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The End of Telecom As We Know It?
The End of Telecom As We Know It?
By: David Geer
Jan. 1, 2000 12:00 AM
Most rainbows are colorful shining heralds that a storm has passed. "Project Rainbow" leaves us in a fog as to what is to come. So do frequently named participants such as IBM, Intel, AT&T, and Verizon by their silence. At its vaguest, Project Rainbow is a consortium that loosely ties at least the aforementioned companies together. According to a consensus of surrounding industry hearsayers, the purpose is a serious verbal rumination about the plausibility of a nationwide 802.11 network that all participants could profit from. The fact that Project Rainbow exists with such certainty while remaining so unidentifiable is part of its attraction for investigation, reporting, and discussion.
Project Rainbow seems to be a loosely knit rallying point for certain known and unknown tech-sector giants to discuss how to take advantage of the popularity of 802.11 (WLAN) hotspots. Administering 802.11 as a nationwide service, and reaping profits is the goal. Building out additional hotspots, enlisting the cooperation of service providers, and agreeing on profitable billing models are certain to be under consideration by those at the Project Rainbow discussion table.
According to Adam Needles, principal at Alescor Group, "Project Rainbow is a loose industry attempt to address a need that's really not being filled right now." The need is for wireless broadband that truly is broadband. U.S. 3G services have failed to deliver speeds above 56K.
IBM, Intel and the Carriers
Some forecasters portend that carriers are in a position to profit from WLAN. "Carriers such as AT&T and Verizon are looking for a less costly way to service customers," says Needles. The premise here is that the free open spectrum would provide the carriers with sufficient savings.
What's to stop IBM and Intel from circumventing the carriers completely? Is a cooperative gesture easier than removing the mask and moving ahead in direct competition with the telcos? Is this a way to let the fight die quietly? According to Carl Ford, VP of community development, Pulver.com, "Intel and IBM together have a better understanding of all the carriers' troubles than any other systems integrators around today." Will this understanding be used to bring the carriers on board or to leave them behind?
Needles rightly asks these hard questions: "How do we make a viable business model out of this service? Who's paying for it? What is the critical mass and cost of infrastructure to make it happen?"
The obvious reply is that the hardware manufacturers already have a viable business model and the carriers have little hope of finding one. All IBM and Intel have to do is sell the equipment and provide the connection, retaining the option to allow the service to remain free as long as the frequency is free, or to institute an attractive, minimal charge. They would profit from hardware sales so they wouldn't have to lean hard on the service for revenue. At the same time, they'd be gaining control of the market and shutting the carriers out.
Making the Point
This is exactly the point. The population of mobile enterprise users will continue to grow and by the time that market is large enough to support a nationwide network, IBM and Intel will have jockeyed to adopt it. Businesses will pay for it by buying the WLAN hardware. Individual subscribers will pay for it by purchasing the devices and LAN cards, perhaps for a nominal fee.
As Alex Lightman, CEO of Charmed Technologies, logically predicts, "I've been saying for years that the computer industry and the communications industry will converge, but where everybody thinks it's sort of nice and everything will be split 50/50, the computer industry will emerge dominant.
"Ultimately there won't be a charge for per-minute communications. It will either be something that's incorporated in the hardware and the service contract or something that's done in a monthly fee. So Project Rainbow to me is the beginning of the end of telecom as we know it," he says.
It will be interesting to see if and when the telecom industry's household names will begin to show signs of taking an "if you can't beat them, join them" stance, and buy in as much as possible to survive. The telcos would need to have some control over the resulting convergent technologies to stay in the game.
The Internet Is Pulling the Telcos Away from Their Familiar Framework
John Harrison, cofounder of Ecutel, stated that in about two years, more than 80% of the U.S. workforce will be mobilized. According to Dr. John Rasmus, VP of business and corporate development, GRIC Communications, "You've got an inexorable shift toward remote-centric enterprises."
Businesses want employees in the field, face to face with customers. Teams are getting together remotely and need all the utilities of a stationary office in the mobile environment. Companies see it coming. IBM knows, Intel knows, so like hungry dogs waiting for the meat to fall off the table, perhaps they're waiting for a certain plateau along the way to that 80% workforce mobility before jumping in aggressively. While they're waiting, they have ample time to strategize.
U.S. carriers are no more likely to work with each other than they are to work with varying protocols. Ford, of Pulver.com, adds, "The wireless carriers don't show any signs that they like the idea of cooperating. I mean the U.S. is nothing like Europe, where GSM made it so that you have multiple choices and everybody roams together. My own personal experience is that there's a lot of distrust among carriers. It's hard for them to see how IBM and Intel are going to get the incentives right to get carriers to work together."
But why would IBM and Intel even want to try?
in Some Form
We currently see Wi-Fi popping up at Starbucks, hotel chains, and in airports, and more business consumer hotspots will become Wi-Fi hotspots. We have seen or will see hotspots on airplanes and trains, and in malls and metropolitan gathering points where people break for lunch.
On the Highways
Global Marketplace Analyses
There seem to be subtle comparisons between the fall of the Roman empire and the coming and going of entities of mass power. Do the major telcos presume too much security in their lofty position? Are their bureaucracies too slow for mobility, too resistant to change? Is it already too late for them?
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