Marching Toward a Gigabit #Summit21

“What would you do with a gigabit,” is what GCI is asking of its customers in anticipation of a 2015 roll out of gigabit services via its DOCSIS 3.0 plant. Announced in late March, GCI will be the first operator offering gigabit in the 49th state. GCI’s Vice President of Product Management, Terry Nidiffer, reinforces the idea of a “halo effect” of offering gigabit services, as they have seen approximately 300% uptake on their top-end offerings since their announcement of the higher speed services. Nidiffer also talks about the importance of local caching given the 1,500 mile connection between Alaska and the lower 48.

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5 responses to “Marching Toward a Gigabit #Summit21”

Michael Elling (@Infostack)

June 9, 2014

Questions like, what would you do with a Gig are similar to asking, what would you do with a smartphone in 2006, or what would you do with cheap wireless in 1995, or what would you do with data in 1989, or what would you do with cheap long-distance voice in 1983, or what would you do with more than 7 channels in 1978.

99% of people will respond with a linear answer. They would not answer with a geometric one that relies on 3 forms of price elasticity:
-normal
-private back to public
-application

While the Google gig model in KC is 100x better on a performance price basis than the average mid/last mile model in the US, it still isn’t open access (and therefore not as generative as it could be), and does not reflect additional scale from wireless backhaul/offload, SMB, or centralized procurement of edge bandwidth by large institutions and commercial enterprises for telework, telemedicine, tele-education, etc…

Scaling fiber networks with all this demand we can easily postulate that a gig may not be enough even to many places as we contemplate a future of multi-screen/multi-channel 4/8K video on demand, 2-way HD video collaboration, seamless mobile BB, and the internet of things.

Ken Pyle

June 9, 2014

Hi Michael,

Great analogies. It is along the lines of the quote I saw about Steve Jobs suggesting that if you build what people tell you they want, they will be onto something else when you finally have it built.

Having said that, in today’s world where getting feedback is relatively cheap, it is easier and faster to find the 1% that respond with the non-linear answer. Of course, the real trick is understanding the timing of those applications/products (pundits were predicting wireless telephones in the early 1900s). Still, asking the question is a good way to raise awareness of the offering and what it can do.

To your point, it seems like Gigabit is quickly becoming table stakes for broadband providers. Interesting point about Google Fiber and their focus on residential to the exclusion of some of the business service applications you mention. Independent operators in rural parts are actively going after those sort of applications and find creative ways to work with various partners; given their lower densities, they have to find multiple ways to support the fixed infrastructure cost of their fiber networks.

Michael Elling (@Infostack)

June 9, 2014

Ken,

Don’t get me started on wireless. While I can’t have guaranteed it, the chances for mobile phones by the 1950s would have improved dramatically had the govt and service providers not gone down the path of vertical silos and lack of (mandated) interconnect and sharing of facilities (wired and wireless) 100 years ago under Kingsbury and then further extended/codified into other information monopolies with the 1934 Act. It’s taken us 70-100 years to unwind this failed policy and we’re still wrestling with interconnection and sharing in the last mile as though we don’t have enough proof that it has worked for incumbents and new entrants alike as that enormous demand elasticity revved up.

Think about those 4 trends above and then imagine putting video (1978), voice (1983), data (1990), wireless (1996), mobile computing (2007) together at once and moving rapidly to low cost bandwidth (particularly upstream), reduced latency, improved QoS and security, and ability to provide redundancy and backup all the way to the edge.

This will happen if govt mandates interconnection at the edge, mitigates meddling by local govts and landlords, and supports the development of balanced settlements (aka fast lanes, prioritization, etc…).

We’re talking absolute and relative issues here and confusing them. One issue is absolute high average cost that needs to be driven down to low marginal cost through competition. Then we need to understand relative consumption models and distinguish between high and low volume users. Models where high volume users can take advantage of scale and onboard low-volume users at the edge should be fostered. In fact, I believe that hybrid revenue model will fully account for 50% of total revenue, leaving advertising subsidization, edge subscription, and private solutions to carve out the remaining 50% of a revenue pool that is 3-5x larger than the current one globally.

Viodi View – 06/09/14 | The Viodi View

June 9, 2014

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Ken Pyle

June 9, 2014

Thanks Michael. I like the idea of growing the pie; everyone benefits.

I just did some real simple modeling of a hypothetical Autonomous Vehicle service that is very analogous to broadband and it is, literally, the fast lanes and priortization, that make the model work. The benefits flow to all users, but the biggest improvement in marginal utility seems to apply to those who who rely on public transport.

http://viodi.com/2014/06/02/googles-potential-end-game-transport-and-organize-the-worlds-people-not-just-information/#revenue