SMART Letter #77
Telephony Future Here Now
October 14, 2002

            SMART Letter #77 -- October 14, 2002
            Copyright 2002 by David S. Isenberg
    - "the end of the middle" -- -- 1-888-isen-com

>  Telephony Future Here Now
>  An Even More Personal Wi-Fi Connection
>  Smart Remarks from SMART People
   + Yuan Lee on Gilder's view of China
   + Adina Levin with more on the Chinese economy
   + Laurence Brothers on Pirates!
   + Craig Harrison has deja vu in a company meeting
   + Fred Goldstein on revisionists and the Telecom Act
   + Don Sledge on ways government could screw it all up
>  Antidisembarrasmentarianism
   + *blush* -- it's Tauzin-Dingell, not Hollings-Dingell
   + *blush* -- the U.S. Congress
>  If it's Funny it Must be True, by Scatt Oddams
>  The trans-Pacific tour
>  Conferences on my Calendar
>  Copyright Notice, Administrivia


The future of voice telephony has arrived.  It is not 
evenly distributed yet, but it won't be long.  I heard it 
at VON 2002 (Voice on the Net, in Atlanta this 
week.  I'm talking about a telephony program that runs in a 
vanilla Compaq Ipaq palm-sized device with a vanilla 
802.11b wireless connection to the vanilla, unmanaged, 
public Internet.  It uses plain old headphones and the 
Ipaq's on-board microphone.  It runs with Microsoft's 
Pocket PC operating system.

It sounded great -- better than toll quality, better than 
the public switched telephone network.  There was no 
telephone company in the loop (no dial tone, no service, no 
features, no billing) beyond pure Internet connectivity.  

In the test call I made from Atlanta to another device 
running the software in San Francisco (about a dozen router 
hops), the voice of the fellow at the other end was crystal 
clear.  There were no echoes and no audible glitches.  The 
delay was just noticeable to my fairly experienced ears.  
This delay -- unlike other software-only Internet telephony 
I've tried -- was not enough to interfere with the dynamics 
of the conversation.  

It sounded great, in part, because the telephony software 
resolves 8 kHz of audio, versus 3 kHz for conventional 
telephony.  (In contrast, AT&T's TrueVoice project, in 
which I participated, spent countless millions of network-
upgrade dollars and countless person-years of technical 
effort to stretch the 3 kHz telephone spectrum by just a 
few percent.)

According to Global IP Sound, the 15-person company that 
produces the telephony program (, the 
program codes speech at a variable data rate, averaging 
about 80 kbit/s.  This is too fast a data rate for dial-up, 
but would in principle work fine for most DSL and cable 
modem hookups.

Global IP Sound has combined a lot of techniques to reduce 
audio quality losses from Internet packet arrival-time 
jitter, data errors and packet loss.  They call this 
combined effort "Edge QoS."  (For this alone, I gotta love 
'em.)  According to standard Mean Opinion Score tests, the 
data stream can endure 10% to 30% packet loss before speech 
quality falls to the level of plain old telephony.

To me, it was a thrill to talk on the Ipaq and walk around 
the VON exhibit floor only because I knew that there was 
nothing special about the system -- except the software.  I 
could easily get used to it. 

In principle, the telephony software could run on any 
platform.  Versions of it were running on several different 
laptops and desktops at VON's Global IP Sound demo.  The 
version that does 8 kHz audio in 80 kbit/s is relatively 
low-complexity, so it could even run in inexpensive 
processors in telephone-like appliances.  

But the integration of SIP with Global IP Sound's program 
could be awesome.  Indeed, Nortel has announced such an 
effort (see  In June, 2001, I 
wrote a White Paper for Microsoft on its Windows Messenger 
SIP platform (see  I really liked 
the presence-based integrated communication application, 
but in fairness, the voice demo I got ran over an internal 
LAN.  The voice quality problems that Global IP Sound has 
solved on the wild, wooly, public Internet are hairy ones.  
I wonder if Microsoft's voice coder could be so robust.  
When I tried Microsoft's own Ipaq-plus-802.11 
implementation six months ago at VON in Seattle, I was 
intrigued by the possibilities, and I considered writing it 
up for the SMART Letter, but long delays killed the 
experience.  Microsoft had no similar demo at this most 
recent VON.

I have no business relationship with Global IP Sound.  But 
I knew co-founder Bas Kleijn when we were at Bell Labs.  I 
last saw Bas in 1996 in the Bell Labs Murray Hill parking 
lot.  He told me he was quitting to take a professorship in 
Sweden, but he said nothing about founding a company or 
inventing the future.  Bas, congratulations, my hat is off!

The arrival of better-than-PSTN telephony brings to the 
foreground issues that I've been raising for several years.  
One speaker at VON said that the telcos were still making 
more money from voice than from data, even though, by all 
accounts, data traffic has surpassed voice traffic.  The 
Global IP Sound application has the potential to divert 
even more high-profit minutes away from the voice business 

The incumbent telecom industry is in financial trouble 
already, from buying equipment that has now been made 
obsolete by technological advances.  Robert Pepper, the 
head of the U.S. FCC's Office of Plans and Policy, said at 
VON that telephony has a lot of built-in cross-subsidies: 
business subsidizes residential telephone service, long 
distance subsidizes local telephony, and urban subsidizes 
rural telephony.  The FCC's conscious policy direction for 
years has been to equalize these subsidies gradually.  
Perhaps one could say that voice has been subsidizing data 
too, but I prefer to think that the data market, because it 
has arrived lately, has developed in a more market-based 

But any way we look at it, the success of Global IP Sound's 
end-to-end telephony will speed the arrival of the future 
and the telcos' demise.  

by David S. Isenberg

I am old enough to remember when telephone answering 
machines were an exception.  When they first appeared, I 
was miffed when I got an answering machine instead of plain 
old ring or plain old busy.  Then, gradually, answering 
machines became popular enough to be expected gear: I was 
miffed when the called party *didn't* have an answering 

Wi-Fi (or 802.11b) is following this trajectory.  I've 
begun to expect Wi-Fi wireless Internet connectivity at 
meetings.  Today, not having Wi-Fi at your meeting is 

VON 2002 in Atlanta was the first conference that I've been 
to where I've had Wi-Fi at the conference proper and in my 
hotel.  At the conference, it was free, supplied by  In the hotel, it cost US$10.00 a night; the 
supplier was V-Link -- -- which is 
gradually installing Wi-Fi in all Embassy Suites hotels.

While the hotel's Wi-Fi worked fine, some kind of billing 
system glitch kept logging me off every few minutes.  I 
contacted the V-Link service number, and (surprise!) a 
real, live person answered almost immediately.  Plus he 
wasn't yet-another-tier-one-put-you-on-hold-we-don't-
support-that droid, he actually knew what he was talking 

We were chitchatting while my machine rebooted, and I 
discovered that he was V-Link's general-purpose technician 
on call that night.  I had interrupted his Wi-Fi 
installation in an Embassy Suites in Missouri.  Then he 
asked if I ever brought my laptop on an Alaska cruise.  
Bingo.  I had met Brian Mathison three years before, at 
Soapy's Internet Station in Ketchikan.  

Now there are eight Soapy's Internet Stations, located 
where cruise ships dock and at other up-scale travel nodes.  
Clearly, V-Link understands where sweet spots exist that 
make otherwise-outrageous fees like US$10.00 per day a 
genuine deal.  Even as the big telcos fail, I'm betting 
that thousands of entrepreneurial companies like V-Link 
will keep building the Internet revolution.  

[I have no business relationship with V-Link except as a 
satisfied customer, and it seems that I now have a friend 
there, too.]


Yuan Lee [] writes:

  "Gilder's enthusiasm toward China is a bit late.  The
   market usually does not reward but instead punishes 
   the latecomers . . . It's now time to earn in China 
   not time to start learning."

[Yuan was also at Telecosm.  He wants us to know that the 
above is his personal opinion, not Morgan's, Stanley's, 
Dean's, Witter's or Discover's. -- David I]

Adina Levin [] writes:

  "There are interesting signs that the glowing facade of 
   Chinese economic growth in southern manufacturing and 
   financial centers hides growing decay in the government 
   and the hinterlands.

  "Have you seen this Foreign Affairs article 
   [], which talks about creeping 
   decay in Chinese governance?  Also, here's an older 
   Economist article [] that talks 
   about Enron-sized flaws in the Chinese economic growth 

[Adina posts her blog at -- David I]

Laurence Brothers [] writes:

  "Pirates!  If you don't mind the fact that they were 
   indiscriminate murderers, outlaws of the purest type, 
   sure they caused progress.  So did influenza.  If at 
   some point pirates actually had more weatherly vessels 
   than warships, they certainly used their maneuverability 
   to flee when they saw a warship's masts on the horizon. 
   I wonder if there are any historical examples of pirate 
   attacks on warships (not just on boats).  I suppose 
   there must have been some, but few and far between.  

  "Certainly, navies followed the bigger-is-better 
   approach.  However, it turned out that bigger *was* 
   better.  Large armed merchants such as galleons and 
   Indiamen were almost immune to piracy.  Had the English 
   decided in 1800 that frigates were much more effective 
   than ships of the line due to their lower cost and 
   higher speed and maneuverability, today Napoleon XV 
   would be deciding our telecom policy. Considering the 
   power of the modern carrier task group, I'd say that's 
   still the case today.

  " I don't extend the naval analogy to the business world, 
   in which it is obvious that that large companies are 
   much slower, stodgier, and less efficient than small 

[Bucky Fuller never said that pirates defeated royal 
navies, only that they invented ways to outsail them and, 
in so doing, they both (a) avoided being attacked and (b) 
advanced the technology of sailing and technology 
generally.  And I never said that pirates were gentlemen or 
that they were any more pleasant to be around than 
influenza.  In fact, I find it ironic that the same 
industry that gave the pirate meme cutesy cartoon appeal 
now wants to vilify its enemies as pirates. -- David I]

Craig Harrison (company name withheld) writes:

  "In a meeting yesterday there was a presentation by the 
   'Strategy Team' to the 'Network Deployment' team.  They 
   talked about roadmaps, targets and strategies; they 
   discussed IP convergence, IPV6, 802.11a, Voice over IP, 
   IP telephony, and a host of other techno-terms.  They 
   were describing the new network capabilities we should 
   be moving towards.  As I listened to them (preferring to 
   stay on the perimeter of the discussion), I kept getting 
   this 'deja-vu-like' feeling that I've heard this before 
   . . . 75 SMART Letters later, they're describing the 
   Stupid Network to a tee.  But I didn't dare tell those 
   people that their network was stupid -- I just didn't 
   feel like committing political suicide.  The good news 
   is that they're getting it -- optimism exists in swirls 
   of frustration and gloomy fog that surrounds . . ."

[Craig, I am living proof that there is abundant life after 
political suicide.  But even though it worked for me, your 
mileage may vary -- David I]

Fred Goldstein [] sends a pointer to a 
C|Net story he wrote which says, in part:

  "The Telecom Act was a response to regulatory friction 
   that limited innovation. The old monopolies, saddled 
   with slow depreciation schedules, had little incentive 
   to disrupt their franchises with new services. But the 
   legislation created a more normal marketplace for local 
   services. Revisionists are just confusing the issue when 
   they take aim at the Telecom Act."

[see for the REST 
of the story.]

Don Sledge [] writes:

  "When you say that we should run the connectivity as
   a common good, I take it you mean some sort of a 
   monopoly owner, perhaps even the government.  I'm a 
   pragmatist (primarily because I'm not smart enough to 
   think of original solutions) and I have had some 
   experience with the model of a common infrastructure and 
   competing content providers.  I once had a lot to say 
   about a rather large carrier and how it operated.  We 
   decided to organize the basic infrastructure into a 
   company with a common set of assets (the long haul 
   network including domestic facilities and trunk switches 
   and international facilities and switches.)  Local 
   facilities and switches were left to local operating 
   companies, not exactly what you advocate but close.  
   This led to all sorts of debates like who decides on how 
   much to build?  And since there is usually some demand 
   that's not going to be met who decides where the pain 
   points will be.  

  "Content providers had to forecast their requirements 
   months or even years in advance so the infrastructure 
   owner could build to meet their needs.  Innovation was 
   introduced to the market when the infrastructure owner 
   desired to spend the capital not necessarily when the 
   users wanted it.  As we know now this system tended 
   stifle innovation and inhibit new products and services 
   from being introduced.  (Sort of the golden age for 
   pragmatist.)  Since there was no end to end owner 
   service problems were frequently passed back and forth 
   between the content companies and the infrastructure 

  "I applaud the idea that someone wise and benevolent 
   would provide infrastructure where we need it, when we 
   need it and improve it and service it as the market 
   demands.  Unfortunately the pragmatist in me says, 'Not 
   bloody likely.'  Any imposed structure like this will 
   create its on set of problems.  

  "We need to develop the last mile -- as you know, this is 
   one of the problems that vexes me the most.  But I'm 
   afraid we're just going to watch and wait as the market 
   sorts it out.  The government process will inhibit 
   progress for a time but in the end the market will 
   provide the solution and is already doing so.  There is 
   a fiber company here funded by private equity providing 
   infrastructure to a few thousand.  There is a power 
   company there doing the same thing and in some cases 
   even city government is stepping in to build out the 
   infrastructure needed to make the city more competitive 
   for new businesses.  

  "Even the ILEC'S and some competitive carriers continue 
   to build or overbuild to provide broadband service.  
   Many of the incumbents use interim technology (defined 
   as anything that's not fiber.)  But the increased speed 
   and usability is viewed as progress to the customer none 
   the less.  

  "The above is patch-worked at best but likely the only 
   way it will get done.  Along the way we'll see 
   innovation and technological change that will create 
   different solutions for the last mile that will be less 
   than optimal.  However, I believe that a mandated 
   connectivity solution would create a whole slew of new 
   problems an only lead to another break up in the future.

  "[If you print this,] remember I'm a dumb-*ss old pole
   climber not an essay writer or critical thinker."

[Don, for an old pole climber, you write good and think 
good -- I bet you didn't grab both electric wires at the 
same time more'n once.

I certainly agree that you have painted one scenario for 
how a monopoly build-out can fail -- a very logical and 
pragmatic scenario.  I also agree that the city-here, 
utility-there approach is a scenario that we see playing 
out today.  It is important that our laws permit cities 
and utilities to continue to do this.

Two things have the potential to change some of the 
squabbling you saw:
  1) the infinite capacity of fiber, instantiated by 
     the ability to light a couple of miles of fiber 
     at a gigabit for about U.S. $2000-3000 capex.
  2) the true end-to-end nature of IP.  The idea that 
     the network stack does not depend on the telco, 
     that it sits in my device, right under my fingers,
     and that any computer-literate high school kid can
     hook up an IP LAN.

Once the fiber gets to my house, there's enough.  Because 
it has infinite capacity, there will be no squabbling for 
more.  If the endpoint owner wants more, she can re-light 
her fiber or assigned wavelength with faster gear.  But the 
putative monopoly MUST stop at fibers or wavelengths.  If 
the monopoly tries to climb the value chain to enter the 
user's network stack, they're done.  Even lighting the 
fiber could be going too far.  The speed at which the fiber 
runs should be between the user and the competitive service 

So that's another scenario.  -- David I]


My Mistake:

   In SMART Letter #76, I mis-named the bill before the 
   U.S. Congress that would free incumbent local telcos 
   from most competitive pressures.  I called it the 
   Hollings-Dingell bill.  It is really the Tauzin-Dingell 
   bill.  I have corrected the online version of SMART 
   Letter #76 at

   Senator Hollings actually opposed the Tauzin-Dingell 
   bill.  He called it, "Blasphemy," in a February 2002 
   speech on the U.S. Senate floor.  On one hand, Senator 
   Hollings might speak for network competition, but on the 
   other hand he has authored an anti-copying bill (named 
   SSSCA) that would cripple all network endpoints.  Let me 
   propose a compromise: a network with no competition that 
   is not capable of carrying anything.  I bet 100 U.S. 
   Senators would support that one.

More Congressional Embarrassment:

   Speaking of the U.S. Congress, I am embarrassed and 
   ashamed that my own elected representatives voted in 
   favor of George Bush's unilateral desire to attack Iraq 
   on the eve of the trans-Pacific tour.  How will 
   I be able to look citizens of other countries in the 
   eye without apologizing for my government?  Fortunately, 
   the vote was not unanimous: 32% of the House and 40% of 
   the Senate voted against more war power for Bush.  Some 
   pundits are worried about the effect of an attack on the 
   so-called "Arab Street."  As the unjust basis for the 
   proposed attack becomes ever more obvious, I think the 
   "U.S. Street" could soon become an active site of 
   participatory democracy.  May the eternal almighty 
   powers have mercy and forgiveness.

by Scatt Oddams

Dan Gillmor pointed me to one that'll 
make the milk come out of your nose:
Gotta go,


[Note: Even though the route is now stable and the timing
is probably stable, not all of these dates or engagements
are confirmed at press time.  I'd like to meet as many
SMART People as possible enroute -- if you're free to visit
(and especially if you have something constructive for me
to help with!) please send email -- David I]

  + WED 13 NOV TO SUN 17 NOV: India (schedule starts in
    Madras, but mostly TBD)
  + TUE 19 NOV TO SAT 23 NOV: Tokyo (Glocom conference on
    21 Nov, other events TBD).
  + MON 25 NOV AND TUE 26 NOV: Singapore, talk at Nanyang
    Technological University.
  + WED 27 NOV AND THU 28 NOV: Melbourne, talk at Monash
  + FRI 29 NOV: Wellington NZ: CityLink.
  + SAT 30 NOV TO SUNDAY DEC 8: New Zealand, TBD.


October 8-10, 2002, Atlanta GA.  Fall VON.  I'll be giving
an Industry Perspective talk at 10:45 AM on Thursday,
October 10, 2002.  See

October 15-17, 2002, New Orleans LA.  Fiber to the Home
Council Annual Conference.  I'll be chairing a panel on
FTTH feasibility studies. for

October 22, 2002, Boulder CO.  University of Colorado at
Boulder.  I'll be speaking to Dale Hatfield's graduate
telecom seminar and guests, 4:00 to 5:20 PM.  Contact for details.

October 23, 2002, Berkeley CA.  University of California at
Berkeley.  I'll be speaking to John Zysman's and Steve
Weber's class, "Governance of the e-conomy" and guests from
the Berkeley Roundtable on the International Economy.
Contact Genevieve Taylor [] for
more information.

November 8, 2002, New York.  (Note the correct date is
*not* Nov. 7!)  Marconi Foundation Award Conference.  Tim
Berners-Lee will get the Marconi Award.  I'll be speaking
about the intelligence at the edge that makes the World
Wide Web possible on a panel led by fiber optic pioneer
Charles Kao; My co-panelists will include Andrew Viterbi,
Rashimi Doshi, Len Kleinrock and Tim Berners-Lee.  For more
information, contact Darcy Gerbarg, 212-854-7676,

November 11, 2002 to December 8, 2002 -- trans-
Pacific Tour.  See above.

December 9 - 10, Palo Alto CA.  Supernova, a Kevin Werbach,
Jeff Pulver collaboration starring Sergey Brin of Google,
Doc Searls, Clay Shirky, and yours truly.  No website
yet, but watch for the appearance of or
contact Kevin Werbach, for more info.

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 2002 by David S. Isenberg -- -- 1-888-isen-com 

[There are two ways to join the SMART List, which gets you
the SMART Letter by email, weeks before it goes up on the web site.  The PREFERRED METHOD is to click on and supply the info
as indicated.  The alternative method is to 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 quit 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                       203-661-4798 
     -- The brains behind the Stupid Network --