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SMART Letter #17 - March 1, 1999
The brains behind The Stupid Network
Copyright 1999 by David S. Isenberg
isen@isen.com -- http://www.isen.com/ -- 1-888-isen-com
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CONTENTS:
> News I Missed: Supreme Court neuters CLEC entry strategy
> Lead Essay: Is QoS Necessary? AT&T Researcher finds KISS
> Quote of Note: Kevin Werbach
> Roles of a 'sultant
> Quote of Note: Ted Turner
> Conferences on My Calendar, Copyright Notice, Administrivia
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NEWS I MISSED: SUPREME COURT NEUTERS CLEC ENTRY STRATEGY.
By David S. Isenberg
The U.S. Supreme Court has gutted the Baby Bells' 1996 Telecom
Act obligation to sell unbundled network elements (UNE) to
Competitive Local Exchange Carriers (CLECs). Resale used to be
the linchpin of most CLECs' strategy when they expand into new
territory. Now the strategy is on shaky legs. The Court's
decision makes resale, in the words of Justice Scalia's majority
opinion, "largely academic."
Skimming headlines, I missed critical details of the Court's
January 25 decision, which was widely reported to affirm the
FCC's role in defining the terms of the Telecom Act.
Fortunately, SMART People like Bruce Kushnick are on the case!
(Also, see the Wall Street Journal, Feb. 12, 1999, "Established
Local-Phone Firms Use Ruling's Fine Print to Foil Upstarts," by
Kathy Chen.) I spent the weekend reading, and rereading the
fine print of the Court's opinion, and here's what I *think* it
says:
The Court did, indeed, affirm the FCC's role. But in the same
pen stroke it also "vacated" Rule 319 of the Telecom Act, which
defines the minimum set of UNE. The crucial language from the
Telecom Act is in 251(d)(2) "In determining what network
elements should be made available . . . [the FCC] should
consider whether . . . (B) the failure to provide such network
elements would impair the ability of [a CLEC] to provide the
services that it seeks to offer."
The Court's opinion hinges on the use of "impair" above, and on
the fact that some UNEs might be available from other sources
than the RBOC. It says that the FCC was unreasonable when it
said that "delay and higher costs for new entrants" was
impairment. It said that the FCC "cannot blind itself to the
availability of elements outside the incumbent's network."
With this suggestion - that CLECs are not impaired if they can
get network elements from sources other than the RBOC - the
Court's then "vacates" rule 319. I think that means it sends
319 back to lower courts for more interpretation.
It is as if the Court said, "Your ability to get from point A to
point B isn't impaired by lack of a whole car. After all, you
can get an engine, tires, etc., on the open market. The extra
time and cost for you to build the car from parts isn't
'impairment'." Yeah, right.
The overall intent of the Telecom Act, to open up local markets
to competition, has been set back!
Incumbent LECs seem to agree. On February 4, Hyperion, a small
CLEC was set to begin service in the Maryland market, but Bell
Atlantic would not sign an interconnection agreement making it
possible. Nextlink's pending pact with GTE is also stalled.
Kathy Chen points these out in her WSJ, Feb 12, 1999, article on
the Supreme Court decision.
All but the deepest-pocketed CLECs depend upon resale to open
new markets. Customer acquisition is a gradual process, so a
new network in a new territory is guaranteed to lose money until
a critical mass of customers has been recruited. CLECs use
resale to do this. If the current situation endures, only the
big, rich, facility-building giants will be able to enter local
markets. Score a big one for the Supercarrier scenario.
[In Justice Scalia's words, "The Telecommunications Act . . .
[is] a model of ambiguity or indeed even self-contradiction."
Furthermore, several SMARTer People than myself jumped all over
one of my previous "insights" into the Telecom Act. Mine ain't
the final word, not by a long shot! Please lemme know alternate
views to the above . . . read the Court opinion yourself (great
fun) at http://supct.law.cornell.edu/supct/html/97-826.ZO.html ]
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IS QUALITY OF SERVICE NECESSARY? AT&T drives to control net via
technology but AT&T Labs researcher finds simpler is better.
By David S. Isenberg
Box: [Simply adding bandwidth could turn out to be the cheapest
approach.]
AT&T carries the burdens of incumbency in a world exploding with
disruptive technology. My concept of a Stupid Network tries to
explain the disruptions that telcos must face, but AT&T still
doesn't seem to get it.
Recently Dan Sheinbein, AT&T's vice president of network
architecture & development, told the Star-Ledger (Newark, NJ)
that the Stupid Network has "not been a particularly active area
of discussion" at AT&T lately. Even more recently, Sheinbein
told me, "On balance, AT&T's network is getting smarter."
To me, the Stupid Network - the dumb transport component of
people's applications, designed simply to "deliver the bits,
stupid" - is a consequence of the new abundance created by
technology's headlong spurt. It's enabled by the Internet
Protocol (IP). (See http://isen.com/ for details.)
AT&T Chairman Mike Armstrong says he's embraced IP, but his
strategy is clearly "intelligent." He says that if AT&T
controls the interfaces, specifications, protocols, standards
and platforms of the network, it can weave them into a set of
seamless services. If AT&T could pull this off, it would be
able to hold back the rising tide of commoditization and reglue
the delaminating value proposition. But to do that, somehow
Armstrong would have to get AT&T back into the equipment game,
stamp out IP, and repeal Moore's law.
THE APPARENT NEED FOR QUALITY OF SERVICE
At the edge of Armstrong's awareness, AT&T Labs mathematician
Andrew Odlyzko is researching the economics of networks. He is
no Stupid Network ideologue. In fact, he used to believe that
the Internet needed such "intelligent" complications as Quality
of Service (QoS) and differential pricing. Both of these make
networks treat different kinds of data differently.
But now Odlyzko's research has led him to the conclusion that
simpler is better. Odlyzko, who came to Bell Labs Research 23
years ago straight from his MIT doctorate, has convinced himself
that simply adding bandwidth could "turn out to be the cheapest
approach when one considers the costs of QoS solutions for the
entire information technologies industry."
Internet telephony, introduced in 1995, made the apparent need
for QoS acute. Until then, Internet traffic consisted of email
and file transfers, and then web page information. For these
applications, fast transmission is nice, but delays do not make
them unusable. Not so with Internet telephony - people just
can't have conversations when there's more than a few hundred
milliseconds of delay.
Differential pricing is the first cousin of QoS. If you have
different levels of service, you need some motivation for people
to use the lower-grade service. Otherwise, the argument goes,
people will always use the best service whether they need to or
not.
But now Odlyzko thinks that even simple QoS schemes may be too
complex. Two years ago, he proposed a very simple QoS plan. It
used only differential pricing. He called it Paris Metro
Pricing (PMP), after the Parisian subway system of letting
people who pay more ride in "first class" cars. These cars are
physically identical, but less crowded only because they cost
more. In Odlyzko's vision, a PMP Internet would have two
identical, parallel channels, and one would be designated "first
class." It would cost more, so it'd have less traffic and
provide better service. But Odlyzko now says that administering
parallel channels would add more complexity than users or
service providers desire.
100 LANE HIGHWAY, A FEW FAST CARS
Lightly loaded networks don't need QoS. They're adequate even
for Internet telephony. Odlyzko found that on most data nets,
traffic is surprisingly light. (His analogy for the typical
corporate Intranet is "a 100-lane highway [for] a few fast
cars.") Also, he says, other work showed only 40% of Internet
congestion is due to transmission bottlenecks, and only a very
few choke points are to blame.
As intelligence migrates to the edges of the Internet, so does
network administration, Odlyzko says, "where it is wastefully
duplicated," at great expense because it requires human
expertise. He concludes that, "The complexity of the entire
Internet is so great, that the greatest imperative should be to
keep the system as simple as possible. The costs of QoS or
pricing schemes are high, and should be avoided . . . we should
seek the simplest scheme that works . . . "
And that simplest scheme, Odlyzko says, involves flat rate
pricing and over-provisioned, lightly loaded networks with a
single grade of best-effort service. This scheme takes
advantage of rapidly improving routing and transmission
technologies, and it doesn't mess with any of the properties
that made the Internet great. But it'll be a hard one for AT&T
to control.
[The article above appeared as Intelligence at the Edge #7,
which is Isenberg's monthly column in America's Network, on
March 1, 1999. Odlyzko's work can be found at
http://www.research.att.com/~amo/. Isenberg (http://isen.com/)
thanks Jock Gill (http://www.penfield-gill.com) for comments on
an earlier draft. Copyright 1999 Advanstar.]
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QUOTE OF NOTE: KEVIN WERBACH
"@Home, cable operators and AT&T claim that they need the
vertically integrated access model to recoup their
infrastructure investment [e.g., in modernizing the TCI network
- David I] . . . they see an opportunity to build an integrated
applications suite on top of the coaxial cable pipe. . . . The
trouble with this vision is that it's not the Internet. . . . it
leaves little room or incentive for third parties to develop
innovative applications and services on that platform . . .
unplanned innovations . . . will be less likely in [this]
integrated world . . . "
From "The Architecture of Internet 2.0" by Kevin Werbach in
Release 1.0, February 19, 1999.
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ROLES OF A 'SULTANT:
A SMART Person, name withheld by request, 'sulting for a large
non-North American telecom equipment manufacturer, comments on
the various roles of the 'sultant.
" . . . It's not that one can not express an opinion [on my
current 'sulting job], we are quite free to do so. The
corporation prides itself on our open dialogue and consensus
building processes. . . . Consensus building usually entails
lengthy and spirited discussion until everyone finally agrees
with the boss and/or the recommendation from Headquarters."
The same SMART Person then offers:
Scapesultant - A Consultant who is hired because he agrees with
(and will document support for) a specific plan or decision
(usually already in progress or committed) in order that if/when
it all goes wrong, management has someone to blame.
Exprosultant - A Prosultant who is seen as Insultant, and is
then encouraged to join the other Consultants, or the ranks of
the unemployed. [This is subtly distinct from Exultant -
somebody who, finally released from the degradation of
employment without emotional alignment, becomes ecstatic. -
David I]
[Prosultant and Prosulting are service marks of isen.com, inc.
If you'd like to call yourself a Prosultant, I'll give you a no-
charge, no-expiration license to do so, see
isen.com/prosultant.html. All the other neologistic tomfoolery
is in the public domain, as far as I know. - David I]
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QUOTE OF NOTE: TED TURNER
"I was sitting next to the president of Poland yesterday at
dinner -- he makes two thousand dollars a month! So I asked him
how he gets by on so little. And he says, Well, I just keep
looking at the president of Romania -- he only makes four
hundred dollars a month."
Ted Turner at World Economic Forum, Davos Switzerland, quoted by
Tony Perkins' Red Eye, Feb 3, 1999.
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CONFERENCES ON MY CALENDAR
GBN PRESENTS . . . "Incumbency, Intelligence, Innovation
and Internet Telephony," by David S. Isenberg, Principal
Prosultant(sm), isen.com, inc., March 24, 1999, Emeryville CA,
for more information contact GBN at 510-547-6822 or email
nmurphy@gbn.org.
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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 1999 by David S. Isenberg
isen@isen.com -- http://www.isen.com/ -- 1-888-isen-com
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Date last modified: 18 April 99