10 thoughts on “Science, politics and the optics of broadband”

  1. The solution is open/equal access in layers 1/2. Worked in LD, data & cellular in 80s-90s & got us to where we are. 802.11, an unintentioned form of equal access got us the rest of the way. Still bandwidth remains 20-150x overpriced depending on where you are in the stack, because of remonopolization 10 years ago. Failure of Telecom Act & govt policy has been not applying equal access evenly to all incumbents AND newcomers that receive RoW or frequency.

  2. There’s actually no compelling case for gigabit to the home anytime soon, and the math of aggregation suggests that middle mile and core links can’t support it right now in any case. Most long-haul interconnects are still in the 10 – 40 gig range right now, so how many gigabit homes can they really handle?

    The cable company’s coax wires can scale up to 10 Gbps, and they’re already pumping 3 – 4 Gps counting all the DTV programming they carry. The ultimate mix between TV and broadband is up to the consumer, as the cable company is in the business of making money and they will respond to actual consumer demand. Blog posts, not so much, however.

    The 19 million miles of fiber the U. S. is installing every year goes primarily into middle mile and other commercial aggregation points, which is to say it goes where the demand is. We laid all this out in http://www.itif.org/publications/whole-picture-where-americas-broadband-networks-really-stand, and most of the serious policy makers in DC agree with us.

    1. Actually, the compelling case is that most folks will switch to gigabit service in their homes if it is priced at a fair mark-up from the cost of providing it. Everyone knows this. No more 95% profit margin nonsense. If Google can break even providing gigabit fiber to the home for $70/mo, including the cost of building the infrastructure of the new network, then AT&T is doing something quite wrong when they charge $51/mo for 12Mbps, which is two orders of magnitude slower, over an infrastructure paid for by the taxpayers decades ago. At that price per Mbps, AT&T would charge $4,233.00/mo for a Gbps connection. That’s going to start dawning on millions of Internet customers really soon now. The cartel’s illusion of expensive and scarce bandwidth is about to collapse forever.

      And the thing about interconnects is, they get laid in bundles, and those bundles are tied together into virtual circuits of capacities equal to the aggregate capacity. There are many alternate routes for bottle-necked traffic to follow along other bundles. The max capacity of any one fiber is NOT the max speed of the Internet, and YOU KNOW THAT.

      Anyway, no-one has to wait for the middle mile to bulk up before offering ubiquitous gigabit fiber to the home. You conflate an “absence of demand” with the industry’s concerted effort to keep demand down. They already get as much money as customers are willing to pay for any service. It’s more accurate to say that companies are in the business of making money as cheaply as possible. It’s more accurate to say that Internet providers have resisted a little modest spending on dramatic upgrades, despite the customer’s keen interest in it. They’re shameless, they don’t listen to customers or blogs, and they have no fears about regulation or competition due to the corruption of our system. They’ll keep milking the legacy infrastructure for top dollar, until they have no choice but to upgrade (or they make good on existing plans to get out of the wireline business).

    2. So Richard, because we destroyed LD competition and remonopolized the mid-mile 11 years ago by “deregulating” it, you say we can’t invest at the edge because we would overwhelm the core? Now you have indeed gone too far! The logic is disingenuous at best and twisted at worst. If there were true competition in mid-mile (not the competition that partially exists for 20-30% of the higher-end commercial market) then retail bandwidth pricing would reflect marginal cost and be 90%+ below where it is today and still generate MORE revenue.

      History tells us this pricing elasticity of demand, which occurs in 3 flavors (normal, private to public shift, and application), won’t happen with average, high-priced, vertically integrated carriers. It didn’t happen between 1913-1983 and it has only happened in part since 2002 because of “open access” wifi and the remnants of the 3 digitization waves of the 1980-90s. Time to throw out 100 years of false network doctrine.

  3. “average price per megabit in the market has fallen at a rate of about 40% per year for a dozen years” even as the number of players has gone from 200 to 12. The prices on Cogent’s network during “period has fallen from $10 a megabit to the most recent quarter at $3.05 a megabit.”

    There’s a huge math error here. If the prices dropped 40% a year, the price per Mbit would be $6 after the first year, $3.60 after the second, $2.16 after the third… A lot less than $3 in a dozen years.

  4. BTW, the slide from Akamai has a misleading legend. It’s not “Top Average Connection Speeds”, it’s average TCP connection speeds, where the capacity of the wire is divided first by the number of users sharing an IP address and then by the number of concurrent TCP connections each user has open. Akamai measures an “Average Peak Connection Speed” that more accurate measures network capacity. For the US, avg. peak is 30 Mbps and change.

    Not to promote my work too much, I wrote a blog post on Akamai’s figures reflecting extensive discussions with them on what the figures mean: http://www.innovationfiles.org/u-s-broadband-speed-slightly-better-in-latest-akamai-report/

    Carry on.

  5. I would like to know, where do you have that “Top average connection speed” (source Akamai from. I have tried to fiund it, but not being succesful. I wouldlike to know, when this was searched and what is the methodology behind…

  6. Richard, thanks for underscoring my point about open access at layers 1-2. Sharing goes away because there is always a tradeoff between layers 1, 2 and 3. The cost of components (moore’s law) are constantly dropping while the network effect (metcalfe’s law) is constantly generating new ecosystems of demand and hence revenue growth to amortize continual investment in those layers. The carriers can’t keep up, so they price higher as the lose more demand in the upper and lower portions of the demand curve. Let’s see how much longer the vertically integrated service provider stack holds up to OTT, WebRTC, SON/hetnet and SDN/openflow. And that’s before the impact of Google’s optical switch in the datacenter hits the public nets.

    1. Open Access at layer 1 & 2 depresses investment in faster networks, Google doesn’t offer it, despite early claims that they would.

      There’s no middle mile monopoly in the US, we have a healthy independent fiber business that’s installing 20 million miles of fiber per year.

  7. Om – Interesting observations on the continuing bandwidth growth in transmission networks and, as you note, JDSU will indeed enable this by not only developing and supplying high performance photonic components, but also through test and measurement solutions. But the real story is actually a little hidden. Yes, the demand for bandwidth and 400G speeds continues but the key challenge for service providers is the ability to apply the right bandwidth at the right time – i.e., be intelligent. Applications’ requirements differ: web browsing and file sharing may demand high bandwidth, but aren’t latency- or jitter-sensitive. Something like streaming video is extremely sensitive to the way bandwidth is delivered and it is precisely these services from which the operators need to capture revenue. It is actually relatively simple to throw raw bandwidth and capacity at the network with 100G and 400G speeds, but without continuous agility and intelligence to know which users are using which services – and when – more congestion and a declining customer experience will prevail. With the added capacity of 400G on the horizon, that will only grow more important.

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