2 QITCOM 2012 - Stagg Newman (Next Gen Broadband)


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Lessons from Connecting America: The National Broadband Plan Perspectivesfor the MidEast

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  • SMILE THANKS Dr. Hessa, QITCOM organizers,and William Faban for inviting me to participate. Qatar thru its policies such as ubiquitous fiber thru QNBN is truly posed to be a world leader in communications infrastructure Will share perspectives that can be applicable to Qatar, MidEast and many other countries. IN PARTICULAR NEW SPECTRUM POLICY IS ESSENTIAL – TECHNOLOGY WILL ENABLE MOST OF THE WORLD TO COST EFFECTIVELY ACCESS ADVANCED COMMUNICATIONS AND SERVICES WIRELESS IF WE GET THE POLICY RIGHT. SPECTRUM IS THE KEY INPUT.
  • Anaysis an serve as a blueprint for all other countries. Key insights were incorporated into “Broadband: A Platform for Progress” , a UN blueprint that Paul Budde led …
  • Deep fact based analysis will expose the difference between aspiration and reality and may yield both good surprises and bad news. Example – fixed access goals in U.S. can be met for less than $100 per home for >90% of U.S. because of cable infrastructure rather than the >$1000 per home passed to move to FTTH. Enough headroom for 10 years. Adoption gap was not just about affordability ….
  • Voiceover: A: Providers bear the brunt of implementation costs but do not receive a proportionate share of the benefits B: Regulations have not kept up with technology advances and inhibit adoption Innovation threatened by regulatory grey area between communications networks, devices and software C: Data is not being used to drive innovative, interpretive research and applications D: healthcare providers have dramatic differences in ability to secure affordable broadband
  • Voiceover: A: Providers bear the brunt of implementation costs but do not receive a proportionate share of the benefits B: Regulations have not kept up with technology advances and inhibit adoption Innovation threatened by regulatory grey area between communications networks, devices and software C: Data is not being used to drive innovative, interpretive research and applications D: healthcare providers have dramatic differences in ability to secure affordable broadband
  • For voiceover: A: Lack of nationwide, interoperable broadband wireless network that meets requirements for coverage, reliability and resiliency B: 9-1-1 network infrastructure is decades old and relies on circuit switched technology; many public safety agencies lack access to broadband services to support next-generation 9-1-1 C: System provides limited amount of audio/visual messaging over broadcast and other entertainment media D: Reliance on broadband networks makes communications infrastructure vulnerable to cyber attacks
  • 2 QITCOM 2012 - Stagg Newman (Next Gen Broadband)

    1. 1. Lessons fromConnecting America:The National Broadband PlanPerspectives for the MidEastDocument typeDr. Stagg NewmanDateMcKinsey AdvisorQITCOM QATAR 2012CONFIDENTIAL2012March 5, AND PROPRIETARYAny use of this material without specific permission of McKinsey & Company is strictly prohibited
    2. 2. TRACKER GoalsCongress’s charge in the Recovery Act led to the creation of the NationalBroadband PlanUnit of measure Title A plan to encourage Unit of measure private investment and Congress said that the plan should: innovation Working Draft - Last Modified 3/5/2012 4:09:42 AM • “Ensure that all people of ______ have (w/ the exception of access to broadband capability and establish subsidies for rural America) benchmarks for meeting that goal.” • “[I]nclude . . . a detailed strategy for achieving affordability . . . and maximum utilization of broadband infrastructure and service” • “[I]nclude . . . an evaluation of the status Printed of deployment of broadband service” • “[I]nclude . . . a plan for use of broadband . . . in advancing consumer welfare, civic participation, public safety and homeland security, community development, health care delivery, energy independence and efficiency, education, worker training, private sector investment, entrepreneurial activity, job creation and economic growth, and other national purposes.”1 FootnoteSOURCE: Source | 2
    3. 3. TRACKER GoalsGoals of the National Broadband PlanUnit of measure Countries need pragmatic aspirational and achievable goals that reflect their people, infrastructure, and government Title • Goal No. Unit ofleast 100 million U.S. homes should have affordable access to actual 1: At measure download speeds of at least 100 megabits per second and actual upload speeds of at least 50 megabits per second. Working Draft - Last Modified 3/5/2012 4:09:42 AM • Goal No. 2: The United States should lead the world in mobile innovation, with the fastest and most extensive wireless networks of any nation. • Goal No. 3: Every American should have affordable access to robust broadband service and the means and skills to subscribe if they so choose. Printed • Goal No. 4: Every American community should have affordable access to service of at least 1 gigabit per second to anchor institutions such as schools, hospitals and government buildings. • Goal No. 5: To ensure the safety of the American people, every first responder should have access to a nationwide, wireless, interoperable BB public safety network. • Goal No. 6: To ensure that America leads in the clean energy economy, every American should be able to use broadband to track and manage their real-time energy consumption by 2020.1 FootnoteSOURCE: Source | 3
    4. 4. TRACKER GoalsWhat the NBP is? What it is NOT? ….Unit of measure What the National Broadband Plan is: Title ▪ Unit of measure A fact driven analysis of the state of broadband in the U.S. and the gaps between aspiration and reality Working Draft - Last Modified 3/5/2012 4:09:42 AM ▪ A set of recommendations (>>100) for the FCC, the Administration and Congress What the National Broadband Plan is not: ▪ A self-actualizing plan. Printed ▪ A new regulatory structure for the communications industry Most recommendations have Nevertheless, a wealth of valuable not been implement, many due analysis is available including the to political stalemate… entire plan, supporting analysis, Major breakthrough last month public input, workshops, etc at on Spectrum Policy www.broadband.gov1 FootnoteSOURCE: Source | 4
    5. 5. TRACKER GoalsGaps in the broadband ecosystem (circa 2010)Unit of measure In all but perhaps the most advanced Asian countries, the gaps will be similar while the specifics differ Title Unit of measure • Fourteen million Americans do not have access to broadband Availability infrastructure that can support today’s and tomorrow’s applications Working Draft - Last Modified 3/5/2012 4:09:42 AM gap (Fixed wireless access w/ LTE is best way to close gap) • 93 million Americans do not have broadband at home Adoption gap • Many Americans lack digital skills, even as many job openings are Digital skills posted exclusively online Printed gap • The U.S. ranks in the bottom half of comparable countries on nearly National every metric used to measure the adoption of health information purposes gap technology • Most of the U.S. electric grid is not connected to broadband • First responders are using outmoded spectrally inefficient narrowband communications technology that denies them access to broadband applications for public safety and health.1 FootnoteSOURCE: Source | 5
    6. 6. TRACKER Investment, and Competition Innovation,Several gaps may be hampering innovation, investment, and competitionUnit of measure Policy gaps will likely be very country specific. Need for more spectrum for broadband wireless is universal. Title Gaps measure Unit of Issues Need for spectrum • Spectrum for mobile competitors is likely to enhance mobile competition Working Draft - Last Modified 3/5/2012 4:09:42 AM • More spectrum may also allow wireless technologies to serve as closer substitutes to fixed broadband providers • Current data (commission and external) lack detail to make Lack of detailed data to granular competition policy decisions inform competition policy • Existing data collection does not allow comparative evaluation Printed • Consumers often do not know true performance of services Lack of transparency for purchased consumers • Consumers generally unaware how their own actions, along with internet characteristics, can affect performance • Well functioning wholesale markets can help foster retail Patchwork of wholesale competition regulations • Todays wholesale access policies were developed without reference to a consistent analytical framework1 FootnoteSOURCE: Source | 6
    7. 7. T TRACKER Spectrum Trends in demand and supply suggest a looming spectrum gap Unit of measure Moreover with sufficient spectrum wireless BB is the best way to serve “unserved” areas. Title Unit of measure Forecasted mobile data traffic in North America Need to transform Working Draft - Last Modified 3/5/2012 4:09:42 AM spectrum policy to meet wireless broadband demands •300-500 MHz more spectrum for mobile broadband •More spectrum Printed Mobile broadband spectrum pipeline for unlicensed and new paradigms •Incentive auctions •Wider blocks of spectrum 1 Footnote SOURCE: Source | 7
    8. 8. TRACKER SpectrumPolicy changes needed for a range of issuesUnit of measure Title Gaps Issues Unit of measure Lack of transparency in • Current allocation and utilization data is largely Working Draft - Last Modified 3/5/2012 4:09:42 AM allocation and utilization unattainable and often esoteric Few spectrum reallocation • FCC needs at its disposal multiple tools for reallocating tools underutilized spectrum to next-generation users • Wireless broadband growth is causing network strain that Insufficient capacity for will intensify with next-generation technologies broadband • Spectrum can take years to reclaim Printed • Growing need for expensive backhaul services, including Suboptimal backhaul microwave deployment • Access lacking in terms of capacity, flexibility and affordability Access models limited • Opportunistic access to spectrum is limited to certain bands • Demand for unlicensed spectrum among key stakeholders • There is no framework for identifying future spectrum bands Policy scope too bounded and needs1 Footnote • Coordination of multiple domestic and international stakeholdersSOURCE: Source | 8
    9. 9. TRACKERInfrastructureGovernment regulation and policy affects deployment decisions.Unit of measure Enlightened policy can lower input costs and speed time to market. Title Gaps measure Unit of Issues Too costly to access poles • Pole rental rates affect cost of broadband in rural areas—up to 20% of a rural subscriber’s bill Working Draft - Last Modified 3/5/2012 4:09:42 AM and other infrastructure • “Make ready” charges for poles can constitute >10% of cost of deployment • Multiple sets of sometimes inconsistent rules and policies • Different rates for pole attachments based on category of Policies affect deployment service offered affects upgrade and service decisions decisions • Failure to consider broadband as part of public works projects at planning stage can drive up costs substantially Printed Time to access and resolve • Disputes over poles and ROW access linger for months, years; many states have better policies and timelines disputes • Near-constant litigation on scope of privately-owned pole, duct and conduit access rights Lack of information and data • Data on infrastructure availability not uniformly kept or on infrastructure updated • Processes and fees for use of public rights-of-way and gov’t1 Footnote facilities for broadband facilities disparate and variedSOURCE: Source | 9
    10. 10. TRACKER InclusionMaking broadband availableUnit of measure Availability policy must be driven by deep analysis of a country’s people Title Unit of measure Create a new Intercarrier Create a new Working Draft - Last Modified 3/5/2012 4:09:42 AM Connect America compensation Mobility Fund Fund reform Support universal availability Target funding to states that are Eliminate inefficient and of broadband and high-quality significantly lagging national irrational economic voice grade service with at average for 3G coverage behavior least 4 Mbps actual download/ Encourage transition to IP- 1 Mbps upload speeds to-IP interconnection Printed Develop expedited process to Staged transition away from target funding to unserved per minute rates to allow areas, shifting funds from companies and investors to legacy programs prepare Provide support where there is Provide opportunity for no private sector business adequate cost recovery case to offer affordable service Encourage innovation with a technology- and provider- neutral program1 FootnoteSOURCE: Source | 10
    11. 11. TRACKER AdoptionAdoption by demographic & socioeconomic segment –in-depth surveyingUnit of measure Key reasons for non-adoption Title Cost – 36% ▪ 15% - monthly fee for service Relevance – 19% ▪ 5% -- content with dial-up ▪ 10% cannot afford a computer Unit of measure --- activation fee/contract ▪ 5% -- internet is a waste of time ▪ 9% ▪ 4% -- Nothing to see Digital literacy – 22% ▪ 4% -- Don’t use it much ▪ 12% -- lack of comfort with computers Remaining reasons: ▪ 10% -- hazards of online life ▪ 15% -- other or combination of several reasons Working Draft - Last Modified 3/5/2012 4:09:42 AM ▪ 5% -- not available where they live Percent of American adults ▪ 3% -- can use the internet all they want at work 100% 93 90 86 84 80 77 75 74 68 69 70 64 60 59 59 55 Printed 50 49 50 40 40 35 30 24 20 10 0 Less High Some College Less $20K $40K $75K Non- Rural 18-29 30-49 50-64 65+ White Black Hispanic* than School college + than to to + rural High $20K $40k $75K School1 Footnote *Hispanics includes both English and Spanish speaking Hispanics;SOURCE: Source | 11
    12. 12. TRACKER AdoptionFramework for recommendations – an exampleUnit of measure Title Unit of measure 1 Launch a three-part National Digital Literacy Program Working Draft - Last Modified 3/5/2012 4:09:42 AM Expand low income universal service support to 2 broadband (see USF) 3 Focus on “relevance” through public/private partnerships Printed Improve focus on evaluation, measurement, best 4 practices, and state-level initiatives Accelerate efforts among low-adopting groups facing 5 significant social or physical barriers1 FootnoteSOURCE: Source | 12
    13. 13. TRACKER National Purposes The national purposes mandateUnit of measure Title American Recovery and Reinvestmentof measure Unit Act, §6001(k)(2) (D): Healthcare Working Draft - Last Modified 3/5/2012 4:09:42 AM “a plan for use of broadband infrastructure and services in: ▪ advancing consumer welfare Education ▪ civic participation ▪ public safety and homeland security ▪ community development ▪ health care delivery ▪ energy independence and efficiency Energy and ▪ education the environment ▪ worker training ▪ private sector investment Printed ▪ entrepreneurial activity Government performance ▪ job creation and economic growth ▪ and other national purposes.” and civic engagement Economic opportunity Public safety and homeland security1 FootnoteSOURCE: Source | 13
    14. 14. TRACKER Public SafetyGaps persist in fully utilizing broadband for public safety and homelandsecurity purposesUnit of measure Gaps Title Issues No nationwideof measure Unit public safety No nationwide, interoperable broadband wireless network that is ubiquitous, redundant, and resilient network Few public safety agencies have access to commercial Working Draft - Last Modified 3/5/2012 4:09:42 AM wireless mobile broadband Commercial broadband does not support public safety requirements and is not cost effective Outmoded 9-1-1 system 9-1-1 services utilize varied legacy communications networks Few public safety agencies have access to broadband services to support next-generation 9-1-1 Printed Outmoded alerting system Current distribution technology limits amount of audio/visual to Americans over broadcast channels FEMA has taken steps to develop IPAWS but clear implementation milestones are needed Critical infrastructure Companies reported $265M+ in cyber crime-related losses Communications providers subject to frequent attacks on critical vulnerabilities IP-based infrastructure Insufficient incentives and safeguards for security of critical1 Footnote communications assetsSOURCE:Internet Crime Complaint Center Source: Source | 14
    15. 15. TRACKER Public SafetyInnovative public private partnership can lower the costs of a nationwideUnit of measurebroadband public network from >>$20 Billion to < $10 Billion Feb. 2012: Congress passes enabling legislation for BB PS network with public/private partnership Title Unit of measure Solution for Reliable, High Coverage Mission Critical Voice, Data, & Video 4G Services Working Draft - Last Modified 3/5/2012 4:09:42 AM For exceptional times and places when PS & Deployable Equipment Caches commercial infrastructure is insufficient (e.g. wilderness) Deployed and controlled by PS or has been destroyed Coverage deep inside large DAS and Picocell Systems buildings and capacity for high pedestrian density (e.g., shopping In-Building/Underground Coverage in PS centers) can only be provided by Spectrum in-building solutions Printed Provides access to additional capacity Commercial Wireless Networks during emergencies, as Public Safety Roaming and Priority Access well as increased network resiliency Enables high coverage Public Safety Broadband Wireless Network communications, resilient coverage and guaranteed Public Safety’s Dedicated RAN using Commercial cell sites and core access in a cost effective manner leveraging commercial assets1 FootnoteSOURCE: Source | 15 4
    16. 16. TRACKER for all countries ImplicationsLesson for all upon reflection 2 years laterUnit of measure• Realizing the public good from BB requires addressing a complex set of factors that include availability, adoption, and national purposes that Title are country specific and political. Unit of measure Working Draft - Last Modified 3/5/2012 4:09:42 AM• Wireless will drive the next “Big Wave” of innovations, provide exciting applications and services and be the most capex efficient way to provide broadband to “unserved” people and areas but …• Spectrum policy must be dramatically changed to realize this potential: More licensed spectrum and More unlicensed Printed Innovative approaches (e.g. incentive auctions) to create more efficient usage Wider blocks of spectrum• Understanding the barriers and solutions to greater adoption and requires deep analysis of both users and non-users of broadband • Innovative public private partnerships provide more capex efficient methods to meet national purposes (e.g. BB Public Safety).1 FootnoteSOURCE: Source | 16