The Crystal Ball

I'm hopping off on holiday in a couple of days, and while I regenerate my vital humours in the Arcadian resplendence of Tuscany, I'm hoping you'll lend a hand in a Light Reading project aimed at regenerating some vitality and sense of purpose in the telecom industry.

This Crystal Ball project, as I have dubbed it, aims to explore the fundamental issues likely to shape the telecom industry over the long term – and it's something I can't do on my own (Nostradamus I ain't!). I need your help, and I think I've found a way of getting it.

My idea is to extend an experiment I tried with the Who Makes What: Equipment 2003 report, in which I invited readers to send in comments to help me refine and extend that article. With the Crystal Ball project, I'm taking this a stage further and asking you to put forward ideas and submit articles for possible inclusion in another report that will grow over time as the discussion widens and deepens.

This column is step number one. I'm going to get the vitreous spheroid rolling by suggesting some Big Issues. You're welcome to suggest other ideas and submit articles. I'll tell you how to do this at the end of this article.

This is not an invitation for you to snow me under with company propaganda or other drivel. I want you to enter into the spirit of this project and send me genuinely thought-provoking stuff about the long-term future of telecom, particularly if you are an industry leader. I'm going to be very picky about what I publish.

I think this is an opportune moment for such a project for a couple of reasons.

First, my sense is that the telecom industry is in a flat spin and needs some help in figuring out the way forward. It's become obvious that things can't carry on as they have in the past. The money from telephony is drying up fast. At the same time, nothing has really emerged that promises to replace telephony revenues. The industry is (a) in crisis and (b) just drifting. Nobody knows what to do, and folk are so focused on surviving the immediate future that they're not paying attention to where we're all heading (which may be off the edge of a cliff).

Second, I think it's worth reminding ourselves that the telecom industry is exciting. I still believe we are building infrastructure that will result in fundamental changes to the world economy. I'm also fed up with listening to folk being gloomy about the future of telecom. DSL deployments are roaring ahead right now. Enterprise bandwidth requirements are growing at 50 percent a year. P2P traffic is exploding. This isn't an industry in decline; it's an industry in transition – hence the need for an examination of the way forward.

Here's the sort of questions I want to try and address in this project:

1. What Is Telecom For?
  • If it's so vital to general economic health, is it safe to leave it in the hands of companies whose main interest is to maximize returns to shareholders?

2. Is Competition Always Good?
  • Should passive infrastructure – the basic ducts, fiber, copper in the ground – be state owned, as highways often are? Providing this at cost, or perhaps courtesy of taxpayers, might encourage healthier competition among providers of active infrastructure.
  • Do we need a totally new direction on telecom regulation? Should we be aiming for ubiquity, low cost, and lots of innovation, rather than maximizing competition?

3. What's Happening to the Service Provider Market?
  • Will it stratify into a few huge passive infrastructure providers, lots of active infrastructure providers, and a plethora of application providers?
  • What types of companies will emerge as the big players in each of these segments?
  • What is the long-term prognosis for incumbent carriers?

4. Where Will Future Revenues Come From?
  • Can we expect the average user to spend more on telecom – and, if so, what will he or she spend less on?
  • What's the most promising market segment?
  • Aren't telecom services inherently low-value commodities? Isn't the whole point of IP that it can shift zillions of bytes around for a few pennies?

5. Is There a Telecom Moore's Law?
  • What sort of improvement in performance and reduction in price can the typical telecom user expect by the end of the decade?
  • What will drive this change – technology, competition, something else?

6. What Technologies Will Have the Biggest Impact?
  • DSL everywhere? Wireless everywhere? Fiber everywhere?
  • Are we really going to end up with all services running over a converged packet backbone?
  • Convergence of fixed and mobile telephony?
  • All-optical networks?

7. Which Technologies Won't Survive the Decade?
  • Will Sonet/SDH succumb to Ethernet in the long run?
  • Will ATM survive, will MPLS die?
  • Will satellites crash and burn?
  • Will enterprises still be using Frame Relay?

8. What Sociological Changes Will Affect Telecom Use?
  • Changes in the way we work?
  • Security issues?
  • Congestion on roads?
  • Globalization of trade?
  • Outsourcing to the Asia/Pacific?

9. Whither Killer Applications?
  • Is the whole notion of killer apps a reflection of an old-fashioned telecom mindset?
  • Won't packet networks allow the proliferation of an endless number of applications tailored to individual requirements?
  • Is peer-to-peer networking the biggest thing to happen to the Internet since the invention of the World Wide Web?

10. Where's the Telecom Equipment Market Heading?
  • Will the incumbents end up as systems integrators, as most of the mainframe vendors did?
  • Will Chinese vendors end up top Shar-Peis?

11. Can Automation Save Carriers?
  • Are they about to go through a supply-chain and quality control revolution similar to the one the European and American car industries went through 20 years ago, when threatened by the Japanese?

12. How Will the Use of Computers Influence the Evolution of the Internet?
  • Is Grid Computing the next big thing?
  • Is P2P the next big thing?

13. Are Telecom and TV Converging?
  • Will triple-play ideas work this time around?
  • If voice and data convergence has proved difficult, what real chance is there of telecom and TV convergence?
  • What would be the impact of telecom and TV convergence?

14. Is It Time for a New Cast of Characters?
  • Are the leaders of the telecom industry too set in their ways?
  • Are there lessons to be learned from other industries that have gone through big upheavals?

I've got plenty of other ideas, but that's more than enough for now.

So, over to you. If you would like to suggest other themes, I'd prefer you to post them on the message board so that other folk can see them immediately. But if this is a problem for you, please email them to me at [email protected] with a subject line of Crystal Ball. If you want to suggest an author, submit material, or ask questions, please use the same email address and subject line. Remember: I'm going on holiday, so I won't be responding until after I return on September 8.

Ciao, ragazzi!

— Peter "Swami" Heywood, Founding Editor, Light Reading

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Peter Heywood 12/4/2012 | 11:31:41 PM
re: The Crystal Ball Andrew sent me this link to his latest paper "The many paradoxes of broadband"

Perhaps this will break the ice on this message board.

I'm just about to jump on a plane - back in 2 weeks!
Mark Seery 12/4/2012 | 11:31:40 PM
re: The Crystal Ball
-Networks are important, and those that are passionately comitted to them will see them become even more so.
-Hypergrowth is addictive. Breaking addictions is painful, regardless of the drug.
-The excesses of speculation are not the attributes of any one system/structure, but the attributes of humans.
-An innovation faces at least three major competitors: the incumbent, expectations, and diffusion of uncertainty about the innovation. We are currently dealing with the second, and the final frontier is dealing with the third.
-There is more that is important about always on than just human reaction to transaction latency, but I agree that a single-dimensional obsession with size is unncessarily constraining. It closes the mind to other compelling value propositions. Getting to new-levels of speed are **sometimes** necessary, but not always sufficient. Is the marriage of computers and communications simply about me sitting in front of a screen and watching streaming video. That's nice, in fact that is great, but there is more.

What does this mean for the future? Let's not make sweeping changes based on assumptions we have no way of verifying; based on over reaction to hypergrowth; based on flawed notions of our own omnipotence. The system is correcting, let it run its course. The system knows more than any one individual could ever dream of knowing - it is arrogance/naivety/dillusion/something? to think otherwise; especially given it is only recently (relatively speaking) that academics started modeling non-linear effects, and it is questionable whether the technology exists even today to do so.

The future is unknowable, by definition.

Mission is complex and simple all at the same time. What is the unique thing that any given entity can do, that none other can do, or do as well. What is the unique reason for the existence of this entity/company/infrastructure/person...

No industry or technology has a right to exist. It must earn its existence, continuously. While no doubt we are experiencing the pains of disruptuve technologies, it is also true, that the crystal ball should be examining the unique and compelling reason for the existence of an infrastructure, rather than just assuming that infrastructure has a right to exist.

10 years from now, we will look back and think that the next 5 years were some of the most creative and innovative. Not because of the billions invested, but because serious people, applied serious sweat, to serious problems, and had the spare bandwidth to do so.

We know some of the principles that we guide us threw this time:

-open processes
-open societies
-open systems
-open minds
-open markets
-open interfaces to our networks
-expanding & complex cross-discipline economies and workers
-more sleep ;-)
st0 12/4/2012 | 11:27:56 PM
re: The Crystal Ball "This is not an invitation for you to snow me under with company propaganda or other drivel"
hahaha, asking for "snow" in the mid of summer is no-go, I guess, based on the response of this editorial. Just try to open the water pipe a bit....
(1) Andrew's paper, as many in North America miss the point of what is killer application. the definition of the killer application is "profitable application", which is wrong to focus on. As many as his examples of train, or others, the application should be differentiate as "must have" = necessity, or "nice to have". The train is a "must have" in order to build hotel's in the south, transfer many heavy stuff, such as steel and stone across the long distance. The communication, for example, voice over IP, is a "nice to have".... it is like compare between the old days of talking to Mom for 3 min. using expensive Telco long distance at mother's day (necessary), to talk to a girl friend all night (Nice to have=like sprint found out on their unlimited call program). Price sensitivity for "must have" item is less than the price sensitivity of the "nice to have" item.
(2) being said that in (1), the broadband will become a "must have" item because video and movie on demand or other things related to image. Most of the articles regarding the policies and broadbands were wrote by geeks. Geeks do have different mentality than most of other people. Geeks communication via data and short hand messages. Real people communication via as "real" as possible image. That is why movie, TV, game, etc. anything close to the reality would be a big hit. Imaging would be a big hit, being NMR, X-ray, Ultra-sound (of fuzzy image of a hardly make out "my dear un-born kid")or 3-D movie, more "real" the better. Broadband would be good for that (3G phone plus camera or video would drive the demand all the way up).
(3) The price of broadband is not need to be high. the indecision of the corp due to the FCC flip flop cost more money. Chinese broadband is 80.00 Chinese yen per month ($10.00 USD per month) and it is gaining more acceptance than US (the salary of ave. engineer is 4,000 yen per month. The 80.00 is not a small number for the family, but it is consider as necessary). The main application is video phone (as point out in (2)). Korean is deploy the FTTH as well as Japan while we still argue about what we suppose to do about broadband.... (time is money is almost not apply here for corp and FCC...).
(4) Japanese is coming out of depression very well, with most of high tech jobs still in the country, Key design, equipment, R&D all witinin the control of the Japanese. while the North American outsourced almost everything, except military. The key difference is lack of long term focus at corp. level as well as Gov. Just look at long term roadmap of corp, you can find out Japanese corp roadmap of 15 years easily, but not many north american corp got a 10-20 year roadmap (beyond CEO's tenure). Gov. is stress job creation from small business, hello! the north american strength is in the gigantic industrial engine and massive wealth, so some corp R&D can focus on next biggest thing. If you split to many small engines pulling to different directions, or herd mentality of doing sector rotation, such as VC did, you lost the advantage that use to make US powerful.
(5) One major difference between the Japanese and north America is technical leadership in Japan is lead by Techies, not the marketing gurus and MBAs as it is in US. that is why you got fuel cell cars in US and hybrid car invention in Japan. The one you can put into display window, the other, you can sell it to many people....Similar for telecom, shall we start to talk about PON and MPLS?
thanks for VZ's move.... hope we can catch up on broadband before it is too late (may be wait for singapore buy the globe-crossing and deploy the broadband?)

no "snow" here...

whyiswhy 12/4/2012 | 11:27:53 PM
re: The Crystal Ball Mobility seemed to trump broadband.

And narrowband mobility at that.

With their bread-and-butter business declining rapidly, the ILECs would then have to utilize
the competitive advantage of wired links by promoting broadband connectivity.

Duh, SBC (for one) been there doing that. Though to make the announcement they were so doing would kill the cash cow prematurely.

So there's another irony: shut up about new services, because they really are cheaper.

This migration could be speeded up by forcing the ILECs to spin off their wireless subsidiaries, to prevent cross-subsidization and encourage competition. The cellular operations are operated almost as separate businesses, so there would be little of the problem of unclear boundaries that bedevil other proposals, such as that of separating the ILECs into basic connectivity and service providers.

Wrong! Forcing the ILECs to stop cross fertilization would KILL off the very industry that is needed to build this stuff. We would have a thousand wannabees in charge of our nations communication needs. Chaos would rule supreme.

Making more spectrum available for cellular would also promote the move of voice telephony to radio channels.

What is needed is what has worked well for the cellphone: more spectrum and license lotteries, with control of the percentage of the spectrum owned by any one competitor.
whyiswhy 12/4/2012 | 11:27:49 PM
re: The Crystal Ball Blame Japan: No broadband-enabled toys available.

Rant: We need cameras (still and video) with 802.11x wireless connection to whatever (not just our own computer) to get this kicked off.

I would pay an exta $100 (on top of say $400) for the convenience of taking videos of the kids at Disneyland and downloading it over the Internet to my home computer in the background. Give the thing some smarts to know when to buffer the image and when to download to a so-called hotspot so I do not have to be a geek to use the thing.

But no, instead we get a bunch of wires and CDs and a mess of digital tape cartridges or SD memory cards, etc. Geek-ville!

Another rant: A few years ago Sony (under Morita) would have been all over this...but with zero competition in consumer electronics from the USofA, they are sitting on their proverbial asses...

st0 12/4/2012 | 11:27:48 PM
re: The Crystal Ball http://bombayelectronics.com/C...

get your money ready...-st
optical_man 12/4/2012 | 11:27:48 PM
re: The Crystal Ball "...taking videos of the kids at Disneyland and downloading it over the Internet to my home computer in the background. Give the thing some smarts to know when to buffer the image and when to download to a so-called hotspot so I do not have to be a geek to use the thing."

brilliant thought. I'd buy it. Some real world realities encroach however. (big picture, CEO type "should we fund this, will we make our money back" issues)
The minute that Joe SixPack learns how to open his home PC to the ability to access it from the mall, or his friends house, or Disneyland, the kids in Sweden, Singapore, Siam, Seattle, Slovakia will find the open port and steal his "Passwords.doc" file and drain his 401K and Bank Account.
Look at 802.11 networks. No one bothers to secure them. My best friend has dsl and a wireless card I gave him. He was sitting w/ the laptop in the living room, w/ the wireless nic in it (from being out at Starbucks). He was doing his quarterly taxes. Somehow he hit Internet Explorer (to find something on his pc, or some other odd reason). The Internet came up. He was shocked. The local auto dealership (w/ a clear line of sight to his palatial 1 bedroom mini-condo) has never turned on security to their wireless network!

The point is; we as a society aren't ready to handle home security. Software firewalls (Microsoft, Network Associates, Norton) can be breached by an 11 year old. Hardware firewalls are $200-400, and no household is going to buy something that 'silly' until they lose ALOT of personal info or cash. Especially when MS says "press yes to activate the Internet Firewall" and Joe believes that he is safe.
You may buy the wireless d/l of your video to your home PC, but 90% of America can't handle it.

So, how do we open up our home PC's safely? Is it throwing off Microsoft? Won't happen. Is it waiting on Microsoft to make a safe OS? Uh, sure. Is it buying hardware firewalls? Bubba barely got that danged DSL to work, and you want him to figure out this little white box? Nope.

I have no idea, but when it happens, I'll buy the home connect Camcorder with you.
optical_man 12/4/2012 | 11:27:48 PM
re: The Crystal Ball Author: st Number: 6
Subject: Re: One more thing... Date: 9/7/2003 9:30:50 PM
get your money ready...-st

st: Plug's been pulled on Sony/Ericsson. To much 'save face' at stake to continue after the Japanese made such big noises about stopping the experiment to continue.
This is a phone that was designed 8 months ago. Hint; for sale on discount asian website. What's that tell you?
(although I wished the Nordic/Japanese connection would've worked!)
st0 12/4/2012 | 11:27:44 PM
re: The Crystal Ball "This is a phone that was designed 8 months ago. Hint; for sale on discount asian website. What's that tell you?"
the cost of making this phone is not that high.

As for "test market" product, the Jap. product development are different: many products you can find in Japan you would never see them in north america. If T610 is pull the plug, that means newer or better things may be in the pipe line (may be Sony only?). Personally, I agree with the mentality to produce interim product for test market application and only make large production run for the mature product line only. Or, you can have the north american way: microsoft type, mass produce lousy product and patch up or "recall" massively One is the long term brand name in the making and the other is short term market share garbing. Different marketing strategy. (It still confuse me how could software get away with so many bugs with minimum consequence cost for the software makers. Goodyear goofed on their product, the company has to recall and replace all their defective product and resume the responsibility of damage, but software, it is your fault not track the latest patch and got infected by virus..... may be we should bring our infected computer to microsoft service center for free clean up... that would fix the problem fast...sorry, off the topic... must be a virus).

whyiswhy 12/4/2012 | 11:27:43 PM
re: The Crystal Ball OM:

There is abundant and very secure broadband hardware and software out there. The Microsoft VPN software that "comes-with" works very well and is quite secure, though I would not conduct national security (or national banking) business with it.

Couple of links:



The problem is it takes a geek to setup and configure the stuff. If the setup CD had it all covered, that would be great.

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