocell deployments. The new standard has also adopted the Broadband Forum’s TR-069 management protocol which has been extended to incorporate a new data model for femtocells developed collaboratively by Femto Forum and Broadband Forum members and published by the Broadband Forum as Technical Report 196 (TR-196).

Femto cells will be a key network element and will generate fundamental changes in how services are delivered and sold. This is an important start.

Australia will Establis New Company to Build Fiber Network

The Australian government has unveiled a plan establish a new company to build and operate a national broadband network that will provide 100 Mbps fiber connections to homes, schools, and businesses in towns of a population of about 1,000 or more, which will provide coverage to 90 percent of the people in Australia. Wireless and satellite technologies capable of providing 12 Mbps will be used in more remote locations. This network will include fiber links between cities, major regional centers, and rural towns.

The services of this network will be provided on wholesale-only, open access network. The initial estimate is that this network will cost $30 billion to build. The government plans an immediate investment of more than $3 billion. The Australian government will seek private investment in the company to draw on private sector capacity and expertise. However, ownership restrictions will be established to protect the Government's objective of a wholesale open-access network.

This is a strong commitment to an advanced broadband network. It provides a unique approach to provide an open fiber network. It illustrates the importance of government policy in building fiber networks.

Telefonica and Vodafone to Share Facilities

Telefonica and Vodafone have formed a program to share mobile network assets across European operations. They are also exploring opportunities to cooperate in related areas such as the provision of transmission services.

This program is expected to generate cost savings of hundreds of millions of euros for both companies over the next 10 years. It is also expected to reduce the environmental impact of both companies due to the consolidation of existing sites and the joint build out of new sites. Both companies will continue to manage their own traffic independently.

The details of the agreement include:

• Germany: Both companies to share existing 2G and 3G sites. Shared masts can also be used for microwave back haul.
• Ireland: Both companies to open all network sites for sharing by the other party. New builds will also be conducted jointly where roll-out plans are aligned.
• Spain: Both companies to extend existing site share agreement from 2007, which includes the shared usage of power, cabinets and mast. To date 2,200 sites are shared under this agreement. During 2009 and 2010 additional sites will be included.
• UK: Both companies to focus on joint build of new sites and consolidation of existing 2G and 3G sites.

Facility sharing will be an important approach to minimizing costs and the environmental impact of wireless networks during the next decade. It will be a key strategy for deploying 4G networks, in particular.

T-Mobile Says Mass Market Femtos Will Wait Until 2010

Light Reading published and article on a presentation by T-Mobile at the Mobile World Conference about its plans for femto cells. T-Mobile said that it will start with a controlled femto cell introduction in the middle of 2009. T-Mobile said that it will wait for Release 8, expected in 2010, before it makes a mass market introduction of femto cells.

T-Mobile tested femtocells from three different suppliers with 100 employees in Germany, about 90 employees in Poland, and about 60 employees in the UK. The trial in the UK is still on-going and will probably involve up to 100 participants.

Some of the problems discovered included limited mobile data rates due to the limitations of lower speed DSL broadband connections; issues with femtocell location detection; reduced battery standby time in terminals; and interference between the macro cell and femtocell.

Femto cells will be a significant development and have far reaching implications for mobile and broadband services.

Cisco Releases Lastest Traffic Study

Cisco released its latest Visual Networking Index study that updates its global data traffic forecast. Key findings include:

• Global mobile traffic will increase 66-fold between 2008 and 2013 based on a 4G mobile Internet.
• Nearly 64 percent of the world's mobile traffic will be video by 2013.
• 4G mobile broadband devices will constitute more than 80 percent of global mobile traffic by 2013.
• Latin America will have the strongest mobile growth at 166 percent CAGR, followed by the Asia-Pacific region at 146 percent.
• Asia-Pacific will account for one-third of all mobile data traffic by 2013.

The forecast that video will account for nearly two-thirds of mobile traffic by 2013 is interesting. My report Investing in Mobile TV took a close look at the business case for mobile TV and found that it will be difficult for carriers to make money on such a service. It generates too much traffic to produce much profit. It will be interesting to see how this works out.

Korea Plans 1Gbps FTTH Network

An article in the JoongAng Daily states that the Korean government has a $25 billion plan to deploy wireline and wireless broadband services over the next five years. The government will contribute about $1 billion and the rest will come from industry. This project will deploy fiber wireline services of 1 Gbps to each home and wireless services of 10 Mbps.

This project defines the state of the art. I expect that 1 Gbps fiber services will be come the the standard level of service by 2020. Again, Korea is well ahead of the curve.

Nokia Siemens Introduces Multi Radio BTS

Nokia Siemens has introduced a based station that will support GSM, WCDMA, HSPA, and LTE. It includes integrated Ethernet switching and transport. It expects to ship this system starting in 2011. This base station significantly reduces power requirements at 790 watts.

This is the kind of system that will facilitate the operation of multiple networks (2G, 3G, and 4G) as well as the evolution to 4G for all services. I expect to see other major vendors to introduce similar systems.

U.S. Delay in Analog Sunset

The U.S. will delay the completion of the conversion to digital broadcasting from February 17, 2009 to June 12, 2009. This will allow stations to continue their analog broadcasts until that date. There are more than 1,000 stations that have permission from the FCC to shut off their analog broadcasts on February 17. Nearly all stations will have to do it by June 12.

This shows what a mess the cessation of analog TV broadcasting can be. Frankly, I don't think it will be much better on June 12. This move is going to cause problems for a lot of people who have not prepared for themselves. I doubt three more months will change much.

This will delay the availability of 700 MHz spectrum for mobile applications. I expect that Verizon will use this as an opportunity to move its LTE trial to 2010 and commercial deployment to 2011.

Femto Cell Survey Article

Light Reading has published a nice survey article about the state of femto cell technology. Femto cells are likely to very important but are just getting off the ground now.

Altair 4G OFDM Chips

I recently spoke with Altair, which is an Israeli company that is building OFDM chips to support both WiMAX and LTE. It is focusing on 4G technologies by building handset chips. The company currently has chips for WiMAX and for XGP, which is an OFDM technology deployed by Willcom in Japan.

Altair plans to introduce an LTE chip in the middle of 2009 and a multimode chip by the end of 2009 that will support WiMAX, XGP, and LTE. This will enable support of all three technologies in a single hand held device. The company is also working with a 2G/3G supplier to offer the ability to add WiMAX, XGP, or LTE to a 2G/3G device using the Altair chip as a coprocessor.

This is interesting because it shows that progress is being made on chips that will facilitate the integration of 2G, 3G, and 4G WiMAX and LTE networks. This will help with the evolution of existing networks to WiMAX or LTE. It may also facilitate roaming between WiMAX and GSM, WCDMA, and LTE networks, which may keep WiMAX from becoming the dead end that CDMA has become.

Is Google Paying its Fair Share?

The blog Internet Evolution published and article discussing comments by an analyst who says that Google is not paying its fair share of the Internet infrastructure.

This is an interesting issue. The core Internet network has a robust business model. As the ISPs and ASPs generate more traffic, for example, by providing more video and TV traffic, they need to increase the bandwidth that connects to them to the Internet backbone. They pay for every additional bit of bandwidth that they use. This means that the carriers revenues increase as the traffic increases, which is and has been a sustainable business model.

I think that the question that is raised in this article is if Google is using more bandwidth per dollar spent on backbone capacity than other companies. This may be assuming that Google distributes more videos than others.

The more interesting question is in the access network. The broadband access providers are stuck in the conundrum that customers expect more bandwidth over time but do not expect to pay more for it. This is most clearly demonstrated in countries in such as Japan and France where the price of a 100 Mbps FTTH connection is the same as a 10 Mbps DSL connection. Carriers in these countries are making huge investments to deploy fiber and are not getting significant revenue increases to support it.

I have wondered if Google and the other ASPs and ISPs should pay more for their backbone connections to support the deployment of FTTH. After all, these companies get tremendous benefit from the deployment of higher speed access networks. It only seems fair.

However, there are significant problems with this approach. One is that the combined profits of Google and the other ASPs and ISPs are not nearly enough to cover the cost of deploying fiber at a reasonable rate.

The second problem is that paying additional amounts to the backbone provider will not necessarily lead to a fair distribution of these funds to the access network providers. For example, if Google pays the premium to ATT, how does Verizon get support in its territory. Well, Google will probably by backbone services from Verizon also, so that there will probably be a reasonable allocation. But then, what about Surewest and the thousand or so small U.S. telcos that do not offer backbone services?

This could be handled by an extension of the Universal Services Fund, but then what about the broadband operators in other countries? Do we need to add in a UN Universal Fund charge as well?

None of this seems practical, which leaves the broadband providers without any way to monetize their investments in fiber. This will certainly discourage investment and delay the availability of fiber services That is too bad.

Is Wireless Important to Cable Companies?

A Light Reading article discusses comments by a financial analyst who believes that wireless is not an important element to add to cable bundles. His point is that bundles require discounts, which reduces revenues.

I think he is probably right about adding wireless to cable bundles. Wireless probably will have less effect on consumer decisions than the other elements of these bundles.

However, in the long run as carriers offer wireless and broadband wireline services based on a single, integrated IMS infrastructure to deliver VoIP services there will be tremendous opportunities to integrate wireless and wireline services into a single offering. The cable companies will have to be in a position to offer similar integrated wireless and wireline services to stay in the game.

The moves that the cable companies are making with Clearwire today are a good step to prepare for that day.