The telecommunications industry at a crossroads: Uncertain economics overpower mazy technological innovation Master in Engineering Policy and Management.

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The telecommunications industry at a crossroads: Uncertain economics overpower mazy technological innovation Master in Engineering Policy and Management of Technology Instituto Superior Tecnico, Lisbon, Portugal P. Ferreira February 1 st, 2002

Agenda TCP/IPWWW ARPANETNSF Telecommunications Act Local Loop Backbone optics Private ownership FEDERALFIRMSMARKET CHALLENGES

The Early Days The cold war times: the ARPANET (’69) BBN (AS#1) (70s) and packet switching TCP/IP (’74) and the OSI model (80’s) The NSF backbone (early 90s) 1

Technology & Innovation The World Wide Web (‘89) and browsers (’93) Classless Inter-domain Routing (’91/’92) Border Gateway Protocol (’94/’95) Peering: Bill&Keep, Complex routing policies 2 Source: Matrix Internet and Directory Services (MIDS)

Private Business The industry (infra-structure): Quest: fiber deployment Cisco: the routing oligopoly AT&T: telephony and data businesses Akamai: web-site mirroring and caching Services and e-business: Amazon: sales front-end eBay: general item auction Vehix: automotive “vortal” BandX: bandwidth trading 3

Private Business Telecommunications Act of 1996 The current backbone: Optical Networks and cross-connects (e.g. cost model) Wavelength division multiplexing Peering agreements and interconnection The access loop: Unbundling and competition Digital subscriber line and cable modems (e.g. cost models) Wireless technologies 3

Future Challenges Pricing models: Flat rate, Usage rate, Congestion rate Quality of service: IntServ, DiffServ, CBR Bandwidth trading: Extreme competition with SLAs Moore’s law, direct linking, GigaPOPs 4

Conclusions (with an EP perspective) policy competition unbundling technology backbonelocal loop economics 80s 90s 00s Mazy innovation Overpowered by Uncertain economics

Bibliography Technology: “ADSL Deployment”, David Pearah available at "A Rose by Any Other Name: Unbundling, Open Access and Cable Data Networks", Tseng et. al. available at under research, papers & publications, 2000http://itel.mit.edu/ “Wireless Networks in Europe: A three step evolution”, James Guyton available from under publication/theseswww.murrow.org “Provision of sufficient transmission capacity for broadband mobile multimedia: a step toward 4G”, Manuel Dinis and Jose Fernandes, IEEE Communications special issue, August 2001 “QoS Support for an all-IP system beyond 3G”, Tomas Robles et. al. IEEE Communications special issue, August 2001

Bibliography Technology: “Optical Networks and the Future of Broadband Services”, Ferreira et. al. Special Issue of Intl. Journal on Technological Forecasting and Social Change, available on the web at “Best Effort versus Spectrum Markets”, Lee McKnight, W. Lehr and R. Linsenmayer available on the web at “A broadband access market framework: towards consumer service level agreements” McKnight and Lehr, available at under publications/2000http://itel.mit.edu "Do Appliances Threaten Internet Innovation?", Gillett et. al. IEEE Communications special issue, October 2001

Bibliography Business models and industry: (for more info visit Creative destruction:Internet telephony Business survival strategies inMIT press - spring 2001 The global internet economy MIT press – spring 2001 Internet economics MIT press

Academic Research Sites School of Information Management & Systems Information Network Institute Internet Telecoms & Convergence Program Research on Information Economy