Networked Taiwan

1
Networked Taiwan
H. T. Kung kung_at_harvard.edu
July 22, 2003
2
Presentation Plan

• Defining Networked Taiwan
• Strategies and Opportunities
• A National-level Focus Integrated Beyond 3G
  (iB3G) or ????
• Improve the System
• Recap

3
Networked Taiwan

• Three levels of meaning
• Network level (plumbing level)
• Network connectivity, broadband penetration,
  wireless access points, etc.
• Service level (information systems)
• E-government, e-learning, e-healthcare, etc.
• Society level (social networking)
• Perhaps most interesting

We elaborate on the 2nd and 3rd levelsin the
next two slides
4
Macro Computing at Service Level

• Service-level networking is macro computing for
  enterprises. It is large-scale integration of
  people, databases and services through computer
  and telecom networks, e.g.,
• Healthcare systems for the senior population
• Entertainment
• Distance learning
• These applications often have unlimited market
  demand
• This is in contrast to traditional "micro
  computing" for individuals

5
"Social Capital at Society Level

• Society-level networking is social capital,
  which refers to those stocks of social trust,
  norms and networks that people can draw upon to
  solve common problems
• "Bowling Alone The Collapse and Revival of
  American Community" by Robert D. Putnam, New
  York Simon Schuster, 2000
• Social capital, beyond just physical capital, is
  essential in addressing challenges and making
  difficult decisions

6
The Current Status

• Taiwan has been successful at the Network
  Level, E.g.,
• High ADSL and cellular phone penetration rates
• 10 of world market in handset manufacturing,
  and growing
• 80 of world market in WLAN manufacturing

7
Service Level Should Bethe Next Focus

• Large-scale applications and services are where
  computing and communications converge
• Computing is part of telecom services
• Applications are where telecoms future lies
• We will illustrate a strategy in enhancing the
  service aspect of Networked Taiwan

8
A Principle Anticipate and Lead

• Anticipate future discontinuities in science,
  technology and business models
• These discontinuities may be as varied as the end
  of current semiconductor device feature scaling
  or the emergence of XML Web services as the
  underpinning of all future e-commerce
• Develop RD policies on preparing for and
  leveraging emergent opportunities that these
  discontinuities represent

9
Some Technical Background

• Cellular Phone Network
• Mobility and wide-area coverage in voice services
• Narrow-band data services
• Standards 1G (analog) 2G (digital) 2.5G/3G
  (packets)
• Wireless Local Area Network (WLAN)
• High-speed wireless but in specific locations
• Low-cost and grassroots deployment
• Standards 802.11b (Wi-Fi) and Bluetooth

10
Rapid Growth of WLANs

• WLAN users in North America will shoot from 4.2
  million in 2003 to 31 million by 2007 (source
  Gartner)
• Taiwan produced 11 million 802.11 units in 2002,
  and 16 million expected in 2003
• By 2004, 60 or 70 million world wide
  installations (source Intersil)
• By 2005, over 80 professional notebook PCs will
  have WLAN interface (source Gartner)
• By 2007, revenue from WLAN hot-spot users will
  surpass US9 billion (source Gartner)
• Note that many ISPs are installing WLANs
  automatically as part of DSL or cable service
  package

11
Parasitic Grid of WLANs

• Enterprises and end users make their own
  investment in WLANs
• They have been aggressively installing wired
  Ethernets for the past dozen years
• They have shown similar enthusiasm in installing
  WLANs
• For WLANs, there is no need for carriers to
  gather millions of subscribers to justify
  deployment investment things just happen
  automatically!
• Need to reuse private WLANs (public WLANs have
  been insignificant and expect to remain so for
  the next several years)

12
New York Citys Parasitic Grid

• 12,647 Wi-Fi access points in New York City,
  Summer 2002
• (WLANs must have been providing good value for
  users!)

13
Two Possible Responses to the Rapid WLAN Growth

• To play safe leave WLAN to computer industry
• Like PDA, thin-client, etc.
• To play big integrate WLAN with telecom industry
• In particular, work on large-volume handsets
  beyond traditional PDAs
• We argue that we should take the second approach

14
WLANs Will Affect Telephone Operators Business

• Cellular phone subscribers will demand mobile
  access to WLAN-based services
• E.g., make use of WLAN resources in servers,
  network bandwidth, etc.
• Fixed-line phone subscribers will demand Wi-Fi
  portable access to phone lines or PBS systems as
  well as access to WLAN-based services

15
Cellular-WLAN IntegrationCombining the Best of
Both

• Cellular
• Coverage for voice and data services
• Seamless roaming for wireless data services
• Mobility
• Billing
• WLAN
• Deployment in hotspots, homes, work places, etc.
• High bandwidth and low cost
• Multimedia services

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A Telecom Strategy for Taiwan

• We have launched a focused national-level
  initiative (???? or iB3G program) to prepare for
  and leverage emergent opportunities represented
  by WLANs
• Within two years, attain a world leadership
  position in a dozen of key technology and service
  areas
• Brand Taiwan as a powerhouse in creation of
  integrated WLAN and cellular technology and
  services
• Start new business ventures in this area
• Leverage existing strengths of Taiwan
• World-class manufacturing capability in WLAN and
  handset
• Highly competitive mobile operators in Taiwan

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• Defining cellular-WLAN Integration

• User perspective
• Technology perspective

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Cellular-WLAN IntegrationUser Perspective

• Integration means
• beyond cellular services, a subscriber may also
  access WLAN-based services when he is in WLAN
  areas

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Cellular-WLAN IntegrationTechnology Perspective

• Integration means both
• handsets, called "integrated handsets here, can
  access WLANs as well as cellular phone networks
• and
• interoperability of WLANs and cellular networks
  at some layers of networking

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Two Integration Approaches

• Tight coupling
• Integration starting at a layer below the IP
  layer
• Seamless voice handoff between cellular and WLAN
• Loose coupling ? More suitable at this time
• Integration starting at the IP layer
• Use of the existing phone authentication,
  authorization and accounting (AAA) systems in WLAN

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Mobile Operators Possible Concerns Proposed
Responses

• Public WLAN hotspots
• They sometimes have low usage
• Response Offer billing and roaming services.
  Focus on subscriber's own private and enterprise
  WLANs
• Voice over IP (VoIP)
• Likely, VoIP will only shift business revenues
  rather than increasing total revenue
• Response Create other revenues, e.g., content
• Small handsets
• Can handsets with stringent size and battery
  power constraints make good use of WLAN?
• Response Yes, see the next slide

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Use of Integrated Handsets for WLAN-based Services

• A wide range of WLAN resources are available to
  handsets
• Access points, file system, mass storage, smart
  display, wall mounted display, entertainment
  center, etc.

23
Use of Integrated Handsets for WLAN-based
Services (Cont.)

• Handsets can use resource discovery protocols to
  find WLAN resources
• Universal Plug and Play (UPnP)
• Zeroconf
• XML Web services
• Handsets can use powerful peripherals to work
  with these resources
• I/O Wi-Fi, Bluetooth, etc.
• Storage Memory sticks (512MB), USB drive (2GB),
  1.5in HD (5GB), etc.

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Triangle Routing An Example Problem Integration
Can Solve
Cellular Connection
USB Drive
Handset
WLAN
ISP
FileServer
E.g., download video to home entertainment center
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Handover toHigh-bandwidth WLAN Shortcuts
Cellular Connection
USB Drive
Handset
High-speedWLAN Connection
ISP
AP
FileServer
26
Handover toHigh-bandwidth Internet Connection
Cellular Connection
USB Drive
Handset
FileServer
High-speedWLAN Connection
AP
High-speedInternet Connection
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Examples of Integration Efforts

• Avaya/Proxim/Motorola Wi-Fi/cellular roaming
• Nokia Wi-Fi/GPRS integration
• Cometa Networks JV of ATT, IBM, Intel to
  provide wholesale wireless broadband
• T-Mobile Starbucks, etc. hotspot services
• Boingo WLAN hotspots aggregator
• Nextel iDEN and private Wi-Fi for customers
• Verizon Sprint focus on 1XRTT for now
• Lots of others VoIP integration, security, etc.
• Source William Lehr, March 2003

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Further Integration Examples

• British Telecom has committed to providing public
  WLAN services with 4,000 hotspots by 2005
• Texas Instruments has a 3-in-1 chip integrating
  cell phone networking, 802.11b and Bluetooth
  technologies
• Toshiba will deploy 10,000 public access Wi-Fi
  hot spots in the US by the end of 2003
• Intel is working on public Wi-Fi access in Asia
  through an agreement with the Singapore
  government
• Cisco has began to deliver Wi-Fi phones

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• Business Models

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Examples of WLAN-enabled New Businesses for
Mobile Operators

• Billing and roaming services. Support WLAN
  hotspots and enterprises, possibly organized by
  aggregators such as Boingo
• MMS with integrated WLAN. Provide high-
  bandwidth WLAN delivery of conferencing and
  multimedia messages, i.e., MSN-Messenger-with-WMP
  using a handset
• Broadband content services. Consider NTT DoCoMo's
  i-mode as a model.
• Because of their higher bandwidth and lower
  delivery cost, WLANs should actually do better
  than i-mode in content services

31
The Size of Digital Content Market on i-mode
????????????????????
Excluding e-commerce and other payment method
provided by third parties
JAVA Launch
10 million subs
504 Launch
(million Yen)
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Mobile Operators' Advantages

• Billing systems can handle new business models
• Per-user, rather than per-household, billing
• Roaming agreements with other operators
• Payment collection enforceable by terminating
  voice service of non-paying user
• SIM card based authentication
• Location-based services can complement resource
  discovery on WLAN, e.g., scoping the broadcast
  domain
• Handsets can support digital rights management
  (DRM) for content-based services. The DRM
  function of handsets is like that of cable
  set-top boxes

33
An Eco-system All Parties in the Value Chain
Must Win

• Mobile operators subscription fee, air time,
  roaming fee, authentication fee, content revenue
  sharing, advertisement, etc. (do not worry about
  content generation, WLAN deployment and
  operations, etc.)
• Content providers content income from mobile
  operators (do not worry about content delivery,
  billing, DRM, etc.)
• WLAN operators and aggregators service fee from
  mobile operators or enterprise owners (do not
  worry about billing, roaming, etc.)
• Handset manufacturers high-value-added handsets
  for content services

34
Non-telecom Way of Thinking Is Essential
Key Words Positive Feedback De Facto Standard
Content Centric Business Model Consumer
Oriented Marketing Digital Content Market Value
Chain Eco System Seamless and Continuous
Evolution
Source Takeshi Natsuno of imode, 2003
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• Action Items
• Cross-industry consortia
• Handsets
• Next-generation service trials
• Education programs
• Regulatory initiatives

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Cross-industry Consortia

• Type 1 collaboration between operators and
  content providers
• Operator-independent content
• Subscriber authentication to support content
  service
• Competitive billing for content service
• Type 2 collaboration between operators and
  handset manufacturers
• Handsets supporting common content platforms and
  I/O interfaces
• DRM support

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Handsets

• Multi-mode cellular/WLAN handsets
• Low-power Wi-Fi radio and MAC
• Handover to WLAN
• Handsets with broadband peripheral interfaces
• Wi-FI smart handsets, PBX, portable phones
• VPN, audio and video streaming, WLAN resource
  discovery
• DRM handsets
• Separate ENUM numbers

38
Education Programs

• NSC/MOE coordinates site licenses for acquiring
  cellular-WLAN systems and platforms developed by
  Taiwan RD organizations to support teaching and
  research at universities
• Deployment of these systems and platforms at
  universities and labs

39
Service Trials

• Broadband content services over WLANs, such as
  those with DRM support
• Integrated messaging services such as MMS over
  WLAN
• Integrated billing and roaming services for WLANs
• WLAN aggregators based on common hot spot
  platforms, realizing simplified Nx1, rather than
  NxN, business relationships

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Principle for Regulatory Policies

• Policies have industrial objectives of enhancing
  Taiwans competitiveness in technology, content
  and services
• That is, policies need to be proactive in
  advancing manufacturing, content and service
  capabilities in Taiwan
• Study regulatory advances in other countries,
  such as South Korea. If they can do it, Taiwan
  should try to do it too

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Regulatory Initiatives

• Open menu on subscriber handsets
• Enforcement of local loop unbundling
• WAN outdoor extension to class 1 and to class 2
• EMI approval of equipment rather than their
  deployment (shouldnt we be less paranoid about
  interference, given the Manhattan Wi-Fi map?)

42
Regulatory Initiatives (Cont.)

• Reuse 3G TDD band in WLAN
• Increase unlicensed band substantially
• Allow liberal interpretation of ISM
• Encourage transit and lower transit charge for
  WLAN traffic
• Encourage WLAN antenna setting (e.g., access to
  roof, sharing power, and line-of-sight
  protection)
• Privacy, universal access, etc.

43
Government Initiativesand Programs

• Encourage services and applications using
  integrated cellular-WLAN systems
• eTaiwan, etc.
• Public WLANs
• Broadband infrastructure deployment projects
• Digital TV initiatives
• Leverage national RD programs such as NTPO, SOC
  and Digital Learning
• Close collaboration among ???, ???, ??? and ???

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Recap

• We need to anticipate and prepare for
  discontinuities, and develop control points
• The phone-WLAN integration is inevitable
• Ought to seize this discontinuity to secure a
  leadership position in telecom. Speedy execution
  is the issue
• Manufacturers, operators and service providers
  must collaborate. How well we can collaborate
  will determine our competitiveness
• Some changes in mindset and structure are
  necessary with open style thinking emphasized
• Pay attention to new opportunity areas discovery
  and use of WLAN resources, application-centric
  network systems, DRM handsets, etc.

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Government LeadershipIs Extremely Important Here

• Nurture cross-industry collaboration
• Adopt forward-looking regulatory policies
• Ensure highly competitive infrastructures and
  services. E.g., achieve the following by 2006
• A minimum of X10 Mbit/s available to Y80 of
  households and businesses in the whole of Taiwan
  at the cost of ZUS 40/months
• A minimum of three broadband service operators
  available to A80 of these users

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Challenge

• Do we have the will and social capital to work
  together and lead?