Telwares mentioned in dark fiber article

From Bill Snyder’s colum:

From feast to famine: Dark fiber gets hard, and expensive, to find

Early in this about-to-close decade, fiber optic cable was going to be the answer to everyone’s bandwidth problems. Before the dot-com bubble burst, “everyone who owned a right of way, from railroads to telcos, got greedy and started laying cable,” says Glenn Ricart, an Internet pioneer who is now CEO of National LambdaRail. Not surprisingly, the result was a glut of dark (this is, unconnected and unlit) fiber that lasted for years.

But prices are soaring as the shortage disappears. And it could affect the connectivity choices open to enterprises.

Dark fiber can provide high-speed connectivity at a low cost. Instead of paying telcos to incrementally adjust the bandwidth on a physical link as needed, dark-fiber customers can simply light up the circuit with inexpensive 100Mbps or 1Gbps termination gear. What’s more, the use of dark fiber means the circuit can be used for other protocols as well, not just IP.

Until this year, prices were generally reasonable, but have doubled in the last 12 months as the inventory of dark fiber shrinks. By contrast, prices for lit fiber have gone up just 10 to 15 percent, says Ricart.

One reason for the big uptick in prices appears to be a surge of buying by Google and perhaps Amazon.com and Microsoft, which will need ever more bandwidth as they expand efforts in cloud computing. “Google has bought an awful lot of dark fiber from people like us,” Mark Lewis, director of service development at Interoute said at an industry conference in November. It’s not hard to see the connection between cloud computing and fiber: If services are located outside the enterprise, there’s a much greater need for connectivity. Cloud computing still plays a relatively small role in enterprise IT, but buying fiber now is an insurance policy against the day when capacity is needed.

Meanwhile, companies holding dark-fiber inventory have taken portions off the market to push prices even higher, Ricart says. That’s a tactic that wouldn’t work if there weren’t an imbalance between supply and demand in the first place.

Ultimately, the market should correct itself, says Michael Voellinger, executive vice president of IT and telecom consultancy Telwares. “The investment opportunity surrounding low-latency capacity solutions in the context of the cloud and bandwidth-intensive applications and content is enormous. The dollars will flow into fiber,” he says.

Voellinger expects the shortage to be short-lived. But it took about nine years for the glut to turn to a drought, so it’s not at all clear how long it will take for the balance to swing the other way.

The shortage is not uniform, notes Ricart. Enterprises in the largest markets can still find the capacity they need, but in second- and third-tier cities, there is a crunch. His advice: “If I were a CIO in a lower-tier market, I would think about locking in connectivity.”

Telwares CEO Charlotte Yates on spectrum and network optimization

From Bill Snyder’s column:

Wireless broadband woes are harder to fix than you might realize

AT&T has taken a huge amount of heat for its subpar 3G performance. Much of the criticism is well deserved, but there’s a larger, more disturbing truth: We’re running out of wireless spectrum. What’s more, networks designed to handle big downloads can’t cope with the peer-to-peer traffic generated by games and smartphones.

“No one was prepared for the effects of [Apple's] iPhone,” says Charlotte Yates, CEO of Telwares, a telecom and IT infrastructure consultancy. Sure. You’ve heard that before, but Yates explains that it’s not just the amount of traffic, as many of us suppose, but the type of traffic, that poses difficulties.

Consider your iPhone, Droid, Pre, or similar device. Much of the time when it’s in your pocket or purse, it’s actually pinging the network to see if you have e-mails, stock updates, or news alerts. Most of those chunks of information are rather small, but when added to the constant polling of the network, they consume lots of resources. Similarly, multiplayer games, Twitter, and social networking sites used on wireless networks are constantly refreshing and pulling down data on what individuals are doing and broadcasting it.

There’s also a less-than-obvious problem caused by big downloads of things like HD video. Networks, says Yates, are designed for two-way communication. In effect, the network is waiting for traffic to come up the pipe and consuming a certain amount of resources as those channels are idle. Thus, massive downloads actually cause both downstream and upstream problems — stress the networks weren’t designed to handle.

“Carriers handle network management differently — even if one carrier is optimized, another may not be. And because networks are connected, the weakest link sets the pace,” Yates says.

Spectrum, like water, is a resource you don’t think much about — until it runs out. And that’s a major challenge facing carriers, consumers, and the government.

“I believe that that the biggest threat to the future of mobile in America is the looming spectrum crisis,” said FCC chairman Julius Genachowski at the CTIA conference in October. He predicted that total wireless consumption could grow from 6 petabytes a month last year to 400 petabytes by 2013. (A petabyte is 1,024 terabytes.)

“So we must ask: What happens when every mobile user has an iPhone, a Palm Pre, a BlackBerry Tour, or whatever the next device is? What happens when we quadruple the number of subscribers with mobile broadband on their laptops or netbooks?” Genachowski said.

Right now, there’s approximately 834MHz of total spectrum available (including 50MHz about to be added), but the FCC believes that most of it — 760MHz to 840MHz — will be needed by 2010, leaving little for future demand. The commission may well expand that, but there will be competition beyond the wireless industry to use it, particularly from the military and emerging entrants to the marketplace, says Yates.

A December 2009 report from Morgan Stanley shows that peak wireless data usage in the United States routinely exceeds 75 percent of capacity, which is a danger sign for carriers, as the figure below shows. Much of that is due to iPhone users, who use the Internet much, much more than other smartphone users (though Android users are beginning to take significant advantage of the Web as well). The financial firm expects AT&T and other carriers to have boosted capacity significantly by 2012 at its cell sites, where much of the bottlenecks occur that frustrate users, thus reducing peak demand to 60 to 70 percent of capacity.

The wireless industry has wrestled with capacity challenges in the past. In the 1990s, AT&T added Digital One Rate plans to its offering. This “one rate” deal was an overwhelming commercial success, adding hundreds of thousands of subscribers — but also overwhelmed a network that wasn’t ready or optimized to receive them in such short order, recalls Michael Voellinger, executive vice president of Telwares.

AT&T, Verizon, and the other major carriers have plenty of responsibility for the limpid 3G service, but if they are to avoid another, much broader meltdown, a lot of players — including the FCC — had better start moving to solve network management issues and the shortage of spectrum. Consumers may even have to moderate their desire for the most bandwidth-intensive applications.

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