The Rapid Growth in Data Traffic Overwhelming Wireless Networks, Spurring Growth in Fiber Links

(Tuesday, Feb. 22)  Demand for wireless data services is growing faster than voice services, according to industry watchdog Berstein Research.  The success of smart phones and wireless PCs, connected to the wireless telephone networks through "dongles" have burdened networks and slowed traffic to a crawl. In the end of 2008, there were 189 million mobile broadband devices, which grew to 312 million in just twelve months. Data traffic grew even faster, at 158%, according to a report in The Economist magazine (Feb. 13, page 65). Cisco, the world's biggest maker of network equipment, expects mobile data traffic to grow 39-fold over the next five years.

The problem is that most cellular networks are not equipped to handle this vast new traffic load. AT&T, fat with success from the Apple iPhone, has seen their network hammered with a 5,000% increase in data traffic from the estimated 13 million iPhones on the network.

Because the frequencies available to cellular operators are limited, no new channels can be added to the networks. This means the available radio frequencies are becoming more congested. So capacity is created by "splitting cells" and re-using frequencies -- in effect, setting the transmitters to operate at lower power settings (they can be as powerful as 100 watts, but in urban areas they often are limited to merely 2-3 watts) and building more towers to cover the same area. As towers are "split" the number of towers required increases as a square of the distance. So If one tower covered a 10-mile radius, it may take three or four smaller, low-power towers to cover the same area and handle the data traffic. In the 1990s, there were 3,600 cell phone towers; the latest estimates put the number at nearly 246,000. One industry experts judges the number will have to triple to handle the required data load, which will mean more back-haul links to the cellular central offices and those links today are now high-speed fiber optic links.

Google to Invest in Fiber to the Home

(Friday, 2/12/2010)  Search-engine giant Google, Inc. announced yesterday plans to upset the apple-cart in the telecom and cable TV industries by investing in super-high-speed fiber optic networks directly to the home.

Google filed paperwork with the FCC about their plans to build gigabit-speed fiber optic networks directly to between 50,000 and 500,000 homes and businesses. The precise towns or regions were not named, as Google intends to ask communities to volunteer for the new service. Nor was the source of any content to be offered over the new network defined, which may put Google at odds with many of the major players in the industry today.  If the plan ever reaches the streets, this claimed capability will blow past all competing consumer services, most of which top out at 60 megabits/sec. 

Google apparently plans to make the network available on a wholesale basis to any internet service provider and is a further re-statement to competitors and regulators that "open access" networks based on "net neutrality" best serve the consumer. And, presumably, Google.

Google is, according to some, the most successful business ever created due to its exceptional growth, market share and financial strength. The company has over $24 billion in cash reserves.

The "experiment" is expected to cost between $70 million and $2 billion, which sounds low, according to some industry observers. Verizon Communications, for example, is spending $23 billion over five years to install fiber to 18 million homes. Another source estimates fiber to the home costs an average of $4,000 per home in rural area and falls to about $1,300 per home in suburban neighborhoods.

For more details, visit Google's web site where they are requesting local communities interested in the service to submit requests that their towns be selected for the service.