Networks & Network Providers

I took part in a panel discussion today about networks. Over seventy industry leaders from across the UK. Was FTTH (fibre to the home) a good investment? Would FTTC (fibre to the cabinet) be cheaper and just as good? How do network operators reduce their costs?

I was surrounded by people all intensely interested in networks. One person (a Welsh MP) pointed out that the EU defined broadband as anything above 150kb/s and some other organisation had defined it is anything above 256kb/s (from memory). The UK government had so far not defined what it means by “broadband” and therefore the ambition to get broadband into every home by 2012 probably achievable simply by defining UK broadband as anything above 32kb/s.

However….During the discussion it was easy to get caught up in the hype and technology and how you could get 40Mb to the home. Would the customer pay for it, and how much?

Consumers don’t by broadband because they want broadband – sure early adopters and techys might get into a “my broadband is bigger than your broadband” type of discussion, but, as the actress said to the bishop, it isn’t about size its what you do with it.

Consumers buy broadband as a means of getting to content. In fact going back to the basic telephone service people wanted to talk to other people. The networks provided the connection and the consumers the content.

Technology and assets give companies a barrier to competition. Their ability to control and use the technology allow them to dictate the way it is used and who uses it.

The record industry is a good example – recording studios and vinyl pressing plants were expensive and inexcusable technologies for new companies to invest in and entre the market. They were certainly not in the reach of the consumer. But as new technologies came along so it eroded this control/power. Pressing plants were sold off as what differentiated one label from another was not how well the record was made but what was on it.

Broadcasters had technology but also had the benefit of limited radio spectrum. The licensing regimes of the UK and Europe, meant that it was difficult for new entrants to make the investment and take the risk to bid for a license. This additional barrier (lower in radio broadcasting) kept them in control and complacent, beyond the natural life of their business models.

Anyway back to networks… These too are starting to lose their power as one network (fixed line or mobile) starts to look very much like the other. Why chose one over another: –

1. Does it work?
2. Is there a cheaper one that works just as good?
3. Is it hassle to get/maintain?

What has changed for the network operators is that the desirable/compelling/valuable content that customers want to get to, is not user generated, point to point of voice and data.

So what do network operators (service providers) need to do? Do they want to simply survive or do they want to transform?

Railway operators never got into air transport. Yet they were wealthy organisations at the time and could have easily expanded. Enormous synergies in scheduling time tables, selling tickets, reservations, engineering operations, logistics of rolling stock/planes, and staff roles. But they were rail operators, stuck with the technology and not the transport market need they serviced.

Networks operators follow the same route, married to providing networks and not the fulfilment of the consumers’ demand for content access.

So how do I see the network providers evolving, as apposed to becoming a low cost commodity utility? One thought…

The telephone directory was a way of customers finding out information about what (or in this case who) was on the network. As the internet grows (around 5,000 pages/second in 2008) it is increasingly difficult for the consumer to find what they want. Google (fast as it is) is throwing up a mountain of information to sort through. How many pages am I going to visit before I find the information I was after?  You Tube. Very funny clips, but if I have to spend 50-minutes watch dross, to find a 3-minute gem, I’m going to start to rely on my friends sending me a link in an email. Much more efficient!

As content (quality, professional production) gets onto the internet, how does the consumer no it even exists, let alone where to find it.  Is there a role for the network provider to be trusted recommender or aggregator of content? Is that worth paying for? Collect information on what I like and sell it on, but let me see some benefit. And not just in the adverts

I think it is almost impossible to predict what the consequences will be if 40+Mb/s is delivered to the home but some indicators now are not good.

Of the population that can get broadband, the take-up is way less than 50%. So not the “must have” technology.

Of the people that do have broadband around 50% get less than 1Mb/s download speed. Assuming that they are putting up with this (as they continue to pay) if not delighted, then 4Mb/s would probably fit their current needs not 40Mbit. “What about HDTV?” I hear you cry. Does anyone want to stream live HDTV over the internet?

• If it’s a film or recorded programme = download it
• If its news = why HD
• If its sports = why are you not watching in on a broadcast channel

Take the scenario that there are two adults and two teenagers, each simultaneously watching a streamed HDTV programme. 10,000 lines in an exchange area x 4 40,000 video streams. Will the backbone cope –

“Some will be watching the same programme?” Even if they are if two people watch the same if they start at different times they are different streams.

“Cache the content in the local exchange!” for how long? 3 hours of HDTV per person adds up to a lot of storage.

I’m sure 40Mbit to the home will come. It could enable social change (maybe even a revolution) with people working from home and a growth in cottage industries, a reduction in travel and CO2 emissions. Our kids are already used to interacting and socialising and would probably be easy to adapt and adopt this working environment. But will we look at the society that creates with pride?

Market Surveys

Market research

Continuing the theme of measuring stuff… Measuring things gives a number, numbers are factual and absolutes, thereby giving the illusion that the results are scientific and trustworthy. Science would say that if you repeated the experiment (measurement) again, that you were more than likely come to the same or a very similar result. 

Market surveys, are a measure of consumer behaviour are frequently so badly designed that I often wonder what they do with the results. Everyone thinks they can design a questionnaire and I’m sure that some are designed by idiots.

I get frustrated when I want to give my opinion on a subject and get a question that is ambiguous, irrelevant or partial.

Example:-

Do you trust shop assistants in Dixons? Yes or no. 

Does this mean trust their expertise, honesty, that they are a shop assistant, only while they are in Dixons. If it means expertise, that depends on what product I’m looking for, their confidence, and the advice/answers they give.   

If I trust a shop assistant in one shop do they think I homogenise their entire workforce as being trustworthy (or not). Sure some shop seem to train (motivate) all there staff to sell the most expensive thing as fast as possible. But just because they push the extended warranty (something I don’t believe in) doesn’t mean I don’t trust them. I realise this is company policy and it is the company I don’t trust.

So you see an apparently simple question has lots of possibilities… and there is more!

A classic mistake with a survey, that I was once told (urban legend or true?) was to be careful who you ask. During WW2 they asked the crew of returning Lancaster bombers where they had been attacked from, by the German fighters. They answer was “From underneath”. So they improved the defences under the planes and found that the losses increased. Why?

Well they asked the returning crews. The ones that had got shot down where attacked from above and it was the defences on top of the plane that needed improvement.

What kicked this train of thought off was, I go asked to complete a survey on distance learning by the 20th April. But I don’t start the course until the 23rd and I am unlikely to have an opinion of any value for several weeks at least.

You Get What You Measure

Listening to the news today and there is a story about someone (an expert) advising language teachers to coach their students for the oral exam by practicing the conversation as scripts. The conversations are apparently recorded and an examiner listens to them to award a mark in an exam.

Is this cheating? If you don’t live in a country or community that regularly uses the language, then to some extent you probably are learning the language by rote. The exam is to test the student’s ability to be able to hold a conversation in a foreign language. In this case, the student can hold a specific conversation, but not an impromptu conversation. So I’d say it’s cheating! 

Why are they (the teachers) doing this? Well exams are not just about how good the student is. The exams are used to determine the teachers and schools performance. By having more students pass or at higher grades they (teachers and schools) improve there position relative to their peers. It probably means more money or at least less interference.

I was reminded of the need to cut down times on hospital waiting list. In this case time on the waiting list were cut but having “pre-waiting lists” or if the patient was going to be on the list too long referring them back to the GP and taking them off the list. All sorts of innovative ways to ensure those that were measuring this got what they wanted.

The police crime rate clear-up (the percentage of crimes solved) is measured and at one time they were doing deals with criminals that if they confessed to more crimes. So the crime clear-up rate went up but the amount of crime also went up! Why? Well once a crime had been “solved” there was no further investigation, so the real culprit was never found and was free to continue to commit crimes. And do we believe the statistic anyway?

A better measure would be to add up the amount of time officers spent in the community. To both help solve crime and to reassure the public.

Again those that were doing the measuring got what they wanted but like so many measures the effect and affect (or the action and results) are not linked as tightly as first thought.

So sales targets and bonuses result are difficult in these times. Innovative sales people insure they are associated with any deal that is about to be one, especially if its big. They spend more time monitoring their industrious colleagues then creating and closing their own deals. Lo and behold all the sales targets are met but the overall sales/sales person are falling. The company is blind to the true market position.

Boards of companies often have a measure on their performance that is related to the share price. If the price per share goes up they must be doing a good job! But being an innovative lot they organise the company to use its profit (or maybe take out a loan) to buy back shares from the market. Simple example: company worth £100m and 200m shares, value per share 50p. Company spends £50m and buys 100m shares now the company is still worth £100m but only 100m shares so the value of each share is £1. The board pat themselves on the back for their ability to double the share value and award themselves large bonuses on the back of their success.

So be careful what you measure as you will probably get what you measure, but not necessarily what you want.

Why don't they put puncture prevention fluid in all new tryes?

One of the things I do is ride a motorbike to work every day…

I started doing this when I was 18, the reasons, in order where;
1) I liked it
2) It was faster and cheaper than public transport.

I’m now in my 50’s and I took a break of about 15-years following a rear wheel tyre blow out, on the way to work one morning. I wasn’t badly hurt but we had two children under 5 and my wife wanted them to grow up with a dad.

I got back into motorcycling to work when in 2000 I bought a Moto Guzzi, an 1100cc shaft drive bike that the Italian motorcycle company had originally designed for the California Highway Patrol (CHiPs) – I was in my 40’s and my kids told me is was a mid-life crisis!

The reason this time: -
1) Its faster and cheaper than public transport
2) I don’t get sneezed on, in some overcrowded tube train and spend two weeks at home with flue
3) I like it - not as much in the winter now

My bike history is:
Suzuki 80cc (cant remember the model name but did go above 50mph)[circa 1972]
Ducati 350 MkIII [1972 - 1981]– the best bike I ever had. A single cylinder 350cc flat acceleration up to 80mph. Handled like a dream front break was double twin leading show (ie four shoes in one drum) better than a disc break. Temperamental and Italian electrics where awful but once you knew how to tickle it into life - it had a personality.
Then I had a Honda 50cc [1981-1982]– Honda 70cc [1982-1987] – these where good reliable work horses minimal maintenance (enclosed rear chain) it was in the 70 that I had the rear tyre blow out.
Motor Guzzi – [2000-2009] Nice bike but Italian finish is crap, wheels corrode and chrome plating rusts through. Engine great and electrics German so no problems there but had to change front and rear wheel bearings every 18-months or so. Almost as frequently as the break pads.
I’ve now go a Suzuki 400 cc scooter [2007 -]. Ideal manoeuvrability in town, with sufficient acceleration to keep you up with most motor bikes. Economical it's not. Why can you not get an MPG figure for bike?

Anyway one of the reasons for this blog is that blow out I had. Ever since then in all my cars and bikes I have used a puncture prevention fluid. Partly because my wife and later kids just get in a car start it and go – they never check oil, tyre pressure or anything else, and partly because I became a bit paranoid about a tyre suddenly deflating.

The benefits have been that most tyres I have treated have not lost a pound in pressure over their life. This has made their life far longer than it used to be. Fuel economy should have been better but difficult to tell when your kids are driving.

More importantly on the bikes I have had some serious tyre damage – If you drive a bike in London you will know of the debris that lies in the wake of a traffic island. This is a collection of flotsam and jetsam that is discharge onto the highway and never cleared up by the road sweepers.

In one relatively new tyre I had a 6” coach bolt, about 5mm diameter that had gone through the tyre tread and was poking out of the side wall. When I checked the pressure it was smack on 36lbs/in2. The puncture sealant had fixed the whole – unfortunately the damage to the side wall meant a new tyre. In the past I have simply pulled out the nail, or whatever, and kept riding without a problem.

It isn’t cheep but 1ltr will treat between 3 ad 5 tyres depending on their size and at £25+vat+shipping you will defiantly get your money back in the life of the tyre alone (unless you are some that checks you tyre pressure every week). When you take into account fuel economy benefits and the ability to get home if your on a bike. Finally, have you ever gone to get the spare out and found that in the last three years since you checked it has gone flat? Well this stops that too.

Check it out for yourself. Oko tyre puncture prevention http://www.okosales.co.uk/index.html