Time to Redefine Telecom

Telecommunication, according to Wikipedia, is the extension of communication over a distance. In practice, it also recognizes that something may be lost in the process; hence the term 'telecommunication' covers all forms of distance and/or conversion of the original communications, including radio, telegraphy, television, telephony, data communication and computer networking.

While defining telecom gets more and more difficult, the profit and ethics behind the business keep on diminishing. SBC spent $16B to a company whose revenue stream is declining more than 10% year over year. Verizon bought MCI, and in order to make deal lucrative, they say they will layoff over 7,000 people.

The reason for scaling-down in telecom is that the technological advancement has terribly been focused on communications. We all owe a thank to nineties for that... Lots of technical people has seen the future in Telecom and made huge amounts of mind investment to the business. Today, we are forced to live in an overly competitive industry where telecom is forced to be cheaper everyday. To make matters worse, a company called Skype appeared. This global P2P Telephony Company decided to make old fashioned definition of telecom a commodity through its software, which allows you to make free calls over the Internet. Other emerging companies like Net2Phone and 8x8 also flocked customers to make cheaper (sometimes free) calls.

Some traditional telecom companies have kept an awry eye on those start-ups while adopting technologies like VoIP. They mostly thought those new technologies are something to monitor and investigate. In other words, they are disruptive. Some assumed the danger and started firing QoS bullet, as those startups do not provide top-notch service like incumbents do.

The fact of the matter is, none of those business plans will hold true should they are based on making money on calls. Like Michael Powell said, "I knew it was over when I downloaded Skype..."

So, can we say that telecom is a commodity?

My answer would be no, if network providers accept to change their musty mindset. Three things are important if the full background of this new notion is to be understood. First is, telecoms exist to provide infrastructure. The rest needs to be handled by networking and computing companies.

The need for voice, video and data are going hand in hand. There is no value in them when there is no Internet. That's why, the second is, the new business plan should be based on the Internet access. If telecoms want to survive, charging customers packet-based with the guarantee of excellent QoS is the only way to go. MPLS is their material to make this happen.

This way, optimization, the biggest concern of telecom industry, can be solved as the packet usage can be approximated. Demoting VoIP into an application to where it originally is can be doable in packet-based model. This new model will also disallow fighting against free-of-charge models and bring a fresh breath to network providers to generate more revenue.

Third is, not only the ability of optimization but also the prioritization and security of the traffic, if needed, will let network providers to put extra cash to their pockets. The money behind the content will not be their ball game.

Some may argue that there is no incremental cost of extra usage of packets to a network so the value behind tracking the traffic is nonsense. However, what is unseen is that it forces network providers to upgrade their systems quicker. They can also build their cost /profit structure easier.

Perils to the model would be the evolution span of MPLS and anti-spam systems. MPLS, as an immature technology, is welcomed with high expectations. Addressing all needs in such a short period of time needs a lot of investment. The story is almost the same for anti-spam solutions too. No customer would like to pay extra for spam as this is adding to the traffic that a user is using. That would force network providers to unify on an MPLS/ anti-spam model where they and their customers can rely on.

Once this new role of incumbents is well assumed with solid technology, then converting the so-called threat of telecom commoditization into an opportunity is feasible.

Burak Fenercioglu is a freelance writer and working for a computer network security company for over 4 years. His articles are about new ideas, innovation and strategy all of which can be found at http://burakfenerci.blogspot.com

Internet America Reports Net Income and Adjusted EBITDA Profit for the Quarter ... MarketWatch (press release) Internet America is a leading Internet service provider serving the Texas market. Based in Houston, Internet America offers businesses and individuals a wide array of Internet services including broadband Internet delivered wirelessly and over DSL, ... and more »

SUSSEX: Residents may benefit from Comcast program Delmarva Now MILTON -- A little more than five months after its inception, Comcast's Internet Essentials program -- an initiative to give low-income families affordable access to broadband Internet at home -- has proven to be a success. and more »

LSU AgCenter helping rural areas connect to Internet Alexandria Town Talk Connect My Louisiana is a broadband Internet education and awareness initiative for Louisiana through a partnership between the Louisiana Division of Administration's Office of Technology and the LSU AgCenter, according to Dwight Landreneau, ... and more »

Broadband Need Asks For Your Help WTAP-TV Make sure that we get the data that we need evaluate exactly what service is out there and when," explains Jerry Bivy of New Era Broadband. Broadband would mean a different way to receive internet without Cable or DSL, helping everyone in Washington ...

CNET UK

Tesco offers unlimited broadband for £2.50 Total Telecom Tesco Broadband on Monday launched a low-cost price plan that offers unlimited Internet access to UK customers for just £2.50 per month. The 12-month deal is available until 31 May to members of the UK supermarket giant's loyalty scheme. Tesco unlimited broadband now £16.25 per monthCNET UK Tesco launches cut-price broadband dealuSwitch.com (Tech) all 8 news articles »

New players are shaping the future of Web TV Crain's New York Business Finally, Nielsen came out with its third-quarter 2011 Cross-¬Platform Report, which showed a spike in the number of TV viewers who have broadband Internet service but no cable subscriptions—and who stream video more, and watch TV less, than the ... and more »

Ultrafast broadband in Hamilton from July Waikato Times In the last six months Ultrafast Fibre has laid 90km of ultrafast broadband fibre optic cable in Hamilton and will have laid a further 15km by the end of the month at the rate of 793 metres per day. At the test centre internet service providers, ...

First White House CTO Aneesh Chopra resigns Computerworld He worked on modernizing the federal government's IT infrastructure, pushed for a nationwide public safety broadband network, helped develop Internet policy and assisted in implementing Obama's open-government strategy, said John Holdren, ... and more »

SuddenLink rolls broadband usage caps in Texas FierceCable SuddenLink Communications is beginning to notify its high-speed Internet subscribers in Texas that it will place caps on their broadband usage. The cable MSO first announced the controversial usage cap strategy last October, saying that it would hit ...

USA TODAY

Will Lifeline guarantee high-speed Internet access for all? Los Angeles Times Soon, the program might also help subsidize their access to high-speed Internet as well. On Tuesday, the Federal Communications Commission, which manages Lifeline, said it will spend $25 million on a pilot program to examine what it would take to ... FCC votes to fund broadband service for low-income homesWashington Post (blog) FCC to reform telephone subsidies, could eliminate Link Up to fight corruptionWashington Times FCC Providing Broadband To Poor Families Through LifelineWebProNews Wall Street Journal -Bloomberg BNA all 54 news articles »