Analysis

Special Report: All Eyes on 4K

Will Telecom Companies Be Able to Manage the Bandwidth Needs?

By: J. Angelo Racoma

Recently, US President Barack Obama expressed his administration’s support toward Net Neutrality, citing the importance the Internet plays in the exchange of information. “By lowering the cost of launching a new idea, igniting new political movements, and bringing communities closer together, it has been one of the most significant democratizing influences the world has ever known,” he said in a statement. With this in mind, he has asked the Federal Communications Commission to take “common-sense steps” in ensuring access to the Internet does not prejudice the source or type of content.

Obama highlighted four proposed rules that aim to ban blocking, throttling and paid prioritization, as well as require an increase transparency in the way Internet service providers manage traffic. Net Neutrality has actually been a contentious issue for over a decade now, and Obama himself actually included Net Neutrality among his administration’s priorities during his campaigns. With the trend in content moving toward richer and higher-definition media, there is also a need for bigger pipes with higher capacity to support the need for increased traffic.

4K and data caps

4K is one such technology that will require a change in how users and telecommunications providers consume and manage content. Also known as Ultra HD, this type of content is displayed at 4,000 pixels across — nominally 4,096×2,160px or 3,840×2,160px for 4K TV sets — which is about four times the current popular HD standard 1080P. At this resolution, video would come at 350 megabytes per minute, and this is in compressed form. A two-hour movie could easily consume about 42 GB of data allocation, which is well beyond most smartphone data plan monthly caps.

Video streaming could be a solution, such as Netflix’ move to offer House of Cards at 4K streaming. This require connections of at least 15.6 Mbps, and even then, compression resulted in a not-so-favorable viewing quality for many.

Critics of Net Neutrality cite quality of service (QoS) as among the arguments against a free and open Internet. While it’s easy to dumb down the argument as a slowing-down of the Internet due to larger traffic volumes, carriers justify the need to throttle down speeds for large file streaming or BitTorrent transfers all in the name of QoS. For example, the AT&T has been found to throttle customer speeds by up to 80 to 90% after consuming 2 GB of data, prompting the FCC to lodge a lawsuit against the company. Likewise, starting October 2014, Verizon users who fall under the top 5% in terms of “unlimited” data usage would also experience slowdowns. “They may experience slower data speeds when using certain high bandwidth applications, such as streaming high-definition video or during real-time, online gaming, and only when connecting to a cell site when it is experiencing heavy demand,” said a Verizon statement clarifying its “Network Optimization” schemes.

The main goal of such optimization is to ensure QoS for the majority of users who only require sparing use of their data plans, which may be for casual web browsing, instant messaging, email and social networking. Heavy usage, such as downloading of multimedia content, would be too taxing and might result in slow-downs for everyone else. However, one basic tenet of Net Neutrality is that, if properly enforced, it should theoretically lead to improved competition on the grounds of QoS, regardless of whether one is a heavy user or casual one. The idea is that users who require services like video streaming and large file downloads will gravitate toward the service provider that can support such speeds and capacities without resorting to throttling.

Data and emerging markets

It might be a different storty altogether for emerging markets, in which fixed and mobile broadband are still on the uptake. For the Philippines’ Smart Communications and PLDT, for instance, infrastructure is key in keeping up with customer needs in fixed and mobile data. According to Ramon Isberto, Public Affairs Group Head at Smart and PLDT, the network continues to heavily invest in mobile/broadband base stations across the archipelago. “Our continuing investment to expand capacity, reach, and availability allows us to deliver the best broadband experience to our subscribers,” he tells VR World.

According to Isberto, diversification is key in ensuring adequate resources for customers. The network runs both wired and wireless technologies, in order to address different needs. “Please take note of the spread of different technologies,” he highlights. “Our broadband services are available on different wired and wireless platforms – from FDD LTE, TD LTE, HSPA+, next generation DSL, Fibr. This enables us to address the varying requirements of our subscribers across the nation and across market segments.”

But given the price sensitivity in emerging markets, there is a need to provide “sachet” type pricing for users who don’t mind being limited to lower volumes of data, if these are priced more affordably. “We have stepped up network investments this year and will continue this in the future.  At the same time, we are introducing a suite of volume-based data plans and packages to address the diverse needs and varying appetite for data of our  consumers.  We are also offering a range of very affordable, bandwidth-efficient data services, particularly for the price-sensitive pre-paid market.  This is the Internet in sachets.”

Note that Smart had earlier partnered with Facebook in promoting the latter’s efforts to make mobile broadband more accessible to emerging markets. To date, the network is giving a minimal free daily allocation to encourage mobile data usage for casual purposes like chat and social networking. The country’s other major network, Globe, also offers free Facebook access to encourage users to start using their smartphones’ data capabilities. This was done in partnership with Facebook, which is pushing its Internet.org initiative in order to jumpstart mobile Internet usage in the developing world.

Such partnerships go against the concept of Net Neutrality, however. Subsidies and content provider partnerships are seen as being favorable toward the companies that subsidize data connections in order to enable access. This is the same argument that Netflix has used in its favorable stance toward Net Neutrality. Because of the nature of Netflix’ business — distributing video content to subscribers — it does benefit from a freer and more open Internet. However, as it stands, companies like Netflix are often forced to pay service providers for more favorable connectivity conditions for their customers.

A business model for 4K

Unlimited data subscriptions are going the way of the dodo, especially for mobile providers amid the rise of smartphones, tablets and high-definition content. Bucket pricing has become the norm, and it might be the best way for telecommunication companies to keep their business viable, whilst still ensuring adequate QoS for both heavy and casual users. The cheaper “sachet” type usage, or at least a viable minimum allocation, would be enough for casual users who just wish to get online for light-duty purposes such as email, chat, social networking and the like.

Meanwhile, those who are hungrier for richer content like movies and software downloads should be prepared to shell out more for bigger buckets. After all, Net Neutrality means the Internet should not discriminate against data types, content and source. However, volume is a different discussion, altogether. With the debate on Net Neutrality still ongoing, Internet users should be aware of the impacts on their usage and costs, especially in consideration of new, data-hungry applications like 4K video streaming or downloads.

For telecommunication companies, it’s a matter of improving infrastructure and adopting optimization technologies that will reduce the load on facilities. For instance, a compression being touted by a company called Openwave Mobility promises to reduce transmission sizes for H.265 and VP9 compressed videos without adverse effects on quality. . There’s no escaping the need to lay out the groundwork for massive demand for data connections — both wired and wireless — in the future.