Telcordia: Let’s Split

I had a bit of a giggle last week when I discovered that about half of the respondents to our August Research Poll have picked Burger King as the most likely acquirer of Telcordia Technologies Inc. (see Telcordia With Fries?). I half suspect that people might have seized on the opportunity to poke fun at Telcordia because it’s got a bit of an image problem. It’s widely seen as old-school and arrogant. Not to mention high cholesterol.

Having said that, another result of the August Poll gave me quite a surprise. Nearly three quarters of 70 respondents who have taken the poll to date don’t think Telcordia should be broken up and sold in parts.

Are they daft? I think there’s a strong case for Telcordia to be split into two companies, and, weather permitting, I’m going to explain why in this column.

Let’s start by going back to basics. Telcordia was originally founded as Bellcore in 1984 by the RBOCs, as a joint research division, following the breakup of the Bell Telephone monopoly. It was purchased by Science Applications International Corp. (SAIC) in 1997 and changed its name to Telcordia in 1999.

Nowadays, Telcordia effectively runs two businesses. On the one hand, it develops its own operation support system (OSS) software and has plans to expand this, via acquisitions such as the one a couple of months ago, when it acquired Granite Systems (see Telcordia Shells Out at Last, Telcordia Nearly Blew Granite Deal, and Telcordia: Buy Buy or Bye Bye). On the other hand, it’s the guardian of various service provider standards, including Osmine, the program aimed at ensuring that all RBOC equipment falls under a common network management umbrella.

Before going any further with this column, I ought to point out that Telcordia and Light Reading have had somewhat strained relations on occasions. Like Lucent Technologies Inc. (NYSE: LU), Telcordia still expects journalists to write whatever it tells them to write. When Light Reading hasn’t done this, Telcordia has withdrawn press access – not that it’s stopped us continuing to publish the straight poop about the company.

The biggest strain on relations between Light Reading and Telcordia has been over its Osmine program, which we’ve dared to call a de facto monopoly (see Telcordia's Osmine Gold Mine). In many cases, vendors have to pass Osmine compliance tests conducted by Telcordia in order to sell their hardware and software to RBOCs, which means two things...

First, Telcordia can pretty much charge what it likes for conducting these tests – and, by most acounts, it does. We’ve been conducting a poll entitled Osmine on Trial on Boardwatch over the past year. It’s been taken by nearly 200 people so far, and 58 percent of them consider Telcordia’s charges “a complete ripoff,” while 63 percent think the whole Osmine process should be subjected to an antitrust investigation.

The poll also suggests that RBOCs end up paying higher prices for equipment and can’t take advantage of the latest advances in telecom technology, because they’re usually not covered by Osmine. Some RBOCs appear to be rebelling against this (see Will RBOCs Undermine Osmine?). The second upshot of Telcordia’s management of the Osmine process is that Telcordia gets a detailed look at the network management aspects of new products targeting RBOCs, which gives it an unfair advantage over its competitors in the OSS market.

What is truly amazing is that Telcordia hasn’t managed to capitalize on its Osmine advantage, particularly as the RBOCs have become the focal point of most vendors’ sales efforts in recent years. Its revenues have been declining, even during the telecom recovery, which is probably why SAIC appears to have decided to put the whole shebang up for sale.

I guess the argument for selling the whole thing as one entity is that a Telcordia under new management might do a better job of exploiting its Osmine advantage. But in the wider scheme of things, is it a good idea to hand anybody a monopoly on a plate? Don’t we already know that monopolies in the telecom industry breed complacency, arrogance, and inefficiency?

My solution is to split Telcordia into two: Tel and Cordia – one handling standards and testing, the other taking on the OSS business.

In a perfect world, a way ought to be found to turn Tel into an industry forum, one that could be run for the benefit of not just RBOCs but all service providers. It would keep Osmine abreast of new developments, speed up compliance testing and charge reasonable rates for it. I guess the TeleManagement Forum could take on the role. It got fairly decent ratings in yet another poll we conducted recently (see Industry Forums: Useful or Useless?). Alternatively, could the RBOCs club together and buy back a part of what they originally sold to SAIC?

Cordia could be bought by... well, perhaps not Burger King. We’ve named a range of other options in our August Research Poll, and right now IBM Corp. (NYSE: IBM) is the (distant) second favorite. To share your views on potential acquirers and to say where you stand on splitting up Telcordia, please click on this link.

— Peter Heywood, Founding Editor, Light Reading

paolo.franzoi 12/5/2012 | 1:22:42 AM
re: Telcordia: Let’s Split
I have to say this article shows how clear it is that LR is out of step.

Have you guys at all noticed that for many new programs that the RBOCs are developing their own OSS systems?

This actually creates a bigger problem on the vendor community. Because in the old days, you could pay Telcordia their pound of flesh and OSMINE your products. In today's world, you must convince the carrier to apply the carrier's resources to do the work. If they don't apply the resources, you can't get a hunting license. And since each one of them is doing their own thing, you have to convince each one separately that they should code your product.

Now if you are say Alcatel selling DSLAMs this is great. If you are somebody else trying to sell DSLAMs this makes it hard.

The startup whiners who you represent will be awful sad when they realize how much harder its going to be to get their products "RBOC ready".

Peter Heywood 12/5/2012 | 1:22:38 AM
re: Telcordia: Let’s Split Brookseven, I think you need to distinguish between the Osmine concept and the way the program has been run by Telcordia.

The concept is great, obviously. Standards are a vital requirement in this area, for the reasons you give.

As you also say, some RBOCs have turned their backs on Osmine for some projects (something we've written about and I mentioned in the column, by the way).

The RBOCs wouldn't have done this without very good reason -- and the reason is that Telcordia has failed to keep Osmine abreast of the latest developments, and has charged extortionate rates for what it does.
paolo.franzoi 12/5/2012 | 1:22:36 AM
re: Telcordia: Let’s Split

In the end, it doesn't matter does it. Its irrelevant to break up Telcordia after its no longer "the way" to get into OSS systems.

Glad you think you can run it better. Buy it from them. I pay my pound of flesh to them, but am not claiming that I would not have had the innovator's dilemma that they faced.

Peter Heywood 12/5/2012 | 1:22:34 AM
re: Telcordia: Let’s Split Seven - I don't think Osmine has got to the point of being irrelevant to RBOCs, has it? I thought it was just a case of RBOCs using alternatives in some instances. Maybe we are behind the times!

On who should run it - I suggested that it should be run by a forum or by the RBOCs themselves.

Isn't there a lesson to learn from the success of the IETF in controlling Internet standards?

This issue of who should run monopolies is going to crop up again, with the US ENUM directory, isn't it?
opticalwatcher 12/5/2012 | 1:22:29 AM
re: Telcordia: Let’s Split What is the relationship of OSMINE with TIRKS? Is the OSMINE process the method of ensuring compatibility with the TIRKS software? Or is it more complicated than that?

Wasn't Granite being used as a TIRKS replacement at SBC, Verizon, and others? Telcordia probably bought Granite as a self-preservation move. Maybe they can come up with a cheaper process than OSMINE, that only ensures interoperability with Granite. Their motivation would be that this would ensure sales of Granite to other RBOCs.

At my low (grunt) level of interaction with Telcordia, I've been annoyed that their specs cost so much, eg $200 for a 10 page document (on a CD) and you are not allowed to put the document on more than one computer or on a network. In Europe many of the equivalent specs from ETSI are available for free download.
paolo.franzoi 12/5/2012 | 1:22:27 AM
re: Telcordia: Let’s Split
Yes, Peter the lesson learned from the IETF is to copy the "Cisco Bugs" so that you can be interoperable.

From the perspective of OSMINE being irrelevant, for new money being spent its based on non-OSMINE applications (some more and some less). So being in TIRKS, is nice but its not good enough to be deployed (not that spending for TIRKS was good enough anyways - I always loved the "Now with CLEI Codes" press releases. No support for NMA or TEMS but we got TIRKS!).

Best part of the US ENUM thing is of course it needs to be a global ENUM thing.....since VoIP phone numbers have no geographic distinction correct? In theory my VoIP phone can have a VoIP service provider in my favorite 3rd world country (the UK) so I would have a UK phone number right?

Peter Heywood 12/5/2012 | 1:22:27 AM
re: Telcordia: Let’s Split On the Granite deal being Telcordia's way of winning back customers, Ray Le Maistre covered it in this column:

Telecommedian 12/5/2012 | 1:22:11 AM
re: Telcordia: Let’s Split Such a rich source of amusement.

stephenpcooke 12/5/2012 | 1:22:04 AM
re: Telcordia: Let’s Split Peter,

You are completely right that something has to be done with Telcordia but your sense of exactly what? is shared by most in the industry. It is easy to take shots at someone who has suggested a solution but there may be some serious difficulties with splitting Telcordia. The RBOCs actually need the standards portion of Telcordia to function properly. That said, it really hasn't worked as envisioned for several years now. The original idea was for the Service Providers (read RBOCS/AT&T in the Bellcore days) to put together a set of guidelines that the equipment providers were to follow if they wanted to sell any equipment to those SP's. A noble effort to be sure.

However, shortly prior to the bubble, Telcordia emerged and wanted to make more money on those guidelines. Their business case was to involve as many companies as possible, charge them all a bunch of cash to 'participate' in the writing of the new standard(s) and then another fee for actually getting the final formatted CDROM. This netted them some extra cash and hatred from all in the telecom industry. A side effect of this was that the input from the SP's was diluted to the extent that several of them completely withdrew from many of the various standards committees. Most of the big SPs (RBOCs & AT&T) have their own 'additional' standards which are a superset of the current published 'standards'. These 'additional' standards are a direct result of the SP's not having the clout in the standards bodies anymore.

From the equipment provider's point of view this (multiple 'additional' standards) is a pain in the ass as customization is required for every customer and the word 'standard' has lost its usefulness.

If Telcordia was to split off the standards portion of the business, which has been losing money for years now thanks to the drastically reduced number of companies willing to 'participate' in these types of standards, the RBOCs would probably be forced to re-issue their own complete versions of each of the important existing standards. How would this help the industry as a whole? I have no idea. The Bellcore approach was better on the standards front I think.

I've spouted on the OSS side of this issue in several other posts so I'll leave that one for now.

As I said at the beginning it is easy to dump on someone who has offered an opinion. I'll set myself up by offering mine. It goes as follows:

1. Major international SP's (RBOCs included) combine their network certification labs under a single umbrella organization. This organization provides testing services to the world of equipment providers and issues reports that are acceptable to all the SP's.

2. This organization should be owned by the major carriers. There are at least two good reasons for this that I can think of off the top of my head: - They must maintain the equipment levels in these labs to mirror their own individual networks. This is not economically feasible for an independent third party. - Second, the carriers know that they will pay the price for these testing activities in equipment costs. As the health of their network operations business is based on volume equipment purchases, it is in their best interests to keep the testing costs reasonable.

3. The carriers will re-assert their original 'guideline' approach to standards. This is more the Bellcore approach with the carriers having the final say on standards content but getting input from the interested equipment provider community.

4. The standards are issued with an accompanying test plan. If anyone has ever seen a Telcordia test report all it says is 'Pass' or 'Fail' with no description as to how the test was done, what configuration was used, etc. The carriers accepted these reports because they were issued by Telcordia who 'wrote' the standards so they should know how the testing should be done. Of course regular updates should be made available to all who wish to remain up-to-date.

These and several other items have to be dealt with but they are a start and would re-establish the usefulness of the word 'standard'.


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