The inauguration of President Barak Obama on January 20 put a significant strain on the Internet. There were reports of difficulties connecting to the broadcast.
Arbor Networks published and article that shows the traffic peak that occurred. Backbone traffic jumped by as much as 40 percent over a normal Tuesday.
This peak occurred with most people using lower speed streams intended for PCs. Think of what would have happened if this content were be delivered to HDTVs at 1080p resolution!
Beefing up the Internet to handle this kind of demand but of HD streams is the challenge that the major ISPs have to face to make Internet TV more than a side show. This experience showed that the Content Delivery Networks were effective in managing backbone traffic, where they were used. This leaves the metro networks. My report Telecom 2020: Transformation Strategies suggests that video needs to be kept at the optical layer in the metro networks to handle this kind of onslaught. It will be interesting to see how this plays out.
Showing posts with label column. Show all posts
Showing posts with label column. Show all posts
Sunday, January 25, 2009
Thursday, December 18, 2008
Creating a Competitive Fiber Market
Last week I posted an article about how Swisscom will support competitors in its FTTH deployment. Swisscom will deploy four fibers to each home and reserve one for itself and make the other three available to competitors. It pointed out that the cost of providing four fibers is only slightly higher than providing a single fiber.
This significantly helps Swisscom's business case because it will generate revenue from every FTTH home that it deploys. This will provide it with a return on the investment that it is making on deploying these fibers. Swisscom will also accept investment or trade fiber connections with its competitors that deploy their own fiber networks.
A similar facility sharing approach has been adopted in France and is likely to be adopted broadly in Europe.
Japan is taking another approach. NTT is deploying all of the fiber; however NTT East and West (the two incumbents in Japan) can offer only the fiber connection. The subscriber gets the Internet service from an ISP. NTT operates two of these ISPs itself (OCN and Plala), but has to treat other ISPs on an equal basis. KDI and Softbank are major ISPs that use NTT fibers along with a number of smaller ISPs.
The U.S. FCC has given up on creating a competitive environment with FCC. It traded exclusive use of the fiber for the commitment to deploy fiber services. I think this was a bad bargain. Both Europe and Japan have shown that better approaches are available.
This significantly helps Swisscom's business case because it will generate revenue from every FTTH home that it deploys. This will provide it with a return on the investment that it is making on deploying these fibers. Swisscom will also accept investment or trade fiber connections with its competitors that deploy their own fiber networks.
A similar facility sharing approach has been adopted in France and is likely to be adopted broadly in Europe.
Japan is taking another approach. NTT is deploying all of the fiber; however NTT East and West (the two incumbents in Japan) can offer only the fiber connection. The subscriber gets the Internet service from an ISP. NTT operates two of these ISPs itself (OCN and Plala), but has to treat other ISPs on an equal basis. KDI and Softbank are major ISPs that use NTT fibers along with a number of smaller ISPs.
The U.S. FCC has given up on creating a competitive environment with FCC. It traded exclusive use of the fiber for the commitment to deploy fiber services. I think this was a bad bargain. Both Europe and Japan have shown that better approaches are available.
Sunday, December 7, 2008
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.
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.
Saturday, November 22, 2008
Taking the Back Office to 2020
This week I posted an article about a survey that showed how far mobile operators and mobile ISPs have to go to realize the potential in their subscriber information data bases. This is only one aspect of what has to happen to move back office systems to be ready for 2020.
The major goal for all Telcos has to be to dramatically increase efficiency. This will require that Telcos move to self-service and mechanized, if not automated, service fulfillment. They have to get humans out of the loop with systems that permit customers to order services on line and then to have them automatically installed using web-based customer portals.
As operators start providing GigE fiber connections or LTE wireless services, they will be providing access capabilities with spare capacity. The user may order a 50 Mbps Internet data service over a GigE link or a 1 Mbps wireless service. A web-based portal should be available that permits the subscriber to upgrade the 50 Mbps FTTH service to 100 Mbps or the 1 Mbps wireless service to 2 Mbps. The back office system can accept the order and implement while the subscriber is at the web portal placing the order.
Another area where significant efficiencies can be realized is in service assurance. By 2020 there will have to be agents that permit the operator to monitor, trouble shoot, and modify the configuration of devices on home networks or wireless handsets. These systems should proactively search for problems and fix them even before the customer becomes aware of them. This should automated as much as possible and mechanized at a minimum.
These kind of tools will enable the Telcos to offer a much broader variety of complex services and keep them operating correctly with less resource than they put into it today. The goal will be to eliminate the use of call centers, except for quite exceptional cases.
The major goal for all Telcos has to be to dramatically increase efficiency. This will require that Telcos move to self-service and mechanized, if not automated, service fulfillment. They have to get humans out of the loop with systems that permit customers to order services on line and then to have them automatically installed using web-based customer portals.
As operators start providing GigE fiber connections or LTE wireless services, they will be providing access capabilities with spare capacity. The user may order a 50 Mbps Internet data service over a GigE link or a 1 Mbps wireless service. A web-based portal should be available that permits the subscriber to upgrade the 50 Mbps FTTH service to 100 Mbps or the 1 Mbps wireless service to 2 Mbps. The back office system can accept the order and implement while the subscriber is at the web portal placing the order.
Another area where significant efficiencies can be realized is in service assurance. By 2020 there will have to be agents that permit the operator to monitor, trouble shoot, and modify the configuration of devices on home networks or wireless handsets. These systems should proactively search for problems and fix them even before the customer becomes aware of them. This should automated as much as possible and mechanized at a minimum.
These kind of tools will enable the Telcos to offer a much broader variety of complex services and keep them operating correctly with less resource than they put into it today. The goal will be to eliminate the use of call centers, except for quite exceptional cases.
Sunday, November 16, 2008
Telco IPTV Network Architecture
Both Alcatel-Lucent and Cisco have introduced edge routers that facilitate Telco IPTV networks by supporting fast channel change, packet retransmission, and ad insertion using a large flash memory in the router. Both companies are talking about having enough memory in these routers to support video on demand caching. That is, the most popular video on demand assets would be stored on the routers which would eliminate the network traffic required to provide them from a centralized server.
I think that these developments are a real step forward for IPTV networks. I think that their ability to support fast channel change and packet retransmission are fundamental improvements. The ad insertion and video on demand capabilities will provide significant improvements, up to a point.
The fundamental issue will be the amount of storage provided by the router. In a personalized ad insertion system, this will work fine as long as the number of personalized ads does not become too large. The issue with video on demand will be the hit rate, that is the number of video on demand requests that are served by the content on the router vs. the centralized router.
My own thinking on this issue has evolved. I did a report for MRG in the scaling of IPTV networks three years ago that identified that the amount of traffic required to support high levels of on demand traffic will be a major issue. At that time, I felt that the caching approach that Alcatel-Lucent and Cisco are talking about would be the answer.
I looked at this issue again last year in the report Networking Strategies for TelcoTV Services. With further analysis, I realized that the traffic to fill the distributed video on demand caches would be enough by itself to swam metro networks. My conclusion was that the IPTV traffic had to be removed from the IP/Ethernet networks and move down to the optical level.
My recent report Telecom 2020: Transformation Strategies looked at the issue again and took into account the consolidation of fiber access systems into large centers that would serve very large numbers of subscribers. This architecture would mean that there would be enough video on demand traffic to one of these major fiber access centers to fill a 10 Gbps or even a 100 Gbps optical link; therefor, there is no benefit for bringing this traffic up to the packet layer. It will be much more economical just to pass directly to the fiber access center over a direct optical link.
There are too philosophical points that drive my thinking. The first is that as IPTV moves from multicast to on demand and unicast, the TV traffic will dominate the network. It just makes sense to optimize the network for the dominant traffic type.
The second point is that it is very difficult to understand how a packet network can provide an acceptable SLA or QoS when 99 percent of the traffic on the network is deterministic TV traffic. On the other hand, it is easy to see how this will work over direct optical links.
There is a real question of timing here. For many carriers, the cached approach introduced by Alcatel-Lucent and Cisco will be a big help over the next three to five years. However, I do think that these carriers will be thinking seriously about a direct optical approach after that.
I think that these developments are a real step forward for IPTV networks. I think that their ability to support fast channel change and packet retransmission are fundamental improvements. The ad insertion and video on demand capabilities will provide significant improvements, up to a point.
The fundamental issue will be the amount of storage provided by the router. In a personalized ad insertion system, this will work fine as long as the number of personalized ads does not become too large. The issue with video on demand will be the hit rate, that is the number of video on demand requests that are served by the content on the router vs. the centralized router.
My own thinking on this issue has evolved. I did a report for MRG in the scaling of IPTV networks three years ago that identified that the amount of traffic required to support high levels of on demand traffic will be a major issue. At that time, I felt that the caching approach that Alcatel-Lucent and Cisco are talking about would be the answer.
I looked at this issue again last year in the report Networking Strategies for TelcoTV Services. With further analysis, I realized that the traffic to fill the distributed video on demand caches would be enough by itself to swam metro networks. My conclusion was that the IPTV traffic had to be removed from the IP/Ethernet networks and move down to the optical level.
My recent report Telecom 2020: Transformation Strategies looked at the issue again and took into account the consolidation of fiber access systems into large centers that would serve very large numbers of subscribers. This architecture would mean that there would be enough video on demand traffic to one of these major fiber access centers to fill a 10 Gbps or even a 100 Gbps optical link; therefor, there is no benefit for bringing this traffic up to the packet layer. It will be much more economical just to pass directly to the fiber access center over a direct optical link.
There are too philosophical points that drive my thinking. The first is that as IPTV moves from multicast to on demand and unicast, the TV traffic will dominate the network. It just makes sense to optimize the network for the dominant traffic type.
The second point is that it is very difficult to understand how a packet network can provide an acceptable SLA or QoS when 99 percent of the traffic on the network is deterministic TV traffic. On the other hand, it is easy to see how this will work over direct optical links.
There is a real question of timing here. For many carriers, the cached approach introduced by Alcatel-Lucent and Cisco will be a big help over the next three to five years. However, I do think that these carriers will be thinking seriously about a direct optical approach after that.
Sunday, November 9, 2008
White Space: Taking the Internet Back to the Future?
The FCC decision this week to open up the TV "white spaces" to unlicensed wireless services has great potential to break the hammer lock that the cable and Telcos have on the consumer Internet business today.
Ten years or so ago, before the advent of cable modem and DSL services, there where hundreds, if not thousands, of ISPs providing dial up consumer Internet access. There were a few large ones such as Prodigy and AOL along with many, many small providers. It was easy and inexpensive to set up a dial up ISP service. Get a T1 line and attach a dial up mux, and you were in business.
The advent of broadband services brought this to an end. The cable modem and DSL services had the ISP service bundled in with them. This gave the cable companies and the Telcos a strong strategic advantage. AOL continues to exist, but is a shadow of its former self. EarthLink provides Internet services on top of Telco DSL services, but has a very small share of the market. Almost all broadband Internet users subscribe to cable or Telco Broadband services.
The white spaces spectrum is the UHF TV spectrum that is not being used to broadcast TV content. There is generally 100 MHz of vacant spectrum that can be used for white spaces applications in the major metro areas. There is 200 MHz or more of vacant spectrum in more rural locations. This is enough to support several ISPs that want to offer services.
WiMAX and LTE 4G technologies can support wireless broadband data services that will provide a 1 to 5 Mbps. This will compete well with broadband cable and DSL services. These wireless services will share the conveniences of mobile voice service that have made them popular. These white spaces services have the potential to dominate the low end of the broadband data market. People will like their personal nature and their go anywhere convenience.
This will drive the cable companies to DOCSIS 3.o and the Telcos to fiber, which will give us all that still want them much higher performance on our home broadband services. Enabling start ups to compete will be a good thing for all of us consumers.
Ten years or so ago, before the advent of cable modem and DSL services, there where hundreds, if not thousands, of ISPs providing dial up consumer Internet access. There were a few large ones such as Prodigy and AOL along with many, many small providers. It was easy and inexpensive to set up a dial up ISP service. Get a T1 line and attach a dial up mux, and you were in business.
The advent of broadband services brought this to an end. The cable modem and DSL services had the ISP service bundled in with them. This gave the cable companies and the Telcos a strong strategic advantage. AOL continues to exist, but is a shadow of its former self. EarthLink provides Internet services on top of Telco DSL services, but has a very small share of the market. Almost all broadband Internet users subscribe to cable or Telco Broadband services.
The white spaces spectrum is the UHF TV spectrum that is not being used to broadcast TV content. There is generally 100 MHz of vacant spectrum that can be used for white spaces applications in the major metro areas. There is 200 MHz or more of vacant spectrum in more rural locations. This is enough to support several ISPs that want to offer services.
WiMAX and LTE 4G technologies can support wireless broadband data services that will provide a 1 to 5 Mbps. This will compete well with broadband cable and DSL services. These wireless services will share the conveniences of mobile voice service that have made them popular. These white spaces services have the potential to dominate the low end of the broadband data market. People will like their personal nature and their go anywhere convenience.
This will drive the cable companies to DOCSIS 3.o and the Telcos to fiber, which will give us all that still want them much higher performance on our home broadband services. Enabling start ups to compete will be a good thing for all of us consumers.
Saturday, November 1, 2008
The 4G Conundrum
The announcement by Cox Cable this week that it is going to build two wireless networks as well as utilize Sprint's wireless network got me thinking again about what I call the 4G Conundrum. I just don't understand how 3G and 4G networks will coexist.
Both 3G and 4G networks will be targeted to the same set of users: laptops, smart phones, and the iPhone class of handsets. Sure, operators can deploy 4G in areas were there is a high level of 3G use as a more economical way to add capacity. But it they provide higher speeds on these 4G hot zones, people will see a significant decrease in speed when they move to a 3G zone. The recent problems with iPhones on the ATT network show that these uses see this kind of performance decrease as a network failure. I think that this kind of zone based 4G deployment will just not provide the level of service that the Internet heads that use iPhone like devices will want.
The other thing is that 3G HSP continues to be enhanced. Performance is getting better. These advanced 3G networks are adopting the same flat IP architectures that is part of 4G networks. The question here is if 4G is really enough better than these advanced 3G technologies to justify deploying it.
There is one situation where the the case for 4G seems clear. The CDMA operators are moving to 4G LTE technologies to enable international roaming. Today the lack of international roaming is a big disadvantage for CDMA operators compared to GSM/WCDMA 3G operators. Verizon is adopting 4G LTE as are many other CDMA operators.
I do think that nearly all carriers will migrate to 4G LTE by 2020. There will be a few such as Sprint and Korea Telecom that will operate WiMAX 4G networks. It is very likely that handsets will be able to support roaming between WiMAX and LTE by that time. Operators will bite the bullet as HSPA's WCDMA reaches its limits and is surpassted by 4G OFDM technologies.
Both 3G and 4G networks will be targeted to the same set of users: laptops, smart phones, and the iPhone class of handsets. Sure, operators can deploy 4G in areas were there is a high level of 3G use as a more economical way to add capacity. But it they provide higher speeds on these 4G hot zones, people will see a significant decrease in speed when they move to a 3G zone. The recent problems with iPhones on the ATT network show that these uses see this kind of performance decrease as a network failure. I think that this kind of zone based 4G deployment will just not provide the level of service that the Internet heads that use iPhone like devices will want.
The other thing is that 3G HSP continues to be enhanced. Performance is getting better. These advanced 3G networks are adopting the same flat IP architectures that is part of 4G networks. The question here is if 4G is really enough better than these advanced 3G technologies to justify deploying it.
There is one situation where the the case for 4G seems clear. The CDMA operators are moving to 4G LTE technologies to enable international roaming. Today the lack of international roaming is a big disadvantage for CDMA operators compared to GSM/WCDMA 3G operators. Verizon is adopting 4G LTE as are many other CDMA operators.
I do think that nearly all carriers will migrate to 4G LTE by 2020. There will be a few such as Sprint and Korea Telecom that will operate WiMAX 4G networks. It is very likely that handsets will be able to support roaming between WiMAX and LTE by that time. Operators will bite the bullet as HSPA's WCDMA reaches its limits and is surpassted by 4G OFDM technologies.
Friday, October 24, 2008
How Much Will Network Traffic Grow?
Probably the biggest issue in planning for a network for 2020 will be the amount of trafficthat it will have to support. Network traffic has been growing by about 50 percent per year over the last 10 years. At this rate, the amount of traffic will be 100 times what it is today.
The question is how long will this party go on? It seems reasonable that this torrid rate of growth will have to moderate at some point of time. Any decrease in this rate of growth will certainly make life easier for the carriers. They would be able to reduce their investment in their networks.
It is clear that wireless networks are just now starting to see the impact of the growth of data services on their networks. The iPhone and similar devices are bringing a new set of Internet users to mobile networks. This is only the start. During the next decade most mobile users will be making extensive use of data services.
This means that the growth of data usage on mobile networks will probably grow faster than 50 percent per year over the next several years and grow at a rate similar to wireline networks after that.
It is hard to see what will continue drive growth on wireline networks at such high rates. I believe that it will be video and TV content. TV content will particularly important based on the increasing popularity of HD and 1080p.
Over the last 15 years there have been a steady stream of new applications that generate ever increasing amounts of traffic. I am not going to bet that this innovation has stopped. I think that anybody thinking about networks for 2020 must assume a factor 100 increase in traffic.
The question is how long will this party go on? It seems reasonable that this torrid rate of growth will have to moderate at some point of time. Any decrease in this rate of growth will certainly make life easier for the carriers. They would be able to reduce their investment in their networks.
It is clear that wireless networks are just now starting to see the impact of the growth of data services on their networks. The iPhone and similar devices are bringing a new set of Internet users to mobile networks. This is only the start. During the next decade most mobile users will be making extensive use of data services.
This means that the growth of data usage on mobile networks will probably grow faster than 50 percent per year over the next several years and grow at a rate similar to wireline networks after that.
It is hard to see what will continue drive growth on wireline networks at such high rates. I believe that it will be video and TV content. TV content will particularly important based on the increasing popularity of HD and 1080p.
Over the last 15 years there have been a steady stream of new applications that generate ever increasing amounts of traffic. I am not going to bet that this innovation has stopped. I think that anybody thinking about networks for 2020 must assume a factor 100 increase in traffic.
Telecom 2020 Blog
TelecomView has launched this blog as a result of the work that we have done to produce our new report Telecom 2020: Transformation Strategies. This blog will include news items that are relevant to this transformation. We will also publish a weekly column that will give our opinion on an important issue that is relevant to this subject.
We encourage you to post your comments. Anything that is said about the state of telecom in 2020 is an opinion. Your opinions are at least as good as ours. We would love to hear them. The more diverse the opinions included in this blog, the better it will be.
We encourage you to post your comments. Anything that is said about the state of telecom in 2020 is an opinion. Your opinions are at least as good as ours. We would love to hear them. The more diverse the opinions included in this blog, the better it will be.
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