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A Copyright Masquerade: how corporate lobbying threatens online freedoms

Part 1 Internet, entertainment & copyright;  Part 2  The American influence: ACTA & Ley Sinde (Spain);  Part 3 The Politics of music: Digital Economy Act (Britain)

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Survey of World Telecommunications (41): Leaping the barriers - Value-added services
By MONICA HORTEN
1034 words
7 October 1991
Financial Times
London Page XX
English
(c) 1991 The Financial Times Limited. All rights reserved

MANAGERS OF international data networks have battled for years with the administrative nightmare of dealing with several different telephone network operators (PTTs). They get forms and bills in several languages and currencies, and the difficulty of matching delivery times for service on a line between two or more countries causes many a headache.

 
According to Mr Stuart McLean, chief operating officer of Barclays Network Services, what they want is an improved service from the carriers which takes away the administrative burden. The ideal would be a one-stop shopping service, where a single operator would carry a company's cross-border data traffic and provide connections to local offices.

Mr McLean also believes that a single bill should be provided in one currency, and that there should be one point of contact to report network faults. 'Some routes today consist of 11 carriers. I want to deal only with one,' he says.

In response to similar demands from large multi-national organisations worldwide, several companies, including PTTs, are setting up one-stop shopping services. However, there are some firmly entrenched barriers in the telecommunications regulations of most countries, which make it hard to get such a new concept off the ground.

Even under the most liberal telecoms regimes such as the UK, the regulations permit third parties only to offer services if they add value to the basic line provision. In other words, they must do something extra to the data, not just transfer it from point to point.

The traditional value-added network operators such as GE Information Services, the IBM Information Network or BT Tymnet, have based their business on transporting specific types of computer data, such as IBM's systems network architecture. They are also trying to build up a business in inter-company electronic messaging, especially electronic data interchange, which is designated as the future standard for basic trading documents such as orders and invoices.

A newer concept is 'bandwidth broking', where the value added supplier will sell network capacity - the bandwidth - and will manage the traffic flow. This network management is sufficient to count as 'value-added' and get around most regulators.

The leading bandwidth broker is Infonet, founded by the US-based Computer Sciences Corporation, and now owned by a consortium of PTTs. But the next 12 months will see the setting up of several more bandwidth broking services.

AT&T, the US telecommunications company, has been quietly building a Europe-wide network; it now has nodes in seven countries and four customers signed up. Its rival long-distance operator, US Sprint, this year won a contract to provide pan-European data services for Unilever, the household goods manufacturer. And one of the smaller US players, World Communications (World Com), a subsidiary of Swiss firm Tele Columbus, has also just taken its first steps into Europe, offering a transatlantic managed service.

There is a view that bandwidth broking will become a substantial business, and that it will evolve to encompass all aspects of network design and provision.

The third US long-distance operator, MCI, launched its global communications services at the beginning of this year. MCI will design and put together a network to any country and manage the services that run over it. It will handle all the network management and trouble shooting, while the customer receives one bill for everything.

A further development will be virtual data networks, where sophisticated data facilities are provided on dial-up public lines. The research organisation Yankee Group believes that companies will initially try the virtual network concept with their voice telephone services but in the next year or so, they will begin to use them for data as well.

If that is so, private leased lines could become a thing of the past. 'If I look ahead five years, private lines as we know them today will be here but they won't be leading edge technology,' says Mr Eldon Blust, a MCI director.

It is possible that hybrid networks will evolve. Private lines will be used for a company's most sensitive data, or on routes where very high volumes of traffic are regularly transmitted. But the rest of their data communications traffic may be entrusted to a value-added 'bandwidth broker' or the company may sign up for a virtual service.

Companies with very large private networks will tend to be cautious.

What these customers look for is competitive pricing and high service levels. They also watch for any discrepancies between promise and practice. On the transport networks there can be considerable differences in time taken for the network to respond to a terminal. It may be very fast if only one terminal goes on line, but considerably slower if a group of terminals are logged on.

Very often too, the network operators will say they can offer service in certain places, on the assumption that if they win the contract, they will put a node in there.

As more competition arrives, they are being forced to respond to customers. The most common request today is for 'bandwidth on demand' - network capacity made available in whatever quantities the customer needs, at any time that it may be needed.

One of the attractions of a value-added or managed service is that expensive dedicated lines do not lie idle for 364 days a year, just so that the company has enough capacity to handle a surge in traffic on the remaining day. They expect that if they sign up to a third party or vitual network service, they will have the lines when they need them, and not have to pay for them, when they do not.

An extension of this concept is a user-defined network. According to Mr McLean, this is where a customer can specify regular time slots when extra capacity will be needed: 'A facility you might ask for is that every Tuesday and Thursday at midnight you need a 2 Megabits a second line between A and B. A user-defined network gives you the opportunity to go in from a console and ask for those 2 Megabits.'

Iptegrity.com is the website of Dr Monica Horten,  policy writer and Visiting Fellow at the London School of Economics & Political Science. She is an independent expert on the Council of Europe Committee on Cross-border flow of Internet traffic and Internet freedom (MSI-INT). She was shortlisted for The Guardian Open Internet Poll 2012. Iptegrity  offers expert insights into Internet policy. Iptegrity is read by lawyers, academics, policy-makers and citizens, and cited in the media. Please acknowledge Iptegrity when you cite or link.  For more, see IP politics with integrity

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