Random Notes

Net Neutrality; Business Customers and Today’s Smartphones; Tablets; LTE; Some Final Comments and Updates

Net Neutrality

Is Net Neutrality dead? The FCC seems to be backing off, Verizon and Google are not talking, Congress is still interested, and some think the entire issue will result in the resignation of the FCC Chairman. At least one “Google-ite” in the Executive Branch seems to have been caught exchanging emails with the folks at Google using his private Gmail account, so perhaps the push from the Executive Branch will not be quite so forceful going forward.

What is Net Neutrality anyway? In essence, it is an idea that all customers have equal access to the Internet and that there are no special toll roads or high-occupancy vehicle (HOV) lanes available to those willing to pay more. Do we need it? What would it really do to our existing access systems, and more importantly, what would it do to wireless broadband if the concept were extended to wireless? No one seems to have any specific answers to these questions, and it is not clear if today’s tiered data access pricing would be in violation of Net Neutrality. In the world of DSL, you can select your data plan and pay more for faster access. In the world of cable modems, where bandwidth is shared across a neighborhood, you can still pay extra for faster download rates, but the upload data speeds are usually fixed, at one or two lower speeds.

So far, different data speeds are not available on all networks, but more are charging by the amount of data used. We do not yet know what will happen with the LTE networks where Quality of Service (QoS), will make it possible for network operators to charge both by the amount of data consumed and levels of access speeds if they so choose. Recently the Wall Street Journal carried an article reporting that both Google and Verizon (wired not wireless) have recommended to the FCC that it push for laws for Internet access that would outlaw blocking or slowing specific content and would permit “private” service agreements on designated networks. This sounds like something I wrote about some time ago when I mentioned that I thought Google, which owns more dark (not yet used) fiber in the United States, wants to build its own Internet superhighway or toll road for the best possible access to the Internet.

Regardless of what type of access each of us has, at some point along the way there is a potential bottleneck for bandwidth and data speeds. I believe the sensible thing would be to enable network operators to manage their own networks. Typically, they will opt for management controls that will provide the best possible access levels to the majority of their customers. But they do need to be able to manage data hogs, peer-to-peer video, and probably streaming video data rates. It doesn’t make sense to me for networks that provide services to a broad base of customers not to be able to throttle back the hogs, but it doe make sense for me to have faster access if I am willing to pay more.

One of the most pressing issues I see is that even with network management on the access routes to the Internet, there is no direct Internet traffic management beyond what is built in. I see very little investment in new infrastructure for the Internet and I believe that video and other services will have a huge negative impact on Internet performance at some point. It is a juggling act to be sure, and I, for one, don’t have a simple solution—this discussion will continue for a long time to come.

Business Customers and Today’s Smartphones

The consumer is now king of wireless broadband. Not too many years ago, new devices and technology were first designed for business customers and then found their way into the consumer marketplace. RIM’s BlackBerrys still follow this business model, but as we rolled out 3G broadband systems, the uptake in the corporate world was dismal and took too long. The network operators that had invested $billions in their new broadband networks grew tired of waiting and shifted their focus to the consumer world where data uptake has been huge.

Companies did follow soon and dongles and broadband wireless built into notebooks drove most of that business. Then smartphones other than BlackBerrys began to make their way into the corporate world as well. The first version of the iPhone was NOT a business phone, but in its subsequent releases it has grown more business friendly, except for the fact that in order to install software onto the device, it has to be available via the Apple Apps store. This works for Salesforce.com, WorldMate Live, and many other business applications that make use of the cloud, but it does not permit company-specific applications to be used to any great degree. Most companies are working around that by using browser or applet forms of communications with their servers, but the BlackBerry is still king of the corporate world.

If I rank the Blackberry a 9 (on a scale from 1 to 10, lowest to highest) for being business friendly, I would rank the iPhone as a 7 (up from a 4) and would give the lowest ranking, a 4, to smartphones built on the Android platform. Android phones are lacking in many respects when it comes to being business friendly, yet since the Android platform is supposedly more open than the Apple platform, it would seem to me that Android devices would be more acceptable to the corporate world.

Tablets

From what I can see, the same situation will occur in the fast-moving world of tablets, led again by Apple with its iPad. The promise of other tablets also seems to be aimed at consumers, but there is pent-up demand from executives who want to travel and leave their laptops at home. I wrote an article for FierceMobileContent about this subject, and the response was mostly in agreement with my views that today’s tablets are not really aimed at the business marketplace.

On August 10, Dell announced it would be launching its own tablet. Called the Dell Streak, it has a 5-inch screen and runs the Android operating system (version 1.6 to start). It includes 3G connectivity using the AT&T network, Wi-Fi, and Bluetooth. The device sells for $299.99 with a 2-year AT&T contract, and $549.99 with no contract.

As I was writing this, Ralph de la Vega, President of AT&T Mobility, was delivering a speech in Boston and stated that he expects to see a big growth in the number of business applications that become available for tablets and believes there is pent-up demand for such applications. I agree, and in the meantime, my in-flight research (asking people carrying iPads) shows that those of us carrying iPads when we travel are still carrying our notebooks when we are away for extended periods of time. We do use the iPad for viewing email, especially messages with attachments. It was great to hear Mr. de la Vega address the issue of business applications for these devices and I, for one, hope he is correct.

LTE

Verizon appears to be on track with its Fourth Quarter launch of LTE in 25 to 30 markets covering about 100 million people (out of a U.S. total of slightly more than 300 million). It is now stating publically that LTE data speeds will be 5-12 Mbps down to devices and 2 Mbps from the devices to the network. It is great when a company the size of Verizon is realistic about data speeds. There are too many press releases from others claiming the “completion of a 50 Mbps or 100 Mbps call over LTE.” I find it refreshing that Verizon is coming out ahead of its LTE launch to set appropriate expectations. The range of data rates is due to there being a number of variables that play into the exact rate that will be available to a customer.

The distance the customer is from the center of a cell sector plays a big part in the speed, the amount of spectrum Verizon has available also limits the total speed, and of course, since wireless broadband is shared on a cell sector by cell sector basis (usually 120 degrees from a cell site), speeds will also depend on how many users are located within the same cell sector and the type of data they are using. If everyone in the sector is browsing the web or taking care of email, the available data rates will be faster than if some of those in the cell sector are downloading, uploading, or streaming video.

Too many times during the almost 30 years of commercial wireless, the hype preceding the launch of a product or service has set false expectations leaving customers disappointed. If you go back in wireless history, there are literally hundreds of examples of this. These include Cellular Digital Packet Data (CDPD) systems in the mid-1990s, the first 3G UMTS systems, the Apple Newton, the WiMAX community promising incredible data rates with incredible coverage per cell site, the Google Nexus One phone, and many others. I have found that when people are given conservative estimates of performance and features they are usually happy with the results once the product or service hits the market. However, when expectations are set too high in advance of a new device or service, disappointment is rampant and the company loses credibility and sometimes fails to recover.

Having become steeped in LTE as a technology because of my work with public safety broadband systems, I fully appreciate Verizon’s statements concerning expected data rates and applaud them. It is also important to understand that LTE is designed to be deployed in 1.4, 3, 5, 10, 15  and 20-MHz chunks of spectrum. Verizon’s nationwide LTE system is being built in 11 MHz (11X11) of spectrum so it will be a 10-MHz LTE system. In some areas, Verizon owns additional A and B Block spectrum so it will probably add another 5X5 LTE system to the first one over time in heavy-demand areas.

AT&T, on the other hand, has a lot of A and B Block spectrum that is 6X6 and will support a 5X5 LTE system. AT&T also purchased 700-MHz spectrum prior to the auction in a number of markets, and during the auction it bought numerous A and B Blocks that can be aggregated together. Therefore, I expect to see nearly the same results from AT&T when it launches its own LTE network. Both companies will be upgrading their systems over time as the next LTE standards are released, so this first foray into the world of LTE will be the minimum speeds achievable and future releases will add more speed and capacity to these networks.

While I am discussing LTE, it is important to understand that since LTE was designed from the ground up as a broadband data technology, there are many variables that can be used by network operators to set the parameters for the system. There are three different data rates down to devices, and these are usually set as follows: near the cell center, faster speed; mid-cell, medium speed; and far cell (edge of cell), the slowest speed. However, network operators may set downlink data speeds to optimize the performance across most of the cell by choosing the mid-rate for more of the cell sector. There are other variables that affect the performance of an LTE system as well, including the number of data blocks assigned for a user. This could depend on the type of data being used and a number of other parameters, some of which will be fixed to provide the best performance across as much of the network as possible. Some may be variable on an as-required basis; it simply depends on how the network is to be managed and the criteria for data that the network operator establishes as the norm.

LTE is a powerful wireless broadband technology and it remains to be seen how it will be optimized by the various network operators. I think we will see a number of tweaks to the LTE systems as they are deployed and network operators learn more about the best ways to optimize the systems so they can serve the most customers with the best data rates available.

Some Final Comments and Updates

For those of you who are interested in what I am doing in the public safety sector with broadband and traditional networks, we have launched a new section on our website called the Public Safety Advocate. You can sign up for the postings and for the weekly news recap for free. If you are already a subscriber to our Commentary, send an email to info@andrewseybold.com asking to be added to the Public Safety Advocate list. If you are not, when you go to www.andrewseybold.com to sign up, you can check the boxes for any or all of our free electronic publications.

Also, we have moved our annual Wireless Dinner this year to CES in early January. The Consumer Electronics Show is becoming more wireless friendly all the time, and organizers have been gracious about working with us on this Dinner, our 21^st. We still have sponsorships available. If you are interested, please contact us at info@andrewseybold.com and we will be in touch with you.

Don’t forget that our Andrew Seybold Wireless University is coming up on October 5, the day prior to the CTIA event in San Francisco. This all-day educational session is totally revamped this year and we are adding a lot of new content. Even if you have attended before, you owe it to yourself to consider attending this fall’s session.

Finally, I am now writing for Forbes.com. My articles have more of an investor’s twist to them but I am submitting blog articles several times a month. You can find me under the “Intelligent Investing” section of the Forbes.com website.

Until the next Commentary,

Andrew M. Seybold