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Cisco’s Kevin Shatzkamer Discusses the Future of Mobile Video

Kevin Shatzkamer is the Chief Architect for Cisco Mobility and speaks to the mobile research Cisco has developed in helping Mobile Service Providers reach their ROI goals and objectives in projecting an increasingly demand driven market.

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Kevin Shatzkamer is the Chief Architect for Cisco Mobility and speaks to the mobile research Cisco has developed in helping Mobile Service Providers reach their ROI goals and objectives in projecting an increasingly demand driven market.

World Cup and Mobility

Q. How will current World Cup viewership demand impact the mobile community from a network capacity standpoint?

VIEWING SOURCE – WORLD CUP GAMES

Source Company %
Internet ESPN-ESPN3 31%
Radio ESPN Radio 8%
Mobile ESPN Mobile Sites 6%
“Traditional TV remains the dominate source of viewing for the games”

A. There has been speculation for years that increased demand for mobile video would tax and possibly crash current networks and infrastructures of mobile operators. A predictor may be The World Cup games being held in South Africa.  “We know that AT&T, VERIZON, SPRINT, MobiTV and QUALCOMM FloTV have teamed up to work with ESPN to offer mobile video coverage of the games.” From real-time research conducted by ESPN on current World Cup video demand has produced the following statistics:

MOBILE VIDEO TRENDING

Event Source Total Views Total Days
Vancouver Olympics Mobile 2 .0 Million 17
World Cup Mobile 1.8  Million 7

“What is interesting in these statistics is that not only are people watching on mobile video, but they are spending an inordinately long period of time watching video on their mobile device, which is significant. Speaking to network capability in handling this viewership, think of over one-hundred thousand cell towers in the U.S. alone, not to mention globally, to handle this demand and you can see the network is not currently being impacted significantly.”

Mobile Traffic in the Future

Q. Where does mobile traffic go from here and what are the demands going to be for video in both near and long term?

A. Cisco predicts that sixty-six percent of mobile traffic in the future will be video and whether the FCC’s reclamation of needed spectrum is enough is not yet known. Kevin goes on to explain that whenever you have a delivery method that leverages a finite resource, such as spectrum; there will always be increased contention depending on what people are doing over that network at any particular time. 

It’s important to remember that video over wireless can be taxing on the entire network, not just the radio interface.  One example is the backhaul network, which is always provisioned with some level of oversubscription.  There are technologies that can be used today like video optimization and multicasting technologies which can help a service provider better distribute and deliver mobile video. Other solutions include moving from streaming video to more adaptive protocols like fragmented MP4.

Video and the Network

Q. Why should we look at mobile video as just another application within the network and not a bandwidth hog that could potentially crash the network during peak usage?

A. As an analogy to building strong video infrastructure, Kevin points out that Cable Operators have invested tremendous amounts of capital in their video delivery platforms. It is important to understand that cable has the revenue models which support this kind of investment. Wireless on the other hand has not developed the kind of revenue streams for video since the demand has not been sufficient to support that investment, albeit on a smaller scale.

However, research indicates that as mobile video continues to grow, these kinds of investments will be needed to upgrade current networks to both capitalize on revenue streams and handle the burgeoning demand for video over increasingly diverse devices. Long-term, video might not be looked  at strictly as an over-the-top service for mobile, but instead an opportunity for mobile service providers to insert themselves into the value chain; if this successfully occurs, the infrastructure investments which need to take place will happen.

Cisco’s experience with operators continues to indicate a focus on optimizing the entire network, including the backhaul, which needs to be a primary consideration in subscription models. Cisco is helping operators control the impact of video by implementing intelligent network capabilities in the core, mobile services and gateways, and backhaul networks.  These solutions add immediate value by conserving the RF itself, but also provide the foundation for new monetization capabilities.  He adds that adding more spectrum is helpful to the problem, but should not be the only focus of mobile operators.

Kevin points to a consistent theme across all models whether it’s Docsis3 or LTE in that the Internet Protocol (IP) is becoming less about a transport mechanism and more about a service delivery platform. He compares Docsis3.0 carrying cable signals to a modem which becomes your access point, where mobile will use the cell tower as the same type user access point. In essence, from the access point back through the network, IP will be the primary technology for service delivery.

Net Neutrality and Regulation

Q. What is the potential impact of Net Neutrality possible legislation which could affect service provider ability to manage their networks?

A. The crux of Cisco’s policy release takes a practical view regarding any initiatives that would control service provider network management strength. In essence, “Cisco supports competition within the marketplace and believes that any regulation based on any perceived or potential future abuses are not in the best interest of logical network management practices.”

At best the outlook for where technology will be in the future is uncertain, but as progression in technology evolves as a result of private market forces, any attempt to regulate those forces would dampen private investment as a natural evolution. It is inherent that networks be managed in a way to promote bandwidth optimization which fills the needs of both casual and heavy users. Fair usage will be critical to enabling any network of the future and requires an intelligent IP infrastructure.  This also sets the stage to use tiered pricing to offer expanded services critical to a B2B and B2C economical model.

Tiered Pricing Models

Q. Why is tiered pricing important for Service Providers in the Future?

A. Quoting Bernstein Research to predict the evolution of mobile data and how fast it is growing in a shift from a voice dominated model to a data dominate model, Kevin conveys that 50% -70% of future revenue will begin to come from a data model with a de-coupling of mobile revenue and traffic with revenues now accounting for $.43 per Megabyte. Bernstein predicts that by 2014 those current revenues will drop to $.02 per Megabyte and points to current revenue models as becoming deflationary.

While networks are moving from circuit to packet models as they continue to upgrade their infrastructure, the amount of capital invested as compared to resulting ROI is expected to decrease 30% by 2014. Increasingly mobile service providers will be looking for ways to monetize their networks. While the tiering trend has been with the cable industry for quite some time, it has not yet evolved within mobile markets.

Kevin predicts this will change as the industry evolves to the tiered approach beginning with flat-rate for basic users and progressing to higher level packages as individual demand increases. Using the 80-20 rule, Kevin compares how only 20% of all users can demand an exorbitant amount of bandwidth and tiering is an inevitable market force in the future. In reality, this will not affect the majority of users where pricing will be very competitive, but will take the heavy users to an appropriate bundling strategy that can handle specific demands at a relative price model.

Creating New Revenue Models becomes Critical

It can be surmised that current pricing models within the mobile industry is driving traffic to higher levels especially with the amount of rich applications being afforded customers due to the iPhone and Android appearance on the scene with open source development driving those applications.

However, mobile operators are only covering their costs with current revenue models and will need the new service offerings and pricing models to create additional revenues and ROI in the near future. Kevin, shares that tiered pricing is only one model of the total business spectrum service providers should be looking at to grow ROI. Cisco is committed to helping providers find other businesses and models to extrapolate the potential of future networks.

That being from a standpoint of B2B services in environmental, energy savings and monitoring services with which both businesses and consumers could reap much higher benefits from these kinds of services. Mobile data penetrations are nearing 50% and voice penetrations are already at 95% which brings further credence to understanding the need for service providers to differentiate mobile service offerings, including mobile data, to retain existing customers, grow their subscriber base, and increase their revenues.

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Dianne Crocker: Recession Fears Have Real Estate Market Forecasters Hitting the Reset Button

Growing fears of recession trigger pullback on previous rosy forecasts.

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The author of this Expert Opinion is Dianne Crocker, Principal Analyst for LightBox

The lyrics to “Same As It Ever Was” by the Talking Heads certainly don’t apply to how 2022 is playing out in the commercial real estate market. Two quarters of negative economic growth has put a damper on market sentiment and triggered fears that the U.S. economy is heading for a recession. By midyear, market analysts were taking a good, hard look at their rosy forecasts from the start of the New Year and redrawing the lines.

Once upon a time…

At the start of 2022, forecasters were bullishly predicting that commercial real estate investment and lending levels would be nearly as good as 2021. This was significant, considering that 2021 set new records for deal-making and lending volume as the debt and equity capital amassed during the pandemic while looking for a home in U.S. commercial real estate.

What a difference a few quarters have made. Virtually, all the predictions that started the New Year were obsolete by mid-summer. The abrupt shift in market conditions is palpable and surprised just about everyone. Now, markets are reaching an inflection point that is in sharp contrast with the strong rebound of last year.

The two I’s: Inflation and interest rates

At the core of the recent upset in market sentiment is the persistence of high inflation, which seems to be ignoring all attempts by the Federal Reserve to raise interest rates and bring prices down. Higher inflation is having a ripple effect throughout the economy, pushing up the costs of construction materials, energy, and consumer goods. Among the notable economic indicators showing stress at mid-year was the GDP, which fell for the second consecutive quarter, and the Consumer Price Index, which jumped 9.1% year-over-year in June – the highest increase in about four decades.

In July, the CPI fell to 8.5%, an encouraging sign that inflation was beginning to stabilize. By the latest August report from LightBox, however, hopes were dashed when the CPI showed little improvement, holding firm at a still high of 8.3%.

The market is responding to a higher cost of capital as lenders tap the brakes. As the cost of capital rises with each interest rate hike and concerns of a recession intensify, many large U.S. financial institutions are pulling back on their loan originations for the rest of 2022 and into 2023. This change in tenor is a significant shift, given that 2021 was a record-breaking year for commercial real estate lending. Many lenders have already shifted to a more defensive underwriting position as they look to mitigate risks.

The Mortgage Bankers Association, which had previously predicted that lending levels in 2022 would break the $1 trillion mark for the first time revised their forecast downward in mid-July. By year-end, the MBA now expects volume to be a significant 18% below 2021 levels—and one-third lower than the bullish forecast made in February. Now, investment activity is cooling as higher borrowing costs drive some buyers from the market.

In the investment world, transactions were down by 29% at midyear due to a thinning buyer pool as higher rates impact access to debt capital. Market volatility is causing investors, lenders, and owners to rethink strategies, reconsider assumptions, and prepare for possible disruption.

Looking ahead to year-end and 2023

The rapid and diverse shifts in the market make for an uncertain forecast and certainly a more cautious investment environment. The battle between inflation and interest rates will continue over the near term. As LightBox’s investor, lender, valuation, and environmental due diligence clients move toward the 4th quarter—typically the busiest quarter of the year–unprecedented volatility is driving them to recalibrate and reforecast given recent market developments.

Continued softness in transaction volume is likely to continue as rates and valuations establish a new equilibrium. If property prices begin to level out, there will be more pressure on buyers to consider how to improve a property to get their return on investment. The next chapter of the commercial real estate market will be defined by how long inflation sticks around, how high interest rates go, and whether the economy slips into a recession (and how deeply). The greatest areas of opportunity will be found in asset classes like office and retail that are evolving away from traditional uses and morphing to meet the needs of today’s market. Until barometers stabilize, it’s important to rethink assumptions, watch developments, and recalibrate as necessary.

Dianne Crocker is the Principal Analyst for LightBox, delivering strategic analytics, best practices in risk management, market intelligence reports, educational seminars, and customized research for stakeholders in commercial real estate deals. She is a highly respected expert on commercial real estate market trends. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Jeff Pulver and Noah Rafalko: A Humble Request to the FCC on Robocalls

Blocking bad actors requires a whole new way of thinking, the authors say in this ExpertOp exclusive to Broadband Breakfast.

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The authors of this Expert Opinion are Jeff Pulver (left), innovator in VoIP and Noah Rafalko, is a pioneer in TNID

Should the Federal Communications Commission seek out alternative platforms to solve their 2022 spam, scam and robocall issues? Yes! Does Blockchain offer valuable solutions? Yes! We would like to ask the FCC to increase the width of their lens when it comes to deploying solutions to solve their growing number of systemic challenges.

Any action to stop robocall insanity and tech-driven scams would be welcome. While Americans deal with the linger pandemic, mass shootings, an uncertain economy and war in Europe, the constant annoyance from scammers and 4.1 billion robocalls a month is just too much. Most people have responded by literally giving up voice communications all together.

Recently implemented legislation called STIR/SHAKEN is a step in the right direction, but it is not a long-term solution. The FCC  is simply taking old standards and applying them to new technologies. New thinking is needed; the next generation of technology must be explored. And the most promising of the new tools to protect our telecommunications system from fraudulent players lies in blockchain.

The key to stopping these nefarious acts lies in a digital identity solution powered by blockchain – a shard database or ledger. An identity solution enables customers to be confident that the communication is truly from enterprises they know and trust.

With blockchain, only authorized and verified messages get through. Spam and robocalls are virtually eliminated in one shot. All that’s required is a slight change in how we approach communications.

In a world where consumers are already doing whatever they can to self-manage their identity, it isn’t a large leap of faith to imagine adding a certified, digital ID to our telephone numbers.

Consumers freely use their telephone numbers to attest and manage their identity – even more than they use their Social Security numbers, birthdays, mother’s maiden name and secret questions. In our current digital universe, consumers use their phone numbers to register for store discounts, receive health and safety alerts and even transfer money to others.

And in their effort to stop spam and robocalls, consumers willingly add apps such as Hiya, paying over $300 million a year to these intermediaries.

The FCC needs to evolve and embrace the technology that allows consumers and mobile carriers who have a shared stake in attesting their identities. They need to recognize that blockchain technology offers an elegant, all-encompassing solution to the $40 billion in fraud that consumers fall victim to every year.

It’s time we leveraged a solution that’s already being used in other countries such as India, where blockchain technology helps protect over 600 million citizens from spam and robocalls.

Back in 2004, when the future of telecommunications was being written, the FCC was challenged with laying down rules governing Voice over Internet Protocol (VoIP). At that time, we hosted brown-bag lunches for Congress, and held open demonstration days at the FCC as well as a mini-trade show on the Hill in our effort to inform and educate Congress, staffers and other government employees on the latest and greatest innovations in Internet communications technology.

The FCC would be wise to revisit this practice of show and tell where they hear from the innovators of new game-changing technologies that can solve their biggest concerns. It certainly is wiser than simply taking advice handed down from lobbyists and relying on legislation that’s severely limited and unenforceable.

When the FCC uses its influence to investigate and embrace new and innovative technologies, they can finally make significant headway in restoring trust in the quality of service associated with our communications.

Jeff Pulver is an innovator in the field of Voice over Internet Protocol (VoIP). He was instrumental in changing how the FCC classified VoIP in 2004, paving the way for the development of video and voice internet communications. The co-founder of Vonage, Jeff has invested in over 400 start-ups. 

Noah Rafalko is a pioneer in TNID (Telephone Number ID), a blockchain solution that restores trust in communications. Noah is founder and CEO of TSG Global, Inc. which provides voice, messaging and identity management services for SaaS companies and large enterprises. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Jay Anderson: Is Texas the New Home for Robust Internet Access?

Cost of doing business is driving companies into markets with favorable tax rates and fewer regulations. Here’s how they’re prioritizing.

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The author of this Expert Opinion is Jay Anderson, chief technology officer, FiberLight

It is hard to ignore how the COVID-19 pandemic has impacted our lives––namely, how we work and live. Many people emerged from the pandemic with a request to employers: Continue to allow flexible work arrangements. Thanks to digital transformations across industries, Americans are embracing flexible work arrangements, and they want more of it.

In fact, according to McKinsey’s American Opportunity Survey, 58 percent of U.S. job holders—equivalent to 92 million people—report that their employers are still offering the option to work from home for all or part of the week. The survey also showed that when given the opportunity to work flexibly, 87 percent of workers embrace it.

Because of the shift toward remote work, people are relocating to cities that better suit their needs. New data by Upwork reports that 2.4 percent of Americans–– about 5 million people––have relocated since 2020. And, 9.3 percent of Americans––around 20 million people––are planning to relocate.

Companies also are considering relocation. According to FiberLight’s 2022 Business Relocation Expansion Survey, 70 percent of IT and corporate decision makers say they are considering relocating their business or adding more locations within the next 3-5 years. Executives cited market saturation and availability, followed by the expense of doing business in major metropolitan areas, and expanding their operations, as factors driving the change.

Notably, of these respondents, 78 percent said they are considering relocating their business to Texas. Why Texas? Texas offers several advantages including a lower cost of living, favorable tax rates, and fewer regulations. Ranking high on the list of Texas cities decision makers are considering for relocation include: Dallas / Ft. Worth, Austin, and San Antonio, in that order. Decision makers also are considering a host of more rural Texas markets including El Paso, Arlington, Corpus Christi, Plano, Lubbock, Irving, Laredo, Frisco, Garland, Brownsville, Amarillo, McKinney, and others.

Yet businesses will need faster, more robust connectivity in order to execute their business strategies.

Executives surveyed said that they are planning, primarily, for Hybrid and Cloud infrastructure models. Their biggest priorities for connectivity upgrades include 1) Speed / Low Latency, 2) Security, and Diverse Connections.

Executives also said that they are prioritizing the following local infrastructure needs:

Data center access (29% of respondents): What today’s data center requires

The new data center requires an infrastructure that can provide rapid, secure data transmission through reliable, scalable, high-capacity bandwidth that meets the processing demands of next-generation technologies like blockchain systems. Many blockchain data centers are cropping up in rural areas of Texas; however, sourcing reliable connectivity to the internet can be challenging.

Public sector (22% of respondents): A broadband for all advocate for rural America

Public sector teams are critically important to finding solutions that deliver next-generation technology to underserved rural areas. By raising awareness of the need for broadband for all, connecting communities to funds and resources, and establishing partnerships, public sector teams can help municipalities, schools, and businesses access the networks that will help them to grow and scale into the future.

Cloud migration (20% of respondents): Key factors to consider

For enterprises choosing to migrate operations and workloads to the cloud, robust and secure fiber connectivity within a mission-critical colocation facility is a must. Choosing the right data center with the best connection to the cloud is half the battle. Organizations must also ensure there is fiber network infrastructure that’s scalable and reliable providing interconnectivity between their locations and their chosen data centers.

Dedicated internet access (15% of respondents): The path to increased uptime, speed, and reliability

Enterprises of all sizes can benefit from choosing Dedicated Internet Access (DIA)––a private or fully dedicated connection between the internet and the customer. Enterprises, data centers, government institutions, and many more businesses today require a fully dedicated connection allowing large amounts of data to be transferred at faster speeds in order to keep pace with their business needs.

Dark fiber (12% of respondents): A cost effective network strategy to future-proof businesses

Dark fiber holds a lot of potential to rejuvenate the capabilities of businesses across many key vertical industries, including healthcare, finance, education, and beyond. This network strategy effectively future-proofs businesses, empowering them with the ability to cost effectively meet the growing needs of their end-users with bolstered bandwidth, reduced latency, and more.

Post-pandemic relocations are igniting digital transformation and highlighting the core infrastructure requirements to support business expansion. It will be exciting to see how rural areas around our country will begin to flourish as a result.

Jay Anderson is chief technology officer of FiberLight, a fiber infrastructure provider with more than 20 years of experience building and operating mission-critical, high-bandwidth networks. As CTO, he is responsible for evolving FiberLight’s infrastructure and technical capabilities to ensure the company can respond quickly to the changing digital ecosystem needs of its customers. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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