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Incentive auctions: Preparing for the Avalanche of Data

It’s begun!  The US Federal Communications Commission (FCC) today launched an important new proceeding that, together with a lot of hard work and some policy leadership, will allocate much-needed radio spectrum for broadband.  Called “incentive auctions,” the concept is relatively simple – ask the broadcasters how much they want for their licenses, decide which broadcaster “bids” to accept, repackage that spectrum and auction it off to mobile carriers.

We at Cisco know first-hand the pressures our carrier customers face, as consumers continue to adopt more and more powerful mobile computing devices – phones, tablets, laptops and more.  Cisco’s Visual Networking Index has illuminated for policymakers the dimensions of the transition by consumers to data and video.  In the US, Cisco projects mobile data will increase 16 times from 2011 through 2016, to 1.7 exabytes per month, up from an estimated 0.2 exabytes per month in 2012.

All those packets use radio spectrum, and as we’ve seen this year from the acceleration of deal-making among holders of spectrum, there is a scramble on to find enough spectrum to ensure that consumer demand can be met.  Even with these deals, carriers must have more spectrum, and the next place where it will be found is the UHF television bands.

Incentive auctions represent the first time a regulator will create a market mechanism to allow broadcasters to exit their spectrum in exchange for compensation, permitting the FCC to repurpose that spectrum for mobile broadband.

Among the key issues to watch:

  • Will the FCC be able to keep this proceeding on track to culminate in auctions in 2014?  By then, spectrum needs will be critical.
  • How quickly will the FCC articulate clear and comprehensive rules that will allow broadcasters to make an informed judgment about whether to participate?
  • Has the FCC correctly implemented Congressional direction to permit unlicensed use in guardbands to the extent technically reasonable to present interference to adjacent bands? Have they proposed too much unlicensed? Not enough?
  • And one issue Congress will be watching closely. Does Congress think that the sum total of the FCC’s proposed rules mean that the FCC will realize enough money to fund the new public safety broadband network at $7 billion, in addition to deficit reduction?

The undertaking begun today is huge. The FCC, which invented spectrum auctions back in the 1990s, will now call “incentive auctions” to life.  They are the world’s experts on these topics and there will be a lot of detailed conversation in the next months. Cisco, carriers and consumers will be watching.

Government and Industry Leaders Want Broadband Everywhere

The latest update of the Visual Networking Index (VNI) forecast of Internet protocol (IP) data traffic from 2011 to 2016 is just astonishing. At the top level, global IP traffic growth is exploding at a CAGR of nearly 30% with much regional variation across the world, and different technologies and applications gaining share.

To explore the implications of the VNI forecasts for countries, consumers and corporations, I hosted a panel of experts with a wide range of policy, technical and industry experience. Joining the discussion were:

Diego Molano Vega: Colombia’s Minister of Information Technology and Communications

Daniel Weitzner: Deputy Chief Technology Officer for Internet Policy, Office of Science and Technology Policy at The White House

Kathleen Abernathy: Chief Legal Officer and Executive Vice President of Frontier Communications; and former Commissioner of the Federal Communications Commission

Kevin McElearney: Senior Vice President of Network Engineering at Comcast

The panel discussed a wide range of issues, with three key take-aways:

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Internet Traffic Continues to Explode, No End in Sight

“In 2016, over 1.3 Zettabytes of data will travel across Internet protocol (IP) networks. That’s over 10 times the traffic generated in 2008 and more than all the IP traffic that traversed global networks from 1984 to 2012 combined (1.2 Zettabytes).”

This estimate is from the latest Visual Networking Index (VNI) released today by Cisco which forecasts IP network traffic patterns from 2011 to 2016. The annual VNI rolling five year forecast has become a trusted industry barometer for how rapidly the use of global IP networks is expanding.

So what’s driving the explosive data growth?

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Getting to the UN Broadband Commission’s 2015 Goals

Earlier this week, I attended the UN’s Broadband Commission meeting in Ohrid, Macedonia, where we discussed initiatives to reach the Commission’s goals by 2015:

1) All countries have national broadband plans;

2) Broadband is affordable in developing countries so that entry-level broadband services cost less than 5% of average month income;

3) Broadband is adopted by 40% of households in developing countries; and that

4) Broadband penetration reaches 60% of the worldwide population and 50% in developing countries

To support this vision of an ever expanding Internet that people see as essential, Cisco sponsored the 83rd Internet Engineering Task Force (IETF) meeting last week in Paris. At the IETF, more than 1,400 of the leading Internet engineers and technologists from around the world gathered to further develop the standards which provide the foundation for Internet services such as domain names, email, the Web, and instant messaging.

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Policy Implications in the Rise of Mobile Broadband and Heterogenous Network Access

Over the last few months, a growing consensus has emerged pointing to a dramatic change in the way people access the Internet.

In 2011, for the first time ever, worldwide annual demand for smart phones surpassed that of PCs, laptops and tablets combined. Then last month our Mobile Visual Networking Index (VNI) Update reported that global mobile data traffic is growing even faster than previously forecasted and will increase 18-fold over the next five years.

So by this year’s Mobile World Congress in Barcelona in February, the ‘top of mind’ for network operators, government officials and device manufacturers was the dramatic accelerating impact that mobile data consumption will have on Internet access, networks and users.

When we launched the mobile VNI report on February 14, a panel of industry, academia and government experts glimpsed into the future of mobile broadband and related policy issues, with three key takeaways:

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