SMART Letter #55
April 24, 2001

!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*() ------------------------------------------------------------              SMART Letter #55 -- April 24, 2001 Copyright 2001 by David S. Isenberg -- "little fish with economy of scale" -- -- 1-888-isen-com ------------------------------------------------------------ !@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*() CONTENTS > Smart Remarks from SMART People > Anonymous at Global Crossing on Service Providers > Richard Nelson on N.Z. Black Caps > Joe Abley on All the Things I got Wrong about New Zealand > John Kawakami on Internet Earthquakes > Robert Mittman on Internet Earthquakes > Dr Strangecode on Preserving Incumbent Advantage > Anonymous at Accenture on The Meaning of Accenture > John Kawakami on The Meaning of Accenture > Peter Cochrane on his Bit Budget > Ken Poulton on Bit Budgets and Market Experiences > Harry Wilker on "Good Principle Incorrectly Applied" > Ang Peng Hwa on History of Copyrights > Tom Kobayashi on Usen -- 10 Mbit/s for $50/month in Japan > Christopher on "Nice Guy, Mike Powell" > Comic Strip Reality -- A Note from Scatt Oddams > Conferences on my Calendar > Copyright Notice, Administrivia ------- Smart Remarks from SMART People: "Anonymous at Global Crossing" takes issue with certain "blithe statements" in SMART Letter #54a: "I'm a fairly new reader . . . occasionally you make blithe statements that I must differ with. To say that an open access wholesale model 'is the only workable strategy for the Internet era' is tantamount to saying that Internet e-tailing will kill bricks and mortar retailers." I reply: I try not to assume too much, but I do take for granted that members of the SMART List have read 'Rise of the Stupid Network' or have seen one of my talks. I use these platforms to explain how and why the Internet is making the network stupid and pushing value creation to the edge. I don't think I've ever before publicly suggested that somebody hire me (indeed, reading my paper would be a more cost-effective exercise) but if you don't see the logic, you really should have me in for a day. Anonymous at Global Crossing continues: "The wholesale open access model only works for enterprises (or carriers, for that matter) that are technically sophisticated enough, and buy in sufficient volume, to benefit from it. Enterprises still need "services" -- those little things like provisioning, network features, VPNs, the ability to originate and terminate voice, customer and end user support, etc. Not every enterprise (nor even most of them, IMHO) have a strong desire to be, in effect, a telecom carrier cum managed service provider. It's not a core competency for most; it's an expensive and complex distraction.: I reply: I agree that customers need to buy in sufficient volume to really make it work. This opens the door to service providers like Yipes, who, in turn, serve smaller customers. But more importantly, "wholesale open access" lets enterprises hire third parties with sufficient networking expertise to create new, enterprise-owned network. The Internet commoditizes transport. When facilities are commodities, "facilities-based-x" models and the fat margins that used to go with them become obsolete. In an Internet world, facility owners can provide higher-layer services, but they have no special advantage in doing so. Conversely, an all-Internet world requires carriers that want to stay in business to deliver the most bits per buck. Network management services are best implemented as an independent layer, so these, too, can be implemented at lowest cost, e.g., by third-party providers. Furthermore, with the erasure of the LAN/WAN boundary, i.e., with WANs moving towards the simplicity of LANS, people with fewer skills and less training can provision and run such networks. These trends are hard to see for people who assume telco-style, vertically integrated business models. But such selective blindness is easy to understand. It is typical for purveyors of old models to see disruptive technologies as inferior, unreliable and impractical right up to the moment that their lunch gets eaten. The slide rule guys looked at calculators and said, "Hah! They can't do cosines." Now Pickett and Keufel & Esser are gonzo. The great houses of sail saw steam as dirty, dangerous, unreliable, inefficient and non-traditional. Not a one of the big sailing merchants became a significant player in the age of steamships. Anonymous from Global Crossing continues: "And let's not even talk about enterprises developing the internal infrastructure for 99.999 voice service on an IP network. (The predictions by a certain large IP equipment manufacturer of "free voice", and more recently, "free data" are, at best, self-serving hype. Haven't we learned anything about purblind business models over the last year?) No IT/Telecom manager will survive if they in-source and get 90%, 80%, 70%, or less call completion, leaving delay and jitter out of it. I think that your notion -- wholesaling dumb pipes to enterprises -- works for a *very* few that have *extremely* mission-critical telecom needs *and* the equivalent of a carrier as an internal resource. And that's a dying breed." I reply: I think you're making a mistake to think that either: (a) conventional telecom actually delivers 5 nines end-to-end (see my "Myth of 5 Nines" on the website) or (b) that today's high-line non-facilities based Internet Telephony providers (iBasis, ITXC, etc.) have call completions as low as 90%. [What do other SMART People think? Should Global Crossing hire me to give them the word? That is, might they be able to learn from me? Or should I give up and sell my Global Crossing stock? (Sheesh! I thought Global Crossing's days of Hindery-think were gone.) Or am I unclear, wrong, etc.? -- David I] --- Richard Nelson <> picks up a critical error in SMART Letter #54a: "One small correction . . . The NZ cricket team is not called the All Blacks. The All Blacks play rugby . . . Cynical people might suggest that the Black Caps are capitalizing on the All Blacks reputation." --- Joe Abley [], a former New Zealand resident now living in Canada, sticks it to me for even more egregious errors in SMART Letter #54a: "+ The All Blacks are a rugby team. The national Cricket team is called the Black Caps. [Enough! I live in New Jersey, and I don't even know whether the New Jersey Jets play baseball or hockey -- David I] "+ Wellington is New Zealand's capital, not capitol. [Ouch! Shoulda listened in 5th grade -- David I] Joe Abley continues: "+ Telstra New Zealand (a startup telco, funded by Telstra Corp. in Australia) and Saturn Communications (a cable company based in Wellington) merged to form Telstra Saturn a year or so ago. Telstra Saturn is building an under-sea fiber loop joining Auckland, Wellington and Christchurch, and is also doing extensive metro fibre and residential HFC networks in all three cities. The Wellington plant has been providing competition for CityLink for ages. "+ It's CityLink, not CityNet. CityLink is building out in Auckland now, too. Richard Naylor is a very smart person (although possibly not SMART, unless he's lurking on your list); Richard put the Wellington City Council bylaws on a gopher server back in the day, to make WCC the first government entity in the world to publish government business over the internet. At the time, Apple used the WCC gopher server internally as an example of what government would be like in the future. "+ CLEAR Communications, the original competition to the incumbent, operates a national fibre backbone as well as extensive metro networks in Auckland, Wellington, Christchurch, and a host of smaller towns and cities around the company. "+ Southern Cross carries Australian traffic between Auckland and Fiji, too. So Kiwis don't get the full forty gigs to themselves. "+ The NZ Government plan to ensure 9.6 kbit/s access to everybody in the country is frequently held up to public derision. The vast majority of New Zealand is incredibly sparsely populated. Getting more than 9.6kbit/s data access over long, long analog copper lines that struggle to carry voice is not a trivial engineering (or economic) decision. Two thirds of the country lives in Auckland, Wellington and Christchurch. The remaining million people are spread out over an area the size of the UK. At the other end of the bandwidth spectrum, CityLink is delivering 100 Mbit/s residential Internet service in Wellington over Ethernet, and it is talking about a city-wide 802.11b network. (These wireless plans may not be entirely public yet.). [Other countries with sparse rural populations are setting their goals higher. For example, Sweden's goal is 5 Mbit/s to every home. (However, according to certain knowledgeable Swedes, it is a goal, not a program.) And where is it written that data must travel on "long, long analog copper lines"? -- David I] --- John Kawakami [] comments on First Internet Earthquake in SMART Letter #53: "The first Internet earthquake may have been the Northridge quake in 1994. I caught it in an IRC chat channel, and people were relaying information from the area, noting what was working and what was not." --- Robert Mittman [], of Institute for the Future, provides similar info on First Internet Earthquake in SMART Letter #53: "The 1994 Northridge quake was probably the first Internet quake. AOL's chat lines lit up; there was real-time news flying around; I made e-mail contact with a friend there well before I could make voice contact with him. I also made contact with a relative I couldn't reach by phone by having someone I met online make a local call, connect with the relative, then e-mail me back. The 'net was not nearly as widespread then, but was a prime source of news and connection. "Also, in the recent quake in India, there were reports of the Internet playing a similar role." [OK, OK. Northridge was the first Internet Earthquake. David I] --- Saul "Dr. Strangecode" Aguiar [], one of the original SMART People, comments on Preserving Incumbent Advantage in SMART Letter #53 "I have been laughing about the desperate acts of our clueless Congressional and Executive branches in attempting to regulate cutting-edge technologies. For years the spooks have done everything possible to impede the distribution of privacy-enhancing technologies like PGP, yet they recently acknowledged that middle-eastern loonies have been using Internet porn sites as dead-letter drops. "Entertainment companies are standing on their heads [Now *that's* entertainment! -- David I] to protect their artificial monopolies. Their problem is quite simple: digital music eventually does have to be converted into analog signals. At that point, hidden information breaks down. There is no practical way to prevent someone from making an analog copy of something and then re-digitizing it. "Remember software that employed dongles (those stupid pass-through encoders which plug in to the PC's parallel port)? Napster is a short-term idea that will die because it parallels the old Bell hierarchy; the choke point is the Napster website. This choke point is Napster's re-creation of the Bell System's Service Control Point (SCP). "Post-Napster distributed peer-to-peer systems like Gnutella will be impossible to stop. (Long live the Stupid Network!). If our Federal representatives think that they can outlaw peer-to-peer transactions, they'd better get LOTS of cash from the lobbyists because they will quickly find themselves unemployed and replaced by populist candidates. Remember the anti-incumbent sentiment of the 90's (Ross Perot, etc.)? "After 21 years working for various large corporations, I can assure you that your description of how people advance is very close to the mark. I left Honeywell Commercial Flight Systems in 1988 to try my hand in the telecommunications world. Since then, most of the people who have risen the highest are not the clearest thinkers or most creative. They were the ones who were most adept at playing The Game." --- "Anonymous at Accenture", comments on Accenture? Bullshient! -- SMART Letter #52: "I have been in tech consulting for about three years now, and I have recently joined Accenture. I agree with you that consulting firms 'rip off' their clients, but the reason why they pay us the big bucks is because the clients either 1) don't have enough manpower to take on or complete their projects, 2) don't have the expertise in house, 3) want someone else to do their dirty work. [These are a few of my favorite things . . . David I] "But I am writing to explain what Accenture means. It is supposed to mean 'Accent on the Future'. The name is innovative, and also represents what Accenture wants to be a maker of. I just wanted to let you know that although the name sounds funny, it was submitted by an Andersen Consulting employee and selected over hundreds of submissions for the new name. "I was wondering if you think these other names are silly (I like them): Agilent (agile), Scient (to know), Celera (to accelerate), Cingular (Cellular + singular) . . ." [Indeed, I did NOT know that an Andersen Consulting employee invented the Accenture name -- this adds some cred to an otherwise totally silly situation. As for the other names, no, sorry, I like a name that actually provides information, about who you are or what you do, or both. doesn't even pass this test with flying colors. So how should I rename my enterprise, SMART People? -- David I] --- John Kawakami responds to Accenture? Bullshient! -- SMART Letter #52: "It's all about the billable hours. Before long, these consulting companies will be honoring each other with awards for innovations in increased billable hours. "Accenture sounds like "censure" or "censor". Maybe the name says, "You'd better hire us, or you're screwed, you no-talent middle manager! The CTO will chew you out. Again!" "Here are my attempts at branding humor: Ansource (yet another source), Dinesis (active finance), Sucressence (only sweetness here), Avade (if you don't ask, we won't tell), Alize, Prisem (with our rainbow vision, we'll extract something), Viron (a unit of illness), Enterpret (comes in and explains something vast), Monicast (we disperse funds), Abilant (we're happy when we're able), Confex (expansive bulging communications), NextLyre (another instrument, another player, another alluring song), Azila (large, scaly, quick), Monade (when life give you "mon"s, we make it), Gresett, Sabot (dutch for wooden shoe), Vanipol (a nation of preeners), Ferroga (macho, and vaguely italian), Ioni (not quite ionic), Imbex (a stupid market)." --- Peter Cochrane [] responds to my query in SMART Letter #52 about whether 1 Gigabyte per month is a reasonable throughput budget: "I'd encourage you to take a second look. I do over 1GByte/year in straight email alone! I cannot imagine you do less! I just checked -- I am averaging just over 12,000 sent/replied to email messages/year." [Thanks, Peter. I'd guess you're a pretty strong example of a corner case -- David I] ------- Ken Poulton [] a Palo Alto CA fiber activist, responds to my query in SMART Letter #52 about whether 1 Gbyte per month is a reasonable throughput budget: "My e-mail record on my at-work system says: 0.04 GBytes/month last year in personally-handled mail 0.02 GBytes/month in unique weather data messages (sent hourly to Bay Area windsurfers) 1.50 GBytes/month when you count the 400 weather subscribers "My home Unix system (used as a remote work terminal): 1.9 GBytes/month "So even these rather heavy corner-case uses are only a few GBytes per month. Most users would be hard- pressed to get to a GByte/month until they turned on streaming video or Internet radio stations. Those could get your usage up to around 10-20 GByte/month at 24 hours/day. "In the Palo Alto Fiber to the Home Trial, we considered a service that would be limited to 1 GByte/month. I continue to believe this is a perfectly reasonable way to operate, but I can tell you from experience that it's a hard sell to consumers when you're offering a 100 Mbit/s pipe that can (in principle) use up your month's quota in 80 seconds. "For starters, we settled on an unlimited service that is 100 Mbit/s to the hub, but uses a shared 10 Mbit/s connection to the Internet. Locally-served services, such as video-on-demand, can make good use of the local 100 Mbit/s, but Internet access (where the BW gets expensive) will be limited. We have not turned on the system yet, so we can't tell how it will work out yet. "The problem is non-trivial: $100/month only pays for a *continuous* usage of about 100 kbit/s. You can get a *lot* of benefit from peak rates of 100 Mbit/s, but you have to deal with the people who will suck you dry with a server farm if you let them. "A pay-per-GByte system (like 1 GByte free, $100/GByte thereafter) will never ding most people, and charge big users appropriately. But it makes consumers (justifiably) nervous. What if you get a $1300 bill when your son leaves on the Internet radio 24 hours a day for a month? Simply cutting people off doesn't work either. "What I think is needed is to allow consumers to choose full speed access up to 1 GB/month, and then throttled BW after that. Your connection may get slow, but doesn't die. And you don't get a huge bill by surprise. I suspect this will need special support in the routers or some kind of special billing box. Anyone care to support this in their routers?" --- Harry Wilker [] adds his comments to mine regarding George Gilder's misguided call to deregulate the ILECs in SMART Letter #52: "I have been watching the new administration's rhetoric. Their predisposition to dislike all government oversight seems likely to reinforce the stranglehold the ILECS have on the local loop, with the consequence of stalling the last-mile rollout even more. Did you happen to see Powell on CNBC about ten days ago? He *sounded* like he understood the issue. He talked about requiring the ILECs to be truly competitive, but somehow I'm not yet convinced. Unfortunately Gilder's position on this seems to be the predominant conservative viewpoint -- an example of a good principle incorrectly applied." --- Ang Peng Hwa [] gives information on the history of copyrights in response to my diatribe in SMART Letter #51: "On copyright, the first use of the right to make copies was really for censorship purposes. The King wanted to control what was printed (copied). So only certain people had the right to make copies. "I appreciate your magnanimity in pointing out your own errors. Alas, few people are like you." [I pointed out my mistakes . . . but I was wrong. -- David I] --- Tom Kobayashi [] sends word of Usen, a Japanese optical access carrier: "SMART Letter #51 reminds me of the Japanese government and NTT. NTT has been very slow in allowing competitors' ADSL equipment to be installed in NTT facilities saying "there is not enough space" etc., etc. Finally, though, the Japanese government has realized that Japan is way behind the U.S., Korea, Singapore, etc., in building broadband communications infrastructure. It declared that Japan will provide broadband to the home by the end of year 2005. "In April 2001 Usen (a Japanese service provider) is going to offer in 5 Wards of Tokyo 10Mbit/s fiber services at a flat rate of less than $50! Criticized by the government and threatened by competition, even NTT is now offering ADSL services at $30/mo. I am beginning to believe that Japan could surpass the US in availability and affordability of broadband communications services. Once Japan puts the act together, it moves in the same direction quickly." [A Google search for Usen turned up an article in Slashdot that claimed Usen was selling 100 Mbit/s for US$50. The Usen Web site is in Japanese. Updates and additional information on Usen appreciated! -- David I] --- Christopher [] follows up on Chairman Powell's FCC -- SMART Letter #50: "I was reading a c|net article about Powell's first public appearance. It said, 'Powell also resisted taking a stand on the thorny issue of open access, where Internet service providers can gain access to proprietary systems such as a cable broadband network. However, his comments couldn't have warmed the hearts of open-access advocates. "''Openness is not always good,' [Powell] said. Companies need to make a profit to survive [he continued].' "'The c|net article went on. 'His sympathy for struggling companies had limits, however. Asked if there was something the FCC could do to help the independent DSL . . . Powell sounded downright Darwinian. 'Some of it is poor implementation, some of it is poor execution,' Powell said.' "So on the one hand, companies need a closed system to survive and make a profit, but on the other hand, if your company is a victim of a closed system, too bad because you are obviously executing (or implementing) poorly. I don't think Covad is struggling because it doesn't know how to implement DSL; I'm sure Earthlink isn't struggling because they have a poor execution of ISP services. No, I have to believe that Earthlink's problems are linked to its inability to build a rival cable network in twenty minutes. "Nice guy, Michael Powell. I don't think he gets it." "P.S. It seems to me that merely separating infrastructure providers from service providers would open up competition." [The separation between services and facilities is so sensible that even AT&T's C. Michael Armstrong has been advocating for it lately. Some state PUCs (e.g., Pennsylvania's) seem to be moving in this direction too. Mike Powell is a SMART Person, so I'm still hoping he sees the diametric difference between the freedom of a big company to do business as usual and the freedom of a small company to create new wealth through innovation. -- David I] ------- COMIC STRIP REALITY by David S. Isenberg When life waxed weird in my last days at AT&T, I'd vent by writing stupid essays. My friend Scatt Oddams (not his real name), reacting to identical frustrations, drew stick-figure comic strips. These were actually truer than my writing, and sometimes they were even funny too! He was freer than I was to take direct pokes at the latest absurd AT&T press release, and to mock how AT&T's execs were detached from the reality experienced by AT&T's workers and customers. Indeed, Scatt Oddams gave me new appreciation for the power of a cartoon. I haven't heard from Scatt for a long time. I hear he's a free agent now, with no time for new cartoons. But just last week he wrote to me: >David -- Check out these Web comic strips! You know >Scott McCloud? He's such a genius. His strip below >tells why anonymous on-line payment would be good for >creativity -- and hints at why certain incumbent parties >want anonymous payment to get lost and stay lost, see: > > >Also, do you know Ian Thomas? He is the US Geological >Survey cartographer who was fired by George II's oil >slickers for making maps of Alaskan caribou calving areas. >(I'm shocked(!!), shocked(!!!!!) that people get was fired >for putting scientific information on the Internet. It's >so *1984*. Ve suppressed da maps. Ve didn't vant dem to >know dat da caribou give birt where ve vant to pump oil!) >Now Ian has put the banned maps on an independent website, > Maptricks also has a link to a caribou's- >eye comic strip on oil exploration: > >Have fun! -- Scatt Oddams ------- CONFERENCES ON MY CALENDAR May 1-2, 2001, Richardson TX. Jeff Pulver's SIP Summit. I will put something together on "Why SIP is hip", scheduled for Monday 5/1, 4:30 to 5:30. Don't come to hear me, though. Come to understand why SIP is appropriate end-to-end Internet communications technology at the feet of experts like Henning Schulzrinne and Jonathan Rosenberg. Info and registration materials at May 16, 2001, New York City. I'll be speaking at about 6:00 PM at the Wharton Club of New York City. SMART People welcome! I think there might be a modest registration fee. Contact Jim Synk for more info -- July 1-2, 2001, London UK. World Technology Summit and Awards. I will be giving a keynote speech on the usual topic(s). Twenty-four awards will be made for technologic contributions in almost every human endeavo(u)r. Find out more at ------- COPYRIGHT NOTICE: Redistribution of this document, or any part of it, is permitted for non-commercial purposes, provided that the two lines below are reproduced with it: Copyright 2001 by David S. Isenberg -- -- 1-888-isen-com ------- [to subscribe to the SMART Letter, please send a brief, PERSONAL statement to (put "SMART" in the Subject field) saying who you are, what you do, maybe who you work for, maybe how you see your work connecting to mine, and why you are interested in joining the SMART List.] [to unsubscribe to the SMART List, send a brief unsubscribe message to] [for past SMART Letters, see] [Policy on reader contributions: Write to me. I won't quote you without your explicitly stated permission. If you're writing to me for inclusion in the SMART Letter, *please* say so. I'll probably edit your writing for brevity and clarity. If you ask for anonymity, you'll get it. ] ** David S. Isenberg, inc. 888-isen-com 908-654-0772 ** -- The brains behind the Stupid Network -- **