Some thoughts on the state of telecomunications in the USA

Not too long ago, you phone from the Phone Company could be any color you like as long as it was black. Now, the choices for voice communications are legion. We have hardwired services we have good old Plain Old Telephone Service (POTS), Voice over IP (e.g, Vonage, etc.), Skype, wireless connections using cellular technology (i.e., GSM, CDMA), and now VoIP over WiMAX (at least in Baltimore). We can ask the question of whether all of this is actually good for us?

Well, of course, having multiple ways of doing the same thing is a way of fostering competition and technological innovation. If companies did now work in developing VoIP technology and if Internet Service Providers (ISPs) did not work on improving their quality of service, then we would not have the technology tools, systems, and services that enable the rich communications environment that we now enjoy.

But, is all of this good for us and for the industry? It's hard to say, and I am not going to draw a firm conclusion here. But let's look at some of this issues that this diversity brings:

1. As indicated previously, multiple technical directions fosters innovation and new technologies, services, and applications
2. However, with multiple approaches do we dilute the ability to achieve economies of scale in the deployment of any technology?

VoIP and its benefits is an example of issue one. However, there are areas where issue two may have impact for years to come.

What will happen with the current dramatic decrease in wired POTS users? Since these networks (predominately provided by the old Bell Operating Companies' systems), what happens when the user base falls below the threshold that causes the cost of providing services to the remaining user set is so expensive that is become prohibitively expensive provide?

• Do we simply turn off the old system and make the remaining users go to a new technology or simply turn them off? This is exactly the scenario that is playing out with the elimination of Analog (i.e., NTSC) television transmission, scheduled to be virtually retired next year.
• Who pays for this?
• Which company is going to be the first to demand the required changes in the current regulatory environment?

Currently, in the United States of America, we have at least three existing mobile cellular technologies at play and now there is a third. The first three are GSM (used virtually everywhere around the world), CDMA (used almost exclusively in the USA), and iDen (used almost exclusively in the USA and some areas of Latin America). Now, we have added WiMAX as the very distant fourth, trying to take a share of the mobile data user and fighting against the so-called 3G services provided by GSM and CDMA - good luck.

These three standards compete in the US for a user population of around 150+ million users. Currently this means that that largest provider has only on the order of 50 million customers. In a few years, if it not already true, this will not even be the size of the smallest cellular provider in China. We can identify some serious issues:

• Is the competition in the US going to provide better services, or leave us behind as our mobile voice and data services are diluted over carriers that will not have the capital to expand their services to meet emerging application requirements?
• Will the USA fall behind in advanced wireless applications as availability of high-speed data services becomes fragmented and non-ubiquitous?

Finally, how do we balance the requirements of wireless to wired? Clearly, no current technology (or with known physics) is going to provide mobile gigabit services delivered to tens of thousands of users in a city. How then do we start valuing the the contribution of traditional wireline providers? And, how to we incent companies to provide the 20 Mbps to each business and home that will be needed to keep up with countries like South Korea and Japan?

Some issues?

• Building fiber into building costs a lot of money. However, permitting, franchise fees, and in general lack of government support makes this more expensive and sometimes impossible
• The apparent business environment for investing in companies trying to build new metropolitan infrastructure is extremely poor at best
• The business case for building is getting worse and worse

I will finish the blog with a short summary of the worse and worse, which may lead to a new entry later. The phone company invests heavily in the development of fiber to the home and business. The business case for the service includes the sale of voice, data, and video services. However, they do their job only too well, as they enable 20 Mbps or so to their customers and (as may be likely in several years) almost none of them use the video or voice services provided by the service provider. This is because customers can get their TV shows directly from the source of the material and by using one of multiple VoIP providers.

What happens in this scenario?

• Does the phone company stop investing in the fiber deployment?
• Doesn't the same situation exist for cable companies?
• Is there room for other companies to make an investment?

The bottom line is the simple question: Where is the value that enables investment? And, with the government now dealing with other monetary crises, can companies make the investment without a least more cooperative local, county, and state governments to make it easier and less costly to install new facilities?

Going Horizontal on the Vertical

In this case, Going Horizontal on the Vertical is not a catch phase from the original Outer Limits television series where the announcer calmly proclaims that “we control the horizontal and we control the vertical”. The point of this post is to get the point across that almost no matter how diligent telecommunications carriers think they are when they develop products, or when customers write statement of objectives, invariably the result is a set of vertical services or sets of requirements that leaves the ultimate reason for the services in the first place out of the equation – the mission of the organization.

Why are we in this situation? Isn’t it clear that the purpose of network services is to provide an infrastructure and Information Technology (IT) resources to support the mission of the organization, company, or government agency?

Our first look will be from the perspective of a telecommunications service provider. Historically, and fundamentally, there are two sets of organizations that play a role in the development of the services offered. These are the Product Management organization, and the Technology Management organization. Note that neither of these organization’s names have anything to do with a customer focused solution. They are focused on an individual product and a set of technologies to enable that product. It actually goes further south from there – and although some aspects of this have improved over time, an example from my direct professional experience will shed some light on just how bad thing were.

In the beginning, technology created Asynchronous Transfer Mode (ATM) and Frame Relay (FR) – well not really in the beginning as there as Morse code, Baudot , X.25, Switched 56K, etc, etc… Then, along came the Internet and Internet Protocol Services. Let’s deal with ATM and FR first. So, as a product manager, what was the approach to selling the product? Well, instead of really understanding the problems that customers want to solve by using a network-based data service, you focus on what the box manufactures and standards bodies are telling you. You specify your product not in terms of a set of configurations that can be used to solve a series of customer focused network problems, but in terms absolutely incomprehensibly except by bowing to the alter of some network engineer. You’ve got PVCs, SVCs, DLCIs, VPI/VCIs, CBR, ABR, PCR, SCR, MBR, VBR, VBR-rt, VBR-nrt, UBR, and so on and so on and so on. As sales documentation you take out the glossies from your favorite box vendor and maybe something from an nearly otherwise useless book on ATM and make assertions like: “CBR is great for video, VBR-rt is great for voice, ABR is great for who knows what, UBR is great for pesky email you don’t really want to get, etc”.

Now let’s bring in the customer, who decides that if the carriers are going to declare technical mumbo-jumbo war in describing their products, then they are going to have to get their own technical mumbo-jumbo experts to counter. So, instead of the customer discussing what they are trying to accomplish, they create Request for Proposals that look more like someone picked up the ATM UNI 3.1 specification and picked out every nearly useless and arcane feature and made it a mandatory requirement in the carrier’s response. All this time, the actual mission and reason for the network is nowhere to be seen.

This mismatch between the way that the product is provided and priced to the customer and the real customer need demonstrates that pure technology is not likely to yield customer happiness.

Everyone knew that the reason that people did not like ATM and FR was that there was always a mismatch between the configuration control of the ATM and FR network and the almost exclusively private Internet Protocol (IP) network created at the edge by the customer. So, when public IP services came onto the scene, the Holy Grail was at hand and everything would be happy if you just used the Internet.

So, instead of recognizing that IP services were just another form of data transport, the previous, since time immemorial, approach of creating a new product management organization to care and feed the new IP services product was implemented. And worse, put in opposition to the existing data services product management. This led to the inevitable clash of product managers that arguing that “my product is better than yours because IP is golden and ATM is old junk”.

Because of this clash of religions, each product continued to be managed as independent entities, and each were given network management environments to support the technical features of each product. Even if these were combined into a unified portal, each data product was treaded individually. These management systems re-enforced the technical attributes of the services, but continued to ignore the reality of the customer’s mission. Even worse, service providers that had a managed Hosting service generally had a completely separate hosted services portal, completely focused on the hosting environment and completely oblivious to the network environment that is needed to support complex applications.

In an attempt to remedy part of this issue, the basic approach of carriers was to start developing Managed Network Services. These services were generally based on the carrier creating a Network Operations Center (NOC) that focused on the edge devices of the network. This carrier NOC approach is generally limited to whether the edge routers of a customer are working as designed and to providing a single point-of-contact for trouble management of the underlying carrier-based data transport network. In some cases, these NOCs may use the existing vertical service portals (e.g., to help determine performance issues with an MPLS VPN), or receive a data feed (e.g., in XML format) of the actual data elements that describe the performance of the underlying transport network. However, as previously mentioned, this is a limited view of the enterprise, as the network may be working, but some critical application is failing.

In some cases, this may not be a significant issue, as the operation that is watching a Web-server will address the server failing and is generally independent of a network service. The increase in the richness (i.e., voice and video) in Web services means that this independence between network performance and Web-server operation is disappearing and calls out for a unified environment so that the impact of network performance on application performance is clear and well reported.

How do we get horizontal on the vertical? There are two cases, one for carrier provided Network Management services and for the case where this function is either in-house to the enterprise or outsourced to a third party.

Carriers must start recognizing that they are actually application enablers and that their products are not the application in themselves. This means that all the vertical tools that are created to monitor and report on the technical aspects of a service (e.g., latency, jitter, packet loss, QoS operation, etc.) are actually components in the proper operation of an end-to-end application. Providing this data in Web page is a start, but these services need to have an Application Programmer Interface (API) that enables the performance parameters to be used to create the “big picture” of the status of an application. This API can be used both by the carrier in an integrated environment that combines multiple services, for example network and hosting, into an application view for their customers. In addition, this API can be used to provide a third party the information necessary to customize a network management platform that integrates information from various sources (i.e., internal to the enterprise and from service providers) to provide the application situational awareness needed to effectively operate the enterprise.

Another aspect that is generally not integrated into these systems so called Change Management process which encompasses items such as service affecting network upgrades. Currently, this is yet another process for each product and is generally not integrated either into the vertical management portal for individual services or into consistent Change Management portal for enterprise customers.

Carriers have the ability to reach into their systems for network data, security services data, trouble management information, change management information, and managed applications performance data. They are uniquely positioned to be able to take the high-ground on developing Web portals that can be rapidly customized using the data feeds from the multiple services being provided. This can create real application performance awareness to the enterprise and incorporate the information and visibility necessary to understand the impact of each element of the services being provided on the applications and enable more rapid root cause analysis and therefore more rapid trouble management response and repair.

Getting Horizontal on the Vertical really means understanding customers better and the inter-related nature of their use of services and applications. In my view, this is the ultimate Vertical penetration you can achieve in any customer’s operation.