What Happened To The USA: AT&T Edition

14 Mar

I normally don’t write opinion pieces like this, but after seeing the recent news this weekend regarding AT&T instituting bandwidth “soft limits” of 150/250GB per month – it made me think of what “innovation” has become in this country. You’re familiar with the history of AT&T (Ma Bell) and the rapid progression of telephony technology in the past century. America (along with AT&T/Western Electric) led the world in innovation in this space and they continue to hold their own against the Asian and Canadian infrastructure providers.

I spent time as an intern at Lucent Technologies (the Bell Labs spinoff from AT&T) in 2000. Prior to that, my mentors there let me spend summers and holidays “shadowing” them from 1997-2000. I’m by no means a telecom “expert”, but I am familiar with the culture that was at Lucent during those days. It was simply amazing and incredible to see the Indian Hill (Naperville/Lisle) campus teeming with thousands of people who were very smart. In the building where I interned at (Indian Hill South, IX-1F-312), there was a “Patent Board”. Every week, that board was filled with new patents emanating not just from IHS, but from IHP (Indian Hill Park), IH Main and the NSC (located across the street in the town of Lisle). The groups were focused in “labs” – testing modifications and enhancements to the legacy 5ESS switch and building a new kind of switch: Packet Switching. You can see much of the work from LU in this space in use today on the Internet; from VOIP telephony (the project’s name to retrofit the 5ESS in a packet world was called 7R/E, from “Revolutionary/Evolutionary”) to changes to the underlying switching systems to handle the growth in wireless use (which you don’t see). Before the dot-com bust, the main competitors were the now-defunct Nortel, a small gaggle of Chinese makers and Motorola; now it’s just Alcatel-Lucent and the Chinese.

While the NJ campuses of Bell Labs still remain, Lucent’s sprawling research facility here in Naperville/Lisle has completely collapsed. Other people smarter than myself have opined as to why this happened and I’m sure you already know. The IHM building (largest building built in the 60’s) is now owned by Navistar. All of the other satellite offices are shuttered and empty. The Wireless Division (located next door to my old stomping grounds at Indian Hill South) is also empty. The news from AT&T this weekend along with driving past the IH campus today gave me the inspiration to write this article: what has happened to the United States and our lead in innovation?

The USA (DARPA) invented the Internet (sorry Al Gore, the credit does not go to you) and for a long time we had (albeit stone age in comparison to the speeds we see today) the best infrastructure in the world – ISP’s were actually focused on proper network management to handle increased customers and the demand for bandwidth that goes along with this growth. Now in 2011, Hong Kong/S. Korea ranks #1 in terms of speeds delivered to customers and reliability. The USA isn’t even in the top 10 rankings anymore with regards to this. What happened?

AT&T’s new pricing scheme where they pull out the “2 and 20%” number (is someone at AT&T a former hedge fund guy?) – saying that 2% of the users consume 20% of our bandwidth is laughable. What they really mean is that 2% of the users are actually using their service to the full potential that it has to offer (notwithstanding those who are running torrents/filesharing) and they are going to institute this new scheme to dissuade others from really beginning to tap into the full potential (Netflix, etc.) instead of going back to the old days where they properly managed their network and made adjustments to meet customer demand and changing trends within the industry. It’s also a sign to come with the ongoing Net Neutrality battle that’s raging within the ISP space; as much as I feel uncomfortable with Google having too much information about us, they stand to be a clear winner if many mainstream ISP’s take AT&T’s lead and start instituting soft and/or hard bandwidth caps – Google is already building out high speed fibre networks in select test cities for providing internet access. Verizon also stands to gain if they can manage to not “follow the dumb leader” (Telcos remind me much of the old adage: monkey see, monkey do) and really take a look at expanding FIOS on a much larger scale.

I am apparently in the minority on AT&T’s network (I don’t stream torrents, etc) – I use a lot of market data and have tunneled links to a couple of hosted machines to distribute the load against applications (and run a small R cluster). While I’m comfortably sitting at a max of 170-195GB per month currently; as time goes on and I really begin to use the full potential of the connection (Netflix, Boxee/XBMC, Pandora) I know that I will hit the cap. Why should this matter to you? Quite simple, if banks implement “reasonable use” limits on your debit card transactions, what would you do?

Instead of innovating and looking to the future growth of the internet (even your mom and pop casual email users are beginning to see the true potential for the Net with Netflix, etc.) AT&T is looking to stifle innovation (and line their pockets with increased sales of Uverse and their own crappy VOIP offerings). As we continue to languish as a nation in the internet league tables, emerging centers of the world are poised to remain at the top in terms of speeds, access and service levels. Like Lucent’s “collapse” it feels as though there is a hole in this nation and it really is saddening – instead of innovating and building our infrastructure back to being the world leader, companies such as AT&T and forcing us to accept mediocrity – in effect what our nation’s telco companies are saying basically “it is what it is” as opposed to doing something about it to get us back to the top of not just the Internet league tables, but position us to remain extremely competitive in this new century.



One Response to “What Happened To The USA: AT&T Edition”

  1. The Analyst March 18, 2011 at 9:54 am #

    Curious how much such myopia is the result of being a public company in the information age where management feels pressure (real and/or imagined) to constantly keep up with the jonses, so to speak.

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