This is not the first attempt to build the Next-Generation Network (NGN). Back in the 1980s, when the carriers controlled innovation, they had come up with a wonderfully complex architecture for voice, data, and video services, called the Broadband Integrated Services Digital Network (Broadband ISDN). This architecture was layered upon a standard protocol called ATM—Asynchronous Transfer Mode—and those 53-byte cells were deceptively simple. All the real complexity was in the multiple adaptation layers, which allowed very different services to be successfully adapted to and carried by the relatively uncomplicated ATM transport layer, and in the signaling required to make, manage, and tear-down connections.
As we all know, Broadband ISDN took years of preparation, as the standards bodies tried to design in every conceivable requirement before the standard could be finalized and equipment could be built. In the meantime, the Internet happened, using a good enough protocol which couldn’t do one tenth the things ATM was supposed to do. But the things it could do were what were needed back then, and it was extensible in service. The current concept of the NGN is emphatically not the Internet. The NGN is in reality Broadband ISDN mark 2, leveraging Internet technologies. So is it all going to end in tears again? Hard to say—the NGN specifi cation roadmap is now in the hands of all the usual carrier standards bodies, the ITU-T, ETSI, ANSI, etc., and stretches out past 2009. However, unlike with ATM, the new NGN is leveraging protocols and standards that have some real-world experience behind them, and it’s tackling problems of multimedia service networking that we actually have. So it’s got to be in with a chance.
Let’s assume the new NGN is one of the right answers to the world’s networking problems right now (many would disagree, but the premise of this book is that it is near enough). A related question is whether carriers will be able to make the transition from their current networks, processes, and systems to the next-generation network. It will neither be easy nor cheap, and some certainly won’t make it. Let me put it like this. Carriers are typically large, complex organizations with poor customer relations and an unusual resistance to change. The next-generation network is a concept and architecture for a complete reconstruction of the way carriers work, based on Internet technologies. Putting the two together, it is obvious—we are going to have a problem. It is worth reminding ourselves how the Internet came to be. It was certainly not driven by the carriers (although it used their pre-existing transmission and switching networks). The Internet was driven by new-economy vendors like Cisco and a new class of communication companies, the ISPs. We even had a name for the new and old guard: net-heads vs. bell-heads, those who “got it” and those who didn’t.
Well, 10 years later carriers have belatedly “got it,” or at least the technology part. Th e Internet is real and its technology base is here to stay. Th e old carrier dreams of ATM and Broadband ISDN, which they clung to for so long, have fi nally evaporated. Th e task now is to re-tool with IP-based platforms. Will the carriers succeed in remaking themselves? Has the Internet merely been a historical transient, a brief period of glasnost before the reimposition of centralized carrier control—business as usual? When I worked as a carrier architect at Bell-Northern Research, a precursor to Nortel, it seemed to me that our carrier customers had it easy. Carriers had networks, customers, and recurrent revenues. If they did nothing but keep their equipment running, they got paid. By contrast, in Nortel, if we didn’t make new sales every day, we didn’t get paid at all. We had to struggle for lunch. Many of the people who work at carriers, perhaps even most of them, are not directly involved in the day-to-day operations that keep the cash fl owing in. They do things like network planning, product development, marketing, and strategy. Yet at the heart of the carrier is a rigid, process-centric hierarchy: carriers have lots of customers, and serving them all needs a complex machine of processes, people, and IT automation. Changing this machine is difficult: much easier just to layer the new upon the old, a technique as old as history. When Troy was excavated in modern Turkey, it was found that the site was composed of nine cities layered one upon the other, dating from 3000 B.C. to Roman times. Carriers have their historical layers, too: ancient networks like Telex, asynchronous (PDH) transmission on co-ax or microwave, strange pre-digital voice switches (although most of these are now gone), and X.25 data switches. These are layered below circuit switches, frame relay switches, and the more modern SDH transmission network.
Finally, we see the most modern layers such as wave-division multiplexing, IP/MPLS routers, and SIP servers transmuting to IMS call session control function devices in the next-generation network. The 40 or 50 years of network history embodied in the most venerable of our incumbent carriers is paralleled by a similar museum of IT automation: old computers, old programming languages, and old paradigms of computer network architecture. The processes and manual work-arounds that made all this operate end-to-end are still there, and it’s just too expensive to modernize them, given that these are legacy products and platforms. It’s just that these legacies have real customers with real revenues and the case for keeping them alive seems to win out year after year. Given the sheer density of distinct roles, processes, automation systems, and ad hoc interfaces needed to keep most carriers in business, the process of transformational change feels like wading through treacle. Initiatives spawned by senior management get bogged down in the middle management bureaucracy and peter out. Expensive programs flow around the edges of the real problems and fail, wasting millions. Incremental programs—adding something new—often do succeed, but leave the legacy heartland untouched, and operational costs continue to rise. Yes, transforming carriers is hard work and attempts at transformation fail far more often than they succeed.
Paradoxically, vendors find change easier than carriers. Lacking recurrent revenue flows, the vendors are more exposed to the volatility of the market—a fact plainly seen after the collapse of the Internet bubble in 2001–02. Market forces smash though the organization and it has no alternative to laying off people, closing some divisions, and reorganizing others. This brutal, creative destruction removes bureaucratization, incompetence and now-redundant activities, and forces modernization. But on the carrier side, even the bankrupt carriers were left operationally intact so they could maintain services to their customers. Clearly superfl uous staff were laid off , but internal products, processes, and automation were not much changed. “Technology,” starts with a review of the failure of the previous attempt by carriers to re-tool for the future—Broadband ISDN.
I then examine in detail the Next-Generation Network as a set of technologies and capabilities supporting multimedia interactive services, specifi cally IMS. Th e third chapter looks in detail at TV delivered over the Internet and Video-on-Demand, but I pay equal attention to business models and changes in the value chain. Finally in this section, I take a look at carrier IT renovation programs. “Transformation,” I look at how carriers have attempted to remodel themselves as IP companies. Carriers are perennially trying to move their businesses away from being “mere bit carriers,” but we are entitled to ask whether it is always and everywhere such a bad thing to be a bit carrier, and what the alternatives really amount to.
The alternatives open to a carrier depend on its position in the marketplace—is it a large generalist, a small niche player, or stuck in the middle? I review some influential thinking about market structure and company strategies. Business strategies for next-generation networks are about more than technology and marketing. I next examine how to choose the right people and the right roles for transformation projects. It seems obvious that the personal characteristics and skills needed to drive change are markedly different from the more operational and routinist aptitudes needed to run a well-oiled (or even badly oiled) machine, but somehow this has been ignored in program after failing program. I finish this section with a “worked example” of how to start up a major change program, and show how personal style can be as important as methodology. “Business and Technology Issues,”
I identify some more innovative business models. Service Providers such as Vonage and Skype have redefined what voice means for the portfolio, but what has been the carrier response? Proposing to block their traffic has had at least as much air time as more forward-thinking business models and public resources such as Spectrum, which have hitherto been used “free” by carriers, are at last being monetized through such mechanisms as public auctions. A good thing or a bad thing? I then look at Peer-to-Peer Networks, both how they work and the associated politics, economics, and security issues. Finally in this section, I examine the prospects for the automation of natural language understanding and production.
You may have had the experience of “talking” with an automated call center agent to book a flight or a hotel. Unless your transaction was extremely conventional and routine, you may have encountered problems that resisted all attempts to “back out.” Our next-generation networks are still primarily mechanisms for transporting conversation, yet the networks themselves do not understand what is being said. If this changes over the next few years, what will be the implications? We get down to “Business Strategies” in detail. My anchor concept here is that of value nets and market power.
Business strategy is fundamentally economic, and is about securing market positions where premium returns can be achieved. In both consumer and business segments, carriers and the NGN are embedded within broader value nets, including content providers and systems integrators. Who wins in this game? I look first at prospects for the incumbents, then at strategies for alternative, competitive network operators, and finally at the consumer market.
I conclude that all is not doom and gloom, but the relentless encroachment of commoditization is in fact the back story. Will the next-generation network mark the reimposition of central control from the carriers, damping down the spirit of freedom and creativity that fl owered on the back of the unplanned and unanticipated Internet? I address this fundamental issue in the conclusion.
