Lunatic Thought

Internet Thought: OECD publishes (my) paper on Fibre

noreply@blogger.com (Rudolf van der Berg) — Fri, 04 Apr 2008 16:18:00 +0000

Over at Internet Thought: You can find the links to the OECD paper on fibre networks that I wrote last year. I has finally been published :-) BTW update the RSS-readers, Internet Thought is where it is happening now! :-)

Internet Thought: Moving graphs of OECD broadband penetration

noreply@blogger.com (Rudolf van der Berg) — Tue, 25 Mar 2008 11:51:00 +0000

I used the OECD stats on broadband and pc use to make a graph moving through time. I use Google spreadsheet and apps to do this. Look at my new blog http://internetthought.blogspot.com

No Broadband means no Mobile Broadband

noreply@blogger.com (Rudolf van der Berg) — Tue, 18 Mar 2008 16:21:00 +0000

over on Internet Thought I posted on why if you don't have Broadband in a region you will not have mobile broadband either.

Two FTTH projects fail and more trouble in The Netherlands

noreply@blogger.com (Rudolf van der Berg) — Mon, 17 Mar 2008 10:46:00 +0000

Two projects supported by Reggefiber have had to face defeat. Both were unable to reach the required sign-up rate for the project to commence. See more at my new blog Internet Thought

Free announces stellar numbers, but why is FTTH capex so high?

noreply@blogger.com (Rudolf van der Berg) — Thu, 13 Mar 2008 08:22:00 +0000

Go to Internet Thought for the numbers

Internet Thought: Misconceptions on interconnection

noreply@blogger.com (Rudolf van der Berg) — Sun, 09 Mar 2008 22:31:00 +0000

Please go here to find my rant on interconnection Update your RSS accordingly

New Post at Internet Thought on submarine fibre

noreply@blogger.com (Rudolf van der Berg) — Sun, 09 Mar 2008 21:11:00 +0000

Move your RSS feeds (all fifty of you) I'm now posting at Internet Thought :-)

What Submarine Fibre costs

Pretty soon I will be the Submarine fibre blogger if my posts continue the way they do. However I found a very interesting quote throught the ITU's/Strategic Policy Unit Blog. They link to an article in Business Daily Africa, which shows the costs of running the TEAMs project (wiki entry), to run fibre to the east of Africa. Those joining in the project expect an Internal Rate of Return of 32.71 per cent with a pay back of 2.4 years. Not a bad return for a fibre that's supposed to last 25 years. Current prices of connectivity are $5000 dollar per month (satellite only I believe) and the government hopes to go to $500/month in a couple of years. Though UUNET says this can't be achieved.

Last Post! Moving to Internet Thought

noreply@blogger.com (Rudolf van der Berg) — Fri, 07 Mar 2008 21:43:00 +0000

After years of using Lunatic Thought, it just started to sound really lame. I'm no idiot.. no raving lunatic and not really funny either. I just do internet and telecoms on multiple levels. So here it is: Internet Thought! Everything is the same, just the name is different, so update your RSS feeds! (I'll crosspost for a while and take some interesting posts here.)

OECD Workshop on Fibre Investment and Policy Challenges, Stavanger, Norway, 10-11 April 2008

noreply@blogger.com (Rudolf van der Berg) — Thu, 06 Mar 2008 19:41:00 +0000

The aim of the Workshop is to examine fibre investment across the OECD and look for best practices across a range of investment scenarios. The Draft agenda of the Workshop is available in PDF format. Yours truly will also give a presentation with the title: Dig or wait: Is now the best time to roll out fibre? (Funny thing; they already have the title. I haven't even started making the presentation yet) Oh well, I don't need to find a catchy title ;-)

My session will be: Investment opportunities and challenges
The investment session will look at the opportunities and challenges facing existing communication operators and new market entrants (e.g. utilities) as they work to expand fibre coverage. The session will evaluate situations where investment makes economic sense for private firms and other situations where governments may need to play a more active role. It will look at the track record of various public/private sector partnerships and attempt to find some effective recommendations.

OECD on Global Opportunities for Internet Access Development

noreply@blogger.com (Rudolf van der Berg) — Tue, 04 Mar 2008 10:54:00 +0000

The OECD published a great interview with its senior economist Dr. Sam Paltridge on Global Opportunities for Internet Access Development. He also wrote a paper on the subject which is a great read. Some snippets that I liked alot

Q.What role do Internet Exchange Points (IXPs) play in the creation of Internet service?
Name withheld

A. IXPs are places where different Internet networks can physically interconnect to send and receive traffic between their networks. Following the commercialization of the Internet they rapidly spread around the world to enable service providers to economically and efficiently exchange traffic locally.

In the absence of an IXP, in any country, local traffic between two service providers will by and large be exchanged internationally. In these cases an email sent from one user to another, in the same country but using different service providers, may be routed via an IXP in New York or Paris rather exchanged domestically. By way of contrast, if that traffic is exchanged locally it can be far less expensive (i.e. avoiding expensive international circuits) and provide better performance for users (e.g. in some countries avoiding satellite circuits with their inherent delays).

Some 90 countries don’t have IXP’s today. There is a map created by the Packet Clearing House which keeps count of countries with and without an IXP: https://prefix.pch.net/applications/ixpdir/summary/
IXPs are relatively inexpensive (e.g. less than USD 40 000 per IXP) to establish and can benefit all stakeholders. For less than USD 4 million each country of the world without an IXP could have one.

Such expenditure, for example, in the form of development co-operation, however, would only make sense if the conditions are in place to enable the IXP to operate efficiently and become industry driven. The main challenge is often is creating awareness of the benefits of IXPs.

and from the report
The next several billion Internet users represent a commercial opportunity rather than a burden and this should be reflected in policy approaches.

Liberalisation of communication markets focuses competitive forces on the expansion of access and affordability for the poor as well as promoting innovation applicable to local circumstances as highlighted by the recent experience of some Asian and African developing countries. Improved access and lower communication costs generate general economic and social benefits. Historically, in markets typified by monopolies and little momentum for access growth, the cost of reaching and maintaining service to low income users was not sustainable.

And on Page 12 there is a explanation of Jipp's Law which used to mean that countries could over and underinvest in telecommunications and which was used to keep investment low and prices high in accordance with the development of the economy in that region.

and on interconnection it sais:

MPP and CPP markets have both exhibited strengths and weaknesses relative to each other in thedevelopment of wireless markets. Both have shown capabilities for innovation and growth. A number of open questions for the future relate to how will both models will deal with convergence with the Internet.Will one model, for example, prove more adept at fostering innovation at the interface with the Internet? How will financial flows between countries be affected by the different termination models? Will one system lead to greater integration in service offerings between countries or networks with the same termination model irrespective of geography? Finally, if termination rates are about compensating networks for costs what explains the vast differences between charges and how will this impact on the competitiveness of countries with high termination rates?

All in all it is a must read on development of networks as it covers many angles on the subject from submarine fibre, to IXP's, to interconnection

idea #1880: Graphical network configuration by drawing visio like drawings

noreply@blogger.com (Rudolf van der Berg) — Fri, 29 Feb 2008 22:11:00 +0000

Just posted this to the Ubuntu Idea Brainstorm site. You can dump all your brilliant ideas for how an Operatings system (like Linux of Windows) should work and they will see if they can build it into Ubuntu Linux. My idea is number 1880. This is really where open innovation starts. Listening to all the good ideas of the users.

I want to be able to graphically design and/or check how my computer connects to the internet and to other pc's devices in range/on the same network.

Say I'm sitting at home, small home network 4 pc's two wired, two wireless, one pc has printer attached, printer on wireless etc. I would like to be able to draw a visio diagram of what the network looks like and later on be able to check the diagram how it is functioning and if something changed.

So literally I would like to be able to draw a diagram showing my laptop, wireless link to wireless access point, access point wired via 100mbit ethernet to DSL modem. DSL modem is four port switch. Connects to 2 other pc's. One of these pc's is connected via USB to a printer. The wireless access point has a USB port, which has a USB storage attached. Than the system should just be able to figure out where I do my backups, where it can print, how it can connect to the internet etc.

This was something I discussed with Colleagues in an all windows environment this morning. One of my colleagues had trouble configuring the printer. He wanted to tell the computer to connect to "that" printer "there". This required a string like \\foo-bar-boo\baf\boom\bang-123. All he wanted to see was a diagram of the building we were in, go to the sixth floor, see the printers on the lay out and click the left printer on the east wall.

Oh yeah, not even Ubuntu user... just wished all networks could be configured like this.

T-Mobile to sell Orange Broadband, no FMC then.

noreply@blogger.com (Rudolf van der Berg) — Fri, 29 Feb 2008 15:24:00 +0000

Interesting news. Telecompaper is reporting that T-Mobile will sell Orange Broadband in the Netherlands. They said so in their SEC-filing. They got the broadband division with the purchase of Orange Mobile and there was an idea in the market that this would give T-Mobile a presence in both the fixed and mobile market. It turns out that Fixed Mobile Convergence is of no interest to T-Mobile and they are shedding the department.

Maybe Free can buy it and add some 'joi de vivre' to the Dutch market.

Terminate terminating fees: EC Interconnection report released

noreply@blogger.com (Rudolf van der Berg) — Fri, 29 Feb 2008 08:01:00 +0000

The WIK institute has released a paper on "The Future of IP Interconnection" written for the European Commission, by Scott Marcus, Dieter Elixmann and Kenneth Carter. I know Scott and Kenneth as some of the smartest people in the business (Dieter by association must be as well :-)

I just read the Executive Summary and it is a joy to read. I can hear the gnashing of teeth in the boardrooms of the GSM companies already and they would do right to oppose it everywhere they can. (The GSMA already has the a very low quality report on the subject) In my previous job I tried to set this on the agenda and it was interesting to see how NRA's and competition authorities haven't yet thought about the problem. This will give them much to think about .

Currently interconnection with a mobile network is an expensive affair with extremely high terminating costs. These costs in no way reflect an economic or technical reality, but they are very beneficial to the industry. They stop anybody from competing on price, by setting a limit to the price per minute. (Equal to termination costs *(1-market share)) If you price below that limit every call the customer makes will loose the telco money. This is a great way to keep prices high, competition limited to non-price items and since termination fees are set by the regulators telco's can say that it's not their fault. It's a great model from a telco point of view: No price competition, regulators that have to take the blame for setting the fee, difficult economic models that can be attacked on all sides and best of all when you stand to loose money you can try and manipulate the system to bolster your business.

The internet world works with a different model based on peering and transit agreements and no requirements to pay terminating fees. It has some very interesting effects. The price setting of one telco has no influence on the price setting of another. It also means that there is no terminating monopoly, therefore no need for regulators to step in. There is a dynamic market for transit and because of that prices continuously drop. From the point of view of a telco company this is not a very good model, since it introduces competition on price. This might lead to losses, bankruptcies and all that stuff. In the internet world you actually have to know what you're doing or you might lose your business.

The report "The Future of IP Interconnection" has the following edited for size conclusions and recommendations:

For reasons explained more fully in the report, it is clear that current CPNP arrangements already have a substantial negative effect on welfare, especially for the mobile network, in a number of respects:
• They tend to lead to inefficiently high wholesale termination fees, even when the fees are regulated;
• High wholesale mobile termination fees in effect create collusory incentives to maintain high per-minute (mobile) retail prices;
• The high retail prices depress use of the service to levels far below those that are efficient, and may in some cases depress use below the level of efficient monopoly price for the operators as well. CPNP systems with high mobile termination fees may tend to drive faster take-up of mobile services, which can be positive in developing countries; however, with minor exceptions, further stimulus to mobile adoption for the EU27 is not needed.
We conclude that CPNP arrangements are already problematic today.
We do not advocate an interconnection obligation as regards IP data traffic in general, and we do not see a need to mandate any-to-any peering; however, NRAs must be able to intervene if interconnection breaks down, especially where this is a manifestation of some form of market power.
Independent of the migration to NGN, we think that societal welfare would be substantially enhanced if mobile termination rates were much lower than they are today, and possibly no higher than the rates that prevail today for fixed termination rates. This could be implemented by (1) accelerating the speed with which the maximum call termination rate declines from year to year under existing CPNP arrangements, so as to reasonably quickly achieve levels much lower than those that pertain today; or (2) by requiring all fixed and mobile operators to eliminate call termination fees altogether; or (3) by permitting negotiated termination fees subject to an obligation that the fees be reciprocal (the same in both directions) between each pair of interconnected (fixed or mobile) networks.
What we concretely recommend instead is that the Commission mandate that fixed and mobile call termination rates “fast glide” to prespecified target levels over a predefined number of years (somewhere between three and five).
What we concretely recommend instead is that the Commission mandate that fixed and mobile call termination rates “fast glide” to prespecified target levels over a predefined number of years (somewhere between three and five).

One thing I partially disagree with is what they say on Net Neutrality.
"In regard to network neutrality, we do not advocate major regulatory initiatives at this time. We see merit in the use of Articles 20 and 22 of the Universal Service Directive to require ECSPs to document their practices as regards blocking access to services or degrading the quality of access to services. There may also be merit in enabling NRAs to mandate a minimum quality of service, as the Commission has proposed. NRAs and NCAs need to be prepared to address wilful deviations from network neutrality, especially where an element of economic foreclosure appears to be present; however, the existing regulatory framework for electronic communications probably provides adequate tools, and competition law provides additional mechanisms."

I agree with them that their should be no heavy handed etc. But I do think that the current regulatory framework needs to be tweaked in order to deal effectively with violations of Net Neurtrality. Currently only telco's can appeal to an NRA when something nefarious is happening on the networks. Furthermore it's unclear if the NRA has a stick to hit with, since it can only require parties to negotiate. I therefore belief that we should have a rule that gives NRA's a stick that they can use in case something bad happens and the market can't solve it itself.

All in all, great read and let's see what kind of opposition it will draw.

Google buys trans-Pacific submarine cable Unity

noreply@blogger.com (Rudolf van der Berg) — Tue, 26 Feb 2008 09:10:00 +0000

Gigaom is reporting on Google buying a share into the Unity submarine cable. Many people will read into this an attempt by Google to become a telco or do anything out of its current layer 7 service and application business. I don't belief it is, it's just simple economics. Google now buys wholesale capacity instead of retail. My reaction on Gigaom was:

One of the main drivers for wanting your own fibre on certain submarine routes is the pricing strategy of the owners of the submarine fiber. Traditionally these fibres have been owned by incumbent national monopolists. Their pricing was set at a fixed price per Mbit/s. If your banndwidth utilisation grew, their income grew too, though their costs didn’t, leading to excess profits. On the Transatlantic route this problem has been solved by having an oversupply of commercial competitive fiber. The oversupply resulted in a situation I call mutually assured destruction, where everybody went bankrupt and whole networks were sold for pennies.

On the Pacific route it’s mostly incumbent national monopolists owning fibre and they probably have learned from the Atlantic disaster. This means prices don’t drop (or not as quickly as traffic growth) and that means that some parties see an increase in their traffic costs. Google now has solved this by joining a club of submarine fiber owners and not having to worry anymore about the cost of a megabit/s. Google just has to worry about when they will fill up their terabit chunk and when someone will slice through the fibre.

BTW I’m willing to bet Google will join another club on this route to add some much needed redundancy.

An Anchor cut Flag Falcon between Dubai and Oman

noreply@blogger.com (Rudolf van der Berg) — Fri, 08 Feb 2008 07:43:00 +0000

There are a million conspiracy theories around about the submarine fibre cuts in the Mediterranean an Middle East. Flag Networks has a status update on the repairs on their website. The status update for the Falcon cable between Oman and UAE shows a picture of the 5-6 tonnes anchor that cut the cable. No pictures of Navy Seals, dark submarines, Osama bin Laden or Ninja's. It all may just be bad luck and stupidity.

Both cables will be repaired by Sunday!

What I don't get about Google

noreply@blogger.com (Rudolf van der Berg) — Thu, 07 Feb 2008 21:34:00 +0000

Google is one of my favorite webcompanies. And why not, they make brilliant products. Yes privacy is a concern, but they have proven to be true to their motto of don't be evil. However there are several things I don't get about them.

- Why have Blogger, Google Analytics, Adsense, Adwords and Feedburner and not integrate them into one convenient package? Why do I have to configure different things at different locations. Integrate and make it easy, so that uptake is high etc. --> why can't I see which pages/topics yield the most money in Adsense? (Though in my case the Agpo Nev 124 is still very popular and I will not write about it again)

- Why is it so hard for Google to understand that I search and read in two languages: English and Dutch. Fix it so that I can get a mix of Dutch and English results in search and especially News, mixed with really high ranking other language results... At the moment either the first ten are English or Dutch and that means I have to do two searches instead of one.

- Why don't all Blogger posts have automagic trackback links or something of the kind. Google knows who links to my blog, please fix that

- Why doesn't Google integrate its feedreader with a Delicious like system. I share items already and that should be enough... (tagging and starring is not for me)

- Why hasn't Jotspot come back unto the market? You bought it... now give it back, it was a great wiki system.. though Socialtext and Confluence are excellent too!

- Why hasn't Google become the default yellow pages yet... They have the technology, but searching for businesses on Google Maps still yields funky results. (at least here in .nl)

- Why do several Google products feel rough around the edges? they are brilliant, but just need hat extra 20% to be finished. (sounds like some of my papers and ideas, I know its not fun to do the last 20 percent, but it does make it better for the user)

- Why doesn't Google build more office productivity applications... Please help the workplace to move forward. There is so much data in an organisation. A couple of Google boxes with cheap apps that help us organize could make a real difference.

- Why haven't the implemented my idea for Google Adsense for Charities yet?

- What is the status on my last wish list for Google?

- Why are there no blogs/forums/trackers where we can freely dump our feature requests and see status updates?

What do you miss?

Any points I have forgotten?

KPN, 3 and Play drop data roaming charges. It's cheaper to use VOIP

noreply@blogger.com (Rudolf van der Berg) — Thu, 07 Feb 2008 14:19:00 +0000

KPN, 3 and Play have dropped the data roaming charges between their networks to 25 cents/Megabyte. That's great for their customers roaming in the UK, Germany, Belgium, Poland etc. So how many seconds of VoIP does this buy you? A VoIP stream is between 10 kilobit per second and 90Kb/s. This translates to between 90 and 800 seconds. Given that the price of a roaming call on the mobile network has been set at 49 cents per 60 seconds and receiving at 24 cents/minute, it seems that it is now officially cheaper to use VoIP for mobile roaming!

Put differently: any (VoIP like) stream of 266 Kbit/s or 133 Kbit/s is now cheaper than a GSM call of 9600 bit/s.

There must be a catch here. Telco's are never this afraid of mrs. Reding and this is not a competitive market yet!

Submarine fibre cables and public policy

noreply@blogger.com (Rudolf van der Berg) — Fri, 01 Feb 2008 22:38:00 +0000

Three cable breaks in submarine cables in one region in one week. It's enough to get the conspiracy theorists going. For me it's the trigger to write down some ideas I've been having on submarine fibre optic cables. I'm going to argue that nations need more/different connectivity than the market can provide, that therefore it will need to be treated as a public good and the pricing will have to be set accordingly.

In an information society fibre optic cables are the nerves that keep the country moving. You need them in your country to every extremity (house), but you also need them from the country to the rest of the world. No fibre, no information society. The flow of information enables the flow of goods, money, people. For a significant part of the world this flow of information is a Single Point of Failure (SPoF). Most countries have only one cable coming into the country. The only backup is satellite, which is due to latency and a limited bandwidth is so 1970. If your country is not connected to the world via fibre, you're still living in the seventies.

The dependency on a handful of fibres for international connectivity (and trade) should make fibre as important as oil and gas lines or airports. So how many do you need. Given the risks involved one would want at least 3 different lines on different routes coming in and out of the country. The routes should be undersea, because these tend to be less prone to damage than the ones over land. There are more idiots with backhoes than boats. (Yet another reason not to want to be a landlocked country) And that is where the first problem lies: How do you get three international routes of the more expensive kind to almost every country in the world Currently most lines are Trans North Atlantic or Trans North Pacific. They run from rich country to rich country, poor country to the north and never south-south. A redundant network would look much more like a web, instead of a like spoke and hub system it now is. Unfortunately fibre follows money. South America is connected to the world via the US. Africa via Europe. Asia- Europe mostly goes via the US. In an ideal situation South America would have multiple direct links with Europe, Africa and Asia via both the Atlantic and the Pacific. And Asia and the Middle East wouldn't send all their traffic over the US or the Suez Canal.

The trouble is money. Long distance undersea fibre is expensive: hundreds of millions and even billions for the fibre, but only a couple of million a year for operational expenditure. But making money when multiple submarine fibres compete is almost impossible. A submarine fibre has the capacity to carry 7 terabits/s these days and more is becoming possible. So you've got an instant oversupply of capacity. Multiple competing lines lead to competition on marginal costs and mutually assured destruction. This has happened on the Trans Atlantic route where there were several new entrants in a few years, while one fibre was more than able to carry (almost) all Europe-US traffic. The price of traffic dropped to whatever sales could get per mbit/s instead of how much they needed to pay the banks. Bankruptcy was assured. Bankrupt networks were bought for almost nothing and kept prices low, which killed the business for the initial winner, which led to the winner becoming a loser too. Mutually assured destruction it is.

The high investment in northern routes has made the US, Europe and South East Asia the natural hubs for traffic to less connected regions. A telephone call to Europe from South America is cheaper when it runs from South America to the US and then towards Europe. A more direct connection might be logical and redundant, but the low prices on the north Atlantic route are a cheaper alternative than going direct. At the moment there is only one direct connection from Brazil to Europe. If you look at the fibre map: a lack of fibre is clear in South America, the Indian Ocean and Africa.

When it doesn't make economic sense to have fibre going southern routes, because its cheaper to route it over existing northern routes, there might be a reason for the government to step in. Security in the supply of connectivity can be regarded as a public value. The trouble is: how do you price it. If one fibre route can substitute others, the result might be that all traffic will flow over the cheapest one, leaving the others empty. Another problem may be that governments (and their monopolist telco's) tend to collect monopolist rents from international connectivity. Africa's lack of connectivity is as much the result of the general poverty as it is of its monopolist telco's, who keep international connectivity expensive to finance corruption and inefficiency. The price per mbit/s stays much the same in many countries, but demand increases every year, leading to ever increasing profits and a much lower economic growth than would have been possible. It would be preferable that the monopolist is paid a fixed amount for the fibre and every month or every quarter set the price on the basis of the volume in the preceding period. Since traffic is growing at a rate of 50% in most countries, prices would drop with 33% per year accordingly (see graph for price (green) vs volume (red).

There are two solutions to the connectivity problem. One is outright government financing of submarine fibres. Pay for them the way you do with bridges and roads and write it off in one year. (If necessary work together with neighboring countries) The cost of connectivity would then only be in the costs of operation. Since operational costs are only a small fraction of the total costs, the price of connectivity could be very low. Another option is to use a revolving fund where the income from writing off one line is used to finance a second one. It would then be possible to combine the costs of submarine fibre and to have the more popular routes subsidize the less popular ones by adding the total costs of the fibres and spreading the costs equally over the users of the fibres. Neither is perfect. They may lead to adverse effects like, suboptimal routing, freeriders, bankruptcies in of commercial networks etc, because the price might be below the market price in other regions. The latter one might also suffer from being too expensive at first and therefore stifle growth. All in all it's not an easy problem and I don't have a perfect solution. However from a public policy perspective it can't be a good idea to have your nation dependent upon only one piece of glass with the thickness of a hair.

BTW for nice pictures of a Cable ship see my blog entry of a week ago.

Structural Separation?: CAIW cable bought by Rabo real estate/infra fund and management

noreply@blogger.com (Rudolf van der Berg) — Wed, 30 Jan 2008 10:34:00 +0000

Interesting news. The Dutch cable company CAIW has been sold to its management and Bouwfonds Asset Management (Rabobank's real estate division). The commercial part has been sold to the management and the network has been sold to Bouwfonds. This sounds like a structural separation between the network and the commercial part, where the commercial part will rent hte lines from Bouwfonds and Bouwfonds sees this as a long term investment with fixed margins. It's not clear from the press release how the structural separation will be achieved, ie will Bouwfonds just own the passive cables or also part of the active infrastructure and/or will this be only be a legal separation and will the operation remain the exact same.

From what I can gather from the financial documents the sale price was around 190 million Euro for 150k subs or 135000 houses (110 million in net profit for the municipalities, but there was 83 million in long term debt), which would translate to about €1250 per sub. (Not Cheap! with a profit of 4.3 million) Unfortunately it is unclear to me how much was paid for the network and for the commercial part separately.

I still find it very interesting because this is a clear example that there is money in infrastructure and investment firms do like long term investments in network infrastructure. CAIW has also shown itself to be innovative and has already invested in fibre networks for both business and consumers (Naaldwijk)

Fibre optic cable laying vessel Tyco Responder in Curacao

noreply@blogger.com (Rudolf van der Berg) — Tue, 29 Jan 2008 08:27:00 +0000

In December I was on Curacao for my wedding. In the city center I got this telecommunications treat: The Tyco Responder floated past us into the harbour of Curacao. This ship lays and repairs fibre optic cable in the Caribbean. These ships have made the internet possible. Imagine if you would still connect to most of the world via satellite..... If you ever want to know about the business of laying cables, read Mother Earth, Motherboard by Neal Stephenson. (Unfortunately the image is a bit blue because of a wrong setting on my camera)

Reding: Blame it on the National Regulators

noreply@blogger.com (Rudolf van der Berg) — Mon, 28 Jan 2008 15:29:00 +0000

Ai Frau Reding has the audicity to blame the national regulators that they haven't brought mobile data roaming tariffs down!

Wasn't the problem that national regulators were incapable of bringing down these rates, because the rates were high at the wholesale level and therefore out of their jurisdiction (a foreign mobile operator was the problem). Wasn't it the case that our friends from the Commission therefore had to set the roaming rates? Wasn't it the same Commission that didn't want to regulate data roaming, but saved it for a later date?

Come on Frau Reding, you could have fixed this last year, don't blame it on the national regulators! Or is this all a scheme to get the Euro Uber Regulator (EECMA) in place?
Even better fix mobile roaming by introducing competition. Give all operators including MVNO's the option to offer access to anybody roaming in the country and require that the home operator is only allowed to charge a small percentage for the billing. For this see my previous entry.

European Telecom Market Authority (ETMA aka EECMA) a threat to checks and balances in the EU

noreply@blogger.com (Rudolf van der Berg) — Thu, 15 Nov 2007 21:09:00 +0000

The proposed European Telecom Market Authority (aka EECMA or European Electronic Communications Market Authority) is an utter disaster for the democratic functioning of the EU and the balance of powers in the EU. It will:

not address the fundamental problem of an imbalance in power,
increase the lack of democratic oversight of telecommunications decisions at the EU level,
seriously devalue the role of national regulators ,
ruin the quality of rules and regulations and finally,
there was no demand for it.

I will try to sketch the context and the formal situation first and than explain how it works in practice, then why the new European Telecom Market Authority will have the negative effects that I suspect and lastly what I think needs to be done.

Context
As you may know, the EU proposed changes to the current telecommunications regulatory framework. This framework is the basis for the telecommunication laws in each of the EU member-states. The current framework is quite good, certainly compared to eg. the US telecommunication laws, but a review has been held and some proposals have come from the Commission. Most of it is evolutionary and not revolutionary. There is however one controversial proposal, which is the European Telecom Market Authority.

The proposal
The EC propose to establish an organization of about a 120 people reporting to the European Parliament and tasked with:

"ensuring that the 27 national regulators work as an efficient team on the basis of common guiding principles;
delivering opinions and assisting in preparing single market measures of the Commission for the telecoms sector;
improving the accessibility of telecoms services and equipment for users with disabilities;
monitoring closely the use of the single European emergency phone number, 112, and identifying remaining obstacles;
facilitating cross-border EU services in relation to rights-of-use for scarce resources such as spectrum and numbers, and enabling operators wishing to do so to use a single European area code for their services;
addressing network and information security issues."

The Commission is of the opinion that we need such an organization, since the national regulators (NRA) in the member states haven't all been swift, consistent and effective. This is undeniably the case and some in cases nations have just been downright horrible and wrong, like Poland, where the deputy minister was head of the independent regulator and Germany with its Regulatory Holiday for its poor incumbent Deutsche Telekom, which is building something that uses VDSL2, but is a service instead of a network and therefore according to the German regulator not subject to regulation. However, member states getting it wrong doesn't mean the Commission/ETMA should take over and even less that it would be good at it.

The Current Situation
A longer description can be found here. Currently when a national telecoms regulator issues a ruling it has to notify this with the Commission and the Commission can then raise "Serious Doubts" or even Veto a ruling. The Commission has nothing to say on the actual remedies, though it would love so. Now when serious doubts are raised the NRA will have to consider those and take them into account into its ruling, if the Commission is still not happy, than it can veto the measure. If the NRA is unhappy, it can go the European Court of Justice and wait 4 years for a solution. Also the European Regulators Group (ERG) can be asked for an opinion to advice in a dispute between NRA and Commission.

Reality
Reality has a tendency to be different that what you read in the law. I've taken to game theory quite alot lately and laws are the rules of the game, but they don't explain how the game is played in reality. The current game is unbalanced and completely tilted towards the Commission. What happens is the following:

The Commission comes asking what your proposed regulations are. It will then informally and verbally tell you what is wrong and that you need to fix it. At that moment civil servants NRA's and ministries internally will have a serious problem already. Directors want something fixed, ministers are wondering what parliament will think.
The Commission will also want to see the proposed remedies, regardless of the fact that they are not allowed to rule on it. If they don't like the remedies, they will not like the ruling. <\
If the Commission raises 'Serious Doubts', the press will be informed. There might be an official point of view, but informally it's a spin war. The Commission answers to no one. The NRA and national government will have to fight of the press and parliament. The press figures that the government is wrong from the get go and in parliament the opposition is having a field day. At this point most political figures will buckle and give in to the Commission.
If the Commission vetoes the governments decision than the government is in big problems. The minister clearly has failed, the NRA is incompetent. This will result in debates in parliament and again politicians will cave in.
The internal discussions within the Commission on the subject can reflect national and EU-level political discussions to such an extend that it is hard to distinguish between reason and politics.
The ERG can be asked for an opinion, but the Commission is not bound by it and it caries little political weight. It has a tendency to side with the Commission when the Commission is very clearly correct (eg. Germany Regulierungs Ferien) and only sometimes against the Commission, when it is clear the Commission is wrong. In the former case the Commission will cite everywhere that it is right and cite the opinion widely. In the latter case the Commission will brush of those incompetent NRA's.
A government will not have any place to go until a final ruling by the Commission. When there is a ruling it can stand in line at the European Court of Justice, which is a group of intelligent but very slow judges. It currently takes 4 years to get a ruling.

So there you have it. A NRA can be right, but in order to be acknowledged as right it takes 4 years. At which point the ruling is irrelevant. In the mean time there is a stale mate or worse the country issues the ruling according to the decision of the Commission and just continues the lawsuit out of principle. So should you wonder why NRA's and Commission often agree, there you have it.

The fundamental problem
The fundamental problem of telecoms regulation in the EU is not incompetence at the national regulator as the EC claims, its the inbalance in power, partially caused by the long time it takes to appeal a decision of a nation and the difference in context a NRA operates in compared to the EC. The ETMA will not solve this problem, but only will make it worse.

ETMA will not be under the oversight of the Commission, but will report to Parliament. There is however no mechanism to prevent the Commission meddling heavily into the operations of ETMA. ETMA can now deflect any direct attention away from the Commission, while the Commission can still run it from a distance. This gives the EC more power in a subtle way. It will not improve the position of the nations, because for an appeal they still can go to the ECJ in Luxembourg. So you got a perpetrator, a fall guy and forever to wait for justice.

Increasing Democratic oversight
As said in the previous paragraph, ETMA will deflect attention away from the Commission, giving the Commission more power in a more subtle way.Parliament is toothless vehicle, because it cannot dictate what ETMA will do, just oversee that it is doing something. The European Parliament just isn't equipped to deal with direct intervention of the Commission in ETMA. Normal ways of indirect democratic oversight of the Commission is also out of the question. These ways are normally barterring and bribing, because the Commission needs the Member States on other issues. The Commission is now impervious to barterring and bribing, because it can deflect any just criticism towards ETMA. Now barterring and bribing are already bad, but this doesn't add oversight, just an extra layer of confusion.

Devalue the role of national regulators
The Commission will use ETMA to lay down dictates of how to regulate. It will require each nation to do exactly the same as elsewhere, regardless of the local situation. Yes the EC will tell you differently, but the Commissions actions against The Netherlands on the cable sector will show you differently. The Dutch cable sector is different than anywere else because of having 98% homes passed and 95% of the people subscribed to analogue and/or digital tv. Knowing this, national regulators will be wiser than to "Think Different". They will auto-conform without ever considering a different option.

Injure the quality of rules and regulations
When conformance becomes the rule, regulators will loose the appetite to properly research their national markets and identify proper actions in line with the national situation. This will make both the Commission and the NRA complacent. The Commission will argue that it's always right because everybody follows it, through ETMA of course. The NRA's will go grow complacent by just copying ETMA.

Lack of demand for ETMA
There is no clear demand for establishing an ETMA with 120 people. These people are going to do stuff already done in the Commission and at eg. ENISA at the moment. Chances are that it will be all new people, who will duplicate the Commission's work. 120 people doing nothing will want to do something and that will lead to more meddling, bright ideas, windows dressing, useless reports and infighting.

Solution
A solution is not easy, but would need to consist of these elements:
- Quick dispute resoluton at the ECJ (6 months). This will make the ECJ relevant and remove time as a weapon from the EC.
- Strengthening of the ERG. If a majority of the ERG agrees with the Commission, than the Commission must be right and the other way round. It's hard for any party to broker a deal with 14 nations to get a favorable ERG ruling.
- Strengthening ENISA to tackle security problems, where they are. The problem is not in the network and the cause is not the telco. So establishing a CTO at ETMA will not help.
- Accessibillity and 112 emergency are already done at the Commission. They are not purely problems of the IT sector and could be handled through normal channels of the Commission.
- Cross Border problems should be dealt with by a proposal of the Commission and a decision by the Member states and not by ETMA

In the coming days I will work through the papers more. I hope to have a look at what a provider of electronic communications networks and services is, Net Neutrality and functional separation.

Update November 21st 2007: For a moment I thought I had misjudged the Commission and that ETMA would actually have something real to say. I thought the 27 regulators would have full voting power and that the Commission would be subject to the opinion of the Board of Regulators. But I've read the regulation and it turns out the Board of Regulators can only issue a non-binding opinion, much like the ERG now. So they are toothless fluffy paper tigers, no chance that he Commission might hurt themselves on the Board of Regulators. Oh well, it's good to know the world is still a sphere and pigs don't fly.

Nokia E51 Released yesterday, NO on November 22nd or December 6th?!?!?!

noreply@blogger.com (Rudolf van der Berg) — Tue, 13 Nov 2007 23:05:00 +0000

Well, what can I say... I'm sad. November 12th came and went and there has been no official release of the E51 neither in The Netherlands, nor in the UK. It seems however that you can buy it on Ebay and somewhere in Europe. The guy behind e-series.org has his already and blogs about it.The people of Symbian Review have a review up and love it.

German sites, like Conrad, were reporting that they had it in stock, but now they are reporting that it will be available on the 22 of november. Amazon.co.uk has moved the date up to December 6th. My mr. Fix-it, whose got a good reputation of getting the cool stuff when it's still hot, hasn't gotten his hands on it either. He still has it in backorder. I haven't found a Nokia site yet that sais that it is shipping. There are no press releases either. Nokia Europe has moved the phone to its list of available phones and off the list of phones to be released, but Nokia Germany and the Netherlands both have it listed as "available soon". Most Nokia sites do show a nice promo for the phone, but I don't want pretty pictures, I want press releases and shipped models.

Meanwhile it seems that Hungarians can buy the E51 on the black market already... I interpret the Hungarian euphemisms as: A container full of these somehow got lost and ended up in our shop... that's not stealing is it :-)

FTTH, CCTV and a safer society go hand in hand

noreply@blogger.com (Rudolf van der Berg) — Sun, 11 Nov 2007 23:40:00 +0000

Brilliant article by The Register: Residents of Shoreditch in the UK got access to the footage of CCTV surveilance camera's through digital TV. The pictures were in a grainy resolution as to not allow people to identify individuals, so privacy was kind of protected. The results were: IT'S MORE POPULAR THAN BIG BROTHER! Better still, people wanted more of it and in a higher resolution. The focus group response was: "Focus group feedback indicates the CCTV is helping address fear of crime and... generating major new community vigilance resource."

Now imagine, FTTH everywhere and grannies are working from their home as CCTV camera operators. We'll get those nice, spiffy AXIS cams installed, that work in the daylight and nighttime and can deliver HDTV quality. You could install it as a scheme where those watching get a bonus for every crime they report, or as a new work from home scheme. Whole groups of inactives could be crowdsourced. Actually you could get two or three people watching the same scene independently. If they don't know the others who are watching it could be a great scheme to keep CCTV camera operators honest. If two are reporting something happening and number three isn't that person not doing his job.

At high def 5mbit/s or more this will require some nice FTTH or VDSL2 type of connections. (ofcourse there are ways of conserving bandwidth until such a moment when the operator feels it necessary to get a good luck) The traffic is therefore best kept locally, but that should be no problem, as locally there should be no lack of bandwidth in a VDSL2 world. (Note to the Brittish: this doesn't include you. BT keeps you at ADSL2+ which just isn't good enough to hook all those camera's up to at HDTV and most of you will not be able to watch it in HDTV, since you live too far from the exchange)

Combine it with Google maps and let people annotate the events. Even better, store all the information readily available and searchable for the public. Let them annotate it and they will make everything even more clear. Pretty soon you'll have a complete record of every car that drove by a road. A description of every person that ever glanced at the cam. Let them combine their own pictures and you'll have a transparant society! What the German Democratic Republic (commies) never achieved, we can achieve by using camera's and grannies!

Now just think of it, the possibilities are endless and the great thing is peoples curiosity/loneliness will bring Big Brother upon us, without as much as a complaint. Onwards to the Transparent Society and Big Brother be dammed. If you've got nothing to hide, you've go nothing against this idea! (/sarcasm)

There is no economic basis for QoS

noreply@blogger.com (Rudolf van der Berg) — Wed, 07 Nov 2007 22:19:00 +0000

This was the outline of a paper I planned to write, but for which I just have too little time to get it finished. My main point is that QoS mechanisms in a network are a bad idea (tm) This is generally examined from a technical point of view. The arguments are either generally that we tried it and it didn't work. There is little research on that evaluates the economical side. The little research that there is, generally argues that QoS mechanisms could work if all parties in a communication chain just work together and the reason they don't is because of the lack of incentives. I belief there are several reasons why QoS can't work and why it is a failure of logic.

Introduction

The internet is broken, so we’re told by scientists and standardization bodies. We need a new internet and research at Stanford, Berkeley, Fraunhofer Institute and various European Union programs will fix it. One of the main points of criticism is the internet’s lack of Quality of Service mechanisms to shape and prioritize traffic and to make sure that unimportant traffic doesn’t hurt unimportant traffic. All this in order to give the end-user an optimal Quality of Experience. The ITU has made end-to-end Quality of Service a central element of the design of its specifications for a Next Generation Network.

There is a great deal of attention in academic research on telecommunications networks for Quality of Service mechanisms. It is often stated that without such mechanisms telecommunications networks will not be able to deliver a stable and reliable service. Both from the technical side as from the economical side there is a considerable body of literature on how these mechanisms will work out in the network and in the business models that sustain the network. In order to realize QoS we invest large sums of money in research programs to fix the dreaded problem. Given the amount of scientific papers and research proposals mentioning the absense of QoS as a major problem for the roll-out of all kinds of advanced and mission critical services, how could we not. Everybody says it's important, so it must be important. Except for one minor detail, despite over twenty years of research and various standards and implementations of standards, nobody is using it.

The idea of QoS mechanisms as being essential to the stability and reliability of the network has been at the heart of the Net Neutrality debate. It also rears it head in debates on how to make a sustainable investment in networks and services. The notion of QoS mechanisms has therefore passed the realm of the purely technical and academic and entered policy debates, where policy makers will have to value the various claims.

This paper will examine in a multidisciplinary way the basis for QoS-mechanisms in telecommunications networks from both a network engineering as an economical point of view. Quality of Experience for the end-user is the end-goal of any network architecture and that is where QoS-mechanisms are supposed to deliver. We will show that the use of QoS-mechanisms to deliver QoE is bound to result in failure right from the start, since QoS through shaping and prioritizing is a logically and conceptually flawed concept. It’s a holy grail and a pipedream. These mechanisms cannot work and therefore building either networks, business models or policy on it will result in failure. There is however a simple solution to QoS-problems and that is to over-engineer the network and all the active equipment (servers, routers etc)

What is Quality of Service and Quality of Experience?

Just look it up on the wikipedia. Also look up jitter and lag etc.

What kind of QoS mechanisms are there?

These mechanisms in general take three forms:

- Prioritizing systems, that let packets move ahead of the que based on how high their priority bit is. (like sirens and lights on an ambulance)

- Bandwidth Reservation systems, that guarantee a certain amount of bandwidth over (part of) a link between two points. (like the telephone network that reserved a line between two points)

- QoS enabled routing systems: Routing systems that try to route traffic on knowledge of the state of the network. (like a driver learning of a traffic jam on the route to work and therefore taking another route).

These systems have seen various implementations and all have failed. There are alot of explanations in literature that explain why QoS is not a success. They can be divided into three different classes:

- it's failure of the previous technology, but we will think up a new one that will get it right

- it's failure of economy, bandwidth is too cheap, implementation is too hard (but this will all change, just you wait and see.)

- it's failure of timing, currently we don't need it, because nobody uses the internet for business critical stuff, but the status quo has to change or we cannot do telesurgery etc.

There is very little literature available on whether QoS is actually necessary and whether QoS is actually possible. If all these mechanisms have any chance of working at all.

Many engineers that design the protocols and networks that have build the internet explicitely and implicitely accept that QoS-mechanisms will not work in actual networks. Most sensible engineers don't even want to get into a debate anymore about it.

Actual implementations of Quality of Service Mechanisms

There are currently several QoS mechanisms standardized for use with the Internet protocol.

Diffserv, Intserv, RSVP, MPLS

Categorisering

The conceptual errors that underlie the failure in implementation of Qos mechanisms can be either technical or economical. Technical errors are those errors that make it impossible to design a technical system that answers to all the demands of a QoS-mechanism for it to be technically functional, stable and reliable. Economical errors are those errors that make it impossible to properly implement and operate a network with QoS-mechanisms. The economical errors and technical errors feed into eachother, strengthening each others effects.

Technical errors:

Scarcity in the network is a layer 1 problem. QoS mechanisms are operating in layer 2 to 7. We’re trying to stuff more bits into a pipe than can properly fit. Like trying to put marbles through a funnel. Or put differently, trying to fix a layer 1 problem in layer two or three, by making assumptions on layer 7 traffic and on the real world making use of it.
QoS routing is NP hard
QoS tries to make the pipe more efficient to allow for more traffic. This only works when the pipe is almost full, but not when it’s fully full. In a dynamic system the difference between empty, almost full and fully full is a couple of percentage points. This leaves very little room to manoeuvre
QoS prioritization works on the switches that are in between the two users. On a modern system the time advantage that can be achieved by prioritizing a packet through a switch is x millionth of a second. This is less than x% of the one way time of a route of 100km. We’re trying to solve the lines problem in the switch.
Qos only works if the switches can derive an order in which to treat applications. If all streams have top-priority there is no way to determine which ones should get priority over other ones.
Bandwidth reservation mechanisms are binary. There is capacity that can be reserved, or there is no capacity that can be reserved. This regardless of whether there is capacity available.
It may be a straw that breaks the camels back, but there is a lot more weight wearing it down. Removing the straw or one other object might save the back, but the camel remains heavily burdened. Same in networks. Both big and small flows can break a network. It’s the total that counts.

Economical errors:

A QoS system will have to weigh the demands of all users in order to weigh the highest utility for all. This will require an insight into the utility function of each user and an overarching utility function to weigh the utilities of all users against each other.
There is an implicit assumption that both sender and receiver will value a stream equally high. In any communication, there are senders and receivers. Both have a value for that communication and a value for other communications flows on the same connection. When watching a movie online, the company that broadcasts the movie values the QoE of its customer very highly. It doesn't want the customer to receive a jagged and jittery movie. The customer however is not only watching a movie, but might also be expecting an important phone call or communicating otherwise.
QoS works in a static setting (see technical). However the market is dynamic if its healthy. This will reflect itself in the network as one the main platforms over which market forces exert themselves. One cannot assume a static situation for a QoS mechanism if the data flows will follow market dynamics and grow with growth in population and prosperity (when bandwidth usage decreases, there is no need for QoS mechanisms)
(variation on above) If market is stable (no growth or declining) there is no reason to ration traffic. If traffic is declining the use of QoS mechanisms after a while is unnescessary. if it is growing than after a foreseeable period there is too much traffic for QoS mechanisms to add QoE.
In many business cases surrounding QoS mechanisms there is an assumption that QoS enabled traffic that has been paid for, has a higher value to the user than data that has not been paid for. This sounds logical from an economical point of view if money is an adequate proxy. However it isn’t. Compare a VoIP call that clashes with a pay per view movie. If the VoIP call is about an important subject (birth of child) than it has priority for the receiver, regardless of the QoS level paid for.

Solution
Overengineer the network, so you don't have a situation where QoS mechanisms are appropriate
On end-user connections let the end-user prioritize the traffic to and from him/her. It's the only one that has an accurate view of its utillity function.