Friday, 3 December 2010

Dial-up Internet Wasn't Free

Whilst reviewing the paper published on the Australian Policy Online site by Robert and Charles Kenny I came across this:
dial-up ... wasn’t expensive – a 56Kbps modem cost $100 in 1997, in dial-up’s heyday. The per-line share of the ISP’s modem bank was a further $90. For this sub-$200 upgrade, society got email ... e-commerce ... User-Generated Content ... online news ... and social networking
(p. 16)

I would condense their further argument to "we didn't spend anything on the first Internet so why should we on the next one?"

They seem to be unaware of the millions of pounds that were spent on upgrading the PSTN to support their $100 modems.  Data calls hit the telephone network like articulated juggernauts on country lanes - the call profiles weren't what the old voice network was designed for and there was a meltdown on the tandems and the trunks, especially on the interconnects between BT and the fledgling OLOs who were busy signing up ISPs onto their access platforms.

Sadly for some of us around at the time, our cries to implement FTTH or at least FTTC and DSL to the home went unheeded - the masses had spoken, they could see that modems only cost $100 and that 56kbps (small "k" for kilo by the way Mr. and Mr. Kenny) was the speed of the Internet.

The "campaign for unmetered telecommunications" (amazed the web site is still up!) was unwittingly doing long-term harm by diverting investment away from revolutionary technology into propping up the creaking old infrastructure of the past.  Sounds familiar desn't it? only now it is BT that is running the campaign, in their "race to Infinity."  I'll write up my opinion on their motives for this another time, suffice to say I smell a rat.

Peter Cochrane, when he was at BT, wanted to start using fiber to replace phone lines back in the 1980's purely as a way of providing better quality, future proof, telephone service - he knew data applications would come in the future, and they could happily run voice over it until that day.  This wasn't a proposal to replace existing fiber, only to make it the standard for new deployments as there was little cost difference.

Politics got in the way back then but if he'd succeeded, by a simple process of natural churn, I guess half the population would have fiber in the home by now.

Going back to the creaking phone network and those modems, it was fortunate for the telecom companies of the day that money was easily accessible by means of rights issues and the willingness of private investors to bankroll the future without being too fussy about what the money was actually being spent on.

Today there isn't so much free money so funding the investment in new technology becomes a public interest story.

Despite their flawed argument I happen to agree in part with the Kenny report - I don't think the government should splash out a couple of billion on replacing the copper network with a fiber one overnight (not that there is much risk of that in any case) not least because the government doesn't have a good track record in sponsoring large  infrastructure projects (NHS anyone?)

I am a believer that community interest companies can bring next generation networks to the final third, but there are some concessions (not money, though some seed money would be handy) that the government needs to make in areas such as rates (VOA) and regulatory constraints (allowing sharing of infrastructure and backhaul) that can help make community networks viable.

In addition, BT should revert to Peter Cochrane's plan and stop deploying copper.  In 20 years we will have a FTTH network, and it won't have cost anything.   If you don't want to wait that long, perhaps we should have started 20 years ago, when we first knew we wanted it.

1 comment:

  1. Am I right in saying BT aren't deploying copper in any amounts. They are trying to sort out with Ofcom a product to deliver over fibre that enables ISPs and voice to be provided separately and still have the USO to contend with. They also have to provide a phone service that works when the power goes off.

    Blame Mrs Thatcher, she stopped fibre. Something to do with cable TV companies, what happened to them?