Networking and telecommunication executives bemoaned the state of next-generation networks in the United States, but said the industry’s investment environment is rising from the ashes, in a panel discussion in Santa Clara, Calif. Last Thursday night.
Despite government attempts to foster competition and drive the deployment of high-speed voice and data services, the United States still is saddled with poorly utilized networks, the panel members said in a wide-ranging discussion hosted by the Churchill Club, a Silicon Valley nonprofit organization.
“In the U.S. today, we are twelfth in the world in broadband access … Our ability to observe and react and deploy broadband technology is woefully behind many countries in the world,” said Scott Kriens, chairman, president and CEO of telecommunication equipment vendor Juniper Networks Inc., in Sunnyvale, Calif.
The U.S. Federal Communications Commission (FCC) is at least partly responsible for the disappointing progress of broadband, several panelists agreed. The agency has a poor track record in promoting competition that could drive down prices, foster adoption of new data services and spawn new uses of the technology, according to Vint Cerf, an Internet pioneer and senior vice president of Internet technology and architecture at international service provider WorldCom Inc., in Clinton, Mississippi.
“The Telecom Act of 1996 simply didn’t get enforced by the FCC. If it had been, we would see competition on the twisted pair (copper phone lines), and I would predict we would see more competition on the other media as well,” Cerf said.
In addition, government should look beyond measures to make sure simply that consumers can choose among a DSL (digital subscriber line) provider, a cable operator, and a wireless Internet access provider, he said. Cerf said he once told FCC Chairman Michael Powell that the agency should foster “intramodal” competition, giving consumers several choices for each technology. Not all services are suited for or available in every area, he said.
“When you argue that they compete with each other, you may be right technologically, but when you’re in your house … (in some cases) you don’t get the benefit of those competing technologies,” Cerf said.
The discussion, before hundreds of participants in an IT industry still reeling from the dot-com and telecommunication financial bust of the past few years, also frequently turned to prospects for a recovery.
Participants agreed the shakeout had made the industry stronger overall, with Juniper’s Kriens comparing the bust to a forest fire that occurred naturally and left the forest floor clear for new growth.
The current lull may also be a time of opportunity, another panelist said.
“I certainly think it’s a good time for telecom-related startups right now, because they’re not expected to have revenue and product for 18 to 24 months, which is about when we think, on average, a lot of the telecom spending is going to pick back up,” said John Coons, a vice-president at research company Gartner Inc. and a longtime watcher of the networking and telecommunication hardware industry.
New uses for networks, such as video-on-demand that can be downloaded in seconds, will drive demand for fatter network pipes just as new PC applications have led to more powerful PC microprocessors, said former Intel Corp. executive Dave House, who is now president, CEO and chairman of broadband networking equipment maker Allegro Networks, in San Jose, Calif.
However, adaptation to new networking models will create challenges for various kinds of service providers in the medium-term future, Coons warned.
“There’s probably going to be a large discontinuity out a few years, as the content folks, the cable folks, the telephone folks, the data folks are all converging on the same piece of business,” Coons said.
