Paul's Tips

What is changing now that’s relevant to this discussion is the communications infrastructure. It may not matter how much capital Cisco, US West and others invest in the next stage of high-speed Internet access. Instead, it will be the smart group of vendors, telcos, ISPs and, yes, military conversions that will drive the next generation of global networks. For example, it is no secret that submarines can already communicate with optical transmission up to 4000 miles, and have been able to do so for some time. Could this mean that optical amplifiers will play a big role in the next-generation Internet? The “magic” will come to the applications that require high-speed access and microbrowser capability.

Too many corporate intranets are already tied to costly, slow portals that get bogged down in messaging traffic, much like AOL can with consumers on a busy e-mail day. However, as this generation of AOL “newbies” gets used to online services and begs to have the Web subsume their growing data appetite (more – for less money!), will these end-users really want to have their telephone, mail, TV, movie rental, virtual meetings and classroom-based education bogged down on one portal? Probably not. What’s more, visual components of key interest here are needed for e-commerce to really get the high growth rates. We will need another generation of internetworking technology development.

Is the Gold Rush over? Has it started?

The expansiveness of the Web certainly offers plenty of bandwidth for pure speculation, as evidenced in those famously overvalued ‘Net stocks, many of which are seeing some pullback as we go to press. Today’s gold mine can become tomorrow’s ghost town. I don’t need to list the escalation/de-escalation cycles of Internet stocks here; you can go to any market analyst and get the same scenario. The real investment opportunity, I underscore again, is in the communication infrastructure. That last mile to the house – the deployment of fiber cables and billing – are the central issues for the RBOCs to go forward.

It is ironic (and not all “pure” free marketers see it) that the applications fueling the speculation about the federally-funded NGI (Next-Generation Internet) and the UCAID Internet 2 development are telemedicine and higher education. Both of these applications were dropped by the RBOCs after much fanfare in the mid 1990s and very little return on investment to show for the development effort.

Why infrastructure now? Is the phenomenal growth of the Internet fueling the demand fires – or do applications requiring higher bandwidth still go begging? If you were to compare the 890 billion spent by AT&T in its acquisition mode to the $92 billion promised to fund development of Internet 2 by universities, research centers, vendors and the government, there is an interestingly close match for funding.

Video for real?

This new infrastructure of communications will finally make it possible to address the issues of video asset management as it relates to extending multimedia and video processing capabilities. Even though Ameritech seems to be the last RBOC betting on video dial tone, nothing is out of the picture for the next-generation ‘Net. One reason: broadband head ends, which are notoriously difficult to tune because of the RF component, will be very difficult to integrate into the packet switched AT& T network. Ditto for end-users still trying to forget the fiasco of ISDN and place their bets on first out-of-the-box ADSL.

The only reasonable profit center for the telcos, including MCI/Worldcom and Sprint, is in the backbone capability of the next ‘Net. For development of digital video networks, the big story is the adaption of the IP (TCP/IP was the original Arpanet backbone technology) network layer for all the different OC layers, which is based on Sonet technology developed by Bell Labs (now Lucent).

The Abiline project at the University of Chicago is one example of the layers of Sonet technology that is being studied for full-scale gigaPOP (Points of Presence) deployment. The range of applications for tele-immersion ranges from 2.46 Gb/sec (OC-48) to 9.6 Gb/sec (OC-192) with connection speeds that range from 155 Mb/sec (OC12) to 622 Mb/sec for OC 12. This is deployable Sonet technology expected to bind peer-to-peer relationships in near-real-time. The answer is to have the POP servers located as close to the university as geographically possible.

Pandora’s box

Who will write the code for this new generation of network devices that want to be attached to the “anywhere at any time” concept? Is it Java to Jini, is it CE to a Symbian terminal – or will it be Linux?

I invite you to e-mail me with your own thoughts as developers on that competition (elecimag@worldnet.att.net), since there are scenarios there to be explored in some depth – later.

At this early stage of internetworking development, we are more likely to see video scaling of the Internet work before we have any grand scale deployment of standard code. The code development for vBNS (very-high-performance Backbone Network Service) as defined in 1996 by Ucaid as a superset of NFSnet, is expected to combine the viability of incorporating differentiated broadband services into Wide Area Nets (WANs) on a national scale. The production code must include distributed storage with multi-cast video tools. These online content development tools have not developed yet and will require the creative content capability to be merged with the educational requirements of a university professor and scaled down to the level of that Mr. Holland in “Mr. Holland’s Opus”.

Fuel for net profits – n demand?

Even AT&T admits that the technical challenges to offer phone service over cable lines using Internet technology is very complex. The technology is only in the incubator stage and probably won’t be deployed until some time in 2001.

There are several vendors who are jumping on the high-bandwidth bandwagon today. The Enron Intelligent Network uses optical technology with built-in intelligence to capture a portion of the high-end market. The first applications are intended for the broadcast and content provider market. Entitled ePowered Media Cast and ePowered Media Transport, these network applications, developed in conjunction with Sun Microsystems, utilizes IP technology and the company’s patented InterAgent middleware.

The whole business, like that of natural gas provider Williams in the now-Intel-backed Williams Communications unit, came out of the broadband comm needs of Enron as energy explorer and provider. Talk about pipelines! Furthermore, start-up comm provider Conxion Corp. (San Jose, CA) has signed a pact with Williams Networks, which gives them a fiber backbone of OC-192 speeds in 125 cities.

And note: This concept of paying on-demand for services that a business requires is a highly profitable business. For example, if a Fortune 500 company has a specialized application such as image analysis that requires advanced digital photography, they can “rent” this dedicated portal with high-speed access instead of using the company intranet. Conxion has a similar business model with high-speed access up to OC-192. When Cable & Wireless stated that it would cost over $670 million to build an OC-192-capable network – anyone can figure out the profit in such an endeavor.

Over 75% of the applications-hosting business is derived from managed Web hosting, which can eventually be converted into application hosting, a market that is the envy of such vendors as Oracle and Microsoft. Other examples of ISPs getting access to large fiber networks include PSINet’s deal with IXC Communications OC-48 network and a similar network capability for Qwest from Apex Global Internet Services. The latter is significant since the ISP had to offer up equity for the transaction. By embedding Enron’s Interagent on every server, the network can be configured for event messaging, usage-based messaging and billing, bandwidth scheduling and user-defined Quality of Service (QOS) to the end-user.