A Practical Navigator for the Internet Economy


Technology Convergence and Standards - The OCA

Industry coverage tends to focus on technology’s increased ability to put amazing performance into small packages. Apple’s iPhone is perhaps the most outstanding example of convergence in ICT. As the well known technology changes of the last 30 years have made telecommunications networks and the digital devices that ride their wires or their spectrum more powerful, the telecoms and IT industries are converging such that a 35 gram device from Apple, the 5th gen iPod Nano nad oner fourth the weight of the iPhone, is an FM radio, a digital music player, a voice recorder, a still picture viewer, file storage and retrieval device, a stop watch, a pedometer,  calendar, address book and can record full motion audio and video that can be watched on the device’s small but high res screen or on a full TV screen.

This technology convergence has kept armies of designers and engineers busy.  It has created many new vast and valuable corporations.  But while it has rushed forward, it has outstripped the ability of the corporations responsible for creating marketing and maintaining it  to work productively in a globally conflicted and often chaotic capitalist market place. Consequently the economies of all nation states are impacted in conflicting ways while achieving the synergistic development and deployment of these technologies is a desirable goal that grows more distant

It grows distant because, at nation state level, regulation of the relationship between hardware and telecomm is filled with contention, where regional regulation needs to coordinate with that restricted by national boundaries and where antitrust and market dominance issues cut across device versus wire regulatory issues that further inhibit the possibility of smooth market functioning.

To make matters worse, government procurement in technology areas is not rational, and definitely not coordinated across divisional boundaries.  Reality varies between outright chaos and random Brownian motion. Governments don’t know how much they spend on IT.  Corporations don’t understand national  regulatory environments.  Even regulators have difficulty figuring out where they fit in regional economic bloc picture.  From a long term strategic point of view corporations have no really adequate means of judging which nation states are optimal for new investment in IT and telecom.

While all this is happening, the framework of enterprise centric IT and telecom is shifting al la Nicholas Carr’s Big Switch in the direction of cloud computing.  The value of standards for creation of clouds is understood as people in government see the possibility of vast cost savings of moving to the cloud. But to do this effectively means standards and shaping them is not a forgone conclusion.  The traditional standards bodies seem too large, too cumbersome or too slow. For standards should the mix be regional, or nation state? Should the focus be on privacy, security, interoperability, price differentiation, architectural differentiation all in a green energy saving computing context?

National interest, regional interest, corporate interest versus the environmental concerns and physical available of energy and supplies are all issues making  smooth policy legal and economic coordination and development difficult.

Further IT and telecoms are partners in making the cloud work, they need to understand their supply chain interdependence on each other far better than they have managed to at present.  This lack of understanding often leads to working at cross purposes.  If we are to have an economically effective transition to cloud computing, what the cloud is must be better defined, brought into focus, an effective approach of moving to standards created.  Government procurement must be standardized and coordinated within the context of the cloud.  the corporation must learn how to better contact with government and vice versa.

Tim Cowen has used the benefit of a 30 year career that crosses most all these issues to come to the point where he has established the Open Computing Alliance.

The alliance invites membership from it companies where it can help members design better business contractual and legal processes that will help IT companies and  telecom companies works more productively with each other while recognizing  all the inter company processes that can benefit both sides.  The same thing goes in showing governments how to coordinate plans and policy across operational and sectoral divisions. As Tim explains it  in the COOK Report interview, the  goal of OCA is to encourage systemic thinking across these legal planning budgeting and operational issues. 

OCA Members will be assisted in developing trans sectoral approaches that are synergistic rather than conflicting in using national economic resources to move forward in ways that legal, procedural and operational goals can be formulated and carried out in ways that can demonstrate how a systemic approach can produce results that are unobtainable by the current system that lacks the necessary integrated cross silo thinking.

Regulatory Status of Internet Access  p. 19

This is a follow on discussion to treating internet access under title II as telecommunications service (See December 2009 COOK Report pages 1-29.)

October 25 Chris Savage: … The issue-du-jour is the regulatory status of Internet access.  The conclusion I am tentatively coming to is that (a) the case for treating Internet access service as an unregulated information service is, in fact, pretty weak; but (b) if Internet access service were to be deemed regulated (for these purposes, let’s say subject to Title II), it wouldn’t actually matter very much.


Atkinson:  Chris,  You are absolutely correct in your forecast.  IMHO, the only way for the FCC to get out of the regulatory thicket created by classifying Internet access service as an “information service” is to reclassify it as a “telecommunications service.”


:  You are just beginning to see the dynamic I've been trying to explain.   But yes, it is dying a slow death.  The NANOG report I sent you describes this.  Here is is for list benefit: NANOG 47
http://www.nanog.org/meetings/nanog47/presentations/Monday/Labovitz_ObserveReport_N47_Mon.pdf   Check out slide 16 "What's happening" and slide 17 - the new Internet.

Qwest Makes a Profit While Level 3 Bleeds p. 29

COOK Report: What is wrong with this picture?  (Oct 29) Converge! Network Digest, v16n207 28-Oct-09

Cecil:  Further bursting the illusion that wireless is "separate" from landline is separate from IP, here's a new Qwest vs LVLT battle: http://telephonyonline.com/3g4g/news/wholesale-fiber-backhaul-102809/   Like the monopoly landline guys are not going to leverage the hell out of this to kill competition - uh, guess which one is paid by all of us to run copper into the vast majority of towers out there, and guess who is going to deny interconnection, collocation, drive up prices from pole attachment to ROW access?  Now it's bad enough for Q and LVLT - neither has a wireless affiliate, but watch how this plays out in Verizon and AT&T territory, not to mention how ugly this gets with your friendly guys at Frontier or Embarq.  

Telecom regulation is a hedge fund for monopolies.

Cecil to Rollie Cole: You raise an incredibly important point.  Using the wireless towers as an attractor of fiber optic, but where local authorities make that process easier and less expensive for entities willing to open up access for others, has the potential for an incredible win-win proposition. In concept it is not unlike what's being done with some of the stimulus grants, so the precedent for this sort of thinking is already supported. If you need any help in refining your thinking or getting to folks inside those organizations, I'd be happy to point you in the right direction.

Welcome to Net Neutrality, Now Log Off  p. 31

Goldstein: Why does this send me to the ceiling?  Sure, I think just slapping down file servers would be more effective, but the pirate-CDN business and their ILEC affiliates put the kibosh on that.  So now they're limiting heavy users during congestion.  Sounds more than fair.

In case you're not familiar with it, DOCSIS has a systemic shortage of upstream capacity.  Cable is best at asymmetric applications.  It's different in Europe where the upstream spectrum extends to 68 MHz, but in the US it's capped at 42 MHz, thanks to an old FCC rule requiring cable companies to carry TV stations "on channel", with Channel 2 starting at 54 MHz.  42-54 is the guard band between the two directions.  So DOCSIS 3 can't do much here because there isn't space to bond more channels.  Cable incrementally raises capacity by reducing the number of subscribers sharing a section of cable (node splitting).  That costs money.

ADSL's asymmetry, in contrast, is entirely by choice.


Broadband Pricing

Cowen: Can I refine my question in terms of the offering by dominant incumbents of facilities where there is no economic alternative? Where there is a competitive market, prices should gravitate toward the competitive level and there should be no need for any form of government or regulatory intervention over the price of the offering of access to the facilities that carry broadband.

Goldstein: Agreed. However, there is a difference between having any competition at all and a market lacking significant market power.  Typical EU regulation seems to kick in when one player has more than 25%; the FCC typically sees a market as competitive is one player has less than around 99.9%.  Certainly in measuring Special Access, the guideline they enforce, based loosely on a not-hard-fought DC Circuit case IIRC, is that if there is competition anywhere in a metropolitan area, then the entire area is assumed competitive, regardless of whether or not a given customer can get a choice. Sort of treating wires in the ground like airplanes at the airport.


Vint Cerf: I doubt there will ever be much competition at the physical layer and therein lies my big problem with status quo. If the split occurs, and physical facilities can be used to reach alternative providers, this would be a form of intra-modal competition - something the FCC rejected years ago. If we want to explore that alternative, we'll have to start asking ourselves what the pieces look like, who will experience what costs, who are the players that connect to the sharable infrastructure, what are the economics and business models that would work for all parties, etc.

Odlyzko: I agree with Vint. We have the ancient problem of a natural monopoly that was already faced by people worried about railroad economics almost two centuries ago. Apropos Hendrik's comments re Larry Downes, the net neutrality discussion may indeed not lead anywhere in terms of effective action, but it probably will be of great help in shaping the debate. The telcos staked out an extreme position with Ed Whitacre's "those are my pipes, I can do whatever I want with them" position, and the reaction to that has shown them, and everybody else, that this is not tenable.  So now we'll have an ongoing tussle somewhat removed from such extremes.


The Open Computing Alliance Focuses on ICT Convergence Policy Development
Founder Tim Cowen Explains Need for Cross Silo Approach to
Issues of Government Procurement, Cloud Computing and
Supply Chains

A Framework for Government Purchases                            p. 1

Liberalization of Telecoms Markets is in Interest of Both
Service Providers and Device Makers                                p. 3

Strategic Importance of Regulatory Risk Analysis and
How to Identify Risk                                                p. 4

OCA Focus                                                        p. 7

Government Procurement – Instigating non
Siloed Thinking                                                    p. 9

How Do You Go from a World You Know into One You Don’t?        p. 10

Choices Relating to Technical Issues for the Cloud – Security
and Protection                                                    p. 14

Interoperability and Access – Fitting Clouds Together                p. 15

Improving Business Processes                                    p. 16

What Do We Need to Find Out?                                    p. 17

Symposium Discussion October 18 - November 17 2009

Regulatory Status of  Internet Access            p. 19

Sidebar: Fred Goldstein & Chris Savage Conversation
on Internet Access                                              p. 22

Qwest Makes a Profit While Level 3 Bleeds    p. 29

Welcome to Net Neutrality, Now Log Off –
Comcast’s Congestion Management
Scheme                                                    p. 31

Broadband Pricing                                                p. 32

Executive Summary                                      p. 37