What’s the future of service providers – telecom and cable companies – in the emerging platform economy? Connectivity and mobility are fundamental, for sure. But right now it feels like our industry is just a spectator as the really big changes unfold. No more a participant in that transformation than, say, Goodyear and Continental are in the tectonic shift to autonomous electric vehicles. Part of the furniture; not part of the conversation.
Why is that? Do you think we should talk about it? Figure out what the platform future could look like? So welcome to the Great Telecom Platform Debate. My goals for this blog are to frame that debate and throw it open to the industry. We’ve attracted the help of some real experts to get us started, including Laura Reillier - Demystifying Platform Strategy: Five key questions answered and Richard Feasey - Do Telco Platforms make Net Neutrality Rules Irrelevant? Share your thoughts with us…
We’ve become accustomed to clicking a button on our phones to summon a ride or book a room on Airbnb or to adjust our home thermostat. Platform companies Apple, Alphabet, Microsoft, Google and Amazon dominate the top market cap spots on the stock exchange. This was not the case as recently as five years ago when only one tech company was among the valuation giants. Futurist Mike Walsh made the observation that “change appears incremental until it’s too late”. Companies that are not working to migrate from purely linear pipeline business models to the platform economy will wake up one morning and realize that the world has changed.
The FCC is continuing to push for expanded broadband coverage in remote and rural areas as part of its Connect America Fund (CAF) program. CAF provides billions of dollars of funding to carriers to support their delivery of 10 Mbps download with 1 Mbps upload (10/1 Mbps) speeds to bridge the digital divide. But as an executive at a rural carrier that I talked to pointed out, “How do you deliver affordable and reliable broadband to a customer who lives in a canyon, miles from your nearest cabinet, yet you are obligated to serve?” Though not the typical scenario, this is the conundrum that rural carriers have with expanding broadband coverage – ultra-long distances, customers that number in the single digits per square mile and a difficult terrain that makes new network buildouts difficult and economically unviable.
Arlynn Wilson of ADTRAN, participated in USTelecoms’ recent webinar, “Extending Broadband to America’s Underserved,” pointed out that fiber is the ideal option for broadband – but very expensive for low customer count. Wilson recommended looking at a broadband toolkit that includes copper-based ADSL2 and VDSL2 as well as fixed-wireless access (FWA) technologies that can be used to more economically deliver broadband coverage to lower-density, far-flung areas. The point should be made that “broadband” here means the 2015 FCC broadband definition of 25/1Mbps not the minimum CAF-funded rate of 10/1Mbps. Wilson shared several points worth noting:
Nothing has the potential to shake up the telecommunications access world more than the Central Office Re-architected as a Data Center (CORD) initiative, which was launched last year by ON.Lab and is now part of the Linux Foundation’s many open-source initiatives to open up communications networks.
For decades, the access portion of telecommunications networks – as well as many other parts of the network – have been the domain of highly specialized and proprietary technology. The access network is crucial because it’s where important wide area network (WAN) services such as broadband and mobile get extended out to the customer. In the last decade, this has generally meant a mixture of passive optical networking (PON) and digital subscriber line (DSL) services. Now CORD can change the way these services are deployed.
In the CORD vision, all central offices could be standardized around a generic hardware infrastructure defining racks of servers and switches. These generic hardware modules will be controlled by software that can be programmed and run using a standard, Linux-based operating system. This is a radical shift from the past when access equipment was housed in proprietary racks of either optical line terminals (OLTs) or Digital Subscriber Line Access Multiplexer (DSLAMs). The CORD model will transform this, creating standardized generic hardware platforms.
Ryan McCowan, fiber access product manager for ADTRAN, recently participated in an UBB2020 webinar on mobilizing SD-Access with 10G PON. Having some prior knowledge of the subject at hand, I still find different points of view to be very informational as I continue to track these emerging technologies. Items I found particularly interesting were:
There is a lot of talk about software-defined networks (SDN) and network functions virtualization (NFV). But so far, the discussion has largely left out the access networks — mobile, broadband, and voice connections to the customer — which are crucial to building a full SDN and NFV platform. What exactly is required to build software-defined access (SD-Access)?
What good are SDN and NVF if they are incompatible with the technology that connects to the customer? Billions of customers worldwide require a connection to the first hop in the network, known as the last mile, which means that somewhere there is a piece of technology that must connect to the network from the customer premises, a device known as customer premises equipment (CPE).
To rapidly roll out new NFV services that can be controlled on an end-to-end basis, service providers need an open SD-Access platform that integrates with NFV. This platform needs to be open, flexible, and programmable, enabling configuration of the underlying access hardware to be made via software.
There is a huge trend underway in technology: The move from pipelines to platforms. Platforms have displaced pipelines to take the business world by storm – whether it’s a video platform such as YouTube or a housing platform such as Airbnb. The same trend is taking hold in the telecom world, where service providers need to respond by building open platforms for the telco cloud.
Let’s start defining pipelines vs. platforms. The concept has been described by authors Marshall W. Van Alstyne, Geoffrey G. Parker, and Sangeet Paul Choudary in the book, Platform Revolution, as well as in an article published in the Harvard Business Review (HBR) last year, titled, “Pipelines, Platforms, and the New Rules of Strategy.” A pipeline, according to the authors, creates value by controlling linear activities in a value chain. Think of the way you buy a cable service, then get a cable box, then buy movies from the cable company. Platforms, on the other hand, connect producers and consumers with a higher value exchange. An example is the Apple App Store.
The most successful services today, whether it’s the iPhone, Netflix, or Airbnb, are platform models that have created rich ecosystems that deliver a huge amount of value toconsumers. The platform gives the consumer a tool to get access to what they want whenever they want it.
The diversity of today’s client device types has grown far and wide from Bring Your Own Devices (BYOD) to Internet of Things (IOT) to Augmented/Virtual Reality with each its own unique connectivity and roaming decision making behaviors. Ensuring an exceptional Wi-Fi end user experience is challenging – especially when client devices, with their limited view of the network, are ultimately in charge of the decision of what access point (AP) to connect to, when to roam and at what speed.
ADTRAN’s Ronan Kelly looks at the European Commission’s objectives for a new telecoms framework, to be met by 2025. Mr Kelly, who is also president of the FTTH Council Europe, discusses what this framework covers and how it might affect UK households.
Political leaders have a fine line to tread when it comes to declaring their policy ambitions for future broadband rollout. Businesses and individuals expect to hear about faster speeds, and more widespread availability. The service providers who will deliver it need to champion realistic expectations, preferably under a regulatory regime that offers complete certainty.
You can’t blame the European Commission for trying to set the bar high. In its latest European commission broadbanddraft proposal published in September, EC President Jean-Claude Juncker has set out a more nuanced set of aspirations than we’ve seen before. Geared to the year 2025, the new strategy supersedes earlier targets for 2020, and should begin its passage through the European Parliament imminently. All being well, it could be adopted by early 2018.
As we enter the 2017, we are faced with a different landscape, one which will see changes in the economic rules of engagement with other European nations, and likely the United States. In this new era, in order to preserve competitiveness, it is vital that the leaders of nations recognise the importance of the next wave of digital infrastructure. Success or failure in the digital economy is what will make or break the economies of the future.