There is, in most respects, not much room for the little guy. Still, many companies attempt to eke out a living by raising capital and earning free cash flow on the basis of moving the needle down a couple of stairs in the telecom industry’s giant race to the bottom. Frankly speaking, as consumers, we need these guys … they create the price pressure that leads to market pressure that forces the cabal to lower their prices. Without them we’d all still be paying $1/minute to call one or two counties over. But rarely (and I suspect Bernie Ebbers would verify this) do they ever make any real money over the long-term.

Because of my history as one of Cisco’s early Packet Telephony product managers, and having architected and helped to launch a few different services including BuzMe and RingCentral, I see a lot of VoIP deals. I’ve taken to referring to many of them as “stupid phone tricks” (in a nod to Letterman) which are clearly designed to take advantage of some gap in arbitrage within the telecom industry.

Unfortunately, this has been the model of telecom “innovation” for many, many years. The first Cowboys in the telecom game were of course the CallBack kids. They allowed you to make calls from Brazil to the USA, for example, paying the long-distance rate for calling from the USA to Brazil instead of the other way around by “ringing both ends” of the call after you first dialed their local or toll-free number to instantiate the call. This significant inconvenience was trumped by the massive savings incurred for folks living in Brazil calling to their USA-resident relatives.

With long-distance deregulation came the rise of prepaid calling card services, which did something similar. Again you traded the convenience of just simply dialing the person you wanted to call for having to call a pilot number, entering a complex string of unmemorable digits, and THEN entering the number you wanted to call in order to save a little dough. The services made money, though, because you and I would usually lose our cards or forget our numbers before we fully expended the value in the cards. This model is called “breakage”. To my utter disappointment this represented the larger part of the market I was dealing with while at Cisco.

More than 8 years ago I recall being asked by my boss, Alistair Woodman, to write an opportunity evaluation of the recently-ratified SIP protocol. My response, over the course of weeks of researching and talking to everyone involved, was a breathless vision espousing nothing short of a complete re-think of the entire Telecom industry. SIP has some epic flaws and paradoxes, like its assumption that we’d all be on IPv6 by 2001, and its paradoxical empowerment of edge devices while making no accommodations for firewall/NAT traversal or P2P.

But it was a pretty good stab at unhanding control of telecom from the cabal and placing it in the hands of scrappy innovators. And as the VON shows once attested, there are some pretty feisty and intelligent people lurking within the telecom business. For a time I hoped to have been one of the more noteworthy ones.

With the benefit of hindsight we now know that SIP just hasn’t panned out (certainly not in the way I had hoped it would). It’s become just another signaling protocol in the transport of fairly uninteresting voice calls within the existing structure of telecom. Let me repeat that in another way: The incumbents took a protocol which was conceived and designed to blow them out of the water, and used it to cost-optimize their networks. As a protocol, SIP is incredibly successful in having propagated in Telecom in the less than 7 years it’s been deployable, but I suspect its effects on the industry would today leave its creators a bit cold.

My breathless assertions that thanks to SIP the web geeks would take over Telecom — first derived in 1997 and held by me until at least 2002 — have never even come close to fruition. SIP, because it unbundles signaling from the calling path and especially because it allows for rich metadata to travel through the network with SIP messages, is rife with potential for adding value — but no one, not even Skype (which uses a protocol clearly inspired by SIP but which fixes a lot of its problems) has deployed it in a way that takes complete advantage of this to stimulate innovation.

A few weeks ago I wrote about Cubic Telecom. There’s a small amount of real innovation there, but it largely falls into my “Stupid Phone Tricks” category. It might or might not save you a lot of money making and receiving long-distance calls while you roam on your mobile phone, but does nothing to abate the greater crime that is mobile roaming charges. After I wrote about Cubic, David Pogue of the NY Times was attracted into their orbit, but got burned when others realized Cubic’s rates weren’t quite so attractive as they’d said they were. Controversy erupted and their launch marketing was irreversibly damaged (see here also) by the Streisand Effect of their attempts to correct and adjust perception.

A Googling of “telecom innovation” yields 10,700+ hits but, sadly, no real innovation. What you will read, instead, are examples of creative cost-optimization (Voice Mail was really a way to eliminate the answering machine at home, and the receptionist at the office). You’ll also see some incredibly creative and extravagant attempts to defeat the inconvenience associated with the CallBack model. Cool, but not fundamentally enabling.

What Cubic is presently caught up in is the fact that their dubious cost savings are hampered by the fact that calling mobile phones, for example, in Europe is always going to be expensive and hugely differentiated in terms of pricing from calling land lines in Europe. The rise of draconian mobile pricing models combined with the steep decline in global long-distance calling rates results in a more and more limited opportunity to cost-optimize and more and more pitfalls for the consumer. Unfortunately, Cubic’s a great example of how this happens and how it can bite one in the ass.

There are a number of artificial bottoms in the telecom industry. Long-Distance was the first and most obvious of these: when there was sufficient market pressure from a few successful VoIP guys (and other telco competitors) to reduce costs, the incumbents simply did so. Why? Their costs to provide long distance were arbitrary. Their only consideration was how much margin they could take without losing customers.

There are a couple of false bottoms in mobile at the moment (who am I kidding, there are half a dozen) including roaming, long-distance, and SMS. SMS is a great modern example of this and here’s why:

The cost for a mobile network to transact an SMS message are incalculably small — on par with your ISP handling an email message. Yet it’s become an enormous cash cow for the mobile phone industry — imagine if your ISP charged you a penny for every email sent or received. A small number of companies such as hotxt (now trutap) rose to try and take a notch out of the carriers on this front, but were ultimately thwarted by the fact that they have to take pot shots at the carriers from within their own ecosystem.

It’s not that easy to attack the SMS business model by requiring users to instead install an app and send and receive messages over wireless data, which is also ridiculously expensive.  It’s kind of like borrowing from Peter to pay Paul, and in any case I’m not sure what it accomplishes for the third-party service.  Not fun. And not particularly innovative.

There is encroachment now, by mobile telecom into terrestrial telecom, and subsequently by platforms like the iPhone and OpenMoko and the rumored GPhone. I guess this means there’s some hope for change. But all of them appear to be embracing the traditional approach to telecom and stepping up to milk the cow in collusion with the big carriers. And this, friends, is a shame. Because innovation will only be barely perceptible if we continue to allow Telecom Monopolists to write the rulebook.

-Ian.

It’s definitely a secondary phone service, as when you instantiate calls it actually signals their VoIP-based call back service to “ring both ends”. Yes, it’s a CallBack service. The result is a fairly long wait time (20-30 seconds) to connect calls. But the savings when you roam across continents or even in the next country over are profound. The fact that it operates on a pre-paid, non-subscription model helps you cost-justify it as a secondary phone.

I’ll skip the phone, thanks, but I plan to use it, but only for incoming calls, when I travel to the U.S. as an alternative to a prepaid plan with the evil AT&T. It also does SMS at reasonable rates but, as yet, not data. So I’ll still be extorted for using my BlackBerry and iPhone on the road.

Feature request: One major issue with using a secondary phone is that when you make outgoing calls, nobody knows it’s you. My calls are far more likely to be avoided by my board members and business contacts because they don’t know the number. Problematically I don’t want to give them that number and add it to my swelling list of phone numbers because it adds complexity and creates a potential dead-end: my MaxRoam number, unlike my mobile phone number, is not mine… and I can’t take it with me.

To resolve this, and much of this depends on the quality of the termination networks and the strength of their relationships with these termination partners, MaxRoam could ask me which phone number I want to identify myself as when instantiating outbound calls via their web site. They could then rewrite the outbound dialing number on their terminating gateways for the leg of the call destined to whomever I’m calling so that it appears as it should on their phone and my name, etc. pops up.

Of course, there are others among us who might enjoy that anonymity. >:)

A problem for MaxRoam in the short term is that all this fiddling, plus the extra call wait times (75% of calls are incomplete, so 25-30 seconds just to get a busy signal or somebody’s voice mail will get frustrating), is not for the faint-hearted consumer market. I anticipate that they will develop a rabid audience of tens of thousands of global roamers who absolutely love their service, but until big strides are made in the usability model it’ll be difficult to break through to the broader market and really kick the snot out of the mobile carriers.

Their greater effect may be to sensitize the mobile phone consumer market further to the gouging that occurs between carriers for roaming, and the utter fleecing which carriers subject their customers to for Long-Distance. Given the myriad benefits in reducing operating cost for VoIP, and given that VoIP has been widely deployed in mobile phone networks for more than 5 years, it is positively criminal that they want me to pay $2/min. to call Brussels from my mobile phone while I’m at home.

I’m worried that, like Vonage, companies like Cubic will invest significant dollars to champion the charge to fairer pricing in mobile telecom, only to get smote by the carriers as they finally cave under consumer, media, political, and market pressures and adjust their margins accordingly.

November 28, 2002 Mr. Watson, Come Here, You Look a Little Blurry By DAVID POGUE

A MAN in New York makes a phone call. But instead of just holding a handset to his head, he watches a small screen on the phone. He and his wife, in Florida, see each other as they chat, thanks to a tiny camera on each phone. They don’t only talk. They interact by gesturing and expressing themselves just as they would in person. They have arrived in the future: 1964.

It was the 1964 World’s Fair, to be precise, the first public demonstration of the AT&T Picturephone. The idea of adding video to the telephone seemed so obvious, plenty of people were certain it would replace the telephone.

A few niche variations eventually arose, like expensive corporate teleconferencing gear and Internet cams that use PC’s as intermediaries. But even after four decades, no videophone for household use over ordinary phone lines has caught on.

The new Vialta Beamer (www.vialta.com) at least stands a chance, because of three shrewd decisions by its creators. First, they realized that we already have telephones with features and looks we like. Therefore, the Beamer adds only the screen: a handsome, 3.5-inch flat panel that floats in a clear acrylic panel. The Beamer screen is dark and easily ignored whenever you’re not calling a fellow Beamer owner. Your phone remains your phone.

The second breakthrough is the Beamer’s simplicity. It goes between your phone and the wall jack, like an answering machine. (If you have an answering machine too, the Beamer goes between it and the phone.) There are no fees, accounts, activation steps or special numbers to dial. If you need one more thing to be grateful for on Thanksgiving, here’s one: that someone, somewhere is still capable of designing a high-tech appliance no more challenging than a blender.

The third inspiration is the price: $300, or $500 for a two-pack. (Vialta is willing to ship each of the pair to a different address.) That’s not exactly cheap, but it’s less than half the price of any previous videophone and well under one-quarter the price of corporate models.

After dialing a number the regular way, you punch a button on the side of the Beamer screen. A message at the other end tells your partner (co-host? viewing audience?) to push the same button to start the video. If the callee would rather not be seen right now, having just stepped out of a bed, bath or bar brawl, he or she can decline. In that case, the call proceeds videolessly.

Now a recorded voice says, “Making the video connection,” the audio drops out for 15 seconds, and a progress bar shows you how much longer you both have to wait. Then, suddenly, you see each other, loud and clear (or the videophone equivalent thereof).

You see yourself in an inset picture at the lower-right corner of the screen. You can switch it off, but it’s useful for checking your own lighting; if the light is behind you, you’re silhouetted like an anonymous whistle-blower on “60 Minutes.” If the light is in front of you, though, color and detail are pretty good – not nearly as sharp as television, but not nearly as awful as most Web broadcasts.

This lower-right video image of your own transmission is also a good reality check; there’s nothing worse than paying $500 for a pair of videophones, making an important 45-minute call to your dearest love, and then finding out you had spinach between your teeth.

Once the call is under way, though, you find out one big reason videophones aren’t yet ubiquitous: ordinary phone lines are just not “fat” enough to carry much more data than our relatively puny voices. Trying to fit a complete video and audio signal into such a narrow pipe is like trying to cook a turkey in a toaster.

A great deal of deterioration results: in the video quality, the audio quality and your expectations. The video is either very jerky or very blurry. (A control on the side of the Beamer lets you adjust the picture to suit your deterioration preference: smoother-but-blurrier or jerkier-but-sharper.) Any static on the line blows your loved one’s face into pixellated smithereens that take several seconds to reconstitute. You wind up doing an unintended impersonation of Verizon’s “Can you hear me now?” guy on TV: “Can you see me now? Can you see me now?”

Worse, you have two delays to contend with. The other person’s voice arrives about one second late, the video a couple of seconds after that. When compounded by your own transmission delays, the result is a crazy, out-of-sync version of dueling Max Headrooms. This is not the device for stand-up comedians hoping to rehearse their timing for the folks back home.

Vialta says that the quality varies by call and depends on the wiring – and that, surprisingly, overseas calls often offer better quality because newer wires are being used. (Alas, I couldn’t test this claim, as I know very few people overseas who have Beamers.) Vialta acknowledges, though, that although the Beamer’s compression technology is state of the art (it’s known as H.324, which is also compatible with some non-Beamer videophones), sending TV-quality video over ordinary phone lines is still a technological impossibility.

It’s not a total loss: as with cellphone calls and overseas calls, you find yourself willing to accept some loss of quality in exchange for the sheer magic of communicating in such amazing ways. Seeing the faces, expressions and kitchens of your callers is, after all, a powerful thing; you feel excited to have lived long enough to see the future. Nobody complained about the sound quality when they called the first man in space, did they?

But video and audio static aren’t the only videophone obstacles; camera-shyness is another. The human “don’t look at me” gene can be a powerful motivator. Ask anyone who doesn’t like to be photographed how they’d like to be on camera during every phone call.

Then there’s the privacy issue, which isn’t quite the same thing. The beauty of the ordinary telephone is that you can doodle, clean your office or even fix dinner while you’re chatting, without the caller suspecting that you’re not providing your undivided attention. (Well, usually.) That’s an unspoken but significant component of the phone-call experience, one that most people would find hard to give up.

The Beamer does have a privacy mode. One touch on a button freezes the transmitted frame, in effect plastering your caller’s screen with a still photo of you. This is your opportunity to blow your nose or perform other grooming acts undetected. (A second press restores the live video feed.) So yes, you can have privacy whenever you want it – but of course, your caller also knows that you’re up to something, which opens a whole new chapter in Pandora’s Book of High-Tech Etiquette.

The carefully designed Beamer’s price, simplicity and compatibility with any old telephone are welcome videophone advancements. Even so, the delay-prone, video-staticky Beamer isn’t a very good communications device, which could be considered a drawback in a videophone. It’s unlikely that many people will be making video calls to home a few Thanksgivings from now.

But when distance separates you from someone you love, even a jerky video call can unleash a rush of emotions, a sense of contact, that ordinary phone calls can’t. (For proof, watch the weepy “We’ve got videotapes from your family back home” episode of each season’s “Survivor.”)

The Beamer, glitches and all, might be welcome in the home of a faraway grandparent, spouse or anyone else you care about to the tune of $500. Soon enough, the ordinary phone call will be only the third-best thing to being there.

———–

During the concert that I went to (in 1999, in fact) he explained that he had re-arranged a bunch of new songs while riding in the bus from Calgary to Vancouver and that they were going to play those new arrangements for the first time at the show.

Pretty amazing.

-Ian.

——- http://www.nytimes.com/2002/03/04/business/04PATE.html?pagewanted=print

March 4, 2002 Crooner Uses Computers to Replace Sheet Music By TERESA RIORDAN

Harry Connick Jr. is a versatile guy: crooner, composer, big-band leader, piano player, actor, comedian. And an inventor, as well.

Mr. Connick, who has been described by one critic as a new and improved version of Sinatra, recently received United States patent 6,348,648 for a “system and method for coordinating music display among players in an orchestra.”

“It basically eliminates old-fashioned sheet music,” Mr. Connick said in a phone interview 10 days ago, before leaving for Salt Lake City, where he performed “Over the Rainbow” during the closing ceremonies of the Olympics.

His patented idea came to him one day several years ago when his big band was playing outdoors and the sheet music was blowing around. Why not, he thought, have all 16 band members read their music off computer screens instead?

So before he started a long tour in 1999, Mr. Connick bought enough blue and white G3 Power Macs, each with a rotatable screen, that everyone ‹ from his trombonists to his drummer ‹ could read from electronic sheet music.

For technical advice, he turned to his neighbor David Pogue, who is a former Broadway conductor and a computer guru to the stars, whose clients have included Stephen Sondheim and Mia Farrow. (Mr. Pogue, who also writes the State of the Art column for the weekly Circuits section of this newspaper, has no commercial ties to Mr. Connick’s invention.)

“A lot of the guys I knew from my pit work on Broadway said that it would never work,” Mr. Pogue recalled. “They said the computer would crash or the screen wouldn’t refresh itself in time for a professional situation.”

In fact, Mr. Pogue said, the technology had progressed far enough that the electronic page could be turned faster and more reliably than a paper page.

At first, Mr. Pogue said, the members of Mr. Connick’s band were skeptical. “They circled it and sniffed it the first day,” he said. “But by the time they opened the tour they were really into it.”

Mr. Connick started the digital- score tour in a relatively low-stakes locale ‹ Ames, Iowa ‹ so that any kinks could be worked out beyond publicity’s glare.

Unlike most other pop musicians, Mr. Connick does his own musical arrangements right on his Macintosh computer, using Finale software from Coda Music Technology, a division of Net4Music (news/quote). His system allows him to make changes to a given arrangement ‹ knock out eight bars here, add eight bars there ‹ and have them entered automatically into his musicians’ copies of the music.

“Oh man, it’s made my life easier,” Mr. Connick said. “Before, I would write out a song by hand and give it to a couple of guys in the band who are copyists and they would figure out the instrumental sections. It could take days. Now I can write a new score in the morning and everyone has it on his computer screen in the afternoon. Imagine if a Duke Ellington or a Stravinsky had had a system like that.”

The system has had some unforeseen benefits, as well. In studio recordings, for example, it’s no longer necessary to digitally remove the page-turning rustling in the background. Moreover, musicians can insert page breaks wherever they want.

And doing away with sheet music also means doing away with music lights for the musicians. So when the lights dim and Mr. Connick begins to sing, Mr. Pogue said, all the audience sees of the other musicians is “this super-cool bluish glow on their faces from the computer screens.”

Mr. Connick’s patent covers more territory than electronic sheet music. He hopes that eventually the computers will have their own operating system and feature a touch screen that allows a composer to write music as he would on paper.

But he makes it clear that he is a concept man.

“I can do stuff like put RAM in a computer, but I’m not a programmer,” he said. “You start talking about the technology involved in making it, and I’m going to be completely lost. I don’t have any interest in actually building it. I just want someone to send me one in the mail when it’s done.”

In fact, Mr. Connick approached Apple Computer (news/quote) about helping him develop the system.

“I love their products and I thought for sure they would go for it,” he said. “They put up a lot of `Think Different’ posters and I sure think different. But they weren’t interested.”

On the day his patent was issued, Mr. Connick said, his wife, Jill Goodacre, a former Victoria’s Secret model, asked him if he was proud of himself.

“I said not really,” Mr. Connick recalled. “It’s not like I invented Velcro or anything.”