AT&T, Verizon Stake Out U.S. Microwave Spectrum Licenses Ahead of Big 5G Broadband Expectations

B. Washburn

Summary Bullets:

• 5G’s high-frequency component holds the promise of very high-performance/low-latency millimeter wave mass-market communications. AT&T and Verizon are aiming for companies with large bundles of spectrum licenses.
• Millimeter wave license holders struggled to monetize the business. The 5G spec makes mass-market promises, but the technology has to break cost and power usage barriers.

The latest U.S. spectrum auction wound down in April, raising US$19.8 billion – less than half of what the U.S. government expected – for 70 MHz of spectrum sold for cellular communications in the desirable sub-1 GHz band. Comcast, T-Mobile and Dish Networks bid heavily. But, incumbent mobile operators AT&T, Verizon and Sprint, usually starved for spectrum and willing to spend big, barely made a showing.

I Run Applications, You’re Measuring Packets: It’s Time to Revisit Those Network SLAs

Brian Washburn – Service Director, Business Network and IT Services

Summary Bullets:

• Enterprises are increasingly focused on, and making decisions around, applications performance. WAN providers’ stock SLAs are still mired in the language of packets and frames.
• Network partners already aren’t top of mind for enterprises’ applications performance discussions despite their key role in applications delivery.

Through our regularly conducted global ICT surveys here at Current Analysis, we caught one of the most recent purchasing trend shifts early on: enterprise lines of business are increasing their purchasing influence, even influencing networking-related decisions. More accurately, our surveys have been validating a power shift that we’d already been experiencing in our enterprise inquiries.

Just Because the FCC Is Cutting TDM Access Costs, Don’t Assume It Will Happen

Brian Washburn – Service Director, Business Network and IT Services

Summary Bullets:

• The FCC is getting ready to release an Order forcing double-digit rate cuts to DS3/DS1 special access services over three years.

• Enterprises looking for cost savings have a surer bet moving to Ethernet on broadband and/or fiber access alternatives wherever available.

The U.S. Federal Communications Commission (FCC) appears finally to be in the home stretch of a move to force incumbent carriers to reduce rates for certain types of access. Specifically, after much back and forth on details, the proposal is now tilting to an 11% blanket rate decrease in access costs implemented over three years, from July 2017-2020, and by 3% per year after that (adjusted by inflation). These new price protections cover dedicated access services at speeds below 45 Mbps — that puts a bull’s-eye on the venerable DS3 and DS1 circuits. Also planned are new price protections for buyers, and more power for the FCC to handle complaints.

Going Digital: Manufacturing is Taking the New Connected World Very Seriously

B. Washburn

Summary Bullets:
• The manufacturing sector is pulling far ahead of other vertical segments when it comes to going digital.

• Manufacturers are working new digital business on two vectors: Intelligence on their factory floor; and embedded in the products they build and ship.

Here at Current Analysis, we’ve been hearing our share of hype related to the Internet of Things (IoT). As interesting as sensors and connectivity and analytics might be individually, it’s really about the combination of these elements to create totally new digital business models. There’s no shortage of service provider and vendor pitches for going digital. The industry has its photogenic poster children, like Progressive’s behavior-based insurance program; GM OnStar connected car and telematics; and GE Predix with its comprehensive aircraft engine analytics.

The Carrier Consortium, Reloaded

B. Washburn

Summary Bullets:

• The ngena alliance promises to unite 20-30 network providers worldwide, to begin offering a single source for global/local services empowered with SDN, virtualization and orchestration in 2017.
• Just like Airbnb isn’t Marriott and Uber isn’t a taxi fleet, enterprises using ngena may see a tradeoff between local variety vs. global operators’ unified customer experience.

One of the big news items to hit from Mobile World Congress in Barcelona last week didn’t have anything to do with mobility. U.S.-based service provider CenturyLink, Europe-based Deutsche Telekom, Korea’s SK Telecom and India-based Reliance Jio have teamed to become wholesale suppliers to a startup company called ‘ngena,’ short for ‘Next Generation Enterprise Network Alliance.’ The startup is based in Germany and intends to sign 20-30 providers to the alliance. Presumably, the members will be companies with a strong national or regional presence, but which lack the reach and clout to match the largest global network operators.

Fixed Wireless Access Finds Success, but Perception Challenges Remain

B. Washburn

Summary Bullets:

• Cellular wireless services continue to find traction for flexible, value-priced temporary and failover connectivity, as long as the enterprise is comfortable using best-effort broadband.

• Fixed wireless specialists offer a flexible range of microwave access connectivity when wireline options are inadequate or not available, but buyers still frequently lean toward wired.

In the U.S., fixed wireless services have gone through several boom-and-bust publicity cycles. But behind the publicity, wireless technologies are sound and in most cases, delivering on promises. AT&T, Verizon and Sprint don’t disclose the numbers of businesses that have purchased CPE with their respective managed 4G/3G fixed wireless failover services. But the widespread resale of cellular failover services by other providers shows the service option has solid traction. Cost and availability have something to do with that. When a wireless failover service can cost as little as $10-$20 per month as long as it’s idle, that’s a cheap insurance policy. It also helps that 4G networks are now nationwide, and offer better throughput and performance than 3G wireless. But cellular wireless is still best-effort broadband, and not an option for failing over traffic that must have sustained throughput or guaranteed performance.

Looking Back and Ahead, Commercial SDN/NFV Offers Hit Full Steam in 2015

B. Washburn

Summary Bullets:

• 2015 was a big year for more operators making more SDN/NFV-enabled services available, reaching more places.
• SDN and NFV promise efficiencies of virtualization and dynamic bandwidth, but the technologies provide many ancillary benefits as well.

For companies interested in dynamic networks and network virtualization, 2015 was a banner year. While network function virtualization (NFV)-powered services had already begun gaining ground (just two examples are NTT Com and CenturyLink), dynamic bandwidth provisioning was still limited. Verizon (with Dynamic Bandwidth for Private IP), Level 3 (with former tw telecom’s Adaptive Network Control) and Masergy (with Intelligent Service Control) were established competitors. AT&T had just begun introducing its SDN-powered Network on Demand service in its local service footprint. Telstra’s PEN remained an Asia-region network.

Why Your Enterprise Environment Is Probably Still Terrible, and Why Users Will Bypass It

Brian Washburn

Summary Bullets:

• Pervasive network access and the cloud have created a tipping point for workers; IT departments may be aware, but may fail to follow users going over the edge.
• Work habits continue to shift, as established enterprise tools, processes and platforms have become inefficient and dated.

I am usually not a fan of ‘personal experiences’ blogs. But, sometimes, it helps to reflect on our own enterprise technology challenges and how they resemble issues faced by our enterprise readers. Executives and work teams strive to be more efficient, whether IT is an enabler or a roadblock. In the context of personal experience, I submit the following observations:

Overlapping Mixed Messages? Service Providers Aim to Commoditize Adjacent Peers

Brian Washburn

Summary Bullets:

• Various service provider categories – ITSP/SI, cloud, data center, network and technology vendors – seek to outmaneuver each other and win control of the customer relationship.
• The provider (and sector) that secures the customer relationship can seek to preserve its own margins and, through commoditization and automation, push down those of adjacent providers.

If you’re a large enterprise buyer and can wade through the mixed messages from service providers, it’s a great time for shopping around to find deals. But, for many service providers, the same overlapping messages are cause for apprehension. The mixing of cloud, data center, network and managed/professional services plays up fears that every adjacent sector is now a competitor. Those concerns are well-founded.

Coming Sooner or Later: The First Fully Virtualized Global Carrier

Brian Washburn

Summary Bullets:

• Can a startup build global WAN facilities using nothing but the cloud? It may be impractical, but economics are trending toward possible.
• Despite serious roadblocks today, the idea of sourcing/scaling facilities on-demand, and using them on a pay-as-you-use basis, seems tempting.

As a thought exercise, imagine what network function virtualization (NFV) will look like when the technology reaches its theoretical end state. Instead of switch/routers running on purpose-built hardware, the routing function could run entirely on software in virtual machines. These virtual machines in turn run on generic high-performance computing platforms located in large regional data centers and strategically distributed worldwide. What’s more, those large regional data centers happen to have plenty of competitive fiber linking them. That means plenty of carrier competitors to offer commodity priced, flexible high-performance switched Ethernet connectivity between sites. The result is a completely virtual global WAN operator, one that can ramp up and tear down both router horsepower and corresponding capacity, based on customer need. There would be no networking sunk costs – the primary investment would be in orchestration software, and in operations support/billing systems.