Devil's Advocate: BT strikes out with 21CN

BT's plans for an all-IP communications network are bold but also riddled with challenges and uncertainties, says Martin Brampton.

BT says it is going to build a 21st Century Network (21CN). Not before time, you might say. Still, the direction the company is taking is a bold one. It also leverages the abundant talk about voice over IP (VoIP).

Cynics might wonder if BT is riding the wave of hype that surrounds VoIP. After all, the most dramatic shifts in the economics of telephony have their roots some way in the past. The changes we are seeing now are primarily the culmination of the move to digital transmission and the deployment of fibre-based networks.

The combination of digital signals and optical fibre made long-distance communications far easier and cheaper than previously. And developments in optical equipment have pushed this trend to the point where there is substantial overcapacity in long-distance physical links. For years there has been no technical justification for steep premiums on long-distance telephone calls.

Packet switching has obvious advantages of flexibility over circuit switching, automatically adapting capacity to meet changing needs. But it is harder to manage and it has taken some time for problems at that level to come anywhere near being resolved.

Data communication is no more going to be free than is electricity generated at nuclear power stations. Billing is an issue that will always lurk in the background. It is very likely that per-minute charging will continue to diminish in importance but charges there will always be.

Clearly BT has been aware of all these issues but as the incumbent with far more than half of the fixed-line market, it was always going to juggle its charging structure to maximise revenues not to be the cheapest. That means that alternative services will always erode the fringes of the customer base but revenue maximisation is not achieved through maximising the number of customers.

New proposals from BT certainly involve some dramatic claims. While the basic protocol of IP is fixed, despite various attempts to hijack it for proprietary purposes, the network management layer has a good deal of proprietary content and only limited interoperability. BT believes its purchasing power will enable it to overcome this.

It is probably right in this assumption, given that BT is not merely a large buyer of equipment but the first major operator to consider a wholesale conversion to IP. That combination gives BT enormous market clout. Questions remain, though. Essentially they are about the implementation of a standards process and about the consequences of success for BT.

Vendors are likely to insist that the implementation standards they agree with BT are made available to other operators. The effect will be the introduction of more or less open standards. Without that, BT has far less leverage with the vendors, since they will be looking primarily at follow-on sales for the really juicy profits.

That raises the question of BT's ability to successfully manage a standards process. Standards are never static, as the history of the internet shows. Successful standards grow organically, slowly enough to be stable but fast enough to keep pace with changing demands. There is no precedent for a company like BT to manage such a process at the required level of complexity.

But suppose BT is successful with 21CN. The company will almost certainly achieve a stranglehold on the country's communications infrastructure. Voices claiming that the company should be broken up into its wholesale and retail components will rise in intensity. How the wholesale monopoly will be managed remains an ongoing problem in almost any scenario.

However this works out, the stress on IP is of interest only to technology aficionados. The vast majority of businesses and consumers want to purchase packaged products and services that meet perceived needs in an effective way. Exactly what technology is used to meet those needs is largely a matter of supreme indifference.