20th Century Model. Build and MAINTAIN a VOICE Network Long Term Planning Backward Compatibility Average pricing concept Geographic franchise. Long Term Planning. 3 - 5 years reaction time for service demand highly mechanized systems to reduce unit cost TIRKS. 40 Years.
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20th Century Model • Build and MAINTAIN a VOICE Network • Long Term Planning • Backward Compatibility • Average pricing concept • Geographic franchise
Long Term Planning • 3 - 5 years reaction time for service demand • highly mechanized systems to reduce unit cost • TIRKS
40 Years • Emphasis on high quality • Long useful life • 2.5% ammortization
Building a “PhoneBox” • Built like Rock of Gibralter • Single Occupant • Single Owner • All common space • External security • All common power • Integrated design
Unfriendly Legal Matters • CarterFone - 1969 • Modified Final Judgement - 1984 • Judge Harold Greene • Telecom Act 1996 • FCC Unbundled Services
What’s in YOUR Wallet? • Open Network Architecture • External Security • Internal Security • Expensive • Unwieldy • Messy, ugly, etc. • Not designed for it.
Unbundled Loop • Spur competition • Congressional Direction • FCC interpretation • Stifled competition • Delayed implementation • DSL
Video vs. Old Model • Short Interval • Reactive delivery • Overlay Networks • Specialized Techs, Tools, Processes • Labor Intensive • Small Base • Double Overhead • TLC Required
New Developments • Rapid technical advances • FCC mandates • New services are needed • Latest delivery vehicle demanded
Bargains Actively Sought • Smart and frugal buyers • Outsmart tariffs • Comparison shoppers • Cancel delivery in favor of a better deal
Video Services Not Profitable • Acute specialization • Low volume • No cross application • Double overhead • Demographics • Situation deteriorating • New capital required
Dark Shadows • The prognosis is grim • Demographics • “Sun City, here we come!” • Retiring Video Specialists not replaced • New Owners are entrepeneurs
Old Model Rx • Get Pro-active • Increase service base • Commit to terrestrial transport • Contract for services over a broad area • 3 - 5 year window
21st Century Model • It’s all IP • Data Centers • Stingers, DSLAM and the DSL Motel • Follows the talent • “Legal” friendly
Vast capacity Superb facilities POWER SECURITY Flexible accomodations Vast array of technical services Vast array of support services APPLICATIONS support services Data Centers
SAC locations Companion cabinets Commercial Power Battery back-up xDSL capable of 20 megabits CLEC “guests” access to all distribution cable pairs all levels of “feeder” services available Stinger/DSLAM
Not a Telephone Co. Buildings not Single Family OSP not ONA or “unbundled” IP, data, voice, video Data Centers designed to serve “guests” Stinger Motels provide “remote co-location” Qwest = Internet
IP video transport Data Centers house TV applications “Pipe” synergies Application expertise Mainstream transport “Future” model No longer “fighting the system New technical elite Video & 21st Cent. Model
Emerging needs, HDTV, Digital Cinema Huge bandwidth Volume discounts Become a major market Great revenue potential Working Partnerships Video Transport Power
VSF 21st Century RX • Embrace the new model • Lead the industry • Drive the standards to include video • Drive the standards to FEATURE video • Build the boxes