[NEC] 1.6: Dear Chariman Powell

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NEC @ Shirky.com, a mailing list about Networks, Economics, and Culture 

           Published periodically / # 1.6 / October 21, 2002 
               Subscribe at http://shirky.com/nec.html

In this issue:

 - Introduction: Letter to Michael Powell - Support "Fail Fast"
 - What's at Stake
 - Text of the Letter

* Introduction =======================================================

This issue is devoted to a single short letter, written by David
Isenberg (author of the seminal "Stupid Network" paper), edited in
collaboration with a small group of telecom analysts, and sent today
to Chairman Michael Powell of the FCC.  The letter outlines a
philosophical approach to telecom regulation in the age of the
internet.

The text of the letter appears at the end of this issue, and is also
at http://netparadox.com/, along with supporting links.

-clay

* What's At Stake ===================================================

The current crisis in the telecom industry is the clash of two 18th
century ideas - Alexander Graham Bell's telephone, and George Boole's
two-state system of logic, which became the foundation of digital
networks. For most of the last century, if you'd asked anyone which of
those two men's inventions was most important, the answer would have
been Bell by a mile. The phone was on the short list of absolutely
critical inventions, while Boolean logic was on a much longer list of
interesting mathematical curiosities.

Over the last 3 decades, however, that situation has been reversed.
Like the telegraph before it, the telephone turns out to have been
only a short-term patch, and digital logic is the invention of
long-term importance for telecommunications.

Almost every choice critical to the operation of the telephone network
turns out to have been a bad choice, and a hundred and fifty years
after Boole's work, the digital alternatives turn out to be the better
ones. Telephone networks assume that conversations must be given an
entire circuit for the duration of the call. Digital networks can
break up data into packets and share infrastructure much more
efficiently. Telephone networks are optimized for voice at every part
of the system. Digital networks treat voice as one of many possible
data applications. Telephone networks are optimized for synchronous
and one-to-one communications. Digital networks can support those
patterns of communication, but also asynchronous, one-to-many and
many-to-many patterns as well.

In addition to being philosophically superior, voice as a digital
application is now good enough for the early adopters of Voice over IP
to disconnect from telephone networks, relegating voice to just
another item of a large and growing list of broadband applications.

This is the transition from sail to steam, in other words, and the
owners of the sailboat cartel aren't very happy. The incumbent
telecoms are fighting against the change harder than the beneficiaries
of digital networks are fighting for it, because for the telecoms,
their existence is at stake. Their current strategy is simple: they
want the FCC to outlaw competition, or, if that proves to be
impossible, then they want to use the lever of Government regulation
to slow and weaken their competitors in order to be able to milk their
outdated network architectures and fee structures for as long as
possible.

We must not let that happen.

Read the letter. Pass the URL on. And if you are so moved, write a
letter to Chairman Powell yourself. He hears from the incumbents every
day. He should hear from those of us who will benefit from competition
more often.

* Text of the Letter =================================================

(Also at http://netparadox.com/, with supporting links.)

A Letter to FCC Chairman Michael Powell:
Support "Fail Fast"

The Hon. Michael Powell
Chairman
Federal Communications Commission

Dear Mr. Chairman:

We thank you for your leadership in FCC efforts to understand the
causes of the current telecom debacle, and especially for convening
the FCC's October 7, 2002, Telecom Recovery En Banc hearing.

We were dismayed that several of the En Banc speakers confused causes
with effects. We believe that balance sheet weakness, long-haul
overcapacity, and even the recent speculative bubble, are effects, not
causes. If we attempt to treat the symptoms, we risk missing the
causes and prolonging the agony.

We hold that the primary cause of current telecom troubles is that
Internet-based end-to-end data networking has subsumed (and will
subsume) the value that was formerly embodied in other communications
networks. This, in turn, is causing the immediate obsolescence of the
vertically integrated, circuit-based telephony industry of 127 years
vintage. CLEC, IXC and ILEC bonds used to purchase now-obsolete
infrastructure assets have become (or inexorably are becoming) bad
debt. Weak last-mile competition prevents the most powerful
technological advances from reaching all but a few customers; this is
the largest cause of long-haul over-capacity.

One En Banc participant, NYU Professor Larry White, had views that
seem consistent with ours. He recommends that we let firms that are
failing fail as quickly as possible. We believe that it would be
harmful if government actions prevent, delay or interrupt this
evolution. It must proceed if the United States is to continue to be a
leading contributor to communications progress, and if its citizens
are to benefit from the technologies that are now available and the
applications that they enable.

The telecom debacle is not a cyclical phenomenon. The telephone
network's technological base, and the business model under which this
old technology thrived, are obsolete. Recovery is not an option. We
can only move forward; how far and how fast will be determined by our
continued freedom to innovate. Let the United States learn by not
duplicating the Japanese banking experience in the telecom arena.

We need to see the current situation not as a disaster, but as a
natural event; part of a revolution in productivity and human benefit
as big as the agricultural and industrial revolutions.

Given these views, we urge the FCC to:

  * Resist at all costs the telephone industry's calls for
    bailouts. The policy should be one of "fast failure."

  * Acknowledge that non-Internet communications equipment, while not
    yet extinct, is economically obsolete and forbear from actions
    that would artificially prolong its use.

  * Discourage attempts by incumbent telephone companies to thwart
    municipal, publicly-owned and other communications initiatives
    that don't fit the telephone company business model.
 
  * Accelerate FCC exploration of innovative spectrum use and
    aggressively expand unlicensed spectrum allocation.

Mr. Chairman, we note with gratitude your impatience with antique
regulatory structures, and your attempts to embrace new technology.
Also, we acknowledge the burden inherent in the FCC's duty to ensure
the continuity of communications, especially basic dial-tone
continuity, in the face of such changes; we are prepared to lend
assistance as the FCC grapples with this issue. Notwithstanding, we
urge you to continue against the inevitable onslaught of those seeking
to preserve an impossible status quo. 

Sincerely,

-  Izumi Aizu, Asia Network Research
-  Jay Batson, CEO, Pingtel
-  Robert J. Berger, President, Internet Bandwidth Development, LLC
-  Dan Berninger, pulver.com
-  Scott Berry, telecommunications consultant, Darien CT
-  Michael Bialek, President, InfoComm Inc.
-  Scott Bradner, Harvard University
-  Richard Campbell, Worcester Polytechnic Institute
-  Douglass Carmichael, individual, dougcarmichael.com
-  Judi Clark, individual, ManyMedia.com
-  Anders Comstedt, Managing Director, Stokab
-  Gordon Cook, publisher, The Cook Report on Internet
-  Sky Dayton, founder, EarthLink, founder & CEO, Boingo Wireless
-  Timothy Denton, Internet attorney, tmdenton.com
-  Greg Elin, independent software developer
-  Tom Evslin, CEO & Chairman, ITXC
-  David J. Farber, Moore Professor, University of Pennsylvania
-  Bob Frankston, individual, frankston.com
-  Dewayne Hendricks, CEO, Dandin Group
-  Roxane Googin, editor, High Technology Observer
-  Charles W. K. Gritton, President, Broadsword Technologies, Inc.
-  David S. Isenberg, Principal Prosultant(sm), isen.com, LLC
-  Johna Till Johnson, President, Nemertes Research
-  Peter Kaminski, individual, peterkaminski.com
-  Shumpei Kumon, Executive Director, GLOCOM
-  Bruce Kushnick, Executive Director, New Networks Institute
-  Andrew Maffei, individual, Falmouth MA
-  Jerry Michalski, sociate.com
-  David Newman, President, Network Test Inc.
-  Matthew Oristano, former CEO, -  SpeedChoice, People's Choice TV
-  Mark Petrovic, individual, Pasadena CA
-  Jeff Pulver, founder, pulver.com
- Frank R. Robles, CEO, Neopolitan Networks, Inc.
-  David P. Reed
-  Charles Rybeck, Managing Director, Benchmarking Partners
-  Paul Saffo, individual, pls@well.com
-  Doc Searls, Senior Editor, Linux Journal
-  Clay Shirky, telecommunications consultant, shirky.com
-  Porter Stansberry, publisher, Agora Inc.
-  Ted Stout, CEO and founder, The ROI Institute
-  Steve Stroh, Editor, Focus On Broadband Wireless Internet Access
-  Brough Turner, CTO and co-founder, NMS Communications
-  David Weinberger, JOHO editor and Cluetrain co-author
-  Kevin Werbach, technology analyst, Supernova Group LLC

* End ====================================================================

Copyright 2002, Clay Shirky
Feel free to reprint, quote, or forward, so long as you credit me.