Telcos fear the 'stupid network', says US analyst

By CHRIS BARTON

If you follow David Isenberg's line of reasoning, you get an explanation of why Telecom is deliberately holding back the uptake of broadband in New Zealand.

It's fear - and rightly so - of the "stupid network".

Isenberg's seminal paper The Rise of the Stupid Network was first published in June 1997 when he was an employee of AT&T but later taken down from his website at the request of AT&T. But you can still find it on the web.

His premise is that telephone companies operate "intelligent networks" with all sorts of centralised and complicated switching and routing mechanisms, databases, and signal control systems. By their nature, these networks are an expensive infrastructure of scarce resources engineered for the optimal delivery of intermittent voice services.

Contrast that with the internet - a network of always on connectivity engineered simply to "Deliver the Bits, Stupid". A network where data itself is boss, telling the network (as small packets with internet protocol addresses) where it wants to go - not the other way around as in a circuit network.

As Isenberg puts it: "Instead of fancy 'intelligent' network routing translation, in a Stupid Network, intelligent end-user devices would be connected to one or more high speed access networks - always listening for relevant information, for data addressed to their owner."

So why is Telecom afraid? Because there's very little margin in ordinary connectivity. Instead of a network that sells all sorts of smart services - like 0800 numbers, voice mail and "faxability" - the stupid network just sells a connection like a power company. The intelligence happens at the ends where smart devices and software are attached to do pretty much whatever you like.

If stupid networks take hold they will plunder, pillage and probably rape Telecom's - and other telcos' business. That's because the internet can do everything the telephone network does better and cheaper and it can do much more. In Isenberg's near future, those on stupid networks will hardly ever use Telecom's conventional telephone network for voice calls again. Why would you when voice over internet protocol (VoIP) delivers better quality?

Isenberg, who was in Wellington last week to launch CafeNet, an 802.11 wireless extension to the CityLink stupid network, says it's only in the past six weeks that he's seen VoIP technology that delivers better voice quality than circuit switched technology. For him, that's a significant milestone. Back in 1997 people just laughed when he suggested such a notion - because everyone knew VoIP, at the time struggling with routing latency and jitter (variation in packet arrival time), was lousy.

It's the disruptive nature of the Stupid Network, that Isenberg says he completely missed back then. When disruptive communications technologies come along, incumbent telcos don't notice them at first and they're certainly not aware that "one day they're going to eat their lunch". But when they do become aware, then telcos do everything they can to delay the new technology's onset. True, Telecom is moving towards an internet protocol network and is rolling out fast internet with asymmetric digital subscriber line (ADSL) technology. But it does so at a snail's pace and sells the technology not as open connectivity, but as discrete tightly controlled add-on services, just as it does with voice.

Far fetched? Just look at the high price of broadband in New Zealand, the paltry 50,000 customers using it and the terribly underutilised Southern Cross cable.

"Why not charge less and use more?" asks Isenberg. Why indeed? "Because the telcos have a vested interest in scarcity."

It's a vested interest that stifles innovation and led Isenberg with 44 internet analysts and business executives to petition the United States Federal Communications Commission in October to not only let the telecommunications industry fail, but to let it "fail fast". The FCC had been holding hearings to look into the causes of the telecom free fall and was considering suggestions to help it recover.

Isenberg was horrified: "The telephone network is aging, hostile to innovation and so expensive that the seven largest US telecommunication companies now report more than US$250 billion in long-term debt - and there's much more worldwide."

Isenberg's creative destruction has a positive side: "Telephone companies, weakened by bankruptcy, would lose their lobbying clout and have a harder time snarling the spread of high-speed internet access and keeping competition off the market."

So what's the solution? Isenberg is a big fan of fibre everywhere. He also likes the idea of Governments building and operating the internet as key national or regional infrastructure - like roads and sewers. If he has any criticism of the Government's Probe project to promote broadband, it's that it's not aggressive enough and should have been based on fibre as only fibre has the capacity to deliver the quantities of bandwidth necessary for stupid networks to operate.

That's good news for those like UnitedNetworks and Tangent which have laid fibre in Auckland city. Not to forget Counties Power which has taken the bold step of rolling out fibre to the Franklin region. These companies along with CityLink are clearly seeing the future now. For Citylink users that's currently an average access speed of 100Mbps with one user partaking of a 1Gbps pipe. That's a league or two apart from the 2Mbps users sometimes get on Telecom's ADSL service.


* Email Chris Barton

David Isenberg's website

The Rise of the Stupid Network

The Dawn of the Stupid Network (later version)

CityLink

Global IP Sound