On July Fourth, the United States' ISPs should remember this: Interdependence fosters independence. Broadband service aggregation is possible, and could deliver extraordinary profits for everyone.

by Patricia Fusco ISP-Planet Managing Editor [June 28, 2000]

The slow deregulation of the telecom industry continues to bring about sweeping changes in the way that businesses do business, but deregulation apparently has not changed the way industry insiders scrutinize high-speed data services.

In June we saw regional telecom companies and competitive local exchange carriers come to terms and begin to pump blood through the heart of the Federal Communications Commissions' November 1999 line sharing order — much needed CPR.

But do they really get it?
At the same time, market analysts utilized old-economy methods to determine that data CLECs like Covad, NorthPoint, and Rhythms are carrying a frightening debt load.

Analysts seem to turn a blind eye toward a force which is transforming how data CLECs and broadband ISPs intend to profit from supplying the buckets of bandwidth that digital subscriber line services make possible. Market specialists and industry insiders predict that the forthcoming glut of bandwidth would force prices down and decrease potential profitability.

How fitting that an old-economy computing company is straddling the bridge of technology to deploy new-economy high-speed services, which just may hold the key to transforming the forthcoming bandwidth boom into a sonic boom of broadband profits.

Net results
Network Equipment Technologies is multi-service wide area networks supplier used by enterprises, government organizations and carriers in more than 75 countries. Its multi-service WANs and its ATM products integrate voice, data, and video traffic with ATM, Frame Relay, IP and ISDN capabilities for mission-critical applications.

Recently, Network Equipment Technologies ventured away from its WAN-based business core to do business as net.com. In doing so, the company developed its SCREAM200 Service Creation Manager. The program offers an open, non-proprietary service manager that enables CLECs and ISPs to rapidly set-up new services, which can increase their competitive edge and potential profitability.

Thirty-year telecom industry veteran Bert Whyte, net.com president and chief executive officer, explained how the service creation solution works, and what it means for broadband service providers.

Scream in black
"SCREAM200 sits at the edge of a core network, either behind the DSLAM for DSL service, or at the headend of a cable system," Whyte said. "Telephones or modems connect to access a network, behind that is the core infrastructure. There used to be a fixed wire at that point, now it's a software program. We provide an aggregation point for independent service providers at the edge of the core network, so customers can determine what services need directly from their provider."

It used to be that if an ISP or a CLEC leased a T1 or DS1, it tapped into the core network directly through a hardwired connection. If frame relay access was leased, it was made through a different type of fixed of connection. ISPs and CLECs were locked into long-term contracts, making it difficult to adjust and differentiate their services from rivals without breaking the bank on termination costs and substantial network testing.

SCREAM200 essentially puts the power of what services are offered, where and when, in the hands of an ISP or CLEC client. Because the system is software-based, service upgrades are seamless and what shareware that is provided over the system, is completely determined by the ISP or CLEC and their respective clients.

Another tea party
Whyte discussed the evolution of the business model that SCREAM200 has turned upside down.

"Twenty years ago, all computing was mainframe driven. What programs you ran depended on what an MIS department put on the mainframe," Whyte said. "The personal computer evolved, and individuals determined what software they ran based on what they purchased to add to the device. In our business model, you drive the network."

"The service provider is in control of what software it wants to use to entice new customers its way, while our software controls billing, software upgrades, customer authentication, account reconciliation, and more. It has the ability to understand who gets what services, and then helps the provider market new services," Whyte said.

Revolution now
In terms of time-to-market, SCREAM200 takes an 18-month to 3-year deployment cycle, and slashes it down to 3 or 4 weeks. Independent software vendors can drive distribution costs down by putting the buying decision in the hands of clients. ISPs and CLECs can diversify service offerings over the same cable headend or DSLAM access layer, while promoting new services to customers, and customers can then pick and choose among the provider's product portfolio to customize their connectivity needs.

While the net.com product sounds a bit Shangri-la-like, competitive forces in broadband services can not be realized without a continued deregulatory shift of telecom policies and an equally enlightened adjustment in the vision of corporate cable access providers.

Cable companies must take notice that independent providers can offer diversified cable-based broadband services over the same pipe, and they can each reap bandwidth-based profits.

Just as common carriers should have recognized that the opportunity for bandwidth-based profits from the massive DSL deployment was best collected in tandem with independent providers, long before the federal government's line sharing sanctions forced them to unbundle their networks.

The Declaration of Independence
This Fourth of July, it would be appropriate for the broadband industry to embrace the political philosophy poetically expounded by Thomas Jefferson in the Declaration of Independence.

The way in which Jefferson delineated individual liberty and boldly declared that "We hold these truths to be self-evident," was poetically perfect. He also put tyranny on notice and advised tyrants to stand down.

"In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people."

This timely history lesson is no different today; only the kings have changed. Broadband service providers must break free from the regulatory shackles and despotic gluttony that binds its.

If net.com can deliver a broadband Internet as mandated "of, by, and for the people," shouldn't industry leaders oblige?

Only an emancipated broadband Web can continue to nurture individual liberty in the spirit that has evolved to embrace the Internet rebel.

It's time to put the essence of Jeffersonian politics to work on 21st century high-speed communications. Competitive broadband access can emancipate online America from the current federal and corporate constraints that bind it, if they freely choose to do so.

—End