SMART Letter #17
March 1, 1999



            SMART Letter #17 - March 1, 1999

           The brains behind The Stupid Network

            Copyright 1999 by David S. Isenberg -- -- 1-888-isen-com




>  News I Missed: Supreme Court neuters CLEC entry strategy

>  Lead Essay: Is QoS Necessary? AT&T Researcher finds KISS

>  Quote of Note: Kevin Werbach

>  Roles of a 'sultant

>  Quote of Note: Ted Turner

>  Conferences on My Calendar, Copyright Notice, Administrivia



By David S. Isenberg

The U.S. Supreme Court has gutted the Baby Bells' 1996 Telecom 

Act obligation to sell unbundled network elements (UNE) to 

Competitive Local Exchange Carriers (CLECs).  Resale used to be 

the linchpin of most CLECs' strategy when they expand into new 

territory.  Now the strategy is on shaky legs.  The Court's 

decision makes resale, in the words of Justice Scalia's majority 

opinion, "largely academic."

Skimming headlines, I missed critical details of the Court's 

January 25 decision, which was widely reported to affirm the 

FCC's role in defining the terms of the Telecom Act.  

Fortunately, SMART People like Bruce Kushnick are on the case!  

(Also, see the Wall Street Journal, Feb. 12, 1999, "Established 

Local-Phone Firms Use Ruling's Fine Print to Foil Upstarts," by 

Kathy Chen.)  I spent the weekend reading, and rereading the 

fine print of the Court's opinion, and here's what I *think* it 


The Court did, indeed, affirm the FCC's role.  But in the same 

pen stroke it also "vacated" Rule 319 of the Telecom Act, which 

defines the minimum set of UNE.  The crucial language from the 

Telecom Act is in 251(d)(2) "In determining what network 

elements should be made available . . . [the FCC] should 

consider whether . . . (B) the failure to provide such network 

elements would impair the ability of [a CLEC] to provide the 

services that it seeks to offer."

The Court's opinion hinges on the use of "impair" above, and on 

the fact that some UNEs might be available from other sources 

than the RBOC.  It says that the FCC was unreasonable when it 

said that "delay and higher costs for new entrants" was 

impairment.  It said that the FCC "cannot blind itself to the 

availability of elements outside the incumbent's network." 


With this suggestion - that CLECs are not impaired if they can 

get network elements from sources other than the RBOC - the 

Court's then "vacates" rule 319.  I think that means it sends 

319 back to lower courts for more interpretation. 

It is as if the Court said, "Your ability to get from point A to 

point B isn't impaired by lack of a whole car.  After all, you 

can get an engine, tires, etc., on the open market.  The extra 

time and cost for you to build the car from parts isn't 

'impairment'."  Yeah, right.

The overall intent of the Telecom Act, to open up local markets 

to competition, has been set back!

Incumbent LECs seem to agree.  On February 4, Hyperion, a small 

CLEC was set to begin service in the Maryland market, but Bell 

Atlantic would not sign an interconnection agreement making it 

possible. Nextlink's pending pact with GTE is also stalled. 

Kathy Chen points these out in her WSJ, Feb 12, 1999, article on 

the Supreme Court decision.

All but the deepest-pocketed CLECs depend upon resale to open 

new markets.  Customer acquisition is a gradual process, so a 

new network in a new territory is guaranteed to lose money until 

a critical mass of customers has been recruited.  CLECs use 

resale to do this.  If the current situation endures, only the 

big, rich, facility-building giants will be able to enter local 

markets.  Score a big one for the Supercarrier scenario.

[In Justice Scalia's words, "The Telecommunications Act  . . . 

[is] a model of ambiguity or indeed even self-contradiction." 

Furthermore, several SMARTer People than myself jumped all over 

one of my previous "insights" into the Telecom Act.  Mine ain't 

the final word, not by a long shot!  Please lemme know alternate 

views to the above . . . read the Court opinion yourself (great 

fun) at ]


IS QUALITY OF SERVICE NECESSARY?  AT&T drives to control net via 

technology but AT&T Labs researcher finds simpler is better.

By David S. Isenberg

Box:  [Simply adding bandwidth could turn out to be the cheapest 


AT&T carries the burdens of incumbency in a world exploding with 

disruptive technology.  My concept of a Stupid Network tries to 

explain the disruptions that telcos must face, but AT&T still 

doesn't seem to get it.

Recently Dan Sheinbein, AT&T's vice president of network 

architecture & development, told the Star-Ledger (Newark, NJ) 

that the Stupid Network has "not been a particularly active area 

of discussion" at AT&T lately.  Even more recently, Sheinbein 

told me, "On balance, AT&T's network is getting smarter."

To me, the Stupid Network - the dumb transport component of 

people's applications, designed simply to "deliver the bits, 

stupid" - is a consequence of the new abundance created by 

technology's headlong spurt.  It's enabled by the Internet 

Protocol (IP). (See for details.)

AT&T Chairman Mike Armstrong says he's embraced IP, but his 

strategy is clearly "intelligent."  He says that if AT&T 

controls the interfaces, specifications, protocols, standards 

and platforms of the network, it can weave them into a set of 

seamless services.  If AT&T could pull this off, it would be 

able to hold back the rising tide of commoditization and reglue 

the delaminating value proposition.  But to do that, somehow 

Armstrong would have to get AT&T back into the equipment game, 

stamp out IP, and repeal Moore's law.


At the edge of Armstrong's awareness, AT&T Labs mathematician 

Andrew Odlyzko is researching the economics of networks.  He is 

no Stupid Network ideologue.  In fact, he used to believe that 

the Internet needed such "intelligent" complications as Quality 

of Service (QoS) and differential pricing.  Both of these make 

networks treat different kinds of data differently.

But now Odlyzko's research has led him to the conclusion that 

simpler is better.  Odlyzko, who came to Bell Labs Research 23 

years ago straight from his MIT doctorate, has convinced himself 

that simply adding bandwidth could "turn out to be the cheapest 

approach when one considers the costs of QoS solutions for the 

entire information technologies industry."

Internet telephony, introduced in 1995, made the apparent need 

for QoS acute.  Until then, Internet traffic consisted of email 

and file transfers, and then web page information. For these 

applications, fast transmission is nice, but delays do not make 

them unusable.  Not so with Internet telephony - people just 

can't have conversations when there's more than a few hundred 

milliseconds of delay.

Differential pricing is the first cousin of QoS.  If you have 

different levels of service, you need some motivation for people 

to use the lower-grade service.  Otherwise, the argument goes, 

people will always use the best service whether they need to or 


But now Odlyzko thinks that even simple QoS schemes may be too 

complex.  Two years ago, he proposed a very simple QoS plan.  It 

used only differential pricing.  He called it Paris Metro 

Pricing (PMP), after the Parisian subway system of letting 

people who pay more ride in "first class" cars.  These cars are 

physically identical, but less crowded only because they cost 

more.  In Odlyzko's vision, a PMP Internet would have two 

identical, parallel channels, and one would be designated "first 

class."  It would cost more, so it'd have less traffic and 

provide better service. But Odlyzko now says that administering 

parallel channels would add more complexity than users or 

service providers desire.


Lightly loaded networks don't need QoS.  They're adequate even 

for Internet telephony.  Odlyzko found that on most data nets, 

traffic is surprisingly light.  (His analogy for the typical 

corporate Intranet is "a 100-lane highway [for] a few fast 

cars.")  Also, he says, other work showed only 40% of Internet 

congestion is due to transmission bottlenecks, and only a very 

few choke points are to blame.


As intelligence migrates to the edges of the Internet, so does 

network administration, Odlyzko says, "where it is wastefully 

duplicated," at great expense because it requires human 

expertise.  He concludes that, "The complexity of the entire 

Internet is so great, that the greatest imperative should be to 

keep the system as simple as possible.  The costs of QoS or 

pricing schemes are high, and should be avoided . . . we should 

seek the simplest scheme that works . . . " 

And that simplest scheme, Odlyzko says, involves flat rate 

pricing and over-provisioned, lightly loaded networks with a 

single grade of best-effort service.  This scheme takes 

advantage of rapidly improving routing and transmission 

technologies, and it doesn't mess with any of the properties 

that made the Internet great.  But it'll be a hard one for AT&T 

to control.

[The article above appeared as Intelligence at the Edge #7, 

which is Isenberg's monthly column in America's Network, on 

March 1, 1999.  Odlyzko's work can be found at  Isenberg ( 

thanks Jock Gill ( for comments on 

an earlier draft. Copyright 1999 Advanstar.]



"@Home, cable operators and AT&T claim that they need the 

vertically integrated access model to recoup their 

infrastructure investment [e.g., in modernizing the TCI network 

- David I] . . . they see an opportunity to build an integrated 

applications suite on top of the coaxial cable pipe. . . . The 

trouble with this vision is that it's not the Internet. . . . it 

leaves little room or incentive for third parties to develop 

innovative applications and services on that platform . . . 

unplanned innovations . . . will be less likely in [this] 

integrated world . . . "

From "The Architecture of Internet 2.0" by Kevin Werbach in 

Release 1.0, February 19, 1999.



A SMART Person, name withheld by request, 'sulting for a large 

non-North American telecom equipment manufacturer, comments on 

the various roles of the 'sultant.

" . . . It's not that one can not express an opinion [on my 

current 'sulting job], we are quite free to do so.  The 

corporation prides itself on our open dialogue and consensus 

building processes. . . . Consensus building usually entails 

lengthy and spirited discussion until everyone finally agrees 

with the boss and/or the recommendation from Headquarters."

The same SMART Person then offers:

Scapesultant - A Consultant who is hired because he agrees with 

(and will document support for) a specific plan or decision 

(usually already in progress or committed) in order that if/when 

it all goes wrong, management has someone to blame.

Exprosultant - A Prosultant who is seen as Insultant, and is 

then encouraged to join the other Consultants, or the ranks of 

the unemployed.  [This is subtly distinct from Exultant - 

somebody who, finally released from the degradation of 

employment without emotional alignment, becomes ecstatic. - 

David I]

[Prosultant and Prosulting are service marks of, inc.  

If you'd like to call yourself a Prosultant, I'll give you a no-

charge, no-expiration license to do so, see  All the other neologistic tomfoolery 

is in the public domain, as far as I know. - David I]



"I was sitting next to the president of Poland yesterday at 

dinner -- he makes two thousand dollars a month! So I asked him 

how he gets by on so little. And he says, Well, I just keep 

looking at the president of Romania -- he only makes four 

hundred dollars a month."

Ted Turner at World Economic Forum, Davos Switzerland, quoted by 

Tony Perkins' Red Eye, Feb 3, 1999.  



GBN PRESENTS . . . "Incumbency, Intelligence, Innovation 

and Internet Telephony," by David S. Isenberg, Principal 

Prosultant(sm),, inc., March 24, 1999, Emeryville CA, 

for more information contact GBN at 510-547-6822 or email



Redistribution of this document, or any part of it, is

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Copyright 1999 by David S. Isenberg -- -- 1-888-isen-com


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     -- Technology Analysis and Strategy --

        Rethinking the value of networks 

      in an era of abundant infrastructure.


Date last modified: 18 April 99