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The Personal Information Technology Report

June 4, 2002

In this issue:

A Template for a Next-Generation Phone Company

The Phantom Menace

A Template for a Next-Generation Phone Company

The story in brief: A Canadian independent uses a next-generation OSS system to do the previously unthinkable: give users a direct interface into its customer database. This aggressive approach to personal information technology services is possible through an innovative use of new technology that gets service out faster while matching service profiles to individuals, not street addresses - a key component of moving away from network-centric thinking to solution-oriented personal IT services. 

Aliant Telecom does not fear an Internet Protocol-based future. Quite the opposite: the company hopes to use IP to expand its operations beyond its base in Northeastern Canada.

Aliant Telecom owns the four operating companies that serve New Brunswick, Nova Scotia and Newfoundland. It has 1.5 million access lines in service and revenues of C$2.6 billion ($1.7 billion) in 2001, making it roughly equivalent to U.S. independents such as TDS and CenturyTel.

Aliant also operates wireless networks in Canada's Atlantic provinces. For substantial long-term growth, though, the company's strategy centers on a group of subsidiaries focused on next-generation IP networks and services, including a unit that offers information technology integration services to small businesses. 

In the May 21, 2002, edition of The Personal Information Technology Report, I wrote about the opportunity for local exchange companies to offer systems integration services to small and medium-sized businesses (SMBs). Aliant's AliantZinc unit, launched last August, is attacking this niche through a next-generation operations support system (OSS) that ties together Aliant's back office operations and gives customers access and control of their services through a front-end portal.

AliantZinc offers small businesses web hosting, e-commerce, virtual private networking, applications hosting, web development and general telecommunications consulting. To assemble service packages for customers, AliantZinc draws on the resources of Aliant's wireline and wireless operations, as well as on a network of developers and software suppliers. 

The account is king

While AliantZinc prefers customers and prospects to use its Aliant network facilities, end-to-end account control is the company's priority. If a customer is using a rival wireless network, for example, that won't kill the deal. "We've gotten past the point where we tell customers that they have to have X to get Y," says Brian Thompson, director of business development for Aliant Telecom. 

This end-to-end services strategy drives Aliant's OSS technology choices. The company ties together its back office customer information databases with a next-generation service creation and fulfillment system called xAuthority from Atreus Systems Inc., a three-year-old Cupertino, Calif.-based company. xAuthority then provides the end-customer with a front-end Web-based portal interface, which AliantZinc is marketing as MyOffice. 

MyOffice lets AliantZinc's SMB customers configure and manage their services in real time. The idea is to give an individual shop proprietor on Main Street the same level of service control that an IT director at a large enterprise enjoys, albeit on a smaller scale. 

The portal lets small businesses create individual service profiles for each of their employees, overcoming a major limitation of legacy OSSs, which tie all customer information to a fixed location. 

"[Legacy] OSSs don't give any information past the street address. They've never had to go beyond the address and identify the 50 employees and what services to deliver to them and how to continue to deliver them to those 50 employees," says Brenda Toonders, director of marketing for Atreus Systems

Many carriers blanch at the idea of giving customers a direct interface to their OSS databases. But today, when employees use their personal information technology services both inside and outside the office, there's immense value in letting users directly set parameters.

The xAuthority portal lets service providers go beyond the address and deliver services to specific users that their OSSs can now identify. At the same time, it gives the customer unprecedented control of their service profiles. In the case of a VPN, it means immediate assignment of IP addresses, email addresses, phone numbers, passwords and level of network access.

Once an individual user is set up, the xAuthority system looks through to the edge of the network, recognizing any type of user device or interface and correlating that with the user's data from the directory. So specific service profiles follow individual employees independently of either the device or the network that employee is using at the moment. 

At the heart of the xAuthority system is a policy engine that gives service providers complete, top-to-bottom, automated control over the creation, provisioning and management of service offerings, subscribers, equipment, computing devices and OSSs.

The key next-generation elements that make this comprehensive control possible are service descriptions, which are XML-based service templates Atreus has created that enable service providers to accelerate the development of demand-driven services; and service drivers, software modules developed by Atreus that enable service providers to quickly integrate service offerings across a variety of equipment, technologies and systems.

Service descriptions currently exist for IP network services such as site-to-site and remote VPNs, managed firewalls and tiered access bandwidth, as well as for the hosting of collaborative applications such as Microsoft Exchange. Service drivers run on equipment from Cisco Systems, Nortel Networks, Nokia, Efficient Networks, Check Point Software Technologies and others. 

Embracing - and selling - the IP services revolution

The MyOffice portal is just one of several new services that have come out of Aliant's Innovatia, an incubator of IP and next-generation network services. Through Innovatia, Aliant trials services using equipment from large and small vendors, seeking direct customer feedback with an eye toward fast deployment.

Aliant's story is a template for how other service providers could -- and should -- embrace personal information technology services delivery and management. It illustrates how service providers can still be important, relevant business partners with a largely underserved market -- small and medium sized businesses. 

The Aliant approach clearly illustrates what's necessary to evolve and thrive in the new telecom world: a much less network-centric focus and an emphasis on delivering services wherever, whenever and on whatever device the end user requires them.

Ubiquitous, user-oriented service delivery like that requires investment in next generation technology, as well as new ways of doing business -- such as letting customers breach the inner sanctum and touch the OSS. 

Customers are seeking personal information technology solutions without much regard for who supplies them. And they want those solutions now - think of Federal Express working with AT&T Wireless; Sprint PCS enhancing instant messaging for the corporate market; and the spread of Wi-Fi, to name just a few. 

In other words, the marketplace won't wait for carriers. In fact, many carriers already will be playing a game of catch-up.

But not Aliant, says Thompson, its business development director. That company intends to provide its solutions not just to users and business customers, but also to other telephone companies. 

When it comes to the SMB market, Thompson realizes Aliant is ahead of the curve. He believes it's only a matter of time before telephone companies, especially smaller ones, realize how potentially profitable this demographic is. Many may opt to buy a pre-packaged solution rather than build one from the ground up. Aliant hopes to be there with a turn-key answer. 

If past experience is any guide, they will. The company has parlayed its experience in maritime and ship-to-shore communications to become a leading supplier of voice and data networks to oil and shipping businesses on the U.S. Gulf Coast. Its location on the northeast tip of North America has well-served its trans-Atlantic networking venture, Stratos Global.

Aliant's network serves as its launching point for service, not the endpoint. Fundamental to its approach is the idea that service reach does not have to be defined by your network reach. Out of its relatively small network footprint has grown a business that extends throughout most of North America and across the Atlantic, proving that a phone company's vision can go beyond the point where its wires end. 

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The Phantom Menace

The story in brief: Instead of celebrating a possible proposal of tax credits for broadband deployment, ILECs should expect the debate over the proposal to expose their fondest myths about the cost, speed and demand for broadband access. 

Anticipation is growing that perhaps as early as this week, Sen. Joseph Lieberman (D-Conn.), the former vice-presidential candidate, will call for a national strategy on broadband development. 

During a visit to Wind River Systems Inc. in Sunnyvale, Calif., Lieberman, who is expected to seek the Democratic presidential nomination in 2004, said he was prepared to propose legislation to stimulate the rollout of broadband networks, which he considers vital to increasing American productivity and economic growth.

While the Senator's speech was short on specifics, he said he would propose tax credits to encourage broadband deployment. Such a proposal would set off a new round of lobbying by incumbent local exchange companies, particularly the Baby Bells, for whom tax breaks would mean a cheaper, less risky way to resuscitate their DSL plans, which they mothballed after the CLEC shakeout.

 
Any discussion about a federal broadband policy is welcome, considering the state of the telecom sector right now. But before Congress rushes yet again to stimulate business investment via tax policy, informed debate is needed. A clear examination of the issues is all the more vital when the subject is telecommunications technology, an area in which new developments and innovations are constantly competing for investment dollars.

In that regard, hopes might be higher that a well-informed broadband policy might emerge from Lieberman's office had he been visiting a telecommunications start-up deeply engaged in broadband access, such as Riverstone, Turnstone Systems or Atreus Systems (see above story). Wind River, the firm Lieberman visited, is a 20-year-old diversified manufacturer of embedded software systems for the aerospace and defense industry. Telecommunication products are only a part of its product portfolio.

To his credit, Lieberman did define broadband access speeds as 10 Mb/s, but then made a serious error when he said, "There is no focus on this need now." With that statement the senator completely dismissed the progress made in the past year on 11 Mb/s 802.11b Wi-Fi. Even more egregious, Lieberman made his ill-informed remark right in the Sunnyvale-San Jose area, which boasts the nation's largest concentration of Wi-Fi hotspots.

If Lieberman or any other lawmaker introduces legislation to stimulate broadband, it must not be founded on incorrect assumptions like those Lieberman reflected in his comments. Such assumptions include the ideas that broadband access is expensive to deploy; that it is expensive to purchase; that users don't need it and so must be encouraged to adopt it; and that broadband requires massive financial incentives to achieve ubiquity. 

The chief promulgators of these myths have been the nation's incumbent local exchange companies. Whatever the reasons for their continued mythmaking -- a firm belief the myths are real, a desire to preserve a monopoly on broadband access, etc. -- clinging to those broadband fables now could leave the ILECs in deep, dark, dangerous woods. 

Angry opponents 

For example, the investors, competitors, vendors and start-ups who are surviving this current industry shakeout view the ILECs as the villains. They'll point to the willful footdragging by the ILECs on deploying DSL once most of their would-be competitors went bankrupt. They will strongly oppose any government program that gives the ILECs an easy ride back into the broadband game, especially one founded on the increasingly misguided idea that broadband is expensive to deploy and expensive to purchase. That's simply a phantom menace.

First, significant progress has been made in managing the deployment of bandwidth in optical Ethernet systems. This technology, albeit a bit complex, is making fiber-to-the-curb type models cheaper and manageable, while giving service providers the ability to offer quality of service differentiation within an IP environment. This means complete independence from the ILEC network. In essence, a carrier can run a gigabit Ethernet line down a street and drop incremental bandwidth location by location with significantly less investment in loop and outside plant equipment. 

Then there's Wi-Fi, which has been globally standardized and is now at consumer-friendly price points. Thousands of businesses have already deployed Wi-Fi as an extension to their corporate LANs. Public Wi-Fi hot spots are springing up in airports and hotel lobbies. It's cheap, reliable and fast. It doesn't require digging up streets or spectrum licensing. It arguably is the best idea for mass broadband access to have come along so far. Wi-Fi too, bypasses the ILEC network.

Finally, there are cable modems, through which the majority of households with broadband access receive service. These also are standardized and provide reliable, inexpensive, always-on service.

The ILECs still hope to position DSL against these technologies, treating DSL is as if it's some kind of ace in the hole. Unfortunately, the value of a hole card also comes from knowing when to play it. By waiting so long, that DSL ace may now be a deuce - or maybe a joker.

Optical Ethernet, Wi-Fi and cable modems have attracted customers -- and investment dollars -- because the market could not, would not, wait for DSL. During the energy crisis of the 1970s, oil companies were accused of holding tankers offshore while waiting for the price of oil to go up. If that was true, at least they knew when to bring the tankers in. They didn't wait to lift anchor until solar power reached critical mass as a replacement for fossil fuels. 

Too late for DSL

It's too late for DSL to be a cornerstone of a national broadband strategy. And enough market force is behind Wi-Fi, cable modems, etc., to generate strong opposition that the ILECs will face if they attempt to ram through a DSL-only agenda. It's just too difficult to continue to spin myths in the face of the dollars-and-cents reality of new broadband technology.

DSL, once the cheapest and fastest way to deliver ubiquitous broadband, is now among the most expensive and inefficient methods, especially in the context of a new buildout. That's going to be the most powerful argument the ILECs will be up against. The government's goals about broadband haven't changed. Both political parties say it should be cheap and ubiquitous. A Gig-E optical link terminating on a group of Wi-Fi base stations can provide high-bandwidth service to a school, library, or hospital at a fraction of the infrastructure costs that DSL would require. It would be a mistake to think that these facts won't be laid out in front of lawmakers.

It will be a profound error if the ILECs try to position DSL as the best answer to the broadband crunch, and then try to use the position to justify tax breaks to offset an widescale, unnecessarily expensive DSL rollout.

On the contrary, if they are going to have any stake in broadband, they will have to pick and choose their fights wisely, and provide sound economic arguments. For example, there are still good applications for DSL. In rural areas and dense urban areas, it still makes sense because it's expensive to lay fiber, there is a large percentage of available copper loops and little retrofitting is required. 

Otherwise, given the pent-up anger at the ILECs for prolonging the telecom recession, it will be an uphill battle for the them to win support for tax incentives for investment if they are going to rely on solely on myths and misstatements about broadband demand and cost. Their current rhetoric will be shouted down.

No one's yet taken Sen. Lieberman publicly to task for remarking, in the middle of the nation's Wi-Fi hotbed, that there's no industry focus on 10 Mb/s access, but that statement is just the sort of tidbit likely to come from a Bell lobbyist. Sooner or later, a politician, trying to look like a leader, is going repeat an ILEC myth and be embarrassed. Don't think he won't remember where he heard that tall tale. It will be better for the industry if the ILECs turn the page and start a new story.

-- Steven Titch

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