Forget Disruptive Technology - How about Disruptive Regulation?

In the last few days we have been treated to exactly how powerful a change in the regulations that govern the telecommunications industry can be.

Take, for example, the new dynamic that faces any of the ILECs legitimate competitors if they depend on the "ILEC's network" to deliver services. As of yesterday, Verizon has been granted Forbearance, a term that basically means that Verizon now has almost complete control over "their" network and can make it difficult for anyone to either buy transport on their network (should they choose to do so) and now the big prize is whether they even have to provide service to any competitor.

This morning I read that AT&T is filing "Me Too" paperwork to ensure they now have the same basic rights as their competition in this respect.

Check out this quote from this article,

One analyst said that AT&T and other incumbent telephone carriers could be at a disadvantage when competing against Verizon for business customers if the FCC delayed acting on requests for similar regulatory relief.

"It's certainly possible they will gain similar deregulation, at least eventually; but if there is a delay, Verizon could gain a temporary regulatory advantage, which could be particularly important in the traditional enterprise competition between AT&T and Verizon in the latter's region," said Blair Levin, an analyst with Stifel, Nicolaus & Co.

It goes without saying that we can't have one side of Ma Bell having an advantage over the other side - even if that advantage is okay over the rest of their competition.

There is also the ongoing debate as to whether or not any of the ILECs need to ensure QoS of anyone's traffic when it crosses their network (Net Neutrality) which translates into the stark reality that should this be allowed any competitor's traffic might be slowed down to the point of unusable all the while providing the larger carriers the ability to charge a "tariff" to carry traffic from high demand sites (like Google) even if these sites already pay to connect to the net.

So, here's an interesting question...

Why aren't we (we, as in municipalities) looking at using legislation to level the playing field? One piece of legislation that comes to mind is the relatively recent ruling by the Supreme Court clarifying the use of Eminent Domain.

The following quotes as confirmed in the article (linked above) presents both sides of the issue.

"Promoting economic development is a traditional and long-accepted function of government," - Justice John Paul Stevens wrote for the majority

"The court today significantly expands the meaning of public use," O'Connor wrote. "It holds that the sovereign may take private property currently put to ordinary private use, and give it over for new, ordinary private use." - Justice Sandra Day O'Connor

I guess the question is, can we consider a strand of fiber to be property and if so, can it be "taken" under Eminent Domain for use by either a municipality or a private party as long as it can be shown that the overall benefit is for the common good? I would further argue that Economic Development has long been considered "common good" and that there is adequate proof that affordable broadband does stimulate Economic Development.

It seems to me the next step would be for us to set in motion the mechanism to "take" the necessary fiber strands that would allow broadband to be brought into many of the unserved or underserved areas and begining deploying broadband for the public good.

Without question, it can be shown that waiting for the big companies to deliver ubiquitous and inexpensive broadband has been nothing but an exercise in frustration and has cost many communities a lot of public good.

Have at it.

The Digital Divide is dead! - Long live the Digital Divide!

I ran across this organization yesterday who published this report warning pfd file which states that,

"This evidence is encouraging, since it demonstrates that the benefits of these new services are not leaving behind most large segments of the population. To the extent that historical reports have identified a digital divide, this study provides evidence that that much of the divide has narrowed in most cases to statistical insignificance.

Well, I for one am glad that problem was taken care of.

I did find this quote (taken from the same report) that has me wondering.

The exception, however, is that rural consumers appear to use more dial-up services and less broadband services, either because reasonably priced broadband services are still not available in some rural communities, or that rural consumers have less demand for broadband services.

If "rural consumers appear to use more dial-up services and less broadband services" how can we say that rural consumers have overcome the "Digital Divide" unless what we are looking at here is an issue with semantics. Maybe, I need to understand that the term "Digital Divide" was originally coined to differentiate between those who had Internet access and those who didn't. Naturally, dialup is still Internet access - even if it is next to unusable in today's world. In the past I have used the term "Digital Divide 2.0" to describe this new phenomenon and I think that term is apt.

For example...

In this article we can see that CBS made the decision to broadcast the NCAA March Madness college basketball tournament over the Internet free of charge, something that everyone who has dialup didn't have any chance of taking advantage of. In striving to break the irony meter, Verizon just announced they had signed a deal with CBS to carry CBS's content over their Fios service.

We also learn from this study that VoIP is catching on - with a higher percentage of low income households adopting the technology.

VoIP use is growing, and has been used in over 10% of households. VoIP services are more apt to be used in low-income households (22% of households earning less than $25,000), non-Caucasian and non-African American households (18% of Hispanic, Asian and other races), and younger households (18% aged 29 or under)

But, in rural areas with their higher percentage of dialup users, this technology is not available to them. (DUH) I am sure that a case can be made that many rural areas confidentially have a high level of lower income residents, which would lead me to suspect that the adoption rate for VoIP would be hinger in these areas - if broadband were available at a reasonable price.

Here's the problem as I see it. Maybe the Digital Divide has been taken care of but the Communication Infrastructure Divide is alive and thriving. What I don't understand is why this is the case. Didn't both presidential candidates promise we would all have broadband coverage by the end of 2007? What is happening to the billions of dollars in USF funds that we all pay into every year? Why is Verizon rolling out Fios in the neighborhoods that can afford to make them a profit while ignoring these rural areas? Even more to the point, if the ILECs don't want to service these areas, why are they putting up such a fight to prevent these communities from establishing their own broadband networks?

What I don't have is a real answer for any of these problems. I don't believe there is any one answer. I do believe there are any number of things we are doing that is hurting the deployment of broadband into many areas.

Let's look at two.

We have the PA-183 law (commonly known as the Verizon law)

In another well written article by Muni Wireless we can see how feverishly Verizon is working to make the deployment of broadband easier in Pennsylvania.

To bring things into perspective, this article was linked to and I thought I would share the following snippet from it.

As for other towns, they will have to first get the local phone company to sign off before they can offer the same service to their residents.

For now, Verizon is leaving open the question of whether it will say yes to such requests. The company is already offering broadband Internet service over its FiOS-brand high-speed fiber optic network in many areas and is busy expanding the network.

The law — Act 183 — requires phone companies to offer broadband throughout the state by 2015. But it also requires municipalities that want to offer broadband Internet service to first ask their local telephone company if that company plans to offer broadband in the area.

The phone company has 40 days to answer yes, in which case it then has 12 months to start offering broadband. If the answer is no, the municipality is free to start offering its own service.

For its part, Verizon declined to give municipalities a blanket green light to offer wireless Internet service.

“Any proposals Verizon would receive from a municipality would be reviewed on a case-by-case basis in accordance with Act 183,” said Verizon Pennsylvania spokeswoman Sharon Shaffer.

Verizon is widely seen as the driving force behind Act 183, which in earlier forms prohibited local governments from offering any form of telecommunications service.

“It was clearly an anti-municipality statute,” Upper Dublin's Leonard said.

But Verizon vehemently denies that. The company's official line is that Act 183 was a law requiring it to roll broadband service out faster, rather than a ban on municipal or “community” networks.

Okay, it is nice to see Verizon did give something back in their promise to provide broadband to the entire state of Pennsylvania by 2015! Considering the misunderstanding that Pennsylvania had with Bell Atlantic (Verizon - before they were Verizon) I would feel comfortable entering into another agreement with them.

And here is the decision many of us knew was coming on the subject of forbearance that Verizon petitioned the FCC for.

As quoted from the article,

"The No. 2 U.S. telecommunications carrier petitioned the FCC seeking relief from requirements that included making connections to competing networks and negotiating just and reasonable terms for its services."

I mean, after all, why would anyone want to have laws that had such Draconian language as to mandate, "negotiating just and reasonable terms for its services." That's just simply unfair.

Next Up - The Cell Phone Industry.

Looking back over the last five years we can easily remember a time when VoIP and Fixed Wireless technologies seemed more like a hobby that might have some potential somewhere down the line. If we look back to the last millennium (just over six years ago) I remember the enthusiasm that was being generated by the WISP community as to how this technology might be able to capture a piece of the Internet delivery market from the traditional telecommunications giants. At the same time, I do not remember anyone seriously discussing how this technology might disrupt the voice market and specifically the Cell Phone industry - even though looking back on the subject from this vantage point I am not sure how we missed this very real potential.

If we move forward in our timeline, looking to three years ago, VoIP was now something that was being discussed but the level of discussion was more toward PC to PC calls including Skype and even though PC to Phone was a reality the only people who really seemed interested in that technology were the "early adopters" sometimes known as the "Geeks" of the world.

What we missed was that there was a quiet revolution happening, one that even the people in this field weren't paying too much attention to, a looming disruption that was becoming viable because of the combination to two very different technologies being independently introduced - the real, ubiquitous, mobile telecommunications now available over Licensed Exempt wireless infrastructure.

During the 2004 WiFi Planet show, (what a serious loss to this community losing that show was) I attended a discussion about VoIP being implemented as a communication medium in hospitals. As you probably know, hospitals have adopted wireless technologies in many applications from medication dispensing, tracking patient care and even voice communications. At the show the discussion turned to the Symbol Technologies's Netvision Phone.

This WiFi based portable phone was an interesting wrinkle in the Fixed Wireless field but seemed to only be seen as a curiosity as opposed to the earth-shaking, disruptive technology this kind of handheld would evolve into.



Even more unique was the Vocera Communications System, a Star Trek like communications badge that allowed for voice activated, hand's free, wireless communication over WiFi networks!



Looking at today's landscape we can see a number of WiFi/Cell phones now coming on the market. This move by the mainstream Cell Phone manufacturers seems to indicate that they understand and accept that WiFi is not only here to stay but needs to be adopted. But this leads to the question why?

Well, Cingular Wireless is launching a new video service that would allow paid subscribers to view the Cartoon Network (Fox News, NBC are also mentioned) and if you really like this service for an additional fee you can have access to short clips ("The Sopranos" is specifically mentioned) which bring an entirely new level to the phrase "a vast wasteland" something more true now that when FCC Chairman Newton N. Minow coined the phrase in 1961. Why anyone would want to watch the Cartoon Network on their Cell Phone is beyond me - let alone paying extra money to do so. I can reliably tell you the demand has outstripped most of the projections the Cell Phone industry made 18 months ago and this is causing some serious problems for them.

If you look at what impact delivering video over a network designed for very low bandwidth voice calls might create it is pretty easy to understand why this might be a problem. Any WISP can easily relate to what happens when their customers start demanding more bandwidth than their network can reliably deliver. This is exactly what the Cell Phone industry is looking at facing should the demand for video continue to take off on the current path it seems to be headed on. And like the standard WISP, there is only so much spectrum they can expand into - and they pay for spectrum unlike most WISP models currently in use.

Where does this leave the Cell Phone industry? Well, to answer the call for more bandwidth (as well as demand for Cell Phone service) the industry will be building a lot more infrastructure this year. As you can see from this link the telecommunications industry is once again spending money for equipment to increase both their capacity as well as their services. Verizon and Qualcomm are moving forward with their MediaFlo technology in hopes of meeting the demand by the end of 2007.

At the same time there is a different set of dynamics taking place in this industry. One has to wonder what the real impact on this industry will be due to the portable Vo-WiFi technology once citywide WiFi clouds become a reality. It seems reasonable to speculate that the cell phone providers aren't going to benefit from these large scale deployments. In fact, we can speculate that a decline in their overall revenues, loss of metropolitan customer base and a challenge to their monopoly in the mobility communications market will be occurring.

It should also be pointed out that the Cell Phone industry depends on the higher population density areas to generate enough revenue to subsidize their rural installations. If every large city deploys a WiFi cloud and these Vo-WiFi phones catch on the expected impact on the Cell Phone industry will be substantial. How much? Well, nobody really knows or can accurately project but I believe it is safe to say that this industry is not wealthy enough to take a 25% hit in their gross revenues without feeling significant pain. How much pain can they tolerate? I guess we'll find out.

Here's the newest wrinkle, courtesy of DLink, to enter this field.



Please note - this is a very different design from the inexpensive WiFi phones that can be bought in Asia or either the Vonage Phone or the Netgear Skype Phone. The DLink phone allows for the use of anyone's service instead of being tied to one name brand service or the other. The DLink phone also allows for the support of domain names - think about what that means as far as merged services

While that seems enticing you might want to know how you get service on this thing. TelTel offers service that can be used on the DLink phone and the TelTel web site offers a lot more information.

During the MuniWireless show, I spoke to a gentleman (I'm sorry, I can't reveal either his name or his company as they are not public yet) that offers WiFi phones with RFID chips built inside. Not only will his phones allow you to utilize WiFi networks to make voice calls (using his VoIP service or not) but will also allow you to pay for goods and services with the handheld device. Even better, he is in the process of finalizing the details to allow for advertising supported VoIP service for those of you willing to put up with advertising. How this service will work is that as you walk through a mall advertisers that are part of his network will feed ads to your phone. Naturally, these stores will offer incentives for you to walk in whether it is special pricing or simply the fact that they accept payment from your phone. And, for putting up with the annoyance you get VoIP service for free!

For those of you that are unaware, it is an accepted practice to pay for goods and services in Japan using your cell phone. In fact, on a recent trip I noticed a tourist who was somewhat dismayed that American airports didn't accept payment in this fashion. Judging by his demeanor he seemed to be somewhat surprised at how backwards we are here. This is something I am beginning to understand as our definition of broadband is barely more usable than dialup and many of the advanced services some parts of the world take for granted are simply not available here - yet.

I guess the real question is, why is all of this important? According to this article the US telecommunications industry (alone) was worth "an estimated $856.9 billion industry in 2005, is projected to reach $1.2 trillion in 2009" and no matter how you look at that, we are talking a lot of money here.

It's the Route 66 story but a brand new challenge.

For those of us old enough to remember, the only way to cross the country from shore to shore used to be the new legendary Route 66.

But something happened to Route 66, something that was cataclysmic, something that remove it from its position as being "the" route. Much like cities and towns that were obsoleted when the stagecoach route gave way to the railroads and the cities and towns that grew up around the railroads had to give way to the decimation caused by rise of the automobile Route 66 lost its attraction when the Interstate highway system was finished. Towns that had been vibrant almost overnight became boarded up, closed down as the traffic that used to supply their local economy with a steady flow of people traveling in both directions who needed meals or gasoline along the way.

Today we face a new highway that is going to continue this evolution and this time it won't be as clearly defined by an arbitrary geographical line drawn by politicians that decided who would benefit as well as who would lose. No, this time it will be up to each of us to choose what kind of infrastructure will run in and out of our locations. At the same time this shift will not bring many of the challenges we have traditionally seen in the past. There won't be a problem with noise as the trains or perhaps the tractor trailer trucks generate, decreasing the quality of life for some but not for others usually clearly defined by economic lines in a community. Nor will there be a very visible change to our homes as happened as huge concrete beltways were erected in neighborhoods where families had once lived. No, this time we will be building virtual highways of differing qualities and putting them to all kinds of uses.

What needs to be closely looked at is how we set this type of infrastructure in place, whether it will be built with an eye towards the future and how the most people can benefit for the lowest overall cost. One challenge I see is how our poorer communities will be able to match (or even beat) the locations that have the economic clout to deploy the state-of-the-art networks that will enable this country to succeed in this new millennium.

The challenge is just as much about the business model, the applications as well as the technology that will be employed even more than what the dollars necessary to build mean to the quality of the results we will enjoy. This is an opportunity for innovation to trump economics as we look at many of the options that are now available as well as the ones that will present themselves. This is the key point to remember, how we envision and then execute our plans will be what determine which location will be the showplace of the future.

One point I am constantly reminded of is that fact that this new challenge is one that will provide some of the areas in this country a distinct advantage over others. We will be building virtual locations, places where geography will not be as important as it once was. Think of it like now a city in the middle of the Rocky Mountains will now have the capacity to be a new "seaport" or a transportation hub but for information this time around. There are areas in this country that have incredible lifestyles to offer but because of their location or proximity to what used to be important advantages may now become the choicest places to live as they can now offer this incredible quality of life at costs that make them the better choice of a place to live because one can live there without drowning in debt. As this new dynamic becomes known I see a shift in what will become the "best" places to live and an equal shift in the value of real estate in many locations as geographic location no longer dictates what kind of job one can have.

The same holds true to where many companies will base their locations. As the ability to live in close proximity to the office becomes less important, many companies will choose to relocate to areas where the cost to keep their physical address will be more dependent on the cost of real estate as well as the local tax rate - as long as there is good, reliable and inexpensive connectivity.

This will be the challenge of our generation - connectivity.

The great unknown as we look from today's perspective is what is the correct business model and technology for each case we try to apply these facts to will be the best. In fact, the question of is there really a "best" needs to be looked at. The "best" is not what is the only right way to do something as so many things seem to be today, it is more of a case that the "best" means what is best for the local community.

Is it better to build a network that needs to be paid for over a 20 year period or should this be a effort that will start off with a very modest investment and be continually rework as newer technologies become available? Is there a need to connectivity everywhere or will a line to each home suffice? What kinds of speeds and capacities should we be looking at putting in place? There is no "right" answer and that's really the rub. There is only the answer that is right for your community.

Last week I had the distinct pleasure of attending the MuniWireless Show in Atlanta where many of these issues were taken on from all perspectives. Whether you are in charge of a large project like Los Angeles or Philadelphia you have many of the same issue as your counterpart in any small city in the world. I'm sure you know that the infrastructure will be put in place in your community or you will eventually live in this millennium's equivalent of Route 66 - and let's face it, nobody wants to be the mayor of a city that's only claim to fame is using more plywood to board up their windows than anywhere else.

Thankfully there is another show that will help people get the necessary information they need so they can make this decisions intelligently. In case you were unaware, there is what promises to be another great show for those of you that would find a Midwest location convenient. The First National Summit for Community Wireless Networks will be from March 31-April 2, 2006 in St. Charles, MO. This is undoubtedly going to be a very good resource for anyone who is either trying to understand this very complicated field or just needs to network with people in this field. The cost of this event is very reasonable and in the interest of full disclosure I have been invited to speak at this event - however, it should be noted I will be speaking about the company I work for, CONXX, not as a representative for this show.

Muni Wireless - Atlanta - What a show!

I have to admit that from my experience I have found that whenever I set my expectations too high I usually disappoint myself. From the moment I made arrangements to attend the recent Muni Wireless Event in Atlanta the excitement continued to build to a point where I was sure the show could never live up to all I was expecting.

And was I ever wrong.

One can never guess what combination of circumstances will cause any event to go from good to outstanding. While the list of speakers was as good as it can get and the sessions were also among the best I have ever attended the reality is it was the attendees that Esme (and crew) attracted that sent this show over the top. I can't remember any time that I have met such a diverse group from all over the world that shared so much information for the benefit of us all. In particular the session hosted by Sascha Meinrath and Dewayne Hendricks about the issues facing the Joburg project with the cost of bandwidth being so high that it is literally cheaper to fly to Singapore with a 1GB thumb drive, download a gig of data and fly back to South Africa than to download it locally made a lasting impression on everyone who attended.

One a more personal note, if I were to ever be appointed ruler of the known universe I would make that kind of monopoly abuse a serious crime.

But there was far more going on behind the scenes. I got to hang out with the Motorola engineers by showing up an hour early for the show. (By the way, that is a really good technique for anyone interested in having some candid discussions with people working the show.) As they were setting up the Mesh equipment I got to watch how it all fits together and got a serious demonstration of their 4.9GHz camera - and what a camera.

From inside a room, behind some lightly tinted glass we remotely controlled the camera directing it to zoom in on a magazine that someone was reading down a level in the lobby and perhaps 200 feet away. The clarity was so good I would read the print on the magazine without my glasses - something I can't do when it's right in from of me. Even better, the camera does this is 30FPS!

While this demonstration was going on I was introduced to Mitchell Weinzetl, Chief of Police for Buffalo, MN. Mitch has a Motorola Mesh installed that he has leveraged along with a custom designed application to make his department significantly more efficient. I was fascinated to hear what real and measurable changes this infrastructure has brought to his department and his community. As an easily understood improvement we can all relate to Mitch tells me that when his department was using the paper method for issuing tickets the average time to write out the ticket used to run about eight minutes. Mitch assures me that time is accurate as over the years he has personally written out thousands of tickets and he has timed them on many occasions. Now, with the help of his network an officer can call up the application on their mobile computer, enters the information (most fields are now drop down boxes) save and prints out the citation - total time, four minutes!

But that is not where the savings ends. In the olden days (you know, like last year) the handwritten ticket would then be handed over to a data entry clerk who would type in the data into the police department's computer. Then the citation would be sent over to the court so someone else could have the pleasure of typing in the same information all over again. Even then this piece of paper had to then travel over to the prosecuting attorney's office for yet another round of data entry and at each step there was yet another opportunity for something to be incorrectly entered.

I won't even go into all the other functions Mitch has automated but I will say this is the kind of innovation we all need to get behind. If you are interested, here's a short article that provides a little more data on how using a wireless network is saving time for our police as well as making things a lot safer in an already too dangerous field.

Mitch, awesome job, I commend you.

Tough to outdo that but it seems the city of Corpus Christi, Texas did something amazing by automating their meter readings. Jeffrey King (Northrop Grumman) gave a talk describing how this came to be. It seems there was a near deadly attack by three pit bulls on a meter reader a few years back and the city made a determination that they needed to find a way of getting their employees out of harm's way.

Enter Northrop Grumman and their AMR (Automated Meter Reading) technology. What had been done up to this point was for RF transmitters to be installed on to the meters which would allow for the meter to be read from the front of the house instead of having to walk around back. While this certainly reduced both time and risk it still meant that a truck and a person would have to be sent out to every neighborhood once a month to collect the data. When you look at this from the broader perspective it is not only expensive but it also is inefficient. If you are on a monthly schedule issues like a leak might not be discovered for as long as six weeks in some cases. The problem is that if Corpus Christi decided to put in a fixed collection network for these meter reading radios while they would be able to collect the data at will they would only receive that benefit from the deployment.

After some research an idea was formulated to deploy a WiFi based network that would allow for not only the collection of data at will but also provide connectivity to the entire community. Even better, a case was built showing that the investment in the WiFi network could be 100% justified by the money saved from automating the meter readings. I would suggest we really need to hand it to Corpus Christi and Northrup Grumman for using a combination of innovative thinking and technical knowhow to make this outcome. And to give you an idea of what a meter reader goes through doing their job just imagine how much fun it is to dodge a rattlesnake when you're trying to get the number off of a water meter in someone's backyard that is buried in a pit. I wonder what the turnover rate for a job like that is.

Way to go Corpus Christi.

Incredibly, I haven't even covered the very first session fully - let alone all the other fantastic sessions that were offered. I know it's hard to believe but the two situations I related to you above all happened within the first hour or two of the very first day and it got better as the show went on.

What really needs to be brought out for your examination is the near unbelievable networking that happened with all the attendees. I picked up over four dozen business cards from people literally all over the world. I had coffee with Mark Wolf (Assistant General Manager and Chief Technology Officer for the City of Los Angeles) as well as lunch with people from the Philadelphia Project. After the sessions were over there were still networking receptions to attend.

Excellent speakers, solid information, intelligent people and good food, what's not to love?