The beginning of July 2007 held two things which caught my attention and may prove to be an interesting milestone in the road towards open access.  The first was big-scale.  Last week Mr Kevin Martin, the chairman of the US regulator, the FCC, came out and told a US newspaper what he has in mind for the 700 MHz spectrum auction in late 2008.  He talked about an 'open network' which would permit any wireless device to connect to it, and which would place no limits on the services that could be offered across it or by whom.  In other words, it seems he wants a pure mobile web, where customers can download any broadband application, and have no restrictions on the content that is served or on the devices that would be deployed by end users to access them.  It sounds to me like a flat rate, open IP architecture where devices will need only the most cursory adherence to the air interface, but where applications are pure IP, and most services are delivered over the web. Indeed, as one commentator has said, "It sounds like the halcyon days of the Personal Computer, where just about anyone could write an application." 
 
If Chairman Martin gets his way, this will spark the beginning of the end of the cellular walled garden as we know it, and offer a form of wireless network neutrality -  at least in this slither of spectrum.  He made passing reference to the idea that no downloadable software should be illegal, or should be able to harm the network, but apart from that hinted that there would be no restrictions allowed by the operator on applications – a far cry from the recently launched Apple iPhone, which is locked onto the closed AT&T network!
...

I am prompted to write as a result of a vigorous discussion that has been going on for some days on the topic of "Economic Sustainability of Community Wireless" on the forum of the World Summit on Free Information Infrastructure (WSFII).  It started as far as I was concerned by a posting a week ago from my good friend Vickram Crishna.  He wrote the following,
...

I have just returned from spending a stimulating ten days with an international group of OPLAN 'grass routers'.  I have been in Macleod Ganj, Dharamsala in northern Indian in the foothills of the Himalayas speaking and sharing at the annual WSFII Summit gathering.  I regard this informal network of enlightened geeks and social activists as one of the key change agents pioneering the promotion of local deployment of wireless open access networks in the developing world.  I may have been the only Brit amongst this inspiring group of over a hundred individuals from around the globe (inc.  Germany, Holland, Ghana, Colombia, Canada, USA, India, Afghanistan, Pakistan, Nepal, Philippines, New Zealand, Denmark, Austria, Tibet, Taiwan) but English was the undoubted lingua franca of this WSFI summit.

The Dharamsala Mesh Wireless OPLAN network which acted as host to the first few days of the WSFII summit is registered on the OPLAN website and although there is nothing particularly ground breaking in itself about this mesh network, the fact that it deploys 30 nodes to connect over 2,000 PCs over the most rugged and mountainous terrain at an altitude of around 2,000 metres, makes it a worthy example of just how flexible and powerful WiFi can be in the hands of a few enthusiastic techies and community activists who know what they are doing.  The network can be considered as one of the largest mesh networks in the world and covers over a hundred kilometers of rough terrain, situated as it is in the foothills of the western Himalayan ranges.
Dharamsala, originally occupied by the nomadic Gaddi tribe is now most famous as being the 'temporary' Indian home of the Dali Lama and a large Budhist community of Tibetan exiles many of whom have displayed huge courage and endurance to flee their Chinese occupied homeland by walking across the Himalayas.  The Air Jaldi network is maintained through the TibTech (Tibetan Technology Centre), located in the Tibetan Childrens' Village (TCV).  This community of 2,000plus children, many of whom are orphaned but many living in TCV because their parents, enslaved in Chinese occupied Tibet, have willingly sent their children into this Tibetan encalve in India in order to secure a better future and preserve the 'next generation' of Tibetans.  A more happy and self-disciplined 'big family' is hard to imagine ... and many of these gracious children are already digitally dextrous and thriving on being able to connect to the world via the internet-connected AirJaldo network. 
...

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!

...

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?   
...

For several years I have been speaking openly about the coming bloodbath in the telecoms sector.  I have argued that this will be brought about by the inevitable collision between the disruptive digital technologies of abundance and the obsolete business model of the telecoms sector, based as it is, on 'allocation of scarcity'.  Only decades of special interest pleading and lobbying by the massive and powerful vested interests in the telecoms sector have managed artifically to extend the life of a sector which, in a free and open market, would have been transformed years ago.

Well, last week marked a milestone!   "Blood from a Phone" was the headline in the respected LEX Column in the Financial Times on August 11th.  The story of course, was the news from Deutsche Telekom that it was significantly downgrading its forecast - profits down by 10 per cent for the current year and earnings 'stagnant' in 2007.   The shares immediately traded 7 per cent lower.  One of the 'sweet' side-stories here was the fact that back in April 2006, the private equity giant, The Blackstone Group, had splashed out €2.7bn (£1.9bn) on a 4.5 per cent slice of DT.  At the time, DT's CEO, Kai-Uwe Ricke had commented, "We are very pleased to have gained in Blackstone a shareholder with demonstrated expertise in the telecommunications sector".   Some espertise!  By August 11th, Blackstone's 'demonstrated expertise' in telecoms had delivered a €550m loss - and worse than that, when Blackstone acquired the stock, they undertook to hold onto the shares for at least two years.  Maybe I should not single out Blackstone as most of the major private equity groups are loaded to the gunnels with conventional telecoms and cable stocks which I remain confident in predicting, are facing a bloodbath of biblical proportions.  We ain't seen nothing yet!

But the irony was enhanced last Friday by the fact that on the same day, the UK communications sector regulator, Ofcom published the results of an extensive survey in a report entitled, "The Communications Market 2006".  While the likes of Deutsche, British and France Telecom are all busily buried in trying to cobble together triple or quadruple-play packages or capture 'content' which can be downloaded by the world for a pretty penny, reading between the lines of the Ofcom report, you can see that there is a new generation in the real world which is in quite a different space.  The report's summary states, "2005 saw rapid growth in the reach and usage of social networking websites (such as MySpace, Friends Reunited and Bebo), which allow users to create online profiles and connect with friends or others with similar interests. Our research shows that over 40% of adults with internet access have used these sites; that figure rises to seventy per cent among 16-24 year-olds, with over half in this age group using them at least weekly."  Moreover, the research found that under 24 year olds are watching seven hours less TV a week than the average viewer and 1.5hrs less than they did in 2004 and nearly twenty per cent are prolific bloggers!

What this tells you is that human beings are relational beings and as such, thrive on  'conversing' - interacting, chatting and communicating with other people, whether by voice alone, or by sharing video and other creative output which can enhance a relationship with other people despite physical spatial separation.  That's why the telephone was such a success!   Alexander Graham Bell did not invent a world of 'audio content download' - indeed, in the world of telephony, there is no differentiation between content 'consumers' and content 'creators' - we all just converse.  Now, thanks to the low cost availability of technology which for ages was the exlcusive domain of Hollywood, Fleet Street, Abbey Road and the BBC, we can now have our conversations enriched and enhanced in new ways which make conventional 'broadcast' models look old hat.

This human thirst for 'conversation' rather than 'content' will prove unquenchable and despite all the cries of pain and special pleading from the likes of Deutsche Telekom, public policy makers and governments would be wise not to try and put the digital genie back in the bottle.  About three years ago I was meeting with Rt Hon Patricia Hewett, MP, the then UK Minister responsible for telecoms (now Secretary of State for Health).  I made what must have been a provocative statement.  "Tony Blair's dream of a broadband Britain and all it heralds is incompatible with the well being of the telecoms sector as currently structured and operated - you can have one or the other.  Trying to achieve both will result in Britain losing both".

What the next generation appears to be craving is an 'open access' deployment of commuications infrastructure - an open INTERnet reached from an open LOCALnet (OPLAN) - and leave the rest to them.  I have no doubt that the creative genius of humans, liberated from being subserviant to the broadcast pinch-points of the past (film,TV, radio, press), will discover new ways of generating 'conversational' material which is the creative match of anything around today.

...and don't forget to sell those telecom shares - you won't again get the price that you can today!   And if you think I am just following the latest conventional wisdom - take a look at this earlier forecast of mine - that could have made you money too!
...

Back in September last year when BT (British Telecom - the UK incumbent telecoms operator) announced that having reached agreement with Ofcom, the UK regulator, on the establishment of a separate infrastructure division, it would be called OpenReach, I thought, "Here we go again!" 

Nobody is more masterful at redefining the English language than British Telecom and I take my hat off to them.   Back in the early 1980s when the UK led the world in public policy aimed at fostering the development of ‘next genus’ broadband networks – the term ‘broadband’ was universally used to denote a minimum of 2 M/bits symmetrical capacity.   Thanks to the drip, drip, drip persistence of BT (and the rest of the global telecoms cartel)and their remarkable success in influencing public policy and regulatory frameworks to shape the tempo and form by which the disruptive digital technologies of abundance are to be deployed, they have managed totally to redefine the term 'broadband' over the past two decades.  It now means something that suits 'them' with their outdated copper local networks and not 'us' as end users.  Broadband now equates to ADSL which offers (in whatever flavour) a mere fraction of the upstream capacity of that regarded twenty years ago as constituting 'broadband'.
 
ADSL is no more ‘broadband’ than their newly created access division is “OPEN”!   There is a growing understanding and appetite for truly ‘open public local access networks’(OPLANs).  Communities of all shapes and sizes around the world are beginning to plan and build OPLANs offering outrageously abundant bandwidth – access to and control of which, is not confined to the telecoms sector but is ‘open’ to all.  If BT’s plans were to develop a truly ‘open access’ network – then the UK would lead the world but we all knew that was not their intention with either OpenReach or their 21st century network - which will do wonders for their shareholders and very little for users.
...

I am in the City of Eindhoven (home of Philips) where I am advising the City of Eindhoven on its ambitious and well advanced plans to develop an OPLAN.  It is encouraging to see such an enlightened municipality as this, which expresses its main strategic objective as being that, "The primary value of, and benefit from, this network (in the short and the long run) rests with the citizens, businesses and institutions of Eindhoven as users".  And that is the essence of the OPLAN concept - enabled as it is by the fundamentals of the underlying digital technologies of 'abundance'....