The Boundaries
of the Network

Session 1a: What boundaries? What network?

Getting started . . .

Wednesday, September 5, 2001

David Isenberg: Our task over the next three days is going to be to make the ideas rise to the level of the weather, the music, the food, the architecture, and the accomplishments of the people in the room.

Let us look around and see who we are with. I think we are a bunch of extraordinary people. I would like to welcome you to my hometown, Woods Hole. I grew up here. It is an extraordinary place with a greater density of Noble Prize winners than probably any place on earth including Cambridge, Massachusetts.

Man: Stockholm

Isenberg: Stockholm has a very large concentration of Woods Holers about once a year.

Now why are we here? Well, we have been talking about the intelligence moving to the edge of the network for about at least 4 years. Decades longer, if you're David Reed. Last year we spent an awful lot of time talking about the middle of the network, about stuff that goes on in the core of the network, core routers, fiber miles, whether the traffic in the core is increasing, and so on. Dewayne Hendricks and a few others of us thought that we didn’t spend enough time talking about the edge of the network. Since the middle of the network is in fact becoming stupid, becoming commoditized, becoming boring transport, the real action is at the edge of the network. The real action is in the access network, the metro area network, the computers, the terminals that terminate the Internet protocol and host the applications and store the data -- and the people that use these terminals.

My interest really is how the people at the edge of the network interact with the network, how their lives are changed by it, in good and not necessarily good ways.

It occurred to me that edge is probably not the right metaphor. Edge implies a sharp boundary, a discontinuity and kind of a passive process. You are either on one side of an edge or the other.

The question ramifies the more you think about it. There are the characteristics of the edge that users interact with and then there are the characteristics of the edge that application service providers interact with. Then there are edges within edges within edges. The metaphor is that of a cell membrane where the membrane actually defines the cell as much as the nucleus or the mitochondria or the cytoplasm.

Tom Freeburg: There are two sets of interactions that we should consider. One is the interaction of the users with the network and the other is the interaction of the users with the information on the other side of the network. As far as the information is concerned the job of the network to be totally transparent. The network is there to connect the user with the information, period full stop. Isenberg: I’m in complete agreement. But let us take a microscopic view of the edge. I’m with you that the edge should be transparent to information and that the middle should be really stupid. But if you zoom in on that edge you will see that there is all kinds of machinery in there that allow that transparency to work. You have a computer with an operating system. The operating system has active processes. Around that you have a business and a business has active processes. When you look at edge processes under a microscope there is a lot of interesting stuff going which I would like to examine over the next 3 days.


Adina Levin: Does it help to say we are looking at the network as a collection of nodes and it doesn’t matter whether they are popular nodes or less popular nodes?

Freeburg: But there is fabric in between the nodes too that one needs to be concerned about. The forest isn't just the trees.

Isenberg: Let me do a little bit more process here before we jump into substance and I’m not really a process guy so forgive me. One thing that I forgot to talk about is this wireless network that we have here. Andy Maffei is another Woods Hole guy, but also a genuine part of the networking community. Andy could you please introduce yourself and spend about 3 minutes talking about what you’ve put together and how it works.

Maffei: . . . and how it is torturing certain members of the audience. (laughter) I’m Andy Maffei and I work with the Woods Hole Oceanographic Institution. I built the network here. Tom Freeburg provided the Motorola equipment running a point to point wireless link from a bedroom upstairs to one of the Woods Hole Oceanographic buildings.

Isenberg: About a third of a mile away, with 99-point-something percent accuracy.

Man: Is that how we are getting bandwidth?

Andy: You are getting bandwidth from [the WHOI] campus network. We have 5 or 6 T-1s. From the window we run a wire down to this wireless access node here. Yesterday we brought it in and my PC ran fine, Dave’s came up and ran fine. There is information up on the board on how to set up your PC, and I would be glad to sit down with you and try to help. We have had some problems with the Linksys cards but I think the infrastructure itself is working fine. It is a matter of getting the PCs to talk to the cards.

Introductions -- and Big Questions

Isenberg: Let's go around the room and do a brief introduction, but also to tell us the one question that has been bugging them about this business.

Scott Bradner, Harvard University, IETF, Miscellaneous geek. Question: Can we make this stuff pay for itself.

David Reed, no affiliation other than reed.com, or maybe lots of affiliations, the question for me is always, does it scale? Lately, does wireless scale?

Bob Berger, UltraDevices -- we make wireless equipment. My concern right now is that we are in the Empire Strikes Back phase and I’m really concerned that the bad guys -- the incumbents -- have grabbed the last mile and they're using it as a choke point to make everything else not happen.

I’m Bob Lucky. I’m with Telecordia. (Man: Part of the Empire.) My one question: I really don’t understand what limits the rate that
we can put out DSL? Why can’t we do it faster?

I'm Raj Sandhu, a private investor. I used to work at Soros Financial Management. My question is the same as Scott’s so I’ll ask another related question: when will we see demand and revenue get reinvigorated?

I’m Porter Stansberry, I’m a newsletter writer and my question is financial: how will the market pay for the trillions that have been lost and when will people begin investing again?

I’m Tim Denton. I’m a lawyer. I work on domain name issues for Tucows which is a big domain name wholesaler. I’m going to save my question for later.

I’m Steve Mattioli. I’m with YottaYotta and my question is how are we going to drive the price of network utilization down so that it can be used?

I am Anders Comstedt. I run a dark fiber operation in Stockholm for all the Nobel Prize winners. I have been doing this now for 6 years and during all those years people have asked questions about how we are going to transform the last mile and the question is still valid, I think.

I’m Frank Robles. I’m with Oakstone Ventures. My question is about fighting back against the dark forces as in The Jedi Strikes Back. I don’t think that the last mile [bottleneck] has been broken, so I’m still going to try to solve that question, how to create the last mile?

Richard Prytula from Technocap. Last year we did massive scalability stuff, this year who cares? My question is, where is the gushing neck wound again?

Dewayne Hendricks of the Dandin Group, in the San Francisco Bay Area. I’ve got too many questions and no answers. That is my problem. I will just put one out. We had a train ride and I don’t think that it is over yet. I don’t really know where we are going anymore.

Tim Horan, I’m a Communications Services Analyst at CIBC in New York. My question is related to last year's topic: Is the network really getting done? What is really getting commoditized?
Do we really need quality of service? Is quality improving or not? There are a lot of companies seeking to control the Internet in certain ways to benefit themselves -- how is that related to this topic?

My name is Victor Blake. I’m better known as Victor Parente, the former manger of network architecture at America On Line. I’ve been trained as a computer engineer and became a teacher after that. Right now I’m learning how to build bridges, studying for my Master’s in Civil Engineering. My question is, whatever happened to patience?

I’m Andy Maffei with the Woods Hole Oceanographic Institution. I have a lot of questions but the one that is most on my mind is how do I do this all under water?

I’m Steve Kamman. I’m cover Telecom equipment at CIBC. I used to work with Tim, he got rid of me which was a good thing. Serious question: How cynical should I be? There were high hopes for radio, there were high hopes for television, and how they were going to change the world. How cynical should you be about what [the Internet] actually ends up being? Radio basically creates pop music for kids and not a lot else. That is not what they first thought it was going to do. There is a part of me that worries that 20 years from now we are going to have a great mode of delivery for pornography and not a lot else.

My name is Dave Curry. I’m with Worldwide Packets. In a former life, a chapter closed last summer when I sold my OSS business to Nortel. I now am running Worldwide Packets. My question is, it is pretty clear the service providers that we have come to love and hate are not going to rebuild the last mile. WWP is counting on somebody else to build it. In this country we are counting on municipalities and utilities to build out the last mile. I would like to understand better from this group how we can accelerate that? And whether we can rely on our government friends or just exactly how are we going to make it happen? Somebody has to build it. This can’t be as good as it gets, DSL not withstanding.

Napier Collyns. I spent most of my life at Royal Dutch Shell. When I retired I decided to help start a network with people of Global Business Network and my main question is, when is this network actually going to work?

My name is Peter Cochrane. Until recently I was Chief Technologist for the British Telecom. I was part of an Evil Empire. The reason I left was they wouldn’t listen. The kind of questions I have been asking is, can we destroy the Telcos? And would it be a good idea? What would we replace them with because we don’t have any technology right now that will replace them. There is no technology that can do everything on a single pipe. There is technology that can reduce costs. My question is, how the heck do we get enough brain cells and enough human beings on this planet pointing in the right direction to invoke change?

My name is David Hoffstatter. I founded a company about 3 years ago, that is either a CLEC or a dot.com. The good news is that we are still in business. I tend to be an optimist. I have a great curiosity as to the timing in which the patient will start to recover from an investment and a capital markets perspective. I think we do need to have patience with respect to the last mile. My business is very agnostic to whether we have broadband in the last mile. It is customer funded, and change is funded by revenue. If you have a business that isn’t as dependent on some of the promises of the telecom Internet bubble and is revenue funded maybe we will see a new type of solution emerging.

I’m David Weinberger. I’m a regular guy and I’m interested in what the web, the net, is going to look like to users over the course of the next generation and where we are in the process of figuring that out?

I’m Malcolm Laws, based in London for Advanstar, a U.S. media company, running their telecoms media worldwide. I am particularly interested in the question: are we seeing the telcos carriage industry disintegrating? And what will happen after that if that is the case? The other question is am I going to catch my first fish?

Clay: Clay Shirky, no affiliation other than shirky.com or lots of affiliations. I think a lot about peer to peer and the thing that has interested me most is seeing the way that the Napster and ICQ have decentralized name space creation in the same way that PC’s decentralized computation away from the main frames 20 years ago. What I wonder is, what can we learn from the fact that these new name spaces, which violate everything engineers know about name spaces (they are non hierarchical, they are flat, they are not well characterized) have incredibly superior growth characteristics to DNS. It is somewhat analogous to the explosion of the .alt hierarchy in usenet (among other examples of loss or control leading to better growth). How do we characterize the difference between these decentralized name spaces and systems like DNS?

I’m Matt Oristano. I built a high-speed wireless ISP called SpeedChoice and sold it to Sprint. My question is, why is it that the membrane seems to feel more and more like it is made of barbed wire?

I am Marc Balevi. I’m a partner of Technocap, the venture fund. I represent the user of the network that you are all creating. My question is, when will you create something that makes an hour transparent? 'Cause it is clearly not in my point of view.

I’m Jerry Michalski, I [am a] newsletter writer. I used to write Esther Dyson's 'Release 1.0. I'm traveling now. In the Spring/Summer of next year, I’ll be a published author. And my question right this instant is why doesn’t this shit work? And my real question is, how much of this can be done for free or cheap? How much of this can be done by volunteers on toaster-nets, in ways that are practical and actually get the job done, and become an integral part of the infrastructure that we take for granted, like the air and the water and all that good stuff?

My name is Peter Ekelund, an investor from Stockholm in Sweden. I have been a serial entrepreneur most of my life. I recently founded a fiber-to-the-home operator in Sweden called B2, which already passed 50,000 customers. My big observation of this industry the 2 years that I’ve worked in it is when will this industry become demand driven rather than supply driven?

John Roese with Enterasys Networks. It came to me, when will we figure out how to make one user identity available in a global heterogeneous network?

Man: Do we want to?

Roese: Yes.

Man: Is the next step an Intelligent Network?

Jonathan Thatcher, I’m with Dave [Curry] and work at Worldwide Packets. I am also chair of the 10-gig Ethernet committee, which I think is why I’m here. My question is when will the web be useful again? When I started using it a long, long time ago the whole idea of the HTML and how it was basically a construct that was organized and you could actually go find things. I can’t find things anymore. When I want to go look and search for things the best that I get are advertisements back. If I’m lucky an advertisement may take me to a site that has something that is actually useful. To a large degree the web is pretty useless to me other than doing email.

Isenberg: Jon, you have got 3 red cards and 1 green card up. Does somebody with a red card want to say why?

Man: I use Goggle and it is amazing, absolutely amazing!

Thatcher: But you have to admit it has become more difficult.

Isenberg: And easier.

Man: I notice I don’t read a lot with hyperlinks in the text anymore. Remember when the text was all suppose to be hyperlinked and you were supposed to be bouncing around, there was supposed to be one continuous seamless document? I’m realizing that I’m reading a lot of newspaper articles and there's no hyperlinks left.

Man: If you get half way through a sentence and are gone, and half way through a sentence and are gone, you never complete anything. At the web shops that I ran, we used to design sites with embedded hyperlinks all the time [but] we moved to off-loading links to improve usability.

Man: It is a really interesting thing because there is a span of lack of control. You are describing a paradigm where you as the writer want to control your reader cause you don’t like them going off the line. It is a very interesting paradigm cause that is what I think is driving this, want to control the eyeballs.

Isenberg: One minute let’s keep going around. Let us come back to it.

My name is Mark Petrovic. I work at Earthlink, an ISP. I have found myself wondering recently whether an assumption that I have made all along these past number of years about network protocols holds true. I’m wondering whether the natural state of protocols that are now open would be proprietary. I am a little concerned about some of the things that we hold dear and count on to be there.

My name is Larry Lessig. I am a law professor at Stanford. My question is why are we surprised when the Empire Strikes Back?

I’m Tom Freeburg, Motorola paid my salary but I don’t feel like I work at all. I actually hold two titles in Motorola now. I have been chief futurist for a while now, a very fun job. I’m also Director of a new business operation now -- we set up a thing called Broadband Wireless Technology Center. I have a strong motivation behind all of this. It has been my goal for the last 20 years to get rid of all the wires. The thing I am focusing on now is trying to break the idea of a single pipe from a single carrier to bring all of the information to your home, office, etc. I think that the natural situation is going to be 3, or 4, or 10 different ways that you can get information. They all should be there. And by the way, there will be 3 or 4 or 10 or 100 different business models behind those different ways. I’m focusing on finding these business models right now with this new business and this new product line at Motorola. I'm trying to figure out who is going to be willing to put an adequate amount of capital in and enough attention and energy into the business in an entirely new way, and what their end business will be.

I’m Eric Best from Morgan Stanley. I do corporate strategy development and I’m here partly because, actually entirely because David and I go back some distance into the network. I’m very interested in the questions related to resurgence of the market, restructuring and what is the strange attractor that brings capital back. I would like to hear a discussion about what are the users doing that attracts capital to do something that users want done?

My name is Catharine Trebnick. I’m an independent consultant. Formerly I was with Lucent Technologies where I worked with softswitches, which is a very disruptive technology in the network. We have so many new technologies and we have been marketing them to the next-gen carriers. Really my question is with the downturn in the economy, when is the come-back, who are going to be the purchasers, and what is going to drive the demand from the end users?

Bradner: Why did you say that the soft switch is a disruptive technology when it really is an imitation of a 5E?

Trebnick: Well, I would disagree with you whole-heartedly. It is basically built off of entirely software.

Bradner: I know that but it is meant to be operated by a carrier.

Trebnick: It was disruptive in the sense that a lot of carriers did not even want to entertain putting in something that didn’t have a structure of a 5E. You had to sell to the Level 3’s.

Man: So it is at that level that it is disruptive. But at the level of business model it is actually a mirror image.

Trebnick: It was disruptive in a corporation where the cash cow was the 5E, and a little 10 million dollar project really sunk the 5E for a long time.

Isenberg: When you make a telephone call, the 5ESS is the first switch that a classical circuit switched call hits.

I’m Tim Flynn, I founded a company called Lodgenet. For a question, I am going to echo the words of those people who want to know when demand is going to start driving our industry?

My name is Adina Levin, I work in product strategy at The Vignette Corporation, which makes web content management software and Internet application software for large companies. The question I have is, there is already a network out there, it is not about how we get that, or how we get pipe fatter? Using the network that we have with emerging standards for web services, what are the applications for web services going to be when you have data, information, and people at the edge of the network? What are the new interesting things that people can do in interacting with each other in new ways in web service construction?

My name is Peter Kaminski. I’m currently unaffiliated but most recently I was with Yipes. Those of you who were here last year heard about Yipes.

Isenberg: Peter and Frank co-founded Yipes, and if anybody tells you different they are smoking something, and they are making too much money.

Kaminski: My question comes from a discussion around dinner last year. I believe that groups of people when they work together create a brain or a mind and even in a small group like this or larger groups like a corporation or a stock market or an entire society. Networks facilitate or speed up that connectivity between people and so my question is how do you make a mind?

My name is Gigi Wang and I’m with Asia Qwest. I was supposed to be representing a company called Qalacare and you will hear more about that later. I have to tell you, I met David at a conference in Singapore maybe 5 years ago. My question is from the user side. Right now all these service providers are going out of business. I keep talking to users who are so upset for losing their service, especially Northpoint customers. They would be more than happy to pay twice what they were paying to keep their service. So why can’t we raise the prices and keep those businesses in business?

Isenberg: Red, green, which one of you wants to go first?

Man: I noticed that half the time AT&T and the other broadband providers say nobody wants their service but they seem to be able to raise the price to recover their costs so somebody really wants it a lot. When the prices go up that means people want it not that they don’t want it.

Isenberg: Here is an interesting fact. Peter help me out with this. I learned that in Sweden, if you go into an apartment building that already has DSL and you offer 10 megabit symmetrical service for about the same price that 70% switch right away. So anyone who tells you, "Oh DSL is enough, that everybody is going to be happy with it," they are wrong.

Man: I’ve had two separate DSL companies go bankrupt out from under me. Then Northpoint called and said, Oh we are going to move you to Covad and everything is going to be OK." That is the day that Covad announced that they were filing Chapter 11. Just raising the user prices on small volume wouldn’t have been enough. There were bottlenecks in the system such that, if we had all paid as much as we felt we were willing to pay, it still wouldn’t have been enough because they couldn’t roll the service out to make the margins on volume. It is an infrastructure problem.

Man: That goes to Bob’s question on why they can’t deploy it faster?

Evil Empire & Jedi Knights

Man: It seems like everyone’s question goes around in 3 main issues:
is it supply (is it the Evil Empire)?
is it the demand, killer applications?
is it finance, capital market, [the fact that companies can't find] profitability.

Peter asked a question about, when are we going to create the applications. In Sweden if you offer the bandwidth, people seem to be buying it. So that is why I was pretty curious about your question

Man: It is very simple. There are two parts of the equation. I think it is dead simple. The first one is you have to build the new network. It is not only playing around with all different types of technology because there are all different ways to do it. You have to do it in a very productive way. We have come into another environment and now it is kind of different.

Isenberg: Frank has an answer, not just a question.

Robles: I have a theorem. I think there is a cultural problem. People don’t want to work each other’s businesses. I was in the middle of all of this stuff. Maybe the guy in charge of sales won’t get comped or his sales force won’t get comped. Maybe the person in charge of the customer support group doesn’t want to take on the burden of teaching all the new people. There are huge political issues inside some of these companies. That is why some of them are falling by the wayside.

Freeburg: Why in the world do we think that there is one answer to any of these questions? I think that the web has already proven that there are many, many, many answers. OK not all of them are going to be workable and win but a lot of them are going to work and win. There is not one auto manufacturer, there is not one transportation network left, for heaven sake there isn’t even a single currency scheme.

Kamman: There is defiantly a lot of cultural resistance but more fundamental is economics. I have a taxi, I have no incentive to ever replace that cab, I just run the thing into the ground. The point is that if I buy a new cab nobody is going to hale my cab verses the next cab. So the reason I put in DSL, the reason I spent $500 to $1000 CapEx on DSL rather than spending 3-$5000 CapEx on brand new fibers alone. I don’t want to replace that cooper asset because it doesn’t actually deliver that much more revenue, it just keeps me in business. The fundamental question is in some ways is, how do we tip these guys over the edge?

Now another other thought on Sweden: some like 70% of the Swedes live in apartment buildings. This is not true in the US. Maybe our infrastructure [is not conducive]. Maybe we got shamed into it when the Koreans and the Germans and the Swedes and the Canadians got broadband., The point is no one wants to replace that 30 year asset out there because no one is paying for it.

Trebnick: Back to the original question, why are the DSL companies going out of business? And one of the big reasons is this. Catherine Hapka, who was CEO of Rhythms, who left when they went bankrupt and I have had many discussions on this. She had such a hard time negotiating carrier agreements and doing the provisioning and clipping. I want to bring in the regulatory aspects that they have and the hold they have on any next gen telco.

Isenberg: Back to the Evil Empire theme again.

Man: There is definitely a cultural issue but I think you are over rating it a bit. It is really funny how all the old people from AT&T went out and ran entrepreneurial companies and suddenly became entrepreneurs.

Lucky: But you know, the question I’ve asked a number of friends in the telecos and stuff is, do you really, really want to do DSL? I’ve asked Joe (???) who ran the program for Verizon. I said you loose money on every DSL line, right? His answer was two words: "Big time! We loose money -- big time -- on every DSL line."

Isenberg: And why do they want to do it?

Lucky: I’ll tell you why. A couple of people from other companies told me the one reason we really want to roll out DSL is because the analysts are counting the number of lines that we have. That is the motivation to do it.

Isenberg: Isn't the second reason that it is worth taking the loss to keep from having to do fiber? Because once they do fiber there is so much abundance out there that I could be a telco.

Man: I think the bottom line really is that it is an economic story. They are driven by different economics and you look at their economics and they have their solution to it.

David Reed: I don’t normally show my paranoid side but here is my deep paranoid side just to bring in one slightly different aspect of economics. There is a form of economics called regulatory economics, which is the books you show to the government. They are used in a lot of interesting ways. You cannot trust what companies say in a very fundamental way in big parts of the telecom industry. They are incented for not telling the truth. So here is my example: If you drive Route 128 outside Boston in this place where it is not economic to put new fiber, you will find trenches all over the place and wads of fiber this thick around going in. Now interesting question: there is nobody around here that will lay claim to doing it. In fact they do it with trucks that are unmarked. So this is my paranoid thought: people do recognize there is an economic question, and their incentive is not to tell people what they are doing until they can win the whole game. This plays out in Telecom all the time. You go for the whole game and until then you don’t let on what you are doing.

Peter Ekelund: I’ve only done about 10 projects in 10 cities calculating the costs and performance, all across Europe and I've actually done 2 projects here in America as well. [inaudible] We may announce this in one particular big city in middle Europe, about 400,000 people and the average price for the fiber for the building, about 25 apartments, is about $400 for getting a 100 Mbps connection for fiber to the home. Here it is about $700. The difference in the United States compared to Canada and compared to Europe and compared to Asia is the cost to right of way. You want to remember what is the cost. Let’s say you could put in 10 megabits with ADSL, or VDSL, but the cost of doing that is = 10 times higher than with fiber. People need to realize that they are investing money in what is long-term productive.

Isenberg: Scott has more data.

Bradner: Fortune magazine last year reported that the average cost of installing ADSL to a new installation with existing cooper, not new cooper was $1,400. The average cost of installing new fiber was $1,5000. That is in the US.



Curry: Just an observation. We are in this business. We have communities like Peter has in Europe. We have communities up and running delivering voice, data and video over fiber access networks in the United States now. We have 2 communities of 40,000 inhabitants who will be announcing within the next 60 days of complete conversion and complete fiber overbuild over the existing incumbents networks, voice and video networks. This works. The economics of it works. We are delivering those services over those networks. The ironic thing is that despite the incumbent’s complaints (and I know George (???) from trying to sell him OSS systems) despite their complaints about how extensive it is and how they’d rather not be in the business, Verizon, for example, spends hundreds of millions of dollars trying to prevent communities who have an appetite to do this, trying to prevent them from doing it, simply by lobbying (???) disturbances, in parts of this country. They absolutely refuse to allow the communities to finance it themselves. They will not ever, ever deliver services to those communities.

Isenberg: We have now 3 questions, at least 3 questions, can we save the questions fast just to see if they are the same question or not.

Laws: This is, I believe more about power than it is about economics, not that they are not connected. It is about incumbents wanting to keep in place. If you put fiber in as an incumbent it is a lot easier to open that up to third parties to use bandwidth than it is with cooper.

Man: Tom’s point was we can have lots of different things coming into the house. The question is, if you have fiber coming into the house, what else would you need? You don’t have a lot of electricity wires coming into the house.

Man: Watch this space over the next 10 years.

Isenberg: You have a question, though?

Freeburg: Why are we focusing on incumbents? I believe the future of communications to the home is in the direction of all sorts of new folks getting in there. We have to find ways. Second and I want to introduce you guys to what I call Freeburg’s Law, OK? I submit for roughly the same general network topology the electronics to make a connection cost the same whatever the medium is. [It can be] fiber, in place wire, (by the way, the in place wire can cause you a hell of a lot more grief, a lot more grief then putting in a new wire), new wire, or by the way, wireless. I just came across using the web, I submit a interesting fact -- in Germany today there are more Internet users than there are telephones.

Isenberg: Even fixed and mobile, both?

Freeburg: Yeah!

Isenberg: OK, Wow! Clay has been patiently waiting, Clay do your thing.

Shirky: I just wanted to quickly inject a note of historical pessimism into the incumbent conversation. I’m reading Janet Abbate's wonderful, "Inventing the Internet." In 1963 the Prime Minister of England suggested that it was imperative that the UK not fall behind the US in computer networking. It agreed to fund a notion for packets switched networking based on Baran and Davies' work. It was crushed by British Telecom. So this is not recent . . .

Man: Nonetheless the railroads and streetcars industry tried like hell to crush the nation's automotive industry in this country.

Shirky: When you look at the automotive industry they found a way to sell a product directly to end user that they can use without having to be part of another network.

Man: And they were in Federal Circuit Court buying local rail companies just to shut them down.

Man: Who framed Roger Rabbit?

Blake: And you can make analogies about the telecom industry doing the same thing. While I have the floor, I just wanted to say the right of way thing is a big problem. It was granted [to AT&T, but] they never actually paid for that asset. I am a property owner. I have a 2600 foot easement across my property by Verizon. I know that 3 owners ago under the name of Pacific Telephone Co., they gladly paid that off for a dollar, which means that it was granted by right of eminent domain. Those issues need to be worked out to be able to allow a new infrastructure. Who does that really belong to? Verizon? Or does it belong to the public cause it was granted to the public?

Isenberg: Eric has a question.

Best: This is from something that I heard last week at another meeting from Russell Eakoff(?) talking about systems. Systems can't be understood by analyzing [their] component parts. If we were talking about this as a system, what is the system mostly about? Does it have any sort of biologic properties of wanting to evolve or survive? What is it’s desire, this system? What is it trying to become? What is it doing? I find myself collapsing into these little black holes of cooper versus fiber in the last mile.

The Internet wants to be . . .

Isenberg: That is great! I want people to fill in with one word the following sentence, the Internet wants to be . . .

Free, To connect everything, Profitable, Accessible, Stupid, Kudzu, Iniquitous, God, Messy, Disruptive, Reliable, Left alone, Unregulated, Indifferent, Diverse Everything and its opposite A habitat for packets Faster

Isenberg: I’m trying to get your question, what does this system, what is driving the system to be what it is or to be something different than what it is?

Man: The Evil Empire is [trying to make] something different than the innovators [intended].

Man: In the US we are all citizens, individuals. The corporations also have rights that appear to be those of individuals. We wear two different hats. [We want a lot of bandwidth at home, and we want to make money from providing bandwidth.]

The Internet wants to be diverse.
It wants to be everything in its opposite.

Reed: Organisms create their own environment. I think that the Internet wants to be a habitat for packets.

Man: With little packet running wheels . . . and packet trails . . .

Man: It is our worst hopes and our best fears. Remember, last year we said, "We want the Internet to be free," and then somebody said too you want your kids to look up pornography.

Man: I don’t want it to be that free!

Man: Normally the Evil Empire is trying to give us want we want which is a safe environment.

Levin: By describing what the Internet wants to be I think we are missing a piece of the metaphor. If we are using an evolutionary metaphor you have evolution and competition and different actors so we are looking at the Internet as this competent actor. Then we are saying that there are corporations with lots of money and lots of political access and ability to buy the government. And that is a set of actors. Then there are entrepreneurs and they are another set of actors. So if we want to look at evolution, we need to look at who are the relevant actors, what are the motives of the different relevant actors and then what is mostly like to happen if you tell the story that way.

Ekelund: It wants to be faster (??). I don’t know, probably all of you have been in negotiations trying to get peering agreements and realized the policy of many incumbents and how quickly they really want to get those access points and how they want to accept those rules, which is just another way for them to control their local access. I think that the fastest operator should be the one defining the Internet rather than the other way around. That is a very, very effective way which they hold out. Let me give
you an example. If I come and offer 10 megabits, people say, "Why do you need 10 megabit? You only need a maximum of 500K, because that is how we define the capacity. So ADSL is absolutely max and you don’t need anything else."

Bradner: That is why IEEE just started a Ethernet in the last mile [group].

Man: The last mile?

Reed: The first mile.

Man: [Let's get back to] what the Internet wants to be. It seems to me that it wants to connect everyone to everyone else, and to all the organizations. It wants to interconnect all people and all organizations.

Man: Sounds like the telephone network!

Man: Yeah, it does, that is what I was thinking. I was wondering how is it different?

Man: My kids want to talk to their friends. And we want to send email back and forth to each other. And I want to go to websites and look what this company or this person at this meeting do. I want to be connected to all that.

Lessig: So I think that this is really unhelpful way talking because it makes us think that there is this vibrant, lively thing that is going to defend itself. There are a lot of real people and companies out there that really do have wants and they are the people that effect what the Internet is. This goes back to the Empire Strikes Back. We let the Empire get so much power and I’m not talking about the obvious Empires. We really thought that this thing was going take care of itself, that all censorship would be routed around, and all that bullshit. In fact, what we are realizing is that the architecture that we had, that was the brilliance that you guys built, has got to be defended, not by talking about what it wants but by what *we* want.

Supply, Demand, Finance

Isenberg: Good! That brings us back to reality. We are going to have a break pretty soon but Raj had a great idea and Tim Horan put some instantiation around that idea. Raj wanted me to do a little bit of straw polling to get a sense of the room about what are the critical issues. And Tim said that there were 3 themes here. One was supply and demand.

Horan: Supply problem, demand problem, a world finance problem.

Isenberg: OK but there was also an Empire problem, right?

Horan: Well the supply side is that the Evil Empire eliminates supply.

Man: The demand side is the killer applications that people really want.

Horan: The finance problem is very complicated. Is the problem that the capital market have abandoned the Internet? Or is the problem that the return on invested capital just wasn’t there, and people have been forward pricing too much. Those are the questions, unless I left one out.

Isenberg: This is a little bit bogus, but how many people think that the supply problem is the critical near term stumbling block?

Man: What do you mean by the supply problem?

Man: [He means] the Evil Empire limiting the supply and keeping pricing too high.

Man: By saying it is an Evil Empire problem, you're saying it is a supply problem.

Man: Who is it who said that when the Evil Empire strikes back why should we expect to be anything but evil? If we are looking to identify the source of the problems, we have to ask ourselves, is this the most productive way to understand how this moves forward. If you identify the problem as being behavior of a self-interested corporation preserving its incumbent position in the market you end up winding yourself around a whole bunch of protracted solution sense that I don’t think that we are empowered to really solve.

Horan: There are other issues around the supply side too. Tom has had a point that new technology is going to solve the problem, which is also the supply argument that you can make.

Man: There are unique problems in this country. Other countries “get it”. If this meeting was taking place in Canada, where I’m from, or in Europe or Asia it might be a completely set of answers to the questions that you are just asking.

Man: There are parts of Canada that work under Bell Canada.

Man: Oh, I understand! There are two problems. Notwithstanding that, there is more enlightened legislation, more enlightened Governments and this country doesn’t seem to understand that.

Horan: But can I answer the question? It seems to me if there was a compelling killer application out there that people were really willing to pay dollars for . . .

Man: No, the killer app is connectivity. What was the killer app for the car? What was the killer app for the telephone? There isn't a killer app. There wasn’t a killer app for the automobile. It is connectivity that you get, that is the killer app.

Man: There is no killer app, we already have it.

Shirky: When I think about supply, there is supply of bandwidth [but then] there is also supply of freedom. You know, what the users can do with the connectivity they've got is as least as big an issue right now, having seeing Napster driven down, seeing Packbell drop the alt.binary groups, and so forth. That is in my mind at least as big an issue: Supply of freedom at the edge of the network versus supply of high-speed access to the edge of the network. So I don’t know that supply and demand in big terms capture [the situation] granularly enough.

Isenberg: Let me try one more straw poll. How many people think that the economic situation in Telecom tech and networking is going to get significantly worse before it gets better? How many people think that were already at the bottom, or turning around and coming back up? The pessimists win. Among the pessimists, how many people think that the bottom is 6 months away or less? How many people think that it is a year away?

Man: David, there is another component. This goes back to the infrastructure question. When were the railroads paid for? They were never paid for. Will this infrastructure be paid for in the same way they were, in stock market crashes? We already had the crash. The question is, is the crash that we had enough?

Isenberg: Is the crash that we had enough yucky medicine?

Man: We have to work through the debt markets yet. You can only see public equity markets, but in the communication space people don’t really realize high yield bonds are trading 30 or 40 cents less than a dollar.

Reed: I have a different way to think about it. We tend to get sucked into tangibility or what I call 'the hardware fallacy'.

Isenberg: Which is?

Reed: Which is that this business is about the hardware or the wires or even the spectrum if you think of that as a tangible thing. In fact the economy of communications, the application level, could be at its bottom and it may never be the case that a particular round of hardware recovers. It might move on to a new platform.

Isenberg: Raj, the answer is that these guys will not do a straw poll. So ladies and gentlemen on that note we are going to take a half hour break and when you hear the music again come back in.

Page last modified: November 14, 2001
(return to top)