March 16, 2005

Whether to cry or laugh?

Two weeks back, Robert X. Cringely wrote a column discussing the predatory actions that access providers can take (have started to take?) against upstart VoIP providers. Since Cringely is an iconic figure in the technology industry and this piece appeared under the title of “The Pulpit”, it will be useful to critically review his analysis. As is true of any self important and soapbox lectures, this one contains statements that make you laugh and some that make you cry – mostly at the reasoning used by the speaker.

First let me summarize the essay for ease of reference. Many upstart VoIP providers, called “parasites” (he attributes the label to the incumbents, when it is really the “high priest” of the industry, Pulver, who coined this term and implored the incumbents to become one; but why clutter our minds with facts) are undermining the incumbents’ business. In retaliation, the incumbents are offering their own VoIP services and are handicapping their service by giving preferential treatment to their traffic. Unlike port blocking, this is not considered illegal and results in poor quality for the customers of the parasites. The only recourse the parasites have is to quickly develop innovative services that the incumbents will be loath to develop.

He seems to imply the major benefit of VoIP technology is low cost long distance calls. Even he admits this low cost is mainly facilitated not by technology, but by favorable regulatory environment. What a shame. IP Communications can make so many features available to its users. Why doesn’t he point out these features and lament about the lack of activity in this regard?

When AT&T launched its CallVantage service, their press releases never ceased to point out that unlike other parasites, they carry the VoIP traffic over their private QoS enabled network. So I suppose that there is a gradation even among parasites and that providers like AT&T will not be affected by the antics of the incumbents.

He states that this “web services war” will in the future be waged against services related to movies and music, impacting CinemaNow and Bit Torrent. He does not elaborate how lack of QoS will impact “store and play” applications. Of course he doesn’t explore the incongruence of QoS enabled network and “dumb” IP network. There is no clue as to what happens to a QoS enabled network when all applications start to demand higher levels of QoS. Is there any difference to a circuit switched network then? We can’t turn to his sage counsel.

He gives an example of an innovative service that the parasites can develop to counter the onslaught of the incumbents. It is a service from, where two users can download an applet in real time and use it to “listen to each other’s heavy breathing” (what a contribution to the social welfare) or whatever. This way there is no need to download and install an application a priori. Of course he does not suggest how this new innovative service overcomes the predatory action of the incumbents that overpower parasites’ VoIP service offering.

The problem with this analysis and other similar analysis is that it continues the “bellheaded” thinking that there is gold in POTS. With IP Communications there is no additional money in voice communications. If we reconcile to this, then as a group we will not be distracted by the gold rush and would be developing features that truly revolutionizes end-to-end communication.

Posted by aswath at March 16, 2005 06:10 PM
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