Today I will focus on the idea that internet service providers, such as Google and Microsoft, pay into the USF, which would be extended to cover broadband services. Since these SPs often generate automatic cataloging traffic that does not tie directly to a single subscriber, the rationale is that they should help pay for the base internet infrastructure. It raises the question of who should and will pay for machine-to-machine (M2M) communication on the internet, one of the fastest growing kinds of traffic.
For example, if you have anti-virus software on your PC at home, how often does it check for new virus definitions? What motivation is there to ensure the files transferred are as small as possible? But that is today.
Tomorrow it is envisioned that a whole host of M2M communication may occur: your power meter providing frequent updates and turning off appliances like the air conditioner during peak load times when you are not home, your refrigerator talking to the grocery store to reorder milk and lettuce per your personal shopping list, your set top box communicating the ads that you watched the previous evening, even your oven checking your personal GPS to see if you are close enough to start cooking the chicken.
While you may think some of these silly, there is growing M2M traffic on the internet, and the old paradigm of billing on a person to person basis will not capture this usage or determine its reimbursement. I applaud the NTCA for thinking about this traffic in light of a modification to USF, and encourage us all to think broadly as new legislation and regulation is written.
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( 3 / 103 )OPASTCO has posted a two part article that explains how broadband customers are redefining the service provider network. This is a topic that is close and dear to Occam Networks and one we’ve written or spoken about on blogs, industry articles and trade show presentations.
The first blog post on the topic explains that customers rely on broadband for their communication needs as the traditional access line counts continue to erode. As broadband adoption rises and applications evolve, consumers are finding their need for traditional narrowband services (i.e. POTS, FXS, etc.) decreasing.
Ultimately, the conclusions are aligned with our advice to Rural carriers – reinvent your businesses not just your networks. Or, as OPASTCO puts it, “the pipe itself is not enough.”
The second blog post summarizes how OPASTCO recommends operators reshape their businesses around broadband, three areas of focus are laid out.
Services – Not just physical connectivity or network based, customers services that extend the relationship with the consumer or business are deemed vital to the longevity of the broadband provider. Examples cited include home networking, home monitoring and security.
People – While Rural operators have a rich tradition of local presence and pull from local resources, but the shift in thinking from infrastructure responsibilities to skills that anticipate customer needs at all levels within a telco is a profound shift.
Network – It’s not enough to build a network that simply enables communication. Operators, rural and otherwise, have competition. Consumers have choice and the recipe to winning and retaining customers starts with the network. Quality, reliability and security are paramount to the future of broadband networks.
This entry is not intended to steal OPASTCO’s thunder. I recommend you read their blog posts as there’s great insights to what rural operators are going through today.
I do, however, want to point out a few things that network planners should consider as you prepare for the upcoming NOFA and your own stimulus fund applications. The role of the ‘Network’ in the business of broadband providers is often taken for granted and almost always undervalued. With so much riding on the infrastructure, carriers should always consider not just the initial capital costs of installing or upgrading the broadband connections but also the service opportunity impacts to their broadband business.
Any operator that’s experimented with or deployed IPTV will tell you that the initial revenue generated by basic video offerings is but the beginning of a broader entertainment portfolio. A portfolio that includes VOD, gaming, customized programming, sports entertainment packages – all of which add to the revenue mix.
Very little of which is possible without deep fiber base networks leveraging short copper loops or fiber to the premise. And while everyone is sensitive to first time costs needed to make business cases work, the value of revenue potential should not be overlooked.
As I’ve stated before, rural operators should use this inflection point to not just build out a few new remote terminals or upgrade a few broadband connections. A renewed focus to expand a business that revolves around broadband as a primary enabler of new revenues and not just a complement to an eroding voice business is effectively what OPASTCO recommends to rural operators. I couldn’t have said it better myself!
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( 3 / 108 )In discussions with international access carriers over the last few months, I am starting to see links between the call for Open Networks in the Stimulus Plan (and echoed in the Report on Rural Broadband recently) and plans for a Smart Utility Grid.
The Report says this about Network Openness: Legacy and next generation applications are converging on the communications platform we know as the Internet, and how this critical infrastructure is managed now and in the future will determine whether it remains an open platform for innovation. The positive externalities and network effects of ubiquitous broadband will not be realized if consumers are all constrained by careful bundling, packaging, and discriminatory practices that whittle away the end-to-end structure of the public Internet. “Openness” is not just another bromide, but a principle we must tenaciously preserve.
Due to the debt loads of many telecom carriers, and the expectation that the "fiber" physical layer must be made available for any Service Provider to offer dial tone, internet, video or other services, increasingly other parts of the world are moving the construction, ownership and management of the physical network to utility companies. These companies can then recover the cost of the network installation through long term energy rates to subscribers, while using a spare fiber or two to manage the power usage at each home or business. Across the USA and Canada, agencies have already approved the building of a "Smart Grid" access network under these rules, just under another name and without requiring that it be open.
Telecom carriers need to get and stay knowledgeable about Smart Grid news and legislation, and start thinking through the potential and troubles of operating services over another company's fiber.
What do you think?
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( 2.9 / 111 )Last week’s blog entry discussed the FCC’s report on a rural broadband strategy. One of the points made by Chairman Copps was that he believed in the FCC’s existing Internet Policy Statement but added that a fifth element is needed with respect to nondiscrimination of traffic.
There are four elements to the FCC’s current Internet Policy Statement but I also pasted in the lead in statement that tells in a nutshell why the Policy Statement is needed:
“to ensure that broadband networks are widely deployed, open, affordable, and accessible to all consumers, the Commission adopts the following principles:
• To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to access the lawful Internet content of their choice.
• To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement.
• To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to connect their choice of legal devices that do not harm the network.
• To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to competition among network providers, application and service providers, and content providers.
First off there is the statement with the terms: widely deployed, open, affordable and accessible. Then there is the lead in to each of the principles - “To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet,…”. To me, the FCC is acknowledging that the Internet is highly interconnected and the connections to it are “open”. The FCC would like to keep it that way and wants to make sure that as many people as possible are able to enjoy its many benefits. I’ll discuss the term “open” in a moment but first I would like to discuss the 4 elements of the policy statement.
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( 3 / 108 )After researching last week's entry on getting involved in community-wide broadband funding applications, it got me thinking. How many states are actively involved in expanding broadband to rural communities. And how many of them are effectively using broadband to drive their communications?
To be clear, I did not go off researching all 50 states because, in all honesty that would have taken more time than I was willing to spend on the project, but I did try to focus on a least one state in a variety of regions. If I missed a state that you think is doing a good job, let's hear it! So without further ado, the states I think are doing a good job include:
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