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2003 Top Ten: Services Stories

Light Reading
News Analysis
Light Reading
12/23/2003

OK. Who's sick of VOIP already?

Probably quite a few people, seeing as how packetized voice has had nearly as much media coverage recently as Saddam's hole, pardon the expression.

But while VOIP has dominated services news in the past few months, it's not the only service that has commanded attention during the past year. Oh no. So to remind you that the SIP vs MGCP debate isn't the only thing taxing the minds of the communications gurus, here's a rundown of this year's top service stories.

No. 10 BT Gets Aggressive With VOIP December 11

We didn't say there wouldn't be any VOIP stories at all in this list...

BT Group plc (NYSE: BTY; London: BTA) stepped up to the consumer VOIP wicket with typical British irony: Its offer is aimed at the very U.K. consumers who actively chose not to spend their money with BT -- the cable companies' customers.

The move is significant, in that it sends a signal that Europe's major operators are taking VOIP seriously. It also means they have confidence that the technology works, at least to some extent.

All the same, the timing of BT's announcement is suspicious, coming, as it did, just a few months before the arrival in the U.K. of VOIP's chief U.S. champion, Vonage Holdings Corp., due to invade Europe early in 2004 (see Vonage Raises $35M).

And BT itself says its VOIP quality of service might disappoint. In other words, it might frustrate those who sign up for it, and make them swear on oath never to use a BT service again. Ever.

For other stories about POTS carriers talking up consumer VOIP, see: AT&T to Launch Residential VOIP , RBOC VOIP Coming in 2004, and Time Warner Delivers Phone Service.

No. 9 Electrical Access: Dream On? June 25

Here's one to file under "It'll never take off, unless…"

The idea that the power grid might be an alternative access infrastructure to copper and cable for broadband service providers might sound strictly from left field, but as one analyst notes, "It's a very promising idea." It's actually been around for a long time but appears to be gathering momentum (see ETSI Hosts Powerline Event).

This is one to read, remember, and recall, when your electricity company drops off a router that has a standard power socket plug sticking out of its rear.

What next? Can an entire central heating system be turned into one big wireless access point?

No. 8 MCI's 'Creative Routing' July 28

We couldn't have a services Top 10 without mentioning at least one carrier wearing an "I'm proud to be in Chapter 11" t-shirt, so here's a cracker about the company formerly known to the world's nervous accountants as WorldCom Inc.

This story is worth noting simply for a quote from an MCI (Nasdaq: WCOEQ, MCWEQ) engineer: "MCI has turned ‘least-cost routing’ into an art form… With their volumes of traffic, hundreds of its switches would have to be programmed for this kind of routing… You would need the chief engineering officer involved."

Now MCI is due to emerge from bankruptcy before the end of February 2004, so there's some fun to be had before the Easter Bunny nibbles at your slippers, or even your slippery eels (see MCI Europe's Slippery Strategy). Once it is out of financial bondage, it will begin a branding exercise aimed at disassociating itself from dodgy financials and crass mismanagement, something that fellow telecom doghouse resident Global Crossing Holdings Ltd. is already trying to do (see Euro GlobalX Boss: No Price War).

No. 7 P2P Plagues Service Providers April 24

This was the year when peer to peer (P2P) became more than a yacht race course direction, as millions of megafiles snaked their way across the Internet, thanks to the likes of Kazaa, and clogged up the arteries of the ISPs.

But where there's a network ailment, there's also a gaggle of startups [ed. note: Gaggle? Surely a swarm, a horde... a throng perhaps?] ready to offer a cure at a price. Say hello to CacheLogic Ltd., Ellacoya Networks Inc., P-Cube Inc., and Sandvine Inc., among others. These companies say they can help operators deal with the file-sharing nightmare, and more besides.

However, none of them claim (yet) that they can cure baldness or poor dress sense, two other chronic and seemingly intractable illnesses in the carrier sector.

No. 6 VPN Player Collects Cash December 8

This story is worth noting because it highlights a services acorn that could potentially become a towering oak (isn't nature wonderful?). The service in question is an IP VPN with QOS across multiple carrier networks, something that's incredibly tough to do at present, if at all.

Yet here we have a startup in the form of Nexagent that says its technology can make such a service a quick and simple reality for large multinationals. In addition, Nexagent's founder, the ever-youthful Charlie Muirhead, says everyone, including the current international VPN service providers, is invited along to the party.

(To find out how Nexagent proposes to help integrators and carriers deliver such a service, read Nexagent Promises VPN Nirvana).

There are a couple of key things that might stop this nut from developing further. First off, Nexagent's technology might not work. Secondly, a concerted effort by some of the industry's larger players might leave Nexagent's acorn with too little room to grow, and the startup may never become any more than a promising bud.

Reports that teenage (well, 28 actually) telecom sensation Muirhead has green fingers have not been confirmed.

For more on the development of VPNs, see: VPN Customers Spoilt by Choices, Verizon Expands MPLS Plans, VPNs à la Carte, and Demand Grows for MPLS VPNs.

No. 5 Sprint Doubles Down on MPLS October 14

Here's something you don't see every day -- a carrier changing its mind and then denying it has done a U-turn. (You might see it happen a lot, but not every day.)

The carrier in question was Sprint Corp. (NYSE: FON), and the change of heart/consistent strategy (delete as appropriate) concerned the provision of MPLS-based IP VPNs, a service previously spurned by the carrier.

The story was also noteworthy for the money-back guarantees incorporated into its service-level agreement.

By the way, Sprint's new CEO Gary Forsee had an unusual introduction to his new company's financial conference calls, when technical difficulties cut him off while he prepared to unveil some lackluster results (see Sprint CEO: Can You Hear Me Now?).

No. 4 Net Up, Phones Busy in Blackout August 15

Remember when the lights went out in New York and surrounding states this summer, and the U.S. and Canada had a "handbags at 10 paces" squabble about whose fault it was?

Well, the Internet trumped the circuit-switched telephone network for reliability, according to this story. And that got the message boards buzzing about just what the Internet really is. Check it out.

No. 3 FastWeb Piles On the Users October 8

In theory, the convergence of voice and data networks has been around for some years now, but here's a European service provider that has put it into practice from Day One, and which had increased its customer base by more than 100 percent in a year to nearly 300,000.

The operator, using fiber-to-the-home and DSL over unbundled copper, is Italy's FastWeb SpA, which is providing incumbent operator Telecom Italia SpA (NYSE: TI) with some stimulating competition in some of Italy's biggest cities. FastWeb's combination of voice, data, and entertainment services (including more than 100 TV channels) across the same connection has helped to spur Telecom Italia, already quite progressive among European PTTs in terms of its use of IP infrastructure, to match the startup's services.

Of course, the real test is whether FastWeb can turn its achievements in the field into a profitable business, and it looks as if we'll find out whether FastWeb can turn a euro or two, or not, in 2004.

The coming year should also prove telling for fellow European services startup Bredbandsbolaget AB (B2), which is setting the pace for alternative operations in Scandinavia (see B2 Readies VOIP Over DSL). [Ed. note: We predict that in 2004 carrier customers will all be asking the question, "Is it bigger than a Bredbandsbolaget?" Really.]

No. 2 FCC's Powell: Let VOIP Be December 1

While not being quite as exciting as we'd hoped (the bellheads didn't ambush the netheads with baseball bats outside the rest rooms, as far as we know), the Federal Communications Commission (FCC)'s initial meeting to chew over whether VOIP should be regulated or not was a pivotal moment in this year's services calendar.

It was worth going along just to see FCC chairman Michael "I'm not resigning, OK?!" Powell decide he'd had enough for one year and was more interested in recalling his previous night's viewing of the Discovery Channel: "Does VOIP look like a duck and quack like a duck because you chose to create it that way -- or can it be made to look like a fish?"

Proof, as if it were needed, that at least one of the key telecom decision-makers in the U.S. thinks that VOIP is a Latin American lizard related to the chameleon. ["Beryl, I think I just spotted a VOIP in the rockery!!"]

The meeting took place just as the telecom world was starting to get sick of being reminded that VOIP is "pronounced voyp, to rhyme with... well, whatever..."; and the word "overkill" sprang to mind far too often. Not that we weren't in the thick of the coverage, of course! Here are some choice VOIP stories that we haven't already mentioned: Europe's VOIP Scene Is Hot, Carriers Say VOIP & SIP Are Hot, SIP Is Hip, Say VOIP Promoters, Global Crossing Vets VOIP.

No. 1 Skype Spooks Operators October 31

Any story that includes the words "sucker" and "bender" in the first sentence, and then doesn't elicit any legal proceedings, deserves to be in the No. 1 spot.

More importantly, this was the year's most radical service, and one that will likely have ramifications throughout at least 2004 and 2005. We're talking about VOIP again, but this one's a bit different, as it comes from Skype, the Internet phone service set up by Kazaa founder KaZaA Founder, Niklas Zennstrom.

Check out this story for carrier reaction to the service that could be a prickly thorn in their side, and for the sheer gumption of Zennstrom, who brazenly predicts the slow death of POTS. “I see a clear parallel to the shift from fax to email,” he says, predicting the replacement of traditional telephony by the use of his service. "Skype is the email, POTS is the fax.”

Services visionary, or marketing medicine man? You decide.

— Ray Le Maistre, International Editor, Boardwatch

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technonerd
technonerd
12/5/2012 | 2:47:22 AM
re: 2003 Top Ten: Services Stories
I'm suggesting a new financial instrument to deal with fiber networks - maybe special corporate bonds, maybe accounting rules changes to properly reflect the fact that a fiber has 100 years MTTF and a SONET NE has 20.
"Special corporate bonds." Hmm, what does that mean? New accounting rules to reflect a 100-year life for fiber? Hmm, that would mean lower depreciation allowances for fiber installations. Oh boy, that would be an incentive to build fiber ... NOT!

pro zack, might I suggest sticking to whatever it is you do rather than trying to become a financial expert?!
dljvjbsl
dljvjbsl
12/5/2012 | 2:47:17 AM
re: 2003 Top Ten: Services Stories

Correction about Blackberry: O.K., it's a two-way alphanumeric pager. But it still has nothing to do with VoIP.


I feel that there is much more agreement here that may be on the surface apparent. The Blackberry is a two-way network communication device for text and voice. It is also very successful which is odd for this industry now a days.

The reason that I think the Blackberry is successful is that it provides a model of applications that is useful to users. In the bubble, we all heard how network technology was creating a new economy and would allow people to do things better. We all saw how this Wired level of analysis fared. However some devices like Blackberry have succeeded. The reason as I see it is that the Blackberry assumed that people would use the network not for new things but to collaborate with their friends and colleagues. People wanted to do what they had always done and to have this enhanced by what technology could provide.

POTS was successful because it understood this as well. It is now fading away because new technology can support people in their traditional needs better than POTS can. The Blackberry and its like have even given the language a new word 'texting.' The new word was needed because of the major importance of this new application. SMS and similar services are amazingly successful. They are successful because they support what POTS supported and do it in new and better ways. Network providers are changing the services they offer customers because people find the new services useful and will pay for them. The economics of applications are changing and the telcos must change with this or fade way.

If you ask for examples of revolutionary new services, I will not provide them. We have all seen examples of revolutionary new ways of doing business in the last few years. They are now all but forgotten. Except, that is, for the few that realized what human interaction is all about. SMS is one of them. The collaborative filtering that Amazon uses for recommendations and community creation is another.

I agree with you about the importance of ubiquitous air interfaces. They change the way people can get access to services. Wireless NIDs and similar technology can allow services that support human interaction in entirely new ways. With the network event models enabled by SIP and the types of applications that they can enable, They will allow traditional human interaction to proceed in new and better ways and supplant POTS because of that.

One example of this is Project Oxygen at MIT. I do not agree with everything in it, however this type of environment is going to come along a lot faster than many people expect.
technonerd
technonerd
12/5/2012 | 2:47:15 AM
re: 2003 Top Ten: Services Stories
I feel that there is much more agreement here that may be on the surface apparent.
Agreement is overrated, but respect and civility are underrated, which is why I apologized a little while back.


The Blackberry is a two-way network communication device for text and voice. It is also very successful which is odd for this industry now a days.
Blackberry has been a minor success. I used to have one, by the way, but stopped using it because I found it annoying. Now whenever I see people using them I chuckle to myself.


POTS was successful because it understood this as well. It is now fading away because new technology can support people in their traditional needs better than POTS can.
I don't think POTS is fading away. VoIP is a blip. When people want to talk on the phone, they use POTS.


SMS and similar services are amazingly successful. They are successful because they support what POTS supported and do it in new and better ways.
"Amazingly successful?" Nah, I don't think so. SMS is a nothingburger compared to the CLASS features of POTS. I'd be willing to bet that Verizon makes more money off of CLASS in a month than SMS has generated in its entire existince. Not that Verizon would ever release those numbers.


Network providers are changing the services they offer customers because people find the new services useful and will pay for them.
There really aren't very many new services out there at all. Email and Internet access have been huge, just like fax lines and CLASS services. Everything else I can think of pales by comparison. I don't think there's been a major new service category since before the bubble began.


The economics of applications are changing and the telcos must change with this or fade way.
There's some truth in this. POTS is getting more profitable all the time, which explains why the RBOCs have fought to hard to protect their access monopolies.


If you ask for examples of revolutionary new services, I will not provide them.
Why not?! Sorry for the sarcasm to come, but: Cat got your tongue?


We have all seen examples of revolutionary new ways of doing business in the last few years. They are now all but forgotten. Except, that is, for the few that realized what human interaction is all about. SMS is one of them. The collaborative filtering that Amazon uses for recommendations and community creation is another.
Neither of those things is "revolutionary," and Amazon's filter isn't a telecommunications service in any way, shape or form. The fact that you must use a telecom service to get to Amazon's store doesn't make Amazon's website or its features a telecom service any more than a physical mall is a highway service because you have to drive on a freeway to get to one.


Wireless NIDs and similar technology can allow services that support human interaction in entirely new ways.
All a wireless NID does is (potentially) let a customer combine wireless and wireline voice access and save some bucks doing so. It's about as "revolutionary" as a six-pack of beer. That hyper-inflated rhetoric really gets in the way of rational analysis.


With the network event models enabled by SIP and the types of applications that they can enable
But which shall remain unspecified ...


One example of this is Project Oxygen at MIT. I do not agree with everything in it, however this type of environment is going to come along a lot faster than many people expect.
I looked it up. They have the wrong name for that one. It should be called "Project Orwell," as in George Orwell's 1984. The Oxygen web site says our privacy will be respected. Yes, and I'm from the government and I am here to help.
dljvjbsl
dljvjbsl
12/5/2012 | 2:47:14 AM
re: 2003 Top Ten: Services Stories
One example of this is Project Oxygen at MIT. I do not agree with everything in it, however this type of environment is going to come along a lot faster than many people expect.

I looked it up. They have the wrong name for that one. It should be called "Project Orwell," as in George Orwell's 1984. The Oxygen web site says our privacy will be respected. Yes, and I'm from the government and I am here to help.

You asked for some new services and I pointed out G«ˇtextingG«÷ and others and gave Project Oxygen as another example. You seem to have a low opinion of their prospects but you cannot now not agree that there are services that are being provided and being researched. Indeed with SMS in Europe and IM in the US and the Far East, texting is now a large and growing industry.

You say that these applications are not POTS. I do not agree with this. POTS is used for specific purposes in human collaboration. POTS features are designed to provide specific services in human interactions. These services are now being subsumed by these new services and as a result POTS is fading away.

Project Oxygen is an attempt to research such services. It is an example but to me, it is imperfect. I feel that Project Oxygen has missed the point about what network services will be found useful. The issue of privacy that you bring up is there. However the social scientists who study find that the vast majority of people do not care. They are of the opinion that a) no one cares enough about them to collect information and that b) if information is collected their is little of nothing the information collectors can do to hurt them. There are whole industries of privacy companies and researchers who do not like these results but they have found that people are not going to pay for privacy products or care very much about Internet privacy policies and regulations.

Thus the intelligent spaces that Oxygen advocates and the ubiquitous air interfaces that support them should be acceptable on this basis to users.

What I do not find convincing about Oxygen are the meeting support tools that it proposes. These seem to be of the same old prescriptive sort that we have seen for years. If one changes the way one works to conform to the services of these tools then supposedly great benefits will result. This strategy has never been successful. People know how to work efficiently and will not change to some unproven system.

What has been successful and to me is illustrated by the success of texting and devices like the Blackberry are systems that try to augment rather than prescribe user interaction. POTS is one of these and s I have said before is now being absorbed by these new applications.


technonerd
technonerd
12/5/2012 | 2:47:13 AM
re: 2003 Top Ten: Services Stories
I don't think these new services amount to a hill of beans. SMS is trivial in terms of revenue, traffic and functionality. Project Oxygen is a research project only, and none of these surveillance "services" exist yet, although with all the cameras being installed all over the place under the guise of preventing terrorism, I suppose that will change.

I really don't see how you can argue that POTS is fading away. I'm not somehow in love with it however it might appear, and I will allow as to how in technical terms POTS is a finished, "mature" network and service bundle. I'll also agree that there are applications that POTS doesn't support at all or at least not very well. But when it comes to voice -- which pays more than 100% of the telephone industry's bills even now -- POTS is going to be the dominant mode for a very, very long time.

Why? Because it's cheap and getting cheaper, and the service quality and availability is head, shoulders, kneecaps and toenails above anything else out there for voice. My objection is fairly narrow; I'm all for new services, especially if they make any sense. But I don't agree with this "POTS is fading away" stuff, and not because I'm a Bellhead in love with SONET and PCM, but because of what I perceive at the realities.

VoIP is a solution looking for a problem, and that kind of stuff rarely does very well. As for Oxygen, other than for government surveillance of the population I don't see any latent demand for ubiquitous computing based on machines reading people's gestures and facial expressions. I think one flaw among many of the people designing new and amazing services that no one winds up wanting is that they assume that people as hooked on all this stuff as they are, and that people want a single network to do everything.

Both of those assumptions are flat wrong. People are actually fairly apprehensive about information technology because they have no idea what's being collected and how it's being used, and no "privacy policy" does anything other than justify intrusions. They also have long and frustrating experience with Microsoft's products, which have taught everyone that computers are hard to use and never, ever perform as well as they are advertised.

Dump on POTS all you want. Lord knows I have at times. But there's something pretty amazing about picking up your phone, dialing 10 digits and talking to anyone anywhere for next to nothing. The people who want to replace it, and the people who want to design new services, would do well to study POTS in great detail because it is by far the most successful and robust telecommunications service ever invented. It leaves everything else way, way behind.

technonerd
technonerd
12/5/2012 | 2:47:10 AM
re: 2003 Top Ten: Services Stories
I thought this as well until I saw the result of research into this topic. Contrary to all expectations, people just do not care.
This is a function of the design of these studies. People feel helpless and powerless on this issue; much of what the studies interpret as "don't care" is actually resignation. People figure (accurately) that no one cares what they think anyway, and that they really have no alternatives.

If you want to know how people regard privacy, look at their behavior when they do perceive any control over personal information. Look at the number of unlisted telephones, for example. Look at how many people list their number but leave the address out of their listing. Look at how many people have anonymous sign-ons to web sites, and multiple e-mail accounts.

People want privacy but they're not getting it, so in many ways they've just given up. This doesn't mean they don't care.
dljvjbsl
dljvjbsl
12/5/2012 | 2:47:10 AM
re: 2003 Top Ten: Services Stories

I don't think these new services amount to a hill of beans


I tend to agree with you here. The issue that is confronting the industry is not the capability to produice new products per se. The problem is to produce products that are useful and acceptable to users. There should be far fewer discussions of technology and many more discussions on utility and usability. Fortunately for this there is a largge amount of social science research that can be tapped at will be the industry. Unfrotunately the liklihood of this happening are very low. That is, unfortunate for the industry but not for me since I am reaping some very useful results from some very useful and potetentially profitiable collaborations.


People are actually fairly apprehensive about information technology because they have no idea what's being collected and how it's being used, and no "privacy policy" does anything other than justify intrusions.


I thought this as well until I saw the result of research into this topic. Contrary to all expectations, people just do not care.

dljvjbsl
dljvjbsl
12/5/2012 | 2:47:06 AM
re: 2003 Top Ten: Services Stories
I thought this as well until I saw the result of research into this topic. Contrary to all expectations, people just do not care.

This is a function of the design of these studies. People feel helpless and powerless on this issue; much of what the studies interpret as "don't care" is actually resignation. People figure (accurately) that no one cares what they think anyway, and that they really have no alternatives.


In any event, privacy is an issue that will be important in determining whether or not much of the new technology will be accepted. If as you say privacy will drive the rejection of these applications then this will have a major effect on the performance of the companies and on employment.

Privacy, QoS and other social science issues are usually treated as purely technical issues in the trade press. As an example, privacy is usually treated as anonymity and secrecy when in fact it is much more than that. To my surprise I found that there is not much know about it or that there is even an adequate definition of it.

QoS is in the same state. The tiltle of thsi thread is that IP does not offer toll quality voice. Maybe it does or does not but the implicaion is that it must meet the quality standards of toll systems or it will not be successful. The success of the cellular system and the reported success of Internet voice providers casts this in doubt.

Social science issues - both sociological and psychological - are going to have a lot to say about the employmen prospects of the community that reads this board. I wish that there would be much more disucssion of these issues here, in IEEE magazinnes and elsewhere. All of our jobs depend on a good understanding of them.
technonerd
technonerd
12/5/2012 | 2:46:58 AM
re: 2003 Top Ten: Services Stories
QoS is in the same state. The tiltle of thsi thread is that IP does not offer toll quality voice. Maybe it does or does not but the implicaion is that it must meet the quality standards of toll systems or it will not be successful. The success of the cellular system and the reported success of Internet voice providers casts this in doubt.
Cellular is a case where consumers have traded voice quality for mobility. With VoIP, what are residential consumers going to get in return for not having the same levels of voice quality and availability?

The way VoIP is now set up, you need broadband and then you pay extra for voice capability. Plus, at least for now, you lose the ability to use your inside wiring and the phone sets connected to it. Cellular offers a quid pro quo, but VoIP offers only a quid. The one exception is for international toll bypass, but that's a small niche.
pro zack
pro zack
12/5/2012 | 2:46:44 AM
re: 2003 Top Ten: Services Stories
To me, "toll quality voice" also means 5-15 dBrnC, the white noise that tells you how far you are from the other end. Does anyone know if VOIP can add this white noise?

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