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If you want to get your head round fibre - don't put it in the sand!

by Malcolm Matson posted at 2006-09-24 23:27

Last week I was very pleased to be a guest of the City of Den Haag (capital of the Netherlands) and to be the keynote speaker at what I believe is their 6th annual Telecoms event.  My presentation was entitled, "Why Open Access Networks - the detail of conventional telecoms" and you can view it here.  Unlike most such gatherings, this is a short, sharp, and sweet affair - lasting a mere 3 hours with a handful of speakers and this year, more than 420 invited attendees.  It was a scorching hot day in the Hague - and the atmosphere was even hotter in the church where the event was held by the time I had finished.

All the presentations were streamed live to the internet and you can re-live the entire experience if you wish from here.  Only three of us spoke in English - Esme Vos of MuniWireless, Konstantinos Apostolatos, Director of Arthur D. Little Benelux and myself.  I  understood chatting with various people after the event that KPN's speaker (Paul J. Hendriks, General Manager Business Broadband Services) who followed me, was using the word 'open' extremely frequently in his presentation but with that special meaning that only incumbents tend to use!  (see my earlier blog on this redefinition of the English language).  Esme was her spendid outspoken self, making clear that in the US at least, there is a voracious appetite for new, open access and city-wide 'free' wireless networks.  Her presentation is certainly worth looking at.

But I save my draw-dropping astonishment for what the assembled audience heard from Mr Apostolatos.  Knowing Arthur D Little from the great old days when, in their Boston headquarters at Acorn Park, they had some of the most creative and disruptive technologists of our age.  I was somewhat taken aback by the extent to which this organisation now appears to be more of a mainstream 'keep the clients content ' consultancy.   Fair do's Mr Apostolatos did honestly acknowledge that ADL's recently published broadband report on EU developments was sponsored by a competitor of KPN - and so I supppose such sponsorship needs a modicum of balance.  Or as Konstantinos put it,  "I have good news for the telecom industry and I have bad news for the telecom industry."   You can watch and listen to Mr Apostolatos in person and also download his presentation, but there is one choice quote I offer you:

"There is no such thing as a business case today for fibre to the home (FTTH).  You can calculate it any way you like - it doesn't pay off today and it won't pay off for the next five years and it may not pay off for the next ten years.  You will see that FTTH will remain after 2011 and 2012 roughly 10-11% of the overall access market. ...there is more than enough broadband either present today or planned in the next few years in order to take care of all the needs that we have for the next years.  We have spoken for this report to a few thousand consumers and more than a hundred experts all over the world and it is fairly clear in the most optimistic scenarios, most of us normal human beings, will not have ten digital televisions at home at the same time so we will not need 200 Megabits per second bandwidth - sorry."

You know, when I was at the Harvard Business School many years ago, I am pretty sure that one of Arthur D Little's major clients was the Digital Equipment  Corporation (DEC), also located in Boston and founded by Ken Olsen who was described by Fortune magazine in 1986 as the 'most successful entrepreneur in the history of American business'.  Now I never met Mr Olsen, but I feel I know him well as I made reference to him in my presentation in the Hague and quoted his infamous prediction made in 1977 that, “There is no reason for any individual to have a computer in their home.”   I now  wonder now whether that may have come from an Arthur D Little report for DEC and not from the mind of Ken. 

200 megabit access capacity?  That's as crazy an idea to the general public as was the notion of travelling at 25mph when George Stevenson invented his 'pointless' steam engine.  Me thinks someone at ADL has their head in the sand and needs to start getting it around fibre!

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Wizards of OS4 - a 'read-write' experience

by Malcolm Matson posted at 2006-09-21 10:31

As most of you know, I undertake a pretty heavy schedule of speaking engagements around the world - promoting the concept of OPLANs and (hopefully!), literally 'opening minds to open networks'.  I am afraid that much of the time, I find I am speaking at events as a 'lone voice' for openness and that the message of the majority of the other speakers is being sung in a very different key.  On such occasions, I hope that those listening to my presenation gain more value, insight and encouragement than I do from listening to the other contributors.
Robert Horvitz - Open Spectrum Foundation and Malcolm Matson
Last week I was fortunate to be speaking at the international Wizards of OS4 event in Berlin.  This  was a very different state of affairs.  Focussing on the issues of 'openness' in a variety of contexts and disciplines and exploring with like-minded individuals how this contributes to a civil society, this under-lying theme of the convention was stimulating, cohesive and altogether informative - that's my take-away.  I met and spoke with a number of extremely enlightened and insightful individuals from around the world and without question, left with the feeling that I had gained more than I had given - the hallmark of any successful trade in a 'free market'.  Since the entire event was recorded and is freely available from the WOS4 website, I thought I could do no better than point you to a few of the contributions which informed and inspired me.  So a big 'thank you' to Volker Grassmuck  and his team for organising the event and inviting me to speak.  Here goes:

Lawrence Lessig, from Standford University and father of the creative commons is spending a year at the American Academy in Berlin - writing another book.  He gave a keynote address at WOS4 which, although it did not contain anything radically new but re-stated in new imaginative ways the core case for 'sharing and openness' which I and many others have been trying to proclaim for many a year - Lawrence was, as ever, compelling.   He has a rare gift in framing and articulating what I call the 'unconventional wisdom' and using powerful metaphor and imagery to get the message across.  Not to mention a new 'minimalist' split-second presentation style - all of his own - often with a single word on the screen.  Watch this presentation where he argues that the 20th century has allowed itself to become 'read only' era and only now, with the digital technologies of abundance are we 'rediscovering' that the human spirit is one that is fundamentally fed and feulled by 'read-write'.   You really should watch this presentation -  you will find it's message easy to incorproate into an OPLAN context.

Also - take a look at what is happening in Brazil which has emerged as the prime promoter of free culture, domestically and in international fora.  "We are going to tropicalize the digital revolution."   Under this motto from Brazil‘s Minister of Culture ,Gilberto Gil, the country is developing a broad range of activities for promoting digital culture.  

Finally, our Panel on Open Spectrum.   Chaired by Armin Medosch from London, joining him on that panel with me was Onno Purbo from Jakarta, Indonesia and Robert Horvitz, Director of the Open Spectrum Foundation, based in Prague.  It was good to get to know Robert after the panel (there we are together in the photo) and to share some common understanding of what is going on and where we are moving in this common drive towards user-controlled networking.  He is doing stirling work presenting regulators and public policy makers with the reasoned and well argued case for making more of the radio spectrum available as 'license exempt'.  Do support him and also John Wilson, who is carrying an Open Spectrum flag in the United Kingdom.  (John is an OPLAN Foundation Council of Reference member).   So try and take the time to watch the contributions from the panelists and watch out for Onno's "WokBolic" antenna - yes, made from a real cooking wok!    Couple that with the increased power levels being toyed with by various regulators for WiFi, and the idea of "wok-bolic-noodles" becomes a real possibility.   "Free food with Free Speech"  - now we're cooking!

 
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Monetising the Media? Monetising the minefield!

by Malcolm Matson posted at 2006-09-12 20:47

Last week I was fortunate to be one of the 120 'invitation only' guests of British Telecom to attend the 21st Century Global Summit held at their research establishment, Adastral Park (or as most of us still know it, Martlesham).   Described by the hosts as an "... exclusive summit for CxO level executives, leading innovators and luminaries from around the world  -  the premier event to discuss next generation products and services. The Summit is unique in bringing together media, telecommunication, financial services and global sourcing companies for the first time with the objective to share, learn and potentially collaborate in areas that will raise the bar in the industry."

A higher concentration of bright minds, inventive technologies and big budgets I cannot imagine.  Needless to say, BT outlined the aims and progress of its 21CN programme.  It is jaw-dropping in scale and scope and one cannot but admire the project management skills necessary to undertake this behomothic broadband project.   There is no doubt that BT has thought longer and deeper than most as to how to inhabit the new 'converged' territories.

But I left with a number of abiding memories and conclusions from those two days.  Let me share them with you.  When Her Majesty the Queen opened the BT Laboratories at Martlesham in 1975, few of us realised the impact these research laboratories and their brilliant teams of engineers would have on developing the seminal digital technologies of the second half of the 20th century (silicon [chip] + silica [fibre] + spread spectrum wireless) around the converging, nay colliding, industries of computing, telecoms and broadcasting.  I remember my first visit to Martlesham in the late 1980s and being awestruck at some of the brilliant innovations and but bewildered as they were assiduously patent-protected and then placed on the shelf to ensure they did not see the light of day before it suited BT and its slow, migratory, asset-milking march to the future.  ADSL was one of those technologies being developed when I was there - but the telecoms cartel had determined that ISDN was "step 1" and only after that, "step 2" .... ADSL.     Two decades later, BT is lifiting its foot to take "step 3" - 21CN.  Only I fear this will one will cause them to trip over!

Another over-riding impression from the 21st Century Summit was the near universal appreciation amongst those attending that something special and entirely new is afoot.  Call it "web 2.0", or "social networking", there was general unstated acknowledgement that the likes of YouTube are shaking the world ... the statistics speak for themselves - founded in February 2005 and within 18 months has become the 16th most visited site on the www; accounts for 29% of the US multimedia market; has over 2.5 billion video views in a month; helps unseat three-term veteran Sen. Joe Lieberman at the ballot box ... and is FREE!   Little wonder everyone at Adastra Park last week wanted to convey the impression that they understood what is going on and the impact and opportunity it held for their companies.  Each and every one of them, from their various perspectives, claimed to have a good handle on how to monetize this minefield.

Three words were on everyone's lips .... "convergence", "content" and "open".  I am not sure that the assembled executives really grasped the implosive impact of these three technology-driven trends.  One of many vigorous conversations I had was with the CEO of a major public company who did not seem to see that 'open' is almost the antithesis of 'content' (i.e. something contained and closed inside something).  So many of these major corporations just do not have business models that are pliable enough to cope with a world of mashing and peer-to-peer 'conversation'.   It's a shame really, because for a century, it was these very values that made the telephone such a 'must-have' and such a world-changing success.   No 'content' - just conversations, and with no content, no differentiation between 'consumers' and 'creators'.  I pointed out to him that all the world wanted to do was to use the low-cost digital technologies of abundance that anyone can purchase over the web or from their local WalMart, to 'converse' in a richer and more multi-faceted manner than the scarcity of the telephone network would ever permit.  I not sure he got it I am afraid.

And I am not sure BT gets it either!  At one major plenary session on the second day, I hear two senior BT managers make the following statements, without blinking an eyelid or without realising what they were implying.  Nobody in the audience picked it up either, but it is there for posterity on the hard-disks of the film crew that video-recorded the entire proceedings.

Al-Noor Ramji, Chief Executive Officer BT EXact and Group CIO stated, "At the end of the day, we (BT) are a telco... and by that I mean, we are fundamentally an infrastructure company".

Five minutes later on the same panel:

Neil Rogers, Managing Director 21CN says, "We are fundamentally a services company"

Of course, they are both absolutely right - and that's the problem.  (Just like that horse in my last blog entry!)   BT, like so many telcos faced with these shifting tectonic telecom plates, find themselves with assets supporting one, and earnings expectations based on the other.  It reminds me of the anecdote of an Irishman who, when a lost stranger asked him the way, answered: 'Well, if I were you I sure wouldn't start from here.'

But BT, like many incumbent telcos, have literally hundreds of brilliant businesses and thousands of highly talented individuals within the group.  It would be a shame if, by trying to hold them all together, it all fell apart.

Oh, and did you see the front page of Monday's Financial Times?   "Sell-off U-turn by Telecom Italia".  The story went on, "Telecom Italia is considering a radical restructuring of its operations in a move that could see the Italian market leader sell all or part of its network and mobile telephony arms to concentrate on broadband and media services".  Sounds pretty drastic, eh?   
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Re:Monetising the Media? Monetising the minefield!

Posted by David Deans at 2006-09-14 16:40
No surprise, BT is no more (or no less) 'troubled' than its peer group here in the U.S. market. That said, 21CN is the product of a legacy technology-centric organization that is attempting to develop a forward-looking business strategy -- with their various vendor and content partners by their side.

The telcos, collectively, are the victims of circumstance. Having acknowledged that they didn't have the talent to address the growing intersection between the communications and entertainment sector, they sought the guidance of their partners.

Unfortunately, most of these partners can't see beyond their own vested interests. Moreover, many have the same myopia as the telcos -- they believe that a forward-looking strategy can be conceived by reviewing recent history, instead of observing real-time trends and imagining the future implications.

IPTV is a perfect example of this phenomenon in action. Telcos originally viewed the incumbent pay-TV service providers as the only real competition, and developed plans based upon those 'rear-view mirror' assumptions.

The reality: an abundance of over-the-top video program delivery models; without the restrictions of linear 'channel' thinking; with direct-to-consumer targeting; all based upon personal interest and lifestyle attributes -- clearly, none of these market developments were taken into consideration by the telcos, or the expert advice that they received from their partners.

IMHO, the solution to this problem won't likely be found by an engineer in Adastral Park, it will be uncovered by a skilled marketer with an open mind who chooses to focus on in the marketplace, while observing the very customers who will ultimately provide the direction.
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