The Evolution of Bandwidth

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June 18, 2009
Internet Connectivity
Trevor Warner
JeffParker

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© 2009 Hospitality Upgrade. No reproduction without written permission.

The importance guest networks now play in driving and keeping guestroom nights is well known.  In many surveys, guest Internet continues to be the second driver behind a clean room. The first issue plaguing guest networks is speed.  Bandwidth has become a crucial driver to making sure your network meets or exceeds guest demands without disrupting your budget. The current status of bandwidth in the hospitality industry and the emerging technologies will affect your short and long-term strategies for continuing to meet your guest demands. There never seems to be enough bandwidth. The pervasiveness of mobile phones, laptops and entertainment devices has moved the model from 5 percent to 10 percent of occupied rooms being the number of connections, to two to three times the number of rooms occupied.

Usage is also increasing based on the type of user needing access. Road warriors and business people are no longer the target audience, leisure and inexperienced travelers are now common place on your hotels’ networks. Slingbox™, Xbox®, hulu™ and Roku are coming for your bandwidth, and they are hungry. Services that stream entertainment are being used to augment the pay-per-view and limited channels that hotels are offering by comparison to what guests have at home. A Slingbox will take all available bandwidth from a network, rendering your e-mail users to watching e-mails trickle in. Roku offers premium video content, at high-definition picture and bandwidth. Delivering bandwidth is key to making sure your network works for everyone.

Even prior to the economic downturn, hotels did not have significant resources allocated to servicing guest bandwidth.  Factoring in the current economic climate, hotels must balance maximizing every dollar with meeting guest demands. To complicate the situation, a single T1 is no longer the baseline for providing bandwidth to your guest network. While a T1 is engineered to handle the number of sessions from a hotel network the bandwidth it delivers is suited for simple e-mail and general Web surfing (we’ll consider T1s the music equivalent of Cindy Lauper, a classic but best suited for the 1980s).  Guest traffic has become more sophisticated and thus exceeding a T1s' capabilities.  T1s also tend to be the most expensive bandwidth option when considering the per megabyte cost for providing the service.  With companies such as PKF Consulting forecasting U.S. hotels will see RevPAR decline 9.8 percent in 2009 yet actual reported numbers coming in around 21 percent, hotels must now look to emerging technology to meet the demand. 

With the decline of RevPAR and the increased demand to the second leading driver, what are the possible options?  The United States has long been behind in delivering adequate bandwidth for the modern demands, but no longer.  Here are some changes to know and consider when developing a bandwidth strategy. 

Voice/Data Combinations
With the evolution of dynamic bandwidth (voice delivered via IP to a traditional phone system along with the Internet connectivity) carriers have begun to deploy more advance technology for providing greater bandwidth capability.  One Communications recently launched OneSolutions, which is a high-capacity dynamic product in which voice is delivered via SIP, analog or digital on bandwidth connections up to 45MB.  To follow suit, other providers such as NuVox and XO have also launched similar high bandwidth dynamic products.  In the past carriers were limited to T1 speeds to deliver dynamic products but the new technology innovation now allows hotels to take both financial and operational advantage of the converged products at speeds that meet their demand.  This technology continues to use copper as the delivery method which gives it a leg up on other products since hotels have plenty of copper to the phone room. 

Cable
Comcast is the first U.S. cable provider to deploy DOCSIS 3.0 technology and has begun to deliver new classes of speed topping out at 50MB x 10MB for only $139 per month. The innovation isn’t necessarily the network but the DOCSIS 3.0 technology and subsequent DOCSIS modems located at the customers site. With new technology comes some restrictions. Comcast currently has a 250GB cap for the standard rate and charges a set fee for gigabyte usage above the cap.  Jacksonville, Chicago, Atlanta, San Francisco and a few other California markets already have been rolled out with an estimated 65 percent of Comcast markets to be completed by the end of the year.  Time Warner already has in motion similar DOCSIS 3.0 technology and will be making market announcements in the next few months.  Based on recent press releases, Charter, Cox and other cable providers are not far behind. While the cap on total bandwidth will require a well-deployed strategy, the speed opens up significant options to the hospitality industry. 

DSL
If you think the carriers have given up on all of the copper currently in the ground, think again.  In order to compete in the marketplace with the new cable and fiber, carriers who own a significant amount of copper have invested in new technology to take advantage of their infrastructure. Ericsson has recently introduced VVDSL that is said to offer up to 500MB over a 500 meter distance. The new technology eliminates much of the past DSL issues such as cross talk, which is a vital improvement over the current VDSL2 technology. 

While standardization of this technology will not be final until the fall of this year, it is clear that the Bell companies are not abandoning its copper.  From a hotel perspective, every hotel has copper facilities so the viability of the product (price and availability) is much better than some other bandwidth choices. 

Fiber 
Both AT&T U-verse and Verizon FIOS have continued to roll out their respective products with much success.  AT&T U-verse offers speeds up to 18MB for less than $100 per month.  Even Qwest has stepped up to the challenge and is delivering 20MB for $59 per month in some markets. Verizon FIOS offers speeds similar to Comcast topping out at 50MB with much greater upload speeds for less than $250 per month.   Availability used to be a problem for both products but the build out has continued despite the economy so the coverage area continues to expand.  Verizon FIOS in particular has become an extremely viable option for hotels when looking at secondary bandwidth for guest or admin networks.  Along with Comcast, this is a current consideration.   

Business class fiber products have also become much more viable.  Carriers have made significant efforts to sell the fiber bandwidth available on their networks.  Product options and availability have increased significantly while prices have dropped reaching $80 or less per megabyte consistently even on low bandwidth requests such as 5–10MB.  There have also been more efforts in third-party companies to facilitate dark fiber for possible clients in essence giving carriers more feet on the street. While fiber is still not available everywhere, it is an option to more hotels than ever before and will continue as carriers are strained to sell their available capacity. 

It should also be mentioned that while city networks have failed in some markets, there are markets such as Provo, Utah, where hotels can get fiber connectivity up to 60MB for under $200 per month. 

Fixed Wireless
The technology to deliver fixed wireless has continued to improve.  Fixed wireless would include WiMax, 56 Ghz, satellite and point to point.  A hotel will not realize the delivery method only the speeds and cost of the service.  The key to fixed wireless has always been the ability to overcome the last mile hurdle and do it in an extremely timely manner.  Many deployments can be completed in under five days which is a major advantage over wireline providers.  Like many other big bandwidth options, as the technology has matured and companies have stayed in business, the cost per megabyte has dropped significantly.  Like fiber, costs are consistently around $80 per megabyte and like fiber, hotels can purchase from 2MB up to a 1GB connection. 

Metro E–An Alternative to T1
Another copper wire-based connection that has grown in availability is Metro Ethernet (Metro E).  Metro E can be delivered via eight conditioned copper pairs or via fiber and operates as if you are directly on an Ethernet network.  Like fiber, Metro E has come down significantly in cost per megabyte over the last few years  In short, Metro E is a viable alternative to  a T1 that is readily available today giving you a solid product and price to meet guest demands.    Most importantly, the technology behind Metro E has allowed almost every carrier in the individual market to be able to offer the product.  Competition breeds better products and lower pricing. 

4G (WIMAX and LTE)
4G is the latest cellular data product offering up to 100MB up to a possible 1GB  data transfer rate.  For a comparison, 3G can deliver up to 14MB but rarely allows users to meet those data rates.  LTE is a competitor to WiMax, initially delivering CDMA speed levels, but slated to be competitive with WiMax very soon.

Sprint Nextel’s WIMAX is available in Baltimore and Portland with planned deployments in Atlanta, Las Vegas, Chicago, and nine other cities by mid 2010.  Verizon is looking to roll out LTE in 20-30 cites in Q1 2010. 4G may have the opposite affect on hotel infrastructure since it will allow a consumer to stick with his personal cellular data connection and not use the hotel network.  We are already seeing the similar effects of 3G cellular on hotel networks.  That is an article for another issue. 

As wireless routers continue to mature 4G becomes an option for hotels giving a new wireless ISP option.  This becomes especially important for hotels located in difficult to reach areas inside or outside the city.  Many properties could not get the products they needed because they were on the wrong side of the road in a major U.S. market.  Having a wireless option such as 4G reduces physical location issues while still delivering the desired speeds.  Until 4G matures it will not be a primary connectivity option but as a secondary option it becomes intriguing. 

With greater bandwidth options comes the technology to make it more efficient.  Many of the bandwidth technologies such as Verizon FIOS, cable and DSL are not engineered to handle the number of users a hotel network will generate.  Using smart routing such as link load balancing and bandwidth management allows hotels to build intelligent bandwidth to maximize the guest experience.  In the examples given above, imagine choosing four providers with a total cost of under $1,000 per month but delivering over 100MB on four redundant Internet connections.  Bandwidth redundancy is extremely important but again a topic for another issue. 

Do you really need a 100MB bandwidth connection to your network?  Good question.  The famous Microsoft quote in 1981 from Bill Gates was, “Nobody will ever need more than 640Kb RAM.” Times change and so have our data needs. Yes Bill, we need more than 640Kb and yes, we’ll need 100MB on our guest network. 

Trevor Warner is the president of Warner Consulting Group and co-wrote this article with Jeff Parker, the vice president of technology for Magnolia Hotels.



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