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Carriers Warm Up to Service Innovation

6/17/2014
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Carriers typically concern themselves with just their network and technology, but they are starting to experiment with new service models and form partnerships with OTT players.
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MordyK
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MordyK,
User Rank: Light Sabre
6/20/2014 | 2:55:12 PM
Re: About time
Agreed! which makes the carrier communities annoyance with OTT's look like the petulant outburst of a spoiled child used to getting its way.
Infostack
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Infostack,
User Rank: Moderator
6/20/2014 | 2:50:02 PM
Re: About time
MordyK, no it was clear.  There is no unfair advantage or taking.  If anything BB uptake has been part of a virtuous process that I call "one big metcalfian suck" or pull-through model.  Just like 2nd lines for dial-up, fax and home businesses in the 1980-90s, the edge access providers are "along for the ride" and not really in control of their own destinies.

That may sound harsh, but it is reality.  The sooner they wake up to this and choose their areas of relative and absolute strength in the new informational stack the better.  It's what IBM did in the early 1990s as it became apparent that distributed processing would be as big or bigger than centralized processing.  (Ironically we're going back to where we started, but IBM has done quite well).
Infostack
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Infostack,
User Rank: Moderator
6/20/2014 | 2:45:34 PM
Re: About time
mendyk, I personally believe Wheeler is working to engineer a compromise.  But he needs good analysis from a broad-based, neutral constituency.  The opposing sides both have much to loose with their extreme positions.  Collective we are falling farther and farther behind the rapid tech and demand shifts happening.
mendyk
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mendyk,
User Rank: Light Sabre
6/20/2014 | 2:38:50 PM
Re: About time
Policy issue -- absolutely. And it will require just about everyone to rethink things and leave past positions like net neutrality behind. Extremely difficult (and I wouldn't blame anyone for saying impossible), but it will happen at some point.
MordyK
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MordyK,
User Rank: Light Sabre
6/20/2014 | 2:36:10 PM
Re: About time
I guess my comment was unclear. WHat I meant by "riding the networks" was that they must learn from the flexibility, creativity and innovation of those webscale companies that "take advantage" of their networks. For Example: Google innovations in webscale delivery and reliability, Youtube & Netflix in video delivery & optimization, Amazon's AWS, etc.
Infostack
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Infostack,
User Rank: Moderator
6/20/2014 | 2:16:48 PM
Re: About time
A huge policy issue as well.

I'm not a fan of the contrived notion of net neutrality, as I believe it was created by competitive apologists who avoid historical reality of data evolving out of competitive voice networks.  I am a fan of open access in the lower layers at the edge.  As has been the case over the past 30 years, it's actually the salvation for the incumbents.

But concurrently, there is definitely a need for balanced settlements (not reciprocal compensation or 2-sided revenue takings) arrived at via market mechanisms and not regulatory edict or price-setting. Elsewhere on BTE discussion threads I speak to the opportunity of competitive APIs and focusing more on the wholesale side of the business to facilitate interworkings.

The IP stack, because of its private networking roots, lacks price signals and incentives.  The clearinghouse revenue models are advertising (in exchange for which we give up our privacy), enteprise intra and extranets, and carrier peering and transiting of traditional voice and subscription services.

What's missing is a centralized procurement model which will coordinate and drive edge demand more uniformly and therefore investment more rapidly.  But the carriers need to transcend their silo mentality and we need to reject another equally farcical notion as net neutrality of bill and keep.

At the end of the day, a managed service, centralized procurement model will be larger than the other revenue models.  We were heading that way until TA96 inadvertently mucked things up.
mendyk
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mendyk,
User Rank: Light Sabre
6/20/2014 | 2:07:01 PM
Re: About time
Infostack -- I agree we should have done more at BTE with this issue. It was covered in several sessions, but mainly as an adjunct. In the opening remarks to BTE, though, Steve Saunders did identify OTT Service Delivery as the number one issue in the telecom ecosystem. The area is still a but murky but it's coming together, and Heavy Reading will be turning a lot of attention to it in these formative stages. And yes, this is even more of a business model issue than a technology issue.
Infostack
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Infostack,
User Rank: Moderator
6/20/2014 | 11:50:55 AM
Re: About time
"Riding their networks" is different and unfortunately wrong perception from the reality that end-user's pay them to "access" those central apps or content.

The edge access providers should understand that they are simply transitors and facilitators, not the gate-keepers and stiflers they are.
MordyK
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MordyK,
User Rank: Light Sabre
6/19/2014 | 8:14:51 PM
Re: About time
Good points!

I wouldn't say that the model is obsolete, but the focus and reliance on a single element acts as a blinder and hinderance to the exploration of new models and opportunities hidden in plain view within their existing business.

This is made even more incomprehensible by the fact that companies have been in the public domain and riding their networks, that have been using and proving these new models. Instead of learning and taking lessons, they simply complain and scream the new dirty word: OTT...
Infostack
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Infostack,
User Rank: Moderator
6/19/2014 | 4:25:20 PM
Re: About time
Could it be that service providers have obsolete business models?

Interesting that this issue was not addressed directly at the conference.

SPs are at the "edge" of the global "core".  The scale and cost difference between the core and edge are huge.

The competitive WAN core is at 100,000 voice minutes per cent, while the non-competitive MAN edge is at 10 minutes per cent.  Viewed that way, the recent Netflix peering deals with edge access providers (aka ISPs) is simply an attempt by the latter to keep the WAN/MAN demarc closer to the core.  This is what they've done for 100 years, but after 30 years of scaling at the core, it's too little, too late.

Service providers need fundamental rethinks as 4K VoD, 2-way HD video collaboration, seamless mobile BB and IoT develop rapidly.  Critical performance issues around capacity (particularly upstream), latency, QoS, security and redundancy need to be addressed in conjunction with the core app and content providers.
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