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Light Reading's Founder and CEO Steve Saunders sits down with CenturyLink's Non-Executive Chairman Bill Owens for a candid exchange of views about the current and future state of telecom, career choices and international waters.
July 12, 2016
I've enjoyed interviewing many interesting people since I rejoined Light Reading, but William A. "Bill" Owens certainly takes the biscuit, as we say where I come from.
To start with, Bill has a resume that puts all others in the shade:
A former Admiral in the United States Navy, Bill's naval career includes more than ten years (4,000 days!) of service on submarines, including duty in the Vietnam War, where he also served on swift boats. From November 1990 to July 1992, he commanded the US Sixth Fleet during the Desert Storm campaign. On March 1, 1994, Bill was appointed by President Clinton to serve as Vice Chairman of the Joint Chiefs of Staff, making him the nation's second highest-ranking military officer, overseeing more than 1.5 million people in uniform.
Figure 1: Bill Owens, Non-Executive Chairman, CenturyLink
Bill left the military in 1996, at which point he started a career in the communications industry -- one that includes firefighting the mess that was left at Nortel after Frank Dunn was fired for cause, as well as board seats and directorships at Polycom Inc., Wipro, and since 2009, the role of non-executive Chairman of CenturyLink.
But it is Bill's campaign to create an open business environment in North America in which Chinese vendors -- notably Huawei -- can sell their solutions on equal footing with suppliers from the US and other markets that has gotten him most attention recently; not much of it friendly, or positive. (Click here for Light Reading's POV on this situation.)
A patriot, then, but also someone not prone to run from a fight -- figurative or literal. And now, through his attempts to open the door to cooperation with China, probably the single most contentious figure in telecom.
You have to wonder why someone with a Wikipedia entry that reads like this would pick a fight with so many others in the rest of the industry. To find out, I got Bill on the phone at his home in Seattle. Here's what he had to say (and for more of the philosophy of Bill, check out his keynote at this year's BCE event in Austin).
Click through to the next page for the full interview.
Bill Owens: Hi Steve. How are you?
Steve Saunders: I'm really well. Glad that we're talking.
BO: This world is moving so fast; it's good both to be involved and to be learning from it all.
SS: Yes, we're living through extraordinary times; the nature of this industry which we are both part of has changed fundamentally. Back in the 90s, next-gen communications meant connecting expensive office equipment basically. Today, the network is indivisible from the world that it connects. It's really part of the DNA of global society.
BO: And so little of it is understood by so many -- especially governments. You watch how the FCC is trying to enforce the constitution in the face of the free Internet. It's very interesting.
SS: Tell me about the Amerilink experience. [Note: Amerilink was a failed effort to get Huawei approved as a supplier for Sprint's network by using trusted American leaders to provide ongoing warranties that it represented no security risk to the US people. In addition to Owens, board members included Gordon England, who served as deputy secretary of defense and homeland security under former President George W. Bush; former Speaker of the House Richard Gephardt; and former World Bank President James Wolfensohn.]
BO: It certainly immersed my mind into what the US government was about and also the value of Huawei. I got to see their engineering and technical capability, and I spent quite a lot of time in Kansas City [at Sprint's HQ]. At various times Huawei had several hundred people there. I found them to be quick to respond. And, as you know, Steve, they were extremely innovative in terms of finding solutions. This was at a time when Sprint was in all sorts of trouble. They had all of this spectrum, but no solution to integrate it and make them truly different and successful. Huawei placed the resources in Kansas City to come up with some wonderful solutions to integrate that spectrum that would have made a huge difference in Sprint's bottom line -- hundreds of millions of dollars -- if it had been allowed to go forward.
I was impressed enough to engage with the various agencies in Washington that I'm close to; the FCC, and the Defense and Intelligence organizations. And Huawei was very ready to cooperate with the United States government on whatever agreements were necessary. And I thought I understood the Senate and the House fairly well.
BO: Maybe. We came face to face with the political reality of Washington, and the fact that it was an election year. It is a very difficult thing to adequately prepare for something which continues to be as contentious as a Chinese player like Huawei coming into the United States.
SS: It's interesting. When I meet with the chief technology officers or other senior executives at very large North American service providers they almost universally express a wish to have the freedom to do business with Huawei, just as their overseas competitors do. And in three instances in the last few months I've had carriers tell me that they have Huawei equipment in their network, including in the core network. But of course then they immediately say "Please don't tell anyone that!" It's as if innovation is overcoming political procrastination; Huawei is here, now, but Washington is still saying, "No, no, keep them out." Do you think that situation in Washington will ever change?
BO: I do think it will change. As a nation we cannot be in a situation where telecom providers can't have access to the best technology in the world. In technology terms, nothing is so important to smaller states than availability of bandwidth, and yet we have great difficulty getting really quality high bandwidth into the rural states like North Dakota, Wyoming, Nebraska and Montana. And then when you look at the more populace states, the bandwidth there isn't as good as many as many other parts of the world. So there's clearly a digital divide.
You mentioned talking to CTOs; there's no question that CTOs and CIOs are all well-aware of what's available from Huawei, and in fact Huawei has already entered the United States in several ways. They've got some small enterprise contracts -- Red Bison is involved with a little bit of that [Ed.note: Red Bison Advisory Group is a consulting company founded by Bill and his business partner and another Nortel alum, Martha Bejar] -- and they're also working with some small rural telecoms providers.
In my view, it's strange that when we take our technology to Europe or to China we're not required to go through all of the same hurdles. I'm not saying it is all roses for us when we get to those places, because there are other kinds of restrictions, but it seems to me when we talk about fair free trade that when others allow our technology into their country we should be quite welcoming of others in return, including Huawei and ZTE. I'm afraid that the politics and to some degree the media get in the way of that.
Next page: The need for leadership
SS: One of the things that you've said to me previously, Bill, was that you didn't think that there could be a real change in the attitude towards Chinese communications companies in North America until there was a change under this administration. Do you still feel that way?
BO: This area requires some great leadership that doesn't take for granted the fact that America is number one in technology, and also says, "We need to be partners with other countries, especially China, in bringing the best of technology to the US." I happen to feel that that pertains to many other areas, too; things like pollution control. But certainly in the area of telecoms it's easy for people who don't know the industry well enough and want to make a powerful statement to say "I don't want the Chinese in the core of my networks." Those kind of statements tend to be a simplistic, because as we all know a lot of the [components that are used inside US telecom] equipment are actually manufactured in China.
Manufacturing is another interesting area. We just don't have very much of the manufacturing remaining here in the US. We're great at innovation, yes; we're great at the envisioning of what technology is going to become, but when you look at where this stuff is made, and the sophistication of the chips, and how quickly they are changing, it becomes very hard for a US company to compete. Of course there are a lot of smart people in India, China and Vietnam, and companies find that it is more beneficial to manufacture these things in the later phases of development overseas rather than in the United States, so you have whole industries moving out of the country, offshore. We should be players, saluting that, and celebrating our own innovation and our ability to develop the new things.
SS: I agree. I was talking to Chuck Robbins [CEO of Cisco] the other day and I asked him whether the consolidation of all of the equipment manufactures was bad for innovation and he said, "No. There's never been more communications startups in North America as there are now and the price of admission is a fraction of it used to because you used to have to get $250 million together to make a bespoke or proprietary chipset. Now you just need to get software engineers and go at it." That's what America is really good at: building innovative solutions involving smart young people. It's fine for some of the other stuff to go overseas as long as we keep that going.
Bill, I have to ask you: After a career like yours with so many successes in so many different areas, why would you choose to do this and carve out such a difficult task for yourself at this stage in your career?
BO: Those are some very nice words there, Steve. You just have to believe me when I say I want to do some good things for our country while I'm doing good business. The attitude is that we can make a difference. Personally, for me I think that's a great way for me to go out, not that I'm planning to go out intentionally anytime soon!
SS: You're still a young man, comparatively.
BO: [Laughs] Yeah, right. I do try to be totally honest because I also look at my life as a real blessing. I have been inside those systems in Washington, in the Pentagon, in the intelligence systems and in politics, so I understand that pretty well. And I also love this country and spent many years at $80,000 a year when my friends from the naval academy or Oxford had gone on to make millions and I've never been sorry.
I want to be able to talk to my son and for him to believe though that we are genuinely going to make a difference. So no, I'm not afraid of telling the story. I'm not afraid of being involved in the telecoms industry. Many people will say, "That guy has gone over the edge. You can't trust him anymore," but that's okay as long as we're satisfied that we're telling the story the way we believe it in our hearts, and that it's good for this country. That's more fluff than you wanted but it is how I feel.
Steve: It's not fluff. History will judge you. I believe you are taking the right position literally decades ahead of the rest of the country catching up. I am absolutely sure that in ten years' time or 20 years' time people will look back at this period of our history and say this was really crazy. This is why I think I'm so interested in what you are doing because telecom is the tip of a spear. There is a much bigger story behind it that goes beyond how the United States of America communicates to how it does business with the rest of the world, and how it fits into the rest of the world. That's really what we're talking about at this point. And in some ways we're going in the wrong direction in this country.
What do you think the best approach is for Huawei to break through in the US? Both Huawei and ZTE seem to be playing a very long game.
BO: They don't come into the United States with a forward-leaning strategy because they have been burned here, somewhat unfairly, in ways that they may not completely understand. It's very hard to understand the things that go on in Washington.
But what they have not yet had here is very senior leadership team that is American. They've had great senior people who work for them as advisors, but they're still very much in soul and spirit Chinese companies. And by the way, I think the Indian companies come to this country the same way.
Americans have learned from IBM and many others that that it's always best to be the nation that you're in. So, if you're going to be in the UK, you look British at all levels and you are British because the PL line belongs to a Brit basically.
That is not the way it is with the Chinese companies. And not only Huawei and ZTE. We've also seen it in other big Chinese companies -- both state-owned and private companies that come to the United States.
Clearly we have a lot to learn from these guys. But I think they also need to engage in learning about how you come to the US. I think I would say we should encourage them to be a little bit more progressive in getting into our country because we believe it's good for them. I guess the other thing I'd just say as a footnote to that, Steve, is it's very hard to do that. It's very culturally hard. It's very hard in terms of how you fund it, how you do it. The barriers to entry are great.
SS: It's an interesting point. Nice talking to you again, Bill. I'll talk to you soon.
BO: It was. Bye.
Founder, Light Reading
Steve Saunders is the Founder of Light Reading.
He was previously the Managing Director of UBM DeusM, an integrated marketing services division of UBM, which has successfully launched 45 online communities in less than three years.
DeusM communities are based on Saunders' vision for a structured system of community publishing, one which creates unprecedented engagement among highly qualified business users. Based on the success of the first dozen UBM DeusM communities, the UBM Tech division in 2013 made the decision to move its online business to the UBM DeusM community platform – including 20 year old flagship brands such as Information Week and EE Times.
Saunders' next mission for UBM is the development of UBM's Integrated Community Business Model (ICBM), a publishing system designed to take advantage of, and build upon, UBM's competitive strengths as a leading provider of live events around the globe. The model is designed to extend the ability of UBM's events to generate revenue 365 days of the year by contextually integrating content from community and event sites, and directories, to drive bigger audiences to all three platforms, and thereby create additional value for customers. In turn, these amplified audiences will allow business leaders to grow both revenues and profits through higher directory fees and online sponsorship. The ICBM concept is currently being discussed with a broad group of business leaders across UBM, and is earmarked to be piloted in the second half of 2013 and early 2014.
UBM DeusM is Saunders' fifth successful start-up. In 2008, he founded Internet Evolution (www.internetevolution.com), a ground-breaking, award-winning, global online community dedicated to investigating the future of the Internet, now in its fifth year.
Prior to Internet Evolution, Saunders was the founder and CEO of Light Reading (www.lightreading.com), Heavy Reading (www.heavyreading.com
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