Telepocalypse

A ton of VON

It’s about half way through the Fall 2004 VON conference. I just couldn’t take one more dull-but-worthy keynote, so decided to duck out and have a tete-a-tete with my invisible (and possibly imaginary) audience instead.

It’s annoying to pay over $2000 for conference entry, be lavished great food and facilities when you get there, and then be dinged $100 by the conference center for WiFi. Particularly when the conference is all about the connected IP age. So I’m not paying. I walked 15 minutes back to my guesthouse in protest, to suck up some free bandwidth from a generous Mrs NETGEAR somewhere over the road. (The B&B has WiFi of its own, but the owner didn’t realise he needs to tell you the WPA access key, and assumed a WiFi card was all his guests needed… doh!)

The restricted connectivity at VON is highlighted by the hordes of people lined up at the breaks to access a row of public access PCs. The demand for connectivity exceeds that for micturition, judging by the length of the queues. And artificial scarcity of access isn’t the only frustrating Bellhead legacy at VON. This is an industry in a deep state of denial at the cataclysm facing the legacy smart network model. Sir Terry Mathews gave a speech which really laid things bare. He talked about the death of the (networked) canal industry in the face of orders-of-magnitude improvements offered by railways — and reminded people that cost improvements of the same magnitude had occured in fiber, silicon and storage in the space of half a decade. Christopher Fine of Goldman Sachs spent 27 minutes on some interestin but well-known stats and projections on VoIP, and then 3 minutes on why most operators and vendors in the room were (by implication) totally ******. That last 3 minutes was the meat. Even FCC chariman Michael Powell engaged in some revolutionary oratory.

Yet I’ve sat through several talks and seen many booths where the old world is still alive and well, dressed up in ill-fitting new IP clothes. My goodness — a hockey-stick graph showing an explosive growth of IP PBXs! If this fails to happen, it’s sad for the shareholders and employees of those companies. But if it comes true, it’s an even sadder outlook for the end-to-end Internet and user-driven innovation. I don’t want to have to ask an IT department or network operator every time I want to try a new device, service or feature. No, I demand not to have to ask. I’m a responsible adult (don’t laugh). Let me provision my own stuff. Let the vision of distributed computing blossom.

There’s just too many people at the conference with session border gateways, deep packet inspection probes, proxies, IP PBXs and IP Centrex. It gives me the shivvers. These aren’t evil technologies in and of themselves. A web server is a smart element attached to a dumb network, and is pretty harmless. It’s just when the only route between you and I is via one of these intermediaries, we’re busy re-creating the failed smart network of the PSTN, just with a new and richer feature set. These aren’t network services, they’re network disservices. Somehow we need to get a better grip on the good stuff — targetted firewalling, virtual network segmentation, intrusion detection — and ditch the application-specific stuff being rewired into the network.

Many speakers have talked about the “IM generation”, kids who have grown up with IM as their primary means of keeping in touch with their friends. There have been repeated references also to the blurring between home and work, and the diffusion of the work environment away from the office. A world of geographically dispersed teams, and collaboration between suppliers, customers and partners. Doesn’t anyone see the contradiction here with smart networks of gateways and proxies? A closed enterprise messaging system doesn’t let me IM with my customer. My personal professional support often comes from other bloggers and former colleagues who are outside the traditional employee domain. Yahoo IM is a business tool, not a kid’s toy. But at Sprint I could only access Yahoo IM via a secret and illegal SOCKS proxy someone had installed in the IT department. Doing real work at work is verboten; your job is to be present, not use presence. The only way to get quick advice from your personal knowledge network was to break corporate security rules. This is horribly broken.

You should all harbour a great fear that the mistakes of the past are being repeated, driven by short-sighted network designs and corporate security paranoia. Yet a glowing light in the darkness exists in a small booth in the exhibition hall. Popular Telephony are changing the world, and making most of the other exhibitors obsolete. Their Peerio product is putting a SIP and H323 server into the silicon of phones on people’s desks. Married to this is an encrypted, peer-to-peer content management network. Your voicemails, emails, and even directories can be smeared around, in duplicate, at the network edge. No servers, PBXs, or centrexes. Want a telephone network? Available at Costco, $50 a phone, buy in bulk. Oh, and they’re quietly hijacking and subverting the PSTN numbering space, too. Just don’t say it too loud, in case someone hears.

Maybe they should rename themselves the Popular Telephony Liberation Front. Or was that the People’s Telephony Liberation Front? Never mind. This is peer-to-peer as it was meant to be. It’s horribly subversive. I’m in love.

So if you’re putting your pension savings into the VoIP business, tread very, very carefully. This boom going to hurt as bad as the .com explosion. One way or another, there’s going to be a lot of roadkill, and a lot of get-rich-quick money from inflated promises.

There have been some other nuggets at VON I’d like to share with you. Sorry for the disconnected random notes. Must try harder.

Firstly, there’s no doubt that there’s a lot of excitement about. VoIP is either making lots of money, or destroying other people’s ability to do rent seeking and make money. There are a lot of suits at what could have been a rather geeky conference.

At the Telecom Policy Summit, someone astutely commented that a key aspect of IP was not just decoupling of the applications from the service. It is also the decoupling of the financial relationship between the connectivity and service provider. This difference is subtle but vital. In principle, we could re-impose some form of access charge on services in order to fund socially or economically desirable connectivity. This separation of connectivity and service at the financial layer, above the application layer, is a vital battleground. How far should end-to-end be pushed? At an extreme, you could even try to have separate regulators for connectivity and services, parting them at the polticial sphere.

I liked the parallels drawn between telecom and car dealers. Both have intermodal competition (e.g. cars vs. public transport; cable vs. copper vs. wireless). Both have lots of lobbyists. Both have protected wholesale markets. Cars and connectivity are necessities. There is regulation of car dealers, and bad ones get punished. The regulation is post facto, nor a priori: wait until you have a problem, but then act realy quicly. Please, no posthumous validation of complaints aginst abuse by incumbents. The government doesn’t set prices for cars. There are some minimum social requirements, such as emissions and fuel economy. These are public goods, and ones which the owner of the vehicle derives little benefit for that isn’t reflected in the price. But there is no minimum rate of accelleration, or allowable number of defects. It’s vital to avoid creating “regulatory goods”: features that are acquired by petitioning public bodies rather than through market pricing.

There’s a lot of confusion at the conference when people say “VoIP”. You have to work hard to understand whether they mean slot-in PSTN replacement using phone numbers, or just any real-time duplex audio stream over IP. One of the best things the regulators could do is introduce some new terms and people will, by necessity, start to use them. It was noted that adopting different terminology for economic and social regulation has sometimes worked well. This avoids “regulatory bleed”, where case law refines the definition in one area, but this changes the use in unrelated spheres. For example, a court decision saying new service X that bundles aspects of connectivity and application isn’t subject to state sales tax shouldn’t automatically kick it out of the scope of wiretap as a by-product.

A big fight is brewing over whether to attach fees and regulation to phone numbers, or to connectivity. If the former, it may kill off the PSTN, or drive people to out-of-territory numbers with lower fees and burdens. If the latter, it contradicts the aim of promoting broadband adoption by keeping it cheap and cheerful.

Being a US-centric conference, there has been a lot of talk about a re-write of the infamous 1996 Telecom Act. It would be nice if that discussion wsa framed differently. Instead of looking backwards at the 1996 act and fixing the problems, why not look forwards? Adopt an explicit policy of rapid decomissioning of the PSTN. Allow the telephone numbers to stand as an independent resource, just like DNS. Why not have a desirable destinatin in mind, instead of yanking the rudder one way and ‘tother?

A take-away of the conference is that the US is, sadly, relatively backwards when it comes to broadband and IP. Yes, a lot of the technology, capital and excitement is American. But the political system and legacy of the Bell system hang over everything as a dark cloud. Much as the decline of the railways and naval power heralded the end of the British Empire, the days of American communications technology hegemony may be numbered too. Which is sad, because at heart I like vibrant American capitalism and innovation.

Several people are concerned that the incumbent operators will discriminate against VoIP service providers, for example via port blocking or inducing jitter to competing VoIP services. Chairman Powell explicitly said that the “four freedoms” speech (which he had re-iterated today) was a shot across the bows of the industry. Discriminate, and the regulations will arrive. Others had previously noted that there were few if any examples of this.

My take is that the incumbents are far, far, smarter than this. They won’t add blocking to existing services. They’ll just create a DSL-lite introductory product which lets you roam within the walled garden. In the most restrictive case, they’ll sell DSL tied to VoIP alone (without Internet access), and try to bypass fees and regulations. The price of full-access DSL can then be jacked up. The telcos will get kickbacks from the application service providers and partners based on incremental revenue.

Jurisdiction is going to be a massive regulatory food fight. The FCC is minded to grab control for itself and only delegate certain implementation details to the US states. But the elephant in the corner is the global nature of the Internet. Services can flee the US entirely. Which is why the telcos need to presenve the geographically-based numbering system, as it support a geographically-based lobbying footprint.

I saw some regulatory capture in action, with a representative of the New York public utilities comission. When large financial institutions in Manhattan wanted to achieve multi-path redundancy, he ruled to force Verizon to hand over network maps (for a regulated price). Much better would have been to question why competitors find it hard to gain rights of way and access to build competing redundant lines.

Getting bored with regulation discussions, I slipped into the enticingly named session “It’s the Smart Device on the Stupid Network”, part of the 2004 Landline Replacement Summit. I watched a crigeworthy presentation from Motorola’s CTO of broadband demanding the re-imposition of centralised QoS and circuits. Hmm, wonder why they’ve been struggling and laying people off. Somehow Moto things that the network should not be stupid, but should still be application agnostic. I’ll write an article on what QoS is good for another day, but this is just a design for a car with square wheels. Hopelessly wrong.

Debby Hindus of Rapport Inc. actually said something new, which was out of character for VON. She highlighted the possibility of denial of service attacks being targetted against individual user devices. This would be a new phenomenon. She also predicted the need for smart devices with lots of processing power to, for example, screen out background domestic noise when working from home and calling into work. Similar image processing would be applied to video calls; the customer wouldn’t see the unmade bed behind you. Search functionality is progressing from server to desktop, but the next step is into mobile devices. Some day your “always on” will come from a continual murmur in your ear from your digital assitant.

Kevin Kealy of AT&T’s security labs gave an attention-grabbing presentation of VoIP security. Summary: there’s isn’t a whole lot of it. One great quote was that 70% of the people calling an automated 411 directory enquiries system never realised they were talking to a computer, the voice synthesis and recognition is so good.

I keep hearing the term “VoIP subscribers”. This is nuts if you look at Skype. We need to track “VoIP desubscribers”. People who no longer have to pay a service provider for the trivial service of VoIP.

Last, but not least, was Microsoft. No surprise, but they announced the beta release of their new desktop communications client. Think of this as the “real time” equivalent of Outlook, incorporating presence, IM, and telephony. It looked good. But note the wording: Microsoft Office Real-Time Communications Server. They know they have two monopolies: Windows and Office. Everything must be tied into one of these two. So Word and Excel are now presence and communications enabled. Microsoft never crow about killing the competition openly any more. But for a lot of people in that room, they were announcing their businesses had been scheduled for execution. The Beast has spoken. They want to own the corporate desktop and office telephony. Be scared.