Voice
Communication in Business Volume 1
Essays on telecommunications,
1969-1980
Chapter 21
Innovation, Competition
and Interconnection
As should
be evident by now, I do not take kindly to ideological solutions to
technological problems. One cannot make water flow up hill by
thinking pure thoughts; one must build a pump. Since not everybody
knows how to build a pump, some effort must be made to encourage the
people who do know how to take on the job.
The
infinite rewrites of the Communications Act, none of which has been
completed as yet, and the FCC's decision to pull an end run and
deregulate the telecommunications industry except for those who know
best how to make it work, make me uneasy. The competition vs.
regulation issue is more complicated that it looks, and it will be
easier than any lawyer or economist realizes to stray down the
primrose path beyond the point of no-return.
By and
large, competition puts two or more people in a position to do a job
that could easily be done by one. This increases employment, but,
unfortunately, we usually find competition degrading quality or
increasing costs, and sometimes doing both. There are many examples
in this book of a monopoly simply refusing to deal with problems
that do not interest it; however, we have also seen many competitors
simply copying the monopoly blindly, particularly were it does
things wrong.
***
With the FCC racing
Congress to see which can do the most to force telephone rate payers
to subsidize the high costs of competition, it is perhaps worth a
few minutes to look into the competition vs. regulation issue. In
our everyday transactions, we know that the principal advantage of
competition is the satisfaction we derive when, after a bad
experience with vendor, we "take our business elsewhere." The need
for this freedom as a safety valve in the face of frustrations
produced by normal purchasing operations is basic, and doubtless of
great social value.
But today, let us limit
ourselves to competition and innovation. Popular concepts in
economic theology hold that competition is GOOD because, among other
things, it produces innovation. As far as I can see, however, this
is simply untrue. While innovation may produce competition, as can
be seen, for example, in the computer industry, competition very
often stops innovation dead in its tracks.
Anyone who doubts this
may wish to experiment. Just try, for instance, to get a pair of
slacks that are not "Dacron Polyester." Polyester is, no doubt, a
great innovation, and clothing manufacturers all compete to use it.
But for those of us who are allergic, it is a nightmare. Under
competition, no manufacturer can afford to NOT use polyester, and I,
exercising my theoretical "freedom to choose," have no place to go.
As I type this, I am wearing a pair of cotton pajama bottoms in the
privacy of my home-office.
Clothing styles, within
any one year, eliminate almost all choice except brand name. Try to
get cuffs on your pants when the style is cuffless, or a wide tie
when the style is narrow. I remember once going into twenty stores
trying to find a "spy" type raincoat, and finally having to settle
for an umbrella.
Other fields have a
boring sameness of product. To see the kind of innovations you can't
get in the competitive market place, just try to find a clock radio
with push-button tuning. Or a digital desk clock that shows day and
date simultaneously with time. And although a diversity of style
gives automobiles an appearance of variety so that customers can
differentiate between advertised products, the internal similarity
is striking.
There are practical
reasons for this high degree of similarity in cars. Training
mechanics is hard enough, but providing background to service
station operators and other outsiders on the care and feeding of
something novel might lead to disaster. One can not afford to
deviate very much from the familiar in a competitive situation.
Some examples of innovation
In all these instances,
the story is the same: in a competitive market, nobody can afford to
differ much from anybody else. But if this is actually the case, how
do the innovations we see around us daily come into existence? Why
are we not still riding in buggies and going to the Chautauqua?
The answer is quite
simple. Inventors produce innovations. That is their nature. They
can no more not invent than they can not breathe. And their lives
are stories of continuous heartbreak as they try one place after
another to sell their ideas. Indeed, they learn very quickly that
the purpose of business is to maintain the status quo. Western Union
refused to buy Bell's telephone, considering it a mere toy. The idea
that Westinghouse could stop a train "with a breath of wind" was
derided. And even the great Edison rejected alternating current. IBM
very nearly passed up the computer. And the lean burn engine was
rejected by everybody in Detroit before the Japanese finally tried
it.
However, sometimes the
inventor gets through. In the 1890's, the bicycle craze hit America,
followed almost immediately by the automobile. And one of the few
bright spots during the depression was the development of radio
broadcasting. Later, television expanded into a vacuum, selling all
over the world beyond the wildest dreams of its early inventors.
All of these innovations
have one thing in common: they hit a brand new, previously untapped
market, satisfying a long pent-up thirst that nothing earlier came
even close to slaking.
But once each of these
items was established, major innovations were frozen out. The "5
tube ac-dc" radio set took over the universe, for instance. The
vacuum tubes were standardized, and, to achieve economies of scale,
each manufacturer would run off a particular tube type for the whole
industry. On a particular run, one company might take over 50L6
tubes for the whole industry, while another might run off 12SK7s.
Each plant could label the tubes with a variety of logos so that
different brand names would appear. And similar runs were made on
the highly standardized radio sets themselves. Just because a set
was sold under one brand name was no assurance that it, or its
plug-in tubes, were made in a factory of the brand's owner. The
purpose of brands, after all, is to act as a focus for advertising.
Transistor radios forced
their way into the market from Japan, and only won out because they
made PORTABLE radios really practical for the first time, again
filling an unmet need.
The learning curve
The point is, simply,
that innovation in customer products, when it is permitted to exist
at all, seems to work best where it has little competition from
existing art. It is much harder to take over the field from a
success than it is to open the field in the first place. TV stuck
with vacuum tubes almost as long as military electronics,
demonstrating a remarkable stability in the face of revolution. In
such highly competitive markets, where standard equipment and people
to service it are already available, change is almost impossible.
In a technological
society, we seldom make just one of something. We mass produce,
turning out thousands or millions of items in a continuing process.
The costs of such a process have to be known accurately before
production begins; further, once the process is running, it is
usually refined and improved by many people over a period of time on
the basis of experience. It is here that a second form of
innovation, known currently as "the learning curve," takes over.
When riding the learning
curve, innovators have an easier time. More often than not, finding
a way to reduce costs or increase profits on something that is
presently being done is met with considerably more enthusiasm than
the invention of something new and untried; even hard-headed
business men find it difficult to reject this sort of innovation.
The risk is less and the results are easier to predict. But note
that such innovation is not in the product, but in the process that
produces the product. And if some other company starts out with an
improved process, the first company must improve its process
prematurely just to keep up, losing some of the potential revenues
its original process promised.
Obviously, few would
bother to do all this for a small market. A large market powers the
learning curve, and motivates improvements. Two or more companies
may force process improvements on each other y direct competition,
but sooner or later the market may be subdivided so far that nobody
can sell big production runs and the incentive for improvement is
reduced. A wave of mergers and bankruptcies may then shake out the
industry, often leaving many customers high and dry. A larger market
(that is, less competition) might have permitted further
improvements and lower costs, but at the expense of some delay in
process change.
The general idea of the
learning curve is not well understood. Many who see the prices of
electronic circuitry dropping rapidly believe that this is the
nature of things and the trend can continue indefinitely. However,
NO trend continues indefinitely. Everything bottoms out somewhere,
and only then can new, untried processes begin to catch up. If the
new process bottoms out at a point above some earlier process, it
may never take over. However, a stable older process may become less
economical as it loses production in the face of customers going to
more expensive but more glamorous products from a new process.
Innovation and telephony
The telephone industry
offers many interesting examples for these two kinds of innovation.
As a regulated monopoly, it encouraged new ideas far more
enthusiastically than most industries; with its market assured, it
could afford to take a chance on something new. Further, by selling
service rather than a product, it had far greater control over its
own hardware. "Vertical integration" aided the process: R&D,
manufacturing and operations could work together on a problem
without the need for formal specifications and without concern for
secrecy of proprietary information; contracts and specs, statements
of relationship between adversaries to fix the blame upon failure,
could be dispensed with by one big company concerned only with
making the system work.
The telephone industry
developed carrier systems at a rapid rate for transmission, and it
produced five generations of automatic switching while automobiles
remained in their first. If you are only paid when service is
rendered, you have every incentive to do things right. You design
for long mean time between failures, and short mean time to repair.
You design equipment to be repaired easily, and you include training
programs to facilitate operations. A system is not just a pile of
hardware; it also includes the people who make it work.
Further, when service is
paid for a nickel and a dime at a time, it is important to keep
charging simple and economical. Uniform rates have been used in the
past, both for local service and for toll calls. These have the
great advantage of encouraging innovation in sparsely populated and
thin-route areas; when you have the same revenue coming in from a
down-town line as from one to a farm ten miles out in the boonies,
you knock yourself out to lower the costs of providing the latter.
If the cost of every
phone and the calls made thereon varied depending on, for instance,
the distance to the central office or the remoteness of the local CO
from the toll office, the bookkeeping cost burden on the rate payers
could be staggering; further, by letting the price of service to
remote customers go up depending on hardware costs, there would be
little incentive to bring those costs down. Indeed, with this sort
of reasoning, development of remote concentrators and digital
central offices incorporating concentrators and station carrier
would not have been necessary. It has been suggested, apparently
seriously, that the government should subsidize rural and thin route
service (beyond the present low interest REA loans) to permit its
greater cost to become visible; presumably this will encourage
innovators to come into fields where revenues are high, and join the
bureaucrats at the public trough (Ref. 1).
So far, in the little
more than a decade since Carterfone, there has been a great hoo-ha
about innovation in the telephone business. But most of the claims
have been public relations puffs trying to convince the public that
by using vastly more expensive components to render the same old
telephone service, PROGRESS is being made.
To see what is actually
happening, we have to look back at the past decade. The 1970s are
perhaps the most important years in the history of electrical
communication, mainly because they mark the period when electronics
came of age and reached a degree of reliability far enough beyond
that required by home entertainment equipment to be given serious
consideration for use in major systems. Cost has declined on the
learning curve as manufacturers have found out how to make and use
modern components. This growing reliability and shrinking cost is
far more important to the development of electronic telephone
equipment than the "interconnect revolution" which just happens to
coincide in time.
Interconnect
There are actually three
separate aspects to the interconnect scene, and all parties involved
have used arguments from one aspect to support their desires in
another where things are different. This has led to misunderstanding
and bitterness, and has created little of benefit to the user of
communications. It has, however, enriched some members of the legal
profession beyond even their wildest expectations based on
experience with medical malpractice suits.
Data. The first
aspect of interconnect involves computer communication. From the
very beginning (and even before), it was obvious that computers
would be controlled by electrical signals, and that such signals
could be sent over wires. With telephone wires everywhere, arranged
for instant connection from any location to any other, the telephone
was a logical choice. Actually, teletypewriters were used as
computer terminals very early in the game, and telegraph channels
would have been a good choice, too. But telegraph lines do not have
the ubiquity of telephone lines.
There was a problem,
however. The telephone company never liked "foreign attachments." It
didn't even like somebody else's covers on telephone books. (Such
covers are not one of the major "harms" to the network, but they
have been attacked as vigorously, denying credibility to legitimate
telephone company arguments.) And since telephone company ownership
of all computers was somewhat less practical than ownership of
telephone sets, the answer seemed to lie in the development of
special telephone sets for computers and terminals. Bell Labs,
however, had little interest in such problems, preferring to work on
more urgent projects like Picturephone. But others were very much
interested. As of the end of 1971, a little more than three years
after Carterfone, there were 60 manufacturers of these "modems" in
business, offering about 400 different models; something like
300,000 modems were in use. Prior to Carterfone in 1968, only modems
from the telephone company could be connected to the public switched
network. Modems from other manufacturers could be used on leased
lines.
Later, a "protective"
mechanism permitted such modems to connect to the public network as
well (Ref. 2). The need was there, and the telephone industry
couldn't hold data transmission down to the telco's traditional
glacial speed.
Specialized carriers.
Confronted with all this, the FCC, like many others, decided that a
"data explosion" was imminent, and the telephone industry, obviously
less than enthusiastic about modems, would never be able to provide
channels to handle the volume of data traffic that would soon be
involved. Thus "specialized common carriers" would be needed to help
do the job. This led to the MCI decision in 1969. Subsequently, a
number of specialized common carriers entered the field, supposedly
to handle the data explosion. Data, however, is digital, and the
only one of these terrestrial specialized common carriers that was
prepared to work in anything approaching a digital mode immediately
went bankrupt. This left several analog carriers to cope with
digital data. As things turned out, some them didn't do too well
along these lines. Thus they expanded their voice tie-line business
and, later, built voice networks paralleling that of the telephone
company and reaching several major cities.
The telephone industry,
with some justice, pointed out that toll calls on the public network
supported the rest of the telephone business including, through
"separations," the non-Bell (Independent) telephone companies (Ref.
3), and losing this source of profit would have dire consequences on
the cost of local service. The FCC, undaunted by the impact of
trucks on trains or the New York Port Authority's bus terminal on
rational public transportation in northern New Jersey, paid little
heed. Indeed, the FCC forced the telephone companies to allow the
"specialized" common carriers to connect to local central offices to
facilitate completion of calls. Further, "consumer advocates," long
strident critics of the hopelessly complex trucking tariffs approved
by the ICC to enforce competition (Ref. 4), encouraged a start on
similar tariffs in the communication business to provide suitable
protection to all would-be competitors who felt they had a right to
a piece of the communication pie.
During all this, there
was considerable discussion about Telpak (a bulk purchase
arrangement for tie-trunk circuits), and how the telephone industry
had given cut rate prices to private lines used by big business.
Telpak was thus considered to be doubly evil in that it was unfair
competition against "specialized" common carriers and manufacturers
of microwave equipment and that it gave large buyers a bargain not
available to small buyers of telephone services.
There was very little
discussion about how scarce the spectrum for microwave channels was,
particularly around major cities, or how several small systems would
make much less effective use of what spectrum there was compared
with one big system serving everybody. And there was no discussion
about how much money the telephone industry saved in taking highly
concentrated traffic from one business location to another directly,
without tying up the expensive switching systems in the toll
hierarchy. Or how economies of scale encouraged larger systems at
lower cost per circuit mile, particularly in microwave systems. And
nobody talked about how tie-trunk networks, developed for large
industry and made cost-effective to customers through Telpak
tariffs, reduced the cost of products manufactured by large
industries and increased the use of and need for telecommunications
at all levels. It just won’t considered polite to discuss the
possibility that Telpak might be a good thing, even for those who
couldn't use it.
Terminal equipment.
The third aspect of interconnect is only partially related to data
transmission. Or, to put it another way, it relates to terminal
equipment of all types, including data. Here we are forced to
consider telephone equipment itself, and what impact it has on the
network when it is purchased by the user rather than provided by the
utility. The telephone network is a curious web of transmission,
signaling, switching, and station equipment; all sorts of things fit
together, and all vintages of hardware. But the local network, and
the equipment at its ends, generates all the traffic. The part of
this traffic that traverses the public toll network or private
channels in the same long-haul transmission systems generates the
profits; the rest tends to be a loss leader, just to get people into
the store.
Business customers, and
PBX customers in particular, generate more traffic per line than do
residential customers or even small business with one or two lines.
The reason for this is obvious: a PBX concentrates traffic from many
extensions to a few CO trunks. A group of 20 trunks, with 5 calls
per hundred hitting busy, runs at better than 65% occupancy, or
about 6 times the occupancy of a residential telephone. Thus, the CO
switch must have more call processing capability to handle this
load, and must avoid building out its switching matrix to handle the
maximum number of lines if matrix blocking is to be avoided.
Because business phones
generate so much traffic, much of it highly profitable long distance
calls, there has been a tendency, for many years, to offer some
kinds of equipment at relatively low rates. Manual switchboards,
even today, are a bargain if you can afford an attendant, and
various investigations and studies have shown that moves, changes
and other services, needed more by businesses than residential
customers have, until recently, been underpriced (Ref. 5). Further,
the marketing and support forces required to handle large business
customers are quite large and expensive.
All this would seem. to
indicate that terminal equipment, whether it is telephone sets,
PBXs, data modems, or whatever was, until recently, provided at
breakeven at best, encouraged mainly because without such equipment,
the profitable part of the business (long distance) would not be
possible. Competitive equipment in this area would appear to offer
the telephone industry a chance to generate the same long distance
profits while relieving it of the obligation and capital
requirements needed to provide service. Indeed, I have never seen
the telephone industry lament the loss of PROFITS to interconnected
terminal equipment... only REVENUES. I may be old-fashioned, but in
my book, profits, if any, consist of revenues minus expenses. If the
competing vendors can make a profit in what is obviously marginal
for the utility, and the utility can continue to make a profit on
long distance, everybody would appear to benefit and nobody would
lose.
Arguments in wrong
places. But this shows the basic problem. Because computers
needed to talk to each other, modems, at their best from non-telco
suppliers, suggested that outside suppliers could also provide
transmission facilities. The "specialized" common carriers were thus
invented, using equipment concepts a generation behind the times.
When they, of necessity, left data to the utilities and took up
cream-skimming with voice circuits, the threat was dismissed by the
FCC and others (well,
did anybody think the final report on Docket 20003 and continuing
rhetoric would say "sorry, folks, we made a mistake. Let's put it
all back the way it was?"). But the telephone industry, seeing a
genuine threat in long haul transmission, immediately assured the
world that this same threat applied to the invasion of terminal
equipment. Three separate aspects to the problem—each generating
arguments used improperly elsewhere to confuse the issue, the
public, and even the participants.
Innovation and the telephone business
So how about the
innovation issue? Has interconnect brought great innovation to
telephony? Yes and no. In some areas such as data modems, facsimile
(Ref. 6), telephone answering machines and repertory dialers, new
products have actually come forth. And, particularly with modems,
fax and answering machines, the outside suppliers seem to be doing a
better job than the telephone industry. The Touch-A-Matic, however,
is a lot more satisfactory than any interconnected repertory dialer
I have had occasion to try, although its cost is high.
As for telephone sets on
sale at local grocery, drug and department stores, they may save the
user a small amount as long as they don't need repair, but lack of
repair alone can make them a real threat in the long run. If my TV
breaks down and I don't get it fixed, nobody suffers but me. But if
my telephone breaks down, everybody who might want to call me is put
at a disadvantage.
With regard to PBXs,
there are only two, so far as I am aware, Danray and Womack, that
came on the market equipped for Automatic Route Selection and
Station Message Detail Recording. All the rest, up to about 1978,
simply copied the worst of the Series 300 and other "flash and
feature code" ideas of the telephone industry. Many of them could
not switch tie-trunks, particularly on a 4-wire basis, few had given
the user interface any consideration whatsoever, and the fancy
consoles, such a potent selling point, had to undergo considerable
evolution before they even approached satisfactory operation.
All this was
predictable. At the IEEE's International Switching Symposium at
Cambridge, Mass., in 1972, I asked a speaker why he had chosen the
features offered on his new PBX. He was totally surprised, and
indicated that the features were easy to do and everybody was doing
them. The chairman of the session, however, took me to task before
the whole group. "We are engineers," he said. "We just do what we
are told." It seemed to me then, as now, that the standard Nuremberg
defense is not the best way to advance the art, but others disagree.
Gee-whiz authors praise the designers of new systems for using
transistors and computers, considering hardware selection rather
than user service to be the measure of innovation.
Most such Gee-whiz
authors never noticed that electronics is expensive. Simply by
removing the tried and true dial from a 500 type telephone set and
replacing it with a DTMF pad DOUBLES the cost of the instrument.
This a clear indication of how the learning curve of a new process
may not intersect that of an older process, as mentioned earlier.
The dial is about 80 years old, and the improvements of many
generations of very clever people, both in the dial itself and in
its manufacture and maintenance, make it hard to beat by
Johnny-come-lately technologies. The same can be said for the ringer
that alerts the user to an incoming call. As for the rest of the
telephone set, we have more problems.
As I have discussed in
Chapter 5, it was designed for residential service and, because of a
number of factors that optimize it there, it is totally unsuited for
use on an electronic PBX. It can be made to work, and for a utility
where only a small proportion of phones are served by electronic
PBXs, the effort required is paid back by overall management
simplicity, stockpiling, training, etc. For a company making only
PBXs, however, it makes little sense to use the wrong telephone
exclusively. But with only two or three exceptions, we find the
great PBX innovators giving almost universal acceptance to the
telephone set developed by the Bell System prior to the invention of
electronic switching. Unfortunately, such "innovation," adopted on a
vast scale by many suppliers, may permanently deny the user a truly
modern telephone set, illustrating once again the way completion
often blocks innovation.
In a regulated monopoly,
it is possible to test new systems extensively before inflicting
them on the public. Touch-Tone went through several years of lab
testing followed by two field trials before it was considered ready
(Ref. 7); others, making cheap, "competitive" DTMF receivers for the
interconnect market, are troubled by "talk-offs" and other problems
such as the inability to receive digits in the presence of dial
tone. The present federal regulatory climate in the telephone
industry is quite satisfied to let this reliability issue be
resolved in the freedom of the market place. It is felt that the
customer should not have to pay extra for a system that works well
if a marginally functional system is available at a lower first cost
(Ref. 1). Unfortunately, to make a free choice, an informed customer
is required. Few customers know just what they are trading off.
Rushing into the market
with an untested product as complex as a PBX is not only hard on the
customer, who finds himself financing a field trial (Ref. 8), but it
is sometimes fatal to the manufacturer. I know of one major PBX that
went down the tubes only a few months after its triumphal
introduction for just this reason. But proper testing is difficult.
Even the Bell System has rushed to market, and the 800A took only
three years to go from introduction to manufacture discontinued.
With the coming of competition, a more urgent rush led to the 770.
All things considered,
however, the terminal equipment business has produced a good deal of
innovation, much of it useful, in the last few years. Data and fax
equipment worked well from the start, and PBXs are beginning to deal
with real requirements. After all, the telephone company cannot be
all things to all people, and direct user needs can be better
investigated by specialists, as long as their equipment doesn't
destroy the integrity of the public network.
Unfortunately, the same
cannot be said for the terrestrial "specialized" common carriers. By
skimming the cream on the fat routes, they have lowered toll prices
to certain business customers who happen to want to call the
center-city areas in a number of America's major cities. However,
their transmission quality, even for voice, leaves a great deal to
be desired. When I answer the phone and hear a rush of white noise
masking a tiny, piping human-like sound, I say, clearly and
distinctly, "Please do me the courtesy of calling back on the public
network so I can hear you," and I hang up. People I know who
frequently use the "specialized" common carriers confirm this; they
say that, about half the time, transmission is not satisfactory.
This illustrates a new
and not fully appreciated dimension to cream-skimming. People can
use the "specialized" common carriers whenever they function
properly, taking advantage of their lower rates. But, when the
connection "doesn't talk," the customer can always fall back on the
carrier of last resort, good old Ma Bell. There is a school of
thought at the FCC (Ref. 1) that considers this approach, along with
the use of cheapie equipment, highly desirable.
As for the thin-route
areas, we can expect the more common kind of cream-skimming to hit
them pretty hard, at least if the deregulation of the airlines
during the last year or so is any guide. Under deregulation and the
resulting competition, my own flying costs have gone from 7.8 cents
per mile to 15.3 between Fall, 1978 and Spring, 1980. Further, I can
no longer fly from Philadelphia to Toledo. The Toledo route was
obviously thin, and it got dropped as a result of fat route
competition. Now I have to fly to Detroit, rent a car and drive
down. I understand that, in some places, "commuter" air lines are
filling in on the thin routes, at extra cost and at some extra
hazard to life and limb. But we must subsidize competition, no
matter what it costs.
Conclusions
Innovation in solid
state circuitry has permitted and even encouraged competition in
telecommunications. For those who believe that the introduction of
new hardware at every point except where it is most needed, in the
telephone set itself, is more important than service, one might say
that progress is being made. And, indeed, there is actually some
very real progress taking place in PBXs and other business
equipment. Much of this progress, however, is coming from the Bell
System and those former members of the Bell System, Northern Telecom
and NEC.
In the field of
transmission, continuing retrogress rather than progress is to be
expected. All the terrestrial "specialized" common carriers have
copied Bell microwave without copying Bell overall system
management. Where they provide switching, they often use modern,
4-wire analog switches, perfectly adequate for analog trunks.
However, the overall effect is to provide us with excessive analog
capability in a world rapidly going digital.
The Bell System is
moving on toward digital long haul trunks via fiber optics, but an
analog "specialized" common carrier has already intervened (Ref. 9)
to suggest withholding this benefit from the customer, allegedly
because the "latest" technology is not being used. We have already
had remote utility meter reading, cable TV, domestic satellite
service, workable automobile telephones, etc. etc., delayed or
denied to us so that competition can be protected, if and when it
can ever figure out what to do. But the blocking of the future
digital network may be a price that is more than the poor,
long-suffering rate payer should have to cover.
Consider the
possibilities of digital trunks between digital toll switches, with
Common Channel Interoffice Signaling (CCIS) providing high-speed
control capabilities. As we know from 25 years of Time Assignment
Speech Interpolation (TASI) on submarine cables, a trunk in use on a
voice call is half occupied at best—only one direction of
transmission is used, since people can seldom talk and listen at the
same time. The other side of the connection is completely idle. This
means HALF the trunks in the country are idle in the busiest busy
hour. Now, if these trunks are T-Carrier bit streams, running at
64,000 bits (8000 characters) per second, we have potentially the
biggest "packet" data network in the world just waiting for the
"data explosion." It should not be hard to trick up the No. 4
digital ESS toll switch to "TASI" short data packets down the
reverse sides of its digital voice trunks; one would expect no less
from computer control and CCIS. And if modern digital PBXs could
home directly on the digital No. 4 ESS in its tandem/toll mode, end
to end digital communication would become possible exactly where it
is most needed.
Of course there is no
assurance that the Bell System would do something like this, even if
permitted. My little exercise is simply intended to show how close
we could actually be to the digital future if competition does not
block innovation. But it is highly likely that the politicians,
lawyers and economists, in their passion to inflict competition on
the telephone user, will delight in one more opportunity to block
the dream. How many nightmares they will produce in the process is
anybody's guess.
References
1.
Social Objective and Competition in
Common Carrier Communications: Incompatible or Inseparable? Cornell,
Kelly and Greenhalgh. FCC Working Paper No. 1.
2.
Regulatory and Economic Issues in
Computer Communications. Mathison and Walker. Proceedings of the
IEEE, Nov., 1972.
3.
The Misunderstood Half Billion Dollars
and The Pricing of Telephone Service. Corman. Reprints in pamphlet
form from Telephone Engineer and Management.
4.
Deregulation: Small Shippers See Foggy
Road Ahead. O'Brien. INC, Dec., 1979.
5.
Selective Competition in the Telephone
Industry—An Independent Appraisal Based on Responses to FCC Docket
20003. Stone, Schankerman and Fenton. Report from T + E.
6.
A Short History of Facsimile. Stamps.
Business Communications Review, July-August, 1977.
7.
Application of Touch-Tone Calling in the
Bell System. Benson, Crutchfield and Hopkins. IEEE Transactions,
Part 1, Communications and Electronics, March, 1963.
8.
Switching Data at Tektronix. Paxson.
Business Communications Review, July-August, 1979.
9.
FCC public file on the Northeast
Corridor fiber optics System.
***
At the
end of November, 1980, after some ten months of consideration, the
FCC gave the Bell System the go-ahead for the first segment of the
fiber optics system in the Northeast Corridor, from Washington to
New York. Thus, it appears that the biggest of all digital islands
(I am told that about 600/o of the telephones in the U.S. are within
60 miles of the route) appears to be assured. Further, several other
digital islands are in the advanced planning stage.
Western
Electric will obviously get a long way down the learning curve on a
project of this size. One cannot but hope, however, that Corning
Glass, one of the principal developers of fiber optics, will be
given enough of the business, somewhere along the line, to remain in
the running. Competition that would block the development of fiber
optics to save analog investors is something that we don't really
need; competition in the field of ideas where different groups can
try alternate approaches may pay off handsomely. After all, the Bell
System may have invented the transistor, but it did NOT invent LSI.
My only
concern now is that the entire digital network will be used for
nothing but voice and voice-like communication. But if it exists at
all, we at least have a fighting chance to bask in the digital
future.
EPILOGUE
So here we are in the
1980s, with the learning curves of the new telephone technologies
about to cross those of the old, and the promises of the last 25
years about to come true. The future is opening out before us; if we
can have a digital network that can be accessed digitally by
businesses, and if we can escape the tyranny of the 2-wire 500 type
telephone set, we can move ahead to the "office of the future,"
whatever it turns out to be. I can hardly wait.
In spite of hazards from
all sides, the opportunities in telecommunications are greater than
ever before. The coming decade is going to be even more interesting
than the last ... and it's going to be more fun! We're lucky to have
such a great way to make a living!
Haddonfield, N.J.
February, 1981
[
Top ] [
Table of Contents
] |
