Dave Burstein published a piece in his DSL Prime newsletter that I found very interesting, and I asked him if I could republish it here. Since he kindly agreed, there you have it:
Deutsche Telekom is Watching You: What the network designer said
In front of 1,000 people at the BBWF, Wolfgang Schmitz of Deutsche Telecom implied his network was inadequately provisioned and falsely advertised. In particular, he suggested his VDSL network cannot reliably deliver two megabit video streams. That is amazing given that DT is advertising speeds of 16 to 50 megabits. "It doesn't scale," he explained. He wants the Bertelsmans, Burdas and Googles of the world to pay Deutsche Telekom to deliver voice and video to German customers. DT doesn't have cable competition and the regulator may let them get away with it. Mathias Kurth, the very smart and powerful German regulator, discussed the issue when he was at Columbia CITI Friday, but didn't disclose what his policy will be.
Schmitz is building the ultimate "intelligent network" spending hundreds of millions to capture "every session, of every customer, all of the time." His suppliers (mostly Siemens) love him, because they can charge five times as much for "smart" network gear. One explained “it needs a lot of cycles to do all this work.” The complexity leaves DT a year behind the French offering video and they are still debugging the network and Microsoft IPTV.
A complicated network costs more to build and is far harder to maintain. It's virtually a job guarantee for the many engineers running the system. That a different way is possible has been obvious since David Isenberg's seminal "Rise of the Stupid Network" essay in 1997. With more experience, we'll know more about when "smart" or "stupid" is the right choice.
In Paris a few days later, I saw the 21st century alternative to DT's grand edifice. Free has taken nearly three million customers from France Telecom by offering unlimited data, free phone calls to 30 countries, 80 channels of TV, wireless hotspots and more for 30 euro, profitably. Free's success is built on a remarkably simple network that simply adds standard equipment where they have congestion. Xavier Niel has 2 Cisco CRS-1's at the center, which are doing exceptionally well. They handle everything he throws at them and have plenty of reserve capacity.This "stupid network" works well because adding bandwidth is cheap while management is expensive. An almost unbelievably small team of engineers in Paris manage the entire network and even design the DSLAMs and the Freebox. The network does one thing well: deliver packets reliably. That allows voice and video to be simple applications, easy to add inexpensively.
Schmitz was speaking in anger and almost certainly made a mistake. He claims he needs total control to deal with congestion, making sure the priority applications get through. I had just pointed out to him that I have no problems watching a superb quality 1.9 megabit video over the internet on either Verizon or Time Warner Cable, and he's advertising three to ten times their speed. “What was wrong with his new network?” I asked. “Why can't he solve the congestion instead by adding the necessary routers at less than half the cost?”
He didn't expect that question, but it was a fair one. His own people had told me about capacity issues limiting some services. Schmitz responded he had designed the system, and it doesn't have capacity problems. If he doesn't have capacity problems, his statement that independent video was impractical to carry is not accurate. In practice, I'd bet DT actually provisioned enough capacity that a DVD quality video stream does just fine. If so, there will be no reason for the content providers to stop at his tollbooth unless DT degraded their signals. Walt Disney and Move Networks are proving quality video can go "over the top" with a few seconds of buffer and some good software. Schmitz is a world class engineer and I'm just a reporter, but he's having problems thinking differently after decades of success the old way.Cisco and Alcatel are pressing hard for the carriers to buy fancy gear. Free is an existence proof a better way is possible. One of the other CTO panel members spoke with me later and said I was asking the right question.
Copyright 2007 Dave Burstein Volume 7, #34 Issue date 10/23/07
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