Home North AmericaNorth America 2006 Modern telephony and our shrinking planet

Modern telephony and our shrinking planet

by david.nunes
Judy Reed SmithIssue:North America 2006
Article no.:4
Topic:Modern telephony and our shrinking planet
Author:Judy Reed Smith
PDF size:64KB



About author

Judy Reed Smith is founder of Boston-based Atlantic-ACM, a research consultancy serving the telecommunications and information industries. In addition to her activities at Atlantic-ACM, Dr Smith is the founder of Marketplace Analysts Inc, a merger and acquisition advisory firm, and ACM Health-research, a research firm for the healthcare and pharmaceutical industries. She is a member of the Technology Advisory Council at the Harvard Graduate School of Education and has served on the boards of a number of non-profit and education institutions. Dr Reed Smith has been published hundreds of times in technology and telecommunications industry media and is in high demand on the speaking circuit. Dr Reed Smith has been quoted and sourced in a wide range of business and mainstream publications, ranging from Kiplinger’s and the Boston Globe to USA Today and The Wall Street Journal. Judy Reed Smith holds a doctorate from Harvard University, a Master’s Degree from Boston University and an undergraduate degree from Skidmore College.


Article abstract

IP-based networks are now rapidly replacing traditional networks. Highly touted advanced technologies of the last decade such as frame relay and ATM (asynchronous transfer mode) are giving way to Multiprotocol layer switching (MPLS) which efficiently handles a number of protocols, especially IP. The advent of IP-based networks, and the convergence of networks and devices this has made possible, is not only shrinking the planet by bringing people everywhere into closer contact, it is changing economies, societies and cultures everywhere.


Full Article

From the formation of the Defense Advanced Research Projects Agency (DARPA) in 1958, to the ultra-wired world of the 1990s, and on to wireless communications services saturation at the turn of the millennium, information technologies have been rapidly developing into something that only yesterday was science fiction. In today’s communications world, even the term ‘telephone industry’ seems antiquated as bits and bytes of words, music, pictures and video flow through the air and across glass fibres. While ‘telephony’ may not accurately describe modern communications technologies, telephony continues to revolutionize society as profoundly as when Alexander Graham Bell forever changed the world by uttering “Ahoy” across a crude connection. Voice is now just one application – and a simple one at that – of a global infrastructure that transmits everything, from entertainment to business transactions, around the globe at 300 million meters per second. Modern telephony is shrinking the planet. Many ‘big thinkers’ accurately predicted the evolutionary path we are on today. In 1965, Toronto professor Marshall McLuhan predicted that electronic circuits would connect the world. In the 1980s, Massachusetts Institute of Technology (MIT) professor Nicholas Negroponte predicted that voice would travel by air and the pictures by wire, among other ideas born from a vision of digitization. In 1995, Ethernet inventor and 3Com founder Bob Metcalfe published his formulation of Metcalfe’s Law, which quantified the synergistic value of a network by pegging its value at approximately the square of the number of users on the system. Just two years later, economist and author Frances Cairncross published The Death of Distance, predicting that network saturation would end the economic viability of extra charges for long-distance connections and, therefore, that distance would no longer limit communications. Just last year, New York Times Foreign Affairs columnist Thomas Friedman published The World is Flat, A Brief History of the 21st Century describing how the world will continue to change and global opportunities will arise in a fully interconnected world. Collectively, these thought leaders have identified a dynamic whereby communication shapes and reshapes relationships, and networks with many points of contact are transforming businesses. Those dynamics, in turn, are shaping our social and economic evolution. Evolution within evolution Rapid evolution of communications networks has taken place beneath the surface of the broad-based progress of communications technology. The total volume of data traffic irreversibly surpassed analogue, traditional voice traffic in the late 1990s. Economists and businesspeople have followed this transformation closely. Seen from within the telecommunications industry, the transition from voice to data traffic predominance was a complex, indeed chaotic, process. Billions of dollars was spent in research, development and deployment. Many of the technologies that made the shift to data possible emerged from the laboratories into the markets and then on to obsolescence with mind-numbing speed. The transition was marked, indeed driven, by the increase in transaction capacity. This increase in capacity resulted partly from increased network capacity and partly from the increasingly efficient compression of the signals sent through those networks – in other words, we now send more traffic, squeezed into tighter packages, through bigger pipes. Our annual performance rankings of wholesale telecommunications carriers – based upon information from their customers – has demonstrated this technological evolution and the increase in wireline network capacity. These ‘Carrier Report Cards’ have provided the industry with important benchmarks and mapped the migration of traffic to and from a wide range of technologies. The report cards have effectively highlighted the life spans of numerous products and services. One such technology, frame relay – an early packet switching protocol that sends data cut into variable chunks (frames) that the receiving equipment reassembles – markedly increased data transmission speed. In the early 1990s, frame relay was a hot technology. Industry conference sessions devoted to frame relay discussed its economics, as well as a variety of potential uses such as Voice over Frame Relay, in the search for greater network economies of scale. Frame relay handled almost 16 per cent of industry data revenue in 2003, but by 2005 its share of revenues had shrunk to 13 per cent. By 2010, our studies indicate it will account for only 8 per cent of the traffic. Asynchronous transfer mode (ATM) was the next technology. ATM breaks data into fixed-sized 53-byte chunks, which, unlike frame relay’s variable chunks, are theoretically able to transmit video. ATM boasted better technical quality, and its ability to prioritise traffic provided guaranteed quality-of-service at the receiving end of the connection. ATM first emerged as a unified switching technology that could support both synchronous channel networking and packet switching; and sought to merge analogue, or traditional circuit-switched networks, with data networks. Although ATM incorporated frame relay, as well as a number of other protocols and switching technologies, it soon began to displace it as a more efficient means of managing network traffic. It is noteworthy that ATM also handles Internet Protocol (IP) traffic. IP is something of a super species in the evolutionary battle for network survival. IP is inherently upgradeable; it handles new compression schemes, for example, without having to make any changes to its flexible ‘IP umbrella’. This lets network operators economically handle all their traffic – voice, data images, indeed whatever comes up – using the same equipment and the same protocols on a single network and generates impressive economies. One need not discard current, expensive gear and buy new equipment for each new service or technology that comes along. Then too, the cost of maintaining a single IP-based network for all types of traffic is far lower than the cost of running separate networks for each type of traffic. Continuous network upgrades will always be needed, and will always require investment. Nevertheless, IP permits closely dovetailed upgrades to be measurable against real-world demand. This translates into improved metrics, and helps satisfy the disproportionate post tech-crash focus on time to return on investment (ROI). The emergence of upgradeable protocols, combined with increases in both signal compression and network capacity, has hastened ATM’s inevitable fade into obsolescence. Multiprotocol layer switching (MPLS) is generally the replacement of choice. MPLS unifies and manages information, just as ATM and frame relay did, but more efficiently. MPLS lets a variety of protocols share the massive capacity of today’s networks, and has eliminated the need to break signals into chunks such as frames and cells. Technological advances have created massive amounts of network capacity – much of it unused – and this has had a significant economic impact. The switch from traditional copper cables as the material of choice to glass fibre cables increased the capacity of the cables enormously. In addition, advanced signal encoding technologies and improved ‘head-end’ transmitters multiplied the transmission capacity of existing fibre to levels previously considered unthinkable. When this occurred, the existing fibre capacity, quite suddenly and unexpectedly, far exceeded predicted consumer applications or demand. Network owners found themselves sitting on massive, expensive, optical pathways of ‘dark’ — unlit or unused-fibre. With no market for the capacity, it no longer made economic sense to invest in the equipment to ‘light’ the fibre and a market, at cut-rate prices, developed for the dark fibre. Interestingly, the market for fibre overall is finally moving back to a more balanced, supply-and-demand environment. This is due more to the technological obsolescence of the equipment currently installed on existing networks than to increased demand. Absolute interoperability From the operator’s or service provider’s point of view, interoperability is second only to maximizing network usage in importance. The holy grail of networking in the 21st Century is the pursuit of absolute interoperability – that is the ability of any communications or entertainment device to communicate with any other communications or entertainment device and share information – often referred to as convergence. The drive toward absolute interoperability has resulted in the development of a general-purpose, open industry standard for voice and multimedia communications over any wired or wireless packet-based IP network, a networking architecture, known as IP Multimedia Subsystem, or IMS. IMS provides an accepted industry-wide standard that serves as a foundation for IP-based services – from simple VoIP to sophisticated data or video applications – providing seamless connectivity to and among IP-enabled devices, be it a mobile phone, a computer or even a TV monitor. IMS is the first significant move toward absolute interoperability for an untold variety of IP-based applications. The implications for networks of all shapes and sizes are significant. If we look at network evolution from the pre-Bell days of incompatible telephone systems, or at the pre-standardization Victrola phonographs that could not share records, and then at today’s standardised, highly connected networks, we can appreciate the need for the standardisation that IMS brings to the digital universe. IMS standardises the handling of high bandwidth multimedia content. The IMS experience is far from that of the frustratingly slow process of dialling a local phone number, of transmitting a small document or visiting a stripped-down mobile phone website. Services have evolved to a point where one can watch television shows on a cell phone or call relatives halfway around the world, with near-zero cost, at the click of a mouse. IP-enabled services now affect all aspects of our society, culture and economy. The travel agent is a dying breed; today consumers research and book travel themselves on the Internet. A painter in South Africa can now sell her artwork in lucrative Western markets. The appliance manufacturer in Germany can monitor his entire supply chain online in real-time. It took billions of dollars investing and years of trial, error, marketplace evolution and other investment for this, and much more, to happen. Whether or not a given investor found it worthwhile is relative, but the greater good for humanity of the value of these Herculean efforts is unquestionable. When we achieve absolute interoperability, the full power of Metcalfe’s Law will be realized. Society has made previously unimaginable progress in just the last decade with largely non-interconnected networks. Today’s interoperable network environment, which facilitates the interchange of information of any type between networks and applications using just about any IP-enabled device or media, promises even greater leaps forward in creativity and productivity. The new networks are shrinking our planet, so every individual will be able to influence many – and many will be able influence the individual. The implications of this – for our culture, competition and commerce – are profoundly intriguing. What will emerge from this ultra-connected world is unknowable and unimaginable, except, perhaps, by today’s science-fiction greats.

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