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SBC CEO Ed Whitacre

Kevin Werbach posted a chunk of SBC CEO Ed Whitacres recent interview with BusinessWeek.  Read the whole interview — it’s very revealing.  The portion Kevin reacted to was the statement that "there’s going to have to be a mechanism for these people who use these pipes to pay for the portion they’re using".

The incumbents have been sounding alarm bells about this for a while, and the message seems to be taking.  A few days earlier, at ISP-CON, Neustar’s Chris Celeberti told ISP’s "I do not believe we can sustain free peering". 

The assumption these guys are making is that best efforts networks are insufficient to carry voice. Their message is:  "Our data networks suck for voice.  Therefore you need to use our voice networks." Yet every day that capability is improving.  Between the improvements in networks, and the improvements in end point technologies, real progress is being made very quickly. Twelve months ago it was a struggle to use XTEN and Vonage for real business calls.  Skype came along, and that changed.  But still, Skype wasn’t perfect — it has dropouts, and quality is quite low when making calls to the PSTN. DiamondWare’s WiFone improves on Skype. SipPhone’s Gizmo Project is another step forward.  Today, most of my business calls are made using Gizmo Project.  And for home use, since my wife and kids don’t want to strap on a headset to make telephone calls, I’ve installed PhoneGnome.  PhoneGnome’s sound quality is virtually indistinguishable from the PSTN.

So, yeah, Ed, you need a business model that will help you monetize your assets.  It’s not going to be based on discriminating between voice traffic and other kinds of traffic.  That’s too easy to circumvent.  Your business model is going to be based on access and peering.  You need to get used to the idea that in a Voice 2.0 world, the value is in the applications that run on your network, and not the network itself. 

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