2021 started with the Consumer Technology Association (CTA) turning its physical event, the Consumer Electronics Show (CES) in Las Vegas, into a digital event. In February, GSMA made its Barcelona Mobile World Congress (MWC) into a combination digital and physical event. Usually, MWC attracts about 100,000 guests. In 2021, there were about 20,000 participants, of which only 5,000 came from outside of Spain.
GSMA expects to implement MWC 2022. The question is whether the physical part will be much bigger than it was in 2021. Although there are fewer hospitalizations with this wave of COVID-19 variant, more people become sick and need to stay in bed for at least a week. This variant is more likely to affect business negatively, particularly labor-heavy companies. This in turn is quite likely to affect the physical portion of MWC negatively, because unnerved potential convention-goers probably will remain at home.
2022 will continue to showcase that the mobile telecommunications industry plays a critical role in enabling modern society to function. Telecom companies should receive more goodwill and should become better at exploiting it.
Strand Consult’s study of the broadband middle mile showed that rural broadband providers face many challenges in their effort to deliver broadband to disparate customers over large geographic areas. The study creates transparency for policymakers about the cost, level and source of internet traffic. It demonstrates that five so-called Big Streamers account for a disproportionate share of downstream traffic. For every $1 of revenue earned from the five Big Streamers (Netflix, YouTube, Amazon, Disney+ and Microsoft), rural broadband providers incurred 48 cents in middle mile costs (equipment, electricity and labor), which they could not recover from the Big Streamers, end-users or government reimbursement programs.
The Big Streamers have tremendous global market power and ignore broadband providers’ requests to negotiate on cost recovery. Moreover, the free caching solutions proffered by the Big Streamers add costs to networks and only serve proprietary content. Strand Consult observes that there is a pervasive problem of unrecovered cost at the local, national and international levels that threatens sustainability and undermines policy to close the digital divide. In 2022, this problem will have an effect on the forward motion of the broadband segment.
In our opinion, O-RAN is one of the most overhyped technical solutions since the launch of 3G wireless communications in the year 2000. Although the use of O-RAN promises to cut RAN capital expense (capex) by as much as half, it does not rise to the level of hyperbole that 3G would turn radio spectrum into gold. But eventually, it comes close.
In August 2021, Nokia paused its work in the group for fear of violating U.S. restrictions on the many Chinese members. Strand Consult has yet to find an O-RAN proponent who can explain how the prevalence of 44 Chinese companies in the O-RAN Alliance does not compromise O-RAN.
O-RAN is being promoted by industry and governments from the United States, Japan, Germany, the United Kingdom and even Russia as trade policy and enterprise enhancements, though the O-RAN market itself appears to be growing minimally. The U.S. executive branch stopped referring to the O-Ran Alliance in its policy communications and now uses the O-RAN Policy Coalition as if it’s a technical standards development organization. Yet the O-RAN website clearly shows that it’s an advocacy organization whose purpose is to influence governments on behalf of its member companies.
It is important to understand that O-RAN is built on top of 3GPP 4G and 5G technologies. It is not a solution that can replace existing networks on a 1:1 basis. Nor do O-RAN technologies support 2G and 3G, which most of the world still uses for machine-to-machine (M2M) communications and telephony. If a legacy operator wants O-RAN, it probably would have to maintain two sets of parallel base stations, one set for 2G and 3G and the other 4G and 5G. Running two parallel networks increases rental and energy costs, compared with running one network.
If O-RAN reaches the level of success its proponents predict, it will account for less than 1 percent of the 5G mobile sites in 2025 and not more than 3 percent in 2030. It looks as though O-RAN is too little, too late, to make a difference in a world in which operators are deploying 10,000 classic 5G sites every month.
At the end of the day, mobile operators’ job is to deliver a great network experience to their customers. O-RAN technologies offer only limited features compared to the 200 3GPP 5G networks launched globally by the end of 2021. In practical terms, one cannot compare the functionality of Rakuten´s in Japan 4G and 5G network with the functionality of an American 4G and 5G network.
The United States will evolve further as it upgrades from 3GPP Release 15 to Releases 16 and 17, and Rakuten probably will fall farther behind. The O-RAN claims are even further distorted when proponents say the O-RAN is a way for Europe to catch up with the United States, China and Korea in 5G technology. Note that the United States and South Korea achieved 5G leadership without the use of Huawei and ZTE equipment or the use of O-RAN.
2022 will see continued O-RAN advocacy, although it will be more difficult for its proponents to evade the tough questions about the hard reality.
When Joe Biden became president in January 2020, many wondered how U.S. policy would change, concerning China and Huawei. Strand Consult maintained that the policy was bipartisan and was unlikely to change, and, if anything, it might be toughened, particularly as reforms adopted in 2018 gave the new administration additional tools to prosecute human rights violations.
Huawei still faces significant financial pressure, and public opinion about Huawei has not changed. Many countries see it as unsafe and unsustainable to use Huawei equipment in telecommunications networks. Many operators have experienced increased reputational and regulatory risk by using Huawei, and corporate customers do not want their sensitive and valuable data to be vulnerable to the Chinese government.
In any event, the good news is that it need not be expensive to rip and replace Chinese equipment. As operators evolve to 5G, they have planned for upgrade costs already, and fortunately, there are many competitively priced alternatives to Huawei.
Huawei has pivoted to the cloud market and attempts to bill itself as a trustworthy IT supplier for the public and private sectors and as an alternative to the large IT software companies that supply a combination of services and a cloud. Huawei probably will succeed with its strategy in China and in some countries sympathetic to the Chinese regime. However, it will be a hard sell for Huawei to convince public sector buyers in the United States and Europe to buy its solution of putting data into Chinese IT systems and the Chinese cloud.
In 2021, it was telling how gatherings from leaders from across and political spectrum, from developed and emerging countries alike, view cybersecurity. All nations are concerned about addressing serious global problems like illicit finance, human trafficking and ransomware driven by rogue nations and crime cartels. This concern means that secure networks and the practices to defend them will become even more important in 2022.
Both the United States and the European Union have rolled out new policies and regulations to improve network security, including 5G. This includes the European Union’s Toolbox and the U.S. Secure Equipment Act, which FCC to deny equipment authorizations to firms posing an unacceptable national security list. These companies include Huawei, ZTE, Hytera, Hangzhou, Hikvision and Dahua. Drone maker DJI is most likely be added, and many national security experts say restrictions should be increased for Lenovo, TikTok and chipmaker YMTC.
Strand Consult believes the push for greater security is incompatible with O-RAN technologies, which are increasingly influenced by Chinese players.
There is good news and bad news about big tech. Just when health authorities believe they have the virus under control, a new variant emerges. Similarly, governments are trying to regulate big tech. Yet, just when it seems that big tech could be pinned down, big tech adapts to the new reality – with a new name, a new practice or a new public-private partnership.
The conversation about big tech and its role in society will continue in 2022. Policymakers must realize that big tech is adapting faster than the efforts to regulate it. If anything, the regulations adopted to date, such as the General Data Protection Regulation (GDPR), have made big tech even stronger. Today, these companies’ revenue, market share and earnings have increased, compared with the time before regulation. Additionally, the government has made it harder for small and medium sized companies to compete.
The bottom line is that efforts to regulate big tech have failed. Governments should instead make big tech pay for its use of resources. Current policy allows big tech a free ride on telecom networks and the public’s airwaves. These giveaways only increase big tech companies’ market share and profitability.
These are important lessons as policymakers look at the cloud market.
Policymakers will turn their attention to public clouds, which hold an increasing amount of citizen and enterprise data. Big tech probably has more knowledge and data about people and firms than the government itself. In 2022, cloud services from Amazon, Microsoft and Google will emerge in the public consciousness. It is hard to see how a Chinese alternative could gain traction in this market, but it still raises questions about existing cloud practices.
Mobile operators put parts of their networks in Amazon, Microsoft and Google clouds. As mobile networks are increasingly integrated with clouds, this means that individuals and firms are even more embedded with big tech. There is no turning off big tech and no choosing not to use it.
This situation adds to the complexity and difficulty of data portability from one cloud to another. In practice, companies may find it impossible to migrate from one cloud to another. Although this sets off alarms in the antitrust world, it does not diminish the technical reality that cloud services from Amazon, Microsoft and Google are not comparable 1:1. In practice, Amazon, Microsoft and Google will not achieve the same result if you use the three platforms’ AI solutions to analyze your data. One big question in 2022 is which has the most intelligent AI solution: Amazon, Microsoft, or Google?
One thing is for sure: It is far easier to switch the vendor of 5G infrastructure equipment than to switch cloud providers.
Strand Consult has chronicled the development of the mobile phone market and has published popular reports on the iPhone. It has grown banal to watch Apple launch subsequent new versions of the iPhone that look nearly identical to the one before. With few technical improvements in each subsequent phone, the main difference is the model number. In 2021, Apple released iPhone 13, and in 2022, there most likely will be an iPhone 14, and so on. It is a testament to the company’s marketing that it has been able to navigate inevitable device fatigue.
Mobile apps also lumber on with subsequent versions. The key development in 2021 has been the use of mobile apps to manage COVID-19, and that trend will continue in 2022. Additionally, governments have entered the mobile app market in a big way with vaccine passports, which for many countries have become or will become de rigueur.
Tower companies are an important part of the efforts to find profitability in an increasingly difficult telecom market. Many mobile carriers have discovered that they can sell their towers and post unrealized assets. In Europe alone, selling towers has contributed some 36 billion Euros to the mobile industry.
Around the world, we see tower companies starting to spread in the value chain. In Brazil, they invest in fiber, while others consider whether to enter the spectrum market. In 2022, we will see much more of this activity.
A study case is Denmark’s TDC. Three Danish pension funds, PFA, PKA, ATP and Macquarie Infrastructure and Real Assets have chosen to split the telecom operator into an infrastructure company and a service company. The two new entities will be TDC Net for infrastructure and Nuuday for service. We believe it to simply be financial acrobatics. The trend of the breakup of telecommunications companies into infrastructure and service entities will be seen increasingly in 2022.
In 2021, much was written about private 5G networks, such as, who will build them, and who will run them. It’s a market in which many want to enter, everyone from mobile operators to IT companies to systems integrators to infrastructure suppliers. O-RAN players also want to enter, though it remains to be seen if they can deliver the heavy demands of a classic mobile network. Expect fierce competition, very low margins and an inevitable shakeout.
The United States notched an unparalleled success with the C-band spectrum auction, a record for the U.S. spectrum at more than $90 billion. Mobile operators were set to launch 5G in this band on Dec. 5, 2021, but were hijacked by the Federal Aviation Administration (FAA), which posted a dubious advisory about 5G transmissions and altimeters.
U.S. planes fly to more than 50 countries where some 200 5G networks operate, and there have been no reports of interference between 5G transmissions and altimeters. The FAA, which has known of 5G for years, has done nothing to modernize altimeters. The question is which aviation lobby the FAA is protecting, which most likely is small aircraft operators and possibly helicopter operators that don’t want to upgrade their safety equipment.
Commercial aircraft makers such as Boeing produce planes with three modern altimeters each. Their requested mitigation was a guard band of 110 MHz; the FCC doubled it. U.S. operators also volunteered to reduce power levels around U.S. airports for six months to prove compatibility and will roll out 5G in the band on Jan. 5. Thus, the United States has the most generous, though excessive, protections for altimeters in the world.
All in all, we’re going to see that the big markets are going to set agendas for other markets. Much of what is needed requires political goodwill in a world in which the political system rarely understands the importance of what is happening.
After mobile and broadband prices have fallen over time, 2022 should be the year when prices rise around the world. Look no farther than little Denmark, which, in 2021, found the telecom regulator colluding with energy companies to price-fix the wholesale price of fiber access at a level above what the market offers. As such, prices are guaranteed to rise in Denmark because of regulators’ efforts. Given that the regulated price of fiber will increase, broadband prices on private networks will follow.
We also expect that many of the operators that have difficulty creating value for their shareholders through organic growth will raise prices in 2022. It follows that a highly valuable service such as broadband telecommunications should increase in price. This is the law of demand, and without price increases, it will be difficult to invest in network upgrades.
John Strand is CEO of Strand Consulting.
Amazon plans to launch its first two prototype satellites for the Project Kuiper constellation with ABL Space Systems in the fourth quarter of 2022, the company announced.
Amazon has signed a multi-launch agreement with ABL Space Systems, which is developing the RS1 rocket, for launches from Cape Canaveral Space Force Station in Florida. Financial terms of the deal were not disclosed, but according to ABL, the RS1 rocket is designed to take 1,350 kg to Low-Earth Orbit (LEO) for $12 million. Amazon said it has been working with ABL several months and has completed two integration design reviews, including plans for a novel adapter design.
The deal is a win for developing launcher ABL, which has a strategic agreement and launch contract with Lockheed Martin. ABL also recently closed a $200 million expansion of its Series B investment round raising the company’s valuation from $1.3 billion to $2.4 billion.
Amazon has also filed an experimental license application with the FCC to launch, deploy, and operate the two prototype satellites, KuiperSat-1 and KuiperSat-2.
KuiperSat-1 and KuiperSat-2 will demonstrate the technology Amazon plans to deploy in the full constellation, including phased array and parabolic antennas, power and propulsion systems, and custom-designed modems. The satellites will perform demonstrations with the customer terminal, unveiled in December 2020.
According to Amazon’s application to the FCC, Ka-band prototype satellites will be deployed to 590 km. They will be launched consecutively on two separate launch vehicles.
Amazon emphasized its responsible space operation plans with the satellites, that they will each be equipped with sunshades to reduce reflectivity, which can affect astronomers and telescopes. This is an approach SpaceX has taken with its Starlink constellation.
In addition, Amazon said the KuiperSats will have on-board propulsion and a Fault Detection, Isolation, and Recovery (FDIR) system to detect anomalies. Amazon plans to actively deorbit the satellites at the end of their mission.
Amazon said it has more than 750 people working on Project Kuiper and plans to hire hundreds more in the coming year.
As the digital age evolved, the techno-purists envisioned that this brave new world would be one to make our lives easier. Having unbridled access to information and online activities would create an ecosystem where simple clicks of a mouse or taps of a payment app would greatly enhance our everyday work and leisure.
Certainly, the digital revolution has enhanced our lives. Everything from work to dating has benefited from technology. But there also evolved a darker side. And part of that darker side has nothing to do with technology. It is the political and economic fallout that is looming in the upcoming years. Today, internet giants are moving as fast as they can to define this digital space to their benefit.
It has been a good 40 years and a much different world than the visionaries, geeks and forward thinkers of the early years predicted. Although they saw the march of technology, few saw the emergence of an economic ecosystem where digital giants such as Alphabet, Amazon and Facebook, and players like Elon Musk, would wield the type of power they have.
Even fewer foresaw the present face-off between big tech and governments.
For a few years now, governments — and although this is global, this missive refers mostly to our and other western governments — have been trying to rein in the power that these organizations have amassed; so far, with little success. Therefore, the question arises, “Does the government have now, or will it have in the future, the ability to continue this governance of today?” I believe that is questionable.
Capitalistic societies, such as ours, lack what countries with autocratic governments have: the ability to use extraordinary means to control organizations – period. We must exercise control via a complex and often clumsy legal process — even if the organizations act on the fringe of lawfulness. Countries such as China, Russia, Korea, the Middle East and other nations can simply take over the company, throw people in jail and force the company to comply.
Simply put, autocratic countries can deal with the Amazons and Googles any way they wish. We cannot. And thus, we begin the long slog to attempt to control how these mega-monopolies operate.
Some believe our government is unlikely to succeed, for a number of reasons. First, these organizations have huge war chests. They can hire the best and brightest legal eagles to go against often much less experienced government lawyers — even if legislation is passed to manage them.
Next, they have a huge economic effect on society and a global presence, not just national. One can only imagine the chaos and rebellion that would occur if suddenly Facebook were cut off at the knees, not to mention the financial crisis that would develop.
Third, technology would take a hit. These organizations are at the forefront of so many platforms and technologies — AI, applications and algorithms, virtual reality and so much more. In addition, they can go where the government stumbles, nowadays. A grand example of that is the privatization of the space program.
Truth be told, trying to bind these companies may do some good in certain areas, but the collateral damage would be significant.
On the other hand, having control and power over information has some upsides. Take the insurrection of the Capitol last spring. None of their actions in the immediate aftermath of the insurrection came at the behest of the government or law enforcement. These were private decisions made by for-profit companies exercising power over code, servers and regulations under their control.
They were the ones that went to work mitigating the information by doing things such as shutting down former President Donald Trump on social media, removing inciteful messages and information for quislings. They succeeded where governments failed.
Although big tech certainly serves itself, unlike the government, that self survives on satisfying the masses. They need to behave in such a way that their customers and users are not alienated. They have an internal mechanism that applies constraints on their power to act. They maintain global foreign relations and answer to constituencies, including shareholders, employees, users and advertisers.
So, perhaps the government’s sledgehammer approach to breaking up these corporate behemoths may not be the best vector to pursue. Perhaps it is more of a time for collaboration.
While it may seem absurd to some, I believe there is the possibility that big tech may become bigger than the government. It has already wrested control of digital space from governments, freeing itself from national boundaries and emerging as a truly global force. Is it possible that elite nation-state dominance is coming to an end, supplanted by an elite techno circle of organizations that assumes responsibility for offering the public goods once provided by governments? Certainly, that is a ponderable precognition.
We no longer live in an era where smoke-filled rooms of political power brokers decide the fates of companies, as was the case with the breakup of the old Bell Telephone, Standard Oil, U.S. Steel and others. Today’s mega-technology firms have two critical advantages that have allowed them to carve out independent geopolitical influence. First, they operate and wield power almost exclusively in the digital space. Second, their influence in the digital space is global and difficult to corral. They exercise primary influence in a vast territory, which governments do not and cannot fully control — as well as fully understand.
This brave new world is rapidly outpacing governments’ abilities to manage global prosperity and has created a digital economy that disintermediates the political ecosystem of services. The rise of digital currency is proof of that. Cryptocurrencies are proving too much for regulators to control, and they are gaining wide acceptance, undermining governments’ sway over the financial world.
The single most enabling force of these digital organizations’ rise to power is location irrelevance. Governments exercise power over physical assets. Digital companies have no such impediment. Facebook substitutes for the public square, civil society and the social safety net, creating a blockchain-based currency that gains widespread use. Musk plays an ever-greater role in deciding how space is explored. The signs are certainly there.
Does this sound like the antithesis of Orwell’s 1984? Or did I just smoke a little too much pot? Already there are signs of the techno-elite’s power as attempts by governments to reel them in have largely failed.
Perhaps it is time for all sides to sit down at the table and find a solution that does not pit one side against the other. The digital society is here to stay. Governments better figure that one out.
Ernest Worthman is the executive editor of AGL’s Media Group.
January 10, 2016
I’m sure you remember the infamous fiasco between Apple and the FBI over Apple’s refusal to unlock the mobile phone of a suspected terrorist. I took a strong position that Apple was wrong in their reluctance to provide an unlock code for the iPhone. In a nutshell, it revolved around evidence.
Just recently, a similar situation occurred when an Amazon Echo device was believed to contain some incriminating evidence about a murder case that occurred in Arkansas. Basically, the authorities believe that there may be some audio on that particular device that might be considered evidence, or at least provide some idea of what transpired around the time of the murder.
Amazon, like Apple, is taking the stand that such data is private and is resisting the authorities’ demands to provide it. Amazon said in a statement that, as a matter of course, it “objects to overbroad or otherwise inappropriate demands.” By who’s definition? Amazon’s Jeff Bezos is coming up with the same weak arguments Apple CEO Tim Cook came up with – none of which address the real issue – evidence.
Well, the authorities should be able to demand the right to garner evidence. Amazon is the one claiming that wanting the Echo is an “overbroad or otherwise inappropriate” demand. Not everyone necessarily agrees with that and I think that is a reach by Amazon, which has no real valid reason to deny the request. What great channel is this going to breach? Is everyone’s Echo now open for snooping? I think not!
This isn’t anything more than a simple recording device at that level. And even if it does contain confidential data, I really doubt that the authorities are going to sit around a put it up there on Facebook, or tweet it out to the world. And, I’m sure Amazon has the ability to retrieve only the critical audio to provide to the authorities.
Listening to some audio from an Echo device hardly constitutes “broad” demands. Unlike the iPhone, listening to a single Echo audio file isn’t going to compromise an entire family of other Echo devices, as Apple had claimed would happen in they gave the FBI the unlock code to the terrorist iPhone.
And, frankly, I doubt the authorities would care if some of the audio was about disciplining children or arguing over who should make dinner. Or even which nude beach they were planning to go to on vacation. They simply want to dig up evidence that will clarify the occurrences around the murder.
I’m sure if one of Bezos’ family members were murdered; he would be the first to give up his Echo if it would help solve the case.
In the days before digital data, the telephone companies would give up subpoenaed data. Video surveillance tapes were also used as evidence. Why can’t the same rules apply to digital data, or cell phone data today?
Frankly, there is little in my life that matters much to anyone. And I doubt that most of us do or have stuff that anyone else cares about. I’m not talking about hacking. Just day to day activities like those recorded by the Echo.
If the authorities want to look at my phone records, or my security videos, or my bank accounts, have at it. with the advancement in technology comes some compromises. The rules of privacy haven’t changed just because we now have the ability to access just about everything we do and say. Evidence should be available to authorities no matter what the state – especially in today’s world of terrorism and elevated crime states.
Protecting our privacy is just as important today as it was yesterday. So is the charge to use what is private in a responsible way that both protects what we want while not compromising the rights of the aggrieved.
Apple, Amazon, and whomever else, you are not in charge of my privacy – I am. And if I’m not around to make the call, I’m sure any of my charges would love to find out who off-ed me and give the authorities whatever it takes to find the perpetrator.