Ten Stories that Defined Broadband in 2008
With every tick of the clock, 2008 is taking its final steps toward 2009, when the year starts afresh. From a broadband perspective it has been an eventful year—one that was good, bad, and ugly. Here is a rundown of 10 stories that defined the sector in 2008:
1. Optical cable cuts bookmark the year
In 2008 we saw undersea optical cables cut on two separate occasions, resulting in limited Internet and voice access in countries in Europe, the Middle East, and Asia. In January two cables went out in the Mediterranean Sea, and then two more went on the blink in February. Toward the end of 2008, similar cable cuts near Malta led to wide-scale problems.
2. Peering troubles disrupt the Internet
Cogent Communications, a wholesale bandwidth provider, got into a fracas with two separate carriers—Telia and Sprint —and shut off its connections with them, which resulted in many of their customers losing access to the Internet. Regardless of whose fault it was, the brouhaha brought home the fact that the Internet is really a network where many parties agree to interconnect to each other and any one party can cause the whole thing to fall apart (or slow down).
3. The unwelcome rise of metered broadband
In the U.S., we started to see the asphyxiation of unlimited broadband. Limited by imagination and slowing growth prospects and with their video franchises threatened, newly independent Time Warner Cable and Comcast embraced the concept of metered broadband. Phone companies joined in, and now we are faced with a rather bleak broadband future in this country. Of course everyone is blaming P2P, Hulu, and the growing demand for online video. But once ISPs started to block P2P traffic , they soon found themselves in trouble with the FCC. We issued our own GigaOM white paper that looked at the facts and fiction of bandwidth caps.
4. Wireless broadband takes wings, thanks to the iPhone 3G
This summer, Apple released the 3G version of its popular iPhone, leading to a sharp increase in the demand for wireless Internet access. As predicted, it has tested the capabilities of AT&T's wireless network, while lifting demand for more capacity on mobile backhaul networks. AT&T had to buy Wayport, a Wi-Fi operator, to supplement its 3G networks as consumers turned to cheaper Wi-Fi for Internet access on their phones. Other wireless carriers are responding with their own devices and wireless data, turning it into a massive (and lucrative) business. Most notably, T-Mobile USA launched its much-awaited 3G network and a Google Phone to go along with it.
5. Planet Broadband
There are now more than 400 million broadband users around the planet, many of them using faster (and somewhat more expensive) DSL connections. In leading broadband nations like Japan, Korea, and parts of Europe, fiber-based Internet access became even more popular. In the U.S., Verizon is leading the fiber charge with its FiOS service. The U.S. remains the largest, if not the fastest (in terms of speed), broadband market.
6. Outages become commonplace
In 2008, our reliance on the Internet—and on Web services in particular—increased, and more than once we were made acutely away of the fragile nature of Web infrastructure. Google's popular Gmail service went on the blink, Amazon's fast-growing, cloud-based storage S3 service nosedived in July and more recently, DNS problems hit Yahoo and customers of its e-mail service. And let's not forget when a simple routing change by Pakistan Telecom to block YouTube took down the video service for hours, leading to a sharp increase in productivity around the world.
7. Broadband capacity keeps growing
The growth of global commerce and online video will be enough to fill up all the optical pipes, according to Level 3 CEO Jim Crowe. The increasing number of mobile subscribers globally is causing an exponential rise in the demand for bandwidth, which is why despite declining prices there were several new cables installed , notably those connecting Africa and Asia to the rest of the planet. Meanwhile Google took stakes in pan-Asian cables as it tried to expand its reach eastward; it also bought a piece of satellite-based wholesale bandwidth provider, O3B Networks.
8. Clearwire and the divergent fortunes of WiMAX
Sprint and Clearwire teamed up to form a new company, Clearwire, that will offer WiMAX-based broadband service in many U.S. cities. The company received more than $3 billion from backerslike Google, Intel, and cable operators such as Time Warner Cable and Comcast, but it needs still more, and the current credit crisis is giving company management some sleepless nights. The delay might cost WiMAX the short-term advantage it has over LTE , the rival 4G wireless broadband technology. In sharp comparison to the U.S., WiMAX technologies are taking off in emerging telecom economies such as India, a trend that is predicted to gather momentum in 2009 and 2010.
9. Troubles return to telecom land
It was arguably the worst year on record for U.S. phone companies. Millions decided to cut the cord and switch entirely to mobile plans in order to save money. The demand for DSL services slowed to a crawl. Their expansion into video is going slower than previously predicted. In order to deal with slow consumer demand, phone companies are saving cash by not spending on infrastructure. But their attempts to hoard cash and not spend on new equipment is in turn sending telecom gear makers swirling down the drain. The cable operators are starting to feel the heat as well. 2009 isn't going to be easy for many of these companies.
10. Good-bye, Mr. Martin
So what am I looking forward to in 2009? For starters, the back of Kevin Martin, the FCC chairman who in my opinion has done the most harm to broadband competition with his backward-looking, telecom-friendly policies. I hope President-elect Barack Obama looks outside the beltway to find the next FCC leader, for someone who puts the people before special interest groups.
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