I've wanted for some time to have a full post RSS feed, which one might hope would be a simple option, but if it is, its not simple to find. Rather than populate the excerpt with the full post, I've set up an account to route posting notifications, which appear to contain the full post to an EmailRSS gateway which this post is intended to test.

Despite the accolades of luminaries like Rod Drury, Paul Budde and Ernie Newman, the "structural separation" offered by Telecom is little more than disposing of what has become a liability, ULL copper, and getting paid for someone else to solve the ULL puzzle. In their own words:

This Netco would own the physical copper access assets (but not
electronics). It must be able to receive an adequate (regulated) rate of
return in order to provide it with the cash flow necessary to invest to meet
customer demand. It would be prevented from investing upstream and
re-integrating. It could also potentially be protected by regulation from
network bypass if that was considered desirable to allow access cross-
subsidies.
Telecom high level proposal

Very clearly and very explicitly the proposed Netco is in fact a CopperCo. In roading terms, when Telecom was told to allow other suppliers up your drive way, they said fine, we'll just keep the streets. Let's look again in more detail.

1. "Netco would own the physical copper access assets"
   
   That's all, not any fibre assets.
   
   
2. "It would be prevented from investing upstream and
   re-integrating."
   
   A kind suggestion, lest we fall again under monopoly, but of course the monopoly has moved "upstream" and Telecom suggests this new Netco be prevented from investing there. The last thing they would want is a legacy last-mile operator entering competition with them.
   
   
3. "It could also potentially be protected by regulation from
   network bypass if that was considered desirable to allow access cross-
   subsidies."
   
   Now I can't be sure what that means, but I get the feeling its offering the temptation of monopoly to the Netco investors, Telecom, State and Industry among them. None have shown much stomach for competition on their own patches.

Its a smart move, like all of Telecom's, and I can't imagine a greater irony than Telecom funding a greenfields monopoly fibre infrastructure from the proceeds of disposing of an asset thats value is compromised by its age and complexity now that the property of exclusive access has been removed, to those who have tormented it for the last decade.

1. "Peering" is a confusing term
   
   While I agree there are some unfortunate connotations of the word, that are ruthlessly exploited by some, it is globally recognised and dealt with in other countries, New Zealand need not set itself apart from this.
   
   Confusion is best addressed by definition not switching terminology. The chosen alternative, oddly selected by InternetNZ and Telecom, is "Internet Interconnect." "Interconnect" brings its own set of connotations, PT&T PSTN interconnect for example, that are better avoided as they are quite misleading in this context. If Wikipedia is to be believed and "The Internet" is a contraction of "The Internet is a worldwide, publicly accessible network of interconnected computer networks," "Internet Interconnect" expands to "Interconnected Network Interconnection" which is prima facae redundant and illustrates that interconnect is intrinsic to the Internet, not a tack-on the way PSTN "Interconnect" has been with the entry of competitors.
   
   
2. Peering is about "Equals"
   
   Peering not about *being* equals, but *behaving* like equals.
   
   
3. Peering is complex
   
   If we examine the longest operating and largest open peering exchange, WIX, we find 160 odd participants of diverse sizes and skills. If peering was complex, it is unlikely that this number of autonomous networks would participate.
   
   While it is possible to elaborate and complicate even the simplest concepts, look at string compared to macramé, the fundamental of peering, which is the fundamental principle of the Internet is:

   the exchange of traffic between members of different, directly connected, networks.

   As noted here, there are a number of other considerations that some are motivated to mix in, but these don't change the basic meaning.
   
   
4. Peering is about "Circuits"
   
   Historically peering (and most other networking) was implemented with circuits, point to point connections, and for reasons of efficiency and administrative simplicity, there were often pairs of circuits, established by each of the peering networks.
   
   This is before the era of cheap metropolitan switched services like CityLINK's PublicLAN which have allowed multiple connections over a single connection with very high performance at relatively low cost. Plus the circuit model doesn't scale, to provide the connections WIX does to 160 participants would require 25,440 such circuits.
   
   What was once canonical is now historical.
   
   
5. Peering is for Service Providers
   
   Empirically false as demonstrated by this list of registrations for the WIX, note, not all registered autonomous networks currently participate.
   
   The fact that changes in networking technology (the move from circuits to switches), costs of equipment (cheap BGP capable routers) has reduced the cost of entry and meant that customers are now intruding on service provider turf. Like most incumbents, this is regarded with concern.
   
   
6. Peering is about cost saving
   
   Peering has a number of other benefits including performance and resiliency. Peering is often deprecated as less important as transit (global rather than local delivery) costs decline. With recent outages in NZ so topical, the benefit of alternative delivery paths to local services is illustrated.
   
   
7. Peering is about carrying another network's traffic
   
   The argument runs that Network B is carrying Network A's traffic when they peer (and vice versa, but "The Folly Of Peering Ratios" by Bill Norton scotches that debate so I won't address it).
   
   The perspective of this view is completely wrong, Network B is carrying its customer's traffic, which is what it is paid to do. Same for the traffic while it is in Network A, it is traffic their customer has paid to send.
   
   Traffic does not belong to the network, it is the customers'.

In "The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations" I finally read a line I've been pushing for a while about the changes being wrought by cheap high-performance computing and telecommunications (and the associated software). IANAE, but Ronald Coase collected his Nobel Memorial Prize in Economic Sciences from the Bank of Sweden for his work on the nature of the Firm. Essentially, AFAIK, it illustrated that the firm exists to reduce transaction and co-ordination costs. Back in the industrial day, that was by getting larger and forming close-packed command and control structures.

But that advantage is now available at a much smaller scale, down even to the individual, and so the compulsion to cram into a single building in order to ease organisation, despite the costs of such an architecture, is gone. Further, in a rapidly changing environment, the rigidity and inertia of large tightly bound organisations leads to a diseconomy of scale as responsiveness rather than perpetuity is rewarded.

It's still possible to be big, but you will be flat. Stovepiping up the stack from your infrastructure will not be rewarding. The shearing stress of the different rates of change, increasing as you go higher in the stack, will tear you apart. Something Microsoft, newspapers, telcos, and perhaps eventually Google, suffer from. Big infrastructure, as long as it remains just that, will persist, and so no doubt will the temptation to rise into services. Resist that temptation and all is well, fall victim to it and suffer the consequences. The most damaging consequence to an infrastructure provider entering the services market is they have made themselves a competitor of all their customers, which most customers don't like.

While I applaud the "small pieces, loosely joined" model, there is still a sweet spot for the large infrastructure utility, question is, how far down the stack do you need to go to find it?

Check out the book, while it is overly gushy, and ignores a more nuanced investigation of some of the claims, and provides one of the worst analogies for copying I've read outside of the recording industry's propaganda, there is much useful in it.

Large, vertically integrated information organisations are suffering, this book is one illustration and attempt at explanation, for a more oblique example, listen to this and think of Telecom.

Peering is an important, complex subject. There is strong anecdotal evidence emerging that the de-peering that has occurred since 2004 has resulted in additional complexity and inefficiency in New Zealand's Internet and data-exchange capabliities. The Government's view has hitherto been that a preferred approach should be for industry to resolve technical issues without undue intervention. However, in response to strong feedback from the sector, I have asked officials to further investigate this issue, with a focus on the national interest of having efficient and robust Internet services within New Zealand.

Hon. David Cunliffe, Minister of Communications, 2007

1. Peering is not complex, otherwise lots of small and medium sized businesses wouldn't be doing it. Arguably the transit pricing of Telcos probably acts as an incentive, but peering is the simplest most straightforward solution to the fact not everyone is connected to a single network. It is simpler for customers as they aren't trying to levy monopoly rents and so for Telco's peering is complex, Telco's are complex.
2. The technical issues are long resolved, peering has been operating for the willing for years, what remains are personality problems in telco culture, the hubris that they are so good they deserve to be paid twice; once by their customer and again by someone else's customer.

There is an argument that holds separation of services revenues from network operation will result in a decline in investment in the latter. I am not an Economist, but what is unseen in this analysis, IMHO, is the declining return services are providing. The network monopoly is being monotonously and inevitably erased by improved technology, and legacy returns from vertically integrated telcos, despite the "Triple (or Quad) Play" new clothes for the Emperor, are declining.

The two businesses are now starkly different and need to be performed by different organisations. Network infrastructure is near guaranteed utility, services are now competitive and too diverse for a single organisation to efficiently supply. Telecommunications isn't just voice anymore, not just a voltage in a wire.

But thought is a very inertial thing, despite its intangibility. For an example of how poorly a new paradigm can be percieved by incumbent models, look at this.

An interview by Telco 2.0, a group of consultants who believe the "conglomerate vertically integrated telcos" can be reinvented to thrive in the new environment, of Malcolm Matson from OpenPlanet who believes in a fundamentally different way of building access networks: Open Local Access Networks (OPLANs).

The degree of disbelief that things could be different is epitomised by this question from T2:

"If you're a monopoly provider, won't you capture monopoly rents?"

For the interviewer its inconceivable that one does not imply the other...

Fortunately Telecom has seen the future and made a choice rather than continue to straddle the divergent businesses telecommunications is splitting into, to focus on the services layer and divest entirely the network infrastructure operation.

On the network infrastructure, OPLAN, side, WCC is also taking an appropriate step, a belated one after the very precocious CityLink initiative in 1996, but they appear to have recovered their footing and are now moving on and into accepting their responsibility for transport infrastructure of all kinds, the world has moved on from roads, drains, and power lines and the WCC is about to lead.

Two different businesses, two models of investment, one long term and practically risk free, the other of an ever shortening cycle with much greater risk and concommitant reward. Looking around the overheated investment climate, where is the shortage that would avoid reliability in a world of risk?

Interesting perspective from Mary Wong of Franklin Pierce Law Center discussing the growing discourse around such topics as “the commons,” “free culture,” and “open content.”

Essentially shes drawing a resonance between Human Rights "Law" and "Copy Rights" The reason is to advocate User rights that balance the growing extent and duration of proprietary rights producers are being granted, for the benefit of "The Author."

Please forgive all the caps and quotes, but there are a lot of questions about "The Author," particularly in a world where nothing is truly original.

The producer's right, particularly the French concept of Auteur (?) rights, has always been sheeted home to inviolable human right of possession of work, however for cultural products, there has been a failure to include the audience in the deal and while the audience was critical it was excluded. Back in the day when the audience had no capability for commentary and critique it wasn't a big right to cede, but that day has gone. The audience is going to participate, and "The Author" had better get used to it, and Governments need to start working on frameworks that support both the performer and the audience.

In granting a human right, one must assure all humans benefit from it. In granting exclusive rights, this is clearly problematic.