New World Network Scenarios

Posted by Peter Cochrane on January 1, 2002

New World Network Scenarios (pp37 - 40), Ultimate Telecom Futures 
Peter Cochrane

It has already seemed to me that we can predict, with phenomenal accuracy, when technology will arrive and what is possible, but we are hopeless at predicting how people will react, and what they will actually do with it. For example, when a new UK mobile telecom entrant decided to market free phone calls to consumers after 7pm, no one anticipated using mobile phones as a baby alarm. Meanwhile, SMS has been growing at a staggering rate without any advertising marketing or planning.

As a systems engineer, I look at such phenomena and see a telephone network designed for three or four phone calls a day, of three or four minutes duration originated at random. In a new world, what happens? It is dial in, log on, never log off. Suddenly, there is a major social change in the way people behave toward telecom - and the old network cannot cope. Picture the situation that many of us now routinely encounter. In a hotel hosting a major conference, the load on the public network suddenly goes from zero to 200 as people switch on their mobile phones in the first 60 seconds of their coffee break. Result: the network collapses, or service is blocked.

A traffic jam or major accident on a freeway sees a thousand mobiles go online in a minute. Result: the network collapses.

Conference attendees might simply be sending messages across a room to each other. Result: the network (especially if you are in New York via London), collapses.

Behaviour like this, with people dialling in every few seconds, for a couple of seconds, may take out the control, switching and transmission fabrics of the network. Such scenarios cannot be accommodated by any conventional circuit switched telephone network. They demand an Internet/IP approach and radically new practices. In short, we much make the transition from centralized to distributed control, from company to customer, and hence terminal centric operation.

I now do my European job during the day with early morning calls to South East Asia where it is afternoon or evening. I work in a networked environment where I sideline 'time' by email. If the network capacity is scarce at critical bottlenecks, the true scarcity for people is - time.

When I visit companies I generally ask if I can 'borrow a little band-width?' Usually, they seem delighted to let me plug into their LAN, to do my email and everything else. When I am in offices, hotels, or airports I also check for the existence of wireless LAN networks. No one knows I am logging on for a few moments! In the US, there are operations like Laptop Lane, KenKos, Starbucks coffee shops et al where I can walk in and get all the bandwidth I need, for as long as I need for US$5.00. I go into an American hotel and it's US$9.00 for 24 hours of fast Net access on their bedroom LAN. And I generally get more bandwidth than inside my previous UK company.

Once the bits can move, atoms start to move, and then the bits need to move even faster. This first became apparent with the development of the railways, where the lack of a time standard across the UK meant that you couldn't run a railroad even in a small country. To have a time standard and to control the network of railway trains required a signalling system that was faster then the physical movement involved. So telegraph systems were invented and soon after the telephone arrived, and so on. We now have the interplay between atoms and bits again. People complain transport infrastructure is poor -i.e. the roads have inadequate bandwidth too!

It may be Darwinist, but without radical reorganisation, most business practices cannot survive the advance of IT. My favourite analogy is a tidal wave. You sit on a beach and you can see something on the horizon, but by the time you figure out it is a tidal wave it is too late to run. You are dead. This is exactly how IT is impacting the business community.

The new economy is putting old systems under great strain like an elastic band, and as it is stretched, more and more energy is being stored. When it snaps it is going to kill the old way of doing things. Ignore the upheavals in the present marketplace. The bust is insignificant to the motor industry bust of 1900 to 1920. In1900, there were a thousand motor manufacturers in the US and by 1920 there were four. We have been here many times before, only this time it is faster!

So what does this mean for organisations? The old world was about control - putting your arms around everything. Managers controlled the world by giving and receiving little bits of information and/or atoms. They were protected, in an office and no one could see them. The new world sees them exposed, very visible and having to share and give away absolutely everything to succeed. It is now essential to make the transition between seeking to be powerful and seeking to be influential, and it means very few - perhaps only three at most - levels of management.

In this new world it also means we have to find new mechanisms to explore and exploit new technological ideas and be fast to market. This means that whole cycle from research, through development, to business launch has to speed up, and we will see companies rise and fall in less than ten years. We have to be able to manage a company over its peak and down to zero, and find mechanisms that allow us to migrate to the next one.

Each technology is more short-lived than the last, but has thousands of times more impact. We started with telegraph systems developed over a very long period. The telephone network shot much higher and over a much shorter period. And the same is true of mobile phones and the Internet. Each successive technology lasts a shorter period and achieves much more. This is also true of company builds too, but the ultimate limit is us and our speed of social reorganisation. Even so, as technology becomes smarter it might not wait for us. It might just take over.

Above all, we are in for some creative destruction of many industries. In an organic upheaval of creation, decline and re-creation, the entire telecom market is in a state of churn, and up for grabs. The ironic aspect to all this is that the network owners have almost certainly made their single biggest investment in making this future happen already. The hugely expensive civil engineering of installing networks - digging the trenches - has already been completed. Most people do not realise that in most cities in the West they are usually walking within 50 feet of a gigantic amount of buried fibre optic. But the trouble is they cannot access it. Wired or wireless connection is still severely limited. If this continues, what are the possibilities and opportunities? I foresee some extreme measures unfolding.

Death Knell?
Here is a potential 'death knell' for cable and telephone networks. I visit a store and buy a PC, printer and a scanner, all airport (wireless LAN) enabled. My neighbours do likewise. I plug my machine in, turn it on and I can see my wireless network. I can also see my neighbours computer and network. In fact, I can see a lot of the systems around me. In an entire village of a thousand people, everybody can do this. So, only the right software would be required to let the signal, unseen to your or I, hop from house to house, and go right round the village. We now have a village LAN, so why don't a thousand households club together, pay US$2,000 a year, and buy an optic fibre into the village? This looks like a replay of Community Antennae TV scenarios of the 1950's in the US. We don't need the phone company or the cable company anymore because we are going to do this at 50 Mbps.

Now suppose the Tesco supermarket operation in the UK installs an Internet café with a wireless LAN. People can shop and email at the same time. The computers are WLAN enabled, so no wiring is involved. But in the aisles of retail goods in the store, there are also some US$300 boxes - plug and play airport units. The US$300 airport boxes are about the size of standard paperback novels. Tesco uses one of these units fitted overhead high in the building for in-store communications and the PC network. It is plugged into the premises optical fibre. Shoppers are able to buy equivalent units for their home PC networks.

Many eventually do the same. Combined, everyone can link into the Tesco network. A user, plugged in, becomes part of the Tesco network. So for a one time payment of US$300 users get access to the Internet for life, providing they keep buying food from Tesco or Asda, Sainsbury, Shell, BP, Exxon, Wal-Mart or the local school, wherever these facilities exist. The cable and telecom company, at least in terms of retail operations is short-circuited.

The cable and telecom operators need an effective response to address these scenarios, and they have one shot - the copper and fibre in the street that runs outside of our homes. The problem with the DIY solution is that if someone is downloading movies, and someone else is transferring MP3 files, and another is sending photographs, you can find yourself at the end of the bit-food chain. Solving this limitation gives the telephone can cable companies a major opportunity. A US$300 box on top of a telephone pole will give a single hop Net access. The options are, act, or be bypassed.

A flat fee world?
If hotels treated their customers in the same way as telcos, they would start charging you as you walked through the front door. Imagine the scenarios: "Excuse me Sir, that will be 27c for walking on the carpet, 45c for breathing the air and another 20c because we will keep you warm". Why would you do that? Just load the cost onto each coffee, plate of food, rooms and everything else. In actual fact the cost of these atoms is about ten times more than the cost of bytes into my laptop, so why can't I have bytes for free? I just want to open my laptop, get on line and it's on the cost of my croissant. I don't want to see any bills. I don't want any paper work. Just give me an all-inclusive flat-fee for everything.