3G promised us the
mobile Internet but, as ever, the hype got ahead of reality. To be
fair, by the time that 3G was finally agreed upon and rolled out, the
speeds it offered seemed rather pedestrian, and most industry watchers
are now waiting on a 4G world for a truly global, mobile Internet with
access speeds capable of supporting the kinds of applications and
services that the iPhone is letting us glimpse. And that might happen
faster than we think. The 1.5 billion app downloads on iPhone – a tiny
fraction of the total mobile phones in the world – has shown service
providers everywhere that there really is a market for mobile content
and applications.
Now I don’t really want to step into the
debate over which flavor of 4G will win – LTE or WiMAX – except to say
that I think LTE will be a much simpler operational step for cellular
service providers to roll out and be able to play the same kind of
staged deployment as they did with 3G where multi-protocol handsets
‘hide’ the initial patchiness of the network infrastructure.
The
battle for 4G technology dominance aside, a 4G world will be a very
different one from 2G and 3G because several key technologies and
approaches are coming together: fast and ubiquitous mobile Internet;
powerful smart devices and cloud-based services. Cloud-based services
allow the edge of the network (the device) to be smaller, lighter and
simpler yet still as powerful because all of the heavy duty
applications processing and storage are done inside the cloud. To be
useable, it needs fast and reliable communications anywhere the user
might be, and hence 4G is a crucial enabler of this approach.
Apart
from a large screen and keyboard (and you could Bluetooth to those) why
would you need a PC when you have a smart phone and all of your
information and applications available online anywhere you go? No
wonder Google has targeted its focus on the handset (Android) and
netbooks (Chrome). If this scenario came about, it would obviously have
very big implications for the PC and software industries as we know
them today.
But there are many new issues to worry about too
in a 4G world. It’s an all-IP network, so problems like VoIP security
and service quality rear their head. In such a radically altered world,
what are the implications for charging, settlements and so on? The
operational headaches for service providers are likely to grow, so we
need to crack on and solve them before these networks become
high volume reality, and that starts with the basic infrastructure
being manageable in a sophisticated and common way – not having to
build different systems to cope with different manufacturers, for
example.
But the implications of a 4G world go way beyond
this. We may see a complete revolution in the business models
underpinning these networks and services. Already we are seeing cracks
with so-called over-the-top services bypassing the communications
provider’s billing system. Do we see a separation between companies
that operate networks and players that operate services and market
those to end customers? How will value chains evolve? Even the model
for who pays for services may change – already we are seeing more and
more ‘free’ applications and content on the iPhone supported by
advertising.
Net Neutrality: A Spoiler in the Making?
If we can take one lesson from history to understand a 4G world, it’s
that the success of regulation on communications markets has been
patchy at best. To me that’s why the whole net neutrality issue looks
like one more step along that rocky road where regulators generally
regulate by looking back at markets we have had rather than markets
that might exist in the future. Free markets usually work well, and
ones that are distorted by ‘helpful’ regulators usually don’t.
If
a 4G world is totally dependent on high bandwidth, always on, IP
connectivity anywhere on the planet, one of the inherent inadequacies
at the heart of that structure will be the Internet itself. A 4G world
will upgrade the fatness of the pipe, the device you’re viewing content
on and business models. But one thing that hasn’t actually changed is
the design of the Internet and all of its flaws having to do with
service quality and the debate about IPv4 versus IPv6.
There are
solutions out there, but essentially we’ve got this ungroomed,
unmanaged, uncoordinated world in the Internet and variable quality
that will not lend itself well at all to tomorrow’s value-added
services where people are depending on the availability of the network
to support pretty much everything they do.
Our old friend net
neutrality seems to rattle around and around. The bit I don’t
understand, especially in such a free market country as the U.S., is
why would anyone want to enforce legislation that would prevent those
who wanted it to pay for better classes of service? If this was
healthcare and President Obama said everyone is going to get basic
healthcare with no option for private plans, you can bet there would be
rioting in the streets.
But that’s exactly what net neutrality
proponents are saying about communications services: that everyone has
to have the same thing. Is bringing everyone down to the level of the
lowest common denominator really going to serve a world where people
may well be prepared to pay for subscription services that give them
sporting events on their phones in HD quality? So you have customers
asking for this, but you as a provider have to say sorry, we can’t give
that to you because the government passed a law that said we couldn’t.
I
think the sheer possibility of a 4G world will make the current
thinking we have about legislation and regulation seem pretty stupid,
but then, that never stopped governments from interfering in the past!
We
can only hope that legislators and regulatory bodies understand the
potential of a 4G world and do their best to keep their hands off of
it. I think only then will real innovation happen and a real
evolutionary leap take place.