What is strange about the telecom industry?

The FCC has unanimously voted to allow AT&T to conduct trials to turn off the phone network. It must be puzzling, at least to those who are unfamiliar with telecom industry inner workings. In normal markets, you hardly ever have such debates. For instance, there is no public debate as to how jet engines or future light bulbs are to be designed — even though everyone uses them. GE and Rolls-Royce introduced major enhancements without most people even noticing them. New light bulbs pack major innovations and plug into the old sockets, without any accompanying brouhaha. What is different with telecom?

The short answer is the Internet. Because the Internet has become everyone’s everyday tool, the dysfunctional behaviors in the telecom industry have become a matter of public debate. Anyone who uses Facebook or Twitter seems to believe that they have a say in the way the networks are to be designed.

For the long answer, you have to go back into history. Years of litigation resulted in the divestiture (break-up) of the AT&T in 1984. Bell Labs [2, 3] was the final authority on networks at that time, when, the Internet was in its infancy. The predominant network being the telecom (phone) network. One side effect of the divestiture was the dissipation of the technology know-how and knowledge, accumulated over a century, in the Bell Labs. The reconstructed Bell Labs is regaining its moorings only now. While the Bell Labs was in decline, the Internet as its protagonists were rising in prominence, culminating in the Dot-com bubble.

This is critical because the technologies, vocabulary, and principles underlying the telecom networks and the Internet are as alien as the German and French languages, even though the telecom networks and the Internet are an inseparable mesh.

The concurrent decline of the telecom stakeholders and ascent of the Internet stakeholders resulted in the neglect of telecom infrastructure and the underlying products. In fact, the primary suppliers (Nortel and Lucent) for the North American telecom networks are no longer viable business entities — Nortel is no more, and Lucent merged with Alcatel. The net result is cost of operating the telecom networks has been increasing, while the number of customers using voice components of the telecom networks have been declining. AT&T, therefore, wants to replace the voice telecom network with the Internet.

But the problem is that the Internet is not an exact replacement for the telecom networks for voice services. The best example is the 911 emergency service. The result is the convoluted public debate we are witnessing.

Texting has been suggested as replacement for the 911 service. However, this is not a good substitute. Dialing 3-digits — 9, 1, 1 — and speaking on the phone are simple to perform. But texting is not that simple — among the reasons are lack of uniformity of operation among devices, and the option for alphanumeric data.

A better solution is a mandatory “Alert Button” on all messaging devices, including phones, smartphones, tablets, dashboards, remote controllers, radio/TV receivers, wearables, keyboards, game consoles, door openers, and connected devices. The Alert Button could internally send text messages. In addition, with Alert Button, implementing different types of Alerts, in conjunction with GPS, will be trivial. Different types of Alerts, such as medical, fire, disasters, rescue, roadside assistance, burglary/intruder, equipment failure, threshold alarms, diagnostics, operating parameters, and other types could be easily implemented. This has the potential to create market for a whole new class of Alert devices and services, similar to the pagers used in the past.

Another issue missing in the debate is “transparency.” What are the goals of the trials? What are the objectives? How the results of the trials will be evaluated? And how the decisions will be made?

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4 Responses to What is strange about the telecom industry?

  1. What is strange about the telecom industry should be apparent to all by now. In 1913 we started the process of locking ourselves into a non-generative, vertically integrated, silo-ed, service provider mentality confined by arbitrary geographic, market segment, and application boundaries. The result, particularly in this country was 4 distinct business models for 2-way voice, data, content, and mobility.

    IP, upon which all these network oriented applications (both private and public uses) have converged, was a “universal” packet protocol which quite frankly wasn’t even on the “hit-list” of top contenders in the early 1990s by the network wonks for leading us out of the analog, circuit switched era to the “next-gen” networked computing era. The main contenders were SMDS and Frame-relay/ATM. The latter won the battle, but lost the war to IP. Why? Because IP was embraced by everyone who could develop generative ecosystems in which marginal supply and demand cleared ex ante in vertically complete fashion across horizontal layers and intranets.

    What might have happened during 1913-1983 if we had forced interconnection, sharing, and opened networks in layers 1-2 (which, after all, ride on publicly grants to rights of way and frequency channels)? This is not a trivial question, as one of the main points of contention between the high-cost, inefficiently structured vertically integrated service providers and the competitively priced horizontally scaled “internet” players will be interconnection points. The former would like to have fewer and reside in the core as that’s the way to retain monopoly pricing, while the latter would like to have many and push the interconnection points out to the edge.

    Clearly with a majority of access occurring on (or through) mobile or transportable devices, and high-definition collaboration scaling, and 4k and high-res video and music exploding onto the scene over the next 5 years, it would be foolish to establish fewer interconnection points. The amount of traffic and signalling “tromboning” would be huge and the inefficient use of transport capacity extreme. Hopefully the regulators are smart enough to realize this and look back at 100 years of history to recognize and understand what we got right and wrong.

    As a footnote, the picture of the pager is somewhat ironic because the “vertically integrated” paging providers couldn’t understand that what had scaled their application to a large degree was the advent and universality of “touch-tone”. The latter was a byproduct of the intensely competitive (and horizontal) WAN and voice markets in the 1980s and early 1990s. With ubiquitous touchtone at the edge, anyone could send anyone a message. This was not the case overseas where touchtone had less than 30% penetration in even the best markets due to the lack of telco competition and the fact that vertical separation of the monopoly had not occurred anywhere but in the US. Hence numeric never scaled. As a result I argued with the paging carriers between 1996-98 that they would perish under the wave of 10 cent digital wireless voice if they did not band together and create a universal send-side text message platform and protocol. Something I referred to as “touch-tone for text messaging.” Another example that can be learned from, but that few people recognized back then, let alone even know happened for numeric paging in the early 1990s or didn’t in the case of text paging in the mid-to-late 1990s.

    The vertically integrated TDM oriented carriers (including the cable cos) are in very much the same situation of the paging carriers of the 1990s or IBM in the early 1990s.

  2. Sorry, should have added, I love your idea of an app or button (a universal API) that incorporates 911. As Chairman Wheeler pointed out at the end of the Open Commission meeting on Thursday, whatever solution is developed it should already anticipate sending pictures (MMS) and video so that response(s) can be even more timely and effective. Anyway, out of the “touchtone for text messaging” idea which the paging carriers failed to comprehend, I had actually built a messaging ASP which, in its retail form, had a universal “green button” that could allow for easy texting response back to any particular device from any device or document. It was a super thin client to proxy “touchtone” or easy sending of text without having to know any addresses or go to a particular portal or interface. The name of the ASP in 1998 was The MessageNet, which was changed to Iris Wireless in 2000, when it was pivoted to focus on wholesale intercarrier clearing.

  3. blade says:

    George, texting is a better option than you realize; there are many people that have difficulty speaking in a clear voice or under stress that may well be able to send a text message much more easily. I know of a number of people with Autism that struggle with speaking, especially to strange people, that are much more comfortable with keyboard entry that would benefit from this.

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