Telcos need to stay away from financial wizardry


English: Nortel IP Video Phone 1535

English: Nortel IP Video Phone 1535
(Photo credit: Wikipedia)

By George Mattathil – Forbes article, AT&T-Backed Report Prompts Question: Should The U.S. Get Rid Of Phone Lines? by Elise Ackerman, takes a refreshingly accurate take on the issues involved — rarely seen in the mainstream media.

When evaluating the phone networks, explosive growth of IP-based video traffic is “not particularly relevant since video is not an alternative to phone calls.”

There are three primary data types – voice, data, video. Each has its own unique characteristics, and cannot substitute another. Developments in digital technologies allow transporting voice, data and video over packet networks. As the article points out, correctly, that is not the same as deciding how best design networks — illustrated with an example.

We have cars, buses, trains, airplanes, ships, spacecrafts, etc. for different modes of transportation. But nobody argues that we should build flying cars to replace all modes of transportation. Networks should be build in the same manner. Different data types have different performance requirements, and build networks to best meet those needs.

The unthinking affinity for the Internet is an after effect of the dot-com-bubble. One side effect of the bubble was the Telecom Meltdown and dissolution of Nortel and Lucent as the de facto telco technology providers. This has placed the US telcos in a pickle, as the telco systems with innovations and ingenuity spanning more than a century, since Alexander Bell made the first phone call in 1876, cannot be replaced easily.

Financially driven decision-making started with the original-AT&T decision to keep the then profitable long distance and divest the technology (Lucent, Avaya, Agere) and the customer-connecting access networks (Baby Bells.) AT&T followed it by another disastrous decision to buy TCI cable network and spinning it off to Comcast, losing billions in the process. The result was one of the reconstituted Baby Bells, SBC, bought AT&T and renamed itself (current at&t.)

As Steve Denning points out, it is high time telcos realized that their mission is building and operating networks, and stay away from financial wizardry — which has cost them dearly.♦

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