Sort by:[Date]

Net Neutrality Primer: Efforts to Regulate Broadband Services Prove Fruitless; Heavy-Handed Tool the Next Step?

by David Dixon,  - FBR Capital Markets [edited by Alan J Weissberger]


The FCC has long sought to impose rules requiring Internet providers to offer "net neutral" treatment to all Web traffic but has faced  litigation over its legal authority at every step. The FCC's next move  following Verizon's successful appeal of the FCC's Open Internet Order has implications for the evolution of the Internet and, potentially, the 2016 presidential race. Stakeholders are fighting hard to  influence Congress, the White House, and the FCC. A Title II-based ruling on fixed broadband appears likely, as are efforts to expand FCC  oversight to wholesale interconnection. Litigation is likely for years  to come.  [Please see Addendum for history and definition of terms]

Regulatory uncertainty comes at a difficult time for the  telecom sector, which is facing multiple challenges:

(1) increased  wireless competition;

(2) improved cable network competitive  positioning due to the extensive fiber-based network reach and  WiFi-based wireless network potential;

(3) continued erosion of value  up the stack to more innovative application service providers; and

(4)  a necessary (but net present value negative) increase in wireline fiber network platform investment to support the ever-increasing bandwidth requirements of the less regulated wireless segment.

Irrespective of  the regulatory outcome, with major wireless networks out of spectrum in many major markets, significant cell site densities and fiber-to-the-home investments are needed to improve competitive  positioning, relative to cable, and to address poor indoor wireless coverage and capacity challenges.

The market is pricing in a  continuance of a light regulatory touch in the wireless and wireline  broadband segments. Importantly, it is not pricing in upside from  higher interconnection revenues, specialized services, or specific  content-distribution agreements. We expect the FCC to maintain a light  regulatory touch (expanded to interconnection and WiFi networks), but  it may decide to maintain this position in the fixed-broadband segment  through the introduction of a heavy-handed legacy framework that  provides flexibility to immediately withdraw regulatory oversight in  areas such as rate regulation. This decision, along with expanded  regulatory scope and uncertainty regarding litigation outcomes, is  likely to negatively affect sentiment toward the sector.

What's at stake?

The regulatory outcome for broadband services will shape the Internet's future direction. Proponents of net neutrality argue that paid prioritization will divide the Internet between the "haves" and "have nots"; opponents claim this would   prompt infrastructure upgrades. Furthermore, opponents argue that Title II reclassification will (1) stymie innovation and investment and (2) impede broadband adoption.

Regulatory oversight to incorporate wholesale interconnections (e.g. paid peering):

From a cable and content sector perspective, the FCC would like to establish greater regulatory oversight on interconnection  agreements between last-mile providers and content providers (the major issue for Comcast/TWC and, therefore, a likely merger  condition), but legal authority is unclear.

The FCC is not seeking to end direct-paid peering agreements  or regulate wholesale interconnection pricing. Our FCC checks suggest content providers must be prepared to pay a reasonable amount for carriage. There is more evidence of wholesale arbitrage from content players than monopolistic behavior. Last-mile providers want the flexibility to charge appropriate  interconnection rates (and to seek to increase these rates over time). The FCC will seek legal authority to keep rates just and reasonable. The consent decree for CMCSA/TWC will likely include      such a requirement.

Our position on Net Neutrality Net neutrality has become a high-profile topic, particularly after the White House tossed its hat into the ring. While the issue will likely become even more politicized in the lead-up to the FCC's decision, we see FCC Chairman Wheeler attempting to thread the needle between the White House's positions despite his appointment by President Obama.  We think a pragmatic approach by the FCC could with stand challenges in court.

In fixed broadband, Title II, with forbearance, appears likely, and this will be met with litigation.  The hybrid approach is an interesting alternative that could gain industry support over time. In this scenario, Internet traffic would be classified as either "wholesale" or "retail," but this would not preclude paid prioritization. Data exchange between content originators and ISPs (wholesale) would be governed under Title II, and traffic between ISPs and end users (retail) would be regulated under Section 706. Given market competitiveness, the FCC would likely forebear additional requirements, in our view. Moreover, we believe interconnection fees will garnerfurther scrutiny as the FCC is sensitive to access abuses but still favors a light regulatory touch, providedthe ISP industry maintains a fair and just fee basis for network traffic imbalances with intermediaries.

While less favorable, other approaches under FCC consideration include:

(1) full Title II reclassification,

(2) full Section 706 implementation, and

(3) Title II reclassification but with Section 706 application.

The FCC willcontinue to push for clarity on three fronts, and its rules will vary by service. These thrusts include:

(1) Capital Hill legislation, which would likely be a four- to six-year cycle.  The FCC has always been responsive to Congress, but long cycles are problematic. A contentious FCC position could accelerate Republican efforts on the Hill and slow FCC progress at the same time.

(2) The courts: the FCC understands it must provide rules that are legallydefensible and, as such, is biased to Title II–based rules.

(3) Merger conditions will expand on the Comcast/NBC Universal consent decree to include oversight of wholesale interconnection and WiFi networking.

Rules will likely vary by service: (1) fixed broadband, (2) mobile broadband, (3) interconnection, (4) special services, and (5) WiFi.

We expect a decision on fixed broadband rules in 1Q-2015 followed by rules on mobile broadband and interconnection in mid 2015, coincident with regulatory approval and merger conditions imposed on Comcast/Time Warner Cable.

From a fundamental perspective, while there was a substantial valuation shift in the 2000s from the cable sector to the content sector due to higher payments for broadcast content distribution rights, and the table stakes are high for ISPs in the Internet interconnection domain, it is too early to determine the extent of any potential valuation shift in favor of ISP carriage over content.

Addendum:  A Brief History of Net Neutrality and FCC Efforts to Regulate Broadband Services

In 2002, the FCC issued the Cable Modem Order, which established broadband service as a lightly regulated(Title I–based) information service, versus a heavily regulated (Title II–based) telecommunications service.This Order was unsuccessfully appealed by Brand X to the Supreme Court, which was seeking wholesaleaccess to high-speed Internet access services.

The Supreme Court ruled in 2008 that administrative agencies(such as the FCC) have the authority to interpret ambiguous statutes. Specifically, the Court found that,if a statute (e.g., Telecom Act of 1996) is ambiguous, and if the implementing agency's constructionis reasonable, precedent requires the Court to accept the agency's construction of the statute, evenif the agency's reading differs from what the Court believes is the best statutory interpretation. This interpretation trumped precedent established by the Court of Appeals unless the Court found the statuteto be unambiguous.

In 2004, FCC Chairman Powell introduced an unenforceable Internet policy statement, known as the“four Internet freedoms,” to encourage broadband deployment and preserve and promote the open andinterconnected nature of the public Internet:

(1) Freedom to Access Content: consumers should haveaccess to their choice of legal content;

(2) Freedom to Use Applications: consumers should be able to runapplications of their choice;

(3) Freedom to Attach Personal Devices: consumers should be permitted toattach any devices they choose to the connection in their homes; and

(4) Freedom to Obtain Service Plan Information: consumers should receive meaningful information regarding their service plans.

Although the FCC did not adopt rules in this regard, it planned to incorporate these principles into its ongoing policy making activities.In 2005, FCC Chairman Martin adopted a wireline broadband report and order and notice of proposed rulemaking that classified wireline broadband Internet access services as information services.

This brought these services, including DSL service, out from under the Title II regulatory regime and in line with theTitle I–based regulatory treatment of cable modem services.  The determination was sought by the major telecom service providers that were investing capital to deploy DSL service in an effort to catch the market leadership position established by the cable sector.

In 2007, the U.S. Court of Appeals denied a petition forreview of the FCC's Wireline Broadband Order. FCC Chairman Martin responded, saying, "I am pleased that the Court affirmed the FCC's decision to remove outdated, decades-old regulations from today's broadband services. By removing such regulations, the Commission encouraged broadband investment and fostered competition. As a result of the Commission's deregulation policies, broadband adoption has increased and consumers have benefited in the form of lower prices and improved broadband service."

The FCC also released an Internet Policy Statement in 2005 that endeavored to ensure that broadband consumers would have access to all lawful internet content and that all lawful applications could be used on the networks. Similarly to Chairman Powell's four Internet freedoms, the Statement outlined four principlesto encourage broadband deployment and preserve and promote the open and interconnected natureof the public Internet:

(1) Consumers are entitled to access the lawful Internet content of their choice;

(2) consumers are entitled to run applications and services of their choice (subject to the needs of lawenforcement);

(3) consumers are entitled to connect their choice of legal devices that do not harm thenetwork; and

(4) consumers are entitled to competition among network providers, application and serviceproviders, and content providers.

These principles were limited by the needs of broadband providers toreasonably manage their networks. The FCC applied one of the agreed-upon conditions to the October 2005 approval of both the Verizon/MCIand the SBC/AT&T mergers. The companies agreed to commit, for two years to conduct business in a way thatcomported with the Internet policy statement. In a further action, AT&T included in its concessions to gain FCC approval of its merger to BellSouth to adhering, for two years, to significant net neutrality requirements.

Under terms of the merger agreement, which was approved on December 29, 2006, AT&T agreed to notonly uphold, for 30 months, the Internet Policy Statement principles, but also committed, for two years (expired in December 2008), to stringent requirements to maintain a neutral network and neutral routing in its wireline broadband Internet access service.

In 2005, Vonage, a voice-over-IP (VoIP) service provider, complained to the FCC that MadisonRiver Communications, a small North Carolina–based rural telephone company also operating as anInternet service provider (ISP), had inserted filters into its ISP network to block VoIP traffic. Madison River Communications was the former Mebane Home Telephone Company that fought Carterfone, the 1968 decision that first allowed subscribers to attach their own equipment to telephone lines.

Although it was the"poster child" for anti-competitive behavior, blocking VoIP traffic meant that it was impossible for Vonageto offer competitive VoIP service to customers of Madison River's Internet service. Madison River and the FCC agreed to a consent decree that said that Madison River Communications would not block VoIP trafficfor at least 30 months. The consent decree was backed up by an FCC order. The consent decree said that theinvestigation into Madison River regarded its compliance with section 201(b) of the Communications Actof 1934, but it did not provide any legal finding that Madison River had actually violated the Act.

The FCC stepped in to stop an ISP from blocking the ability of its customers to purchase Internet-based services from whomever they wanted.  

(1) There was no legal finding that blocking VoIP is wrong meant that a betterfunded provider not compromised by an IPO could test the precedent;

(2) the resolution was VoIP specific:Madison River could block anything else;

(3) the decree was limited to 30 months, after which Madison Rivercould start blocking again; and

(4) the Act that the FCC referred to may not cover Internet service providersthat are not part of a telephone company.

In 2006, the two major trade associations representing both the cable sector (National Cable and Telecommunications Association) and telecom sector (United States Telecom Association) publicly committed to the Internet Policy Statement at a Senate Commerce Committee Hearing on net neutrality in February 2006.

In 2008, the FCC ordered Comcast to stop interfering with BitTorrent traffic. ISPs had been throttling BitTorrent traffic for years. Specifically, Comcast was actively disconnecting BitTorrent seeds. FCC Chairman Martin noted that BitTorrent throttling was “arbitrary” and that the company had violated the FCC's Internet Policy Statement. Chairman Martin said that Comcast slowed down BitTorrent users independently of theamount of traffic they use, and that the company failed to communicate its network management practices to consumers.

Comcast appealed the FCC decision, saying that the agency's order was outside the scopeof its authority. In 2010, a unanimous decision by the Federal Appeals Court ruled that the FCC lacked the authority to force Internet service providers to keep their networks open to all forms of content.

The U.S. Court of Appeals for the D.C. Circuit found that the FCC lacked the power to stop Comcast from slowing traffic to BitTorrent,a popular file-sharing site. The decision focused on the narrow principle of whether the FCC had the right to regulate Comcast's network principles. The opinion was written so narrowly as to prompt the former legal counsel for the FCC, Sam Feder, to classify it as the worst of all worlds for the F.C.C. In his estimation,the Court case made it all but impossible for the FCC to expect an appeal victory, but it also opened upenough alternatives for the FCC to accomplish its same goals.

Thus, the Court's decision prompted the FCC to review ways to more concretely establish the agency as a regulator of Internet services. The Court ruled that the FCC relied on laws that give it some jurisdiction over broadband services but not enough to make theaction against Comcast permissible: "For a variety of substantive and procedural reasons, those provisions cannot support its exercise of ancillary (Title 1) authority over Comcast's network management practices."

The decision came as Comcast pursued FCC approval of its proposed $30 billion merger with NBC Universal, which put a library of content under the control of the nation's largest cable provider. In a consent decreeas part of the merger approval for Comcast/NBC Universal, Comcast promised to support the FCC's Open Internet Order and to keep the Internet “neutral” until 2020. Comcast agreed not to block its customers’ability to access lawful Internet content, applications, or services. Throttling would still be an option as longas it was part of standard network management procedure, or targeted at unauthorized transfers.

In December 2010, the FCC adopted its Open Internet Order, which was law from 2010–2014. Prior to 2010,the principles of an open Internet encapsulated net neutrality from 2005 until the establishment of the Open Internet Order; but these standards were unenforceable. The Open Internet Order created two classes of Internet access: one for fixed-line providers, and the other for wireless providers.

The net neutrality stance towards fixed-line broadband providers was more stringent than the approach towards wireless providers. Wireless carriers were less regulated because these companies were much more constrained than fixed-lineconnections. The Open Internet Oder followed three specific rules:

■ Transparency. Fixed and mobile broadband providers must disclose the network management practices, performance characteristics, and terms and conditions of their broadband services

■ No blocking. Fixed broadband providers may not block lawful content, applications, services, or nonharmfuldevices; mobile broadband providers may not block lawful Web sites or block applications thatcompete with their voice or video telephony services.

■ No unreasonable discrimination. Fixed-broadband providers may not unreasonably discriminate intransmitting lawful network traffic.

In mid 2014, in Verizon v. FCC, the United States Court of Appeals for the District of Columbia Circuit vacated the "no blocking" and "no unreasonable discrimination" rules of the Open Internet Order. The Court upheld the "Transparency" rule in the same ruling. The FCC has continued to encounter difficulties in its efforts to establish an open Internet policy. The court's decision emphasized the FCC's distinction between information services (broadband providers) and telecommunications services, which are treated as common carriers.

Because the FCC had previously chosen not to classify broadband providers as a telecommunications service, the court ruled them exempt from treatment as common carriers. More specifically, the non-blocking andnon-discrimination violated the Telecommunications Act of 1996's ban imposing common carrier obligationson ISPs, which the FCC refused to classify as common carriers. The FCC did not appeal the ruling but planned to reissue rules under Section 706 of the Telecommunications Act.

Section 706 focuses on the FCC's role to oversee the virtuous circle of innovation, with innovation from edge providers driving increased demand for broadband, driving network improvement, and driving further innovation from edge providers.  In Verizon v.FCC, the Court found in favor of the FCC in the following areas:

• Section 706 is an independent grant of authority to the FCC.

• The FCC reasonably interpreted section 706 as empowering it to regulate broadband access providers.

• There is substantial evidence supporting “virtuous circle” justification for rules.

Title II versus Section 706 of the Telecommunications Act of 1996 Under Title II, consumer broadband would be reclassified as "common carriers" and entail all of the rights and responsibilities that it implies. Title II offers both anti-blocking and anti-discrimination protection forconsumers, while ISPs are provided greater protection regarding copyright content being transmitted acrosstheir networks, compared to the Digital Millennium Copyright Act (DMCA).  However, it also burdens ISPs with additional obligations. Furthermore, many believe potential Title II reclassification would also lead to additional government requirements that neither proponents nor opponents would like to see, such as universal broadband access at the same price, or FCC-set pricing and rules around access and peering.

While burdensome, the FCC does have the authority to forebear these additional responsibilities. Given the FCC's track record, it is likely the FCC would choose to forebear if consumer broadband is reclassified under Title II. The FCC appears to have the most solid legal case to implement Title II–based regulation, but this is the most politically difficult solution, which will be subject to intense Congressional pressure on the FCC.

In contrast, Section 706 requires the FCC to promote (not regulate) broadband use in the U.S., and it does not mandate onerous requirements on ISPs (i.e., tariffs and set prices on peering). While many ISPs would favor this approach, it also comes with fewer protections. For example, under the Section 706 scenario, an ISP would be permitted to negotiate rates directly with individual content providers/originators (i.e., Netflix) for faster, prioritized access while limiting other providers to the standard (and slower) service. However, ISPs would not be protected from anti-discrimination rules.

© 2014 FBR CAPITAL MARKETS & CO. Institutional Brokerage, Research, and Investment Banking

Infonetics Surveys: Perceived top NA Cloud Service Providers; Google, IBM, Amazon lead in various categories

1.  Infonetics Research released excerpts from its 2014 Cloud Service Strategies: North American Enterprise Survey, which explores businesses’ plans for the adoption and usage of cloud services.

Infonetics survey respondents rated Microsoft, IBM, Amazon, Google and Cisco top cloud service providers (CSPs). Note that those companies are perceived as the top CSPs, independent of their actual market share, revenue or profits derived from delivering cloud services.

Infonetics asked survey respondence somewhat of an open-ended  question:  "Whom do you consider to be the top 3 cloud service providers?"

Marketing Director Kim Peinado explains, "We ask this question in a lot of our surveys, because it provides a good view of overall brand strength. Typically, the larger the provider (e.g., broad product portfolio) and the more visible their brand, the better they fare in this question."

From the report: "The majority of the CSPs named by respondents as top three cloud providers have a long history as a software vendor and professional services provider or were a very early entrant into the off-premises cloud services market. Cisco is the one exception, having been able to leverage its dominant position in networking and communications to launch a Web collaboration offering with significant market recognition."



. When asked whom they consider to be the top cloud service providers (CSPs), Infonetics' survey participants most often named Microsoft, IBM, Amazon, Google and Cisco
. Factors driving enterprise respondents' adoption of off-premises cloud include increased performance, agility, scalability, and reduced costs
. Cloud-as-a-service (CaaS) adoption grows through 2016, while infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS) decline
o CaaS appeals to businesses because it is an automated and pre-configured application execution environment operated on their behalf by a CSP
. The cloud spells disruption and opportunity for network equipment vendors: Respondents believe that shifting to the cloud will make it necessary to consider alternate vendors and demand better LAN and WAN performance
. For over 3/4 of businesses surveyed, a CSP's security reputation is a critical factor in the vendor selection process


"Our latest cloud strategies study shows that hybrid cloud will see a significant increase in adoption over the next two years, growing from 30% of respondent enterprises today to 46% by 2016," notes Cliff Grossner, Ph.D., directing analyst for data center, cloud, and SDN at Infonetics Research. 

Grossner continues: "This is driving a new architecture for the data center with virtualized servers, storage, and networks where applications are automatically deployed by data center orchestration software."



For its 29-page annual cloud service strategies survey, Infonetics interviewed qualified IT decision-makers with detailed knowledge of and influence in their organizations' cloud service plans and purchase decisions at 155 North American enterprises. Survey participants were asked about their current usage of and plans for deploying cloud services, including IaaS, CaaS, PaaS, SaaS deployment drivers and barriers, uses, technologies, and architectures (public, private, community, hybrid), as well as their opinions of cloud service providers (CSPs).


2.  Infonetics Research released excerpts from its new Cloud Services for IT Infrastructure and Applications market size, market share, and forecasts report, which tracks the off-premises cloud services market and the vendors who play in this space. 

The new 18-page cloud services report provides detailed analysis of the off-premises cloud services market, which consists of applications and computing infrastructure delivered from a cloud service provider's (CSP) data center, including infrastructure as a service (IaaS), cloud as a service (CaaS), platform as a service (PaaS), and software as a service (SaaS).


. Software as a service (SaaS) represents more than 2/5 of all off-premise cloud service revenue out to 2018
. North America is where off-premise cloud services started, and it will remain the lead market through at least 2018
. Google is the market share leader for CaaS and PaaS, IBM is #1 for SaaS, and Amazon is tops in IaaS

"We continue to see new tools to automate data centers and technology for developers appear in the market, driving innovation around cloud as a service (CaaS) and platform as a service (PaaS), the revenue growth engines for off-premises cloud services," notes Cliff Grossner, Ph.D., directing analyst for data center, cloud, and SDN at Infonetics Research.

Grossner adds: "The move to hybrid cloud architectures fuels the adoption of CaaS as enterprises migrate their on-premises data centers to a cloud architecture, where servers, storage, and networks are virtualized and applications are automatically deployed by data center orchestration software."


Infonetics' cloud services forecast report provides worldwide and regional market size, vendor market share, forecasts through 2018, analysis, and trends for off-premises cloud services, including IaaS, CaaS, PaaS, and SaaS. The report also tracks SaaS subscribers. Vendors tracked include Amazon, AT&T, CA Technologies, CenturyLink, Cisco, Citrix, Deutsche Telekom, Equinix, Google, IBM, Internap, Microsoft, NTT, Oracle, Rackspace, Salesforce, SAP, Time Warner Cable, Verizon, and others. 


To buy any of the reports, contact Infonetics:



. Infonetics' November Data Center and Cloud research brief:
. Infonetics forecasts carrier SDN and NFV market to reach $11 billion by 2018
. Orchestration software is the new battleground in the data center
. White box switching having a big impact on data center networking, up 95% from a year ago
. QLogic moves into #3 spot in converged data center network adapter market
. Data center and enterprise SDN market grows legs, soars 192% year-over-year
. 87% of medium and large North American enterprises surveyed by Infonetics intend to have SDN live in the data center by 2016 


Alan's Issues & Questions related to Cloud Services and Networking:

1.  With all the price wars, especially for public cloud, which CSPs (if any) or making money?  That's not generally reported by the companies in this market!

2. Access bandwidth- many cloud computing/storage apps will require fiber to the building- not bonded copper (n x DSL or n x T1 or T3). 

3. What networking technology to be used to get to/from the cloud service provider (CSP): public Internet, customer's existing IP-VPN, CSP's VPN, dedicated private line, Ethernet private line, etc. AT&T proposes to extend it's IP-VPN sold to enterprise customers by providing access to CSP partners.  Here's the article on that:
4. Mobile access will present a huge problem for CSPs.  Bandwidth Guarantees, QoS/SLAs, Roaming, and Security are important issues that need to be resolved.




Highlights of Infonetics' Carrier SDN and NFV Hardware and Software market size and forecast report

Infonetics' first-ever Carrier SDN and NFV Hardware and Software market size and forecast report, led by Chief Analyst & Infonetics Co-founder Michael Howard. has just been released.  Tthe report tracks network functions virtualization (NFV) and software-defined networking (SDN) hardware and software used in service provider networks.  It complements a Sept 2014 Infonetics report on SDN for different market segments -Data Center and Enterprise SDN Hardware and Software.

The new 46-page report provides detailed analysis of the SDN and NFV markets and their many facets-from SDN router and switch hardware and software, to the many categories of NFV, particularly the virtualized network functions (VNFs) comprising policy (policy and charging rules function [PCRF] and deep packet inspection [DPI]), the mobile packet core and evolved packet core (EPC), IP multimedia subsystem (IMS), and security. To buy the report, contact Infonetics.

. NFV represents the lion's share of the combined SDN and NFV market, from 2014 out to 2018
. The value of NFV is in the virtualized network functions software-the applications-rather than the orchestration and control; VNF makes up over 90% of the NFV software segment
. SDN and NFV exemplify the telecom industry's shift from hardware to software: SDN and NFV software are projected to make up of three-quarters of total SDN/NFV revenue in 2018

"For three years, the telecom industry has been abuzz over SDN and NFV, with anticipation and hard work developing the vision, goals, architectures, use cases, proof-of-concept projects, field trials, and even some commercial deployments. We've been gathering data in this early market for nearly two years and are projecting the global service provider SDN and NFV market to reach $11 billion in 2018," says Michael Howard, Infonetics Research's co-founder and principal analyst for carrier networks.

To better understand spending in this emerging market, Infonetics classifies SDN and NFV hardware and software in three distinct categories:

  • First, revenue from brand new SDN and NFV software, which we expect to make up 20% of the total SDN and NFV market in 2018.
  • Second, revenue that comes from products that companies will buy instead of buying something else-what we refer to as 'displaced' revenue, including NFV infrastructure (NFVI) hardware (servers, storage, switches) purchased instead of network hardware (routers, DPI, firewalls, etc.). This segment will make up about 12% of the market in 2018.
  • Third, revenue that comes from newly identified segments of existing markets: mostly the virtualized network functions (VNFs), and also ports on routers, switches, and optical gear that have become SDN capable. This last segment makes up the largest slice of the SDN and NFV pie, 68% in 2018.

"This forecast took a ton of work to get to and involved a lot of our analysts. Hopefully it provides useful data for the industry," said Kim Peinado, Infonetics' VP of Marketing (and the single best Marketing Communications professional this author has ever worked with in 42 years of tech writing.




Infonetics' new carrier NFV and SDN report provides worldwide and regional market size, forecasts through 2018, in-depth analysis, and trends for the network functions virtualization and software defined networking markets. The report tracks NFV hardware (NFVI servers, storage, switches) and NFV software (NFV MANO, VNF software). It also covers SDN capable service provider telecom hardware (in-use and not in-use routers, switches, and other hardware) and SDN orchestration and controller software and network applications.




To buy the report, contact Infonetics:

Note: In 2015, Infonetics will publish separate, more in-depth reports for the service provider SDN and NFV markets. 


. Mobile operators evaluating SDN and NFV for more flexible and cost-effective backhaul
. Strong sequential growth for carrier routers and switches in 2Q14 masks long-term trend
. Operators plan to move security, QoS, VPN and other services to virtual routers
. Carriers name Cisco the top router and switch vendor in Infonetics survey
. Data center and enterprise SDN market grows legs, soars 192% year-over-year
. SDN and NFV to bring about shift in data center security investments

Mobile Network Operators to deploy more small cells, but backhaul challenges remain

There's no doubt that mobile network operators (MNOs) need more capacity at a lower total cost of ownership.  New backhaul technologies are being considered, and some analysts predict $30 billion will be spent on backhaul equipment between now and 2017. However, with the explosion in demand for wireless bandwidth, which could reach 11.2 exabytes per month by 2017, there will be more small cell installations (to expand capacity due to frequency re-use in each small cell)ne, especially in hard-to-wire locations. These small cell extensions allow carriers to add capacity or coverage in a more targeted manner. However, the design and implementation of the backhaul and fronthaul can be even more complex than a traditional macro site.

“Operators participating in our small cell backhaul survey have yet to scale their small cell deployments, but they are looking to place over 20% of their traffic from the macro network onto small cells by 2018,” notes Richard Webb, directing analyst for mobile backhaul and small cells at Infonetics Research. “But they also tell us that backhaul-specific challenges like planning site acquisition, power and connection sourcing, and cost models have impacted deployment timelines.”

Infonetics Research released excerpts from its 2014 Small Cell Backhaul Strategies: Global Service Provider Survey, which provides insights into operator plans for small cell backhaul.


  • Ethernet over fiber is survey respondents’ preferred backhaul technology for outdoor small cells, followed bypoint-to-point microwave and millimeter wave
  • Ethernet over fiber is the most-used technology for in-building deployments
  • With small cell deployments occurring in a range of locations and with an array of topologies, no single backhaul technology will be a universal solution
  • Likewise, no single vendor is likely to dominate the small cell backhaul landscape; it is still early days, but so far survey participants strongly favor a group of vendors with wired and wireless backhaul solutions
  • Respondent operators rate price-to-performance ratio, product reliability, and pricing as the top 3 criteria for choosing a small cell backhaul vendor





For its 34-page small cell backhaul survey, Infonetics interviewed purchase decision makers at 25 incumbent, mobile, competitive, and cable operators from Europe, the Middle East and Africa, Asia Pacific, the Caribbean and Latin America, and North America about their current and future plans for small cell backhaul. The study provides insights into mobile traffic handling, specific backhaul issues related to in-building and outdoor small cells, and vendor preferences. The operators participating in the study control 29% of the world’s telecom capex.

To buy the report, contact Infonetics:


Ron Mundry, CEO & Founder of Tower Cloud wrote in a Light Reading blog:  

To accommodate increasing bandwidth demand, carriers such as Verizon Wireless are deploying more small cells, and sites are becoming smaller, simpler and denser. According to SNS Research, the global market for 3G and 4G plateaued in 2013 at $52 billion, and is expected to drop by 2% annually, falling to $47 billion by 2020. Carriers are shifting spending to heterogeneous networking (HetNet), including small cell, carrier WiFi, distributed antenna systems (DAS) and cloud RAN (C-RAN) hardware. The small cell and carrier WiFi market alone should reach $4 billion in 2015. Mobile network operators are gearing up for a new kind of backhaul architecture that makes better use of the fronthaul radio access network.

The old access/aggregation/core hierarchy model -- where data is collected at a base station and backhauled to aggregation points -- no longer works in overloaded wireless networks, especially in dense urban areas. Subscribers armed with smartphones and tablets with video capability are putting a strain on the edges of the network, and mobile operators are now using macro cells to extend network access. The result is an evolution in small cell and macro cell applications, and the adoption of new HetNet architectural models to deliver voice and data.

Of course, there are challenges with small cell fronthaul networks. Carriers have to transmit data from both high-power and low-power RRHs to the BBUs, and using small cells can introduce high levels of cell edge interference. There also may be difficulties interfacing with existing macro networks.

And both RRHs and BBUs have to overcome real-estate restrictions. You have to have access rights and power at the RRH from a streetlamp or other street furniture. The BBU has to be optimally placed in relation to the RRH units, and it has to be accessible for maintenance -- a combination of an engineering and a real-estate challenge. You also want to make fiber connections from the base station to the RRH and the antenna wherever possible, although wireless fronthaul and backhaul designs are evolving for cell sites deployed along roadsides and to cover rural areas, where fiber is even less practical.

As small cell architectures continue to evolve, it will be up to carriers and small cell providers to work together to perfect new design approaches that make engineering and economic sense. The early small cell installations have demonstrated positive price performance, but we have to perfect fronthaul design and closely manage cost of ownership to ensure that the promise of small cell density and the benefits of HetNet are fulfilled.



Highlights of Infonetics Macrocell Mobile Backhaul Equipment, Services & Strategies, +MMW reports

Infonetics Research released excerpts from its latest Macrocell Mobile Backhaul Equipment and Services report, which tracks mobile backhaul equipment vendors, identifies market growth areas, and provides analysis of equipment, connections, and cell sites.

"The macrocell mobile backhaul equipment market continues to be driven by demand for capacity increases to support LTE deployment and 3G network expansion. But there will be few greenfield macro base station deployments and this, combined with increasing pressure on equipment pricing, inhibits revenue growth in the long term," notes Richard Webb, directing analyst for mobile backhaul and small cells at Infonetics Research.

.    The global macrocell mobile backhaul equipment market totaled $8.4 billion in 2013, and Infonetics expects this slow-growing, mature market to reach over $8.5 billion in 2014
.    Microwave is anticipated to comprise 48% of mobile backhaul equipment spending in 2014 and trend downward slightly by 2018, in favor of wired solutions, predominantly fiber-based
.    The ongoing HSPA/HSPA+ onslaught across the 3GPP world and growing LTE deployments are fueling Ethernet macrocell backhaul spending, especially microwave and Ethernet
over fiber
.    IP edge router revenue is expected to increase in 2014 and continue to grow through 2018, generating a 2013-2018 compound annual growth rate (CAGR) of 2.4%
.    Infonetics forecasts a cumulative $45 billion to be spent on macrocell mobile backhaul equipment worldwide over the 5 years from 2014 to 2018




Infonetics' biannual macrocell mobile backhaul report provides worldwide and regional market share, market size, forecasts through 2018, analysis, and trends for macrocell mobile backhaul equipment, connections, and installed cell sites by technology. The report also includes an Operator Strategies Tracker. Companies tracked: Accedian, Actelis, Adtran, Adva, Alcatel-Lucent, Aviat Networks, BridgeWave, Canoga Perkins, Ceragon, Ciena, Cisco, DragonWave, E-band, Ericsson-Redback, FibroLan, Huawei, Intracom, Ipitek, Juniper, MRV, NEC, Overture, RAD, SIAE, Siklu, Sub10 Systems, Telco Systems, Tellabs, Thomson, ZTE, others.

To buy the report, contact Infonetics:

.    Infonetics' October Mobile Backhaul and Microwave research brief:
.    Momentum building in millimeter wave market, ignited by outdoor small cells
    Mobile operators evaluating SDN and NFV for more flexible and cost-effective backhaul
.    US$1 trillion to be spent on telecom and datacom equipment and software over next 5 years
.    Infonetics releases Global Telecom and Datacom Market Trends and Drivers report 
.    Operators launching 4G-based femtocells to ratchet mobile broadband services
.    Carriers going gangbusters with WiFi and Hotspot 2.0


Mobile operators evaluating SDN and NFV for more flexible and cost-effective backhaul:

Infonetics Research released excerpts from its 2014 Macrocell Backhaul Strategies: Global Service Provider Survey, which provides insights into operator plans for macrocell backhaul.

“The mobile network is evolving to incorporate small cells, distributed antenna systems (DASs), remote radio heads (RRHs), and WiFi, and though the macrocell layer still does the heavy lifting when it comes to traffic handling, the backhaul network behind all this is becoming increasingly complex,” notes Richard Webb, directing analyst for mobile backhaul and small cells at Infonetics Research. “Our macrocell backhaul study reveals the extent to which operators are looking at software-defined networking (SDN) and network functions virtualization (NFV) solutions to provide greater backhaul flexibility and cost-savings.”



  • Infonetics’ survey respondents have yet to scale their small cell deployments, but anticipate they will place over 20% of traffic from the macro network onto small cells by 2018
  • When asked if or when they will introduce software-defined networking (SDN) into the backhaul network, 29% of respondents say they are deploying or plan to deploy SDN at some point, while the majority (63%) are evaluating it as a possibility with no set timeframe
  • Among those surveyed, Ethernet on fiber will be the most-used technology for macrocell backhaul connections by 2016, followed by Ethernet-only microwave
  • Downstream bandwidth is the top-ranked service-level agreement (SLA) metric, rated very important by 92% of operators surveyed, followed by jitter, latency, and upstream bandwidth
  • Survey respondents not only seek vendors with strong macrocell backhaul product portfolios, but partners who can also support their strategies for holistic, flexible future-proofed networks



View on-demand analyst Richard Webb’s Making Mobile Backhaul Flexible with NFV and SDN, a webinar exploring how network functions virtualization (NFV) and software-defined networking (SDN) can be used to automate transport networks:


For its 28-page macrocell backhaul survey, Infonetics interviewed purchase decision makers at 25 incumbent, mobile, competitive, and cable operators from EMEA, Asia, Latin America, and North America about their current and future plans for macrocell backhaul. The study provides insights into operator deployment strategies, technologies, capacity requirements, packet timing and synchronization methods, SLA metrics, and vendor preferences. The operators participating in the study control 29% of the world’s .telecom capex

To buy the report, contact Infonetics:


 Infonetics Research released excerpts from its latest Millimeter Wave Equipment report, which tracks licensed and unlicensed millimeter wave equipment by market application (access, backhaul, and transport).

“Although the millimeter wave market is still modest in scale at this point, the enhanced capacity capabilities delivered by this technology will be invaluable as a backhaul aggregation solution for small cell deployments as they scale up,” says Richard Webb, directing analyst for mobile backhaul and small cells at Infonetics Research.


Webb continues: “We expect millimeter wave to play a significant role in outdoor small cell backhaul, which will become the primary long-term market driver.”



  • Infonetics projects the overall millimeter wave equipment market to grow to $755 million by 2018
  • The outdoor small cell backhaul segment of the millimeter wave equipment market is forecast by Infonetics to outpace all other segments of the market, growing at a 101% CAGR from 2013 to 2018
  • Licensed E-band 70–90GHz equipment accounted for 93% of millimeter wave sales in the first half of 2014 (1H14)
  • 90% of millimeter wave equipment revenue in 1H14 came from mobile backhaul applications, up from 85% in the second half of 2013 (2H13)
  • Currently, the top 3 players in millimeter wave gear are E-Band Communications, NEC, and Siklu (in alphabetical order), though Infonetics expects some consolidation to take place over the next 2 years as the market grows and more of the large mainstream microwave vendors move in from the wings




Infonetics' biannual millimeter wave report provides worldwide and regional market size, vendor market share, forecasts through 2018, analysis, and trends for unlicensed V-band (57–64GHz), licensed E-band (70–90GHz), and W-band (75–110GHz) millimeter wave equipment by network application (access, backhaul, transport). The report tracks units, revenue, and ARPU and follows Aviat Networks, Ceragon, E-Band, Ericsson, Fujitsu, Huawei, Intracom, NEC, Remec (BridgeWave), SIAE, Siklu, Sub10 Systems, and others.

To buy the report, contact Infonetics:



Huawei Displays SDN and NFV Technologies at SDN & OpenFlow World Congress in Germany

Huawei today showcased its software-defined networking (SDN) and network functions virtualization (NFV) technologies at the SDN & OpenFlow World Congress in Dusseldorf, Germany. At the event, Huawei discussed how industry partners can best utilize these technologies to further the development of the telecom industry, with specific focus on how its SoftCOM strategy will continue to help address this industry trend.

The SDN World Congress was advertised as an opportunity to examine developments, debate the issues and showcase the reality of SDN and NFV - and promises to be another milestone occasion for the whole market - carriers, data centres and enterprises.  There's a NFV FORUM and Proof of Concept Zone endorsed by ETSI as Forum Partner- at this conference as well.


"Huawei's SoftCOM will unleash the full potential of SDN and NFV, building an open and flexible network infrastructure for the ICT industry. We hope to work with all industry participants to create a future-oriented open network ecosystem in the cloud ICT era," said Ken Wang (Shengqing), President of Global Marketing and Solutions, Huawei.

As ICT technologies become increasingly cloud-based, telecom carriers are faced with the pressure of increased development costs and sluggish revenue growth. In this new era of ICT, carriers must now focus on evolving their businesses to address these challenges and regain competency. Based on the concepts of cloud computing, SDN, and NFV, Huawei developed the future-oriented telecom network architecture strategy, SoftCOM, which aims to help reconstruct the telecom industry from the perspectives of network architecture, network functions, as well as service and Observation and Measurements (O&M) models. The SoftCOM strategy enables telecom carriers to realize comprehensive network evolution and business transformation, thus creating and seizing new value opportunities through ICT integration. This approach will further help with establishing and advancing an open, interconnected, and innovative ecosystem, to increase and better leverage the aggraded industry value.

Focusing on technological development driven by business requirements, Huawei has experimented with numerous SDN and NFV innovations across all network fields and launched corresponding solutions to help carriers implement full-scale network and business transformation for the future. To date, Huawei has worked with more than 20 leading carriers around the world including Telefonica, China Mobile, China Unicom, and China Telecom, on over 60 joint SDN- and NFV-related innovation projects. In 2014, Huawei and global carriers executed several commercial SDN and NFV deployments, including the world's first commercial SDN deployment in cooperation with China Telecom, the SDN-based Wo cloud project in cooperation with China Unicom, the SDN-based hybrid cloud project in cooperation with China Telecom, and an NFV-based vIMS joint project in Europe.

The SDN & OpenFlow World Congress saw Huawei reveal its new Flexible Ethernet solution and an innovative network architecture MobileFlow, as well as several prototype systems of its new technologies at the event. The Flexible Ethernet solution has the flexibility to support various dynamic software-configured combinations of different Ethernet sub-interfaces. It marks different data connections and services that require different data traffic, and match them to their correspondent sub-interfaces accordingly. The Flexible Ethernet is an Ethernet revolution that will change the industry dominated by the traditional fixed Ethernet forever, and would greatly impact the future IP network architecture. In addition, the MobileFlow structure has realized unified deployment of mobile network control functions through cloud, while the previous plane model is only capable of service forwarding and processing. Through the southbound interface, the mobile controller is now able to conduct fine-grained forwarding control of the distributed forwarding devices, and also open the control capability to their application layers.

Huawei will continue to focus on the development of its SDN and NFV-based cloud technology, with the aim of facilitating the industry's network structural transformation for the future.

About Huawei Huawei is a leading global information and communications technology (ICT) solutions provider with the vision to enrich life through communication. Driven by customer-centric innovation and open partnerships, Huawei has established an end-to-end ICT solutions portfolio that gives our customers competitive advantages in telecom and enterprise networks, devices and cloud computing. Huawei's 150,000 employees worldwide are committed to creating maximum value for telecom operators, enterprises and consumers. Our innovative ICT solutions, products and services have been deployed in over 170 countries and regions, serving more than one third of the world's population. Founded in 1987, Huawei is a private company fully owned by its employees.

For more information:



Set Top Box Market is NOT Monolithic- Satellite, Cable, OTT, IPTV, etc from Infonetics + Research & Markets

I.  Infonetics Research released excerpts from its 2nd quarter 2014 (2Q14) Set-Top Boxes and Pay TV Subscribers report, which tracks IP, cable, satellite, and digital terrestrial (DTT) set-top boxes (STBs) and over-the-top (OTT) media servers.

.    Globally, set-top box (STB) revenue-including IP, cable, satellite, and DTT STBs and OTT media servers-is up 4% in 2Q14 from 1Q14, to $4.8 billion
.    STB unit shipments grew 7% sequentially in 2Q14, but are down 3% from the year-ago 2nd quarter of 2013
.    Cable STB revenue increased by 3% sequentially in 2Q14, and unit shipments grew 4% during this same period
.    Arris, the worldwide STB market share leader, gained almost 2 share percentage points in 2Q14 over 1Q14
.    Over-the-top (OTT) media servers are quickly becoming the STB of choice for pay TV providers in emerging markets such as China, where free video content is abundant and service providers are looking to bundle live streaming video with their own broadband offerings
.    The worldwide STB market is forecast by Infonetics to be essentially flat, i.e. growth at a -0.05% compound annual growth rate (CAGR) - from 2013 to 2018, when it will total $19.2 billion.
.     Surprise forecast: In 2018, satellite STBs are expected to contribute the majority of STB revenue at 36%

"The global set-top box (STB) market is in a fascinating period of mixed signals. While quarterly unit shipments are up, on a year-over-year basis shipments are down. And though nearly all STB product categories saw volume increases in 2Q14, satellite shipments continue a downward trend, while cable set-tops are growing due to an ongoing refresh cycle in North America and Europe," says Infonetics' Jeff Heynen, principal analyst for broadband access and pay TV.


Infonetics' quarterly STB report provides worldwide and regional market size, vendor market share, forecasts through 2018, analysis, and trends for IP STBs; cable and satellite STBs (digital, hybrid, video gateways, media players); DTT STBs; and OTT media servers. The report also tracks telco IPTV and cable and satellite video subscribers. Vendors tracked: ADB, Apple, Arris, Changhong, Cisco, Coship, DVN, Echostar, Huawei, Humax, Jiuzhou, Kingvon, Netgem, Pace, Roku, Sagemcom, Samsung, Skyworth Digital, Technicolor, ZTE, others.

To buy report, contact Infonetics:

.    DOCSIS channels pass 1 million for first time in Q2; CCAP revenue up 42%
.    Broadband aggregation equipment passes $2B in 2Q14 as operators 'binge on broadband'
.    Fixed broadband infrastructure investments are rebounding in Brazil
.    OTT and multiscreen TV drive spending on broadcast and streaming video equipment
.    802.11ac routers to make up nearly a third of WiFi-enabled router shipments by 2015

II. Research and Markets has announced the addition of the "Global and China Set-Top Box (STB) Industry Report 2014" report to their offering.

The Global and China Set-Top Box (STB) Industry Report 2014 is a professional and in-depth study on the current state of the global set-top box industry with a focus on the Chinese market.

The report provides a basic overview of the industry including definitions, classifications, applications and industry chain structure. The set-top box market analysis is provided for both the international and Chinese domestic situations including development trends, competitive landscape analysis, key regions development status and a comparison analysis between the international and Chinese markets.

Development policies and plans are also discussed and manufacturing processes and cost structures analyzed. Set-Top box industry import/export consumption, supply and demand figures and cost price and production value gross margins are also provided.

The report focuses on thirteen industry players providing information such as company profiles, product picture and specification, capacity production, price, cost, production value and contact information. Upstream raw materials and equipment and downstream demand analysis is also carried out. The set-top box industry development trends and marketing channels are analyzed. Finally the feasibility of new investment projects are assessed and overall research conclusions offered. 

For more information visit

Media Contact: Laura Wood, +353-1-481-1716,


SIP trunking services market expected to grow 35% in 2014 & top $8 billion by 2018

Infonetics Research released excerpts from its new SIP Trunking Services market size and forecasts report, which tracks Session Initiation Protocol (SIP) trunking revenue, trunks, and average revenue per trunk.

SIP trunking is a means of synthesizing the Session Initiation Protocol and Voice over Internet Protocol (VoIP) to provide telephony services over data networks. The two leading SIP trunk providers are BroadVoice and 8x8, Inc.


 .    The global SIP trunking services market is on track to grow 35% in 2014, to $4.4 billion
.    The biggest market for SIP trunking services is North America, although new geographic markets continue to open up, helping fuel growth
.    More and more businesses are making the switch to SIP trunking, but they are not cutting 100% of connections to SIP on day one; rather, SIP is typically being deployed at one or two sites to start
.    Infonetics expects continued strong worldwide growth for SIP trunking over the next five years, forecasting the market to reach $8 billion in 2018
.    SIP trunking is being pitched alongside hosted PBX and unified communications (UC) services as more businesses seek hybrid solutions

"There is no denying the world is moving to IP, and SIP has become the de facto solution of choice for businesses for IP connections. In North America, slightly more than 20% of the installed business trunks are SIP trunking today, with significant upside opportunity," notes Diane Myers, principal analyst for VoIP, UC, and IMS at Infonetics Research.



Infonetics' annual SIP trunking services report provides worldwide and regional market size, forecasts through 2018, analysis, and trends for SIP trunking revenue, trunks, and average revenue per trunk.

To buy the report, contact Infonetics:


.    Infonetics' October Enterprise Voice, Video, and UC research brief:
.    Over 3/4 of N. American businesses surveyed plan to use SIP trunking by 2016
.    Shift to software and services in enterprise videoconferencing market tamps revenue growth
.    Enterprise session border controller (eSBC) market up 8% in 2Q14
.    PBX market struggles linger in first half of 2014; UC up 31% from year ago
.    Cloud PBX and unified communication services a $12 billion market by 2018


Analysis of the North American VoIP Access and SIP Trunking Services Market 2013-2020


Infonetics: 100G+ coherent network equipment moving to the metro

Infonetics Research released excerpts from its 2014 100G+ and ROADM Strategies: Global Service Provider Survey, which details the plans of operators transitioning optical transmission and switching equipment to higher-speed 100G+ wavelengths.

.    Respondent operators have reasonable expectations for pricing for coherent metro-regional and access applications versus the core
.    When it comes to end-use applications for metro 100G, study participants view data center interconnect as the clear killer app for the next 12 months
.    Respondents also expect a greater uptake of 100GE transport when compared to previous years' Infonetics surveys
.    Those surveyed expect 100G WDM to account for almost 40% of all metro wavelength deployments and 75% of the core network in 2017
.    Pluggable CFP and CFP2 technology is perceived by respondents as a more important technology for the metro this year than it was last year


"The big battleground for vendors of 100G-and-beyond coherent equipment and components has shifted to the metro as winners for long reach core applications have been decided," says Andrew Schmitt, principal analyst for carrier transport networking at Infonetics Research.

"There are two very distinct markets for coherent technology. One market is deploying long haul coherent today and will transition to metro in the coming years. But there is another, separate (network provider) customer type that is already fully committed to deploying coherent technology in the metro today," Schmitt adds. "These two markets have major implications for the supply chain regarding product specialization and the relative lack of interest in flex coherent technology by 
some customers."




 For its 19-page 100G+ and ROADM (Reconfigurable Optical Add/Drop Mulltiiplexer) strategies survey, Infonetics interviewed 31 incumbent, competitive, mobile, and cable operators from EMEA, North America, and Asia that have an optical transport network using WDM. Together, the respondents represent a significant 33% of the world's telecom revenue and 36% of global capex. The survey covers 100G WDM price points, metro coherent wavelength deployment trends, end-use applications for metro 100G, metro and core technology adoption rates, and key technologies for optical transport.

To buy the report, contact Infonetics:


Join Infonetics analyst Andrew Schmitt Oct. 28 at 11:00 A.M. EDT for Building More Efficient Networks with Multi-Layer Packet-Optical, an event examining how network operators are building more capable and efficient networks. Register to attend live or access the replay at:

.    Infonetics' October Optical research brief: 

Top 10 Things to Look for in a Metro 100G Platform

Fujitsu unveils 100G coherent CFP for metro networks

Infinera Targets Cloud for 100G Network Between Data Centers





Open Networking NOT truly OPEN without industry accepted Standards & APIs; Role of OpenStack Foundation?

There are so many flavors of "SDN" you can't keep track of them.  The term "SDN" has come to ONLY mean "software control of a network."   That could be anything and is a far cry from the original definition which included strict separation of the Control and Data planes, a "centralized controller" that computes paths for many packet forwarding engines (Data plane implementations) and a standardized API (Open Flow v1.3) as the "southbound API" between the Control and Data Planes.

What Guru Parulker of Stanford University called "SDN Washing" (non pure forms of SDN) have come to dominate the industry.  There are network overlay models with multiple instances of Control planes, network virtualization (overlay of a logical network over a physical network) using VMware technology or VxLAN tags, and extensions of proprietary, closed network equipment to accomodate some degree of user control over the network configuration and paths.

I don't think AT&Ts SDN WAN uses Open Flow or even a centralized  SDN controller to compute paths/routes for multiple data forwarding "engines."  Instead, they use a proprietary, dynamic routing protocol as described in this article:

you will see end to end "orchestrated API control"  with no explanation of what that is.  But that's presumably how network administrators "program" AT&Ts SDN WAN.  Of course, those and other APIs are proprietary to AT&T and their vendors/suppliers/cloud service provider partners, etc.
At the recent IT Roadmap-San Jose, CA conference, a speaker from Nuage Networks (owned by Alcatel-Lucent) referred to SDN as network virtualization using VxLAN tags.    That is not consistent with ONF definition of SDN
VxLAN is a virtual networking solution to support a flexible, large-scale multi-tenant environment over a shared common infrastructure.  It is designed to provide the same Ethernet Layer 2 network services as VLAN does today, but with greater extensibility and flexibility. It's supported by Cisco, VMWare, Arista Networks, Broadcom, Juniper, Citrix, Cumulus Networks, Red Hat, and others.  Here are a few references:
VXLAN was officially documented by the IETF in RFC 7348. 
There will be several vendors which might interoperate using the VxLAN virtual network overlay model  But that networking gear won't work on a pure SDN Open Flow network as defined by the ONF!
From this and many other examples, it seems SDN is "open" only to the extent of the SDN network provider (telco, DC operator, campus/ enterprise network) and its suppliers/vendors.  As such, I expect network equipment vendors to pick a few versions of SDN they'll support.  


What Standards are Required for SDN:

IMHO, Open networking imples multi-vendor interoperability, which requires standards for functionality, protocols, APIs, and interfaces that are in the public domain.   I believe the following standards are needed for SDN:

1.  API/protocol between the Control Plane entity and the Data Plane entity (Open Flow v1.3????)

2.  API/protocol between the Control Plane entity and the Management/Orchestration/Automation entity.  It's sometimes referred to as the "Northbound API"  or "Management plane API"

3.  Specification of exactly what functions the Management/Orchestration/Automation software entity performs, e.g. functional requirements.  See discussion below.
4.  API/protocol between the Control Plane entity and higher layer entities, e.g. Load Balancers, Application Delivery Controllers, Firewalls,  other virtual appliances. ONF calls that the "Northbound API"
5.  API/protocol between one "centralized" Control plane entity and another.  ONF refers to that as "East-West API,"  but no work has been done on it last time I checked.  When I asked Dan Pitt, what does one SDN controller use to communicate with another when the route/path is between two or more domains, he replied "use BGP for now." 
6.  SDN specific OAM and network management.
Role of OpenStack:
An orchestration/management/automation software entity is required with an API to either the SDN Control Plane entity ("Northbound or Management API") or to the NFV "virtual appliances." 
At the 2014 SVIEF annual conference, Chris Kemp, founder of Nebula and the OpenStack Foundation told me that Open Stack  is the best solution for orchestration & management software with specific APIs.  But it's years away (for being used in production networks) and not yet specified by any telecom standards body (e..g. ETSI, ITU, ANSI, ATIS, etc).  
OpenStack's Neutron API can be used to integrate the provisioning and management of these network resources into the orchestration of the overall IT infrastructure.  Neutron's open networking capabilities handle a wide range of tasks, including the management of both networks and IP addresses. Users can create their own networks, control traffic and connect servers using Neutron, while administrators can apply ONF's OpenFlow and similar technologies to deliver software-defined networking, multi-tenancy and high levels of scalability.
Within the Open Stack Foundation, there's a project called Open vSwitch     which is quite promising for open SDN designs.  
Open vSwitch includes OpenFlow (specified by the ONF), which enables one to define networking flow rules. Certain configurations use these rules to transfer packets between VLANs.  For example, Open vSwitch supports the VxLAN overlay model.


There's also OpenStack Networking API v2.0 (neutron) Reference

which can be used for authentication, request/response, bulk create, etc.  These are described at:
The companies involved in SDN need to specify which Open Stack projects, specifications and APIs are needed for management and orchestration of networking functions.  But what SDO will do that?  ONF, ITU-T, ATIS?
Stay tuned for a follow up article on this topic, with the help of Mr. Kemp of Nebula!