Tuesday, September 9, 2014

FirstNet - Public Safety Broadband the architecture of Broadband America? Kill two birds with one stone.

This is what you do when you are searching for your next gig...you blog.


Summary: Two of the United States' largest telecommunications companies, AT&T and Verizon, are shying away from the government's move to boost its definition of what constitutes broadband from 4Mbps to 10Mbps. (By Leon Spencer | September 9, 2014)

It’s an interesting yet natural occurrence to understand that the carriers are moving away from the notion of 10Mbps because of one underlying need: infrastructure. What I’m talking about is that the existing infrastructure is dated and antiquated towards a role of providing service with lesser-known technologies than what exists today.  The fact is today’s technology, more specifically LTE, is designed at twice the amount of coverage than the “old” 3G type services.

Typical designs of past 3G services were focused on roughly 3km circle fixed from the center of a tower (depends on terrain) of which was to reach an optimal bandwidth of 1-3 Mbps – thus the 4 Mbps reference. For LTE the design is at 6-8 miles for optimal bandwidth coverage of 1Gbps (first generation LTE at roughly 890 Mbps) within the sweet zone, yet can still reach upwards of 30 miles at yet 1 Mpbs – thus the 10 Mbps requirement. LTE Advanced, and the radio designs coming out today, are even twice that coverage area and three times the bandwidth to the sweet spot; so naturally what this means is that we cover more than twice the area and with way more bandwidth functionality, thus less than half of the capital required in the past to build it. But why are the carriers not seeing an ability to build out more if it is cheaper today than yesterday?

The fact is that the voice services of the past are next to nothing now days, thus the carriers are driven towards becoming a commodity of access to the same customer base of subscribers of which is the meat for all their bottom-line revenue -- but things are changing and they know it. The carriers have all eaten a bad case of Fugu, the Puffer Fish, which has paralyzed them with lethal amounts of the poison tetrodotoxin. Given the size of these carriers today, they find themselves inundated, or paralyzed, with old existing infrastructures of assets that are irrelevant to todays current market, thus the sell off and the re-organization around services and content. (reference “Crown Castle Announces $4.85 Billion AT&T Tower Transaction”) The real question is will they survive? Can they relinquish all those assets in time? Is the subscriber based business model so entrenched that there is no way out? The carriers aren’t alone.

The cable industry is also in the same boat, but even worse. In a recent article dated September 09, 2014,Broadband policy history reflects unusual bipartisanship”(By Stuart N. Brotman of the Hill) it is evident that the cable industry is facing similar yet even more archaic rules of a business model that is also based on connectivity and subscriptions. One thing that the cable industry has over the carriers is that they have been in the content delivery business since the 70’s. Content and services has always been the real moneymaker for the cable industry and the physical network of assets was just a means to an end – why else would you direct bury a coax or fiber cable? But, maintenance on any type of hard asset in the field is a cost burden on the bottom line. The answer to the cable industry, or I should say content industry, is to carpe diem the streaming content delivery platforms, such as NetFlix or even the Aereo model. Me personally I don’t even pay for traditional cable television type services anymore, which saves me about $150 - $200 a month. I am much more willing to pay a small monthly charge of $8 bucks for unlimited programs, and being that I don’t watch that much TV anyway, it still pleases the kiddos. The point is even the cable industry (what we term the MSOs) are held back by owning their own “old” infrastructure which detracts from their overall revenue base.

Even the fiber optic industry with players like AboveNet, Level 3, or WindStream are even seeing the abandonment of old infrastructure and the move towards services as the viable alternative. In a recent article entitled “Windstream to Spin Off Some Assets Into Publicly Traded REIT” (by Lance Turner on Tuesday, Jul. 29), one can testify that the move by WindStream is a direct play to relinquish their assets and to move more towards the commissioning of content and services. I applaud WindStream for making this move. It is a very smart move to make especially given the expansion of programs like the Public Safety Broadband Network, or FirstNet.

“Incredible change happens in your life when you decide to take control of what you do have power over instead of craving control over what you don't.” (Steve Maraboli, Life, the Truth, and Being Free)

The fact is that with all the talk about the FCC, broadband as a utility, and the reclassification of the cable industry, we are in the midst of the commoditization of the access model and the revitalization of the content delivery solutions that were the driving force of the telecom bust back in 2000. No I’m not saying we are in another bubble, in fact just the opposite, what was lacking in the past was the infrastructure of applications that we have today. With the advent of the “App Store” we now have more data driven applications than ever before. Had such an infrastructure been in place before the build-up of the 2000 telecom bubble we may have seen a whole different outcome, essentially it’s business 101 – demand drives services. 

As is the issue today, we are still held back by the archaic architectures of long ago. Just a little side note: the exact hype of a network build-out is happening, or has happened, in the SMART Grid industry. As I have written about many times in the past, the fact is the Public Safety Broadband Network is the catalyst to building a true “utility” version of telecommunications infrastructure to deliver the content and services market that the carriers, the cable MSOs and the fiber players are all striving for. There is only one way to delivery such an infrastructure of assets and that is by using the traditional concept of the off-vertical industries such as, the transportation and large scale construction industry use of the Public Private Partnership methodology – this is the basis for The Myers Model®.



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