Today in Germany is a national holiday, so I'm reading the press review while having breakfast. And obviously, due to my work, the eye fell on an article. It concerns telcos and the phenomenon that concerns them, namely disintegration.
The article is this:
I know very well what the populism of "consumer associations" says, which are those companies born to pay a salary to the founders. But the problem exists, because the telcos are selling their own infrastructure.
And I could continue in the USA. What happen? It happens that the telcos have broken their balls to keep the various Youtube, Facebook & co, at their expense.
Many of you, I believe, have Facebook. Facebook moves petabytes and petabytes of data, without paying a penny for the access network, which is the most expensive part.
Let's take an example: tomorrow youtube will switch ALL videos to a more expensive codec, with more resolution and more bandwidth. This requires an extra effort from the telco access network, of course. The telcos, in order not to be overtaken by the competition, will invest to improve the network. And then you will be able to see your Youtube in the new format.
Who does the proceeds from all this investment go to? To youtube. Certainly not at telcos.
Question: how long did you think a business could last in which Tizio does NOT invest, Caio invests, and all the profits go to Tizio but not to Caio?
It is as if a container monopolist arrives and tells the railways that he wants to transport the containers for free, and he also wants to transport more: asking the railway company to invest further, but without earning anything. What would happen in a short time?
Obvious: it would happen that the railway company would stop dealing with containers, doing only passenger traffic.
That's what's happening. Telcos are selling their infrastructure to funds, which will then unbundle it and perhaps sell it in pieces. And I know, because they're already working on it.
And I know they're working on it because I'm working on it too. Unbundling of access networks is big business today.
So imagine what happens if Netflix arrives and decides to raise the resolution of its films, or Facebook invents you the metaverse and says it wants less latency, that is, fiber everywhere. And I'm not talking about the world of e-sports.
Of course, there is the promise that using a disaggregated network we can do edge computing and put instances of the metaverse or CDNs directly into the CO, minimizing latency. The 5G network, to say, is already a disaggregated architecture, thanks to ORAN and other things that I don't want to describe in detail.
But the problem remains. Who pays for these investments? Do you pay facebook? Do you pay Netflix?
No. They have to pay the telcos, and in the past the European legislator has also arrived to regulate prices, removing roaming costs and lowering prices artificially, and as if that were not enough a pile of idealistic balls said that no, Facebook has the right to the popular price band, and made net neutrality.
Result: the telcos no longer want to maintain the access network, and focus on the carrier part. FIG.
It is no coincidence that, apart from some happy islands where development is paid for by the government (ie by users, in the form of taxpayers), neither bandwidth nor latency nor coverage are making significant progress.
You can't go to a CDA and say you want to invest billions if you don't explain to the CDA how those billions will return. Investments have to pay off, or they don't.
For a few years it has been done, and some CDAs have bought into the story of investing and then recovering from VAS services, Value Added Service. But now they don't drink it anymore, because it is well known that EVERY SEA today is in the hands of GAFAM.
A kind of oligopoly of equipment manufacturers fits into this. The usual Nokia, Ericsson, Juniper, Cisco, etc etc. Who sell devices as if they were space science (when the technology they use is modest, and largely opensource for the software part – not updated -) and continue to announce news as if they were the thing that will make us all beautiful , rich, tall and blond.
For the uninitiated: 5G is already obsolete. Far from its full adoption, 6G is coming. And it makes you all beautiful, rich, tall and blonde, long before you realize that 5G does nothing but half of what 4G promised you.
So, while telcos pass out to implement 5G without having a shred of service that can be implemented in order to have a return on investment, soon they will start siphoning your balls with 6G, which will make you all beautiful, and rich, and tall and blond. and it will also give you the pea, doing what 4G promised you, and 50% of what 5G promised you, (but the promises, you know).
And so on, the telcos will still have to put their hands in their pockets and throw money away, while the usual GAFAMs are the only ones who gain. But in doing this they will buy a lot of very expensive and overrated boxes from the various Nokia, Alcatel Lucent, Ericsson, Juniper, Cisco, Mavenir, etc etc (I don't remember them all).
It is clear that it cannot work. The model is not sustainable.
For these reasons, the telcos are selling their infrastructures, that is, they are trying to dislodge them. Those who try to sell them to the state to ensure that the investments are no longer in the bill but are taxes, those who have already sold them to "funds", which will squeeze the infrastructures until they work, with a minimum of maintenance, then when an area sucks they will resell it to some local municipal company.
In short, an unsustainable market.
I would like to spend a few words on the various charlatans "of the good principles of the Net", who then lobby for the GAFAM, looting the coffers of the telcos.
The first are the idiots of "net neutrality", that is, those who want connectivity to be paid for by Facebook at a popular price. Since Zuckerberg is poor, then you have to help him because the access network is his human right, and you have to prevent him from paying as if he were rich.
Sure, they sell it as a "user-friendly" thing, forgetting that a network connection has TWO ends, and on the other is Facebook. If I lower the cost of that connection, I didn't lower it just for the user, BUT ALSO for Facebook.
So, I repeat for the pirate party crooks who have never seen an OLT in their life and don't know the difference between GPON, XGPON, XGSPON, this simple concept:
Your connection to Facebook has TWO extremes: on the one hand there is you, on the other there is Facebook. If you keep the price of the connection low, you save two euros a month, Zuckerberg earns eighty billion more a year. Balls.
Moreover, you have supported net neutrality by saying that it was not right that the richest go faster on the backbones, forgetting the access network, and forgetting the fact that the Hyperscalers already make them themselves, and therefore they go. HOWEVER faster. You just gave him the access network. Because you are stupid.
The second is the European regulator. The problem of making decisions unanimously puts the EU in the slavery of small nations. Obviously, small nations are against nationalization: countries like France, Germany, Italy can nationalize much more than small ones.
And so, woe betide TIM if TIM sells the network to the state. So two things will happen:
- TIM sells the network to an American fund which then makes it go as long as it can, without investments, and when it falls apart, it sells it to some municipal company.
- TIM dismantles the network and sells it to some municipal companies, in small pieces, so as not to fall within the aims of the European regulator. (one day he sells the Emilian access network to Hera – I'll give an example I know – another day he sells the Lombard one to Metroweb, etc).
This thing has been discussed for months now, in Germany there are the StadtWerke, that is the municipal companies, in France there is the state but also the municipal companies are being created for this purpose, and so on.
The fanatics of "net neutrality" would ask me if they would not have preferred Facebook to pay for the access network: I would like to understand what "net neutrality" they will have, when Metroweb (Lombardy) or Hera (Emilia Romagna) users will be, OBVIOUSLY, covered, fast and not very latent as those of the Internet Calabria, (for obvious economic reasons of the territory)?
The next question you will have will be: are you a technologist, there are no technological solutions to this? Is it possible that the network still costs so much?
The answer is yes, there are technologies at stake. It's how I pay my bills, an American would say.
Here, the problem is that the access network would not cost so much if there were no kind of cartel between producers of "boxes" (BNG, Edge Router, Spine Switch, OLT, etc etc) that keep prices artificially high. And when Huawei caused a price drop, you discovered that "Huawei spies on you". The others obviously NOT: the MANDATORY compatibility with LIBs (Lawful Interception Boxes, which are attached in EVERY fucking BNG) is there by pure chance.
The technological solution is called “Disaggregation” and that's what I do for a living. Take a device that was previously so proprietary that even the color of the box is patented, and remake it using opensource and commodity hardware (normal servers, smart NICs that are on the market, etc). The opensource software exists, you can find it on https://opennetworking.org/ , and it's a whole galaxy that I could talk about for days and days.
It happens that you can spend 50.60 thousand euros for an apparatus that cost you half a million. Cool?
No. Because not only the greats of the "proprietary boxes" have men everywhere shoveling shit on the idea, which has also already been deployed by large telcos (but I don't mention names, but experimentation is advancing everywhere), and in more 'in large private companies corruption by suppliers has an endemic dimension, which the public has never even dreamed of.
So yes, it is possible to lower costs by unbundling the access network, but the lobby of these proprietary box sellers is acting on the legislator by imposing liability requirements that no one had ever felt the need for, with the express purpose of stopping unbundling.
So yes, the technological solution exists, but like Linux the pioneers will have to work hard before they penetrate the walls of Mordor. We have against both lobbies and corporate corruption. (which by the law is not even so, so don't shit my shit by saying that I'm accusing people of committing crimes. It's a usual practice).
The second important word is FWA. This is a technology that is based on the flexibility of the ORAN, which is based on a model that is already very disaggregated, and allows you to replace the last mile with a fast 5G connection, at least in urban areas (but also in the villages). is being tested as a replacement for WIMAX).
The advantage is to replace the fiber, which costs money, deteriorates more easily than copper, and is subject to uncomfortable geopolitical situations, such as the rare earth monopoly. (let's be clear, not even copper is so exempt from the problem).
The perplexity that there is about FWA is that the millimeter frequencies of 5G are not very penetrating, so it is not at all obvious that everyone can use them to the maximum in indoor situations, and it really takes a LOT of cells to cover large and dense areas, like the Po Valley.
Another question will be: but why don't the GAFAMs build their own access network, as do the datacenters and the carrier part already?
The reasons are manifold.
- It costs. Google tried to make Open Fiber, and it got very badly done: not for nothing is it still limited to two American cities. The point is: on the technological level google has not been the best for 10 years now, and they do not have the skills to create an access network. Trust me, it's not as easy as it sounds.
- The regulator. Login networks are not like social networks. You can keep Facebook down for six hours and nothing happens. If you keep the access network down beyond the state SLAs (for emergency calls) you pay penalties of hundreds of thousands of euros per zone per second. (in Germany it is per minute, but the figure is much higher than in the places where it is done per second). The gafams do not know how to build systems capable of staying on ALWAYS, thus guaranteeing emergency calls (police, firefighters, ambulance, without which today it would be chaos).
- Why never? They realized that since the telco makes you pay your bill, you don't like it. While Facebook which is free is nice. And with this sympathy it is possible to push politicians to have the telco maintain the access infrastructure needed by the GAFAMs.
So yes, since you are idealistic morons who believe in Net Neutrality, that is, you believe that Facebook has to buy the band at a popular price, you have managed to impoverish the telcos you are asking for investments.
What will happen'? In fact, what's happening already?
It is happening / it will happen that:
- you will see telcos shedding their infrastructure by "monetizing" cells and cables.
- initially everything works as before, except that no one invests anymore (Blackrock with the fuck that falls: the Verstager if they buy it and use it as a succulent plant in the reception)
- Slowly, one piece at a time, the network is (un) sold to local municipal companies, in small pieces so as not to activate the European regulator.
In the end, Calabrian readers will write to me asking me if it is right that they go bad while other Italian regions are faster and have better latency.
And my answer will be “enjoy net neutrality, pirate I'm par of balls”. Let me be clear: HAIRY par of balls.
Because when you don't understand that "consumer" is the same word as "laggente", and you don't understand that consumer associations are just populist parties that don't run for elections, it will be too late.
In the meantime, the howler monkeys will get what they deserve.