I come to bury Caesar, not to praise him…

Posted in General, Regulatory, Spectrum at 3:26 pm by timfarrar

Back in October 2012, despite their misleading press release, CTIA’s own data indicated that there had been a significant slowdown in data traffic growth and confirmed that the emperor/FCC Chairman had no clothes when talking about the non-existent spectrum crisis. Now it seems CTIA is at it again, releasing an error-strewn paper today on how the FCC’s October 2010 forecasts of mobile data traffic have supposedly proven to be “remarkable accurate.”

This groveling attempt to “renew the effort to bring more licensed spectrum to market” is clearly designed to distract from CTIA’s own release of its year end 2014 wireless industry survey results last week, which showed that US mobile data traffic only grew by 26% last year (from 3230PB in 2013 to 4061PB in 2014) compared to growth of 120% in 2013, a dramatic slowdown which CTIA conveniently ignores.

Instead CTIA is praising the “solid analytical foundation” of the FCC’s October 2010 paper, which was recognized at the time, by myself and others, to be fundamentally flawed. So perhaps its not so ironic that the CTIA’s new paper mischaracterizes the data that the FCC used, stating that the forecasts “were remarkably accurate: In 2010, the FCC’s growth rate projections predicted mobile data traffic of 562 petabytes (PBs) each month by 2014; the actual amount was 563 PBs per month.”

Firstly, the FCC did not actually state an explicit projection of mobile data traffic, instead giving an assessment of growth from 2009 to 2014, as the (simple arithmetic) average of growth projections by Cisco, Yankee and Coda (use of an arithmetic average in itself is erroneous in this context, a geometric average of multipliers should be used instead).

Secondly, the FCC was projecting US mobile data traffic, not North American data traffic, which is the source of the quoted 563PB per month (which is taken from Cisco’s February 2015 mobile VNI report). We can see the difference, because the February 2010 Cisco report (available here) projects growth for North America from 16.022PB/mo in 2009 to 773.361PB/mo in 2014, a multiplier of 4827%, whereas the FCC paper quotes Cisco growth projections of 4722% from 2009 to 2014. (The reason for the difference is that growth in Canada was expected to be faster than the US, because Canada was expected to partially catch-up with US in mobile data traffic per user over the period).

If CTIA had bothered to look at Cisco’s mobile VNI tool, which gives data for major countries, it could have easily found out that Cisco estimates US mobile data traffic grew by 32 times between 2009 and 2014, not 35 times as the FCC forecast, let alone the 47 times that Cisco forecast back in February 2010.

Moreover, CTIA completes fails to mention that Cisco’s figure for 2014 (which according to the VNI tool is 531.7PB/mo for the US, rather than the 562.5PB/mo for North America that CTIA quotes), is completely different to (and far higher than) CTIA’s own data, which is based on “aggregated data from companies serving 97.8 percent of all estimated wireless subscriber connections” so should obviously be far more accurate than Cisco’s estimates.

However, CTIA is instead running away from its own data, stating in a footnote to the new paper that:

“Note that participation in CTIA’s annual survey is voluntary and thus does not yield a 100 percent response rate from all service providers. No company can be compelled to participate, and otherwise participating companies can choose not to respond to specific questions. While the survey captures data from carriers serving a significant percentage of wireless subscribers, the results reflect a sample of the total wireless industry, and does not purport to capture nor reflect all wireless providers’ traffic metrics. CTIA does not adjust the reported traffic figures to account for non-responses.”

Compare that disclaimer to the report itself, which notes that “the survey has an excellent response rate” (of 97.8%) and that it is adjusted for non-responses (at least so far as subscribers are concerned):

“Because not all systems do respond, CTIA develops an estimate of total wireless connections. The estimate is developed by determining the identity and character of non-respondents and their markets (e.g., RSA/MSA or equivalent-market designation, age of system, market population), and using surrogate penetration and growth rates applicable to similar, known systems to derive probable subscribership. These numbers are then summed with the reported subscriber connection numbers to reach the total estimated figures.”

CTIA’s wireless industry survey states that total US mobile data traffic was 4061PB in 2014, equating to an average of 338.4PB/mo over the year. Even allowing for the fact that Cisco estimate end of year traffic, not year averages, it is hard to see how the CTIA number for Dec 2014 could be more than 400PB/mo, some 25% less than Cisco.

If we instead compare growth estimated by CTIA’s own surveys (which only provide data traffic statistics back to 2010), then the four year growth from 388PB in 2010 to 4061PB in 2014 is a multiplier of 10.47 times, whereas the FCC model is a multiplier of 13.86 times (3506%/253%) and Cisco’s projection is a multiplier of 19.51 times (4722%/242%).

Thus by any rational and undistorted analysis, the FCC’s mobile data traffic growth projections have proven to be overstated. Likely reasons for this include the increasing utilization of WiFi (which was dismissed by the FCC paper, stating that “the rollout of such network architecture strategies has been slow to date, and its effects are unclear”) and the effect of dilution, as late adopters of smartphones use far fewer apps and less data than early adopters.

Nevertheless, what the data on traffic growth does confirm is that the FCC’s estimate of a 275MHz spectrum deficit by 2014 was utter nonsense. Network performance has far outpaced expectations, despite cellsite growth being far slower than predicted (3.9% compared to the 7% assumed in the FCC model) and large amounts of spectrum remaining unused: if we simply look at the Brattle paper prepared for CTIA last month, its easy to calculate that of the 645.5MHz of licensed spectrum identified by Brattle, at least 260MHz remains undeployed (12MHz of unpaired 700MHz, 10MHz of H-block, 65MHz of AWS-3, 40MHz of AWS-4, 20MHz of WCS, and all but around 40MHz of the 156.5MHz of BRS/EBS).

Thus in 2014, the US didn’t require 822MHz of licensed spectrum as the FCC forecast (which would have increased to 861MHz if the FCC model was corrected to the supposed traffic growth of 32x, as estimated by Cisco, and the actual number of 298,055 cellsites, as reported by CTIA), but instead, as CTIA proclaims, US mobile operators enabled “Americans [to] enjoy the best wireless experience in the world” with less than 400MHz of actual deployed spectrum.

1 Comment »

  1. TMF Associates MSS blog » Cisco shoots CTIA’s hostage to fortune… said,

    February 4, 2016 at 10:03 am

    [...] June, I pointed out that CTIA had taken the odd (but hardly surprising) decision to run away from its own data on US [...]

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