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It was only a generation ago that an AT&T Bell System monopoly—which had stifled telecommunication innovation for 40 years because it set the standards and brooked no competition—stymied development in telecommunications.
It held that monopoly until it was broken by MCI Communications in the 1970s. Then came the historic antitrust litigation that eventually led to AT&T being broken up into “Baby Bells” in 1982, it was only then that the telecommunications industry was able to start innovating again. The result led to mobile phones within five years and to the Internet within a decade.
The pace of innovation in the telecom business took off back then, and it hasn’t slowed. Today, three basic trends in wireless communications based on new developments in bandwidth, software, services and mobile devices are allowing users to gain hefty improvements in performance.
1. High-speed, gigabit broadband is on track to become as ubiquitous as the mobile devices that access it 24/7 all around the world. Sources tell eWEEK that five years from now, it will be commonplace.
2. 4G LTE connectivity, while sometimes downplayed by some wireless service providers who aren’t in the Long Term Evolution (LTE) game, is available and delivering its promised performance. This connectivity will make a substantial difference in service levels in the future.
3. High-speed wireless providers are branching out and investing in new spinoff businesses (namely cloud services) that are clear indicators that the industry is healthier than it has ever been. Growth in third-world countries is spurring this optimism.
What’s next? Let’s take a magnifying glass to each observation.
Observation No. 1: Broadband Eventually Will Be Everywhere
Everybody has an interest in this, ranging from the individual consumer to the highest levels of government. Federal Communications Commission Chairman Julius Genachowski, during his remarks Jan. 18 at the U.S. Conference of Mayors winter meeting, called for all 50 states having at least 1-gigabit broadband community by 2015.
Genachowski said that establishing gigabit communities nationwide would accelerate the creation of a critical mass of markets and innovation hubs with ultra-fast Internet speeds and challenged broadband providers and state and municipal community leaders to come together to meet what the FCC is calling the “Gigabit City Challenge.”
Speeds of 1G bps are approximately 100 times faster than the average fixed high-speed Internet connection. At gigabit speeds, connections can handle multiple streams of large-format, high-definition content like online video calls, movies and immersive educational experiences. Today, approximately 42 communities in 14 states are served by ultra-high-speed fiber Internet providers, according to the Fiber to the Home Council. More are in the planning stages.
Broadband, 4G Opening the Network Fast Lane to Consumers, Enterprises
Private providers are also contributing to this—some for profit, some not for profit. In the latter category sits Google, which provides free high-speed wireless connectivity for the entire 74,000-resident city of Mountain View, Calif., where its main campus resides on the shores of the San Francisco Bay.
That’s a great benefit for the local community, certainly, but Google is one of those rare enterprises that can afford to provide such a service. Not all cities and towns have such a magnanimous sponsor. Google is starting work on several other similar projects around the country via the Google Fiber Initiative.
The city and county of San Francisco provides a more realistic scenario, with numerous commercial choices (including Comcast, AT&T, Verizon and others) to go along with a handful of local neighborhood providers. There are also some free wireless services to be found in many parts of the city. Some are provided by local businesses (and not just Starbucks and McDonald’s), and some provided free of charge by generous individuals.
In the previously mentioned Gigabit City Challenge, the FCC’s Genachowski announced plans to create an online clearinghouse of best practices to collect and disseminate information about how to lower the costs and increase the speed of broadband deployment nationwide, including to create gigabit communities. Genachowski also proposed working jointly with the U.S. Conference of Mayors on the best-practices clearinghouse effort, so the federal effort will get down to the true community level.
In another example of how this all might benefit communities, the Google Fiber project in Kansas City is bringing gigabit service to a high number of residential consumers, while in Chattanooga, Tenn., a local utility deployed a fiber network to 170,000 homes. The resulting high-speed broadband infrastructure helped companies like Volkswagen and Amazon create more than 3,700 new jobs over the past three years.
Overall, however, telecom analysts generally agree that the United States is at least five years or more away from high-speed wireless broadband becoming so “everywhere” that it’s taken for granted.
Observation 2: 4G LTE Really Does Deliver the Goods
All the major carriers have rolled out their 4G LTE networks during the past three years, with most of them promising speeds up to 10 times faster than standard 3G networks. Generally, 4G is indeed faster than 3G. That’s the evolution of the IT business in general: bigger, faster, better.
But is it all that much faster that it makes a huge difference to the consumer or to the enterprise? That’s what being debated in the media and in more private circles.
For example, Ed Robinson, Riverbed Technology general manager of Web content optimization, summarized the thoughts of a number of industry people when he wrote in a 2012 blog: “If 4G were legitimately 10 times faster than 3G, I’d never have to buy another phone to keep up with technological advances again.” (His latter point, of course, will never be a truism. Device manufacturers built their businesses on the premise that a phone lasts two years, and by and large, they do.)
Broadband, 4G Opening the Network Fast Lane to Consumers, Enterprises
The problem with 4G isn’t 4G itself; it’s the inconsistency of the World Wide Web on which the 4G connectivity is riding.
Robinson said:
Let’s say a site loads in seven seconds on your iPhone over 3G. That means the site should load in less than a second over 4G every time, right? Wrong—in real-world use cases, the promise of 4G is almost never a reality. The network itself is absolutely capable of performing 10 times faster than 3G networks. That part is true. But Web performance isn’t that simple. There is a huge delta between pure science in a lab and the real world. The cellular network, or your ISP’s local network, is a fraction of the infrastructure and services that it takes to get sites to load in your browser. In fact, the network that your device connects to is the last mile in the Web performance continuum. It’s not the second-to-last mile. It’s dead last.
For now, go ahead and buy a 4G phone, tablet or other connected device, and it just might be ready and waiting when Web service providers improve their performances.
Observation 3: High-Speed Wireless Providers Are Branching Out
While established telecoms such as AT&T, Verizon, T-Mobile and Sprint are battling it out for subscribers, they are not only scrambling to buy up all the spectrum they can. They also are starting to use languishing assets—such as extra data center space—as launching pads for incremental new Web service and secure co-location income streams. And why not? These large telecom data centers are already set up for all of these services with everything—from controlled physical environments to heavy-duty security to high-end power supplies.
Such investments there are going through the roof. AT&T alone recently announced a $14 billion data center refresh project specifically for new services. In December, the mega-telecom also announced the expansion of its 4G LTE network to include 10 cities across the United States, including Providence, R.I.; Bowling Green, Ky.; and New Haven and Hartford, Conn.
That wasn’t all. After being rebuffed by the U.S. government in its attempt to acquire T-Mobile last year, the nation’s largest telecom added to its wireless spectrum by acquiring another cellular provider, Alltel, in January.
Broadband, 4G Opening the Network Fast Lane to Consumers, Enterprises
In fact, another of those big companies, Avaya—one of the Mama Bell spinoffs from the 1980s—is making some huge changes in its effort to break out of the pack of networking competitors.
Once known as a “nice little PBX company,” according to Avaya CEO Kevin Kennedy, the long-time New Jersey-based company has moved its headquarters to Silicon Valley. This is partly to show the industry that Avaya is morphing into an IT software and services provider to go with its still-strong PBX business.
“About 65 percent of our revenues are something other than hardware,” Kennedy told eWEEK. “We’re not the company that people remember. You’ll see us in contact centers, which is very important; secondly, video has become increasingly important to us. We’re creating a stack [of middleware] that is optimized for multichannel communications.
“It’s less horizontal movement and more building a stack that is more efficient for customers,” he said.
Major corporations rarely move their headquarters, but Avaya did so because “over time, we will become a middleware layer for the communication stacks for the world,” Kennedy said. “If you want to acquire great talent that moves you to an application software world, this is where you hire the leadership and the technical talent. It’s not much more complicated than that.”
It doesn’t hurt that Silicon Valley is still the richest location in the world in terms of software development, IT system architects and venture capital.
As it carries out its plans to grow into a more broad-scale networking and services provider, Avaya expects future competitors to include the likes of Cisco Systems, Juniper Networks and others in the global networking market.
That will be personally interesting for Kennedy, who was a Cisco executive for many years and has hired about a dozen former Cisco colleagues to help enact the changeover.
What will be the result of these various converging trends in enterprise working, as the latest advanced networking technology integration into hardware and software, as more functionality gets crammed into smaller and yet more powerful containers, the high-speed wireless industry is following the exact same technological track. In fact, as exemplified by Avaya and Cisco Systems, the lines between the two industries are blurring greatly.