The Pulver Report - May 8, 2003 Issue The Pulver Report(TM) Provided by: pulver.com, Inc. The May 8, 2003 Issue: RE-SENDING OF THIS NEWSLETTER TO ANY NUMBER OF COLLEAGUES IS ENCOURAGED, PROVIDED YOU ALSO CC: REPORT@PULVER.COM. IN RETURN, WE WILL PROVIDE RECIPIENTS WITH A SUBSCRIPTION. YOU CAN ALSO VISIT http://pulver.com/reports/subscribe.html TO SUBSCRIBE. TO UNSUBSCRIBE, PLEASE VISIT http://pulver.com/reports/unsubscribe.html. ANY OTHER UNAUTHORIZED RE-DISTRIBUTION IS A VIOLATION OF COPYRIGHT LAW. ------------------------------------------------------------------------ In this Issue: - Heard on the Net - VoIP Regulatory Battle moving to the US States - Dr. Robert C. Atkins - A Man of Vision who Dared to be Different - Not Your Father's Telephony: The future will be different than the past - Letting Go of the Old Scarcity Business Models - VON Europe 2003 Tradeshow & Expo: June 9-12 in London - SUPERNOVA 2003: July 8-9, Washington, DC area - Invitation to Participate at SIPop! 2003: September 23-25 in Boston - Free World Dialup User Group Meeting: June 9th in London - pulver.com 2003 Conference Calendar ------------------------------------------------------------------------ Heard on the Net: - People on the Move: - Joe Rinde recently left AT&T and is now running a consulting service. - Chuck Wegrzyn recently left IPeria and is consulting in the SIP/VoiceXML market. - Lewis Foster recently left Catapult Communications and joined ipNetfusion as the North American Sales Manager. - Stowe Boyd left Ikimbo and joined "A Working Model" as Managing Director. - Brent Lorenz recently left Wind River and join Trinity Convergence as Director of Sales. To be listed in a future "People on the Move" column, please email: people@pulver.com to report a change in your position. Please refer to: "People on the Move" in the subject. ------------------------------------------------------------------------ VoIP Regulatory Battle moving to the US States Since the Winter 2003 NARUC meetings, the State Public Utility Commissioners ("PUC") around the United States have increased their focus of VoIP technologies and some States have in fact started taking specific actions which the US VoIP Industry now needs to pay special attention to. In some ways I find these actions ironic since the penetration of broadband VoIP services in the United States in reality today is still quite low (less than 150,000 consumers) and yet some lobbyists are hard at work to build in barriers to the innovative technologies and next generation services which only IP communications can offer. Back in 1996 the VON Coalition was founded to help fight the regulation of Internet Telephony in the United States. It seems to me that now would be a great time for all companies in the VoIP industry to join (or re-join) the VON Coalition so that we can have a stronger and more effective voice not only in Washington, DC, but also on a State level. The VON Coalition tries to be representative of the industry. It relies on relatively modest dues from industry members and on the active participation of knowledgeable people. Our toughest job is to educate policymakers about VoIP, so they respond to it rationally. If we don't do that, then policymakers only hear from those who are ignorant or have an incentive to saddle us with regulations. Three States which are my personal watch list include: Virginia: The Virginia State Corporation Commission has taken notice of Vonage and feels that it is subject to it's jurisdiction. Vonage doesn't seem to agree with the Virginia regulators. This will be an interesting proceeding to watch as it unfolds and it may set the stage for similar actions in other States. Ohio: State Public Utilities Commission started an inquiry on how telecommunications providers are using VoIP in Ohio to provide telecommunication services to Ohio consumers. This proceeding will look into how "telecommunications services with an Internet Protocol and/or voice over the Internet component" are being delivered in Ohio. The State PUC is looking for comments on whether or not a company that is providing VoIP services is "transmitting telephonic messages" as defined by Ohio law. It turns out that under Ohio law, companies that are in fact "transmitting telephonic messages" are a common carrier subject to the State PUC's laws. Comments for the Ohio proceeding need to be sent in by June 13th. Interesting side note, the State PUC is also asking that all existing VoIP service providers send in a questionnaire to the State PUC by May 16th. From what I heard, companies who decide to fill-in the questionnaire should be careful how they reply to it. Florida: The Florida Public Service Commission is waiting on answers to the pending AT&T petition at the FCC with regard to whether or not VoIP providers should be responsible for paying access charges to local phone companies when they offer similar services. There is a bill pending in Florida that will effect consumers living in Florida. According to recent story in the "Palm Beach Post" 'Under the proposed law, the PSC could decide to leave VoIP unregulated, but that decision would then allow BellSouth to immediately boost its rates by about $1 billion, increases that would otherwise have been spread out over six years.' The Florida State Sentate's VoIP Bill is available for viewing by visiting: ( http://tinyurl.com/b5nb ) Also, at the summer meeting of the Mid-Atlantic Conference of Regulatory Utility Commissioners, there will be a panel called "Voice over IP, to Regulate or Not to Regulate; Is this the Death Knell for POTS." The brochure describes the panel as follows: History tells us that as new innovations come along, regulations usually follow soon thereafter. This panel will focus on one of the newer innovations - Voice over IP using broadband. Current issues relative to the provisioning of local telecommunications services over IP and the access charges relative thereto will be debated. The panelists will address questions to include: What is Voice over IP? Is it a telecommunications service? What authority do regulators have over this, if any, and which regulators have the authority? What authority should regulators have over this? What are the ramifications/tax implications of Voice over IP? The panel is scheduled for July 1 at the Homestead in Hot Springs, VA. The panel is headed by Commissioner Clinton Miller from Virginia -- the Commission that has raised questions about Vonage. While those in the VoIP Industry can look to work with the VON Coalition to have an impact, and keep internet telephony unregulated in the US, now would also be a great time for individual US consumers and people who work in the industry, to take the time to reach out to their respective State Commissioners and have their voices heard as well. Regulations are able to get passed on a State level too often just because too many people are silent on the pending laws until after they become law. As a community we have an opportunity today to stand up and be counted and start taking the steps to email our State Public Utility Commissioners and let them all know where we feel they should stand on supporting the use of VoIP in their respective States. ------------------------------------------------------------------------ Dr. Robert C. Atkins - A Man of Vision who Dared to be Different The world lost a great man when Dr. Atkins passed away on April 17, 2003. Dr Atktins was a man of vision who dared to be different and stood up to the establishment. For the past 40 years he stood his ground and shared his findings and his thoughts to a world which challenged his work, his word and his findings. Dr. Atkins is a role model for anyone who needs inspiration for a reason to hold their ground, go up against the status quo, share their ideas and try to make the world a better place. Looking back over the years, Dr. Atkins took on the establishment as well as conventional wisdom and at times took a lot of heat for what he said and the information he shared with others. Dr. Atkins believed in what he said and in turn his enthusiasm and dedication helped liberate millions of people in their diets and approach to healthy living. On a personal note, I've been on the Aktins diet myself for the past 6+ months and my loss of 55 lbs is living proof that not only does the Aktins diet works but helps provide for healther living. When I think of Dr. Atkins, he continues to encourage me to continue to focus in things that I believe in and do things that I feel are the right things to do even if when there is no immediate support. For more information about the life of Dr.Atkins, please visit: ( http://atkinscenter.com/atkinslegacy/index.html ) ------------------------------------------------------------------------ Not Your Father's Telephony: The future will be different than the past Spring 2003 VON included a number of sessions revealing a VoIP future very different from the telecom past. In particular, presentations at "Deploying 802.11 Hot Spots" and "Open Source Telecom" sessions represented significant departures from business as usual. Most of the efforts described arose from business models that obtained return on investment indirectly and leveraged the computer and networking industry layered value chain. Telecom veterans accustomed to usage based charging and vertical integration might have trouble suppressing skeptism, but it seems hard to argue with the dramatic growth rates achieved. Extremely low cost or free connectivity offered with "best effort" reliability represents significant competition for highly reliable connectivity offered by traditional telephone companies. The Internet introduced the best effort model along with email and web browsing and it continues to expand rapidly. The low cost allows one to procure several of these best effort communication tools for less than a single offer from traditional sources. The 802.11 Hot Spots seem likely to make 3G obsolete (or at least signiciantly challenged) by the time it gets deployed. This seems obvious even without taking into consideration the companies demonstrating WiFi and VoiP solutions using PDA that turn Hot Spots into Free Phone Call Spots. The hurdle for most folks seems to be the difficulty of relinquishing the direct return on investment business models. Consider why Cisco supported the open source telecom project Vovida.org. Cisco benefits from the expansion of the Internet, so a project that expands Internet applications benefits Cisco although it might prove very difficult to show a direct cause and effect. Similarly, Digium supports the open source project Asterisk.org in hope that their implementers buy their hardware. The cost of customer acquisition separates the winners and losers in competitive markets, and giving something away for free can prove an very efficient way to acquire customers. (Remember, free IS viral.) Many people have noted VoIP depends on a layered value chain similar to the computing and networking industry, but it remains unproven whether one can morph the vertical integration of old into one of horizontal integration. Companies that launched over the last several years which on their own were only software or chips or boxes of some kind tended to find it necessary to assemble complete integrated solutions before finding customers. The Hot Spot and Open Source trends reveal alternative ways of addressing this challenge. The Hot Spots become increasingly ubiquitous as either community driven or as a perk for customers as in the case of the free WiFi connectivity at Spring 2003 VON. Open Source telecom continues to develop under similar community driven or marketing driven logic. ------------------------------------------------------------------------ Letting Go of the Old Scarcity Business Models by: Daniel Berninger, dan@pulver.com A truism in economics holds that only scarce things have value. Telecommunications since the invention of the telephone revolves around the scarcity of connectivity. Service providers charged for connectivity based on time (minutes of use - MoU) and the locations connected. The application obtained with the connectivity received little attention as resisting the emergence of competitive connectivity proved the path of least resistance to profits. The Internet as a creature of the computer and networking industry grows as a function of applications enabled by the connectivity. Some applications require more capacity and performance than others, but no one pays as a function of time and locations connected. The emergence of VoIP put these two business models on a collision course. No one thinks connectivity can remain scarce, but those with the old scarcity business models don't show much interest in laying down their weapons. The computer and networking industry started out with a scarcity business model regarding processing power (millions of instructions per second - MIPS). IBM pursued an anti-competitive path in the early days by resisting third party applications, punch cards, maintenance, and resale. An antitrust complaint pursued by the United States Department of Justice in 1952 and settled in 1956 (http://www.cptech.org/at/ibm/ibm1956cd.html) made it difficult for IBM to maintain its anti-competitive ways. The subsequent mini-computer and personal computer revolutions revolved around scarcity of applications not processing power. The pursuit of applications remains the primary driving force of the computer and networking industry. The continually expanding abundance of MIPS and corollary improvements storage and memory makes an expanding range of applications possible. The continually expanding abundance of MoU's could similarly drive an expanding range of communications applications, but the incumbents and insurgents alike remain wed to the scarcity of MoU's. The emerging flat rate unlimited usage plans represent a step in the right direction, but these still don't represent a shift in focus to communications applications. We can expect considerable anti-competitive behavior to keep the price of the plans from falling. Free World Dialup represents a notable exception as it extracts no value from simple connectivity or the baseline application of voice. It nonetheless can serve as the basis for an application centric ecosystem. It already represents a signficant force in the sale of Internet compatible telephones. The Free Wi-Fi hots spots movement represents another example. Ubiquitous free connectivity promises to enable terrific communication applications that a ubiquitous paid hot spot (scarcity) model does not. Consider the difference between our present world and one where every road charged a usage based toll, and you will understand why users flock to FWD and the Free Wi-Fi hot spots. Trading connectivity scarcity for the pursuit of communication applications does not preclude profits as the applications create demand that rapidly grow revenues. The application centric computer and networking industry grows at annual rates above 30% over decades. The connectivity stingy telecommunication industry grows little faster than the background GDP or 3% per year. Competition essential to drive innovation keeps profit margins thin as compared to monopolization business plans, but consider that twenty years of 35% annual revenue growth produces an industry 200 times the size of one growing 3% per year. This outcome characterizes the telecom and computer industries. At the time of the IBM Consent Decree in 1956, the telecom industry vastly overshadowed the computer industry. The present computing and networking industry overshadows the telecom industry. The mainstream telecom industry still seems hopeful they can reshape the Internet to conform with their connectivity scarcity business models, but we should all hope they don't succeed. ------------------------------------------------------------------------ VON Europe 2003 Tradeshow & Expo: June 9-12 in London As a reader of the Pulver Report, if you register for the VON Europe 2003 Tradeshow & Expo ( http://pulver.com/europe2003/register.html ) using the special priority code: PULRPT, you can now visit the exhibit hall and attend the special VON "Keynote" sessions for US$ 120 (+ 17.5% VAT) from today until June 8th. An updated exhibitor list is posted to: ( http://pulver.com/europe2003/exhibitors.html ). Our updated conference schedule is posted to: ( http://pulver.com/europe2003/schedule.html ). ------------------------------------------------------------------------ SUPERNOVA 2003: July 8-9, Washington, DC area Kevin Werbach's Supernova Conference brings together cutting-edge executives and companies to consider the distributed future of communications, software, and media. It is the one place that assembles the people, companies, investors, and trends that will lead the next wave of technology- driven change. Some of the insightful and provocative speakers at Supernova 2003 include former FCC Chairman Reed Hundt, Sun Microsystems EVP Jonathan Schwartz, Nokia's Marko Ahtisaari, Vice Admiral Dennis McGinn, Neoteny CEO Joichi Ito, Macromedia's Kevin Lynch, Assistant Secretary of Commerce Bruce Mehlman, and commentator Clay Shirky. Sign up now for the only conference focused on the business implications of decentralizing technologies such as WiFi, Web services, connected digital devices, weblogs, and broadband media! Visit ( http://www.pulver.com/supernova ) for more information. ---------------------------------------------------------------------- Invitation to Participate at SIPop! 2003: September 23-25 in Boston SIPop! premiered at Fall 2001 VON and it will be happening again in Boston September 23-25 on the show floor at the Fall 2003 VON Tradeshow & Expo. Details regarding SIPop! 2003 is posted to: ( http://pulver.com/sipop ). SIPop! is an open event and all members of the VoIP Industry with commercial SIP implementations are encouraged to participate with us in Boston. SIPop! was the industry's first and only General Availability Interoperability Event, coordinated by pulver.com. The event is designed to help display entire working solutions by the SIP community. While other SIP Interoperability events now exist, none offer solutions that are available for sale and installation in a production network. SIPop! will feature SIP, SIMPLE and various SIP extensions we look forward to demos which include Presence and Instant Messaging applications, Enterprise and Service Provider solutions. When it premiered, SIPop! was found by all to be an ideal platform with which to present complete, working solutions to both service providers and enterprises looking to supplement or replace their existing PBXs and/or traditional PSTN solutions. The strength of the event is its unique offering of all possible product and company partnerships in a live working environment right on the show floor. It is possible for a potential buyer to request an on-demand demonstration of multiple vendors' products, and see for themselves a working solution in moments. This is an unique offering to both the potential buyer and to the demonstrating company. The next of our scheduled planning meetings will be taking place in the form of a conference call, scheduled for May 20th at 2PM EST. If you are interested joining SIPop! 2003 and would like to receive the call-in details as well as the information regarding the costs to participate, please email: sipop@pulver.com. ------------------------------------------------------------------------ Free World Dialup User Group Meeting: June 9th in London Since the launch of Free World Dialup six months ago, Free World Dialup has grown to a worldwide user base of over 22,500 people in over 100 countries. Free world Dialup has become one of the fast growing Voice over Broadband Networks and we are currently growing by 200-300 people a day. If you haven't signed up and given Free World Dialup a try yet, visit: ( http://pulver.com/fwd ) and join the FWD Community. You are also invited to join the FWD Mailing List: (http://listserv.pulver.com/archives/fwd.html ) The first of our planned FWD User Group Meeting for 2003 will be taking place on June 9th in London at the Olympia Centre. This meeting is open to all FWD members and is free. This meeting will be a great chance for the FWD Community to get together and for us to associate the name and FWD number with the voice and email address. Together we can share our experience with being early adopters and pave the way for more end-to-end IP Communication. The meeting agenda which is posted to: ( http://pulver.com/fwdugm ) is aimed at informing the users, what we use, what can be used, and what opportunities there are for future services and solutions. The meeting will feature talks from members of the FWD Team as well as key members of the Free world Dialup Business Partner Program. ------------------------------------------------------------------------ pulver.com 2003/4 Conference Calendar ( http://pulver.com/conference ) "Events for the Communications Industry" (tm) June 9-12 - VON Europe 2003, Olympia Conference Centre, London, UK ( http://pulver.com/europe2003 ) June 9 - FWD User Group Meeting ( http://pulver.com/fwdugm ) July 8-9 - Supernova 2003, Washington D.C. ( http://pulver.com/supernova ) September 22-25 - Fall 2003 VON Tradeshow & Expo, Hynes Convention Center, Boston, MA ( http://pulver.com/von ) September 23-25 - SIPop! 2003, Hynes Convention Center, Boston, MA ( http://pulver.com/sipop ) September 30 - October 1 - RVC SoftEdge 2003 ( http://pulver.com/rvc2003 ) November 11-13 - SIP Summit 2003 Santa Clara, CA - 2004 - March 29 - April 1 - Spring 2004 VON Tradeshow & Expo Santa Clara, CA ------------------------------------------------------------------------- If you are aware of others who would like to receive the Pulver Report, please visit ( http://pulver.com/reports/subscribe.html ). To unsubscribe, please visit ( http://pulver.com/reports/unsubscribe.html ) Please send your comments and feedback regarding this issue of The Pulver Report to: jeff@pulver.com. Jeff Pulver Tel. +1.631.547.0800 The Pulver Report Fax. +1.631.396.3996 May 8, 2003 http://pulver.com/reports ------------------------------------------------------------------------ (c) 2003 pulver.com, Inc., All Rights Reserved. ========================================================================