Spread Spectrum the Air War

Is Spread Spectrum the air-battle of the Information Revolution or did the so-called information age die without a whimper in the depression of '02? The dynamic struggle between the incumbent forces of the industrial age and the TCP/IP entrepreneurs of the information age is occurring on many fronts. While the ground battle is in gridlock with the forces of the dark side locking up legislators, bureaucrats, and bringing the economy to its knees, spread spectrum is unleashing a strategic air attack in the form of wide spectrum weak electro magnetic emissions in unregulated spectrum. Analogous to IP itself spread spectrum conveys information across the entire frequency range including light. The depressed communications industry and the conflict over strategy at the FCC is the battle-ground for the way we use broadcast spectrum and weather or not we achieve the economic outcome of free information and enough low cost bandwidth to use it.
The Clouds of War
A series of new technologies were introduced to a market with ready venture capital, and young daring entrepreneurs. Opportunities arose in an environment when government regulation, bureaucracy, political prostelizing and industrial age carriers trailed far behind in comprehension. Institutions rooted in the old technology gave way reluctantly to young startups with innovative applications and a fresh pragmatic view of the market The concept of digital information, packets and the web escaped the old analog mind set of the telephone industry and the enmeshed government bureaucracy. Growth was driven by enormous demand, anticipation and elasticity. Internet growth was exponential. Expectations were high.
Incumbent carriers awakened to the reality of wireless, cable and "voice over" The going got sticky. Having provided generations of good telephone service, an economic and productivity revolution of it's own day, these old line institutions comprised a post mature, administratively and finance driven, autocratic industry. (In other words the bean counters gained control.) With abundant resources, accumulated by decades of sanctioned monopoly the forces from the dark side bought up cable and wireless and attempted to fashion the Internet in their own image inhibiting competition from new technologies.
The enormous combined market power of the world telephone industry may have in the process pulled the plug on the exuberance of the Internet economy. Everything slowed. Competitors folded as their capitalization and their market evaporated. The traditional mind set of the telcos and their pricing structure had a retardant effect on Internet deployment. Ironically the carriers especially those with abundant built out fiber-optic capacity suffered the most.
It is difficult, for an outsider, to fully appreciate the engineering strategy dictated by an internal business decision, but the outcome is most evident or as the attorneys would say: “The thing speaks for itself.” What I believe happened was that the incumbent phone companies gave an initial free ride to the Arpanet and the early Internet. As demand increased local carriers strategized deployment of digital over existing wires without substantial added capital expense or incremental cost. When attempting to engineer the interface between existing infrastructure and fiber optics, between electronics and the photons for optic fiber. I believe the local carriers engineered central control and a strong service component, as a business strategy, thus locking in a cost structure substantially higher than the market was willing to pay --- and possibly with a complexity the local carrier was unable to execute.
The lower cost more scalable switching on the edge was not adopted by the local carriers but there is evidence the long distance carriers are turning to the edge just to get access to local markets affordably. It is obvious that nearly limitless bandwidth on the fiber network is almost completely blocked at the last mile. The consumer and small business cannot gain access at any affordable price.
“What are you going to do with the band width if we give it to you?” And “There is no demand.” Say the phone companies. The most ludicrous claim is that DSL is broadband. At my 500k or even at the promised 1.5m the data rate is not adequate. Until the pipe is open to at least the bandwidth of corporate networks there is a stranglehold on growth. Today’s games, music, marketing applications and especially 3D displays of products will not run well on DSL. It is like watching a Charlie Chaplin in a Penny Arcade nearly a century ago. The technology of computing runs way ahead of the bottleneck in bandwidth. Throughput, critical to economic development, cannot take place until the pipes are open.
The communications industry is in crisis as a battle rages between old monopolies attempting to maintain the Byzantine price structure of a bygone age and the new technology struggling to find expression in highly productive enterprise.
FCC chairman Michael Powell at a recent congressional hearing said, "It is difficult to imagine the industry stabilizing without some modest and prudent restructuring. The long haul markets are glutted with excess capacity that dramatically exceeds demand."
Lost Air Battles
Meanwhile the government bureaucracy, minions of the dark side, comfortable with traditional central control of the "airwaves", auctioned frequencies for wireless use. These were narrow spectrum channels and the price demanded by the auction, bid higher by the incumbent carriers, was too high, perhaps, higher than the highly elastic marketplace would accommodate. The old-line telcos may be financially strong enough to survive the distorted capital expense; clearly the new competitive carriers were not. It was a small price for the incumbent carrier to pay for eliminating the competition and stopping the free way that threatened it’s monopoly. It was a financial and technological struggle between the old and the new. And not at all a new story, that the interests best served by failure of an extremely effective and new technology, were in the best position to deny the threat by financial influence on legislators and regulators. I requested a copy of the FCC’s minutes. Many weeks later I received an e-mail stating that their internal deliberations were exempt from the freedom of information act. “I’ll give you Boardwalk and two hotels if you let me off the hook for this next one.” Confidentiality is appropriate for a private, even a non-profit company but not for a regulatory agency with the power of the FCC. They’re dicking with my money.
The Dog Fight
Here in Alaska high-speed access is hard to come-by. DSL, digital subscriber line, is very expensive and not very good. I sit and wait for the computer to catch up. We have come a very long way but have a lot further to go to realize the full productivity potential of the computer and the Internet. Fiber optics is here too. The Electric Association brought fiber optics some 80 miles from the nearest connection. Everyone thought the electric company was going to extend fiber optics in the electrical cable to homes and businesses. Instead they sold the fiber to the phone company. We now have 15 strands of dark fiber, used only by the high school. DSL is all that is available and that on a convenience basis. Cellular here is either TDMA or analog. The phone company owns Cable and bandwidth is offered at the same price as DSL.
Espionage
I sat down with an attorney over lunch, an old friend, who was wise enough to retire from and cash out of a major legacy carrier, at the right time. He was enough of an insider to give me some perspective. I had a list of questions. The answers, however were guarded. “Does the phone company promote auction of high frequency spectrum for the purpose of pricing small competitive carriers out! and assuring a price structure so high for wireless that wireless cannot deploy broadband at a competitive price?” “Yes.” "This is very complicated." The 1996 telecommunications act was the forthcoming explanation. The companies are scrupulous in meeting the "T71 test", a 14 point check list to pass the DOJ and FCC with regard to allowing others to use established carriers' lines for competitive services. ---(Some of the other questions may still need answering.)
A Disastrous retreat
After the Bubble there was a lot of finger pointing. Emotions ran high. RBOCs, regional bell operating carriers pointed to investors. They said investors claim the system was overbuilt with over capacity, no demand for higher bandwidth, even questioned the utility of high bandwidth. An investor would say “yes but the local incumbent carriers are an anachronism and are the problem, maintaining price based on time, distance and bandwidth, while ignoring the need to replace sagging phone lines and the need to deliver a digital IP architecture to the periphery.”
The investor may have been willing to invest in fiber optics if it was lit or going to be lit but not in dark fiber. Customers complained the bill was too high. Better to buy a cellular device, a PDA that costs less and adds to personal productivity. The FCC was torn between the desire to shore up the faltering communication industry or stick with the deregulation policy now well established.
The entertainment industry and media interests pointed at everybody claiming their property rights were violated. Legislators, concerned with the economy, pointed at accounting irregularities but were uncertain who their constituency was. The problems confused party lines. The administration, concerned with security, worried about encryption. Were we more secure if everyone could read every one else or if we had complete privacy? Long distance carriers and owners of the so-called backbone of long distance fiber pointed to the RBOCs claiming excess charges for local access. The Various service providers under the telephone act of 1996 complained, they were denied access.
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Intelligence Report
1. Today there is a substantial over capacity of long haul fiber. The growth in traffic and volatility is such that a shortage is sure to follow. The excess capacity may in part be due to the technology of spread spectrum in the form of WDM, wavelength division multiplexing. With use of multiple colors of light a fiber can carry much greater capacity than at first envisioned.
2. There is nascent demand for high-speed access by the consumer. There was an expectation of exponential growth in access and bandwidth on the part of the investor. Software routing protocols for optics, which accommodate both the last mile TCP/IP to the consumer and the top down tree like central control architecture of the phone company are problematic.
3. Applications have not evolved to productively utilize the capacity because the local loop is so slow and unreliable.
4. The bandwidth we do have is saturated with Spam, hacking, pop-ups and flashing banners. We assign more bandwidth to firewalls, filters and devices to attain a degree of privacy and security than we see growth in available service.
5. Phone companies worldwide experienced unprecedented financial pressure. Long-distance prices fell rapidly both domestic and overseas at times by as much as 50% a year. Cellular competed in price, market share and demand for both domestic and long distance phone use. Metcalf’s Law supposed that communication prices would continue to fall, concurrent with improved technology, at a rate nearly doubling that experienced with the microchip.
6. Capitalization of the communications related industry evaporated with the fall in the equities markets. Investors stopped investing. Buyers stopped buying. There was more finger pointing. Instead of cutting costs and reducing prices the incumbents exercised their market power and froze prices. Pricing was thus on the backside of the price and income curve. That is pricing, to maintain margin, was so high as to reduce revenue and earnings.
7. The phone companies have a history of market power, even monopoly. They have enormous influence with the FCC and with the legislature. What is more and for reason of their history of consumer service, the "Bells" are viewed as benevolent or at least fiduciary in their recommendations.
The Fighter Jocks,
IP programmers and Internet users want an interstate highway without tollbooths, billboards or stop signs. They are willing to go down back roads, over mountains and through streambeds to avoid the toll. This eclectic TCP/IP population is rapidly becoming a plurality. Their desires and view of the Internet is cohesive. They are a political and economic force to be reckoned with and they are driving the information revolution. Their prevailing view of the net is not as a TV or a vending machine but as a library, a business tool, a tool of personal productivity, a view of the world of their own choosing and ultimately a source of artificial intelligence. There is a sense of connectedness and purpose. These current economic and technological observations must be viewed with in the big picture. Call it a macro economic shift; a revolution or what you will, anyone running substantially contrary to this stream of consciousness or forming a business plan not taking the macro economic factors into account might do so at their own political or economic peril.
Forward Air Bases
Communication: The Internet is the highway and information is the abundant exploitable resource in a fast changing economy, the infrastructure of an information age. Radio, telephone, old phone lines, cable TV lines, satellite, fiber optic and wireless compete for the worlds communication needs. As the telephone stimulated the economy in the 20s, the Internet should be doing so today. A powerful tool of productivity, the final deployment of the Internet will determine the economy in every country for many generations to come.
Economic strength will depend upon deployment of the Internet and associated communication modalities to an entire population. It will require near infinite bandwidth, transparency, efficiency, scalability and reliability. Growth will be the result of personal, group and enterprise productivity. The future of communication will belong to the players who can scale their services to a price affordable to all; whether the incumbents, from the Industrial Age change strategy or not. The lower the price the greater the market. The greater the market, given adequate and growing margins, the greater will be a company’s earnings. More significantly, the higher the productivity, in that expanded market and the higher the standard of living. Egalitarian? Certainly. But more significantly productivity is the strongest of business strategies!
May the Force be with you!
The magic of the Internet is in large measure due to its redundant architecture. Secure delivery of digital information depends upon small packets of information with routing instructions, confirmation of content and identification of the destination and source. (See packet design) The nature of the packets traveling by multiple routs over the web-like expanse of the Internet until they find their destination and are reassembled is fairly well known. This cloudlike dissemination of information in contrast to the string-like single, continuous connection is what gives the Internet its scalability and reliability. Wireless affords an immediate means of a mesh like architecture, a substantial increase in bandwidth and connectivity through the last mile.
Strategic Air Command; War Plans
A If I were a phone company, I would shift the capital expense of the fiber-optic deployment on to the consumer, not as a monthly charge but as registered and deeded property of the business or the homeowner. The cost of deployment might therefore be amateurized over many years and might accrue in value. An attractive investment for the consumer, a creation of wealth and equity, there might be far less frustration in securing right of way as the cable would be optional and viewed as an asset to themselves and their property no matter how many flowers were dug up. I could see the phone company becoming more of a mortgage company for the infrastructure and for the equipment as well as the traditional role of linemen, equipment vendors and installers. The service tradition was excellent prior to the current chaos. I would price bandwidth as low as possible and base revenue on deployment of underground cable and the financing of installation. It will be a long time before that market is saturated. I would tell my investors that their phone company is a quasi utility and its primary mission is meeting the needs of the customer. The trade off is for a rock solid investment that stands over the worst of times, as opposed to a go-go enterprise subject to the swings in the economy and the success or failure of new technologies. There might be fewer supernumerary jets in unmarked hangers but the phone company might survive.
B As a consumer I would rent a Ditch Witch and lay fiber-optic cable at $1 a foot, to two or three of my neighbors. Neither government nor telcos could charge for traffic over this network: Fiber would be as free as the air. Redundancy breads reliability. Fiber breeds bandwidth. Light breeds speed. Lets network the community at petabite speeds and meet the long haul carrier on a peer-to-peer basis. Think of the reliability and value of a consumer owned redundant network extended along the last mile. Let the weekend do-it yourselfer rent his Ditch Witch and make it happen. Triple redundant buried fiber impervious to electrical magnetic interference and broken links has enormous security and economic value.
Another option is a fiber-optic utility completely separate and apart from the phone company. There is after all a significant difference in mission and in technology between TCP/IP and POP. Just as video over phone lines is grossly antiquated so is the slight delay in voice over Internet inherent in IP. There might be some logic in encouraging both technologies to develop entirely on their own track to the profound betterment of both. Cable might well fill the bill but there again TV and the Media have a bit of a different agenda, both rooted in the industrial paradigm.
C Wireless can manage both voice and IP, what is more, give instant gratification, with low initial capital expense and great flexibility. As a cell phone device wireless is crippled by the distorted capital expense of the FCC auction for spectrum and by the narrow radio spectrum allotted to it. Spread spectrum with low power and wider spectrum yields vastly greater capacity. With more nodes and access points the network gains capacity rather than overloading. 802.11b is a spread spectrum standard in unregulated airspace. Dissemination of this wireless standard to the last mile can create a mesh, which only improves with density and is free of regulation and third party control. Cost is your own capital expense. Mr. Greenspan might suggest a tax credit to encourage deployment of user owned and community owned local loop networks using fiber or wireless.
Aerodynamics
Elasticity is a term used to quantify the extent to which price effects the size of the market and/or the willingness to buy. Faced with falling prices, fierce competition, and red ink the logical response is to cut cost and lower prices. With an elasticity of somewhere between 4 and 6! It does not require a very big margin to grow income as a direct result of lower pricing. (Simplified example: Given elasticity of 5; with an initial operating margin of 55% (variable cost); for every 10% drop in price for bandwidth, sales increase 50% and operating income increases by 10%.) I think many observers miss these price and income dynamics. The boutique marketing approach to broadband must ultimately fail.
The Defeat of Metcalf’s Law
The price for information, call it bandwidth, was dropping twice as fast as the price for computer power. Moor's Law defines the later phenomena wherein a doubling of the cost benefit ratio of computing doubles every 18 months. Metcalf’s Law defined the former, cost per bandwidth ratio wherein information was doubling in 9 months. Has Metcalf’s Law, been defeated or was the apparent impaction of data and price a minor defeat?
Major institutions were forced to rapidly adapt, not just to a new technology but also to falling prices. Business models, which were relied on for generations for service as well as financial stability, faced unprecedented challenge. Were these institutions able to exert their market power to force competitive new technologies into bankruptsy? Will they be successful in valorizing government regulators and legislators into actions, which further strengthen the cartel of communications heavyweights?
Cat and Mouse tactics of the Dark Side
There are many places, where the pure market does not predict behavior and this may be one of them. Like the most attractive blond in the movie "A Beautiful Mind", spread spectrum and fiber optic backbone may have been left standing in the pub by a non-market strategy. The incumbent carriers with market, financial, and political power can form a cartel to shore up the industry, to advance non competitive pricing, to gain government support, even enforcement, under the guise of stabilizing a vital national infrastructure. To do so requires reversing an ongoing trend towards deregulation. But these are unusual times. The depression is persistent and deep by all measures. The temptation to stabilize what is viewed as critical industry by any and all means may be irresistible to the misdirected legislator or regulator.
North of the Yalu River
More directly related to spread spectrum is the FCC's re-evaluation of their policy of auctioning spectrum. With new radio technologies, variations of spread spectrum, UWB ultra-wideband, Agile Radio or software-defined radio, SDR; the property rights view of frequency is under question. The FCC refers to unregulated or self regulated air space as the commons. Strict allocation of spectrum was necessary with carrier waves and interference from strong adjacent usage. Elaborate international treaties tended to insure cooperative use of limited radio spectrum. Newer technology can eliminate that interference by sharing frequency, with low power wide spectrum and utilization of only uncontested frequency regardless of whose space. Mesh networks as in the 802.11 standard may in fact increase capacity as the number of users increases.
One proposal for change envisions the extension of unregulated space for these newer rapidly changing technologies. One version of that proposal includes the auctioning of the unregulated spectrum. The free market theory behind that proposition suggests that if abundant and non-contested, the spectrum would attract none or very low bids for use. A dangerous proposition! As a likely non "free-market" move on the part of established carriers, I would fear a "dog in the manger" bid from incumbent carriers as a prevent strategy and an attempt to maintain non competitive pricing. This would be especially worrisome if the auction were to extend to heretofore-unregulated spectrum. Ideally all spectrums would be relegated to the commons but that will take decades both the commons and assigned frequencies need to coexist as the market and technology sort out the best options. This will be an interesting contest. The ideal solution is not likely to emerge.
Recently the FCC contemplated a forgiveness of the auction debt incurred by operators for radio spectrum. Would it not be the last ironic blow if the forgiveness of debt were only realized by the surviving telcos who bid the price high enough as to assure the bankrupsy of the challenging competitive carriers, no longer able to realize the forgiveness of debt?
The Fog of War
The expected result of an economic revolution might be volatility and chaos, even economic turmoil. We have all three. To expect a smooth transition is unrealistic. To expect a predetermined ideal outcome or an outcome determined by the best technology is unrealistic as well. Unforeseen events, unintended consequences and intense efforts to preserve the status quo characterize the struggle. It is up to us to do everything in our power to insist upon an outcome that benefits our economy, our productivity and our quality of life.
Stifling the use of spectrum for the deployment of bandwidth is a bombing run on our rail yards, severing the lifeblood of the most proficient multiplier of productivity mankind has yet to produce. We can fight for freeing up the logistics and the rail lines of information. We can work towards a generalized outcome based on the direction of the market or the macro economic trend. We can keep up the pressure for a rational infrastructure that will encourage quantum leaps in productivity. I would hope for a free very low cost infrastructure of near infinite capacity, like the oceans, and a freely exploitable resource --- information. I would hope the US would lead in that direction but if we don't other countries will. The genie is out of the bottle. Out of the chaos should emerge a really startling new economy with creativity imagination and practical solutions available to anyone who cares to reach?
The Wireless Underground near Boeing Field
I can’t resist a personal note. I had to see this 802.11 in action for myself. I doubt if it will happen anytime soon in Homer; although it might bring a touch of technology to the outhouses, I am not sure such would serve the air war. Maybe that is the way to promote wireless in Homer, however. It would not be much of a trick to dig in a bright orange fiber-optic cable to the outhouse, although why anyone would want to do it? Yes, wireless is the way to go.
So, by way of Barrow to check out the unusual gathering of Polar Bears, I cashed in my about to expire Alaska Airline coupons and headed outside to Seattle to try out my new Latitude laptop with the wireless card built in and to see how the Seattlewireless.net folks are contributing to the war effort, with their community based free wireless network.
From the articles I read, I expected to find Wi-Fi in Starbucks. Indeed the first Starbucks I found had signs in the window announcing 802.11b available. The word free was remarkable for it’s absence. Indeed one is required to subscribe to “T.Mobile” to gain access and at a cost of $20 for 120 minutes. I don’t think so. Leaving Starbucks, I thought surely the Westin Hotel had wireless. I tried their lobby, nothing on my graphic quality of signal display. Finding a Radio Shack, I logged on to www.seattlewireless.net and wrote down the names and addresses of the coffee shops and other access points until the manager politely asked that I leave. I think most of the world is clueless about network wireless including the manager of Radio Shack.
Finding a wired coffee house, Zeitgeist Coffee, in Pioneer Square on Jackson, I got connected. A bit more of a trick than I thought, I found that my graphic quality of signal would not light up until I got to control panel, network access, double clicked my wireless device and then clicked connect. A screen popped up to indicate the wireless network was available. It was then only necessary to select, and I was there. The hotel may have had wireless after all. Some kind of an up front stiffer would be a good idea.
I easily spent the morning, writing, on line, and drinking coffee, watching the crowds go by. What really caught my eye was a newbe (that’s newer than me) who came in talking to the quick young man behind the counter. There was an exchange of money and what passed were a small booklet and a PCMCIA card. It struck me.
This is where the commerce is with the Information age, its still in the equipment, not in the tollgate. Sky Dylan (last name Dayton founder of Boingo, another high priced air time, willing to co-op with free nets for a kick back---Not.) is a genius and nobody can argue with Earth Link, but my flying to Seattle to sit in a coffee house to get free air and that simple transaction I saw at the counter tells it all. I will buy what ever I must to get free air and so will that young man at the counter. I have already given my pound of flesh to the phone company, not likely to do it again. Consumerise the last mile!
The Seattle Wireless folks have a monthly meeting and the time and location is published on the Internet. Other communities looking to do a local or wide area network are invited. The location is a bit creepy, the Rainier Cold Storage facility on Airport way S. The only sign, 5790, leads to a double loading door, “C” in back facing the railroad tracks.
As I write this I am sitting in a rental car in the parking lot at the meeting place. I am 2 hours early. A truck just pulled up in front of the loading dock, a bit art deco, this meeting is taking on the character of a wireless underground. There may be reasons.
I take notes at the meeting. --- I try to judge a meeting by the slope of the learning curve. If I don’t know at least half of what they are talking about, I can’t keep up. On the other hand if the new content is too low a percentage, the whole thing is a waste of time. This September meeting is about a 90% slope. Mat and Ken are terrific. I cannot possibly pass on what I learned. I have homework to do.
My notes mentioned things like: routing protocols, OSPF, RIP and Zebra. You need to know about Nodes D through A, IP tunnels, air bridges and 200mw cards. They “might” like the Linksys WET11s and apparently the Airport is a devise manufactured by Apple Computer, not the concrete in front of Boeing Field. Also you can make good use of an old 486 to handle software. The www.seattlewireless.net site has enormous amounts of information. I have not built my node yet but the cost and basics don’t sound difficult. Like under $250 for antenna, cables, box, a WET11 and a P100. My roof top overlooks a number of homes down below, my friends B&B and further down at least two outhouses.
Victory in the Air
If we can develop a community wide network and become part of the critical mass of other communities doing the same, we may become part of a chain reaction, leading to widespread user owned networks. The battle may yet be won.
I would place this battle with in the perspective of a war between the powerful incumbent interests of the “phone bill” and free TCP/IP but also viewed within a cultural revolution that is rapidly replacing industry with information. I would consider further the question: Is information the end product, or is it the newly freed-up, exploitable resource and the means to unbridled productivity leading towards the creation of many things greater?




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