Predictions for 2004

After spending the best part of a couple of weeks away from my beloved broadband, I find myself with an almost unquenchable thirst for news and reviews that I may have missed out on during my time down south with just a simple CDMA connection to rely on.

I’ve found that I don’t have much of a job to come back to as internal wrangling over moving from one department to another have left me a little “underutilised” until it gets resolved. This is a mixed blessing as, while I can spend my time on the strategic stuff I was working on prior to Christmas, there is no clear desire for that work to be performed due to the departure of the manager for our little group of people. The transfers must be going ahead though as both myself and my colleague are now reporting to one of my colleagues team members who has been given the role of acting manager. Anyway � enough on that…

The lack of imminent work allows me time to not only reflect on and plan for my impending wedding it also gives me some leeway to catch-up on what I’ve missed over the Christmas break.

January is traditionally the time where all the industry commentators compare their past predictions with what happened in the previous year, and make a whole set of new predictions for the year ahead.

In keeping with this tradition (and starting the same tradition myself) I’m making the following predictions for 2004.


WiFi

Ah yes, my December blog was supposed to have covered this in some detail, but, suffice it to say, the message got lost in the post (pun semi-intended). I believe that wireless devices will be come more mainstream this year as the 802.11 standards have been ratified and manufactures scramble over themselves to get devices to market including all those wonderful retro-fits which will enable us early adopters to get connectivity for our, now ageing, devices.
To achieve this penetration the industry will need:

  • Relevant content & services
  • An attractive price point (includes device AND bandwidth costs)
  • Ease of configuration
  • Connection security

Relevant content and services must be the enabler for effective uptake of wireless as, without something to use it for, the technology is pointless.

In a similar vein, the price point for both wireless enabled devices and, possibly more importantly, access but be within reach of the average consumer. If the devices are cheap but the access is prohibitively priced then devices will still be bought, it’s just they won’t be used to their full potential as the wireless side of the technology will not be utilised until such times as it’s affordable.
The ease of configuration is a tricky one, while early adopters are fairly tech-literate, the penetration into the market depends on pretty much a click and go philosophy. I’m not sure if it’s that we’ve been ‘dumbed down’ by the installation ease demanded by the newbie’s to computers and delivered by our friendly Mr Gates or if indeed technology honestly should be easier, but suffice it to say, if it can’t be plugged in and/or turn on and work then we’re in for an uphill battle. Users lose interest REAL quick and take a long time to be coaxed back into trying again. This issue is/will be compounded by the inability to access in “mesh” context, rather, requiring users to re-authenticate, possibly with different credentials, at every access
point they encounter.
Security should be top-of-mind for every user, but the simple fact is, it isn’t. Perhaps it’s the ‘dumbing down’ I referred to earlier or maybe people just don’t care about their data/identities. I suspect it’s a bit of both and, much like a hard drive crash to a backup policy, it’ll take something extraordinary to change peoples mindsets. We’re already seeing a bit of a turnaround when we look at email attachments and user behaviour, but it more of a vendor focus to change the way people use their gear, and in the interim I suspect
we’ll have to live with whatever can be shoehorned into default settings
without affecting that ever important ease of configuration.


Local Loop Unbundling

I pretty much cover this in my December blog so I’ll save some bandwidth by directing you there. I do think that the LLU will end up going ahead in New Zealand, however I believe this will be more of a vote buying exercise than an honest attempt to get broadband access to the masses and open the market to innovation. If it was my call to make I’d be inclined to legislate that broadband coverage must be available to 90% of the residents of the country at an affordable rate within 3 years and available to the entire country by say, 2008, mainly because it’s a nice round number than any external influences.
I’d say with this kind of motivation along with some financial backing in the right areas to fund innovative approaches to the task, we’d get there in time. I think the bun fight that will take place if LLU goes ahead will not only remove the focus from where it should be (i.e. providing broadband access to all citizens) but it will also cost a huge amount which could be invested in other ways toward the same end goal. Let’s not forget that if it was any other company who was incumbent on the local loop they would be doing exactly that same thing to protect their position.


PDA / Smart Device Penetration / Phone Wars

Smart Device Penetration – sounds really painful right? I’m predicting that smart devices will become more prevalent, following the lead of those crappy pxt phones. People will want them because they’re there and yet, unlike pxt, there is some real benefit to the technology that the smart devices will make avalible.
You will be seeing a real toe-to-toe battle between the big names in this area in 2004 as each tries to buy the market into it’s version of what is essentially the same technology. While it might be nice to have a pretty blue phone that plays Oh Fortuna when the mother-in-law calls, whilst allowing you to roam all the way around the world (very few of us do), the killer app will not really be an app at all, it will be the enablement of content. And that is where the battle will be won, who can get the best content and services to the people at an affordable price.


Home Entertainment

Home Entertainment will be where the push comes from in regards to getting broadband to consumers and convincing them to undergo a full technology refresh.
It is the easiest way to catch the attention of the public, give them some ‘wow-factor’ and build the need/desire for the latest stuff. The backbone for this will be wireless networking, very few people are like me (which is good) and because of that (average people simply don’t run CAT5 through their walls) wireless is *the* way to get multiple devices into the home environment and talking to each other. The more devices that you can get into the home the more services can be sold, the more services that can be sold the more bandwidth will be consumed – do you see where this is going? The providers win any which way you cut it, if the technology is subsidised it will be based on service subscription, if the service subscription is subsidised it will be based on the bandwidth required to drive it, if the bandwidth is subsidised it will be based on the services subscribed to. At the end of the day both the hardware and the services suppliers have a very nice earner.

I have a 31 year relationship with television. If I can be exposed to new content and services via devices which plug easily into, and are controlled from, my television then it’s the perfect way to generating new revenue streams using an appliance that pretty much every home has and is comfortable with. Try getting the same engagement via a PC. Traditional telecommunications companies profits are continuing to shrink as the products they offer get marginalised by advances in technologies and the resulting cost savings that can be enjoyed, and supplied, by almost everyone. Content and content services may well be the lifeline that these companies can use to stay alive. Those that can’t get their heads around the shift will almost certainly go under.
At the end of the day we’ll be able to have one entry point for broadband, feeding multiple devices from hard wired PCs to portable notebooks, to wireless audio/visual components in the lounge, all sharing the same bandwidth, all able to access a pool of content either from the PC or from the service provider/internet as a whole and all using devices and interfaces that the consumer feels comfortable with.

I’ll see you next January and we’ll see how well I did[n’t] do

The Access of Christmas Future

I’m sitting here – like much of New Zealands population – in the sun, contemplating the Christmas carry on. It’s this time of year where we all escape the craziness of the cities and head off to holiday homes, batches or cribs (depending on what part of the country you live in).
For many of us, myself included, the thought of taking our holidays in the absence of the internet is just too much to bear and so we dutifully take our notebooks, PCs, PDAs or any other device we need to stay in touch with along with us – praying that we’ll be able to connect up to the beloved internet and stay in touch.

For people like myself who have DSL at home can’t take it with us so we’re driven to scout out an internet caf�, open a short term dial up account or take with us some alternative access such as a CDMA PCMCIA card or connection via cell phone.
Of course the additional hassle of setting up a dialup account and being tied to a wall socket is not contusive to the freedom that holidays are all about. Internet caf�s are typically noisy, expensive and increasingly filled with young people playing the latest multiplayer network games – which makes a leisurely latte while tapping out thank you emails or reading the latest industry articles somewhat less than relaxing. And of course there’s the whole security aspect to consider along when using someone else’s PC, along with the inevitable pining for that high speed connection.
Cellular access is also very expensive and, while it frees you from the shackles of the dreaded wall socket and those oh so slow 56K connections (if you’re lucky enough to get such speeds at your holiday destination) the cellular coverage is still kind of patchy and there’s always those dollar signs ticking away at the back of your mind while you hurriedly attempt to open as many pages as you need, spending as little time as you can on line to avoid that horrid bill shock at the end of your holiday.

The solution as I see it is going to be provided by wireless access. WiFi (802.11[a/b/g]) and it’s bigger faster brother WiMAX (802.16)
provide relatively simple connection to a network, the main issues being security. I’ll explain why in a little bit, but for some background – read on…

While I tap away here, I’ve got literally hundreds of emails coming through on various email lists I belong to and they’re all discussing (some more vehemently than others) the surprise announcement by the Telecommunications commissioner.

Just to bring you up to speed, New Zealands Telecommunications infrastructure was once owned by the NZ Government through the New Zealand Post Office.
In 1987 Telecom bought this Telecommunications business from the NZ Post Office and became a State Owned Enterprise (SOE). This was an interesting time in New Zealands political history as a number of SOEs were also created in infrastructure areas such as power generation and transport around the same time, following on from this many of the core services were also privatised (such as NZ Railways, now Tranzlink).
Anyway, just three years after the SOE was formed, Telecom was sold in its entirety subsidiaries of Bell Atlantic Corporation and Ameritech Corporation for NZ$4,250 million. It was during this same year (1990) that Clear Communications (now TelstraClear) started building it’s network to compete with Telecom.
It is the feeling of a number of people that, while the SOE could and should have been sold to ensure it was run as efficiently as possible, government ownership over the infrastructure should never have been relinquished. There is a similar argument pitched toward the rail services of the country – though, as more people use a phone and/or the internet than freight goods/travel via rail, the rail privatisation hardly makes for newspaper selling subject matter.
The view of those against the privatisation of the core infrastructure is that, with government retaining ownership over the local loop.

Right, now I’ve explained all of that we can get back to the cause of this recent flurry of activity on the NZNOG and NZADSL email groups.

Introducing the Telecommunications Commissioner investigation into the Local Loop.

You see what has happened is, the Telecommunications Commissioner has done what appears to be a complete about face from the draft report which was release in October of this year.
What the draft report appeared to have recommended, is that the Local Loop (the copper infrastructure across which much of the telecommunications traffic in the country flows) should be unbundled thus allowing other companies to access the infrastructure and put their own services over it. It’s no surprise then that what has just happened has come as a shock to many interested parties with the final report recommending against the unbundling of the local loop.

The OECD has released a report on local loop unbundling (LLU) written in September. The report (without delving too deep into it’s 60 pages) states that while “the majority of countries consider that LLU has the potential to enhance local competition and assist in the development of competition for broadband services�” it recognises the difficulties in undertaking a LLU including the co-ordination required between the incumbent and ‘new’ entrants to ensure that, once unbundled, the local loop doesn’t fall over due to a lack or clarity/responsibility over fault handling and ongoing maintenance. To me, the most interesting bit is the section stating that “LLU is not a panacea� Goals for a broadband society can be attained in many other ways…”
This is kinda obvious stuff I’d have thought, but politicians and company heads all like to create large, expensive committees to slowly reach the same conclusions that anyone with a brain and a bit of Googling skill could have come to in a very short space of time. The fact is, LLU “could’, “should” and “has the potential to” make life easier for those wanting to rollout broad band services, however – everywhere that I’ve looked at where LLU is theoretically taking place the story is the same, it’s taking ages, the newcomers are unwilling to share the costs of ongoing maintenance of the loop and years down the track only a small percentage of lines have been unbundled to competitors (0.01% according to the European Competitive Telecommunications Association).

The question must be asked then, what the f**k is the point in spending all the time and money on commissioners reports, ongoing regulators, paying out some kind of compensation (I assume this would happen (perhaps naively), to my mind the NZ Government sold something and now wants it back. While is can legislate and take/do whatever it wants, it’s hardly moral – but then this *is* government.

The only place LLU works is in areas where an exchange has a large number of business users. Well bend me over and use me as a toast rack! Fancy that, high concentrations of users of a wide range of telecommunications services are more attractive to new players than Joe Average and POTS. This is precisely why New Zealand already *has* alternative networks -where it makes sense- where it makes sense is where the business users are, and where they are concentrated.
Wellington has CitiLink offering broadband, voice services and has spun off a WiFi offering in the shape of Caf�NET.
It also has an alternative network being strung up by TelstraClear.
Christchurch has a similar alternative network being put in and lets not forget the smaller players such as Dunedins wireless Scarfies.Net or Nelsons ThePacific.NET

– all of these people (there are more, Google if you’re interested) are setting up their networks *where it makes sense*. Face it, if you live in the sticks you’re stuffed. You won’t be using a terrestrial based system for anything much in a few years anyway so initiating a headache like LLU won’t have any benefits to you because by the time the regulatory bollocks has been sorted out, technology will have moved on and the whole thing will have become an expensive bunch of arse. You can tell by the continuing degradation in my tone that I’m getting a bit passionate here, but I think that apart from some short term political point scoring, LLU is not going to do anything to help the average NZer, it’s going to cost us (as the poor saps whose taxes will fund the whole thing) an absolute fortune, and at the end of the day it’s going to be superseded by alternative technologies� which brings me back to where I was just over 1000 words ago…

The access of Christmas future will be delightfully wireless� Of course by this stage we’ll all be wanting access to MB or GB a second speeds. Oh well, at the end of the day holidays are for holidaying, and until someone creates me an affordable laptop which can deal with sand, seawater and a frighteningly close proximity to boisterous kids, the kind of access I’ll need will be just enough to keep me in the loop until I return, refreshed, revived and ready to swap my summer beach for the florescent bleach.