Tuesday, 17 August 2010

An Increasingly Expensive Lack of MBPS

As the Google-Verizon deal further indicates, the Internet is in trouble for lack of profitable bandwidth.

The Google-Verizon proposal highlights problems with mobile broadband. I've seen it, it's largely down to the market penetration of smartphones. I've spent this month working in film studios with 500 people, at least half of whom are carrying web-enabled smartphones. These are not necessarily tech-savvy people, nor are they all young people - bear in mind the data plans don't come cheap. The smartphone is becoming a lifestyle accessory... 
They are penetrating even traditional industries as a business tool and coming to dominate our leisure time. That's a lot more always-on email, Facebook, Googling, YouTube: yes, YouTube on the move, video over mobile. Ten minutes of video is about the same data quantity as 50,000 text messages. Then there's geo-location-aware apps. Hundreds of thousands of apps all demonstrating 'chatty' behaviour with connected threads checking back with servers for updates every few minutes or less.  It's happening. Don't even get me started on iPads and Kindles.

Developing markets are just going to make this worse. The Internet is interntational. How fast are the BRIC (Brazil, Russia, India, China) nations coming on-line? Not forgetting Africa. Thats another few hundred million users appearing, mostly with smartphones (lacking the landline infrastructure in those vast territories).

Mobile broadband is taking the hit. With five million Android phones a month flying out of the stores there are estimates that mobile traffic continues to double every four months.

At that rate, no provider is going to keep up with demand. Even if they could physically install that many antennas and fibre, the financial outlay makes it unlikely. Every $ of infrastructure investment is one less $ on the shareholder dividends and executive bonuses. And we're in the middle of a global recession. Mobile providers are cutting all kinds of deals for antenna sharing. The UK is already suffering ocassional 3G outages across most of the providers. A big %age of the population still can't get a 3G signal. Don't expect 4G services to appear until this gets fixed (we remember the '3' network launch. Ouch!).

Fixed line isn't an answer. Fixed line infrastructure is hideously expensive to install and maintain. Trunk fibre costs a lot for digging a big trench installing fibre and repeaters and covering and making-good. And what about the last mile - from the trunk to your door? This is the most expensive of all, a messy exercise in laying cable or stringing overhead wires to each individual property. Africa simply doesn't have any. And you can't plug in your iPad on the bus.

The UK government has backed off the previous shower's commitments to 100mbps landline infrastructure. Recession, remember. National Debt, spending cuts and austerity are the watch-words of the day.

The conclusion? The death of Net Neutrality; overt and covert traffic shaping to favour premium access services for those who can pay, or to suppress unprofitable traffic from the rest of us. Free-market competition rules. Google-Verizon is only the beginning of a web of deals (no pun intended).

This would be fine if the Internet remained a luxury item, but it isn't. The European Court of Human Rights is already passing judgements on the essential nature of the Internet as a life-tool for the private citizen, for public education, a lifeline for the disabled and disadvantaged. Commercially, what happens to the small-business, start-ups and entrepreneurs who don't have the money to compete with the big boys and will effectively be shut out of markets by traffic shaping?

If national governments don't have the funds (or the political inclination) to invest in public infrastructure, then the only alternative is to regulate the telecoms markets. We know how effective and how popular is government regulation. You can hear the party spin-doctors sounding the klaxons already.

And back to the Google-Verizon deal, citing all manner of flimsy public service arguments as to why this is a good idea. Bearing in mind these are two major lobbying organisations, as are the other telecoms carriers, where do you see this going?  RC

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