Wednesday, July 20, 2016

FirstNet -- Every naysayer has a problem for every solution. 5G at 340X the capacity of existing 4G for PSBN.

Just recently Hans Vestberg, CEO for Ericsson, stated:

By the time a State starts building its portion of FirstNet, we will be delivering 5G capacity to all the rural and metro areas. Rural areas make up 66% of all the landmass in the United States; 16% to wilderness; and 18% to metropolitan areas. Tests performed today demonstrate that during an emergency Public Safety utilizes less than 3% of a given geographic areas capacity. During normal operations Public Safety utilizes less than 1%. At 340X more capacity on 5G Public Safety won’t even be a blip on its own network – even during a disaster. That means a whole lot of available capacity to help fund Public Safety in a very big way. In fact, such capacity will become the cornerstone to building a solid infrastructure that can support entire economic engines.

Imagine having a network with a hardened fiber transport expanding throughout all territories; 5G wireless (Micro, Macro, Small Cell) with inclusive DAS; and solid backhaul of fiber and microwave that is inclusive of FTTx solutions; and all of this infrastructure that can support a States entire economy; diverse and protected; and expandable for future technologies. A network that will cover all the geography of a given State. A network that the carriers would love to lease space on to increase their own profits while at the same time expanding their coverage. A network where wireline and wireless options to the home are as common as delivering power or water – but only better. Imagine a network that can isolate traffic between a large private fiber network down to the single packet of an email message, all protected, impenetrable, and based on an infinite amount of transport capacity. This is entirely doable. All you need is the right balance within the business model to accommodate the solution.

I’ve said for a long time that you should avoid nay-sayers because they always have a problem for every solution. The fact is that developing a business model to accommodate this solution is very doable – and it’s not new. In the past all of the networks developed within the United States were based on a subscriber model of users buying phones, paying monthly access, and selling services. It’s easy to assume that this model has worked in the past, thus should be used when moving forward. But, that is not true. Those models of supporting large carrier solutions are not the model FirstNet needs in moving forward with. FirstNet has to rely upon a much wider base of users; all having disparate needs of what how they use broadband access; all having the fundamental need for broadband to power their operations and ideals. The only way you can reasonably assemble such a balance is through a partnership between governmental needs fostering commercial incentives to attract private investment – in short you need a Public Private Partnership. But…. there is something else you need to develop for such a solution – control.

By focusing on a Top-Down, nationalistic, or government administered approach you will lose control of all the variables associated with your deployment – and quickly. Each and every State is different in how they do things and what their needs are. It sounds really good to build the Corporate Headquarters first, then administer each geographical unit underneath – sounds very sensible. The problem is that even the national carriers did not start this way. They started from a small Mom and Pop solution that expanded as the demand increased. By constructing a solution from the top-down we are saying that we know what the future holds, so why mess around with building it based on demand and just go to the end and bypass all the pain and sweat. That solution will not work. You have to build it based on demand and you have to start small – thus the bottom-up approach encased in a State solution. In short, we build all the pieces and then put together the national puzzle. We can’t just say we a have a puzzle and then expect that all the pieces will just fit together on their own.

By focusing on the bottom-up solution both of the solutions for Opt-In, or Opt-Out, will work. The real difference will be that with the Opt-in you give all the control to FirstNet to try and run the solution for your State – and you will have to help pay for that effort. The Opt-Out solution enables the State to maintain its own control and relies on private investment to come in a pay for it – not the taxpayers. The physical build is the same for both solutions, but the modeling and the rollout based on demand will be drastically different.

The Opt-in solution will rely upon a partnership between a national carrier and a program team. The complexity of the team, and its balance between investment needs, will force a metro first expansion first, then opportunistically focusing on rural expansions. Why? Because the partners in the Opt-In solution are focused on their existing carrier model and the need to generate revenue based on that pre-existing model – especially if they have to make a $5 Billion payment to FirstNet every year for 25 years. Sounds like a lot right? What the carrier doesn’t tell you is that they will make 5 times that figure monthly. The only difference now, is that instead of them having to pay for the spectrum, then setup operations to sell service, FirstNet is offering the spectrum for pennies on the dollar and the use of their already existing infrastructure, thus increasing the margins substantially… and yes they will allow Public Safety priority, especially when they know that Public Safety uses less than 1% of the network capacity anyway. I can guarantee you that the Opt-in solution will still face the same issue that the carriers face today -- expanding to the rural areas – if the demand is not there (and they will insure that the need is not there) – they will not build to those areas. Remember, they are beholden to the shareholder, not the taxpayer like FirstNet thinks.

The Opt-Out solution is focusing on the State’s ability to control its own destiny in a more controlled state. For the Opt-Out Public Private Partnership solution the State is one of those investors that the company is beholden too, thus the taxpayers. The newly created privatized broadband company can focus on selling all that capacity, at all layers of its network, while at the same time expanding its hardened infrastructure to insure the rural areas are the priority. Where a carrier is driven by the ARPU model (average rate per user) this new broadband entity will focus on a holistic approach to layering its customer base through fixed, monthly, and on demand service solutions to an expanded, and fixed, base of users covering all State and Federal agencies, private commercial entities, and the commercial taxpayer base. In this case, the network will allow those same carriers focusing on the Opt-In solution to expand its coverage area without spending any money on capex to build, while at the same time not being responsible for the spectrum allocated to Public Safety.

In the end, the Opt-Out is more manageable; more focused on local needs; yet still delivers what the national solution wants.

But what do I know I’m…

Just some guy and a blog….

No comments:


Words to Live By: “Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… The ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… They push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.” (Steve Jobs)