2002 Top Ten: What Ifs
This is our excuse for publishing a collection of thought-provoking ideas, ranging from fundamental research into physical phenomena, to interesting opinions and observations, to unsubstantiated rumors:
10: What If Carriers Refused to Buy From Startups?
This isn't really a "what if?" – it's actually happening. The result is that startups are going to have to sell to OEMs rather than carriers. Overall, it's bad news not just for startups but for carriers as well, because the pace of innovation is likely to slow significantly (see Are Startups Necessary?).
9: What If France Telecom Went Bust?
Trick question. France Telecom SA (NYSE: FTE) probably would have gone bust already if it wasn't for the fact that it is majority-owned by the French government, which can't afford to pull the plug for fear of upsetting French voters (see France Telecom: Not Out of the Woods, Has Catastrophe Hit the European Telecom Market? and Debt Weighs on Euro Carriers).
The real question here is whether France Telecom will be able to reduce its stupendous debt without weakening subsidiaries such as Equant (NYSE: ENT; Paris: EQU), Orange SA (London/Paris: OGE), and Wanadoo SA. It might be forced to jack up its prices while cutting back on spending – making it tough for the incumbent to compete, even in its own markets.
Some might say it serves 'em right. It's time the French were taught a lesson over their propensity for acquiring foreign industrial assets at the French taxpayer's expense.
8: What If Wireless Chips Were Embedded in the Human Body?
Folk are developing chips that could be embedded in anything from automobiles to children to enable their whereabouts to be tracked – courtesy of developments in location technologies. One startup in this field is Wheels of Zeus, founded by Steve Wozniak, of Apple Computer Inc. (Nasdaq: AAPL) fame (see WoZ Watch and WoZ Watch II). Check out this story about Applied Digital Solutions, Inc. for another development in this field.
For stranger stuff, see Rinse, Spit, and Call – a story about two British engineers who have shrunk a radio receiver and vibrator into a microchip that can be implanted in a tooth, in theory (it's unclear where the battery goes). Incoming calls are transmitted to the inner ear via bone resonance, and are thus inaudible to anyone else. Lovely!
And for something completely different, try this essay from Kevin Warwick – Professor of Cybernetics at the University of Reading in the U.K. and self-described "world's first Cyborg" – in which he advocates linking people's brains directly to computers to enhance their intelligence.
7: What If the Optical Switch Market Doesn't Revive?
How long can Tellium Inc. (Nasdaq: TELM) hang on?
Will Corvis Corp. (Nasdaq: CORV) crumble?
Will Ciena Corp. (Nasdaq: CIEN) survive?
6: What If Shareholders Blew the Whistle on Excessive Executive Pay?
Once in a blue moon, a shareholder does complain (see, for example, Shareholders Blast Nortel ) – but there aren't enough of them doing it often enough to make a difference.
Apathy reigns... or is it that big shareholders and corporate big cheeses are all just part of the same corrupt club?
For more on executive excess, check out 2002 Top Ten: Fat Cats.
5: What If the Entertainment Industry Stopped Fighting the Internet?
In the long run, the entertainment industry won't be able to stop music and films being distributed over the Internet, rather than via CDs and so on. It may have won early battles with MP3.com and Napster, but it can't hold back the rising tide of peer-to-peer file sharing via such outfits as KaZaA.
The sooner the entertainment industry recognizes this and comes up with business models that exploit the Internet, abandoning this Sisyphean feud, the better.
This could also be one of the keys to really widespread deployment of broadband. There aren't sufficient home workers to encourage carriers to deploy DSL everywhere, but there are certainly enough couch potatoes!
4: What If There Were a Big Breakthrough in Telecom Technology?
Scientists say there's nothing on the optical networking horizon to match the last big breakthrough – the invention of Erbium Doped-Fiber Amplifiers (EDFAs), which really triggered the arrival of Wavelength Division Multiplexing (WDM) and pretty much everything else in the past decade.
Some folk, however, are still working on some fascinating developments, including these projects reported by Light Reading in 2002:
3: What If Intel and Cisco Did a Deal on 802.11?
Sooner or later, Intel Corp. (Nasdaq: INTC) is likely to pull out of the market for IEEE 802.11 wireless LAN cards and focus on making the 802.11 chips.
One theory is that it could do a deal with Cisco Systems Inc. (Nasdaq: CSCO), by which Cisco would acquire Intel's card business in return for committing to Intel as its sole supplier of 802.11 chips.
Analysts are skeptical, but that doesn't mean it won't happen – see 2002 Top Ten: Forecasting Follies.
2: What If Telecom Monopolies Were Restored?
Well, partially restored. Specifically, what if "passive" telecom infrastructure – such as ducts, fiber, and copper – were state-owned, while everything else was opened to competition?
Proponents of this model argue that telecom infrastructure is equivalent to highway infrastructure: The whole economy depends on it being widely available and state-of-the-art, yet the scale of such projects, and the long pay-back periods, often make it an unattractive proposition for sources of private finance.
This scheme also has the advantage of side-stepping the whole issue of unbundling of access networks, which has turned out to be a regulatory Gordian knot (see UNE-P Debate Rages On and ILECs, CLECs Face Off Over UNE-P). Where passive telecom infrastructure is owned by the state – in Stockholm, for example – the level playing field provided has encouraged competition among private telecom operators (see PacketFront: Too Good to be True?).
The big question is whether this will recreate all the problems of state telecom monopolies – eliminating the incentive to develop new technologies, improve service, drive down costs, and so on. [Of course, we must also consider the possibility that this is part of a wicked communiss conspiracy, which could even be designed to sap and impurify our precious bodily fluids.]
1: What If Cisco Acquired Nortel?
Sound far-fetched? Think again. For one thing, Cisco Systems Inc. (Nasdaq: CSCO) has made clear its intent to compete for service provider dollars (see Cisco and SBC: What's the Big Deal? and Cisco Shouts Out for Voice). With this aim in mind, it could only benefit by acquiring a down-on-its-luck company with a solid telecom portfolio but little in the way of high-end routing technology.
Both Nortel Networks Corp. and Lucent Technologies Inc. (NYSE: LU) fit the bill – so why Nortel and not Lucent?
At least one source, Infonetics Research Inc., says Nortel’s got an edge in the market for intelligent optical hardware (see Infonetics: Metro Grows, Long-Haul Slows). It’s also got a slightly more compelling long-term wireless proposition, as evidenced by its recent quarterly report, which actually brightened as a result of wireless contract wins, including some in the vital Indonesian "CDMA belt" (see Samsung Inks Indonesian 1x Deal and Nortel’s Quarter Perking Up?).
If Nortel were indeed bought by Cisco, it could spell doom for Lucent... unless Lucent could revive that bid from Alcatel SA (NYSE: ALA; Paris: CGEP:PA) (see Alcatel, Lucent Throw in the Towel). But that’s another story!
— The Staff, Light Reading and Unstrung