Friday, September 30, 2005

After the VON Blur - A wrap-up 

One week after the Fall VON 2005 I finally have some time left to get my act together and to make a wrap-up from this outstanding event. First of all I want to congratulate Jeff, Carl, Diana and the rest of the crew for the perfect organization - the only minus was the somewhat confusing layout of the program guide.

The VON was impressive by sheer size: 7000 participants, 400+ exhibitors and (too) many presentations. But was it worth the effort? For me, personally? Did it have a lasting impression on my picture of the telecommunication world, do I have to change my views?

Yes and no. It did not change my basic views, but I got a strong confirmation and many new arguments and background information to back these views up.

For me the VON is basically an instrument to gather new information on upcoming trends, so I am most interested in the keynotes, in networking and in talking to friends and in making new friends and to visit some break-out sessions on the topics I am interested in or working on. This leaves not much time for the exhibition. I just go to some well-know stands to say hello and try to get an overall impression.

There was of course a lucky coincidence with important external events: the new developments in the US regarding Emergency Services and the discussions regarding changes to the out-dated Telecommunications Act, the heated discussions on the sense or nonsense of IMS and NGN, the implications of Katrina on telecommunications (e.g. P2P and viral networks, the Skype-eBay deal and the related-to article in The Economist, leading to the discussion of one of the most important question: who will be the future players in telecommunications? The fixed-line telcos and/or the mobile operators with their walled gardens or the new elephants such as Yahoo!, Google, Amazon, eBay/Skype/Paypal? And what the hell is going on with Microsoft?

To start with the negative: The silent absence of the FCC at this VON was very loud and confirmed the impression I had from the last rulings, especially the somewhat weird and hastily rolled out on emergency services: the FCC is currently heading in the wrong direction.

So what are my take aways?

There is a fierce battle going on between two (technical and business) models: the open end-to-end Internet model and the walled-garden vertical stovepipe NGN IMS model.

This battle will finally be decided by the convergence point: the customer. He or she will finally decide if she wants to use the walled-garden applications of the IMS or the open applications provided by the new elephants. She will have to pay for both, the question is only, how much.

My impression is that this battle is already decided:

IMS will be too late (if ever), too expensive, too complex, too restrictive (there will always be something new and exiting available outside), I do not even believe it will more secure or provide a better QoS.

IMS is now working on PSTN emulation and/or simulation (I never get the difference and what is what). Is this what the new customers, e.g. the kids want? Skype et. al. are already offering the first VoIP 2.0 applications, as Brad Garlinghouse (Yahoo!) showed in his presentation.

It was always said by some proponents of SIP that SIP goes beyond VoIP, especially beyond POTSoIP. This will also be a lesson the current Vonage-type providers still have to learn.

Of course customers want to be mobile and nomadic, but the also want a seamless integration of all applications (voice, video, TV, IM, chat, conferencing, presence, e-mail, filesharing, contact information, identity, identiy, identity, ...) on one device, but they also want to change this device at any time.

It was also said that the telcos cannot compete, because it will take them too long to develop new applications to compete with the new entrants.

So I recommend that the telcos concentrate primarily on the asset they have, the access and the (local) backbone. There will be only local competition. This does not imply that they do not provide (hosting) services for their customers, but they should keep in mind that here they have to compete globally. Some telcos seem to have gotten this message or at least their borad members (e.g. Bell Canada), some not (e.g. Bell South). Bell South is still betting on IMS and will end-up with stranded cost. Some telcos still have not made up their mind yet, which side to take and may end up in limbo.

They should also NOT try to (b)lock their customers in, because their customers will not like this and second, it is useless, as Google has proved this also last week with the "secure WiFi" VPN beta.

This is valid both for fixed- and mobile (wireless) providers.

There was only one displeasing issue pointed out for me by Brough Turner in his presentation: the telcos are squeezed also from the lower layer (layer 0 is he named it). The access is also not a safe heaven in future, because there is (will be) competition here too by independent FTTH providers. They will lease, rent or sell the fiber to the customer. And if the customer has finally a fiber to the home, he is set. The currently existing bandwith gap is solved. And the customer now may choose his ISP at the co-location room.

So both for IMS and access we are finally back to Clay Shirky: you can compete with everybody, but not with your customer.

The regulators are cursed, they live in "Interesting Times": how to deal with this new developments? The existing telecom laws are technology neutral -- as long as the technology is circuit-switched.

The regulators should be very happy with the global competition on the application layer, this is what they always wanted and stated (at least in Europe with their 18 markets - it is all about ensureing competition - or so they say). They went in all this hazzle about carrier selection, number portability, unbundling, regulating the incumbent with significant market power ex-ante and ex-post, etc. Now they should be happy if an end-user may select his VoIP provider on a call-by-call basis on his Snom phone or by using one of the five soft-phone running on the lap-top, but they are not.

They should immediately prohibit port-blocking, because this is also "unbundling", but they do not.

So was all this talk about competition and de-regulation, fostering innovative services and doing the best for the customer and the economy hot-air?

They should go back, re-read their telecom laws and concentrate on preventing bottle-necks, care about universal service (needs to be redefined to broadband), emergency services and lawfull intercept (this seems to be unavoidable today).

So it was a very impressive and interesting week.

PS: about concerns

It seems cool today to have concerns. Everybody has concerns. If somebody comes up with a new idea, some time ago everybody was fascinated and said, let's try it out.

Nowadays everybody has concerns. Either the idea is killed immediately or you are only allowed to do a trial. During the trial you show that there are no real problems. In the meantime they do not think about how to improve the idea, they think about how to come up with additional concerns to be solved in an additional trial, and so on. You can implement the idea or product only if all concerns are taken care of, including the global warming and world hunger.

Of course in the old days there where also concerns: when they implemented the first railways, some people said this must not be allowed because nobody can stand a speed over 25mph and all people on the train will be DoA.

We would have no railways, no cars, no air-planes, no Internet, no mobile phones, etc. today.


I can't figure out how to send you a trackback, so please go and check this out.
You said that "there is (will be) competition here too by independent FTTH providers".

Can you elaborate more why you think it is going to be that way? Isn't there incentive to be another monopoly?

Great article by the way.
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