Sunday, February 25, 2007
9-1-1 needs emergency help! It is not the the technology but the lack of regulatory vigilance, administrative inefficiency, executive indiscipline and ethical misbehavior that have now led us to a situation where we need to fund the funding of the E911 fund.
A brief background
The significance of providing emergency service through a common number all across the nation, reveals some interesting aspects with regards to technology, economics and policy surrounding a national telecom infrastructure. In US, all the states levy a 911 surcharge on a per line basis. On an average, in the US, a monthly charge of $0.70 per line has been mandated. This helps create a strong pool to support funding of E-911 services which include
enabling the call routing, caller identity and location information technology, establishing and maintaining PSAPs (public safety answering points) and notifying the appropriately located and designated authorities promptly. This works fine when we consider only the legacy wireline telephone services as technologically, things are very simplified. Now, as parallel communication technologies evolve, one has to device ways to inculcate the same emergency service provision. The FCC then mandated that all technologies including wireless and the VoIP telephony, should incorporate this aspect of the service.
As far as providing wireless 911 services is concerned, it is technologically feasible. It has been done in 2 phases. The phase I deployment involves dealing with the routing technology. It has been achieved in 80 % of the states in the US. The phase II deals with location identity and its notification mechanism to the nearest PSAP. Till date it has been made completely functional only in 8 states.
Here is one reason, “Reports from the General Accounting Office (GAO) and the National Emergency Number Association (NENA) showed that several state legislatures had diverted E911 funds to shore up budget problems elsewhere. The NENA report identified a dozen states--Arizona, California, Maine, Maryland, New York, North Carolina, Oregon, Rhode Island, South Carolina, Texas, Virginia and Washington plus the District of Columbia--that diverted as much as $400 million away from E911.” Also,as Ken Louden, director of communications for Steuben County, Ind.,who serves on the Indiana wireless E911 board, says, “The FCC has not stepped up to the plate to police the LECs”. This has been frustrating the PSAPs too LECs are disallowing them from accepting calls.
In this chaos, we are sidelining the fundamental aspect of 911. Come what may, every citizen, irrespective of the technology he uses, must be able to access the service efficiently. Service provision is the key requirement. On the administrative front, people, who pay the surcharge and are still deprived of what they pay for, need to be more proactive in pressurizing the respective state governments. Public awareness campaigns, political pressure, etc. are some ways people need to adopt aggressively as no one realizes the importance of 911 unless one faces a situation where it has to be used.
On the technological front, network based technology, rather than a device based technology, will be more efficient and economical. The simple reason being that one cannot expect to modify end systems continually as the technology evolves. Instead, modifying the network for once will solve the problem and will prevent revisiting the problem with every upgrade in the access technology. Also, if one considers the economics, handset-based technology requires phasing on an individual basis which is not only time consuming, but also an expensive option as far as the end consumer is concerned. Network technology, on the other hand, immediately reflects the upgrade and service incorporation and provides an array of opportunity for an entire content based market (safety instructions, nearest help center directions, safety ads etc.). This will automatically provide a self -sustaining mechanism.
On the regulatory front, mechanisms need to be evolved to induce transparency into the entire process of fund management. Accountability cannot be neglected and misappropriation should not be permitted a camouflage of inadequacy.
Chamberlain, David - Law makers to blame for E911 scandal on http://www.findarticles.com/p/articles/mi_m0DUJ/is_14_108/ai_n9505612
Sunday, February 18, 2007
In every developing and developed nation's telecommunication jargon, 'universal service' is one phrase that is captivating attention. What is disappointing though, is the attitude that is associated with it. Most of them relate to USO as 'Universal Service Obligation'. Can't we approach the acronym USO as 'Universal Service Opportunity' and give solution a better chance over convolution?
In an era of international telecommunication liberalization, I would, through this memo, like to explore universal service as an opportunity for leveraging international investment. This means that telecom regulators, with a strong mature policy, can come up with a business strategy to lure international investment to promote universal service. On the other side of the story, international telecom companies can come with an investment plan to articulate universal service as a creative entry mechanism and hence explore a potential business breakthrough.
The biggest motivation for inviting international competition in this sector, is the inefficacy of the cross subsidy model. I believe that generation of funds via a cross domain accessibility revenue model, gives the government a much better chance to materialize universal service. To clarify this, I have developed a naive model: 'proctorial expansion model'. It has two procedures: the inside-out procedure and the outside-in procedure.
We can visualize the entire telecom domain as a set of 2 concentric circles. The inner circle is the rich circle, conceptually comprising of an aggregation of rich telecom services provided by several players. The outer void circle is the opportunity circle, the target of the service. In the inside-out procedure, the government encourages every service provider in the inner circle to expand its services to an adopted sector of the outer circle, by cutting down on the taxes charged for providing services to the inner sector. This, I believe, is a strong enough incentive for the service provider because it is offered with a massive cost advantage in a fiercely competitive domain. The service provider has an opportunity to steal some substantial chunks of the 'rich' market share by way of lowering its service costs. Every fraction of the outer sector expanded, is rewarded by the government in the form of further tax deductions. In the outside-in procedure, the government gives every potential new telecom player mega incentives to enter the inner circle, if it promises to proctor some portion of the outer circle. To boost these further, the regulator can device methods which entitles every other industry, that has a market in that particular sector of the outer circle, to use the telecom services only of the proctor of that particular sector. Although this tends to create local monopoly, globally it is still a competitive space. If a competitor is able to proctor a sector in a more cost effective manner (for the sheer anticipation of a government tax incentive), he will definitely try and procure it, which will force the existing player to reorganize its cost model and not take advantage of the monopolistic status. After all, you need to know monopoly, to know competition !
By doing this the national telecom regulator is mobilizing funds, in an automated manner, towards universal service. The onus is now on the existing and the newer players to device methods to adapt to the model, in a manner that is most feasible to their economics and logistics.
Moving to the other side of the fence, there are some real opportunities for the telecom companies, especially international ones, to take advantage of the universal service jack. The international competitors pay some serious taxes and still manage to compete because of superior service quality and business models. So as an international player, if one comes up with an investment plan that satisfies the government's goal of providing service to the outer circle, in a cost effective manner, it can exploit the advantage of tax deduction for providing services in the inner circle. Now the economic gains of this (by being able to lure a portion of highly profitable market towards yourself) can actually more than compensate for the probable loss one might have to incur in the process of providing service to a 'poor' market. The company can judiciously re work its call and associated service cost model in the competitive inner circle, to take utmost advantage of the government incentive. However, I feel that master stroke will be to work out means of providing cheap service in the outer model so that even if there isn't much of a market to exploit, the return on investment is still in the positive.
On the technology front, using WLL services is a potential economic option. Here the spectrum allocation charge does not come into question because it is going to be a government backed option. Secondly backing technology that uses the vintage power-line networks to provide telecommunication infrastructure is a big opportunity for resolving the issue of universal service.
Strategically, as a proctor of the adopted sector, one can invest on efforts to develop or enhance the brand equity of your sector as a potential market for suitable industries. Every new industry lured towards your sector for a potential market, will require a telecommunication infrastructure to further its cause. As per the policy, you will be the telecom solution for all the potential industries. One can push the creative pedal to boost the economics. What is the motivation? The national regulator's patron which will help you make your venture more and more profitable.
The entire hypothesis delineated above is a attempt to neutralize my conceptual model of an inner white circle (area of rich service) surrounded by an outer black circle (area devoid of service), to a uniform single grey circle (area of universal service). This is practically a difficult proposition and the model needs refinement but I guess this can insinuate towards a better self-controlled approach that envisages moral and social responsibility to both sides (the regulator and the players), and help them collaborate efforts towards accomplishing the goal of universal service.
Monday, February 12, 2007
In a world of visas and immigration issues imposed by mortals, in an attempt to curb the natural human tendency to go places, ever wondered if there is a single international organization that facilitates migration globally....well here it is: International Organization for Migration
To know A to Z of migration (well..in a manner slightly different from the one shown in the picture above...) visit http://www.iom.int/jahia/page1.html
Sunday, February 11, 2007
The headquarters of Compañía de Telécomunicaciones de Chile S.A , a marvelous sky rocketing structure overlooking Santiago's Rio Mapocho, very vividly symbolizes Chile's thriving telecommunications sector. It speaks volumes of a socio-economic revelation that has stemmed from one of the best seen implementations of an international agreement and has now become an inspiration in the process of global telecommunications liberalization.
Chile can be easily called the prodigy of modern telecommunications era. In an article by Larry Luxner (Tele.Com, May 2006), Wayne S. Alexander (Executive, SBC International) says, “Chile has one of the most open and the most competitive markets in the world”. As a result, it naturally has one of the best and cheapest available technologies at its disposal and is actually providing class to its masses.
Chile has pioneered the cause of privatization and liberalization of communication services. The process began way back in 1970s with the introduction of National Telecom Act in 1978. It allowed for “licensing of telecommunication services in the country and also led to formation of the Subsecretaría de Telecommunicaciones (SUBTEL) , the agency that would be responsible for regulating and managing the industry”. SUBTEL, in collaboration with several industry players radically changed the look of telecommunications in the country through the chronology of events as shown.
1979: Liberalization of long distance telephony
1981: Government monopoly over telegraph and telex services abolished
1992: Local telephony market liberalized
The timing of these events clearly elucidates the maturity and vision of the Chilean telecommunications policy evaluators and regulators.
It received a further boost from the February 1997 WTOs Basic Telecom Agreement. This is the most significant event to have taken place in the history of international telecom, as it set the pace for initiating liberalization of the services sector globally. In addition to the "General Agreement on Tariffs and Trade (GATT)," which regulates the trade of products, "General Agreement on Trade in Services (GATS)" was also established.  The ITU enlightened the WTO of telecom's dual role as a fundamental network means for economic activities and also as a distinct sector of economic activities itself. It was this realization combined with the gradual evolution of WTO during that period, that led to the above agreement.
Few of the major outcomes of the agreement:
Liberalization became the fundamental principle in the area of telecommunications, on a global scale, including developing countries.
Through global liberalization of the basic telecommunications services such as voice telephone services, it aimed at the introduction of competition, the reduction of service rates, diversification of services and provision of universal services.
69 of 131 member nations (including Chile) adopted the agreement.
the Government of Chile committed to market access and national treatment for long distance and international wireline and wireless telecommunications services, including satellite services, by January 1, 1998
The WTO Basic Telecom Agreement acted as a catalyst and led to an explosion in Chile's telecom market. In lieu of the agreement, four reform models were adopted by countries globally: 
Model 1 : Privatization with full competition - NZ, Chile, Malaysia
Model 2 : Privatization with phased-in competition and regulation - EU, Japan, Australia
Model 3 : Liberalization without privatization - India, Colombia
Model 4 : Private sector participation without privatization or liberalization - China, Saudi Arabia
As anticipated, Chile threw open its markets to international participation so as to induce fierce competition among local and global players for the telecom equipments and services sectors. Chilean telecom market became a battleground for national service providers like CTC, Entel, Chilesat and international giants like Telefónica de España (Spain) and Stet (Italy) as well as BellSouth, Motorola, Qualcomm and others from the U.S.  The most significant factor that supported this revolution was once again the dynamism shown by the telecom regulatory authority, SUBTEL. The various associated policies evolved at the same, if not faster, rate as the emerging technologies. Dynamic spectrum allocation, calling party pays etcetera were some of the most innovative exhibitions of SUBTEL, that helped Chilean telecom keep pace with a fast developing global industry.
The natural result was an immense improvement in the quality of services across various domains including legacy wireline telephony services, wireless mobile communications (including the personal communication services sector) and the Internet. This catapulted a chain reaction of price reduction, market explosion, competition enhancement and technology development. The intensity of the impact can be gaged by this statement from David Allen (The WTO Telecommunications Agreements: Policy between Trade and Networks), “30 percent reduction in prices for international calls from Chile to the United States led to a 260 percent increase in traffic volume on that route”.
Chile's telecom revolution justified, in every sense of the word, WTOs Basic Telecom Agreement goals. Today, “Chile's market for telecom equipment and services stands at nearly $6 billion, with annual growth over the next five years projected at 20-25% -- three times the global telecom growth rate. The Chilean phone network is already 100% digital, and carriers are tripping over themselves to install synchronous digital hierarchy (SDI) fiber optic networks from one end of Chile to the other”. It has the highest rural teledensity in Latin America, truly accomplishing the ideals of universal quality service. The following graphs indicate some of the healthiest growth indices, across diverse telecommunication services, in the world.
Graphs modeled based on information from http://www.ita.doc.gov/td/oepc/Telarg.htm
Most significantly, this has kept Chile's GDP in a healthy shape since the telecom industry contributes an average of 14% to Chile's GDP.
In totality, Chile epitomizes an ideal telecom liberalization scenario. There are lessons to be learned as to how a proactive policy facilitated by an international cooperation and backed by a sharp business acumen, can really boost a nation's core infrastructure industry and hence the nation's economy, in general. As Dean Alexander (director of Grant Thornton International's business center in Santiago) says, “The telecom sector in Chile will continue to expand for a number of reasons, including a lack of market entrance barriers; convenience for multinationals world-wide to set up their operations in Chile to manage the Latin American region; continuous upgrading of existing equipment and networks; establishment of strategic alliances between foreign investors and local partners, and the willingness of Chileans to adopt state-of-the-art technologies."
Telecommunication Regulation and Liberalization, http://www.american.edu/initeb/em0017a/Regulation.htm as on 2/10/2007.
 WTO Basic Telecom Agreement, February 1997, Outline
 WTO Basic Telecom Agreement, February 1997, Results
 Stefaan G. Verhulst, Markle Foundation, Introduction to Telecom Reform and Liberalization, August 2003.
 Larry Luxner, Modernized Markets: Chile and Argentina take two different paths, Tele.Com
 Aileen A. Pisciotta, Global Trends in Privatization and Liberalization (Ch. 23)
Sunday, February 4, 2007
We are forced back to the 1980s when Sony and Toshiba were at logger heads with regards to home entertainment video standards in the form of Beta (Sony) and VHS (Toshiba). VHS won, in spite of an apparently 'inferior' technology. Today, the cause (incompatibility of the two developed standards), the objective (consumer electronic market capitalization), the battleground (the home entertainment industry) and the players (Sony and Toshiba) are the same, the only difference is that we are dealing with a more sophisticated battle paraphernalia in the form of next generation video disc standards – HD DVD (Toshiba) and Blu-Ray (Sony). Speculation is, that the outcome could also possibly be the same. (Toshiba with its HD-DVD format, could run away with the trophy).
Sony-Philips and Toshiba-Hitachi, have both developed state of the art video disc format, much more sophisticated than the present DVD. Although both formats use the same laser wavelength (405 nm as compared to DVDs 600 nm approximately) for burning high definition video content on the disc, Blu-Ray boasts of a superior technology, by making use of a “tighter track pitch, hence a finer pickup aperture (0.65) as against HD-DVDs slightly thicker one(0.85).”  For more on the technical details see http://www.engadget.com/2005/09/19/blu-ray-vs-hd-dvd-state-of-the-s-union-s-division/These are not just a few technical specifications, as in them lies the crux of the matter.
The problem lies in incompatibility of players supporting the two disc formats. So a choice (with obvious disadvantage of limitation) has to be made. Blu-Ray's superiority lies in the fact that because of the sophistication in the data burn and pickup-head technology, the disc has a theoretical data capacity of 200 GB as against HD-DVDs 60 GB.  This might not be very appealing to a movie buff who isn't interested in the statistics, but is happy if he can get more than half a dozen high definition movies on one disc (for which even 60 GB is more than enough). However, we today have a whole new side of entertainment faction (the gaming gangs), for whom each GB of storage is worth an auction. So where does the problem lie? Don't we have a clear winner? Not really, its all about money, honey! Mass production cost of HD-DVD disc and the compatible players is much lesser than Blu-Ray, due to obvious technical reasons. Also, the roll out of HD-DVD into consumer markets, in general, has been a couple of months earlier than Blu-Ray, having gained a bit of temporal advantage. So its a replay of the Beta-VHS case, but this time the fight is much more closer, and Toshiba might not get lucky as before. Both the camps have some deep corporate line ups to back them. In the movie studio category, there are some big names on each side (Blu-Ray: 2oth Century Fox, MGM Studios etc. and HD-DVD: Paramount Pictures, New Line Cinema etc.) and some on both sides (Buena Vista Home Entertainment, Warner Bros. etc.) Similarly, there is a divided camp as far as contributors go (Blu-Ray: Adobe Systems, BenQ, Sony BMG etc. and HD-DVD: the latest controversial inclusion of Microsoft and Intel, Acer Inc., Hitachi Corp. etc.)  For more, visit http://www.engadget.com/2005/09/19/blu-ray-vs-hd-dvd-state-of-the-s-union-s-division/The Blu-Ray, at the moment seems a stronger contender in terms of technology and corporate backing, but is up against the price factor advantage of HD-DVD.
Believe me or not!
At first it might seem that consumers are the one who will be victims of this irrational hostility, but I believe that all this build up will be futile as it is very probable that both sides will end up on the loosing side. Technologically, HDTV streaming through upgraded cable networks and fast evolving telecom networks (IPTV) is almost a reality, so do we really want to care about discs? Secondly, the corporate loyalty is ephemeral, driven by speculation and if the alternate technologies get to the floor early, the movie studios will easily bid adieu to their 'loyalty' and adopt a neutral approach. Although it is believed that PS3s coalition will decide the winner (most probably Blu-Ray), market capitalization might well be restricted to the gaming sector, as this will not lure supporters to shift camp and take advantage of a potentially bigger market because of the evident cost factor involved. Although, HD-DVDs (and their players) are cheaper as compared to Blu-Ray, technology (which is of utmost significance today as never before) is one factor no one wants to overlook. With the degree of uncertainty, and fear of pseudo competition, hardware manufacturers surely do not want to risk a mass production investment. Consumers do not want to jump the gun by making some hasty decision of exhibiting an early partisan as this might deprive them of choice.
So, it may seem that both the camps want to heat up the battle and pamper their obstinacy (by an aggressive build up), in an attempt to attain monopolistic stature, they are actually digging deeper holes for their own burial. The stalemate is actually giving other options a chance to make this very standoff void. The market might actually not exist as there is a massive psychological inertia to side either ways and the ideal option (buying and manufacturing a universal player) is far too expensive. As I said earlier, it is possible that the prey might escape both the lions!
Just as beauty is nothing without appreciation, technology is nothing without consumerism. If this is understood, there is a possibility of truce. The two standards, in isolation, are never going to be successful in a long term. Just the way a thaw was facilitated to introduce a common DVD standard, there has to be a way sought to end this. Before its too late, they should work at ways to make technology the actual winner and not make this standoff a mere classical conflict analysis case study for the future academias.