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The New Battleground: MegaLec and IMS vs Google

Is the Duopoly Preparing to Launch IMS in Order to Force the Internet Genie Back into the Bottle?

Do the ASPs Led By Google Have Tools and Environments that Can Successfully Push Back?

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The November - December 2005 issue looks at different forms of Broadband. It describes the regulatory-political victory of the Duopoly in the United States. It examines IMS and a carrier control mechanism and then outlines Duopoly’s coming and likely IMS oriented struggle with the Application Service Providers (Google, eBay, Yahoo, Amazon) for control of digital networks.

October 1, 2005 Ewing, NJ --Developments in telecom appear to be coalescing around two very different approaches. Call them polar opposites. On the one hand the cabl cos and tel cos are fighting a rear guard action bolstered by huge lobbying budgets to get Congress and the FCC to support their vertical, and control-oriented models. Make no mistake about control. The latest atrocious piece of test legislation to surface is the 77 pages of Barton-Dingell. According to Brett Glass’s reading, to become a broadband ISP, you must register with the FCC - an FCC that is also to be given power to denymay indeed have been ddesigned as a control planeany registration application that it does not like.

If it blossoms fully, the Duopoly control will box users “in” in every way at the very time that they seek ways to ensure that they can engage in real time global collaboration. The Duopoly controllers will seek to ensure that access speeds will be as asymmetric as the providers can manage. The customer’s ability to send data to the network will be tightly constricted. The centralized content owners will have a fire hose with which to spray their content at users. The Duopoly hopes to have working IMS that will permit it to sell and bill for all manner of micro-services. The Duopoly will also seek to build its levee walls higher with software that will allow it to block its customer’s attempts to use Skype and other P2P services.

Carriers and Cablecos Versus the Application Service Providers

The polar opposite of the telco cable company “control-the-user-and-make-him-pay” world view is led by Google (but would include Amazon, Yahoo eBay and Skype) exits to empower the user by offering him a broad environment of tools intended to support business, learning or entertainment interests. This emerging counterweight to the duopoly is becoming known as the ASPs (application service providers). However, we had also better recognize that the environments of the ASPs include walled garden characteristic of their own and may not be immune from the influence iof IMS.

Seeing what is at stake in communications revolutions has never been easy for those caught in their midst. COOK Report subscribers and mail list members understand the swirling complex of issues in a way that average members of the public do not. As Andrew Odlyzko wrote on September 20: “The bulk of the population most likely does not know or understand the issues. That was certainly the case in the past. The “cheap postage” fight in the first half of the 19th century was not a great popular movement. And even after the fight was over, people had to be taught how to use the mails for social communication (with a brisk trade in how-to books). Similarly, in the early 20th century, the marketing of telephone for social communication did not come out of popular clamor, but was a result of the telcos finally waking up to the opportunity they had.

Odlyzko’s insight about the opportunity to promote being missed by the telcos and Google’s on going efforts to turn itself into an environment that becomes the first choice of everyone’s interaction with their network environment is compelling. Google is turning itself into a combination of telephone directory, library and mapping service to become a one-stop reference for everyone who plans business, education or research activity. In the future fewer and fewer people will be engaging in their own business development or research without access to a computer and the network. At one point MicroSoft wanted to become the Operating System for the Internet. It failed. Google it seems has similar goals. It will likely to get further along this path than did Microsoft.

 

In contrast to Google’s expansive environment there are a new range of business offering the telco’s rearguard, turf protection enticements. Verso Technologies has announced “a ‘carrier-grade applications filter’ that can block so-called bandwidth drains such as Skype, P2P messaging, streaming media, and instant messaging.” The old guard tries to do business by enticing the carrier to buy its services, wall in its customers and compete against their interests by blocking the services that customers want most.

I suppose it is a hallmark of the capitalist idea of the free market that makes room for someone to try to sell a service like Verso’s that says to the carriers your old model is salvageable. It is sad and is to be hoped that carriers will refuse to buy. Fear and desperation however are powerful motivating forces. In the absence of an alternative motivating vision, the old management may well try foolish rearguard actions to defend the indefensible.

That it is indefensible was demonstrated on September 21 when James Enck, author of Eurotelco blog, described his experience with Google Secure Access. The upshot was that James was wirelessly connected to the net at a carrier conference in London. He had opened the Google Secure Access Wi-Fi client to see what would happen. MUCH to his surprise he found himself connected via a Google VPN to Google’s Secure Access Portal in San Francisco.

Richard Stastny offered the following analysis: “Certainly the ability to run a VPN tunnel from a client machine to a secure server or portal is no big deal. The point to focus on here is that providers (especially mobile operators) have started to block VOIP in general as well as Skype, because they want to keep users within their expensive “walled gardens”. But they cannot do this by blocking all VPN traffic because they would loose the business customers. So you cannot only check your e-mail via the Google VPN, you can also use the company SIP-server to make VoIP calls. I always told the mobile operators that blocking VoIP is useless because if the start doing (and they did), somebody immediately will offer a VPN service to the Internet for the general public. And Google (clever as they are) did. Furthermore, if you do not trust Google, you can even set up your own additional VPN on top of theirs.”

The Carriers mode of business has traditionally been to carry the bits. They have not become adept at providing comprehensive environments for doing business. This is what Google is now attempting in very impressive ways. Ebay Skype, Yahoo and Amazon also offer comprehensive but more focused environments.

As the Carriers come to understand that commodity IP transport and their last mile monopoly are the only things they have going for them, they have to either try to carry their own content inside a walled garden and convince users to pay extra for the privilege of staying in the garden or they have to design a services delivery platform where they can encourage independent content providers to hop on by paying some kind of channel content distribution fee. The only problem is that two years ago before the solidification of the duopoly took place an independent service provider would be able to offer his service for essentially the cost of a website or server at a network exchange point. Now the service provider still has these basic connect expenses but in order to be carried to the carrier customer it will have some additional percentage of its revenue to be paid to the carrier. And since there is no more common carriage involved the carrier can charge whatever it feels the traffic will bear.

Disney as a company almost as big as Verizon would be happy to pay Verizon distribution fees if it would do content policing and other services for Disney. But as we shall see in a moment there is an issue of reverse scale.

OBOC by the “Book”

PriceWaterhouse Coopers published a 44 page study called IP Transformation: Beyond the Triple Play http://www.pwc.com/techforecast/pdfs/IPTrans_web.pdf. Dated July it was only announced in September.

As the Carriers now all realize that their dependent business models are imperiled, they are beginning to frantically work on shoring up their IP futures. This November December issue presents detailed discussion of IMS which Martin Geddes derisively refers to as the Internet Monetization System.

The PWC study is very well written and very clear in most respects presentation of the incumbent’s play book. It takes the triple play fro granted but then shows the carriers how to go “beyond” that to ensure their financial futures. The key we are told is “An open-but-owned-and controlled (OBOC) strategy”. The paper is presented in seductive and logical fashion and the “open” caused me to drop my defenses and rush into enthusiastic support. However pushback on the symposium mail list was immediate and strong. OBOC is not quite what it seems at first glance. The following three paragraphs are direct quotes from the paper.

“An open-but-owned-and controlled (OBOC) strategy will be crucial if carriers are to leverage IP transformation into long-term success. OBOC describes a competitive environment where key product standards, especially interface specifications that permit interoperability, are owned as intellectual property but are made available to others who develop complementary components, systems, or services.”(page 3)

“Carriers currently provide open Internet access (simple TCP/IP) to consumers and third parties like Amazon, Yahoo, eBay, and Google, but fail to provide differentiated services that would create value for third parties. Third parties provide functions such as identity management (IdM), digital rights management (DRM), and billing, which are not part of their core services. In an IP world, service providers could continue to manage these functions themselves or outsource them to the carrier, taking advantage of the privileged TCP/IP that is provided by the service delivery environment.”

“In practice, OBOC systems aim to create commodity-like competition around elements chosen by the licensor. Yet these systems remain restricted in some way, increasingly locking in the installed base as it grows. OBOC systems are in the middle of a spectrum bounded by public availability at one end and proprietary standards at the other. The art of executing an OBOC service environment strategy is balancing which elements are opened to spur innovation and competition to force down price and scale up demand, and which elements are restricted so the licensor can capture a slice of value from each innovation.” (page 24)

In other words, by the OBOC “book” an independent service exists at the pleasure of the incumbent that is free to impose fees or not, as well as to ratchet them upwards or down. What was not immediately clear but became so with list discussion is that OBOC is essentially the same concept as IMS. Each incumbent is essentially told if you have any doubt about what the vendors can deliver, get busy and role your own versions of OBOC services.

If this model prevails the telco’s will become very much like the cablecos. Each will have their channel line-ups. The big boys may or may not bend to the carrier’s monetization of their business models. However, niche publications like the COOK Report have no room to bend. And innovative startups of all kinds have unfair additional burdens placed on them.

Furthermore the plan probably won’t work. The incumbents have the most to gain by assessing the ASPs fees for the delivery of their services but it is doubtful that the ASPs will pay. If they are blocked it is likely they will tunnel.

Jeff Sterling who runs a WISP in Boise Idaho said it best. “I personally enjoyed the read and I’m thankful to have a look at the incumbent play book. Here are a few reactions.

1) OBOC is a political counterpunch to the net neutrality argument and to a lesser extent publicly-owned networks.

2) OBOC is the rose-colored glasses used to divert financial analysts attention away from the mess the incumbents are in. Primarily referring to commoditization of their value proposition, their inability to adapt to the end-to-end IP economy, and their inflexible B/OSS.

3) OBOC is also a way for incumbents to rev up the marketing engine and capture the rhetoric of the opposition: IP transformation, broadband ecosystem, service-oriented architecture.

4) An OBOC network is what UTOPIA and other municipal projects are. The difference being varying degrees of openness and control. For example, an OBOC network could be a member-owned cooperative that builds and operates a network to benefit its members.

5) OBOC is not inherently evil. Most transportation systems could be classified as OBOC systems. The question is who owns and controls a network and for what purpose.

Contrast OBOC to Martin Geddes analysis of Google’s business model.

http://www.telepocalypse.net/archives/000761.html#more

We quote Martin: “Here’s Google’s situation. Google isn’t a search engine company; it brokers connections between people and corporations for profit. The media properties provide context for the relationships. Search is just one, albeit dominant. Orkut, despite its fizz-bang-pfizzzzzzaway, is sort of the social networking equivalent of Skype’s on-net calling. It’s always going to be a free service, and just providers more contextual fodder. And so on through photos, books, maps, etc. — all just fodder for connection people and corporations for fun and profit.

I’m just doing a précis of what other observers have written, no new insights. Move along, please.

Note that broking of connections and relationships is more than just advertising. Google is more than adverts. Otherwise, why not just make all AdSense ads non-clickable? That’s what adverts are — calls to action without an integrated fulfillment mechanism. As such, “on-line advertising” is an oxymoron.

The e-commerce value chain

Google is competing in a long transaction value chain that looks something like this:

0. Demand stimulation/market formation. Self-awareness of user need, awareness of market solution. The domain of traditional marketing.

0. Capture attention. The user is presented with ads, and eventually sees a proposed solution to a problem the user has. In the user’s mind, the connection is ready to be made. In the olde world of directories, this is (i) finding the category of vendors who match your problem (often something that isn’t intuitive if you’re after something more complex than a taxi or flowers), and (ii) filtering on the locality/capability criteria you have. By the end of this stage the user feels “I am aware of a potentially relevant solution to my acknowledged problem”.

0. Connection. The user clicks on a link. The connection is only one-way; the advertiser doesn’t know who the user is, or what they really want. An extended Yellow Pages advert is the analogue version of connection. The user is now engaged with a particular solution provider and is paying attention to their message.

0. Contact. The user and advertiser engage in bi-directional contact. The user presents some form of identity (e.g. gives a phone #, e-mail address, etc.). This is like calling the 800 number.

0. Transact. The user’s requirements are codified, and a non-repudiable contract is formed to deliver some good or service.

0. Settle. Payment is remitted. A third party like a bank or Paypal is normally involved.

0. Fulfillment. The goods are dispatched.

0. Delivery. The goods arrive.

Google’s competitors aren’t search engines per se. Google is competing for transaction value chain slices against eBay, Amazon and even vertical search like Craigslist. Of course, chop off the search engine leg today, and the Google animal as a one-trick pony falls over. But Skype could equally be another leg on the Google animal."

Structuring Transactions

Martin continues: "Amazon and eBay have their own twists on transaction enablement. The former is pretty full-spectrum, with the web site recommendation engine doing the marketing on behalf of the product vendors, all the way to actual dispatch of the goods — and even delivery for some digital goods. eBay integrates payment and settlement (Paypal), but is weak at the capture stage because you need to go there first to initiate a search. There’s no “did you know someone can solve this problem for you?” eBay sidebar as you browse around. On the other hand, eBay has memory of your identity and reputation; Google just delivers anonymous bodies to the shop door and disengages from the transaction entirely. That’s a strange way to treat customers, not even attempting to make an introduction. Impolite, at the very least.

Both eBay and Amazon are able to deal with a relatively narrow range of possible commercial transactions, huge as the volumes may be within that range. Simple stuff like “I want a red one” in Amazon and eBay means adding another SKU. Every nail is hit by the “add another inventory item” hammer. Whilst there are platform APIs, the ability to define new forms of interaction with the user are very constrained by the existing business processes and transactions.

So Google offered totally unstructured transactions with no integration of user identity; eBay and Amazon offer structured transactions, with limited flexibility, and some user identity (but isolated within their commerce island).

The future transactional user experience

Fast-forward five or ten years. What sort of transaction and commerce experience do you expect to have? Picture yourself buying a vacation, talking to an agent. The agent is co-browsing with you; perhaps you would like this hotel? Or that one — it’s a bit nearer the beach, for just a little more money? You would never have to dictate basic personal data. The agent would know you are indeed who you claim to be. The agent might not, however, get any of your personal data, or even phone number. They can contact you, but your identity is opaque, and if they spam you later, you can cut them off easily,” Geddes concludes.

Extracting Tolls

Geddes’ analysis shows how Google is in the midst of becoming an all-encompassing environment. But it is an environment that facilitates rather than restricts its users. By way of contrast the telco and cable co’s are there to extract new tolls from their customers at every turn. ARPU says it all. The winner in this world is he who most successfully empties his customer’s pockets.

Google is not there to fleece its customers but rather to provide them with the best possible tool sets to do business no matter what their business may be. The businesses that want to be seen more readily by the users of the Google environment are free to step up and pay for advertisements that are the most targeted and least "in-your-face" of any on the net. For example Google map APIs are open free for use by others. Google talk is open in its design encouraging others to use it. Google is open source. If information is power Google has vast stores. It is to be hoped that it uses its power wisely. While it is too early yet to predict the outcome the communications and knowledge based environment that Google is building is the environment necessary to anyone who wishes to play with globalization and the so called new flat world.

Having to FTP rather than email a Powerpoint deck on grid computing because it is a megabyte over the duopolists' size limit just doesn’t “cut” it. There is a paradigm change here and the change is based on the assumption that networks will be there in the background as enablers of a landscape where coming to do business will be productive for all involved, where costs will be low because the technology is new and cheap and not encumbered by three earlier generations of debt. It looks like it may pan out to be an environment that people will want to pay to play in. Because costs are kept low the cost of playing may not be overwhelming. Frameworks of operation can be self-constructed rather than predefined by sales contracts and product cycles.

People will pay for access to a tool set in an environment that delivers the best that technology is capable of rather than the least benefit for the highest return to the old line walled garden gate keeper. If Google build the best environment it is not so hard to imagine that people world happily pay Google a monthly fee for access to the environment. Right now it is an information environment. One most interesting question is whether or not it can become an access provider as well as information host.

The next round then looks to be between the Google environment and the monetize-thy-user IMS squeezing machine being constructed for use by the telcos. Of course a word of caution is in order for pressures could build that would push the Google environment in the IMS direction as well.

IMS and Fat Wasteband

The issues invovling IMS are coming into better focus. Consider the following exchange.

Coluccio: After some lengthy and somewhat instructive discussion on the security perils of VoIP in the Enterprise, a recent article http://www.networkworld.com/news/2005/091905-von.html concludes as follows:

“Security worries are shared by businesses considering VoIP, according to a recent study by In-Stat. The task of securing VoIP networks is among the most immediate concerns of IT executives deploying converged networks, recent research shows. According to a 2005 survey by InStat, 75% of companies that have VoIP deployed plan to replace their firewalls, VPN gateways and intrusion-detection systems to better support converged traffic. The research firm says most VoIP-focused companies plan to implement these changes over the next year.

“Service providers at the show as well as equipment vendors are expected to tout their adoption of a network standard called IP Multimedia Subsystems (IMS ) that is meant to create a common IP network architecture that will enable flexible, quickly created IP services based on products made by many vendors.

“Convedia and Covergence say they will announce that their gear is being installed in specific carrier networks, but would not say which ones. Other vendors plan to announce that their products either comply with IMS or will do so soon.”

What are the implications of IMS where the larger world of VoIP and other m-m delivery schemes to the residence and So-Ho are concerned, and how will it impact on the openness of inter-networking as we’ve come to know it today? Of course, in order to adequately respond to my question above, one must be fairly conversant and well-read in the nuances associated with IMS. And that’s the rub: The requisite time and labor to acquire the necessary level of knowledge about something so non-intuitive as IMS that one side of you feels natively opposed to, just to be able to discuss it intelligently in the first place. Hence, the room for conflict.

COOK Report: Well Frank I have a question for you. If you consider enterprise users, large financial institutions, in particular, why would IMS be important unless you see it as a factor in determining how continued dependency on carrier networks will cost your clients more and more and more in the future? Are your clients not now very near the tipping point of where build your own makes operational sense? But is there yet another complicating factor that even the largest enterprise nets have to connect to the PSTN at some point and at that point do you fear that IMS fees will be there to bite them?

In your prior post IMS is being sold as a part of security fixes for VoIP - are these issues always going to be there regardless of whether the enterprise builds it own net because even Boeing at some point must connect to the PSTN?

What is the over riding factor? Gain control and certainty by building your own or know that at some point regardless of what you do you still have to connect to the rest of the world?

Coluccio: IMS is mentioned in conjunction with security, and I suspect it will find a home there, too. And while costs are always important to enterprise users, my points had more to do with networking transparency and the avoidance of unnecessary kludges. But those are some good, reaching questions, Gordon, which I’ll attempt to address.

I’ve been looking at IMS and IPSphere for several months and I have posted a number messages to this list about them, starting with the “don’t get skyped” one last May, expressing not only my concerns (Hi Richard!), but due to a lack of greater understanding, some ambivalences at this stage of the game, as well, since beneficial outcomes to their development, assuming they exist, have not yet become clear. For example, are there some aspects of security, or any other attribute, that could actually be enhanced by their integration into today’s IP protocol suite? I don’t know the answer to that question, yet.

To briefly summarize a couple of my earlier posts and the subsequent discussions they triggered, we discussed the toll-gate aspect of the suite, i.e., how these protocol suites have been designed to favor carriers’ monetization and profit margins without necessarily adding identifiable-at-this-time benefits to the end user experience (indeed, potentially impeding some capabilities, in the process), and some of the learning curve headaches the rest of us will have to endure in the process of watching this all play out even before we know for sure that it’s going to stick to the wall.

One concern, and this addresses many of your questions, is that if the basic building blocks that we’ve come to know as network elements gradually begin to alter and become reshaped over time in compliance with IMS, or any other set of restrictive standards, then even when you build your own you, unless you are equipped to build network elements yourself, you are subject to the same limitations dictated by the constructs and tools we’re talking about. This, no matter what. Building your own goes far beyond the act of filling inner ducts that have been placed in conduits with fiber and slapping on a DWDM that feed Layer 3 gear. Building your own also means provisioning of applications platforms and the services they avail themselves, too.

In the case of enterprises attempting to escape the grip of Centrex and LEC-based voice services, they are now finding themselves having to select between IP-PBXs, which, like wireless SMS and voice services, are also gravitating to the same set of IMS-based architecture we’re talking about. Video conferencing, ditto. Virtual private LANs that depend on centralized policy and security administration will be next. You see where this one goes, I think.

Secondly, very often rolling your own means outsourcing parts of the enterprise network to application-specific ASPs, whose servers do not work in a vacuum. Clients, in turn, will require compliance to how those servers work, hence the alteration of code on desktops and enterprise gateways. Slowly but surely, this is the way application – and application code – creep, spreads.

So, if you take these assumptions to the extreme, you begin to see that one cannot “gain control and certainty by building your own” if the underlying designs of the only building blocks available to the end user organization have been dictated by carriers.

Beware of IMS Like Network Elements

COOK Report: So as the LECs swallow the carriers and the big enterprises wonder what to do next? They must be asking whether they let the carriers build for them and give them the bill, or try to build it themselves?

Frank Coluccio says: “One concern, and this addresses many of your questions, is that if the basic building blocks that we’ve come to know as network elements gradually begin to alter and become reshaped over time in compliance with IMS, or any other set of restrictive standards, then even when you build your own you, unless you are equipped to build network elements yourself, you are subject to the same limitations dictated by the constructs and tools we’re talking about. This, no matter what. Building your own goes far beyond the act of filling inner ducts that have been placed in conduits with fiber and slapping on a DWDM that feed Layer 3 gear. Building your own also means provisioning of applications platforms and the services of which they avail themselves, too.”

COOK Report: Is IMS someone’s revenge for 20 years of post divestiture open standards and open source? With everything becoming a commodity and being some how simplified, did someone feel the need to put proprietary secret sauce back in the mix?

How did IMS get from AIN on steroids to VoIP security? Is it now a set of hooks into which anything can be shimmed?

Looking at Frank’s reference to network elements?? We learn that at http://www.sprint.com/sprint/analyst/checklist/netelem.html that “A network element is a facility or equipment used in the provision of a telecommunication service, including features, functions, and capabilities such as subscriber numbers, databases, signaling systems, and information sufficient for billing and collection, or used in transmission, routing, or provision of a telecommunications service.”

So network elements once-upon-a-time were open architecture - interoperable standards defined? Then from a regulatory point of view, what’s the deal with a network element? That they are no longer open - right? In other words they can become as proprietary or as IMS- like as you want to make them. Since they are the central building blocks, you can then no longer get any other building block that the one the telco insists on you having? Because only the telco IMS provisioned one will inter connect to the PSTN. In the future you connect to the PSTN not on the basis on any open standards but solely on the telco’s terms?

For the moment these questions are largely rhetorical. Other than a feeling that IMS will be very important our experts are not yet agreed on the outcome. Frank Coluccio understands that it will be very important and is cautiously watching it very closely. Richard Stastny doesn’t seem to like it at all. Richard wrote on September 27th that: The basic problem of SIP or IMS or whatever is the device du jour is IP Interconnect. If this is solved, everybody can interconnect with everyone else. IMS is basically SIP on steroids.

Fred Goldstein is very gloomy in his disagreement.

Goldstein: IMS doesn’t remind me of SIP in the least. SIP’s value proposition, its strength and weakness, is end-to-end communications across an Internet that has absolutely no knowledge of the SIP context. It conforms to layering, with the SIP layers riding above the IP layers. Its weakness is that the Internet is a sewer of spammers, DDoSers, and other crap that firewalls are needed to block, along with NATs, so pure SIP doesn’t necessarily work everywhere. But it’s a nice thought.

IMS has the counter value proposition. It’s more like a session Border controller on steroids, standing in between SIP clients. It ignores layering, using a beads-on-a-string view of network elements. Its strength is that the Internet is a sewer of spammers, DDoSers, and other crap, often making sessioin border controllers and firewalls necessary. So it offers network operators a way to use a set of network elements to attempt to take control over SIP and other end user applications. Now and then it might work. But it’s a nasty thought.

If raw clean IP were available everywhere, then IMS would probably not happen. But most mobile operators have never provided IP -- they’ve provided WAP, and sometimes limited, filtered IP. So IMS comes from their view of the world, where there is no user-owned LAN or computer; rather, the “terminal” is a 3G handset approved by the mobile operator and operated under its license.

Wireline providers to date have provided raw IP, but the US is moving away from essentially ALL of the protections that made the Internet possible. Common carriage is largely gone, so the wire owners are now allowed to intercede inside the user payload. This prevents ISPs from connecting to their subscribers via telco leased facilities. While the biggest enterprises will be able to get raw fiber or microwave links to surviving backbone ISPs like, say, Savvis or Level 3, the mass market won’t. And even those backbone players are often “in play”, being bought up by anti-Internet Bells. For instance, Qwest just sued SBC for interfering with its attempts to purchase XO and Time Warner Telecom (not to be confused with the cable or media company that spun it off). So you could find your Internet connection replaced by a Fat Wasteband connection of IPsphere Services and no IP connectivity.

That’s the potential scenario we’re facing here in the US, where the ILECs are disavowing themselves of their traditional role of common carriers. To date we still have Special Access tariffs for clean leased circuits, priced for “enterprise” use, but in most cases they are not currently subject to any price regulation (not even price caps, except in the most expensive rural areas), so mostly well- heeled enterprises purchase circuits that depend on them. Competitive DSL is slowly being cut off, as local loop unbundling obligations are phased out.

COOK Report: David Reed is more optimistic.

Reed: IMS is part of a strategic game (economics meaning) being played. The game is about network externalities, not about traffic. About the “options to connect”, not the connections. In other words, it’s about Metcalfe’s Law and Reed’s Law, not bisection bandwidths and superrouters.

Frank correctly notes that enterprises largely connect with a diverse set of peers, and thus if IMS-compatibility becomes a dominant thing in the “public VoIP” world (just like the “public internet” world), enterprises will be forced to connect via IMS. Yeah, the Fortune 500 companies could construct a private IMS-free VoIP network for all calls that don’t go to destinations outside the club. But the club would be too small, unless the club forms an open, anti-IMS network that becomes a standard for all, not just for the favored few bigcos.

So IMS, in that scenario, would call the shots, indirectly but powerfully.

Look at how HTML (even with its initial weaknesses) and HTTP essentially killed Lotus Notes (I was a minority among the Lotus Notes fans at Lotus in arguing to make Notes a non-enterprise standard, arguing against the marketing and design decisions that led to it being a closed, intra-company product because of the externality issue - that’s part of where “Reed’s Law” came from).

IMS is, right now, not winning this strategic game. I’m skeptical they can win, because to win the game you have to be open, and the phone companies just can’t play a strategic game without pulling their punch in a way that ultimately is self-defeating. They’ll be like the Unix companies - owning a winning standard, but instead forming a circular firing squad.

But in the meanwhile, IMS is something the enterprises that run their own telephony systems WILL have to care about - if only to decide to jump on a different bandwagon than IMS that captures the network externalities more efficiently. Let’s hope it is based in end-to-end SIP, which is still sitting out there waiting to be exploited without creating troll bridges for the telephone trolls to break up the interoperability that the Internet created and currently exists.

COOK Report: The stakes are large. I am preparing to be the lead off speaker at the PNC 2005 meeting in Honolulu on November 1, 2005. This is a meeting of three organizations PNC (Pacific Neighborhood Consortium), PRDLA (Pacific Rim Digital Library Association), ECAI (Electronic Cultural Atlas Initiative) -- will offer its perspective and expertise on the issues of digital collection and digital libraries in the global community. I have been reviewing a large slide deck on grid computing (111 slides). It is the first look at grids I have had since about 2001. These grids are turning into a huge global resource for basic research and database work in almost every imaginable field of study. The leading work on both building and using this infrastructure is being done largely outside the United States. Starlight at the University of Illinois Chicago and National Lambda Rail are our only leading edge resources. This is yet another area in which our backward propertarian policy may be leading us into a hole that will take decades to dig our way out of. In addition to maintaining our own research infrastructure the ability of the ordinary citizen to benefit from what is happening here will find itself choked off in an IMS Fat Wasteband world.

 

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Contents

Understanding Economic Impact of Broadband Related Business Models -- All Broadband Offerings Are Not the Same --

To Be Acceptable Bandwidth Must be Both Adequate for Demands Placed on It & Flexible in Conditions for its Use p. 1

Tracking the Global Economics of Broadband p. 1
The Elephants Are Not Preordained to Win p. 6
Internet Business Models as Systemic Processes
Seasoned by a Dash of Telecommunications p. 8

An Editorial

An Emerging Business Offers an Opportunity to Redefine and Rethink the Ownership and Economics of Networked Content Why Am I Diving into What David Hughes is Doing? p. 10

Three Five Year Stages
Passing the Baton from the Policy Wonks to “Content” (Reaching the Last Row) p. 10
Enabling Wealth at the Edge p. 11

Interview

Interview
VisualArt Systems Plans Comprehensive Internet Based Digital
Media System for Display, Indexing and Commerce
Founder David Hughes Embraces Museum Standards to Create
Environment Enabling Visual Content Sharing p. 12

Developing a Systematic Digital Visual Framework p. 12
Things Happening Haphazardly Creates Need for the Order of a Systems Approach p. 13
Visual Gallery - Some Technical Issues p. 14
The Components of the System p. 15
The Four Parts of the VASI Business Model p. 16
Visual Connect Management Server p. 17
The Dublin Core p. 20
The Mark Cuban Model p. 21
Bill Taylor and West Point p. 23

Symposium Discussion, Aug 11- 17, 2005

 

Grasping How VisualArts Systems Inc. Is an
Example of a Business Model for a World in
Which We Simply “Do” Communications Opinion/ Killer Media p. 24

How to Ask People to Think More Broadly? p. 25
What Business Model Might Encourage Transmission of Edge Based Content? p. 26
Douglass Galbi’s “Sense in Communications” p. 27
So How Does VisualArt Systems Fit In? p. 27
Value is Subjective and Individual p. 28
How to Create Value for the Public? p. 28
You Deliver Meaning and Participation p. 29
The Duopoly Must Think About “Value” p. 30
Verizon Better Realize Is in the Business of Delivering
Capabilities for the Creation of Wealth p. 31

NANOG August 8 -11 , 2005

Effect of Mega-Mergers on Fiber Routes, Implications of
Building Internet Ready Housing for Have Nots
Frank Coluccio Asks Questions I Am Not Seeing Raised Elsewhere p. 32

Digital Pork p. 33

Interview

FCC to ISPs - Drop Dead
PatriotNet as a Case Study in “Propertarian” Blindness -
ISP’s CEO Explains Why Martin’s"Leadership" will Quash Small
Business and Local Self Sufficiency - Ability to Determine the Technology Future of our Local Communities Disappearing p. 35

Going from Observer to CEO p. 35
Serving the Edge-Based, Small Business Customer p. 36
The Rest of the World is Not Following the American U-turn p. 37
Washington Bureau for Internet Advocacy p. 38

Cybertelecom August 8 -15, 2005

New Rules Endanger ISPs
FCC Ruling Interpreted and Discussed p. 40

Barton Dingell Draft Is a Pro Duopoly Anti ISP “Wolf” Masquerading in So-called
Pro-consumer, Network Equality “Sheep”s Clothing” p. 45
Libertarian PFF Wants No Regulation, p. 46
Comments on Technical Language p. 49

Interview August 26, 2005

Broadband in Asia - Pervasive & Especially So in China Internet is Viewed as New Business Infrastructure Dave Robison Explains That Asia is So Far Ahead of North America That Problems Are Fundamentally Different in Each Market p. 50

Broadband in Japan, Korea and Taiwan p. 50
Broadband in China p. 51
Broadband is Basic Infrastructure in China p. 52
Asia Operates on a Different Mentality p. 53
IPTV and QoS p. 53

Symposium September 15 - 22, 2005

An Exchange on the Technical, Economic, and Traffic Issues Impacting the Potential Market for Ever Larger and Faster Routers p. 55

The Costs of Upgrading Router Technology p. 55
Traffic Growth is Slowing p. 56
A View from Caspian p. 57
A Debate on Centralization versus Decentralization p. 58

Symposium August 17- September 23, 2005

Assessing Impact of Federal Decisions on ISPs, Wireless Issues in Context of Both Disaster Relief and Battling the Duopoly --Grasping the Emerging Impact of IMS and the ASP p. 61

Regulatory Mandated Telco “Splits” in Australia and England p. 61
Five Weeks Later BT Spins Off Open Reach, p. 62
Portland Oregon Goes Wireless and Municipal Worker Productivity Gains p. 63
GoogleNet and the Price of Bandwidth p. 64
Fat WasteBand p. 65
Backbone and Peering Scenarios and Intercarrier Compensation p. 66
“IP and the PSTN It’s Half Empty” “No It Isn’t, You Nitwit, It’s Half Full!” p. 69
The “Meaning” of a Wireless Distance Record: Don’t Embed a
Technology in Stone p. 70
The Role of the ISP in the Age of the Duopoly p. 75
The ISP Exists to Provide Service p. 76
Missing ­ A Balance Between Private and Public Interest p. 78
Internet Access Provider Versus Internet Services Provider p. 79
Introducing the Managed Subscriber p. 80
Disaster Recovery Wireless p. 81
Disaster Relief and More Muni Wi-Fi Announcements p. 82
Expertise to Manage City Wide Wi-FI Networks Lacking p. 83
Virtualization and Speed Issues in Mesh Networks p. 85
City Wide Wi-Fi Operational and Management Concerns p. 87
Katrina --- and the Landline --- Telecom’s Response p. 91
New Zealand Digital Strategy and VoIP p. 94
War Against Network Neutrality p. 94
Skype Voice Services and Worries About the Role of IMS p. 95
IMS as a Non-Intuitive and Complex Set of Service Points p. 98
An Austrian View of IMS p. 99
A Standards Frenzy to Unleash IMS-Like Tolls p. 100
Some Issues Impacting Enterprise Use of IMS p. 104
GoogleNet -- a Reprise p. 105
Google to Offer a National Wi-Fi Hostspot Backbone? p. 108
A Google VPN p. 109

Highlights p 109

Executive Summary p. 133

Side Bars

Broadband’s evil twin, just a fat wasteband” and American Competitiveness p. 9
Thoughts on Editorial Direction of COOK Report p. 60
Off Shoring as Skills Arbitrage –
Not Just Wage Savings p.66
Skype as the Next Generation PBX? P. 70
Beyond Calculation – Innovation and
New Infrastructure p. 73
Richard Stastny Defines the S4 Syndrome p. 102

Contributors to this Issue

Mike Cheponis, Wireless.com and specialist in antenna design
Frank Coluccio, President DTI Consulting Inc., New York City
Cynthia de Lorenzi, CEO of PatriotNet
Peter Ecclesine, Technology Analyst, Cisco
James Enck, telecom Analyst and Proprietor of Eurotelco Blog
Jim Forster, Distinguished Engineer, Cisco
Bob Frankston, developed Visicalc and Lotus and later home networking at Microsoft
Martin Geddes, Consultant and Publisher of Telepocalypse
Vijay Gill, Director Peering, America on Line
Fred Goldstein, Principal of Ionary Consulting, author of The Great Telecom Meltdown
Riad Hartani Cheif Technologist Caspian
Stuart Henshall, Publisher Skype Journal
Dave Hughes, owner Old Colorado City Communications and wireless advocate
David Hughes, Co founder VisualArt Systems Inc
Don Jackson, VP of Advanced Telephony, Tellme Networks
Tony Li, Router Architect at Cisco, Juniper and Procket, recently at Cisco before Departure to Portola
Peter Macaulay, Programme Manager Digital Strategy, Department of Economic Development, NZ
Franscois Menard, Canadian policy expert and municipal fiber network architect
Andrew Odlyzko, Director Digital Technology Center, University of Minnesota
Bo Parker, Managing Director of the Global Technology Centre of PricewaterhouseCoopers
David Reed, Internet pioneer, spectrum policy expert, currently with Media Lab & HP
Jere Retzer, Sr Mgr, Next Generation Networks, Oregon Health & Science University
Dave Robison, Senior VP of World lWide Sales and Support, Caspian Networks
Ron Sege, CEO Tropos
Bill St Arnaud,Director Ca*Net4 , Canarie, Canada
Richard Stastny, Senior Analyst, OeFEG/Telekom Austria
Jeff Sterling, Founder Interconnected Associates