This time last year, we posted the first Edge Roundup of 2020. Suffice to say that none of us knew what we were in for over the following twelve months.
Looking back at all that’s transpired, it was really fascinating to realise just how much the industry had changed—and conversely, just how much it had stayed the same. So I asked our CEO, pelle, what his biggest takeaways were for 2020. Here’s what he came up with:
1. 5G is a thing;
2. By necessity, edge is as well;
3. Everyone (and their mother) has a cloud gaming offering; and
4. There’s an urgent focus on rural connectivity.
After combining through dozens of editions and hundreds of headlines, we've come up with this “roundup of Edge Roundups”: retracing—albeit broadly—how the biggest tech trends developed over the most infamous year of many of our lifetimes.
As the saying goes, hindsight is 2020.
Rolling into 2020, 5G-related headlines took a dramatic shift in tone. Articles speculating about future deployments, potential industry disruptions, e-commerce applications, or (unfounded) claims about its health effects grew fewer, replaced by headlines announcing big-name partnerships, country-wide network rollouts, and industry-shaping breakthroughs.
On February 10th, my colleague Raffi noted that “5G is no longer a technology of the future, but something that is very real and present today — underpinning theoretical questions over its application are now being answered in real time, either through Great Power politics, regulatory bodies, or on the exhibition floors of global conferences like MWC in Barcelona.”
But as we know now, the telecommunications industry would never make it to exhibition floors–not at MWC in Barcelona, or anywhere else–due to the defining disaster of 2020: COVID-19.
“With due regard to the safe and healthy environment in Barcelona and the host country today, the GSMA has cancelled MWC Barcelona 2020 because the global concern regarding the coronavirus outbreak, travel concern and other circumstances, make it impossible for the GSMA to hold the event. Our sympathies at this time are with those affected in China, and all around the world.” — John Hoffman, GSMA CEO
I hope John was ready to direct those sympathies everywhere, because nobody escaped the pandemic (unless you’re Turkmenistan or North Korea, apparently).
The twenty-first century plague came at a pivotal moment: the cusp of the fourth industrial revolution. Public health pandemonium, economic upheaval, and collective tragedy notwithstanding—the virus, rather than derail progress, accelerated or consolidated many trends which we had been observing for decades. Internet connectivity is no longer considered a commodity, but a necessity. And as the world continued, and continues, to rely on the web–it’s becoming increasingly evident that much of the mounting traffic will be powered on the edge.
But before diving further into the many ramifications of COVID and the accompanying “work, play, learn, and pretty much do everything from home” revolution, let’s back up a bit and assess the 5G landscape while things were still, well, normal.
5G is [more than] a thing
In late January, CEO of Tech Mahindra CP Gurnani was confident that:
“5G will literally impact every aspect of our lives. Investing in infrastructure now is critical so that we are ready to deploy 5G-enabled technologies. As we enter this new decade, I am more confident than ever that the 2020s will be defined by 5G and the other next-generation technologies that will create a smart revolution and improve the quality of life for a global population that has never been more interconnected.”
This sentiment was widely shared.
Major publications were rife with sponsored articles touting the benefits of 5G networking, signaling that the big names behind the industry were priming consumers (and investors) for the upcoming rollout. 5G would “ fundamentally change lives for better,” revolutionize retail, alongside a slew of other hyped-up headlines. And like so many technological advancements, it was all “just around the corner.”
But of course the promises of 5G meant nothing until the infrastructure was in place to support it. In the States, that journey starts at the Federal Communications Commission. The agency opened and closed the year with landmark rulings on the C-band spectrum: on January 27, the FCC authorized full commercial deployment in the 3.5 GHz band, and by December 8th, the country’s largest operators would be hurling billions in bids with the hope of bagging a piece of the 280MHz pie. The takeaway? Midband has proven to be where the money’s at, figuratively...but also literally.
A year prior to “[killing] each other over C-band,” Verizon and AT&T entered 2020 in hot pursuit of their 5G aspirations.
Verizon stated early on that they planned to invest $17 billion in 5G, LTE, and fiber over the course of the year. AT&T promised that it would be “the year we pull back the curtain on 5G for consumers” in a January 3rd blog post:
“To all our customers who are on this journey with us: buckle up. You’re in for an exhilarating ride on the AT&T 5G network in 2020 and beyond. Here’s to 5G in 2020 and the infinite possibilities ahead.” —Scott Mair, President of Technology & Operations, AT&T
The year’s breakout star, however, was the newly-married telecom giants T-Mobile and Sprint. After a long-expected court ruling approved the $26 billion merger between the country’s third and fourth largest carriers early February, T-Mo 2.0 emerged and the U.S. mobile market was altered drastically. For the better or worse of competition, depending on which analyst you talked to.
In the wake of these impressive developments, industry commenters remarked that the newcomer was “eating” Verizon’s 5G launch. Building thousands of midband sites a month, doubling Verizon’s coverage in Philly alone, surpassing 1Gbps speed only two weeks after launching, and not to mention winning hearts and minds of the country with the “connecting heroes” pledge: the company may be magenta, but they were quickly becoming the gold standard.
At the end of spring, however, Verizon contented that their rollout was actually ahead of schedule. Come fall, the carrier broadened coverage extensively when they made the switch from strictly mmWave band to DSS, enabling them to support sub-6GHz 5G. The move put Verizon in a way better position to compete with AT&T and T-Mobile, both of which had boasted wider network footprints over Verizon’s wicked-fast but majorly short range mmWave.
AT&T, the nation’s leading wireless provider, doubled their 5G coverage late April after expanding into 90 new markets, reaching a total of 120 million Americans. By August 7th, they were offering coverage nationwide at no additional cost. But according to a PCMag report in September, the carrier’s 5G performance is reported to be even worse than 4G.
All of this to say: despite of—or more accurately, because of—the ongoing COVID-19 pandemic, the deployment of 5G networks progressed at a record rate. And not just in the United States: from NTT DoCoMo in Japan to Deutsche Telekom in Germany, 5G rollouts swept the globe. So much so that by June, Ericsson revised its 2020 forecast: now predicting 2.8 billion global 5G subscriptions by the end of 2025.
But among the virus’ many less-celebrated effects included its role as instigator to a new, dangerous wave of 5G conspiracies. While crackpot theories blaming the networking tech for every conceivable ailment from (totally unfounded) claims of cancer rate spikes to mind control had been festering around the internet for several years, they exploded across the internet at the beginning of the pandemic—this time, linking 5G to COVID-19. With millions of people bored, confused, and desperately looking to rationalize their confinement—fear-mongering posts were shared and endorsed across social media with abandon.
By the time social media companies and news outlets resolved to combat the false online claims, their effects were already being felt in the physical world. Arson attacks against 5G towers across Europe, the UK, and Australia impeded hospitals and other health services’ efforts to contain the deadly pandemic. For many emergency field hospitals set up to deal with the unprecedented patient overflow, cell towers provided the only support for communication, including for patients and their families. Some of which tragically never saw each-other in person again.
Phone carriers resulted to pleading with people to cease these attacks:
“Imagine if it were your mum or dad, your gran or grandad in hospital. Imagine not being able to see or hear them one last time. All because you’ve swallowed a dangerous lie.” — Nick Jeffries, CEO, Vodafone
However, conspiracy theories weren’t the only controversy coloring the 5G rollout. Another threat—albeit contested—turned out to be one of the largest unfolding stories of the year:
In a not-so-distant past, Huawei had visions of building the backbone for the world’s 5G networks. The Chinese telecom equipment manufacturers’ 5G kit — touted as a high-performance solution with an affordable price tag — was set to be installed everywhere from India to Canada. However, pushback against the company escalated last February after the United States Department of Justice accused Huawei of orchestrating a successful "decades-long" scheme to steal trade secrets from U.S. technology companies. The incorporation of Chinese-manufactured components in vital telecommunications infrastructure, Washington argued, posed an imminent and dangerous cybersecurity threat to all liberal democracies.
Unnerved by the threat of “security back doors” embedded deep within their national networks (or just eager to tow the US’ line), a succession of governments announced plans to scale back cooperation with Huawei and ZTE in their 5G network builds. The initiative was almost immediately backed by allies UK, Australia, New Zealand, with many NATO-member states also hopping on the ban-waggon. Even without official government orders, many telecom companies opted to nix Huawei from their infrastructure: Belgium’s KPN, NOS, Vodafone, and Altice in Portugal, Telecom Italia and Telus in Canada—the only member of the Five Eyes alliance still reluctant to officially renounce Huawei. In October, the U.S. government went a step further than officially designating Huawei and ZTE as national security threats: announcing a program to provide aid to developing countries to remove and ban their gear from national telco infrastructure.
Rippling and replacing Huawei and ZTE hardware from existing 5G infrastructure is a costly proposition. A September report by the FCC put a dollar sign on the figure: $1.837 billion. Before the end of the year, U.S. lawmakers committed to footing that amount, supporting telcos with the $1.9 billion needed under the $900 billion COVID-19 relief bill.
So what’s the end-game for the West’s crusade against Huawei? Eric Schmidt, former CEO of Google and Chair of the Pentagon’s Defense Innovation Board, agreed that while “there's no question that Huawei has engaged in some practices that are not acceptable in national security," the core of the issue lies in competition. He argues that instead of putting all effort behind punishing their geopolitical and technological rival, the U.S. needs to instead focus on producing products that are just as good.
Though consistently and vehemently denouncing all security accusations as false, Huawei echoed Schmit’s take, asserting that the “difference in treatment of companies according to their country of origin is overt discrimination and disguised protectionism.” Huawei’s UK VP Victor Zhang added that “where we do agree [with Schmidt], and something we've always said, is that applying standards globally ensures innovation, fosters competition and benefits everyone."
This leads us to one of the biggest takeaways from the whole debacle: the lack of variety and competition amongst telecom equipment suppliers. The pool was small to begin with, so who would step up and fill the massive, Huawei-shaped hole?
Enter: Ericsson, Nokia, & Samsung
The calls to #CancelHuawei may have just been the big break that rival Nordic infrastructure manufacturers Ericsson and Nokia had been looking for. Over the course of the year, the two swept up telco contracts like nobody’s business as more and more governments locked out firms with argued ties to the CCP from their networks.
Given the strong demand for 5G network equipment amidst the pandemic, by late April Sweden’s Ericsson posted higher earnings than expected: ending their first quarter of the year with 86 commercial 5G contracts and 29 live 5G networks. By August, they hit the 100 mark.
Though notably snubbed from major contracts with Chinese operators (whereas Ericsson was included), Finnish supplier Nokia has also been securing big wins: reaching the triple-digit milestone in October. Their 5G contracts included a $1 billion deal with India’s Bharti Airtel, as well as with BT.
Relatively new to the scene was South Korea’s Samsung, which has scored contracts with carriers across North America, Japan, and New Zealand among other countries. In September, they scored a $6.6 billion network equipment order from Verizon.
The market, however, remains a triopoly: only three equipment vendors—Huawei, Nokia, and Ericsson—hold 80% of market share between them. Clear Ventures’ Rajeev Madhavan argued in a February op-ed that this isn’t only a business liability, but a national security problem. Who’s going to swoop in and save us?
O-RAN to the rescue
Championing O-RAN, or the open radio access network (RAN), is an international telecommunications industry initiative that aims to disaggregate hardware from software in the 5G RAN and replace it with open interfaces. This would enable operators to mix and match components from various vendors, rather than be tied to just one. Such interoperability is considered necessary moving forward, from a security and performance standpoint, and is championed by a number of major public and private stakeholders
At the start of the year, U.S. senators proposed that more than $1 billion should be put behind the development of O-RAN as a national security imperative (read: stick it to Huawei). In a six hour forum in September (which was pushed back from March due to COVID), all five FCC commissioners—with a quick cameo from Secretary of State Mike Pompeo—heralded OpenRAN’s potential to lower barriers of entry into the market for new vendors, thus increasing competition.
In May, a consortium of players in the global mobile ecosystem such as AWS, Microsoft, Dell, Intel, IBM, and VMware joined the Open RAN policy coalition to advocate for government policy in support of open RAN adoption. International telcos such as Telefonica, Vodafone, NTT Docomo as well as US-based AT&T and Verizon were also supporters. T-Mobile, however, remains sceptical. They argued that O-RAN is still shrouded by “a host of unanswered questions—with accountability falling solely on the operator if things were to go awry.
Nevertheless, confidence in Open RAN continues to mount. In November, the U.S. Congress unanimously passed a $750 million bill to enhance competitiveness in the supply chains of Open RAN 5G networks, as well as establish “objective criteria” to determine what equipment meets that definition. Open RAN might actually be working, and there’s one player in particular to thank for providing the evidence:
All eyes were on Japan this year as Rakuten Mobile worked to prove the potential of open-source 5G infrastructure. Not wanting to be held back by old legacy systems and architecture, the up-and-coming operator built a completely virtualized 5G network from modern technologies, and it saved them a lot of money. At the helm of the effort is Rakuten’s CTO, Tareq Amin. A former U.S. Huawei salesman, Amin now poses a strong challenge to incumbent systems.
Only four months after launching its LTE network in Japan, Rakuten Mobile was set to cover nearly all of Japan’s population by Summer 2021— five years ahead of schedule.
Rakuten isn’t the only 5G newcomer based on virtualized networks, though. The U.S. has their own disruptor:
Back when the Sprint-T-Mobile merger was being negotiated, the two carriers struck a deal with Dish Network to buy wireless assets from the companies to create a new nationwide carrier, helping alleviate antitrust concerns.
The company known for offering satellite tv is now positioned to take the fourth spot in the US roster of top wireless carriers; leveraging open architecture to build its first standalone 5G network with the best vendors across the supply chain. Co-founder and Chairman Charlie Ergen says they have set out to build “Netflix in a Blockbuster world,” considering they lost one hundred million in the latter after neglecting to embrace change.
Though Dish is steadily surging ahead with $20 billion of spectrum in hand, the volatility of markets caused by the COVID-19 pandemic has made building a network from the ground-up all the more challenging. After previously stating that they would have their 5G service deployed by the end of the year, by early November, Dish amended that projection to be by the end of 2021.
Alright, let’s go back to March:
Cases skyrocket in Italy, people are confused, toilet paper flies off the shelves, no one’s wearing masks. Lockdowns are announced. We’re stuck inside for a week. Just kidding, a month. Wait no—indefinitely? The world is on the cusp of the:
Work from home revolution
Save for the millions of essential workers upholding our medical systems, grocery stores, and other critical industries—for the rest of us (lucky enough to still have jobs), it was time to set up home offices. The stay-at-home, work-from-home orders weren’t universally received: responses ranged from Twitter CEO Jack Dorsey giving employees the green light to “stay at home forever,” to SpaceX’ Elon Musk baiting authorities to arrest him after he refused to shut down Tesla production plants.
The teleconferencing application Zoom emerged as an unlikely hero during the crisis. Its relative ease of use and ability to withstand massive bandwidth traffic (thanks to its network of 17 data centers spread near global cities) made it a favorite for those trying to uphold business-as-usual under confinement. Their rise was meteoric: the application added more users in the first two months of 2020 than it had all of the previous year, saw a record of 62 million downloads during one week in March, and was pulling in over four times the revenue by early fall then they had in 2019.
“Zoom’s market cap now stands at more than $129 billion, up from $25 billion a year ago. The company is now larger than IBM and AMD.” — Jordan Novet, CNBC
Naturally, others were looking to get a piece of this lucrative market. Verizon bought the B2B videoconferencing firm Bluejeans, and Facebook announced their own rip-off version “Rooms.”
But Zoom’s reputation didn’t make it out untarnished. Though receiving praise for acquiring the security app Keybase back in May, the company first received criticism when it closed the account of a U.S.-based Chinese activist under the pretence of “[complying] with local Chinese law.” Things really came to a head in November after Zoom raced backlash over fraudulent claims that the company offered “end-to-end, 256-bit encryption” to ensure the security of users’ communications. Turns out, the chat platform maintained cryptographic keys allowing the company to access the content of customers meetings.
Zoom wasn’t the only company to cash out on the “work from home” demands of the pandemic. Parsec landed $32 million in combined Series A/B funding to power their remote streaming technology, and AI-powered noise suppression app Krisp secured a partnership with Discord and $5 million Series A round in August.
But as we all know, people weren’t just working from home. With almost a quarter of the global population stuck inside with nothing but time, existential dread, and an internet connection, the #StreamingWars entered a new phase with renewed intensity.
Comcast/NBC finally stepped into the trenches with its much-anticipated Peacock streaming platform, launching their service to the public in mid July. Though the timing worked out well, and despite offering a competitive edge over incumbent services by offering a free tier subscription, it couldn’t keep up with the all-stars:
“The four fastest-growing services of 2020 were Netflix, Apple TV+, Disney+, and Amazon Prime...all saw significant net adds stemming from Covid-affected markets.”–Aguete report
Disney’s December announcement that they have nearly two dozen Marvel and Star Wars projects in the works prompted Wired to crown them winner of the streaming wars. Though Netflix, Amazon Prime, Hulu, Apple TV+, et al stand as fierce competition, the multibillion-dollar endeavor is purportedly a part of Disney’s larger strategy to grow their subscriber base from 86 to 230 million by the end of 2024.
But is it really a “war” if everyone wins?
HarrisX’s CEO Dritan Nesho contends that “instead of a streaming war, there’s been streaming coexistence and parallel growth.” According to him, new services like Disney+ grew rapidly without necessarily harming established players such as Netflix and Hulu: “Disney+ did not displace existing services. It complimented them.”
This year we’ll see where the subscribers’ chips fall.
Speaking of ample market share, let’s take a look at the most dynamic industry of 2020:
When not working in their pajamas or binging Tiger King–most people turned to online gaming as a favored pandemic pastime. The popular digital gaming platform Steam saw a groundbreaking 20 million users in a single day on March 14th, and U.S. video game sales witnessed a record quarter in the spring while consumers were confined to their homes.
Though the Nintendo Switch and PlayStation 5 still flew off the shelves this year, it’s undeniable that the market tides are shifting away from consoles—to the extent that Microsoft’s Xbox stated in February that it no longer considers Song or Nintendo to be its main rivals.
The sun has set on consoles, and risen on cloud gaming—and industry projected to reach $4.5 billion by 2024. Naturally, it would follow that every major gaming and tech company has launched a cloud gaming service: Microsoft’s Project xCloud, Sony’s PlayStation Now, Google’s Stadia, Nvidia’s GeForce Now, Tencent’s Start—the list goes on. For the first time, for a monthly fee, users can play a library of video games on demand, streamed to their phone, television, console, computer, or tablet.
Google Stadia kicked things off in 2020 with a “lukewarm” launch, followed closely after by chipmaker NVIDIA’s GeForce Now at a considerably lower price point. Blade’s Shadow lowered their monthly subscription to $11.99 to compete with Stadia and GeForce, Blacknut launched its “Netflix for Gaming” service in Israel, Deutsche Telekom introduced MagentaGaming, and unsurprisingly—Amazon announced they would be coming out with a cloud gaming platform of its own, Luna.
Reviews of Microsoft’s cloud gaming service, xCloud, flooded in following its highly anticipated launch in September. Most reviewers had generally good things to say about its performance, payment model, and library of titles to choose from — but streaming was nevertheless far from seamless. Some games, even with great network connection, lagged majorly:
“When cloud gaming works, it works well, but when it doesn’t work it makes you want to chuck your phone into traffic.” — Joanna Nelius, Gizmodo
This segues well into one of the biggest battles of the year:
Keeping the networks alive
Asking hundreds of millions of people to stay home simultaneously meant an unprecedented level of strain on global networks. As internet traffic soared to historic levels, broadband struggled to keep up: download speeds reportedly slowed in 88 of the 200 most populous U.S. cities at the beginning of the outbreak, and the EU even appealed to big streaming companies like Youtube, Netflix and Amazon to limit access to their highest quality streaming options. Despite these hurdles, much of the reason for the success which data centers enjoyed in dealing with traffic is the result of dedicated hard work by technicians and contractors to keep the internet running—the unseen, “unsung essential workforce” of the pandemic,
More demanding than other media when it comes to speed, capacity and latency—online gaming was often the culprit for spikes in online traffic.
But now that people are now expected to do everything from home, the spotlight fell on those without the means to.
“The telco industry underpins the success of almost every element and facet of society, and now the networks are under pressure, everyone realises it.” — Jamie Davies, telecoms.com
With network connections functioning as the sole lifeline keeping people working, learning, and socializing—the FCC pressured U.S. telcos and ISPs to sign the “Keep Americans Connected Pledge:” a commitment to not terminate service, waive any late fees, and open WiFi hotspots to Americans in need due to disruptions caused by the coronavirus pandemic.
Comcast and T-Mobile followed suit, both announcing 60 day freezes on internet data caps almost immediately. Charter answered in turn by offering free access to its Spectrum service for 60 days, as well as introducing a discounted rate to eligible low-income households. In May, Verizon gave customers 15GB of extra data as a token of support.
Though these and many providers signed on, the Pledge had an expiry date: June 30. Even though some hopefuls projected that coronavirus could force ISPs to abandon data caps forever, after the grace period, they came back with a vengeance.
The strain put on internet infrastructure underscored a long-time problem: not only are existing networks unable to manage the volume of traffic due to the pandemic, they are far from being able to handle the rising popularity of cloud gaming or other next-gen applications such as IoT-enabled devices, self-driving cars and innumerable “smart” applications that proponents of 5G have long been proselytizing.
“The internet, a network of networks, has been undergoing a litmus test that points toward the urgent solution necessary for optimal performance in the near future: a rearchitecting of the internet.” — Phillip Marangella, CMO, EdgeConneX
Which leads us to the third major takeaway from the year:
Edge is a thing
Even before COVID threw industries and economies around the world into upheaval, edge computing was singled out as one of the hottest new tech trends.
“Make no mistake: 2020 is going to be the year of the edge.” — Mo Katibeh, CMO AT&T
Now that pandemic has made it clear that legacy systems currently powering the internet are not equipped to handle the traffic of today—let alone the low latency-dependent applications of the 5G future—edge isn’t seen as a trend, it’s considered the only way forward.
But alongside 5G, the infrastructure still needs to be built. Throughout 2020, ground was broken at an accelerated pace.
In April, Microsoft announced Azure Edge Zones, an infrastructure service that functions as an extension of the Azure public cloud. The company is expanding their network of micro data centers across the globe, in over 140 countries. Google also outlined its own Global Mobile Edge Cloud strategy, partnering with telecom providers such as AT&T to deliver 5G edge computing solutions for enterprise customers. AWS and Verizon have also teamed up to expand out its 5G mobile edge computing (MEC) platform in key markets across the United States.
The headlines kept on rolling in: Equinix acquired Packet, NVIDIA acquired Mellanox, American Tower unveiled its American Tower Edge service—the list goes on. It’s no surprise that worldwide spending on Edge Computing is projected to reach $250 billion in 2024, according to an IDC report.
As we alluded to before, the scramble to build and deploy services at the network edge is especially pressing for the bandwidth-heavy, latency-contingent cloud gaming industry—to the extent that Wired described it as a developing “infrastructure arms race.”
The pandemic also helped prove that rather than nuisance or novelty,
Edge applications such as drones, autonomous robots, and self-driving cars have become a necessity
Nothing drives innovation like dire times!
A few early adopters approached the tech with vigor, using UAVs to disinfect the streets in China or take temperatures in Italy. Aside from directly managing the pandemic, drones also swooped in to mitigate labor shortages on Israeli farms.
But the use case that stood apart from the rest is undoubtedly delivery. While the U.S. Federal Aviation Authority had already lifted some of the first regulations on commercial-use drones the previous year, the sector accelerated post-COVID; switching from elective to essential. A number of American and international companies have since been testing drone deployments for various types of deliveries, ranging from food, medicine, books, COVID tests, and even organs. In the U.S., three operators have been certified as air carriers by the FAA: UPS, Alphabet, and Amazon—giving them a huge leg up on the market. Walmart, however, has also amped up their drone delivery efforts, partnering with numerous companies like Zipline and Flytrex to deliver products and medicine to consumers throughout their massive network of retail locations.
Drones weren’t the only devices making deliveries, however. Semi-autonomous robots from Refraction AI, Kiwibot, Google’s Nuro, and Amazon’s Scout hit the streets, rather than the skies, (transporting ungodly amounts of takeout, I’m assuming).
2020 was also the year where the autonomous vehicle industry took shape, newly valued at $8 trillion globally. Waymo, Pony.ai, Aurora, AutoX, Cruise , and other leaders in self-driving tech made headlines with trials of their autonomous fleets across Arizona, California, and Texas—some even exiting the development phase and getting the green light to transport passengers. After acquiring Zoox , Amazon even stepped into its role as the future “Amazon of transportation.”
While some Americans were ordering Taco Bell to be autonomously delivered to their homes, however, others were forced to camp out outside fast food parking lots in hopes of copping decent internet connections. Thanks to COVID, the country could no longer continue to ignore it’s glaring digital divide, which brings us to the:
Growing focus on rural connectivity
Half the world — predominantly poor and rural communities — has no internet access, or suffers from poor connectivity and prohibitively expensive services. The accessibility of rural home internet options is especially abysmal in the U.S.; national dirty laundry that’s been out to air for awhile. While some major carriers began to offer subsidized plans during the pandemic — or promise to expand existing ones — many subscribers are still left with unaffordable, slow, spotty, connections.
This reality provided the backdrop for the FCC’s Rural Digital Opportunity Fund: an initiative that promises to help bear the cost of delivering broadband internet to Americans living in poorly connected rural communities. The auction was set to begin October 29th, with 386 vendors cleared to participate in the first round where $16 billion was up for grabs. But despite the FCC’s ample lip service to boosting broadband connectivity in rural America, there still is no accurate data showing which areas are most in need. Some lawmakers are worried that incomplete — and even erroneous — data will tamper the RDOF auctions. Put simply, no one knows where to spend the money.
“We need that data to know what communities lack wireless service and how much reaching them will truly cost. But instead, we’re building the ship and setting sail while the compass is still on backorder.” –Jessica Rosenworcel, FCC Commissioner
Earth to Starlink!
SpaceX’ satellite internet service Starlink entered the scene with the bold aim of bridging the digital divide by introducing high speed satellite internet to rural communities. Though originally targeting one million customers in the US, SpaceX later amended that number to five million. Its private beta test proved to be a major success, demonstrating gaming-friendly latency and download speeds over 100mbps—which they cited in an appeal to the FCC to accelerate their request to modify operational altitude regulations and increase the amount of authorized units.
Though not without its naysayers (particularly astrophotographers wary of light pollution),
SpaceX won people over in droves, especially through community development campaigns bringing connectivity to underserved areas. One deployment in Texas, Starlink’s first foray into the South, would focus on connecting students who lack home internet–providing free internet service to 90 families. Outside the US, SpaceX received approval from Australian Communications and Media Authority in early November to operate Starlink ground stations on the promise to connect rural areas across the country. They were further authorized to operate in Canada around the same time.
While a lot of talk surrounded the potential for Starlink to upend the broken U.S. broadband market, Musk himself was quick to state that Starlink won’t be a “huge threat to telcos” given that it wasn’t designed to perform well in high-density markets.
By the time the dust settled on the first round of the RDOF auction in early December, Starlink bagged $886 million to subsidize satellite internet service across 35 states. Other top winners included CenturyLink (whoops, I mean Lumen), Frontier, Windstream, and Charter, with rural telcos and smaller cable companies largely making up the 170 other winners. Only nine of the total $16 billion was used in this initial phase, leaving $11.2 billion on the table for the next round.
One major issue, critics argue, is that the broadband service subsidized by the auction is way too slow:
“3-Mbps upload speeds are barely fast enough for people accustomed to sending huge, data-rich files, like doctors, photographers, or high-tech precision farmers—much less the millions of American families now making Zoom calls every day from home. The video conference software recommends 2-Mbps upload per call, which means that the FCC’s definition of broadband doesn’t support two or more people making video calls at a time.” —Sam Bloch for The Counter
This brings up a crucial point: delivering connectivity to rural communities isn’t just about making sure individual households aren’t left behind, it’s about enabling national development in key areas like smart agriculture, manufacturing, energy, and transportation. This year, Trilogy Networks kicked off the Rural Cloud Initiative: a coalition of telecom operators and technology providers working to “accelerate the digital transformation of Rural America” through extending the benefits of computing at the edge; enabling new business models for both network operators and industries outside of urban hubs.
As we know, the RDOF wasn’t the last auction in December. Verizon, AT&T, and T-Mobile were set to duke it out for 280MHz of licenses—an extra 38% of spectrum— for 5G carriers:
"This is the most important wireless auction of our time. Who 'wins' the C-band auction will shape the competitive dynamics of 5G for a decade." –financial analysts, Moffett Nathanson
Having the least amount of spectrum holdings behind T-Mobile and AT&T, Verizon has the most to gain...or lose. Analysts project that they’ll spend around $26 billion in total...and they’re nearly $10 billion shy of being right. At the end of it all, the auction racked up a “oxygen-deprived” sum of $78 billion: setting the stage for 5G advancements this year.
With that, the year came to a close, and with it, the imminent departure of Ajit Pai. The FCC chairman announced he would step down from his post on January 20th; the day of Biden’s inauguration, and six months shy of his term expiration this June. Not everyone has positive assessments of his legacy, however. For proponents of net neutrality, and opponents of his deregulatory policies, Pai’s goodbye couldn’t come sooner:
“We are in the middle of a crushing pandemic. Hundreds of millions of people are working from home and sending their kids to school online. Comcast just announced plans to re-impose arbitrary data caps. Kids are sitting outside Taco Bell to do their homework. We desperately need a functional FCC that will quickly repair the damage done by Ajit Pai and get to work protecting the public from ISP abuses.” –Evan Greer, Deputy Director, Fight for the Future
Given the calamitous events in Washington just after the new year, as well as the subsequent Big Tech crackdown against the actors deemed responsible for the insurrection, a new cohort of Commissioners will soon be tasked with addressing some of the most pressing debates of the online age. No doubt, we’ll be hearing a lot more about Section 230 of the Communications Decency Act.
Clearly, this is far from a comprehensive account of everything that went down in 2020. There’s a lot I didn’t touch upon—but fret not! We’ve got another year of Roundups to look forward to, covering many of the same themes with more of the nuance they’re warranted.
It wouldn’t feel right to sign off without acknowledging what a monumental year this has been for Mutable, too. In 2020 we closed our seed round, added new members to the team (including yours truly), navigated the pandemic, got voted “top edge startup of 2020” and for those in our Armenia office: survived a war.
But we’ve done enough of looking back.
It’s time to face what 2021 has in store for us. Judging from the first couple of weeks of January, we’re bound to go through the wringer in one way or another.
One thing I know for sure? However things go, these “times'' will be precedented.