Well, it looks highly unlikely. You need roads to travel, you need wires and towers to communicate.

Suppose you have a real good off-road SUV, one of those behemoth that can also cross rivers. May be you caould go from A to B without having to use a road.

Ah! I hear you saying. You might be able to do so but it would take much more than using a nice paved road and it will cost you a fortune in gasoline. Right. But what if you are in the middle of nowhere, let’s say in the Australian outback. What would be quicker AND cheaper: get the behemoth or build a road?

I guess I made my point. By having a sufficiently smart and flexible car you can make do without the road infrastructure.

Let’s turn to communications. The very first telephones were sold without any infrastructure to plug them on. You would buy a (pair of) phone and you would ask somebody to lay a wire (actually 4 of them) to establish the connection. Luckily a full blown infrastructure was put in place, with a lot of investment and over a long period of time, and today we can easily connect our phones. Then cell phones were invented and the connectivity perception moved away from the users since the last part was via “air” and most of the times the towers were hidden to the user’s sight.

Nowadays, and more so tomorrow, terminals, like cell phones, are very powerful devices that can morph into a network node. In perspective they can become the network. Clearly I am not thinking that the big backbone will disappear. On the contrary, They will become even more capacious and will extend to metropolitan areas to what today we call the backhauling. But the distribution network may fade away under the pressure on the one side of the extended backbone and on the other side on the take over by terminals.

Terminals may communicate one another whenever they are sufficiently close, and for data communications. From an energy standpoint it is cheaper to compute than to transmit and energy dissipation grows at least with the square of the distance. So if two terminals are closer one another than they are close to the antenna connected to the backbone it makes more “energy wise” sense to communicate with one another, one acting as a bridge towards another terminal (and so on) or towards the backbone antenna.

In this perspective the future network will be a composite of dynamically connected nodes and such a network will also be a set of connected information. Quite a different view from today hierarchical structure. It will be much more like a “natural creation” rather than an engineered one.

In order to make it happen we need a lot of research (and it is going on today) and the vision to let the market evolve.

What is LightSquared from LightSquared on Vimeo.

I should say that this post was prompted by looking at Lightsquare, a 7B$ initiative by Harbinger aiming at creating a wireless coverage in the US deploying 40,000 antennas as access point. I would consider this as a first step towards the flat network of terminals I am suggesting. It seems to me that 40,000 access point can really sustain a US wide network only once terminals will play also the rle of network nodes, extending the reach of each access point.

http://www.servalproject.org/

being deployed in Australia where cell phones play the role of towers to provide connectivity to areas not covever, creaitng a network by themselves with one (or more) cell phone acting as gateway when it happens to be within coverage of a network access. 

I just finished to read a nice book, “the Big Switch, rewiring the world, from Edison to Google” written by Nicholas Carr.

What strikes me most is not what Nicholas is saying but what he is not saying: he never speaks of telecommunications.

He starts by looking at the rise of the electricity infrastructure and of its impact on the business and on our everyday life. Then, almost with no gaps in between he starts to speak about the new infrastructure being created by information and computers processing this information. It is this new infrastructure that we are starting to experience that is changing the business and reshaping our lives.

Has he forgotten that this infrastructure exists because there is a telecommunications infrastructure to enable it? Has he forgotten that the telecommunications infrastructure has changed the business and our life? That this infrastructure has made other infrastructures possible, like the network of transport of goods , the network of news and entertainment?

Apparently he has. Probably he considers the telecommunications infrastructure has something that has found its real dimension in the enabling of the information and processing infrastructure.

He may be right. This is something that I feared in the last part of the nineties when I wrote the book “the disappearance of telecommunications”. The success, the pervasiveness, the efficiency of telecommunications is begetting its demise from our perception, it’s making it disappear.

This fading away from the center stage is flanked by a decrease in revenues that may tend to stop once it matches the operation cost. Zero margin maybe the asymptote.

Not a nice thought of course. How can this infrastructure be leveraged by those who created it and keep investing money in it, a particularly hot question in these days when a huge amount of money would be required to move the present still largely copper infrastructure to a full optical infrastructure. The paradox, as Roberto Minerva pointed out in some of his posts, is that by moving towards the unlimited capacity offered by a full optical infrastructure and its much higher efficiency we will accelerate its demise from our perception as everyday users.

At the same time, this shift will increase enormously the growth of ecosystems that thrive on very low transaction costs.

Most Telecom Operators are facing an increase in traffic (most notably the data traffic) and a non corresponding increase in revenues. The increase of traffic (in Italy doubling every 6 months in the wireless area, every 18 months in the fixed area) requires increasing investment hence the stable (or decreasing) revenues is not sustainable.

Is this a phenomenon that requires a change in tarifing? Would an increase in price lead to killing the increase in traffic and eventually depress the market (the only outcome would be a stop to investment in network upgrade)? It is unlikely that an increase in price will result in an increase in revenues.

The problem is that present Operators margins are very high (this does not imply that they can reduce price and sustain investment and financial demands), with respect to most other sectors, hence there is still a wide berth for revenue compression through competition among existing players and entrance of new ones in the game. As this takes place, the offer of capacity is bound to increase more (at least in the fixed line area, but within 5 -10 years max also in the wireless area), and this leads to further undercut of price and margins.

It can be expected that the growth of traffic (particularly the growth of usage as social and productive fabric) will “de facto” impose the existance of the infrastructure and when private industry will no longer be able to sustain it the State is likely to take over, one way or the other.

Discussion at the PSIRP meeting I mentioned in a previous post pointed put a sort of paradox the future of network design is facing.

Architectures trends are towards become flatter and flatter, decentralised, on the other hand biz requires control and centralization. This is a clear departure from the past and it is what creates the problems biz is facing.

Technical solutions create markets, markets need to be understood since they create forces that impact the viability of technical solutions hence there is a need to extend technical evaluation.

Design alternatives need to be evaluated function by function. Technical constraints might restrict the set of possible choices and socio economic factors further impact their viability. Add to this the alternatives for partnership, standard choices and implementation effort and it turns out there is a very limited set of possible choices for implementation.

Solutions create opportunities and threats for existing and new players so one has to understand implication, deployment and changeover strategies.

This creates a sort of paradox: the network is getting flatter and flatter and at the same time transparent, independent of the services it carries but in the other hand if one could design the network taking services into account one might end up with quite different network architectures that would require significantly less investment.

The previous discussed paradoxes bear to the most important inconsistency (at least from the Operators point of view), the revenue paradox: “the more the network is used, the less it produces revenue”. Currently, users can take advantage of very interesting bundles of service offerings. Many Operators are providing bundles in the shape of “all you can eat”. This means that users pay upfront a fixed amount of money and they can make unlimited national (but for certain plans also international) calls. Also for the data connectivity there is a trend towards flat rates, and in this case too the price of megabit per second is declining very rapidly. Any investment in the network is going to provide little “ROI” (return in investment) because users do not perceive too much value on any network improvement. An example is the continuous increase in the bandwidth provided to users by xDSL. Any further increase in bandwidth can require huge investments in the network in order to augment its capabilities (i.e., moving from xDSL solutions to the fiber to the home one), but for the end users there is no reason for paying more the additional capacity (even if the bandwidth doubles). In other words users are not going to pay proportionally any increase in bandwidth and the price for any megabit transported is going to progressively decrease (while keeping the ARPU stable or even decreasing).

In this context many Operators are called to invest on new (and expensive) access networks for providing broadband connectivity (the replacement of the copper with fiber, for fixed network; and the Long Term Evolution mobile broadband). In this paradoxical situation it is hard to make decisions and planning for the future.