Thursday, March 31, 2011

How Systems Thinking Will Bring Broadband to Rural Areas

By David Rosenbaum

Jess Posey
Editor's Note: Jess Posey will deliver a webinar expanding on this topic on April 11, 2011. For details or to listen to a recorded version after that date, please visit the SDM webinars page.

When Brian "Jess" Posey enrolled in MIT's System Design and Management Program (SDM), he already knew what his thesis would be: an analysis informed by systems thinking of how Dynamic Time Metered Delivery (DTMD) could help fulfill Congress' 2009 mandate that every American, no matter where he or she lived, should have access to affordable broadband. Meeting that goal, Congress believed, would advance "consumer welfare, public safety, community development" and a host of other societal benefits.

Posey's focus stems both from his prior experience as vice president of a company that marketed an ultimately unworkable broadband solution and his current position as co-founder and president of TelePulse Technologies, which has patented DTMD, a time-and-code-based communications technique for a variety of transmission media, including copper phones lines, coaxial cable, fiber, and others. In July 2010, the FCC redefined broadband from 200kbps to 5Mbps thus increasing the number of un-served from a few million to 14-24 million. This action is quite helpful to TelePulse Technologies.

According to Posey's thesis, DTMD can make broadband access affordably deliverable to underserved rural areas because it addresses the business and technology difficulties inherent in the three most popular modes of Internet delivery: DSL, cable, and fiber.

With DSL, says Posey, the technological problem is that speeds "attenuate quickly over distance." To accommodate greater speeds, DSL providers have to expand the current phone company infrastructure in order to get close enough to rural customers to get faster DSL speeds. That's expensive. In technology, Posey says, usage and volume reduce costs; in construction labor, it's the opposite.

With expanding the use of fiber to the home, says Posey, the problem is primarily financial; it's "horrendously expensive" to install directly to a household. To get fiber to rural households means digging and incurring labor costs. Those costs have to be shared among the potential users of the fiber so cost per customer is important. Cable, like fiber to the home, works best in cities or where companies can aggregate enough customers and achieve economies of scale. In rural areas, with fewer widely disbursed users per square mile, there's little incentive for investment because the cost per customer will be higher.

Conversely, by leveraging existing infrastructure, DTMD can be deployed without capital investment while improving the quality (and speed) over DSL service. The population density is irrelevant. For the FCC goal of 5Mbps, DSL does it out to 1 mile and DTMD does it out to 5 miles. For the FCC goal of 100 Mbps, DSL does it out to 1,300 ft and DTMD does it out to 4,500.

The Hypercube analysis Posey used in his thesis is a systems approach. "I looked at what DTMD meant for VoIP providers, broadband customers, the semi-conductor industry, wired telecom providers, equipment manufacturers. It's a much more holistic view," he says.

"For example, if you're a VoIP or Skype provider, DTMD is an incremental innovation. Their core doesn't change, but I can expand their market for them.

"If you're a regular wire-line phone company, and you're not serving a rural community, you'll see DTMD as a modular change. I'm enhancing value without touching your infrastructure.

"If, however, you've taken fiber into the home, then DTMD is a radical, disruptive innovation, so some companies won't be happy. The same thing if you're a DSL chip manufacturer. For the equipment manufacturer DTMD would be seen as an architectural innovation. Their core concepts are reinforced, but the architecture of their networking equipment is changed. They would neither like nor hate DTMD. The equipment manufacturer will build the equipment if the phone company guarantees large markets and follow-on business. However there is no incentive for the equipment manufacturer to pursue the new technology then find a phone a company to use it.

"With Hypercube analysis, you're dealing with more than technology; you're analyzing financial, policy, and business model questions. Just being a faster, better, cheaper innovation is (oddly enough) irrelevant.

"Before I came to SDM," Posey concludes, "I knew intuitively that it wasn't enough to have a great piece of technology; it had to fit into a system. But that's what I wasn't quite getting right. What I needed was industrial engineering, systems engineering, and engineering management with a systems focus and raised to higher level of abstraction. That's what I got at SDM. At SDM, you raise the level of abstraction. In other programs, it's as if they're teaching you to optimize functions for their own sake. At SDM you step up to figure out how something fits into the value chain."

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