the present and future of fixed broadband
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Presentation to event organized by University of Haifa Law School, June 2014TRANSCRIPT
KNOWLEDGE FOR ACTION
THE PRESENT AND FUTURE
OF FIXED BROADBANDProf. Kevin Werbach
[email protected] / Twitter: @kwerb
Tel Aviv, June 2014
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Just released: http://t.co/bUCnJDqtkf
KNOWLEDGE FOR ACTION
SETTINGTHE CONTEXT
3
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
“The Internet”
(The “Peacock Map” of Internet
autonomous systems, circa
1999)
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Personal Computers Phone Networks Information Goods
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
≈1.5 billion PCs ≈1.3 billion landlines
1.65 billion CDs
The World, Circa 2012
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
The World, Circa Now
> 1.6 billion
smartphones+tablets
7 billion mobile lines
Streaming > 50% of
Net traffic
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Post-PC Devices
Converged Broadband Networks
The Cloud
The Next Internet
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
The PC is Dead
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
So is the PSTN!
• U.S. Residential switched access lines– 194 million in 2000 – 101 million 2012
• % of U.S. Households with POTS– 93% in 2003, 25% in 2013,
and…
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Not Just a U.S. Phenomenon
• >50% of OECD countries experienced a drop in PSTN access lines from 2009-11.
• In 8 OECD countries, already <20 PSTN access lines per 100 inhabitants.
– OECD Communications Outlook 2013
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
1943 20001980 2020
0.004
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0.1
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Expect
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evic
es
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Pers
on
Year
Coming Next: Internet of Things
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Cloud Platformsare the New Utilities
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KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Infrastructure of the 21st Century
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KNOWLEDGE FOR ACTION
IMPLICATIONS FORFIXED BROADBAND
15
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
3(Share of fixed connections still on dial-up in the OECD as of 2011)
%Broadband is Here
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Why Go Beyond Broadband?
• Convergence– Voice/video/data to IP– Fixed/mobile/nomadic
• Applications– Streaming media– Real-time communications– Telework/telepresence– Cloud computing and storage– Financial services– Internet of Things– Smart homes
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KNOWLEDGE FOR ACTION Prof. Kevin Werbach
OK, But Why FIXED Broadband?• Mobile still only 7% of traffic in 2017
(Cisco)
• Fixed is complementary to mobile– Most “wireless” traffic quickly goes to fixed– WiFi offload estimated at 70% of
smartphone data
• Most recent data suggestsper-device mobile data usagemay be peaking– At least, until the wearable/IoT
explosion!18
Has to plug in somewhere!
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
From Here to Fibre
• Only truly future-proof technology
• The Good– GDP benefits of ultrafast networks– Knock-on effects of “economics of
abundance”
• The Bad– Up-front capex costs very high– Heavily take-rate dependent – Municipal obstacles like ROW– Transit costs an issue in some areas– Business case uncertainties
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KNOWLEDGE FOR ACTION Prof. Kevin Werbach
…And The Confusing
• All modern fixed broadband access systems incorporate some fiber– Key is how far fiber is extended toward the end-user
• Claimed speeds aren’t necessarily representative
20
Netflix USA Speed Index, January-May 2014
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Big Variation in Fibre Adoption
21
IsraelBelgiumGreeceIreland
GermanyNew Zealand
AustriaFrance
ChileAustraliaCanada
ItalyFinlandPolandSpain
Mexico LuxembourgSwitzerlandNetherlands
United KingdomUnited States
TurkeyHungaryPortugal
Czech RepublicDenmarkSlovenia
IcelandNorway
Slovak RepublicEstonia
SwedenKoreaJapan
0 10 20 30 40 50 60 70 80 90 100
Fiber as % of Total Broadband
Percentage of fibre connections in total broadband subscriptions, June 2013
OECD ranks by FTTP as % of Broadband Subscriptions
OECD Average: 15.75% (June 2013)
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Big Variation in Fibre Adoption
22
IsraelBelgiumGreeceIreland
GermanyNew Zealand
AustriaFrance
ChileAustraliaCanada
ItalyFinlandPolandSpain
Mexico LuxembourgSwitzerlandNetherlands
United KingdomUnited States
TurkeyHungaryPortugal
Czech RepublicDenmarkSlovenia
IcelandNorway
Slovak RepublicEstonia
SwedenKoreaJapan
0 10 20 30 40 50 60 70 80 90 100
Fiber as % of Total Broadband
Percentage of fibre connections in total broadband subscriptions, June 2013
OECD ranks by FTTP as % of Broadband Subscriptions
OECD Average: 15.75% (June 2013)
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Cable Changes the Data Somewhat
23
GreeceItaly
New ZealandFrance
LuxembourgTurkey
GermanyAustralia
FinlandIcelandSpain
Mexico United Kingdom
IrelandAustria
SwitzerlandPoland
IsraelCzech Republic
DenmarkSlovak Republic
SloveniaBelgium
NetherlandsChile
SwedenEstoniaNorway
PortugalCanadaHungary
United StatesJapanKorea
0 10 20 30 40 50 60 70 80 90 100
Fiber as % of Total Broadband
Percentage of fibre connections in total broadband subscriptions, June 2013
OECD ranks by FTTP+Cable as % of Broadband Subscriptions
KNOWLEDGE FOR ACTION
APPROACHES TO NEXT-GENERATIONFIXED BROADBAND
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KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Architectural Choices
• Fiber to the home vs. the node– Cost vs. capacity tradeoff– The Australia example
• May be multiple technologies deployed within countries – Esp. with municipal networks – Hierarchy by density
(FTTH/VDSL2/VDSL/Wireless)
• Path dependencies important– High DSL/cable adoption may actually slow fiber
25
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Business/Regulatory Models
• Role of incumbents vs. new entrants– Non-traditional entrants (Reggefiber, Google)
important in some countries
• Scope of public funding or provision– Different models being used at the national,
regional, and local level– Success stories (Stokab), failures (Provo, UT), and
incompletes (Australia)
• Requirements for open access or wholesale– Prevalent in most of the world except the U.S.– Wholesale model often chosen voluntarily
26
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Vectoring and G.Fast
• Potential game changers?– “Fiber-like” speeds at “DSL-like” costs
• Challenges– May make unbundling technical infeasible– Heavily dependent on loop lengths– Real-world performance and deployment pace
lags– Still tops out well below fibre speeds
27
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Israel Fibre Network
• An important global test case
• Israel Electric Corporation (IEC) deploying a 1 Gbps wholesale network nationwide– First announced in 2011– Partnership with a group led by Sweden’s
Viaeuropa– Service scheduled to begin this month, offered
by retail providers (10 so far)– Plans to cover two thirds of the country by 2020,
and the remainder by 2033
• Bezeq/Hot investing in FTTH in response
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KNOWLEDGE FOR ACTION
KEY POLICY ISSUES
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KNOWLEDGE FOR ACTION Prof. Kevin Werbach
What’s the Goal?
• End-user maximum download speed isn’t necessarily representative– Interconnection, transit, caching, equipment
matter – Full capacity not always available at consumer
prices– Caps, tiers, usage-based prices also significant
• Importance and meaning of ubiquity?
• Technological neutrality may be impossible– Investment decisions today lock in particular
configurations for many years.
30
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
What About Competition?
• Virtually no business case to overbuild fiber, except urban MDUs – Natural monopoly?– Will the cost dynamics change any time soon?
• Unbundling may be restricted – E.g. with vectoring– Potentially removes a major regulatory tool in
much of the world– Choose between next-gen broadband and
competition?
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KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Operators vs. Edge Providers
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KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Already an Issue in the U.S.
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KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Watch This Space Going Forward• ETNO Proposal for “sender pays”
rule
• Complicated arrangements– CDNs, multiple end user fees, etc. – Data caps, freezones, usage charges also
significant.
• At high level, interests are aligned– Preconceived idea of cost “causation” not
realistic.
• Voluntary deals raise neutrality concerns
• Compulsion skews competition/investment w/no guarantee of more infrastructure
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KNOWLEDGE FOR ACTION Prof. Kevin Werbach
Surveillance and Governance
• Governments go where the information is
• Information goes where the users are
• An ongoing governance challenge
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KNOWLEDGE FOR ACTION
CONCLUDINGTHOUGHTS
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KNOWLEDGE FOR ACTION Prof. Kevin Werbach
• Ubiquity
• Capacity & Robustness
• Interconnection
• Innovation
• Data Integrity & Privacy
The Network Utility Agenda
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
These Questions
Aren’t as New
KNOWLEDGE FOR ACTION Prof. Kevin Werbach
“A new pronouncement by the regulatory agencies of a doctrine of free interchange
of signals across the boundaries of individual
systems would be of tremendous
technological benefit.”
-- Paul Baran, “Communication Policy Issues for
the Coming Computer Utility”, May 1968