Zebra,
That was some post! Don't know exactly where to begin.
You raised a lot of good points.
Before I address the major body or your thesis, I would
like to clarify one point that you made. You stated:
>>In your own statements of the post you make reference
to in QWST thread, (if I understood it correctly), you
are somehow "conceding" that the "link" that the ISP's
necessary connection to the Net via the local regular
telephone networks is what exposes them to a "regulatory"
scenario (fee or otherwise).<<
That is not a concession. Why would you say that? It is merely
a statement of fact that if the origination or termination of a
call is made through a LEC's switching or directory function,
as a rule, then the call is subject to normal carrier
regulations and treatment. This may change, but it is the
way it stands now. This is not something that I either have
a preference for or an aversion to. I'm simply offering it up
the way I see it.
There are great divides between what I think will be,
should be, and how I would like things to be. When I post
here it is within the context of what I think 'will' be within a
relatively achievable time frame, one to three years, usually
keyed to evolving conditions, and how I see the things that
the labs are working on that will hit the market within
reasonable deployment and investment horizons.
For the most part, my focus is on the business of
telecommunications, its underlying technologies, and how
vendors and carriers (be they startups or established) might
best position themselves in making their entry in new
sectors. Not surprisingly, these thoughts find a parallel in
investment decisions. I like to compare my notes with those
of yourself and others here, in order to test my own
positions and assumptions, and evaluate differing views.
I try to keep my posts non-fictitious and free from hype,
predicated on existing constructs, respecting the
evolving regulatory environment, both domestically and
internationally, as well as recent innovations and
developments in the industry which will undoubtedly
have an impact in one way or another on how future regs
are forged. To this extent, I am in agreement with some of
your predictions. But IMO it will not be a function of how
effective the general public petitions the government, as
much as how well service providers and their vendors
accommodate the needs of users in a profitable way.
Industry lobbyists, when the time is right, will be more
effective than 'virtual' marches on Washington by a revolting
digirati, IMO. Then again, this may be one of the precepts
that you are challenging in your message. I think that it is,
but I also think that it may be unrealistic in the near term.
Way too many vested interests all around.
Your Latin American and Tofflerian references are all very
interesting, and your prose is well done, as always. I've
read all of Heidi and Alvin's works, and even endured
Newt Gingrich's Third Wave "bandwagon hopping" of same,
a short while back. Again, all very interesting and in line
with the McLuhanesque and other guruesque futures.
[At some point I find all of this sort of promise just too
much for me to take, without taking a little time off to
catch my breath.]
And yet, despite the efforts of the government, and some
of its internal Internet-minded influentials, to institute web
presence in under-served areas, such as initiatives to wire up
libraries and schools, there is a growing divide between
the haves and the have nots.
Not in Angola, but right here in the growing number of
inner city pockets and rural regions of this country whose
cross-sectional citizenry are, by and large, without a
digital clue.
You mention the minimal representation that the American
market represents when compared with world wide numbers.
The Pareto <sp?> rule, personified.
Our 5% accounts for 95% of the concentration of Internet
activity, when the aggregate of flows are taken into account.
You might be interested in knowing or already know, possibly,
that a great deal of international Internet traffic having
absolutely nothing to do with end-points in the US still
transits 60 Hudson Street in NYC, and the NAPs in California.
Even traditional telephone calls placed between France and
the UK, over "switched" facilities <!!>, are finding their way
back-hauled to the old Western Union Building which is just
within a few blocks of my offices in the Wall Street District.
These calls are being placed via intelligent programmable
switching platforms such as Excel and Summa switches, along
with several others, that support 8 and 13 kbps compression
they are deterministic, as opposed to best effort, and they
'sound' better than cellular phone calls, and much better
than Internet calls. Both of these vendors will soon announce
POTS/VoIP integration capabilities, where they have not already,
which will represent a superset of functionalities supporting
the best attributes of both worlds. The larger LUs and Nortels
have also caught on to this trend, and they are not far behind.
But I digress. I have a tendency of doing that.
When the African and SE Asian countries catch up to
where we were five years ago, all North American and
some European NAPs will have gone through exponential
increases in both capacity and capabilities rendering
such off shore improvements academic, if not newly created
bottlenecks. Even with the projected increases in worldwide
bandwidth that Oxygen and Flag-like ventures portend,
the 'Net's infrastructure is not made up of bandwidth alone.
Far from it.
In Kuala Lumpur the government is heralding, boasting
what they call their Multimedia Corridor, or some such
thing, that will open up their region to global access,
and all the benefits associated with same, that they have
heretofore been cut off from. Citibank's SONET network has
more bandwidth. I have more bandwidth available to me in
a one block radius of my office than they will have in
their entire country. We'll have to see how successful
FLAG, Oxygen and the other transoceanic fiber-optic
ventures prove to be in this regard.
But Teledesic? Iridium? Check out the costs of ownership
of today's mobile satellite services and terminal gear.
And then extrapolate what economies you envisage using these
newer LEOs. Then halve it. Halve it again, etc. You know the
exercise. It'll still be too expensive for folks who stand on
line once a week for bread and other wheat products, if they
are lucky enough to be in the right place at the right time.
Five or six billion worldwide. How many of them will benefit
from Teledesic? Some several billion around the globe still
think that the telephone is just a rumor. Another third are
suspicious that it is yet another way for the government to
keep tabs on them. And they are probably right.
Your allusion to Silicon Investor is interesting, and I
understand and fully appreciate your point. But you fail to
mention that while it was once free, it now _costs_ $125,
if I am not mistaken, to participate as a member. Ditto for
numerous other previously free Web attractions. Should we
draw some conclusions from this trend? It's the old game
of "bait, date, and ultimate fate."
I continue to be absolutely dumbfounded, flabbergasted
by the number of investors on these boards whose fortunes
ride on the altruistic and egalitarian goals of providing
global services, within the foreseeable investment horizon,
which are either free, or near free. With the hopes that the
shear volume of it all would not only make up for slim or
vanishing margins, but generate high levels of profits and
huge dividends as well.
Of course, I've taken the naive route here for argumentative
reasons. I am not prone to being so dumbfounded, after all.
I know that many investors are acting on the short-lived
opportunity of this ruse, the fast kill of it all, and
actually know better. I mean... many investors know down
deep inside that you don't get anything for nothing. Right? Hmmm.
But lets play it out. For this free model to hold true, there
would have to be other hooks to profitability built into it,
as we have seen evidenced in recent years through advertising and
certain forms of bundling. But only one to three could survive
in such an environment. Sound familiar? It would require a scale
of operations approaching the surreal that only a handful of
enterprises have ever enjoyed. And even then it would take
some doing.
I, for one, would not want to see that happen _again_. We all
know how that works. Those of us old enough, that is, to recall
the old Bell System. Today we have other icons that have filled
this void. Images of MSFT are offered up here for your
consideration.
Come to think of it, with all of their recent interest in SS7
technologies, and their recent forays into cable and ADSL,
MSFT might just be the ones to pull it off. As long, of course,
as there are just enough smaller entities around to amuse them
and keep them honest in this regard. And if this is the case,
then why would SS7, a traditional POTS technology, be of interest
to them? And to Cisco? And Bay... 3Com... Ascend...?
The answer is that SS7 will survive as the call setup and
administrative information routing tool that both VoIP and
tradititional POTS will depend on for a long time to come.
If nothing else, it will be a crucial element in the transition
lasting up to five to ten years, or more.
Sea changes will occur, I'm certain, and your general
description of previously unforeseen developments taking
place will likewise be the case, I trust. I prefer to deal
with what is just over the one-to-three year horizon I
alluded to above. That is entirely enough 'eternity' for me,
when discussing matters of the Internet.
As always, I would be interested in reading your comments,
along with those of others.
Best Regards,
Frank Coluccio |
