Business Week Article About ILEC Declines
Some of us have been saying this for a while, that the ILECs are not invulnerable. An August 23rd article in Business Week, The Bells' Big Local Headache by Jane Black brings some startling figures to light. This paragraph was particularly enlightening:
FALLING EARNINGS. So, even as top Bell executives blame the economy for their shortfalls, their local-phone business is eroding much faster than most observers realize. In the second quarter, the total number of local-phone lines that Verizon provides dropped 3.3%. SBC suffered a 3.8% decline, and Bell South 2.1% falloff.
Read that again carefully - those declines of 3.3%, 3.8%, and 2.1% were in a single quarter! If true, that's staggering. Black lays most of the blame on the decline to the sale of Unbundled Network Elements ("dry copper pairs") sold at wholesale prices to CLECs. This is where I differ with Black - I think the decline is far more fundamental; that customers are simply fleeing the Incumbent Local Exchange Carriers (ILECs) as their quality of service declines, prices rise, and increasingly they do not offer desired services at competitive rates. More customers have decided that wireless service is good enough and it can be their only phone service (particularly with "phone cradles" that connect multiple home phones to a cell phone in a cradle. VOIP "phone" service being carried over broadband connections are getting amazingly good, with reports of Vonage VOIP quality being better than some cut-rate long distance carriers. Businesses have been routing inter-office calls using VOIP boards in their PBXs for years - no lucrative daytime long distance office-to-office calls for those customers any more. Broadband Wireless Internet Access (of course there had to be a wireless element to this story) eliminates the need even for the "dry copper pair", so they're not even recouping any revenue for the customer that "doesn't need wireline service any more." Etc. The telecom industry has just not figured out that at current long distance pricing, it's costing them more to track the minutes and do the billing, than the revenue they're realizing! I'm certainly not the first to say this, that there's ample capacity in the Public Switched Telephone Network (PSTN)... er, 2-4% more capacity per quarter it appears, to make any call between two points in Continental US a local call. Just get this OVER with folks. Convert to an independent service provider using wireless and non-ILEC fiber now... beat the rush when they declare bankruptcy. Thanks to John Robb (linked at left) for mentioning this in his excellent weblog.
Glenn Fleishman On This Week's Starbucks Announcements About Wireless Internet Access
In his Wednesday (good!) and Thursday (superb!) [oops- now these links are correct] postings in 802.11b Networking News (linked at left), Glenn really brings out the substance of Starbucks' announcement this week formalizing their Wireless Internet Access service. Glenn brings out some subtle twists to the relationship between Starbucks, T-Mobile HotSpots, and HP that aren't readily apparent.
Mr. Stroh Goes To San Jose
I was surprised to receive a call from Scott Mace of Penton asking if I would be interested in doing a Keynote speech at the Service Networks conference (formerly ISPCon) this November in San Jose. Surprised, because Penton has lost considerable ground with ISPs, once its core audience for ISPCon and Boardwatch Magazine by missing the strong and accelerating trend of Broadband Wireless Internet Access. Scott offered me the entire hour of the Keynote, but I felt that the audience would be better served if, in addition to my talk, hearing directly from a real, "doing it now, making money at it" Wireless ISP and a representative vendor of advanced Broadband Wireless Internet Equipment. I was delighted to hear that my first picks all said Yes to the invitation:
- Philip Urso, CEO of Wireless ISP TowerStream, which operates in Boston and other East Coast markets, using license-exempt spectrum
- Patrick Leary, Chief Evangelist of Alvarion (formerly BreezeCOM) which is the largest manufacturer with the broadest product line in the Broadband Wireless Internet Access industry
- Tom Freeburg, Corporate Vice President & Director, Motorola Labs, Motorola, Inc. Motorola is the second-oldest name in communications with one of the newest, most advanced products in the Broadband Wireless Internet Access industry - Canopy.
It should be an interesting time.
MeshNetworks In Immanent Danger Of Shipping Product?!?!?!
I've been a fan of Wireless Mesh Networking since I discovered Rooftop Communications (now Nokia Wireless Routers) early in my career as a writer. The latest example the potential of Wireless Mesh Networking is some really interesting claims by MeshNetworks. With MeshNetworks technology, every user is a "relay node", so the network is dynamically extended with each user. To date, MeshNetworks hasn't actually shipped any product - concept demonstrations are nice, but the ultimate proof of concept is when you actually ship product, in exchange for dollars and have no control over how the buyer uses or abuses the product. Only when you get your hands on it can you really tell if it works, well enough, for your purposes. From the letter below that has gone out to potential MeshNetworks customers, we might soon get to see how well MeshNetworks technology works in the real world. Letter begins:
In early October, we will begin shipping our MeshLAN Developer's Starter Kit. It will have:
2 MeshLAN hardware access points
3 MeshLAN wireless routers
25 MeshLAN PCMCIA cards
Product documentation
The total price is US$5,000.
We are currently accepting orders. We will require a purchase order on/before 15 September 2002 and payment on/before 5 October in order for us to ship the kit to you in early October.
If you are interested, or have additional questions, please contact sales@meshnetworks.com
Thank you.
Allen H. Kupetz
Director of Sales and Int'l Business Development
MeshNetworks, Inc.
akupetz@meshnetworks.com
407.659.5307
Reader's Corner
Thanks to BWIA Weblog readers Bill Fujimoto and Lawrence Behr for their nice notes this week. Lawrence's was particularly poignant, pointing out that as ugly as Tuesday's entry was in IE (the entire day's entry was bold), it was worse in Netscape - all bold and underlines!
I'm In The Blogosphere!
My first Blogosphere link (that I'm aware of) was brief, but hey, it's a start. I did a Google for "Steve Stroh" and "weblog" and an archived page from Doug Kenline's BLOG AGAINST THE MACHINE weblog was listed. I'm listed under "Technology Bloggers." Doug has since considerably recast his weblog to better reflect his other interests which likely will be consuming most of his time, and the "Technology Bloggers" column is now gone. I note that Doug is a fellow graduate of DeVry Institute of Technology (he in Phoenix, I in Columbus.) Update: As I wrote this earlier today, as far as I knew, Doug's (late) link was the only one. But in short order I learned about:
- A link to the BWIA Weblog / Steve Stroh from the Service Networks page
- A nice mention and a link to the BWIA Weblog / Steve Stroh on David Sifry's SIFRY'S ALERTS weblog (linked at left)
- A nice mention (but no link - yet) on Glenn Fleishman's 802.11b Networking News weblog (linked at left)
Glenn and I exchanged serveral emails today - nice to be back in touch! I'll disclose that 802.11b Networking News was the inspiration for finally getting the Broadband Wireless Internet Access Weblog launched, after much dithering and many minor frustrations with Radio Userland.
Reply To Doug's Questions / Points:
Doug wrote in his weblog on July 2, 2002 (sorry... didn't hear the question then - but I've since started including an easy-to-click comment link at the bottom of each entry):
Ok, after more reading on the Motorola Canopy it looks great. And it appears that Steve Stroh thinks that Canopy in combination with Vonage will give people basic telephone service. I do not see how Vonage is able to work without help from the local telephone company. Otherwise, why would Vonage say they are only available in certain area codes?
To me area code means local telephone company. If Vonage, or any product, could provide basic telephone service without help from the local telephone company, for example as mentioned above, Vonage plus Canopy, not only goodbye Federal Communications Commission with the unlicensed spectrum technology, but also goodbye local telephone company. This would all be too good to be true of course. And why don't the big phone companies do it themselves? Investigating at this time.
Answer:
Doug's question is about Canopy and Vonage, but I'll relate my answer in generic terms. The fundamental technology is TCP/IP, which is proven to be almost infintely flexible to low and high speeds, all medium of transport, and all manner of applications, as well as scaling and evolving gracefully. I feel strongly that Broadband Wireless Internet Access technology (of which Motorola Canopy is a good, but by far not the only example) is often the sanest, fastest, most cost-effective way to construct a TCP/IP infrastructure.
Riding on top of that infrastructure can be all manner of applications, including Voice Over IP (VOIP) technology ((of which Vonage is a good, but by far not the only example.) VOIP is inherently a peer-to-peer technology because of its use of TCP/IP. It's possible for a VOIP phone to "dial" any other VOIP phone without necessarily requiring the use of a centralized system - phone switch, PBX, etc. It's probably possible to "dial" an IP address of another phone - 16 digit dialing - 044.024.110.015. So... centralized systems are convenient for "directories" or "lookups" since TCP/IP addresses aren't that intuitive to humans.
With me so far, I hope. It's about to get interesting. VOIP is being done daily that entire companies, organizations, and now consumers are being connected via VOIP phones via the Internet or Intranet. When they need to talk to another person on their network (or, in the case of Vonage, any other Vonage customer, anywhere in the world via the Internet), it's a TCP/IP only connection - no interconnection with the Public Switch Telephone Network (PSTN) required. If you do wish to talk to someone on the PSTN via your VOIP phone, an interconnection is required, and that's what Vonage is providing, to consumers, for the first time in a reliable manner. Also notable about Vonage is that the adapter they send you adapts multiple "conventional" phones - it becomes your "Line 1" or your "Line 2".
The interconnection, since it mostly "lives" on the Internet, can be located anywhere it's convenient. The "phone numbers" for Vonage users are merely a convenient bridge between the PSTN and VOIP users. So to finally answer Doug's question, yes, a Switch is required for interconnection with the PSTN, but it can be located anywhere. (A Vonage rep told me that although Vonage advertises as a US-only service, requires payment with a US credit card, shipment only to US addresses, Vonage is finding their phones to be located in interesting places... like India, South America, and China.
Comments are always welcome!
7:27:06 AM 
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