Return-Path: Received: by massis.lcs.mit.edu (8.7.4/NSCS-1.0S) id VAA08673; Fri, 14 Nov 1997 21:39:36 -0500 (EST) Date: Fri, 14 Nov 1997 21:39:36 -0500 (EST) From: editor@telecom-digest.org Message-Id: <199711150239.VAA08673@massis.lcs.mit.edu> To: ptownson Subject: TELECOM Digest V17 #315 TELECOM Digest Fri, 14 Nov 97 21:38:00 EST Volume 17 : Issue 315 Inside This Issue: Editor: Patrick A. Townson Re: The Internet Will Swallow the Phone System (Craig Milo Rogers) Re: The Internet Will Swallow the Phone System (Roger Conlin) Re: The Internet Will Swallow the Phone System (Dave Stott) Re: The Internet Will Swallow the Phone System (Tony Pelliccio) Re: The Internet Will Swallow the Phone System (Scott A. Miller) Re: The Internet Will Swallow the Phone System (David Esan) Re: The Internet Will Swallow the Phone System (Bill Sohl) Re: The Internet Will Swallow the Phone System (Garrett Wollman) Re: The Internet Will Swallow the Phone System (Michael D. Sullivan) Re: The Internet Will Swallow the Phone System (Thomas A. Horsley) TELECOM Digest is an electronic journal devoted mostly but not exclusively to telecommunications topics. It is circulated anywhere there is email, in addition to various telecom forums on a variety of public service systems and networks including Compuserve and America On Line. It is also gatewayed to Usenet where it appears as the moderated newsgroup 'comp.dcom.telecom'. Subscriptions are available to qualified organizations and individual readers. Write and tell us how you qualify: * telecom-request@telecom-digest.org * The Digest is edited, published and compilation-copyrighted by Patrick Townson of Skokie, Illinois USA. You can reach us by postal mail, fax or phone at: Post Office Box 4621 Skokie, IL USA 60076 Phone: 847-727-5427 Fax: 773-539-4630 ** Article submission address: editor@telecom-digest.org ** Our archives are available for your review/research. 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Any organizations listed are for identification purposes only and messages should not be considered any official expression by the organization. ---------------------------------------------------------------------- Date: Fri, 14 Nov 1997 15:24:10 PST From: Craig Milo Rogers Subject: Re: The Internet Will Swallow the Phone System In article , Lee Winson wrote: >> So will Internet telephony. The capability of the Internet to carry >> voice phone calls is limited now but likely to improve dramatically in >> the near term. > The author did not explain how this "capability" will improve. > IMHO, the Internet can be described in terms of "store and forward", > not direct connect. That is, your message is stored by your ISP, then > packaged and routed. This can appear to be instantaneous, or as Dave > Barry said, at the speed of the Division of Motor Vehicles. That won't > work in voice communication. The term "store-and-forward" carries baggage. The Internet's predecessor, the ARPANet, was described as "packet-switched" to differentiate it from earlier store-and-forward text messaging systems (uh, TWX?). The discriminating factors are: the ARPANet forwarded parts of messages (packets) instead of entire user-level messages, it forwarded them faster, and it didn't store copies in the intermediary switching nodes for an appreciable time. Packet-switched telephony research has been going on since before the Internet itself was created. There have been some false starts, in part because the complexity of the problem being addressed (ranging from compressed voice through HDTV), and in part because demand for service, among researchers alone, usually surpassed the available bandwidth. The solutions under review involve separating Internet traffic and reserving resources (link bandwidth, CPU bandwidth, buffer space) for stream traffic, such as Internet telephony. In some ways, these are the same issues that ATM addresses, but Internet streams use Internet packets rather than ATM cells as the low-level unit of traffic. Because of the (relatively) high resource consumption of Internet voice (much less video!) and the particular complexity (and volatility!) of the stream reservation and processing procedures, economics more-or-less dictated that Internet telephony was not supported by most Internet backbones; in particular, the special software needed *for optimal operation* simply hasn't been available on popular IP routers. In spite of these constraints, the ever-increasing capacity of the Internet backbones and the ever-increasing amounts of non-voice traffic lead to the assertion that the marginal cost for carrying voice-grade traffic on the Internet backbones will be relatively small (assuming that the special resource reservation and routing protocols are stable). At this point, given the present demonstrated demand for service, it will be in the economic interests of the IP switch manufacturers and backbone carriers to support Internet telephony. When this economic watershed will take place has always been a matter of speculation ... most of which has been disproven by time. Nonetheless, it still seems imminent. > Also, the article said nothing about how individuals will connect to the > Internet in the first place, and how ISPs will connect to each other. > I don't see any substitute for providing the local loop plant and the > basic switching infrastructure to support it. (And IMHO the problem in > establishing local competition is not the existing Bell companies, but > rather the demands of the new companies to be exempt in paying for the > massive RBOC infrastructure, both hardware and software*.) Easy problem first: the long-distance switching fabric will be paid for by the Internet backbone carriers. Schools, offices, and some factories are already being rewired for Internet connections. Unidirectional sound is standard on PCs now. True bidirectional sound hardware and real-time operating system support has been lagging, but newer hardware (e.g, Ensoniq AudioPCI) and software {uh, WindowsNT :-} have (or are promised to have) the necessary features. The direct connection of digital cellphone systems to the Internet is not technologically unreasonable. Cellphones with data support are now (or soon to be ) available, I believe. Under this model, cellphone systems could offer portable Internet "phone numbers" (eg: ) for voice calls to/from the Internet switching backbone. SS7 and the FCC portability database become irrelevant, their functions absorbed by DNS and maybe LDAP. Internet email, paging, and fax services to cellphone terminals follow in the same fashion. Home connectivity and rural connectivity remain big problems. ISDN, two-way cable, and the various DSL technologies *might* provide the necessary infrastructure, but, as you point out, it's not clear who wants to pay for them. If the US repeats the scandinavian experience, the digital cellphone system alone could be sufficient to handle most home Internet telephone in urban areas. Ultimately, the market foundation may rest upon something too sleazy to be included in current projections prepared for public policy. Consider the potential market for 976 services translated to interactive VR HDTV ... sin sells, and sin without local regulation sells very well indeed. > For all the brave talk the new carriers claim, I really question if > they'll have the capacity and business ability to truly handle > EVERYTHING a telephone company must deal with. Will a new company > want its service reps spending hours chasing down bad debts from > customers the PUCs order them to have? To spend hours on the phone > with confused Aunt Mabel over a 23c toll charge? The pager business and the long-distance telephone business, and, to some extent, the Internet service providers, have migrated to a two-tier model. There is an under-stratum of connectivity companies that own the transmission facilities and switches, and an overburden of marketing companies that sell access and service. The connectivity companies focus on running reliable transport services. The marketing companies focus on salespeople and service reps. The former are objects of corporate acquisition, while the latter have a higher tendency to collapse; caveat emptor. > Some of this talk, frankly, sounds to me like inexperienced computer > engineers who have yet to experience the challenges of both > maintaining a service network, under fire, in the face of changing > conditions. Building a network on your own terms is relatively easy > compared to running it smoothly. Another factor is that telephone deregulation has encouraged great reductions in expectations for the service quality of the telephone infrastructure. ;-) I can assure you that Internet ISP and backbone engineers do, indeed, experience the challenges to which you allude. > * My analogy to competition is this: Suppose you own a 7-11 convenience > store. They'll tell you that a competitor is to open next door to you. > You are told to let the new store use your driveway and parking lot. You > are still responsible to light, maintain, and shovel snow from this > parking lot. The new store doesn't have to worry about this, you do. > Is this truly fair competition? No, but that's not the right analogy. :-) Instead, consider a "typical" small-town shopping area: narrow streets, small stores, needless exposure to the weather while shopping, high city taxes to support crumbling infrastructures. Suddenly, a Net*Mart appears just outside the town boundaries. Good parking, wide selection, air conditioning, no city taxes ... that's the brave new world we're building! Craig Milo Rogers ------------------------------ From: roger.conlin@erols.com (Roger Conlin) Subject: Re: The Internet Will Swallow the Phone System Date: Sat, 15 Nov 1997 00:34:42 GMT Organization: Erol's Internet Services Reply-To: roger.conlin@erols.com Monty Solomon wrote: > Date: Mon, 10 Nov 1997 10:38:25 -0800 (PST) > From: Phil Agre > Subject: the Internet will swallow the phone system > [Forwarded by permission. Gary's right: the Internet's going to > swallow the phone system. Informed people disagree mightily about > whether the Internet can provide the same functionality as the phone > system for much cheaper, but that's not really the point. The point > is that connection- oriented voice is just one tiny specialized case > of the vast range of possible functionalities that the Internet can > provide. It won't be easy, since the Internet architects will have to > get quality-of-service differentiation, a reservation protocol, and a > decentralized bandwidth market all going at the same time. The people > who think they can make this work, like David Clark at MIT (architect) > and Jeff McKie-Mason at Michigan (economist) etc etc, are very smart, > however, so just give them a few years. In the meantime, please have > a talk with your phone company. Explain the Internet Way to them. If > you explain it very slowly then they might get it just before they go > out of business.] Very amusing. After you wake from this fantasy, remind yourself who it is that carries the Internet. Voice traffic will change, merge, etc., but let's not spout off about phone companies going out of business because of the Net. ------------------------------ Date: Fri, 14 Nov 1997 13:56:00 -0500 From: Dave Stott Subject: Re: The Internet Will Swallow the Phone System In Telecom Digest #314, lwinson@bbs.cpcn.com (Lee Winson)wrote: > Also, the article said nothing about how individuals will connect to the > Internet in the first place, and how ISPs will connect to each other. > I don't see any substitute for providing the local loop plant and the > basic switching infrastructure to support it. The BOC's loop is one way for consumers and businesses to connect to their ISPs, but there are others: wireless and microwave, for instance, are in use today. WinStar has an entire line of microwave-based services for high-speed data connections that use WinStar links from the customer premises to WinStar switches. They never hit the BOC network unless they also have WinStar local service, which means interconnection to the PSTN at the "out" side of the WinStar switch. ISPs will connect to each other the same way they do today - through high-speed lines supplied by internet backbone providers. That may or may not include the BOCs; there are plenty of other options available. > (And IMHO the problem in establishing local competition is not the existing > Bell companies, but rather the demands of the new companies to be exempt > in paying for the massive RBOC infrastructure, both hardware and software*.) That's certainly one opinion. Others feel that telephone customers have had no choice in where their money went prior to today, and the dollars they have invested in telephone service (because all dollars are ultimately supplied by the customers) is a "public investment" in a private company. If Ford had a government protected monopoly on automobile sales in the US, what kind of car would _you_ drive? When GM came to town, Ford could argue that the existing roads should be used exclusively for Fords, since only Fords had been used on them up to now. Should GM build all new roads? Or should they be allowed to use the roads that were built for Fords? Would it matter if the roads had been built _by_ Ford? Would GM then have to build new roads for their cars? > For all the brave talk the new carriers claim, I really question if > they'll have the capacity and business ability to truly handle > EVERYTHING a telephone company must deal with. Some will, some won't. Some of the ones that don't have those skills in-house will contract with people who do have the skills and have opened up new companies to serve the industry. In the early days of any competitive industry you find newcomers with more money than know-how, but if they pay attention to basic rules of business, they can become real players. Just ask Bernie Ebbers over at WorldCom. > Will a new company want its service reps spending hours chasing down > bad debts from customers the PUCs order them to have? To spend hours > on the phone with confused Aunt Mabel over a 23c toll charge? Probably not. But do the BOCs like that either? (Which, if I guess correctly, is the underlying point here.) From experience working with the Collections group at U S WEST, I can say that that company, at least, would much prefer that people paid their bills on time. As for the "hours on the phone" over "a 23c toll charge," some companies will accept that their employees' time is worth more than that and write the charge off, just as U S WEST does. > Some of this talk, frankly, sounds to me like inexperienced computer > engineers who have yet to experience the challenges of both > maintaining a service network, under fire, in the face of changing > conditions. Building a network on your own terms is relatively easy > compared to running it smoothly. A key point that investors look at in determining whether or not to fund a startup. Not many people are wealthy enough to start their own phone company, so if the experience running a network isn't there, neither will the funds be there. That's exactly the value of a market driven economy - better ideas drive out poor ones. > * My analogy to competition is this: Suppose you own a 7-11 convenience > store. They'll tell you that a competitor is to open next door to you. > You are told to let the new store use your driveway and parking lot. You > are still responsible to light, maintain, and shovel snow from this > parking lot. The new store doesn't have to worry about this, you do. > Is this truly fair competition? No, it isn't. That said, it _is_ the way the government has decreed that competition shall evolve, and we can either sit and moan about it, get new people elected to change the law, or take the actions that best suit our needs to make the most of a bad situation. If I ran your 7-11, I'd do those things necessary to make me more competitive than my new neighbor and keep some customers coming in my door. The fact is, you're store is going to lose business (as are the BOCs). That fact should not be in question, and nobody ought to waste their time discussing it. Both the 7-11 and the BOCs would be better served to discuss which customers they are willing to lose, and how they will keep the ones they aren't willing to lose. It also raises an interesting question - if your store goes broke, where will people park to shop at the new store? By extension, if the BOCs go broke (and I agree with Pat that they won't) who will maintain their OSP? Any business that depends on it's competitor(s) for its products lives a very frightening existance. (Imagine if Ford dealers had to compete with the factory to sell cars.) The BOCs will survive, but they won't look the same in ten years. My guess is that they will have a network arm which sells access and switching services to all comers on non-preferential terms, and a marketing arm which will purchase products from the network arm at non-preferential prices. This is what Rochester telephone did, and now Frontier is the fifth largest LD company in the US. Dave Stott (602) 831-7355 dstott@2help.com http://www.2help.com ------------------------------ From: tonypo@ultranet.com (Tony Pelliccio) Subject: Re: The Internet Will Swallow the Phone System Date: Fri, 14 Nov 1997 11:00:19 -0500 Organization: The Cesspool TELECOM Digest Editor Noted: > Now, no one is going to go around digging up the streets and laying > cable as Bell did early this century and since they still own the > local loop they'll be pretty safe even if not as complacent as in > the past. No, it is AT&T/Sprint/MCI I fear for over the next couple > decades as Internet phone becomes more and more common. PAT] Actually I believe that Sprint and MCI will survive since they carry a pretty big chunk of the Internets backbone traffic. AT&T goofed when it came to that. Tony ------------------------------ From: samiller@BIX.com (Scott A. Miller) Subject: Re: The Internet Will Swallow the Phone System Date: 14 Nov 1997 13:48:28 GMT Organization: Galahad On Tue, 11 Nov 1997 23:24:42 -0500 Monty Solomon of TELECOM Digest wrote this re The Internet Will Swallow the Phone System: > please have a talk with your phone company. Explain the Internet > Way to them. If you explain it very slowly then they might get it > just before they go out of business. Please explain why in the H*** I would want to save my phone company from going out of business. Think of it as evolution in action ;>) Scott A. Miller samiller@bix.com samiller@bellatlantic.net ------------------------------ From: David Esan Subject: Re: The Internet Will Swallow the Phone System Date: 14 Nov 1997 15:19:14 GMT Organization: AT&T WorldNet Services > [TELECOM Digest Editor's Note: I am pretty sure the local monopoly > will stay intact, even if not always a monopoly. Where the damage will > be most obvious is in the long distance arena. I still say that some > day in the future we are going to see news headlines saying AT&T has > filed bankruptcy, and the pitiful little shell which remains is going > out of business. Perhaps I don't understand the Internet well enough, but aren't the various existing Long Distance companies supplying the lines that connect the various backbone sites? And aren't they getting paid for that? True the number of Long Distance calls using AT&T as its carrier will decrease, but the number on the various ISP will increase. Volume over the network will not be affected. Profits for AT&T will be reduced because they will not be able to soak the poor consumer as they have in the past, but they will still make profits leasing lines to the ISPs, who will pass the costs on to the poor consumers who will still get shafted. Wasn't the strategy of WorldCom in buying MCI to increase their internet participaton? Won't they need lines to do that? Isn't there a profit in owning the lines? ------------------------------ From: billsohl@planet.net (Bill Sohl) Subject: Re: The Internet Will Swallow the Phone System Date: Fri, 14 Nov 1997 04:32:43 GMT Organization: BL Enterprises > [TELECOM Digest Editor's Note: My thoughts on reading the original > article was that the author was saying Internet would eventually > absorb most or all of the long distance side of the telecom business. > That is, after all, the most profitable part of it. Yes, there would > still be the local loops, but companies like AT&T -- to name just an > example -- would suffer financially quite a bit after the Internet as > a voice carrier comes into wide use. PAT] The problem today and for the forseable future is that internet phone is not reliable. As a business user, I can not afford the hit or miss aspect of internet phone when dealing with clients. I suspect I-phone will augment recreational/family voice services, but I see little liklihood that it will kill AT&T, MCI, etc. Bill Sohl (K2UNK) billsohl@planet.net Internet & Telecommunications Consultant/Instructor Budd Lake, New Jersey ------------------------------ From: wollman@khavrinen.lcs.mit.edu (Garrett Wollman) Subject: Re: The Internet Will Swallow the Phone System Date: 13 Nov 1997 23:37:45 -0500 Organization: MIT Laboratory for Computer Science In article , Lee Winson wrote: > The author did not explain how this "capability" will improve. Pity. That's OK, I can. Point 1: As the original article described (which is backed up in many industry publications), the market for data service is growing much faster than the demand for voice. In fact, the total capacity of the data networks is expected to cross over that of the voice networks in the not-too-distance future. The practical upshot of this is that the available bandwidth will be effectively limited only by the hardware and software technology inside the networks. Technology is now being developed and deployed which will give service provides the opportunity to provide substantially different levels of service to different customers, thus providing a market mechanism where increased bandwidth can be paid for as demand warrants. Point 2: Statistical multiplexing, which arises out of the observation that not everybody wants to talk at once, applies to data networks as well -- indeed, it is even more effective, since a packet transmission dedicates a far smaller fraction of the total transmission resource than a telephone circuit represents. To translate this into the circuit domain, it's as if you and I could share the telephone line by allowing me to say something whenever you take a breath. Point 3: There are essentially three types of data services: elastic, adaptive, and isochronous. Elastic services are insensitive to short-term delays in the network; they will use up as much bandwidth is available, but in the presence of other users will back off until an equilibrium is reached where each user (connection, really) shares the channel equally. (Not quite true; as I mentioned above, there are things service providers can do to make some users more equal than others.) Isochronous services are at the exact opposite end of the spectrum: they depend on traffic reliably getting through the network at a constant rate, with packets arriving neither too soon nor too late. For a very long time, telephony-type applications were thought to fall into this category, but it's now understood by networking researchers that they are, in actuality, adaptive services, the third major type. An adaptive service is one which can operate under widely differing network conditions, and provides some amount of buffering at the receiving end which can be adjusted to provide as good a service as the delays in the network allow. The prototypical ``Internet Telephony'' application, Van Jacobson's research vehicle `vat', was the first major application to develop this service model. Just what the bounds of acceptable performance are for the specific application of telephony is an open research question, although it clearly depends to a great deal on the nature of the users (consider the potential differences between computer geeks, CEOs, tightwads, and Soccer Moms). Last I heard, a group called the ``Internet Telephony Consortium'' was sponsoring research on actual human subjects to help determine what these parameters are. (This actually provides sort of a ``poor man's admission control'' -- once the quality degrades past the level of acceptability, people will become discouraged and stop, thus removing their traffic from the network.) Point 4: These three types of services interact in an interesting way. Specifically, services which inject their data into the network at a constant rate, or effectively so, will always win a battle for bandwidth against elastic services like TCP. This has two salutary benefits: first, and most immediately, people will actually be able to use the service, at least so long as the network isn't totally saturated. Second, in the long run, users will eventually notice that their network performance is getting sluggish, at which point some fraction of them will purchase a higher level of service, again providing an additional economic incentive to expand the capacity of the network. > Also, the article said nothing about how individuals will connect to the > Internet in the first place Same way they do now: either by one of the wires going into their home, or over radio waves. The technology is there to get far more than enough bandwidth with either mechanism (the cable company already has a 3 Gbit/s pipe into my home, which they currently use to distibute analog video, how passe). Garrett A. Wollman | O Siem / We are all family / O Siem / We're all the same wollman@lcs.mit.edu | O Siem / The fires of freedom Opinions not those of| Dance in the burning flame MIT, LCS, CRS, or NSA| - Susan Aglukark and Chad Irschick ------------------------------ From: Michael D. Sullivan Subject: Re: The Internet Will Swallow the Phone System Date: Fri, 14 Nov 97 00:43:11 -0400 Organization: DIGEX, Inc. Reply-To: Michael D. Sullivan On 14 Nov 1997 00:14:24 GMT, TELECOM Digest Editor noted in response to Lee Winson: > [TELECOM Digest Editor's Note: My thoughts on reading the original > article was that the author was saying Internet would eventually > absorb most or all of the long distance side of the telecom business. > That is, after all, the most profitable part of it. Yes, there would > still be the local loops, but companies like AT&T -- to name just an > example -- would suffer financially quite a bit after the Internet as > a voice carrier comes into wide use. PAT] Long distance *has* been the most profitable part of telecom in the past, but given the level of competition it is no longer the most profitable. Check out the earnings reports. AT&T thought it was shedding the deadweight when it spun off the local telcos, but it bought the right to have its customers stolen by MCI et al., while leaving the bread and butter behind. And the profitability of the local telcos, which has been substantial for the last few years, will soon be undercut by local telco competition. And, Pat, you err when you suggest that AT&T has local loops as a significant part of its business. AT&T shed these on 1/1/84. The only local loops AT&T has now are its CLEC loops (resale and/or unbundled) and its wireless (cellular and PCS) "loops". TELECOM Digest Editor noted further: > I suggest AT&T still refuses to believe that > every ISP around today can be a long distance telephone company, and > an inexpensive one at that. > Now, no one is going to go around digging up the streets and laying > cable as Bell did early this century and since they still own the > local loop they'll be pretty safe even if not as complacent as in > the past. No, it is AT&T/Sprint/MCI I fear for over the next couple > decades as Internet phone becomes more and more common. How do the ISPs route traffic to the NAP? How does the backbone transport traffic after it reaches the NAP? By and large, using facilities provided by AT&T, Sprint, or MCI as an underlying carrier. MCI is one of the largest players in internet intrastructure. It's also about to become a subsidiary of Worldcom/UUNet. I don't think you have to lose sleep over them. Michael D. Sullivan, Bethesda, Maryland, USA mds@access.digex.net, avogadro@well.com [TELECOM Digest Editor's Note: I did not mean to imply tha AT&T was in the local loop business to any extent. I meant to say that as I-phone develops and becomes more used, more and more of AT&T's core business will drift away toward I-phone. Yes, ISPs will continue to use AT&T and the other major carriers but they will be paying a lot less than the aggregate total that AT&T lost everytime Mom and Dad and Uncle Pat and whoever made a toll call. PAT] ------------------------------ From: Tom.Horsley@worldnet.att.net (Thomas A. Horsley) Subject: Re: The Internet Will Swallow the Phone System Date: 13 Nov 1997 22:26:21 -0500 Organization: AT&T WorldNet Services > Now, no one is going to go around digging up the streets and laying > cable as Bell did early this century and since they still own the > local loop they'll be pretty safe even if not as complacent as in > the past. Well, the cable companies already did the equivalent of "digging up the streets" to get their cables to homes, and with the advent of cablemodems (and many cable companies upgrading their lines and equipment to handle two-way cablemodems), there is no real reason the cable companies couldn't replace the local loop as well. The only wires left would be the ones inside your house, which get their phone signal from a little box plugged into your cable (the same box, in fact, that your computer gets its ethernet connection from). So I'm not all that certain the local loop is really safe from competition either ... The *Best* political site URL: http://www.vote-smart.org/ email: Tom.Horsley@worldnet.att.net icbm: Delray Beach, FL Free Software and Politics ------------------------------ End of TELECOM Digest V17 #315 ******************************