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PacificTelecommunicationsCouncilFifteenthAnnualConference
i)0
Proceedings
Edited by
James G. Savage and Dan J. Wedemeyer
January 17-20,1993
Sheraton Waikiki Hotel v Honolulu, Hawaii
Table of Contents
Session Summaries
Index
Discussion Group Papers
Session 1.1.1 to 2.3.8
SESSION 3.1.1 TO 4.4.1
PERMISSION TO REPRODUCE THISMATERIAL HAS BEEN GRANTED BY
Ilarber
TO THE EDUCATIONAL RESOURCESINFORMATION CENTER (MCI
litnortherntelecom
BEST COPY AVAILABLE
Volume I
PacificTelecommunicationsCouncilFifteenthAnnualConference
Edited by
James G. Savage and Dan J. Wedemeyer
January 17-20, 1993
Sheraton Waikiki Hotel Honolulu, Hawaii
Proceedings
Table of Contents
Session Summaries
Index
Discussion Group Papers
Session 1 1 . 1 to 2 3 8
© Copyright, Pacific Telecommunications Council, 1993
ISBN 1-880672-04-9
Published by
Pacific Telecomunications Council
2454 South Beretania Street, Suite 302
Honolulu, Hawaii 96826 USA
Intnortherntelecom
Printing sponsored by Northern Telecom
ii
PTC's 15th Annual Conference
CONFERENCE COMMITTEE CONFERENCE STAFF AND ASSISTANTS
ChairJane N. Hurd, Telephony International
Vice ChairsL. Dooley, OTC AustraliaHideo Kato, Fujitsu, Ltd.Robert M. Walp, General Communications Inc.
Committee MembersPhilip J. Bossert, Strategic Information Solutions, Inc.F. Barry Brown, University of SaskatchewanGeorge Darby, Law Offices of George E. DarbyKlaus Gueldenpfennig, REDCOM Laboratories, Inc.Robert B. Harmon, Bell Atlantic InternationalL.S. Harms, University of HawaiiEiji Hayashi, NEC CorporationJames W. Johnson, Jr., INTELSATMeheroo Jussawalla, East-West CenterYasuhiko Kawasumi, Kokusai Denshin Denwa Co.,
Ltd. (KDD)Wally Kozar, Dept of CommunicationsRaynald Leconte, France TelecomJohn L. MacDuffie, AT&T Hong Kong Ltd.Ron Parsons, Digital Equipment Corp.Eitel M. Rizzoni, International ConsultantKarl K. Rossiter, Television New Zealand, Ltd.Jose Salazar-Ilarregui, Digisat, S.A.T.M. Seddon, Asia Satellite Telecommunications Co.
Ltd.Diana M. Sharpe, Sly & WeigallSteven Steinfeld, Int'l Business Machines Corp.Dan Wedemeyer, University of Hawaii
Executive DirectorRichard J. Barber
Assistant DirectorJames G. Savage
Programs ManagerSharon G. Nakama
Program- AssistantHeather Cottrell
Registration/InformationDeanne OldsSharon Ashby
Computer SpecialistAle Dinglasan
Technical SpecialistHazel Guico
Floor ManagerPeter Rappa
Press CoordinatorFred Smith
Support StaffBonita JaneYvonne YeeJovelyne Ritua
THE PACIFIC TELECOMMUNICATIONSCOUNCIL
PTC'93 is organized by the PacificTelecommunications Council, an international non-governmental, non-profit organization. The council isregional in nature, embracing members from all thecountries that play a role in the development ofPacific telecommunications. Its 357 members fromindustry, academia and government are dedicated topromoting the understanding and beneficial use oftelecommunications throughout the entire PacificHemisphere--North, Central, and South America,East, South and Southeast Asia, Australia, NewZealand, Melanesia, Micronesia and Polynesia.
FOREWORD
These two volumes comprise the majority of papers presented at the Fifteenth Annual Pacific Telecommunications CouncilAnnual Conference (PTC'93), held in Honolulu on 17-20 January 1993. This milestone gathering has brought together over1,100 participants from over 40 countries. These volumes follow the general course of the Conference, ranging from generalDiscussion Papers offering a broad overview of telecoms issues to a collection of conference papers unparalleled in their scopeand depth. The Proceedings are carefully indexed and are combined with a comprehensive contents list.
In addition, the PTC' 93 Session Summaries are included following the ind..x in Volume 1. These Summaries provide aJseful guide to every paper presented at PTC'93, including those not included in the current Proceedings. A volume of latepapers will be produced following PTC'93, and copies may be purchased from the PTC office.
PTC's annual conference has become the region's premier venue for those interested in the world of internationaltelecommunications. A perusal of the index or table of contents will quickly reveal the sheer breadth of coverage for whichPTC is now famous. Analyzing our industry's latest technologies from ATM to LEOs to VSATs, and all acronyms inbetween, these papers provide a much-needed understanding of the technical, political, regulatory, and social challenges ahead.The country and region studies - see the separate "Country and Region Index" - provide expert reviews of developments inthe Pacific hemisphere's key states.
The Council brings together telecoms leaders and leading commentators from across the region. This expertise is reflectedin the papers found in these volumes. Of particular interest in this year's collection is the marked increase in efforts to puttechnological progress in the social context of development - and not just in developing countries. More efforts are beingmade to better understand how telecoms technology can and must be harnessed to improve education, social welfare, andnot just provide new toys for a technologically-literate elite. It is particularly heartening to see how PTC's corporate andprivate-sector members have embraced this theme. The international telecoms industry, as a part of society, relies upongrowing and, by necessity, more technologically sophisticated markets for its wares. The distance education, health care, andother social applications of new technologies arc now seen as at the forefront, and an essential prerequisite for profitablebusiness applications. These papers show that the optimism of the telecoms dorm al is possibly even greater new than it wasduring the Roaring 80s, but is now tempered by a more comprehensive view of how telecoms development and progress mustbenefit society.
If the educational challenges in the developed OECD states are great, then what of the developing countries? In reviewingthe years since the Maitland Commission, the countries of the Pacific hemisphere have come to a collective recognition ofthe importance of telecoms to infrastructural development. Many countries have made massive progress in a few short years.Some of the papers in these Proceedings outline the strategies, philosophies, and policies that allowed this progress to takeplace. Other countries still have a long road to follow, but it is increasingly apparent in these papers that the political willfor telecoms development is there, and that is more than half the battle.
The Pacific Telecommunications Council has throughout this period acted as a leading forum for analysis of these dramaticchanges. The annual conference Proceedings date back to 1979 and provide a fascinating historical record of the issues.These back issues are available from the PTC office, as is the new Pacific Telecommunications Review, the PTC's latestcontribution to the understanding of international telecommunications. This new PTC quarterly journal seeks to reflect thestrengths of the annual conferences by acting as a "gathering place" of leading telecoms comment and analysis on a continuingbasis.
These Proceedings arc organized by conference days, beginning with a comprehensive table of contents and an index. Theindex, which appears immediately following the table of contenis, cites papers by paper number rather than by page number.Once you've found the paper number, flip back to the table of contents to find the page number. Our tight productionschedule necessitates this two-part index, but with practice you should be able to accomplish this two-step process in sevenseconds flat (we've timed it). The index is itself in two parts and is divided into a "subject index" and a "country and regionindex".
James SavageDan WcdemeyerF-Inolulu, 1993
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TABLE OF CONTENTS
Subject IndexCountry IndexAuthor Index
Session Summaries
Sunday, Januar)? 17, 1993
Background Papers for Discussion Group
Forcasting Satellite Demand OctJACK ALBERT
Business Television Impacting the Corporate Bottom Line 004AL BOND
ZAP, CRACKLE AND POP: Health Concerns in the U.S. asto Radio Frequency Electric and Magnetic Fields Emitted fromTelecommunications Facilities DG6RACHELLE B. CHONG
Risk, Security, and Policy Considerations in the Use ofComputer and Communications Technology in FinancialManagement DG7HYUNG-MIN MICHAEL CHUNG
Low Cost Information Gateways DG8R. F. CRUICKSHANK, T.D. SCHOECHLE
Re-engineering Travel Information: Opportunities for TelecomProviders D010GEORGE E. DARBY
Impact of New User Applications on the TelecommunicationsMarket in the '90s 13015RALPH R. HUBBARD, ELVA ELLEN KOWALD
Marketing :n Japan DG16MASARU KAWAIIRI
Suggestions for Forming Multinational TelecommunicationsJoint Ventures DG18WARREN G. LAVEY
89 The Introduction of Universal Jointing and Coupler Technologyfor Optical Submarine Cable Systems DG19GRAHAM L MARLS, JAMES E. ROGALSKI
95 Recent Trends in International Value Added Network ServicesAgreements in the Pacific Basin DG20EUGENE NEWMAN
98 Telecommuting : Appropriate for the Asian Setting of the1990'S? DG21GIL GORDON, DAVID L PETERSON
105
110
114
Southeast Asian Telecom DG23ANNE-MARIE ROUSSEL
The Future of Value-Added Networks in the Pacific 1G24BRUCE WILLEY
NASA's Experimental Satellite Program for FutureTelecommunication Services SPI.4RAY J. ARNOLD. DOMINICK SANTARPIA. JIM CRISA11.11.1.1hies
122 Database Of The World: Converging TechnologiesWINSTON IIINDLE, JR.
V
Monday, January 18, 1993
129 Telecommunications Development in Taiwan, ROC, A StudyCase for Modernization 2.1.1.2P.Y. LEE
132 Development of Multipoint Teleconference System UsingMultipoint Control Unit (MCU)TATSUNIDE ARAKAKI. ETSUO KENMOKU. TOYONORI mum.MASANORI SAWAI
138 The New Generation of .SDN Applications and Beyond 2.2.1.2DALE T. ROGERS, JERRY A.. '0WICKI
146
150
157
160
Optimization of VSAT Systems and Application in Asia-PacificArea 2.2.1.5KAZUYOSHI MIYOSHI
Business, Legal, and Technical Implications of the Proliferationof Global Data Communications Networks 2.2.2.2HYUNG-MIN MICHAEL CHUNG, TEE EE TAN
New Multilaterally Agreed Rules For International Trade InServices 2.2.2.3RAYMOND J. KROMMENACKER
A Comparative Analysis of Governance Costs for InformationTechnology 2.2.2.4RUCHADAPORN LERTPHOKANONT, A. LEE GILBERT
168 Standards and Convergence: New Realities 2.2.3.1DAVID ALLEN, JOHN GILBERT
176 European Telecommunications - -New Dimensions 2.2.3.2L SCHNURR, F. ASK
181 Finding Common Ground--The Global Virtual NetworkServices Forum 2.2.3.3DOUG MACBETH
186
191
196
GSM, Intelligent Networks & Personal Communications 2.2.3.4HANS DIEMEL
Application Of GIS Technology To Wireless 2.2.3.5CHANDAN W. SEERNANI
Computers and Telecommunications for Distance Education2.2.4.2R. WILLIAM MAULS
204 The Contribution of Distance Higher Education to NationalDevelopment in Pacific Island Countries 2.2.4.3HAYATO YAMANAKA, TOSHIO KOBAYASHI, MICHAEL R. OGDEN
212 The Georgia Vocational Education Network: Training,Economic, and Technical Implications 2.2.4.4ERIC N. BARNHART
216 First Steps in Multimedia Telecommunications: Using ISDNfor Educational Delivery 2.2.4.5LINDA HARASIM
223 NTT's Four-Year ISDN Experience and the Future of Japan'sMarket 2.2.5.1KOICHI NOBUKUNI, FUMIHISA BAMBA
229 ISDN Compress Video - The Logical Next Step 2.2.5.2JOHN F. ARCHDEACON
232 An Evolution Strategy Toward Digitalized Inter-exchangeNetwork Structure in Seoul Metropolitan Area 2.2.5.3JEONG-WOOK KIM, HEE.S00 AIIN
238 Realization of EDI Message Transfer on an MHS System UsingISDN 2.2.54I IARUI IITO YAMAGUCHI. YUKIO SAITO, YOSHIKAZU TANAKA
BEST COPY AVAILABLE
242 The Wristwatch as a Personal Communications Device 22.6.1HIROSHI KOMATSU. RYOICI II NOROSE, STEVEN J. SYMONDS
245 The Expansion and Liberalization of MobileTelecommunications in Korea 2.2.6.4YONG SON, SANG-CHUL LEE. JUNEIL C. RYEE
250 Wireless Communications and Personal Freedom 2.2.63PHILIP L SPECTOR
253 PEACESAT: A Pacific Island Users Perspective on Searchingfor a Satellite 2.2.7.1
WILLIAM COOPERMAN. DENNIS CONNORS, CHARLES FRANZ
261
265
Unicorn: Moving into Asia 2.2.7.2STEVE COLLIN
The Rise of Competing Satellite Systems and the Fall of theIntelsat Monopoly 2.2.7.3SHIRLEY S. FUJIMOTO, MARC BEREJKA
271 WARC-92 and Low Earth Orbiting Satellites: A Case Study ofthe Process for Accommodating Spectrum Requirements ofNew Technologies 2.2.8.1ROBERT M. FRIEDEN
288
291
299
WARC'92 and Future Considerations 2.2.8.2RICHARD E. BUTLER
Multimedia Presentation System using ISDN 23.1.1YOUICHI KIHARA, YOSHIHIRO SHIMAZU,YOSHIHIRO SHIMOKAWA
'Project Lindbergh": Gateway to Public InformationNetworking 2.3.1.2SCOTT MORGAN
306 Broadband Delivery Across the Last Mile 2.3.1.4REG A. KAENEL
311 The Marketing Challenges of Telecommunication Services inThailand 2.3.2.1PRATEEP THIRATI
318 Maximizing Revenue for lnmarsat Signatories 2.3.2.3JAMES KEMP, JACK BRIGHT
323 Service Consequences: Evaluating the Role of Insurance 2.3.2.5WILLIAM L MAYO
325 The Roles of Copper and Fiber in the Evolution to Broadband:A Network Planning Perspective 2.3.3.1THOMAS M. SUPER, EDWARD A. WALVICK
328
334
341
MAMI: The New Direction of Interactive TV 2.3.3.2N. KOTANI, J. KISHIGAMI, N. SAKURAI, A. ISHIKAWA
Calling All Televisions? The Convergence of the CableTelevision and Telephone Industries in the United States 2.33.3RICHARD L GOLDBERG
Harnessing Telecommunication Technologies for EnhancingNational Competitiveness and Quality of Life: The Singapore1T2000 Project 2.3.4.11300N SIONG NEO. CHRISTINA S011
346 Propulsion for Activation of Community in the Region with PCNetworking Services 2.3.4.2JUNKO FUKAMIZU
352 NTT's VI&P vision 2.3.4.4HISAO YAMAMOTO
357 An Implementation of Common Channel Signalling Capabilitieson TDX-1 Switching System 1151SUNMOO KANE,. WOONYOUNG HAN. YOUNCiSI KIM. HANGGIJBARK
364 Technology Enablers for Residential Broadband Services inToday's Loop Environment 23.5.2ROBERT W. LAWRENCE
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376
393
Frame Relay and Evolution to ATM 2.3.5 3MEI IMET S. UNSOY, KENNETH G. HAYWARD
Enterprise Networking using Frame Relay 23.5.4K.S. RAM MOHAN
ATM Service Node: A Step Toward BroadbandTelecommunication Networks 23.55K. AKIBA, S. IWASAKI. H. FUCHIGAMI, K. KOU, A. ARUTAKI
399 Japanese Digital Cellular Telecommunication System 23.6.1MINORU TANAKA YUJI KITAHARA
403 The Evolution of Wireless: Meeting the Mobile User's Needs2.3.6.2ERIC F. ENSOR
407 Digital Cellular Opportunities in the Pacific Region 2.3.6.3GARY CANNALTE
410
417
421
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429
CELSAT's Hybrid Personal Communications System 2.3.6.4DAVID D. OTTEN, ALBERT J. MALLINCKRODT
International Digital TV Service Via INTELSAT 2.3.7.2EDWARD A. FAINE
Emerging Technologies and Future Satellites 2.3.7.3LINDA M. RANNIN. ABDUL H. LAKHANI
KOREASAT Technology Development and Services 2.3.7.5HAN HWANGBO
3uilding Telecom Networks to the People's Republic of China -Infrastructure and Services The Hong Kong Gateway 23.8.2
FLORA TUNG
Tuesday, January 19, 1992 - Volume II
435 New Communication Technologies Applied to Services ofSocial Benefit 3.2.12ARTURO SERRANO, ENRIQUE MELROSE
439 The Imaging Advantage for Developing Countries 3.2.1.3DEAN JOHNSTON, JIM HAMBLIN
443 The Inequality of Equal Accounting Rates 3.2.2.1PETER JACKSON, JOHN SULLIVAN
448 The Dynamics and Impact of U.S. Telecom Policy onAccounting Rates and International Simple Resale 3.2.2.2ROBERT J. AAMOTH
455 Knowing What to Ask For: Privatization ofTelecommunications After the Digital Revolution Guidelinesfor the Host Country 3.2.3.2ROBERT A.F. REISNER
462
465
472
479
486
Medical Applications Through Numeris, The French ISDN3.2.4.1CLAUDINE BIQUILLON
Convergent Needs, Divergent Technology: Nursing Educationfor Rural Practitioners 3.2.4.2
TUCKER, GAIL RAY
Multimedia Broadband Communications Health-CareApplications 3.2.4.3KENNETI I R. RAYMOND
Network Management Technology - A Paradigm for FutureEnterprise Control 3.25 2MARK WALI, JEFF WIIITEIIII.L
The Study of Telecommunication Network Configuration in theGreater Taipei Area 3.2.5.4SHAN-IISINTSAOSIIYANG.MIN0 LIN, YEII-CHYN HER,IIONG LINOWANG.MIN -GAME CIIIN.C31112 SHYLIR, YING MINC, WU
492 Enterprise Networking in Asia 32.5.5KEN ZITA
500 WARC'92 and the Implications for Digital Audio Broadcasting3.2.6.1RALPH ZEITOUN
506 DAB Systems for the Western Hemisphere: Satellite SystemDesigns 3.2.6.2EDWARD E. REINHART
511 Satellite CD Radio System Trades 3.2.6.4KLAUS G. JOHANNSEN, ROBERT D. BRISKMAN
519 United States Satellite Digital Audio Radio Service 3.2.6.5ROBERT D. BRISKMAN
526 Small Satellites for Mobilt and Environmental DataCommunications: Effectively Solving Economic, Social andTechnological Issues 3.2.7.1
FULVIO ANANASSO
531 Economies of the New Smaller and Shorter LifetimeGeostationary Communications Satellites 3.2.7.2JAMES R. STUART, RANDALL E COFFEY. JANET CLEAVE STUART
537 Export Control: Current Legal and Policy Issues AffectingSatellite and Telecommunications Ventures in the Pacific Rim3.2.7_3JILL ABESHOUSE STERN. THOMAS E. CROCKER
544 Convergence, Universal Service and Public Policy 3.2.8.1REIN P MERE
550 Canada Embraces Long Distance Competition 3.2.82LAURENCE 3.E DUNBAR
558
561
Network interconnect in New Zealand 3.2.83AINSLEY VAN CUYLENBURG
Determining Optimal Supply Level of Switching Systems andLocal Cables: An Inventory Model 3.2.8.4KYU-TAEK NAM. BO-SANG LEE
565 Network Management for Users in Japan 3.3.11TORU TSUCHIYA
570 The Politics of Telecommunications Reform in DevelopingCountries 33.1.4BEN A. PETRAZZINI
581 International Telecommunications Is Shifting Paradigms: HowWill It Affect Your Business? 3.3.2.3GREGORY C. STAPLE
593 Study on the Measurement of Economic Benefits ofTelecommunication Project in the Developing Countries-Proposing New Method 3.3.2.4MIKIO DANNO
600 The Software Export Industry of Developing Countries 33.25GEORGE J. LISSANDRELLO
609 Political Challenges to Globalisation of PublicTelecommunications Operators 3.3.3.3YOSFIIKO KURISAKI
615 Tips, Tricks and Techniques for Trouble-free Telework 3.3.4.1GIL E. GORDON
622 Global Teaming: Meeting the Challenge of Global Businesswith Help from Telecommunications and InformationTechnology -- and a Lot of Management Savvy! 3.3.4.4PAMELA J. JOHNSON
625 Bandwidth On Demand Metered Service 33.5.1PAUL A. STERN
628 Broadband Node Control Architecture for Multimedia Services3.3.5.3HISASHI MANABE, TATSUHIKO YAMAZAKI
633 Art and Technology: Bridges to a Multicultural Society 3.36JOYCE M. GATTAS, JOHN M EGER
641 Social Impact of Cellular Telephone Usage in Hawaii 33.6.2DINER M. DAVIS
649 Imparja Television Pty Ltd - Australia's Aboriginal OwnedCommercial Television Company 33.6.3LORRAINE LIDDLE, JIM WILKINSON
653 Telecommunications Applications for Education and RuralDevelopment: A Comparison of the Australian Outback andthe Canadian North 33.6.4HEATHER E. HUDSON
660 The Role of Globalstar, A Satellite-Basal PersonalCommunications System in the Wireless Revolution 337.1ROBERT A. WIEDEMAN
665 TAOS, a New Low-Cost Mobile-User LEO Satellite Networkfor Positioning and Messaging 33.73J. J. BLOCEI
Wednesday, January 20, 1993
671 Telephone Development Project for the Valle Del Cauca StateColombia S.A. 4.1.1.1FERNANDO GARCES LLOREDA
675 Personal Communication Services -- Now That I can HaveThem, Why Do I Really Want Them? And Thoughts on theFuture of PCS in the Marketplace 4.2.1.1BRAD BAXTER
681 Competition for Electronic Superhighways in the Pacific 4.2.1.3E. JEAN BISHOP
690 The Market for Multimedia Distance Education for CorporateTraining in Japan-US ifusiness and the Management ofInformation Technology 4.2.1.4LARRY R. CROSS
695 New Directions in Asian Telecommunications II--Russia'sReach for Global Impact--Integration or Devolution? 4.2.2.1STEVEN A. LEVY. DEIRDRE BUELL
700
709
715
Visions of the Information Age - 2021 AD 4.2.2.2ROBERT M. JANOWIAK, JAGDISH N. SHETH
Developing Strategics for Pacific Communications 4.2.2.3JOHN H. ERBETTA
Is Multimedia Ready for Primetime? Sumbling Blocks toMultimedia Diffusion 4.2.2.4GWANG-JUB HAN, JONGDUCK JUNG
728 PECC Triple-T Port (Teleport) for Developing EconomiesSecond Phase Report -- Case Studies 4.2.2.5KENJI SAGA
736
745
Video Dialtone Access to Multimedia 4.2.3.1A.C. HARRISONSURGEON
Telecommunications and Computer Industries Collaboration4.2.3.2CAROL BURKE. JOAN KELLY
753 Converging Telecommunications Technologies: ChallengesFacing Government and Regulators in Australia and NcwZealand 4.2.33RICHARD A. JOSEPH
760 Harnessing Convergence for Development: Industrial Policyand IT Development in Australia 42.3.4JOHN W. HOUGIITON
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768 High Definition Television: The Key To Multimedia andBroadband Networks 4.2.4.1DENNIS W. ELLIOTT
772 The Current Status and Future Prospects of KDD'sInternational ISDN Service with the Focus on TypicalApplication Examples 42.4.2SYUJ1 KANAZAWA
785 Telco Vision: Delivering Distance Education 4.2.4.3PAUL KUIIAR, EDWIN J. SHIMIZU
791 High Reliability LAN With New RAS Functions 4.2.4.4TAKAAKI SUGA
797 The Customer in Product Development: A MarketingPerspccitive 4.23.5NOELLA GORDON
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The Technology -Human Factor Relationship 4.2.6.1DONALD M. LAMBERTON
The Human Impact of Converging CommunicationTechnologies: Entertainmentisation, Social Change andSaturation 4.2.6.3GREG HEARN
813 The Impact of the New Services of Telecommunications inDeveloping Countries 4.2.6.4MIGUEL C. DE LA SOTTA
819 The Telephone in Daily Life: A Study of Personal TelephoneUse in the United States 4.2.6.5ROBERT LAROSE, HERBERT DORDICK
826 Is the World Ready for the Go-anywhere Telephone? 4.2.7.1ALAN BRUNSTROM
835 INMARSAT-M Portable MES 4.2.7.2RAM SUBRAMANIAM, AKIHIRO ISHIDE, NOBUHIRO ENDO. COLINSMITH
841 Bridging The Gap 4.2.7.3J.C. BELL
850 Dial M for Service 4.2:7.4EDWARD R. SLACK
854 Telecommunications Infrastructure-Is it a Catalyst for Growthin Malaysia? 4.2.8.1OMAR CHARLES ABDULLAH
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866
Communications in the Russian Far East 4.2.8.2CHUCK SCHUMANN, GEORGE SAPOV
Utilization of Developing Country Resources for Research andDevelopment Related to Telecommunication Products andSystems 4.2.8.3ADVN KULARATNA. SHANTHA FERNANDO. M. KALYANAPALA,PARAKUM FERNANDO
906 The Telcos Move Toward a Global Market: Economic andCultural Implications for the Pacific Islands Nations 43.1.5RO "NIE G. BANKSTON
913 The Challenge of Transferring a State of the ArtTelecommunication System Manufacturing Technology 43.2.4GEORGES KREBS
917 Caller ID and Privacy: New Options 43.3.1PETER B. WHITE
922 Software Patents, Ownership And Infringement Crimes: NewDevelopments 4.33.2STEPHEN GLAZIER
929 Managing the Privacy Implications of New Technology 4.3.33BRIAN G. MILTON
934 The Personal Data Protection Regime Emerging in Korea4.3.3.4JISUK WOO
943 Building Successful Distance Learning Networks 4.3.4.1JOHN MAHONEY, RICHARD BESSEY
947 Creating an ISDN Distance Education Network 43.4.2BETTY MITCHELL, DEB REIDLINGER
953 Multi-cultural Issues in the Delivery of Distance Education43.4.4BARRY WILLIS
957 Academic Internetworking in Mexico -- The world at the reachof a keyboard 4.3.5.1MARIO M. ARREOLASANTANDER
961
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The HI-NEST Model: An International Computer Network forSupport of Program Implementation 4.33.2D. B. YOUNG, M. GULLICKSON-MOREITT, J. H. SOUTHWORTH
A System Architecture for Ideographic Language Support4.3.5.3ANDREW PAN, JAMES BARNES, ROEN HOGG
Architectural Consideration in the Design of Network BasedEducational Systems (NBES) 43.5.4S.V. AHAMED, V.B. LAWRENCE
Anticipating and Estimating Adoption and Resistance ofInteractive Instructional Technology: A Look at Multimedia inHigher Education 43.6.1LOUIS LEUNG
988 Development and Telecommunications Technology in PacificIsland ?vlicrostatcs 4.3.6.2MICHAEL R. OGDEN
998 Assessing Videotex Diffusion and Usage Patterns in aManufacturing Organization: A Case Study 4.3.63MICHEL G. ELASMAR
874 The Political Economy of Deregulating Telecommunications in 1005Hong Kong 4.2.8.4PAUL S.N. LEE
886 New "Have-Nots's- and the Old Problems? How the EastEuropean Countries and the Republics of the Former SovietUnion Integrate into the World Communication Order 4.3.1.1WOLFGANG KLEINWACIITER
893
902
Creating Tomorrow's Telecommunications Infrastructures:Cultural Needs and Economic Realities 43.1.3JOL ARDEN f-LICKINGER
Converging Telecommunications Technologies, Economy, andBusiness Efficiency 4.3.1.4RONALD P. UHLIG, BILL JOLL
1012
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An Empirical Investication of Telex Data as a Useful Predictorof Socioeconomic Development Among Less DevelopedCountries 43.6.4MEREDITH SHUTTLEWORTH GLENN
Framing Our Common Future: Strategies for PromotingCooperation Among Stakeholders 4.3.6.5ANGELINA T. WONG
VSAT Solutions for Innovative International and DomesticServices 4.3.7.1
B K. SYNGAL
VSAT's - An Efficient Option for Voice and Data Networking4.3.7.2CAROL A. POLITI
1032 VSAT in Local Administration Communication Network 4.3 7.6H. NOI3A, Y. ONDA. T. KIKUTA
1039 Television in Papua New Guinea: Policies and Practice 4.3.8.1AMOS OWENARES THOMAS
1049 Global Telecommunications Development - Market Forces orMulti-Lateral Planning? 4.4.1.1CHRIS C. VONWILLER
1053 Technology Transfer in the Asia Pacific Region 4.4.1.2SETYANTO SANTOSA
1060 Cooperation Tasks of Telecommunications in the Asia-PacificRegion 4.4.13SHIN YUNS1K
SUBJECT INDEX Convergence 2.2.3.1.2.3.3.3.2.3.4.4.
Accounting Rates/Tariffs 3.2.2.1. 3.2.1.1.3.2.2.2. 3.2.8.1.3.2.2.3. 4.2.1.2.
4.2.1.3.Alliances 2.2.1.2. 4.2.3.1.
2.3.3.4. 4.2.3.2.4.2.3.4.
Area Networks (LAN/WAN) 2.3.1.2. 4.2.6.1.2.3.4.4. 4.2.6.3.2.3.5.3. 1.2.8.3.3.2.5.1. 4.3.1.4.3.2.5.3.4.2.4.4. Copyright & Irellectual Property 3.3.1.2.
4.3.3.1.Broadband Applications 2.3.1.4. 4.3.3.2.
2.3.3.1. 4.3.3.3.2.3.4.4. 4.3.3.4.3.2.4.1.3.2.4.3. Data Communications 2.2.2.2.3.3.5.1. 2.3.1.4.3.3.5.3. 3.2.7.1.4.2.1.2. 4.3.5.4.4.2.1.3. 4.3.7.2.4.2.4.3. 4.4.1.3.4.2.4.4.4.3.5.2. Development Issues 2.2.2.4.
2.3.2.1.Broadcasting Applications 2.2.8.2. 2.3.2.1
2.3.1.4. 2.3.7.4.2.3.7.2. 2.3.7.5.3.2.6.1. 2.3.8.2.3.2.6.2. 3.2.1.2.3.2.6.4. 3.2.3.3.3.2.6.5. 3.3.1.4.3.3.6.3. 3.3.2.4.3.3.6.4. 3.3.2.5.4.2.4.1. 3.3.6.3.4./6.3. 3.3.6.4.4.3.8.1. 4.2./1.
4.2./3.Cable Television 2.3.3.3 4.2.6.1.
2.3.3.3. 4.2.6.4.3.2.1.4. 4.2.8.1.
4.2.8.2.Caller ID 3.3.1.2. 4.2.8.3.
4.3.3.1. 4.3.1.1.4.3.1.2.
Cellular 2.2.6.4. 4.3.1.4.13.6.1. 4.3.6.2.2.3.6.4. 4.3.6.4.3.3.6.2. 4.3.8.2.4.2.6.4. 4.4.1.1.
4.4.1.3.
Competition/Privatization 2.2.6.4. Digital Audio Broadcasting 3.2.6.1.2.2.7.3. 3.2.6.2.2.3.2.1. 3.2.6.3.3.2.3.1. 3.2.6.4.3.2.3.2. 3.2.6.5.3.3.1.4.3.3.2.3. Distance Education 2.2.4.2.3.3.5.1. 2.2.4.3.3.3.5.3- 2.2.4.4.4.2.3.3. 3.2.4.1.4.2.3.4. 3.2.4.2.4.2.8.1. 3.3.4.3.4.3.1.3. 3.3.6.1.4.3.8.2. 3.3.6.3.
3.3.6.4.
X
4.2.1.4. 2.3.1.1.4.2.4.3. 2.3.1.4.4.3.4.1. 2.3.4.1.4.3.4.2. 2.3.4.2.4.3.4.4. 2.3.5.2.4.3.5.2. 3.2.4.3.4.3.5.4. 3.2.8.1.4.3.6.1. 3.3.5.3.4.3.6.5. 4.2.1.2.
4.2.2.4.EDI 2.2.5.4. 4.2.6.1.
2.3.4.1. 4.2.6.2.4.2.8.3.
Enterprise Networks 2.3.5.4. 4.3.6.1.3.2.5.2. 4.3.7.6.3.2.5.5.4.3.5.1 Networks 2.2.3.3.
Foreign Investment 3.2.2.4. 2.2.4.2.3.3.2.3. 2.2.5.3.
2.3.1.2.2.3.2.1.2.3.3.4.
Freqeency Management 2.2.1.3. 2.3.4.1.4.2.4.1. 2.3.4.2.
2.3.4.4.GSM 2.2.3.4. 2.3.5.1.
2.3.5.2.Health Care Applications 3.2.4.1. 2.3.5.3.
3.2.4.3. 2.3.5.4.2.3.7.3.
HDTV 2.2.8.2.4.2.4.1. 3.2.5.1.
3.2.5.2.Ideographic Language 4.3.5.3. 3.2.5.4.
3.2.5.5.Imaging 3.2.1.3. 3.2.8.4.
3.3.1.1.INMARSAT 2.3.2.3. 3.3.2.2.
4.2.7.1. 3.3.2.3.4.2.7.2. 3.3.5.2.4.2.7.3. 3.3.5.3.4.2.7.4. 3.3.7.2.
4.2.1.3.INTELSAT 2.2.7.3. 4.2.2.1.
2.2.7.5. 4.2.2.2.2.3.7.2. 4.2.3.4.
4.2.8.2.ITU 2.2.8.1. 4.2.8.4.
2.2.8.2. 4.3.5.1.3.2.6.1. 4.3.5.4.
ISDN 2.2.1.2. Network Management 3.3.1.1.2.2.4.5. 4.2.6.5.2.2.5.1. 4.3.2.2.2.2.5.4. Outsourcing 3.3.1.1.2.3.1.1.2.3.1.2. PCS 2.2.6.1.4.2.4.2. 2.2.6.3.4.2.6.5. 2.2.6.5.4.3.4.2. 2.3.4.4.
2.3.6.2.LEO Satellites 2.2.8.2. 4.2.1.1.
3.2.7.1.3.3.7.1. Policy Issues 2.3.2.1.3.3.7.2. 2.3.2.2.3.3.7.3. 2.3.3.3.3.3.7.4. 2.3.4.1.
3.2.1.1.Multimedia 2.2.1.3. 3.2.2.3.
2.2.3.1. 3.2.2.4.2.2.4.3. 3.2.3.2.
BEST COPY AVAILABLE
3.2.8.1.3.2.8.2.3.2.8.3.
2.2.7.4.2.3.6.4.
3.3.1.4. Satellite Insurance 2.3.2.3.3.3.2.3.3.3.8.3. Satellite, LEO (see LEO Satellites)4.2.2.2.4.2.2.3. Socio-Cultural Issues 2.3.1.3.4.2.3.1. 2.3.2.2.4.2.3.3. 3.2.4.3.4.2.3.4. 3.3.1.4.4.2.4.3. 3.3.2.3.4.2.6.1. 3.3.3.3.4.2.8.1. 3.3.6.1.4.2.8.4. 3.3.6.4.4.3.1.1. 3.3.6.6.4.3.6.2. 4.2.2.4.
4.2.3.3.Regulatory Issues 2.2.2.3. 4.2.4.3.
2.2.3.2. 4.2.6.1.2.3.3.3. 4.2.6.3.3.2.1.1. 4.2.6.4.
3.2.2.1. 4.2.6.5.3.2.3.2. 4.3.1.3.
3.2.7.3. 4.3.4.4.3.2.8.2. 4.3.6.2.3.2.8.3. 4.3.6.4.3.3.1.4. 4.4.1.3.3.3.2.3.3.3.3.3. SONET 2.3.1.24.2.2.2.4.2.3.1.4.2.3.3. Standards 2.2.2.2.4.2.3.4. 2.2.3.1.4.2.4.3. 2.23.2.4.2.8.1.4.2.8.2. Submarine Cables 4.2.5.5.4.2.8.4. 4.3.2.4.4.3.1.1.4.3.1.5. Technology Transfer 2.2.2.4.4.4.1.2. 4.2.1.3.
4.2.6.1.Satellites 2.2_6.2, 4.2.6.4.
2.2.7.1. 4.2.8.3.2.2.7.2. 4.3.6.2.2.2.7.3.2.2.7.4. Teleports 4.2.2.5.2.2.7.5.2.2.8.2. Telework 3.3.4.1.2.3.2.3. 3.3.4.4.2.3.2.5.2.3.6.4. Tourismffravel Industry Telecoms 4.2.2.5.2.3.7.2.2.3.7.3. Trade Issues 2.2.2.3.2.3.7.5. 3.2.2.2.3.2.1.4. 3.2.7.3.3.2.6.2. 3.3.2.5.3.2.6.4. 4.3.5.1.3.2.6.5.3.2.7.1. Training/Human Resource Development 2.2.4.1.3.2.7.2. 2.2.4.4.3.3.5.1. 3.3.6.5.3.3.7.1. 4.2.8.3.3.3.7.3. 4.4.1.3.4.2.7.1.4.2.7.2. Videocon fere n ci n gfre Ice° n fe renci ng 2.2.1.1.4.2.7.3. 2.2.5.2.4.2.7.4. 3.3.4.1.4.3.7.6. 3.3.4.3.
3.3.4.4.Satellites, Competitive Systems 2.2.7.2. 3.3.6.1.
2.2.7.3. 4.3.4.2.
XII
Video Technologies 2.2.8.2.2.3.1.4.3.2.1.4.4.2.3.1.4.2.4.1.4.3.1.5.4.3.4.2.4.3.8.1.
Videotext 4.3.6.3.
Virtual Reality 2.3.1.3.
Virtual Networks 2.2.3.3.
VSATs 2.2.1.5.4.3.7.1.4.3.7.2.4.3.7.6.
WARC (see ITU)
Wireless Applications 2.2.6.12.2...2..2.2.6.3.2.2.6.4.2.2.6.5.2.3.1.4.2.3.6.3.3.3.6.2.3.3.6.4.4.2.6.4.
COUNTRY & REGION INDEX
NB: An asterisk (') indicates that a country profile is provided. Other entries concern the country or regionwith regard to individual projects or within the context of a comparative analysis.
Argentina 3.3.1.4. Latin America 3.3.1.4.4.3.5.1.
Australia 3.3.1.3. 4.3.8.2.3.3.6.3.3.3.6.4. Malaysia 3.2.3.3.4.2.3.3.' 3.2.5.5.4.2.3.4. 3.3.1.4.4.2.6.3.' 4.2.8.1.4.3.2.4.4.4.1.1. Mexico 3.3.1.4.
4.3.5.1.'Canada
3.2.2.2. New Zealand 3.2.8.3.'3.2.2.4. 4.3.2.4.3.2.3.4.3.2.8.2.' Pacific Islands 2.2.7.1.3.3.6.2. 4.2.7.4.3.3.6.4. 4.3.1.5.4.3.3.3.' 4.3.6.2.4.3.4.2.4.3.6.5. Papua New Guinea 4.3.8.1.'
Chile 4.3.8.2.' Philippines 2.2.2.1
China PRC 2.3.8.2.3.3.2.2. Russia 4.2.2.1.'
4.2.8.2.'Colombia 4.1.1.1 4.3.1.1.
Europe (EC) 2.2.3.2. Singapore 2.3.4.1.'3.3.1.2. 3.2.3.3.4.3.1.1.4.3.2.4. Taiwan 2.1.1.1.
3.2.5.4.France 3.2.4.1.
Thailand 2.2.2.1.Fiji 2.2.4.3. 2.3.2.1.*
3.2.3.3.Hong Kong 2.3.8.2. 3.2.5.5.
4.2.8.4. 3.3.1.4.
Indonesia 3.2.3.3. United Kingdom 3.2.2.2.3.2.5.5.
United States of America 2.2.4.4.Japan 2.2.1.1. 2.3.3.3.'
2.2.4.3. 2.3.6.2.2.2.5.1. 2.3.6.4.2.2.5.4. 3.2.2.2.2.3.4.2. 3.2.4.2.2.3.4.4. 3.2.4.3.2.3.6.1. 3.2.6.2.3.3.1.1. 3.2.6.5.3.3.5.2. 3.2.7.3.4.2.4.4. 4.2.2.2.4.3.2.3. 4.2.2.4.4.3.7.6. 4.2.4.3.
4.3.1.5.Korea ROK 2.2.5.3. 4.3.4.1.
2.2.6.4. 4.3.5.2.2.3.5.1. 4.3.6.3.2.3.7.5.'3.2.8.4.4.3.3.4.
xis
AUTHOR INDEX
Aamoth, RJ 3.2.2.2. Gilbert, J 2.2.3.1.Abdullah, OC 4.2.8.1. Glazier, SC 4.3.3.2.Ahn, Hee Soo 2.2.5.3. Glenn, MS 4.3.6.4.Ahamcd, SV 4.3.5.4. Goldberg, R 2.3.3.3.Akiha, KG 2.3.5.5. Gordon, GE 3.3.4.1.Allen. D Gordon, N 4.2.5.5.Ananasso, F 3.2.7.1. Gullickson-Morfitt, M 4.3.5.2.Arakaki, T 2.2.1.1.Archdeacon, JF 2.2.5.2. Hamblin, J 3.2.1.3.Arrcola S., MM 4.3.5.1. Han, Gwang Jub 4.2.2.4.Arutaki, A 2.3.5.5. Han, Woon Young 2.3.5.1.Ask, F 2.2.3.2. Harasim, L 2.2.4.5.
Harrison-Surgeon, AC 4.2.3.1.Bahk, H 2.3.5.1. Hayward, KG 2.3.5.3.Bamba, F 2.2.5.1. Hearn, G 4.2.6.3.Bankston, R 4.3.1.5. Her, Yeh Chyn 2.3.5.4.Baxter, B 4.2.1.1. Hiraga, MK 3.3.4.3.Barnhart, EN 2.2.4.4. Hogg, R 4.3.5.3.Bell, JC 4.2.7.3. Houghton, J 4.2.3.4.Berejka, M 2.2.7.3. Hudson, HE 3.3.6.4.Bessey, R 4.3.4.1. Hwangbo, H 2.3.7.5.Biquillon, C 3.2.4.1.Bishop, EJ 4.2.1.3. Ishida, T 2.2.1.1.Bloch, J-..1 3.3.7.3. Ishide, A 4.2.7.2.Briskman, RD 3.2.6.4. Iwasaki, S 2.3.5.5.Briskman, RD 3.2.6.5.Brunstrom, A 4.2.7.1. Jackson, P 3.2.2.1.Burke, C 4.2.3.2. Janowiak, RM 4.2.2.2.Butler, RE 2.2.8.2. Johannsen, KG 3.2.6.4.
Johnson, PJ 3.3.4.4.Canna Ile, G 2.3.6.3. Johnston, D 3.2.1.3.Cheng, Min Gumc 3.2.5.4. Joll, B 4.3.1.4.Chung, HMM 2.2.2.2. Joseph, RA 4.2.3.3.Collin, S 2.2.7.2. Jung, Jong Duck 4.2.2.4.Connors, D 2.2.7.1. Jussawalla, M 2.2.2.1.Cooperman, W 2.2.7.1. Kaencl, RA 2.3.1.4.Crocker, T 3.2.7.3. Kalyanapala, M 4.2.8.3.Cross, LR 4.2.1.4. Kanazawa, S
Kang, S 2.3.5.1.Danno, M 3.3.2.4. Kelly, J 4.2.3.2Davis, DM 3.3.6.2. Kemp, J 2.3.2.3.Dc La Sotta, MC 4.2.6.4. Kenmoku, E 2.2.1.1.Diemel, H 2.2.3.4. Kihara, Y 2.3.1.1.Dordick, H 4.2.6.5. Kikuta, T 4.3.7.6.Dunbar, UE 3.2.8.2. Kim, Jeong Wook 2.2.5.3.
Kim, Young Si 2.3.5.1.Eger, JM 3.3.6.1. Kitahara, Y 2.3.6.1.Elasmar, MG 4.3.6.3. Klienwachter, W 4.3.1.1.Elliott, DW 4.2.4.1. Kobayashi, T 2.2.4.3.Endo, N 4.2.7.2. Komatsu, H 2.6.1.Ensor, EF 2.3.6.2. Kou, K 2.3.5.5.Erbetta, JH 4.2.2.3. Krebs, G 4.3.2.4.
Krommenacker, R 2.2.2.3.Faine, EA 2.3.7.2. Kuhar, P 4.2.4.3.Fernando, P 4.2.8.3. Kularatna, ADVN 4.2.8.3.Fernando, S 4.2.8.3. Ku risa ki, Y 3.3.3.3.Flickinger, JA 4.3.1.3.Franz.. C 2.2.7.1. Lakhani, AH 2.3.7.3.Frieden, RF 2.2.8.1. Lamberton, DM 4.2.6.1.Fuchiaami. N 2.3.5.5. Larose, R 4.2.6.5.Fu lc? m izu J 2.3.4.2. Lawrence, RW 2.3.5.2.
V 3.3.4.3. Lawrence, VB 4.3.5.5.rujimori, T 3.3.5.2. Lee, Bo Sang 3.2.8.4.Fujii toto, SS 2.2.7.3. Lee, PSN 4.2.8.4.
Lee, Sang Chul 2.2.6.4.Garces L., F 4.1.1.2. Lcrtphokanont, R 2.2.2.4.Gattas, JM 3.3.6.1. Leung, L 4.3.6.1.Gilbert, AL 2.2.2.4. Levy, S 4.2.2.1.
XV
Liddle, L 3.3.6.3. Super, TM 2.3.3.1.Lin, Shyano, Ming 3.2.5.4. Symonds, S 2.2.6.1.Lissandrello, G Syngal, BK 4.3.7.1.Loistrom, MD 2.2.2.1. Tan, TE 2.2.2.2.Long, B 2.3.1.3. Tanaka, M 2.3.6.1.
Thirati, P 2.3.1.2.Macbeth, J '.1.3.3. Thomas, AO 4.3.8.1.Mahoney, J 4.3.4.1. Tsao, Shan Hsin 3.2.5.4.Mallinckrodt, Tsuehiya, T 3.3.1.1.Manatee, H 3.3.5.3. Tucker, JL 3.2.4.2.Mau le, RW 2.2.4.2. Tung, FMayo, WL 2.3.2.5.Melrose, E 1.2.1.2. Uhhg, RP 4.3.1.4.Mere. Rt' Unsoy, NI 2.3.5.3.
BG 4.3.3.3.Mitchell, B 4.3.4.2. Van Cuylcnhurg, A 3.2.6.3.Miyoshi, K 2.2.1.5. Vonwiller, CC 4.4.1.1.Mohan, KSR 2.3.5.4.Molyneaux, J 3.2.1.5. Walvick, EA 2.3.3.2.:Morgan. S Wang, Hong Ling 3.2.5.4.Nam, Kyu Tack 3.2.8.4. White, PB 4.3.3.1.Neo, BS 2.3.4.1. Wicdcman, R 3.3.7.1.Nobukuni, K 2.2.5.1. Wilkinson, J 3.3.6.3.Noda, H 4.3.7.6. Willis, B 4.3.4.4.Norosc, R 2.2.6.1. Wane, AT 4.3.6.5.Nowicki, JA 2.2.1.2. Woo, J 4.3.3.4.
Wu, Ying Ming 3.2.5.4.Ogden, MR 2.2.4.3.Ogden, MR 4.3.6.2. Yamaguchi, H 2.2.5.4.
Onda, Y 4.3.7.6. Yamamoto, H 2.3.4.4.
Otten, D 2.3.6.4. Yamanaka, H 2.2.4.3.Yamazaki, T 3.3.5.3.
Pan, A 4.3.5.3. Young, DB 4.3.5.2.
Petrauini, BA 3.3.1.4.Po liti, CA 4.3.7.2. Zita, K 3.2.5.5.
Zitter, RM 3.2.1.4.Rankin, LM 2.3.7.3.Ray, G 3.2.4.2.Raymond, KR 3.2.4.3.Reid linger, D 4.3.4.2.Reinhart, E 3.2.6.2.Reisner, RF 12.3.2.Rogers, DT 2.2.1.2.Ryes, JC 2.2.6.4.
Saga, K 4.2.2.5.Santosa, SP 4.4.1.2.Sapov, GSawai, M 2.2.1.1.Schnurr, L 2.2.3.2.Schumann, C 4.2.8.2.Serrano, A 3.2.1.2.Shcth, JN 4.2.2.2.Shimazu, Y 2.3.1.1.Shimizu, EJ 4.2.4.3.Shimokawa, Y 2.3.1.1.Shin, Yun-sik 4.4.1.3.Shyur, Chin Chir 3.2.3.4.Slack, ER 4.2.7.4.Smith, C 4.2.7.2.Soh, C 2.3.4.1.Son, Yong 2.2.6.4.Southworth, 31-1 4.3.5.2.Spector, P 2.2.6.5.Staple, GC 3.3.2.3.Stern, JA 3.2.7.3.Stern, PA 3 3.5.1.Subramaniam, R 4.2.7.2.Suga, T 4.2.4.4.Sullivan, J 3.2.2.1.
xvi
SESSION SUMMARIES
NOTES
PTC'93 SESSION SUMMARIES
2.1.1 PLANNING AND IMPLEMENTING SERVICES
2.1.1.1 Telecommunications Development in Taiwan, ROC, A Study Case forModernizationP.Y. Lee, Director General, Directorate General Telecommunications, Taiwan, RO.C.
In recent years, the worldwide developmental trends have reflected the rise of democracy, economicliberalization, and social diversification. The speaker reviews how Taiwan, one of Asia's "miracle economies",has utilized telecommunications to help achieve dramatically rapid growth. The Directorate General ofTelecommunications has, according to the speaker, surmounted great difficulties over the years in providiingwhat is today a fully developed service.
2.2.1 TECHNO-APPLICATIONS
2.2.1.1 Development of Multipoint Teleconference System Using Multipoint ControlUnit (MCU)Tatsuhide Arakaki, Systems Engineer; Etsuo Kenmoku, Supervisor; Toyonori Ishida,Supervisor; and Masanori Sawai, Systems Engineer, NEC Engineering, Ltd., Japan
Teleconferencing technologies have advanced quickly in recent years. The speaker outlines a newly-developedmultipoint teleconference system that interconnects three or more sites. Using a Multipoint Control Unit(MCU), this NEC-developed system uses voice-activated switchingand sophisticated video technology to createa realistic meeting environment, irrespective of distance.
2.2.1.2 The New Generation of ISDN Applications and BeyondDale T. Rogers, Marketing Manager, Global ISDN Services, AT&T and Jerry A. Nowidd,Vice President, ESI Systems, Inc., USA
The speaker addresses several new societal applications of ISDN in North America and the Pacific Rim, witha particular focus on the keys to successful deployment and mass marketing. Key areas to be addressed willinclude the technical, regulatory, financial, and educational domains. Actual customer applications andexperiences are covered, and the role of cooperative and strategic alliances is analyzed.
2.2.1.3 Video on Demand Without Compression: A Review of the TechnoBusiness Model, Regulation and Future ImplicationsJack AM. Van Der Star, Chairman, Image Systems Corporation, Canada
The employment of frequency reuse, not compression, will make video-on-demand increasingly viable andimportant. The speaker looks at a typical demand video enterprise; how demand video applications willconform to regulatory environments; and the impact demand video will have on various industries such as filmproduction and television. A demand video implementation strategy is put forward for different parts of theworld.
3
2.2.1.5 Optimization of VSAT Systems and Application in Asia-Pacific AreaKazuyoshi Miyoshi, Manager Communication Systems, Systems Engineering Center,Mitsubishi Electric Corporation, Japan
The speaker presents a VSAT system optimization method, looking at how costs may be minimized in the useof star-shaped VSAT networks. The costs of developing domestic VSAT systems in the Asia-Pacific regionare analyzed, as are cost factors of introducing codec technologies.
2.2.2 ECONOMICS OF TELECOM DEVELOPMENT
2.2.2.1 The Nexus Between Telecommunications Technology, TelecommunicationsRegulatory Policy, and Labor Law and its Effect on the Division of Labor inInformation EconomiesMeheroo Jussawalla, Research Associate, Institute of Culture & Communications, East-WestCenter and Mark D. Lofstrom, USA
Telecoms technology and regulatory flexibility are at the heart of national economic development. But theconnections between new technology, regulatory poliry, national labour legislation, and the division of labourare not well understood. The presenter attempts to forge the links between these often conflicting imperativesby comparing labour policy in selected Asia-Pacific countries in the context of national telecoms developmentporgrams. Australia, New Zealand, Singapore, Hong Kong, Thailand, and the Philippines are analyzed andcompared.
2.2.2.2 Business, Legal, and Technical Implications of the Proliferation of GlobalData Communications NetworksHyung-Min Michael Chung, Professor, Department of Business Analysis and Research,Graduate School of Business, '1 zxas A & M University and Tee Ee Tan, Systems Analyst,Anderson Consulting, Malaysia
The speaker examines business, legal, and technical issues in the application of global data communicationnetworks. Diverging standards adopted by different countries result is substantial costs in money, time, andpersonnel. While all agree harmonization is vital, the burden to create industry standards devolves upon theCCITT and its regional counterparts. The speaker analyzes new avenues of cooperation in this area.
2.2.2.3 New Multilaterally Agreed Rules For International Trade In ServicesRaymond Krommenacker, Counsellor, GATT, Switzerland
The speaker analyzes the latest developments in the Uruguay Round of the GATT, with a particular focus onthe General Agreement on Trade in Services (GATS). The success or failure of the GATS has massiveimplications for all Pacific hemisphere countries, and especially in the telecommunications industry.The speaker provides a personal view in the context of his expertise as Counsellor at GATT headquarters.
2.2.2.4 A Comparative Analysis of Governance Costs for Information TechnologyRuchadaporn Lcrtphokanont, Policy and Plans Analyst, National Economic and SocialDevelopment Board, Royal Government of Thailand and A. Lee Gilbert, Senior Fellow,Information Management Research Centre, Nanyang Technological University, Singapore
International transfers of technology involve exchanges between organizations based in sovereign states,influenced by domesitc antitrust, contract, liability and other policies, in addition to a host of other factors.These domestic factors, combined with the imperatives of international law, determine the economic and socialimpact of telecoms technology transfers. The speaker presents a new perspective, based upon recent research,on the transaction costs of technology transfers.
2.2.3 STANDARD BEARERS AND NEW APPLICATIONS
2.2.3.1 Standards and Convergence: New RealitiesDnsid Allen, Fellow, Harvard University, Kennedy School of Government, USA and JohnGilbert, Principal, John A. Gilbert & Associates, Canada
The convergence of telecommunications, information technology and broadcasting around multimediaapplications adds complexity to the essential participation of users in the evolution of standards fortelecommunications and related IT products and services. The speaker outlines the role of innovation anduser influence in an ideal standardization process. Recent international standardization activities are reviewed,and future scenarios outlined.
2.2.3.2 European TelecommunicationsNew DimensionsL Schnurr, Professor and Clnir, Telecommunications System, Anglia University and F. Ask,Deputy Director, European Telecommunications Standard Institute, United Kingdom
The evolution of the European telecommunications environment harbours a great impact for developmentsin the Pacific hemisphere. The speaker sets out the principal components of the new European telecomsworld, discusses the role of regional and national regulation processes, and places in context the revisedtechnical and regulatory role of standards and how they come to be.
2.2.3.3 Joint Planning for Global Virtual Network Services to Accelerate Multi-National DeploymentRaymond Butkus, Director, International Business Services, AT&T, USA
The presenter summarizes the progress to date of the Global Virtual Network Services Forum (GVNS), whichcomprises 30 international telecoms carriers from 22 countries. The GVNS Forum was initiated by AT&Twith the purpose of fostering the multinational interconnection of Global Virtual Networks. While it is notmeant to supplant existing standards bodies, it may put forward proposals to be submitted to standardsorganizations.
2.2.3.4 GSM, Intelligent Networks & Personal CommunicationsHans Dicmcl, Director, Market Development & Marketing Cellular Networks, NorthernTelecom Europe Limited, United Kingdont
The speaker addresses the evolution of current and future GSM standards in the Asia-Pacific, Europe, andNorth America, focusing on the relationship between GSM and intelligent networks. GSM possesses severaladvantages, and is described as a total network specification.
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2.2.3.5. Application of GIS Technology to WirelessChandan W. Seernani, Senior Technical Consultant, USA
In a competitive cellular environment, key differentiating factors include quality of service, customer care,responsiveness to problems, timely billing, attractive pricing, enhanced services, network reliability, and reducedfraud. Applications based upon Geographic Information System (GIS) technologymay assist in inany of theseareas, and the speaker outlines how GIS operates and reports on results of GIS applications.
2.2.4 DISTANCE EDUCATION TECHNOLOGY AND EVALUATION
2.2.4.1 The Strategic Function of Educational Technology EvaluationJean-Claude Marot, Head of Department, IDATE, France
Several European countries, most notably France, have seen a rapid increase in the number of advancedtelecoms applications in the fields of training and education. The speaker looks at the effectiveness of theseprograms for users, and reviews the European Commission's incorporation of a detailed evaluation processwithin new distance education programs.
2.2.4.2 Computers and Telecommunications for Distance EducationR. William Mau le, Assistant Professor, Department of Organizational Studies, University ofSan Francisco, College of Professional Studies, USA
The presenter discusses an operating structure for new telecoms services utilizing computer networks to deliverdistance learining programs. The system differs from traditional computer-delviered education in a variety ofinnovative ways, and the network serves as an inofrmation routing and processing mechanism through whichstudents, instructors, or employers may accommodate specific industry and individual interests.
2.2.4.3 The Contribution of Distance Higher Education to National Development inPacific Island CountriesHayato Yamanaka, Associate Professor & Project Coordinator; TOSHIO KOBAYASHI,Professor, National Institute of Multimedia Education, Japan; and MICHAEL R. OGDEN,Instructor & Research Associate, Center for Pacific Islands Studies, University of Hawaii atManoa, USA
The presenters review the success of the satellite-delivered distance education programs of the University ofthe South Pacific. Japan's National Institute of Multimedia Education (NIME) has collaborated with USPto evaluate the impact of these programs, and the presenters discuss their results against the background ofnational development aspirations in the Pacific Islands, the potential applications of satellite instruction, andwhat role advanced countries such as Japan may have in new distance education applications.
2.2.4.4 The Georgia Vocational Education Network: Training, Economic, andTechnical ImplicationsEric N. Barnhart, Director, Communications Laboratory, Georgia Tech Research Institute,USA
The Georgia Vocational Educational Network is a response to the imperative of integrating Georgia's ruralpopulation into the global information economy. The speaker discusses the creation and development of thisprogram, desired services and benefits, and the expected results. This unique program works through theGeorgia Centre for Advanced Telecommunications Technology, a university-government-industry partnership.
2.2.4.5 First Steps in Multimedia Telecommunications: User Views of ISDN forEducational DeliveryLinda Harasim, Associate Professor, Communication Department, Simon Fraser University,Canada
The speaker describes the experiences of an ISDN Distance Learning Trial held in Vancouver during 1991-92.As a pioneering application, the project poses important questions about the impact of new technologies uponteaching and learning. Also studied are the critical success factors of the project, lessons of design andimplementation, and how well instructors and students adapted to these new technologies.
2.2.5 ISDN EXPERIENCES
2.2.5.1 NTT's Four-Year ISDN Experience and Future of Japan's MarketKoichi Nobukuni, Manager and Fumihisa Samba, Assistant Manager, ISDN PromotionDepartment, NTT Corporation, Japan
The presenter discusses NTrs four-year experience in developing ISDN service and the issues presently facingNTT, as well as efforts to expand the market through the provision of new service offerings. NTT's contractedlines now exceed 150,000 across Japan. INS-Net is now expected to move from the introductory phase to the"take-off" phase as the service is commercially promoted.
2.2.5.2 ISDN Compress Video - The Logical Next StepJohn F. Archdeacon, Branch Chief, IRMS, Pacific Zone, General Services Administration,USA
The speaker's organization is a leading user of videoconference services. The presentation describes extensivetests of dial-up and reservation videoconference systems using a 56 Kbps circuit, Basic Rate Interface (112Kbps) or T-1 facility (112 Kbps - 1.5 Mbps). Also evaluated is the Px64 Video Coding Standard. The goalof these efforts is to achieve a high use of videoconference facilities at the lowest possible cost.
2.2.5.3 An Evolution Strategy Toward Digitalized Inter-exchange Network Structurein Seoul Metropolitan AreaJcong -Wook Kim, Director, Department of Project Development and Hee-Soo Alm,Executive Vice President, Korea Telecom International, Republic of Korea
The digitalization of a large metropolitan network has been best achieved through an underlying architecturebased upon a double-hub with only tandem-routing, according to the speaker, who describes the developmentof digitized double-hub architecture in Seoul - one of Asia's largest cities
2.2.5.4 Realization of EDI Message Transfer of an MHS System Using ISDNHaruhito Yamaguchi, Yukio Saito, Yoshikazu Tanaka, NTT Network Systems DevelopmentCenter, Japan
Since ISDN service was first introduced in Japan in 1988, various applications and devices for ISDN datacommunications have been developed. The speaker discusses one specific technical application for EDI use,including how to utilize and opitmize the functions of an MHS system on transferring EDI messages.
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2.2.6 THE CONVERGENCE OF WIRELESS TECHNOLOGIES: SOCIAL ANDREGULATORY IMPLICATIONS
2.2.6.1 The Wristwatch as a Personal Communications DeviceHiroshi Komatsu, President, SEIKO Telecommunication Systems, Inc.; RYOICHI NOROSE, GeneralManager of SEIKO Corporation; and STEVEN SYMONDS, Vice President of Business Development forSEIKO Telecommunictions Systems, USA
PCS - personal communications service - is the current "hot" topic in wireless communications. The speakerlooks at the Seiko Receptor "message watch", a mass-market wristwatch PCS unit offering personal messagingandf a host of information services. This device is seen as the harbinger of a new generation of PCSequipment.
2.2.6.4 The Expansion and Liberalization of Mobile Telecommunications in KoreaYong Son, Professor & Dean; Sang-Chul Lee; and Juneil C. Ryee, Graduate School of MassCommunication, Chung Ang University, Republic of Korea
The presenter analyzes the situation of mobile telecoms services in South Korea. The Korean mobilecommunications sector has grown at an unparalleled rate in recent years, and the speaker reviews theestablishment of competitive mobile systems in Korea and how the mobile communications environment isexpected to perform through the rest of the decade.
2.2.6.5 Wireless Communications and Personal FreedomPhilip Spector, Partner, Paul, Weiss, Rifkind, Wharton & Garrison, USA
Does PCS imply personal freedom or an invasion of privacy. The speaker strongly advocates the former view,outlining PCS as a "liberating" technology for individuals. Constraints of time and place will become irrelevantto communications. Innovative companies are promising to integrate wireless voice and data communicationsover seamless networks.
2.2.7 REGIONAL SATELLITE SYSTEMS
2.2.7.1 PEACESAT: A Pacific Island Users Perspective on Searching for a SatelliteWilliam Cooperman, PEACESAT Program Manager; Dennis Connors, AssociateAdministrator, Office of Telecommunications Applications; and Charles Franz, NTIA USDepartment of Commerce, USA
The speaker presents a progress report on satellite activities in the Pacific region, based upon his PTC'92presentation on "Communications Satellites in the Pacific Islands". This overview presentation presents acomparative perspective, harnessing newly-released figures from the IFRB, US FCC, and contact with satelliteoperators.
2.2.7.2 Unicorn: Moving into AsiaSteve Collin, President and Chief Operating Officer, Unicorn Satellite Corp, USA
The speaker introduces the private satellite ventures of Unicom Satellite Corporation, and its plans to providean alternative to regional and Intelsat satellite services. The evolution and development plaits of Unicorn'sactivities in the Asia-Pacific region arc also discussed.
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2.2.7.3 The Rise of Competing Satellite Systems and the Fall of the INTELSATMonopolyShirley S. Fujimoto, Partner and Marc Berejka, Associate, Keller and Heckman, USA
The presenters review the rise of a competitive environment in the international satellite services market,review the history of Intelsat, and look at the future of the Intelsat system in the context of a highly-competitive satellite world. Particular attention is paid to substantive and far-reaching conculsion about theinternational satellite market.
2.2.8 WARC'92 RESULTS AND THE FUTURE OF ITU
2.2.8.1 Robert M. Frieden
The recently concluded World Administrative Radio Conference (WARC-92) provides a view of the NewTelecommunications World Order" as old alliances and paradigms dissolve. The means by which nations agreeon spectrum allocations and service definitions increasingly will depend on whether and how advocates showbenefits to developing and non-alinged nations. The speaker reports on general and specific outcomes ofWARC-92, and possible future scenarios.
2.2.8.2 WARC92 and Future ConsiderationsRichard E. Butler, AM, Australia
WARC'92 has set the framework for many innovative and new technology applications as well as expandedservices and radio communications uses. New services include an array of mobile services, includingapplication of low earth orbit (LEO) satellites with hand-held telephony. Digital audio broadcast will alsosoon be a reality, as will film quality HDTV. The speaker, the former secretary-general of the ITU, willaddress the impact of new L and S band allocations.
2.3.1 INNO V.k1TVE APPLICATIONS
2.3.1.1 Multimedia Presentation System using ISDNYouichi Kihara, Senior Research Engineer; Yoshihiro Shimazu, Research Group Leader andYoshihiro Shimokawa, Research Engineer, Network Information Systems Laboratories, NTT,Japan
The speaker describes an experimental on-line multimedia presentation system that provides multimediainformation consisting of sound, full-colour still pictures, subtitles, and pointing information via N-ISDN.The design and features of the system are analyzed, and the applications of the multimedia presentation systemto karaoke are illustrated.
2.3.1.2 "Project Lindbergh": Gateway to Public Information NetworkingScott Morgan, Executive Director, Southwestern Bell International Development, USA
"Project Lindbergh" is a unique information age development under way in the city of St. Louis. The speakeroutline how the project developed as St Louis has evolved as a "Digital City" using fibre optics, SS7, ISDN,broadband ISDN, packet switching, SONET, and Metropolitan Area Network (MAN) technologies. Thespeaker explains the revolutionary features of this project, and how it adapts to changing customer needs andtechnology trends.
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2.3.1.3 Educational Models for Virtual EnvironmentsBruce Long, Doctoral Candidate, Teachers College, Columbia University, USA
Excessive hype continues to obscure some of the more substantial benefits of new developments intelecommunications, multimedia, and the human-computer interface. The presenter reviews current researchin virtual reality and its application on how we learn and how we structure knowledge. New technologiesprovide new opportunities for more equitable and comprehensible access to information and education, andis less elite-oriented than print-based education.
2.3.1.4 Broadband Delivery through the Last MileReg A. Kaenel, WavePhore Inc., USA
The speaker illustrates the techniques of transparently piggy-backing high-speed data over television signalsfor the purpose of overcoming access problems in the local loop (the "last mile"). Delivery of data in a user-friendly form requires high-speed telecom infrastuctures - but this capacity is not required in the otherdirection. Hence, by using a newly-developed multiplexing system, high-speed data can be deliveredtransparently on top of TV signals, showing that broadband local distribution need not wait for technologicalbrakthroughs.
2.3.2 SERVICE CONSEQUENCES
2.3.2.1 The Marketing Challenges of Telecommunication Services in ThailandPrateep Thirati, Chief, Corporate Marketing Section, Telephone Organization of Thailand,Thailand
The speaker provides a comprehensive review of Thailand's telecommunications infrastructure, policy, anddevelopment. Thai economic growth averages 11.7% per year, and telecoms development is at the heart ofthis tremendous growth. The speaker outlines current government policies, the development of private sectorplayers, the changes to TOT (Telephone Organization of Thailand) and CAT (Communications Authority ofThailand), and the scope for other investors in the Thailand's massive telecoms development program.
2.3.2.2 Telecommunications and Urban Development in the Pacific Rim: A TeleportProposal for HongkongGrant D. Hume, Post-Graduate Student, Faculty of Architecture, University of HongKong,Hong Kong
Teleport development is, in many ways, an embodiment of how telecoms is central to "city building" in theAsia-Pacific region. The speaker outlines Hong Kong's use of telecoms as the economic base of buildingcompetitive advantge, and how the development of a teleport harnesses the advantages of telecomsdevelopment with the requirements of modern-day urban planning and urban social theory.
2.3.2.3 Maximizing Revenue for Inmarsat SignatoriesJames Kemp, Director of Research and Development and Jack Bright, Regional SalesManager, Mobile Satellite Systems, Scientific-Atlanta, Inc., USA
Why do less than one-third of Inmarsat signatories have Coastal (Land) Earth Stations (CES/LES)? Thespeaker analyzes this problem and details new digital standards that offer new opportunities to Inmarsatsignatories. New low-cost CES/LES and Mobile Earth Stations (MES) are reviewed, as are expected revenuestreams.
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2.3.2.4 Convergence of Telecommunications and Crime: Liability for Toll Fraud inthe United StatesMartin A. Mattes, Partner, San Francisco Office, Graham & James in association withDeacons/Sly and Weigall, USA
Toll fraud is an issue of vital importance to telecom carriers - but it is not often analyzed. The speakerreviews the enormous increase in the risk and incidence of toll fraud in the USA, and recent attempts tointroduce legislation to shield customers from liability. But current efforts to control toll fraud are only abeginning in attempts to address this crisis. The speaker maintains that fair resolution of these issues mayhave an impact on the viability of competition in certain areas.
2.3.2.5 Service Consequences: Evaluating the Role of InsuranceWilliam L Mayo, Managing Director, Willis Corroon Inspace, Inc., USA
Satellites and launches require some of the most complex, risky, and expensive insurance policies ever issued.Global satellite insurance is largely provided by brokers, who provide the risk evaluation for underwriters.This giant, and hugely expensive, topic is discussed with an analysis of where satellite insurance premiums areheaded, the unique aspects of the Intelsat VI-F3 recovery mission policy, and what underwriters look for inrisk assessment.
2.3.3 TELCO/CATV ISSUES
2.3.3.1 The Roles of Copper and Fiber in the Evolution to Broadband: A NetworkPlanning PerspectiveThomas M. Super, Vice President and Edward A. Walvick, Executive Director and NYNEXScience & Technology, Inc., USA
Much has been discussed about the future of broadband. The speaker looks at some of the considerations thatmust be taken into account in dealing with early service demand. Using fibre now makes economic sense forurban business districts. It remains possible to employ the existing copper network to introduce broadbandservices before it is economically viable to move to fibre. How copper can "bridge the gap" is explained.
2.3.3.2 MAMI: The New Direction of Interactive TVN. Kotani, Research Engineer; J. Kishigami, Senior Research Engineer, Supervisor; N.Sakurai, Senior Research Engineer; and A. Ishikawa, Senior Research Engineer, NTTNetwork Information Systems Laboratories, Japan
The speaker proposes a new system for rendering cable television truly interactive: Multiple Access Movingpicture Information server (MAMI)). The first prototype, MAMI-1, will permit access of any natural movingimage from a single storage system. Extensions of this system are under investigation,such as the concept of"indirect communications" through software-manipulated moving images.
2.3.3.3 Calling All Televisions? The Convergence of the Cable Television andTelephone Industries in the United StatesRichard Goldberg, Senior Associate, Graham & James, USA
Political, regulatory, technological, economic and historical forces have created growing incentives for cableand telephone industries to operate in each other's bailiwicks. The speaker reviews the evolution ofconvergence in the USA, and invesitgates why it is less clear whether direct competition between the cableand telephone industries will he allowed to take place. It is far from certain whether either industry wantsto challenge on the other head-on.
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2.3.3.4 Fiber in the LocalLoop an Alliance Between Telco, CATV and InteractiveMultimedia ServicesThomas A. Reiman, Executive Vice President, Live Oak/Sutter Bay--South Sutter Cable, Inc.,USA
The introduction of fibre into the local loop in not yet widespread :n the USA. At PTC'92, the frameworkfor an alliance between the cable TV industry, the RBOCs, and land developers was introduced. The speakerreports on progress made since then, and how strategic alliances will be the basis for network sophisticationin the 21st century.
2.3.4 TELECOMS TO ENHANCE QUALITY OF LIFE
2.3.4.1 Harnessing Telecommunication Technologies for Enhancing NationalCompetitiveness and Quality of Life: The Singapore IT2000 ProjectBoon Siong Neo, Senior Lecturer and Christina Soh, Lecturer, School of Accountancy andBusiness, Nanyang Technological University, Singapore
The presenters describe the planning process for the Singapore IT2000 project. IT2000 is to identify strategicstrategic business applications by industry sector, and develop a national integrated network to deliver theseapplications and other services. Also outlined is the process by which national consensus has been built tocreat and achieve this massive plan.
2.3.4.2 Propulsion for Activation of Community in the Region with PC NetworkingServicesJunko Fukamizu, Systems Engineer, Fujitsu Limited, Japan
The speaker reviews the progress of a model networking project in Japan: the "Nishinomiya City New MediaCommunity Centre (NMC)". The NMC is a UNIX-based package linking the local citizenry in a state-of-the-art value added networking package. The NMC story illustrates how municipalities can harness new telecomstechnology to buil upon urban strengths.
2.3.4.3 Developments and Application of Telecommunications for EmergencyServices - An Australian PerspectiveGeoff Schomburglc, Principal Engineer-Telecommunications, The Ambidji Group Pty Ltd,Australia
Telecommunications and information technology are regarded as essential "tools of trade"by emergency service organizations. Such organizations run the gamut from police, fire and ambulance toair traffic control and rail transport. The speaker reports on the current status of telecom facilities in use byemergency service organizations in Australia and how they are positioning themselves to take advantager ofconvergence and deregulation.
2.3.4.4 NTT's VI&P VisionHisao Yamamoto, Senior Research Engineer, Supervisor, Network Architechture Laboratory,NTT Telecommunication Networks Laboratories, Japan
The speaker introduces the aims and objectives of NTT's proposed "VI&P" vision of the futurecommunications environment. VI&P stands for Visual, Intelligent, and Personal. The goal is seamless serviceover broadband, intelligent ISDN networks. The speaker looks at recent and future development undertakenin Japan towards that goal.
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2.3.5 BROADBAND TECHNOLOGY
2.3.5.1 An Implementation of Common Channel Signalling Capabilities on TDX-1Switching SystemSunmoo Kang, Senior Technical Staff; Woonyoung Han, Head of Section; Youndgsi Kim; andHanggu Etahk, Electronics & Telecommunications Research Institute, Republic of Korea
The speaker describes design concepts, system architecture, performance evaluation, and test results of thecommon channel signaling function in TDX-1 switching systems. On the basis of the TDX -1 scheme, a CCSNumber 7 signaling ne work will provide the backbone for Korea's commerical ISDN service, to be launchedin July 1993.
2.3.5.2 Technology Enablers for Residential Broadband Services in Today's LoopEnvironmentRobert W. Lawrence, Technical Director, NYNEX Science and Technology, USA
The presenter provides an insight into the variety of technologies that may be used in the shat term withina telco's copper loop environment to support residential broadband services. Such services range from video-on-demand to flexible distance learning to other multimedia applications. This technology will be incorporatedinto new loop electronics called Asymmetrical Digital Subscriber Lines (ADSL), which will be outlined.
2.3.5.3 Frame Relay and Evolution to ATMMehmet Unsoy, Director, Data PLM Asia/Pacific, Northern Telecom, Japan and KennethG.Hayward, Bell-Northern Research, Canada
Frame Relay is currently deployed actively to support LANs and LAN interworking over Wide Area Networks(WANs). In parallel, there has been extensive standardization and development of Asynchronous TransferMode (ATM) technology and services. The speaker explores the evolution alternatives for the twotechnologies, as well as their interrelationships.
2.3.5.4 Enterprise Networking Using Frame RelayKS. Ram Mohan, Systems Engineer, Network Planning, infonet, USA
The speaker presents a detailed look at frame relay technology and how it can be used as an internetworkingoption for implementing Enterprise Networks (EN), which itself encompasses a wide range of standards-basedtechnologies and netowrking products. In essence, an EN is a single Wide Area Network (WAN) providingan infrastructure for systems interoperability in a multiplatform, multivendor enterprise computingenvironment.
2.3.5.5 ATM Service Node: A Step Toward BroadbandTelecommunication NetworksK. AJdba; S. Iwasaki; H. Fuchigami; NEC Corporation, Japan, K. Kou; and A Arutaki, NECAmerica, Inc., USA
The speaker presents a technical introduction ofan ATM Service Node, a high-speed switching system basedon ATM technology and utilizing broadband. Also reviewed are ATM networking topology, systemimplementation methodologies, and mechanisms to accommodate Frame Relay and SMDS services into theATM backbone network.
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2.3.6 MOBILE SERVICES
2.3.6.1 Japanese Digital Cellular Telecommunication SystemMinoru Tanaka, Vice President, and Yuji Kitahara, Assistant General Manager, NECCorporation, Japan
The speaker introduces the Japanese Digital Cellular System issued by the Research and Development Centrefor Radio Systems in Japan (RCR). In Japan, the 1.5 GHz frequency band (24 MHz bandwidth) has beendeveloped for digital cellular telecommunication systems to accommodate the high subscriber demand of themobile communications domestically.
2.3.6.2 The Evolution of Wireless: Meeting the Mobile User's NeedsEric F. Ensor, Assistant Vice President - Worldwide Wireless Strategy, BellSouth Enterprises,Inc., USA
The presenter will address the ongoing evolution of wireless communications into personal communicationsservices and the effect of user needs on that evolution. Various technological developments will be covered,but the focus will centre on what is being done to assess user needs for future wireless communications.Data from several ongoing US PCS trial will be reviewed, as will some innovative future uses of mobilecommunications in Latin America.
2.3.6.3 Digital Cellular Opportunities in the Pacific RegionGary Cannalte, Senior Technical Consultant, Motorola, Inc., USA
The Asia Pacific region knows there is no "law" stating that terrestrial wired networks are obligatory fortelecoms development. Development may be better served by the use of Wireless Local Loops (WILL) inplace of copper .) connect land network phones to the PSTN. This is one example of new technologies andnew applications put forward by the speaker's broad overview of exciting new trends in the Asia-Pacific region.
2.3.6.4 CELSA'T's Hybrid Personal Communications SystemDavid D. Otten, President and CEO and Albert J. Mallinckrodt, CELSAT, USA
The speaker describes the first hybrid (satellite and ground based) cellular telephone system to be proposedto the US Federal Communications Commission (FCC). The system described proposes to cover vast areasat low cost, using a small handset and employing satellite delivery in remote areas and ground cells in urbanareas.
13.7 SATELLITE SERVICES
2.3.7.1 Transponder Capacity in Asia - An UpdateAtrew Jordan, Marketing Manager, Asia Satellite Telecommunications Company, Ltd., HongKong
Why have satellite become so popular in Asia? The speaker "steps back from the glamour and hype" to askhard questions about the future of satellites in the region and to analyze the benefits derived from satellites.Satellites have proven themselves to be the best way to quickly, efficiently and affordably develop or enhancea telecommunications and broadcasting infrastructure.
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2.3.7.2 International Digital TV Service Via INTELSATEdward A. Faine, Director, Systems Planning, COMSAT World Systems, USA
The speaker describes the various international field trials and commercial applications of digital televisiontransmissions conducted over the Intelsat system. Summary results of laboratory tests are presented,illustrating the transitional stages in switching satellite TV transmission over from analogue to digital formats.
2.3.7.3 Emerging Technologies and Future SatellitesLinda M. Rankin, Vice-President, Business Development and Abdul FL Lakhani, NetworkPlanning Specialist, Fundamental Planning, Telesat Canada, Canada
The presenter looks beyond the year 2000 to the next generation of satellites. It is clear that satellite serviceproviders are becoming increasingly aware of market needs as well as the initiatives put forward by terrestrialnetwork operators. A variety of new technologies and new applications for satellite technology are reviewed,showing what is needed to ensure satellites have a role in the communications networks of the future.
2.3.7.4 Papua New Guinea: A New Satellite Telecommunications NetworkEdward Walter Triebell, Regional Sales Director, Network Systems Group, Scientific-Atlanta,Inc., USA and Steven Gagau, Executive Manager, International TelecommunicationDepartment, Post and Telecommunications Corporation, Papua New Guinea
The speaker describes the implemenation of a new satellite-based telecommunications infrastructure in PapuaNew Guinea (PNG), where the limitations of existing telecoms networks, geographical diversity problems, andlimited telecommunications budgets were all overcome. Among topics addressed are the functionalrequirements of each system, design elements, applications, and benefits of this new system.
2.3.7.5 KOREASAT Technology Development and ServicesHan Hwangbo, Executive Vice President, Satellite Business Group, KoreaTelecom, Republicof Korea
KOREASAT is Korea's "first generation" satellite for communications service. It will play a central role inKorea's 21st Century telecommunications development, asserts the speaker in this presentation detailing theevolution and characteristics of this major new domestic satellite system.
23.8 PRC DEVELOPMENTS
2.3.8.2 Building Telecom Networks to the People's Republic of China - Infrastructureand Services the Hong Kong GatewayFlora tung, Director of International Operations, Hongkong Telecom, Hong Kong
An economic revolution in China has captured the attention of the world's businesses. China, with outsideparticipation, has become the world's fastest growing economy in the world's fastest growing economic region -the Asia-Pacific rim. To support this economic powerhouse, China is modernizing its infrastructure in anambitious program the includes the provision of high quality telecommunications. The speaker reviews stepstaken by Hongkong Telecom and other Hong Kong actors in integrating China into the modern network.
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3.11 APPLICATIONS OF NEW TELECOM TECHNOLOGIES
3.2.1.1 The Evolution of Markets for Multi-Media in CanadaRichard J. Simpson, Director/Assistant Vice-President, Commonwealth of Learning, Canada
What is commonly called "multimedia", the convergence of voice, text, and visual communication throughadvanced computer (digital) technology, provide the foundation for both the "Networks" and "Content"dimensions of the New Media. Based on a recent program of research, the speaker examines the evolutionof markets for multimedia techonolgies, pointing out the main areas of potential growth and the keyinstitutional and public policy issues involved.
3.2.1.2 New Communication Technologies Applied to Services of Social BenefitArturo Serrano, Telecommunications Consultant and Enrique Melrose, Director of Research,Mexican Institute of Communications, Mexico
The speaker describes a major project sponsored by the Organization of American States (OAS) investigatingthe implementation and operation of new communication technologies in rural and other underpriviledgedareas. The project applies innovative solutions to permit the widespread use of these new technologies. Theobstacles are enormous, but the project seeks to involve the population - the "users" - from the outset, andnot impose techonology from above.
3.2.1.3 The Imaging Advantage for Developing CountriesDean Johnston, Senior Vice President, Image Management Division and Jim Hamblin,Managing Director, CBIS International, USA
Over 95% of information continues to be exchanged through paper. Paper-intensive communicationenvironments are particularly prevalent in developing countries. The speaker outline the use of imaging asa solution for this problem, focusing on the benefits of image- and workflow-enabling business applications.
3.2.1.4 Digital Television CompressionRobert M. litter, Senior Vice President, Technology Operations, HBO, USA
Digital video compression is expected to revolutionize the international television delivery environment. Bothsatellites and cable are expected to harness these new technologies, and the speaker reviews his firm's objectiveevaluations of different systems. Deployment of these systems in expected in early 1993, and the speakerreviews how the systems being used were selected, and why.
3.2.1.5 Wireless Evolution in the Asia-Pacific: Not Just a Technology IssueJoanne Molyneaux, Principal, Sequoia Telecom Associates, USA
The presenter will provide a regional overview of the existing wireless infrastructure in the major Asia-Pacificcountries and plans for new services, as well as looking at the underlying key indicators of market potentialfor new wireless services. Forecasts for each Asia-Pacific country will be put forward, showing which are themost likely wireless services and technologies to meet users' needs.
3.2.2 CHALLENGES TO REGULATION, TRADE AND ACCOUNTING RATES
3.2.2.1 The Inequality of Equal Accounting RatesPeter Jackson, Regional Director Asia Pacific, Cable & Wireless PLC, Hong Kong and JohnSullivan, Regional Manager Asia Pacific, Cable & Wireless PLC, United Kingdom
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International accounting rates remain a contentious issue. The presenter seeks to examine the currentinternational rate mechanism, its effect on developing countries, and to propose a variety of innvoativealternatives.
3.2.2.2 The Dynamics and Impact of U.S. Telecom Policy on Accounting Rates andInternational Simple ResaleRobert J. Aamoth, Partner, Reed Smith Shaw & Mc Clay, USA
The speaker examines the impact of the trend toward lower international accounting rates upontelecommunications financing and the development of international resale and IVAN opportunities in theUSA and other countries. Relevant developments within the CCITT, OECD, and in US bilateral relationshipswith Canada and the UK will be reviewed.
3.2.2.3 Technological Change and Incentive Regulation in TelecommunicationsS.L. Jan& J.R. Norsworthy, J. Macdonald, School of Managment, Department of Economics,Rensselaer Polytechnic Inst., USA
The presenters analyze the linkage between the spread of new technologies and the choice of regulatoryinstruments, with a particular focus on price-cap agreements as a type of incentive regulation. Alternativeincentive regulation plans are reviewed as responses to the opportunities and uncertainties created bytechnological change.
3.2.2.4 International Trade and Telecommunications Services: Implications forDomestic Policy and RegulationDebra Slaco, Senior Policy Advisor - Telecommunications, Government of British Columbia,Canada
The speaker addresses the recent developments of the inclusion of telecommunication services as an elementof international trade agreements. The Canada-US Free Trade Agreement was the first internationalagreement to broach the area of services as a "commodity" for trade. The proposals put forth for thenegotiation of the CATS and NAFTA will be analyzed.
3.2.2.5 Monitoring Shifts in Market Share Among Information Industry SectorsUna Mmansfield, Senior Lecturer, Info. Technology & Communication Unit, Faculty ofInformatics, University of Woolongong, Australia and Gatot Mardianto, Staff Engineer, Pt.Industri Telekommunikasi Indonesia, Indonesia
The presenters review the outcome of a special Australian research project desinged to: (a) provide a newapproach to modelling the major information industry sectors, from telecommunications to publishing; (b)indicate the dynamic relationships among the sectors; (c) validate the model by looking at developments insix Australian cities; and (d) using the model to develop a method for estimating the market share of eachinformation technology sector.
3.2.3 RESTRUCTURING TELECOM ORGANIZATIONS
3.2.3.1 Australia's New Telecommunications Regime - A Review of the First EighteenMonthsRaymond Kiley, Senior Associate, Baker & McKenzie, Australia
The speaker reviews Australia's nascent telecommunications liberalization, one year and six months later. Inpart, discussion will focus on AUSTEL's performance as the regulator, how Optus has emerged as the
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competitor to AOTC, and how AOTC has reacted. Also reviewed are the levels of competition for "eligibleservices" following the issue of relevant class licences, and the impact of the introduction of pay television.
3.2.3.2 Knowing What to Ask For: Privatization of Telecommunications After theDigital Revolution Guidelines for the Host CountryRobert A. Reisner, Principal, Putnam, Hayes & Bartlett, USA
The speaker discusses guidelines for host governments to consider in the next wave of privatization oftelecommunication enterprises. To keep pace with the implications of convergenece, host countries will haveto adopt a more creative model for privatization - a competitive privatization model. In the new wave, hostgovernments must become the partners of the new competitors while retaining a perspective on theopportunities that exist in change.
3.2.3.3 Global Telecommunications Standardization in TransitionDavid Lassner, Director of Information Technology, University of Hawaii and MeherooJussawalla, Research Associate, Fast-West Center, USA
The vitally important area of telecommunication standards is considered by the speaker in the context of fourSoutheast Asian nations: Indonesia, Malaysia, Singapore, and Thailand. What is the impact on these growingtelecoms powers of standardization activity, so much of which remains centred in Europe, North America, andJapan? The movement to regional standards organizations may institutionalize the limited involvement ofnon-manufacturing nations, no matter how important they may be in the overall telecoms environment.
3.2.3.4 The Dramatically Different Canadian Telecommunications IndustryJocelyne Cote-o'Hara, President and Chief Executive Officer, Stentor Telecom Policy, Inc.,Canada
Canada's telecommunications environment has changed enormously in the brief 12 months since PTC'92. Thespeaker will describe the full implications of events such as the formation of Stentor from Telecom Canada,the introduction of new federal telecoms legislation, the CRTC decision permitting long-dostance competition,and other new developments. New pulbic policy and technological developments will be outlined anddiscussed.
3.2.4 HEALTHCARE ENHANCED THROUGH TELECOM
3.2.4.1 Medical Applications Through Numeris, The French ISDNClaudino Biquillon, Manager for Asian Countires at the International Directorate, FranceTelecom, France
Some of the most innovative and significant telecoms applications are found in the health and medical servicesectors. The speaker looks at France's model telematics system for centralized medical diagnosis facilities fromanywhere in France.
3.2.4.2 Convergent Needs, Divergent Technology: Nursing Education for RuralPractitionersJ.L Tucker, Dean of Professional Studies and GAIL RAY, Director and Chair of Nursing,Gonzaga University, USA
The speaker describes Gonzaga University's unique and innovative videotape-based distant education program,and how this award-winning system might evolve into a full interactive compressed-video, on-line environment.Such an environment is under consideration by the University for distance education delivery to rural areas.
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3.2.4.3 Multimedia Broadband Communications Health-Care ApplicationsKenneth R. Raymond, Director-Technology Strategies Analysis, NYNEX TelesectorResources Group, USA
The presenter describes multimedia broadband communications and its potential impact on the health careindustry in the USA. He will address the technical and operation aspects of the system, the health care crisis,the overall market, and the results of a NYNEX trial implementation in Boston.
3.2.5 ENTERPRISE NETWORKS
3.2.5.1 Enterprise Networking & National ISDN SynergyJoseph J. Hobbs, Manager-Training & Education, Bellcore Technical Education Center, USA
Enterprise networking (EN) is the term used to define the global information transfer of voice and data signalsof "typical" mid-size and large businesses. The presenter establishes the premise that strong synergy existsbetween EN and National ISDN (NI). The entire telecommunications requirements of this vast enterprisewill be an accumulation of "real world" implementations of PBXs, key systems, LANs, FEPs, applicationssoftware, dumb terminals, protocols, dial-up lines, PCs, and other telecom services.
3.2.5.2 Network Management Technology - A Paradigm for Future Enterprise ControlMark Wall, Vice President, Consultive Engineering and Jeffrey Whitehill, Director of SalesSupport, NYNEX ALLINK, USA
This presentation will first review the major elements which have been developed to facilitate enterprisenetworking (EN) management. These concepts are then expanded to a number of related fields to show theimpact of this technology on the conduct of a wide range of business and other applications. Some of themore striking applications include the intelligent oversight of industry, power generation, transportationservices, and service deliveries.
3.2.5.3 FDDI II Multi-Media LANJohn F. Mazzaferro, Vice President, Sales and Marketing and Alexa A. Dell'acqua, President,JAM Enterprises, USA
The presenters review the Fibre Distributed Data Interface II (FDDI II) multimedia LAN system. FDDI IIis often misrepresented as a faster, larger FDDI, while in fact the systems are quite different and FDDI II sibest viewed as an enhanced FDDI. The technical and performance charateristics of FDDI II are described.
3.2.5.4 The Study of Telecommunication Network Configuration in the GreaterTaipei AreaShan-Hsin Tsao, Chef Research Engineer; Shyang-Ming Lill, Research Engineer; Yeh-ChynHer, Associate Research Engineer; Hong-ling Wang. Associate Research Engineer; Min-Gume Cheng, Research Engineer; Ching-Chir Shyur, ResearchEngineer; and Ying-Ming Wu,Associate Research Engineer, Telecommunication Labs, DGT Taiwan, ROC
This team undertook an evaluation plan of the Greater Taipei telecommunications network, comprising oneof Asia's larger and more dynamic metropolises. Over US$ 10 billion will be invested in new technology andnew network installations. The presenter reviews the results of this monumental study, and the developmentplans to be undertaken as a consequence of its recommendations.
3.2.5.5 Enterprise Networking in AsiaKen Zita, Managing Partner, Network Dynamics Associates, Inc., USA
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Corporate network globalization has been underway for years, but including southeast Asia on the networkmap is new. Thailand, Indonesia, and Malaysia have been "black .1.loles" for private enterprise networks. Thespeaker addresses how countries within the region are cathcing up at great speed, and the dynamics of the newsoutheast Asian enterprise network environment.
3.2.6 DIGITAL AUDIO RADIO
3.2.6.1 WARC'92 and the Implications for Digital Audio BroadcastingRalph Zeitoun, Broadcasting Regulation Branch, Communications Canada, Canada
The digital technology on which computers are based has been applied to audio broadcasting, making itpossible for the first time to receive CD-like quality in the difficult portable and mobile environment. WARC-92 allocated frequency bands for providing digital audio broadcasting services from terrestrial and satellitetransmitters. The implications of the decision reached at WARC-92 for DAB and its implementation arehighlighted by the speaker.
3.2.6.2 DAB Systems for the Western Hemisphere: Satellite System DesignsEdward Reinhart, Telecommunications Consultant, USA
The speaker describes the designs of several satellite digital sound broadcasting (DAB) systems intended eitherfor domestic service within the USA or for US-based regional and/or global service. These systems arecategorized according to their service requirements. The nature of the relationship between the servicerequirements and the regulatory, environmental, and technological aspects of systems design is described.
3.2.6.4 Satellite CD Radio System TradesKlaus G. Johannsen, Senior Scientist, Hughes Aircraft Company and Robert D. Briskman,President, Satellite CD Radio, USA
The search for an economical technical solution for nationwide satellite DAB of 30 digital compact disc (CD)quality music channels to mobile users has led to a dual satellite, single carrier time division multiplex (TDM)transmission system. The technical specification of this system are reviewed by the speaker.
3.2.6.5 United States Satellite Digital Audio Radio ServiceRobert D. Briskman, President, Satellite CD Radio, USA
The presenter reviews a digital audio radio (DAB radio) service to be provided by satellites to automobilesand other mobile terminals within the USA. The proposed service will be by user subscription, withsubscritzrs able to select from 30 channels of CD quality. The system confinguration, technical innovationsand major engineering parameters are presented.
3.2.7 LITFSATS
3.2.7.1 Small Satellites for Mobile and Environmental Data Communications:Effectively Solving Economic, Social and Technological IssuesFulvio Ananasso, Director, Advance Studies and Experimentations Division, Telespazio, Italy
The presenter reviews "small" satellites such as "little" LEOs as an alternative to traditional, large satellites,often exploiting orbital characteristics different from GEO-sats, e.g. circular or elliptical orbits. Mobilecommunications and remote sensing are some of the likeliest applications, according to the speaker, whoenvisages a rapid expansion of systems such as TEMISAT, which is described in detail.
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3.2.7.2 Economics of the New Smaller and Shorter Lifetime GeostationaryCommunications SatellitesJames R. Stuart, Consultant; Randall E Coffey, Senior Systems Analyst, Ball Space SystemsDivision, USA; and Janet Gleave Stuart, Ph.D. Candidate, University of Colorado at Boulder,USA
The speaker compares the characteristics, prices and economics of currently available large, medium, and smallgeostationary (GSO) communications satellites, focusing on specific GSO "light-sats" currently in production.The selection of a proper size and lifetime of a GSO communications satellite for a particular project isaddressed.
3.2.7.3 Export Control: Current Legal and Policy Issues AffectingSatellite and Telecommunications VenturesThomas Crocker, Counsel and Jill Abesbouse Stern, Counsel, Shaw Pittman Potts &Trowbridge, USA
Export controls are an important issue for US-based companies pursuing satellite and telecommunicationsbusiness opportunities in the Pacific Rim, and for their foreign investors, partners, and customers. Thepresenter reviews how fundamental changes in export contrls are occurring which reflect shifts in the globalgeopolitical situation, increased concern about missile proliferation, and the emerging global marketplace forsatellite and telecoms technology and services.
3.2.8 COUNTRY STRATEGIES
3.2.8.1 Convergence, Universal Service and Public PolicyRein P. Mere, Senior Manager, Strategic Planning and Development, KPMG Peat Marwick,Australia
The speaker examines what is meant by convergence and how that relates to the telecommunications andinformation technology industries. The key areas of convergence are indentified and service applicationsreviewed in the context of users and providers. Users have embraced the changes produced by the "cauldronof convergence", but a wide variety of technical, commercial, and public policy concerns remain.
3.2.8.2 Canada Embraces Long Distance CompetitionLaurence J.E Dunbar, Partner, Johnston, Buchan & Dalfen Barristers & Solicitors, Canada
After lenghty debate and amid continuing controversy, Canada's regulator ruled in favour of permitting long-distance competition. The speaker reviewes this landmark CRTC decision, which would permit, among otherthings, one of the world's most liberalized resale regimes. The impact of proposed legislative amnedments willbe addressed, as will the ongoing political and commercial battle over the coompetition issue.
3.2.8.3 Network Interconnect in New ZealandAinsley Van Cuylenburg, Senior Consultant, CLEAR Communications Limited, New Zealand
New Zealand is the most open and competitive of the developed world's telecommunications markets. In sucha liberalized environment, how are interconnection and standard of service guaranteed? The speaker anwersthose questions with a detailed illustration of how network interconnect takes place in New Zealand and hownew entrants may evolve and emerge.
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3.2.8.4 Determining Optimal Supply Level of Switching Systems and Local Cables:An Inventory ModelKyu-Tack Nam, Member of Technical Staff and Bo -Sang Lee, Member of Technical Staff,Korea Telecom Research Center, Republic of Korea
Korea Telecom adopted a "more is better" policy in the 1980s in order to meet Korea's massive and fast-growing telecoms demand. This was successfully accomplished by the end of the decade, and challenge for the1990s is to move from universal service to state-of-the-art systems. The speaker focuses on attempts to findan optimal supply interval and an optimal quantity of switching systems and local cables.
3.3.1 USER PERSPECTIVES
3.3.1.1 Network Management for Users in JapanToru Tsuchiya, Researcher, Institute for Future Technology, Japan
The speaker describes the current objectives of network management in Japan, looking at the changes of users'requrements and implications for network management. As information technology becomes more important,a given organization's distinct computer and telecom network branches will require restructuring, whether thisoccurrs through the creation of a network management section of through out-sourcing.
3.3.1.2 Privacy and Intellectual Property RightsSheila Mcgregor, Partner, Freehill Hollingdale & Page, Australia
An often overlooked issue in the furor over convergence is the area of privacy issues and intellectual propoertyrights. The speaker discusses why laws of confidentiality and intaectual property do not adequately deal withthe privacy of personal data which are amassed. A new approach is called for, and the speaker examines theEuropean Commission's personal data directives as one possible solution. The privacy imlications of newservices such as Caller ID, which is dealt with in contrasting ways - eg, between the US and Australia.
3.3.1.3 Government as a Telecommunications User: Maximising the OpportunitiesTerry Charman, Senior Advisor, Policy, Department of Finance, Australia
The presenter explores some of the issues confronting national governments as major telecom users. Someof the issues include the internal conflict between government as telecom user ana government as telecompolicy-maker; the implications of convergence and new multimedia technologies; the government user as driverof industry; potential benefits to society; and, in Australia's case, the federa-state-local level dimensions.
3.3.1.4 The Politics of Telecommunications Reform in Developing CountriesBen Alfa Petrazzini, Department of Communications, University of California, San Diego,USA
The presenter, winner of the 1992 PTC Research Prize, examines in comparative perspective the politics ofprivatization and liberalization of the telecoms sector in Asia (Malaysia and Thailand) and Latin America(Argentina and Mexico). The central aim of the study is to explore why countries with similar socioeconomicprofiles, trying to implement shared telecom reform goals under similar historical circumstances, achieveddivergent outcomes in their restructuring efforts. The speaker posits that the openness of national politicalsystems suggests an answer.
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3.3.2 BUSINESS STRATEGIES
3.3.2.1 Network Outsourcing: A New Paradigm for Global BusinessGerald W. Thames, President and Chief Executive Officer, Syncordia Corporation, USA
Global network outsourcing has gained widespread interest and attention among multinational customers, andamong major players in the telecommunications industry. The speaker reviews how this option provides analternative to the multinational corporation, which has heretofore been compelled to dedicated increasingpercentages of resources to international network management. The outsourcing concept has been embracedenthusiastically by nusinesses seeking to conserve resources, but the concept remains nevertheless poorlyunderstood. The meaning, goals, and future of outsourcing are outlined.
3.3.2.2 The Small-to-Medium Business Sector and the Increasing Convergence ofTelecommunications and Information Technology: The Hong Kong ScenarioLee G. Lam, Manager, Business Sales Branch, Hong Kong Telecommunications Limited,Hong Kong
The speakers looks at the telecom market characteristics of Hong Kong's small-to-medium business sector,the recent massive telecoms growth of that sector, the relationship with the People's Republic, marketingconsiderations, and the role of the public network provider. This overview of the Hong Kong situation isbased upon a comprehensive case study.
3.3.2.3 International Telecommunications Is Shifting Paradigms: How Will It AffectYour Business?Gregory C. Staple, Communications Lawyer, Koteen & Naftalin, USA
A new telecom service paradigm is emerging globally. Traditional "Heavy" carriers are country-specific,historically enjoyed monopoly status, is essentially sovereign on its own territory, and participated bilaterallyis setting tariffs, etc. It has been challenged and undermined by new "Light" operators that may provideinternational service through resale, rerouting, and reprogramming the offerings of the Heavy carriers. "Light"carriers are especially characterized by their harnessing of new technologies, and the speaker details theirfuture and how they will influence the future global telecommunications regime.
3.3.2.4 Study on the Measurement of Economic Benefits of TelecommunicationProject in the Developing Countries - Proposing New MethodMikio Datum, Senior Researcher, InfoCom Research, Inc., Japan
The speaker puts forward a thorough and comprehensive study of the effects of telecommunicationsdevelopment on developing countries. The influences of telecoms are omnipresent and become more profoundas telecoms services spread. While the benefits of telecoms are accepted as a truism within the industry, thisstudy is particularly valuable in the strong empirical research verifying these benefits.
3.3.2.5 The Software Export Industry of Developing CountriesGeorge Lissandrello, President, Information Products International, USA
The United Nations International Trade Centre has sucessfully undertaken several missions focusing ondeveloping country telecom and information technology exports to developed countries. The speaker looksat a number of these increasingly numerous success stories, such as Philippine software exports to NorthAmerica and Sri Lankan exports to Australia and Japan.
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3.3.3.3 Political Challenges to the Globalisation of Public TelecommunicationsOperatorsYoshil:o Kurisaki, Administrator, Organisation for Economic Co-operation and Development,France
Globalization of the economy and the liberalization of telecommunications have motivated major publictelecommunications operators (PTOs) to extend their business activities in the international sphere. All thePTOs in major economies are becoming competitive with one another. The speaker looks at the rising policyissues that are not covered by the framework of existing telecommunications policies.
3.3.4 TELEWORIC/TELELEARN
3.3.4.1 Tips, Tricks and Techniques for Trouble-free TeleworkGil E. Gordon, President, Gil Gordon Associates, USA
For all the discussion about telework at past PTC meetings, precious little time has in fact been devoted tothe practical implementation of telework within organizations. The speaker addresses this issue with a seriesof checklists and guidelines, and puts forward the managerial challenge of advancing this effective and efficientapplication of telecoms technology.
3.3.4.2 The Tri-Centre Project: Action Research and the Development of a NationalTele-educational Network in New ZealandJohn Tiffin, David Beattie Professor of Communications; Lalita Rajasingham, Chairperson,Dept. of Communications; and Anthony J. Pennings, Senior Leturer, CommunicationsStudies, Victoria University of Wellington, New Zealand
The presenters review the ongoing results of the Tri-Centre Project at the Communications StudiesDepratment of the University of Wellington, a research project leading to a national telelearning infrastructurethoroughout New Zealand. This project offers a tele-learning "virtual classroom" environment, engaginglecturers and students.
3.3.4.3 Utilization of Interactive Video Conference Systems for Teaching English inAustralia and JapanYoko Fujii, Associate Professor and Masako K. Hiraga, Associate Professor, English andLinguistics Faculty of Liberal Arts, The University of the Air, Japan
The speaker reports the results of a project on the use of an interactive videoconference system to teachingEnglish as a foreign language, jointly undertaken by Japan's University of the Air (UA) and the Universityof New England, Australia. The project has indicated that face-to-face instruction by a low-bit rate videoconference system is a viable alternative to direct classroom teaching.
3.3.4.4 Global Teaming: Meeting the Challenge of Global Business with Help fromTelecommunications and Information Technology and a Lot of ManagementSavvy!Pamela J. Johnson, Senior Consultant, Organization Consulting Group, Digital EquipmentCorporation, USA
Telecommunications and information technology can he used to manage widely-dispersed organizations. Thespeaker outlines her group's experiences with "teams" assigned to a given project and linked bytelecommunications. While such teams arc a key means of facilitating global business, the challenges of
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geography, culture, functional specialization, etc., are not to be underestimated.
3.3.5 NETWORK MANAGEMENT
3.3.5.1 Bandwidth On Demand Metered ServicePaul A. Stem, COMSAT World Systems, USA
Heightened competition and growing global interdependencies are causing telecommunications managers toseek operating methods that enhance efficiency and profits. COMSAT is developing a Bandwidth-on-Demandservice to help firms achieve these goals.
3.3.5.2 Effects of the NPG in Constructing a Private NetworkTakashi Fujimori, System Engineer, Corporate Network Engineering Department, BusinesNetwork Systems Division, Fujitsu Limited, Japan
Private networks are increasingly used to meet company telecom requirements. Using the example of a largeJapanese insurance company, the speaker details the construction and implementation ofa private networkusing Network Planning Guidelines (NPG).
3.3.5.3 Broadband Node Control Architecture for Multimedia ServicesHisashi Manabe, Planning Manager and Tatsuhiko Yamazaki, NEC Corporation, Japan
The speaker looks at call processing capabilities for a wide range of varying loads on an ATM-based broadbandnetwork. The focus is not on bandwidth but on the number of calls carried over the broadband network. Thespeaker provides technical analysis and background.
3.3.6 CULTURE AND COMMUNICATION
3.3.6.1 Art and Technology: Bridges to a Multicultural SocietyJoyce M. Gattas, Dean, College of Professional Studies and Fine Arts and John M. Eger,Director, International Center for Communications, San Diego State University, USA
The speaker describes the current use of multimedia technology in the field of arts education; explores thepotential for using art and technology to increase multicultural understanding; and suggests new uses oftelecommunications to provide distance learning as well as a new context for art appreciation in the Pacific.
3.3.6.2 Social Impact of Cellular Telephone Usage in HawaiiDineh M. Davis, Assistant Professor, Department of Communication,University of Hawaii at Manoa, USA
A unique situation in a unique place, concludes the speaker in her survey of the social impact of cellulartelephone use in Honolulu. Many parts of the world have introduced legislation to limit the use of cellulartelephones in motor vehicles. Honolulu's traffic environment, characterized by congestion, high volumes andslow speeds, suggests that the situation might differ from the accepted norm. Nevertheless, over a quarterof cellular phone users surveyed in this study think that cellular phone use while driving is unsafe.
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3.3.6.3 Imparja Television Pty Ltd - Australia's Aboriginal Owned CommercialTelevision CompanyLorraine Liddle, Solicitor, Aboriginal Legal Aid Service and Jim Wilkinson, Representativeof the Aboriginal and Torres Strait Islander Commission, Australia
The speaker describes the hisotry, ownership and structure of the Imparja Television company, an Aboriginal-owned private satellite TV service to Australia's "central zone". Imparja's first four years are assessed, as areits future planse to add enhanced communications services to the television service. From a technical as wellas a cultural perspective, Imparja is a unique and innovative broadcaster.
3.3.6.4 Telecommunications Applications for Education and Rural Development: AComparison of the Australian Outback and the Canadian NorthHeather E. Hudson, Director, Telecommunications Management and Policy Program,University of San Francisco, USA
The presenter examines the use of telecommunications technology for education and development in theAustralian Outback and in Arctic and Subarctic Canada. Comparisons of the two regions are based upon theshared sparse population, difficult terrain, and significant aboriginal populations. The study is based onresearch carried out at Australia's CIRCIT during 1992.
3.3.7 MOBILE SATELLITE SERVICES
3.3.7.1 The Role of Globalstar, A Satellite-Based Personal Communications Systemin the Wireless RevolutionRobert Wiedeman, Vice President Engineering; Loral Qualcomm Satellite Systems, USA
The speaker describes the space segment implementation and other aspects of the Glob alstar system.Globalstar is not a bypass network but rather a system meant to fulfill currently unmet tele-corns needs,complementing the existing network. Globalstar utilizes two low-earth-orbit (LEO) stallites to provide globalmobile voice and data services to and from hand-held and mobile user terminals.
3.3.7.2 Societal Benefits of Global Personal CommunicationsDurrell W. Hillis, Corporate Vice President and General Manager, Motorola Inc., SatelliteCommunications, USA
Europe, North America, Japan, and parts of Southeast Asia have been at the forefront of the "wirelessrevolution" in personal communications. Yet over two-thirds of the planet does not have adequate telecomsof any kind. The speaker shows how the proposed IRIDIUM global personal communications network willaddress the problem of global connectivity, even in the most remote parts of the world. IRIDIUM will permitmany countries to "leapfrog" several stages of telecoms development and harness the benefits of telecoms muchearlier than originally envisaged.
3.3.7.3 TAOS, a New Low-Cost Mobile-User LEO Satellite Network for Positioningand MessagingJean-Jacques Bloch, Business Development Manager, Aerospatiale, France
The presenter describes a new worldwide mobile telecommunications satellite system, S80, dedicated to theprovision of mobile user position determination and message distribution. The network will be fullyoperational by the late 1990s and will include five low earth orbit (LEO) satellites. A major featur of thesystem is its relatively low implementation cost, which will translate into low user fees.
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3.3.7.4 OrbcomMartin Deckett, Vice President International Development, OrbitalCommunications Corporation, USA
The speaker describes the ORBCOMM system, a low cost, satellite-based mobile communications systemwhich provides data messaging, emergency alerting, and position determination and reporting. ORBCOMMservices are reviewed, and how this system plans to expand internationally beyond its US base.
4.1.1 SOCIO/CULTURAIIECONOMIC CONCERNS
4.1.1.1 Telephone Development Project for Valle Del Cauca State, Colombia, S.A.Fernando Gar= Uoreda, General Manager, Empresa Regional de Telecomunicaciones delValle del Cauca S.A., E.R.T., S.A., Colombia
The speaker provides an overview of telecommunications development in Colombia, from regulatory, technical,and regional perspectives. Colombia's telecoms development has been at the heart of the country's economicdevelopment, and the recent liberalization of the country's telecoms structure is seen as a harbinger for futuregrowth.
4.2.1 MARKETS FOR SERVICES
4.2.1.1 Personal Communication Services Now That I can Have Them, Why Do IReally Want Them? And Thoughts on the Future of PCS in the MarketplaceBrad Baxter, Project Manager-Business Development, U.S. Intelco Networks, Inc., USA
The speaker presents an objective overview of the future of personal communications services (PCS) in themarketplace by describing how the service is viewed by PCS providers, examining how it is being received byPCS customers, and comparing its debut to those of other technological advancements. Will PCS simply filla niche market, such as cellular and pager users? Will it become the communications mode of the future, orwill it be remebered only as a comic-book curiosity?
4.2.1.2 New Telecommunications Services and Network Impacts - Forecasts ofMarkets and TechnologiesLawrence K. Vanston, Partner, Technology Futures, Inc., USA
The impact on the telephone network of new services will be tremendouc and widespread. The speaker depictshow investment patterns that are both economical and responsive to customers must match the adoption ofnetwork technology to the market adoption curves for narrow-, wide-, and broadband services. Forecasts ofnetwork adoption for key technologies are compared to the market forecasts.
4.2.1.3 Competition for Electronic Superhighways in the PacificE. Jean Bishop, Lecturer, University of Queensland, Australia
The level of global telecoms activity is now such that we may speak of telecoms "superhighways" spanning theglobe. These highways link not just major commercialk centres, but harbour the potential to link the wholeworld. The speaker provides a broad overview of the evolution of this scenario, and the spread of globalnetworking to the Pacific area.
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4.2.1.4 The Market for Multimedia Distance Education for Corporate Training inJapan-US Business & the Management of Information TechnologyLarry R. Cross, Vice President for Academic Affairs, Japan-America Institute of ManagementScience, USA
The speaker provides a comprehensive review of literature on international distance education cost-benefitconsiderations, as well as a consideration of the lessons learned from some of the major unpublished, ongoingdistance education experiments. How best to facilitate the transfer of technology, knowledge, attitudes, skills,and information is the main issue to be explored.
4.2.2 FUTURE TRENDS AND PROJECTIONS
4.2.2.1 New Directions in Asian Telecommunications IIRussia's Reach for GlobalImpactIntegration or Devolution?Steve Levy, Attorney, Cole Corette & Abrutyn and D. Buell, USA
Russia has begun in earnest the task of rationalizing its telecommunications infrastructure and the institutionsthat sponsor and support that sector. The speaker analyzes the currently complex and changing situation andevaluates the potential of recent developments on Russia's long-term telecoms enviornment. Also discussedin the important role of Russia's Pacific coast and the establishment of Nakhoda, Vladivostok, and Khabarovskas major gateways and regional corridors.
4.2.2.2 Visions of the Information Age - 2021 ADRobert M. Janowiak, Executive Director, National Engineering Consortium, USA and JagdishJagdish N. Sheth, Charles H. Kellstadt Professor of Marketing, Emory Business School,Emory University, USA
The US National Engineering Consortium conducted a study of the future of the communications andinformation industries. The presenter describes the study's 30-year focus and reports on the results of thestudy. The panel developed 235 scenarios of the future, and base their optimistic forecasts on the maturingof the world's primary regions, the rise of fiscal responsibility in the US, the increased use of telecoms toenhance business competitiveness, and the increased spread of new techonolgies.
4.2.2.3 Developing Strategies for Pacific CommunicationsJohn H. Erbetta, Independent Telecommunications Consultant, United Kingdom
The presenter takes the view that the Pacific region has specialized requirements in terms oftelecommunications development. Success will be aided by planning within a strategy that takes account ofall pctential users, that facilitates suppliers developing suitable equipment, and that promotes a systemsapproach at the local and regional level. Furthermore, the strategy must be underpinned by political resolveand appropriate financial backing.
4.2.2.4 Is Multimedia Ready for Primetime? Stumbling Blocks to MultimediaDiffusionGwang-Jub Han, Assistant Professor, Howard University and Jong-Duck Jung, AssistantProfessor, University of Wisconsin, USA
Multimedia technology is upon us. The speaker focuses on three different aspects of multimedia growth inthe USA: hardware, software, and human resources. The development of the first two will have considerableeffects on the latter. The human element is at the heart of the studies speculation projections ofmultimedia's future.
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4.2.2.5 PECC Triple-T Port (Teleport) for Developing Economies Second PhaseReport Case StudiesKenji Saga Professor of International Telecommunications, Asia University, Japan
In September 1990, the Triple-T Task Force of the Pacific Economic Cooperation Council (PECC) launchedthe Triple-T Port (teleport) for Developing Economies project as an action plan. The Batam IslandDevelopment Project in Indonesia and the Eastern coast of Thailand have been developed as case study areasfor these teleports. The speaker reviews recent meetings and other steps taken to realize this importantproject.
4.2.3 CONVERGING TECHNOLOGIES IMPACT REGULATORY STRUCTURES
4.2.3.1 Video Dialtone Access to MultimediaA.C. Harrison-Surgeon, Network Project Manager, Marsh & McLennan, Inc, USA
The speaker discusses the current status of video dialtone policy in the USA. Discussion focuses on some ofthe issues represented by the cable TV industry, telephone inudstry, and information services industry. Theconcept of video dialtone and its deployment are discussed as they relate to US infrastructure concerns. Thefocus is on interactive program accessibility.
4.2.3.2 Telecommunications and Computer Industries CollaborationCarol Burke, Manager, Global Telecom Account Development, Digital EquipmentCorporation and Joan Kelly, Managing Partner, Sheppard Moscow, USA
This presentation focuses on the communications and collaboration issues between the telecommunicationsand computer industries. For all the change in techonologies, linkages between the industriers are the criticaldetermining factors for success, not only for the corporations involved directly, but also for the overall benefitsof a global communications infrastructure.
4.2.3.3 Converging Telecommunications Technologies: Challenges FacingGovernment and Regulators in Australia and New ZealandRichard A. Joseph, Lecturer, Faculty of Informatics, University of Wollongong, Australia
The speaker reviews the massive changes to the Australian telecommunications environment, looking at issuesarising from convergence of technologies which affect the major regulatory bodies in Australia. Also identifiedare the advantages and disadvantages of the regulatory approaches adopted in Australia, and whereimprovements can be made.
4.2.3.4 Harnessing Convergence for Development: Industrial Policy and ITDevelopment in AustraliaJohn Houghton, Senior Research Fellow, CIRCIT, Australia
Australia is seeking to harness convergence and exploit synergies at the industrial and policy levels in orderto develop a player or players of global size in both the communications and computing industries. The goal,according to the speaker, is to position Australia among the "world-class" players. The mechanics and detailsof achieving this goal are examined, and the likelihood of its success assessed.
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4.2.4 BROADBAND APPLICATIONS
4.2.4.1 High Definition Television: The Key To Multimedia and Broadband NetworksDennis W. Elliott, President, Elliott Communications Co., USA
HDTV is not just about television. The potential of HDTV may change forever the way we communicate.The speaker outlines some of the lesser-known applications of this technology beyond the delivery of broadcasttelevision. It is seen as part of an overall movement to image-based communications, and away from textual-based media.
4.2.4.2 The Current Status and Future Prospects of KDD's International ISDNService with the Focus on Typical Appiimtion ExamplesSyuji Kanazawa, Senior Manager, Marketing and Sales Headquarters, Kokusai DenshinDenwa Co., Ltd., Japan
The speaker introduces the current status and future prospects of international ISDN applications, focusingon recent ISDN applications at the 1992 Albertville Winter Olympic Games, the Munich Summit, and theBarcelona Summer Olympic Games. ISDN use is growing, and the speaker looks at the expansion of Japan'sINS-Net, current linkages between countries and expansion, of this and other services to a variety of countries.
4.2.4.3 Telco Vision: Delivering Distance EducationPaul Kuhar, Director-Federal Regulatory and Industry Relations and EDWIN J. SHIMIZU,Manager-Federal Regulatory Relations, GTE Telephone Operations, USA
The speaker discusses what the power of telecommunications in tne 21st century can mean for education. Thegoal is a national US public switched broadband network. The question is not whether telephone companieswill achieve this, but when. In the US, telephone companies are prohibited by the 1984 Cable Act fromoffering video programming services. At present, Japan's deployment of such a system may be 20 years aheadof that in the USA. The challenge is for US policymakers to take action.
4.2.4.4 High Reliability Type LAN which has New RAS Function and ApplicationSystemTakaaki Suga, System Engineer, Fujitsu Limited, Japan
LANs have become increasingly powerful and commonplace. The author provides technical details of amultimedia LAN system operating in Japan, and forecasts that super high-speed fibre optic LANs will appearin the near future. The focus of such systems is "RAS" - reliability, availability, and service.
4.2.5 FIBER OPTIC SUBMARINE SYSTEMS - REPEATERED & NON-REPEATERED
4.2.5.3 High-Capacity Undersea Fiberoptic Cable LinksNeil Tagare, Director Business Development, NYNEX, USA
The speaker describes the fibre optic "Fibre Link Around the Globe (FLAG)" and its potential impact on theindustry around the world. Also addressed are the technical, operational, marketing, and industrial aspectsof the system. FLAG is a high capacity undersea fibre optic link connecting Europe and the Far East via theIndian Ocean Region. To beign operation in 1996, it will be the longest fibre optic system in the world.
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4.2.5.5 The Customer in Product Development: A Marketing PerspectiveNoe lla Gordon, Asst. Product Manager, AT&T Submarine Systems, Inc., USA
The presenter reviews the research and development resources of AT&T Submarine Services Inc (SSI). SSI'smarket research and product development efforts are reviewed, as is the general market for fibre opticundersea cable services.
4.2.6 SOCIAL IMPACTS OF TELECOM CHANGES
4.2.6.1 The Technology-Human Factor RelationshipDonald M. Lamberton, Visiting Fellow, Australian National University, Australia
Are advances in telecommunications "technology-driven" or "demand-driven"? The speaker investigates thepower of demand in determining the progress of telecommunications. Among the aspects explored are thenature of demand for information as opposed to information technology, the complementarity between newtechnology and human resources; and the need to combine the "technology push" supply-side aspects withdemand considerations.
4.2.6.2 Computers and Human Communications: A Psychosocial Perspective ofIndividual and Society in ChangeGunil la Bradley, Professor and Gorel Strommqvist, Research Associate, Institute ofInternational Education, Sweden
The presenter reports on a study focusing on the interrelationship of computer/telecommunicationstechnologies and the individual. What is the impact? This cross-disciplinary study seeks to contribute to ourknowledge about how combinations of computer technology and telematics and societal factors may benefitsociety overall.
4.2.6.3 The Human Impact of Converging Communication Technologies:Entertainmentisation, Social Change and SaturationGreg Hearn, Assistant Director, The Communication Centre, Queensland University ofTechnology, Australia
The speaker reports on a study of attitudes to the human implications of convergence - basic and fundamentalshifts in how we percieve information and how institution and systems deliver information. The study looksat the effects on major stake-holders within Australia, and pays particular attention to the relative importanceof entertainment versus other services in funding the convergence process.
4.2.6.4 The Impact of the New Services of Telecommunications in DevelopingCountriesMiguel C. De La Sofia, Electrical Engineer, Entel-Chile, Chile
It is more important than ever to analyze closely the impact of telecommunications development on developingcountries. The speaker reviews how new services are expanding at a rapid pace. Cellular technologies arehelping countries bridge gaps in their terrestrial networks, permitting such networks time to install advancedfibre systems. Likewise, societies are becoming less paper-intensive. There are potential cultural andsovereignty "costs", however, and these are also explored.
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4.2.6.5 The Telephone in Daily Life: A Study of Personal Telephone Use in theUnited StatesRobert Larose, Department of Telecommunications, Michigan State University and HerbertDordick, Department of Radio-TV-Film, Temple University, USA
The presenter summarizes a national survey of personal telephone use in the USA. The presentation willprovide an overview of this exhaustive study of basic statistics of personal telephone use, and analyze consumerinterest in new telephone services such as videophones, videotext, and ISDN. Marketing and policyimplications of the findings will be discussed. The presentation will conculde will a call for participation fromPacific Rim countries.
4.2.7 MOBILE SERVICES VIA INMARSAT
4.2.7.1 Is the World Ready for the Go-Anywhere Telephone?Alan Brunstroin, Business Planning Manager, Inmarsat
The speaker reviews Inmarsat's introduction of the first telephone system that is truly mobile and offersseamless global coverage. The introduction of this system, known as Inmarsat-M, coincides with high-profilepublicity for hand-held satellite telephone systems that are planned for the late 1990s. In services andfunction, there is little difference between what Inmarsat-M offers today and what is being proposed forsystems that will not be introduced until the end of the decade.
4.2.7.2 INMARSAT-M Portable TerminalRam Subramaniam, Inmarsat, United Kingdom; Akihiro Ishide, Manager, Engineering;Nobuhiro Endo, Manager, Engineering; Hizuru Nawata, Assistant Manager, NECCorporation, Japan
The presenter focuses on technical aspects and specification of the Inmarsat-M portable terminal equipmentunder development by NEC Corporation. This portable terminal is designed for areas wheretelecommunications facilities are neither readily available nor reliable.
4.2.7.3 Bridging The GapJ.C. Bell, Manager, Regional Business Development, INMARSAT
The land-mobile use of mobile satellite communications is a high-growth business area. The speaker looksat steps taken by Inmarsat to harness this market. Inmarsat-A is increasingly used for thin route telephonyto remote regions; Inmardat-C has found applications in supervisory control and data supervision; andInmarsat-M is poised to be a breakthrough for small island locations in bringing them into thetelecommunications world.
4.2.7.4 Dial M for ServiceEdward R. Slack, Director of Land Mobile & Special Services, COMSAT, USA
The speaker describes various uses and applications well-suited to the new Inmarsat-M system. Described as"almost too good to be true ", Inmarsat-M should satisfy most Pacific Rim user requirements, pariticularly forremote applications such as in the Pacific Islands.
4.2.8 COUNTRY STUDIES - ASIA
4.2.8.1 Telecommunications Infrastructure - Is it a Catalyst for Growth in Malaysia?Omar Charles Abdullah, Asia Manager, Network Services, International Computers, Malaysia
Malaysia has a declared policy of moving its economy from a primary commodity baseto a manufacturing base. The speaker examines to extent to which provision of telecommunicationsinfrastructure is a requirement for achieving this economic growth and transition; and what the Malaysiantelecoms sector has done to assist this endeavour.
4.2.8.2 Communications in the Russian Far EastChuck Schumann, Executive Vice President, Pacific Rim Telecommunications, Inc., USA andGeorge Sapov, Russia
The presenter summarizes the present telecommunications infrastructure in the Russian Far East and Siberia.The focus is on the present development and needs for the future. Examples of new network construction willbe presented along with an analysis of current technical and regulatory hurdles. The authors share theirinsights as to the technical, cultural, and regulatory obstacles of working in the Russian Republic.
4.2.8.3 Utilization of Developing Country Resources for Research and DevelopmentRelated to Telecommunication Products and SystemsADVN Kularatna, Principal Research Engineer, Arthur C. Clarke Centre for ModernTechnologies, Sri Lanka; Shantha Fernando, Senior Design Engineer, Exicom Australia Pty.Limited, Australia; M. Kalyanapala, Research.g.ngineer, Arthur C. Clarke Centre for ModernTechnologies, Sri Lanka; and Parkum Fernando, Design Engineer, Stanilite Electronics PtyLtd, Australia
A group from the Arthur C Clarke Centre for Modern Technologies (ACCMT) highlights some usefulexperiences gained in carying out design and development tasks utilizing state-of-the-art components, systems,and instrumentation. The focus is on supplying domestic R&D resources within developing countries so theymay develop indegenous, low-cost, independent solutions to telecoms problems.
4.2.8.4 The Political Economy of Deregulating Telecommunications in Hong KongPaul Siu-Nam Lee, Lecturer, Department of Journalism & Communication, ChineseUniversity of Hong Kong, Hong Kong
The speaker discusses the political-economic factors behind the Hong Kong Government's intention to openup the local telecoms market for competition in 1995. China's attitude toward a second telecom netowrk inHong Kong is not clear. The juxtaposition of Chinese, British, and commercial interests is examined againstthe background of sovereignty change in Hong Kong.
4.3.1 PERSPECTIVES ON THE FUTURE
4.3.1.1 New 'Have-Nots's' and the Old Problems? How the East European Countriesand the Republics of the Former Soviet Union Integrate into the WorldCommunication OrderWolfgang Kleinwachter, Professor, University of Tampere, Department of Communication,Finland
The speaker analyzes in detail the process of change in the communications media systems of the East
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European countries and the republics of the former Soviet Union. A frank look is provided of the problemsfaced, such as finincial and mateial crises, overstaffed bureaucracies, underdeveloped telecommunicationsinfrastructures, and outdated technologies. The speaker also looks at the regulatory challenges for thesenascent democracies.
4.3.1.2 Multinational Scientific and Technological Information Networks for theMercosur Common MarketLidia R Seratti, Director, Undersecretary of Informatics and Development, Argentina
The objective of this presentation is to promote the development of multinational scientific and technolgicalinformation netwoiks in Latin America and the Pan American region, and to begin that development in theMERCOSUR common market. The goal is to develop common telecoms and information technology policiesbetween the MERCOSUR states.
4.3.1.3 Creating Tomorrow's Telecommunications Infrastructures: Cultural Needsand Economic RealitiesJoe Arden Flickinger, Assistant Professor of Communication, Radford University, USA
Focusing on new digital technologies and their diverse delivery systems, this political-economic study examinesthe tensions which exist in today's regulatory environment, where new technologies and standards are used ascompetitive tools. Suggestions for achieving long-term cultural goals by separating infrastructure requirementsfrom competitive objectives are presented.
4.3.1.4 Converging Telecommunications Technologies, Economy, and BusinessEfficiencyRonald P. Uhlig, Director, Strategic Marketing and Bill Jon, Director, Meridian 1 PLM,Asia/Pacific, Northern Telecom Asia/Pacific, USA
There are a multitude of ways in which converging technologies will greatly expand the impact oftelecommunications. The speaker looks at several new applications, how they have spread through theAsia-Pacific region, and the extent to which markets may be anaylzed by looking at "GNP per phone", anuncommon measuring device which verifies the linkages between telecoms and economic strength.
4.3.1.5 The Telcos Move Toward a Global Market: Economic and CulturalImplications for the Pacific Islands NationsRonnie Bankston, Assistant Professor, University of Northern Iowa, USA
This study examines the changing nature of telecom operators in the USA from an economic and regulatoryperspective, and identifies possibilities and problems with its application in the Pacific Island nations.Particular emphasis is placed on the transfer and application of video distribution capabilities to the PacificIsland nations.
4.3.2 TECHNOLOGY TRANSFER STRATEGIFS AND EXPERIENCE
4.3.2.1 Convergence and the Role of Telecommunications Regulation in DevelopingCountriesJohannes M. Bauer, Assistant Professor, Michigan State University, USA
The speaker studies the regulatory problems confronting telecommunications development in developingcountries. In addition, the possible benefits of telecoms development differ between groups of telecom users.
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Therefore, a conceptual framework is put forward to help analyze the potential benefits derived. A varietyof "instruments" for change are also analyzed in the context of this framework.
4.3.2.2 Institutional Strengthening: Models for Sustainable DevelopmentA. Rubio, Engineer, Philippine Department of Transportation and Communications; J.Bernardo, Deputy Commissioner, Philippines National Telecommunications Commission; andS.C. Macpherson, Director, Policy & Regulatory Matters, Teleconsult Ltd., Philippines
The presenter covers the different types of institutional transitions being experienced in developing countriestoday, with special emphasis on the Philippines, where the authors of the study are collaborating as a part ofa major multilaterally-sponsored program. The traditional "training" and "technology transfer" programs forthe developing world will no longer suffice. The prime goal of this new, innovative apporach is thedevelopment of sustainable management and policy analysis skills in the personnel of key decision-makingministries and agencies.
4.3.2.3 R & D Efforts; A Case of Japan Key Technology CenterKobo Inamura, Director, Capital Investment, Japan Key Technology Center, Japan
The speaker discusses the financial side of privatization policies. A new mechanism recently introduced inJapan is reviewed, and its effects on research and development processes analyzed. This analysis is studiedin the context of the Japan Key Technology Centre (JKTC), which is co-administered by the Ministry ofInternational Trade and Industry (MITI) and the Ministry of Posts and Telecommunications (MPT).
4.3.2.4 The Challenge of Transferring a State of the Art Telecommunication SystemManufacturing TechnologyGeorges Krebs, Vice President, ALCATEL Submaracom, Australia
The presenter tells the story of the successful transfer from Europe to Australia and New Zealand of thetechnologies required to manufacture and install a complete state of the art submarine cable system. Thebackground of the project is reviewed, as are its implications for future challenges.
4.3.3 PROPERTY RIGHTS, PRIVACY AND RELATED CONCERNS
4.3.3.1 Caller ID and Privacy: New OptionsPeter B. White, Senior Lecturer, Media Centre, La Trobe University, Australia
Caller ID has been a controversial telecoms offering since its inception. New service options and a growingawareness of the potential abuses of Caller ID have led a number of regulatory agencies to oblige carriers tooffer subscribers a range of Caller ID "blocking" options. The speaker looks at proposed solutions to thisproblematic issue, assessing proposed telecoms privacy regimes and other options.
4.3.3.2 Software Patents, Ownership And Infringement Crimes: New DevelopmentsStephen C. Glazier, Counsel, Attorney, Reid & Priest, USA
In the US, software protection by patents and copyrights is a rapidly changing legal area. This is causing rapidchanges in business practices. The speaker reviews how these developments interface with recent changes ininternational patent law, and require changes in international business norms wherever computers, software,and IC chips are applied.
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4.3.3.3 Managing the Privacy Implications of New TechnologyBrian G. Milton, National Director - Social Policy, Stentor Telecom Policy Inc., Canada
The speaker describes the escalating concern regarding telecoms privacy in political, regulatory, and consumeradvocacy and business groups in Canada. These trends are analyzed in terms of their effects on Canada'smajor telecommunications companies. Various initiatives to address these privacy concerns are reviewed.
4.3.3.4 The Personal Data Protection Regime in KoreaJisuk Woo, Ph.D. Candidate, Annenberg School for Communication, University ofPennsylvania, USA
Is the increased use of telecommunications technology by governments and private organizations to collectpersonal information a threat to privacy? The speaker addresses the inherent conflict between the right toprivacy and the right to information, and looks at Korea's efforts to introduce a personal data protectionregime.
4.3.4 DISTANCE EDUCATION NETWORKS
4.3.4.1. Distance Learning and Northern TelecomJohn Mahoney, Vice President, External Affairs, Northern Telecom Inc., USA
The speaker looks at several distance education case studies in the USA to show how telecoms technologyserves the interest of education. This is accomplished through a coalition of interests - educators, students,parents, equipment and service providers, and governments - to guide the process, set priorities, pursuefunding, and keep things moving.
4.3.4.2 Creating an ISDN Distance Education NetworkBetty Mitchell, Manager, Telecommunications Applications, Open Learning Agency and DebReid linger, ISDN Service Development Manager, B.C. Telephone Company, Canada
The Open Learning Agency (OLA) of British Columbia, Canada, in cooperation with MPR Teltech, BC Tel,and provincial and federal government departments is conducting a major project to test the ability of basicrate ISDN for distance education applications. The speaker rports on the results of this project and makesrecommendations on network configuration, set-up, instructor preparation, and suitable instructionalapplications.
4.3.4.3 Pacific Regional Education Network: Options for the FutureMalinda S. Matson, Director of Learning Resources, Northern Marianas College and RobertF. Kelley, Jr., Consultant, Management Communications Services, USA
The speaker reviews a major project designed to upgrade the US Western Pacific region's abilities to servehigher education objectives and promote high-quality distance education. The history of such prjects issummarized, limitations of the current system assessed, and the goals and objectives of the new projectoutlined.
4.3.4.4 Multi-cultural Issues in the Delivery of Distance EducationBarry Willis, Statewide Director of Distance Education, University of Alaska System, USA
Delivery of distance education services to a multicultural audience poses a huge challenge to distanceeducation providers. The speaker reflects on the experiences encountered when designing, developing,delivering and evaluating distance instruction to a multicultural audience.
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4.3.4.5 Distance Learning and Northern TelecomJohn Mahoney, Vice President, External Affairs, Northern Telecom Inc., USA
The speaker looks at several distance education case studies in the USA to show how telecoms technologyserves the interest of education. This is accomplished through a coalition of interests - educators, students,parents, equipment and service providers, and governments - to guide the process, set priorities, pursuefunding, and keep things moving.
4.3.5 MAKING IT WORK
4.3.5.1 Academic Internetworking in Mexico The world at the reach of a keyboardMario M. Arreola- Santander, Sales Director, Consorcio Red Uno S.A., Mexico
There is a new imperative in Mexico for a full upgrading of enterprise networks, in an effort to increaseproductivty and remain competitive. Several factors are oulined by the speaker as catalysts for change,including the privatization of government-owned entities, increasing capacities of Mexican telecominfrastructure, the lifting of trade barriers through the GATT, the North American Free Trade Agreement(NAF TA), and the need to comply with international standards.
4.3.5.2 The HI-NEST Model: An International Computer Network for Support ofProgram ImplementationDonald B. Young Co-Director, FAST Program; Mary Gullickson-Morfitt, FAST ScienceProgram Field Services Specialist and John H. Southworth, Educational Associate,Curriculum Research and Development Group, University of Hawaii, USA
The Hawaii Network for Education in Science and Technology (HI-NEST) is an international computernetwork designed to support the implementation and use of the Foundational Approaches in Science Teaching(FAST) program. The presenter reviews the progress of this system, and predicts that by 1995 it will be usedby over 8,000 teachers and 600,000 students. The network already extends to nine countries.
4.3.5.3 A System Architecture for Ideographic Language SupportAndrew Pan, Technical Advisor, American Express, TRS Advanced Technology Group andRoen Hogg, ADIA Information Technologies, USA
The speaker looks at the Idoegraphic Language Support Project, the goal of which is to support indeographiclanguage capability (eg, Japanese and Chinese characters) in input, database, processing, and output. Japanese,Korean, and two forms of Chinese are encompassed in the project, covering one-fourth of the world'spopulation. The challenges and rewards of this project are enormous.
4.3.5.4 Architectural Consideration in the Design of Network Based EducationalSystems (NBES)S.V. Ahamed, Professor of Computer Science, City University of New York and V.B.Lawrence, Head, Data Communications Resources, AT&T Bell Laboratories, USA
The architectures of both telecommunications networks and intelligence networks may be enhanced toincorporate a substantial component of "knowlege processing" for educational system applications. Thespeaker provide a technical review of how this might be accomplished, and the applications such a networkcould incorporate.
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4.3.5.5 Open Learning Centres: Making the Best Use of Technology to EnhanceDecentralised Education and TrainingAnne Goo ley, Director, Opening Learning Network and Steve Towers, Assistant Director,Opening Learning Centre Network, Australia
The speaker presents the background to the Queensland Open Learning Project, the establishment of theQueensland Open Learning Network (OLN), and the learning programs that are based upon the OLN fordelivery of educational products and services. Issues that will be addressed include the role of the OLNand open learning centres; problems associated with the development of the network and strategies developedfor successful management and future planning.
4.3.6 SOCIAL IMPACT STUDIES
4.3.6.1 Anticipating and Estimating Adoption and Resistance of InteractiveInstructional Technology: A Look at Multimedia in Higher EducationLouis Leung, Assistant Professor, University of Hawaii at Manoa, USA
Adoption of instructional communications technologies meets with resistance and even opposition in highereducation. This study examines the awareness, interest, evaluation, and perception ofmultimedia instructionaltechnology; factors in multimedia instructional tecnology adoption and integration; and negative factors andhindrances to the adoption of multimedia instructional technology.
4.3.6.2 Development and Telecommunications Technology in Pacific IslandMicrostatesMichael R. Ogden, Instructor/Research Associate, Center for Pacific Islands Studies,University of Hawaii, USA
The presenter summarizes the results of a PTC-sponsored comparative research study of the role and impactof telecommunications technology on development planning and aspirations conducted in the Republic of theMarshall Islands and the Cook Islands. Examined are aspects of recent telecoms developments in bothcountries; the broader social, economic and politcal impact of such developments; and several 30-year scenarioprojections are put forward regarding these small countries' telecoms development.
4.3.6.3 Assessing Videotex Diffusion and Usage Patterns in a ManufacturingOrganization: A Case StudyMichael G. Elasmar, Instructor, Department of Telecommunication, Michigan StateUniversity, USA
The speaker outlines a case study of a large multinational manufacturing organization which utilizes the serviceof a US nationwide network that provides private company videotex services over its host computers. Asurvey vas conducted to assess user satisfaction with the videotext system and the services it offers. Theproblems and positive factors encountered are evaluated and analyzed in the context of future videotexapplications.
4.3.6.4 An Empirical Investigation of Telex Data as a Useful Predictor ofSocioeconomic Development Among Less Developed CountriesMeredith S. Glenn, Assistant Professor, Barry University, USA
The speaker considers the relationship between converging telecommunications technologies andsocioeconomic development in developing countries. Examined is the effect of telecoms on the social and
economic activities of developing countries and the understanding of the contribution the telecommunicationsinfrastructure provide to socioeconomic growth.
4.3.6.5 Framing Our Common Future: Strategies for Promoting Cooperation AmongStakeholdersAngelina T. Wong, Professor of Extension, The University of Saskatchewan, Canada
The successful incoporation of telecommunications technologies in higher education requires the orchestrationof different types of expertise and reflective dialogue among the stakeholders. The speaker highlights someof the lessons she and her colleagues have learned duirng six years of development and delivery of province-wide televised courses.
4.3.7 VSATS
4.3.7.1 VSAT Solutions for Innovative International and Domestic ServicesB.K. Syngal, Chairman, Videsh Sanchar Nigam, India
The speaker describes applications of VSAT networks for the realization of innovative and cost effectivenetworks. VSATs may be a particularly effective solution for developing countries, and may even be used asoverlay networks for advanced services such as ISDN.
4.3.7.2 VSAT's - An Efficient Option for Voice and Data NetworkingCarol A. Politi, Senior Marketing Specialist, Hughes Network Systems, USA
With over 5000 VSATs installed and ordered to date, the Pacific rim is one of the most rapidly growingmarkets for VSATs today. The speaker looks at how VSATs are enabling businesses to operate effectivelyin regions where it was previously difficult to obtain reliable, high quality telephone service.
4.3.7.6 VSAT in Local Administration Communication NetworkHideki Noda, Yutaku Onda, and Toru Kikuta, Japan Radio Company, Japan
The Japanese market for VSATs (Very Small Aperture Terminals) is gradually expanding after theinfrastructure for satellite communications was established by the launches of JASAT -1 and JASAT-2 in 1989.The speaker introduces Japan's nationwide satellite communications system for local administration anddisaster prevention and outlines the technical features of the multimedia VSATs.
4.3.8 COUNTRY STUDIFS - DEVELOPING ECONOMIES
4.3.8.1 Television in Papua New Guinea: Policies and PracticeAmos Owenares Thomas, Lecturer, University of Tasmania, Australia
The introduction of television in Papua New Guinea (PNG) was preceded by considerable debate by civilleaders spanning decades. The speaker traces the development of PNG broadcasting policy and compares whatthe policy initiatives envisages against current broadcasting reality. Content analysis of TV programming willbe reported, with a focus on fireign-to-local programme origin ratios.
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4.4.1 REGIONAL ORGANIZATIONS AND TELECOM DEVELOPMENT
4.4.1.1 Global Telecommunications Development - Market Forces or Multi-LateralPlanning?Chris C. Vonwiller, Director of Corporate Affairs, AOTC, Australia
The Maitland Commission in 1984 formulated recommendations for the development of globaltelecommunications, including multilateral initiatives. The speaker reviews progress since the Commission'sreport and contrasts some of the planning assumptions for telecommunications services in developed countriesagainst those more appropriate in developing nations.
4.4.1.2 Technology Transfer in the Asia Pacific RegionSetyanto Santosa, CEO, PT Telekom and former CEO of PT INTI, Indonesia
The presenter reviews the basic US regulatory scheme for export controls and technology transfer. Exportcontrols can affect the ability to export technology and the ability to enter into joint ventures with foreginpartners. In addition, they can restrict re-exports of such items once abroad. They are likewise an issue fornon-US companies seeking to invest in the US. The US regulatory scheme has changed in redent years, andthe speaker reviews this vital component in international telecoms trade.
4.4.1.3. Cooperation Tasks of Telecommunications in the Asia-Pacific RegionYun-Sik Shin, Ph.D, President & CEO, DACOM, Korea
The speaker addresses the important area of cooperative activities for telecommunications development withinthe Asia-Pacific region. This overview of the regions telecoms advancement and current telecoms needs alsolooks at the role of multilateral organizations such as PECC, the role of organizations such as PTC, how datacommunications networks are evolving in the region, and the pressing need for human resource developmentprograms.
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DISCUSSION GROUPS
NO'I'ES
FORECASTING SATELLITE DEMAND
Jack Albert, Vice President of Broadcast ServicesPaAmSat, L.P.
Greenwich, Connecticut U.S.A.
Satellite life is now 15 years. Costs have skyrocketed andclassical leading indicators have disappeared with changes intechnology, de-regulation, fiber-optic cable and separatesatellite systems. So, why are so many new satellite launchesbeing planned? The risk takers may be the new experts atForecasting Satellite Demand.
INDUSTRIALIZED NATIONS
A Telecommunications infrastructure emergedin the late 19th century with the telegraphtechnology forming the backbone of routesbetween and within the populated areas. Theroutes follow the same paths of wagons,trains and ships. Telegraph technologyspread with the increased demand forcommunication networks. Commerce grew andcommunications systems expanded along withit. An interdependent relationship wasformed between commerce and communications,which would continue to prosper throughoutthe future.
TECHNOLOGY CHANGES
Land-based communications were augmented byair-based technologies. The first air-based system were carrier pigeons. Thesebirds flew air routes where land servicesdid not exist.
Radio followed, greatly expanding the reachand direction of communications. Radio,Telegraph (and Voice) brought a revolutionto commerce with the new ability to expandglobally.
Capacity, quality and security plustransmission technology spread the wire-based systems to and within all commercialareas.
- Radio Technology
Reliance on radio technology met anobstacle; demand surpassed frequencycapacity and radio communications remainedan open channel with little privacy.
- Microwave Technology
Point-to-point high traffic (capacity)spread trunk routes between centers. Fordecades this was, and still is, the maintechnology used in many areas. Distancebecame a costly and time-consuming problem.Since microwave is a "line of sight"system, a repeater is needed every 20 - 40miles -- with the horizon as its boundary.
- Cable and Fiber Optics
Early cable (wire) supported one signal perwire; multiplexing allowed hundreds ofsignals per wire.
Fiber Optic Technology introduced a faster,more secure cable system with greatlyincreased capacity. Capacity jumped tothousands of signals and equipment size wasgreatly reduced. Cost and time to buildstill remain negative factors in thispoint-to-point system.
The capacity and security of fiber makes itan ideal solution to high capacity trunkroutes and terrestrial connections toglobal/domestic satellite systems, unlike
microwave, it does not use radiofrequencies that may a problem withinterconnection or co-existence withsatellite transmissions.
SATELLITE TECHNOLOGY
In the 1V60s satellite technology emerged,providing the combination of land and air.The services provided by land technologiescould now be utilized on satellites butwith less of the disadvantages of thesetechnologies.
The satellites provided a single microwaverepeater approximately 22,700 miles abovethe earth. Such a repeater is in "line ofsight" from about 1/3 of the earth'ssurface on the horizon from outspace.
EARLY SATELLITE DEMAND
It took 10 years for the USA Televisionbroadcasters to switch from the tried andproven terrestrial microwave to satellitetechnology. It took only one year for thenew cable television industry to link cablesystems and to supply large amounts of newtelevision programming to geographicallydiverse areas. It took the majortelevision broadcasters a decade to copythe cable systems use of satellitetechnology. There was now competition tothe broadcaster's monopoly dominance insupplying T.V.
INDUSTRIAL NATIONS AND SATELLITES
All technologies flourish in industrializednations. Traffic forecasting of telephoneservice became a science. Erlangcalculations are still used to projectexpansions. High traffic routes followedthe "build it and it well be filled"concept.
Satellites for international and domesticservices launched around the globe in the60's, 70's and early 80's followed thatsame concept and were deemed successful inboth financial and utilization terms.
INTERNATIONAL SATELLITES
The International TelecommunicationsSatellite Organization (Intelsat) wasformed in August 1964. Intelsat, jointlyowned by about 120 nations, became theback-bone transmission system on a globalbasis. It became both a natural and treatymonopoly in providing such services.Similar natural and legal monopolies suchas Post Telegraph and Telephone (PTT)organizations became the nationalrepresentatives or "signatory" to theintelsat organization. The signatory/PTTwas the single source of internationalsatellite service in each member nation.Each PTT charges what ever it wants forcapacity it resold on Intelsat satellites.
43 ,,3 BEST COPY AallABLE
ROOM FOR ALL BUT NOT ALL FOR ONE
Domestic Communications satellite systems,like Intelsat, also use a geostationaryorbital location. Domestic systems becameregional systems, covering more than onenation.
The emerging satellite industry looked at anew, unexplored market. Satellites areused for more than just telephone traffic,so the scientific approach to forecastingbecame difficult to use. Increased trafficvolume and complexity as well as rapidadvancements in technology further confusedthe forecasting dilemma.
Satellite systems growth over the last 10years could not be and were notscientifically forecasted.
The spacing between satellites had to bereduced from 4 degrees to 2 degrees toprovide room for the satellites crowdingover the industrialized land mass. Theproblem of a lack of room over the oceanshas now arisen. This is whereinternational satellites are located.
Mr. Xavier Picard of Arianespacesummed up the situation as follows:
"500 years ago ChristopherColumbus was seeing 'new starsappearing in the sky.' Newnations were formed and gold,yesterday's wealth, has beenreplaced by innovation,technology, research . . . Atthe same time, the sea wasuseful; today, it is space."
LOOKING AHEAD 5 YEARS
Looking too far into the future reduces theaccuracy of a forecast. There are too manyvariables and unknown events that candrastically change a long term forecast.By taking only the major issues intoconsideration and perhaps putting a littlehistory into the mix, only a short term ornear term forecast of satellite demand canbe achieved with any practical accuracy.
SATELLITE CAPACITY AND THE GLOBAL MARKET
The standard capacity is meas,..ced in termsof 36 mHz transponders. There are in fact36, 54 and 72 mHz, C-band and Ku-bandtransponders.
The following table in Figure 1 is fromEuroconsult's "World Space Industry Survey-- 10 Year Outlook" depicts the 1985-1995transponder capacity. In 1965, it wasvirtually zero. By 1985, it had grown to1,788. By 1995, it is expected to be3,140.
This is a relatively accurate short termforecast, for both failures and drop-outswill be quickly replaced. In addition tothis capacity, PanAmSat will be launching 3new satellites by 1995. Although they willhave 54 mHz transponders, the equivalent 36mHz transponders will total 144. Moreover,Low Orbit Satellites should now heaccounted for in the near term forecasts.One system of Low Orbit Satellites personalcommunications system requires about 66satellites to be in orbit at one time.
44
In May 1992, Arianespace made known that ithas 101 launch contracts pending.PanAmsat's new Global satellite system willbring that number to 104.
How big is the global market? Can itsupport the projected launches? By theyear 2002, Euroconsult predicts a US$ 80billion global space market. Figure 2breaks down the forecasts by MarketSegment. The optimistic size could be asmuch as US$ 100 billion.
In order to continue developing a shortterm forecast one must understand someintricacies of both the satellitedistribution system and intense politicalelements of the market. Thisunderstanding, combined with realizing theimportance of the growth (or potentialgrowth) of the newly emergingindustrialized nations is essential.
NEW SATELLITE COVERAGE AREAS
Satellite communications are particularlywell-suited to the newly industrializingnations. Communication demands can besatisfied almost overnight . . . anywhere.Small, inexpensive VSATs offering data andvoice capabilities are available virtuallyimmediately. Satellites offer a variety ofservices from television to telephone, aswell as many other standard and uniquetelecommunication services for large andsmall users.
Flexibility is the key to the success ofsatellite systems. Services can beestablished in a very large pre-definedarea. Newly industrializing countries areexpanding at rates which render long-termplanning for the communicationsinfrastructure very difficult. Thisexpansion encourages over-centralization ofestablished population centers, attractingthe many social, economic and technicalproblems typical of an urban society whileweakening rural societies. Satellitecommunications can treat all areas equallyand enable those living in remote areas tocommunicate with the metropolitan areas ofthe world thus negating the tendency toover-centralization.
The interest of the new generation ofproviders of satellite communicationservices is to see new operators ofcommunication systems develop in newcountries.
An example of the new generation ofsatellite operators is PanAmSat PAS-1. Thefirst privately owned internationalsatellite was launch on June 15, 1988located at 45° west longitude. It offersservices to Latin America that were notavailable before. This Separate SatelliteSystem (separate from the Intelsatmonopoly) was at the leading edge oftoday's waves of deregulation, free marketand open competition that is sweeping theworld. Now, only 3 year later, servingover 70 countries in Europe, North Americaand South America its 36 X 36 mHz(equivalent) transponder are near fullcapacity.
The PAS-1 footprint shown in Figure 3 isnot very unique aside from a rather largeNorth American coverage area. What makesthe real difference is the companydirective to provide high quality,reasonably priced and very flexibleservices that meet customers' needs. The
Breakdown of International Space Telecommunications Capacity1985-1990 projections for 1995
Number of transponders in-orbit(36MHz equivalent), minus those at the end of design lifetime
Regions 1985 1990 1995 Estimate
Intelsat 664 776 1010Private Systems 0 36 156USA 624 706 720Canada 144 120 134Europe 64 157 436Japan 64 171 218Rest of World 228 343 466TOTAL 1788 2309 3140
Source: Euroconsult"World Space Industry Survey-10 Year Outlook' Figure 1
The World Market for Civilian TelecommunicationsSatellite Systems - Forecast by Market Segment :1991-2002
USD in billions (90)
Key : forecast:IN Min. EIMost Likely RI Max.
Launches
Source: Euroconsult
Satellites
Figure 2
45
Ground Stations
BEST COPY AVAILABLE
customer was, and still is, consideredfirst and foremost.
A few interesting facts have been exposedin the 4 year history of PanAmSat. Theseare shown in the Figure 4. PamAmSat hassatisfied a pent-up demand and created anew market or at the least succeeded inexpanding existing markets in its coveragearea.
By combining a flexible satellite deliverysystem with user demands creates a new wayto do business. The Old Way ofestablishing a transmission path isillustrated in Figure 5. Rules andregulations necessitate a complex set ofproviders, or middle men, each at anincremental cost for the user to pay.
The new way is to eliminate thecomplexities. This is demonstrated inFigure 6. Simplicity yields the benefitsof speed to establish the service at lowercosts, higher reliability and flexibilitiesto meet user needs plus the ease of one-stop shopping.
THE 5 PS: POLITICS, PTTS, PRIVATIZATION,AND POSTURING FOR PROFITThe 1990's will see the five P's swimmingin the sea's of the new free markets.
WORLD POLITICSThe World Administration Radio Conference(WARC) met early in 1992. For nearly 5weeks, 1400 delegates from 127 country-members of the InternationalTelecommunications Union (ITU) 'net in Spainto discuss frequency allocations for newtechnologies. New or growing technologiesare important to the rapidly growing Asian-Pacific market.
WARC-92 was the first major frequencyallocation conference to be held since1979. The political priorities of eachnation and region were of importance sincethe ITU operates on a one-vote-per-countrybasis. Despite alliances and formation ofregional voting bloc's allocationssatisfying the various proposals andrecommendations were reached as well astime tables and technical constraints topermit the introduction of new services. Animportant conclusion that affectsdeveloping countries was made clear. Inorder to assist developing countries totake part in the new telecommunicationsrevolution, the conference adoptedresolutions providing all types ofassistance including financial. Unlessotherwise indicated, the decision approvedat the WARC will take effect on October 12,1993.
PTTs are Privatizing and Posturingthemselves to compete in an open market fortheir share of profits. The days ofmonopolies are numbered. A PTT may, insome nations, remain part of the governmenteither totally owned by the state orpartially owned by the private sector.Privatization has been one of the mainforces behind deregulation. Many PTTs arenow being privatized in part or altogether.
While governments were prepared totolerate state-run monopolies, they havebeen less willing to give their blessingsto private monopolies.
Deregulation and privatization is a double-edged sword. De-regulation allowscompetition but also and allows PTTs to
46
enter new markets in other countries. Thechart in Figure 7 show the privatizationstatus of a few giant PTTs and cross-borderactivities as the sleeping giants awaken.As reported in the Financial Times. Therelative values of cross-bordertelecommunication acquisitions since 1988shown in Figure.8. In 3 years the growthhas been 1420%.
France Telecum, the world's fifth largesttelecommunications operator, has in thepast year made more foreign alliances thanever before since its creation in the 19thcentury, when in was a telegraph servicefor King Louis Phillippe.
Asia and Pacific Region Markets - Why MoreSatellites
The Pacific Rim is preparing for anexplosion in demand for satellite-basedcommunications. Trade between the US,Europe, and Asian countries is burgeoning.One study shows no less than threesatellites are needed to serve the region.De-regulation will fuel major growth evenmore.
As of February 1992, Star TV's 1.8 millionsubscribers were viewing a new televisionservice. That 's three times the originalprojection just two months after the launchof its 5 TV channel service.
Analysts agree that the advent of satellitesystems such as Asiasat, Aussat, andPanAmSat are indicative of increasinginterests among satellite players in thehows, whys and whens of tapping the demandfor space segment in the region. Theescalating pace of developments in thePacific Rim justifies the optimism.
One study by Communications System Ltd. ofthe UK indicates most capacity will be forvideo and data. The Pacific satellitedemand, by application, is shown in thenext Figura, 9.
TOO LITTLE OR TOO MUCH
One of the rarest commodities in AsiaPacific region at this moment is a spacesatellite transponder with cross-bordercoverage. A number of new satellitesystems are in the planning or constructionstage or, as in the case of Intelsat, themoving stage. At present, the demand fortransponders exceeds the supply.
Although new capacity will soon come to therescue of Japan's satellite communicationsmarket, some analysts feel that, if all thesatellites planned/owned by Japan's SpaceCommunications Corp (JC-Sat), SatelliteJapan Corp., and NTT were actually inoperation by 1995, there will be more than200 transponders available - and demandwill fall short of the supply of availablecapacity.
In the short term, it will be two to fiveyears before existing demand can besatisfied. There seems to be an immediate(in the next 5 years) demand for 30 to 100transponders. Arianespace's study showsthat the number of transponders needed tomeet demands will increase from the present200 transponders to approximately 700transponders by the beginning of the nextcentury.
The uncertain future only increases thenumber of variables involved in predictingfuture demands for transponders. So-
PAS-1 Coverage
guBand / European Beam
INISINIENINIMIN Ku-Band / North A merit an Beam
C-Band / North Beam
CBand / Central Beam
C-Band ; South Beam
CBantl/ Latin Bann
Figure 3
1988 1992 PanAmSat
95% of traffic is new
85% of traffic is video
98% of traffic is private enterprise
0% of traffic is telephone
Figure 4
47
THE OLD WAY OF DOINGINTERNATIONAL COMMUNICATIONS
Carrier
!MI= MG "It Mt fe I
------------4Carrier0USA End
Carrier
0
Foreign End
Carrier Carrier0-10-
Figure 5
ALPHA LYRACOM
THE NEW WAY OF DOING 181"'21.1" ".21'b
INTERNATIONAL COMMUNICATIONSTHE ALSC SOLUTION
Bahamas
Figure 6
48
140'411111111
10I Central! America ALPHA LYRAIX)M'
CustomerData Center
L
Major PTT Privatization
U.K The remaining 22% may be privatizedin the next year.
Germany DBP Telekom could be privatizedas eary as next July.
Japan NTT privatized
France Maybe by the end of the decade.
USA Privatized and fragmented.
Figure 7
The Sleeping Giants Awaken
Cross-border Telecommunication Acquisitions
1988 11 deals worth $116 million (USD)1989 50 deals worth $2.7 billion (USD)1990 67 deals worth $16.5 billion (USD)
PTTs have strategies for global expansion. Instead ofbeing insular monopolies sleeping in their backyards the
giants will invade each others' turf.
Figure 8
49
called "experts" are only able to give us a"best guess" on the most currentrequirements for transponders and themanner in which the demand is most likelyto grow.
Entrepreneurs who had previously beenexcluded from the telecommunicationsbusiness by tight regulatory controls aswell a 13 already establishedtelecommunications companies seeking toexpand in the region are now preparing torisk money to provide the infrastructurenecessary to meet needs.
The services with the highest immediatedemand will probably be similar to those ofthe presently existing regional satellitesystems. Television leads.
The demand list: Rapid development ofCable Television, SMATV, MDS, Compressed TVand HDTV are in the forefront ofdevelopment and implementation.
Television is not, by any means, the onlyservice in demand. Well-developedcountries need to expand. Both densely-populated, urban areas and new industrialzones will need expand theirtelecommunications infrastructures byadding teleports and VSATS. There stillare areas in this region's younger, still-developing nations where such basicservices such as telephone service are inshort supply or non-existent. Satellitetransponder loading technology is expectedto enable 2000 telephone circuits pertransponder in a year or two. Thiscapacity is similar to that of underseafiber-optic cables. Satellites have theability to bring telecommunicationsservices rapidly and at a reasonable priceto all areas, however remote.
The present lack of transponders is slowingexpansion. The demand for service beinggreater than supply is known as "pent-updemand." Exclusively domestic satellitescan not offer the solution. Regionalsatellites can serve several neighboringccuntries. International satellites arebeat for the long distance services. Theoptimum solution is a combination ofregional (domestic) satellites andinternational satellites.
SEPARATE SATELLITE SYSTEMS TO THE RESCUE!
The term "separate satellite system" refersto a non government, non treaty, openmarket, commercial satellite system. Thecombination of spacecraft capacity andservice is the solution to fulfill thepent-up demand. Easy, open access bycustomers is also a fundamental element ofsuccess. The emergence of such new"separate satellite systems" offers hope toentrepreneurs as well.
The foremost separate satellite systemalready in existence is PanAmSat.Presently PanAmSat has one satellite overthe Atlantic Ocean which has enjoyed muchsuccess. Recently PanAmSat announced theaddition of thre^ more satellites, whichwill cover the Pacific and Indian Oceanregions by 1995. This expansion willcreate tha first global separate satellitesystem.
Video First - TelevisionFirst of all the TV is visible, excitingand in the lead position of "pent-updemand." Second, TV is the easiest andfastest service to supply. Third, TV
50
provides the quickest revenue to supportthe investment and life cycle of asatellite.
The Television market is vast. Fromprogram development to TV sets, itencompasses entertainment, business andeducational services.
There is a downside.Regulations still exist in many highpopulation areas that restrict dishinstallations. Although deregulation isslow in some parts of the world, theeventual deregulation, and the inability tocontrol TVROs will overcome thisrestriction to growth.
Censorship is also an issue. Manycountries still support strict censorshipof political and religious programming.Entrepreneurs may be discouraged fromdistributing programs to these countriesOn the other hand advertising-supportedprograms need not be overly concerned withcollecting revenues.
Signal piracy and effective subscribermanagement system in the collection of feeswill be a major challenges for developingcountries. Signal encryption may be asolution, but a standard may first have tobe established. The local industries'ability to manufacture earth stations andwork with the associated electronics (underlicense) can resolve many of these issuesin due time. Indeed involved industrieswill flourish with the introduction ofservices.
What do projections look like today? Bythe year 2000, Direct To Home dishinstallations ("DTH") could reach almost 17million plus a mere 180,000 for CATV/SMATV.This represents only a 5% penetration of TVhomes. The value of these systems is,however, almost US $3.4 billion.
The good newsTelevision programming on the PalapaSatellite seems to already have penetratedover 41 million TV homes with 1.7 millionDTH/CATV/SMATV systems.
In Japan, only 1% of homes have cable TVcompared to 60% of US homes. However,more than 5 million homes have subscribedto satellite TV. That represents roughly10% of the country since the service begantwo years ago. Popularity is expected todouble by 1995.
CATV AND MMDS
Initially, cable television (or CATV)provided remote areas with TV. Homes werewired to one point. At that point, a head-end was built to obtain TV programs fromthe airwaves, microwave and eventuallysatellites. Small systems confined to onebuilding or a few buildings are calledSatellite Master Antenna Television orSMATV.
Channel capacity grew from a just a handfulof channels to 100 channels. Improvedpicture quality, increased program varietyand pay-per-view for exclusive programmingcaused an explosion in CATV in the USduring the 80s. The concentration ofpopulation that would pay for serviceprovided an economic base for the newindustry. It is, however, a costly projectand time consuming to build. CATV competeswith multi-channel multi-point distributionservice (MMDS) or wireless CATV and over-
the-air broadcast. With the advent ofhigh-power satellites on separatefrequencies it is now possible to obtaintelevision using very small dishes. DirectBroadcast Satellites (DBS) cover smallareas in order to concentrate power into60-90 cm dishes. Satellite fed MMDS andDTH offer the lowest cost and fastestdelivery in the largest market areas.
DTH dishes as small as 90 cm present achallenge to DBS, CATV, MMDS, and over-the-air broadcast services. In Europe, the DTHpenetration is expected to reach 15% (22million homes. By the year 2000, CATV isexpected to reach 39% (55 million homes).The breakdown: 24 million in Germany, 12million split between The Netherlands andthe United Kingdom. The vast majority ofprogramming will be satellite-delivered,either directly to viewers or via alternatesystems.
MMDS began in 1986 on specially dedicatedfrequencies. The cost is 1/3 of the costof CATV. Compression provides up to 30channels of high quality premiumprogramming to any subscriber in thebroadcasting area. A small, inexpensiveroof antenna and TV converter is all thatis needed at the subscriber location.Transmission does, however, require line-of-sight to a master or repeater transmitantenna.
In many developing countries, noregulations exist governing the MMDSfrequencies. On a global basis, MMDSsystems outnumber traditional CATV systems.
VIDEO COMPRESSION
Video Compression squeezes signals into asmaller bandwidth. Digital compression isthe leading technology to provide the bestquality in the smallest space. Compressionschemes take essential picture-by-pictureinformation and condense it using spectrum-efficient digital coding. The data is thensent in a fraction of the spectrum formerlyneeded.
It is interesting to note that NHK, Japan'sBroadcasting organization in cooperationwith NEC Corp. has developed a newlightweight, digital satellite TV news-gathering unit (SNG). The significantlysmaller fly-away can more easily betransported to news events. The transmitpower is reduced to 20 watts using a small1.2 meter dish. Overall weight is 1/2 ofexisting systems.
Increase in Capacity, Not In Cost
The equipment costs are minimal whencompared to the costs of actualtransmission. With several channels toshare the cost of the entire deliverysystem, the individual share is thereforesignificantly lower. There is, however, nosuch a thing as a free lunch. There willbe a limited number of satellite channelsthat will be designated for compressionbecause of the scarcity of capacity.Popular channels will command a premium.
High Definition Television (HDTV) will beutilized, and, indeed, requires somecompression technology since HDTV requiresa much larger bandwidth or digital output .
. approximately twice that of standardtelevision formats.
BUSINESS AND EDUCATIONAL TVA small but growing market is the market
51
L
known as Business TV. It was one of thefirst market niches to take advantage ofthe lower transmission costs usingcompressed video. It does not demand thesame full-motion, high-quality of broadcasttelevision.
Private Networks represent more than halfof all Business Television. Educational orinformational networks comprise the
balance. Applications drive the US $610million dollar world market. Already, theAsia market is almost equal to the near$300 million US market. About 46% of theworld market is used by manufacturingcompanies.
The growth of private networks is indicatedin Figure 10. There are a total of 132.The location of downlinks is dramaticallydifferent than the location of the network.This is shown in the Figure 11. The US has2 1/2 times as many downlinks as Asia.
Live applications drive the business. TheEuropean networks comprise the smallestsegment since most usage is tape.
Once Business Television is integrated intodesktop computers, a significant expansionin the market is expected. The technologyis available already, so the expansion isimminent.
TELEPORTS AND VSATS
Teleporte are significant installations ofsatellite earth stations, terrestrialtransmission interconnections and realestate developments.
Satellite C-band frequencies share the samefrequencies as terrestrial microwave.Radio Frequency Interference (RFI) is a
major problem in locating C-band earthstations in urban areas.
Teleports were the only solution. Suchcommunications centers, which could beshared by many users in a centrally-locatedor metropolitan area were established.Besides providing communications services,a teleport also serves as a magnet for realestate development. Strategically located,such real estate development could relieveurban congestion while providing economicgrowth.
VSATS
A Very Small Aperture Terminal ("VSAT")network consists of a satellite, a centralhub, and anywhere between 10 - 1,000 VSATterminals (antennas). Terminal sizes rangefrom .4 meters to 2 meters. C-bandantennas are slightly larger than Ku-band.In the US, VSAT operators use Ku-band. Inother parts of the world, the situation isthe opposite. Developing nations,particularly those near the equator, use C-band.
VSATs offer a flexible, low cost, quicksolution to data and voice service needs.The major impediment to VSATs is monopoliesand regulations. The needs of the economicdevelopment and social goals of thepopulation clearly favors VSATs.
In North America, there are an estimated100,000 VSATs. By 1997, it is estimatedthat there will be over 200,000. At thesame time, European VSATs will reach20,000. The potential is much greater ifderegulation were to continue.
Pacific Satellite DemandForecast Market Share Breakdown by Application
IBS10%
Business TV,4°/0
Data14% Digital Voice
15%
Analog Voice
TV Broadcast25%
Cable Restoration17%
Other TV Distribution1% 7%
Figure 9
OPERATIONAL PRIVATE NETWORKS
80
60
40
20
01981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991
Networks(cumulative)
North America
Asia.......
Europe
KJH Communications Figure 10
52
PRIVATE NETWORKDOWNLINKS BY REGION
North America31709
132 NETWORKS
Source: KJH Communications
Europe1854
I have covered the entire satellite marketfrom the beginning to the present. I evenadded a bit of the future. As presentedthere is a huge multifaceted problem inforecasting Satellite Demand.
Is there an easy way to forecast satellitedemand? The answer is not Let theentrepreneurs build the satellite systemsat their own risk. Supply and demand willreach equilibrium eventually. Remember,satellites have a limited life and,therefore, only the question of replacementremains.
Figure 11
53
Asia12911
Al BondPresident
Satellite Management International, Inc.
BUSINESS TELEVISION IMPACTING
THE CORPORATE BOTTOM LINE
As the cost of doing business con-tinues to escalate, the need for cost-effective solutions becomes moredemanding. A trend which began in theUnited States over ten years ago isnow bringing the power of televisioninto businesses around the world.Satellite delivered business tele-vision is having a major impact on theway businesses do business.
Business television has long been aneffective communications tool in theUnited States. The first satellitebusiness networks began operation asearly as nineteen eighty. Today thereare nearly one hundred such networksin operation in the United States.Europe is just beginning it's growthcycle. Plans are being developed tobegin similar networks in the AsiaPacific and Australia.
The visual and verbal impact oftelevision brings an unprecedentedopportunity to reach the intendedaudience in a manner to which they aremost accustomed. Today's work forcehas hardly known a world where theydid not receive information and edu-cation from the television screen: anew baby is placed in a cradle whereit is rocked and given a chance toobserve the motions on the televisionscreen. Then on to school, where moreand more information is delivered viatelevision. So,it is natural to re-ceive video and audio information inthe work place.
Dramatic new technological changes aretaking place which are allowing theexpansion of business television net-works throughout the world. There arethree basic types of business tele-vision networks, each has a veryspecific purpose: Corporate Net-works, Subscription Networks, andSpecial Purpose, Advertiser Supported,Networks. The following will outlinetheir purposes and explain theirimpact on the areas in which theyserve.
In the early 1980's, corporationsbegan to develop business televisionnetworks to take advantage of thepower provided by satellite tech-nology. The need to communicate withlarge numbers of people in widelydispersed locations provided theincentive to take advantage of thiscommunications innovation. Business-men and women needed timely infor-mation. Now there is little chancethat the information distributedbefore in memos would be lost due tonon-readership by staff members. Reg-ular staff and sales meetings haveevolved as a normal part of businesstelevision network services. Managerstalk with their staff wherever theyare located, interchanging time sen-sitive information. Additionally, thestaff has the capability of ques-tioning those presenting the infor-mation on the television screen usingreturn audio over a normal telephoneline.
Corporate business television networksare not common to one product line.These networks support anything fromhardware to software, clothing tostocks, controls to computers, insur-ance to electronics. The list goes onand on. Among the numerous applica-tions are: new product announcements,development of marketing campaigns,product reviews, customer seminars,employee benefit programs, annualstockholders meetings, employeeenrichment and motivationalprogramming, fund drives, etc.
Looking closer at some of theseprograms we find:
New Product Announcements--- aregular part of corporate satellitenetwork activity which can be anintegral part of an organization'ssales training program, used toeducate employees, or included in aplanned focus group directed towardcustomers.
54 y
Customer Seminars--- a popular wayto attract attention and focus infor-mation of interest to certain customergroups. Entire networks are designedand set up with the idea being tobring potential customers into thenetwork owner's place of business.Manufacturers readily invest pro-motional funds in satellite com-munications to increase sales andreduce the cost of doing business.
Training --- an effective method anda cost saving event for the companyusing satellite delivered instruction.Larger numbers of employees are ableto receive instruction at the sametime, which results in quicker imple-mentation of their new knowledge withworking teams also trained via thesatellite network. Training viasatellite frees employees to spendmore time on the job and reducestravel expense.
Traditional, costly multiple nationalsales meetings are no longer necessaryas corporations with satellite net-works now have national and inter-national meetings weekly, monthly orquarterly. Instructional programs areproduced and released to the employeesvia satellite, ensuring that all re-ceive the same information at the sametime. In many business circumstancesthis timely intonation can save theoriginating company many millions ofdollars and result in increased pro-duct sales. Employee time on the jobis increased, resulting in greaterproductivity. A happy employee is onewho is no longer required to makeendless business trips, thanks to liveinteractive television presentationson the corporate satellite televisionnetwork.
It should be noted that throughout theworld training needs of an organ-ization receive a great deal of dis-cussion by upper management, but onlyin a few selected locations is actionreally taken to support training. Itis, however, the customer that gen-erates the most interest in the mindof management. Training via satelliteis done more effectively in mostcases. Travel is reduced for theemployee. The staff is freed to spendmore time on the job. Traditionaltraining done via satellite reducesextended trips on the road. Thesetrips are becoming cost prohibitivereducing the amount of time beingallocated to valuable training. Thetraining is most likely to be an addi-tion to the network rather than aprimary reason.
e
55
Subscription networks are relativelynew in the business television world,having their inception in the latterpart of the eighties. With thesenetworks, viewers pay for the right toreceive programming designed to meetspecific needs. Networks which add-ress the financial community, auto-motive manufacturers and retailers,civil servants, such as police andfire departments as well as emergencyteams, all find it cost effective andeducationally beneficial to par-ticipate in subscription networks.These networks are becoming an inte-gral part of business television asthe power of numbers brings reducedcosts for the individual subscriber.An example is found in the LawEnforcement Network available through-out the United States. For a minimalfee, subscribers receive twenty-fourhour per day training and informationimportant to the law enforcementindustry. Top quality instruction andtimely information is now available tolaw enforcement officers no matter howsmall their departments may be.
These networks develop quickly, withthousands of subscribers, because ofthe need for services provided. Todate, the subscription network concepthas yet to find an application outsideNorth America, but the concept andtechniques are being studied in manyof the developing nations of theworld. We can expect to see a
dramatic increase in this type of
network within the next few years.One of the driving forces which willfacilitate this explosion is the heartof the latter part of this paper.
The newest entry into the businesstelevision arena is Special Purpose,Sponsor Driven, Satellite Networks.In this type of network very specialgroups are targeted for the deliveryof industry specific information andthose companies which produce productsfor each industry find it very attrac-tive to advertise to the special aud-ience groups.
A current example of a Special PurposeNetwork is the American TransportationTelevision Network. This network isdesigned to support the American truckdriver in providing him with industrynews, government plans and regu-lations, weather conditions, safetytips, lifestyle clips, and a greatdeal more, all designed to improvehis quality of life.
Advertisers are aware of the enormousbuying power of the trucking industryand are excited about spending theiradvertising dollars which are guaran-
teed to reach their target audience.Before the introduction of this net-work concept, target audiences wereaddressed as a part of mass mediaadvertising campaigns or little readpublications for the industry. Thisnew type of business television net-work and it's ultimate success dependson the advertisers' perception of theimpact generated by their specialtysales dollars.
Driving the growth of the subscriptionand the advertiser supported networks,in particular, is the new video com-pression technology. Electronic tech-nology is now making it possible touse only a small portion of the tele-vision signal and still reproduce thesame quality picture. Using this newtechnique it is possible to producemultiple broadcast sianals on a singlesatellite transponder. Video com-pression makes it possible to increasethe number of channels providing formore programming space, reduce thecost for satellite space segment, andopen new horizons for potentialprogrammers.
In today's satellite market, gettingoccasional transponder time when youwant it has been a problem for thebusiness television network manager.Digital compression increases tran-sponder availability and eliminatesthis stumbling block. Full imple-mentation of this technology will onlybe realized when PTT's offer thedigital service necessary for fullbroadcast quality service usingoccasional and fulltime transponderservice.'
Compressed full-motion technology isdestined for the desks of businessmenand women and will provide uniquebusiness applications in the future.This new technology must not be con-fused with the point-to-point digitalcompressed technology used on alimited basis to carry low qualitypictures on data lines. Compressedfull-motion technology is today'sstate of the art method of deliveringa television picture of noticeablybetter quality than the analog systemspresently in use throughout the world.
At this time, there are several com-peting technologies attempting to getthe business television world's atten-tion. Already in the marketplace isthe technology of Compression Lab Inc.In development and yet to be intro-duced are technologies by ScientificAtlanta, General Instruments, andseveral others. None of these tech-nologies support the new universalstandard being developed by the motion
56
picture experts group who are strivingfor a compatible standard to be imple-mented around the world.
Early users of this pre-MPEG IItechnology will have to be satisfiedwith their decision and take advantageof the current technology rather thanwaiting for the extended decision-making processes necessary for a uni-versal standard. Because the tech-nology is new it is difficult toforecast who will win. It is reason-able to assume that the technologywhich is already in the marketplacewill clearly have the lead. If thenew MPEG II introductions are sosignificant that they make the exist-ing systems obsolete, the early usersmay find themselves with a difficultcompatibility problem.
Problem free broadcast and'receptionservice is what the business tele-vision community demands. Respondingto their needs are network managementservice companies. These companiesare dedicated to handling every stepin the transmission and receptionchain. This leaves the messagedevelopment to the user. Satellitemanagement companies support theactivity of business television net-works in their country of origin. Afew are equipped to support businesstelevision around the world. Suchservice companies have the necessarycontacts with satellite owners, hard-ware suppliers and service techniciansthroughout the world to install andoperate an international network.
The digital revolution is here andbusiness television is poised to takefull advantage of this technology.Integration of full-motion video withcomputer generated data is and willcontinue to push the communicationsskills of the business community. Nopart of our world will be left out.As in the past, the business communityis providing the demand and technol-ogies are providing the solutions tothe communications needs of our world.
7 ti
ZAP, CRACKLE AND POP: Health Concerns in the U.S.as to Radio Frequency Electric and Magnetic Fields
Emitted from Telecommunications Facilities
Rachelle B. Chong, Esq.Graham & James
San Francisco, United States of America
An issue of increasing importance to telecommunications companies is risingpublic concern about the safety of non-ionizing radio frequency electric and
magnetic fields which emit from telecommunications facilities or devices.Litigation is growing as plaintiffs file suits against telecommunications
companies and claim their serious illnesses are caused by radiofrequency EMF.
1. Introduction
More and more attention is being placedon the issue of potential adverse healtheffects from non-ionizing electric andmagnetic fields ("EMF"). Although mostconcern about so-called "electromagneticpollution" has been focussed onextremely low frequency ("ELF") EMFemitted by power lines, the publicdebate has encompassed whether non-ionizing radio frequency ("RF") EMFassociated with cellular and microwavetransmission facilities, cellulartelephones, broadcast towers and videodata terminals may be harmful to humanhealth.
This concern is rising despite the factthat most scientists agree that thebiological effects of exposure to EMFare frequency dependent. Thus,although most scientists agree thathealth effects relating to extremely lowfrequency EMF cannot be generalized toradio frequency EMF, this point hastended to be lost in the public debate.Typically, sensationalistic pressreports that cancer may be linked toliving near high voltage power lineshave alarmed citizens and localagencies, who often jump to theconclusion that radio frequency EMF hasthe same physical effects as theextremely low frequency EMF emitted frompower lines.
This article reports on the status ofthe controversial debate in the U.S. asto whether non-ionizing RF EMFassociated with telecommunicationsfacilities may be linked to adversehealth effects in humans. A briefexplanation of radio frequency EMF isfirst provided, along with how the ELFEMF issue gained national attention.Activity by some of the most influentialpublic agencies--the federalEnvironmental Protection Agency and theCalifornia Public Utilities Commission,is then explained. A currently pendingFlorida lawsuit is then described as anexample of potential RF EMF lawsuitsthat can be expected to be filed againsttelecommunications companies. Finally,the author suggests steps that atelecommunications company may take toprepare and deal with this volatileissue, ranging from doing nothing,establishing educational programs,
57
considering low cost "prudent avoidance"techniques, funding of research,monitoring EMF-related legislation, andstrategizing for potential litigationclaims against a telecommunicationscompany.
2. What is Non-Ionizing RadioFrequency EMF?
All around and within humans are fieldsof electrical and magnetic energyemitted from natural sources such ashuman cells and the earth itself, aswell as from manmade sources, such ashousehold appliances, power lines,microwave ovens, and radio andtelevision broadcast transmitters. Thiskind of non-ionizing radiation has beenlong regarded by scientists to beharmless to human health. In layman'sterms, non-ionizing EMF is electricalenergy in a form that passes throughmatter without dislodging electrons fromatoms. The failure to dislodgeelectrons from atoms is why it is called"non-ionizing." When power to thesource of the non-ionizing radiation isturned off, the emissions of non-ionizing EMF stop completely.'
Two forms of electromagnetic energy thathumans are able to sense are heat andlight. Much of the spectrum ofelectromagnetic energy is invisible tohumans, however. The electromagnetic"spectrum" begins at the extremely lowfrequencies with long wavelengths, suchas 60 hertz EMF emitted by power lines,and continues up to X-rays and gammarays which have very high frequenciesand short wavelengths. In between thoseextremes lie radio waves, such asamplitude-modulated ("AM") andfrequency-modulated ("FM") radio waves,microwaves, infrared radiation, visiblelight and ultraviolet radiation. Thelatter are generally referred to as"radio frequency radiation" or "RFradiation."'
Prior to 1940, there was very littlenon-ionizing EMF in the ambient levelsof the U.S. environment. In the lastfive decades, however, the levels ofexposure have risen dramatically due toincreased output of non-ionizing EMF bypower lines, satellite microwavecommunications, telecommunicationsfacilities and radar. Many typical
ray7
American homes also contain additionalsources of non-ionizing EMF, such aselectric appliances, video displayterminals, televisions, radios, andcellular telephones. In short, themodern American is bombarded by non-ionizing EMF on a daily basis.
3. Sparking the Controversy
A 1979 Denver epidemiological study thatlinked childhood cancer to high voltagepower lines was the first scientificstudy to cause much attention to befocussed on the extremely low frequencyEMF issue related to power lines. Tworesearchers, Drs. Nancy Wertheimer andEd Leeper, found a connection betweenliving next to certain types of electricpower lines and childhood leukemia. A1982 study by the same scientists founda similar link between living nearelectric power lines and adult cancer.'
Although scientists generally agree thatshort exposures to non-ionizing EMF isharmless to human health, a minority ofscientists have sounded alarms thatchronic exposures, even at low levels,may be dangerous. Other scientists haveperformed studies which found noassociation between the development ofcancer and exposure to non-ionizingEMFs.' Still in progress are otherscientific studies focussing on theissue of whether non-ionizing EMFs causecancer.
In sum, a careful review of the EMFissue reveals that the clear consensusamong knowledgeable scientists is thatthe evidence is inconclusive as towhether non-ionizing EMFs cause cancerin humans. Until further studies aredone, the connection between non-ionizing EMFs and cancer remains only apossibility. Notably, these highlypublicized studies have focussed on non-ionizing EMF produced by high voltage 60Hertz power lines, which is theextremely low frequency portion of thespectrum. As noted previously, radiofrequency EMF is located much higher onthe EMF spectrum, and scientists agreethat no generalizations can be madeabout radio frequency EMF based on therelatively recent studies of the effectsof extremely low frequency EMF relatedto power lines. Nevertheless, theextremely low frequency EMF studies areimportant because they promptedwidespread public concern.
A popular writer named Paul Brodeurfurther ignited public controversy bypublishing a book, ominously entitled,"Currents of Death: Power Lines,Computer Terminals and the Attempt toCover up Their Threat to Your Health" inthe late 1980s. Brodeur is a New Yorkermagazine environmental reporter who haspreviously alerted his readers toenvironmental hazards posed by ozonedepletion and asbestos. Told like ariveting medical detective story,Brodeur's book can be characterized as a
58
dramatic argument that a few honestscientists have discovered that exposureto extremely low-frequency EMF(especially from high voltage powerlines) poses a grave danger to publichealth, but their efforts to inform thepublic are blocked by a massiveconspiracy of silence, denial andobfuscation ranging from theEnvironmental Protection Agency, theNational Institute for OccupationalSafety and Health, the OccupationalSafety and Health Administration, theFood and Drug Administration, the Officeof Management and Budget, variousbranches of the military, several of theDepartment of Energy's nationallaboratories, professional groups suchas the American Medical Association,state agencies, most of the NorthAmerican power companies, IBM, and BellLaboratories.
Brodeur's book primarily treated thetopic of extremely low frequency EMFemitted by power lines, but he alsoimplicated EMF emitted by video dataterminals as having potential adversehealth effects on humans. The Brodeurbook has been highly criticized byknowledgeable scientists who arguestrenuously that Brodeur deliberatelyoversimplified and misrepresented thecomplexity of the scientific process andthe evidence that it has produced.These scientists argue that, thus far,there is insufficient data to establishany link between extremely low frequencyEMF and adverse health effects. Whilesome studies have shown a link, otherstudies have not. Nevertheless, thebook has been very successful inincreasing the public's awareness of theEMF issue and shaping the way manyconcerned decisionmakers and citizensframe and think about the EMF issues.5
4. The Draft EPA Report
In October 1990, the federalEnvironmental Protection Agency ("EPA"),released in draft form a report,entitled "Evaluating the PotentialCarcinogenicity of ElectromagneticFields." The report reviews andevaluates published informationpertaining to the potentialcarcinogenicity of electromagneticfields, including both extremely lowfrequency EMF and radio frequency EMF.The information includes epidemiologystudies, chronic lifetime animal testsand laboratory studies of biologicalphenomena related to carcinogenesis. Itopined that, while there areepidemiological studies that indicate anassociation between electromagneticfields or their surrogates and certaintypes of cancer, other epidemiologicalstudies do not substantiate thisassociation. It tentatively concludedthat EMF is a "possible" carcinogen, butfound that there is insufficient data todetermine whether or not a cause andeffect relationship exists, and furtherresearch seems warranted.
The draft report, which was stamped"DRAFT - DO NOT QUOTE OR CITE," wasimmediately quoted in the press andbecame a matter of public controversy.The controversy centered around newsreports that some of the EPA's staff hadrecommended that EMF be rated as a"probable" (as opposed to a "possible")human carcinogen. News accountsreported that due to alleged concerns bythe EPA and White House as to the publicpolicy implications of such apronouncement, the EMF cancer risk wasdowngraded to "possible" by order of anEPA official after consulting with WhiteHouse officials.`
The Science Advisory Board of EPAreviewed the draft and concluded itneeded substantial revision, because itfailed to consider critical researchpublished since 1989, it contained
insufficient data to conclude that EMFsare carcinogens at all, and there wereinsufficient information to designatespecific values of magnetic fieldsstrength that may be hazardous to humanhealth. Due to these comments, it maybe early to mid-1993 before the finalEPA report is issued.'
In reviewing the EPA draft report fromthe point of view of telecommunicationscompanies, the draft report apparentlyfailed to differentiate adequatelyenough between extremely low frequencyEMF and radio frequency EMF. Manyreviewers who filed comments on the EPAdraft report have made the point thatexposures to extremely low frequency EMFmay not support evidence of the sameeffects following observations fromexposures to radio frequency EMF andmicrowaves. The main reason given isthat electric and magnetic fields'mechanisms of interaction with, andeffects on, biological systems areentirely different for lower versushigher frequencies, and thus, reportedfindings of health or biological effectsshould be presented in a manner thatrecognizes such a difference.°
The importance of the final EPA reportwill be great. At last, there will be areport based on a comprehensive federalgovernmental study that can be used asevidence in court, before stateregulatory agencies, and in craftinglegislation.
5. The California Public UtilitiesCommission Investigation
Stepping into the fray have been somestate agencies. For example, theCalifornia Public Utilities Commission("CPUC") is the state agency thatregulates utilities, including electricand gas companies, landline telephonecompanies, cellular telephone companies,and radio telephone utilities. InJanuary 1991, the CPUC opened its firstcomprehensive EMF investigation "to
59
explore the scientific evidence relatingto possible health effects, if any, ofutility employees' and consumers'exposure to electric and magnetic fieldscreated by electric utility powersystems," and to examine "the range ofregulatory responses which might beappropriate." It indicated it wouldexamine four possible alternatives ofregulatory responses: (1) no actionbecause there is not enough evidence towarrant action; (2) restrict anyincrease in exposure but leave thepresent levels of acceptable exposure asthey are; (3) adopt a new policy of"prudent avoidance" which limitsexposures where they can be avoided withrelatively small amounts of time andmoney; and (4) if the evidence suggestsa serious health problem, commitsubstantial time and money to anaggressive program of limiting EMFexposure.
In its order instituting theinvestigation, the CPUC named bothelectric utilities and cellularradiotelephone utilities ("cellularcarriers") as respondents. The CPUCspecifically included within the scopeof its investigation cellular telephonefacilities over which the CPUC hasenvironmental review authority.
The cellular carriers were dismayed atbeing lumped into a proceeding with theelectric utilities into what theyforesaw as a major investigation on theextremely low frequency EMF issuesrelating to power lines. The cellularcarriers feared that the CPUC may beconfusing the power line EMF issues withissues related to the low level radiofrequency EMF produced by cellulartransmission facilities. The cellularcarriers then adopted a strategy thatother telecommunications companies mayfind helpful when faced with similaragency investigations.
First, the significant first step wasthat the cellular carriers got together
and hired one counsel and experts torepresent their common interests.Second, they filed a motion to have theinvestigation split into two phases, onephase for the electric utilities and theELF issues related to 60 Hertz powerlines, and the second phase to addressissues related to radio frequency EMFreleased by cellular transmissionfacilities. The cellular carriers'motion was granted.
Finally, the Cellular CarriersAssociation of California and thenational Cellular TelecommunicationsIndustry Association filed jointcomments in the CPUC investigation inApril 1991. These comments contendedthat the scientific community'sconsensus was that the very low levelemissions from cellular transmissionfacilities are safe and do not in anyway pose a danger to the health of thegeneral public. This conclusion was
C . )
supported by expert testimony from twoexperts in the field.' The experttestimony argued that the power densitylevels of emissions from cellulartransmissions to which the public isexposed are well below permissibleexposure standards set by numerousindependent scientific bodies to ensurethe health and safety of the public."Their conclusions were supported byactual measurements taken in and aroundcellular transmission facilitiesoperating at maximum power. Thesemeasurements demonstrated that the powerdensity levels in the vicinity of suchcellular facilities are significantlylower than the permissible exposurelevels that have been scientificallydetermined to be safe."
The cellular carriers also explained inlayman's terms where cellular operatedin the radio frequency spectrum, anddistinguished the ultra high frequency("UHF") radio wave transmissions ofcellular carriers from the fieldsassociated with electric power lines.The experts emphasized that, unlike thescientific research conducted in the ELFEMF area, there are over 10,000scientific papers and referencesrelating to studies of biologicaleffects associated with radio frequencyexposure. These papers and referenceshave served as a database for thesetting of permissible exposure levelsto ensure public protection from adversehealth effects from radio waves.Testimony was offered showing that, asindicated by the scientific data, andthe actual field measurements, powerdensities from cellular facilities aresubstantially lower than the levelsreported in the scientific literature ascausing any biological effects, and wellbelow both National Council on RadiationProtection and Measurements and AmericanNational Standards Institute permissibleexposure standards. Consequently, thecarriers argued that the probabilitythat any member of the general publiccould be exposed to hazardous levels ofRF radiation from a cellular facilitiesis "essentially zero." Thus, thecarriers argued that no activeregulatory response was warranted atthis time to protect the public fromcellular transmissions.
At this time, the CPUC has formed aconsensus group to recommend to theCommission the issues to be addressed inthe cellular phase of the EMFinvestigation. No hearing or decisionhas issued to date.
6. Radio Frequency EMF Issues Relatingto Cellular Telephones
A. Florida Lawsuit
Lawsuits involving radiofrequency EMFissues are beginning to be filed morefrequently in the United States. OnApril 11, 1992, a complaint was filed inthe Circuit Court for Pinellas County
60
Florida by a woman, Susan Ellen Reynard,and H. David Reynard, Jr., her husband,against the following defendants: (1)NEC America, Inc. ("NEC"), the
manufacturer of Mrs. Reynard's cellulartelephone; (2) Coastal Radiotelephone,Inc. ("Coastal"), the entity which soldthe cellular telephone to Mrs. Reynard;and (3) GTE Mobilnet of Tampa, Inc.("GTEM"), Mrs. Reynard's cellularservice provider.
The complaint alleges that in May of1990, Mrs. Reynard was diagnosed with abrain tumor which resulted in cancer.The complaint alleges that the tumor wasa result of radiation emitted by acellular telephone used by Mrs. Reynard,or if not caused by such radiation, thetumor was aggravated by the cellulartelephone's emissions. It furtherclaims that emissions from the cellulartelephone were so positioned "as tocause exposure to microwave radiation inan excessive and unsafe amount to theportion of the brain where the tumor wasfound to exist."" The cellulartelephone is alleged by plaintiffs to be"unreasonably" dangerous for use becauseit exposed the brain of users todangerous, hazardous and excessivemicrowave radiation, it was not equippedwith shielding devices which could havebeen provided by the manufacturer, theproduct was not marketed with warningsas to the hazard or instructions on howto avoid the hazard, the telephonefailed to meet accepted standardssetting maximum levels of exposure tomicrowave radiation, and no informationwas provided at the time of purchase orlater which provided precautions as tolessen the risk of injury from thehazardous condition.
The plaintiffs requested relief asfollows: (1) against NEC for negligencein the design or manufacture or sale ofthe cellular telephone and for stricttort liability in the sale ordistribution of the cellular telephone;(2) against Coastal for negligence andstrict tort liability as to the sale ofthe telephone; and (3) against GTEM fornegligence and strict tort liability inthe operation of its microwave system soas to cause excessive microwave exposureto Mrs. Reynard. The plaintiffsrequested unspecified punitive damagesand a trial by jury. After filing thesuit, Mrs. Reynard died on May 24, 1992.
All the defendants have filed motions todismiss the case, and the suit iscurrently in discovery. Cellularcarriers, equipment manufacturers, andretail outlets of telecommunicationsequipment may desire to monitor thiscase to see what the Florida state courtdecides.
Other examples of lawsuits that havebeen filed against telecommunicationscompanies include:
I 6
Settlement of a case brought by ahusband and wife whose summer homeis located near an FM broadcastingtower. The plaintiffs claimed theexposure caused the husband todevelop terminal Hodgkin's lymphomaand the wife to have increasedsusceptibility to cancer." Theyalleged that certain non-ionizingEMF "hot spots" measured on theirproperty exceeded both the FederalCommunications Commission ("FCC")and the American National StandardsInstitute standards by a factor of10, although most levels in thehouse were significantly below themost stringent U.S. exposurestandards.
A Washington widower receivedcompensation in a wrongful deathaction based on his wife's allegedexposure to non-ionizing EMFemitted from an AM radio tower."
B. Brits Initiate Survey onSafety of Cellular Telephones
In Britain, a $1.5 million dollar surveybacked by the government has beenlaunched in June 1992 to look into thepotential radiation risks of the mobiletelephone. The survey is acollaboration between three Britishuniversities and eight telecommunicationcompanies, including Cellnet, Vodafoneof Britain, and Motorola of the UnitedStates. News reports state thatalthough risks are thought to beminimal, the three-year study will lookat any health dangers from high-frequency EMF emitted by the mobiletelephones. One theory that is beinginvestigated is whether the mobilephones can damage the user's health byheating up parts of the brain. Alsobeing studied is the interaction betweenradio waves and brain tissue.
7. Preparing to Deal with EMF Issues
Given the raising of the public'sconsciousness about EMF, what should aprudent telecommunications company do toprepare for EMF issues? Here are somepractical suggestions:
Do nothing.
A company can always do nothing. Butwhat risk do it take via inaction? Whatwill happen if a lawsuit is filedagainst the company? How will itdefend its actions?
First, what would these suits likelyallege? Traditional toxic tort legaltheories can be asserted in a radio-frequency EMF exposure case. Aplaintiff could allege negligence andstrict liability on grounds that thedefendant telecommunications companyfailed to use the highest degree of carein protecting its employees or thepublic from exposure to radio frequencyEMF. Strict liability could be used if
61
the plaintiff can show that the radiofrequency EMF was produced or used undercircumstances that constitute abnormallydangerous activity. For example, theFlorida lawsuit discussed above allegedboth negligence and strict liabilityagainst the cellular telephonemanufacturer, the seller of thetelephone, and the cellular carrier.
Recently, EMF cases have even allegedtraditional legal theories of nuisance,trespass and battery. Nuisance andtrespass are possible depending on thecase facts. Battery may be available ifit can be shown that the producer of EMFknew it was causing the contact withplaintiff, and the producer of EMF knewthe contract was regarded by theplaintiff as offensive. Other lesstraditional theories are alwaysavailable too; for example, it has beenasserted in EMF cases that a plaintiffshould recover for increased risk ofadverse health effects and for fear ofcancer. On the other hand, courtstraditionally have insisted that aplaintiff prove present physical injuryin order to recover on such theories.Thus, a plaintiff would likely useexpert testimony to show that exposureto RF EMF has either caused cancer, orhas caused adverse biological effects atthe cellular level even if not yetobservable.
Finally, the issue of whether RF EMF canbe harmful to human health has beendiscussed for many years. A plaintiffcould request punitive damages ongrounds that the defendants knew orshould have known that radio frequencyEMF is harmful to human health, and thatdefendants failed to take affirmativesteps to prevent exposure that was atharmful levels. Thus, the potentialliability for doing nothing can be veryhigh.
Establish an educational program onradio frequency EMF for customers andemployees.
Another recommended option that isrelatively easy to effectuate is toestablish an educational program forcustomers and employees. Designate anEMF officer at your company, and make itthis person's responsibility to monitor
EMF issues, and be available to discussthe issue knowledgeably with youremployees and the public.
Consider putting together aninformational brochure discussing whatradio frequency EMF is, how it differsfrom extremely low frequency EMF relatedto power lines, and summarizing thescientific body of knowledge to date. Anumber of the large cellular carriers,such as McCaw Cellular CommunicationsInc. and PacTel Cellular, have suchbrochures available and distribute themto land use agencies, concernedneighbors, and the press.
Another recommendation is to hire anindependent expert to measure radiofrequency EMF levels at a typicaltelecommunications transmission facilityand have the expert opine under penaltyof perjury in a report that the measuredlevels fall significantly below the moststringent current national exposurestandards. Have this report ready todistribute to interested persons.
Undertake limited "prudent avoidance"measures.
A company could also undertake somelimited "prudent avoidance" measures,which means a policy of voluntarilylimiting EMF exposures when they can beavoided with relatively smallinvestments of money and effort. Thisis one option being considered byvarious states and the EPA.
To effectuate this, one could simplytake some low cost precautions, forexample, placing EMF-emitting devicesaway from populated areas, addingfencing or safety zones around suchdevices, or adding shielding to EMFemitting devices during manufacture.For example, in Florida and New York,there are rules which require electricutilities to have magnetic fieldstrengths for their transmission lineright-of-ways no higher than 200milligauss at the edge of the right-of-way. Similarly, in Colorado, the PUCfound that, despite the absence ofcertain data, "prudent avoidance"dictated that a transmission lineupgrade be conditioned on the use ofsome EMF reduction mechanisms and on thesubmission of a plan by the utility forfurther EMF research.15
Fund research on radio frequency EMF andthe portion of the radio spectrum inwhich your company operates.
Another option is to assist in fundingresearch on the radio frequency EMFissue in the portiu.1 of the radiospectrum in which your company operates.This will add to the body of scientificknowledge on the issue and help dispelunfounded fears.
Monitor and promote legislation relatedto radio frequency EMF.
Telecommunications companies also maywish to monitor, draft, or promotelegislation regarding RF EMF. Themonitoring could be performed by your RFmonitoring officer, or through yourindustry's association to save costs.Clearly, EMF legislation is increasing,as interest in this area becomes morewidespread.
Develop strategies for the defense ofpotential litigation claims.
One may also begin strategizing as topotential defenses for possiblelitigation claims as to radio frequencyEMF. Retention of knowledgeable counsel
62
and experts is recommended. They canassist you in strategizing to form yourdefenses, including traditional defensessuch as contributory negligence,comparative negligence, or assumption ofthe risk. Naturally, a defendant willlikely argue that exposure to radiofrequency EMF is not harmful and couldnot be the cause of the plaintiff'sinjury. Hiring an expert would beInvaluable in order to prepare a summaryof the scientific body of knowledge tomake the point that so far, there is noscientific "proof" that radio frequencyEMF causes cancer.
A defendant can also explore whetherthere are any so-called "confounders"which refers to some other occupational,environmental or lifestyle risk factorwhich could be the cause of plaintiff'sinjury. For example, the defendantcould allege that it was plaintiff'sfive-pack a day smoking habit whichcaused the lung cancer, not theplaintiff's proximity to a radio tower.
Also, a defendant can attack theplaintiff's expert with the usualstrategies. For example, the followingarguments can be employed: theplaintiff's expert is not qualified toopine on this specialized area or isexpressing opinions that lack adequatescientific support; the expert'smeasurement of the radiation dosage waserroneously performed; or the expert'sreliance on scientific studies showingEMF harm do not pertain to the part ofthe EMF spectrum at which thedefendant's radio frequency operates.
8. Conclusion
The implications of the EMF issue willtouch on a far-reaching variety ofindustries due to modern society'seconomic infrastructure which isdependent upon the availability ofwireless communications and availabilityof electricity. Industries and publicentities that are likely to be affectedinclude telecommunications andelectrical equipment manufacturers,retailers of telecommunicationsequipment, telecommunications companieswith systems in densely-populated areas,local governments planning land use,developers who may be required to setaside land as buffer zones, school orpark districts and other public agenciesthat require open space, designers of
office buildings and structures equippedwith generators, and medical diagnosticequipment manufacturers. A prudenttelecommunications company should becomefamiliar with the issue and monitorrecent events, in order to be wellprepared to deal with the EMF issue orthe possibility of a lawsuit.
Copyright ° 1992 by Graham & James
ENDNOTES
1. Compare "ionizing radiation," whichis commonly called "nuclearradiation," which is used inmedical X-rays, nuclear powerplants, nuclear weapons, and whichcan dislodge electrons and otheratomic particles as it passesthrough matter. The radioactivematerials that emit may continue toproduce potentially harmful energyfor a few seconds or for hundredsof years, depending on thematerial.
2. The radio frequency part of theelectromagnetic spectrum isgenerally defined aselectromagnetic radiation withfrequencies in the range from about3 kilohertz to 300 gigahertz.Federal Communications CommissionOET Bulletin No. 56, Questions andAnswers About Biological Effectsand Potential Hazards ofRadiofrequency Radiation, at 1-2(3rd ed. January 1989).
3. Wertheimer & Leeper, electricalWiring Configurations and ChildhoodCancer, 109 AM. J. EPIDEMIOLOGY273-84 (1979); Wertheimer & Leeper,Adult Cancer Related to ElectricalWires Near the Home, 11 INT'L J.EPIDEMIOLOGY 345-55 (1982).
4. Creasey, Extremely Low FrequencyElectric and Magnetic Fields andCancer: A Literature Review, 1-8(Electric Power Research InstituteDecember 1989).
5. In December, 1992, Brodeurpublished a lengthy article in theNew Yorker magazine about a groupof California teachers who havealleged an official runaround afterspending two years trying to findout if high-voltage power lines areresponsible for 14 cancer cases atLouis N. Slater Elementary Schoolin Fresno, California. Thisarticle will surely continue toincrease attention to the issue.
6. Strauss and Bernard, EMF and theStates: Time for a New Perspective,The Electricity Journal, Jan./Feb.92, at note 1.
7.
8. See, for example, Comments ofCommittee on Interagency RadiationResearch and Policy Coordination,dated Aug. 5, 1951, at 2. See alsoComments of ElectromagneticResearch of the Department ofEnergy, dated May 23, 1991, at 2("A major problem and weakness ofthe Executive Summary is
generalizing across RF and ELFradiation. . . It is a mistake toattempt to cover both RF and ELF inthe same document as it as led tounjustifiable generalizations.").
9. The experts were Dr. Arthur W. Guy,Professor and Director of theBioelectromagnetics ResearchLaboratory, Center forBioengineering at the University ofWashington, and Dr. DonaldJustesen, Professor of Psychiatryat the University of Kansas Schoolof Medicine.
10. The permissible exposure standardscited by the respondent cellularcarriers were the National Councilon Radiation Protection andMeasurements ("NCRP") and theAmerican National StandardsInstitute ("ANSI").
11. Actual measurements of cell sitesoperating under maximal operatingconditions with all channelsbroadcasting simultaneouslydemonstrated, that, even underthese conditions, the power densityreading represented only 1% of thecurrent ANSI permissible exposurestandard. Typical energy levelsassociated with cellulartransmissions are several hundredtimes below the NCRP permissibleexposure standard for cellularradio frequencies (800-900 MHz).
12. Complaint, Susan Ellen Reynard. etal. v. NEC America. Inc. et al.,Circuit Court for Pinellas County,Florida, Case No. 92-1750-CI-011,filed Apr. 11, 1992, at 2.
13. Main v. Jefferson-PilotBroadcasting Co., No 88-B.1461 (D.Colorado., April 9, 1990).
14. Diluzio v. RGA Radio. Inc., No. 86-2- 03790 -4 (Wash. Spokane Cty.,Super. Ct., filed Jul. 30, 1986).
15. In the Matter of Public Service ofColorado to Have Upgrades inDouglas County, Docket No. 89A-028E(Dec. 20, 1989), note 1, at 21-22;Elec. Util. Week, Jan. 22, 1990, at1 and 10.
Risk, Security, and Policy Considerationsin the Use of Computer and Communications Technology
in Financial Management
Hyung-Min Michael ChungDepartment of Business Analysis and Research
Graduate School of BusinessTexas A & M University
College Station, TX 77843-4217U.S.A.
ABSTRACT
With today's advancing technologies, electronic transactions havecreated new risks, security problems, policy issues, and serviceperformance issues. This paper describes the current status ofthe risk and security issues involved in the electronic transmit-tal of financial transactions. The research further considersthe tradeoffs among security, costs, convenience, and risk.
1. Introduction
The financial management system inthe corporate environment has changeddramatically due to the rapid advance-ments in computer and telecommunicationstechnology. With the use of the infor-mation technology, financial transac-tions occur more frequently and morerapidly while the relative cost ofinformation processing decreases.Technology affects the future price andmix of financial services offered, andplays a vital role in day to day opera-tions of financial business functions.For example, electronic funds transfer(EFT), automatic teller machines, andcash managemeniftechniques are just afew of the new applications being of-fered.
However, as changes in informationand communications technology revolu-tionize the financial services, signifi-cant issues have come to light withregard to the present public policyregulating the financial services andtransactions. Partly because manypremises of current policies in mostcountries were based on an industry thatwas not automated, the regulations arebeing questioned as to their relevanceand appropriateness in the new technolo-gy dependent applications. Althoughfundamental policy objectives, such asfostering institutional stability andintegrity or protecting consumers,remain the same as in the past, thefocus of current regulation needs toinvolve access to services, system
security, privacy, and effects ofchanges in telecommunications industry.
For example, there appears to be acompromise between system access securi-ty and control versus convenient custom-er access and service price in some ofthe major electronic funds transfernetworks which amounts to approximately$1.29 trillion every banking day. Ahuman mistake in the New York StockExchange caused the Dow Jones IndustrialAverage to fall nearly 12 points, whichresulted in a 1.57 point loss for theday. Financial managements are vulnera-ble to computer and communication tech-nologies (Neumann, 1992; Chung andMcGowan, 1992).
The use of computer and communica-tions technology creates a dramaticneed for new regulations. New policieson the problems related to excessivedaylight overdrafts and wire transferliabilities are to be established. Infact, there has been a tradeoff betweenreducing payments system risk -1.nd pro-moting payments system liquidity. Withtoday's advancing technologies, elec-tronic transactions have created newrisks, security problems, policy issues,and service performance issues.
We need to understand the currentstacus of the risk and security issuesinvolved in the electronic delivery offinancial transactions. Furthermore, itis necessary to evaluate the tradeoffsamong security, costs, convenience, andrisk and the policy considerations.The following sections describe therisks inherent to participant in elec-
64 L''I
tronic payment systems and securitymeasures as well as policy alternatives.
2. Risk
Four general categories of risk relatingto payment systems have been identified:operational risk, credit/settlementrisk, fraud risk, and money launderingrisk. The main risks associated withfunds transfer include the latter threeitems:
Settlement Risk
One issue of concern to the FederalReserve is the creation of daylightoverdrafts, which can be directly at-tributed to the electronic paymentsystems. The Federal Reserve requiresall depository institutions to have apositive balance in their reserve ac-count at the close of the business day.Daylight overdrafts are the deficientamounts or negative balances that re-serve accounts may have prior to finalsettlement at the end of the day.Daylight overdrafts can be the resultsof intentional or unintentional mis-matching of payments and receipts.Unintentional overdrafts often resultfrom poor planning, inadequate communi-cation, or computer problems. On theother hand, intentional overdrafts mightinvolve borrowing federal funds fromanother institution as an overnight loanin order to maintain a positive end-of-day balance (VanHoose and Sellon, 1989).
The biggest risk associate with daylightoverdraft is that of default. Sincethese overdrafts are viewed as unsecuredloans, they expose the Federal Reserveand other financial institutions topotentially serious financial loss.
Fraud Risk
Another risk to the large-dollar fundstransfer networks is fraudulent trans-fers. Because most payment orders aretransmitted electronically, a bank maynot know whether a funds transfer hasbeen authorized by its customer. Inter-
65
nal collusion is also a big threat forfinancial institutions (Ahwesh, 1991).
Money Laundering Risk
Money laundering is a risk associatedwith the use of electronic paymentsystems to move the proceeds of illegalactivities.
3. Security
Most safeguards may be grouped into fourcategories: physical security, accesscontrols, encryption, and administrativecontrols: Physical security measuresrefer to the limited access to terminalsand computer operations areas to onlythose individuals who require access toperform their duties. The use ofguards, surveillance equipment, and cardkey access devices are the most commonlyused tools for physical security.Access controls refer to both softwareand code words that are used to preventunauthorized access to sensitive dataand programs. Next, encryption involvesthe scrambling of a message sent fromone party to another to protect theconfidentiality and integrity of elec-tronic transactions. Lastly, adminis-trative controls refer to the employmentpractices, separation of duties, andsoftware development standards in placeby an organization. Such security meas-ure as password, callbacks, algorithms,encryption, authentication, and smartcard are possible controls that can bein place when transfers are initiated(Brandon,1991; Cocheo, 1991; Fischer,1988) .
4. Policies
Important policies focus on the problemsrelated to excessive daylight overdraftsand wire transfer liabilities.
Daylight Overdraft Regulations
In order to slow the growth of over-drafts on Fedwire and reduce payment
system risk, the Federal Reserve hasimplemented a policy highlighting twofeatures: overdraft caps and the pricingof daylight overdrafts. The firstmethod of reducing daylight overdraftsplaces a limit on the amount of intradaycredit available in individual institu-tions. Those who exceeding their over-draft caps are penalized by limitingtheir ability to conduct additionaltransfers on the wire systems (VanHooseand Sellon, 1989). Along with thesecaps, the Federal Reserve has estab-lished a pricing scheme to charge insti-tutions for daylight overdrafts. Underthe pricing scenario, institutions wouldbe charged for the average intradayoverdraft that exceeds a deductibleequivalent to a certain percentage ofcapital (Ahwesh, 1991).
Wire Transfer Liabilities
The Uniform Commercial Code requiresthat the use of security procedures beestablished by agreement between acustomer and a bank for the purpose ofverifying a payment order or any commu-nication amending or canceling a paymentorder (Brandon, 1991). The other issuesaddressed by the Code deals with errone-ous payment orders in which a customerand a bank have agreed on a securitydevice to detect erroneous paymentorders.
5. Tradeoffs
The increased use of electronic paymentshas clearly improved the efficiency offinancial markets by lowering the costsand increasing the speed of transac-tions. However, there has been aclear tradeoff between reducing the riskof payment system and promoting paymentsystem liability. Overdraft policiesand security devices are the two mainfactors that can affect the performanceof payment systems. Without regulatedoverdrafts, the obvious advantage is theresulting increase in speed at whichpayments can be sent or received. Withthe implementation of overdraft caps andpricing of overdrafts, payment process-ing will be slower because institutionswill need to synchronize electronic
66
funds flow to avoid unnecessary ex-penses. As a result, the gains fromreducing the risk of payment systemagainst the costs of reduced paymentssystem liquidity need to be balanced(VanHoose and Gordon, 1989).
As far as the security measures areconcerned, the more secure the transfersystem is, the more delay in transactionprocessing will occur. Often customersmay adopt less secure procedures becauseof the costs associated with the actualsecurity devices, such as authenticationdevices, and the costs associated withthe transfer delays resulting from thehigher level of security. Tradeoff mustbe considered among security, costs,convenience, and risk.
6. Conclusion
Trends in financial institutions decen-tralized operations, network, and opensystems--will promote the electronicutility of delivering enhanced servicesto customers. With the globalization ofthe banking networks, financial serv-ices market face the events of 24-hourtrading, payments over the electronicfunds transfer systems in differentcountries made in different currencies,and difficulties in establishing globalnetwork regulations. In this paper,risk , security, and legal issues af-fecting international EFTs have beenrecognized: Issues associated with thepayment process, electronic recordkeep-ing, and the institutional structurewithin which an EFT system operates havebeen addressed. There is a compellingneed to address these concerns in theelectronic financial transactions as thetechnology advances rapidly and becomesavailable economically.
References
Ahwesh, C., "Who Pays for Risk in World-wide EFT Networks?" Information Strate-gy: The Executive's Journal, 7, Spring1991, pp 21-26.
Brandon, G., "New Rules on Tap forBusiness Wire Transfers," The BankersMagazine, 174, March-April 1991, pp 35-
C.
39.
Chung, H. M. and McGowan, A., "SystemsIntegration in Electronic Data Inter-change," working paper, Graduate Schoolof Business, Texas A & M University,1992.
Cocheo, S., "Keep the Lid on Wire Trans-fer Fraud," ABA Banking Journal, 83,January 1991, p 39-45.
Fisher, M., "Electronic Funds Transfer:Controlling the Risk," Journal of Ac-countancy, 165, June 1988, pp 130-133.
Neumann, P., "Fraud by Computer," Commu-nications of the ACM, 35, 8, p 154.
VanHoose, D. and Sellon, G., "DaylightOverdrafts, Payments System Risk, andPublic Policy," Economic Review, 74,September-October 1989, pp 9-29.
67
Low Cost Information GatewaysR. F. Cruickshank and T. D. Schoechle
CyberLYNX Gateway CorporationBoulder, CO, USA
AbstractInformation Gateways that provide energy management, information services, and building automation
have been developed and are undergoing trials in the field. Gateways are available for interconnecting variousWide and Local Area Networks (WANs and LANs). Depending on specific applications, each gateway isconfigured with appropriate WAN and LAN interfaces and operating software. Both current and futuregeneration gateways integrate previously separate data conversations and thus 1) reduce communicationscosts and 2) expand communications applications.
Communications TodayToday, communications users typically have access to
more than one WAN in their home and workplace. Themost common WAN is the telephone network, and almosteveryone has ready access to telephone service. Anothercommon WAN is cable TV. which passes in front of 90%and is actually wired into over 60% of U.S. homes.Satellite service is another WAN, cellular telephone isanother, and so forth. Various WAN connections to acustomer premises are shown in Figure 1.
Figure 1.WAN connections to a Home
Radio
U ility
SatellitoN
N
PLC
Te Co orCable TV
CustomerPremises
Today, users wishing access to these WANs mustprovide individual interfaces to get "hooked up" to aparticular WAN. If more than one device will use theWAN, or if multiple WANs are used, many costly inter-faces that don't interoperate must be provided by users.
Consider the proliferation of facsimile (Fax) machinesand data modems for personal computers; each has adedicated telephone interface, and each operates withoutknowledge of the other (often to the user's disservice).Many newer phone answering machines hang up when auser picks up an incoming call after the "machine" hasanswered itbut for years this was not so. Further, Faxmachines and personal computer data modems may neveryield the phone line for someone wishing to call in or out.These types of problems have led to the proliferation of
68
multiple phone lines to homes, and to a much greaterextent, commercial spaces. It is very rare today to find abusiness with only one phone line. Even the smallestbusiness may have three or four lines (at a monthly cost ofapproximately $50.00 per line), with one usually dedi-cated to Fax service.
It has been said that we "live in the Information Age,"and many predict a proliferation of connectivitybut thismeans more interfaces and costly specialized connectionsunless gateways are used.
What is a Gateway?An information gateway is a communications control-
ler or "data switch" between dissimilar networks. It has amicroprocessor andinemory and is programmable to "talk"in the native language of each WAN and/or LAN to whichit is connected. A functional block diagram of a simplegateway with a single WAN and single LAN connection isshown in Figure 2.
Figure 2.Information Gateway with single LAN and single WAN
HWAN WAN LANMedia Driver & Driver Media
Memory
A gateway may connect to one or more WANs andLANs. It is able to transfer information across theseconnections (interfaces). A gateway with many possibleconnections for various WANs and LANs is shown inFigure 3 (the vertical line along the wall of the buildingrepresents the gateway).
Figure 3.Information Gateway with many LANs and WANs
Optical Fiber
Wireless Broadcast
POTSCellular Radio
Cable
PowerlineCarrier
Power Line Carrier
Satellite HardwireCable TV
ISDN
PCN tiff CEBus
ApplicationsThe Information Gateway may be installed in two
possible locations: either on the customer's premises or ina location which is able to serve several customer premisesat once.
One Gateway Per BuildingA gateway may be mounted on or inside a building.
Communications between local hardwired or powerlinedevices (meters, load control devices, information termi-nals, etc.) and remote hosts is provided. A hardwire orConsumer Electronic Buslii (CEBus) powerline LAN andtelephone WAN are shown in Figure 4 (other options areavailable).
Figure 4.Customer Premises Gateway
Powerline
Phone
MetePricing Display
Hardwire/CEBus LAN
Line GATEWAY)Utility Tele° Customer
One Pole Mounted Gateway Serving SeveralBuildings
Alternatively, a gateway may be mounted on a utilitypole or pedestal. Communications between local power-line devices (meters, load control devices, informationterminals, etc.) and remote hosts provided. A CEBuspowerline LAN and telephone WAN are shown in Figure5 (other options are available).
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Figure 5.Pole Mounted Gateway Serving Several Premises
SecondaryPowerline
w/CEBus PLC
Powerline Metor
Building 1
Utility TelCo
PhoneLine
GATEWAY Building n
There are a plethora of applications ranging fromenergy managemene2), to data acquisition/process control,to information services, depending on where a gateway isinstalled and the needs of the customer(s). Some of themany possible applications are listed in Table 1.
Table 1.Information Gateway Applications
Energy Management- Utilize digital output ports:
Individually control AC or DC loads- Utilize digital input ports:
Read pulse utility metersRead serial utility metersMonitor loads or consumption
- Utilize analog input ports:Read voltage, current, temperature, etc.
Utilize RS-232 port:Send realtime or time of use pricingSend usage and billing informationAllow customer access to usage and billing info.
Information ServicesUtilize RS-232 port for enhanced network and otherinformation services such as:
Caller IDElectronic Yellow and White PagesHome ShoppingHome Banking
Building and Other Automation- Utilize RS-232 and Input/output ports:
SecurityLighting controlHeating and air conditioning controlProcess monitoring and controlSubstation Supervisory Control and Data Acquisi-tion (SCADA)
High Speed Data Concentrator- Utilize several RS-232 ports:
Transaction processing (cash registers)Credit card verifiersIntegrated voice/data
:.)
MarketsThere are at least three major markets for information
gateways: 1) mass residential/commercial, 2) small busi-ness, 3) work at home. By far the most attractive is thecombined residential and commercial "intelligent networkinterface" market. With 100 million homes in the U.S. andtens of millions of commercial buildings, the volume ofproducts and services that could be moved in this marketis incredible. However, in the event that it is too early formass deployment of gateways for Energy Management,Information Services and Automationthe small busi-ness and work at home markets should be considered(please see High Speed Data Concentrator application inTable 1). Because of the high cost of maintaining severalphone lines, these markets would support a higher (entry)priced gateway and could be a starting point for deploy-ment until gateway prices dropmaking mass deploy-ment in the residential and/or commercial market(s) fea-sible.
Configuration OptionsApplications drive the configuration of a gateway'''. If
a gateway is to be an intelligent network interface, then itwill likely be installed at the network-to-customer point ofdemarcation (i.e., network termination). Depending onwhich communication company is providing service, oneor more WANs may be used. Depending on local areaapplications to be supported, one or more LANs may beused. Various WAN and LAN options are shown in Table2.
Table 2.WAN and LAN Options
Wide Area NetworksPlain Old Telephone Service (POTS)
- Integrated Services Digital Network (ISDN)- Utility Telemetry Trunk (MT/UTS)- Cellular Telephone- Personal Communications Network (PCN/PCS)- Cable TV/ Satellite- Packet Radio
Broadcast radioLocal Area Networks- Plain Old Telephone Service (POTS)- Integrated Services Digital Network (ISDN)
Cable TV- Hardwire Digital Outputs- Hardwire Analog & Digital Inputs- RS-232- X-10
Powerline CarrierRadio Frequency
Consumer Electronic Bus (CEBusrm )Powerline CarrierRadio FrequencyTwisted PairCable TV
70
Infra-red- Echelon LONTM'
Powerline CarrierRadio FrequencyTwisted Pair
Adaptive Networks Powerline Carrier
As an example, a configuration for a telephone com-pany that wants to provide energy management (for a localenergy utility) and information services (for customers)might initially be installed with a Plain Old TelephoneService or Utility Telemetry Service WAN, and one dayupgraded to Integrated Services Digital Network. Whenthe upgrade occurs, the old WAN interface(s) would beswapped for or supplemented with an ISDN interface. Thenew configuration might look like that shown in Figure 7.
Figure 7.Gateway Upgraded to ISDN
GATEWAYNeiwk!rift
Who uses a Gateway?Gateways may and should be used by more than one
individual or entity. In the previous example, the gatewaywas installed by a telephone company, and was used toprovide energy management for one or more utilities andinformation services for building occupants. Thus, thereis more than one customer for the gateway.
The gateway can be thought of as an electronic (on-premises) information "mailbox". Within an energy util-ity, the metering department may "call" the gateway togain access to meter readings; the load management de-partment may access the gateway for load control; thecustomer planning department may access the gateway forend use (i.e. customer) surveys, etc. On the other hand, autility's commercial or industrial customer may also ac-cess the gateway, though for different reasons. S/he maywish daily, weekly or monthly energy usage information(which the utility billing system does not likely provide)and retrieves this information by accessing the gateway'`';or, perhaps remote process monitoring and/or control is acustomer need. These too arc accomplished by accessingthe gateway. This type of joint access to a gateway isshown in Figure 8.
i
Figure 8.Joint Access to a Gateway
r-Gas, Water &
Electric Utilities
GATEWAY
11
CommercialCustomer
Field TrialsCyberLYNX gateways are undergoing trials in the
field by a telephone company and an energy utility. Addi-tional trials with other service providers are planned.
Telephone Company TrialTwenty CyberLYNX SEM470s are being installed by
a Regional Bell Operating Company (RBOC) for thepurposes of energy management (for a local energy utility)and information services (for customers). The gatewaysare installed on customers' premises and access the Inte-grated Services Digital Network and the X.25 packetswitching network. Hardwire LANs are used, one for thecustomer information display/terminal and one or more forload management and monitoring. The overall system isastonishingly fast. The total elapsed time to call a gatewayand pass a message, read a meter, monitor loads, and/orperform load management is well under a half a second.With a host computer supporting 128 logical X.25 chan-nels, the system is expected to reach over 500,000 gate-ways per hour.
Duke Power Company TrialCyberLYNX SEM470s are being installed by Duke
Power Company. Three units are being configured as polemounted gateways and access a Plain Old TelephoneService WAN. Each gateway is capable of communicat-ing to meters on several homes via a CEBus PowerlineCarrier LAN. Additional units are being used in each homeand are configured as CEBus Powerline Carrier Modemsso that appliances may be remotely monitored and con-trolled.
Available ProductsCyberLYNX provides SEM470s on a general avail-
ability basis. They may be configured as InformationGatewaysor as remote CEBus powerline data acquisitionand process controllers. ISDN and POTS WAN interfaces
71
are available with future plans calling for Cable TV, Radioand various other media. Many hardwire LANs are avail-able.
References111Electronic Industries Association, Consumer Electron-
ics Group, The EIA/CEG Home AutomationStandard: IS-60 (Washington, DC: EIA/CEG,1991, 1992), pp 900.
PI Cruickshank, Robert, An ISDN and CEBus EnergyManagement System, (Boulder, Colorado:CyberLYNX, August 1991), pp 4.
131Schoechle, Timothy, CEBus. ISDN and the ResidentialGateway, (Montpelier, France: le bulletin del'IDATE: Private Networks, 9th InternationalConference Proceedings. No. 30, November1987), pp 6.
141 Leigh, Tim, EnerLINK, (Denver, Colorado: RegulatoryPerspectives on Automatic Meter Reading Semi-nar, Georgia Power and Southern Company Ser-vices, October 19, 1992), Note: EnerLINK waspreviously known as ROCSthe Read OnlyCentral Station.
About the AuthorsRobert F. Cruickshank joined CyberLYNX Computer
Products as Vice President of Energy Management in Juneof 1991. Mr. Cruickshank came to CyberLYNX fromAT&T Bell Laboratories in Denver. In addition he ispursuing a Ph.D. in adaptive learning systems for energymanagement and environmental control at the Universityof Colorado at Boulder involving a unique interdiscipli-nary graduate program between the TelecommunicationsProgeam, the Joint Center for Energy Management and theComputer Science Department.
Timothy D. Schoechle is President of CyberLYNXGateway Corporation. Mr. Schoechle has a B.S. in Ad-ministrative and Computer Science from Pepperdine Uni-versity and attended Virginia Polytechnic Institute, UCLA,UC Irvine, and the University of Colorado Graduate School.He has worked in the field of embedded microcomputersand communications since 1973 and was co-founder of BIInc., a successful international electronics firm. Mr. Sc ho-ethic has been deeply involved in the development of theCEDus standard and is chairman of the EIA committee onpowerline communications as well as U.S. representativeto several international standards committees concernedwith communications and home electronic systems.
About CyberLYNX GatewayCorporation
Founded in 1992, CyberLYNXGateway Corporation is involved inthe development and manufacturingof the information "Gateway." Priorto this time, the company's principals
i
were engaged at CyberLYNX Computer Products, Inc., anelectronic engineering firm which developed products,tools and technologies focused in the fields of communi-cation and home automation. That company providedelectronic and software engineering services utilizing spe-cialized local area networks and embedded m icrocontrol-ler software and, particularly, implementations of theElectronic Industry Association's newly adopted CEBus(Consumer Electronic Bus) standard. Past accomplish-ments include product design, development and prototypeconstruction of new products for Mitsubishi Electric,Texas Instruments, Samsung Electronics, and Maxon Elec-tronics; and engineering projects for Southern CaliforniaEdison, NEC, BellSouth, Florida Power Corporation andPioneer Electronics.
CyberLYNX Gateway Corporation was founued tofocus on a specific market niche and to commercializecertain specific products and technologies that were devel-oped by CyberLYNX Computer Products, Inc. Currently,CyberLYNX Gateway Corporation is engaged in develop-ing prototype systems for US West and Duke PowerCompany.
Questions?If you have any questions, please write or call Bob
Cruickshank or Tim Schoechle at CyberLYNX GatewayCorporation, 2885 Fast Aurora Avenue, Suite 13, Boulder,Colorado 80303, Voice 303-444-7733, FaX 303 444-9062.
72
RE-ENGINEERING TRAVEL INFORMATION:OPPORTUNITIES FOR TELECOM PROVIDERS
ByGeorge E. Darby
Law Offices of George E. DarbyPresident, Information Technology & Travel Industry, Inc.
Abstract. The biggest global consumer of telecom services is the travel industry.Propelled by regulatory developments in the US and the EC, the business of preparingand distributing travel information is now undergoing fundamental change. The.... regula-tory changes, coupled with the ubiquity and power of microcomputers and the advent ofVSAT in the greater Asia/Pacific region, represent a major opportunity for telecomproviders to expand services for the travel industry. These same conditions may also in-duce the "mega-CRSs", e.g., SABRE, Apollo, System One, and Worldspan, to developnew value-added network services that will compete with those offered by telecomproviders. For both offensive and defensive reasons, therefore, telecom providers maywish to play a role in the re-engineering of travel information services.
Background. After nearly three-years of rule-making preliminaries, the U.S. Department of Transporta-tion issued comprehensive new regulations (57 Fed. Reg.43780, Sept. 22, 1992) governing Computerized Reserva-tion Services (CRSs) owned by U.S. air carriers or airlineholding companies. The new regulations took effect onDecember 7, 1992. The major features of the new regula-tions are an "open systems" approach to access by sub-scribers to CRSs. Under the regulations, CRS vendorscannot impose minimum use requirements, must allowsubscribers to use subscriber-owned equipment in access-ing the CRS, and cannot interfere with the subscriber'sright to access other CRSs if the subscriber owns the nec-essary equipment. The regulations govern the operationsof air carrier-owned CRS vendors in the U.S. The extentto which CRS vendors may choose to offer differentservices within and outside the U.S. if: not yet known.The EC is expected to issue very similar .egulations gov-erning CRSs based in EC countries.
U.S. CRS contracts with subscribers were formerlystyled as "equipment leases" with "free" access to the CRSdatabase and no lease rent due if the subscriber booked aminimum number of segments of air travel each month us-ing the CRS. As far as travel agents and other travel inter-mediaries are concerned, the new regulations will essen-tially drive the CRSs out of the "equipment leasing" busi-ness and into the software licensing and fee-based accessbusiness. One important ramification of the new "opensystems" environment is that airlines that now must pay"booking fees" to the mega -CRSs (which fees are the pri-mary source of CRS revenue) will probably open their in-
73
temal CRSs for "direct access" by travel intermediaries andthereby avoid payment of booking fees.
The airlines know that direct access by travel agentscan work, and work well. Southwest Airlines, a regionalcarrier in the U.S., is one of the most profitable airlines inthe world on a return on sales basis. Since its formation,Southwest Airlines has chosen not to be listed in any of themega-CRSs; Southwest ':eeps the roughly US$5.00 to$9.00 booking fee it would otherwise pay to a mega-CRSfor each seat booked on a Southwest flight. Southwest haspreviously accepted only telephone reservations, but is nowconducting a pilot program of direct access to its internalCRS by travel agents.
The First Opportunity: "Direct Access" CRSNetworks. It is very likely that many airlines will followSouthwest Airlines' example and open direct access to in-ternal inventory databases to large customers and travel in-termediaries. Each airline that sets up a direct access CRSnetwork will be a bigger consumer of telecom services.The opportunities for direct access by mega-CRS subscrib-ers apply equally to non-U.S. airlines. Travel agents thathave new freedom to access "third party" databases will usea foreign air carrier's reservation service so long as such usedoes not incur additional expense for the travel agent andprovides some specific advantage over a mega-CRS.
If a given airline's direct access CRS is perceived bytravel agents as providing greater value, it will attract moreuse. If travel agents can obtain lower fares, or a highercommission, by using direct access, travel agents will adopt
direct access in droves. Airlines that desire the develop-ment of innovative value added services in an effort to dif-ferentiate their offering may seek to establish joint ventureswith telecom providers. The top candidate for such value-added services is broadly called a "destination database."
The Second Opportunity: Destination Data-bases. The CRS reservation set (res set) is essentially apoint of sale terminal through which the activities of "traveldocument" sales are conducted. These activities are:checking availability, making reservations, obtaining con-firmations, and issuing travel documents. Much to the cha-grin of travel agents, the res set has heretofore been seri-ously inadequate as a POS terminal: it only sold the"airline" product. Over the past ten years, partial access toa few non-airline products has been added. First, rentalcars, but only five models or so from a given vendor ... notthe 40 models the rental car vendor would like to be listed.Then, listings for a few hotel chains. What's missing be-sides better coverage of hotels and rental cars? Most of thenon-airline suppliers in the travel industry, such as, nationaltourist organization services, scheduled rail and other sur-face mass transportation, land tours, cruises, events, dining,non-hotel accommodations, meeting services, rental itemsfrom PCs to planes to temporary employees, and a broadarea known as "destination information." It's no exaggera-tion to say that travel information services to date have onlyscratched the surface of what travelers and travel managers,.%ould like to have and will pay for. This unmet need canbe summarized as the "destination database" void.
Telecom providers are old hands at informationpublishing in print and electronic media and could expandtheir publications to address the destination database void.Listings of directory numbers by name and type of businessservice are the core products of a local exchange carrier'sinformation publishing business. Travelers and tra "el in-termediaries have an ongoing requirement for detailed in-formation about the cities and regions in which businessand leisure travel is planned. You need only reflect aboutthe unanswered questions you had before your most recentinternational trip and multiply those unanswered questionsby all international travelers. Most of those questions hadanswers in a database or a print publication that you couldnot access either before your trip or during it. What kindsof information beyond reservable services? Maps, businessand avocational associations, business leads, recreationaland cultural activities, subject matter experts, home stayprograms, telephone directories in roman characters, inEnglish or other languages, ... the list is endless. To such a"destination database," a mechanism for making reserva-tions may be added.
Destination databases developed by national touristorganizations often lack a reservations capability, whereasthose developed by other enterprises invariably include areservations capability. Booking fees and commissions onreserl ation transactions normally generate more revenuethan dispensing information (i.e.. availability) alone. Theuncertain profitability of large destination database provid-ers has usually resulted in gocrnmental tourist organim-
74
tions. such as the Scottish Highlands and Islands Develop-ment Board (the HILINE project). or international associa-tions, such as the International Automobile Federation (theUlysses project), undertaking them. Telecom providers,however, may be better equipped to demonstrate the viabil-ity of such projects.
Swiss PTT has proven that destination databasewith reservations capability, as a line of business, are verycomplementary to the provision of telecom services. SwissPTT designed and implemented two pilot projects in theSwiss State of Valais. In Saas-Fee, Swiss PTT created areservations system for local hotels and chalets, and inZermatt, a "pure" destination database. Both projects werevery well received and plans were made to extend theservice nationally. Although no one disputes that destina-tion databases and res systems are useful and can generaterevenue, disputes arise over who will pay for recruitingsuppliers, collecting and loading the data, training users,and promoting the system. The proposed nation-wideSwiss system, called SwissLine, is still awaiting funding.The leadership role that Swiss PTT played in the Valaisprojects remains, however, as a model initiative by tele-com providers in development of value added networkservices for the travel industry. Austria and several EasternEuropean countries are now trying to apply the Valaismodel to their countries.
The Third Opportunity: Electronic Ticket Deliv-ery Networks. Electronic Ticket Delivery Networks(ETDNs) begin to solve the "last mile" problem in traveldocument sales: delivery of travel documents to the trav-eler, either before departure or while traveling. An ETDNcomprises a packet network, user access, and automatedticketing machines that dispense air travel tickets, hotelvouchers, and other travel documents ... just as an auto-mated teller machine dispenses cash. ETDNs and auto-mated ticket machines should be to the travel industry whatelectronic funds transfer networks and automated teller ma-chines are to the banking industry. The analogy is closerthan facial, in fact, because the manufacturers of automatedteller machines have also begun to manufacture ticket dis-pensing machines ("TDM"). Instead of using postal serv-ices or couriers, travel agencies will arrange for ticket dis-pensing to travelers at the TDM closest to the traveler,anywhere in the world.
ETDNs represent an important new consumer oftelecom services and equipment. Although only one mega-CRS (System One) has agreed to support ETDNs, competi-tive pressures will force the other megas to join. As ofpress time, two ETDNs have been formed, have orderedTDMs, and plan to commence operations in 1993.
The Fourth Opportunity: Travel Agency Equip-ment and Agents in Home Offices. What type of com-puter equipment vendor will travel agencies seek afteragencies are permitted to use "non-CRS" equipment to ac-cess the mega-CRSs? Unlike most businesses. travelagencies use data communications all day long. If given achoice between the local clone shop and a %endor affiliated
with a major telecom provider, most travel agencies willchoose the latter if prices are comparable. Telecom provid-ers marketing PCs and peripherals to travel agencies should(i) emphasize their understanding of data communications,particularly the networks used by the CRSs to which theagency has subscribed, and (ii) plan to make more profitfrom maintenance and support contracts than from sales ofPCs and peripherals.
The experience of most travel agencies in the U.S.that have tried using agents working at home has been posi-tive. Two approaches have been used: standalone PCs, andwide area network (WAN). In the former approach, the"agent at home" uses the commercial version of a mega-CRS' workstation software. The commercial version ofCRS workstation software is designed for corporate traveldepartments and has a character-based user interfaces (asopposed to a graphic user interface, like Microsoft Win-dows, used in the travel agency version). The "standalone"agent at home may or may not have a voice line configuredas an extension on the travel agency PBX. Data communi-cations with the travel agency office use off -the-shelf e-mail software and a commercial packet network.
The WAN approach to supporting agents working athome is used in cities with ISDN service and is a good ex-ample of computer integrated telephony. The Houston of-fice of American Express Travel Related Services, for in-stance, uses Basic Rate circuits to extend local area networkand automatic call distributor connectivity to the homes oftravel agents around the city. The agents at home have allthe PBX, LAN, and CRS features that agents at the mainoffice have, including supervisor monitoring and confer-encing. To date, only the System One CRS supports theISDN/WAN capability.
The inevitability of "open systems" in CRSs has al-ready produced two significant changes in the way CRSsserve travel agents. First, the Amadeus, Worldspan, andAbacus CRSs have agreed to modify their systems to sup-port the sharing of the central ingredient of CRSs, the Pas-senger Name Record (PNR). Today, only the travel inter-mediary that entered the PNR, and the airline or otherservice supplier with which the traveler has a reservation,can access a traveler's PNR. The new agreement puts inplace the links that will permit travel intermediaries toshare PNRs. With these links in place, travel agencies thatagreed to share PNRs could form an international consor-tium to better serve international travelers.
The establishment of "direct access" CRSs, destina-tion databases. electronic ticket delivery networks, and thepersonal network built by travel intermediaries sharingPNRs internationally may catalyze the formation of inter-national travel agent consortia. In one scenario, domesticagents would not interact with the mega -CRSs, but with"direct access" CRSs, destination databases, and electronicticket delivery networks on behalf of their clients and onbehalf of foreign travel agencies in their consortium. Themega-CRSs would be bypassed.
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The mega-CRSs are well aware that open systemscould lower their revenues and are undertaking programs toretain subscribers and develop new sources of revenue.The most comprehensive of these responses is the SabreIntegration Technology Program. Participants in this pro-gram can obtain detailed technical specifications for theSabre CRS network and consultations with Sabre's MISstaff. No other CRS has heretofore offered such assistanceto third party developers. Sabre has also now begun a for-mal program to certify third party products as interoperablewith its CRS and to promote such products among its sub-scribers. Another mega-CRS, Apollo, will soon offer itsFocalpoint workstation, previously available only underhardware lease, in a software-only version for PCs. Sabreand Apollo have also developed CD-ROM-based, interac-tive multimedia services as "point of sale" tools for travelagents.
To distinguish their services from those of "genericconsortia" of travel agencies, these mega-CRSs may expandinteractive multimedia services to include wide area net-work connectivity. In ten years, will "travel agency" besynonymous with "videoconference room"? Will you loginto the Apollo global videotex network from your hotelroom? Or rent a video codec and cellular modem fromSabre when you pick up your rental car?
The Fifth Opportunity: Traveler Services andTravel Substitutes. Destination databases with reservationfeatures may satisfy many information needs, but such da-tabases do not address the messaging needs of travelers.Although increasing numbers of business travelers carrynotebook computers with them, "jacking in" to a data net-work, much less an ISDN Basic Rate circuit, in foreign cit-ies remains a problem.
As telecom providers become more aware of the in-formation services requirements of travelers, new oppor-tunities to rent equipment and sell services will arise.Notebook PCs with inboard video codecs are close at hand.The new CCITT H.320 and subsidiary set of Recommen-dations for video/audio codec interoperability has beenadopted by over 25 codec manufacturers. If a videoconfer-encing system is as portable as a notebook computer. thesystem can go to the user, instead of the user going to thesystem. Portable videoconferencing may become so com-monplace that it is perceived as a "more expensive tele-phone call," but a telephone call nonetheless, and its useadopted by many traveling executives.
Conclusion. The mega -CRSs are very familiar withthe criticisms of their systems as being too focused on air-line products. Before the new regulations, the mega-CRSs' ad little reason to change. Now there are powerful rea-sons. Losing subscribers to third party databases vendors.Losing booking fees. Losing equipment leases. If themega -CRSs are deprived of these revenue streams, theywill respond by expanding their on-line offerings to include"non-airline" products and by pursuing some of the oppor-tunities described above. There will be parallel opponuni-
J_
ties for telecom providers to assist in the development of"direct access" CRSs, destination databases, electronicticket delivery networks, and international networks amongtravel intermediaries. However, the mega-CRSs are alreadyoperating the world's largest videotex and electronic pub-lishing businesses. Existing operators of value added net-works may have some sizable competitors or joint venturepartners in the very near future.
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Discussion Group:Impact of New User Applications on theTelecommunications Markets in the '90s
Ralph R. Hubbard and Elva Ellen KowaldTechnology Management International, Inc.
Manchester, Massachusetts, U.S.A.(508)526-4886
1. ABSTRACT
This discussion group explores how and when major businessusers will be implementing video conferencing, client/servercomputing, image processing, and multimedia applicationsbased on interviews with over 250 corporations. The groupwill discuss the impact of these emerging applications onbandwidth requirements and the demand for new carrierservices, including switched wideband, SKIDS, frame relay, andATM, within a new strategic product planning framework.
2.1 BACKGROUND
In the spring of 1992, TechnologyManagement International, Inc. (TMI)completed Network Markets for the '90s, amajor study designed to support long-range strategic planning in themainstream North American businesscommunications market. Created fornetwork equipment manufacturers andcarriers, the study took an in-depth,multidisciplinary perspective on thefuture communications requirements oflarge commercial firms from the desktopto the carriers.
The impetus behind the study was the needto better understand the customer-drivenforces shaping the structure of futurenetwork markets, as well as theinterrelationship between networkingproducts. Twelve TMI clients, includingcarriers, major computer vendors, andleading communications equipmentsuppliers, supported the originalresearch and provided insight on the costand performance of future technclogies.
In the process of researching NetworkMarkets for the '90s, TMI developed a newframework for the networking markets, aswell as for describing the evolvingmarket structure and the role ofintegrated, multimedia products in themarketplace. In this framework,technologies are not isolated, but ratherconsidered as part of a total networkingsolution in a type of zero-sum game.
For example, in a zero-sum game, thereare only a finite, albeit growing, numberof desktops. As time passes, they willeither be connected by SNA or a LAN fordata and a PBX/Centrex for voice, or by anew integrated multimedia technology thatwill replace all of today's technologies.
77
Utilizing this framework, it is possibleto visualize communications productswithin the context of the continuallyevolving networking technology and marketstructure.
In the session at the 1993 PacificTelecommunications Conference, the groupwill discuss communications applicationsand products within this framework.
2.2. New Networking Framework
TMI's networking framework depicts site-to-site communications within a largecompany. The framework dividesnetworking functions into five categoriesas shown in figure 1.
A Applications Classes. The fourclasses of applications are shown onthe left in shaded area A. They willeach connect to a differentconfiguration of premises devices inarea B, which, in turn, connect tocarrier services in area C. Eachapplication class defines a differentlevel of bandwidth for either data orisochronous (voice and video)traffic.
B1 Premises Concentration. This functioninvolves the connection of desktopdevices to a single logical node andthen the subsequent multiplexing ofthe resulting communications onto oneor more lines. PADs, controllers,LANs and PBXs all perform theconcentrating function.
B2 User Network Switching. Thisfunction allows users to selectivelyconnect to specified resources orlocations over a wide area. Packetswitches, front-end processors,routers, and PBXs all perform thenetwork switching function.
IVoice/Fax 1
A
AppitcationClans
Transaction
ralent/Server I
I Video
Desktop
UserConcentration
Network "SandaddthSwitching . tallartagement.
B1 B2Given:Demand in A,Broad set of services In C,What will be the structure of B?
Ghipn:Thn structure of4Which specific servicesare used In C? I
B3
Premises
CCartierSmrtdcas
Carrier
FIGURE 1. NETWORKING FRAMEWORK FRAMEWORK
B3 Bandwidth Management. These devicesprovide a means for multiple,concentrated communications streamsto share large bandwidth (T1, T3, andSONET) digital "pipes." Somebandwidth managers, for example Timultiplexers and digital access crossconnects (DACS), have limitedswitching capability. All of the newfast packet (frame relay and cellrelay) technologies perform bandwidthmultiplexing and switching.
C Carrier Services. These services caninclude all or none of the functionsdescribed in area B. For example,centrex service performs all of theabove functions, leaving only thetelephone on the user's desk as thecustomer premises equipment (CPE).On the other hand, a privateintegrated network requires onlyprivate circuits from the carrier,while the user provides his ownconcentrating, switching andbandwidth management equipment.
Using this framework, TMI investigatedthe potential for integration to occuracross application classes (in the caseof multimedia) and across functionalcategories (in the case of integratednodal processors (INP) which perform bothswitch and bandwidth management for LANinternets).
Not shown explicitly in the frameworkdiagrams are the external communicationsrequiring public services. In addition,the diagrams illustrate a configurationat only one site in a network. In orderto complete the picture, a comparableconfiguration is needed at every site.
2.3. Study Overview
At the beginning of the '90s, many largecommercial users had installed networksresembling figure 2. Datacommunications, independent of voice,supported an OLTP, terminal-to-host typeof traffic. For large firms, much of theinternal voice traffic was carried onprivate networks comprised of T1multiplexers and PBXs.
How will this picture change between nowand the turn of the century? TMIforecasts three key trends that willtransform the networking industry:
The three-stage migration of dataapplications from terminal-to-hosttransactions, to LAN client/serverinteractions, and then to multimediacommunications;
The growth in bandwidth demand drivenby these new applications; and
The adoption of new public servicesas replacements for private networks.
An overview of these three major trendsfollows.
2.31 Migration to LAN and Multimedia
User, technology, and industry conditionsare converging to portend the adoption ofLAN technology in the early '90s and ofmultimedia technology in the late '90s.
TMI's interviews with 250 users revealedthat users have specific applicationplans for new technologies. Based on theanalysis of this user data, TMI found thefollowing:
Typical Private/Nonintegrated Networks - 1990
Desktop Local Area
TechnologyWide Area Technology
Application
ClassesUser Network 1 Bandwidth
Concentration Switching Management
Carrier
Services
CircuitsITransaction j-- ---{_ X.25, SNA
Client/Server
Video
CircuitsPBX --i T MultiplexerVoice
FIGURE 2. TYPICAL PRIVATE/NONINTEGRATED NETWORK IN 1990
Across almost all industries, usersare intent on adopting client/servercomputing.
LAN technology is becoming thestandard for site concentration ofdata communications.
There is a growing trend towardtechnically integrated organizationsin the user firm. Today, more thanhalf of users' voice and dataoperations organizations arecombined. These multidisciplinaryorganizations are much more likely toaccept the new integratedtechnologies than organizationsfocusing on a single technology.
Adoption of hypertext and videoapplications is projected to increasesteadily throughout the decade.
The study projects the dramatic drop innetworked devices that perform terminal-to-host OLTP-only in favor of clientserver and image processing applications.As existing SNA and X.25 technologycannot cost-effectively support thebandwidth required by the newapplications, users are turning to LANsto meet these needs. Likewise, thedemand for multimedia technology will bedriven by hypertext (includes video clipsand voice-annotated documents) and videoconferencing.
In researching the technology trends, TMIfound a number of events coming togetherto support the move to LANs andmultimedia, including:
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A drop in cost that makes LANtechnology only slightly moreexpensive per desktop than currentsolutions.
Rapid improvements in LAN managementtechnology that will make it easierfor users to implement LAN solutions.
Cost-effective multimedia premisesdistribution technology that isexpected to be available in themarket by the 1995 time frame. (Thisincludes ATM LANs, 802.9, or asimilar integrated solution thatcombines voice, data, video and LANtraffic on a twisted pair media).
In terms of the industry, TMI projectsthat the combination of a decrease in thecost of bandwidth and the cost ofcompression will invigorate the demandfor wide-area connectivity forclient/server and video applications.The cost of bandwidth will continue todrop as copper wire facilities arereplaced with fiber and ATM switchingtechnology.
The result is a dramatic shift in usertechnology preferences to the newtechnologies. Figure 3 illustrates atypical LAN oriented private networkscirca 1995. By the end of the decade, aprivate multimedia network may resemblethe scenario shown in figure 4.
Desktop
Typical Private Networks - 1995
Local AreaTechnology
Wide Area Technology
1
ApplicationClasses
User Network i BandwidthConcentration Switching I Management
CarrierServices
ITransaction I---
LAN Router Circuits
Client/EJ-ver
Video
Switching Mux CircuitsVoice I-4-1 PBX
FIGURE 3. TYPICAL PRIVATE NETWORK IN 1995
Typical Private Multimedia Network -1999
Desktop
ApplicationClasses
Transaction
Client/Server
Local AreaTechnology
Wide Area Technology
User NetworkConcentration I Switching
ATM / B02.9
Video
Voice F
Router
PBX
BandwidthManagement
Switching Muxor ATM Switch
CarrierServices
Circuits
FIGURE 4. TYPICAL PRIVATE MULTIMEDIA NETWORK IN 1999
2.32 Growth in Bandwidth Demand
The second important trend is the growthand shift in bandwidth demand from voiceto data and video.
While some analysts are predicting demandfor gigabits/sec bandwidth, TMI does notforesee the applications requirementsthat would drive this demand. Inaddition, there are forces reducing thedemand for bandwidth. Client/serverapplications are being designed to movedata closer to the user, thereby reducingoff-site traffic. Bandwidth requirementsfor video are approaching a single 64
80
Kbps stream as a result of new videocompression technology combined withever-increasing processing power on thedesktop.
2.33 Migration to Public Carrier Services
TMI's analysis of private lines vs. theemerging carrier services indicates thatthese new services will be verycompetitive with private network options.TMI sees the migration to the newservices supported by a convergence ofuser, technology, and industry events andconditions.
Desktop
Typical Public Networks - 1995
Local AreaTechnology
Wide Area Technology
ApplicationClasses
User i Network i BandwidthConcentration Switching I Management
CarrierServices
ITransactionl
IClient/Serverl
lAN it Router Frame RelayRelay
VilciVideo
T Multiplexer VPN Service
Voice IPBX
FIGURE 5. TYPICAL PUBLIC NETWORKS IN 1995
Desktop
ApplicationClasses
ITransaction
Client/Server
Video
Voice
Typical Public Multimedia Network - 1999
Local AreaTechnology
Wide Area Technology
User NetworkConcentration Switching
BandwidthManagement
Access Unit
CarrierServices
SMDS/BISDN
FIGURE 6. TYPICAL PUBLIC
Users will be facing new networkingrequirements with the move toclient/server and advanced applications.To meet these new requirements, userswill be reevaluating their networktransmission options. This evaluationphase provides an entree for carriers tointroduce these new services.
Technically, frame relay and cell-relayservices offer two primary features thatare expected to hasten their acceptance
in the market. First, they areconnectivity services which run under theuser network switching protocols (OSIlevel three), such as SNA and TCP/IP.
MULTIMEDIA NETWORK IN 1999
81
Thus, unlike X.25 PDNs, these newservices are transparent to thecommunications protocols running on thehosts and workstations. Second, they aredesigned to meet the bursty nature of LANtraffic. Carriers can offer highbandwidth to each site to reduce delayand share the backbone to reduce costs.
Finally, the industry is pulling togetherto deliver customer premises equipment(CPE), interfaces and services that makesframe relay service viable today and thatwill support SMDS in the near future.Carriers seem to understand the datacommunications market better today than
they did in the '80s. Their pricing andmarketing Lfforts appear to be meetingthe market's ..seeds.
As a result, TMI forecasts that a
significant number of sites, especiallythe smaller sites, will migrate to publicservices as they transition toclient/server and LAN-based computingstarting in 1994.
Thus, the typical smaller site for anearly adopter will begin to resemble the
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scenario shown in figure 5 by 1995. TMIprojects that many users will have anindependent data network supported byframe relay services and public VPNservices for voice.
Medium to large sites, especially thosewith multimedia LANs are projected to bethe early adapters for cell-based carrierservices. By the end of the decade, TMIprojects that 25% of the bandwidth oflarge commercial firms will be carried onnetworks as shown in figure 6.
"Marketing in Japan" for PTC '93Workshop, Honolulu, Hawaii, January 17 -20, 1993
Masaru Kawajiri, TelecommunicationsSpecialist, U.S. Embassy, Tokyo;Telephone: 03-3224-5062; Fax:03-3589-4235
The Japanese market fortelecommunications equipment andservices, the estimate volume of whichis in excess of 80 billion dollars,provides an opportunity to foreigncompanies to compete not only withdomestic Japanese companies but alsowith well-established foreign companiesin Japan. Based upon over 20 years ofhis experiences helping U.S. companiesfor their market access in Japan, thetelecommunications specialist at theU.S. Embassy, Tokyo, describes howeffectively marketing should be done tosucceed in Japan.
1. For new-to-market companies: If afirm has not done business previously inthe Japanese market, it is suggestedthat they first find out whether theirproduct has sales potential in theJapanese market.
Specifically, a firm should find out:
a. What companies are selling acomparable product locally;b. What is the usual sales channel forgetting the product into the market;c. What is the price of comparableproducts;d. What is the best way to get salesexposure in the market;e. Whether products meet NTT (Nippon';:elegraph and Telephone) networkrequirements, if they are for telephonecompany use;f. Whether the products are required toobtain JATE (Japan Approvals Institutefor Telecommunications Equipment)approval for connecting with PSTN?g. If the product is a radio terminal,whether it meets MKKK (Musen KensaKentei Kyokai) requirements for avoidinginterference with other radio stations;h. Who might be interested andqualified to represent or purchase yourproduct in the market;
2. Key to success:
a. A company that wants to effectivelyexpand its market in Japan should have apresence there!! The Japanese telecomcustomer is very discriminating.Foreign companies without a presence inJapan are at a significant
83
disadvantage. Japanese customers preferdealing with suppliers that are closeby. Dealing with companies that are notsufficiently represented in Japan isregarded as "risky." They viewcommunicating in another language with acompany 6,000 miles away as a majorinconvenience.
b. Having "presence" in Japan infers"Japanization or localization" of bothcustomer management and productengineering. That means the foreigncompany commits its resources to open upa representative office in Japan, orestablishes a Japanese subsidiary("Kabushiki kaisha") in order to supportits customers in the same way as theJapanese telecom manufacturers do fortheir customers.
c. The foreign company's office shouldbe staffed by Japanese speakingengineering staff and Japanese speakingmarketing staff that is given sufficientautonomy to make decisions withouthaving to constantly seek approval fromcorporate headquarters. Similarly, theJapan operation must be given sufficientresources for meeting requirements ofcustomers, and agents/distributors, orOEM partners. Because the typicalJapanese customers are "very demanding",their requests must be responded on atimely manner. Successful foreigncompanies in Japan operates in thisfashion.
d. Is there a role for expatriates inthe Japan office? Simply stated, yes.The expatriate can be a goodcommunicator betw'en the Japan officeand its headquarters, and he could beeffective for the home office to betterunderstand the Japanese mentality indoing business in Japan. The expatriatecan play an important role forexplaining unique Japanese businesspractices to the home office. On theother hand, the Japanese customers viewthe role of such an expatriate as acommitment to the Japanese market.However, when the Japan office does nothave an expatriate, the reporting onmarketing in Japan is often neglectedand, consequently, the home office isnot informed well of what is happeningin Japan.
e. Appointing distributors: Typically,a foreign company comes over to Japan tointroduce its product and appoints adistributor either on an exclusive basisor on a non-exclusive basis. Sellingimported products through onedistributor alone naturally limits thesales level for several reasons. Onereason is that the distributor alreadyrepresents other products and has otherpriorities, and another factor is theJapanese keiretsu. Often a singledistributor is unable to penetrate allcorporate groupings.
f. An effective solution to thedistribution problem is to define one'smarket presence by opening one's office,thereby gaining control overdistributors and expanding OEMarrangements with Japanesemanufacturers.
3. Know Your Competitors:
a. Market entrants will facecompetition not only with the Japanesecompanies but also with well establishedforeign companies in Japan. Remember,Japanese customers prefer dealing with"easy suppliers". "Easy suppliers" meanthat they speak Japanese, think likeJapanese, and resolve problems likeJapanese.
b. "Moshiwake Arimasen" or "I amsorry." Should a product fail at thecustomer's site upon delivery, theJapanese customer expects the presidentof the supplier being accompanied by theproduct design engineers to come overand apologize: "Moshiwake Arimasen,Owabi Moshiagemasu" meaning "No excuse,we are very sorry". These expressionsimply that the supplier will take theresponsibility for whatever happened tothe product delivered and ask theJapanese company to continue long-termbusiness relations, even if there isdoubt in the mind of the foreignexecutives that the failure of theequipment may not be entirely theirresponsibility.
4. Do's and Dont's of How to DoBusiness 101:
For foreign companies not familiar withJapanese business practices, thefollowing tips may be helpful:
a. Cold Calls: Many foreign companiesmake "cold calls." Typically, thesecompanies write to the top executive ofthe Japanese companies and, sooner orlater, start complaining about nothearing from them. The reason for thelack of response is that such lettersgenerally are filed in the wastebasket.
b. Proper introduction: A firm needs aproper introduction to Japanese firms.
Remember the one who does anintroduction for you bearsresponsibility for the consequence ofyour doing business in Japan. If yourfirm causes any inconvenience to theJapanese company, the individual whointroduced you will be blamed forintroducing a person/firm that resultsin contentious business relationships.
c. Avoid sending English brochures:Translating product brochures intoJapanese sends an important message:"We are a firm interested in anddedicated to the Japanese market." Forpersonal meetings, hire an interpreter.You may be warmly received over a cup ofwarm green tea, but this does notnecessarily mean that your Englishpresentation of the product was alsowarmly accepted. A fluent Englishspeaking employee who meets with foreignbusiness persons would be put in adifficult position, because he has tospend a great deal of resourcestranslating your English brochures intoJapanese in order to circulate "Ringi"document for approval from each divisioninvolved and from the top executivelevel. Most of the company employees,particularly those responsible fortechnical evaluation of products, arenot proficient in English.d. Put yourself in the position of theJapanese customer: As a human being theperson who has received the Englishbrochures would turn to an "easy"company which has the similar productsand speaks Japanese. You can provideEnglish brochures, only when you believethat every cu..tomer in the world wantsyour products and that no one else canmake the similar products.
e. Do not expect to cut the deal at thesame pace as in your home country.Japanese firms need to feel comfortablewith their suppliers to develop a levelof trust. An impatient foreign companyexpects that they can cut the deal"overnight" as in the home country.Even if you are travelling to Japan 12times a year just because you do nothave a presence but only represented bya distributor, your deal with thecustomer would take almost forever.
5. Regulatory environments: Even ifyour product meets the FCC Part 68requirements, the product will not beaccepted in Japan. You need to go toJATE for certification forinterconnecting with PSTN. If yourproduct is T-I type of datacommunications equipment, you need tofind out what kind of leased lines areavailable and what kind of interfacerequirements you need to meet. In thiscase it is suggested that you consultwith NTT.
84 1Cti
6. Japan's telecom deregulation: TheJapanese Government liberalized thetelecom industry in 1985 therebyprivatizing nTT and allowing new commoncarriers to compete with NTT and KDD.As a result, to date there are over 60"new common carriers" being establishedin Japan. According to theTelecommunications Business Law, thosewho own and operate the transmissionfacilities are called "Type I" and thosewho lease circuits from Type I forproviding valued added communicationsfor others are called "Type II." Thedefinition of "common carriers" in Japandiffer from that of the United Stateswhere the difference is made whether theone offers "basic services" or not.
7. Conclusion: It is often said thatthe Japanese market leads to the worldmarket. If you succeed in Japan, youwill be succeeding in the world market,and you do not have to worry so muchabout your home market being eroded bythe Japanese. Although there may beother factors for success in Japan, itis critical to establish presence inJapan and Japanize your products andoperations for that market.
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Suggestions for FormingMultinational Telecommunications Joint Ventures
by
Warren G. Lavey (1)Skadden, Arps, Slate, Meagher & Flom
Chicago, Illinois, USA
The formation and development of agreements formultinational telecommunications joint ventures require creativityand flexibility as well .s expertise in telecommunications andtransactions. This paper reviews certain issues involving minorityshareholder protections and contributions of and constraints onshareholders.
Privatized landline telephonefranchises and cellular radio licenses areoften awarded to multinationaltelecommunications joint ventures.
Governments in developed as well asdeveloping countries have encouraged theformation of consortia of experienced foreigntelecommunications operators (sometimes fromseveral countries with a range of experienceand resources) together with domesticcompanies which can contribute to the successof the venture and also benefit fromassociating with the foreign companies. Thecomposition of telecommunications consortiamay be an important part of the traderelationships between governments.
Even if not required by thegovernments' rules for awardingtelecommunications franchises and licenses,such multinational joint ventures can emergefrom the participating companies' desires tostrengthen their credentials reflected in anapplication, pool resources, lessen politicalrisks, and create the most efficientmanagement team.
Structurino and developing legalagreements for multinationaltelecommunications joint ventures posespecial challenges. Aside from the normaldifferences in business style present intransborder transactions, the basic goal --to create a viable telecommunications ventureconsistent with the diverse interests of theventurers -- is complicated by severalfactors.
For example, the scope of atelecommunications ventu.a may be uncertainat its inception in light of changingtechnologies (e.g., wireless or switchedvideo) or business opportunities (e.g.,information services, international servicesand facilities, or telecom equipmentmanufacturing). Some participants may beunwilling to allow the joint venture tocompete against their other interests or
86
otherwise pursue certain lines of business,while other participants may view these linesof business as valuable and synergistic withthe joint venture.
As another illustration, certainaspects of the structure or even the entirelegal documents may be subject to evaluationby the government, and may affect theconsortium's ability to win a franchise orlicense. Government review can limit theterms of the agreements and requireprovisions not ordinarily acceptable to somecompanies or not ordinarily contained in suchdocuments. (On the other hand, some awardprocesses rely on auctions and are blind tomost or all aspects of a joint venture'sstructure.)
Additionally, the multinationaltelecommunications joint ventures createstrange bedfellows. Because of the limitednumber of world-class telecommunicationsoperators and manufacturers, companies in onejoint venture may simultaneously be competingfor a license in another country or even foranother type of license in the same countryas the joint venture. Moreover, thesecompanies may also be engaged in supplier-customer relationships, interconnectiondisputes, and other joint ventures that areexperiencing difficulties. These complex,multifaceted relationships affect theparticipants' willingness to shareinformation and technology, to rely on eachother's management services and procurementdecisions, etc.
There is no single magic formulafor forming multinational telecommunicationsjoint ventures. Moreover, the legalframework, operating conditions, businessplans, and risks of each joint venture areunique. Yet, too often firms approach theprocess of structuring and developing legalagreements for the joint ventures withunrealistic expectations and inflexibledemands. Successfully completing thisprocess requires a special combination of
industry and country knowledge, regulatoryexpertise, transaction experience andadaptability in structuring and documenting ajoint venture.
This paper outlines some impot'antissues and alternative mechanisms that may beuseful in forming these joint ventures. The
issues fall into two categories:(1) minority shareholder protections; and(2) contributions of and constraints onshareholders.
1. Minority Shareholder Protections
The development oftelecommunications systems pursuant tofranchises and licenses requires substantialinvestments by the participants in a jointventure and represent substantialopportunities for them. Accordingly,minority shareholders or partners seekprotections against a wide range of possibleadverse conditions derived from decisions bythe joint venture. factors controlled by thegovernment, demand and competition in themarketplace, considerations affecting aparticipant unrelated to the venture, etc.
Yet, telecommunications jointventures may be limited in the range offeasible minority shareholder protections.The following list describes some options andthe possible limitations: (a) exit/sale ofinterest; (b) supermajority voting;(c) provisions of services and officers; and(d) restrictions/requirements in the jointventure agreement.
(a) Exit/Sale of Interest.
As extreme actions to protect aminority shareholder, the shareholder mightexit from the joint venture beforesignificant capital investments are requiredor through sale of its interest.Telecommunications joint ventures may facecertain inherent limitations on theseactions.
First, the government may wantassurance that the participants, or at leastcertain key participants, will continue to beinvolved in developing and operating thetelecommunications system for at least
Several years. Next, even without thisrestriction, the government may require itsprior approval for any change inshareholders, and may limit the universe ofpotential transferees based on nationality,qualifications as a telecommunicationsoperator, etc. Third, the joint venture maybe dependent on a shareholder as a supplierof certain services and technologies whichwould be disrupted by exit of thatshareholder from the joint venture.
87
(b) Supermalority Voting.
Another common minority shareholderprotection involves supermajority voting oncertain decisions, such as key officers,capital budgets, business plans, new lines ofbusiness, major contracts, issuances ofstock, changes in by-laws, and changes inarticles of incorporation. These protectionsmay apply to board decisions and/orshareholder votes. It is also possible thatthese voting provisions would kick-in basedon some objective performance criteria, suchas the joint venture's earnings, revenues,network size, service quality, or marketshare.
Again, there may be certainsensitivities about these mechanisms intelecommunications joint ventures. While
some governments allow foreign-controlledjoint ventures, others do not; thesemechanisms may be viewed as undue influenceby foreign minority shareholders. Moreover,governments may be concerned about deadlocksand unmanageable joint ventures caused bysupermajority voting. Similarly, theseprovisions create the possibility ofdecisions biased to the interests of oneshareholder but contrary to maximizing theperformance of the joint venture (such aspurchasing equipment manufactured by oneshareholder or failing to pursueopportunities which may compete with anothershareholder). Finally, the inherentuncertainties facing these operations(including untested telecommunicationsdemand, competition, economic growth andtechnologies) complicate the use ofperformance-based criteria for supermajorityvoting.
(c) Provision of Services andOfficers.
Other ways that minorityshareholders can influence a joint venturebeyond their voting positions are throughproviding services and officers to the jointventure. Roles in engineering, procurements,construction, marketing, finance, etc. cangive certain shareholders substantialinfluence over the joint venture and,consequently, protection of theirinvestments.
The preceding concerns about undueinfluence by foreign minority shareholdersand bias toward a shareholder's manufacturingand interests also may apply to thesemechanisms. Moreover, this method ofminority shareholder protection is notsimultaneously and equally available to allshareholders; one shareholder'sdisproportionate influence through theprovision of services and officers causesdiminished influence of other shareholders.
Generally, all shareholders benefit from anopen selection of the most efficientproviders of services and the most qualifiedofficers. The government's selection processmay be wary of a consortium whose operationaland finance decisions are dominated by oneminority shareholder.
(d) Restrictions/Requirements inthe Joint Venture Agreement.
Finally, the joint ventureagreement can specify certain restrictionsand requirements which bind the joint ventureand require unanimity or a high supermajorityapproval to amend.
The danger of these limitations isdeadlock among the participants as the jointventure itself and each participantindividually face uncertain risks andopportunities. The process of amending thejoint venture agreement can be burdensome.While these limitations may protect theinterests of some participants, they maydecrease the value of participating in thejoint venture to others.
2. Contributions of and Constraints onShareholders.
A joint venture is what theshareholders make of it. Some of the keycontributions that shareholders can make to ajoint venture irclude use of trainedmanagement personnel (engineering, marketing,information systems, construction, operation,procurements, etc.); management ofrelationships with labor and government;access to proprietary technologies and tradesecrets; use of real property for locatingtelecommunications facilities; use ofpreferred-customer relationships withequipment vendors; access to networks thatwill be interconnected; customer base; andfinancing.
With each potential contribution,two questions arise. First, how will thedecision as to the contributor(s) be made?For example, a switch manufacturer might bewilling to participate in a joint ventureonly if it were assured of supplying theswitches in the joint venture agreement; itmight be unwilling to leave this decision toa majority vote of shareholders at the timeof the procurement. If multiple shareholdershave overlapping areas of competencies, theymay want to have their responsibilitiesworked out before commencing the jointventure. On the other hand, the othershareholders and the government may want thejoint venture to have access to multiplesources of supply, including suppliers whoare not shareholders, particularly in lightof uncertain technological and marketplacedevelopments.
88
Second, for shareholders'contributions, how should they be priced tothe joint venture? They could be provided"free" (as part of a shareholder'sparticipation in the joint venture), at"cost" (however defined, which may lead toaccounting disputes), at a market price (but,some contributions may not be available fromthe shareholder or third-party suppliers onan unbundled basis in arm's-lengthtransactions), on a most-favored-nation ordiscounted basis, at a predetermined price,or even based on some performance measure(e.g., management services compensated by apercentage of net income or revenue). Again,the government's rules or review process maybe concerned about the joint venturefunneling funds to certain shareholders viapayments for services and/or equipment.
Regarding possible constraints onshareholders, their basic areas -- non-competition against the joint venture andnon-disclosure of confidential information --are not as simple as may appear fortelecommunications joint ventures.
One problem for non-competitionconstraints involves defining the jointventure's scope of activities. Preciselimits on a joint venture's offerings andgeographic areas of operation facilitate thespecification of non-competition constraints.Even so, the potential for new serviceofferings created by technological changesmakes it difficult to delineate opportunitiesreserved for the joint venture fromopportunities reserved for shareholders oravailable for both the joint venture andshareholders. Similar problems arise fromthe bundling and unbundling ofservice/equipment offerings in response tochanges in the marketplace. Moreover,certain time limitations on non-competitionconstraints may be reasonable.
As for non-disclosure constraints,shareholders are concerned about sharingtheir trade secrets with the joint ventureand other shareholders. Recall thatshareholders in one joint venture may competeor have a supplier/customer relationship inother activities. Yet, it is difficult toidentify unauthorized users of many tradesecrets. Joint venture agreements shouldalso address rights to information developedby the joint venture.
(1) Partner, Skadden, Arps, Slate, Meagher s,Flom (Chicago, Illinois U.S.A.). B.A., M.S.,Harvard University; Dip. Econ., CambridgeUniversity, J.D., Harvard Law School.
1 L
THE INTRODUCTION OF UNIVERSAL JOINTING AND COUPLER TECHNOLOGY FOR OPTICAL SUBMARINECABLE SYSTEMS
GRAHAM L MARLEBT (MARINE) LIMITED
SOUTHAMPTON, ENGLAND
JAMES E. ROGALSKIAT&T
MORRISTOWN, NEW JERSEY, USA
1. ABSTRACT
The rapid growth of the optical submarine cable network has resulted in many new cable designs beingdeployed with totally different jointing technologies. This has serious implications for the efficiency of
system maintenance due to the expense and complexity of providing a shipboard jointing service.This paper explains the problem and how it has been overcome with the introduction of a standardisedapproach to optical submarine cable jointing. It also details the many additional cost saving benefits
are facilitated by this new technology.
2. INTRODUCTION
The world's communications network has expanded rapidlysince the successful installations of the first internationalfibre optic submarine cable across the Europeai North Seain 1986 and the first transcontinental cable across theAtlantic Ocean in 1988.
This relatively new technology has enabled the provision ofhigh circuit capacities at low cost, precisely the oppositescenario to the analogue co-axial systems which precededthe optical era. As a result the total demise of the analoguesubmarine cable network is now in sight.
The expiring analogue technology was mature with stabledesigns and only a few dominant cable manufacturers able tocompete in this highly specialised market. This was due tothe requirement for expensive submerged amplification(repeater) equipment every 10 km or so to get reasonablecircuit capacity onto individual cable systems.
Conversely, the development of optical submarine cabletechnology is still in its infancy. Factorially higher capacitiesare now possible with repeater spacing in excess of 100km.This has led to substantial growth of the submarine cablenetwork with many manufacturers entering the submarinecable market for the first time. As a result there is anincreasing variety of cable designs, each associated with itsrespective manufacturer's jointing technology.
This situation is attractive for prospective cable owners atthe procurement stage as it widens opportunities for cablesystem purchase by competitive tender. However, itpotentially leads to a complex and expensive maintenanceinfrastructure. This is due to the number of different
89
jointing technologies which would have to be available onboard the world's existing cableship fleet.
BT Marine and AT&T have overcome this problem byforming a consortium with Alcatel and KDD to introduce astandardised approach to optical submarine cable jointing.This new technology is known as UNIVERSAL JOINTINGAND COUPLING or "UJ/UC". It is already in service inthe Atlantic on TAT 9 and has now been accepted for use onall of the other major optical submarine cable systems to dateThis includes TASMAN 2, PacRimEast, PacRimWest, APCand TPC-4 in the Pacific region.
This paper explains why a standardised method of jointing isnecessary, provides information about the technology usedand explains the many benefits which cable owners derivefrom its introduction.
3. WHY IS A STANDARD JOINTING METHODNECESSARY?
During the early 1980's the four prime analogue submarinecable manufacturers were investing heavily to develop anoptical capability, each taking a unique approach to solvingthe many diverse technical problems. By 1986 each had aviable product, short-haul systems were being installed andlong-haul transoceanic systems were being planned.
The need for a standard jointing method was perceived byprospective long-haul cable owners in the Atlantic and Pacificregions at a very early stage, even before such cables wereinstalled. This was because it was recognised that the newoptical systems had to be maintained within the existing zone-based cableship agreement infrastructure.
The ship agreements provide for fully equipped cableships tobe available for repairs 24 how a day, 365 days a year inseveral maintenance zones around the world. The provisionof a jointing service for all types of analogue co-axial cableswas easily accommodated within these ship agreements.The jointing equipment was relatively simple and hence lowcost, the associated jointer training being equallystraightforward.
However, the emerging optical jointing technology wascomplex and expensive, jointer training requirements moresophisticated. In addition, jointing time was much longerand required the routine shift working of jointers tocomplete repairs, thus forcing an increase to their numbersand further increasing costs. With four manufacturersoffering different but equally expensive jointing solutions,the case for a standard jointing method quickly becameapparent.
During these early stages the prospective cable owners triedto persuade manufacturers to co-operate by adopting acommon approach to jointing methods, but without muchsuccess. In retrospect, the reasons are obvious - cablemanufacturers needed to be secretive about their respectivecable designs in the hope of obtaining a leading edge in afiercely competitive market.
Against this background, co-operation by manufacturers tointroduce a standardised approach to jointing was animpossible Cable Owner expectation.
As cableship operators, BT Marine and AT&T were veryconcerned about this situation. The problems were broughtsharply into focus in 1988 following the installation ofTAT-8. This transatlantic system was supplied by three cablemanufacturers - AT&T (Simplex USA), Alcatel Cable(France) and STC (UK). It was entered into the AtlanticCable Maintenance Agreement (ACMA) for which therewere then five maintenance cableships operated by AT&T,FT, Teleglobe, BT and Telefonica.
To get total flexibility the five ships would have to beequipped with three jointing technologies and all jointerstrained. In practice this would have been prohibitivelyexpensive and the cable owners opted for a cheaper solution.This unfortunately reduced ship flexibility by restricting thecapability of most ships to only one jointing technology.
As a result of this experience BT Marine and AT&T decidedto co-operate on the development of a jointing system whichwould be infinitely adaptable to varying cable designs yetmaintain a standard approach for the actual jointinghardware - the basic concept for "11.1/UC".
4. UJ/UC HARDWARE
All jointing systems for deep-sea repeatered opticalcommunication cables require the following.
90
a. Connection of fibres
b Reinstatement of the tensilestrength of the cable
c. Provide pressure resistance for upto 8 km depth of water
d. Maintain conductivity of powertransmission path.
e. Maintain insulation of powertransmission path
f. Provide adequate mechanicalprotection from environment(e.g. against fishing activity)
The UJ/UC Jointing hardware consists of Equipment (used toconstruct the joint) and Piece Parts (the component parts ofthe joint itself).
4.1 UJ/UC EQUIPMENT
UJ/UC equipment has to be capable of a range of operatingparameters. This is necessary to provide the requiredflexibility to cope with an increasing variety of cable designs.This is particularly true of the moulding system which isrequired to reinstate cable insulating materials, as differentdensities of polymer are used, depending on the cablemanufacturer.
The equipment currently recommended by the UJ/UCConsortium is comprised of the following items:
AT&T 'SAMS' Moulding Equipment(reinstatement of insulation)
BTM Air Hytrel Stripper(required for STC cable)
AT&T Chemical Hytrel Stripper(required for Simplex cable)
BTM X-Ray Camera(Radiography of Mouldings)
State of the Art Fibre Fusion Equipment(connection of fibres)
A range of ancillary tools
The UJ/UC Consortium have a policy of continuousimprovement and equipment upgrades are introduced whencommercially available, provided of course that they are costeffective and compatibility with the UJ/UC philosophy ismaintained.
CABLE MANUFA 7,TURER A
ENDSPECIFIC PIECE PARTSRELEVANT TO CABLE TYPE
Figure 1. Universal Joint Exploded Viewof Core Components
COMMON PIECE PARTS
11.
CABLE MANUFACTURER B
4.2 UJ/UC PIECE PARTS
The unique design of the piece parts is at the heart of the UJ/UC philosophy.A Universal Joint (UJ) consists of end specific piece-partsand common piece-parts, see Figure 1.
The end specific piece-parts are unique to each cable typebut all have a common purpose in adapting cable ends topermit connection into the UJ/UC. In order to perform thisfunction effectively it is necessary to clamp all cableelements together to prevent relative movement. This isachieved using a cascaded ferrule - the main component ofany end specific piece-parts kit, see Figure 2. Thisinternationally patented device is the only component whichhas to be specifically designed to suit the core requirementsof the various types of cable currently available from theworld's suppliers.
A Universal Coupler (UC) is used to connect any repeaterhousing to any cable using the same common components asthe UJ.
Thus it can be seen that UJ/UC technology offers fullflexibility in enabling any cable to be connected to any othercable or repeater housing in either line or hybridcombinations. See UJ/UC schematic diagram in Figure 3.
91
5. UJ/UC BENEFITS
There are many benefits which derive from having a stanna,approach to jointing techniques on submarine cable
i Common Equipment
ii. Common Piece-Parts
iii. Unified Jointer Training
iv. Spare cable pooling
v. Competitive tender for spare cable
vi. Security of supply for spare cable
vii. Full repair ship flexibility
5.1 COMMON EQUIPMENT
In the North Sea today there are ten optical submarinesystems supplied by seven manufacturers If a universalapproach had not been adopted by the North Sea cableowners at an early stage there would now be eight differentjointing technologies in operation (one of the manufacturershas already changed his jointing system)
Q
Figure 2. Cascaded Ferrule Exploded View
CABLE TYPE A
OR
0L CABLE TYPE B
OR
OR
CABLE TYPE D
OR
OR
0
REPEATERHOUSING3uSING
OR
REPEATERHOUSING Z
Figure 3. Schematic Showing Flexibility of EVE(' System
UJ / UCCOMMON
PIECE-PARTS
OR
CABLE TYPE B
OR
//-
CABLE TYPE C
OR
CABLE TYPE
OR
CABLE T (PE F.
MDENOTES END SPECIFIC PIECE-PARTS
92
With UJ/UC only one set of equipment has to be purchasedfor each repair ship to cater for all existing and future cablesystems (N.B. Duplication is advisable for critical items dueto the remote nature of operations on ships at sea).
5.2 COMMON PIECE-PARTS
UJ /UC offers scope for pooling (sharing) of the commonpiece-parts referenced in para 4.2 . There is a resultantpotential for significant cost savings as large strategic stocksare usually held by individual systems.
5.3 UNIFIED JOINTER TRAINING
Since UJ/UC offers a common approach to jointingtechniques and uses the same equipment, the amount ofjointer training required is greatly reduced. This is especiallyof value where several cable types are to be maintained bythe same jointing teams as is now the case in the Atlanticand Pacific regions.
5.4 SPARE CABLE POOLING POTENTIAL
One of the side benefits of having a universal jointing systemis that spare cable lengths currently held for individualsystem maintenance can be pooled as common spare stock.The only constraints are that the number and type of fibres iscompatible and that the torsional performance of the twocables to be jointed is reasonably matched. With goodplanning, cable pools could lead to a significant reduction inthe amount of cable stored thus achieving considerablemaintenance cost savings.
5.5 COMPETITIVE TENDER FOR SPARE ('ABLE
Viother side benefit of UJ/UC is that when additional cableis required for the maintenance of any particular system, itcan be procured by competitive tender instead of purchasealways being restricted to the original manufacturer. Thisagain should lead to significant maintenance cost reductions.
5.6 SECURITY OF SUPPLY FOR SPARE CABLE
One of the features of the optical era is the number of newcable manufacturers entering the submarine cable market.Many of them will no doubt survive to become enduringsuppliers. However, some will inevitably go out of businessand the cable designs of others will quickly become obsolete
1:1 tl.ese circumstances UJJLC provides protection becauseanother --oandacturer's cable can be used to keep theobsolete c. stem in service for as lone as is required.
5.7 F t I.1. REPAIR SHIP FLEXIBILITY
i is no becoming the accepted wet Id standard formaintenance jointing of optical submarine cables. One of themost important UJ/UC benefits is the flexibility which will beavailable when all of the world's maintenance cableship fleethas been equipped. This will lead eventually to any ship
93
having the capability to repair any cable anyw het e. optimisineopportunities for faster repairs and minimising systemdowntime
6. UJ/UC AND CABLE MANUFACTURERS
It is interesting to note that all of the benefits liste: inparagraph 5 are of significant interest to cable owners but al cof little use to cable manufacturers Indeed almost all couldbe said to be against the interests of cable manufacturers sincemost will sell less jointing equipment, less piece-parts, lessjointer training and even less cable as a result of theintroduction of WAX
UJ/UC has been successful because cable owners everywhererecognise the practical benefits which the technology providesand the significant long term savings in maintenance costswhich will accrue.
BT Marine and AT&T have represent& .eir respectiveorganisation's cable owning interests by campaigning for theintroduction of this technology to increase the efficiency ofmaintenance ship operations and to give greater security tosystems in service. During the early stages of UJ/UCdevelopment some manufacturers were concerned about theintroduction of UJ/UC and suggested that their systemwarranties could be affected if UJ/UC were used to repairtheir cables. This problem has been totally overcome byseveral enlightened cable owners who have requiredmanufacturers to accept use of UJ/UC for system maintenanceas a condition of system purchase. This has been achieved bythe inclusion of the following clause at the tender invitationstage of cable system procurement:
"In the event that the Purchasers elect to provide their ownalternative maintenance jointing technology for use with theContractor's cable design(s) the Contractor shall.
a) agree that the use of such alternative maintenance jointingtechnology (including equipment and piece parts) will notinvalidate the Contractor's system warranty provided onlythat sample joints constructed by the Purchaser or itssubcontractor shall have passed relevant qualification tests asspecified by the Purchaser.
b) provide all relevant cable samples in a timely manner toallow the Purchaser or its subcontractor to perform theengineering and qualillcation of alternative maintenancejointing technolog.
It is noteworth, Piet some Cable Owners are now being evenmore specific by requiring UJ/UC compatibility to be acondition of Cable system purchase contracts
7. UJ/UC IN THE PACIFIC REGION
Following adoption of this technology by TAT 8 and TAT 9LIFIX has now been accepted for use on the followingmajor optical submarine cable systems in the Pacific region
System RFS
TPC-3 1989HAW-4 1989TASMAN 2 1991PACRIMEAST 1993PACRIMWEST 1994TPC-4 1992AP(' 1993HAW-5 1993
As a result of the above contracts the following existing andfuture Pacific region cableships will now be equipped withUJ/UC.
Ship
Global SentinelCS long LinesCharles L BrownKDD Ocean LinkPacific GuardianCS EnterpriseCS Retriever
Operator
AT&TAT&TAT&TKDDC&W(M)C&W(M)ACPL
8. FUTURE DEVELOPMENTS
The success of the UJ/UC concept has already given rise tothe possibility of benefits which are additional to the primarypurpose An example which has already been referenced iscable pooling which some cable owners are already using toachieve maintenance cost savings. However, as UJ/UCbecomes accepted as the industry standard even morebenefits become apparent.
8.1 USE BY CABLE MANUFACTURERS FORMARINE INSTALLATION
Some cable manufacturers now recognise that theintroduction of UJ/UC is a fait-accompli and are beginningto use it for marine installation of their systems. This willbecome progressively more advantageous to then as morecableships are equipped with U.1/11C technology.
8.2 USE BY CABLE MANUFACTURERS FORFACTORY JOINTING
It was never intended that UJ/UC replaces themanufacturers' own jointing systems However, somemanufacturers are known to be considering the possibility ofusing UJ /UC for factory assembly of their systems
8.3 STANDARD SPARE CABLE
This is one of the most exciting futurc. possibilities. Theintroduction of UJ/UC gives technical feasibility to theconcept of a range of standard spare cables being introduced.As referenced in para 5.4 the only compatibility problems arethe type and number of fibres and the torsional characteristicsof the cables to be jointed.
For example perhaps any six fibre cable could be maintainedwith a twelve fibre standard spare having six fibres each ofappropriate fibre design.
Co-ordinated introduction of this concept could lead to vastreduction in the stock holdings of maintenance cablethroughout the world as the need for system specific sparecable stocks would be eliminated. In addition the logistics ofcable storage would be greatly simplified.
9. SUMMARY
UJ/UC is now widely accepted as the industry standard formaintenance jointing of optical fibre submarine cable systems.Almost all systems now entering service, including several inthe Pacific Region, are taking advantage of this technology.
The benefits are considerable and will lead to lowermaintenance costs as less equipment and less jointer training isrequired.
As more cables acquire this technology, cable owners will beable to realise the potential for reducing the strategic stockholdings of spare cable. This will in the medium term lead tosignificant additional savings.
941,
Recent Trends in International Value Added Network ServicesAgreements in the Pacific Basin
Dr. Eugene NewmanAssociate Professor of Telecommunications
State University of New York Institute of TechnologyUtica, NY USA
ABSTRACT
International trade in value added services is a $200 billion per year industry,and one of the most rapidly growing markets in global telecommunications. Thismarketplace includes such diverse services as videoconferencing, electronicmessaging, electronic document interexchange, electronic banking, online databases,telemetry, remote data processing, and network management services. IVANS is alsoa complex series of commingled trade and regulatory issues which are successfullychallenging traditional national telecommunications monopolies and creatinginnovative government competition policies.
Deregulating access to historically nationalmonopoly networks for foreign private and publicproviders of value added services, which offertransparent end to end user connectivity, hasmoved gradually forward in the past five yearsin the Pacific Basin. It has moved forward inthe area of bilateral negotiations, Pacific areawidemultilateral talks,at NAFTA, and globallyat the General Agreement on Tariffs and Tradenegotiations. Progress has been slowest at theGATT, however, where apparently irreconcilableagricultural disputes between the EuropeanCommunity and the United States threaten tocollapse this GATT round, including trade invalue added telecommunications servicesdiscussions.1
Progress, however, has been more steady andfruitful in Pacific Basin regional and bilateralnegotiations. These include the IVANS negotia-tions of the Asia Pacific Economic Cooperationgroup; NAFTAiand the United States-Japan, UnitedStates-Hong Kong, and Japan-Korea talks. It isnot surprising to find so much progress on IVANSin the Pacific area. Here both innovativegovernment regulatory authorities and user groupshave been most active for almost a decade now.The United States, Canada, Japan, Australia, NewZealand, South Korea, Hong Kong and Mexico haveall implemented various advanced degrees ofprivitization of former monoploy statesas well as created competition in the provisionof value added and even voice telecommunications.
For these countries, growth in trade in valueadded services is seen as a spur to economicgrowth generally. This is because competitionin the provision of diverse, high quality, costbased value added services stimulates the growthand complexity of international intracorporatenetworks. And those countries with the most costeffective and advanced telecommunications serv-ices are most likely to attract the corporate andregional headquarters of these global companies.Thus jobs, tax receipts and national economicpower are very much components of successfulIVANS agreements.
95
IMPLICATIONS OF TRADE IN IVANS FOR INTERNATIONALVOICE SERVICES
For the United States Federal CommunicationsCommission, competition in IVANS is seen as partof a still larger goal to reduce the accountingrate charges for international voice calling.Under Chairman Alfred Sykes, there has been anaggressive policy of attempting to reduce by halfthe $7 billion annual cost of internationaltelephone calling from the United States.
Traditionally, high rates for international voicecalling were reached through bilateral arrange-ments with state owned monoploy voice suppliers,the PTTs, who wished to keep the calling("accounting") rate high in order to generatesubsidies for both domestic calling and generalrevenues for the state owner. The CCITT managedthis global system which now benefits higherpriced foreign monopolies, which charge more fortheir originating and terminating calls, thanlower priced, highly competitive Americancarriers. The traditional 50/50 split in reven-ues also means that those states which receivemore than they transmit to the United Statesobtain an even greater share of the profits ofinternational telecommunications.2
Several approaches are being investigated by theF.C.C. to drive down international voice callingcosts. These include direct American carriernegotiations with foreign PPTs to lower theaccounting rate, possible reduction in thetraditional 50/50 split with higher pricedforeign carriers, and American pressure in CCITTStudy Group III to reduce accounting ratesacross the board.
Another approach is the licensing of resale ofinternational circuits between two competitivecountries in order to attract a larger share ofglobal business traffic, and thereby compellower prices from recalcitrant monopolies inother states. Resistance to this creativeapproach has been strong from both higher pricedforeign monopoly carriers and even Americancarriers loathe to lose the higher profits to beearned on incoming traffic from their monopoly
correspondents. The drive by IVANS carriers toopen up monopoly privilege and drive down theprice of international leased line circuitstherefore provides a model for increased voicecompetition and ultimately lower user costs forboth IVANS and voice users. The possibility ofresale is particularly strong between the UnitedStates and the United Kingdom.3
Successful future IVANS negotiations are there-fore of great importance to both the F.C.C. andthe U.S. Trade Representative, as well as formultinational corporate users and competitivevalue added carriers.
There are many broad similarities in the manybilateral negotiations on the complex issues ofuser access to competitive international valueadded network services. These similaritiesinclude definitions of value added versus basicservices; rights of foreign value added servicesupplier market access, establishment and invest-ment; and the degree of regulatory control overrate structures for both users and providers ofIVANS. More specific points include a searchfor agreed upon definitions of internationalinteroperability of technical standards; userproprietary data protection; national or mostfavored nation treatment of foreign value addedservice providers; and, finally, intellectualproperty issues.
A common theme of the bilateral negotiations isthat the least aggressive position will framethe outcome of the talks. This is to say that,pQeific reserved services of the national
i,r (such as basic domestic local and longaiLance voice and telex services) will not beincluded in the final agreement. This does notrule out pressure later in the 1990s to deregu-late the competitive provision of voice services.
The 1991 United States-Japan IVANS agreement wasthe first IVANS negotiation successfullycompleted. This complex arrangement investigatedall of the IVANS issues raised above. It alsosuccessfully defined intracorporate communica-tions and shared use. A continuing issue stillbeing discussed is the Japanese contention thattraffic originating in Japan, processed androuted through the United States, and transmittedto a third country may not fall within theagreement. This sticking point is still undernegotiations, and clearly involves a potentialchallenge to the spirit of the agreement ifJapan insists on extending extraterritorialityclaims on data originating within Japan tosecond and third countries.
The complex talks between the United States andJapan revealed the major parameters required toopen up the previously restricted Japanese IVANSmarketplace. The first parameter was negotiat-ing access to the specific marketplace itself,in place of a general goal of national treatmentapplied to all goods and services. Previous useof "national treatment" had led to denial ofspecific marketplace access for some American
businesses.
96
Secondly, deregulation of services access impliedc%anging the customer owned terminal equipmentconnected to the services. In the case of IVANS,this meant having the Japanese make available totheir own corporate users the more sophisticatedequipment which their suppliers already weremarketing overseas.
The third parameter is the direct connectionbetween the domestic and international telecom-munications services markets. These twoare seamless for large corporate users, andderegulation of part or all of one of the twomarkets will lead eventually to the almostcomplete deregulation of both. Resistance toaccess to IVANS, therefore, is often promptedby fear of losing control over previously reser-ved domestic voice and data marketplace by stateowned monopolies or quasi-monopolies.
The fourth major parameter required to open upthe Japanese IVANS marketplace for Americansuppliers was acceptance by the Japanese ofproprietary technical standards. In this case,rejection of IBM's popular SNA standard in favorof the X.25 international standard for accesswas an example of the use of technical standardsto dany market access. The Japanese negotiatorsfinally accepted both technical standards foraccess to their corporate user marketplace.4
Following the American arrangement, the Japanesecompleted an IVANS agreement with the UnitedKingdom. This was more detailed in that itincluded a list of specified value addedservices.
The Japanese have since concluded TUNSagreements with Canada, Germany, France, andSwitzerland, and is in the final phases ofconcluding ones with Australia. and Hong Kong.5
Following its arrangement with Japan, the UnitedStates government, with the full support oftelecommunications users, is moving forward withother states in the Pacific area in order tosecure liberalized trade agreer nts for itsvalue added services industries. These agree-ments include Hong Kong and the Republic ofKorea, and impending ones with Australia andTaiwan. The form of these agreements can beeither a formal list of services opened to freetrade, or an exchange of letters similar to theUnited States-United Kingdom agreement. Thelatter agreement simply affirms that the domesticcompetition arrangements of the two powers willbe extended to trade in value added servicesbetween them.
ASIA PACIFIC ECONOMIC COOPERATION INITIATIVE
The most ambitious multilateral Asian-PacificIVANS forum is the Asia Pacific EconomicCooperation (APEC) initiative created in 1990 tofoster economic cooperation, trade and invest-ment in this area of the world. Its fifteenmember states have organized their consultationsinto ten working groups, one of which isaddressing telecommunications issues. Theseissues include gathering data of the regulatoryprocesses and policymaking among APEC members,
rules regarding foreign investment in telecom-munications infrastructure (such as IVANSfacilities), technical standards setting pro-cesses, teleports, electronic data interexchangein the region, and telecommunications trainingfor telecommunications operators and users.
The goal of all the working groups is to identi-fy the region's common interests and presentthem at the GATT talks, to promote policymakingconsistency among APEC members, to createspecific programs of economic cooperation, andto support private business interests in agrowing free market area in the Asian-Pacificregion.6
Combining the general goals of APEC with itsambitious telecommunications working groupagenda could likely lead to a virtualderegulation of the IVANS marketplace duringthe next three to five years. The work of allAPEC working groups will become of even greaterimportance if the present GATT negotiationsshould collapse. This situation will placeeven greater responsibility on regional multi-lateral talks to address pressing economic andtrade issues.
NORTH AMERICA FREE TRADE AGREEMENT
The most advanced multilateral negotiations inan Asian-Pacific forum are at the current NAFTAtalks, and especially at its separate workinggroup on telecommunications. These negotiationsare advanced both because of the extensiveinvolvement of users in the talks via theirrespective governments, and in the proposalsfor more liberalized trade in value addednetwork services. These proposals for tradeamong Canada, the United States and Mexicorecommend national treatment and nondiscrimin-atory use of the PSTN for foreign owned valueadded networks by 1994, although packetswitching and managed network services will notbecome competitive in Mexico until 1996.
Intracorporate networks on a non-commercialshared use basis is permitted, but not resaleof services.
Standards issues related to enhanced serviccJequipment are also resolved.
Competition in international value addednetwork services at a more basic leV'l(protocol conversion and electronic ma1.1, forinstance) would become competitive immediately,but the more complex and profitable managednetworks services and resale would be put offalmost until Telefonos de Mexico exhausted itsreserved monopoly voice services in 1997.
Basic services are not included in the NAFTAproposals, although American users and even manycarriers were in favor of including them.Resistance to full reciprocity (even with anextension of its voice monopoly to 1997 forTelefonos de Mexico) by both hexico and Canadahas restricted liberalization to trade in valueadded network services for the time being.
97
BEST COPY AVAILABLE
If NAFTA can survive governmental approvalprocesses in the three member states in 1993,then the largest competitive marketplace in theworld in basic value added network services willhave been created.
CONCLUSIONS
Recent trends in international value addednetwork service agreements have been positivein both bilateral and multilateral fora.Approval of the NAFTA proposals, which appearlikely, will make it easier for APEC negotia-tions, which are at an earlier stage, andinvolve more governments, to move forward. Themultiple successes of bilateral agreements,although some of these are more liberal thanothers, presents another alternative line ofapproach if multilateral agreements cannot bereached, or are muted due to domestic politicalpressures.
Many challenges still exist, however, both inopening up closed IVANS marketplaces, and increating still more liberalized regimes foradvanced value added network services wherelimited or moderate advances have already beenmade.
FOOTNOTES
1. Dana Theus and David Pelton. "CompetitiveSafeguards in Telecommunications: AnIssues Paper of the Information TechnologyAssociation of America." Regional Interestsand Global Issues: The Challenge of Tele-communications Integration for the Pacific.PTC Proceedings, Honolulu, 1992. p. 578.
2. Communications Week International, May 21,1991, p. 1; May 27, 1991, p. 12; September30-October 7, 1991, p. 4; November 4, 1991,p. 1; December 16, 1991, p. 1; Economist,July 6, 1991, p. 16; London Financial Times,July 13, 1990, p. 1.
3. Ibid.
4. Richard Beaird, presentation on Japanese-American value added network servicesnegotiations at the panel discussion"Telecommunications Value Added ServicesIssues: Recent Trends in InternationalValue Added Services Issues, GATT andBilateral Agreements in the Pacific Basin."Pacific Telecommunications CouncilFourteenth Annual Conference, January 1992.
5. New Breeze Quarterly of the ITU Associationof Japan, Inc., Spring 1992, p. 13.
6. Ambassador Bradley P. Holmes. "Asia PacificEconomic Cooperation (APEC): A forum forthe Future." Regional Interests and GlobalIssues: The Challenge of TelecommunicationsIntegration for the Pacific, PTCProcc'odings, Honolulu, 1992, pp. 337-39.
;$
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Monmouth Junction, New Jersey USA
David L. PetersonPrice Waterhouse
New York, New York USA
1. ABSTRACT
Telecommuting the practice of having employeesworking at home or elsewhere away from the traditionaloffice has become more popular in many Westerncountries. The authors contend that a combinationof factors (technical, cultural, and economic)today make telecommuting increasingly attractivefor many Asian countries. The future growth oftelecommuting throughout Asia depends on thewillingness of private-sector employers to adoptthis innovation, along with the need for a propergovernment policy framework.
2. INTRODUCTION
The Asian region is full of contrasts.Developing countries next to fullydeveloped ones; highly ;killedworkforces next to barely literateones; highly advanced communicationsnetworks next to ones that barelyexist. It is in this region ofcontrasts that we offer the idea thattelecommuting is a work method whosetime has come.
"Telecommuting" (also known as"telework") refers to the practice ofhaving employees do some or all oftheir work away from the traditionaloffice setting. They may work athome, in so-called satellite orneighborhood offices, or even acrossnational borders in so-called offshoreoffices. Whatever form it takes, webelieve that telecommuting is, in fact,fully appropriate for many Asiancountries as they continue to developtheir businesses, governmentoperations, and telecommunications.
Since the age of the IndustrialRevolution, we have been refining theprocess of bringing the workers to theworkplace. This has led to tremendouseconomies of scale in some cases, andvery complex problems in others.Telecommuting, conversely, assumes thatwe will bring the work to the workers(or at least some of them). This hassignificant implications for issues asdiverse as labor force utilization,regional and rural economic development,urban transportation management,business profitability, and theoperating efficiencies of public (andprivate) sector organizations.
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In this paper we will briefly surveythe telecommuting situation around theworld and then move on to tne specialcase of Asia. We will next discussthe potential advantaaes of being inthe position of a late adopter of thismethod, and then cover the variety ofremote work locations that areavailable. We conclude with a reviewof policy development options thatexist, and their implications forgovernment agencies from local tointernational levels.
We approach this paper with threefundamental beliefs:
1. Most, if not al), knowledge-basedwork is virtually iccation-independent,and much of it is time-independent.This means we can do mz-st office workat any place or any time.
2. Telecommuting is a proven managementmethod with demonstrable success, notan uncertain experimental concept.
3. There are significant public poli-yissues surrounding telecommuting that,to date, have not been adequatelyaddressed in most ccAatries where theconcept is in use. This is an oversightthat needs to be addressed in Asia(and elsewhere) in order to fully takeadvantage of telecommuting.
3. TELECOMMUTING DEFINITIONS
In this paper we will be discussingthree forms of telecommuting; thesewill be more fully explained in section6. The basic element of telecommuting
is the decentralization of thetraditional head office as we know it.While the head office will (and should)continue to exist, we will see threeother work locations become more common:
A. HOME-BASED TELECOMMUTING: This isfor office workers who will spendseveral days a week on a routine basisworking at home. The time will rangefrom a minimum of one day to fourdays, and only rarely will the personwork at home a full five days a week.This does not include the occasionalday spent at home to do paperwork; weare concentrating on the regular,routine substitution of home time foroffice time.
B. SATELLITE OFFICES: These are hybridsbetween the traditional head officeand the work-at-home situation.Typically these are for small numbersof workers (10-50) and are located inor near suburban areas. Their advantageis to reduce commuting times and tohelp attract workers who cannot orwill not work full-time in the downtownhead office. In some cases thesesatellite offices could be quite adistance from the metropolitan area;these rural work centers offer distinctadvantages to be discussed later.
C. OFFSHORE OFFICES: This most extremeform of telecommuting exists whereaccess to advanced telecommunicationscapabilities and/or lower-cost labormakes it desirable to set up an officeat a considerable distance from thehead office sometimes halfway aroundthe world. Most of today's offshoreoffice work is for lower-level taskssuch as forms processing or data entry,but an increasing amount involves high-level computer programming skills.
What is common to these definitions isthe idea of decentralizing the officeas we know it. As the next sectionwill show, telecommuting is oftenassociated with work at home but thatis far from the only form it can take.
4. SURVEY OF TELECOMMUTING AROUNDTHE WORLD
Examples of telecommuting activity invarious countries include:
A. UNITED STATES: Telecommuting isbecoming rather well established, mostlyin home-based work, with growinginterest in satellite offices and ruralwork centers. Current estimates suggestthat at least one million salariedworkers telecommute on a regular basis.Among the main reasons for this interestare business pressures (need to improve
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recruiting or retention, need toincrease productivity), workerpreferences for more flexibility, andthe use of telecommuting as one methodto help reduce traffic congestion andair pollution.
B. JAPAN: Most telecommuting has beendone at satellite offices, with almosttwo dozen such offices having beenpiloted or established in the lastfive years. There is growing interestin satellite sites as one answer tothe difficult problems of populationconcentration in the metropolitan Tokyoarea. Also, some employers are startingto look at satellite offices locatedfar from Tokyo to help attract andretain qualified engineers and otherprofessionals who want to leave Tokyoin favor of their home towns.
Home work in Japan has been limited bythe small size of many Japanese homesand apartments, although there is someinterest growing in this kind oftelecommuting particularly for marriedwomen who want to re-enter the workforcebecause of the current labor shortage.
C. EUROPE: Telecommuting has beenstudied and/or used in countries suchas England, Sweden, Ireland, Italy,Germany, the Netherlands, and Finland.Most of this is the work-at-home variety,though there has been considerableinterest recently in satellite officesand rural work centers because oftheir economic development potential.
D. NEW ZEALAND AND AUSTRALIA: Modestinterest has been developing in thisregion, though most of the work doneat home has been -)f the self-employmentvariety. Interest has been growingrecently based on several conferencesheld to brief the business community,and various government agencies areexamining possible policy initiatives.In addition to these countries, interestin and/or use of telecommuting isdeveloping in Canada, Argentina,Singapore, Spain, Belgium, and Norway,to mention a few. It should be clearfrom this pattern that telecommutingis no longer an experimental orspeculative idea; it has been provento work and to create good results fortelecommuters and their employers. Inlater sections we will suggest somereasons for likely growth in Asia.
5. TELECOMMUTING: A DIFFERENTPHENOMENON IN ASIA
Telecommuting will take different formin each of the nations of the PacificRim. In the more "western" PacificRim nations (Australia and New Zealand),patterns of adoption are likely to be
similar to those of the U.S. andCanada. Most other Asian nations arelikely, however, to have unique adoptionpatterns, which may be somewhatunrecognizable to western observers,and will introduce new variations onthe form that could not have takenplace in the west.
Here is a review of five of thefactors that will help determine whatform telecommuting takes around thePacific Rim:
5.1. Housing Conditions
Housing conditions in the Pacific Rimnations will influence the form thattelecommuting takes. Australian andNew Zealand homes are the closest tothe American suburban model, oftenwith extra room for such activity astelecommuting. Singapore's housing,while quite dense in terms of unitsper acre, also has relatively highsquare foot area per person. Japanpresents the other extreme, with highlycrowded housing in metropolitan areasthat very seldom is appropriate for"work at home" telecommuting.
5.2. Telephone Availability
A wide gap separates the telephone"haves" from the "have nots" in Asiaand the Pacific Rim. Recent statisticsillustrate the wide range of variation:
Nation Phones per 100 Population
Australia 55
China 1
Hong Kong
Indonesia
Japan
Malaysia
New Zealand
Philippines
Singapore
South Korea
Taiwan
Thailand
41
1
54
8
64
1
41
17
30
2
One must look more closely at thesestatistics, to learn more about possibleimplications for telecommuting. Forexample, telephones in Thailand arepredominantly in businesses, ratherthan homes. Street corner and villagephones often suffice for the residential
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customer. This suggests that adoptionof telecommuting will take the form ofbusiness center to satellite center,rather than "work at home."
In Singapore, on the other hand, phoneinstallations in the home arecommonplace, and the government isencouraging wide use of the "Teleview"home information service. Here, "workat home," in combination with satellitecenter applications, could appear.Finally, in Hong Kong, many of thetelephones in use are mobile phones,used by owners of small businesses toeliminate the need for a fixed officeand permanent receptionist. Here,mobile phone use takes place on foot,in a highly urban setting, rather thanin cars and on freeways.
5.3. Cultural Factors
In this paper, we can only begin tooutline some of the cultural factorsthat will influence adoption oftelecommuting. In Japan, the need forface to face contact between employeesis recognized as an important featureof business style. This may limitadoption of telecommuting there,although work is currently underway onvideoconferencing software that canaccurately communicate facialexpressions! In Singapore, culturalissues may help to encourage "work athome" telecommuting. While the nationseeks to educate both me. and women,and to use their talents to the fullest,it also recognizes and encourages theinvolvement of women in child-rearing.
5.4. Settlement Patterns
Land use planning concerns will shapethe character of telecommutingthroughout Asia and in a number ofdifferent directions. Japan, Singaporeand Taiwan all seek to decentralizepopulation and employment from congestedurban centers, and have serious plansfor creating dispersed work centers,which could be test-beds for satellitecenter telecommuting experiments.Indonesia, a nation of over 13,000islands, stretching over 3000 miles,has faced the challenge of educating adispersed population. The next challengeis to provide employment to thisdispersed population, rather than bearthe costs of too-rapid urban growth ina few centers. Telecommuting dispersedoffice work could provide part ofthe answer. Other nations, likeThailand and Malaysia, are now tryingto cope with the effects of congestionin their major cities. Telecommutingsolutions there at least formetropolitan areas are likely to besomewhat similar to the southernCalifornia model.
5.5. Government Policies
A number of different types of governmentpolicies can influence the level andcharacter of telecommuting. In mostPacific Rim nations, the policyenvironment is one of cross-currents,with some policies favoringtelecommuting, others working againstit. Effects are not always clear, andconsequences are not always intended.This list of some of the more significantpolicies will help to clarify this:
Policies favoring improved telephoneservice:
Most, perhaps all, nations, have nowrecognized the important connectionbetween the quality oftelecommunications infrastructure andnational economic strength.
Policies favoring training forinformation age employment:
Some nations have recognized theimporta...;e, also, of having highlyskilled employees available to utilizethe telecommunications infrastructure.Singapore, with its comprehensiveprograms geared to making the nationthe 'intelligent island," and India,with its vast reservoir of trainedsoftware engineers and technicians,are two examples.
Policies favoring employment thatgenerates positive foreign exchange:
These policies, however, have beenmore often implemented by sendingnationals abroad (e.g., Philippine,Thai and Korean nationals to the MiddleEast) than by seeking to bringinternational work in to the workersin their home country.
Policies favoring decentralization ofpopulation and employment:
Where these are combined withcommitments to provide public facilitiesand services at dispersed locations,they help to create conditions inwhich telecommuting can flourish.
There are, however, other governmentpolicies (such as those in Malaysiaand Thailand encouraging purchase oflocally-produced automobiles), that,while generating home countryemployment, seem to be creatingconditions of congestion similar tothose faced in U.S. urban centers.These policies could unwittingly undothe developing efforts to encouragetelecommuting in these same locales.
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6. THE ADVANTAGES OF BEING ALATE ADOPTER OF TELECOMMUTING
With the exception of the developingusage of satellite offices in Japan,and the role of various Asian countriesas providers of offshore office workfor clients in other locales,telecommuting has not taken hold inthe region very well, relative to itspotential as noted above. We believethis is actually an advantage of sorts;this may be one case where being lateris better, for the following reasons:
A. LEARNING FROM OTHERS' SUCCESSES -There has been a very good and continuingrecord of success in telecommutingapplications, and a good deal ofinformation about these programs ispublicly available. Even thoughtelecommuting is not necessarily acomplicated process to implement, thereis no need for newcomers to telecommutingto "re-invent" all of the policies andmethods. For example, employers oftelecommuters have developed selectionand training methodologies that havebeen tested and applied in other nations.
This means that the payoff fromtelecommuting can come more quickly tocompanies and nations just enteringthe telecommuting marketplace. Thismay be an important concern for thegrowing number of nations that areconcerned about the foreign exchangeeffects of telecommuting. Experiencein some Caribbean nations has shownthat skill level of telecommuters, andhence pay level, can be graduallyupgraded over time, thus increasingpositive foreign exchange impact tothe employing nation.
B. LEARNING FROM OTHERS' MISTAKESSimilarly, there is no need to repeatthe mistakes made by others. Theratio of success to failure in thelast ten years has changed dramatically,with failures dropping to a very lowlevel. However, mistakes were (andstill are being) made, and almost allof them can easily be avoided.
C. USING NEWER TECHNOLOGY Whentelecommuting got its start in thelate 1970's, the personal computer wasjust being developed, fax machineswere still relatively rare, ISDN was adream, satellite downlinks for datatransmission were not common, and fiberoptics was not available. Modem speedswere slower and modem transmissionssometimes yielded uncertain results,and applications software was anythingbut user-friendly.
Communications and network technologieshave been improved so that,telecommuting applications can be moreeasily custom-tailored to a nation'sor region's unique needs. Theconnectivity frustrations of even fouror five years ago were far greaterthan they are today. Today, we haveno lack of technology, and the pricesfor that technology continue to drop.These factors work in favor of countrieslooking to implement telecommuting.
D. NOT BEING SEEN AS AN EXPERIMENTERSometimes there is a certain excitementabout being among the first to use anew technology or new work method.In many cases, though,others do notlook kindly upon those pioneers. Itis often a struggle to justify the newmethod, and there is a kind of punishmentfor being at the leading edge. Nowthat telecommuting is widely used(though still not fully accepted),this is much less often a problem. Infact, those who adopt a new methodonce it has been proven (but before itis no longer considered an innovation)are often applauded for having thewisdom to take advantage of a new butproven method.
E. TELECOM EXPERIENCES Last, thelater-adopting Asian nations can derivebenefit from the experience of westerntelecoms companies, such as America's"Baby Bells" and the UK's BritishTelecom, each of which have moved wellalong the learning curve withtelecommuting experiments.
For these reasons, we believe thatmany Asian countries where telecommutingcan be used will actually benefit frombeing later to adopt this work method.
7.ASIAN TELECOMMUTING:A MULTILEVEL PHENOMENON
Asian/Pacific Rim telecommuting willlikely be implemented at three levels,simultaneously:
* within major metropolitan areas;
* within a nation, between urban andrural areas, or between geographicallydispersed settlements; and
* internationally, in the form of whatis often referred to as "offshoreoffice work."
It is this third form of telecommuting(the gradual emergence of the "globaloffice" to parallel the "globalfactory") that holds some of the greatestpromise and excitement for innovative
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new forms of telecommuting. The exampleof India's software writers provides aglimpse of this possible future. Indianow graduates over 400,000 softwareengineers annually, the largest numberof any nation in the English-speakingworld. Many of these engineers workin India, in cities such as Bangalore,for American, British - and if presentmarketing efforts bear fruit, Japanesefirms producing software code thatis "shipped" by satellite to itsdestination.
The importance of this group oftelecommuters can be seen when it isrecognized that these are some of the10% of India's employees who generateover 40% of the nation's foreign exchangeearnings. This experience can, andlikely will, be duplicated in othernations in the years ahead. For example,it is reported that the producers ofthe American legal research database"Lexis" now does approximately one-thirdof its data entry operations overseas,with major operations in such Asiannations as South Korea, the People'sRepublic of China, and the Philippines.
At the other end of the spectrum,nations have recognized the kinds ofbenefits that can be derived fromstatus as an "international financialcenter." Singapore's national programsof infrastructure development,tl-aining, and targeted encouragementof the location of appropriateinternational firms is one of the bestcurrent examples. Australia is nowmounting a national effort to emulateSingapore in this regard. Other nationswill follow, in this new form of highstakes, high technology, nationaleconomic development.
Telecommuting offers the possibilityfor Asian countries to further developtheir role as global economic forcesin financial services and other service-sector businesses, just as they havedone in the manufacturing sector.Sophisticated knowledge-based work thatcan be done via telecommuting is trulylocation-independent; customers aroundthe world can benefit from increasinglyhigh education levels and improvedtelecommunications infrastructure inAsian countries.
A Comment About The Speed of Change:Perhaps the most fascinating aspect ofthe Asian telecommunications andtelecommuting environment is the speedat which change is taking place.Statistics on telephone availability,such as those cited above, can berendered obsolete in just a few years.
Witness, for example, the South Koreanexperience. The nation had less thant..o million phones in 1980. By 1991,the total had increased to 15 million,or approximately one for every threepersons. Other Asian nations such asThailand, Malaysia, and Indonesia arenow prepared to invest in similar"leaps forward" in capacity.
Every bit as important as the sheernumber of phones to be added is theway they will be added in a fluid,free-form manner - cellular, mobile,as well as fixed lines. This influencesboth speed of installation and mannerof use. Mobile phones have becomepopular in some nations because theypermit users to bypass the long queuesfor standard service. And if thelocation of the phone is fluid, thenthe forms of use of the phone are lesslikely to be bound by the old forms of"office" and traditional work locations.
8. POLICY DEVELOPMENT OPTIONSWe believe there are some uniqueopportunities in Asia to stimulatetelecommuting. This is a case wherepublic policy can encourage private-sector initiatives, as opposed toseeking large publicly-funded projects.
Since Asian telecommuting will be amultilevel phenomenon local, nationaland international it seems appropriatethat policies that guide itsimplementation likewise be multi-tiered. The role of city andmetropolitan governments, and nationalgovernments, is relatively clear; therole of multinational and internationalinstitutions is, perhaps, less clear.
The rationale for encouraging public-sector involvement is that telecommutingis a very cost-effective way to helpachieve goals common to many Asiancountries. These include balancedeconomic development in rural and urbanareas (to avoid over-concentration incentral city areas), improved use ofeducated but underemployed workforces,and management of traffic and relatedair quality problems.
Here are some suggestions for policyinitiatives, based on what we haveseen (or seen the need for) in othercountries:
A. LINK TAX INCENTIVES TO EMPLOYERTRIP REDUCTION The quid pro quo foremployer use of telecommuting to reducecommuter traffic could be some form oftax incentive. In some locales (suchas Singapore), there are already ruleslimiting center-city vehicle travelduring peak hours. Telecommuting couldgo even further toward this objective,and is the only trip-reduction methodthat directly benefits employers.
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B. PROVIDE "SEED MONEY" TO ESTABLISHSATELLITE OFFICES Unless downtownoffice space is at a premium, there isa disincentive to setting up a satelliteoffice; it is less expensive to staydowntown (and take advantage of lowlease costs) than it is to relocateworkers to a satellite office in anarea where lease costs are higher.One way to counteract this problem isfor government to help underwrite thecost of setting up a satellite office,perhaps by making up the differencebetween the going rate for downtownspace and the cost of new satelliteoffice space.
C. PROVIDE AN "EDUCATION INVESTMENTRECOVERY REBATE" - In countries withhigh levels of state-supported highereducation, it is a tragic waste ofresources for university graduates toremain unemployed because they areunable to work in a traditional downtownoffice. As the economies in manyAsian countries continue to develop,there could be a rebate (in the formof a tax credit) to employers whohire graduates who are not employedand have not been in the labor marketfor the previous two years.
In particular, we are thinking aboutwomen who left the workforce to startfamilies but would like to return towork if they could find some kind offlexible work arrangement (such astelecommuting), or retirees who arestill willing and able to work but nowwant to restrict their work hours orwork locations. Employers who hirethese or similar workers viatelecommuting would be helping thecountry get a better return on itseducational investment and could berewarded for doing so by having aportion of salaries paid to theseworkers reimbursed by the government.
9. THE ROLE OF INTERNATIONALINSTITUTIONS
It has been noted that more money willbe invested around the world intelecommunications infrastructure inthe next five years than has been madein all the years since the inventionof the telephone in 1876. Much ofthat investment will be made in Asia,where available resources combine withrapidly growing economies and nationalrecognition of the importance of thetelecommunications sector.
The large, long-term shift that willresult from this massive investment isthe transition of much of the laborforce of Asia and the Pacific Rimnations from extractive andmanufacturing work, to information work.
This will be a major shift, sinceoffice work is now a relatively smallpercentage of total employment formost Asian nations. If the transitioncan be achieved smoothly, positiveeffects will result in the form ofeconomic growth, efficient resourceuse, and limited pollution and othernegative environmental impacts.
It would seem, therefore, that suchinstitutions as the Asian DevelopmentBank, the World Bank, the Japaneseforeign assistance agencies, and thoseUnited Nations agencies concerned withemployment and resource use, shouldplay an active role in ensuring themost effective employment impacts ofthe major telecommunicationsinvestments that will change the faceof Asia during the next few years.
Once again, let us state that we arenot calling for large-scale governmentinvestments for this purpose. Small"seed money" grants should besufficient, especially when providedwith the condition that matching fundsfrom the private sector be securedbefore the funding is released.
I. CONCLUSION
It was not very long ago that theAsian countries were, with fewexceptions, perceived as .)eingtechnologically inferior andunderdeveloped. This perception wasespecially strong when it applied totelecommunications infrastructure. Inthe eyes of some Western observers,this one feature alone could have beenenough to prevent these countries fromever taking their place as thrivingglobal economies.
Today, we know that these perceptionswere incorrect. The level of investmentin telecommunications throughout Asiahas been and will be significant,often allowing these countries to bypassentire generations of technology thatwere the norm in the West. One of thebenefits of this is the increasingsuitability of the region for varicusforms of telecommuting activity.
we believe that telecommuting representsa true "win-win-win" concept for Asia.First, the employers will win becauseit will give them better access totalented workers and help reduceoperating costs. Second, the workersthemselves will win becausetelecommuting will help them avoid thecosts and aggravation of the dailycommute, and also help them more fullyutilize their skills. Third, thecountries as a whole will win because
telecommuting will help them achievetheir economic development goals withouthaving to endure (or by being able toreduce) some of the problems thattypically accompany this growth, e.g.,traffic gridlock, air pollution, andlabor market imbalances.
As is true in the West, the Asiancommunity will not soon see a day wheneveryone will be working at home intheir blue jeans, kimonos, or saris.The office as we know it will continueto exist for most of the workforce.However, there will be a growing rolefor 'Lelecommuting assuming the rightmix of public policy guidance andsupport and private sector initiative.
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Southeast Asian Telecom
Anne-Marie RousselData Communications International.Paris, France
In Southeast Asia, as in other parts of the world, newcompetition is giving more choices to telecoms users wanting toset up corporate networks. PTTs in established business centerslike Hong Kong and Singapore are cutting tariffs and upgradingtheir networks. Telecommunication services are also improvingelsewhere in Southeast Asia, as new service providers appear inIndonesia, Malaysia, the Philippines, and Thailand.
With economies booming across SoutheastAsia, carriers are moving fast toimprove their telecommunicationsnetworks. Eager to lure more foreigninvestors to the region, PTTs inestablished business centers like HongKong and Singapore are cutting tariffsand upgrading their networks. Telecommu-nications services also are improvingelsewhere in Southeast Asia, albeit at amuch slower pace, as new serviceproviders appear in Indonesia, Malaysia,the Philippines, and Thailand.As in other parts of the world, newcompetition is giving network managersmore choices. In Southeast Asia, thecompetition comes from two directions:First, service providers in Hong Kongand Singapore are aggressively battlingeach other for the business ofmultinational corporations looking tobuild hubs for their regional networks.Both providers have scored somevictories as growing numbers ofAmerican, European, and Japanesecorporations abandon previous policiesof leasing lines direct from theirhomeland to each individual country anddevelop regional networks hubbed out ofHong Kong, Singapore, or both.Second, competition is starting toemerge in the provision of services inSoutheast Asia's developing countries.Modernization plans for existingterrestrial networks are making iteasier to get tail circuits frominternational gateways to customersites. At the same time, alternativeservice formats such as privatelyoperated satellite services are findinga foothold.Throughout the region, governments arerecognizing that good telecommunicationsservices go hand in hand with otherincentives to encourage foreigninvestment, such as the creation of tax-
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free zones for manufacturing facilities.As a result, multinational corporationsare flocking to Southeast Asia andtelecommunications spending is set togrow at a compound annual rate of 20percent in the next five years,according to a recent study by NorthernBusiness Information/Datapro (New York),a McGraw-Hill market researchconsultancy.The spending forecasts for SoutheastAsia also are reflected in majormodernization programs by PTTs. By 1995,the vast majority of the region's lineswill be digital. In Hong Kong,Singapore, and Thailand, digital lineswill make up more than 90 percent of thetotal.In addition, private operators aredeveloping new services throughoutSoutheast Asia, and multinationalcompanies and operators of internationalvalue-added networks (VANs) are makingsignificant investments in privatenetworks.Motorola Inc. (Schaumburg, Ill.), forexample, is beefing up its entire Asia-Pacific network, in step with its plansto increase manufacturing and designactivity in the region. "we're gettingaway from Dust supporting businesscommunications over the network," saysLucien Wang, Motorola's director forcorporate communications systems in theAsia-Pacific region. "We want to providemore cormunications to our manufacturingand engineering community." By 1996,Motorola expects to have five T1 (1.544-Mbit/s) links connecting Hong Kong,Singapore, Tokyo, and Phoenix, Ariz..plus one between Singapore and WesternEurope. The rest of the Asian networkwill be served by 64- or 256-kbit/slinks.Similarly, international VAN operatorInfonet Inc. (El Segundo, Calif.) has
built a fully meshed network thatdirectly links points of presence inHong Kong, Singapore, and thePhilippines. In addition, customers canaccess Infonet via gateways in China,Indonesia, Macao, Malaysia, andThailand. "What we've got in Europe,we've also got in Southeast Asia," saysJose Collazo, Infonet's president andchairman.Motorola's development of its networkillustrates the trend toward hubbingprivate networks within Southeast Asia.Until two years ago, communicationslines between the company's sites in,say, Hong Kong and the Philippines wererouted via a Motorola hub in the U.S.Today, Motorola's Asian sites are linkedvia one of two hubs--one in Hong Kongfor traffic to northern Asia and theother in Singapore for southern Asia."In most of the countries, [a leasedline to] the U.S. is in the same pricingzone as any other Asian location," saysWang. "For example, Hong Kong toSingapore is the same price as Hong Kongto the U.S., or Hong Kong to Malaysia."Thus, it's less expensive to rent asingle line between Hong Kong andMalaysia, because traffic routed via theU.S. takes up capacity in two leasedlines--one from Hong Kong to the U.S.and another from the U.S. to Malaysia.
Hong Kong vs. Singapore
Singapore's efforts to rival Hong Kongas the region's leading business centerinclude the provision of telecommunica-tions--and fierce battles over hubbingcorporate networks are already beingfought between the British colony's mainpublic network operator, HongkongTelecommunications Ltd. (HongkongTelecom), and Singapore Telecom.The competition covers a wide range ofissues, including general ones such asgovernment incentives for foreigninvestors and the potential forpolitical instability in Hong Kong,which is scheduled for return to Chineserule in 1997. Despite assurances fromthe Chinese government that Hong Kongwill continue to exist as a freeeconomic zone for at least 50 yearsafter that, investors and many HongKongers remain wary.Because of these issues, a number ofmajor private network operators areexpanding their presence in Singapore.One of them is Societe de Telecommunica-tions Aeronautiques (SITA, Paris), whichoperates a global network for airlines.SITA inaugurated its third-largestcommunications center in Singapore inN)vember, citing favorable investmentterms as one reason for its location.Two operators of financial informationservices, Telerate Systems Inc. (NewYork) and Reuters PLC (Lcndon), alreadyhave shifted Hong Kong operations to
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Singapore. "The prospect of changes in1997 is what made us start thinkingabout relocating, and then Singaporeoffered such strong economic incentivesthat it became cost-effective to move,"says Richard Lim, network manager forTelerate Asia Pacific Pte. Ltd.(Singapore), a financial servicesprovider.
Spreading The Wealth
Other users are putting their eggs intwo baskets to spread their risks andplay Hong Kong and Singapore operatorsagainst each other. General ElectricInformation Services Inc. (GEIS,Rockville, Md.) maintains its mainregional hub in Hong Kong but is beefingup its Singapore operations. "More andmore operational headquarters ofcompanies are moving from Hong Kong toSingapore," says M.Y. Yeow, GEIS countrymanager in Singapore. "Once thedecision-making people such as thechairman and officers are here, thecommunications hub usually is not farbehind."Another company sharing its businessbetween Hongkong Telecom and SingaporeTelecom is the Hongkong and ShanghaiBanking Corp. (Hong Kong). Indeed, thebank is keeping score on key telecommu-nications issues, such as availability,reliability, and cost of services. Thebank also is rating the two carriers ontheir readiness to solve customers'problems and respond to changes in theregulatory environment.Motorola's records on circuit deliveryindicate both Hongkong Telecom andSingapore Telecom are slow in deliveringleased lines, but the delays are not assevere as in many European countries.Timing for delivery of circuits is onpar with Japan and better thanAustralia--where it takes about fourmonths to get a circuit, according toMotorola's Wang.In terms of tariffs, the battle betweenthe Hong Kong and Singapore carriers toattract corporate customers has led toan average reduction of more than 20percent in leased-line rates between1988 and 1991.Hongkong Telecom also cuts better dealsthan Singapore Telecom. "Hong Kong isvery competitive in tariffs," says Wang.Still Hongkong Telecom's tariffingso:tome could be improved, according totht Hong Kong Telecommunications UsersGroup. Late last year, the group filed aformal complaint with Hong Kong'stelecom authority, the Hong Kong GeneralPost Offi:e, about the operator'sproposed tariffs. Hongkong Telecom saysits pricing scheme will bring a 20percent decrease in the cost of regionalconnections for digital leased linesoperating at 64 kbit/s to 2 Mbit /s.However, the highly complex scheme
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offers discounts to new customers at theexpense of present-day ones, accordingto Tim Cureton, chairman of the users'group. "The net effect of the tariffdecrease is that communications costswill increase by 11 percent," saysCureton, who also is manager of grouptelecommunications for the Hongkong andShanghai Banking Corp.The new tariffs also penalize users whowant to retain analog circuits bycharging up to four times more for themthan for digital circuits. "There's beentremendous investment in digitaltechnology and hence oversupply in thataspect," says Motorola's Wang. Theoutcome of the users' group's complaintis still pending.Hongkong Telecom also has an edge overSingapore Telecom in terms of the numberof outages, although the duration ofoutages in Singapore is much shorter,according to records kept by Hongkongand Shanghai Banking Corp. Althoughusers never are happy with anything lessthan 100 percent availability of leasedlines, both carriers' records comparefavorably with the achievements of manyEuropean PTTs.Corporate users also give HongkongTelecom a much better rating thanSingapore Telecom for meeting customerrequirements. "Hongkong Telecom isgenerally very flexible because doingdeals is part of the Hong Kong culture,"says Cureton. The attitude of SingaporeTelecom, on the other hand, is in tunewith the island nation's highlydisciplined environment, in which lawsprohibit gum chewing, among otherthings. "Singapore Telecom's reaction tocustomers is often paternalistic," saysCureton. "What they offer is technicallyvery good, but they offer what they wantto offer."This opinion is echoed by Telerate'sLim, who also is interim chairman of theSingapore Telecommunications User. Group(STUG). Lim wishes Singapore Telecomwould offer several levels of servicefor leased lines."Various users have different servicerequirements," says Lim. "Some canafford downtime. Others can't and wouldbe willing to pay a premium for a higherlevel of service quality and maintenanceon international links. But that optionis not available yet."Cureton says Hongkong Telecom signed aquality-of-service agreement with hisbank, but a request for a similaragreement with Singapore Telecom wasignored.In addition to the political uncertaintysurrounding Hong Kong's return toChines- rule in 1997, the British colonyfaces an unstable regulatory situation.Hongkong Telecom's franchise to providedomestic services expires in 1995; itsinternational franchise runs out in2006. The government is reviewing the
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regulatory environment, and isreportedly considering ve.rio,is schemesto introduce more ompetition. But nodecision has been made yet about furthermarket openings, and, as Hongkong andShanghai Banking Corp.'s Cureton putsit, "the whole place is in a state ofuncertainty: competition or nocompetition?" Pending the announcementof the government's telecom policy, HongKong users are paying the price ofuncertainty: "Hongkong Telecom wo,i'tinvest in or introduce new services,"says Cureton.In Singapore, the government haspublished a draft law proposing theprivatization of Singapore Telecom, andshares may be traded by year's end. Butthis corporate revamping will havelittle, if any, impact on users sinceSingapore Telecom will retain itsmonopoly over everything except VANs andterminal equipment. Moreover, the VANmarket in Singapore effectively has beencornered by Singapore Network ServicesPte. Ltd.While retaining its monopoly, SingaporeTelecom is investing heavily in futureservices. This includes an outlay of$250 million over the next three yearsfor undersea optical fiber cableslinking Singapore to the rest of theindustrialized world. Other examples ofnew investments include SingaporeTelecom's virtual private network and anISDN service, both of which are beingattached to foreign networks forinternational coverage.
Elsewhere, Many Needs
For all their technological might, thereis one regional issue that sophisticatednetwork operators in Hong Kong andSingapore can't solve: the dismal stateof telecommunications in Thailand,Indonesia, the Philippines, and to alesser degree, Malaysia. The bottom linefor users is that while circuits arereadily available for internationalgateways in the region, it is still aproblem to go "the last mile" to builddomestic networks in these countries.Most nations in the region still arestruggling to provide basic voice anddata services over inadequate domesticnetworks. These countries are still along way from fulfilling the growingdemand for reliable data communication-zbut they are trying. The AsianDevelopment Bank (ADB, Manila), aninternational organization that offerslow-interest loans to developing Asiancountries for infrastructure projects,has lent $600 million for telecommunica-tions ventures since 1966, and it isapproving more and more telecommunica-tions loans, according to ADB senioreconomist Bruce Murray.Malaysia is probably the best positionedto supply users with domestic leasedlines. Its telecom network is more
developed than those of its neighbors,with more phones per customer and moreavailable leased lines.Furthermore, the Malaysian governmentlaunched an agressive economicdevelopment program last year that willfurther enhance the telecominfrastructure. The country's operator,Syarikat Telekom Malaysia Bhd (STM,Kuala Lumpur)--which was privatized in1987 but remains under the purview ofthe government--was awarded a five-year(1991-95) budget to upgrade itsinfrastructure. Projects includeexpansion of STM's four main dataofferings: Datel, for low-rate linksover the public telephone network;Maypac, the packet-switched X.25 datanetwork; Maycis, the circuit-switchedservice; and Telemail, an X.400electronic-messaging service. STM isalso in the process of developing ISDNservices, which are scheduled to becommercially available next year in thecapital city of Kuala Lumpur.Next on the performance list isThailand, where an estimated 1.2 millionpeople and businesses are waiting forphone lines. All domestic service iscontrolled by the Telephone Organizationof Thailand (TOT, Bangkok), which hasundertaken several network expansionprojects, some of which will be handledby private entities with foreignpartners. For example, Nynex NetworkSystems Co. (White Plains, N.Y.) has a10 percent stake in a project withTelcomasia Corp. Ltd. (Bangkok) to buildand operate a 2-million-line digitalnetwork in Bangkok.These projects are aimed at fulfillingbasic telephone needs, not at providingsophisticated corporate data services.Indonesia, which one telecommunicationsmanager characterized as "a last-milenightmare, particularly in Jakarta,"also is seeking foreign help to upgradeits network. The country's domestic,not-for-profit telecom operator,Perumtel (Jakarta), has defined a five-year (1993-1998) plan to add 5 millionlines to its network. The Indonesiangovernment is allowing foreignparticipation in the project, but onlyfor the building phase, not forownership or operation of the network.Nevertheless, a number of foreignoperators--including U.S. regional Belloperating companies (RBOCs) and PTTsfrom Western Europe and elsewhere inAsia--reportedly have expressed interestin the project.As for the Philippines, the country mayenjoy the fastest-growing telecommunica-tions networks in Southeast Asia overthe next few years. Because thecountry's public terrestrial network hasbeen so inadequate for so long, usersneeding reliable domestic communicationshave long employed creative solutions insetting up private networks. Cne of the
country's largest food and beverageconglomerates- -San Miguel Corp.(Manila), which has numerousmanufacturing plars, distributors, andoffices across the Philippine Islands,built its own microwave towers andoperates its own links to ensurereliable voice and data communications.Furthermore, the Philippine telecommarket historically has been run byprivate entities. The country's largestoperator, Philippines Long DistanceTelephone Co. (PLDT, Manila), whichcontrols 94 percent of the publicnetwork, is publicly traded on theManila and New York stock exchanges. ThePhilippine market is open to competitiveforces, even if competition iscontrolled by the country's NationalTelecommunications Commission (NTC).There are three other main players, allpartly owned by U.S. or U.K. interests,and about 40 small local operators.Another major boost to Philippinetelecommunications could come from theNTC itself, whch recently amended PLDT'soperating license to include dataservices, according to Manila-basedtelecommunications consultant CharlesHorne of Halidon International HoldingsLtd. (Hong Kong). Until now, PLDT onlycould provide voice services tosubscribers; for data, it acted solelyas "a carrier's carrier" by leasinglines to providers of data services,Horne says.
The Satellite Solution
With its thousands of islands, SoutheastAsia is ideally suited for anothersolution to poor terrestrial service:privately owned satellite data networks.These networks, most of which use verysmall aperture terminal (VSAT)technology, are springing up all overthe region, encouraged by governmentpolicies that award VSAT licenses tomultiple private operators.But there are only two regionalsatellite systems that providetransponder services--Asiasat, owned byAsia Satellite Telecommunications Co.Ltd. (Hong Kong), which in turn ispartly owned by Cable & Wireless PLC(London); and Palapa (Jakarta), owned bythe Indonesian government.The Pacific Rim satellites of theInternational TelecommunicationsSatellite Organization (Intelsat,Washington, D.C.) also carry someintraregional traffic, and Thailand andMalaysia each are planning to launchtheir own domestic satellite systems by1994. For now, however, capacity isshort DI; about 60 to 70 transponders,accoraing to Andrew Jordan, Asiasat'smarketing manager. About 20 percent to25 percent of Asiesat's current capacityis used for VSAT systems, Jordan says,and several transponders on Asiasat's
second generation of satellites--to belaunched in 1994-95--already have beenearmarked for VSAT use."VSAT technology is particularlyapplicable to the area" for two mainreasons, Jordan says. First, in islandnations such as Indonesia and thePhilippines, terrestrial networks areeither impractical or too expensive toinstall, whereas a satellite systemeasily can cover a geographicallydispersed area. Second, in countrieswith poor terrestrial networks,satellites are the only means to reachdistant locations.In Indonesia, a public data networkservice operator called Lintasarta(Jakarta), partly owned by Perumtel, issetting up a nationwide 250-VSAT networkwith equipment supplied by HughesNetwork Systems Inc. (HNS, Germantown,Md.), for public data network services.In Thailand, four private operators areoperating two-way VSAT networks. One ofthese, Compunet Corp. (Bangkok), hasalready installed some 250 VSATs in thecountry and plans to expand its networkby about 200 VSATs per year, accordingto managing director Philip Richards.For its largest customer to date, theBangkok Metropolitan Bank, Compunet hasinstalled and is managing a 63-VSATnetwork in Thailand. Cable & Wirelesshas a 40 percent stake in Compunet. Theother operators of VSAT networks inThailand are Samart TelecommunicationsCo. Ltd. (Bangkok), Thai Skycom Ltd.(Bangkok), and Acumen (Bangkok).VSAT networks also have a bright futurein the Philippines. NTC, the country'stelecom authority, has licensed fourtwo-way VSAT operators to carry voice,data, and video services.The largest player, Globe-Mackay Cableand Radio Corp. (Manila), already hasinstalled 120 VSATs (supplied by HNS)across the country, and plans to have175 terminals up and running by the endof the year, according to Angelo Molato,the company's vice president for salesand marketing.Globe-Mackay's basic offering includesleased lines for voice and data andequipment rental. Prices run 34,000Philippine pesos (about $1,400) for a9.6-kbit/s data link and 48,000 pesos(about $1,975) for a 9.6-kbit/s dataplus a 16-kbit/s voice link. The VSAToption is attractive enough for AmericanExpress Co. (New York) and TexasInstruments Inc. (TI, Dallas) toconsider satellite links for theirPhilippine operations.San Miguel also has been won over byVSATs. The conglomerate is phasing outits microwave-based private network andreplacing it with a VSAT network to beimplemented and managed by Globe-Mackay.Plans call for 150 VSATs to be installedover the next two years serving S,1Miguel's data and voice needs. The other
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Philippine carriers with VSAT servicesare PLDT, Liberty Brcadcasting Corp.(Manila), and InternationalCommunications Corp. (Manila).Malaysia, too, is turning tosatellites--but not to VSATs. TheMalaysian government has granted asecond license to private operatorInformation Networking Corp. Sdn Bhd(INC, Kuala Lumpur) for data services aswell as access to internationaldatabases, all via the Asiasatsatellite. The system, which is hubbedin Kuala Lumpur with an internationalgateway in Hong Kong, is one of the fewin Asia to incorporate FDDI technology,according to Ron Cattell, director ofmarketing for Datacraft Asia Ltd. (HongKong), the network integrator that isimplementing INC's system.
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The Future of Value-Added Networks in the Pacific
Mr. Bruce Willey,Vice President, International Relations
MCI InternationalRye Brook, New York, USA
ABSTRACTU.S. telecommunications services companies view the Pacific as a fertile, untappedmarketplace for value-added services. While certain nations already have telecommunicationsnetworks capable of supporting value-added services, many do not; the latter nations will bethe focus of telecom development in the near future. In order to prepare themselves for value-added telecommunications and the economic benefits it can deliver, such nations must considerliberalizing their networks or risk falling further behind.
I am delighted to have an opportunity to speak to you todayabout the future of value-added networks in the Pacific.
It's a perfect topic for MCI, because we're vitally concernedwith all three -- the future, value-added networks, and thePacific.
With respect to the future, we are one of the most forward-looking companies I know. We are actively preparing for afuture that will benefit our users and our shareholders, bymaking substantial investments in our network, technology andpeople.
Second, we are dedicated to value-added telecommunications.We learned long ago that telecom companies that definethemselves only as carriers have limited impact and limitedprospects for growth. Consequently, we built MCI as thepremier supplier of value-added telecommunications solutions,and we will continue to be just that.
By the way, its important to make sure that we all mean thesame thing by "value-added telecommunications," so let me tellyou exactly what these words mean to me. They meantelecommunications that transcends the mere transport ofelectronic signals. They mean the storage and processing ofinformation and the addition of unique features possible onlyon a digital, intelligent network like MCI's.
Believe me, I understand that not all Pacifictelecommunications systems are ready in a technical sense tosupport value-added communications. But I believe they willbe soon. Multinational corporations crave value-addedcommunications. Global commerce demands it. I amconvinced that today's underdeveloped communicationssystems will find ways to accommodate the need...and soon.
Consider this: Five years ago, we were still rolling outCommon Channel Signaling System #7 across the UnitedStates. For those of you who don't know, SS#7 is the out -of-hand enabler of all value-added services. Five years ago, wejust didn't have the digital switches and ports to deploy itnationwide.
Today in the United States, nearly two-thirds of all of thetraffic on MCI's network is value-added traffic. All of ourdomestic and international Friends & Family and Friends of theFirm calls are value-added calls. Personal 800 is anotherservice that we rolled out recently, and it. too, is value-added,as are network management. time-of-day routing, store-and-
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forward fax, data bases, electronic messaging, call-detailreporting, virtual private networks, packet-switched data andthe other 50-plus services available from value-added servicesuppliers like MCI.
And that brings me back to my opening statement. I said at theopening that MCI is concerned about the future of value-addednetworks in the PACIFIC. Let me talk for a moment about ourinterest, and the interest of value-added suppliers everywhere,in this marketplace.
Simply put, the Pacific represents enormous opportunities fortelecommunications services companies worldwide.
Together, the 34 countries that encircle the Pacific and the 23island states scattered across its 70 million square milesaccount for more than 50 percent the world's population andhalf its total wealth. Its 3+ billion people speak more than1,000 languages and display the richest religious and culturetraditions of any region on Earth. Pacific nations possess 21percent of the world's oil resources, 63 percent of its wool, 67percent of its cotton, 87 percent of its natural rubber and 97percent of its natural silk. And now, they have established newmonopolies over information technology in semiconductors,superconductors, audio and video systems, and are rapidlymoving on to establish dominance in artificial intelligence andsatellite launching rockets.
And don't forget that the Pacific isn't just Asia, the SouthPacific and Micronesia, but also most of the countries ofNorth, South and Central America.
It's an immense area -- with some of the most importanteconomic and communications links of the future.
When companies like MCI view the Pacific, we see thousandsupon thousands of businesses and billions of individuals whoare potential users of the value-added services we provide.And, because so ri.uch of the Pacific is not yet hooked inmeaningfully to the global network, it represents a tremendousunderdeveloped marketplace that MCI plans to address.
I've mentioned the potential of the Pacific marketplace. Whatabout the accomplishments that have already been made? U.Ssuppliers are encouraged by the dramatic steps that have beentaken by our Pacific neighbors in the last five years. Forexample, Japan has one of the world's most advanced and opennetworks, with three domestic network control centerscompeting for local traffic and two international long distance
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carriers competing with KBD. In Malaysia, the Philippines,Australia, Mexico and other countries, free competition hascreated modern telecommunications systems and an almostinsatiable demand for value-added services. And New Zealandhas what may fairly be described as the most competitivemarketplace of all.
In each of these marketplaces, value-added telecommunicationshas helped to deliver economic benefits. For with value-addedcommunications, there has never been a greater array ofmethods for attracting foreign investment -- without spendingbillions in the process. The opportunities lie equally in serviceand manufacturing industries.
In services, for example, the personal computer, fax machine,and telephone form a trio of highly affordable communicationsdevices that allow engineers, architects, economists, writers,researchers, accountants, programmers, attorneys, insurers,environmentalists, physicians virtually all professionals towin contracts wherever they may be located.
When these professionals have access to a value-addednetwork, they can electronically send and receive funds, x-rays, reports, manuscripts, charts, blueprints, market updates,spreadsheets, data bases, contracts, photographs and otherinformation -- and they ca.. bring hard currency to any nationwhere they're working.
Along with this goes the idea that hospitals, financial centers,office buildings, libraries, laboratories, communicationscenters, teleports, and similar facilities can now be locatedveri practically in many places once considered "remote."
This means that every nation's uniqueness can be seen as anadvantage -- the traditional industrialized model of economicsuccess need no longer be the only model. Even tourism isenhanced when visitors to a country know they can easily stayin touch with loved ones and business associates back home.
The possibilities to profit from value-added globaltelecommunications are endless. But let me sum up what I'msaying with this thought: value-added telecommunicationsoffers huge opportunities for those who grasp its potentialtoday. You can measure these opportunities in increased hardcurrency, improved balances of trade, diversification ofeconomic development, as well as "spillover" benefits such asimproved residential phone service, expanded education andhealthcare facilities, and so on.
There's another, more ominous half to my thought, howlver.Nations that don't aggressively embrace the opportunitiescreated by value-added telecommunications risk falling evenfurther back in the economic race. And this threat of fallingbehind grows each day as technological advances andinternational telecommunications agreements -- like thoseconcerning ISDN -- continue to race forward.
Fortunately, service providers -- and I'm proud to number MCIamong them -- stand ready to provide virtually any countrywith sophisticated value-added services. MCI, for example,already brings most if not all of these services to the many ofthe over 200 nations we serve. We're ready to discuss doingeven more to help spread the wealth of the telecommunicationsresource.
Before anyone accuses me of taking a simplistic view of things,however, let us share a hard look at reality. Today's Pacific
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telecommunications scene is a striking study in contrasts. Insome ph.ces -- like Hong Kong satellite conference calls, faxmachines, electronic mail, and private networks are taken forgranted, while in others -- like Vietnam -- the distance of theaverage person to the nearest telephone can be measured inmiles and in years.
While residential users in Japan access a host of informationand financial services through their telephones and personalcomputers, many Vietnamese are unable to fulfill the simplehuman need of quickly phoning for help in an emergency.
The social and economic implications of these imbalances areclear -- and far-reaching: In places without value-addednetworks, capital investment will be slight, and businesses,hospitals, universities, and other vital institutions will bescarce.
The question that we at MCI must constantly address is how toturn this around how to make it possible for anyone,anywhere to have access to the benefits of value-addedtelecommunications. C.ne of the ways to achieve this end isthrough competition.
Indeed, competition has generated remarkable results whereverit has been introduced. In the U.S., competition has resultedin a fundamental overhaul of what was already considered theworld's most advanced telecommunications network. In theyears since divestiture in the U.S., the telecommunicationsmarket in the U.S. has grown by more than 60 percent, into analmost $200 billion industry. The competitive long-distancemarket along is more than a $55 billion industry -- despiteaverage rate reductions of more than 40 percent sincedivestiture.
In the U.S., competition has made available a full range ofvalue-added services: videotext, video conferencing, virtualprivate networks, store-and-forward fax, electronic mail, database services, network management and security services, datatransmission, electronic data interchange, ANI and a host ofothers. All of these can be available in any nation willing toopen their networks. In every instance where countries haveopened their networks, it has led to positive results.
At MCI, of course, we believe that competition is healthy andin the natural order of things. As a matter of fact, we have --by virtue of our acquisition of Western Union International andRCA Globcom about as much experience in the area ofcooperation as we do in the field of competition.
Especially in areas such as the Pacific Rim, where political andeconomic systems range from unbridled capitalism to militarydictatorships -- we are seeking ways to cooperate in addition toseeking ways to compete. We do not seek to impose ourcompetitive legacy on others. However, we do seekempowerment of the end users.
"Empowering the end user" requires the right balance of bothof these elements. Sometimes this is a little tricky to achieve,but history, both recent and distant, shows us that we can do it.
For example, a century and a half ago, agreements werereached that allowed telegraphy to blossom into a powerful.worldwide communications tool. Likewise, thousands of othercooperative decisions, on issues ranging from the shape ofphone jacks to the X.400 communications standard, have beenrequired to allow people to talk to each other.
Through good-faith negotiations and regulatory progress, these.ecisions have been worked out. And today more than everwith ISDN on the horizon -- it is important to note theregulatory progress I'm speaking of requires the rightcombination of cooperation and competition. Cooperation inrealizing the goals of universal access and global connectivity-- competition in the traditional business sense of strivingalways to bring the best possible offerings to the marketplace.
These are not frivolous concerns. In a recent examination oftelecommunications in the Pacific, the respected ColumbiaJournal of World Business put it this way: A country cannotbe an economic power without a strong and efficienttelecommunications network. Conversely, people who haveaccess to value-added telecommunications can expectintensified economic activity and prosperity.
For developing countries throughout the Pacific, the message isclear. The establishment of a value-added telecommunicationsinfrastructure is vital to success in attaining economicdevelopment goals.
Value-added telecommunications means business. It meansjobs and an opportunity to participate in the mainstreameconomy. And it mews that participation in the worldeconomy -- Drought about through better telecommunicationscan break the ground for other improvements....better roads,housing, schools and medical care. Value-addedtelecommunications enables whole regions to lift themselves upby the bootstraps.
The nations of the Pacific Rim are counting on us, you and me,to spread the benefits of value-added telecommunications. Tomake this happen, we must talk to each other, sharing ourvisions and goals and plans. Only in this way can we work outthe myriad details that confront us and thus bring ourselvescloser to the ideas of universal connectivity and prosperity.World events have ushered in an era of great promise forvalue-added telecommunications, and we must cooperateclosely as partners, providers and users if we are to realize thatpromise.
Now, let's take just a few moments to take a glimpse of thefuture. Everywhere throughout the Pacific, exciting andhistoric things are happening in value-addedtelecommunications.
The most obvious trend is the rapid improvement of networks,and I don't just mean in countries where networks have notpreviously existed.
Thanks to competition, the PTTs of Japan, Mexico and NewZealand, to name just three, will spend a total of some $100billion on systems modernization by 1999. Japan, in fact, is-.bout halfway into a 15-year, $150 billion project to digitizeand fiberize its network -- an effort that many other developednations will soon have to consider undertaking. And in theUnited States, it appears from recent court rulings that CATVwill provide wide-band access to American homes andbusinesses without the need for re-wiring the nation. Theresult, of course, would he still further proliferation of value-added services in that marketplace.
Even for Pacific countries like Singapore that have not yetprivatized, the introduction of competition in the region has, atthe very least, acted as a catalysts to accelerate the re-examination of government monopoly and led to networks
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capable of delivering value-added services.
There are other exciting trends in the Pacific, as well. Forinstance, in the next decade, we will -- thanks to cellulartechnology empower millions of once-isolated people andbusinesses. It's particularly important to island states like thePhilippines, Canaries or Marianas, where the main island mayhave fiber connections but outlying islands may have noservice at all. And here's more good news: In the near future,new technology will enable cellular systems to deliver many ofthe value-added capabilities of traditional systems.
Another driver of value-added communications in the Pacific isaffordability. Unfortunately, at the moment, Pacificcommunications are not as cost-effective as they should be.For many big multinational companies, private networks arethe ONLY kind of network available. However, thedevelopment of modern public switched networks in places likeJapan, Australia Singapore and Hong Kong is allowingsuppliers like MCI to deploy much-more-efficient, software-defined international virtual private networks. We havelearned that companies are much more willing to expandoperations in areas where the local network will support virtualnetworks, which is another reason we urge Pacific nations toget ready for value-added services. By providing a publicswitched, intelligent network, you not only help customersavoid the expense of private networks, you allow them toinstall and use a whole host of money-saving, productivity-improving applications.
As different economies in the Pacific grow and deregulate, youwill see the bigger carriers looking for opportunities tocompete on a regional basis -- carrying intraregional traffic.Thus, it may be possible for carriers like MCI to compete forvalue-added traffic between, say Japan and Australia -- trafficthat has no U.S. leg. Such truly global competition, when itoccurs, is sure to generate reduced prices and better servicesfor Pacific users, everywhere.
Another trend in the Pacific is driven by the relatively highcost of circuits in developed nations like the U.S. and Japan.In the next 10 years, we are going to see a much higherpercentage of hubbing emanate from the Pacific. This isespecially costeffective for, say U.S. or Japanese companiesthat have substantial operations in the Asia Pacific area. Thesecompanies are already discovering that they can send all oftheir traffic to a hub where circuit costs to the rest of Asia arelower, and then disperse the traffic around the world fromthere. It's another example of how a company like MCI,working with its Pac Rim partners is adding value to thePacific telecommunications scene.
Naturally, there are still many question marks -- and somecaution signs about the future of value-addedtelecommunications in the Pacific. Few movements in historyhave marched straight forwa .d, never zig-zagging. But it isprecisely in times of uncertainty that we need to remember ourguiding visions, and adhere to the basic principles ofliberalization, competition and cooperation.
These principles will help the Pacific Rim to successfully blendtogether the interests of the American and Asiatelecommunications systems so that everyone benefits. Theseprinciples will also help us decide on other basic regulatoryand policy issues like licensing, Open Network Provisie.ts, andregional standards.
1, for one, am confident that the industry were all part of is upto facing these challenges, just as we are all eager to explorethe unimagined opportunities yet to come. After all, very fewfields can compare with telecommunications in terms of thechallenge and excitement offered to all of us today. You and Iare privileged to be living at this time, with the responsibilityof shaping such a basic component of humanity's economic andsocial happiness.
We can not and will not let them down.
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NASA's Experimental Satellite Program for Future Telecommunication Services
Ray J. ArnoldOffice of Advanced Concepts and Technology
NASA HeadquartersWashington. DC
Dominick SantarpiaThe MITRE Corporation
Washington. DC
Jim CrisafulliOffice of Space Industry
State of HawaiiHonolulu. Hawaii
1. ABSTRACT
The Advanced Communications Technology Satellite (ACTS) represents the nextgeneration of NASA's advanced satellite communications research. The primaryobjective of the ACTS Program is to develop and demonstrate revolutionary
technologies that may be incorporated into future operational systems. ACTSadvanced features include onboard processing and switching; fast-hopping,high-powered spotbeams; Ka-band components, and a steerable antenna. To
compliment the capabilities of the satellite. NASA has developed an extensivesystem of ground stations and interfaces designed to maximize commercial
applications experiments. The NASA ACTS Experiments Program makes the ACTSsystem available to the public and private sectors for conducting experiments
of potential applications.
The Pacific Space Center (PACSPACE); a team of industry, university,government, and non-profit affiliates; is a participant in the ACTS
Experiments Program. PACSPACE intends to utilize a NASA-developed T-1 VSATand a High Data Rate (HDR) terminal for experiments. Potential experiment
opportunities are available to interested organizations in the Pacific regionunder the guidelines established by NASA. Telecommunications will be
instrumental in shaping future global economic development in the Pacificregion. The advanced technology represented by the ACTS system holds key
economic opportunities for the future.
Future expectations for the telecommu-nications market in general, and satellitecommunications services in particular, areoptimistic. Financial institutions arepredicting an explosion in the telecom-munications industry in the 90's; voice.data, and video network services--local andlong distance, domestic, and international--will emerge as one of the great growthindustries of all time.(1) This industry isexpected to grow at three times the rate ofthe overall industrial economy.(2) Theannual global sale of telecommunicationsequipment will grow from $135B in 1990 toabout $235B by the next decade.Telecommunications services enabled by thisequipment will have an estimated value in thetrillions of dollars, of which hundreds ofbillions of dollars can be contributed tosatellites. Satellites will thereforecontinue to be a key element of this industrydespite strong competition from othertransmission media.
2. INTRODUCTION
From its inception some thirty years ago. wehave seen communications satellites evolvefrom a reflecting balloon in space which gaveus the first, albeit faint. transoceanic two-way voice transmission via satellite totoday's high-powered. sophisticatedsatellites which provide voice, data, andvideo telecommunications services on a worldwide basis.
Through much of this period. NASA. togetherwith a host of U.S. industry partners.developed the rockets and spacecraft calledEcho, Telstar, Relay, and Syncom. therebyintroducing to the world, the basicspacecraft building blocks: batteries, powerconditioners, solar arrays. attitude control.spacecraft structures. orbit insertiontechniques. and communication payloadcomponents; which spawned a satellitecommunications industry. Following Syncom.NASA sponsored U.S. industry in thedevelopment of a series of AdvancedTechnology Satellites (ATS) that introduced ahost of new telecommunication applicationssuch as: land. aeronautical, and maritime .mobile communications; position location;data collection: disaster communications:direct video and audio broadcast; and others.many of which are being exploited today. Itis difficult to imagine that many of thesatellite-enabled telecommunications serviceswe enjoy today were drawing-board concepts adecade ago. They've become such an integralpart of our lives that we often wonder how weever got along without them. But what aboutthe future?
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Migration of certain satellite voice servicesto fiber optics will more than be made up bythe demand for telecommunications serviceswhich are unique to satellites. Very-SmallAperture Terminal (VSAT) networks havebecome, and will continue to be. a majorapplication of communications satellites.Mobile satellite services will soon beintroduced in the U.S. and have already beenintroduced elsewhere. Video and audio directbroadcasting satellite services will also
begin to emerge over the next decade.Satellites with onboard processing capa-bilities have already been demonstrated inspace, albeit for military applications.Major enhancements of this technology arebeing readied and will be validated in spaceduring the 90's for commercial applicationsof the early 21st century. These advancedspace systems will feature onboard switchingand multiple hopping spotbeams that willprovide opportunities for smaller-sized VSATto VSAT (direct) connectivity, directstation-to-station mesh interconnectivity.and networking that is dynamicallyreconfigurable to adapt to changing types andrates of traffic; and it will be provided on-demand. We will see future satellite systemswhich will help provide personalcommunications on a global basis. The futurefor the satellite communications industrycontinues to look promising, and NASA willcontinue to be a part of it. This paperexamines NASA's Advanced CommunicationsTechnology Satellite (ACTS) program, anexperimental satellite program that willusher in the next generation of satellitecommunications technology.
3. ADVANCED COMMUNICATIONS TECHNOLOGYSATELLITE (ACTS) AND EXPERIMENTS PROGRAM
To accommodate the expected increase indemand for greater telecommunicationsservices, technology innovations are neededthat will provide these services on a costeffective basis. ACTS accomplishes this bydeveloping and demonstrating on-orbit.revolutionary technologies that may beincorporated into future operational systems.The on-orbit validation of the technologyestablishes the confidence that is needed forembracing and applying the technology tooperational systems. The benefits realizablefrom this program include the introduction ofnew services, more cost-effective delivery ofexisting services, growth in the capacity ofsatellite systems, and effective utilizationof spectrum and orbit. Key spacecrafttechnologies to be validated as part of theACTS program include:
High EIRP fast-hopping spot beams
Spectral reuse through spatialdiversity
Higher throughput VSAT's (T-1 rate)
Smaller ground terminals
L_ficient capacity assignment togeographically non-uniform demand
Ka-band components
- Opening a new frequency band
- 2.5 GHz bandwidth
- Dynamic rain fade compensation
Onboard processing and switching
- Switching and routing on-board atindividual voice circuit level
- Single-hop mesh voice network
- Improved signal-to-noise ratio
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4. ACTS OVERVIEW
The ACTS system consists of a flight segmentand a ground segment. The flight segmentwill be launched on June 30. 1993 aboard theSpace Shuttle and placed in geostationeryorbit at 100 degrees W. longitude. ACTS willmeasure 46.5 feet from tip to tip along thesolar arrays and 30 feet from one antenna toanother. The on-orbit configuration of thesatellite is shown in Figure 1.
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Figure 1. ACTS Spacecraft Configuration
During the operational mission phase, thespacecraft is stabilized in three axes withthe large antenna reflectors facing the earthand the solar array panels rotating once perday to remain facing the Sun. Given theexperimental nature of the spacecraft.batteries are provided to supply power duringeclipse periods to essential bus loads only.The flight segment is comprised of twosections: the advanced technology payloadcalled the multibeam communications package(MCP) and the spacecraft bus which providessupport functions to the payload. Prominentfeatures of the MCP are the use of elec-tronically hopping multiple spotbeamantennas. onboard storage and basebandswitching of communication traffic, and Ka-band transmission.
Separate Ka-band (30/20 GHz) antennas areprovided for transmitting and receivingsignals. The antenna system provides twohopping spotbeam families (east and west)plus three fixed beams. The east and westfamilies are discriminated by polarization.Eigure 2 identifies the coverage areaassociated with each family. The east familyof beams comprises an east scan sector andsix additional spotbeams for isolatedlocation coverage outside the contiguous scansector. The west family comprises a westscan sector, seven additional spotbeams forisolated location coverage outside thecontiguous scan sector, and a steerablespotbeam to provide Hawaii and Alaskacoverage.
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The multibeam communications package providesthe means for receiving, processing,switching, amplifying. and transmittingsignals that carry high-speed digitalcommunications traffic in a TDMA network. Afunctional overview of the ACTS flight systemis shown in Figure 3.
Figure 3. ACTS Flight Segment
Two types of switching. one at baseband withstorage and the ot,,er at an intermediatefrequency (IF) have been incorporated intoACTS. The baseband switch, which is referredto as the Baseband Processor (BBP) providessingle-hop interconnectivity between allspotbeams. Hopping beams are most useful forserving areas where traffic is spreadgeographically and for isolated areas havinginsufficient traffic to justify the use of astationary spotbeam. Beam hopping aggregatesthe traffic from such regions. In this mode.communications to the satellite will be bydemand-assigned multiple access (DAM). TheIF switch, which is referred to as theMicrowave Switch Matrix (MSM). is based onsatellite-switched time division multipleaccess (TDMA) and is primarily used tointerconnect the three stationary beams ofthe ACTS satellite. although it may also beused to connect the hopping beam locationsduring predetermined periods of time. Thethree 900 MHz bandwidth channels of the MSMprovide the flexibility for a variety ofcommunication investigations. Microwaveswitch positions may also be fixed to allowfrequency demand multiple access (FDMA)communications.
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A major feature of the ACTS system is its useof a dynamic rain fade compensationtechnique. Rain fades can be detected bymonitoring the amplitude levels of the flightsystem beacons. The ACTS flight system willincorporate three beacons for real-time fademeasurements: two in the downlink frequencyband and one in the uplink frequency band.Signals from all three beacons will cover thefull continental United States. The downlinkfrequency beacons at 20.185 GHz (verticalpolarization) and 20.195 GHz (horizontalpolarization) are modulated with telemetryand ranging information, but they also doubleas fade beacons. The uplink frequency beaconat 27.505 GHz (vertical polarization) isunmodulated and will be used for powermonitoring (fade information) of the ACTSspacecraft. The beacons, however. are notderived from the same local oscillator and.therefore. are not coherent relative to eachother.
To complement the capabilities of thesatellite, NASA has developed or is in theprocess of developing an extensive groundsystem infrastructure that is comprised ofthree elements: the NASA ground station(NGS). the satellite control center (SCC).and several classes of experimenterterminals. A functional overview of theground segment is shown in Figure 4. TheNGS. located at rASA Lewis Research Center.Cleveland. Ohic,, will include the MasterControl Station (MCS). a low-burst rateterminal for BBP mode of operation and a LinkEvaluation Terminal (LET) for MSM mode ofoperations. The SCC located at GE Astro-Space in East Windsor. New Jersey. will belinked to the NASA ground station viaterrestrial voice and data circuits.Transfer orbit support and operations back-upto the SCC will be provided by a C-bandcommand, ranging, and telemetry (CR&T)station located at Carpentersville, NewJersey.
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5. EXPERIMENT PROGRAM OVERVIEW
The NASA ACTS program offers a uniqueopportunity to the U.S. public and privatesectors (corporations, universities, andgovernment agencies) to experiment withsatellite communication technology that isexpected to be operational at the turn of thenext century.
A two-year period of experimentation isplanned after the launch of the ACTSspacecraft. following a nominal one-monthperiod for on-orbit checkout. Sufficientpropellant will be carried onboard to providestation keeping for at least four years. Ifsufficient experimenter interest isidentified and additional operation funds areallocated, the experiment period may beextended an additional one or two years.
In addition to performing tests andexperiments that verify the on-orbitperformance of the advanced technologycomponents of the flight system and thatcharacterize the transmission medium. NASA isemphasizing the selection of experiments thatdemonstrate the commercial viability andmarket acceptability of new voice, data. andvideo networks and services.
This experiment emphasis is based upon anindustry recommended focus for the experimentprogram that would address a number ofpotential high-payoff application areas:
1.5 Mbps voice, video, and data networks;
300 Mbps supercomputer and HDTV networks:
Aeronautical voice and data applications;
Integrated services digital networks; and
2 kbps control and data acquisitionnetworks.
In conjunction with aeronauticalapplications, industry advisors have alsoemphasized the importance of obtaining acharacterization of the propagationtransmission path.
The experiment terminals being developed toprovide an experimenter capability in theseapplication areas are under development. Theexperiment terminals are classified into fivetypes:
Very Small Aperture Terminals (VSAT) fordigital networks which provide on-demand.full-mesh connectivity at T-1 rates over asingle hop:
High Data Rate (HDR) Terminals for point-to-point or point-to-multipoint networksat 1 Gigabit per second rates:
Ultra Small Aperture Terminals (USAT) or"personal" terminals for low data rate(kilobits per second) supervisory controland data acquisition (SCADA) typenetworks:
Mobile (both land and aeronautical.narrowband and broadband); and
Propagation Terminals for characterizingthe transmission media at Ka-band.
Under a 1990 NASA Research Announcement grantawarded to the Hawaii Pacific Space Center(PacSpace). experimental concepts utilizingACTS technologies were designed thataddressed four major applications areas. ThePacSpace application experiments require the
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use of the NASA developed T-1 VSAT and HDRexperimenter terminals described in Figure 5.The T-1 VSAT. which has an IntegratedServices Digital Network (ISDN) capability.will be loaned to PacSpace for approximatelya six-month period during the first year ofthe experiments program. PacSpace hascommitted to the purchase of an HDR terminaland will place the terminal in operation atthe conclusion of experiments conducted withNASA's T-1 VSAT.
Figure 5. Hawaii Application Experiments
6. PACSPACE/HAWAII OVERVIEW
Hawaii provides an ideal environment in whichto test and validate ACTS technologies. TheState's strategic mid-Pacific location hassecured its role as a hub for internationaltelecommunications and places it well withinthe footprints of numerous communicationssatellites serving Pacific Rim nations.Local industry is developing an extensiveinter-island and fiber-optic network tocomplement the existing inter-continentalnetwork linking Hawaii with nations aroundthe region and maintains collaborativeresearch programs with the University ofHawaii that continue to pioneer state-of-the-art communications systems and protocols.ACTS' state-of-the-art technologies willenable Hawaii to utilize these uniquestrengths and capabilities to advancemethodologies for data networking,management. and analysis, thus enabling theState to serve as both an innovator andtestbed for advanced space communications andinformation systems.
The Pacific Space Center (or PacSpace) iscl_rently mobilizing industrial, academic.and governmental resources to supportHawaii's ACTS Experimentation Program. Theacademic branch of this triad is led by theUniversity of Hawaii, which provides anexceptionally talented faculty andoutstanding on-campus facilities to supportresearch and development in space science andtechnology. The industrial element isrepresented by the Pacific InternationalCenter for High Technology Research (PICHTR),whose ongoing programs in energy research,information technology, and educationaltraining are helping advance internationalcooperation and development in these areas.Finally, governmental interests are beingpromoted through the Hawaii State Office ofSpace Industry. which has been working toboth expand and diversify Hawaii's space-related activities with special emphasis onbusiness development and technology transfer.aerospace education, publicinformation/community outreach, internationalcooperation through joint space ventures, andthe development of Hawaii's commercial spacelaunch potential.
7. PACSPACE EXPERIMENTAL FOCUS/OBJECTIVES
Recent advances in the areas of informationcollection, high-speed communications, andhigh-performance computation are revealingnew opportunities for commercial applicationsin these areas. Intelligent satellitecommunications will effectively complementterrestrial networks by offering high-speedchannels to remote areas of the world and byproviding dynamically reconfigurable networksfor specializes purposes. Similarly.developments in image processing andmanagement will expand the productive use ofcaptured images and provide new paradigms forcomputer/user interactions. Thesecapabilities facilitate applications whichwill enable humans to observe, model, andeventually manage earth and ocean resourcesand their dynamic processes. An outgrowth ofthis remarkable expansion in human capabilitywill be a rapid proliferation of newinformation concerning our world and ourrelationship to it. Advanced communicationstechnologies will also facilitate access toremotely situated information, therebycreating a new marketplace in informationservices for each basic information type.
In light of these significant technologicaldevelopments and opportunities. PacSpace willexplore experiments in four major areas thatwill validate ACTS technologies and promoteutilization of these technologies throughcommercial and governmental applications.
7.1 ADVANCED SATELLITE COMMUNICATIONS
While telephony-based communications havedeveloped with a speed and capability thatwould hardly have been imaginable only 25years ago, advanced satellite communicationswill take this technology to a higher levelof efficiency and productivity through the1990s. Satellites will help bridge the milesin providing high-speed communicationscurrently offered by terrestrial networks.This type of enhanced communicationscapability is required to speed the transferof remotely collected data to processingcenters and to move large amounts of archiveddata to remote users. NASA's ACTS. with itsassociated Ka-band capacity. Gigabittransmission speed, and steerable antenna, isidaally designed to service these needs.
7.2 EARTH OBSERVATION SYSTEMS/GLOBAL CHANGERESEARCH
The task of monitoring the Earth's resourceshas proven to be formidable, especially asthe desired data often resides in remote andinhospitable environments. There is acontinuing need to extend the reach andquality of scientific and commercial datacollection to these areas using sensorsdeveloped for atmospheric and wind currentmeasurements. remotely-operatedinstrumentation. and autonomously-operatedunderwater vehicles. ACTS' uniquecommunications capabilities will proveinstrumental in addressing these needs asthey will facilitate both the remotegeographic access and high-capacitytransmission capabilities required for globalmonitoring. The methodologies beingdeveloped through ACTS-related experiments tosupport image processing. management, and
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visualization will, in turn, enable users tomake sense of the enormous amount of remotesensing data being collected.
7.3 REMOTE INFORMATION SERVICES
Remote locations (e.g.. within the Pacificislands and rural communities of NorthAmerica) are largely limited to low-speedphone lines for data communications thatsignificantly constrain the types ofinformation transfer which can be offered.Moreover, areas of lower industrial densitywill tend to have fewer high-end computingresources than urban areas. ACTS' advanced'communications and image processingcapabilities will provide the enablingtechnologies to facilitate the transfer ofmuch larger streams of data for remoteinformation services.
7.4 IMAGE PROCESSING AND MANAGEMENT
In addition to enhancing data collection andtransmission from earth- observingsatellites, there is a need to developefficient methodologies for processing andretrieving these data so they may be put toproductive use. There are literallyterabytes of information being collectedabout the earth. demanding that compressionschemes be employed to reduce the systembandwidth required of an image forcommunication and storage. Key featuresshould be extracted and recognized to enableprocessing of the image at higher levels ofabstraction, thereby increasing throughputand user understanding. The image /data mustbe organized into image databases. whereissues of distributed access and personalizedbrowsing. as well as centralized processingand organizational management, are handledintelligently and responsively. Finally.there is a need for enhancing intelligentimage analysis capabilities so thatincomplete information can be inferred formore complete image reconstruction. Hawaii'sACTS experiments team will give heavyemphasis to these types of improvementswhich. collectively, should both complementand enhance ACTS data transmissionscapabilities.
8. DESCRIPTION OF EXPERIMENTS
Experimental ACTS projects to be addressed atPacSpace focus on developing, validating, andtransferring technologies in remote imageprocessing, management, and communicationsfor applications in earth observing, datacommunications, and remote/rural informationservices. The proposed projects arecategorized under the four major categoriespresented above.
8.1 ADVANCED SATELLITE COMMUNICATIONS
Modern communication systems increasinglyrely on a combination of terrestrial andspace-based communications networks forefficient operation. As the demand for thetransmission of high resolution images andfull motion video grows, flexible andreliable communications networks will becomeessential. Intelligent satellites such asACTS. with controllable switching and
t
steerable linkages, provide both thecomplementary coverage and critical backuprequired to help achieve this level ofperformance.
In order to establish truly complementarysatellite and terrestrial communicationnetworks. many underlying technologicalissues will require both research and systemdevelopment. To address this need. PacSpacewill conduct industry-supported R&D in hybridnetworks and satellite communicationtechnologies. It will also explore novelconcepts in the modulation, coding, andmultiple access of data that can be used withACTS-like systems.
8.1.1 HYBRID SATELLITE/TERRESTRIAL NETWORKING
Satellite networks can be used to connect anumber of surface networks or to augment asingular network. A terrestrial network isorganized into multi-node local area networks(or LANs) connected by short distance cables.Each LAN can also contain one node withaccess t., a satellite. The surface networknormally carries traffic between nodes.diverting it to the satellite system onlywhen its capacity is exceeded (this routingis usually desirable if satellitetransmissions experience long delays). Onthe other hand. satellite links might havesuch low operating costs that it becomes moreeconomical to route traffic through thenearest satellite node (even if the number ofcommunication "hops" is thereby increased).
To explore these alternatives. Hawaii's ACTSteam is designing a series of experimentswhich will investigate flow and congestioncontrol in communications networks, routingalgorithms, buffer and network management.and network topologies. Flow and congestioncontrol techniques can be used in terrestrialnetworks to augment the possibility ofdiverting traffic to satellite networks whencongestion occurs or when the data cantolerate satellite transmission delays.Routing algorithms can be designed tomaximize throughputs of network usingterrestrial and satellite links. Buffer andnetwork management will be needed to allocatebuffers in the network nodes to handle"bursty- traffic. Finally, networktopologies can be developed to partitioncommunication architectures into differentnetwork types, as well as to allocatesatellites to appropriate partitions withinthese networks.
The Maui Research and Technology Center(MRTC) was recently awarded a $19.5 milliongrant to establish a supercomputer ImageInformation Center on Maui. In addition, theHawaii State Legislature has appropriated$549.000 to establish a supercomputer-compatible ground station on Oahu. Togetherwith microwave and fiber-optic links betweenMaui and Oahu, these facilities will enablethe State to test and validate hybridsatellite/terrestrial networking. It willalso position Hawaii to make a significantcontribution to networking supercomputertestbeds through the National Research andEducation Network (NREN) -- a major emphasisof the President's Initiative Program on HighPerformance Computing and Communications.
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8.2 EARTH OBSERVATION SYSTEMS
Unprecedented volumes of remote sensing andin situ data will be collected over the next25 years to help scientists unravel thesystem attributes of Earth. This willrequire state-of-the-art advances in avariety of areas, including informationextraction, data and information management.mass storage, high performance computing, andtelecommunications applications. Datasystems for earth system science are expectedto acquire data at the rate of terabits peryear over this period and will involvecommunications and collaboration amongthousands of investigators world wide. Tosupport this effort. Hawaii's ACTS team willactively pursue new and better systems forsatellite instrumentation, space-basedcommunications, and information management.
8.2.1 ATMOSPHERIC RADIATION MEASUREMENTSUSING ACTS
The U.S. Department of Energy's AtmosphericRadiation Measurement (ARM) Program is a keycomponent of the DOE's global climate changeresearch activities. The central purpose ofARM is to improve the predictive capabilitiesof General Circulation Models (GCMs) forregional and long-term climate change inresponse to increasing atmosphericconcentrations of greenhouse gases.Specifically, ARM will enhance ourunderstanding of important cloud andradiative processes, ultimately providing fornear real-time processing of data andexecution of atmospheric models.
A fundamental objective of ARM is toestablish four to six permanent observationalbase sites, with the first site located inthe center of the continental United States.The second site will be situated in thePacific near the equator. This latter site(scheduled for completion by the fall of1993) will undoubtedly pose some severecommunication problems for ARM. sine largevolumes of information (between 1 and 2Gigabytes cf data) will need to betransferred daily to the Experimental ControlCenter (ECC) at the Pacific NorthwestLaboratory in Richmond. Washington.
Argonne National Laboratory (ANL) has been aprincipal participant in DOE's ARM programfrom its early stages. ANL has also beenworking closely with key institutions inHawaii for nearly three years. including theUniversity of Hawaii. the East-West Center.and PICHTR. The joint ANL-Hawaii teamproposes to use the Pacific ARM site to testthe high data rate capabilities of ACTS inthe region (even using the wide bandwidthavailable through ACTS, however, it isexpected that collected data will be storedand broadcast in daily bursts, with a totaltransmission time of about one hour per day).This testing will include transmission fromthe Pacific site to the ECC, located at thePacific Northwest Laboratory in Richmond.Washington; from the ECC to the CentralArchive at Oak Ridge National Laboratory: andfrom several non-ARM cooperative experimentsites to the ECC.
If ACTS remains functional throughout thelife of the Pacific site (currently scheduledto operate for five years). the satellitewould be used daily to transmit all ARM datafrom this location. If the Pacific ARM/ACTStest proves successful. it may also bepossible to develop another experiment basedupon the mobile observing system planned forthe ARM program. In all. this dynamicresearch opportunity will (1) test ACTS'unique communications capabilities: (2)
integrate the ACTS network with environmentalstudies instrumental to DOE's researchactivities: (3) demonstrate the value ofHawail's potential contributions to ournation's High Performance Computing andCommunications Initiative: and (4) enhancethe potential of future internationalconnections with other high performancenetworks by using Hawaii as a vitalcommunications bridge to the Pacific.
8.2.2 DEVELOPMENT OF AN OCEAN ROBOT SERVICECENTER (ORSC)
Over two-thirds of Earth's surface is coveredby water. As such. the ocean plays acritical role in the development of Earth'sweather patterns and affects virtually allecological systems. Furthermore, theunderlying sea floor and subsurface containvast and largely untapped sources of energyand mineral resources. Yet the ocean'sbottom remains a relatively hostileenvironment for human exploration.
A technology that would afford humans safeaccess to the oceanic environment involvesthe use of a robot designed for underseaapplications. This device (known as a RemoteOperated Vehicle, or ROV) could be semi-autonomous to the extent that it remainstethered to a "mother" vehicle while beingelectronically controlled through a remotehuman/computer interface. Several ROVsystems currently exist or are underdevelopment.
The goal of the Hawaii ACTS team is todevelop an Ocean Robot Service Center (ORSC)which would utilize ACTS to relay data fromthe ROV to analysts at a remote location.This project, which would receive supportthrough an NSF-funded project at FICHTR andthe Uni,,ersity of Hawaii. is being developedaround an acoustic communication and sensorfusion simulation environment. where thecomputer can perform machine learning duringthe ROY teleoperational mode so that dockingfunctions can subsequently be performedautomatically during an AUV (autonomousunderwater vehicle) phase.
8.2.3 PACIFIC OCEAN INITIATIVE (POI)
PacSpace is establishing POI to provide aunique technical, organizational, andresearch structure to help meet specificchallenges of the U.S. Global Change ResearchProgram in the Pacific region. Thisinitiative explicitly recognizes the growinginterest in small satellites for remotesensing of the Pacific Ocean environment, aswell as the growing need for rapidacquisition. processing and distribution ofPacific Ocean data. The PacSpace OceanInitiative includes a broad spectrum ofactivities involving information transfer and
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data management to support Global Changeresearch. Specific examples include:
(1) Transfer of real-time. arch:'val data
from small satellites with earth-viewing
missions. Data from small satelliteprograms such as DOE's ARMSAT. the
commercial SEAWIFS program. andPathfinder programs for NASA's Earth
Observing System (EOS) are beingconsidered in this initiative.
(2) Development of local area coverage (LAC)
high-bandwidth data handlingmethodologies for such programs as
Landsat. ERS-1. and eventually EOS.
This activity also includes the
development of interfaces to NASA's EOS
Data Information System (EOSDIS).
General education applications such as
interactive displays of environmentalinformation for students in grades K-12.
This initiative would incorporateinteractive TV with local area fiber-
optic networks. ACTS' high-bandwidthcapabilities would be used to provide
links to the U.S. Mainland.
(4) Assessment of the potential use of data
from Earth-viewing satellites forshipping. sport fishing and other ocean-
based industries in Hawaii.
8.3 REMOTE INFORMATION SERVICES
ACTS' high-speed. high-bandwidthcommunications channels will facilitate awhole new class of remote information
services. Hawaii ACTS team members plan touse this innovative technology to develop and
propagate advanced applications in such areas
as telework/teleconsulting (using multimedia
and computer-supported collaborative work).
simulation and data visualization (using
remote supercomputing resources). andteleoperatiuns/telescience (using virtualperception and multimedia feedback).
(3)
8.3.1 HIGH PERFORMANCE COMPUTING ANDCOMMUNICATIONS
While conducting its experiment programs.PacSpace will have access to some of theworld's most powerful computation resources.Using ACTS. Caltech is planning to link itsTouchstone Delta System (-30 Gflops. andcurrently the world's most powerfulcomputer), as well as the CASA Gigabitnetwork testbed, with Hawaii's supercomputerfacility on Maui (providing access tosupercomputer resources at Los AlamosNational Laboratory. the San Diego SuperComputer Center, and JPL). MRTC will also beable to interface with other supercomputingstations nationwide, including ArgonneNational Laboratory's Intel Touchstone (-500MFlops). The combination of widely-dispersedsupercomputing resources. high-speedsatellite communications, and Gigabitcomputer network linkages will ultimatelycreate a natural testbed for researching anddeveloping technologies required for advancednational communications networks, especiallythe NREN.
8.4 IMAGE PROCESSING AND MANAGEMENT
Technological advances such as ACTS, whichdramatically enhance bit-rates and bandwidth.will inevitably place increasing demands on avariety of communications subsystems. Forexample, the transmission of image sequencessuch as video remote sensing data fromsatellites and reconnaissance aircraftalready requires such advanced communicationtechniques as data compression, featureextraction, object recognition, model-basedscene analysis, image understanding, dataarchiving, and overall image/data management.One promising area in which these advancedtechniques can be effectively integrated withACTS technologies is the field of medicalimaging.
8.4.1 REMOTE AND COOPERATIVE MEDICAL IMAGING
The use of medical imagery is expected toexpand dramatically with the development ofhigher definition imagers. displays, andintelligent multimedia technologies that areinterfaced with high performance computers.The combination of imagery with text. patientinformation, and doctor's diagnosticannotations will become useful electronicpatient records that will enable and enhanceremote access, on-line processing, andcooperative diagnoses among various medicalexperts at geographically disparate sites.
A Hawaii-based team (comprised of theUniversity of Hawaii. PICHTR. TriplerHospital, the MRTC. and PacSpace) has beenworking to develop the medical imaging systemtechnologies and infrastructure required foran advanced health care system. One of thesites proposed for this program is theTripler Army Hospital in Honolulu. which isscheduled to become a center of excellence asa Medical Diagnostic Imaging System (MDIS)teleradiation hub (it already serves as acenter for military operations in the Pacificregion).
The long-term goal of Hawaii's medicalimagery experiment will be to establish thetechnical feasibility and economic viabilityof satellite-based communications for medicalimagery. Hawaii's geographical separationfrom other medical resources on the U.S.Mainland, along with its potential forproviding medical services to other regionsin the Pacific. makes it an ideal test sitefor this type of investigation. Specificobjectives for this experiment will include(but not be limited to): (1) demonstratingthe feasibility of using ACTS for remotemedical visualization; (2) ascertaining theability of ACTS technology to facilitate theparticipation of remotely-situated experts incritical medical situations; (3) developingnew techniques for real-time, user-steeredsegmentation (allowing remote experts to moreprecisely investigate structural damagefollowing natural disasters); and (4)introducing and testing emerging sensortechnologies in trauma aid to disaster sites(with significant implications for maximizingsurvivability for vascular damage and headtrauma).
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In summary. NASA's ACTS Experiments Programand PacSpace/Hawaii experiments initiativeare founded on the belief that a cooperativealliance of academia, government. andindustry will foster a scientifically soundand commercially viable approach tovalidating ACTS technologies and that thisunique pooling of resources, in combinationwith Hawaii's strategic mid-Pacific location.will afford the ACTS network a unique testbedfor pioneering innovative applications inadvanced communications. We therefore wouldwelcome the interest and inquiries ofpotential investigators who would like toconsider PacSpace/Hawaii as a potentialpartner in developing experimental ACTS-tivities.
9. REFERENCES
1. Harris. E.. Payne Webber Money Notes. May1990
2. Commission on European Communities."Telecommunications in Europe." 1988.
3. Olmstead. D. and Schertler. R.. "AdvancedCommunications Technology Satellite (ACTS)."AIAA 13th International CommunicationsSatellite System Conference. Los Anageles.CA. 1990. pp. 522-528.
4. Graebner. J., and Cashman, W.. "ACTSltibeam Communications Package: Technologyfor the 1990's," AIAA 13th InternationalCommunications Satellite System Conference.Los Anageles. CA, 1990, pp. 497-507.
5. Campanella. S.J.. Pontano. B.. andChitre. D.M. "A User's Perspective of ACTSHopping Beam TDMA System." AIAA 13thInternational Communications Satellite SystemConference. Los Anageles. CA. 1990. pp. 484-489.
For the 1993 Pacific Telecommunications ConferenceDatabase Of The World: Converging Technologies
Winston R. Hindle, Jr.Digital Equipment Corporation
Massachusetts, USA
This presentation is a high level overview of the socioeconomic impact of theconvergence of the information technology and telecommunications in our society today
with unlimited potential for the future. Examples are drawn from Health Care.Business, Education, Environment and Space Exploration.
1. CONVENTIONAL MAP OF HAWAIIAN ISLANDS:(FAMILIAR LITTLE DOTS OFLAND -- FLAT, UNIFORMLY BLUE PACIFIC)
We all recognize this view - the Hawaiian Islands.Ages ago, people had to get familiar with theislands themselves. They built roads and highwaysto get around on the surface. They navigatedbetween the islands. They even explored far andwide across the uncharted Pacific. Theyestablished transportation networks.
Many of us here today, of course, arrived at PTCby plane instead of by sea, but we basically usedthe same transportation network that was pioneeredby our predecessors. Now... just imagine how muchmore of the same territory we could explore ifthat huge stretch of ocean could be made ...transparent.
2. TOPOGRAPHICAL MAP - THE PACIFIC BASIN LOOKSQUITE DIFFERENT: (EVERY FEATURE OF THE OCEANFLOOR IS DETAILED... PLAINS, VALLEYS, ANDGORGES CAN BE SEEN THROUGHOUTTHE PACIFIC BASIN)
Once we make this vast body of water transparent,we can see very graphically that these isolatedparts of the surface, which we call "islands", arepart of the same continuous expanse of land. Theconfiguration of the ocean's vast floors becomesas familiar, as navigable, as rich in resourcesand possibilities as the land surface that we'reused to. The more we could explore it, the moreinformation. resources, and capabilities we couldgain.
And that is the point of my illustration.Increasingly today, islands of information havebecome connected by networks of communication.The convergence of Information Technology andTelecommunications has already given us atransparent ocean. a continentally unified planetfor the full, free exchange of informationanywhere.
Converging technologies have given our societiesthe power to explore their resources as neverbefore. In fact, his image of the ocean floorsurrounding Hawaii was literally produced byconverging technologies. It was made usingGeographic Information System (GIS) softwarecalled EarthVision from Dynamic Graphics, whichruns on Digital VAX, Ultrix, or Alpha AXP
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workstations. GIS implementations like this havewide environmental uses in such markets as naturalresources management, infrastructure andtransportation, and a variety of modeling andmapping functions. These are important togovernment and industry worldwide.
3. GIS-TYPE TERRAIN MODELING:(UNUSUAL ANGLE ON THE HAWAIIAN ISLANDS ASSEEN FROM UNDERSEA)
Here is an illustration that makes another pointabout converging technologies. By showing anentirely different depiction of the Hawaiianislands. It was also produced on the EarthVisionproduct from Dynamic Graphics. Technology makesit possible today to construct visualizations fromviewpoints that can't be experienced by realpeople in real time and space.
The convergence of Telecom and IT gives us theability to create and transmit complex,data-intensive imaging such as the pictures I havebeen showing you. We also use it in a widevariety of applications, such as the GISimplementations I have mentioned in order toexplore our surroundings and optimize our use ofresources.
4. CONVERGING TECHNOLOGIES:TELECOM & IT
GIS is one example among many others, of ourtheme. Telecom and IT are a perfect match ofcomplementary technologies. Both of thesetechnologies are rapidly expanding. ProfessorMichael Dertouzos, who is director of theLaboratory for Computer Science at MassachusettsInstitute of Technology, has estimated that...
"computing and communicating tools have beenimproving at the annual rate of some 25 per centfor at least the past two decades."
Of course, there are many different ways tocalculate such a general measurement. But it'strue that if we take the speed of communications20 years ago, when telephone wiring capacitygenerally was around 10.000 bits of informationper second ... and compare it to today'sfibre-optic capacity of approximately 1 billionbits per second -- we get a factor which is wellabove professor Dertouzos' estimate an annualgrowth rate of 78%! And we would find a similar
ratio in comparing the cost of informationprocessing 20 years ago. I might have spent over1 million US dollars for a mainframe having lesscomputing power than a desktop device today. A
computer would cost only about $2,000 US dollarstoday!.
Today, complementary technologies are a part ofthe infrastructure of all industrial development;in the developing economies as well as thedeveloped economies. Converging technologiesenable us to offer new, improved services thathave become essential to the world's peoples.They open up substantial business opportunities inmany worldwide industries, including finance,manufacturing, health care, education, andenvironmental management. But what has all thisreally meant in terms of people's everyday lives,today? What is the impact of convergingtechnologies on people themselves, and the qualityof life?
5. SAVING LIVES (HEALTH CARE)
We are already seeing very striking examples. One
of the most significant that I've seen is calledMBS, or Media Broadband Service, from NYNEX. MBSis an intelligent-network-based visualcommunications capability that allowscollaborators who are located in geographicallydispersed areas to share high resolution images.
The most dramatic application of MBS could savemany lives. Currently, it is running on systemsfrom Digital at two hospitals in Boston, part of amulti-hospital test site where MBS is being usedexperimentally. MBS allows doctors to exchangenot only medical images, but voice and text aswell. And it gives them access to fullinformation contained in a patient database. MBS
will allow smaller hospitals to share theresources of larger ones ... allow doctors toaccess critical medical information from remotesites ... and support critical opinion-sharing anddecision-making among medical personnel, no matterwhere they may be located.
I believe MBS will prove to be especiallyimportant in the Asian Pacific, with its widelydispersed geography and resources. Incidentally,
there will be a presentation and a video about MBSright here at PTC '93, given by Mr. Cas Skrzypczakon Tuesday morning. In the future, I believe wewill see MBS and many other medical applicationsused to link the healing skills of physiciansaround the globe.
6. WORKING PRODUCTIVELY
Next, I'd like to speak about convergingtechnologies' impact on the world of business. Aswe know, the world marketplace is changingdynamically. Globalization and decentralizationare major organizational trends in manyindustries. Working relationships themselves arechanging, and this is where our convergingtechnologies are playing a big part in supportingour customers' new business needs.
Most visibly, the proliferation of wirelesscommunications, supporting mobile voice and datanetworks, has meant that field workers in manyindustries can not only exchange messeges, but
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also retrieve and process information fromdatabases anywhere. Manufacturers and insurers;transportation companies and automobile rentalagencies: and field workers ranging from emergencyrepair crews to journalists benefit from this net.generation of mobile systems.
Such major insurers as the Prudential Company ofAmerica are among leading US users who are alreadyrelying on wireless communications to streamlinetheir field employees' tasks. The impact ofwireless communications is recognized as socritical to automobile rental agencies, that theywill soon be offering mobile telephone facilitiesin most rental vehicles.
All this has contributed to another visible trend,the decentralized office, with people doing theirwork easily and efficiently from remote sites, asneeded. "The wireless office," we might call it.Trials of "wireless office" systems are under wayin major US companies today, including AT&T andHallmark Cards, among others. Because this entirenew business within Telecom requires new forms ofIT support... Many suppliers are bringing a newgeneration of wireless office products to market.
One product, "The Virtual Office," represents acooperative development of several partners,including Nippon Electronic Corporation (NEC),Digital, and SKYTEL, a US paging company. TheVirtual Office is currently being tested byleading customers in the US, including Xerox, MCI,and PACTEL. Using the Virtual Office, any personanywhere has office tools at their fingertipsincluding E-mail, bulletin board, voice mail, fax,paging, and other essential services. With theVirtual Office, mobile workers in certain jobs cangain from 15 to 100 per cent in productivity.
The Virtual Office is one among many examples ofhow Information Technology suppliers workcooperatively with telecommunications vendorsworldwide in order to deliver total solutions.For example. we are currently working withEricsson, a leading supplier of mobile networks,switches, and other mobile data communicationproducts, to integrate Ericsson's Mobitex radionetworks with Digital IT networks. The Mobitexintelligent network technology is based on an openarchitecture standard and is widely operationaltoday in a number of countries in Europe and NorthAmerica.
We are also working with service providers. Thispast year, we teamed up with RAM Mobile Data andBellSouth Enterprises to develop mobile datasolutions worldwide. RAM's Mobitex network isoperational in Europe and North America. A trialin Digital's services organization is currently inprogress, using Mobitex in a dispatch serviceapplication. The operator is CANTEL, a majorCanadian wireless operator.
Another important wireless application that isbeing discussed here at PTC '93 is Digital'sG*STAR. a product which enables wireless serviceproviders to improve customer service quality byproviding automated, structured trouble callreporting and management functions. Apresentation of the G*STAR product will be givenat PTC '93 by Mr. Chandan Seernani on Mondaymorning.
7. WORKING COOPERATIVELY
I've mentioned cooperation repeatedly in theseexamples. It's a theme I want to emphasize. On
many fronts around the world today, workingrelations between companies are changing. We see
partnerships, alliances, and other collaborativeventures between Telecom Service Providers, ITsuppliers, and equipment manufacturers.
Certainly in the case of our convergingtechnologies, IT and Telecom; we at Digitalbelieve that cooperation is the fundamental key tosuccess in our growing markets and success inmaking a positive, long-lasting impact on ourglobal society. As an example, let me mention avery challenging project that Digital took partin, for a leading client here in the Pacificregion. Recently the Nomura Research Institute(NB') needed to build a global network to supporta wide range of functions.
NRI's Global Network System had to support notjust messaging: not just traditional transactionprocessing; but real-time trading andrisk-management functions for such NRIinstitutions as the Nomura Group, which is thelargest financial organization in the world.Building NRI's Global Network System meantconforming to international standards, andintegrating the efforts of different IT andTelecom companies. As a result, the network was ajoint effort of a number of world-class IT andTelecom providers, including Digital. Instead of
seeing ourselves as competitors, all of us workedtogether and got the job done. Today, as a result
of this cooperative effort, virtually all NRIusers benefit from NRI's Global Network System,using the network for functions which range fromsecurities bonds trading to system research.
8. LEARNING GLOBALLY (EDUCATION)
Let me turn next to the world of education. Here,
converging technologies have had a clear and
obvious positive social impact. I can cite
examples of long distance learning programs thatare operating today in different parts of the
world.
There's a project in the Canadian province ofOntario. linking 3 schools that are 50 to 100kilometers apart (30 to 60 miles apart). They can
share writing, math, and history activities aswell as computing and environmental projects. A
system like this increases the number of availablelearning opportunities, offers a richereducational experience and reduces the isolationof teachers in geographically dispersed areas.
Global networking is also transforminginstitutions of higher learning; extending theuniversity beyond all traditional boundarieseven those of nations, continents, and cultures.For example. academic libraries increasingly playthe part of a "knowledge center" serving as thehub of a widespread information system in whichthe srhnlar can search not only the holdings ofthe immediate library but catalogs; statewide.regionally. nationally - even across the Pacific
Let me mention a project that has been takingplace at Sonoma State College in California.
Using the software developed at Sonoma State. anyuser accessing the Internet on a Digital Equipmentsystem can browse through hundreds of librarycatalogs from 36 states and a number of countriesworldwide with transparent ease of use.
In addition to these on-line card catalogs otherlibrary systems are being developed that offerkeyword searching and database access.Implementations like these open the way for thenetwork to become an increasingly rich informationretrieval utility with the eventual goal ofdelivering full text and image, exactly asoriginally published, to users anywhere on thesystem.
An example of this capability is a large-scalecommercial electronic library of image data whichhas been in use for several years, in Japan. It's
called the Electronic Library and it was developedby an alliance including the Electronic Library,Digital Japan, and Toshiba. Hundreds of businessand government subscribers today receive over2,000 articles daily from the Electronic Library.Users can also order any particular item from anarchive containing more thao a million articles.Within 3 minutes, the subscriber receives theexact image of the original article on r faxmachine, complete with all photos and graphics.With services like the Electronic Library, today'sconverging technologies are helping librariesaccomplish their historical purpose: convertinginformation into productive knowledge.
9. PROTECTING THE ENVIRONMENT
Finally, let us consider technology in support ofenvironmental issues. I think we would all agreethat an important area of social impact today isthe global environment. Here too, I am glad tosay that our converging technologies are beingharnessed in positive and far-reachingapplications that bring hope for the future.
For example, one of today's critical issues is togain fell understanding of the consequences ofenvironmental problems such as the "greenhouse"effect, ozone depletion, deforestation, and adiminishing water supply. And yet, in order toreach this goal, earth scientists need datastorage that are 3 to 4 times larger than what iscurrently available. They also require massiveinformation access capabilities and they require ameans of collaboration among scientists who areworking at remote sites.
Today, a project known as Sequoia 2000 aiws tocreat2 the solution; linking together globalchange researchers and computer scientists on 6campuses of the University of California, andother institutions. Sequoia 2000 proposes tobuild a huge information storage and retrievalsystem that can hold the equivalent of 150.000hard disks, and develop methods for rapid dataretrieval. The project is a model of cooperation,bringing earth scientists, who have informationstorage and management needs together withinformation scientists, who are building thetechnology to make it happen.
Let me briefly mention another example of asignificant implementation that is making animportant contribution to environmental
protection. As you know, air pollution is anenvironmental problem of worldwide proportions.Today, however, an advanced air quality modelingsystem, called GEMS (Geographic EnvironmentalModeling System) provides a way to evaluatedifferent options for environmental control. It
has been developed at Carnegie Mellon Universityin the United States. Because GEMS involves verylarge, distributed databases, it is a very goodillustration of how harnessing convergingtechnologies is necessary for success. GEMScurrently focuses on air pollution, but it is easyto foresee that many of its aspects will beapplicable to other environmental problems thatconfront us today. Some problems are waterpollution, ground water contamination, hazardouswaste disposal, and climate change.
10. "THE DATABASE OF THE WORLD" HARNESSINGCONVERGING TECHNOLOGIES
In all the areas I've mentioned today, the roleplayed by converging technologies is fundamentaland highly positive. Our two industries,converging with such speed and power, are todaylaying the foundations of a unified, global,intelligent network and giving the world's peoplefuller access to what I might call the "databaseof the world."
How can we continue to harness the convergingpower of our technologies? Let me offer somesimple, basic suggestions. I believe that ourjoint mission is: First, to work togetherbuilding infrastructures. Second, to collaborateon standards. There are promising examples ofboth, taking place today, here in the AsianPacific region.
A far-sighted instance of the first is to be foundin Singapore, which has articulated a vision ofitself as an "Intelligent Island" by the year 2000-- a networked nation destined for economic growthand high productivity ... and a global hub forresearch & development, manufacturing, andtransportation. Singapore's vision is entitled"IT 2000." Its strategic cornerstone, as many ofyou know, is the building of a NationalInformation Infrastructure supporting highbandwidth communication. To quote the words ofSingapore's National Computer Board, IT 2000promises to help turn Singapore into a "highlyefficient switching center for goods, services,capital, information, and people."
Singapore's IT 2000 vision is central to anational economic strategy for business, services,and transportation development. Its high-capacityinfrastructure will be the foundation for suchadded value as advanced business functionality,extended distance learning capabilities, and anintegrated airport information network - a "smart"airport. IT 2000 is a forward-looking plan whichactively embraces the full potential of multimediaand promises to facilitate the growth andeffectiveness of a wide range of industries.Digital has been involved.as an advisor toSingapore's National Computer Board on thearchitecture that is essential to the projectedinformation infrastructure. We are also involvedwith the Telecom service providers in consultingon IT2000's planned multimedia capabilities.
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I also mentioned the vital importance ofcollaborating on standards. An example of thistook place recently when Nippon Telegraph andTelephone (NTT) formed a consortium to work outthe technical standards for a procurementspecification for general purpose computing. The
development consortium consisted of NTT, NEC,Fujitsu, IBM Japan, Hitachi, and Digital. By
using a consortium, NTT achieved vendor agreementon the requirements, and participating vendorswere able to influence the results. In the samespirit, the next-phase consortium will includeadditional vendors and users. With the adoptionof this procurement specification by NTT, Digitaland its collaborators took a major step towardsglobal standardization.
As I reach the conclusion of this talk, let me sumup my support for the general theme of thissymposium. By harnessing converging technologies,the world's peoples will at last gain full accessto what I have called... the "database of theworld" - optimizing the world's rich resources forpresent and future generations.
11. DISCOVERY(DRAMATIC PICTURE OF EARTH, SEEN FROMSATELLITE)
So far, I've considered converging technologies asglobally based ... which they certainly are. Yetit's very dramatic to realize that our vision isnot even limited to earthbound communications.Today, communications encircle the earth ...tomorrow, they will span the universe. Think oftoday's complex automated space missions.
In the past year, IT and Telecommunications havesuccessfully sent an unmanned mission which willsend us information about Pluto, the virtuallyunknown outermost planet of our solar system aswell as a mission to explore the nearest planet,Mars, in greater detail than ever before. Haven'tthe world's past, present, and future spacemissions ranked among the supreme achievements ofconverging technologies?
After all, this image was transmitted, received,enhanced, and distributed to the Earth'spopulation thanks to Information Technology andTelecommunications. If it were not for convergingtechnologies, we would never be able tocontemplate and study our own planet as it appearsin space.
As we behold it, let me conclude ... with thewords spoken by the Saudi Arabian astronaut SultanSelman al-Saud aboard the Discovery space shuttleseveral years ago, as reported in the press at thetime.
"The first day or so, we all pointed to ourcountries. The third or fourth day, we werepointing to our continents. By the fifth day wewere aware of only one Earth."
Today we have talked about these convergingtechnologies as they apply to our earth. At somefuture PTC conference, we will no doubt be lookingbeyond the earth, and discussing societalapplications pertaining to exploration andcommunication throughout the universe. Whatexciting opportunities lie ahead!
_:_
SUNDAY, January 17, 1993
Plenary
NOTES
MONDAY, January 18, 1993
Monday Plenary
NOTES
Telecommunications Development in Taiwan, ROC
A Study Case for Modernization
by P. Y. LeeDirector General
Directorate General of TelecommunicationsThe Republic of China
1. Introduction
In recent years, the worldwide trendmoves toward political democracy, econo-mic liberalization, and social diver-sification. Consequently, the capabilityof the economy and trade has become oneof the major measurements of a nation'sstrength. The economic achievement inTaiwan, ROC has been widely cited as oneof the "economic miracles" of develop-ment from a poor, heavily agriculturaldependent economy to one of the mostremarkable New Industrial Economies(NIEs) in Asia. DGT; flizectorate Gene-ral of Telecommunications, is a govern-ment owned organization and responsiblefor promoting network construction andoperation as well as introducing satis-factory telecommunications services tothe ROC. It has been playing a strate-gic and vital role in contributingto the dramatic economic growth of theROC. On this special date, I am veryhonored to be here and would liketo take this opportunity to share itsoutstanding experiences with you.
2. Current Status of TheTelecommunications in The ROC
To keep pace with the rapid economicgrowth in our country, the developmentof telecommunications was astonishingduring the past forty years. As of June,1992, several milestones were reachedand the result could be seen from thefollowing statistics:
1) The number of telephone subscribersis over 7 million, ranking 16th in
the world.
2) 97.71% of all families have telephoneservice.
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3) There are 34.5 telephone main linesfor every 100 people.
4) The number of direct internationaltelephone circuits is over 5,600.
5) The International Subscriber Dialing(ISD) service has been available to
197 countries/areas, and the
international outgoing trafficreached 329 million minutes in thefiscal year of 1992.
6) The number of radio pagers is wellover one million, accounting for a21.8% growth rate over the last year.
7) The number of cellular mobile phonesis about 300 thousand, amounting to a117% growth rate over the last year.
8) The local telephone switch has 10.4
million lines, of which 58.7% isdigital.
9) The toll switch has 0.56 millionlines, of which 96.8% is digital. Itis expected that all toll switchlines will be completely digitalizedby the end of 1994.
3. DGT's Experiences in The Developmentof Telecommunications
DGT has encountered many difficul-ties during the past four decades, forexample, the shortages of capital funds,technologies, materials, and skilledworkers, the rapid growth of subscriberapplication, higher trouble complaintrate, etc. However, it has successfullylaunched a variety of dynamic,innovative strategies and efficient mea-sures to overcome the obstacles. Thespecific experiences accumulated by DGTover the past years are briefly stated
as follows:
1) Under the self-supporting policy, DGThas adopted a tariff policy oflevying high installation charge andlow monthly rental on local telephonesubscribers so as to enhance itsfinancial structure. Such revenue hasbeen used for expanding the domestictelecom infrastructure to expeditethe development of local areas.Today, DGT's debt ratio is only14.51% that indicates an evidence forsound and strategic approach.
2) In 1968, 1976, and 1984, DGTintroduced cross-bar electro-magneticswitching, analog ESS, and digitalswitching equipment respectively.These introductions have created manygood opportunities for the develop-ment of local telecom industry andthus encourage the establishment of 2cross-bar manufacturers, 2 analog 1,SSmanufacturers, and 3 digital switch-ing manufacturers in respectivephases. Their products have satisfiedthe urgent demand during the rapidgrowth period that the annual growthrate is over 20% from 1968 to 1981.
3) DGT has spared no efforts in imple-menting a series of the Four-yearMid-term Telecom Development Planssince 1953 to expedite the TelecomModernization Plan and thus achievethe goals of providing modern telecomservices in urban areas, popularizingthe telecom services at countrysideand rural areas, and upgrading thenetwork infrastructure islandwide.The achievements were fruitful informing a sound foundation for thefuture development. At present, theTenth Mid-term Telecom DevelopmentPlan is under way. In addition, tocope with the Six-year NationalDevelopment Plan, DGT has alreadymapped out the consecutive Mid-termTelecom Development Plan to belaunched in the fiscal year of 1994in order to realize the goal of com-pletion of ISDN in 2000.
4) DGT, not only completed the goal ofproviding the telephone service atevery countryside in 1975, but alsoachieved the target of installing thetelephone sets at every village in1980. Since then, the telephoneservice is available throughout,thewhole island in the ROC. Meanwhile,at the villages of remote areas, thelocal telephone switching equipment
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was installed and the old equipmentwas replaced with a view to providethe enhanced services and thus
balance the development of all areas.
5) DGT introduced the International Sub-scriber Dialing (ISD) service in June1978. It has facilitated the localpeople to make overseas calls,increased DGT's revenue, and relievedthe heavy load of the operator -assisted service. Moreover, the CAMA(Central Automatic Message Accounting)system, which was developed by theTelecom Laboratory, one of DGT'ssubordinate organizations, has even-tually provided the C400 cross-bartelephone switching equipment withthe automatic billing mechanism andthus stimulated the tremendous growthof the ISD service.
6) To reduce the subscriber's burden formaking telephone calls, DGT merged280 business basic tariff rate areasinto 16 ones in June, 1990. Mean-while, the measurement of calculatinglocal telephone calls on a five-minute basis has been implemented andthus laid a stable foundation for thedevelopment of the dial-up services.
7) To meet with the economic developmentand the demands from the subscribers,DGT completed the single tone typeradio paging system in 1976,introduced the numeric display typeradio pager in 1988, and opened theChinese character display type radiopaging service in August, 1992. DGTintroduced the cellular mobiletelephone service to the public in1989, and inaugurated the handheldmobile telephone service in July,1990. Since the introduction of themobile telephone service, the annualgrowth rate has been skyrocketing.Besides expanding the radio channelsand installing the additional basestations, DGT is currently accele-rating the plan of digitalization soas to meet the mark 2t needs and pro-vide the firm foundation for openingmore data communication services tothe information society of the ROC.
8) The success or failure of an enter-prise lies greatly on the use of itshuman resources. Every year, DGTspends about US$ 20 million furtraining its 37,000 employees. Eachemployee receives about one week oftraining in a year on the average.Besides on-the-job training, the
employees are also given the careerplanning. The human resource culti-vation will continuously remain asone of the major tasks to DGT.
4. DGT's Restructuring Plan
Under the impacts of globalizationand liberalization, DGT realized that inaddition to accelerating its networkconstruction, the organization structureitself needs to be changed to fit themore competitive environment. In doingthis, the existing Telecom Act and therelevant regulations must be revisedfirst. DGT will be segmented into twoseparate parts. The regulation functionwill remain in DGT as a governmentorganization. On the other hand, thebusiness operations will belong to astate-owned telecom operating companywith more flexibilities and autonomiesin personnel management, procurement of
equipment, budgetary and auditingsystems. The draft proposal includingthe "Laws for Chinese TelecomCorporation", the "Regulation for DGT'sOrganization", and the "Telecom Act" hasbeen submitted to the Legislative Yuanfor approval.
5. The Major Development Plans of DGT
As the telecom industry is gettingmore important for Taiwan to achieve itsgoal of becoming an Asia-Pacificregional financial center, as well as anint'l cargo transport hub, in line withthe Six-year National Development Plan,DGT has launched the IntelligentMulti-dimensional Network DevelopmentPlan which consists of ten majorprojects in 6 categories, namely,digital switching system, optical fibersystem, optical fiber submarine cablesystem, personal communication system,intelligent network and integratedservices digital network. The plan willrequire a total investment of US$ 4.8billion during the period from 1991 to1996.
It is assumed that after thecompletion of the plan, DGT can providehigher efficient mobile communicationsand upgrade the telecom services on theoffshore areas such as Kinmen and Matsuislands and develop high-quality anddiversified telecom services.
6. Conclusion
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The above presentation summarizesthe past forty-year development of the
telecommunications in the ROC. It
provides the valuable experiences for
the developing countries to plan their
telecom strategies when they face thesimilar difficult situation. I sincerelyhope that through the sharing of theseexperiences, the mutual understandingand close relationship between us may
step further.
Thank you for your attention.
Development of Multipoint TeleconferenceSystem Using Multipoint Control Unit (MCU)
Tatsuhide Arakaki, Etsuo Kenmoku,Toyonori Ishida and Masanori Sawai
NEC CorporationTokyo, Japan
1. ABSTRACT
This multipoint teleconference system can be used for teleconferences with motionpictures, documents, VCRs, and audio. The system is comprised of a MultipointControl Unit (MCU), Master Controller (MAST CONT), and multiple conferenceterminals (Visualinks AD series). The multiple conference terminals located inremote locations are connected by video, audio, and data multiplex transmissiondigital lines in a radial network with the MCU and MAST CONT in the center. EachMCU can connect up to 8 locations and can simultaneously handle the multipointteleconferences of two groups that are independent of each other. (The MCU canconnect up to 14 locations using a cascade connection.)This system provides functions that enable all participants at all locations tosee the video of a person speaking. It also provides various modes which allowvideo selection at any location and automatic screen switching to the video ofthe person speaking. Also, audio functions can be selected for simultaneousdiscussions at all participating locations.The multipoint teleconference system is much more effective than conventionalpoint-to-point teleconference systems.
2. INTRODUCTION
The teleconference system market environment hasbeen improving rapidly of late due to changes inuser outlook, down-sizing, price reduction,development of communication networks such asISDN, and recommendation of CCITT standards forvideo CODEC.While teleconference system installations arebecoming widespread, their applications are nolonger limited to conferences only.Teleconference systems are widely used fornumerous purposes such as company education andtraining (for employees) and remote lectures.As a result, there is an increasing demand nowfor systems with various capabilities to copewith diverse applications.To meet such needs, we have developed themultipoint teleconference system which can run(in addition to conventional point-to-pointconferences and broadcasts) an audio-visualteleconference which all participants atmultiple remote locations can join in. Thisdocument introduces the features, configurations, and functional outline of the multipointteleconference system that uses the MultipointControl Unit (MCU).
3. SYSTEM FEATURES
The features of the multipoint teleconferencesystem are summarized below. Table 1 gives themain specifications of the system.
(1) Uses video CODEC complying with CCITT/TTC.(2) Handles a wide range of communication
speeds and various communication lines.
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(3) Makes simple system configuration possibleby its application of the MCU andVisualinks AD series.
(4) Allows wireless remote control of almostall its functions during a conference.
(5) Enables setting and clearing of desiredtype of conference easily from any of theconference rooms.
(6) Enables simultaneous discussions atmultiple locations by the use of an echocanceller system.
(7) Superimposes the menus of operations(required during a conference) on thescreen for smooth handling. The featuretakes the man-machine interface intoconsideration.
(8) Provides various modes, such as selectionof conference room picture to be received,voice activation control, operator, andlocal conference room transmission.These modes allow video reception to beselected according to the type ofapplication during a multipointteleconference.
(9) Provides three camera control methods.These are the manual mode, the automaticmode using voice activation control, andthe preset mode which moves the camera topreset positions.
(10) Allows extra functions such as electronicboard and graphics system to be addedeasily.
4. SYSTEM OVERVIEW
This T-ltipoint teleconference system consistsof a Multipnint Control Unit (MCU), MasterController (MAST CONT), and multiple conferenceterminals (Visualinks AD series). The multipleconference terminals located in remote locationsare connected by 1.5Mbps video, audio, and datamultiplex transmission digital lines in a radialnetwork with the MCU and MAST CONT in the center.The system configuration is shown in Fig. 1.
The configurations of conference terminal andperipheral equipment are shown in Fig. 2.
4.1 MULTIPOINT CONTROL UNIT (MCU)
The MCU performs simultaneous network control(communication line setting, video switching,and audio mixing) of communication lineconnections to multiple remote locations in themultipoint teleconference system which usesvideo, audio, and data.Each MCU can connect up to 8 locations and can
Table 1 MAJOR SPECIFICATIONS
simultaneously handle the multipointteleconferences of two groups that areindependent of each other. Two MCUs cascadedeach other can connect up to 14 locations. TheMCU is shown in photo 1.
4.2 VISUALINKS AD SERIES(TELECONFERENCE TERMINAL)
The Visualinks AD series is a compact, all-in-one type teleconference terminal configurationconsisting mainly of the video CODEC (VL5000)which complies with the recommendation of CCITT/TTC standards; the teleconference controller(TC5000) which is equipped with a high-grademan-machine interface; and the teleconferencetermindl (TV5000). The Visualinks AD series isis shown in photo 2.The video CODEC VLS000 complies with CCITTrecommendations (H.221, H.230, H.242, H.261,H.320) related to picture phone andteleconference. The video CODEC processes videoand audio signals usedfor picture phones and
Item Specifications
Communication interfaceCommunication speedApplicable line
56K to 1.92Mbps (BBZS)o High-speed digital leased circuito INS 64/1500
Audio systemControl systemTransmission band
o Echo canceller system simultaneous two-way)o Broadband (7KHz)
Video CODECInput TV signalResolutionCoding algorithmAudio coding system, speed
Data port
NTSC480 lines x 352 pixels (NTSC)Complies with CCITT H.261 recommendation.o SB-ADPCM (CCITT G722 7KHz)o 64Kbpso MLP interface (RS-232C)o 4.0Kbps or 6.4Kbps
Video systemVideo transmission displayMonitor
Camera
VCR
1 screen transmission/displayo 33-inch monitoro Picture-in-picture display for receiving/sending screenso Camera (Remote control functions using remote controller)(Voice activation control)
o Documents camera (manual)o External camera (manual)
Recording and playback
Control systemVideo switching control duringmultipoint teleconference
Line switching control
Line setting controlConference operation control
o Automatic switching by voice activation controlo Operator controlo Reception selection controlo Local conference room transmission controlo Point-to-point connectiono One-way connection (broadcast)o Multipoint connectionControl using terminalControl using wireless remote controller
BEST C3PY fiVAILABLE 133
(CONFERENCE ROOM 5)
VISUALINIS AD SERIES
(CENTER SITE),--
1.51.115PS DSUI<-3-
I . 511BPS
1.5MBPS DSO< >-
(CONFERENCE ROOM 6)
FIVISUAKS AD SERIES
TERMINAL
(CONFERENCE ROOM 7)
cTS:UALINKS AD SERIES
(CONFERENCE ROOM 8)
(VISUALINIS AD SERIESM=C51,
TERMINAL
I.5MBPS
VF IL.4=0,
VF
VF
VF LINE
7
MCU
pm< 1.5MBPS
1.5MBPS
< >1.5MBPS
1.5MBPS
< 7.
MAST CONT
(CONFERENCE ROOM I)
VISUALINIS AD SERIES
TERMINAL
ETL1
(CONFERENCE ROOM 2)
I VISUALINIS AD SERIES/
TERMINAL
(CONFERENCE ROOM 3)
VISUALINIS AD SERIES'
Era 'ftTERMINAL
(CONFERENCE ROOL 4)
VISUALINIS AD SERIES
TERMINAL
VF LINE
VF LINE
VF LINE
VF LINE
DSU : DIGITAL SERVICE UNIT
11/D : MODULATOR-DEMODULATOR
Fig. 1 SYSTEM CONFIGURATION
TV5000
CONTROLLER
RECEIVER WIRELESS REMOTE
CAMERA
MICROPHONE BOX MICROPHONES
MONITOR &SPEAIERS
AUDIO & VIDEOSNITCHER
(0 P T I ON )
DOCUMENT CAMRA
TIME BASE VIDEO CASSETTECORRECTOR RECORDER
EXTERNAL CAMERA & MICROPHONE
Fig. 2 CONFERENCE TERMINAL CONFIGURATION
134
teleconference systems by compression coding,multiplexes the signals together with variousdata signals, converts the signals into digitalsignals of 56Kbps to 1,920Mbps, and transmitsthese digital signals. The VL5000 is shown inphoto 3.
The teleconference controller TCS000 controlsthe camera, audio, picture-in-picture screen,superimpose functions, field multiplex functionfor two full-screen images, still-picturegraphics transmission function, and voiceactivation control function. In view ofconference operating efficiency, almost allcontrols during a conference can be performedwith a wireless remote controller. The TC5000 isshown in photo4.The teleconference terminal TV5000 consists of aportable structure system rack which holds audioand video input/output devices such as monitor,camera, microphones, speakers, and peripheralequipment.
4.3 MASTER CONTROLLER (MAST CONT)
The master controller controls communications,such as various conference setting informationbetween MCUs, in accordance with the informationspecified at conference terminals installed ineach conference room. It also controls systemoperating statuses and network management.The MAST CONT mainly handles all the procedures
for starting and ending a conference and alsokeeps a record of the system operations.
5. SYSTEM FUNCTIONS
5.1 CONFERENCE MODE
This system has functions for setting andclearing of the desired type of conference,which can be done easily by looking at theterminal (personal computer) screen installed ineach conference room.The types of conferences which can be held usingthis system are the multipoint teleconference(connects conference rooms in up to 8 locations, conventional point-to-point teleconference(connects conference rooms in two locations),and broadcasting (performs simultaneoustransmission from any one conference room tomultiple conference rooms). The system allowshaving different types of conferencessimultaneously within the permissiblecombination range. (When having multipointteleconferences, however, up to two independentgroups can simultaneously hold conferencesusing this system.)The media used for teleconference consist ofaudio and video data which is transmitted andreceived between conference rooms.The available conference modes and the mediaused for each conference mode are summarized inthe table below.
Table 2 CONFERENCE MODE AND MEDIA
Conference mode Video Audio
Point-to-point I Picture of connected remoteteleconference conference room.
Voice of connected remote conferenceroom.
Broadcast Simultaneous transmission of leadingconference room picture to allparticipating conference rooms.
Simultaneous transmission of leadingconference room voice to allparticipating conference rooms.
Multipointteleconference
o Selection mode for conference roomreceptionEach participating conference roomselects the desired picture ofanother conference room takingpart in the conference.
o Voice activation control modeThe picture of the desiredconference room is automaticallyselected from participatingconference rooms using the voiceactivation control function (pointdetection) and transmitted to allconference rooms.
o Operator modeThe conference room acting asleader of conference selects thepicture of the desired conferenceroom and transmits it to allconference rooms.
o Local conference room transmissionmodeTransmits the picture of localconference room to all conferencerooms.
Mixed voices of all participatingconference rooms will be distributedto each conference room. (The voicein the local conference room will beexcluded, however.)
135
5.2 CONFERENCE CONTROL
Almost all operations required for running aconference, including start-up of system powerand various camera controls, can be performedduring the conference using a wireless remotecontroller which is basically same as the onesused for home electrical appliances.
enable participants to .i.oncentrate totally onconference proceedings without having to botherabout conference equipment operations, thissystem offers a number of useful controlfunctions. For example, the preset functionmoves the camera to preset positions simply whena key is pressed on the remote controller. The
camera voice activation control functionautomatically moves the camera to a personspeaking by responding to the person's voiceover the microphone. The system also providesan automatic point switching function whichautomatically switches the screen to the pictureto be received during a multipoint
teleconference when a different person in adifferent conference room starts to speak. The
superimpose function provided clearly displaysthe operation conditions and system status onthe monitor.The main functions of conference operations aregiven in the table below.
Table 3 MAIN FUNCTIONS OF TELECONFERENCE OPERATIONS
Category Function Description
Video system (1) Monitor display screen selection
(2) Picture-in-picture
(3) Superimpose
(4) Transmission picture selection
(5) Reception picture selection(during multipoint teleconference)
Selects the video to be displayed onthe monitor from receiving picture,transmitting picture, VCR, localconference room document, and remoteconference room document.
Displays the transmitting picture onthe receiving picture, using the samemonitor screen.
Displays the remote conference roomname and system status text on themonitor.
Selects one picture from pictures ofmotion picture, documents, VCR, andmoving camera and transmits it to theremote conferencerooms.
Sets either reception selection mode,voice activation control mode, oroperator mode in accordance with thetype of conference to select thepicture to be received.
Audio system (1) Microphone ON/OFF
(2) Volume adjustment
Control system (1) Local conference room cameracontrol
(2) Remote conference room cameracontrol
Enables mute control of localconference room microphones.
Enables volume control of localspeaker units.
In addition to the normal manualoperations, this function automaticallymoves the camera using voice leveldetection to a person who is speaking.
Enables control of a remote conferenceroom camera which is transmitting thepicture.
136
6. CONCLUSION
Facsimiles and personal computers brought greatchanges to the business system. Theteleconference system will revolutionize it.To have more teleconference systems installedand to make them popular, we are working towardreducing the unit prices, creating the optimalsystem which can cope with various applications,and making arrangements to provide networkfunctions such as reservation management.Through such efforts, we hope to develop ateleconference system that will be even moreuser-friendly.
Photo 1 MCU
11
-
TCP- 00000
Photo 2 VISUALINKS AD SERIES (AD100)
7. REFERENCES
(1) Toshiyuki Onaka, et al., "TeleconferenceSystem (VisuaLinks AD series)", NECTechnical Journal (Vol.44, No.6), 1991
(2) Mitsuo Nishiwaki, et al., "Visualink 5000Video CODEC", NEC Technical Journal(Vol.44, No.6), 1991
(3) Toshiyuki Onaka, et al., "MCU (MultipointControl Unit)", NEC Technical Journal(Vol.44, No.6), 1991
137
Photo 3 VL5000
11441440
Photo 4 TC5000
BEST COPY AMIABLE
THE NEW GENERATION OF ISDN APPLICATIONS AND BEYOND
Dale T. Rogers AT&TJerry Nowicki - ESI Systems
ABSTRACT
A great deal of energy has been focused on ISDN
deployment to provide advanced technology solutions for thebusiness environment. The emereence of Global ISDNinterconnectivity coupled with newer technologies such asframe relay. SMDS, and eventually ATM networks, willprovide new applications which will benefit society as awhole. These applications are mainly in the following areas;health care, education, travel and recreation, and enhancedentertainment.
We are witnessing several new emerging applications inCalifornia and elsewhere whose benefits can be extendedthroughout the ISDN equipped countries of the Pacific Rimand the world. Ubiquitous applications are important toPTT's worldwide because it will help them better serve theirmultinational customers as well as allow them to takeadvantage of their investments in ISDN, frame relay. andother wide band technologies. Our effort explores some ofthese applications and addresses the expanding data needs,the principle drivers, and the key elements to successfuldeployment and mass marketing of these techno-applications.
I. INTRODUCTION - DATA IN A CHANGINGWORLD
Today, the world's the socio-economic structures are rapidlychanging and so are the trends in data networking whichprovide the important informational linkages betweenpeoples. In fact there are those who argue that theproliferation of technological advances and deployment ofdata networks is having a direct impact on changing worldevents. Some recent well known examples include events atTianamin Square, the outcome of the Gorbachov coupattempt followed by Yeltsin's rise to power, and the shortduration of the Kuwait-Iraq war. In all three events, the roleof fax. email and other data network services to rapidlycommunicate important information via non-traditionalmeans is now recognized as having had an important impacton the outcome of these events.
Coincidental with the emerging trends in datacommunications is the merging of voice and data networks.and the shifting of data trends from centralized processnetworks toward user-to-user networking. The rapiddispersion of powerful. high speed computing applications
down to the individual's desktop is simultaneously drivingusers toward more data intensive network applicationrequirements. We have observed that advances incomputing, audio, and video technology is driving this rapidtrend toward networking "global data-tization" as shown infigure 1.
1 9 9 1 1 9 9 5
+ + <=> ISDN
11 X.25/FRAME-PELAWSNIDS
111 SWITCHED DIGITAL
0 VOICE-GRADE LINE
PRIVATE-LINE11111
NOTE
THE USE OF PACKET BASED AND SWITCHED DIGITAL SERVICES TO LINK LAN'S WILLGROW. ACCORDING TO THE YANKEE GROUP TYPES OF SERVICES USED FORLAN INTERCONNECTION ESTIMATED IN 1991 AND PROJECTED 1995 BY PERCENTDO NOT TOTAL 100 DUE TO ROUNDING
SOURCE COMMUNICATIONS WEEK 9/14'92
Figure 1Global Data-tization
Today almost 40% of data traffic is carried via low-to-medium speed modems over the traditional analog voicenetwork. Approximately 50% of this traffic and 10% of theprivate network traffic is expected to shift to higher speedcircuit and packet type networks that are publicly accessible.We see this shift occurring over the next five years. Clearly,data networks are changing and the application requirementsfor more bandwidth and integrated voice/data capabilities iscreating increased demand for standardized advancedservices such as ISDN, frame relay. SMDS, and ATM byusers in the major industrialized countries. We believe thatany country wishing to enter the global economy or toremain economically competitive in the 21st century mustmake a commitment to deploy these advancedcommunication networks as infrastructural necessities.
For example. the case of use and economic advantages of a
single integrated ISDN interface to multiple networks(including frame relay. SMDS and ATM) is an importantfactor in ISDN's success globally. In the computing world,
ISDN is beginning to gain favor as an element in meeting thechallenges of cluster-server applications and user-to-usernetwork applications. These applications are principallyfound in the small and medium business markets. However anew trend for telecommuting is emerging which will impactthe need for advanced services at the residence. Many largecorporations are decreasing the size of their payrolls throughoutsourcing work to low cost cottage industries whichtypically work at home.
These rapidly growing market segments are driving thechanging data network market needs which in turn aredriving changes in the role of Information Systems(IS)management. The move away from centralized legacyapplications is shifting IS managers fccus from overseeingprivate data domains toward helping their data users buildmore efficient and dispersed data networks. As a result weare observing more Information Systems focus on: LAN-LAN, LAN-MAN/WAN, multi-media conferencing, fileserver-LAN, and countless other flexible and widelydistributed data needs. Besides data networking, the newrole of the IS manager now includes network managementand integrated voice/data management applications. In suchan environment the IS manager is beginning to recognize thatISDN and other public network services can offer manyimmediate and cost effective solutions that are compatiblefor use with both existing and future advanced networkingtechnologies.
2. CHANGING USER NEEDS
Recent trends indicate that it is not business as usual anymore. Data users have more options and are moreknowledgeable on how to use those options. Additionally.costs are becoming more and more of an issue and purchasedecisions are moving down the scale in terms of yearsrequired before payback. Equipment investments oncecalculated between 3-5 year; arc now required to break evenin 1.5-3 years. The increasingl short payback requirementsare necessary to the success of businesses despite the fact thiuinvestment decisions are often further complicated bylagging tax depreciation laws.
We find that networking trends are just as dynamic ascomputing trends. Voice and data users are beginning tolook beyond commodity transport services towards valueadded networks. They are discovering that value addednetworks are giving them strategic advantages with theirsuppliers and customers. These intelligent networks arecapable of running applications instead of just carrying rawdata and are becoming more cost effective than provisioningexpensive proprietary customer premise equipment on theends of a rigid and static pipe.
What is driving this phenomena? The driving forces comefrom the application requirements of both the strategicplanners in corporations and the departmental user asdepicted in figure 2. Network speed, flexibility and low costare key decision elements for all applications over time.
622
155
Application Performance is Critical Driver
Scientific Computing
100 Medal ImagingCompound Document Processing
45 MultimediaLAN Interworking
16
aa 10
CAD/CAE
Advanced Office Automation0. LAN Interworking
4 File Transfers
Order Processing LAN Interworking1 -
Electronic Moil
0 5 6 Office Automation
1985 1990 1995 2000
Figure 2User Applications Require and Often Demand Higher Bandw idth
139t
Some of the corporate strategic decision elements include:
shifting data networking and frequenc requirementsfrom centralized computing to shared tiles amongstindividual PC or workstation users. and
changing corporate business strategies, re-engineeringcorporate structures to decrease costs, improvecustomer access. and to prepare themselves for a newbusiness em ironment.
Coming from the departmental user perspective, the keyelements include:
departmental managers finding value in personalcomputing (PC) proliferation with the correspondingneed for PC-PC inlet: onnection not necessarily in thesame physical or geographic location, and
proliferation of workstations, LAN's and associatedinterconnect devices such as bridges, routers andbrouters.
Probably the single most important factor in data networkingis the dramatic increase in low cost bridges, routers, andinverse multiplexers with ISDN interfaces and other publicnetwork services that can easily link the thousands ofexisting LAN's in todays corporate world.
MAINFRAME
0
7-'2=
0
tHOST CENTERED
MINICOMPUTER
DISTRIBUTEDPROCESSING
3. CHANGING DATA NETWORKINGENVIRONMENT
The changing data networking environment of today has itsroots in the evolution of computer processing (see figure 3).As such, historically most businesses developed embeddedlegacy systems centered around main frame computingsystems. These horizontal systems dictated how usersoperated and were not usually interdependent. As computingadvanced toward more vertical infrastructures new datatrends emerged where users needed access to multiplesystems. Today file servers have emerged to help fill thisgrowing need by individuals to download and processindividual requests. Todays advanced business environmentrequires virtually instantaneous and unplanned individual adhoc information queries and processing to meet rapidlychanging business needs.
MAINFRAME orSUPERSERVER
NETWORKCOMPUTING
(aka CLIENT-SERVER)
COMPUTING TRENDS
Figure 3Changing Data Networking Environment
140
100
ED VOCEMI DATA
40
0
970 980
YEARS1990
1970's: 10% User DollarsSpent on Data
1980's: 20% User DollarsSpent on Data
1990. 40% and More Spenton Data
Data, Image, and Video areStrategy:, Drivers CAGR25to3%
SOURCE Internorioro. Development
Figure 4Strategic Drivers Shifting Toward Data Intensive Applications
This requirement for instantaneous information that oftenresides on widely dispersed PC's or microcomputers isspurring the growth of data networking. Data intensiveapplications requiring resource sharing are nowaccomplished by drawing upon all information resourcesavailable both within and outside an organization. This trendtoward data intensive applications is apparent when trackingpercent of user dollars spent on data and voice between1970-1990 as shown in figure 4. By the year 1995 we expectthat the funds spend on data communication will surpasstraditional voice communications.
The merging of information systems and networking presentsa challenge to both IS and telecommunication managers to
effectively respond and to coalesce their functions so that thebest of both worlds can be effectiveiy achieved. We seesuccessful organizations carefully blending the best privateand public network offerings to craft hybrid solutions thatprovide the productivity and flexibility needed for futureinformation networks.
The challenge that faces the telecommunication industry isthe provisioning of value added networks to support the costeffective transfer of integrated voice, data, and imagingapplications. The "need for speed" is a key driver. Users areseeking new applications that offer standardized, low cost.and widely available public networking solutions to meettheir strategic business needs (see figure 51.
IMAGEINFORMATION
CONTENT
TRANSMIT TIMEOrdinary+
Phone LineOne ISDN13-Channel
24 ISDNB-Channels t
Digitized Photo 1 Megabit 1.7 min 15.6 sec 0.7 sec
CAD/CAM 2 Megabits 3.4 min 31.2 sec 1.4 sec
CT Scan 5.2 Megabits 9 min 1.4 min 3 3 sec_ .
8 secX ray 12 Megabits 21 min 3 min
Figme 5The Need For Speed = ISDN Data And Reond
141
* of one II 1,,e+ rrNedco, cOnsuloi.:^. ^
mopes
+ POGO baud mode"
Source. Ascend Communications 7042'92
TOKYONTT 'INS 64
Netwcy,k
MAC L 1
MAC
MAC
ISDN
TA
AppletalkRouter
PnoneNet
=1 Connector
MACAppletalkRouter
TA 01,ISDN
France TelecomNetwork
3
SOS SC./J
TranswareAppletalk TA
Router I
SAN FRANCISCO
AppletalkRouter
DataUnit
MAC
INEN1.-17Jr-
ISDN
MACWORLD Magazine
Figure 6New Generation Example: ISDN On-Line Journal Customer Application
The realization of on-line journals (figure 6), and other newtypes of data transfer, data sharing, and imaging industries isonly possible on a cost effective basis by the continueddeployment of ISDN both on the local and global levelpublic networks today. These industries can then continue todevelop and flourish followed by expansion of bandwidthinto SMDS/ATM frameworks as they become available inthe future.
4. NEW CHALLENGES
Many new data networking challenges on the horizon willinvolve some sort of client-server computing applications.Such applications tend to be more distributed, demandstandard application programmirvi interfaces and usuallyshare data on servers. Faster and more powerful desktopdes ices will require faster and widely accessible datanetworks which can effectively handle many varieties ofimage. audio, video and live animation in a low cost mannerfor use by the general public. This is an important point toremember since the large corporations of the past arcoutsourcing some of their work out to smaller business unitsand individuals who generally depend upon the publicnetwork for their telecommunication needs.
142
AppletalkRouter
ISDN can play an important role in meeting these growinguser needs and the telecommunication providers who cansupply these user needs will reap the monetary benefits ofthis growing market segment. Additionally, as certain userapplications require more and more bandwidth, ISDN willplay an important low cost access or bridging function tovarious higher speed private and public networks that willevolve in the future. Despite all the press regardingwidespread future ATM deployment the fact remains thatmost of these higher speed networks will probably bedirectly accessible by the general public on a very limitedbasis and in only selected metropolitan areas. Publiclyaccessed ISDN BRI and PRI CCITT standardized interfaceswill provide users cost effective access to these higher speedbackbone networks and the applications will run at fargreater data speeds and with higher quality than possible withcurrently available modem type technology.
One U.S. local exchange carrier has been trialing such an
application with a major university with excellent results (seefigure 7). A similar "next generation" ISDN applicationscenario may also be tested with ISDN and SMDS. The
actual data throughput speeds exceed those of LAN's since
there is no contention for service. Data throughput on a
simple BRI-D channel usually exceeded that of a 10MhzLAN for this simple reason. The idea of linking all parts ofthe widely distributed campus and off campus residences to
the campus frame relay backbone network is very exciting to
the customer. They will be able to provide virtually all
university personnel IA ith high speed ISDN BRI or PRI
interfaces to access any university computer system for a cost
of as little as S30.00 U.S per month s is the public network.
The university could not provide this t pe of. service anyother way since the cost of extending prkatc LAN, WANnetwork infrastructures is co,i prohibitive. Additionally.users will be able to access the um% ersities powerful
computer systems from any ISDN connection v,orkhk ide.
ISDN ISDN
FRAME RELAYNETWORK
CIRCUIT SWITCHEDNETWORK
CPE PerformsFrame RelayEncapsulation
414T ISDN0
S1
Frame Relay4BSD
Router
CAMPUS NETWORK
Figure 7NEXT Generation Example:
University Campus Network ISDN-Frame Rela LAN Intw.onnecuon
143
\ nother next Lleneration appli,ation ,Id,lresses the challenges
of accessing %.% idol> distributed data base s\ steins ol N.ar
Is pc.. Ill this case Pacific Bell sales :emits ale accessingarious Ise) data bases \\ IT Aim it to sere its customer
base k ith the highest (wain) standards. This configuration is
facilitated b a Norm are s\ stem designed hs ISI Ss stein,
\khich incorporates numerous BR'. and PRI public andprk ate networfs interfaces to the various data bases as
displayed in figure 8.
aUVIESSPRCS+..E
SALESOFFICE
,;SER
This system is no% on line and represents a nem. and N.ery
cost eflect iR e approach to autorthit Mg their sales oflice
functions throughout California. This is an important step
Ioaard Pacilic Bell's ability to UNC new technolog to
mediate cost effective athanced technology solutions for
their customers. Instant access to national business profile
data bases as well as separate access to their own customer
billing. ordering and provisioning data sources allow the
Pacific Bell sales teams to call on critical information andresources to better serve their customer base.
PACIFIC BELL HEADQUARTERSSan Ramon, CalIfornig
CAL F,:y;^, A
USER
CUSTOMERBILLING
INFORMATION
SGn
ORDERINGAND
PROVISIONINGN,..SYSTEMS,,/
-7,
;a-
c Ors,E
SALESAuTOMATIO,.:
BRt- S1 ' SOFT ARE
SALESOFFICE
=11=117
USER
TECHNOLOGYPROFILE
FORCUSTOMER
2L IDN.DS
USER
SALESOFFICE
Figure 8NEXT Generation Example:
Pacific Bell Sales Office Automation Application
144
SC, fE.r.".CA.''
CUSTOMERAQUISITIONRESOURCES
(IS DC. DOtaqUe5,7COnreCtICL1
'so
SALESOFFICE
11
41mr7 111ENUSER USER USER
5. CONCLUSION
Throughout the modern world, the appetite for data richapplications is enormous and growing. With all the availablenetworking choices there is no one single answer for all datanetworking needs. One can summarize this concept with thefollowing equality;
NEW APPLICATIONS = INTELLIGENT NETWORKSOLUTIONS = INDUSTRY PROFITS + CUSTOMERSATISFACTION
ISDN will play an important role in satisfying many of theseapplications. It is available today and with selective networkaugmentation will satisfy the needs of users for m_ny yearsin the future.
The telecommunications industry challenge is not only toassist in applications development and support, but to alsoeffectively sell these applications. Most important to allindustry partners and customers is the ability of the publicand private network service providers to meet the growing
appetite for high bandwidth services through the deplo) mentof N-ISDN, frame relay, SMDS, and eventually Broadband-ISDN on a globalized basis. Integrated elements will hecritical to the success and effectiveness of voice and datanetworks. The importance of integrating these elementswithin Asia is necessary toward making the Pacific Rimstrategy a competitive one for its customers. It is importantfor users and providers to better understand how dataapplications can be served by various network applications asillustrated in figure 9.
Users needs will untimately drive network capabilities and itis important for the Asia Pacific Region telecommunicationsservice providers to incorporate user needs into their networkprovisioning decisions. Formalized user groups bothregionally and locally can help to assure that technology andapplications investments are meeting the expectations of theregions customers. The power of economics continues to bea major factor in how rapidly networks and applications arebuilt and this can be best accomplished through regularcooperation to assure that everyone's objectives are met.
APPLICATIONS
SERVICE TYPE
LANINTER-
CONNECT
CENTRALIZEDI/S DATA
APPLICATIONS
OFFICE AUTOMATIONAND PERSONAL PRODUCTIVITY
CAD/CAMSCIENTIFICMODELING
POINTOF
SALE
TRANSACTION/RESERVATION
SYSTEMS
VIDEO IMAGING/GRAPHICS
DISASTERRECOVERYAND DATA
CENTER BACKUPPC/WORKSTATION MAINFRAME
ISDN 0 00 00 00 0 00 00 00Point-to-Point 00 00 00 000 000 000 0Multi-Point 000 000 04)0 000 00Bridges and Routers 000 0 000 000 000 00CPE Multiplexer 0 000 00 00 00 000 000 000 000 000CO-Based Mux Service 000 0 00 0 000 000 000 00Public X.25 0 00 0 00 000Public Frame Relay 000 0 00 000 i 000 00Private Frame Relay 00 0 00 00 000 00SMDS 000 00 000 000 00
POOR MATCH - Technically feasible but rarely used and performance is not good0 FAIR MATCH Coil be used but performance may suffer
00 GOOD MATCH Offen used with good performance000 PERFECT MATCH Most often used and optimal for application
Figure 9Data Applications and Various Network Types
145
Optimization of VSAT Systemsand Application in Asia-Pacific Area
Kazuyoshi MIYOSHIMitsubishi Electric Corporation
Tokyo, Japan
1. ABSTRACT
:n a satellite communication system having VSATs (Very Small Aperture Term na 1 s) ,a set ci; equations to determine the optimum antenna gains of VSATs, areintroduced to minimize total system cost including the transponder and earth stationcost. Using these equations, a multimedia shopping system and a voice/datacommunication system are studied.
2. INTRODUCTION
Since our presentation on the Pacific regionalsatellite system at PTC '83 [11, 10 years haspassed and available satellites have been increasing.
From now on, VSAT systems will he ubiquitousin Asia-Pacific area, too.
Satellite trasponder powerdue to powerful solar arraysdishes than before ofinformation from a satellite.
has been increasedon satellites. SmallerVSATs can receive
Also, voice compression technology will contributeto reduce space segment cost of a VSAT system[21. Basic PCM requires 64 kbps and the latestdigital mobile telephone does only several kbps.
3. MULTIMEDIA SHOPPING SYSTEM
3.1 OUTLINE OF THE SYSTEM
Shopping terminals which are connected to VSATsare installed in stores, shopping centers, trainstations, and everywhere easily accessible byconsumers.
VSATs are linked to a hub station in star-shapedmanner as shown in Figure 1.
COMMUNICATION SATELLITE
HUBSTATION
SHOPPINGDATA BASE
L
/
SHOPPINGINFORMATION
soy
VSAT 1
VSATi
ACCESS SIGNAL
Figure 1 MULTIMEDIA SHOPPING SYSTEM
SHOPPINGTERMINAL
SHOPPINGTERMINf.LS
146
VSATs are receiving only . and the hub stationtransmits multimedia shopping information uponrequest of users. An user will touch the screenof a shopping terminal to access wantedinformation and the access signals are sent tothe shopping data base through ground lines.The shopping data base will findout the wantedinformation and transfer it to the hub stationto send it to the VSAT. Now, the user will seethe wanted information on the screen of theshopping terminal.
The multimedia information is time divisionmultiplexed (TDM) at the hub station with aterminal identification number to make it possibleto pick the information up at the terminal (Figure2).
For a store having the more terminals, thetransmission bit rate is the higher, to utilize thetransponder effectively.
By the varying bit rate mechanism, rain attenuationmight be also relieved knowing the attenuationof the link to the terminal through ground lines131, [4).
TOM FRAME PERIODrt
nREFERENCE BURST-11
SHOPPING INFORMATION
TERMINAL IDENTIFICATION
Figure 2 TDM FRAME CONFIGURATION
3.2 SYSTEM OPTIMIZATION
The annual expense Et of the portion of atransponder used by this system is given below.
E = bt k
Where, n:
b:
k:
gi:
t.:
sot
T f:
r
n sot t Tfb T
i=1 gio (1)
number of VSATs
annual expense of a transponderper Tf belowTDM burst rate per gi/ti of a VSATreceiving antenna gain of the i-thVSAT
receiving system noise temperatureof the i-th VSATaverage busy hour traffic of thei-th VSAT in bit rate.TDM frame period (see Figure 2)total period of all over-heads aspreambles and guard times of eachburst.
Total annual expense Ee of all VSATs is assumedas
Ee = dnEo+ c + E h.i=1 1=1
(2)
Where, E0: fixed expense of a VSATc: proportional coefficient to antenna
gain of a VSATd: proportional coefficient to channel
capacity (number of shoppingterminals) of a VSAT
h.1 : channel capacity of the i-th VSAT
Summation of Et and Ee is minimized at theantenna gain gi determined from the followingequation.
gi
b soi ti Ifck
i=1,2 n (3)
3.3 LINK BUDGET CONDITION
The up link from the hub station is not criticalas the station can easily have sufficient EIRP(Effective Isotropic Radiated Power). Then thedown link to VSATs should be studied.
The received power of the i-th VSAT has at leastto be equal to a threshold value q, times thereceiving system noise power of the VSAT. Asa conclusion, k has to satisfy the following equation.
k - Sko Ld qd
(4)
Where S : satellite EIRPko: Boltzman's constant (= -228.6 dBK)Ld: total down link loss including
propagation, atmospheric absorption,rain attenuation losses and requiredmargins.
147
The qd is determined from required BER (Bit ErrorRate).
3.4 AN EXAMPLE OF SHOPPING SYSTEMS
A shopping system consists of 10,000 VSATs isstudied. The satellite communication frequencyis Ku band.
5,000 VSATs have a shopping terminal each andthe rest have four terminals each. Then totalterminal number is 25,000.
The system and cost parameters are assumed ratherarbitrarily but not too far from the real worldand shown in Table 1.
Table 1. System and cost parameters
S
ko
Ld
qd
ti
soi
To
Ifb
Eo
d
: satellite EIRP
: Boltzman's constant
: down link loss
: down link threshold
: noise temp, VSAT
: traffic to a VSAT
: duration of over head
: TDMA frame period
: transponder exp.trf
: fixed VSAT expense
: VSAT expense/gain
: VSAT expense/channel
52 dBW
-228.6 dBW/K
214 dB
8 dB
26 dBK
0.5 kbps
I ms
10 ms
4x108 Sly
2x103 Sly
0.1 5/y
2x103 sly
The average traffic is obtained assuming two userswill occupy a terminal in a busy hour for tenminutes (average) each. During the ten minutes,an average user receives ten pages of text andtwo photographes.
From the equation (4),
k = 52 + 228.6 - 214 - 8 = 58.6 (in dB)
Then, from the equation (3)
gi = 0.5 X (86 +27 +26- 20 + 10 58.6) = 35.2(in dB for 1 terminal VSAT) and = 38.2 (in dBfor 4 terminal VSAT).
Obtained system parameters are show. in Table 2.
Table 2 SYSTEM PARAMETERS OF THE SHOPPING SYSTEM
Parameters 1 terminal VSAT 4 terminal VSAT
VSAT antenna gain
g/t of VSAT
TDMA burst rate
VSAT anten,d diameter
35.2 dB
9.2 dB/K
6.0 Mbps
0.6 m
38.2 dB
12.2 dB/K
12.0 Mbps
0.8 m
__annual of VSAT S1,600 52.900
Assuming the annualis a million dollars,and the transponderphotographs is ¢0.2terminal VSATs.
expense of the hub stationthe cost of the hub stationper page of text and perand ¢4 respectively for 1
4. VOICE/DATA COMMUNICATION SYSTEM
4.1 OUTLINE OF THE SYSTEM
A voice/data VSAT system is studied here. Thevoice traffic is dominant and is compressed bythe voice codec.
VSATs are linked to a hub station in star-shapedmanner as shown in Figure 3.
HUBSTATION
COMMUNICATION SATELLITE
)1.<
VSAT 1
VSATi
VSATn VOICE/DATA
Figure 3 VOICE/DATA COMMUNICATION SYSTEM
The communication scheme is SCPC (Single ChannelPer Carrier) and the EIRP of the hub stationis controlled in inversely proportion to the receivesensitivity of the communicating VSAT to utilizethe transponder effectively.
The transponder is operated in the power limitcondition in outbound links from the hub to VSATsand in the frequency limit condition in inboundlinks as the hub station has sufficiently highreceiving sensitivity.
The hub station has the VA (Voice Activation)function to increase EIRP per channel oftransponder to VSATs.
The EIRP control mechanism can also relieverain attenuation to a VSAT [51[61[71.
4.2 SYSTEM OPTIMIZATION
The annual expense Ep of the portion of a
transponder used by the system is given below.
n e sEt o of
E = ka + b EP PR, i=1 gi/ti i=1
Where, n : number of VSATs
Er : annual expense of a transponder
sio ) (5)
148
P9 : maximum liner output of atransponder
a,b : proportional coefficients
e : reference EIRP of the hub stationo per channel
s . s. : outbound traffic (channels) to01, 10 the i-th VSAT and inbound one
from the VSAT, respectively.
gireceiving antenna gain of the i-thVSAT
t1 . : receiving system noise temperatureof the i-th VSAT.
Total VSAT cost Ee is assumed as same as theequation (2). Summation of Et and Ee isminimized at the antenna gain gi determined fromthe following equation.
Ja eo Et s. t., i = 1, 2,-- n (6)
c P9,
4.3 LINK BUDGET CONDITION
Similar to the shopping system, only the criticaldown links to VSATs are studied. Correspondingto the equation (4),
a eo -ko Ld ro qd
(7)Gt
Where ro: bit rate per channelGt : satellite transmission antenna gain
4.4 AN EXAMPLE OF VOICE/DATA COMMUNI-CATION SYSTEMS
A voice/data communication system of 100 VSATsis studied. The satellite communication frequencyis C band.
50 VSATs are single channel capacityrests are 4 channel capacity.
The system and cost parameters arerather arbitrarily but not too far fromworld and shown in Table 3.
Table 3. SYSTEM AND COST PARAMETERS
and the
assumedthe real
Gt : satellite ant. gain
PR : linear TPD. power
Ld : down link loss
qd : down link threshold
ti : noise temp. of ES
rd : bit rate per channel
Et : TPD. expense
E0 : fixed VSAT expense
c : VSAT expense per gain
d VSAT expense per chan.
25 dBW
7 dBW
201 dBW
5 dB
23 dBK
10 kbps
2x106 Sty
2x103 $/y
0.3S/y
2x103 Sly
TPD.: Transponder
The traffic to 1 ch VSAT is 0.4 and to 4 ch VSATis 1.6 with VA. factor of 0.4.
From the equation (7)
a e0 = -228.6+201+40+5-25 = -7.6 (in dB)
From the equation (6)
gi = 0.5 x (-7.6 + 63 - 4 + + 5.2 7)
= 36.3 (in dB for 1 ch VSAT) and= 39.3 (in dB for 4 ch VSAT).
Obtained system parameters are shown in Table 4.
Table 4 SYSTEM PARAMETERS OF THE VOICE/DATA COMMUNICATION SYSTEM
Parameters 1 ch VSAT 4 ch VSAT
VSAT antenna gain 36.3 dB 39.3 dB
g/t of VSAT 13.3 dB/K 16.3 dB/K
VSAT antenna diameter 2.0 m 2.8 m
Annual expense of VSAT $5,300 512,600
Assuming 7 KHz per channel using QPSK (QuadurePhase Shift Keying) total inbound links occupies1.75 MHz of a transponder band width. Fromthe equation (5), the transponder expense for thissystem is 211K$/year.
When the hub station expense is 500K$/year, thetotal system expense is 1.6 M$ /year. Thiscorresponds to $540/month/channel. With thisnetwork, 2400 bps data transmission will bepossible, too.
Possible interference to adjacent satellites dueto the small dishes is not studied here.
5. CONCLUSION
By optimization equations, the antenna gains ofVSATs to minimize system cost are easily obtained.
As an example, a multimedia shopping systemconsisting of one way VSATs and a high powerKu band satellite is studied. Very high speed andless expensive data transmission than any groundservices is possible.
The other example is a two-way voice/datacommunication system using a C band satelliteand it is economical when the distance is morethan 40 km comparing with Japanese leased linerates.
For a two way C band VSAT with a small dish,interference with adjacent satellites and groundmicrowave stations has to be studied or adoptionof spread spectrum technology will solve theproblem.
149
REFERENCES
[11 N. Takasaki, T. Yamagishi, K. Miyoshi,H. Tanaka, A. Kawamura, "A Study on thePacific Regional Satellite CommunicationsSystem". Research Institute ofTelecommunications and Economics, Japan.January 1983 (presented at PTC '83)
[21 K. Miyoshi, S. Egami, M. Tsuchiya, "A Studyon Feasibility of Mobile SatelliteCommunication Systems", Proc. FourteenthAnnual Conf.. PTC, 1992, pp. 239-243.
[31 M. Yamacac.ito, N. Hamamoto, Y. Matsumoto,Y. Hashimoto, I. Nishiyama, "VariableTransmission Rate TDMA CommunicationSystem For Small Earth Stations Network",National Convention Record, S25-1, IECEJapan, 1986. (in Japanese)
[41 Y. Matsumoto, M. Yamamoto, N. Hamamoto,Y. Hashimoto, "Result of SatelliteCommunication Experiment with VariableTransmission Rate TDMA System", SpringNational Convention Record, B-200, IECEJapan, 1988. (in Japanese)
151 T. Atsugi, M. Morikura, S. Kato, "A Studyon Uplink-Transmission Power Control Schemefor Satellite Communication Systems", Paperof Technical Group, SAT84-52, IECE Japan,1984. (in Japanese)
161 H. Kazama, K. Ohtani, S. Kato, "TransmissionPower Control Scheme for SatelliteCommunication Systems", Paper of TechnicalGroup, SAT87-10, IECE. Japan, 1987. (inJapanese)
171 T. Inoue, T. Mizuno, "TransmissionControl Using Hybrid Modulation",of Technical Group, SAT9I-50, lEICE1991.
PowerPaper
Japan,
Business, Legal, and Technical Implicationsof the Proliferation of Global Data Communication Networks
Hyung-Min Michael Chungand
Tee Ee Tan
Department of Business Analysis and ResearchGraduate School of Business
Texas A & M UniversityCollege Station, TX 77843-4217
U.S.A.
ABSTRACT
This paper examines business, legal, and technical issues in theapplication of global data communication networks. We describethat commitment in terms of cost, time, and personnel which turnout to be substantial. The diverging standards adopted by thenational PTT's need to be harmonized. The burden to createindustry standards falls on organizations like CCITT to provide aworldwide standard for greater efficiency and lower cost.
1. Introduction 2. Business and Legal Issues
As the world transforms into theinformation age, the collection, proc-essing, storing and retrieval of infor-mation have become a paramcunt issue forsurvival in the business world. Sincethe value of a particular piece ofinformation is directly correlated toits timeliness, the efficiency in locat-ing and retrieving needed information iscrucial. Coupled with the emergence ofa global economy where businesses formworldwide alliances or have scatteredoffices around the globe, the construc-tion of global data communication net-works has proliferated. Thus, we cansee a stockbroker in Chicago buyingEuropean petroleum company shareswithout going through a trader in NewYork, and hundreds of thousands employ-ees at a multinational company communi-cating via an electronic mail using aglobal network that spans 145 countriesand moves 3 trillion characters ofinformation a year (Keller et al.,1988).
Due to their geographical scope, globaldata communication networks pose uniqueissues that were not apparent whennetworks were limited to a building or acountry. The network developers have tocontend with a multitude of technicalstandards and government policies ineach of the country that the networkspans. This paper discusses issuesrelated to the proliferation of globaldata communications network.
150
Global data communication networks havehad a great impact on the way businessis conducted. It has also altered thelegislative and enforcement power of thegovernment. The relationship betweenbusiness and government is discussed inthe following sections.
2.1 The Financial Sector As An Example
A good example to illustrate issues inthis area is the financial industry. Itis an information intensive industrywhose size and scope have expanded to apoint where the financial systems ofmany countries are now interrelated. Forexample, a rumor that Japan is tighten-ing its monetary policy will cause bondprices to drop in New York. Globalnetworks have sprung up to service thisindustry. Information databases whereinformation can be bought include Feder-al Reserves' Flow of Funds, World Bank'sWorld Debt Tables, International Mone-tary Fund's Balance of Payments andInternational Financial Statistics,Chase Econometrics Foreign Exchange,Reuter's Economic services, Standard &Poor's and Moody's, among others. Tele-matics developments in financial marketsto facilitate financial exchanges in-clude FedWire, BankWire, CHIPS (ClearingHouse Interbank Payment System), SWIFT(Society for Worldwide Interbank Finan-cial Telecommunications), Euroclear,Cedel, Reuters, Telerate, and Instinet.
4 ,
These projects require a large invest-ment and a high degree of legal andpolitical coordination.
The development of global networks amongthe financial markets have opened upopportunities for new ways of doingbusinesses. Many institutions are nowoperating on a 24 hours a day around theworld basis. Trading on the world'sstock markets can be carried out viainternational links like Chicago Mercan-tile Exchange/Singapore InternationalMonetary Exchange (CME/SIMEX) and be-tween the COMEX and the Sydney FuturesExchange (Jussawalla and Dworak, 1989).This increase in the fluidity of theflow of international capital has in-creased the efficiency of the matchingof the availability of funds to theneeds for funds.
Taking advantage of the development inglobal communication together with awealth of information that no otherorganizations possess (e.g., customerspecific information), banks have alsodiversified from their traditional moneylending role to become informationservice providers. In much the same waythe distinction between hardware manu-facturers and common carriers blurs asthe former gets into telecommunicationbusiness and the latter starts manufac-turing hardware after deregulation inthe United States, this new developmenthas also started to blur the distinctionbetween banks and the traditional pro-viders of information services, such asReuters (Spero, 1989). Large corporatecustomers of banks can now, via termi-nals in their offices, access foreignexchange information, initiate electron-ic funds transfer and letter of credittransactions. Banks that do not have thenecessary investment to provide thesenon-credit services are in danger ofbeing abandoned by their multinationalcorporate customers. Reuters, on theother hand, is also encroaching on thebanks' territory by entering the busi-ness of arranging transactions, otherlarge companies are also beginning toexpand from simply supplying data intoproviding data analysis services. Thesenew phenomena give rise to some inter-esting issues that will be furtherexamined in the next two sections.
151
2.2 Implications For Developing Coun-tries
The customers' desire to have non-creditservices from their banks mean thatcompetition in banking will favor bigbanks with huge communication resources.This may exclude even the biggest bankin a small country, especially those inthe developing world. The strategy thatthe small banks can pursue then, is toseek access to the big banks' networksthrough a correspondent relationship.Correspondent relationship is currentlyprevalent among domestic United Statesbanks. It works as a chain of relation-ship from small banks through largerlocal banks and regional banks to thosein the money market centers. Thesecorrespondent banks provide clearingfacilities, participation in loans, andother services that the small banks findfinancially infeasible to provide ontheir own (Mey, 1989). In the face ofinternationalization of banking serv-ices, this form of alliances may becomean attractive option in internationalbanking.
However, the banks that have the directand full access would still have theedge in marketing their services. Thisraises the possibility of the smallercountries closing off its domesticmarket to protect its own industry. Theresistance from these countries can beillustrated by their reluctance to openup their market for transborder servicesdespite pressure from the Organizationfor Economic Cooperation and Development(OECD), this has become an importantissue in the General Agreement on Tar-iffs and Trade Services (GATT) negotia-tions (Aronson, 1989). However, cuttingoff their own access to internationalfinancial networks also means the termi-nation of access to new developmentfunds from foreign investors. More andbetter information on the developingcountries' market, made availablethrough the global financial networks,would be needed for the internationalinvestors to make investment decisions.
These governments could have two choices(Aronson, 1989): One is to overcomenational jealousy, resolve questions ofequity and adjustment across borders,and accept the reality of global inter-
dependence. Or, they can retreat fromthese complexities in order to improvecontrol on domestic policies, but riskfuture trade growth and job creation.This, of course, is a potent issue.Striking a balance will depend on theingenuity and creativity of each coun-try.
2.3 Implications For Government Policies
Since the operations of the financialsector have serious implications on thefinancial health of a country, it natu-rally invites government regulations.The new flexibility provided by globalnetworks though, has created new challenges to the framers of national eco-nomic policies and those responsible forregulating the industry. Much of theexisting regulations were created longbefore the information revolution andare inadequate to control the effects ofthe innovative ways that banks have comeup with to conduct transactions on thesenetworks.
The flexibility and speed with whichtransactions can be conducted on thecommunication networks on a global scalehave severely negated the ability ofcurrent legislations to regulate thefinancial matters of each country. Forexample, high speed fund transfer allowsilliquid asset to become liquid and theability of a bank to tap into offshorefunds results in monetary growth whichreduces the efficiency of some domesticmonetary policies designed to restrictmonetary growth. The financial marketshave also become so interdependent thatthe ability of individual government topursue particular monetary and fiscalpolicies within its own borders isreduced.
The global networks also provide bankswith a low cost and high speed access tospeculative markets. They may engage inrisky behavior without a fear of detec-tion. This change in the risk charac-teristics of the banks may undermine theintegrity of a country's financialstructure.
These issues characterize the ongoingprocess of conflict between the regula-tors' attempts to regulate and the
attempts of the regulated to lessen theburden of the regulation. Two opposingpoints of view emergeregulators are',r economic stability, financial systemintegrity, efficiency and equity, where-as banks are concerned with profit andthe ability to remain competitive(Jussawalla and Dworak, 1989; Chung andMcGowan, 1992).
All in all, governments may find itdifficult to keep pace with the constantflux in information technology develop-ments since their reactions are usuallybased on past experience and necessity,not on future trends or the need forplanned action. To complicate thematter further, constant changes intechnology makes permanent equilibriumimpossible. Given the situation, gov-ernments can no longer afford to take anisolationist stance. Greater effort inarranging international cooperation isneeded. In this respect, four broadstages of approaches t- cooperativearrangements among governments can becharacterized as Krommernacker (1989)described: The first stage is the peri-odic meeting between nations to discussabout common problems, to review thedevelopment in each country and tolisten to explanations of actions thathave been taken. However, ultimately,each country still stands alone to fendfor itself. The bulk of current interna-tional efforts remain at this level.
The second stage of development goesbeyond the first in requiring consulta-tion and justification on measures thatwill restrict international data flow onthe networks. Greater internationalsupervision is involved in order topromote a freer but regulated orderlyflow of data. The OECD has achieved thislevel in some respects.
The third stage entails bilateral ormultilateral approaches for closercooperation in the information technolo-gy policies. The governments have de-veloped sufficient confidence in thepolicy judgments of their counterpartsin other countries to make them willingto share legislation. The experiencebetween the United States and Canada,and the GATT trade negotiations are inthis direction.
The last stage of development comes when
countries have a high degree of agree-ment on the information technologypolicies and have close coordination toavoid regional divergence in thesepolicies. The close cooperation willguide the countries as a whole towardsits information technology objective.This situation would prevail to a largeextent in the European Economic Communi-ty after 1992 as time elapses. Therewould be no barrier to the movement ofcapital, labor, goods, services andinformation.
The evolution of international coopera-tion shall depend on the individual gov-ernment's willingness to change theirway of governing. They need to realizethat in the new global economy, nonation can accomplish all its regulatingneeds alone. Liberalization with ade-quate amount of control seems to be thecurrent trend, this may mean a monitor-ing role instead of an active involve-ment role for the governments. However,going against the trend could mean beingleft behind in the rapidly changingtechnological environment, that willhave grave consequences for the coun-try's growth potential and competitive-ness.
3. Technological and Standard Issues
Technological difficulties and theissues of system development managementfor an undertaking as big as a globalcommunication network is enormous. Inaddition, the system designers have todeal with a variety of proprietarytechnology offered by different vendors.The situation is further aggravated byrestrictions imposed by the differentcountries. State-run phoneauthorities Postal Telephone and Tele-graph (PTT) in most of Europe and thedeveloping countries still inhibit thedevelopment of private network by con-trolling the type of equipment that canbe used and used by whom. They alsoenforce strict control on the flow ofdata across borders, this has forcedcompanies to set up duplicate computercenters in different countries at a veryhigh cost.
The issues of system development will bediscussed in the context of the develop-
153
ment of the Society of Worldwide Inter-bank Financial Telecommunications(SWIFT) II. The working of standardsetting bodies like the ConsultativeCommittee on International Telegraph andTelephone (CCITT) will then be examined.
3.1 The Case of the Society of World-wide Interbank Financial Telecommunica-tions (SWIFT)
SWIFT is a good example of internationalcooperation. It was conceived by a groupof major European community banks toprovide an international version of theUnited States' BankWire. It was de-signed to provide an automated interbankfund-transfer message system and wentoperational in late 70's. In about 10years, it grew from a membership ofseveral hundred founding banks in 11countries to more than thousand membersbanks in above sixty countries. Thedaily volume of messages grew from27,000 to 1.12 million (Murphy, 1988).
SWIFT was widely regarded as a success.It was fast, reliable and affordable(e.g. A US$0.43 charge per message in1988) and offered some security to theusers by assuming responsibility andliability while messages were in itshands. But more importantly, it set upa common set of standard for use insending messages. Language barriersbetween banks in different countrieswere eliminated and all communicationscould be handled using the common codesof SWIFT.
However, the crunch came when SWIFT IIwas proposed. SWIFT II was meant to bethe successor to SWIFT as the latter wasrunning out of capacity. It would havegreater security features, includingacknowledgement of safe receipt of amessage, and storage of information inmore than one place so that malfunctionin one area would not lead to a loss ofinformation (Boult, 1988).
The SWIFT II project ran into trouble inmid 80's. The implementation date wasdelayed when it was found out that thenew network control software supplied bya computer company was tr'o complicatedto handle. The project was then delayedagain due to a combination of factors:
Concerns of parties wanting to makeSWIFT II as reliable as possible placeda lot of demand on the development team.The functionality that the design calledfor was too complex for the environment.The new system was supposed to be ableto allow new bank onto the system at anytime of the year, instead of the currentquarterly system, that posed greatproblems in controlling the neededupdating processing. Suggestions werealso made to add value to the services,SWIFT II would perform back-officeprocessing, use expert system for mes-sage processing and bring on non-bankinstitution. When the eight projectsthat made up SWIFT II came to be inte-grated, they were still far from suc-cessful. The mismatch between the partswere so severe that it indicated abysmalproject management effort (Murphy, 1988;1989)
The SWIFT II debacle, a $40 millionproject that was 3 years overdue,illustrates some potential pitfalls inmanaging a big system project. First, agood appreciation of the size and com-plexity of the project was lacking.Expectation of the end users was alsounduly built up with excessive publicityof the project. An executive of SWIFTconceded that "We wrongly changed thefocus of SWIFT II from a strategic toolfor new services to a visiting carddemonstrating SWIFT's technical ability.As a consequence we created expectationsthat have come back to haunt us" (Mur-phy, 1988). An external factor alsocame into play. When SWIFT II was beingdesigned, the company had to ensure thatthey comply fully with the regulationsof the various European PTTs, this ledto the idea of decentralized processingcenters. However, this requirementadded further complexity to the project.
Global system developers can learn fromthe experience of SWIFT. A globalsystem adds on a lot of extra require-ments compared to a organization-wide oreven a national system. A good under-standing of the peculiarities of legis-lation of each country is helpful, butmost important of all, project manage-ment skill must be utilized to take onsuch an undertaking.
154
3.2 Consultative Committee on Interna-tional Telegraph and Telephone (CCITT)As A Standard Setting Body
In global network projects, a standardprocedural logic discipline and bindinglegal rules are necessary compliments tothe technical equipment. However, inthe arena of standard setting, thingswere generally being carried out in anad hoc manner. Most existing interna-tional telecommunication arrangementswere negotiated between national monopo-ly PTTs, mostly done without much con-cern of compatibility to existing stand-ards of other countries. Quite often,telephone, data sets, switching equip-ment, private branch exchange and trans-mission equipment designed for Americamay not work in Europe without somemodifications and vice versa. Worsestill, in Europe, not only is it hard toleap over national boundaries on publicnetworks, but transmission is oftenpoor. Big companies and other consorti-um of companies and alliances had alsoset up their own standard, mostly fortheir own advantage. Others in theindustry had to follow because of thesecompanies' wide installed base, however,these followers were at a competitivedisadvantage in terms of technicalknow-how and the control of the direc-tion the industry is going.
Users, on the other hand, have longurged manufacturers to produce standardbased systems in order to increase theconnectivity of their hardware andsoftware in which they had made substan-tial investment. Banks were particular-ly hard hit as they tried to digest themultiple systems that they inheritedduring the intensive period of mergerand acquisition in the 80's (Swift,1990).
After the American Telephone and Tele-graph (AT&T) divestiture, some changesin the attitude and motivation can beseen among the vendors, especially amongthe telephone companies. Because of theincreased competition in the telecommu-nication industry, they need to committhemselves to provide the best serviceat the best cost. To do so, they arevigorously seeking out the best techno-logical sources without regard of na-tional boundary. The incompatibility of
foreign equipment can only hinder thepursuit of the best technology.
With both the United States purchasersand worldwide vendors striving for moreuniversal recommendations on telecommu-nication equipment, the situation maydemand the expanded role of the CCITT.It is a permanent body of the Interna-tional Telecommunication Union with theaim of harmonizing the technical, opera-tional and tariff aspects of interna-tional telecommunications services. Oneof its principal mechanisms is drawingup study questions for consideration byexpert groups around the world who willthen draft recommendations that will besubmitted to the CCITT plenary assem-blies for approval (Williamson, 1989).
However, in the process of defining astandard, the CCITT may encounter someproblems. As in the case of the Inte-grated Systems Digital Network (ISDN)standard, one of these problems is thedifferent level of development in dif-ferent countries, some, like America, donot have the interest, others, like thedeveloping world, lack the financialresources to convert or to comply. Itshould be mentioned that one of theunenviable tasks in standards setting isto balance the national interest ofdifferent countries.
4. Conclusion
Global data communication networks havechanged the ways in which business isconducted, notably in the banking sec-tor. With the increased flexibilitythat the global network provides, bankshave been able to circumvent govern-ments' attempts to regulate the finan-cial market. Greater cooperation amongnations are needed in defining a legalframework in which financial transac-tions can be conducted smoothly andethically.
Although a global communication networkmay provide a lot of benefits to manycountries, the work entailed in thedevelopment of one is phenomenal.Projects could fail because of thefailure to realize the scope and therange of issues involved in the process.An excellent expertise in project man-
155
agement is vital. Commitment in cost,time, and personnel may also turn out tobe substantial.
On the technological side, the divergingstandards adopted by the national PTTsmay be hindering the development ofglobal telecommunications. With thelethargic attitude of most countries inagreeing on a worldwide protocol, devel-opment of information exchange, may itbe for business, social or science, willbe hindered. The burden to createindustry standards falls on organiza-tions like the CCITT. A worldwidestandard will mean greater efficiencyand lower cost for the consumers.
References
Aronson, J., "Trade Negotiations, Tele-com Services, and Interdependence" InInformation Technology and Global Inter-dependence, Jussawalla, Okuma, and Araki(Eds.), Greenwood Press, Westport,Connecticut, 1989, pp 137-149.
Boult, R., "It's Do or Die for SWIFT IIProject," Datamation, December 15,1988, p 72.
Chung, H.M. and McGowan, A., "SystemsIntegration in Electronic Data Inter-change," working paper, Graduate Schoolof Business, Texas A & M University,1992.
Jussawalla, M. and Dworak, S., "TheImpacts of Telematics on FinancialIntermediaries and Market Interdependen-cies," In Information Technology andGlobal Interdependence, Jussawalla,Okuma, and Araki (Eds.), GreenwoodPress, Westport, Connecticut, 1989, pp85-101.
Keller, J., Peterson, T., Maremont, M.,and Hafner, K., "A Scramble for GlobalNetworks," Business Week, March 21,1988, pp 140-148.
Krommenacker, R., "The Impact of Infor-mation Technology on Trade Interdepend-ence," In Information Technology andGlobal Interdependence, Jussawalla,Okuma, and Araki (Eds.), GreenwoodPress, Westport, Connecticut, 1989, pp124-136.
Mey, H., "The Impact of InformationTechnology on International FinancialFlows," In Information Technology andGlobal Interdependence, Jussawalla,Okuma, and Araki (Eds.), GreenwoodPress, Westport, Connecticut, 1989, pp102-108.
Murphy, P., "International Rewrite," TheBanker, December 1988, pp 58-59.
Murphy, P., "Not So Swift Off the Mark,"The Banker, Daccnber 1988, pp 55-57.
Murphy, P., "And With One Bound," TheBanker, April 1989, pp 21-22.
Spero, J., "The Information Revolutionand Financial Services: A New North-South Issue?" In Information Technologyand Global Interdependence, Jussawalla,Okuma, and Araki (Eds.), GreenwoodPress, Westport, Connecticut, 1989, pp110-117.
Swift, C., "The Search for OpenSystems," Bank Management, October 1990,pp 58-63.
Williamson, J., "Irmer Urges Major CCITTReform," Telephony, December 25, 1989,pp 8-9.
156
New Multilaterally Agreed Rules ForInternational Trade In Services
Dr. Raymond J. KrommenackerCounsellor, GATT
Geneva, Switzerland
ABSTRACT
Through the application of the Uruguay Round results, world trade in goods and in services should experienceconsiderable growth and, consequently, restore employment and prosperity. A multilateral trading system thatfacilitates adjustment to change through strengthened disciplines and meaningful commitments to rules in thecontext of the GATT and OATS texts will reduce uncertainty, smooth the adjustment process and enhancethe stimulus to economic growth from constant innovation.
The General Agreement on Tariffs and Trade - GATT - is a bindingcontract between 105 governments which together account foraround 90 percent of world merchandise trade. The objective of thecontract is to provide a secure and predictable international tradingenvironment for the business community and a continuing processof trade liberalization on which investment, job creation and tradecan thrive. In this way, the multilateral trading system contributesto economic growth and development throughout the world.
Since 1986, the GATT has been undertaking the most complex andcomprehensive trade negotiations ever, the Uruguay Round. Oneof the objectives in the Puma del Esta Declaration that launchedthe Uruguay Round included the creation of a new set ofmultilaterally agreed rules for international trade in services, that isa new contract among governments to liberalize services trade.After more than six years of negotiations, the governments havebefore them a package of twenty-eight multilateral agreements ingoods and in services, contained in a draft Final Act of over 400pages. It is worth noting that among the twenty-eight agreements,agriculture counts for one and services for another.
The draft rules of the General Agreement on Trade in Services -GATS - add up to a code of orderly conduct of trade in all services,including telecommunications, transport, construction, financial,professional services and tourism.
Ipternational trade in commercial services was worth USS865 billionin 1991, and is estimated to be growing at 6 per cent per year. Thisfigure represents reported trade between residents of one countrywith residents of another. But the negotiated scope of coverage ofthe OATS include transactions :7 -dal out by foreign corporationslocally, i.e., through a commercial presence or establishment; thisincludes, say, an American bank establishing itself in Paris andselling services to French residents. Although no precise figures areavailable, GATT estimates that the coverage of OATS includingtransactions by foreign affiliates is probably far closer to USS2,000billion.
Moreover, the total commercial services production potentiallycovered by the GATS is many times larger (perhaps USS15,000billion worldwide). This is because the agreement contains generalobligations applying to government regulation of all non-governmental services production whether provided by domesticcompanies or foreign ones.
The draft General Agreement on Trade in Services (GATS) consistsof three elements: (I) the multi-lateral framework (or Articles ofthe Agreement), (2) the sectoral annexes dealing with thespecificities of four sectors and (3) initial commitments to liberalizetrade in services.
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The first element, the Articles of the Agreement, contains two mainsets of provisions. One set comprises general obligations which willbe applied automatically to all services by all parties to the GATS.The most important obligation relates to the most-favoured-nationtreatment (rn.f.n.), under which a trade concession granted to onecountry, such as allowing foreign banks or telephone companies tooperate locally, must be given on a non-discriminatory basis to allparties to the GATS.
Oth r obligations of a general and automatic application relate to(1) measures to improve transparency, (2) disciplines regarding theimplementation of domestic regulations, (3) measures facilitatingrecognition of standards and qualifications, (4) disciplines onmonopolies and restrictive business practices, and (5) measures toprohibit restrictions on payments and transfers. In addition,development-related provisions throughout the GATS provide forthe increasing participation of developing countries in world tradedservices and appropriate flexibility is allowed for individualdeveloping countries in the process of liberalization.
The second set of specific obligations of a negotiated (as opposedto a general and automatic) application provided in the GATSrelates to market access and national treatment. These obligationsare not applied to all services sectors, but arc agreed upon throughbilateral negotiations, with the implications that governments canapply limitations on M.. these obligations arc implemented.Concretely, this OATS approach means that access to a foreignmarket and the ability to compete on rn equal footing in thatmarket (which are a bilaterally negotiate,; process) will be realizedonly where specific commitments are undertaken by individualparties to the GATS.
Ultimately, the results of these bilaterally negotiated lihcralizatiunundertakings with respect to market access and national treatmentwill he extended to other parties to the OATS through theapplication of the m.f.n. treatment. Remaining pros Dion in theGATS deal with institutional and final provisions. includirydispute settlement mechanism.
The second element of the GATS relates to the sectoral annexes,the aim of which is to clarify, interpret or qualify the application ofthe GATS provisions in the light of four sectoral peculiarities intelecommunications, financial and air transport services, and on themovement of personnel supplying a service.
The Telecommunications Services Annex substantially relates to thequestion of providing access to and use of publictelecommunications network sets ices. The Financial Services Annexrecognizes inter alia the right to keep or introduce discriminator!,measures for prudential reasons. These reasons include the
protection of investors, depositors, policy holders or persons towhom a fiduciary duty is owed by a financial service supplier. TheAir Transport Services Annex. which exempts traffic rights, relatesessentially to the questions of aircraft repair and maintenance,selling or marketing of air transport and computer reservationservices. The Movement of Personnel Annex essentially providesfor the member countries to negotiate specific commitments on themovement of all categories of natural persons providing a service.
The third element of the GATS relates to the package of "offersconcerning initial commitments" negotiated among the parties tothe GATS, that is the opening of new business opportunities to beagreed in bilateral negotiations. This means essentially thatcountries undertake to maintain or improve current levels ofopenness of market access and operating conditions in theirmarkets. Today, sixty-seven countries accounting for over 90 percent of world traded services have offered to liberalize in majorservices sectors. Other smaller countries are in the process ofcirculating their offers. The extent of liberalization of world tradedservices that will follow from the Uruguay Round, however, willdepend not only on the initial commitments, but also on the extentto which parties to the GATS will seek exemptions from the m.f.n.obligation. The rules in the GATS would have little operationalvalue in the absence of substantive commitments to liberalize worldtraded services on the part of all signatories. And in the finalanalysis, the question of time - bound exemptions from the m.f.n.requirements of the OATS is one which has to be accommodatedwithout compromising the basic GATS itself. This is a very delicateissue and the final commercial value of the GATS will, to a largeextent, be determined by how this question is resolved.
Subsequent negotiations will be directed to the further reduction orelimination of services trade restrictions. The benefits of the OATSare that there can he no discrimination in world traded servicesbetween countries signing the Agreement and between national andforeign services suppliers.
Essentially, the results of the Round can be divided into fourdifferent kinds of trade accord which together form a cohesiveglobal package. First there are market-opening measures like tariffconcessions, the traditional business of the GATT. Second, thereare agreements which seek to strengthen the rules of the GeneralAgreement on Tariffs and Trade. Into this category can be putstronger anti-dumping and subsidies rules but also trade in textiles -which has been subject to a negotiated market-sharing arrangementin the GATT for the past 20 years - and trade in agriculture whichhas been subject to loose and partly-ineffective GATT rules.
The third clement in the package are agreements on new sectors ofeconomic activity not previously covered by GATT - notably, tradein services and trade-related aspects of intellectual propertyprotection. Finally, there are understandings on institutionalmatters; in particular, improvements to the dispute-settlementsystem and the establishment of a new Multilateral TradeOrganization.
With the exception of the results of the tariff negotiations and therather similar liberalization commitments for trade in services,largely-agreed draft texts on every one of these elements weretabled, last December, by GATT Director-General. Arthur Minkel.in the so-called Draft Final Act of the Uruguay Round. Thisremains the only negotiating document at the multilateral level.
Opening markets
The aim is to bring the average le% el of tariffs (customs duties)down by more than 30 per cent. After seven previous trade roundsthey are already low - around 5 per cent for the main industrialcountries. However, some high tariffs remain. It is expected thatsome industrial sectors will see import tariffs abolished altogether.
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while many developing countries should secure significant market-access improvements for tropical products and natural resource-based products. And not only will tariffs fall, many other kinds ofborder restrictions - import quotas, for instance - will be wholly orpartly liberalized.
Re-writing the rules
Many of GATT's rules are concerned with ensuring fair competitionwithin markets and between markets. Thus, agreements resultingfrom the Uruguay Round will include new rules on anti-dumpingmeasures, new disciplines on the use of subsidies and thecountervailing duties which can be used to offset their effects, acomprehensive agreement on emergency import control measureswhere industries are under real threat from competition, and a newcode on the way in which the origin of imports are determined bycustoms authorities. Many other rules of the original GeneralAgreement on Tariffs and Trade will also be clarified and improved.
The last big trade round, the Tokyo Round, resulted in a series ofagreements on non-tariff measures. Most of these agreements willbe expanded and improved in the Uruguay Round. In particular,the agreement on government procurement will be extended tosubject billions of dollars of extra government business tointernational competition.
The Uruguay Round will also lead to new disciplines on nationalinvestments regulations which distort trade.
Bringing textiles and clothing trade back to the real GATT
The textiles and clothing sector has been governed by a system ofquota controls - affecting the exports of developing countries toindustrial countries - for more than 30 years. The MultifibreArrangement which provides the current framework for the systemhas been in place since 1974. The Uruguay Round may be expectedto lead to the progressive phasing out of the MFA, and othersimilar restrictions, over a period of probably ten years.
This does not mean that trade in textiles and clothing will becompletely free. It does mean that the same rules will ultimatelyapply as apply to other sectors.
Fairness for farm trade
The draft agreement on trade in agriculture has four components.The first three represent a programme of commitments for reformwhich will lead to substantial changes in policies but very gradualchanges in effective support for farmers.
The first element is a commitment to reduce domestic support foragriculture - and, in particular, to shift that support from paymentsrelated to production to direct income support for farmers. Thesecond, will require a gradual reduction in the level of bordercontrols on agricultural imports - with current non-tariff barriersbeing "tarifficd" to ensure transparency and predictability. The thirdelement sets commitments to reduce both the national budgetaryexpenditure on subsidized farm exports and the actual volume ofsuch subsidized exports.
A fourth part of the agricultural deal will he an agreement on theuse of regulations related to animal and plant health and safetystandards. This should result in an overall improvement and someharmonization in the use of such standards while ensuring they arenot used as arbitrary and unjustified barriers to trade.
Trading creativity and invention
The intellectual property protection, covers matters like patents.copyright, trademarks, integrated circuit layouts, trade secrets,geographical indications and appellations of origin. The Uruguay
Round agreement on intellectual property will create or reinforcejointly agreed standards of protection in all these areas. It willapply GATT principles, like non-discrimination, equality oftreatment and transparency, to that protection.
Other important aspects of the "TRIPS" deal include provisions toenhance the enforcement of intellectual property rights at thenational level and the establishment of an international system ofdispute settlement.
Among other things, the agreement will give governments a muchbe ter opportunity to combat trade in counterfeit goods.
Reforming the institution of GATT
There are three major institutional agreements in the final package.The first seeks to streamline and give more teeth to the dispute-settlement procedure. Some reforms have already been introducedduring the Round, but a final package should provide even clearertimetables and deadlines, ensure more automaticity in the process(thus, preventing bIockages), and improve the implementation ofadopted dispute panel reports.
The Trade Policy Review Mechanism was introduced into theGATT on a provisional basis in 1989 and should be confirmed atthe end of the Round. For the first time, it has permitted theGATT to undertake comprehensive, detailed reviews of the tradepolicies of individual members. Thirty reviews have already beencompleted.
Finally, a new Multilateral Trade Organization is envisaged toprovide the institutional framework for the implementation of allthe Uruguay Round results. Thus, it will subsume the GATT(including the various non-tariff agreements of the Tokyo Round)as well as taking under its wing the agreement on intellectualproperty and that on services. It is also expected to operate anintegrated dispute-settlement system.
At the last meeting of the Trade Negotiations Committee, on 26November 1992, Arthur Dunkel has proposed that governmentsagree that substantive negotiations in Geneva be re-activated witha view to achieving a successful political conclusion of the UruguayRound before the end of 1992, in the light of the understandingreached between the United States and in the Commission of theEuropean Comities and basing himself also on intensiveconsultations he had carried out with participants in the UruguayRound.
The early 1992 four-track approach remains valid as to the overallstrategy for concluding these negotiations: 1) negotiations onmarket access, (2) negotiations on initial commitments in services,(3) legal coherence of the Final Act, and (4) adjustment of thepackage in certain places. Two basic concepts underpin thisapproach: (1) the concept of globality imposing inter-linkagesbetween each of the four tracks and parallelism among them, and(2) the concept that nothing is final until everything is settled.
A. Dunkcl recognized that it would not be possible to formallyconclude the process in the next weeks regarding the negotiationson market and on initial commitments in services. However, thisshould not prevent participants from moving rapidly to a stagewhere the overall shape, content and value of the tradeliberalization package in goods and services could he clearlyassessed.
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Selected bibliographical referent=
WORLD-TRADED SERVICES, THE CHALLENGE FOR THEEIGHTIES. Foreword by James D. Robinson III, ChairmanAmerican Express Company Inc., 222 p, 1984, Published by ArtechHouse, 685 Canton Street, Norwood, Massachusetts 02062, USA,Telephone (617) 769-9750, Telex 951-659, FAX (617) 762-9230.
SERVICES, THEIR REGULATORY AND POLICYFRAMEWORK IN THE LIGHT OF THE EMERGING"INTEGRATED SERVICES DIGITAL NETWORKS" (ISDN), inProceedings of the Pacific Telecommunications Conference 1988.
THE IMPACT OF INFORMATION TECHNOLOGIES ONTRADE INTERDEPENDENCE, in Information Technology andGlobal Interdependence edited by M. Jussawalla and T. Amaki,Greenwood Press, Wesport, Connecticut, 1989,
SERVICES AND SPACE TECHNOLOGY, THE EMERGENCEOF SPACE GENERATED, HIGHLY INTEGRATED GOODSAND SERVICES (IGS), i=in The Emerging Service Economy,edited by 0. Giarini, Services Worldeconomy Series, N 1,
Pergamon Press, Oxford, UK, 1987.
POTENTIAL IMPACT OF THE GATS ON THE GLOBALNETWORK, in Proceedings of the Pacific TelecommunicationsConference. 1992.
THE POTENTIAL IMPACT OF EUROPE 1993 SATELLITEPOLICY ON ECONOMIC INTEGRATION IN THE PACIFICAREA, in Proceedings of the Pacific TelecommunicationsConference 1992.
This paper is strictly personal and does not commit the GATT inany way.
A COMPARATIVE ANALYSIS OF GOVERNANCE COSTS FOR INFORMATION TECHNOLOGY
Ruchadaporn LertphokanontPolicy and Plans AnalystNational Economic and SocialDevelopment Board, Thailand
A. Lee Gilbert, Senior FellowInformation Management ResearchCentre, Nanyang TechnologicalUniversity, Singapore
1. ABSTRACT
A few countries, notably France and Singapore, pioneered indeveloping information technology (I.T.) policy to supporttheir national development goals. Other countries, at manydifferent stages of development, followed. In late 1991, theinterim government of Anand Panyarachum reviewed I.T. policyin Thailand. The authors identify governance costs as a formof transaction costs, propose a dynamic model, and apply it tocompare the effects of policy options in Thailand.
2. INTRODUCTION
This paper identifies an emerging need forThailand to shift its approach to formulating itsnational information technology (I.T.) policieswhich guide the acquisition, development, and useof computers and telecommunications. This needreflects an increasingly poor fit between atraditional approach to development planning andan evolving social and economic context followingits rapid development. While it is a temptationto imitate success, and Thailand can learn fromthe I.T. policies of nations such as Singapore(T), the authors argue that both I.T. policy andits formulation process in the two nations mustreflect sharp differences between their contexts.
3. APPROACHES TO FORMULATING I.T. POLICY
This section addresses two questions. First,how do we discover which features of a specificapproach to formulating I.T. policies determineits usefulness in the national context? Second,how do these approaches resolve conflicting needsfor rational management of complex technology andfor timely responses to unstable external events?
Technology is a dynamic resource. Whennational resources are scarce, the planners whoshape national I.T. policy often do so with littleinput from stakeholders in industry. As I.T. usediffuses, public and private dependence on I.T.rises, and I.T. and other policies become tightlycoupled. And as external turbulence increases,the national I.T. policy response to business andother interests accelerates (2). These linkagesare confirmed by a contingent model of I.T. policyformulation, which is derived from a substantivetheory of I.T. planning grounded in field researchin Asia and North America (3). Its extension hereto the policy arena follows a trend to adaptpractices drawn from corporate strategy to thetask of formulating national policies to gain andsustain international competitive advantage (4).
An approach to formulating I.T. policy is asystem for decision making, with technical andbehavioral features which (to varying degrees) fitthe demands of specific contexts. The task offormulating I.T. policy reflects complexity,variety, and uncertainty in the environment (5).Formulating technology policy demands knowledge ofthe forces acting on enterprises within thenation's industries. At the level of the firm,the focus is on production, the organization ofinter-relationships between physical activitiesand information flows in its "value systems" (6).
Each approach is a unique pattern of activitydesigned to integrate diverse values and interestsin policy choices within a specific context. Eachcontext varies as to turbulence in the environmentand stakeholder interests in I.T. policy choices.
3.1. Environmental Turbulence
Environmental Turbulence (7) represents thedynamic effects of exogenous change on demands forinformation. Turbulence results from change inthe global economic and legal context (e.g.,requirements for environmentally safe products).Other sources include change in global markets(competitors, consumer preferences, or shifts inbargaining power) affecting demand for its goods,shifts in the core technology for its criticalindustries (in auto parts manufacturing, to EDI),or changes in industry scope and scale due torapid exits or entries of firms into its markets.A final factor is abrupt change in the boundariesof these markets due to economic treaties (NAFTA)or the emergence of new nations (Eastern Europe).
3.2. I.T. Heritage
The "I.T. Heritage (8)" describes a nation'scurrent ability to expand automation or redirectinformation flows in its industries. It includesaccess to technology such as computers, networks,and systems software. Human resources to plan,manage, develop, or operate I.T.-based innovationsare essential. The national inventory of currenttypes of I.T. applications is the base for furtherdiffusion. The appropriateness of current policygoverning acquisition and use of I.T. (e.g., itspublic tendering traditions, intellectual propertyand liability laws, etc.) and public support for(or opposition to) I.T. use are subtler factors.
Figure 1 A THEORETICAL MODEL OF IT POLICY
hihMIDDLE-Oil INTEGRATED.style is rational .style is negotiationdata-intensive -time- intensive-high complexity -low certainty.low risk -very high risk
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style is mixed.low complexityhigh certaintylow stakes
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ENVIRONMENT&
1601:_a
.style is learning-information-intensive.high stakes.contained risk
TOP -DOWN
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3.3. The fit between context and approach.
The model in Figure 1 defines the context forI.T. policy as a function of these two variables.It models the hypothetical relationship betweenthe decision context and four generic approaches(Middle-out, Reactive, Top-Down, and Integrated).The model suggests that while Top-down planningmay succeed in turbulent contexts, it will becomeineffective as dependence on I.T. increases (9).
Technology and technical change drive theeconomic structure of production, generating newopport'lnities for trade, increasing internationalcompetitiveness, and accelerating national incomegrowth. Economic development applies technologyto efficient use of available resources, expandsthe available range of goods and services, andultimately affects stakeholders in development.
4. I.T. AND TELECOMMUNICATIONS POLICIES
Computers and telecommunications are criticalto international competitiveness for countries aswell as firms. The development success stories ofthe last two decades portray building capacity toabsorb modern technology and integrating it fullyinto production and service sectors. Successesfollowed policies which defined clear goals, andchanneled scarce resources toward those targets.
4.1. The Dynamics of the Thai I.T. Policy Context
The need for a new approach to I.T. policyformulation stems partly from changing nationalaspirations geared to economic restructuring.This will rapidly lead the nation toward increaseddependence on its computer and telecommunications-based I.T. services. The urgency of this need forchange reflects a pattern of lagging developmentin I.T. capacity and capability (espec:.ally in itscritical telecommunications sector), shifts in theeconomic development roles of the public andprivate sectors, and an approach to policy makingwhich may exclude future stakeholders.
4.1.1. A new role as a regional economic hub.
For many decades, South East Asia was aleading source of agricultural products to theregion and the world. However, now the role ofagriculture as the leading sector in South EastAsian development is in decline. The Asian NIEssucceeded by adopting economic policies to promoteindustry and services as leading sectors. Mostcountries in the region seek to transform theireconomies in this manner. Thailand also sees anopportunity to become a regional economic hub.
Three factors enhance its claim to this role:First, its geographic location in the IndochinaPeninsula, surrounded by high population densitycountries, is suitable for a business centre.Second, Thailand's fairly large and diversifiedproduction base in all sectors, combined with itsdomestic market size (about US $ 56 million).More significant is the GNP per capita of about1,400 US dollars, an indicator of consumerpurchasing power. Third, its open economy andsociety, characterized by a free market economy,political support for the leading role of theprivate sector, fiscal discipline, and soundmacro-economic policy. These modern managementfactors blend with a dynamic tradition as anassimilative and racially harmonious society.
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However, Thailand faces increased competitionon two fronts in international trade. Buyers indeveloped economies are moving to technologicallysophisticated, higher value-added, higher quality,and differentiated products. Automated methods ofproducing labor-intensive products (now export...adby Thailand) may restore the comparative advantagelost by OECD economies. Technological advances innew materials may reduce demand for Thailand'straditional natural resource-based commodityexports. Meanwhile, some less developed nationsoffer cheaper labor, are now more export oriented,and compete far more intensively in these markets.
4.1.2. Thailand's structural transformation.
The structural transformation of the Thaieconomy over the past two decades reveals four keytrends: accelerating production transformation, amore diversified economic structure, reorientationfrom import substitution to export for production,and steady shifts in the roles of the governmentand the private sector in national development.
Structural shifts from agriculture to industryand services reflects production transformation.The agricultural share of GDP fell by half, from25 percent in 1975 to about 12 percent by 1990.The manufacturing share of GDP rose from 20 to 26percent (1°). The trend to globalize manufacturingoperations, along with increasingly time-basedcompetitive practices ("), will increase thedependence of this sector on I.T. capabilities.
A more diversified economic structure resultsfrom more varied agriculture production, enablingexports of non-traditional agricultural products(such as fruits, vegetables, and flowers) and fromhigher value-added products. Dramatic structuralchanges in industry shifted output from resource-intensive to labor-intensive activities. Thisdemonstrated the flexibility of Thai enterprisesand their ability to exploit emerging comparativeadvantages. In services, wide-ranging financialliberalization and deregulation measures (e.g.,interest rate and exchange control liberalization,promote Thailand as a regional financial center.Establishment of the Bangkok International Banking(BIBF) offshore banking facility places Thaibanking on an equal footing in terms of tax andregulation to other world financial centers. Allsuch information-intensive business services areincreasingly dependent on their I.T. capabilities.
Manufactured exports, whose share of totalexports rose from 36 percent in 1981 to 74 percentin 1990, reflect a shift from import substitutionto export orientation, and an increasingly open
(12)and international Thai economy The economicefficiency of any trading enterprise is intimatelylinked with its ability to acquire and disseminateinformation through telecommunications services.
4.1.3. Shifting national development role ofthe government and the private sector.
The socialist regimes are learning that marketeconomies process and transmit more informationthan do their centrally planned counterparts. Anefficient market minimizes information asymmetriesto reduce transaction costs. Thailand's publicsector was the prime mover for its developmentover the 25 years to 1990. During the Sixth Plan,guvernment transformed its role from controllerand regulator of economic activity to promoter andfacilitator: private interests assumed the lead.
Its policies since May 1990 focus on boosting freecompetition in the country's economic system, onliberalizing foreign exchange, developing foreigncurrency markets, floating domestic interest ratesand oil prices, and liberalizing trade policies.
4.1.4. Inadequate telecommunications services
Telecommunications capacity is inadequate.Public agencies monopolize delivery of most Thaitelecommunication services. Constraints on publicinvestment force these agencies to rely largely onforeign borrowing to fund new capacity. Theprivate sector, hampered by legal constraints,rigid rules and regulations, and complicatedoperating procedures, cannot readily invest inservice provision. The weak investment climatedelays much-needed new capacity, and thus slowsdevelopment of those sectors of the economydependent on telecommunications services.
Telecommunications service quality fails tomeet current needs. These needs (e.g., efficientand effe,.tive international communication systems)evolved in response to rapid economic developmentand technological progress. At a policy level, nocentral body coordinates individual networks intoa national system. At a service delivery level,the Communications Authority of Thailand (CAT) andthe Telephone Organization of Thailand (TOT) havepoor coordination, overlapping responsibilities,and duplicated services, yet do not compete (13).
Telecommunications pricing in Thailand isneither flexible, responsive, nor economicallyefficient. Pricing is a political decision,unrelated to production costs. Despite rapiddemand growth, certain communications services aresubsidized. Also, the quantity and quality ofpersonnel in charge of basic service delivery areinadequate, especially engineers, technicians, andadministrators. This human resource shortagehinders service expansion and new development.
4.2. Development Planning in Thailand
While all six national development plansissued by the Thai Government between 1961 andtoday focus on different issues, each results fromthe central planning process administered by theNational Economic and Social Development Board.
The First Plan (1961-1966) promoted privateinvestment, emphasizing industries using domesticraw materials or substituting for imports. Thisplan restricted new manufacturing activities bypublic enterprises. The government focused publicinvestment on infrastructure, especially todevelop transportation and power capacity.
The Second Plan (1967-1971) continued thebasic emphasis cf the first plan. Main additionsincluded promoting employment-generatingindustries, encouraging joint ventures betweenThai and foreign investors, and supporting small-scale cottage industries.
The Third Plan (1972-1976) emphasizedcorrecting the balAnc-,-of-paymcnts difficulties.It promoted exports though duty exemptions andtax breaks. Equity issues received attention,such as " investmen'. promotion zones" outsideBangkok. The government encouraged links betweenagriculture and industry and promoted its laborintensive, small scale Industry in rural areas.
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The Fourth Plan (1977-1981) expanded thesethemes. The trade regime remained protectionist,promoted inward investment, and supported exportsvia fiscal incentives, guarantees, and subsidizedloans. The Export Servi,le Center, which assistedexporters with marketing and disseminated productinformation in overseas markets, was a key Thaiinstitutional development.
The Fifth Plan (1982-1986) focused onrestructuring existing industries, and creatingnew industries that would be more efficient andcompetitive in foreign and domestic markets. Thegovernment intended to promote export industriesby improving incentives and removing variousobstacles to exports, and to promote small-scaleindustries and industrial decentralization. Itpresented plans to decentralize industrialdevelopment, develop basic industries, and to setup a systeM to develop basic industries related todomestic resources. This was also the first planto emphasize telecommunications services.
The Sixth Plan (1987-1991) continued along thepath toward modernization, emphasizing exportpromotion, marketing, efficiency and productivity,raising standards of quality in production, whileimproving industrial technology. Policies werefor the first time revised in mid-plan, to addresstrade and current account deficits and a wideningsavings-investment gap. Budget for infrastructureincreased as a result of this 1989-1991 review.
The Seventh Plan (1992-1996) will seek toovercome constraints to future development, byexpanding basic services, capital mobilization,and rewriting obsolete rules (14). This plan willease constraints and restructure national tax,financial, and capital market systems forinternational competitiveness. The governmentwill continue its liberalization policies tofacilitate the leading role of private businessoperations in industrial development and foreigninvestment. Protection of domestic industry willdecrease. The plan proposes measures to raiseproductivity and the quality of export products toenhance the competitiveness of Thai industries.
PolJcy support for technology transfer is arecent diw.enrion of Thai development planning.The Seventh Plan hopes to lay a foundation for thebasic scientific development needed to absorb,adapt and apply imported technologies. To supportcompetition by its private sector in internationalmarkets, the plan relaxes rules and regulationsfor greater flexibility and to encourage inwardflows of technology and capital. It encouragesprivate sector participation on the basis of jointinvestment in state enterprises. Not all of thesechanges can be concurrent. Thus, one key task forI.T. policy planning and for the subsequentimplementation process is to mediate the dialoguebetween the future stakeholders in these changes.This is essential for I.T. policy in general, butcritical for its telecommunications element.
4.3. Role of Computers and Telecommunications
The computing and telecommunications elementsof I.T. work together. However, each plays itsown unique role and presents different challengesfor development. The private sector meets nearlyall demand for computers and software to processinformation. Vendors differentiate their largercomputer systems (which are expensive for the
A 4
work they do) to high value-added types ofapplications (e.g., running a manufacturing, bank,or airline database). Minicomputer systems forgeneral use are differentiated mainly by softwareand are more economical. A retail commodity,microcomputers generate strong public demand forcomplementary products, particularly for softwareand training in local languages. The low cost ofcomputing hardware, the ease of access tocommodity software, and the presence of a growingcomputer industry in Thailand enabled a rapidincrease in national computing capacity.
In contrast, only state enterprises (with fewexceptions (1") now operate communicationsservices in Thailand. Although telecommunicationsinfrastructure is a prerequisite to developingother sectors of the economy, Thailand finds itdifficult to add services or increase capacity.Also, a lack of provider coordination leads toincompatibility and non-interoperability problems,such as the lack of a Thai language standard (16).
5. A TRANSACTION COSTS PERSPECTIVE OF GOVERNANCE
A nation's ability to compete for income andinvestment rests largely on the efficiency andeffectiveness of private organizations operatingwithin its borders (17). Natural endowments orother assets which are immobile across nationalboundaries are not a primary source of economicadvantage in a global economy. Organizations addvalue to location-specific resources, and theircompetitive advantages stem from effective use ofendogenous and exogenous resources to reach goals.Policies to build sustainable national advantagemust raise the long-term value of the nation'shuman and organizational assets, while reducingnon-productive costs associated with their use.
Strategy theorists identify six sources oftransaction costs: 1. Bounded Rationality (thelimited organizational capacity to acquire,process, and use information); 2. Opportunism(self-seeking behavior combined with guile);3. Complexity and Uncertainty; 4. Small NumbersRelationships (as in monopoly and oligopoly);5. Information Impactedness (the distributionasymmetry of knowledge); and 6. Asset specificity(to the requirements of a specific transaction).The sources of transaction costs are variousdifficulties present in the exchange process (18).
Governments influence transaction costs fortechnology transfers. Well-designed institutionsand organizations enhance individual capacity toprocess information. Government technology policycan reduce the uncertainty specific to technologytransactions (19). It may also influence theethical and legal standards for transactions.Government agencies can improve the distributionsymmetry of knowledge about the availability,performance, and terms of trade for technology.
The systems-based Control-Intelligence model(20) in Figure 2 maps transaction costs into staticand dynamic activity types for an I.T. innovationcycle. Intelligence (41) refers to sources ofinformation for technology transfer decisions,while the Locus of Control (22) identifies decisiondomains. The two constructs bound the four cellscontaining behavior affected by technology policy:
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Figure 2: the Control-Intelligence Model
SOURCE OFINTELLIGENCE:
LOCUS OF CONTROInternal External
Technical Create, Produce,Technological activ ties <-ACOUISITION and Distribute
supporting Use B1 A Raw Technology
OCCUPATIONAL U TECHNOLOGY POLICIES I INDUSTRIALSAFETY LAW T Target Technologies PROPERTY
U R80 Budgets REGIMEA Technology
Information FOREIGN
Standards INVESTMENTPOLICIES
LABOR LAWLabor-management
relationships A
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Wage structures D MANPOWER POLICIESA Technical Education
IMMIGRATION LAW P Adult EducationT Vocational Training
ANTITRUST LAW A
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O PRODUCT LIABILITY LAW
Application 7:71 D Law, Policy, i.
Core Activities-INITIATIVES-, Society: theof Organization End-Use Context
Business
TAXES
FISCAL
POLICIES
PUBLIC
EDUCATION
The C-I model differentiates between staticand dynamic activities in the I.T. innovationcycle. Activity within a single cell (e.g., ascomputer operations in cell B, or marketing incell C) influences system performance, but not itsstate. Technology transfer or other state changesare the dynamic activities on paths between cells.ACQUISITION (technology scanning, selection andtransfer, between cells A and B) is a transactionbetween source and receiver. Design and use ofinformation technology requires MUTUAL ADAPTAT:nI.(23) between technological (cell B) and corebusiness (cell C) activities. INITIATIVES mustalter organizational relationships with externalentities such as end users or suppliers (24) togenerate strategic benefits. This involvestransactions between cells C and D. GOVERNANCI,meditates power relationships between entities.Cross-domain activities generate transaction c..L.tafor exchanges with external entities (25), for
26),internal integration activity t26), forgovernance activities, as sapped to the sodel inFigure 2. The next section applies the model taanalyze how I.T. policy (Governance) influencestransaction costs for I.T. Acquisition, MutualAdaptation, and Initiatives in Thailand.
5.1. ACQUISITION AND GOVERNANCE COSTS
Technology acquisition involves searching foiappropriate solutions and sources, negotiating t,reach terms of transfer favorable to br -th parties.and completing legal and financial aspects of '.hetransaction. Government may provide or encourageservices to improve the efficiency of techn:,gytransfer activities. Several governments in theAsia-Pacific region collect and offer informationabout available technology, and a few offer otherservices to assist organizations operating withintheir borders to acquire and use new technology.
5.1.1. Reducing Technology Acquisition CostsAs its capability to develop technology is
limited, Thailand must continue to import variousforms of technology. Large-scale industries andstate enterprises, import equipment and materials,and rely on high technology from overseas. Theyhave the capacity to acquire technology, but may
not recognize the need to build local capabilityto select, acquire, and absorb new technologies.Small and medium-scale Thai enterprises (SME)often have weak capital resources, poor access totechnology information, and inadequate bargainingskills. These factors raise transaction costs foracquiring new technology to unacceptable levels.
5.1.2. Reducing search and transfer costs
Thailand has several programs which providetechnology information. The services include theDepartment of Science Services (DOSS) providinglibrary services for public and private users, theinformation section of TISTR catering toresearchers, the Thai-Japan Technical PromotionAssociation (TPA) supplying practical engineeringinformation to the manufacturing sector, theThailand Industrial Standards Institute (TISI)disseminating information on internationalstandardization activities, and a few specialisedinformation units such as the Metalworking andMachinery Industries Development Institute (MIDI)and the MOSTE Technology Transfer Center. A fewprivate organizations, such as Siam Cement, haveorganized internal technology information centres.
It may be necessary to differentiate servicesto specific industries and to their levels ofindustrial development, as technology cost andperformance depend largely on the context for use.The effectiveness of current Thai efforts isunclear. Few services are comprehensive, and asmost sources are passive holders of information,the information may not be current. This is aserious problem, as the features of a technologyand the performance of sources change over time.
5.1.3. Subsidies for consulting services
Another intervention, used in Singapore withsome success, is to subsidize consulting serviceswhich offset the information asymmetries inherentin technology transfer. The Singapore EconomicDevelopment Board reimbursed SMEs for up to ninetypercent of their cost to engage a consultant toassist in I.T. planning and acquisition. Thailandpromotes I.T. use by small and medium enterprisesthrough the Technology Transfer Center (TTC) ofMOSTE and the University-based Unisearch. TTCprovides receivers information about sources, butnot about the technical or legal implications oftransfer. Unisearch will act as a match maker tolink the private sector with consulting firms.The parties to transfer pay all consulting fees.
5.1.4 Concessions to technology sources
A government desiring local market access to aspecific technology may find the foreign sourceunwilling to commit the assets necessary to bringin the technology. The Singapore TradeNet casedemonstrates that it may be possible to negotiateeven with a powerful source (IBM) (27).
5.1.5. Supervising and monitoring sources
A government may choose to protect local firmsfrom opportunism, or to raise the standard of thelocal technology market. Singapore, actingthrough its National Computer Board IndustryDevelopment Programme, took the latter course.Thailand relies on supervision to reduce buyertransaction costs. Its TTC and Science andTechnolc3y Development Board (STDB) support theprivate sector by supervising and monitoring
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technology sources, and by assisting local firmsto acquire foreign technologies.
5.1.6. Technology planning services in context
Organizations engage external consultants toassist in planning. Consultants should develop afull range of planning methodologies, then use adiagnostic tool to ensure a good fit betweenmethodology and the client context. In 1992, theNational Science and Technology Development Agency(NSTDA) set up the industrial Consultancy andTechnology Development Services program to helpsmall and medium sized industrial enterprisesimprove productivity and upgrade product quality.NSTDA offers a range of services from managementadvice to technology research and development.The NSTDA budget absorbs the major program cost.
The STDB Diagnostic Research Design Service(DRDS) assists industrial firms in identifyingproduction problems and serves as a mechanism tolink consulting services, research organizationsand other STDB activities with producers. Thisfundamentally important program has been delayedby start-up problems. The Support for TechnologyAcquisition and Mastery Program (STAMP) providestechnical, managerial, information and financialsupport to Thai industrial firms to build theirexpertise and experience in the acquisition andassimilation of technologies important for theircontinued success and growth. This program hasbeen praised by some external review missions (28).However, its coverage and linkage to otherprograms was still limited.
5.1.7. Technology demonstrations and comparisons
Demonstrations effectively convey tacitinformation. Comparisons demonstrate the relativeperformance of alternative choices, and clarifythe needs and preferences of receivers. The MOSTECAD-CAM Centre, equipped with several sets ofcomputers, plotters, graphics tablets and otherspecialized tools, is a facility designed toencourage demonstrations. Vendors may use theMOSTE centre to display their CAD-CAM software andperipheral devices, and also to train customers.
5.1.8. Renting technology for short-term trailsAccording to the theory, renting reduces
information asymmetry and leads to a more gradualtransfer of assets from source to receiver. Inpractice, renting or leasing is inefficient whencosts for technology installation and adaptationare high, if local capability to assess, select,adapt and improve technology are weak, or when itwill increase other transaction costs (e.g., whereprovisions for protecting the property rights ofthe source are inadequate). In the Thai case, theinadequacy of intellectual property laws inhibitsthe ability of sources to offer short-term trials.
5.1.9. Training receivers in negotiations
Receivers are able to specify the desiredoutcome. They may be unable to negotiateeffectively with more experienced teamsrepresenting the interests of the multinationalcompanies which are the source of informationtechnology. Receivers can acquire fundamentalnegotiations theory and technique in properlydesigned training courses. The Technology Transfercenter at the Ministry of Science, Technology andEnvironment offers basic training in negotiations.Few Thai universities include courses on
negotiations in their curricula while even fewerThai law schools offer in-service training topracticing members of the bar, or to managers.
5.1.10. supporting receiver procurements
For many international technology transfers,skills gaps between technology source and receiverare wide. While a receiver may acquire foreigntechnology only once, sources often have extensiveoperating experience in overseas markets. Few ofthe foreign firms operating in Thailand activelytransfer technology to local firms or build localsupplier skills. They have been less active thanexpected in providing technical assistance toreceivers. Language is also a barrier. A recentstudy of several international transfers involvingSouth East Asian receivers and OECD sources foundEnglish to be the language for technology transfernegotiations and legal agreements in every case.This implies transaction costs may be higher(because of misunderstandings and failure tooptimize negotiations) when local lawyers do notreceive legal training in the English language.
5.2. INTEGRATION AND GOVERNANCE COSTS
Government can help receivers reduce cost ofuse in two ways: supporting increased efficiency(disseminating methods to consume fewer resourcesor improve the effectiveness of their use), or byassisting the reciever to allocate its use ofresources to a wider set of uses or users. Also,a policy which shifts integration costs out andbenefits forward may support innovation, as manycosts for using technology are immediate, whilethe stream of benefits emerges more gradually.
5.2.1. Subsidies for training and education
Informed buyers are the basis of an efficienttechnology market, while trained users enable theeffective use of technology following acquisition.Public subsidies for training in new technologiesare justified because many of the resultingbenefits are public. Thailand urgently needsforeign expertise to rapidly strengthen its S&Tmanpower development. Thailand is beginning toinvolve the private sector in strengthening highereducation institutions, short courses, al.d in-service training programs, and to improve on-the-job training for technical employees. Currentefforts to develop new technical universitiesreceive support from the Federation of ThaiIndustries (FTI) and the Board of Investment(BOI). The King Mongkut Institute of Technologyestablished specialized training programs forindustry and has explored the possibility ofsetting up foreign-assisted training institutes.MOSTE national centers offer specialised technicaltraining courses. These efforts will not fullymeet the steadily growing demand for industrialskills, and are not focused on building the skillscritical to developing the national I.T. Heritage.
5.2.2. Low interest loans for innovators
A government may reduce transaction costs forreceivers by offering low-interest loans to helptarget firms acquire specific technologies. Mostincentives in Thailand, such as the TechnologyTransfer Center's Revolving Fund (MOSTE) and thenewly established Industrial Finance Corporationof Thailand (IFCT) program, focus on research anddevelopment. Since 1989, the Board of Investment(BOI) has allowed firms to bring in machinery andequipment tax-free for research and development
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use. A major problem is a lack of awareness amongsmall and medium-sized local firms of the need forin-house technological research and development,partly due-to the current industrial structure anda lack of local competition. Usually, such firmslack the in-house capabilities needed to performdevelopment. Therefore, efforts to raise thetechnological awareness of local firms andstimulate them to undertake research will not besuccessful without other technological upgradingefforts foreign technology assimilation, qualitymanagement and in-service training.
5.2.3. Aligning Taxes with Technology Needs
The Thai personal computer industry, hamperedby tariffs on components which were higher than oncomplete systems, flourished only because manybuilders smuggled in components. In effect, thepolicy discouraged local firms from learning tobuild computer systems from a mixture of local andimported components, inhibiting the transfer oftechnology. The government recently reducedimport duties and taxes on computers to promotecomputers use in business and industry.
5.2.4. Building technology management skillsThe field research suggested that external
advisory services which build internal capacity toimplement and manage technology are superior tothose which simply solve technical problems. Themore successful institutions seem to be industry-focused centers which provide information onsources of technology, quality, prices, purchaseconditions, and which may also provide advice anddisseminate knowledge about evaluating, selecting,and negotiating for technology.
5.2.5. Adapting technology to local conditions
Technology must fit the specific environmentin which it is used. As both the environment andthe technology are dynamic, a developing country'stechnology strategy must facilitate the cheap andeffective acquisition of foreign technology andits adaptation to local conditions. The enablingtechnology in the case of information technologyis computer software. It is software that allowsus to use a general purpose microcomputer for aspecific task and that provides a local languageinterface for non-English speakers. It followsthat a critical target for I.T. policy is to buildup the stock of programmers and systems analystswho will adapt I.T. to the local context.
Because hardware is a commodity, the abilityto produce it represents a market opportunityrather than a development goal. In Thailand, fewprivate firms do R&D, and the R&D infrastructureconsists mainly of publicly supported universityand government laboratories. Given its scarcityof scientists, Thailand might focus its short-termefforts on acquiring foreign technology relevantto its conditions, then on using and diffusing itefficiently. That means giving a high priority tofocus resources on acquiring, using, and diffusingforeign I.T. hardware, versus local development.As technology is dynamic and constantly changing,Thailand must also strengtnen local capabilitiesto assess, select, adapt, and improve technology.
5.2.6. Pooling infrastructure for scale economiesTo improve services offered to travel agents
through their computerized passenger reservationssystems, several Southeast Asian airlines formed a
joint venture to share scarce management andtechnical skills, amortize the more than $200billion dollar cost of developing software over alarger base, and spread the fixed costs of runningthe core computer system and telecommunicationsnetwork. However, internal pressures forced ThaiInternational to abandon the Abacus consortium,with negative effects on its market presence (29).
Thailand's Customs Department will soon launcha pilot Electronic Data Interchange (EDI) projectto automate Customs procedures. Application levelstandards are a basic but critical requirement forsuccessful EDI. Because all international tradeparticipants are handling essentially the samedata types (names, addresses, dates, places,quantities, etc.), it is mandatory to specifystandards for shared data. Failure to organize apreliminary project to clarify such issues betweenthe stakeholders will limit the long-term value ofany EDI-based infrastructure project.
5.3. INITIATIVES AND GOVERNANCE COSTS
The transaction costs issues here arestraightforward. The information asymmetriesinherent in technology transfer deter innovation.I.T.-based initiatives include product-imbedded (amicroprocessor to prevent toast from burning orthe front wheel of a motorcycle from locking), andorganization-imbedded I.T. (a network to linkeconomic activities). The focus of this paper ison the latter application type, which has greaterimmediate relevance in the policy arena.
5.3.1. mediating industrial property rights
Receivers are often unable to determine thevalue of a new technology until it is in place.Ideally, local firms should be able to experimentwith new technology without making a long-termcommitment. However, opportunism comes into play.Much technological content is tacit in nature, andexposure to an advances technology often leads toan irreversible transfer. Sources are reluctantto lose their property rights in technology, whichare the basis of their income. Sources will notenter local technology markets if the legal regimeprovides inadequate protection. A property rightsregime in the public interest must balance theneed of sources with those of receivers over time.
Intellectual property is protected throughpatents, trademark, copyrights, and trade secrets.Thailand is not party to any international patentconvention, while the Thai intellectual propertyregime does not adequately protect foreign ownersof technology. Patent protection is availableonly to nationals of Thailand or of countries withwhich Thailand has reciprocal agreements regardingpatents. If granted a patent outside of Thailand,an invention is unpatentable, and foreign patents,inventions, and designs do not receive protectionIn Thailand. The Copyright Act of 1978 does notspecifically protect computer software (30.
Thailand does not have special laws to protecttrade secrets, the propriety, secret, often tacitinformation related to the way firms manufactureproducts, organize production, or attain quality.This reduces incentives for producers to invest intechnological improvement. For Thailand, theabsence of adequate legal protection for tradesecrets may be more important than the absence ofpatent protection over the near term.
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5.3.2. Public campaigns to increase acceptance
The Singapore case clearly demonstrates thepotential of propaganda as a tool to acceleratethe diffusion of computers and telecommunicationshardware to organizations, personal computers tohouseholds, and I.T.-based skills to individuals.Although Singapore is unique in many aspects,Thailand could adapt such tactics to increasepublic acceptance of I.T. in their local context.This might be an effective tactic to acceleratethe pattern of I.T. use in the public sector.
5.3.3. Setting (and enforcing) product andprocess standards
Many government organisations in Thailandengage in standards, testing, and quality control(31). In theory, standards decrease uncertaintyand minimize transaction costs, and thus helpdiffuse technology. However, empirical evidencealso suggests that standards may either encourageor block innovation (32). Thailand, to meet theincreasing quality demanded by its internationalmarkets, must gear the national system of norms,standards testing, metrology, and quality controlto its industrial policy. Establishing a wellintegrated system is a high priority. Althoughthis will be expensive, Thailand can most likelyreceive financial and technical assistance frominternational donors. Thailand must develop aclear policy framework to organize the functionsof this standards system to meet its industrialdevelopment needs.
Some progress is evident. The Standards,Testing and Quality Control (STQC) program of theScience and Technology Development Board upgradedexisting systems. It supports development andimplementation of better and more comprehensiveindustrial standards, and of more coordinatedmetrology and calibration services. It also aimsto raise awareness of needs for improved qualitycontrol activities in the production sector.
5.3.4. Testing and reporting product performance
Product testing minimizes uncertainty, and ifcombined with a network to disseminate results,reduces buyer search costs. Thailand imports mostindustrial products from countries with productdesign standards and testing laboratories. InThailand, the limited public and private testingservices include product certification and variousmandatory checks. Thai labs might cooperate withthose from other markets where technology sourcesoperate. Comparing test results from multiplesources would minimize opportunistic behavior.
5.3.5. Channeling and packaging products
Value-added networks (e.g., air travelreservations systems or TradeNet) demonstrate theuse of I.T. as a channel to reach buyers. Theinitial economic role of the network is to reducebuyer search costs. Sellers may also use thenetwork database to help identify buyer productdesign and packaging preferences. Buyers andsellers thus jointly configure products to meetspecific needs. Such "non-store" electronicchannels distributing differentiated Thai goods ininternational markets would be viable only if thegovernment faced difficult regulatory issues andar.ended its laws to support value-added networks.
5.3.6. Sharing complementary development costsLocal development is efficient when technology
from international sources is inappropriate, tooexpensive, or when the nation has strong researchcapability. Thailand's allocations of resourcesto R&D are still relatively weak compared to NIEsat comparable levels of development. A first steptoward capacity building should be to establishspecific targets, then to rationalize the existingresearch structure for effective use of currentresources. The goal should be to combine economyof scope for development costs with learning byindividuals and organizations. Transaction costscan be minimized by networks composed of producersof complementary goods, with access to markets forjoint products. The resulting flow of economicbenefits could provide the resources required fordevelopment and innovation of new products.
6.0. CONCLUSION
A transaction costs analysis of technologytransfer and use illuminates the policies neededto enable information technology-led development.The confluence between digital telecommunicationsand computers, by reducing interorganizationaltransaction costs, will create new opportunitiesfor trade, enable new production structures, andaccelerate the growth of national income. Thebenefits of information technology-led developmentwill follow policies which minimize transactioncosts associated with acquisition and use of I.T.,and which also minimize governance costs. Theseare the economic, social, and political costs ofthe organizational and institutional evolutionrequired to fully integrate this dynamictechnology into the national context.
Technology-led development requires not onlythe effective use of I.T. as a resource, but theevolution of an institutional framework to guideapplications of the technology toward developmentgoals. Thailand's lack of effective I.T. policyis a barrier not only to the immediate diffusionand use of technology, but to acquisition of therelated technical and management know-how requiredto use technology to keep pace with development inother nations. Developing a set of policies toaddress these issues will require input from abroad range of stakeholders. These include localcommerce and industry, education, public agencies,and labor, and international trading partners.
Charles Perrow notes that systems which areboth complex and tightly coupled are prone to fail(33). One solution is to reduce coupling betweenactions on the technical (closed system) andinstitutional (open system) levels. An integratedapproach to formulating I.T. policy will reducecoupling and facilitate adaptive change.
The paper identifies gaps in the presentnational I.T. Heritage. However, rapid diffusionof all-digital and radio-based communicationstechnologies may create a window of opportunityfor Thailand to upgrade its networks and developnew, high-quality services. In formulating anI.T. policy to seize this emerging opportunity,Thailand must act both wisely and well. Itstraditional Middle-Out approach to developmentpolicy (supplemented by Top-Down intervention)should yield to an Integrated approach, one whichis both negotiations-based and results-oriented.
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REFERENCES AND NOTES TO THE PAPER
1 Gilbert, A and Ruchadaporn, "Information Technology-ledDevelopment: can the lessons be transferred?" Proceedings of
the 14th Annual Conference Pacific Telecommunications Council,
Honolulu, 1992.
2 Bourgeois, L, and Eisenhardt; "Strategic Decision Processes inHigh Velocity Environments,. Management Science, Vol 34 #7,
1988; pp. 816-842.
3 NOTE: Limited space precludes detailed discussion here. See
Gilbert, A; Strategic I.T. Planning: rationality, information
processing, or negotiations? Information Management Research
Centre working paper, Nanyang Technological University,Singapore, 1992.
4 Porter, Michael; The Competitive Advantage of Nations Free
Press, New York, NY, 1990.
5 Alt. W; An Introduction to Cybernetics, Wiley, New York, NY,
6 Porter, M and Millar; "How Information Gives You CompetitiveAdvantage," Harvard Business Review Vol 63 No 4, 1985.
7 Caves R. American Industry: Structure Conduct Performance,Prentice Hall, Englewood Cliffs NJ, 1964.
8 Feeney, D; Competition in the Era of Interactive NetworkServices, unpublished thesis, Templeton College, Oxford, 198C-
9 Gilbert 1992, op. cit.
10 NESDB, National Accounts Division, 1992.
11 Stalk, G and Hout; Competing Against Time, The Free Press, Ns,York, 1990.
12 Thailand's Seventh National Economic and Social DevelopmentPlan (draft guidelines), Bangkok, 1991.
13 CAT and TOT enabling legislation, Royal Government of Thailand.
14 Thurber, C; Development Administration in Latin America Duke
University Press, Durham, NC, 1973.
15 Shinawatra CRC and other operators of special-purpose serylces.
16 "Future: Computerizing Government, Public Sector Essential,.Nation Bangkok, 7 May 1992, p. 7.
17 Porter, M, 1990, op. cit.
18 Jones, G, and Hill; "Transaction Cost Analysis of Strategy-Structure Choice," Strategic Management Journal Vol 9, 1988,
pp. 159-172.
19 Teece, D; "Transaction Cost Economics and the MultinationalEnterprise," Journal of Economic Behavior and Organisation Vo:
I, 1986, pp. 81-96.
20 Gilbert, L, and Vitale; "Containing Strategic InformationSystems Risk: Intelligence and Control," IEEE Proceedings ofHICSS-21, Kona, Hawaii, 1988.
21 Simon, H; The New Science of Management Decision, Harper 8 Row,New York NY, 1960.
22 Anthony R and Deardon J; Management Control Systems (1965) 4thEdition, Irwin, Homewood IL 1980.
23 Leonard-Barton, D, and Kraus, W; "Implementing New Technology,"Harvard Business Review Vol 63 #6, 1985, pp. 41-48.
24 Barrett, S and Konsynski; "Interorganization InformationSharing Systems," MIS Quarterly Special Issue, 1982, pp. 93-105.
25 Williamson 0 The Economic Institutions of Capitalism, FreePress, New York, NY, 1985.
26 Lawrence, P, and 1.:Asch; Organization and Environment Howl..:Business ,ress, Boston, 1967.
27 King, J; S,,gdoote Tradenet Harvard Business Schoc. CaseServices, Boston, 1991.
28 e.g., USAID mid-term evaluation and the World Bank report theprogram as a step toward good investment and technologytransfer decisions.
29 Interview, Mumtaz Igbal, Singapore, October 1990.
30 NOTE: the U.S. is exerting very strong pressure on Thailand toapply its model of copyright protection for computer software.
31 e.g., DOSS, TISTR, TISI and Department of Medical Science
32 Teece 1986, loc. cit.
33 Perrow, C. Normal Accidents: Living with High-RiskTechnologies, Basic Books, New York, HY, 1984.
STANDARDS AND CONVERGENCE: NEW REALITIES
David Allen, Center for Business andGovernment, John F. Kennedy School of Government,
Harvard University, Cambridge, Mass. USA
John Gilbert, Principal, John A. Gilbert &Associates, Ottawa, Canada
1. ABSTRACT
The convergence of telecommunications, IT and broadcasting aroundmultimedia applications adds complexity to the essentialparticipation of users in the evolution of standards fortelecommunications and related IT products and services. This paperoutlines the role of innovation and user influence in an idealstandardization process. Recent activities of internationalstandards organizations to streamline activities and encourageparticipation in standards activities are described. A futurescenario outlines the nature of the growing complexity andmotivations for user interest are ascribed. Theoretical mechanismsfor encouraging greater user participation are suggested for boththe industrialized and the developing worlds.
2. INTRODUCTION
The importance of standards in telecommunications,information technology and broadcasting hasbecome increasingly recognized in recent years.Standards are now being viewed strategically andtheir economic and trade implications are gainingincreased attention. Several papers have recentlydealt with the process, structure and implications ofnational and international information technologystandards enabling policy makers and strategicplanners to gain a deeper appreciation of the issuessurrounding standards. (1,2)
Traditionally restricted to those in the engineeringand scientific professions, interest in informationtechnology and telecommunications standards hasnow extended outside of international and nationalstandards structures and involves economists,political scientists and business experts. The OECD,for example, has undertaken work though an ExpertGroup on the Economic Implications of InformationTechnologies and forecasts possible significantchanges in the standards setting process. In additionconcerns have been expressed as to the role ofsmall firms in evolving information networkdevelopments raising the fear that only large firmsmay be able to bear the learning and fixed costsassociated with IT networks.(3)
Among the miriad of complex issues surrounding thestandards process, this paper addresses two ofparticular concern to the telecommunications andinformation technology sector. These are theinfluence of standards on the emerging open marketplace and the involvement of users in that marketplace in the standards making process.These are particularly important issues as theconvergence of traditional telecommunications,
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computers and broadcasting products and servicesbegins to appear in the workplace and the home inthe guise of new digital multimedia applications.
The paper will describe the market place and the roleplayed by standards in an open market environment.It will provide an overv:.sw of recent developments inthe international standards setting process withemphasis on existing opportunities for userparticipation in the process. It will then outline thechallenge posed by multimedia communications andwill offer theoretical mechanisms to encouragegreater involvement from users affected by productsand services in the open market place.
3. THE MARKET PLACE - THE OPENENVIRONMENT
An appreciation of the strategic, economic and tradeimplications of standards requires an understandingof the market place and the influence of standardson the introduction of new IT products. This raises
questions as to the timing of standards; whether andwhen standards are necessary.
Experience in the telecommunications field has beenmixed.For example, the enormous international effort,extending over a decade, to develop ISDN standardshas only recently produced results in the marketplace. On the other hand, voice messaging emergedas a viable and competitive product in the marketplace without the benefit of international standards.The dramatic public acceptance of facsimile was inpart influenced by standards but other factors mayhave played a greater role including mass userrecognition of a product that ideally met a real need.
3.1 THE IDEAL STANDARDIZATION PROCESS
Now, let's draw a brief picture of the idealstandardization process. Ideal from whose view?Optimized, ideally, to bring innovation into a network
and into society, for its users - on the quickestfeasible basis. Network innovations that improvepeople's lives are one important basis for increasingproductivity, so that we can enjoy better standards ofliving. (Here we will use "network" as a shorthand forthe mix of telecommunications, computer andbroadcast technologies that are emerging). We willfind ourselves coming back to this question of whatwe mean by "ideal"; with the dynamic complexities ofinnovation and standardization, the answer is not asstraightforward as we might like.
3.2 THE OUTLINES OF THE STANDARDIZATIONPROCESS
What are the outlines of the standardization process?It begins with an innovation, in a companylaboratory or in an inventor's garage perhaps. As thenew idea begins to take form, it may have thepotential to unfold along several different paths.Facsimile transmission, actually a fairly old idea, tooka variety of guises. During this part in the processexperimentation with various possible forms of the
new idea is crucial for development of thepossibilities. The emerging new technology is alsolikely to build together new ideas from severaldifferent building block capabilities. Facsimile,again as an example, is built from transmissionschemes, image coding schemes, as well asmechanical paper handling abilities, to tell only a partof that story. Development of the composite - in ourexample, facsimile - may depend on the developmentof a component - such as lasers.
At some point for this innovation, the experimentationhas been adequate to bring forth the mainpossibilities. Now it is time to pick and chooseamong the ideas floated. Particularly if this is anetworked technology, standardization begins.Standards are essential to make the interconnectionwhich underpins a network's function. Even non-networked, standalone computer users benefit whensoftware developers are drawn to a standardizedplatform; this is an outgrowth of theinterdependencies among components and thecomposite.
What can we expect from this point in the process?There are several possibilities, and each onecomplicates the story further.
Typically the new technology, still young in its lifecycle, will be in a fairly rudamentary form. Wideradoption and use should help refine the new tool, togive it a better fit with its users. We may think of this
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continuing evolution in the technology as producingsuccessive generations (while we may see the initialbreakthrough as more fundamental). The G-series offax standards is an obvious case of generationalevolution. Extensibility is a term being used todescribe the more predictable features of this path.
There may be another development however,perhaps even in parallel. The standard may serve asa sort of window that enables significant diversity,it may become a key interface that allows numerousunique applications to be created. To switch for amoment to the Apple Macintosh world for anexample. Apple's Quick Draw standard for graphicsallowed the development of different graphicspackages, each with its own special strengths. Byallowing interface at a key point, the standardcatalyzes its opposite: diversity. Scalability refers toa particular kind of this diversity.
Perhaps more than anything else, the balancebetween the commonalities of a standard versus thediversity that users may need does make thequestion of what is an optimum process especiallyticklish. So far we have seen - after the standard isfirst put forward - diversity across time (ingenerational evolution, but here early generations arediscarded in favor of later) as well as diversity for agiven moment (in separate applications, where thediversity serves differing user needs). We have notfound the homogenous commodity that is theeconomist's ideal (except perhaps if there is a trulystandard product).
There is a third line of development - one that isessentially orthogonal to these two - which we musttake care not to confuse with them. Along withuniversal interconnection as the hallmark of anetwork's function, groups of subscribers will alsowant private sub-networks. This mix of the publicand private is surely one fundamental of networkarchitecture. But though there is some tendency toassociate privacy with diversity, and the public withstandard, we can carefully distinguish thephenomena.
Have we now sketched the end of the process? Notif we want continuing innovation in the network. Afterexhausting the generation and/or the uniquepossibilities, each flowing from the standard, we lookto another, more basic round of innovation. So in factour subject, overall, turns out to be a round, aniteration - a cycle between innovation andstandardization.
'1.1"
3.3 THE USER IN THE IDEAL PROCESS
Where is the user in this ideal process? Clearly, thetechnical innovation is useful only if it becomes asocial innovation. In rough terms there are twophases to a given cycle: the experimentation priorto the standard and the consensus after. Where isthe user, ideally, in each phase?
Conventional wisdom holds that innovative ideas arethe product of a creative mind, with little or no rolefor the consumer. In fact, there is important evidencethat demand does play a surprising role, even in theearly stages of creation (4,5). Despite this, during theperiod of experimentation with possible versions ofthe new technology, users may play a lesser part,though increasing as the time for a standard nears.
In our ideal scenario, in fact, the user plays a crucialpart in the runup to selecting a standard. Only userdemand can make a standard commercially viable, orlucrative. When the applications have a mass market,which are often the case with networkedtechnologies, the challenge is especially clear. Thetradeoffs endemic to standards-making will ramifythrough to the user in a variety of ways. To getadequate feedback from a very large group ofpotential users, on the utility of alternativeconfigurations as they would affect the user, is adaunting task.
Then, after the standard issues? The user needs totake a co-equal role, alongside the suppliers of thesystems. Development, after the standard, is in facta co-evolution - of the technology to fit the user,and of the user practices to take advantage of newlycreated possibilities. The user and his/her toolevolve together, and the user's rote in the processbecomes equal in importance to that of thetechnologist. In the best outcome, people evolvemore productive and better satisfying lives, usingincreasingly well-refined Jew tools. (6)
The point of the shift from experimentation toconsensus is of course a key in the overall process.The move to end experiments and head toward astandard is not ordinarily seen as a discrete decision,but the picture we have drawn here suggests that"gathering such a storm" of opinions is in fact pivotal.User response to the experimental trials is essentialinput to that kind of "decision".
3.4 CONSENSUS
In general, assembly of the consensus necessary fora standard is the principal - and intricate task of thetransition between the two main phases of the cycle.To encourage adequate experiments in the firstphase requires freedom of action and separate pathsfor those involved. But consensus, by direct contrast,will necessitate forming some bonds across the
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fragmented groups. While fragmentation is essentialfor the experiments, those fragments must also holdthe potential for bonds of community thatconsensus will eventually require. Users come latelyto this gathering, and many may not join until later inthe generational evolutions. But user participationmust have the potential to be realized, even atadoption of the standard.
3.5 THE OPEN ENVIRONMENT
What is the "open environment" which is now acommonplace across the industry? That is what wehave called the consensus phase. (Since the notionof open is meant to connote access, the word mighthave been used for the earlier experimentationphase, when the competition of ideas requiresaccess for creative input. But convention has insteadassigned "open" to the constrasting access thatstandards afford, in the later phase).
What does an open environment require? Principallythat consensus be complete. However, firms oftenprefer to continue the monopoly rents that they haverightly enjoyed during the experimentation phase,when the technology was still divided intoproprietary, non-interoperating trials. Whether fullconsensus is implemented and interoperation isreally "open" depends in some large part on how thefirms involved may define their targets. Do theyprefer the higher per unit profits that accrue from theproprietary, non-consensus market? Or, do they seethemselves as part of a process that evolves systemswhich interoperate - so that they find satisfaction ina transition to larger volumes during a consensusphase, though the profits may be less per unit (butprobably not as low as a strict commodity wouldimply)?
Ultimately, an open environment depends for itssuccess on being part of a dynamic process. In timethat will mean foregoing the standard that hasenabled the current round of openness, to make wayfor a future round of more basic innovation. Hereagain the user plays a pivotal role. Only by beinginterested in moving beyond today's non-routinetechnology does the user encourage a spirit ofcontinuing change, and a next round of innovation.
Now, let's turn to some particulars of the standardsprocess. Let's look at the process closer upparticularly as standards making is practiced today...
4. STANDARDS, INTERNATIONAL ORGANIZATIONSAND THE USER
The international organizations most directlyconcerned with standards in the converging technicalfields of telecommunications, information technologyand broadcasting are the ITU, the ISO and the IEC.All three are making considerable efforts to
accelerate their processes and to allow for a moreopen process of participation in the setting ofstandards.
4.1 ACCELERATING THE ADOPTION OFSTANDARDS
Efforts are being made, on various fronts, to makethe standards process more dynamic, rapid andresponsive and to reduce duplicat;on of effort.
ITU's Resolution 2 (Melbourne, 1988), "Approval ofnew and revised Recommendations (7) betweenPlenary Assemblies", which concerns the work of theCCITT, allows for an accelerated process, subject tocertain conditions being satisfied. Both the ISO andthe IEC are committed to speeding up the standardsprocess with IEC having reduced the time forstandards approvals down from three years to 14months (8). All three bodies are encouraging theadoption, where possible, of international rather thanseparate national standards. For example, IEC hasan agreement with CENELEC that no new Europeanwork will be started on a standard if an IEC standardexists or if work has already started in the IEC.
In addition, arising from the work of the ITU'S HighLevel Committee, an Electronic Information Exchange(Teledoc) offers new methods for electronic accessto CCITT-related documents and informationincluding faster electronic handling and output ofCCITT documents. It has been developed by ITUheadquarters for the exchange of information anddocuments between the CCITT and its members.Now under development, it offers, among otherthings, circulars, lists and summaries.
4.2 THE ITU'S HIGH LEVEL COMMITTEE (HLC)
Perhaps the most significant effort, on behalf of theITU, to come to grips with the changing nature oftelecommunication, information technology andstandards is to be found in the report of the ITU'sHigh Level Committee (9) The Report states that theITU's roles in standardization, regulation anddevelopment must be streamlined to keep up withthe pace of change. It proposes an "invigoration ofthe Union's standardization function". Among othersuggestions, the Committee suggests thattelecommunications manufacturers, service providersand users should play a larger role in the decision-making and strategic planning processes of the ITU.The HLC recommends the creation of a newStandardization Sector, standardization conferencesand work programs which would reflect the rapidlychanging needs for standardization in thetelecommunication market-place. The HLCencourages greater private sector and business userparticipation in the standards process. Finally, theymake specific mention of the practice of ITUAdministrations to consult users and other interestsin developing national positions and encourage this
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practice, particularly in respect of the interests ofsmall end users, including individual customers. Theysee a role for users in contributing views on whatstandards need to be developed and in what time-frame.
4.3 USER INVOLVEMENT - MEMBERSHIP
The term "member" has a specific, legal definition ininternational organizations. Fnr example, "member"is defined in the Convention of the ITU and includes,as far as the CCITT is concerned, memberAdministrations of the ITU, recognized privateoperating agencies, scientific or industrialorganizations and international organizationspai ticipating in the work of the study group inquestion. One of these international organizations isINTUG - a user group.
The International Organization for Standardization(ISO) is a worldwide federation of national standardsbodies with 90 members, one in each country.Correspondent members are normally organizationsin a developing country which does not yet have itsown national standards body. Correspondentmembers do not take an active part in the technicalwork but are entitled to be kept informed about thework of interest to them. There were 18correspondent members as of January 1992.(10) TheIEC's members are national committees, which arerequired to be as representative as possible of allelectrical interests in the country concerned.
While user participation may be limited ininternational bodies to members, the possibility forusers to participate exists in national bodies. it ispossible for even small companies to participatedirectly in their national standards organizations or,more likely, through membership in associations whopartipate in national standards bodies. Largecompanies, such as the telecommunicationscompanies and computer firms, may have anexcellent understanding of the potential needs ofcertain user groups since they may also represent alarge potential future market for the company'sproducts. Finally, government representatives attendmany international standards meetings and may haveaccumulated a knowledge of user needs.
The ITU has taken many steps to encouragedeveloping country participation in standards workbut this issue remains a major challenge. The HighLevel Committee report identifies the need toincrease developing country participation as a matterof concern.
5. COOPERATION IN INTERNATIONAL STANDARDSSETTING
There is close cooperation among the 7U, ISO andIEC and between each of them and other
international, regional and national standards bodies.Several significant steps have been taken whichmade it potentially easier for users to understand thestandards process. These are:
5.1 TSAG
The ITU is currently studying the creation of aTechnical Standardization Advisory Group (TSAG)which would, among other things, foster cooperationand coordination and provide advice to assist theharmonization of work with other relevant bodiesinside and outside the ITU.
5.2 COMMON TEXT
ISO and ITU (CCITT) now follow commonprocedures and produce a common text which, tothe benefit of the user, is identical word for word.
5.3 RATIONALIZATION
There has been a rationalization of work in the fieldof information technology as exemplified by the jointISO/IEC technical committee ISO/IEC JTC1, set upin 1987-88. It is interesting, since our focus on thefuture uses digital multimedia as an example, tosummarize those sub-committees (SCs) concernedwith multimedia under JTC1. These are:
SC 6 : Telecommunications and informationexchange between systems;
SC 18: Document processing and relatedcommunication (includes multimedia andhypermedia model/framework);
SC 24: Computer graphics and image processing(Standardization of interfaces, in windowed andnon-windowed environments for:
computer graphics;- image processing;- interaction with and visual
presentation of information.)
SC 29: Coded representation of audio, picture,multimedia and hypermedia information.(Multimedia is defined in SC29 as the propertyof anything to handle several media -synchronization).
The work of this last SC covers the rapidlyexpanding areas of information and entertainment.Typical of , other sub-committees, there has beenintense it Jrnati o nal involvement in SC 29 includingtechnical experts from 15 countries.To furtherindicate the wide area of cooperation, it should benoted that SC29 draws on the coding work of JPEG,JBIG, MPEG and MHEG. (11)
6. NEW REALITIES
The international organizations have madeconsiderable progress in improving both the speedand accessibility to standards making and areincreasingly offering new opportunities for userparticipation. What, then is the motivation for usersto participate, and who might the users represent?
6.1 NEW STAKEHOLDERS IN STANDARDS AND ITPRODUCTS
Users of information technology products andservices are increasingly to be found in thegovernment and social sectors where budgets aredeclining and capital budgets are under constantscrutiny. IT products and telecommunicationsservices are becoming a proportionally higherpercentage of these budgets. Even in the privatehome, IT products are becoming a more significantproportion of an individual's personal property.However, business, social service, government orindividual users are unlikely to have set aside fundsto participate in standards making. Those that wouldwish to do so will find that the standards process isboth highly specialized and costly. With the growingstress on the adoption of international standards, theability to afford the high cost of international traveland living has been added to the need for asophisticated technical knowledge as the price ofadmission to meetings of standard setting bodies.Many standards meetings are long and protracted,take place over a period of years, and are held inhighly expensive cities such as Geneva. In reality,while there has been a growing participation instandards bodies by users, these have, for the mostpart, been highly sophisticated large users.
6.2 INCREASING COMPLEXITY
To further cf.Impound the challenge of userparticipation, the standards setting process, alreadycomplex in the telecommunications, informationtechnology and broadcast and entertainment fieldswill become even more complex as the three areas'onverge. Since the late 1980s, there has been agrowing number of interactive multimedia projectsand new products appearing in the marketplace.Many are aimed at the educational market. Thesewere initially concerned with the convergence at thepersonal computer of three major communicationstechnolog;es print, audio and video. Standards inthese "desk-top" applications deal with things suchas data representation and user interfaces. (12).However, the recent decline in the costs to use highspeed networks, and the offering of ISDN tariffedservices, has introduced lower costtelecommunications and the potential for multimediaat a distance". The emergence now of multimedia
communications applications combining images,sound and data, promises to create a new set ofstandards questions. The end user, the individual,
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will be offered a plethora of options to chose from,and the ability to create a unique informationenvironment to fit his or her needs. All of this willtake place in a multi-vendor environment completewith its mix of international and proprietarystandards. Applications at the desk-top and in thehome entertainment field will place the onus forchoice as much on the individual as on the serviceprovider.
7. A 1998 SCENARIO
Standards making, as mentioned earlier is essentiallya "pre-market" process. To be able to understandwhere we are today in this process, we need to looksufficiently far into the future to be able tohypothesize a reasonable scenario of future productsand services, and yet not far enough to lose thethread of the potential influence of user participationin the standards process. Let's chose a scenariowhich will affect us all - multimedia in the home circa1998. (13)
Now in 1998, digital interactive, multimediaapplications, linked by intelligent telecommunicationsnetworks have entered the North American home.(14) The drivers for these applications emerged fromtransmission sytems (ISDN, cable, standardtelephone) coupled with compression, a shift todigital from analogue and a dramatic improvement instorage devices. Using 1992 industry structuredefinitions we now have access to :
Bandwidth on demand from the telecommunicationssuppliers providing voice, image, fax, data andalmost real time video through an intelligent,interactive network;
A highly sophisticated home entertainment centerfeaturing CD-ROMs with interactive programming;
An interactive broadcasting/cable user controlledprogram delivery system offering a multiplicity ofdigital television, sound, image and data services;
A powerful home computer system offeringinformational, educational, work and entertainmentapplications link:d to other computers via userdefined telecommunications networks. The list offunctions is endless...text, video, image, digitalphotography, audio, database access, paperlessfacsimile, desk-top videoconferencing, multimediainformation retrieval.
7.1 NOT YET THE PERFECT WORLD
Traditional defininitions and boundaries are blurring.Telecommunications, the computer, broadcastingand home entertainment have almost become ahybrid - but not quite. The flat panel display on my
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computer offers a much better display for the type oftext and graphics and the exciting multimediapresentations delivered to me by the broadcasterthan the lower quality I get from my NTSC televisionscreen. My new read/write optical disk drive couldbe useful for all of my multimedia applications, butI'm still looking for the right black box to make someof the connections. The interfaces to some rf theinteractive services and applications still needs work.I get lost retrieving information from some of theservices.
The scenario, and the problems, may be hypotheticalbut the possible conclusions are all too real. Userapplications and user interfaces will need a lot ofattention if the full potential of the multimedia word isto be realized. Definitions and boundaries becomeblurred and responsibilities compounded. Our shortscenario involves all of the standards bodiesmentioned earlier working in cooperation and atspeed. How can the user, even our hypotheticalhome user, play in this game?
8. THEORETICAL MECHANISMS FOR GREATERUSER INVOLVEMENT
There is obviously no single answer, but sometheoretical mechanisms for ensuring a greaterinvolvement into the standards setting process canbe postulated. Two characteristics emerge from theabove discussion. First, the scale of the introductionof information technology (includingtelecommunications and broadcasting) products andservices into the market is large enough to be viewedas a mass market issue. Second, the leap from todayto the mass market, open information world of thelate 90's requires bridging mechanisms. We canprobably postulate further that although the issueaffects the mass market, the number of people whowill in practice wish to participate are relatively feweven if the constraints of cost and expert knowledgecould be removed. The following then are earlysuggestions for bridging mechanisms which wouldbegin to see a wider public appreciation and,hop:fully, bring the mass market user into thestandards development process.
8.1 A LAYMAN'S VIEW
The highly technical and complex nature of specificstandards can mask the essential simplicity of theactual application of a product or service. Theengineer might struggle with the difference indecibels of a clear or unclear signal. The layman willsimply say that it is audible or it is not. The layman'sconclusion is a useful input to standardization and is,of course, already obtained through user trials ofemerging products. Layman's conclusions could beobtained through other fora such as, for example,user "focus groups". Further, a number of sciencewriters do an excellent job of explaining complex
technical matters in popular terms. Perhaps theycould be encouraged to help "demystify" the complexworld of standards and technical innovation.
8.2 INDUSTRY FUNDED INFORMATION SEMINARS
Large companies could fund information seminarsdealing with standards - this could be done under theauspices of the ITU/ISO and IEC to avoid theimplication that companies are influencing thestandards process. User representatives could beinvited to attend these seminars;
8.3 INDUSTRY FUNDED, ELECTRONICALLYACCESSIBLE BACKGROUND PAPERS
Companies could fund the preparation ofbackground papers on standards issues. Thesepapers could be published or made availableelectronically through the information systems nowbeing set up by international and national standardsbodies;
8.4 A WINDOW INTO THE STANDARDSCOMMITTEES
Standards committees and working groups couldopen up their meetings for a session. User groupscould be encouraged to meet with them to exchangeviews on the standards under discussion and theiruser implications
9. DEVELOPING COUNTRIES
Developing countries will undoubtedly need toconsider the implications of convergence andmultimedia applications in their plans. Convincingarguments have already been put forward in papersby experts from developing countries which stressthe importance of standardization in meeting thehopes and aspirations of the developing countries.(15) Each of the suggestions above could be appliedto the developing world, and, perhaps under theauspices of the ITU, given particular attention. Inparticular, holding meetings in developing countries,and offering short seminars on the subject underdiscussion, could focus on particular problems facingthe developing world in the area under discussion.The High Level Committee has alreadyrecommended that the Standardization Bureau of theITU extract and group matters under active studywhich may be of particular interest to developingcountries.
10. CONCLUSION 3
User participation, an essential element in theprocess of standardization and innovation, willbecome more important as telecommunications,
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information technology and broadcasting convergearound digital, interactive, communications linkedmultimedia applications. Informed users will bemotivated to participate as a reflection of the growingbusiness and personal embedded investment intelecommunications and IT products. Internationalstandards organizations have already shown theirintention to streamline standards activities, to permitgreater access and to encourage user participationalthough the role of developing countries remains achallenge. Users and standards bodies now enter aperiod of experimentation as they explore theparameters of this new spirit of cooperation.Technologists need to create a more open andinformed environment while users need to developways of expressing their interests and concerns. Anew consensus can be developed by adoptingbridging mechanisms which allow both communitiesto work together and engage in a more open, needsbased process for the evolution of new standards.The end result could be a more harmoniousintegration of new products with user needs andrequirements to the benefit of both users andindustry.
11. ENDNOTES/REFERENCES
1. Jussawalla, Meheroo and David Lassner, "GlobalTelecommunications Standardization andRegionalism", Proceedings: PacificTelecommunications Council FourteenthAnnual Conference, PTC, Hawaii, 1992
2. Salter, Liora and Richard Hawkins, The StandardsEnvironment for Communications and InformationTechnologies, Communications Canada, Ottawa,1990
3. OECD, Committee for Information, Computer andCommunications Policy, Working Documents,1990-91.
4. von Hippel, Eric The Sources of Innovation, OxfordUniversity Press, New York, NY, 1988.
5. Nelson, Richard (ed) National Innovation Systems:A comparative Study, Oxford University Press, NewYork, NY, forthcoming 1993.
6. Though this is not the place to go into detail, wecan note that users must also go through their ownseparate periods of experimentation andconsensus, sometimes called diffusion andadoption. The implications for rolling-out systemicnew technologies, partic ilarly networks, areprofound.
7. The ITU uses the term "recommendation" ratl .erthan "standard".
8. Raeburn, Anthony. Address to the Ottawa-Carleton
Bard of Trade, Ottawa, April, 1991.
9. "Tomorrow's ITU: The Challenges of Change",Final Report of the High Level Committee toReview the Structure and Functioning of the ITU,Geneva, April, 1991.
10. ISO, Memento, 1992
11. Joint Photographic Experts Group (JPEG);Joint Bi-level Image Experts Group (JBIG);Moving Pictures Experts Group (MPEG);Multimedia and Hypermedia Experts Group(MHEG).
12. Riorden, Katherine. Multimedia Projects andProducts: Final Report, Prepared for the JeanTalon Project, Department of Secretary of State,Ottawa, May, 1990.
13. This scenario draws heavily on Phillips, Dorothyet al, "The Changing Face of Broadcasting:Research Proposals for New BroadcastingServices", Department of Communications,Ottawa. February 26, 1992.
14. Issues of copyright, ownership and intellectualproperty must be ignored in any scenario of thistype. These issues are, of course, of greatimportance and may emerge as the decidingfactor in any consideration of future products andservices. The technological options are alsooversimplified. One could readily add digital highdefinition television, digital radio, links to mobilecommunications and virtual reality to the mixand still not exhaust the possibiliities.
15. Pradhan, Dr. Bishnu D., The Challenges ofStandardisation in Developing Countries", PolicySymposium, ITU, Geneva, October, 1991.
Note: The authors would like to thank officials of theITU, ISO and IEC for their kind cooperation inproviding some of the information and sources usedin this paper.
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EUROPEAN TELECOMMUNICATIONS - NEW DIMENSIONS
L. SchnurrAnglia UniversityCHELMSFORD UR
F. AskEuropean Telecommunications Standards Institute
SOPHIA ANTIPOLIS FRANCE
Abstract
The re-definition of European Telecommunications services in thecontext of the European Community gives rise to the use of new methodsof regulation which incorporate extensively consensus-drivenmechanisms of standards generation and use. The context of thisregulatory environment and the part played by the standards upon whichit relies is set out.
THE ENUREMENT
"Europe is very European": thisstatement sums up in a few words thereality of telecommunications provisionand infrastructure throughout thatcontinent. All recognise that the PTTmonopoly-monopsony environmentoriginated from that region (and wassubsequently exported to Europeancolonies world-wide); the stimulus ofeconomic and social necessity withinEurope subsequently created otherrelated institutions, some now with aglobal context. It is no accident ofgeography that the ITU is based inGeneva.
Europe has undergone in a very generalsense an economic and social evolutionduring the last half-century notexperienced elsewhere; since mid 1940,its commerce and industry has beenrebuilt, and its social rules re-defined. Telecommunications has been amajor component of this post-warreconstruction plan. Since the late1950's, the embryo of pan-Europeaneconomic harmony has grown; today, theEuropean Economic Community as anintegrated macro-National market forcein our world-wide community is areality. Its telecommunications goodsand services penetrate to greater orlesser extent the markets of the worldincluding the Pacific region, andthereby expose internationally allregions to European technology and toEuropean policies which to asignificant extent define and determinethat technology.
The fundamental constitutionalstructure of the European EconomicCommunity is based upon a vastcollection of multilateral agreementsof treaty status, collectively referredto (somewhat loosely) cl "The Treaty ofRome". The glue of economic
interdependence holds member Statestogether: There is no pan-Europeanmilitia to enforce the sustainedCommunity membership of any memberState. Enforcement of Community-widepolicies, regulations, or other rulesrests ultimately with a member Stateitself following agreement with itspartners to adopt and hence (accordingto its national political and legalstrictures) to implement such rules ona national basis.
This environment, of course, sets thecontext and determines the methodologyof telecommunications resourcemanagement as it does for every othercommercial or industrial activity. Inpursuing this principle of governmentby agreement and of consensus (definedas the absence of formal opposition),particular methods to support thedevelopment of pan-Europeaa commonalityand to ensure sustained compliance withthat commonality must be identified,promulgated, and operated. Thisprocess takes time. Given the timespent, the result of such pervasivedeliberations produces a highly stablecompromise with few, if any, nationalvariations from a common theme. Giventhe diverse nature and sheer quantityof interested parties and the need torecognise the particular concerns ofeach in the generation of such anagreed compromise, the administrativeand bureaucratic structures whichresult have a complexity in a number ofdimensions.
As the Community begins to mature, itsfurther evolution clearly exposesvisibly an emphasis upon the need toprovide Community-wide equivalence inthe access to and use oftelecommunications infrastructure forfree and unrestricted information flow.It is perhaps right that in theformative years of the Community,
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telecommunications was left as anational matter; it is undoubtedlyright that the Community as a whole nowshould place some focused initiative onthe methods of supporting change fromnationally idiosyncratic to Communitycommon telecommunications services anda telecommunications infrastructure tosupport those services.It is this goal which has fostered anumber of Community initiatives in thetelecommunications field during thelast decade. Many of these initiativesare widely known: the formation of aEuropean-wide telecommunicationsstandards-writing machine (ETSI) is butone of these.
THE ROLE OF REGULATION
There are, of course, many ways tocrack a nut. The particular method onechooses is indeed, somewhat determinedby the nut in question. Thetelecommunications resource of anynation-state is made up of manycomponents, and in order to redefineits method of management, a number oflinked procedures and institutions tosupport and to implement thoseprocedures must be established. Theunderlying requirement that consensusbe a common theme provides nosimplification.
Moreover, the telecommunicationsenvironment presents a specialchallenge: the efficacy of symmetricresource management across nationalborders depends extensively uponnational technology. It is difficult(some say impossible) to uncouple theprovision and use of telecommunicationsservices from the electronics, physics,and integrated circuits which are therule-makers of its infrastructurearchitecture. A single technicalparameter can render a regulatoryobjective achievable only at grosslyuneconomic cost or indeed not at all;a straight forward regulatory principlecan be frustrated or renderedimpossible to achieve by one or moretechnical parameters or by thetechnical implications of suchparameters. This interrelationship ofthe legal and economic world of theregulator and the hardware-softwareworld of the telecomms technologistprovides an endless feast for thosewith a debating appetite, and thesetwo worlds do not of themselvesproscribe a convergent path for suchdebates.
It is perhaps worth noting that thisdisparity tends to be less significantwithin a given nation-state which hasgrown up with its telecommunicationsinfrastructure than it is between
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countries which have differenthistorical evolution. Hence the re-definition of North American telecommsregulation involved setting out rulesfor using differently a giventechnology; this is in stark contrastto European re-regulation, whichrequires technical definition ofsignificantly different infrastructuresand subsequent ab initio regulatoryrules for that service delivery and usewhich the different technologies invarious member States might permit. Asecond regulatory step, of defining amigration path towards greatertechnical commonality between countriesand choosing that path to be consistentwith regulatory objectives for re-defined network access and servicedelivery, must clearly follow.
It has already been mentioned that thearticulation and implementation of'Federal regulations' within theEuropean Community is in large measurein contradistinction to itsconstitutional position; regulatorydimensions exist within the Communityat large and within each of its memberStates, and these regulatory positionsmay well be different in kind or in theextent or nature of their development.In consequence, two discrete regulatoryroles - those of the Community andthose of its member States - are found.Much effort has been spent and no doubtwill continue to be spent inidentifying the machinery needed toforge effective and working linksbetween these interests.
A further consideration is that of thedissimilarity across nation-states.The national regulatory constraints andtargets in France, for example, areunlikely to be similar to those foundin, say, Italy. And neither could beexpected to relate closely to theregulatory environment in, say, Greece.
It seems clear tnat the re-definitionof European telecommunications mustinvolve the Community itself (by way ofthe European Commission) and of eachmember state (by way of its particularapproach to the telecomms aspect).These aspects of Community regulationare set out below.
The Community Dimension
Telecommunications as a consolidatedcommunity resource is seen by theEuropean Commission and by the Councilof Europe as a significant component offurther economic and social evolutionand, indeed, integration throughoutthe European Economic Space. Emphasisupon its re-alignment better to servethose objectives has developed duringthe last decade, and the Commission has
implemented a number of supportinginitiatives.
These centre about the overallconsideration of the telecommunicationsresource as, in the main, a basket ofinformation transfer or transportservices. From this aspect, thesecondary issues of technicalinfrastructure and terminal equipmentnaturally follow. This is not to saythat networks and terminals areforgotten; much Community resource hasbeen expended and continues to bededicated to these particular areas ofconcern (the formation of ETSI is butone example). Yet, the generalconsideration remains service based.
There are clearly both historicalvariations and inconsistencies andfuture developments to be considered inthis light: Community policy hasconcentrated upon both. The policythrust includes programmes to extenduniversally service provision to areaswithin member States and theirneighbours not well-served withinfrastructure, to set out mechanismsto develop equitable service andservice accessibility in areas whereexisting infrastructure is able tosupport demand, and to identifyleading-edge technological approachesto the telecommunications needs of thefuture. In parallel, the pan-Europeanconsistency of user parameters is ofconcern; numbering strategies andequitable tariff structures are high onthe priority list of re-definition.
Community legislation is (and must be)short on regulation and very longindeed on direction; that is to say,given the imposed restrictions uponregulatory methodology arising from anon-Federal structure and hence the(predominant) role of the member Stateand its legislative framework theessence of the Community-wide role aregulator must pragmatically assume isone of consultation, consensus (or atworst qualified majority voting), anddirection to member States. Thisdirection is articulated by means ofDirectives agreed in the normal way bythe Council (composed of members ofGovernment from all member States), andthen addressed to member States for thepurpose of their approximation of thecontent of the Directive to theirnational laws.
This process maintains the distancebetween National sovereignty andCommunity policy and at the same timepermits the spirit of a Directive to beapplied throughout its member States.It should be noted that so long asnational law is the principal vehiclefor implementing Community polic%.,using a procedure such as this is often
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the only way to proceed: legalstructures in the member States differwidely in their method of statutegeneration and application.
Nonetheless, the system seems to work:any number of Directives on issuesranging from telecommunications toagriculture have been introduced intomember States' legislative fabric andhave largely achieved Community-wideimplementation to a considerable degreeof uniformity. The nature of thisprocess delimits the role of theCommunity Regulator to one of directionto member States following extensiveconsultation with member States andwith other interests, and passes to theNational Regulator a central role inimplementing this direction.
The National Dimension
The Community Green Paper ontelecommunications, published in 1987,proposed fundamental structural changesto the traditional European PTT. Aimedat supporting the development ofcertain types of competition in thetelecommunications market theseparation of the regulation and typeapproval powers from each other andfrom the network development andoperation sectors precipitated thisdevelopment. This separation is nowlargely complete throughout theCommunity. The effect of such a stephas been the creation of a newregulatory dimension.
The PTT model of monopoly supply ofinfrastructure, services, and terminals(and, by implication, all regulationthereof) has been recast intoindependent sectors; the newregulation function, as a separateactivity, becomes more visible tosupplier and to user and includes to alarge extent opportunities for debateand public (rational) decision-makingin the areas of terminal market entryand supply of services. The nationaldimension of this restructuring hascreated certain structuralirregularities from member State tomember State, but this is consistentwith the concepts within the CommunityConstitution. National differences,related to the historical dimension ofthe part each PTT played in provisionof telecommunications will diminish asCommunity-wide markets, led byCommunity-wide standards to define andto harmonise those markets, evolve.
Perhaps the central point is simplythat the telecommunications environmentthroughout the Community is changing ina single direction but at the pace andto the extent appropriate to eachmember State's particular needs andconcerns. Said another way, Europe is
re-regulating its telecomms resource byconsensus rather than by dictum.
THE PLACE FOR STANDARDS
The partition of the telecommunicationsresource into marketable elements is anactivity which cannot begin withoutdeterministic definitions of thoseelements. This, then, is in part therole which standards must adopt. Itis, to considerable extent, a rolewhich (for telecommunications) is new.The (traditional) PTT model usesspecifications which set out the natureof goods and services the monopolymight supply; the free market relies'Ton technical recommendations asguidelines for innovative design to a. ohesive and normative core. Thestandard is perhaps a half-way house;it plays a key role in implementing andsustaining the re-regulatedtelecommunications resource of Europe.
Control of market entry which is in thehands of the market place itselfcreates a dynamic yet orderedenvironment. European Standardscontribute in principal measure to thatcontrol. Generated by all with equalvoice using consensus, they set out adeterministic measure of market entrytargets able to be independently andobjectively assessed. Used by theregulator, they set the legal basis forentering the market and for complyingwith market parameters.
European Telecommunications Standardsare written by members of recognisedEuropean Standardisation Bodies andcoordinated and managed by the EuropeanTelecommunications Standards Institute(ETSI); those specific totelecommunications matters (ascontrasted with, for example,electrical safety or matters ofelectrical interference) are wholly theresponsibility of ETSI. It isinstructive to note how and by whomthey are used, and how and by whom theyare written.
Standards and Regulation
European Telecommunication resourcemanagement derives its Regulations fromthe text of standards written from theoutset to be used as Regulations.Requested by the European Commission orby the marketplace itself, thesedocuments have a deterministic formwhich allows for their applicationeither technically or legally withoutequivocation. Generated from theoutset by the Members of ETSI, thecontent represents a consensus view ofthose members' interests. Theeffectiveness of their use,particul--rly in conjunction withgeneral ;-r 'umbrella') legislation, is
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linked absolutely to the interestsrepresented during the drafting phase.
It is principally for this reason thatthe constitution of ETSI is open to allwho have an interest intelecommunications per se; it is alsofor this reason that each member ofETSI has one vote, irrespective of thesize or character of the organisationhe might represent. ETSI is truly anopen and equitable forum in which thoserepresenting the concerns ofGovernment, supplier, user, researcher,network or service provider and anyother entity with a market interestsit, side by side, as peers with acommon technical expertise. Generatingtext by consensus, the diversity ofmarket interests is checked each by theother; a standard generated by such amethod sets out agreed 'basics' (oftendetermined by the physics of the topicwhich are known to all) andintentionally omits the details (oftenfunctions of product specificity andhence of commercial value only if notrevealed).
This is cooperative competition atwork.
The result, when applied by theregulator as a market Regulation,represents when applied the agreedposition of the marketplace.Disagreement can only arise from thosewhose interests during the generationof the Regulation were ignored, andhence (since all may take part in thatgeneration) from those who choose notto participate. Clearly, their casefor redress (should it be put) isfeeble.
Thus the National Regulator, in realtythe manager of a national telecommsresource, is presented with two focusedconstructive tools with which to effecthis task: a Community-wide agreeddirection setting out the context ofhis rule-making, and a Community-widemarket-sensitive and agreed Regulationaddressing the specifics of the pointat hand. These are, in concert,formidable tools indeed.
Standards Generation
It could be said thattelecommunications standards (asopposed to specifications orrecommendations) perhaps come in twoflavours. The aspects of a Regulationwhich is (or was) a standard have beendiscussed above. A second might beconsidered, to be exactly similar tothe first but not adapted by aregulator for resource managementpurposes. Such cases arise whenregulation is not intended to extend totechnical specificity beyond a
particular level; an example might bea standard concerned with thesensitivity of a dial tone detector.
There are many standards of this kind;they typically cover technical aspectsof terminal equipment (or services)considered to be over and above thoseaspects by which successfulinterworking with the network (or withthe service which the network provides)is achieved. Such standards may takeon a Regulation role in countries whichchoose to regulate to that extent; inothers, they may well assume a legalrole under a civil or commercial code.This in fact generates what might becalled "second order" regulation:regulation within the market by itself,or self-regulation. The regulatorylocus does not directly include theRegulator but rather two (or perhapsmore than two) parties in an agreementto provide and to use a service ornetwork port.
Other regulatory levels can beidentified: these could be said toextend to, for example, the verygeneral area of consumer protection.The point at issue is simply that theprior existence of a standard generatedby and for the market to which itrelates sets apart legally the marketdynamics from market definition andcontrol. With rapid technologicalevolution, this becomes an importantfactor in market development.
The generation of standards, then, canbe seen Ls a key component of the re-1.?gulation methodology used within theCommunity; there are, of course, side-effects of this approach outside theCommunity as well. Moreover, theCommunity regulatory model, which
clearly relies not only upon standardsbut also upon a particular method oftheir generation, can be seen to offerpositive benefits in the ordereddevelopment of a new telecommunicationsenvironment able to foster and tobenefit from competition and tointegrate a multitude of disparatenational market segments.
TODAY'S REALITY
Telecommunications in Europe ischanging. PTTs are re-aligning theiractivities, commercial interests, andpolitical allegiances; competition isdeveloping, services are improving.But problem areas remain.
Perhaps one of the most pronounced isthat of today's telecommunicationsinfrastructure. Community-wide accesson a technically common basis remains adistant goal; normalisation of chargesfor attachment and for use within andbetween member states has yet to beachieved. The provision of leasedlines, the rules for attachment andtariffs of use (particularly in theinternational dimension) remain to beharmonised. Standards - particularlyof a regulatory nature - evolve slowly.
Yet a number of initiatives are underway which address many of these problemareas. Community Directives onstreamlining market Regulation, onproviding Community-wide "opennetworks" to support new services andleased-line needs, on the availabilityof satellite services and on theharmonisation of licensing are all intrain. ISDN development isencouraging; GSM is a world-leader,with other wireless services not farbehind.
Telecomms in Europe is well, very muchalive, and certainly kicking. In itsvery European way.
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Finding Common Ground--The Global Virtual NetworkServices Forum
Doug MacbethAT&T Group Product Manager
Morristown, New Jersey
BACKGROUND
Businesses that are planning to competein a rapidly expanding global environ-ment are making an escalating series ofdemands of service providers. They areasking for the communications securityand power offered by dedicated privatenetworks -- coupled with the reliabil-ity, flexibility and reduced costs thatthe Public Switched Telephone Network(PSTN) provides.
Customers are looking for off-the-shelfglobal networks they can use to effi-ciently link all their business loca-tions, and to provide customized solu-tions to their needs. They want to beable to build individualized network ap-plications specific to their businesses,instead of creating and maintaining acomplex global infrastructure of cables,switches and control centers.
In short, global business is pushinghard for carriers to rapidly develop andoffer Global Virtual Network Services(GVNS) -- software-defined serviceofferings with enhanced feature setsthat equal or surpass dedicated privatenetworks while using PSTN or ISDNfacilities.
AT&T is a leading provider of advancedsoftware-defined network services bothwithin the U.S. and on a global scale,and we partner with telecommadministrations for these services.Customer demands were for a transparentglobal communications environment thatwould give them the ability tointelligently evaluate their optionsbefore choosing service suppliers fortheir GVNS.
Customer concerns fell into three gen-eral areas. The first was a need for in-ternational carriers to provide globalsupport for sales, provisioning andmaintenance that was oriented tocustomer requirements -- clear, consis-tent and comprehensive.
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The second call was for services provid-ers to create truly global networks byagreeing on standardized interconnec-tions between different carrier systems.Customers wanted the ability to specifyflexibly, point-to-any-point meshednetworks instead of being limited tocentrally hubbed star configurations de-termined by individual carrier capabili-ties.
They also asked for at least a basicminimum palette of feature ubiquity.Customers want to be able to plan GVNSimplementations that join far-flungbusiness locations together with the as-surance that they and their chosen car-riers share a common, clearly-definedlanguage of technical capability andservice expectation.
Along with this, multi-national busi-nesses want network management capabili-ties that are clearly defined and effec-tive even when they had to reach acrossa GVNS. that included facilities fromdifferent Telecommunication Administra-tions.
Finally, though far from least importanton the customer agenda, was the thirdspecification -- global end-to-end reli-ability from GVNS providers that was atleast as good as that supplied by exist-ing International Long Distance service.And they wanted that reliability at aprice tag that offered a compelling rea-son to switch from dedicated privatenetwork set-ups.
That is a substantial body of customerexpectations, and it is growing rapidlyin complexity and insistence.
In December, 1991, AT&T set up theGlobal Virtual Network Services Forum,open to all carriers. Its overall goalwas the resolution of those customer im-peratives, and its immediate objectivewas setting the stage for the rapid de-ployment of the seamless global communi-cations environment of GVNS that custom-ers around the world are demanding.
Currently, 37 carriers representing 23countries are active Forum participants-- collectively carrying 95% of theworld's international long-distancebusiness calls. There is no other group-ing in the world that begins to approachit in both the scope and understandingof direct customer business require-ments.
After the first six months, the othertwo major carriers in the U.S. joinedthe ForuA--companies that are major,fiercely competitive rivals for marketshare. Finding common ground wasclearly going to demand cooperation thatwent beyond simple technical agreementon interconnection guidelines.
At first, there was some wariness anduncertainty at the Forum. Differentcarriers, some of which competed witheach other in the same country, hadquestions about the true purpose drivingthe Forum and its real agenda. Thattension dissipated with remarkablespeed, as the GVNS Forum took on anidentity and momentum clearly driven bycustomer requirements. The GVNS Forumalso pointedly refrained from tryingto set itself up as a standards bodythat dictated competitive strategies forparticipants.
What I'm going to report on now are someof the key proposals that were consid-ered for adoption at the fifth meetingof the GVNS Forum last month at Sydney,Australia. That meeting occurred afterthe deadline for submission of thiswriting and any significant changes ordevelopments that occurred will be up-dated during my oral presentation atPTC'93.
At this point, the basic definitions andvocabulary of GVNS have been agreed to.While that may seem elementary, theprocess of building consensus betweena truly global association of carriersis not. The enabling factor has beenour common positions as stakeholderswith immediate, bottom-line interests insupplying solutions for internationalbusiness customers.
SERVICE DEFINITION
Global Virtual Network Service is amulti-network international servicewhich provides private network functionsto users at geographically dispersed in-ternational locations while minimizingthe need for dedicated network re-sources. This is accomplished using aclosed user group over the PSTN or ISDN.
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As used in this paper, GVNS is a termused to describe a feature-rich, inter-national virtual network service. Ithas functions typically associated withprivate networks, but utilizes thepublic switched network.
The customer's network configuration isdefined by the customer, using the cus-tomer-specific service information resi-dent in multiple networks. The networkconfigurations may be administered bythe customer directly or by the GVNSService Provider.
GVNS provides customers with globalservices as a result of internetworkingbetween the GVNS Service Providers indifferent countries. GVNS may accommo-date this local interconnection usingISDN and non-ISDN facilities.
THE BASIC GVNS FEATURE SET
The GVNS Forum considered the adoptionof a basic minimum feature set whichall carriers agreed should be thefoundation of any GVN service offeringmade to customers. There are sixessential components:
1) Basic Private Numbering Plan
This allows GVN customers to defineflexible dialing plans, which useabbreviated dialing (fewer digits)to call different locations withinthe network.
2) Basic Closed User Group
This consists of the customer-defined locations in differentcountries which use GVNS featuresand functions to communicate witheach other. Operating within thepublic switched network, the GVNSclosed user group takes advantage ofthe redundancy and reliability ofthe service provider's systems whileenjoying security and valuecomparable to dedicated privatenetworks.
3) Basic Call Screening
This elemental GVNS feature lets thecustomer set limits and determineauthorization levels from calls be-tween different locations, groups orindividuals within its virtual net-work. Customers can define per-missible GVNS calls by employingdifferent levels of screens, suchas on-net, off-net, domestic-only,international -only, or specific loc-ation or workgroup identification.
4) Basic Billing Report
All GVNS billing appears on a commonbill, separate from other telecom-munications charges. Total GVNSusage, access and miscellaneouscharges are specified. Volume orother discounts are clearlydetailed.
5) Basic Network Management Reports
Bare-bones traffic surveys must beavailable to customers showing, at aminimum, numbers of calls, minutesand costs; configuration reports ofon-net locations and levels ofaccess for different locations andauthorization codes; and networkoutage reports detailing numbers ofoutages, duration of individualevents, and total down-time.
6) Voice and Voiceband Data
GVNS communications between any twoon-net locations must be supportedby the service provider at a rateequal to, or less than,International Long Distance callsbetween the same two locations.
Going Beyond the Basics...
In order to expand that listing of basicGVNS requirements, the Forum looked atall of the features existing or plannedby its members today, and compiled apreliminary catalogue of enhanced GVNSservice offerings. There has been no at-tempt by the GVNS forum to tell individ-ual carriers what enhanced features theyhave to develop or offer to theircustomers, since that is central toeach carrier's individual competitivestrategy.
These include the following key fea-tures, among others:
Digital Data Transmission -- rapidly be-coming an integral part of standardbusiness communications planning asPTT's rapidly push through major mod-ernizations and expansions to existinginfrastructures. During the next tenyears, the world is expected to spendsome $50-to-$70 billion a year on net-work infrastructure, and that growthis particularly robust in the Pacificregion.
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By the mid-1990's, for example, AT&T andthe whole industry will have committed$4 to $5 billion into the Pacific partof its fiber optic Worldwide IntelligentNetwork, going beyond the point-to-pointsystems now deployed. The next genera-tion Pacific network now being rolledout is built with ring structureand spokes, which will greatly enhanceboth reliability and flexibility forcustomers.
Digital data transmission is becomingessential for competitive global busi-ness. High speed fax is a compelling ex-ample. Studies have shown that between 4P.M. and 5 P.M. in Hong Kong, for in-stance, more than 50 percent of thetelecommunications traffic to the U.S.is fax traffic.
"Forced on-net routing" is another en-hanced feature which is available fromsome carriers today but doesn't fallunder the basic feature set the Forumhas evolved. When a customer dials apublic telephone network in a foreigncountry, software intelligence residingin the GVNS provider's network willautomatically determine if the call isto a location included in the company'svirtual network. With the AT&T GVNSservice, for example, the call will beautomatically placed over GlobalSoftware Defined Network Service, andoptimally routed, and billed as a GSDNcall.
"Remote access" is a third widely usedenhanced feature that Forum members haveidentified. When a carrier makes thisoption available to customers, they areable to access their GVNS when they arephysically at an off-net location, bydialing a toll-free number.
During the Sydney GVNS Forum meeting ad-ditional work was planned to further de-fine key enhanced GVNS features.
STREAMLINING THE PROCESS FOR CUSTOMERS
Today, the process of setting up a GVNSstill involves some unknowns -- for bothcustomers and service providers. Formany carriers, it is a brand new terri-tory without any experiential guide-lines.
At AT&T, we've seen that first hand --getting requests for GVNS set-ups fromPTT salespeople that came on the backsof envelopes, because there was no stan-dardized form for inter-carrier order-ing, or procedures in place to make theprocess rational and efficient.
What the GVNS Forum has been workinghard at is reaching consensus on the ba-sic guidelines for customer/serviceprovider relationships, and allowgreatly improved service response andservice quality.
Operations, Delivery and Maintenance(OA &M) issues have received particularattention.
Improving Service Quality andReliability...
One factor limiting the growth of GVNShas been the need for consistent stan-dards of reliability and quality. Theseare critical requirements for a offeringthat is being described as the wave ofthe future for corporate communications.Since GVNS performance varies greatlyfrom country to country, the Forum sawno practical way to reach consensus onuniform performance levels; but there ison-going discussion on the possibleestablishment of a certification processthat will endorse qualified GVNSproviders. We did agree on a need toestablish minimum standards of serviceperformance that would meet customers'end-to-end expectations.
The Forum has identified and created aquality framework of key factors thatinfluence customer perceptions of GVNSquality. It drew on the collective expe-rience of its participants, an unequaledrepository of customer research.Particularly involved in this work wereAT&T, NTT, Italcable, Telecom Canada andTelecom Finland. Further work is beingactively pursued by MCI, Sprint, BT andMercury.
The following chart gives the results ofthat finding:
GVNS Quality of Service Framework
GVNSProcess:
Quality Criteria:!ley Indicators
SPEED ACCURACY AVAILABILITY RELIABILITY SECURITY SIMPLICITY FLEXIBILITY OTHER
PresalesResponse
Time% CorrectInformation
Hours ofOperation
% OptimalInformation Confidentiality
Ease ofContact Options Helpfulness
Service Delivery Time toDeliver
Complete asOrdered
Hours ofOperation
% On Time Confidentiality Ease ofContact
OptionsCustomer
:nformed AsPer M&P's
ServiceMaintenance:
-User changerequest mgmt
- Repair
Time toRespond
% 5__5 hrs.
Mean Timeto Repair
c../0 Correct
% RepeatsHou.s ofOperation
Ease ofContact
OptionsCustomer
Informed AsPer M&P's
NetworkPerformance:-Connectionestablishment
-Userinformationtransfer
-Connectionrelease
Post DialDelay
% Wrong # % Call Como!-% Blocking
% Lost Calls # DigitsDialed
AlternateRoutes
ThroughputLoss/Gain,
Noise, Echo,BER, BLER
% Availability Cutoff CrosstalkRange of
EquipmentSupported
Time toDisconnect
Cutoff
Billing/MgmtReports:-Delivery
- Inquiry
% Late % Correct Frequency Fraud
ResponseTime
% Correct % OptimalInformation
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Operations, encompassing the sale, pro-visioning and cutover of service withthe customer, has also been examinedwith an eye to providing simplified,consistent response to customer needs.
Knowing Who to Contact...
The establishment of Single-Point-Of-Contacts (SPOCs) within each carrier forkey functions is a goal that Forum mem-bers have adopted. This is a readilyidentifiable group of people within eachcarrier's control center, who are thedesignated interface for all OA &M inter-actions between carriers and customers.Updated listings of SPOCs --with theirphone, fax and e-mail contact numbersand responsibilities--are being devel-oped in hard form and may evolve into anon-line inter-carrier database of infor-mation that can be consulted wheneverneeded.
Cooperation and education in the waythat other carriers operate in OA &M pro-cedures is also underway. AT&T has hadrepresentatives from Mercury, FranceTelec and Telecom Canada down to itsVirtual Network Service control center,for example, to get first hand experi-ence and understanding on how we handleprovisioning and maintenance. Similarinvitations have been extended to allPTT's that we do business with and havecross-agreements with.
REACHING CONSENSUS ON INTERCONNECTIONISSUES
The GVNS Forum also investigated anddiscussed the three GVNS technical con-figurations currently implemented orplanned by GVNS carriers. It tried tocreate a baseline starting point forthe development of a common technicalinterconnection specification for allcarriers, as well as set guidelines forservice providers planning to offer GVNSservice to customers. KDD providedstrong technical input on Pacific Regiontechnical issues.
The first configuration, currently inuse by some carriers, makes GVNS connec-tions by passing a unique Service IDalong with each call. In every case,each distinct customer has to have aunique Terminating Network RoutingNumber, since duplication by differentservice providers would result in totalconfusion if calls were sent over sharednetwork facilities.
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The second configuration, also in usetoday and recommended for serviceproviders starting up GVNS offerings inthe near-term, depends on the assignmentof Customer ID's which give carrierscustomer-specific access to each commu-nication. It also allows greater re-sponsiveness without the numbering re-straints existing under the Service IDarrangement in Configuration #1.
The third Interconnection Option, notcurrently fully developed, uses theISUP (ISDN User Part) signaling messageto carry the Service ID and Customer IDseparately from the address digits ofthe call. This method of informationtransmission has the potential to carrymore detailed customer-specific informa-tion, which will be used to provideenhanced GVNS features.
CONTINUING ISSUES
Establishing common ground between car-riers that lets them respond to customerGVNS requests with speed, accuracy andreliability is the GVNS Forum's ongoingfocus. At this point, many of the basicfoundation definitions and goals havebeen agreed to by all parties -- nosmall feat considering the extraordinaryspan encompassed within the Forum.Future Forum efforts will focus evermore closely on the specifics of techni-cal GVNS establishment and maintenance.
eb.
GSM,INTELLIGENT NETWORKS
& PERSONAL COMMUNICATIONS
by
Hans A. DiemelDirecior, Market Development and Marketing
Cellular NetworksNorthern Telecom Europe Ltd
The following paper discusses the current and future standards in Asia /Pacific, NorthAmerica and Europe and focuses on the relationship between GSM and IntelligentNetworks.
The rapid evolution of personal communications,the wireless options re cellular and recent advancesin network intelligence and digital network services,have armed the telecommunications industry withsome very powerful building blocks for an exciting,innovative and potentially highly prosperousfuture.
The rapid advances in mobile telecommunicationstechnology taking place throughout the world are,however, too often slowed, if not actuallyhampered, by the need to take existinginfrastructures and regulatory requirements intoaccount. In some of the more liberal regulatoryenvironments, keen new operators, without themultiple vintages of long-standing infrastructures toimpede them, press enthusiastically on, but still facetremendous barriers trying to establish a criticalmass of investment and expertise to make the rightchoices.
Creating the "communications services of thefuture" requires the right investment, mixture andtiming of resources for a specific marketenvironment to succeed. A brief look at the "step-by-,tep" advancement currently taking place in thecellular world reveals a few pointers for suppliersand operators trying to steer a course towards thesecorrect choices.
In the US, the single AMPS (Advanced MobilePhone System) analogue standard broughtnationwide system uniformity and associated costbenefits. An unfortunate result of increasedsubscriber demand however, has been increasedpressure on the radio frequency spectrum, and animmediate need to concentrate on the solution tothat problem.
Different digital radio solutions, such as TDMA,ETDMA and CDMA (both narrowband andwideband) are being proposed to balance subscriberdensity requirements with efficient spectrum usage.A more efficient version of the AMPS radio
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standard (NAMPS) has also been put forward as ashort term solution to capacity shortfalls. The 1990'ssees these major strands battling for acceptance andseveral field trials are under way to show the meritsof each technology. Because of this movement toseveral standards (see figure 1), the economies ofscale associated with a homogeneous infrastructuremay now be more difficult for US operators toachieve. In addition, multiple regional standardswould severely limit the usefulness of digitalcellular networks to the end user. This trend is alsoexpected in Latin America.
Figure 1 : MIGRATION OF RADIO STANDARDSIN THE UNITED STATES
A similar effect can be seen in Hong Kong whereNAMTS, TACS, AMPS, TDMA and GSM systemsare being used by the operators.
Japan has decided to go its own way with a crossbetween the North American TDMA standard andsome facets of GSM.
In contrast, cellular services in Europe are rapidlyconverging on a unified standard (figure 2), andcountries worldwide are beginning to follow theirlead. After much fragmentation surrounding aplethora of analogue systems, a new digital system,now known as the Global System for Mobility(GSM), is being deployed universally across theEuropean Community and in many other major
1
countries throughout the world. It is the EuropeanGSM Liitiative, and its relationship to IntelligentNetworks that is the focus of our attention here.
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Figure 2 : CELLULAR SERVICES IN EUROPE AREMIGRATING TOWARDS GSM
Significantly, in terms of its global acceptance, GSMhas already been adopted by all of Europe, as well asAustralia, New Zealand, Singapore, Hong Kong,India, Thailand, Pakistan and the major MiddleEastern countries. In addition, it serves as the basisfor future digital and Intelligent Network services. Itis being considered in many other countries whichhave not yet officially committed to a standard, suchas China and Eastern Europe (Eastern Bloc), despiteproposals for GSM systems being made. Thepopulation coverage of GSM is now just short of 2billion (POPs).
The GSM standard model for mobile networks andthe CCITT model for a fixed Intelligent Networkhave reached several points of intersection:
the evolution of both technologies is maturingrapidly and in parallelin both cases, common central networkintelligence and out-of-band SS7 signallingstandards will deliver high speed, high capacitynetworks with a high degree of service flexibility.Non-channel associated signalling is a keysimilarity of the two network architecturesthe emergence of Intelligent Network andmobility services beyond the traditionalswitched-based services, is starting to convergeinto advanced areas such as universalnumbering, location tracking, unified billing andvirtual private networking.
The GSM service will provide worldwide roamingthrough those countries adopting the standard, highsecurity, quality and high capacity. It will deliver theimproved voice clarity associated with digitaltransmission, plus far greater reliability andconsistency compared with analogue cellular. Dataservices, being inherent, are faster and more reliable
offering instant connection with no need formodems at either end of a link.
Significantly, GSM is a more comprehensivetechnology than is generally realised. GSM
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comprises a total network specification (figure 3). Itdefines every p.-?rtinent interface between nodes, thefunctionality of those nodes, from billing to networkadministration
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Figure 3 : GSM AS A TOTAL NETWORKSPECIFICATION
GSM is both ISDN (Integrated Services DigitalNetwork) and AIN (Advanced Intelligent Network)compatible. In examining the components of a GSMnetwork, it becomes clear that the GSM architecturehas not been designed and specified in isolation. Theexperts responsible for defining GSM have bothISDN and Intelligen'c Networks firmly in mind. Forexample, some features within the specificationhave no direct relevance to mobile communicationsbut are included as a recognition and expectation offuture integrated mobile and fixed networksolutions.
For anyone unfamiliar with digital mobil(networks, GSIVi largely mirrors the fixed networkmodel. GSM, however, includes radio paths foraccess. Subscribers communicate by radiofrequencies to the Base Transceiver Stations (BTS).These are linked to Base Station Controllers (BSC's),rather like remote concentrators, which trunk theirtraffic to Mobile Switching Centres (MSC's).Functionality-wise, handsets will take responsibilityfor the man-machine interface and signal power, forexample, while the Base Station Controller andother radio equipment (BTS's) perform functionssuch as handoff operations, radio resourcemanagement and maintenance. The switches havethe intelligence to handle call processing, mobilityand act as network gateways, while the centraldatabase attunes these functions to individualsubscriber requirements. The w'Iole architectureand the resulting function set have their roots in anISDN and Intelligent Network infrastructure.
The network itself is 100% traffic carrying with nosubscriber unique equipment. Subscriber identityand location are established on a per call basis. A
Mobile Switching Centre is basically a public centraloffice switch with the additional features toaccommodate this subscriber mobility. One MSCcommunicates with other MSC's and the fixednetwork, acting as an Intelligent Network ServiceSwitching Point (SSP).
Looking briefly at the central intelligence of a GSMnetwork:
the VLR (Visitor Location Register) is a atemporary database for roaming subscribers whoare for the moment within the associated MSCarea.
the HLR (Home Location Register) holds thesubscriber's service profile (i.e. the list of servicesto which he is entitled) and his current statusand location. The HLR is the GSM version of theSignalling Control Point (SCP) found in anIntelligent Network model.
an EIR (Equipment Identification Register) andAUC (Authentication Centre) ensure that amobile call is not activated by a non-authoriseduser or equipment.
the STP (Signal Transfer Point) concentratesseveral SS7 signalling links and is connected toan HLR, the GSM version of the SignallingControl Point (SCP) found in an IntelligentNetwork model.
Each GSM switch is intelligent enough tounderstand and perform certain network functions,such as call forwarding, call barring, billing, etc. Likean Intelligent Network, the central database carriesspecific intelligence relating to individualsubscribers profiles and instructs the switches howthe inherent IN functions should be applied to meetspecific subscriber needs.
Whilst GSM signalling between the central datal.lse,the mobile switching centres and other fixed pull, ofthe infrastructure conforms to SS7 standards isparallel to that found in the Intelligent Network, italso uses the Mobile Applications Part (MAP)protocol. The signalling is independent of the pathtaken by the call itself. There is also a deliberateadherence to ISDN in the GSM interfaces at theaccess and subscriber terminal end.
A fixed Intelligent Network can, via GSM's HLRand VLR, confer virtual mobility to the fixednetwork customer, as well as the services associatedwith Intelligent Networking mentioned above.
A mobile network, with GSM at its heart, can be anatural extension of the fixed Intelligent Networkboth in terms of architecture and services. Inparticular:
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- the traffic load of fixed and mobile subscriberscould be combined on the same IntelligentSwitching Platform (SSP).both GSM and fixed Intelligent Networks dependupon parallel availability of a logically separated,digitally switched, CCITT No 7 (SS7) signalling-based infrastructure. SS7 networks for the firsttime segregate signalling from customer traffic,thus providing far higher information deliveryspeeds, service flexibility, differentiation andubiquity.calls that need handling by an IntelligentNetwork distinguish themselves within thestructure of signalling messages generated duringcall set-up and during the call itself. Whetherthe call is generated within the mobile or fixednetwork, call processing "triggers" provide accessto the HLR or SCP via the IN infrastructure.GSM and the Intelligent Network have incommon a database serving the whole network.In Europe PCN (Personal CommunicationsNetwork) development is proceeding in parallelwith GSM, and uses the exact same networkarchitecture and standards. In the rightregulatory environment, a true "intelligent"PCN could evolve from either a mobile or afixed network operation.
GSM can therefore be looked upon as a completenetwork specification not just for digital mobileservices, but ior a type of Intelligent Network thatcan integrate successfully the mobile and fixedIntelligent Network infrastructures (figure 4).
Figure 4 : GSM NETWORKS CAN SUCCESSFULLYINTEGRATE MOBILE AND FIXED INTELLIGENTNETWORK INFRASTRUCTURES
As GSM emerges and expands, both geographicallyand in the services it offers, the complementarynature of its architecture and administration withthat of Intelligent Networks will enable suchIntelligent Networks to evolve faster aid moreefficiently by moving to provide PersonalCommunications Services.
Personal Communications Services are servicesusers demand as part of the current drive for
enhanced functionality from their communicationsprovider. In turn, such customer demands willdrive the evolution of the services provided on theIntelligent Network, as is already the case in thefixed networks. In these fixed networks, bothprivate and public, large end-user organisationshave traditionally provided the investment thatfunds, indirectly, technological development ofadvanced telecommunications features.
For example, take existing PBX's with severalhundred features. Major commercial organisationshad the power and money to determine theirdevelopment. It has undoubtedly been to thebenefit of smaller businesses and of residential usersthat, in some markets over the last few years, thesefeatures have been made available from the publicnetwork telephone exchange.
In North America, the range of centrally providedpublic network business services is extensive. Infact, it is on a par with high-end PBXs in terms offunctionality. Moreover, network operators havebeen able to offer advanced network functionality,such as Virtual Private Network features.
The vast investment in PBX-based services has beenmigrated smoothly into public networks. In thatcompetitive environment, network operators haveused these services to prevent the loss of theircustomer base which in Europe was largely protectedand guaranteed to monopoly PTT operators.
In V last two or three years, some featuresoriginally developed for business customers havebeen repackaged and offered to residentialconsumers by public network operators.
North American operators now offer a host ofnetwork-based f a tures to public users. Theseinclude basic virtual services better known inEurope as star services tone dialling, calling partyidentity, voice messaging and other innovativeextensions of fixed-line functionality.
In these markets, the Plain Old Telephone Service isno longer plain.
Although still within the confines of the fixednetwork, the advances continue and individualusers now have the opportunity to take particularsets of packaged services according to their ownpersonal profile.
A personal profile of communications services isbuilt up by an end user and will be remembered bythe network. Instead of attaching service to aparticular phone number, the network responds tothe individual needs and wants of the user of thatphone, flexibly and dynamically.
The fixed-line examples of advanced services
189
highlight attempts to improve a customer's mobilityand their control of availability. In assessing thelikely impact of offering network-based and value-added services, figures from the North Americanexperience suggest that uptake has been five timesmore than originally forecast in some cases uptakeis by 20% of all subscribers in just a few years.
Therefore, imagine the impact taat true mobility,with its inherent fl, xibility over and above any fixedservices, will have .vith its far greater utility. Takingthat 20% as a guideline, it is not difficult to justifythe forecast of subscribers for GSM and PCN.
We must not forget, though, that functionality is thekey to their uptake and a lot of attention is focussedon the Intelligent Network to make this happen. Amobile networl., especially a GSM network, startswith an immediate advantage; users can themselvesbe on the move and, as demonstrated before, it isalready an 1N.
It may be useful to examine the GSM network aspart of the threw -tier infrastructure for an IntelligentNetwork, in which mobility is simply one facet,sitting on top of a service-independent platform ofhardware and software. The building blocks for thefuture services mentioned earlier are already inexistence, although some are more mature thanothers. These blocks are service-independent andtherefore will enable network operators todifferentiate their offerings from each other.
Fixed network users on such an Intelligent Networkcan take on virtual mobility with, for example, SSPfunctionality in the fixed and mobile parts. Roamingsubscribers can be tracked by either part.
Intelligent Network technology, applied in themobile environment. coupled with the GSMspecification and future developments such as PCN,could enable the fixed network to offer virtuallyeverything a mobile network operator can supply.
GSM has already been developed to operate at twofrequencies (900MHz and 1800MHz) and could bedeployed at others. While the initial investment inan Intelligent Network may appear large, it hasalready been justified throughout Europe and inother parts of the world through the introduction ofGSM.
Furthermore, movement towards commercial aswell as technical mechanisms for inter-country GSMservices has al::eady received the blessing of theEuropean Commission and Gulf Co-operationCouncil and is beini; embraced across the GSMcommunity. Independent billing and servicesclearing houses are being formed. As new servicesappear, the associated administration mechanisms,such as billing across borders, will already be in placeand can be carried through from the fixed to the
mobile worlds and back again with no practicalseparation.
As the distinction between fixed and mobilenetworks becomes increasingly blurred into thesingle concept of an intelligent Network, GSM, on amulti-national scale, with its Intelligent Networkarchitecture becomes the key to the goal of personalmobility.
190 f. _ '
Application Of GIS Technology To Wireless
Chandan W. Seernani
Digital Equipment CorporationAtlanta, U.S.A.
ABSTRACT
Some of the key factors differentiating one cellular service provider fromanother are quality of cellular service within the coverage area, quality ofcustomer care operations, responsiveness to customer problems, timely &accurate billing, competitive pricing, enhanced services, network reliabilityand reduced fraud. Applications based on the Geographic Information System(GIS) technology can assist in the areas of Customer Care, Engineering,Marketing and Network Operations. This paper will discuss benefits of the GIStechnology and some key applications based on this technology.
INTRODUCTION:
During the past several years, the Cellularindustry has experienced a tremendous growth.Some of the 4ey factors differentiating onecellular service provider from another arequality of cellular service within the coveragearea, quality of customer care operations,responsiveness to customer problems, timely &accurate billing, competitive pricing, enhancedservices, network reliability and reducedfraud. Applications based on the. GeographicInformation System (GIS) technology can assistin the areas of Customer Care, Engineering,Marketing and Network Operations.
CURRENT METHODS:
Currently most of the following operations aremanually performed:
- Map look-ups: Coverage area maps arepasted on the wall in the Engineering andin Customer Care department:.. Cell-sitelocations and coverage areas are manuallydrawn on this map. Any trouble calls, forexample drop calls or calls related topoor service quality, are manually plottedon this map by using colored push pins.Also, when Customer Care agents receivecoverage area related inquiries, they haveto manually look through the maps todetermine this information which may beinaccurate or out of date.
- Subscriber Trouble Report: Trouble callsreported by subscribers are manuallylogged on a form by Customer Care agents.These are periodically transmitted toEngineering using manual methods like FAX,Voice Mail or Electronic mail. Sometimesthese are hand carried to Engineering.
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This leads to poor communication betweenthe two departments. Also, this makesreporting a labor intensive task.
- Network Trouble Report: Any scheduledoutages or problems within the coveragearea reported by a Network MonitoringSystem are either not reported to CustomerCare or are reported using manual methodslike FAX, Voice Mail or Electronic Mail.This makes Customer Care less pro-activeat handling trouble calls in the affectedgeographies.
All of the above reasons lead to poor CustomerService to the subscribers and could contributeto churn.
GIS TECHNOLOGY:
The Geographic Information System (GIS)technology has been in existence for severalyears. It has been widely used in otherindustries like utilities, government andwireline phone companies. An ideal GIS consistsof three key components. These are:
- Map Databases: Also known as vectordatabases. They include information aboutstreet addresses, highway intersectionsand important landmarks. When displayed ona computer terminal the streets andassociated geography are represented byvectors (straight lines and curves) andare difficult for an end-user tounderstand (please refer to Figure-1.)
- Raster Image: Since the vector display isdifficult to understand by an end user, itis overlaid with a scanned image (alsoknown as a raster image) derived from anaerial photo or a printed area map (for
-f-
rri
FIGURE-I: Vector Data as displayed on a
computer terminal.
example a Rand McNally map or mapsavailable from other cartographers.) The
scanned image includes detailed
information like airports, parks,waterways and railroads. This allows for afriendly user interface (please refer toFigure-2.)
An alternate method of obtaining thefriendly user interface is to have thesoftware perform the area fills when thevector data is displayed. For example,when a lake is displayed in the vectorform, the software could paint it blue orwhen a major highway is displayed, the
software could draw the appropriate symbol(please refer to Figure-3.) When this
technique is used the display appears verysimilar to that obtained from a scannedimage. Also, this technique saves the costassociated with scanning an image andnormalizing it with the vector data.
The raster information can further be
overlaid with information about
cell-sites, cell boundaries, coverageareas, MTSO's, demographic information andcommercial information like restaurants,hotels, hospitals, police stations and gas
stations.
- The software: The software to access thedatabase and the image. It should alsohave the following:
- Flexible data structures to
accommodate the integration of
FIGURE-2: Vector Data with a Raster Overlay
using a scanned area map.
vectors, raster, co-ordinate geometryand a powerful database.
- A programming language or an industrystandard query language interface(for example SQL).
The above features combined with a powerful CADcapability provide an excellent tool for theentire organization. The CAD function could beused to create engineering drawings, ZOOM, PANand BOX into specific areas of the drawingand/or the map.
Nf.,,If PHI?.
I. fit-
FIGURE-3:
bfsot"
'A) odtriLirfq.A
14.44,4 1,LiWC0,1,7. ,*
User friendly Raster like display
using area fills. Photo: Courtesy of ETAK Inc.
192 rt BEST COPY AVAILABLE
G.I.S. BASED APPLICATIONS
Sates &Marketing
CustomerCam
EnemeegnaNetworkG'ST AR Services
G.I.S.
DemographicDateLocation ofDealers, Agents
Location ofProduct& Service VendorsCompetitorInformation
VideotextTechnical
ImagingInstrumentContractsStatements
EnhancedDirectionMobile
RASTER.SCANNED MAP
Site Suitabilitygn Studies for Cell Siteto Switch Planning Design
Land StudyElevationPro artyownershipLocal, State &FederalRegulations
VECTOR DATA
Manuals Facility RecordsCAD DesInterface
ServicesFinder
Yellow Pages
FIGURE-4: GIS based Applications in various
departments of a Service Provider.
GIS BASED APPLICATIONS:
Several applications can be developed to takeadvantage of the GIS technology (Please referto Figure-4). These can help improveefficiency leading to an improved customerresponse.
The G*STAR application shown in Figure-4 hasbeen developed by Digital Equipment Corp. Itconsists of two modules namely the TroubleTracking module and the Direction Findermodule. When cellular subscribers reportTrouble calls like a dropped call or a poorservice call, special actions have to be taken.These include billing credit to the customer,inform engineering so that they can investigatethe problem, post a notice if similar problemsare occurring in other parts of the coveragearea. As indicated earlier, manual methods arecurrently used to locate, log and track troublecalls. These are very time consuming andsubject to error. Also, these cannot provide aninformation base for engineering andoperations. Based on discussions with leadersin the cellular industry, Digital hasstructured the Trouble Tracking module withinG*STAR to perform the following functions:
Graphically display (on an electronic map)all active trouble call locations, cellboundaries, towers and MTSOs. Thedifferent types of trouble calls aredisplayed by using distinct symbols (forexample a DROP call is represented by asquare, a POOR quality call by atriangle.) The status of each trouble callis represented by a unique color (forexample a call in the OPEN status has REDcolor, the one that has been started byengineering has a VIOLET color.) Pleaserefer to Figure 5.
All reports have graphic representationlike Pie-Charts and Bar Graphs.
Provide an automated, structured approachin the capture of trouble callinformation.
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AMP
ert14.NXWE.i.S.j,
FIGURE-5: In G*STAR symbols denote type of
Trouble Call. Note the SQUARE, TRIANGLE &
BOW-TIE Symbols. When seen in COLOR,
the color denotes status of each call.
- Automatically assign a real worldgeographical location for each troubleevent. Also, automatically assign thecell-site(s) that the call can be
associated to.
- Provide electronic access to all troublecall information.
Provide adhoc inquiry capability includingreal-time analysis, trot.ble call trackingand management reporting.
- Maintain a historical file of all troublecall information.
- Provide non-graphic data entry capabilityto enter and update trouble tickets.
To demonstrate additional uses of the GIStechnology, Digital developed the DirectionFinder module for G*STAR. This module allows aservice proviaer to give directions from oneplace to another to their subscribers. It hasbeen viewed, by industry leaders, as a
capability to offer an enhanced service forcompetitive advantages. Also, it has thepotential to be a revenue generator for thefollowing reasons:
- Encourage increased air-time usage.
- A subscriber may be charged a fixed feefor using this service.
- The Mobile Yellow Pages application(described below) may be interfaced withthe Direction Finder for enhanced
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functionality to provide a competitiveadvantage and additional revenue both fromadvertisers and users of the system.
The Direction Finder has the followingfunctions:
- Provide a customer with directions fromone place to another.
- Enter starting point and destination byusing an Address, a Landmark or bylocating it on the map.
- Output(please
printeraccess.
can be displayed on the Screenrefer to Figure-6), printed on aor saved in a file for future
Integration capability to VOICE and FAXinterfaces is also available.
The benefits of the G*STAR application aregiven below:
- Provide an accurate and timely status ofeach trouble call.
- Use trouble call information to proactiN,ely enhance customer care.
- Use trouble call information for improvedoperations management.
- Reduce the clerical cost of the currentsystem.
- Use trouble call information whileplanning for additional cell-sites.
- Use trouble call information to determinethe amount of credit issued by eachcell-site. The ones with the maximumamount of credit issued may be furtherinvestigated by accessing historyinformation.
- Identify subscriber equipment problems.
- Identify subscribers that may be abusingthe system of getting credits for shortduration calls. This is a form of FRAUD.
Provide engineering an opportunity to bepart of customer satisfaction process byimproving communications between customercare and engineering
- Improve communications between CustomerCare and Engineering departments.
- The Direction Finder may be used to offera revenue generating enhanced service.
When geographic locations ofDealers/Agents, Product/Service Vendorsare stored in the database the DirectionFinder may be used to provide prospectiveor existing clients with directions tothese vendors.
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FIGURE-6: Direction Finder output on the
Screen. Note the line on Belvedere, S.Olive,
Royal Palm Bridge, Royal Palm Way into
the Golf Course. Thi, is a solid RED line
when seen in Color.
As shown in Figure-4, other applications thatmay be developed by using the GIS technologyare:
- =WORK IIIITERFECB:
Log and diagnose network related problemsresulting into improved networkreliability and availability.
An interface between G*STAR and a NetworkMonitoring System will provide thisfunctionality. When alarms of a certainseverity level are detected by the networkmonitoring system, these can be passed toG*STAR for displaying on the screen. Thisenables a Customer Care agent to bepro-active in responding to calls fromsubscribers.
When an excessive number of Trouble Callsare logged by a Customer Care agent in agiven time frame, an alarm could be sentto the Network Monitoring System fo. anengineer to take action. This allows anengineer to be pro-active at diagnosingpotential network related problems or evenidentifying new ones.
This interface will also provide thecapability to compare the problemsreported by subscribers to those logged bythe Switch.
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- REVENUE GENERATING APPLICATIONS:
The Direction Finder is already a part ofthe G*STAR application.
This combined with a GPS locator may beused to provide vehicle security serviceover the cellular network. If a car isbeing stolen, the system in the car wouldcall the nearest police station and theowner of the car.
Additional applications like the MobileYellow Pages may be developed tocompliment the functionality of theDirection Finder and provide a competitiveedge.
Using the Mobile Yellow Pages application,those businesses that wish to advertisewill have their ads scanned or createdusing the CAD facility. The ad will bedisplayed at the appropriate geographiclocation on the map. Also, the relevantinformation like Category, Price, Hours ofoperation, Credit Cards accepted, Dresscode, Service rating etc will be stored inthe database. In addition to thegeographic location, these ads would beorganized by category for example ShoppingMalls, Restaurants, Gas Stations, Hotels,Rental Car Companies, Attorneys, HardwareStores, Car Mechanics etc. The advertisingwill provide: an additional source ofrevenue to the rervice provider.
When a subscriber is new in town or is notfamiliar with a given area, (s)he couldcall the service provider and askquestions similar to the ones listedbelow:
- List of Hardware Stores that openbefore 8:00 A.M. or remain openuntil after 6:00 P.M. and are on theway to work.
- List of Restaurants closest to agiven location that serve meals in agiven price range and are open untilmidnight.
- List of Gas Stations that arelocated in a given part of town orthose that are located on the way tothe airport.
The applications mentioned above not onlyprovide a competitive edge but also abasis for additional revenue.
- IMAGING APPLICATIONS:
Store and retrieve documentthose of a customer bill orLost and misplaced contractsoccurrence. One of the legalis to produce the originalorder for it to be enforced.
images likea contract.is a commonrequirementscontract inThe current
method could lead to loss of revenuebecause a contract cannot be enforced.
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Also, when a subscriber calls with abilling question, they reference the billsby page numbers. Most pilling systems donot have information stored in that otder.In addition to the frustration, this leadsto increased time on the phone and reducedagent productivity.
Currently the Customer Care agents storeTechnical Manuals on their desk. When asubscriber calls with a question, theseare manually searched for the relevantinformation. Also, when these are updated,the update pages have to be manuallyinserted. This could lead to theinformation being misplaced or lost. Anideal method is to scan the TechnicalManual and be able to search itelectronically based on key words or beable to look at the picture of theinstrument in question. This will speedthe search and allow for easy and accurateupdates.
- SALES 6 MARKETING APPLICATIONS:
Store and retrieve demographic informationfor target marketing to receive maximumbenefit from advertising dollars. Thiswould include information like the annualfamily income range, income range for agiven area, percentage of residents in ahigh income area that are customers. Thishelps in targeting advertising to specificareas.
Store and retrieve locations of Dealers,Agents, Product Vendors and ServiceVendors etc. This combined with thedemographic information helps ascertainneed for additional dealers, agents etc.Also, it would help identifynon-performers. Information about thecompetition may also be stored foranalysis purposes.
COSCLUSIGII:
Some studies indicate that a 30% reduction inchurn can lead to as much as 15% increase inrevenue. Having an efficient and well trainedcustomer care staff armed with the right tools,a pro-active engineering department, a varietyof enhanced services and a strong Sales andMarketing department are keys for success inthe 31,1s and beyond.
In conclusion I would like to say that the GIStechnology is not a new technology. It has beenused and proven successful in other industries.Installing a GIS based system is likeinstalling a platform that a user can build on.In the wireless industry, the implementation ofa GIS based application will provide a 2-3 Yearcompetitive edge and help generate additionalrevenue.
C=i-.,..:ters and Telecommunications for Distance Education
R. William Maule, Ph.D.University of San Francisco
San Francisco, California, USA
1. ABSTRACT
Network-based distance learning systems offer significantadvantages over dial-up, mainframe, or host-based platforms for
instruction, communication, and student interaction. This paper examinesthe new network-based computer and telecommunication technologies and presents
strategies for their application in distance education.
2. INTRODUCTION
The computer is an educational tool valued forits ability to integrate a variety of media ininteractive presentations. Computer-mediatedcommunication has become an integral componentof current distance education technologies.Online educational 'communities' and 'virtual'classrooms enable learners to interact withinformation which is fluid, constantly evolving,and continuously expanding.
Today, dial-up or modem-based learning systemsusing a central computing resource are thepredominate means of providing computer-baseddistance education. However, newtelecommunications technologies enable distanceeducation systems to capitalize on embeddednetwork, internet, and infrastructure servicesto provide comprehensive learning systems.Dynamic information from remote resources can beintegrated into training and academic programs.This paper will discuss strategies fordeveloping distance education programs using thenew network and infrastructure technologiesincluding an analysis of some newtelecommunications technologies and publiconline resources.
3. COMMUNICATION STRATEGY
Computer communications can assist teachers toreach learners in a variety of settings andthereby bridge the gap between formal,institutional education and non-traditionaleducation (Brookfield, 1986). Many of theconcepts associated with traditional classroomlearning, but absent when using conventionaldistance learning technologies, can beaccommodated with computer communications.Teacher-student counseling and student-studentcc,Ilaboration can be an integral part of an.0.--nnically delivered instructional program.:n addition, users may access the resources attheir convenience to download exercises, respondto questions, or customize their learning tomeet individual needs (Long, 1983; Gooler, 1987;Hayes, 1989; Duning, 1990; Moore, 1990; Hopper,1991).
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3.1 CLASSROOM APPLICATIONS
Computer-mediated learning uses personalcomputers as the main medium of communicationbetween instructors and students. Communicationis not with the computer, but with the teacherthrough the computer (Hayes, 1989), with theobjective an improved teacher-studentcommunication process (Hiltz, 1990). Thus,networking is not only a technology, but asociology--a means to communicate and shareideas (Edelhart; 1987; Thachenkary, 1987).Applications may range from simple classroomsupport using electronic mail and bulletinboards; to elaborate conferencing systemsfeaturing pictorial displays of class membersand real-time information transfer (RTZ, 1992);to online universities which use computercommunications as a primary means of informationdelivery (Berlfein, 1991). Communication may beimmediate (teleconferencing), delayed(correspondence), or simulated (computer-tutorial) (Garrison, 1987; Wells, 1992).
3.2 IMPLEMENTATION SCENARIOS
Computer-mediated distance learning systems aregenerally based on proprietary informationplatforms and services. In a typicalapplication, a student calls into a remotecomputer system to exchange mail, participate ina conference, or complete an assignment (Lauzonfi Moore, 1989). The host computer may be at theinstitution offering the program or be part of acontracted service. These systems may bereferred to as 'modem-based, host' systems.
The advent of desktop workstations, and networkcomputing, has expanded systems capabilities toenable students to connect to national networksand receive a full range of online informationservices. Instructors may use the Internet todevelop curriculums which regularly featureinput from dynamic resources (Maule, 1991b,1992a). These services may be referred to as'network-based, infrastructure' systems.
Next-generation distance education technologieswill integrate public and privatetelecommunication services, incorporateindustrial laboratory simulations, and supportthe real-time monitoring and control of thenetwork and all of its resources. 'Virtual-
network, cooperative' services will feature on-demand multimedia, video conferencing,collaborative computing, and Internetinformation access.
3.3 INTERACTION
Historically, computer communications have beenhindered by inconsistent user-interfaces andirregular patterns of human-computer discourse(Ridgeway, 1989; Straub & Wetherbe, 1989).However, new graphical computing softwareenables user-interfaces to be designed withstandardized screen displays using machinecommands which function identically acrossmultiple platforms, networks, and operatingsystems (Molich & Nielsen, 1990). Thus, aheightened capacity for student interaction andcollaboration across networks is possible,making the medium a truly remarkable and uniqueresource for education (Davie & Wells, 1991).
Software now enables intelligence to beprogrammed into interfaces to create learningsystems which maintain and apply informationabout users to further enhance communications(Jacob, 1986; Higgins, 1989). Increasingly, thenetwork will seem transparent as intelligentinterfaces, search, and retrieval mechanismsmanipulate, process, and present data in formatsappropriate for the user (Rockart & Short,1989). Of course, such communication functionsare dependent on the capability of theunderlying telecommunications infrastructure.
4. TELECOMMUNICATIONS STRATEGY
The goal of telecommunication planners is tocreate a global digital highway, open to allusers, with universal access into totally opennetworks (Felton, 1990). The Government OpenSystems Interconnection Profile (GOSIP), and theiligh-Performance Computing Act of 1991,accomplish these objectives by establishing opennetworks as a national priority with standardsfor network interoperability (U.S., 1988; U.S.,1991). The next step is the extension of high-performance networks into homes and thedevelopment of information partnerships amonggovernment, industry, and education (Roberts,1990; Johnson, 1992). Distance educationproviders will need to be prepared for an era ofubiquitous computer networking and systems whichsupport voice, data, and images, in anycombination, anywhere, at any time--and withconvenience and economy (Mayo, 1992).
4.1 INTEROPERABLE SYSTEMS
Voice and data operations began merging in thelate 1980s. Simultaneously, applications forcentralized mainframe computing lessened asorganizations adapted to desktop workstations,networks, and distributed computing. A newgeneration of information managers emerged asnetwork technologies empowered end-users toimprove organizational communications (Opper &Weiss, 1992). However, the proliferation ofindependent development platforms caused networkcompatibility problems and a movement to control
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distributed systems from central operations (vonSimson, 1990).
In the 1990s, standards for open systems promiseto shift information responsibilities back toend-users, but without the interoperabilityproblems prevalent in the 1980s. The computingenvironment of the 1990s will be characterizedby client-server models supplanting hierarchicalmaster-slave systems, and peer-to-peerassociations among participants on the networks(Madron, 1991). Hybrid public-private computernetworks and information systems will be part ofa new information order featuring globalinterconnectivity and cooperative in:ormationservices (Elbert, 1992; Heldman, 1992). Inaddition, the infrastructure, rather than beinga system that supports other services, willbecome a programmable intelligence that can bedistributed, managed and reconfigured by theuser (Mulgan, 1991).
4.2 INTERNETWORK COMMUNICATIONS
Today's local-area network technologies such asethernet and token-ring, and wide-area networktechnologies such as X.25 and dial-up (modem-based technologies), are too slow to meet theneeds of tomorrow's distance education programs.The new generation of services solve LANinterconnection bottlenecks by offering highspeed communications and bandwidth on-demand(Lippis & Herman, 1991).
At the local level, the fiber distributed datainterface (FDDI) operates at 100Mbps and is anupgrade to existing ethernet or token-ring LANs.FDDI is presently used as a backbone technologyin campus environments to interconnect LANs, butis also a viable desktop technology for mediaintensive applications such as network orworkgroup-based simulations.
FDDI-II operates at 600Mbps+ and is competingwith Switched Multimegabit Data Service (SMDS)(1.5Mbps to 34Mbps+) as a technology/service tointerconnect LANs within a metropolitan-area.SMDS is also being tested as a national service.FDDI-II and SMDS will enable interconnected LANsto perform as one large LAN--an ideal situationfor distance education networks within the samecity. However, wide-area communications areneeded for most distance education applicationsand for access to remote information services.
Frame Relay is the immediate heir to X.25 forwide-area network (WAN) communications. It is a
fast-packet technology and operates at speeds upto 1.54Mbps. It has been demonstratedtransmitting full motion video. However,interactive video, complex multimedia, andinstructional applications featuring intensivemulti-user interaction, (i.e., computersupported collaborative work across a distance),will require both powerful local and wide-areanetwork technologies and a means to integrate avariety media. Asynchronous transfer mode (ATM)offers a solution.
ATM is one of the most talked about newtechnologies. It operates between 45Mbps and
1.26Gbps and is a solution for local-areanetwork communications, LAN-WAN integration, andwide-area multimedia internetworking (Cerf,1991; Pentland, 1992; Williamson & Titch, 1992).ATM is both a computer and telecommunicationstechnology. Computer networking enthusiasts viewATM as a high-speed network switch.
Telecommunications carriers use ATM in wide-areatelephony for central office and inter-exchangeswitching of video, voice, and data (viasynchronous optical networks). ATM willaccommodate both hardware and software-basedmultimedia and is programmable to enable usersto define personalized, intuitive services(Dunning, 1992; Sekimoto, 1992; Smyth, 1992).Thus, educators can integrate onto ATM all ofthe various media technologies comprising astate-of-the-art distance learning system.
The integrated Services Digital Network (ISDN)is a solution for student access into the locallaboratory LAN. It is a hardware-based voice-data-image telecommunications technology whichas a residential service offers medium speeddata (64Kbps to 128Kbps) with simultaneous voice(McQuillan, 1992). ISDN will enable students toconnect to campus LANs from home for multimediaand internet communications. National ISDN willlink interexchange carriers to provide access tomultiple switched services over a single circuitincluding digital dial-up, X.25, and Frame Relay(Lippis & Herman, 1991; Aloia, Fitzgerald, &
Kaufman, 1992). While the data speeds are ratherslow in comparison to other technologies,several companies are selling ISDN boards whichsupport desktop videoconferencing making ISDN aninteresting alternative for those desiring aturn-key solution or wishing to provide studentswith advanced telecommunications capabilitiesfrom home (Bajarin, 1992). Residential ISDNservices are priced comparable to existingtelephone rates.
Multimedia into the home at higher data ratessuch as 1.5Mbps can also be accommodated throughhigh-bit-rate digital subscriber line (HDSL) orasymmetrical digital subscriber line (ADSL)services on twisted-pair, copper plant(Sutherland & Litteral, 1992; Stewart, 1992).HDSL and ADSL have yet to be publicly priced forresidential applications. In the long term,broadband multimedia communications via fiber-optics are inevitable simply because themaintenance costs are so much lower than forcopper plant (Negroponte, 1991). The fullpotential of distributed multimedia applicationswill be achieved through broadband ISDN, theSynchronous Optical Network (SONET), andsoftware which supports collaborative work(Doll, 1992; Hoshi, Takahashi, & Mori, 1992).
A final problem confronting distance learningproviders and also solved by the newtelecommunications technologies involvesbandwidth allocation. New network applicationscan be programmed to provide only the bandwidthor media capacity needed at any given point intime. Bandwidth can be changed automatically andinstantaneously even for simultaneous sessionsin multiple locations making network managementnearly 'transparent' (Bessey, 1992). Foreducators, such capabilities mean that
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information and telecommunications budgets andservices can be established for sessions,groups, or projects. The cumulative effect isthat network managers may soon be able to treatbandwidth the way a utility treats energysources, converting back and forth betweensources and supplies depending on what ischeapest at the time (Anderson, 1992).
4.3 NETWORK COSTS
A cost-benefit analysis of the newtelecommunications technologies for applicationsin distance education is somewhat difficult toestablish using traditional measures. Distanceeducation technologies have generally beendeployed as independent applications specific toa predefined audience, and as such, costs aredistinct and measurable. Network-based,infrastructure technologies are pervasive,upgrading organization-wide communications andproviding benefits to an entire population. Inaddition, infrastructure development costs areoffset by reduced operating expenses andamortized across participants includingeducation, industry, business, and government.
Infrastructure costs are also difficult tobudget because networks may be established asvoice-data public telephony services, as datacommunications technologies, or as a mix ofpublic and private services (Casner & Deering,1992; Heldman, 1992). For example, improvementsin compression technology have cut the bandwidthneeded to transmit acceptable images forvideoconferencing to 1/75th of that required inthe late 1970s (Doll, 1992) making even the mostcomplex media transfers within the domain ofboth computer network and telecommunicationscarriers.
At the local level, costs for FDDI have fallendramatically and are available for $1200 to$2000 per node (Van-Mierop, 1992). For wide-areacommunications, frame relay services areexpected to fall to less than existing 56Kbps orTi service to bring network access under $100per month. Savings will be pronounced asmultiple remote sites access the public networkeliminating the need for expensive, dedicatedlines. Transparent LAN-MAN interoperability formetropolitan and wide-area communications can beachieved using SMDS at $550-$750 per month(Travis, 1992). Private ATM long distanceofferings, and the introduction of PC-based ATMcards, have expanded the potential of thetechnology to include true LAN-WAN integrationat gigabit speeds. ATM is presently expensive at$9000 per node, but costs are expected to fallto $1000 per node by 1995 (Johnson, A., 1992).ATM WAN switches will also process consumer andcommercial ISDN traffic.
5. NETWORK CURRICULUMS
Active learning, peer learning, integratedsubject learning, and real-world learning areimportant when designing distance or technologydelivered education (Knapper, 1988; Winkler,1992). Online, collaborative environmentssupport interactive learning. Within shared
environments, participants may experience avariety of information and perceptions as usersshare resources and experiences. The cumulativeeffect may be to produce not only new anddifferent information, but new and differentapproaches to learning, as participants serve asboth teachers and learners in partnership withother learners (Duning, 1990; Riel & Levin,1990).
A strong communications infrastructure is astrong ally for education, enabling students tointeract with rich intellectual resources,including distant teachers, libraries, andmuseums (Kay, 1991). Combining text, images,
sound, color animation, and full-motion video,multimedia will transform networks of desktopmachines into distributed workspaces ideallysuited to collaborative projects (McQuillan,1992). Networks may provide educational servicesto students at school, work, or home--completewith laboratory simulations, onlineconferencing, and collaborative computing.Building network capabilities into thecurriculum requires a strategic or phasedapproach.
5.1 PHASE 1: LABORATORIES
Interactive multimedia documents, self-containedhypermedia instructional programs, and computer-generated simulations enable students to engagein exploratory learning and master difficultconcepts on their own terms and at their ownpace. Simulations require a supportive mediaenvironment built around the simulation (vanJoolingen & de Jong, 1992) and multimediacommunications provide this support. Peoplelearn more, and more rapidly, when they cansimultaneously see and hear while practicing newconcepts (Hamilton, Smith, McWilliams, Schwartz,& Carey, 1992).
Multimedia or hypermedia instructional systemscan be implemented as stand-alone applicationsfor use in remote sites, or as network-basedresources integrated into computer-mediatedcommunications (Maule, 1991a, 1992b). Distancelearning systems which integrate voice and imageconferences, laboratory simulations, and onlinecollaborative projects require sophisticatednetwork management tools.
5.2 PHASE 2: NETWORK MANAGEMENT
Infrastructure-based services, wherein controland responsibility is diffused and embeddedthroughout the network, may be used to buildcurriculums which reflect the dynamic nature oftoday's workplace. Instructional processes canreadily be.adapted to reflect changes in theglobal economy. Network tools enable users tocreate collaboratively, and to rapidlydisseminate shared learning experiences.
Future distance learning systems will useadvanced telecommunications switching systems, avariety of interoperable networkingtechnologies, and a mix of public and privatetelephony, network, and information services(Heldman, 1992). Fortunately, new tools place
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network control in the hands of instructors.Software-based applications allow instructors toprogram telecommunications and wide-area networkservices (Jackman & Lee, 1992). Programmable,on- demand bandwidth will dramatically reducecosts for video conferencing and multimediacommunications. Wide-area networks will be fullyconfigurable to accommodate a wide variety ofsimultaneous communications (Lippis, 1992).
Network management tools enable instructors tomonitor data hubs, information servers, bridges,routers, and clients--all from their desktop(McBride & Brown, 1991). The software featuresX-Window technology, graphical interfaces,network maps, point-and-shoot commands, andcolor-coded icons for ease-of-operation. Thesemanagement tools enable instructors to monitorlaboratory simulations, oversee networkresources, and use simulations which spannetworks and operating systems while retainingfull collaborative and conference capabilities.Thus, instructors can dynamically initiate andguide student projects as groupware applicationsinternetwork students on distributed LANsallowing them to work, share information,conduct conferences, and dynamically accessinformation from distributed data bases,electronic bulletin boards, and other networkresources (Edwards, 1992).
ISDN will prove attractive as a service tointerconnect residential and small businesssites into educational networks and publicinformation services. A typical network-basedapplication may involve a shared workspace withparticipants simultaneously annotating andaltering memos, diagrams, spreadsheets, graphs,and other documents--all while conducting aconference featuring audio and short videosegments sent interactively or throughelectronic mail (McQuillan, 1992). Studentattendance at the lab may be optional as hometelecommunications services enable students toaccess network resources from local calls intothe laboratory LAN for simultaneous, multi-partyvideoconferencing, cooperative computing, andgroupware applications.
5.3 PHASE 3: INFORMATION SERVICES
Network-based services use a variety ofdifferent information search, retrieve, anddissemination mechanisms. Bitnet (or CREN),Internet, and Usenet are the major publicnetworks and host several interesting resourcesand network software applications. The servicesprovide comments and articles posted onelectronic bulletin boards and newsgroups,process messages to multiparty mailing lists,and provide files and programs for free andpublic file transfer (Johnson, J., 1992).Instructors can use infrastructure resources tosupplement reading assignments, to initiatestudent-student conferences with peers aroundthe world, and to serve as a platform fornetwork-based collaborative projects.
Network applications can be programmed asresearch aids for information access fromdistributed resources (Tennant, Ober & Lipow,
1992; Johnson, J., 1992). For example, 'Archie'
is a program which helps users locate Internetsites and media appropriate for anonymousdownloads. 'Hytelnet' is a hypermedia utilityfor locating Internet libraries and informationservices for remote login. 'xLibrary' is amulti-tasking hypermedia application whichallows multiple, simultaneous network services.'Wide-Area Information Servers' (WAIS) retrieveinformation from distributed databases, througha common interface, and are useful for keywordsearching across large library collections.
A new and popular application is the Internet'Gopher' for searching modular, distributeddatabases. It features a browsing tool andsubject-oriented menus to search, retrieve, anddisplay documents. Gopher servers have links toother Gopher servers enabling users to moveseamlessly from network to network, resource toresource. An even more sophisticated applications the 'World-Wide Web' which uses hypertext tocrganize and access resources from across theInternet. It goes beyond Gopher and WAIS byproviding pointers and chains within the text.These resources, when combined with online,interactive, multiuser communications, enableusers to conduct a conference whileinteractively retrieving information from aroundthe world. The Internet Relay Chat (IRC) is a
multi-user, distributed, multi-platform,client/server software system which supportssuch conferencing.
Electronic distribution lists enable instructorsto gather and distribute information across thenetworks. National mailing lists or 'listservs'also archive information for access throughelectronic mail commands making them useful forresearch. Comserve (vm.ecs.rpi.edu) is acomprehensive online resource offering mailinglist services, electronic professional journals,bibliographic reference databases, and academiccourseware. The Coalition for NetworkedInformation (cni.org) stores information onnational policy concerning infrastructuredevelopment. PACS-L (unmvm.bitnet) distributesthe latest information about public onlineaccess services. As the name implies, NetTrain(ubvm.ccbuff.edu) distributes network traininginformation.
Electronic newsletters may be distributedthrough prescribed mailing lists, or through thelistsery utilities described above. The NationalScience Foundation Network newsletter(merit.edu) keeps readers abreast of NSFsponsored Internet activities. The wide-areainformation servers newsletter (think.com)addresses the impact of programmed intelligencefor automated network information searching(WAIS). There is also a growing trend toward theelectronic distribution of trade and academicjournals. Indexing and archival featureseliminate tedious legwork for researchers andstudents.
As public domain journals become an establishedand accepted means of professional publishing,and the journals are archived in databasescompatible with wide-area searching systems, it
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is conceivable that researchers and studentswill enter search commands to scan journalsthroughout the word, locate needed sources, andretrieve appropriate data. Prominent electronicjournals include 'The Online Journal of DistanceEducation and Communications' (uwavm.u.
washington.edu), 'EJournal' (vacsc2.albany.edu),and the 'Electronic Journal of Communication'(comservevm.ecs.rpi.edu).
Library services and bulletin boards are some ofthe most popular online resources. There arepresently over 150 domestic and 120international online library catalogs withaccess by subject, title, author, and in somecases, key word and full text searching.European catalogs can be accessed through theNational Science Foundation relay server(sun.nsfnet-relay.ac.uk) which provides accessto the JANET information system of the OpenUniversity.
U.S. Government services include the NationalScience Foundation (nis.nsf.net), the NSFScience & Technology Information System(stis.nsf.gov), the National TechnicalInformation Service (osi.ncsi.nist.gov), NASA(spacelink.msfc.nasa.gov), and the Library ofCongress (dra.com). The National PublicTelecommunications Network has established'free-nets' as comprehensive bulletin boardsorganized to resemble electronic cities-complete with a city hall, library, post office,hospital, and town hall. Free-nets providepublic data communications services tocompliment the services of National Public Radioand National Public Television. Two of the morepopular free-nets are at Cleveland(cleveland.freenet.edu) and Case-Western(freenet-in-a.cwru.edu). Free-nets are a popularmethod for organizing information and should beconsidered for university-wide informationservices--including distance education.
6. DISCUSSION
The evolution to network-based informationdelivery seems a certainty. Success will bemeasured by the quality of the information andthe efficiency of the communication--asevidenced by the degree to which resources arereadily available to instructors and studentsthrough institutional information systems.Successful implementai-ion may require that userslearn new ways of performing intellectual tasksand new ways of thinking about communications(Mulgan, 1991).
High capacity, wide-area communication networksare expensive and necessitate shared and commonservices. Educators may take advantage ofcooperative networks and public informationservices to initiate partnerships with industryand government. Such partnerships might helpalleviate current training problems facingemployers. Infrastructure-based services alsoafford institutions the opportunity tostrengthen interorganizational communicationsbetween universities, local schools, and thecommunity.
The implementation of infrastructure-basedservices is timely as educational institutionsbecome increasingly aware of the need tointegrate their centralized and decentralizedinformation architectures, seek to determinewhether media transfer should be based on voice-data technology or high-speed internets, andrecognize the need for organization-widetraining and education to support informationmanagement within distributed and heterogeneousenvironments.
Instructors using networked communications andinfrastructure resources benefit from theconvenience of desktop communications, from theapplication of an easily assimilated mechanismfor increasing interaction among students, andfrom the implementation of network resourceswhich serve to keep students abreast of thelatest information in their field whilesimultaneously aiding them in their efforts toestablish ties with peers in industry, business,and government. Students appreciate theconvenience of being able to communicate fromhome into laboratory LANs and for exposure tothe wealth of knowledge available to themthrough the global information networks. One ofthe more interesting aspects of the newinformation technologies is that they enableusers to shape their personal learning programsand learning environments.
Additional research is needed to determine theproper mix of the various communicationtechnologies; to ascertain the impact ofnetwork-based communications on traditionalinformation structures; to determine informationand design processes for the distribution ofinformation to various home, work, and socialenvironments; and to determine applicationdesigns to achieve specific learning outcomes.
7. CONCLUSION
Available network-based distance learningtechnologies support multimedia communications,on-demand conferencing, and distributedworkgroup applications. However, the systemsintegration necessary to fulfill the promise ofsuch technologies has been slow to evolve due tothe unusual nature of developing infrastructureservices. Eventually, the issues will beaddressed as institutions evolve intodistributed information management, adopt inter-organizational communications, evaluatealternative carriers for wide-area andmultimedia communications, and discover the needfor cooperative infrastructures to accomplishtheir learning objectives.
The high cost of switching technologynecessitates shared equipment and partnershipsamong business, industry, government, andeducation. Given the need for workforceretraining, and the impartial nature ofeducation, distance learning providers may beuniquely qualified to prototype society-wideinformation applications and be instrumental ininfrastructure design and development.
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THE CONTRIBUTION OF DISTANCE HIGHER EDUCATION TO NATIONAL DEVELOPMENT INPACIFIC ISLAND COUNTRIES
Hayato Yamanaka & Toshio KobayashiNational Institute of Multimedia Education
Chiba, Japanand
Michael R. OgdenUniversity of Hawaii At Manoa
Honolulu, USA
1. ABSTRACTOne of the major purposes of this paper is to present some of the preliminary results of research initiated by the NationalInstitute of Multimedia Education (NAME) in Japan, in cooperation with the University of the South Pacific (USP), on theimpact of distance higher education in the South Pacific. Specifically, this paper will discuss the results of attitudinal surveysand extensive interviews conducted with students from almost every Pacific Island member country of USP and from awide
range of backgrounds. The implications of these results will be discussed against the background of national developmentaspirations, the role, function and effectiveness of satellite based tutorial instruction for higher education, and the potentialsocio-economic effects of the provision of extension program services on the respective Pacific Islands societies. Finally,issues will be raised to highlight possible directions of future study and application and what role Japan, or other rimcountries, could play.
2. INTRODUCTION
The countries of the Pacific Islands region are spread acrossan area of ocean three times the size of Europe and farlarger than the continental United States, yet possess anaggregate land area of less than 63 thousand squarekilometersan area no larger than Denmark. And,excluding Papua New Guinea, there are little more than 1.5million people living on the more than one thousand islandsthat make up more than a dozen separate countriesscattered across this vast ocean area.
Likewise, all of these Pacific Island countries, with theexception of Nauru, have aid-dependent, or at least aid-augmented, economies with total per capita aid flowsranging from US$62 in Fiji to US$2,800 in Niue. Likewise,the per capita gross national product (GNP) also varieswidely, ranging from US$430 in Tuvalu to US$1,770 in Fijiand US$1,958 in the Cook Islands (Pacific EconomicBulletin 1992, June).
English is used in both conventional and distance educationand is a reflection of the Pacific Islands collective colonialheritage. For the majority of university students, English istheir second language or, at least, not their mother-tongueas there are approximately 265 languages in the region(UNESCO 1992). Although English is everywhere taught inschools, standards vary widely and are often quite low.
The education systems in the Pacific Island countries aregenerally separate, different and autonomous; reflectingcolonial and/or missionary history using a British derivededucational model with the exception of the Marshall Islandswhich follows a North American model, and Vanuatu whichuses a combination of both British and French models.
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In tertiary education, there are some 13,000 full-timestudents throughout the region. Almost a third of them atthe University of the South Pacific (USP), the onlysignificant regional institution teaching at the universitylevel. The other two-thirds are at some forty institutionsthroughout the region, half of which have fewer than 100students each. There are, in addition, nearly 3,000 studentsstudying at universities outside the region, mostly in the rimcountries. This distribution of students is in many waysuneconomical. For example, at the university level the costof a student at a rim university is three or four times the costat USP for a comparable course. It was recently estimatedthat the total overall annual cost of all 16,000 students issome US$85 million, of which about 70 percent is spent onthe one-fifth who study outside the region, and only 30percent on the four-fifths studying in the region (Caston1992).
Thus, if there is a region of the world that could benefit froman educational network, it is the Pacific Islands region. Ifthere is a group of academics who need to link with eachother and with colleagues elsewhere, the answer is alsothose working in the tertiary institutions of the PacificIslands (Wah 1992).
With the founding of USP in 1970, it was envisioned thatsignificant alteration in the provision of higher education inthe Pacific Islands region would be realized and, throughcooperative efforts, the tyranny of distance might beovercome. USP is a regional university, as apposed to anational university, established to serve the higher educationneeds of 11 Pacific Island member countries: Cook Islands,Fiji, Kiribati, Nauru, Niue, Solomon Islands, Tokelau,Tonga, Tuvalu, Vanuatu and Western Samoa. In 1991 theMarshall Islands joined USP as the 12th member of theconsortium and the first to be added since its founding. The
r
main campus is located at Laucala Bay in Suva, the capitalof the Republic of Fiji, with an Agricultural campus locatedat Alafua in Western Samoa. There are also two otherinstructional and/or research complexes, located in Vanuatuand Tonga, as well as the research oriented AtollDevelopment Project in Kiribati. For students studyingthrough the USP Extension Program, regional centers havebeen established near the capital cities of ten of the membercountries (Tokelau is served from Western Samoa and theMarshall Islands have yet to establish a regional center).
This paper focuses on research conducted by the NationalInstitute of Multimedia Education (NIME) with financialsupport from the Ministry of Education in Japan and incollaboration with the University of the South Pacific. Frommid-1991 through early-1992 survey and interview teamsvisited each of the extension sites as well as several rimcountry locations to collect information on the life-styles andattitudes of students learning through the distance educationprograms provided by the Extension Services of USP and/orgraduates of such programs. Such research was initiatedbecause, despite its functional importance, research on theactual operation and dynamics of USP's regional studycenters, the role and impact of satellite based tutorials, aswell as the impact of distance higher education on students'social mobility and their attitudes toward development, wasbasically non-existent.
3. OBJECTIVES AND METHOD OF NIME RESEARCHACTIVITIES IN THE PACIFIC
Since 1989 NIME has been conducting research to clarifythe state of distance higher education institutions in Asianand Pacific countries, financially supported by the Ministryof Education in Japan. During 1989, SukhoihaiThammathirat Open University in Thailand and theUniversitas Terbuka in Indonesia were selected as theresearch sites. In 1990, the Indira Gandhi Open Universityin India and the Allama Iqbal Open University in Pakistanwere also studied by the research team. For 1991, USP'sExtension Services was selected. Each research projectattempted to clarify the real state of distance highereducation for each institution. The overall research projectis expected to continue through 1993 and will include thesending two research teams to Korea and Malaysia (initiatedin 1992) as well as China, which will be studied as the lastand largest research site. When completed, this ratherambitious project should provide educators with an overallimage of distance higher education in Asia and the Pacificregion.
3.1 PACIFIC ISLANDS RF_SEARCH OBJECTIVES
The 1991-92 research project in the Pacific Islands regionhad the following two objectives:
1. To examine the current state, role and effect of USPExtension Services and its various regional centers. Also,the function of each regional center was to be evaluated inrelation to the respective geographic, socio-economic andcultural conditions present in each island society in which
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the Extension Program is operated. Special focus wasplaced on this aspect of the study in order to determine howregional centers perform in relation to the reciprocal processbete een internal and external factors of socio-economicdevelopment present in the island societies.
2. To see how the USP Extension Program affects nationaldevelopment in each island society; especially humanresource development. Focusing on both the social andregional mobility of students and graduates of the distanceeducation program, the role and function of distanceeducation were to be examined in terms of the humanresource development aims and goals within the respectiveisland society. In addition, this research tried to clarify theunique characteristics of human resource training throughUSP distance education in comparison with those individualswho received their training in the metropolitan universitiesof the Pacific Rim; countries such as Australia, NewZealand, Hawaii and the West Coast of the United States.
3.2 ME7710DOLOGY
This study placed a great deal of emphasis on fieldinterviews with students and graduates. Needless to say, theexamination of each learners' behavior is one of severalimportant factors to be assessed in any research concernedwith education's impact. However, many research programson distance education conducted in the past have tended todepend largely on data collected through the centraladministration of the distance education institutions, ratherthan through visits and observations of the "realities" of thelearners themselves. This tendency might be due to thedifficulties and inconveniences of visiting remotely locatedstudy centers, especially those in Asian and Pacificcountries.
In view of the principles of educational research, however, itis nearly impossible to grasp the real state of distanceeducation without field interviews. In this study, weendeavored to persevere in the application of interviewtechniques as the principle method of our research in orderto compensate for weakness we saw in previous studies ofthis type.
The responses obtained through these surveys andinterviews were compared among the six different studentand graduates categories. The six categories are as follows:
1. Students resident at USP's Suva Campus.
2. Island students learning through the Extension Programand resident in their home country.
3. Islanders studying in metropolitan universities on thePacific Rim; including, rather non-geographically, Hawaii.
4. Island residents who completed the Extension Program intheir home country.
5. Islanders who graduated from USP Suva Campus andwere resident in any of the island locations of the study.
6. Isla.iders remaining in Pacific Rim countries after theirgraduation from metropolitan universities in these countries.
Interviews covered a wide range of subjects relating to theindividual's learning behavior and motivation, life-style, life-history of their education, social mobility, social status andexpectation, ethnic identity, and their motivation toparticipate in nation building (self-defined by therespondent). We selected approximately 150 samples ofstudents and graduates from the main campus and eachregional center. In addition to these, we also selected about50 samples from students and/or graduates from universitiesin metropolitan cities outside of the South Pacific Region;such as Honolulu, San Francisco and Berkeley in the UnitedStates, Auckland, Palmerston North and Wellington in NewZealand, and Brisbane in Australia.
By adopting such a research methodology, we could obtainsignificant and interesting findings on the students andgraduates of higher education institutions in the greaterPacific Region.
4. OVERVIEW OF DISTANCE HIGHER EDUCATION INTHE PACIFIC ISLANDS
As was mentioned earlier, distance education in the PacificIslands region has one major provider, the University of theSouth Pacific. Consequently, the overview of distanceeducation in the Pacific Islands covers mostly the activitiesof USP's Extension Services. However, it should be notedthat in the early 1970s, there was much activity conductedover the PeaceSat satellite network on which USP and otherinstitutions in the Pacific region experimented with the useof satellite tutorials and teleconferencing to support distanceeducation as well as other educational activities (1).
Extramural Studies began in 1970 and were initiallyoperated by the School of Education (later renamed theSchool of Humanities). Later, in 1971, Extramural Studieswas reorganized as Extension Services with its own directorand facilities. The first distance education courses wereoffered primarily in education and were oriented toward aDiploma in primary and/or secondary education with in-service primary and secondary school teachers as theprinciple clientele. Today, Extension Services offerapproximately 175 courses leading to a Certificate, Diplomaor Degree in 30 different programs along with vocationaland continuing education programs. In 1990, there wereapproximately 6,451 e.lrollments in Extension Services(mostly in-service teachers or public servants) and about _ 7
full-time staffacademic and non-academicas well asmany part-time local lecturers and staff (2).
The distance courses are primarily print based. Satellitetutorialsexperimentally implemented in 1973 on PeaceSatand, since 1986, conducted via USPNET using theINTELsAT VI satelliteare used to supplement learningpackages with attendance being optional. Studentsprincipally study from the core materials, developed by thecentrally located curriculum development team. Theselearning packages usually consist of at least two printed
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texts; the Introduction and Assignments booklet, and theCourse book. Ancillary components might include aReader, textbook(s), audio tapes and/or video tapes. USP'straditional commitment to its distance students is to providethem with the home-based teaching packages containing allthat they need for learning and mastery of the Extensioncourse subject matter (UNESCO 1992).
Other centrally provided instructional support services forthe region include satellite tutorials on USPNET, visits tothe regional Extension Centers from course tutors based onthe main campus in Suva, and personal correspondence withstudents as well as teaching through assessment. The needfor such interaction between the students and the instructorsis great, but is in some cases poor to non-existent, except forcomment on assignments (which can occasionally arrive tostudents after the final examination!). The feelings ofisolation experienced by many distance education students ismultiplied by the meager postal system in some countries orexacerbated by the inefficient, expensive or inadequatetelecommunications systems both in-country andinternationally (Wah 1992).
For the above reasons, the in-country educational supportprovided by the national USP Extension Centers is veryimportant. The Extension Centers in each member countryof USP serve as the clearinghouse for all materials andassignments as well as functioning as the liaison betweenlocal students and remote teachers. In many locations, thesecenters provide, on a regular basis, continuing educationradio programs along with occasional television programsand public lectures. Also, face-to-face tutorials with part-time local tutors and/or peer group tutorials provideadditional support to the distance education materials. TheExtension Centers are also the site of the teleconferencingfacilities for satellite tutorials, library services, computerfacilities, classrooms and study space. Many centers alsocirculate bulletins or newsletters for their students, offertraining in study skills, course counseling, practicallaboratory sessions (were possible and required), and"bridging" courses. For many Pacific Island students, thenational Extension Center is USP.
5. HUMAN RESOURCE DEVELOPMENT AND USP
Following this somewhat lengthy, but necessary,introduction to the form and nature of distance education inthe Pacific Islands region, we turn our attention to theoutcome of our study. What did the results of our researchreveal about the impact of distance higher education ondevelopment in the Pacific Islands? The nature of the dataprecludes an easy answer, however, our findings did revealsome interesting results which are presented in summarybelow (3).
First of all, what did our study reveal about the relationshipbetween human resource development and USP distanceeducation? In part, it was found that USP Extensionstudents and/or graduates seemed to be more motivated towork or study abroad than there counterparts who werestudents and/or graduates of USP's residential campus, or
even those who attended metropolitan universities in the rimcountries (Table 1). For many Extension students, thedistance education programs provided by USP seemed towhet their appetite to move further afield. It appears thatwhile participating the Extension program they became moreinclined to want to move abroad desiring to seek out bettereducational or economic opportunities than those availableat home.
This situation seems unlikely to change, at least in the nearfuture, and would lead one to expect a continuing andsevere shortage of qualified man power in the Pacific Islandcountries. However, this would only be a superficialconclusion. In reality, many Extension students areparticipating in distance education as a way of gaininguniversity level credits towards their desired degree whilemarking time until they qualify for a government scholarshipto study either at USP's main residential campus in Suva, oroverseas at a metropolitan institution. Indeed, for suchcountries as Kiribati or Tuvalu, the USP Extension programfunctions as a means of providing an opportunity for thosewho completed their secondary education but failed toreceive a government scholarship, to once again re-apply fora university level education rather than enter the job marketor seek vocational training. Furthermore, many Extensionstudents are older than average university freshmen and arealready employed and/or have families and are unwilling tocommit to full-time studies until their future financialsituation as a student is more secure. Also, PacificIslanders, as with anyone else, want for themselves and fortheir children the expansion of personal capabilities thathigher education brings. For many Extension students wholive in very small communities, this also involved a desire totravel, to experience living elsewhere, or even to emigrate.
For those who choose to migrateand there are some whodo (4)it results less from their exposure to Extensionstudies and more from the almost complete integration ofthe island labor markets (at least for the professionally andtechnically qualified) into the wider Pacific labor markets ofAustralia, New Zealand and even the United States andCanada. For such individuals who maintain strong familylinkages to their home communities, there is also the likelysending back of remittances. In Western Samoa and Tongafor instance, such remittances are the largest source offoreign exchange (Ogden 1989). From this point of view,people can be seen as a valuable export, as long astraditional and extended family loyalties continue to operatein ways that ensure they go on sending home a part of whatthey earn overseas.
Another interesting result of our researchhaving impacton human resource development in the islandsis shown inTable 2, which describes the degree of job satisfactionamong the six different categories of respondents and wasused as an indicator of an individuals motivation to seekchange. Of these categories, according to the data, USPExtension graduates showed the greatest levels of discontentwith their present jobs and, likewise, the largest gapconcerning job satisfaction before and after the enrollment.In other words, by enrolling in the Extension program, the
207
student's level of discontent seems to be magnified further.The trend seems to be even more striking when the economyof the country is weak, job opportunities are slim, and thedesire to migrate greater.
Perhaps this is to be expected, after all, if an individual isdissatisfied with their present employment they are likely toseek change. However, in a constricted job market such asthat found in most Pacific Islands, such aspirations result infrustration. If such frustration becomes perceived asinsurmountable, an individual either gives-up or goeselsewhere; except in the Pacific Islands.
For most Pacific Islanders, the government is the largestemployer and the employer of choice offering slightly bettersalaries, better job tenure, and a certain level of social status.Unfortunately, there is also little opportunity for careeradvancement, and subsequently higher salaries, withoutobtaining a higher level of training and education. ManyExtension students already experiencing some level of jobdiscontent, and frustration at seeing recent universitygraduates promoted above them, see participation inExtension studies as a means of job mobility. Islandgovernments promote this by re-embursing tuition to publicservants who pass their courses and pay increment raises tothose who obtain certificates, diplomas and degrees.However, other factors begin to come in to playperhapsan individual's desire to travel to other places to obtain ahigher degree, to gain a higher salary overseas, or study in afield not offered via Extension studiesand frustration anddiscontent build.
From these findings it may be inferred that the moreeducation islanders gain through USP Extension programs,the more they become inclined to move abroad; or at leastthe more likely they are to contemplate migration as anoption to their present circumstances. Ironically, however,when we conducted the same survey in the rim countries, wefound very few Islander students among the intervieweeswho had previously been enrolled in the Extension programin their home islands. This seems to indicate that, in reality,the number of those trained through the Extension programflowing out of their home islands is much lower than was tobe expecteddespite the likelihood expressed by many ofthe interviewees of this category. An alternative assessmentof this situation could also indicated that they are going toone place, USP's main campus in Fiji, where worries ofgaining credit for their extension courses is moot and thepossibility of gaining alternative employment in one of themany regional organizations located there is equallyattractive.
Thus far, from the preliminary findings of our research, itmay be stated that USP Extension Services contribute toisland countries in promoting the expansion of professionalknowledge and skills necessary for social and nationaldevelopment. At the same time, it also contributes to apossible increase in Islanders educated or trained throughthe Extension programs feeling frustrated because of ageneral lack of job mobility or scarce employmentopportunities commensurate with their educational
background. This may in turn result in some leaving to seekbetter opportunities in the rim countries and taking theireducation and skills overseas for application in a higher-wage job market.
6. EVALUATION OF USP AS A REGIONAL DISTANCEHIGHER EDUCATION INSTITUTION
In the assessment of USP's Extension Services as aneffective institution for the delivery of tertiary education at adistance, we asked respondents to indicate how beneficialthey thought USP Extension courses were in obtainingemployment or promotions in their home countries (Table3). Our preliminary results imply that students attendingmetropolitan universities evaluated the program leastfavorably followed by those currently attending USP's Suvacampus. Extension students, as would be expected, gavethe program the most positive evaluation with the advantageof being able to continue frill -time employment whileattending Extension courses (and the encouragement to usepractical application of their course work in theiremployment; and conversely, application of work relatedexperiences in course assignments) as its primary strength.Fro.' this it may be inferred that the formation of a mildform of social stratification may be emerging in the islandsocieties based upon the "prestige" attributed tometropolitan university graduates, USP Suva Campusgraduates, and those completing the Extension Programs (inthat order). This was also mentioned in the interviews withislanders now playing important roles in the local, regionaland/or international scene.
6.1 THE EXTENSION CENTERS
The USP Extension Centers, which form a unique and vitalpart of the USP system, appear to be under strong influencesdetermined by the socio-economic circumstances of theirrespective island country. Therefore, the facilities andservices provided_vary from one center to another. Table 4shows how regional services vary among the membercountries.
It also appears that these centers have the potential todevelop in ways that excel anything most USP membercountry governments could conceive (Ogden 1992). Itwould therefore seem important that USP's ExtensionCenters be seen not only as a viable means of providinghigher education at a distance, but also that they foster astrong sense of belonging to the communities to which theyserve; since for many, the Extension Centers are USP.
Of these Extension Centers, some have large enrollmentsand excellent facilities and equipment similar to those in Fiji.Whereas there are countries such as Tokelau that do nothave their own facilities and are thus further disadvantagedby having to be served by a center in an adjacent country.Also, in the utilization of the communication satellite, it wasfound that there was a gre:it gap between and among themember countries. Many of the Extension Centers areprovided with free or very low cost access to the USPNETby their local telecommunications provider and therefore
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capable of communicating via INTELSAT. Alternately, thereare some countries, such as l iauru or Niue, that have tosubstitute HF radio contact for their tutorials and thereforesuffer from bad audio quality and generally inadequatecapabilities. Finally, there is the case of Kiribati which hasthus far been refused other than commercial rate access tosatellite facilities by the local telecommunications companywhch it cannot afford and is thus cut off from participatingin USPNET. In all cases, much technical (and political)difficulty is experienced with "last mile" connections andsome locations are forced to use break-down proneequipment that is some twenty plus years old.
6.2 SATELIJTE TU7'ORIALS
USP, in many ways, pioneered the use of communicationsatellites for distance tutorials in the Pacific region. Today,the combined satellite/HF system which makes up USPNETis used heavily for administration and teaching.Administration includes weekly staff meetings on distanceeducation matters, the continuing education program,materials dispatch monitoring and directorate-to-centerbusiness, and point-to-point sessions. Whereas instructionaluse of the satellite/HF system still continues, it hasdiminished in importance due to technical difficulties (Wah1992). However, when questioned about the possibleeffectiveness of satellite based tutorials, we obtainedpredominately positive responses, as shown in Table 5. Thisseems to indicate that many consider satellite basedteleconferencing for educational purposes to be anappropriate technology vital to the promotion of highereducation in the Pacific Islands.
Rather disappointing, however, was the evaluation ofsatellite teleconferencing by students who actuallyparticipated in tutorial sessions. This data also showed ahigh degree of variation from one county to another. In theanalysis of the evaluation research conducted by the USPExtension Services in 1991 (and collaborated by our data),the appraisal of the practical effect of satellite based tutorialswas relatively low, as indicated in Table 6. Interestingly, theevaluation was relatively high in Fiji, Solomon Islands andWestern Samoa, while it was very low in Nauru andVanuatu. Positive responses tended to stress the importanceof gaining feedback from the instructors who mark theexams and learning from fellow satellite tutorial participants'questions. Negative responses tended to concentrate on thepoor audio, complexity of discussion, and/or the time suchtutorial sessions were held. It should be noted that this gapin evaluation among islands may be due not only to thetechnical aspects of the satellite tutorial sessions (audiointerference) but perhaps also to extenuating socio-linguisticfactors.
Although seeing the virtues to satellite based instruction,USP still has much difficulty in maintaining its distanceeducation system, utilizing in some places technology that isat least twenty years old. To this end, the university has alsobeen actively seeking to improve the system. A highpowered committee of the vice-chancellor was recentlyformed to spearhead this endeavor and has recently
F. , .
developed a document outlining the requirements for aproposed upgraded system, which was approved by USP'sCouncil in October 1992 (Wah 1992). USP remainscommitted to providing distance education to its membercountries and is seeking the means to do so with relevantcommunications technology.
7. CONCLUSIONS
Today, institutions of higher learning in both the developingand developed countries of the Pacific are increasingly beingasked to adapt more quickly to the changing technologicaland educational needs of the societies they serve. As such,universities are now not only the agents of change, but arehaving to undergo radical change themselves as they adjustto meet the educational needs of the 21st Century (Ogden1992). USP is busy attempting to build the necessarytelecommunications infrastructure that will guarantee theirstudents and faculty equitable access to informationregardless of geographic location. The goals are to makethe equipment of distance training as transparent as possible,to improve the delivery of educational materials, and topromote the financial, socio-cultural, and political resourcesto bring this about. Many see such efforts as defining thecore of the respective Pacific Island country's national goalsfor human resource development; both through theinnovative organization and delivery of institutionalizedlearning as well as non-traditional forms of distance andcontinuing education. The results of our study indicate thatthere is still much to be done.
Toward realizing this, a network of "human developmentcenters" has been established in Okinawa, Fiji, and Hawaiifor Pacific economic and technical cooperation by creating aflexible technical transfer system in which one can choose aplace for study in accordance with the technical level andcontent desired and needed by his/her home country.
Also, the "human development network" structure will mostlikely be the basis for any progress of individual projectsanticipated hereafter. As such a project, the NationalInstitute of Multimedia Education has been promoting aproject called the Partners Project, to establishing aninternational educational network beginning some time in1993 using various innovative communication technologiesavailable on the ETS-V satellite. However, this is still at theexperimental stage and yet to be implemented fully.
8. NOTES
(1) For more information on the early use of PeaceSat see,M. Ogden, D. Teoh & V. Young (1984). The satellitethat would not die: A case study of the PeaceSatProject. (unpublished manuscript) Background Paperfor Working Group #15 Learning Networks, PTC85,Honolulu,
(2) Most faculty in, abers are full-time employees anddivide their work duties between non-distanceeducation and distance education instruction. Almostall of the part-time staff are employed by the Extension
209
(3)
Centers and work only in support of distance education;their numbers fluctuate from semester to semester andare employed at local discretion.
The authors wish to thank fellow research team memberDr. Fumihiko Yoshida, Associate Professor ofinternational relations at Tokai University, forprocessing the original raw data and providing theinitial statistical reports which were used in thetabulation of the data presented in this report.
(4) According to a public lecture given by former USPVice-Chancellor Geoffrey Caston, a World Bankfunded tracer study of 1985 and 1988 cohort graduatesfrom four Pacific Island nountries (Fiji, Kiribati,Solomon Islands, and Western Samoa) revealed that avery high proportion of these graduates emigrate to therim countries. Of the 1985 and 1988 cohort graduates,about one-third are now working overseas. Moreover,large numbers of those who had not yet emigrated saidthey were likely to do so in the futurt (Caston 1992).
9. REFERENCES
Caston, G. (1992, November 10). Higher education in theisland Pacific: A political economy. (mimeo) ThirdAnnual Bank of Hawaii Pacific Islands StudiesDistinguished Lecture. Honolulu, HI: Center for PacificIslands Studies, University of Hawaii, Manoa.
Ogden, M. (1989). The paradox of Pacific development.Development Policy Review, 7, (4), 361-372.
Ogden, M. (1992). Higher education, telecommunicationsnetworks and national development in the PacificIslands: A response with focus on the future.Respondent's report presented at the internationalsymposium, The Impact of Higher Education on SocialTransformation in Asia and the Pacific, 16-18November, Chiba, Japan: National Institute ofMultimedia Education.
Pacific Economic Bulletin (1992, June). Statistical annex.7, (I), 55-90.
UNESCO (1992). Survey of distance education in the SouthPacific. In A survey of distance education in Asia andthe Pacific (Volume II Republic of KoreaVietnam),Pp. 645-666, a study conducted by the National Instituteof Multimedia Education (ED-92/WS/7), Chiba, Japan:UNESCO and NIME.
Wah, R. (1992). The University of the South Pacific:Educational telecommunications network. Paperpresented at the international symposium, The Impact ofHigher Education on Social Transformation in Asiaand the Pacific, 16-18 November, Chiba, Japan:National Institute of Multimedia Education.
e, dfntl e, t oe etn o ut eiiey nt Ttl. Suet t UP Sv aps 3 3 1 0 7
4.% 4.% 1.% 002 sad suet erig truh 1 4 1 0 4 2 3 0
te Etnin Porm 4.% 3.% 1.% 673 sad suet n mtooianvriis i h aii i 15 31 54 .%. Iln eiet rdae rm 1 1 3 2 1 1 7
UP Sv aps ad ohr 6.% 1.% 1.% 595 sad rsdns cmltd te 5 4 4 1 1 4
Etnin Porm 3.% 2.% 2.% 71
6 sadr eann n te Pcfc 1 0 4 2 2 1 8
Rm cutis 56 22 11 11
Cmie aeois 236 33 .% 00
Ttl 7 8 1 3
5.% 2.% 1.%
able 1 Expectation for Immigration
e, dfntl e, t oe etn o ut eiiey nt Ttl1 tdns a S ua Cmu
22 4.% 43 .%. Iln tdns lann hogh xeso rga 41 08 .% 003 sad suet n mtooianvriis i h aii i 00 33 .% 00
4 sad rsdns gautd foS ua Cmu n tes 6.% 2.% 1.% 00
5 sad rsdns cmltd te 9 5 1 0 1 5
Etnin Porm 6.% 3.% 67 .%. Ilnes rmiig i h aii
i onre 7.% 1.% 00 .%obnd ctgre
86 57 .% 29Ttl 18 7
14 24 .% 11
Is there any country /city in which you want to work or study in the future?.
e oa1 tdns a S ua Cmu
40 602 sad suet erig truh 1 6 2 3 3 9te Etnin Porm 4.% 5.%. Iln tdns i erpltn 9 2 6 3 5uieste n te Pcfc Rm 2.% 7.%. Iln eiet rdae rm 5 1 2 1 7UP Sv aps ad ohr 94 065 sad rsdns cmltd te 8 7 1 5Etnin Porm 5.% 4.%. Ilnes rmiig i h aii
i onre 21 79Cmie aeois 2 0 1 6 3 6
5.% 4.%oa 2 1 1 4 16
87 13
Table 2 Job Satisfactionjob
T
Were you satisfied with the before you entered your University/LISP Program?
Table 3 Evaluation of USP Extention ProgramsIn general, do you think graduates from USP Extension Program are benefited from the aspect of obtaining a job or promoting to a better position?
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Table 4 Conditions of Re ional CentersCountry Regional Center Independent Facilit Participation in USPNET Access to INTELSATCook Islands x x x x
Fiji x x x
Kiribati x x Disconected in 1988Nauru x - x HB radioNiue x - x HB radioSolomon Islands x x x x
Tokelau - x x
Tonga x x x x
Tuvalu x - x HB radioVanuatu x x x
Western Samoa x - x HB radio
Table 5 Evaluation on the Satellite TutorialsDo you think satellite-used tutorial is effective for the advancement of Iearning actin
Yes, definitely Yes, to some extent Not quite Definitely not TotalFiji 1 2 1 5 2 0 2 9
41.4% 51.7% 6.9% 0.0%Polynesia 3 2 1 3 7 1 5 3
60.4% 24.5% 13.2% 1.9%Micronesia 10 3 4 0 17
58.8% 17.6% 23.5% 0.0%Melanesia 13 6 2 0 21
61.9% 48.6% 9.5% 0.0%The Pacific Rim Countries 2 2 6 2 0 3 0
73.3% 20.0% 6.7% 0.0%Total 8 9 4 3 1 7 1 1 5 0'
59.3% 28.7% 11.3% 0.7%
Table 6 Evaluation of Satellite TutorialsHow helpful were any satellite tutorials you attended?
Cook Is. Fiji Kiribati
220.0%
Niue
0Nauru Solomon Is.
0 80.0% 13.1%
Tonga
00.0%
Tuvalu2
14.3%
Vanuatu
0
0.0%
W. Samoa
216.7°k
Total
5 4Very helpful 1
3.7%3 9
22.4%Of some help 0 1 2 3 0 0 6 0 1 0 3 2 5
0.0% 6.9% 30.0% 0.0% 9.8% 0.0% 7.1% 0.0% 25.0%Of hardly any help 0 3 1 0 0 0 1 1 0 o
0.0% 1.7% 10.0% 0.0% 0.0% 16.7% 7.1% 0.0% 0.0%Did not attend any 2 6 12 0 4 0 5 4 7 5 1 0 1 4 7 2 3 8
96.3% 69.0% 40.0% 100.0% 77.1% 83 3% 71.4% 100.0% 68 3%Total 27 174 10 0 5 61 6 14 14 12 323
211
The Georgia Vocational Education Network:Training, Econoric, and Technical Implications
Eric N. BarnhartCommunications Laboratory
Georgia Tech Research InstituteAtlanta, Georgia 30332 USA
Tel: 404-894-8248
1. ABSTRACT
The Georgia Tech Communications Laboratory, working through theGeorgia Center for Advanced Telecommunication Technology (G'.:ATT)is pursuing the development of the Georgia Vocational Education
Network (GaVEN). The proposed network is focused on the goal ofreaching a vital group with new technology and educational
resources: the 180,000 students in Georgia's Vocational Trainingand Adult Education System. The long-term vision is to migrate
to SMDS and eventually B-ISDN services, providing networkcapacity that can be utilized by not only the education centers,
but businesses, government and other entities.
2. INTRODUCTION
It has been widely recognized that thelink between workforce education andeconomic development is strong. Inrecognition of that link, a VocationalEducation Network is proposed for Georgia(GaVEN).
This paper discusses the proposed approachto network development, desired servicesand benefits, expected payoff, and theunique partnership pursuing the project tobridge the gap between the growing economyof metro-Atlanta and the rest of thestate. Providing connectivity to theState's adult education centers will putunprecedented network capacity withinthirty miles of more than 95 percent ofGeorgia's population.
Since 1988, enrollment in the state'stechnical schools has jumped 38 percent.Many education and economics experts havequestioned whether the state's vocationalschools are up to the task of educatingworkers to compete in the Globalinformation economy. "Informationeducation" of rural Georgians is critical:outside metro Atlanta, only 16 percent ofthe population over age 25 have a collegedegree.
The GaVEN initiative seeks to meetchallenges on four fronts:
to capitalize on existing momentum inseveral key telecommunications andrelated information industries;
to develop (through a leveraging oftechnology and educationalinfrastructure) a well-trained andready workforce;
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to catalyze growth in informationintensive industries throughdevelopment of telecommunicationsinfrastructure in the form of"information highways" in all ofGeorgia;
to focus limited resources onfulfilling the promise throughindustry, university, and governmentpartnerships and initiatives.
A functional GaVEN will be pursued throughthe Georgia Center for AdvancedTelecommunications Technology (GCATT).GCATT is a telecommunications-focusedelement of the Georgia Research Alliance.The Research Alliance fosters cooperationbetween the business community, governmentand six key research universities inGeorgia.
GCATT is currently emphasizing manyprograms in basic and applied research,service programs in distance learning andtelemedicine, economic development andpublic policy issues. Several keyindustry players have expressed interestin participating in the networkdevelopment in a university/government/industry partnership.
3. ONGOING INITIATIVES
A key step in the development of the GaVENwill be to play off existing initiativesand the existing communicationsinfrastructure for education. Forexample, the ongoing Georgia ClassConnectDistance Learning trial was initiated byBellSouth, NEC America and Georgia Tech in1991. The trial is based on two-way videoand audio using DS-1 circuits. Currently
-
involved in the trial are four highschools in metro Atlanta and Columbus, aswell as Georgia Tech, the University ofGeorgia, Morris Brown College and ColumbusCollege.
This trial and others like it provide anopportunity to utilize "advanced"telecommunications technology in readyingthe workforce of tomorrow with skills thatwill be necessary in the information-basedeconomy. It also provides a stimulus forthe extension of key telecommunicationsnetworks and services to parts of thestate and region that have not beentraditionally served as well as the largermetropolitan areas.
Another example of combined educationaloutreach and infrastructure developmentactivity in Georgia is the Georgia TechSatellite Literacy Project. Initiated in1989 with two remote sites, the programhas grown rapidly and now serves more than60 sites in Georgia. Programming on theeducational network originates at GeorgiaTech, and offers people with poor readingand writing skills a chance to improvetileir skills. Students have ranged in agefrom 17 to 79 years old and hail from allparts of the state--this is a programwhich truly embraces all of the people ofGeorgia. Recent site additions to thenetwork include Warm Springs inconjunction with the Roosevelt Institute.Some other sites include Albany StateCollege, Georgia Southern University andAthens Area Tech.
These trials and others utilize acommunications framework consisting ofabout 350 satellite communicationsterminals, several hundred modems and lessthan one hundred CATV connections. Giventhat there are over 1700 primary andsecondary schools and more than thirtyadult and vocational educations centers inGeorgia, the current communicationscapability to support delivery ofeducational services is clearlyinadequate.
4. PROPOSED APPROACH
To improve the communicationsinfrastructure to support delivery ofeducational services and programming inGeorgia's adult and vocational educationcenters, the goal is to leverage fromexisting distance learning initiatives inGeorgia and the region. This will be doneby defining the information transportrequirements to and from the 32 units ofthe state vocational school system.
Additionally, information flows to allowdistance learning and other data transportapplications to be applied in and aroundthe vocational education centers will becharacterized. This is a key point,
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because the proposed intent for GaVEN isnot only to allow delivery of educationalprogramming and real-time, two-wayinteraction and multicasting. A secondmotivation is to put in place transmissionand networking capacity in the state tospur the development of "informationintensive" businesses which are replacingtraditional low-wage manufacturingenterprises in many regions of the ruralsouth.
Thus, the goal is not only to provideeducational mechanisms to train and re-train the workforce in "information-ageskills" using an integrated servicesnetwork, the goal is also to catalyzeeconomic development in rural and semi-rural areas by providing infrastructure toallow business which require varyinglevels of telecommunications connectivityto locate in these regions.
A few statistics will underscore the needfor this secondary benefit: First, themedian household income in the AtlantaMetropolitan Statistical in 1990 was$34,595 (in 1990 dollars). In the rest ofGeorgia, the median income in 1990 was$21,920. Second, twenty-one counties inGeorgia exceed the state average for thepercentage of the population with a high-school diploma--71 percent. Ten of the 21were in metro-Atlanta. Clearly, there aretwo Georgias, and there is a real need todeliver now-unavailable educationalservices to rural Georgia and to spureconomic development there as well.
Once the necessary information flows havebeen characterized, needlines and otherconnectivity issues will be overlaid on toa proposed, broadly-based network planningeffort for the State. The StateDepartment of Administrative Services andthe Public Services Commission, incooperation with GCATT, are developingplans for this effort, which will examinethe networking needs of the state foradministrative functions, the UniversitySystem and the State School Superintendent(K through 12), as well as the Departmentof Technical and Adult Education.
The current concept for the State networkto meet all of these needs is an ATM ringof ten to twelve nodes located primarilyin the larger cities. Radiating fromthese major switching centers would be DS-3 and DS-1 sub-networks carrying trafficto less populous and lower communicationstraffic density areas. The overall goalfor the state network is to migratecurrent and future traffic to a newplatform and new transmission technology.
Analysis completed to date is encouraging:the cost tradeoffs between DS-1 and DS-3services given current tariffs shouldallow cost savings when currently separate
leased services are bundled in manylocations. Furthermore, when theseservices are trunked onto the broadbandATM ring, additional efficiencies areexpected.
An ambitious goal with target date of theyear 2002 is to allow any classroom in thestate to be connected to any other. Whileswitching facilities may ultimatelyprovide this capability cost-effectively,it is not likely that premises equipment(including workstations, monitors andcameras allowing two-way videc andmultimedia connection between any tworooms in the state) will be P.rfordable.Nonetheless, this goal is prsented hereto frame the complexity of -:he switchingfabric envisioned for Georgia.
If the overall state network technologymigration and the more focused GaVEN is tobe successfully implemented, severalfactors must be addressed. First, aphased approach to implementation must beutilized because the state cannot absorbthe capital costs of the conversion/implementation over a short period.Second, early break-even on lease costsmust be achieved. Otherwise, therecurring costs in bringing up the newnetwork in phases will cripple the effortfinancially.
Third, a migration path to ATM/SONETallowing the offering of broadbandservices must be accommodated. Withoutbroadband services, the "new" networkwould simply be a recasting of existingcapability. Fourth, centralized networkmanagement must be accommodated. Withoutit, efficiencies in combining the manystate network users on a single broadbandtransport infrastructure may never berealized. Finally, the network mustaccommodate new users and services,including potential use by third partiesnot affiliated with the state such as newinformation-based industries.
5. EXPECTED PAYOFF
The number of service jobs surpassed thenumber of manufacturing jobs in the UnitedStates in 1988. In the South,displacement of low-wage manufacturingworkers is especially acute because of theheavy concentration of these jobs in theregion. Technology advances intelecommunications can "soften the impact"of this transition.
Not only will the implementation of GaVENfacilitate growth in service andinformation-intensive industries, we mustalso strive to retain and create newmanufacturing jobs which will also bedriven by telecommunications technology insupplier/manufacturer/vendor/consumernetworks.
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A bonus benefit of a focus on developmentof an information infrastructure forregional use and economic development isthat the technologies and techniquesapplied here are also extendable to almostany region of the Globe. This provides anunprecedented opportunity for industry inthe region to benefit from directimprovements in regional informationinfrastructure, but also from connectionswith the global infrastructure and fromthe business base derived frominfrastructure development elsewhere.
These benefits are in addition to thedirect yet difficult-to-measure benefitsof making educational services more widelyavailable.
6. ELEMENTS OF THE PARTNERSHIP
GCATT, the State Department ofAdministrative Services and thetelecommunications, CATV, and mediaindustries form the partnership that canmake GaVEN a reality. Atlanta and Georgiahave great momentum in keytelecommunications and related informationindustries which will contribute greatlyto fulfilling this promise. BellSouth,with its headquarters in Atlanta and itsfocus on the Southeast region, ishistorically the most significant factorin the development of the region as atelecommunications hub.
Additionally, the Atlanta region enjoys aposition as a key network center forbroadband corporate networks formultinational companies. A key factor inthe development of this capability is thecity's stature as an international fiberhub, with more than 29 separate fiberpaths in and out of the city versus, forexample, less than a third that number forNew York.
Also key to the Georgia region'sleadership in moving toward an integratedinformation infrastructure are high-profile information service, programming,and content origination organizations suchas Atlanta-based Turner BroadcastingSystem and Cox Enterprises.
7. SUMMARY
The Georgia Center for AdvancedTelecommunication Technology (GCATT), inpartnership with the Georgia Stateagencies and industry in the region, ispursuing the development of the GeorgiaVocational Education Network (GaVEN).The proposed network is focused on thegoal of reaching a vital group with newtechnology and educational resources: the180,000 students in Georgia's VocationalTraining and Adult Education System. Thelong-term vision is to migrate to SMDS andeventually B-ISDN services, providing
network capacity that can be utilized bynot only the education centers, butbusinesses, government and other entities.
This paper has reviewed ongoinginitiatives in the application oftelecommunications technology to educationin the state, and demonstrated the needfor the network as a catalyst foreducational enhancement and economicdevelopment, particularly in ruralGeorgia. The proposed approach todevelopment of the network has beenreviewed, as have the expected direct andindirect payoffs of implementation, andthe elements of the partnership pursuingthe network.
In addition to this initiative, GCATT iscurrently emphasizing many programs inbasic and applied research, serviceprograms in distance learning andtelemedicine, economic development andpublic policy issues.
215
First Steps in Multimedia Telecommunications:Using ISDN for Educational Delivery
Linda HarasimDept. of Communication, Simon Fraser University
Burnaby, B.C., Canada
1. Abstract:
This paper analyzes the ISDN Distance Learning Trial held in Vancouver, BC, Canada,which delivered high school credit courses to adult learners. Data collected throughinterviews, observation. and video analysis are presented and analyzed to assess whetherthe ISDN project fulfilled its goal of promoting educational interactivity (i.e., collaborativelearning, active student participation) and of enhancing student accessibility (geographic aswell as technical), as well as to assess the relative benefits and overall utility of using such asystem for distance instruction in adult learning centers.
2. Introduction and Background:
The use of computer-mediated communicationsystems for educational delivery is having a majoreffect in expanding educational delivery andenhancing the quality of educational interaction,especially with regard to encouraging active learnerparticipation and collaborative learning (Harasim,1990; Harasim et al, 1993; Hiltz, 1993; Mason &Kaye, 1989). Most online educational activities todate use electronic mail or computer conferencing:asynchronous, text-based message systems. Theintroduction to North America of ISDN (IntegratedServices Digital Network) communicationstechnology enables the creation and use o fmultimedia educational environments, made feasiblewith ISDN's increased transmission speeds for voice,image, and data signals.
The Electronic Classroom:
The project created an "electronic" or "onlineclassroom" in Vancouver, Canada, by linking fourAdult Learning Centers using an ISDN network andfour interactive multimedia workstations (MDLWs),one at each center, to enable image, audio, and dataconferencing. Each workstation included amicrocomputer, microphone, preamp, speakers,writing tablet, and light pen. The project used BCTel's ISDN technology and the MDLWs, whichoffered image, audio and data conferencing to thestudents and teachers, were developed by MPRTeltech, a research and development subsidiary ofBC Tel. The students and teacher could talk to oneanother using the microphone and to input, shareand alter images using the screen, scanner, lightpen, mouse and/or keyboard.
The multimedia workstation provided a many-to-many synchronous communication environment, aspace that could be employed to supportcollaboration and interaction that simulates andpossibly enhances a conventional classroom. Therewere many new challenges to mediated educationalcollaboration, such as the need to reformulate thecurriculum design and teaching methods used,training teachers and students, and determining theviability and suitability of ISDN technologies for suchtasks.
216
Timeline:
The project covered two phases: Phase 1 (Februaryto June, 1992 and Phase 2: October, 1992 toJanuary, 1993). Two courses, Introduction to Math11 and Western Civilization 12, were offered tostudents enrolled in the online program. Math 11was dropped shortly after implementation in the 1stPhase, due to technical problems and the lack ofcomputer tools appropriate to this subject., butreintroduced in Phase 2, when changes such as theintroduction of a light pen were implemented. InPhase 2 both courses are being offered.
Characteristics of the Users:
Students ranged in age from 18 to 25 years of age,returning to complete their high school program.Approximately 20% of all the students in the projectwere immigrants to Canada and spoke English as asecond language. Besides the ISDN course,students also registered in one or two traditionalclassroom courses. Few had previous computerexperience. Students were all given instruction in theuse of the equipment.
The two teachers involved in the project wereexperienced adult educators who had taught theirsubjects in the adult learning centers in past, usingtraditional face-to-face approaches. Neither teacherhad ever used a computer for communication or as aprimary educational tool for teaching and learningand one had never before used a computer at all. AnMPR technician was present throughout the classsessions to provide technical support. Teachers alsoreceived training in the use of the new computertechnology. Some training in curricular design issuesand approaches for new media was provided.
Description of Activities:
The ISDN classroom consisted of four sites. One,referred to here as the local site or center 1, includedthe teacher and several students in a regularclassroom; at the three remote sites (centers 2-4), thestudents had ISDN access to the teacher and to theother sites. At the local site, students sat in groups of
2-3 to a table while the teacher, monitor andmicrophone were located at the front of the room.There were about 4 empty rows of seats(approximately 30') between the monitor and theback tables where the students sat. The teacherspent most of her time directly in front of the monitor.At the remote sites, the students also sat at asignificant distance from the equipment. The monitorwas about 10' away and the microphone was about4' away from the students. The computer monitorand equipment were about 15' from students.
The teacher, located at center 1, presented lecturesand interacted with students at the remote sites usingaudio conferencing and image conferencing to showimages that had been scanned and distributedamong all four sites prior to class. Students at thelocal site had access to all the conferencingequipment. Students in the remote sites used theaudio channel to communicate with the teacher andpeers at other sites, and had access to other inputdevices such-as the light pen, keyboard, and mouse.
Technical problems beset course delivery throughoutPhases 1 and 2 such as problems with thefunctioning of the ISDN line and the MDLW, the factthat the high quality audio linkup was not available,and a host of other computer related difficulties. Atvarious points, the project team considered removingthe technology and reverting the course to atraditional face-to-face format but did not do sobecause both the teacher and the studentsrequested to continue with the ISDN mode ofdelivery.
3. Research Methodology:
Data were collected using interviews, observation,and analysis of video records. The intervied datawas generated at the conclusion of the WesternCivilization class in Phase 1. There were 16 studentrespondents and 2 teacher respondents. This data ispresented in section 4. User Perspectives.
Video tape recordings were made of the WesternCivilization class in Phase 2, over three differentdays. Class proceedings were videotaped from twolocations [one in which the teacher and 25 studentsare located and a remote center Nith 6 students].Segments of 30 minutes (15 min. from the localcenter and 15 from the remote center) were selectedand analyzed for their representative value. Inaddition video outputs of the computer activities wererecorded and analyzed. Thus, 120 minutes of activitywere studied. The tapes were analyzed according tothe nature of teacher activity, the nature of studentinteraction, and the nature of the user-technologyinteraction. Video analysis is presented in section 5.Usage Interaction Patterns.
4. User Perspectives:
4.1 Student Perspectives:
Phase 1 students were interviewed regarding threemain issues of ISDN delivered classes: stability andeffectiveness of the network; the degree of studentinteraction and class participation; and other courseissues. Sixteen students [who had all completed thecourse] responded (see Table 1). It should be notedthat these comments came from those who were ableto successfully complete the course under difficultconditions and that they tended to be highlymotivated and committed to making the project work.Overall, student evaluation was favorable, and mostsaid that the ISDN course was as good as or betterthan other (face-to-face) courses that they had takenat the learning centers.
Course Completion Rates:
Phase 1 of the project had a somewhat higherdropout rate than previous (traditional) offerings ofthis course and course completion rates should betracked over subsequent offerings of ISDN coursesto have a higher sample size.
Table 1. Student Evaluation of the Western Civilization Course Comparedwith Other Traditional Courses N
Worse Same Bettera) student interaction 3 5 8b) student participation 2 11 3c) your participation 2 8 6d) access to teacher 3 7 6e) lectures 3 9 4f) assignments 3 9 4g) group work 3 6 7h) student presentations 6 10i) your enjoyment of the course 2 1 13
j) course as a whole 2 10 4
217
4.2 Teacher Perspectives
Two teachers were interviewed: the Math 11 teacherand the Western Civilization course teacher. Theircomments on impact on teaching time and the impacton student interaction and participation are shownbelow.
impact on Preparation Time:
Both teachers noted that teaching by ISDN requiredsignificantly more preparation time, especially thefirst time that a course is offered online. Initially, theprocess of setting up and scanning in a slide tookabout 30 minutes per slide. Given that each classmight require up to 20 or 30 slides, this was a timeconsuming process. By the end of the term, thescanning process required 15-20 minutes per slide.
The teachers noted, however, that subsequentofferings of the same course significantly reducedthe preparation times, since the slides were alreadystored in the computers. Additionally, experiencewith the system increased the teacher's level ofcomfort and confidence in using the newtechnologies.
Teacher Views of Student Participation Online:
In rating the level of class interaction andparticipation online, teacher views differed accordingto the course. As can be seen in Table 2, theWestern Civilization teacher consistently ratedstudent interaction as good or excellent. In sharpcontrast, the Math teacher consistently rated studentinteraction and participation as poor or terrible,especially at the remote sites. Moreover, theirassessment of the MDLW and ISDN delivery differed.
Technological Fit with Course Content:
A major issue was that of the fit between the deliverymedia and the course content. This has less to dowith ISDN than with the ability of the availablecomputer tools to support the curriculum. WesternCivilization is a course that is largely image-oriented,involving architectural diagrams, pictures, photos,etc. Mathematics requires tools that enablepresenting mathematical symbols and easy drawingand modification of formulas, etc. The MDLW imageconferencing system facilitated the former but toolssuch as the keyboard, mouse or graphics tablet werefound to be very clumsy for the fine drawing andwriting that Math requires. Subsequently, a light penwas introduced to facilitate these processes online.
Table 2. Teacher Evaluation of Learning Center Network (on a scale of 5,where 1 is terrible and 5 is great
Introduction toMath 11
WesternCivilization
il:::::1$304::NehOtiti:::::::::::::::::::::::::*:::::::::::*::::::::::::::::::::::::::::::::::::::::::::::::::::: :::::::::::::::::::::::
a) technical performanceb) audio quality 3 4
c) video quality 3 5
d) ease-of-use 2 5
e) set-up of workstation 2 4
f) computer software 4
g) workstation as a teaching tool 2 4
: an:ancl:Piettipi040;:ii:iiii;:ii .:.:.....:.:.:.. ::: :.:::::
a) amount of student participation at center 1 1 5
b) amount of student participation at remoteonline
1 4
c) quality of student participation at center 1 2 5
d) quality of student participation at remotecenters
2 4
e) amount of student interaction between centers 2 4
f) quality of student interaction between centers 2 4
g) amount of teacher-student interaction at center1
3 5
h) amount of teacher-student interaction atremote centers
2 4
i) quality of teacher-student interaction at center1
2 5
j) quality of teacher-student interaction at remotecenters
2 4
k) effectiveness of ISDN in creating a classroomenvironment
2 4
I) configuration of the electronic classroom (i.e.number of sites, number of students at each site,total number of students)
3 4
218 A..
Copyright
An critical issue with multimedia telecommunications,even in educational applications, is copyright. Whilethe technologies enable scanning and transmissionof high quality images, the teacher is limited bycopyright legislation. Scanning and transmittingphotos from journals, magazines, or even textbooksis not permitted without permission of the publisher.This requires significant preparation time and effort.Teachers in the project found it difficult to obtain therequired permissions and thus sought public domainimages and also created their own for use in theISDN classroom.
5. Usage Patterns: Impacts on Interaction
While reports from both the teacher and the studentsindicated that the ISDN electronic classroomfacilitated higher levels of student participation andinteraction, the use of video analysis allowed a finerexamination of the nature of interaction online. Dataon usage patterns and interaction in Phase 2 wereexamined from three perspectives: role of theteacher; role of the students; and user-technologyinteraction.
5.1 Nature of Teacher interaction:
Video analysis indicates that the majority of classtime was teacher-centered: of the segmentsanalyzed over three days, the teacher devoted 51%of the total class time to lecture-type presentation ofcourse material. Verbal interaction with studentsaccounted for 31% and instructor silence, whilewaiting for an answer or waiting while studentscompleted tasks, took up 18% of the total time (13%in waiting and silence and 5% in work time) (seeTable 3).
Table a Breakdown of Class Time
'I
31%
Lecture Verbal II SilenceInteraction
51%
219
The content of the verbal exchange between teacherand students is presented in Table 4:
Table 4: Nature of the Class Interaction
60
50
40
30
20
10
coC
-J
E* O
C
C
C41,
to
iR I
c.d
About 5% of the class interaction time was spent onissues related to using the technology, such asgetting the system ready or dealing with problemswith the audio links (i.e., "Can you maximize thatpicture?" or "Stand closer to the microphone, we canhardly hear your). The teacher also frequentlyrepeated comments made by students either in thelocal or one of the remote sites, to ensure thateveryone could hear the comment.).
5.2 Nature of Student Interaction:
Student interactions with the teacher or with peerscomprised 7% of the total class time, either in askingor answering questions, making comments Jon or offtopic] or interjecting in the discussion. The nature ofinteractions between students and the teacher areshown in Table 5.
Table 5: Student to Teacher Verbal Interactions(at 2 centers)
1 6
1 4
1 2
10-
8-
6
C
LocalCenter
RemoteCenter
0
During the lectures, there was no incidence ofstudent to student discussion at the local site.However, students at the remote sites did engage indiscussion (approximately 3% of the total class time),some of which was off topic and related to joking, etc.(see Table 6).
220
Table 6: Total Student to Student VerbalInteraction
25
20
15
10
5
0
5.3 Nature of User-Technology Interaction:
Prior to delivering the class, the teacher would scanup to 20 or more images (black and white, and incolor) for each class. During the class, these imagesand the audio conferencing were the primarycommunicative tools used. The light pen was usedonly by the teacher, and was employed for drawingsimple pictures, annotating an image, pointing, andhighlighting to enhance the lecture presentation.The teacher essentially used the MDLW as a visualaid to display notes and illustrations that provided acommon focus linking students at the four centers.Students at the remote sites did not use the audionor any other tool to communicate with othercenters, but only communicated verbally with theteacher. Table 7 shows tool usage by the teacherand students.
Table 7: User-Technology Interaction In Class
30
25 -
20 -
15 -
10 -
5 -
0
Teacher
StudentsRemote
StudentsLocal
..---1-- I f I I I
..0 ...41.>o0
01
a)
o t-
0)
The audio link between students at remote sites andthe teacher is the most frequently used technologicaltool, followed by the image conferencing which wasused primarily as a visual aid rather than as afacilitator of interactive learning.
6. Conclusions and Lessons for theFuture:
Despite numerous and sometimes debilitatingtechnical problems that confronted students andteachers, both teachers and learners reportedsignificant satisfaction with the technology and saidthat they would use it again if they had theopportunity. The quality of the ISDN-mediated classinteractions and of the learning outcomes were ratedas at least equal to that achieved in traditional face-to-face formats. Nonetheless, analysis of videooutputs indicate that nature of the educationalinteraction was primarily lecture-based, with theISDN and MDLW technologies used for audiopresentation and visual aids. Student interactionwas not enhanced by the technology, largely due tothe nature of the curriculum design employed.Furthermore, the ISDN technology was not utilized toits capacity by this educational approach.
Critical success factors were: the leadership andorganizational skills of the teacher; the design of thecurriculum and the instructional methods developedand used for this project; student motivation; andadequate performance on the part of the technology.
221
The following lessons on the implementation of ISDNmultimedia telecommunications for distanceeducation applications can be drawn:
1. Ensure stable technology and ensure that thetechnology is appropriate to supporting therequisite tasks. Frequent technical problems cannegatively impact upon the teacher's motivation toexperiment with the course design, so that traditionalteaching approaches may dominate, and on thequality of learning, the enthusiasm and concentrationof the students. The media tools should fit with thecourse curriculum.
2. Provide adequate training to students and toteachers. User training should be provided toensure comfort and confidence with all aspects of theequipment. Teachers also require a significantamount of training in curricular design for online,multimedia environments.
3. Curricular design should be more student-centered. Active and collaborative learning stylesare proven to be educationally effective and areespecially important in online environments toencourage student interest at remote sites, wherethere is no teacher present to encourage and monitoractivity. Teachers should encourage studentactivities electronically through questions, student-centered assignments, and group projects, bothwithin a site and between sites. Moreover, teachersshould encourage or even require students to usethe various media tools available.
4. New technologies provide new educationalopportunities but also require new designs,approaches, and mindsets. This is not only true forteachers but also for students. The traditionalstudent mindset to 'sit at the bark of the classroom'and to avoid participation should be recognized andovercome by curricular designs that encouragestudent activity, rewards (grades for participation),and providing good access to the tools.
5. Provide a student-computer configurationconducive to encouraging active studentinvolvement. Provide a computer configuration thatenables individual or small group access to eachtool.
6. Include asynchronous networking, such asemail or computer conferencing, to increase theopportunities for student participation at timesand locations other than a place and time-dependentclass format. These could be used in adjunct mode,to increase discussion time, for electronic officehours, or even to deliver parts or all of an onlinecourse to homes, offices, and educational sitesoutside regular class hours.
7. Ensure an appropriate and comfortable settingfor the electronic classroom, which provides aquiet and private space away from distractions andexternal noise and enables access after class time.
8. Recognize that an electronic classroom hasnew costs and requirements for implementation,support, and maintenance. Teachers need tospend considerably more time initially, in setting upan online class environment. Purchasing andmaintaining computer equipment is costlier and morecomplex than traditional educational media likeblackboards.
9. Other factors such as copyright laws need toalso be recognized and planned for in setting up theelectronic classroom.
Endnotes:
Tables 1-2 are adapted from D. Black and L.Harasim, (1992), The ISDN Distance Learning Trial:Evaluation of Phase 1. Open Learning AgencyReport, Bumaby, B.C., Canada.
References:
Black, D. and Harasim, L. (1992), The ISDNDistance Learning Trial: Evaluation of Phase 1. OpenLearning Agency Report, Burnaby, B.C., Canada.
Harasim, L. (Ed.) (1990). Online Education:Perspectives on a New Environment. New York:Praeger Press.
Harasim, L., Hiltz, S.R., Teles, L., and Turoff, M.(1993). Learning Networks: A Field Guide.Cambridge, MA: MIT Press (forthcoming).
Hiltz, S.R. (1993). The Virtual Classroom. AblexPress (forthcoming).
Mason, R. and Kaye, T. (Eds.) (1989). Mindweave:Communication , Computers, and DistanceEducation. Oxford, UK: Pergamon Press.
222
NTT's Four-Year ISDN Experience and the Future of Japan's Market
Koichi Nobukuni and Fumihisa BambaNippon Telegraph and Telephone Corporation (NTT)
Tokyo, Japan
1. ABSTRACT
NTT's version of ISDN service (called INS-Net) has been steadily growing since itsinauguration in April 1988. As of January 1993, the service enters its fifth year.With the number of contracted lines now exceeding 150,000, INS-Net is expectedto move from the introductory phase to the take-off phase.
This paper discusses NTT's four-year experience in developing ISDN service andthe issues presently facing NTT, as well as efforts to expand the market throughproviding new service offerings.
2. NTT'S FOUR-YEAR EXPERIENCE
2.1 RAPIDLY GROWING SALES
The recent growth in the sales has been remarkable,with the number of subscriber lines as of the end ofSeptember 1992 for INS-Net 64 amounting to 116,208,and those for INS-Net 1500 amounting to 2,405.Accordingly, a total of 140,258 lines are being usedfor INS-Net service overall by more than 10,000customers. (In calculating the total figure, a factorten times the number of lines for INS-Net 64 wasapplied to INS-Net 1500.) (See Figure I.)
Increase in INS-Net Subscriber LinesEnd of Sep. 140,258
160.000 ---------INSNet64 116.208
140,000INS-Ne11500 2.405
100.000
80,000
60.000
20.000
0
'88 6 9 12 '89 6 9 12 '90 6 9 1 2 '91 6 9 1 2 '92 6 9
19.3 3
Figure 1
3 3
About 34 percent of INS-Net 64 subscribers are alsousing the packet mode (INS-P).
Forecasts indicate the continuation of steady growthin sales for the future, with the total number oflines for INS-Net service expected to reach 200,000in the spring of 1993. Moreover, INS-Net servicewill be available in almost all urban areas of Japan,or about 2,400 municipalities.
(Note)INS-Net 64 (basic-rate interface): Provides two 64-kbps information-bearing channels and one 16-kbps signaling channel.
INS-Net 1500 (primary-rate interface):Provides twenty-three 64-kbps information-bearingchannels and one 64-kbps signaling channel.
It is possible to use twenty-four 64-kbpsinformation-hearing channels (in this case, the
BEST C2Fif AMAMI 223
signaling channel for other INS-Net 64 or INS-Net1500 lines can be shared).
In INS-Net 1500 service, other options include high-speed communications service at 384 kbps bycombining six 64- kbps channels, or at 1.5 Mbps bycombining 24 channels.
2.2 RECENT TRENDS IN APPLICATIONS
According to the breakdown of the recent ISDNapplications in Figure 2, the data transmissionaccounts for about three-fourths of overall INS-Net64 applications. In the data transmission category,moreover, POS applications have been increasing.In particular, the introduction of 1NS-Net 64 to allSeven-Eleven sales outlets in Japan has served notonly as the leading case in the distribution industry,but also in all industries introducing POS systems.Specifically, the introduction of INS-Net 64 has beenrapidly proceeding in supermarkets, the foodservice industry, gas stations, etc.
ISDN Applications
INS Net 64
Back Up(18%)
INS Net 1500
CPE0".;
Dam Fa. Trans!..(, 0%) %
voce7%(7 1'.
19 3%)
&K. UP ,
Figure 2
Pen(63 5%)
In the past, the emphasis in introducing INS-Netservice focused mainly on reducing costs, such asmonthly charges and call charges. Recent trends inapplying INS-Net to POS systems, however, indicatethat INS-Net is becoming an essential tool toformulate management and marketing strategies, asINS-Net makes fresh information available throughan extensively spreading network. For industriesstruggling with each other to capture customerinterest, it is essential to understand consumertrends on a timely basis. Because of this, the role
INS-Net is expected to play in these endeavors wi'.1become increasingly more important.
Another reason for the increased INS-Netapplications in data transmission is that thecombined usage of INS -P and circuit-switching modehas become readily available. One of the features ofINS-P service is that charges are determined by thevolume of packets transmitted, and there is norelationship between terminal-computerconnection time and call charges. Because of thischaracteristic, INS-P is being extensively used ininteractive computer processing work, such asinventory retrieval, ticket issuing work, orderissuing and receiving work, etc. For transmission ofa large volume of data from headquarters to eachoutlet, moreover, a digital communications mode isnow available. Accordingly, the application of INS-Net service in multi-media formats is coming in forincreased usage.
While the circuit concentration effect is consideredthe major advantage of INS-Net 1500 for users,digital PBX accounts for about two-thirds of all INS-Net 1500 applications. This increase in digital PBXapplications has been realized through the fullefforts recently started by manufacturers to makeavailable a full line of digital PBX equipment. Theselatest PBXs make it possible to access both officelines and extensions through the I-interface, whichmeans that G4 facsimile transmissions and FDtransfers can be conveniently carried out throughextensions.
Moreover, increased customer conveniencestemming from CODEC standardization and reducedpricing is facilitating the introduction of videoteleconferencing systems.
2.3 PROGRESS IN GLOBAL ISDN
Corresponding to the tri-polar trends in the worldeconomy centered around the US, Europe, and Japan,three different approaches have been takenconcerning ISDN as well -- mainly by AT&T and theseven regional holding companies (RHCs) in the US;British Telecom (BT), France Telecom (FT) andDeutsche Bundespost Telecom (DBPT) in Europe; andsimilar efforts in Japan.
In the US, a shift was made in November 1992 fromarea-designated (ISDN Island) service tostandardized nationwide service under the name of"National ISDN-1."
In pace with EC unification, plans in Europe call forthe integration of the telecommunications markets,and especially for positive approaches for the ISDNunification.
Among these world trends, Japanese companies arealso positively dealing with the construction ofglobal ISDN networks. NTT is also encouraginginternational connections together with overseascarriers. (See Figure 3.)
Global ISDN
2.4 OVERVIEW OF ISDN DEVELOPMENT IN JAPAN
As stated previously, Japan's ISDN service isemerging from the introductory period andentering the take-off period. However, the road tothis stage was not easy.
As shown in Figure 1, it took about a year beforeISDN subscriber lines started to increase afterservice start-up.
While manufacturers singled out limited serviceareas as the reason for slow equipment sales, NTT (asa carrier) claimed that the unpopularity amongOusers despite inexpensive ISDN charges was due tohigh equipment prices. Most importantly, potentialusers held the view that there were no advantagesin introducing ISDN service at this stage because ofhigh equipment prices and limited service areas --both of which naturally limited ISDN usage.
All concerned, i.e., carriers, equipmentmanufacturers and users, were conscious of theneed to break the vicious circle among the threeparties indicated in Figure 4 for ISDN development tomove forward. However, each party looked to theothers to take the initial lead.
Vicious Circle
RestrictedService Area
LimitedNumber of Users
224.,1
Carrier
HighCPE price
Users Manufacturers
Figure 4
ISDN ApplicationPOS Data Network
HOST
ti Slants
Figure 5
Siam Cesnput.
_OS Caen
°nineOn Win,
Sat C. Scan.,
The resolution of this issue was triggered by NTT,which decided to alter its original service areaextension plans after studying the provision of ISDNservice to a specific user. This case involvedproviding ISDN service to about 4,500 outlets of aconvenience store chain.
The original service area extension plan first calledfor service start-up in Tokyo, Nagoya, and Osaka.This coverage was to be expanded to include citieswith over 500,000 population at the next stage, ,thenprefectural seats and equivalent cities, followed bycities with over 30,000 population. However, thisoriginal plan could not meet the needs of thisparticular customer in terms of the pace ofexpansion. Because this approach could not keep upwith the system construction planned by this user, itwas consequently impossible to apply ISDN to thesystem construction -- effectively meaning that thisuser would not be able to construct a new system.
The area extension policy NTT first adopted requiredthe start of ISDN service from areas that couldproduce greater profits at smaller risks. As NTTrealized that user needs could not be met under thisapproach, the policy was completely changed inApril 1990 to expand service areas in a single strokeby meeting every demand in as many cases aspossible.
As a result, service areas were expanded to providecoverage to almost all cities with over 30,000population. (See Figure 6.) This has accordingly ledto success in breaking the vicious circle shown inFigure 4.
225
INS-Net Service Area
Q
Figure 6
2.5 FUTURE CHALLENGES
Recently, the revised service area extension policyhas brought about some problems of major concern.One is the need to meet demands such as only oneline in a rural area even if a huge amount ofinvestment is required. Due to the recent economicslowdown and a decline in the NTT's financialsituation stemming from an intense competitionwith new common carriers (NCCs), the company isfacing greater difficulties in following this revisedextension plan on an "as is" basis.
As a result, a policy emphasizing marketingactivities in existing service areas was adopted in1992. This policy enabled the efficient sales andeffective facility investment.
The other issue involves the fact that ISDN can nolonger be considered an NTT monopoly. In theincreasingly con,petitive environment involvingNCCs, NTT has no choice but to take a more stringentapproach in examining revenues and expenses,including every effort to maximize revenues incurrent negotiations with NCCs concerninginterconnection conditions.
Handling these issues from the standpoint of short-term revenues and expenses, however, will distortthe proper approach that NTT should take in thefuture. Accordingly, it is necessary to take intoaccount the fact that ISDN will usher users into anew communications world, creating a new marketfor manufacturers of communications equipmentand generating a new revenue source fortelecommunications carriers.
3. FUTURE OF JAPAN'S MARKET
3.1 CUSTOMER EQUIPMENT FOR INS-NET SERVICE
NTT has promoted ISDN standardization activities byparticipating in relevant CCITT and *TTC committees,and has developed supplementary servicesconforming to CCITT and the TelecommunicationsTechnology Committee (TTC) standards. Moreover, inorder to facilitate the usage of supplementaryservices among customer equipment developed bydifferent manufacturers, NTT has carried outinterconnection experiments jointly with promotion
conference of Harmonization of advanced ISDN Terminals in JapanTelecommunications Systems (* *HATS Conference).
*The telecommunications Technology comittec wasfounded in October 1985 by various Japanesecorporations active in telecommunications-relatedmarkets. Its main role is to coordinate activitiesaimed at establishing standards for domestictelecommunications netwarks.
**Interconnectivity of ISDN products is beingpromoted in Japan in cooperation withtelecommunication operators and manufacturescompanies, under the HATS conference, which isheld in the Ministry of Posts andTelecommunications.
In an effort to enable INS-Net applications for notonly new services particular to ISDN, but also newanalog services as well as existing supplementaryservices offered via the analog network, NTT took apositive approach in introducing various services.(See Figure 7.)
Supplementary Services
f 10 Calling line identification0 Sub addressing0 Advice of charge0 Direct.dialling in
(from Apr. 19811)
0 Terminal portability0 Call waiting0 Three party0 Call deflection0 Call transfer
('nom Aug. 1989)
0 User to.user signalling
(from Sep. 1990)
0 Closed User Group
(from Om. 1992)
EXISTING TELEPHONE SERVICES
Toll-free to dialler (free dial)
Voice conferencing
Credit calls
Line hunting
Incoming/Outgoing call bowing etc.
Figure 7
One index in measuring success in developing newapplications relates to the extent of customerequipment available to realize such services. Thisindex is highlighted in Figure 8. which showsdifferences between data for December 1988 (justafter INS- Net service was inaugurated) andDecember 1991 for customer equipment in thefacsimile, data transmission, video and voicecategories.
226
Terminals As of the end of December 1909 As of the end May 1992Vendors Variety Price Range thariang teat Vendors Variety Pace Range twissam on
Terminal Adapter 8 20 80 403 26 122 80 3,060
G4 Facsimile 11 16 1.800 3.000 13 43 000 3.1100
Videophone 6 6 2.500 6.000 5 7 050 7.500Vic/stem:micro-16mq
System 11 15 10060-32,603 14 32 5,000-20000ISDN Interface
Board 3 3 300 503 30 40 103 060
FD TransmissionSystem 4 7 300 070
Digital PDX 9 16 Depending onsystem Conformism 15 37 Octimadee on
system Conlon: on
Total 27 85 61 288
Figure 8 NTT
Trends in the development of customer equipmentindicate a growth of about 3.5 times in terms of thenumber of participating manufacturers, and 3.7times in terms of the number of products - -
indicating that small to large manufacturers areentering this market at a very rapid pace.
From a pricing standpoint as well, the range ismoving lower, with substantial price reductions ofabout 40 percent for video phones and 60 percentfor G4 facsimile machines.
Application formats can be broadly classified intodata transmission, facsimile, video and voice.
Data transmission applications are increasingmainly in formats that take advantage of the high-speed capabilities of INS-Net. Major applicationsinclude POS data transmissions, PC communications,and inter-LAN connections.
Significant progress has been made in the spread ofG4 facsimile machines that are capable of bothhigher resolution and higher speed transmissionthan available by G3 facsimile machines.Application examples include documenttransmission at administrative agencies andtransmission of drawings in the printing andconstruction industries. Accordingly, G4 facsimiletransmissions have gained an extensive publicacceptance.
Video communications include still pictures appliedto printing and medical fields, and moving picturesapplied to remote monitoring and videoteleconferencing. However, the usage frequencyfor video communications is still low, and pricereductions in customer equipment is the key to thepopularization of these applications.
For voice communications, customer equipmentcapable of transmissions up to 7-KHz or 15-KHzbands is starting to appear. With this newequipment, applications are being promoted in thefields of radio relay broadcasting and musicbroadcasting.
Starting in 1989, NTT has been successively carryingout end-to- end connection tests with variouscountries in the world to realize global ISDN service.So far, basic connections are possible with 15nations, including the US, the UK, France, andGermany.
fy J.
3.2 MEASURES FOR INS-NET DEVELOPMENT
3.2.1 NEW SUPPLEMENTARY SERVICES ANDSERVICES COMPATIBLE WITH PSTN
As stated earlier, NTT is providing service inconformity with CCITT and TTC standards. In October1992, NTT started CUG service via circuit-mode underthe name of "Group Security Service."(Figure 9)
PREVENTION OF WRONG OUTGOING CALL
CLOSED GROUP
Giffl?
G4e,
0
PREVENTION
OF HACKER
CUG SERVICE (CLOSED USER GROUP)TRADE NAME IS r GROUP SECURITY /
Figure 9
This service was developed with the aim ofproviding security for the public network, andprevents errors in call origination by users as wellas intrusion by hackers. Sales targets include userswho specifically request communications securitysimilar to that available with leased circuits. Thisincludes public agencies, such as city offices whichissue copies of family registers, etc., via G4 facsimile,and other users wanting such security protectionsas preventing the tapping of data transmissions.
Plans call for the start of "free-phone" service bycircuit-mode 64kbps unrestricted in the spring of1993. Sales targets include translation companieswhich want to link individual translators working athome via G4 facsimile, and nonlife insurancecompanies using still pictures in transmittingdamage and claim reports.
Taking various trends in CCITT and TTCstandardization into consideration, the start of suchsupplementary services as reverse charging (REV),Support of Praivate Numbering Plan(SPNP) isplanned in the future.
Supplementary Services
Future Implementation under development
Support of Private Numbering Plan (SPNP)
Reverse Charging (REV)
Call Forwarding Busy (CFO)
Call Forwarding No Reply (CFNR)
Call Forwarding Unconditional (CFU)
Figure 10
227
3.2.2 NEW APPLICATIONS
An example of household applications in the datatransmission category involves the usage of a "ISDNTELEASSIST" terminal. The Teleassist communicateswith a data center via the D-channel packet mode bymeans of IC memory card for communications with adata center, and is expected to be used in suchapplications as home banking and home securitytransactions. Moreover, it is equipped with terminaladopter functions to permit the connection of twoanalog terminals.
ISDN multifunction terminal enables the customer tocommunicae with offices and to transfer data orgraphics from outside locations. This terminal canbe applied for the demand of data transmission, andis equipped with a "hand-drawn fax" function, afunction to transfer images taken by memory-cardcamera to the called party's memory card, as well asoutside ports for connections to other ISDNterminals (e.g. G4 facsimile. machines). If this ISDNmultifunction terminal is installed at high-trafficsites such as hotels, coffee shops and conveniencestores, it can efficiently support various businessand social activities by enabling people to transmitand receive information without returning to theiroffices or home.
SON multifunction terminal
personal computer
04/G3 FAX termir.:.i
monitor TV
tundheld te moral IC card
Figure 11
3.2.3 GLOBAL ISDN
tele-photographterminal
In November 1992, NTT participated in the ISDNdemonstration called "TRIP '92" organized jointly bymajor US telecommunications carriers in whichconnections were made through the "National ISDN-1" interface. This demonstration confirmed thatend-to-end communications is possible through NTT,KDD (Japan's international carrier), AT&T andRBOCs. The applications that were successfullydemonstrated at this time included videoteleconferencing, G4 facsimile transmissions, andinter-LAN connections. The volume of internationalt/inimunications traffic between Japan and the US ishigh, and the US is Japan's biggest internationalcommunications partner. This occasion confirmingend-to-end communications between the US andJapan is expected to lead to a rapid increase in ISDNcommunications as well.
A- -.L.
G4 FAX in Tokyo
64 Kbps
56 KbpsAT&T4ESS
Network
Japan overseas carrier
G4 FAX in Los Altos
Figure 12
G4 FAX in New York
228
I
ISDN COMPRESS VIDEOTHE LOGICAL NEXT STEP
John F. ArchdeaconGeneral Service Administration
San Francisco, Califl.
Integrated Services Digital Network (ISDN) proves to beideal for video conferencing. With over hundreds of Federaloffices scattered throughout the nation, GSA has establisheda video network to meet this challenge. Like most users,GSA primarily uses video conferences to link widelyscattered locations for business meetings that otherwisemight not be held at all because of the expense of air fareand accommodations.
No one argues that video will supplantin-the-flesh discussion. Instead, thetechnology is billed as a supplement totravel, a way to boost productivity andadd a more personal dimension toordinary conference calls. There aretimes when you need to meet face to faceto discuss complicated issues but don'twant to take all the time to get there.This was exemplified during one videoconference between a product safetyagency and their headquartersconcerning a toy that could ignitepaper. Trying to explain this by atelephone conference would not have theimpact as actually seeing itdemonstrated.
General Service Administration conductedextensive tests to evaluate dial-up andpoint-to-point video conferences thatcan utilize either a single 56 Kbpscircuit , Basic Rate Interface (112Kbps), or Primary Rate Interface (PRI)and T-1 facilities (112 Kbps up to 1.5Mbps ). The point-to-point connectionis a reservation video service that isan expansive mean of conducting videoconferences. It required videocoordinators to schedule videoconferences through the use of a videooperator. Because all conferencecalls are connected through a conferencebridge, the conferees must make anappointment weeks in advance to reservethe bridge for their meeting. Not onlywas the use expansive but inflexible.The availability of the room itselflimited the scheduling and the lack of
BEST COPY AVAILACLE 229
video bridges throughout the countryalso limited the points of connection.
Currently, we are testing thecapabilities of two bridging systemsthat employ different technology. Oneof the systems permits us to bridgemultiple parties in a video conferenceat a fix data rate and supported by onlyone codec manufacture. The otherconference bridge permits us to bridgeparties of different data rates,multiplex/modem equipment andmanufactures' codec. We are focusingour attention to the facilities inHonolulu, HI; Agana, Guam; SanFrancisco, CA; and Washington D.C.. Ourother goal is to evaluate the ability tointerconnect both of our FTS2000networks together.
The Federal government has one of thelargest private networks in the worldand as such needs to find ways ofreducing costs. One of the means isthrough the use of integrated facilitiesby aggregating various forms ofservices, i.e., switch voice, switchdata, switch video, and switch imaging.ISDN gave us that ability and we in turntested it out to determine itseffectiveness. With BRI, we transmitvoice, data, and imaging down the sametwisted pair to the central officeswitch that routes it over the privatenetwork facilities. In turn we enjoythe elimination of redundant facilitiesand receive large discounts for the
traffic passed over the aggregated trunkfacilities.
As a result GflA employs a cutting edgeapproach to video technology. Itsuccessfully operated a compressed videodial-up ISDN Basic Rate Interface (BRI)application at 112 Kbps and comparingits performance with 332 Kbps that usesa dedicated T-1 span. The video signalprocessor (CODEC) interfaces with aGandalf Terminal Adapter (TA). The TAenables the video signal processor, asynchronous data terminal device toconnect to the ISDN network via anetwork terminal adapter (NT1) devicethat provides the ISDN "U" interface or"local loop" for the video system'ssignal to the central office CENTREXswitch (DMS100). Although at 336 Kbpsthere is a slight improvement inresolution, all conferees agree thatthere was little to no degradation intheir video conference. Reliability, ourexperience with dial-up ISDN video hasshown that it is more reliable incompleting calls than the reservationmethod over T-1 facilities.
In assessing the merits of ISDN, GSA wassuccessful in implementing ISDN over ourlocal area network by connecting remotesites to its LAN and electronic mailservers. Looking at other applicationswe determine that ISDN can also handlevideo simultaneously over both bearerchannels: B1 and B2. The videoequipment that handles the ISDNtransmission was much smaller and can betransported to room to room or buildingto building with minimum ease.Additionally, we can prewire allconference rooms and upper levelexecutives' offices with ISDN extensionnumbers.
ISDN is a technology for solving today'scomplex problems while guiding userstoward the future world of multi-mediacommunications. One mean is the rollabout video system that deliversefficient and cost-effective videoconferencing where you need it. Thereare several different equipmentconfigurations and an extensive offeringof options available to expand the basicsystem. The portability of the roll-about video codec makes it possible toconduct impromptu conference at thedesired locations. Even thoseindividuals who are reluctant toparticipate in any form of conference
230
have found the use and use of this setupto be convenient.
The ISDN roll about system is fully selfcontained within a sturdy cabinet orinstalled on a three-tier roll-aroundcart. The equipment operates withoutspecial lighting requirements orexpensive acoustical wall treatments.The unit can operate with a number ofdifferent reverse multiplexors(BANDWIDTH ON DEMAND), which allow youto create an expensive network of videoconferencing studios or to add a singlenew room to your existing video networkthrough the use of a video server.
The video conference system itself hasbeen used for many-on-many, many-on-one,or one-on-one meetings by eitherscheduling or having spontaneousdiscussions. To enhanca theseconferences, we have incorporated theuse of two monitors with one monitordisplaying all attendees and the otherused for displaying still, graphicimages. In conjunction, the ability todisplay slides, overheads, PCpresentations, VCRs, annotation pads,and specialized peripherals haveenhanced our conferences. These sameperipherals with the conferenceequipment are used during classroomtraining sessions and at the same time,the sessions have been recorded on VCR.Transmission qualities of these trainingsessions by the use of a VCR over ISDNlines have exceeded expectations.
Impact of P X 64
We also evaluated the P.64 Video CodingStandard. The standard enables variousCODEC manufacturers to adapt to a singlecompression algorithm that can operatewith other manufacture's equipment. Thestandard includes uniform method ofdecoding, transmission of data 64 to2048 KBPS, CIF (high resolution), QCIF(low resolution), twin channel operation(synchronization), and audio. Problemsexist when a federal agency obtainsequipment from various vendors; and areunable to communicate with otheragencies whose equipment is notcompatible. Recognizing the need toprovide ubiquitous video services, GSAhas established a policy of obtainingonly that vendor equipment that meetsCCITT recommendation H.261, video CODECfor audiovisual services at P x 64 Kbps.Therefore the recommended video codingalgorithm has to be able to operate inreal time with minimum delay.
What Does this Mean to the User?
The increasing acceptance of videoconferencing within the Federalcommunity represents a strong Governmentcommitment to increase missioneffectiveness, improve productivity, andmaximize the efficiency of availablemanpower and financial resources. TheFTS2000 network provides digital video,data, and voice services for the entirefederal government. The networkservices architecture, which allowsmultiple location access to a broadrange of integrated services, isavailable among hundreds of Governmentlocations.
Cost Analysis: Over the past severalyears the cost of transmission hasfallen. The cost of T-1 or Switch 56services is longer the deterrent factorin establishing new services. With thecost of transmission decreasing, theonly major cost is the investment in thevideo system itself. The cost or thiscapital investment recovers itselfwithin six to twelve months.Standardization will allow users tointerconnect with various video systemsand inverse multiplexes without accruingadditional equipment. What does thismean, users who purchased one vendor'sCODEC can conference with anothervendor's CODEC without having topurchase another CODEC or third party'sgateway.
Not all federal agencies have the budgetor staff that would satisfy the capitaloutlay for video equipment, but they canutilize other agency offices to conductvideo conferences. The procedure issimple as dialing up a plain voicetelephone number. The only problemwould be billing for use of a longdistance call that is relatively low.With a large number of offices scatteredthroughout the country and theproliferation of video systems at theselocations, small users can makearrangements to use those facilities.
Applications: We have employed thevideo conference for training, jobinterviews, introduction of new membersto the organizations, policy meetings,contract meetings, engineeringdevelopment, financial reviews, legaldepositions, product demonstrations,editing of documents and AutomatedComputer Assisted Drawings (ACAD) byconnecting PC's at each end andchanneling them through the same video
231
port simultaneously to transfer filesand documents.
Video conference has replaced thestandard phone conferences whileminimizing the need to travel to othercities to attend a one to three hourmeeting. The establishment of ISDN totransport the video signals across thenetwork can open up some opportunities.It can include a multi-media environmentthat integrates video, data and voiceinto a single session. Video and dataimages can be stored on disk along withvoice messages. Non-participatingmembers can retrieve those disk filesand review what went on in the videoconferences. Other information can bestored and stored with thosepresentations and later displayed.There are now codec manufacturers andsoftware vendors working towards amultimedia platform to develop thistechnology.
An Evolution Strategy Toward Digitalized Inter-exchangeNetwork Structure in Seoul Metropolitan Area
Jeong-Wook Kim and Hee-Soo AhnKT InternationalC.P.O. Box 6000
Seoul, Korea 137-070
1. Abstract
This paper analyzes the impact of digitalization on networks in Seoul Metropolitan Area byconsidering facility investment together with operating costs. A stepwise evolution methodtoward a digitalized double-homming architecture is proposed to accommodate most efficientlywith existing analog-oriented networks.
2 IntroductionTelecommunication networks in Korea have been rapidlychanging in the last decades. In the periods of 70's and80's, the main goal of telecommunication policy was oneline per one household and successful execution of the pol-icy resulted in large volume of telephone lines availableto general customers. With the change of monopolisticstructure of telecommunication business to market econ-omy structure in the beginning of 90's, the telecommuni-cation business environment has to be more competitivethan ever with the growth of economy. Enormous demandon various services has been a characteristic trend in early90's Korean telecommunication market. For the period of90's, number of subscribers per 100 people has been ex-pressed 39 by the end of 1992, will reach at the level of 40by 1994, and will eventually reach at the level of 50 by theend of this century.
From the view point of telecommunication technology,with the theme of network digitalization, various projectsincluding common channel signaling, intelligent network-ing, and ISDN pilot services have been actively pursued.
The following summarizes the trends in current telecom-munication market: (1) customers want to utilize the ex-isting facility with high quality services at low cost. Cus-tomers also try to take advantages of various telecommuni-cation services for their businesses. (2) Operating compa-nies, on the other hand, aim at supplying their customerswith valuable services at proper prices. The services in-clude speedy network formation, stable network mainte-nance, and continuous expansion of facility to meet ad-vanced technological features.
This paper presents an evolution strategy established tosolve problems with the current metropolitan networks.The strategy will result in flexibility of future networksand robustness of the managemental capability of KoreaTelecom. This paper does indirectly or directly reflect theoverall aspects of telecommunication strategy for the mod-ernization of networks.
232
3 Current Structure of Seoul Metro-politan Networks
3.1 The current network configuration
The Seoul Metropolitan networks have been installed andconnected to the toll network, heterogeneous network, andnew service network for a large scale local telephone facil-ities. The networks are evolving with close relationshipwith networks of neighbor cities.
1) Toll networkUntil late 1990, all toll traffics had been transactedthrough the toll exchange. Since 1991, however, thelocal exchange has included the toll transaction func-tion between local and the 16 neighbor city areas whichhave high volume traffic.
2) Inter-local transit networkThe transit network areas are classified as 8 areas; fromthe Area #2 to the Area # 9. The inter-local transitnetworks are maintained with numbering architecture:direct route for the traffic of the same area and thetraffic between different areas.
3) Special number circuitry network and heterogeneousnetworkUnder the circumstance of rapid increase in variousservices, the special number circuitry network such as114 or 115 has the low efficiency and high complexity.The measures have taken to resolve these problemswith the pure tandem network as a basic structure.Networks for various services are to be integrated andeventually to form fully dual network system in orderto improve the stability of the network. In addition,rearrangement of the special number networks are un-derway as an effort to improve efficiency of the net-work since it is rather difficult to improve the entirelocal network by the tandem network alone.
3.2 Trends in subscriber demand and current fa-cilities
1) Trends in subscriber demandAs shown in Table 1, Seoul Metropolitan Area has 4.4million lines and 16 areas of neighboring city areashave 1.5 million lines as of 1991.
[Table 1] Trends in subscriber demand
(Unit : millions lines)
Class '92 '93 j '94 ' '95 '96 '97
City 4,430 4,900 . 5,270 5,560 5,780 5,970
Neigh-boring
__
1,480 I 1,830 , 2,120 i 2,340 2,480 2,600Cities
j
1
Total 5,190 i 6,730 7.390 7,900 ! 8,260 8,570
2) Existing exchange facilitiesTable 2 shows the composition ratios of current ex-change facilities as of 1992. The digitalization ratiosof exchange facility for the Seoul area and the neigh-boring city areas are 40.8 % and 67.4 %, respectively.Overall 47 % of all exchange facilities are digitalized.Our goal toward 100 % digitalization for exchange fa-cilities is the year 2005.
[Table 2] Existing Exchange Volumes
(Unit : 1 K lines, system)
Mechanical
Lines Sys.
Analog--
Lines Sys.
Digital
I ines Sys.
City 323 i 15 2.906 80 2.225 58(5.9) j (53.3) (40.8)
Neigh- 23 i 3 519 9 1,120 80boring (1.4) (31.2) (67.4)Cities
Total 346 18 3,425 89 3,345 138(4.9) (48.1) (47.0)
Reference : the bracket is expressed in component ratio
3) Tandem facilitiesThe tandem network consists of 54 tandem exchangeswith 534,000 lines. 11,955 tandem routes are under op-eration for various functions including local and tran-sit toll traffic handling. Existing facilities of differentroute types are shown in Table 3. Note that 56.6 % ofall exchange lines are direct route.
[Table 3] Tandem Facilites
(Unit : lines,
Types DR HUR TR Total
lines 4,301 5,388 2.306 11.9ERoute
% 35.8 45.0 19.2 100.0
lines 302.377 93,098 138,744 534,219
Trunk _ .
% 56.6 17.4 26.0 100.0
Average Trunkper route
70.3 17.3 60.2 44.5
Reference : DR = Direct Route, HUR = High Usage Route.TR = Tandem Route
BEST COPY AVAILABLE 233
3.3 Status Analysis and Improvement
1) Complexity of tandem networkAccording to the design output of 11,191 tandemroute, there are approximately 12,000 routes and530,000 tandem trunks. This result is derived fromthe design criterion in which the current method issupplied the terminating tandem, HUR or DR betweenend offices if the traffic is more than 6 Erlangs or withinthe same area. This results in several problems includ-ing the followings:
Any changes in design and installation can occurfrequently because of the high error rates by com-plex network plan with the outgoing routes andthe lines of tandem network.
Rapid management is not available because of lownetwork flexibility which is limited by emergencyand new service provision.
- The efficiency of trunk lines for the case of small-grouped trunks is in low level. For example, inorder to keep 1 % grade of services 30 trunks arerequired as the traffic is 20 Erlangs, 117 trunksare needed as the traffic is 100 Er langs. It resultsin the improvement of 0.85 Erlangs per channel inthe latter compared with 0.67 Erlangs per channelin the former.The direct routes composing 90 % of total routescause a cost increase in operation and mainte-nance due to a growth route numbers, in compar-ison with a reduction of initial investments. Thenetwork handing cost will increase because of thepersonnel expenditure. On the other hand, net-work equipment cost will decrease by techr.ologyadvance. This fact will make direct route uneco-nomical in the next 5-10 years.
2) Directions for the improvement of routing and networkstructureMany problems in current network architecture canbe solved by improving present routing methodology.The improvement in routing methodology can alsohelp network digitalization. The following conditionsshould be considered when present routing methodol-ogy is modified:
simplicity of network structure
flexibility of network in future change
supply of originating tandem function
tightness of making direct route between end of-fices
Evolving from the current terminating tandem tofuture digital tandem network, the alternatives canbe summarized as the two methods of terminating.originating tandem and dual homming tandem asshown in Fig.l.
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[ Figure 1 Tvo EgOlaiimi Strategies of Node. Routing
In case of Fig. 1-a, the route can be offered to the cen-tral office of the region. Primary High-Usage (PHU)route and Intermediate High-Usage (IHU) route can beutilized for improving the network flexibility by admit-ting the alternate routes twice. It, however, may costmore than before since more routes between end officesand more complex network management arc expected.In case of Fig. 1-b, the several routes can be groupedinto one and the number of total routes is reduced.The star network which is a form of grouping methodcan be also found in many local networks in Japanor Sweden. This methodology will also increase thesafety of the networks. The route from a digital endoffice to a tandem office can cover the 50 % of trafficstransiting the route from a tandem office to a termi-nating office while covering the other 50 % of trafficstransiting the route from a digital originating office toa terminating office. The dual homming tandem rout-ing has several advantages including minimizing thenumber of routes and alleviating the burden in net-work management while showing disadvantages suchas introducing the pure tandem exchange for solvingoverload problem in tandem exchange.
3) A plan for accommodating neighbor citiesThe traffics between Seoul areas and neighboring 16cities are handled by the gateway using 6 pure tan-dem exchanges (5 ESS, S1240). These exchanges haveprocessed local and tandem functions. The system ca-pacity will be fixed by the condition of customer trafficand tandem traffic. By the increases in the number ofsubscribers and the traffic per subscriber, the traffic isexpected to have sharp increase and a large capacityof tandem exchange as a gateway will be required inthe next 10 years. Therefore, the alternatives shouldbe set up to cover the capacity of gateway accommo-dating huge traffic with the neighboring cities.
4 Comparison among the alternatives ofevolution strategies
4.1 The proposed alternatives
1) Alternative 1 (Terminating Tandem: Current RoutingRule)This rule has been used with forming pure terminatingtandem routes since the exchange cannot cover the al-ternative routing functions due to the operation frommost of electromagnetic exchanges in the period of1960 - 1970. The traffic zones were split and oper-ated individually by the numbers of the areas. Theelectronic exchange introduced later made it possibleto cover the alternate routing within exchange module.
In order to improve the line efficiency in section han-dling, two routing rules are introduced and used opti-mally to minimize the cost of network equipment. Thetwo routing rules are: (a) direct route for large volumetraffic and (b) tandem route for small volume traffic.This rule is currently used in metropolitan network.
2) Alternative 2 (Terminating-Originating Tandem)The terminating-originating tandem is a rout: g ruledesigned to improve the trunk line efficiency of thealternative route. This rule has been used commc.-lyto minimize overall costs including physical networkcost which is proportional to th,-; distance between thetwo end offices.
234
3) Alternative 3 (Double Homming)Double Homming is a routing rule for distributed pro-ceasing individually to the two tandem exchanges deal-ing with all transit traffic between the end offices.While this rule suffers from the additional cost forthe equipment, the simplicity of the network struc-ture makes it more flexible in future expansion and itsmaintenance of facilities.
Other routing rules such as dynamic non-hierarchicalrouting and dynamic alternate routing are excluded fromalternatives because of real time data and their complex-ity.
4.2 Qualitative analysis
Concept of telecommunication is continuously changingwith the environment of globalization and advancing tech-nologies in the field. The following summarizes the currenttrends:
reduced equipment cost and shortened life cycle intechnology
increase of personnel expenditure
rapid change of telecommunication market
In order to cope with the above challenges, telecommuni-cation networks are required to satisfy several conditions.First of all, a flexible network structure is to be set upeasily enough with minimum disturbance on the presentnetworks as the facility expansion or change is required.The installation work can be restricted to the applica-ble end offices as the new facility is required. Secondly,the telecommunication structure should be able to be im-proved to the suitable network architecture according tothe size of the network.
For the case of large scale networks, irregularity andcomplexity are another dimensions to be considered. Asystematic analysis of operating condition and the posi-tion of office is a troublesome task especially in large scalenetworks. Since the level of operation should be quantifiedand well equipped with an automatic processing, it is noteasy to adopt the centralized operation and maintenancesystem. The network architecture is an important factorto be considered in the case of large scale networks.
Another factor to be considered in deciding an optimalrouting plan is the amount of installation labor work sincethe portion of personnel expenditure out of total cost isgrowing while the portion of equipment cost is compara-tively shrinking as time goes by.
4.3 The results of alternative configurations
1) Comparison of network configuration with alternativesTable 4 shows the expenditure analysis among the al-ternatives for next 15 years. During this period, thesubscriber lines are expected to reach 7.6 million linesand the offered traffic is expected to 0.51 million Er-langs. However, the number of systems will decrease to112 systems because new digital exchanges with largecapacity will replace the electromagnetic and analogexchanges. In the aspects of route numbers, the dou-ble homming have the simplest structure due to thereduction in route numbers by removing the analogexchanges.On the other hand, the double-homming requires thelargest amount of trunks in order to offer the tandemroutes except the same end office. The average num-bers of trunks per route are 58 lines, 63 lines, and 171lines for the terminating tandem, terminating- origi-nating, and double homming, respectively. This re-sults in 0.919 Erlang of the offered traffic in case ofdouble homming depending on the large-grouped ef-fect.
2) Engineering economyThe investment costs for the alternatives are esti-mated. As a result, Terminating-Originating Tandem(TOT) shows the most economical alternative with117 million U.S. Dollors (USD) while the TerminatingTandem (TT) and the Double Homming (DH) with139 million USD and 161 USD, accordingly. From theview point of maintenance cost, the DH is the mosteconomical routing rule with 171 million USD. Whenwe consider the total cost including the investmentcost and maintenance cost to the net present value at1991, the followings are the cost for three alternatives;334 million USD for DH, 371 million USD for TOT,and 438 millions USD for TT.The trend graph shown in Fig. 2 illustrates the cumu-lative cost with alternatives. The DH has the highestinvestment cost in the beginning of the period. How-ever, the increasing trend will level off as time goes andthe yearly cost will reach the point where the DH isthe least expensive alternative in the year 1995. In theyear 1997, the DH will surpass the TT even in cumula-tive cost. Finally, the DH will be the best alternativeamong the three alternatives in the year 2001 for thecumulative cost.
CumulativeCost(million
437
US SI
1
I TT I---4"
TOT '
375
312
250
III irDH i
ri187
125Aij//
Alir
62
92 94 96 98 :MO : 4 64.
Year
( Figure 21The cumulative Cost Comparisioo rill Iternatives
.
235
5 An Evolution Strategy Toward theDigital Networks
5.1 The conversion plan of the tandem network
In order to cope with rapidly varying telecommunicationenvironment, the formation of tandem network should beinitiated as soon as possible. During the conversion plantoward the digital networks, the two alternatives of routingmethodologies will coexist and the conversion plan includ-ing network design and installation should be extremelycomplex. Therefore, the conversion should be completedwithin minimum period of time, say, in one year. How-ever, there exist certain problems such as budget problemand traffic control if we try to finish the conversion in tooshort period of time.
After considering all the pros and cons of different timeschedule in conversion plan, a two phase plan is proposed:Phase 1 (1992-1993 ) and Phase 2 (1993-1994). Four tan-dem offices will be installed and preparation of networkconversion will be performed in the Phase 1 period. Inthe Phase 2, additional four tandem office will be installedduring 1993 and switching of tandem networks will be con-ducted during 1994.
5.2 Network configuration during the conversionprocess
Since the network conversion should be conducted in paral-lel with yearly supply of facility and two different networkarchitectures coexist, several complex conditions includingproper switching of current tandem lines and tandem net-work configuration of new exchanges should be carefullyconsidered.
The conversion plan of pure tandem have prepared withthe two phases accommodating the existing and new sys-tems during the installation of pure tandem exchanges.Otherwise, the existing tandem rule is applied as an al-ternate rule. Considering these conditions the tandemnetwork is formed with the types of exchanges and theinstallation conditions of pure tandem exchanges.
5.3 Priority in the installation of tandem ex-changes
Since the pure tandem exchanges will be installed on topof already existing networks and double homming archi-tecture is conceptually over the numbering areas, no ex-plicit installation priority exists. Only practical compo-nents such as growth of toll lines, the amount of requiredlines, and the provisions of installation space are consid-ered in selecting tandem offices.
5.4 Accommodation of regional end offices
The double homming does not depend on the area andaccommodates the regional end offices by existing facili-ties with areas as much as possible. Therefore, the puretandem exchanges accommodates 50 % of outgoing trunktraffic and the exchanges of other areas takes over the other50 % of traffic.
236
5.5 Supply scheduling of pure tandem exchanges
The tancit..m exchanges are basically facilities used forforming service networks of local end offices with trans-mission equipments. Currently, supply of local exchangesis performed as following: a plan, design of tandem net-works, and design and construction of tandem exchangesare done usually two years, one and half year, and one yearbefore the sale.
5.6 Generation of surplus facilities
Centralization of alternate trunks to the pure tandem ex-changes produces surplus facilities. The inter-office trunklines will increase the tandem lines even though lines inother offices are increased unlike subscriber lines. There-fore, new equipment can be still utilized even though theinter-office trunk lines are removed. Since the existingTime Division (TD) facilities require Ti trunk lines, theexisting TD facilities can be accommodated by rearrang-ing the surplus facilities out of TD systems. The toll lineswill be handled by the TD exchanges for the time being.
5.7 Network switching and traffic control
In order to minimize the surplus facilities and to maxi-mize the existing trunk lines, a certain amount of lines arereserved for switching among pure tandem offices and sys-tems in end offices. The switching should be determinedafter considering whether the traffics can be handled bythe already installed lines.
5.8 Conversion of CEPT transmission method
After considering the amount of the existing T1 facilitiesand the required amount of El facility in the future, wedecide to install the tandem exchanges which have dualfunction of Ti and El.
6 Concluding Remarks
The telecommunication networks have close relationshipwith various fields ranging from detailed execution of planto management, equipment investment, and operations.The pure tandem networks have planned to gain such ad-vantages in overall areas of telecommunication businessover the existing network structure. The expected advan-tages include construction of regional network manage-ment, improvement of traffic control, efficiency increasein equipment ;vestment, construction of intelligent net-works, and flexible conversion toward ISDN.
Acknowledgement
This research has been supported by the Korea Telecom.The authors thank to Ki-Cheon Kim and Tae-Moon Kimof Korea Telecom and the research team of Korea TelecomInternational, particularly Young-Ok Rhee, Hyoung-WookKim, Ki-Young Park, and Seok-Young Jeong.
References
[1] Ki-Cheon Kim and Tae-Moon Kim, "The Construc-tion of Pure Tandem Network in Seoul MetropolitanArea," Journal of Management and Technology of Ko-rea Telecommunication, April 1992 - June 1992.
121 The Implementation Plan of the MetropolitanSwitching Network, Korea Telecom International,March 1991.
[3] Ericsson "The power to take control of network evo-lution," 1990.
[4] A.T. & T.," Definition of Network Traffic Manage-ment," 1990.
237
REALIZATION OF EDI MESSAGE TRANSFER ON AN MHS SYSTEM USING ISDN
Haruhito Yamaguchi, Yukio Saito, Yoshikazu Tanaka
NTT Network Systems Development Center
7-20 Shinjuku 5-Chome, Shinjuku-ku, Tokyo 160 Japan
ABSTRACT
The Message Handling System ((RS) protocols of the X.400 series Recommendations
are well known as an electronic envelope for conveying multi-media messages.
Of a variety of applications over the MHS, Electrical Data Interchange (EDI) message transfer
will be a major business application which can well utilize
the store and forward capability of the MRS and high speed of the ISDN network.
This paper describes requirements for realizing EDI over MRS using ISDN and the outline
of an actual implementation which meets those requirements as well as functional standards.
In addition, this paper outlines an efficient test procedure of interoperablity for EDI-MHS.
1. INTRODUCTION
Since NTT's ISDN services were started in Japan in 1988,
various applications and devices for ISDN data
communications have been developed. At the same time,
an MHS functional profile for EDI transfer, based on
the 1984 MHS Recommendations, was developed by the
Telecommunication Technology Committee (TTC) in Japan.
The authors developed an EDI transfer system by the NHS
over ISDN, called EDI-MHS, based on the above
functional standard and confirmed its good operablity.
The EDI-MHS system consists of 1984 version's MRS
system and EDI terminals which are DOS-based personal
computers (PCs) with ISDN boards. This paper also
describes the outline of the EDI -MRS configuration and
specification and then test procedure taken in this
prototype system.
2. ISDN SERVICE TRENDS IN JAPAN [I] [2]
NTT provides two types of ISDN services in full
accordance with CCITT standards. Their profiles and
features are shown in Table 1. These services are
called INS-Net 64 and INS-Net 1500 respectively. INS-
Net 64 is a circuit switched mode basic rate service,
introduced in April 1988. INS-Net 1500 is a circuit
switched mode primary rate service, introduced in June
1989. (The service names indicate service bandwidth.)
Since June 1990, a packet switched mode service named
INS-P has been provided to the subscribers of above two
services on B channels and the D channel.
The number of service areas was reached to as much as
about 2,000 local service areas by the end of March
1992. Along with the expansion of the service areas,
the number of subscriber lines, counted in terms of
INS-Net 64 lines, was almost 100,000 by that time. INS-
P has gained a great popularity among ISDN users. INS-Pservice is being used by 33 percent of all INS-Net 64
lines.
3. STANDARDS FOR MRS AND EDI [3] [4] [5]
As the availability of MRS grows, EDI is expected to
become one of the most important applications using MRS.
TTC has already defined an MHS profile called JT-X4Il
as a TTC standard. This includes message transfer (4T)
and interpersonal messaging (HMI services and P( /P2
Protocols based on the 1984 and 1988 X.400
Recommendations. There are two specific requirements to
be considered for transferring EDI data over an MHS
network in Japan. The first is to convey existing
business formats based on major domestic industry
Table I °MIMI OF ISDN SERVICES PROVIDED BE NTT
Services Profiles
INS-Net 64 Since April 1018
fissic rate interface (001:20+0)
-Circuit switched code (60bit/sl
INS -Met 1500 Since June 1989
Primary rate interface (1311:230 +D.24B/D1
Circuit switched mode (64kbit/s. 384kbil/s. 1.51(bit/s1
INS-P (for INS
-Net 14/1500)
Since June 1990
'Packet switched sods (B /Dl
RPM(
Pt Envelope :-I' -1 '
:-..
P2 Belding a Body1
..43:,
EncodedIaforaationTypes BodyTyte
Subject
Iltstitts USW
IscodedlaforaationTyPes is coed is 'al:defined'
Subject includes the character string chick indicates the
kind of EDI standard. character code. data type
BodyTyPe is used as 'unidentified'
Body includes one /DI lakerchanse per Body
238
fisnre 2 !DI RELATED UNCTIONS DEFINED IN JT-:411
standards such as the Japan Chain Stores Association(JCA) format. The second is to use a character code set
for Japanese Kenji in EDI messages. To meet the
requirements, several additional functions for EDI
transfer were added to JT-X4II in April 1990 as shownin Figure 2. EDI data is transferred by being
encapsulated within a body part. The type of businessformats and the type of character code sets for
Japanese Kenji are indicated within a P2 subject
element. This approach was defined as a short term
solution corresponds to the so called P2 method, in
order to save immediate needs and use the widespread
'84 MHS network. TTC also plans to standardize long
term solution using X.435.
4. THE PROTOTYPE SYSTEM CONFIGURATION
4.l USE OF ISDN NETWORK
Supposing the environment of the EDI transfer, a large
number of business partners at various locations and a
large volume of transaction are expected. Considering
such characteristics of EDI traffic, ISDN is a
reasonable choice as an access network to EDI-MHS
systems because ISDN is a public network covering wide
area, with a high speed transmission capability
Therefore, ISDN was tried as an underlying transmission
network in this system.
4.2 1411S SYSTEM CONFIGURATION
In this implementation, the MHS '84 system developed by
NTT transfers EDI messages to and from other MHS
systems according to the TTC standard profile described
in Section 3. The EDI terminal submits and reads the
EDI messages stored in the mailbox of this system. The
mailbox access interface complies with the JUST-MHS
profile (61, and the JUST-PC profile (7) which are
domestic standards. This system has also a message
relay capability among other MHS systems based on X.400
standards.
layer? 4
layer6
layer5
layer4
layer3
layer2
layer)
PC
EDI Appl.
JUST-MHS____,
I
X.225 BCS
X.224 class()
X.25 PLP
LAPD/LAPB
1.430/1.431
4.3 EDI TERMINAL CONFIGURATION
4.3.1 EDI TERMINAL HARDWARE (8)
Because the number of PC is increasing in businessscenes, to realize an EDI terminal on a PC takes largebenefit for end users. However, in order to realize the
functions for transferring EDI data by means of the MHSprotocols along with OSI protocol structure over ISDN.
an appropriate configuration needs to be adopted for
the program structure and usage of PC resources.
The EDI terminal hardware is an MS-DOS(TM) based PC
equipped with an ISDN board. Under this configuration,PC can concentrate on Presentation layer and
Application layer including EDI application. On the
other hand, the ISDN board takes care of the functionof layer 1 to 5. This configuration enables to save CPUpower and memory usage of the PC.
4.3.2 EDI TERMINAL SOFTWARE
As an example of business format encapsulated in MHSmessage, this system is according with practical usage
of JCA format. All items in JCA format are expressed byEBCDIC coding.
The EDI terminal software consists of two parts, one isan EDI management program and the other is a
communication program. (see Figure 5) The managementprogram is coded by a database language (DBXL,
compatible with dBASE- 1111 and C language. The mainpurpose of the program part written in C language is
for code conversions. (from ASCII to EBCDIC, and viseversa) The EDI terminal system features are shown in
Table 4.
ISDN
X. 25 PLP
LAPD/LAPB
1.430/1.431
t
PCISDN Board
NTT-MHS
JUST-MHS JT-X4Il
X.225 BCS X.225 BAS
X.224 class0 X.224 class°
X.25 PLP
LAPD/LAPB
1.430/1.431
I "I s
ISDN Network
NIT-ES(ISDN Network
Figure 3 SYSTEM CONFIGURATION AND PRuTOCOL STRUCTURE
239
CZ-4>
Other MHSs
MHSs
Table 4 THE FEATCHS OF NI-N3S TEEMINAL PROSEAM
Feature Benefit
Software
strac-
turn
Tbe DOS file interface is
coed between communication
program and database
Mtn!.
An existing canna:cation program
with s DOS file trassfer capability
can be selected as it is.
Coamuni-
catior.
prograa
A JEST-NRS control program
is toed.
This enables NES aailcox access
based on a standard profile.
An ISDN control prograa is
used.
The bib speed capability and short
connection tine can be obtained.
EDI
alaage-
meat
prograa
The data-base program has a
function to swap oat to
Disk.
Execution of the EDI racagement
Program and e.aannication program
is realized on PC's restricted
memory eirrironment.
Dtber
feature
Ipractical
DAM drixe is mounted. The response of exeenting the
programs become reasonable for
use.
Personal Cocputcr
ISDN
board
MS- DOS(TM)
Switching Function
H----
ISDN
Packet
Code Database Soft
Communication Con-
ver- DA application
BUS
software
sion MI management,
ED a a ED a a
I DOS file DB scheme
Figure 5 STRUCTURE OF EDI TERMINAL SOFTWARE AND HARDWARE
5. TEST PROCEDURE FOR INTEROPERABLITY
In order to confirm the functionality of the MHS, th,
system need to make interconnection with other MHS:
developed by different vendors. An efficient method wat
necessary to make sure of the EDI-MHS system':
interoperablity with other EDI systems via MBE
including its message relaying function. The following
testing method was in'roduced for connecting those
systems.
layer?
layerl-6
STEP A: To establish a bilateral interconnection
between a relay system and an end system.
STEP B: To establish end-to-end multilateral
interconnections among end systems.
In each of step A and step B, there are sub-steps to
confirm interconnection on a layer-by-layer basis.
These sub-steps are as follows.
STEP A -O:To exchange connection data for NHS
interoperation between MHS systems and check the
connectivity. This step is described in (4].
STEP A-1:To test between one MRS and another HES byusing IA5 text message.
STEP B -O:To test between one MRS and another HHSthrough a relay MHS by using IA5 text message.STEP B-I:To test between one HES and another HESthrough a relay NHS by using EDI interchange.
The purposes of each sub-steps are described below.
STEP A -O:To confirm basic connectivity for STEP A
before actual testing steps.
STEP A-1:To confirm P1 /P2, RTS and lower levels
interoperablity bilaterally.
STEP B -O:To confirm end to end PI/P2 level
interoperablity.
STEP B-I:To confirm end to end EDI format level
interoperablity.
In order to efficiently execute STEP A of the procedure,
an auto-answer in our UA in NHS is available. By
utilizing this auto-answer UA, end systems can carry
out bilateral tests at each systems' convenience. When
all of end systems confirmed STEP A, then they can
proceed to STEP B.
This procedure was adopted in the course of creating
HATS (Promotion Conference of Harmonization of Advanced
Telecommunication Systems) demo environment at
Communication Tokyo '91 held in April 1991. It was
exhibited to appeal the usefulness of EDI transfer over
HES to the public.
Originator MRS Recipient MRS
STOP A I RTS level
240 /
Underlying Layers
Figure 6 OSI LAYERS AND TESTING STEPS
6. CONCLUSION
This paper mainly described prototype implementationsof our EDI-MHS and the testing method of
interoperablity including EDI message transfer. The
following points were presented.
(1) The 1984 MHS system and the PCs are workable to
provide the function which meets the TIC standard
profile for practical use of EDI transfer over ISDN.
(2) To divide the terminal program into the
communication program and the EDI canagement program,
and keep independence between those programs, enables
users to select an existing communication program
supporting an MHS access without change, in a PC's
ordinal resource environment.
(3) For the demonstration in 1991 that NTT participated,
the test procedure was introduced and the efficiency of
it was confirmed. The interoperablity including relayfunctionality between our EDI-MHS system and other
vendor's systems was also confirmed.
REFERENCES
(11 T.Kawauchi, 'Service Expansion Plans for an Age of
Full-Scale ISDN Communications', NTT REVIEW, Vol. 3,
No.6, pp.13-18, November 1991.
(21 H.Ishikawa,'Evolving from N...rrowband', IEEE
Communications Magazine, August 1992.
(3) TTC Standard, Volume V, Part t : MHS Interworking
Profile, JT-X411
(41 Y. Saito, M.Teramoto, K. Uegaki, 'EXTENSIONS AND
EVALUATION OF METHOD FOR MHS INTERWORK', Computer
Networking, North-Holland, @ IFIP, 1990, pp. 177-186
(5] M. Nomura, Y. Tanaka, Y.Saito, K. Uegaki, 'MRS AND EDI
APPLICATIONS OVER ISDN IN JAPAN', ICCC'92 Proceedings,
459-454
i6] Japanese Unified Standard for Telecommunication
Message Handling Systems; Notification No.887 of the
Ministry of Posts and Telecommunications, 1981
(7) Japanese Unified Standard for Telecommunication
Personal Computer; Notification No.971 of the Ministry
of Posts and Telecommunications. 1984
(8) T. Soga, K. Nomoto, T.Shutoh, ''I-Board 64' for
Personal Communication over ISDN'. PTC'92 Proceedings.
241
BIOGRAGHY
Haruhito YAMAGUCHI
Engineer, Packet Switching Systems Project Group,
Network Systems Development Center, Nippon Telegraphand Telephone Corporation (NTT). Mr. Yamaguchi is now
engaged in development of Message Handling Systems. He
received his B.E. from Tokyo University in 1989.
Yukio SAITO
Senior Engineer of the Packet Switching Systems Project
Group, Network Systems
Development Center, NTT. Mr. Saito is engaged in
research and development of message handling systems.
He received a B.E. and M.E. in 1919 and 1981 from KeioUniversity. He is currently a member of the Instituteof Electronics, Information and Communication Engineers
of Japan.
Yoshikazu TANAKA
Executive Engineer of the Packet Switching Systems
Project Group, Network
Systems Development Center, NTT. Mr. Tanaka has beenengaged in research and development of data exchangenetwork, OSI protocols, and message handling systems.He received a B.E. and M.E. in 1976 and 1978 from Kyoto
University, and is currently a member of the Instituteof Electronics, Information and Communication Engineers
of Japan and a member of the Information ProcessingSociety of Japan.
THE WRISTWATCH AS A PERSONAL COMMUNICATIONS DEVICE
ByHiroshi Komatsu, Ryoichi Norose, and Steven J. Symonds
SEIKO Corporation/SEIKO Telecommunication SystemsTokyo, Japan; Beaverton, Oregon, USA
Panel on the Convergence of Wireless TechnologiesPacific Telecommunications Conference
Honolulu, Hawaii, January 1993
ABSTRACT:
PCS is the "hot button" today in the telecommunications industry, but atpresent only the SEIKO RECEPTOR MessageWatch and cellular telephones cantruly be called personal communication products. The RECEPTOR System andtechnology products such as the MessageWatch are uniquely mass-marketoriented and intended for use by the general consumer. The RECEPTORSystem is available today, offering not only personal messaging, but alsoa host of information services in a convenient, affordable, highlyaccurate wristwatch.
1. PERSONAL COMMUNICATIONS SERVICES:PROMISE VS. REALITY
Personal Communications Services (PCS) is withouta doubt today's "hot button" in the telecommuni-cations and information industries. Driven bythe prospect of the typical consumers buying awide variety of PCS devices that will materiallyincrease the quality of their lives, sufficientto justify them paying hundreds or thousands ofdollars for manufactured products and tens orhundreds of dollars a month for services, manu-facturers and network organizations are toutingthe marvels of PCS in prose reminiscent of tgreat expectations of the still-nascent homeautomation revolution.
SEIKO Corporation, and its sister company, SEIKOEpson Corporation, are also very bullish on PCS,but with one important exception from most of therest of the pack: We have developed, manu-factured, and are selling and servicing the onlymass consumer PCS product available today, theRECEPTOR MessageWatch. Shortly we will provide adescription of the RECEPTOR system and its firstconsumer product form factor, the MessageWatch.First, though, a little marketplace realitytesting is in order.
Let's start with the almighty consumer. Why dothey want ?ersonal Communications Services andProducts?
For efficient time management.
For rapid communication with family andbusiness in today's extended socialenvironment.
For effective, convenient means to handlethe information overload that has becomethe norm of our daily lives.
242
In other words, the Consumer Wants Mobile,Portable, and Convenient Communications Toolsthat help him or her manage and enhance his orher day-to-day life.
Sounds good, so far. In addition, we wouldcontend that, for a product to be truly PCS, ithas to meet rather rigorous ConsumerRequirements:
Small and rugged
Easy to use
Relevant to daily lifestyle needs
Low product prices
Low service prices
We would suggest that, based on consumer wantsand requirements, there is only one PCS productavailable in the market today, the RECEPTORMessageWatch.
This is not meant to ignore or snub such fineproducts as the HP95LX with SkyTel's data module,Motorola's EMBARC and Info-TAC, Apple's Newton,AT&T's GO/Hobbit, and many others. At present,though, these products are geared for andtargeted to the niche market so admirably repre-sented here at PTC '93 -- the business pro-fessional. All of these products satisfy theConsumer Wants criteria, but miss badly on one ormore of the Consumer Requirements criteria.
Even cellular telephone has been struggling tomeet these consumer requirements, for examplethrough marketing strategies such as "bundling ":treating the cellphone product as a "razor blade"handle, it is almost literally given away toattract consumers into becoming service
subscribers with contracts to pay for airtime(the "razor blades"). The first time theconsumer gets a monthly bill of more than $100for airtime (keep in mind that the average longdistance bill in the U.S. is $35 per month), thecellphone gets put on the shelf, as evidenced bythe very high churn rate for non-business cellu-lar customers. The consumer just isn't going topay many hundreds or thousands of dollars forproducts and services if these are, at bottom,extremely sophisticated, elegant, but expensivesubstitutes for paper and pen, or provide answersto problems people never knew they had in thefirst place.
As a result of spending billions of dollars ondeveloping products spurned by the market, com-munications product manufacturers have gotten themessage, and have come up with other ways to tryto stake out a presently narrow but possiblylarge future market. One of these methods isparticularly evident today in PCS: concentrateon building a platform to support end-userproducts. There is an abundance of activity inplanning for the construction of satellite,narrowband, and broadband platforms, all requir-ing significant capital investments, all predi-cated on a very small base of business users whowill provide both the market impetus and profitmargins required to trigger the explosive growthof demand for PCS products and services. To topit off, many of these platforms require theissuance of basic rules and regulations by theFCC for both PCS platforms and devices.
It may yet happen. In the meantime, we haveRECEPTOR MessageWatch.
2. THE RECEPTOR SYSTEM
RECEPTOR is the essence of simplicity, operatingon a standard FM radio transmission platform.Personal messages and information intended forMessageWatch are created using anything fromplain old telephones to more sophisticated inputdevices, and sent to our Message Center over theexisting telephone network utilizing thestandardized X.25 network protocol. MessageEntry, Message Processing, and Message Trans-mission are all handled at the Message Centers.
The final element in the platform, MessageTransmission, is accomplished by the insertion ofsubscriber messages and information services intothe SCA portion of the FM transmission utilizingan SCA generator.
The RECEPTOR technology, currently offered in itsfirst configuration as the SEIKO RECEPTORMessageWatch, is an extraordinary PCS device wornby the consumer. When not operating in itsreceiver mode, the MessageWatch is a multi-function, digital quartz timepiece with SEIKO'slegendary quality and accuracy -- accuracy en-hanced by automatic radio transmission updating,36 times per day. The MessageWatch is anengineering marvel, a fully addressable personalinformation terminal: a unique FM antenna builtinto the wrist band; a frequency-agile receivercapable of locating messages broadcast anywherefrom 88MHz to 108MHz; on-board testing and diag-nostic functions; a programmable memory; andliquid crystal display.
243
3. RECEPTOR CAPABILITIES & FEATURES
The capabilities and features of the RECEPTORMessageWatch make it the general consumer PCSproduct for today:
Utilizing a patented time-slot protocol forpacket transmission, data is distributed at aspeed of 19.2 kpbs.
With a standard lithium watch battery, Message-Watch will provide personal information servicesand timekeeping functions for One Year.
Each MessageWatch is fully addressable, and, withthe unprecedented data speed, enables subscribersto receive a vast array of personal informationservices, in addition to the typical pagingservices including: Weather Reports, SportsScores, Coded Messages, Lottery Numbers, Stock-Market Quotes, and Voice-Mail Alerts, and BankBalances.
System capacity is enormous, with the ability toservice hundreds of thousands of subscribers in asingle market using only one Message DistributionSystem, and all operating within an FM/SCA trans-mission environment that eliminates the need forany of the in-field, capital-intensive distri-bution plant required for paging, cellular, orPCN technologies.
The use of FM/SCA transmission has otheradvantages. No FCC license is required (thesubcarriers are leased from radio stations), andthere are essentially no foreign ownership orother FCC restrictions. In addition, the FM bandis in use for the same broadcast purposes aroundthe world, making RECEPTOR the only PCS devicethat could potentially be used, with no modifi-cation, anywhere on the globe.
4. CONCLUSION
RECEPTOR is operational and available today, withservices and products being offered at present inPortland, Oregon and Seattle, Washington. Wehave thousands of happy subscribers who useMessageWatch to fill personal, business, or bothpersonal and business needs.
The MessageWatch is being sold in theHome/Consumer Electronics section of retailers inthese cities at price points around $150, and theresponse is nothing short of fantastic. They arecharged $12.50 per month for as many informationservices and messages as they would like to use.
We have found that people who purchase theMessageWatch fo- personal use are not accustomedto making use of PCS services, so we haveexpanded the array of information services toprovide connections between their day-to-dayinformation needs and RECEPTOR's capabilities.
We have already completed work on the next gener-ation MessageWatch, which is almost half the sizeof the present version, with even more capabili-ties and features. We are also working ondevelopment of other devices and modulesutilizing the basic RECEPTOR technology package.
We view RECEPTOR MessageWatch as a basic, endur-ing Personal Communications Services product,completely compatible and synergistic with all ofthe Business Communications Services (BCS)
products that are currently available and the newPCS products that everyone is still talkingabout. We look forward to that time, possibly inthe not-too-distant future, when RECEPTOR workshand-in-hand with other PCS products that are notavailable today. Until then, there is RECEPTOR,which is already making a difference in the livesof general consumers.
244
The Expansion and Liberali.zaLion or MobileTelecommunications in Korea
by
Yong Son
Sang-Chu' Lee
Juneil C. Ryee
Chung-Ang University
Seoul. Korea
I. Abstract
The paper focuses on the situation of mobile telecommunications services. This sector
has been growing so fast in the last decade or so as the nation is getting informatized.
To meet the increasing demand of this, the nation established Korea Mobile Telecommuni-
cations Corporation in 1984. The second and third mobile telecommunications corpor'ations
will be established in the 1990s not only to better serve the local market but to
positively face up to the International competition.
2. Introduction
The basic structure of Korean telecommunications in-
cludes the broadcasting sphere like the network and
cable broadcasting, and the electronic sphere that en-
compasses telephone, telegraph, value-added telecommu-
nications and mobile network.
The structure of Korean telecommunications sector has
normally been administered as well as practiced by a
state or public corporation in an exclusive manner.
The trend is, however, moving towards a civilian hands
as the nation is undergoing the fast democratization
process to fit the global liberalization process.
Especially, the mobile telecommunications is the
core area in this sector that shows a tremendous growth.
The mobile area will continue to expand at a faster
pace than ever before as the nation is moving towards
the informatization process. The future is bright
because of an ability of mobile telecommunications to
transcend time and space.
The mobile telecommunications has been growing fast
in Korea during the last several years both in paging
and cellular phone services. The selection of second
mobile telecommunications company will be made in near
future. This is surely not only to increase supply of
mobile telecommunications facilities but to upgrade the
technology of this sector.
Based on this backdrop, this paper intends to exam-
ine the current situation of Korean mobile telecommuni-
cations sector, and further to probe the ways to im-
prove this sector.
3. The Situation and Policy of Korean Mbbile
Telecommunications.
1) Historical Sketch of Mobile Telecommunications.
The mobile telecommunications was first used in 1910
when the nation used this technology as a means for
air-traffic signal. During the Japanese occupation of
Korea (1910 1945), the primary function of mobile
telecommunications was not only to effectively perform
the colonial policy but to maximize the war effort.
The mobile telecommunications has, however, become
operational in 1960 when Korea Telecom introduced the
manual IMTS(Improved Mobile Telephone Service) system
to provide movile telecommunications service primarily
to governmental agencies in limited areas around Seoul.
The kind of this service was very limited, and its
quality of function was poor as well.
REST CcIPY AM ALA 245
The improved mobile telecommunications servi:e, how
ester. became possible when the nation introduced the
AMPS (Advanced Mobile Phone Service) system, called
cellular phone system, invented in North America. The
introduction of this system made the mobile telecommu-
nications very popular. In the meantime, the wireless
paging service first became operational in 1982, fur-
ther improving this service by introducing the tone and
display system in 1986.11
Based on this backdrop, this paper intends to exam-
ine the current situation of the Korean mobile tele-
communications service, divided into the user, service
area, market and the development of technology.
(j The Situation of User
The user sector has showed a phenomenal growth when
the nation announced a drastic measure to modernize the
mobile telecommunications service in 1982. According to
this plan, the Korea Mobile Telecommunications Corpora-
tion was established in 1984 to vastly improve the
quantitative as well as qualitative services. The Korea
Mobile Telecommunications Corporation was selected as
the user of public telecommunication service in 1988.
Accordingly, the facilities for mobile telecommunica-
tions service was completely transmistted from Korea
Telecom into Korea Mobile Telecommunications Corpora-
tions. The company has developed so fast that it
publicized its business content in 1989. The nation
intends to selet user of the second mobile telecommu-
nications company.
:!) Service Area and Scope of Market
The service area of mobile telecommunications includes
c.ar phone, hand phone, paging service, mobile wireless
public phone and spectrum public telecommunications
service.
Demand for mobile telecommunications service has
greatly im rea%ed in the 1980s enough to move into a
se, c,nd :.cage of mass growth in the 1990s. The following
1) Sang-So Yoo. Market Situation of Mobile Telecommu-
nications, Electronic Development, April 1992,
pp.18-19.
table below shows a growth rate of Korean mobile tele-
communications service subscribers from 1984 to 1992.2'
Table 1) The Increase Rate of Subscribers in Korean
Mobile Transmission.
Year 1984 1985 1986 1987
cellular 2,600 5,000 7,000 10,000
paging 15,000 19,000 37,000 60,000
1988 1989 1990 1991 1992
20,353 40,000 80,000 166,198 260,200
100,000 198,000 410,000 850,516 1,403,000
0 Development of Technology Sector
Contrary to the fast
communications sector,
various equipments
development of mobile tele-
an ability to produce the
and software is in a preliminary
stage. Even the accumulation of technology in terminal,
assumed to be relatively easy in technology, is still
in a developing stage. However, it Is very encouraging
the nation is greatly increasing the research and deve-
lopment funds in this sector.
2) Policy Situation
The telecommunications business belongs to a highly
technology-intensive as well as value-added sector
especially in an information society. This kind of
industry is fully supported in many countries as a
core sector enough to improve advanced technology and
economic development.
As shown in the breakup of ATT in 1984, the interna-
tional trend of mobile telecommunications industry has
been fastly moving towards decentralization in an
attempt to maximize compitition. This process includes
diversity and civilian control.
The mobile telecommunications sector is also in the
process of structural change in Korea. Accordingly, the
Governments is under investigation to promote the
mobile telecommunications industry. The following is a
2) Jung-Ang Ilbo, June 20, 1992.
246
brief review on the revision of laws related to the
changing mobile telecommunications industry.
The structure of Korean telecommunications policy is
aimed not only to ease the internal competition but to
strengthen the international competition. The Ministry
of Communictions, which is primarily responsible for
the telecommunications policy, has recently shown a new
telecommunications policy towards removing the current
heavy restraints. According to this direction of
policy, two basic laws-electronic telecommunications
law and electronic telecommunications businesses law,
were revised in 1991.
The basic telecommunications law primarily regulates
the relationship between the Government and the
electronic telecommunications business. This law was
revised in a way to effectively meet the highly
competitive international environment.
The telecommunications business law
lating the comprehensive business area
tions. Under this revised law, general
business
Minister
focuses on regu-
of telecommunica
telecommunication
is supposed to be designated by the
of Communications, while
communications business is subject
value-added business is possible
only.
Ultimately, the revised telecommunications business
law was to liberalize the traditionally restraint
oriented position to more effectively face up to the
changing telecommunications environment. This libera-
lization policy made it possible to establish the second
mobile telecommunications is to open a competition era.
specific tele-
to license. The
upon registration
4. The Plan for Establishment of Second Mobile
Telecommunications and Its Issues of Conflict.
1) Background for Its Establishment and Selection
for the User.
The mobile telecommunications environment has been
fastly changing both internally and internationally in
the 1990s. That is, the trend is moving towards libera-
lization and internationalization. The only solution
for this is to improve the quality of technology. The
rapid development of telecommunications technology
brought the various new services, and the charge in cost
factor as well. That is, as this industry has greatly
expanded both in size and scope, the traditional
monopolization of this sector by a corporation is
losing grouns for rationale. And, as income of people
increase fast, so changes the life style. This is
likely to increase the diversity of needs.3)
Such change for environment caused a policy change to
allow a competition by establishing the second mobile
telecommunications corporation in the near future. The
background for competition in the Korean mobile tele-
communications sector can be divided into two aspects.
First, the mobile telecommunications service has
greatly changed in the local market. This change was
possible as the nation had continued to invest in this
sector in the 1980s. As a result of such continued
investment, the mobile telecommunications service was
expanded to a nationwide scale in the 1990s. The ex-
pansion of this service area vastly increased a
potential for market.
However, as the demand rose so fast, supply could not
meet the demand. The qaulity of mobile telecommunica-
tions service was poor as well. This indicated a limit
to growth under the traditional monopolization
structure. The monopolization structure not only
caused a poor customer service but an expensive rate of
service.
Second, the mobile telecommunications industry has
reached a mature stage in the developed countries
enough to expand the foreign markets. Accordingly, the
developed countries has been showing a keen interest in
entering the foreign markets based on the advnaced
technology.
The Korean Government has positively reviewed a
competitive structure in this sector not only to
accelerate the service area of mobile telecommunications
but further to improve an international cok....Y.tiveness.
The preliminary stages for competition are as follows:
March-November, 1989 : Feasibility Study by Develop-
ment Committee of Information Transmission: Proposal for
Structural Charge in Transmission Business and for
Competitive Environment.
July 1990: Decision for Structural Change in
3) KISDI, Telecommunications Policy Issue, vol.4, 1992,
P.2.
247
Tel4ommunieation Business for Competitive Environ-
ment; Transformation of Mobile telecommunications
Business into an Approval System to Improve Competition.
August-December 1991 : Drastic Revision of Basic Law
and Business Law in Electronic Transmission.
14 April 1992 : Announcement for Application of
Approval in Mobile telecommunications Business.
23 June 30 June 1992 : Acceptance of Application
Form in Mobile Telecommunications and Paging.
August 1992 : Final Review and Decision on Application
of Cellular Phone and Paging.
September 1992 : Return of License on Cellular Phone
by TAEHAN Telecom.
2) Disputes in the Process of Licensing.
The Ministry of Communications announced the
licensee of second mobile telecommunications service on
20 August 1992. However, the decision of licensee was
under a great dispute as other bidders raised an unfair
practice in the process of decision. This dispute
further spread into a political and social issue.
First, viewed from a political perspective, the
decision of licensee of the second mobile telecommunica-
tions business was regarded as the greatest priviliged
rights of the Sixth Republic. As a result, a great
dispute was focused on whether there was a political
intervention in the process of decision in licensee.
The reasons for such dispute are as follows;
First, there was a unfairness in the criteria of
qualification for the licensee-applicant. The criteria
for qualification was based on the telecommunication
law. This law says that any corporation related to
manufacturing telecommunications equipment can't
participate in mobile telecommunications business ex-
ceeding 10%. This provision was made under a premise
that a sound development of mobile telecommunications
business is hardly possible in case one corporation is
involved both in manufacturing and service areas. Under
this provision, while such big corporations like Samsung
Hyundai, Lucky-Gold Star and Daewoo were not qualified
due to their involvement in this business, the other
big corporations like Sunkyung and POSCO(Pohang Iron
and Steel Company) were entitled to apply for the
li(ensee beLause thest companies were nut involved in
teletommunications s,rvice area.
S,-e mid. there was a unfair practice in the s,.reening
process of licensee. The Ministry of Communications
established a licensee committee manned by specialists
to decide the screening criteria. The Ministry screen-
ed the licensee-applicants two times based on this
criteria. However, even this kind of process could not
guarantee the fairness.
Especially, the decision of licensee couldn't dispel
the political involvement in that this business will
bring an enormous financial privilege. Therefore, the
greatest task in the future decision process is how to
guarantee a fairness that can be satisfied by all the
parties concerned.
In another, the screening criteria should give more
merits to technology point because this belongs to
technology-intensive business. The technology point is
far easier to guarantee fairness and objectivity.
The technology point, however, needs caution in that
the applicant is supposed to collaborate with a foreign
counterpart. This was proved as the six local appliants
were shown an interest in joint venture with foreign
companies.
As mentioned elsewhere, the decision for second mobile
telecommunications business was postponed. The future
decision should be made on a fairer basis with
aforementioned disputes in consideration.
5. The Prospect for Korea Mobile Teleoumainications.
There will be a fast as well as vast development in
mobile telecommunications business as the nation under-
goes the structural change in industry. Korea, as is
known, is under the transition process from manufactur-
ing to information and service industry. This is likely
to raise diversity of customer needs in mobile tele-
communications service.
The prospect for development in Korean mobile tele-
communications service is predicted as below under this
changing environment.
First, service will be diversified. The recent service
competition in this area addes diversity of services to
traditiolal paging and hand phone service. For instance,
the pag,ng service renders customer not only the tradi-
tional telephone number but the related message. The
hand phone service is now possible even in underground
parking lot and shopping center. The traditional hand
phone service was not possible in this specific area.
248_ .
The service area was also vastly expanded to an extent
that international paging service is possible.
In the meantime, in addition to diversity of tradi-
tional service, new mobile telecommunications services
show up. Several examples include CT-3 service, wire-
less data service, and mobile telecommunications
service by satellite.
It is also expected that the combined service of wire
and wireless telecommunications will be rendered to
customers in the 21st century. In this process, the
service will be more diversified from the traditional
voice-centered service into the combined voice and non-
voice services.
Second, there will be a great development in
technology. The technology will be developed in a way
to diversify as well as accelerate the diversity of
service. This means development both of technology re-
lated to frequence resources and of technology related
to service itself. The increase of mobile telecommuni-
cations business is likely to cause scarcity of
frequency resources. This will increase an interest in
technology development to effective use of the existing
frequency resources. This requires a development of
new frequency band. For instance, as the demand of
cellular phone is fast increasing especially in the
metropolitan area, supply couldn't meet the demand
under an analog system. The Government, therefore, is
developing a digitized cellular system, called CDMA
(Code-Division Multiple Access), to make this system
operational by 1994.4)
Third, it is nrnessary to expand the scope of market,
and strengthen the competitive structure. The Korean
mobile telecommunications market is annually increasing
by 76.4%. If this trend continues, there will be 4.5
million subscribers of cellular phone plus 3 million
subscribers of paging service by 2.000. The market
size will be about 2.7 trillion Won ($200 billion).5)
Following the selection of the second mobile tele-
communications
will announce
licensee, the Ministry of Communications
the screeing pocedure
mobile telecommunications licensee
for the third
in 1994."
increase of mobile telecommunications licensees
likely to strengthen the competitive structure.
To revitalize the mobile telecommunications business,
The
is
4) Monthly New Media, August 1992.5) The Domestic Mobile Telecommunications Business: Its
Situation and Prospect, Ssangyong Economic InstituteJuly 1991.
6) Monthly New Media, August 1992.
three areas market (demand), technological and policy
are to be examined as follows.
Market Aspect
Viewed from a market perspective, mass use for mobile
telecommunications will be necessary." Any industry
needs to motivate the energetic purchasing power for the
continued growth. For this, the industry needs to close-
ly examine what kind of services the customer needs.
A more concrete method for mass use is also to improve
the system of mobile telecommunications business. This
kind of method includes reducing installaton and rate
fees. Ths ultimate method for this will drastically
reduce the rate fee wnile the installation fee will be
dropped. This ultimate method, however, will take time
because the enormous investment should be compensated by
both fees.
0 Technological Aspect
The early development of domestic technology as well
as a localization of service is vital to smooth growth
in this sector. The mobile telecommunications sector
still highly depends on the foreign technology. The
urgent task is how to improve the technology of mobile
telecommunications to an advanced level enough to
compete with the developed countries when domestic
market is open to international competition.
The localization of this technology is vital because
the mobile telecommunications network will form the basic
social structure as society is getting informatized. The
development of local technology will also strengthen the
bargaining power with international competitors.
3) Policy Aspect
A viable policy is vital to growth of any industry. A
strong government policy is, therefore, needed for the
mobile telecommunications business for this business to
grow as a strategic industry. The mobile telecommunica-
tions network will form a vital ntwork in every sector
of public and social life. This sector, as an highly
advanced industry, is likely to greatly affect other
industries related to this sector.
This effect will increase an opportunity for employ-
ment as market fast grows. At a national level, there
will be an effect of accumulation in the basic
technology.
7) Phones per 1,000 persons in comparable countries(1991) are 26.1 phones in Hong Kong, 22.2 inSingapore, 7.7 in Taiwan, 6.8 in Malaysia and 3.8 inKorea
249
WIRELESS COMMUNICATIONS AND PERSONAL FREEDOM
By Phillip L. SpectorPartner, Paul, Weiss, Rifkind, Wharton & Garrison
Washington, D.C., U.S.A.
Chairman, Panel on the Convergence of Wireless TechnologiesPacific Telecommunications Conference
Honolulu, Hawaii, January 1993
ABSTRACT:
Through a wide variety of overlapping approaches -- e.g., PCS, CT-2, wirelessLANs, mobile data, mobile satellites -- innovative companies are promising tointegrate wireless data and voice communications over seamless networks."Old" technologies, such as cellular and paging, are being used in new ways(for example, for information and data services), and the technologies todayunder development (particularly PCS and mobile satellites) suggest a future inwhich constraints of time and place will become essentially irrelevant tocommunications. Despite fears of invasion of privacy in this new wirelessera, in fact these technologies should be liberating, freeing users tocommunicate with anyone, from anywhere, at any time.
I. INTRODUCTION
When the history of communications in the 20thcentury is written, the 1990s will be rememberedas the decade of wireless communications.Although mobile services have been available formany years, it was only as the 1990s dawned thatthey started to become ubiquitous. As pricescharged for mobile equipment and servicesdropped, a surge in demand followed.
Many have questioned whether the increasingubiquity of mobile communications represents anunalloyed good for the community. In this view,having a portable phone always in your pocket,and perhaps a pager strapped to your wrist,represent unwanted intrusions; they mean that oneis not safe anywhere -- not even on an airplaneor in a boat -- from those demanding attention,be they office colleagues, disruptive sales-persons, ex-wives, or even current ones. From aregulatory perspective, this view suggests thatperhaps we should not be in a rush to implementnew personal communications services ("PCS"),because we will only intrude further onindividual privacy.
I take a different view. My thesis here is thatmobile communications represent an essentialelement of personal liberty, freeing individualsfrom the constraint of having to be in a particu-lar place in order to communicate with one an-other. This thesis is not a new one, but it isgiven heightened salience by the emergence of newmobile communications technologies. Through awide variety of overlapping approaches -- e.g.PCS, CT-2, wireless LANs, mobile data, mobilesatellites -- innovative companies are promisingto integrate data and voice communications overseamless networks, allowing the user to communi-cate with anyone, from anywhere, at any time.
This paper explores these new technologies, notfrom a technologist's perspective, but ratherfrom the perspective of the user and regulator.The paper will locus first on existing networks,such as cellular, SMR, and paging, and on howtechnological advancements have made these net-works more accessible. The paper will thendiscuss proposed technologies, including particu-larly PCS and mobile satellites. Finally, thepaper explores questions of convergence andstandards-setting, and the relationship betweenwireless communications and personal freedom.
II THE "OLD" TECHNOLOGIES ANDTHE "NEW" APPLICATIONS
Cellular telephony, in approximately its currentform, has been available commercially in theUnited States for some ten years. At the outset,cellular telephones meant car telephones; thelarge units were installed almost exclusively inautomobiles. The cost of cellular equipment,cellular service, and cellular "airtime" were allrelatively high, making cellular almost ex-clusively a service for the well-heeled and forthose, such as salesmen, spending a substantialpart of their business day traveling amongvarious locations.
Today, this situation has changed dramatically.Thanks in large part to advances in miniaturi-zation, spurred by advances in semiconductortechnology, cellular phones have become both muchsmaller and much less expensive. The monthlyprice of access to the cellular network hasdropped, with numerous discount pricing plansavailable, and per-minute airtime charges havefallen, making cellular service far more afford-able. The combination of these developments hasmade cellular increasingly a consumer product,
Copyright (f:' Phillip L. Spector 1992. All rights reserved.
250
one used not just by the business person, butalso by the father or mother worrying about thechildren, the woman concerned about a car break-down on an isolated road, and the person whosimply enjoys talking on the telephone.
The dramatic success of cellular over the pastdecade -- far beyond anyone's imaginings -- hasled to attempts to use other spectrum for cellu-lar-like services. The most publicized use of an"old" technology for this new purpose relates tothe specialized mobile radio ("SMR") bands, whereFleet Call and others have proposed digitalservices with many similarities to cellular.These services, of course, have the healthyeffect of creating competition for cellular,thereby driving down the prices of all mobileservices. In addition, the apparent success ofenhanced SMR services has led to demands for morespectrum, and thus to the PCS developments dis-cussed below.
Finally, there is paging. This service hasexisted for many years, but it has always been aneglected stepchild of the mobile servicesindustry. Now, however, with renewed interest inmobile communications, this situation ischanging.. The consumer market has become aparticular focus of paging companies, which nowoffer wristwatch products, credit card-sizedpagers, and pagers in designer colors. Manybelieve that, with the consumer market stillvirtually untapped, the potential for growth inpaging is phenomenal.
III. MOBILE SATELLITES. MOBILEDATA. PCS, AND MORE
The tremendous growth in cellular and pagingservices has led many to believe that the user'sappetite for wireless communications is virtuallyunlimited. One response to this perceived appe-tite has been, as discussed 'stove, the conversionof "old" services, such as SMR, to "new" uses forthe general public. Another, more significantresponse has been the burgeoning proposals forthe creation of new mobile communicationsservices.
The most expensive of these proposals involve theconstruction, launch, and operation of satellitesdedicated exclusively to mobile uses. TheAmerican Mobile Satellite Corporation ("AMSC") isplanning to spend hundreds of millions of dollarsto launch a single satellite, intended to fill inthe rural and other "gaps" in U.S. cellularcoverage; AMSC is backed by several large com-munications companies, including Hughes, McCaw,Singapore Telecom, and Mtel. Other large corpo-rations -- most prominently, Motorola, TRW, andLoral -- have filed their own applications withthe FCC, vying for the right to spend billions ofdollars on mobile satellite systems.
Will all of these mobile satellite systems belaunched? Almost certainly not. Great as thepublic's appetite may be for mobile services, thefinancial community's appetite for writing checksto finance these proposals is likely to be some-what more limited. In addition, it is far fromclear that all of these mobile satellite systems
251
will receive lOicenses from the FCC, which is
facing competing demands for quite limited spec-
trum. Finally, even the most optimistic ofmobile service advocate, may have difficulty
justifying several competing mobile satellite
systems, each using different handsets and
different technical standards.
Mobile satellite systems face competition notonly from conventional cellular services, butalso from the increasingly ubiquitous mobile datasystems. These terrestrial-based systems offercorporate users a host of new ways to communicatewith their sales and delivery forces with regardto such matters as inventory control, order-taking, and the like. As the FCC learned when itopened up the 220-222 Mhz spectrum for digitalcommunications and received some 60,000 applica-tions, there is strong interest in providingmobile data services to businesses, and inobtaining any available spectrum for mobileservices.
This strong interest has manifested itself inother ways. Many of those involved in hardwaremanufacture, such as AT&T, IBM, and Apple, havemade recent announcements about small, handheld"personal communicators," which are essentiallycomputers incorporating wireless messaging capa-bility. The fact that these companies havedevoted significant resources to the miniaturi-zation and radio transmission aspects of comput-ing devices is a strong indication that the eraof wireless data communications has only justbegun. Other developments, such as the increas-ing use of cellular frequencies for data trans-mission, underscore the importance of thissector.
All of these futuristic developments in wirelessservices are overshadowed by the promise of, andhype about, PCS. Unless one is referring tcspecific services in the 2 GHz band, it is diffi-cult to define "PCS," which can mean any mobileservice intended for personal use. Thus, forexample, the cellular industry argues that, withthe tiny portable phones available today, PCS isalready available via cellular frequencies, andSeiko Corporation markets a wristwatch pager withother information service features as a "personalcommunications device." It is no accident,moreover, that the aforementioned small computerswith communications capabilities are referred tcby various names incorporating, typically, theword "personal."
The debate about who provides the "real" PCS isnot a very productive one, and it obscures thefact that there are some significant technologi-cal developments, particularly with regard tospread spectrum propagation, underlying the manyPCS proposals pending at the FCC. It is also thecase that PCS developments in telephone handsetminiaturization and radio transmission willbenefit all mobile service users, including thosenow using cellular frequencies. And, of course,competition from PCS providers -- indeed, eventhe threat of such competition -- will inevitablylead to better quality service at lower pricesfrom the existing mobile communicationsproviders.
The future offers other possibilities for mobilecommunications. In Europe, numerous countrieshave committed to the so-called "global systemfor mobile communications," more typically knownas "GSM." Several Asian nations includingmost notably Hong Kong, Australia, Singapore, NewZealand, and India -- have also committed todeliver GSM services. GSM's principal advantagesare that it is a digital service, and that therewill be a single standard (meaning, among otherthings, that one handset will work in severalcountries) throughout Europe and much of the restof the world. The Europeans have also exploredother mobile technologies, such as the use of FMradio subcarriers for radio data services("RDS"), which allow the transmission of pagingand other information, including particularlytratfic bulletins and automatic tuning of radiostations by category of programming.
All of these technological options suggest thepossibility of confusion, with competing systemsand competing standards leaving the consumer witha bewildering array of choices. The Europeansand several Asian countries have chosen to solvethis problem, in part, by adopting a singlestandard through GSM, and the United States didthe same in cellular. As we move to the nextphase of mobile communications, however,questions regarding the role of regulators insetting standards and dictating consumer choicebecome increasingly significant.
IV. MOBILE CONVERGENCE AND PERSONAL FREEDOM
In general, users of mobile services care littleabout the particular technology involved, andeven less about the regulatory regime underlyinga particular service offering. Rather, users arefocused on a simple (if not always simple toanswer) question: Does the service work for myintended purpose? The better that a particularservice works in terms of a particular user'sneeds, the more pleased the user will be, and themore he or she will be willing to pay for theservice.
For this reason, regulators should take a rela-tively hands-off approach in choosing winners andlosers among those vying to provide mobile
services. Plainly, the constraints of limitedradio spectrum require regulators to make somechoices, but those choices should not be based ona non-engineer's view of what technologies arebest, or on whether the public is better servedby voice or data services. Rather, regulatorsshould try to get out of the way, encouragingcompetition as the best means of providingservice to the public.
Some might argue that, if the regulators do notspecify technical standards, there will be
confusion on an epic scale, with service
providers equipment manufacturers, and
ultimately the public paying the price. In fact,
it is likely that the market will quickly sortout the competing proposals, and settle on a fewcommon standards for mobile communications. As
the experience with VCRs demonstrates (rememberthe Betamax?), users tend over time to gravitatetoward a single technology, based on technologi-cal considerations, marketing, or some
combination.
252
It is undoubtedly the case that, in this processof wInnowing out technologies and services, therewill be some losers, but there will also bewinners. This is a necessary and accepted conse-quence of encouraging the entrepreneurialdevelopment of new technologies and services.And the big winners are going to be consumers,who will be free to select among numerous serviceproviders and equipment manufacturers, withcompetition helping to drive down prices (as hasbeen the case in cellular).
Is there any danger that these new wirelesstechnologies will usher in a "brave new world" ofprivacy intrusions, in which "Big Brother" willbe able to find any of us, any time? These kindsof fears, raised about mobile communications atleast since cellular telephones became smallerand more portable, simply have no basis in
reality. A mobile telephone may be turned off; apage may be ignored; a message on a computerscreen may be reviewed at leisure.
Indeed, mobile communications have had just theopposite effect, acting as a strong force forpersonal freedom. In noting the recent fact thatthe ten million mark had been passed in terms ofAmericans enrolled as cellular subscribers, thecommentator Ben Wattenberg wrote:
Great inventions are liberating.New technology was supposed to beregimenting, but that's not whathappened. Technology yields personalfreedom . . . . Cellular lets peopletalk to people, aven without a wall,or a wire. . . . Pushed by tech-nology, liberation is sweeping theworld.
Washington Times Nov. 18, 1992.
Mobile communications stand at the forefront ofthis move toward "liberation," because they alloweach of us to use our time most efficiently. IfI can return business calls while driving homefrom work, I can spend more time at home with mychildren. If I can reach a colleague who is inan airplane, that colleague and I will not haveto waste time trading calls while he is movingaround the city after he lands. And -- althoughsome will not like this if I can receive a faxwhile lying on a beach in Hawaii or sailing inthe Caribbean, I may be able to take a few morevacations.
In these and countless other ways, the availabil-ity of mobile communications benefits all of us.Any intrusions on our private time are intrusionsthat we have chosen, often in order to have more,or better quality, private time later, or in someother way. It is this fact, the fact of choice,that is the essence of personal freedom, and itis in this sense that mobile communications areliberating.
PEACESAT: A Pacific Island Users Perspective onSearching for a Satellite
William CoopermanDennis ConnorsCharles Franz
National Telecommunications andInformation Administration
U.S. Department of CommerceWashington, DC, 20230 USA
1. ABSTRACT
This paper provides a user perspective on searching for satellite service in the Pacific region in thecurrent environment of rapidly changing telecommunications technology and proposed service providers.
2. PEACESAT
PEACESAT, the Pan-Pacific Educational and CommunicationsExperiments by Satellite project, is a non-profit, non-commercial, telecommunications network interconnecting usersthroughout the Pacific region. PEACESAT was founded by theUniversity of Hawaii in 1971 and used a single voice c'iannelon NASA's experimental satellite, the ATS-1, until that ,atelliteran out of station-keeping fuel in 1985.
During its fourteen years on the ATS-1 satellite, PEACESATfound that voice and data service using low-cost, low-technology VHF equipment met the needs of many Pacificisland users. The ATS-1 provided full-disk coverage of thePacific and PEACESAT developed into a interactive meshnetwork with over 100 terminals located throughout the Pacific.
In 1988, the National Telecommunications and InformationAdministration (NTIA), a division of the United StatesDepartment of Commerce, was directed by the U.S. Congressto reestablish the PEACESAT service. NTIA has beeninvolved in the search for satellite service for PEACESAT forthe past four years.
Because no satisfactory commercial satellite alternatives wereavailable, NTIA secured the temporary use of a satellitesi.2plied by another division of the Department of Commerce,the National Oceanic and Atmospheric Administration(NOAA). This satellite, the GOES-3, is available forPEACESAT use through 1994 while NTIA continues its searchfor a long-term satellite for PEACESAT use. The GOES-3provides for the same full-disk coverage, mesh networkconfiguration and voice and data services as the original ATS-1but also permits twelve channels of service with higher datarates and better voice signal quality than the ATS-1.
Today, PEACESAT provides educational, medical and culturalinformation to approximately twenty Pacific islandadministrations. The Pacific island entities participating in thePEACESAT project are: American Samoa, Cook Islands,Federated States of Micronesia, Fiji, Guam, Hawaii, Kiribati,Marshall Islands, Nauru, New Caledonia, Niue, NorthernMarianas, Palau, Papua New Guinea, New Zealand, SolomonIslands, Tonga, Tuvalu, Vanuatu and Western Samoa.
As part of our search for a satellite for PEACESAT, NTIAconducted two satellite surveys (1988 and 1991) and a
feasibility study (1992). During these studies, we consultedwith PEACESAT users about their requirements for satelliteservice after the GOES is no longer available. Theserequirements include the need for a full interactive meshnetwork to connect all the Pacific island nations, where eachterminal can directly talk with any other user's terminal. Theprimary service requirement is for voice and data service.Voice service would be used in a teleconferencing setting withdata to support facsimile and interactive computer services.Video capabilities were desired by several users.
NTIA and PEACESAT have concluded that these services canbest be supplied by geostationary satellites which can providefull coverage of the Pacific region and which can support awide variety of program services.
This paper relates NTIA/PEACESAT's experiences insearching for long-term satellite service to meet therequirements of the PEACESAT users. We hope this researchwill be beneficial to Pacific island users who are faced with therapidly changing satellite environment which exists in thePacific.
3. SATELL; FE SURVEYS
After receiving responsibility for reestablishing PEACESAT in1988, NTIA conducted a study with PEACESAT to begin thesearch for a suitable satellite. The 1988 study found only twocommercial communications satellite systems serving thePacific Basin.'
By the time of the 1991 study, the satellite environmentchanged significantly in the Pacific. The study identified overtwo dozen satellite systems that had been proposed which couldserve the Pacific region'. The twenty-nine systems identifiedin the report did not include satellite systems directed at Asiathat could not reach the Pacific island nations. Today, thereare four commercial satellite systems operating over thePacific.
A report summarizing each of the twenty-nine satellite systemswas presented to the 1992 Pacific TelecommunicationsConference. The forty-three page report was not published inthe PTC'92 proceedings but is available from the authors.
253
Of the twenty-nine satellite systems identified in the 1991study, seven were operating geostationary (GEO) systems andeleven were proposed GEO systems.
The NTIA study also identified eleven other systems thatproposed using non-geostationary satellites, primarily usinglow-earth orbits (LEO). Two satellite systems proposedspecialized orbits, one (ELLIPSO) using highly elliptical orbits(varying from 400 km at the low point to 3,000 km at the highpoint), the other (ODYSSEY) uses circular orbits at 10,000 km(5,600 miles) high. These two systems share many of thecharacteristics of the LEO systems and are, therefore,considered with LEO satellites in later discussions.
Information on the GEO satellite systems (including thePALAPA PACIFIC and RIMSAT systems announced in 1992after the NTIA study) is included in Table 1. Information onthe LEO satellite systems is included in Table 2.
4. SATELLITE COVERAGE
Since the coverage areas of different proposed satellite systemswill vary greatly, each Pacific island user must determine itsprimary service objectives and what geographic areas must beserved. Coverage requirements will be different for nationalservice than if the requirement is interconnection with otherPacific island nations on a regional basis or for internationalinterconnections with the United States, Japan, Australia, orsoutheast Asia.
For PEACESAT, the primary coverage requirement is asatellite system that serves all of the Pacific islands. ThePEACESAT coverage criterion is perhaps unique, in that thesystem requires satellite coverage to permit a full-mesh networkconfiguration among each of the Pacific island participants.We considered the full range of both GEO and LEO systemoptions and concluded that GEO systems provide the bestalternative for PEACESAT's needs. Other Pacific island usersmay find that several of the LEO options are attractive for theirparticular needs.
4.1 GEO SATELLITE COVERAGE
A GEO satellite located between 150° E longitude and 140° Wlongitude has the potential of providing service to the Pacificislands.' From these orbital positions GEO satellites arevisible at acceptable elevation angles to the majority of currentPEACESAT Pacific island users (situated at locations stretchingfrom Palau at 134° E longitude to the Cook Islands at 160° Wlongitude and even to French Polynesia).
However, largely due to the sparse population density of thePacific island region many of the proposed GEO satelliteswithin the 150° E to 140° W orbital arc feature beams focusedon service areas of higher anticipated traffic density than in thePacific is lands .4
The actual coverage areas of the proposed GEO satellitesystems therefore vary widely. All the satellite systems canprovide service from at least one location in the United Statesto Japan and Asia. Several of the systems have at least onetransponder that can provide "full-disk" coverage where asatellite signal is available to any location on the surface of the
254
earth facing the satellite. Full-disk coverage permits coveragenot only of the Pacific islands but of areas along the PacificRim which have information resources that can be madeavailable to the Pacific island user.
The ideal coverage for PEACESAT would be a satellite thatprovides full-disk coverage, although coverage of the PacificRim and Pacific islands can also be provided by using acombination of different transponders on a single satellite.
Many of the satellite systems have a transponder whichprovides coverage to the Pacific islands, though not all Pacificislands may be covered by a single satellite. The coveragepatterns of many of the satellites are only preliminary and arebased on the vendor's view of the potential market. In returnfor receiving a long-term contract, several potential vendors arewilling to modify their coverage pattern to serve the needs ofPacific island customers.
The coverage patterns of the GEO satellites as they relate to thePacific islands are summarized in Table 1.
4.2 LEO SATELLITE COVERAGE
It does not appear that LEO systems can provide the Pacific-wide coverage that PEACESAT requires. Since most LEOsatellites will be located within 1,600 km (1,000 miles) of theearth, a constellation of many satellites will be required toprovide worldwit:: coveragr,. Most LEO systems will only beable to cover regions nundreds of kilometers in diameter witheach satellite. The two systems mentioned earlier which usehighly elliptical or medium orbits, ELLIPSO and ODYSSEY,will have coverage areas the size of the continental UnitedStates.
The advantage of the LEO satellites' lower altitude is theirability *.o address the "last mile" connection to the end user.Small, battery-powered handheld units will be able to send andreceive sip,nals directly from the LEO satellites. However,because the handheld units have little power and the coveragearea of a single satellite is limited, relatively large earthterminals ("gateways") will be required to interconnect thehandheld units with other users. If the intended receiver cannotbe served by a single satellite and gateway, the gateway mustforward the message by other means such as a second satellite.
For example, under most LEO scenarios, a message from Palauto Hawaii would go from Palau to a regional gateway and thenwould use another satellite or cable to get to Hawaii.
The exception to this scenario is the Iridium system, whichproposes to equip each satellite with the ability to directlyswitch a message to adjacent satellites. Therefore, a messagecould go directly from Palau to Hawaii through multiple inter-satellite links across the Pacific.
This does not mean, however, that the Iridium proposal is theonly LEO satellite that warrants consideration by users in thePacific islands. The other LEO satellites will be able toprovide voice communications (the so-called "Big LEO"proposals) or data-only communications (so called "little LEO"systems) to areas from several hundred kilometers to severalthousand kilometers in diameter. Therefore, the LEO systemswill have the capability of providing access to people on many
of the outer islands that are currently beyond the reach ofexisting communications.
Depending on the system constructed, a Big LEO system witha single strategically placed gateway terminal could providedomestic service to a Pacific island nation or could provideregional services to several island countries. Communicationsfrom outer islands or from several nations could be fed from aLEO gateway to another satellite system or undersea cable toreach the rest of the world.
The small coverage area of each LEO satellite, however, doesnot fulfill PEACESAT's goal of reaching all the Pacificislands.
5. ABILITY TO MEET PROGRAMMING OBJECTIVES
A satellite system must be able to meet the users currentcommunications objectives and should have the flexibility toprovide for future service growth.
The teleconferencing capability of the PEACESAT networkconstitutes the most important criterion of whether a particularsatellite system will support PEACESAT's mission. Aninteractive mesh network allows a high degree of user initiativeand system flexibility to successfully implement PEACESAT'sdistance learning programs and teleconferences.
5.1 GEO PROGRAMMING SERVICES
Most of the GEO systems operate on the Fixed Satellite Service(FSS) bands as designated by the ITU. FSS systems normallyuse frequencies in the C-band and Ku-bands and providechannels up to 36 MHz wide for voice, data, and even full-motion video service. FSS satellites usually support hightraffic volumes and mesh networks where any user can directlyaccess any other user. FSS systems can provide wide-bandservice for PEACESAT and other Pacific island users.
If VSAT terminals (very small aperture terminals, usually lessthan 3 meters in size) are used, the systems usually require theuse of a large central hub. Through the use of very powerfulsatellite transponders and advanced VSAT earth terminals,some satellite systems can operate VSAT networks without theneed for hub terminals. The power and bandwidth of the FSSGEO satellites provide the opportunity for users to expandservice to high speed data rates and video if appropriate.
INMARSAT operates on the L-band frequencies assigned bythe ITU to Mobile Satellite Service. The INMARSAT satellitescan provide voice and data services but not full-motion video.The INMARSAT system supports low traffic rates and requiresthat all communications go through a "land earth station" huh,such as those located in the Pacific region at Santa Paula,California and Yamaguchi, Japan. The INMARSAT satellitesare designed to provide a different service than the FSS GEOsatellites and do not provide the opportunity for serviceexpansion into new technologies that would be available fromthe FSS systems.
5.2 LEO PROGRAMMING ..ERVICES
The objective of most of the Big LEO proposals is to providea voice and data service to almost any location on earth
comparable to existing cellular telephone service. Suchsystems theoretically should be able to support the voiceteleconference calling and two-way data now used byPEACESAT on the GOES-3. However, whether the Big LEOsystems will actually be able to reliably provide Pacific-wideteleconferences is unknown at this time. The Big LEO systemsare in the design stage and will be optimized for service in theUnited States and Europe. Pacific-wide service from the BigLEO's, other than Iridium, is not only dependent on theavailability of gateway terminals, but also on an adequatesecond communications link that serves all potential user sites.
The little LEO systems will provide chiefly datacommunications service. This will usually be limited to shortmessages of several hundred characters in length. Messages ofthis size would be of limited value to PEACESAT users butcould be used by Pacific island users to exchangeenvironmental data, disaster warning information, positionlocation or research data. Two of the little LEO systems,GONETS and VITASAT, propose to "store and forward" datawith the ability to distribute many pages of text. These systemscould provide for efficient transfer of written message and datafrom outer islands to distant locations in 2 to 12 hours.
The LEO satellites utilize a very small amount of bandwidth.The bandwidth used by a Big LEO system, for example, is lessthan a single 36 MHz transponder on the typical GEO FSSsatellite. Expansion beyond the initial services presented by theLEO services appear limited by the capacity of the systems andnone of the LEO satellite proposals appear to be able toprovide enhanced services, such as 64 kbps channels.
6. DEGREE OF LONG-TERM VIABILITY
In planning to initiate a new satellite communications system,Pacific island users should look at the long-term viability of thesystem and technology under consideration. The majorfinancial investment when establishing a satellite-based networkis in the earth terminals. The compatibility of earth terminalswith more than one satellite system gives the user the flexibilityof migrating to another system as conditions warrant.
PEACESAT is now searching for another satellite to continuethe recently reestablished GOES service. The ideal solution fora long-term satellite would not only solve the immediateproblem for continuation of PEACESAT service but would alsohave a high degree of assurance that replacement satelliteswould continue to be available for the long term.
Ironically, the vast number of active proposals for satellitesystems at the moment lessens the chances that any singlesystem will ultimately succeed. The accompanying tables listover thirty proposed satellite systems that are in various stagesof development. The announced timetable for most of thesesystems would place them in service in the 1995/96 timeframe. While these timetables appear to meet the currentPEACESAT requirement to obtain replacement satellite serviceby 1995, it is clear that all the proposed satellite systems willnot, indeed, cannot, be placed into service by 1995. Webelieve that there are several reasons that all of the proposedsystems will not be constructed as planned.
255
6.1 TECHNICAL REQUIREMENTS
Several of the proposed services appear technicallyincompatible with each other since one system would causeinterference with another system. This is true both of LEOsystems that have incompatible frequency plans (such asIridium's frequencies conflicting with several other LEOsystems) and of GEO systems where multiple satellites areproposed to be placed at the same orbital location (such asPALAPA PACIFIC and TONGASAT @ 134° E or PACSTARand PANAMSAT 168° E).
6.2 REGULATORY REQUIREMENTS
There are many levels of potential regulatory requirements.The first is the authorization to construct and operate a satellitesystem. Many of the systems proposed are based in the UnitedStates and must be licensed by the Federal CommunicationsCommission. All satellite systems must be coordinated inaccordance with the procedures of the International FrequencyRegistration Board. Finally, permission to serve a countrymust be granted by the regulatory agency of that country.
6.3 FINANCIAL REQUIREMENTS
Perhaps the largest harrier for most proposals is the challengeof obtaining the capital funds necessary construction. Thesecosts range from hundreds of millions of dollars to, in the caseof the Iridium proposal, over S3.5 billion dollars. The largenumber of proposals intensifies the competition for capitalfunds. Several systems that were first announced in the mid-1980's are still searching for funds.
6.4 LAUNCH REQUIREMENTS
This final hurdle is one shared by all systems, no matter howwell capitalized. Unfortunately, it is a fact of life for thesatellite industry that some launch vehicles will fail on lift-offor will fail to place a satellite in the proper orbit. Even if aback-up satellite is available, a second launch often requires ayear to accomplish due to the priority of other customers'launches.
6.5 THE PRESENT OUTLOOK
INTELSAT and INMARSAT, both large internationalconsortia, are currently the world's largest satellite operators.They have already contracted for the next generation ofsatellites to continue service to the Pacific. The primary factorthat could limit their continued services would be revenuedecreases due to an increasing number of competing separateservices for regional and international conununications.s
The PACT service operates on an INTELSAT satellite andcould continue on future INTELSAT satellites or on several ofthe proposed systems. Continuation of the PACT service isdependent on its ability to provide regional telephoneinterconnection service to its customers in the South Pacific.
256
PALAPA PACIFIC is majority owned by the Indonesiandomestic satellite operator and has enough satellites already inorbit or on order to continue the service until 2010.
Two satellite systems that definitely will not continue in theirpresent form are AUSSAT-3 and COLUMBIA-TDRSS. TheAUSSAT-3 will be operational until 1997 and is the onlysatellite in the AUSSAT series that will serve Pacific islands.The follow-on Advanced TDRSS satellites will not have the C-band transponders contained on the current COLUMBIA-TDRSS satellite. However, Columbia has proposed its ownsatellite, COLUMBIASAT, and has also entered into amarketing agreement with the proposed PACIFICOM project.
Two other systems, PANAMSAT and EXPRESS, already haveoperating satellites and therefore have achieved a level ofexperience beyond those that are just beginning. PANAMSATcurrently has a satellite in the Atlantic region, with its Pacificsatellite scheduled for launch in 1994. The Russian EXPRESSsatellites will replace the operating STATSIONAR system.Given the major economic upheavals in Russia and the otherformer Soviet states, it is unknown whether or when theEXPRESS system will be constructed.
The following GEO systems will be placing their first satellitein operation: ASIA-PACIFIC, FINANSAT, PACIFICOM,PACSTAR, TONGASAT, and UNICOM.
None of the ten LEO systems under review is currentlyoperational, but VITASAT is using an experimental satellite.VITASAT has received a "pioneer preference" and approvalfrom the FCC to construct a two satellite system. Severalother systems have received FCC approval to construct a fewexperimental satellites.' The Big LEO systems face complexregulatory challenges regarding the use of frequencies. Theexpense and technical challenges to construct, launch and thenoperate satellite systems containing up to 66 satellites areimmense. The satellites will be complex, they will requirecontinual monitoring of orbits and the size of the systems willrequire continual replacement of satellites as satellite problemsoccur.
The proposed VITASAT system will use only two satellites,and they will be simple LEO satellites in orbits that do notrequire the precision of the other systems. Since VITASAT isa non-profit organization, the greatest hurdle to the long-termviability of the VITASAT system may be obtaining the fundsto construct and launch the two satellite system.
7. COST
The cost of a satellite system has two major components,satellite costs and ground costs. Satellite costs usually arelimited to rental of satellite transponders, either on a dedicatedbasis or for a per-usage charge. Ground costs include the costof operating, maintaining, purchasing and installing earthterminals (or modifying existing earth terminals).
7.1 TRANSPONDER COSTS
Transponders on most GEO satellites can be leased on a yearlybasis. The costs are known in advance and the service can betailored to the available funds. Satellite costs can be reduced
by entering in a long-term (3-5 year) contract with a vendor.NTIA has found that many of the services are currently unableto provide firm price estimates for a service projected in 1995.
Satellite time on most LEO systems will be charged by theminute, with a per minute cost estimated to be between S1 /minand S3/min. The annual costs will be directly dependent on theamount of use. The exception to this is VITASAT, which isa non-profit organization serving developing nations and iscurrently not charging for satellite time.
7.2 EARTH TERMINAL COSTS
For users already operating a satellite-based network, such asPEACESAT, compatibility of satellite alternatives with theexisting earth terminals and the cost of conversion to anothersystem are a significant consideration. Since the PEACESATterminals were specifically designed to use the GOESmeteorological frequencies, their use with any other non-meteorological satellite system will require modification to thetransceiver electronics, antenna, and tracking mechanisms.
Even though most commercial satellite communications arelocated in either the C-band or the Ku-band, conversion costsof existing C-band or Ku-band terminals can include changingfrom analog to digital equipment or changing modulationtechniques.
The major advantage of the LEO systems is that they aredesigned to operate with very small, inexpensive ground units.The typical LEO ground terminal is a handheld unit costingbetween $250 to $3,000 depending on the system and itscapability. The cost of most ground units is not a majorexpense. However, the user earth terminals for most systemscan only operate with a regional gateway terminal. Gatewayswill be constructed by a regional operator in many areas of theworld for a cost ranging between $100,000 and $2 million,depending on the system. However, given the expense ofconstructing and operating a gateway, their availability in someremote regions of the Pacific islands is not assured.
The VITASAT ground terminals are not designed to be mobileand cost about $5,000.
8. CONCLUSIONS
After reviewing satellite developments in the Pacific for thepast two years, NTIA believes that it does not have sufficientdefinitive information upon which to base a decision regardinga specific satellite system for PEACESAT's long-term use.
We reached this conclusion primarily because the commercialsatellite environment in the Pacific is currently very unsettled.It is impossible to determine at this time which of the twodozen proposed satellite systems will ultimately be successfulin inaugurating a service. Estimates of construction costs,leasing costs, service levels and timetables are all primarilyspeculative. New entrants can appear overnight and affect themarket.'
PEACESAT believes that GEO satellites provide the bestoption to meet the PEACESAT user needs. Systems such asINTELSAT, PANAMSAT, PACSTAR, UNICOM,
257
PACIFICOM, ASIA-PACIFIC, and TONGASAT, havebandwidth with the potential of providing flexible services toPacific island regions. Service areas of these systems will,however, vary depending on the final coverage patterns of eachsatellite.
The COLUMBIA-TDRSS and PALAPA PACIFIC satellitesonly serve the North Pacific and c.4nnot provide coverage of allthe Pacific islands from a single satellite. The INMARSATsystem can cover the Pacific islands but is limited in theservices that it can provide.
The six Big LEO systems, ODYSSEY, GLOBALSTAR,ARIES, ELLIPSO, IRIDIUM and the INMARSAT Project 21have the potential of providing voice and data service to thePacific islands. Most of these systems (with the exception ofIRIDIUM and possibly Project 21) may be limited by technicaldesign factors and the requirement to use regional gateways tomake Pacific-wide international interconnections. IRIDIUMand the other Big LEO proposals also have to compete withinthe regulatory process for operating authorization.
NTIA will defer consideration of the low-earth orbitingsatellites in favor of the geostationary systems which have thepotential of covering the Pacific islands and providing currentand future PEACESAT services.
The small LEO systems ORBCOMM, VITASAT and GONETShave the ability to provide a data service to the Pacific region.This type of service may be most appropriate to connect areasof very low population density, such as outer islands, withregional centers.
ENDNOTES
1. NTIA/PEACESAT, "Final Report: PEACESAT SatelliteSelection Study," January 1989.
2. William Cooperman, Dennis Connors, Charles Franz,"Communications Satellites for the Pacific Islands." paperpresented to the Pacific Telecommunications Conference,Honolulu, HI, January 1992.
3. NTIA/PEACESAT, p. 6.
4. Many of the world's leading and emerging industrialnations are located along the Pacific Rim, including the UnitedStates, Japan, Korea, Singapore, Hong Kong, Taiwan, etc.
5. Both the INTELSAT and INMARSAT agreementsprovide that competing telecommunications satellite systems becoordinated with their respective agency and that the competingsystem demonstrates that no economic harm will occur. To date,all separate systems have successfully completed coordinationwith INTELSAT or INMARSAT.
6. The FCC has approved the construction of the followingexperimental satellites: Iridium, five experimental satellites;El lipso, four experimental satellites; etc.
7. Palapa's relocation of an old satellite in early 1992 toestablish the Palapa Pacific is only one example. Asia PacificTelecom purchased an in-orbit satellite from GTE for service toChina and east Asia. (Satellite News, September 28, 1992. Vol.15 No. 39. Satellite News also reported that GTE is trying tosell four other in-orbit satellites as well.)
TABLE 1 GEOSTATIONARY SATELLITE SYSTEMS
SATELLITE SYSTEM TYPE OF SERVICE COVERAGE AREAS STATUS CONEY
Asia-Pacific@ not announced
Fixed Full-disk Seeking financing for late 1995launch
Intendsand not
Asiaspace@ not announced
Direct Audio Broadcast Full-disk Parent co. has experimentallicense for service in Africa(Afrispace)
36 DAIreceiver
AUSSAT A-3@ 164° E
Fixed
IA
South Pacific Satellite full, no furthercapacity on Pacific island beam
Replacehave Pa
COLUMBIA-TDRSS@ 174° W
Fixed North Pacific Some capacity has beenleased to TRW (Pacificom)
Comparover tht
Columbiasat@ 165° W
Fixed Unspecified Conditional authorizationseeking financing
ComparColumb
Express@ 140° E, 155° W, 145° E
Fixed Full-disk IFRB notice provided Does ncas Westsatellite;
Finansat@ 178° W
Fixed Unspecified Conditional authorizationIFRB registered, seekingfinancing
Target ifinancianations
INMARSAT@ 177.5° E (INMARSAT II)@ 180° E (on INTELSAT)
Mobile Full-disk Plans to expand capacityin POR
Requireuse smamore Iii
INTELSAT@ 174°E (main)177°E and 180°E, 177° W
Fixed Full-disk and regional Intelsat VI Is to expandcapacity in POR in 1994
Primaryworldwsatellite;
Pacificom@ 172° E
Fixed South Pacific Application pending,1994 proposed launch
Using cColumbinitiate
TABLE 1 GEOSTATIONARY SATELLITE SYSTEMS (Continued)
SATELLITE SYSTEM TYPE OF SERVICE COVERAGE AREAS STATUS COMM
Pacstar@ 167.45 °E, 175° W
Fixed C-Band spot beams forSouth Pacific, ASEANcoverage
IFRB registered Majorityof Papui
PACT@ 174° E (on INTELSAT)
Fixed Uses full-disk beam onINTELSAT satellite
Provides domestic,regional, & intl. serviceto six island nations
Project IOTCI, I
PALAPA PACIFIC@ 134° E
Fixed North Pacific Operational with inclined orbitsatellites
Replace]orbit orservice I
Panamsat@ 168° E. 166° E
Fixed Pacific islands spot beamin C-Band
Satellite under construction,projected 1994 launch
Companation in
PEACESAT@ 175° W (on GOES-3)
Experimental Full-disk GOES-3 available through1994, expanding with NTIAassistance
Non-cor
Rimsat@ Uncertain
Fixed System footprint fromAustralia to Hawaii
Announced agreement touse Tongasat slots, leaseRussian satellites
First twwould borbits
Sat/vacs@ not announced
Fixed Full-disk No FCC application,seeking financing
Ka-Bancmissionpersons
STATSIONAR@ 175°W, 155°W
Fixed Full-disk and regional Operational with inclined orbitsatellites
Will besystem istation-I(
Tongasat@ 83.3 E, 130° E134° E, 1142.5° E
Fixed Multiple spot beams,coverage unspecified
Uncertain, see Rimsat andUnicorn entries
Has ma(Rimsat iorbital s
UnicornQ 170.75° E, 138° E
Fixed Regional in Asia andPacific, also internationalto/from U.S.
Agreement to use twoTongasat slots. Planned1995 in service date
Also secMcCaw
ate1 ite Systems m LAYS are
TABLE 2 NON-GEOSTATIONARY SATELLITE SYSTEMS
SATELLITE SYSTEM TYPE OF SERVICE FREQUENCIES STATUS COMMI
VOICE CAPABLE SYSTEMS
Aries (48 satellites) Voice and data, RDSS Uplink - 1624.5-1626.5 MHzDownlink - 2483.5-2500 Mhz
Pending FCC approval Will reqtwith C b.
Ellipso (24 satellites) Voice and data, RDSS Uplink - 1610-1626.5 MHzDownlink - 2483.5-2500 Mhz
FCC approved 4 experimentalsatellites
Direct ac
Globalstar (48 satellites) Voice and data, RDSS 3 frequency plans proposeddepending on other users
Pending FCC approval Will reqtwith C b.
Inmarsat Project 21 Voice and data To be determined Proposal is currently understudy, no details announced
Decisionmade in
Iridium (66 satellites) Voice and data, RDSS Uplink & downlink 1610-1626.5 MHz
FCC approved 5 experimentalsatellites
No gatevwill useintersatel
Odyssey (12 satellites) Voice and data, RDSS Uplink - 1610-1626.5 MHzDownlink - 2483.5-2500 MHz
Pending FCC approval Will reqtwith Ku-
DATA ONLY SYSTEMS
Gonets (36 satellites) Store and forward data, elec-tronic mail
321-390 Mhz -transponder 11541-1643 MHz -transponder 2
Two microsats launched July1992, system operational in1995
Second g(1997) tc
Leosat (18 satellites) Data from moving vehicles uplink 148-140 Mhzdownlink - 137-138 Mhz
LEOSAT is appealing FCCdecision to return application
Intends tfrom vel'
Orbcomm (20 satellites) Data, short messages, RDSS uplink - 148-149.9 Mhzdownlink - 137-138 Mhz
Pending FCC approval, hasexperimental license
Plans tofirst, exr
Starsys (24 satellites) Data, short messages, RDSS uplink - 148-149 Mhzdownlink - 137-138 Mhz
Pending FCC approval, hasexpetimental license
Plans tofirst, exr
V itasat ( 2 satellites) Store and forward data,electronic mail; communitydevelopment non-profit telecom
uplink - 400 Mhzdownlink - 137-138 Mhz
Received pioneer preferencefrom FCC; one experimentalsatellite operating-UoSAT 3
Has alter400 Mhzif necess
w earth orbits are within 1,600 km of e ear[
UNICOM: MOVING INTO ASIA
Steve CollinPresident and Chief Operating Officer
Unicorn Satellite Corp.Aspen, CO 81611
USA
UNICOM SATELLITE CORP. will launch and operate private satellites that will linkAsia to North America and Europe and also provide domestic and regional servicesthroughout Asia. The UNICOM principles bring their experience of the deregulated USmarketplace to the venture and are creating teaming arrangements that will enable turnkey satellite services.
Ladies and gentlemen before I introduce to you the
Unicorn Satellite venture, I'd like to share with you my per-
spective on the telecommunications business as I have per-
sonally experienced it; where we have been and where we
are going. In 1981, three of us founded SAT TIME Inc., the
company that preceded Unicorn. Working from a one room
office and sharing a single phone line. At that time, there
were approximately 10 commercial satellites in service over
the US and we bought and sold available time on transpon-
ders earning a fee from numerous owners that we repre-
sented. In this manner, the company closed over 600 con-
tracts for satellite services and we learned to meet customer
requirements, especially helping those that had never used
satellites to create successful services. SAT TIME also
designed and raised the capital to construct Teleport Denver
in 1986. Today the facility which provides satellite, micro-
wave and fibe optic services employs 300 people and is
valued at over $50 million. Denver, Colorado is equidistant
between Asia and Europe and thus we have been keenly
aware of the opportunities for international satellite services.
1981 was also the year in which the personal com-
puter was first introduced. The Information Age was in full
swing and in the ensuing decade the US experienced a revo-
lt brought about by the microprocessor. Today in the
US, 33% of homes have a computer, 67% have cable TV,
77% have a VCR, 31% have Nintendo or Sega videogames,
and 17% of homes have camcorders, a relatively expensive
consumer product. In my home, just for my family's per-
sonal use, we have three telephone lines, 2 cellular phones, a
fax machine, 2 VCR's a and satellite dish which can receive
over 200 hundred independently produced news broadcasts
each day. Additionally, there are more than several hundred
transponders of 24 hour programming from 37 satellites
serving the North American markets. Satellite communica-
tions services now influence every day of our lives and are
the most successful business sector of the space industry
generating several billion per year in sales revenues.
Some key points that we have learned in our US ex-
perience:
1) Telecom deregulation has brought more products and
services to customers more efficiently and at reduced prices,
2) A competitive entrepreneurial environment has fostered
new technologies such as VSAT, cellular, and mobile, for
communications purposes, while satellite news gathering,
26 1C; ;
pay per view, compression and soon, video on demand, and
interactive TV technologies will revolutionize our use of the
television media. 3) Customers will pay for entertainment
and education, especially education for their children. 4) In-
formation Agencies, a new business service, are being devel-
oped to guide consumers through the information market-
place. On a daily basis 7,000 technical articles are published
worldwide and it is now possible to connect via a modem
into 60,000 on-line computer bulletin boards. In the Infor-
mation Age, the consumer wants to PULL the information,
or programming he wants, no longer will broadcasters PUSH
their programming upon us. We will decide what to watch
on television, not what's on. In our children's schools teach-
ers will utilize information agencies to guide them to video
programming on demand, specific to the lesson of the day.
All of these developments are occurring because com-
munications is going digital and therefore compression is
possible. Today a gigabit of information can be sent over a
satellite channel in one second. In that second 60,000 type-
written pages can be transmitted, without error; in a new
breakthrough a 2 hour movie can be delivered in approxi-
mately seven minutes over a telephone line and therefore
enormous central libraries can be created storing video pro-
gramming in a compressed digital format. An upcoming
venture in the US plans to utilize a compression ratio of
10:1. Should Unicorn operate each of its satellites in
digitally compressed mode, it would have the capacity of
240 transponders.
What's next? The mobile revolution. In the US,
during 1991, 200,000 cellular customers signed on each
month; for the first time new mobile customers exceeded the
number of new wireline customers per month. By the year
2000 the mobile industry predicts 100 million wireless cus-
tomers worldwide, a growth factor of 1000 times since 1980.
They will communicate on digital portable phones that se-
lect the least cost routing offered choosing between terres-
trial, wireless and satellite carriers, with batteries that will
262
last one week on a single charge and with voice quality
equivalent to that of the public switched networks. Eventu-
ally these mobile communicators will be fashion accessories
that we will wear containing personal computers with text
and image displays and in case we get lost, the GPS function
will show us the way. These devices have been imagined
and shortly they will be made.
Economic growth in virtually every country in Asia
is growing at the highest rates in the world - typically be-
tween 5% and 10% annually. As these economies boom,
enormous amounts of money will be spent on telecom and
broadcast services effecting telephone carriers, electronic
retailers, and information service providers. Relative to any
other part of the developed world, the Asian marketplace is
severely underdeveloped. Telephone penetration averages
below 5 phones per 100 persons; high speed transmission of
data is restricted to major trunk lines, and even fax services
are constrained by the public telephone network. Except for
Japan, where one can find the most advanced technologies in
the world at work, such as DBS, HDTV, and business televi-
sion, the Asian television and cable industry is in its infancy.
Most countries still offer only a limited amount of television
programming, provided by state-owned broadcasters. Cable
is underdeveloped and DBS is non-existent. Asia has the
best opportunity to leap frog wire technology and install
wireless systems which are less expensive and faster to in-
stall. The phenomenal growth of the paging and cellular in-
dustries across Asia confirm the strength of the demand.
This is the communications environment that UNI-
COM will find in the next decade. We have chosen to locate
our venture in Singapore which, in the most recent World
Competitive report of the United Nations, was noted to have
the best telecom structure in the world each year since 1989,
and is number two in the world in computer literacy. Sin-
gapore's strategic location between the Pacific and Indian
Oceans and its development as an Asian financial and com-
munications hub under it's IT 2000 plan, the "Intelligent Is-
land," fully support the goals of our venture. Unicorn satel-
lites will support Singapore's quest to become a world class
telecommunications hub in the midst of the world's largest
market which is growing at the rate of $12 billion dollars per
month.
We at Unicorn stand before you as a satellite capacity
provider. Our transponders will be easy to acquire via local
marketing offices throughout Asia, easy to use, with no re-
strictions on the direction of traffic or footprint options. Our
customers will use Unicorn transponders for domestic, re-
gional and international services all under longterm fixed
price contracts, and those prices will be set to attract custom-
ers. Unicorn will manage its transponder bandwidth and
power to provide the most efficient utilization of capacity,
but this will be transparent to the user.
Unicorn has selected Fairchild Space and Defense
Corporation to supply two "Ultrasat 24" satellites and
McDonnell Douglas for launch services. Each satellite will
carry twelve 36 MHz C band transponders and six 72 MHz
Ku band transponders. All transponders are configured to
provide "cross-strapped" and "broadcast" transmission ca-
pabilities providing network flexibility. In this mode, a
single uplink will activate both C and Ku downlink channels
resulting in broadcast service throughout the entire coverage
areas. The satellites deliver a broad first contour minimum
EIRP of 36 dBW at C-Band and 50 dBW at Ku-Band. This
provides the necessary signal strength to make efficient use
of smaller, less costly earth stations that can be located at
end user premises. Every Unicorn transponder is capable of
two-way, point to multipoint transmission. In Figure 1, the
geographical area of coverage of the Unicorn satellites is
presented.
The Unicorn satellite system is ideally suited for
broadcasters, cable programmers and telecommunications
carriers and value added service providers seeking to estab-
263
Figure 1 Geographical Coverage of Unworn Satellites
lish state of the art analog or digital regional and interna-
tional networks. Wireless technologies offer the fastest and
most economical implementation of new networks. In the
Asian marketplace, Unicorn will market satellite-based wire-
less networks; supporting digital multimedia, videoconfer-
encing, cable-TV, VSAT data networks, and private busi-
ness networks. To encourage the growth of thin route serv-
ices, Unicorn will support digital compression applications
by providing just the right amount of power and bandwidth
for a particular application to reduce the cost per channel to
the end user. Unicorn will headquarter in Asia and seeks to
establish strategic joint ventures with local partners through-
out Asia. These teaming arrangements will be capable of
creating complete network solutions combining transponder
space and ground facilities into seamless networks.
The Unicorn organization brings together a highly
qualified group of engineering and business professionals
and stands ready to assist in the development of turnkey sat-
ellite based-networks, from initial concept through implem-
entation. Management's experience includes a decade ofsatellite leasing activity, spacecraft program management,
the development and operation of transmission and relay fa-
cilities, and the successful formation and operation of other
space companies.
As I close, let me leave you with several thoughts
that have become apparent to us which are driving the de-
mand for satellite services:
1) Networks will always grow larger.
2) Networks will operate at ever increasing speeds.
3) Technology and its applications will always develop
at a faster pace than governments can regulate. Government
imposed regulations must accommodate customer require-
ments or business will relocate.
4) Telecommunications services are the most essential
services required by market based economies which are de-
pendent on trade.
Unicorn is moving into Asia with experience and a
clear understanding of the telecommunications environment.
We look forward to the challenges of serving the most dy-
namic market in the world.
Thank you for your attention...
Unicorn Satellite Corp. can be reached in the USA at303.920.2400 or in Singapore at 65.321.8939.
264
The Rise of Competing Satellite Systemsand the Fall of the Intelsat Monopoly
Shirley S. Fujimoto and Marc BerejkaKeller and Heckman1001 G Street, N.W.
Washington, D.C., United States
1. ABSTRACT
In 1992, Intelsat took steps towards opening the internationalsatellite services market to competition. The authors argue that,based on these steps, as well as permanent technological andeconomic changes, the transition to open competition will berapid.
2. WHITHER GOES THE MONOPOLY?
Although it was done without much fanfare,1992 proved to be a watershed year forIntelsat and for the future of separatesatellite systems. Intelsat has takenfurther "baby steps" towards divestingitself of its sanctioned, monopolisticposition in the international satelliteservices market, but in the process, webelieve, has irreversibly committed itselftowards opening the market to fullcompetition. Moreover, we believe thatcircumstances will bring Intelsat to openits markets to competition by 1996, if notearlier.
At its November 1992 Assembly of Parties,the organization agreed to "consider"eliminating all Article XIV(d) "economicharm" restrictions on the use of separatesystems by 1996 or 1998. Article XIV(d)currently prohibits Intelsat-member nationsfrom deploying or using any separatesatellite system unless Intelsat hac been"consulted" about the system and has foundthat use of the system will not cause"significant economic harm to the globalsystem of Intelsat." In the eyes of wany,Article XIV(d) has stymied the efforts ofentrepreneurs to bring competitive systemsto the international satellite servicesmarketplace and, as a consequence, hasdeprived the world of the benefits ofincreased competition.
While the Assembly of Parties' November 1992decision may appear to be only anincremental step, we believe that, now thatit has been taken, there is no going backand that the international satelliteservices market will, indeed, be opened tofully competitive systems by no later thanthe end of 1996.
2.1 THE CUSTOMER'S PERSPECTIVE
Keller and Heckman is a regulatory law firmfounded in 1963 and based in Washington,
265
D.C., U.S.A. The firm was borne out of, andcontinues to thrive on, the incessant changein the telecommunications marketplace.While the firm's telecommunications practicegroup is dominated by some 17 attorneys, thefirm recognizes that telecommunicationsproblems necessarily blend legal, technical,and economic issues. Consequently, the firmalso employs a full-time telecommunicationsengineer, a regulatory analyst, and ahandful of paralegal specialists.
Unlike many U.S. telecommunications lawfirms, we have provided counsel to a widearray of telecommunications users since ourinception. It is fair to say that, whilemany other firms have built their practicesby representing telecommunications providersfirst and users second, we have built ourpractice in the opposite direction.
We, of course, represent both numerous usersand providers. However, our uniquedevelopment gives us a unique perspective.Over the course of our 30 years, we havecome to understand users' desires andexpectations, because we assist them withtheir telecommunications concerns on a day-to-day basis. As a consequence, we believewe more fully appreciate where market
demands are attempting to push (or pull) theservices suppliers.
2.2 THE CUSTOMER'S INTEREST IN COMPETITION
Our interest in international satelliteissues stems from the fact that many of ourclients are large multinationalcorporations. As the world's economies arebecoming more tightly intertwined, thesecompanies' demands for internationaltelecommunications services are growingexponentially. Indeed, often the companies'production and marketing decisionsthemselves are responsible for the further"unification" of the world's economies.
Our clients, for example, are among thefirst companies to enter the newly liberated
Russian Far East with significant investment
capital. They have similar operations inother lesser developed areas, as well as inthe most developed areas of the world. In
order to coordinate their far-flungactivities and remain competitive, they needthe fastest, most advanced, and mostreliable international communicationsservices available. In brief, they are
anticipating 21st century telecommunicationscapacity today; they are driving the nextgyration in the telecommunicationsrevolution.
Perhaps more importantly, to get there fromhere, the users with which we are acquaintedbelieve strongly that competition in thetelecommunications industry must be fosteredwherever possible; that competition isessential not only to keeping prices down,but to ensuring that there are sufficientincentives for telecommunications providersto meet customers' ever increasing and ever-
more complex demands. Consequently, large
users look for opportunities to promotecompetition where they can. And it is these
efforts, in conjunction with Intelsat'sacceptance of them, that we believe willpush the international satellite servicesmarket to relatively open competition by
1996.
3. 1992 IN REVIEW
Intelsat's initial steps towards acceptingthe inevitability of open competition wereactually coaxed along in late 1991. In
November of that year, the United States'Commerce and State Departments released ananalysis, finding that the Intelsat systemwould not be harmed economically if allseparate systems were allowed to sellprivate line services interconnected withpublic-switched networks. Moresignificantly, the U.S. Commerce and StateDepartments also announced that theybelieved all restrictions on separatesystems' provision of switched servicesshould be eliminated by January 1997.
The Federal Communications Commissionpromptly accepted the Departments'recommendations, and in March 1992, itadopted an order allowing separate systemsto interconnect their private lines.Subject to further review, the Co *missionthen set January 1, 1997 as the sunset date
for all restrictions on separate systems'provision of switched services.
With the United States squarely behind opencompetition, Intelsat's on-going ArticleXIV(d) working group faced accepting orrebuffing the U.S. position. A so-called"Inter-sessional Working Party" had been
commissioned by the 1990 Intelsat Assemblyof Parties to develop recommendations on the
further liberalization of the internationalsatellite services market. In June 1992,
the working group presented its
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recommendations to Intelsat's Board ofGovernors, largely paralleling the U.S.position.
The recommendations were significant, forthey not only paralleled the U.S. position,but exceeded it with regard to separatesystems' ability to provide switchedservices in the near term. Specifically,the working group recommended:
to phase out Article XIV(d)"economic harm" review over thecourse of four to six years;
to assume that all non-switchedservices, including privatelines interconnected with thepublic switched networks, wouldnot cause significant economicharm to Intelsat
to allow each satellite in aseparate system to supply 1,250equivalent 64 kbs circuits forinternational message telephoneservice (IMPS) (the existingstandard had been 100 equivalent64 kbs circuits per separateSystem); and
to raise the 1,250 circuitceiling for switched servicesover the last years of thephase-out period.
Essentially, the working group recommendedthat full competition be eased in and thatsignificant steps in that direction be takennow.
The Board of Governors approved therecommendations and sent them on to theAssembly of Parties which, in turn, approvedthe bulk of them. The near term objectiveswere adopted in full. Also, Intelsat willlook at raising the ceiling on the number ofcircuits for switched services at its 1994and 1996 assemblies. And mostsignificantly, the Assembly agreed to"consider" completely eliminating alleconomic harm considerations in either 1996or 1998.
4. COMPETITION SOONER RATHER THAN LATER
Again, despite the Assembly of Parties'scommitment only to "consider" furtherliberalization down the road, we believeopen competition will come sooner ratherthan later. Obviously, no measure ofeconomic analysis nor prognostication cansay with certainty where the internationalsatellite services market will be by 1996.The variables are too many, and the flow ofevents too irregular. However, we dobelieve that there is an outstandingpredictor in revie'ing closely thedismantling of AT&T's monopoly.
The parallels between AT&T's position in the1970s and Intelsat's position today arereplete. And comparing the two is onlynatural. But we have =mound that theparallels and comparison are more than skindeep. Despite the greater complexity ofdealing with international markets, webelieve this analogy serves as perhaps themost compelling indicator that Intelsat andseparate satellite systems will be movingtowards open competition rapidly over thenext few years.
Of course, the more superficial comparisonsbetween AT&T's past circumstances andIntelsat's current situation are easilystated. In the 1960s, MCI Corp. began itslong assault on AT&T's seemingly invinciblemonopoly in the U.S. long-distance market.While AT&T and the U.S. FederalCommunications Commission initially opposedopening the long-distance market, by theearly 1980s all interested parties wereembracing competition. Now, three decadeslater, while AT&T maintains a formidablemarket position, the monopoly clearly isbroken and the substantial benefits ofincreased competition have brought to theU.S. public.
Currently, in the international satelliterealm, PanAmSat and others aspire to do thesame to Intelsat's virtual monopoly ininternational satellite services. Indeed,U.S. regulators' and PanAmSat's deregulatorybent, coupled with Intelsat's apparentdesire to compete, suggest that Intelsat isin the same position AT&T was just prior tothe dismantling of AT&T's monopoly --perhaps anxious, but moving towards fullacceptance of open competition. Moreover,like the U.S. Federal CommunicationsCommission in the early 1980s, many of theworld's regulatory bodies and PTTs (andlikely officials within Intelsat) areovercoming their almost instinctivereservations about fostering competitionwith Intelsat. Those reservations havegradually been moving away from concernsabout whether competition should befostered and towards concerns about whenand how it should be fostered.
4.1 ECONOMIC INCENTIVES FOR GREATERCOMPETITION
A closer look at the situation reveals whywe believe any lingering concerns regardingopen competition will evaporate rapidly.
First, from an economic perspective,Intelsat undoubtedly has felt for some timethat its economic viability, even in acompetitive market, can easily be preserved.Intelsat now operates a fleet of 15satellites from its orbital slots over theAtlantic, Pacific, and Indian oceans. Overthe course of the next seven years, Intelsatintends to add even more satellites, so thatits total will exceed 18 modern, high-
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capacity satellites. The system currentlyis heavily utilized, and all expectationsare that the system will be used heavily foryears to come. Intelsat director generalGoldstein was quoted in the October issue ofSatellite Communications as noting as much.Citing the fact that approximately 80percent of Intelsat's switched traffic iscommitted under long term agreements, he isconfident that Intelsat's expansion willcontinue, despite the potential forincreased competition.
The director general's sentiments reflect arefreshing faith in Intelsat's continuedviability. However, the roots of Intelsat'slong-term economic security run much deeperthan anticipated traffic reports. LikeAT&T's position in the early 1980s,Intelsat's established infrastructure givesit such formidable advantages over itspotential competition so as to ensure theconsortium's survivability even in a morefully competitive market.
Intelsat has in place network facilities,international affiliations, and humanresources that no separate system could hopeto duplicate within the next 10 to 15 years.In addition to its fleet of satellites, theconsortium has offices worldwide andintimate relationships with governmentofficials in each nation. In contrast,potential satellite competitors have no suchadvantages.
The title of a recently released Intelsatpaper, "Can Satellites Compete withInternational Fiber Optic Cables in the 21stCentury?", suggests Intelsat might beapprehensive about competition because ofinternal concern that the organization mightnot survive in a market where it iscompeting with both separate systems andfiber optic cables. Intelsat undoubtedlyfeels competitive pressure from fiber opticcables. However, from a strategicperspective, the growth in fiber opticcables is more a blessing than a bane.
Fiber optic cables certainly are directcompetitors with satellite services in manysub-markets. Nonetheless, such competition.is-a far greater threat to new separatesystems than to Intelsat. In order forseparate systems to attract the largeamounts of risk-capital necessary toconstruct and launch additional satellites,they will have to convince investors thatthe new satellites can produce significantreturns quickly.
Consequently, the greater amount of fibercapacity available, with the attendantperception that fiber provides betterservice, the more difficult it will Le forseparate systems to grow into any meaningfulsize. Certainly, there m-y be enough"cream" in the international satellitemarket to support a handful of separate
_I
systems, but investors will be wary ofsinking moneys into systems intended tocompete head-to-head with Intelsat's andfiber optic cables' core businesses.
In some regards, Intelsat's prospects forlong-term prosperity in a competitive marketmay be even better than AT&T's were when itfaced the dismantling of its monopoly. Inboth cases, the costs of enteringcompetition with the e tablished carrier aresignificant. However, in the satelliterealm, the risks of failure areextraordinary. As Intelsat well knows,launch problems continue to plague theindustry. And while Intelsat may be able tosurvive launch failures, start-upcompetitors may find it very difficult tosecure additional financing if they suffer asingle failure. In addition, since itsfleet of satellites is already deployed,Intelsat has greater flexibility to addressin-flight failures and shifts in demand thanany separate system could hope to attain.
with its formidable assets in place,Intelsat has little economic reason to fearcompetition from separate systems. Indeed,competition from other systems may providejust the impetus the organization needs tocompete more effectively with fiber opticcables. Additional competition in thesatellite realm undoubtedly would producegreater advances in satellite technologythan possible under a monopolistic regime,and Intelsat could use these advances tosure up its own position.
4.2 THE ORGANIZATIONAL ABOUT-FACE
Obviously, for Intelsat to assume acompetitive posture, it will need more thanmere faith in the consortium'ssurvivability. What the organization needsis for it, as a whole, to welcoma andembrace competition. The AT&T paradigm,here, perhaps provides the most pointedinsight into where we believe Intelsat willbe going in the next few years.
By the time the dismantling of AT&T'smonopoly was complete, the company'sperspective on competition had turned 180degrees. The company accepted the newcompetitive order, and it set its sights onprospering within the new order. As aresult, while it has lost market share overthe last several years, the company hasestablished itself firmly as the majorservice provider, offering high quality andinnovative services at competitive prices.Moreover, AT&T's revenues and profitscontinue to grow.
The question Intelsat now faces, then, iswhether, from its own perspective, thereremain fundamental social reasons forretaining a monopolistic position, orwhether retention of any monopolistic poweris more by force of habit? Our comparison
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of Intelsat's position to AT&T's formerposition strongly suggests that, once anorganization's "corporate culture"recognizes that the theory underlying itsmonopolistic position has evaporated, theorganization seeks to redefine itself as anentity which would best serve its socialgoals as a competitor. We believe Intelsatis on the verge of making this culturalchange.
4.3 THE GOALS OF THE Intelsat TREATY HAVEBEEN ACCOMPLISHED
We base this assessment on our belief thatIntelsat must be coxing to realize (if ithis not already) that the organization hasfulfilled the tasks for which it wascreated. The Preamble of the IntelsatTreaty sets forth three fundamental reasonsfor establishing Intelsat's monopolisticposition in the international satelliteservices market. In brief, they were:
to bring satellitecommunications capacity to allthe nations of the world, on anon-discriminatory basis, asqiickly as possible;
to develop a single commercialsatellite system to provide suchservices; and
to continue to provide suchservices as efficiently,economically, and equitably aspossible.
The first and second purposes underlying theIntelsat Treaty obviously were met some timeago, and they continue to be met. Simplyput, the world now enjoys the benefits ofthe satellite system the Treaty created.
If there is any philosophical hesitancywithin Intelsat about moving towardscompetition, it would be based on whetherthe third purpose, i.e., continuing toprovide service economically, could bepursued within a competitive market.Obviously, the goal of "providing serviceeconomically" is not easily defined.However, we believe that now that Intelsathas attained long-term viability, itsleadership is coming to realize that thegoal can be more suitably reached throughopen competition.
Under Article XIV(d), as mentioned above,separate satellite systems have beenpermitted to operate, provided they do notinflict any significant economic harm on theIntelsat system. For many years, theconsortium struggled with how to define"significant economic harm." Indeed, formost of Intelsat's history, the focus hadbeen on loss of customers and the customers'potential revenues. This microscopicapproach, however, is increasingly at odds
with the initial purpose of Intelsat.Nothing in the Treaty's text suggests that*he organization is obligated to preserveits customer base. Certainly, maintenanceof a healthy customer base is essential tothe consortium's well-being. However, as
the AT&T example indicates, losing customershare does not necessarily result insignificant economic harm, so long as theenterprise is growing as it becomes more
competitive.
In this light, Intelsat's proposedabandonment of the "economic harm" testdemonstrates to us that the organizationitself is coming to these same conclusions.
4.4 THERE IS NO GOING BACK
Independent of the treaty's text, we believethat Intelsat's pledge to considerabandoning the economic harm test alsoreflects that the organization is coming togrips with the economic inevitability ofcompetition. In a word, Intelsat isrecognizing that its monopolistic positionhas served its greater social role and thatit is time to move on.
Outside the text of the treaty, the Intelsatorganization, as it was originallyconceived, stands as the signatories'statement that international satellitecommunications capacity is a "public good."Public goods are generally recognized asthose items which society deems essential toits welfare, and which, for the very samereason, society deems they should not beprovided at prices which would prohibitivelyexpensive for even the smallest segment ofsociety. The most obvious public goods areelectricity and water. But basictelecommunications service also is a publicgood in most countries. And certainly, theIntelsat Treaty deemed internationalcommunications a public good.
Because public goods are deemed essential topublic welfare, governments routinelyrequire that the goods be priced low enoughto ensure wide spread availability. Suchprice controls, in turn, serve as adisincentive to capital investment,especially where the goods requiresubstantial investment. Since the costs ofentering a public good market often areextremely high, capital will not flowwithout a guarantee of profitability.Consequently, if there are to be pricecontrols and guaranteed profits, then atleast initially there must be a limit onmarket entry -- i.e. there must be amonopolistic market structure in order toinsure that investors in such large projectshave an incentive to provide the good.
The lesson of the latter half of the 20thcentury is that a service, once deemed apublic- 9ood, need not remain subject tomonopolistic policies indefinitely. In
269
other words, not every public goodnecessarily requires the maintenance of a"natural monopoly" in order to ensure thatthe service is available to all at a
reasonable price. As technology advances,the public good can be produced at a lower
and lower cost, making it easier and easier
for the provider to distribute its service
widely at a low cost. Monopoly "rents" are
no longer necessary to subsidize the wide
provision of reasonably priced service.
When potential competitors see theopportunity to produce a public goodcheaply, and at the same time reap profitswhile undercutting the monopolistic pricesof a sole-provider, they naturally clamorfor the opportunity to do so. In the end,
technological advances ultimately can reducethe costs of entry into the market for thepublic good, making it easier and easier forcompetitive firms to thrive despite a socialmandate to provide their services at a
reasonable cost.
In the U.S., the long distancetelecommunications market had developed to
this point by the late 1970s, MCI argued
that it could substantially undercut AT&T'sprices, thereby providing its customers moreefficient service, without impairing thepublic's access to reasonably priced
service. MCI's initial prices were a full
30 to 40 percent below AT&T's existingrates. Further technological advances madeit clear that long distance service could beprovided at a reasonable price to all byfully competitive, overlapping networks.
There is little doubt that the internationalcommunications market has reached this same
plateau. Separate satellite systems arecropping up throughout the world, demandingaccess to Intelsat's markets. PanAmSat'sAOR satellite, PAS-1, is full andconstruction of satellites for the POR andIOR is underway. The company's ultimateplan is to have two satellites serving eachof the three regions. ColumbiaCommunications currently has 24 transponderson board AOR and POR satellites owned byNASA. Also in the works are separatesatellites to serve the African, European,Indian, South Asian, and South American landmasses. In sum, the satellites are plannedto overlay the Intelsat system, just asMCI's network grew to overlay AT&T's.
Such wide spread efforts to compete on aglobal scale :onfirm that technology hasadvanced to the point where entrepreneursfeel they can fill the shoes of themonopolist, without any significantdegradation in service or increase in cost.Faced with such an inevitable presence ofvoices advocating for competition (andputting up quasi-competitive systems), webelieve Intelsat has recognized that it haslittle choice but to open the door tocompetition, and in doir, so, that it must
make itself competitive as quickly as
pcssib:
5. POLITICAL CONSIDERATIONS
Obviously, economics alone cannot moveIntelsat to rapidly abandon its.'.:ernationally sanctioned protections. The
Intelsat Treaty ultimately is a politicaldocument, and changes to it are subject to
the vagaries of political whim. In the next
several years, however, we do not foresee
any diminution in the political forcesmoving Intelsat towards a competitive role
either.
In particular, the United States' view
towards fostering competition likely will
remain the same. Historically, the United
States, as the organization's largestshareholder, has wielded significantinfluence in directing Intelsat. In the
past, the world also could expect from the
United States fluctuations in economi,
policy with presidential changeovers. Bill
Clinton's recent election, however, was seen
as a mandate to "revitalize" the United
States' competitiveness. Certainly,
policies will change as a result.Nonetheless, the United States' policies
towards Intelsat, since they now arepremised on fostering competition, likely
will remain the same.
6. RAMIFICATIONS FOR THE PACIFIC RIM
The relatively rapid transition to open
competition in the international satellite
services market will have obvious and
tremendous benefits for users and service
providers in the Pacific Rim countries. In
addition to /ntelsat's existing PORfacilities, users and providers cananticipate greater and greater access to
Columbia's facilities on the TDRS
satellites, to former Soviet satellites, and
to PanAmSat's POR satellite. The increased
access will bring with it the lower costs,
greater flexibility in networking, and more
efficient service expected from competitive
service providers. And if our projections
are correct, that day should be around the
corner.
WARC-92 and Low Earth Orbiting Satellites: A Case Studyof the Process for Accommodating Spectrum
Requirements of New Technologies
Rob FriedenAssociate ProfessorPenn State University222 Carnegie Building
University Park, Pennsylvania 16802(814) 863-7996
ABSTRACT
The recently concluded World Administrative Radio Conference("WARC-92") provides a view of the "New Telecommunications WorldOrder" as old alliances and paradigms dissolve. The means by whichnations agree on spectrum allocations and service definitionsincreasingly will depend on whether and how advocates evidencebenefits to developing and non-aligned nations.
This paper will assess how the United States in large partsucceeded in securing global frequency allocations usable by lowearth orbiting ("LEO") satellites for mobile voice, data andposition reporting services. An allocation for "Big LEDs" in theL-band at 1610-1626.5 MHz represents a surprising victory in viewof opposition by a major regional bloc and existing users of theband. The paper also will evaluate the domestic regulatory processwith an eye toward determining when and how the FCC will act on LEOlicense applications.
International telecommuni-cation requires coordinationand resource sharing amongnations. Geostaponaryorbiting ( "GSO ")
communications satellitesoccupy a narrow orbital arcapproximately 22,235 milesabove the equator that enablessuch facilities to appearstationary relative to theearth. Low earth o5biting("LEO") satellites providean alternative for voice anddata service users requiringmobility and lightweightterminals. For either type ofsatellite, frequency spectrumremains a scarce resourcevulnerable to harmfulinterference.
Nations recognize thatuniversal agreement onfrequency and orbital slotusage fosters efficiency andreduces the potential forharmful interference. Still,incentives exist to useinternational policy makingand standard setting forums topursue self-serving policiesdesigned to promote nationalenterprises at the expense ofconsensus decision makinggeared to optimize technologyand consumer welfare.
The manner in which nationsagree on frequencies,technical parameters andoperational rules for LEO
271
systems furnishes a timelycase study of the difficulttask in balancing self-interest with internationalcomity. The InternationalTelecommunication Union("ITU") provides the forum,and nations of the worldsupply the players for sixweek conferences tasked withestablishing global orregional rules of the road forspectrum usage, satelliteparking places and assortedprocedures for avoiding orresolving harmfulinterference.
Increasing, consumer demandfor "tetherless" andubiquitous, communications hasprompted the United States andother nations to proposesignificant spectrumallocations for terrestrialand satellite delivered mobileradio services. The FCCrecognized the need in itspreparations for the 1992World Administrative Racy)Conference, ("WARC-92")and proceeded to revise itsdomestic spectrum allocationsafter WARC-92, substantiallyexpanding the spectrumavailable for mobile services.
This paper will examine howthe United States achievedmuch of its spectrumobjectives for LEO satellites,
despite the efforts ofnumerous opponents withdiffering strategic visions,industrial policies, or usesfor the targeted frequencies.
The InternationalTelecommunication Union
Founded in 1865, theInternationalTelecommunications Union("ITU") serves as theinternational forum forconflict management andresolution in
telecommunications.5
Itestablishes treaty levelpolicies and rules,promulgates technicalstandards and operationalrecommendations, and registersgrequency/orbital arc uses.The ITU is a specialized
agency of the United Nations,and with rare exception,avoids distracting politicalissues.
The ITU's major function canhe described as telecom-munications conflictprevention and resolution.Its success depends in largepart on the willingness ofnations to serve as fair-minded global citizens willingto relinquish a degree ofsovereignty. The ITU succeedsby forging consensus atvarious world or regionaladministrative conferences,leading to ratification ofconference Final Acts bynations, followed by domesticcodification of spectrumallocations, &tiles andregulations.
The future viability of newservices and spectrumallocations depends in largepart on the willingness of theITU's community of nations toreach closure. The FCC mayawait a global consensus, ortake unilateral actions ondomestic allocations toexpedite the availability ofnew services and technologies,and perhaps also to affectfuture global allocations.
ITU Structure and Function
The ITU structure can bedivided into permanent,plenary and ad hoc elements.Supreme authority lies withthe 170 member nations whowaive individual sovereignty,primarily through formaltreaty, and agree to comply
272
with promulgated rules andregulations. The infrequentlyconvened PlenipotentiaryConference ("Plenipot")revises the ITU's basicdocuments, the InternationalTelecommunications lu
Conventionand Constitution. At thePlenipot, nations holding onevote each, establish budgetsfor future Conferences and forthe ITU's permanent staffcalled the GeneralSecretariat. The Plenipotalso elects the ITU'sSecretary-General and otherofficials. It selects 36nations to participate in theAdministrative Council thatperforms executive boardfunctions.
The Plenipot also schedulesthe various AdministrativeConferences that, inter alia,create or modify rules,regulations or recommendationsincluding frequency andorbital arc allocations.Administrative Conferences caninvolve one of threegeographical regions of theworld,14ir have global applica-tion. These meetingshave addressed such diverseissues as mobile radio, theorbital arc, high and middlefrequency radio, satellitefrequencies, and the terms andconditions for provision ofinformation services.
The Administrative Councilimplements ITU policies andregulation, oversees theGeneral Secretariat, andestablishes the questions andissues that will be studied bytwo permanent "ConsultativeCommittees"--one for telephoneissues, the ConsultativeCommittee for InternationalTelegraph and Telephone("CCITT"); and one for radioand spectrum matters, theConsultative Committee forInternational Radio ("CCIR").
IFRB Roles: ConflictPrevention
Once the CCITT, CCIR andindividual nations haveproposed rules, regulationsand recommendations onfrequency and orbital arcusage, which have beenaccepted by the ITU membernations, the InternationalFrequency Registration Board("IFRB") performsregistration, coordination andconflict prevention functions.
The IFRB maintains a masterlist theoretically containingall nations' actual andproposed frequency and orbitalarc uses for non-military/national securityapplications.
Before recording a new use,the IFRB reviews it forcompliance with the ITUConstitution, Convention, andapplicable rules, regulationsand frequency allocations on aregional, or worldwide basis.It also assesses the potentialfor interference with otherregistered uses (in operationor planned), and issues an"Advance Publication" of theproposed new use. Theissuance of this documenttriggers a time period withinwhich nations may reportpotential interference, andexpress their desire toparticipate in future meetingsconvened to resolve suchproblems. Upon successfulconclusion of this"coordination" process, theIFRB officially registers theuse and "notifies" all Membernations.
ITU Conflict Resolution inSatellite Orbital Slots
Notwithstanding sharedinterests in consensus andconflict prevention, the ITUregularly bears the duty tobroker compromise and lend its"good offices" to resolveconflicts. Particularly forshared resources likesatellite orbital slots,nations vie for a finitenumber of available positions.Absent wide geographicalseparation of users, or costlyearth-based improvements inthe selectivity of earthstations to permit closerspacing of satellites withoutinterference, nations face azero sum game: one nation'sorbital slot use often canoccur only at the expense ofanother nation's future use.
The geosynchronous orbital arcrepresents a relatively narrowsliver of space wheresatellites can operate asstationary relays for signalstransmitted from earth. Theoptimal location forgeosynchronous satellites tocover the broadestgeographical area with a
usable signal, i.e., thesatellite's footprint, liesabove the equator. With onlyrecent limited alteration, theITU rules favor incumbents andprior registered uses.Typically, developed nationslike the United States andglobal cooperatives likeIIITELSAT and INMARSAT
have completed the IFRBregistration process for alarge number of satellites.
273
Nations "notified" of a futuresatellite deployment have anaffirmative duty to avoidcausing harmful interferenceshould they seek to use thesame orbital location.Developing nations often areleft with less than optimalorbital slots, because theirlater launched systems mustnot interfere with alreadyoperating networks. Thecongested orbital arc andlimited finances prompt suchnations to lease capacity fromcooperatives' satellites, evenfor domestic applications.
The FCC's "open skies" policy,which encourages satellitecarrier market entry,exacerbates the scarcity ofsatellite parking above North,Central and South America. Inpractice, this policy hasresulted in capacity gluts,unused transponders andaccusations that the UnitedStates has occupied more thanIts fair share of orbitalslots.
Inequity in Access toSatellites and InformationResources
The matter of orbital parkingplace negotiations takes oneven greater significance wnenone considers its impact onnational access to informationresources. Inequitable andinadequate access to orbitalslots can exacerbate the gapbetween information rich andinformation poor nations. Itone subscribes to the viewthat the wealth of informationresources has a direct andsubstantial effect on nationalfinancial weAlth, then accessto the orbital arc has aprofound impact on nations'overall social and economicwelfare. Accordingly, thestakes in the orbital slotaccess sweepstakes involvemore than how many televisionchannels a nation can access.
4:: ,/ _f_
14
It impacts the broader issueof whether and how a new WorldInformation Order can beachieved, and what burdensdeveloped nations shouldassume to promote parity ofaccess to public (orbitalslots) and private resources(programming and data basessent via satellite).
In the face of growing demandsfor orbital slots, compoundedby an inability orunwillingness by many nationsto commit to reduced
lbspacing
between satellites, theITU regularly becomes theforum for fact finding,arbitration and conflictresolution. It fashionsremedies at the macro-level byconvening World AdministrativeConferences to revise spectrumallocations, and to considerchanges to the method forreserving orbital arc slots.At the micro-level, the IFRBpublishes prospective uses,coordinates the necessarytechnical and operationalassessment of a nation'sinterference claims, resolvesreal interference problems andformally notifies the ITUmembership of newly registeredorbital arc uses.Satellite orbital arc policyraises political questions,and juxtaposes equity andefficiency concerns. For itspart, the ITU must fashion acompromise that balancesfinancial concerns regardingsatellite spacing andefficient frequency use, withequity concerns thatdeveloping nations deserveaccess to the GSO, despitetheir later filed applicationsthat under the "first come,first registered" processcould result in subordinatestatus.
Many developing nations haveadvocated an a priori,"allotment" plan for satTpiteorbital arc deployment.These nations advocate ascheme that guarantees slots,even at the risk of leavingfallow a resource that othernations, singularly orcollectively, could put to usein the near term.
Space WARCs
The ITU has found itself inthe middle of a geopoliticalbattle of philosophies,particularly at Space World
I -V
Administrative RadioConferences ("Space WARCs").Space WARCs establish rules,regulations and policies forvarious types of satelliteservices, e.g., fixed (fortelecommunications from and tomany fixed locations onearth), broadcast (forsatellite broadcasting ofvideo and audio programmingdirectly to dispersed receiverlocations), and mobile (fortelecommunications betweenfixed locations and mobilestations or between mobilestations). They alsodetermine at what frequenciessuch services should operate,ensuring that these operationsdo not interfere with otherexisting satellite networks,or other operators whose usesare authorized for the samefrequencies.
Most importantly, Space WARCsmust anticipate and resolvefuture bilateral conflictspossibly involving nationswhose representatives mightlack the expertise orinclination to help shape aspeedy and fair compromise.Accordingly, most membernations of the ITU investsignificant resources forextensive pre-Conferencepreparations, and sendrepresentatives to marathoninternational meetings thatcan run for six weeks or more.
274
Recent Space WARCs haveconfronted the issue ofequitable GSO access, andwhile grandfathering existingregistrations, theyestablished a framework forreserving at least one orbitalslot for each nation, and forresolving conflicts on abilateral, multilateral andregional basis. Software cancompute optimal orbital slotreservation plans based onsuch variables as frequencies,service parameters, coverageplans, transmission power andinterference levels. Butthere will always be a humancomponent that requires anhonest and impartial broker.
The Space WARCs also haveconsidered the role of globalcooperatives like INTELSAT andtheir status within the ITU.While cooperatives' satellitesserve the telecommunicationsneeds of many nations, the ITUmust acknowledge the interestof individual nations in
retaining options for nationalsystems. A proliferation ofsatellite systems can resultin excess capacity andinefficiency, much like whatarguably has occurred ininternational commercialaviation given the number ofnational flag carriers.
Cooperatives like INTELSAThave official observercapacity at the ITU, and usethe services of the nationwhere the cooperative'sheadquarters is located forsatellite registration andofficial advocacy. Conferringinternational cooperativesgreater opportunities toparticipate might improvesatellite coordination, butsome nations argue that suchstatus would create a "super-sovereign" organization. Inany event, the ITU will haveto impose increased spectrumand orbital arc sharing toavoid the tougher task ofdeciding who must sharespectrum and satellite parkingplaces, and what services havepriority access.
Orbital Slot ReservationAlternatives
Given the prospect for moresatellite systems separatefrom internationalcooperatives, one shouldassess whether the GSOregistration system can remainintact, and whether nationslike the United States cancontinue to enjoy the luxuryof supporting an open skiespolicy that currently fills inexcess of 25 orbital slots.Noting that an allotment planto reserve orbital slots fordeveloping nations mightresult in an unused resource,some policy makers haveproposed the use of auctionsand other types of marketvaluation mechanisms thatwould enable a developingnation to transfer a slo8forfinancial compensation.
While the Communications Actprecludes United Stateslicensees of spectrum fromviewing their authorization asproperty, the FCC hasencouraged property-likeconveyances of transmissioncapacity between facilities-based carriers and users, orcapacity resellers. In thesatellite arena, the FCC does
275
not quarrel with pre-launchsale of transponder capacityfor the lifyprie of thesatellite. By extension,should a developing nationdecide against operating itsown satellite system, separatefrom a regional orinternational cooperative,then its reserved slot mighthave significant resale valueif nearby developed naqarisneed additional slots.While the GSO has thecharacteristic of a rescommunes, a shared globalresource, consensus-reacheddecisions to reserve slots fora specific nation, or group ofnations, could result in amarket for converting anorbital slot into a moredesirable resource: hardcurrency.
The 1992 World AdministrativeRadio Conference
Tye thirteenth ITU Plenipotheld in Nice, France (May
23-June 29, 1989) determinedthat a WARC should convene in1992 to address frequencyallocations in va5lous partsof the spectrum. ThePlenipot passed a Resolutionproposing that the 1992 WARCaddress the Resolutions andRecommendations generated bythree previous WARCs convenedin 1987 and 1988:
1) one addressing HighFrequency, i.e.,short wave,broadcasting;
2) one on terrestrialand satellite-delivered mobileservices; and
3) one on planning andusing the orbitalarc forgeostationarysatellites.
Accordingly, WARC-92 had aquite diverse agenda spanningthe frequency spectrum from 3MegaHertz ("MHz") to above 20GigaHertz ("GHz").
The substantive issues ran thegamut from addressing theadditional spectrumrequirements of existingservices like shortwave andterrestrial mobile radio, tothe spectrum requirements ofnew services like highdefinition television, digital
audio broadcasting. As ifthe agenda did not alreadypromise controversy andchallenge, on June 21, 1990,the ITU Administrative Councilagreed to expand the WARC-92agenda to include Low EarthOrbiting2i"LEO") satelliteissues.
The Battle of the Haves andHave Nots
The domestic administrativeprocess to prepare UnitedStates positions for WARC-92and actions at the Conferenceexemplify substantialdifferences in terms ofspectrum and satellite orbitalarc priorities. A number ofdichotomies and schismsdeveloped between:
incumbent users andproponents of newservices;
LEO satelliteproponents andadvocates forprotecting GSOsatellites frompotentialinterference andcompetition;
developed nations,having the option toestablish spectrumpriorities betweencompeting technol-ogies, and devel-oping nationsperceiving the needto avoid foreclosingany single optionthat might serve astheir best, andpossibly only, nearterm technologicalsolution to basictelecommunicationsrequirements;
blocs of nations andcooperatives whoseindustrial policiesand strategicvisions could befurthered orfrustrated by WARC-92 decisions; and
advocates forlooser, genericservice definitionsand proponents forretaining service-specific, blockallocations ofspectrum.
276
United States Preparations
The United States approachedWARC-92 with the followingguiding principles:
a. To promote theimplementation of avariety of newoperational programsas rapidly aspracticable so thatall countries mayrealize the benefitsand spectrum savingspromised by moderntelecommunicationtechnologies;
b. To provideflexibility in theinternationalregulations toensure that theneeds of allcountries can bemet;
c. To reduceregulatory,technical andoperational barriersso that technologiescan rapidly beintroduced and usedto the benefit ofall mankind; and
d. To provide up-to-date regulationsthat assure greatersafety-of-life onland, on the sea, inthe air
24nd ina
space.
Taken as a whole, the UnitedStates principles emphasizechange and flexibility overthe status quo. The fact thatthe United States positionreflects a forward thinkingapproach belies theconfrontation and compromiseoccurring during the multi-year preparations for theConference. The FederalCommunications Commission("FCC") sought publicparticipation in two ways: 1)through public notices seeking,Rrnment in a formal Inquiry;
and 2) through theformation of an IndustryAdvisory Committee comprisedof representatives from tradeassociations, user groups,manufacturers, carriers andother interested enterpriseswith a mission of eitheradvocating spectrumreallocation to accommodatenew services, or protecting
previously allocated spectrumfrom reallocation. TheInterdepartment Radio AdvisoryCommittee ("IRAC"), under theauspices of the CommerceDepartment's NationalTelecommunications andIeformation Administration,
conducts a parallel, andoften separate process forcoordinating the preparationactivities for governmentusers.27
In the area of mobiletelecommunications providedover "L-band" frequencies(around 1.5-2.0 GigaHertz),the United States hasaggressively advocated a"generic" mobile satelliteservice allocation that wouldaccommodate the previouslyseparate ITU allocations formaritime, land mobile,aeronautical andsafety/dist5ess satelliteservices. In additionto affording greaterflexibility among serviceswhose spectrum demands mightgrow at varying rates, ageneric allocation wouldprovide an adequate breadth ofservice opportunities todomestic MSS operators.
The FCC is not beyondgerrymandering marketdefinitions and limiting thescope of competition to ensureprivate sector viability. Inthe domestic mobile satellitearena, the FCC forced allapplicants to form aconsortium, and then con59rredit a domestic monopoly.The Commission refused toallow domestic users thepermanent alternative ofaccessing Inmarsat capacity,but did allow such use on aninterim basis until the U.S.licensee launches a satellite.
The United States Position onLEO Satellites
The United States suggestedthat the best way toaccommodate growing demand forMSS would be "to permitflexible usage to adapt todynamic changes incommunication needs," with dueconsideration for
3tpriority
safety services. Inapplication, the United Statesgenerated several conreteproposals:
Reallocate a largeportion 95 the 1.5-1.6 MHz "L-
30
277
band" fromgeographicallyspecific services,e.g., land, maritimeor aeronauticalmobile services to ageneric mobile-satellite service;
Earmark a portion ofthis band- -1610-1626.5 MHz (forsatellite-to-Earth,i.e., "uplink"transmissions)and pairedfrequencies at2483.5-2500 MHz(for Earth-to-satellite, i.e.,"downlink"transmissions) formobile-satelliteservices,particularly thoseoffered by LEOsatellites, whomight not have theability to operatein other portions ofthe L-band due tothe potential forcausing or receivingharmful interferencefrom existing orprospective GSOsatellites operatedby incumbents likethe InternationalMaritime SatelliteOrganization("Inmarsat");
Create a newworldwide 40 MHzallocation- -2110-2130 MHz and 2160-2180 MHz (for uplinktransmissions) and2390 -2430 MHz (fordownlinktransmissions) toaccommodate likelyfuture requirements;
Add a footnotepermitting the useof frequencies inthe 1850-1990 MHzband for mobile-satellite service asan adjunct to theterrestrial,personalcommunicationservices projectedto flourAh in thefuture; and
Provide for a moreformal basis forinterference
avoidance betweenLEO and GSOsatellites providingmobile-satelliteservices.
WARC-92 Deliberations andDecisions
Dr. Pekka Tarjanne, SecretaryGeneral of the ITU, deemedWARC-92 "the biggest, mostimportant and difficult
36conference of its kind."Significant controversy aroseon the issues of spectrumallocations for LEOsatellites, and the method forcoordination to avoidinterference to both LEO, GSOand land-based systems. Manyof the nations, whichcoordinate telecommunicationspolicies in the EuropeanConference of Postal andTelecommunicationsAdministration ("CEPT"),favored terrestrial solutionsto future mobiletelecommunicatkrrequirements. UnitedStates advocacy for LEOsatellite mobile services mayhave appeared as a threat toindustrial and strategicpolicies:
The United States and Europewent head-to-head over thisissue because neither countrywas certain that the marketcould sustain both FPLMTS[future terrestrial landmobile services in the 1700-2300 MHz band] and LEOs above1 GHz. As a result, bothwanted to make sure theyreceived an allocation to gettheir systems off the ground.Europe, however, has had ahead start, because FPLMTScould begin with . . .
[digital] cellular service,which is finiqing its testphase . .
Incumbent radio astronomy andnavigation users of the bandtargeted for LEO mobilesatellite services alsoexpressed concerns about thepotential for harmfulinterference. While Russiamight possibly provide launchservices for United StatesLEOs, a more immediate concernpredominated: the need fortechnical standards andprocedures to safeguard theGLONASS global navigationsystem that transmits in aportion of the 1610-1626.5 MHzband, with the prospect of
expanded use if a futuregeneration of satellites islaunched. The United Statesand Russia negotiated afootnote to the spectrumallocation stating that the"use of the 1610-1626.5 MHzband by the mobile-satelliteservice . . . is subject tothe application of thecoordination and notificationprocedures set forth
3in
Resolution COM5/8."These procedures requireoperators of LEO systems tocoordinate with other LEO, GSOand terrestrial systems, and
Adias the practical effect ofWequiring very low powermobile radio transmissions inthe part of the band whereGLONASS
40operates.
278
Many observers attribute thesuccessful outcome for LEOsatellites to the elevtnthhour reconsideration by anumber of developing countriesthat initially considered LEOsystems potential bypassersable to syphon traffic andrevenues from the governmentowned and operated telephonecompany:
European opposition to theallocations was ultimatelyovercome by the merits of theU.S. proposals and theirattractiveness to manydeveloping countries, whichsee LEOs as a lower cost wayto provide communications inrural or other areas with aninsufficient telecommuni-cations infrastructure.Politically, the Europeanswere reticent to be seen asblocking the development ofnew technologies, particularlywith regard to developingcountries with low telephone
densities.41
Small LEOs
Prior to WARC-92, the FCCproposed new frequencyallocations for "small LEO"satellites in a narrow poronof the VHF and UHF bands.These satellites will providelow cost, non-voice servicesonly, such as data messagingand position determinationthat can improve theefficiency of oil explorationand transportation industries,enhance remote monitoring ofthe environment and provide anemergency signaling system.
r.
LEO satellites orbit moreclosely to the earth thanconventional GSO satellites.This close proximity enablesboth terminal and satellite tooperate at low power. LEOsatellite services can costsignificantly less thanequivalent services providedvia GSO satellites, becauseLEO launch costs are one
43twentieth as expensive.
The United States WARC-92proposal for Low EarthOrbiting Satellites Below 1GHz was straightforward: 137-138 MHz and 400.15-401 MHz(downlink)and 148-149.9 MHz(uplink). WARC-92considered this proposal asnon-controversial, because ofthe small amount of spectrumrequested for a newallocation, evidence submittedto show that small LEOs wouldnot harm incumbent operations,including weather satellites,and the shared view that thetwo-way data servicesavailable via low-cost pocket-sized terminals could "supporteconomic devfiopmentworldwide."
WARC-92 provided "everythingtitle U.S. wanted, plus more"
for small LEDs:
Developing countries wereparticularly vocal that .
.(such] service will be a low-cost tool to relay messages,especially in emergencysituations when ground-basedtelephone service is notavailable. . . . Africannations also supported theallocation because receiversfor this service will beavailable at one-tenth thecost of hand-held telephonesfor [GSO] satellite-baudvoice communications.
After WARC-92, the FCC made apreliminary determinationwhether any small LEOapplicant duerved a Pioneer'sPreference designationthat would guarantee a futurelicense. A Pioneer'sPreference provides "a partyfirst proposing a servicethrough a spectrum allocationrule change the right toobtain a license in thatservice . . . (provided theCommission decides] toreallocate spectrum andttithorize the new service."
The Commission in effectreduces administrative and
45
279
regulatory uncertainty bypermitting the pioneer to fileits license applicationwithout being subject to51competing applications.If the FCC proceeds with aservice authorization andspectrum allocation,consideration of theinnovating party's licenseapplication will precede thefiling opportunity for otherapplicants. Hence, the extentof the marketplace headstartafforded the pioneer dependson the time it takes theCommission to establi-'-. fornon-pioneers an applicationfiling window, processing,deliberation and licensegrant.
The Commission tentativelygranted a Preference toVolunteers in TechnicalAssistance ("VITA") that hadproposed to provide datacommunications via a smalllow-Earth orbiting satelliteoperating on a few VKy HighFrequency channels. TheCommission denied theapplications of otherapplicants that arguably hadgreater financial andtechnical resources. TheCommission held that VITA haddemonstrated that:
1) its proposal istechnologicallyinnovative;
2) the innovationreasonably will leadto establishment ofa service notcurrently provided,or willsubstantiallyenhance an existingservice; and
3) it had conducted anexperiment, ordemonstrated theviabi]ity of itsproposal withdetailed techrqialsubmissions.
The FCC noted that VITA"clearly was the first todevelop LEO datacommunications technology andto experiment with theoperation of an actual LEOsystem to support datacommunicatigp in the VHFspectrum."
The Commission also decidedthat it could expedite thesmall LEO licensing process byencouraging applicants tonegotiate technical andregulatory terms unggr whichall could operate. TheCommission has legal authorityhg create advisory committees
and to encourage them tonegotiate rgplatorysolutions. "If consensusis reached, it is used as thebasis for the Commission'sproposal"5ho regulate theservice. The Commissionbelieved it could use anegotiated rulemakingarrangement to develophgchnical and licensing rules
for small LEOs, becauseof the limited number ofidentifiable interests, and areasonable likelihood that anadvisory committee could reachconsensus having considered ingood faith the variousviewpoints.
Big LEOs
Soon after WARC-92, the FCCissued a Notice of ProposedRulemaking to modify thedomestic Table of FrequencyAllocations to incorporatespectrum allocations for MSSin the 1610-1626.5 MHz god2483.5-2500 MHz bands.While the FCC tentativelyconcluded that "the servicesto be provided by the proposednon-geostationary systemsoffer the promise ofsignificant new benefits toboth domestic andinternational communicationsusers, " the Commissionrefrained from awarding anyPioneer's Preference. TheCommission stated that "noneof the five (LEO) proponentshas demonstrated sufficientlythat it merits award of 6a
6zpioneer's preference,"primarily on grounds that noapplicant had proposed a"significant improvement orinnovation
3over the state of
bthe art" particularly inlight of the failure of allapplicants to provide analysesdemonstrating6echnicalfeasibility.
The Commission also declaredits interest in having aNegotiated Rulemaking toassist it "in developingregulations that willfacilitate the maxim numberof MSS providers."
280
Notwithstanding theCn-Amission's interest inhaving the affected partiesmanage the rulemaking process,the prospect for a consensusdecision appears much lesslikely than in the case ofsmall LEOs. The sixapplicanhg for a Big LEOlicense have proposedincompatible transmissionsystems, and may have businessplans that assume a certainamount of channel capacity,and hence, a certain amount ofinterference-free frequencybandwidth. Some of theapplicants may not want anexpedited licensing processthat would impose a deadlinefor launch and operation.
Conclusion
WARC-92, along with thedomestic regulatory activitiesthat precede and follow theConference, involves highstakes decisions. The visionof ubiquitous communicationsvia small handsets cannotbecome a reality without aglobal consensus on mobilesatellite service frequencyallocations. Likewise, thevision requires timely actionby the FCC to incorporate thespectrum allocations, issuerules and license applicants.
The outcome at WARC-92demonstrates that theinternational process canaccommodate new spectrumrequirements, despite the lackof a consensus going into theConference. On the otherhand, the domestic regulatoryprocess, which emphasizesprocedural fairness at theexpense of timeliness, maytake years to run its course.The success at WARC-92 meansvery little indeed if the FCCcannot follow up and find away to evaluate each Big LEOapplicant, resolve technicalincompatibilities, equitablyassign the available spectrumand award licenses.
1. For extensive coverage of international satellitecommunications law, see White and White, Jr., The Law and
Regulation of International Space Communication, (Dedham, MA.:Artech House, 1988).
2. "A geostationary satellite's circular and direct orbit lies inthe plane of the Earth's equator and remains fixed relative to theEarth. The distance to the Earth is approximately 35,785 km(22,235 miles). Amendment of Sec. 2.106 of the Commission's Rulesto Allocate Spectrum to the Fixed-Satellite Service and the Mobile-Satellite Service for Low-Earth Orbit Satellites, Notice ofProposed Rulemaking, ET Docket No. 91-280, 6 FCC Rcd. 5932, n. 2
(1991).
3. "LEO satellites are satellites that are not in geostationaryorbit about the earth. LEO satellites orbit the earth at altitudesgenerally in the order of 1000 to 2000 km (650-1300 miles). LEOsatellites have been utilized primarily for military, scientific,and amateur radio communications purposes." Id., 6 FCC Rcd. at5932.
4. "We believe that the demand for mobile-satellite service isbeginning to grow. Until recently, most MSS has been limited tomaritime systems, but recent years have seen a significant increasein interest in providing land and aeronautical MSS." An InquiryRelating to Preparation for the International TelecommunicationUnion World Administrative Radio Conference for Dealing withFrequency Allocations in Certain Parts of the Spectrum, GEN DocketNo. 89-554, Second Notice of Inquiry, 5 FCC Rcd. 6046 at para. 65(1990).
5. For an overview of the ITU, see The InternationalTelecommunication Union: Its Aims, Structure and Functioning, ITUPress and Information Section (Oct. 1991).
6. For a general description of the ITU, see Rothblatt, "ITURegulation of Satellite Communications," 19 Stanford J. Int'l L.,1-25 (1982), Codding and Rutkowski, The InternationalTelecommunications Union in a Changing World, (Dedham, MA:ArtechHouse, 1982); Jaku, "The Evolution of the ITU's Regulatory RegimeGoverning Space Radio Communication Services and the GeostationarySatellite Orbit," 8 Annals of Air and Space L. 380 (1983); Gregg,"Capitalizing on National Self-Interest: The Management ofInternational Telecommunication Conflict By the InternationalTelecommunications Union," 45 L. and Contem. Prob. 37-52 (1982).
7. To see how the United States prepared for the 1992 WorldAdministrative Radio Conference, see An Inquiry Relatina toPreparation for the International Telecommunications Union WorldAdministrative Radio Conference for Dealing with FrequencyAllocations in Certain Parts of the Spectrum, GEN Docket No. 89-554, First Notice of Inquiry; 4 FCC Rcd. 8546 (1989), Send Noticeor inquiry, 7 rt.L. two. 01340 (1989); Supplemental Notice of Inquiry,6 FCC Rcd. 1914 (1991); Report and Order, 6 FCC Rcd. 3900 (1991);United States Dept. of State, United States Proposals for the WorldAdministrative Radio Conference Malaga-Torremolinas, Spain 1992(Washington, D.C. 1991).
8. For an example of how the United States implementsinternational spectrum allocation decisions, see Amendment of Parts2, 25, 80, and 87 of the Commission's Rules regardingImplementation of the Final Acts of the World Administrative RadioConference for the Mobile Services, Geneva, 1987, 4 FCC Rcd. 4173(1989); 4 FCC Rcd. 7603 (1989); See also Amendment of Sec. 2.106 ofthe Commission's Rules to Allocate the 1610-1626.5 MHz and the2483.:;-2500 MHz Bands for Use by the Mobile-Satellite Service,Including Non-geostationary Satellites, ET Docket No. 92-28, Noticeof Proposed Rule Making and Tentative Decision, FCC 92-358 (rel.Sep. 4, 1992) (proposing to implement spectrum allocations for "BigLEO" mobile satellite services decided at the 1992 WorldAdministrative Radio Conference).
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9. See, e.g, Amendment of the Commission's Rules with regard tothe Establishment and Regulation of New Digital Audio RadioServices, GEN Docket No. 90-357, Notice of Inquiry, 5 FCC Rcd. 5237(1990), Notice of Proposed Rulemaking and Further Notice of
Inquiry, FCC 92-466 (adopted Oct. 8, 1992); outlined in pressrelease, 1992 FCC Lexis 5756 (Oct. 8, 1)92); creating a licenseapplication filing window, DA 92-1408, Applications Report No. DS-1244, 1992 FCC Lexis 5804 (rel. Oct. 13, 1992).
10. See Final Acts of the Plenipotentiary Conference, Constitutionand Convention of the International Telecommunications Union,Optional Protocol, Decisions, Resolutions, Recommendations andOpinions, Nice, 1989 (Geneva, Switzerland: InternationalTelecommunication Union, 1990). The Constitution contains thebasic provisions and purposes of the ITU. The Conventioncomplements the Constitution and addresses more functionalprovisions relating to the operation of the ITU and its
Conferences).
11. For an analysis and criticism of United States participationfor ITU Conferences, see United States Congress, Office of
Technology Assessment, The 1992 World Administrative RadioConference Issues for U.S. International Spectrum Policy-Background Paper,OTA-BP-TCT-76 (Washington, D.C. 1991).
12. The International Telecommunications Satellite Organization("INTELSAT") is a global cooperative, formed by an inter-governmental agreement, with a mission of providing ubiquitoussatellite communications service via GSO satellites. SeeMultinational Communication Satellite System, opened for signatureAug. 20, 1994, 15 U.S.T. 1705, 514 U.N.T.S. 26 (19 nation agreementestablishing interim arrangements for a global satellitecooperative); Agreement Relating to the InternationalTelecommunications Satellite Organization ("INTELSAT"), opened forsignature Aug. 20, 1971, 23 U.S.T. 3813, 1220 U.N.T.S. 21 (INTELSATAgreement), Operating Agreement Relating to the InternationalTelecommunications Satellite Organization ("INTELSAT"), opened forsignature Aug. 20, 1971, 23 U.S.T. 4091, 1220 U.N.T.S. 149.
13. The International Maritime Satellite Organization ("INMARSAT")is a global cooperative, formed by inter- governmental agreement, toprovide ubiquitous maritime telecommvAications to ships in the highseas, with aeronautical and land mobile services available on anancillary basis. See Convention of the International MaritimeSatellite Organization, opened for signature, July 16, 1979, 31U.S.T. 1, T.I.A.S. No. 9605.
14. Domestic Communications Satellite Facilities, 35 FCC 2d 844(1970).
15. See, e.g., B. Harris, "The New Telecommunications Development:Bureau of the International Telecommunication Union, 7 Am. U. J.Int'y L. & Pol'y 83 (Fall, 1991); Saunders, Warford and Wellenius,Telecommunications and Economic Development (Washington, D.C.: TheWorld Bank, 1983); Crandall and Flamm, Changing the Rules:Technological Change, International Competition and Regulation inCommunications, (Washington, D.C.: The Brookings Inst., 1989).
16. In Licensing of Space Stations in the Domestic Fixed-Satellite Service, 54 Rad. Reg. 2d (P&F) 577 (1983), the FCCordered domestic satellite operators to position satellites withintwo degrees of each other. This reduced orbital spacingaccommodates more satellites over the United States and enables theneighboring nations of Canada and Mexico to operate their domesticsatellites with wider separation. However, it required higherinvestment in more sensitive earth stations.
282
17. "An a priori system of frequency and orbital positionregulation uses administrative conferences to subdivide and allotradio frequencies and orbital positions to countries in advance ofneed or use. On the other hand, an a posteriori ("first-come,first served") system requires subsequent satellite operators tocoordinate with pre-existing satellites to avoid harmfulinterference." Straubel, "Telecommunication Satellites and Mi.,:ketForces: How Should the Geostationary Orbit Be Regulated by theF.C.C.?" 17 N.C. J. Int'l L. & Com. Reg. 205, 211, n. 30 (1992).
18. "A market for spectrum licenses or rights, if properlystructured, can maximize both 'allocative efficiency' (i.e. pricesbid for spectrum reflect the costs to society of spectrum use) and'distributive efficiency' (i.e., those who value the spectrum mostwill use it." United States Dept. of Commerce, NationalTelecommunications and Information Administration, U.S. SpectrumManagement Policy: Agenda for the Future, NTIA Special Pub. 91-23,98 (1991).
19. Domestic Fixed-Satellite Transponder Sales, 90 FCC 2d 1238(1982), aff'd sub nom., Wold Comms., Inc. v. FCC, 735 F.2d 1465(D.C. Cir. 1984).
20. The Kingdom of Tonga Advanced Published with the IFRB a totalof 31 "Tongasat" satellites to be located in 26 separate orbitallocations. In December, 1991 Unicorn Satellite, Inc. of Aspen,Colorado announced a business arrangement whereby it would acquirethe rights to two Tongasat orbital registrations. "TongasatAuthorizes Unicorn to Use Orbital Slots Over Asia," 11Communications Daily, No. 231, 2 (Dec. 2, 1991).
21. The Plenipotentiary Conference ("Plenipot") is the supremeorgan of the ITU having both regulatory authority and the power tomodify the ITU's Constitution and Convention. It has beenscheduled in 8-10 year increments, but a 1989 amendment establishesa 5 year interval not to exceed 6 years. InternationalTelecommunications Constitution, Nice, 1989, Art. 8. In addition toscheduling WARCs, the Plenipot determines general policies,establishes budgets, elects the major office holders of the ITUmanagement and selects which nations will have a representative atthe ITU's executive board known as the Administrative Council.
22. Final Acts of the Plenipotentiary Conference Nice, 1989,Resolution No. 1, Future Conferences of the Union, Sec. 1.4.
23. See U.S. WARC-92 Preparations-Second Notice of Inquiry, 5 FCCRcd. at 6046, App. B.
24. United States Dept. of State, United States Proposals for theWorld Administrative Radio Conference, Malaga-Torremolinos, Spain,1992 (Washington, D.C. July, 1991). [hereinafter cite as U.S.Proposals].
25. See supra, n. 7.
26. "In 1978, the President delegated authority to manage thespectrum used by the federal government to the Secretary ofCommerce through Executive Order 12046. The Secretary of Commercefurther delegated this authority, under Department of Commerce(DOC) Organizational Order 10-10, to the Assistant Secretary forCommunications and Information, who is also the head of theNational Telecommunications and Information Administration (NTIA)."U.S. Dept. of Commerce, National Telecommunications and InformationAdministration, Long Range Plan For Management And Use Of The RadioSpectrum By Agencies And Establishments Of The Federal Government,1-1, NTIA Spec. Pub. 89-22 (June, 1989). NTIA "seeks the advice ofFederal Government agencies through the Interdepartment RadioAdvisory Committee (IRAC). The IRAC, its related subcommittees,and ad hoc groups provide information and coordinate activitiesthat help NTIA plan for future RF requirements, assign frequencies,and resolve conflicts." Id. ac 1-2.
283
27. See Fisher, "Preparing For WARC-92 Major Decisions ForTelecommunications In The 21st Century," 5 Via Sat, No. 9, 49 (Sep.1990).
28. See Amendment of Parts 2, 22 and 25 of the Commission's Rulesto Allocate Spectrum for, and to Establish Other Rules and PoliciesPertaining to the Use of Radio Frequencies in a Mobile SatelliteService, GEN Docket No. 84-1234, Report and Order, 2 FCC Rcd. 1825(1986); Second Report and Order, 2 FCC Rcd. 485 (1987), on recon.,2 FCC Rcd, 6830 (1987), further recon. den., 4 FCC Rcd. 6016 (1989)(allocating 27 MHz of L-band spectrum for generic mobile satelliteservice); Amendment of Parts 2, 22 and 25 of the Commission's Rulesto Allocate Spectrum for, and to Establish Other Rules and PoliciesPertaining to the Use of Radio Frequencies in a Land MobileSatellite Service for the Provision of Various Common CarrierServices, Mem. Op. S Order, 4 FCC Rcd. 6041 (1989) (licensing amandatory consortium of applicants), partially vacated and remandedsub nom. Aeronautical Radio, Inc. v. FCC, 928 F.2d 428 (D.C. Cir.1991) on remand, Tentative Dec., 6 FCC Rcd. 4900 (1991); FinalDec., 7 FCC Rcd. 266 (1992); Amendment of Part 2 of theCommission's Rules for Mobile Satellite Service in the 1530-1544Mhz and 1626.5-1645.5 MHz Bands, Notice of Proposed Rulemaking, 5FCC Rcd. 1255 (1990) (proposal to add 33 MHz to the domesticallyallocated generic MSS band).
29. See, e.g., American Mobile Satellite Corp., 4 FCC Rcd. 6041(1989) (approving formation of a single consortium of previouslyseparate MSS applicants), partially vacated and remanded sub nom.Aeronautical Radio, Inc. v. FCC, 928 F.2d 428 (D.C. Cir. 1991) onremand, Tentative Dec., 6 FCC Rcd. 4900 (1991); Final Dec., 7 FCCRcd. 266 (1992).
30. See Communications Satellite Corp. and American MobileSatellite Corp. Requests for Interim Waiver of Sec. 2.106 of theCommission's Rules, 5 FCC Rcd. 4117 (1990).
31. U.S. Proposals at 4.
32. The specific frequencies targeted were the raidodeterminationsatellite service frequencies at 1610-1626.5 MHz/2483.5-2500 MHz,the land mobile and maritime mobile frequencies at 1530-1544 MHzand 1626.5-1645.5 MHz, and the aeronautical mobile-satellite andland mobile satellite services in the 1545-1559 and 1646.5-1660.5MHz bands.
33. The United States also proposed a secondary allocation forspace-to-Earth transmissions in the 1613.8-1626.5 MHz band topermit spectrum efficient bi-directional operation, as had beenproposed by Motorola, Inc. for its IRIDIUM system.
34. At the 1987 Mobile WARC, the ITU proposed that the 1610-1626.5and 2483.5-2500 MHz band be reallocated for a newradiodetermination-satellite service, that would provide for suchfunctions as real time truck position reporting to a centralfacility. See, e.g, Application of Geostar Corp. for Authority toConstruct and Operate Terminal Units in the RadiodeterminationSatellite Service, 2 FCC Rcd. 1184 (1987). The United Statesproposed to make MSS co-primary with RDSS in these frequencies.
35. See Monheim, "Personal Communications Services: The WirelessFuture of Communications," 44 Fed. Com. L. J. No. 2, 335 (March,1992).
36. "WARC Comes to an End: Final Acts Approved," 3 PCN News No. 51 (March 5, 1992).
37. The extensive efforts by CEPT to block mobile satellitespectrum allocations prompted Ambassador Jan Baran, the UnitedStates Delegation Head to WARC-92 to allege that "an organizedbloc of 32 European countries . . .often appeared to oppose newtechnologies." "U.S. 'Big LEOs Gel Allocations At WARC Largely AsProposed, But Limits Aimed At Protecting Russian Glonass SystemCould Restrict IRIDIUM; CEPT Nations Get 230 MHz For Future Public
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Land Mobile Service; BSS-Sound Gains Worldwide Allocation At L-Band," Telecommunications Reports 12 (March 9, 1992) [hereinaftercited at WARC-92 Summary).
The State Department's unclassified wrap-up cable declaredsuccess, in "buck[ingl the inertia and caution of the radiocommunity, suspicion and stonewalling by a well-organized Europeanblock of thirty-two countries, and Russian singlemindedness inprotecting its GLONASS radionavigation satellite system."Ambassador Jan Barran, "U.S. Success at World Administrative RadioConference (WARC'92): Wrap-up Cable (March 3, 1992) [hereinaftercited as WARC-92 Wrap-up Cable].
38. WARC-92 Summary at 4. An unnamed source alleged that the"Europeans wanted to make sure that a terrestrial system wasimplemented before MSS and LEOs could serve hand-held terminals-basically, they were protecting their manufacturers, such asEricsson and Nokia." Id.
Even the State Department wrap-up cable reported:"The well-organized and cohesive European ITU members (32 CEPTcountries in all) cane to the WARC generally opposed to thespecific LEO proposals of the U.S. This was because of a generalEuropean lack of interest in mobile satellite services (theirpriorities for WARC'92 were terrestrial mobile issues), a Europeandesire for more time fo: their own industrial development of thesetechnologies, and/or difficulties with the specific bandsproposed." WARC-92 Wrap-up Cable at para 10.
39. International Telecommunication Union, Addendum andCorrigendum to the Final Acts of the World Administrative RadioConference (WARC-92), Malaga-Torremolinos, 1992 Footnote 731X, A+Cp.11. Resolution ComS /8 is entitled: Interim Procedures for theCoordination and Notification of Frequency Assignments of Non-Geostationary-Satellite Networks in Certain Space Services and theOther Services to Which the Bands are Allocated. It is included inFinal Acts of the World Administrative Conference (WARC-92),Malaga-Torremolinos, 1992 at 101-113. During WARC-92, the UnitedStates tabled an Information Paper identifying ways multiple LEOsystems could operate within a limited spectrum allocation. SeeUnited States of America, Information Paper, "Techniques ForEstablishing Multiple LEO Systems In The 1610-1626.5 MHz Bands,Addendum 13 to Document 12, dated 11 February 1992, filed at theWARC For Dealing With Frequency Allocations In Certain Parts of theSpectrum, Malaga-Torremolinos Feb./March 1992.
40. The United States Delegation Head, Ambassador Jan Barancharacterized the compromise as "provid[ing] protection of Glonassand the opportunity for Russia to negotiate with one or more of theLEO [satellite operators] to determine how and when a LEO systemwill operate in Russia." Marcus, "Delegates Bestow Mobile Mandate,"3 Space News No. 9e 1,20 (March 9-15, 1992). Notwithstandinginitial post-WARC euphoria, this coordinatiop requirement may proveso difficult that the "defeated" European bloc uay have the lastlaugh: "'If you look at the shopping list of what the Americanswanted, then they were successful,' said Mike Goddard, chairman ofthe European Radio Committee and chief of the British delegation toWARC. 'But they will find, on taking a second look, that there arerestrictions that will make things much more difficult than theymight imac!ine.'" Riccitiello and de Selding, "Consortium ChaosMuddle Results of WARC Talks," 3 Space News No. 10, 1, 20 (March16-22, 1992).
41. U.S. Wrap-up Cable at para. 13.
42. See, e.g., Amendment of Section 2.106 of the Commission'sRules to Allocate Spectrum to the Fixed-Satellite Service and theMobile-Satellite Service for Low-Earth Orbit Satellites, ET DocketNo. 91-280, Notice of Proposed Rulemaking, 6 FCC Rcd. 5932 (1991).
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,
43. Id. at para 9.
44. U.S. WARC-92 Proposals at 2-3.
45. Even before nations arrived at the Conference, there waspredisposition to favor this proposal of the United States:"Australia could accept an allocation for LEO MSS systems below 1GHz provided that it can be accommodated with our current andplanned use of the relevant band, and that adequate protection andcoordinated procedures are agreed so that harmful interferencewould not be caused to existing and planned national systems."Department of Transport and Communications, RadiocommunicationsDivision, Canberra, Australian Proposals For The WorldAdministrative Radio Conference For Dealing With FrequencyAllocations In Certain Parts Of The Spectrum, Malaga-Torremolinos,February 1992 9 (20 November 1991).
46. Id. at 3.
47. "U.S. 'Big LEOs Get Allocations At WARC Largely As Proposed,But Limits Aimed At Protecting Russian Glonass System CouldRestrict IRIDIUM; CEPT Nations Get 230 MHz For Future Public LandMobile Service; BSS-Sound Gains Worldwide Allocation At L-Band,"Telecommunications Reports 12, 14 (March 9, 1992) (hereinaftercited at WARC-92 Summary]. In addition to allocating almostexactly what the United States sought the Conference alsoallocated, on a secondary basis, 6 MHz at 312-315 (uplink) and 387-390 Mhz downlink as requested by the Commonwealth of IndependentStates. See Id. at 14.
48. Marcus, "Delegates Bestow Mobile Mandate," 3 Space News No. 9at 20.
49. See Establishment of Procedures to Provide a Preference toApplicants Proposing an Allocation for New Services, GEN Docket No.90-217, Notice of Proposed Rule Making, 5 FCC Wed. 2766 (1990),Report and Order, FCC 91-112, 6 FCC Rcd. 3488 (1991) (hereaftercited as Pioneer's Preference Report and Order], on recon., 7 FCCRcd. 1808 (1992).
50. Pioneer's Preference Report and Order at para 23.
51. Id. at para 32.
52. Request for Pioneer's Preference in Proceeding to AllocateSpectrum for Fixed and Mobile Satellite Services for Low-EarthOrbit Satellites, ET Docket No. 91-280, Tentative Decision, 7 FCCRcd. 1625 (1992).
53. Id. at para 14.
54. Id. at para 15.
55. FCC Asks For Comments Regarding the Establishment of an
Advisory Committee to Negotiate Proposed Regulations, CC DocketNo. 92-76, Public Notice, Release No. DA 92-443, 7 FCC Rcd. 2370,
1992 FCC Lexis 1968 (rel. April 16, 1992); see also AlternateDispute Resolution, Initial Policy Statement and Order, 6 FCC Rcd.
5669 (1991).
56. See Federal Advisory Committee Act, 5 U.S.C. App. 2 (1990).
57. See Negotiated Rulemaking Act of 1990, Pub. L. 101-648 (1990).
58. Little LEO Negotiated Rulemaking Notice, 7 FCC Rcd. at 2370.
59. Some of the questions for resolution include whether to
require Little LEOs to offer service on a common carrier basis,what transmission modulation to require, whether different rulesshould apply to non-commercial systems and how to resolve frequencycoordination disputes between Little LEOs and terrestrial
operations.
286
60. Amendment of Sec. 2.106 of the Commission's Rules to Allocatethe 1610-1626.5 MHz and 2483.5-2500 MHz Band for Use by the Mobile-Satellite Service, Including Non-geostationary Satellites,Notice of Proposed Rule Making and Tentative Decision, ET DocketNo. 92-28, FCC 92-358, 1992 FCC Lexis 5094 (rel. Sept. 4, 1992)
[hereinafter cited as Big LEO NPRM).
61. Id. at para 13. The Commission elsewhere stated its intentionto allocate spectrum and to promote development of new MSS systems,[blecause of the important economic and service innovations that
could be provided." Id. at para 15.
62. Id. at para 33.
63. Id. at para 49 (rejecting Motorola's petition).
64. "Thus, we are unable to discern any innovative aspect of theLEO proposals that would warrant award of a pioneer's preference toany of the proponents. Based on the record, we are unable toconclude that any of the applicants has 'pioneered' the proposedservice or has sufficiently demonstrated that it has developed thetechnology used in its system." Id. at para 51. The Commissiondid grant experimental authority to Motorola, Elipsat and TRW totest, and verify engineering evaluations and system functionality.
The Commission took extra time to consider the scope and costof the experiments out of concern that it not get cornered intogranting permanent authority to experimental licensees, simplybecause one or more had invested many millions of dollars intooperational satellites, capable of providing commercial services.See Amendment of the Commission's Rules Relative to Allocation ofthe 849-851/894-896 MHz Bands, GEN Docket No. 88-96, Notice of
Proposed Rulemaking, 3 FCC Rcd. 2436 (1988); Report and Order, 5FCC Rcd. 3861 (1990), on partial recon. 6 FCC Rcd. 4582 (1991)(creating rules for multiple airplane telephone service providersnotwithstanding the previous grant of a multiple year experimentallicense to one enterprise).
65. FCC Asks For Comments Regarding The Establishment of anAdvisory Committee to Negotiate Proposed Regulations, CC Docket No.92-166, Public Notice, Release No. DA 92-1085, 7 FCC Rcd. 5241,
1992 FCC Lexis 4451 (rel. Aug. 7, 1992).
66. The FCC placed the applications of Motorola SatelliteCommunications, Inc. ("IRIDIUM") and Elipsat Corp. ("ELIPSO-I") onPublic Notice on April 1, 1991, Public Notice No. DA-91-407.On October 24, 1991, the Commission issued a Public Notice, No. DS-1134, accepting for filing applications of AMSC Subsidiary Corp.,(to modify it existing MSS authorization to operate with additionalbandwidth), Constellation Communications, Inc., ("ARIES"), EllipsatCorp. (for a second generation system), Loral Cellular Systems,Corp. ("GLOBALSTAR") and TRW, Inc ("ODDYSEY").
287
Richard E. Butler, AM40 Barrington Avenue, Kew, Victoria, 3101, Australia
WARC'92 and Future Considerations
ABSTRACT
WARC'92 has set the framework for many innovative and new technology applicationsand expanded services and radio communication uses between now and the end ofthe Century. These include an array of mobile services, including applicationof low earth orbit (LEO) satellites with hand-held units, telephones and pocket-sizedevices, as well as satellite sound (digital audio CD quality) broadcasting andopportunities in progress to film quality television.
Use of radio waves underpins fast growing industries as well as national competitive-ness and economic performance.
The paper foresees review of the "L" and "S" bands and rationalisation of theWARC'92 allocations later in this decade.
Introduction
World Administrative Radio Conferences (WARCs)have to take the long term perspective;in particular, they must establish the pro-visions to enable industry, system designers,planners, manufacturers and service innovationsto proceed with confidence towards costeffective production, service adaptation,innovation, investment and operation. Theyassume particular importance with the currentemphasis on freer markets and the resultingsearch for world-wide compatibility, effectiveinvestment and more efficient use of theradio spectrum.
Uses of radio waves underpin fast growingindustries, national competitiveness andeconomic performance. Wireless technologyis a key element in bringing competitionto the telecommunication sector.
Digitalisation is bringing significant qualityimprovements, greater band widths, enhancedreliability and stability for low poweredand low cost service applications. Thereis also growing service connectivity, choiceand flexibility between wireless (radio)and wired systems. These advances can bringunprecedented portability, mobility andpersonal user convenience. They bringopportunities for multi-purpose use of spectrumand facilities. They include satelliteand terrestrial operations with superiordigital applications. They extend to digitalaudio sound (up to CD quality) broadcastingand for a huge variety of quality mobileservices. No longer is there the traditionaldependence upon wired connectivity.
Countries demonstrated their degree of interestin new technologies against the backgroundof:
. existing international allocations of
radio frequency bands; and
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the difficulties found in changing currentuse of individual frequency bands forparticular service objectives and theneed for adequate lead times for change;and
desire for introduction of specific servicesin the short, medium or long term.
Salient Points in Decisions
HF Spectrum. Modest changes were made inthe reg,latory allocation table for exclusiveshortwave broadcasting (200 KHz below 10 MHzand 590 KHz between 11 and 19 MHz). Thechanges will become available for exclusiveuse for broadcasting on 1st April 2007 andused in single side band (SSB) transmissionmode. It has been recommended that thedate of 31st December 2015 for the generalintroduction of SSB and the cessation ofdouble side bands in all bands (decidedby WARC 87) should be advanced and the reviseddate so decided by the next competent Confer-ence. A resolution was adopted on the conven-ing of a future Conference for the improvedplanning of HF bands allocated to the Broad-casting Service. In some cases the extensionshave rationalised existing out of band"broadcasting use.
Mobile and Mobile Satellite Services. Therewas much focus on huge growth requirementsfor mobile services and accommodating diverseaspirations of particular countries andregions:
terrestrial cellular mobile services;
aeronautical public correspondence 5 MHz(1670-1675 and 1800-1805 MHz) world wide;
Future Public Land Mobile TelecommunicationSystem (FPLMTS) beginning from the year2000 some 60 MHz for terminal units withprovision for roaming and portabilityof hand-held units world wide and 270 MHzfor the mobile units with the CCIR to
prepare specifications for common applica-tion world wide. Terrestrial and spacetechnology use has been recognised, andeach country will be free to use for
other purposes those portions of thebands concerned not required for FPLMTSwithin its borders (recognising differingchannel needs between dense and light
traffic needs); and
mobile satellite services using the geo-stationary orbit (GSO) satellites, andlow earth orbit (LEO) satellites, thelatter only coming to the forefront recentlyfor general service application. Someof the latter extend to medium earthorbit (MEO) applications.
Some LEO systems, notably 'little' (i.e.non voice service) LEDs, would provide,for example, emergency, alert, alarm signals,position location for fleet movement, remotesensing, telemetry, data collection andenvironment monitoring, paging, short recordedmessage formats, e.g. 15 characters, radio-determination (location) and slow speeddata services for general or for specialisedsystems of daily messaging for health, environ-ment education, energy or related socialand welfare purposes. Allocations havebeen made in the VHF bands where technologycomponents are well developed with primaryand secondary sharing with other services,such as Space Research and MeteorologicalSatellite Service. The way is open forlow cost terminals and minimal operationalcosts of a few cents per message operating24 or more small satellites will provideglobal coverage through national gateways.These satellites are known as little LEDs.System applications are imminent, the tech-nology having been proven for certain applica-tions for a few decades and now set forcommercialisation.
Frequency allocations were made for "big"
LEOs and would provide for voice and highspeed data cellular systems in space with52-66 satellites for voice and higher speeddata, relay, radio determination and a widerange of services. These systems are knownas big LEDs. Decisions should enable atleast two or more world-wide little LEOsystems to start up in the foreseeable future,subject to international co-ordination andavoidance of interference with other services.Some proposed satellite systems extend to
medium or elleptical orbit applicationsbeyond 5,000 miles of a 12 or more in satelliteconstellations.
The Conference realised that there werenow good reasons to have more extensiveco-ordination processes for the establishmentof non-geostationary satellite systems.Until now regulatory procedures have focussedlargely on geostationary satellites.
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Broadcasting Satellite Service (BSS). Aftermuch divergence the Conference allocatedon a primary world-wide basis 50 MHz (1452-1492 MHz) spectrum for the digital (up to
CD quality) broadcasting through BSS andcomplementary terrestrial extensions.
The CCIR had identified the best cost effec-tive/quality solution for BSS (sound) in
the vicinity of 1.5 GHz; moving upwardswould have meant additional cost/power con-siderations of the order 1 to 4 to 1 to 6
at 2.5 GHz for satellite and terrestrialoperations, as well as delay in the developmentof BSS sound systems.
Provision has been made for early systemdevelopment for national or regional BSSsatellite up to 25 MHz and terrestrial usebefore a planning conference around 1998,
and in advance of the allocated spectrumbeing available for primary use by allcountries in the year 2007. Some countries,e.g. United States of America, Japan, WesternEuropean and Russian Federation)N, have keptopen their interests in the other bands.
High Definition Television (HDTV). Becauseof existing use a common world-wide allocationfor wide-band HDTV was not achievable, butEurope, Africa, Asia and Oceania (Regions1 and 3) joined to the CCIR recommendationat 21.4-22 GHz. The spectrum becomes availablefrom 1st April 2007. In the case of theAmericas, provision has been made in the17 GHz band. Technology continues to developand HDTV may well be introduced in otherbands reserved and unused in bands reservedfor the Broadcasting (TV) Satellite Service.For example, Regions 1 and 3 foresee a Confer-ence to review the Broadcasting SatelliteService Plans emanating from WARC'77 andpresumably greater flexibility will resultto enable multi-purpose use of the satelliteorbits.
Other Decisions. Other issues include:
improved sharing and choices in use ofbands - fixed and mobile, includingsome cases satellite and broadcasting;
more generic and consolidation wits.
mobile satellite services - land, maritimeand some aeronautical service allocation:.,with continued priority for safety anddistress purposes;
significant increase and sharing forearth-exploration satellite services(important for management of the environ-ment) space research, inter-satelliteand manned spacecraft operations;
alignment of the equipment maintenancerequirements on-board ships with theConvention on the Safety of Life at Sea(SOLAS) relating to the Global MaritimeDistress and Safety System;
g
increased uplink pairing (13.75-14 GHz)
for the Fixed Satellite Service of specialinterest to INTELSAT;
more specific protection and status forRadio Astronomy;
adaptation of regulatory provisions forco-ordination of non-geostationary satellitesystems, e.g. low earth orbit (LEO) systems,with geostationary satellite systems(GSO); the i_ternational TelecommunicationConvention having concentrated so faron the latter.
Preparation and Conduct of Conference
The Conference was conducted under the legalframework of the Nairobi Convention (1982)as insufficient Members of the union haveratified the Nice Constitution (1989).
The Nice Plenipotentiary provided for a WARCof four weeks and two days in Spain to dealwith "Frequency Allocations in Certain Partsof the Spectrum ", taking into accountResolutions and Recommendations of precedingspecified Conferences (Resolution No.1,Plenipotentiary Conference Nice 1989).
Like all WARCs since the PlenipotentiaryConference, Montreux, 1965, WARC'92 hada limited Agenda.
However, the Agenda established by the Admin-is-rative Council in consultation with Membersof the Union took on a more extensive scopethan originally foreseen in 1989.
In contrast to largely unresolved considera-tions, provisions were included in the Agendafor new opportunities such as low earthorbit and digital satellite and complementaryterrestrial quality sound broadcasting,space research services.
No provision was made to extend the durationof the Conference nor to accelerate wideunderstanding of the significance of additionalagenda items posed for WARC'92.
The particular seminars and pre-Conferenceinformation exchanges were narrowly focussed.Even the timing and conclusions of the CCIRreport did not achieve the expected focusfor such a Conference.
There was the late presentation of new issuesand new technical information on sharingbetween services. Consequently it wasnecessary for the Conference to reach in
principle type allocations, with the CCIRto carry out urgently detailed studies onsharing criteria. This applies particularlyfor LEO-type applications, sharing frequencybands with other services using the geo-
stationary orbit.
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It is important that ways be found to improvethe individual and collective preparationsfor Conferences if adequate confidence is
to be maintained for the smooth functioningfor each WARC.
As regards mobile applications for geostation-ary and non-geostationary applications (LEDs,ME0s), further consideration of the extentof the frequency allocations in the "L"
and "S" bands will undoubtedly be required.The interaction with other services willremain under study. It is likely that somerationalisation of the allocations in theamended Table of Frequencies covered byWARC'92 will be required sooner than later;hence the importance of timely studies,including in the Radiocommunication Sector.
References:
1. Final Acts World Administrative RadioConference, Malaga-Torremolinos, 1992
2. Wireless Beyond 2000 and Coherent NationalPolicy Actions, Richard E. Butler, Aust-ralian Telecommunication Users GroupBranch Meeting, Melbourne, April 1992
Multimedia Presentation System using ISDN
Youichi Kihara Yoshihiro [email protected] [email protected]
Yoshihiro [email protected]
NTT Network Information Systems Laboratories3-2-11, Midoricho, Musashino-shi, Tokyo 180, Japan
1. AbstractThis paper describes an experimental on-line multimedia presentation system that provides multimediainformation consisting of sound, full-color still pictures, subtitles, and pointing information via N-ISDN. We are applying this system to an on-line karaoke system for field trials now.
2. IntroductionNTT has been expanding its ISDN service area across
Japan, and has increased the service menu since it first beganoffering commercial ISDN services in April 1988[1]. ISDN isexpected to have a great impact on the development of mul-timedia information systems[2]. It enables the implemen-tation of economically versatile multimedia information ser-vices. The high transmission capacity of ISDN (high speedand multiple channels) will eventually lead to the develop-ment of advanced multimedia information services consistingof sound, pictures, text, and data.
Fast transmission combined with data compressi.n tech-niques result in a significant reduction in the display time ofa full-color picture. It also enables the transmission of dataand presentation control information, such as pointing po-sition and synchronization timing for displaying or changingpictures. Use of multiple channels in an ISDN makes possibleadvanced presentation forms such as visual information con-sisting of a sequence of still pictures accompanied by a voicepresentation or background music and synchronized subtitles.
These presentation capabilities make info' nation servicesmore attractive than existing analog videotex services. Mul-timedia information consisting of voice and pictures can beeasily developed using a personal computer with audio-visualinput devices such as a video camera or an electronic stillvideo camera.
3. Design policyFirst, the basic system features and requirements are de-
scribed.
3.1 Multimedia information on demand
In a service that provides multimedia information on de-mand, all data needed for presentation are provided to eachterminal from an information center over N-ISDN. After in-putting a request, the terminal user waits for the presentationof the information to begin. Thus informat.on must be pro-vided within a reasonable amount of time after the request.Therefore the terminal needs to receive data from the infor-mation center and replay data at the same time. If we usetwo B channels for each information item, our system canprovide the following types of data.
MHz sound
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full-color still pictures and subtitles
pointing
control data for synchronization
If we use the HI-channel, moving-picture data can also betransferred.
3.2 Continuous data transferIf continuous sound data and moving-picture data is frag-
mented, gaps between blocks appear(3]. Therefore these dataare not fragmented in our system, and are used in synchro-nization control. Accordingly these data must be transmittedisochronously.
3.3 Economically flexible system construction
Our system is designed to transfer of various types datasimultaneously and to control the timing during replay. Itmust be possible to economically change the CPU perfor-mance, data storage capacity and number of line connectionsof the information center according to the amount of traffic.
4. Features of system designOur system consists of an information center, terminals,
and a multimedia input/editing terminal (Figure 1). Table1 lists the system specifications. Before describing them indetail, we outline the features of the system.
4.1 Terminal storage
The terminals in our system are equipped with data stor-age.
4.1.1 Advantages
There are two advantages of a terminal's having storage.One concerns service availability. Even if the center or
communication network is not available for reasons such assystem trouble or a center being busy, service can continueto some extent using the information stored in the terminal.
The other advantage concerns service cost. The access traf-fic to the information center generally varies among informa-tion items. The difference in the access frequency amongitems depends the updating frequency. If the access trafficconcentrates on information whose contents are not updated
video camera
1 0
mammal monlanuasanammEnsil 1111111111
MEM.
LAN
MO
ISDNINSnet
INSnet1 5 0 0 64
(2B)
video monitor
tape recorder or CD player
Figure 1: Architecture of the multimedia presentation system
Table 1: System specifications
Characteristic Specification
vis
au
I
data type full-color still picture, subtitle
resolution still picture: 640 pixelsx400 pixels.subtitle: 640 x200
gradation 256 gradations RGB (3x8 bits)
c°ding methodstill picture: GBTCsubtitle: MIR
ua
d
oi
bandwidth 50Hz to 7kHz
coding method S8 -ADPCM
network INSnet64 (2B+D), INSnet1500 (238+0, H11)
Terminal storage
(1)
Terminal storage
(2)
Figure 2: Terminal storage effects
292
frequently, the traffic can be reduced by placing the heavily-accessed information in the terminal storage. In this way,only information not stoned in the terminal storage need beretrieved from the center.
The access traffic to the information center decreases asthe terminal storage capacity increases. To the extent thataccess traffic decreases, center cost can be reduced by us-ing fewer communication lines, fewer ISDN communicationboards, and less powerful CPUs. While the cost of center-to-terminal communication is lower, the terminal cost increasesbecause of the added storage.
Figure 2-1 shows an example of the relation between accesstraffic and terminal storage capacity. There is an optimal ca-pacity in the terminal storage concerning the total systemcost (Figure 2-2). This optimal point depends on the costsof the system components. It moves toward higher terminalstorage capacity for lower terminal storage cost. It moves to-ward lower terminal storage capacity for lower center equip-ment or communication costs.
4.1.2 Menu item search
If the menu information item is placed in the terminal stor-age, search for the item a user requires can be done locally,reducing center-to-terminal communication and the process-ing load on the center. The information menu is downloadedfrom the center when the terminal is set up and when the listis updated.
4.1.3 Updating information stored in a terminal
The information in the terminal storage that is reused leastfrequently is deleted when there is a shortage of available filearea. The information. items that are reused more frequentlythus gradually accumulate in the terminal storage. Anotherapproach is to delete the information which has remainedunused for the longest time. Either updating method can beselected. If the time of information updating in the centeris known, the updating algorithm can include a function fordetermining which of the two updating algorithms is the mostappropriate.
c.;
4.2 Synchronization control
4.2.1 Synchronization of media
Replay of various types of data such as sound, still pictures,subtitles and pointing is controlled by synchronization con-trol data. This control data is created w: the informationprovider combines the various data into multimedia informa-tion at the multimedia input/editing terminal. Control datafor synchronization is composed of
timing for change from a still picture or a subtitle to thenext one, and
the pointing position at each interval.
Timing is described in terms of the frame cycles of a terminaldisplay (30 frames /s). The count is reset every four seconds.Pointing position data is provided every 1/30 s, so pointingposition can be changed at 1/30 s intervals. When the framecount reaches the timing point in the synchronization controlclata, the terminal changes to the next still picture or subtitle.
In our system, sound data is transferred isochronouslywithout framing. A specific bit sequence is added to sounddata to mark the data start/pause/restart/end position in a64kb/s bit stream. Frame counting starts when sound databegins to play.
4.2.2 Multimedia information transfer
When an information retrieval request is received at thecenter, the control data for synchronization (defined in theprevious section) is sent to the terminal first. Then the vari-ous types of media data are transferred concurrently in realtime over multiple channels to the terminal for replay.
Still picture data must be loaded into a RAM (videographic random access memory) in the terminal before thetime for display. Decoding requires time, so at least twoVRAMs are needed. Still picture data is transferred fromthe center to the terminal before the related sound data istransferred. Subtitle data is also transferred before the re-lated sound data.
Lack of control data for synchronization or subtitle datais a serious detriment for replay, so control data should betransferred using an error-free protocol.
4.3 Center-to-terminal interface protocol
Our system offers the following two data transfer modes.
The 64kb/s (or 1536kb/s) isochronous mode is used totransfer data to be replayed continuously without delay(for example sound data or moving picture data). Thereis no procedure in layer 2 to make the best use of thetransfer capability provided by layer 1.
A highly reliable mode for transferring data that must beerror-f:ee (for example control data for synchronizationor subtitle data). There is LAPB protocol in layer 2.
One problem in using the isochronous transfer mode is thatit is difficult to distinguish media data and the commands orresponses that are used to control data transfer between the(enter and the terminal. Therefore, commands or responsesfor controlling data transfer in the isochronous mode are ex-changeed over the related channel in the highly reliable mode.In sonic common file transfer protocols, such as FTAN1[4] and
293
Terminal
initialize command
Center
initialize response
read select command
read select response
define area command
define area response
read start command
write start command
data
data
data end command
o. Establishing
logical channel set
o= Assigning data nodes
to channels
Specifying the part
* of data node
to be transfered
o= Starting transfer
transfer end command
deselect command
deselect command
terminate command
terminate command
* optional sequence
Ending
one data node transfer
o= Ending
all specified parts
Releasing
o= the assignment
Terminating
0- logical channel set
Figure 3: Command/response sequence for dataretrieval in a control channel
FTP[5], it is possible to execute only inband control (com-mands or responses are exchanged over the same channel asused for data transfer). In our system, each channel is as-signed to one of the following roles.
Control channel Commands or responses that controldata transfers in all related channels are exchanged anddata is transferred, sharing the time slots of the channel.This channel operates in the highly reliable mode.
Data transfer channel Only data is transferred. Ei-ther the isochronous mode or the highly reliable mode isselected according to the type of data.
Using this center-to-terminal iaerface protocol, multipledata transfer channels can be controlled by one control chan-nel. An example of a normal sequence using this protocol isshown in Figure 3.
Data is transferred as a virtual unit called a data nose.Each data node is identified by both the center and the ter-minal. Whole file systems, a single file, or a part of a filecan be handled as a data node. The data to be tr.s.nsferredis specified by the data node rime irrespective of its storageunit, so the protocol used in our system is more flexible thanFTP or RCP (Remote CoPy).
28+0. 23B+D,
H I I +28+0
MAX 8 boards(100B)
MOOD
(Data)
optional
I Ethernet
board I
HDD
(System) Extension
Memory
board
it P2bds
console
RS232C
CPU board
4MRAY
68020
20MHz
VM
CFI
board(Sync)
4..1SCSI
board
(Sync)
SCSI
bus
SCSI
bus
MAX
6 boards
Communication Subsystem
1100
(Sys. Data)
EC:1H
to 7
units
per line
Multimedia data
Storage unit (part)
HDD: Hard Disk Drive
MODD: Magnetic Optical
Disk Drive
Figure 4: Communication subsystem hardwareconfiguration
5. System Details5.1 Information center
5.1.1 Architecture
The information center consists of from 1 to 4 communi-cation subsystems (according to traffic) and a managementsubsystem. One communication subsystem is composed ofthree parts (Figure 4).
CPU part This is a commercial CPU board with an Eth-ernet interface.
ISDN line control part This consists of several ISDNcommunication boards, and can handle up to 100 B-channels.
Storage part This consists of several SCSI controllers anddisks. Its configuration is multiple initiator, multipletarget. Data is transferred in the synchronous mode.
The center can h e a modular structure, with the numberof ISDN communication boards determined by the numberof simultaneous connections; the number of SCSI controllersand disks depends on the quantity of multimedia data. Eachpart communicates with others through the VMEbus. Themanagement subsystem controls all communication subsys-tems via Ethernet. Figure 5 shows a sample information cen-ter that consists of four communication subsystems and onemanagement subsystem. Each communication subsystem hasfour ISDN communication boards and four SCSI controllers.This center can handle 36S B-channels and store over 40 GBof multimedia information (in 2.8 GB disks).
294
Sun3/E or SPARCenginelE
MINEMENERMHitachi
DK5I7C-37 x 16
2. KB
VMEbus
23B+0
I
11:1!!1
WWI10
IIMMON==1Sun3/80 or SPARCstation
Ethernet
Figure 5: Hardware configuration of an informationcenter
5.1.2 Software
The AP-level software is written in C and runs under SunMicrosystems UNIX. The information center needs to trans-fer data over 100 B-channels simultaneously and without de-lay. To achieve this performance on a standard UNIX system,the following programming techniques are used.
1. Lightweight Process[6]The center-to-terminal communication is asynchronous,so one method would be to create two data transfer pro-cesses, one for sending and another for receiving, for eachISDN channel. However if this method is adopted, therequired performance cannot be achieved a.: UNIX has ahigh and variable schedule latency. Therefore our infor-mation center adopts a lightweight process. Lightweightprocesses can share a common address space, so the costof creating tasks and intertask communication is sub-stantially less than for an ordinary process.
2. Raw Disk I/0(71Providing multimedia information on demand requiresunits of data larger than the block size for high-speedtransfer between memory and disk. Thus, the ordinary"cooked"disk I/O of UNIX has two demerits:
As data is transferred to the buffer cache, theamount of I/O data that can be transferred at onetime is limited.
If the amount of data is larger than the file systemblock size, the data consists of several file systemblocks, which may not occupy sequential positionsin a disk. Therefore, the disk head has to be repo-sitioned a number of times during the data trans-fer from disk. If these blocks are contiguous, the
disk head must still be repositioned because of dataswapping.
Therefore, raw disk I/O is used in our information cen-ter. This offers three advantages.
First, a large amount of data can be transferred atonce, because the buffer cache is bypassed.
Also, a large amount of data can be stored sequen-tially on the disk.
Finally, processes are locked in memory, so swap-ping out is never done after the data transfer isfinished.
However, using raw disk I/O has the deme:,t that moreadvanced file system facilities such as directories and au-tomatic file extension are not available. In our informa-tion center, file management facilities in which multime-dia data are stored in disks are provided in the AP-levelprogram. Multimedia data stored on disk is replacedoutside of normal business hours (automatic file exten-sion and garbage collection are not done).
3. Messages[8]The AP-level software consists of three parts(Figure 6).
A path control block This block issues requests to anISDN communication board.
A transport control block This block relates onecontrol channel to data channels and controls datatransfer in each channel.
Service functions This block manages the position ofmultimedia data stored on disk, checks user accessrights, and so on.
A message facility is adopted for interprocess commu-nications. It has a low overhead and high bandwidthbecause it has internal buffers (message queues) for eachprocess.
4. VMEbus memory[9]In a system where multiple I/O requests for DMA datatransfer occur simultaneously, the aggregate size of thedata transfer buffer often exceeds the 1 MB provided forDVMA by the Sun architecture. This is caused by threefactors. One is the 1 MB DVMA space limit (Entries foronly 128 pages are provided.) Another is that DVMAarea one page greater than the buffer is allocated so asnot to adjoin other allocated buffer pages. The third fac-tor is that if the I/O buffers used in AP-level programshave different sizes, fragmentation often results. In thiscase, I/O requests for DMA data transfer are kept wait-ing until sufficient contiguous unused space is available.
Therefore, if there are many simultaneous connections(over 10 lines), memory is placed on the VMEbus andused like an extension DVMA space in our informationcenter. For this purpose, in the center, a buffer for datatransfer is mapped to the VMEbus memory by mmap()in AP-level programs. Also, special driver internal funs:Lion calls, which are modified versions of nzb_setup(),mbrelcase0 and MB_ADDRO obtained by adding a pro-cess to judge whether the buffer is in the system memoryor in the VMEbus memory, are used in driver level pro-grams.
295
Administration
programService functions
Cmessage queue
Transportcontrol block
J Cmessage queue
Path control block
hread thread thread thread hrea
accept ing
incoming
call
receiving
data
sending
data
receiving
data
sending
data
Tread/
write write writeread/ read/write write-
UNIX Kernel
Device driver program of the ISDN communication board
Figure 6: Software structures
5.1.3 ISDN communication board
Three kinds of ISDN comunication board, 2B+D, 23B+Dand Hii+2B+D, are available. According to the system scaleand the type of data provided, the appropriate boards can beselected and connected to the VMEbus. The line interfaceprotocol provided in these boards is shown Table 2. Twodata transfer modes using B-channel and H11-channel, thatis the 64kb/s (or 1536kb/s) isochronous mode and a highlyreliable mode, are available.
Values such as the ISDN number, a sub-address, a bearercapability, high layer compatibilities and low layer compati-bilities can be stored in the memory of this board and used forselective call acceptance and the default values for a SETUPmessage.
For the communication between a CPU and an ISDN com-munication board, the following three interfaces are used.
VMEbus slave interface used when a CPU writes acommand to an ISDN communication board memoryand reads a response.
Interrupter used when an ISDN communication boardnotifies a CPU that a response to the CPU is written inthe board memory.
VMEbus master interface used when the ISDN communication board reads data from a system memory ora VMEbus memory and writes to it.
This communication is illustrated Figure 7.In an AP-level program, a request such as to connect an
ISDN channel, to disconnect it, or to transfer data is is-sued through system calls to the device driver .rograrn ofthe ISDN communication board. If several ISM, communi-cation boards are set up in one communication subsystem,this device driver selects the most suitable one. This devicedriver also has the following three characteristics.
Table 2: Interface protocol of the ISDNcommunication board
3 JT-Q931
2JT-Q921
(LAPD)
X.75 SLP(JT-X75
LAPB)
X.75 SLP(JT-X75
LAPB)
1 JT-1430/JT-1431 (23B+D) JT-I431
Layer
Applied
Cal lcontrolsignal
Cs
reliable
CS
isorinceous
CS
reliable
CS
isochronces
D channel B channel channel
CPU memory CPU
part
VMEbus
OD CD
Dual-port memory
memory for DMA
OD C) MAC
Controller
Q01
Line Interface
1 ISDN communication board
ISDN Lines
CD CPU writes a command on dual-port memory
mapped to VMEbus address space.
CD Controller reads a command.
CD DMAC reads data whose position is specified
by the command from CPU memory.
QD Controller sends/receives data to/from
ISDN Line through Line Interface.
DMAC writes data to CPU memory.
a) Controller writes response which specifies
position of data written by RAC.
CD Controller interrupts CPU.
OD CPU reads response from dual-port memory.
Figure 7: Communication between CPU part andISDN communication board
296
2B+D
System Bus
ISDN
interface
Buffermemory
Still picturedecorder
Voice/sounddecorder
File I-1 Inputstorage interface
Main
processor
VRAII
AMP
Display
monitor
Speaker
Input
device
Figure 8: Terminal hardware configuration
1. Asynchronous I/OISDN data transfer is much slower than the VMEbus. Itis inefficient if an AP-level program that requests datatransfer is kept waiting until the data transfer to ISDNends. Thus, asynchronous I/O with the ISDN commu-nication board is provided by the device driver support-ing O_NDELAY, select() and ioctIO to determine whichasynchronous command has been completed.
2. SCATTER/GATHER DMAThe device driver can set several addresses to specify thepositions of data in a CPU memory that are to be trans-ferred to ISDN, if SCATTER/GATHER DMA is used.This function allows 64 kB of data to be transferred be-tween the CPU and ISDN communication board withonly one command and response.
3. Management functionsThis device driver has three management functions. Oneis holding the last issued command and response and thetime of issue for each channel to indicate whether thechannel or the ISDN communication board is active orhung up. Another is support for automatic configura-tion. The third is deactivating a specified ISDN commu-nication board.
lip to eight ISDN communication boards can be installed inone communication subsystem.
5.2 Terminal
The terminal is a personal computer with an ISDN in-terface, a still-picture CODEC, VRAMs for the pictures, asound CODEC, a speaker and storage equipment. Multime-dia data transferred from the information center is storedlocally. When a user requests the same data again, the ter-minal can replay it without connecting to the center. Figure8 shows the terminal configuration. The terminal provides anumber of facilities (Table 3). The control software is writtenin C and runs under MSDOS.
' 6 :
Table 3: Terminal Facilities
Category Facilities
Operation
interface
'displaying service menu
interpreting a user request
(retrieve, start, stop, cancel, etc.)
Network
control
controlling center-to-terminal connection
using ISDN CS
- automatic rediall.ng Vlen the center is busy
selection for call acceptance
(checking information elements)
holding default values for SETUP message
Receiving
and
storing
receiving data from ISDN
storing data in the terminal storage
loading data if data of a request is stored
Replaying
multimedia
information
decoding still picture data, subtitle data
and sound data
'displaying still pictures, subtitles and
pointing in synchronization with sound
File
management
file area management of the terminal storage
automatic deletion of least-accessed file
Maintenance -receiving and storing maintenance data sent
from a center
list or menu of information items
terminal setup information
logging data
5.3 Multimedia input/editing terminalMultimedia data is stored in the information center as two
files. One is sound data, and the other is a compound multi-media file consisting of still pictures, subtitles, pointing dataand control data for synchronization. These two files a:emade at a multimedia input/editing terminal, by the follow-ing procedure.
1. Compress sound data previously recorded to a dig-itally coded sound data file using the SB-ADPC1v1CODEC[10].
2. Compress a still video frame previously recorded from avideo recorder or a still video camera to a digitally codedpicture data file using the GBTC CODEC[11].
3. There are two methods for handling a subtitle. In one,the subtitle is compressed to an MMR coded still picture.In the other method, the subtitle is handled as charactercode text. The subtitle data file can be made by eithermethod.
4. While listening to the sound generated from the file,specify the timing for changing to the next still pictureor subtitle, and specify the pointing position. The tinn-ing data is revised to provide a margin for transfer delayand decoding time, and then stored as a synchronizationcontrol data file. The pointing positions are sampled ev-ery 1/30 s and stored as a pointing data file
5. "she picture, subtitle, synchronization control and point-
ing data files are concatenated to form a compound file(Figure 9).
6. The sound data file and the compound file are trans-ferred via LAN or a magnetic optical disk to be stored
297
%ragmen Synchronization Pointing Subtitle ---: Subtitle Still : Still
Control «1 i : ;n Picture :Picture
:1 . m
- Transfer order
Figure 9: The non-sound compound file format
in the information center.
The hardware configuration of the multimedia in-
put/editing terminal is almost the same as a terminal witha video camera and a tape recorder. The control software is
written in C and runs under MS-DOS.
6. Application to KaraokeWe are applying the multimedia presentation system to an
on-line karaoke system for field trials. Over ordinary stand-alone karaoke systems, it has three advantages.
First, it eliminates the laser disc or compact disc pressingcost, transportation cost and installation space.
Second, users can sing new songs earlier.
Finally, the information provider can know how manytimes each song is sung.
The information center currently consists of two communica-tion subsystems and 12 HDs, and can store up to 2000 songs.
7. ConclusionThe number of ISDN subscriber lines has increased greatly,
the services using it are mainly G4 facsimile, realtime face-to-face video communication, and file transfer. Multimediainformation services are not so common. Several multimediainformation systems have already been introduced, and mostof them operate either as standalones or via LANs.
The multimedia presentation system is developed to pro-vide multimedia information for public services. Using amodular structure for the center, it can be built economically.In this system, multiple channels are used simultaneously forcenter-to-terminal data transfer, the number of channels de-pending on the type of information provided.
References[1] Iliroshi Ishikawa. Evolving from Narrowband IEEE Corn
munications Magazine, August 1992
[2] Yoshihiro Shimazu and Youichi Kihara. ISDN with Si-multaneous Distribution Function and its ApplicationsPTC '90, January 1990
[3] Ralf Steinmetz. Synchronization Properties in Multime-dia Systems IEEE JOURNAL OF SELECTED AREASIN COMMUNICATIONS, Vol.8. No. 3. April 1990
[4] Information processing systems Open Systems Inter-connection File Transfer, Access and Management ISO8571-1, October 1986
[5] Postel, J.B.; Reynolds, J.K. File Transfer Protocol RFC959, October 1985
[6] System Services Overview Sun Microsystems Inc.
[7) The Waite Group. UNIX papers W. SAMS Sc COM-PANY, 1987
[8] W. Richard Stevens UNIX Network ProgrammingPRENTICE HALL, 1990
[9] Writing Device Drivers Sun Microsystems Inc.
(10] 7 klIz AUDIO-CODING WITHIN 64 KBIT/S CCITTRecommendation G.722, 1988
[11] Japan Generalised Block Truncation Coding (GBTC)ISO/TC 97/SC 2/WG 8 N511, 1987
"Project Lindbergh":Gateway to Public Information Networking
Scott MorganExecutive Director
Southwestern Bell International DevelopmentSt. Louis, Missouri USA
1. ABSTRACT
This paper describes an innovative approach to the developmentand implementation of network architecture's for the InformationAge. An overview of a study undertaken by Southwestern Bell withthe assistance of several equipment suppliers and a subsequenttest bed is discussed. Unique ways of approaching the movementof information for self-healing public networks are outlined.
2. THE PUBLIC INFORMATION NETWORK
2.1 "DIGITAL CITY" STUDY
In a recent study by Southwestern BellTelephone; referred to as "DigitalCity," a plan to address the transitionof the existing network to a publicinformation networking architecturewith inherent self-healing capabilitieswas undertaken. As used in thiscontext, public information networkingrefers to the future networkinfrastructure that will provideaccess, transport, andinterconnectivity for voice, data,image, and broadband communications.
One of the basic assumptions made inthe Digital City study is that a publicnetwork provider has as one of itsgoals to become a public informationnetworking provider. The needs of thecustomers of public network providershave become exceedingly moresophisticated. No longer does oneexpect to provide only locally switchedvoice services but also high bit-ratedata transport as well as video andimaging services. These customerspractically rely on the public networkfor day to day survival. For example,large end users such as financial andbrokerage institutions and airlines canlose significant revenues due tonetwork downtime. Estimates rangingfrom $2 million to $5 million per hourof network downtime for such firms havebeen widely publicized. For thenetwork providers to achieve theobjective of becoming a publicinformation networking company, it mustbe recognized that the current publicnetwork technology, architecture, andrate structures do not allow thepresent network to adequately addressthe changes needed to provide publicinformation networking.
299
The question that must then be asked is"How does one change the currentnetwork infrastructure into aninformation network infrastructure thatcan access and transport all kinds ofinformation as easily as it accessesand transports voice services?" Self-healing is one of many key componentsthat must be include:, within tha publicinformation networking. However,deploying self-healing networks forthat sole purpose may not be the wisestof decisions. Various networktopologies will provide self-healingcapabilities. The key as demonstratedin the Digital City study is theability of the public network providerto use a topology that providesubiquitous access to a multitude ofnarrow and broadband services whileproviding self-healing capabilities.
One of the most common questions askedwhen addressing the transition ofnetworks is, "What service demands willdrive the deployment of this newnetwork?" Will the transport ofmedical images be the driver? Issufficnt bandwidth available for thedelivery of video or high definitiontelevision? But the most probingquestion is, "Will one have a publicnetwork infrastructure in place, in atimely fashion, to meet these needs."The information network can be comparedto the highway system while informationservices can be compared to t carsand the trucks that run over thathighway. The placement of a modernpublic information networkinfrastructure is a necessary step toallow information services to benetworked ubiquitously across ametropolitan area and the world.The question then becomes, "Does onewait for the development of these newservices or does one proceed with theimplement_ tion of a new network
infrastructure?" Also, with thedecision to proceed, do you begin withconstruction of nodal, transport, oraccess elements? The Digital Citystudy answered some of these questionwith surprising results.
The vision of Digital City is to createthe premier Information Age city oftomorrow by providing a modern publicinformation network to an entire metro-market area using state-of-the-arttechnologies and concepts.Technologies that would be used includefiber optics, Signaling System 7,Integrated Services DigitalNetwork(ISDN), Broadband ISDN(BISDN),packet switching, and SynchronousOptical Network(SONET) elements. Theplan envisions the simultaneousdeployment of these advancedtechnologies throughout a market areato make public information networkingcapabilities available ubiquitously.
3. FUNCTIONAL CHARACTERISTICS OFINFORMATION NETWORKING ARCHITECTURE
An information network architecture forthe future should have the following:
Flexibility The networkarchitecture must be serviceready(i.e., it should be rich androbust enough to provide a widespectrum of services at a momentsnotice). A network that providesut.iquitous access to nearlyunlimited bandwidth to the customeris envisioned. This bandwidth willbe provided on a demand basis asopposed to a dedicated circuitbasis. The network will also needto be able to migrate and evolvewith only minimal disruption inservice. It also will have openinterfaces which would make theresources of the network availableto a variety of devices.
Manageability The network must beeasily manageable. This wouldrequire on-line, real-time circuitprovisioning and dynamic circuitsetup and tear down for facilitymanagement. Switched (shared)resources will be managed viaflexible and rapid routingtechniques. This will maximizenetwork utilization while minimizingforecasting and traffic engineeringeffort. In order to maximizemanageability, there should be amaximal integration of services on atransport level to further simplifyOperations, Administration, andMaintenance (OA &M).
300
Fault Tolerance The network, i.e.,switching and transport, must beself-healing. All faults should betransparent to the customer.
Cost Effectiveness Mostimportantly, the networkarchitecture must be cost effectiveand give excellent priceperformance. this implies amongother things low unit cost, gracefulgrowth and rearrangements, and theability to drive distance elementsout of the cost structure.
4. PHYSICAL ARCHITECTURE
The public network that many of us arefamiliar with provides a user with theability to move information withrelative ease. It can best bedescribed as a point-to-pointchannelized traffic network. Thenodes, in this case Central or Endoffices, are connected by high capacitytrunks in a point-to-pointarchitecture. This type of network isoften referred to as a "Star-Mesh"topology(see Figure 1). In existencefor over a hundred years, the "Star-Mesh" network performs its job quitewell. The requirement to deliver voiceor voice grade services places no undueburden on this type of network. Thetrunks that connect these nodes wereoriginally and up until a few years agobased on metallic or copper technology.In fact, if it was not for operationaland maintenance savings these trunkswould most likely have remainedmetallic. However, with the need tomove new, more bandwidth intensivetypes of information, i.e., imaging,video, and data, a new transport mediabecomes essential. The aim of theDigital City study and ProjectLindbergh is to establish a fiber basedtransport infrastructure. Fiber, themedium of choice, is capable ofhandling large amounts of bandwidth ata very low cost. Once the initialphysical fiber is deployed, it does nothave to be reinforced when additionalcapacity is required. Therefore, theincremental facility cost associatedwith each DSO channel is reduced as thetransmission system speeds andutilization increase. Figure 2illustrates this cost advantage offiber facilities over traditionalcopper Tl facilities.
A 100 to 1 facility cost reduction perDSO can be gained at high-fiberutilization levels. With theavailability of higher bit rate (andmore cost-effective) systems, coupled
with a high utilization associated withring architectures, analysis indicatesfurther cost savings. This attribute,coupled with the self-healingcapabilities offered ringarchitectures, led to structuring thetarget architecture around ringtopologies.
The next question to be answered is thetype of ring topology that is bestsuited for a given metropolitan area.Economic analysis indicates multi-ringconfigurations could yield significantcost savings over single ringarchitectures.
The key feature of the Digital City andProject Lindbergh architecture, asdepicted in Figure 3, is that all theservice elements and other networkresources will be connected to thefiber backbone, "Transport Network."These elements include variousswitching elements, network data bases,service nodes, operations supportcenters as well as gateways to othernetworks and enhanced serviceproviders.
The ring architecture will also beextended into the distribution networkto serve selected end users. Thisarchitecture will allow for efficienttransport of the entire spectrum ofserves from Plain Old Telephoneser....:e (POTS) to broadband. It isenvisioned that this ring mayultimately be non-channelized,connectionless, and fully packetizedfor traffic that is today circuitswitched. The endpoints of the networkprovide access to the network fromcustomer or other networks. Thesepoints are defined as Access Nodes.Switching nodes provide for theconnection of "circuits" and/or"channels." i.e., DSO, DS1, or DS3, onan automated basis, service nodes willprovide, service features/capabilitiesbased on a combination of softwareparameters (translations) and signalinginformation.
Until high-speed protocols (which wouldmake multi-gigabit connectionless orclear channel single rings possible)become economical and feasible, theFocused Bandwidth concept, as shown inFigure 4, can be used to provide amultitude of services, such as ISDN andMANs, and manage large bandwidthnetworks. This is because the ringwith focused bandwidth provides for thetransport integration of all services.For example, Switched Multi-megabitData Service (SMDS) as provided by MANs
301
and their interconnection via BISDN ordirectly via the fiber node will besupported.(see Figure 5)
MAN nodes would communicate by means ofdedicated DS3 (or SONET) channels onthe ring (i.e., focused bandwidth).Packets or Cells will be transported onthe ring transparently. In addition,focused bandwidth offers the ability tooffer services ubiquitously. Forexample, in the case of ISDN, acustomer can be anywhere in the marketarea and still be served from any oneof a select number of offices merely bytraversing the ring (see Figure 6).
In summary, the recommendedarchitecture for Digital City andProject Lindbergh, shown in Figure 3,is a multi-ring "Transport Network"connecting smaller access rings.Switch Node, Service Nodes, enhancedservice providers, and gateways withexisting star-mesh networks. FocusedBandwidth will be used in an interimperiod for the delivery of bothbroadband and narrowband services.
5. IMPLEMENTATION STRATEGIES
Southwestern Bell is currently planningan ambitious trial of advancedtelecommunications in the St. Louisarea. The trial is called ProjectLindbergh, echoing the technicalachievements embodied in the Spirit ofSt. Louis and reflecting the intent todemonstrate telecommunication servicesand applications that have not beenshown before.
This project is a combined effort ofSouthwestern Bell, a ]imited number ofcustomers and various vendors oftelecommunication's equipment. Thesevendors are in the process ofdeveloping prototype equipment thatwill deliver such technologies andservices as Frame Relay, ISDN, andBroadband ISDN.
The trial uses fiber optics andadvanced switches installed in theSouthwestern Bell Telephone network toserve advanced applications of keycustomers. The spectrum ofapplications proposed for the trialextend from simultaneous voice and dataconnections to switched full-motionvideo and high resolution imaging.
It is expected that Project Lindberghwill last through 1994. SouthwesternBell customers who have announcedparticipation in the project are
Mallinckrodt Institute of Radiology(MIR)/Barnes West and Monsanto.
6. CONCLUSIONS
The Information Age is upon us and somemomentous decisions must be made. Howa nation responds to the demands of theInformation Age will impact its futurecompetitiveness well into the nextcentury. The new public communicationsinfrastructure which must be built isclosely analogous to a nation's highwayand airport systems. Just as thetransportation infrastructure was a keyto leadership in the Industrial Age,the communications infrastructure willbe the key to competitiveness in theInformation Age.
302
el,
Present TransportArchitecture
16
14
12
10Cost
Lhit
Per 8DSO
Mle
420
Star-Mesh
0%
Fig. 1.Transport Architecture
Future TransportArchitecture
Setf-HealingFiber Rings
20% 43%
Wizatioa
&Pk
Fig. 2. Economic Trends - Fiber vs. Copper
303 J.
DistributedAccess
DatabaseProviders
FaultProtected
Aggregate like traffic
Smart Fiber Nodes
Fast Provisioning
Flexible Routing
Evolvable
Fig. 3. Digital City Network Architecture
Fig. 4. Focused Bandwidth
304
Fiber
Copper
--/r DigitalX-Ray
High-SpeedWorkstation
ISDNHost
DigitalX-Ray
Node
Node
Fig. 5. Broadband Capability
Fiber
RingNode
Fig. 6. ISDN Functionality
305
Node
LAN
0 0
HostComputer
ISDNCustomer
Remote
D4ChannelBanks
ISDNCustomer
BROADBAND DELIVERY ACROSS THE LAST MILE
Dr. Reg A. KaenelWavePhore, Tempe, Arizona USA
ABSTRACT
This paper teaches the technique of transparently piggy-backinghigh-speed data over television signals for the purpose of cost-effectively overcoming the stifling broadband-access problem in the
local loop (which is often referred to as the last mile oftelecommunications, where this problem is naggingly critical), and
the high cost of long-distance broadband transmissions, especiallywhen operating in a bursty fashion.
An Innovative Multiplexing Technology forTelevision Signals
WavePhore, Inc., developed a cost-effective technique for transparentlypiggy backing high-speed data ontelevision signals. This technique wasnamed Data-Over-Video multiplexing. Itis functionally similar to theconventional technique of transmittingdata (e.g. TeleTex) during the verticalblanking-interval of television signals(VBI), except that it does such piggy-backing at high speed and withoutinvolving this interval or any otherfunctionally significant part of thissignal (Figure #1).
It accomplishes this piggy-backingby inserting data at baseband, whileavoiding the VBI as well as the front andback porches of television signals.Thereby, it relies on technicalprinciples developed by thetelecommunications-industry over theyears for the purpose of ensuring theefficient use of transmission capacities.Detail can be witnessed and discussed atWavePhore's headquarters in Arizona.
But unlike conventional transmissionsystems, this data is encoded by a
proprietary (as well as patented)technique that makes the encoded datainvisible to commercial television sets.
TransmissionTelecommunications
Options for
Today, telephone circuits reachvirtually everyone in the industrializedworld. These circuitsl were originallydesigned to selectively interconnect anytwo telephone-subscribers by channelswith a capacity of 3 kHz in spectralbandwidth, suitable for the transmissionof electronic facsimiles of acousticalspeech signals. Circuit-switching is theselection mechanism by which thesechannels can be physically interconnectedon demand at switching -nodes (calledswitching-centers) for the duration ofthe connection.
Most contemporary telephone circuitsare implemented from pairs of twistedcopper wires, especially in the local
306
loop which connects the subscribers withswitching centers. Over short distances,these pairs are capable of supportingdata rates into the MBit/sec range, usingmodern modulation and encoding techniqueswhich are embodied in modems2.Bandwidth-restrictions are often splicedinto these pairs. This is done mostly inrural areas for the purpose of improvingtransmission quality and reducing cost i
But these non-contiguous pairs of wirescan no longer support those higher datarates.
Exploiting the high bit-ratecapability of pure copper pairs of wires,telephone circuits are beingelectronically enhanced to offer what isknown as Integrated Services DigitalNetwork (ISDN) service. This serviceprovides a pair of 64 kBit/sec bearer-channels, plus an 8 kBit/sec datachannel, amounting to a composite bi-directional throughput of 136 kBit/sec.It is accomplished by installing suitablemodulation/multiplexing/encoding devicesat both ends of each wire-pairinterconnecting subscribers and switchingcenters.
Packet-switching is a differentswitching-mechanism. Here, messages(usually data4) are routed at switchingnodes according to their destination-labels. This is akin to the postalservice handling mechanical packages. Itgave rise to value-added data-networks(VANS) transporting electronic packages.Today, such VANs are serving hundreds ofsites and users across the nation by wayof conventional telephone circuits.These VANs are eminently suitable forrequesting information, authoringdocuments, and entering edit data fromremote sites. But because of theirreliance on telephone circuits whichlimit the data-rate to typically 2400Bit/sec, they are quite inadequate forreturning full pages of information, suchas modern multi-media objects5.
Only major facilities (e.g.universities and libraries) and high-density communication centers (e.g.cities) are interconnected by broadbandcircuits. These circuits may have a
spectral width in the hundreds of MHz in
order to equip them with the capacitynecessary for transporting the expectingtelecommunications traffic in variousforms of multiplexing6. Such a capacityusually makes those centers hubs of
broadband telecommunication. And theirbroadband capability allows them tooperate telematic libraries as well as tobecome brokers for information theyobtain from elsewhere.
But in the local loop, the onlyviable pervasive high-speed transmission-options are the television networks (i.e.over-the-air broadcasting, cable-television, as well as satellitecircuits) which are intrinsically broadband and have achieved a level ofpervasiveness comparable to that of thetelephone. Some networks provide 6 MHztelevision channels (e.g. those used byover-the-air-broadcasting stations),others carry channels of hundreds of MHzin spectral width (e.g., cable-television). Importantly, these networksexist today even where the much slowerISDN services are not yet available. Allother options of the local loop are notpervasive since they consist mainly ofcustomized point-to-point circuits (suchas micro-wave links) which are usuallyunduly expensive and costly to maintain.
How to Switch: By Broadcasting LabeledMessages
Virtually all existing televisionnetworks are of the broadcasting type.After all, these networks were originallydesigned to uniformly supply allsubscribers with the same televisionsignals.
But broadcasting media are also thefundamental mechanism for selectivelyinterconnecting subscribers who areconnected to these media (known asswitching). This is accomplished bylabeling each message injected into thesemedia, where each label designates theintended destination, in combination withusing receivers that filter out only themessages addressed to them.
Accordingly, broadcasting networkscan intrinsically satisfy all types ofinterconnection requirements, from thepoint-to-point requirement of basictelephony to the point-to-multipointrequirement of broadcasting.
Application of WavePhore's MultiplexingDevice for High-Speed Transmission OverBroadband Television-Networks
Most television-networks havetransmission-capacities that lay idle.These idling capacities are usually onlyportions of television-channels (e.g. inthe time-domain during the blankinginterval, or in the frequency domain),rarely whole channels since thesechannels are becoming increasinglyscarce. WavePhore's proprietary data-over-video technology cost-effectively
307
harnesses idling portions of thefrequency domain. And it does this in auniquely broadband fashion, therebyproviding a high-speed data-channeltransparently on top of televisionsignals with an area-coverage equal tothat of these signals.
Today, data rates of about 400kBit/sec have been realized. This isnearly three times the composite data-rate of ISDN. But it is available today,even where ISDN is not. And it offersthe promise of achieving data rates ofabout 1.5 MBit/sec (i.e. T1) in the nearfuture, which ISDN does not.
For sure, investments in broadbandlocal loops will arrive with theinstallation of ubiquitous optical fibersand the provision of B -ISDN (broadbandISDN service). But this will take atleast another decade rind when it occurs,it will not instantly obsolete existingfacilities because of the massiveinstalled base of equipment depending onthem. This ensures that applications ofexisting facilities will have a usefullife way into the next century. And itprovides an attractive (i.e., cost-effective) window of opportunity for thedata-over-video technology.
Illustrative Applications of ThisMultiplexing Technology
We have been pursuing severalapplications of the WavePhore Data-Over-Video technology where opportunities forsignificant improvements through thepervasive high-speed delivery of datawere identified. One of theseopportunities is targeted at enhancingthe educational process by deliveringlibrary-material in user-friendlyfacsimile form to wherever it is needed,and by adding the personal touch (ofsmall classes) to lectures with massaudiences (e.g. televised lectures).This project is a joint venture betweenWavePhore, inc., of Tempe, Arizona, andthe Arizona Department of Education. Itwas submitted to the National ScienceFoundation (NSF) for US governmentsupport. The other opportunity is aimedat the health-care field where high-speeddelivery of imaging data can be criticalto saving lives.
An Initial Application: Step Toward theTelematic Library
Liberating Stand-Alone Applications.
Most computer applications havetheir origins in stand-aloneinstallations which operate in isolationfrom the outside world. Telematiclibraries have not yet graduated fromthis stand-alone phase of development.With the emergence of high-performancemulti-media applications, the need hasintensified to provide access to theseinstallations from remote sites,
liberating them from their spatial
confinement.This need is fueled by the hard
reality that computer-assisted activitiesare becoming an essential part of moderneveryday life. They rely on the use ofinformation contained in emergingtelematic libraries, whose information is
electronically combined to create
composite products of enhancedsophistication. But as of yet, theselibraries go largely untapped by remotemeans. A major reason therefore is thelack of telecommunication facilities by
which bursts of high-speed data can be
cost-effectively shipped into everycorner of cities and out to remote areas.
User-friendly multi-media displays dependon broadband communication.
The man-machine interfaces of computerinstallation have become much friendliersince the early days of data processing.And people are beginning to expect thisfriendliness from all telematic systems.But it can be offered at remote sites
only with difficulty becausetelecommunication services continue tolag needs7. This is one of the dominantreasons for the isolation of those
installations.The user-friendliness has two main
components. One of them are foolproof"windows"8 within which computer-
responses to keyboard entries are
embedded. On the frames of thesewindows, menus of available operators aswell as functions are meaningfully listedby graphic symbols known as icons, bydescriptors such and mnemonics, or bynames. These interfaces are significantcomponents involved with the telematic
man-machine interactions which are
growing in importance as computersunwittingly shape our lives.
The other component is theembellishment of responses to reflect theimpact of computer-entries. This usuallyproduces large amounts of response-datato even the simplest of entries from thekeyboard. For example, the entry may bean edit command during an authoringprocess, a query during an information-retrieval task, or a change of onevariable during a spread-sheet what-ifanalysis. The response thereto may bethe appearance of a whole page of textimpacted by the edit-entry, pages of textretrieved, or a new forecast produced bythe change of the variable.
But this user-friendliness has asignificant price attached to it, namelythe need for transferring reams of high-speed data. High-speed communicationlinks between the man-machine interfaces(e.g. display terminals) and the hostcomputers are required to effect thesetransfers. While such links are presentwith stand-alone systems where mostapplications are developed, they areusually absent to remote sites because of
308
the difficulty of installing them overdistance. As a result, this user-friendliness is still largely confined tostand-alone systems, most notably
personal computers as well as their
higher performance cousins, the work
stations.
Qualifying and Quantifying This BroadbandNeed.
Delivery of data in a user-friendlyform depends on telecommunicationinfrastructures that are high-speed (i.e.broadband) from the source of informationto the recipient of this information.But in the opposite direction, the datarate can be low-speed since it mustmainly support inquiries as well as datafrom a keyboard.
Such asymmetrical man-machineinteractions are an important subset oftelematic functions. In turn, theyinvolve a specialized subset of
telecommunications which is clearlygrowing in importance. In this subset,recognizing the data-rate skewednessfacilitates implementation of telematicsystems.
In the direction toward user-friendly interfaces and from computers,the data-rate is determined by the largeamount of data used for generatingembellished windowed displays and thereal-time need for responding to keyboardentries promptly. This calls for a data-rate capable of supporting effects offull-motion television, even through theaverage bandwidth requirement is muchless than that, requiring data-rates inthe MBit/sec range. This rarely attainedpeak-rate is necessary to accommodatesuch full-motion effects as flipping apage of information (i.e., switchingbetween display scenes) in response to akeyboard input, or when showing a multi-media television episode. In fact, adata-rate comparable to that of real -time9 High Definition Television (HDTV)is required if the user-friendly high-resolution responses are to occur in fullreal-time. Band-width-compressionschemes that rely on removal ofredundancies without compromise in user-friendliness can do little about this,making broadband circuits unavoidableunder such uncompromising conditions.Only compression schemes that duplicateeither effects by decomposing images intosuitably chosen graphic primitivesl° orprocesses that produced the images ii
reduce the amount of data needed tospecify a display.
Backing of; from the full real-timerequirement is a frequently usedcompromise for reducing the bandwidthrequirement. The best known applicationof this compromise is probably thefacsimile machine which sends thepicture-information slowly over anextended period of time. another are thefull-motion compression devices which
relax the data-rate requirement bystatistical averaging. But hisstatistical processing delays each imageto be displayed which can become quiteannoying. Only extensive experimentationcan reveal the acceptability of certaincompromises which, in turn, can lead tonew bandwidth-compression schemes. Thismakes the expeditious accessing of multi-media facilities from remote sites amatter of timely research anddevelopment.
In the opposite direction from thoseinterfaces and to computers, the datarate can be low-speed since it mustmainly support inquiries as well as datafrom a keyboard (such as requests fordata or edit commands). The ratesnormally achieved on standard telephonelines (i.e. 1200/2400j/9600 Bit/sec) andother audio circuits are quite adequatefor these purposes.
System Architecture.
In this application, a WavePhoremultiplexing device is installed at thehead-end of the local televisiondistribution network covering each areato be accessed (Figure 2). No re-assignment of facilities is requiredsince this device transparently piggy-backs data on television signals.
Each of those head-ends is thenconnected by a point-to-point broadbandcircuit to the nearest telematic sourceof multi-media information from whominformation is ordered by way of a VANnetwork (such as InterNet). This sourcemay be a telematic library (such as thecomprehensive Library of Congress) whichprovides electronic facsimiles ofdocuments as well as other mechanicalcarriers of information, usually ondemand. It may include intermediarybrokers (such as a local telematiclibrary), which information they obtainfrom major libraries but save locally forquick access. By temporarily savingcopies of information requested fromwithin the region they serve, these localbrokers can often supply regionallyrelevant information from their temporarysmaller storage more expediently thandistant information-sources can12. Thisadvantage is accentuated by the fact thatmany requests are duplicates of previousones because much of the information-needs are locally stimulated (e.g. bylocal news events, announcements, orclass-assignments). Moreover,interconnected networks of such brokersrelieves communication traffic, whichrelief contributes toward avoidance ofdisruptive traffic congestion.
In turn, each subscriber is equippedwith a demultiplexing device by which heretrieves the requested data fromtelevision signals. This device may bedirectly connected to a personalcomputer. To serve many computerstations, it may be connected to a
gateway of the subscriber's local-area
309
network by which he also accesses the VANused for ordering library material.
Fall-out From This Project
Among other benefits, thisapplication will demonstrate thatrelevant broadband local distributiondoes not need to wait for technologicalbreakthroughs nor massive investments innew infrastructures. Additionally, itwill reveal how this technology can beused to best enhance accompanyingtelevision material13 or to simplyprovide additional broadband informationseparately14.
Another Promising Application: MedicalImaging
The clarity of images from CatScanequipment obviates the need to haveCatScan images read by specializedradiologists. Elimination of thisintermediary has made CatScan a quick-response diagnostic tool, provided thesurgeon is on site where the images aredisplayed. This quick response may becritical for saving lives, such as inneuro-surgery.
This life-saving capability can befully realized only if the medical imagescan be expeditiously received by thesurgeons, wherever they may be at thetime of the emergency. But to do this, apervasive high-speed capability is neededfor the delivery of these images,especially through the local loop wheresurgeons and hospitals are usually co-located.
In this application, a WavePhot.multiplexing device is installed at thehead-end of the local televisiondistribution network covering thehospital-area to be accessed. The head-end is connected by a point-to-pointbroadband circuit to the hospital wherethe imaging equipment is located. Inturn, a demultiplexing device isinstalled at each of the surgeons'offices by which they receive the imagesaddressed to them 5. To be mosteffective, these images are bestelectronically saved by these surgeons(e.g. by a commercial VCR) in order toprovide them with the time needed forrendering reliable diagnosis.
CONCLUSION
Clearly, the Data-Over-Videomultiplexing technique can cost-effectively overcome the stiflingbroadband-delivery problem of the localloop (which is often referred to as thelast mile of telecommunications). It canalso reduce the cost of long-distancebroadband-delivery of data by harnessingexisting resources that would otherwiselay idle.
We believe that many projects,responses to requests-for-proposals, aswell as existing facilities couldsubstantially benefit from thistechnique. Factoring this technologyinto these improvement-opportunities willundoubtedly stimulate innovations thatmay otherwise be deferred for lack ofknowing of the availability of thistechnology.
1. These circuits were designed to have aspectral width of 3 kHz. Clearly, this width istwo orders of magnitude less than the widthcarved out by the data-over-video multiplexingtechnique. But since this width is indicative ofthe transmission capacity of circuits, thisreveals that this data-over-video technique has atransmission capacity that is two orders ofmagnitude larger than that of traditionaltelephone circuits.
2. Conventional modems support data-rates of300, 1200, and 2400 Bit/sec over the switchedtelephone plant. Modems with equalizers thatcorrect transmission distortions typicallyachieve 9600Bit/sec. Asymmetrical digitalsubscriber line (ADSL) modems achieve 1.5MBit/sec, but only for short pairs of copperwires without bandwidth-restricting insertions.
3. Loading coils are inserted into these pairsfor the purpose of improving their transmission-quality for speech-signals over greaterdistances. Frequency-band limiting multiplexorsare inserted to reduce cost by subdividingbroadband cables instead of stringing separatewires. These inserts seriously impede the data-rates achievable over those pairs of copperwires.
4. This data can be representative of samples ofanalog signals, such as speech or video. Butaccording to the Nyquist sampling-theorem, thesesamples completely specify these analog signals,provided the rate of sampling exceeds twice theinverse of the cut-off frequency of thesesignals.
5. High-speed VANs have been experim ntallydemonstrated. Some of them uss a priming-mechanism at each switching node during the callset-process for the purpose of expediting theforwarding process for each packet there. Thispriming set-up remains in effect for the durationof each connection, similar to circuit switching.Because of this similarity, this scheme is knownas "virtual circuit-switching".
6. The multiplexing techniques used are usuallyof the frequency-division or time-division type.
7. Only the ubiquitous optical-fiber network canfinally put an end this chase, at least for awhile. Until then, data will continue to befrequently shipped in bulk by mechanical means,such as magnetic tapes, floppy disks, and compactoptical disks.
8. Invented by Xerox Data Systems and commercial-ly pioneered by Apple computers, Inc.
310
9. Commercial HDTV is a one-way televisionservice with no real-time requirement. Further-more, adjacent video-frames of HDTV differ onlyslightly most of the time (after all, adjacentframes usually have the same background). Thesetwo realities allow the application of averagingschemes that reduce bandwidth. This is notpossible with user-friendly multi-media appli-cations because they have a fierce real-timerequirement and adjacent frames will becompletely different most of the time!
10. One of these primitives are the so-calledFractionals. They rely on the fact that many ofnature's appearances are random combinations ofthe same features in different sizes and withdifferent orientations.
11. E.G., manipulations of graphic primitives,such as the movement of the chalk when writingon a blackboard.
11.
12. In this instance, these brokers act akincache memories which have been successfully usedin computers for speeding up their performance.
13. For example, to provide a capability forreplaying lecture-segments and supplyingexplanations on demand.
14. For example, for the high-speed delivery ofinformation requested by way of a value-addednetwork (such as InterNet).
15. Such a filtering capability by addresses isessential to eliminate clutter of irrevelant datathat would otherwise obscure essential images.
ci -4
THE MARKETING CHALLENGES OF TELECOMMUNICATION SERVICES IN THAILANC
AUTHOR:
Mr. Prateep Thirati, M.A.
Chief, Corporate Marketing Section
Corporate Planning Office
Telephone Organization of Thailand
Bangkok, Thailand
ABSTRACT:
The rapid growth of the Thai economy indicates a
great demand for telecommunication services. This
paper presents an overview of past, present and
current trends in the telecommunication service
industry in Thailand.
1. INTRODUCTION
Thailand is located in South-east Asia, which
has an area of 513,115 square kilometers and apopulation of approximately 56.6 million (Sept.
1991). The most important ethic minority are
Chinese. Other minority groups include Malays,
Kampucheans, non-Thai hill tribes and some
Vietnamese. Thai is the national language and
Buddhism is the national religion. Thailand is
an agricultural country. However, with the
advent of industrialization in the country,the
export and tourism industries contribute to the
main revenue of the country.
Thai average GDP growth rate during 1981-1987
was 6.1 percent but during the years 1988-1990
it was 13.2, 12.0 and 10.0 percent respectively
(see Table 1 ).
TABLE 1 THAILAND'S ECONOMICS PERFORMANCE
YEAR % GDPGROWTH
FOkEIGN TRADEVOLUME
(bil.baht)
POPULATION(mil.per.)
OUTGOINGOVERSEA
TEL. CALLfoil.min.)
1986 4.9 477.4 52.7 19.4
1987 9.5 640.0 53.6 27.7
1988 13.2 899.3 54.5 42.4
1989 12.0 1.159.6 55.5 64.7
1990 10.0 1.421.1 56.3 89.9
1991 8.2 1,688.1 56.9 NA
NA Not Available
BEST COPY AVAILABLE 311
The rapid economic growth has caused a shortage
in infrastructure telecommunication service.
This paper describes the past and present status
of telecommunication services in Thailand and
also the Thailand s ability to fulfill the
demand for telecommunications and it's
progress to date.
2. TELECOMMUNICATION SERVICE SCENARIOS
2.1 TELECOMMUNICATION SERVICE STATUTES
Telecommunication services in Thailand are
governed by the statutes of the Radio
Communication Act 1955 and the Telegraph and
Telephone Act 1934. The Radio Communication
Act 1955 has policies for radio communication
services and the use of radio frequencies.
This Radio Communication Act 1955 is also
related to the Radio and Broadcasting Act
1955 and the Mass Communication Organization
of Thailand Act 1977. The Mass Communication
Organization of Thailand Act 1977 controls the
Mass Communication Organization of Thailand
(MCOT) which provides broadcasting services to
the public in general.
The Telegraph and Telephone Act 1934 has
policies concerning the telegraph and telephone
services which are a government monopoly for
the benefit of the general public. This Act is
also related to the Telephone Organization of
Thailand Act 1954, by which the Telephone
Organization of Thailand (TOT) was established
and the Communication Authority of Thailand Act
1976, by which the Communication Authority of
Thailand (CAT) was established.
FIGURE I : COMMUNICATION STATUTE STATUS IN THAILAND
ITelecommunication Services
Radio Com. Telegraph and Telephone
Act 1955 Act 1934
I 1
Radio &
Broadcabting
Act 1955
MCOT
Act 1977
CAT
Act 1976
TOT
Act 1954
I MCOT I CAT TOT
2.2 TELECOMMUNICATION PROVIDERS
At present, telecommunication services in
Thailand are provided by two state enterprises
Telephone Organization of Thailand (TOT) and
the Communication Authority of Thailand (CAT).
These state enterprises are under the control
of the Ministry of Transport and Communications.
This Ministry also controls the Post and
Telegraph Department (PTD) which is responsible
for controlling and supervising radio frequency
usage.
TOT services are mainly domestic telephone
services, related services and also including
long distance calls to neighbouring countries
such as Malaysia, Loas and Myanmar. CAT services
are postal services, international and some
domestic telephone services. Hence these two
organizations are in competition with each
other in some areas of service such as mobile
telephone and pager service. Table 2 and 3
present list of services provided by these
two organizations.
TABLE 2 : THE TOT'S SERVICES
Telephone Services :
Domestic Call Service
Neighbouring Countries Call Service
(Malaysia, Loas and Myanmar)
Wide Area Call ServicePublic Coin Phone (Local & STD)
Public Card Phone (Prepaid card)
Public Train Phone (Coin Box)
Rural Public Long Distance Call
Radio & Mobile Telephone Services :
Multi-Access Radio Telephone
Multi-Access Radio Mobile Telephone
NMT 470 Cellular Mobile Telephone
NMT 900 Cellular Mobile Telephone
"Phone Link" Service (Pager Servic )
"Page Phone" Service (Pager Service)
"Fonepoint" Service (CT-2 Service)
Data & Lease Circuit Services :
Trunk circuit and Inter-City Service
(Lease Cercuit)
DataNet ServiceISBN Service (Voice, Data & Image Via
Satellite)
Audio-Visual Service :
Teleconference Service
Planned Services :
- ISDN Service
Videotex Service
- Trunk Mobile Telephone Service
- Credit Card Public Phone Service
- Teleport Service
TABLE 3 : THE CAT'S SERVICES
International Telephone Services :
International Subscriber Dialing Call
(ISD)
International Operator Assisted Call
* Station Call
* Personal Call
* Collect Call
* Credit-Card Call
Toll Free Call Service
- Executive Telecard (CAT ETI)
Public Credit Card Phone
Domestic Telephone Services :
Radio Telephone Service
Trunk Mobile Telephone Services
Public Radio Communication Service
HF Radio Telephone
VHF Mobile Radio Telephone
- UHF Mobile Radio Telephone
AMPS 800 A Cellular Mobile Radio
Telephone
AMPS 800 B Cellular Mobile Radio
Telephone
Private Radio Communication
Video Signal Conversion Service
Telecommunication Mobile Unit
- Maritime Mobile Radio Service
"Pack Link" Service (Radio Pager)
"Easy Call" Service (Radio Pager)
Data & Lease Circuit Services :
Domestic & International Lease Circuit
* Telegraph-Grade Leased Circuit
* Press Bulletin Service
* Voice-Grade Leased Circuit
International DATEL Service
- International Database Access and
Remote Computing Service (IDAR)
Super Telex (Domestic & International)
Telex Services :At the end of 1991, Thailand had 1.9 million
- Domestic TelexInternational Telex
* Marine Mobile Service
* Private Telex
* Public Telex
Telegraph Services :
Phototelegraph Services :
- Domestic & International Service
- International Broadcast Service
Document Facsimile Services :Bureaufax (Domestic & International)
- International Telefax
Other Services :International Program Transmission
Service
- International TV Transmission
ITU Cards Communication Service
Monetary Service
Planned Services :International ISDN Service
Teleport
2.3 TELEPHONE SERVICES
2.3.1 BASIC TELEPHONE SERVICE
TOT is responsible for providing basic domestic
telephone service. Despite rapid economic growth,
government policy regulates budget stringently,
TOT cannot cope with the rising demand from the
public. In 1991, the waiting list numbers up to
more than 1.3 million customers. Figure 2 shows
the development of basic telephone service
compared with the demand in the past.
C43 0
z
FIGURE 2 : DEVELOPMENT OF BASIC TELEPHONE
on3.4
3.2
3
2.
an2.12.2
2
to
1.2
RAOA.
1983 84 BS 86 87 88 89
YEARa LINE CONNECTED DEmotme
90 1991
313
telephone lines. The penetration rate of 2.74
line per 100 population is extremely low.
TOT plans to increase the penetration to 10
lines per 100 population in 1996 according to
the Seventh National Economic and Social
Development Plan 1992-1996 (7 th NESDP 1992-
1996). At present, TOT along with two private
companies, namely Telecomasia Co.,Ltd. and Thai
Telephone and Telecommunication Co.,Ltd. planto install two and one million telephone line
projects in the Bangkok Metropolitan Area and
the provinces. Those two projects, together
with TOT's own projects, will be completed in
1996. There will be about six million lines
throughout the country. These lines will serve
the demand and respond to the 7 th NESDP
1992-1996 successfully. The following table
shows TOT s demand forecast till the year 1997.
TABLE 4 TELEPHONE DEMAND FORECAST
YEAR DEMANDFORECAST(mil.line)
POPULATION(alil.Per.)
D/N
1992 3.16 57.99 5.46
1993 3.76 58.81 6.41
1994 4.47 59.62 7.50
1995 5.24 60.43 8.67
1996 6.11 61.24 9.99
1997 7.08 62.02 11.43
D/N PenetratIon per 100 population
THE TWO MILLION - PHONE - LINE PROJECT
On August 2,1991, TOT granted a 25-year
concession to Telecomasia Co.,Ltd. to install
and operate the network in Bangkok MetropolitanArea with exclusive rights for the first five
years. This project will invest about 80
billion baht. Telecomasia Co.,Ltd. can provide
the first lot of telephone lines in October 1992
and the rest will be finished by the year 1996.
THE ONE MILLION - PHONE - LINE PROJECT
On July 2,1992, TOT also granted a 25-year
concession to Thai Telephone and Telecommunica-
tion Co.,Ltd. to install and operate a network
in provincial areas with the same exclusivity
rights as Telecomasia Co.,Ltd. The total
investment of the project is estimated to be
about 40 billion baht. The company will
complete the installation in the year 1996
with the first lot of 220,000 lines in early
1994.
-
TOT'S OWN PROJECT
To achieve the target by the year 1996, TOT
will do a special project to install 300,000
telephone lines throughout the country. This
project will start in 1994 and be completed by
1996.
When all of these projects are completed, TOT
will have around six million telephone lines
throughout the country, a penatration of
approximately 10 lines per 100 population.
2.3.2 PUBLIC PHONES
2.3.2.1 COIN PHONES
TOT provides public coin telephones on a
twenty-four hour service accommodating the
public at all levels. The most up-to-date
model introduced is a multi-size coin publictelephone which can accept four kinds of coins-
the small, medium sized one baht and the new
five baht as well as ten baht coins. These
public phones can communicate within the
immediate locality and long distance within
Thaiand and to Malaysia. There are 27,266
public coin telephones now in service.
2.3.2.2 CARD PHONE
TOT has granted a ten years concession to a
private company, Advanced Information SystemsCo.,Ltd., to provide pre-paid card phones to the
public. It launched the service on May 4,1991.
There are 948 installed sets in service
throughout the country and there will be 11,500
sets by the year 2000 according to the contract.
2.3.2.3 CREDIT CARD PHONE
The credit card phone is an international public
call via International Subscriber Dialling (ISD)
system. Users can use VISA, MASTER, JCB or
DINERS card. This service is provided by CAT.
There are 10 sets in service and there should
be 40 sets throughout the country by the end of
1992.
2.3.3 ISDN SERVICE
Thailand plans to launch the ISDN (Integrated
Service Digital Network) service on a commercial
trial around the second quarter of 1993.
One thousand five hundred Basic Access Interface
(BAI) and 100 Primary Rate Interface (PRI)
will be deployed on an overlay basis in the
metropolitan area and some major cities.
314
2.4 WIDE AREA TELEPHONE SERVICE
Wide Area Telephone Service both for domestic
and international calls has been in service
since 1990. At present, the service can be
subscribed to only in the Bangkok Motopolitan
Area and the ten major cities. There are about
100 customers in the network-about 80 in the
Bangkok Metropolitan Area and the rest scattered
in ten major cities.
2.5 CELLULAR MOBILE TELEPHONE SERVICE
The mobile phone has been very popular since
its launch in 1986. It is not only handy and
comfortable while travelling but also for
situation where telephone services are not
being provided. TOT and CAT are the two
organizations which provide this service.
On July 8,1986 TOT introduced the first NordicMobile Telephone System with 470 MHz.(NMT 470)
nationwide and also on February 25,1987, CAT
introduced Advanced Mobile Telephone System
with 800 MHz. (AMPS 800A) predominantly in the
city area. At present subscriber number is
around 50,000 and 45,000 respectively.
In September 1989, TOT granted a concession to
Advanced Info Service Co.,Ltd. (ADVANC) to
introduce Nordic Mobile Telephone 900 MHz.
(NMT900) service. There are now around 80,000
subscribers. This system will be developed
into a Grobal System Mobile Phone (GSM ) in
early 1994.
In November 1991, Total Access CommunicationsCo.,Ltd. (TAC) with a concession granted by CAT,
launched another services names "World Phone"
system (AMPS 800B). There are .',ow around 55,000
subscribers. This system will be also developed
into a digital system in 1994.
At present, the total number of subscribers is
around 230,000 and is expected to reach 275,000
by the end of 1992. The table below shows the
market share of each system.
TABLE 5 : CELLULAR MOBILE TELEPHONE SERVICES
SYSTEM OPERATOR INAUCURATION SUBSCRIBER
NMT 470 TOT 3u1.1986 50.000
AMPS 800A CAT FPb :987 45.000
NMT 900 Advanced :nr :r CeP 1980 80.:r3ServiceCo.,Ltd.
(20yr.concession:TOT)
AMPS BOOB Total Access Nov 1901 55.300Communication
Co.,Ltd.115yr.concession
:CAT'
2.6 PAGER SERVICE The providers of data communication services
are summarized in the following table.
The one-way incomming telecommunication service
or pager is one of the most popular services in
Thailand now. "Paclink",the first digital pager
service was brought in by Pacific Telesis
Engineering Co.,Ltd. in 1986 under a concession
granted by CAT.
In June 12,1990 and December 21,1990, TOT
permitted two other providers, Shinnawatra
Paging Co.,Ltd. and Hutchison Telecommunica-
tions (Thailand) Co.,Ltd. granted concessions
to provide services under the brand names of
"Phonelink" and "Pagephone" respectively.
In June 1992, Matrix Telecommunication
(Thailand) Co.,Ltd. with a concession from
CAT,launched a service, named "Easy Call".
At present, TOT is considering granting a
concession to another private company to
operate other systems in the near future.
The total number of pager subscribers
currently is about 200,000 and is expected
to reach 350,000 by the end of 1992.
Value-added services such as voice mail box and
financial news are avaiable from these services.
In the future some operators may cooperate with
operators in other countries so that the
services can communicate not only in Thailandbut also from foreign countries.
2.7 TELE - POINT ( CT 2 ) SERVICE
The one-way outgoing telecommunication service
(Tele-Point or CT-2) called "Fone Point" in
Thailand was also granted a concession by TOT
to Fone Point (Thailand) co.,Ltd. launched its
service in August 15,1991. The service is onlyfor Bangkok Metropolitan Area. After one year,
the number of subscribers is 3,246 and expected
to reach 15,000 by the end of 1994. Now 1,640
radio base stations for transmitting signals
are in operation. These will be expanded to
about 4,000 by the end of 1992 to improve
service.
2.8 DATA COMMUNICATION SERVICES
Data communication services are provided by
CAT,TOT,and private sector operators granted
concessions from government agencies. Some of
these networks serve not only voice and data
transmissions but also images such as
Integrated Satellite Business Network (ISBN)
and Integrated Serviced Digital Network (ISDN).
315
TABLE 6 DATA COMMUNICATION SERVICES
SYSTEM OPERATOR INAUGURATION SIGNAL
DataNet Shinnawatra 1990 DataDatacom
(10yr.concession:TOT)
ISBN Acumen 1991 Voice(15yr.concession Data
:TOT) Image
ISDN TOT,CAT 1993 P VoiceDataImage
Samart Link Samart 1990 DataSamart Net Telecoms
(15yr.concession:PTD)
SatLink Compunet 1990 DataDatasat (15yr.concession
Datacast :PTD)
Thaipak CAT 1989 Data
P Planned
2.9 AUDIO - VISUAL COMMUNICATION SERVICE
At present, an audio-visual conference serviceis provided by TOT. In the near future, TOT
will also introduce other new services such asvideotext and audiotext.
2.10 TRUNK MOBILE SERVICE
Now this service is provided by CAT. TOT will
launch this service at the beginning of 1993.
3. TELEPORT
It is very essential that both domestic and
international telecommunication services demand
be met in order to cope with the economic growth
of Lam Chabang and Map Ta Phut Industrial Estate
area in the Eastern Seaboard of Thailand. The
teleport project was set up by the Government to
manage the high speed telecommunication demandin that area. TOT and CAT are joint byresponsible. CAT will install an International
Transit Switching Center (ITSC 3 ), with a
capacity of 3,000 circuits and TOT will install
two ISDN Public Switching Exchanges at LamChabang and Map Ta Phut. Each has a capacity of
5,000 ordinary telephone lines and 1,500 BAI and100 PRI ISDN line. These service will beintroduced to users in mid 1993.
4. LONG DISTANCE TRANSMISSION PROJECTS backup, will be launched within the following
year. Around 2008, two more satellites will be
launched in phase two. Each satellite is
equiped with 12 transponders that can fully
serve the demand.
Several long distance transmission projects are
being developed by both CAT and TOT. For example,
along major railways and underwater fiber optic
systems. These systems are being developed as a
disaster backup system and to integrate the
local telecommunication networks scattered
around the country. These projects are
summarized in the table below.
TABLE 7 LONG DISTANCE TRANSMISSION PROJECTS
SYSTEM CAPACITIES(circuits(
OPERATORS YEAR OFAVAI-LABLE
LENGTH(km)/ROUTES
DOMESTIC
Submarine 8.000 Jusmine 1994 P 1.200/Fiber Submarine RayongObtic Telecom-
municationSouthernpart of
(20Yr.con-cession
Thailand
:TOT)
Railway 36.000 Com-link 1992 3.000/Fiber (20yr.con- AlongObtic cession
:TOT)majorrailway
Satellite 1.5 Acumen 1992 -
Network Trans-ponder
(15yr.con-cession:TOT)
INTER-NATIONAL
Submarine 7,560 CAT 1995 P ThailandFiber Malaysia -Obtic Singapore
Submarine NA CAT NA Thailand -Fiber Malaysia -Obtic Singapore-(APCN) Indonesia-
HongkongPhilipine-Taiwan -Japan -Guam
ITSC 2-3 6.000 CAT 1993 P
APCN Asia Pacific Cable NetworkITSC International Transit Switching Center
P PlannedNA Not Available
5. THAICOM SATELLITE PROJECT
The first satellite project to be launched by
the Thai government is named "Thaicom".
The government has granted a concession to
Shinnawatra Satellite Co.,Ltd. to operate
the service for 30 years with exclusivity
for the first eight years.
This project is devided into two parts.
In phase one, two satellites will be launched-
one in October 1993, and the second one, a
316
Thaicom cannot only utilize long distance
service-voice, data and image, but also can
provide very wide area broadcasting which is
very economical and efficient.
6. THE FUTURE
Base on past experience, the Government can
not respond to private sector demands for
telecommunication services. The working
processes of various government agencies are
to be considered and the Government has set up
a policy to improve working efficiency.
Sections of the policy are described below:
6.1 The Government is studying ways to divide
the Ministry of Transport and Communications
into two Ministries, the Ministry of Transport
and the Ministry of Communication and Aviation
to make working procedures and other conditions
more flexible. The Ministry of Transport will
supervise and control the State Railway of
Thailand, the Highways Department, the LandTransport Department, the Harbour Department
and the Port Authority of Thailand. The Ministry
of Communication and Aviation will supervise
and control CAT, TOT, the Thai Airways
International, the Civil Aviation Department,
the Airport Authority of Thailand and the
Meteorogical Department.
6.2 A policy to transform State Enterprises is
being introduced. TOT is in the process of
selecting a private consultant conduct a study.
The TOT Act will be amended in order to enable
privatization to be completed under the Eighth
National Economic and Social Development Plan
1997-2001.
6.3 To be more flexible, Bureau of Telephone
Services Co-project has been set up by TOT.
It is a one stop service to control and
coordinate with Telecomasia Co.,Ltd. and Thai
Telephone and Telecommunication Co., Ltd..
Moreover, Bureau of Private Sector Coordination
was established to control and coordinate with
concession companies for example,Paging Service,
Cellular Mobile Phone Service and ISBN service.
6.4 TOT is studying a plan to set up its own
factory to produce telecommunications equipment
to cope up with expansion project. In this
project, TOT will buy licences or technology
from telecommunication manufacturers to produce
its own gear. The factory will produce the
telecommunications equipment to serve TOT's
Eight Development Plan under which the number
of telephone connections will reach 12 million
lines in the year 2001.
7. CONCLUSION
With the trend of changing telecommunications
policy towards liberalization, the
telecommunication service industry in Thailand
will continue to move toward private sector
involvement which will lead to more efficient
operation. More investors will be attracted
to participate in this telecommunication
service industry. With this trend in mind,
liberalization of the Thai telecommunications
service industry would significantly benefit
the nation as a whole. The more advanced
technologies will be utilized to develope a
major Thai telecommunication industry. Hence,
consumers and bu.iness communities as well as
Thai society will gain from this improvement.
Conference Paper at PTC. 93
January 17-20, 1993
Sheraton Waikiki Hotel
Honolulu, Hawaii, USA.
317
Maximizing Revenue for Inmarsat SignatoriesJames Kemp, Director of Research and Development
Jack Bright, Regional Sales ManagerMobile Satellite SystemsScienttfic-Atlanta, Inc.
AOstractInmarsat Signatory participation in the Coast Earth Station business has been moderate at best. I Pss thanone third of the 67 Signatories to this mobile satellite consortium have Land Earth Stations (LES). The newdigital standards now being introduced offer new opportunities to all Signatories. This paper explores thepossible reasons for the low participation and proposes a novel approach to alleviate the problems iden-tified. The technological and commercial implications of the authors' concepts are discussed, in the contextof revenue maximization for Inmarsat LES owners. A new, low-cost LES design will be explored alongwith Mobile Earth Station (MES) features that would help maximize revenue for each owner. A possibleoperational scenario covering technical issues is presented.
IntroductienInmarsat, the International Maritime Satellite Organization,operates a global satellite system for mobile communi-cations in the L-Band frequency spectrum (1.5 - 1.6 GHz).Headquartered in London, Inmarsat has 67 membercountries. The government of each country is a "Party" tothe convention which established Inmarsat, and each Partynominates a "Signatory" to represent its commercialinterests in the Organization. Originally formed to provideservices to maritime users, Inmarsat's charter was expan-ded to provide aeronautical and land mobile services by1989.
The Inmarsat mobile satellite services are provided usingfour regional Inmarsat owned satellites, seven in-orbit sparesatellites and Signatory owned Land Earth Stations (LES).The LESs are interconnected to the public providing globalconnectivity. User terminals place calls to the LandStations that are terminated into the terrestrial wire-line ormobile networks.
A hallmark feature of the Inmarsat system is its "pay-as-you-go" philosophy. Users pay a per-minute charge fortelephone and on-line data calls and a per-byte charge onstore-and-forward data messages. This operationalphilosophy has great advantages for many users and as ofthis writing more than 25,000 mobile earth stations (MES)are in service worldwide.
A drawback to the Inmarsat system has been the level ofparticipation by the Signatories. As mentioned above,67 members have invested in the ownership of Inmarsat.The real participants, however, are the 22 Signatories whoown Land Earth Stations. Compare this with the INTEL-SAT system, which has 19 satellites, 124 Signatories,180 countries with Gateway Earth Stations, and Domesticsatellite service to 40 countries. This contrast underliesseveral structural issues which are mainly technological innature and therefore a manufacturer's challenge to solve.
Structural IssuesInmarsat's basic structure allows for any and all Signatories(and non-Signatories) to invest in Land Earth Stations and toprovide mobile satellite services to any mobile user. Unlike!NTELSAT where each Signatory puts up a half-circuit andthus both share in the user revenue, the Inmarsat architecturetacitly encourages competition among Signatories for userminutes. The downside that may not have been envisioned bythe founders is that small Signatories have not been able toeasily capture the revenue originating from the mobile users intheir countries. This has bten due to several factors:
318
the mobile nature of the terminals.the relative ease by which local PTT bypass isachieved by a user.the high cost of the Inmarsat Coast Station.the belief that the grade and the cost of servicewould be better through the larger Signatory earthstations.the inability of smaller Signatories to effectivelymarket mobile communications services globally.
As marketing deficiencies are not normally technological innature, no discussion is presented here. Marketing must,however, be considered as an essential ingredient in Inmarsatservice.
Another significant reason for lack of participation is that non-seagoing nations haven't seen Inmarsat service as a necessarydevelopment priority and even though the changes of the mid-to-late 1980's gave hope, the needed low-cost telephonyservices were just not available until the advent of Inmarsat-M. This low bit-rate, fully digital telephony terminal sendsand receives voice at 6.4 Kbps, fax and data at 2.4 Kbps, andutilizes very small (40cm) directional phased-array antennas.The economics of the "M" mobile earth terminal is such thatthe cost per-minute and the price of the hardware is approxi-mately half of that previously available. Maritime, landmobile and semi-fixed versions of the Inmarsat-M areproducts which are to be introduced in the very near future.
ScientificAtlanta
Since Commercial Mobile Satellite Services were Introduced,we have been Through Three Generations of Technology
Successful demonstration ofmobile satellite technology
Single ACSE largemini-computer platform withethernet connection to channelunits and telephone switch
"Grouped/Duplicated"ACSE mini-computer withethernet connection tochannel units andtekphorradata switch
Digital services introduced.Fault-tolerance achieved withlarge mini-computer
1970's
NSP 175
1980's
A novel, third-generation LES architecture has beendeveloped at Scientific-Atlanta which may aid developingnations in the provision of domestic and internationalmobile satellite services. The concept consists of twofundamentals:
LES Technology and Integrated Network Design.
TechnologyTechnology in the Inmarsat-M network plays the key role in
. revenue enhancement. The major area of new development'centers around cost optimizing the Inmarsat-M LES.
The technology available today must be enviable toInmarsat network designers in the late 1970's. Securemicroprocessors, Digital Signal Processing ICs, and otherlow-cost electronic components have enabled mobilesatellite terminals to produce millions of instructions persecond. In the early design of the LES, large redundantminicomputers working with a tandem telephone switchwere required to handle the call and frequency assignments.Today, that entire process can take place on a single-chipmicrocomputer. This advance has led to the design of anLES that ultimately will be available at less than half thecost of current designs. What allows the LES to be so cost-effective is a wholly distributed architecture. Theaccompanying tables give an overview of the majordevelopments in Inmarsat LES design and where benefitsare accrued with the wholly distributed architecture.
The Scientific-Atlanta Inmarsat M/B land station design isbased upon intelligent channel units with operations that
319
Channel distributedmicrocomputer ACSE withethernet connection todatabase server. Telephoneswitch optional
1990's
Mobile Satellite SystemsNetwork Systems Group
reseml le mobile earth stations. Each channel handles itsown cidl setup and interconnection to the terrestrial network.Minimal centralized control functions eliminate overloadingproblems ant. increase system reliability.
To reduce operational expenses, the proposed land earthstation can be configured such that one common database(RDBS) can be accessed by several LES stations, providingcentralized billing, operator services and commissioning.Although this architecture is not yet used in the M network,Inmarsat uses it in the Aeronautical service. Great expensecan be saved by eliminating the database servers in an LES.The database server functions cannot use off-the-shelfdatabase packages like Oracle or Ingress and must be customfor Inmarsat service. With the Access Control and SignallingEquipment (ACSE) on a chip and no mandatory tandemtelephone switch, the LES now consists entirely of channeland signalling units. With this design approach, allSignatories can afford an LES. Later we will discuss apossible operational scenario with this architecture.
Integrated Network DesignThe Inmarsat-M network can be significantly enhancedbeyond its baseline design by each LES owner in thefollowing areas:
Signatory ParticipationSignatory Bypass ControlGreater Revenue Sharing.
Signatory ParticipationSignatory participation begins with a low-cost, affordableLES. The fully distributed ACSE design allows theSignatory to purchase only the ACSE needed to support thenumber of installed channels. This straightforwardapproach is a significant departure from previous InmarsatLES designs. The channel cost had previously been mini-mized to facilitate later expansion. Now a trade-off can bemade that optimizes channel unit cost for 50 channels orless that allows small Signatories to achieve a similar per-channel fixed cost basis with a much smaller LES.
A major advance in the Scientific-Atlanta LES design haseliminated the need for a telephone switch to be suppliedwith the LES. Previously, much of the call setup processwas done in a custom software version of a commerciallyavailable telephone switch, leading to unnecessary expense.A custom version tandem telephone switch is extremelydifficult to maintain from a software standpoint. Addition-ally, as the switch manufacturer upgrades his software, newrevisions must be purchased to take advantage of the newfeatures and services. This is especially true with thecoming changes in CCITT signalling; SS7 is still undefinedand as the switch manufacturers finalize their interfaces,some LESs may incur major software redesigns toaccommodate SS7 changes.
Bypass ControlThe heart of Signatory Bypass Control lies in the design ofthe Mobile Earth Station. With a programmable MESpersonality, LES owners can effectively control bypass intheir area of influence. The Scientific-Atlanta MES ,Ises anElectronic Key which can be programmed as the terminal isimported into the Signatory country. Alternatively, theSignatory may purchase pre-programmed MESs and leasethem at entry points and urban areas. The "Key" isprogrammed to hold primary and backup LES IDs. Thisrestricts the MES to access only programmed LES stations.If tampering is detected, the chip rapidly erases itself,making the MES useless. Deciphering the key is virtuallyimpossible with more than 10'9 possibilities. With thesefeatures, the Signatory has effective bypass control oftraffic. However, implementation of this capability needsto be considered in the context of the Inmarsat operatingagreement.
An additional Inmarsat-M feature is the provision of a debitcard reader on the MES. The LES operator could sell $25,$50, SI00, and $500 cards at the same locations whereterminals are programmed or leased. The MES could bemade to disallow cards after a fixed period of timea twoto four week period, for instance. Although not a require-ment for bypass control, this feature should also enhancerevenue similar to what debit cards have done in the publictelephone service.
No security system is undefeatable. However, with moderndigital IC techniques the LES operator has a very highchance of capturing the traffic it has a right to. No longer is
Inmarsat Money FlowBetween End Users/LES/Inmarsat
Figure 2
Shipto-Shore Calls
ShipOwner
AccountingAuthority
LESOperator
Inmarsat
Calls
.....
USSr. USS
Shore-to-Ship
ForeignCountryTelecom
Subscriber Telecom CESOPerala
Inmarsat
USSex.
USS
the Signatory at a disadvantage when negotiating transitagreements with foreign Signatories.
Greater Revenue SharingRevenue sharing in the technological sense comes frompossible operational scenarios utilizing a Remote DatabaseServer (RDBS) architecture. With RDBS, no longer does theLES-less Signatory need to focus on transit agreements, heonly needs to negotiate a billing agreement with one of themore capable LESs to provide full, seamless coverage. Alook at Inmarsat's member structure can give a clearer picture.
Inmarsat membership economics are complicated due to theSignatory capital contributions to satellite procurements.However, LES ownership is more straightforward. First, alook at the revenue flow from both land-fixed and mobilesatellite users. Figure 2 shows that the revenue from land-fixed calls is somewhat like IDD calls where the subscriberpays the local telecom authority on a monthly basis for thecalls placed. On the mobile-originated calls, often anAccounting Authority (AA) becomes the biller to the end user.The AA pays the LES operator for the minutes that his
Inmarsat Money FlowBetween LES/Inmarsat/Signatories
Figure 3
SSUC's lamarsat Operating
LESsas Users
Staff.Buildings,TT&Cs
C.aptal Repayment
Signatoriesas
Investors
ComeensanonSatellites,Launchers.NCSs. etc.
I
CapitalContribution
OPCapital
Expenditure
320
subscriber used. The LES operator then pays both Inmarsatand another telecom authority for termination into thatcountry. In the case where a routing or transit agreement is
ScientificAtlanta
CES/LES Design CharacteristicsBasic Architecture Channel Expansion
Telephone/DataSwitch Interface
Configurationand Operation Initial Capacity
FirstGeneration
1:1 redundant ACSE (Hot
Standby) mini-computer
with ethernet connection
to telephone switch and
channel units.
Limited beyond original
expansion capabilities of
CPU and telephone switch.
Telephone/data switch Central man-machine
integrated into design. Custom interface.
software by CES/LES vendor
resident in switch to handle
call processing tasks.
Expensive. Expansion
capability must be
purchased up front.
SecondGeneration
Grouped (parallel processing)
ACSE mini-computers (Bit
synchronous, fault-tolerant)
dumb-channel units, ethernet
connection to the telephone
switch and channel units.
Limited to "Groups" of
channels. Expansion costs
non-linear. Telephone
switch expansion limited
to same vendor and same
model switch.
Telephone/data switch
integrated into design. Custom
software by CES/LES vendor
resident in switch to handle
call processing tasks.
Multiple operating
systems. Several
terminals must be
accessed for single
configuration change.
Similar in cost to first
generation but less
expensive to expand.
ThirdGeneration
NSP 175- 5
Fully distributed processing
ACSE microcomputers on
each channel. Hot standby
database servers. Ethernet
connection to DB server and
channel/signalling units.
Limited only to mobile
ID database storage at
DB server. 500 channels
practical limit.
Call processing done at
channel unit level. Any
vendor tandem switch can
be used for most applications.
Single windows-like
UNIX-based operating
system for MMI and
database management.
signed (i.e., a LES is not in the country where the mobileuser originated the call), the LES operator will also pay thattelecom authority.
Figure 3 shows how the payment flows between the LESoperator and Inmarsat including capital contributions. Thefloating per-minute rate Inmarsat charges each LES operatorfor the satellite circuit is the SSUC.
The economics of establishing an MB (digital voice, fax,data and telex) LES are shown in the Table below. As canbe seen in the following paragraphs, an Inmarsat LES isprimarily fixed-cost dependant and like an empty airliner,non-variable cost businesses are extremely sensitive to theupfront costs.
LES Cost (existing Ilm Ant )
Building & Land
Depreciation
Maintenance & Spares
Admin. & Marketing
CAPITAL COSTS ANNUAL COSTS
$3.5 million
$0.5 million
$0.4 million
$0.2 million
$0.25 million
BEST COPY AViiiliaLE 321
Buy exactly the ACSE
processing power
needed.
Mobile Satellite SystemsNetwork Systems Group
The per-minute :.barges would break down as follows:
LES cost per-minuteTermination charges
$3.25/min$0.25/m in$3.50/min
A per-minute user charge of $5.50/min. earns $2.00. Underthe assumptions in the Table, an Inmarsat LES breaks even at400,000 minutes per year. A first or second generation LESis at least 20 percent greater. Under a RDBS scheme, afurther 15 percent savings can be had.
A likely operational scenerio for a Signatory who desires tooffer Inmarsat services directly with a lower capital invest-ment would be as follows:
The Signatory would acquire an LES with thedistributed architecture that included only the requiredsignalling and voice channel units.
The Signatory would then negotiate a billing arrange-ment with one or more of the full featured LES own-ers. Th;s arrangement would not be like the typicaltransit agreements in place today. With today's transitagreements, the Signatory with an LES processes allthe calls on behalf of the Signatory and/or TelecomAuthority (transit partner) without an LES. Theminimum subscriber/end user rate is generally set by
4-;
the Signatory with an LES and the transit partnerreceives a 10 percent or less commission on thetraffic generated.
In some cases the service provider will actually direct billthe service consumer on behalf of the transit partner.However, in many cases, the transit partner is the billingentity and the end user rates are increased further to coveradministrative costs.
Under the scenario where the Signatory has now purchasedits own third generation LES, the traditional transit agree-ment is no longer required. Only a billing partner isneeded. The billing partner would forward monthly billingtapes to the Signatory, thus becoming an information ser-vice similar to a credit verification company. The Signatorycan then determine its own subscriber rates based on theSSUC from Inmarsat and its own operational costs. TheSignatory would now be motivated to develop its own in-country market as an Inmarsat Service Provider supportedby the ability to offer competitive subscriber rates.
ConclusionThe third generation LES design has many integrated net-work features that enable revenue maximization. Devel-oping countries could be the first Inmarsat Signatories tobenefit from this new architecture. However, severaloperational issues must be addressed at Inmarsat andbetween Signatories in order for low-cost LES designs tobe fielded.
322
Service Consequences: Evaluating The Role If Insurance
By William L. MayoManaging Director
Willis Corroon Inspace, Inc.
The space insurance industry represents a resource not only for risk management, but also for business and financialmanagement issues and technical expertise. In other words, the space insurance industry can provide more than protectionagainst catastrophe, it can also serve as a valuable business-advisory resource.
Over the last several years, the topic of space insurance hasbeen scrutinized from almost every angle, while little, ifanything, has been discussed about the potential impact ofinsurance on the deployment of new satellite-based services.However, the insurance industry clearly represents a stablefinancial resource that continues to invest in the success ofthe international space industry as it works to introduce newand innovative services.
Perhaps the time has come to view space insurance from anew and different perspective, rather than segmenting it interms of launch, in-orbit and transponder coverage. Thegreatest impediment to the growth of the commercial spaceindustry is not the cost of insurance, but rather the limitedaccess to space which commercial ventures now experience.Launching satellites has been -- and will continue to be -- ahigh-risk proposition; and the cost and risk associated withlaunching and operating satellites must be evaluatedrealistically. However, the elimination of insurance wouldnot mitigate the risk of failure; rather it would make thefinancial risk much greater and far more damaging in theface of catastrophe. Machiavelli, who was quite the politicalanalyst of his day, may have inadvertently captured therelationship between innovation, growth and risk, when hewrote, "There is nothing more doubtful of success nor moredangerous than the creation of a new system." Although,this observation was made centuries ago, it has applicabilityto the space industry today, and in particular to the role ofthe space insurance industry.
In our lifetime we have witnessed the implementation of ahost of "new systems" in space. Mankind now benefits fromnumerous new services -- satellite cellular, vehicle locationand tracking services, corporate information networks,satellite news gathering and distance learning -- to name justa few. One of these new services, satellite cellular, promisesto bring the telephone service to emerging nations aroundthe world to help improve their infrastructures so they canbegin to attract investment, bringing jobs and brighterfutures to their citizens. What is more, the space industrypromises even greater innovations in the future. Lookingahead through 1995, in the Pacific Rim approximately 11satellite launches are planned, bringing the promise ofimproved communications with the rest of the world, asbasic telephone service becomes available to people whohave not had it before. The space insurance industry is, andwill continue to be, a key partner in the delivery of satellitesand their services.
To understand the impact of satellite and launch vehicleinsurance, and operation and service interruption insurance,on the introduction of new satellite-delivered services, youneed only understand the basic premise of insurance:sharing the risk. When launching and operating satellites, it
323
is possible to do so without purchasing insurance; but if anypart of the launch or satellite itself fails, the satellite operatorbears the total cost as a result of assuming the total risk.However, when insurance is purchased, the risk and cost offailure is shared. Without such risk sharing, and consequentcost sharing, there would be little innovation. This verysame premise underlies the formation of INTELSAT andInmarsat; i.e., sharing the capital requirements, sharing theoperating expenses, and sharing the risk of operatingworldwide networks to introduce a multitude of services.
The insurance industry has played a significant role in thematuration and profitability of the space industry.Understanding the role insurance has played in thedevelopment and commercialization of space requires a lookat the history of insurance coverage over the last ten year(Figure 1).
Figure 1.
C)
E
o.
Premiums Minus ClaimsAll Commercial GEO Satellites
200
150
100
50
u) 074e -50
-100
-150
-20081 82 83 64 85 86 87 88 89 90 91 92
Year
As seen in the graph (Figure 2), the insurance industry hascontinued to support the space industry even during the mid-80's when sizable losses occurred. In the two-year period,beginning in 1984, the insurance industry sustained losses ofover $600 million. The insurance industry continued tosupport the space industry even in the face of losses with thebelief and assurance that the industry would be successful.The increased role of the underwriters and brokers for thespace industry now includes serving as technical advisors.
A brief look at the current insurance market helps tounderstand why premium rates arc between 17 and 18percent. Today, the launch failure rate is one out of sevenlaunches. When the failure rate improves, the marketcapacity will increase and may allow for a decrease in
0t
Figure 2.
30
25
20
15
10
5
0
Trends in Insurance Premium Rates
82 83 84 85 86 87 88 89 90 91 92
Year Insurance Placed
premium rates. The global satellite insurance capacity isaround $360 million and represents twenty-five companiesfrom nine countries.
Countries
SpainFranceGermanyItalyScandinaviaUnited KingdomUnited StatesJapanAustralia
Capacity $US
$ 8 million$62 million$53 million$45 million$16 million$58 million$96 million$10 million$11 million
How can an entrepreneur withstand loss and continue toevaluate risk without the insurance industry's involvement?The insurance industry has demonstrated its support over thepast decade, and has permitted space industry participants toreplace capital assets and continue operations in a time whenthey otherwise would have faced catastrophic financialcircumstances.
The role of the insurance industry has grown with investorsin the space industry. In many cases the insurer provides thetechnical expertise necessary to evaluate risk for theindividual space venture. Insurance brokers today areinvolved in the earlier stages and view their role as helpingto assess and minimize risk.
Additionally, the international space industry is conductingresearch to support new and innovative developments thatinclude such ventures as small launch vehicles, low-earth-orbit satellites, materials processing and space infrastructureactivity.
The space insurance industry now seeks to demonstrate itssophistication by serving as liaison between the clients,underwriters and the technical experts in reviewing thecomplexity of individual business ventures, presenting athorough understanding of the risk and the best plan for riskmanagement. The space insurance industry represents aresource not only for risk management, but also for businessand financial management issues and technical expertise. Inother words, the space insurance industry can provide morethan protection against catastrophe, it can also serve as avaluable business-advisory resource.
In reality, the utilization of insurance by the space industrycan result in a reduction of costs and investment related tospace ventures. The budgeting of insurance premiumsresults in a reduction of initial capital available in the eventof a failure and eliminates the need for funding thereplacement costs of failures. Additionally, insurance servesto raise the level of confidence within investors.
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In addition to the role premium rates play in determiningcosts associated with new ventures, the insurance industry isutilized as experts in the area of risk management. At itssimplest, risk management entails identifying risks,evaluating risks and dealing with them, then implementing aprogram to manage these risks. While this approach mightappear simplistic to some, it is important to emphasize thatthe space industry wrestles with multitudinous global, legal,political and financial issues; thus making risk managementa complex process.
Now that we have reviewed the role of insurance in theareas of premium rates and risk management, let us discussthe role of insurance in a business advisory capacity. Thespace industry, in particular the insurance industry, isalready very much an international business. Risk of sizableproportion is, in most cases, handled by insurers in multiplecountries, presenting opportunities for the insurance industryto gain experience with business ventures around the globe.Today, as we look at trends toward privatization of PTT'saround the world, it is easy to recognize the role the spaceinsurance industry can play in understanding the globalbusiness opportunities that exist and continue to emerge.The value of insurance for the PTTs has increased as theprivatization has continued simply because of the increasedaccountability for their operations.
The ;pace insurance industry represents a proven path forsuccess in supporting the continued growth and introductionof new services for the space industry.
As noted, the value of the knowledge which the spaceinsurance industry has accumulated should not beoverlooked as new service opportunities arise. These newventures need to rely on the space insurance industry forfinancial support, capitalizing on this extensive body oftechnical and global business expertise to insure continuedsuccess for the commercial space industry. I ran across ahumorous anecdote which better illustrates my point: Awoman called an insurance agent and said, "I want to insuremy house. Can I do it by phone?"AGENT: "I'm sorry, but I have to see it first."WOMAN: "Then you had better get over here right away --
because it's on fire!"
When you consider insurance from this extreme, it seemsessential to the long-term viability of a new businessinitiative. Even more important, however, is that insuranceaffords a new business the opportunity to succeed byproviding a means of risk management through a variety ofinsurance options.
The Roles of Copper and Fiber in the Evolution to Broadband
A Network Planning Perspective
Thomas M. Super and Dr. Edward A. WalvickNYNEX Science & Technology, Inc.
White Plains, New York, United States of America
1. ABSTRACT
Much has been discussed about the future of broadband. This paper describes some of the consider-ations a telephone administration must take into account in dealing with early service demand. Forthe downtown business district, the use of fiber is economically viable now. For residential areas, andfor businesses in residential areas, the cost of fiber to a specific location is prohibitive. In particular,this paper describes how an embedded telephone administration could make effective use of theexisting copper network to introduce broadband services, before it is economic to evolve to fiber.
2. INTRODUCTION
The future belongs to fiber. Given adequate demand, fiber isclearly the technology of choice whenever there is a require-ment for bandwidth in excess of that needed for voice. Whenthere is inadequate demand, and there is not, and is not likelyto be a need for additional facilities, it is still less expensive toprovide a single T1 or El service over repeated copper. Twonew, copper based technologies promise to reduce the cost ofserving the low demand market. These are High Speed DigitalSubscriber Line (HDSL) for two way T1 (1), and AsymmetricDigital Subscriber Line (ADSL) for one-way T1.
As will be discussed below, HDSL and ADSL can be used toeffectively serve the initial demand for new services. Once anadequate demand exists, fiber systems can be introduced.Evolution scenarios for both business and residential servicesare presented which allow growth with minimal up front risk.The future use of fiber in the loop systems is also described tohandle demand as the new services attain adequate pene-tration.
3. BRIEF TECHNOLOGY DISCUSSION
A separate paper by Robert Lawrence (2) will describe thetechnologies in greater detail. Some points are necessary here,however, for greater understanding of the rest of the material.
Ordinary voice telephony is usually delivered as a baseband 3Khz signal. This signal is transmitted over analog copperfacilities from the central office to the end user's premises.The transmission loss of this facility increases with increasingfrequency and distance. Historical outside plant design resultsin adequate transmission of frequencies up to about 3 KHzwithout the use of electronics to about 18 Kilofeet (Kft)(3).When ISDN was being designed, it became apparent that wewould need to transmit about 160 Kbps (kilobits per second)over existing copper plant. No matter which encoding schemewas adopted, it was clear that both more than 3 KHz wasneeded, and new technology would be needed to transmit theISDN bitrate in whatever spectrum could reasonably be used.The technology that emerged to meet this need was digitalsignal processing (DSP). This technology uses combinations ofamplification, time slicing, and echo canceling to overcome theimperfections of typical outside plant copper, and allows theISDN 2B1Q signal to be transmitted over existing copper two
BEST Uri AVAILABLE 325
wire facilities without the need for pair selection, circuitdesign, repeaters, or conditioning (e.g., removal of bridged tap).
In about 1988, Dr. Joseph Lechleider at Bellcore (4) showedthat by using even more sophisticated signal processing, evenmore bandwidth was possible(5). The result was HDSL.HDSL allows T1 to be transmitted over two ordinary copperpairs at distances up to 12 Kft, again without the need for pairselection, circuit design or conditioning. In subsequentdiscussions with NYNEX, it became apparent that while HDSLhas great appeal for business customers, it has limited valuefor residential customers. The problem is that we don't havethe luxury of two pair to each dwelling. The second resultthen was ADSL.
Over one pair and without disturbing the ordinary voiceservice (either 3 KHz analog or ISDN 2B+D), ADSL allows thetransmission of 1.5 Mbps from the central office toward thehome, with a 9.6 or 16 Kbps upstream data path. While thisasymmetric capability is not capable of providing all of theservices that full duplex T1 could provide, it can provide anumber of interesting residential services including thefollowing
VCR quality video using the Motion Picture ExpertsGroup compression technique(6)
high speed data base services from a remote host
interactive games from a host
remote access to computers at a distant location withvirtual transparency (telecommuting)
over ISDN, teleconferencing with either a higherquality image from a central location and an H.261 (at2x64 Kbps) upstream, or 12 windows of the same videoquality downstream as the upstream signal.
A number of vendors are already able to provide HDSL, whileADSL is currently available only for experiments, but will beavailable in trial quantities later this year (1993).
4. HDSL for BUSINESS SERVICE
There is considerable demand in the business environment forhigh capacity services. This is driven by both quantities of
i _4
voice services and by data and video requirements. There areseveral ways to provision Tl. The original technology was touse two copper pairs for each Ti and place . pesters approxi-mately 6000 feet apart. The second choice is to use one of anumber of fiber based solutions. When the business either hasits own multiple T1 demand, or is located in an area with othercompanies with Ti demand, the economic facility of choice isusually fiber. HDSL enters the equation in two ways.
First, HDSL can be used to reduce the interval between orderand circuit availability. This is because the only work neededto provision HDSL is the identification of two spares andinstallation of a box at each end of the circuit. There is norequired design, installation of repeater cases, cable splicing,etc.
Second, HDSL has a role when there are not too many lines.Using current vendor quoted prices, Figure 1 shows a compari-son of HDSL with conventional Tl.
The figure shows that when the need is for one T1 line, HDSLmakes sense (on a first cost basis) whenever at least onerepeater is needed. Conventional Ti has significant economiesof scale in that repeater cases, power, etc. can be shared. Asa result, it would only make sense with a customer with twolines if two repeaters were required. For more than threelines, the distance limitation of HDSL (12 Kft.) cuts in beforeeconomic nave in. Not shown in this chart is the cost of fiber.Our studies show that fiber makes sense as soon as threerepeaters is needed, regardless of the number of lines.
As an aside, the vendors pricing for HDSL seems higher thatoptimum for building and establishing a market for theproduct. There is no doubt that in quantity a device with theamount of signal processing required should not cost more thata few hundred dollars per end. By pricing to recover development costs quickly, they are preventing a more robust marketfrom developing.
5. ADSL for RESIDENTIAL SERVICE
Before discussing broadband applications, it is worthwhilediscussing fiber in the loop (FITL) for plain old telephoneservice (POTS). The economics of FITL is getting moreattractive by the day. NYNEX concluded several years agothat it no longer made any sense to install copper in feederplant. Our current choice is to use Optical Digital LoopCarrier (ODLC) for all feeder relief. One system we haveapproved is Optilink 2000 from DSC. Fiber in the distributionplant is not quite economic for all applications. For someapplications fiber to the curb (FTTC) is already less expensivethan copper. We have looked at several systems in trialincluding Raynet and BST.
NYNEX has also been studying residential broadband servicefor several years. We concluded early on that fiber technologywas the correct choice when sufficient demand exists. Theproblem we addressed is how we can economically provideincreased bandwidth to the early adopters in order to buildenough of a customer base to attract developers of services thatwould use the bandwidth. Our early market studies indicatedthat the single residential service with demand obviouslysufficient to begin the broadband revolution was Video-on-Demand (VOD). We define VOD as having the followingcharacteristics:
access to a large library of movies
availability of full VCR features (pause, rewind, fastforward)
326
quality comparable to VCR tapes.
This service description lead us to consideration of 1.5 Mbps,and Motion Picture Experts Group video compression (at lessthan 1.5 Mbps). We recognized that this service (and manysimilar residential services) is inherently asymmetrical. Thatis, the signal from the network to the home has to be videocapable, while the return has to simply be able to trackcustomer signals representing menu choices, start, stop, etc.As discussed above, discussions with Bellcore lead to theevolution of ADSL from the HDSL work.
ADSL is at an even aarlier stage of development than HDSL.Bellcore is now in the process of testing three differenttechnologies for ADSL. We have been quoted between $5000and $8000 per pair (CO and end user ends) for trial quantities.Again, in quantity, prices in the $300 - $400 per pair rangeappear achievable.
ADSL, as currently defined does not reach all of our customers.The technical limitations are:
up to 18 Kft. of copper cable
up to 3000 feet of bridged tap
no load coils.
These limitations result in an ADSL reach of approximately 60- 80% of NYNEX loops. To increase the reach we need to makeit possible for:
(1) building ADSL into the remote terminal of ODLCsystems, and
(2) solving the same problem for fiber to the curb.
Besides increasing the reach of ADSL, integration into ODLCand FTTC will reduce the cost as well.
6. EVOLUTION - Business Services
The evolution for business services is straightforward. HDSLmakes sense immediately for two applications. They are quickstart and single T1 service. In the quick start case, HDSL willshorten the interval between service ordering and service. Assuch, it will result in revenue as well as satisfied customers.Careful study is required to detei mine whether the HDSLshould be left in place or removed in favor of a permanent fiber(or even conventional copper - where there are spare pairs)solution. The decision will be based on the cost of HDSL, thenumber of Tls, anticipated growth, etc. Since HDSL isconfined to devices at each end of the circuit, it is possible toreuse the equipment for quick start elsewhere.
For thin routes, the HDSL would be planned to stay in placeuntil new orders are received. At some future dale theaccumulated demand may suggest new fiber facilities.
7. EVOLUTION - Residential Services
The evolution for residential service is somewhat more complexsince residential systems which integrate 1.5 Mbps with POTSdo not yet exist. However, the vision we at NYNEX have is asfollows:
(1) ADSL will allow universal availability of new broad-band services. (Initially only for customers within 18Kft. of the central office, soon for customers within 18Kft. of an ODLC remote terminal as well.) Universal
e.
means availability to all, not provisioning to all. Thatis ADSL will help satisfy the demand of early adopterswhen the demand is dispersed.
(2) The economics of FTTC will improve over time forPOTS alone. Technology will evolve for the smoothintegration of 1.5 Mbps demand with POTS. Whenthis occurs, the economic prove in for FTTC in areaswith any significant broadband penetration (even whenalready met by ADSL) will be immediate.
S. CONCLUDING REMARKS
Providing new service has always been expensive for the earlyadopter stage. When customers are thinly dispersed, the costof high bit rate service, in particular, has sometimes beenprohibitive. High Bitrate Digital Line and Asymmetric DigitalLine technology provide a means to reduce the cost of satisfy-ing the demand of early adopters, and, thereby encouraging thedemand for these services from others. Further, the existenceof a customer base served by these technologies, along with theunderstanding that nearly any customer can order and receivehigh bitrate service on short notice, will encourage applicationdevelopers to develop for T1 bit rates. It is, after all, theapplications that customers want that cause them to order thetelephone company service in the first place.
NOTES
1 This paper discusses the American Ti (1.5 Mbps) rateas a reference. The conclusions are equally applicableto El (2 Mbps) with certain caveats. First, cost ofproviding El over conventional repeatered copper maybe somewhat higher that T1 because of the increasedbandwidth required. Second, the effective range of thenew technologies may be somewhat reduced, againbecause of the increased bandwidth.
2. Robert. W. Lawrence, Technology Enablers forResidential Broadband Services in the TelephoneCompany Loop Environment, PTC '93, session2.3.5.2.
3. The actual historical design rules were quite complexand involved the use of multiple gauge cable as well asloading coils. Some designs actually complicate theability to provide higher bandwidth services. Theseissues are not covered here.
4. Bellcore is formally Bell Communications Research,and is the research and development consortium jointlyowned by NYNEX and the other six regional telephonecompanies formed when the Bell System was split up.
5. see, for example, J. W. Lechleider, "Line Codes forDigital Subscriber Lines ", IEEE CommunicationsMagazine, Vol. 27, No. 9, September 1989, pp. 25-32.
6. The Motion Picture Experts Group operates as acommittee of the International Standards Organization(ISO). They have been looking at image compressionfor several years. They are very close to a standard forsub-Tl rate video compression (MPEG-1), and are alsoworking on a higher bitrate standard (MPEG-2). TheMPEG-1 standard appears to result in video qualityapproximating that achieved with conventional homevideo cassette recorders.
DS-1 LOOP TRANSPORT COSTS PM LINZ - CONVINTIONALRDIR,
um
.- - - - - -- - _-
PRIMER Of 111111.1011$
Figure 1 - Relative Cost of Conventional T1 and HDSL
327
MAMI: The New Direction of Interactive TV
N. Kotani, J. Kishigami, N. Sakurai and A. IshikawaNTT Network Information Systems Laboratories
Yokosuka, Kanagawa, Japan
1. Abstract
MAMI-1 is the first prototype based on the MAMI concept of a multiple-access server formoving picture information. Three users can simultaneously access moving pictures randomlyon one storage system through MAMI-I. By improving MAMI-1, many more users will beable to do that. MAMI will be beneficial in achieving interactive TV. Further, MAMI will adda new direction called indirect communication to interactive TV.
2. Introduction
Recently, the multimedia personal computer(multimedia PC) has become popular. Users can enjoytext, audio, still image and moving picture information onthis PC.
Multimedia information is usually delivered on a CD-ROM at present. This is due to the CD-ROM's excellentcharacteristics including a large capacity for storingmoving pictures, low cost because it is mass produced, anddelivery through established distribution networks.
However, multimedia has not spread to home usebecause multimedia PCs are very expensive and movingpicture quality on multimedia PCs is poor compared withbroadcast TV and VCRs. Recently, new hardware hasbecome available with features that allow multimedia PCsto handle full screen (about 640 x 480 pixels), full motion(30 frames/sec), and full color (24 bits/pixel) movingpictures. However, this new hardware is too expensive forordinary home use, and there are few multimedia softwaretitles in the market compared with music and moviesoftware titles. Therefore, multimedia's acceptance forhome use will occur in the future. When that happens, themultimedia PC will have a different name because it wille regarded simply as an electric appliance like a TV set.
In this paper though, it is called a multimedia PC.To acctlerate the spread of multimedia to ordinary
home use, some telecommunication, CATV andbroadcasting companies have released concepts ofinteractive TV like "Video On Demand" and "News OnDemand". The MAMI concept of a multiple-access serverfor moving picture information was described in the lastFIC[1]. It will still be necessary to develop an interactiveTV.
MAMI -1 is the first prototype based on the MAMIconcept. In this paper, the MAMI concept is brieflydescribed again, an outline of MAMI- I is presented and anew direction of interactive TV by MAMI is proposed.
3. Multiple-Access server for Moving pictureInformation -- MAMI
A
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The concept of a multiple-access server for movingpicture information called MAMI was proposed in the lastPTC. Multiple-access makes it possible for a user to accessany shared moving picture information within areasonable time.
3.1 The concept of MAMI
Figure 1 shows an example of the MAMI concept when3 users are accessing the same program, an image time barof moving picture data. Users access the moving pictureinformation randomly in terms of time and place. By usingbuffering technology, moving picture data blocks aredispatched from the storage system at a transfer rate of VMB/s. A user receives a moving picture constantly andcontinuously at only v MB/s. Thus, ideal V/v multiple-access can be operated in this system.
anytime access to the same program"
cc) 111kIlkIkklk,
to each terminal
v MW,
A
VMB/s
A C B A c
from disk array
Figure 1. The concept of MAMI
As a result, in the MAMI system, the effective transferrate difference between V and v is of fundamentalimportance. Therefore, in the MAMI system, a very fasttransfer rate from storage system is required to make itpossible for several users to access simultaneously.However, only an improvement in transfer rate fromstorage is not enough for more users to access the sharedmoving picture information. The file access sequences in
almost all storage systems at present are scheduled by thefirst-come, first-served algorithm (FCFS), and the mostsignificant problem with FCFS is the increase in queuelength and waiting time for service. Furthermore, movingpicture data cannot be reproduced at a constant velocitywhen the FCFS algorithm schedules the access to sharedmoving picture data. Therefore, in the MAMI system,scheduling technology based on the periodic hard-real-time cencept[2] is applied to the sequence control ofstorage access to solve this problem as shown in Fig. 2.
lotersellve Interactivepailet for B polat for C
Figure 2. Time chart for MAMI scheduling
Treat is the real reproducing time in transferring data
and also the minimum interactive period for a user in themoving picture data. It means that a user waits for the nextinteractive point to jump the access point on the movingpicture. Therefore, a shorter Treal can improve the random
access capability for a user. On the other hand, a multiple-access capability MAC can be concretely described usingthe hardware parameters
MAC < Treal
T
Treal
L(Treal)Tacc+
V( I )
where Tacc is the maximum access time of the storage
system including one-rotation time and the maximum seektime, V is the transfer rate from or to the storage systemand L(Trea) is the transfer data length in T related toTreal. By deciding each parameter in this way, all userscan access "full-randomly" at each interactive point.
3.2 Prototype MAMI-1
A prototype MAMI-1 system based on the MAMIconcept has been constructed[3]. Reproducing from anypoint on any stored moving picture is possible in thisprototype merely by mouse-clicking the icon, even ifanother user has accessed the same data, as long as thenumber of users who can simultaneously access the samemoving picture information is limited to 3.
3.2.1 Configuration of MAMI-1
MAMI-1 hardware consists of four components, a
329
schedule controller, client interfaces, a disk systemconnected through a VME bus, and client systemsconnected to client interfaces through SCSI interfacecables as shown in Fig. 3.
Figure 3. MAMI-1 hardware configuration
One of the most important parts of MAMI-1 is theschedule controller. The schedule controller has a systemwatch that is used for hard-real-time management of clientI/Fs. It generates a "tablet" by hard-real-time schedulingand sends it to each client 1/F through the VME bus. Theclient UP that receives the tablet can access the disk array.The schedule process running on the real-time operationsystem controls the authority to access the disk arrayduring the permitted time span by circulating the tablet.After sending the tablet to a client interface requesting diskaccess, measuring the progress time is begun withchecking the excess dead-line time decided by thehardware performance of the disk system. The commandswill certainly be completed during the permitted time spanif no errors occur.
The SCSI control process for the client interfaces has 2main functions. One is emulating RAM as a standard diskwith minimum access time overhead. The other is pre-fetch, making it possible to access the next data blockeffectively with the permission of the schedule controller.Both of these functions make it possible to maintain aconstant data flow to the user terminal/monitor duringsequential reproducing of moving pictures.
3.2.2 Performance
The client interfaces function as RAM disks throughthe SCSI interface, and the average transfer rate from thegeneral-use CPU board to the client through the SCSIprotocol controller is approximately 1 MB/s, including 0.6msec as the access time. This is sufficient performance forreproducing a moving picture with a full screen (640x480pixels), full motion (30 frames/sec) and full color (24bits/pixel) using the latest video boards having real-timevideo compression and decompression functions.
The burst transfer rate of MAMI-l's disk system,connected to a disk system controller with a Fast SCSI-2interface, can be as high as 5 MB /s. However, themechanical delay time overhead, the seek time and the
'11,_
rotation delay, makes the effective transfer rate V decreaseto approximately 3 MB/s when L is 1 MB and a MAC of 3is actually achieved in MAMI -1. The deadline time in thehard-real-time scheduling is fixed at 1/3 sec. The averageutilization of the disk array is 0.6 when MAC=3.0. Noblock exceeding the deadline time during the 6 hours ofrunning showed any appreciable effect from the real-timescheduling on the schedule board.
The response time of random access to moving pictureat a user terminal is approximately 1.5 seconds includingthe software delay due to setting the minimum interactiveperiod to 1 second in MAMI -l.
3.3 Improvement of performance
Two significant factors, the multiple access capabilityMAC and the response time for random access at a userterminal, should be improved to make a more practicalMAMI-1. In particular, quick response is very important inaccessing mcving pictures interactively and it should beimproved to less than 0.5 seconds. To decrease theresponse time for random access, the minimum interactiveperiod Treai should be shorter. However, equation 1 shows
that a shorter Treat causes a smaller MAC in the samesystem.
350
300
250
200
ISO
"
50
0measuleatents
Figure 4. Turn-around time under a practical load inMAMI-1
The first approach solving this problem is animprovement in the scheduling method for disk access.The MAMI-1 scheduling method is based on hard-real-time in the worst case with a maximum seek time and one-rotation latency. As shown in Fig. 4, the turn-around time,the time defined from the read command reception to datatransfer completion, is much less than the worst case of333 ms. By using a new scheduling method for averagecases with the disk arm scheduling algorithm[4], Treai can
be shorter while keeping MAC values.The second approach is improving the storage
performance. As previously mentioned, the wide transferbandwidth is sufficient, at first, to improve MAMI'smultiple access capability. Disk array technology, recentlyintroduced and can improve disk system reliability[5], isbasically suitable for MAMI, especially from theviewpoint that MAMI requires a high speed transfer rate.With this parallel technology, the synchronized disks haveno speed limitations.
However, just increasing the transfer rate cannotproduce a larger MAC under conditions where theminimum interactive period Tel is around 0.5 seconds as
shown in Fig. 5(a), and, thus, it is necessary to decreasethe Tacc. Recently, the trend to down-size portable workstations has been accelerating the development of diskssuch as 1.8 inch or smaller. These small disks have thepotential for decreasing the access time because of theirnarrow recording areas, making seek times shorter androtation speeds higher. Figure 5(b) shows that configuringa disk array with these small disks makes possible a greaterMAC with a less than 0.5 seconds response time.
3.4 MAMI-1 building block feature
It is of great importance not only to enlarge the MAC,but also to increase the number of user terminalsconcurrently connected to single server system in largerscale server systems simultaneously serving many userswith moving pictures. Therefore, the MAMI buildingblock feature was designed to be capable of expandingaccording to system scale. In the experimental system, the3 by 3 building block feature, meaning 3 MAMI-ls with 3MACs controlled by a system controller capable ofaccepting requests from nine users at the same time, isconstructed as shown in Fig. 6.
Tacc=0.6 ms(DRAM)
V=40 MB/s20
(-)
15V=20 MBA
Tacc=13 nu seek + 83 ms latency(5.25 inch Iv.)
0.2 0.4 0 . 6 0 . 8 1
[seconds/Minimum interactive period in,ai
(a)
10
(using small disks)Tacc= 0 nue.2) Tacc=16 nu4")
Tacc 2l.3 nu(5.25 inch typ.)
V=40 MWs1) 10m4 seek 3400 rpm fig 2.3.3.3 meh)
(2) Gem sir& 7200 rpm fig. Jess thole I 8 milo)
0.2 0.4 0.6 0.8 1[seconds]
N1i niinum interactive period Treal
(b)
Figure 5. Improvement in MAC dependence on Treat
330
The system controller always knows all moving picturelocations as files in MAMI- I systems and supervises thestatus of each MAMI -l. On specifying the file name at theuser terminal, the free client I/F board to access thespecified moving picture is selected by the system
controller. The connection between the client l/F board andthe user terminal is made under its control. It is notnecessary for users to know how many client IfFs can beincluded in the whole server system. The Ether Net used tosend control information from user terminals to the systemcontroller and the SCSI switcher in Fig. 6 will be replacedwith the B-ISDN network in the near future.
1.11
IIISystemController
Figure 6. System configuration of the 3 by 3 buildingblock feature
4. A New Direction of Interactive TV by MAMI
Multimedia consists of all media types, text, audio, stillimages and moving pictures. It is made up any two ormore conventional media or by combination of media.Conventional movies and television broadcast are notrecognized as multimedia, although they can include allmedia types. At least, computers, especially personalcomputers, by which any medium can be handled, arenecessary for multimedia. It has become easier and easierto put movies, for example, NTSC video images, on apersonal computer screen. Thus, movies can be enjoyed ona personal computer screen. This, however, is not amultimedia system; something is lacking.
This something is the interaction between the users andthe information. A multimedia system must provide theuser some interaction with the information it serves, so thisinteraction is vital in a multimedia system. It can, thus, besaid that multimedia, in the strict sense, is a shortexpression of interactive multimedia.
Now, when interactions by common software isconsidered, and it does not matter whether it is multimediasoftware or not, there is some interaction with data, data
331
that might be prepared in advance, or produced by thesoftware during its processing, or produced by a userthrough using the software. All of this is data in thebroadest sense, and only the most suitable data is chosen.Thus, it can be said that choosing suitable data is theinteraction. This meanings that it is necessary for theinteraction that a computer's storage systems have randomaccess capability from the view-point of storage systems.
This philosophy can be applied to multimedia.Multimedia information must be stored in storage systemshaving random access capability. This random accesscapability is necessary for multimedia.
4.1 Interactive TV with MAMI
There are 3 methods of obtaining moving pictureinformation with audio from a distance. These are, fromelectric waves through space, from CATV through metalor optical wires and from packaged media.
The original meaning of "tele-vision" was that viewerscould see the distance. Viewers know a picture on thetelevision is somewhere in the distance and they cannotexpect to interact with someone in the distance throughspace from their own communication experiences.
It is, therefore, necessary for multimedia that PCshandling multimedia have storage systems with randomaccess capability. A conventional television broadcastwould not, however, be suitable as interactive TV if itsinformation were to be stored in random access storagesystems because it serves its information through spaceand anyone who wants it can get at the same time asanyone else. "Through space" and "to anyone" emphasizethat a television broadcast is not suitable as interactive TV.
Now, there is packaged media with random accesscapability like CD-ROMs for achieving interactive TV.This is the only solution for interactive TV at present.There is multimedia information on CD-ROM. This takesa long time to be delivered after it is recorded. Theinformation is in the CD-ROM drive next to themultimedia PC, and so, it is hard to feel that the picturefrom a CD-ROM is a scene from somewhere at a distance.Interactive TV from packaged media is not "television" inthe strictest sense. It is "interactive" because it is not a"television."
From this point of view, the "television" cannot beinteractive, but the metal or optical wires of CATV havethe potential for making CATV a true interactive TV. WithCATV, information is obtained from over the metal oroptical wires, and these wires can be also used forcommunication among specified people. In this case, 'overwire" and "to specified people" characterize CATV'spotential as being suitable for interactive TV. A picturefrom CATV can give the impression that it is a scene fromsomewhere at a distance. Therefore, to make CATV a trueinteractive TV, there must be a random access storagesystem for each user at the CATV station. This might beimpossible because there would have to be as manyrandom access storage systems as there are subscribers. Itwould cost very much and would take a long time to copyinformation from one individual sources to other storagesystems.
MAMI-1 has shown the feasibility of the MAMI
coi.cept, and the MAMI concept will be able to makeCATV a true interactive TV.
4.2 Indirect Communication
From another point of view, it can be considered thatinteraction is a kind of communication and that anycommunication is accomplished with frequent interaction.Also, whatever is done with frequent interaction issomething like communication. It is necessary for twocommunicators to have something shared between them. Ifthere is nothing shared between two people, they cannotcommunicate at all.
Considering video games, they can make playersinteract with computer systems very frequently. In case ofsingle player games, a player gives some action to theworld which the video game prepared, and this worldreturns some action to him. Here, the player is havingfrequent interaction with the video game. Thus, the playerand the video game are communicating with each other.This phenomenon will be understood more obviouslywhen video games that are played by two or more peopleon the same field are considered, for example, tennis,soccer, and baseball games.
player A player B
Figure 7. An example of Video games.
With a table tennis game played by two people (Fig. 7),the two players play in a world that consists of a table,balls, rackets, and reflections on the floor. One player hasfrequent interaction with the video game, and at the sametime, he is interacting with the other player through theworld of table tennis. They are communicating togetherthrough the shared world that the video game prepared.This phenomenon is called "indirect communication."
Indirect communication has two steps. 1) One personwho is communicating with someone else knows theexistence of something shared between them, but neitherrecognizes that they are most certainly communicatingwith someone. This is one kind of situation that is seen inthe example of video games played by two or more people,that is explained above. This is indirect communication. 2)People know only the existence of something shared butthey do riot know the people beyond it. and of course, theydo not know they are communicating with anyone. This iseven more indirect communication.
4.3 Indirect Communication through MAMI
The capability of sharing information is one of the mostnoticeable characteristics of MAMI that was describedpreviously. People can be made to accomplish indirectcommunication through natural moving pictures withaudio and they will be controlled by software. In order toachieve this indirect communication, it will be necessary toadd features by which IvIAMI can know and control theinformation addresses players are enjoying. This will bedone as in Fig. 8 after MAMI's performance has beenimproved and MAMI has more MACs.
332
Figure 8. The Indirect Communication Controller (ICC) inMAMI
Some examples of more indirect communicationthrough MAMI are given.
1. A person is enjoying multimedia software throughMAMI. He is thinking that it is similar to that on astand-alone multimedia PC. However, the softwarehas some control points he does not know about. Theindirect communication controller (ICC) chooses theway for him without his knowing with seeing whatkind of action the other players are taking with thesoftware. He is indirectly communicating with otherpeople.
2. This situation can be applied to linear movies. Aperson is enjoying a linear movie. He is thinking thatit is a kind of conventional linear movie, but it has atree structure in the direction of time passage withsome control points (Fig. 9). At these points, thesoftware on the ICC chooses the way for him withouthis knowing it. It is accomplished by the informationwhich address in the movie other people are enjoying.Of course the information such as what day it is andwhat time it is can also be used. This is more indirectcommunication, too.
control i oint A
Start S
control
Situation 1
Situation I'
oint B
p,
Situation 2
Situation 2'
Situation 2'
Situation 2".
The Direction of Time Passage
Figure 9. An example of information in indirect communication
S. Conclusions
MAMI-1 is the first prototype based on the MAMIconcept of a multiple-access server for moving pictureinformation. Three users can simultaneously randomlyaccess moving picture information in one storage systemthrough MAMI-1. By improving MAMI-1, many morepeople will be able to do that and MAMI will be necessaryfor achieving an interactive TV. Further, it was shown thatMAMI will add a new direction called indirectcommunication to interactive TV.
References
[1] J. Kishigami, N. Sakurai and H. Nakano, "Storageconcepts for moving picture database on B-ISDN," PTC14th Ann. Conf., pp. 855-860, 1992.
[2] H. Tokuda, M. Kotera and C. W. Mercer, "AnIntegrated Time-Driven Scheduler for the ARTSKernel," Int. Conf. on Computers and Communications,March 22-25, 1989.
(3] A. Ishikawa, J. Kishigami, N. Sakurai and N. Kotani,"MULTIPLE- ACCESS MOVING PICTUREINFORMATION SYSTEM (MAMI)," GLOBECOM'92, session 23.4, 1992.
[4] M. Seltzer, P. Chen, J. Ousterhout, "Disk SchedulingRevisited," USENIX Winter '90, pp. 313-324.
[5] M. Seltzer, P.Chen, J. Ousterhout, "Disk SchedulingRevisited," USENIX Winter '90, pp. 313-324.
333
CALLING ALL TELEVISIONS?THE CONVERGENCE OF THE CABLE TELEVISION
AND TELEPHONE INDUSTRIES IN THE UNITED STATES
Richard L. GoldbergGraham & James
San Francisco, California
Technological, historical, political, regulatory, and economic forces are
creating growing incentives for cable and telephone industries in the United
States to operate in each other's bailiwicks. These forces appear to be
combining to cause the convergence of the cable television and telephone
industries. Several different scenarios may lead to such convergence.
Convergence could be effected by means of competition, co-option, cooperation,
coercion, or a combination thereof. Ultimately, however, consumer
preferences, based on need, convenience, and cost, will establish the pace and
scope of convergence and the extent of the integrated telecommunications
market.
1.0 INTRODUCTION
When I was a child in the mid-1960s, my familywent to see the New York World's Fair. As a
four-year-old, I was excited and impressed bythe gleaming images of Tomorrow presented at
various pavilions. General Motors offered aride into the future in their big, bright,American-made cars. The City of New York
provided a tour of a clean, modern, easily
accessible metropolis. Walt Disney brought thechildren of the world together in song,proclaiming in unison that "it's a small world
after all." And AT&T declared that "thetechnology of tomorrow is here today," asevidenced by its latest invention, the
Picturephone.
More than a quarter of a century later, thehyperbole of those predictions stands in starkcontrast to present realities. The American
car industry has lost much of its luster. The
"Big Apple" is not the shining traversable cityit hoped it would become. The world has grown
smaller via high-speed transit andcommunications, but the gulf between the"haves" and "have nots" of the world has grown
wider. And we're still waiting for the
Picturephone.
Clearly, predictions, once pronounced, may notalways resemble reality, once achieved. It is
with this understanding that this paperconsiders the advent of fully-integratedcommunications technology in the United States.
It appears that the long-heralded "convergence"
in the provision of voice, data and full-
motion video communications technologies is
finally about to become an actuality in the
U.S. Still, questions remain: Who are the
players in the converging telecommunications
industries? What forces are causing the
convergence of these services? How will such
convergence occur? Will the general public be
willing or able to partake of these
technologies? This paper addresses each
questiwi ii, tarn.
334
2.0 THE PLAvERS
The players interested in the convergence of
cable television and telephone communications
technologies come from many formerly distinct
realms of the communications industry.
Participants from the mass-appeal news and
entertainment media include: Owners and
operators of cable television systems; the
publishers of print media; broadcast television
networks; television stations; programming
production companies; videocassette retailers;
advertisers; the music industry; and the movie
industry.
Participants from the "common carrier" network
transmission business include: Telephone
companies created by the breakup of the Bell
system (the Regional Bell Operating Companies
("RBOCs") and local telephone companies); long
distance telephone companies (including AT&T,
MCI, Sprint, and a host of nondominantinterexchange carriers); competitive accessproviders (entreareneurial local and/or
interexchange companies providing alternative
means of interconnection with the local phone
system); telecommunications equipmentmanufacturers; cellular and paging licensees;
companies interested in providing personal
communications services ("PCS"); satellite
manufacturers; and satellite transmission
service providers.
The computer and data processing industries
also are centrally involved in the convergence
of technologies. Interested parties include
Manufacturer:: and designers of mainframe
computers, personal computers and semiconductor
chips; computer hardware and software vendors
data processors; distributors of consumer
electronics; and video game creators.
Others involved in the shaping of the broadband
digital network include: Federal and state
regulators; municipal franchising authorities,
educators; the banking industry; alarm and hone-
security providers; and, of course, business
and residential consumers.(1)
3.0 THE FORCES CAUSING CONVERGENCE
3.1 The Technological Engine
Technological innovation has progressed to the
point that audio, video and data services can
now be provided over fiber optic cable, coaxial
cable, and even over twisted copper wire pairs.
Nevertheless, it is the deployment of fiber
optic cable that represents the most dramatic
change in the communications infrastructure.
Today, both telephone networks and cable
television systems use coaxial cable as their
primary distribution lines. Coaxial cable
contains 1 GHz of technical capacity. However,
electronic radio signals carried on coaxial
cable are subject to substantial signal loss.
An amplifier must be installed approximately
every 2,000 feet to boost the signal.
Amplifiers contribute noise and signaldistortion, which reduce channel capacity.Coaxial cable systems deliver approximately 75
video channels.(2) Fiber optic networks, on
the other hand, conveying digitized pulses of
light, can carry signals for 20 miles without
amplification. Decreasing the number of
amplifiers on the network significantly reduces
noise and distortion and increases channel
capacity to 150 video channels.(3)
Fiber optics, coupled with technologicaladvances such as digital switching, digital
compression, and changes in systemsarchitecture from "tree-and-branch" to "star"configurations, offer both the cable andtelephone industries the ability to carryextensive two-way voice, data, and full-motionvideo communications into the home or office.
However, local telephone companies remain
hamstrung by a vestige of their past -- the use
of twisted copper wire pairs to transmitmessages "the last mile" into the residence or
business. These wires have only 4 KHz ofcapacity, a paltry amount compared to the"broadband" 1 GHz capacity of coaxial cable.This difference in the "drop" wire to the
customer has lead several industry analysts to
predict that the cable television industry is
better positioned than local telephonecompanies to provide integrated communicationsservices to consumers.(4) However, it should
be noted that Bellcore has developed technology
to transmit one channel of high-quality video-on-demand service transmitted at 1.5 Mbps over
ordinary copper telephone lines.(5)
3.2 Historical Evolution
The historical walls between the telephone,television, and computer industries are being
eroded at an ever-quickening pace. One element
in the convergence of these industries has been
the growing ubiquity of cable television and
telephone distribution plant. Currently, 93
percent of U.S. households have telephones,
60 -'ercent of America's homes are served
by cable television.(6) According to William
Johnson, President of Scientific Atlanta, 90
percent of all homes in the U.S. will be passed
335
by fiber optic cable by the year 20ut. (7) This
means that by the end of the century. mosthomes will have two "wires" connecting them toincreasingly sophisticated communicationsservice providers.
Another factor in the evolution towardconvergence has been the increasingaddressability of cable television systems.Traditionally, telephone networks have providedtwo-way communications between end users (so-called "interactive" communications), whilecable systems have offered one-way service (so-called "passive" communications) to their
subscribers. Although cable subscribers couldswitch channels on their television sets, theycould not "talk back" to the cable headend,which transmitted all of its service offeringssimultaneously "downstream" to the home. Now,
however, with the deployment of fiber opticsand the advent of digital switching andaddressable converters, cable televisioncompanies will become increasingly able to"flip the paradigm" to provide interactive,multimedia communications between the customer
and the headend.(8) Some expect even moredrastic changes over time. According toNicholas Negroponte, Director of the MediaLaboratory at the Massachusetts Institute ofTechnology, television and telephone services
are in the process of trading places, withtelevision services migrating from the airwavesto delivery via cable, while telephone servicesswitch from copper wires to mobile wirelessservices such as cellular telephones.(9)Whether this role reversal actually comes topass, it appears that from a technicalstandpoint, audio, video and datacommunications in the future will betransmitted as digitized "bits" of information
3.3 The Political Agenda
President-elect Bill Clinton and Vice-President-elect Al Gore have made the creationa national telecommunications infra-structure ahigh priority for the new Administration.During his campaign, Clinton said that anational communications network "could do forthe productivity of individuals at their placesof work what the interstate highway of the1950s did for the productivity of the nation'stravel and distribution system."(10) As a
Senator, Vice-President-elect Gore was at theforefront of legislative activity in the area
of telecommunications. He introduced the HighPerformance Computing Act of 1990, which becamelaw in December 1991, to fund the developmentof high-performance computer software andhardware over a five-year period.(11) In 1992.
Gore introduced a bill seeking to provide thetechnologies developed under the HighPerformance Computing Act to hospitals. schoolsand businesses.(12)
The new Administration is not alone in having avision of the telecommunications network of thefuture. The American political climate overthe past three Administrations has encouragedcompetition to replace the monopoly model inthe provision of telecommunications servicrs
There is currently a vigorous debate over thepropriety of establishing a telecommunicationssystem by legislative fiat. Senator ConradBurns (R-Montana) has enunciated "a vision of abroadband fiber optic network linking everyhome, school, hospital and business by the year
2015." Senator Burns notes that Japan willcomplete its deployment of fiber optics by 2015and argues that the U.S. "simply can't affordto be left behind."(13) A competing vision of
the future is offered by Kenneth Gordon,Chairman of the Maine Public UtilitiesCommission and President of the NationalAssociation of Regulatory UtilityCommissioners. According to Chairman Gordon,no one has a clear view of what the country'stelecommunications system will look like fiveor ten years from now. Therefore, it is themarketplace, rather than regulators andlegislators, that should decide the propercourse of action. Chairman Gordon considers it"critical is that there be a flexibility and anopenness to choices, and that we avoid gettingourselves locked into particular visions, suchas fiber-to-the-home by 2015 . . . ."(14)
One recent piece of legislation worth noting isthe Cable Television Consumer Protection andCompetition Act of 1992 ("the CableReregulation Act").(15) The Cable ReregulationAct, enacted by Congress over President Bush'sveto, calls for the regulation of cablesystems' basic service rates where effectivecompetition does not exist.(16) Interestingly,
however, the Cable Reregulation Act leavesunregulated that portion of cable serviceoffered on an addressable, "a la carte" basisto subscribers. Thus, it appears likely thatcable service will continue to move towardpersonalized "custom-tailored" serviceofferings in an attempt to avoid furtherregulation.
3.4 Regulatory Reevaluation
The cable television industry, historicallysubject to only ancillary federal regulation,and telephony, historically permitted tooperate as a monopoly utility and traditionallyexempted from content-based regulation, wouldappear to be well-positioned to capitalize onthe telecommunications deluge of the digital
Information Age. However, the pace ofderegulation has slowed and, as in the case ofthe Cable Reregulation Act discussed above,even reversed course. The regulatory climate
has shifted significantly toward head-to-headcompetition between cable television andtelephone service providers. This movement isengendering an attempt to create a "levelplaying field" between the two industries.
Historically, carriers of audio, video and datasignals have been subject to differentialregulatory treatment based on the means their
signals were disseminated. Broadcasterstransmitting audio and video signals over theairwaves were licensed, due to the scarcity of
spectrum. Broadcast licensees were publictrustees, charged with the responsibility ofexercising editorial control in the publicinterest over the content of their
336
transmissions. Telephone companies, on theother hand, provided wire "pipelines" for thetransmission of audio and data communicationson a common carriage basis. They operated as
public utilities, and were required to filetariffs to ensure that their rates werenondiscriminatory, but they maintainedvirtually no responsibilities or control as tothe content of such transmissions.
This hard and fast distinction betweenbroadcasters and common carriers began to breakdown with the evolution of cable televisionservice from a community antenna retransmissionservice to a provider of original andretransmitted audio and video programming.Cable system operators act as editors,gatekeepers, and common carriers, depending onwhether particular channels are classified asbasic or premium service, leased access, orpublic, educational or governmental access
channels. The courts have found themselvescontinually hard-pressed to justify the FCC'sjurisdiction over cable service as "reasonablyancillary to the effective performance of theCommission's various responsibilities for theregulation of television broadcasting."(17)Indeed, some argue that the government shouldabandon content regulation entirely and adoptthe common carrier model with respect to cableservice. (18)
One area it which the Federal CommunicationsCommission ("FCC") may seek to imposeconsistent rules on both industries concerns
home wiring. In a forthcoming rulemakingproceeding implementing the Cable ReregulationAct, the FCC has been ordered to establishrules regarding the ownership and use of wiresinstalled by the cable operator after thesubscriber cancels cable service. The FCC is
likely to seek comment on the extent to whichsuch rules should parallel the FCC's rules ontelephone inside wiring. This rulemakingproceeding must be completed by February 2,1993.
The FCC also has sought to revise the currentrestrictions prohibiting telephone companiesfrom providing video service and owning cable
television systems. In two recent decisions,the FCC modified its rules to enable localtelephone companies to compete in the videomarketplace through the provision of videodialtone service on a nondiscriminatory commoncarrier basis without obtaining a cable
television franchise. The FCC also loosenedits rules regarding the purchase of financialinterests in cable systems by telephonecompanies, and recommended to Congress that thestatutory telephone company-cable televisioncross-ownership restriction (47 U S.C. §
533(b)) be repealed.(19) The FCC hadpreviously ruled that the telephone company.cable television cross-ownership restrictiondid not apply to long distance interexchangetelephone companies.(20)
The FCC clearly is inclined to open the market
to all potential providers of advancedtelecommunications services. The FCC recently
modified its technical rules to facilitate the
introduction of advanced home automation andcommunications systems, including security andenergy usage monitoring devices.(21) The FCC
also is expected to adopt a digital standardfor High Definition Television ("HDTV") service
in February 1993, which should spur themarketing of HDTV to the public as well as thecreation of programming in that format.
3.5 Economic Factors
One major reason for convergence is that whileboth industries are deploying increasingamounts of fiber optic cable in trunk, feeder
and distribution plant, fiber is becoming ever
more economical. The cost of fiber optic cablehas steadily declined since 1982, and thematerial price of fiber cable is expected tocontinue to decrease at an average of 5 percenteach year from 1990 to 1998.(22)
Concurrently, the cost of microprocessor chipsis coming down in reverse exponential value.Thus, it will be cheaper in the future to put"smart" converter boxes into cable subscribers'
homes. It also will be easier for cablesystems and telephone companies to provide vast
quantities of memory and computing capacity attheir respective headends and central offices.Increased availability of storage space fordigitized information is a prerequisite toprovide the level of video-on-demand servicethat digital compression will make possible.
Both the cable and telephone industries alsocontinue to increase their ownership interestsin emerging communications technologies such ascellular and personal communications systems.In addition, leading companies in bothindustries are participating in domesticexperiments and overseas joint venturescombining cable television and telephonicfunctionalities. These investments haveexpanded potential revenue sources, whileincreasing the potential rivals' knowledgeregarding the operation of each other's
businesses. However, overseas operationscontinue to be a drain on the financialresources of RBOCs such as Pacific Telesis.(23)
4.0 POTENTIAL CONVERGENCESCENARIOS
4.1 Competition
As noted above, the digitization ofcommunications will turn audio, video and data
signals into technically indistinguishable bitsof information. While technologicalconvergence appears likely, it is far lessclear whether direct competition between thecable and telephone industries actually will beallowed to take place in the U.S.
The historical, political, regulatory, andeconomic forces which have brought theseindustries toward each other also could act tokeep them apart. For example, strong politicalopposition to convergence is coming from theentrenched print and broadcast media and themovie industry, which seek to maintain theirholds on the text and video markets. Consumer
337
groups and local franchising authorities,having just regained regulatory control overcable television systems' basic service races,would not react favorably to a proposal to let
cable systems loose in the free market again in
the near future. Nevertheless, technology
remains the dominant factor driving these
industries toward convergence. Thus, it
appears likely that the cable and telephone
industries will continue to move closer to some
semblance of competition.
The emergence of standardized protocols for
reception and interconnection are likely toincrease competition between cable andtelephone companies for large-volume customers
such as data processors. Although politicians
may differ as to the proper pace and means to
by which to modernize the country'stelecommunications infrastructure (and whoshould pick up the tab), it is unlikely thatthe new Administration will put up roadblocks
to increased competition. As noted above, it
is increasingly difficult to justify differentregulatory structures for industries becoming
technically indistinguishable. A movementtoward regulatory reciprocity is likely tocontinue gathering momentum, perhapsculminating in a lifting of the restrictionsimposed on RBOCs in the Modified FinalJudgment(24) in the near future, or at least .transfer of power from Judge Greene to the FCCThere may also be a wholesale revisiting ofregulation of common carriers under Title Il ofthe Communications Act of 1934.(25)
Most importantly, it is far from certainwhether either industry wants to take on the
other head-on. For one thing, the economicstakes are enormous, and both industries coulddo very well for themselves by sharing themarket rather than expending vast resourcestrying to knock each other out of the ring. 11,
addition, there remain vast differences in themarkets for cable television, telephone andcomputer services. As one observer noted.
there's a big difference between thetechnically sophisticated "nerd" using apersonal computer to access databases and the"couch potato" skimming cable programmingchannels with a remote control device.(26)Marketing strategies targeting the demographiccontinuum between these two extremes will becritical factors in the success of the cabl,industry's entry into interactive programmingand the success of the telephone industry'sentry into video service provision
4.2 Co-option
One way to accelerate convergence is for acompany in one industry to buy its way into the
other. This is precisely what AT&T has dunewith its buyout of NCR and its proposedpurchase of a substantial share of McCawCellular Communications. AT&T has built upon
its dominance in the long-distance telephonebusiness by purchasing a major data processinr.company and becoming a co-venturer with theleading proponent of wireless communications
AT&T thus is well-positioned to reinforce and
.3
expand its lead in the provision of audio, dataand image processing services.
Under the co-option scenario, statutory andregulatory restrictions prohibiting the cross-ownership of cable systems by telephonecompanies would be removed. Antitrustrestrictions preventing remonopolization wouldbe eased. The prohibitions on manufacturingplaced on RBOCs in the Modified Final Judgmentalso would be lifted. Free market forces wouldbe permitted to operate to their fullestextent.
For a number of reasons, this scenario isunlikely to occur. It would be a massivetechnological undertaking to forge all of theexisting communications networks into onecentralized organization. Such a developmentwould buck the historical trend of the pastfifteen years away from monopolization of thecommunications market. There would be seriouspolitical ramifications once it became apparentthat one company was trying to become "BigBrother." Numerous regulatory obstaclesdescribed above would have to be rolled backfor unfettered market forces to operateproperly. From an economic standpoint, itwould be too costly for Tele-Communications,Inc. ("TCI") (the largest cable serviceprovider), AT&T or IBM to attempt to buy eachother out.
4.3 Cooperation
In this scenario, cable, telephone, andcomputer companies form strategic alliances,enter into partnerships, and create researchconsortia to combine their resources andthereby bring about convergence in acoordinated manner. Cooperative ventures aretaking place already. For example, TCIrecently signed a letter of intent with AT&Tand General Instruments to purchase one millionfully addressable television converters for thepurpose of providing digital video technologyto satellite dish owners in the summer of 1993and to cable system subscribers in early1994.(27) Sammons Communications, an operatorof multiple cable systems, and New Jersey Bellrecently announced plans to jointly delivervideo dialtone programming beginning in 1993using fiber optic technology supplied byBroadBand Technologies.(28) Many cablecompanies have joined forces to createCableLabs, a research and developmentlaboratory similar in design to Bellcore, thetelephone research facility. The federalgovernment also has fostered cooperation bycreating Sematech, a research and developmentconsortium founded in conjunction with variousmembers of the domestic semiconductor industry.
A spirit of cooperation, whether voluntary orpolitically engineered, could result in anunprecedented level of coordination between thetelecommunications industries in developingAmerica's fiber optic infrastructure. Ideally,
cooperation could lead to an efficient divisionof labor and services offered by each segment
of the telecommunications industry. Each
company could concentrate on the market and
338
products it knows best, while the consortiumtakes a more holistic view, creating asynergism between existing technologies andfuture needs and applications.
It should be noted that strategic alliances donot always work out. Such cooperative venturesare often entered into for the wrong reasons.Weaknesses in the participants may be ignored.The partners may be incompatible in terms ofrelative size. There may also be a lack ofattention paid to internal continuity inmanaging the partnership after the deal is
announced.(29) Still, if all participantsenter into cooperative ventures with their eyes
open and retain their cooperative spirit during
the life of the alliance, cooperation can payoff sizable economic and political dividends.
4.4 Coercion
Under this scenario, players are required tocombine their resources to achieve centrally
determined goals. This mandatory teamworkapproach may result from strong political,regulatory or economic forces acting upondecisionmakers in the public and private
sectors. MITI, the Japanese technologyministry, stands as the most powerful andsuccessful example of this approach. Another
example is Sematech, created in response to thehue and cry over the impending demise ofAmerica's semiconductor industry. There may be
instances where private companies urge thegovernment to take action to resolvelongstanding obstacles to competition, as inthe establishment of a digital standard forHDTV by the FCC. Some, such as Senator Burnsand Henry Geller, would push the federalgovernment to issue a mandate requiring theconstruction of a national fiber-to-the-homeinfrastructure by 2015.(30)
The creation of convergence by governmentalmandate is certainly a possibility. Such .
development arguably would favor the telephonecompanies, which have been eager to installfiber beyond feeder trunks but have met withpublic criticism in attempting to shift thebrunt of installation costs from shareholdersto ratepayers.(31) In recent months, however.the cable industry has begun to get the messageout that they are already in position toprovide a broadband pipeline.(32) The recent
demonstration by Digital Equipment Corporationand Microsoft of their multimedia capabilitiesvia Ethernet and cable hookups at the WesternCable Show provides further basis for thespeculation that the computer industry is stillweighing its economic and technological
options.
Computer companies may play a decisive role inthe public debate over the extent ofgovernmental involvement in the creation of abroadband digital network The computerindustry, with its expertise in dataprocessing, sits squarely at the fulcrumbetween the cable and telephone industiiesIndeed, the computer industry conceivably couldengage in an economic squeeze play of its own.dictating ro both the cable and telephone
industries the parameters it requires for
interconnectivity.
4.5 Combination of the Above
The most likely means by which convergence will
occur is a combination of the scenarios
described above. Neither the cable nor the
telephone industries are monoliths. Their
participants are not likely to operate in
lockstep with the most readily familiarcompetitors within their industries, for fear
of being left in a position of parity, which
may be viewed as a competitive disadvantage.
There are too many legal obstacles tounfettered competition, but the FCC iscertainly poised to permit direct competitionon a carefully circumscribed basis.(33) Co-
optive strikes and cooperative ventures have
been undertaken, while the battle lines for
debates on further governmental interventionare still being drawn. In the end, a melange
is likely; a mixture of little bit of
everything.
5.0 WHAT WILL CONSUMERS WANT?
Consumers seemingly take to high-speedcommunications services like ducks to water,
once a critical mass of relative ubiquitybecomes apparent and prices recede to an
acceptable level. Witness the rapid growth of
the market for cellular telephones, facsimile
machines, and laptop and notebook computers.There remains a significant obstacle to the
deployment of fully integrated communicationsservices: The age-old chicken-and-egg problem
in regard to testing the extent of consumer
demand vis-a-vis constructing platforms by
which to provide such services: Which comes
first?
It appears that deployment of fully integratedcommunications technology will have to precedeeffective testing of consumer preferences. As
one cable industry participant recentlyobserved, companies investing in a broadbanddigital network and concerned about consumerdemand must take to heart the message of the
movie "Field of Dreams:" "If you build it,
they will come."(34)
But will they stay? This question raises the
central issue as to the development of advanced
telecommunications services: A myriad of new
technologies and applications are being created
by the convergence of the cable and telephone
industries, but what services will consumers
want? Technology alone will not create a
sustainable customer base.
As James Beall of The Prodigy Services Company
recently stated, every new product "mustprovide something incremental of added value to
consumers."(35) The seemingly endless riversof information that will flow into consumers'homes and businesses via digitization threaten
to overwhelm end users. Consumers' needs
should be identified and specificallyaddressed. The public should be educated about
the systems being installed and the services
provided.
SST COPY MAILABLE 339
There are several critical inquiries that the
cable and telephone companies must answeraffirmatively, or they risk missing their
target market. Do the services offered bring
added convenience to customers' lives? Is the
interactive systems deployed in home orbusinesses relatively easy to operate? Will
the new services accomplish specific tasks
faster than existing technologies? Are these
new services being offered at prices consumers
will be willing to pay on a long-term basis?
No one wants to invest in a technology that
turns out to be a mere curiosity. For example.
the "need for speed" was the original purposebehind the rollout of the telephone companies'Integrated Services Digital Network in 1986.
but six years later, the technology is still
derided for failing to live up to itspotential; according to one joke, the initials
"ISDN" are said to stand for "It Still Does
Nothing."(36)
6.0 CONCLUSION
Technological convergence is coming, with theintroduction of fiber optic cable, digitalswitching and digital signal compression. The
government is likely to "get out of the way" to
enable its deployment. No one industry is
likely to emerge as the dominant digitalpipeline, given the relative ubiquity of cableand telephone lines. The private players have
an opportunity to create an infrastructure of
lasting value to American consumers.Ultimately, however, consumers will decide forthemselves the extent to which convergence
serves them.
(1) See Communacopia: A Digital Communic....1c.
Bounty 4 (1992).
(2) Kaplan, "Cable Television," inCommunacopia: A D'Igital Communication Bounty 9
(1992).
(3) Id. at 13.
(4) See Gilder, "Cable's Secret Weapon."Forbes, Apr. 13, 1992, at 80 -84; Morris,"Telecommunications Services," in Communacopia-A Digital Communication Bounty 27 (1992).
(5) Morris, "Telecommunications Services," in
Communacopia: A Digital Communication B.:unLy
30 (1992).
(6) Gilder, supra note 4, at 80.
(7) Remarks of William Johnson at the WesteinCable Show, Dec. 3, 1992.
(8) Remarks of James Albrycht at the Uestrr
Cable Show, Dec. 2, 1992.
(9) San Jose Mercury News Oct 25, 1992. at
24A.
(10) Gov. Bill Clinton, quoted inCommunications Week, Nov. 9, 1992, at 78.
(11) High Performance Computing Act of 1991,
15 U.S.C. §§ 5501 pt sec. (1991).
(12) Information Infrastructure and Technology
Act of 1992, S. 2937 (not enacted).
(13) Burns, "Taking The Lead At Home And
Abroad," Phone +, Jan. 1992, at 25.
(14) Gordon, "Policymakers Should Enable
Private Decisionmakers " Phone +, Jan. 1992, at
26-27.
(15) Cable Television Consumer Protection and
Competition Act of 1992, Pub. L. No. 102-385,
102 Stat.1460 (1992) ("the Cable Reregulation
Act").
(16) Cable Reregulation Act, § 3, 47 U.S.C. §
623 (1992).
(17) U.S. v. Southwestern Cable Co 392 U.S.
157, 178 (1968).
(18) See Geller, Fiber Optics: An Opportunity
for a New Policy? 23 (1991).
(19) Telephone Company-Cable Television Cross-
Ownership Rules. Sections 63.54-63.58,
Memorandum Opinion and Order onReconsideration, 7 FCC Rcd. 5069 (1992);
Telephone Company-Cable Television Cross-
Ownership Rules, Sections 63.54-63.58, Second
Report and Order. Recommendation to Congress.
and Second Further Notice of Proposed
Rulemaking, 7 FCC Red. 5781 (1992).
(20) Telephone Company-Cable Television Cross-
Ownership Rules. Sections 63.54-63.58, First
Report and Order, 7 FCC Rcd. 300, 306 (1991).
(21) Amendment of Part 15 to Enable the
Widespread Implementation of Home Automation
and CommunicationTechnology, Report and Order
7 FCC Rcd. 4476 (1992).
(22) Geller, supra note 18, at 10.
(23) "The Baby Bells' Painful Adolescence,"
Business Week, Oct. 5, 1992, at 126.
(24) United States v. AT&T, 552 F.Supp. 131
(D.D.C. 1982), aff'd sub nom. Maryland v. U.S.,
103 S. Ct. 1270 (1983) ("Modified Final
Judgment").
(25) 47 U.S.C. §§ 201 at seq.
(26) Remarks of Rob Glaser at the Western
Cable Show, Dec. 2, 1992.
(27) Remarks of Dr. John Malone at the Western
Cable Show, Dec. 2, 1992; San Francisco
Chronicle, Dec. 2, 1992, at Al.
(28)Broadcasting, Nov. 23, 1992, at 4.
(29) Farabelli, "Forming Successful
Telecommunications Industry Strategic
Alliances," TeleStrategiesInsight, Nov. 1992,
at 4.
340
(30) See generally Burns, supra note 13;
Geller supra note 18.
(31) See, e.g., Alternative Regulatory
Frameworks for Local ExchangeCarriers, 33 Cal.
PUC 2d 43 (1989).
(32) See Gilder supra note 4.
(33) See notes 19-20, supra.
(34) Remarks of Mark Coblitz at the Western
Cable Show, Dec. 2, 1992.
(35) Remarks of James Beall at the Western
Cable Show, Dec. 3, 1992.
(36) Churbvck, "The Copper Wire Gets Fatter,"
Forbes, Oct. 12, 1992, at 140.
Harnessing Telecommunication Technologies for EnhancingNational Competitiveness and Quality of Life:
The Singapore IT2000 Project
Dr. Boon Siong NEODr. Christina SOH
Information Management Research CentreSchool of Accountancy and BusinessNanyang Technological University
Nanyang AvenueSINGAPORE 2263
1. ABSTRACT
In April 1992, Singapore announced its national IT strategy,codenamed IT2000, that would support its continuing economic andsocial development well into the 21st Century. This paperdiscusses the major tenets of the IT2000 plan, and the processby which the plan was developed.
2. INTRODUCTION
In the past decade, increasingemphasis has been placed on informationtechnology (IT) as a key enabler inSingapore's efforts to achieve greaterproductivity and internationalcompetitiveness. To better exploit thepotential of IT, the government ofSingapore has undertaken a number ofnational IT planning exercises, of whichthe most recent is IT2000. The goals ofIT2000 are to "create new nationalcompetitive advantages and enhance thequality of life in Singapore" throughthe further development of Singapore's ITinfrastructure and strategicapplications.
The process by which this large-scale planning was conducted is likely tointerest many, particularly those who areconcerned with national IT planning, orwith increasing their industry'scompetitiveness through cooperative ITplanning among firms within the industry.In describing the planning process andthe context, we seek to provide thereader with an understanding of hownational consensus on the IT2000 plan wasforged, and how such a large-scaleplanning effort was managed.
We were able to document the IT2000planning process in our role as academicobservers. We had no involvement in thedesign of the planning process, nor inthe process choices made during its
execution. Our understanding of theprocess has been built on interviews withmany persons closely involved in theplanning process, press releases andother documentation, participation in theactual planning sessions, andquestionnaire survey of industryparticipants of the planning process.
341
To provide a context forunderstanding the IT2000 planningprocess, we present an overview of thesurrounding circumstances in the nextsection.
3. THE CONTEXT FOR IT2000
Singapore is a small island nationwith very limited natural resources.It's early economic history centredaround its development as a Britishtrading port midway between India andChina. Today, the population of threemillion are its prime resource as itstrives to further develop the financial,commercial, manufacturing, tourist andother sectors to spur its continuedeconomic growth.
The Singapore economy can beconsidered to be capitalistic in nature.However, unlike many Western capitalisticeconomies, the government plays a keyrole in setting overall industrialpolicies, and in particular leading theway in newer areas identified as beingcrucial for national economic growth.The area of IT is a prime example.
In the early 1980s, IT wasidentified by the government as a keyenabler in moving Singapore into highvalue-added products and services. Aministerial Committee on NationalComputerization was formed to spearheadthe first national IT planning effort.Its report contained four importantrecommendations: development of a largenumber of IT professionals,computerization of the civil service,development of a computer softwareindustry, and establishment of a NationalComputer Board (NCB) to coordinate theimplementation of Singapore's ITpolicies.
By 1985, the government felt thatSingapore had the components of an ITinfrastructure and industry, but thatthey needed to be integrated. A secondnational IT planning effort wasundertaken under the leadership of acommittee comprising representatives fromthe NCB, Economic Development Board,Singapore Telecoms and the NationalUniversity of Singapore. The results ofthis planning effort are noteworthy forits focus on the encouragement of ITapplication in the private sector, thedevelopment of industry-wide networks,and promotion a local IT industry. TheTradeNet EDI system is an example of whatcame out of the 1985 plan.
IT2000 may be seen as the third ina series of five yearly national ITplans. Its focus appears to be ondeepening the use of IT in industrythrough the development of a nationalinformation infrastructure,implementation of strategic applicationsfor key industrial sectors, and in makingIT a part of everyone's lives. The lastarea of focus is a new one, and opens upmany social issues which previous ITplanning efforts did not. Yet, the newfocus on bringing IT to the people wasnot surprising given that IT2000 was alsoseen as the IT community's response tothe government's recently publishednational agenda, entitled "The Next Lap."In this slim glossy volume, the newpolitical leadership of Singaporeoutlined its aspirations for a Singaporethat would be "more prosperous, gracious,and interesting over the next 20 to 30years."2
4. THE IT2000 PLANNING PROCESS
IT2000 was initiated, coordinatedand executed by the NCB, in its role asthe government agency responsible forformulating and carrying out national ITpolicies. The NCB's competence andcorresponding reputation has grownsignificantly in the decade since itsformation. This in no small waycontributed to its ability to undertakethe massive effort associated withIT2000.
The groundwork for IT2000 was laidin 1990 by a small team of NCB managerswho visited corporations, universitiesand cities in the United States that wereconducting large scale IT planningprojects. They were unable to find anyplanning projects that were on the scaleof IT2000, and became convinced that theywould have to chart new territory indesigning the planning process forIT2000. A review of the existingplanning methodologies and discussionswith a firm of U.S. consultants led tothe conclusion that these were toodetailed, and too specifically tailored
for organizational-level project andbudget-based types of planning. IT2000,on the other hand, was being conceived asa broad-based, sectoral planning effort.
In designing the IT2000 planningprocess, the NCB planners decided thatthe approach would be based on thefollowing pragmatic principles:
1) It would rely on demand-pull; where anunderstanding of industry's actual needswould drive the development of the
infrastructure andnecessaryapplications.
2) It would be a multi-agency effort,with participation from industry andacademia.
342c;
3) The output of the planning processwould be actionable projects, that wouldfeed the next phase of systemsengineering.
A major part of the planning effortwas organized by industry sectors. Elevensectoral groups (see Table 1), eachcomprising representatives from industry(of whom one was appointed the sectoralgroup chairperson) and academia, as wellas a five-person NCB support team, wereformed. There were about 15 seniormanagers from industry in each group.These industry participants were usuallyindustry leaders, and many were alsoknown for their vision and support forIT. Their role was to review andvalidate the strategic applications fortheir sector. The role of the NCBsupport team was to work closely with thechairperson in facilitating the planningprocess, to provide secretariat andbackground research support for thesectoral meetings, and to write thesectoral report.
Table 1: Sectoral Coverage in IT2000
1. Construction and Real Estate2. Education3. Financial Services4. Government5. Healthcare6. IT Industry7. Leisure and Tourist Services8. Manufacturing9. Publishing and Media10. Retail/Wholesale/Distribution11. Transportation
A structure to manage the planningprocess was also created (see Figure 1).At the top of the structure is the IT2000steering committee, comprising thechairpersons from the sectoral groups andrepresentatives from Singapore Telecoms,other government bodies and tertiaryinstitutions. This committee was chairedby the chairman of NCB. The IT2000secretariat, a small group of NCBplanners, was the main designer andcoordinator of the planning process.
Figure 1: IT2000 Project Structure
(IT2000secreterIal
U2000Steering Committee
Sectorof Stung.0 Groups
("-- C I:F r
NCI3Sec tarot Stoat'/
n /
1T2000 Internationalnduisorg Panel
112000
'thc.00gUatifinerition,Adoisorgronel
The overall phases of the of theIT2000 planning effort were:
1) Development of the planning inputs:the IT2000 scenario (IT trends, thenational agenda, and socioeconomictrends), and a planning methodology forthe sectoral groups.
2) The sectoral group planning meetings:where industry and academic participantsmet with the NCB support team to discussstrategic IT applications for theirsectors. The deliverable was a reportfrom each sectoral group.
3) Analysis and consolidation of thesectoral reports.
The deliverable was a report to thecabinet as well as a public documentoutlining the IT2000 plans.
343
Within the sectoral group planningphase, there were also a number ofdistinct stages:
1) All groups began with a presentationfrom the IT2000 secretariat on the visionbehind IT2000 as well an overview of themain phases of the planning process.
2) Group participants' initial views ondesired strategic applications for theirsector were sought and discussed.
3) The NCB support team presented theirbackground research on key IT andsectoral trends.
4) More brainstorming among participantson strategic applications, and attemptsto consolidate the list of applications.
5) Discussion of feasibility of theapplications identified.
6) Evaluation of the initial draftsectoral report containing sectoralanalysis and list of recommendedstrategic applications.
All sectoral groups met five timesover a period of four months, for two tothree hours per meeting. As the sectoralplanning process guidelines were broad,there was much leeway for the NCB leadersof each sectoral group in implementingthe methodology. For example, some NCBsupport teams spent significantly moreeffort in attempting to build a model ofthe sector using functional decompositiontechniques than others.
Despite the variation within thesectoral group planning processes, thefinal report from each sectoral groupwas very similar in structure and scope,as the format was closely specified bythe IT2000 secretariat (see Table 2).These sectoral group reports wereconsolidated by NCB to form the overallIT2000 report which was approved by thecabinet, and publicly endorsed by thePrime Minister, Mr. Goh Chok Tong, inSeptember 1991, during the NCB's 10thanniversary celebrations.
?
Table 2:Contents of Sectoral Group Reports
1. Overview and economic profile ofthe sector
2. Current IT application profile andused within the sector
3. Impact of industry and IT trendsworldwide
4. National aspirations and a visionfor the sector
5. Descriptions of potentialstrategic IT applications
6. Descriptions of the majorinfrastructural issues that should beaddressed before the proposedstrategic applications may beimplemented.
5. THE IT2000 PLAN
The IT2000 Report has two majorrecommendations: the development of a
National Information Infrastructure(NII), and the implementation of sixtystrategic applications identified by theeleven sectoral groups. The componentsof the NII, presented at a relativelyhigh level of conceptualization, are the:
"Conduit, (which) refers to the physical'pipelines' that carry information.Examples of such pipelines include voiceand data lines, broadcast and cellulartransmission.
Content refers to information that flowsthrough the conduit. Examples of suchinformation include multimediacourseware, entertainment programmes,government database records and paymentinstructions.
Compute refers to the processing ofcontent in the NII. Examples of suchprocessing include user authentication,billing, and processing of permitdocuments. The three components of theNII are under the purview of severalgovernment agencies and involve theprivate and public sectors."
The report also states that the NII isaimed at helping Singapore to achievefive goals:
1. Developing a Global Hub: The NIIwill turn Singapore into a highlyefficient switching centre for
goods, services, capital,information and people.
2. Boosting the Economic Engine: TheNII will boost the competitivenessof every sector of the economy,especially those that increasinglyrely on information as a key factorof production.
3. Enhancing the Potential ofIndividuals: IT2000 will enableindividuals to enhance theirpotential through lifelong learning,be more efficient in performingneeded tasks, and have more timeavailable for cultural and creativepursuits.
4. Linking Communities Locally andGlobally: The NII will extend thepersonal reach of Singaporeans,develop their global mindset, andhelp to create electroniccommunities of people with similarinterests, cause or goals.
5. Improving Quality of Life: The NIIwill enrich the lives ofSingaporeans by increasingdiscretionary time, generating moreopportunities and choices inleisure, kinship, work and civicspheres of life.
The sixty strategic applicationprojects were compiled from the elevensectoral reports. The projects seek toincrease the overall efficiency andcompetitiveness of each sector. They arenot meant to endow any particular firm orgroup of firms within the industry withcompetitive advantage. The nature of theapplications may best be illustrated bysome examples. In the retail, wholesaleand distribution sector, one majorproposed application was the developmentof a centralized automated warehousingfacility. In the transportation sector,there was a proposal for a smart airportto cater to needs of travellers and cargoshippers for the next decade.
At present, the NCB is working onthe specifics of implementing the NII andthe first few of the strategicapplications. Some important changeshave already been undertaken tofacilitate the implementation process.The ministerial Committee for NationalComputerization has been reconstituted toinclude representatives from theSingapore Broadcasting Corporation andMinistry of Information and the Arts,potentially major players in the"conduit" and "content" components of theNII. Equally important, the NCB has beenreorganized, with a new division, theNational Information InfrastructureDivision, being formed. This newdivision has two departments; Planningand Infrastructure, and Application andPromotion.
344'
Much of the work involved infleshing out the details of the NIT andin implementing it, requires expertisewhich is scarce is Singapore. The NCBtherefore has launched a recruitmentdrive, particularly for thoseknowledgeable in policy development,information technolgy architects, andexperts in specific technologies for anumber of R&D projects.
6. CONCLUSION
The success of the IT2000 planningeffort cannot be fully evaluated until atleast some of its major recommendationshave been implemented. However, many ofNCB's key objectives in undertaking thisnational IT planning effort have beenrealized, and by this measure, IT2000 canbe considered a success. The keyobjectives of the planning includedobtaining widespread and high-levelsupport for the resultant IT masterplan,generating a set of strategicapplications, identifying likely ITchampions for each sector to facilitateimplmentation, and acquiring a betterunderstanding of the eleven sectorsstudied. The planning effort hastherefore made the climate forimplementing the IT2000 plans morefavourable. A large part of the successof the planning effort must be attributedto the commitment of the government to anindustrial policy that strongly supportsIT, to the existence of a competent andpowerful coordinating body such as theNCB, and to the "national planningclimate" that makes it possible to obtainthe time and cooperation of more than 200industry leaders.
7. REFERENCES
1. A Vision of An Intelligent Island: TheIT2000 Report, National Computer Board,Singapore, 1992.
2. Singapore: The Next Lap, TheGovernment of Singapore, 1990, pp 13.
3. A Vision of An Intelligent Island: TheIT2000 Report, National Computer Board,Singapore, 1992, pp 23.
345
Propulsion for Activation of Community in the Regionwith PC Networking Services
JUNKO FUKAMIZUFujitsu LimitedOsaka, Japan
1. ABSTRACT
Office automation in Japan has been implemented in and between companiesthrough personal computer networking. Vendors are exploring ways to expandcomputer use, especially into local communities, under the auspices of the
Japanese government. As an example, this paper introduces the "new-mediacommunity center" concept being promoted in Nishinomiya City.
2. BACKGROUND
2.1 NISHINOMIYA CITY
2.1. 1 HISTORY AND GEOGRAPHY
Nishinomiya, a 998.52-square-kilometer city insoutheast Hyogo Prefecture, lies between two ofJapan's most important ports, Osaka and Kobe.Seventy percent of Nishinomiya's population of421,267 (1985 national census) people are agedbetween 15 and 54. The population ischaracterized by a high degree of mobility dueto its location between Osaka and Kobe, whichit serves largely as a bedroom suburb.The city is famed for its shrine to the god ofhappiness, its history as a stopover on anancient route that served Western Japan, and thepurity of its water, which is used for brewingof SAKE (rice wine).Most major surface traffic between Eastern andWestern Japan passes through Nishinomiya, vianational highway and railways, making it animportant passenger and freight connection.
2.1.2 SOCIETY AND INDUSTRY
As a suburb, Nishinomiya is a patchwork quiet ofresidences and industrial plants. In additionto SAKE brewing, local industries include foodand drink, sundries, and other retail goods.Commerce -- and purchasing power -- remainslargely in Osaka and Kobe, despiteNishinomiya's numerous tourist attractions andten universities, all of which attract largenumbers of people. Agriculture accounts foronly a small part of the city's employment,with most farmers also having part-time jobs.Dairy and multiple-crop agriculture account forthe majority of work. As a whole, the city'spopulation is cosmopolitan and sensitive tochanges in lifestyle and fashion.
2.2 INTRODUCTION OF THE "MEDIA-ORIENTEDCOMMUNITY CENTER" CONCEPT
In July 1987, Nishinomiya was designated byJapan's Ministry of International Trade andIndustry (MITI) to participate in a "New-MediaCommunity Center" project. Metropolitan andnational administrations have actively promotedthe development of local and regional
information-oriented systems since fiscal 1984,typified by the MITI project and the "TeletopiaConcept" promoted by Japan's Ministry of Postand Telecommunications. The original objectiveof the MITI project was to construct andimplement systems and networks that meet theneeds of local comaunities in industry andsocial interaction and to evaluate theoperation of these systems and their effect onthe communities where they were introduced.The next objective was to expand these systemsinto well-balanced wtionwide networks.
2.3 ROLE OF INFORMATION IN LUAL SOCIETY
Nishinomiya's comparatively high standard ofliving and the relative sophistication of itscitizens made it a potentially good candidatefor introducing an information system. Inturn, an information system could provideNishinomiya's citizens with a much-needed senseof community.This involved several areas of activity: First,
given the citizens' sensitivity to trends inlifestyle and fashion, an information systemcould provide Nishinomiya's population with theup-to-date social and material indicators theywould presumably find useful and meaningful.Second, an information system could tietogether, modernize, and give new life to thecity's geographically scattered, outdated, andoutmoded commercial facilities.Third, an information system could revitalizethe city's industry by encouraging technologicalexchange among different business fields,streamlining the distribution system, andintroducing advances that would helpsophisticate industry.
2.4 INFORMATION AND MEDIA APPLICATIONS
Through a series of questionnaires, the cityadministration learned that some 38.5f of thelocal populace had access to or used personalcomputers and word processors; family gamecomputers and related equipment raised thisfigure to 60.5. In considering the nature ofthe media and information to be exchanged, apersonal computer network seemed the mostpractical to promote because it processed bothinformation searches and two-way communicationsequally well -- making it useful both
346 '1..
commercially and privately.Generally speaking personal computer networkingin Japan falls far behind, in scope andsophistication, the telecomputing and videotexapplications used in the United States, forexample. PC networking in Japan has mainlyinvolved grass-roots electronic bulletinboards, business information networks, andcommercially useful media such as onlineshopping. Electronic shopping currently has oneof the highest media profiles among popularapplications and is heavily promoted overcommunications media such as television.Given Nishinomiya's relatively compactgeographical organization, construction of anetwork and operation of a prototype system wereeasy, which made it practical for the cityadministration to launch it information-orientedpilot project.
3. NEW-MEDIA COMMUNITY CENTER
Under the twin slogans "improving communitylife" and "revitalizing local industry,"Nishinomiya opened the "Nishinomiya New-MediaCommunity Center," (NMC) in September 1989.(See Figure 1.)
A UNIX-system minicomputer running TELENOTES II,a software package, served as the heart of thesystem. The system provided electronic mail, abulletin board service, electronic conferencing,and databases that use is stereotyped. Thesystem operator uses an easy-to-understand setof menus to register users and updateinformation.
Seven asynchronous full-duplex lines connect thesystem to the telephone network; six more linesare connected to Fujitsu's FENICS service,which provides value-added functions such asdata processing as well as a basiccommunications service. The system operates at2400 bps 24 hours a day. The FENICS network hasaccess points nationwide, transfers dataeconomically and reliably by sharing a packetnetwork, and enables anyone anywhere in thecountry to use services charged only to theclosest access point.The system currently serves 5,000 local peopleand is accessed by people around the nation.The NMC also has its own user-developed programsand gateway access. It provides the followingsubscriber services:
Services guide:
Messages from and mail to the NMC operator, pluscommands
Electronic mail:
Mail exchanged among subscribers
Alcoholic beverages database:
Information on 7,500 nondomestic types ofliquor, and 506 types of SAKE
Library database:
Search and retrieval of information on the210,000 books in the Nishinomiya CentralLibrary
NISHINOMIYA NEW-MEDIA COMMUNITY CENTER
translation host(minicomputer)
English-*Japanese
NMC host(minicomputer)
TELENOTES II
E-MAILBBSE- CONFERENCEDATABASES
etc.
7 lines
TELEPHONE network
PersonalComputer
COMMUNITY HALL(small businesscomputer)
leased line
6 lines
FENICS network
INFORMATIONSavailable onfacilities,events, etc.
WordProcessor
f-Persohal
(Computerl
Figure 1 : NISHINOMIYA NEW-MEDIA COMMUNITY CENTER
347
Administrative government document search andretrieval:
Search and retrieval of information onadministrative documents maintained by the city
Consultation on civil matters:
Consultation and information on the cityadministration in general, and requests andcomplaints in particular
City guide:
Database of information on business and cityoffices and services
Information on community events:
Guide to available facilities and upcomingevents sponsored by the city
Map and locale information:
Telephone numbers and addresses of 20,000services and stores listed in NTT's "Town Page"classified advertising
Educational and training services:
Information exchange on education, training,computer-aided instruction, etc.
News updates:
Updates on community activities topics ofcurrent interest, society, culture, etc.
Japanese-English/English-Japanesetranslation:
Electronic mail in Japanese translated intoEnglish, and vice versa, for NMC subscribers
Consumer guide:
Services and prices monitored from homecomputers
Miscellaneous information, upcoming events,horoscopes, and bulletin board services
The services outlined above have prompted manyinquiries from other communities. Since theservices Nishinomiya proposed to implement hadno parallels in communities elsewhere, the cityconcentrated on a campaign based on theconcepts of "only in Nishinomiya" and "Nishinomiya's unique databases."
4. NEW-MEDIA COMMUNITY CENTER OPERATIONS
4.1 ALCOHOLIC BEVERAGES DATABASE
4.1.1 OVERVIEW
To introduce NMC services, Nishinomiyaintroduced difference aspects step by step,
working to make them "controversial,"meaningful, and unique to Nishinomiya.Nishinomiya was already famous for its "Nada"
348
brand of SAKE , so it seemed appropriate, in anation where SAKE is used to celebrate everyimaginable event -from sealing promises andoffering libations to the gods to exchangingwedding vows and dedicating new buildings - -toprovide a database on alcoholic beverages.Nishinomiya's database contains information on506 types of SAKE and 7,500 types of whiskey,brandy, wine, and other liquors, together, withdetailed information on SAKE. A 12-queryelectronic "quiz" adds a light tough whileenabling callers choose the best libation forthat "special occasion."
4.1.2 SYSTEM
The SAKE database provides three types of searchand retrieval: one on detailed information,one on choosing the right beverage and one fordata registration.Using the detailed information function, callersobtain explanations on brands and beverages byusing menus and keywords. Callers can similarlysearch information on manufacturers and brandsof Japanese sake.Using the "choice" function, callers find outwhich SAKE will serve them best based on theoccasion and mood.Using the registration function, the databaseoperator registers and updates data.
4.1.3 ENVIRONMENT
The software for this database was developed inC using a relational database under the UNIXhost. Data was organized using TELENOTES II.Thus, the system offers a unified operatingmethod to callers.
4.1.4 PROSPECTS
The database can be accessed at any hour fromanywhere. Given SAKE's popularity and thedatabase's detail, the city administrationintends to expand it and eventually set up linkswith SAKE brewers, retailers, and restaurantscarrying or featuring special brands- -activities expected to stimulate bothcommercial and industrial growth.
4.2 LIBRARY DATABASE
4.2.1 OVERVIEW
In the next stage, the city administrationdecided to introduce a service that would beimmediately useful to citizens of all ages--alibrary database on books in the city's CentralLibrary.In a nation famous for its 991.-plus literacyrate and love of learning, books are animportant item. Nishinomiya City CentralLibrary was no longer located near the citycenter, which made it difficult to reach- -despite the attraction of its large number ofbooks. Using the library database enabledpeople to check whether the library had thebooks they wanted, for example. The databasealready has 210,000 books and featuresinformation on new monthly arrivals. Anelectronic bulletin board features book reviews.
Callers can even leave messages requesting newlook.
4.2.2 SYSTEM
Library database functions include search andretrieval title, author, code, field, andkeyword. The database itself was developed andimplemented the same way as the SAKE database.In specifications of the search section, datadisplaying was elaborated to enable gradualnarrowing of data. In the way of possessingdata, indexing and development method oftemporary table were also elaborately designedto enable the system to fully respond to alarge-scale database.
4.2.3 PROSPECTS
Like the SAKE database, library information isavailable 24 hours a day to anyone in thenation. Thus, it enabled them to visit thelibrary to borrow a necessary book whennecessary, and obtain information on openinghours and books of the library, staying at home.
The Central Library, as "living room library",has become a facility familiar to them. Thecenter operator came to be able to offerinformation directly useful to the citizens ofNishinomiya, and, as an administrative body,realized a service a step closer to thecitizens.In addition to such broad access, the databasewill eventually be expanded to enable users toreserve and borrow books.
4.3 TRANSLATION SERVICE
4.3.1 OVERVIEW
Having developed the NMC to where its usefulnesswas well established, the city administrationbegan to book into avenues that could alsoprovide profitability. Having been madeincreasingly aware of their insularity throughnegative events such as trade friction, Japan'scitizens have resorted to a number of ways-encouraged by industry and government--to "internationalize" their outlook. One of thesehas been learning and using foreign languages.
translation host(ainicoaputer)
trans(-latiom,
system'
The city administration reasoned that making aneasy-to-use translation service available wouldencourav people to shed some of theirinsularity. Thus, they made available aJapanPse-to-English and vice versa form ofelectronic mail by which subscribers couldsubmit text in one language and have it sentback to them in the other.
4.3.2 SYSTEM
The system is, like other NMC functions, basedon TELENOTES II and uses a machine translationsystem running on a host outside the NMC networkhost. (See Figure 2.) The machine translationhost accesses the NMC network host every 30minutes to download translation requests from amailbox. After translating requesteddocuments, the host returns them to the NMCnetwork for distribution to subscribers.
4.3.3 PROSPECTS
The machine translation system uses a UNIX-basedminicomputer. It is best applied to fieldswith a fairly fixed vocabulary, however, e.g.,science and technology, and must be usedrecognizing these limitations. It iseconomical, even if the translation leavessomething to be desired. It is, like otherdatabase functions provided by the NMC,available on a 24-hour basis to subscribersthroughout the nation. This system is aneffrective system with which profitability asbusiness can be found. There are-something toachieve about improvement of the quality ofcontents by amelioration of dictionary,differentiation of markets and applicablefields, and establishment of a charging andbilling system. Given that machine translationtechnology has yet to mature, the serviceoffered by systems such as the NMC have apotentially promising-and profitable--future.
4.4 COMMUNITY HALL GATEWAY
4.4.1 OVERVIEW
Nishinomiya City has a Community Hall, wherecity agencies, citizens, and businesses hold
NMC host(minicomputer)
....
® up1
TELENOTES II
ERECTRONIC-MAIL
M ILBO
Oupload...
......... .
adownloadPersonalComputer
Figure 2 : TRANSLATION SERVICE
349
COMMUNITY HALL(small business computer)
NKC host(sinicomputer)
TELENOTES II
INFORMATION-....
....
batch-transal
file
(IDLC)- -------
HICScommunicator
GATEWNT ------
Figure 3 : COMMUNITY HALL GATEWAY
meetings and events. The Community Hall managesfacilities, meeting rooms, and information onupcoming events using an office computer thatalso processes municipal business.The NMC network and the Community Hall host havebeen linked to improve administrative servicesand make information available on facilities andevents.
4.4.2 SYSTEM
Functionally speaking, the shared systemprovides a gateway and databases. (See Figure
3.) The Community Hall gateway uses the NMChost's gateway, i.e., a relay functionemulating a user's terminal connected to the NMChost from a terminal connected directly toanother host. Since the NMC host operated on a24-hour basis, but the Community Hall host doesnot, information from the Hall's host is updatedby file transfer daily after closing hours tomake Hall host information available tocitizens during off hours.
4.4.3 ENVIRONMENT
The NMC and Hall hosts are connected by leasedline and a high-level data link procedures.Using the Hall's gateway, data is transferredusing Fujitsu's FNA protocol. In the Halldatabase, files are batch-transmitted using theHICS system.
4.4.4 PROSPECTS
Increasing gateway destinations, broadening thetypes of information offered, and addingfunctions such as the reservation of space forevents, the administration intends to provide anincreasingly useful service repertoire tosubscribers.
5. EVALUATION
In the three years since its inception, NMC hasshown a gradual and steady increase in thenumber of subscribers and accesses. Thisprogress is due to the NMC's easy-to-use menus,its 24-hour-a-day access, its economical linecharges, and its open forum giving subscribers
350
ApersonalComputer
a chance to provide feedback about how theywould like to see the system --and the city- -run. Personal computer networking enablessubscribers to contribute new programs andinformation on NMC use.The NMC's most popular features appear to be thealcoholic beverages database and a "newscorner" that keeps subscribers up to date withhappenings around the city. It also providesadvice on everyday subjects language.In terms of municipal administration, the NMCprovides information on city services,administrative decisions affecting data on thelatest library book, and suggestions on how touse the "Community Hall". It provides asounding board for Nishinomiya residents to felladministrators what they like--and do not like.The city administrators also use the NMC tomonitor consumer prices, for example, bysurveying local opinions. The system holdspromise as a viable business venture in areassuch as machine translaiton. The NishinomiyaCity government works on adding new and usefulapplication and tools to improve systemservices. To ease life for the handicapped, forexample, meetings are conducted including signlanguage. The NMC provides training, materialsfor personal computer use and ongoing education.
It also provides lectures on NMC services.
6. PROBLEMS
The NMC remains smaller than most commercialnetworks and thereby offers more give and takebetween users and system administrators. As thesystem matures, this may change. The systemadministrator will have to learn to manage NMCactivities in a way that does not stiflesubscriber creativity and initiative, howeverbig the system gets.The NMC's current operating expenses are mostlycovered by the city budget, but it is hoped thatthe center will eventually become financiallyindependent, charging for its services,reducing its operating costs, and lighteningthe load on system operators. Campaigns will beneeded to attract new subscribers. Userinterfaces should also be improved by addingfax, voice services, imaging, and theintroduction of public terminals.
7 CONCLUSION
In considering its original objectives ofintroducing an information system to revitalizeindustry and provide Nishinomiya's citizens witha sense of community, the NMC has achieved thefollowing:
-- Strengthening a sense of belonging andcommunity among Nishinomiya's citizens
- - Contributing to a stranger identity ofNishinomiya as a unique city
- - Improving municipal services to the localpopulation
- - Providing a forqm for feedback by citizensto the city's administrators
- Establishing an information center to keeppeople up to date on city activities
351
NTT's VI&P vision
Hisao YamamotoNTT Telecommunication Networks Laboratories
Musashino-shi, Thkyo, Japan
1. ABSTRACT
In order to achieve new telecommunications services early in the 21st century, NTT hasproposed "VI&P" as its vision of the future communications environment. "VI&P" aimsto attain future communications services that have Visual, Intelligent, and Personalattributes. This paper introduces the aim and outlines the VI&P vision and discussesnetwork technologies through which the VI &P vision will be realized.
1. VI&P service concept consumer in a user-friendly manner, according tocustomer taste.
The progress achieved in technology over the pasthundred years has enabled telecommunicationnetworks to progress from telephones used solely forspeech to multimedia for the exchange of text, data,and video. Telecommunication services will contributeto the society and economy of the 21st century. In 1990,NTT proposed a future telecommunication serviceconcept for the 21st century called "Visual, Intelligentand Personal: VI&P." This concept is based on thedevelopment of visual and intelligent technologies,and on society's demands for a person-oriented andinformation-based way of life (Fig. 11).
VI&P means communications services which strivefor the qualities of being visual, intelligent, andpersonalized. These services will employ high-speed,broadband, intelligent ISDN networks. They willinclude new types of telecommunications servicessuch as image-based "visualizing" services, "smart"services whereby an abundance of information isreadily available and the called party can be soughtout and contacted no matter where he may be, and"personalized" services which respond to the
Tele-presence Services- Visual Phone
3D Visual Phone- High Definition,
Large-sizedScreen
2. VI&P services
Figure 2 shows the evolution of VI&Pcommunications services.
"Visual" signifies the visualization ofcommunications. It allows people to communicate notmerely through the sense of hearing, but also thesense of sight to view images, facial expression, andtext. The visual telephone will be the basic tool forvisualizing communications, providing, for example,high definition images, three-dimensional videocommunications, and access to video databases from akeyboard.
"Intelligent" signifies the development of network thathave intelligence. This permits people to fully utilizethe network without the need for any special expertiseor intricate procedures. The new network will:perform the role of a well-trained secretary; enableusers to select service items tailored to their own
Personalized Services- Pocket
Telephone- IC Card
Phone
Intell gent Advanced Services- Text Translation- End Customer Control
FIGURE 1. V! &P COMMUNICATIONS.
352
VisualCommunications
Services
IntelligentCommunications
Services
PersonalCommunications
Services
. Image,.video, and tele.presence.
User-friendliness
Customer networking
4WAnybody any time, an,y,
Visual Communications Services1990 2000
4E-E.Service
Terminal
Face-to-face, Audio & visual collaboration
'I Multi -media DBI Hyper DB
Visual telephone ,,HDry amd4NTSC grade.
Tele-presence terminal<High &Oration video> ..3-1).<video walla eVIrtwe reality.
Intelligent Communications Services
1990 2000
Networkaccess
Informationtransfer
I CardVoice dialing
<Station address I Visual guidance
Yeas,
:<Person eddress>r<Intention address>
Information clipping
Public directoryI Multi-media directory
Electronic secretary
Text translation,I Translation comm.
Personal Communications Services1990 2000
Stationtracking
Persontracking
Mobile telephone
IPocket telephone
IFixed telephone
IPocket telephonecPTH access>
Yeas,
Intelligent services(by personal knowkdge)
FIGURE 2. EVOLUTION OF MP COMMUNICATIONS SERVICES.
353
needs; and provide computer-aided automatic naturallanguage translation.
"personal" signifies the idea that the newcommunications services should support personalactivities in both business and private lives, utilizingthe intelligent network and the new communicationsterminals. The possibilities opened by personalcommunications include the following: personalaccessibility by means of ultra-small portablecommunications terminals; the offering of personaltelephone numbers allowing the user to receive callsanywhere; registration of multiple personal telephonenumbers; and the securing of user confidentiality.
The VI&P services are divided into two categories,basic and advanced.
(1) Basic Services
The three basic communication services within VI&Pwill be telephone, "text mail," and "visual telephone."All of these are person-to-person interactivecommunication services which NTT intends toprovide nationwide.
The telephone remains the basic medium for voicecommunication. In addition to the standardtelephone, compact pocket models are likely to becomeincreasingly common.
Thxt mail comprises text and still-picturecommunications. By interconnecting a number ofpersonal computer networks, a user will be able tocommunicate with any computer on any network.'Ibxt mail is likely to become one of the mainstayservices.
The visual telephone will make its debut as an imagebased medium for face-to-face communications.Positioned as a mainstay high-speed broadband ISDNservice, the visual telephone will be offered with imagequality rivaling that of today's television.
(2) Advanced Services
VI&P advanced communications services, which willbe extensions of basic services, should become popularas wide-ranging competition among communicationssuppliers and manufactures produces easier-to-use,more convenient services. Some examples ofadvanced communications services features are:
Video Communication Serviceshigh-definition, Large-screen, andMulti-screen Video3D Video
Intelligent ServicesLanguage TranslationHighly confidential CommunicationElectronic Secretary
Personal ServicesAuto-person CallingPersonal Number
'rivacy ProtectionFlexible charges.
(3) Rate Structure
Achievement of affordable rate structures will beextremely important to the success of VI&P. First, itis ideal to have a rate structure which will enablepeople to user communication services freely withoutpaying attention to the distance of communications.Telecommunication technologies should overcome thelimitations of distance. Secondly, it is expected to offera reasonable rate structure for visualcommunications which must transmit moreinformation than the telephone. Future ratestructures will make visual communicationsaffordable freely, thanks to the construction ofbroadband ISDN.
3. Network technologies
VI&P communications services will be realizedthrough the use of broadband ISDN. This will enablelarge amounts of information and video images to betransmitted at high speedili21. The importantnetwork technologies include optical fibers,asynchronous transfer mode (ATM), intelligentnetwork (IN) and universal personaltelecommunication (UPT).
(1) Optical fibers
The networks which support VI&P will require high-speed and broadband ISDN installations. To carryhigh-speed and broadband signals, optical fibers willbe installed to every home. This idea is called "FiberTo The Home (FTTH)." Figure 3 shows examples ofopticsl fiber subscriber network configurationsincluding that of FTTH131.
(2) Asynchronous Transfer Mode (ATM)
The networks should carry all types of information interms of media and speed. Examples of media are
r--
-*-w
Business area
Optical Fiber: Metallic cableFTTO: Fiber to the officeFTTZ: Fiber to the zoneFTTH: Fiber to the home
/CentralOffice
eJ Le
Residential area
FIGURE 3. CONFIGURATION EXAMPLES OF OPTICAL FIBER
SUBSCRIBER NETWORK.
354
voice, video, data and mixture of them (multi-media).Bitrate examples of broadband services arecategorized as shown in Fig. 4. AsynchronousTransfer Mode (ATM), whose characteristics aresummarized in Fig. 5, is the technology that
N-ISDNHIFI
elephant) Sound
: Video Telephony / Video confer.___
(HI -speed I Facsimile
`large volume file transfer
remote CAD
nterconnect on
100K 101.1bltrate100M (b/s)
FIGURE 4. BROADBAND SERVICE BffRATES.
STM / Circuit -Switching
difficulty In handlingvarious speed channels
inefficiency in transportingburaty information
Packet - Switching
limitation of throughput
difficulty in transportingreal-time communication(eg. voice)
ATM
transport based on universal transfer mode forfixed length cell with 1 services of various media andsimple protocol speed
dynamic cell allocation .- efficient use of networkresources
virtual pathmanagement ---- simple and flexible network
FIGURE 5. CHARACTERISTICS OF ATM TECHNOLOGIES.
achieves flexible and economical transport andswitching of every kind of signal141.
(3) Intelligent Network (IN)
lb Provide services with intellectual processing, it isnecessary to install service management and controlcapabilities in the network. The network will bestructured with a basic transport layer and a servicemanagement and control layer (Fig. $). Whenintroducing new services, the new service will bedefined on the service management and control layerthus enabling the rapid introduction of servicesI51.
Service
<Service managementand control Layer>
-Service Management-Service Control
<Basic Transport layer>-Switching System-transmission System
FIGURE 6. INTELLIGENT NETWORK (IN).
(4) Universal Personal Telecommunication (UPT)
Figura 7 shows the concept of UPT services. Using aUPT number which provides a unique personalidentification, any user can make a call and/or can bereached at any time or place.
Figura ki shows the network evolution toward B-ISDI by NTT 11
In addition to these network technologies, a wide-range of communications technologies will have to beresearched and developed in order to implement VI&Pcommunication services. Figura 9 summarizesthese technologies under the headings of humaninterface, information processing and data-base, andradio communication.
4. Conclusion
VI&P communications services represent NTT's basicservice goal for the years leading into the 21st century.
Network
Terminal
User
Networkl1
INetwork 2 -"---"- Network 3
...11111.
EICIC1ODDODD(=IDDOEMM.
UPT number
FIGURE 7. UPT SERVICE CONCEPT.
355
-Elimination of cross-bar SAFiber to
Tomptetion of digbzabonI the home
FIGURE 8. NETWORK EVOLUTION TOWARD B-ISDN.
Software
Human Interface
DisplayOarge, high-density, 3D)
Figure Recognition / Synthesis
E Video Coding (HDTV, 3D)isual
Nano-electronics
Opto-- electronicsi
Info. Proc. & DB
Voice Recognition / SynthesisNatural Lang.Knowledge Proc.SecurityDistributed DB
NetworkingArchitectureOptical Sub. LoopATM NodeIntelligent NetworkLightwave Communication
ntelligent
,
-??,: Radio
Satellite CommunicationMobile CommunicationPortable Handset
FIGURE 9. TECHNOLOGIES FOR VI&P COMMUNICATIONS SERVICES.
The VI&P vision aims to contribute to culture bystreamlining and sophisticating the communicprocesses and quality through enhancement anddiversification of the means of communications. Thenetwork and the communications services must bedesigned to put technology to work in order to open upthe unlimited possibilities of communications andcreate new styles and values of humancommunications.
Amidst this increasingly progressive visualinformation culture, VI&P communications servicesare directed toward achieving an interactive media foruser -selectable information communications in a
fashion that prevents "information pollution" and"communication excess." By pursuing a networkwhich supports Visual communications, Intelligentcommunications, and Personal communications,NTT intends to develop future communicationsservices respecting users' essential communicationneeds.
In order to achieve this goal, we shall continue to sayattention to the needs of the times and to the opinionsof our customers, and to progress our F..-search andDevelopment.
References:(11 T. Aoki: "Network Planning of NTT," IEICETrans. Commun., vol. E75-B, No.7, pp541-549, July1992i21 Y. Inoue: "Network Evolution toward the VI&PEra," NTT Review, vol. 4, No.4, pp23-29, July 1992131 "Special Feature: Fiber Optic SubscriberNetwork," NTT Review, Vol.3, No.6, pp21-34,November 1991141 NTT: "Special Feature: B-ISDN - Network andSystem Technologies," NTT Review, Vol.2, No.2,March 1990151 NTT: "Special Feature: Network Technologies forNew Services," N71' Review, Vol.3, No.3, pp18-42, May1991
356 c: t
An Implementation of' Common Channel SignallingCapabilities on TDX-1 Switching System
Sunmoo KANG, Woonyoung HAN, Youngsi KIM, Hanggu BATIK
ETRI(Electronics and Telecommunications Research Institute)Dae-Jeon, The republic of Korea
Abstract
This paper describes design concepts, system architecture, design scheme, performanceevaluation, and the test result of the common channel signalling function in TDX-1switching system. At the same time, the deployment plan of CCS No.7 system in KoreanISDN network.
I. Introduction
ETRI has been studying ISDN technology for about
7 years. ISDN field trial service is now under its
operation in 3 big cities, Seoul, Daejeon, and Cheju.These 3 cities are interconnected with CCS No.7 system
for the ISDN services. This CCS No.7 system is the
nation's first working system in the real network. TheTDX-1/1/13 switching system is a digitalized and a fully
distributed control system so that it could be easy tomodify and to add new functions on the system. It means
the system is very flexible so as to apply the systemto any telephone network and also to data communication
network, even to the oncoming ISDN network. In small
cities, rural country side, and even in down-town areas,
TDX-1 system is installed and operated. The installedlines reached up to 2 million. This figure says TDX-1is a main system in the Korean telephony network. Inorder to implement ISDN capabilities on TDX -1A/B, the
essential part is the CCS No.7 functionality. When we
develop new technologies, such as the ISDN and the CCS
No.7, we need to understand the standard specifications,
test specifications, and requirements very carefully andprepare the national standard. Above all, the most
important is a testing, test for individual function blocks,
test for function interconnection, and test for protocols,validation, and compatibility. We know these test
activities are necessary and important but there are many
difficulties since the system that we are developing is
the only one existing system, which ought to be a testbed, a standard, and a model system in the overall
developing stage, which is the target system itself to he
tested at same time.
357
ASM
ALIC DL
CorralDTM FR
DTIC
S' P
Ql
2.048MbpsPCM
GSM
-I C
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NES
ANM
I"W.V.'
NrPSHIP
SAP
ca m. FE:iiAlarm Time of das MT Disk Printer Term:nal
CV. P
I TED
Figure 1. Hardware Structure of TDX- 1
II. A Brief Introduction of TDX -1 SwitchingSystem
I. A Brief System Structure
TDX-IA/11 is a fully distributed control switchingsystem which has a number of function blocks. Eachone of the function blocks has a standardized control
- .
processor and the cluster. The control processor is
divided into T-group processor and B-group processor.
Each T-group processor is duplicated for the safety of
the system. The B-group processor is controlled by the
T-group processor. The cluster has the specific function
of a function block. The processor of the cluster is called
B-group processor. Inter processor communication is
performed by the distributed reservation and selection
technique via the global bus. There are two types of
bus in TDX-1A/B. One is the T-bus which is a bus
connecting all the T-processors and the other is the B-
bus whicts is a bus between a T-group processor and
a B-group processor. Figure 1. shows the hardware
structure of TDX-1. According to the design concept,
we added common channel signalling function. Figure
2. shows the hardware structure of TDX-ISDN.
ASM
ALIC
TIM
DTIC
2.048N1bpsPCM
GSM
ControlDTMFR
Como
ISMy
R2SRTv-
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LP
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SCM
CNTPD
TI
CSM
Switch
Network
I NES
SAP
E7-1.1 Ca a a la:L-71 Time of day MT Disk Primer Terminal
ANM
TED
!igure 2. Hardware Structure of TDX- ISDN
2. System Capacity
TDX-1A is the first version. It has about 10,000
subscriber lines, 1,920 maximum trunks, 1,600 Erlang
and 100,000 BIICA. TDX-111 is the updated version. It
has about 22,000 subscriber lines, 4,800 maximum
BEST COPY AVAILABLE 358
trunks, over 3,600 Erlang and 220,000 BHCA. It is
enough to apply TDX-1 system for rural and country
side application with local, transit, and remote subscriber
handling functionality.
3. A Design Concept
TDX-1A/B is a fully distributed control system. It
means that several control processors are involved in
order to handle a function. Therefore, the
implementation should performed under the concept of
minimizing the impact on the existing whole system as
much as possible. And another important point to be
considered is the minimization of the influences caused
by the newly added function and the simple message
addition for the new services and the easy change of
M&A function and the fast transition to the commercial
exchange. For the purpose of above mentioned, the newly
designed function module has been maintained the
structure of the mother system and the compatibility of
mother processor. A protocol is designed with functional
modularity scheme so as to satisfy the layered structure
for the flexible function addition and modification.
III. Common Channel Signalling System
Development
1. Strategy
A new function design in an existing system needsa great amount of system engineering before startingdesign work. At the system engineering stage, a few
experts, who have the knowledge for the whole system
structure and the whole function, are working together
on the system. We have to investigate system capacity,
system structure and impact on the syst& n by adding
a new function. Especially, TDX switching system is a
fully distributed control system in which a new function
distribution into each function block must be well defined
in order to reduce the impact and make an optimized
design. After system engineering work, the function
implementation is rather simple. The hardware structure
of CCS No.7 is based on the TUX hardware design
scheme. The signalling function is added into TDX
system instead of designing a new separated whole
function. For this reason, CCS No.7 operation and
maintenance function is performed by the existing
integrated system operation and maintenance function
li:ack using function addition and modification.
2. Development Events
A development project of the early version of CCSNo.7 signalling system on TDX switching system had
been launched in 1989. At that time the primary purpose
of the development was to get a test bed system for
CCS No.7 function. We would like to use the systemfor testing CCITT protocol specifications to fix a national
standerd specification. This system was installed and
operated between two cities, Seoul and Daejeon. We got
great experience through the operation and got
operational data, such as quality of the trunk lines,signalling network configuration data. This achievement
was followed by a new project for field trial and further
commercial service system development. A core and basic
technology, system engineering work of the project has
been carried mainly by E.T.R.L. We transferred the
technology to 4 companies, Daewoo, Gold Star, SamSung, OTELCO to promote an effective system
development, to shorten the development time, and toovercome shortage of research staff. This field trial and
preliminary commercial service version is under field trial
operation interconnected between cities, Daejeon, Seoul
and Cheju Island.
3. CCS No.7 System Structure
Commercial service system needs high reliability and
maintainability. For these purposes, the main processoris duplicated, signalling message handling function is
assigned to a dedicated processor, and operation andmaintenance function is much enhanced. Function
handling software has modular structure for easy
modification, easy updating and reducing impacts from
further changing. Each function module is programme°
and tested individually and completely. After module
integration, the one thing to be tested is the whole
system function. Each module is inter communicated by
well defined software signals. Figure 3. shows an example
of the software signal between modules. This approach
is very useful in design work of a big system by a fewindividuals. Figure 4. shows the CCS No.7 system
structure and Figure 5. shows its subsystem structure.
3.1. Hardware Structure
In the existing TDX-IAJB, TIM(Trunk Interface
Module) is a TI digital trunk interface module at which
the interoffice signaling is performed by R2 signaling.
LSH
AC IIVATE_SL
SNIII SLIt 1.2
STAR I
P:_SER ICE
SEND.SLTNI
RX_SI.TA
SL AVAIL.
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SL _UNA VAIL
RF.STORE_SL
4
START
IN_SER VICE
SEND_SLTNI
SL_AVAIL
DEACTIVATE_SL
359
C
TT
RX_SLTA
STOP
Figure 3. Software Signals
Figure 4. CCS NO.7 System SLucture
CCS No.7 TIM is a CEPT TIM for CCS No.7 signalingsystem which is added on the TDX-IA/13 system. CCSNo.7 TIM consists of the CSS(Common channel
Signalling Subsystem) functioning MTP(Message Transfer
/
Part), DT1C(Digital Trunk Interface Circuit), DTCP
(Digital Trunk Control Processor), DLC and DTLP
(Digital Trunk Line Processor) handling ISUP(ISDN User
Part) and Call Control function. These ISUP and callcontrol functions are distributed on the several DTI.Ps
by necessity. CSS has 16 STBs(Signalling Terminal
Board) handling MTP level 2 function and expandable,
CCSP(Common Channel Signalling Processor) handling
MTP level 3 function, and MSP(Maintenance and Service
Processor) handling management functions. CCSP consists
of SPB(System Processor Board), SMB(System Memory
Board), MHB(Message Handling Board), BIOB(B-bus
Out Board), DPB(Dual Processing Board). SPB handles
main functions using an event driven operating system(EROS). These functions are level 3 protocol, timer, job
scheduling, operation and maintenance function, and dual
processing handling. SMB is a system memory with I
Mbytes capacity. MHB interfaces with STBs by hardware
arbitrated round robin scheme. Message handling
function is located in this board. BLOB has 4 channel
rn ca
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360
I/O port towards T-level processor. DPB is a supervising
processor for dual SPB functions. It decides change over
between the dual processors. We use hot stand-by dual
processing scheme that means one processor is acting
a active role and the other is acting a hot stand-by role.
During the processing, two processors are working with
the inputed data but difference isis prohibited to send output data.
the same operational data statethrough a special data bus named
dual processor structure. MSP is
signalling point data loading and
the stand-by processor
Both processors retain
by exchange the dataX-bus. Figure 6. shows
a T-level processor for
updating, maintenance
functions such as CCSP status supervision, DTLP status
supervision, Bus status supervision and nailed-up path
management data. This processor will be used for further
function expansion such as ASE and TCAP. We designed
a special bus called BAB(Bus Adapter Board) between
BIOBs and T-level processor, DTLP with differential
signal level. Figure 7. shows this scheme. Usually, one
T-level processor handles several B-level processors but
CCS No.7 function block is a B-level processor whichbelongs to more than one T-level processors, DTLP,depending on the signalling network configuration. So,
5,men Sown.
STBB ICII
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S
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sometimes installation distance is apart far away. Figure
8. shows the hardware structure of the CCS No.7signalling system.
C.1oFr
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3.2. Software Structure
STGP
CCSP
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P
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CCS No.7 function is implemented with a modular
design scheme. One message handling involves many
processors and software function blocks. Software
modules consists of EROS(Event driven Operating
System), STH(signalling Terminal Handling), SMH
(Signalling Message Handling), SPH(Signalling Point
Handling), LSH(Link Set Handling), SLH(Signalling Link
Handling), MDH(Message Distribution Handling), OMIT
(Operation and Maintenance Handling), and DPH(Dual
Processor Handling). EROS is a real time operating
system for task, timer, interrupt and buffer management
function. STH handles MTP level 2 f _lion. SMH
handles signalling messages and routing table
manaitement. SPII performs signalling point restarting,
destination point, route status, network timer
BEST COPY AVAILABLE 361
T-Bus
BAB
0TLP
01 T TFigure 8. Hardware Structure of the CCS No.7 Signalling System
management, and change over, change back between link
set function. LSH covers link set status management.
and change over, change back between links function.SLH is assigned for link status management, link
activation and deactivation and restoration function.
MDH is a function block for message and signal input,
output function. OMH deals operation and maintenancefunction as a whole including operating datamanagement, management data measurement and alarm
handling. The function block DPH is dedicated for dualprocessing. Figure 9. shows the software structure of the
CCS No.7 signalling system.
4. Protocol Test and Performance Evaluation
Protocol testing is very important and never missed.It is an essential par in the project for proving
compatibility and validity. In the development stage, wetested the protocol in the development system which isSUN computers. After full function integration, the
protocol is tested by protocol testers using own protocoltesting program. Figure 10. shows protocol test
configuration and Figure 11. shows ck velopment and lest
C.N1 T ISUP
ON111
PSPH
UPII
LS1i
SLH
511)11
SN H
CST STE.'
Figure 9. Software Structure of the CCS NO.7 Signalling System
IUT
SP A
LI
Protocol Tester / Network Simulator
ILTT
SP A
IttrSP A
SP B
(Configuration A)
IUT
SP A
L2
IA 1
SP C
SP B SP D
L7SP E
(Configuration B)
LI
I-2
SP B
SP C
(Configuration C)
LI
L2
SP I'
SP B SP D
SP C SP EL7
(Configuration D)
Figure 10. Protocol Test Configuration
configuration. tnterworking and compatibility (est was
performed with other systems, TUX -10 and SMX(STP
dedicated system). The performance evaluation has been
done in different aspects, by simulation during system
engineering stage before designing 11/W, S/W, by
362
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Trunk HIW
o DLCo DCTCD
I chPROTOCOL
TESTERI ch
Figure 11. Development and Test Configuration
measurement after getting the real system. The got
almost same results. Here show a calculation for
performance evaluation.
(1) Maximum trunk call handling capacity in TAX-1B.
- 3600 Sec X Max trunks(CH) X Erlang / Holding time
- 3600(Sec) X 3,840(CH) X 0.8(Erlang) / 90(Sec) =
122,880 BHCA
(2) Processing messages per second
- 122,880(BHCA) X 7(msg/call) / 3,600(Sec) = 240(msg/
Sec)
(3) Maximum evaluated processing capacity in CSS
- Average message length = 30(byJmsg)
- Per call ISUP message = 7(msg/call)
- SEP message processing capacity = 1,100(msg/sec)
- STP message processing capacity = 1,350(msp,/sec)
Figure 12. shows simulation results of the system capacity
for SEP or STP application.
5. Future Deployment Plan
Consinering the installed TAX-1 system in the
network and the result of the pilot and field trial
60,
40
20
0 ' I " '
100 3:: 5C: 700 900 1160 1300messa;e arrva! rate (msgsise:::
120
10C. 1
80
63
40
20
(SEP Application)
1530
: . I I i
100 200 300 400 500 603 7:13 863 900 1000 1100 1200 1390message arva rave (msgs/sec)
SEP c,..!;:,; SEP value
(STP Application)
Figure 12. Simulation Result of the System Capacity
services, the possibility of commercial service application
of the CCS No.7 on TDX-1 system becomes very
clarified. The field trial CCS No.7 network will be
expanded into seven cities in the nation at the end
of this year. This network will be a backbone signalling
connection for the ISDN service among these cities. The
commercial service is time tabled from July, 1993.
VI. Conclusions
The commercial model of CCS No.7 system will be
fully tested and modified before its deployment using the
model from 4 local companies. We get much experience
from the pilot and field trial service operation. Field
trial network becomes stable and very successfu'. The
know-how will be feedbacked into the further
363
development. This very first implementation of CCS No.7
signalling network in Korea could be used as a test-bed
for other signalling system development activities. As a
result of the operation, we know the commercializationof TDX-1 ISDN using common channel signalling network
is very ref..nable and feasible. We understand that the
cooperative WOI king method with local company is a very
good try and strongly recommendable in the future
development.
V. References
1. "Pilot Service for 1-NET 64", Korea Telecom, Feb.
1992.
2, Janggeun Ki, Sungjae Lee, Giseog Jeong, Woonyoung
Han, Dukjin Kim, Kyunhyon Cha, "Performance
Evaluation of the Common Channel Signalling Module
in TDX-1", The Journal of the Korean Institute of
Communication Sciences, Aug. 1991.
3. Design Specification for TDX-1/1SDN CSS", ETRI
ISDN Signalling Section, Vol.! and Vo1.11, Jun. 1991.
4. Kyuseob Cho, Chulhee Kang, "Digital Subscriber
Transmission System in Korea", EIC Japan, Vol.89 No.
233, Oct. 1989.5. Woonyoung Han, Heechang Chung, 'The
Implementation of ISDN D-channel Protocol", EIC Japan,
Vol.89 No.232, Oct. 1989.
6. CCITT blue book, recommendation Q.700-Q.709, Q
781-Q.783, Q.791, Q.795, 1988.
Technology Enablers for Residential Broadband Servicesin Today's Loop Environment
Robert W. LawrenceNYNEX Science and Technology. Inc.
White Plains, NY 10604 USA
1. ABSTRACT
A variety of ideo and multimedia services are in demand in the residential environ .,cnt that will require
bandwidth capabilities far in excess of the conventional 3 kHz bandwidth used in Telephone Company loop
plant. This paper provides a review of a variety of loop and network technologies that can be used to expand
that bandwidth and thus support those services. These technologies, including Fiber-in-the-Loop, Digital
Subscriber Line and Asymmetrical Digital Subscriber Line technologies,will support and deliver bit-rates
near and in excess of 1.5 Mb/s to residential Telephone Company subscribers. Supporting those delivery
technologies are video compression, video storage and Asynchronous Transfer Mode switching. As the
network evolves, care must be taken in the choice of technologies to ensure that the support for new
residential services is not precluded.
2 INTRODUCTION
Market studies [11 over the past several years have shown that
there is a significant demand and willingness to pay for a wide
variety of residential broadband services that will require asignificant increase in bandwidth over that used in the delivery of
narrow-band services today. Those studies have identified the
following services, now often referred to as Video-Dial-Tone(VDT) services, as those that have the highest consumer demand.
Video-on-Demand leads the way with over a 60% level of interest
in over 1500 households surveyed in the NYNEX region.
Movies-on-Demand/Video-on-DemandInstructional CoursesVideophoneGames-on-DemandExpanded EntertainmentNews and Information
The demand for these services has led NYNEX and the industry as
.1 whole to investigate the variety of loop, network and othertechnologies that can be made available to deliver broadbandservices to residential customers. Those technologies include:
Fiber-in-the-Loop (FITL)Copper Pair and Asymmetrical Digital SubscnbcrLine (ADSL)Digital Subscriber Line (DSL)Video and Multimedia ServerVideo CompressionAsynchronous Transfer Mode (ATM) SwitchingNetwork Control Systems
and a wide spectrum of Customer Premises Equipment (CPE)
This paper will provide a review of such technologies, with an
emphasis on loop technologies It will present a common sense
path for deploying new loop technology in the future (Sec J2}).
364
3. RESIDENTIAL BROADBAND SERVICEREQUIREMENTS
Video-on-Demand, the residential broadband service with thehighest likely demand, requires that we provide full motion andquality video in a configuration that permits customers makeselections in real time. Interactive multimedia services havesimilar requirements in that customers will require real-time accessto quality text, graphics and video information. The requirements
for these and similar services can be equated to Bandwidth,Quality and Interactivity and can be supported from a genericnetwork architecture standpoint as shown in Figure 1.
VIDEO/MULTIMEDIA COMPRESSION!
SERVER
ATM
NETWORKCONTROL
CLASS 5SWITCH
LOOPSYSTEM
I
COPPEROR
FIBER
LOOPSYSTEM
CPE
SIGNALLING
FIGURE 1GENERIC RESIDENTIAL BROADBAND ARCHITECTURE
In this architecture, subscribers would be provided access to avideo server via an ATM switch and one of a variety of loopsystems A video server, based on either hard disk or robotictechnology, could contain hundreds or thousands of digitallycompressed videos that are accessible on a real-time basis. Marketresearch indicates that, for a Video-on-Demand service,interactive capabilities such as fast-forward, rewind, pause and
other VCR-like capabilities are required on a real-time basisTherefore, control of the access to broadband information, such as
videos, must be provided to the subscriber via a full duplexsignalling channel and a network controller. The networkcontroller would interpret the customer requests and instruct theATM switch and information server to provide the connectionsrequired to deliver the requested information to the customer. Ofprimary importance is the requirement that Plain Old TelephoneService (POTS) also be supported by the same loop system.POTS switching is supported by a conventional class 5 switch inthe near-term, and perhaps will be supported by an ATM switch inthe future.
Relating our bandwidth, quality and interactivity requirements tothis architecture, bandwidth must be supported by the server,switch and loop transport system. Quality is related directly to thebandwidth of the switch and transport system as well as to thesophistication of compression techniques that are used.Interactivity must be supported by the signalling channel, thenetwork controller and the functionality within the ATM switchand the server. The remainder of this paper will pay particularattention to loop transport and video compression technologies.
4. HYPOTHESIS FOR TRANSPORT EVOLUTION
The bandwidth required to transmit video or graphics at anacceptable level of quality has historically been thought to requirethe capabilities and flexibility of FITL systems. More recently,new and evolving technologies, such as ADSL, a new 1.544 Mb/sDigital Signal Processing (DSP) based technology, have made itclear that near-term alternatives can be made available well inadvance of the ubiquitous availability of FITL. CombiningMotion Picture Experts Group (MPEG) 1.5 Mb/s videocompression and ADSL technologies will ensure that a qualityvideo signal can be delivered to our subscribers. However, ADSLtechnology does have its limitations. ADSL, in any practical form,will be limited in the number of simultaneous video channelsdeliverable and/or the quality of video provided on those channelsWhile the ADSL/MPEG alternative is attractive for the near-term,FITL is expected to be the long-term solution for offering VDTservices in the Telephone Company environment.
5. MPEG COMPRESSION
Several years ago, the Motion Picture Experts Group of theInternational Standards Organization (ISO) began developingvideo compression standards for the purpose of supporting theaccess to video information at about 1.5 Mb/s, a rate that can besupported by CD-ROM technology. This technology, dubbedMPEG-I has been documented in a standards proposal at thedecoder level and has been forwarded to ISO for consideration asan International Standard. Subjective tests performed at NYNEXindicate that MPEG-I compression techniques are capable ofproducing video at a quality level somewhat better than VCRquality. These results were promising in light of the plans fordeveloping 1.544 Mb/s ADSL technology.
Subsequent to much of the MPEG-1 work, applications wereidentified that require quality significantly better than VCR-likequality. These applications in..,:cled Direct Broadcast Satellite(DBS). cable TV, High Definition TV (HDTV). and otherresidential video applications. As a result, an MPEG-IIdevelopment effort has been underway, under the auspices of theISO-MPEG body, to support these needs; efforts are now directedat developing a video compression algorithm that will operate atvarious rates between about 3 Mb/s and 20 Mb/s. Early tests have
365
shown that compressed video bit-rates on the order of 4-6 Mb/scan support broadcast quality video. Projections indicate thatHDTV may be supported at an MPEG -II bit-rate on the order of20 Mb/s. It is expected that an MPEG-II standards proposal willbe available in 1993.
6. ASYMMETRICAL DIGITAL SUBSCRIBER LINE
At about the same time that MPEG-1 standards were beingdeveloped, the development of a new loop access technology, Highbit-rate Digital Subscriber Line (HDSL), was under way HDSLwas intended to permit full duplex, repeaterless access to ournetwork at 1.544 Mb/s. Initially, it was thought that there couldbe a marriage of MPEG compression and HDSL in order toprovide residential customer access to video via the existingcopper loop plant. With the results of market research leading theway, there was enthusiasm about the possibilities here.
However, there were several constraining factors that rendered theuse of HDSL in the residential environment unrealistic. First,HDSL in its classical form, requires the use of two copper pairs.In NYNEX, as in much of the United States, the average numberof copper pairs available to residential customers is about 1.2 to1.5. Therefore, a significant percentage of our residentialpopulation could not access the network via HDSL technology.Furthermore, the baseband modulation techniques used in thegenerally accepted HDSL implementation, and specifically the2B IQ line code, does not permit simultaneous support ofconventional telephone service. Additionally, the 12,000 footloop-length limitation of HDSL restricts its use to distances nearonly the average loop length in the NYNEX Region. This, alongwith the requirement for two pairs, is not an acceptable constraintAdd to this the projected cost of HDSL (presently $5000-$8000per loop and possibly about $2000 per loop in quantities (31) andit becomes clear that HDSL is not an acceptable option forsupporting residential broadband services.
An alternative was sought and in circa 1990, scientists at Bellcoreproposed a new digital signal based technology that could:
operate on a single wire pair.over 18,000 feet,with up to 3000 feet of bridge taps.in a single direction,deliver an asymmetrical 1 544 Mb/s signal,simultaneously support conventional telephony orbasic rate ISDN with the high rate signal, andsimultancously support an interactive 16 kb/ssignalling channel.
This concept. Asymmetrical Digital Subscriber Line (ADSL). wassubsequently pursued by a number of common carriers andvendors across the world and now is being addressed by theT I EI.4 working group in the United States where variousproposals arc under consideration. The architecture proposed forADSL is shown in Figure 2. In this architecture, the ADSLTerminal Unit in the Central Office (ATU-C) unit provides themodulation and signal combining functions while the ADSLRemote Terminal Unit (ATU-R), in communication with the ATI:-C. performs the more difficult adaptive signal processing andsignal recovery process
FROMATM
IRCONTROL
TOCLASS 5SW11 CH
OTV 0
0ADSL- CO(ATI I-C)
AI )SLREN1011:(ATU -R)15.00() FT
COPPERPAIR 1.
SIGNALLINGTO NETWORK -CONTROLLER
FIGURE 2ADSL ARCHITECTURE
SIGNAI LING
For loops approaching the distance limit, the high bit-rate signalarriving at the ATU-R is expectiA to be in the single millivoltrange, hac a pulse shape significantly different from the one
transmitted at the ATU-C and be corrupted by crosstalk, thermaland impulse noise. Therefore a sophisticated level of digital signalprocessing is required that is under development in a number ofresearch and development laboratories globally.
Various modulation techniques are under consideration by T I E1.4
that may meet the above requirements:
Discrete Multi-Tone (DMT)
Quadraturc Amplitude Modulation (16 QAM)
Carrierless Amplitude Modulation/Phase Modulation
(CAP)
Computer simulations for each of these technologies have beenrelatively inconclusive as to which will perform the best in the realloop environment. Therefore, laboratory comparison tests of eachof these techniques are scheduled for the first quarter of 1993 atBellcore and NYNEX. It is anticipated that the results of thosetests, performed on behalf of T1E1.4 will provide a basis for
continuing standards work in that standards working group
In order to meet the aforementioned multiple and simultaneoussignal transmission requirements, the POTS, signalling and highbit -rate signals are placed in the spectrum in a fashion as provided(for illustrative purposes only) in Figure 3. This will ensure thatPOTS, signalling and broadband capabilities can be
simultaneoi-7
BasicRate
ISI)NSignalling
Full
544 Mb/s PayloadDownstream
FRI .Q1JENCY
FIGURE 3ADSL SPECTRUM - SINGLE COPPER PAIR
In light of the applications and development plans for a higherquality/higher bit-rate MPEG-11 video compression capability.higher bit-rate ADSI, (ADSL-II) solutions are now being
considered In addition, there has been identified a need formultiple channel video capability. a capability that mould providefor multiples of 1.5 Mb/s each supporting MPEG -i video.Homever, as shown in Table I, the capacity of the copper loop
366
plant is limited. Thus the use of an MPEG-II compressiontechnique or the use of multiple channels of MPEG-I and anADSL -ll in that plant is also limited.
Length: 300 600 1.5K 3K' 6K' 9K' I2K 18K
Mb /s: 249 128 46.4 19.7 7 7 4 3 2.7 1.2
TABLE I 141Theoretical Transmission Capacity of 2-Wire 24 AWG
Twisted Pair CopperNEXT Dominated Environment - 49 Disturbers,
57 dB NEXT Loss at 80 kHz, BER=10-7
As noted, the theoretical capacity at 18,000 feet of 24 AWG mireis 1.2 Mb /s. a capacity that indicates the challenge that will beexperienced in trying to support even MPEG-I video at thatdistance. Studies in NYNEX show that the average copper looplength in the New York and Boston metropolitan areas is about8000 feet. At those distances, we may be able to support up tothree MPEG-I video signals, or one MPEG-11 low bit-rate videosignal, but only on about half of our loops. The remainder ofthose metropolitan loops as well as the majonty of loops insuburban and rural areas will not be able to do so.
Therefore, if we are to universally transport signals at rates insignificant excess of 1.544 Mb/s, alternative access architecturesto ADSL, such as Digital Subscriber Line or Fiber-in-the-Loop,must be exploited.
7. DIGITAL SUBSCRIBER LINE
Since there exists a market need for video quality that approachesbroadcast quality, e.g., MPEG-II quality, and also a need formultiple channels in the MPEG-I market environment, and sincethe copper plant is Shannon capacity limited, alternative deliverymethods must be investigated. One such alternative is the use ofDigital Subscriber Line (DSL). DSL, in brief, is a technology thatutilizes a high capacity fiber backbone to feed broadband andtelephony signals to Remote Digital Terminals (RDT) which in-turn feed individual pairs of copper wires that deliver services tothe end-users.
FROMINTEGRATED
SWITCH
LL DSL-ADSLREMOTE
TERMINAL- 12,000 FTCOPPER
PAIR
IRCONTROL
ADSLREMOTE(ATU-R)
FIGURE 4DSL ARCHITECTURE
SET-TOP
TVOO0
SIGNALLING
In the past, telephone companies hioe deployed DSL technologiesin Carrier Sen ing Areas, areas for which there was a goal oflimiting the length of subtending loop to about 12.000 feet. In ourgoal to support one or morn tviPEG-11 or more than one MPEG-Ivideo signal, this would appear to be an attractive alternative and
it is being investigated for those areas where DSL exists or isplanned.
Several modifications will be required for existing '-)SL productsin order to make this a viable solution (Figure 4). Central officeequipment must be developed that will deliver the combinedPOTS, broadband and signalling channels to the remote terminal.Additionally, an ADSL capability must be integrated into theremote terminal. While such integration would significantlyincrease the penetration of a Video-on-Demand capability to endusers served by DSL, such integration has not yet begun. Perhapsas important, DSL is used in the NYNEX region to serve wellunder 10% of residential subscribers. It is not clear whether therewill be a significant increase in this penetration prior to thedeployment of FITL systems, systems that can provide the long-term solution for our subscribers' residential broadband servicesneeds. Investment in integrating ADSL into DSL remote terminalsshould thus be carefully scrutinized.
8. FIBER IN 1HE LOOP
Fiber-in-the-Loop systems have been under development for ammber of years. However, it is noteworthy that many FITLsystems were developed initially with the purpose of supportingPlain Old Telephone Service (POTS), with a secondary purpose ofsupporting conventional cable TV broadcast. Development of aninteractive broadband capability by FITL vendors has onlyrecently begun to be addressed, and it is anticipated that interactivebroadband service requirements discussed above will only begin toappear in FITL product in late 1993 or early 1994. Therefore, itis prudent that the Telephone Companies carefully review thearchitectures and broadband features of FITL systems beforedecisions are made to deploy a particular system.
FROMINTEGRATED
SWITCH
IRCONTROL
11'SET TOP
0HOST OPTICAL TV 0
0DIGITAL NETWORKFIBERTERMINAL UNIT
SIGNALLING
FIGURE 5FIBER IN THE LOOP ARCHITECTURE
Fiber-in-the-Loop systems that will suppor' a Video-on-Demandservice, and as shown generically in Figure 5, must be capable ofdelivering from 64 to 120 conventional cable TV channels,supporting a full-duplex 16 kb/s to 64 kb/s full duplex signallingchannel, as well as a full cadre of dedicated data channels that inturn can support multimedia data transmission or full qualitydigital video channels. This is in addition to the need to supportconventional narrow-band POTS and Basic Rate ISDN services.At this time, there are FITL system vendors that arc developingsystems that will support all of these requirements. When takingadvantage of video compression, such systems could, for example.support from 64-45 Mb/s broadcast channels to 1792-1.544 Mb/sbroadcast channels depending on the type of video compressionutilized. MPEG-Il compression at about 4.5 Mb/s, which wouldsupport broadcast video, could be supported by this system in a
367
configuration that could deliver about 600 broadcast video signalsto our subscribers.
All FITL systems should be viewed with these or similarcapabilities in mind. Otherwise, a FITL solution might be chosenthat can do nothing more than support existing and conventionaltelephony and video services without the ability to gracefullyexpand in support of interactive residential broadband services
9. CONCLUDING REMARKS
There exists a market need for the delivery of more sophisticatedvideo and information services to residential consumers than everbefore imagined. The need to develop transport capabilities tosupport those services is thus of significant importance. Thetelecommunications industry has responded by developing and/orproposing a number of delivery technologies and systems includingvideo jukeboxes, multimedia servers, network control systems, andloop transport systems. This paper has focused on the latter whereseveral solutions are available or becoming available.
In telephone company environments where there is significantcopper plant, limited DSL deployment and little FITL deployment,an evolution plan must be developed that will support near andlong term support of residential broadband services. Such a planmight include:
1. Deployment of ADSL technology for loops that are under18,000 feet in length and where there is no plan to deployintegrated DSL/ADSL or FITL to meet near-term needs.
2. Deployment of an integrated DSL/ADSL technology onlyif warranted by possible service take rate, rehabilitationplans and economic factors. FITL deployment should beconsidered before this option is selected.
3. Deployment of FITL technology capable of supportingconventional and narrow-band services, cable televisionbroadcast and residential broaclaand or Video-Dial-Toneservices. Deployment of FITL should be considered firstin areas where alternative one and two do not or can notapply or where the economics, even projected economics,justify FITL over either of those options. Additionaldeployment scenarios should be based on rehabilitation,new build and other economic based needs.
Broadband loop technologies are crucial to the need to supportresidential broadband market needs. The technologies to supportthem are available or are becoming available now. Therefore,planning must not wait Only commitment will ensure that we canmeet the resiLntial broadband service needs of our subscribers inthe near and long-term.
g_;
REFERENCES
1. Electronicast. "Broadband Fiber Optic !6T-tv:orks - Volume IA -Residential Services: Video-on-Demand", Mar,`, 1990
2. Robert W. Lawrence, "Switched Simplex High Bit-RateServices in Today's Residential Environment", Supercomm '92,June, 1992
3. Thomas M. Super and Dr. Edward A. Walvick, "The Roles ofCopper and Fiber in the Evolution to Broadband - A NetworkPlanning Perspective". PTC, January, 1993
4. Information extracted from presentation delivered at the"Tclestrategies Conference" by AT&T Paradyne, Washington,DC, November 9, 1992
368
Frame Relay and Evolution to ATM
Mehmet S. Unsoy Kenneth G. HaywardNorthern Telecom Bell-Northern Research
Tokyo, Japan Ottawa, Canada
AbstractFrame Relay is available today and being actively deployed by public and corporate data networks in order to supportLAN to LAN interworking over Wide Area Networks (WANs). Frame Relay services are based on internationalstandards, and primarily suited for data communication.
In parallel, there has been extensive standardization as well as design and development activity underway for the newAsynchronous Transfer Mode (ATM) technology and services. ATM technology will not only offer far higherbandwidths, but also offer higher speed access and brand new services, primarily for multi-media devices.The topic of this paper is to explore the evolution alternatives for the Frame Relay and ATM technologies andservices. The two technologies are briefly reviewed. The implications of the evolution from the service providers'viewpoint are studied. In addition, the service commonalities and evolution paths are examined from the end-users'perspective.
1.0 Introduction
The development and deployment of personal computers andworkstations have driven the need for these devices tocommunicate for generating, obtaining, and sharing infor-mation. These devices have the power and sophisticatedprogramming to make peer -to -peer and client-servercommunications natural and sometimes even transparent totheir users. This same power enables them to make use ofhigher speed transmission services, and services that enableboth multiplexed and simultaneous communication withmultiple devices in diverse locations.
Much of that communication takes place over Local AreaNetworks (LANs). LANs have high transmission rates(typically 4 Mbit/s to 100 Mbit/s), few transmission errors,and multiple devices attached to them. LANs are beinginterconnected by bridges and routers to make networks thatsometimes span the globe.
Wide area transmission techniques have also become fasterand less susceptible to errors. This decreases the advantagesof hop-by-hop error correction, allowing better performanceby optimizing end to end communication protocols But thesame increase in available transmission capacity alsoincreases the attractiveness of sharing that capacity forcommunication to multiple sites.
This led to the development of Frame Relay technology andservices. Frame Relay offers the end system or bridge/routera statistically multiplexed path to multiple locations as X.25does, but with lower overhead due to the elimination of hop-by-hop error correction. Frame Relay has received rapidacceptance. There are many private and public networks, andmany manufacturers of both end-user and networkequipment. But it is still very much a new market, withongoing technology, standards, service definition, andapplication development.
Even as Frame Relay is enjoying its first rush of deploymentand use, another generation of technology has captured theattention of technology advocates in the standards, carrier,and user community. Asynchronous Transfer Mode (ATM), atechnology under development in the CCITT standardscommittees for several years, is receiving increasing attentionby makers of workstations, the LAN community, and endusers as well as the carriers. Interest groups, alliances, andproduct announcements all receive many column inches ofspace in the trade press.
369
What are these technologies, and how will they impact users'and carriers' investment decisions? Whether you should skipFrame Relay and just wait for ATM? Or if Frame Relay isalready being used, will it be necessary to migrate to ATM?Will migration be difficult? How do these new technologiesrelate to the private line or X.25 services in use today? Thispaper aims to provide some answers to these questions.
2.0 Frame Relay
Frame Relay is a data communication technique similar inmany ways to X.25. It was first defined by CCITT in thecontext of ISDN, so has historically been standardized byCCITT Study Group XVIII. However, most of thedeployment of Frame Relay technology in both private andpublic networks has been outside of ISDN by using V-seriesinterfaces. For example, Northern Telecom's family of packetdata network products has added Frame Relay service to themany other packet services it provides on worldwide publicand private data networks.
2.1 Frame Relay and Other Network Techniques
A typical user of Frame Relay may be creating a networkwhere there are multiple locations with LAN routers orbridges that need to communicate. Prior to the availability ofFrame Relay, these routers could have been connected withdial-up modem or digital facilities, X.25 virtual circuits, orprivate lines. All these techniques still have their place.Frame Relay offers another service that combines some ofthe advantages of X.25 with some of the advantages ofprivate lines.
InPrivate Lin
Circuit SwitchedNetwork
Packet Netwo
RouterFrame Relay
Network
Figure 1: Wide Area Network Access Options
A private line usually provides the highest bandwidths to auser. However, this is also the most restrictive interconnect
l The maximum available bandwidth already reaches at least 2.4Gbitis using SDH facilities.
option, in that only one other fixed location is available foreach interface on the router.
A circuit switched line can reach many different locations,one at a time. Available bandwidth, while growing quickly, isusually limited to 14.4 kbit/s using V.32 bis modems, or64/56 kbit/s using digital facilities. There is now increasingdeployment of T1 and ISDN PRA switched networks, offer-ing up to 1.920 Mbit/s, and even more limited deployment ofswitched T3 facilities with almost 45 Mbit/s capacity.
X.25 network interfaces brought the first widely availablestatistically multiplexed service. A router uses a single X.25interface to reach many other locations over Switched orPermanent Virtual Circuits (SVC or PVC). This offers theopportunity for lower router costs due to the lower number ofinterfaces, plus lower network access costs for the samereason. Public networks usually tariff the service on a usage-sensitive basis. Although early networks were limited to 9.6kbit/s, access speeds rapidly reached 64 kbit/s, with rates of 2Mbit/s now available on Northern Telecom products.
Frame Relay, like X.25, offers statistically multiplexedvirtual circuits with similar opportunities for savings innetwork interface and access costs. In currently offeredservices, these connections are Permanent Virtual Circuits(PVC). These PVCs are used mostly as replacements forprivate line services. Public network tariffs may be flat-ratebased upon the committed throughput, or they may be basedupon actual usage. Access rates range from 56 kbit/s to 1,920kbit/s, but are expected to soon reach the T3 rate of 45Mbit/s.
Each Frame Relay virtual circuit on an interface is identifiedby a Data Link Connection Identifier (DLCI). This serves thesame purpose as an X.25 Virtual Circuit Identifier. It appearsas the first two2 octets of the frame header. The final twooctets are the EIDLC CRC-32, used for error detection. All ofthe remaining octets in a frame are available to carry higherlayer protocols and user information.
There are several reasons that Frame Relay has gained rapidacceptance with a promising future. The ones we'll look at inthe following sections are:
Industry-wide Implementation Agreements,
A single standard encapsulation for LAN traffic, and
Frame forwarding techniques for bursty traffic.
Then we'll see how this evolves smoothly to ATM service.
12 The Frame Relay Forum Implementation Agreements
The Frame Relay Forum was established in 1991 to promotethe interoperable implementation of Frame Relay equipmentand services. The Frame Relay Forum now has over 100corporate members with worldwide scope. These membersinclude providers of network equipmtit, network accessequipment, router and bridge vendors, workstation vendors,chip vendors, Frame Relay service providers, and users ofFrame Relay services. As a founding member, NorthernTelecom has played a major role in its activities.
The Forum adapted the ISDN-based definitions of FrameRelay from CCITT Study Group XVIII. For earlier avail-ability, the Frame Relay Forum Implementation
2 Frame Relay standards allow for two, three, or four octets for aDLCI. Services and equipment currently deployed implement onlytwo octets.
370
Agreement[1] for the User-Network Interface (UNI)expanded the physical layer specifications to non-ISDNinterfaces.
The implementation agreement includes layer managementprocedures that allow the end system and network to ensurethat each is still operational. Layer management proceduresalso indicate the status of the end-to-end communicationpath. The symmetry of the layer management proceduresallows their use between subscribers and networks, betweennetworks, or even where a private network is a subscriber to apublic network.
An Implementation Agreement[2; for the Network toNetwork Interface (NM) for PVC Frame Relay service hasalso been adopted by the Frame Relay Forum. NorthernTelecom will be deploying NM capabilities this year. Thiswill allow end-to-end data transfer and the associated layermanagement signaling and procedures to insure that the end-to-end status of the virtual circuit is available at all NNI's andthe two UNIs. The Inter-Carrier Committee of the FrameRelay Forum is already working on the second issue of thisagreement. This might include, for instance, in-line proce-dures to enable a carrier to easily obtain the billinginformation for a call that traverses multiple carriers.
Although current Frame Relay equipment supports onlyPermanent Virtual Circuits, work is progressing on thestandards for Switched Virtual Circuit (SVC) service. InCCITT, Q.933 is a completed specification for the User-Network Interface(UNI) signaling for SVC services. TheFrame Relay Forum is producing implementation agreementsfor a subset of Q.933 for early deployment.
2 Frame Relay Standard for Inter-LAN Communication
Standards defining how end-systems communicate across aFrame Relay network are also important. Such standardsallow users to combine equipment from differentmanufacturers to communicate either within a single user'senvironment, or via a public network to other users. A primeexample of such a successful standard is the standard forinterconnecting LANs across a Frame Relay network usingrouters or bridges as Frame Relay end sy5 ems.
To define how the LAN protocols would be carried withinFrame Relay frames, the Internet Protocol over Large PublicData Networks (IPLPDN) working group of the InternetEngineering Task Force (IETF3) defined an encapsulationscheme: RFC1294: "MultiProtocol Interconnect (MPI) overFrame Relay."j3)
RFC1294 is a proposed standard, which is the first step in theIETF standardization process. Several independent inter-operable implementations of this standard are already widelydeployed. IPLPDN sought to maximize the value of thisstandard by including the operation over Frame Relay of notonly the Internet Protocol (IP) protocol suite, but alsoconsistent methods for dealing with other LAN protocolssuch as OSI ConnectionLess Network Protocol (CLNP). Iteven specifies a method of carrying LAN traffic across aFrame Relay network utilizing bridging techniques compat-ible with IEEE 802.1.
Figure 2 shows a simple internet consisting of two LANscommunicating over a Frame Relay network. The boxesunderneath show the relevant protocol stacks. RFC 1294
3 The Internet Engineering Task Force is a voluntary organizationchartered by the lnicsnet Society.
deals with the MPI layer in this diagram. It defines how an IPpacket is encapsulated across the Frame Relay network. Thisallows IP and other network layer protocols to be passedtransparently between the routing software in the routers.When bridging of LAN protocols is desired, the whole IEEE802.2 frame is similarly encapsulated for transparent carriageacross the Frame Relay network.
to.10^ IPIP
MPI 11111 MPI 802.2802.3 FR FR 802.3
Figure 2: Multi Protocol Interconnection OverFrame Relay
This landmark work has seen rapid industry and standardsacceptance. It has been implemented in many router andbridge products, and deployed in several private and publicFrame Relay networks. The American National StandardsInstitute (ANSI) is currently enhancing the MPI over FrameRelay work to add support for carriage of even moreprotocols than IPLPDN specified.
Because of these co-coordinated activities in the Frame RelayForum and the IETF, the new technology of Frame Relay isbeing deployed simultaneously in wide area networkswitches and in LAN router access devices to enable realbenefits for end users. These benefits include the savings inaccess device interface costs obtained by statisticalmultiplexing of the network interface, and the savings inWAN facility costs arising again from statisticalmultiplexing. When using a public network, the accesscharges are likely to be lower for the single high speednetwork access facility, rather than multiple access facilitiesof lower speed.
2.4 Frame Relay Forwarding Techniques
The benefit of a single high speed network interface alsoallows other user benefits. Consider, for example, a networkof six routers interconnected by a full mesh of 384 kbit/sleased facilities. The five 354 kbit/s lines at each site could bereplaced by a single 19204 kbit/s line to a Frame Relaynetwork. Although this offers the same total transmissioncapacity at each site, the statistical multiplexing nature ofFrame Relay may allow more effective use of this capacity.
The "may" in the previous sentence is because there is adifference in the way Frame Relay network vendors imple-ment frame forwarding within the network. In one case,although frames enter the network at line rate, they aretransmitted across the network at the rate established for theparticular virtual circuit. This allows precise engineering ofbackbone and access bandwidth. But it also means that thecapacity reserved for traffic to other sites cannot be dynami-cally allocated when those VCs are not using their capacity.
4 1920 rather than the more commonly quoted 2048 kbit/s line rate isused hem, because this is the effective data rate most commonlyavailable after allowing for the signaling and framing overhead ofthe transmission system.
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This model is called ingress buffering because the framesreceived at line rate are buffered at the source node, thentransmitted across the network and out the network egresslink.
384 kbit/s private linesommimi 1920 kbit/s Frame Relay
1 11 11 11
.II
1 1 1 1 i 1 1 1 11 11 11
Figure 3 Private Line vs. Frame Relay Network
In contrast to this are networks such as those provided byNorthern Telecom that immediately forward received trafficacross the network at network trunk rate, and then out thedestination link at its line rate. Data is only buffered at thedestination node if the destination access line is busytransmitting a frame. The frame could be from the samesource, particularly if the source access line rate is faster thanthe destination access line rate. Or the line may be busytransmitting data from other sources. This model forimmediate network traversal is called egress buffering. Itrequires statistical rather than deterministic engineering ofnetwork facilities, but brings large benefits to those userswhose traffic patterns are not deterministic or predictable.
These benefits arise because LAN traffic is very bursty notonly between individual stations, but also when severalstreams of traffic are aggregated. An even distribution oftraffic between the sites is unusual, and that distributionchanges over time. Users initiate file transfers, includingperhaps printing on remote printers, when they want.
An ingress-buffered network interface must have individualvirtual circuits defined for each destination at the maximumthroughput capacity needed at any particular time. An egress-buffered network interface, in contrast, allows the access lineto be shared according to the instantaneous needs andcapacities of the currently active sources and destinations.
In our example, it may be that the 'normal' level of back-ground traffic between sites occupies 10% of the capacity toeach other site. Then the amount of capacity available for anadditional single file transfer in a source-buffered network islimited to 90% of 384 kbit/s, or 345 kbit/s. In contrast, in the
C-
C. C., s..1
destination buffered case, the data can move at 50% of 1920kbit/s, which is 960 kbit/s, a 278% increase in throughput!
Ingress BufferedNetwork
So' 384 kbilis Frame Forwarding111110 1920 kbit/s Frame Forwarding
Egress Buffer
Network
Figure 4 Ingress vs. Egress BufferingFrame Relay standards are in place for both network andaccess equipment. Products have been developed, andnetworks are being deployed. For example, NorthernTelecom has both private and public Frame Relay networksdeployed in many countries. These networks also continue tooffer their other selections from the wide range of otherpacket services available on NotLem Telecom's DPN-100family of data communications products. These include thesynchronous X.25, X.75 and asynchronous terminal supportusing the X.328/29 standards, SNA support for terminals,hosts, and LANs, as well as specialized protocols for thebanking, Point of Service, and airline industries. These are allcarried across a common homogenous trunk backbone.
The benefits of Frame Relay for multiplexed data transferacross high speed, high quality wide area facilities arealready being enjoyed by private and public network users.These benefits carry over into the emerging technology ofATM.
3.0 Asynchronous Transfer ModeAsynchronous Transfer Mode is an emerging cell-basedtechnology and set of standards. The standards are beingdeveloped by the CCITT working towards a new transmis-sion system for Broadband Integrated Servixs DigitalNetwork (B-ISDN). For this reason, it is envisaged as beingable to carry all types of traffic.
3.1 ATM Traffic Categories
Circuit based services include ordinary voice telephone calls
to high-speed video transfers. This Constant Bit Ra (CBR)traffic will be carried as an evenly spaced stream of cells.
Variable Bit Rate (VBR) traffic is generated by variablycompressed or silence-suppressed circuit services. The more
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familiar packet and frame based data services also generateVBR traffic. These VBR services only generate cells at therate necessary to carry the current traffic load.
These are ways the ATM network can carry traffic fromexisting and planned user services, in which subscribers don'tnecessarily have a cell interface. But subscribers also can getdirect access to the basic cell layer of ATM networks. Theythen are able to send multiplexed cells to distinctdestinations. This is similar to the Frame Relay capability tosend multiplexed frames to distinct destinations.
12. ATM Deployment
As a public network technology, ATM is planned to be theswitching fabric that will bring greater transmissionthroughput, better transmission utilization, and fasterswitching speeds.
ATM is now also being enthusiastically pursued as a poten-tial private network technology for both LAN and WAN use.LANs began as a shared media, and thus shared bandwidth,technology. Token Ring/8802.5, 10BaseT Ethernet/8802.3,and FDDI are all now based upon non-shared media betweenworkstations and hubs. If the hubs in LANs are replaced byswitching technology, then the bandwidth to the individualstations does not need to be shared either.
LANs are also tied to particular Media Access Controlprotocols at particular fixed media speeds. ATM, like FrameRelay and X.25, is scalable to the needs of the individualworkstation. If a new server or workstation must have highertransmission capacity, this does not require retrofitting thesame capacity to the other systems already on the network.
The workstations that sit upon LANs continue to increase inpower, and will be requiring the data rates offered by ATM.They are also running applications for which a multi-mediatransmission technology is desirable. It would seem prudentto adapt the millions of dollars of public network drivenstandards and technology development generated by ATM tothe private network WAN and LAN environments.
So there is now a large body of people who are eager todeploy ATM technology in private networks, even within asingle site. Public network leased line facilities mayinterconnect these local ATM environments initially, untilthere is enough critical mass to make the deployment ofpublic ATM services viable. This allows the end-users toacquire and become familiar with the capabilities of ATM intheir own environments. Thus the public networks do nothave to deploy expensive infrastructure before the users getto develop the applications and interfaces they need to makeeffective use of the technology.
Both users and providers for public and private networkinterests are represented in the ATM Forum which wasestablished in 1991. As a founding member, NorthernTelecom participates actively in ATM Forum to replicate forATM the benefits achieved by the Frame Relay Forum ingetting early implementation of standards and compatibleuser and network equipment. Like the Frame Relay Forum,the ATM Forum already has a large membership ofcompanies involved in a broad cross-section of the industry.
3.3 ATM Technology
Like Frame Relay, ATM is a connection-oriented technologythat can be used to offer connection-oriented or connec-tionless services. All cells in a connection follow the same
path through the network. Thus cells arrive in the same orderas which they were sent.
ATM defines two major types of virtual connections, VirtualPath Connections (VPC) and Virtual Channel Connections(VCC). There are fields to identify both of these in the ATMheader, called Virtual Path Identifier (VPI) and VirtualChannel Indentifier (VCI).
Figure 5 Virtual Path Connections & VirtualChannel Connections
As shown in Figure 5, Virtual Channel Connections aresubsets of Virtual Path Connections. This allows the ATMnetwork to use VPCs as virtual trunks between ATMswitches. These Virtual Path Connection virtual trunks maythen be routed amongst facilities by using ATM Virtual PathConnection cross-connects.
What are ATM cells? Cells are a fixed-length unit oftransmission, rather than the variable length that can becarried by frames. The decision to base ATM technology oncells was based on the need to carry multiple types of traffic.This includes traffic types such as high-speed Constant Bitrate (CBR) traffic that requires very little variation innetwork delay.
7 5 4BIT 0
2 1 a)
AFC ' VPI
VPI VCI
VCI
VCI 1 P1 ICLP
HEC
Cell Payload (48 octets)
1
2
3
4
56
53
Figure 6: ATM Cell Structure
ATM standards specify a 53 octet cell, as illustrated in Figure6. The first five octets are a cell header used for ATMfunctions such as virtual connection identification. Theremaining 48 octets are cell payload available for informationtransfer and other higher layer functions.
The cell header format is slightly different at the ATM UNIand NNI interfaces. At the UNI, there is provision for someflow control functionality. This might allow several devicesto equitably share a single ATM access line to the network.For example, an ATM access line to a residence may need anefficient simple way to handle several phones, televisions,and computer workstations without the need for switching.The Generic Flow Control (GFC) field of the ATM header inthe UNI is available to support this type of functionality.
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The Network to Network Interface by contrast is assumed tobe point-to-point. For this reason, the GFC field in the UNIheader has been eliminated from the NNI header. This allowsfor a larger number of Virtual Paths to be used as virtualtrunks between switches.
The remaining fields in the header include a Payload Type(PT) of 3 bits, one bit of Cell L: -s Priority (CLP), and an 8-bit Header Error Check (HEC).
ATM is currently defined to run on T3 facilities, as well asany of the Synchronous Digital Hierarchy (SDH) or Sonetrates. At these high rates, cell switching allows the low delayvariation sought for circuit emulation, while still allowing thestatistical multiplexing gains of packet-oriented traffic. Atlower rates, cell switching has no technical advantages overframe switching. On the contrary, the cell overhead becomesmore burdensome, and the cell accumulation delay does notallow effective mixing of multiple types of traffic.
M ATM AdaptationTo carry traffic across an ATM network, the traffic has to bedivided into a sequence of cells. Conceptually, this is nodifferent from the existing practices of dividing traffic intopackets (in X.25) or frames (in Frame Relay) or even data-grams (in Internet Protocol (1P) or ConnectionLess NetworkProtocol (CLNP)). For circuit mode traffic, the analogy is alittle looser. In those existing time division multiplexedsystems, the time slots into which the traffic is divided arenot self-identified as belonging to a particular conversation,which is necessary in ATM to bring the benefits of statisticalrather than time division multiplexing.
To allow interworking of different sources of traffic of thesame type, this mapping function of information into ATMcells must be standardized. Different mappings are beingdefined to take account of the diverse requirements ordifferent types of traffic. Then all of these types of traffic canbe carried as multiplexed cells across a homogenous ATMbackbone network fabric.
These mappings are defined in the ATM Adaptation Layers(AAL). The unit, or flow, of information that higher layerprotocols wish to send may have service specific informationadded by a service specific Convergence Sublayer (CS) ofthe AAL layer. This information is then segmented into cellsat the source and reassembled at the destination by theSegmentation And Reassembly (SAR) sublayer.
For the types of traffic that originates as packet , or frames,three AALs have been defined. AAL-3 is for connection-oriented traffic, and allows cells from multiple frames fromvarious points of a multipoint VC to be intermixed. AAL-4 isfor cormectionless traffic, and uses the same techniques toallow for multiplexed cells from various frame sources.
But for the simple case where cells from various frames arenot intermixed within a single virtual connection, a verysimple ATM Adaptation Layer called AAL-5 has beendefined. AAL-5 segments frames into cells, but only addscontrol information to the last cell. This minimizes theamount of control information required per segmented frame,thus maximizing the bandwidth that remains to carry userdata.
The last cell of a frame is marked in the ATM Payload Typefield of the ATM header. The AAL-5 trailer is always the lasteight octets of this cell. The length field in the trailer containsthe length in octets of the original frame, in Figure 7.
Combined with a 32-bit checksum over the data that is alsocontained in the trailer, this provides a very powerfulmechanism for detecting lost or corrupted cells.
n-byte Frame
AAL-5 PayloadAAL-5trailer
ATMHeader
ATM Payload
ATMHeader
ATM Payload
ATMHeader
ATM Payload
Figure 7: AAL-5 Adaptational ATM Standard for Inter-LAN Communication
The Internet Engineering Task Force (LEM) is consideringthe application of ATM to interLAN communication in itsATM working group. Currently, it is envisaged that theremay be at least three ways to carry today's interLAN trafficover ATM.
When there is an ATM network from source to destinationworkstation, there may be no need to carry the overhead ofthe LAN link and network layer protocols. In the OSI sense,this would mean using null (or very skinny) data link andnetwork layers, with the transport layer riding directly on asuitable ATM AAL layer. In the TCP/IP protocol suite, thismight mean running TCP and UDP directly on AAL-5. Or,there may be entirely new transport layer protocols that takeeven better advantage of the high bandwidth available withATM. This environment does not provide interworking withcurrent LAN-based workstations or protocols.
Alternately, it may be desirable to make the ATM networklook as much like a LAN as possible. In this environment, the8802.2 Logical Link Control layer is carried by ATM AAL-5. This maximizes the commonalty with LAN-basedprotocols, especially in a local ATM environment withinwhich the use of bridges or routers is not necessary. Bridgesand routers would still be used to connect the local ATM"LAN" to other LAN and WAN technologies.
It may also be desirable for the bridges and routers attachedto the ATM network to interwork with the bridges androuters attached to the Frame Relay network. This is thesubject of the next section.
4.0 Frame Relay to ATM
If Frame Relay is available today, and ATM will soonbecome available, which should be used when? The simpleanswer is: you can use both!
There are at least two ways in which this statement is true.The first is t!iat Frame Relay traffic can be carried acrossATM trunks between switches. This is part of the ATMpromise to use a single switching fabric for multiple services.But it is also a way of providing much higher trunk speeds
between Frame Relay services. This is called Frame RelayService carriage over ATM. Northern Telecom's packetswitches will use this technique not only for Frame RelayService, but also their rich suite of additional packet dataservices.
The second is that traffic originating at a Frame Relaysubscriber may be delivered to an ATM subscriber. Thismight be the case where traffic from a multitude of FrameRelay access lines terminates on a single or few ATM accesslines. Or perhaps the ATM site has subscribed to an ATMaccess facility because it uses other ATM services not neededat the Frame Relay sites. This is called interworking withATM.
Both user and network standards are necessary to allowsuccessful interworking. The network standard is CCITT1.555. This standard defines a method of encapsulating entireFrame Relay frames from multiple Frame Relay virtualcircuits into a single ATM virtual connection. This has thebenefit of minimizing the resources required of the ATMnetwork, both in virtual connection management and intraffic monitoring. At the same time, it also smoothes thestatistical nature of the Frame Relay traffic, by combiningmany different sources of statistical traffic into a single largerstatistical stream.
Router
IP802.2 MPI802.3 FR
Router
-4111---1110-
MPI1.555
AAL-5ATM
IP802.2802.3
Figure 8: Frame Relay Interworking With ATM
The user protocol to allow bridges and routers to interworkbetween use of Frame Relay and ATM networks is also beingdeveloped. In the deliberations of the ATM working group ofthe IETF to decide how to carry LAN traffic across ATM,there is strong support for using the techniques of 1.555 toallow interworking with Frame Relay. The technique is to useAAL-5 to encapsulate the data and control information thatwould have gone to a Frame Relay interface. Figure 8illustrates the -esulting protocol stacks.
This technique is useful in several environments. Perhaps theeasiest one to understand is the need to easily add networkcapacity. It is unlikely that any public or private networklarge enough to consider adding ATM technology to anexisting Frame Relay environment is able to shut down itsnetwork. Users whose site has been upgraded to ATM willwant to continue to work with users whose site is connectedby Frame Relay. And since it is likely that the first sites to beupgraded to ATM speeds are those that need the capacitymost, it is even more likely that users at Frame Relay siteswill still want to reach the resources at the ATM sites.
But network growth and expansion is not the only reason.Another is that the move to ATM may be driven by a desireat one, or a few, sites to have access to multimedia servicesthat are not widely deployed. This might be the situation in
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an industry that has a few manufacturing and repair sitesrequiring rich connectivity for exchange of Computer-AidedDesign (CAD) drawings or images of failed parts. However,it may well be that those CAD or image workstations remainunnecessary in sales or accounting offices.
Similarly, it is likely to remain true for many companies thatcertain locations remain small enough, or are in isolatedenough environments, that access to ATM technology iseither not justified or is simply not available. Here as well,use of Frame Relay services may continue to be the bestanswer. Interworking allows the major sites to use ATM tohandle the consolidated bandwidth needs of the other majorATM sites and the many Frame Relay sites. Since FrameRelay is suitable at narrs.mband and wideband rates to T3,and ATM becomes suitable at T3 rates and above, inter-working allows the end user to tailor the technology at eachsite to the needs of each site.
5.0 Conclusion
Frame Relay is a data network technology that is availabletoday. Users have access to standardized access technologyto enable them to use Frame Relay for real benefits in LANIntemetworking applications. Carriers can deploy the LANbridges and routers for the users to provide a LAN to LANpublic or virtual private network solution.
ATM is a networking technology that promises benefits tomany applications besides data networking. When used tocarry Frame Relay traffic, it offers a higher speed backbone
. trunking capacity. And it can be deployed in an inter-LANenvironment for new capabilities or capacities while stillallowing interworldng with LAN traffic carried by FrameRelay.
Northern Telecom's family of packet data networks hasintegrated Frame Relay into the rich suite of data protocols itsupports. All these protocols are carried together over asingle trunk fabric. As ATM capabilities are added to thissuite, additional capacity and services will become availablewhile retaining the investment in user protocols, equipment,and practices.
References
[1] FRF.01, "Implementation Agreement", Frame RelayForum, Ian., 1992
[2] FRF.02, "Frame Relay Network to NetworkImplementation Agreement", Frame Relay Forum, Aug.,1992
[3] Bradley, Terry; Brown, Caralyn; & Malis, Andrew: RFC1294, "MultiProtocol Interconnect over Frame Relay";Internet Engineering Task Force, Jan., 1992
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Biography
Mehmet Unsoy holds B.S.E.E, M. Math, and Ph. D degreesin computer science. From 1978 to 1983, he was a managerwith Bell Canada, responsible for various design andplanning aspects of Telecom Canada's Datapac packetnetwork. Dr. Unsoy joined BNR in 1984 as manager, datastandards evolution, and has held vaious managementpositions. Recently he was the director of DPN Developmentincluding the evolution of the DPN technology. He iscurrently with Northern Telecom as Director of Data ProductLine Management posted in Tokyo, Japan.
Kenneth Hayward holds a B.Sc. degree in Mathematics.Following three ye,rs as a Lecturer and Systems Analyst atMount Allison Univt.rsity, he joined BNR in 1972 as aSystems Programmer. In 1976, he became a member of theSL-10 development team, the basis for the Datapac Network.In the course of several management positions, he developedthe initial architecture for the DPN-100 product line. He isnow a Senior Advisor in the Advanced Product PlanningGroup.
Enterprise Networking using Frame Relay
K.S. Ram MohanInfonet Services Corporation
El Segundo, CA 90245, U.S.A.
Abstract
Networking in corporations has evolved into a new area called enterprise networking ,
which encompasses a much broader range of standards-based technologies andnetworking products. Tomorrow's worldwide enterprise networks (ENs) of multinationalcorporations are expected to move not kilobits but megabits per second, and in somecases, even gigabits per second. It is not just file transfer and interactive graphics, butimaging applications like document-image processing and multimedia applications thatwill determine the bandwidth of the required link or circuit. While current technologies likeT-1 and frame relay efficiently and effectively support high-speed file transfer andinteractive graphics, future broadband technologies like ATM and B-ISDN will supportbandwidth guzzling applications like imaging and multimedia, thus providing newcapabilities for end-users and new market opportunities for network services providers.Today, broadband primarily means T-1 and T-3 point-to-point terminations, which aregrowing at a rate of 20% annually. The driving force behind this sensational growth isenterprise networking, which primarily supports six traditional applications, viz., voice,bulk data transfer, electronic mail, fax, two-way video conferencing (using compressedvideo technology), and internetworking mixed LAN-types. The most rapid growth is seenin the area of internetworking mixed LAN-types, which is tremendously influencingenterprise networking strategies. Multinational corporations are looking not only for aneffective, ubiquitous, high-speed internetworking option to interconnect their islands ofdisparate LANs via their EN, but also for a switched, non-dedicated, transparent deliveryservice offered by network services providers, which can facilitate the transport of burstydata over the wide-area network in a cost-effective way. And, one such option, whichmeets both these requirements, is frame relay .
The paper presents a detailed insight of the frame relay technology and its applicationas an internetworking option for enterprise networking from a business standpoint. Thepaper begins with a comparison of X.25 and frame relay as internetworking options. Itelucidates the suite of standards supporting the frame relay protocol and describes framerelay's framE.) structure and format. The paper explains how a public frame relay networkservice can be implemented as an internetworking option in a hybrid networkingenvironment and discusses the challenges facing frame relay, including how thistechnology addresses the critical issue of interoperability of networking products. Thepaper concludes with a discussion on the issues to be considered while designing the ENusing frame relay.
Key Words : Enterprise, Network, Hybrid, Design, Internetworking, Interoperability.
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The need for a high -speedinternetworking option
Hybrid networking, through its abilityto leverage public network facilities, offersa more robust and economical enterprisenetworking strategy. The high-speedpublic network, which becomes thebackbone of the EN, is used tointerconnect the islands of disparateLANs (or mixed-LAN types).Internetworking LANs requires LAN-likespeed across the EN. A key attribute ofLAN traffic is that it is bursty . There arelong idle periods punctuated by rapidtransmissions of short duration.' LAN-based applications - such as, large filetransfers between PCs and host (like amainframe) and graphics-basedapplications like interactive CAD - arebecoming speed-sensitive and delay-sensitive. Thus, the need to transportbursty, protocol-oriented data trafficacross the EN in a cost-effective wayrequires a high-speed internetworkingtechnology, which not only facilitates thetunneling of protocols in their nativemode, but also provides bandwidth-on-demand.
X.25 and frame relay asinternetworking options
X.25, which symbolizes traditionalpacket switching, and frame relay aretwo of the current internetworking optionsfor enterprise networking. The framerelay protocol is based on ANSIstandards, which have been ratified bythe CCITT. Both frame relay and theCCITT-defined X.25 protocol arestatistical multiplexing protocols. Whilehigh data rates and larger bandwidth areimportant to ensun, short, internodal
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transmission times, the main source ofdelay in most X.25 networks is thecumulative effect of nodal transit delaytimes. Also, bandwidth utilization in X.25
networks is generally low due toprocessing delays and the innateperversity of the X.25 protocol. Framerelay changes this scenario drastically.Just as X.25 is defined as an accessprotocol to a packet network, frame relayis defined as an access protocol to abroadband packet network. While higherspeeds are technically feasible, mostX.25 networks support access speeds nohigher than 64 Kbps in the United States;and internationally, this is closer to 19.2
Kbps. Frame relay can accommodateaccess speeds up to T-1/E-1 ratesworldwide. Compared to X.25, framerelay is a more streamlined protocol thattrades heavy error protection forsimplicity of operation with the aims ofminimizing processing overhead andmaximizing the data transfer rate.2
The distinctive nature of the twoprotocols X.25 and frame relay is .bestunderstood by their placement in thefamiliar OSI Reference Model (OSI-RM).The X.25 protocol mandates eachintermediate system (network node) tooperate a complete Data Link layerprotocol on each connection seamentwith multiplexing and routing (or relaying)performed at the Network layer (Layer 3).This has a number of advantages;however, the considerable amount ofprocessing at each step fromorigination to destination required bythe X.25 protocol make high-speedimplementations difficult. Frame relayoperates completely within the Data Linklayer of the OSI-RM. In the frame relayprotocol, the Data Link layer is dividedinto two sub-layers.
Frame relay performs multiplexingand routing (or relaying) functions at thelowest of the two sub-layers, which iscalled the Data Link Core sub-layer.Other Data Link layer functions (e.g.,sequence control and error recovery) areprovided by the end systems. The framerelay technique strips out all the functionsdefined in the Network layer (Layer 3)and part of those in the Data Link layer(Layer 2), thus facilitating higherperformance. As a result, frame relaynot only supports network access at highdata rates, but also supports high-speeddata transport across the EN.3 Figure 1presents a comparison of the X.25 andframe relay protocol stacks.
In terms of functionality, frame relayis more efficient than X.25. The framerelay protocol enables each node tomake a fast determination of the route ofeach incoming frame. If the receivingnode is the destination, the incomingframe is processed; if not, it is quicklypassed on (or relayed) to the next nodein the EN. The need for processing isreduced to looking at the header andvery little buffering is required. Hence,transit delays are negligible -Indindependent of the number of hop?.
Frame relay provides maximumutilization of the available bandwidth - onthe backbone links at speeds above256 Kbps. Most modern X.25 - packetswitches are able to compete directlywith frame relay switches at trunk speedsup to 256 Kbps. At line speeds up to256 Kbps, there is no significantperformance advantage in using framerelay, vis-a-vis, X.25, as aninternetworking option. However, whenbandwidth requirements increase, andwhen packet sizes get bigger than 256
bytes, which is typical in the case of
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bursty traffic, frame relay is the obviouschoice. It clearly outperforms X.25 in
such situations. Frame relay thus offersa superior option in terms ofprice/throughput performance.4
There are significant technicaldifferences between the two protocols:
Dynamic Bandwidth Allocation: In anX.25 network implementation (based onT-1 multiplexer-based backbonenetwork), the bandwidth in the physicalconnections within the backbone networkis channelized and dedicated to aparticular destination, and is thusavailable only to traffic bound for thatlocation. Frame relay supports theestablishment of multiple, end-to-endlogical connections or permanent virtualcircuits (PVCs) within a single physicalcircuit (including the access circuit). In aframe relay network, bandwidth on thephysical link is allocated to a PVC onlywhen it is needed; at other times, thebandwidth is available to other end-to-end PVCs. The various logicalconnections or PVCs share the totalbandwidth available on the physical link.This concept of releasing bandwidthavailable on the physical link to PVCswhen needed is often referred to asdynamic bandwidth allocation.5
The mechanism to establish aswitched virtual circuit (SVC) on demandand tear it down when not needed hasnow been defined and standardized byANSI. With the implementation of SVCs,true dynamic bandwidth allocation orbandwidth-on-demand capability is nowavailable, and T-1/E-1 speeds on thebackbone can be economically achieved,which is technically not feasible using theX.25 protocol.
Congestion Management : This is onearea where frame relay is very differentfrom X.25. In the event of an overload,the X.25 protocol enables a node toregulate throughput, and ensures that noretransmissions due to network lossesoccur. Due to the absence of an explicitflow control mechanism in frame relay,emphasis is placed on "load-balance" ofthe network during its design to avoidoverloading of trunks and nodesresulting in packets being discarded -
during operation. Flow control is explicitin the X.25 protocol definition, while it isimplied through congestion managementin the case of frame relay. Frame relayswitches utilize congestion notifiers towarn transmitting and receiving DTEs,which are access devices, of acongestion situation in the network.
Error Detection and Recovery : This isanother area where frame relay isdifferent from X.25. Error detection andrecovery (or correction) - which results inheavy processing overheads and is theprimary speed-limiting factor in X.25networks - is explicit in the X.25 protocol.The frame relay protocol does notprovide for recovery of frames corruptedwhile the data traffic moves through theWAN "cloud". The protocol, however,includes a Frame Check Sequence,which is a cyclic redundancy check fordetecting corrupted bits, so that corrupteddata can be discarded by the end node.But it does not include any mechanismfor recovering (or correcting) corrupteddata (for example, by requestingretransmission). The X.25 protocol, onthe contrary, requires every node (orpacket switch) in the network to performerror detection and recovery as packetsare passed from a transmitting device toa receiving device. The X.25 protocol
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requires error-free receipt of a completepacket by every node before anyonward transmission of the data canbegin. This error correction mechanismwas needed because the X.25 protocolwas developed for networks to cope withmodem-driven transmissions acrossnoise-prone analog circuits. Thisconstraint has been intentionallyeliminated in the frame relay specificationbecause frame relay was developed fornetworks based on virtually error-freedigital circuits.
The frame relay specificationeliminates the need to check frames forerrors as they are passed from oneswitch to another in the network.Instead, only the switch that receivesframes from the transmitting DTE orcustomer premise equipment (CPE)router and the one passing frames to thereceiving DTE (or CPE router) checkframes for errors. If a frame has anerror, the switch simply discards it.Because frames with errors arediscarded, a frame relay network relieson the higher-layer protocols in the endsystems. It requires the end system onthe LAN - connected to tne CPE router atthe receiving end to use a Transportlayer protocol (like TCP) that informs thetransmitting end system to resendmissing frames. The primary function ofa frame relay network is end-to-end datatransport. Recovering data discardeddue to errors is not the concern of theframe relay network. Also, a frame relaynetwork does not guarantee the deliveryof data. Higher-layer protocols in theend systems are responsible formonitoring end-to-end data transfer andrequesting retransmission of frames thatmay be discarded by the network due toerrors or congestion.
Frame relay can also be used forinternetworking PCs and workstationsconnected to X.25 equipment (like PADsand packet switches). The advantagesof tunneling X.25 packets via a framerelay backbone network are many.Preservation of existing X.25 networkdefinitions like Closed User Group (CUG)and other network security features arethe key benefits. Also, for users of X.25network services, encapsulation of X.25packets within frame relay framesprovides end-to-end error protectionwhile taking full advantage of the speedand efficiency of the frame relayprotocol.6 X.25 can also be used toextend the access of an EN - based onframe relay - internationally. End-users inmultinational corporations can accessservers on remote LANs by dialing intoX.25 PDNs, which support intermediatedevices like protocol translators, that actas a gateway to their EN (via the X.25network). In this context, frame relaytechnology can be considered as anextrapolation of X.25 into today's reliable,end-to-end digital networks.
Why frame relay?
Packet switching based on the X.25protocol is a proven technology, whichisn't the best internetworking solution,but gets the job done. However, whennine different locations in four differentcountries in three different continentswith each site having a different host anda LAN configuration running differentprotocols have to be internetworked,and if virtually error-free transmission hasto be ensured for transporting burstytraffic, X.25 is definitely not the way togo. This requires a high-speed access-cum-internetworking technology like
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frame relay. Conceptually, frame relaytechnology provides the EN exactly whatit needs. It's a protocol developed forhigh-speed data communications and isdesigned for networks that use virtuallyerror-free digital circuits, which isattributable to the availability of newer,fiber optics-based digital transmissionfacilities.'
Frame relay transforms the EN into ahigh-speed networking infrastructure by:
reducing process time since it doesnot require higher layer processing ateach node and increases the speed ofinfranodal data transport; andreducing move time (of data throughthe EN) due to variable length packetsand higher bandwidth utilization, thusincreasing the speed of inter nodaldata transport.
Frame relay networks provide fulllogical connectivity and transparentdelivery services. This scenario is well-suited for the main purpose of framerelay, which is internetworking mixed-LANtypes.8 Frame relay's variable-lengthframes which make the most efficientuse of available bandwidth also meshwell with the variable-length packets usedby protocols like TCP/IP and DECNet.9Frame relay also offers a more flexiblerouting mechanism than mostinternetworking protocols, like TCP/IP.
What is frame relay?
Frame relay, technically, is a high-speed network interface-cum-switchingtechnology. Frame relay is also theunderlying technology for fast-packetnetworks or broadband packet networks.
The term relay implies that the frame isnot processed at the end point of eachnetwork link, but is relayed to the finaldestination.10 Frame relay simplifies thetransfer of data units by transforming itinto OS1-RM's Layer 2 function. Thisenables the Data Link layer to designatelogical connections and perform routing,
are functions of the Network layeror Layer 3.11
The key characteristics of a framerelay network can be summarized asfollows:
Transparent end-to-end transport offrames; only the header informationand the Frame Check Sequence aremodified by the intermediate networknodes.Detection of transmission format, anddetection of (but not recovery from)operational and transmission errors(e.g., frames with unknown Data LinkConnection Identifiers).
Standards
Frame relay networking and interfacestandards have been, and continue tobe, defined by the American NationalStandards Institute's (ANSI's) T1S1Committee. The standards defined areforwarded to the CCITT for ratification asRecommendations.12
The three important ANSI-definedframe relay standards are: T1.606,T1.617, and T1.618.
T1.606 standards cover frame relaynetwork services description; the T1.617standards cover signaling and networkmanagement specifications; and theT1.618 standards cover the description offrame relay protocol's core.
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T1.606 standards specify frame relaynetwork services in terms of user-network interface requirements andinternetworking requirements. It wasapproved by ANSI in 1990. Theequivalent CCITT Recommendation,1.233, is now in the final stages ofapproval. 1.233 also standardizes theuse of switched virtual circuits (SVCs).T1.606 Addendum describes congestionmanagement and was also approvedrecently by ANSI. The equivalent CCITTRecommendation, 1.370, is also in thefinal stages of approval.
T1.617 Annex B and Annex Dstandards were approved in 1991. Theequivalent CCITT Recommendation is
which is going through the formalapproval process. T1.617 Annex Bdescribes the management of PVCs on achannel supporting a mix of PVC andSVC connections. The T1.617 Annex Dstandard specifies critical networkmanagement functions, particularly usefulin the public frame relay network context.Access signaling and PVC managementfunctions are a part of T1.617 Annex D.The Local Management Interface (LMI)specifications forwarded to ANSI by theFrame Relay Forum has been approvedby ANSI and incorporated into the T1.617Annex D standards.
The frame structure and frame formatof the frame relay protocol is primarilybased on the T1.602/ Q.921 (LAP-D)standard, but extended with congestionmanagement fields. The new standarddesignated, Q.922/LAP-F, defines a fullData Link layer protocol in its own merit.Frame relay uses only a subset of theprotocol called LAP-F Core . Thisprotocol supports data transfer in aframe relay network, and is defined inANSI's T1.618 standards.
The equivalent CCITTRecommendation is Q.922 Annex A. Therecommendation includes key aspects ofthe frame relay protocol that describesthe structure of the frame, the FrameCheck Sequence, and delimiting flag bitpattern. The frame relay data transferprotocol defined in the Core is intendedto support multiple end-user protocols -simultaneously - within a single physicalchannel. The LAP-F Core providesprocedures for transparent, end-to-endtransfer of user data. Traditionalfunctions, such as windowing and errorcorrection, are not included in theCore."
Consolidated Link Layer Management(CLLM) is a signaling protocol for framerelay networks that predates LM1. Thespecification for CLLM appears in theT1.618 standards and in the equivalentCCITT Recommendation, 0.922 Annex A.The main function of CLLM messages isto augment the Backward ExplicitCongestion Notification (BECN)mechanism for reporting networkcongestion. CLLM messages reportcongestion in more detail than LMI,noting both the congestion's cause andits expected duration along with a list ofData Link Connection Identifiers (DLCIs)that should reduce traffic. The optionalStatus Update feature of LMI, however,performs a similar function, and itsimplementation in the richer set of LMIfunctions makes LMI seem moreattractive.15
The standard for permanent multicastvirtual circuit (PMVC) developed by twovendors has been forwarded to ANSI bythe Frame Relay Forum. PMVCs givetransmitting DTEs the ability to have aframe delivered by the network tomultiple locations.'`'
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A description of the frame relaystructure and format
One of the characteristics of framerelay is its variable framing structure.17The end system's protocol-specificframes are encapsulated and placed inthe variable length information field of theframe relay frame and tunneled throughthe frame relay network.18 Frame relayutilizes a frame structure consisting of anopening Flag, a two-byte Header, avariable-length Information Field, FrameCheck Sequence (FCS), and a closingFlag. The structure of the frame relayframe is shown in Figure 2.19 Figure 3shows how information is arranged in theheader of a frame.2° 21
How frame relay works
Figure 4 shows a simpleconfiguration of a frame relay networkconsisting of switches acting asbackb-_:, le network nodes (indicated asFi-IN). The end systems (ES) onEthernet LANs - at remote locations - useframe relay access to communicate witheach other. The three LANs areconnected to the frame relay backbonenetwork using customer premiseequipment (CPE) routers equipped withthe frame relay interface and software.Within the wide-area network "cloud", thefive network nodes handle the network'sside of the frame relay protocol. In thenetwork configuration described, thetransmitting and receiving DTEs i.e.,CPE routers A, B, and C - at each endare connected to the network's localaccess node by a physical - local access
link. The physical connection to theremote location is further established bythe frame relay network's backbone links,
which connect the remote node to thelocal node.
The end-to-end logical path taken bythe frame along the originating localaccess link, through the frame relaynetwork "cloud", and along theterminating - local access - link to itsultimate destination is called a logicalconnection or a virtual circuit . In aframe relay network, a virtual circuituniquely defines the path between twoend points (defined by the location of theDTEs). The virtual circuit configured asa dedicated path between two end pointsis defined as a permanent virtual circuit(or PVC). The CPE routers at the threelocations are connected to each other viaend-to-end PVCs rather than withdedicated physical circuits.
Data Link Connection Identifier (DLCI)is frame relay's logical connectionidentification mechanism. The DLCI isnot a destination address. It's just anidentifier of virtual circuits, whichfacilitates the multiplexing of several end-to-end PVCs over a single physicalcircuit. Since the DLCI is a 10-bitnumber, the frame relay protocol defines1024 possible DLCIs. Of these, 2 DLCIs(0 and 1023) have been reserved forsignaling and 30 DLCIs (1 to 15 and1008 to 1022) have been reserved forfuture use. For instance, networks thathave the optional multicasting featureimplemented, reserve DLCIs 1019 to1022 for that purpose. The remaining992 DLCIs, 16 to 1007, are available tosubscribers.22
The DLCI has local significance only.DLCIs are not unique throughout thenetwork. They are unique, however, ona specific end-to-end PVC. A PVC hasto be identified by different DLCIs at localand remote access interfaces. But,
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DLCIs can be repeated at different pointswithin the network "cloud", and they canalso be used for identifying local andremote access interfaces (connected byother end-to-end PVCs).
Let us suppose that CPE routers A,B, and C are interconnected via PVCs.The DLCI at the CPE A end of the PVC,which connects CPE C, is 25 and theDLCI at the CPE C end of the PVC is 55.Notice that the DLCIs at each end of thevirtual route are different . The CPE Bend of the PVC connecting CPE A is
also 55, because the PVC thatinterconnects CPE routers A and C isdifferent from the one interconnectingrouters A and B. When CPE router Asends a frame to CPE router C, it placesDLCI 55 in the header of the frame.Before the network delivers the frame toCPE C, the end node changes the DLCIfrom 55 to 25, which also allows thereceiving DTE to identify the frame asbeing from a particular DTE. Whilechanging the DLCI, the network alsorecalculates the frame's FCS.
A frame relay network operatesbased on certain key service parameters.They are:
Committed Burst Size (Bc)Excess Burst Size (Be)Committed Information Rate (CIR)
Committed Burst Size (Bc) is themaximum amount of subscriber data (inbits) or the largest number ofconsecutive bits that the network isconfigured to transfer withoutdiscarding under normal conditions,during a time interval defined as theCommitted Rate Measurement Interval,Tc. Tc = Bc/CIR.
d u.;
Tc is the time interval daring whichthe end system is allowed primarily tosend Bc amount of data, or a maximumof committed amount, Bc, plus theexcess amount of data, Be. Tc is not aperiodic measurement interval, but asliding window that is triggered by thereceipt of data from the end system.
Excess Burst Size (Be) is themaximum amount of uncommitted data(in bits) in excess of Bc that the networkwill attempt to deliver during Tc. Data,
Be, is treated as discard eligible by thenetwork and there is a greater likelihoodthat some data will be discarded.
Committed Information Rate (CIR) is
the data rate (in bits per second)guaranteed by the the frame relaynetwork services provider for transferringinformation under normal conditionsduring a time interval, Tc. It is a
mechanism that is used to allocatenetwork resources while provisioningnetwork services. CIR is primarily
associated with the logical linksconnecting frame relay nodes within thenetwork "cloud". A PVC's CIR may beless than or equal to the physicalcapacity of the whole circuit. It is
primarily the subscriber data throughputthat the network commits to support
under normal conditions within a
specified period without discarding data.
Data from a transmitting DTEinstantaneously arrives at the frame relay
access node at the Access Rate (AR) ofthe physical circuit (or the access link),
which connects the frame relay interface
of the DTE and the frame relay interface
of the network node. Traffic from endsystems on the LAN - connected to the
CPE router rarely sustains thethroughput provided by the AR. Hence
the access node is generally able to
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transfer Bc through the network at theCIR as the minimum data transfer rate.However, when many end systemstransmit bursty data at once, the networkcan become congested and discardframes. A frame relay network candiscard data for any of the following tworeasons, which are also the reasons fornetwork congestion. The first is that datafrom an end system has exceeded theamount the network has been configuredto transport. The second is a failedCRC, which indicates physicaltransmission errors.23 24
The different network interface points
mentioned above admit bandwidthaccording to pre-decided network serviceparameters based on the following rules:
Incoming bits - received by the framerelay network for a particular logicallink (or PVC) - totaling less than orequal to Bc bits during time interval,
Tc, are transmitted transparently to thedestination (without being discarded).Incoming bits - received by the framerelay network for a particular logicallink (or PVC) - totaling in excess of Bcbits, but less than Bc+ Be bits duringtime interval, Tc, are accommodatedby the network and transmitted to thedestination as discard eligible.Incoming bits - received by the framerelay network for a particular logicallink (or PVC) - totaling in excess ofBc+ Be bits are treated as immediatediscard by the network nodes.
It is possible that some bits within anincoming frame may be dealt withaccording to one of the above n. les. All
bits in an incoming frame are processedaccording to the above rules.25
Implementing frame relay as aninternetworking option
Figure 5 describes the architecture ofan EN based on frame relay. The hybridEN architecture uses a public frame relaynetwork as the internetworking option.
In an EN with a traditional T-1backbone - that uses full/fractional T-1links for internetworking remote LANs -multiple links between each CPE routerand the EN node (T-1 multiplexer) areneeded to create mesh connectivity, andbandwidth on the backbone is pre-allocated for each connection, which maynot be adequate for handling burstytraffic. In an EN that uses a frame relaybackbone, as mentioned earlier, burstytraffic generated by each application canreceive the entire - T-1 - bandwidth, ondemand. Also, in this approach, insteadof many point-to-point, dedicatedphysical links between the CPE routerand the EN node, only one router portper location is needed to establish aphysical - access - link between the CPErouter and the public network servicesprovider's point-of-presence (PoP), whichacts as the EN node.26 This reducesrecurring transmission costs and non-recurring equipment costs by curtailingnot only the number of leased lines andCSUs required, but also additional CPErouters that may be required.27
In EN architectures that use a publicframe relay network as theinternetworking option, end-to-endconnection between various CPE routersis established by the network servicesprovider using PVCs or SVCs.
In a PVC-based implementation, thePVCs are configured by the networkservices provider at service subscription.In this setup, whenever an end system
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needs to send data, the CPE router orthe DTE uses a pre-assigned logicalconnection identifier (or DLCI) to identifythe pre-established path (or PVC)through the network to the desireddestination. The DLCI not only allowsthe receiving DTE to identify a frame asbeing from a particular DTE, but alsohelps the network nodes to identify theframe as being from a particular logicalconnection, and also facilitates themultiplexing of several logicalconnections (or PVCs) over point-to-pointphysical connections. The end-to-endPVCs also share the bandwidth on theaccess link. There are no call setupprocedures in a PVC-basedimplementation. The transmitting DTEsimply needs to know the local DLCIassociated with the local - logical -
connection between the remote -
receiving - DTE and the end node. In
this implementation, network connectivitycan also be rapidly changed by addingor removing PVCs - via software control.Thus, it's easy to modify not only thenetwork configuration, but also plangrowth in an orderly manner.
In an SVC-based implementation, auser (of an end system) can dial theaddress of the destination end system.This establishes a dialog with the networkand signals to the network, in real time,the destination for all frames. The end-to-end virtual circuit is then set up by thenetwork's node and is assigned DLCIs(including the DLCI, which is associatedwith the local connection between theremote DTE and the end node).Connection between a transmitting DTEand the receiving DTE is accomplishedas needed by establishing a realtimeSVC that exists only for the session'sduration.
There are many advantages indesigning a hybrid EN architecture (usinga public frame relay network as theinternetworking option). In this setup,network equipment and facilities,backbone network planning and design,network operation (including end-to-endnetwork management and technicalsupport), and network equipmentmaintenance are the responsibilities ofthe network services provider. The end-user organization is only responsible forthe network equipment connected toLANs in the corporate campus and in theremote locations, which areinternetworked by the EN.
The key advantages can besummarized as follows:
Cost-effective wide-area connectivityFewer points of hardware failureLower administrative and maintenancecosts
Frame relay is thus well suited fordesigning multiprotocoi ENs that need tosupport the client /server architecture,which is a LAN-based distributednomputing environment that requiresLAN-to-LAN connectivity without relianceon a central site." Frame relay is notonly an appropriate network interface,but also an appropriate internetworkingoption to interconnect remote LANssupporting client/server applications thatgenerate bursty traffic - across the EN.
Challenges facing frame relay
Frame relay is not the simpletechnology it might first appear to be.There are some technical issues thathave not yet been fully resolved. Frame
386
relay standards, which emerged rapidly,are undergoing constant changes, andare still evolving. Network congestioncan be a problem if the end systems donot co-operate. With nothing to throttlethe frames flowing into the network fromthe end systems, an intermediate nodemay run out of buffers to hold the framesin transit. The only response to thiscondition is for the intermediate node todrop frames. The situation can quicklyescalate if the end system retransmitsframes in large numbers in order torecover missing frames, thus adding tothe congestion problem. Bettercongestion management techniques likeCIR metering by frame relay nodes, andXon/Xoff-like flow control mechanismsare thus vital.
There is currently no consensus onthe management protocols to be usedfor managing frame relay networks.Management of frame relay networks isnot based on any standard managementprotocols like SNMP or CMIP. Thescope of LMI procedures will have to beenhanced to provide SNMP-like networkmanagement capabilities.
Even in the internetworking arena,there are some critical issues that haveto be resolved. From the perspective ofa CPE router, frame relay is atransparent Data Link layer protocol forinternetworking remote LANs. Framerelay, today, does not support many ofthe protocol functions specifically neededby routers over a serial link, such asexchanging routing information betweenremote routers, and guaranteeing thedelivery of frames, etc. Standardscommittees within ANSI are working onseveral proposals to adapt frame relayinto a complete Data Link layer protocolfor supporting these critical functions.
These proposals include layering thepoint-to point protocol (PPP), an existingstandard serial line protocol formultiprotocol routers, on top of framerelay to provide complete Data Link layerprotocol functions.29
A key concept that dictates thedevelopment of enterprise networkingstrategies is interoperability . A questionthat frequently comes up for discussionis: Does frame relay addressinteroperability? The answer is yes andno . In a typical frame relay networkenvironment, two CPE routers fromvendor A can exchange frames over abackbone network supported by vendorB's frame relay switch. The routers ateach end of the logical connectionprocess the frames. In this case, theframe relay network providescommunication between two devices atLayer 2 and does not enhance the scopeof interoperability. True interoperability,on the other hand, is the ability of vendorA's router to send frames across a framerelay backbone network - supported byvendor B's frame relay switch to vendorC's router. In this .'ase, interoperabilityenables the interconnection ofnetworking products from differentvendors. This multivendor interoperabilityis currently not feasible. Today,Interoperability as defined by ANSI andthe CCITT - depends on the definition oftwo key points of interconnection:
The User-to-Network Interface (UNI)The Network-to-Network Interface (NNI)
The UNI describes how the CPErouter interconnects with the frame relaynetwork node and the NNI describeshow two different frame relay networksinterconnect to provide communications
387
among their respective end systems.The UNI standard has been approved byANSI and CCITT. The NNI standardratified by the Frame Relay Forum hasbeen forwarded to ANSI for approval.30
Critical business issues like billingand tariffs require more analysis. Today,charges for services are based on thenumber of PVCs subscribed per accesscircuit. These charges are not usagesensitive. The service charge is a flatrate based on parameters like CIR, burstrate, etc. The access - physical - circuitand access bandwidth are chargedseparately. Also, there are nostandardized billing procedures. Theseare just some of the many businessissues that have to be resolved.
Summary and Conclusions
The issues to be considered whiledesigning ENs using frame relay are:
The type of applications supported byLANs at different locations;The number of remote LANs to beinternetworked and the logicalconnectivity required, i.e., which twoend systems need to communicateusing what protocol, for establishingend-to-end communications; andThe type of traffic to be supported andits characteristics, i.e., maximumpacket size, frequency of the messageor the amount of data transmitted (innumber of packets), and the end-to-end response time required.
Frame relay, however, is not theultimate panacea for all the vicissitudesin enterprise networking . Managersresponsible for planning data networks incorporations and end-users of enterprise
network services should realisticallyassess their needs before planningenterprise networking strategies. Beforeselecting a particular frame relay serviceoffered by a network services provider asthe internetworking option for their EN,they should analyze critical issues like:
how much bandwidth on the backbonenetwork is required to support theirLAN-based, client/server computingapplications; andcan frame relay optimize theirbackbone bandwidth and provide acost-effective option for internetworkingremote LANs.
Frame relay is an emergingtechnology and has its own "suite" ofissues concerning network congestionmanagement and flow controlmechanisms, that have to be resolvedbefore it can be implemented globally bynetwork services providers. Frame relay,however, has shown the promise ofcombining the best qualities of differentprotocols - particularly X.25 and leasedlines. It's a technology that has beenaccepted worldwide, and will not only co-exist with new broadband technologieslike Asynchronous Transfer Mode (ATM)- that are being developed, but will alsoplay the role of a harbinger in thedevelopment of future broadbandnetwork technologies.
References
1. Lisowski, Benjamin, "Frame Relay:What It Is and How It Works",Business Communications Review(BCR) Supplement on FrameRelay , October 1991, p. 3.
388
2. King, Graham, "Frame Relay MeetsFast Packet - Pact or Friction?",Telecommunications , April 1991,p. 21.
3. White Paper, Motorola Codex , p. 3.
4. King, Graham, "Frame Relay MeetsFast Packet - Pact or Friction?",Telecommunications , April 1991,pp. 22-28.
5. Lisowski, Benjamin, "Frame Relay:What It Is and How It Works",BCR Supplement on FrameRelay , October 1991, p. 6.
6. King, Graham, "Frame Relay MeetsFast Packet - Pact or Friction?",Telecommunications , April 1991,pp. 24-28.
7. Liana, Jr., Andres, "Framing Up YourNetwork", UNIreview , May 1992,p. 48.
8. Cattell, Lawerence, "X.25 Is So VeryFast", CommunicationsWeek ,
November 25, 1991, p. 25.
9. Muller, Nathan J., "Keeping Pace WithData Communications Services:Trends and Technologies to Watchand Prepare For", UNISPHERE,November 1992, p. 17.
10. Minoli, Daniel, "Frame RelayTechnology: Overview", DATAPROReport , August 1992, p. 6.
11. Rahnema, Moe, "Frame Relaying andthe Fast Packet Switching Conceptsand Issues", IEEE NetworkMagazine , July 1991, p. 18.
12. Corbalis, Charles M., "Frame RelayProtocols, Standards andControversies", BusinessCommunications Review (BCR) ,March 1991, pp. 70-71.
13. Minoli, Daniel, "Frame RelayTechnology: Overview", DATAPROReport , August 1992, pp. 2-6.
14. Nolle, Thomas, "Frame Relay:Standards Advance", BCRSupplement on Frame Relay ,
October 1991, pp. 22-23.
15. White Paper, "An Introduction toUseful Frame Relay Testing",Telenex Corporation , August 1991,pp. 11-12.
16. Protocol Brief, "Frame Relay", ciscoSystems, Inc. , 1992.
17. Liana, Jr., Andres, "Framing Up YourNetwork", UNIreview , May 1992,p. 48.
18. Frame Relay Service InterfaceSpecification, US SprintCommunications Corporation ,
July 1991, p. 8.
19. Garciamendez-Budar, Edsel, "TheEmergence of Frame Relay in PublicData Networks",Telecommunications , August 1992,p. 24.
20. Seminar Documentation,"Fundamentals of Frame Relay", TheAmerican Institute , 1992,pp. IV - 23-26.
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21. Frame Relay Service InterfaceSpecification, US Sprint ,July 1991, pp. 17-22.
22. White Paper, "An Introduction toUseful Frame Relay Testing",Telenex Corporation , August 1991,pp. 2-3.
23. Frame Relay Service InterfaceSpecification, US Sprint ,July 1991, pp. 77-87.
24. White Paper, "An Introduction toUseful Frame Relay Testing",Telenex , August 1991, pp. 4-6.
25. Frame Relay Service InterfaceSpecification, US Sprint ,
July 1991, p. 87.
26. Lisowski, Benjamin, "Frame Relay:What It Is and How It Works",BCR Supplement on FrameRelay , October 1991, p. 10.
27. Malone, Richard J., "Frame Relay:Market Drivers and Issues", BCRSupplement on Frame Relay ,
October 1991, p. 13.
28. Lorrain, Jean A., "Frame Relay:Private Network Design Issues", BCRSupplement on Frame Relay ,
October 1991, p. 29.
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October 1991, p. 22.
X.25
LAP-B CORE(LAP-F)
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LENGTH IN BYTES:1 2 VARIABLE 2 1
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Figure 2 Frame Relay Frame Structure
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DLCI (Isb) FECN BECN DE EA (1)
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FRAME CHECK SEQUENCE (msb)
FRAME CHECK SEQUENCE (Isb)
FLAG SEQUENCE
Figure 3 Frame Relay Frame Format
390
Figure 4 A Simple Configuration of a Frame Relay Network
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392
ATM Service Node:A Step Toward Broadband Telecommunication Networks
K. Akiba, S. Iwasaki, H. Fuchigami,NEC Corporation
Abiko, Chiba Japan
Abstract
K. Kou, and A. ArutakiNEC America, Inc.Irving, Texas U.S.A.
An ATM Service Node, a high -speed switching system based on ATM technology, which realizesBroadband services is introduced. ATM networking topology, system implementation methodolo-gies and mechanisms to accommodate Frame Relay and SMDS services into the ATM backbonenetwork are presented.
1. Introduction
Broadband Integrated Service Digital Network (B-ISDN)[1,2] is opening a new era for multimedia telecommunica-tions. This network is perceived as an all-purpose digital net-work that provides high-speed interfaces for integratedaccess to support a wide variety of applications. With thestandardization of the Asynchronous Transfer Mode (ATM)as the transport vehicle well progressing, it greatly facilitatesthe implementation and acceptance of the B-ISDN.
However, B-ISDN is still seen by some as a service for a dis-tant future. Indeed, it will take sonic time before B-ISDN canbecome a commonpart in our society. As the standardizationwork and technology in telecommunication are clearlyheaded toward B-ISDN, it is a matter of time that cost-effec-tive broadband switching systems will be introduced to meetthe requirements for today as well as for tomorrow.
The ATM Service Node is a system developed to meet suchrequirements. The switch, which is implemented based onATM technology, features an output buffer type architecture.The switch allows Frame Relay (FR), Switched Multimega-bit Data Service (SMDS) and ATM access interfaces onto anATM backbone network. The three types of access interfacesprovide the flexibility of accommodating various services tomeet the changing needs of network users.
In this paper, ATM networking for B-ISDN is first intro-duced. Interworking between Frame Relay and ATM andbetween SMDS and ATM arc then presented. Finally imple-mentation methodologies on the ATM Service Node andmechanisms realized to accommodate FR and SMDS ser-vices into the ATM backbone network arc discussed.
2. ATM Networking for B-ISDN
ATM has been selected by the CCITT standard body as thetransfer mode for broadband services [3]. ATM is a high-speed cell-based switching technology. An ATM cell is com-posed of a 5-byte header and a 4S-byte information payload.It employs a connection-oriented protocol to suppoul both
393
connection-oriented and connectionless services. The lowdelay nature of cell switching allows it to carry data as wellas real-time voice or video traffic which may have constantbit rate (CBR) or variable bit rate (VBR) characteristics. SoATM is a prominent candidate to be used in high-speed net-working infrastructure for B-1SDN.
Our view of B-ISDN -is an ATM network with switches orservice nodes interconnected by a unified ATM interface.The network, as depicted in Figure 1, serves as a unified all-purpose transporting mechanism to support existing voice.data, and video services in today as well as services that willbe emerging in the future. The network accepts the user traf-fic at the user's preferred interfaces on one end of the net-work and transporting to the other end. The user interfaceswhich can be ATM, FR, or SMDS at DS I or DS3 rates areconverted into ATM format at the service nodes. Local AreaNetwork (LAN) are also connected to the ATM backbonethrough access systems such as routers or ATM multiplexers.
SMDS
ATM BackboneService es
RouterA.TM
FR
a
SMDS
Figure 1 ATM Network Architecture
LAN
The ATM backbone can be readily implemented todayDS3/0C-3 (Optical Carrier level 3) rate. As the technologybecomes available and the demand for higher bandwidth jus-tifies its need, the ATM backbone can migrate to 0C-12 rateor even Gigabit ] 4] to support user application at higheraccess rates. The migration gill be gradual and sino(0 withno interruption to existing services.
In order to suppm the Flame Relay and SM DS services,protocol huffy, ork ing. between Frame Relay and ATM and
H 1 FR payload 1FC1F1
between SMDS and ATM becomes the crucial links to beprovided to guarantee the success of the ATM backbone net-working.
3. Frame Relay and ATM Interworking
The FR to ATM intcrworking is designated to provided ser-vice interconnections between two or more FR users orbetween FR users and ATM users across the ATM backbonenetwork. In either case, a layered protocol conversion pro-cess is required to convert the data from one to the other.
Figure 2 shows the protocol stacks for Frame Relay andATM. The Frame Relay service is a connection-oriented ser-vice with the FR layer (LAPF) serving as the link layer func-tion and residing on top of the Physical layer. ATM is also aconnection-oriented service. ATM consists of the Physicallayer, the Physical Media Dependent (PMD) Sublayer, andthe ATM layer, all serves as layer 1 function to provide theconnection-oriented service.
FR
PHY
ATM
PMDPHY
Frame Relay ATM
Figure 2 Frame Relay and ATM Protocol Stacks
The intcrworking unit between Frame Relay and ATM pro-vides a bi-directional bridging function between the two pro-tocol stacks. As depicted in Figure 3, the FR-ATMinterworking unit processes the protocol information layerby layer and terminates the Frame Relay frames originatedfrom a Frame Relay router or CPE. The frame terminationincludes FR physical layer termination and FR link layer ter-mination. The FR physical layer generally supports unchan-nelized DS1 and channelized DS1. The FR link layerfunctions include Higher-Level Data Link Control (HDLC)frame termination, FR header termination, frame errorchecking, and link management signaling. The signaling andlink management for switched Frame Relay services stillneed to be finalized, but a number of signaling schemes havebeen adopted to provide permanent virtual connections.Such signaling standards include Local Management Inter-face [5], T1.617 Annex D [6], and CCITT Q.933 [7].
FR
PHY
Frame Re ayRouter/CPE
CS
FR SAR
ATM
PHY PMDPHY
FR-ATMInterworking Unit
ATM
PMDPHY
ATMBackbone
Figure 3 FR-ATM Interworking Unit Protocol Stacks
The FR-ATM interworking unit then convey.,, the FR frameinto ATM format according to the ATM protocol stack whichconsists of not only the layer 1 protocols for the ATM layer,but the Adaptation layer functions such as SegmentationAnd Reassembly (SAR) and possibly Convergence Sub layer(CS).
394
Two intenvorking methods can be used for FR transport: FR-ATM Encapsulation and FR-ATM Conversion. The FR-ATM Encapsulation Method applies only to FR to FR com-munications. In this method, a received FR frame is first ter-minated and verified for Frame Check Sequence (FCS) error.An errored frames is discarded without being processed atthis point. Only an error-free frame including FR header (H)(without Flag) is encapsulated into ATM cells, as shown inFigure 4, after the ATM Adaptation Layer (AAL) header andtrailer are added. In this process, Convergence Sub layer (CS)overhead (CS-H and CS-T) may or may not be added beforethe frame is segmented into SAR-PDU (Segmentation andReassembly Protocol Data Unit) payload and assembled intoATM cells.
ICS-H H1 FR payload ICs--r
ATM IAALI
[tarvirmil
1ATM AALI
Figure 4 FR Frame Segmentation with CS Added for Encapsula-tion Method
In FR-ATM encapsulation, ATM Virtual Path Identifier/Vir-tual Channel Identifier (VPI/VCI) value is mapped fromData Link Connection Identifier (DLCI) value in the FRheader. Other fields in the FR header are also checked ormapped to the ATM header fields if necessary. The ATMcells are then routed through the network using a pre-estab-lished virtual channel. At the destination, another FR-ATMinterworking unit provides a reverse process where the FRframe is reconstructed by reassembling the received NMcells and adding the FCS. This FR-ATM EncapsulationMethod provides a simple means for FR frame transparency.
The FR-ATM Conversion Method applies to either FR to FRcommunications or FR to ATM CPE communications. Inthis method, a FR frame is terminated and error-checked.Tne error-free frame excluding Flag, FCS, and FR header isencapsulated and segmented into ATM cells. The encapsula-tion takes the user data part of the frame only as shown inFigure 5. Again, the CS overhead may or may not be addedbefore the frame is segmented into SA.R -PDU payload andconstructed into ATM cells.
ATMIAAL
H FR payload FCSIF
CS-H FR payload CS-T
4ALr--
ATMIAAL WALL
ATMIAALI AAL
Figure 5 FR Frame Segmentation with CS Added for ConversionMethod
The ATM VPIJVCI value is converted from the DLCI valuein the FR header. The other fields in the FR header arc eithermapped to ATM header field or just dropped.
Comparing the above two methods, each has its own advan-tages and limitations. The Encapsulation Method providesend-to-end Frame Relay protocol transparency through theATM network. However, it restricts the communicationsonly between FR CPEs unless ATM CPEs recognize theFrame Relay protocol. The Conversion Method provides theflexibility to allow FR CPEs communicate with either FR orATM CPEs. The limitation is that ATM/FR protocol can notbe fully converted. Functions supported by the Frame Relayprotocol such as Forward/Backward Explicit CongestionNotification (PECN/BECN) have to be dropped.
The ATM Service Node adopts the Encapsulation Method toprovide early Frame Relay service through the ATM back-bone network. The Conversion Method will be providedwhen the issues mentioned above are examined by the stan-dard bodies.
4. SMDS and ATM Interworking
SMDS is Bellcore's proposal for high speed connectionlessservice over a metropolitan area. The SMDS protocol isbased on the IEEE 802.6 Metropolitan Area Network(MAN) to provide user access via dedicated Subscriber-Net-work Interfaces (SNI). The SMDS Interface Protocol (SIP),as shown in Figure 6, defines a three-layer protocol stack foruser gaining access to the SMDS network across the SNI.The SIP functions include addressing, framing, and physicaltransport.
SMDSCPE SIP Level 3
SIP Level 2
SIP Level 1
Figure 6 SMDS Protocol Stack
SIP Level 1 is the physical layer. It defines bit-level trans-mission of SIP Level 2 message across the physical facility.SIP Level 2 performs control functions for serial transmis-sion of the SMDS higher layer data unit. An error protectionmechanism is also handled at this layer. SIP Level 3 providesaddressing for user data as well as protection against lost and
395
mis-routed L2-PDU (Level 2 Protocol Data Unit) over thenetwork.
In a connectionless service, such as SMDS, each PDU con-tains the addressing information and the user data. EachPDU is independently routed to its destination, withoutregard to establishing or maintaining connections. Theresponsibility for message integrity is checked only once bythe L3-PDU, rather than checking at a lower layer for eachdata unit.
ATM is based on connection-oriented cell-based switching.SMDS uses the same cell relay switching technology. Thestructure of SMDS L2-PDU is similar to the ATM cell for-mat with the exception of the Access Control field and theNetwork Control Information field [8]. The interworkingbetween SMDS and ATM is to take advantage of the connec-tion-oriented ATM backbone network to provided a connec-tionless service between two or more SMDS users. However,SMDS routing should be made according to L3 addressesbecause of its connectionless nature. The following discus-sions focus on SMDS routing mechanisms through the ATMbackbone network.
Two address conversion and routing methods apply to theSMDS-ATM interworking: centralized and distributed. Inthe Centralized Method, shown in Figure 7, all SMDS cellsreceived by the access switches are handed over to a centralswitch (SMDS Server) where full address matching, screen-ing, and conversion are performed. The SMDS messages arcrouted to their destinations through the SMDS Server. Thismethod eliminates the need of L3 address translation foreach access switch, but the central switch requires a largetranslation table and high processing power to cover alladdresses conversions.
Service Ncdes ATM Backbone
Figure 7 Centralized Address Conversion and Routing
In the Distributed Method, shown in Figure 8, the addresstranslation and ATM cell conversion ,re performed at eachaccess switch and the ATM cells are routed directly to theirdestination. In this method, access switches can handle alarger traffic more effectively with a sr. ller translation tablein each switch. However, the translation table needs to heduplicated for each switch and a virtual circuit needs to beestablished for each SMDS address pairs.
Service Nodes ATM Backbone
Figure 8 Distributed Address Conversion and Routing
The ATM Service Node adopts a Hybrid Method, as illus-trated in Figure 9, which is a combination of the two meth-ods mentioned above. The idea of using the Hybrid Methodis that a typical end-user tends to send information toselected destinations. For these selected destinations, theingress Service Node can use pre-assigned ATM virtual cir-cuits to convey SMDS traffic (i.e. L3 address full translationfunction). For the rest of the destinations, the Service Nodewill only perform partial address checking from the ingressL3-PDU and transmit information to one of the SMDS Serv-ers which then routes the L3-PDU to the specified destina-tion.
Service Nodes ATM Backbone
SMDS Serve
Figure 9 Hybrid Method for SMDS-ATM Interworking
5. ATM Service Node System Architecture
The NEC's NEAX 61E ATM Service Node Model 10 wasdesigned with the ATM networking in mind. The ServiceNode currently supports ATM DS3 and OC-3 interfaces forthe backbone network. User interfaces currently supportedby the Service Node include ATM and SMDS services atDS3 and DS I rates and FR at DS1 rate for either channelizedor unchannelized services.
The ATM Service Node, as depicted in Figure 10, consists ofthree major functional subsystems: the ATM Output BufferModular (ATOM) switch subsystem, the interface commu-nity subsystem, and the processor subsystem.
Interfaces CommunitySubsystem
ATM
SMDS
FR
CMU
ATOM SwitchSubsystem
ATOMSwitch
Processor
Processor Subsystem
Figure 10 NEAX 61E ATM Service Node Model 10 System Con-figuration
As shown in Figure 11, the ATM Service Node is composedof a Basic Frame and one or more Line Interface Frames.The Basic Frame accommodates a duplicated processor unit,a duplicated switch unit, and two interface units. The LineInterface Frame accommodates up to four additional inter-face units for ATM, SMDS, and FR.
Figure 11 NEAX 61E ATM Service Node Model 10 Basic Frameand Line Interface Frame Layout
5.1 ATOM Switch Subsystem
As depicted in Figure 10, the ATOM Switch Subsystem con-sists of a core switching fabric (ATOM Switch) 191 and theCell Multiplexer (CMUX). The core switching fabric, shownin Figure 12, implements an 8 x 8 single stage ATM-basedswitching function and provides a total throughput of 2.5Gbps. The switching fabric uses dedicated output buffers foreach output port to provide low cell loss high performanceswitching. Routing information which is conveyed viaSwitch Specific Overhead (SSO) are generated in the inter-face units and are appended to each ATM cells.
396 i;
Figure 12 ATM Service Node Core Switching Fabric
The CMUX is located between the line interface card groupsand the ATOM switch core. It is responsible for multiplexingand demultiplexing ATM cells transmitted between the inter-face units and the ATOM switch ports. The CMUX is imple-mented with cell synchronization and bus arbitration controlfunctions to allow cells coming from multiple line interfacesbeing accommodated to the ATOM switch port.
5.2 Interface Subsystem
The basic functions of the Interface Community Subsystemare line termination and protocol conversion. A number ofother functions are also provided such as speed conversion,multiplexing/demultiplexing of cells or frames, and traffic/alarm/performance data collection and reporting. The Inter-face Community Subsystem is composed of three groups ofinterfaces; ATM, Frame Relay, and SMDS. All cards in thissubsystem are duplicated for more reliable operation, exceptfor DS1 line interfaces.
The ATM layer protocol for the ATM interfaces is termi-nated in the ATM Interface Unit (ATMIU). The ATMIU con-verts the VPI/VCI values in the ATM cell into the switchinternal logical channel to facilitate cell switching conductedby the ATOM switch. The ATMIU also performs the cellflow monitoring and bandwidth policing functions that arethe essential parts of the Usage Parameter Control (UPC)function for ATM services.
The Frame Relay Interface Unit (FRU) provides bothunchannelized DS1 and channelized DS1 interfaces. To sup-port the ATM switching/trunking, multiple frames areaccommodated and segmented into ATM cells for switchprocessing. The ATM Service Node provides not only framesegmentation function for the ATM network but the FR toATM interworking capability to allow information to beexchanged between the user equipments that arc connectedby the two interfaces. The FR and ATM interworking mech-anism is explained in Section 3.
The SMDS Interface Unit (SMDSU) pros ides line termina-tion and Physical Layer Conversion Protocol (PI.('P) tenni-
397
nation at either DS3 or DS1 rate. The interface also includesL2-PDU termination and L3-PDU Destination Address (DA)conversion functions in order to convert SMDS cells intoATM cells. Section 4 describes SMDS/ATM conversion andnetworking.
5.3 Processor Subsystem
The Processor Subsystem, which has redundant configura-tion, is the central intelligent part of the ATM Service Node.It consists of a central processor, a hard disk unit, and a car-tridge tape unit. The central processor (CPU) communicateswith various I/0 devices of the Service Node to perform thefunctions such as operation, administration, and maintenance(OAM).
The CPU is loaded with software which is partitioned intothree layers, as shown in Figure 13. The Basic OperatingSystem (OS), which consists of a real -time kernel, handlesreal-time task processing. The Extended Operating System(EOS) provides low level functionality and interfaces to sev-eral applications such as switch restart processing, fault pro-cessing, configuration management, equipn.ent diagnosis,alarm handling, human machine interface, and protocol man-agement.
Application Application Software
Extended OS
Basic OS
SystemManagement
File Server
ManagementProtocol
Human/MachineInterface
TCP/IP
Time SharingSupervision
Kernel
I/O Driver
Figure 13 Software Structure
The Application software handles routing configuration.traffic counters and performance counters operation.accounting operation, and fault management. These func-tions arc the major part of the ATM Service Node OAMfunctions.
6. Conclusions
With the national and international standard bodies aggres-sively refining standards for Broadband services and equip-ment manufacturers introducing ATM related prducts.ATM is gaining momentum. The clearer picture of 13ioad.band services and ATM networking is also developing. Inthis paper. we have described technical issues with respect toaccommodating SMDS and Frame Relay services into anATM backbone networks. We have also presented our solu-tion to provide a migration from pre-B1SDN services to the13-1SDN. The NEAX 611:. ATM Service Node Model 10.which is one of the first ATM switch with this picture in
mind, is a powerful clement in making B-ISDN service areality.
References
[1] S. E. Minzcr, "Broadband ISDN and Asynchronous'Transfer Mode (ATM)," IEEE Communications Maga-zine, Sept. 1989.
121 Recommendation 1.211, "B-ISDN Service Aspects,"CCITT, June 1992.
[3] Recommendation 1.361, "B-ISDN ATM Layer Specifica-tion," CCITT, June 1992.
[41 N. K. Cheung, "The Infrastructure for Gigabit ComputerNetworks," IEEE Communications Magazine, April1992.
[5] "Frame Relay Specification with Extensions, based onTIS1 Standards," Document number 001-208966, Rev.1.0, Sept. 18, 1990, Digital Equipment Corp., NorthernTelecom, Inc., Strata Com, Inc.
[6] ANSI T1.617-1991, "Integrated Service Digital Network
(ISDN) Digital Subscriber Signaling System No. 1(DSS1) - Signaling Specification for Frame Relay BearerService," ANSI, June 18, 1991.
[7] Draft Recommendation Q.933, "Digital Subscriber Sig-naling System No. 1 (DSS1) - Signaling Specification forFrame Mode Basic Call Control," CCITT, 1992.
[8] TR-TSV-000772, "Generic System Requirements in Sup-port of Switched Multi-Megabit Data Service," BellcoreTechnical Reference, Issue 1, May 1991.
[9] A. Itoh, W. Takahashi, H. Nagano, M. Kurisaka, and S.Iwasaki, "Practical Implementation and Packaging Tech-nologies for a Large-Scale ATM Switching System,"IEEE Journal on Selected Areas in Comm., Vol. 9, No. 8,Oct. 1991.
398
TARGETS
Japanese Digital Cellular Telecommunication System
Minoru Tanaka and Yuji KitaharaNEC Corporation
4035, Ikebe-cho, Midori-ku, Yokohama, 226Japan
Abstract
Recently, the number of mobile cellular subscribers is increasing moreabruptly, specially at large cities in all over the world. For the attainmentof highgrowth, two technological improvement been occured. One is theresearch of new utilization of frequency band, other is digitalization.This paper will mainly discuss about current status of Japanese digitalcellular telecommunication system.
(1) Introduction
As is shown in Fig.1, the research anddevelopment of digital cellulartelecommunication system in Japan started in1989 by MPT's study group and in 1991,voluntary technical standard of the digitalcellular telecommunication system in Japan(JDC) was establishied as STD-27 by RCR(Research and development Center for Radiosystems). Major features of JDC are 1)Highsubscriber's capacity 2)Increased density andreduction of infrastructure's cost3)Downsizing and low cost of handheldportable terminals 4)Inter-connectivity withfuture ISDN by simplifiing air interfacespecification etc. Under the condition oflimited frequency resources, efficiency ofspectrum use is very important. JDC's systemcapacity is very high because of adoptingQPSK modulation method which has betterspectrum efficiency.
STUDY CROUP
(APT)
TTC
OfT)
STANDARD COMMITTEE
I1:19 1990 I 1931
START
ASTART
AFINIAL REPORT
0 AFINAL REPORT
(TECHNICAL REQUIREMENTS)
REVISED
REGULATIONS
A A
ORGANIZED EST'S. I SliE0SUB-00141 MEE RCR STD-27(START)
MPT : Ministry of Posts and TelecommunicationsTTC : Teleommunications technology CouncilRCR : Research & Development Center for Radio SystemRCR STD-27: STANDARD of Digital Cellular Telecommication System
Fig.1 Research and study on digitalcellular system in Japan
399
BEST COPY AVAIME
(2) JDC Technical Overview
When new digital system will be developed,the technical specification should beconsidered and established in accordancewith market needs, especially for user'smerits. Reduction of expences, many andbetter services, and security enhancement arethe most important items.Fig.2 shows the specification targets of thedigital cellular systems. As for operator'sside, to have high subscriber capacity withinlimited frequency resourses, to have a moreeconomical infrastructure and to haveflexible system for future servicesexpandability are basic conditions. JDC hasall such advantages in comparison with ADCand GSM. Operator's advantages means thatoperator can give the better services to enduser. Technical comparison among JDC, ADC,and GSM are shown in Fig.3. The outstandingfeatures of JDC are highly efficient spectrumuse and speech codec method.
JDC / ADC /
Capacity IncreaseCost Reduction
Small Portable Unit
Service Enhancement
Security Enhancement /Common Standard
Fig.2 Target for digital Cellularsystem
_.t
ADC GSM
I Frequency BandI Access MethodChannel Spacing
!Traffic ch/RF CarrierTransmission Bit RateModulationVoice Coding
80CMEz/1500M.11z 80014lic . 900MB,-DMA TOMA ,TDMA26,1CAz M 1Hz 200kBz3(6) 3(6) 8(1614211.bit/s 48.6kb1t/S / 270.83kbit/sn/40OPS8 m/491DPSK (GMSKVSELP VSELP RPE-LTP 1
'1
Fig.3 Technical Characteristic ofdigital Cellular system
Fig.4 shows the spectrum characteristics ofQPSK used in JDC and ADC system, GMSK used inGSM system. By Fig.4, it is clear thatspectrum bandwidth of QPSK modulation is morenarrower than GMSK.But QPSK is weaker for non-linear distortionthan GMSK. Nowadays, non-linear distortionof amplifier can be easily compensated bylinearizer or feedforward techniques.Depending on this high spectrum efficiency,JDC system can accomodate more subscribersthan other systems. Fig.5 shows thesubscriber's capacity within 10MHz bandwidthbetween JDC and GSM calculated under someconditions. The subscriber capacity of JDCis approx. double compared with GSM. Otherimportant factor is total economy of thesystem infrastructure. Total economy meansthat the equipment cost is cheap, floor spacefor equipment is small, low power consumption,low installation and maintenance cost.Fig.6 shows density of JDC equipmentscompared with analog equipments. The floorspace for JDC is smaller than analogue system,approximately, one fourth.
Normalized Frequency
Fig.4 Spectrum Characteristics
400
JDC/USDC GSM
CIR : 14d8 (BER=0.011( 7r/4 ()PSI()
OR : 9d8 (BER=0.011(GMSK)
Fig.5 Example for subscriber capacity
1.1.57 C1211 ECM =1 =I OCCI
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Fig.6 Equipment configuration ofanalogue cellular and JDC system
(3) JDC system overview
Fig.7 shows the system block diagram of JDC.Basically, this block diagram is almost sameas other system's. In JDC, the air-interfacebetween mobile subscriber and basestation isonly specified and not specified A and A-bisinterface such as GSM system. JDC's A andA-bis are specified freely by operatorsdepending on their operational conditions.Common amplifier(CAMP) is one of majorfeatures of JDC. By using CAMP,TM(Transmitter Multiplexer) is not necessaryand dynamic channel assignment can he adopted.CAMP technique can also be applied to futuremicro-cell applications.Photo.1 shows JDC TRX(Transmitter, Receiver)equipment which have been suplied to NIPPONIDOU TSUUSHIN CORPORATION.
SEX Tra..CAMP : C..wn Amok.SaKti: .00..STYTEL : To.h. fat
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Fig.7 System block diagram of JDC
:11ONOMIPMMID
1.-
Photo.1 External view of JDC equipment
(4) JDC Terminal OverviewFig.8 shows the specification and design
targets of JDC terminal. JDC has the featureof small and light weight terminals.In 1993 to 1994, Japanese operators willlaunch the digital cellular system with thesmall hand-held portable and car mountsphones. Photo.2 shows the analogue terminal(MOVA N ; supplied to NTT DoCoMo) of whichexternal form is almost same as digitalcellular terminal. Fig.9 shows thedownsizing example of JDC terminal in future.
Item ParametersHand HeldPortable
Car Mount
Power Output 0.3/0.8W 2W
Weight -2309Volume -150cc -700cc
Radio FrequencyTX : 900MHz bandRX : 800MHz band
DURX FrequencySeparation 130MHz
Access Method 3ch TDMA/42kb/sCarrier Frequency
Separation 25kHz(interleaved)
Modulation Accuracy less than 12.5%
Receiver Sensitivity
less than 4dBp/10.2(sta t ic)
less than 7dBp/10.,(diversity)
Adjacent ChannelLeakage Power less than -45dB
Fig.8 Technical parameters of JDCterminal
401
Photo.2 External view of Hand-HeldPortable Telephone
1000
DOWNSIZING OF HHP
ANALOaUE.F.
;! - IJDC
'90 YEAR
z9 E
0
0.1
Fig.9 Volume trends of JDC Hand-HeldPortable Telephone
(5) Conclusion
In conclusion, JDC is the user orientedsystem with the most advanced technologies.And also, JDC is the most enhanced andefficient digital cellular system, merging toISDN era.
(6) Acknoledgment
Authors express their gratitude to NTTmobile communication network Inc.(NTT DoCoMo).
402
The Evolution of Wireless: Meeting the Mobile User's Needs
Eric F. EnsorBellSouth Enterprises, Inc.
Atlanta, Georgia, USA
1. Abstract
The popularity of wireless communications services and the growingmobility of modern society are fueling an evolution toward morepersonal communications services. Though many trials are being
conducted with new wireless technologies such as digital cellular andmicrocells, studies that assess the user's need for advanced wirelessservices and the customers' definition of these services are drivingthis evolution. This paper explores both technical and user trials
involving the evolution of wireless.
1. Market Environment
In the last 8-10 years the phenomenal growthof cellular and paging customers around theworld has amply demonstrated the popularityof these services and the growing need forwireless communications in a mobile society.
Since 1983, U.S. cellular customers have gonefrom zero to more than 10 million. There aremore than 4.7 million cellular customers inEurope and nearly 2.5 million in the far eastincluding 1.5 million Japanese cellularcustomers. Paging customers number in thetens of millions around the world. In fact,BellSouth's paging companies serve more than1.4 million pagers worldwide.
These figures prove the popularity and rapidgrowth of wireless communications services,at least among business consumers and thosein higher income brackets. Projected figuresfor personal communications services areeven higher. Many studies predict at least40 million wireless users in the U.S. alone bythe year 2000, and some say as many as 115million. This market could produce an annual$50 billion in service revenue.
Since 1989, regulators, manufacturers andcarriers around the world have beenexploring ways to bring wireless services tomore customers, with more variety and at alower price.
403
2. Technical Trials
Much of the emphasis in these explorationshas been on new technologies and networkssuch as digital cellular systems, microcellsystems, and wireless PBX.
2.1 Digital Cellular
The conversion to digital cellular offers morethan just capacity, it means additionalcapabilities and capital cost reductions. Tothe customer it can mean increasedtransmission quality, fraud protection andprivacy. For these reasons digital conversionwill occur in cellular markets of all sizes.
There are several digital cellular standardsnow being implemented around the world.
In North America -- Toronto, Chicago, NewYork, Los Angeles and South Florida areoperating or preparing to offer TDMA digitalcellular service. A TDMA systems is also inoperation in Hong Kong.
GSM systems are being planned or operatedin the U.K., Italy, Germany, Sweden, France,Australia, Finland, Norway, Switzerland,Denmark, New Zealand and other countriesaround the world.
Research is also underway on E-TDN1A andCDMA. These two advanced digital accesstechnologies are expected to offer capacityincreases of up to twenty times that of today'sanalog cellular.
2.2 Microcells
Experiments with microcell integration intoexisting cellular networks have demonstratedthat this is an excell at technology forincreasing both capacity and coverage inpreviously hard to reach areas such as in-building and in usage dense areas.
Microcells also have the added benefit ofproviding capacity increases without havingto change subscriber units.
Cell site size is so small in Argentina and HongKong that these systems already closelyresemble microcell personal communicationsnetworks. And DCS 1800 systems beingdesigned for Germany and other Europeanmarkets will use mini basestations andmicrocell size coverage areas.
2.3 Wireless PBX
Manufacturers around the world areexploring hardware solutions for wireless PBXneeds. The Digital European CordlessTelephone (DECT) standard is a popularsolution in Europe. Local exchange carrierssuch as BellSouth in the southeastern UnitedStates are also developing wireless centraloffice solutions to meet these sames needs.
BellSouth is trialing various wireless EssxTmsolutions in its Atlanta and Birminghamheadquarters. The company has alsotentatively planned a customer trial ofwireless EssexTM for early in 1993. The targetarchitecture is a wireless controller locatedwithin the network and basestations andhandsets sold as CPE.
3. Market and User Trials
Though these technological advances areimportant to the evolution of wireless service,market research and common sense tells usthat the user is blind to these questions oftechnology. They are interested in services.Recently more carriers and manufacturershave begun examining the variety of servicesto be provided by certain technologies andtheir appeal to the public.
404
BellSouth's Personal Communications Servicestrial in Orlando, Florida was designed tomeasure and understand the demand fordifferent new wireless services and to analyzethe impact of new services on existingservices. The trial was conducted in twophases.
3.1 Demand Assessment
The first phase assessed consumer andbusiness demand for wireless servicesincluding cellular, PCS, paging and cordlesstelephone. This pure marketing research wasconducted in Orlando and Indianapolis. The1174 participants experienced a simulatedcustomer purchase process. They wereexposed to ads, newspaper articles and word-of-mouth video tapes, shopped in a "retailstore" or experienced a business to businesssales call, and then were asked to assess theprobability that they would purchase anywireless service including four test services:Drive Around PCSTM, Walk Around PCSTM,Out Bound PCSTM, and Cordless Phone PlusTM &En Zone ServicelM. Cellular awareness and useby the research participants were alsotracked.
Results of this phase show that theintroduction of PCS will mean a faster take upon all wireless services. This means thatrather than creating an entirely new market,PCS will accelerate the rate at whichcustomers who might normally purchasecurrent cellular services will purchasewireless services of all types.
BellSouth does not believe that this implies acannibalization of cellular business. In alllikelihood, cellular carriers will be sellingmany of these Personal CommunicationsServices using existing or digitally evolvedcellular systems.
3.2 Usage Satisfaction
The second phase of the trial was simulatedon the BellSouth Mobility cellular system inOrlando, Florida using modified MotorolaMicroTACs.n4. Seven hundred and fifty userswere provided with free phones for ninemonths and billed monthly for one of threelevels of Personal Communication Services.Sales were promoted through a publicitycampaign and handled by a direct sales force.Service was priced according to level of PCS
service and all were less expensive thancellular. Two price plans were offered foreach service; a standard rate and a packageservice which included a base rate and 120minutes of use.
Drive Around PCS offered fully mobilecellular-type service without roaming andwas priced 15% below cellular. Walk AroundPCS, two-way calling with no hand-off, was30% less than cellular and Out Bound PCS, one-way calling with no hand-off, was 50% lessthan cellular. The Drive Around PCS sold outfirst, but all services were sold out ahead ofschedule.
One result realized from this phase of the trialis that wireless customers may be willing tobuy a service with less features than regularcellular but only at a significant discount tocellular. At prices close to cellular, customerswant fully featured cellular service withhand-off and roaming. Other issues ofconcern to customers are transmissionquality, ubiquitous coverage areas and longerphone battery life.
Another significant result of the trial and thepreceeding market research was an indicationthat PCS equipment must be in the $200-$300range for the service to be appealing to alarge market.
This trial ended on September 16, 1992 and,interestingly, most of the trial participantsopted to keep their phone and convert tocellular services.
4. Intelligence and Interconnection
In the future, our ability to interconnect thevarious new technologies and services beingdiscussed and use of the intelligent networkto enrich these services will be key toproviding the user with the cal! managementfeatures necessary to true 24-hour follow-you-anywhere communications.
As wireless communications continue to growand small portable devices become trueconsumer items, users will have more andmore need to manage their calls. Businesspeople will want to limit personal calls duringthe day and office calls on weekends. Andmost users will want to divert all of their calls
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to voice-mailboxes at some time. These sortsof management needs call for a great deal ofnetwork intelligence. At BellSouth we areexploring ways to bring Advanced IntelligentNetwork capabilities into our wirelesssystems.
In the U.S. this will probably mean connectionto the wired intelligent network but incountries where the infrastructure is lessdeveloped, it may be more effective tointegrate the necessary intelligence directlyinto the wireless networks.
Personal Number is one of the most discussedintelligent network features. This serviceallows a caller to dial one number and berouted to the proper phone home, office,car or portable depending on the time ofday. It also allows the caller to connect to afax machine if desired, and the systemdefaults to voice mail. BellSouth is currentlytrialing a Personal Number Serviceconstructing on the AT&T Service Circuit Nodeand connected to the cellular MTSO.
Intelligence and interconnection of wired andwireline and also multiple wirelessnetworks is at the heart of what the customeris expecting from personal communications inthe future.
5. Other Applications for Wireless
In addition to providing personalcommunications types of services, the futureof wireless communications also includesproviding wireless solutions in traditionallywired communications situations. An excellentexample is wireless alternate access solutions.
For example, a PBX within a building can beconnected to a large directional antenna onthe top of the building. That antenna isserved by a local cellsite which sends signalsdirectly to interexchange carriers or to thePSTN. Again, digital conversion can providethe necessary capacity increases to use theexisting cellular spectrum in many countriesin this fashion.
6. Mobile Data
It is impossible to leave any discussion offuture wireless communications withoutmentioning mobile data. Mobile Data isemerging as the next growth area of therapidly expanding wireless communicationsindustry. In fact, wireless data networks arewhere cellular was eight years ago poisedfor dramatic growth.
A critical element in the growth of mobiledata is the evolution of an open architecture,shared pubic mobile data network. This kindof network is a vast improvement overprivate mobile data networks because itlowers costs since they are shared by a largepublic user base, provides greater flexibilitysince an open architecture allows unlimitedterminal equipment choices, and moves theneed for spectrum coordination, networkmanagement and maintenance from the end-user to the network operator.
Public mobile data networks based on theMobitexTm technology are already being builtin the United States, the United Kingdom, theNetherlands, Finland, and Norway andsimilar networks are under consideration inmost of the rest of western Europe, parts ofLatin America and Australia.
In the future, the lines between wireless dataand voice will become much less pronounced
and may ultimately disappear. Customersare interested in communications solutions,and wireless carriers will integrate thetechnologies and networks necessary toprovide those solutions.
6. Conclusion
Though technological innovation is importantto the evolution of wireless systems.Customer needs should be the driver in thedevelopment of wireless systems and servicesfor the future. Technology will, in the end,evolve to meet these needs.
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Market research shows that future wirelesscustomers will want more varied, moreintelligent, and lower cost wireless services.Through capacity enhancing technolgies suchas digital conversion and microcells, andintegration of wireless networks with eachother, the intelligent network, and mobiledata systems many existing wireless carrierswill be able to evolve to meet these needs.
Digital Cellular Opportunities in the Pacific Region
Gary Cannalte, Senior Technical ConsultantMotorola
Arlington Heights, USA
ABSTRACT
Analog has become "the A word". Many technologists don't even use the word in mixedtechnical company anymore. "Digital" is the "darling" of the technical and even commercialcommunities these days. Let's see if these statements are deserved, and what "digital" could
mean to wireless cellular telephony.
It should first be established that virtually all signallingdone on existing analog cellular systems is actually digital.So bits and bauds, frames and fields, sync and lock, errorcorrection and codes, etc., are nothing new to cellular.Therefore, when we speak of analog and digital, we aredescribing the nature of only the speech or end usergenerated information signals that the system is carryingbetween the end users.
When most of us think of "digital", at least for telephony,we are thinking of the Pulse Code Modulation (PCM) thathas served telephony for many years. While there aredifferent versions of PCM, most employ a 64 Kbit rate todigitize analog signals in the voice frequency spectrum of300 to about 3000 Hz. We quickly realize that if we are toachieve as many "channels per Megahertz" of cellularspectrum available as possible, such PCM would be a verypoor choice for the analog to digital (A to D) process. Itsimply requires a wideband channel for such a high bitrate, which is exactly the opposite of the narrow channels(real or "effectively"), that the next generation of cellular islooking for.
This requirement points us in the direction of newer, moresophisticated A to D processes, operating at much lowerbit rates. PCM can be considered a "brute force" process,having virtually no "intelligence". New technologyprocesses operate at much lower bit rates and are properlycalled Voice Coders, or vocoders for short. While theyprovide the A to D function, they are specifically designedto operate with analog voice signals as an input and output,which is why they are called y_ocoders. Presenttechnology vocoders (there are several types), operate inabout the 8 to 13 Kbit range. Obviously, if they are tosound reasonably as good as "standard" 64 Kbit PCM,each vocoder "bit" must carry much more information thana PCM bit. T}:;s means that an incorrectly recoveredvocoder bit will have a much larger adverse effect on theaudio quality. To minimize this effect, it is commonpractice to employ "Error Correction Bits" in the vocoderprocess. The number of these bits generally approachesthe actual vocoder bit rate.
A ramification of needing the Error Correction Bits is thatthey represent "overhead". That means they take time tosend and receive, yet they are not the actual "carrier" of thedigitized voice. The time that they take up represents"throughput delay", meaning that the recovered analogspeech at the receiving end of the system has been delayedin time. Typical delay times for present vocoders is about0.1 second. The significance of a delay that long is that"echo" signals, returning from the far end in a full duplexsystem (signals can pass in both directions at the same
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time), will be very annoying to the person speaking. Forthis reason, echo canceling circuits must be employed onall "talk circuits" employed letween the Mobile TelephoneSwitching Office (MTSO), and the Public SwitchedTelephone Network (PSTN). This requirement is likely toremain, far into the future, and perhaps forever.Therefore, the complexity and cost of echo cancelingshould always be factored into digital cellular.
There is one more issue on vocoders that should be noted.They are constantly being worked on to "improve" them.Improvements are primarily in the areas of better fidelity toapproach analog, lower bit rates to permit more users perMegahertz, versatility to digitize signals other than voice,and more "robustness" to reduce errors. The significanceof this ongoing effort is that there will likely be "severalgenerations of digital" over the next decade or so. Thiswill cause the need for "mixed systems", to operate withend user terminals using different technology, dependingon when they were purchased. So the industry willexperience transitions, much like the initial "analog todigital" transition, going forward in time.
That ends the general digital "tutorial". The two mainreasons for the transition to digital are the greatly increasedcapacity it promises over analog (eventually a 10 timesincrease), and the capability to eventually permit "data" tobe passed between end users. So if we say that theseexist, by some means and to some extent, then we candiscuss the opportunities that they could bring to thePacific and perhaps other regions.
To at least a certain extent, when we think of "wireless",we really have "moveable", or at least the capability to usethe device anywhere we want to, in mind. Classicexamples of this would be commercial radio or televisionsets for application in our place of residence. We wouldlike to simply "plug it in", anywhere, and have it work.The word "portable", in this context, means that I couldmove the TV from the living room to the bedroom and itwould still operate well. I simply need a source ofoperating power wherever I place the set. The signals thatI want to hear and see are brought to me by a wirelessmedium, providing me with "placement" flexibility for mydevice. I don't have to wait for someone to come and"connect me" to some central distribution point. These areimportant aspects of "wireless" that we tend to forgetabout. Until, that is, the capability is taken away. Askanyone who is currently "waiting for cable TV" in theirarea because wireless reception is either poor ornonexistent. Many people would not even consider livingin a residence in such an area.
It is time to think of telephony in the same terms. Rightnow, telephony has "wired and wireless" end users. Mostusers are wired, both at home and where they work. Asmall percentage (usually less than 5% in a given area), arenot only wired at home and work, but also wireless atvirtually all points between, while they are in transit. Theoperative phrase here is "in transit". We have a mental(and advertising) image of wireless telephony end usersdriving or walking around, conducting business, or at leaststaying "in communication with the world", while they aremoving. There is nothing wrong with this image. In fact,it has been the desired one. You use your wired phonewhen you are near it and your wireless one when you arenot. The problem is, not everyone, or even physical placehas a wired phone.
Every non-wireless connectivity technology requires someform of conducting "medium" between its end users andits distribution point(s). Traditionally this medium hasbeen a pair of copper wires, run point-to -point (but rarely"as the crow flies"), between the end points. This worksvery well, as long as the end points are not too far apart.The copper wires are even used to bring operating powerto the end user's phone, which is a real "plus" duringcommercial power outages since the phone still can work.The "problem" is the copper wire itself. It can be the lastpart of the system to be provided and is typically the firstpart of it to fail. It is fragile, whether run underground oroverhead. Its "natural enemies" are both man (accidentaldamage), and nature with its destructive forces and justplain "wear and tear". And, of course as the number ofusers per unit of area becomes more and more sparse, wirebecomes less and less cost effective. Fibre optics are notvery effective for "line per subscriber" applicationstypically done with wire. They require "carriers andmodulation", much the same as radio, while still needing apoint-to-point physical connecting medium, which doesnot bring operating power to the end user instrument.Therefore, fibre optics are generally not considered to be areasonable alternative to wire.
Non-wireless connectivity is virtually always timeconsuming. It can take months and even years to "wire"phones, even after the decision has been made to do so.Such delays are not always limited strictly to rural areas.Dense urban areas have been shown to take long times aswell. Some of the large Eastern European cities that havejust recently been "opened" to the world, exposing anamazing lack of telephone lines and telecommunicationscircuits are examples of the glacial time periods needed towire them. Some of them talk in terms of "the nextcentury" before everyone who wants just basic phoneservice can have it.
Finally, there is the inevitable need for "temporary"telephone service. There never seems to be a shortage ofnatural disasters and/or "special events" that take place inan area that normally does not require phone service, orworse yet has hac-I phone service, and is now suddenlywithout it. Recent (1992) disasters in Hawaii and Floridaare classic examples of areas that have been hurt badly bylack of basic telephony that has still not been completelyrestored. The PSTN was not devastated by these events.It was the line per subscriber connections that weredestroyed and will require brutally long times to restore.In such cases, a "rapid deployment" telephone system,which may be made operational very quickly, and thentaken out and moved to the next "requir inent", or left toserve a new unpredicted market, is highly desirable.
Therefore, needs seem to exist for temporary and evenpermanent wireless telephony that can be rapidly and costeffectively employed. The problems have been lack ofcapacity and the need for a separate switching center forthe cellular wireless technology of "today'. But we mustconsider our application. For the most part, we are nottrying to serve moving subscribers. That eliminates theneed for "handoffs" (the need to switch calls in progressfrom one cell coverage area to another), which is one ofthe primary reasons for needing a special, dedicatedcellular switching center. The users are essentially "fixed"in location, at least down to a particular home or buildingarea. New digital, and yes even (gasp), analog techniquesare providing cellular systems with capacity capabilityincreases of from 300 to 1000%. So if a completelystandard existing PSTN switch could "run" the system,complete with billing, we would have virtually every"building block" needed to put a system together. Theonly thing we could probably never have is "a radiochannel per subscriber". However, a PSTN end officeswitch operates on a "line per subscriber" basis. Thiscreates a fundamental difference which must be addressed.This difference is resolved by employment of acommercially available device called a Digital LoopConcentrator, or DLC. The DLC takes standard line persubscriber analog loop circuits from a PSTN switch, andconverts them to standard 24 channel 1.544 Mbps or 30channel 2.048 Mbps digital PCM span line formats. In theprocess, it can concentrate a large number of loops intofewer span lines than would normally be needed. Sowhile any loop connected to the DLC can be sent over thespan, not all can be handled at the same time. Theconcentration ratio determines what percentage can be usedat the same time. At the other end of the span line(s), astandard channel bank will return the digital PCM to theanalog domain.
By now, it should be somewhat obvious that we areattempting to create a type of cell site, to serve "fixedlocation" users. We would want as high a capacity aspossible because we are targeting the traditional fixedlocation end user rather than the typical cellular systemmobile user. There are usually more fixed location usersthan "mobiles, and they tend to have different usagehabits, namely more calls, of longer duration. We wouldwant the cell site radios and the heart of the end userstelephone to be standard, high volume, low cost, cellularequipment of some type. Cellular wireless end userphones are lower in cost than any other form of wirelessphones. Call delivery to the end users will be via thePSTN end office. It will place ringing voltage/signal onthe dedicated subscriber loop. We will need a relativelysimple computer and data base to detect that signal andconvert it into a command for the cell site to page that uniton the cell's control channel. We would use a differentcontrol channel frequency from a mobile cellular system,so only our fixed units would monitor it and "hear" thesepages. This technique also keeps true mobile units from"locking" to our fixed system control channel andattempting to enter this system which cannot support them.(We have no data base for the mobile system, nor adedicated switch for it). For call originations from ourfixed users, the system simply activates the dedicatedsubscriber line for that number by completing the loopcircuit and causing loop current to flow, just as a standardwired phone does. Our computer and data base wouldthen deliver the dialed digits from the originating end user.The end office would perform billing on this based on thenumber called and duration of the call etc. The procedure
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is exactly the same as for wired phones into this office.Indeed, this office cannot tell which phones it services arephysically wired to it and which are wireless. That is thewhole idea.
The bottom line here is a "marriage between the wired andwireless technologies of today and tomorrow, having eachdo what it does best. A typical wired loop to a home israrely used more than 5% of the time. A business phonemight be used as heavily as 10% of the time. The rest ofthe time, the wired loop just lays there, vulnerable andcorroding. The old "party line" (several users time sharinga single loop) was/is a poor solution since a single circuitcannot provide any trunldng efficiency. When any usercan use any channel, and the number of channels can bemade large (over 100), efficiency is raised tremendously,making blocking quite low for even a large number ofusers per channel (at least 10 and perhaps as high as 20).Existing analog cellular techniques can provide at least ahundred channels per cell and the promised digitaltechniques will permit even much higher numbers ofchannels. The cost of a cell site, much like that of anyfixed telephony "plant" is reduced dramatically when acommon location and its associated common equipment areshared by more and more individual circuits, of any type.
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The concept is relatively simple. It's a PSTN switchconnected directly to a cellular base site, connecting theend users to "the network". It can be deployed veryquickly (probably a month or so), and all the wirelessphones in its domain become operational at the same timeif the area is "preloaded" with subscriber units. Theseunits are cellular in nature, using small power supplies andbatteries for operational power. Short of the network orcell site "going down", there isn't much that can knock thesystem out. It can "precede" wire in "boom" areas. It canbe used "instead" of wires where the population densitymay never justify sparse long lines. It can "replace" wiresafter a disaster, until normal service is restored. Therereally isn't much it can't be used for with respect totelephony. Typical "data" (FAX etc.) passes nicely overanalog cellular channels and the new digital techniques arebeing designed with data in mind.
We should recognize this as a new telephony "tool" that isstarting to be applied already in some countries. The toolcan only get even bigger and better as the digital cellulartechnologies begin coming on line and "maturing" withrespect to size, cost, and performance. "Standard" cellularwill drive those issues, and since the concept is applicableto any cellular technique, the technology chosen can beliterally the one that makes the most sense for a particularcountry or application, "all things considered". That's arather nice position for a "decision maker" to be in.Usually it's just the opposite and they have a gun pointedto their heads.
he 0
CELSAT'S HYBRID PERSONAL COMMUNICATIONS SYSTEM
DAVID D. OTTEN AND ALBERT J. MALL/KCIERODTCELSAT, INC.
GARDENA, CALIFORNIA, U.S.A.
1. ABSTRACT
This paper describes the first hybrid (satellite and ground based) cellular telephonesystem to be proposed to the United States Federal Communications Commission (FCC).Costs are projected to be remarkably low, for example, the satellite cost per phonecall will be less than one cent per minute. The system will cover vast areas andprovide new features including: compressed video, paging, high speed fax, high speeddata, position determination, and improved quality voice-all using the same basictransceiver. Calls can be placed or received anywhere in the United States with asmall, very low power handset using the satellite in remote areas and ground cells incongested areas.
INTRODUCTION
The Hybrid Personal Communications System (HPCS)concept described in this paper offers alow-cost solution to many application and enduser requirements for wireless personal/mobilecommunications which are presently eithergrossly under served, served only at a very highprice, cannot be totally served by one provider,or for which, without this HPCS, stand no chanceof being met.
This system concept is larger and morecomprehensive than any single radio-basedpersonal communications system or service everbefore proposed to the FCC. In terms ofpotential U.S. subscribers, it is larger thanthe current capacity of all the existingcellular systems combined, plus all the proposedMSS/RDSS satellite systems, even if all wereoperated together as one huge domesticspace/ground radio communications network.
SYSTEM FEATURES
Specific features of Celsat's HPCS include thefollowing:
One small, low cost, lightweight, low powermobile telephone provides high-quality digitalvoice using satellite cells, grounds cells, ormicro cells.
Highest speed mobile system:Fax (Group 3 or Group 4)Data (bandwidth on demand up to144X bits/sec)
Compressed video:Picture phoneOther specialized applications
Accurate, real time position determination
Privacy
Lowest RF Power - 0.1 watt (average) for a voicecall
Broadcast capability - U.S. or regionalMusic, news, information, compressedvideo, paging
The system example given in this paper assumesoperation over the United States utilizing thefrequency bands of 1610 to 1626.5 MHz and 2483.5to 2500 MHz. More generally, the performanceparameters and features can be achieved withsuitable bands carefully selected in the rangeof 1 to 3 GHz and over typically vastterritories anywhere in the world.
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Celsat's technology allows a dramaticbreakthrough in PCS (or FPLMTS) economics. Thesatellite provides very high capacity coverageof "thin routes" (rural and remote areas) at thelowest cost possible, thus giving all U.S.citizens access to PCS. Celsat's hybrid systemallows a unique trade-off between ground andspace capacity unavailable in other systems.Since the satellite provides universal roaming,this trade-off permits the lowest costdeployment of the ground system. Specifically,because of poorer propagation in the 2.0 GHzband, PCS systems will typically require morecells than conventional cellular at 900 MHz.However, Celsat's HPCS requires ground cellsonly to meet demand and not to provide forremote coverage. This results in not only thelowest cost, but also superior coverage andseamless roaming.
Celsat's HPCS will also achieve a new standardof spectral utilization and efficiency -- over56,000 voice circuits serving the U.S. in thefirst generation space subsystem alone. Thisspace-only capacity exceeds competing systems byan order of magnitude. In addition, and in thesame spectral allocation, a massive groundnetwork (in excess of 1,000,000 voice circuits)can be built.
EACIGROUND
The continuing and seemingly insatiable demandfor conventional cellular services, alone, isindisputable -- the need for more and improvedpersonal, portable and mobile cellular servicesis also growing, with no end in sight in manymarkets. As the many applications for mixed-useand even single purpose voice, data, andposition determination services unanimouslyattest, there exists a similarly undisputed,demand for such basic services in certainapplications for which satellite technologyoffers the only satisfactory solution.
As for the shortcomings, each planned orexisting wireless personal/mobile system and/ortechnology has one or another majordisadvantage. For example, both the proposedmixed-use MSS /RDSC mobile satellite systems andexisting ground cellular telephone systems fallfar short of the capacity needed to satisfy evenexisting demand, let alone the more contemporaryrequirements anticipated for later this decadeand on into the early 21st century. Currentwireless transmission and/or multiplexingschemes either permit only packet-type datatransfer, or otherwise lack the continuitynecessary for high speed transactions. None ofthe emerging ground-based technolcgies offersubiquitous coverage; conventional analogcellular cannot offer privacy; satellite-basedpaging cannot offer voice communications or
1
significant other information delivery; neithercellular nor PCN offers position determination;initial PCN systems and cellular subscriberscannot automatically receive communicationswhile outside their home system area; both MSSand ground cellular systems are expensive touse; neither today's conventional cellular norMSS can reliably transmit asynchronous data ordata at bit rates above 9600 bps; and groundcellular suffers from frequently dropped andblocked calls, and noise interference. Theseare among the most significant limitations --all of which can be removed with HPCS.
Finally, while spread spectrum code divisionmultiple access (SS CDMA or "CDMA) technologywould bring substantial relief to cellular'sprivacy, noise, dropout and capacity problems,the cellular industry has yet to recover itsinvestment in analog systems and therefore willprobably change only in areas of saturation.There is still a significant probability thatthe industry ultimately will split its systemconversions between TDMA, CDMA and yet otheralternatives including NAMPS. As a result, atworst, CDMA might be passed over as the cellulartechnology of choice; at beet, it will beadopted in only a fracticn of the nation'scellular systems resulting in either a highdegree of incompatibility or the need forexpensive dual mode transceivers.
Several of the proposed mobile satellite serviceapplications, on the other hand, plan to useCDMA, but their respective system designs lacksufficient capacity to achieve maximum costeffectiveness in terms of their abilitypotentially to reduce the coat of handsets andsupporting infrastructure components. Whiledeployment of CDMA in PCN networks couldpossibly ensure a role for CDMA technology, thecapital intensiveness required to achievesatisfactory coverage in stand-alone PCN systemsleaves its economic viability yet to be proven.
Together, these trends and developmentssubstantiate Celsat's position that many presentand near future personal/mobile services andmarket applications -- many of which, either forlack of coverage, capacity, or functionality,cannot be served at all by existing or proposedalternative systems -- could be served veryefficiently by one super high capacity, hybridspace/ground CDMA-based digitaltelecommunications network capable of a broadrange of data rates and functions. Celsat hasdesigned such a system.
The system architecture described in subsequentpages is unique and, to Celsat's knowledge, hasnever been previously proposed. Thisconfiguration of high technology elements,results in superior performance, seamlesscommunications, low cost and other functionalcapabilities heretofore not attainable. Otherconfigurations might be feasible, but Celsat hasno knowledge of any that would be as well suitedto a super high capacity HPCS.
Section 1 presents an overview of Celsat'sCelstar HPCS. Section 2 provides a discussionof Celsat's approach to the use of CDMA. Somebasic orbit considerations are given inSection 3.
1. CELSTAR HYBRID CONCEPT OVERVIEW
The Celstar system is designed to set a newstandard of service, cost effectiveness, andspectral efficiency in mobile communications.The system will provide full geographic coverage(voice, data, picture, compressed video andposition location) for mobile users anywherewithin the United States, covering rural as wellas metropolitan areas. Full communicationscoverage without position determination will
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also be available in Hawaii, Alaska, and theVirgin Islands. The concept promisessignificant spectrum management advances interms of maximum spectral utilization efficiencyas well as minimum interference generation andsusceptibility.
The key to the ability to provide this range ofservice and economy is a satellite systemarchitecture which is fully complementary to andintegrated with a new ground-based cellularsystem (see Figure 1). Together they form afully compatible and complementary hybridspace/ground
Figure 1. The Celstar HPCS Architecture
cellular network seamlessly operating in thesame frequency band (see Figure 2). The basicmodulation and multiple access protocol of theCelstar system is designed to fit the emergingstandards of the CDMA ground cellular system,but it will operate in a new frequency band.High density metropolitan areas will thus beserved mostly by Celstar's ground-based cellularnodes, architecturally similar to presentpractice. Rural areas, where ground cellularservice is not economical, will be served in theCelstar system by a network of "super-cells"defined by the ground footprints of a high gain,multi-beam satellite antennas. Eoth utilize thesame basic user handheld "shirt pocket" unit.Making full use of today's state-of-the-art inlarge multi-beam satellite antenna designtechnology, such super cells are ellipses withdimension that vary with the satellite/groundgeometry and with carrier frequency. The axesof such ellipses are typically on the order of200 x 400 miles and the entire U.S. is coveredwith an array of 149 such satellite super-cells.While the system is generally capable ofoperating in the range of 1 to 3 GHz, onespecific frequency band design example is givenhere, to wit:
1.610 GHz to 1.6265 GHz (user transmits)2.4835 GHz to 2.500 GHz (user receives)
remcm.sPACETa
Figure 2. HPCN Grounds-CellsDispersed Throughout Space-Cell
The overall Celstar HPCS consists of thefollowing parts:
User Element
User Antenna
Near omnidirectional
User transceiver
Common, SS CDMA waveform
Commercial voice digital coding/decodingtechnology
Forward error correction coding/decoding
2-way, rx signal-sensing, tx power levelcontrol
Flexible support for other variable ratedata services
Position presentation
Ground Element
Ground nodes (cell-sites)
Spread Spectrum CDMA cellular telephonetechnology transposed to new carrierfrequency bands.
Multilateration position determination
Satellite Element
Satellite
Geosynchronous orbit
State-of-the-art large (20 meter diameter)UHF, multi-beam, imaging antenna
Extraordinary circuit capacity by virtueof high antenna power gain and largefrequency reuse factor
Multiple (16) K-band backhaul links
2-way, signal-sensing tx power levelcontrol
Multilateration position determination
Satellite hubs
Ground entry 'points to the PSTN or othernetwork
Network Control
Maintain log of each subscriber's currentcall(s), address(s), and location
Coordinates optimal allocation between groundand satellite resources
Coordinates transitions between cells,whether satellite ground or mixed.Coordinates ground/satellite resources andrelays radio position determination requests.
A key feature of the design is transparent,effortless transition between ground andsatellite relay resources as a user roams freelybetween areas covered by both ground andsatellite nodes, and areas covered only bysatellite nodes.
The satellite operates at geosynchronous orbit.The mobile link UHF satellite antenna is animaging feed antenna, that is, the feed planestructure is in the image plane of the antennaand comprises an (diffraction limited) image of
the ground coverage area, such as the UnitedStates (see Figure 3). The individual feedelements will consist of either isolated (e.g.,cupped, half-wave or shorter) dipoles or crossedfeeds.
Figure 3. Celstar Satellite
The individual beam footprints of the mobilelink multi-beam imaging antenna define satellitecells on the surface of the coverage area.Within each cell and between cells, allsatellite link users use the same band fortransmitting and a second band for receiving.The antenna pattern is such that this results inan effective total interference level from allusers outside of any given cell of about 1.8times that from the users of the same cellalone.
The satellite to ground hub or "backhaul" linksare frequency multiplexed, with as many as 10satellite to mobile cells served by a singlebackhaul link and ground station. This makespossible a flexible tradeoff between the numberof ground stations to be built and distance andcost of regional landline circuits. Thesatellite backhaul (K-band) antennas havesignificantly wider beams than those serving thecritical UHF mobile links. Therefore, thesatellite backhaul radiation i6 in effect"broadcast" over all the 10 cells comprising a"backhaul cluster". Thuu, with the samebackhaul broadcast one can serve one groundstation or many throughout the service area ofthe "backhaul cluster". The preference willvary from locality to locality, depending onlocal landline economics.
Generally, the multiple (10 or less) cellsserved by a ?angle backhaul link will becontiguous, forming a "backhaul cluster".However, it is also possible, at modest K-bandRF power cost, to provide special metropolitanmultiplexes that serve a number of discontiguousmetropolitan areas. Thus for example, it ispossible to tie New York, Los Angeles, Chicago,Houston, Philadelphia, etc. together on a singlemetropolitan bus (see Figure 4). The primarymobile service for these areas would be from themuch smaller ground cells and nodes.Optionally, however, the Celsat user in LosAngeles could select satellite links (by his/herdialed prefix code) for direct (via satellite)connection to, say, a New York destination,bypassing long distance landline charges. It isenvisioned that only one sLch "metropolitan bus"would be provided.
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Figure 4. Illustrative HPCM Metropolitan Bus
A typical voice signal can be traced inboundfrom a mobile user through the variousprocessing stages to the designated ground hub.
The analog voice waveform is first encoded usinga state-of-the-art voice vector encodingalgorithm. The numerical examples will be basedupon 4.8 kbps CELP encoding which is expected tobe practical in ASIC within several years.Implementation prior to such time could use8 kbps. It is one of the very importantfeatures of SS CDMA, however, that the long-termimpact of such an interim design change isminimal. Whenever improved voice encoderperformance becomes available it can beincorpo.ated compatibly into the SS-CDMAmultiplex, alongside the older standard, withoutsudden obsolescence of the older user units.The more favorable call rate economics may thenbe expected to encourage a gradual obsolescenceor upgrading of the less efficient older units.
The 4800 bps digital voice bit stream isdigitally multiplexed with a 200 bps order wireand control functional data stream. These dataare used for supervisory and power control. Theresulting 5000 bps composite baseband is thenFEC (Forward Error Correction) encoded.
The baseline for the present design calculationsis convolutional, rate 1/3, K=7 encoding, withViterbi 3-bit soft-decision decoding. This canbe implemented in multi-sourced, single chip,off-the-shelf Application Specific IntegratedCircuitry ("ASIC"), which also includes fullduplex interleaver/scrambler/descrambler, errorrate monitoring, and phase and bitsynchronization. Error rate performance is 1 in105 bit errors at Eb/No = 4.0 dB. It isanticipated that this field will also expand inthe next two years, particularly in thedirection of low-rate coding.
The signal is next spread spectrum modulatedaccording to the unique transmit PRN sequenceassigned to the particular subscriber. Takingaccount of time-shift options, the period of thebasic PRN spreading code is long enough thatthere are an effectively unlimited number ofsuch codes so they may be permanently assignedand serve as unique access keys for eachsubscriber mobile unit. In order to takeadvantage of time-shift address coding in thisway, the user must have a fairly accurate timebase. This is accomplished by requiring eachuser initially to synchronize to a pilot timereference broadcast from each ground andsatellite node. With transit time delaycompensation this initial course synch systemwill provide absolute time at the user within
413BEST 1 OY MIME
about 2 msec, independent of user positionwithin any given satellite cell. The PRNsequence will be at a maximum chip frequencyconsistent with the spectral band assignment,typically 1 to 1.3 Mbps in the baseline design.
The individual spread signal is now amplified bya variable gain amplifier to a level calculatedin the power control unit to return a fixedsignal level to the ground hub. Thiscalculation is based upon the observed receivedsignal level as an indicator of the current pathloss. If the path level variations were static,this would result in effectively perfectcompensation. For dynamic variations whichoccur primarily in the vicinity of the mobile,such as going behind a tree or building, thedowncoming path perturbation information isgenerally less than a microsecond (1000 feet)late when it reaches the mobile receiver, andmay be another microsecond late by the time theprecompensated signal reencounters theobstruction on the return path to the hub. Sofor the inbound (mobile-to-hub) path as well asboth paths for the ground cellular, very fast- -almost perfect--path compensation is achieved.For the outbound (hub-to-mobile) satellite pathon the other hand, the sensing signal is 1/4second late by tne time it arrives at the groundhub and another 1/4 second late by the time thepre-compensated signal reencounters theobstruction near the mobile on the outboundpath. Thus, for the outbound path (hub-to-mobile) it is only the slow path variationcomponents, less than about 1 Hz, that areeffectively compensated by this system.
Finally, the spread-spectrum signal is fed tothe omnidirectional mobile antenna and radiatedto the satellite.
The ground hub consists of a number ofindependently assigned and operating lineartransceivers just like that at the mobile. Oneof these is assigned to each active mobile link.The demodulating and deprocessing operationsfollow on a one-to-one inverse basis thecorresponding processing and modulationoperations described for the transceiver.
A summary of the satellite key link parametersis contained in Table 1.
Table 1. Key Link Parameters
Tramp...raw Cearmuration
On -bond ProceartmU.S. Satellite EVG Capacity(Spoor segment erty.)UHF ReflectorUHF GanWO Palen:mienUHF Mena (MedalCell Sae (mg., rtudCONUSICoverage at 10. Min. DevotionTransmitter EMIP per llamaStland down-linkL-eand Narver, sirK-13and Satellite Receiver G/TIC-Bard Rearclora Urtl>riIC-Band PolarartionNo. K-Eland Itsckhaul MarnaOmb Mohan.)
Kitland Frog. Multiplex. UpIC-Sand Fnq. MuMplex, DoanK-Bard EIRP pr Urn. UpIf-eand EIRP per Beam. DownDew rthallt SW to Hubft. Deform et Earth
Fi.41duplex, IC-Band - UHF Sant pork 10. Flirt. DI, Mi.dtiplaon beck/sadNone66,600 61(6ps voice ornate
20 nwte deployed mart.61.2/47.4 08, en onto': 45.2/48.8 46 avg over cad
148 extended U.S. ...ape174 EW it 212 XS hex moot diameterContornuntaa U.S., OA Neste, 11tim. P.R.N.I.
68.8 deW/611.820.2 d6/.1(20.6 d6/.6
1.6/2.0 onAMC
16-2010. 13.876 MU. Chnloillaarn 6 MN, TT&C10 x 12.76 MHz Chnia/Bearn 6 Maly, TT8C44.1 dISW avg.37.6 deW avg.132.6 MHz2.4 GH:1135.0 d8W/rriP/4kHz.1114 Gilt/ 16111.4 elOW/rWribally
The antenna is of a larger size than deployableantennas used commercially to date, but itrepresents no major new technical challenges.Several U.S. manufacturers are capable ofproducing the required antenna to the necessaryspecifications and reliability. The rest of thepayload consists of conventional "bent pipe"transponder technology, albeit there aresubstantially more UHF band transponders thanare typically launched.
In the unlikely event of temporary incapacityeither satellite in space, the other activesatellite will have enough reserve power toserve the entire cONus with nearly 60% of itsnormal system capacity. CONUS capacity, evenunder such extreme circumstances, would onlydrop to about 32,000 voice circuits orequivalent capacity.
2. CELSTAR'S USE OF CDMA
of 3. The lower slirling range makes feasibleRAKE impleme.-ation with existing DSPchips.
Key to several of the advances in the proposedsystem is the use of spread spectrum Code-Division Multiple-Access (CDMA).
In a Frequency Division Multiple Access (FDMA)cellular system, as under the present standard,there is a minimum cluster size, N, required toinsure sufficient geometrical separation betweenco-channel users to avoid unacceptable co-channel interference. This cluster size rangestypically from 7 to 14 or more cells dependingon propagation topography. The significance ofthis from a spectral utilization efficiencystandpoint is that for a given total systemallocation bandwidth, the bandwidth that can beused in any one cell, and therefore the numberof channels that can be accommodated in a cell,is inversely proportional to N. For example,with N=7, only one-seventh of the total systemallocation bandwidth can be utilized in eachcell.
By contrast, in the Celstar CDMA system theactual cluster number is 1; i.e., each cell usesthe full channel bandwidth. Other users in ornear the same cell interfere, but not fatally aswould be the case in a FDMA system. Rather, thetotal received power of all such co-band usersinterferes as random noise, attenuated by thedirectivity of the antenna beam which definesthe super-cells, and by the "processing gain",that is the ratio of total bandwidth to userband-bandwidth.
Multipath is perhaps the number one curse ofconventional mobile radio telephone. Bycontrast, in the Celstar system, the widebandwidth inherent in spread spectrum is used toresolve the various components of multipath, andenable them to be combined constructively, in athree-fold, delay tracking RAKE receiver toprovide a high degree of immunity to fading.This principle has been demonstrated by Qualcommwith great success in the recent series ofground cellular CDMA field trials in San Diego.(See "Next Generation Cellular - Results of theField Trials," CTIA, December 4-5, 1991,Washington, D.C.)
The same RAKE mechanism provides the basis forsoft handover, with enhanced signal performanceat the critical maximum range by utilizing thetwo nearly equal signals from the two (or three)competing transmitters and beams as componentsof a time diversity pair (or triad).
This has also been demonstrated effectively inthe above referenced San Diego CDMA cellularfield trials.
In Celstar the total bandwidth for each link isfirst divided into 1.25 MHz subbands. Eachsutband in each cell is then shared by about 40s,,miltaneous users using Code Division MultipleAccess. This has several important advantages:
1. It is compatible with the emergingstandard for ground cellular COMA.
2. The resolution provided is adequate tosupport an RDSS ranging accuracy objectiveof 300 yards (normal mode) and to resolvethe major components of urban multipath.
4. The frequency subband separation enablesan important degree of flexibility inmanagement of narrow band (1.25 MHz)interference either to or from the Celsatsystem.
COMA affords special advantages with respect toboth generated and tolerated interference.
The syStem design, for both the ground-based andsatellite-based links, is based upon acumulative interference level (noise powerspectral density) at maximum channel loading,about equal to or somewhat less than that ofthermal noise alone. Both up-link or outbound,and down-link or in-bound transmitters arecontinuously power controlled to ensure thateach user link continuously and dynamically usesminimum radiated power consistent with thiscriterion. Thus, the worst case (i.e., undermaximal channel loading) interference to anarrow band user would be less than 3 dBdegradation of absolute sensitivity, which isquite acceptable.
One of the important side benefits of spreadspectrum CDMA is the flexibility that it affordsin terms of baseband services. Frequency ortime division multiplex structures must manage astrategy which becomes quite complex andinefficient when called upon to accommodate adiverse and dynamically changing mix ofdifferent base-bandwidth services. By contrast,in the COMA mix, there are no such constrainingrelations between the baseband services otherthan the total power allocated to all other bandsharing services. This means, for example, thatit is possible to mix services ranging fromminimal data ranges of, say, 75 bps to fast dataor compressed video of up to 144 kilobits persecond. This baseband flexibility will becomeof special importance to the Emergency RadioService, which may be called upon to provide awide range of baseband service ranging from slowphysiological monitoring to pictures andcompressed video.
While the art of voice encoding is itself wellaged, the impact of powerful microprocessorcapabilities and the concept of algorithms suchas vector quantization have triggered asignificant resurgence of research andbreakthrough results in recent years. Highcommunications quality encoding (almost fullintelligibility but with slight noticeableunnaturalness) has been demonstrated as low as2.4 kbps, but with presently unacceptablecomputational complexity. Efforts to simplifythese algorithms and reduce them to ASICs areshowing promising initial results. Although theimmediate next generation of digital cellularradio may utilize existing demonstrated 8 kpbshybrid encoding, we believe that commercial4 kbps voice ASICs will be available within afew years.
The Celstar system COMA approach gracefullyaccommodates such anticipated dynamicimprovements in encoding performance. New,updated user sets, taking advantage of morepowerful encoding algorithms (and either reducedrates or improved fidelity), will operatecompatibly in the same wideband RF channel, withsets built to older obsolescent standards, aswell as other diverse data and picture services.There is no rate compatibility constraint, onlythe overall signal power constraint. This CDMAsystem is designed for grnwth.
Another important benefit of the choice of SSCOMA is that it provides for almost arbitrarilypowerful, low rate Forward Error Correction
414e
r
coding at no cost in terms of lost circuitcapacity. In FDMA or TDMA, the redundancynecessary to implement such coding must be paidfor directly in terms of reduced circuitcapacity. For example, rate 1/2 FEC coding(50% redundancy) reduces the number ofband-limited allocatable TDMA or FOMA voicecircuits by almost 1/2. By contrast, in CDMA,such coding does not reduce the number ofavailable circuits, in fact, to the same extent(several dB) that it improves the systemsensitivity to noise and interference, it alsoimproves the tolerance to in-band interferenceand correspondingly increases the number ofusers that can be accommodated in-band. Inother words, the circuit capacity has beenimproved rather than sacrificed due to FECencoding. In effect, the redundancy necessaryto support FEC is already there in CDMA, and maybe used for FEC at no cost in terms of circuitcapacity.
Under normal circumstances in a two-wayconversation each user is active only 35-40% ofthe time (including both listening periods andpauses between utterances). In a typicallypower limited communication link, thisrepresents a potential gain of 4 to 4.5 dB orincrease of 2.5 to 2.8 times circuit capacity,if advantage can be taken of these gaps. Tocapitalize on this in a FDMA system leads to arather complex and limited, centrallycoordinated dynamic channel reallocation systemsuch as TASI or DSI. With CDMA on the otherhand, there is no problem of channelreassignment--everyone is already using the samechannel. Each channel then needs only VOXcontrol to turn itself off between utterances,independent of all other channels, and the full4 to 4.5 dB power gain is realized. When acircuit is in the "off" mode, means must beprovided to maintain spread spectrum chipsynchronization. However, this is easilyaccomplished at negligible power cost by a lowpower "keep-alive" signal at a level of theorder of 10 dB less than that of the peak "on"signal.
In the Celsat system each user transmits awide-band, code spread signal, in the commonallocated subchannel bandwidth, 1.25 MHz for thenominal baseline system. In order to isolate aparticular user signal and demodulate theinformation on it, the receiver must recreate alocal replica of the pseudo-noise signal usedfor spectrum spreading by that user, and adjustits timing to exactly match that of the incomingsignal. The techniques for doing so are wellknown. Having made this replica timingadjustment, the receiver inherently hasavailable a precise estimate of the time-of-arrival of the signal. In order for the spreaddetection to operate, this time must have aprecision of about 0.3 microseconds or 300 feetof range. Additionally it is planned that theuser clock and code phase would be locked to thereceived pilot signal phase from his controllingnode, thus enabling round trip delay, or rangemeasurement. In conjunction wits receptions ofeach user signal at several ground or satellitenodes which will always be monitoring thesignal, this provides the basis for Celsat'sposition measuring system, capable of positionaccuracy well within 300 yards. This service isavailable at very little added systemcomplexity, at very low cost, and withoutspecial operator requirements.'
'Accommodation can be made for rfe:ial users to brostkast st the full 16 S b1Ht.bandwidth for moth higher position determination ac,uracy
415BEST COPY AVAILABLE
3. ORBITS
Celsat has completed detailed studies andevaluated the tradeoffs between various orbitpossibilities suitable for its hybrid proposal,including LEO, MEO and GEO orbits, and selectedGEO as the clear choice notwithstanding thatseveral other potential mobile satellite serviceproviders have selected both LEO and MEO orbitsfor their respective space-based mobile service(see Table 2).
Table 2
CELSAT OUT-PERFORMSPROPOSED SATELLITE SYSTEMS
PROPOSAL
EQUIVALENTVOICE
CIRCUITS,U.S.
ANNUALCOST PER
EQUIVALENTVOICE
CIRCUIT
ISATELLITEI
FREOUENCYEFFICIENCY
(EQUIVALENTVOICE
CIRCUITS PERMHO
SUBSCR BERUNIT
AVERAGE
POWER
NUMBEROF
SATELLITES
CELSAT 68.000 $840 1903 0.1 WATT 2
LORAL/QUALCOMNA
8.600 48,000 197 1.0 WATT 24
MOTOROLA 4,400 $19000 419 0.4 WATT 66
TRW 4.600 $6,000 139 0.6 WATT 12
ELUPSAT 884 419,000 26 8 WATTS 24
CONSTELLATION 200 $130,000 12 2.0 WATT 48
Celsat's choice of a geostationary orbit yieldsmuch greater overall space capacity at afraction of the cost of LEO or MEO systems. Asummary of the relative merits of GEO vs.LEO /MEO is given below.
060 LEO/M60
I/4 INK how <W1 TYPCay .114 Woe C4.I
No impact on FAX or dotsOcoon't rtot let wound pothon ofC4Orter hybrid network
Poo. et 26C/rnonuto
66,800 U.S. voice circut.
Continuo no, 24+otr per 44Y oiwtNio1with ere satellne 14220641
mets.oes Itgloun 1M., IS -olcophon with Dowd* Ottiata on exc..of GEO dolor(
Prior up to 43/rnicatto
6.600 U.S. toot cocoa. rnawnsurn
Continuo., 244,0., pet day opwohonmotor. 12 to 88 atMlnao 1446014 to42,100141
low paver 10.1 web) ouboonbottmewntttor 0.6 yettm w meto subsa6w ustrommw
EprOn polowblo lenplornonttion
Celsat's specific orbit locations are determinedby the following constraints:
Full visibility of both satellitesanywhere within CONUSGood position determination capabilityanywhere within CONUSAbility to serve P.R./V.I. fromeastern-most satelliteAbility to serve Alaska/Hawaii fromwestern-most satellite
The final orbit locations at 76 W and 116 Wlongitude were selected to provide mutualcoverage of CONUS with good geometry forposition determination while also being able toserve the remote points of Alaska, Hawaii,Puerto Rico and the Virgin Islands.
The estimated operational lifetime is derived inthe normal fashion for geosynchronouscommunications spacecraft. The elements whichordinarily limit life include expenditure ofpropulsion fuel; solar array degradation withtime; and battery life. For Celstar's purposesthese have been sized for 12.5 year spacecraftlife. Its reliability has been calculatedfollowing standard industry practices, and hasbeen calculated to be 0.6 for a 12.5 year life.
7 1
SUMMARY
This paper has presented an overview of Celsat'sCeletar HPCS. A new system is used with codedivision multiple access employing forward errorcorrection coding to enhance the effective gainand selectivity of the system. Multiple beam,high gain antennas are disposed in the satellitenodes to establish the satellite cells, and bycoupling the extra gain obtained with FEC to thehigh gain satellite node antennas, enough gainis created in the satellite part of the systemsuch that a user need only use a small, mobilehandset with a non-directional antenna forcommunications with both ground nodes andsatellite nodes. User position information isalso available. The system provides arelatively massive satellite capacity (56,000equivalent voice circuits) in a modest 33 MHz ofbandwidth. The satellite cost per circuit is anorder of magnitude less than that of any of therecently proposed LEO systems. So low, in fact,that Celsat can be profitable while chargingless than half of current ground-based cellularprices.
Celsat intends to provide a new class of mobilephone service that will allow people to carryportable phones with their individual phonenumbers everywhere they go (shopping, golfcourse, boating, hiking, auto, airplane, etc.)and "stay in touch." Thus, calls can be placedor received anywhere in the U.S. with a small,very low-power handset, using the satellite inremote areas and ground cells in congestedareas. In many ways, the system will resembletoday's cellular system, but with higherquality, lower price, and more features.
Celsat will provide new features for a cellularsystem: video (Picture Phone), nationwidepaging, high-speed fax, high-speed data,position determination, and improved qualityvoice-all using the same basic transceiver.
Further details related to this system can beobtained from the following sources:
U.S. Patent Number 5,072,900 datedDecember 17, 1991
Celsat's Petition For Rulemaking,February 6, 1992 (FCC RM 7927)
Celsat's Request for a Pioneer's Preference,February 10, 1992 (FCC ET File No. PP-28)
Consolidated Reply of Celsat, Inc. toComments and Oppositions, submitted to theFCC April 23, 1992
Celsat Comments to FCC, Gen. Docket No.90-314, ET Docket No. 92-100, 92-9, etc.,November 8, 1992
4167,:e.
INTERNATIONAL DIGITAL TV SERVICE VIA INTELSAT
Edward A. FaineCOMSAT World Systems
Washington, D.C. USA
ABSTRACT
The digital television era is coming. This era will see digital television signals relayed worldwide for news, sports andentertainment, but increasingly for education and business purposes. For the past five years, COMSAT, in conjunctionwith its foreign partners and INTELSAT, has conducted extensive field trials and laboratory simulations resulting in awealth of data for dimensioning networks for the transmission of digital TV via INTELSAT satellites. These tests haveemployed the very latest in digital TV technologies and have encompassed the spectrum of digital bit rates from 6 Mbpsto 140 Mbps. The tests have also included both conventional and high-definition television (HDTV) production stan-dard formats.
INTRODUCTION
The commercialization of digital TV via INTELSAT beganfour years ago when COMSAT and KDD (Kokusai DenshinDenwa Co., Ltd.), the U.S. and Japanese Signatories toINTELSAT, field-tested and commercialized digital HDTVat 120/140 Mbps over an INTELSAT V satellite in thePacific Ocean Region. This early work laid the foundationfor commercial digital HDTV transmissions in 1992 of 60Mbps HDTV over an INTELSAT V satellite in the IndianOcean Region from Albertville, France and Barcelona, Spainto Japan for the Winter and Summer Olympics, respectively.
In early 1992, anticipating the inevitable conversion ofanalog to digital conventional TV0) over the INTELSATsystem, COMSAT Laboratories commenced satellite simula-tion testing of available NTSC-based 45 Mbps and lower rateTV Codecs and Modems to determine the satellite operatingparameters needed by system engineers to dimension theirinternational TV networks on the INTELSAT system.
This paper provides an overview of the international fieldtrials and commercial transmissions of HDTV as well as theresults of simulation testing of digital TV in INTELSATtransponders in the presence and absence of conventionalanalog TV. The paper also addresses the future potential ofboth digital TV and digital I-EDTV using new generations ofINTELSAT satellites, namely INTELSAT K, INTELSATVII and INTELSAT VIII, all of which have higher power toprovide higher quality and to encourage the use of smallerearth stations than those used today for the transmission andreception of international TV and HDTV programming.
HDTV VIA INTELSAT
ANALOG TRANSMISSION
One of the ironies in international telecommunications ofrecent years is that analog and digital HDTV, based on theNHK- developed 1125/60 production standard, was commer-cialized over INTELSAT before the development of digitalconventional TV; that is, conventional TV based on current-day production standards such as 525/60 or 625/50. It all
417
began with MUSE. NHK (Japan Broadcasting Corp.) devel-oped the MUSE system, based on the 1125/60 productionstandard to broadcast HDTV signals via satellites usingfrequency modulation with a carrier bandwidth of 27 MHz.While the MUSE technique employs an analog mode oftransmission it relies on digital processing of the basebandTV signal. Transmission experiments using the MUSEsignal via INTELSAT satellites began in 1987, followed byinternational transmissions from Japan to Australia andKorea to Japan in 1988 (the latter for the Summer Olympics);from Canada to Japan and from Italy to Japan in 1990 (thelatter for World Cup Soccer) (1). All of these transmissionsemployed a double- or triple-hop configuration using anINTELSAT V satellite, a Japanese domestic satellite and(sometimes) another domestic satellite such as AUSSAT orANIK.
In 1989, Scientific-Atlanta developed the HDB-MAC sys-tem, based on the 1125/60 standard, to broadcast HDTVsignals via satellites also using frequency modulation butwith a carrier bandwidth of 36 MHz. Like MUSE, HDB-MAC relies on analog transmission but employs digitalbaseband processing. In 1990, the HDB-MAC system wasused in the first international two-way video conference viaINTELSAT between Hong Kong and the U.S. using a two-hop satellite configuration (1).
DIGITAL TRANSMISSION
In mid-1989, the first international digital HDTV transmis-sion tests were conducted over an INTELSAT V satellitebetween the U.S. and Japan using the DITs 120/140 MbpsCodec. KDD and Canon developed the DITs Codcc, alsobased on the 1125/60 production standard, to broadcastHDTV signals via satellite using digital modulation and acarrier bandwidth of some 60 MHz, thereby requiring a 72-MHz INTELSAT satellite transponder (2). The DITs HDTVCodec takes a full - baseband HDTV signal and compressesthe signal by a factor of roughly five down to 140 Mbps or120 Mbps. The output rate is selectable by switch. Thehigher rate, 140 Mbps, is a standard rate in the internationaldigital hierarchy, and 120 Mbps is the standard rate in theINTELSAT TDMA system.
In addition to the DITs Codec, the other key digital technologyused in the transmission tests was the 140 Mbps Coded OctalPhase Shift Keying (COPSK) Modem developed by COMSATLaboratories. (This Modem was, in fact, the prototype for unitsnow being used for satellite restoration of undersea fiber opticcables). A 120 Mbps Modem was also used in the tests. ThisModem employed QPSK or Quadrature Phase Shift Keying,the now-common digital modulation technique used in mosttelecommunication satellite systems.
During the field-trial, HDTV transmission tests were con-ducted in all possible satellite configurations or connectivitics,including C-C band and Ku-Ku band loopback tests at both 120and 140 Mbps using a C-band Standard A (30 meter) earthstation in the U.S. and 5.5, 3.3 and 2.6 meter Ku-band earthstations in Japan.
Prior to transmission testing, the threshold Bit Error Rate(BER) of the DITs Codec had been determined in the labora-tory. It was found that the threshold BER at which theinfluence of transmission errors can be ignored is 1x10.Moreover, Intermediate Frequency (IF) loopback tests in thelaboratory indicated a Carrier-to-Noise Ratio (CNR) of 12.5dB would be needed to obtain a BER of 1x10-4. The IFloopback tests included everything but the satellite link. Theobjective of the field trial was to determine for each configu-ration tested, the CNR required to produce the necessaryBER of 1x10-4. With this information in hand, systemsengineers could then dimension a transmission systemdetermine earth station sizes for commercial delivery ofDITs HDTV via satellite.
The field tri il indicated that with the satellite link inserted, aCNR degradation of about 1 dB resulted, with slight varia-tions between the various configurations tested. It wasconcluded that the CNR required to obtain the thresholdBER of 1x10-4 was 13.5 dB for 140 COPSK DITs transmis-sion and 13.0 dB for 120 Mbps QPSK DITs transmission.
With the above information, appropriate transmission con-figurations for DITs HDTV exchange between the U.S. andJapan were determined using an INTELSAT V, a 13.0 dBCNR for a threshold BER of 1x104, 2 dB downlink marginand INTELSAT standard Ku-band earth stations, viz: Stan-dard E3 (8 meter), E2 (5.5 meter) and El (3.5 meter). It wasthen concluded that it would be possible to exchange DITsHDTV via LNITELSAT using small transportable earthstations in the El to E3 class (3.5 - 8 meters in diameter) andachieve a 99% or greater availability.
Further, for El (3.5 meter) receive stations, it proved to bedesirable for the uplinking station to be an E3 (8 meter), orlarger station. For E2 (5.5 meter) receive stations, uplinkingstations of E2 (5.5 meter) or larger proved desirable.
After the field trial in October, 1989, the first commercialDITs 120 Mbps HDTV transmission occurred between Japanand the U.S. over an INTELSAT V satellite delivering HDprogramming to the Society of Motion Pictures and Televi-
418
sion Engineers Conference in Los Angeles. The receivingstation outside the conference hall was an E2 (5.5 meter).
As a result of the DITs field trial and technological advance-ments in the laboratory, NHK developed an improved Codecknown as 60 Mbps Digital MUSE, again based on the 1125/60 production standard with a carrier bandwidth of 31 MHz.The Digital MUSE bandwidth of 31 MHz provides a morecost-effective match to INTELSAT capacity, while the bitrate of 60 Mbps was selected to deliver a high-quality HDsignal via INTELSAT to Japan for redistribution over Japa-nese domestic satellites.
Digital MUSE was first used over an INTELSAT V in theIndian Ocean Region in February, 1992 to deliver HDprogramming from the Winter Olympics in Albertville,France to Japan using a 3.7 meter Ku-band uplink earthstation in France and a 34 meter Standard A receive earthstation in Japan. HID coverage of the 1992 Summer Olym-pics in Barcelona, Spain followed, the only difference beingthe use of a 7-meter Ku-band uplink earth station.
DIGITAL TV VIA INTELSAT
SIMULATION TESTING
Conventional analog TV transmission which is based oneither the NTSC 525/60 or PAL 625/50 production standardsis expected to be converted to digital TV in the near futuredue to the increasing use of digital TV production techniquesalong with advances in video compression and the availabil-ity of reasonably priced Codec and Modem equipment.Within the studio, the use of digital component and compos-ite video is common. The high bit rates involved (in excessof 80 Mbps for D-2 composite video) have deterred the useof these formats for transmission outside the studio. Sophis-ticated video compression Codecs can reduce the bit rate to20-45 Mbps with minimal loss in perceived TV signalquality, and well below 20 Mbps with perceivable butacceptable loss in TV signal quality.
For TV transmission, a common scenario in the INTELSATnetwork is to have two FM/TV signals occupying a 72 MHztransponder with each FM/TV signal occupying a bandwidthof 30 MHz. In order to reduce the effects of the TWTA non-linearity on the TV signals and to reduce intermodulat ion,the transponder output is backed off by some 2 dB. Astelevision transmission gradually evolves from all analog toall digital, it is likely that the case will arise where one of thetwo signals is a 45 Mbps digital TV signal and the other is a30 MHz analog FM/TV signal. It is therefore important tostudy the issues relating to the co-existence of analog anddigital TV in a single transponder. To this end, COMSATLaboratories undertook INTELSAT satellite simulatortesting in late 1991. The testing was performed on twodifferent 45 Mbps video Codecs using two different 45 MhpsQPSK Modems (3).
The first order of business was to determine 45 M5i., ..:
TV performance in thermal noise and with adjacent and
co-channel analog TV interference in a simulated satelliteenvironment. The results could then be used by systemengineers to obtain accurate link budgets and system marginsfor dimensioning networks for the transmission of 45 Mbpsdigital TV over INTELSAT. It was found that the thresholdCNR (in a carrier bandwidth of 30 MHz) was 11.0 dB forone Codcc and 11.5 dB for the other when operating nearTWTA saturation (the normal operating point for two carrieroperation) using QPSK modulation with rate 7/8 convolutioncoding. The threshold CNR for both Codecs correspondedto a BER of approximately 1x10-4. Interestingly, the testsfound that operation near TWTA saturation caused anincrease of 0.5 dB in the threshold CNR for both Codecs.Moreover, the tests revealed that both co-channel and adja-cent channel interference impacted the threshold CNR forboth Codecs some 8 dB less than typical figures for analogFM/TV transmission, providing further evidence of therobustness of digital TV transmission.
To illustrate the reduction in earth station size that can beobtained by 45 Mbps digital TV transmission, consider firsta 30 MHz FM/TV link in a single 72- or 36-MHz transpon-der on an INTELSAT V satellite. Such a link requires a newStandard A (18 meter) receive earth station to achieve a 15dB CNR to yield a signal-to-noise ratio of 52 dB, which is thegenerally accepted value for international broadcast quality.
Alternatively, in digital video transmission, if the link canprovide a CNR above threshold then the displayed picture isvirtually noise free. For the 45 Mbps Codecs tested, thethreshold CNR was about 11 dB. All other parametersremaining the same, the downlink for 45 Mbps digital TVcan be replaced with a Standard B (11 meter) earth station.This results in a receive CNR of 12 dB providing a noise freeTV picture with a 1 dB margin even though the ForwardError Correction (FEC) of the tested 45 Mbps Codecs wasnot optimized for satellite transmission. A more appropriatechannel coding scheme. a multiple error correcting blockcode or a concatenated Reed Solomon/Convolution codelikely would yield a threshold CNR < 9 dB for the same 45Mbps Codecs. This would permit the use of a Standard F-3(9 meter) receive earth station for the same link. In sum,switching from analog FM/TV to optimized 45 Mbps digitalTV could reduce receive earth station size from 18 meters to9 meters quite a savings indeed!
In mid-1992, second phase testing began with emphasis onmeasuring the interference from 45 Mbps digital TV intoanalog TV at various levels of transponder saturation (4).The test results showed that the interference from a 45 Mbpsdigital TV signal is more severe than from an analog FM/TVsignal. The interference from the 45 Mbps digital TV carriermanifests itself as a decrease in the signal-to-noise ratio andan increase in FM threshold in the adjacent FM/TV carrier.The interference also increases the closer the TWTA oper-ates to saturation. It was also found that operating the 45Mbps digital TV channel at a 2 dB lower power level thanthe adjacent analog FM/TV could reduce these interferenceeffects.
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In order to confirm the results of the hardware simulation,software simulation was also performed. This simulationconfirmed that a 45 Mbps digital TV carrier created higherpower intermodulation products than an analog FM/TVcarrier, and that these intermodulation products decrease inpower as the 45 Mbps digital carrier power level was re-duced. It should be emphasized that operating the 45 Mbpsdigital TV carrier at a lower power level is a viable optionbecause of the 45 Mbps digital TV advantages discussedabove that enable operation at CNRs that are much lowerthan the analog FM/TV threshold CNR.
To complete the simulation testing, COMSAT Laboratoriesalso evaluated low-rate digital TV on the INTELSAT satel-lite simulator and found that the threshold CNR for com-pressed 6.6 Mbps digital TV was 8.0 dB (in a carrier band-width of 5 MHz), when operated at a TWTA backoff levelappropriate for multicarricr operation.
COMMERCIAL TRANSMISSIONS
While thousands of 45 Mbps digital Codecs are now in use interrestrial systems worldwide, carrying voice, data and TV, no45 Mbps digital TV has yet been transmitted over INTELSAT.Moreover, time division multiplex (TDM) equipment whichcompress several video channels, usually 2, 3 or 4 into 45 Mbpsarc also now available from several manufacturers. Thistechnology also has yet to be used over INTELSAT, butindications are that 45 Mbps digital TV, with or without TDMcompressed video, will be used on INTELSAT before 1994.One significant step, the first use of compressed 6.6 Mbpsdigital TV on INTELSAT, is now being planned for early 1993between Hong Kong and the U.S.
FUTURE POTENTIAL OF DIGITAL TV VIAINTELSAT
In the next several years, INTELSAT will be replacing itscurrent fleet of INTELSAT V satellites with new generationINTELSAT VII and INTELSAT VIII satellites. Thesesatellites have higher e.i.r.p. than the curreni INTELSAT Vsatellites. At C-band, the INTELSAT VII and NTELSATVIII have 33 dBW and 36 dBW e.i.r.p. at beam-edge, 4 dBand 7 dB higher than the INTELSAT V satellite, while atKu-band they have 47 dBW e.i.r.p. at beam-edge, some 5 dBhigher e.i.r.p. in the East Spot beam, with about the samee.i.r.p. in the West Spot beam as the INTELSAT V satellite.The increase in e.i.r.p. can be used to cater to the use ofsmaller-size antennas and/or to improve picture quality. Themost dramatic reduction in antenna size for future digital TVtransmission is expected to occur at C-band.
It should be possible, for example, to receive high quality 60Mbps Digital MUSE and 45 Mbps digital TV via anINTELSAT VII or INTELSAT VIII satellite at C -hand with6-9 meter earth station antennas rather than the 18 meterearth station antennas used today. Moreover, ten high qualitycompressed 6.6 Mbps digital TV carriers could be accommo-dated in either the Ku- or C-band 72 MHz transponders on
the INTELSAT VII or INTELSAT VIII, and received byearth station antenna sizes of 6-9 meters at C-band and 3-4.5meters at Ku-band and achieve outstanding availability.The most exciting capability already available is theINTELSAT K satellite now operating in the Atlantic basin.This Ku-band satellite with broadcast satellite parameters, 50dBW peak e.i.r.p. and 54 MHz transponders, offers excitingpossibilities for international digital TV delivery. For ex-ample, high availability 45 Mbps Digital TV could be ob-tained with antenna sizes as small as 2.4 meters.
CONCLUSION
HDTV via INTELSAT is a commercial reality, while digitalTV is on the threshold of commercial reality. Two differentdigital HDTV systems have been employed in commercialend-to-end settings delivering a wide range of HDTVprogramming in a variety of earth station configurationsinvol"ing two- and three-hop satellite links. The first use ofcompressed digital conventional TV on INTELSAT isscheduled for early 1993. Moreover, as the INTELSATsystem is replenished with new generation INTELSAT VIIand VIII satellites in the next several years, improvementsare anticipated in the delivery of international digital TV orHDTV through the use of smaller-size antennas coupled withattainment of better picture quality.
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Footnotes
(') Based on conventional, current day production standardformats such as NTSC.
References
1. International HDTV Service Via INTELSAT, Edward A.Faille and William R. Schnicke, HDTV Proceedings for1991, National Association of Broadcasters, Las Vegas,Nevada, April 15-18, 1991.
2. First International HDTV Digital Transmission ViaINTELSAT, Edward A. Faille, et.al, Proceedings of thePacific Telecommunications Council, 12th AnnualConference, pgs. 53-61, January 14-17, 1990.
3. A. Rao and S. Hower, "Testing of 45 Mbps digital videocodecs," COMSAT Laboratories Technical Note, Janu-ary 1992, COMSAT Data Catalog No. 92-DC-009.
4. A. Rao and S. Hower, "Mixed Analog,/ Digital TV trans-mission testing," COMSAT Laboratories Technical Note,May 1992. COMSAT Data Catalog No. 92-DC-076.
Emerging Technologies and Future Satellites
Br Linda AL RankinVice-President. Business Development
Telesat Canada
Co Author: Abdul H. LakhniNetwork Planning Specialist
Fundamental PlanningTelesat Canada
L Abstract
In the past 20 years the world has seen many changes in the way organizations conduct theireveryday business operations. The need for communications has increased in importance
with the shift from an industrial-based economy to an information-based economy. It is nowdifficult for businesses and individuals to remain competitive in this ever-changing society.
without up-to-the-minute information provided by the most up-to-date communicationssystems.
As communications requirements change, so do communications systems, and satelliteservice providers have adapted their networks to meet these changing needs. In 1992 Telesattook another step towards fulfilling the communications needs of Canadian businesses with
the construction and launch of its latest series of satellites, the Anik Es. This paper willexamine the on-going communications evolution and look beyond the year 2000 at the next
generation of satellites.
To be a part of that world satellite service providers have to understand the needs of themarkets they are trying to serve. They also have to be aware of the communications initiativesbeing studied by terrestrial network operators and the technological options available which
will allow them to meet the challenges these communications developments present.
IptroductiouTechnological developments affect everything we do intelecommunications, and it is obvious that emergingtechnologies will affect the design of the nextgeneration of commercial satellites. So to be a part ofthe communications networks of the future, satelliteservice providers have to understand the needs of themarkets they are trying to serve, they have to be awareof the communications initiatives being studied byterrestrial network operators and they have to look atthe technological options available which will allowthem to meet the challenges these communicationsdevelopments present.
To understand this it is important to understand howmarket trends create a demand for communicationssolutions and how that demand determines whichtechnologies are incorporated intotelecommunications infrastructures. Only then canwe understand the technological options available tosatellite operators.
Market TrendsToday's corporations have become increasingly moredependent on telecommunications systems to conducttheir everyday business. Telecommunicationssystems are always getting larger, faster and morecomplex, and increasingly greater demands onthese systems are being made. If we look at the waybusiness operations have evolved over the past thirtyyears. we can see how telecommunications systemshave developed and kept pace with that evolution.
In the 1960s businesses operated differently. PCs.LANs, cellular phones, and fax machines were still faroff in the future, and the main businesscommunications tools were the telephone, and, insome cases, the telex. What couldn't be handled overthe telephone and telex was handled with face-to-facemeetings, and the speed or pace of business wasdetermined, to a large extent, by these two methods ofcommunications.
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At this time satellite was primarily a service fortelevision broadcast. as back-up for terrestrialservices, and for long haul telephone traffic. Therewere no VSATs, no mobile satellite services, no BTVservices and little or no voice, data, or image (VDI)satellite applications.
In the area of data networking, computing power wasvery expensive. Organizationswith sophisticated datacommunications needs would contract out theircomputing requirements to companies equipped togenerate large batches of information within a shorttime. By the 19805 advances in computer technologymade it possible for organizations to actually buytheir own small computer, and by the end of the decadecomputers evolved to the point where they couldactually be placed on each desktop, giving the power ofdata communications directly to the communicators.This move to desktop computers led to thedevelopment of local area computer networks andincreased the communicating power of eachorganization.
Today's data networks are fast, reliable, andincredibly sophisticated. Inter-networkingarchitectures such as Local Area Networks.Metropolitan Area Networks, and Wide Area Networksallow for seamless communication between variouslocations of an organization, and these seamlessnetworks are already evolving into the next century'sglobal networks, networks that will alloworganizations to communicate with offices anywherearound the world.
So we are now on the threshold of the "global village"that has been discussed for so long.
in this environment telecommunications serviceproviders have developed new services and newapplications to fulfill the need for fast and timelybusiness information exchange. The telephonecompanies have increased the efficiency of their voice
networks and added such services as teleconferencing.They have developed new data services to replace thetelex, and introduced a v. lety of services operating atdifferent speeds to meet th needs of any business. Andsatellite communications companies have developedsatellite-based services to meet these business needs.
Where satellite was once perceived solely as a servicefor television broadcast, or as back-up for terrestrialservices and for long haul telephone traffic, it Is nowan alternative communications service in its ownright. VSATS are in widespread use, businesstelevision is now an affordable option for mostorganizations. teleports have been created in citiesaround the world, and a whole host of VDIapplications are now possible using these satellitefacilities. Today, satellite offers an alternativetelecommunications solution to the communicationsmanagement problem, either as a complete network.or as part of a communications mix which includesterrestrial components.
So what does all this mean for the future?
While market trends create demand forcommunications solutions, market demanddetermines which technologies are developed intotelecommunications infrastructures.
Market DemandToday's advances in computer technology and inter-networking architectures are allowing seamlesscommunications between various locations, and thisseamless communications is in turn allowingcompanies to expand beyond their cities andcountries.
With this in mind we can look ahead and expect that inthe mid to late 1990s the increased processing power ofcomputers, the increased speed of inter-networkingarchitecture and the wide availability of user-friendlyapplications will integrate data, voice and videoapplications to create seamless multimediacommunications. This seamless multimediacommunications will be available on a global level, sojust as data communications became the life-stream oforganizations in the 1970s and 1980s, multimediacommunications will become the lifestream oforganizations in the late 1990s and into the 21stcentury.
Terrestrial communications providers are already intune with this trend. They have been working on anumber of communications initiatives to address thedemand for communications solutions that this trendwill create. Their efforts are aimed at achieving sixprimary network development objectives: rapidservice provisioning, higher speed bearer services.network operator programmability, vendor andtechnology independence, portability of services, andmobility for customers.
A large number of network development initiativesare in progress to meet these objectives. Networksdeveloped with these objectives in mind will provide aplethora of services to the end-users at economicalcosts by maximizing the use of the resources in thenetwork. The work being done to reach theseobjectives can be grouped into five broad categories orconcepts.
The first is the local, metropolitan, and wide areanetwork concept, or the LAN/MAN/WAN concept.This concept originated with the computer industry.but as computers have proliferated in the business anddomestic environment, network operators have
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assumed the responsibility of providing inter-networking solutions. Their efforts were initiallyaimed at providing reliable local area networks, but,recently, because of the globalization of businessactivities, these local area networks are beingconnected by metropolitan area networks and widearea networks. They are getting more sophisticatedand are operating and higher and higher speeds.
The second initiative is known as Broadband ISDN.The original narrowband Integrated Services DigitalNetwork began in the early 1980s as a means ofconsolidating a large number of network architecturesinto one. The driving force behind these activities wasa desire to provide a full range of services and deliverbetter performance. This work has continued into the1990s. and today an increasing number of networkarchitectures are being consolidated, with digitizationcontributing to this work.
Broadband ISDN builds on narrowband ISDN toprovide much higher speeds and a further means ofintegrating all applications. In the near future we willsee this being achieved by Synchronous OpticalNetworks (SONET) and Asynchronous Transfer Mode(ATM) technologies.
The third initiative being pursued is the intelligentnetwork. This initiative introduces modularity intothe network infrastructure that can be arranged andre-arranged to provide specific functions or services.Terrestrial network operators have been investigatingthis concept for almost ten years in their efforts tobecome vendor and technology independent andprovide new services to the end-user. Onceimplemented. it will eventually allow the end-user toconfigure services on a subscribed portion of thenetwork. Intelligent network capabilities are alreadyfinding their way into voice networks and willeventually be phased into other networks.
The fourth concept is personal communicationsservices. Over the last several years we have seen astrong trend towards wireless communications forvoice and low rate data applications. This trend willcontinue and eventually allow the end-user mobilityand portability of services. We can expect wirelessnetworks to be developed based on existing PSTNnetworks, developing Broadband ISDN networks, andIntelligent Network concepts.
Finally, the fifth initiative being pursued is known asintegrated network management. Considerableresearch and development time has been applied inthis area to develop a single infrastructure toconsolidate all operational, maintenance andadministrative network systems. But this concept willneed significantly more research and developmentmanpower to make it a reality.
Those are the five initiatives being pursued byterrestrial service providers. Once in place, networksdeveloped using these concepts will become formidablecompetitive forces in the metro, urban and selectrural areas, and they will compete even more fiercelywitn satellite networks for customers.
At Telesat we believe that satellite networks have aplace in this competitive environment. We know thatsatellite operators planning for their future place Inthis environment must study the five terrestrialinitiatives in order to develop their owninfrastructures. And we realize that although satellitenetworks can't equal the capacity of the terrestrialnetworks, they can provide a fully flexible network toserve the metro. urban and rural areas, with thecapability to also serve all remote areas. But satellite
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operators must begin to plan for the future now, sothey can develop satellite systems that will be able tomeet the needs of all customers.
Telesat launched it's Anik E satellites last year withthat in mind. The Anik Es are large, dual -bandsatellites with more transponder power, more on-board redundancy, and more switching capabilitythan any previous satellites. Both Anik Es will be inuse beyond the end of this century, and were designedto address the fundamental changes we foresee takingplace in the communications business.
We have also developed a geostationary mobilesatellite system over the past several years in closeliaison with the Canadian Department ofCommunications and NASA, and, more recently, withthe American Mobile Satellite Corporation. In 1994we plan to launch the first MSAT satellite and offercomplete mobile services from that platform.
But these satellites are only the first steps towardsaccommodating the communications needs of thefuture. To meet the challenges that will emerge fromterrestrial service providers, future satellites will haveto be more powerful and more intelligent. They willneed this power in order to process the increased flowof customer information as quickly and efficiently aspossible.
So what will the satellite system of the future looklike?
Bigger Not Necessarily BetterKeeping in mind how the terrestrial networks aredeveloping, we can get a rough idea of what we willneed to do to meet the needs of evolving markets.
Until now, bigger has been better in the satellite world.Satellites like our Anik Es were needed to address thetraffic needs of both the broadcast market and the VDImarket. But those markets are rapidly developing andsegmenting into smaller markets, and what was goodten years ago is not necessarily going to be good for thenext generation of satellites. The developing segmentsof the broadcast market and VDI market will all havedifferent needs, and they will require differentcapabilities from a satellite.
Four On-Board Processing (OBP) options are availableto satellite operators to help address those needs.
The first is to concentrate on developing the OBPcapabilities of the transponder. This will be suitablefor point-to-multi-point broadcast satellites like ourAnik Es and will produce satellites capable of servingthe needs of the video market, the Direct BroadcastSatellite (DBS) market, the Direct To Home (DTH)market and Digital Audio Broadcast. They will also becapable of handling point-to-point one-way broadcastservices, such as paging and video-on-demand.
The second option is to work on the space switcharchitecture. This is similar to the first option butprovides better performance. It is most suitable forpoint-to-multi-point broadcast and for point-to-pointservices.
The third option is with fast packet architecture. Thisis most suitable for point-to-multi-point interactiveservices, and foi mull-point-to-multi-pointinteractive services. It supports other services, likepoint-to-point interactive applications, but in doingso it tends to over-process.
Finally, a hybrid system combining some or all of the
423
elements of space switch and fast packet architectureis possible. This is suitable for most services, exceptfor multi-point broadcast.
In tackling these options. satellite operators have twoalternatives when designing their satellites.
First, they can include one or more OBP options on amulti-purpose satellite. But combining all theseoptions into one satellite to handle all the needs of allmarkets, and, therefore, all traffic, would require avery large, very bulky, and very expensive satellite.This would increase the operations risk and potentialfor disaster in case of a failure. Bigger, then, is notbetter if we are putting all our market segment eggsinto one satellite basket.
The alternative is to develop and launch multipleLightsats with specific processing capabilities tohandle the specific needs of a market. For example, aLightsat could be launched to handle the needs of thevoice market, and another for the low-bit data market.Lightsats could also be launched to handle the needs ofthe DTH or DBS market. In this scenario, smallbecomes beautiful as the risk factor and potential forfailure that is possible with large, multi-purposesatellites is reduced.
What will the solution be?
Although I can't tell you which of these alternativeswill be chosen by satellite operators, I can tell you thathow the markets develop and what they demand interms of service will determine what is eventuallylaunched. We may even see satellite operators aroundthe world considering the advantages of launching acombination of satellite platforms to serve theirdifferent market segments.
At Telesat we have programs dedicated to studyingthese possibilities. including advanced satellites withon-board switching/processing capabilities in both Kuand Ka-bands. Broadbeam versus narrowbearncoverages are being investigated at frequencies such asC. Ku. Ka, and L-bands. And the possibility of inter-satellite communications is also being considered.But these are just a few of the new technologies that weare studying, as we keep an eye on the initiatives beingstudied by terrestrial operators.
In Canada we are working based on the fact that atelecommunications infrastructure already exists.But for nations where a telecommunicationsinfrastructure has yet to be established, the choiceswhich must be made are different. These countriesarebasically working with a clean slate. They have theadvantage that all this ground work has already beenestablished, and the human resources and the researchare available for the development of an infrastructuretailored to the needs of the market.
Those trying to develop :1 telecommunications systembased on the capabilities of satellite, should firstdetermine what the role of satellite is going to be in anoverall infrastructure, rather than on its own. Neitheithe terrestrial nor the satellite base should be seen asindependent of the other. If a truetelecommunications infrastructure is going to exist.each network must have a role to play in it.
In these countries, satellite technology can be used tobuy time for the development of the most effective andefficient terrestrial or hybrid infrastructure available.Satellite should be considered as an interim step to therealization of a full telecommunicationsinfrastructure. That infrastructure could eventuallyinclude the best of the terrestrial systems available.
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and the best of the satellite systems available. Bydrawing on the experience and technology alreadyestablished by telecommunications providers aroundthe world, developing countries have the ability tocreate the best telecommunications infrastructure forthem.
But whatever the market situation is, if satelliteservice providers are going to compete effectively andretain a place in the communications systems of thenext century. they must study the emergingtechnologies that will affect the design of the nextgeneration of commercial satellites. As thecommunications requirements of satellite servicecustomers evolve. so must communications systems.and satellite networks must adapt to meet thosechanging needs.
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KOREASAT Technology Development and Services
Dr. Han HwangboKOREA TELECOM
Satellite Business Group680-63 Jayang-dong, Sungdong-gu
Seoul, Korea
KOREASAT is the first generation satellite for the Republic of Korea. It uses the advanced digitaltechnology for direct broadcasting and fixed satellite services in Korea. It will provide basic satellitecommunications facilities with small low-cost remote stations for rural and remote areas presentlyhaving inadequate or no telecommunication facilities. It will also provide high speed data and videodistributions for business television and other professional program services such as tele-educationalvideo networks. High quality color television and high definition TV will also be available anywhere inKorea. It will certainly play a major role in the Korean communications network in the 21st century.
1. INTRODUCTION
KOREASAT system is designed to provide Ku-bandsatellite communications services for the Republic ofKorea. The GE Series 3000 spacecraft platform (Figure 1)for KOREASAT system utilizes a single fixed antennacapable of simultaneous circular polarization directbroadcasting service(DBS) and linear polarization fixedsatellite service(FSS). KOREASAT is designed based onthe similar reflector as the Advanced. CommunicationsTechnology Satellite(ACTS) to implement three 27 MHzDBS channels with the transmit EIRP of 59.4 dBW andthe receive G/T of 12.6 dBfK ( Figure 2), and twelve 36MHz FSS channels with the transmit EIRP of 50.2 dBWand the receive G/T of 13.4 dB/K (Figure 3).
1r<
FIGURE 1 SPACECRAFT
BEST COPY AVAILABLE 425
The two spacecraft system constellation is co-located at116 degree east longitude with a beam pointing center at1275 degree east and 36 degree west and with on-stationaccuracy of 0.05 degrees in N-S and E-W for the serviceperiod of 10 years. KOREASAT spacecrafts are scheduledto be launched into a geosynchronous orbital location in1995.
2. KOREASAT DEVELOPMENT
KOREASAT system is currently designed and developedby the General Electric(GE) team and Korean partners inaccordance with the Korea Telecom's requirementspecifications. The GE team consists of GE Astro-Space(GE ASTRO) in U.S. as the prime contractor and MatraMarconi Space(MMS) in England as the subcontractor.Korean partners comprise of Goldstar Information &Communications(Goldstar) and Korean Air Aerospace(Korean Air) in Korea.
With experience in all aspects of commercialcommunications satellites for more than 20 years, GEASTRO is responsible for the spacecraft antennas,spacecraft bus and ground segment software. MMS isresponsible for the spacecraft payload and the groundcontrol facilities. Goldstar and Korean Air are responsiblefor the backup ground control facilities, spacecraft busstructure for the solar panels, and technology developmentfor the next generation of KOREASAT.
McDonnell Douglas(MD) in U.S. will provide the DELTAII launch vehicle for launch services to deliver twoKOREASAT spacecrafts to the geosynchronou, orbit andHalla Engineering & Heavy Industms( Hal la). Koreanpartner, will participate in the design of the launch vehiclehardware.
3. KOREAN INDUSTRY PARTICIPATION
Goldstar will participate under a subcontract with GEASTRO in manufacturing of (i) Command, Ranging andTelemetry (CR&T) Module that includes a time codetranslator/generator, a command generator, a range toneprocessor, a phase meter, two telemetry processors. astatus display, and two subcarrier discriminators togenerate uplink commands and range signals and to receiveand process downlink telemetry and ranging signals, (ii)Static Spacecraft Simulator that includes the hardware and
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software necessary to receive, decode, decrypt andauthenticate baseband command tones and to generate four70 MHz simulated telemetry stream signals in real time toprovide functional simulation of two KOREASATsatellites in geosynchronous orbit, and (iii) Telemetry,Command and Ranging(TC&R) system that is comprisedof the Command Receiver and Beacon Transmitter toprovide the means for monitoring and commanding thespacecraft.
Goldstar will also be involved uncle' a subcontract withMMS in the design of (i) Communications SystemMonitor/In Orbit Test(CSM/I0T) that provides trafficmeasurement and monitoring of the KOREAS ATspacecrafts for in-orbit test, routine payload monitoring,anomaly investigation, and trend analysis, (ii) secondaryTelemetry, Tracking an Command(TTC) basebandsubsystem, and Control and Monitor(C&M) subsystem,and (iii) payload equipment tha. includes FSS channelamplifier with ALC, FSS channel amplifier with fixedgain, and DBS channel amplifier.
Korea Air will fabricate, test and deliver under asubcontract with GE ASTRO the KOREASAT structuresystem that includes (i) Series 3000 rectangular boxstructures with aluminum honeycomb panels excludingbulkhead panel and transponder panel, (ii) six solar arraypanel substrates, and (iii) secondary structure items.
Halla will manufacture under a subcontract with MD foursets of the Solid Rocket Motor Nose Cones for nine boostaugmentation graphite expoxy motors, four sets of nineSolid Rocket Motor Nose Cone Adapters, and two sets ofthe third stage Payload Attach Fittings.
4. KOREASAT SERVICES
KOREASAT is intended to provide a variety of satellitebusiness services over the territory of the Republic ofKorea by utilizing advanced digital technologies. Therange of FSS services covers low/medium speed datatransfer by the very small aperture terminal(VSAT), lowspeed voice and data circuits by the demand-assignedmultiple access/single channel per carrier(DAMAJSCPC)method, and high speed integrated services by the TDMAtechnique (Figure 4). The primary Telemetry, Tracking
FIGURE 2 TYPICAL DBS EIRP CONTOURS
FIGURE 3 TYPICAL FSS EIRP CONTOURS
and Command(TTC) station collocated with a SatelliteControl Center(SCC) and a Network Control Center(NCC) supports the KOREASAT services. TheCommunication System Monitor(CSM) at the primaryTTC monitors all transponder activities of twoKOREASAT spacecrafts and optimizes the use ofcommunications network for all service links.
5. VSAT SERVICES
The VSAT networks are arranged in star configurations,usually having a corporate headquarters or othercentralized data center at the host site, with the branchoffices or other remote sites connected to the host by thesatellite links. The VSAT system uses four(4) FSSchannels to provide a low/medium speed datacommunications system between a host computer and alarge number of dispersed remote computer terminals orbetween two remotes via the VSAT central station(VCS)for a cost-effective bypass of terrestrial facilities.Thissystem is especially suitable when the data flow isgenerally large from the host to the remote systems for lowspeed data transfer, facsimile and digital voice.
The satellite station associated with the host computer usesa reasonably large antenna up to 8 meters in diameter,while Lie VSAT remote station(VRS) uses a very smallantenna down to 1.2 meters in diameter. The VSATsystem supports inbound and outbound data rates up to 64Kbps and a transmission bit error ratio(BER) of better than10-E8. The VCS hardware is capable of supporting up to40 outbound and 120 inbound carriers depending upon theVCS sizing, types of carriers, antenna sizes, satelliteperformance, etc. One VCS system is able to terminate thetraffic from 20 to 500 VRS systems and designed to allowmodular growth up to 4,096 VRSs.
The VSAT system is currently developed by a team ofKorean industries and MPR Tel tech in Canada byenhancing the existing DS2100 system.
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6. DAMA/SCPC SERVICES
The DAMA/SCPC system uses one(1) FSS channel tosupport fully meshed communications among the remotestations with a single satellite hop. This system is a satellitebased digital voice and data communications networksuitable for thin-route connections among a large numberof earth stations.These telecommunication services includeanalog and digital telephony managed on a dynamic call-by-call basis and data circuits managed on a demandassigned basis. It uses call-by-call DAMA for voice anddata circuits via SCPC communication paths between earthstations anywhere in the system.
This system supports 1,200 SCPC single way trafficchannels, 2,000 remote DAMA terminals, 10,000 SCPCchannel units through the use one FSS channel and thesystem capacity can be increased up to three(3) FSSchannels. The system performs Mean Call Processingthroughput of 5 calls/sec, Peak Call Processing throughputof .500 calls in 25 sec, and 4 sec Call Setup Time. BERaveraged over 10 minutes does not exceed 10E-6 for a 32Kbps voice communication and BER for datacommunication does not exceed 10E-7 for more than2.09% of any year. The overall system availability will bebetter than 99.80% for the voice communication path,99.81% for the data communication path, and 99.89% forthe service information path.
The DAMA/SCPC system is currently developed by a teamof Korean industries and Alenia Spazio in Italy.
7. HIGH-SPEED DATA SERVICES
The high speed integrated services use two(2) FSSchannels for high speed data transfer between stations andfour(4) FSS channels for video relay which includesatellite news gathering(SNG), TV receive only(TVRO),CATV, and TV relay. The high speed data transfer
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services between stations include high speed computer f letransfer, high speed facsimile, telegraph/telex, digitalvoice, and video conferencing. These services also includetemporary backup transmission of data due to outage ofterrestrial lines or traffic overflow. These equipment forthe high speed integrated services will be developed byKorean industries.
8. DBS SERVICES
Each KOREASAT satellite utilizes three DBS channels of120W TWTs out of six available DBS channels to provideKorean viewers with high quality NTSC color television,multiplexed analog components(MAC) television, and highdefinition television(HDTV).
DBS payload provides (i) Left-hand circularly polarized(LHCP) receive and transmit antenna, (ii) Two redundantpairs of low noise amplifiers(LNAs) with redundancyswitching, (iii) Two receivers with input filtering andredundant RF switching, (iv) Input multiplexers to provideseparate amplification paths for six channels, (v) Six RFchannel amplifiers with redundant input/output switchnetworks, (vi) An output multiplexer assembly combiningall six channels to antenna, (vii) k commandable channelgain control for each RF channel, and (viii) An automaticlevel control function for each channel to provide properTWTA saturation over a 15-dB dynamic range.
The frequency and polarization plans for the DBS payloadassign six channels of 27 MHz bandwidth in accordancewith the Final Act of WARC-77 for operation over anythree active channels on each of two spacecrafts to provideI.5-dB margin over the 59.4 dBW requirement at the edgeof coverage area(Figure2). DBS performance alsoprovides 0.2-dB EIRP margin at the edge of coverage and1.8-dB G/T margin even when operating under the worst-case pointing conditions.
1011AND
KOREAA T I n!!
SAT IONE I1 -011111TSTAG?
NIGN
DNS VSAT SCIY StEE0Is 111111 Ilfl.AT
ISTATION MUM
STATION STATION STATION STATION
L 1 -1-1
TIOOFTOP
ITECF.IVR
Ira.)
-tit VSAT(os presiseservices)
1101311!TUNINAIS
FIGURE 4 OVERALL CONFIGURATION OF KOREASAT SERVICES
427
typical EIRP over the mainland of Korea may be greaterthan 62 dBW but the peak EIRP radiated is less than 63.6dBW as required by the CCIR Radio Regulations. Receivecross-polarization and receive gain outside the coveragearea also meet the requirements of the Radio Regulations.
9. OJT PLAN
GE ASTRO and MMS perform the On-the-JobTraining(OJT) to provide Korean engineers from thebeginning of the design phase to the post-launch phasewith indepth, hand-on, learning experiences in all activitiesof the KOREASAT spacecrafts, payloads, and groundequipment. 30 engineers from various Korean industriesand Korean Research Institutes are assigned for OJTduring design, construction, and test phases, threeengineers during launch phase, and three engineers duringoperation and maintenance.
The communication antenna, the bus subsystems, and themission analysis and operations OJT will be performed atthe GE ASTRO facilities in East Windsor, N.J. Thepayload and ground equipment OJT will be performed atthe MMS facilities in Portmouth, Bohramwood andWatford, England. OJT for final spacecraft integration,assembly and tests will also be completed at the GEASTRO facilities.
Korean engineers will team with GE ASTRO and MMSengineers and contribute to the system and subsystemdesign, analyses, manufacturing, integration, testing,launch, and mission operation activities. They willparticipate in preparation of (i) System and subsystemperformance specification documentation, (ii) Designreview documents for systems, subsystems, andcomponents, and (iii) Performance analyses. Aftercompletion of the spacecraft and ground station integrationand test, a small group of OJT engineers will contribute tothe prelaunch and launch activities.
MD also performs the OJT program to provide 24 Koreanengineers with the technology of launch services and hand-on experiences at the MD premises in order for them togain sufficient and comprehensive knowledge andtechnical know-how in the field of launch vehicle designand assembly, launch and mission integration, and launchoperations.
At the Huntington Beach facility in California, Koreanengineers will assist in the overall tasks including (i)Development of the mission peculiar support drawings anddocumentation for two spacecrafts, (ii) Development ofmission specification, and (iii) Compatibility analyses. Atthe Pueblo facility Corolado, they will participate in thelaunch vehicle assembly, production, checkout, andquality control activities. At the Cape Canaveral launch sitefacility in Florida, they will be involved in launch vehicleprocessing, spacecraft integration, and launch operations.
It is recognized that through the OJT program Koreanengineers will be able to acquire commercially availabletechnology and experience in design. manufacturing, andintegration of the communication satellites and launchvehicles as well as satellite operations and launchoperations to pave the way for the next generation ofKOREASAT.
428
FIGURE 5 LAUNCH VEHICLEFOR KOREASAT SYSTEM
10. CONCLUSION
KOREASAT is the first generation of communicationsatellites in the Republic of Korea. It is under design anddevelopment by the GE team and Korean industriesaccording to the Korea Telecom's specifications andscheduled to be launched by the Delta II in 1995 (Figure5). There is a growing awareness among Koreanenterprises of the great potential of satellite businesssystems, offering users immediate, wideband, long-distance services which can not at present be easilyprovided on terrestrial networks. Satellite communicationsare especially attractive and cost-effective for businessowners with large distributed processing needs or videoservices whose operations are already constrained by thelimitations of land lines. The utilization of KOREASATspacecrafts may be maximized by new technology andservice development such as digital compression, ultra-small aperture terminal (USAT), and mobilecommunications. The demand for new services in highspeed data transmission of various rates and directbroadcasting service(DBS) will increase significantly in thenext decade in Korea.
BUILDING TELECOM NETWORKS TO THE PEOPLE'S REPUBLIC OF CHINA
Infrastructure and ServicesThe Hong Kong Gateway
Flora TungDirector of International Operations
Hongkong Telecom
1. Abstract
An economic revolution in China has captured the attention of the world's businesses. China,with outside participation, is investing in industrial development and special economic zones thathave already made it the fastest growing economy in the world's fastest-growing economicregion the Asia-Pacific Rim. While this revolution began in the southern province ofGuangdong (formerly Canton), it is now progressing up the coastline and into the centralprovinces of the world's most populous nation.
To support th.s economic powerhouse, China is modernizing its infrastructure in an ambitiousprogram that includes the provision of high-quality telecommunications demanded bymultinational companies. One of its closest partners in this effort is Hongkong Telecom which,by its unique position on the Pacific Rim, is the Telecom Gateway to China.
2. Economic Overview - The Four Little Dragonsand China
The Organization of Economic Cooperation andDevelopment (OECD) says that the center of globaleconomic gravity is shifting to the Asia-Pacific region,which will account for one-third of the world's productionby 2010, compared with about one-quarter in 1990. By2040, OECD says, half of the globe's output will comefrom Asia.
These projections arc supported by Japan's Ministry ofFinance. The Ministry report that in 2015, Asia's $12.4trillion GNP will represent 35 percent of the combined$35.9 trillion GNP of Asia, North America and Europe.
Put in another perspective, the Asian Development Banksaid last November that Asian GDP is expected to reach 7.1percent in 1992 vs. 1.3 percent in the U.S. Economicgrowth in China is expected to double from 5.2 percent in1990 to 12.2 percent in 1992. In China's southern provinceof Guangdong, growth is more than 13 percent. It's clearwhere growth minded global companies should be settingtheir sights and their sites.
While some of the region's nations are growing faster thanothers, virtually no area on the Asia-Pacific Rim is beingleft out of the action. Japan is the current leader, postinga $3.369 trillion GDP in 1991. But the high cost of doingbusiness in Japan, where an average hourly compensationin wages and benefits in the manufacturing sector is morethan $14.00, has caused entrepreneurial eyes to focus onless costly regions.
Although substantial overseas investment (includingJapanese) is flowing to most countries on the Rim, amongthe favored ta-gets have been the four little dragons: HongKong, Singar orc, Taiwan and South Korea. To thcsc isbeing added the big dragon, China, where an economicrevolution is transforming the world's most populous nationinto a world-class investment opportunity, manufacturingcenter and the world's largest untapped market.
Indeed, Guangdong province (formerly Canton province),just north of Hong Kong, has set for itself the objective ofbecoming the fifth little dragon. As described by WilliamOverholt, Governor of the American Chamber of Commercein Hong Kong in a presentation to the Senate ForeignRelations Committee last April, Asia is the fastest growingpart of the world economy and southern China is the fastestgrowing part of Asia.
A look at statistics (Fig. 1) shows how these five regionscompare with each other in 1991 Gross Domestic Product,per capita GDP, population and average hourly pay.Figures for Japan are given as a comparison. Thesestatistics show that the four dragons are relatively equal interms of labor costs. And they also show why manynations are targeting China as a good place to set upmanufacturing operations both to meet local demand andfor export.
A wealth of other statistics support the notion that theAsia-Pacific Rim, and especially China, is an outstandingbusiness opportunity for global-minded companies. Moreand more companies -- and countries -- are getting themessage. But Hong Kong has taken the lead by providing80 percent of the foreign investment in China. The totalduring the 1980s was $23 billion, 80 percent of which wasin Guangdong, which has 16,000 Hong Kong-basedcompanies employing an estimated 3 million. Thearrangement is reciprocal. China has invested some $10billion in Hong Kong, including Hongkong Telecom. It isthe third largest investor in Hong Kong manufacturing afterthe U.S. and Japan.
The long, friendly and mutually beneficial relationshipbetween Hong Kong and China is also evidenced by thetwo regions being each others' major trading partner.Bilateral trade between Hong Kong and China in 1991reached $49.6 billion, or nearly 37 perccnt of China's totaltrade. China's share of Hong Kong's global trade jumpedfrom 9.3 percent in 1978 to 32.4 perccnt or $64.2 billion in1991. In turn, Hong Kong is China's largest export market.taking nearly 45 percent, or $32.1 billion of the 1991 total.This is a 24.2 percent increase over 1990.
429(.1 4
China has been Hong Kong's largest supplier since 1982.It is the principal supplier of raw materials andsemi-manufactures, consumer goods and foodstuffs, andsecond largest supplier of capital goods and fuels. In turn,Hong Kong is a principal supplier to China, accounting formore than 24 percent, or $17.5 billion, of China's totalimports in 1991. Hong Kong's major domestic export itemsto China in 1991 included textiles, telecommunicationsequipment, polymerization and copolymerization products,watches, clocks and clothing.
To support this and other activity, more than 42 millionpassenger journeys were made between Hong Kong andChina in 1991, compared with just under 10 million for1981. Some 11 million tons of cargo was moved across theborder in almost 6 million vehicle journeys during the sameperiod.
3. Hong Kong - The Business Connection
This introduction to the dynamic economy of the region andthe close economic and personal tics between Hong Kongand China supports the proposition that for globalcompanies, the most logical way to enter the China marketis through Hong Kong. We now can move to an overviewof the telecom infrastructure supporting access to China andits economic development zones.
3.1 Trans-Oceanic Cable Systems
Recent announcements of ambitious new undersea cableprojects underscore the importance being placed on theeconomic opportunities developing throughout theAsia-Pacific Rim. Indeed, it is hard to believe that whenthe first trans-Pacific digital cable, the 560 MegabitTPC-3/Haw-4, was installed in 1989, a full fifteen yearshad elapsed since the turnup of the analog TPC-2/Haw-3cable. In 1990, the 1,260 Megabit North Pacific Cablewent into service.
Last November, TPC-4 with 1,120 Megabits of capacity,was inaugurated just after carriers announced plans for the5 Gigabit TPC-5 system. In addition to these systems, theHaw-5, PacRim EastiTasman-2/PacRim West project willbe phased in through 1994.
But the Pacific will soon lose its monopoly as a route fortrans-oceanic fiber cable access to the Far East. Digitalfiber paths westward are being mapped through the 1,120Megabit Sea -Me -We 2 and 5 Gigabit Sea-Me-We 3 andFLAG (Fiber Optic Link Around the Globe) projects toEurope. The latter would be the world's largest fiber opticcable at 15,000 miles.
3.2 Regional Cable Sy Stems
Hong Kong is served by two cable landing stations, one atDcepwater Bay and the other at Cape Daguilar, that providefiber access to the trans-oceanic systems. The HongKong-Japan-Korea cable and Hong Kong-Taiwan cables,both with 250 Megabits of capacity, connect with TPC-3through Japan or the Guam- Philippines-Taiwan cables,and with the North Pacific Cable through theMiura-Chikura cable in Japan.
Additional capacity, interconnects and reliability will stemfrom completion this year of the 1,130 MegabitAsia-Pacific Cable connecting Hong Kong with Singapore,the Philippines, Taiwan and Japan. Next year the HongKong-Guam-Philippines cable will provide an additional560 Megabits of capacity. And, as announced last
430
November, plans arc being made for a 5 GigabitAsia-Pacific Cable Network linking Hong Kong, Brunet.Guam, Japan, Indonesia, South Korea, Malaysia. thePhilippines, Singapore, Taiwan and Thailand.
3.3 Satellite Access
Hongkong Telecom's Stanley Earth Station is the territory'ssatellite hub. In addition to providing access to Asia Sat,the Stanley facility has antennas directed at the 60 and 63degree Indian Ocean Region Intelsat satellites and the 174,177 and 180 degree Pacific Ocean Region Intelsat satellites.Backup antennas are available for the 66 degree IOR and183 degree POR restoration spacecraft.
3.4 Business Access
These long-haul and regional cable and satellite systemssupport the busiest telecommunications center on the PacificRim. More than 450 multinational firms hub theirAsia-Pacific network in Hong Kong which, according tocominunications2Ersji International, commands some 60percent of the Asia-Pacific hub market. The territory ishome to 51 percent of all multinational corporations'regional headquarters in Asia.
According to China Business Review, Hong Kong'semergence over the last decade as the principaltelecommunications hub in Asia was instrumental incementing the territory's key role in the Pacific Rim.
Today more than 30,000 foreign companies have operationsin Hong Kong. Pacific. Telecommunications describes theterritory as having one of the most advancedcommunications infrastructures in the world.
4. China Access
Coupling Hong Kong's accessability with its telecomsinfrastructure, a strong case is make for the territory as thecommunications gateway to China. To date, Hong Kongprovides the only fiber optic access to China. This is viathe 4 x 140 Megabit cable linking Hong Kong, Shenzhen,Dongguan, Huizhou and Guangzhou, and the new 565Megabit cable linking Hong Kong and Shenzhen. Beyondthese main trunk systems, a rapidly expanding web ofinternational private leased circuits (IPLCs) supportinternational businesses operating in China's SpecialEconomic and Industrial Development zones.
A report on transit capacity within the People's Republic ofChina and services now being offered there will be coveredin a separate paper. I will conclude these remarks with anoverview of services jointly being offered by HongkongTelecom and China's provincial telecommunicationsadministrations.
IPLCs terminating in or transiting Hong Kong now servemore than 70 global companies with operations in China.An example is the high-speed circuit supporting theoperations of DuPont Agricultural Chemicals Ltd. inShanghai, which provides access to the company's HongKong hub and on to company data centers in Singapore,Germany and the U.S.
More recently, One-Stop Shopping agreements were signedbetween Hongkong Telecom and telecommunicationsadministrations in China's three major gateway cities --Beijing, Shanghai and Guangdong. When coupled withsimilar agreements Hongkong Telecom has with 22 otheradministrations in 14 countries, these comprehensive service
packages greatly facilitate provisioning and managinginternational networks supporting commerce between majorindustrial nations.
Last September public videoconferencing was inauguratedbetween Hong Kong and Beijing. Since then, similarservices were turned up in Shanghai and Guangzhou.
Other services offered between Hong Kong and Chinainclude international direct dialing, facsimile and mobiletelecommunications.
5. Conclusion
Hongkong Telecom has enjoyed a close workingrelationship with its counterparts in China for more than 20years. Results of this relationship include several highlysuccessful joint ventures such as the Shenda TelephoneCompany in Shenzhen and a specialized communicationsnetwork for oil rigs operating the South China Sea.Organizations seeking to participate in China's economicrevolution, or strengthen ties with China's scientific,academic and research institutions, welcome thetelecommunications infrastructure being built to facilitateinteraction with a dynamic and growing member of theAsiaPacific community.
FIGURE 1
The Four Dragons and China
GDP(SUS Billion)
Per CapitaGDP
Population(million)
Average HourlyCompensation
Hong Kong 82.7 15,180 5.8 $3.58Singapore 40.0 15,108 2.8 4.38So. Korea 283.5 6,117 43.3 4.32Taiwan 175.7 6,837 20.4 4.42China 371.2 2,656 1,139.0 0.24
Japan 3,369.7 14,311 123.9 14.41
Source: Fortune
4431
Oct. 5, 1992
Pacific Telecommunications Council2454 South Beretahia Street. Suite 302Honolulu, Hawaii 96826 USA
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Volume II
PacificTelecommunicationsCouncilFifteenthAnnualConference
Proceedings
Edited by
James G. Savage and Dan J. Wedemeyer
January 17-20,1993
Sheraton Waikiki Hotel Honolulu. Hawaii
SESSION 3.1.1 TO 4.4.1
intnortherntelecom
Volume II
PacificTelecommunicationsCouncilFifteenthAnnualConference
Proceedings
Session 3.1.1 to 4.4.1
Edited by
James G Savage and Dan J. Wedemeyer
January 17-20. 1993
Sheraton Waikiki Hotel Honolulu, Hawaii
© Copyright, Pacific Telecommunications Council, 1993
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Published by
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Printing sponsored by Northern Telecom
43
54
57
TABLE OF CONTENTS
Subject IndexCountry IndexAuthor Index
Session Summaries
Sunday, January 17, 1993
Background Papers for Discussion Group
Forcasting Satellite Demand DG1JACK ALBERT
Business Television Impacting the Corporate Bottom Line DO4AL BOND
ZAP, CRACKLE AND POP: Health Concerns in the U.S. asto Radio Frequency Electric and Magnetic Fields Emitted fromTelecommunications Facilities 006RACHELLE. B. CHONG
64 Risk, Security, and Policy Considerations in the Use ofComputer and Communications Technology in FinancialManagement DG7HYUNG-MIN MICHAEL CHUNG
68
73
77
83
86
Low Cost Information Gateways DosR. F. CRUICKSHANK, T.D. SCHOECHLE
Re-engineering Travel Information: Opportunities for TelecomProviders DGIOGEORGE E. DARBY
Impact of New User Applications on the TelecommunicationsMarket in the '90s DGisRALPH R. HUBBARD, ELVA ELLEN KOWAI D
Marketing in Japan DGIbMASARU KAWAJIR I
Suggestions for Forming Multinational TelecommunicationsJoint Ventures DG18WARREN G. LAVEY
89 The Introduction of Universal Jointing and Coupler Technologyfor Optical Submarine Cable Systems DrilyGRAHAM L MARLS, JAMES E. ROGALSKI
95 Recent Trends in International Value Added Network ServicesAgreements in the Pacific Basin nomEUGENE NEWMAN
98 Telecommuting : Appropriate for the Asian Setting of the1990's? DG21GIL GORDON, DAVID L. PETERSON
105 Southeast Asian Telecom 0025ANNE-MARIE ROUSSEL
110 The Future of Value-Added Networks in the Pacific 0024BRUCE WILLEY
114 NASA's Experimental Satellite Program for FutureTelecommunication Services spi 4RAY J. ARNOLD, DOMINICK. SAN.' ARM& JIM CRISAFIll I I
toes
122 Database Of The World: Converging Technologies t 1 t :
WINSTON HINDI JR
V
Monday, January 18, 1993
129 Telecommunications Desclopment in Taiwan, ROC, A StudyCase for Modernization 2 1 1 2
P.Y 1.I1E
132 Development of Multipoint Teleconference System UsingMultipoint Control Unit (NICU) 221 iTA ISUIIIDE ARAKAKI, E1S1.10 KENMOKU. 10YONORI 1st 110A,MASANORI SAWAI
138 The New Generation of ISDN Applications and Beyond 221DALE T. ROGERS. JERRY A. NOWICKI
146 Optimization of VSAT Systems and Application in Asia-PacilicArea 2.2.1.5KAZUYOSIII MIYOSI II
150 Business, Legal, and Technical Implications if the Proliferationof Global Data Communications Networks 2.2.2.2HYUNG-MIN MICHAEL CI RING. TEL F.F. TAN
157 New Multilaterally Agreed Rules For International Trade InService, 2.2.2.3RAYMOND J. KROMMENACKER
160 A Comparative Analysis of Governance Costs for InforrrtionTechnology 2.2 2.4RUCHADAPORN LERTPHOKANONT. A. I FE GILIIER1
168 Standards and Convergence: New Realities 2.2.3.1
DAVID ALLEN. JOHN GILBERT
176
181
186
191 Application Of GIS Technology To Wireless 2 2 3.5CI IANDAN W. SEERNANI
196
European Telecommunications--New Dimensions 2.2..2L. SCI MUM. F. ASK
Finding Common Ground--The Global Virtual NetworkServices Forum 2.2.33DOUG MACBETH
GSM, Intelligent Networks & Personal Communications 2234HANS DIEMEL
204
212
216
Computers and Telecommunications for Distance Education2.2.4.2R. WILLIAM MAULE
The Contribution of Distance Higher Education to NationalDevelopment in Pacific Island Countries 2.2 4.3HAYATO YAMANAKA, TOSIIIO KOBAYASHI. MICI IA111. R OGDEN
The Georgia Vocational Education Network: Training,Economic, and Technical Implications 2.2.4.4ERIC N. BARNHART
First Steps in Multimedia Telecommunications: Using ISDNfor Educational Delivery 2.2.45LINDA HARASIM
223 NTT's Four-Year ISDN Experience and the Future of Japan'sMarket 2.2.5KOICIII NOBUKUNI, 111MIIIISA IIAMBA
229
232
238
ISDN Compress Video - The Logical Next Step 2 2 5 2JOHN F. ARCHDEACON
An Evolution Strategy Toward Digitalized Inter-exchangeNetwork Structure in Seoul Metropolitan Area 2 2 s 3JE.ONG-WOOK KIM. 111:E-S00 AliN
Realization of EDI Message Transfer on an MI IS System UsingISDN z 2.s 4HARUHITO YAMAGUn IL YUKIO SAI I 0. YOSI IIKAZU TANAKA
242
245
The Wristwatch as a Personal Communications Device 2.2.5.1
1111205111 KOMATSU. RYOICIII NOROSE. STEVEN J SYMONDS
The Expansion and Liberalization of MobileTelecommunications in Korea 2.2.5.4YONG SON, SANG.CHUI. LEE, JUNEIL C. RYEE.
250 Wireless Communications and Personal Freedom 2.2.s5PI 111.IP L. SPECTOR
253 PEACESAT: A Pacific Island Users Perspective on Searchingfor a Satellite 2.2.7.1
WILLIAM COOPERMAN, DENNIS CONNORS. CI IARI ES ERAN/.
261
265
Unicorn: Moving into Asia 2.2.7.2
STEVE COI LAN
The Rise of Competing Satellite Systems and the Fall of theIntelsat Monopoly 2.2.7.3SIIIRLEY S. El inmaro, MARC BERJKA
271 WARC-92 and Low Earth Orbiting Satellites: A Case Study ofthe Process for Accommodating Spectrum Requirements ofNew Technologies 22.8.1ROBERT M. ERIEDEN
288
291
299
WARC'92 and Future Considerations 2 2 8.2RICHARD E. BUTLER
Multimedia Presentation System using ISDN 2.3.1.1YOUICHI KII1ARA. YOSIIIIIIRO SHIMAZLJ, YOSIIIIIIRO SI IIMOKAWA
"Project Lindbergh": Gateway to Public InformationNetworking 2.3.1.2SCOTT MORGAN
306 Broadband Delivery Across the Last Mile 2.3.1.4REG A. KAENEL
311 The Marketing Challenges of Telecommunication Sen, ices inThailand 2.3 2.1
PRA1T.EP Ti IRAT1
318 Maximizing Revenue for Inmarsat Signatories 2123JAMES KEMP, JACK 13121011T
323 Service Consequences: Evaluating the Role of Insurance 2.3 2 5WILLIAM I.. MAYO
325 The Roles of Copper and Fiber in the Evolution to Broadband:A Network Planning Pcrspectisc 2 3.3.1
328
334
341
THOMAS M. SUPER. EDWARD A. WALVICK
MAMI: The New Direction of Interactive TV 2.3.3.2N KC) TANI. J KISHIGAML N SAKURM, A. ISI IIKAWA
Calling All Televisions? The Convergence of the CableTelevision and Telephone Industries in the United States 2.1.11RICHARD I. GOLDBERG
Harnessing Telecommunication Technologies for EnhancingNational Competitiveness and Quality of Life: The SingaporeIT2(XX) Project 2.3.4 1
BOON stow, rim. CHRIS FINA S011
346 Propulsion for Activation of Community in the Region with PCNetworking Services 2 74 2JUNKO FUKAM11.11
352 NTT's VI&P vision 2 1 4 4
IIISA0 YAMAMOTO
357 An Implementation of Common Channel Signalling Capabilitieson TDX-1 Switching System 235SUNMOO \1. OONYOUNG HAN. YOUNGS! KIM. HANG(11.1BAIIK
364 Technology Enablers for Residential Broadband Services inToday's Loop Environment 2 15 2ROBERT W. I AWRENCE
vi
369
376
393
Frame Relay and Evolution to ATM 2.3.5 3MEI1MET S. UNSOY, KENNETH 0. HAYWARD
Enterprise Networking using Frame Relay 2 1.5.4K.S. RAM MOHAN
ATM Service Node: A Step Toward BroadbandTelecommunication Networks 235.5K. AKII3A, S. IWASAKI. H. EUCHIGAMI, K. KOU. A ARMAKI
399 Japanese Digital Cellular Telecommunication System 2.35 IMINORU TANAKA, YUJI KITAHARA
403 The Evolution of Wireless: Meeting the Mobile User's Needs2.352ERIC E. ENSOR
407 Digital Cellular Opportunities in the Pacific Region 2.351GARY CANNALTE
410 CELSATs Hybrid Personal Communications System 2304DAVID a ALBER r J MALLINCKROD r
417 International Digital TV Sen ice Via INTELSAT 2 3 7 2EDWARD A. EAINE
421 Emerging Technologies and Future Satellites 23.7.3LINDA M. RANKIN, ABDUL H. litKIIANI
425 KOREASAT Technology Development and Services 2 3 7 sIAN HWANGI30
429 Building Telecom Networks to the People's Republic of China -Infrastructure and Services The Hong Kong Gateway 2.3.8.2
FLORA TUNG
435
Tuesday, January 19, 1992 - Volume II
New Communication Technologies Applied to Services ofSocial Benefit 3.2.1.2ARTURO SE.RRANO. ENRIQUE MELROSE
439 The Imaging Advantage for Developing Countries 12 I 1DEAN JOHNSTON. JIM HAMBLIN
443 The Inequality of Equal Accounting Rates 12 2 IPETER JACKSON. JOI IN SULLIVAN
448 The Dynamics and Impact of U.S. Telecom Policy onAccounting Rates and International Simple Resale 3222ROBERT J. AAM0111
455 Knowing What to Ask For: Privatization ofTelecommunications After the Digital Revolution Guidelinesfor the Host Country 32 3.2ROBERT A.F. REISNER
462
465
472
479
486
Medical Applications Through Numeris, The French ISDN3.2.4.1CLAUDINE BIQUII 1.0N
Convergent Needs, Divergent Technology: Nursing Educationf o r Rural Practitioners 3 2 4 2
.11.. TUCKER. GAIL RAY
Multimedia Broadband Communications I lcalth-CareApplications 3.24.3KENNETH R. RAYMOND
Network Management Technology - A Par;:digni for FutureEnterprise Control 3.2.5 2
MARK %mi.. JEFF W11111.11111.
The Study of Telecommunication Network Configuration in theGreater Taipei Area 3.2.5.4SI tANFISIN 'MAO. SI IYANCIMING LIN. YEILCIIYN III R.1 [ONG I Ni,I
WANG,MIN-GUMF CI1ENG, CIIIN.CHIR SHYUR, Y1NG MING WU
492 Enterprise Networking in Asia 3.2.5.5
KEN ZITA
500 WARC'92 and the Implications for Digital Audio Broadcasting3.2.6.1RALPH ZEITOUN
506 DAB Systems for the Western Hemisphere: Satellite SystemDesigns 3.2.6.2EDWARD E. REINHART
511 Satellite CD Radio System Trades 3.2.6.4KLAUS 0. JOHANNSEN. ROBERT D. BR ISKMA N
519 United States Satellite Digital Audio Radio Service 3.2.0ROBERT D. BRISKMAN
526 Small Satellites for Mobile and Environmental DataCommunications: Effectively Solving Economic, Social andTechnological Issues 3.2.7.1
RILVIO ANANASSO
531 Economics of the New Smaller and Shorter LifetimeGeostationary Communications Satellites 32.7.2JAMES R. STUART, RANDALL E. COFFEY. JANET GLEAVE STUART
537 Export Control: Current Legal and Policy Issues AffectingSatellite and Telecommunications Ventures in the Pacific Rim3.2.7.3JILL ABEStiOUSE STERN, THOMAS E. CROCKER
544 Convergence, Universal Service and Public Policy 3.2.8.1
REIN P MERE
550
558
561
Canada Embraces Long Distance Competition 3.2.8.2LAURENCE J.E. DUNBAR
Network Interconnect in New Zealand 3.2.8.3AINSLEY VAN CUYLENBURG
Determining Optimal Supply Level of Switching Systems andLocal Cables: An Inventory Model 3.284KYU-TAEK NAM, BO -SANG LEE
565 Network Management for Users in Japan 3.3.1.1TORU TSUCHIYA
570 The Politics of Telecommunications Reform in DevelopingCountries 3.3.1.4BEN A. PETRAZZINI
581 International Telecommunications Is Shifting Paradigms: HowWill It Affect Your Business? 3.3.2.3GREGORY C. STAPLE
593 Study on the Measurement of Economic Benefits ofTelecommunication Project in the Developing Countries-Proposing New Method 3.3.24MIKI0 DANNO
600 The Software Export Industry of Developing Countries 332.5GEORGE J. LISSANDRELLO
609 Political Challenges to Globalisation of PublicTelecommunications Operators 3.3.3.3YOSIIIKO KURISAKI
615 Tips, Tricks and Techniques for Trouble-free Telework 33.4GR. E. GORDON
622 Global Teaming: Meeting the Challenge of Global Businesswith Help from Telecommunications and InformationTechnology -- and a Lot of Management Sawy! 3344PAMELA J. JOI INSON
625 Bandwidth On Demand Metered Service 3 lcPAUL A. STERN
628 Broadband Node Control Architecture for Multimedia Services3.3.5.3I MASI II MANAI3E, TATSUIBKO YAMAZAK1
VII
633 Art and Technology: Bridges to a Multicultural Society 336 IJOYCE M. GAflAS. 101IN M FA,ER
641 Social Impact of Cellular Telephone Usage in Hawan 2
DINEti M. DAVIS
649 Imparja Television Pty Ltd - Australia's Aboriginal OwnedCommercial Television Company 3 3 s 3LORRAINE. [ADDLE. JIM WILKINSON
653 Telecommunications Applications for Education and RuralDevelopment: A Comparison of the Australian Outback andthe Canadian North 3.36.4HEATHER E. HUDSON
660 The Role of Globalstar, A Satellite-Based PersonalCommunications System in the Wireless Revolution 33.7ROBERT A. WIEDEMAN
665 TAOS, a Ncw Low-Cost Mobile-User LEO Satellite Networkfor Positioning and Messaging 3.3.7.3J. J. BLOCI I
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675
Wednesday, January 20, 1993
Telephone Development Project for the Valle Del Cauca StateColombia S.A. 4.1.1.1FERNANDO GARCF-S LLOREDA
Personal Communication Services -- Now That I can HaveThem, Why Do I Really Want Them? And Thoughts on theFuture of PCS in the Marketplace 4.2.1.1BRAD BAXTER
681 Competition for Electronic Superhighways in the Pacific 42 13E. JEAN BISHOP
690 The Market for Multimedia Distance Education for CorporateTraining in Japan-US Business and the Management ofInformation Technology 4.2.1.4LARRY R. CROSS
695 New Directions in Asian Telecommunications IIRussia'sReach for Global Impact -- Integration or Devolution? 4.2 2.1STEVEN A. LEVY. DEIRDRE BUELL
700
709 Developing Strategies for Pacific Communications 42.23JOHN H. ERBETTA
715
Visions of the Information Age - 2021 AD 42.2.2ROBERT M. JANOWIAK, JAGDISII N. SliETH
Is Multimedia Ready for Primetime? Stumbling Blocks toMultimedia Diffusion 4.2.2.4GWANG-JUB HAN, JONG-DUCK JUNG
728 PECC Triple-T Port (Telcport) for Developing EconomiesSecond Phase Report -- Case Studies 4 225Kf.N11 SAGA
736 Video Dialtone Access to Multimedia 4 2 31AC HARIUSON.SURGEON
745 Telecommunications and Computer Industries Collaboration4.2.32CAROL. BURKE, JOAN KELLY
753 Converging Telecommunications Technologies: Challenge,Facing Government and Regulators in Australia and NewZealand 4.2 1 3RIC. 'ARO A. JOSEPH
760 Harnessing Convergence for Development: Ind4,trial Policyand IT Development in Australia 4234JOHN W. tiotRilrroN
768 High Definition Television: The Key To Multimedia andBroadband Networks 4.2.4.1DENNIS W. ELLIOTT
772 The Current Status and Future Prospects of KDD'sInternational ISDN Service with the Focus on TypicalApplication Examples 42.4.2SYUJI KANAZAWA
785 Telco Vision: Delivering Distance Education 4 2.4.3PAUL KUIIAR, EDWIN J. SHIMIZU
791
797
801
805
High Reliability LAN With New RAS Functions 4.2.4.4TAKAAK1 SUGA
The Customer in Product Development: A MarketingPerspecitive 4.2.5.5NOELLA GORDON
The Technology-Human Factor Relationship 4.2.6.tDONALD M. LAMBERTON
The Human Impact of Converging Communication
Technologies: Entertainmentisation, Social Change andSaturation 4.2.6.3GREG HEARN
813 The Impact of the New Services of Telecommunications in
Developing Countries 4.2.6.4MIGUEL C. DE LA SOTTA
819 The Telephone in Daily Life: A Study of Personal TelephoneUse in the United States 4.2.6.5
ROBERT LAROSE.. HERBERT DORD1CK
826 Is the World Ready for the Go-anywhere Telephone? 4.2.7.1ALAN BRUNSTROM
835 INMARSAT-M Portable MES 4.2.7.2RAM SUBRAMANIAM, AK/HIRO ISHIDF, NOI3LIIIIRO tNDO, COLIN
SMITH
841
850
854
860
866
874
Bridging The Gap 4.2.7.3J.C. BELL.
Dial M for Service 4.27.4EDWARD R. SLACK
Telecommunications Infrastructure-Is it a Catalyst for Growthin Malaysia? 4 2.8.1OMAR CHARLES ABDULLAH
Communications in the Russian Far East 4.28.2CI !LICK SCIIUMANN. GEORGE SAPOV
Utilization of Developing Country Resources for Research andDevelopment Related to Telecommunication Products andSystems 4 2.8.3ADVN Ki IIARATNA. SIIANTI IA FIANANDO. M KAI.YANAPALA.PARAKIIM ERNANDO
The Political Economy of Deregulating Telecommunications inHong Kong 4 2.8 4PAUL S.N. LEE
886 New "Have-Nots's" and the Old Problems? How the EastEuropean Countries and the Republics of the Former SovietUnion Integrate into the World Communication Order 4wOLFGANG RI TINWACI Hut
893
902
Creating Tomorrow's Telecommunications Infrastructures:Cultural Needs and Economic Realities 4.3.1.3JOE. ARDEN FLICKINGER
Converging Telecommunications Technologies, Economy, andBusiness Efficiency 4.3 t 4RONALD P 11111 IC,. 1111.1. J01.1.
906 The Telcos Move Toward a Global Market: Economic andCultural Implications for the Pacific Islands Nations 4.3.1.5RONNIE G. BANKSTON
913 The Challenge of Transferring a State of the Art
Telecommunication System Manufacturing Technology 4.3.2.4GEORGES KREBS
917 Caller ID and Privacy: New Options 4.3.3.1PETER 13. WHITE
922 Software Patents, Ownership And Infringement Crimes: New
Developments 4.3.3.2STEPHEN GLAZIER
929 Managing the Privacy Implications of New Technology 4.3.3.3
BRIAN G. MILTON
934 The Personal Data Protection Regime Emerging in Korea4.3.3.4JISUK WOO
943 Building Successful Distance Learning Networks 4 3 4.1JOHN MALIONEY, RICHARD BESSEY
947 Creating an ISDN Distance Education Network 4.3.4.2BETTY MITCHELL, DEB REIDI.INGER
953 Multi-cultural Issues in the Delivery of Distance Education4.3.4.4BARRY WILLIS
957 Academic Internetworking in Mexico -- The world at the reachof a keyboard 4.3.5.1MARIO M. ARREOLA-SANTANDER
961
969
975
981
988
998
1005
1012
1017
1026
The HI-NEST Model: An International Computer Network forSupport of Program Implementation 4.3.5.2D. B. YOUNG. M. GULLICKSONMOREITT, J. H SOUTHWORTH
A System Architecture for Ideographic Language Support4.3.5.3ANDREW PAN. JAMES BARNES. ROEN 110C,G
Architectural Consideration in the Design of Network BasedEducational Systems (NBES) 4.3.5.4S.V. AHAMED, V.B. LAWRENCE
Anticipating and Estimating Adoption and Resistance ofInteractive Instructional Technology: A Look at Multimedia inHigher Education 4.3.6.1
LOUIS LEUNG
Development and Telecommunications Technology in PacificIsland Microstates 4.36.2MICHAEL R. OGDEN
Assessing Videotex Diffusion and Usage Patterns in a
Manufacturing Organization: A Case Study 43.6_3MICHEL G. ELASMAR
An Empirical Investication of Telex Data as a Useful Predictorof Socioeconomic Development Among Less DevelopedCountries 4.3.6.4MEREDITH stitriTLEwoRmi GLENN
Framing Our Common Future: Strategies for PromotingCooperation Among Stakeholders 4 365ANGEL INA T WONG
VSAT Solutions for Innovative International and DomesticServices 4.3.7.1
SYNGAI.
VSAT's - An Efficient Option for Voice and Data Networking4.3.7.2CAROL. A. POLM
1032 VSAT in Local Administration Communication Network 4.3.7.6H. NODA, Y. ONDA, T. KIKUTA
1039 Television in Papua New Guinea: Policies and Practice 4.3.8.1AMOS OWENARES THOMAS
1049 Global Telecommunications Development - Market Forces orMulti-Lateral Planning? 4.4.1.1CHRIS C. VONWILLER
1053 Technology Transfer in the Asia Pacific Region 4.4.1.2SETYANTO SANTOSA
1060 Cooperation Tasks of Telecommunications in the Asia-PacificRegion 4.4.1.3SHIN YUN-SIK
ix
SUBJECT INDEX Convergence 2.2.3.1.2.3.3.3.2.3.4.4.
Accounting Rates/cariffs 3.2.2.1. 3.2.1.1.
3.2.2.2. 3.2.8.1.
3.2.2.3. 4.2.1.2.4.2.1.3.
Alliances 2.2.1.2. 4.2.3.1.
2.3.3.4. 4.2.3.2.4.2.3.4.
Area Networks (LAN/WAN) 2.3.1.2. 4.2.6.1.
2.3.4.4. 4.2.6.3.
2.3.5.3. 4.2.8.3.
3.2.5.1. 4.3.1.4.
3.2.5.3.4.2.4.4. Copyright & Intellectual Property 3.3.1.2.
4.3.3.1.
E,roadband Applications 2.3.1.4. 4.3.3.2.
2.3.3.1. 4.3.3.3.
2.3.4.4. 4.3.3.4.
3.2.4.1.3.2.4.3. Data Communications 2.2.2.2.
3.3.5.1. 2.3.1.4.
3.3.5.3. 3.2.7.1.4.2.1.2. 4.3.5.4.4.2.1.3. 4.3.7.2.4.2.4.3. 4.4.1.3.4.2.4.4.4.3.5.2. DeveIc dment Issues 2.2.2.4.
2.3.2.1.
Broadabting Applications 2.2.8.2. 2.3.2.2.2.3.1.4. 2.3.7.4.2.3.7.2. 2.3.7.5.
3.2.6.1. 2.3.8.2.3.2.6.2. 3.2.1.2.3.2.6.4. 3.2.3.3.
3.2.6.5. 3.3.1.4.
3.3.6.3. 3.3.2.4.
3.3.6.4. 3.3.2.5.
4.2.4.1. 3.3.6.3.
4.2.6.3. 3.3.6.4.
4.3.8.1. 4.2.2.1.4.2.2.3.
Cable Television 2.3.3.3 4.2.6.1.
2.3.3.3. 4.2.6.4.
3.2.1.4. 4.2.8.1.4.2.8.2.
Caller ID 3.3.1.2. 4.2.8.3.
4.3.3.1. 4.3.1.1.4.3.1.2.
Cellular 2.2.6.4. 4.3.1.4.
2.3.6.1. 4.3.6.2.
2.3.6.4. 4.3.6.4.
3.3.6.2. 4.3.8.2.
4.2.6.4. 4.4.1.1.4.4.1.3.
Compctition/Privatiiation 2.2.6.4.2.2.7.3.
Digital Audio Broadcasting 3.2.6.1.3.2.6.2.
2.3.2.1. 3.2.6.3.
3.2.3.1. 3.2.6.4.
3.2.3.2. 3.2.6.5.
3.3.1.4.3.3.2.3. Distance Education 2.2.4.2.
3 3.5.1. 2.2.4.3.
3.3.5.3. 2.2.4.4.
4.2.3.3. 3.2.4.1.
4.2.3.4. 3.2.4.2.
4.2.8.1. 3.3.4.3.
4.3.1.1 3.3.6.1.
4.3.8.2. 3.3.6.3.3.3.6.4.
4.2.1.4. 2.3.1.1.
4.2.4.3. 2.3.1.4.
4.3.4.1. 2.3.4.1.
4.3.4.2. 2.3.4.2.
4.3.4.4. 2.3.5.2.
4.3.5.2. 3.2.4.3.
4.3.5.4. 3.2.8.1.
4.3.6.1. 3.3.5.3.
4.3.6.5. 4.2.1.2.4.2.2.4.
EDI 2.2.5.4. 4.2.6.1.
2.3.4.1. 4.2.6.2.4.2.8.3.
Enterprise Networks 2.3.5.4. 4.3.6.1.
3.2.5.2. 4.3.7.6.
3.2.5.5.4.3.5.1. Networks 2.2.3.3.
Foreign Investment 3.2.2.4. 2.2.4.2.
3.3.2.3. 2.2.5.3.2.3.1.2.2.3.2.1.2.3.3.4.
Frequency Management 2.2.1.3. 2.3.4.1.
4.2.4.1. 2.3.4.2.2.3.4.4.
GSM 2.2.3.4. 2.3.5.1.2.3.5.2.
Health Care Applications 3.2.4.1. 2.3.5.3.
3.2.4.3. 2.3.5.4.2.3.7.3.
HDTV 2.2.8.2. 2.3.8.2.
4.2.4.1. 3.2.5.1.3.2.5.2.
Ideographic Language 4.3.5.3. 3.2.5.4.3.2.5.5.
Imaging 3.2.1.3. 3.2.8.4.3.3.1.1.
INMARSAT 2.3.2.3. 3.3.2.2.4.2.7.1. 3.3.2.3.
4.2.7.2. 3.3.5.2.4.2.7.3. 3.3.5.3.
4.2.7.4. 3.3.7.2.4.2.1.3.
INTELSAT 2.2.7.3. 4.2.2.1.
2.2.7.5. 4.2.2.2.2.3.7.2. 4.2.3.4.
4.2.8.2.
ITU 2.2.8.1. 4.2.8.4.2.2.8.2. 4.3.5.1.3.2.6.1. 4.3.5.4.
ISDN 2.2.1.2. Network Management 3.3.1.1.2.2.4.5. 4.2.6.5.2.2.5.1. 4.3.2.2.2.2.5.4. Outsourcing 3.3.1.1.2.3.1.1.2.3.1.2. PCS 2.2.6.1.
4.2.4.2. 2.2.6.3.
4.2.6.5. 2.2.6.5.
4.3.4.2. 2.3.4.4.2.3.6.2.
LEO Satellites 2.2.8.2. 4.2.1.1.
3.2.7.1.3.3.7.1. Policy Issues 2.3.2.1.
3.3.7.2. 2.3.2.2.
3.3.7.3. 2.3.3.3.
3.3.7.4. 2.3.4.1.3.2.1.1.
Multimedia 2.2.1.3. 3.2.2.3.
2.2.3.1. 3.2.2.4.
2.2.4.3. 3.2.1.2.
3.2.8.1.3.2.8.2.3.2.8.3.
2.2.7.4.2.3.6.4.
3.3.1.4. Satellite Insurance 2.3.2.3.
3.3.2.3.3.3.8.3. Satellite, LEO (see LEO Satellites)4.2.2.24.2.2.3. Socio-Cultural Issues 2.3.1.3.
4.2.3.1. 2.3.2.2.
4.2.3.3. 3.2.4.3.
4.2.3.4. 3.3.1.4.
4.2.4.3. 3.3.2.3.
4.2.6.1. 3.3.3.3.
4.2.8.1. 3.3.6.1.
4.2.8.4. 3.3.6.4.4.3.1.1. 3.3.6.6.
4.3.6.2. 4.2.2.4.4.2.3.3.
Rgulatory Issues 2.2.2.3. 4.2.4.3.
2.2.3.2. 4.2.6.1.
2.3.3.3. 4.2.6.3.
3.2.1.1. 4.2.6.4.
3.2.2.1. 4.2.6.5.
3.2.3.2. 4.3.1.3.
3.2.7.3. 4.3.4.4.
3.2.8.2. 4.3.6.2.
3.2.8.3. 4.3.6.4.
3.3 1.4. 4.4.1.3.
3.3.2.3.3.3.3.3. SONET 2.3.1.2
4.2.2.2.4.2.3.1.4.2.3.3. Standards 2.2.2.2.
4.2.3.4. 2.2.3.1.
4.2.4.3. 2.2.3.2.
4.2.8.1.4.2.8.2. Submarine Cables 4.2.5.5.4.2.8.4. 4.3.2.4.4.3.1.1.4.3.1.5. Technology Transfer 2.2.2.4.4.4.1.2. 4.2.1.3.
4.2.6.1.
Satellites 2.2.6.2. 4.2.6.4.2.2.7.1. 4.2.8.3.2.2.7.2. 4.3.6.2.2.2.7.3.2.2.7.4. Teleports 4.2.2.5.2.2.7.5.2.2.8.2. Telework 3.3.4.1.2.3.2.3. 3.3.4.4.2.3.2.5.2.3.6.4. Tourism/Travel Industry Telecoms 4.2.2.5.2.3.7.2.2.3.7.3. Trade Issues 2.2.2.3.2.3.7.5. 3.2.2.2.3.2.1.4. 3.2.7.3.3.2.6.2. 3.3.2.5.3.2.6.4. 4.3.5.1.3.2.6.5.3.2.7.1. Training/Human Resource Development 2.2.4.1.3.2.7.2. 2.2.4.4.3.3.5.1. 3.3.6.5.3.3.7.1. 4.2.8.3.3.3.7.3. 4.4.1.3.4.2.7.1.4.2.7.2. Vtdcoconfercncingircleconferencing 2.2. 1.1.4.2.7.3. 2.2.5.2.4.2.7.4. 3.3.4.1.4 3.7.6. 3.3.4.3.
3.3.4.4.Satellites, Competitive Systems 2.2.7.2. 3.3.6.1.
2.2.7.3. 4.3.4.2.
Video Technologies 2.2.8.2.2.3.1.4.3.2.1.4.4.2.3.1.4.2.4.1.4.3. I .5.4.3.4.2.4.3.8.1.
Videotext 4.3.6.3.
Virtual Reality 2.3.1.3.
Virtual Networks 2.2.3.3.
VSATs 2.2.1.5.4.3.7.1.4.3.7.2.4.3.7.6.
WARC (see ITU)
Wireless Applications 2.2.6.1.2.2.6.2.2.2.6.3.2.2.6.4.2.2.6.5.2.3.1.4.2.3.6.3.3.3.6.2.3.3.6.4.4.2.6.4.
COUNTRY & REGION INDEX
NB: An asterisk (') indicates that a country profile is provided. Other entries concern the country or region
%ith regard to individual projects or within the context of a comparative analysis.
Argentina 3.3.1.4. Latin America 3.3.1.4.4.3.5.1.
Australia 3.3.1.3. 4.3.8.2.
3.3.6.3.3.3.6.4. Malaysia 3.2.3.3.
4.2.3.3.' 3.2.5.5.
4.2.3.4.' 3.3.1.4.
4.2.6.3.* 4.2.8.1.'
4.3.2.4.4.4.1.1. Mexico 3.3.1.4.
4.3.5.1.
Canada 2.2.4.5.3.2.2.2. New Zealand 3.2.8.3.*
3.2.2.4. 4.3.2.4.
3.2.3.4.*3.2.8.2.' Pacific Islands 2.2.7.1.
3.3.6.2. 4.2.7.4.
3.3.6.4. 4.3.1.5.
4.3.3.3.' 4.3.6.2.'
4.3.4.2.4.3.6.5. Papua New Guinea 4.3.8.1.'
Chile 4.3.8.2.* Philippines 2.2.2.1
China PRC 2.3.8.2.3.3.2.2. Russia 4.2.2.1."
4.2.8.2.'
Colombia 4.1.1.2. 4.3.1.1.
Europe (EC) 2.2.3.2. Singapore 2.3.4.1.'
3.3.1.2. 3.2.3.3.
4.3.1.1.4.3.2.4. Taiwan 2.1.1.1.
3.2.5.4.
France 3.2.4.1.Thailand 2.2.2.1.
Fiji 2.2.4.3. 2.3.2.1.'3.2.3.3.
Hong Kong 2.3.8.2. 3.2.5.5.3.3.1.4.
Indonesia 3.2.3.3. United Kingdom 3.2.2.2.
3.2.5.5.United States of America 2.2.4.4.
Japan 2.2.1.1. 2.3.3.3.
2.2.4.3. 2.3.6.2.
2.2.5.1. 2.3.6.4.
2.2.5.4. 3.2.2.2.
2.3.4.2. 3.2.4.2.
2.3.4.4. 3.2.4.3.
2.3.6.1. 3.2.6.2.
3.3.1.1.' 3.2.6.5.
3.3.5.2. 3.2.7.3.
4.2.4.4. 4.2.2.2.
4.3.2.3. 4.2.2.4.
4.3.7.6. 4.2.4.3.4.3.1.5.*
Korea ROK 2.2.5.3. 4.3.4.1.
2.2.6.4. 4.3.5.2.
2.3.5.1. 4.3.6.3.
2.3.7.5.'3.2.8.4.'4.3.14.
x i v
AUTHOR INDEX
Aamoth, RJ 3.2.2.2. Gilbert, J 2.2.3.1.
Abdullah, OC 4.2.8.1. Glazier, SC 4.3.3.2.
Aim, Hee Soo 2.2.5.3. Glenn, MS 4.3.6.4.
Ahamed, SV 4.3.5.4. Goldberg, R 2.3.3.3.
Akiba, KG 2.3.5.5. Gordon, GE 3.3.4.1.
Allen, D 2.2.3.1. Gordon, N 4.2.5.5.
Ananasso, F 3.2.7.1. Gullickson-Morfitt, M 4.3.5.2.
Arakaki, T 2.2.1.1.Archdeacon, JF 2.2.5.2. Hamblin, J 3.2.1.3.
Arreola S., MM 4.3.5.1. Han, Gwang JubArutaki, A 2.3.5.5. Han, Woon Young 2.3.5.1.
Ask, F 2.2.3.2. Harasim, L 2.2.4.5.
Harrison-Surgeon, AC 4.2.3.1.
Bahk, H 2.3.5.1. Hayward, KG 2.3.5.3.
Bamba, F 2.2.5.1. Hearn, G 4.2.6.3.
Bankston, R 4.3.1.5. Her, Yeh Chyn 2.3.5.4.
Baxter, B 4.2.1.1. Hiraga, MK 3.3.4.3.
Barnhart, EN 2.2.4.4. Hogg, R 4.3.5.3.
Bell, JC 4.2.7.3. Houghton, J 4.2.3.4.
Berejka, M 2.2.7.3. Hudson, HE 3.3.6.4.
Bessey, R 4.3.4.1. Hwangbo, H 2.3.7.5.
Biquillon, C 3.2.4.1.
Bishop, EJ 4.2.1.3. Ishida, T 2.2.1.1.
Bloch, J-J 3.3.7.3. Ishide, A 4.2.7.2.
Briskman, RD 3.2.6.4. Iwasaki, S 2.3.5.5.
Briskman, RD 3.2.6.5.Brunstrom, A 4.2.7.1. Jackson, P 3.2.2.1.
Burke, C 4.2.3.2. Janowiak, RM 4.2.2.2.
Butler, RE 2.2.8.2. Johannsen, KG 3.2.6.4.Johnson, PJ 3.3.4.4.
Cannaltc, G 2.3.6.3. Johnston, D 3.2.1.3.
Cheng, Min Gume 3.2.5.4. Joll, B 4.3.1.4.
Chung, HMM 2.2.2.2. Joseph, RA 4.2.3.3.
Collin, S 2.2.7.2. Jung, Jong Duck 4.2.2.4.
Connors, D 2.2.7.1. Jussawalla, M 2.2.2.1.
Cooperman, W 2.2.7.1. Kaencl, RA 2.3.1.4.
Crocker, T 3.2.7.3. Kalyanapala, M 4.2.8.3.
Cross, LR 4.2.1.4. Kanazawa, S 4.2.4.2.
Kang, S 2.3.5.1.
Danno, M 3.3.2.4. Kelly, J 4.2.3.2
Davis, DM 3.3.6.2. Kemp, J 2.3.2.3.
De La Sotta, MC 4.2.6.4. Kenmoku, E 2.2.1.1.
Diemel, H 2.2.3.4. Kihara, Y 2.3.1.1.
Dordick, H 4.2.6.5. Kikuta, T 4.3.7.6.
Dunbar, LJE 3.2.8.2. Kim, Jeong Wook 2.2.5.3.
Kim, Young Si 2.3.5.1.
Eger, JM 3.3.6.1. Kitahara, Y 2.3.6.1.
Elasmar, MG 4.3.6.3. Klicnwachter, W 4.3.1.1.
Elliott, DW 4.2.4.1. Kobayashi, T 2.2.4.3.
Endo, N 4.2.7.2. Komatsu, H 2.2.6.1.
Ensor, EF 2.3.6.2. Kou, K 2.3.5.5.
Erbetta, JH 4.2.2.3. Krebs, G 4.3.2.4.Krommenackcr, R 2.2.2.3.
Faine, EA 2.3.7.2. Kuhar, P 4.2.4.3.
Fernando, P 4.2.8.3. Kularatna, ADVN 4.2.8.3.
Fernando, S 4.2.8.3. Kurisaki, Y 3.3.3.3.
Flickinger, JA 4.3.1.3.
Franz, C 2./7.1. Lakhani, AH 2.3.7.3.
Frieden, RF 2.2.8.1. Lamberton, DM 4.2.6.1.
Fuchigami, N 2.3.5.5. Larose, R 4.2.6.5.
Fukamizu, J 2.3.4.2. Lawrence, RW 2.3.5.2.
Fujii, V 3.3.4.3. Lawrence, VB 4.3.5.5.
Fujimori, T 3.3.5.2. Lee, Bo Sang 3.2.8.4.
Fujimoto, SS 2.2.7.3. Lee, PSN 4.2.8.4.Lcc, Sang Chul 2.2.6.4.
Garces L., F 4.1.1.2. Lertphokanont, R 2.2.2.4.
Gattas, JM 3.3.6.1. Leung, L 4.3.6.1.
Gilbert. AL 2.2.2.4. Levy, S 4.2.2.1.
XV
Liddle, L 3.3.6.3. Super, TM 2.3.3.1.
Lin, Shyang Ming 3.2.5.4. Symonds, S 2.2.6.1.
Lissa nd rello, 0 Syngal, BK 4.3.7.1.
Lofstrom, MD 2.2.2.1. Tan, TE 2.2.2.2.
Long, B 2.3.1.3. Tanaka, M 2.3.6.1.
Thirati, P 2.3.1.2.
Macbeth, J 2.2.3.3. Thomas, AO 4.3.8.1.
Mahoney, J 4.3.4.1. Tsao, Shan Hsin 3.2.5.4.
Mallinckrodt, AJ 2.3.6.4. Tsuchiya, T 3.3.1.1.
Manabe, H 3.3.5.3. Tucker, JL 3.2.4.2.
Mau le, RW 2.2.4.2. Tung, F 2.3.8.2.
Mayo. WL 2.3.2.5.
Melrose, E 3.2.1.2. Uhlig, RP 4.3.1.4.
Mere, RP 3.2.8.1. Unsoy, M 2.3.5.3.
Milton, BG 4.3.3.3.
Mitchell, B 4.3.4.2. Van Cuylenburg, A 3.2.8.3.
Miyoshi, K 2.2.1.5. Vonwiller, CC 4.4.1.1.
Mohan, KSR 2.3.5.4.
Molyneaux, J 3.2.1.5. Walvick, EA 2.3.3.2.
i4organ, S 2.3.1.2. Wang, Hong Ling 3.2.5.4.
Nam, Kyu Tack 3.2.8.4.White, PB 4.3.3.1.
Neo, BS 2.3.4.1. Wiedeman, R 3.3.7.1.
Nobukuni, K 2.2.5.1. Wilkinson, J 3.3.6.3.
Noda, H 4.3.7.6. Willis, B 4.3.4.4.
Norose, R 2.2.6.1. Wong, AT 4.3.6.5.
Nowicki, JA 2.2.1.2. Woo, J 4.3.3.4.
Wu, Ying Ming 3.2.5.4.
Ogden, MR 2.2.4.3.
Ogden, MR 4.3.6.2. Yamaguchi, H 2.2.5.4.
Onda, Y 4.3.7.6. Yamamoto, H 2.3.4.4.
Often. D 2.3.6.4.Yamanaka, H 2.2.4.3.
Yamazaki, T 3.3.5.3.
Pan, A 4.3.5.3.Young, DB 4.3.5.2.
Petrazzini, BA 3.3.1.4.
Politi, CA 4.3.7.2. Zita, K 3.2.5.5.
Zitter, RM 3.2.1.4.
Rankin, LM 2.3.7.3.
Ray, G 3.2.4.2.
Raymond, KR 3.2.4.3.
Reid linger, D 4.3.4.2.
Reinhart, E 3.2.6.2.
Reisner, RF 3.2.3.2.
Rogers, DT 2.2.1.2.
Ryce, JC 2.2.6.4.
Saga, K 4.2.2.5.
Santosa, SP 4.4.1.2.
Sapov, G 4.2.8.2.
Sawai, M 2.2.1.1.
Schnurr, L 2.2.3.2.
Schumann, C 4.2.8.2.
Serrano, A 3.2.1.2.
Shcth, JN 4.2.2.2.
Shimazu, Y 2.3.1.1.
Shimizu, EJ 4.2.4.3.
Shimokawa, Y 2.3.1.1.
Shin, Yun-sik 4.4.1.3.
Shyur, Chin Chir 3.2.5.4.
Slack, ER 4.2.7.4.
Smith, C 4.2.7.2.
Soh, C 2.3.4.1.
Son, Yong 2.2.6.4.
Southworth, ill 4.3.5.2.
Spector, P 2.2.6.5.
Staple, GC 3.3.2.3.
Stern, JA 3.2.7.3.
Stern. PA 3.3.5.1.
Subramaniam, RSuga, T 4.2.4.4
Sullivan, J 3.2.2.1.
TUESDAY, January 19, 1993
Morning Plenary
NOTES
466
NEW COMMUNICATION TECHNOLOGIESAPPLIED TO SERVICES OF SOCIAL BENEFIT
Arturo Serrano *, Enrique Melrose*** Consultant, ** Director of ResearchMEXICAN INSTITUTE OF COMMUNICATIONSAv. de las Telecomunicaciones s/n
Col. Leyes de Reforma09310 MEXICO, D.F.
1. ABSTRACT
The implementation of Telecommunications services in rural,suburban or underprivileged areas has been a challenge indeveloping countries, but also in countries with a greater
financial and material infrastructure.
The obstacles faced by developing countries in order toprovide minimum communications services for their populations'situation has created a great disparity between the people whocurrently enjoy the benefits of communications and those that donot. This disparity has become accentuated in some nations due
to the social and demographic conditions (1) (2).
This project supported by the Organization of American States(Project No. MEC07328) hopes to establish a new focus in the
implementation and operation of communication services in rural,suburban and underprivileged areas, applying creative conceptswhich differ markedly from the traditional concept of ruralcommunications. This concept simply consists in applying a
methodology which would permit the utilization of newtechnologies to the advantage of the rural population, therebyhaving an impact on bettering the quality of life at the short,
medium and long term.
2. INTRODUCTION
The methodology developed for the projectwill include strategies and lines of ac-tion of an international character sothat the results of the project as wellas the experience gained could be imple-mented in different countries with thenecessary local adaptations.
STRATEGIES AND LINES OF ACTION
FOR THE PROJECT
(DIAGNOSTICS OF PRESENT
CONDi f ION OF RURAL
SOCIAL INTEREST AREASCOMMUNICATIONS IN
- _
CASE STUDY:
MEXICO
// OBJECTIVE: \/ APPLICATION OF THE
METHODOLOGY TO
IMPLEMENT
TECHNOLOG r IN SOCIAL/\ INTEREST AREAS /
STATES:
SONORA, GUERRERO AND VERACRUZ
Figure 1
435
The concept used in this project to provide telecommunications services in socialinterest areas does not consist only ofinstalling a telephone in a particulartown, but those communications servicesthat could be necessary to stimulate edu-cation and development or to sol,,e a ba-sic problem of health, security or procu-rement of food supply (3).
SOCIAL INTEREST AREAS- RURAL AREAS- SUBURBAN AREAS- EXTREME POVERTY AREAS- ETHNIC AREAS- REMOTE AREAS WITH DIFFICULT ACCESS
Figure 2
AREAS OF IMPACT OF NEWCOMMUNICATIONS TECHNOLOGIES
- AGRICULTURE- EDUCATION- HEALTH- TOURISM- ENVIRONMENT- PROTECTION FROM NATURAL DISASTERS- METHEOROLOGY- SECURITY SERVICES
.. 1
Figure 3
One of the factors that will enrich thedevelopment of the project is the participation of the population which will be onthe receiving end of the services. Thecommunities will play an important rolein defining the project's applications.In this way, from the very beginning ofthe implementation process of the communications infrastructure, the individuals'nd community involved in receiving theresults of the project, develop a senseof commitment and an awareness of the utilitarian nature of the installed system.This process contributes to the bettermentof the maintenance services as well as toappropriate care being taken in the han-dling of the installed equipment.
The new telecommunications technologieswhich will have a global impact duringthe nineties as well as potential applications for rural, suburban or underprivi-leged areas that have been considered inthis project are:
NEW TECHNOLOGIES CONSIDEREDIN THIS PROJECT
DIGITAL MICROWAVE
- DIGITAL RAM
FIBER OPTICS SYSTEMS
VSAT SYSTEMS
MOBILE SATELLITE SYSTEMS
SPREAD SPECTRUM SYSTEMS
CELLULAR SYSTEMS
Figure 4
3. DESCRIPTION OF THE METHODOLOGY
The vision for the development of thisProject consists in the application ofnew communications technologies to impro-ve the quality of life of the population.Then the goal of the project is not thefechnology itself, but the applicationof a methodology that makes better useand planning of the material, human andfinancial resources available for the pepple of the villages or suburban areas andfor the providers of systems and telecom-munications administrations.
436
APPLICATION OF NEW TECHNOLOGIESIN SOCIAL INTEREST AREAS
METHODOLOGY:
VISION :RURAL COMMUNICATIONSDIAGNOSTICS CONTRIBUTION OF
APPLICATION OF NEWCOMMUNICATIONS
TELECOMMUNICATIONS 1 TECHONOLOGIES :
TECHNOLOGIESIMPROVEMENT OF QUALITY
OF LIFE:COST OF NEW
TECHNOLOGIES- EDUCATION
- HEALTH
- AGRICULTURE
RURAL COMMUNICATIONS - OTHER SOCIAL AND
INTEGRATED CENTER ECONOMIC ACTIVITIES
CICOR- . _ _
Figure 5
The methodology to provide telecommunica-tions services in social interest areasis divided in two basic blocks or seg-ments. The first block consists of a da-ta base information tool that includessocio-economic, geographical and infras-tructure information of the populationsto be served. The second block mazes useof this data base to generate technologycost information by means of decisiontrees that consid r weighting factors toobtain initial investment cost,added services costs, maintenance costand other costs that are fundamental toinstall and operate the communicationsinfrastructure in base of point to pointlinks from the objective site to the in-terconnect point to the national telepho-ne network.
The final result of the methodology con-sists of the configuration of an entitydefined as the RURAL COMMUNICATIONS INTE-GRATED CENTER (CICOR in spanish) wherethe communications infrastructure will belocated and operated.
New technologies have the capacity to provide digital services that can offer voi-ce and data channels that can at the sametime expand to value added services thatwould be implemented according to the po-litical, socio-economic and cultural cha-racteristics of the towns. These valueadded services are integrated in theCICOR as described in figures 7 and 8 anda description of the cost analysis pro-cess is described in figure 9.
DESCRIPTION OF THE METODOLOGYr--RURAL COMMUNICATIONS DIAGNOSTICS
(Population less than 5000)
COSTS OF NEWTECHONOLOG I ES
----J
EDEFINITION OF SITES
1--- 1 INFRASTRUCTURE1 SOCIO r-ECONOMIC GEOGRAPHICAL i
I FACTORS _JI FACTORS FACTORS
Ne 1
./"--'
/I DEFINITION OF 1 I
SERVICES 1
1 1
1 I
V._ NIIK
I.-COST TO IMPLEMENT NEW
I
TELECOMMUNICATIONSTECHNOLOGIES IN SOCIAL INTEREST AREAS
1 CHARACTERISTICS .
OF NEW1 TECHNOLOGIES
FINALRESULT:
SERVICES
-4-CONFIGURATION OF THE
RURAL COMMUNICATIONSINTEGRATED CENTER
CICOR
NEW TECHNOLOGIESCELLULAR SYSTEMS
DIGITAL RAM
VSAT SYSTEMS
MOBILE SATELLITE
SPREAD SPECTRUM SYSTEMS
FIBER OPTICS SYSTEMS
DIGITAL MICROWAVE
VALUE ADDED SERVICES:
ELECTRONIC MAILFACSIMILETELETEXTUNIDIRECTIONAL VIDEO & DATA
Figure 7
Figure 6
437
SERVICES OF THE RURAL COMMUNICATIONSINTEGRATED CENTER
ELECTRONIC
TELETEX
RURALCOMMUNICATIONS
INTEGRATED CENTER
CICOR
EDUCATIONAL T.V.
AND DATABROADCAST
Figure 8
OTHER VALUEADDED SERVICES
FACSIMILE
- - VALUE ADDEDSERMES
OPERATIONAL DIAGRAM TO OBTAINCOSTS OF NEW TECHNOLOGIES
TECHNOLOGY
PROVIDERS
Pilot Projects
in selected
communities
4
NEW
TECHNOLOGIES 1414.
rCOST OF NEW
TECHNOLOGIES
Socio-economicgeographical and '--0.-
infrastructureinformation
4. CONCLUSIONS
Cost analysis ofnew technologies
in the selectedcommunities ofthe pilot projects
Figure 9
SERVICES
Display and
printing of
cost analysis
The application of new technologies toprovide telecommunications services insocial interest areas opens the door tostructure and develop rural communicationsintegrated centers (CICOR's) in wich adiversity of services can be offered andnew schemes of financing and operation canbe applied in order to create new formulasin the process of implementing sustaina-ble development of emerging communities insearch of improving their quality of life.
In synthesis, the present socio-economiccondition of underprivileged people requires the integration of remote, isolated,poor, or socially marginated nucleus toovercome the disparities in the access ofinformation and services. The lack ofcommunications infrastructure has an important cost in itself, that is why strate-gies and proposals like the one presentedin this article are necessary to contri-bute to the betterment of the human deve-lopment index of the afflicted populationsof the world.
It is important to reiterate the idea ofextrapolating the concepts used in thismethodology to other areas in the Ameri-cas with the necessary local adaptations.The lack of a methodology that focuses onhuman objectives more than in the use ofnew information technologies, have createdmisunderstanding and confussion and lostof financial and material resources in many instances.
We hope that the ideas proposed in thisarticle will contribute to a better plan-ning and implementation of those necessa-ry communications services that the popu-lation requires. In this respect, themethodology presented constitutes also adecision making tool for communicationsauthorities and operators to develop strategies and lines of action with emphasison the communities' needs and not justonly on the return of investment or othereconomic and technical aspects.
5. REFERENCES
1). Jean-Claude Delorme, "integrating theWorld through Communications", Proce-edings of the IEEE International Con-ference on Communications, Toronto,June 1986.
2) R.E. Butler, Address to TELECOM'87,Geneva, October, 1987.
3) A. Serrano S., "Human Factors in Telecommunications Technology Developmentand Education". Proceedings of theFrontiers in Education Twenty-FirstAnnual Conference, Purdue University.September 21-24, 1991.
Ij
THE IMAGING ADVANTAGE FOR DEVELOPING COUNTRIES
Dean Johnston, Senior Vice President, CBIS Image Management DivisionJim Hamblin, Managing Director, CBIS International Asia Pacific
Cincinnati Bell Information Systems Inc. (CBIS)Cincinnati, Ohio, USA
The designation of the 1990s as the "Age of Information" stresses the importantrole the management of information is playing for successful organizations in thecurrent world market. Organizations that have a well-executed plan for themanagement and flow of business-critical information will have definite cost andperformance advantages. These advantages will yield larger numbers of satisfiedclients, which in turn will provide a shorter route to success for developingorganizations and countries trying to compete in today's complex marketenvironments.
A recent study reveals that paper continues tobe the dominant medium (95%) of informationexchange in business today. Computerscurrently manage only one percent ofinformation on-line, with the remaining four(4)percent stored off-line in magnetic ormicrofilm archives. This ratio may not bequite the same for the telecommunicationsindustry, but the fact remains that mostoutside transactions. even in the developedcountries, tend to be through paper billing andpaper vendor invoicing processes.
Paper-intensive environments can createmassive problems for telecommunicationscompanies, such as:
loss of control of critical processes
inability to share information(simultaneous use)
inability to deal with massive amounts ofdata
lost or misplaced files A
high cost of storage space
low access to archival data
inferior customer service
In addition to these massive problems, thepaper process requires a large organizationalsupport structure to manage the flow of paperdocuments, with no efficient means ofdocument control. Document control iscritical not only from the standpoint of gettingthe document to the individuals required for
439
processing. but to ensure company-criticalinformation is maintained in a secureenvironment.
The problem that must be solved is how tomove these paper-intensive environments intothe realm of computer-controlled informationmanagement. Imaging technology coupledwith workflow management software providesthe "missing links" that allow organizations tocontrol over fifty percent (50%) of theinformation and eighty percent of theprocesses through the use of computers. Thisincrease in effectiveness can be accomplishedwithout massive amounts of additional capitalinvestment through careful utilization of theclient's current computer resources.
Imaging technology is particularly beneficial todeveloping countries which may becharacterized by paper-intensive problemsfurther complicated by language requirements.The ability to store scanned documents intheir original form reduces the need forextensive localized data translation and speedsthe automation of critical processes. Scanneddocuments can be stored on a page-by- pagebasis or characterized by chapter, book orfolder notations. These documents are exactduplicates of the paper original but with theadded functionality of being easily distributedand stored under computer control.
Large numbers of documents can be stored on-line through the use of optical disks, anessential part of imaging technology. Opticalstorage can provide a virtually endless amountof storage in extremely compact space. Accessto the documents is obtained throughworkstations equipped with window icons to
provide user- friendly interfaces that reducethe cost and time to train operators. Oncestored under the control of a server system,the documents are available to all authorizedusers simultaneously, unlike paper processesthat service a single user. Out-of-fileconditions are eliminated and updates orchanges to documents are strictly controlledthrough system security.
Distribution of document data is made easythrough the use of "FAX" and "Print" queues forremote sites or for batch processing of dailyhard copy requests. Workstation views ofcustomer data (billing information) reduceerrors and confusion in handling customerqueries and provide instant reprint capabilityin cases where bills have been lost. The needfor archival processes such as microfilming ofcustomer billing data is eliminated sinceinstant access is maintained through the use ofoptical libraries.
Although there are many benefits to imaging,the broadest benefits can be achieved whenimaging technology is combined with othertools to provide a total business solution. Themost important of these tools is the filestructure. It is critical that the file structurebe "object" oriented. In order for the solutionor system approach to be considered "object"oriented, it must accommodate varying filestructures and be able to launch theappropriate application program regardless ofthe file type to be stored or retrieved. Tocharacterize this approach more fully, a wordprocessing file (WordPerfect or other) could bestored and retrieved as a file type. When thisfile is retrieved at the request of theworkstation operator the application(WordPerfect or other) is automatically startedat the workstation and the data requested isplaced in the appropriate screen format.
In practice, this approach will accommodateimage files, word processing files, spreadsheetfiles, and customer billing print files--allretrieved/stored under the same object filemanager. These files are all available to theworkstation for display in differing windowswith their respective applications running. Tofacilitate this process, each workstation isequipped with a graphical user interface (GUI)that provides the required windows and themechanism for moving from one application toanother. By combining these displaycapabilities with the object service, theworkstation operator has all the necessarytools to complete the assigned tasks. Data canbe moved between window applications toreduce the amount of time spent in retypingand to allow real-time sharing of business-critical information.
440
In addition to these standard file types, specialfile types such as voice and full-motion videoare also usable with object file service. Thisenlarges the potential for dealing withproblems that were previously impossible tosolve. Voice data storage added to thecustomer file allows the customer servicerepresentative to have an exact record ofrequested transactions and provides an audittrail for future reference. Other scenarios canbe provided that are equally rewarding. withthe final result being increased productivityand customer satisfaction.
The overall philosophy that should be followedis to provide the data required to complete thetask in its "natural slate" in the client's "nativeenvironment" for maximum productivity andto convey the most information. The "nativestate" is provided through the use of object filemanagement. since each file is maintained asan extension of the application that originallygenerated it.
It has been demonstrated that imagingtechnology and object file management areimportant elements of the total solution. Theremaining key element is a "software engine"to run these services and to move the data in alogical path or workflow. Workflow softwareprovides the "engine" to ensure files are movedbetween users in a flow that at a minimumsimulates paper processes currently in use andat best streamlines these processes. Workflowsoftware monitors the activities at eachworkstation under a user pre-defined processto ensure timely completion of tasks andautomatic routing to other users within thesystem.
In addition to routing information. workflowsoftware can automatically feed database tablesand enter customer data in pre-definedresponse formats for the generation of lettersof response to inquiries. It provides the pathfor data to flow in a proactive environment thatdiffers from the standard mail managementformats. If responses are not received in pre-determined time frames at each step of theprocess, the data is automatically routed tosupervisors for review. The tasks can then bereassigned by the supervisor or released forreassignment by the workflow software.Because the workflow software is rules-basedand time-sensitive, management can rely uponit to reduce unnecessary work, eliminateerrors, avoid lapses in control of criticalprocesses and comply with statutory orcorporate requirements.
Another problem that is solved by the use ofworkflow software is the problem of work loadbalancing. Two important aspects of work loadbalancing are the ability to automatically routedata based on pre-defined rules and to directspecial cases to individuals who arc equippedto handle them as special tasks. An example of
the first case could be as simple as a customerservice representative being out sick.Transactions or processes normally routed tothat individual could automatically be re-routedto other representatives. This balancing ofwork load would ensure timely taskcompletion and would be transparent to theother users of the system. The second casecould be exemplified by requiring that specialcases of customer requests be handled by anindividual or group of individuals ( i.e., fiberoptic service). The workflow software wouldbe constructed to provide these cases to theselected group on a priority basis and provideadditional work load only after these cases arecompleted. This would ensure that each clientreceived the correct service representative toprovide a timely solution or response.
Process flows handled by the workflowsoftware will change as the developingorganization changes. It is necessary to haveworkflow software that can be changed in realtime and at the customer's site. This flexibleformatting keeps the cost of maintaining thesystem at reasonable levels and provides forcontinuous process improvement. Continuousimprovement is the key to success in themarketplace.Workflow software in combination withimaging technology and object filemanagement make up the basic set of toolsrequired to provide the total business solution.It is important to now consider how thesetools can be applied to obtain maximum benefitat the lowest implementation cost.
One factor mentioned earlier was to providethe solution in the client's "nativeenvironment". In this case, the "nativeenvironment" relates to making use of existingassets rather than purchasing or creating newones. Existing assets can be in the form ofhardware (host computer, workstations,network), software (existing databases,workstation programs) or +raiiiing (wordprocessing, spreadsheet, database).
To preserve assets with regard to thehardware, the solution software should run inany host machine capable of supporting UNIX.The workstations supported should be eitherPC, Macintosh, or a combination of both. Allstandard types of scanners and printers shouldbe supported and available to mix and match inthe overall system.
The most significant software asset usuallyresides in the database, which may be residenton a non-UNIX host. The solution softwareshould have the ability to link the existingdatabase to the new applications through theuse of standard window procedures. Thisdatabase information would then be available tothe users at the workstation. The workstation
441
software should also be constructed to takeadvantage of local applications such asspreadsheets and word processing. This yieldsbenefits in return on investment in thesesoftware packages as well as the retention oftraining invested in their use.
Now that the important aspects of providing abusiness solution have been explored, it isequally important to have a plan ofimplementation that fits the individualorganization. In developing countries it isessential to have a rollout strategy thatprovides a pilot stage for assessment with thecapability to expand on a department-by-department basis until the entire organizationis automated. It is unrealistic to think that anyorganization can successfully go from design toenterprise wide implementation without thebenefit of corrections and adjustments that arebound t-.) be the result of careful pilot testing.
The pilot may be an entire department whichprovides baseline hardware, third partyapplications and workflow processes. Thebaseline system must be constructed toprovide for growth within the department andto share data across networks with otherdepartments. This is easily accomplishedthrough the use of server volume maps and acentralized database. The volume maps carrynot only the location of the object, but theserver address on which the data can be found.Using this method, users on the network may
tain data from any server on the network(including remotes) and the data appears atthe workstation as seamlessly as it would if itwere from the local server. This importantfeature is not available on all types of smallimaging systems and it is absolutely essentialto maintain logical and orderly growth paths.
In addition to the pilot system characteristics.a milestone strategy should be put in place atthe same time the system design document iscompleted. This strategy will provide a roadmap for future implementations and an audittrail of planned activities versus actual.Without this strategy it is impossible to hecertain where the organization is with regardto the enterprise-wide automation. Developingcountries and organizations should spend mostof their concern and time in the up-front studyof system requirements and making sure thatthe processes are beneficial to the operationprior to the pilot implementation. This willyield a pilot that is not only beneficial to theinitiating department. but provides a logicalstart to enterprise-wide automation.
Finally, after reviewing and discussing the keyelements of a successful imaging technologysolution, have the problems associated withpaper-intensive environments mentionedearlier been solved? A review of the problemsreveals the following:
Problem Solution
Loss of control of Workflow softwarecritical processes
Inability to shareworkstationsinformationimages
Inability to deal withmassive amounts of data
Lost or misplaced files
document
High cost of storage
Low access toarchival data
Inferior customer service
Network
with document
Optical disk storage
Image managementsoftware &
images
Optical disk storage
On-line documents
Object file structure.workflow software.On-line documentimages
It is evident that in addition to answeringthese problems the use of imaging technologygreatly expands the horizons of developingcountries and organizations. It begins to levelthe playing field in the world marketplace.Cincinnati Bell Information Systems (CBIS) isdedicated to bringing world class businesssolutions that apply to the global community.All of the principles discussed in thispresentation are incorporated in CBISsolutions.
THE WY OP EQUAL ACCOUNITM RATES
PRESENTED BY
Peter Jackson, Regional Director Asia Pacific, Cable fi WirelessPlc (Hong Kong) and John Sullivan, Regional Manager AsiaPacific, Cable fi Wireless Plc (London).
Telecommunications is one of today's most dynamic industries yet themethod of charging for international telephone calls has remainedlargely unchanged for a number of years. The settlement system hasbeen labelled arcane and the charge levels exorbitant. Is this thetime for change? How would developing nations be affected by a moveaway from the present accounting rate system?
During recent years the charges for
inter-national telephone calls have become anemotive issue with consumers, the media and the
regulators.
In the second half of the eighties the
Federal COmmunications Commission in the US,concerned about the high outpayment being madeby the US carriers to overseas administrations,which today is over U8$ 3 billion madeinternational accounting policies a politicalissue. The eighties also saw the introductionof competition into what had always beenmonopoly markets. Firstly, in the USA with the.break-up of "Ma Bell", then the licensing of
Mercury Oaaminications in the UK and morerecently with Clear in New Zealand and Cptus inAustralia.
Around the same time consumer awareness wasfuelled by Hugo Dixon, the telecommunicationscorrespondent of the London Financial Timeswho, in a series of articles in the late 1980'salleged that collusion between the majortelecoms operators in the USA, UK and Europebad maintained artificially high internationalcollection charges, the price paid by theconsumer, when technology bad been driving downthe costs of providing the services.
All these factors have combined to put pressureon collection charges and accounting rates.It is this pressure which is of particularconcern to operators of telecoms in
developing countries.
Since the public switched telephone networkbecame available in the early part of thiscentury it has developed rapidly. In the USA
there are now 1.25 exchange lines perhousehold and over 80 telephones per 100 ofthe population. Western Europe, Australia andNew Zealand are approaching that magic figureof one line per br %old while the developing
world lags far be _id. The highest density in
the Asia Pacific region, excluding Hawaii, isFrench Polynesia with around 25 telephones per100 inhabitants, typically the density is below10 per cent.
443
Telephone lines / 100 of Population
5'
It is ideological to suggest that in the short,or even the medium term, the majority ofPacific Islands will reproach the telephonedensity of 42 per 100 inhabitants of the islandof Bc=bados in the West Indies, let alone thatof the first world rymntries. But if theireconomies are to grow and attract investmentfrom overseas, there must be freely availableand reliable telecommunications in the islandsof the ?acific and is the revenue derivedfrom international traffic which will supportthe funding of their telecommunicationsdevelopment.
Particularly, as in many cases traffic to andfrom developed countries is not symetrical andthey receive a net inpayment through theaccounting rate meelhanism.
The first world has, over the years used theincome from its international services tofinance system development while keepingdomestic telephone charges below cost. It hascross- subsidised its domestic services frominternational revenue, allowing them to growand prosper.
1
In many cases the developing world has had to
use the foreign exchange obtained frominternational traffic to fund the provision ofbasic social services and development. Anysignificant global downward trend in accountingrates would deny it this opportunity.
The CCITT have recently, by an overwhelmingmajority, passed recaanendation D140, whichlays down the principle of cost orientedaccounting for international telephone
services. The principle of cost orientedpricing is fundamentally sound but it is theapplication of that principle which can becameunfair, generating greater profits for thetelecoms operators in the developed world whiledenying developing countries the funds which
will enable their systems to grow and theireconomies the chance to prosper.
Looking back to an earlier period, the presentday dichotomy between accounting rates andcollection charges did not exist, thecollection charges (the prices paid by theconsumer in local currency) were derived fromthe international settlement rates which wereexpressed in Gold Francs, the 1TO unit ofcurrency.
The ending of the Bretton Woods exchange regimeforced administrations to agree definitionswithin the CCITT which clearly distinguishedbetween collection charges and accountingrates. Collection charges were specificallymade a matter of concern only to the country inwhich they applied while accounting ratesbecame subject to bilateral agreement betweenthe corresponding administrations.
The effect of this has been to leave accountingrates largely unchanged for many years whilecollection charges have been affected by marketforces, competition and regulatory bodies. Thesituation has been reached where there is
little or no relationship between accountingrates and collection charges.
CCITT recommendation D140 now seeks to
re-establish the relationship by stating;
"that administrations should seek to lowerthe provisioning costs of international
telephone services"
and
"that administrations should strive to
offer customers high quality international
telephone services at the lowest possible
prices".
In short, it reamenenas that both accounting
rates and collection charges should be cost
oriented. As stated previously, it is not the
principle of this reocamndation but theapplication of it that must give cause for
concern. Three fundamental questions need to
be considered;
What are the cost elements involved in
providing the service?
How are these costs calculated?
Haw are these costs, which will varycountry by country, reflected in theinternational accounting rate?
Recommendation D140 goes on to state;
"that too great a dissymmetry between thecharges applicable in each direction of thesame relation may contribute to the
distortion of the balance of traffic andencourage the retention of high accountingrates".
Currently, most developing countries benefitfrom an imbalance of telephone traffic, sendingonly half, or even less, of the traffic theyreceive fran their major, developedcorrespondents.
It is interesting that the telephone densityand the per capita GDP are generally reflectedin the ratio of incoming to outgoing traffic ofthat country.
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IN/ TELE- GDP/ROUTE OUT PHONE CAPITA
RATIO DENSITY U$$
FIJI - AUSTRALIA 1.9 9% 1200TONGA - AUSTRALIA 4.5 4% 530BARBADOS - USA 1.97 42% 4800GRENADA - USA 5.0 7% 970SEYCHELLES - UK 1.9 21% 2500
Of course, where this imbalance is significant,it is in the interests of the recipient tomaintain the level of foreign currency revenueit receives from it and in practice there isvery little that can be done in the short termto redress the situation.
Whilst demand for international telephone callsis to an extent elastic it is affected muchmore by the level of disposable income than theactual cost of the service, particularly wheredeveloping oo...itries are concerned.
Currently the price of a telephone call fromTonga to Australia is cheaper than it is in thereverse direction, yet there continues to be animbalance of over 4:1 on the route. Even whenAOTC, the Australian administration, increasedits collection charges in 1990, exacerbatingthe price differential, there was nosignificant change to the balance of traffic.
It is the oonsumers' relative ability to pay,rather than the price of the service, thatunbalances the traffic. This is particularlysignificant in the case of island nations whichhave large communities of relatively prosperousexpatriates living and working overseas.
It is little wonder that the accounting andcollection rate mechanisms have been in turmoilover the last few years. Reductions inaccounting rates will not, in isolation, solvethe pre/Diem. The link between them andcollection charges must be re-established andperhaps go even further in order to maintainand increase the revenue available todeveloping oountries.
Reliable and freely available telecoms arevital to economic development. Telephonepenetration, GDP and traffic flows aregenerally clearly linked and it is the increasein prosperity of the recipient which willrebalance the traffic. Tinkering withcollection charges and accounting rates isunlikely to solve the problem.
It can easily be argued that it is in the longterm interests of both parties to ensure thatsufficient revenue continues to be available tofund system expansion and to ensure that theapplication, even on a phased basis, of costoriented a000unting rates does not mitigateagainst this
Firstly, it will be necessary forAdministrations to agree on the elements to beused in determining the cost base from whichaccounting rates will be derived.
Recommendation D140 defines these elements inbroad terms;
"that the remuneration for the use oftelecommunications facilities nudeavailable to adirdnistrations should coverthe costs incurred in providing thosefacilities such as:
- networ: costs- financial costs
overhead costs"
Beginning with the network costs, theinterpretation of what these cover is bound todiffer between administrations.
Firstly, how such of the national networkshould be included?
the handset or customer's equipment?the localloop?the local switch?the national transmission network?the national transit switching?the connection to the internationalgateway?
All these are costs to the national telecomsoperator and the levels will vary considerablybetween countries. The drivers of these costswould include;
. geographic situation - developingcountries usually have to provideservice to remote ocsmizmities at acapital cost per line many timesgreater than that for system expansionin the urban and sub-urban areas offirst world countries.
445
economies of scale - these include thebulk purchasing power of largeadministrations, the relativeefficiency of a large labour force, theavailability of expensive mechanicalaids, spares holdings and redundancyphilosophies.
Bluipment sourcing - large first worldcountries usually enjoy the benefits oflocal equipment manufacture, avoidingthe high transport and insurance costsand import duties experienced by thedeveloping world.
country infrastructure coots - thecost and availability of localtransport, power etc.
. labour costs - the lower wage levels
associated with developing countriesare balanced by the need to bring ines&patriate support at a high cost andthe expense of sending staff overseasfor training.
It would be surprising if the costs ofproviding and maintaining the national networkIn a developing country were not two or eventhree times higher than those in a first worldnation.
Similarly, the unit costs of providing andoperating the international services will besignificantly lower for developed countries.They will enjoy the eoonomies of scale in theprovisioning switching equipment, earthstations, transmission equipment and cables.They will benefit in terms of operating costsby being able, through greater use ofdigitalization and circuit multiplicationtechniques, to derive a larger number ofspeech channels from a given space segment orcable capacity.
Secondly, the financing costs of developingcountries will be significantly higher. It isunlikely that they will have reached the stagewhere they are generating sufficient revenue tocover operating costs and fund ongoingdevelopment. They are likely to be affected bythe availability of convertible currency tofinance foreign currency expenditure.
The costs financing are also likely to behigher because of the risk factors involved.
CashFlow
Revenue Stream/
Capital Investment Costs
Time
It is likely that telecoms operators in mostdeveloped countries will have moved to abovethe line in the diagram where they are verymuch cash positive and generating sufficientcash to finance ongoing development as well asmake dividend payments to their shareholders.Major development is a sunk cost from whichthey are now reaping the benefits.
It is axiomatic that oountries with lowtelephone penetration are still below the lineand their ability to move above it depends onthe level of revenue derived fram their capitalinvestment, particularly their investment inthe international services.
Finally, overhead costs are also likely to besignificantly higher for developing countries,as they are affected b7 the same factors asnet-work costs, such as c4onamies of scale.
Having considered which elements mightreasonably constitute the cost base, thecalculation of these costs presents a much moredifficult proposition. Whilst it is clear thatcosts will vary between developed anddeveloping countries there will be widevariations within these groups.
I suggest that it would impractical for everycountry to calculate its network costs, havethan globally accepted as realistic and thenused as the driver in determining the basisfor accounting rate settlements. The resultwould be a wide range of accounting rateswithin the same region, anomalies betweenregions, and with the CCITT seeking tore-establish the link between accounting ratesand collection charges, a pricing structureconfusing to the average consumer.
If the world is to take the next step towardscost oriented accounting rates a relativelysimple and just system, which neither penalisesthe efficient nor favours the inefficientoperator, must be established. Regrettably,
there is no quick fix.
However, one possible solution would be to
follow the example of Europe by utilising theTELMER system (Tariffs for Europe and
Mediterranean Basin), establishing benchmarksfor the various cost elements of providingin'ernational telecommunications.
".u'iances against these benchmarks wouldbejustified by country specific parameters,taking into account telephone penetration andthe cost of financing future development.
The introduction of a banding system wouldsimplify its application with countries withsimilar parameters being slotted into the sameband.
It would be surprising if this exercise did notre-inforoe the findings of previous studiessuch as the Maitland Commission in 1984 and the1990 study carried out by the ITU that costlevels in developing countries are roughlytwice those of first world nations.
If, as is likely, that this proves to be thecase how will these differing cost levels bereflected in accounting rates?
Firstly, we need to re-consider the presentmethod of calculating settlements betweenadministritions; "The Accounting RateEquation".
The Accounting Rate Equation.
( collection x traffic %_ (t x 1 accounting .1.4. (traffic x /charge out out Z rate \ in 2
In a very simplified situation where we would have:
a = 400 minutes of traffic from country A to country B.b = 200 minutes of traffic from country B to country Ac = collection charge of $1.0 in both countries.d = accounting rate of 80 cents equally divided.
(cxa) - (ard) + (bxdj = netrevenue2 2
( 1.0 x 400) - (400 x 0.8 ) + ( 200 x 0.8 ) = $320 net revenue to A.2 2
and( 1.0 x 200) - ( 200 x 0.8) + ( 400 x 0.8J = $280 net revenue to B.
2 2
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accountingrate = revenue
In this simplistic example, with equalaccounting and collection charges country Areceives 12 1/2% move than country B.
However, with all other things being equal, anyreduction in the accounting rate increasesrevenue to country A whilst reducing therevenue to country B; a situation operators indeveloping countries are not zalfamiliar with.Clearly this system is by no means perfect andany cost orientation is purely co-incidental.If we go with worldwide opinion towards theintroduction of a cost based system, can ameChanism be developed that does not mitigateagainst the interests of developing countries?
one method would be to retain the presentaccounting rate equation with the divisionreflecting the differing cost levels. Abanding system would avoid having manydiffering apportionments and keep the systemrelatively simple.
If we loUk at our simplified exapple again butmodifying it and substituting a 70 centsaccounting rate divided 30 cents and 40 centsfor A fi B respectively the situation changesthus;
(1.00 X 400 - 160) + 60 = $ 300 Revenue for A.
and
(1.00 X 200 - 60) + 160 = $ 300 Revenue for B.
In this situation the application of unequalshares in the accounting rate results in equalshares in revenue, a situation many wouldregard as fair particularly if the $1.00collection charge can be demonstrated asreflecting actual cost plus reasonable profit.
Of course these examples are all verysimplistic and life in the real world is not aseasy as this but I believe that a system ofunequal apportionment of cost based accountingrates would be an improvement on the statusquo, which perpetuates inequality. We are ofcourse still left with the problem of agreeingcost levels which will no doubt will stillremain unresolved in the short and perhapsmedium term.
There are however other options available toreplace the present system. Recently a numberof papers have been written proposing an accesscharge or termination fee in place of theaccounting rate mechanism. This sdhemeproposes that all carriers pay the same ratefor terminating calls in a particular country.
The termination fee proposal is gaining supportin a number of quarters but not all supportersare willing to recognise that to be applied ona fair and just basis it must vary from countryto country. It must reflect the differinglevels of cost which exist throughout theworld. Again this could be achieved through abanding system, but would the result be anydiffering from an unequal division of theaccounting rate?
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Whatever the outcome of the CCITTRecommendation D140, whether it retains thecurrent system, whether agreement can bereached on unequal shares or whether we end upwith a termination fee, there are many otherfactors to be considered.
The major carriers, in the US driven by theFCC's expectation of a 50% reduction inaccounting rates on major routes andoutside the US by other factors, willcontinue to strive to reduce their level ofoutpayments.
COmpetition, with new entrants coming intothe market, will leverage collectioncharges which in turn will force theestablished players to review the levels ofaccounting rate if they are to remaincompetitive.
Resale is expanding into the PSTN with theobvious effects on traffic flows andcollection charges.
The introduction and expansion of callingcard services with Home Direct and HomeBeyond services increasing the dissymmetryin traffic flows. This in turn places evengreater pressure on developing countries toreduce accounting rates whether or not theyare cost based.
The established principle of distancerelated charging which although inconsumers' eyes appears reasonable, lessand less reflects the costs of providingservices, particularly over satellitesystems. The retention of distance basedaccounting has recently been recommended byTAS (Regional Tariff Group for Asia andOceania) at their meeting in October lastyear.
As has been stated earlier there can be noquick fix to the accounting rate dilemma;the world is changing too rapidly. Thedanger is that in seeking one, the gapbetween developing and developed countrieswill continue to widen not only in thetelecommunications field but in terms ofsocial and economic prosperity.
THE DYNAMICS AND IMPACT OF U.S. TELECOM POLICYON ACCOUNTING RATES AND INTERNATIONAL SIMPLE RESALE
by Robert J. AamothPartner
Reed Smith Shaw & McClay1200 18th Street, N.W.Washington, D.C. 20036Tel (202) 457-8682Fax (202) 457-6113
I. ABSTRACT
The U.S. Federal Communications Commission ("FCC") has entered the realpolitikof the international telecom industry through its policy initiatives on accounting ratesand simple resale. In each case the FCC is seeking to change the behavior of non-U.S.entities; its accounting rate policy is a mechanism to pressure non-U.S. carriers toaccept lower accounting rates and its simple resale policy is a mechanism to pressure
other countries to liberalize their telecom markets. For non-U.S. carriers, a realistic
appraisal of the FCC's policies is essential to a fully-informed managing of relations withU.S. carriers and to a better understanding of telecom opportunities in the U.S.
II. ACCOUNTING RATES AND THE U.S. TRADE DEFICIT
Accounting rates determine how much money thetelecom carrier who originates an internationalcall is obligated to pay to the foreign carrier
who terminates the call. Typically, accountingrates are specified in currencies such as gold
francs, special drawing rights, or U.S.
dollars. The amount which the originatingcarrier owes to the terminating carrier isusually 50Z of the accounting rate. For
example, if the accounting rate is $1.30 perminute, the originating carrier would normallyowe 50% of that amount (or $0.65) to theforeign carrier for its role in terminating the
call. The FCC refers to the $0.65 charge as a
"settlement rate."
The FCC has monitored or regulated accountingrates for more than 50 years. For most of that
period the FCC focused upon record services.It was not until 1986 that the FCC's interestcentered upon international message telephoneservice ("IMTS"). Historically, the FCC's
principal concern was to prevent "whipsawing."` ":,,sawing can occur when one country (such as
the U.S.) has several competing telecomcarriers while a foreign country has a monopoly
carrier. The FCC has been concerned that themonopoly foreign carrier will try to use itsbargaining leverage to negotiate unfair ratesand terms with competing U.S. carriers, ineffect playing off the U.S. carriers against
each other. To prevent that, the FCC adoptedthe Uniform Settlements Policy to require allU.S. carriers to have the same accounting ratearrangements on the same route. The FCC
changed the name of the policy to theInternational Settlements Policy as the FCCbecame willing to accept some non-uniformity inthe reduction of accounting rate levels.
The FCC continues to monitor accounting ratepractices for evidence of whipsawing. In July
1990 the FCC rejected AT&T's USADirect Serviceand MCI's CALL USA service for Spain due towhipsawing concerns. However, whipsawing hasnow largely been replaced by the U.S. telecom
448
trade deficit as the primary factor motivating
the FCC's accounting rates policies. The
deficit is now approximately $3 billionannually and the FCC has estimated that itcould balloon to $7 billion per year by 1996
based on current trends.
The deficit is the net settlement outpaymentsby all U.S. carriers in a given year. Because
most carriers originate and terminate traffic
on a particular international route, payments
from one carrier to another carrier are made,with a few exceptions, only on a net basis. If
traffic is balanced evenly between twocountries, each carrier owes an identicalamount to the other carrier and no settlementpayments are necessary on a net basis. When
there is an imbalance between originating andterminating traffic on a particular route, onecarrier must make settlement payments to the
other carrier. The U.S. telecom trade deficitoccurs because U.S. outgoing IMTS traffic far
exceeds U.S. incoming IMTS traffic for many
countries. As a result, U.S. carriers owe moreto foreign carriers for the termination of
U.S.-originated calls than foreign carriers oweto U.S. carriers for the termination offoreign-originated calls. Although accounting
rate levels do not by themselves create the
traffic imbalance, higher accounting rates willlead to a higher trade deficit for a giventraffic imbalance.
III. THE FCC'S ACCOUNTING RATE POLICY
The FCC has placed a high priority on reducingthe U.S. telecom trade deficit by loweringaccounting rates across the board. In November
1992 the 1-X adopted so-called accounting ratebenchmarks for virtually all regions of the
world. The accounting rate benchmark forEurope is $0.46-$0.78 per minute (or a
settlement rate of $0.23-$0.39/minute); theaccounting rate benchmark for Asia and otherregions is $0.78-$1.20 per minute (or a
settlement rate of $0.39-$0.60/minute).According to the FCC, it expects most non-U.S.carriers to agree to accounting rates at these
PT J
benchmark levels within two years and allcarriers to do so within five years. The FCC'sexpectation stems in part from CCITTRecommendation D.140, which requires accountingrues to be cost-oriented and non-discriminatory. The FCC expects loweraccounting rates to effect a 50% reduction intotal net settlement outpayments by U.S.carriers.
Although the FCC claims that the benchmarksreflect declining international service costs,the FCC has never developed an empirical andeconomic methodology for identifying ormeasuring those costs. The FCC once suggestedthat I.T &T's fully distributed costing ("FDC")
methodology would be appropriate, but the FCChas largely abandoned the FDC methodology fordomestic interexchange services and no U.S.carrier supported its use for :"_TS. Nor didthe FCC comment upon assertions by non-U.S.carriers that they have conducted studiesverifying the cost basis of existing accountingrate levels. As a reslt, it remains a matterof speculation whether existing accounting ratelevels, or the FCC's benchmarks, more closelyreflect international service costs. It is aprecarious balancing act for the FCC to dictatespecific benchmarks for the purpose of aligningaccounting rates more closely with costs whenthe FCC lacks any economic methodology forbuilding cost-oriented accounting rates fromthe. ground up.
Despite the substantial uncertainty whether theFCC's benchmarks are cost-oriented, the FCC hasengaged in tough talk on what it may do if non-U.S. carriers do not agree to lower accountingrates in line with those benchmarks. The FCChas stated that it has the authority toprescribe unilaterally an accounting rate for aparticular international route. If a non-U.S.carrier rejects the FCC-prescribed accountingrate, the only alternatives would be a sender-keep-all arrangement or the termination ofdirect relations between U.S. carriers and theforeign country. Although the FCC has not yetsought to prescribe an accounting rate for anon-U.S. carrier, the FCC has required the fivelargest U.S. international carriers (AT&T, MCI,Sprint, TRT/FTC and GTE-Hawaiian) to filereports by January 1, 1993 and January 1, 1994regarding their progress in negotiating lower
accounting rates.
Because the unilateral prescription of anaccounting rate by the FCC is an extremesanction, and one which arguably violates ITUregulations, the FCC may be reluctant toexercise its alleged prescription authority.To date, the FCC has shied away from the moreprovocative options, such as AT&T's proposalfor a 60-day fast-track complaint procedurewhich U.S. carriers could invoke against non-U.S. carriers who refuse to lower theaccounting rate. The FCC also has declined toinsert conditions in the international serviceauthorizations of U.S. carriers to require orencourage lower accounting rates. In November1992 the FCC clarified that it would not seekto enforce its accountinl rate benchmarks,
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which it described as "guidelines," at leastuntil it has reviewed the January 1, 1993progress reports and the impact of CCITTRecommendation D.140.
In aFsessing the likelihood of FCC action toenforce its accounting rate benchmarks, non-U.S. carriers should be aware of the largelypolitical nature of the FCC's policies in thisarea. The FCC's accounting rate benchmarks aremore the product of U.S. trade policy than ofrigorous technical analyses of cost and trafficdata. FCC Chairman Sikes stated bluntly inAugust 1191 that without fundamental reforms"this [accounting rate] issue could become amatter of trade policy and negotiations." As aresult, accounting rate policy, like all U.S.trade policy, is intensely and essentiallypolitical. And like statistics which U.S.politicians use as election campaign fodder,one suspects that there is rather less to theFCC's accounting rate benchmarks than firstmeets the eye. The overriding attribute ofthese benchmarks is the trade result they wouldachieve -- a reduction of approximately 50% inthe U.S. telecom trade deficit. Thepossibility should not be dismissed that theFCC devised its accounting rate benchmarks asmuch through reverse engineering from thedesired trade resnit as from a technicaltelecom cost analysis.
IV. THE POTENTIAL I10.?ACT ON DEVELOPINGCOUNTRIES
If achieved, the FCC's accounting ratebenchmarks could require significantconcessions from many non-U.S. carriers. Table1 lists accounting rate levels for the Asia-Pacific region in 1991. Although some of theserates have been negotiated downward since 1991,only two countries on this list (i.e.,Australia and Singapore) currently have anaccounting rate within benchmark levels.Significant reductions would be required formany other countries to meet benchmark levels.As Table 2 demonstrates, numerous countries inthe Asia-Pacific region -- including Korea, thePhilippines, Pakistan, Thailand, Hong Kong andIndonesia -- receive sizeable settlementoutpaymerts from U.S. carriers. According tothe FCC, net settlement payments to the Asia-Pacific region totalled $1.178 billion in 1990for IMTS. Implementation of the FCC's newbenchmarks could reduce overall payments to theAsia-Pacific region by more than $500 millionper year.
The FCC's policy could harm those carriers fromdeveloping countries who rely upon netsettlement payments from U.S. telecom carriersfor a substantial portion of their grossrevenues and hard currency. As one example,the Guyana Telephone & Telegraph Company Ltd.("CTT"), located in a small developing countryin South America, receives 75% of its total netrevenues and 80% of its hard currency revenuesfrom AT&T alone. Any substantial reduction orlengthy delay in these payments would impose ahardship upon GTT, which relies upon suchpayments to fund day-to-day operating expenses,
short-term and long-term infrastructureimprovements, and debt service. In some cases,a reduction in net settlement payments fromU.S. carriers could cause a non-U.S. carrier todefault on its loan obligations or becomeinsolvent.
Reliance upon net settlement payments is amatter of necessity, not choice, for carriersin some developing countries. The equipmentand infrastructure improvements which suchcarriers must undertaue often require hardcurrency. Particularly when the nativemonetary currencies for those carriers are notreadily convertible, U.S. settlement paymentsmay represent an essential source of hardcurrency. The on-going global recession hasdried up national treasuries in developingcountries while nearly severing the umbilicalcord between capital markets and many telecomcarriers. In such an environment, the cost ofcapital can be prohibitively expensive, forcingcarriers in developing countries to use netsettlement payments, or accept the onerousterms that accompany supplier (or vendor)credits, in order to fund purchases ofessential equipment as well as networkmaintenance and modernization.
Viewed in isolation from other factors, areduction in the accounting rate level isalmost never the preferred business option of atelecom carrier in a developing country. Loweraccounting rates reduce net revenues and,possibly more important, reduce hard currencyrevenues. Lower accounting rates appear tomake business sense for carriers in developingcountries primarily when they are implementedas part of an integrated multi-year planinvolving infrastructure modernization andsubstantial collection rate re- balancing. In
that context, lower accounting rates can beinstrumental in reducing collection rates,which in turn can stimulate internationaltraffic growth an] maximize carrierprofitability. It is usually optimal ifinfrastructure development precedes significantreductions in accounting and collection rates.It may be unrealistic to expect that ratereductions will substantially stimulate trafficgrowth without infrastructure improvements whenmany carriers are experiencing difficulty inmaintaining current traffic levels overexisting network facilities.
The problem which developing countries may nowhave to face is being asked to accept loweraccounting rates before it makes business sensefor them to do so. At the risk of provokingunilateral actions by U.S. authorities, telecomcarriers in developing countries shouldconsider standing firm in resisting the trerdtoward lower accounting rates, at least forsome period of time, when they believe thecurrent accounting rate is cost-oriented. Asseveral non-U.S. carriers and organizationshave argued to the FCC, it is fallacious todevelop a single accounting rate policy whichapplies to developed and developing countriesalike (or to all developing countries as onecategory). The ITU conducted a study in 1990
450
indicating that the average telecom carrier ina developing country incurs costs to provideIMTS which are more than two times higher thanthe costs incurred by carriers in developedcountries. The study also concluded thattelecom service costs vary widely amongdeveloping countries, thereby making itvirtually impossible to estimate any limitedrange of cost-oriented accounting ratebenchmarks for developing countries. Withoutmentioning this study, the FCC adopted the sameaccounting rate benchmark for developed anddeveloping countries in the Asia-Pacificregion.
Developing countries should continue to pushfor a policy which rationally distinguishes
between developed and developing countries and,at a minimum, which does not erect anypresumption that the accounting rate for adeveloping country is not cost-oriented simplybecause it is higher than accounting rates fordeveloped countries in the same region. Absentan economic cost measurement and allocationmethodology, the FCC has no empirical basis atthis time to conclude that accounting ratesbetween the U.S. and developing countries aregenerally above cost. The first-handexperience of carriers in developing countriesdemonstrates that their costs can be increasedby a variety of factors, including (i) the costof capital; (ii) higher short-term expendituresto build a modern telecom network
infrastructure; (iii) circuit loading andnetwork efficiencies; (iv) economies of scaleand scope; (v) network maintenancerequirements; (vi) a less highly educated andtrained population; (vii) the absence of asophisticated economic and technicalinfrastructure within the country; (viii) agreater dependence upon transit arrangementsand thin, long-haul route.; (ix) less routediversity; higher installation and overheadcosts; and (x) greater contributionrequirements. Particularly when a telecomcarrier has initiated an ambitious capitalimprovements program for completion within afew years, it cannot be assumed automaticallythat a "high" accounting rate level is aboveactual IMTS costs.
Unfctunately, the political and trade contextsin which accounting rate policy is devised inthe U.S. may overwhelm efforts to ensurerational treatment of developing countries.AT&T has estimated that 70% of its netsettlement outpayments are made to carriers indeveloping countries, so reducing the U.S.telecom trade deficit significantly will dependupon lower accounting rates with developingcountries. And the FCC continues to usepolitically-charged rhetoric in claiming thatcurrent accounting rate levels with developingcountries are a "subsidy" and a type of"foreign aid." As a result, it may conflictwith U.S. political imperatives for carriers indeveloping countries to defend currentaccounting rate arrangements. At the sametime, while carriers with above-cost ratesshould endeavor to lower them in line withCCITT Recom,...ndation D.140, carriers who
believe their accounting rates are cost-oriented should not forget that they areentitled to resist lower accounting rates byrefusing to accede to U.S. carrier demands.
Apart from accounting rates, other factors alsoplay a prominent role in promoting telecomfinancing through privatization orinfrastructure development for developingcountries: (i) a simple, transparent andcertain telecom regulatory regime; (ii)substantial flexibility to rebalance rates,streamline the labor force, and corporatizeoperations; (iii) well-developed domesticcapital markets; (iv) favorable tax laws anddividend repatriation rules; (v) good prospectsfor economic growth within the country; (vi)clear ground rules governing the Government'sownership participation; (vii) favorablepolicies and practices regarding debt-equityswaps; (viii) preserving a carrier's monopolystatus for some period of time; (ix) political,business and regulatory stability within thecountry; (x) experienced and efficientmanagement; cnd (xi) a convertible currency.These and other, similar factors have a well-recognized impact upon a carrier's ability toprivatize or to obtain financing forinfrastructure improvements.
In addition, technology itself is a drivingforce behind the financing of telecom projectsin developing countries. The last severalyears have witnessed the explosive growth ofwireless technologies. Viewed initially ascomplementary or overlay technologies, thesetechnologies are being scrutinized increasinglyfor their suitability to provide core telephonyServices which historically have been furnishedvia wireline facilities. There is increasedoptimism that wireless technology will proveable to "finance itself," at least in part,through the immediate traffic and revenuegrowth which it could generate.
Moreover, technology is beginning to change theway the market looks at telecom financingopportunities in developing countries. In thepast, there was a tendency to view projectfinancing and carrier financing as separatebusiness opportunities. With the developmentof wireless and other technologies, the linesbetween these categories have blurred.Projects which once involved overlay networksnow can be expanded to involve core telephonyservices as well. Project financing may becomea more viable alternative to partial or fullprivatization. These and other factors maymitigate the impact of Lower accounting ratesupon telecom financing in developing countries.
V. ACCOUNTING RATE NEGOTIATIONS
The FCC's pressure for lower accounting rateshas resulted, and will continue to result, inefforts by U.S. carriers to negotiate lowerrates with non-U.S. carriers. Some industryobservers have speculated that the FCC intendedall along for its harsh language on accountingrate issues to be used by U.S. carriers as anegotiating tactic with non-U.S. carriers.
451
Regardless whether the FCC actually intends toundertake unilateral enforcement actions, thespecter of FCC sanctions may give U.S. carriersadditional bargaining leverage. If non-U.S.carriers believe the FCC is serious aboutunilateral actions, they might be more willingto accept proposals by U.S. carriers for loweraccounting rates. By understanding the type of"game" that the FCC and U.S. carriers might beplaying with respect to accounting rates,telecom carriers in the Asia-Pacific region canbetter adopt an informed negotiating posture.
It is possible that U.S. carriers could use avariety of tools for pressuring non-U.S.carriers to accept lower accounting rates. Forexample, they could threaten to "report" thecarrier to the FCC in their 1993 or 1994progress reports or otherwise initiate directFCC enforcement action against the carrier. Asanother example, they could threaten to.delaythe introduction of new services or even towithhold unilaterally the net settlementpayments which are due under the currentoperating agreement. By understanding theFCC's policies and role in accounting ratenegotiations, non-U.S. carriers will be betterable to analyze these situations and selectappropriate options. One way to neutralizeU.S. carrier demands might be to conduct arigorous study to show that the currentaccounting rate is cost-oriented.
Non-U.S. carriers also must learn the dynamicsof conducting concurrent negotiations with twoor more U.S. carriers on accounting rates. Itis possible that the U.S. carriers could worktogether, formally or informally, to "doubleteam" a single non-U.S. carrier. For example,one U.S. carrier might make severe demands forthe pur?ose of making another U.S. carrier'sprt.;,osal seem more zeasonable. Of course, whenthe U.S. carriers do not coordinate theirnegotiating strategies, it might be possiblefor a non-U.S. carrier to reverse this processby using the more reasonable proposal toundercut the demands of the more aggressiveU.S. carrier.
U.S. carriers also may seek to expand the useof so-called growth-based accounting rates. Insimplified form, this type of arrangementapplies the current accounting rate only toexisting traffic levels as measured from a baseyear. All growth in traffic is governed by anegotiated, lower accounting rate. Thesearrangements have been negotiated as acompromise between the U.S. carrier desiring alower accounting rate and a non-U.S. carrierdesiring to maintain the current Level of netsettlement payments. AT&T has negotiatedgrowth-based arrangements for the countrieslisted in Table 3. The large majority ofgrowth -lased arrangements involve developingcountries due to the larger traffic imbalancewith the U.S. and AT&T's greater market powerto force carriers in developing countries toaccede to growth-based accounting rates.
Non-U.S. carriers should be aware that growth-based arrangements may be subject to
conflicting perceptions. The FCC and possiblythe U.S. carriers may view such arrangements asa transition to lower accounting rates for allinternational traffic. By contrast, the non-U.S. carrier may perceive a growth-basedarrangement as a permanent accounting ratestructure. These differing perceptions couldlead to further conflict over accounting rates.In addition, the FCC has adopted a policy thatnon-U.S. carriers must be prepared to offer thesame growth-based accounting rates to all U.S.carriers. The FCC has indicated that it willcontact non-U.S. carriers who do not complywith this policy and, in extreme cases, couldeven prescribe a uniform rate unilaterally.Ironically, the FCC may have ensured some delayin the offering of lower accounting rates toall U.S. carriers by specifying the procedureswhich it will follow before initiatingunilateral action.
Ultimately, non-U.S. carriers will have toassess whether they can achieve the bestaccounting rate arrangement by agreeingvoluntarily to phased reductions with U.S.carriers, or by insisting upon the currentaccounting rate and risking unilateral FCCenforcement actions designed to compeladherence to the benchmark rate. Through itsestablishment of benchmarks and tough talk onaccounting rates, the FCC hopes to prompt non-U.S. carriers to select the former option. Theprimary effect of the FCC's increasinglyintrusive policies may be to involve the FCC asan active participant in negotiations with non-U.S. carriers who maintain high accountingrates. Whether through informal contacts orformal agency proceedings, the FCC may be morecomfortable trying to broker accounting ratearrangements than in superseding carrier-to-carrier negotiations through unilateralprescriptions.
VI. INTERNATIONAL SIMPLE RESALE
In December 1991 the FCC announced the policythat U.S. common carriers will be permitted toprovide switched services through the resale ofinternational pri-lte line services (so-calledsimple resale) only when the relevant foreigncountry offers an "equivalent" opportunity forsimple resale. The FCC did not specifycriteria for "equivalence," but rather deferredto a case-by-case process for applying thestandard to specific countries. The FCC hassince clarified that its policy does not applyto the resale of international private lines toprovide private line service. Further, the FCCcontinues to permit customers to interconnectinternational private lines to the U.S. publicswitched network so long as simple resale doesnot occur. The FCC devised and continues toimplement its international simple resalepolicy based upon informal discussions withother countries.
The simple resale policy is designed to curbso-called "one-way resale" where foreigncustomers are al,te to bypass the IMTSaccounting rate by sending switched trafficover private lines while U.S. customers are
denied an "equivalent" opportunity due tointerconnection or other restrictions in theforeign country. Such bypass aggravates theU.S. net traffic imbalance and, therefore, theU.S. telecom trade deficit. The FCC's simpleresale policy also provides an incentive forother countries to liberalize theirinterconnection and resale policies. At thesame time, the FCC recognizes that bypass
provides strong market-based pressure for loweraccounting rates. That pressure, and a desirenot to interfere with existing customer-carrierarrangements, may explain why the FCC has notyet extended its simple resale policy to allsituations where an international private lineis interconnected to the U.S. public switchednetwork.
AT&T is pressuring the FCC to apply the"equivalence" standard to every instance wherean international private line is interconnectedto the U.S. public switched network at acarrier's central office. (No party has askedfor the standard to apply to interconnectionthrough a customer's PBX.) The limited scopeof the FCC's existing policy has been
underscored by a dispute involving PLDT in thePhilippines. PLDT has opposed an internationalprivate line service interconnected to the U.S.public switched network, which service isprovided by Worldcom in the U.S. and Globe-Mackay Cable and Radio Corporation in thePhilippines. Because no U.S. resale carrier isinvolved, the arrangement does not appear to begoverned by the FCC's simple resale policy.The FCC recently asked for comments on AT&T'sproposal to apply the "equivalence" standard tocentral office-interconnected private lines.AT&T's proposal dates back to February 1990when AT&T sought a ruling by the FCC thatcertain private line interconnection
arrangements between the U.S. and Canada wereunlawful.
In November 1992 the FCC decided a test casefor the simple resale policy involving theproposed resale of U.S.-Canada private lines byFonorola and EMI. The FCC found that Canadadoes offer "equivalent" resale opportunities toU.S. carriers. The FCC found that Canada,while not yet permitting facilities-based
competition, has a vigorous and competitiveresale market. The FCC also noted that Canadaaccords non-discriminatory treatment to allresale carriers, whether Canadian or U.S.owned. Therefore, the FCC granted simpleresale authority to Fonorola and EMI betweenthe U.S. and Canada. However, in response tothe Canadian policy prohibiting the bypass ofCanadian facilities for intra-Canada or Caoada-overseas traffic, the FCC limited Fonorola andEMI to providing direct (i.e., non-transit)traffic between the U.S. and Canada. The FCCalso reserved the right to modify or rescindits decision should Canada stop affording"equivalent" resale opportunities to U.S.carriers.
The FCC has already been presented with thenext application of the simple resale policy.In November 1992 ACC Global filed an
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application for authority to provide switchedservices through the resale of U.S.-U.K.private line services. The comparativeopenness of the U.S. and U.K. markets has beensubject to extensive debate in the U.S. forsome time. Based upon the FCC's decision thatCanada offers "equivalent" resaleopportunities, the presumption should be thatthe FCC will grant the application withconditions. While Sprint has been frustratedin its effort to enter the U.K. market on afacilities basis, the FCC did not holdfacilities-based competition to be a relevantfactor in granting authority to Fonorola andEMI for Canada. Nevertheless, the ACC Globalapplication may be decided in the context ofthe on-going discussions between regulatoryauthorities in the U.S. and the U.K. regardingthe pace and focus of telecom liberalization inthe two countries.
Several issues remain to be decided. The FCCrecently postponed any decision on whether the"equivalence" standard will apply to non-commoncarrier facilities, such as separate satellitesystems and private fiber optic cables. AT&Thas pressed the FCC to apply its policy to allfacilities which permit a private line-typeoffering to be interconnected to the U.S.public switched network. However, the FCC didclarify that the "equivalence" standard doesapply when private line facilities arepurchased by a common carrier from a separatesatellite system or a fiber optic cable systemand then are used by a resale carrier toprovide switched services to the public.
Some lingering uncertainty regards thedifference between the purchase of private line"facilities" and "service" by a U.S.international carrier. In the former case, acommon carrier is not regarded as a resalecarrier, and therefore is not subject to thesimple resale policy, when it provides switchedservice over facilities which it has purchasedfrom another entity. In the latter case, acommon carrier is regarded as a resale carrier,and therefore is subject to the simple resalerule, when it furnishes switched services toits own customers under private line servicewhich it takes from another entity on asubscription basis. As parties become creativein portraying the acquisition of transmissioncapacity as a sale of facilities rather thanthe provision of a service, questions may beraised about the proper scope of the FCC'ssimple resale policy.
Mr. Aamoth received his A.B. from theUniversity of Michigal: in 1979 and his J.D.from Harvard University in 1982. Mr. Aamothhas represented domestic and internationalcarriers, users, equipment manufacturers andtrade associations. Mr. Aamoth advisestelecommunications entities regarding U.S.regulatory policy and the development ofregulatory and business strategies incompetitive markets.
Sable 1
1991 ACCOUNTING RATES WITH U.S.
Country AccountingRate
Afghanistan* 12.69 GFAmerican Samoa** 2.00 $Australia** 0.68 SDRBangladesh* 2.25 $Brunei* 2.00 $China* 7.50 CFCook Island** 3.00 $Fiji Island** 2.65 $French Polynesia** 2.80 $long Kong* 1.90 $India* 2.25 $Indonesia* 2.75 $Japan* 1.13 SDRKiribati** 4.00 $Korea. South* 1.90 $Laos* 12.00 $Macao* 2.20 $Malaysia* 1.80/1.20 $Myanmar* 5.00 $Nauru** 2.00 5Nepal* 2.00 .$New Caledonia** 2.80 $New Hebrides** 4.00 $New Zealand** 1.40 SDRNorfolk Island** 3.00 $Pakistan* 2.30 SPapas New Guinea** 1.50 SDRPhilippines* 1.85/1.50 $Singapore* 0.68 SDRSoloman Island** 2.50 $Sri Lanka* 2.20 $Taiwan* 1.60 $Thailand* 2.00 $Tonga** 2.00 $Western Samoa** 1.50 $
SDR = Special Drawing RightsGF = Gold Francs$ = U.S. Dollars
= Asia** = Oceania
BEST COPY PRP"! r453
Table 2
IargRUATIOMAL MaSSAGE TICUIPSIONE SERVICE OF Taa UNITS:0 SPAT'SrOa TIOt ASIA-PACIFIC RACIOU VS 1980
Country
Originating in the United States Terminating in the United States
Number ofMinutes
US Carriers'Revenue
PTTPayments
Number ofMinutes
US Carriers'Revenue
Afghanistan 72,098 $23,135 $231,947 20,589 $35,771American Samoa 4,095,127 $2,860,805 $3,633,580 3,000,311 $2,913,542Australia 93,632.044 $75,884,214 $52,229,388 87,290,798 $51,276,331Bangladesh 9.944.816 $5,460,534 $11,649,922 878,942 $991,668Brunei 343,763 $260,497 $330,339 191,210 $185,731Caroline Island 50,135 $44,405 $38,650 102,981 $82,521China 32,773,881 $7,616,547 $51,114,847 12,929,121 $20,244,867Cook Island 74,920 $74,338 $158,897 39,723 $53,182Fiji Island 2,841,7'3 $1,063,931 $3,847,705 850,355 $1,123,285French Polynesia 1,297,142 $364,334 $1,699,622 498,383 $681,711Hong Kong 85,438,746 $30,664,474 $91,672,488 67,240,303 $76,041,970India 58,847,978 $65,923,440 $60,706,246 37,486,875 $40,704,124Indonesia 25,441,797 $14,363,820 $26,487,953 10,049,962 $11,075,872Japan 319,753,850 $147,320,543 $280,467,812 245,427,886 $224,868,101Kiribati 30,769 $17,506 $57,331 16,849 $16,040Korea, South 164,827,039 $73,268,079 $166,685,337 53,251,215 $56,313,228Laos 86,153 $86,016 $197,428 34,739 $57,604Macao 1,125,697 $99,089 $1,693,783 251,585 $297,149Malaysia 21,995,320 $11,762,753 $21,548,730 8,012,262 $8,007,341Myanmar 402,865 $185,350 $1,106,342 84,499 $199,226Nauru 13,580 $22,370 $15,411 11,330 $7,224Nepal 1,079,441 $1,273,282 $1,046,134 373,220 $362,459New Caledonia 170,421 $36,184 $234,679 72,475 $106,795New Hebrides 50,188 $62,389 $112,521 37,387 $64,796New Zealand 18,249,650 $8,590,206 $19,970,976 14,399,678 $16,726,232Norfolk Island 2,592 $5,080 $4,012 7,140 $8,835Pakistan 42,905,865 $27,748,739 $47,940,843 4,153,767 $4,869,241Papas New Guinea 919,520 $577,442 $837.632 773,342 5802,260Philippines 165,041,692 $96,374,927 $156,642,894 17,768,639 $16,121,024Singapore 33,994,575 532,563,651 $18,623,089 27,519,649 516,047,177Soloman Islands, British 59,633 $20,095 $129,403 53,440 $92,043Sri Lanka 3,559.826 $2,853,137 $3,670,779 896,403 $986,620Taiwan 120,169,707 $62,973,195 $102,972,496 60,977,522 $54,848,566Thailand 38,427,095 $15,594,3,0 $43,815,764 10,908,772 $12,435,726Tonga 2,248,830 $2,330,448 $2,373,627 322,649 $248,471western Samoa 636,789 $593,589 $466,504 220,899 $173,655Other 465,650 $698,849 $2,096,967 2,111,066 $2,043,091
Total 1,251,071,367 $689,961,733 $1,176,712,078 668,265,966 $621,115,479
Table 3
Countries With Whom U.S. CarriersHave Negotiated Growth-BasedAccounting Rate Arrangements
AnguillaAntiguaBrazilBritish Virgin IslandsCayman IslandDominicaGrenadaIranItalyJamaicaMalaysiaMontserratPeruPhilippinesSenegalSt. KittsSt. LuciaSt. VincentTurks & CaicosUruguay
KNOWING WHAT TO ASK FOR:Privatization of Telecommunications After the Digital Revolution
Guidelines for the Host Country
Robert A. F. ReisnerPutnam, Hayes & BartlettWashington, D. C. USA
1. ABSTRACT
Privatization of telecommunications has become a popular economic strategy that nationalgovernments will find more difficult to employ in the future. In the age oftelecommunications technology convergence, privatization investments will become morevolatile unless "lost countries act to stabilize the regulatory environment. 'Regulate earlyand regulate often, but with a light hand' are three of the seven guidelinesrecommended here for countries considering telecom privatization.
2. INTRODUCTION: TELECOM PRIVATIZATION
Telecommunications privatization is now apopular strategy for accelerating the development ofnational economies and providing numerous otherbenefits as well -- creating new classes of equityshareholders, enhancing the return on their investmentsand obtaining critically needed telecommunicationstechnologies and management expertise.
Since the tool of telecom privatization hasproven to be both financially successful and politicallyacceptable in Great Britain, Japan, New Zealand, Chileand Mexico in the 1980s, there are now a long listof nations that are currently privatizing andderegulating their telecommunications sectors.(1)Indeed, privatizations are now under activeconsideration in more than 20 countries worldwide.
But if Phase 1 of telecom privatization duringthe '80s has proven popular, the second wave ofprivatization in the '90s will be far more complicated.
The dilemma for host governments is thattoday, when they are under greater pressure to askfor more from investors, they are less capable ofenforcing their demands. The business environmenthas changed. The convergence of telecommunicationstechnologies following the digital revolution has madethe world more competitive than it was in the 1980s.Since there are often multiple communicationstechnologies that may be used to provide similarservices to consumers, the opportunities for by-passinggovernments and their regulations are multiplying. Forhost countries, knowing what to ask for from investorswill be an increasingly subtle question.
This paper explores the basic question that nowfaces many host countries planning the privatization oftheir telecoms: What should they ask of telecominvestors? When should the investor be shelteredfrom competition and for how long? How shouldhost governments seek to benefit from the inevitablecompetition in telecommunications services?
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First, this paper reviews both the factorsthat have lead to the increasinglypopular character of telecom privatizationand the reasons that it will be difficultto use the tool effectively in the future.
Second, privatization in the '90s, the ageof technology convergence, will bedifferent from the first phase, during the'80s, because the business environmenthas changed. This paper explores thecompetitive implications of thistechnology shift.
Finally, to encourage successful telecomprivatization in an era of growingcompetition, countries be have to be farclearer about the regulatory frameworkthat will define the future rules of thegame. This paper concludes with adiscussion of seven specific guidelinesthat argue in favor of an earlycommitment to light handed regulation.
2.1 A Growing Interest In Privatization
The popularity of telecommunications privatizationis readily understandable. Privatization, seen in theafterglow of the successes of Great Britain, Japan,Mexico and Chile, has been demonstrated in practiceto be an effective tool for obtaining multiple benefits:access to sources of private investment capital, avehicle for introducing of management efficiencies, forobtaining technologies that might otherwise beunavailable and providing local capital markets with anopportunity to share in the financial rewarc's that areavailable to those who have modernized theirtelecommunications systems and met growing businessdemands for state-of-the-art services. Indeed, theconcept that modern telecommunications is an"essential link" in the development process has beenwell established for a decade(2).
Today, telecom modernization is a wellaccepted goal and privatization has received solidendorsement as a strategy for achieving it. Forexample, in 1992, the World Bank completed a seriesof studies examining 'The Welfare Consequences ofSelling Public Enterprises' and has published amultiple volume analysis of 'Experience and CaseStudies"(3). These and other recent studies examiningthe role of privatization as a tool to encourageinvestment have contributed to broad consensus infavor of the concept of modernization through telecomprivatization (4).
The fact that world trade today requires mcderntelecommunications systems in order to permit globalaccess has provided the strongest proof of all.Communication is needed in global trade to order,schedule, manufacture and transport goodsinternationally. The practice of providing goods tocustomers "just in time" to reduce inventory carryingcosts and to respond more rapidly to market trendsdepends upon modern communications. Goodsranging from consumer electronics to apparel are oftensold by country A, assembled in country B from partsmanufactured in countries C and D and shipped tocountry E.
Modernization is an enabling step needed foreconomies to be competitive in the internationalmarketplace. In fact, a recent article in the HarvardBusiness Review argued that for the moderncorporation 'Capabilities Based Competition' was thekey to competitive strategy in the globalmarketplace(5). The concept is that for a corporationto be as successful as a global retailer like Waltmannow requires that companies master the intricacies ofcommunications technology. As a result, successfulglobal corporations will work most often in countriesthat make this possible.
Of course, the pattern that privatization willfollow will not be the same everywhere in the world.In fact, . as modernization takes place in manycountries, the variations and hybrid forms are likely toincrease. Today, privatization seldom involves thewholesale transfer of assets to foreign ownership.Variations in the degree of ownership and in theextent to which telecom facilities are privatized presentmany different models. In some locations, selectedservices such as paging and cellular telephony arebeing privatized. In others, digital overlay networksand high speed data networks are the focus of theprivatization process(6). But, whatever form and withwhatever speed, many nations are headed toward thecreation of private telecommunications enterprises.
2.2 The Troubled Second Wave
Unfortunately, the path to the second wave oftelecom privatizations will not be a smooth as wasthe first. The reasons are abundant.
First, critics of privatization and policy makersfrom the national government have learned more aboutthe process and will almost certainly ask more offuture investors. The perception that investors alreadyreceived 'too good a deal' from politicians who 'gaveaway the store' will cause some nations to clampdown on the process and to write more stringentregulations to place more serious demands on outsideinvestors(7). In the future, if the critics have theirway, it will be more difficult for the investor to obtainan exclusive franchise with long term guarantees.
Second, labor unions, government bureaucratsand others who are enfranchised by the currentsystem and who may feel that they have reason tobe concerned about modernization will be betterequipped with arguments. The International FinanceCorporation reports that there are numerous telecomprivatization programs that have been stalled for justthese reasons in many parts of the world(8). Butwhatever the cause, in the second wave, there will begreater pressure to demonstrate social benefits and toshare the wealth.
Third, more nations are competing for accessto capital markets. The popularity of telecomprivatization will encourage more competition for limitedinvestor attention and investment resources. What ismore, while the lessons from past experience includeChile, Argentina, Mexico, Great Britain, New Zealand,Australia and Japan, the future nations scheduled toenter the competition are likely to have economiesthat offer less desirable or fundamentally differentinvestment profiles. The second wave includesfundamentally different types of nations: centralizedeconomies moving away from their socialist roots,developing nations that may still have substantial tiesdating from their colonial days and modern, rapidlyindustrializing economies.
Finally, telecom privatizations all entailcomplicated steps that must be taken by hostgovernments and telecoms: writing new investmentlaws, developing new regulations to protect nationalsecurity and other social interests (e.g. universalservice), the requirement to restructure managementand train personnel during the transition to newmanagement and new accounting systems, therenegotiation of labor and wage agreements and theinstallation of new telephony architecture needed toaccommodate new rate structures (e.g. measuring localtraffic). These tasks will not be accomplished easily.
Weighed down with these requirements andentering an increasingly contentious politicalenvironment, many host countries may be tempted tosettle for less. They may decide to rely upontraditional public monopolies and hope for the best.Ministers of Communications may be especiallyreluctant to support modernization, restructuring andprivatization when the added burden of the competitiveconsequences of technology convergence becomesapparent.
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3. THE CHANGING BUSINESS ENVIRONMENT:TECHNOLOGICAL CONVERGENCE
The emerging business environment in whichfuture telecom privatizations must Lake place will posenew difficulties for host countries. A variety oftechnology innovations, all fundamentally resulting fromthe digital revolution, are leading to the developmentof new communications media that are bothfragmenting markets and dramatically increasingcompetition. The introduction of new microelectronics,the dissemination of computer technology, theintroduction of mobile telephony, advances in highspeed digital communications and the liberalization ofsatellite communications are all forces that are workingtoward the development of multiple substitutes that willfacilitate future communications. Such technologysubstitutes will be combined in dozens of hybridforms.
In essence, the communications networks of thefuture will conspire to defeat heavy handed regulatoryregimes. Social and political demands may result inperpetuation of old monopolies or seek to create newtight government controls. But they are likely to befrustrated by the multiple technology choices that willbe available to the future telecommunicationsconsumer.
In the developed world, the introduction ofpersonal communications systems to supplementcellular telephony can already be seen as a vehiclefor opening new pathways and integrating newcommunications networks. Local loop telephonecompanies today rind themselves competing withcellular television networks and bypass fiber opticnetworks to provide telephone service. Theintroduction of new satellites (separate systems, formerSoviet satellites, domestic and regional satellitesystems, plans for Low Earth Orbit satellites) all offernew possibilities for new VSAT networks and pathwaysthat will bypass traditional bureaucratic structures.And these innovations are just the beginning.
In a recent client publication (investmentresearch published by Goldman Sachs and Companyin July, 1992 -- "Communacopia: A DigitalCommunications Bounty")(9), one investment bank haspainted the picture of a future broadband digitalnetwork involving multiple technologies and services(cable, local telephony, long line carriers, broadcastnetworks, television stations, satellite transmission, PCs,data networks, PCS, and others) arrayed inincreasingly interrelated customized networks. If theexperience of competition in the U.S. long distancecommunications market is any measure, the growingcompetition among future media companies to providecustomized communications services to meet varieduser needs will result in substantial price reductions(35% in the U.S.) and service innovations that willcreate a future business environment that is radicallydifferent from that which has been known in the past.
For the host government privatizers of telecoms,this convergence of technology is likely to create bothproblems and opportunities.
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The most significant problems will face thosewho may wish to rely upon monopoly structures tocontrol traditional communications pathways. Acommon approach to privatization, often because it isdemanded by the international investor, has been totransform state enterprises, or public monopolies, intoprivate ones. Since telecommunications has historicallybeen considered to be a natural monopoly, theapproach is understandable(10). But whatever themotivation or strategy for seeking to prete^: markets,the new possibilities for technology by-pass make itincreasingly difficult to protect monopoly structureswithout undermining the eccfromic growth andefficiency that was being sought in the first place.
On the other hand, for nations that may seekto embrace competition, the technology revolution mayoffer opportunities as well. First, the move to thenew competitive market is likely to be irresistible inany case. Customer demands for moderntelecommunications services will force themodernization process forward. Over time, the jobswill move to those nations that can provide access tothe global market. There could not be a morepowerful stimulus to change.
For those countries that have sought to takeadvantage of competition (to maximize consumerwelfare by obtaining competitive prices and betterservice) and those who are attempting to usecompetition to protect their economies from controlfrom abroad, the co' ergence of technology and theincreasingly competitive world that it will create offersnew opportunities to gain control.
Most importantly, competition can aid thosenations worried about how much to ask for. Theanswer will ultimately be found in the marketplace.Whether to divest national assets or to retain them injoint venture relationships at any given point in timeis a question that can be answered by allowing themarketplace to set the price of divestiture and thenanalyzing whether optimal value would be obtained byselling or holding onto the enterprise.
Investors in privatization, however, will havesome difficulty in hearing that more competition isgood for everyone (themselves included). For theinvestor there is already plenty of uncertainty. Thebalance of this paper offers several examples of theway in which this interaction between investor andhost country is taking place today. The vehiclethrough which the varied interests may be balancedis to be found in creating an effective regulatoryprocess. The ccncluding section the paper offersguidelines for host country policy makers to use inconsidering the new regulatory scheme.
4. A TALE OF TWO COUNTIES: COMPETITION,PROBLEMS AND OPPORTUNITIES
Managed competition must work for both thehost country and for the investor if it is to besustained over time. The issues that are raised intrying to strike such a balance can be seen clearlyin two recent examples drawn from consultingexperience.
My firm, Putnam, Hayes & Bartlett has beenworking with the Russian government for nearly twoyears to assist in the privatization of key industries.In the course of this engagement, we have workedwith a Russian joint venture to develop atelecommunications enterprise using Intersputniksatellites. The second example, is drawn fromexperience counseling a small island nation in thePacific. This case offers what would seem to be themost remote possible comparison with the issuesfaced by the Russian Republic. But in fact, bothcase examples offer a perspective on the dynamics ofthe coming competitive market.
4.1 Russia, The Case for Regulation
The Russian telecommunications system is mostdefinitely not modern by western standards. Sincethe Russian Republic's communications needs are sogreat, Moscow has been the focus of competitionamong many of the major telecommunicationscompanies. At the time of the coup, there werefewer international communications circuits in existencethan might have supplied a small apartment building.To address the need for international communications,multiple projects of every description are now inplanning, if not in effect.
Potential investors, however, can plainly see thatthe uncertainties imposed by the Russian economy'slegal and regulatory system and evolvingtelecommunications infrastructure are such that seriousreform is lagging the nation's requirements. Given theexpanse of the country's telecommunications needs, itmight seem that there would be sufficient reasons forinvestors to be interested in Russia, almost withoutregard to the details. Investors, however, arecircumspect in the face of competition when they donot receive guarantees that assure them of favoredtreatment in an uncertain business environment. Aslong as it is difficult for investors to see that they areacquiring unique facilities, competition will inhibitinvestment.
But, in Russia, it would be difficult for thegovernment to modify this condition and makeinvestors too comfortable. The uncertainties associatedwith the transformation of the entire economic systemare so great that it would be difficult for the Russiansto provide meaningful guarantees of exclusivity evenit the government were to wish to do so. Here,property laws are not yet existent, foreign investor lawis ambiguous, currency conversion is a problem. Thebusiness traoitions of the west that rely upon theconcept of enterprise, accounting standards andbanking relationships are non-existent.
In Russia, since the uncertainty thatcharacterizes the business environment is so great,free ranging competition is a practical reality. But asa result of the fact that the government cannot makeassurances of monopoly control, the interim step --management of competition -- becomes all important.Where it is impossible to guarantee the outcome (e.g.:a non-competitive market), the regulatory process thatwill govern the rules of the game in the interimbecomes all that investors can rely upon.
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The Russian case applies to many countrieswhose future telecommunications systems areuncertain. Even where political institutions may bestable, the evolving application of telecommunicationstechnology is not. Investors have to be shown thatregulatory clarity, due process and good faith policyconsistency are attributes to be valued even abovemonopoly franchise guarantees which would bebypassed anyway.
The privatization process in such instancesshould focus on building a stable regulatory systemfor it cannot provide other meaningful guarantees.Indeed, in the post-digital age technology change islikely to become so common that, competition in adependable regulatory environment will become moreimportant as an incentive to investors than dubiouspromises of monopoly control would ever have been.
The argument that guarantees are all relativeand competition is inevitable, however, does not meanthat the host country should conclude that anythinggoes. From the host country's point of view,competition in measured doses will enhance value.Predatory competition, however, will be debilitating andencourage practices and may ultimately corrupt theeconomy.
The need for managed competition can beseen plainly in Russia; the example of the smallisland nation essentially demonstrates the same point.The two cases would seem to be as different fromone another as could be possible. But both nationslace the problem of the need to encouragecompetition to establish value. In the absence of amarket it is difficult to properly value assets thatmight be transferred. In both cases, the centralproblem is to create market conditions that are fair toall.
4.2 Establishing Value in the Pacific
The small Pacific island nation sought advice indeveloping a strategy to guide its telecommunicationsprivatization process. The small telecommunicationssystem in existence today requires dramaticmodernization that would seem to depend uponforeign investment. But since the system was smalland relatively simple, the argument was made, therecould be only one telecom provider. Competition didnot seem feasible.
What is more, it seemed possible that with asmall, simple system and one provider, regulationwould be too expensive and cumbersome to be costeffective. Some argued that the only realisticregulation could come from social pressure rather thanlega: and economic strictures anyway. In otherwords, the case was being made by one investor andits allies that the only feasible privatization plan wouldbe to create an unregulated private monopoly
An alternative approach that is readily availableto a Pacific Island and to a Russian Federation alikewould be to seek to manage competition to obtainthe best value. In the modern telecommunicationsenvironment, there are numerous potential investors,
1. 9
even for a small system. Encouraging competitors tooffer bids (on parts of the telecom system, if not thewhole enterprise) provides a mechanism for solicitingcomparative perspectives. Bidders might even beasked to propose innovative approaches to building acompetitive market over time.
A bidding process could be used to solicitinitial investors. But it should be seen as a one-timegrand event. Because there will be changes overtime it should also be an ongoing procedure subjectto periodic review. Future modification is sensiblesince both the host country and the investor will haveto be satisfied that they have obtained the bestpossible deal and the only way to be certain will beto subject the arrangement to the repeated test of themarket.
4.3 Regulating Early and Often
In the case of the small island in the Pacific,as in the case of the Russian Federation, there is aperception on the part of the country that because itis seemingly defenseless in comparison with the wellfinanced representatives of investors that it will havedifficulty in understanding their proposals or inknowing what to ask for. The answer in both casesis that the market will provide answers by revealingthe prices that the competitors are willing to bid.The solution in both instances is to develop aregulatory process to which the host country isunambiguously committed, that will provide dueprocess and fairness for investors. What is more, theregulations must be written up front.
There are a number of reasons why it isimportant to write the regulations in the beginning.
First, designing the regulations first is arecognition of the fact that privatizationis a process and not an event.Investors must be able to have arealistic expectation that their returns willbe realized, that they are being treatedfairly, and that grievances will be givendue process consideration.
Second, the development of regulationsis a realistic recognition of the fact thattelecommunications systems mustbalance scarce commodities such asradio spectrum and must meetsometimes conflicting social objectivessuch as encouraging businessdevelopment while also providing forsocial goals such as universal service.
Third, the regulatory process secKs toestablish equity and guides choices thatmust be made in order to set pricesthat are a fair balance betweenconsumer value and investor return.Without knowing what will be chargedand on what basis the charges will beregulated over time, it is impossible for
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an investor to accurately asses the valueof telecom assets.
But developing regulations will require a servesof decisions that are difficult at best -- how shouldprices be regulated over time? (price caps versus costbased regulation?) How should interconnection costsand network charges be allocated? How shouldservices be packaged? (bundled 'or the marketplace?)How should rules be established concerning networkbypass?
Simply outlining the questions highlights thepoint that regulation writing requires the developmentof institutions as well as rules. It is unlikely that ina dynamic sector such as telecomm lications that therules could be written correctly the first time. In thecase of Japan, Great Britain and the U.S.,telecommunications modernization has beenaccompanied by changes in industry structure and thecreation of institutions needed to regulate thetransition. Indeed, as much thought should be givento this process of institutional development as to therule writing itself. In the er...!, the rule makers cancost more than the benefits that they produce. Eventhe best rules should be administered with a lighthand.
5. KNOWING WHAT TO ASK FOR: SEVENGUIDELINES FOR HOST GOVERNMENTS
To summarize, the process of telecommodernization is likely to continue to gather speed.The dynamics of the global market will demandcommunications access. The technology, in fact,competing technologies, will be available to provide it.Hence, the tool of telecom privatization that has beendemonstrated to be a successful vehicle to facilitateinternational investment and technology development.
The second wave of telecommunicationsmodernization will be different from the first, however,since the experience to date will encourage the criticsto press for better deals and, at the same time,technology convergence will facilitate competitiveaccess. Host countries will have to abandon traditionalreliance upon monopoly structures and embrace thenew competition to satisfy customer demands.
Seven guidelines that outline a path for doingso include the following:
5.1 #1 Embrace Competition
Competition, rather than monopoly, will be thedominant pattern of the telecommunications industry inthe next decade because of the technological changesmade possible by the digital revolution. Even if therewere not economic efficiency and consumer welfarebenefits that were conveyed by encouragingcompetition in the restructured telecommunicationsindustry, the practical competitive reality of theinformation age suggests that host countries shouldseek to benefit from it rather than have their plansfrustrated by it.
5.2 #2 Regulate Early...
In the telecommunications industry today thereare so many competing interests at stake that theywill only be balanced through the design and earlyannouncement of the regulatory scheme. The benefitsto be obtained by providing relative certainty toinvestors will outweigh the potential costs. While itmay not be necessary to fully design a rate makingscheme, nonetheless, when investors are able toimIculate their potential stream of earnings they will beable to move more quickly to make commitments tocreate new ventures.
5.3 #3 ...And Regulate Often...
Realistically, it will be difficult to outline aregulatory scheme at an early stage that will anticipateall possible contingencies. Further, privatization shouldnot be seen as an event but is instead a process(11)that must evolve over time. Thus, the regulatoryscheme should anticipate the need for periodicadjustment and fine tuning.
Since there will be no single evaluation of thevalue of assets or businesses created by the telecom,market structures and institutions that can police themarket and establish fairness will be needed.Principles of notice and redress and a concept of dueprocess are essential if everyone, investors andconsumers, are to believe that competition will bebeneficial to all.
5.4 #4 ...With a Light Hand
Regulations may sometimes cost more than thebenefits that they seek to obtain(12). Given thedynamic character of the evolving telecommunicationsmarketplace, there are almost certainly consumerbenefits to be obtained by permitting the competitorsprovide service using a variety of techniques overtime. In the U.S. and in Great Britain the objectiveof encouraging innovation has been addressed throughthe development of a scheme of 'light handedregulation'(13). At the same time, the regulators mustbalance competitive instinct with some degree ofquality regulation to protect against servicedeterioration resulting from too light a regulatoryhand. (14)
5.5 #5 Think Strategically AboutImplementation Tactics
Above all, the transformation of key industrialsectors and the transfer of significant wealth are highlycharged issues and the process of privatization, asthe World Bank notes, is likely to be very political.As a result, the multiple steps in the privatizationprocess should be structured strategically to encouragethe creation of a commercial entity first and theestablishment of institutions that can support theprivatization process. The host country should becareful not to permit the creation of enfranchisedconstituencies that will kill off the reforms before theyare born.
5.6 #6 Optimize Long Term System Values,Not Individual Parts
To establish a process that will contribute tothe best interests of the host country, value must beseen in the long term. By establishing policyguidelines as suggested above, the long term valueof national assets can be analyzed in market termsand the host country is less likely to sell too soonor to hold on too long.
5.7 #7 Knowing What to Ask For:Know what its Worth
Host countries should recognize that theprocess of privatization and modernization reauires atrade-off that balances competing objectives. Obtainingthe "best price' means establishing a realistic balanceamong social and economic objectives and finding thebest fit between investors and consumer interests. Toknow what to ask for requires that the host countrymeet its obligations first by writing regulations thatgenuinely express national goals and buildinginstitutions that will administer them in a fair andobjective manner.
To establish value it will be necessary forinvestors to know the terms under which the newtelecom will be permitted to do business. Without asen:3e for the regulatory scheme and the process thatwill be used to administer it, such evaluation will bepurely hypothetical, investment will become morevolatile and the best of intentions will be frustrated.But with skill, host countries should be able to usethe competitive forces of the post-digital revolutionworld to achieve the most stable balance for thefuture.
4 A-1
Endnotes:
(1) A recent summary appearing in the FinancialTimes showed a long list of telecom privatizationprograms to be 'Active" (Hungary, Israel, Panama,Portugal, Singapore, Uruguay) and 'Planned' (Brazil,Costa Rica, Czechoslovakia, Honduras, Indonesia,Ireland, Kenya, Nigeria, South Korea, Sudan, Swedenand Taiwan). Recent telecom trade missions to andfrom Eastern Europe have brought back the news thatactive consideration of privatization is taking place inevery one of the former Soviet Republics and EasternBlock countries. (Financial Times 15 October 92,'Privatisation Programmes: Momentum RemainsStrong").
(2) Saunders, Robert J., Jeremy J. Warlord andBjorn Wellenius. 1983. Telecommunications anoEconomic Development, Baltimore Md.:The JohnsHopkins University Press.
(3) The World Bank. 'The Welfare Consequences ofSelling Public Enterprises' and 'Experience and CaseStudies". Synthesis of Cases and Policy Summary,June, 1992 by Ahmed Galal, Leroy Jones, PankajTandon and Ingo Vogelsang.
(4) See in particular, William W. Abrose, Paul R.Hennemeyer and Jean-Paul Chapon, 'PrivatizingTelecommunications Systems: Business Opportunitiesin Developing Countries", Discussion paper 10,International Finance Corporation, 1990. BjornWellenius, Peter A. Stern, Timothy E. Nulty, andRichard D. Stern, A World Bank Symposium,"Restructuring and Managing the TelecommunicationsSector', 1989. Yoshiro Takano, Nippon Telegraph andTelephone Privatization Study: Experience of Japan andLessons for Developing Countries, World BankDiscussion papers #179, 1992.
(5) George Stalk, Philip Evans and Lawrence E.Shulman 'Competing on Capabilities: The New Rulesof Corporate Strategy, Harvard Business Review,March-April 1992.
(6) Ambrose et. al. IFC Discussion paper #10, p. 12.
(7) See Wellenius et. al., Chapter 1 Timothy E. Nulty,"Emerging Issues in World Telecommunications', andAbrose et. al.
(8) See Abrose et. al., p. 16.
(9) Goldman Sachs, Investment Research,'Communacopia: A Digital Communication Bounty'July, 1992.
(10) Ralph Bradburd, "Privatization of NaturalMonopoly Public Enterprises: The Regulation Issue",Policy Research Working Papers, Country EconomicDepartment, The World Bank, April, 1992 WPS 864.
(11) See Nolty Introduction to Takano.
(12) See Bradburd, p. 6.
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(13) See George R. Hall, "Regulatory Systems torPostal Rates" in Michael A. Crew and Paul R.
Kleindorfer, Regulation and the Nature of Postal andDelivery Services, Kluwer Academic Publishers, Boston,1993, p. 233 for a discussion of indexed regulationwith "yardsticks" and "caps". See also, DirectorGeneral of Telecommunications, 1992, The Regulationof BT's Prices. United Kingdom, Office of
Telecommunications; London, England; January, 1992.
(14) See Hall Chapter in Crew and Kleindorfer.
MEDICAL APPLICATIONS THROUGH NUMERIS,THE FRENCH ISDN
Claudine BiquillonFrance Telecom
Direction De L'InternationalMontrouge, Cedex
ISDN being the revolutionary service which enabled thedevelopment of specific applications as the ones we will talkabout today in the medical field.
Let us first have a quick look on ISDN to remind the mainadvantages which will be particularly useful in the health field.
We will then consider what ISDN can offer to an hospital withsome examples of practical applications.
ISDN, Integrated Services Digital Network was launched inBrittany on 21 December 1987.
FRANCE TELECOM is the world's first operator to have madethe service commercially available. It was opened in PARIS oneyear later and the national coverage was available in 1990. Itwas developed in accordance with International standards andtoday subscribers have access to many foreign ISDN networkswhich have been interconnected to the French one as AT&T,MCI US Sprint networks in the United States, BritishTELECOM in UK, Deutsche Bundespost in Germany, RTF inBelgium, KDD in Japan, as well as the ISDNs of Denmark,Switzerland, Singapore, Spain, Sweden, Norway, Italy, Hong-Kong, Australia and the Netherlands.
We expect more than 100,000 people to be using this facility inFrance before the advent of the Single European Market in1993.
ISDN: a reality and a major telecommunications innovationwhich enables voice, data and Image to be transmitted througha single standardized connection at a rate around 10 times fasterthan over the traditional telephone network.
Everybody knows the simplest installation using a telephone lineto connect up to eight different terminals on a series of ISDNsockets.
More important ins the use of ISDN by big organizations. Inlarge offices indeed, individual users are connected to theorganisation's PABX which is linked to the PSTN and ISDNnetwork through one or more primary rate interfaces.
In this example, the users are the different directorates usingtraditional terminals like telephone sets, fax, PCs or alsoconnected to a local area network. It could also he avidcoconference unit. For data applications, a direct connectionto ISDN can also he configured rather than a switched accessthrough the PABX to minimize the PABX congestion andreduce the points of possible equipment failure.
The big advantage of this configuration is that it can carry moretraffic over existing facilities or reduce the number of facilityleases required. Indeed, before ISDN, separate groups of trunkshad to he dedicated to each required network service. It was notunusual to have separate trunk groups for access to the centraloffice, to the packet switching network, to switched data service,etc. With dedicated accesses to many network services,individual trunks are rarely utilized to full capacity. The ISDN
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approach permits trunks (B channels) to be assigned dynamicallyon a call by call basis. The capacity of the networkautomatically changes in real time to meet changes in userdemand.
In this example, two hospitals and two offices in town areconnected both to the packet switching network and ISDNnetwork.
The doctor in town can call his colleagues in each hospitalthrough ISDN. He can also have access with his PC to the database of a hospital through the packet switching network, whichcan be a traditional configuration.
But, in this case, the big advantage is that any terminal, not evenindividually connected to the packet switching network, can haveaccess to any other terminal, like a PC or a big computer. A PCto PC dialogue for example can take place through the LAN ofhospital B then through the ISDN PABX, then ISDN networkthen PABX of hospital A and other PC. This same PC can alsoconsult the data base in the big computer through the same way.
Without changing the initial configuration with LAN, PABX,connection to packed switching network, ISDN allows generalcommunication through the whole organization.
France Telecom has built its developmental strategy of Numerisusing partnerships with data processing service providers andequipment manufacturers in order to develop modelapplications.
Here are some typical applications available today, which havebeen used as a basement for the development of ISDN in themedical field.
1) Electronic conferencing, audio or video:
Today face to face meetings are being replaced by abroad range of electronic alternatives, from three partyconference call to full motion video links between twoor more sites. Combining voice, video, fax and dataaccess and transmission ISDN makes all these optionspossible.
2) Distance learning is an effective mean for expertteachers to see and interact with students in remoteclassrooms, using video facilities.
3) Group 4 Facsimile machines used on ISDN bring newlevels of speed, reliability and quality.
4) File transfer applications are more efficient and costeffective. Typical applications are software up datesfrom a data center to remote locations in real time orimage file transfer for photographs, diagrams or othergraphics.
5) Document archiving and retrieval: remote users canretrieve actual images of documents from a centralstorage facility.
6) Image retrieval systems: As far as the health field isconcerned, the need for communications betweenhospitals, doctors offices, pharmacies and laboratoriesis considerable. Medical files with X-ray, ultrasoundand scanner views can be rapidly transferred throughISDN. Many other applications have been developedfor the travel agencies, libraries. b inks, audiovisualindustry, press, advertising.
Call tariffs are the same as those of the ordinary telephonenetwork or slightly more expensive for data or imagetransmission.
Access tariffs for basic access and primary access are given onthe next slide.
Terminals (telephones, terminal adaptors, micro PABX and miniPABX) can be rented at the following rates
1) Let us talk first of the implementation of ISDN in a hospital.
ISDN represents a motorway for the circulation of informationinside the hospital. The administration departments, dataprocessing services and medical services are directly involved.
The first major advantage of ISDN in a hospital is its capabilityto transmit data files. The data processing services usuallyimplement a local area network connecting the different users tothe powerful central systems. But internal occasional userscannot be forgotten. ISDN will be a cost effective means to givethem access to the medical information they need.
And this, with the simplicity of a telephone connection: duringthe time of the communication, the user is connected to thecentral services as any PC of the local area network. When hehangs up, the communication is over and the billing stops.
Moreover, if this user is connected to the PABX of the hospital,a few ISDN links can be enough for many users.
So, ISDN will represent an optimisation of the internal dataprocessing network.
2) But the biggest advantage of ISDN is to open the hospital tothe outside world in France and all over the world.
The different applications realized with the help of modems areavailable but with enhanced power and freedom. As far as datatransmission is concerned, the PSTN is indeed the most usedsupport through modems and communicating PC.
So, Data files can he transmitted to an outside user in anotherhospital or to a remote data processing center. Information canhe sent for example to the doctor in town who is usually incharge of the patient.
The outside institutions (social security for example),consultation offices outside the hospital, doctors in town.laboratories, data hanks, experts, other hospitals will have the
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same facilities to get or transmit information, from or to thenumerous departments of the hospital, should it be theadministration service or the treatment units, technicalplatforms, data banks, text and images services, consultationoffices laboratories.
We could also add all the other actors involved in the healthfield, such as pharmacies, biologists, and research centers.
While exchanging information on a channel, the partners willalso be able to establish a communication at the same timeusing the second channel of the ISDN access.
And the confidentiality of the transmitted information is alwaysguaranteed through the caller's identification or also through theminimessage which can be used as a password.
As far as the health sector is concerned, the 1)g innovationbrought by ISDN is the possibility to transmit d picture, bothmoving and stationery with maximum reliability, to establish adiagnosis for example. This picture can also be modified by anexpert.
Numerous applications have been developed in therapy likepathologic anatomy, emergency services, neurosurgery, radiology,pediatry but also in research and training.
Every picture which can be translated under a data processingprotocol can be transmitted.
Today most pictures issued from modern technologies are digitaland then can be used directly. If not, a scannerization processwill digitize them and allow them to be transmitted throughISDN.
The different sources can be a scanner, a microscope, a videosystem, nuclear medicine, endoscopy, echography.
Compression can be also used and offers bigger possibilities.
Helping to the establishment of a diagnosis, a data baseconsultation allows a quasi instantaneous interpretation: 1
second is enough for a graphic picture, 5 seconds are requestedfor a microscopic view.
A picture with the definition of a scanner will need 40 to 50seconds. But time is very subjective: the called party usingISDN second channel for the conversation can receive and stockmany pictures while the calling party makes its comments.
About the cost, what we can say is that picture can hetransmitted for less than one dollar.
The global configuration for image transmission is as follow:
First:Second:Third:
Fourth:
an ISDN connectiona communication carda transfer software on acompatible PCan application, using in thiscase a digitization module anda high definition colormonitoring
Communication card, transfer software and application areavailable tor about S40,000.
The use is very simple.
Traditional data processing orders arc used. A software for thepictures treatment can he added if necessary.
The working position can be a multimedia: pictures comingfrom different sources can be collected and assembled on thesame screen.
Real time remote diagnosis using point to point X ray imagetransmission is one of the numerous and major applications.
It is now in use in many hospitals in France. An emergency filemade of digitalized scanner or X ray images is established andstocked. This file can be transmitted to a specialist of anotherhospital. The can be discussed by the different doctors, each ofthem having the whole file. The best decision will be taken:local treatment or transfer of the patient.
On real time or through weekly appointments, these medicalcooperation is much on use in France especially in the diagnosisand treatment of cancers.
Another example is the anotomopathology application viaISDN.
The anatomopathology is the establishment of a diagnosisthrough the microscopic examination of tissues and cells. Itrequires high level specialists and the quality of the diagnosis isof the highest importance for the patient's future.
Then the confrontation of the different experiences andcompetence is necessary to reinforce the reliability of thediagnosis.
Till now, the French anatomopathologists (they are around1000) were used to send daily glass blades by the post.
With ISDN, they can exchange their opinions instantly and feedthe common data base. The doctor puts the blade under themicroscope connected to a camera. The image is digitized andtransmitted to the specialist of the considered organ. With thesupport a telephonic conversation at the same time, a reliablediagnosis can be established by the two colleagues. If the calledparty is not free. the image can meanwhile be stocked.
The doctors can also consult the reference base composeti ofpictures coming from specialists and validated by ScientificCouncil of the Profession.
This model of cooperation and consultation can be extended toother fields like dermatology, bacteriology, parasitology.
So, results of examinations can be available wherever they arerequested; telediognosis can be established, and data banks filled.
In hematology, the equipments are more and more complex andexpensive. The first French manufacturer has developed ananalyser which allows a multi-dimensional study of the leucocytepopulation, analysing simultaneously each of them. Thisfunction brings a new capacity of leucocytes classification withvery high sensibility.
The application developed on ISDN will bring the biologist thepossibility of operating this analysis system with a graphicenvironment of professional and scientific high level.
This continuously updated information and its instant accessreinforce the precision and speed of the interpretation.
But this is not the only advantage of this application. Atcicmaintcnancc development has been integrated, by linking thelaboratories and central maintenance center.
Information coming from the equipments is automaticallytransmitted. In case of failure in the software for example, theISDN link will allow a teleloading of a new version with the
appropriate connections. In any case, the waiting period hasbeen consequently reduced.
In epidemiology, the centralization of the distant teams workswith the use of the high capacity data processing equipmentsguarantees the synergy of the different studies all over the world.
Should ISDN have been available and used earlier, the Americanand French teams would have cooperated rather than competein AI Ds research.
Videoconferencing will allow meetings among the staff ofdifferent hospitals without trips. It can also be possible toattend a conference without having to go there.
As far as training is concerned, the constant exchanges betweenpracticians is the best mean to improve their competence.Trainees can also consult the available data bases and build theirtraining themselves. The comparison between different caseswill help him to interpret.
So distant work is facilitated. Data and pictures can be extractedto build a press article for example or a conference. The imagedata banks will be a very useful complement to text libraries.
CONCLUSION
The hospital technologies used by the medical profession aremore and more performant. The medical structures try at thesame time to improve their efficiency and "prestige".
Today data processing is not a management tool only but alsooffers updated and always available information.
Using the telecommunications, this information can go out ofthe hospital frame and reach the doctor in town, anotherhospital, an expert center in order to reach the synergy ofcompetence.
The French ISDN network allows the flow of any information,voice, data, image - forgetting the distances - for a betterefficiency of the medical services and at competitive prices.
Convergent Needs, Divergent Technology:Nursing Education for Rural Practitioners
J.L. TuckerDean of Professional Studies
Gonzaga University
Gail RayDirector and Chair, Department of Nursing
Gonzaga University
1. ABSTRACT
The convergence of telecommunications technology toward integrated systems capableof interactive data, voice and video transmission is primarily an urban phenomenon. Forthe isolated rural communities of the northwest quadrant of North America, the'converging technologies' of metropolitan society tend in fact to pose divergent choicesamong expensive and mutually exclusive technological alternatives of educational deliverysystems. Using a technical strategy of the least common denominator, GonzagaUniversity has implemented a videotape-assisted distance learner program for ruralnursing practitioners who frequently are the primary health care providers for remoteareas. As digital telephony gradually is extended to rural communities, an infrastructurewill emerge that permits upgrading the technological denominator to compressed video.
2. INTRODUCTION
The 'converging technologies' theme of this conferencereflects a worldview that presupposes the technical,organizational and financial infrastructure of urbancivilization. What usually is meant by convergingtelecommunications technology is broadband integratedservices digital networks or B-ISDN. (Terry, 1992; Eigen,1990) Nearly all of the professional literature on technicalconvergence takes for granted the availability of digitaltelephony and optical fiber networks. However, vastgeographical areas are served only by analog systemswhich cannot support even narrowband ISDN, let alone B-ISDN.
Published articles on rural telecommunications are rare,and even these few sources tend to assume at leastnarrowband ISDN or satellite infrastructures. (Morris,1991; Barnes, 1991; Hudson, 1989) The social reality isthat even when digital telephony is available, end-users inrural areas lack both the knowledge and the fiscal resourcesto take advantage of telecommunications. (Irwin, 1990)
When the topic of rural telecommunications is narrowed todelivery of educational services, the dilemma of ruralcommunities is further complicated by a bewildering arrayof media alternatives. Figure 1 below displays illustrativerather than complete examples of the various deliveryapproaches of some educational program providers in theNorthwest. Access to all of these diverse technologies iswell beyond the financial resources of any one ruralcommunity.
At the same time, telecommuncations is recognized as acrucial clement in economic development and rural re-vitalization (Dillman, 1987) Likewise, extending
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educational access to rural citizens is well understood asone important dimension of rural development. (Zumeta,1989) The choice of a delivery system for distancelearners is not only a technical decision but also isnecessarily a decision as to who will have access toeducation.
One inescapable consequence of this set of realities is thatrural communities are not empowered to make thedecisions which influence their destinies. (Burton, 1988)The availability of technical infrastructure is decided bytelephone companies whose investment and service policiesmay or may not take rural needs into account. Further,access to educational opportunity in health fields or otherareas is unilaterally decided by public and privateinstitutions who pursue their own agendas and who seldomcoordinate their activities with each other.
Though it has been na'ional policy in the United Statessince the 1940's to extead basic telephone service to allrural areas, policy has not included the emerging ISDNstandards of telecommunication. (Parker, 1989) Stateplanning seeks to manage and allocate telecommunicationsaccess to tax-supported systems (State of Washington,1992) but the divergence and proliferation of educationaldelivery systems continues unabated. It is in this contextthat strategies for nursing education are chosen.
3. CHOOSING A DELIVERY STRATEGY
There is no single decision rule or set of criteria foreducational service providers. Most programs for rural
FIGURE 1Educational Institutions Serving the Northwest
TECHNOLOGIES INSTITUTIONS USING
telephone bridge U. of WyomingU. of Alaska
videotape Gonzaga U.U. of IdahoGreat Falls College
ITFS microwave Washington State U.Gonzaga U.Spokane Community Colleges
point to point microwave Washington State U.Boise State U.-U. of Idaho
CATV Community CollegesDistrict 81 (K-12)
satellite transmission Educational Services District 101U. of British ColumbiaU. of VictoriaChico State U.National Technical U.
compressed video Oregon State systemWashington State U. (in progress)U. of Washington
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areas are designed by public institutions and internaldecision processes vary considerably in their assumptionsabout priocities and institutional mission. It is realismrather than cynicism to suggest that political constituenciesand budget competition are significant factors in decision-making by tax-supported institutions as to who will havewhat technological means of access to which ruraleducation. Moreover, within institutions there can bedistinctly different preferences between technicians andeducational programmers.
Point to point microwave transmission is preferred bytechnicians for its superior full-motion video quality.Academic programmers like the two-way interactivity ofthis approach. Such systems, however, like theWashington Higher Education Telecommunications System(WHETS), are capital intensive. Satellite broadcastingmaximizes geographical dispersion of signals, but requiresboth substantial investment in transmission equipment andhigh operational costs for satellite transponder time.Satellite technology also is not visually interactive.
The choice of technological strategy in public colleges anduniversities is complex, involving both internal facultypolitics and legislative support. The situation forindependent universities is quite different. Like any otherprivate sector entity, the parameters for strategic choice aresharply limited by cost-effectiveness and market response.
Gonzaga University, an independent Jesuit-Catholicinstitution located in Spokane, Washington, is the onlysignificant player in telecommunications among privatehigher education providers in the Northwest. Gonzaga'sdecision to enter the distance learner market was influencedby three factors; a value commitment to serving the under-served, the economic need to bolster revenue for afinancially marginal nursing program, and a fortuituous giftof the Burlington-Northern Corporation to finance atelevision classroom.
This last factor, a benefactor who funded a link with theWHETS system operated by Washington State Universityto foster engineering education, may be regarded either aschance or as providence. The external funding of asophisticated television classroom allowed the Universitythe luxury of exploring applications beyond the donor'sintent.
Barred from offering nursing courses over the WHETSsystem by academic turf politics, Gonzaga considered allthe technological means for meeting the urgent need foreducating rural nursing professionals. Satellitetransmission was not cost-effective. CATV options simplycould not reach rural communities. An independent pointto point microwave system was too costly to be consideredseriously. Though Gonzaga subsequently acquired a ITFSlicense, this means too could not reach rural areas. Atelephone bridge was feasible but was rejected for reasonsof educational philosophy.
The realities of rural infrastructure precluded ISDNapplications. Video digital compression was quite
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attractive for its interactive capacity, but two factorsprecluded its use. First, the codec capital cost ofestablishing a number of regional centers was beyond thefiscal reach of a start-up distance learner program.Second, the reality of so many rural areas in theUniversity's service area having only analog telephonyposed what may be called the 'digital curtain.'Communities without digital infrastructure are behind thedigital curtain and thus are excluded from ISDN-baseddelivery systems.
The technical strategy chosen by Gonzaga is best describedas the least common denominator principle. Within thefiscal constraints of a private university, the only means ofmaximizing both rural access and cost-effectiveness wasvideotape-assisted instruction. The ubiquitous dispersion ofVCR's in rural communities made videotape the logicalchoice for distance learner delivery. Given the digitalcurtain, VCR/videotape delivery was the only practicalmeans of reaching rural nurse practitioners across the entireAmerican Northwest and Western Canada. Sacrificinginteractivity for market penetration potential, Gonzagalaunched its distance learner baccalaureate nursing degreeprogram in 1987.
4. CONVERGING NEEDS OF RURAL NURSES
Dramatic changes in nursing practice make more urgent thenecessity for an increased number of nurses with advancedpreparation in nursing for both urban and rural settings. Inrural areas particularly, nurses are often the primary careproviders, using consultation when needed. Nurses areresponding to changes in client demographics, increasinglevels of acuity and complexity of health care needs,changes in health care policy and payment structures, aknowledge explosion with an accompanying short half-lifeof this knowledge, technological advances, and an evergrowing number of alternative delivery models and settingsfor practice (Chickadonz, 1990; Moccia, 1989; NLN,1989).
Nurses need a strong theoretical base to deal with complexclient needs, a growing number of ethical dilemmas, thelegal ramifications of practice, changing professionalaccountability, changing consumer participation, and theincreasing politicalization of health care. Changes inpractice demand changes in educational patterns.
Colleges and universities offering baccalaureate and higherdegrees in nursing tend to be located in larger urban andmetropolitan areas. Yet nurses in rural and smallcommunities are placebound; they cannot leave their familyand job obligations for extended periods to attend school.However, those who are placebound must haveopportunities to increase their levels of education in orderto improve the care and services provided to individualswho live in rural or underserved areas. Distance educationis essential.
Students enrolled in the nursing programs offered byGonzaga University are typical of the nurses who areplacebound. Most of students are Caucasian women in
their 30s, married with children, and working full-time.Most of those enrolled in the BSN program have graduatedfrom two year associate degree programs, are experiencedin nursing (10 or more years), and have aspirations toobtain a graduate degree. The majority of those enrolledin the MSN program hold baccalaureate degrees in nursingbut otherwise present a profile similar to the BSN students.All of the students from all programs fund their educationthrough a variety of sources, primarily personal funds andtuition reimbursement provided by employers, with limitedfederal, state or provincial financial aid.
Nursing students range in age from mid-twenties to early-sixties and have from 1 month to 35 years of nursingexperience. They hold positions in acute and extended careagencies, home health agencies, clinics, schools, industry,public health agencies, community colleges, residentialtreatment centers, developmental disability institutions,physician offices, and the military. Their positions includeflight nurse, geriatric nurse practitioner, clinical nursespecialist, director of nursing, surveyor/consultant, patientand/or staff educator, faculty, utilization reviewer,supervisor/nurse manager, and staff nurse. Approximately5% are men.
Although the percentage fluctuates by semester, currently56% of the 160 students are distance learners. They residein 39 communities located in 7 of the United States and 8communities located in 2 Canadian provinces. Theircommunities of residence range from small rural to largemetropolitan. Over half (58%) of the distance learners livein communities with a population of less than 25,000; 21%are from communities of less than 7500 and 37% fromcommunities of 7500 to 25,000. Another 12% live incommunities with a population of 25,300 to 50,000. Only6% reside in a city with a population of 75,000 or more.
5. PROGRAM DESIGN AND DELIVERY
The Department of Nursing offers two degree programs forregistered nurses, the Bachelor of Science in Nursing(BSN) and the Master of Science in Nursing (MSN), anda post-master's certificate program to prepare licensedFamily Nurse Practitioners.
All programs are offered both through on-campus anddistance learning formats. In some instances, students maycomplete the program through a combination of the formatsor change formats during the course of study. Bothformats are designed to minimize di.ruption in employmentthrough use of nontraditional scheduling. All cla.;ses oncampus are scheduled to meet once a week, and coursesusually taken together are clustered on one or two days toaccommodate work schedules and time off. Clinicalexperiences for many courses are arranged on an individualbasis to meet the needs of students and facilities providingexperiences.
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The distance learning format is offered to nurses livingmore than 30 miles from Spokane. Distance learnerscomplete the same requirements as on-campus studentsthrough a unique blend of distant and on-campus study andexperiences. Each semester, the classes are videotaped ina special television classroom while they are in progress.This room is equipped with microphones at student desksas well as the instructor's, special cameras to capture visualaids and all class participants, and good acoustics. Theequipment is state-of-the-art to provide high quality tapes.
The primary emphasis is on maintaining a normalclassroom atmosphere rather than making a commercialproduction; broadcast quality video is less important thaninstructional effectiveness. Within one day of the classesstudents are sent, via United Parcel Service (UPS),videotapes of the courses in which they are enrolled. In aweek to ten days, the tapes are collected by UPS for returnto the Department. They are then recycled for subsequentuse.
At least three times each semester, distance students spendtwo days on campus. During these days, they participatein classes with each other and on-campus learners, meetwith faculty for advising, register for subsequent courses ifneeded, utilize the library, and enjoy some fun andrelaxation with their colleagues. Dates are designatedmonths in advance to facilitate individual scheduling. If astudent is unable to attend at a designated time,arrangements may be made with faculty for an alternativedate.
Tests for classes are sent to paid proctors within thestudents' communities. Faculty adjust deadlines for papersor tests to accommodate the lag-time for the tape system;however, students complete courses within a week of theon-campus students or simultaneously.
When students are not on campus, they call faculty toconsult as needed for advising or discussing course orclinical issues. A toll-free telephone number is providedby the University. Students may also call faculty at home.Communiques are sent with each tape along with anyhandouts that have been distributed. Library services andother campus offices are also available through the toll-freenumber. In addition, students from mixed geographic areasoften establish their own systems to communicate with andassist each other.
Nursing courses and most of the non-nursing coursesrequired by the programs are provided through the distanceformat. The Chairperson of the Department of Nursingworks with the Dean of the School of Professional Studiesand other department chairpersons to identify and schedulenon-nursing courses to be taught with a video section fordistance learners. Undergraduate nursing students mustfulfill liberal arts requirements, and the availability of thesecourses via video must be negotiated with a variety of
academic departments. Generally, three or four coursesare provided during the course of two successive summersessions.
All of the Department's nursing courses incorporateseminar components in order to provide a forum fordiscussion and to assist students in considering theapplication of concepts in a variety of practice areas. Inaddition, many courses require group projects to buildcollaboration skills, increase awareness and use of groupdynamics, and enhance communication skills. Special careis taken to ensure student-to-student as well as student-faculty contact and to encourage inquiry and the exchangeof ideas.
Assignments are made without regard to geographiclocation and students are expected to make arrangements asneeded. The university library employs two professionallibrarians to serve distance learners in nursing and otherprograms. Students are encouraged to establish study anddiscussion groups, but these are not required andsometimes they are not feasible for people in very isolatedareas. Students have proved very resourceful inovercoming distance, however.
Clinical practice components of the courses are arranged bythe Gonzaga faculty for both on-campus and distancelearning students. Gonzaga faculty assume theresponsibility for selecting appropriate sites for the learningexperiences and appropriate individuals to serve as adjunctfaculty or preceptors. Adjunct faculty and preceptors areclosely linked to Gonzaga faculty and are oriented to thecourse, Department, and University prior to beginning theirresponsibilities. Gonzaga faculty visit clinical sitesperiodically to meet with students and agency personnel.A written agreement is signed with all facilities providingclinical experiences.
To the extent possible, students work with adjunct facultyor preceptors and obtain clinical experiences in their localareas or within a geographic area close to theircommunities (a one way commute within one hour isconsidered reasonable in the Northwest). However, ifneeded experiences are not available locally, students travelto other communities. For example, nurses in ruralcommunities may come to Spokane for selected experiencesavailable only in urban areas, while on-campus studentsmay travel to more rural settings to take advantage of theunique experiences they offer.
The distance learning format strengthens the nursingprograms and has many advantages, not only for distancelearners but for on-campus students as well. The diverseperspectives brought from different regions and types ofpractice settings challenge all students and faculty to thinkmore critically and globally about issues. The networksestablished by students in various locations increase theopportunities for clinical practice experiences for allstudents in the programs and have the potential to decreaseisolation in current and future practice.
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The videotape format requires a minimum of technicalinvestment by students and the University. It eliminatesthe need for people in isolated areas to travel to a fixedlocation at a fixed time on a frequent basis thereby makingthe programs accessible and realistic for those in sparsepopulation areas. Furthermore, the availability ofclasses/courses on tape increases the flexibility to meetspecial needs of students, whether they are enrolled on-campus or in distant locations.
Finally, because of the flexibility of the format, fixedextended campus sites do not need to be maintained. Thedistance sites are determined by the locations in whichstudents reside. This feature makes the program moreaccessible, strengthens the mix of students, and enhancesthe potential to prepare more practitioners for isolatedareas. It does, however, require greater effort by facultyto identify and develop clinical sites and adjunctfaculty/preceptors as locations shift, higher costs for traveland lodging, complex and costly procedures for processingvideotapes for distribution to students, additional facultytime for working with individual students via long distance,and creativity by faculty to blend the academic programneeds with the student needs and the format needs.
In summary, registered nurse students, nursing faculty, andUniversity administrators are enthusiastic and committed tothe distance learning format even though it is complex andlogistically challenging for all who are involved. Thefaculty and administrators believe the implementation of thedistance learning format makes a definite contribution inserving the needs of nurses and consumers of rural healthcare by providing the opportunity for nurses to obtain aquality education without requiring learners to leave theirhomes or employment for extended periods.
6. ASSESSING EFFECTIVENESS
Effectiveness has two dimensions; achieving the desiredlearning outcomes and cost-effectiveness. The Gonzagadistance learner program performs well on each criterion.
The educational effectiveness of the distance video-assistedformat is evaluated on two dimensions through comparisonsbetween on-campus and distance learners: grade pointaverages and retention rates. In both measures, the twogroups are comparable. Grade point averages earned inseveral non-nursing and nursing courses and compared atdifferent time points reveal variations of only 1 to 5hundredths of a grade point between the groups. Theretention rates of the two groups are 79% for on-campus,77% for distance learners while the overall University rateis 76%.
The cost-effectiveness of videotape-assisted distanceinstruction is evident. Over the five years since the firstESN program was launched, the department has doubled itsnumber of faculty positions, increased its operating budgetand recovered the capital cost of instructional equipment.In this time the ratio of direct costs to return on investment
has averaged 1:1.6, a very attractive cost-benefit ratio.The high return to overhead has not only expanded theresources of the Nursing Department, but has financedtechnical and capital improvements on the University'sinstructional technology capability.
In fiscal terms, the choice of a low tech option to meet thelowest common denominator of end-users has yieldedrevenue which has expanded both technical and programdelivery options. Other academic programs now use videoinstruction, including the University's four ITFS channelsthat were financed by nursing revenues. This points toanother, less tangible, benefit; the academic and economicsuccess of distance nursing education has legitimatized bothvideo instruction and distance learning in the eyes ofUniversity players who w're initially skeptical of the wholeidea. As the program has grown, so has the potential fora new generation of programs and technologies.
7. EMERGING ALTERNATIVES
There are two keys to future expansions of videoinstruction to rural areas. On the the technology side, the`digital curtain' remains the limit to use of ISDNalternatives. On the fiscal side, the key to both capitalinvestment in ISDN-based equipment and program deliveryis an expanded inventory of courses and services beyondnursing education.
Obviously, the capacity of service providers to use eithernarrowband or broadband ISDN depends on extension ofdigital telephony and optical fiber to small communities andrural areas. U.S. West, the primary carr;s for most of theNorthwest, is in the process of extendins both throughoutthe region. Though it is highly doubtful that B-ISDN willbe feasible for rural areas within the next two decades, theemerging digital infrastructure is sufficiently well dispersedto support a network of regional centers equipped withcodec units for compressed digital video transmissions.
The concept under consideration by Gonzaga is similar tothe `telecottage' strategy now in use in parts ofScandanavia. There, community teleservice centersprovide a variety of digital services for small ruralcommunities. (Qvortrup, 1989) Adapted to the health careneeds of the Northwest, such regional centers could beestablished at local hospitals and/or community colleges.Linked to urban-based medical centers and universities, thisarrangement would permit multi-user systems to sharecosts, data, expertise and educational opportunities over avast geographical area. The establishment of a rural healthnetwork is likely to depend on the total aggregrate demandfor ISDN services from a wide variety of users beyondhealth and education. (Sawhney, 1992)
Rural hospitals in the Northwest are already forminginteractive data networks. The addition of compressedvideo transmission is technically easy; the barriers arecapital costs of codec equipment and formation ofcooperative relationships among diverse health servicesproviders. Clearly, the coalition-building is a necessaryprecondition for cost-sharing. No one provider has the
resources to build a regional video interface system. Evenso, the private sector of health care has sufficient resourcesto build a rural health network even if governmentscontinue to assign low priority to rural health care needs.Initial conversations suggest that the converging health careneeds of rural areas can be a viable base for regionalcooperation.
If a small army of diverse and independent health serviceproviders can overcome their isolation and develop acommon agenda, rural health centers can become a reality.This will happen only if social and organizationalconvergence is encouraged that can take advantage ofconverging technologies.
8. REFERENCES
Barnes, S.; "An ISDN Desktop Central Office Switch forRural and Remote Area Communications,"Telecommunications, March 1, 1991.
Burton, Lucy Greer; "Visions for Rural Communities: WhoMakes What Choices for Whom?" unpublished paper,Pullman, Washington State University, December, 1988.
Chickadonz, G. H., "Clinical Specialization VersusGeneralization: New Perspectives on an Old Issue," inMcCloskey, J. C., and Grace, H. K., eds., Current Issuesin Nursing, St. Louis, Mosby, 1990.
Dillman, Don, and Beck, Donald; "InformationTechnologies and Rural Development in the 1990's," RuralGreat Plains of the Future Symposium, Denver, November,1987.
Eigen, Daryl; "Narrowband and Broadband ISDN CPEDirections," IEEE Communications, April, 1990.
Hudson, Heather; "Overcoming the Barriers of Distance:Telecommunications and Rural Development," IEEETechnology and Society, December, 1989.
Irwin, Lois; "Telecommunications and RuralDevelopment," unpublished paper, Partnership for RuralImprovement, Spokane, WA, January, 1990.
Moccia, P., "The Student as Strand and Thread of NewCurricula," Education Council News, New York, NationalLeague for Nursing, 1989.
Morris, M.J., and La Ngoc, I.; "RuralTelecommunications and ISDN Using Point to MultipointTDMA Radio Systems," Telecommunications Journal,January 1, 1991.
National League of Nursing, Public Policy Bulletin,Summer, 1989.
Parker, Edwin, et al.; Rural America in the InformationAge: Telecommunications Policy for Rural Development,Lanham, MD, University Press of America, 1989.
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Qvortrup, Lars, "Tilt. Nordic Telecottages: CommunityTeleservice Centres for Rural Reg ons,"Teleconununications Policy, March, 1989.
Sawhney, Harmeet, "Demapd Aggregation Strategies forRural Telephony," Teleconimanications Policy, March 1,1992.
State of Washington, Department of Information Services,"Video Telecommunications Strategic Plan," September 24,1992.
Terry, Jack; "Alternative Technologies and DeliverySystems for Broadband ISDN Access," IEEECommunications, August, 1992.
Zumeta, William; "Higher Education and SmallCommunity Development," in A Northwest Reader: Optionsfor Rural Communities, Seattle, The Northwest PolicyCenter, 1989.
471
MULTIMEDIA BROADBAND COMMUNICATIONSHEALTH CARE APPLICATIONS
Kenneth R. RaymondDirector Technology Strategies Analysis
NYNEX Telesector Resources GroupWhite Plains, New York, USA
Abstract
This paper will describe Multimedia Broadband Communications (MBC) and its potentialimpact on the health care industry in the United States. It will address the technical/oper-ational aspects of the system, the health care crisis, the market and a NYNEX trialimplementation in Boston, Massachusetts. USA.
1.0 Multi Media Broadband Communications
Multimedia Broadband Communications (MBC) is thegeneri: term that we use to describe an emergingconcept in multimedia communications. This conceptenvisions communications systems that are designed toprovide an environment that supports multi-user, session-based exchange of high-resolution images, as well asgraphics, audio, video, text and data. The sessionspermit fully interactive communication between partici-pants and information sources based at separate loca-tions.
MBC provides the transport and networking capabilitiesto surmount the challenges now present in data transportand interactive collaboration. MBC enables session-based display and manipulation of images, graphics, textand data. MBC also supports resource servers thatmaximize utility of commonly used general services. Thefile server provides an efficient and centralized mul-timedia database available to users for data storage andretrieval at network speeds. The mail server provides amultimedia mail service caps de of forwarding, storing,delivering and tracking multimedia messages. The direc-tory service provides a text based or multimedia basedcatalogue of all users, resources, servers and facilitiesavailable throughout the network.
The use of images has increased dramatically as evi-denced by the increasing use of CAD/CAM, fax ma-chines, VCRs, desktop publishing, multimedia presenta-tions, image viewing/manipulating, multimedia applica-tions, computer-based instruction, and medical picturearchive control systems (PACS). Many industries nowheavily rely on the electronic exchange and manipulation
of visual information, which most of the time is com-bined with other data types to form mixed-media datasets. There are two major problems that hinder theproliferation of such technology. One is the difficulty intransporting, in a timely manner, the massive amounts ofdata associated with high-quality images. The secondproblem is establishing an environment which allowsinteractive communications within which to review andmanipulate the images and data being transported.
Media Broadband Services (MBS) is an example ofMultimedia Broadband Communications (MBC).NYNEX Science and Technology Inc. is developing MBSas a network-based multimedia communications system.One of its applications is in the health care field isdiscussed later in the paper.
NATIONAL HEALTHCARECOSTS
ICC
600
54C
100
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'CC
BILL IONS
PO 61 63 61 VI 13 16 17 BO 89 90
Graph 1
2.0 Health Care Crisis
The cost of health care in the U.S. is growing astronomi-cally. The total health care cost for 1990 was $650billion dollars as compared to $604 billion in 1989. AsGraph #1 indicates, the increases in health care cost inrecent years have been tremendous.
As a percentage of Gross National Product (GNP),health care continues to increase with no end in sight.Budget Director Richard Darman forecasts that healthcare costs will be 17% of GNP by the year 2000.Currently health care costs are 12.2 % of the GNP. [1]Graph #2 shows how this percentage has changed from5.9% of GNP in 1965 to the current amount of 12.2%.
Health insurance costs per employee will have increasedby more than five times by the year 2000. In a recentsurvey by Fortune magazine, 63% of the CEOs polledstated that skyrocketing medical costs was one of thebiggest problems confronting them. Most expect annualincreases in medical costs of 11% to 15% over the next5 years. [2]
There are various factors that contribute to the currenthealth care crisis. One of these factors is the growingnumber of malpractice suits. A recent survey by theAmerican College of Surgeons indicates that 40% of itsmembers had stopped accepting high risk cases inconsultation. In addition, 28% of its members were notperforming certain procedures because of the high riskof malpractice suits.
It is estimated that doctors pay over $5 billion per yearfor malpractice insurance. Further, there is the relatedcost of defensive medicine. This cost is estimated by the
American Medical Association as being $15 billion ayear. [3]
A recent study by A.D. Little, "Can TelecommunicationsHelp Solve America's Health Care Problems", states thatmore than $36 billion can be saved annually by the widespread use of telecommunications applications in thehealth care field. [4]
MBC services can be a tool to control and lower thisliability. MBC would allow for faster access to records,tests, and other information. It would allow for fasterconsultation and diagnosis with various specialist. Thesefeatures could help address this problem by making
473
Graph 2
information readily available in a consistent and timelyfashion.
3.0 Health Care Applications
This application segment exhibits a high degree ofdependability on high quality images [X-rays, computedtomography (CT scans), magnetic resonance imaging(MRI), sonograms]. Currently most of this marketsegment's needs are being met through hard copies andutilization of Local Area Networks (LANs). Inefficiencycan result from the great distances between locationswhere the images are taken, developed, stored andfinally reviewed. One of the present constraints is thecost of reproduction and distribution of multiple copiesof these records. As a result there usually is only one
copy of the examination images. This sometimes meansthat a doctor may not be able to get a patient's recordbecause it has been already taken out or it has beenmisfiled.
MBC offers the opportunity to move away from hard-copy to electronic images, thereby easing the currentburden of archival and transport of physical images.Perhaps even more significant, MBC allows specialists tostill work together even when physically at separatelocations. Specialists can confer between workstationswith full visual and audio communication. MBC enablesthe transport, storage, and viewing of patient information(images, audio, video, text) by multiple users, in multiplelocations. The session feature lets different doctors andspecialists, from different locations, share a patient'sinformation, as well as exchange ideas, at the same time.Multimedia messages can be left with other people forfuture consultation. This will allow doctors and special-ist to work together to a degree never before possible.MBC allows remote viewing of medical imaging studiesfrom home or office rather than just the location atwhich the study originates. Doctors would no longerneed to be on site to provide a diagnosis for an imagingexamination. Physical distance will no longer be aconstraint in the ability to fully utilize a specialist'sexpertise.
Better utilization of sophisticated imaging equipmentand specialists can be obtained through use of MBC.For example, hospitals with sophisticated imagingequipment can not offer some specialized servicesbecause specialized personnel are not available tointerpret studies produced on that equipment. Hospitalswith specialists but without a particular piece of special-ized equipment can make use of equipment at anotherlocation. MBC allows specialists at remote locations toreview the studies and return diagnoses as if they werelocally available.
MBC and other medical imaging systems will facilitateenormous costs savings. For example, there will besavings as a result of the reduction of real estate neededfor storage of records. There will be savings in costsassociated with film and chemicals that will no longer beneeded. There will also be a savings as a result of thereduction the high rate of displaced records. Thetime lost because of misplaced or lost files is currentlya very significont problem.
The commercial benefits of MBC are potentially vast.The ability to access broadband transport without settingup private lines, and the use of sessioning as a means toconduct communication that had previously required the
movement of people or hardcopy images, allows thedevelopment of new classes of multi-user, multi-siteapplications. Whole new classes of visually basedinformation providers will have the opportunity toprovide the multimedia equivalent of existing text-basedon-line services. For example, the management ofimages is a new but rapidly growing market. Currenttechnology allows a 12-inch optical disk to store up to6.5 Gbytes of data. This is approximately 118,000document'. These optical disks can be stored individual-ly or in storage devices referred to as jukeboxes. Thesejukeboxes can store up to 190 Gbytes of data Someprojections for the imaging market indicate that this willbe an area that will push the evolution of the telecom-munications infrastructure toward fiber and broadband.In 1990, there were total imaging revenues of $3.58billion, and it is projected that by 1995 this figure will be$8.14 billion. [5]
There is a large unmet customer demand for MBC.Health care providers need interactive sessioning,multimedia communications that can enable them tolower costs and improve the delivery of health carecervices.
4.0 Technical/Operational Feasibility
MBC design considerations are geared toward obtainingthe maximum flexibility in terms of hardware platforms,software architecture and open interfaces. It is the goalof MBC to provide a real-time multimedia communica-tion system capable of handling high-resolution imagesas well as graphics, video, audio, text and data records.The need for such a system is continually growing, asevidenced by a number of trends in industrial andcommercial sectors.
In order to meet the demands of the marketplace. MBCis envisioned to achieve its goals by providing thefollowing key features:
Broadband Transport: By making use of the existingtelephone company fiber networks, MBC can deliverinternode service at a rate of 45 Mb/s or greater.
Sessioning Environment: The network software providesa session-based communication environment in whichusers can share, display and manipulate data. Uses ofsuch an environment can be as simple as a commonwindow and pointer (allowing users at separate work-stations to enter into a multimedia conference tosimultaneously view, point at and modify objects withina common window). A more sophisticated transport
474
environment within which data can be transmittedbetween end points without any special user setup orcontrol of transport links is possible.
4.1 Hardware
MBC can utilize high speed broadband optical transport,with a minimum rate of transmission of 45 Mb/s andhigher. Intelligent network software is utilized tomanage the session environment. MBC can accessresource servers that will enable users to effectively andefficiently utilize databases and applications that arecommonly accessed.
4.2 Software
MBC software is divided into four functional layers.Each layer provides a service that is dependent on thelayers below it. As such, the network services are at thelowest layers, and the user/application services are atthe highest layers.
The application layer is entirely customer dependent.Functionality at this level depends on specific customerneeds. Customer-designed applications, running onapplication-server workstations and application-client(i.e., user) workstations, provide the specialized function-ality required by users at this level.
The system layer is the major point of interface betweenthe application layer and the network. A system serviceinterface (SSI) provides a bridge between commandsreceived from the applications layer (to perform transac-tions for users) and commands executed on the networklevel. The SSI provides a library of function calls, ormacros, that present application developers with an openinterface to network services.
The network layer is responsible for the establishment ofall sessions and for the maintenance of all on-goingsessions. The functions at this level are varied, includ-ing: maintenance of all routing and user parameters;establishment and tear-down of session connections;coordination of transport of data to session participants;maintenance of network integrity; and tracking andreporting of usage.
The transport layer is not a software layer per se, butsignificant network resources are devoted to transportmanagement to ensure timely and efficient networkconnections. The transport manager software is respon-sible for establishing broadband connections betweenlocal networks.
475
4.3 Software Facilities
MBC provides a variety of software facilities, each ofwhich provides a unique capability to the network:
Network Server: this facility allows for the transport,delivery and presentation of multimedia information ina controlled environment known as a session.
File Server: this facility allows for maintenance ofmultimedia data, stored on various databases (i.e,separate databases for voice, images, text, etc.) under thecontrol of a single server.
Mail Server: This facility provides a multimedia storeand forward message system capable of receiving,storing, sending and tracking mail comprised of multime-dia envelopes and associated multimedia contents.
Directory Server. This facility provides a local or net-work-wide listing of all accessible entities including users(both real and virtual), servers (network and localapplication), and other resources (e.g. available periph-erals).
Application Servers: These servers, specialized byfunction, provide specific application capabilities for endusers. Their functionality is entirely under the control ofindividual application developers, with the requirementthat they interface to the MBC System Service Interface(SSI).
4.4 Open Interfaces
By providing an open and flexible interface to a net-worked sessioning capability, existing applications can bemodified and new applications designed to run in amulti-user, multi-session environment. This schemeallows users to have access to applications that theywould otherwise have to acquire independently. It alsoallows many users to interact with an application as agroup, rather than accessing and using the applicationindividually. Applications can be designed and devel-oped as dictated by user needs, not by arbitrary criteriaimposed by the network.
5.0 NYNEX Science & Technology Media BroadbandService (MBS) Health Care Applications Trial, Boston,Massachusetts
The trial implementation of MBS began in December,1990 in Boston with five strategic customers: Brigham &Women's Hospital, Children's Hospital. Massachusetts
General Hospital, New England Medical Center, andChristian Science Publishing Society.
Each customer location is equipped with a processor,local transport and multiple CPE workstations. Thefollowing sections describe the configuration and applica-tions deployed at the NYNEX Customer DevelopmentCenter (CDC) and each customer location.
5.1 Customer Development Center (CDC)
The CDC is used as the communications hub for thevarious network nodes located at each customer's site.It is equipped with an processor, broadband switch, andfiber-optic links. The processor is responsible forcoordinating inter-node traffic and for establishing andmaintaining inter-node sessions. New England Tele-phone has supplied fiber-optic cable to link the variousnodes with the CDC, and provides T1 and/or T3 capaci-ty links to those nodes.
5.2 Brigham & Women's Hospital
Brigham & Women's Hospital (B& W) uses MBSprimarily for teleradiology applications. With variousSUN workstations located throughout the institution onan Ethernet LAN, radiologists, physicians and surgeonsare able to simultaneously review magnetic resonanceimaging (MRI) and computed tomography (CT) images.Additional workstations are located in the homes ofspecialists who are able to review images and consultwith on-site personnel on an on-demand basis, greatlyreducing the time involved in responding to emergencysituations. The ability to conduct teleradiology throughthe MBS network benefits clinical diagnosis and treat-ment, it also enhances the research capabilities of theinstitution by facilitating the increased flow of informa-tion between departments.
5.3 Children's Hospital
The Children's Hospital of Boston (TCH) uses MBS intwo ways. First, the service is used to enhance in-houseoperations by taking advantage of MBS's ability totransport multimedia objects and provide multi-usersessioning. Additionally, the service allows properly
476
equipped professionals from remote locations to consultwith TCH specialists. On site, TCH makes use of itsexisting FDDI LAN and integrates a local processor withvarious DEC workstations.
These MBS applications have enhanced patient care,streamlined routine procedures, provides easy andimmediate access to on-line multimedia information, andsaves valuable time by allowing for virtually immediateconsultation on a patient's diagnosis and treatment.
5.4 Massachusetts General Hospital
Massachusetts General Hospital (MGH) has a variety offacilities spread out throughout the greater Boston area.MBS is used to link the existing fiber optic LANS andMacintosh workstations at the various locations into acohesive MBS network. Applications take advantage ofthe broadband transport and sessioning capabilities ofMBS, thereby integrating the individual sites into a moreimmediately accessible unified structure.
MBS applications allows MGH to improve the immedia-cy and quality of care that it provides; they also allowMGH to provide services to other health care institu-tions, maximizing efficiency and resources.
5.5 New England Medical Center
New England Medical Center (NEMC) has integratedMBS network service into its existing FiberUstributedData Interface (FDDI) LAN. DEC workstations areused for a telecardiology application allowing for bothremote private viewing and multi-user collaborativeviewing of full-motion video images of catheterization ofa patient's heart or blood vessels. When conductedwithin a multi-user session, this application allowsphysicians at remote locations to simultaneously view avideo loop while having access to a common pointer,useful in isolating or describing a particular part of thevideo.
This application allows technicians to present studies tospecialists moments after they are generated, allowingthose speciallists to determine diagnosis and treatmentimmediately. In emergency conditions, the time saved by
this application can mean the difference between lifeand death; in non-emergency cases, this application cansignificantly reduce costs and time. For example, if aspecialist has access to a study while a patient is still onthe table," the specialist can order additional studies tobe conducted upon the patient immediately, rather thanon a subsequent visit. MBS allows for both betterquality health care and significant costs savings.
6.0 Conclusion
The health care crisis is one of the top concerns in theU.S. today. Current health care costs are $650 billionand are expected to continue to grow at a rate of 10%to 15% per year. Widespread use of MBC in thedelivery and management of health care will result insignificant costs savings and improve the delivery ofhealth care.
Specific areas that can be targeted include costs causedby: defensive medicine ($15 billion), paperwork ineffi-ciency ($75 billion), inappropriate treatment ($ 98billion) and malpractice insurance ($ 5 billion). [6]Potential MBC revenues can be estimate to reach $2.97billion by the year 2000. (See Graph #3)
PROJECTED BROADBANDREVENUES
HEALTHCARE
Graph 3
477
Multimedia Broadband Communications envisionsproviding customers with the following service capabili-ties: establishment of multiple, multi-user sessions;addition of users to an existing session; removal ofindividual users from a session; ability to define, share,and update multimedia objects within a session; submis-sion and receipt of multimedia objects to a file server;display of session status; and, control of dialogue (byvoice and/or cursor).
MBC types of services will continue to grow and itsdeployment will accelerate. MBC will become a signifi-cant factor in helping the health care industry to reducethe cost of providing health care, as well as further raisethe quality of this service.
Lastly, MBC services will be a significant force increating the critical mass needed to accelerate theevolution toward the information/telecommunicationinfrastructure needed for the 21 Century.
January 19, 1993White Plains, New YorkU.S.A.
References
[1] A Cure for What Ails Medical Care, FortuneMagazine, July 1, 1991
[2] Taking on Enemy No. 1, Fortune Magazine, July1, 1991
[3] A Cure for What Ails Medical Care, FortuneMagazine, July 1, 1991
[4] Can Telecommunications Help Solve America'sHealth Care Problems?,A.D. Little,
July 1992.
[5] Technology Trends-Imaging Networks- Where'sRoadblock?, Business
Communications Review, August 1991, p. 19.
[6] A Cure for What Ails Medical Care, FortuneMagazine, July 1, 1991.
478
NETWORK MANAGEMENT TECHNOLOGY
A PARADIGM FOR FUTURE ENTERPRISE CONTROL
Mark Wall and Jeff WhitehillNYNEX ALLINK Company
White Plains, NY
1. ABSTRACT
The new tools for integrated network management have the potential for radically altering the relationshipbetween the lay manager and the specialists responsible for the maintenance of the organization's technical
health. This paper addresses the new possibilities afforded by this technology which has been made far moreuser friendly than was heretofore possible. Detailed visibility into the inner workings of the most complex
systems in a manner which greatly extends the control managers can exercise over the most complex ofenvironments. The result facilitates the intelligent conduct of affairs across a variety of disciplines including
transportation, information technologies, medicine and process control.
2. INTRODUCTION
The explosive growth in information technology and telecom-munications is by now a familiar feature of the landscape.
As the size, variety, complexity and geographic scope of ser-vices grow, the networks needed to support them becomeincreasingly intricate and diverse. Also, because of deregula-tion the user, whatever the degree of sophistication, is con-fronted with a plethora of dissimilar equipment and services.These must be assci._.bled to provide the individualized array ofservices that are increasingly necessary to compete in the globalmarketplace. Such services have become crucial if businessunits are to maintain and nhance a competitive position (1).
To manage and control the networks made up of this grab-bagof technological wizardry, a sophisticated set of network man-agement tools is required. These must be designed to providethe means of extending user and/or operator control to thefurthest reaches of the network.
The network management environment has evolved with andreflected the telecommunications industry for the past 100years. While these networks were the domain of either mo-nopoly providers or PTT's the tools were designed for thenetwork specialist. The major objective was to increase theproductivity associated with repetitive processes needed tomanage large networks providing a limited range of services inbulk.
As users started to break free from the confines of monopolyprovided services, bulk leases of facilities were combined withprocurement of arrays of elements to permit their more efficientand flexible use. Initial network management systems, some ofgreat sophistication, have been and are provided by elementmanufacturers as adjuncts to their productsets. Numerousexamples of these systems can be found. Many modem manu-facturers, T-1 and other multiplexer manufacturers, transmis-sion, computer and other equipment and software providersoffer vertically integrated management systems designed pri-marily to control that part of the network they provide. Often
these systems are advertised as the answer for integrated net-work management. Accommodation for other vendors is usu-...11y offered by either specialized software or, more recently,adherence to standards as these evolve, permitting interface tosystems also designed to meet them.
The most effective integrated network management systemscombine standards compliance with a set of tools facilitating theinterface of a wide range of "legacy" systems. Both capabilitiesare combined into a composite whole that can then be managed.The ALLINIC' Operations Coordinator is an example of sucha system (2). It combines many techniques for interface,decision making and display into a powerful system for control-ling diverse networks. These play an increasingly importantrole in delivering the diversity of services necessary to runninga modem business.
The premise of this paper is that these systems, resulting fromthe need to manage these complex diverse networks, havethemselves provided a new paradigm for system operation andcontrol across a wide range of disciplines. In answering the needfor managing the diverse specialized systems used to assembletoday's networks, the mechanism now exists by which the mostcomplex of environments can be presented in a way permittingsurveillance and operation the non specialist.
Although the means of control are correspondingly easy toinvoke, the desirability of allowing their use is much more inquestion. The example of armchair generals attempting tocontrol the battlefield remotely comes to mind. Second guessingbased on monitoring is one thing; active control of crucialsituations is another.
Nevertheless, the translation of complex technical status detai Isto decision makers in one of many (or many simultaneous)easily understood natural language formats, accompanied bywell designed graphics interfaces may be considered revolu-tionary. With proper use of the tools provided, it now becomespossible to tailor the information derived from operations tomeet the needs of a wide range of general managementpreferences.
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3. THE INTEGRATED NETWORK MAN_ _GEMENTTOOLSET
Recent technological innovations have introduced powerful setof technology to an ever wider range of applications. Displayand computational power, once thought only applicable to largesystems (such as those serving the military and largest corpora-tions), is now available at a price range where sales for thesesystems number in the tens of thousands.
This same technology has made possible (and economicallyfeasible) the development of a wide range of network (and byextension, enterprise) management systems. The buildingblocks of these systems are strung together in a distributedenvironment of unprecedented power allowing virtually unlim-ited expansion of function and capacity.
Figure 1 depicts the major components of an enterprise manage-ment system and their relationships. The ALLINK OperationsCoordinator developed by NYNEX is assembled from majorsubsystems in exact correspondence to those shown.
Figure 1: Components of an EnterpriseManagement System
3.1 THE MANAGEMENT INFORMATION BASE ANDREPOSITORY
The effective assembly of data with efficient timely access is aprecondition for the effective management and control of enter-prise operation. By way of example, the ALLINK ManagementInformation Base is constructed using a commercially availablerelational data base with a basic toolset built on a database 4GLforms package. In addition to providing the requisite data for
aeration, the schema is such as to permit the use of themanagement information base as a complete data repository.Provision is made for a wealth of data concerning networkobjects, to be determined at the discretion of the user. Vendor,contract and other data can all he stored in addition to the dataelements requir 1 for real time operation.
Static data derived from the repository along with dynamic datauniquely associated with network object instantiations form theManagement Information Base used in on line operation. TheMIB static data derives from the object class and subclass aswell as relationship data with respect to other network objects.
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Completion of the MIB requires the addition of status and alarmdata derived through the surveillance capability of the AOC.
Constant interaction with the MIB is required to provide theongoing basis for real time operation The function of therepository is as an accessible storehouse of more permanentdata. These functions, combined within a single functionalentity using suitable tools (eg. relational data base technology),add considerable power to enterprise operation. Proper use ofthese concepts and tools can provide system data, both static andreal-time variable, in coherent tailored format. As a result,enterprise managers now have the means for unprecedented realtime surveillance and control. These systems are just beginningto be procured and installed. The important work of decidinghow to structure and use the capabilities now available hasbarely begun.
3.2 MANAGEMENT PROTOCOLS
The enterprise manager must use telecommunications facilitiesas the means of interacting with controlled entities and theiragents. Recently much attention has been paid to accommodat-ing a series of standard protocol stacks such as SNMP, CMIS/CMIP and the like. These ride on top of a plethora of standardtransport protocols.
The wide diversity of interfaces necessary to accommodate thetypical heterogeneous enterprise management environment makeattention to this aspect of the process important. Within ALLINKwe have found that the provision of a powerful set of tools formessage translation and parsing accommodates both the stan-dards and legacy based interfaces which must be handled formost applications.
The many types of incoming messages are converted into aco,amon language used for interprocess communications usingthese tools. Although it may be modeled on OSI NMF messagestructures, the interprocess format generally requires an exten-sive superset of the message types defined by the standardscommunity. Additional functions and data are required to sup-port a more complete application set and handle internal systemfunctions.
3.3 DISTRIBUTION PROCESS
The distribution process is the glue that holds the fabric of theAOC together. A client-server architecture allows the majorsystem modules to exist over multiple platforms or within asingle workstation depending on the needs of the network.Workstations and servers may be remotely connected usingwide area facilities bridging the LAN's used within each sitethat support local connectivity. The result is complete flexibil-ity to accommodate expanding function and volume.
The flexibility afforded by these modern networking toolsallows information to be disseminated to anyone in the userorganization. Secure domains of responsibility may be estah-
lished in conjunction with a security structure which can definefunctions by individual, position or domain. It therefore be-comes possible to tailor a profile of interaction to the level ofmanagement or operations personnel using the system.
3.4 APPLICATIONS & DECISION PROCESSES
To add value to the raw incoming data from the managedobjects, their agents or element management systems, the enter-prise manager invokes a series of applications. These can takethe form of simple data interpretation or may be rather elaborateanalyses of performance, multiple alarm correlation, automatedactions and the like. Within the AOC, for example, processesare in the form of tailored rulesets which are implemented by thenetwork administrator. These are implemented using artificialintelligence techniques provided as a part of the system (3).Within this framework are also available such applications asproblem management and configuration management.
This processing region can also provide the ability to tailor datafor a wide variety of interests. The same set of raw data canresult in a number of individualized messages for different userrequirements. By intelligent use of this capability, the networkmanagement platform and tools become the basis for trueenterprise management serving any number of disparate entitieswithin the organization.
Some examples of the potential general application of theseplatforms include inter alia
GeneralizedStatus Monitoring: The basic functions of networkstatus monitoring are easily accommodated to the more generalcase of status, maintenance and repair of plant and equipmentserving an entire organization. There are no limitations on thedefinition of objects for inclusion within the MIB. Moreover, inaddition to management protocol input, events may be gener-ated against any defined object manually by the system opera-tor. When configured using the sophisticated rule set available,the logical extension to any complex activity becomes apparent.
Incident Correlation: Data accumulated both through manage-ment protocol interfaces and through manual entry may be usedto seek patterns of incidents not obviously correlated but whichin fact may have related causality. The expert systems capabilitysuch as that provided within the AOC when coupled with thepower of relational data base access to accumulated data pro-vides the basis for sophisticated analysis in near real time.
Trend Analysis: Performance data accumulation along withinput of relevant business data can be analyzed for significanttrends. Again, while this has always been possible using thedisparate systems of the past, the systems designed specificallyfor the enterprise network management environment have inte-grated these general capabilities to an extent not previouslyimagined. The tools thus having been brought into an integratedframework, take on the capability of serving the much larger anddiverse objectives of major organizations.
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Beyond the ability to provide a series of interesting applications,a major capability of sophisticated decision processing is theability to synthesize natural language output as a result ofintelligent operation on incoming data. Referring to Figure 2,the decision process accumulates the now standardized mes-sages in conjunction with data from the MIB (relationships,object operational and property data and the rules for process-ing) to produce output tailored to varying specific needs of theorganization.
The Power of Natural LanguageNYPe.INK
Figure 2: Intelligent Decision Processing
The example shown converts a specific equipment alarm re-ceived from a managed network into a series of messages fordifferent users of the system. The alarm emanating from theelement manager is processed based on the relationships be-tween the specific equipment cited and other network objects.In the example shown the alarm signal is interpreted as havingresulted from a trunk having failed despite the fact that thereceived message was actually an equipment failure indication.This deduced information is presented to the repair depot ornetwork operator as the message shown, indicating a problem inthe Chicago to Springfield trunk.
The impact of this failure on other managers is quite different.For the executive concerned with business operational status,the significant issue may be that order entry processing hasstopped in Chicago as a result of the failure. The response of th.fbusiness executive to this situation will generally be differentthan that of the network operator.
While the operator's emphasis is naturally directed towardbringing the Chicago facility back on line, the response of thebusiness executive may be to reroute the business rather thanrely on network repair. Capacity in other parts of the organiza-tion to handle the business function rather than any technologi-cal consideration may determine this.
To further emphasize some of the new flexibility we can soonanticipate, this same business message is shown appearing inseveral languages corresponding to the various divisions world-wide which may have need to view the data. Although stillsomewhat difficult to accomplish, the trend toward standardenvironments for graphic user interface encourages provision ofmore and more capability in this regard.
3.S USER INTERFACE
The power of the new user interfaces cannot be over empha-sized. In particular the addition of graphics to the user/systeminterface has irrevocably changed the way in which we interactwith these systems. By properly tailoring views, navigation andpresentation it is now possible to present the most complex datain a form usable by reasonably intelligent managers who areotherwise untrained in technology.
Some indication of the facilities available with which to accom-plish this, are exemplified by those provided by the AOC. Theseinclude inter alia
Scanned or standard coded backgrounds
Scanned or drawn icons to represent network objects
Use of view objects as well as network objects to navigate andretrieve data. The icons representing both may be chosen at willor synthesized by the system administrator
The ability to represent an object or a view in multiple views
The ability to construct multiple view trees, parsing the enter-prise simultaneously in accordance with different organiza-tional needs
Multiple navigational capabilities including through views,previous reference, by view name, by object reference and byshortcut to the top of each view tree
These facilities and their future extensions provide a range ofnew possibilities for system administrators. Figure 3 shows anexample of the methods used to display status and bring data andcontrol capability to the network operator. The display indi-cates objects and their relationship to other objects through aconnectivity diagram. A good deal of flexibility is provided inthat objects may be depicted or not, labels may be affixed (eitherhorizontal or vertical) or not and lines may or may not be shown.Choice of representation for an object is completely arbitrary asis the background for each view against which the objects andtheir relationships are shown.
Figure 3: Operator Intersections forEnterprise Management
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Menus of available data and actions are tied to objects definedwithin the MIB. It is thus possible to access any array of data forpresentation this way. Virtually unlimited possibilities foractive process control are thus afforded.
4. THE ALLINK OPERATIONS COORDINATOREXAMPLE
The AOC incorporates many of these ideas. The aim is to makeoperation of the system as intuitive as possible. This willbecome evident in what follows.
A typical AOC configuration is as shown in Figure 4. Thefunctions of analysis and decision making, management proto-col handling and management information base processing arearranged in a client-server configuration serving a number ofoperator positions as clients. While a good deal could be saidabout the common server elements, of main interest for further-ing the premise of this paper is the Network Operations Centerthat interfaces with the network operator user directly.
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Figure 5 shows a typical display. Arrayed on the screen inquadrants are network views, a table of reported alarms, and ascreen of object details. This was obtained via a pull down menuas shown. Each of the panels has stacking capability so thatmany layers of data can be rapidly recalled. The tiled approachshown as opposed to the more common "busy desk" overlap-ping arrangement has proved simpler for the operator.
Figure 5: Typical Network Management Display
Figure 6 shows the same network view expanded to cover thefull screen. This is useful for passive monitoring and often oneuser position is devoted to a full screen display for projection.
Figure 6: Full Screen World Network View
Figure 7 expands the alarm screen, showing a change in formatand also displaying an example of the context sensitive helpavailable in each pane. Additional information about networkobjects (text, graphic and audio) as well as specific suggestionsto handle problems are also available. Figure 8 shows one of thetypical problem management panes active.
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Figure 7: Alarm Screen and Contact Sensitive Help
Figure 8: Problem Management Example
Figure 9 focuses on the navigation facilities provided. Shownis a schematic of the view trees available within this particularsystem. These are virtually an unlimited number of view treeswhich may be configured to correspond to the organization'sneeds. It thus becomes feasible to accommodate the simulta-neous needs of disparate operations or departments within adiverse enterprise using a single system. By establishingdomains it is further possible to isolate network objects fromparties not interested in them or not authorized to act on them.
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5. TOWARD A BROADER WORLD VIEW OFENTERPRISE MANAGEMENT
The array of capabilities which have been brought to bear on theproblem of enterprise management have much broader applica-tion. As the examples have shown, displays, navigation, lan-guage etc., can all be arranged at the user's discretion to suit awide variety of needs. With point and shoot control and indi-vidualized choice of symbology, text and other aids to under-standing, the need for the specialist operator diminishes. Also,the means of direct inquiry afforded by these new systems canbypass intermediate levels of interpretation in all but the mostunusual cases.
The power of the well designed graphical user interface isillustrated by reference to figures 10 through 12. The first stepis configuring the system with backgrounds corresponding tothe reality or perception of the enterprise being managed.Figure 10 illustrates this principal by using an actual buildingartwork as the background. This could exemplify the case forsecurity or physical plant monitoring.
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A computer is shown on one of the floors within the building.The part of this same picture representing the computer is thenscanned into the system as an active icon able to respond to statechanges and alarms. Artwork and language associated withmenu choices are completely at the discretion of the systemadministrator. System usability for a given class of user isdetermined by this "software" rather than by the technology ofthe underlying platform and applications.
Another example as shown in figure 11 further demonstrates thepower of the technique. Here an actual rack of digital crossconnect equipment as the background against which one of thecards is placed as an active icon. The possibilities are virtuallyunlimited.
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Figure 12 shows a series of views showing a typical "drill down"sequence from global view to the underlying network branchserved by the card in question.
Figure 12: The Power of a "Drill Down" Sequence
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To illustrate the general applicability of these techniques, Fig-ures 13 and 14 show the same set of tools applied to hospitalcritical care monitoring. Here we have "drilled down to anindividual bed from a city view. A sophisticatedarray of sensorsare already available in the hospital environment with which tomonitor patients, both locally and remotely. By using the toolsnow available, more complex and complete data can be accom-modated and presented at a variety of levels,both for direct careproviders and for supervision personnel.
Figure 13: Managing the Hospital Environment
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Similar examples abound in a number of other fields. Transpor-tation, utilities, manufacturing and security all require similarcapabilities. Much work remainsto define the requirements forthese systems. However, the tools which already exist can meeta significant part of the need and can be used to prototype thesystems of the future.
At this point in time the gadgetry is being developed at a rapidpace.
The equivalent effort inoperational analysis and bringing thesetools effectively into play remains to be accomplished.
References
(1) Future Directions in I.T. and Telecomms, Casimir S.Skrzypczak, Europe in Communication, InternationalTele-communications Union, 1992 p. 246
(2) Integrated Network Management for Real-Time Opera-tions, Gary Tjaden, Mark Wall, Jerry Goldman, IEE Net-work, Volume 5, No. 2, March 1991
(3) The ALLINKOperations Coordinator. Applying a Knowl-edge System to Integrated Systems Management, ReneeBarling, Tom Cikoski, Jerry Goldman, Paul Reiber, GaryTjaden, 4th Annual AAAI Conference on Innovative Ap-plications of Artificial Intelligence, January 199z
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The Study of Telecommunication Network Configurationin The Greater Taipei Area
Shan-Hsin Tsao, Shyang-Ming Lin, Yeh-Chyn Her, Hong-Ling Wang,Min-Gume Cheng, Chin-chir Shyur, Ying-Ming Wu
Telecommunication LaboratoriesDirectorate General of Telecommunication
Taipei, Republic of China
Abstract
Owing to the vital role of telecommunication development plays in the Six-YearNational Development Plan, a study group consists of engineers from NITA and TLwas set up to plan and evaluate the Greater Taipei telecommunication network. Thisstudy concentrated within the range of point-to-point traffic forecasting, trunknetwork planning, transmission network planning and the analysis of networkreliability from 1991 to 1997. In this paper, we will describe the study we did andthe result we obtained.
1. INTRODUCTION
Telecommunication Development plays an important part inthe Six-Year National Development Plan of ROC(Republicof China) from 1990 to 1996. DGT(Directorate General ofTelecommunication) of ROC will invest about over 10billion US dollars to introduce new technology in this plan.In the next six years, most of analog exchanges will bedigitalized and the majority of transmission equipment willbe fiberized. It deserves to suspect whether the traditionalnetwork planning practices is still suitable to apply or notafter construction. So, it is the significant time to evaluateand plan telecommunication network now.
A study group consists of engineers from NTTA(NorthTaiwan Telecommunication Administration) andTL(Telecommunication Laboratories) is responsible forplanning and evaluating the Greater Taipeitelecommunication network. This study concentrated withinthe range of point-to-point traffic forecasting, trunk networkplanning, transmission network planning and the analysis ofnetwork reliability from 1991 to 1997. We evaluated manyalternative plans which we concerned about, and gainedsome network configuration guidelines and planningpractices from this project. In this paper, we will describethe study we did and the result we obtained.
1.1 STUDY ENVIRONMENT
The major environment includes-Study Topic:The design of network configuration (trunk
network and facility network), the evaluation oftraditional design practices (routing rule, method ofcircuit calculation and design parameters), the evaluationof network reliability .
-Study region : The Greater Taipei Area consists of TaipeiCity, Taipei County, and Keelung City, which are in thesame local tariff area .
-Planning tools: Four computerized tools which aredesigned by TL support engineers to plan the GreaterTaipei Area. These tools include trunk networkplanning[ I ], transmission network planning[2], point-to-point traffic forecasting131 and network reliabilityevaluationittl.
-Study period: In responding to Six-Year NationalDevelopment Plan, this study will be within the periodfrom 1991 to 1997
-Study method : Owing to physical environmentconstraints and take advantage of the experiment of
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planning engineers, our approach is not to optimize thenetwork but to evaluate designated alternative plans.
1.2 THE GREATER TAIPEI
The Greater Taipei network serves approximately 2.6 millionsubscriber lines, and generate about 110,000 erlangs busyhour traffic. There are presently about 240 switching units,and about 60% switching units are digital. The yearly trafficgrowth rate is about 10% in this network. After the Six-YearNational Development Plan, the ratio of digital exchange willbe up to 90%. In this area, far-to-near rotation routingprinciple is applied to route traffic, and simple cost-ratio ruleis used to dimension network. We use 1% blockingprobability in final route to maintain 3% end-to-endblocking. The digitalization and fiberization of interofficetransmission facility are going actively and continuously.Due to the large system capacity of fiber optic transmissionsystem, any failure in transmission facility will result in greatdamage in traffic throughput. The evaluations of networkreliability become a new and important topic which engineercan not ignore in network planning.
1.3 STUDY PLAN
This Study went through several steps repeatedly to obtainsome cost-effective and implementible plans. These stepsinclude:
(1) The collection and verification of input data(2) The forecasting of point-to-point traffic(3) The design of alternative plans(4) Trunk network planning(5) Facility network planning(6) Evaluation of network reliability of designed network
The evaluation of alternative plans are applied from step 4 to6.
1.4 ALTERNATIVE PLANS
The goals of this study are to obtain an economic andsuitable network configuration, moreover to evaluatetraditional design practices. So, a suitable alternative designmust imply the good practice experiments of engineers andthe design parameters which engineers concerned. Thealternatives in this study are designed by combining ofimportant design parameters. These parameters include thenumber and location of tandem switches, the routing nile(thethreshold to establish a connection between switches), thedimensioning method, and routing policy.
2. TRAFFIC FORECASTING
2.1 COLLECTION & VERIFICATION OF INPUT DATA
An ideal traffic forecasting is a basis of the whole networkconfiguration planning. It will affect the performance ofnetwork dimensioning. Therefore, traffic forecastingoperation should pay attention on data verification andforecasting model selection. These input data are listed asfollowis:
-Collecting the base year traffic measuring data.-Collecting historical year traffic statistical data.-Collecting base year and forecasting year switch
construction data.-Collecting subscriber data of historical years and
forecasting years.-Collecting Gross National Production (GNP) statistical
data.
2.2 FORECASTING MODEL
Owing to the source limitation of the collection of historicaldata and empirical characteristic of the traffic growth , weselect the linear multiregression model (smoother one)asbelow:
Y= a + bN + cGwhere Y denotes traffic
N denote subscriber no.G denote GNP
a, b, c denote estimating parameters
2.3 TRAFFIC FORECASTING AND DISTRIBUTION
In order to get a suitable traffic forecasting result of theGreater Taipei network, we applied the forecastingprocedure as below
(1) Verifying the input data.(2) Distributing traffic by the tandem and routing rule to
have the current point to point traffic.(3) Dividing the Greater Taipei into seven separating total
traffic forecasting areas.(4) Forecasting the total traffic volume of each above area
by using the linear multiregression model.(5) Calaulating the forecast offered traffic matrix by using
Kruithofs method based on exchange subscriber ratio.
2.4 OUTPUT SUMMARY AND ANALYSIS
We summaries the output of the traffic forecasting as thefollowings:
-The Greater Taipei Area point to point offered trafficforecast matrix.
-The Greater Taipei Area outgoing and incoming totaltraffic statistics.
-The Greater Taipei Area per line traffic demand statistics.-The Greater Taipei Area nonresident and resident
subscriber ratio statistics.
We divide the whole study period into two stages. The firststage (historical stage) is from 1985 to 1991, and the secondstage (forecasting stage) is from 1992 to 1997. Wesummarized the results according to these two stages asfollowings.
Average year growth rate of subscriber is 8.54%, GNPgrowth rate is 8.6%, traffic growth rate is 8.6% during thehistorical stage. Average year growth rate of subscriber is8.34%, GNP growth rate is 7%, and traffic growth rate is9.84% during the forecasting stage separately.
3. TRUNK NETWORK PLANNING
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The major problem in trunk network planning is to assignthe circuits among exchanges economically under grade ofservice and physical environment constrains. In thissituation, we do not have any software tool to solve thisproblem under so many constraints yet. So, our approach isto plan trunk network under fixing some design parametersthat create various alternative plans. We will analyze thesealternative trunk network plans and describe the results fromplanning and design practices view of point in the followingsections.
3.1 TRUNK NETWORK DIMENSION
Traditionally, the cost ratio method is the most popularapproach to calculate circuit demand among exchanges. Thisdesign bases on the concept of carrying traffic at the lowestcost. From the marginal cost points of view, circuit demandwill satisfy the equation as followingsDR circuit cost = DR efficiency DR : Direct Route
AR circuit cost AR efficiency AR : Alternate Route . (1)
The efficiency will be reduced when we add circuit to trunkgroup at a fixed offered traffic. At a triangular routing patternwhich consists of direct route and alternative route, theefficiency of direct route(DR) decreases but AR(AlternativeRouts) increases when adding circuit to DR. In ourtraditional practice, circuit demand of one trunk group iscalculated by equation (1) using the value of DRefficiency(ATC: Last trunk capacity) which is derived fromgiven AR efficiency(ATC: Additional trunk capacity), DRcircuit cost and AR circuit cost. The ratio of DR circuit costto AR circuit cost is called cost ratio(e) which implies thecharacteristics of network we plan. Then, equation (1) canbe rewritten as
LTC= c*ATC (2)It's a hard problem to obtain an appropriate value of ATCwhen we try to derive suitable value of LTC. Dr. Rappprovided an equation to approximate the value of LTC as
LTC=e(1-0.3c2) (3).In practice, the value of LTC is usually derived fromequation (2) when the value of ATC and cost ratio wasprovided by engineer. After getting the value of LTC, thecircuit demand will be calculated from equation (3) as below.
LTC= A(E(A,N)-E(A,N-1)) (4)N: number of circuit A:Offered trafficE(A,N): the blocking when offered traffic is A and
number of circuit is N
The evaluation of these three methods(given LTC,e*ATCand Dr. Rapp) reveal that the last one is cheaper thanformer two and cost figures are more stable. But the costdifference is small compare to routing rule parametervariation. By cheaper and stable reasons, we choose Dr.Rapp's approximation method and equation (4) to dimensionnetwork.
3.2 TANDEM TRAFFIC CAPACITY
Generally speaking, trunk groups among local switches(LS)have lower offered traffic, and these equipments are hard tobe cost justified. The lower the traffic threshold of routingrule we apply, the more the connections among LS have tobuild. The more the connections among LS are built, thelighter loads these tandem say itches have to carry.
The selection of ahem:1th e plan depends on not only costbut also feasibility. One of the most critical feasibilityproblem is the traffic processing capacity of exchange. Takethe Greater Taipei network as an example, the lowest costalternatives are within the routing rules from 161-11;(establish a connection when offered traffic equal to or
greater than 16 erlangs) to 20 HU when there is no trafficcapacity constraint on exchange, but the routing threshold islower(below I6HU) when there is. The lowest cost feasiblealternatives are 10HU under 17 tandem switches and 14tandem switches separately when we take two differenttraffic capacity assumptions.
3.3 SENSITIVITY ANALYSIS
Network planning is to draw out the future network undersome design parameter assumption. Owing to the time gapbetween the planning year and construction year, thedifference between the expected parameter values of designand realized ones in the future could not be avoided. It iscritical problem to evaluate the effect of design parameterssuch as equipment cost or forecasted traffic.So, we investigate the impacts of the variation in costparameters of several equipment and traffic load within 20%ranges in the study of Greater Taipei network. Despite thenetwork costs are varied in some proportion to the variationof cost parameters, there are hardly any changes in the ordersequence of network cost among alternatives. Theincreasing(deceasing) of traffic load make the most economicrouting threshold getting highier(lower) within 20%variation ranges.
We have mentioned cost ratio has little effect on thecalculation of circuit demand in section 3.1. The variations inswitching cost or circuit cost cause the variation of cost ratio,but the circuit demand almost the same. It is another prooffor this view of point.
3.4 ROUTING POLICY
Engineer may take some variant of routing policies that aredifferent from compiete two-level routing hierarchies asFigure 3.1(a) to eliminate expensive route, reducemaintenance cost or prevent natural barriers. These variantsare shown in Figure 3.1(b)-(g). Different routing policieshave different constraints on routing between a pair of LS.In our opinions, every time we add new constraints onrouting(delete routes from full two-level routing hierarchy),the problem domain is getting smaller and the total networkcost might be going higher. These planning results provethis.
These network costs of 7 variant routing policies can bedivided into 5 groups unambiguously. There are variant0(full routing hierarchy) , variant I and variant 2, variant 3and variant 4 and variant 5, finally variant 6 in ascendingorder separately. The cost differences among groups areclear, but are ambiguous within group. The cost penaltyfrom variant 0 to variant 1 or variant 2 is small, but othersare very large. As we could image, the largest penaltyappears in the variant 6.
3.5MODULAR PROBLEM IN DIGITAL ENVIRONMENT
One of the most critical assumption in cost ratio approach tocalculate circuit demand is linear per- circuit cost. Intraditional analog network, linear per-circuit cost assumptionis insensible to engineering result, in most situations, whenterminate circuit to exchange in unit of one. But, thecondition is changing when mass deployment of digitalswitching and transmission equipments. Linearized per-circuit cost is no more appropriate hecause the connectionsbetween switching systems(transmission links) arc in unit ofmodule size and they have high fixed cost corresponding toper-circuit cost. In this case, the dimensioning procedure isto determine the most economical number of circuits in unitof module size. We did not try to optimize the modularproblem in this study, because the problem is too hard to
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solve. Our approach is to propose some modular guidelinesthat obtain from the evaluation of alternative plans. Theseguidelines will support engineer in design practices.
The modular strategy is based on the threshold to round-upor round-off a module size. We take some of these lowestcost alternative plans as examples to investigate what is theinfluence on the network cost when we modulize circuitdemand. We choose 12 when the total circuit demand in bothdirections is the multiple of 24 and 24 as module sizeseparately. The results about module size 24 reveal the mosteconomical threshold is within the range from 12 to 14.Another phenomenon deserves to pay attention is the curveof network cost corresponding the threshold. The highernetwork total cost occurs at these lower thresholdalternatives, and the cost decreases rapidly when raise thethreshold. Then the network cost increases when thethreshold is over these lowest cost ranges. But, theincreasing trend is very smooth and ambiguous. The lowestcost threshold appears around 6 when the module size is 12,but the increasing cost trend over 6 very smooth.Summarizing these results of many other alternative planswe take, all the cases reveal
-The lowest cost threshold is around half module-The cost variation more violent below half modulethreshold.
4.TRANSMISSION NETWORK PLANNING
The results of transmission network planning are significantfor planners also. By these transmission strategy networkplannings, the planners can catch the picture of the futurephysical network configuration. The analysis results of thesealternative plans are departed into five parts, they are:
(1) transmission cost analysis,(2) diverse routing,(3) loading analysis of transmission system,(4) network configuration selection,(5) restoration network design
We will describe in the following sections separately.
4.1 TRANSMISSION COST ANALYSIS
There are two results provided by these transmission costanalyses. First, the percentage of transmission cost in totalcost is supported by these analyses. It helps the planners todecide how to distribute the budget. In this study, thetransmission cost is about 40% of the total networkinstallation cost that indicates the telecommunicationnetwork cost system in the Greater Taipei is quite effective.
Second, the cost percentage of each part of the transmissionnetwork is provided by these cost analyses. All thetransmission cost can be decomposed into four parts:multiplex cost, terminal equipment cost, cable cost andconduit cost. The multiplex cost takes the largest percentage50.39% of the transmission cost; and the terminal costequals 34.28%; the conduit cost equals 10.58% and thecable cost takes the lowest percentage 4.78%. On the basisof results, the efficient planning of the multiplexerarrangement and terminal deployment will reduce thetransmission cost effectively.
Cost sensitive analysis is also important for the plannerssince different facility cost cannot keep the same level all thetime. Figure 4.1 shows us the results of the cost sensitiveanalysis. The result of these four part cost analysis show thatthe influence on total network cost is very stable.
4.2 DIVERSE ROUTING
ti
Diverse routing has been a basic and popular strategy toenhance the network survivability now. With the demandsloaded into two or more edge disjoint paths, it always keepssome demands survivable for any single failure of thenetwork. Since diverse routing is one of the mosteconomical ways to enhance survivability, it has become afunction of the loading tools used here.
The application of diverse routing strategy depends onnetwork topology. If we cannot find two edge-disjoint pathsfor a demand, the diverse routing goal can not be reached.The computer program can help planners to check theconnectivity of network topology also. Then, planningengineer can improve the network topology later.
Observing all considered alternative plans, we can find thatsome trunks of the new central office at suburban willbecome more important in the following six years, since thenatural growth of the Greater Taipei metropolitan. Soplanners may adds edge-disjoint fiber systems in these newcentral offices to enhance network survivability. By this waythe incremental cost is about 20% comparing with the MCRrouting algorithm. The results show as Figure 4.2
4.3 LOADING ANALYSIS OF TRANSMISSION SYSTEM
To choose the suit capacity size of transmission systems isnoticed in this study because selecting an inappropriatetransmission system will imply the increment oftransmission cost. Analyzing the almost 200 links of theGreater Taipei network, the loadings of all the links in thesealternative plans are distributed as follows.
> 24 DS3 : 6% 10%12 24 DS3 : 11% 18%3 12 DS3 : 33% 39%1-- 3 DS3 : 25% 27%
1DS3 : 15% 17%
Obviously, 3 12 DS3 takes the largest proportion thatindicates the 565Mb/s( or 600Mb/s ) transmission systemwill be the major and economical transmission system in thenext 6 years. In addition, the proportion of greater than12DS3 is over 20% so the introduction of higher speedtransmission system should be considered.
4.4 NETWORK CONFIGURATION SELECTION
A fiber hubbing configuration is proposed as a cost-effectiveway of interconnecting local central offices using highcapacity fiber optic transmission systems and DCS. We canachieve better fills of fiber links and better sharing of thecostly multiplexing and transmission equipment by utilizingthe configuration of aggregating the interon:e traffic from alocal central office through digital multiplexing and opticaltransmission, onto a single route to a common facility hub.
This approach makes the maximized fiber utilization possiblewhile maintaining flexibility for point to point transmissionin an exchange network and allows fibers to be deployedeven in small central offices.
Comparing the results between the hub network and traditionnetwork configuration, we find that the high cost of DCS3/1induces the introduction of DCS3/1 not so attractive. Itdefers evolving to hub network configuration.
4.5 RESTORATION NETWORK DESIGN
The problem of survivability and reliability enhancementbecomes more and more important for migratation of fiberbased networks. Since high capacity and broad bandwith
489
properties of fiber transmission, the topology of networktends to be simpler, weaker structure and each fiber linkprovides more circuits. A link cut in the network will losesignificant traffic and cannot meet the grade of service, evendisconnect the network. So enhancing the networksurvivability effectively becomes a necessary considerationof transmission network planning. The probability of morethan two links be cut at the same time is little, so we onlyconsider restoration single link failure to meet the expectgrade of service to design high survivability network.
For improving the survivability of the Greater Taipeitransmission network, a restoration network among all thetandems is suggested to install. The spare capacity design ofthe restoration network follows the algorithm provided in[71. Figure 4.3 shows the result of the restoration networkdesign. In this proposed restoration network, For averge,each spare DS3 restores 2.48 DS3s while any single linkfailure occurs. Since the working DS3s and the spare DS3sshare the same transmission system, the increment for therestoration network cost is quite cheap. And the generationof the restoration network makes all the circuits among thetandems can be 100% recovered for any singe link failure.
5. RELIABILITY EVALUATION
Zero network failure is most desirable from subscriber'spoint of view. Cost is not always the only consideration. Asuitable quality measurement of survivability for thetelephone network must consider both subscriber's need andnetwork revenue simultaneously.
Quality of service to users is usually not affected directly byproblems within relevant network facilities, but by trafficthroughput degradation. Obviously, it would have noinfluence on users from a link failure if there is nothroughput degradation.
There is traffic-oriented approach to network survivabilityproposed. Traffic-based measures can be used to estimaterevenue loss and as an indication of customer's satisfactionof the services. We choose blocking probability as areliability measurement that provides a criterion to comparedifferent network configurations and quantify networkperformance under stress.
5.1 SURVIVABILITY MEASURES
A quantitative analysis method for network survivability isan essential part in network design. In this study of networkconfiguration, we ignore equipment failure rates, down timeand statistical variations of offerred traffic. We limitourselves to the case of one link failure at a given time andusing an iterative procedure to compute probabilities of end-to-end loss between node pairs. Traffic-weighted end-to-endblocking is then calculated to evaluate the network-wideimpact of the failure. Finally, the following parameters arecalculated for given physical link failures.
n : global blocking probability
= total loss traffic / total offered traffic
nx : the percentage of total traffic with end-to-endloss probability greater than a given value x%
Px: the percentage of total number of flows end-to-end loss probability greater than a given valuex%
5.2 SURVIVABILITY ANALYSIS
In this section we present a procedure used in this study toanalyze and quantify the survivability of a network. Figure5.1 shows the block diagram of the procedure for network
a.
survivability analysis. Based on the results of end-to-endtraffic forecasting, trunk network design and transmissionnetwork design, the algorithm identifies all the node pairsaffected and the number of lost circuits along the path duringa link failure. Then, the affected node pairs with their lostcircuits are used in calculating network performance. Theprocess is repeated for every physical link in the network. Inthe end, the results of single-link failures are analyzed and
the parameters 11,11x and Px of network survivability aredisplayed against the axis of links.
5.3 SURVIVABLE NETWORK DESIGN
The improvement of network survivability can be obtainedby strategically locating spare capacities in the network. Incase of failures, the network will use spare capacities andDCS to reconfigure the network that alleviate the influence ofthe failure.
It is a new challenge how to design transmission networkthat achieves a suitable service survivability. In our point ofview, a suitable survivability level must take the tradeoffsbetween cost and revenue into consideration. In this study,we do not recommend any particular service level, justshows the result number of links needing protection and totaltraffic loss at several given levels of plans (Table 5.1).
In this protection study, we also tried to find favorablecapacity requirements, using 50% or 100% spare capacityfor failed link, to satisfy the constraints of designated n,nx
and Px. We were able to calculate the total cost of theprotection network including the cost mentioned above. Tworesults are shown in Table 5.2 using 11<5% ,173<10% andP3< 10% .
5.4 CONFIGURATION COMPARISON
Any network configuration change produces different trafficserving characteristics and related cost. One still unquantifiedperformance aspect of each network configuration is itsdegree of sensitivity to unexpected link failure. Using end-to-end service concepts, Figure 5.2 makes meaningfulcomparison between two different configuration designs.Where each point on the curve represents a single-link failurethat makes an average end-to-end blocking greater than orequal to certain level.
ACKNOWLEDGEMENT
The authors are indebted to Ching-Jiang Lee, the deputymanaging director of NTTA, who initialize, direct andmonitor this study. Thanks are also to members of this studyin NTTA for many helpful discussions and constructivesuggestions.
REFERENCE
1.Z, B. Sun etc,"Trunk Network OptimizationPlanning(TNOP) system report",TelecommunicationLabatories, Taiwan ROC, 1988.
2.C, C. Shyur etc,"Local Transmission NetworkConfiguration Planning System report",Telecommunication Labatories, Taiwan ROC, 1988.
3.H. L. Wang,"New Dimensioning Method forTelecommunication Traffic Forecasting",Telecommunication Laboratories Internal Report,ROC.
4.Bisesel-Guitonneau S., Camoin(B.),"Network DesignTaking into Account Breakdown and Traffic Overloads'',
490
Ann. Telecommunication., 35, p.143-149, 1980.5.Robert Warfield and Mark Rossiter, A method for
quantitfying errors in forcasts", Telecom. AustraliaResearch Laboratories Melbourne, Auatralia, 1985.5. P.A.
6.Caballero,"A Method for the Optimization of TelephoneTrunking Networks with Alternative Routing", ITC-6,Munich, pp. 145/1-145/7, 1970.
7.Y, M. Wu etc,"An Efficient Algorithm for PlanningRestoration Facility Capacity", Vol.1, 13th ITS, 1992
(a) two-level fully routing hierarchy
IS A LS B
Variant 1
LS A LS B
Variant 3
LS A
Variant 2
LS B
MS A MS B
I
(3 6LS A LS B
Variant 4
IS A LS B LS A
Variant 5 Variant 6
(b) Variants
LS B
LS: local switch MS:tandem switchFigure 3.1 Two-level fully routing hierarchy and its variants
COSI
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 1818 alternative plans
Figure 4.1 The cost sensitive of each equipment
cost
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
18 alternative plans
Figure 4.2 The increment of diverse route
SurvivabilityMeasure (n,nx,Px)
I1
111
I
I
-4--- Constrains
Links
Figure 5.2 Characteristic functions and survivability constrains
491
a + b :
a - the no. of working DS3sb - the no. of spare DS3s
Figure 4.3 The restoration network design of Greater Taipei
TrafficForcaning
Trunk NetworkDesign
TransmissionNetwork Design
Physical Lank CutIdentify Affected Node Pairs
and no. of Circuit Lost
1
Calculate NetworkSurvivability
NetworkSurvivability
MCASIIIL
i
Figure 5.1 Network Survivability analysis
ENTERPRISE NETWORKING IN ASIA
Ken ZitaManaging Partner
Network Dynamics Associates, Inc.New York, USA
1.0 ABSTRACT
Multinational corporations are rapidly expanding the scope and complexity of regional communicationssolutions. This paper addresses the strategic and operational challenges faced by end-user communica-
tions managers in the context of regional regulatory and technological trends. The essay concludes withan examination of the options for regional "hubbing".
2.0 INTRODUCTION
Demand for corporate networks in Asia is soaring. Asmultinational firms continue to invest in commercial andmanufacturing operations in the Pacific Rim, the need forcorporate communications networking has grown acute.Telecommunications is redefining the concept of marketproximity and business strategy, and the gap betweenregional business centers, international export destinationsand corporate home offices shrinks with the installation ofeach new fiber optic line.
The Asia/Pacific region presents profound new challenges totelecommunications and IS managers. Regional GNPgrowth is forecast at about 5% for 1992, almost twice theworld average. Some countries, notably Thailand, Malaysiaand Indonesia, expect to grow 7%-8%, and south China'seconomic boom will push domestic production over 10%this year. International switched traffic in the region isexpanding 20%-35%, while volume of some public datanetwork (PDN) service carriers is surging at 100%-150%per year.
Market liberalization and telecommunications sector reformare redefining competitive trends in almost every majortrading nation. The scope and range of liberalization variesfrom almost total deregulation (New Zealand, Australia) toextensive carrier competition (Japan), to gradual andselective introduction of alternative service providers(Korea, Malaysia, Thailand), to carefully controlledgovernment management (Singapore, Hong Kong), to old-style monopolies (China, Taiwan, Indonesia). UnlikeEurope, where economic planning and information network-ing developments arc monitored by the European Commis-sion, Asia has no common market, few similarities inindustrial or political organization, and widely divergentvalues and expectations. Each country has vastly differentrules and procedures regulating telecommunications policy,
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shaping both the scope and flexibility of end-user network-ing opportunities.
Communications managers designing networks for Asianeed to be clever. While business in the Pacific is booming,multinational corporation's (MNC) regional investmentstrategies remain relatively immature compared to those inplace for Europe and Latin America. Many companies'operations are based on scattered low cost manufacturing orsourcing opportunities, rather than seasoned campaigns topenetrate national markets. As Asian growth consistentlyoutpaces the lackluster western economy many firms arerecalibrating market strategies to tap the brisk activity.Localization is vital. New acquisitions, alliances and staffincreases place extraordinary demands on network architec-tures Pri3ineered for simpler times. And if the boardroomplan for the region is not clearly defined, network managersmay be required to do some creative second-guessing toanticipate the needs of the firm.
Two critical questions global communications managersmust address while establishing regional networks in Asiaare: Will the system be managed primarily as a privatenetwork? And, where is the optimal site -- or sites -- forregional network hubs?
3.0 USER NETWORKING OPTIONS
Because of the extraordinary characteristics associated withmanaging networks in Asia -- time zone differences, leasedcircuit break-even economies, geographic distances andcultural gaps as wide as the Pacific -- users must determineif they are prepared to commit to a regional private networkstrategy, or if they will rely on more traditional carriersolutions such as IDDD, switched 56/64, national PDNs, andinternational value-added networks (IVANs).
Composition and complexity of the Asian network naturallydepends on the firm. Very large corporations typically haveno choice but to build regional leased circuits networks. Theymay not, however, necessarily deploy staff to manage theequipment. Firms with modest networking requirements,unwilling or unable to justify investments in regional privatebackbones, may depend on the big international VANs forregional support. The IVANs are especially valuable in thefast-growing but difficult-to-manage developing countries,where delivery delays for expensive dedicated channels canreach two years.
Public (carrier-run) X.25 is used throughout the region,though it is clearly the "poor cousin" to international privateleased circuits. Public data networks (PDN) are rarely a datatransport option of first choice for inter-regional traffic, asthey might be in Europe. Quality and prominence ofdomestic PDN services depends on the country. In Taiwan,for example, a new virtual data services (over existing X.25)is being introduced in effort to stem the anticipated migrationof data traffic to private circuits, when market liberalizationof the state carriers takes hold in 1993. In Thailand, a newcarrier managed by Singapore Telecom, Datanet, has soaringdemand for its circuit-switched "overlay" platform; 9.6 kbpsservices with error checking can be installed in days, cuttinglong lead times and gauranteeing data delivery through therickety infrastructure. Indeed, in many countries the greatestdifficulty with PDNs is gaining clean access to the localnetwork node.
Users have an increasingly wide variety of carrier services inAsia from which to choose, but options are still dominated bytraditional switched and dedicated services. Higher function-ality services, such as VPN, X.400 and network-based framerelay, are still in the planning, pilot or very early implementa-tion stages. Japan, Hong Kong, Singapore, Australia andNew Zealand have far and away the most developed network-ing environments, with a high degree of network digitization.The middle-income and developing countries all haveambitious infrastructure expansion programs, and domesticline growth can reach 15% per year.
One of the great beacons of carrier marketing in Asia is one -stop shopping. Provisioning and network managementagreemmts among carrier help smooth the logistics ofprocuring, testing and maintaining regional circuits. Mostusers agree, however, that managing physical connectivity isthe dimension of network support that, while complex,ultimately presents the least difficulty.
The greater challenge is engineering the network above thephysical layer. In the increasingly complex corporate datanetworking environment, the real challenge is findingsolutions for dynamic bandwidth allocation for bursty trafficfrom LAN/WAN bridging, videoconferencing, and so on.One-stop shopping is an administrative and procedural matterthat barely address user's real network management needs.Carriers can manage circuits well enough, but their ability tosupport higher OSI layers remains suspect. Even as carriervalue-added services grow increasingly complex, emphasis is
on connectivity and transport, not on interoperability andsystems integration. U.S.- and Asian-based carriers fareequally in this weakness. Users seeking comprehensivefacilities and network management solutions in Asia -- thatis, control and surveillance equivalent to what they wouldprovide themselves -- rightly question if carriers are up tothe task. Firms must thus choose between embarking oncapital-intensive private line network, or wait to see if andwhen carriers will live up to their promises to providecomprehensive solutions.
Enterprise network management strategies seem to run incycles, and the prevailing wisdom is that users are willing toentertain carrier network management and outsourcing as aserious consideration -- to the carriers' delight, and often, tothe users' nagging frustration. Many users would like tofind a networking services company that could, as severalAsia/Pacific network managers have said, "take the wholething off our hands." None feel confident that any singlefirm has the wherewithal to accept that responsibility today.
With all the promises and media hype surrounding thecarrier groupings -- whether or not NIT and Telekom joinedSyncordia; if MCI gained a leg up on AT&T by creating theFinancial Network Association (FNA); if Pacific Partners(AT&T plus all the Asian carriers less Cable & Wireless)will provide "magic bullet" solutions for regional users --one has to wonder if users' most vexing concerns are evenbeing addressed. None of the consortia begin to considerthe notion of comprehensive outsourcing. Until alliancesare formed between the transport carriers and systemsintegration firms like IBM, DEC, GEIS, or EDS, "manageddata networking services" in Asia will amount to little morethan carrier "babysitting" of communications equipmentand circuits.
Facilities management -- babysitting -- is nonethelessgrowing popular. Users who cannot justify local staff (orhave difficulty retaining them) like the idea of leavingnetwork terminal equipment in reliable hands, while carriersthink facilities management will provide a lever for betteraccount control. It is usually sold like real estate -- by thesquare meter of equipment space requited -- plus a mark-upfor technical supervision. Hong Kong has the largestnumber of customers, with about 160, followed by 60 inSingapore, 20 in Japan, and a dozen in Australia, more orless reflecting the distribution of corporate regional hubs.None of the carriers have been successful at securing morecomplex "outsourcing" (equipment buy-back) arrange-ments, nor regional network and engineering designcontracts. To date, multinational users have largely opted toretain control over their Asian networks.
Carriers hope to lure users to international virtual privatenetwork (VPN) offerings. Inter-regional and trans-PacificVPN services are expected to post sharp growth, thoughthere are also at least two significant impediments to useracceptability. First, voice and fax traffic is important forcost-justifying expensive international private circuits.Most (American) multinational traffic is across rather than
493
within the Pacific Region, and by stripping voice and fax offthe backbone and onto a VPN, critical financial economiesare lost. (Today fax accounts for approximately 60% of alltrans-Pacific carrier traffic). Second, some carriers requireTI/E1 (1.544 - 2.048 mbps) network access to supportVPNs, even though firms may be operating only DSO (64kbps) circuits -- or slower. The cost of local access mayoutweigh the efficiencies won with the virtual network.Despite these misgivings, VPN take-up in Asia will likelybe strong.
4.0 REGIONAL ENTERPRISE NETWORKINGTOPOLOGIES
Depending on regional presence, network applications, andbusiness growth scenarios, companies are deploying avariety of topologies to serve thei- Asia Pacific communica-tions needs. Some firms are content with simple starconfiguration networks, sending regional low-speed datainto a simple hub with a single high bandwidth circuitacross the Pacific, complemented by IDDD for voice andfax. Other companies, dependent on transaction processing,heavy file transfer, or financial data management, are moreinclined to duplicate domestic information systemsarchitectures with complex, redundant network topologies.
Many regional networks have grown up in piecemealfashion: circuits are added when new offices or factoriesrequire direct communications with headquarters, with littleconsideration for a regional plan. The result may be aninefficient, hodgepodge network. As traffic to and withinthe region increases, weaknesses in design become apparent.Today a wave of companies are seeking to achieve betterfinancial and technological economies and closer integrationwith U.S. and European systems thro'igh network redesign.
At the strategic level, firms need to determine what degreeof support and compatibility is required for Asia Pacificnetwork sites. Many companies are establishing globalmanagement systems with consistent hardware platformscomprised of muxes, moderns and front end processors.This continuity comes at a cost. Creating a universalmanagement environment may require significant upgradeof existing equipment, and a "highest common denomina-tor" approach may not necessarily be the most appropriatesolution for the firm's Asian business activity. Similarly,the high cost of trans-Pacific circuits can make replicatingdomestic network performance levels for redundancy orquick response brutally expensive.
For example, a company may be formalizing its domesticU.S. solutions for LAN/WAN integration, but in Asia,where PC and LAN penetration is limited, the bandwidthsupport and processing power may not be needed. With nooverlap in time zones between regional offices and head-quarters, voice traffic may still ride on the corporatebackbone (rather than on a VPN). VPNs will becomeincreasingly valuable options for inter-regional voice traffic
494
in the future, as KDD, Singapore Telecom, C&W, AOTCand the US carriers broaden their service portfolios. Somefirms use international 800 circuits to provide field employ-ees dial-access to VPN nodes in the U.S., thereby achievingsome VPN functionality without paying for stiff VPN accesscosts.
An MNC's fundamental data processing strategy, expecta-tions for network management, and overall networkflexibility also impact regional enterprise network planningoptions. Some companies, striving to achieve better MISeconomies through consolidation of data centers, mayattempt to harness "night MIPs" on home-office comput-ers. A subsidiary in Thailand, for example, may poll amainframe in Texas during the Pacific business day whenthe machine is underutilized -- consolidating control atheadquarters and reducing regional support costs. Harness-ing U.S. or European processing facilities generally impliesbigger network transport capacity, which is costly, andwhich demands a high degree of resiliency and reliabilityfrom international circuits. Both factors tend to makecommunications managers nervous. In countries with spottyquality records, a top-down MIS strategy can produceconsiderable dread in the field.
Network management is another bogeyman in the planningprocess. Larger firms have begun to implement "follow -the -sun" network monitoring, where separate U.S.,European and Asian control centers rotate responsibility forviewing the entire network during the local business day,and hand over control as the business day rises in the nexthemisphere. American users accustomed to a high degree ofvisibility into carrier facilities -- such as real-time statusmonitoring, fault isolation, trouble ticket reporting, and soforth -- find little to work with from any of the major Asiancarriers. Today users depend chiefly on existing mux andmodem element management systems. With the introduc-tion of DACS overlay networks, carriers are capable of ahigher order of network management on PLCs, but thisfunctionality and control is not shared directly with users;the big regional service providers are not inclined to grantusers virtual access to the carrier network managementplatforms, as in AT&T's Accumaster or BT's Concert.
A further consideration for users is flexibility. If theregional business strategy is in flux, and for many compa-nies it is, the network may need to accommodate unpredict-able traffic from new manufacturing or production sites, orsudden changes in topology resulting from acquisitions. Atthe same time, future requirements may demand a full-meshnetwork, and the architecture may need to be engineeredwith future distributed processing and distributed support inmind.
As in domestic systems, carrier switched services play animportant role in regional enterprise networks. Companiesexpecting to use ISDN -- as an architectural option, or forprivate leased circuit back-up -- will find interoperahilityproblems between even the most advanced countries. HongKong and Singapore, the countries with the highest ISDN
penetration (as a percentage of total lines), have differentISDN signalling environments, and neither sees it in itsinterest to ensure smooth compatibility with the other. Incontrast to Europe, where carriers are working together toresolve variations in ISDN standards to achieve greatercohesiveness, Asian carriers with competitive pressureshaunting are not acting quickly.
5.0 SAMPLE NETWORKS
Companies develop unique topologies to support regionalnetworks, and the following examples illustrate three basicdesigns.
A simple and reliable network topology, in this casesupporting a major hotel chain, is engineered for both highredundancy and maximum flexibility. The architecture is aphysical ring (see figure 1), linking the U.S. with Japan,Hong Kong, Singapore and Australian, and back again tothe States.
Redundancy is high because traffic c, 1 be routed in eitherdirection on the backbone circuits. Under normal operatingconditions, primary traffic from Singapore to points southflows through Australia, and primary traffic from HongKong north flows through Japan; the circuit betweenSingapore and Hong Kong is largely quiescent. All sites onthis network have the same relative importance, and theprobability of failure on a link is the same at each node. Asdesigned, the system can tolerate any single circuit fault.
Flexibility was a central consideration in the design for tworeasons: the locations of the reservation offices are subjectto change, and the company's plans for new hotels aredynamic, with many projects pending. By establishing astable backbone, adding or deleting sites is straightforward.Companies that cannot be certain of the full scope ofbusiness operations need to devise an architecture thatallows flexibility without significant penalty.
Figure I
Another common network configuration is for firms to rundedicated circuits into Japan, which often has special trafficdemands and applications support requirements, plus aseparate star-hub network serving other areas in the Pacific.
Figure 2 below shows the network schematic for a largeconglomerate. The Japan-U.S. traffic is routed overfractional T1 circuits (256 kbps) to a site near the U.S.headquarters data center, and redundant routing is availablebetween Japan and the southeast Asia network node in theevent of a serious network outage. The Hong Kong-U.S.route terminates at a second site near the headquarters forsecurity. Hong Kong is the primary feeder site for centraland south Asia, funnelling traffic from 13 countries onseparate 64 kbps circuits.
Interestingly, because of the time zone differences betweenAsia and North America, peak daytime traffic within Asia --for instance, between Japan and Hong Kong, which for thisfirm is a high volume corridor -- can be routed via the U.S.over the fast-packet (frame relay) mux network, morecheaply than though direct IDDD dialing. The reversescenario from the U.S. to Asia applies as well, wherebyrouting domestic U.S. calls through the corporate network --via Asia -- is in some instances less expensive than dialingover a domestic U.S. VPN.
Some companies administer circuits to Japan as a discretesub-network, with connectivity to a second, southeast Asianhub only for backup.
Figure 2
A third scenario, supporting extensive manufacturing, salesand component sourcing operations, is engineered for highvolume data and video conference, with diverse routingthroughout. Trans-pacific circuits from Japan arc twin 128kbps lines, terminating at separate domestic sites. Second-ary circuits from Hong Kong and Australia use only 64kbps. The company believes that the 64 kbps capacity willdouble by year-end 1993 (and that the 128 kbps channels
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will grow to 192 kbps or more), mainly because of increasedtraffic accelerated by the deployment of TCP/IP-basedapplications. The company has a number of data centersthroughout the region, though Singapore acts as a client/server hub
Figure 3
0
128 kbps primawith 64 kbpsfor diversity
While each network has unique characteristics, somecommon themes are apparent. for terminal applications infour different countries: India, Indonesia, Malaysia andThailand. Hong Kong is a hub for the Philippines and threelocations in mainland China, which are triangulated withdomestic leased lines -- a complex matter in the People'sRepublic. Most countries on the network have TI/E1 accessdomestically.
After analyzing the local competitive environment andinternal traffic requirements, each firm identified the needfor a physical ring, and the network topologies reflect theirrespective variations. The hotel's operations are distributedevenly throughout the region, the conglomerate hasconsiderable traffic between its two primary hubs, and themanufacturer has immense requirements in Japan. Themanufacturer added smaller backup circuits for key sites,while the hotel chain built in backup capability with astable, reliable configuration.
6.0 HUBBING OPTIONS
Selecting an Asian hub site has become a dark science. Theoptions used to be simple, if only because they were solimited. Firms had facilities in Japan and, separately, a huhfor the rest of Asia in Hong Kong. With the profound,consistent growth in Asia's economies, the dynamics ofregional trade arc shifting, and with them, the need for moreflexible networking arrangements. Singapore is now thegateway to the vibrant ASEAN region, Australia is claimingits place in the Pacific Rim, and even the stalwart PTTs inKorea and Taiwan have begun to recognize that the
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continued growth in national wealth depends on liberaliza-tion of telecoms solutions for large users. Competitionamong countries -- and not merely among carriers -- makesthe choice tangled. Government tax concessions and R&Dincentives are bandied about in the same breadth as leasedcircuit break-even economies and processable packet size.
Sorting through hubbing options is complicated, and noreliable rules apply. Likely hub sites may be managementoffices or large manufacturing facilities, though networkhub technology sometimes resides at an entirely indepen-dent location. As the preceding section showed, companieswill often use a hierarchical network of primary hubs (wheremultiple circuits or a regional data center resides), andsecondary hubs (for redundancy, low volume traffic routing,or regions with new business development). Head officepolitics sometimes play a big role. The need to establish alocal "showcase" office can outweigh traditional network-ing concerns such as traffic patterns, technical support,circuit costs, and so forth. Hong Kong is still the preferredhub location measured in terms of toal regional network hubsites, with Singapore nipping after its heels; Japan andAustralia are scrambling to expand minority shares.
Assessing infrastructure fundamentals in each country iscritical. Tables 1 and 2 identify a few general parametersthat need to be taken into consideration; competitive accessand flexible interconnection are especially important. Userslearn quickly which regulations are "real", and which canbe stretched or broken. Only Japan and Hong Kong havedirect fiber links and diverse fiber routing with NorthAmerica. Singapore has just recently gained fiber connec-tivity via Brunei, but Australia will not have optical linksuntil late 1993. Additional considerations include terminalinterconnection procedures and restrictions; direct access tosatellite facilities, earth station ownership; and localdefinitions for "group VANs" and circuit reuse or resale.
Generally speaking, circuit pricing remains the weightiestconcern in hub site selection. The cost of inter-regionalcircuits are characteristically equal to or only marginallyless expensive than trans-Pacific Routes, and aggregatediscounts have been a strong incentive for establishing ahub. Carriers in Hong Kong, Singapore, Japan and Australiaall offer volume and aggregate circuit pricing schemes.Most are encouraging migration to digital circuits andconsiderable economies can be achieved at higher linespeeds; 64 kbps DSO channels have become the basicbuilding blocks of regional enterprise backbone networks.Countervailing accepted logic (at least as it is espoused bythe U.S. carriers), the U.S.-to-anywhere portion of an Asiannetwork is not necessarily the cheapest leg of the journey.See Table 3.
7.0 HUB CHOICES
Hong Kong, still very much the Pearl of Asia, has long beenthe preferred regional networking center, and commandssome 60% market share of Asian MNC hubs. Uncertainty
Table I: Regulatory Matrix8 Largest Asia/Pacific Market
(ranked by degree of liberalization)
ForeignPrivate Equity?
Competition in Private
Domestic NetworkVoice Voice I nterco n.
Private
SatelliteE.S.
Shared
PLC
Australia
New ZealandJapan
Hong KongKoreaSingapore
Taiwan
PRC
0 0
0 0
0 0
0 0
0 0
0 0 0
0 0 0
0 0 0
00 0
0
o
o= yes = no
Table 2: Key FactorsMain Hubbing Destinations
(Ranked by User Preference)
Gov't Corporate Individual Intl Fiber Route IPLC F.M.
Country Support Tax Rate Tax Rate Fiber Diversity Delivery Users
Hong Kong No 16.5% 15% 2Q90 3Q90 6 wks >160
Singapore High 10%, 31% 33% I Q92 2Q93 6 wks > 50(Brunei)
Japan No 51.4% 65% 2Q89 3Q91 16 wks > 20
Australia Medium 39% 48.25% 1Q93 4Q94 12 wks < 20(NZ)
over the Colony's political future after its June, 1997reunification with the PRC leaves some communicationsmanagers wondering if their investments will be safe.Several firms have pulled hubs out of Hong Kong in the pastyear, notably Reuters and Federal Express, but they areclearly the exception to the rule. Most China watchersconcur that the changes pending in Hong Kong are likely tobe more cultural and political than economic: few believethat the transition of sovereignty will impact foreignbusiness operations in a material way. Popular opinionactually maintains that because Hong Kong is the undis-puted gateway to China, the importance of Hong Kong willactually increase, as the economy on the mainland continuesto boom. It will retain this role, however, only if thepolitical row between Britain and China over the intcrpreta-
tion ofthe Basic Law is resolved amicably.
Of more immediate concern to network managers in HongKong is soaring inflation (perhaps 13% in 1992), extremelyhigh staff turnover, and escalating technical staff salariesand bonuses. At the same time, the advantages of HongKong remain: general business practices are highlyefficient, and the local telephone company, Hong KongTelephone, is highly responsive to MNC planning needs.Further, taxes are lowest in the region: 16.5% for corpora-tions, 15% for individuals.
Whereas Hong Kong is the gateway to China, Singapore isthe window on ASEAN (Singapore, Indonesia, Malaysia,Philippines, Thailand and Brunei). As such, many compa-
497
Table 364 kbps Half-Circuit Pricing
(SUS Dollars per month as October, 1992)
HKTI ST KDD AOTC AT&T
HKTI 5125 4100 5125 5157
ST 5250 0 5250 5250 5500KDD 4830 4830 0 4830 4830AOTC 6408 6408 6408 0 6408AT&T 7400 8400 7400 8050 0
Notes: All tariffs are for submarine cable circuits, and are subject to volume and negotiateddiscounts. New fiber optic cables connecting Hong Kong-Singapore-Australia, expected tobe in service late in the first half of 1993, will reduce rates up to 20% next year. AT&T
rates are to New York City.
nies are designing networks to leverage the advantages ofeach site.
Singapore is actively courting hubbing business, hoping tocapitalize on the perceived political instability in China --and the "dirty, disorderly and crime-ridden" qualities ofHong Kong life. Singapore seems intent on becoming theSwitzerland of Asia, a manicured, tightly managed financialcenter with calculating government oversight. Of the fourmajor hub sites, Singapore has by far the most aggressivegovernment incentive programs for attracting business,coordinated by its Economic Development Board andNational Computer Board. Firms can obtain generous taxholidays for committing to R&D and local investment.
While Singapore Telecom has long shouldered a reputationfor inflexibility, the tide may be changing. The recentcorporatization of the carrier suggests that it has thepotential to become more sensitive to the market, both athome and abroad. Singapore has the most successful EDInetwork in Asia, managed by ST subsidiary SingaporeNetwork Systems. Like Hong Kong, Singapore has hightechnical staff turnover and fast rising salaries.
As the most powerful economy in Asia, the largest financialcenter, and the country with the highest volume of inboundand outbound traffic, Japan is also a critical hub site forAsia. The difficulty of establishing facilities is cost. Whileinternational tariffs out of Japan have become competitivewith regional counterparts, the general costs of doingbusiness locally has not. High real estate, technical supportand labor rates far exceed any other region in the world. Onthe up side, Japan has extensive competition in servicesprovision, and technical standards are unparalleled.Companies hound to Japan have begun to move data centersand network control centers to suburban locations, southalong Tokyo Bay and to Yokohama, to defray exorbitantoverhead expenses in Tokyo.
Australia has intensified its bid to become a regionalhubbing anchor, underscoring the national commitment tothe economies of the Pacific; Australia's trade with Asianow exceeds that with North America and Europe. Thegovernment offers modest tax and investment concessions,incentives which help mitigate the high standard corporatetax rate of 39% (the maximum rate for individuals is over48%). Extensive fiber facilities into Australia will not beavailable until 1994, but good satellite coverage is in placetoday. Some user questions how Australia, some 4,500miles distant from both Hong Kong and Tokyo, could serveas a hub. In the reality of information networks, however,regional physical distances are arguably irrelevant. AOTCis clearly the dominant carrier in Australia, though Optus,the newcomer led by BellSouth, will be sure to concentrateon attracting MNC customers from its home territory in theU.S.
Both Malaysia and Taiwan hope to become popularcorporate network hub sites. Malaysia is situated strategi-cally in ASEAN's "growth triangle" and governmentplanners believe that Kuala Lumpur can rival Singapore asthe local of choice for regional headquarters. Marketliberalization is encourgaing entrepreneurial access carriersssuch as Information Networking Corporation (INC) andTime Engineering, and Telekom Malaysia is keen to captureinternational revenues it is losing to Singapore.
Taiwan is posied for fundemental market restructuring in1993, beginning with corporatization of the national carrier,the Directorate General of Telecommunications (DGT), andredefinition of network access parameters and opportunitiesfor value-added services. With foreign reserves topping $80billion, the world's eigth largest stock exchange, and agovernment eager to earn political recognition to match itseconomic might, Taiwan will soon cultivate a broaderregional presence in telecommunications.
8.0 CONCLUSION
Because competition for corporate traffic among countries isso intense, users designing networks in Asia are in anexcellent position to negotiate tariff discounts and specialtreatment for local operations. In addition to pricingflexibility on published and group discount tariffs, users canbargain for circuit service level agreements, traffic engi-neering studies (which may sometimes be obtained for free),tax concessions, and favorable terms for facilities manage-ment.
By the mid-1990s, basic public networking facilities inAsia's largest information ports will be comparativelyequal, and even variances in circuits pricing will cease to bea significant factor. Real differentiation will lie in networkmanagement and outsourcing capability, labor costs, andlocal lifestyle. Firms prepared to take advantage of Asia'sever-expanding riches can look forward to increasinglyvaried and robust regional networking solutions.
Ken Zita is a Partner at Network Dynamics Associates,Inc., a telecommunications consulting, market research, andprivate network design firm with head offices in New YorkCity. Mr. Zita has followed Asian telecommunicationssince 1985, and recently spent three months in Thailand,Malaysia and Indonesia examining markets for advancednetworking services.
499
WARC-92 AND THE IMPLICATIONSFOR DIGITAL AUDIO BROADCASTING
Ralph ZeitounBroadcasting Regulation BranchDepartment of Communications
Ottawa, Canada
1. ABSTRACT
The digital technology on which computers is based has been applied to audio broadcasting, making it possible for thefirst time to receive CD-like quality in the difficult portable and mobile environment. WARC-92 allocated frequencybands for providing digital audio broadcasting services from satellite and terrestrial transmitters, clearing the way forselecting an appropriate digital audio broadcasting system. The implications of the decisions reached at WARC-92 fordigital audio broadcasting and its implementation are highlighted.
2. INTRODUCTION
The arrival of compact disks and digital audio tapes hasgiven radio broadcasters sources of programme materialhaving very high technical quality. Until recentlybroadcasters were resigned to the notion that they could notdeliver the same technical quality to listeners due to thelimitations of AM and FM technology and thecharacteristics of the transmission path. However, with theadvent of digital broadcasting which utilizes similartechnology to that employed by compact disks and digitaltapes, the door was op,..tned for AM and FM broadcasters toovercome the technicai limitations and join the age ofDigital Audio (or radio) Broadcasting (DAB).
DAB received a big boost at WARC-92. One item on theagenda of the WARC was to consider the allocation of afrequency band for the broadcasting-satellite service (sound)in the frequency range of 500-3000 MHz, including theaccommodation of complementary terrestrial soundbroadcasting uses within this allocation. After deliberationswhich extended over a month the Conference decided on anallocation.
3. WARC-92
The term 'WARC-92', refers to the World AdministrativeRadio Conference which was concluded in Malaga-Torremolinos, Spain on March 3, 1992. Such internationalconferences are held periodically to make major decisionsregarding the use of the frequency spectrum and satelliteorbits. It is only through the agreement of memberadministrations that there can be order in the use ofradiocommunications. WARCs are administered by theInternational Telecommunications Union (ITU), based inGeneva, Switzerland.
In addition to WARCs, the ITIJ oversees other activitiesamong which are the activities of an important committee.the CCIR (Com ite Consultatif International desRadiocommunications). Member administrations developReports and Recommendations primarily on technical
500
matters, with the objective of allowing radiocommunicationservices to be provided in an environment essentially freefrom interference. The CCIR played an essential role inpreparing for WARC-92, producing an important Reportwhich served as the technical basis for the Conference.
4. WARC-92 DECISIONS ON DAB
There was unanimous agreement at the WARC that digitalaudio broadcasting was needed, and there was generalagreement on typical technical characteristics. But beyondthis, agreement on a frequency band was very difficult.The major problem was that the frequency range inquestion, 500-3000 Mhz, is being utilized by variousservices in various countries, thus there was reluctance toa lesser or greater degree, to introduce a new service. Inaddition, there were several implementation concepts ofDAB. Some countries considered satellite only services,others terrestrial only, others needed satellite and terrestrialin the same band while others found it more convenient toimplement satellite and terrestrial services in differentbands. In several of these combinations two grades ofservice were proposed; one having excellent gradeequivalent to compact disks and the other having lowerquality grade which would be more economical and fasterto implement.
After numerous discussions and compromises, the followingwas agreed upon for satellite and terrestrial DAB:
a. The band 1452 - 1492 MHz (L-Band) was allocatedon a world-wide basis except that,
h. the USA indicated by footnote that it would use theband 2310-2360 MHz (part of the S-Band) instead.India joined in this footnote in addition to the L-B and .
c. Some countries designated by footnote the band2535-2655 MHz (another part of the S-Band) forDAB use in addition to the allocation at L-Band.Those countries are Belarus, China, India, Japan,
Korea, Pakistan, Russia, Singapore, Sri Lanka,Thailand and the Ukraine.
d. A Resolution (COM4/W, now Resolution 528) wasadopted which calls for a World AdministrativeRadio Conference to be held not later than 1998 toplan and rationalize the use of DAB in these bands.
Another Resolution was adopted in response to the desireby some countries to explore the VHF band for terrestrialDAB. This Resolution (COM 5/10, now Resolution 527)calls on the CCIR to undertake the relevant technicalstudies associated with terrestrial DAB, focusing primarilyon the VHF broadcasting bands, and requests considerationof placing on the agenda of a future conference, the subjectof terrestrial VHF digital sound broadcasting for Region 1countries and interested countries in Region 3.
In addition, several countries suggested that future systemsmight not be limited to the geostationary satellite orbit,especially in high latitude areas. Since non-geostationarysatellite orbits had not been studied in detail, Resolution(GT-PLEN/2, now Resolution 522) was adopted asking theCUR to study, inter alia, the characteristics of the GSO andnon-GSO for satellite DAB.
Finally, because of the impact that the broadcasting satelliteservice would have on existing services, a number ofadministrations have elected to limit the DAB services to asecondary status until the year 2007. This is one of severalmeans available for allowing sufficient time for existingservices to phase out their operations.
The administrations which chose an additional band at2535-2655 MHz (c. above) have the option to also use the1452-1492 MHz band. Indeed, the USA may also be ableto obtain the option to use the 1452-1492 MHz band atsome point in the future by seeking the agreement ofneighbouring administrations.
Since all three frequency bands are currently used by mostadministrations for other services, there was the need toprovide for an orderly transition to the broadcasting service.Resolution 528 therefore, calls for a competent conference,to he held preferably by 1998, to plan the broadcasting-satellite service, develop procedures for the coordinated useof complementary terrestrial broadcasting, and reviewcriteria for sharing with other services. In the interim,terrestrial and broadcasting-satellite systems would have tobe successfully coordinated with other administrations. Untilthe future conference has been convened, broadcasting-satellite systems are restricted to the upper 25 MHz of thesebands, subject to successful coordination withadministrations in accordance with the procedures describedin Resolution 33 of the Radio Regulations.
5. IMPLICATIONS FOR DIGITAL AUDIOBROADCASTING
Now that WARC-92 has dealt with the frequency band
501
issue, the next major challenge is the selection of a DABsystem standard and the preparation for the 1998 WARCidentified in Resolution 528. For much of what follows thediscussion focuses on systems that might be introduced inthe new L-Band and S-Band frequencies which are thesubject of that conference. Systems providing excellentCD-like quality will be addressed, it being recognized thatothers with lower quality to meet specific applications couldbe derived from these systems or designed separately.During the preparations many common domestic issues willbe considered by administrations and the results submittedto the CCIR for global harmonization and consensus. Someof these issues are described herein.
5.1 System Standardization
With the new broadcasting bands, we have the rareopportunity to select a new system rather than follow theusual practice of trying to modify and improve an existingsystem. It is also convenient and economical to choose onestandard which could be used for terrestrial and satelliteservices. What characteristics should the system have,knowing that we will likely have to live with the selectionfor decades to come?
CCIR Recommendations 774 for terrestrial DAB and 789for satellite DAB describe, among other things, thedesirable technical and operational characteristics andcapabilities of the high quality digital broadcasting systemof the future. The aim is to have the same or very similarcharacteristics for both the satellite and terrestrial services.From these Recommendations it can be concluded that theessential characteristics and capabilities of the systemshould include at least the following:
technical quality must rival that available fromcompact disks so that broadcasters will be able tomeet the growing expectations of the listeningpublic.
the high quality service must be available in movingvehicles which means the system must be capable ofdealing effectively with multi-path signals.
the system must use the frequency spectrum in anefficient manner.
it must be technically feasible to use a commonreceiver to obtain service from all means ofprogramme delivery such as can he obtained bymany configurations of satellite and terrestrialtransmitters and cable distribution networks.
it should provide the flexibility to transmit soundprogrammes with lower bit rates to allow anincreased number of sound programmes at reducedquality and as well should permit a trade-offbetween extent of coverage for a given power.service quality, and number of sound programmes.
it should have the flexibility to also provide
supplementary information such as programmerelated data and value added services with thecapability of interfacing to information technologyequipment.
the system must be affordable.
For the past several years the CCIR has been active inreporting on studies and tests on different methods ofproviding DAB services, leading towards the selection of astandard system. CCIR Reports 1203 for terrestrial DABand 955 for satellite DAB describe several possible systems,including one that has already been developed, named'Digital system A', otherwise known as 'Eureka-147'.
How close does this Digital System A come to meeting therequirements identified for the future broadcasting system?Briefly, consider the following:
programme material is analyzed in real time,discarding those parts (over 80%) which the humanear cannot distinguish. This goes a long waytowards improving spectrum efficiency whilemaintaining CD-like quality.
6-12 stereophonic pairs are grouped together andencoded in such a way that, within limits, receivedmultipath signals reinforce rather than destroy thedirect signal. This is a powerful feature whichprovides interference free reception in vehicles andwhich allows repeaters using the same frequencyas the main transmitter to operate within thecoverage area of the main transmitter. Theserepeaters are called 'gap-fillers' and 'coverageextenders'.
for both the terrestrial and satellite cases, terrestrialgap-fillers can be used to fill in areas of difficultreception, allowing the use of much lower power forthe main transmitter and making the system moreaffordable. In the terrestrial case it also improvesfrequency reuse which is good for spectrumefficiency.
coverage extenders can be used to shape serviceareas of terrestrial systems and allow the use of lesspower for the main transmitter which is good forspectrum efficiency.
For relatively small countries, the co-channelrepeaters could be arranged to form a singlefrequency network which covers the entire country.
By keeping overall power levels down an optionalmode of operation becomes available whichrepresents yet another improvement in spectrumefficiency in bands which are practical for bothsatellite and terrestrial use. With careful planning amixed satellite/terrestrial service can be provided inwhich terrestrial stations use frequency blocks which
502
are not used by the satellite service at a particularlocation, and vice versa.
Most of these features have already been demonstratedusing the equipment of Digital System A which could beoptimized for use at the chosen frequency bands.
While some other systems are on the drawing boards andperhaps even demonstrated in laboratories, they have notyet been proven in the field. No doubt this year and nextwill see more activity in this regard.
5.2 Optional Ways to Implement DAB Service
The worldwide allocation at L-Band and the allocation forspecific countries at S-Band provide for DAB use by boththe terrestrial broadcasting service and the broadcasting-satellite service. Prior to WARC-92, CCIR studiesconcluded that at a frequency near 1.5 GHz, the widestimplementation flexibility would be preserved and a rangeof coverage options would be provided. Studies need to becarried out to determine the practical use of the S-Band forterrestrial and satellite DAB by those countries which havethis allocation. In any one band however, administrationsshould have the flexibility to implement satellite andterrestrial DAB in one or more of the following ways:
provide a terrestrial broadcasting service as aprelude to a future satellite service.
provide a broadcasting-satellite service first andcomplement it later by a terrestrial service.
provide both of the above services at the same time.
When terrestrial and satellite services are to be introducedat different times careful planning will be required in orderto allow for the appropriate mix between satellite andterrestrial services. With the flexibility described above,administrations can meet the need for national, regional,and local services all within the same frequency band usingthe same receiver. The ability to use the same receiver forthe reception of both satellite and terrestrial services is bothconvenient for the consumer and cost effective.
Generally, it would be difficult to have a broadcasting-satellite service put into operation in anticipation oflisteners eventually buying receivers. It seems easier andmore likely that regardless of the ultimate broadcasting use,terrestrial systems will be implemented first. This wouldallow a build up of receivers in the hands of the public tothe point where it would become economically morefeasible to introduce a broadcasting-satellite service.
5.3 Questions for Administrations
With all the various factors to consider, each administrationneeds to determine for itself what its needs are. Once thepublic becomes aware of the exciting possibilities digitalradio has to offer the demand for such services can be
expected to grow. Administrations need therefore to thinkseriously about what form of digital radio would best meettheir needs so that the appropriate framework can be put inplace to achieve their objectives. Even if an administrationis not interested in early implementation, preparatory workis necessary to preserve future *ions.
In this regard there are some fundamental questions whichneed to be addressed including:
Should digital radio be provided by satellite only, byterrestrial means only, or a mix of both?
If the service is to be a mix of satellite andterrestrial what should the balance be?
What are the relative merits of the availablefrequency bands for the desired operation?
Would the digital service replace AM or FM, or bean add-on service?
What is the appropriate mix of local, sub-national,and national services and how can this mix be met?
How important is it to have freedom from multi-path degradation?
Is high quality service required or will lesser qualitydo?
Should a satellite service be provided from ageostationary or non-geostationary orbit?
What is the best way to minimize the impact onexisting services when digital radio is introduced?
5.4 New Planning Considerations
Planning terrestrial broadcasting stations is commonly doneby establishing service and protection criteria anddeveloping allotment plans through multi-lateralnegotiations with neighbouring administrations. However,the fact that both the satellite and terrestrial services can beprovided within the same band raises some planningsituations which are not normally encountered. Forexample, suppose that neighbouring administrations want toir'nlement DAB in the 1452-1492 MHz band as follows:
- Administration A wants to start with a satelliteservice.
- E iministration B wants to start with only aterrestrial service.
- Administration C wants both a satellite andterrestrial service at the same time.
For the sake of this discussion, let us assume that the DABsystem selected provides 6 stereophonic services infrequency blocks 1.5 MHz wide. A 40 MHz allocation
would therefore provide 26 frequency blocks, each 1.5 MHzin width.
At some point in time it will be necessary to determine howmany of the 26 frequency blocks are to be used for thesatellite service since provision should be made for theterrestrial services of administration B in this exercise.Should administration B decide to use more frequencyblocks for terrestrial service than administrations A or C itshould be free to do so provided such use would also allowthe other administrations to have their appropriate mix ofsatellite and terrestrial blocks.
503
Any of the 26 frequency blocks which are not identified forthe satellite service in an area would be used in thedevelopment of a terrestrial allotment plan. Since suchterrestrial allotments would not have to cope with theinterference from the spill-over signals from the satelliteservice their power levels could be quite modest.
The frequency blocks identified for use in the satelliteservice would be associated with particular geographicareas. To re-use the same frequency block in the satelliteservice may require a large geographical separation. In amixed service concept, these same frequency blocks wouldbe re-used by the terrestrial service at locations between thesatellite service areas. This mixed satellite/terrestrialconcept represents a significant improvement in spectrumefficiency. Since these terrestrial stations would beoperating in the presence of spill-over signals fromsatellites, careful planning would be required to attainusable sizes of service area for the terrestrial service.
5.5 Further Preparatory Work
Traditionally, terrestrial broadcasting services have beenprovided over a given area by a single high-poweredtransmitter. This requires that co-channel stations beseparated by large distances, resulting in low frequencyre-use. A second disadvantage is that there are high levelsof field strength in the vicinity of the transmitter and thiscan invite interference and other problems. The ability touse gap-fillers and coverage extenders in the DABterrestrial service however, gives the opportunity to departfrom the conventional way of providing coverage. Byusing a lower powered main transmitter and relying on gap-fillers to fill in areas of low signal strength, and oncoverage extenders to shape the periphery of the coveragearea, frequency re-use can be significantly improved andinterference potential reduced. Combining the results of thepropagation and DAB system tests that have been carriedout so far has led to the conclusion that at 1500 MHz,reliable DAB coverage in dense urban, urban, suburban, andrural areas can be achieved by using relatively low power.No doubt S-Band will be similarly investigated in the nearfuture.
In the area of satellite DAB, once the system standard hasbeen selected and optimized for the appropriate band it willbe possible to determine appropriate operating parametersand constraints to achieve the desired coverage. Studies so
far have focused on the use of broadcasting satellitesoperating from the geostationary orbit, which is the simplestcase. As the latitude increases however, it become:increasingly difficult to provide coverage becauseshadowing increases as the arrival angle decreases.Coverage at high latitudes can be achieved by placingseveral satellites into highly inclined elliptical (i.e. non-geostationary) orbits and arranging to have them pass overthe desired coverage area sequentially. The use of non-geostationary orbits need not be limited to providingsatellite service at high latitudes. Resolution 522 ofWARC-92, proposed that both the geostationary and non-geostationary satellite orbits be studied. The choice of thetype of satellite orbit has a direct impact on the requiredoperating parameters.
One of the tasks identified in Resolution 528 was todetermine criteria for sharing between DAB and otherservices. Such criteria will give administrations thenecessary tools to assess the impact that the introduction ofDAB would have on the existing services and how to bestplan to rrrke the most efficient use of the spectrum in boththe short and long term. If sharing proves to be verydifficult, an alternative rati -,alization for introducing DABand minimizing the impact on existing services would haveto be determined. Time-phased introduction is oneapproach which should allow sufficient time for existingservices to be phased out only whenever and wherevernecessary.
6. SOME DOMESTIC CONSIDERATIONS
In implementing WARC-92 decisions, there are a numberof domestic considerations which can come into play,depending on the actual broadcasting use envisaged, thenature and extent of existing services, and the protectionthey are to be afforded domestically. For example, Canadais proceeding to implement DAB at an early date by takingthe existing fixed service into account when DAB isplanned. All efforts will be made to implement DAB in away that delays the impact on the existing services so thatat many locations they won't have to vacate the band for along time. While the exact details on just how this can beaccomplished have yet to be worked out, something alongthe following lines could be envisioned:
The criteria for the operation of DAB services andthe continued operation of existing services for aslong as possible would be set.
When the operating parameters for terrestrial DABare known and the size of service areas fixed, therequired geographical separations between variousDAB systems and existing fixed systems may bedetermined.
Once the geographical separations are known anallotment plan for terrestrial DAB could be drawnup.
During the implementation stage, the firstfrequencies to be used for broadcasting in any areawill be those which would have the least impact onexisting services.
The satellite service will be introduced when thereis a sufficient receiver penetration in the hands ofthe public.
In several cases, it may be that existing services couldremain in place for many years. In other cases it may bethat some DAB allotments would have an associatedimplementation schedule which would allow existingservices lead time to make alternative arrangements orvacate the channel if there is no alternative. But thesekinds of details have yet to be worked out and they areunique to the prevailing situation in each country.
7. OTHER STUDIES
Aside from the studies requested by Resolution 528 for thefuture WARC, the CCIR has also been asked to study thefeasibility of providing terrestrial digital radio broadcastingin the VHF band, focusing primarily on the broadcastingbands. Work has been undertaken in some countries inEurope aimed at using the FM band or part of the TV bandfor DAB. The concept is to use vacant allotments or tointroduce temporary measures for digital use until the FMband is vacated for DAB.
In the USA, work is being undertaken to determine thefeasibility of allowing FM and AM broadcasters theopportunity to also provide a digital service withoutrequiring the use of new frequency spectrum. Several newconcepts have been advanced for consideration including in-channel digital signals operating at lower power levels thanthe FM or AM signal, and digital signals occupyingadjacent channels. Testing of several proposed systems willbe undertaken by the EIA throughout 1993. The practicalityof these systems and the extent to which they can meet thecharacteristics and capabilities for digital radio given inCCIR Recommendation 774 should be known bef re theend of the year.
8. CONCLUSIONS
Although the decisions of WARC-92 have cleared the wayfor the introduction of digital audio broadcasting by bothterrestrial and satellite means there is clearly much morework to be done to progress from the concept stage to theimplementation stage. Additional developmental work suchas the establishment of DAB stations in various countries assoon as possible would help to provide the required broadbase of information and experience essential to otheradministrations and the CCIR.
Of particular importance is the selection of a world-widesystem standard for DAB. If the appropriate system isselected, all administrations would benefit from theeconomies of scale and the convenience of having one
common receiver. This has been traditional in radiobroadcasting.
Reaching agreement on a worldwide system standard at theOctober 1993 meetings of CCIR Working parties 10-1I5and 10B, would provide a good boost to the start ofpreparations for the 1998 WARC.
References
1) Final Acts of the World Administrative RadioConference (WARC-92) - Addendum andCorrigendum.
2) CCIR Recommendation 789 - Digital SoundBroadcasting to Vehicular, Portable and FixedReceivers for BSS (Sound) in the Frequency Range500-3000 MHz.
3) CCIR Recommendation 774 - Digital SoundBroadcasting to Vehicular, Portable and FixedReceivers Using Terrestrial Transmitters in theVHF/UHF Bands.
4) CCIR report to WARC-92 - Technical andOperational Bases for The World AdministrativeRadio Conference 1992 (WARC-92).
505
DAB SYSTEMS FOR THE WESTERN HEMISPHERE:SATELLITE SYSTEM DESIGNS
Edward E. ReinhartTelecommunications Consultant
McLean, Virginia, USA
ABSTRACT
The purpose of this paper is to describe the designs of several satellite digital sound broadcasting systems intended either fordomestic service to the United States or for regional or global service involving the United States. The systems are categorized accordingto their service requirements, including service area, receiver size, mobility and cost constraints, and the number, type and fidelity of audioprograms to be provided. The nature of the relationship between service requirements and the regulatory, environmental andtechnological aspects of system design are described both in general and for each of the specific systems considered.
I. INTRODUCTION
As with any satellite radiocommunication system, thefactors that control the design of a satellite sound broadcastingsystem can be divided into four categories:
Service requirements- broadcast service area and intended audience- receiver size, mobility, use, and cost constraints- number of audio programs and number of channels per
program (mono, stereo, surround sound)- signal quality and availability objectives- constraints on the use of complementary terrestrial
transmitters
Regulato., constraints- available frequency allocations- applicable t. ordination procedures and/or assignment
or allotment plans- existing services and frequency sharing criteria
Environmental phenomena in the available frequer.cybands- propagation impairments- noise environment
Technological alternatives and cost tradeoffs- system architecture- source coding techniques- channel coding and modulation methods- satellite transponder and antenna technology- ground antenna and receiver technology.
For satellite sound broadcasting systems, the factors in thefirst category have the greatest impact on system design. Thus, if
the requirement is to serve only fixed or mobile receivers withwell-sited directional antennas, there are comparatively fewregulatory, environmental or technological constraints on systemdesign. The system can be implemented in any one of severalfrequency bands allocated to either the fixed-satellite service(FSS) or broadcasting-satellite service (BSS). The sharing criteria,inter-system coordination procedures (or plans) for using thesebands are well established, and transponders on existing
spacecraft are often available for purchase or lease to initiate thesound broadcasting transmissions. Propagation and noiseimpairments are not serious and do not require the use ofsophisticated signal processing and modulation techniques.
At the other extreme, if the requirement is to reachreceivers in land-mobile vehicles with near-perfect sound qualityand very high signal availability, the satellite system design ishighly constrained. The combination of a small, non-directionalreceiving antenna and serious propagation impairments such asfoliage attenuation, path blockage, and multiple echoes restrict thechoice of frequency bands to those newly allocated for this type ofservice at WARC-92. There are many regulatory constraints onthe use of these bands for satellite broadcasting that make theiravailability for early system implementation uncertain.
To begin with, only one band,1452-1492 MHz, is allocatedon a nearly worldwide basis. But it cannot be used at all in theUnited States, and can be used only on a secondary basis (mustaccept interference from, but cannot cause interference to, otherservices in the band) until the year 2007 in 15 European countries,10 African countries, 4 Latin American countries and 2 Asiancountries. Two other bands are allocated in certain countries:2310-2360 MHz in the USA and India, and 2535-2655 MHz in 9Asian countries and in Belarus, Ukraine, and the RussianFederation.
This paper is essentially the same as the author's presentation to the Technical Forum at Europa Telecom 92, Budapest,Hungary, 12-17 October 1992. 0 1992 International Telecommunication Union (ITU). Reproduced with permission.
The foregoing constraints on the geographic availability ofa primary allocation to the BSS for sound broadcasting make thedesign of satellite systems for either regional or global coveragevery difficult. Moreover, all three bands are subject to planning ata future World Radio Conference to be held by 1998. Until then,only the upper 25 MHz of each band can be used and such use issubject to coordination with existing primary services. Exceptpossibly for the 2535-2655 MHz band in the Middle East or India,use of the new bands would also require the design, constructionand launch of a new satellite to provide a sound broadcastingservice.
In addition to the severe regulatory constraints justdescribed, the propagation problems associated with land-mobilereception force the system designer to use complex channel codingtechniques and to consider the use of terrestrial gap-fillertransmitters to reduce the satellite power that the desired coveragemight also require.
Between the service requirement extremes correspondingto receivers with highly directional antennas and line-of-sight pathsto the satellite on the one hand, and land-mobile receivers on theother, is a service to small portable receivers that will be usedprimarily at fixed indoor locations. Such a service would still usethe new WARC-92 allocations, but would not need the channelcoding required for land-mobile reception.
Regardless of the required service area (domestic, regional,or global), or the constraints imposed by the receiving installation(fixed, mobile, portable), the receiving antenna (directional,omni), and the propagation path (line-of-sight, obstructed), servicerequirements can differ in the number of channels per programchannel (mono, stereo, surround sound), and the fidelity perchannel. Fidelity will be identified as AM-quality, FM-quality andCD-quality corresponding respectively to audio bandwidths of
about 7.5, 15 and 20 KHz and digital bit rates of 16, 32 and 64 kb/sper monophonic channel. The number and fidelity of the requiredaudio channels will of course also impact the design of the satellitesound broadcasting system.
With this introduction to the relationship between servicerequirements and system design as background, the design of fivedifferent types of existing and proposed satellite soundbroadcasting systems will be described. All of the systems areintended either for service to the United States or for regional orglobal service involving the United States. The systems differ intheir service requirements as shown below in Table 1; thedescriptions are given in Sections 2 through 6.
2. DOMESTIC SATELLITE SOUND BROADCASTINGSYSTEMS FOR HOMES WITH SATELLITE TV RECEIVERS
Satellite system for broadcasting radio programs directly tohomes throughout the United States have been in operation forseveral years using analog techniques. Such systems are an adjunctto the satellite broadcasting and distribution of televisionprograms in the fixed-satellite service (FSS) at C band (3.7-4.2 GHz). They can be received in any of the nearly 4 million UShomes now equipped for satellite TV reception in this Land.Using several different satellites, well over 100 programs of FMquality are available either in monophonic or discrete stereochannels using special FM subcarriers in the video baseband of theTV transmission. Many unaugmented satellite receivers can tuneto these auxiliary audio subcarriers. In addition, a few C-bandtransponders are devoted exclusively to stereo radio programmingon a single-channel-pet-carrier (SCPC) basis, but these carriersrequire an auxiliary FM receiver for demodulation.
Until recently, digital satellite transmission of radioprograms was limited to systems for distributing network programs
Table I. Various Digital Satellite Broadcasting System Requirements andCorresponding System Examples
SYSTEM
REQUIREMENT 1 2 3 4 5
Service Area Domestic Domestic Domestic Regional GlobalReceiver type Fixed indoor Aircraft Automobile and
portablePortable Portable
Antenna Highly
directionalHighly
directionalOmnidirectional Omnidirectional Omnidirectional
Propagation Data LOS LOS Variable lossstrong multipath
Fixed loss
little multipathFixed loss
little multipathSignal quality FM, CD FM CD AM, FM AM, FM
Channels/program Stereo Stereo Stereo Mono Monovoice
& stereomusic
No. of programs/
beam
30 2 30 3
System example(s) DMX & DCR Sky Radio Satellite CD
Radio
Afrispace &Caribspace
RadiosatInternational
Band . C Ku 2.3 15 1.5 or 2.5
Service FSS FSS BSS (Sound) BSS (Sound) BSS (Sound)
Status Operational Operational Application Filed Expl License Being plannedInitially
200 monovoice and 20 stereomusic distributed among 50 beams
507
to AM and FM radio stations for over-the-air broadcast. Thisprogram distribution service used transponders on domesticsatellites in the FSS bands and was begun about ten years agousing Scientific Atlanta's DATS (digital audio transmissionsystem). During the past year, many of network affiliatesconverted to a new Scientific Atlanta technology called SEDAT(spectrum efficient digital audio technology), which now offers theoption of compressing the audio signal to triple the number ofprograms that occupy a given bandwidth.
Although this satellite distribution system for digital soundprograms can be considered a broadcasting-satellite service for"community reception", the high cost of the DATS and SEDATreceiving equipment (about $9000 and $3000 respectively)precluded any widespread use for direct-to-home service("individual reception" in ITU parlance).
However, direct -to -home digital sound broadcasting wasrecently inaugurated as a 30-channel subscription service calledDigital Music Express (DMX) on transponder 19 of the C-banddomestic satellite Satcom F4 at 82° W.L. Reception of the DMXprogramming requires a special set-top converter.
3. DOMESTIC SATELLITE SOUND BROADCASTINGSYSTEM FOR IN- FLIGHT AIRLINE PASSENGERS
A satellite radio broadcasting service to airline passengersaboard commercial airliners while in flight could also be describedas a broadcasting-satellite service for community reception. Asingle receiving installation on the aircraft feeds a localdistribution system that provides a stereo audio connection toheadphones at each passenger seat. The receiving installation canuse a highly-directional steerable antenna mounted so as to have aline-of-sight path to the satellite. Apart from the need forautomatic tracking of the satellite, the antenna size and gain canbe essentially the same as those used for TV reception in homes.And, at cruising altitude, the propagation path will havesignificantly lower rain and atmospheric attenuation than the pathto a home receiver. As with satellite sound broadcasting to thehome, a number of existing domestic satellites can be used.However, to keep antenna size compatible with installation oncommercial aircraft, Ku-band satellites are clearly preferable to C-
band satellites.
Just such a digital satellite sound broadcasting system wasinaugurated in the summer of 1992 by the newspaper "USAToday", in partnership with Flite Communications Systems, Inc.Called "USA Today Sky Radio", the service began with one stereoaudio channel providing live news, sports and weather on a 24-hour-a-day basis. The advertiser-supported programming is
tailored to the interests of business travelers and will eventually beavailable on the domestic flights of nearly every major aircraft inthe fleets of Delta Air Lines and United Airlines, two of the threelargest US carriers. Sky Radio plans to introduce a second audiochannel in the fall of 1992. This will be a 24-hour all-sportschannel including sports news, interviews with players and liveplay-by-play coverage of sporting events.
The service originates in the Sky Radio broadcasting studio
at USA Today's headquarters in Arlington, Virginia. Two feederlink antennas operating in the FSS uplink band at 14.0-14.5 GHz
are used with the GSTAR 3 satellite at 93° W.L. to providedownlink coverage in a single beam of the coterminous United
508
States (CONUS) plus most of southeastern Canada at en eirp level
of about 54 dBW in the FSS Ku band (11.7-12.2 GHz). Thesatellite tracking receiving antenna is mounted in a low-profileradome on the top of the aircraft. The output of the associateddigital receiver/audio processor is then routed to passengersthrough the aircraft's existing entertainment center. The SkyRadio service requires no flight-crew operation or monitoring andis available as soon as the cabin audio system is turned on.
As the necessary technology becomes available, USAToday Sky Radio may offer live audio programming oninternational flights. It may also expand its service to include in-flight live TV using the existing satellite antenna with compresseddigital video receivers and seatback video displays.
4. DOMESTIC SATELLITE SOUND BROADCASTINGSYSTEMS FOR PORTABLE AND AUTOMOBILE RECEIVERS
As explained in the introductory section, satellite soundbroadcasting to portable and land mobile receivers poses a muchmore serious system design problem than does reception byproperly-sited highly directional antennas at homes or aboardcommercial airliners. The combination of small, nearly omni-directional antennas and the sometimes rapidly-varyingpropagation path to the receiver make it necessary to use one ofthe three new bands allocated to the BSS and the terrestrialbroadcasting service for digital audio broadcasting at WARC-92.
For a domestic system serving the United States, the onlyband available is the allocation at 2310-2360 MHz. To protect itsextensive flight test telemetry operations, the US excluded itselffrom the band 1452-1492 MHz where the BSS and the terrestrialbroadcasting service have primary allocations in Canada, Mexicoand all other Western Hemispheric countries except Colombia,Cuba, Ecuador and Panama. In these countries the allocation issecondary until the year 2007.
Consistent with the US position at WARC-92, the FederalCommunication Commission (FCC) proposed on 8 October 1992to allocate the band 2310-2360 MHz for what it calls "satellitedigital audio radio services (satellite-DARS)". To alleviate thefrequency sharing problem that satellite DARS would encounterwith the existing US Government and non-government terrestrialmobile and radiolocation systems that now occupy the band, theFCC made the following additional proposals. The existingsystems would be permitted to continue operation until 1 January1997, or until satellite DARS begins operations and affects, or isaffected by, those services. Affected existing terrestrial serviceswould be reaccommodated in the band 2360-2390 MHz which isalready allocated to these services.
The FCC's proposal for a national allocation to satellite-DARS is part of its response to a petition for rulemaking andlicense applications filed in 1990 by a company called Satellite CDRadio, Inc. (SCDR). As revised on 14 September 1992, the SCDRfiling includes a petition for an allocation similar to the one theFCC has now proposed but with associated allocations for feederlinks and, after five years, for complementary terrestrial gap fillers.The new SCDR filing also includes a revised application toconstruct, launch and operate two satellites in a mobile point-to-multipoint satellite service (MPSS) for the United States plus anunlimited number of terrestrial gap fillers after five years. SCDRfurther requests a conditional construction permit to begin first
year's construction of its MPSS satellites pending the FCC'sdevelopment of the rules and regulations for using the newallocation.
As proposed by SCDR, the system operates as a privatecarrier on a subscription basis (monthly fee about USD 5) in acompetitive environment including up to four digital soundbroadcasting systems serving CONUS. It provides 30 channels ofhigh-data rate (128 kb/s) digital signals (stereo CD-quality audioor a multiplex of lower data rate signals) to low-cost (USD '200-300) mobile, portable, and fixed receivers equipped with a small (4x 6.4 cm) nearly omnidirectional antenna (3dBi gain).
Each of the 30 program channels is digitally compressedusing a audio source coding algorithm such as MUSICAM, DolbyAC-2, or the US standard to be developed for digital audio radioby the US Electronic Industries Association. The 30 data streamsplus a 128 kb/s service channel are multiplexed into a 3.97 Mb/scomposite data stream which includes framing and datainterleaving. The composite data stream is then channel codedusing a rate one-quarter convolutional code, and the resultant15.88 Mb/s signal modulates the carrier using offset quadraturephase shift keying (OQPSK). The resultant rf signal occupies oneof four frequency-interleaved, cross-polarized, 8 MHz bandwidthchannels in the proposed feeder link band, 7035-7055 MHz.
The same rf signal is fed to two SCDR satellites eachproviding full-CONUS coverage from a 3.2 m shaped-beamantenna mounted on a spin-stabilized bus such as the HughesHS 376 series. The satellites provide simple frequency-translatingtransponders but are separated in geostationary orbit by 30° (e.g.,at orbital positions of 80° and 110° W.L.). They also use differentfrequency translations such that their 8 MHz bandwidth downlinktransmissions are separated by 20 MHz in frequency (e.g., withcenter frequencies at 2325 and 2345 MHz). Left-hand circularpolarization is proposed for both SCDR downlink rf channels.With 20 MHz of frequency separation and 30° of orbitalseparation, the resultant frequency and angular diversity is
expected to provide from 9 to 15 dB of mitigation againstmultipath fading at the SCDR receiver.
In order to be receivable on 3 dBi gain receivers, SCDRplans to use 1 kW transponders. With an edge-of-coveragesatellite transmitting antenna gain of 29.5 dBi, the correspondingsatellite eirp is 59.5 dBW. This leads to a maximum downlink pfd
at edge of coverage of about -139 dBW/m2/4kHz over the 8 MHzrf channel. This is believed to be sufficiently low to protectterrestrial services in neighboring countries.
With the uplink and downlink frequency bands divided intooverlapping, cross-polarized 8 MHz rf channels as envisioned bySCDR, three other digital satellite sound broadcasting systemoperators could implement 30-program-channel, two-satellitesystems similar to the SCDR system. For example, with SCDRdownlink channels using left-hand circular polarization at 2325and 2345 MHz, the other operators could use left-hand circularlypolarized channels at 2335 and 2355 MHz, and right-handcircularly polarized channel pairs at 2320/2340 MHz and2330/2350 MHz.
The receiver for automobile installation would employ asmall planar array (6.4 x 4 x 0.3 cm) mounted flat to the roof of thecar. This provides a gain of 3 dBi at worst orientation and, with a
509
noise temperature of 158 K, provides a G/T of about -19 dB/K at2320 MHz. It will be able to tune to the pair of copolarized 8MHz SCDR downlink channels and appropriately select orcombine them to realize the advantages of diversity reception.
As previously noted, SCDR expects that such receivers canbe supplied for USD 200-300. Portable receivers for indoor use,outdoor use, and marine applications will have similar technicalcapabilities. Based on its market research, SCDR expects the totalnumber of subscribers for its service to grow from about 130,000during the first year of service to as many as 14 million after sevenyears.
S. REGIONAL SATELLITE SOUND BROADCASTINGSYSTEMS FOR PORTABLE RECEIVERS
With its ability to provide a reliable broadcasting service ina single frequency band to receivers within wide geographic areas(ranging from several adjacent countries to entire continents),satellite sound broadcasting can offer many advantages over HEshortwave broadcasting for regional and international coverage.Indeed, it can also form an attractive alternative to terrestrial AMand FM broadcasting in areas where such facilities do not alreadyprovide good coverage. In addition to stable constant geographiccoverage and freedom from propagation anomalies, digitalsatellite broadcasting systems can offer data services and audiofidelity ranging from good AM quality, through FM quality, to truecompact disk quality. By sacrificing audio fidelity, the satellitepower and rf bandwidth for a given number of program channelscan be reduced significantly, enabling smaller and less expensivesatellites to be used.
When the broadcasting service area includes countries inthe developing world, low cost for the satellite receiver become adominant requirement. In contrast to the market in developedcountries, the primary, demand for receivers in developingcountries is likely to be for hand-held portable un;ts rather thanfor sets capable of reception in moving automobiles. The simplerchannel coding permitted by the more stable propagation path to aportable receiver used at a fixed (or only slowly moving) locationcombines with the lower channel bit ratio for AM or FM-qualityreception to simplify the receiver and reduce its cost.
For regional and global international broadcasting toservice areas outside Asia and India, the only available frequencyband is the WARC-92 allocation at 1452-1492 MHz. For serviceto many Asian countries, the band 2535-2655 MHz is alsoavailable as explained in the Section 1 above.
Taking into account all of the foregoing considerations, aUS company called Afrispace in 1990 proposed the "Afristar"system. This system would be able to provide service to all Africanand Middle Eastern countries except possibly for those who do notchoose to change their WARC-92 decision to keep the 1452-1492MHz allocation secondary until the year 2007. This coveragewould be provided from a single geostationary satellite withseparate beams for the Middle East plus the northeast part ofAfrica, the northwest part of Africa, and the south central part.
The initial Afristar satellite, a so-called "lightsat", plannedfor launch in 1994 would provide twelve monaural voice channelsin each beam using about 75 kHz of rf spectrum per channel for atotal spectrum occupancy of 2.7 MHz. Future system
augmentations would offer larger numbers of channels and rfchannel bandwidths up to 300 kHz. Afrispace envisions the use oflightweight inexpensive, solar-powered receivers fed by 5 dBi gain
"patch" antennas and selling for about USD 50. The FCC hasgranted Afrispace an experimental license to uplink its systemfrom the US.
More recently, an affiliate of Afrispace called Caribspacereceived an official license from the Government of Trinidad andTobago to cover the Caribbean Basin with a system techdicallysimilar to that proposed by Afrispace.
6. GLOBAL SATELLITE BROADCASTING SYSTEM FORPORTABLE RECEIVERS
The only truly global digital satellite broadcasting system isstill in the planning stages. The system concept has beendeveloped by the International Radio Satellite Corp. (Radiosat-International). Its system is intended to provide a completealternative to broadcasters who now use shortwave (HF) radiotransmitters in the conduct of international public diplomacy. Itwould employ three cross-linked geostationary satellites, each with50 steerable, switchable 1° spot beams, to provide service asneeded anywhere in the world. Beams would normally be directed
Biography
towards populated areas and in particular centered on major cities.Coverage of an area larger than that illuminated by a single 1°beam would, of course, be obtained by switching the sameprogram into two or more adjacent beams.
The rf power of each satellite would be sufficient to supporta combination of 200 monaural voice channels of better than AMradio quality, 20 FM-quality stereo music channels, and 300 kbpsof data in a total of about 20 MHz of spectrum, to be divided asdesired among some or all of the 50 beams. These channels wouldbe available to all countries of the world on an equitable basispermitting them to broadcast to one another on a reciprocal basisas with shortwave. Initial system planning was based on the validassumption that WARC-92 would provide an appropriateallocation near 1500 MHz, but Radiosat International continues toexplore system designs optimized for the WARC-92 allocationnear 2600 MHz.
Acknowledgment
The author gratefully acknowledges the support of HughesAircraft Co. in preparing this paper. However, any viewsexpressed herein are the author's and do not necessarily representthose of Hughes Aircraft
Edward E. Reinhart is a consultant to several corporate clients on the technical and regulatory aspects of satellite systems designed forsuch applications as broadcasting, mobile, and point-w-point telecommunications. He was Director of Spectrum Engineering for variousdivisions at COMSAT in Washington, DC, from 1977 to 1988; Manager of NASA broadcasting satellite studies at the Jet PropulsionLaboratory in Pasadena from 1974 to 1977; and a member of the technical staff in the Engineering Division of the RAND Corporationfrom 1954 to 1974. He has been active in CCIR Study Group s and ITU Radio Conferences since 1968 and participates in current USstudies on broadcasting-satellite issues.
510
SATELLITE CD RADIO SYSTEM TRADES
Klaus G. Johannsen, Hughes Aircraft CompanyRobert D. Briskman, Satellite CD Radio, Inc
1. ABSTRACT
The search for an economical solution for nationwide satellite digital audio broadcasting (DAB) of 30 digitized compact disk (CD)quality music channels to mobile users has led to a dual satellite, single carrier time division multiplex (TDM) transmission system. Thesatellite transponder consists of a parallel path distributed amplifier, which requires a minimum of satellite power and circuit complex-ity. The dual satellite path in connection with receiver diversity combining provides robust mobile communication.
2. INTRODUCTION
This paper discusses several methods of transmitting 30 digi-tized CD quality music channels to the contiguous United States(CONUS) via satellite for reception by mobile users. Various mul-tiple access and multiplexing methods are analyzed, including fre-quency division multiple access (FDMA), time division multipleaccess (TDMA), TDM, and code division multiple access(CDMA) taking into account link fades due to attenuation andmultipath. It is shown that, with frequency division multipleaccess (1-DMA) transmission and a bit rate of 256 kbps per CDmusic channel, the satellite dc-power requirements are enormous,whereas using a 128 kbps CD music channel in connection withTDM and path diversity combining, the dc-power requirementsare moderate and can be handled by a medium class satellite.
The system trades derived such optimum system features asdual satellite path and single carrier TDM transmission. Singlecarrier TDM does not suffer from multipaction problems, inter-modulation noise, or power loss due to amplifier backoff; it usessatellite dc-power most efficiently. The satellite payload, whichis extremely simple, is a single distributed transponder, with asmall X-band receive antenna and a single feed shaped beamS-band reflector that fits on a wide-body spinning satellite.
The modest payload EIRP and power requirements are inpart due to the diversity method proposed by Satellite CDRadio, Inc, which doubles the channel requirement but takesseveral decibels of fade margin from the link, resulting in anoverall system power reduction.
A considerable number of system tradeoff studies wereconducted to arrive at an optimum CD radio satellite configu-ration. These tradeoffs included modulation, multiple accessand configuration analysis, link and spectrum efficiencyanalysis, and fade and diversity path investigations.
As it is well known, the mobile link suffers from multipathand shadowing. Using diversity, the link fading can partly bemitigated with a dual satellite path, i.e., the mobile receiverreceives identical information from two satellites via twoseparate frequencies. Depending on the type of diversity com-bining, whether selection or signal combining, the overallfade margin can be increased. The amount by v, hich the fadecan be mitigated depends on the fading model, whether multi-path, shadowing, or both.
The appendix shows that, by use of path diversity, a con-siderable fade margin of the dual link can be achieved for onlya moderate fade margin of the individual link.
511
2.1 Original Concept
The original Satellite CD Radio, Inc Federal Com-munications Commission (FCC) filing considered 60 channelsatellites, where each CD radio channel was transmittedthrough a separate transponder. The satellite would receive15 independent or 60 dependent CD radio channels through aKa-band antenna/receiver and transmit those 15 (60) channelsinto four to six time zones, resulting in 60 channel RF powertransmission (Figure 1). Figure 2 shows the associatedtransponder diagram (configuration I). By time division mul-tiplexing five CD radio channels, the number of carriers couldbe reduced from 60 to 12 (configuration 2, Figure 3) with eachcarrier requiring five times as much bandwidth and transmit-ter power as those carriers in configuration I. Total transmit-ter power and bandwidth would remain the same.
2.2 Diversity System
Satellite CD Radio, Inc conceived a diversity system thatrequired that 120 channels be transmitted from each satellite.Each satellite would receive the full complement of 30 chan-nels and output 120 channels (Figure 4). On the ground, themobile receiver would select the stronger of two carriersreceived from two satellites or diversity combine the two car-riers to reduce the required link margin of 9 dB to 4 dB. A120 channel transponder system (configuration 3) would havethe same make up as configuration 1. Again, by time divisionmultiplexing five channels, the number of transponders can bereduced to 120/5 = 24 (configuration 4). It should be notedthat the reduction in single path link margin must be boughtby a more complex mobile receiver system. This receivermust be able to diversity-combine two satellite transmissionsinto a single data stream.
15 CHANNELS
60 OUTPUT
15 CHANNELS
60 OUTPUT
16 TO 3C
MOUNTAIN MIDWEST
30 CHANNELS/TIME ZONE
TIME ZONES
Figure 1. Original Satellite CD Radio Concept
30 CHANNELS
120 OUTPUT
Ka-BANDrIF
POWER CHANNELDIVIDER FILTER
POWER TIMEDIVIDER ZONE
FILTER
Ka-BANDANTENNA(SPOT BE/0.1)
OIPLEXER
WESTERN
MOUNTAINALASKAHAWAII
MIDWEST
HEASTERN
COMMANDRECEIVER
COMMANDS
30
61
91
UPCONVERTER HPA OMUX
Figure 2. Transponder Configuration 1, 60 Channels FDM
POWERDIVIDER
BFN
11.
&BANDANTENNA
SAT I
TELEMETRY COMMANDRECEIVER
Figure 3. Transponder Configuration 2, 60 Channels TDMIFDM
23 Reduced Channel Bit Rates
The CD channel transmission rate of 256 kbps can bereduced to 128 kbps by applying an improved redundancyremoval algorithm. Such algorithms for two dependent stereochannels (being developed by Scientific Atlanta Company,AT&T, Sony, and others) should be available in early 1993(Table 1). Using the same configurations as before means thatthe bandwidth and RF power can be reduced in half while the
T2
mr "Pr
1 TO 15 1670 30 15 70 30
1%kt
At 14 aMOUNTAIN MID EST
30 RADIO CHANNELS/TIME ZONE00 CARRIERS/TIME ZONE
TIME ZONES
Figure 4. Modified Concept
512
Table 1. CD Bit Rates of Scientific Atlanta SpectrumEfficient Audio Technology (SEDAT)
Bit Rates, kbps Requirement256 For 2 independent stereo channels192 For stereo dependent algorithm128 In development. will be marketed early 1993
L. '
number of CD channels per satellite is maintained. The result-ing configurations are called la, 2a, 3a, and 4a.
2.4 Comparison Among Multibeam Systems
The resulting eight multibeam configurations 1, 2, 3,4 and la, 2a,3a, and 4a are compared in Tables 2 and 3. The total dc powerrequirement (derived from Table 4) ranges from 7000 watts fornondiversity to 2200 watts for diversity and bit rate reduction.However, all these system implementations require a largeamount of transponders in addition to a large antenna (6 meters).
2.5 Comparison Between Multibeam and Single BeamSystems
Link power budgets for four spot beams and a singleCONUS beam (Figure 5) are shown in Table 4 for FDM mul-tiplexed channels. The table shows that the CONUS beamcarrier requires four times the power of the spot beam carriers,but the total RF power requirement is identical (Table 5). The6 meter spot beam antenna is twice the size of the CONUSbeam antenna (3 meters). Also, because there are 30 carriers
Table 2. SCDR Configurations 256 KBPS Per ChannelParameter 1 2 3 4
Frequency band Ka to S Ka to S Ka to S Ka to SNR of CDRchannels/satellite
60 60 120 120
Access method FDMA TDM/FDMA FDMA TDM/FDMARF channels/satellite 60 12 120 24NR of beams 416 46 46 46Antenna gain, dBi 34.0 34.0 34.0 34.0Beam width, deg 2 X 3 2 X 3 2 X 3 2 X 3Ratio/path combining No No Yes YesFade margin, dB 9.0 9.0 4.0 4.0Power per amplifier, W 64 320 20.0 10.0EIRP, dBW 50.0 57.0 45.0 52.0S-band total 3840 3840 2400 2400RF power, W
Estimated spacecraftpower EOL, W
6981 6981 363 4363
Frequencies satellite 1 F7, F2, F3,F4
F1, F2, F3.F4
F1, F2, F3,F4, F5, F6,F7, F8
F1, F2, F3,F4, F5, F6,F7, F8
Frequencies satellite 2 F5, F6, F7,F8
F5. F6, F7,F8
F1, F2, F3,F4, F5, F6,F7, F8
Ft. F2, F3.F4. F5, F6,F7, F8
Polarization RHCP RI-ICP RHCP RHCP
Table 3. SCDR Configurations 128 KBPS Per ChannelParameter la 2a 3a 4a
Frequency band Ka to S Ka to S Ka to S Ka to SNR of CDRchannels/satellite
60 60 120 120
Access method FDMA TDM/DMA FDMA TDM/FDMARF channels/satellite 60 12 120 24NR of beams 6 6 6 6Antenna gain, dBi 34.0 34.0 34.0 34.0Beam width, deg 2 X 3 2 X 3 2 X 3 2 X 3Ratio/path combining No No Yes YesFade margin, dB 9.0 9.0 4.0 4.0Power per amplifier, W 32 160 10 5.0EIRP, dBW 47.0 54.0 42.0 49.0S-band total REpower, W
1920 1920 1200 1200
Estimated spacecraftpower EOL, W
3490 3490 2181 2181
Frequencies satellite 1 Fl, F2. F3,F4
Ft, F2. F3,F4
Fl, F2, F3,F4, F5, F6,F7, F8
Fl , F2, F3,F4, F5. F6,F7, F8
Frequencies satellite 2 F5. F6, F7,F8
F5. F6, F7.FB
Ft. F2. F3,F4, F5, F6,F7, F8
Ft, F2, F3.F4, F5. F6,F7, F8
Polarization RHCP RHCP RHCP RHCP
BEST COPY AU/L1111 513
SAT 1
30 CHANNELS 30 CHANNELS
coHUSSEAM
SAT 2 E
30 CHANNELS PER ALL TIME ZONES
Figure 5. CONUS Beam
Table 4. Link Budgets for Spot Beams and CONUS, FDM
I
Without Diversity,kbits With Dive Sity, kbits
Downlink (2.3 GHz) 256 128 256 1284 spot beams
Power amplifier, W 64.0 32.0 20.0 10.0Transmitter power, dBW 18.0 15.0 13.0 10.0
-2.0 -2.0 -2.0 -2.0Output losses, dB
Transmit antenna gain atedge of coverage, dBi
34.0 34.0 34.0 34.0
EIRP, dBW 50.0 47.0 45.0 42.0Path loss, dB -192.0 -192.0 -192.0 -192.0Fading loss, dB -9.0 -9.0 -4.0 -4.0Earth antenna gain. dB 3.0 3.0 3.0 3.0Received Carrier. deW -148.0 -151.0 -148.0 -151.0K, dBW/Flzk -228.6 -228.6 -228.6 -228.6B, dBHz 54.0 51.0 54.0 51.0T, dBk 22.0 22.0 22.0 22.0kTB, dBW -152.6 -155.6 -152.6 -155.60\10,dB 4.6 4.6 4.6 4.6E44 0 required for 4.5 4.5 4.5 4.5103 BER, dBMargin, dB 0.1 0.1 0.1 0.1
CONUS beamPower amplifier, W 256.0 128.0 80.0 40.0Transmitter power, dBW 24.0 21.0 19.0 16.0Output losses. dB -2.0 -2.0 -2.0 -2.0Transmit antenna gain atedge of coverage. dBi
28.0 23.0 28.0 28.0
EIRP, dBW 50.0 47.0 45.0 42.0Path loss, dB -192.0 -192.0 -192.0 -192.0Fading loss, dB -9.0 -9.0 -4.0 -4.0Earth antenna gain, dB 3.0 3.0 3.0 3.0Received carrier, dBW -148 0 -151.0 -148.0 -151.0K, dBW/Hzk -228.6 -2286 -228.6 -228.6B, dBHz 54.0 51.0 54.0 51.0T, dBk 22.0 22.0 22.0 22.0kTB, dBW -152.6 -155.6 -152.6 -155.6E/I10, dB 4.6 4.6 4.6 4.6ENO required for 4.5 4.5 4.5 4.510'6 BER, dB
Margin, dB 0.1 0.1 0.1 0.1
to be multiplexed for FDM, there may be multipaction prob-lems. Multipaction happens when the signal peaks of inde-pendent signals add up in amplitude and cause voltage. i.e.,field strength breakdown. For the CONUS beam, the FDMmulticarrier CD radio satellite transponder (configuration 5)is shown in Figure 6, and the TDM-FDM CD radio satellitetransponder (configuration 6) is presented in Figure 7. TheCONUS beam antenna is of modest size (3 meters) and fits ona modestly sized satellite with spin stabilization.
Table 5. System Comparison Between CONUS andSpot Beams, FDM
Characteristic
CONUS Beam 4 Spot Beams
DiversityNo
Diversity DiversityNo
Diversity
CD radio satellite, 30channels, 256 kbps
Transmitter power, W 80.0 256.0 20.0 63.0Transmitter power, dBW 19.0 24.0 13.0 18.0Output losses, dB -2.0 -2.0 -2.0 -2.0Antenna gain, dBi 28.0 28.0 34.0 34.0Antenna size, m 3.0 3.0 6.0 6.0EIRP/channel, dBW 45.0 50.0 45.0 50.0NR of amplifiers 30 15 120 60
Total RF power, W 2400 3890 2400 3780Fade margin, dB 0 9 0 9Required dc power, dB 4363 6980 4363 6872
CD radio satellite,30 channels, 128 kbps
Transmitter power, W 40.0 128.0 10.0 32.0Transmitter power, dBW 16.0 21.0 10.0 15.0Output losses, dB -2.0 -2.0 -2.0 -2.0Antenna gain, dBi 28.0 28.0 34.0 34.0Antenna size, m 3.0 3.0 6.0 6.0EIRP/channel, dBW 42.0 47.0 42.0 47.0NR of amplifiers 33 15 120 60Total RF power, W 1200 1920 1200 1920Required dc power, dB 2181 3490 2181 3490
Ka-BANDANTENNA(SPOT BEAM)
Ka.BANDAFPOWERDIVIDER
2.6 Single Beam, Single Carrier System
To reduce system complexity of an FDM or TDM/FDM mul-ticarrier system, Hughes has investigated a single CONUS beamsingle TDM carrier diversity system using a single transponder.The link power budgets, with and without diversity, are shown inTable 6 and the power requirements are given in Table 7. TotalRF power requirements for a 128 kbps diversity system are1000 watts, which compare to 1200 watts for an equivalent FDMsystem (Tables 4 and 5). The satellite transmits a single carrier,upon which 30 CD radio channels are offset quadraplane shiftkey (QPSK) modulated, requiring a total bandwidth of 7.2 MHz.
2.7 TDM VERSUS CDMA
In CDMA, the data stream of a single carrier is pseudo-noise(PN) modulated onto a higher rate carrier, thereby acquiringsome multipath fading immunity. If 128 kbps are only spreadover a bandwidth of 8 MHz, little is gained relative to singlecarrier TDM. On the contrary, according to Table 8, the CDMA,on a signal power basis, falls short of required E/N0 by 4.7 dB,which would have to be made up by higher RF power or lowernumber of accessing carriers or a wider spread bandwidth.
POWER CHANNELDIVIDER FILTER PCONVERTER HPA OIAUX
TELEMETRY
t t t
COMMANDRECEIVER
COMMANDS
Figure 6. Transponder Configuration 5, CONUS Beam, 30 Channels, FDM
POWERDIVIDER
6 CHANNELFILTER CCU HPA OMUX
1)-SRANDANTENNA
Figure 7. Transponder Configuration 6, CONUS Beam, 30 Channels, TDMJFDM
514
Table 6. Link B fidget for TDM CONUS Beam
Downlink (2.3 GHz)
Without Diversity. kbps With Dive.sity, kbps256 128 256 128
Power amplifier, W 6,400 3,200 2,000 1,000Transmit power, dBW 38.5 35.0 33.0 30.0Output losses, dB -1.0 -1.0 -1.0 -1.0Transmit antenna gain. dBi 28.0 28.0 28.0 28.0EIRP, dBW 65.0 62.0 60.0 57.0Path loss, dB -192.0 -192.0 -192.0 -192.0Fading loss, dB -9.0 -9.0 -4.0 -4.0Earth antenna gain, dB 3.0 3.0 3.0 3.0Received carrier, dBW -133.0 -136.0 -133.0 -136."k, dBW/Kz K 228.6 228.6 -228.6 -228.6B, dB Hz 69.0 66.0 69.0 66.0T, dBk 22.0. 22.0 22.0 22.0kTB, dBW -137.6 -140.6 -137.6 -140.6E/110, dB 4.6 4.6 4.6 4.6ENO required for 4.5 4.5 4.5 4.510'5 BER, dBMargin. dB 0.1 0.1 0.1 0.1
Table 7. Power Requirements, for TDM CONUS Beam
Characteristic
256 kbps 128 kbps
DiversityNa
Diversity DiversityNo
DiversityTransmitter power, W 2,000 6,400 1,000 3.200Transmitter power, dBW 29 38 30 35Output losses, dB -1.0 -1.0 -1.0 -1.0Antenna gain, dB 28.0 28.0 28.0 28.0Antenna size, m 3.0 3.0 3.0 3.0EIRP. dBW 60.0 65.0 57.0 62.0Total RF power. W 2,000 6,400 1.000 3,200Required dc power, W 3,636 11,836 1.818 5,818
Table 8. TDM and COMA Downlink ComparisonCharacteristic TOM COMA
Power amplifier. dBW 30.0 30.0Output losses, dB -1.0 -1.0Backoff. dB 0.0 -2.0No. of carriers, dB 0.0 -14.8 (30)Transmit antenna gain, dBi 28.0 28.0EIRP/carrier 57.0 40.2Path loss, dB -192.0 -192.0Fading loss, dB -4.0 -4.0Earth antenna gain, dBi 3.0 3.0Received carrier power, dBW -136.0 -152.8k, dBW/Hz K -228.6 -228.6B, dB Hz 69.0 69.0T, dB k 22 22N, dBW -137.6 -137.6(C.T.f)d, dB 1.6 -152C- dBIM'
-4.8
CdBn1
-14.8
(UP-)totel. dB 1.6 -182WT, dB 3.0 18.0ENO, dB 4.6 -0.2EN0, required dB 4.5 4,5Margin, dB 0.1 -4.7
2.8 Dual Satellite Split Capacity Versus Dual SatelliteDiversity
Reverting to a two satellite system in which each satellite car-ries one half of the total capacity (15 channels), increases the fad-ing margin from 4 to 7 dB. This is a possible fallback in case thediversity system has trouble in the ground receiving instrumenta-tion. In the split capacity system, the single path link margin isdoubled and the bandwidth is halved, but in the diversity systemthe dual path margin is higher than the single path margin.
515
3. Preferred System
A simple satellite configuration emerged after the advan-tages and disadvantages of single versus multiple beam, sin-gle versus multiple carrier, FDMA. versus TDM versusCDMA, single path versus dual path were weighed. A singlecarrier TDM configuration was chosen because intermodula-tion noise and transmitter amplifier power backoff loss wasvirtually eliminated.
The preferred system consists of two satellites thatsimultaneously broadcast identical information. Each satellitetransmits a single digital high power carrier of 3.97 Mbps,which is offset QPSK modulated by 31 x 128 kbps CD radiomusic channels. It is assumed that the mobile radio receiver isable to receive two identical 3.97 Mbps carriers, one fromeach satellite, diversity combine those carriers, bit and framesynchronize itself to one or the other or both incoming datastreams, and provide forward error correction and TDMdemultiplexing and selection of one of 30 CD radio channels.
The CD radio feeder link stations transmit a singledigital carrier of 3.97 Mbps at 7.041 to 7.049 MHz to satellite1 and to satellite 2. At the satellite, the X-band carrier isreceived through a CONUS beam X-band antenna, fromwhere it is routed to an X-band receiver, which provides lownoise amplification and frequency translation. In satellite 1,the incoming carrier is translated to 2325.0 MHz. After signalamplification, the carrier is power divided into eight parallelpaths. Each partitioned signal passes through an input redun-dancy network, a commandable phase shifter, a power ampli-fier of 135 watts each, and an output redundancy network. Alleight paths at the output of the redundancy switches are com-bined in a three-layer hybrid matrix network to form a highpower carrier of 1000 watts. After power combining, the sig-nal is fed to the shaped beam antenna, from where it will betransmitted to all the CONUS, providing an EIRP of 57 dBW(Figure 8). The link power budget of Table 6 (last column)shows a single link margin of 4 dB, which is equivalent to adiversity link margin of over 9 dB for path diversity combin-ing (see Appendix). Because most users will get more than57 dBW EIRP, the diversity link margin for a typical userwould be over 12 dB for path diversity combining. TheCONUS beam S-band antenna patterns from two satellitepositions are shown in Figure 9.
3.1 Frequency Plans
A comparison of frequency plans for the multibeam andCONUS beam systems is presented in Figures 10 and 11. Itshows that the single CONUS beam system is more band-width efficient than the multibeam configurations. Figure 12shows the presently envisioned CD Radio Inc frequency plan,where the two satellite system occupies 2 x 10 MHz slots at2.325 and 2.345 GHz, which is about 25% of the total avail-able DAB frequency band, when using dual polarization.
4. REFERENCES
(1) Mobile Point to Multipoint Satellite Service,Compendium of Applications and Restatement ofPetition filed with Federal CommunicationsCommission by Satellite CD Radio, Inc:December1991, September 1992.
Figure 8. Preferred CD Radio Satellite Transponder, Single Carrier TDM
8 FEAR
41101%, 14
&Iriteltaligni441411
W4-Wk,ONINIMtomimioN".""lor
INI.....-
8 is tr
8
!
et; 8a; 71
8
8
.ao 0.00 .00AZIMUTH. Op
1 JO' K. 2325 G thr
2.00 0.00 1.00 Soo
illtall:
111441111111.111S,.16'
.00 -a.00 .co -1.00 0.00 t ooAZIMUTH dog
5) 110 W. 2 MS GHz
2.00 a oo
Figure 9. Antenna Directivity Contours for Two Orbit Locations
516
00 5.00
4 SPOT BEAMS
is CHANNELSINPUT
IN MHz
-H CI4...was I4
SAT 1
2310 MHz 2314.5 MHz 2319 MHz
SAT 2 MOUNTAIN I PACIFIC 1 EAST 1 CENTRAL
EAST 'CENTRAL MOUNTAIN I PACIFIC
2323.5 //Hz 2328 MHz
2311 MHz 2315.5 1/Hz 2329 1IHz 2324.5 MHz
OFFSET BY 1 1.91z
15 CHANNELS/
30 CHANNELS
33 CHANNELS
2329 MHz
CONUS BEAM
kz-- ID MHz -Al
15 CHANNELS
CONUS
2310 MHz 2315 11Hz
CONUS
2315 1.4Hz 2319 MHz
ks*--- 15 CHANNELSIN EACH REGION 9 MHz USED OVER CONUS 10 MHz USED
Figure 10. Frequency Plans (No Diversity)
4 SPOT BEAMS36 1044,1
4
EAST CENTRALMOUNTAIN
9 MHz2310 MHz 2319 MHz 2328 MHz 2337 MIN
PACIFIC
CONUS BEAM20 MHz
30 CHANNELS
I I
2310 MHz 2320 MHz2346 MHz
MOUNTAIN
30 CHANNELS
PACIFIC EAST CENTRAL
Figure 11. Frequency Plans (Diversity)
CENTER FREQUENCIES 2315.2325, 2335. 2345 AND 2355 MHz
CENTER FREQUENCIES 2320. 2333 2340 AND 2350 MHz
2310
NOTES
2320 2330 2340
FREQUENCY. MHz
1 SHADING SHOWS OCCUPIEDBANDWIDTHS (±4 MHz FROMCENTER FREQUENCIES)
2 ALLOCATION CENTERED AT2315 MHz MAY NOT BEASSIGNED
2350 2360
LHCP LEFT HAND CIRCULARPOLARIZATION
Effl RHCP RIGHT HAND CIRCULARPOLARIZATION
Figure 12. DAB Frequency Plan (2310 TO 2360 MHz))
"Modulation and Coding for the Aeronautical SatelliteChannel," Andreas Neul, Space Communications,November 1990.Communication Systems and Techniques, M. Schwartz,W. Bennett and, S. Stein, McGraw Hill, 1966.
APPENDIX
A. DIVERSITY PATH COMBINING
The effect of fading channels is to require substantiallyincreased transmitter power for reliable communication. Tocompensate for the deterioration due to fading, various formsof diversity communication are used to detect the same datastream picked up over two fading channels. The expectationhere is that one channel has a signal fading substantially belowthe median, and the other may have a signal considerablelarger in amplitude. Various types of diversity systems existlike space diversity, frequency diversity, and time diversity. Inaddition to the different methods, there are different ways of
517
I
2320 MHz t 2330 MHz
30 CHANNELS
combining the independently fluctuating signals. One mayselect the largest signals and simply add all output or add themafter weighting each according to the average signal-to-noiseratio (SNR) measured. This last technique is called maximalratio combining, which can be shown to be optimum in thesense that it provides the largest output SNR. The difference inlink availability between a diversity link and a standalonemobile link is significant, whereas the di'.ference between thevarious combining techniques is relatively small. One distin-guishes between Rayleigh fading, where all signal paths areequally likely, and the Ricean fading, where there is a strongdirect path. Note that the satellite system proposed operates inthe 2310 to 2360 MHz frequency band using both spatial andfrequency diversity on two individual transmission paths, eachhaving elevation angles of at least 20° from the horizon.
A.1 RICEAN FADING
The mobile link suffers from shadowing, multipath and acombination of both. In case of multipath, the probabilityp(y > that the signal level is larger than or equal to the nor-malized averaged signal envelope y is shown in Figure A-1 fora carrier to multipath ratio of 7.5 dB. For a 90% single linkavailability, there should be a link margin of 4.0 dB (see figure).
With path diversity, this link margin can be improved.Assuming pi is the link availability of path 1, P2 is the linkavailability of path 2, and the link outage of path 1 and 2 is(1 -pi) and (1-p2) respectively, the link availability after diver-sity combining with pi = P2 = 0.9 is
p = 1 -(1 pi)(1 - p2)
..
= Pt 4- P2 PiP2 = 0.99
By path combining the link availability has improvedfrom 0.9 for the single link to 0.99 for the diversity link. Thequestion as to how much is the additional fade margin that hasbeen gained can be answered by going back to Figure A-1,which shows that a 99.0% link availability would require a 9dB link margin. So, by path diversity, an additional (9-4) =5.0 dB link margin has been obtained.
The link fade mitigation can be improved by increas-ing the single link fade margin.
A.2 RAYLEIGH FADING
For Rayleigh fading and 99.0% single link availability therequired fade margin is 20 dB, and the required fade marginfor dual diversity is 10 dB (see Figure A-1). Thus, forRayleigh fading, the fade mitigation would be 10 dB, pro-vided that the system has 10 dB of fade margin available in asingle path.
A similar diversity improvement factor an be arrived at byerror rate calculations.
For FEC coded coherent PSK the error rate is approximately
P = elf CFe 2c
The error rate of a channel after it undergoes Rayleigh fad-ing is with E/N0 = y from reference (3)
P 1 1e, 2 1+)ccyi
The error rate of a dual diversity system is approximately
2Pee = 2Pel2 = 2 I- I
4+-1
The relative SNR ratio is
°72
(1 - 2Pe)2 ( I- (1- (-2 )2pe
71_ ( - - 02)ePe
2 (I (I 2P
2Y2
I
For an error rate of 10-5
71> 13.0 dB,
Y2
518
99.9
(y)" 0e
T
0.6
0.3
99.0
98.0
97 0
95.0
93.0
90.0
80.0
70.0
60.0
40.0
20.0
10.0
4.0
ci
01ao -10 0
Y 43 --D-
Figure A-1. Complementary Probability Distribution Functionof Normalized Received Signal Envelope in Rayleigh andRicean Fading
-20 io
i.e., the received SNR in a single branch system must be13 dB higher than the SNR in a dual branch diversity system,if both systems are subjected to Rayleigh fading. This result offade mitigation is similar to that obtained from Rayleigh fad-ing link outage considerations as outlined above. Theimprovement will not be as high for Ricean fading, probablycloser to 5 dB as was estimated before.
A.3 SHADOWING
In terms of shadowing, attenuation by buildings, or otherobstacles on one side of the vehicle, one can postulate that thesignal from one satellite may fade more than 4 dB, while thereceived signal level of the other satellite is maintained. If onesignal path was attenuated by 10 dB and the other signal pathwas not attenuated at all, fading has been mitigated by 10 dB.This argument leads one to believe that the two satellite sys-tem is more robust than the single satellite system and is there-fore preferable.
A.4 CROSSPOLARIZATION
Crosspolarization isolation, which in mobile communica-tion is usually of low value, will be increased by satellite pathdiversity. Therefore crosspolarization interference which isalready reduced by offset transponder frequencies will furtherbe mitigated by dual satellite path diversity.
United States Satellite Digital Audio Radio Service
Robert D. BriskmanSatellite CD Radio, IncWashington, D.C. USA
1. ABSTRACT
A description is presented of a digital audio radio (DAR) service to be provided by satellitesto automobiles and other mobile and transportable terminals throughout the United States.The service is by user subscription, and the subscribers can select from among thirty typesof music programming, each of Compact Disk (CD) audio quality. No commercials orother interruptions to the music occur. The system configuration, technical innovations andmajor engineering parameters are presented. Details of the satellites are given in acompanion paper.
2. INTRODUCTION
A satellite system has been designed whichprovides many channels of high fidelitymusic to vehicles in the continental UnitedStates. (1) Since the transmissions from thesatellites are digital and will be primarily CDquality music, the service is called DAR(Digital Audio Radio). Satellite DAR serviceis considered complementary with terrestrialradio broadcast. There are currently about5000 AM and 4700 FM terrestrial radiobroadcast stations in the United States. Thestations all broadcast analog signals ofmodest quality in the local geographicalareas in which they operate and generally aresupported by revenue from advertisers. Thesatellite DAR service provides digitaltransmissions of Compact Disk (CD) qualitythroughout the continental United States andis subscriber supported so there are nocommercial or other interruptions to themusic programming.
3. SYSTEM REQUIREMENTS
3.1 NUMBER OF CHANNELS
There are 30 CD quality stereo musicchannels and a service channel. The numberof channels is set by the requirement to haveenough programming diversity that at leastone of the channels will appeal to allsubscribers (i.e., often referred to as"narrowcasting" ). Figure 1 shows thecurrently proposed channel programming.
519
3.2 CHANNEL COMPRESSION
It is necessary to compress the stereo CDquality music before digital transmission asis currently done in most radio frequencycommunications systems. The compressionwill result in a stereo CD quality musicprogram being transmitted at a 128 kb/s rate.The algorithm which will be used performscomposite (or joint) processing of the stereopair in contrast to algorithms which performindependent processing. Compositeprocessing removes redundancy between theleft and right stereo channels. Such
compression has been demonstrated byAT&T, Sony, Scientific Atlanta and others.
3.3 VEHICLE RECEIVER
The vehicle receiver must meet thesubsequently discussed economicrequirements and must have an antennawhich is omnidirectional in azimuth and withcoverage of approximately 20°-60° elevationangle (for the continental United States andfor geosynchronous satellite locationsbetween 70°420° W. Longitude). Such anantenna will have a 3 dBi gain at theelevation angle limits and , with anappropriate preamplifier, a G/T of -19dB/ K. A receiver block diagram is shownin Figure 2, and a typical antenna is a planararray approximately 5 cm square by 0.5 cmthick recessed into an automobile roof withpaintover for invisibility. The receiverutilizes at least two radio channels fordiversity and possibly a third for receptionfrom complementary terrestrial facilities.
3.4 CAPACITY/SPECTRUM ANDORBITAL USAGE
The satellite DAR system is configured forfour operators serving the United States inthe 2310-2360 MHz band using bothsatellite space and frequency diversity (2).Each operator would utilize two satellites,and a proposed frequency plan is shown inFigure 3. Frequency re-use of the band isaccomplished by circular cross polarization(i.e., four satellites radiate right handcircular polarization and four left hand; 20dB or more intersystem cross polarizationisolation is anticipated). The total capacityof the frequency band is 120 stereo CDchannels for the four operators. Thiscapacity could be increased if required.Although all eight satellites couldtheoretically be co-located at onegeosynchronous orbital position, therequirement for space diversity from thesatellites would place airs of satellitesapproximately 30 apart in thegeosynchronous orbital arc at orbitallocations where the minimum elevation anglethroughout the coverage area is greater than20° (e.g., 80° and 110 W. Longitude).
3.5 SATELLITES
The significant system requirement for thesatellites is the relatively high EIRP which isnecessitated by the previously discussed lowvehicle G/T and the large number of highfidelity channels radiated per satellite. Aslater shown by the detailed systemimplementation and link budget marginrequirements, an EIRP of 57 dBW would betypical at edge of coverage for aspace/frequency diversity satellite DARsystem covering the continental UnitedStates. The details of the satellite aredescribed in a companion paper.
3.6 MODULATION
The 30 stereo CD music channels and a 128kb/s service channel are digitally multiplexedtogether (4 Mb/s), convolutionally encodedand transmitted by quadraphase shift keying.The occupied bandwidth is somewhat lessthan 8 MHz. Another requirement of thedigital multiplex is to perform time
520
interleaving which reduces the probability ofbit errors and multipath effects. A typicaltransmission link budget at 2335 MHz isprovided in Table 1. Since the dual satellitesprovide both space and frequency diversepaths at elevation angles above 20°,multipath fading will be extremely infrequentand blockage events will be significantlydecreased.
3.7 UPLINK FAC1L111ES
The program origination and up-linkfacilities required are modest, since acentralized facility is used. Withgeographical redundancy, the satellite DARservice requires two up-link facilities in theUnited States. These facilities use relativelylarge transmit antennas (i.e., 5-7 metersdiameter) to reduce transmitter power outputlevel and consequent cost. Radio frequencyclearance on a local basis of a 10 MHz wideradio frequency band above 7 GHz isrequired and easily accomplished.
3.8 OPERATIONS
A satellite DAB subscriber servicenecessitates several requirements. It isnecessary for potential users to subscribe tothe service including the acquisition,installation and activation of the vehiclereceiver as well as payment for the receiverand for subsequent service. The onlysignificant technical requirement is that eachvehicle receiver be individually addressablethrough the service channel by the controlcenter at the up-link facility. Thisaddressability must include the capability toturn the receiver on and off and to sendmessages for display such as the title andperformer of the music being heard.Security of this service channel is alsorequired to prevent the acquisition of unpaidservice.
3.9 COMPLEMENTARYTERRESTRIAL FACIL1IIES
Blockage of both satellite paths occurs intunnels, in a few very densely populatedurban locations and in certain otherinfrequent circumstances. Depending on therequirement for service continuity, suchblockage outages can be almost eliminatedby use of sufficient numbers of satelliteterrestrial repeaters. In one mechanization,such terrestrial repeaters would receive thesatellite S-band signal, translate it to anunused S-band channel and radiate it at lowtransmitter power with a directive antennainto the local geographical area whereblockage has prevented service. It isunknown presently if such repeater facilitieswill ever be required and, if so, when in thesystem development. The vehicle receivercould employ a third channel for receivingsignals from complementary terrestrialfacilities, although it is believed possible tomechanize one of the diversity channels inthe receiver for this additional function.
3.10 INTERNATIONALINTERFERENCE
The significant requirement is to ensure thatno unacceptable interference occurs from thesatellite transmissions into 2310-2360 MHzreceivers in Canada, Mexico and thenorthern Caribbean. The satellite antennapattern has a roll-off in gain such that othercountries are not affected. However, thesatellite antenna's edge of coverage for theUnited States corresponds to the southernborder of Canada and the northern border ofMexico. This results in a -139 dBW/4kHz/m2 flux density at these borders. Table2 shows the flux density calculation.Detailed coordination is necessary with bothcountries. It is noted that none of theapproximately 172 receivers currently usedby Canada in the 2310-2360 MHz frequencyband with high gain antennas (i.e., greaterthan 30 dBi) have their main beam pointingat the geosynchronous orbital arc of interest(i.e., 70-120° W. Longitude).
521
4. IMPLEMENTATION
The DAR satellite system is shown in Figure4. The Figure also roughly illustrates howthe use of the two satellites reduces blockagein the overall system configuration. It isnoted that the automobile receiver blockdiagram shown previously in Figure 2 iscapable of normal analog AM and FMreception and digital audio reception fromterrestrial broadcast stations as well as thesubject DAR service from satellite. Lessthan one quarter of the receiver electronics isinvolved with the satellite signal. Figure 5 isa block diagram of the uplink facilitiesincluding the programming center and thesatellite TT&C (Tracking, Telemetry andControl) center.
5. ECONOMIC REQUIREMENTS
Satellite DAB systems operating on asubscription basis must be affordablypriced. There are two major requirements,the previously mentioned low cost vehiclereceiver and the monthly service price.Vehicle receiver prototypes have been builtfor DAR terrestrial reception at microwavefrequencies with price estimates in quantityof $150-200 US (3). Similar DAR serviceis currently provided to homes through cabletelevision systems. Such subscriberscurrently pay between $5-10 US per month.The major capital requirement forimplementation of a satellite DAR system isthe satellites and launch vehicles. Estimateshave been made that two satellites andlaunch vehicles would cost approximately$200-300 Million US.
6. SUMMARY
A domestic satellite system providing UnitedStates DAR service operating in the 2310-2360 MHz frequency band has beenpresented. Implementation of this systemwill soon be started and will provide by1996 new radio services to mobile userssuch as freedom from commercials, betterfidelity music, much larger selection ofprogramming and nationwide coverage.
(1) Satellite CD Radio, Inc; FCCApplication For Authority To Construct,Launch And Operate A Digital Audio RadioService Satellite System; File No. 44/45-DSS-AMEND-92; Washington, DC; FiledSeptember 14, 1992.
(2) U.S. Patent Application No.07/886,910 (Pending); "Radio FrequencyBroadcasting Systems and Methods UsingTwo Low-Cost Geosynchronous Satellites";Robert D. Briskman; Filed April 1992
(3 ) "Manufacturing DAB AutomobileReceivers"; John I. McComas, Mark A.Kady, Brian J. Warren; Delco ElectronicsCorp; First International Symposium OnDigital Audio Broadcasting Proceedings;Montreaux; June 1992; pp 235-244.
SATELLITE-TO-AUTOIAOBILE LINK BUDGET
Satellite EIRP (1)Path Loss (2)Vehicle Antenna Gain (3)
Received Power at Vehicle
Receiver Noise Power (4)
Resultant E/NoRequired E/No (5)
Power MarginDiversity Gain (6)
Effective Multipath Margin
57 dBW-192 dB
__a dBi
-132 dBW
-141 dBW
9 dBa dB
4 dB12 dB
16 dB
(1) At edge of coverage area(2) Geosynchronous orbit/2335 MHz(3) Worst orientation; includes polarization loss(4) Effective G/T . -19 dB/ K; includes uplink contribution and losses; BN=3.9 MHz(5) B.E.R. of 10-5(6) Satellite spatial and frequency diversity provides 9-15 dB multipath mitigation
TABLE 1
0 L.
522
POWER FLUX DENSITY AT CANADIAN - U.S. BORDER
Satellite EIRPSpreading Factor
Bandwidth Factor(8 MHz to 4 KHz)
POWER FLUX DENSITY
+ 57 dBW-163 dB/m2-106 dBW/m2
- 33 dB
-139 dBW/m2/4kHz
(Note that above numbers are rounded to the nearest whole decibel)
TABLE 2
CHANNEL LISTING1. Sympleenele
Music front one masters Bach Mozart MandelThe wand s greatest Classical COrnO0Sersbroedcast in brilliant CD hdeltty
2. Ciasnolosir MuskElegant mune performed by small ensembles ofSelo Instruments avert as ore Cello violin and
WOOCIvond
GeneraExpenance Carmen Madame Bunerfly and FaustThadrsMa and SOMA [le is ail yours
4. T444K's CeeketeryThe sea. damn borne Sounds or lodes s countrystars. uke Garth Brous. Wynonn a Judd. Flay RayCyrus and Alan Jackson
Traditional CatenaryAn of your hannte Country western regents arehere. Slery'ke George &ran Lorena Lenn yankWalisms..1 and Patsy Clan
4. Coodorpotary JazzThe syedopated hythens of today 51.72 musiciansThe cool sounds of Kenny G Wyntcry ?A a rsa hs Ai
Jane. and thane Schuur
7. Classic IsmsThe mood Is .11gic when the music is nip revue]listen as musicians Ilse Duke Ellington Our.Goa sone and Miles Dams Mermen: and Createma: sound we snow as tau
a. IluesLone,'" Soulful We ye all been there lament tothe sounds of Anson Funderourgn and The%C.C.S 9 B King and John tee Moose,
9. alt amsd/SwingArms of war And peace Bernd rnue r One soundsof Tommy Dorsey Glenn Miner art Artie ShawNow you're "In the Mood.
10. Top al the ChartsToday s not Ma troth recording arum such as Ph.CotIno. Mic heel 80110n and Pa u.a YbOui are hereDay or night And awatI WIllOaliinremictionarepeats
11. Classic RackThe giant hal Iron the 60 s through Me SD s an
envre denetnon or mu= LeGZePpehn S.monand Geer." The Rothng Stones
12. SO's OldiesIt was a Maier time We went 10 sock ha, WeWent steady And Flre was king Tune in andexpenence the energy of America s nalCydn
Vern
13. 40'. OldiosPut the tap dOWn and mese to Me sounds at theTIcIes The Beech Boys The Beatles sod TheSucremes
14. Talk MockThdughtfut nsoued mead., from automats netPeter Paul and Mary Joni Mitchell and James
Taylor
IS. Laths BalladsThe endured ((MIMIC (CINIQS cr GrIt. VOCI,steJulio Iglesias hhno Brno and Roberto Carlos
16. Laths Rhythm'sMove to the den or a ay. 01, arc cne tea wishstars Sven at Tao Puente Se% o Me Yee S and
Sala Del SOW
17. Rasps*When you cant get10 we lalanda mar here isthe net tanning Bop M aney Mat. cr es,U840
IS. 141p -Nee L It4Music mat -iayour.fece Ye ire messages ofthe oowntrodden yawner Seen "Vs, Burl itMen grits KrOjg
PIP. DormsMusic met seeps or tenpin on Cece Pens :,Janet Ja c ason and CC Music Factory Goremay&
20. Songs of LovaRemember the song the two ot wok t..st canned10n Here S the music tha: yelped mate 70, 24 SeQuieten and Men beat taster
21. SIntors StrlosigsPyre magic Legends lice Sinatra SYe,sano andNat King Cote The rutin Saunas or PVC,. Fat.More KOSteianet. and Mantis, an.
22. Hoary Metal0 rreIng, exPlOtrve. hard Chard., roc 58,r7 robThe sound of bands Ike Gsris N Roses Fr. esa 'ice
and Om Osbourne
23. Allmon RookThe des: cuts from tooa e s tog rose tig,SMarian Carey George Mimic and Macon,
24. Altornativo RoshTurin right here 'Or the sounds or 10,,Orrcw Smusic sensations Not yet discovered mere seArc Angels. "(coma stet P E 8 and K Soto
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524
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525
SMALL SATELLITES FOR MOBILE AND ENVIRONMENTAL DATA COMMUNICATIONS:
EFFECTIVELY SOLVING ECONOMIC, SOCIAL AND TECHNOLOGICAL ISSUES
Fulvio Ananasso
TELESPAZIO - Via Tiburtina 965 - 00156 Roma (Italy)
ABSTRACT
"Small" satellites are nowadays frequently envisaged in alternative to traditional, large" satellites, oftenexploiting orbital characteristics different from the Geostationary Earth Orbit (GEO), e.g. circularorbits closer to the earth or elliptic orbits. Mobile (Personal) Communications (including VehicleRadio location, RDSS) and Environmental Data Communications/Remote Sensing are the mostattractive areas of applications, reasonably regulated in terms of frequency spectrum allocation by the1992 World Administrative Radio Conference (WARC-92).In this context, TELESPAZIO is developing a commercial "micro"satellite system (TEMISAT)providing Data Collection and Distribution from/to autonomous networks. This kind of application iswell suited for both developed and developing countries to provide low data rate. non real-timeservices across geographical areas where a multitude of remote terminals with limited throughput iswidespread on. From one hand it would be quite costly to implement a terrestrial telecommunicationinfrastructure to link those terminals, from the other hand, utilizing the microsatellite technology, aspace-based data collection and distribution network results much more cost-effective than withtraditional (large) satellites.
1. INTRODUCTION
In the last few years, the commercial satellites commu-nity has strongly re-considered the problem of spacecraftsize/power consumption, developing a number of attractivesystem concepts taking advantage of small satellites technol-ogy. Within the class of small satellites it is customary todefine "micro"satellites those birds having a mass up to50-100 kg (100-200 pounds roughly), whilst "mini"satellitesrange from this limit to several hundred kilograms(1000-1500 pounds). It is just marginally worth mentioningthat these limits are ir erely indicative, mainly aiming atidentifying which class vf spacecraft in broad sense we aretalking of.
The idea behind the trend reversal going towards areduction of satellite mass lies in that, under certaincircumstances, the overall investment cost to implementseveral, single-mission. "small" spacecrafts instead of one"large" multi-mission satellite may result substantially lower,at the same time reducing the risk for launch failures, onlyaffecting a portion of the mission rather than the entiremission. There are scenarios where the satellite limitation insize is the key feature to reduce the investment costs, whilethe continuity of service against the growth of trafficdemand is assured by multiple, subsequent launches ofspacecrafts in co-located (GEO) orbits as long as theprevious birds are saturated in traffic [1]. Up to 4 satellitescan be reasonably co-located in the same 0.10 box (GEOorbital slot), so that, assuming a linear vacancy curve(transponders filled-in uniformly versus time), subsequentlaunches of spacecrafts to allow for the previous one(s)being saturated permits to defer the investment costs,although the cost of one single (much larger) satellitehandling four times as much traffic is in general lower thanthe sum of smaller birds plus launches.
526
In addition, several applications/services - MobileSatellite Systems (MSS), mailbox/electronic mail,store-and-forward data transfer, tactical communications,coarse resolution remote sensing, earth observation for socialsecurity, ... - mig,:it be exchanged via the aggregation ofseveral Low Earth Orbit(LEO) /Highly Inclined Orbit(H10)/Highly Elliptic Orbit (HEO) spacecrafts, whosemass/cost can be kept reasonably small. The technologysuphistication/lifetime can be kept reasonably fair to limitthe expenditure, since the low-cost availability of spares toreplace in-orbit failures can balance the sub-optimumhardware reliability. Lastly, multiple launches might bearranged with substantial cost saving due to economy ofscale.
As a general remark, LEO small satellites inherentlyresult well suited for specific missions where limited datarates are requested to be handled by each spacecraft. It onlyflies across the service area for some tens of minutes a fewtimes a day, depending upon the orbital parameters -differently from the geostationary orbit (GEO), where thesatellite at 36,000 km over the equator is fixed with respectto the earth, the period of revolution round the earth of alow orbiting (LEO) spacecraft is much less than a day -.Thus, a real-time service is not allowed unless a completeconstellation of LEO's is operational.
On the other hand, very often - e.g. for most ofpreviously mentioned services - a real-time, continuous linkavailability is not mandatory; this was the rationale forstarting our Telespazio activities on small satellites with anenvironmental data collection and distribution system, wherethe need for monitoring remotely located environmentalparameters (earth-based sensors) is not continuous but rathersatisfactorily met by exchanging data once or twice a dayfor a short while. It is only marginally worth noting that thesame architecture can be used to collect and distribute data
different from environmental parameters but with the sameabsence of real-time requirements (e.g. short messages fromextremely cheap mobile terminals, that can constitute theonly viable. low-cost telecommunication infrastructure forremotely located areas like rural territories). In this way agood answer can be given to economic and social issuesrequiring to provide services even when they may not beremunerative with "standard" telecommunication infrastruc-tures, but needed by social implications.
The paper addresses now the potential services able to beprovided by the small satellites technology (Section 2) andrelated orbits/ frequency bands (Section 3), then gives a briefdescription of the Telespazio TEMISAT micro-satelliteprogramme (Sections 4 and 5).
2. SERVICES/APPLICATIONS
Several attractive services can be envisaged utilizing thesmall satellite technology, such as:
Personal Communication Services (PCS) in general sense;
Digital Audio Broadcasting (DAB);
Environmental Data Collection and Distribution;
Remote Sensing;
Military Applications in general.
Concerning PCSs, several applications come to mindnaturally such as paging, mailbox/electronic mail, hand-heldor portable terminals for mobile communications,... Theseservices can be extremely well provided in principle bysmall satellite systems; in addition to that, applications notrigorously classifiable under the PCS category but neverthe-less quite related are store-and-forward data transfer,remote/rural areas communications, Embassies communica-tions, educational programs transmissions (e.g. UNESCO,
UNICEF,...). Furthermore, Radio Determination/AutomaticPosition Reporting (RDSS/APR) is easily available, althoughat a coarse level, exploiting some specific features (e.g.Doppler measurements with LEO spacecrafts, providingabout half-a-mile resolution).
It is worthwhile mentioning that, from a commercialstandpoint, Personal Mobile Satellite Services are extremelyattractive since they cover a substantial sector of the(cellular) market. This market is growing up at an enormousrate. At least 10 million people in the world would likelyneed personal communications by 1996, a reasonable portionof which could migrate to MSSs provided they are timelyintroduced, full coverage (not easy with terrestrial systems)and, possibly, utilizing hand-held or very compact sizeterminals. Recent projections indicate 2-to-4 million MSSsubscribers in the world by the year 2000, and over 10million by 2008. It is evidently a multi-billion US$-per-yearbusiness, mostly addressed by the "big" LEO systemsoperating at L/S band (Motorola's IRIDIUM, Loral GLOB-ALSTAR, TRW's ODYSSEY, Constellation CommunicationInc.(CCI) ARIES and Ellipsat's ELLIPSO), but also by below1 GHz systems (ORBCOMM, STARSYS, the RussianGONETS, LEOSAT). It has also to be mentioned theINMARSAT Project 21 system, still in the design phase, andVITA (Volunteers In Technical Assistance), proposing anon-profit international store-and-forward communicationssystem for developing countries consisting of 2 LEOsatellites operating at VHF bands.
3. ORBITS/FREQUENCIES
Table 1 sketches the orbital characteristics of the systemsmentioned earlier. It can be seen that now IRIDIUMenvisages 6 orbital planes - instead of 7 as originallyplanned (will the name "Iridium" be changed into "Dyspro-sium"?...) - with 11 spacecrafts per plane, which sums up to
SYSTEM ORBITALTITUDE
INCLINATION PERIOD ORBITALPLANES
SATELLITESPER PLANE
TOTAL # OFSATELLITES
GONETS Circular 830 113.56' 6 6 361390 km
LEOSAT Circular 400 104.47' 3 6 18970 km
ORBCOMM Circular 500 104.47' 3 6 18970 km 900 2 1 2
STARSYS Circular 600 111.59' 4 6 241300 km
ARIES Circular 900 105.5' 4 12 481018 km
ELLIPSO I Elliptic 63.50 105.25' 2 3 6576/1439 km
ELLIPSO 2 Elliptic 63.40 119.57' 2 9 18426/2900 km
GLOBALSTAR Circular 470 113.53' 8 3 241389 km 520 8 6 48
IRIDIUM Circular 900 100.13' 6 I I 66765 km
ODYSSEY Circular 550 359.53' 3 4 1210373 km
TABLE 1. ORBITAL PARAMETERS FOR SOME PROPOSED SYSTEMS
527
66 satellites instead 77. It is worth mentioning that, as ofAugust 1992, ORBCOMM, STARSYS and VITA ("little"LEOs below I GHz) have obtained from the US FederalCommunications Commission (FCC) experimental licences;Leosat Corporation, who submitted in September 1990 anapplication to provide intelligent mobile services, has beennegotiating with FCC to remove some bureaucratic obstacles.Concerning the "big" LEOs above 1 GHz, all of them havebeen granted experimental licenses.
The problem of radio frequency management fornon-GEO satellite applications has been addressed recentlyby the February 1992 World Administrative Radio Confer-ence (WARC-92) in Malaga, Spain. One of the most relevantdecisions taken at that Conference was to allocate the1610-1626.5 MHz (L band) and 2483.5-2500 MHz (S bands)slots to LEO satellite services on a worldwide. primary basis,thus enabling "big" LEOs to have a reasonable amount ofspectrum (i.e. capacity) to (potentially) serve a substantialnumber of subscribers and reach/exceed the break-evenpoint to remunerate the service provision. Table 2 depictsthe situation for those systems, including some indication oncost.
However, the presently available amount of spectrum atL-band is hardly sufficient to permit several systems tooperate cost-effectively. This brought Motorola to ask FCCfor additional 10.5 MHz slot to be "selectively" utilised bythe different systems as a function of the multiple accessmethod. So doing, one part of the overall spectrum would beused by FDMA/TDMA systems (Iridium only in practice),whereas the remaining part would be used by CDMAsystems (the others). This has been strongly opposed by "theothers", and the situation, although in principle technicallysolved by WARC-92 with the allocation of a reasonableamount of spectrum, is still fluid in practice due to theeconomical unattractiveness of several systems being placedsimultaneously in the same (narrow) frequency window.
4. TEMISAT PROGRAMME
The TEMISAT (TElespazio MIcroSATellite) Programmeforesees the implementation of a Data Collection andDistribution Service for geophysical environmental monitor-ing based on an autonomously managed network. Thisnetwork will adopt innovative communications technologiesto provide environmental protection services.
Such a collection of environmental data requires thedeployment a multitude of sensors over wide areas usuallydifficult to reach or lacking in communications infrastruc-tures. A satellite system for environmental monitoringservices can offer a unique opportunity for an efficientsolution. In particular, taking advantage of the existingtechnology it is possible to provide the required communica-tions capability through a microsatellite-based system.
In the early stage of operations the service will beprovided, at least on a daily basis, to private and publicusers located in the Italian territory and the surroundingEuropean and Mediterranean Regions. It is our intention toextend gradually the service to other geographical regions,such as South America and Pacific Rim.
As already pointed out, the same architecture can he usedto collect and distribute data different from environmentalparameters (e.g. short messages from extremely cheap mobileterminals, that can constitute the only viable, low-costtelecommunication infrastructure for remotely located areaslike rural territories). We are studying at present thepossibility of implementing and launching other microsatel-lites to increase the system capacity and to provide aquasi-real-time capability by exploiting constellation fea-tures. Our production line is such as to assure the design,implementation and launch of a new product/service in lessthan 2 years, typically 18 -to -22 months. To this end, we arealso interested in partnership to share the investments/pro-vide the services in the various regions of the world.
The main applications of the present TEMISAT systemenvisage monitoring of:
Basin LevelSnow LevelVehicular TrafficStructures (buildings, dams,...)
in addition to:
Geological MonitoringOceanographic MonitoringSeismic MonitoringClimatological Monitoring.
The environmental data are acquired and collectedthrough earth-based sensor subsystems, then temporarilystored on ground and logged by autonomous terminals untilthe uploading request (Dolling) from the TEMISAT space-craft. Once the data are received on board, they aretransmitted from TEMISAT to User Collection Centres.
SYSTEM FREQUENCY SERVICE COST
(U.S.$)User Link Feeder Link Voice (kbps) Data (kbps)GONETS VHF/UHF YES (in 1997) 4.8 (in 1995)
.300 M
LEOSAT VHF UHF NO 4.8 21 MORBCOMM VHF VHF NO 4.8 320 MSTARSYS VHF VHF NO 4.8 up
9.6 down200 M
ARIES L/S band C band YES (4.8) 2.4 292 MELLIPSO L/S band L/S band YES (4.8) NO (RDSS) 214 MGLOBALSTAR L band uplink
S band downC band YES
(2.4/4.8/9.6)9.6 657 M (24 sats)
1,200 M (48 sats)IRIDIUM L band Ka band YES (2.4/4.8) 2.4 3,370 MODYSSEY L,'S band Ka band YES (4.8) 9 6 1,300 M
TABLE 2. SOME COMMUNICATION PARAMETERS AND COST
528'
5. TEMISAT PARAMETERS
The TEMISAT system is composed by three mainsegments:
(i) a Space Segment, consisting of two micro-satellites(35x35x35 cm size, about 30 kg weight each), implementinga low cost satellite system based on TDMA/SCPC accessscheme. The expected operational life of each satellite is 5years.
The major characteristics of the satellites are:
RX capacity: up to 9 VHF (148-!50.05 MHz) channelsplus 1 UHF (401-403 MHz) channel;
TX capacity: 3 + 3 (cold redundant) VHF (137-138 MHz)SSPA transmitters (1-5 W);
3 transmitter antennas plus 2 receiver antennas;
Data rate: 2.4 kbps (user link)/9.6 kbps (data collectioncentre down link);
On-board data demodulation, storage and handling;
Redundant data handling CPU (transputer-based);
Redundant 10 Mbyte mass memory (about 6000 pages ofA4 format capacity) with error correction;
Real-time and store-and-forward capacity;
Direct or on-request access;
High reliability/Full functional redundancy.
A semi-passive Attitude Control System is present (magneticstabilization to the local magnetic field of the earth),whereas the power generation is assured by 6' panelsmounted on the external spacecraft surface. A fully passivespacecraft temperature control is obtained by appropriatecoating of the satellite surface areas.
(ii) a Ground Support Segment, consisting of a MissionControl Centre. This Centre processes, manages and storesthe mission data, and prepares the User Routing Matrix thatcontains the polling sequence, the synchronization and theaddressee identification codes.
The Mission Control Centre is responsible for :
Mission PlanningPolling Optimization
(11i) an User Segment, consisting of two different typesof terminals:
User terminal, andData Collection Centre terminal.
The User terminals are connected with the block of sensors,which are set for acquiring the measurements and forstoring them temporarily. As soon as the satellite polls theuser terminal, the commands exchange between the userterminal interface and sensor terminal adopting the standardRS-232 will make available the data for packetization andtransmission, provided by the user terminal equipment.More than 1000 user terminals are planned to be used in thefinal network configuration, each one able to serve severalsensors.
529
Of course the standard interface available as I/O of the userterminal can allow to connect the terminal to any type ofequipment ready to select, prepare, acquire the data oralphanumeric messages to be transmitted.
The main characteristics of the User Terminal are:
Standard InterfacesLow Power ConsumptionEasy Installation
The Data Collection Centre is enabled to receive thedown-link data flow from TEMISAT corresponding to theinformation collected from the user terminals belonging toits Closed User Group (CUG). It is also envisaged thetransmission from each Centre of command packets to thesatellite: these commands are delivered to the addressed userterminals inside the polling packets.
The main characteristics of the Data Collection Centre are:
High FlexibilityClosed User Group (CUG) ControlLow Cost and Low Complexity
The first TEMISAT unit is planned to be launched fromPlesetsk as co-passenger of METEOR 2 Satellite (nominalLEO altitude 950 km, inclination 82.5 °, orbital periodapproximately 110 minutes) by the Russian LauncherTSYCLON in June 1993. The second unit is beingmanufactured together with the first one; it will be storedon ground for about three years and then will be launchedto assure the service continuity and to increase the in-orbitcapacity.
The manufacture and overall mission implementation isestimated to cost less than 10 M U.S.$ and, on the basis ofthe investment plans, the system offers innovative commer-cial prospects.
6. CONCLUSIONS
The paper has considered the potential applications of"small" satellites in commercial environments, also addressingissues related to orbits, frequency spectrum allocation andcost.A specific "micro"satellite programme has also beenillustrated, the Telespazio TEMISAT Environmental DataCollection & Distribution system, to be launched in 1993.This kind of architecture is well suited for both developedand developing countries to provide /ow-cost services acrosssparsely populated regions where a multitude of remoteterminals with limited throughput is widespread on.
ACKNOWLEDGEMENT
The author whishes to thank his collegues B.Pavesi andG.Rondinelli for fruitful discussions and provision of usefuldata.
REFERENCES
[1] J.R.Stuart, A.Schwegler, J.Gleave: "Trends in SatelliteSize, Economic Imperatives for Smaller Geosyn-chronous Communication Satellites", Global SatelliteCommunications Symposium, Nanjing (China), May1991
[2] G.Maral, J.J.De Ridder, B.G.Evans, M.Richharia:"Low Earth Orbit Satellite Systems for Communica-tions", International Journal of Satellite Communica-tions, Vol.9, No.4, July-August 1991
J.E.Hatlelid, D.E.Sterling: "A Survey of Small Space-crafts in Commercial Constellations", 5th AIAA/USUConference on Small Satellites, University of Utah,Utah (USA), August 1991
[4] Mobile Satellite News, Phillips Publishing Inc.: [3.1] 22August 1991; [3.2] Vol.4, No.4 (April 1992); [3.3]Vol.4, No.5 (May 1992); [3.4] Vol.4, No.8 (July 13,1992); [3.5] Vol.4, No.10 (August 10, 1992)
L.A.Keyes: "An Evolutionary Role for Small Comsats",42nd IAF Conference, Montreal (Canada), October1991
[3]
[5]
[6] A.M.Duff, C.L.Boeke: "Who's Who in Mobile SatelliteCommunications", Via Satellite, October 1991
F.Ananasso, G.Rondinelli, P.Pahnucci, B.Pavesi:"Small Satellite Applications: A New Perspective inSatellite Communications", 14th AIAA InternationalCommunication Satellite Systems Conference, Wash-ington DC (USA), March 1992
[8] F.Ananasso: "New System Concepts Utilizing SmallSatellites", 9th International Conference on DigitalSatellite Communications (ICDSC-9), Copenhagen(Denmark), May 1992
[7]
530
[9] B.Palesi, G.Rondinelli, N.Balteas: "A MicrosatelliteSystem for Autonomous Environmental MonitoringService", 6th AIAA/USU Conference on Small Satel-lites, University of Utah, September 1992
[10] F.Ananasso: "Small-Vs-Large Satellites: A PerspectiveTowards Innovation", 1992 International Conferenceon Communication Systems (ICCS -92), Singapore,November 1992
FULVIO ANANASSO received the Electronics and ElectricalCommunications Degree from the University of Rome in1973, after which joined Selenia S.p.A.(Rome) as amicrowave designer in the Development Laboratory. He wasinvolved in several military and civilian projects concerningmicrowave subsystems for Radar, Avionics and SatelliteCommunications equipment.In 1981 he joined Telespazio S.p.A.(Rome) as Section Chiefin the Space and Advanced Programs Division, withresponsibilities related to Satellite Payload and DigitalTransmission Channel design.In 1987 he was appointed Associate Professor of DigitalSignal Processing at the University of Rome Tor Vergata,Electronics Engineering Dept.In 1990 he has joined again Telespazio, where is nowDirector of the Advanced Studies and ExperimentationsDivision.He has performed a number of studies for National andInternational Organizations, including ESA, INTELSAT andINMARSAT, is author of a Radio Systems book and over 80technical papers on communication systems and technology.
Economics Of The New Smaller And Shorter LifetimeGeostationary Communications Satellites
Dr. James R. Stuart, Independent Consultant, Louisville, CO, USADr. Randall E. Coffey, Ball Space Systems Division, Boulder, CO, USA
Janet Gleave Stuart, University of Colorado, Boulder, CO, USA
1. ABSTRACT
This paper compares the characteristics, prices and economics of currently available large, medium andsmall geostationary (GSO) communications satellites, focusing on specific 050 lightsats currently inproduction. A listing of current international GSO lightsat suppliers and currently signed contracts for050 lightsats will be presented. The paper addresses the selection of the proper size and lifetime of ageostationary (GSO) communications satellite for a particular project.
2. SUMMARY
It is shown that the many currently available GSO lightsatshave fewer transponders, lower communications payloadmass fractions and a resulting higher cost/transponder andcost/transponder-year delivered on orbit, coupled with shorterlifetimes and lower total lifecycle revenues. GSO lightsatswould appear on the surface to suffer from the economies ofscale that have led to the steady historic increase in size ofcommercial GSO communications satellites. However, GSOlightsats actually provide a surprisingly competitive return oninvestment (ROI) when compared to conventional large andmedium GSO satellites, even for larger markets. And whenmodest transponder vacancy rates are included, the GSOlightsats can compare favorably with the annual ROI's oflarge and medium GSO satellites with only a fraction of therequired investment capital. The paper presents cost/benefitnet-present-value (NPV) analyses showing small profit inpurchasing a satellite lifetime over 10 years. Sinceentrepreneurial, new market ventures are very sensitive toboth competitive ROI's and total start-up capital required,GSO lightsats are emerging as the system size of choice forparticular projects.
3. LARGE, MEDIUM AND SMALL GSO SATELLITECAPABILITIES
Table 1 presents a comparison of the capabilities of typical'large' GSO satellites with 48 transponders (e.g., HS-601,GE7000/5000, Eurostar 2000, etc.), typical 'medium' GSOsatellites with 24 transponders (e.g., HS-376, GE3000,Matra/Fairchild's UltraSat 24, etc.), and 'small' GSOsatellites with 12 transponders.
Small GSO lightsats are generally modern, powerful, highquality, rapidly produced communications satellites which arecharacterized by their smaller payloads and smaller GTOlaunch mass (<1000 kg). These new GSO lightsat are onlynow being offered by numerous suppliers because of the re-cent advancements in satellite technologies, components andmanufacturing, as well as the recent availability of assuredlaunch opportunities (dedicated and piggy-back) from severalsuppliers targeting this new 800-1000 kg small satellite GTOmarket. For large markets, GSO lightsats can be co-located(up to four in the same slot for full frequency utilization) andincrementally placed on orbit to track the market demand andreduce the required initial up-front financing. Table 2 showsthe characteristics and supplier contacts for several 'small'
TABLE 1. GSO SATELLITE SYSTEM CAPABILITIES COMPARISON
TYPICAL SATELLITES:
PRODUCTION TIME (months):
SATELLITE EOL POWER (W):
PAYLOAD EOL POWER (W):
NUMBER OF TRANSPONDERS:
LIFETIME (yr):
NUMBER OF TRANSPONDER-YEARS:
GTO MASS (kg):
TYPICAL LAUNCHERS:
LARGE GSO SATELLITES MEDIUM GS() SATELLITES SMALL GSO SATELLITES
HS601, Eurostar 2000,
0E7000/5000, etc.FIS376. Eurostar 1000,
0E3000, Ultra Sat-24, etc.HS376L, Afristar, AMOS,
UltraSat -l2, BOS-700, 0E2000
36 months 30 months 28 months4000 W 1500 W 1000 W3200 W 1100 W 750 W
48 24 1215 years 12 years 10 years
720 288 1203000 kg 1500 kg 900 kg
Atlas II Delta 11 Ariane SDS
Ariane 4 Atlas HAS Long March 2C
Long March 2E Ariane Spelda Delta II Piggyback
Long March 2E IAI Next
531
TABLE 2. SMALL GSO SATELLITE SYSTEMS
MANUFACTURER:
FIRST LAUNCH:
FIRST CUSTOMER:
PRODUCTION TIME (months):
SATELLITE EOL POWER (W):
PAYLOAD EOL POWER (WY
NUMBER OF TRANSPONDERS:
LIFETIME (yr):
NO. OF TRANSPONDER-YEARS:
GTO MASS (kg):
TYPICAL LAUNCHERS:
CONTACTS:
Afristar 1 AlviOS BGS-700 GE 2000 HS 3761 Ultra Sat 12IT1 IA I Ball GE Hughes Fairchild
1994 1994 TBD (1975) 1994 TBDAfrisat Israel Brightsidc (RCA Americom) Thailand Sat Time/UNICOM28 mo. 28 mo. 28 mo. 30 mo. 24 mo. 27 mo.1060 W 940 W 1000 W 900 W 850 W 1103 W750 W 620 W 700 W 600 W 500 W 770 W
12 12 12 12 12 1210 10 10 10 10 10120 120 120 120 120 120
800 kg 900 kg 1000 kg 1000 kg ICOO kg 1000 kgMane SDS Ariane SDS Mane SDS Ariane SDS Mane SDS Mane SDS
CZ-2C CZ-2C CZ-2C CZ-2C CZ-2C CZ-2CDelta II Delta II Piggyback
Dr. Torn van der Heydon Dr. Patrick Rosenbaur Dcmald L Owlish Eugene M. Morse Guy Bertormeau Dr. Richard InciardiFairchild SpaceIntern1 Technologies kw. lead Aircraft Industries Ball Space Systems Div. GE Astro-Space Hughes (Bldg S64. A430)
1521 Westbranch Dr. Wind P.O. Box 1062 P.O. Box 800 P.O. Box 92919 20301Canury BlvdMcLean. VA 221023201 kid:anal Zone 56000 Boulder. CO 80306-1062 Prirwmon, NJ 011543-081:0 Los Angeles, CA 90009 Germantown, MD 20874
USA Brad USA USA USA USA(703)863-1050 972-3-536.5327 (303)939-4425 (609)734-9479 (310) 364-7915 (301) 353 -8349
TABLE 3. GS() SATELLITE PROJECT COST COMPARISONS
ProgramArea Large
GSO Satellite TypeMedium Small
Satellite & Payload $ 95.00 $ 50.00 $ 40.00
Launch Services $ 85.00 $ 45.00 $ 20.00
TT&C Facilities $ 3.00 $ 2.00 $ 2.00
TT&C Operations $ 15.00 $ 12.00 $ 10.00
Launch & Ops Insurance $ 28.80 $ 15.20 $ 9.60
Debt Servic:. (10%) $ 21.18 $ 11.22 $ 7.16
Total Cost (FY '92 M$) $ 247.98 I $135.42 $ 88.76
100
90
80
70
60
50
4030
20
10
0
1-1 Large SatelliteMedium Satellite
Small Satellite
Oomp
8 8 - ?-1-8(7.;
rl
L.°
0.1C.4
"q)
In 0)
FIGURE 1. GSO SATELLITE PROJECT DEVELOPMENT COST COMPARISONS
532
TABLE 4. TRANSPONDER COST COMPARISONS
LARGE GSO SATELLITE
MEDIUM GSO SATELLITE
SMALL 3S0 SATELLITE
PROJECTDEVELOPMENT
COSTS(FY92 MS)
NUMBER OFTRANSPONDERS
SATELLITELIFETIME
(YEARS)
NUMBER OFTRANSPONDER-
YEARS
COST PERTRANSPONDER
(FY92MS)
COST PERTANSPONDER-
YEAR(FY92MS)
248 M$
135 M$
89 M$
48
24
12
15
12
10
720
288
120
5.17 M$
5.63 M$
7.42 M$
0344 M$
0.469 M$
0.742 M$
GSO satellites which are currently in hardware development,or currently being marketed/proposed (e.g., Hughes HS-376L, Fairchild UltraSat 12, ITI Afristar, IAI AMOS, BallBGS-700/400, GE2000, etc.).
Small GSO lightsats are generally modern, powerful, highquality, rapidly produced communications satellites which arecharacterized by their smaller payloads and smaller GTOlaunch mass (<1000 kg). These new GSO lightsat are onlynow being offered by numerous suppliers because of the re-cent advancements in satellite technologies, components andmanufacturing, as well as the recent availability of assuredlaunch opportunities (dedicated and piggy-back) from severalsuppliers targeting this new 800-1000 kg small satellite GTOmarket. For large markets, GSO lightsats can be co-located(up to four in the same slot for full frequency utilization) andincrementally placed on orbit to track the market demand andreduce the required initial up-front financing. Table 2 showsthe characteristics and supplier contacts for several 'small'GSO satellites which are currently in hardware development,or currently being marketed/proposed (e.g., Hughes HS-376L, Fairchild UltraSat 12, ITI Afristar, IAI AMOS, BallBGS-700/400, GE2000, etc.).
4. PROJECT DEVELOPMENT COSTS
Table 3 and Figure 1 show a comparison of current, typical
25%
construction costs for large, medium and small GSO satelliteproject elements (space segment, launcher service, TT &Cground station, TT&C operations, insurance and debtservice). Projects with large satellites (48 transponders) costonly 80% more than medium satellites (24 transponders) andonly 180% more than small satellites (12 transponders).
5. TRANSPONDER COST COMPARISONS
Table 4 comparisons show that GSO lightsats appear to be ata severe disadvantage with respect to large satellites, with a25% higher cost per transponder and a 216% higher cost pertransponder-year. Note that the longer revenue-producinglifetime (years 10-15) of larger GSO satellite systemsproduces a marked improvement in the costs per transponder-year. This will be shown later not to be reflected in the actualannual ROI benefits.
6. PROJECT DEVELOPMENT PAYMENT PROFILE
Economic analyses of return on investment (ROI) require theactual timed cash flow profiles for expenses and revenues.Figure 2 shows a typical construction payment profile for asmall GSO satellite. Similar payment profiles (based onactual projects) have been used for the space segment,launcher service, TT&C ground station, TT&C operations,insurance and debt service cost elements in the ROI analyses.
Total Expenses (Small Satellite)
Satellite & Payload
DebtService
TT&CFacilities
0%0 1 2 '6'Launch
Program Year
FIGURE 2. PROJECT DEVELOPMENT PAYMENT PROFILE
Launch Services
TT &C Operations
533
5
7. MARKET DEMAND CURVES
Since the actual market demand for a proposed GSO satelliteproject is a major variable, three possible market demandcurves are defined in Figure 3 which determine thevacancy/lease profile experienced after launch, for use in theeconomic analyses. In general, established markets (such asthose serviced by Intelsat) may begin service with up to 2/3of the transponders leased, and the remaining 1/3 leased aftera few years. For new markets, in general, only about 1/3 ofthe transponders are initially leased and the remaining 2/3 areleased over several or many years. The three market demandcurves in Figure 4 provide 1/3 and 2/3 initial capacity formedium and large satellites. The shape of these 'S' curvesare not untypical of the experience of several satelliteoperators.
Each of these market demands is analyzed for the threedifferent size satellites, along with the fully loaded cases.
60565248444036322824201612
84
Figure 4 shows the various transponder leasing profiles thatare derived from selecting various size satellites in anuncertain market. For the large satellites, the 'High' marketdemand curve represents an 'established market' condition(2/3 initial transponder loading), and for the medium andsmall satellites a fully loaded market demand condition. The'Medium' market demand curve represents a 'new market'condition (1/3 initial transponder loading) for the largesatellites, an 'established market' condition (2/3 initialtransponder loading) for a medium satellite, and a fullyloaded demand for the small satellite.
8. PROJECT CASH FLOWS
Economic analyses of ROI require the timed cash flowprofiles for expenses and revenues. A constant transponderlease rate of 2.5 M$ is assumed. As an example, Figure 5shows the payment/revenue streams for a large GSO satellite(48 transponders), with different market demands: 100%
.
0 I i 11111 II II0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Year After Launch
FIGURE 3. TYPICAL MARKET DEMANDS
60565248444036322824201612
84
T-
Large Satellite: 48 Xpndrs-
0 I
0 1 2 3 4 5
Medium Satellite: 24 Xpndrs
Small Satellite: 12 Xpndrs
I I I I I I
6 7 8 9 10 11 12 13 14
Year After Launch
FIGURE 4. TRANSPONDER LOADING PROFILES
5341_4
15
Large Satellite: 48 Xpndr'sJ
1600
1400
1200
1000
a, 800 7>-;r.. 600
200G.)
400
0
-200 ; ;
-400 I i I I I I I 1111 1 I I
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18A Launch Program Year
FIGURE 5. PAYMENT/REVENUE CASH FLOWS
leased at launch, high demand (established market condition),medium demand (new market) and low demand (only 1/6leased at launch). The maximum negative cash flow ends inthe quarter following launch with a capital investment ofabout 200M$. The break even times for a large satellite varyover the various market conditions from 5 years to 10 years.The net profit at end of life (15 years) varies from 800M$ to1,540M$. Similar cash flows have been developed for themedium and small GSO satellites as the inputs for thefollowing ROI computations.
LARGE GSO SATELLITE
MEDIUM GSO SATELLITE
SMALL GSO SATELLITE
9. RETURN ON INVESTMENT (ROI) COMPARISONS
Annual ROI's are computed for each case of the selection of alarge, medium or small GSO satellite in view of low,medium, high or 100% loaded actual market conditions.Table 5 shows comparisons of the costs per transponder,costs per transponder-year and annual ROI's for variousmarket conditions: from fully loaded at launch to high,medium and low market demand (as defined in Figures 3 and4). Table 6 then compares various initial loading conditions
TABLE 5. ROI VERSUS MARKET DEMAND
COSTS (FY92MS)Dev. Per Xprulr-ED= XII= Year
248 MS 5.I7 MS 0344 MS
135 MS 5.63 MS 0.469 MS
89 MS 7.42 MS 0.742 MS
100% DEMAND HIGH DEMAND MEDIUM DEMAND LOW DEMANDAnnual Initial Annual Initial Annual Initial Annual Initial
1 .nadinz J nadino I.nadinv 119.1 Luau33.8% Full 27.5% 2/3 19.7% 1/3 15.2% 1/6
33.1% Full 33.1% Full 27.3% 2/3 20.0% 1/3
26.2% Full 26.2% Full 26.2% Full 21.8% 2/3
TABLE 6. ROI VERSUS INITIAL LOADING
LARGE GSO SATELLITE
MEDIUM GSO SATELLITE
SMALL GS() SATELLITE
INITIAL TRANSPONDER LOADING
(With Previous Market Demand Curves)COSTS (FY92MS)
Development
failla
248 MS
135 MS
89 MS
Per
IXIDEIRWer
5.17 MS
5.63 MS
7.42 M$
Transponder -
Yiat
0.344 MS
0.469 MS
0.742 M$
FULL 2/3 Full 1/3 Full
Annual ROI
33.8%
33.1%
26.2%
lianualR121
27.5%
27.3%
21.8%
Annear R01
19.7%
20.0%
16.0%
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10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Small Satellite (12 Xpndrs)Medium Satellite (24 Xpndrs)
a.. .P ROI = 20%
..'? 4
7,
0 1 2 3
Additional Satellite Life (Years)4
FIGURE 6. ECONOMIC VALUE OF LONGER LIFETIME
(from fully loaded, 2/3 initially loaded to 1/3 initially loaded)for each satellite size.
10. LONGER LIFETIMES
The surprisingly low economic value of extending the lifetimeof satellites over 10 years can be quantified using the sameeconomic assumptions and analyses already presented in thispaper. In order for the extended lifetime satellite to befinancially attractive, the incremental cost to extend thesatellite life must be less than the net-present-value (NPV) ofthe additional revenues. Figure 6 shows the NPV of theextended lifetime revenues (with the satellite 100% leased) atone year before launch for the medium and smallcommunications satellites with ROI's of 20% and 30%.
As the target ROI goes up, the discounted revenue cash flowfor the longer lifetimes yeilds a significantly lower pre-launchNPV. It is clear from Figure 6 that the typical costs to extendsatellite lifetimes for 5 years (40-50% lifetime increase) farexceed the actual net present value of the additional revenues,even at full 100% leased capacity. Even without discountingfor economic risk factors attendant with longer lifetimes (suchas increased market risks, technololgy aging risks, inflationrisks, etc.), longer satellite lifetimes than about 10-12 yearsare difficult (and often impossible) to justify economically.
II. CONCLUSIONS
The economic analyses presented in this paper clearly showthat for !arge, medium and small satellites:
1) The actual differences in annual ROI's (<7% ) do notreflect the large, but specious, differences in costs pertransponder or costs per transponder-year (>200%).
5
Expected ROI and required investment capital are themeaningful parameters for business selection of the propersatellite size.
2) The up front development cost Vs associated withpurchasing longer lifetimes (especially years 12-15) do notyield significant annual ROI benefits, since up frontinvestment A's earn no return (0% ROI) for first 10-12 years.
3) For the same market conditions, selecting the nextlarger satellite, with a 50-85% larger capital investment canyield less than 7% higher ROI's in the best case, and in theworst case over 7% lower ann"il ROI's.
4) Annual ROI's are better when the selected satellitesize is appropriate to the market demand, so that a majority oftransponders will be initially leased.
5) Overestimating the actual market demand yields lowerexpected ROI's than underestimating the actual market (andselecting a smaller satellite).
GSO lightsats are now a real alternative when selecting theproper size of a GSO satellite for a new program. WhileGSO lightsats would appear on the surface (cost pertransponder, cost per transponder-year) to suffer fromeconomies of scale compared to medium and large GSOcommunications satellites, GSO lightsats actually providesurprisingly competitive annual ROI's. And when marketuncertainties with attendant transponder vacancy rates areincluded, the 050 lightsats compare favorably with theannual ROI's of large and medium GSO satellites, and withonly a fraction of the required investment capital. Sinceentrepreneurial, new market ventures are very sensitive toboth competitive ROI's and total start-up capital required.GSO lightsats with moderate lifetimes are emerging as thesystem of choice for particelar projects.
.
536 4
EXPORT CONTROL: CURRENT LEGAL ANDPOLICY ISSUES AFFECTING SATELLITE AND
TELECOMMUNICATIONS VENTURES IN THE PACIFIC RIM
Jill Abeshouse Stern, Esq.Thomas E. Crocker, Esq.
Shaw, Pittman, Potts & TrowbridgeWashington, D.C.
1. ABSTRACT
Export controls are an important issue for U.S. companiespursuing satellite and telecommunications businessopportunities in the Pacific Rim, and for their foreigninvestors, partners and customers. Fundamental changes inexport controls are occurring which reflect shifts in theglobal geopolitical situation, increased concern aboutmissile proliferation and the emerging global marketplacefor satellite and telecommunications technology andservices.
2. INTRODUCTION
Export control, perhaps morethan any other regulatory issue,reflects a dynamic, andfrequently shifting, tensionbetween foreign policy, nationalsecurity and internationaltrade. The balance betweenthese competing concerns has apractical impact on the U.S.satellite and telecommunicationsindustries, and their foreigncustomers, investors andpartners. Export controls canaffect the ability of U.S.companies to export technology,components and completesatellite systems; to providetechnical assistance orconsulting services; and toenter into joint ventures withforeign partners. From thestandpoint of customers andinvestors in the Pacific Rim,export controls may affect thetiming, cost and availability oftechnology or services and caneven restrict reexports of U.S.technology once abroad.
To assist companies that arepursuing or considering businessactivities in the Pacific Rim,this paper provides a briefoverview of the U.S. exportcontrol regulatory scheme as itaffects satellite andtelecommunications ventures.Following this overview, thepaper focuses on recent
537
regulatory/policy trends anddevelopments in the exportcontrol area that promise toincrease the ability of U.S.industry to exporthigh-technology products andservices. These dev: .opmentsinclude: (1) the simplifiedcontrols for exports of certaincommunications satellites; (2)liberalization of exports to theformer Soviet Union; (3) recentU.S. government decisionsapproving satellite flights onthe Russian Proton and ChineseLong March launch vehicles; and(4) a November 1992 StateDepartment decision authorizing,for the first time, export ofdescramblers that can receiveencrypted TV signals. Inaddition, this paper discussesthe recent tightening of missiletechnology controls under theEnhanced Proliferation ControlInitiative (EPCI), a developmentwhich potentially affectsexporters of any commodity ortechnical data.
3. OVERVIEW OP U.S.REGULATORY SCHEME
3.1 EXPORT LICENSING
In the United States, there aretwo primary agencies involved inadministration of exportcontrols of interest to thesatellite and telecommunicationsindustries: the State Departmentand the Commerce Department.
First, the Department of State'sOffice of Defense Trade Controlsor ODTC, operating underauthority of the Arms ExportControl Act, is responsible forthe licensing of exports ofdefense articles and defenseservices, as enumerated on theU.S. Munitions List. The U.S.Munitions List requireslicensing of defense products or"hardware", as well asdefense-related technical data,including consulting, technicalassistance or manufacturinglicense agreements involving thedisclosurq of technical data.
The second major player in theexport licensing area is theDepartment of Commerce actingunder the authority of theExport Administration Act or,given the currently lapsed stateof that statute, theInternational Emergency EconomicPowers Act. Basically, theDepartment of Commerce exercisesits licensing authority withregard to non-military productsand technical data specificallyenumerated on the CommerceControl List under the ExportAdministration Regulations. Inaddition, Commerce hasjurisdiction over the EnhancedProliferation Control Initiative(EPCI) which may impose anadditional layer of regulationapplicable to any exports thatmight have a prohibited end use(e.g. nuclear, chemical andbiological weapons and missiletechnology.)
While telecommunicationstechnology is largely within theCommerce Department'sjurisdiction, satellites have aunique status. Satellites are"dual use" technologies in thatthe technology potentially hasboth civilian and military uses.In the United States,communications satellites have,in the past, been deemed to bepredominantly defense articlesfor purposes of export controland therefore subject to ODTClicensing requirements. As aresult, ODTC's prior approvalhas been required for the exportof communications satellites, aswell as their components andrelated technical data,including through technicalassistance agreements.
538
Significantly, export is definedto include a transfer of titleto a satellite from a U.S. toforeign entity, even if thattransfer occurs in-orbit.
In a recent development,jurisdiction over communicationssatellites has been shifted, incertain limit,ed cases, to theCommerce Department as discussedin greater detail below.
Depending on the technologylevel of the product ortechnical data concerned and thespecific end user destinationinvolved, Commerce may requirean individual validated licenseor IVL authorizing the export.Under newly adopted rules,exports of certaincommunications satellites willbe subject to an IVL in thefuture. For othertelecommunications technologies,Commerce may permit the exportunder one of a number of generallicenses available under theExport AdministrationRegulations which do not requireCommerce's express prior writtenapproval of the export.Commerce, like ODTC, alsomaintains controls on reexportsof products and technical data.
3.2 COMMITTEE ON FOREIGNINVESTMENT IN THE UNITEDSTATES (CFIUS)
In addition to the outward-boundcontrols of the export licensingscheme summarized above, thePresident has authority underthe Exon-Florio amendmentenacted in 1988 to review andblock inward-bound acquisitionsthat may affect U.S. nationalsecurity. The review authorityis delegated to the Committee onForeign Investment in the UnitedStates (CFIUS). CFIUS reviewapplies when, for example, aU.S. company that providesproducts for key technologiesessential to the U.S. defenseindustrial base is beingacquired by a non-U.S. company.The regulations would appear tosubject to potential CFIUSreview any joint ventureinvolving the transfer of
production or R&D facilities inwhich technology or personnelare transferred to a foreignperson. A simple license oftechnology by a U.S. party to aforeign person is not subject toreview by CFIUS (but may, ofcourse, be subject to exportlicensing under certaincircumstances.)
4. RECENT TRENDS ANDDEVELOPMENTS
As a result of the profoundchanges in the globalgeopolitical situation over thelast three years and as areflection of the increasingconcerns over enhancing U.S.competitiveness, the UnitedStates and its allies in theCoordinating Committee forMultilateral Export Controls orCOCOM in Paris have beenpursuing a broad agenda tosimplify and reorient the exportcontrol regimes maintained bythe United States and COCOM. Anumber of recent trends anddevelopments are particularlyrelevant in the satellite andtelecommunications context anddeserve mention here.
4.1. SIMPLIFIED CONTROLSON SATELLITES
There has been an effort tosimplify export controls or inthe words of Former Secretary ofState James Baker, to "erecthigher fences around feweritems." This is an on-goingprocess, but the first, majorstep was undertaken with the so-called "COCOM core list review"in 1991. In addition, theUnited States has takenmeasures, at President Bush'sdirection, to "rationalize"controls between ODTC andCommerce, a development whichpromises to have importantimplications for the satelliteindustry as discussed below.
On November 16, 1990, PresidentBush signed Executive Order No.12735 which, among other things,required, as part of the expdrtcontrol "rationalization"process, the removal from theU.S. Munitions List of all itemscontained on the COCOM core listunless significant U.S. nationalsecurity interests would bejeopardized. Since that date,various interagency working
539
groups have been meeting todevelop guidelines for treatmentof spacecraft andcomponents, among other items.
As a result of this effort, onOctober 23, 1992, the StateDepartment issued a final rulewhich moved certain spacecraft-related items from the U.S.Munitions List to the CommerceControl List. A correspondingrule was proposed by Commerce totransfer jurisdiction over theseitems. In the future,communications satellites willnot inherently be considereddefense articles. Rather, thefocus will be on specifictechnologies incorporated withinsatellites that may havemilitary implications.
Communications satellites whosecapabilities and characteristicsare sufficiently "military" willbe subject to continued controlunder the U.S. Munitions List.Among the satellite capabilitiesthat have been deemed to raisemilitary concerns are thefollowing: anti-jam capability;cross-links; cryptographicitems; kick motors; spacebornebaseband processing equipment;and certain antennas, propulsionsystems and attitude control anddetermination systems.
The advantages of falling underCommerce Department jurisdictioninclude a "presumption ofapproval" system at Commerce anda generally shorter time framefor licensing. CommerceDepartment jurisdiction alsomeans that U.S. companies willnot need 'xport licensing inorder to respond to RFPs. Incontrast to State, the CommerceDepartment has formal appealprocedures which are alsoexpected to make the processmore responsive to industryconcerns.
While this simplified controlprocess is generally a positivedevelopment from the standpointof international trade, it isimportant to emphasize that theState Department still retainsjurisdiction over manycommunications satellites,particularly those involvingstate-of-the-art satellitetechnology. In addition,detailed design, development,production or manufacturing data
for all spacecraft systemsremain covered by the USMLregardless of which agency hasjurisdiction over the satellitehardware.
4.2. TRADE WITH FORMERSOVIET UNION
Second, and related to the firstdevelopment of simplified andrationalized controls, is abroad effort by COCOM membercountries, including the U.S.,to liberalize East-Westcontrols. This liberalizationwill facilitate high-technologyexports to and trade with theFormer Soviet Union, includingthe Russian Far East. Potentialramifications of this East-Westliberalization could include thegreater availability of Russianspace technology, hardware andservices, as well as thepossibility of teamingarrangements between Russian andU.S. companies in the PacificRim.
Traditionally, COCOM (aninternational body composed ofall NATO countries minusIceland, plus Australia andJapan) imposed strict exportcontrols on technology transfersto the Soviet Union. Respondingto a changing world order,efforts are underway tostreamline exports oftechnology, includingtelecommunications, to formerSoviet Bloc countries contingentupon the establishment ofeffective export control regimesin those countries. Countriesmay apply to COCOM to beeligible for new favorableconsideration procedures upondemonstration that they caneffectively track reexports,supply export and deliverycertificates and guarantee thattechnology will be used forcivilian purposes.
Poland, Czechoslovakia andHungary have implemented exportcontrol safeguards. Each hasbeen accorded "favorableconsideration" status, andattention is now turning totheir removal from the list ofCOCOM proscribed destinations.A similar approach can beexpected for the Baltic States.
540
Moreover, in November 1992 COCOMformally moved to admit thecountries of the former SovietUnion into associated statusthrough the recently establishedCOCOM Cooperation Forum.
In addition to multilateraldevelopments at COCOM, anoteworthy U.S. development isthe recently enacted "Freedomfor Russia and Emerging EurasianDemocracies and Open MarketsSupport Act" which is intendedto facilitate trade andinvestment opportunities withthe Former Soviet Union (FSU)involving space hardware,technology and services. Amongother things, the bill, known asthe Freedom Support Act, willprovide assistance to U.S.companies in entering FSUmarkets and will expediteconsideration of licensesrelating to "possibleacquisition of any spacehardware, space technology orspace services" for integrationinto U.S. space projects orcommercial space ventures.
4.3. TIGHTENING OF MISSILETECHNOLOGY CONTROLS
Concurrently with the"rationalization" of controls ondual use technologies such assatellites, and the East-Westliberalization, a third majordevelopment is the tightening ofcontrols on U.S. missiletechnology. This developmentreflects a fundamentalreorientation of the unilateralU.S. export control regime fromEast-West to North-South.
In 1991, the U.S. CommerceDepartment began to implementthe Enhanced ProliferationControl Initiative or EPCI whichis designed to control thespread of nuclear, chemical andbiological weapons and missiletechnology. EPCI imposes newand expanded export controlswhich require the attention ofany exporter of commodities ortechnical data (includingsoftware.)
EPCI requires an individualvalidated license fox theexport, reexport or transfer ofany commodity or technical datawhich the exporter "knows," "hasreason to know" or "is informed"is destined for a nuclear,
chemical or biological weaponsor missile development end useor end user. EPCI thus imposeson all U.S. exporters a "knowyour customer" rule.Significantly, knowledge by anemployee will be imputed to theemployer.
EPCI's prohibitions extend notmerely to sensitive weapons-related technology but also toany commodity, including thoseitems that are not otherwisesubject to control, which theexporter "knows" or "has reasonto know" might have a prohibitedend use. Thus, the new exportcontrols cover seeminglyinnocuous items like paper clipsand rubber bands. Put simply,EPCI imposes new, stringentrequirements that exporters andtheir employees know what and towhom they are selling, as wellas where the exported item isgoing and why.
Because the Department ofCommerce recently has made itclear that EPCI will be a topenforcement priority, it isimportant for each U.S. exporter(including those in thesatellite industry) to have inplace at least a minimalinternal control procedure tomonitor indications ofsuspicious transactions.Certain informal guidelines havebeen available, and theDepartment of Commerce recentlypublished a more formal list of"red flags." For example, underexisting guidelines, if anexporter knows or has reason toknow that a customer does notwish to take advantage ofcommonly available installationor maintenance services, theexporter is under an obligationto investigate the transaction.Similarly, the presence of anend-user on Commerce's publisheddenial list is a bar to the
transaction. An exporter maynot ignore "red flags" or avoidasking necessary questions of acustomer.
Regulations adopted in June 1992by the Commerce Department willpotentially apply to technologythat would aid development ofsatellite launching programs inseveral countries. In definingparticular situations where
541
validated licenses are required(and presumably will be denied),Commerce included satellitelaunching programs in NorthKorea, Brazil and India.Missile technology exportcontrols have also beentightened with regard to China,Iran, Pakistan, Iraq, Israel,Saudi Arabia and Egypt.
In addition to the unilateralEPCI controls, the United Stateshas been pursuing multilateralcontrols on similar weapons ofmass destruction through theNuclear Suppliers Group, theAustralia Group and otherbodies. Given recent successesin these talks, the prospectsfor broad multilateral regimesaimed at prohibiting the spreadof weapons of mass destructionappear to be good.
4.4 RUSSIAN AND CHINESELAUNCH VEHICLES
Two recent decisions relating tothe use of Chinese and Russianlaunch vehicles have a potentialimpact on satellite and launchactivities in the Pacific Rim.Traditionally, the U.S. hasdenied exports of U.S.satellites for launch by Chinaor Russia because of technologytransfer concerns. Theavailability of alternativelaunch vehicles could meanincreased competition in launchservices and, potentially lowerimplementation costs forsatellite ventures and morediverse launch capabilities.
In September 1992, the Presidentapproved the launch of fiveU.S.-built satellites on theChinese Long March vehicle.This decision affected thefollowing satellite projects:APSAT (Asia Pacific Satellite),Asiasat 2, Intelsat VIIIA,STARSAT, Afrisat and theChinese-built Dong Fang Hong 3(which contains U.S.-builtcomponents). Where exports toChina are involved, thePresident has authority to granta waiver of export restrictionswhere the national interest sowarrants. In the case of theforegoing satellite projects,the national interestconsiderations were deemedcompelling.
This waiver decision has beencriticized by the U.S. launchindustry, among others, on thegrounds that China has beenviolating a bilateral 1989agreement with the U.S. bysignificantly undercutting U.S.satellite launch companies.(The 1989 Agreement allows Chinato launch 9 U.S.-builtcommunications satellitesthrough 1994 at pricescomparable to those offered byWestern companies.) There hasbeen speculation that the newClinton-Gore Administration maytake a stronger position on thisissue, based on an October 1992speech by Vice President-electAl Gore who spoke out againstChina's violations of its launchagreement with the U.S.
U.S. launch providers have alsocriticized the StateDepartment's June 1992 decisionto waive export restrictions toallow flight of the Inmarsat IIIsatellite on Russia's Protonrocket, if that launch vehicleis selected by Inmarsat. Thewaiver has been characterized asa one-time exception to theState Department's long-standingpolicy prohibiting export ofU.S. satellites for launch inthe former Soviet Union. Toaddress U.S. launch industryconcerns about below-marketpricing of thegovernment-subsidized Proton,the U.S. is currently attemptingto negotiate an agreement withRussia relating to satellitelaunches.
4.5 SATELLITE DESCRAMBLERS
In another recent developmentrelevant to the satellite andtelecommunications industries,the State Department, inNovember 1992, authorized theexport of descramblers,manufactured by Titan SatelliteSystems, that can receiveencrypted TV signals.Cryptographic technology iscovered by the U.S. MunitionsList and the State Departmenthas traditionally taken a highlyrestrictive view of exportsinvolving cryptographiccapability, largely at theinsistence of the U.S. NationalSecurity Agency (NSA). Thisdevelopment will be ofparticular interest to companiesinterested in encryptedsatellite programming delivery.
542
5. CONCLUSION
As the above discussionreflects, the U.S. exportcontrol scheme is undergoingdramatic changes, fueled by evenmore dramatic changes in thegeopolitical situation andglobal economy. Anoth,.:: factorcreating an impetus fo: changeis the expanding globalmarketplace for satellite andtelecommunications hardware andservices. U.S. companies areincreasingly looking tointernational markets for theirproducts and services, at thesame time that countries in thePacific Rim, and elsewhere, arerecognizing the importance of astrong telecommunicationsinfrastructure as a foundationfor social and economicdevelopment. In addition, theincreasingly global nature ofthe communications industry, andthe practical reality ofstrategic partnerships involvingcompanies and investors fromdiverse countries, means thatexport control issues willcontinue to have a major impacton satellite and telecommuni-cations activities in thePacific Rim.
With the possible exception ofproliferation concern, thesepolitical and economic factorsare generally moving the U.S. inthe direction of reducing exportcontrol barriers and making theexport control process fasterand more certain. For many inthe U.S. satellite industry,however, these changes are stilltoo few and too slow, and areperceived as imposingconstraints on commercial
activities that internationalcompetitors may not face.
The future challenge will be tobalance industry pressure toreduce trade barriers whileensuring that national andglobal security concerns aremet. While it is still tooearly to tell which directionthe new Clinton Administrationwill take, it is likely toaccelerate :he trend towardgovernment promotion of U.S.exports in new foreign markets.
Author Biodata
Jill Abeshouse Stern is Counselto the Washington, D.C. law firmof Shaw, Pittman, Potts &Trowbridge. She specializes ininternational and domestictransactions and regulatory andlegislative issues affectingtelecommunications, satelliteand commercial space companies.
Thomas E. Crocker is Counsel toShaw Pittman where he practicesin the areas of internationaltrade and banking. He regularlycounsels clients on a widevariety of transactional andregulatory international tradeand finance issues, includingexport control.
543
CONVERGENCE, UNIVERSAL SERVICE AND PUBLIC POLICY
Rein P MereSenior Manager, Strategic Planning and Development
KPMG Peat Marwick Management ConsultantsCanberra, Australia
ABSTRACT
This paper addresses the phenomenon of convergence between telecommunicationsand information technology, and looks at the implications for the participants. Itidentifies some of the key drivers and looks at public interest considerations and thechallenges these present to public policy formulation. The paper notes thatconvergence also encompasses broadcasting - an area that has been considered tobe quite separate from the world of tele-communications. The issues stemmingfrom convergence are only now beginning to be addressed.
1. Convergence and the Public
On 20 July 1969 Neil Armstrong walked on the moon -and millions of people around the world watchedspellbound, glued to their television screens. Within afew short years, the Apollo missions and deep spaceprobes which brought back colour pictures of Mars andVenus barely excited interest.
While critically inspecting the photographs reproducedin the media, we took for granted our ability to extractfrom the background "noise of electromagneticemissions of interstellar space the incredibly weaktelecommunications signals coming across millions ofmiles. Technology and public expectations werereconciled. It was no longer "news". But it should havebeen.
In much the same way, convergence is the revolutionthat never happened. There has been no startling newdiscovery; no particular breakthrough to focus ourattention; and no wild panic among nto3lic policymakers in Government. Not yet.
These exciting achievements have stemmed from aninexorable and largely invisible integration of thefamiliar world of telecommunications with the rapidlychanging world of information technology. Suchadvances have been disguised in bland terms like "signalprocessing", which are "information free" to the publicas well as to the expert commercial executive orGovernment policy analyst.
Signal processing, for example, has allowed us to build"intelligence" into a space communications receiversystem. The super-fast transaction times nowachievable by computing chips and parallelarchitectures make it possible to apply a number oftesting and sorting programs (or algorithms) in real -time to the incoming telecommunications data stream.
The addition of this "intelligence", which can include theinsertion of statistical tests and comparativeinformation, enables us to "filter out" the unwantedsignals. We can also "enhance", by predictive logic, thewanted signal that emerges. idl under the grey guise of"signal processing".
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It is the ability to store, sort and manipulate hugeamounts of information from a number of differentsources in real-time and at low cost, that lies at theheart of convergence. And at the heart of the moderntelecommunications network lies the "switch" or thePABX (if you are a telecommunications networkplanner), or a high speed digital parallel processor (ifyou are an information systems person).
The impact of convergence will be all the greaterbecause it has been such a long time in coming. Thechanges have been almost imperceptible: a natural partof our on-going adjustment to technological change. Asusers and service providers, we have progressivelycreated a vast and increasingly inter-linked base ofservices, technologies and applications. But none of ushas been required to address the totality of what wehave been creating.
Our unbending focus has been on greater"functionality", more flexible "service offerings", low cost"connectivity", "data highways", "wideband services" -and other wonderfully non-descriptive labels to achieveour business objectives. Our banners have been "clientservice", "flexibility" and "response time", in the contextand language of our industries and client base.
The clear focus has been on "outcomes", not on "inputs"or how they got there. Or how these inputs could beaccessed for purposes other than our own.
2. The Third Wave
If the advent of the Telegraph was the first wave tofundamentally and forever change the way in wf, chpeople and businesses communicated with each other,then the second wave was the Telephone. The thirdwave has been with us for some time, but for the lack ofa hyphen it has eluded our focus and our vision: nottelecommunications, but Tele-communications.
The third wave is about to break. What we are seeing isme merging of two very different cultures, markets andclasses of qsers, each of which is itself evolving. World-
idc. the formerly highly regulated world oftelecommunications is rapidly being liberalised aiidmoving towards competition, openness and a new-foundfocus on client service rather than technology.
(J.
Equally, the relatively unregulated but highlycompetitive world of information technology isburgeoning with a mind bending mix of newapplications and information management services.
The convergence of these sectors will give rise tounprecedented opportunities for businesses to exploit.For the first time, the services demanded by users arenot limited by technology.
Perhaps even more importantly, the Telcos will now bemore willing to focus on meeting client needs ratherthan offering the standard "plain vanilla". It would seemthat users have quickly embraced the "unbundling"game initiated by the FCC.
An imperceptible part of convergence has been thebreath-taking growth in inter-working and networkinformation flows. While this has significantlyexpanded the service potential of interconnectednetworks and databases, it has also resulted in a majorchange in the nature and type of users.
Intelligent communications services are no longer theprovince only of major companies and organisations.The availability of central exchange services such asCentrex provide an affordable entry point to even smallcompanies that cannot justify the cost of their ownPABX.
It is becoming increasingly difficult to differentiatebetween an information systems user and atelecommunications user. For example, the operationof an interconnected virtual data network dependsfundamentally on the intelligent functionalityprogrammed into the software incorporated into thetelecommunications network.
Whether such differentiation continues to he relevantwith the advent of convergence is a moot point.
Convergence is generally thought of in terms of anintegration of technologies. While that is certainly botha determining factor and an outcome, the challenges toservice providers (and, to an extent, users) resultprincipally from the convergence of services. It is thisconvergence that has thrown together the different userbases and their different needs.
The conundrum for policy makers and Governments,however, is the services potential that these initiativespresent.
3. ISDN
No paper on convergence would be complete withoutaddressing ISDN: that was another revolution which hastaken a long time to happen! We are all familiar withthe various meanings attributed to this acronym overthe years. It is also interesting to recall the ways inwhich the concept of ISDN itself has changed to reflecttechnological and service realities and timeframes.With the benefit of hindsight, it could be argued thatthe "solution looking for a problem" was, in fact,searching for a revolution - the revolution ofconvergence.
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The two sectors have remained separate mainly becausetelecommunications networks have been analogue andcomputing networks digital. Computer to computercommunications have required the use of a modem andanalogue-digital converters. Each sector also has aseparate history, and practitioners have grown up intheir particular environment.
While in many countries digital data networks havebeen installed as an overlay on the analogue publicswitched telecommunications network (PSTN),convergence could not become a reality until the wholenetwork has been converted to digital.
It takes time and considerable investment of resourcesto upgrade analogue networks and exchanges to dealwith the transmission and switching of 64 kbps digitalbit streams offered by ISDN. In some countries thereare likely to be several generations of switchingequipment operating side by side - mechanical, electro-mechanical and solid state. This requires considerableingenuity in planning and execution.
Thus while ISDN may be the engine for drivingconvergence and the key to opening up exciting newservice opportunities, both are dependent upon thedigital conversion programs for analogue networks.
As implementation of ISDN gathers pace, excitingopportunities will emerge for developing a wide rangeof new tele-communications services. It will also enablethese services to be accessed, perhaps for the first time,at relatively low cost by small to medium sizedbusinesses which could not previously justify theexpense.
What tends to be overlooked is that the benefits offeredby ISDN, which could be considerable, will accrueprincipally to businesses and the commercial sector -and to the service providers. There will be little benefitfor the public, who tend to want only a voice service.However, as the vast variety of new tele-communications services begin to be marketed, theremay well be spin-offs for the individual.
Another aspect is that a common strategy for Telcos 'slikely to be to give priority to first upgrading exchangesand lines in the Central Business District of the majorcities, and then spread out to the suburbs and regionalareas as and when their maintenance and developmentplans permit. While that may make good commercialsense, it could be perceived by public interest groups aspotentially divisive for the community.
4. Opportunities and Cans of Worms
With the down-turn in the world economy, allbusinesses have had to become more efficient andcompetitive. The greatest impact in businessmanagement over the last five years has been the quietexplosion in information management systems.
There has also been a realisation that integration of allof the company's existing discrete information systems,wherever the information may currently reside andwhether in manual or electronic form, would providethe company with a significant competitive edge. Tomeet this burgeoning demand, convergence offerstantalising opportunities for almost every business.
The users are many and varied: banks, travel agents,airlines (which are becoming increasingly verticallyintegrated), consumer credit agencies (Ai, ericanExpress, Visa, Diners, Mastercard etc), supermarketchains, legal services, Government Departments (whichare increasingly cross-matching data), motor vehicledistributors, customs agents, land use agencies anddevelopers, transport companies, - and Telcos andservice providers themselves.
The above list is not exhaustive, but it is illustrative ofthe wa7 in which tele-communications services have hada pervasive influence on every sphere of commercialand Government activity. Already the ability to mixvoice, data and graphics as integrated services andcommunicate via a digital network has excited manyservice offerings. We also have more new terms toassimilate, such as Multimedia, Frame Relay andCentrex.
To cope with the tele-communications servicesrevolution we have seen the emergence of "interconnectcompanies". These are versatile and flexible firms withstrong skills in telecommunications and informationtechnology, who are able to integrate and configure theservices provided by the network operator to meet theunique needs of each client. The outputs of theinterconnect companies are also likely to be new andinnovative bundles of services.
To deal successfully with the tele-communicationsrevolution arising from convergence, businesses willneed to acquire and develop a range of new skills. Mostsuccessful companies discovered "client service" duringthe 1980s. In Australia, Telecom discovered it in thelate '80s under the threat of competition.
With the competing telecommunications carrier Optusnow up and running, Telecom (now AOTC) isperforming miracles under the guidance and directionof its new CEO Frank Blount, whose credo is to"delight" AOTC's customers. There has been anoticeable change in the response one gets today from aTelecom Business Office.
T,ese changes have not been without pain. AOTC hasfundamentally reviewed its operations and systems, anddiscovered that it really did not have a satisfactorypicture of how the business was performing from day today. It formed the brave conclusion that AOTC was notwell structured or equipped to deal with the clientchallenges of the 1990s and beyond, and set aboutrectifying the situation.
AOTC has now significantly restructured its operationsto provide greater client focus, and shed labour in theprocess. It has set up a range of separate business unitsand equipped them with processes and systems to runtheir business effectively. And Blount has stood thetraditional pyramid on its head, challenging hisexecutives to justify what they were doing to supportAOTC's client base, at the TOP of the invertedpyramid.
As any large organisation adjusting to change will havediscovered, there is more to restructuring than simplymoving a few lines on an organisation chart and talkingwisely about flatter structures! Such major restructuringcertainly requires new skills, but it also requires achange in the culture of the organisation itself: anunderstanding and a con-it ment to doing thingsdifferently.
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Successfully negotiating cultural change takescommitment, guts and determination, and a sharedvision of where the people want the organisation to be.It demands on-going consultation with the staff. And ittakes time. At a time of economic down-turn, it alsotakes commercial courage.
Some argue that these are normal business risks. Withsuch promises of plenty, where are the problems? Asalways, it depends on one's perspective as to whethersomething is good or bad. In the ideal world of Paretooptimality, the "gainers" compensate the "losers".However, why is it that the potential losers always seemto shout loudest and those who stand to gain keep a lowprofile!
The issues that emerge are not commercial or marketrelated - those are well provided for under existingmachinery. It is the minefield of public interestconsiderations that invites attention. These representthe proverbial "can of worms".
5. The Information Society
Western countries have been slow to comprehend themagnitude of the changes stemming from thetechnological initiatives described above. Not only willthese advances cause excitement and perplexity ir.commerce, but the realisation of the possibilities ofwhat the services can provide will suddenly explode on alargely unsuspecting public.
Convergence also represents a revolution ininformation availability and access. A preoccupationwith technology has tended to blind us to the greaterrevolution within the revolution. Japan, for example,recognised the potential, and as long ago as 1986 itcoined "the information society" and addressed the issueon a national basis.
Japan set course not only on developing the varioustechnological streams, but also ensuring that as anation, the people would be empowered to benefit fromand share equally in the national goal of an InformationSociety. We are relatively unprepared.
With convergence the key public interest issuesresulting from the integration of information processingtechnologies and systems with telecommunications are
equity of access
privacy
Each of these considerations recur in most policyanalyses of Government initiatives. While these basicconcepts are well understood and have been providedfor in past legislation, the implications of convergenceare yet to be specifically addressed.
6. Universal Service
In Australia, as in most advanced countries, people areconsidered to have (and expect) the right to affordablecommunications. This right has been preserved invarious Acts of Parliament and Government policies.
There is a further consideration for countries such asAustralia which have a large land mass and a relativelysmall population, a small but significant part of whichlives in rural and remote areas. These people tend toconsider themselves pioneers opening up "the outback",and see no reason why they should not enjoy the samequality and standad of services as their city cousins.
As a result, the Telecommunications Act 1975 madegeneral provision for the carrier (Telecom) to provide"universal service" at a price that was "affordable". Thiswas translated by Telecom to a fixed maximum rate(which was heavily cross-subsided) for the connection ofany telephone service in the outback, irrespective oflocation.
There was much debate about the level of cross-subsidyto users in the rural and remote areas, figures varyingbetween $250 to $850 million. Whatever the real figure,it was considerable - and hidden from public scrutiny.That was not seen as a problem by the National CountryParty, although this was not a view shared by the LaborGovernment.
Despite the strong and rapid drive for deregulation oftelecommunications, the Government stopped short ofprivatising Telecom Australia. While the newTelecommunications Act 1991 (the second new Act intwo years) considerably liberalised the environment andprovided for the introduction of competition, it retainedthe public interest requirement that AOTC should bethe carrier of last resort.
The Government reaffirmed that the principalobligation for AOTC to provide and maintain basictelephone services to residential and business usersthroughout Australia, including the rural community,would remain. It recognised that this would be aCommunity Service Obligation, and appropriatearrangements would be explored to compensate AOTC.
With convergence, there will be so many new andinnovative tele-communications services available thatit will be almost impossible to define a "basic telephoneservice". The FCC found similar problems withdifferentiating between basic and enhanced services. InAustralia, the regulatory body AUSTEL recently issueda controversial opinion on what are basic carrier servicesand higher level services.
As more and more low cost tele-communicationsservices become available, the whole question ofuniversal service and equity of access will become opento debate. What will be the "basic telephone services"that AOTC has the obligation to provide under the Act?No doubt AUSTEL will be invited to provide anotheropinion!There will no doubt be many attractive and usefulinformation services competing on the market. Whilecompetition will keep the prices attractive from acommercial point of view, it will be interesting to seewhether community groups begin to lobby theGovernment to legislate for even greater access and ateven lower cost so that none in the community will bedisadvantaged or excluded.
With an abundance of service offerings at increasinglylower prices, it will be interesting to see whether suchpublic interest arguments carry much weight.
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7. Privacy Consideration
The greatest impact from the explosion in tele-communications services arising from convergence willbe on the privacy of individuals and organisations. Theintegration of advanced signal processing techniqueswith information systems and databases, accessedthrough an intelligent digital telecommunicationsnetwork provides an awesome capability.
Database security is an issue that has receivedincreasing attention. While we are all familiar with the"hacker" and the apparently world-threatening feats thatthey can achieve, such as getting into a Pentagondatabase, the impact of these events is minuscule. Butit is a great theme for an exciting movie and makes arattling good read in the tabloids.
The real damage is created usually by people alreadywithin an organisation - or those who have only recently"departed"! White collar crime is well established, andall countries are seeking innovative ways of dealing withit. Convergence will only add a further degree ofdifficulty to trying to contain such abuses, fraud andtheft.
All of the problems noted above relate to economicharm or monetary gain. By far the greater issue, and itspotential impact, is that of privacy. George Orwell's1984 was prophetic and the notion of "big brother"looking at our affairs is abhorrent to most people. Inmore general terms, it is about unauthorised access topersonal information, and an individual's right toprivacy.
In Australia, a few years ago the issue of the "AustraliaCard" for every citizen excited wide public debate. Theintensity of the debate significantly over-shadowedconcern about the economy and other catastrophes.The Government had no option but to back off. Andthat was before convergence had really taken off.
There have been other incidents which have causedeither annoyance or mild concern, and a mild elementof surprise. I am sure we have all received"personalised" junk mail inviting us to subscribe to this,or buy that, or support this worthy cause. Yet none ofus solicited that mailing. Because the "damage" was atbest irritation, most of us have just let it be.
There are organisations which make a lot of money outof selling "mailing lists". These come from electoralrolls, conference attendance lists, telephone books,surveys, credit card memberships, and even genuinemailing lists (the ones we actually subscribed to!) Wehave also filled in at various times an entry form for acompetition - a free flight, a new car, $1000 worth ofgroceries, lottery tickets, etc. There are no doubt otheravenues which would boggle the mind.
It all sounds pretty harmless, until we look deeper.Recently in the press in Australia there have beeninstances where confidential information on individualshas been bought from Government Departments bybanks and insurance companies, presumabiy to checkcredit worthiness or financial standing - but why didthey need medical histories? The inquiry revealed thatthe trade in confidential information was wellestablished and wide-spread.
To an extent, the individual's protection against suchabuse has been the poverty of our national databases.They were slow, localised, and often did not even suitthe needs of the organisation itself (because these hadchanged since the system was established). Most datain Government was held on file - the manumatic system.The effort required to correlate several sources ofdifferent data acted as a brake to runaway abuse.
That has all changed. The cu.t of computing andcommunications has halved every two years, while thehardware capacity of systems has quadrupled every twoyears (what is a "mini" today?). It has been estimatedthat the price per MIP has fallen from $250,000 in 1980,to $2,500 in 1990. Increased functionality, falling costsand rapidly expanding capacity are fuelling therevolution of convergence.
Most businesses are capitalising on these developments.In Australia, the Taxation Office has establishedcomputer-based lodgement of your tax return - to givethe client quicker service. All GovernmentDepartments are moving rapidly to install large,national databases.
With all that low cost functionality becoming rapidlyavailable, cross-referencing between databases becomesa simple exercise. The Tax Office already has statutorypowers to cross-check information such as interest anddividend payments with banks and financial institutions.Some people are already concerned that the existingprivacy safeguards are not adequate to deal with thechanging situation.
But the issue does not rest solely with Governmentswanting to extract accountability and revenue. Businessorganisations are also developing and enhancing theirinformation management systems to improve theircontrol and profitability. While in most cases thesetend to he local or regional systems, there is noconstraint on linking systems nationally orinternationally.
Because of various concerns about trans-border dataflows, copyright, and protection of intellectual property,some organisations have made the decision to locatedtheir central database in, for example, Hong Kong.Because of convergence and the availability ofenhanced tele-communications services, the location ofth' database is transparent to the users, wherever theymay be around the world.
With convergence there is an explosion in the numberand combinations of systems and integratedtechnologies which open the door to easily accessibleinformation management and transfer. I-7.,iman natureand native cunning will ensure that the types of abusesdiscussed above are unlikely to disappear. But theirpotential impact will be far greater as convergencegat hers momentum.
8. More Convergence
The phenomenon of convergence does not stop withtelecommunications and information technology. Forsome time now, there has been a growing convergencealso with broadcasting services. For example, televisioncan be broadcast "free to air" as a radiated service,distributed by satellite (and either received directly bydesign or "fortuitously"), or carried by cable IF to thehome.
This presents problems because in the public interest,Governments tend to have firm ideas about the role ofthe media in national development and culture. Theyare also aware of the compelling ability of television toinfluence the public's opinions, even about politics andpoliticians.
Consequently, broadcasting has been rigourouslyregulated - not only programs and viewing hours, butalso concentration of media ownership, eligibility for abroads~ sting licence, and broadcasting licenceconditions. In Australia, there are firm limits on levelsof foreign ownership, and cross-media ownership lawsapply.
The Broadcasting Act 1942 sought to regulate bothcarriage and content. By tightly regulating thetechnology and controlling the means of transmission,the broadcasting industry was kept separate and unique.There were policy objectives for broadcasting, such asthe promotion of diversity and choice, universal access,and a distinct national character. The Act also laiddown machinery (the Australian Broadcasting Tribunal)to regulate content and control ownership.
As technologies and broadcasting practices changed, theAct was constantly amended to close off loop-holes. Astechnology presented more and more intncate policychallenges, the Act finally ran out of band-aid solutions.Australia now has a new Broadcasting A t whichfocuses on services rather than technologies, and a newregulatory body is being established - the AustralianBroadcasting Authority.
The driving force behind these changes has beenconvergence. The technology used for broadcasting isno longer only broadcasting-specific. Satellites, forexample, have made a nonsense out of exclusivegeographic service areas which used to approximate toterrestrial transmitter coverage. To protect the serviceareas of existing broadcasters, the national distributionof television programs by satellite had to be encryptedto prevent unauthorised reception.
The Governmert was forced to agree several years agoto a satellite-delivered "non-broadcasting" pay televisionservice restricted to "pubs and clubs". There was noprovision for such a service under the old BroadcastingAct, so the service was authorised under theRadiocommunication Act 1983. However, theGovernment had no power under that Act to regulatecontent or ownership, so agreements parallelling therequirements under the Broadcasting Act werenegotiated with the operators.
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9. Pay-TV
The issue of Pay-TV has put considerable pressure onexisting free-to-air broadcasters, and the moratorium onPay-TV has now expired. Multipoint DistributionServices (MDS) provided further concern, be cause thecould offer limited "broadcasting" services (fur a fee)using frequencies that were not in the BroadcastingBands. Cable, however, was regulated under theTelecommunications Act 1975 and could not be used for"broadcasting" - or even for "narrowcasting"!
The Government has shunned Pay-TV for a number ofreasons, including the fact that there was considerableconcern about the possibility of "siphoning" - that a Pay-TV operator would siphon off the best programs thatwere currently being broadcast free-to-air, and thesecould then only be viewed for a fee. This would createa culture of "information rich" and "information poor",widening the divide in society.
With the deregulation of telecommunications and theselling off of AUSSAT Pty Ltd to the new competingcarrier, these concerns were put to the test. When thecompetition for the second carrier licence was falteringand it looked as if the revenue to be gained from thelicence and the sale of AUSSAT would fall considerablyshort of initial projections, the Government finallyagreed to permit Pay -TV and provided that this will bedelivered only by satellite as a DBS service.
The Pay-TV decision did not prevent the Kaloriconsortium from withdrawing, leaving HutchisonWhampoa as the surviving member to contest thelicence with Optus. Since then there has beenconsiderable argument and debate about the terms andconditions under which Pay-TV will be allowed, foreignownership limits, exclusivity period, number ofchannels, participation of the Australian nationalbroadcaster (the ABC) etc. Surprisingly, there has beenlittle debate about the use of optical fibre cable.
Following several public inquiries and reverseddecisions, the Government has now decided that Pay-TV will be delivered by digital technology. By waitingfor developed digital compression techniques, eachtransponder will be able to carry up to ten channelsinstead of the initially envisaged single channel.
While the arguments tend to focus on diversity andchoice, and dilution of ownership, there would seem tobe a more pressing reason for this decision. Given thesmall population of Australia and the high cost ofleasing a transponder (about $6.8 million p.a.), with noexclusivity penod and three or more licences to beoffered, Pay-TV would find it hard to he profitable. Topay $680k for leasing a channel instead of $6.8m,significantly changes the economics.
Digital compression technology suitable for Pay-TV isunlikely to be available until 1993/94. Meanwhile,AOTC (formerly Telecom) is continuing to upgrade itsexchanges to digital and install more and more opticalfibre cable into the local loop. It is also continuing withits trials of wideband services to the home - free to theparticipating householders, as it gains experience inhandling a range of digital services, including television.
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For a small but widely distributed population like inAustralia, such developments bring with them a numberof public interest issues. For example, Pay-TV viasatellite will cost the consumer some $800 for a"squarial" antenna and receiver, an installation fee(perhaps $250), plus monthly payments of around $40an outlay of around $1,530 in the first year. If therewere a viewer base of 300,000, this would equate to anational consumer outlay of around $460 million.
As AOTC is installing transmission and switchingfacilities for wideband services to the home as part of itsupgrading of tele-communications services, Pay-TVcould be provided at marginal cost. In addition, withthe huge expansion in mobile services and thecompetition for spectrum, the ability to take broadcasttelevision programs "off air" and deliver them via cableto the home presents an attractive option, particularly inthe major cities.
Such an approach would still leave over-the-airbroadcasting as the preferred approach for rural,regional and outback areas. In these situations,frequency congestion is not an issue, but the cost ofcabling to sparsely distributed households could heprohibitive.
Such decisions involve many trade-offs. Withconvergence, the separate communities oftelecommunications, information technology andbroadcasting are coming together. Each of these is alsoan integral part of the greater community and entitledto consideration by Governments on a national basis.
The public policy challenges this presents are many andcomplex. There are a number of legitimate butmutually competitive economic ends being pursued bythe various interest groups. The Government also hasto deal with the wider issues of Australian character,effectiveness in the use of national resources, equity ofaccess and implications of universal service.
Any decision made by the Government which mayadvantage one group, will immediately he seen asdetrimental to the aspirations of others. Formulators ofpublic policy in a time of economic downturn and rapidtechnological change face an unenviable task.
With convergence, the challenges are even greaterbecause the implications of what is unfolding are yet tobe fully understood. It underscores the way in whichpublic policy formulation is often depicted bypractitioners as the "dismal science" - having to makeimpossible allocations of limited resources between theinfinite needs and wants of the population.
By comparison, the complexities of the technologies ofconvergence are easy!
CANADA EMBRACESLONG DISTANCE COMPETITION
Laurence J.E. DunbarPartner
Johnston, Buchan & DalfenBarristers & Solicitors
Ottawa, Canada
1. ABSTRACT
This paper describes the evolution of competition in theCanadian telecommunications market culminating in the CRTC'sdecision in June of 1992 to permit public long distancecompetition. Economic and technical aspects of the CRTC'slandmark decision are examined as well as opportunities fornew carriers, resellers and hybrids.
2. INTRODUCTION
On June 12, 1992, the Canadian Radio-televisionand Telecommunications Commission (CRTC)released its long awaited decision on longdistance competition (Telecom Decision CRTC 92-12, Competition in the Provision of Public LongDistance Voice Telephone Services and RelatedResale and Sharing Issues).
In its decision, the CRTC approved anapplication by Unitel Communications Inc. toprovide a public long distance voice service incompetition with the regional telephonecompanies comprising Stentor (formerly calledTelecom Canada) which had enjoyed a monopoly inthe provision of MTS/WATS services until thispoint in time.
While the CRTC did not approve the terms andconditions of entry proposed by a secondapplicant (the BC Rail/Lightel (BCRL)consortium), it did indicate that BCRL and otherpotential competitors could apply forinterconnection on the same terms as approvedfor Unitel.
This decision represents a very dramatic changein CRTC philosophy since 1985, when the CRTCturned down a competitive long distanceapplication by CNCP Telecommunications (Unitel'spredecessor). At that time, the CRTC was notprepared to allow CNCP to take the risk ofentering the market on more onerous terms ofcompensation than the company had proposed andits business plan could accommodate. Now, inDecision 92-12, the CRTC has indicated that itwill leave it up to the shareholders of newentrants to determine whether they wish to takethe risk of entering the market in accordancewith the terms and conditions established.
The CRTC has also stated that it will also befavourably disposed to applications by newfacilities-based entrants, including "hybrids"who wish to provide long distance services usinga combination of their own facilities and leasedfacilities, or who wish to serve particularregions of the country or other niche market..
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In Decision 92-12, the CRTC has also madesignificant changes to the regulatory regimegoverning resale activity in a manner which
removes many of the distinctions between
resellers and facilities-based carriers.
Coupled with another important CRTC decision twodays earlier in which the CRTC decided that ithad to regulate resellers as carriers, littlenow remains of the sharp regulatory distinctions
between resellers and facilities-based carriersthat had previously existed. The CRTC has madeit clear that resellers may now cross the lineand make use of a combination of leased andowned facilities in hybrid networks. At ele
same time, the CRTC has permitted facilities-
based carriers to resell the MTS/WATS servicesof the telephone companies to augment their
networks. The CRTC wants the decision to leaseor buy facilities to be based on economic rather
than regulatory considerations.
While certain aspects of the CRTC's decisiondealing with the allocation of switchmodification costs and the level of contributionpayments (to subsidize local access) have beenappealed to the courts by the regional telephonecompanies, the main elements of the decisionstand unchallenged. Unitel began to offer itsnew competitive voice services in November of1992 and the new resale rules became effectivein mid-August of 1992.
This paper describes the evolution ofcompetition in the Canadian telecommunicationsmarket and provides highlights of the CRTC'slandmark decision.
3. EVOLUTION OF COMPETITION IN CANADIANTELECOMMUNICATIONS
The CRTC's decision to permit competition in theprovision of public long distance servicesshould be viewed in the context of a gradualevolution over the past 15 years from a neartotal monopoly environment to one in which mostaspects of telecommunications services are nowsubject to some degree of competition.
The CRTC has no statutory mandate under itsgoverning legislation (principally the 1906
Railway Act) to favour either a monopoly or acompetitive industry structure. The existinglegislation gives no clear direction in thisregard. This has left the CRTC, an independentregulatory agency, to determine the extent ofcompetition that should be allowed in the
Canadian telecommunications industry basedlargely on how it perceives the "publicinterest."
This has been an incremental process based onspecific applications by parties either seekingrelief from restrictive tariff provisions, orapplying for interconnection with the telephonecompanies' local exchange networks. In theformer case, the CRTC has relied largely on theprovisions of section 340(2) of the Railway Actwhich prohibits unjust discrimination or thegranting of undue preferences or advantages bycarriers. In the latter case, the CRTC hasapplied a test of whether interconnection is inthe "public interest." This gives the CRTC anopportunity to consider a wide range of factorsin assessing the impact of allowing
interconnection.
In practice, this has led to a situation inwhich the CRTC weighs the pros and cons ofintroducing competition on a case by case,
sector by sector basis. Th CRTC hhs describedits approach in the following terms:
The Commission wishes to emphasizethat, under the existinglegislation, it has no mandate tofavour either the monopoly or thecompetitive supply oftelecommunications services per se.In previous decisions with regard tothe private line, terminalequipment, enhanced services, mobiletelephone, and cellular radio-
telephone markets, the Commissionhas permitted various types ofcompetition to take place. Each ofthese decisions was based on anassessment that it would affordsignificant advantages to usersgenerally in terms of price andservice and that such advantagesoutweighed any potentialdisadvantages that might arise. Theunderlying regulatory approach was,and is, to weigh the potentialadvantages and disadvantages of anyproposal for liberalized entry andto seek to balance fairly the oftenconflicting interests of allconcerned, including the interestsof the various groups ofsubscribers, the carriers andcompetitors in a manner that is mostlikely to serve the public interestbroadly defined (Telecom DecisionCRTC 85-19, pp. 11 - 12).
A brief chronology of some of the significantmilestones in this evolution is presented below.
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1977 - Mobile Telephone Service: The CRTC struckdown as discriminatory restrictions in BellCanada's tariffs which prevented customers fromusing competitively supplied mobile telephoneequipment in association with Bell Canada'sautomatic mobile telephone service (ChallengeCommunications Ltd. vs. Bell Canada, TelecomDecision CRTC 77-16).
1979 - Private Line Interconnection: The CRTCapproved an application by CNCPTelecommunications (now Unitel) to interconnectits private voice and data networks with thelocal telephone exchanges of Bell Canadaenabling CNCP to offer dial-up access. (CNCPTelecommunications - Interconnection with BellCanada, Telecom Decision CRTC 79-11).
1979 Paging: The CRTC ordered Bell Canada topermit a competing paging company, Colins Inc.,to connect its paging terminal to Bell Canada'slocal exchange network for purposes of providingdial-up paging services (Colins Inc. vs. BellCanada, Telecom Decisions CRTC 1979-12 and 14).
1980 - Terminal Attachment: The CRTC allowedcustomer ownership and competitive provision ofboth single and multi-line terminal equipment,including key systems and PBX's. (Attachment ofSubscriber Provided Terminal Equipment, TelecomDecisions CRTC 80-13 and 82-14).
1984 - Enhanced Services: The CRTC allowed theprovision of enhanced telecommunicationsservices on an unregulated basis by non-carriers. This enabled service providers toresell basic telecommunications services in thecourse of providing some enhanced form ofservice - other than basic transmission service.(Enhanced Services, Telecom decision CRTC 84-18).
1984 - Cellular and ACC Interconnection: TheCRTC approved interconnection between cellulartelephone networks operated by Rogers CantelInc. and the local exchange networks of BellCanada and BC Tel. In the same decision, theCRTC approved similar interconnectionarrangements for other competitive suppliers ofconventional mobile radio telephone services.(Radio Common Carrier Interconnection withfederally Regulated Telephone Companies, TelecomDecision CRTC 84-10).
1985 - Local Area Networks: The CRTC allowedthe interconnection of privately owned localarea networks (LANs) to the public switchedtelephone network allowing dial-up communicationfrom private voice networks and both public andprivate data networks. This has led to limitedcompetition from some cable television companiesin the provision of local network services(Interexchange Comoetition and Related Issues,Telecom Decision CRTC 85-19).
1987 - Resale and Sharing: The CRTC allowedunlimited resale and sharing of telephonecompany facilities for the provision of dataservices, and limited resale and sharing for theprovision of voice services. Resale of WATS wasnot allowed and private lines could not be
resold on a joint use basis to provide MTSequivalent service to the public (Resale andSharing Interexchange Services, Telecom DecisionCRTC 87-2).
1990 - Resale of Private Lines: The CRTCliberalized acs resale rules to allow resale ofinterconnected private line services to provideMTS equivalent service to the public. However,
resale of WATS was still not allowed (Resale andSharing of Private Line Services, TelecomDecision CRTC 90-3). Resale of overseas privatelines on a reciprocal basis was also allowed in1990 (Teleglobe Canada Inc. - Resale and Sharingof International Services, Telecom Decision CRTC90-2.
1992 Public Long Distance Competition: TheCRTC allowed competing carriers to interconnectwith local telephone exchanges and toll officesfor the provision of competing MTS/WATS
services. The CRTC also removed the remainingrestrictions on resale activity (TelecomDecision CRTC 92-12).
4. THE UNITEL PROCEEDING
Unitel's application of May 16, 1990 commencedthe longest and most thorough telecommunicationsproceeding in Canadian history. By the time itwas over more than 50,000 pages of evidence hadbeen filed and 90 days of oral testimony hadbeen presented at regional and central publichearings.
In its application, Unitel promised to offerMTS/WATS services on a competitive basis to bothbusiness and residential customers and expandthe range of advanced network services availableto Canadian business users.
Unitel did not propose to build a duplicatelocal exchange network. It sought instead toconnect its long distance network via digitaltrunk connections to the telephone companies'class 4 toll offices in order to provideuniversal access to Unitel's service on day oneof service introduction. Unitel also requestedthe right to connect to the telephone companies'class 5 local offices, at its option. Unitelalso proposed to use direct access lines forconnectivity to Unitel's network by large users.Unitel proposed to use Common Channel SignallingNo. 7 (CCS7) to achieve a higher level ofefficiency in its network and to provideadvanced network services. It thereforerequested connection of its Signal TransferPoints (STPs) to the telephone companies' STPsusing standard interconnection protocols.
As mentioned above, the CRTC applies a publicinterest test in deciding whether to allowinterconnection of competing networks.
In weighing the public interest, the CRTC placesa wide scope on the test and considers anysignificant benefits or disadvantages that wouldarise as a result of the application before it.This includes those presented by the applicantand respondents and interested parties who make
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submissions to the CRTC or present evidenceduring the public hearing process.
In its public notice inviting public comment onUnitel's application, the CRTC asked interestedparties to indicate the advantages anddisadvantages associated with Unitel's andBCRL's applications in terms of their impact onthe following:
(1) the revenues of the respondent telephonecompanies;
(2) rates for interexchange services aad thepractice of route averaging;
(3) affordability and accessibility of localservice;
(4) regional differences and different classesof subscribers, such as rural, urban,residence and business;
(5) telephone companies' obligation to serve;
(6) non-respondent telephone companies andtheir subscribers;
(7) the long-run costs of supplyingtelecommunications services;
(8) the efficiency of telecommunicationsnetwork planning and design;
(9) service quality and choice, supplierresponsiveness, innovation, research anddevelopment, and supplier efficiency;
(10) international competitiveness of Canadianbusiness; and
(11) bypass of Canadian network facilities.
(CRTC Telecom Public Notice 1990-73, p. 10)
A central issue raised by Unitel's applicationwas the impact of long distance competition onlocal telephone rates. Historically, localrates have been set at a relatively low level toencourage subscription to the telephone systemand extend the universality of telephone servicein Canada. In order to accomplish this goal,public long distance services have been pricedwell above cost and have made a greater"contribution" to the cost of local loop plant,than has local service. Route averaged pricinghas also assured the availability of affordablelong distance services in more remote areas ofCanada where the cost of providing telephoneservice is greater. Again, value of servicepricing principles have led to a situation inwhich rural telephone service is considerablyless expensive than urban service, despiterelatively higher costs.
This system of price regulation has resulted invery high telephone penetration in Canada,approaching 98% - a remarkable achievementconsidering the geographically dispersedpopulation and the vast rural and remote regionsof the country.
Many of those who opposed competition in thelong distance market in Canada feared that itwould upset this rate structure and threaten theuniversal availability of telephone service ataffordable rates.
On the other hand, pressure had been mountingfrom business groups in Canada for morecompetition in the long distance market andlower long distance prices. Deregulation of thelong distance market in the United States hadbrought a lot of pressure to bear on therelatively high cost of long distance servicesin Canada. As telecommunications expendituresgrew to become a more important element in thetotal budget of businesses, this price imbalanceled some businesses to claim that they were ata competitive disadvantage in comparison withtheir American rivals in the North Americanmarket. The lack of service competition hasalso led to claims that Canadian business isunable to fully respond to opportunitiespresented by the advent of the information age.
For their part, some of the telephone companiesresponded to Unitel's application with proposalsfor "rate rebalancing" rather than competition.These plans involved the lowering of longdistance rates (principally for large volumebusiness users) and the raising of local ratesto bring them both more into line with theirassociated costs. The telephone companiesargued that competition would result in networkand system duplication that would be lessefficient than a restructuring of monopolyrates. They also argued that competition inlong distance services would lead to a reductionin contribution from long distance and anincrease in local rates.
In order to respond to these types of concerns,Unitel's application proposed that Unitel paythe local telephone companies "contribution"payments towards the cost of access facilities(local loops) used to access its service. Thesepayments would be in addition to any paymentsfor facilities dedicated to Unitel's use and inaddition to payments for switching and trafficaggregation functions performed by the telephonecompanies for Unitel.
It was Unitel's position that these"contribution" payments, coupled with marketstimulation and productivity improvements thatit said would result from competition in themarket, would ensure that local telephone ratesneed not rise as a result of its entry into thelong distance market.
It was Unitel's position that competition wouldresult in customers being more efficientlyserved at a lower cost and that customers wouldbenefit from more rapid introduction anddiffusion of new technology and services. In itsapplication, Unitel cited recent experience inthe United States, United Kingdom and Japan insupport of the proposition that competition hasresulted in lower prices, greater innovation andmore responsive service providers than existedunder the former monopoly regimes.
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The telephone companies countered this withevidence that their productivity, service andefficiency already exceeded that which existedunder the former monopoly regimes in these othercountries.
Unitel also raised the issue of Canada'scompetitiveness in the global economy. Unitelargued that in order to compete effectively,Canadian business must have the same freedomthat businesses 4n these other highly developedeconomies enj_., to control theirtelecommunications costs and to take advantageof productivity-enhancing telecommunicationsservices. As Canadian businesses become moreefficient, consumers will benefit from lowerprices for a wide range of goods and services,and Canada's competitive positioninternationally will be strengthened.
5. CRTC'S DECISION ON THE BENEFITS OFCOMPETITION
In Decision 92-12, the CRTC has stronglyendorsed a competitive industry structure in theCanadian long distance market and has expresslyrejected a regulated duopoly structure.
The Commission is in agreement withmost parties that increasedcompetition should not be based ona regulated duopoly marketstructure. In order to exploitfully the benefits of competition,the Commission considers that itwould be in the public interest toprovide a framework which wouldallow other applications forinterconnection by facilities-basedinterexchange carriers (IXCs) thatwould be subject to federalregulation, if the shareholders ofsuch applicants are prepared to
assume the risks and obligationsassociated with the terms andconditions set out in this Decision.Accordingly, the Commission hasindicated its willingness to orderthe BCRL respondents to interconnectwith BCRL, if BCRL wishes to enteron terms and conditions comparableto those approved for Unitel(Decision 92-12, at pp. 13 - 14).
In reaching this conclusion, the CRTC made anumber of key findings concerning the advantagesof a competitive industry structure over thetraditional monopoly structure.
Jong Run Costs: The CRTC rejected arguments bythe telephone companies that long run costswould be lower in a monopoly environment due toeconomies of scale and scope. It found that noconvincing evidence had been presented thatdemonstrated the presence of such economies inthe long distance business. The CRTC held thatany inefficiencies that might arise in the
initial stage of entry should be measuredagainst longer run costs and the potentialbenefits of competition.
.
The Telephone Companies' Reference Plans: The
respondent telephone companies had presentedevidence of their plans to reduce long distancerates in an extended monopoly environment, ifUnitel's and BCRL's applications were rejected.These "reference plans" were intended as a benchmark from which to gauge the applicants' case infivour of competition. The reference planstargeted rate reductions to larger businessesand were designed to move Canadian long distancerates closer to U.S. rates.
In assessing the reference plans, the CRTC found
that the telcos had overestimated future
productivity gains and underestimated futuretoll costs, as well as overestimating the rateof technological change. For these reasons, theCRTC found that the reference plans would notproduce the level of toll rate reductionspredicted, without an increase in local ratelevels. It also found that the other members ofStentor would not be able to produce the samelevel of toll reductions as Bell Canada
(approximately 40% by 2002).
Productivity: A lot of conflicting statistical
and econometric evidence was filed by the
parties respecting the impact of competition ontelephone company productivity. While the CRTC
had difficulty in isolating the impact of
competition on productivity, it did concludethat competition would lead the respondenttelcos to increase their efforts to minimizecosts and improve productivity. The CRTC has
assumed that competition will result in
increases in telco productivity of approximately1.0% over the period 1995 to 1998. While thisis only half the 2.0% gain projected by Unitel,the telcos had argued that their productivitywould decrease in a competitive environment dueto such factors as network changes, increasedadministration and lost economies of scale
occasioned by the advent of competition.
The CRTC's finding of a 1% productivity increasewas, however, very significant because it helpedto offset any negative impact on local ratesbrought about by Unitel paying a lower rate ofcontribution than the telephone companies (asdiscussed further below).
Non-Price Market Stimulation: The CRTC acceptedUnitel's arguments that non-price factors suchas increased marketing efforts, increasedcustomer awareness, more service options andincreased supplier responsiveness, would lead tostimulation of the overall telecommunicationsmarket. The CRTC has assumed that market growthcaused by non-price factors would increase by0.5% each year from 1995 to 1998 as a result ofcompetition.
Again, this finding had a dramatic impact on theCRTC's analysis of local rate impacts, since ithelped to offset the effects of Unitel paying alower level of contribution than the telephonecompanies.
Impact on Local Telephone Rates: One of themost important issues in this proceeding was theimpact that long distance competition would have
554
on local telephone rates. A great deal ofevidence was presented by the telephonecompanies relating to U.S. experience, and theshift of local access costs onto local telephonesubscribers through the subscriber line chargemechanism.
The CRTC specifically rejected the Americanmodel for imposing subscriber-line charges onlocal telephone subscribers.
The CRTC concluded that the level ofcontribution payments prescribed for competingcarriers, coupled with the other chargesprescribed for the recovery of start-up costsand transport costs, will result in a minimalimpact on local telephone rates. The CRTC wasalso of the view that any shortfall ofcontribution to local access costs would be morethan offset by increased productivity andincreases in the overall size of the longdistance market due to increased competitivemarketing efforts and the introduction of newservices.
Impact on Independent Telcos: In light of thefact that Unitel has undertaken to negotiateinterconnection arrangements with theindependents on terms that are similar to theirexisting settlement arrangements with themembers of Stentor, the CRTC did not foresee anysignificant economic impact on independents.
International Competitiveness. Rates. Choice.Supplier Responsiveness: The CRTC accepted theevidence of an unprecedented number of businessusers who appeared at its regional hearings.These business users had stressed thatcompetition was required to decrease telecomcosts, increase service options, and improveservice responsiveness. They argued that thisin turn would increase the internationalcompetitiveness of Canadian business.
The CRTC accepted their evidence thatcompetition will result in greater choice,supplier responsiveness and service diversity,particularly in the business sector and on highdensity routes, as a result of the repackagingand repricing of services in order to meet thespecific needs of a variety of users and usergroups. The proliferation of innovative pricingand service packaging, regardless of whetheraccompanied by the development of newtechnologies, was considered important bybusiness users appearing at the regionalhearings (Decision 92-12, at pp. 59 - 60).
Facilities Bypass: Thethat bypass of Canadianthe U.S. was continuing,curb the problem. Thecompetition would assistdifferential in Canadianrates, and therebyincentives for bypass.
CRTC accepted evidencetelecom facilities viadespite its efforts toCRTC has decided thatin lowering the currentand U.S. long distancereduce the economic
Route Averazing: The CRTC has maintained anobligation on facilities-based carriers (notresellers) to maintain route averaged prices forbasic MTS and volume discount services. Thiswill help ensure equitable treatment of
subscribers in rural and remote regions. At thesame time, the CRTC has acknowledged that"targeted volume discounts" will be a feature ofthe new competitive environment and that theintroduction of enhanced services maybe limitedto urban and high volume routes.
Quality of Service: The CRTC has discounted theevidence presented by the telephone companiesrelating the early U.S. experience withdivestiture and the introduction of competition.Since divestiture and balloting are not part ofthe CRTC's regulatory scheme, and since thetechnical problems associated with equal accesshave already been resolved in the U.S., the CRTCdoes not foresee a negative impact on servicequality. It has however expressed concernsrelating to the provision of competitiveoperator services. In order to address theseconcerns, the CRTC does not intend to permitcompetitors to provide pay telephone services,or have access to billing and collectiondatabases, until the CRTC has approved a
detailed tariff that addresses its concerns.
6. INTERCONNECTION ARRANGEMENTS
In its application, Unitel indicated that trunkside interconnection with telephone company tolloffices would be its primary method of access,and trunk side interconnection with select end-offices a secondary form.
The CRIC accepted both forms of access, andindicated in its order that Unitel may file arequest for interconnection with each of thetelephone companies at any time. In addition,the telephone companies are to provide line sideaccess if requested. Interconnecting circuitsare to be furnished at existing tariffed rates.
Signalling: Both applicants requested CCS-7-based interconnection, where available.Indicating that it views CCS-7 as the "newsignalling standard," the CRTC supported theapplicants' position. IXCs will be allowed tointerconnect their STPs to those of thetelephone companies via CCS-7 gateways. Wheretelephone company switches are not equipped withCCS-7 (eg. BC Tel GTD-5 switches), MF signallingis to be provided.
equal Ease of Access
Both applicants requested "equal ease of access"enabling "1+" dialling with pre-subscription,and "10XXX" dialling for casual calling. Theapplicants suggested that a centralized database(SCP) approach, rather than the U.S. switch-based Feature Group D (FGD) approach, might beused to implement EEA. An interim dialling planof "1+950-0XXX" access, based on FGB, was alsoproposed.
The CRTC supported the applicants' request forequal access, indicating that it expects alltelephone companies to provide it in a timelyfashion. The CRTC determined that FGD,augmented with CCS-7 where available, should beused initially for equal access, as it was notsatisfied that cited benefits of the SCP
555
approach could L.! a,bieved. FGB is to be usedas an interim arrang=ment wherever FGD cannot beimplemented by the time the applicants desireinterconnec ion. DMS-10 and analogue switcheswill not need to be modified for FGD.
The telephone companies were directed to fileproposed availability intervals by switch typefor the implementation of "1+" and "1+950"access.
Operator Services: The CRTC approved Unitel'sproposal to offer operator services tosubscribers in accordance with the pre-subscribed carrier of the originating line.Unitel or other IXC operator service tariffswill require approval to ensure adequateconsumer protection in respect of rates, accessand confidentiality of consumer information.Telephone company proposals for "Billed PartyPreference" (BPP), wherein the operator is
determined by the billed party rather than thecalling party, where rejected by the CRTC due tothe magnitude of projected costs and uncertainavailability.
Pay Telephones: The CRTC approved Unitel'sproposal to connect long distance pay telephonesvia DALs to its network. The networks of allIXC's and telephone companies are to beaccessible from any party's pay telephone.
Access to Databases: The CRTC denied Unitel'srequest to access telephone company calling carddatabases in order to honour non-Unitel callingcards. The CRTC agreed with the telephonecompanies that calling cards can becharacterized as a competitive long distancetool, and accordingly did not agree that denialof accese would be unduly discriminatory.
The CRTC approved Unitel's request for access totelephone company line information databases(LIDBs) for verification of location and creditstatus of casual callers.
Billing and Collection Services: Unitelrequested that the telephone companies providebilling and collection for casual callers andcalls charged to a line not pre-subscribed toUnitel. Notwithstanding telephone companyoppositicn, the CRTC approved Unitel's request,noting that it would exercise sufficient controlover IXC rates to ensure unreasonable charges donot arise. The CRTC agreed with Unitel thatrefusal to provide access to billing andcollection services that the telephone companiesmake available to themselves by virtue of theirlocal monopoly position would constitute anundue preference contrary to section 340 of theRailway Act.
6.1 RECOVERY OF START-UP COSTS
Start-up costs reflect the switch modificationand other initial costs that will be incurred bythe telephone companies to provideinterconnection (both "1+" and "1+950") to IXCs.
In the proceeding, Unitel had argued that start-up costs should be borne by the general body ofsubscribers. The telephone companies arguedthat since start-up costs are causal to entry,they should be borne by the IXCs.
The CRTC determined that start-up costs shouldbe allocated among IXCs and telephone companiesbased on the CRTC's projection of theirrespective long-term market share. Accordingly,30 percent of start-up costs will be recoveredfrom IXCs over a ten-year amortization period.The following per minute charges will apply toall trunk side access minutes that originate orterminate on the telephone companies' networks:
Figure 1
tell $0.0011
B.C. Tel $0.0017
Island Tel 60.0010
MT6T 50.0020
NB Tel $0.0020
Nevfoundlend Tel 60.0013
6.2 RECOVERY OF ONGOING COSTS
Ongoing costs include switching and trafficaggregation costs, customer and operatorservices and carrier billing functions.
While accepting that switching and aggregationcosts are distance-sensitive, the CRTC hasadopted a single rate for access and egress tothe telephone companies' networks since a singlerate is less complex to administer and willfurther promote the roll-out of competitiveservices to rural and remote areas. The initialrate set by the CRTC is $0.011 per minute fortrunk side access. Initially, this chargeincludes all associated switching, transport zadsignalling functions performed by a telephonecompany at the originating or terminating end ofa call, including:
(a)
(b)
(c)
(d)
(e)
(f)
(g)(h)
(i)
hardware answer supervision;delivery of calling line identification;casual calling;pay telephone access;busy line verification;barge-in services;directory assistance;billing and collection services; anddatabase queries/access.
The CRTC indicated that it expects the telephonecompanies to develop unbundled rates for each ofthese services over time.
6.3 CONTRIBUTION PAYMENTS
Contribution payments refer to payments made bycompeting service providers to help off-set thecost of non-traffic sensitive access costs(primarily related to local loops). Theseaccess costs differ for each telephone companyand are calculated using the CRTC's Phase IIIcosting methodology.
556
A lot of time in this proceeding was devoted tothe issue of whether new entrants should pay thesame level of contribution as the incumbenttelephone companies, or some lesser amount.
In its decision, the CRTC has opted for Unitel'sproposal to pay contribution based on the amountof foregone contribution that arises as a resultof its entry. Under this approach, Unitel willpay a sufficient amount to maintain local ratelevels rater than paying the same rate perminute as is imputed to the telephone companies.
Contribution Level: Using these principles, andits estimate of market size and relative marketshares, the CRTC has derived a per minutecontribution charge for each of the respondenttelephone companies. This varies from $0.05446per minute for Bell Canada, to $0.08163 forMT&T.
These rates are then translated into a monthlyper access trunk calculation, based on 7000minutes per month per trunk. The CRTC has thenestablished different rates depending on thesize and efficiency of various access trunkgroups.
The initial monthly contri' ution charges fortrunk-side connections to each of the sixrespondent telephone companies are set forth inFigure 2.
Figure 2
Per Circuit Contribution [barge
No. ofCircuits
Bell IC Tel IslandTel
MT6T NB Tel Nfld Tel
1 - 3 $ 35 $ 40 $ 35 555 $ 45 $ .0
4 - 6 115 125 115 180 150 130
7 9 165 185 165 260 215 190
10 - 14 205 230 205 325 270 235
15 19 240 270 240 375 315 275
20 - 29 270 300 270 425 355 310
30 - 39 300 330 295 465 390 340
40 - 49 315 350 310 495 410 360
50 - 74 335 370 330 520 435 380
75 99 350 390 345 550 460 400
100 Plus 370 415 365 580 485 425
These charges are payable on all"interconnecting circuit;", which generallyrefer to the trunks that connect the IXC'snetwork to the telephone companies' class 4 orS switches.
The CRTC's rationale for expressing contributionin terms of monthly trunk charges was to achieveadministrative efficiency and to encouragecarriers to provide residential services in off-peak hours.
Contribution Discount: The contribution ratesset forth above embody a discount of 255 off therate that an IXC would otherwise have to pay.
$
This discount is intended to offset theadvantages that the incumbent telephonecompanies will have over new entrants including1+ dialling, market coverage and control of thelocal network. This discount will be eliminatedover a six year period based on the followingschedule:
1993 - 25%1994 - 25%1995 - 25%
1996 - 25%1997 - 10%1998 - 0%
Feature Grout, A: The contribution ratesspecified above apply for 1+950-XXXX access andequal access, which will not be availableimmediately. In the meantime, Unitel may alsoavail itself of FGA (line-side) access at a 15%discount off the contribution rates cited above.
7. BCRL AND OTHER NEW ENTRANTS
BCRL had applied to the CRTC to provide acompeting long distance service in BritishColumbia, Quebec and Ontario. It had proposedto use a combination of its own facilities andother carriers' facilities in its network. BCRLproposed to pay contribution of $200 per IXcircuit - the same level as was payable byresellers at the time that BCRL filed its
application.
While the CRTC rejected BCRL's proposal to paythis lower level of contribution, it did notreject market entry by BCRL. Instead, the CRTChas indicated that BCRL may enter the facilities
market if it is prepared to pay the same levelof contribution, abide by the same terms andassume the economic risks of entry.
At the same time, the CRTC has indicated thatother companies may apply to enter the market onthe same terms. The CRTC appears willing toallow entry on a hybrid (facilities/resale)basis and on a limited geographic basis as wellas on a full service national basis. The CRTCclearly envisages a competitive market with avariety of carriers serving a variety of marketsegments or regions.
8. RESALE AND SHARING
As mentioned above, the CRTC has also totallyoverhauled its resale and sharing regime in
Decision 92-12.
The CRTC has removed its previous restrictionson the resale of WATS and other discount longdistance services offered by the telephonecompanies. This means that, as a general rule,all telecommunications services or facilitiesmay be resold as part of a reseller's network.The only restrictions that remain relate to theprovision of local pay telephone services andthe use of 800 service to originate MTS/WATStraffic in areas outside the CRTC'sjurisdiction.
Resellers are now also permitted to build theirown transmission facilities to augment their
557
resale network so the new regime picvidesresellers with more flexibility to configuretheir networks in a cost effective manner.
The CRTC has also altered the obligation ofresellers to pay contribution for access andegress to loci' exchange networks. The newcontribution regime for resellers is verysimilar to the regime for facilities-basedcarriers described above. Contribution is
levied on "interconnecting circuits" thatconnect a resellers' switch or facilities to atelephone company's central office or centrexswitch. The main difference is that resellerswill enjoy a discount off the contribution ratepayable by facilities-based carriers.Resellers' contribution payments will start outat 65% of the rate set for facilities-basedcarriers, rising by 5% a year to 85% in 1997.This discount is in addition to the discountenjoyed by facilities-based carriers in thefirst five years of operation and is intendedboth to cushion the impact of imposing higherlevels of contribution on resellers and offsetthe effects of an inferior form of networkaccess. Notwithstanding these discounts,resellers now find themselves payingsignificantly more contribution now than theydid under the old resale regime.
As in the case of facilities-based carriers, nocontribution will be payable when direct accesslines are used for interconnection.
Although the CRTC's decision assumes that hybridcarriers might want to obtain trunk-side accessand avail themselves of an equal access regime,
the decision is silent as to whether resellerscan avail themselves of the same opportunities.The CRTC has recently convened a publicproceeding to consider this issue. It appearslikely however that resellers will be given thisopportunity since most of the other distinctionsbetween resellers and facilities-based carriershave been removed. This would be consistentwith the CRTC's desire to allow all carriers toconfigure their networks in the most cost-effective manner possible and to compete for thecame customer base.
Resellers have also made progress in otherrecent proceedings before the CRTC in obtainingAnswer Supervision and ANI.
All of these changes have forced resellers toreconfigure their networks in the past fewmonths to take advantage of the newopportunities available and to accommodate thehigher contribution payments on "interconnectingcircuits."
9. CONCLUSION
Decision 92-12 represents a dramatic departurefrom prior CRTC policy. The CRTC has embracedcompetition in the long distance market andclearly envisages a competitive marketconsisting of carriers, resellers and hybridsmaking the best use of all network technologiesand services available. New facilities-basedcarriers will be permitted to enter the marketon the terms established for Unitel.
NETWORK INTERCONNECT IN NEW ZEALAND
Mr Ainsley van CuylenburgCLEAR Communications LimitedAuckland New Zealand
1. Abstract
This paper overviews the technical aspects of interconnect with the two currenttelecommunications operators in New Zealand: Telecom Corporation of New Zealand and CLEARCommunications Limited. The telecommunications environment in New Zealand is among themost deregulated in the world and this creates special challenges for prospective serviceproviders. General conclusions regarding network interconnect are drawn as a result of CLEARcommunications interconnect negotiations with Telecom.
2 Introduction
The Telecommunications industry in New Zealand isregulated only by the commerce act and the fair trading act.There is currently no independent regulatory authority towhich potential service providers may apply for advice (oreven a final decision) concerning aspects of interconnect.
Given such an open telecommunications market, how does apotential service provider get started?
The generic requirements for network setup by a prospectiveoperator as a whole are developed, including major activitiesand consideration of their time sequence. These arepresented by means of work breakdown structures and sub-tasks detailed below the main network design andoperational tasks. Network design encompasses start-upactivities such as site development, linking, transmission,switch selection, implementation management and growthstrategies. Operational requirements, examples of which arepersonnel, operational philosophy and marketing strategies,are discussed. Comparisons are made between theinterconnect requirements of the two current nationalnetwork operators, Telecom Corporation of New Zealand andCLEAR Communications Limited. These include details ofrequired responses to Telecom's Permit to Connect (PTC)documents , CLEAR Communications' requirements andnetwork commissioning tasks (eg testing, interfacetesting).
General conclusions concerning time frames and sequence ofevents for prospective network operators are drawn. Thepaper concludes with a summary of the steps involved innegotiating and implementing technical and omationalinterconnect agreements in New Zealand.
3. Overview of Project
The major activities required to set up a network operator inNew Zealand are given in figure 1.
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NetworkOperator
Inviementetko
InitialNetwork Development
Soon Develogerert - &Orme 9,eseseylreio - Growth StategyNetwork hierecemirtNetwork ceskr;Swoch DeemheerearnectGrowthIrryiirrontationNang were
Operation,
Oporasond PtiltecphyNominalMLMirkelirgF11111011
Ikainueo Develqinwe
Figure 1: Overview of major activities to set up a networkoperator in New Zealand.
The initial network work package is concerned withimplementation of a network that meets the objective of theinitial business plan while building in the capability fornetwork growth. It is concerned with development of theswitch sites, switch selection, linking, network design,growth strategy compliance and initial interconnect.
Similarly the operations package is concerned with providiligthe administrative and operational systems to ensure smoothstart-up and operation of the network. Important factors arethe operational philosophy, M.I.S. and billing systems,marketing, finance etc.
There is considerable interdependence of these workpackages. The initial business plan and growth strategy areclearly early elements required, but these are required to beconsidered in terms of the initial and subsequent networkdesign criteria, not the least of which is the localinterconnect constraints.
While there are many diverse activities requiring detail forthe project to be successful, the single element that
t.;
Work towards the content of this paper was performedby Teleconsultants NZ Ltd
differentiates network operator start-up in New Zealandfrom anywhere else is interconnect. The technical aspectsof interconnect are focussed on specifically in this paper.
4. Technical Requirements for Interconnect
Currently, network interconnect in New Zealand falls intotwo major categories: interconnect with the Telecomnetwork and interconnect with the CLEAR network. Theseare examined separately below, with later consideration ofthe prospective network operator's internal communicationsan _ typical response format.
4.1. Tekcoar hsterconxed
Negotiating the technical aspects of interconnect withTelecom requires complete responses to a selected set ofTelecom's PTC documents (see figure 2). The process is asfollows:
Determine the ITC documents that require response.Develop responses (including detailed transmissionlevel plans).Submit responses to Telecom's Access StandardsDivision (TAS).Negotiate to reach agreement on any outstanding issues.Sign off agreement with TAS.
There are in excess of 20 inter-related PTC documents, onlya few of which arc shown in figure 2. For convenience,electrical safety interconnect requirements (Telarc approval)have been differentiated from transmission and signallingrequirements. The responses to the PTCs must comprise astatement of compliance to the individual clauses, and in theevent of non-compliance, an alternative response fornegotiation with TAS.
Depending on the extent of non-compliances, modificationsmay be required to the prospective operator's equipment. Inthat event, 'type' testing of modified equipment according toan agreed schedule is required. This is shown under thecommissioning heading in figure 2.
4.2. CLEAR Interconnect
This necessitates complete signalling and transmission plans,satisfactory completion of which will result in sign off byCLEAR. The extent of the plans will depend on the type ofinterconnect sought.
As with Telecom, modifications will require 'type' andinterface commissioning testing as shown in figure 2.
559
interconnect
CI.EARImmo:met
Mr.. Tm. U.Tme Tom.CUM,
..11114CONTIMM
FIC ICQ 6.4M1.11.4. WM. 111.........4T........4 IM.
-1.4.4. TomC.........C........0 T..4.
FTC IVY 1....... Cm..MC IC/ 0./.1.m 0.......1 LI W.ITC MN 1........11.......4
T......14.4.4.OMR- a TXIs.
FTC DI .71.....11.......- cart
Figure 2: Work breakdown structure for Telecom andCLEAR interconnect.
4.3. Network Operator Internal Conununtc' idioms
In addition to interconnection with the existingcommunications networks, the new service provider willneed to provide its own internal communications. Thecarrier will fmd it advantageous to interconnect to theTelecom network for this purpose. In addition to the FTCdocuments shown in figure 2, a response to PTC 207(General Requirements for PABX Equipment) is required.
Satisfactory response to FTC 207 will allow the operator touse its exchanges as PABXs connected to Telecom at thelocal exchange (LX) level.
4.4. Typical Response Format
The format of the Telecom responses iG the FTC documentscould then be as follows:
FTC approval for connection of the exchangeequipment to Telecom's as a PABXStatements of Compliance to FTC 207 (note thatPTC 207 refers to PTCs 107,108 and 109 listedin figure 2).
Responses to PTCs as shown in figure 2(including a detailed transmission plan)This is covered by a Statement of Compliance toPTC 301, which also refers to sections of PTC107,108 and 109. A typical detailed responseformat could be:
Interface Description: A description of allterminal and trunk interfaces including thelimits as a function of loop length of sendlevel ratings (SLRs), receive level ratings(RLRs) and sidetone masking ratios(STMRs), together with required balanceimpedances.
Network Topology: A generic descriptionof the network topology emphasising theinterfaces required.
Network Topok,zr: A generic descriptionof the network topology emphasising theinterfaces required.
Transmission Diagrams and Matrices:Diagrams showing SLR's and RLR's(including limits for loop lengths) for everytype of propose connection.
Echo Control: A description of echocontrol intentions for national andinternational circuits.
Quantization Distortion Unit (QDU)Assignment Plan: Diagrams showing theworst case QDU assignment between thenetwork operators. This is relevant tolong-haul national, international and callsinvolving private PABX networks usinglow bit-rate signalling.
The process is complicated by service offerings such asCentex. This service requires a variety handsets operatingat widely varying distances from the exchanges and hencecareful consideration of transmission level and loop lengthlimits. For sign off in this case, Telecom requires completeloss-level matrices showing pad values and transmissionlevels with respect to the port test reference point (FTRP)not only for every combination of interface type, but also allloop limit extremes.
5. nodulous
The deregulated Telecommunications industry in NewZealand necessitates significant up-front work on the part ofprospective network operators requiring to interconnect withthe Telecom network. General Conclusions are as follows:
The generic sequence of events for networkoperators contemplating start-up in New Zealandin
- initial business plan and growth strategy- initial network design- initial operations plan
560
A fundamental part of the network design is theinterconnect negotiations with existing operators.An elapsed time of 6 months to 1 year frominitial concept to finally certifying equipment forinterconnect is not unrealistic. The overall planis best arranged to start interconnect negotiationsearly to avoid their being on the critical projectpath. Interconnect may have significant cashflow implications if it is in the critical path.-Specific requirements to be met for the existingnetwork operators in New Zealand are:
Telecom,: Formulate statements ofcompliances to selected PTC documents.This may require re configuration or evenmodification of the prospective operatorsswitches or equipment for sign off by bothparties.
CLEAR: Provide satisfactory transmissionand signalling plans for sign off.
-Resolution of disputes concerning technicalissues is left to the prospective operatorthemselves and may be done either bynegotiation leading to sign off or by legalrecourse against the Commerce or Fair Tradingacts, the latter being time consuming andexpensive.
-The effectiveness of early negotiation may beenhanced by the use of independent, unbiasedparties familiar with interconnect requirementsin New Zealand, thus minimizing recourse to thelaw.
Determining Optimal Supply Level of Switching Systemsand Local Cables An Inventory NIodel
Kyu -Tack Nam and ito - Sang LeeKorea Telecom Research Center
Seoul, Korea
1. Abstract
The purpose of this study is to find out theoretically the optimal supply interval andthe optimal supply quantity of a switching systems and local cables for each end office.The methodological tools applied are the inventory models such as Economic OrderQuantity(EOQ) and Dynamic Lot Size(DLS) and the simulation. Simulation is used intwo directions. One is to calculate supply interval with minimum cost by each endoffice(SIMULATION I , the other is to find out a fisied supply interval with minimumcost applying to all the end offices(S1MULATION
2. Introduction
To solve the ,hr, nic backlog of telt:plm( shortage inKorea. Korea Tele, had started its massive supplyof telephone lines and switching system twin the early1950.4 under the so-called the sort, the better' policy.'I honks to its dedicated fiorts over years. the Koreantel sector has witnessed a leap-frogdevelopmept, resulting in a complete elimination ofthe backlog I't the end of 1980s. I lowcver as suchsupply driven investment policy used to bring, theover Investment in plant has come Up as a newproblem in the early 1990s. Under thesecircumstances, Korea Telecom felt a strong need toimprove its tillrent investment policy. especiallystarting Irons the metric-lent suppls 01 switchingss stems and local cables for its more than 230 endoffices. 1 he purpose of this study is to find outtheoretically the optimal supply interval and theoptimal supply quantity of a switching systems andlocal cables for each end office.
1. K I's Facility Supply planning
3.1 Switching System
%%Then e\istmg switching svctem hni s of an end-officeevaluated of (1'-1) cal end are not es, pected tomeet the quontits demanded until March of (1 411
ear, it still be -.Clef led as one of al0Se end office. lu1%111(1 Idellities still he supplied Here. ospiesents thetear in which locking end- di), es are planned to besupplied with to, dines With the data of forecasteddemand and (iikting switching system lines, thequantity and inter% al of supply to the lacking end.offices will he determined to the los el suit I( mg demandup to IN months alter the completion of installment.Installation is completed two inonths hetore theestimated shortage tune the minimum supply unitlc MO lines.
2 I ocal Cable
As with the ((Ise of switching system, .vhen feedertattles of an end-0111( e es aluated as lit s ear end
561
cannot meet 1.41 times the espected demand of (1') yearend, it will be sole( tea as one Of these end offices to whichcables will be supplied '-',upply interval of ; years isapplied if anti' lit supplied for IR years averageannual increase tote 01 demand is less than 11'.;., and 1yea]. for more than II': According to the above tut,the ffilaillit heillg supplied till he 1.43 times more thanthe quantity dimanded during the &Lei mined supplyint, rval. I he multiplier(1 411 is derived from the Usagerate of feeder:- which is assumed to he -0" d /0.7 = I 41i.
4. 'I he Niodels
As the setup cost and the oioportunits cost 01 theallowance facilities are in a trade-off relation, and sincewe assumed that the deterministic demand during theplanning Pc!,,,,!, is 1...no,\n, tile optimal ordering idleand quantity are obtained 0) deterministicinventor model with no shortages In this study.ELanomfe Ordering Quantity(FOQ) \lode] and i)vna trioLot Si/e(l)1,S) Model are discussed.
4.1 Fionomic Order Quantity(FOQ \ lodel
Tlw basic concept of the FOQ model is the balancing oforder cost and holding cost According to the concept,we can find the ordering quanta% and reordering pointwhere the total cost of the above two is nurunnied.There are two appro( hes to the FOQ problem. one is a
analysis and the whet is the pt esent value ofdiscounted cos: ,vet an infinite pet hid hi this studs, thecos cr tlassiial anOIV!,IS is used. snite the P. an
nnaltl Of the Other MatherrlatiitinV
Supposi. [hot constant annual demand rote(d), orderingcost pet t ycledi.). unit sortable k 0,4(0 Ond unit holdingCost pet year(11) are given It tql is order quantits at otune and ttit is annual quontits demanded, then thecirclet cycle is q/d, and the total cost per cycle is as
k 4 sq h111,2)1.q/cii (1)
Foch item M the ahoi e 0\ pi ession relates to orderingcost, variable cost, and inventory holding cost,
BEST COPY AVAILAM,E
respectively. Therefore, if we divide the total cost inan order cycle by order length(q/d), then, the annualtotal cost can be obtained as follows;
CU(q) = + vq + hq72dJ/[q/dI= kd /q + vd + hq/2 (2)
The expression(2) is a convex function and CU(q) willbe minimum where dCU(q) /dq equals zero. Let thispoint be q*, then
2kd (I* 2kt =
H hd
(3)
If q" is substituted for q in (2), we get minimumannual total cost CU(q"). The usefulness of the FOQmodel in the real world is doubtful because it isunrealistic to assume that demand rate(d) is constantand the cost parameters(k,h) are known. But over aconsiderable range, the total variable cost curve is fairlyflat at the optimal point, and within a range of 0.4 to 2.5times the parameter, the total variable cost changes by lessthan 11%. Though these parameters are difficult tomeasure exactly and errors occur, If and when measuredthe usefulness of EOQ model is not diluted if exact valuesof parameters are not available and since the objectivefunction is insensitive to parameters. This is anadvantageous property of applying EOQ model to the realworld.
4. 2 Dynamic Lot Size(DLS) model
In EOQ model, demand rate is assumed to be constantwhereas in DLS model, every demand in planningperiod is deterministic and is allowed to vary from periodto period. Let
n = planning period= inventory at the end of period i
d, = demand during period iX, = ordering quantity in period i
he given, then we can formulate DLS model asfollows;
Min E k,(X,)+11(1,) I
s.(.
+ X, I = . 1= I. 2. .nX > O. I
hoe. k iN ) = k8 (X ) 8 (X)=1.X.>((-,. tt .
1 he objective function is meant to minimiie the orderingcost and holding cost, and the constraints indicate thatthe ordering quantity is balam vd to equal inventory anddemand I he formulation is solved to be transformedinto Integer Programmingtll'i problem by changing theordering cost term
562
4.3 Simulation
In this study, simulation model is also used for thepurposes of testing the fitness of the mathematicalinventory model and examining the current supplymethod. Simulation model evaluates the output of thesystem with predetermined values of decision variableswhich minimize the objective function.
5. Cost Analysis
The critical parameters in EOQ, DLS and Simulationmodels are ordering cost, (k), and annual holding costper unit, (h).
5.1 Cost Analysis of Switching System Construction
Most of the cost incurred in equipping switching systemsis construction cost, material cost and planning cost.Construction cost is divided into fixed cost and variablecost by using simple linear regression. Material cost isincluded in variable cost. Actually, it is the value of totalmaterial cost divided by total lines supp' . from '89 to'91. Planning cost is included in the fixed is(. All thefixed costs are ordering cost, while the variable costsare unit holding cost.
The ordering cost which is fixed construction cost plusaverage planning cost is 39,683 US dollars whereas unitvariable cost which is unit variable construction costplus I. nit the material cost is 210US dollars. Multiplyingunit variable cost by cost of capital, 5.42%, leads to unitholding cost, 11.4US dollars.
5.2 Cost Analysis of Local Cable Construction
For local cables and conduits, ordering cost is obtained bysumming up fixed construction cost, average planningcost and average compensation cost while unit variableconstruction cost and unit material cost make up unitvariable cost. Therefore, unit annual holding cost isobtained by multiplying unit variable cost to the capitalcost, 5.42%.
5.3 Cost of Capital
Cost of capital is the minimum required or expected rate ofreturn which a capital supplier wants for the capital heinvests. The cost of capital in this paper meansweighted average cost of liabilities and equities.
5.3.1 Interest
Interest is defined as the average real interest after tax. Inorder to get the interest expense, nominal debt cost shouldbe calculated. It is an average of each item comprisingdebts weighted by the ratio of each item to the totaldebts. The nominal interest on debts is obtained bydeducting income tax rate considering tax credit byexpense recognised from interest. 1 he expected inflationrate is taken into ocobunt to get the real interest expense
I iabilities in this piper are overdraft, short-term debt,current portion of long-term debt, long-term debt inloreign currency, customer credit and corporate bonds,while nominal interest rates are interest Sc discount, and
interest on corporate bonds. The customer credit accountwhich is a debt involving no interest is a major factor tolowering the interest expenses since it accounts for mostpart of the liabilities. The real interest rate of KTestimated in this way is -6.5q .
5.3.2 Cost of Equity
Cost of equity is a rate of return required for capitalequityholders' pay. As KT has not yet been privatized,the ratio of net income to capital is regarded as the cost ofequity. Capitals include, paid-in capital, capitalsurplus, legal reserve, and beginning retained earning,whereas net income is the one before tax. The estimatedcost of equity is 28.31%.
5.3.3 Weighted Average Cost of Capital
Cost of capital which is the weighted average of interestrate and cost of equity is 5.42%.
6. New Facilities Supply Planning
6.1 Various Alternatives
6.1.1 EOQ Model
According to the equation (3), the optimal supply interval,t*, can be computed. As the quantity demanded of eachend-office is different, t* of each end-office is alsodifferent. However, the quantity supplied variesaccording to the quantity demanded during the calculatedsupply interval t* in order to prevent a backlog.Consequently, the supply interval of a certain end-officeis fixed but the quantity supplied varies in accordancewith the quantity demanded in each year.
6.1.2 Dynamic Lot Size Model
The supply interval and the quantity in DLS model aredifferent by end-office and supply time. The demanddata used in the DLS model are monthly under theassumption that demand rises at the same rate in eachmonth. Therefore, annual holding cost is also convertedinto monthly data.
6.1.3 Simulation I Simulation for Supply Intervalby End-office
In applying EOQ model the quantity supplied is theamount corresponding to the quantity demanded (notfixed demand, d, but variable, di) for the optimalsupply interval, t*, which means t* may not be theoptimal supply interval representing the minimum cost.With the same cost function as the one in EOQ model,we get the optimal supply interval with the minimumcost changing supply interval by 1 month starting from 4months to 96 months.
6.1.4 Simulation 11 Simulation for a Fixed SupplyInterval Applicable to All the End-offices
Simulation ands the fixed supply interval for all theend-offices with the minimum cost, changing the supplyinterval by 1 month starting from 6 months to 96 monthsby using the same cost function as FOQ
563
6.1 5 Current Planning Method
order to compare with other alternatives, we computedthe cost by applying the current supply interval,which is fixing 18 months for all the end-offices.
6.2 Results of Analysis
6.2.1 Switching System
<Table-1> shows the result of computation for eachalternative.
<Table-1>AVERAGE ANNUAL COST FOR SWITCHINGSYSTEM BY ALTERNATIVE
(unit : tnii nn US dollar)
DLS Simulation I I Simulation 2CurrentMothod
18.3 I 21.5 21.9
AverageAnnual 18.7Cost
17.9
As shown in <Table-1>, the cost when using DLS,Simulation, EOQ model is much smaller than using thecurrent one. In other words, using supply intervalvarying according to demand pattern of each end-officeis more efficient than applying a fixed supply interval forall the end offices.
However, the difference of cost between the c rentone and other alternatives is not as much as we haveexpected. Simulation which applies the fixed supplyinterval of 1.33 year (about 16 months) is similar to thecurrent cost. It is also noted that EOQ model is similar toSimulation cost.
6.2.2 Local Cable
Using the same method as switching system, averageannual cost for local cable is shown by alternativ.,s, in<Table-2>.
<Table-2>AVERAGE ANNUAL COST FOR LOCALCABLE BY ALTERNATIVE
EOQ DLS
(unit : !ninon US dollar)
Simulauon I Simulation 2NlothodCurrent
Average[AnnualCo,t
177.4 168.4 169.6 2(10.8 219.6
Contrary to the switching system case, the first threemethods for local cable result in cost reduction of about30 to 40 billion won compared with the last two methods.
If there is any end-office which has difficulty in applyingthe supply interval recommended by EOQ. DLS orsimulation, it is desirable to use the supply intervalclosest to the optimal, considering the situation of theend-office.
c.
7. Conclusion
As shown in the results of the analysis, the smallest costis incurred when using DLS model, while the largestcost is incurred from using Simulation or the currentmethod for both switching system and local cable.This results from the fact that DLS model reflectsdifferent demand characteristics of each end-office as wellas demand changes every year by each end-office.
Accordingly, it is advisable to use the floating supplyinterval which reflects different demand patterns of eachend-office rather than applying the fixed supply intervaluniformly to all the end-offices regardless of each end-office's demand characteristics. In the case of switchingsystem, the total cost of other alternatives was similiarto that of the current supply scheduling. And thesupply interval of other alternatives was also almostsame as .the current one. For local cables, the totalcost of other alternatives was smaller than that of thecurrent one.
Estimates of the ordering cost and the cost of capitalshould be continuously tested and revised with morereliable data for exact comparison of the annual totalcost among the alternatives. In this paper, supplyinterval of the intra-office trunk lines was notexamined. Comprehensive analysis on all the networkelements including trunk lines is a subject worthy offurther pursuit.
Reference
1. Hadley, C., "A Comparison of Order QuantityComputed Using the Average Annual Cost and theDiscounted Cost", Management Science, Vol.10, 3, pp.472-476, 1964.
2. Taha, H.A., Operations Research, 3th Ed.,Macmillan, Inc., 1982.
3. Tersine, R.J., Principles of Inventory and materialsmanagement, New York : North-Holland, pp. 95-100,1982.
4. Trippi, R.P. and Lewin, D.E., "A Present Valueformulation of the Classical EOQ Problem", DecisionScience, Vol.5, pp. 30-35, 1974.
5. The Bank of Korea, "Analysis of Capital cost ofKorean Firms", Monthly Bulletin, Sep. 1991.
6. Korea Telecom Research Center, A TechnicalAssistance on Softwares SESS, SERS, 1989.
7. A Study on theComputerization of the Local Cable Supply Plan andDesign, 1989.
564
Network Management for Users in Japan
Toru TsuchiyaInstitute for Future Technology
Tokyo, Japan
1. AbstractThe objective of this paper is to examine the origins and the activities of the two independentestablished bodies in Japan, the Open Network Council and the Network Management Study Group,and to evaluate their influences on Japan's telecommunications policy. A few suggestions aremade, including one that some interworking of the two bodies will be fruitful.
2. Introduction
For operating a private network, it iscritical and strategic to choose suitablenetwork elements such as circuits and computers.Network management is a necessary work forbusiness firms not only to obtain informationfor constructing and improving their ownnetworks but also to operate the networksefficiently.
For most companies, whose businesses are notdirectly based on telecommunications, gettingcooperation from vendors and carriers isindispensable to do network management. Howeverboth of vendors and carriers have their ownreasons for not being able to respond to thecustomer's request for the coop,ration quickly.
Major reason on the vendor side seems to bethe reality that the cost benefit would not beenough for vendors to develop an interoperablesystem. On the other hand, carriers feeldifficulties in responding to a particular userwithin their limited resource, because theirprimary concern is a universal provision ofservices.
Moreover, a Japanese tradition tends tohamper a user to negotia e the cooperation withvendors and carriers. Japanese companies havebeen paying much respect for keeping long term,stable trade relations with their counterparts.In fear of breaking such a relation, fewcompanies ask a required cooperation on a purebusiness basis, thus preventing a purely market-oriented relationship to develop between usersand vendors and carriers. The above situationseems to be unfavorable for the future networkdevelopment.
On these backgrounds it is noteworthy thattwo bodies in Japan related to networkmanagement started recently; one I; the OpenNetwork Council, the other is the Network ManageManagement Study Group. The purposes of thebodies are not same, but common on the groundthat they are aimed at meeting user needs. It
is believed that the role of users in theactivities of the bodies will be a test paperfor the future telecommunications in Japan.
Examination of the origins and the activitiesof them and evaluation of their effects onJapan's telecommunications policy are discussedbelow.
3. Open Network Council
3.1 Origin
A brief history of the Japanese open networkpolicy is shown in Table 1 .
Table 1. History of open network policy
Date Outline
Apr. 1985 "Telecommunications Business Law" enforced
Mar. 1990 "Measures to be taken in accordance witharticle 2 of the supplementary provisionsof the NTT Corporations Law"(The Japanese government adopted themeasures to secure open networks)
Mar. 1991"Mesures to ensure fair and effectivecompetitive in the field of value-addedservices"(Special white paper based on mutualagreement between Japan and the USA)
Apr. 1991 Report of "Open Network Policy Study Group"(Proposal for a plan to secure fair andeffective competition between NTT andTYPED s)
Jul. 1991 "Open Network Council" established(Meeting between NTT and TYPED sabout the openness of NTT networks)
Mar. 1992 The first version of "NTT's plan ofproviding network capabilities, networkinformation and other features for TYPED s"(The discussions at the Council meeting infiscal 1991 were taken into account)
BEST COPY AVAILABLE 565
The most influential event was the releaseof the special white paper from the Ministry ofPosts and Telecommunications (MPT) on an opennetwork policy in Japan. In this document MPTpolicy was fairly clearly expressed althoughsome ambiguities remained. Apparently Japanesedomestic activities toward open network promotedmainly with the issue of the document.
As of October 1990 a study group on opennetwork was established by MPT. The study groupmainly discussed the fair competition betweenNTT and TYPED carriers "' , because TYPED shave to depend in most cases on NTT for accesscircuits from customers.
In April 1991, the study group recommendedthe three points; (D to have discussionsperiodically between NTT and TYPE II s, mtoclarify and release NTT's plan of providingnetwork capabilities, network information andother features, and (,to reflect requests fromother telecommunications carriers in the
c_.
[The Council]
Telephone Networks SCI
LLeased Circuits SC
{ Packet Networks SC1
Frame and Concept SC
G.obal relations SC
workingunder consideration
SC: Subcommittee
Fig. I. Structure of Open Network Council
development of NTT networks.Taking into account the first two
recommendations, NTT and four TYPEII businessindustry groups (i.e. Special TYPED Telecommuni-cations Carriers Association, General TYPEIITelecommunications Carriers Council, Japan AudioVAN Association, and Japan Information andCommunications Association) agreed to establishan industry liaison council called the OpenNetwork Council.
3.2 Outline of open Network Council
The mission of the Council is to facilitatethe development of NTT networks that satisfyrequests from TYPED s and to provide effectivenetwork capabilities to TYPEII s.
The Council consists of G)the council andOthe subcommittees (see Figure 1). The councilshall be responsible for providing a forum whichwill facilitate the information exchange,discussion and consensus resolution of members,ensuring the availability of appropriatesubcommittees, and monitoring the work and theprogress of the associated subcommittees thatmay include final review and approval of allsubcommittees' output, recommendations andresolutions. The three subcommittee may clarifythe details of requests for each servicecategory and to develop the detailedspecifications.
The Council is considering whether the twomore subcommittees are necessary.
MPT representatives participate the Council,as well as its subcommittees as observer.
Because there are a large number of networkcapabilities, network information and ot.erfeatures, items to be discussed by eachsubcommittee are first restricted to those to bedeployed quickly by NTT. Therefore those thatmight be found difficult to deploy during aseries of discussions still remain as they are.
Table 2. Items that Special TYPED s expectedto discuss and their results in 1991
Item/Contents iResull]
0
0
-)
0
0
0
A
A
x
x
Route diversity;Designation of the route or multi-routing
Notification within 60 sec. of any interruption;Delivery to TYPED s about the status ofinterruption every 60 seconds
Very high speed local leased circuits;Provision of 52Mbps or 156Mbps leased circuits
Provision of circuit configuration data;Provision of routing information and line-loss
data
Provision of circuit trouble records;Provision of an access service to troublehistory data-base since the beginning of service
Prompt response to order circuits;Provision of an electric media to order circuits
Circuit reconfiguration;Provision of a capability to controlto control reconfiguration directly by TYPE II
Dynamic changing of bandwidth;Provision of a capability to change bandwidthor circuit speed rectly by TYPE II
Traffic monitoring;Provision of a capability to monitor trafficof a circuit directly by TYPE II
Access to testing and/or analyzing systems;Provision of an access to testing and/oranalyzing systems of NTT
566
Oo means NTT deploys it in fiscal 19920 means NTT deploys it in fiscal 1993-1994A means the study is continuedx means not discussed yet
conditions for deployment;OD MPT authorizatione Agreement on prices and other terms between
NTT and TYPE II s
3.3 Contribution to Network Management
Of the three subcommittees, the leasedcircuits subcommittee discusses items related tonetwork management for users.
Shown in Table 2 are the items related tonetwork management that Special TYPE II
Telecommunications Carriers Association expectedto discuss and the current results. In fiscal
1991 the subcommittee chose 8 of the 10 itemsshown in Table 2. The remaining items,
monitoring traffic and access to testing and/oranalyzing systems, were not discussed yet andwould be considered again.
After holding 7 meetings in fiscal 1991, thesubcommittee reached a consensus for 6 items.Taking into account discussions at the Council
meetings, NTT developed its plan of providingnetwork capabilities arl etc. Items for furtherstudy, dynamic changing of bandwidth and circuitreconfiguration, would be continued to bestudied, because they are remarkably demanded byTYPEII s.
3.4 Evaluation and Future Task
There have been two important results of theCouncil activities to date from the view pointof network management. One is the NTT'sdeployment plan of 6 items, the other is tomaintain periodical meetings between NTT andTYPEII for openness of NTT networks.
The 6 items are not enough but a valuablefirst step for improvement of network management.Periodical meetings have possibilities to be amechanism for NTT to pick up user needs quickly.
For the future, some problems will have tobe solved for expanding the Council activities.
First, the mission of the Council iscurrently restricted such that NTT and TYPE II s
should discuss what is a fair competition beforetalking about the detailed services as they did.This is one of the reasons that the Councilconsiders to set up frame and conceptsubcommittee (see Figure 1).
Second problem is the limited membershipthat the Council omits other TYPE I s, userscategorized not in TYPE II , and independents.Therefore it is feard that NTT might leaddiscussions at the Council against TYPE II s,
because NTT is huge in comparison with TYPE II s;
for example NTT sold 5,746 billion yen in fiscal1991, while all of 36 Special TYPED companiestotally sold 489 billion yen in the same year.
Third problem is how to tackle the globalopen network issue. Because open network is oneof common issues all over the world, the Councilwill have to contact in some way withcounterparts in other countries, especially USAand EC, in order to harmonize its movement.Particularly discussions about the OSS ( Opera-tional Support System ), which plays a big role
for network management, for ISDNs and INs are socritical that the Council may talk about moreways, terms and conditions of OSSs.
4. Network Management Study Group
4.1 Origin
From 1987 to 1991 the telecommunicationsbureau of MPT held meetings of a study group todiscuss network management every year. Thesestudies led Japan's network management but notalways consistently. Because MPT were requiredto submit a report on each study, and only 10 orso companies joined a study due to terms andconditions of MPT. It could thus be said thatthe main purpose of the study was not ingrasping user needs related to networkmanagement but in publicizing the activity ofMPT.
To overcome the above mentioned shortcomings,the Foundation for Promotion of Telecommunica-tions services (FPT) established the NetworkManagement Study Group based to encourage thedevelopment of future networks that are asadvanced as possible, consistent with ensuringnetwork integrity and avoiding the imposition ofuneconomic costs.
4.2 Outline of Network Management Study Group
The purposes of the Study Group are tocontribute to build an integrated networkmanagement system under multivendor/multicarriercircumstances and to provide users with chancesto talk with not only each other but alsovendors and carriers.
The Study Group has a plan to makerecommendations to TTC (JapaneseTelecommunications Standard Body), MPT, vendorsand carriers. Already the Study Group had ameeting with NMF (Network Management Forum)twice in two years, to exchange views of networkmanagement.
Table 3. Changing Difficulties in Network Management( Awareness of the Members of the Study Group )
Difficulties felt in doing network managementNormarized
1S90 FY
Data
1991 FY
Insufficient human-power for operation 0. 9 7 1 . 2 4Inefficient operations to locate a trouble 1. 5 0 1. 0 0
Difficulty to follow the rapid expansion of network 0. 8 6Complexity in multivendor environment 0 . 8 7 0 . 5 5Less-flexibility of network configuration 0 3 7 0 . 4 1
Improper organization structure 0. 3 2 0 . 3 8Increasing cost 0. 2 6 0. 3 8Insufficient support from a vendor 0 . 1 8 0 . 2 4
Insufficient back-up system 0 . 5 3 0 . 1 7Insufficient security system 0. 1 3 0 . 1 7Difficulties to build in accounting management 0 . 1 7Lack of understanding by accounting people 0 0 . 1 7Training end users 0 . 1 7Inability to make full use of network management equipment 0 . 1 4
Others 0. 1 1 0 . 1 4
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means first appeared in 1991
the Study Group is open to any party with adirect and material interest in the Study Groupprocesses and activities. At the moment theStudy Group has the members of 48 companies,categorized roughly into the following 3 groups;
User 26 companiesCarrier 12
Vendor 10
Dr. Aida, the University of Tokyo, chairsthe Study Group of which secretary work is doneby FPT and IFTECH. The MPT supervises FPT, butdoes not join the Study Group.
All members join together 7 or 8 times in ayear and discuss various matters.
4.3 Contribution to Network Management
The Study Group has officially proposednothing yet, but several magazines have beentaken the Group's activity by articles. It can
be said that people are getting to recognize theStudy Group as a useful forum for network users.
Table 3 shows the changes of difficultiesin network management in the past two yearsaccording to a survey of awareness of members atthe Study Group.
Some findings from the results are asfollowings:
the most and rising serious factor was"insufficient human-power",
"inefficient operations to locate a trouble"showed a considerable decrease, butstayed at the second worst,
"insufficient back-up system" dropped sharply"Complexity in multivendor environment" showed
a slight decrease,"difficulty to follow the rapid expansion of
network" showed a sharp increase, and"increasing cost" showed a higher figure in
1991.
It was found that almost all companies facedtroubles of their own systems, to begin with thetop two items in Table 3, in particular.
The results, however, will be usefully usedby a network manager for his or her companyexecutives to understand that the problematicmanagement of a network is rather a general casethan their own one. This will make enoughcontributic for informing necessity of networkmanagement.
In addition, the Study Group pointed out thefacts that an average company operated itsinformation system under multivendor environmentand received badly short network information ofleased circuits, while hardly managing tooperate systems for lack of human resources tocope with increasing complexity of networkequipment.
These facts are hoped to be a kind oftrigger for realizing a favorable networkmanagement system.
Other contribution is that the Study Groupoffers informal talking among users, vendors,and carriers with very suggestive information,because there are few such forums as this inJapan.
4.4 Evaluation and Future Task
It is believed that the most valuable job ofthe Study Group is to hold successive meetingswith regard to network management, aiming atrealization of a favorable network managementsystem. In fact, the Study Group is receiving ggood appreciation for the successive activities.
Based on the results in the past two years,the Study Group should pursue solutions to theissues discussed so as are to make theirrequirements clearer for a favorable system, todefine a priority of the each issue forimplementation, and to estimate the largeness ofthe market demand, which shall be essential fora purely marketoriented relationship betweenusers, vendors, and carriers.
The Study Group has several objectives forimproving its management. One is to build astanding mechanism to reflect theirrecommendations on the market or telecommunica-tions policy.
The second objective is to broaden publiclythe Study Group activities. In so doing theStudy Group will get more support fromindustrial firms and organizations, which wouldgive more incentive for the members to work forrealizing better network management environment.As a concrete measure, the Study Group is goingto publish a book by combining contents of thepast annual reports published. Another measureis to build a more close relation with NMF.
The third objective is to make a transitionfrom complaining body into body to beappreciated to give recommendations, maintainingadvantages such as friendly and earnest talkingamong users, vendors, and carriers.
5. Summary
It is important for private network users toplay a major role for realizing a favorablenetwork management system. It can be said thatsince the introduction of competition intelecommunications in 1985, users in Japan havecome to have to bring up the market, whilegetting expanded customer choices.
Both MPT and NTT should consider mattersnot only on the logic of providers but also onthe logic of customers, to change theirpositions on Japan's telecommunications policy.
Regarding to this, the roles of the Counciland the Study Group are very important, sincethe TYPE II ,:arriers and network users aregiven through the Council and the Study Group,respectively a good chance to reflect their ownvoices on Japan's telecommunications policy.Moreover, the cooperation of the two bodies fornetwork management will be fruitful on some ofthe issues pointed out in this paper.
In order to promote activities of the twobodies, it is highly desired that top rankedmanagers of user companies explicitly show itsrecognition and support for these activities.For the future, users will be required to havetheir own body independent from MPT and NTT,because both of the Council and the Study Groupare currently supported by them in finance aswell as in personnel.
568 L
Also each user need to build business relationswith several vendors.
Through resolving these issues, users willlikely to contribute to raising opportunities toenjoy the various advantages of advancedservices related to network management and tovitalize the whole telecommunications market.
While the two bodies are at an early stageof development, both of them, born in thecompetitive environment, should be a test paperto estimate how much the Japanese competitivemarket would grow.
Footnote:
(a) The definition of TYPE I and TYPE II fromthe Telecommunications Business Law in Japanis the following;
Of the companies that are in thetelecommunications business, those inpossession of their own facilities are calledTYPE I carriers. Those engaged in advancedservices using facilities leased from TYPE I
carriers are called TYPE II carriers.TYPE II carriers consist of Special TYPE II
providing large scale/wide area services orinternational services, and General TYPE II
furnishing services other than those of TYPEII
As of November 1992, MPT had received theregistrations of 37 companies as Special TYPE
II and notifications of 1,064 companies asGeneral TYPE II respectively.
References;
(0 "Special whitepaper with regard to safeguardsin order to secure an effective faircompetition in the field of value addedtelecommunications services" March 1991,The Ministry of Posts and Telecommunications(MPT)
(2) "Final report; Open Network Policy StudyGroup" April 1991,Open Network Study Group
(3) "Annual Report; Open Network Council/MPT"April 1992, Open Network Council/MPT
(4) "Report; Status quo of open network in USAand EC" August 1992,Delegation of Open Network Council
(5) "Annual Report; Changing environment and casestudies of companies response" March 1991,The Foundation for Promotion ofTelecommunications services (FPT)
(6) "Annual Report; Changing environment and casestudies of companies response II " March 1992,FPT
All referee es are written in Japanese
569
The Politics of Telecommunications Reformin Developing Countries
Ben k PetrazziniDepartment of Communication
University of California, San DiegoLa Jolla, California, U.S A
ABSTRACT
This study examines in comparative perspective the politics of privatization and liberalization of the telecom sector inAsia (Malaysia and Thailand) and Latin America (Argentina and Mexico). The central aim of the study is to explore why
do countries with similar socioeconomic profiles, trying to implement shared telecom reform goals under similarhistorical circumstances, achieved divergent outcomes in their restructuring efforts. Grounded in political-economy
analysis this paper suggests an answer based on the openness of the political system of each country.
L- Introduction*Puzzling and counterintuitive economic reforms are quickly spreadingthroughout the Third World. Less developed countries (LDCs) areopening their economies to market forces at a striking pace, despitewell grounded and convincing arguments that structural constraints inthe international system shaped Third World preferences forprotectionism and state intervention.(1) In the pursuit of liberalization,the transformation of the economic and political role of the state hasbecome crucial. Reforms such as privatization of state-ownedenterprises (SOEs), liberalization of the economy, and reduction of stateregulation are at the center of this historical shift in the organization ofdeveloping societies.
Among the public services and state industries that are beingrestructured in most developing nations, one that has emerged asspearhead and showcase of a broader reform program is thetelecommunications sector. This study explores the p,:itics ofprivatization and liberalization of this dynamic and politicallycontroversial sector of the economy.
Although state reform is viewed as an homogeneous trendthroughout the Third World, a closer look at some of the countries inwhich reforms are most advanced reveals few commonalities.Regardless of their "common goals", countries have followed verydifferent paths in their journeys to a free market economy. In thetelecommunications sector, LDCs show today a range of policy modelsthat cover a complex and diverse variety of combinations of ownership(public/private) and the degree of competition (closed/open markets).
In LDCs current telecom reforms have clear politicalunderpinnings. A long tradition of state intervention and politicizedmarkets assured a pervasive role for politics. This study hopes tounveil some of the political puzzles that underlie the various forms thattelecom privatization and liberalization have adopted in LDCs. Thequestion that drives the research is: why do countries with sharedtelecom reform goals and similar patterns of development achieve suchdifferent outcomes? As a part of the quest for a better understanding ofregulatory reforms in the telecom sector of LDCs, this study outlinesan argument supported by data and evidence drawn from recenttransformations in four major countries of Asia and Latin America:Malaysia, Thailand, Mexico, and Argentina.
Efforts to explain policy formation and policy outcomes haveconcentrated on different factors, such as the role of ideas and ideology,the impact of domestic political coalitions or the institutional structureof the political system. After assessing the explanatory value of theseapproaches for the particular inquiry pursued in this work, I willconcentrate in the relative autonomy of the state and the substantivedistribution of power within the state apparatus as important dependentvariables in the explanation of telecom policy reform in LDCs.
Based on the data collected from the Asian and Latin Americancases, I will argue that two elements are crucial to an explanation of theviability of reform in the sector. The first is the relative autonomy ofthe state vis-a-vis political pressures, and the second, the degree ofpower concentration in the executive branch of the state. Specifically,evidence suggests that a low degree of state autonomy and powerconcentration within the state is strongly correlated with likelihood offailure in the reform of state monopoly. In other words, LDCs withhighly controlled and vertically integrated political structures, such asMexico and Malaysia, are more prone to achieve reform in their publicsectors than are those countries with a highly volatile and profuselydispersed power structure, such as Argentina and Thailand. In this way,
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the study points to the ironic fact that state "dismantling and retreat"calls for the presence of a strong and "utonornous state. Moreover, itreinforces an emerging trend of political studies that argue that, inLDCs, economic liberalization is synonymous with politicalresuiction.(2)
The goal of the project is not to search for "universalprinciples", nor to understand a historical process in light of a neatlydesigned model, but -- as Skocpol puts it to look "for answers basedon valid causal connections that... account in potentially generalizableterms for different outcomes across space and time in otherwise similarcases."(3) This study will rely heavily on the methodological toolsoffered by comparative historical analysis.(`[)
The paper is divided in five sections. In the first I introducethe problem in the context of a broader political and economictransformation in LDCs. In the second, I present a general frameworkof the recent transformation in the telecom sector of LDCs. In thethird, the main argument of this work, along with various theoreticalapproaches to policy making are discussed and assessed against thegeneral patterns of the Asian and Latin American cases. In fourthsection, Argentina, Thailand, Mexico, and Malaysia's political systemsand its impact in telecom restructuring are explored in detail. Theconcluding section reviews and summarizes the argument in light of thespecific cases.
II - Recent Telecom Trends in LDCsIn the light of the increasing integration of the global economy (with adominant component of information) and the simultaneous economicopening in many LDCs, telecommunications is now a fundamentalprerequisite of any growth project. Mindful of the fundamental shift inthe role of telecommunications, and pressed by economic, fiscal,managerial, and technological constraints, many LDCs are struggling tomove telecoms from a second priority "public service," to a firstpriority "international trade tool." As Mexican President Carlos Salinasde Gortari has asserted: "Telecommunications will become thecornerstone of the program to modernize Mexico's economy."(5)
In the pursuit of this radical transformation, LDCs embarkedon state reform programs. The four countries studied here initiatedbetween 1987 and 1989 a wide state reform program that placedtelecommunications as a crucial sector in reform process.(6) In the fourcountries the general guidelines for the restructuring of thetelecommunications sector was to transfer the previously state-ownedtelecommunications company (SOTE) to private entrepreneurs, toliberalize market entry in most services, and to reduce or eliminate stateregulations.(7) But telecom reforms are not the mechanical outcome ofpolicy implementation. To the contrary, they are the product ofcomplex and dynamic interactions among diverging and many timesconflictive interests. Therefore, LDCs diverge sharply in the profile oftheir new systems.
The four countries examined here clearly portray the range inthe degree of reforms achieved by nations that intended to privatize andliberalize their systems. As table #1 shows, the outcomes for the fourcases diverged notably. Thailand represents the case with the leastdegree of privatization and a relative opening to competition of itstelecom market. Argentina, on the other hand, privatized its nationalcommon carrier, Empresa Nacional de Teiccomunicaciones (Entel), butfailed to open the market to competition. Differing from the previouscases are Malaysia and Mexico. The Southeast Asian country has
-
privatized part of the SOTE and considerably liberalized the sector.While Mexico shows the deepest reform among the four cases. It hascompletely privatized Telefonos de Mexico (Telmex) and extensivelyliberalized its telecom market.
Table #1: Degree of Privatization and Liberalizationin Telecom Systems of Selected LDCs.
Degree ofCompetition
Distribution of OwnershipGovernmentEntity
PublicCorporati:n
MixedOwnership
Private
CPE, dom. dauCellular
Argentina
Paging & I
VSAT & 2 Thailand
inter. data & 3
VANS & 4
Priv. leaselines & 5Inter. basic(potent.) & 6
Malaysia
Overlay & 7 Mexico
Considering that these four countries initially shared similarreform goals, how do we understand these and other importantvariations in policy outcomes?
III.- Fxnlaining Telecom Policy ReformsEfforts to explain how and why policy changes are developed andimplemented have generally stressed different levels of analysis:ideology and new ideas, electoral mechanisms, institutional structure ofthe political system, domestic coalitions.
Some policy-making theories have emphasized the role of theideology in crafting new regulations. From this perspective policyoptions and outcomes are strongly shaped by the ideological frameworkof those political parties in power.(8) Suited to explain cases such asEngland under Thatcher or the U.S. under Reagan, the argument is weakto address cases such as Argentina, Mexico, and New Zealand, wherereforms were carried forward by political parties with a long tradition ofwelfare and state-interventionist ideologies.
Others have stressed the role of ideas.(9) There is little doubtthat revived and updated neoliberal ideas contributed to the agenda andthe general policy framework under which telecom reforms were carriedforward. But there is little evidence that neoliberal ideas affecteddifferently the ways in which each country articulated its own reform.Further, the fact that all four countries shared similar conceptions ofwhat should be reformed and how, indicates that, in these cases, newideas are not the most appropriate dependent variable to explainvariation in policy outcomes.
Electoral and representational mechanisms have been used as atool to explain the existence of certain regulations in the telecommarket. Roger Noll, for example, argues that narrow economic-interestcoalitions--such as those pressing for the liberalization of thetelecommunications market--are more likely to succeed in politicalsystems with single-member districts elected by plurality vote and afairly autonomous legislature than in countries with nationwideproportional representation. Legislators in the former case represent aspecific constituency, and, therefore, specific interests (in this casetelecom reform) are more likely to reach the legislative agenda than incases of broad-based interest representation.
Generally the dominant authoritarian patterns of most LDCsgovernments weakens the explanatory power of electoral politics. AsHaggard points out., even during democratic periods the relation betweenelectoral politics and the policy process have been tenuous.(10) InMalaysia and Mexico the existence of a long-standing party in power,with a tight control of domestic politics, turns formal elections into aquasi-meaningless political exercise. In the cases of Argentina andThailand the gap between electoral-camptign discourses and post-electoral government actions are so contradictory that the theoreticalcausal correlation established between modes of electoral systems andpolicy outcomes becomes unclear.
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The institutional structure of the political system, i.e.parliamentary or presidentialist, also has been studied in relation toLDCs' policy reform programs (11) ) Although the approach potentiallycontributes to the explanation of telecom policy reform in some LDCs,the cases studied here call into question the generalizability of thistheoretical framework. Malaysia and Thailand, organized under aparliamentary system, have achieved quite divergent outcomes fromtheir reform policies. Similarly, reform outcomes in Mexico andArgentina, that are organized under a presidentialist system, are widelydifferent.
Finally, domestic coalitions have been considered by politicalscientists as a key element in the understanding of regulatorypolitics.(12) This approach has been traditionally applied toindustrialized democracies where electoral and legislative coalitions areeasily identifiable. In LDCs domestic political coalitions are difficultto identify. In those cases where political alliances are fairly stable,such as Malaysia and Mexico, the actions of the state are so pervasivethat it overwhelms the bottom-up activity of social coalitions. Thisapproach is weak in methodological terms since it is difficult toestablish causal correlations between coalition preferences and policyoutcomes.
The argumentBased on the above analysis, I suggest a conceptual framework based onthe substantive distribution of political power in society. Twovariables are crucial to understanding how certain features of a country'spolitical system affect policy making and its outcomes: the relativestrength and autonomy of the state vis-a-vis domestic and transnationalinterest group coalitions; and the degree of power concentration withinthe state apparatus; more precisely in the head of the executive branch(be it President or Prime Minister).
Taking as analitical categories the realtive autonomy of thestate from societal demands and the ability of state elites to implementcontroversial political reforrns,(13) it is possible to organize thesystem of Latin American and Asian countries into two major modelsof state/society relations. Indonesia, Chile, India, Malaysia, Mexico.for example, can be categorized as countries with a dominantly "statecorporatist" political system,(14) while Argentina, Brazil, Thailand,Peru, Philippines, and Venezuela, can be considered countries where a"pluralist-participatory" political system dominates.(15)
State-corporatist countries generally portray a system ofinterest representation in which: "the constituent units are organizedinto a limited number of singular, compulsory, noncompetitive,hierarchically ordered, and functionally differentiated categories,recognized or licensed (if not created) by the state and granted adeliberate representational monopoly within their respective categoriesin exchange for observing certain controls on their selection of leadersand articulation of demands and supports."(16)
On the other hand, countries with pluralist-participatorypolitical systems tend to "minimize participatory barriers and therebyencourage the participation of interest groups in the political process.Coalitions of interests can be assembled relatively free withoutrequiring any formal recognition by the state or other regulatoryauthority. Moreover, there are typically numerous governmental orlegislative channels through which coalitions can try to effect policychange."(17)
Among the cases under scrutiny, Malaysia and Mexico aretypical of the state-corporatist political system, while, since the mid-1970s, Thailand and Argentina can be categorized as countries with anincreasingly open, volatile, and pluralist political environment. Thecohesiveness of the decision-making structure, the professionalizationof the bureaucracy, and its degree of insulation from domestic andinternational pressures are factors that affect the bargaining rower ofstate elites.(18)
In Mexico and Malaysia, the state bureaucracy is a tightlyintegrated group of politicians and technocrats drawn from groups longin power.(19) The most distinctive feature is that, in both countries,elites isolate thems'Aves from societal demands and pressures while atthe same time th.:y legitimize this modus operandi by incorporatingmost social constituents through corporatist organizations.
In th.: caaes of Argentina and Thailand, both countries havebeen traditionally characterized as turbulent political societies with amarkedly stable "underground", or concealed power structure.(20)However, in ti early and mid- 1970s, both countries suffered structuraleconomic and political transformations (see cases below) that led to thedismantling of traditional political arrangements and the widening of
political participation. Since then, the "fluidity" and permanent"renovation" of political elites along with challenges from non-traditional power groups has created not only a non-cohesive decision-making structure, but an anarchic one, where interest groups build anddismantle coalitions in the struggle to gain power.(21)
The second variable crucial to understanding telecom policyreform is the concentration of power at state leveL More specifically,the degree of power concentration in the head of the executive branch.Btrauct privatizatien and liberalization of the telecom sector implies animportant reduction of the bureaucracies' control over the economy,resistance within the state apparatus arises as an important political riskto the program's sucerss In most LDCs telecom restructuring is aninitiative of the Executive branch, and hence encounters strongopposition from other sectors of the state apparatus. Examples fromArgentina, Brazil, Thailand, Venezuela, etc., illustrate this. Thisscenario calls for a strong, centralizing force that would enablegoverning the transition amidst political resistances of various statesources. In most cases a unilateral, closed presidential initiative tendsto fulfil that role. Opening the market calls for a closing of the polity.
In Mexico and Malaysia, strong power concentration in theexecutive branch has been a dominant feature of the political system.In Argentina and Thailand, the processes of political opening at thesocietal level have affected the patterns of power distribution in thestate. In the last twenty years both countries have had a dispersedpower structure at the state leveL Weak presidents and prime ministersand relatively strong legislatures and popular movements have led towidespread conflicts among governing groups, which often results in ablocking of the policy process. In Argentina, nevertheless, thesefeatures were reversed during the current Menem administration. Moststate reform was carried out through Presidential Decrees from theExecutive branch, a process that excluded the standard mechanisms ofchecks and balances set by presidential systems. This unusualconcentration of power in the president's hand undermined the input ofother institutions such as ministeries, technical secretariats, Congress,and provincial or state governments.
If we apply these structural features of the political system tothe particular historical transformation of the telecom sector in the fourcountries, the correlation between (a) state autonomy, (b) powerconcentration in the head of the executive, and (c) policy outcomes, isfairly clear in all the cases. Events show that, in the case of Thailand,the government decided to postpone indefinitely its early privatizationplans due to domestic political opposition (mainly labor, the army, andpolitical parties). In Argentina, the government was able to privatizeonly when oppositional coalitions where weakened and the Presidentgained special legislative power to reform the sector. In Mexico andMalaysia, traditional state autonomy and strength of the head of theexecutive branch granted both governments the political musclenecessary to bend opposition from labor, domestic providers, certainpolitical forces, and bureaucrats. In both cases, the state, in control of avertically integrated and highly disciplined political machinery, was ableto reach far into various social formations breaking alliances anddisrupting the building of political opposition to telecom reform.
While useful in understanding patterns of reform (i.e, the"success" of Mexico and Malaysia in their reform programs and therelative "failure of Argentina and Thailand), the central hypothesis ofthe work fails to explain why Thailand was able to liberalize in spite offailing its privatization attempt, and similarly, why Argentina failed toliberalize in a context of widespread privatization. I will argue that theperformance of the domestic economy has, in these cases, overridden theimpact of the domestic political system. A sky-rocketing economy inThailand and a decadent one in Argentina have affected the reformprocess in very different ways. Further, privatization and liberalizationare different processes. While the former implies the loss of proprietarycontrol over the bulk of telecom traffic, the latter affects only themargins of telecom markets in LDCs.(22)
In fast growing economies such as Thailand, pressure is strongfrom the business community to gain access to new telecom services atcost-based prices. Pressure for the liberalization of the market is pairedwith the general inability of LDC state-owned telecom companies toprovide those services as rapidly as demand requires. On the otherhand, in most LDCs basic telecom services are still politically andeconomically the most valuable segment of the market. Therefore,mounting business pressures on one side and a lower economic andpolitical stake of entrenched interest groups on the other, seems to offera key to understand the government's "success" in liberalizing someservices while failing to privatize the provision of basic services.
In the case of Argentina, economic factors inversely affectedthe privatization/liberalization process. On one side economic hardship,
572
as it will be analyzed below, dismantled the opposition of labor, stateofficials, certain political groups, and local equipment providers. But,at the same time, the urgent need for foreign investment to jump-start astagnant economy led the government to concede monopoly on mostservices on behalf of foreign capital participation. The strength andautonomy of the government vis-a-vis domestic constituents opened apolitical space for privatization, but simultaneously its dependency onprivate capital precluded the possibility of competition in the country'stelecom sector.
Summarizing, the analysis of these various theoreticalframeworks suggests, as a provisional hypothesis, that countries withhigher degrees of power concentration in their political systems arebetter prepared to carry on controversial regulatory reforms in the publicsector than are those with open and pluralist political systems.
IV; implementing TPIPCOM ReformsIn the following paragraphs, a detailed analysis of the historicalevolution of reform in each country and its relation with the structuraland historical features of the political system will illustrate and bringevidence to support the theoretical claims of this study.
ArgentinaArgentina has been submerged in political turmoil and chaos since theearly 1930s. Cyclical military coups and democratic governmentsdominated the political scene until the early 1980s, when the mostharsh and violent authoritarian government in the Argentine historystepped down from power. From the 1930s to 1989 the country hasbeen headed by 25 different presidents, some of whom lasted only a fewdays or weeks in power. This shocking record of governmentinstability is indicative of an extremely volatile political system.
Despite this fluid political system, scholars argue that, as inThai politics, the ongoing political instability in Argentina was only asurface phenomenon that "concealed a quite stable power system, whosedynamics followed consistent patterns." After the mid-1970s a varietyof changes in the Argentine political economy coupled withtransformations in the global economy led to structural changes in thedistribution of power. By the early 1980s the underground powerstructure's stability was seriously weakened. The political systemprogressively opened to the participation of a variety of new politicalforces and innovative realignment of old ones.
In the mid-1980s a the government attempted to carry on adeep transformation of the telecommunications sector. But, theAlfonsin administration was the first, after a long period of closenessand repression, to open the political sphere to the full participation of aplurality of interest groups. The consequence was that, as soon as thegovernment officialized its state reform program, public oppositionembodied in the Peronist Party, the unions, and parts of domesticindustry arose in an articulated front, blocking further public-sectorreforms. When the next President, the Peronist Carlos Menem, tookpower in July of 1989, Entel was still a government-owned company,holding the same organizational and regulatory status that it had in1983423)
The lessons of the Alfonsin administration point to the factthat if the Menem government intended to succeed in its telecomprivatization and liberalization project, it would have to block theparticipation of institutionalized opposition forces and implement quickreforms in the sector before resistance to the program could mountagain. The profound effects of the harsh economic crisis of the 1980sgave a legitimacy to government shock policies, whose efficacy dependson the sudden modification of social expectations. Such modificationsgenerally are attained via quick unilateral decisions and actions.
The unprecedented economic and fiscal crisis of the 1980s puta halt on the early emergence of strong and controversial socialdemands. Economic constraints discouraged political participation andled to a progressive demobilization of political forces. Economichardship calls for a realignment of traditional political and economicarrangement making the system of political relations and compromisesmore fluid.(24) In this context the government gained relativeautonomy, insulating the articulation and implementation of neweconomic and political programs.
Profiting from the weaknesses of the retreating Radical Partyand the disorientation of his own party, Menem was able to pass twolaws in Congress that are central to the reform process: the EconomicEmergency law and the Public Sector Reform Law. The latter, inparticular, concentrated power in the Executive, leaving a strict controlof the state reform in the hands of the President. In concrete terms, thismeant that the privatization of Entel, and the broader reform of thesector, was carried forward almost completely through presidential
decrees. The new legislation buffered the privatization process from theinterference of Congress and its slippery politics.(25)
Menem blocked the potential influence of more traditional,welfare-state oriented sectors of his own party by creating a "protectivebelt" of neoliberal advisors, drawn mostly from the Union de CentroDemocrkico (UCD is a party of free-market advocates) and from a fewselected followers in his own party. The Radical Party, Menem's maininstitutional opposition besides the labor movement, found itselfpolitically unable to raise resistance to the new programs, due to itsfailure in the last months of its ruling to govern the socio-economiccrisis. Since the Radicals had been the original authors of state reformand privatization projects, their oppositional stance now garnered littlesupport.
The labor movement in Argentina, one of the country'sstrongest political forces, entered the privatization period dismantled andweakened. The determination of Menem to break the opposition of thispowerful political actor reached its zenith with the government'sreaction to a national strike by Enters union in August of 1990. Whenthe telephone workers disconnected Argentina from the world, Menemresponded by calling in the army to operate the system and by firingmore than 400 workers. This was the labor movement's lastmeaningful resistance to the privatization of Entel.
Domestic and international capitalists have had a very unstablerelation with governments in the country. In this case, as Menem wascoming from the traditionally welfare oriented Peronist party, mostentrepreneurs expected a conflictive relations with the newadministration. However, Menem, dismantling all negativeexpectations dissolved resistance from the business communitybringing key figures in the sector to top government positions.Finally, to erase any threat to the reversal of the project, the newadministration introduced a variety of organizational reforms in thejudiciary system, mainly in the Supreme Court.
Once the new Peronist President achieved a high degree ofpower concentration in the executive branch, he launched a state reformprogram with two main features. First, only a few governmentofficials outside regular institutional mechanisms of a democraticsystem guided the process. Second, reform was carried out at a strikingpace. On September 12,1989, Menem signed the decree that began theprivatization of Entel. The government asked for 60 percent of Entel'sshares a maximum of US$214 million in cash, US$380 million inArgentine foreign debt payable over a three-year period, plus themaximum amount of debt papers that each consortium could offer, witha floor of US$3.5 billion.() Fourteen months later the state sold thecompany to two consortiums. STET/France Cable et Radio would takecharge of the operations in north region and Telefonica de Espana wouldprovide services to the south of the country. the STET consortium thatowns Telco Norte, and Comparlia de Inversiones en Telecomunicaciones(Cointel), which bought Telco Sur. Each consortium controls 60percent of the new companies, called Telecom Argentina (north) andTelefonica de Argentina (south), while the remaining 40 percent wasdivided among Entel workers (10 percent) and the national andinternational stock markets (30 percent).(22) Although they operateseparate monopolies in the north and south of Argentina, Telecom andTelefonica are partne,s in the provision of international services throughTeleintar, and they also share the control of Startel, a recently createdcompany that provides value-added telecom services.()
Although the company was rapidly privatized, there is aundeniable gap between the government's original goals and what wasachieved a year later. In its initial decree the main target of telecomreform was to: "demonopolize and deregulate the telecommunicationsservice to make it more efficient for the benefit of the users".(9) Toachieve these objectives, the central administration aimed at a broadreform in the provision of telecommunications services restructuringthe sector in the following ways: a) Entel would be divided in severalregional operating companies; b) telecommunications services would beliberalized in such a way that basic international services would be opento competition from the very first moment along with a wide variety ofvalue-added services; c) basic services would also be open tocompetition after the first five years;() and fmally, d) to achieve ahigh degree of competitive environment, the state would step out of thesector and "deregulate" telecommunications activities in the country.
A key target of the reform project was breaking the Entelmonopoly in several regions. However, throughout the bargainingprocess the government repeatedly modified Entel's proposedorganization to fit the interests of foreign investors. Finally, thecountry was divided in two regions. Considering that in the pre-privatization period, Argentina's telecom services were controlled by apublic/private duopoly (Entel and Compania Argentina de Telefonos),the new duopolic situation only changes owners.
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The original project to liberalize the telecom market suffered asimilar fate. The initial aim to open international basic services tocompetition disappeared in the early stages of the process. Longdistance and international services were bundled with local basicservices. The goal of liberalizing the provision of basic services withinfive years of privatization was further hindered when the period ofprotected monopoly was extended to ten years, with no clear legalcommitment that it would open afterwards.
Finally, value-added services, that remained in the competitiveside of the market until the early days of 1990, were also included in themonopoly package and the sprouts of any meaningful competition inthe Argentine telecom market died. The only services left to marketforces were the least profitable ones: cellular naval radiocommunication, national telex, and national data transmission.(31)
The story of the Argentine telecom liberalization suggests thatthe financially weak condition of the country's economy led the state toa "desperate" search for foreign investments. The country's dependencyon foreign capital to revive its economy improved the bargainingposition of foreign investors while undermining the preferences of stateofficials. This situation was reinforced by other international factors,such as widespread competition in the international privatizationmarket. By restructuring the sector in general, along with theprivatization of the national telephone company, the government boundthe fate of most telecommunications services to the privatizationbargain.
The unfolding of telecom reform politics in Argentina is anexcellent testing ground for the hypotheses presented in this study. TheAlfonsin government, which operated in a highly participatory andpluralist polity, failed to reform the sector due to pressures from varioussocial coalitions. Menem, however, was able to insulate the stateapparatus from societal pressures and strongly concentrate power in hisown hands, and hence achieved the total privatization of Entel. Theevolution of the Argentine reform also highlights the role of thedomestic economy in the crafting of new regulations for the sector.While in Thailand the government opened the sector to competitiveentry in response to pressures from an extremely active and powerfulbusiness community in a booming economy, in Argentina thegovernment closed the sector recreating a private monopoly in order tocomply with the interests of potential private investors much needed ina shrinking economy.
ThailandThailand, as well as Argentina, has witnessed a recurrent pattern ofgovernment instability and political disorder beginning in the early1930s. Since then, seventeen military coups have overthrown andreplaced nineteen prime ministers. During that period thirteen differentconstitutions guided the normative framework of Thai society
Despite this profile of political disorder and volatility, studentsof Thai politics argue that, what seemed from the outside to be a stateof permanent political chaos, was nothing more than a non-conventional mechanism of political renovation.(32) However, since theearly 1970s Thailand has shown major structural changes in its politicalsystem. Rapid economic growth over the last 30 years has broughtabout deep structural socio-econornic transformations with a subsequentimpact in Thai politics. The country has experienced an impressivelyhigh rate of real GDP growth for almost three decades, averaging 8 to 9percent per annum during the 1960s and 1970s, with a record of 13.2percent in 1988 and 12.0 percent in 1989. Massive migration from thecountryside to urban centers (mainly Bangkok), higher levels ofeducation and health, changes in occupational structure, a growingmiddle class driven by upward mobility expectations, and a higherpenetration of foreign values and alternative modes of socialorganization have put the traditional political system under highpressure.(23)
Structural transformations in Thai society have dismantled thetraditional features of a closed polity dominated by a small military andbureaucratic elite. In the context of rapid economic growth andspiraling social demands for public services, successive governmentshave worked to upgrade key services such as telecommunications. Withonly 25 telephone lines per 1,000 people, Thailand has one of thelowest telephones- to-population ratios in the region: approximately 1.8sets per 100 people.(34)
Telecommunications in Thailand is mainly provided by twostate-owned monopolies controled by the Ministry of Transport andCommunication (MTC): the Telephone Organization of Thailand (TOT)and the Communications Authority of Thailand (CAT). TOT operates,e domestic telephone network, leased circuits for point-to-point
domestic communication, and certain long distance and internationalservices to neighboring countries. CAT mainly provides international
telecommunications and all non-voice domestic services. Theregulation of TOT and CATs operations, as well as the system as awhole, is managed by the Post and Telegraph Department (PTD),whichassists the Ministry in the development of policies for the sector.
Bad planning, financial constraints, managerial andtechnological problems, lack of coordination between the twocompanies, and an average installation charges of approximatelyUSS1,000 surprisingly have not slowed down the rapid growth oftelecommunications services in the country. Since 1984, domestictelephone service has increased by an average of 26 percent a year, whilethe number of connected subscribers has risen by 18 percent. But,inspite of this impressive growth rate, by the end of 1990, the waitinglist for subscriber lines climbed to 992,496. Customers wait from sixmonth to ten years to get connected to the public network.International services suffers a similar situation. International callsincreased by a rate of approximately 50 percent during the last years ofthe 1980s. Although both companies have launched new telecomservices (such as cellular and data) neither CAT nor TOT have been ableto keep pace with growing demand and diversification of services.(35)
Under great pressure from big and small consumers, andconfronting serious infrastructural problems, the government of PremTinsulanonda launched in 1985 an early restructuring of the telecomsector. The project planned to split the country's post and telephoneservices, but it met the immediate opposition of telephone workers whostruck. This was the rust step in a long and uneasy attempt to reform
and privatize the telecom system in Thailand.In August of 1988, Chatichai Choonhavan took office and
revived Prem's reform initiatives. By May of 1989 the Minister ofTransport and Communications, Montri Pongpanich, was ready topropose a plan for the privatization of 49 percent of TOTS shares,among other SOEs. But, the Choonhavan administration launched theprivatization project in a moment of increasing government weakness.Challenges from the powerful state unions, politicians, state officials,and militaries involved in various SOEs, put in doubt not only theviability of the project but the stability of the government itself.
At the legislative level, the government confronted a bicamerallegislature in which many of the 357 members in the lower house and268 members in the senate had vested interests in state-ownedenterprises. Since the 1979 election, Parliament consisted of numerouspolitical parties, none of which ever neared achievement of aparliamentary majority. The six-party coalition that lead theg vernment at that time not only faced opposition from other politicalforces, but it often encountered conflicts and serious disagreementswithin the coalition itself. The atomized and diverging interests of thelegislature, and the fluctuating support of the parties within thegoverning coalition, left the government without the political leveragenecessary to introduce amendments in the statutesof CAT and TOT.
A similar situation was visible at the level of state-enterprisesmanagers. The inability of the government to impose its criteria upontelecom managers became evident in November of 1989, when TOT top
managers, in a clear disobedience to orders from the Prime Minister,granted the installation of a digital transmission system to Toyo MenkaKeisha of Japan. Despite this overt challenge to the power hierarchy,no disciplinary action was taken against those involved.
Perhaps the most important force in the government's retreatlay in the role of unions and the military. The former in an overt way,while the latter worked behind the scenes. Both efficiently pressured todismantle the project to privatize SOEs. In terms of sheer numbers,the strong union role is puzzling. Only 5 percent of Thai workers areorganized into unions. Moreover, the country's economy wasboomingduring 1989 (12.0 percent of GDP growth). At least two factorsexplain some of the puzzle. First, Thailand's largest unionized sector
are state employees with more than 260,000 workers. Second, stateworker salaries and benefits are much better than that of theircounterparts working in private companies.(36) Fear of losing theirprivileged position ran high and led to a huge mobilization against thegovernment. Two massive strikes, one in July 1989 and the other inFebruary 1990, led by one of the state unions and joined by workers ofthe other 63 SOEs, resulted in the government announcing theindefinite suspension of all privatization plans.
But the unions were not alone in their crusade against thegovernment. Throughout the process, there is reason to believe, there
was an invisible military hand inducing labor protest and rebellion. Agroup of powerful army officials, led by army commander Chaovalit,battled from behind the scenes to defeat the project. Several SOEs, andamong them CAT and TOT, have army officials in their board ofdirectors. As in many other LliCs, the army sees the privatization of
telecom as a threat to national security.
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On March 17, 1990, the retreating Prime MinisterChoonhavan told a group of 13 political leaders, "I may be the lastprime minister in the democratic system. I have less confidence thanever in democracy,... the privatization issue has weakened it and we [hisparty coalition) are now plagued withdifficulties."(n) A year later, onFebruary 23, 1991, the first successful military coup since 1977overthrow Chatichai and his government.
Although recent Thai administrations have not been able toprivatize the sector as they intended to do, they have neverthelessachieved some liberalization of th telecom market. Several services,including cellular telephony, paging, national data transmission, andVSAT/satellite are provided by TOT, CAT and private companies in a
relatively competitive environment.Cellular telephony is an example of economic boom
overriding political struggle. Cellular services offered a quick way ofupgrading the scarcity of telephones provided through the publicnetwork. Despite its high cost (approximately US$ 3,500 per unit),the service, originally provided by both CAT and TOT, quicklyoversold and reached high levels of congestion. Breaking CAT andTOT monopoly over the service was not an easy task due to thepolitical connections of the companies. The government, nevertheless,opened the market, granting licenses to companies like Ucom (a ThaiMotorola subsidiary), whose subscribers' list reached 55,000 in the mid-
1980s.Paging services were initially operated by CAT in Bangkok
and surrounding areas. However, it showed a growing inability tohandle the surging demand for paging services. In 1987, thegovernment granted a franchise to Pacific Telesis Thailand Ltd. (asubsidiary of Pacific Telesis International) to operate a second system.Since then, paging has been opened to competitive entry by thirdproviders with a permission by the govemment.(31)
Similar situation is detected in data services where, underpressure of the Bangkok business community, the governmentgrantedlicences for the provision of satellite-based domestic data services toMO private companies: Compunet Corp. Ltd and SamartCommunications. The former company has been operating since 1989,offering two data communication services: Datasat and Satlink. Thelatter enterprise mainly has targeted financial community, and it plansto offer three network configurations to its customers: Samartnet,Samartlink, and Samart Broadcast Service. Regarding satellite services,the government has recently granted a 30-year concession toShinawatra, a Thai communication company, to operate twotelecommunications satellites. The concession, which also grantsShinawatra a monopoly in the provision of satellite services for eightyears, amounts to USS180 million. Its first satellite is scheduled to belaunched in mid-1993.
In summary, the reform process in Thailand has shown that alow degree of state autonomy and a dispersed state power structure madeit very difficult for the successive governments of Prem and Chaitchaito privatize TOT or CAT. The inability of the executive to pulltogether a large enough party coalition to introduce legislative reformsin the sector was a key element in the failure, coupled with the strongopposition of state officials, telephone workers, and certain sectors ofthe military it is not surprising that the privatization programs werecanceled despite long term government commitment to its success.
However, the two governments had been able to progressivelyintroduce minor reforms in the sector which allowed the liberalizationof certain non-basic services, such as cellular telephony, paging,domestic data communication, and satellites. A close analysis of theseopenings suggest that pressure from powerful economic forces and theinability of TOT and CAT to serve these peripheral markets, led to aneasing of political resistance to the dismantling of the state monopoly
over these services.
MexicoIn formal institutional terms, Mexico can be clustered along with othermodern Western democracies: a president, three independent powers(executive, legislative, judicial) with their respective checks andbalances, and federalist structures with fairly autonomous local
governments. In practice, however, Mexico is governed by anextremely centralized and powerful state, with tight political control
over most of Mexican society.(39) The particular dynamics of theMexican revolution during the 1910s and the constitution of 1917 setthe basis for the emergence of an overwhelmingly powerful state,whose political strength and social control continues today. Since1920, no opposition party has held power. And whenever theopposition posed a serious electoral threat, the government, supportedby its powerful corporatist system, simply refused to recognize electoral
defeat. Mexico's six decades of political stability and institutionalcontinuity is in sharp contrast to Argentina and Thailand.
This clear pattern of governance indicates that policy makingis a closed business in the presidential circle. Most public policies areinitiated, elaborated, and implemented by high government officialswith the full support of a professionalized bureaucratic elite. Little orno room exists for popular participation in the decision-makingprocess. Social demands are channeled through a sophisticatedarchitecture of interest representation. Interest groups, and evenindividual citizens, have only one mechanism to bring their demands tothe higher levels of the state: through one of the political structureslicensed by the state to organize and represent that sector of society(peasants, urban unionized workers, businessmen, teachers, etc.).
In economic terms, Mexico, like some other LDCs, displayedan impressive growth in the post-World War II period. The economygrew at a rate of 6.6 percent from 1960 to 1976, and 8.4 percent from1977 to 1981. Yet, in 1982 a sharp economic crisis ushered a period ofstagnation and recession that lasted until the late 1980s. In its effort toovercome the crisis, the government implemented a profoundrestructuring of the economy based on three main transformations: statereform (mainly privatization of SOEs), opening of the economy(liberalization and trade reforms), and incentives for private sectorgrowth (new, more lenient regulations for foreign and localinvestments). Telecommunications is a key element in Salinas'modernization strategy. Reflecting this new conception ofdevelopment, Mexico embarked in 1989 on the sale of Tel6fonos deMexico, S.A. (Telmex), the second largest company in the country andone of the 30 largest companies in the world.
During almost a hundred years, private entrepreneurs, undergovernment surveillance, provided telephone services. Th' 1, in 1972,Mexico nationalized the telephone company. Since then, and until itsre-privatization in 1990, Telmex was an autonomous entity, at least onpaper. In practice, the company was under strict government control.The Secretaria de Comunicaciones y Transportes (STC) owned 56percent of Telmex's shares, held the presidency of the board of directors,established technical norms and standards, controlled procurement,controlled investments, regulated rates, and set general policies for thesector.
Despite several managerial, financial, and technical problems,Telmex grew rapidly during the 1970s. When the company wasnationalized, in 1972, there were only one million telephone lines inMexico, but by 1989 the country had five million lines and ten milliontelephones.(40) After the earthquake of 1985, the system was largelyrebuilt replacing old manual switchboards and mechanized exchangeswith electronic switchboards and digital exchanges. In 1986 Telmexbegan a long term plan for the installation of fiber optics in MexicoCity. By 1990 the project was extended to other major metropolitanareas with plans for the installation of 13,500 km, long haul, fiberoptic. The conpany had 49,206 employees. Telmer provided ninesystems for r, ablic data communication. Besides telecommunicationsservices the company slowly diversified its operation. By 1987 it had24 subsidiaries that carried out business in areas as diverse aspublishing, real state, radio telephony, satellites, and construction.During 1990 this conglomerate of companies had an income of overUS$ 3.5 billion.
However, the provision of telecom services in Mexico sufferedfrom a skewed regional development and from a sharp growth set backin the last decade. Fifty percent of all telephone lines, for example, areconcentrated in the three largest metropolis, Mexico City, Guadalajara,and Monterrey. In 1990, more than 10,000 rural communities of over500 inhabitants had no access to any telephone service, and, country-wide, the service reached only 18 percent of the households. During the1980s, the financial crisis of the country affected the expansion ofTelmex. The annual average growth rate of Telmex dropped from 14 to6 percent throughout the mid-1980s. The quality of service diminished,the expansion of the networks and the diversification into new servicefaced a period of stagnation, and the complaints and pressures frombusiness and consumers generally increased. And, simultaneously, thenational treasury that have traditionally collected profits from Telmexand other SOEs for its redistribution, returned very little money to thetelecom company to finance its operations and new investments in thesector.
On September 18. 1989, President Salinas de Gortariannounced the privatization of Telmcx. There was little opposition.The government had been very careful, during the previous years, torealign forces among different coalitions to dilute any meaningfulresistance to a privatization program. The Mexican government faced avery different political environment from the one confronted theArgentine and Thai government.
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Although the PRI had, a similar political doctrine to theArgentine Peronist party (i.e., popular base, nationalist orientation,welfare and interventionist state policies, regulated economy, etc.), therewas a crucial difference between the two parties. The PRI ischaracterized by a long tradition of party discipline and clear hierarchicalpower relations. The Peronists, on the other hand, had been, for a longtime, a loose conglomerate of groups with conflicting interests andideologies reflecting the broader Argentine political scenario. WhileMenem struggled to keep his party under control, Salinas had the silentand disciplined support of his party constituents.
For example, Telmex managers and government officials incharge of the telecommunications sector are members of the party andloyal followers of the official line, as are most other bureaucrats.Although some voiced disagreement with the administration's policy, itwould have meant professional suicide to oppose the program.
Second, opposition parties in Mexico, different from those inArgentina and Thailand, had been very weak for the past six decades.The 1988 election that brought Salinas to the presidency was the firsttime that the PRI saw its hegemony in serious jeopardy, but a yearlater, when Telmex was privatized, the political crisis was largelytamed. Opposition forces were again receding from the politicalscene.(41)
Finally, the labor movement has been one of the traditionalconstituents and main supporters of the PRI and its administrations. Inthe telecommunications sector, 41.521 of the almost 50,000 Telmexworkers were unionized. In 1976 there was a profound realignment ofpolitical forces within the organization. A younger generation of laborleaders, headed by Francisco Hernandez Juarez, took over the union'sleadership. For the first two years the union was combative and struckseveral times against government policies. But, by the mid-1980s,government cooptation of the union's leadership induced factionalstruggles that weakened the union's bargaining strength. Slowly it wasbrought back to its traditional position within the PRI's structure.
Once the government constrained most opposition forces, theprivatization of Telmex proceeded without major complications. Thebidding process initially attracted 16 of the most qualified internationaltelecommunications companies. On December 13, 1990, one monthafter the November 15 bidding deadline, Telmex was sold to aconsortium comprising the financial Carso Group (Mexico), and twoforeign common carriers, Southwestern Bell (U.S.), and France Cable etRadio (a subsidiary of France Telecom). The government soldprivileged type "AA" shares that represented 20.4 percent of thecompany's capital, but were equal to 51 percent of the company'svoting shares, to the consortium for US$1.76 billion.(42) Due torestrictions imposed by the Foreign Investment Law, Carso Group hasthe majority control of the company with 10.4 percent of the shares,while Southwestern Bell and France Cable et Radio own 5 percenteach.n A second stage of the Telmex privatization was implementedin mid-June 1991. The government sold "L" type shares, representing16.5 percent of the company in foreign stock markets, for US$ 2.27billion.(") Telephone workers and the new controlling consortiumalso purchased Telmex shares during this offering.(45)
The sector has also been deeply restructured and liberalized.Value-added services are open to competition. Telmex must complywith certain regulations to avoid unfair competition in the provision ofservices.(46) Data services are provided under market conditions byTcicpac (a state-owned company), Telmex, and various privatecompanies. Some of these companies are taking advantage oftechnol +gical innovations and the acceptance by LDCs of the"nonresidence" principle to provide data services from abroad.(47) Suchare the cases of Overseas Telecommunications, Inc. (OTI) and HoustonInternational Teleport WIT Stars), which compete with Mexico City'sprivate companies to provide international high speed data servicesthrough the Morelos satellite systems.
The government also allows the overlay of private networksfor the provision of point-to-point communication. Going even furtherin the liberalization of the Mexican telecom market, the Salinasadministration now grants permission to private network owners toresell services to third parties.
Wireless communications are also liberalized and, consideringthe inadequacies of the public network for the telecom needs of a rapidlygrowing economy, the Mexican government expects a burst of newservices provided by private operators.(' ") However, SCI' still controlsthe granting of licences for the operation of cellular, radiotelephone, andpaging systems. The country is divided in nine regions for theprovision of cellular telephony. Despite the requirement of a minimumof USS1.5 million of capital and proven technical expertise, SC'Treceived 106 applications that fulfilled all the requiremenisr)
Along with cellular telephony, paging has been liberalized.Seventeen new radio licences for puolic service, including several withnationwide coverage in the 900 Mhz, are starting operations. Finally,radio telephone permits have been granted for services in central Mexicoand other regions of the country.
Satellites is one of the few areas that the government has keptunder state control. In 1982 the Mexican Constitution was modified toinclude in its Art. 28 the explicit statement that satellitecommunication was a strategic tool, and, therefore, under exclusivestate control. The satellite system is operated by SCT and providestelecommunication and broadcasting services to all the country.(50)Services are provided through two domestic satellites (Morelos I and II),and the government is planning to add a third satellite by 1993, toprovide services to all of Latin America. Despite constitutionalrestrictions the Salinas government has carried out regulatory reforms toallow the installment and operations of private satellite communication.In this way, Telmex, private telecom companies, and large users will beable to own and operate earth stations for data transmission, ruraltelephony, and other services.(51)
In sum, neither a long tradition of strong nationalism andrevolutionary pride, nor socially entrenched welfare policies and stateinterventionism, were an impediment for the corporatist Mexican stateto fully reverse its telecom strategies moving towards widespreadliberalization and privatization. Resistance to this "revolutionary" shifthas not been absent. Yet, despite a period of political weakness, theSalinas administration was able to recover traditional state autonomyand presidential ?owers to carry on with the controversial sale ofTelmex and opening of the sector. Contrary to the cases of Argentinaand Thailand, the Mexican government paced and shaped the reform tomeet most of the governments initial goals. Insulated state officials, adisciplined bureaucracy with a strong executive, and a recoveringeconomy gave the Mexican president most of the political tools thatwere absent in the two previous cases.
MalaysiaA former British colony, Malaya acquired its independence in 1957, andestablished the Federation of Malaysia in 1963.(52) Organized as aconstitutional monarchy, the head of the state, Yang di Perman Agong(the King), is elected for a period of five years by the conference of staterulers, consisting of the nine ruling sultans of peninsular Malaysia.The country has been governed since its independence by a multiracialcoalition known as Barisan Nasional.(53) The current head of thegovernment Prime Minister Datuk Seri Dr. Mahathir Mohamad, who isthe country's fourth Prime Minister since 1957. Mahathir Mohamad is,at the same time, head of Umno (United Malays NationalOrganization), the Malay party that had headed the governing coalitionsine independence.(54) Politics in the country is organized very muchalong ethnic lines. Malaysia's population is constituted by 55 percentMalays and other indigenous population, 34 percent Chinese, and 11percent Indians.(55) Ethnic conflicts have dominated the country sincethe British left the peninsula, and until today, race remains the singlemost important aspect of politics.(56)
Malaysia displays striking similarities with Mexico, and sharpdifferences with Thailand and Argentina, in regard to the substantivedistribution of power and openness of the system. Malaysia is aconstitutional monarchy with a parliamentary system, while Mexicoholds a presidential system; but both countries share key politicalfeatures. Both nations are internationally recognized, at least in formalterms, as democracies. Yet, each has had only one political group inpower since the current political regime took power. Barisan Nasionalin Malaysia and the PRI in Mexico. Both are organized in such a waythat interest groups, which otherwise would probably enter in conflict,are integrated into a broad coalition under the patronage of the party inMexico and of the electoral front in Malaysia.(57) In both cases theopposition is very weak; and, even though both governing groups faceda hegemonic decline in the late 1980s, both recovered ground and aretoday in full control of the nation's political environment.
Just as does Mexico, Malaysia has a stable, highlyprofessionalized state bureaucracy with clear demarcation of roles andhierarchies and with a strong concentration of power in the hands of thePrime Minister. The boundaries between the state, the government, andthe party are an institutional fiction in Malaysia, as in the case ofMexico. Malaysia also has a long tradition of technically-trainedadministrative service, which have led scholars to consider Malaysia asan "administrative state"(58) that sets the political tone of thecountry.(59)
Clear authoritarian and hierarchical relations, strongconcentration of power in the executive, discipline within the party
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system and within the state, and a politically dismembered society (inwhich demands are channeled through the specific power structures towhich the state has granted representational legitimacy), placesMalaysia, along with Mexico, as a state-corporatist society with ahighly integrated political system.
Reflecting its colonial past, the political system of the countryresponded to principles of centralization and control. In a parallelfashion, the communication infrastructure of the peninsula developed ina way that allowed the British to monitor the economic, political, andsocial evolution of the colony.(60) After 1963 all functions weremerged under the Regional Director of Telecommunications, under thecontrol of the Minister of Works, Telecommunications, and Posts. Inthis way Malaysian telecommunications became operated byDepartment of Telecommunications (DOT), under the name of JabatanTelekom Malaysia (JTM).
Since World War II the service grew cyclically, reachinggrowth rates of 16 percent per annum at some stage (1947-57), anddropping to 8.5 percent in others (1960-70). From 1970 to 1987, therewas a rapid expansion of basic telephone services and the introductionof new value added services. The telephone-per-capita ratio has surged:in the early 1970s the country had 1 telephone per 100 people, by 1980that figure rose to 2.9 per 100, and by the late 1980s the country hadachieved a ratio of more than 10 telephones per 100 people.Throughout this period the company added a variety of technologies andservices. In 1975 most crossbar exchanges were replaced by electronicexchanges, which led to the introduction of International SubscriberDialing Service (ISD) in 1979. By the late 1980s, 80 percent ofsubscribers had access to ISD, granting them direct dialing to over 150countries. Data services were introduced in 1984, when MalaysianPacket Switched Public Data Network (MAYPAC) and MalaysianCircuit Switched Public Data Network (MAYCIS) launched theiroperations.
Malaysia has displayed an impressive growth in servicesthroughout the country. But as infrastructure and service grew so didthe economy, and with it the demand for more and new services. By1987 the number of customers on the waiting list for new services hadgrown to 365,000, from an initial 14,000 fifteen years earlier.(61)During the period 1976-84, revenues increased fourfold, while operatingexpenditures increased fivefold. By 1984 only 52.9 percent of theDeparunent's expenditures were funded by genuine revenues.
This low performance of the Telecommunications Departmentin conjunction with the economic downturn of the early 1980s drovethe government to new strategies for reform of the public sector.(62) In1983 the government designed a plan for certain key SOEs. As in otherLDCs, the public telephone company, Jabatan Telekom Malaysia, wasthe initial target.(63) In early 1984 the government made public itsintention to privatize the company, and in March of the same year theproposal was formally approved by the cabinet. The announcement wasmet with resistance from telephone workers and other economic andpolitical groups with vested interests in the sector.
During the years of JTM privatization the government battledon two fronts to keep its hegemonic position within the politicalmosaic of the country. In the arena of party politics, the governmentfaced serious challenges to its policy guidelines and leadership. Morespecifically, in the telecommunications sector, government officialsstruggled with telephone workers to avoid major conflicts over theprivatization of JTM.
Political opposition to top-level decisions has been generallyfutile within the Barisan coalition and even outside of it. Partydiscipline and scattered, weak opposition parties have characterized theMalaysian political scene since its independence. However, in themidst of the privatization process opposition grew within the party andoutside of it.
In 1986 Dr. Mahathir Mohamad led Barisan Nasional to asweeping victory in national elections, and renewed his PrimeMinistership for another term. However, a few months later, he nearlylost the leadership of his own party (Unmo), in what it came to be thefirst-ever challenge to the party's leadership. An alliance betweenTengku Razaleigh Hamzah, then trade and industry minister, and DatukMusa Hitam, a former deputy president of Umno, put serious doubtMahathir's leadership. Soon after, dissidents questioned the validity ofthe elections on juridical arguing that the operations of Unmo wereillegal because 30 of its branches were improperly constituted.
Intra-party struggles were reinforced by new challenges fromother parties, within and outside the Barisan Nasional coalition. One ofthe important issues that the privatization of SOEs revived was theofficial economic discrimination against Malaysia's Chinesepopulation. Following the guidelines established by the NEP, the
privatization program was conceived as a proper mechanism for theredistribution of wealth between the Chinese and Malay populations.In consequence, Malays had preferential access to the program, whileChinese were implicitly excluded from the reform. This and othereconomic and political issues caused deep resentment in the Chinese.During the 1986 elections, the Malaysian Chinese Association (MCA),the Chinese party within the Barisan Nasional and second largest in thecoalition, lost considerable support. Simultaneously, the DemocraticAction Party (DAP), another dominantly Chinese party, won 20.8percent the votes, becoming the largest opposition party in the country.Further conflicts within the MCA, and growing loss of support fromits constituents, resulted the party leader threatening the governmentwith a possible MCA withdrawal from the coalition if the statemaintained its discriminatory policies against the Chinese community.
In response to these challenges, Mahathir moved decisively andrepressively. First, under the Internal Security Act, approximately 100opponents were arrested, various demonstrations and political rallieswere banned and three newspapers were closed. Second, the decision ofthe Court that Umno was operating illegally was displaced with theformation of a new party, the Umno Baru, from which opponents wereexcluded. Third, through constitutional amendment the jurisdiction andfunctions of the judiciary were reformed, making it more difficult forjudges to take independent actions. Fourth, through political pressuresof all sorts, the Supreme Court was dismantled, and a new one,acquiescent to the official line, was convened. Finally, several lawswere amended to limit political freedom and strengthen the power of theexecutive. By early 1989 intra-party struggle had disappeared,opponents had formed new parties that were not a serious threat to theregime, and the Chinese rebellion was in clear decline. By the end ofthe same year, Umno Baru and its leaders were still in full control ofthe Malaysian political scene.
Some other groups within the state, such as JTM managersand government officials, had scant incentives to oppose the project. InMalaysia's highly professionalized and institutionalized state with verylittle space for dissent, resisting a decision from the top hierarchy of thestate apparatus would have been a major professional and politicalmistake. Further, for most of the Malaysian state officials in telecommanagerial positions, the transformation of the company into a privateenterprise, where the state would maintain a majority of shares, did notimply a major threat to their careers. The stability of their jobs wasnot at risk. Besides, several of them would remain in the DOT, whichwould operate thereafter as a regulator of the sector.
Telecommunications workers were perhaps the onlymeaningful opposition to the project. Unlike management, mostworkers feared that they would lose their jobs when the company shiftedits operations to more commercial principles. Others feared losingrights that they enjoyed as state employees. Nevertheless, thepossibility of a powerful union resistance in Malaysia is very low.Unionism in the country, unlike Argentina or Thailand, is minimal orbanned. The ability of the telephone workers to mobilize a meaningfulrevolt against the state was very limited. Further, the abundant surplusof labor market generally diminished the bargaining power of workers.These structural weaknesses of the labor sector were reinforced furtherby an official promise that telephone workers would be retained in the1.,:w company for a period of at least five years.(64) Worker'sopisosition was the last obstacle to the privatization of JTM. Thegove nment, with a tight control over the Malaysian political system,was table to dismantle the rising opposition and inhibit any furtherchallenges to the official program.
In August of 1985, with a weakened political opposition, atamed work force, and a loyal state bureaucracy, the president was ableto pass in Parliament, the Telecommunications (Amendment) Bill 1985and the Telecommunications Services (Successor Company) Bill 1985,which offered the legal framework for the transformation of thesector.(65) After two years of organizational and financial reforms theprocess was completed. On January 1, 1987, the new company,Syarikat Telekom Malaysia, Berhad (STM), was officially registered asa private enterprise under the 1965 Companies' Act. However, this wasonly the first step towards privatization. The emergence of SyarikatTelekom Malaysia, a company in which the government still retained100 percent ownership, was only an incorporation stage that preparedthe company for future public floatation of shares in the internationalstock market.(66)
In November 1990, STM was listed in the Kuala LumpurStock Exchange, and 13 percent of the company's shares were sold tothe puhlic.(67) After the public floatation of shares, the state reducedeven further its participation in the company by selling shares to STMemployees and several Malay (bumiputra) institutions. Although theseshares were not government shares, but rather new shares to increase the
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company's capital base, the state control of the company shrank to 81percent of STM capital.(") Since its corporatiza; ion the company hasreversed its historical deficit by turning impressive profits, which havebeen enhanced with the recent listing of the business in stockexchange.(69)
The corporatization of state-owned telecom services and laterpartial privatization of the company was probably the most importantof several measures that the Malay government adopted to upgrade thesector in its attempt to catch up with the booming national economy.Along with the corporatization and privatization of the SOE, a wideliberalization program has been implemented since the mid-1980s.(70)
In the realm of data services the main operators are MAYPACand MAYCIS. Both are operated by STM were introduced in 1984.Along with these services the government granted permission for theleasing of private lines to provide business with timesharing services,offering in this way cheaper and more efficient routes.(71) Value-addedservices are also provided by private companies like Komtel, which isowned by Sapura Holdings Group, a major Malaysiantelecommunications holding. Besides being one of the thirty-twocompanies that provide paging services in fifteen cities, Komtel offers,mainly in Kuala Lumpur, value-added services such as wake-up,message check, and appointment reminder. More recently, otherservices such as domestic and international messaging has becomeavailable. Skytel, a joint venture of Mobile TelecommunicationsTechnologies offer access to alphanumeric messaging, voice mail, andinternational messaging.
Wireless communications has also been liberalized. Pagingservices are provided throughout the country by various privatecompanies. The government has granted thirty-two licences tocompanies that operate locally in different areas of the country. Andcompetition in paging has been recently introduced throughout thecountry by granting Hong Kong's Hutchison Telecom a licence tooperate nationwide a radio paging service. The interesting pattern in theliberalization of paging services is that JTM is not allowed to enter thatsegment of the market. Regarding cellular telephony, there are 12private mobile radio systems in operation, and 13 companies will begranted licences for the provision of CT2 systems. STM is alsoactively participating in the segment of cellular telecommunicationsthrough Automatic Telephone Using Radio (ATUR), which waslaunched nationwide in 1985, becoming the first of its kind in theregion. After a few years of holding a monopoly on the service, ATURnow competes with Cellular Communications (Celcom), a telecomcompany owned by Fleet Group, a financial consortium related to thegoverning party Umno.
The successful liberalization of various telecom services andthe privatization of the formerly state-owned Jabatan Telekom Malaysiawas not a foregone conclusion in Malaysia. The government hasconfronted a variety of political, economic, social, and institutionalobstacles in its attempt to reform the sector. Despite labor and politicalparty opposition, ethnic frictions based on discriminatory economicpolicies, legal obstacles, and economic difficulties in the sector itself,the Malay government has completed the first stages of its privatizationprogram and continues to open the market to competitive entry of thirdparties. As in the case of Mexico, the history of the "successful"implementation of reforms in the country can be explained by theautonomy of the state apparatus from domestic and internationalconstituents and heavy concentration of power in the executive branch.
V.- ConclusiouTelecom reform recently surged throughout the world at a astonishingpace. More striking even is the fact that thn phenomenon has spread ina global basis at the same historical time, regardless of politicalboundaries, economic structures, or dominant ideologies. However,these sweeping changes have not taken the same patterns in all nations.Even those countries that share some basic socio-economic featureshave diverged sharply in the way they have reorganized the provision oftelecom services. Based on the cases of Argentina, Thailand, Mexico,and Malaysia, this study attempts to explain why LDCs, with sharedreform goals, have differed in their policy outcomes.
Based on the assessment of various theoretical frameworks andthe available data from the cases, the study argued that the relativeautonomy of the state and degree of power concentration within thestate apparatus are key variables to understand policy variation amongLDCs. More concretely, the central hypothesis is that countries with ahighly autonomous states and strong concentration of power in theexecutive branch are more capable of privatizing their SOEs andliberalizing different segments of the telecom market than those nationsin which these patterns are absent.
The evolution of the political system in Argentina, and itsimpact in the unfolding of telecom reform in the country, is one of themost illustrative cases supporting the central argument of the study.During the military period, a dispersion of power within the stateapparatus blocked reform. Later, under democracy, the participatorynature of politics made it difficult for the government to achieve anymajor changes in the sector. Finally, during the Menemadministration, an insulation of the state from domestic politicalpressures and a strong concentration of power in the executive grantedthe government the political space to maneuver towards a broadprivatization program. Similar to the first stages of the Argentinestory, Thailand had faced after the mid-I970s an opening of the politicalsystem and an increasing participation of diverse political coalitions.Despite committed efforts of previous governments to reform, theprojects have failed due to resistance from various camps of the politicalarena.
Malaysia and Mexico stand sharp contrast to Argentina andThailand. Both countries share a strong state-corporatist politicalsystem. Both countries moved towards reform in the past few years.And both countries have achieved most of their initial goals. In bothcases, also, the state plays a central role in the articulation andintegration of political forces, while at the same time displays a clearautonomy in the policy making process. Further, each nation portraysa strong concentration of power at the top of the executive branch. Inboth Malaysia and Mexico the history of telecom reform reveals closelinks between the evolution of the changes in the stator and the role ofpower concentration and autonomy in the crafting and realization ofthose changes.
At a second level, I argued that even though this analyticalapproach was quite powerful in explaining general reform trends in
LDCs, it has problems in elucidating some "anomalies" in thedominant patterns of change, i.e., why Argentina has been able toprivatize but not to liberalize, while Thailand has achieved the latter butnot the former. Political and socio - economic data from the countriespoint to the fact that powerful flows in the domestic economy haverelegated political will to the background of the reform scene. InThailand, pressures from a booming economy broke tight politicalresistance to the transformation of the sector. In Argentina, the needsof a decadent economy pushed the government to surrender liberalizationon behalf of a "successful" privatization of the state-owned telephonecompany.
In brief, the examination of telecom reform in Asia and LatinAmerica shows that politics and the distribution of power in a societyis a key element in the restructuring of telecommunications in thedeveloping world. Moreover, this analytical exercise has led us to thenot very encouraging conclusion that, in LDCs, free market andparticipatory politics do not go hand in hand. On the contrary,economic liberalization seems to build, at least in its early stages, inpolitical suppression. Finally, the paradox of this premise is that,when applied to the economic liberalization of the public sector,dismantling the state calls for the presence of a strong and independentState.
Notes* Regulatory reform in the telecom sector of LDCs is a very dynamicphenomenon, and, therefore, highly prone to permanent changes andtransformations. This paper attempts to explain crucial reforms in thestudied countries between 1984 and 1990. Events thereafter are not includedin the analysis, although they are occasionally used as examples.1 Stephen Krasner, Structural Conflict: The Third World Against GlobalLiberalism (Berkeley: University of California Press, 1985).2 Grounded in the degree of political openness, this work parallels, and atthe same time contradicts, a recent study on telecom reform in the EuropeanCot =unity. Based on reform processes in England, France, and Germany,Raymond Duch reaches the conclusion that participatory political systemsare more prone to achieve reform than those based on corporatist poll:realstructures. The answer to this puzzle may lie in a crucial difference bet veerdeveloped and developing countries: the source of pressures for reform.While industrialized nations have reformed, mainly, in response to theneeds and pressures of large business consumers, changes in LDCs are,largely, a reflection of government's response to fiscal and economicconstraints. See Raymond Duch. Privatizing the Economy:Telecommunications Policy in Comparative Perspective (Ann Arbor: TheUniversity of Michigan Press, 1991).3 Theda Skocpol, "Emerging Agendas and Recurrent Strategies in HistoricalSociology," in Skocpol (ed.) Vision and Method in Historical Sociology,375.4 See, for example, Theda Skocpol (ed.), Vision and Method in HistoricalSociology (Cambridge: Cambridge University Press. 1984); Theda Skocpol
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and Margaret Somers, "The Uses of Comparative History in MacrosocialInquiry," Comparative Studies in Society and History , n' 22 (1980);Charles Tilly, Big Structures, Large Processes, Huge Comparisons (NewYork: Russell Sage Foundation, 1984); Neil Smelser, Comparative Methodsin the Social Sciences (Englewood Cliffs: Prentice Hall, 1976). A variety ofseminal social science studies have applied this research methodology. ofwhich the most outstanding are Theda Skocpol's, States and SocialRevolutions: A Comparative Analysis of France, Russia, and China(Cambridge: Cambridge University Press, 1979); Barrington Moore's,Social Origins of Dictatorship and Democracy (Boston: Beacon Press.1966).5 Cited in Gabriel Szekely, "Mexico's Challenge: Developing a NewInternational Economic Strategy," in ed., Changing Networks: Mexico'sTelecommunications Options, Peter F. Cowhey, Jonathan D. Aronson, andGabriel Szekely, (La Jolla: Center for US-Mexican Studies, 1989), 81.6 Thailand is the only of the four countries that did not used telecom asleading case for state reform. The Thai government started its privatizationattempts with electricity and ports.7 For studies of recent telecom transformations in industrialized nationssee, Alan Stone, Wrong Number: The Break Up of AT&T (New York: BasicBooks, 1989); Robert B. Horwitz, The Irony of Regulatory Reform: TheDeregulation of American Telecommunications (New York: OxfordUniversity Press, 1989); Jill Hills. Deregulating Telecoms: Competitionand Control in the United States, Japan, and Britain (Westport: QuorumBooks, 1986); Peter Cowhey and Jonathan Aronson. When Countries Talk:International Trade in Telecommunications Services (Lexington: Ballinger.1988); Ray Duch, Privatizing the Economy.8 See, for example, Richard Rose. Do Parties Make a Difference? (Chatham:Chatham House. 1984); and Douglas Hibbs, "Political Parties andMacroeconomic Policy," American Political Science Review, 71 (December1977).9 See Emmanuel Adler, The Power of Ideology: The Quest for TechnologicalAutonomy in Argentina and Brazil (Berkeley: University of CaliforniaPress, 1987); Peter A. Hall, ed., The Political Power of Economic Ideas:Keynesianism Across Nations (Princeton: Princeton University Press,1989); and William Drake and Kalypso Nicolaidis. "Ideas, Interest, andInstitutionalization: 'Trade in Service' and the Uruguay Round,"International Organization, 46, 1 (Winter 1992).10 Stephen Haggard, Pathways from the Periphery: The Politics of Growthin the Newly Industrializing Countries (Ithaca: Cornell University Press.1990) , 34.11 Peter Cowhey, 'The Political Economy of Telecommunications Reformin Developing Countries."12 See for example, Peter Gourevitch, Politics in Hard Times: ComparativeResponses to International Economic Crisis (Ithaca: Cornell UniversityPress, 1986); Peter Katzenstein, Between Power and Plenty: ForeignEconomic Policies of Advanced Industrial States (Madison: University ofWisconsin Press. 1978).13 Some of the most relevant works on state literature are Peter Evans,Dietrich Rueschemeyer, and Theda Skocpol, Bringing the State Back In(Cambridge: Cambridge University Press, 1985); J. P. Net] "The State as aConceptual Variable," World Politics, vol. 20 (1968).14 I have labeled "state-corporatism" those corporatist arrangements foundin LDCs because they portrait a crucial difference to traditional corporatistsystems in industrialized countries. While in developed countriescorporatism functions mainly at the societal level, in LDCs their veryexistence and functioning depends, generally, on the sponsorship andmanagement of state elites.15 This mode of country categorization is an ideal type, a theoreticalconstruction, that helps us to organize the otherwise complex andsometimes chaotic data of political organization. Therefore, no country fits"perfectly" in these categories. Most cases will present a mix of both;however, in most cases one type of political organization will predominateover the other.16 See Philippe Schmitt and Gerahard Luhmbruck eds., Trends TowardCorporatist Intermediation (Beverly Hills: Sage Publications, 1979). 13.17 Raymond Duch, Privatizing the Economy, 106.18 Stephan Haggard, Pathways from the Periphery, 43.
19 For Mexico, see Peter Smith, Labyrinths of Power (Princeton: PrincetonUniversity Press, 1979). For Malaysia see, Mavis Puthucheary. "TheAdministrative Elite," in Zakaria Haji Ahmad Government and Politics ofMalaysia (New York: Oxford University Press. 1987).20 For Thailand see, Jinpyo Yoon, Formation and Transformation of theModern State: A Comparative Study of the Nature and Role of the State inIndonesia, Thailand and Vietnam, (Ann Arbor: UMI DissertationInformation Services, 1990). For Argentina, Carlos Waisman, "Argentina'sRevolution from Above," in ed., The New Democracy in Argentina, EdwardC. Epstein (New York: Praeger, 1992).21 For Thailand, Jynpyo Yoon, op. cit., and Kevin Hewison, Power andPolitics in Thailand, (Manila: JCAP, 1989). For studies of the Argentinestate see. for example, Oscar Oszlak, La Reforma del Estado en la Argentina,(Buenos Aires: Centro de Estudios de Estado y Sociedad, 1990).22 The provision of basic services still constitutes around 90% of thesector's investments, operations, and revenues in most LDCs. See Ernst
Becher, Restructuring of Telecommunications in Developing Countries: AnEmpirical Investigation with ITU's Role in Perspective (Geneva:International Telecommunications Union, 1991).23 For a broader study of the Alfonsin period, see Cynthia Baur,"Rethinking Privatization, Liberalization, and Deregulation: The Case ofArgentine Telecommunications," unpublished manuscript, University ofCalifornia-San Diego, La Jolla, California, 1991.24 Haggard, Pathways from the Periphery, 44; Gourevitch, Politics in HardTimes, 22.25 Law 23.696, Art. 9/11.26 Debt papers were bought by the bidders in the secondary market at ahighly discounted price (11 cents on the dollar), but taken by the Argentinegovernment at their face value (i.e., 1 dollar each).27 Entel was sold for US$214 million in cash (US$114 million for thesouth, and US$100 for the northern region). US$380 million in notes(US$203 million for the southern region, and US$177 million for thenorth), and USS5.028 billion in debt papers (Telecom paid US$2.308billion, and Telefonica US$2.720 billion). Yet, if we take the value of thedebt papers in the secondary market at the time of the sale (which wasapproximately 11 cents on the dollar), the price paid for the company dropsto US$1.5 billion.28 Further analysis of Entel's privatization can be found in AlejandraHerrera with Ben A. Petrazzini, "The Privatization of TelecommunicationsServices: The Case of Argentina; Columbia Journal of World Business,forthcoming 1992.29 Decree 731/89, September 12, 1989.30 Decree 731/89, Art. 10-1.31 Decree 62)90, art. 9.11. The provision of cellular telephony is operatedin the Buenos Aires area by the new private company, integrated byTelefonica and Telecom (Signet) and Movicom, a consortium constitutedby: BellSouth (31 percent), Motorola (25 percent). Citicorp (8 percent),and two local companies-Socma (16 percent) and BGH (20 percent).National data transmition is provided by Impart, Satelnet, and recentlyAlcatel. Two other companies (Keydats and Tecsel) hold licenses to operatebut are presently out of the market.32 David A. Wilson. Politics in Thailand (Ithaca: Cornell University Press.1962), and Fred W. Riggs. Thailand: The Modernization of a BureaucraticPolity (Honolulu: East-West Center, 1966).33 David Morell and Chai-Anan Samudavanija, Political Conflict inThailand: Reform, Reaction, Revolution (Cambridge: Oelgeschalager Gunn& Main Publishers. 1981), and Ross Prizzia, Thailand in Transition: TheRole of Oppositional Forces (Honolulu: University of Hawaii Press, 1985).34 Taiwan. for example, has 375 telephone lines per 1000 people, whileSouth Korea has 304, Singapore 370, Hong Kong 424 and Malaysia 140.
35 For growth rate, customers waiting list and other data see, Paul Handley,"Progress by Numbers; Far Eastern Economic Review (23 March 1989):83.For waiting period and insulation charges see Mark A. Hukill and MeherooJussawalla, 'Telecommunications Policies and Markets in the ASEANCountries," Columbia Journal of World Business (Spring 1989):51.36 By mid-1989, Thai workers in the private sector were makingapproximately USS3 a day (the lowest salary in Southeast Asia, afterIndonesia).37 The Financial Times, March 26. 1990.38 Business Wire Inc., May 15. 1986.39 For an excellent introduction to Mexican politics see Wayne A.Cornelius and Ann L. Craig, Politics in Mexico: An Introduction andOverview (La Jolla, Calif: Center for US-Mexican Studies, University ofCalifornia-San Diego, 1988).40 Steve Dubb, "Modernization and Union Politics in Telefono: deMexico," unpublished manuscript, University of California-San Diego, LaJolla, California, 1991.41 The two parties that posed serious threats to the PRI were the Partido deAccidn Nacional (PAN) and the Partido Revolucionario Democratico (PRD).42 The amount received by the Mexican government for Telmex went farbeyond anybody's expectations. Yet, one should keep in mind that theTelmex sale was enhanced by bundling in the same deal most of the 24subsidiaries mentioned above.43 Telecommunications is a sector in which foreigners are allowed to ownup to 49 percent of the controlling shares of any Mexican company. SeeMexico, Secretariat for Commerce and Industrial Development. LegalFramework for Direct Foreign Investment in Mexico (Mexico. D.F. 1990).44 Mexico sold 1.745 million "L" type shares, which were offered in stockmarkets all over the world in the form of American Depository Shares(ADS), and cost US$27.25 for each ADS (each ADS contains 20 "L" typeshares). "L" type shares is another new element that the financial reform ofTelmex brought about. These new shares are nonvoting shares, and they arevalued 25 times less than the traditional "A" Telmex shares.45 The telephone union, using a credit of US$325 million from theMexican government, bought 187 million type "A" shares throughNacional Financier' (Nafin), which constitutes 4.4 percent of Telmex'scapital.46 Such as separate subsidiaries with separate accounts, networkdevelopment for easy interconnection and the sharing of networkinformation, etc.
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47 Traditionally, market access was linked to the commercial principles of"rights of cstablisment" and "commercial presence:" today, with theemergence of high-tech telematic networks (telecommunications andinformatics), companies are able to provide services from abroad."Nonestablished" companies do not need to invest in the local economy toprovide services in the local market, and the only impediment they face isacquiring a license to plug into the national public network. See RusselPipe, Telecommunications Services: Considerations for DevelopingCountries in Uruguay Round Negotiations report prepared for UNCTAD(Amsterdam, May 1989), and Karl P. Sauvant, International Transactions inServices: The Politics of Transborder Data Flows (Boulder, Cob.: WestviewPress, 1986).48 The explosive diffusion of wireless communication in LDCs to bypassthe deteriorated public network will reinvigorate traditional domestic andinternational struggles on the proprietary rights and allocations of radiofrequency spectrum. For implications of recent increase in the provision ofwire-less telecom services see "Airwave Wars," Business Week (July 23,1990). For an elaborate historical analysis of the international politics ofradio spectrum allocation and the role of LDCs see, James Savage, ThePolitics of International Teles..nrustunications Regulation (Boulder:Westview Press, 1989), chap. 2.
49 One of the companies is Intelcel, a subsidiary of Telmer; the other one isIUSACEL.50 The system has 44 transponders that make possible the operation of 361telephone circuits. 230 telex circuits, satellite telephone communicationwith 43 countries, telex communication with 17 countries and two videochannels. Source: Pisciotta and Fischer, "Mexico".51 Generally this services are operated through the modern technology ofVery Small Aperture Terminals (VSAT). Some companies such as PrincetonConsulting Inc. and Satellite Applications Engineering Corp. have alreadyapplied for government licenses to install satellite mobile systems. FromCiudad Juarez, Sersa/Geocom, Inc. offers a satellite-basedtelecommunications service throughout the northern border area of Mexico.52 The Federation was constituted by Peninsular Malaya, Sabah, Sarawak,and Singapore. In 1965 Singapore left the Federation and became anindemndent country.53 Barisan National translates as National Front. The main parties in thecoalition are the United Malays National Organization (Umno), theMalaysian Chinese Association (MCA), the Malaysian Indian Congress(MIC). the Gerakan Party, and the Party Pesaka Bumiputera Bersatu (PBB).54 For studies on Malaysia's political system see, Zakaria Haji Ahmad, ed..Government and Politics of Malaysia , and Chandra Muzaffar, Challengesand Choices in Malaysian Politics and Society (Penang: Aliran KesedaranNegara, 1989).55 Although the Chinese population constitute a minority in the country, ithas been in control of business and trade for decades. On the contrary, theMalays (or Bhumiputra--"the sons of the soil") has been traditionally theInvest, yet less 'fluent group in JVIalaysia. With the purpose of finding abalance in the distribution of wealth among different ethnic groups, thegovernment instituted in 1971 (after ethnically driven national revolts) aNational Economic Policy (NEP). The main goal of the program is toincrease in a considerable proportion (30 per cent) the stake of the Malaypopulation in the country's equity share.56 Unequal income distribution between Chinese and Malays have been akey issue in racial friction.57 While Barisan National integrates conflictive ethnic groups anddissolves racial tension, the PRI integrates different professional andincome groups and dissolves economic-based tensions.58 An administrative state is, in the words of Esman, one in which the stateis the dominant institution in society, guiding and controlling more than itresponds to societal pressures, and administrative (bureaucratic)institutions, personnel, values, and styles are more important than politicaland participative organs in determining the behavior of the state and thusthe course of public affairs: Milton J. Esman, Administration andDevelopment in Malaysia: Institution Building and Reform in a PluralSociety (Ithaca: Cornell University Press, 1972): 72. cited in MavisPuthucheary, "The Administrative Elite".59 For a study of state bureaucracy in Malaysia see. Mavis Puthucheary."The Administrative Elite," in Z,akari Haji Ahmad, Government and Politicsof Malaysia .60 This section relays heavily on the work of Fong Chan Onn, 'TheMalaysian Telecommunications Services Industry: Development,Perspective and Prospects," Columbia Journal of World Business (Spring1989).61 As a proportion of subscribers, the amount of backlogged requests surgefrom 7.8 percent in 1970 to 32.3 percent in 1987.62 The international economic recession of the early 1980s had a strongimpact in the fall of raw material prices coming from LDCs. Malaysia wasparticularly affected by these downward trend in the intonational economy.63 Economic Planning Unit, Guidelines on Privatization (Kuala Lumpur:Prime Minister Department, 1985).64 The government also offered retirement to those who were willing totake the deal. In this way, almost 400 of the 28,724 company's employeesdropped out of JTM. Daud bin Isahak, "Meeting the Challenges of
Privatization. in Malaysia," in Restructuring and Managing theTelecommunications Sector. ed., Bjorn Wellenius, Peter A. Stern, TimothyE. Nulty, and Richard D. Stern (Washington D.C.: The World Bank, 1990).65 The Telecommunications (Amendment) Act of 1985 restructured JabatanTelekom Malaysia as a state regulatory agency, while theTelecommunications Service (Successor Company) Act of 1985 regulatedthe operations of the new company: Syarikat Telekom Malaysia.66 STM operates under a twenty-year licence issued by the Minister ofWorks, Telecommunications, and Posts. The fact that STM operates under agovernment licence implies that the state has kept the prerogative ofreviewing the companies' monopoly in the provision of basic services.Toh Kin Woon, "The Liberalization and Privatization ofTelecommunications: The Malaysian Experience," in Privatization andDeregulation in ASEAN and the EC: Making Markets More Effective, eds.,Jacques Plektnans and Norbert Wagner (Singapore: ISEAS. 1990).67 Some of the factors that delayed the public floatation of STM shares arerelated to managerial and financial issues. The company had to adjust itsoperations to the logic of private markets, and restructure its accountingsystem to meet the requirements of the Malaysia's Capital Issues Committee(CIC). But more important, STM, according to regulations of the CIC hadto show a record of continuous profit during three years to be able to list itsshares in the Kuala Lumpur Stock Exchange. Toh Kin Woon. "TheLiberalization and Privatization of Telecommunications: The MalaysianExperience", 73.68 Fong Chan "Malaysia." in Pacific Basin Telecommunications: AnEvolutionary Approach, eds., Eli M. Noam, Seisuke Komatsuzaki, andDouglas A. Conn (New York: Oxford University Press. 1992)69 The company announced a 36-fold increase in net income for 1988. By1991 the company was earning US$ 333 million, which represented a sharpincrease over the USS203 in profits of the previous year. By 1992 thecompany is expecting to raise its income to USS360. The value of STMshares has climbed steadily from the USS1.80 at which it was issued toUSS4.25 in late June of 1991. See Michael Westlake "Ringing theChanges," Far Eastern Economic Review (July 1989): 66; and NuirIngelbrecht, "Privatisation Doubles Profits," Asian Business (September1991): 13.70 Much of the data on the competitive provision of services is drawn fromFong Chan Onn, "Malaysia,".Pacific Basin Telecommunications: AnEvolutionary Approach; and William Ambrose, Paul Hennemeyer, and Jean-Paul Chaport, Privatizing Telecommunications Systems (Washington D.C.:International Finance Corporation, 1990).71 Li Shui-hus, 'Telecommunications Opportunities," East Asian ExecutiveReport (April 15, 1986).
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International Telecommunications Is Shifting Paradigms:How Will It Affect Your Business?
By Gregory C. Staple
ABSTRACT
There is a new paradigm for international telecommunications services. The old paradigm is characterized bymonopolistic, facilities-based 'Heavy Carriers' which interconnect half-circuits and compensate each other througha 50/50 division of accounting rates. The new paradigm is being pioneered by 'Light Carriers', including cellularmobile and satellite carriers, which resell, repackage or reprogram the offerings of Heavy Carriers to provide lowerpriced end-to-end service to users on a multinational basis. This essay (1) surveys the technological and regulatorychanges driving the paradigm shift and (2) shows how it is changing the options open to government and industry.For as intelligent network services, credit card payment plans and IDD become ubiquitous, the Light Carrierparadigm will make alternative (ie, foreign) telephone services available in every country, notwithstanding localregulatory preferences.
The business of providing international telecommunications is goingthrough a paradigm shift.
The new paradigm makes global competition for cross-border traffic areality. As such, it will soon affect the competitive position of almostevery national carrier, whether large or small, based in Asia or theAmericas, with extensive international facilities or none. At stake isa $45 billion world market for services which will continue growing at10% to 15% annually during the 1990s.")
The current service paradigm for international telecoms is characterizedby nationalistic, monopolistic, hardware intensive carriers. These
facilities-based or 'Heavy '.2.arriers" must interconnect their respectivehalf-circuits to provide cad-to-end international service. Each carrieris essentially sovereign on its own soil and sets the charges fororiginating foreign calls in its home country.
Starting in the 1980s, technology and market liberalization began tochallenge this service paradigm. Advances in micro-electronics, fiberoptics and network software, on the one hand, and the entry of compet-ing carriers, on the other, have brought forward a new paradigm forend-to-end global service. The paradigm is being pioneered by a noveltype of 'Light Carrier'.
Traditional 'Heavy Canier' Model For international Telecoms
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* Gregory C. Staple is a communications lawyer with the Washington.D.C. law firm of Koteen & Naftalin. The views stated here do notnecessarily represent the position of Koteen & Naftalin or its clients.
581
The Light Carrier provides international service by reselling, rerouting,repackaging or reprogramming the offerings of Heavy Carriers. Pri-marily software based, the Light Carrier is a telephone company inname only. It is driven by services and applications, not facilities, and
it may not own a single trans-oceanic cable or satellite circuit.
The Heavy Carrier's services are sold in one country. The LightCarrier's market is global. Wherever located, the Light Carrier offerssubscribers direct access to network dial tones of the world's lowestpriced service providers via "800' (free phone) numbers, private linesor automated call-back equipment. Least cost global routing is thegoal. For the Light Carrier there are no national monopolies and acustomer's home country does not dictate call charges or the choice ofcarrier.
Figures 1 and 2 provide a network schematic, in abbreviated form, forthe two competing paradigms described above.
Implications
There are no truly global Light Carriers today. The new serviceparadigm sketched above is just that -- a generic pattern or anarchetype. But like other innovations driven forward by technologyand market demand the Light Carrier idea is gaining momentum.
Much of the paradigm's appeal is its "one world' vision. Technologi-cally, there already is one global network. Worldwide direct interna-tional dialing to at least 200 states and territories is now commonplace.The connection is nearly instantaneous and most telephone callers nei-ther know (nor care) whether the transmission is digital or analogue,is routed by cable or satellite, is handled by one carrier or a dozen, solong as the network works. And the price is reasonable.
But therein lies the rub. For many users, the price of internationaltelecommunications is plainly out of line with the falling cost of longdistance transmission and switching technologies. The gap between thepromise of a universally accessible and inexpensive global telecomsplatform and the current service paradigm, rooted as it is in national
carriers and monopoly charging practices, has led to growing economicand political tensions.
The dominant Heavy Carriers have sought to diffuse these tensionsthrough a series of modest tariff reductions.° They have also madean unprecedented commitment to adopt more cost-based charges(accounting rates) for interconnecting each other's half circuits °t Atthe same time, many Heavy Carriers have begun to 'lighten up' theirown service strategies or have committed themselves to developing amix of 'Light' and "Heavy' service options. See generally Part IVbelow.
These responses appear prudent. If the Light Carrier model provesviable, it could shift billions of dollars in annual revenues from nationaltelephone companies to new multinational service providers. As impor-tantly, Light Carriers might offer an alternative entry vehicle forcompanies from middle and low income countries which, until now,have not been able to aspire to the type of global presence which manyEuropean and North American carriers recently have won.
The remainder of this article looks more closely at the issues raised by
this paradigm shift. The next section, Part I, provides a fullerdescription of the current international service model and the pricingand traffic routing rules supporting it. Part II profiles the new para-digm and some of the regulatory questions affecting its future.
Part III examines several of the Light Carriers which have begun toexploit the new paradigm. Part IV focuses on the counter-strategies ofmajor Heavy Carriers to sell their dial-tones on a multinational basis.Part V offers some final thoughts on the importance of the new serviceparadigm for carriers and countries alike.
I. The Current Model For InternationalServices
Foreign telecommunications today can be characterized as a jointventure among independent national monopolies (or oligopolies). Theventure is supported by: (a) a facilities regime based upon carrier
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ownership of half-circuits in international cable and satellite facilitiesand (b) a financial regime which compensates or 'settles" carriers forinterconnecting their half-circuits and corresponding domes.ic networksthrough a 50/50 division of an agreed "accounting rate.'
These two regimes -- half-circuits and 50/50 settlements -- arecomplementary. Any proposal to depart from the current facilitiesregime inevitably impacts the settlements regime.
A. The Facilities Regime
The "half-circuit" regime for international facilities has its origins inthe monopoly structure of the telecommunications industry. It alsoreflects national security concerns regarding alien ownership of the"domestic" portion of international cable and satellite facilities.
A half-circuit typically extends from an international gateway (cablehead end) in one country to a notional midpoint (the halfway point) ina cable or a geostationary satellite. Because two matching half-circuitsmust be interconnected to provide end-to-end service, a whole circuitcannot be established absent the consent of each national carrier and/orgovernment. Even where competition exists, therefore, the regimemakes it physically impossible for a carrier from Country A to pick upand land traffic in Country B without a carrier from that countrysupplying facilities (and vice versa).
The half circuit regime has considerable appeal for carriers. Itencourages cost sharing and broad multilateral ownership of facilitieswithout jeopardizing exclusive national rights. Further, intercontinentalcables and satellites have significant scale economies. The bigger thefacility and the more the costs are shared, the harder it may be for analternative facility to be competitive. Ratebase regulated carriers argu-ably have an additional incentive to invest in such large capital-intensive facilities.
The current facilities regime also can readily accommodate intra-modal(satellite/cable) competition. International satellite communicationrequires an uplink in one country and a downlink in another. Equiva-lent half-circuits (radio channels) consequently may be separatelyassigned to each country.
The general application of the half-circuit regime and its entrenched.institutional status often suggests that the regime is mandated byinternational law. This is not the case. With certain exceptions, forsatellite communications (see below), the regime's legal force is largelya reflection of carrier contracts and national regulatory preferences, notinternational treaties.
Of importance in this regard are the new International Telecom-munication Regulations (ITR) adopted in 1989 by the then 160members of the International Telecommunications Union (ITU).'"The ITR, which prefigure the current paradigm shift, reflect acompromise. They provide that countries shall cooperate in establish-ing international facilities; that international routes shall be determinedby mutual agreement; that such routes shall not be unilaterally changed;and that carriers shall be compensated for interconnecting their servicesby way of accounting rates consistent with the Recommendations of theCCITT (International Telegraph and Telephone Consultative Commit-tee), the ITU's standards body X31
At the same time, the ITR expressly state that countries may enter into'special arrangements" (ie, alternative agreements) on telecommunica-tions matters which do not concern the ITU's members in general.Further, countries may allow non-carriers to enter into such arrange-ments.(6) Consequently, the ITR are arguably broad enough, somemight say wrre intended, to accommodate various facilities and servicesmodels; they reaffirm the status gio without prejudging the future.
The impact of the ITR thus far has been limited. They have yet to beratified by many countries, including the United States (at November1, 1992) and few "special arrangements' have been negotiated.Moreover, as noted, the ITR do not require any country to depart from
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the status quo with respect to the ownership of international satellite orcable facilities. Any new arrangements must be worked out on a case -by-csw basis in connection with a particular international satellite orcable facility.
In the case of satellites, the main challenge to the half-circuit conven-tion has been posed by private satellite operators based in the U.S. --eg, Pan American Satellite (PAS), Columbia Communication andOrion. If uplinks and downlinks can be built (or leased) in two ormore countries, private satellites can offer users end-to-end internation-al service. In contrast, the carrier owned multinational satelliteorganizations (Intelsat, Inmarsat, Eutelsat), which by treaty monopolizemost public international telecommunications, can only furnish half-cir-cuits to users. And Intelsat et al. do so indirectly, via national carrierswhich generally may not supply competing uplinks or downlinks oneach other's territory.°
There are no analogous treaties governing the provision of internationaltelecom cables. This has made it somewhat easier to plan and construct"private" telecommunications cables, such as PTAT, the trans-Atlanticcable complet....d in 1989. But, to date, neither private cables or satel-lites have led to a break from the industry's half-circuit convention.Private circuits have been leased primarily to carriers for public serviceand national regulators have barred carriers from acquiring wholecircuits so as to preserve the exclusive rights of local operators.
The current facilities regime thus has proven resistant to change,private facilities notwithstanding. Even so, at least a half dozen coun-tries are beginning to rethink the benefits of the status gpo.c"' Theconcerns are similar? Are national economies being hurt by limitinginvestment in international cable or satellite facilities solely to carriersand their proxies?
Should third parties (non-carriers) have direct access to circuitsprovided by Intelsat and its sister organizations? What about wholecircuits (ie, authorizing competitive uplinks and downlinks)? Further,where third party investment in international cables and satellites isprecluded, should users be granted unrestricted leaseholds? If so, onwhat terms may international leased lines be interconnected with thepublic switched telephone network (PSTN)?
The answers given to these questions in the years ahead will directlyaffect the future of any new service paradigm. See Part 11 below.
B. The Financial Regime
The network model described above -- sovereign carriers interconnect-ing at a midpoint -- is supported by a unique two-tier rate regime forinternational service. There is a wholesale rate for carriers and a retailrate for customers.
The wholesale rate is known as the accounting rate. It determines howmuch a carrier must pay its foreign correspondent for taking a callfrom the mid-point of an international circuit (or bordercrossing point)and terminating it. Accounting rates are negotiated bilaterally and aretypically stated in SUS or Special Drawing Rights (SDRs) per minuteof service. (The value of the SDR reflects a "basket" of major curren-cies; at 1 November 1992, 1 SDR = $1.40).
Carriers divide the accounting rate by one half to determinewhat eachis due. That amount is known as the settlement rate. Settlements be-tween carriers are based on net traffic balances. Separate accountingrates exist for different services (eg, telephone, telex, packet switcheddata). Transit rates are also negotiated for indirectly routed traffic thatuses the facilities of other carriers.
An example may help to clarify these rules. Consider, for instance,calls between the U.S. and the U.K. that are routed via AT&T and BT.AT&T's accounting rate with HT for peak period telephone service iscurrently .54 SDR ($.76) per minute. AT&T thus owes BT .27 SDR($.38) per minute for each outbound call. During a given accountingperiod, if AT&T sends more minutes to BT than it receives, AT&T
would owe .27 SDR x (the number of outbound minutes - inbound min-utes) to BT.
Telephone users do not pay accounting rates for international services.They pay retail or tariff rates. These retail charges are set by eachnational carrier, subject to domestic regulation.The settlement rate (the payment per minute to the foreign carrier)generally places a floor under the carrier's retail charge on a givenroute. However, some carriers may price their services below thesettlement cost per minute because the lost revenue is more than offsetby revenue from return traffic on the same route. Retail charges mayalso vary depending upon the time of day when the call is initiated, theaggregate level of demand and taxes.
In theory, accounting rates and public collection charges are linkedbecause they are both cost-based; CCITT Recommendations have longrequired that. But there is strong evidence that this cost nexus (andhence the linkage) has broken down. Costs have fallen. Reductions inaccounting rates and collection charges have varied greatly fromcountry-to-country.
In addition, because each of the world's approximately 200 nationaltelephone companies typically negotiates a different settlement rate --in private with each of its 199 foreign correspondents, pricediscrimination has arisen between routes having very similar costs.The extent of this discrimination is hard to gauge because fewaccounting rates have been made public. It appears, however, thatmany national telecom carriers have behaved like an airport authoritywhich charges airplanes a different landing fee based primarily on theircountry of origin rather than the landing facilities required.°)
Some examples may be instructive. So far as accounting rates areconcerned, a European carrier may pay a U.S. carrier a settlementranging from approximately $.27 to $1.00 for landing a minute oftraffic from Europe which traverse essentially the same internationalfacilities." More disturbingly perhaps, the public collection chargefor an international call between Europe and the U.S. may vary by200% or more depending upon where it is originated!'"
Similarly, within Europe, there are still large differences betwen tariffson the same routes. A 1991 survey by the Union of EuropeaaConsumers (BEUC) found that the minimum charge for a call fromBonn to Dublin cost 2.12 ECU and 3.11 ECU in the reverse direction;the minimum charge for a call from London to Madrid (using Mercury)cost 2.27 ECU as compared with 3.32 ECU f mi Madrid to Lon-don!" (At 1 November 1992, 1 ECU = $1.27)
It is this disparity between the cost of international service, on the onehand, and the level of accounting rates and collection charges, on theother hand, which has provided the Immediate impetus for the growthof a Light Carrier service industry. Arbitrage can be profitable. Yet,the ability of Light Carriers to prosper in the long term is likely todepend on more fundamental changes in network technologies and regu-lation. We turn to these interrelated issues next.
II. The New Service Paradigm
Communications satellites and cable systems need know no boundaries.Governments are defined by the boundaries they keep. Part I of thisessay showed how the current paradigm for international service seeksto accommodate this tension between technology and politics by givinggovernments and their surrogates (national carriers) the upper hand.
The emerging Light Carrier service paradise argues for a new banace.It would give a greater role to markets in determining entry and pricingpolicies for international services so that users can benefit more fullyfrom the boundary-less global electronic network.
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A. Technology: Faber Optics andIntelligent Networks
Since the 1970s, order of magnitude improvements in telecomtransmission and switching technologies have radically changed thefacilities-based constraints on international telephony. As recently as1975, the most modern trans-oceanic cables had a capacity of less than10,000 voice paths at a cost of $25,000 or more per path. Thegeneration of trans- oceanic fiber optic cables installed in the 1990s willoffer 600,000 or more voice paths with each path costing $2,500 orless!" The proliferation of very large capacity transmission facili-ties like these plainly calls into question the rationale for the pricingand access rules adopted in an environment where transmission capacitywas relatively scarce.
The story is much the same when it comes to telecom switchingsystems. Since the 1950s, approximately every three years the cost ofprocessing electronic bits has halved and the trend is a continuing one.Likewise, every three years the number of transistors which can besqueezed onto a single computer chip quadruples with four million setchips the current norm!") These developments have made it econo-mical for both carriers and users to build a vastly greater level ofintelligence into switching, network control and terminal facilities.
The rise of digital "intelligent networks' and the rapidly growing baseof "smart" terminals directly affect the current service paradigm. Atthe center of the "intelligent network" is a new common-channelsignaling system knows as Signaling System 7 (SS7). A digitalnetwork employing SS7 has one channel for transmitting routing,billing and service information and another channel for transmitting auser's message.
Where common-channel signaling is unavailable, telephone networksuse in-band signaling which sends the coded instructions necessary toset up a calling path through a network of switches and transmissionlinks over the same communications path used by the message itself.This link-by-link call setup process is slow and often needlesslyconsumes capacity for calls that are never completed. In-bandsignaling also requires that data on network numbering be stored (andcontinually updated) at every switching center in the network.
With common-channel signaling, call routing and billing instructionsare sent over a dedicated channel to all switching points in the networksimultaneously from the same Service Control Point (SCP). The SCPis in effect a large computer where all numbering, call processing andcustomer credit information are stored. SS7 thus allows a network toanalyze and route calls selectively through networks owned by differentoperators while at the same time providing the information necessaryfor the proper billing of those calls!'
The billing and data base functions supported by SS7 and relatedproducts also facilitate a wide variety of value added services, thirdparty payment plans and interconnection arrangements for independentservice providers. Beyond that, the multinational deployment of SS7and fiber optic transmission facilities can be synergistic.
Large users require a mix of transmission capacity to handle their needsfor networked voice, data and video communications. The capacity androuting required for each service may be different and may also varyfrom day-to-day. Networks must be able to sustain communicationrates that range from tens of bits to millions of hits per second; froma few keyboard character strokes to the real time exchange of largedata bases and full motion computer-bawd imago'.
Traditional analog transmission and switching systems ususily could nothandle these changing needs. Circuit capacity was limited and wasdedicated to a particular function; connections were often hard-wired;and the possible transmission paths through the switch were boundedby the physically created electro-mechanical connections which couldbe made.
In contrast, software controlled digital switches have almost infiniteflexibility. Switching is a function of the software program. Theinstructions can be changed and adapted to accommodate new routes.Switches can also be used to partition the bandwidth assigned to aparticular user (or carrier) thereby making more efficient use of highcapacity transmission facilities.
These network signaling and switching capabilities have been comple-mented by a new generation of 'smart" terminal equipment. This hasfurther decentralized (and, in part, privatized) carriers' historicalmonopoly over switching and call routing. Private Automatic BranchExchanges (PABXs) are programmed to select the least cost internation-al route; facsimile machines and voice mail systems use store andforward technology to time shift transmissions and to convert basicservices to enhanced ones; software entrepreneurs design automatedcall-back devices ("boomerang boxes') to facilitate call arbitrage.
In sum, plentiful transmission capacity, "smart terminals' and'intelligent networks' make it increasingly possible to separate theownership of transmission and switching facilities from the ownershipof the service provider, and hence to promote competition on a wholenew scale. Whether or not these possibilities are realized dependslargely on how regulators respond.
B. Regulation: Making TechnologyAvailable To Users
Over the last decade, the public interest burden generally has shiftedfrom those who believe countries are best served by competing longdistance telecommunications to those who believe that there should bea sole supplier. Competitive long distance transmission networks forvoice telephony have now been licensed in several nations, includingsome where the base of exchange lines is quite limited (New Zealand,the Philippines). And, other countries are considering a like course.
However, this essay argues that the technologies described above aremaking the licensing of a second or third carrier less and less importantin determining the scope for services competition. Increasingly whatmatters, especially for international services, is the scope for thirdparties to use existing facilities -- to have direct access to gateway earthstations and satellite circuits; to lease international cable capacity inbulk; and to interconnect leased facilities (satellite or cable) with thepublic switched telephone network (PSTN). Moreover, as discussed asPart M, as credit card payment schemes and international directdialing become ubiquitous, a range of (ie, compering) foreign telephoneservices will be available in every country, notwithstanding the policyof the national regulator regarding competing facilities licenses orresale.
Assuming for the present that regulators are sovereign, or nearly so,however, what steps should they take to make the benefits of today'sglobal electronic network more widely available? How much liberaliza-tion is in the public interest and how should it be accomplished?Should liberalization aim tc repeal carriers' historical monopoly overinternational facilities so as to promote competition on a whole circuit(end-to-end) basis as exists, for example, in the airline industry? Orshould competition be introduced in a form which preserves theindustry's current structure?
Do national security, trade or foreign policy considerations makecompetition for international services a special case? Or are the sameeconomic and consumer arguments which favor competition for longdistance services domestically of equal application to internationalservices?
Not surprisingly, governments have differed in their answers to thesequestions. But, there are some common elements.
As an initial step toward satisfying user demands, several governmentshave tried to ensure that international service is more cost based byrequiring carriers to unbundle (tariff separately) their facilities (eg,earth stations, satellite circuits, terrestrial tails). The U.S., Australia
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and various European states have also permitted international satelliteservices to be supplied competitively, thus allowing national carriersand users more flexibility in configuring their networks.
Second, govt rnments have begun to allow non- carriers to have anownership interest in international facilities. As noted earlier, owner-ship of public international satellite facilities is generally limited bytreaty to government signatories or their designates. But the ownershipof undersea cable circuits is typically decided by contract and, inprinciple, ownership units -- known as Indefeasible Rights of Use(IRUs) may be held by carriers, users or independent investors.Even though these IRUs are only for half-circuits (ie, must be matchedwith a foreign IRU to provide end-to-end service), the greater the rangeof facilities owners, the greater the scope for services competition.
In the United States, the FCC recently went one step further inliberalizing access to international cables. In June, 1992, the agencyruled that henceforth companies holding cable IRUs would be permittedto transfer their interests to other parties at a market price instead of atcost (ie, net-book value), which often made any transfer unprofit-able."' Although this decision only affects U.S. cable half-circuits,other governments may follow suit, thus creating an internationalmarket for IRUs and greatly facilitating access to these bottlenecktransmission facilities by new service providers.
Third, and probably of most significance, governments have progres-sively liberalized the terms upon which international private lines(IPLs) -- cable or satellite capacity which is dedicated to a single user- may be resold and interconnected with the PSTN. IPLs offer largevolume users an end-to-end circuit at a much lower cost per call thanthe public network because 1PLs are priced at a flat monthly rate byeach national carrier providing one-half of the through circuit. An IPLthus may be economic if it is used as little as three or four hours a day.
IPLs have long offered the potential for corporate users (or theirnetwork managers) to bypass the established carriers in picking up andlanding international traffic. Until recently, however, a variety ofinternational and national rules haver prevented customers from usingIPLs to transform themselves into carriers. Of primary importanceinternationally were the CCITT's D-1 series of Recommendations.Since at least the 1940s, the CCITT Recommendations, which mostcountries considered binding, prohibited users from connecting aninternational leased circuit with the PSTN at both ends or from freelyreselling capacity to third parties.") But, in 1991, after years ofcontentious debate the CCITT voted to liberalize the D-1 Recommenda-tions. The new D-1 series basically lets each country decide for itselfwhether international circuits can be subleased or interconnected to thePSTN at one or both ends."'
The unrestricted resale of IPLs, often called international simple resale(ISR) is crucial to the development of the new Light Carrier serviceparadigm for new and old carriers alike. This is so because ISRenables a company to offer end-to-end services without having to investin expensive cable or satellite facilities, but also because it will giveestablished carriers the opportunity via leased lines, to bypass theirtraditional correspondent relationships. It is this latter possibility, theprovision of relatively inexpensive end-to-end service by a single'national' carrier, that is responsible for much of the excitement andthe caution with which international resale has been treated.
Since the CCITT's action, a number of countries -- Canada, the U.S.,the U.K., Australia, Sweden and New Zealand -- have agreed to ISRin principle. Competition law may lead to similar initiatives withinother members of the European Economic Communities (EEC). Yetimplementation of ISR is likely to proceed slowly. At this writing(November 1992) ISR has been finally authorized only between theU.S. and Canada and between the U.K., on the one hand, and Canada,Australia and Sweden, on the other."
In each country reciprocity is the watch word for 1SR. Unless areasonably equivalent freedom to resell IPLs is available at the foreignend of the circuit, ISR will not he approved. Moreover, reciprocity
may well be judged on commercial terms; forma' regulatory equiva-lence may be insufficient.c'''
Beyond that, ISR does not automatically mean more competition. Thatdepends upon the rules for interconnecting international resellers withthe switched network. It is a two step process. To be fully competi-tive, resellers need transmission capacity plus reasonable access to thedominant carriers' higher level switching and database functions -- thatis, to the intelligent network. Unless a reseller's service offerings caninterwork with the network database of the main carrier, its ability tooffer innovative routing, billing and service features may be compara-tively limited.
The need for competitive access to these network services is not uniqueto international resellers. The issue is already being considered byregulators in the context of domestic proceedings concerning OpenNetwork Access (ONA) and Open Network Provision (ONP). ISRmerely adds a further dimension to this regulatory equation.
In addition, ISR also forces regulators to consider how a new systemof domestic interconnection agreements can coexist with the currentsettlements regime. International carriers are now paid a negotiated"settlement" rate per minute for landing foreign traffic. As notedabove, if ISR is legal, a foreign carrier could opt to land its traffic onits own IPL and negotiate a separate agreement for domestic carriagewith the most competitive service provider available.a" The impactof this type of international carrier bypass has yet to be thought throughby regulators.
Ill. The Emergence Of The Light Carrier
A. Managed Networks
The largest Light Carriers are currently companies which manage thecross-border private line and data processing requirements of majormultinational businesses. Leading players -- Electronic Data Systems(EDS), Computer Sciences Corporation (CSC), General Electric Ser-vice Company (GEIS) account for several billion dollars in annualrevenues.
These outsourcing vendors (so named because their clients havecontracted-out business to them) usually own limited transmission andswitching facilities. The outsourcing vendor is a specialist at bundlingand unbundling the tariffed offerings of other carriers; configuring net-works; optimizing routing; and integrating widely dispersed intra-corporate networks having different operating standards.
The network which GEIS manages for GE alone covers 1800 locationsin over 35 countries. In 1990, it accounted for over 750 millionminutes of switched traffic including more than 20 million minutes ofinternational traffics=' But, despite their size, most outsourcingvendors see themselves as customers rather than competitors of theinternational telcos. That could change.
So long as IPLs could not be resold and interconnected freely with theswitched network, the line between private and public networks wasfairly clear. Outsourcing companies operated on the private side;carriers operated on the public side. When these restrictions end, theclients and traffic bases of the outsourcing companies might beleveraged to launch a broader business. The technical and operationalskills of some outsourcing vendors rivals that of many smaller carriers.So too does their international reach.
B. Value Added Carriers
A second group of Light Carriers may evolve from the growing rangeof companies now providing international value added or enhancedservices. The value added carriers overlap, in part, wit networkmanagement companies such as EDS and GEIS. They can bedistinguished insofar as services are offered to the general public.Typical value added service offerings include E-mail, enhanced fax,
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voice mail and on-line computer services.
The 1991 market for international value added services, broadlyconstrued, was approximately $2 billion. BT Tyrnenet and Sprint Neteach had about 25% of the market; Infonet (an MCI, France Telecom,DBP Telekom led-consortium) and AT&T's !stet (U.K.) accounted forapproximately 8% each; network managers (IBM, GEIS) accounting formuch of the remaining market.°)
Services offered by these value added carriers are generally boundedby the degree of service competition in the least liberal market (ie,international VAN agreements only include services which have beenliberalized in both countries.)°') As this boundary line changes, sotoo will the business of these companies.
Most value added carriers will probably continue to service the nichemarkets they have developed. Others will use the value added businessas a stepping stone to the market for basic services and, likeAT&T/Istel in Europe, will construct alternative network platforms forthe futureP) In that way, these carriers may straddle both worlds -- by deploying a facilities-based (Heavy) or non-facilities based (Light)strategy depending upon local market conditions.
C. International Resellers
Historical price differences between the wholesale (private line) andretail (public switched) tariffs for international services have long sug-gested that a profitable 1 nsiness might be built by reselling thewholesale ser -e to individual customers below prevailing retail rates.This potential profit has been responsible for much of the attention ISRhas received.r's)
In the long run, however, tariff arbitrage, may not be so important toLight Carriers as the opportunity for network access which ISR offers.With limited exception, as described in Part II, the "bottleneck"transmission facilities of the global network -- the trans-oceanic cablesand satellites can not be owned by non-carriers. For third parties tohe able to buy an unrestricted leasehold interest in these facilities thusrepresents a major departure from the old order.
Simply put, ISR opens up the possibility for a new kind of huh andspoke network architecture based on international private line bridgesbetween the lowest priced carriers in a region. For North America, thehuh is likely to he the U.S. (or Canada, on certain routes); for Europe,the U.K.; for Asia, Japan or Hong Kong or possibly Australia. Eachof the hubs of this triangular network would have "spokes" to othermarkets in the region via '800' numbers, private lines or automatedcall hack devices. See Figure 2.
1SR is also important to the evolution of the Light Carrier modelbecause resale may provide a means for smaller carriers and carriersfrom developing countries to establish a global presence. A nationalcarrier wishing to send or receive traffic from a foreign country nowmust buy its own cable or satellite circuits or rely upon other carriersand pay the associated transit charges. If ISR and third-countryhubhing arrangements become more widely available, third countrycarriers may he able to increase greatly their global connectivity whilereducing transit charges.
There are over 200 countries and principalities which have telephoneservice. Full global connectivity thus requires a country to make ar-rangements for handling traffic on at least 199 different bilateral routes.Yet, even in a satellite age, the dictates of geography can make directinterconnection impossible (eg, because the two countries are not withinthe same satellite footprint). Indirect routing, via one or more thirdcountry carriers, is thus the rule.
Except in Western Europe, transit traffic was once a relative small partof the global traffic flow. But in the last two decades, trade, invest-ment, tourism and emigration have broadened most countries' foreigntraffic streams. This has created new demands for global connectivity.In this environment, the growing market for innovative third country
transit services could eventually stimulate ISR as much as the retail de-mand for cheap global telephone calls.
D. "Boomerang Boxes": Automated Call-Back Ser-vices
The country-by-country adoption of international direct dialing (IDD)has been singularly important in boosting foreign calling. IDD largelyprivatizes the call set-up process by shifting control from telephonecompany operators to users. By enabling users to make 'call-me-back'arrangements anonymous, IDD also gave users control over a call'sorigination point -- a matter of some significance when the price for agiven route may vary by 100 or 200% depending on where the call be-,gins.
Enter International Discount Telecommunications (IDT), one of themost publicized telecom 'start-up' companies of the 1990s.crn IDTis the archetypical Light Carrier; it has no transmission facilities in theU.S. or any other country and very little other hardware. IDT'sbusiness is based on the fact that, on many routes, U.S. internationaloutbound calls cost the user substantially less than calls in the otherdirection.
For a monthly line fee, IDT sells foreign subscribers a U.S. telephonenumber associated with a dedicated port on an 1DT call conferencingswitch, which works like a boomerang. The subscriber calls the U.S.number and hangs up after the phone rings. IDT's switch isprogrammed to dial-back from the U.S. to the subscriber's overseastelephone and, when the phone is answered, conference in a separateU.S. telephone line. The foreign caller then has a U.S. dial tone andcan use the line to complete a call in the U.S. or any other country atU.S. rates.
IDT's model is not unique. Several other companies (Viatel; CreditCard Calling Systems; Gateway USA; Metromedia) reportedly providesimilar *boomerang box' services. Moreover, in theory, the IDTmodel can be used to provide a public line bridge between any twomarkets having significant differences in their foreign call tariffs.
The public line telecom bridges between countries offered by IDTcomplement the private line bridges now used by other Light Carriers.In terms of the larger paradigm, these two kinds of bridges are thespokes of the Light Carrier network; they route subscriber's traffic toand from the carrier's low-cost regional hubs. The regional hubs, inturn, are linked via resold private lines. Again, see Figure 2.
IV. The Heavy Carrier Response: From Virtual Networks ToCredit Cards
One should not assume that Light Carriers will win the race to exploitthe new international facilities and pricing model described above. Theestablished carriers are also trying to adapt the model to their ownneeds. The last part of this essay profiles some of their initiatives.
A. Virtual Private Networks
International Virtual Private Networks (VPNs) are one of the HeavyCarriers' primary responses to the new economic and technologicalrealities of the 1990s.'
A VPN is a network within a network; it is logically" separate ratherthan physically so. The VPN relies upon the software built into thedigital switches and billing facilities of the public network to givecustomers the unlimited point-to-point service and calling optionsordinarily associated with private links.
Users access the VPN via a domestic private line to the switch of aparticipating local carrier. The user can then adopt a seven digit globaldialing plan to obtain two-way connections between its home office andvarious overseas sites, suppliers and customers. The rates for VPN arehigher than private line services but are significantly less than publictariffs.
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In the United States and, to a lesser extent in the U.K., VPNs haveattracted a growing number of corporate users. AT&T and other majorcarriers have sought to build on this demand by extending their VPNofferings overseas and, in so doing, to migrate the traffic of some oftheir largest international private line customers back to the publicswitched network.
Why can global VPN carriers afford to undercut their internationaltariffs for such large traffic streams which although ' virtually" privateare also "virtually' public? The answer is that international VPNs arepublic services in terms of the international settlement process. AT&Tand its global VPN partners have simply agreed to settle accounts forVPN designated traffic at a discounted accounting rate, allowing someof the savings to be passed on to customers.
VPNs are also a compromise in one other important respect. Theservice preserves the sovereignty of each carrier's network; traffic ishanded over at a midpoint because each carrier merely furnishes theother a virtual private link; no physical facilities are actually leased tothe foreign carrier or to the end-user.
The VPN is thus an acceptable and, in many ways, an ingeniousvehicle for bridging the two service paradigms. VPNs do not requirenew international facilities; they make available network intelligence tothe user; move carriers down the road toward global pricing; placeadditional downward pressure on switched accounting rates and offera valuable service. Their attractions should not be underestimated.
B. Calling Card Programs
Alternative billing and call set-up services provide another popular wayfor major carriers to extend their networks to foreign countries withoutactually doing so.
International calls have traditionally been billed to the terminal wherethe call originates and, for obvious reasons, national carriers normallydo not extend credit to transient foreign customers. Hence, with thefirst telephone call home, many foreigners learn that the 'globalvillage' is in reality a crazy-quilt of national telephone companieswhich operate on the pay-as-you go principle in the local currency andunder local tariffs.
In 1989, the CCITT adopted a set of new Recommendations (E. 118)to widen the use of telephone credit cards which could change thesequaint national practices forever.m Some of the options which thesenew Recommendations will foster include the following:
1. Reciprocal recognition of carrier callingcards.
Telephone company credit cards today are company-specific. They canbe used only to charge calls over the issuing company's network or forhome-country direct services. The new E. 118 Recommendations lookto reciprocal recognition of national calling cards. Full implementationof this Recommendation, which requires countries to issue new cardsand user identification numbers, is not expected until at least 1994. Butseveral carriers have already started service trials so that card holderscan bill both domestic and international calls in foreign countries totheir local calling cards. (eg, a France Telecom calling card will heaccepted by AT&T in California).
2. Credit card payment plans.
The new CCITT Recommendation also contemplate the widespread useof hank credit cards for international telephqne service, subject toagreement with local carriers. In 1990, Visa and Mastercard bothbegan to explore these options. The largest Visaphone andMasterphone programs rely upon agreements with U.S. carriers (MCI,Sprint). U.S. and foreign customers of these companies can use theirVisa/Master cards to make domestic and international calls -- includinghome-country direct and third-country calls -- from almost any'foreign' state (eg, an MCI customer can use a Visa card to call from
Greece to the U.S. or from Greece to England). BT will launch asimilar program for the four million U.K. Visacard holders in1993.m
These credit card programs compete with carrier calling cards. For theconsumer, however, the result is much the same competition. Ifyour home country's international rates for a given route seem toohigh, your credit card could give you the option of "originating" a callon the network of any lower priced foreign carrier which will honor it.
3. Third country calling programs.
To complement their calling card and credit card programs, U.S.carriers also have begun to pioneer third-country calling programs.AT&T and MCI have been the most aggressive. These programs takethe carriers popular home-country direct programs one step further byenabling a customer to use her calling card in Country A to callCountry B by first calling the U.S. and having the U.S. carriercomplete the call to Country B. AT&T's advertisements put it thisway: "Germany to Hong Kong. Bolivia to Egypt. India to Israel.These kinds of phone calls haven't always been easy to make. ... Nowwith an AT&T card, they can be. AT&T World Connect Service It'sGot The Whole World Talking'.°4
Other carriers and regulators are talking too. One reason is that theU.S. based third-country calling programs have the potential forundermining traditional call routing and settlement patterns. As notedearlier, the 1989 International Telecommunications Regulationsarguably bar carriers from unilaterally changing call routing agreementsby, for example, hubbing traffic through a nearby third country toreduce the cost of outbound settlements. Some carriers take the viewthat third country call plans which route bilateral traffic (Italy -
Argentina) via the U.S. (substituting a U.S. - Argentina settlement ratefor the Italy - Argentina rate), have the same impact and hence shouldbe barred absent the consent of all the countries involved, which U.S.carriers say they have secured.
Such complaints notwithstanding, the billing mechanisms for these andother calling card services have been carefully integrated into theestablished accounting rate system. Third country direct and creditcard calls originated overseas are treated as outgoing calls from thecard holder's home country for settlement purposes. A home-countrydirect call from Italy to the U.S. thus leads to settlements being paid bya U.S. carrier to Italcable for landing' the call.
The widespread acceptance of calling cards and bank cards forinternational telephone service could be dramatic. As these cardsproliferate, the tens of millions of telephone users who live in a Thi"hprice" foreign call zones will, via country-direct or equivalentinternational "800' numbers, have direct access to the dial tones of thecarriers in "low priced" zones to complete their international calls.
The global base of Visa cards in 1991 exceeded 280 million, more thandouble the estimated base of telephone calling cards. By 'monetizing'this card base for telephone service, Visa and its participating telcosarguably have the financial power to substitute their internationalfacilities and price platforms for those of their smaller rivals. Still thisstrategy has its risks.
The entry barriers are modest. Competition may develop from any lowcost carrier which can strike a deal with a reliable financial partner toprocess the bills of its foreign credit card customers. And, if a nationalcarrier is willing to honor one company's credit cards, regulators willalmost certainly require it to accept the credit cards of its competitors.
Cardphone programs also risk transforming credit card issues intopotential resale competitors. Visa International has been careful toavoid doing business with resale carriers and to preserve its reputationas a global business owned by local card issuers. But as the Visaphoneprogram grows in size, the incentives to take a more direct stake in thetelecom business itself could prove irresistible for some of thecompany's affiliates.
589
C. Outsourcing Ventures
As the prospect of 1SR draws closer and the network managementbusiness continues to enjoy steady growth, several major carriers havebegun to look more closely at getting into these businesses too. Doingso might mean competing against customers or long-timecorrespondents. Yet it might forestall additional competition as well asproviding a new Light Carrier option for the future.
Syncordia is perhaps the best known "Light Carrier' hedge to date.Based in Atlanta and majority owned by BT, Syncordia was foundedin 1991 to provide global telecom services to major multinationals.The company has candidly described itself as a "reseller." It's goal:To provide "end-to-end virtual networks for intra-corporatecommunications...integrating both voice and data," between theworld's major business centers.'m
At this writing, Syncordia is still in a start-up stage. It has not beenauthorized to engage in 1SR in any major market. Nor has it been ableto bring in the French, German and Japanese partners it initiallycontemplated.
1,--ss visible than Syncordia is the ad hoc effort of Cable & Wireless totie together affiliates in the U.S. (CWCI), H.K. (HK Telecom Inter-national), the U.K. (Mercury), Japan (IDC), the Philippines (EasternTelecom) and Australia (Optus). The C&W companies already offera Global VPN service in competition with BT, AT&T and KDD. Butalthough the C&W group has a physical network capable of providingend-to-end service among the Far East, North America and Europe, theindividual C&W companies appear to have interconnected their nationalnetworks at arms-length. That is, C&W group traffic is picked up anddelivered under the same settlement terms as are offered to non-affiliated carriers. National regulators have required no less.
The big question is whether ISR will change that. If Mercury andother C&W affiliates must resell their own facilities, will C&W alsodevelop a pan-national resale product, outside the current VPN categoryto compete with the likes of Syncordia?
D. Wireless Services
The potential for trans-national wireless carriers, satellite linked orotherwise, deserves separate attention. As yet, cross-border cellularradio services are still in their infancy. However, thanks to thepioneering efforts of Bell South, Cable & Wireless and Inmarsat,among others, within a very short time, innovative financial and legalarrangements for international wit Jess telephony may show the wayforward for terrestrial networks.
Bell South, for example, recently launched end-to-end internationalroaming for South American cellular customers in other Americanmarkets. Cellular roaming is also possible now between Hong Kongand neighboring Guangdong province in China. The 1993 EuropeanCommission Green Paper on mobile communications is also expectedto break new ground on the provision of cross-border mobile serviceswithin the Community. Although many cellular carriers are owned byof affiliated with Heavy Carriers, most operators realize that becausecellular services have not grown up in the accounting rate, half-circuitworld of terrestrial carriers, new financial arrangements for end-to-endservice might be created.
The deregulation of end-to-end international service is also beingbrought forward by Inmarsat's ambitious plan, known as Project 21, tooffer a range of affordable personal mobile communications services,including a hand-held satellite phone service, in the late 1990s.Inmarsat, collectively owned by over 60 private and public telecomsoperators, has long provided international telecoms services viadedicated satellites to the world's shipping fleets. In recent years,Inmarsat has also offered telecoms service to the international airlinecommunity an initiative which has already transformed numeroustrans-oceanic jumbo jets into stateless telecoms carriers for those onboard.
Inmarsat's aeronautical program has been complemented by theintroduction of progressively smaller and more versatile mobile satelliteterminals. In 1991, Inmarsat introduced the Inmarsat-C, a datamessaging service which uses a briefcase size terminal to transmit telexand E-mail information via satellite. The Inmarsat-M terminal, theworlds' first portable mobile satellite phone, began service in 1992.And, in 1995 or 1996, if Inmarsat's owners can agree on the newgeneration of satellites required, Inmarsat will roll out the Inmarsat-Pterminal, a hand-held satellite mobile phone with global coverage whichwill also double as a cellular radio phone where cellular coverage isavailableP)
As with Intelsat, the current range of Inmarsat mobile services are allprovided via Heavy Carriers and traditional accounting rate charges ortheir equivalent apply. Moreover, ship to shore and air to groundinternational satellite services are typically more expensive thanalternative shore to shore links. But as these costs fall and the publicbecomes aware that mobile phones with global reach have now arrivedthe old pricing arrangements are likely to break down."
V. Conclusions
This essay has argued that the international telecom service business isshifting paradigms. The old paradigm -- nationalistic, monopolistic,hardware intensive, tied to half-circuits -- supported the rise of theHeavy Carrier. The new paradigm multi-national, competitive,software driven, offering end-to-end service -- is being pioneered bythe Light Carrier.Q5)
This paradigm shift has been anticipated by other observers. In 1986,for example, Peter Huber noted that as switching costs fell relative totransmission costs, competition among private and public switcheswould increase and the pyramid-like architecture of thetelecommunication network would become more geodesic." In asimilar vein, Eli Noam later suggested that the evolving domestic
network might be best described as a *network of networks," publicand private." The changing structure of the international networkreflects these trends.
The thesis of this essay is not that Light Carriers will soon displaceHeavy Carriers or that facilities ownership is no longer important. Tothe contrary. A facilities-based competitor will almost always be betterpositioned to mount a more lasting competitive challenge wheretransmission expenses constitute a significant portion of the end-to-endservice cost.
By comparison, the profitability of a Light Carriers will depend uponthe size of the resale margin provided for in the price of leasedfacilities and may be at risk whenever the underlying Heavy Carrierreduces these margins. For that reason alone, a Light Carrier strategybased solely upon arbitrage opportunities and which does not offercustomers additional value, in terms of access, billing, service optionsor otherwise, may not be sustainable over the long run.
The evolution of the international service industry is thus likely to bemarked by a combination of Light Carrier and Heavy Carrierstrategies. (See Figure 3.) Light Carriers will seek to gain bettercontrol over their long run costs by contracting forward for bulktransmission capacity and by entering into joint ventures with facilities-based carriers. They will also seek to pare down their use of morecostly transmission facilities by using creative hubbing, routing andbilling arrangements (ie, by investing in switching rather thantransmission capacity at the margin).
Conversely, Heavy Carriers will attempt to meet the Light Carrierchallenge in the 1990s by leasing instead of owning capacity and byoffering their own brand of global service. Beyond that, a HeavyCarrier buy-out of the more successful Light Carriers can not be ruledout.
Figure 3
"HEAVY' C. 4itilik0.i."(facilities sedj:»j:;
Itre*RitlE1.5".:"..]: . :':
(resellerss addett "*.eictr'5'':''ii6tse.rbrit*)`.::.>
'-'"Illaqtal CA:IRIERS'!--:(001.i.',.'951PIlid.Y.,...-.`:',41:,.iiiiluisiiliirrier-S).
AT&T Electronic Data Systems (EDS) Syncordia[largest international [private line/data processing [BT owned outsourcing vendor;
carrier; facilitieslimited primarily to U.S.]
network manager] private line reseller]
BT International Dis.;ount Infonet/BT Tymenet[dominant U.K. carrier; Telecommunication (IDT); Viatel [value-added service providers]
few facilities outside U.K.] [automated internationalcall-back services]
C&W Fonorola Corp.; ACC Corp. INMARSAT[multinational carrier [international private line resellers] [carrier owned satellite consortiumwith facilities in over offering end-to-end international
30 countries] service for mobile users;local PSTN connection required]
INTELSAT Visa International Bell South[carrier owned satellite [VisaPhone program will make Visa [national cellular provider;
consortium offering half- a global calling card and international roaming betweencircuits to national carriers] potential service reseller] North and South American
franchises]
589
How rapidly and how far Light Carriers will be able to go in.establishing themselves and in securing a sustainable operating structurefor the future will depend largely upon the regulatory environmentwhich these carriers face in the principal European, American andAsian markets. Regulation (not technology) is crucial. A progressiveevolution of the market for international telecom services simply willnot occur absent a further commitment to liberalization in these keyregions.
The last two years has seen a number of encouraging steps bothnationally (eg, regarding resale) and internationally (eg, regarding theflexible use of satellite systems). But much remains to be done if themarket is to have access to the best which both the Light Carrier andHeavy Carrier paradigm can provide.
The paradigm shift described in this essay also poses a fundamentalquestion for carriers about their future strategy and organization. Thisis especially true for smaller carriers which are just beginning to playan international role, whether in Central Europe or South East Asia.Is a carrier's strategy for international service based on the regulatoryand technological platform of the 1960s or the 1990s? Is the modelAT&T or EDS? BT or Syncordia? France Telecom or Sovintel? IBMor Novell and Dell Computers?
We probably don't know yet what the most successful type of LightCarrier will be. As suggested earlier, some will be new entrepreneurialefforts, following on from network integrators. Some may come from
the multi-national ventures of cellular telephone companies. And othersmay be software driven start-up ventures. In fact, the chances are thatthe 'Apple Computer' company of the Light Carrier industry has notyet been incorporated. What is clear though is that the old paradigmis no longer the only model available and in twenty years time may noteven be the dominant one.
For a country-by-country review of the market for internation-al switched telephone traffic, see G. Staple (Ed.),TeleGeoeraphy 1992 (International Institute of Communica-tions, London, 1992).
(2). Over the last 18 months, British Telecom, DBP Telekom(Germany) and France Telecom have all reduced their ininternational all charges 10-25%, with the greatest reductionsoccurring on inter-continental routes.
(3). See e.g. the new D. 140 Recommendations on AccountingRate Principles For International Telephone Services, proposedin June 1992 by Study Group III of the International Telegraphand Telephone Consultative Committee (CCITT) and adoptedin October 1992 by member administrations of the Internation-al Telecommunications Union (ITU). They provide inter aliathat 'administration should seek to achieve cost-orientedaccounting rates in an expeditious manner, recognizing thatthis may need to be implemented on a scheduled basis [i.e.,"over a period normally of one to five years") where the levelof reduction required is significant.'
(4). International Telecommunication Regulations (ITU, Geneva1989), Articles 1.1, 3.1, 3.3, 6.2 and Appendix 1, Sections1.1 and 1.4. See also Convention Of The InternationalTelecommunication Union (ITU, Geneva 1990), Articles 29and 30.
(5). See 'General Tariff Principles Charging And Accounting inInternational Telecommunications Services' CCITT BlueBook, Vol. II, Fascicle II.1, Recommendation D.150 (ITU,Geneva, 1989).
(6). See International Telecommunication Regulations, cm cit, note4, at Article 9.3.
590
(7). See eg, Agreement Relating to the International Telecommuni-cation Satellite Organization (Intelsat) 28 U.S.T. 3813,T.I.A.S. No. 7532, Article XIV, and the companion IntelsatOperating Agreement. For further discussion of these restric-tions, see Green Paper on a common approach in the field ofsatellite communications in the European Community(COM(90)490 final, 20.11.90), pp. 31-32; 100-104.
(8). For example, the European Commission (EC) satellite GreenPaper, op cit, note 7, proposes to abolish the exclusive rightsof carriers within the Community as regards the provision ofinternational satellite uplinks and downlinks and to provideusers unrestricted access to international space segmentcapacity. Interconnection with the public switched telephonenetwork (PSTN), however, may be restricted by memberstates. In 1984 the U.S. determined that separate (non-Intelsat)international satellite systems were in the public interest andin 1991 committed itself to the complete elimination of therestrictions on the interconnection of such systems with thePSTN by January 1997. In June 1992 the Intelsat Board ofGovernors took a significant step toward implementing theU.S. agenda by agreeing routinely to approve the use of up to1250 64 kilobit per second circuits per separate satellite systemfor services interconnected with the PSTN. See Telecommu-nications Reports, December 2, 1991, pp. 14-17 and June 22,1992, p. 30. Australia and the United Kingdom have alsoliberalized the provision of international satellite earth stationand space segment capacity. In Germany, as of May, 1992,the Ministry for Post and Telecommunications, has stated thatsatellite network operators and service providers may shop forsatellite capacity from any member of Eutelsat, Intelsat orInmarsat, not only DPB Telekom. See Communications LawNewsletter (Denton International, London) Issue 10, Septem-ber 1992, p. 2.
(9). See generally Organization For Economic Co-Operation AndDevelopment (OECD), Working Party On TeleconunuPicationand Information Services Policies (TISP) 'International Tele-communication Tariffs: Charging Practices And Procedures,'DSTIACCUITSP(91)2, 18 April 1991, and "Pricing Princi-ples And International Telecommunications,'DSTUICCPMSP(91)3, 18 April 1991, prepared for the 13-14May 1991 OECD Meeting of the Ad Hoc Group of Experts onInternational Telecommunications Charging Practices andProcedures. See also 'Analysis of Telephone AccountingRates,' DSTI/ICCPMSP(92)3, 27 April 1992.
(10). See eg, "U.S. Telephone Accounting Rates with OECDCountries (March, 1992)," FCC, Industry Analysis Division(Washington, D.C. 1992).
(11). See eg, 'Peak Rate International Telephone Calls BetweenOECD Member Countries (December 1991)' (OECD, Paris,1992).
(12). See "Telephone Services. In the EEC.' (Bureau Europeandes Unions de Consummateus (BEUC), Brussels, September1991).
(13). See eg, G. Staple (Ed.), TeleGeography 1992 2P cit, note 1,at p. 65.
(14). See eg, L. G. Tesler, 'Networked Computing in the 1990s'Scientific American, Vol. 265, No. 3, September 1991, pp.86-93. See also G. Gilder, Microcosm The Ouantum RevolutionIn Economics And Technolo2y (Simon & Schuster, N.Y.1989).
(15). An overview of SS7 and 'intelligent networks" is provided bythe FCC's Notice of inquiry, In the Matter of Intelligent Net-works, CC Docket No. 91-346, FCC 91-383, releasedDecember 6, 1991. As discussed therein, the services offered
by a network employing SS7 depend largely on the softwarefunctions embedded in network Service Control Points (SCPs).Third parties desiring to offer competitive options thus requireaccess to these SCPs or the ability to operate independent call-control software (non-network SCPs) in conjunction with theSCPs of the main carriers. See also The NTIA InfrastructureReport Telecommunications in the Age of Information, NTIASpecial Publication 91-26, (U.S. Department of Commerce,Washington D.C. 1991) pp. 109-119 and Competition andChoice: Telecommunications Policy for the 1990s A Consul-tative Document, (U.K. Department of Trade and Industry,London, 1990), pp. 20-23.
(16). Report and Order, CC Docket No. 8745, FCC 92-286,released July 22, 1982.
(17). See CCITT Blue Book, op cit, note 5, Recommendation D. 2.
(18). See Revised CCITT Recommendation D. 1, "General Princi-ples for the Lease of International (Continental and Interconti-nental) Private Telecommunications Circuits and Networks,"Section 3.1.1 and 4.1. (ITU, Geneva, May 1991).
(19). See Memorandum Opinion, Order and Certification (In reApplications of fONOROLA Corporation and EMI Communi-cations Corporation) FCC 92-464, released November 4,1992; New Competition Aims To Cut Cost Of Phone CallsTo Australia, Canada and Sweden,' Press Notice, Departmentof Trade and Industry, U.K., 25 September 1992.
(20). In the U.S., Federal Communications Commission (FCC)rules require any party seeking authority for ISR to show that'equivalent resale opportunities exist between the U.S. and[the target] country.' 57 Federal Register 646, 647 (January8, 1992). In the U.K., the Department of Trade and Industry(DTI) has stated that there must be 'broad comparability... inany licensing or authorization procedures attaching to theprovision of such [international resale] services in the overseascountry." Competition and Choice: Telecommunications Policyfor the 1990s Cm 1460 (HMSO, London, 1991), p. 15.
(21). Bruce Stanford, Vice President, Correspondent Relations, BTNorth America, put it this way:
"The advent of intemational resale signals the commencementof potentially significant changes to the existing structure ofthe trad'tional relationship between international telephonycarriers ... Contracts for incoming and outgoing traffic mayunderlie the future correspondent relationship ... A wholesalemarket will emerge where existing PTOs become suppliers tonon facilities based resellers. Existing carriers will operate atboth end of international circuits, bypassing existing coopera-tive business arrangements, and offering resale based productsin niche markets.' B. Bruce Stanford, 'International ResalePresentation', Tele Strategies Conference, East Rutherford,New Jersey, April 14, 1992.
(22). S. M. Welland, "Networks Of The Future And Their Applies- -
tion In The General Electric Company To Serve The VisionOf The 1990's", presentation to FCC 'Networks Of The Fu-hire' meeting, Washington D.C., May 1, 1991.
(23). K. Lynch, 'Global Services Showdown,' CommunicationsWeek International, 11 May 1992, p.22.
(24). For background See e.g., "International Value-Added NetworkServices - An Introduction," National Telecommunications andInformation Administration Publication TM-90-256, (U.S. De-partment of Commerce, Washington D.C., 1990).
,
BEST COPY AVARIKE591
(25). See eg, E. Messmer, 'AT&T :.torms Europe in data net offen-sive,' Network World March 16, 1992, p. 1 . For furtherbackground on AT&T's European strategy see, P. FuhrmanAn unlikely trustbuster,' Forbes February 18, 1991, pp.
100-104.
(26).
(27).
See eg, B. Crockett, 'The Resale Struggle Begins,' GlobalNetworks Vol. 1 No. 2, Summer 1991, pp.17-22.
See eg, A. Ramirez, "Reversing Rates For Overseas Callers,"The New York Times, January 9, 1992, p.D1.; 'Rome toBonn Via New Jersey,' BusinessWeek, April 13, 1992, pp.84-85.
(28). For a comprehensive review of global VPN offerings, seeThe TeleChoice Report on International Virtual Networks,"
3 vols. (TeleChoice, Montclair, New Jersey, 1991).
(29). See 'Telephone Network And ISDN - Operation, Numbering,Routing And Mobile Service,' CCITT Blue Book Volume II,Fascicle 11.2, Recommendation E.118 (ITU, Geneva, 1989).
(30). "Visa plans phone service," Financial Times May 6, 1992,p.11. Total Visaphone billings in 1991 reportedly exceeded$70 million and are projected to rise to over $300 million in1994.
(31). 'Introducing AT&T World Connect Service...' The NewYork Times May I, 1992, p. D18.
(32). "Comments' of Syncordia Corporation before the FCC, FileNo. ITC-92-066, January 27, 1992, pp.1-3. For additionalbackground on Syncordia see 'Global Services Showdown,"oe cit, note 23.
(33). See e.g., Olof Lundberg 'The Evolution of Global PersonalCommunications." Official Handbook InFotel Lanka '92(Colombo, Sri Lanka, 1992).
(34). There are signs that a non accounting rate price fin Inniarsatmobile services is already developing. For example, inSingapore, users of the-Inmarsat-C portable data terminal onlypay the flat satellite charges associated with the service whichdo not vary by country. Further, users are not charged for thelocal PSTN interconnection. S. Kumar, "Inmarsat-C usersneed pay only satellite charges for use of LES,' BusinessTimes [Singapore], February 2, 1991, p. 3.
(35). A similar competitive divide exists in the semiconductorindustry between 'heavy' companies, such as Intel, whichown fabrication plants ('fabs ") to manufacture themicroprocessors which they design and 'light' companies,such as Chips & Technologies and Advanced Micro Devices(AMD), which contract manufacturing to independentfoundaries. 'Whether it was [Jerry] Sanders [CEO of AMD[or T.J. Rodgers [the founder of Cypress computers] who saidit first, the phrase 'real men have fabs' has become part of thefolklore of Silicon Valley. Real chip companies make things.They don't sit around drawing clever designs and then turnthem over to someone else to manufacture.' But, continuesone well known Silicon Valley analyst, a "persuasive counterargument has been made that real men have fabs, but rich mendon't. With the cost of a fabrication facility hitting the half-billion dollar mark, start ups [are] better off concentrating onprofitable chip designs ... [And] fabless companies are lovedby Wall Street.' K. Wieger, The Empire Strikes Back,'Upside, June 1992, Vol. 4, No. 6, p. 39.
(36). The Geodesic Network 1987 Report on Competition in theTelephone Industry ("The Huber Report") (US GovernmentPrinting Office, Washington D.C., 1987).
(37). E. M. Noam, 'The Public Telecommunications Network: AConcept In Transition,' Journal of Communications, Winter1987, pp. 40-58.
6
Study onThe Measurement of Economic Benefits of Telecom. Project
in The Developing CountriesProposing New Method
Miklo DannoInfoCom Research, Inc.
Tokyo, Japan
1. ABSTRACT
It is said that an efficient utilization of 'Telecommunication'becomes one of key success factors to achieve rapid economicdevelopments. However, no clear method to clarify 'why it is so'
has been proposed yet. This paper propose one of new measurement
method by paying our attentions for user's daily activities more
carefully, and then, we can find the following major effect of
telecommunications development, i)Cost Saving Effect, and
iilNetwork Expansion Effect.
2. Introduction
This paper is prepared based on the fieldssurvey in Nepal, conducted by the ECONOMIC BENE-FITS STUDY TEAM organized by the Ministry ofPosts and Telecommunications in Japan in 1991.The survey city/town were selected Katmandu.
Pokhara, Nepalgunji, Tulshipur where telephoneservice was supplied without any constraint, andSyangja, Bandipur, Damauli, Kusuma, Baglungwhere telephone service was very recently sup-plied only to the Government office, and PCO(Public Call Office) in 1988.
The primary objectives which we selected thedifferent type of cities, where the simplifiedtype of telecommunication service was newlyequipped, were to compare its differences of
its impacts on social/business activities by theintroduction of telephone service, very easily.
Since the Telecom project is a profit-orientedventure, the basic objectives of financialappraisal is to provide decision makers with theinformation needed by them to judge the finan-cial viability of a specific project they maywish to proceed. Thus, the purpose of the finan-cial analysis is to determine whether the pro-posed investment would generate a stream of
future income sufficient to meet the minimumfinancial return requirements of the investor(service provider) in a time frame acceptable tohim. The financial viability of the project doesnot given an accurate indication of E project'snet impact on a country's economy. The economicrate of return measure determines the economicmerit of the project from country's viewpoint.An acceptable project should increase nationalincome. Income by itself does not create welfarebut leads to the consumption of goods and serv-ices which can serve as a proxy for increasedwelfare.
However, in the past, the telecom economistcould not provide an proper investment criteriato the decision maker to guarantee fruitfulinvestment results.
In general, there are three different opinionsto decide the size of the telecom. investment
according to the role/functions of telecom in
593
the society. First opinion is that Telecom.investment size should be reduced as much aspossible since its benefits will be arisen toonly the certain class in the society like anprivileged classes, and its investment tends toconcentrate on large cites. On the other hand,there are few measurable benefits. Thus, nega-tive benefits will become large enough to sup-port less investment priority given to Telecomsector. Second opinion is that Telecom sectorshould be developed in line with the marketneeds. Third opinion is that Telecom investmentshould be more accelerated than other sectors,since the benefits of modern technology willbring large enough to effect on the varioushuman activities effectively.
To find an answer of the above discussions, weshould provide an proper study framework of
benefits measurement, and accumulated data todescribe the role of Telecom in social infra-structure, business, and people's daily lifequantitatively.
The cost and benefits to be incurred by theproject implementation shall be classified asfollows:
Cost
User Subscription FeesMonthly Rental FeesCall Charges
ServiceProvider
Investment CostsMaintenance CostsOperation CostsTaxes
Society SubsidyInvestment Cost
Government
Benefits
Economic Benefits
Financial RevenueSubsidy from theGovernment
Taxes from theand UsersIncreases in GDP
The economic benefits can be measured by payingour attentions for the aspects of either the
users benefits the society's income such GDP,or the Government taxes increment due to the
company's profit increases with Telecommunica-tion development.
Consumer surplus analysis is a convenient method
**>
to measure user's benefits by analyzing theuser's willingness to pay for the telecommunica-tion services. If we assume that the rationalindividual, household, office workers, andofficial workers shall behave to lower theamount of payment for the services than thebenefits receiving from the services, the dif-ferences from the received benefits and the
payment for the charges is called 'ConsumerSurplus'.
According to the book titled "Telecommunicationsand Economic Development" published by WorldBank, there are three measurement method forConsumer surplus, that is, i)Price Change Meth-od, ii)Best Alternative Method, iii)ExpenditureMethod. The price change method is to analyzethe change of the consumption (traffic volume)on the price (tariff) change. If the demand issufficiently fulfilled by the supply every year,we can find the real meeting point on the demandcurve. However, we can also measure the partialvolume of consumer surplus on the supply curve.The best alternative method is to analyze thecost comparisons among the available media. Theexpenditure method is to analyze the actualexpenditures incurred in the process of communi-cation activities.
However, this approach still does not explain ushow to aggregate total benefits for telecommuni-cation developments, and does explain only oneaspect at one moment since this is not discussedcommunication structure/behavior, and its realcause results relationship with economic activi-ty.
3. Proposed Method of Measurement
Telecommunication is one of the communicationmedia which can make available to communicate atdirect dial line (at distant areas at once).Telephone is one of the telecommunication mediaand widely accepted as a both-ways personalcommunication media.
Information has been widely recognized as afourth element of production following aftercapital, labor, and land. Its efficient utiliza-tion becomes one of key success factors to holda dominant position in competition. Media aremeans of exchanging information. Its valueshould depend on the value of information, andusage cost. The advancement of the media itselfincrease the value of information through thesales or income increase. The sophisticatedmedia can functions to deepen information con-tents, and expand number of nodes to networkingsociety more closely. Impact on the telecommuni-cation can be classified largely into the net-work (expansion) effect, and the efficiencyimprovement on the communication behaviorthrough the transition of the media use (thecost saving effect).
Network Effect is that expanding communicationnodes can be attained by Telecom projects, whichmeans the increment of the accessibility tosocial services, business services, and etc,
which we have not been able to communicate inthe past. This effect include the 'Value Accel-
594
eration Effect' or 'Value Linkage Effect'. Theseeffect can be measured with 'Time Value' only ifwe can clarify information flow from dailyactivities.
Cost Saving Effect is that more efficient utili-zation of media for the present communicationmatrix will be achieved through the media choicemechanism. This will results in the saving ofcommunication expenses realized by the internal-ization of trading cost. We should measure thiseffect by the amount of cost savings if salesamount is the same as that 'Without the project'and by the increment of profits if communicationexpenses is the same as that 'Without theproject'.
In short, the cause-effect relationship betweeneconomic activity and communication activity aresummarized as follows;
Activity Level Effects Measurement Model
Economic Activity
4.i
Information ActivityI t Network-T- Generation ModelI Ic Effects L- Communication
4, I Traffic ModelCommunication Activity
I sk---- Cost --- Media Choice Model
4 I SavingTelecommunication Effect
Information activity will be increased largerthan economic activity since, in general, theeconomy will shift toward "information society"as the development is proceeded. An Increases ofinformation activity will expand communicationactivity in its frequency, contents, and nodes.In its process, an efficient communication mediasuch as telecommunication will be deployed moredue to technology development. On the otherhand, the advancement of telecommunicationtechnology will bring backward to more efficientcommunication activity through the coordinationof media deployment (media choice). As theresults of it, economic activity will be in-creased.
In the past 20 years, Japan experienced that thevolume of foreign movement flow increased 14times larger in human trip, 18 times in goods,44 times in information through telecommunica-tion media. In particular, both human trip andinformation flow seems to be increased larger inmovement frequencies than distance. The incre-ment rate of telecommunication expenses in totalhousehold expenses increased 4% in 1987 from 1%in 1970, though others including travel expensewas 1 to 2%. Role of telecommunications waschanged a lot for both business and residentialusers.
Telecom projects promote the development of themedia in volume and functions, which will changeinformation activities. These changes can beassessed by the changed volume of the sales, orprofits increase, as direct economic benefits,caused with Telecom projects through the produc-tion activities changes such as goods production
and money flow.
The following shows the conceptual flow to
measure benefits.
Daily Activities
4,
Clarifying Information Activity
Nodes CommuVnication Volume
Present Communication Ma ix
Telecom Project
Changes in Information Activities(Efficiency in Behavior.saving time,eliminationof distance)
Changes4in
InformationContents
4Changes
Changes4in Daily Changes in
Activities
Changes inNodes
Changes in
InformationVolume
4 4in Communication Matrix
4,
Reduction inIntermediateGoods & Service
4.
New Products
4,Increase
Increase in Pro4fit
4,
Production
New Markets
in Sales
We begin to define the beneficiary area/peopleand collect data worthwhile to be assessed forforecasting the future economic benefits. Then,we should build a model showing the followingfigure, which are composed of Communication
Generation Model, Communication Distribution
Model, and Media Choice Model (Modal Split
Model).
Defining Beneficiary Area/Person
4Zoning Area Media Facility Survey
4Area-wise Data Sample Data Media Provider
Finding Patterns Finding Findingof Communication Media Choice DistributionIn Volume & Mechanism PatternsContents
I Defining Unit Valueof Communication
4IGeneratior. Media Choice Distribution
Model Model Model1
Present Communi-cation Matrix
1--> Future Unit Valueof Communication
Future CommunicationMatrix
Expected Benefits
At first, the many sample data concerning eachindividual and office shall be collected by
inquiries or questionnaire survey to prepare thepresent communication patterns by different
categories, which shows the generation and
distribution patterns of communication. Then, we
595
will build the three various kinds of informa-tion activities. Next, we will build the threemodels by combining the area data with the
traffic data to forecast the benefits.
4. Model Building Results
(1) Traffic Generation Model
As a results of the survey, the following Tele-phone Traffic Generation Model was formulated.
log(T/Pop) = 28.035 + 1.284log(RGDP/Pop)(2.69)
14.896log(P) 2.54(Sup.Dummy)(-4.34) (5.79)
R 2 0.93, (T-value)
here,
T/Pop :No. of Outgoing Traffic at PCO in 1991per 100 District Working Population
RGDP/Pop:Estimated District GDP per WorkingPopulation
P :Average Call Charge per minute for AllAvailable Call Destinations
Sup.Dummy:l for the city/town where the supplyof telephone is restricted. 0 forno-restriction
This model shows that when district GDP perworking population increase by 1%, annual tele-phone traffic per 100 working population in-
crease by 1.284%. Thus, the city/town has higherGDP, higher traffic will be generated. Sincecall charge has a negative correlation with thetraffic, 1% reduction of average call charge canbring to 14.896% increase of traffic volume. It
is noticeable that the variable P is the averagecall charge for all available destinations,though the price (call Charge) effect seems tobe great. The negative value of the supply dummymeans a lower traffic frequency where the supplyof telephone is restricted.
(2) Traffic Distribution Model
As the same method applied in the above, the
following traffic distribution model is ob-
tained.
log(T1j)=-24.845-2.979*log(P)+2.183*log(Popp+(11.7) (6.7)
1.028*log(RGDP1)-1.797*(Sup.Dummy)-(2.8) (4.1)
0.643*(Bandipur)-1.004*(Damaull)(1.4) (2.2)
R2 = 0.72
hem,T :No. of Outgoing Call from the i-area to
the j-area at PCO in 1991P .Call charges per minute from the I-area to
the j-area.Popj:Working population in the j-area(zone).RGDPI:The i-district's GDPSup.Dummy:l for with supply constraint, 0 for
without supply constraintBandipur, Damauli is 1 for area dummy, 0 for
not.
This model shows that traffic frequency increase
2.18% and 1.03% when zone population of calldestination increases 1%, and district's GDPincreases 1%, respectively. Since call chargehas a negative correlation, 1% increases of callcharge will decrease 2.98% of traffic frequency.The negative value of supply dummy means a lowertraffic frequency in the case with supply con-straint.
(3) Traffic Generation Model from QuestionnaireData
Traffic generation models are formulated fromquestionnaire data for Baglung and Kusuma townsin the following.
For Baglung
log(T)=1.26-0.58*log(P)+0.16*log(S)+0.26*log(Y)(8.2) (2.9) (3.9)0.075*log(D) + 0.29*Dummy
(-1.5) (2.0)R2 = 0.72
For Kusma
log(T)=4.69-0.75*log(P)+0.018*log(S)*log(Y)(9.0) (3.8)
-0.48*log(D)(3.9)
R2 = 0.86
here.
T:No. of traffic' per monthP:The ratio of call charges expenses and number
of traffic per monthS:User's sales amount per monthY:User's monthly incomeD:Distance in km from user's place to PCO officeD:1 for those who engage in trade business, 0
for others
These models show that traffic increases by0.16%, and 0.26% when sales amount, and incomeincrease 1%, respectively in Baglung, whiletraffic increase 0.018% when either sales orincome increases 1% in Kusma. Thus, those whohave higher sales amount or income, tends togenerate higher telephone call frequency. Thisjustify the assumptions of that traffic callfrequency for business, and private purpose havepositive correlations with sales amount andIncome, respectively. Since call charge has anegative correlation with the traffic, 1% reduc-tion of call charge can bring to 0.58% forBaglung and 0.75% for Kusma increase of trafficfrequency. In addition, the variable D has a
negative correlation with traffic frequency forboth towns. Thus, 1% reduction of this figurewill bring to 0.075% increase for Baglung and0.48% for Kusma. The positive value of the tradebusiness dummy means a higher traffic frequencyfor trade business people than others in Ba-glung. It is noticeable that a negative value ofthe distance variable for both formulas meansthe evidence of the supply constraint" ana-lyzed in the previous sections. That is, adistance is a kind of cost incurred to user's inthe negative form for traffic frequency, and thething happened by the supply constraint result a
traveling forced to user for telephone call.Consumer's surplus are calculated as under. Thefigures are averaged for the relevant sampleusers.
Both analysis shows the same results that thevalue of Baglung obtained higher than that ofKusma. Both trade and agricultural people stayfar away from PCO on average, and thus, spendmore total expenses in Baglung. Thus, sinceKusma is located between the second largestcity, Pokhala and isolated hilly town, Baglung,and major transit point of goods and mountaintraveler (trekker), distance is not greater, andsurplus amount is less than that of Baglung,which correspond to the value of coefficient,-0.58 and -0.75 in P and -0.075 and -0.48 in Dobtained from both formulas. Since both coeffi-cient in Kusma is greater than that in Baglung,users in Kusma is more elastic to prices(costs). This means that Kusma is more advancedtown and has other alternative communicationmedia than Baglung.
(4) Traffic Distribution Model from Question-naire Data
Traffic distribution models for Baglung andKusma are formulated from questionnaire data inthe followings. Questionnaire data were classi-fied into six categories such as internationalcall, capital call, zone center (province capi-tal) call, district capital call, other villagecall, and local call. Thus, the share (%) modelof traffic frequency is formulated in the fol-lowing logit type model.
log(P/(1-P) = a + bS
here,
P:Probability (Share) of traffic frequencyfor each destination
S:Sales amount
This model shows that the size of sales amountexplains the share of traffic frequency.
In Baglung, traffic frequency shares for alldestination will increase as sales amount in-creases, though their coefficient vary and isgreatest in the share for regional center(i.e.,Pokala) destination, and least in theshare for capital destination (i.e.,Katmandu).This result is correspond to the interviewsurvey. In kusma, the formulated results showsthat correlation coefficient is low except thatfor international destination. Two shares forregional center and district capital have nega-tive correlations. Theses results correspond tosuch Kusma's characteristics as trekkers' trans-it point, and many mercenary in foreign coun-tries to go to work.
(5) Media Choice (Modal Split) Model from Ques-tionnaire Data
Modal split models in transport traffic estima-tion will be classified into for forecasting,ilapplying the present modal shares obtainedfrom a field survey, ii)estimating a modal splitformula with such generalized cost variables as
596 e ,
tariff charges, or travel time differences.
Media choice models for Baglung and Kusma are asunder. These model also formulated in a logittype. Media are classified Into 'travel byhimself', 'postal service', and 'others suchsending messenger from this questionnaire data.Data were obtained by giving questions to user"When telephone service had not been available,what present percentage of telephone calls wouldhave been replaced: travel to call destination,use the postal service instead, use other alter-native means (e.g.,messengers), not make contactat all".
log(P/(1-P)) = a + bXl + cX2 + dX3 +eX4 + Dummy
here,
P:Probability (share ) of media use in frequencywithout telephone service.
Xl:Share of call destination to capital, greatercommunication needs to capital
X2:Share of call destination to districtcapital, greater communication needs to
district capitalX3:Share of 'negotiation' call content, greater
complicated communication needsX4:tiser's cost differences obtained by dividing
call charge expenses with media use expensesper time
Dummy:Professlon/sector, trade people dummy oragricultural people dummy
Baglung
12212m
Agricu-a b c d e Trade lture R2
---Travel-2.51 -3.91 2.96 13.88 0.50
(2.9) (2.2)(3.0)Post -0.56 -0.74 -2.6 1.59 0.02 -0.36 0.48
(3.0) (1.6)(1.1)(1.0) (-1.0)Other -0.43 -4.4 4.4 -0.9 3.1 0.16 0.79
(4.2) (6.4)(4.0)(1.3)(1.0)
Kusma
DummyAgricu-
a X1 X2 X3 X4 Trade lture R2
Travel -1.5 0.30 1.95 0.42(0.8) (2.4)
Post -0.12 -0.11 0.44 2.78 0.84(4.9)(6.4) (3.1)
Other -54.7 -1.2 3.56 13.9 52.5 34.61 0.99(2.3) (1.8) (2.8)(2.0) (1.5)
In Baglung, those who select higher share in
'travel by himself' means of communicationinstead of telephone service, tends to have aless communication need for the capital destina-tion, and requires more complicated call con-tents such as 'negotiation'. The positive valueof cost differences shows a lower share whentravel cost is increased. Those who selecthigher share In 'postal service' means, tends tohave a higher communication needs to country-side since both the variables of capital and
district capital's value show negative sign, anda higher complicated call content. Those whoselect higher share in 'other means', tends to
BEST CEFY597
have more communication needs for districtcapital, and a less complicated call contents.
In Kusma. the share in 'travel by himself' hasonly the cost difference variable, while theshare in 'postal service' has no relation withthe cost difference variable, and a positiverelation with call destination to districtcapital. Those who select higher share in 'othermeans', tends to have more communication needsfor district capital.
The above evidences proved from the models aresummarized as under.
Alternative Possibility of Telephone Call inBaglung
Item Travel Post Other
Destination Near City Country Near CityContents Complicated Complicated SimpleProfession Lower in Higher in
Agriculture TradeCost Large Less MediumDifference
5. Notes for Application of Proposed Method
(1) Difference Between Generation Model andDistribution Model
The estimated results should be applied accord-ing to the following way. If the nodes areclassified such A, B, C, D as follows, thegeneration model is to estimate the total node'svalues such nodes A's total:100%, and the dis-tribution model is to estimate each share amongeach nodes's total value, like share valuebetween A and B:3%, between A and C:5%.
Nodes
A B C D E Total(%)
A 2 3 5 6 7 100B
C
Total G. Total
(2) Differences of Models built-up from Statis-tical Data and Questionnaire Data
Since, in general, statistical data providedfrom common careers are aggregated as a regionaldata, questionnaire survey should be conductedto collect individual traffic data. Regionaldata do not tell us exact communication behaviorat micro viewpoint. Once we understand it. a
cross check of both traffic data are needed forModel Building.
(3) Media Choice Model
The reasons why Katmandu businessmen choose eachmedia for communication were summarized fromquestionnaire data as follows;
For TelephoneMedia Easy Hurry Convenient Quick
Responses
TelephoneTelephoneTotal
2 2 25 3
3 3 27 3
For TripMedia Courtesy Complicated Total
Trip 2
For Mail or Messenger
3 5
coexisted, it is difficult to find an actualTotal degree how far telephone call contribute to make
communication efficient.
32 6. Further Development of the Proposed Method
36
Media Material Need Cheap Not Totalto Send Hurry
Total 3 2 13 3 21
Among total 62 samples businessmen, 32 was de-ployed subscribed telephone, 20 mail, and 5
trip. Main reasons for telephone is "convenient,"complicated" for trip, and "cheap" for mail.Thus. if "convenience" reasons can be measuredby time like access time/distance to media, bothmedia can be compared with cost differencessince time can be converted to the monetary termlike hourly wages. Thus, we should find fac-tors/reasons to choose media for sample peopleby questionnaire survey as much as possible.
Media choice model assumed that there existplural media, and several factors to deploy ancertain media. Communication media have not onlysubstitutional relation but supplementary rela-tion. That is, to exchange information, thereare many cases when several media needs to
deploy at one communication, and there are somemedia which utilize as a supplementary functionsto make communication more effective.
Though many supplementary combinations amongmedia are considered, we, this time, assume thefollowing three cases; i)telephone call andhuman trip movement, for example, asking bytelephone an convenient time/place to visit,ii)telephone call and goods movement, for exam-ple, instructing by telephone call for theshipment of goods, and iii) independent tele-phone call, in other words, no generation humantrip/good movement coincidentally. The question-naire data are summarized as follows;
Media Human Goods Human Nothing TotalTrip Movement &Goods
Telephone 17 2 4 9 31
Telephone 1 1
Total 27 6 17 10 60
Subscribed telephone call, sharing 45% (27 to60) of total samples, generate human trip move-ment 55% (17 to 31), and supplementary rela-tion's call shares as large as 71%. On the otherhand, independent telephone call that Is,
substitutional relation's call shares only 29%.Thus, telephone is to be deployed mainly to makehuman/goods movement more effective. Sincesubstitution and supplementary relation are
598
For understanding the relation between economicactivity and communication activity, we shouldfurther research i) the relation between busi-ness working hours and its production, ii) the
relation between business working hours andcommunication, since communication and economicactivity is not directly correlated with eachother. This relation can be defined only throughworking hours.
Human activity is limited to 24 hours a day, andspend its time more for business to producenation's wealth. If we classify working hoursinto in detail, Japan experienced that telephonecall hours increases, instead of the reductionof trip out office hour for communication, whichindicates the substitutional effect of telephonecall among communication media (cost savingeffect). And we may imagine that the reducedtime for communication should be utilized morefor productive activity.
As economy develop toward "information society",the share of tertiary sector increase in GDP aswell as working populatior. , and at the sametime, office workers will shift their workinghours from "direct work" hours to "thinking(brain) work" hours, or communication hours.
Therefore, if we succeed to find proper cause-effect relationship between an change of workin7hours and communication level such as an changeof nodes, contents. and frequencies, we can
apply its results to national/regional levelfrom corporate level very easily since it is
easy task to clarify the relationship betweenoffice working hours and corporate profit level,and then, the relationship between corporateactivity results and its industrial GDP byreferring the past experiences of developedcountries.
Economy develop
Change Job Specification
Clerk -- - I 1lMoreLower MiddleiClericalr--, 11CommunicationMiddle- - -)CWork IThinkingilHighUpper Middle! !---"Work ---11ProductivityTop- - - - I 11High Salary
,11,High Profits
0% Hours Share 100%
Important thing is how to define average figuresof communication level for each categorizedworkers by classifying into section, status,industry category through the following modelbuilding.
Communication Level = f(work hours, etc)
The first mode] from questionnaire data In
Katmandu office worker was built as follows;
log(T)=-1.116+1.183*log(Ch)+1.026+log(CW11)+(1.64) (2.23)
0.4096+log(TWh)(0.83)
R2=0.5
here,
T :Telephone Call Frequencies per MonthCh :Communication Hours Share(%) per DayCWh:Clerical Work Hoes Share(%) per DayTWh:Thinking Work Hours Share(%) per Day
This model shows that when Ch increases by 1%,monthly telephone call increases by 1.18%. 1%
increase of CWh will increases 1.03%. Increasesof TWh will increase only 0.41%. Thus. Communi-cation hours share is most sensitive to tele-phone call.
Questionnaire survey sheet were designed to ask"Your status in the office" and "Your section".The results of the model formation according tothem are as under;
For office worker in the "administration sec-tion",
log(T)=-8.392+2.989,log(Ch)+1.241*log(CWh)(3.59) (2.55)
R 2=0.56
For office worker in the status of "administra-tive staff".
log(T)=-8.863+2.762*log(Ch)+1.5034klog(CWh)(3.59) (2.64)
R2 =0.71
In the second model, 1% increase of Ch willincrease 2.99% of T, which is the largest valueamong three models. This indicate that adminis-trative section has the largest sensitive valueto telephone call since it include managementstaff, who obtained both the largest communica-tion hours and telephone call frequencies thanother workers.
The monthly frequencies per worker to utilizeeach media by worker's status in office are
summarized as follows.
Media Mana- Speci- Adminis- Other Averagegment alist tration
Telephone 433 155 151
TelephoneReceivingAverage 274 94 99
107 20]
50 50
50 50
56
We may imagine that management staff owned tele-phone to communicate outside office as theirpersonal use, and administrative staff spend
their time more for communication deploying withother media, from the fact that managementstaff use telephone most, and administrativestaff use mail most, and other use someone'stelephone including receiving.
The following fact is a clue to find measurablebenefits of telecommunication. This is that
telephone will deploy more frequently than other
599
media for higher ranked workers who contributetheir corporate's profits greater than otherworkers, and thus, higher hourly salaries (timevalue) will be paid.
The Software Export Industryof Developing Countries
George J. LissandrelloPresident, Information Products International
Richardson, Texas, U.S.A.
1. ABSTRACT
Successful missions have been undertaken for the export ofsoftware engineering services from developing countries todeveloped countries on behalf of the United Nations InternationalTrade Centre UNCTAD/GATT (ITC), as part of a regional project ofTechnical co-operation, financed by the United NationsDevelopment Programme, and executed by ITC. In particulartelecommunications companies and systems integrators have a needto outsource to the developing countries for software.
2. INTRODUCTION
2.1 UN ITC REGIONAL PROJECT
A United Nations International TradeCentre (ITC) regional project on thedevelopment of trade and cooperation inteL nical consultancy services among tendeveloping countries in the Asian andPacific region, namely Bangladesh, thePeople's Republic of China, India,Indonesia, Malaysia, Pakistan, thePhilippines, Singapore, Sri Lanka andThailand, was initiated at the beginningof November 1989. This was the firstphase of a three-year project to assistdeveloping countries to improve theirforeign exchange earnings throughexpanded exports of technicalconsultancy services. The regionalproject was financed by the UnitedNations Development Programme (UNDP).
2.2 OVERVIEW
This paper covers the results of two ITCmissions which came under the regionalproject; one mission was to sellPhilippine software services andproducts to European and North Americancompanies which included meetings atTelecom 91, and the second mission wasto sell Sri Lankan software services andproducts to companies in Australia,Japan, the Philippines and Malaysia.
The responsibilities of the ITC will beexplained and how it is jointly managedand funded by the General Agreement onTariffs and Trade (GATT) and the UnitedNations Conference on Trade andDevelopment (UNCTAD).
The contribution of the softwareindustry and related industries ininformation technology to the positivebalance of trade of the developingcountries are discussed. Recommendationsare made as to how to make the softwareexport industry a success for developingcountries. The focus will be on thephilippines as an example.
3. THE INTERNATIONAL TRADE CENTRE (ITC)
It is a known fact that foreign trade isa necessity for economic growth in
600
developing countries. Exporting providesthe foreign exchange necessary to obtainessential basic needs for the populationand for the development of the countrysuch as capital goods and energy. Italso offers the opportunity to raise thenational output which in turnstrengthens the economic well being ofthe country. Efficient importing is thenecessary compliment to successfulexporting. In addition if fundamentaldevelopment and human needs are to besatisfied the scarce foreign tradeearnings must be used to the bestadvantage of the country.
In order to achieve success in exportingand efficiency in importing specialtechnical expertise is required that isoften lacking in developing countries.The ITC has been put in place to providethe countries with necessary expertise.It was created by GATT in 1964 andsince 1968 it has been jointly sponsoredby GATT and UNCTAD. In 1973 the ITC wasdesignated as the focal point in theUnited Nations system for technicalcooperation with developing countries inexport promotion.
3.1 MAIN FUNCTIONS
The ITC assists developing countries inestablishing an effective national tradepromotion strategy in line with thecountries economic development goals.Creating and establishing national tradepromotion agencies is another part ofthe ITC's technical cooperation piogram.In conjunction with the government itworks to strengthen the role of thechambers of commerce and other businessorganizations.
The provision of market developmentservices is another function of the ITC.These services are aimed at identifyingnew export opportunities, adaptingproducts and services for sale abroadand promoting these offerings to theinternational market. One of the newopportunities that has been identifiedis the export of consultancy serviceswhich includes software.
A function of the ITC is to providespecial services to back up the exportmarketing efforts which im-lude exportpackaging, quality contro exportfinancing, costing and pric -g, tradeinformation, publicity and trade fairs,commercial representation abroad,international physical distribution,legal aspects of foreign trade and jointmarketing.
The ITC has the function of working withimport management organizations toimprove their import operations andtechniques. Key to all of the mainfunctions of the ITC is the provision oftraining programs that cover a broadrange of export and import subjects. Themain objective of the ITC's trainingactivities is to make developingcountries self sufficient in providingtraining in international marketing andtrade promotion.
3.2 TECHNICAL COOPERATION PROJECTS
The ITC's technical cooperation projectscover developing countries at thenational, regional and inter-regionallevels. They are undertaken at therequest of the governments concerned,administered from ITC headquarters inGeneva and implemented by ITC experts inconjunction with local officials.Projects most often take the form of anintegrated national program, whichincludes a packaging of services toexpand the country's exports and/orimprove its import operation. Regionalor inter-regional projects may deal withone or a combination of ITC services,depending upon the trade promotionrequirements of the group of countriesconcerned.
ITC projects are coordinated with anumber of organizations within andoutside the UN. Close liaison ismaintained with GATT and UNCTAD. Exportmarket development activities arecoordinated with the Food andAgriculture Organization of the UN (FAO)and the United Nations IndustrialDevelopment Organization (UNIDO) asrequired. Close contacts are maintainedwith UNDP which provides financing for alarge portion of the ITC's projects andwhose Resident Representatives serve asITC official representatives in theircountries of assignment.
3.3 FINANCING
ITC projects are financed by the UNDP,international financing institutions andvoluntary contributions from individualcountries. Voluntary contributions comein the form of either trust funds forprojects in other countries or funds-in-trust provided by developing countriesfor projects in their own countries.
Financing from internationalorganizations such as the World Bankwhich is primarily through its loans todeveloping countries and the EuropeanCommunity through subcontractingarrangements with the ITC is ofincreasing importance for theimplementation of projects.
601
The regular budget of the ITC whichcovers the headquarters operations iscontributed in equal parts by the UN andGATT. This budget includes generalresearch and development.
3.4 ORGANIZATION, LEGAL STATUS ANDPOLICY MAKING
The ITC's secretariat is located inGeneva, Switzerland and is managed by anExecutive Director who is responsiblefor 250 people at headquarters and morethan 800 experts assigned to projects indeveloping countries.
The legal status of ITC is that of a"joint subsidiary organ" of GATT and theUN through UNCTAD. As such the ITC is asemi-autonomous organization within theUN family. The guidelines for technicalcooperation are determined by thegoverning bodies of its two parentorganizations the GATT Council and theTrade and Development Board of UNCTAD.Recommendations on the ITC's future workprogram are made to the two governingbodies known as the " Joint AdvisoryGroup on the International Trade CentreUNCTAD/GATT" (JAG) by the ITC at itsannual intergovernmental meeting.Representatives of member states of GATTand UNCTAD attend the annual meetingalong with observers from otherinternational organizations that workwith the ITC.
4. THE PHILIPPINE MISSION
The first stage in the development ofthe project to assist in the exportingof technical consultancy services insoftware was a preparatory assistancephase involving an audit of thoseservices that are available in the Asianand Pacific region which have thepotential to be exported, and anidentification of the best markets forthese services. This phase culminatedin a workshop held in Kuala Lumpur,Malaysia, in May 1990.
The objectives of the workshop, at whichparticipants were drawn from fourenterprises in each of the countriescooperating in the project whichincluded the Philippines and Sri Lanka,were to:
1. Complete guidelines for a technicalhandbook on the exporting of technicalconsultancy services from the Asian andPacific region;
2. Agree upon technical assistanceactivities to be undertaken within theframework of the existing project forthe period mid-1990 to end 1991;
3. Prepare a draft follow-on projectdocument for submission to UNDP forfinancing for the three-year period 1992to 1994.
At the end of 1990 the decision was madeby the UNDP and ITC to implement theproject. In January of 1991 the regionalproject had been officially started withthe establishment of an ITC regional
office at UNDP premises in Kuala Lumpur,Malaysia. Since then, a number ofactivities were implemented to kick offthe official Philippine SoftwareEngineering Export Mission which tookplace between September 2nd and November15th, 1991. The mission consisted of adelegation of one senior executive fromeach of two enterprises in thePhilippines dealing in softwareengineering, Mr. Augusto C. Legman aDirector of Systems Resources Inc. andMr. Zoilo Jesus M. De La Cruz IIIPresident of Infoserve, and an ITCcontracted Senior Marketing Consultantand Coordinator.
4.1 TERMS OF REFERENCE
The mission's terms of reference were as_follows:
to carry out in-depth research toidentify potentiate clients in the UnitedStates for the two Philippine softwarecompanies;- to organize an export developmentmission of four weeks duration to theUnited States, Canada and Telecom 91 inGeneva, Switzerland and arrangingbusiness meetings with potentialcustomers, trade associations andstrategic partners;
to initiate actions to fulfill themission objectives which were to:- sell Philippine software and softwaredevelopment,- establish strategic partnerships &/orjoint ventures,- obtain orders and requests forproposals, quotes and information, andget on the bidders list;- and to develop a follow-up action planto the mission including a draft of a 5year national software export industryplan to be approved by the Government,the ITC and the UNDP.
4.2 CONCLUSIONS
The conclusions of the mission were asfollows:
- there is a major business opportunityin the export of software and softwarerelated products and services for thePhilippines;
- there is significant businesspotential for outsourcing from thePhilippines to the U.S. and Canada andin particular to systems integrators,telecommunications companies andsoftware houses;
- there is significant businesspotential for strategic partnering,joint ventures and distributionagreements between Philippine and NorthAmerican companies for the Asia/Pacificmarket;
- 90% of the forty plus companies,( mostgross over $500 million) which met withthe mission on a one on one basis havean immediate interest in pursuing apotential business relationshiprequiring specific follow up actions;
602
- a number of requests for proposalswill be forthcoming and it is expectedthat at least two will be receivedwithin the year given appropriate followup actions;
- it is expected that at least onedistribution agreement will be signedfor the ASEAN countries for thedistribution of a line of software andrelated hardware products;
- at least four companies will visit thePhilippine firms within the year withthe objective to pursue a businessrelationship;
- other than North American companiesare interested in possible outsourcingincluding two European companies and onecompany from Singapore;
- there is a strategic interest by mostNorth American companies in expandingtheir business in Asia/Pacific in that anumber have reorganized to focus on themarket and are actively seeking partnersin the region;
- a number of companies are interestedin considering the Philippines as a baseof operations for the region;
- there is a need for an immediatefollow up action program by allinterested parties, in particular by thetwo Philippine software companies;
- the Philippine software industry canbecome a significant contributor toreducing the country's foreign tradedeficit in the future;
- the U.S. and Canada have a shortage ofwell qualified programmers and systemsanalysts and this situation is expectedto continue where there will continue tobe a need to outsource software tocountries such as the Philippines;
- and the fact that the Philippines useEnglish as its basic business languageand understand North American cultureand business practices is a definiteadvantage for the export of softwareengineering.
4.3. RECOMMENDATIONS
The majorfollows:
recommendations aria as
-there is a need for the immediatefollow-up on the results of thePhilippine mission in order not to losethe momentum to solidify businessrelationships together with funding andsupport from the ITC and UNDP;
- the next mission of the project inregard to Sri Lanka should be expandedto include the recommended follow-upactivities to the Philippine mission;
a presentation should be prepi_redbased on the mission to serve as a basisfor meetings with the PhilippineGovernment, the UNDP and the ITC;
- complete a Sales and Marketing planfor the two firms to cover the NorthAmerican opportunities;
obtain approval and budget to write anoverall business plan to include boththe North American opportunity and thestrategic partnering and distributionbusiness for Asia/PAcific;
- use the results the mission and themeetings in Manila to convince thePhilippine Government to make thesoftware industry a key strategicindustry. Obtain financial support fromall available sources to fulfill thisstrategic goal;
- and use this first mission of theregional project on the development oftrade and cooperation in technicalconsultancy services among tendeveloping countries in the Asian andPacific region as a foundation andguide.
4.4 ACTIVITIES AND WORK PROGRAM
The activities and work program of themission which was initiated on September2, 1991 with a planned completion dateof November 15 consisted of a number ofmajor tasks that included the following:
- arranging for over forty meetings withkey executives from major corporations,organizations and governments;- preparing an overall Sales and
Marketing plan outline;- preparing a list of the top U.S.
systems integrators with their executivecontact points;- assessment of both SRI and Infoserve
operations in the Philippines to insurethey had the capabilities and resourcesto fulfill the mission;- arrangements to attend three trade
shows which were Telecom 91, Infoworldand COMDEX;- preliminary plans and discussions as
to how to organize to address the NorthAmerican market;- and following up on contacts made
during the mission with appropriateactions.
To reiterate the objectives of everyoneof the mission's meetings were the sameas stated previously and can besummarized as follows:
- to sell Philippine software andsoftware development services throughoutsourcing;- and to establish strategicpartnerships and joint ventures.
An example of the type of activitiesthat occurred during the mission isgiven in the following two paragraphs.
The first phase of the trip was toattend Telecom 91 in Geneva, Switzerlandwhich is well known to thetelecommunications industry. Thisexposition and conference is sponsoredby the International TelecommunicationsUnion and is the largest of its kind. ATelecom occurs every four years and is
603
attended by the world leaders ininformation technology and gave themission access to a concentration ofcompanies and executives.
Meetings were set up prior to Telecom 91with Comsat and MCI. Other meetings werearranged during Telecom and includedAmeritech, BBN, VMX, BellSouth, Alcatel,Ericsson, NYNEX, US West and US Sprint.
In addition brief discussions were heldwith HP, UNISYS, GE Information Systems,IBM, DEC and Northern Telecom in orderto obtain the name of the executivecontact points that would be interestedin outsourcing software.The following is a sample list of thecompanies and organizations that metwith the mission in North America:
IBMStratusDECNabiscoEDSLone Star GasSHL SystemhouseTandemState of HawaiiGTE Hawaiian Tel.
Data GeneralDun and BradstreetBBNHarris AdacomHogan SystemsB.C. TelephoneApplePacific Telecom
Council
5. THE SRI LANKAN MISSION
The Sri Lankan mission had as itspurpose to sell software engineeringservices and products to countries inAsia and the Pacific with a focus onAustralia and Japan. The missionconsisted of one senior executive fromeach of two enterprises in Sri Lankadealing in software engineering, Mr.Sunesh Samarasinghe, Director ofComputer Systems Ltd. and Mr. GaminiWickramasinghe, Managing Director ofInformatics Ltd., and an ITC contractSenior Marketing Consultant andCoordinator.
5.1 TERMS OF REFERENCE
The mission's terms of reference followthose of the Philippines and were asfollows:
- to carry out in-depth research toidentify potential clients in Asia andthe Pacific for the two Sri Lankansoftware companies and arrange amarketing mission to visit the firms andorganizations selected;
- to organize an export developmentmission of four weeks duration to thePhilippines, Japan, Australia andMalaysia and arranging business meetingswith potdrntial customers, tradeassociations and strategic partners;
- to initiate actions to fulfill themission objectives which were to:
- sell Sri Lankan software and softwaredevelopment/services,
- establish the companies as regionalsoftware companies,
- establish strategic partnerships /joint ventures,
- obtain orders and requests forproposals, quotes andinformation,
- get on the bidders list,
- and distribute software and hardwareproducts from other companies in theregion into Sri Lanka;
- to develop a follow-up action plan tothe mission;
- and to draft the four year nationalsoftware export industry plans for SriLanka.
5.2 CONCLUSIONS
The conclusions of the mission were asfollows:
- Sri Lanka has the capability andfoundation for the establishment of asoftware outsourcing industry and thetiming is right for doing business inAsia and the Pacific, however, immediateand continued education and training isrequired to meet this industries growingneeds;
- there is a major business opportunityin software and software relatedproducts and services for Sri Lanka, thePhilippines, Australia, Malaysia andJapan;
- there is significant businesspotential for outsourcing from Sri Lankato Australia and in particular Japan;
- there is significant businesspotential for strategic partnering,joint ventures and distributionagreements between Sri Lanka andJapanese and Australian companies forthe Asia/Pacific market;
- at least thirty of the forty pluscompanies which met with the mission ona one on one basis have an immediateinterest in pursuing a potentialbusiness relationship requiring specificfollow up actions;
- it is expected that at least twodistribution agreements will be signedfor a line of software and relatedhardware products;
- at least five companies will visit theSri Lankan firms within the six monthsfollowing the mission with the objectiveto pursue a business relationship;
- there is a strategic interest by manyJapanese and Australian companies inexpanding their business in Asia/Pacificand are actively seeking partners in theregion.
- the Japanese and Australian companiesare also seeking to expand theirbusiness in the U.S. and Europe throughoutsourcing software to countries suchas the Philippines and Sri Lanka;
- Japanese companies require outsourcingin programming, applications programs,
604
customized software and systemsintegration in order to penetrateforeign markets and are now aware of SriLanka and the Philippines;
- there is a need for an immediatefollow up action program by allinterested parties, in particular by thetwo Sri Lankan software companies;
- the Sri Lankan software industry canbecome a significant contributor toreducing the country's foreign tradedeficit in the future;
- Australia and in particular Japan havea shortage of well qualified programmersand systems analysts and therefore thereis and will continue to be be a need tooutsource software to countries such asthe Sri Lanka;
- the fact that the Sri Lankans useEnglish as a basic business language andunderstand European culture and businesspractices is a definite advantage;
- Japan has a shortage of 500,000programmers and systems analysts and itis expected that this shortage willincrease to 1,000,000 by the year 2000,therefore this is an immediate marketand various forms of Japanese financialassistance and training in this area isavailable for countries such as SriLanka;
- a number of products from thePhilippines and Australia will bemarketed in Sri Lanka and vice-versa;
- the skills and products in thePhilippines and Sri Lanka can complementeach other;
- in order to insure the software exportindustry is successful the nationalplans for Sri Lanka and the Philippinesas drafted by the ITC need to beimplemented;
- most organizations and companies haveno knowledge of the ITC, this includesexecutives of the Australian TradeCommission and the Commercial Attachesof the U.S. Embassies in the Philippinesand Japan;
5.3 RECOMMENDATIONS
The major recommendationsfollows:
were as
- there is a need for the immediatefollow-up on the results of the SriLankan mission in order not to lose themomentum to solidify businessrelationships;
the ITC four year national plans forSri Lanka and the Philippines need to beapproved and implemented in 1992;
complete a Sales and Marketing plan forthe Sri Lankan software industry tocover the regional opportunities;
-as part of the national plans obtainapproval and budget to write an overallSri Lankan software industry business
plan to include the North American,Asia/Pacific and European opportunitiesand the strategic partnering anddistribution business for Asia/Pacific;
- use the results of the mission toconvince the Sri Lankan Government tomake the software industry a keystrategic industry and obtain financialsupport from all available sources tofulfill this strategic goal;
put a cohesive plan in place for thetraining and education of the necessarypersonnel required to meet the futureneeds of the Sri Lankan softwareindustry and obtain the necessaryfinancing;
- there is a need to strengthen theexisting IT educational institutions inSri Lanka and the Philippines;
- consideration should be given to aAsia/Pacific regional plan for softwareengineering to optimize on thecomplementary strengths of theindividual countries;
- and a coordinated public relations planand meeting program with the developedcountries embassies and commercialattaches located in the underdevelopedand newly industrialized countries inAsia/Pacific should be undertaken.
5.4 ACTIVITIES AND WORK PROGRAM
The activities and work program of themission which was initiated on November15, 1991 with a planned completion dateof March 15, 1992 consisted of a numberof major tasks that included thefollowing :
- arranging for over forty meetings withkey executives from major corporatic,ns,organizations and governments;
- assessing CSL and Informaticsoperations in the Sri Lanka to insurethey had the capabilities and resourcesto fulfill the mission;
- attending and conducting workshops atthe 1992 Pacific TelecommunicationsConference in Honolulu covering the ITCproject and met with a number ofJapanese and Australian companies toarrange for meetings in their respectivecountries during the mission;
- conducting two separate sub-missions,one for CSL to Australia Malaysia andthe Philippines from February 3 to 15,1992 and one for Informatics to thePhilippines and Japan from February 19to 28, 1992;
preliminary plans and discussions as tohow to organize to address theAustralian market;
- preliminary plans and discussions as tohow to organize and address the Japanesemarket;
- the following up on contacts that weremade during the mission and taking theappropriate actions;
605
To reiterate the objectives of the SriLankan mission were the same as statedpreviously and can be summarized asfollows:
- to sell Sri Lankan software andsoftware development services throughoutsourcing.- to establish strategic partnerships andjoint ventures for the Asia/Pacificregion.
The following is a sample list of thecompanies and organizations that metwith the mission:
WestpacKPMG Peat MarwickIBM AustraliaAIIASime DarbyInfoserveSRISaztecNTTMitsubishiJISA
McDonnel DouglasContinuumMicrosoft InstituteOTCPIKOMSoftware BrewersSDPIBM JapanKDDNECJapan Valiant Co.
6. OVERALL RESULTS AND CONCLUSIONS (2)
The immediate results of the twosuccessful missions were twodissemination seminars of the missions'activities one in Manila and the otherin Colombo and three workshopsassociated with the project fortechnical consultancy and engineeringservices; two in Malaysia and one in SriLanka.
The dissemination seminar in thePhilippines entitled, "SoftwareEngineering Services," took place on 5May, 1992 and the seminar in Sri Lankaentitled, "Dissemination Seminar onTechnical Consultancy and EngineeringServices Information Technology Sector,"took place on 9 May, 1992.
6.1 RESULTS AND CONCLUSIONS FOR THEPHILIPPINES
The Philippine mission follow onactivities and Dissemination Seminarresults and conclusions were as follows:
- a Software Engineering Consortium wasformed as a result of the mission, whichwas incorporated as SRI and already haseight member companies;
- the Seminar prov'xied the forum for theofficial endorsement of the consortiumby the Government and the announcementthat the software industry is a keystrategic industry;
allowed the Government to reinforce itscommitment to the National Plan for thedevelopment of the software exportindustry;
- assisted in laying the groundwork forthe Government to provide interimfunding for the software export industryprior to the financing of the NationalPlan;
a number of the companies present atthe Seminar will become new members ofthe consortium;
- the attendee companies at the Seminarare now aware of the opportunities forsoftware export and a significant numberare expected to participate in thedevelopment of this industry.
- the U.S. Embassy is expected to assistin obtaining visas for training softwareengineers in the U.S.;
- if the National Plan is not fundedthrough the UN, alternate plans willhave to be put in place by theGovernment;
-the consortium must work with theGovernment and educational institutionsto insure a continuous supply ofqualified programmers, systems analystsand scientists to fulfill the exportmarket need;
- and the Philippine software industry iswell positioned for the export marketbased on the steps it has taken toestablish itself as a viable contenderfor that market and to that end theconsortium has produced marketingliterature for its services.
The major result of the Philippinemission are two contracts between HoganSystems of Dallas, Texas and LC Software(LCS) a member of the Philippineconsortium known as Systems Resources,Inc. Hogan is a supplier of bankingsystems software on IBM main frames orequivalent. The first contract is forLCS to represent Hogan in thePhilippines and the second is for LCS toprovide Hogan with software consultants.At this time the first group ofconsultants are in Dallas completingtheir training.
The consortium has completed its firstcut at a plan to get into the NorthAmerican market and has established thefirst phase of an independentrepresentative network in the U.S. Inaddition it has completed its initialset of marketing literature including a"COMPARATIVE LABOR COST FOR COMPUTERPERSONNEL" chart shown in Figure 1. Thechart compares programmers and systemsanalysts from the consortium known asSRI with those of eight developedcountries. SRI programmers cost lessthan half those of the U.S. and systemsanalysts are two thirds the cost.
6.2 RESULTS AND CONCLUSIONS FOR SRILANKA
The Sri Lankan mission follow onactivities and Dissemination Seminar'sresults and conclusions wore:
- that plans were made for the formationof an IT industry association with thesupport of the Government with theinitial activities toward the formationwere agreed to at the seminar;
606
- that full support of the newassociation was given by the EconomicDevelopment Board (EDB);
- that the EDB will act as the new ITassociation's focal point;
- that the EDB will make money availableto support 50% of the finances requiredfor software industry missions andexhibits;
- that the ITC will assist in funding ofmissions and exhibits to supplement thefunds provided by the EDB;
- that there are limited resources incertain segments of the softwareindustry and therefore the export marketin those segments cannot be exploited;
there is a definite need for a strongIT association.
- there is a need for an IT nationaldirectory since many of the softwarecompanies are not aware of each other;
- that the luxury tax on computers of100% should be eliminated and computersnot be considered a luxury for this adefinite hindrance to the development ofthe Industry;
- that the usage of existing computerresources of the country be optimized,in particular those of the universities;
- that in order to address the exportmarket a consortium similar to thePhilippine model is required;
the Seminar attendees are now wellaware of the potential export market andthe effort required to go after themarket;
- and that the Sri Lankan softwareindustry is engineering/technologydriven and not market driven due in partto a lack of sales and marketingprofessionals.
7. RECOMMENDATIONS
7.1 RECOMMENDATIONS FOR THE PHILIPPINES
The major recommendations for thePhilippines are as follows:
- complete a business plan for theconsortium;
- complete a sales and marketing plan forthe consortium;
- obtain the interim funding for theNational Plan;
- distribute the leads resulting from themission to North America to theconsortium members;
- work with the Government andeducational institutions to insure thatthere is an adequate and qualifiedsupply of engineers, scientists, systemsanalysts and programmers;
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work with the telecommunicationscarriers and regulators to insure theavailability of high speed, reliableinternational and nationaltelecommunications facilities;
- continue to develop project managementtechniques and project managers forinternational projects;
- establish quality control practicesand procedures;
- develop techniques in management andquality to insure that schedules aremet;
- work with the embassies of the U.S.,Canada, Japan, Australia and the EECcountries to establish a method forapproval for training visas andtemporary work permits;
- work with Philippine Airlines andothers to obtain the lowest rates forthe consortium members and for thetrainees;
- the consortium should be registered inthe consultant data base of the AsianDevelopment Bank and the World Bank;
- the consortium should bid for majornational projects;
- the consortium should work withPhilippine financial institutions towork out arrangements to support theirbids for national projects within thePhilippines and in other countries;
- and the electric utility needs toinsure that there is backup power forthe hardware used for outsourcingincluding air conditioning and lightingfor the professionals and their supportteam. If the utility cannot providebackup then the consortium needs toprovide a backup power system.
7.2 RECOMMENDATIONS FOR SRI LANKA
The major recommendations for Sri Lankanare as follows:
- immediate action to be taken by theEDB to contact the attendees of theSeminar in order to establish the new ITassociation;
- put a plan in place for follow-upmissions to Australia and Japan and aninitial mission to North America withfunding from the EDB and the ITC;
- put a plan in place for internationalexhibits with funding from the EDB andITC;
- implement the four year national plan;
- there is a need for the continuedfollow-up on the results of the SriLankan mission;
- complete a Sales and Marketing planfor the Sri Lankan software industry;
608
- as part of the national plan obtainapproval and budget to write an overallSri Lankan software industry businessplan;
- put a cohesive plan in place for thetraining and education of the necessarypersonnel required to meet the futureneeds of the Sri Lankan software exportindustry and obtain the necessaryfinancing, because at this time SriLanka only graduates 100 engineers peryear as per information stated by one ofthe universities;
- there is a need to strengthen theexisting IT educational institutions inSri Lanka;
- international project managementsystems need to be developed thatinclude quality control procedures andcontrol of schedules;
- eliminate the luxury tax on computersand peripherals;
- work with the telecommunicationsservice providers to insure theavailability of of low cost, reliableand high speed national andinternational facilities;
- and work with the power utilities toinsure the availability of uninterruptedpower for the computer centers or findalternate means.
8.0 REFERENCES
(1) International Trade Centre."Promoting Trade" Jan. 1990
(2) Lissandrello, G.J. "Programme toPromote an Export Result-orientedSupport S'rategy for the Foreign Tradein Technical Consultancy Services fromthe Philippines to North America andfrom Sri Lanka to Selected Countries inAsia and the Pacific DisseminationSeminars" ITC Report, July 1992
Political Challenges to Globalisation of Public Telecommunications Operators
Yoshiko KURISAKIOECD
Paris, France.
1. ABSTRACT
Globalisation of the economy and the liberalisation of telecommunications havemotivated major public telecommunications operators (PTOs) to extend theirbusiness activities in the international sphere. All the PTOs in majoreconomies are becoming competitive with each another. This is creating variouspolicy issues that are not covered by the framework of existingtelecommunications policies.
2. INTRODUCTION
International investment by PTOs intelecommunications markets abroad has occurredonly in the past few years, but its growth hasbeen considerable. The major PTOs in OECDMember countries are becoming increasinglydynamic and outward-looking, regardless of theirstatus (i.e. government-, privately- ormixed-owned). There were 25 cross-borderacquisitions by PTOs and othertelecommunications firms from 1988 to 1989,while there were only six in the previous years.The amount of value per investment has rapidlyincreased since the enC-1980s. In 1989 and1990, PTOs invested more than half of the totalinvestment that occurred between 1986 and 1990.This was true for both the number and value ofinvestment.
This report focuses on impacts of extending PTOsactivities in an international sphere beyondtraditional transmission of voice and data onexisting national telecommunications policies.The focus of analysis is placed on investment inservices, not in equipment. This is becauseinvestment in the former has greaterimplications to national telecommunicationspolicy than the latter.
Following the introduction in Section 1, factorsthat motivated PTOs to develop their businessedge abroad are briefly discussed in Section 2.Section 3 examines various forms of
globalisation followed by discussion of theapplicability of existing policy instruments oftelecommunications inSection 4. Policy issues that arise from policyvacancies are presented in Section 5 followed byconcluding remarks in Section 6.
3. FACTORS THAT MOTIVATED PTO GLOBALISAION
Both internal and external factors have driventhe global developments of PTOs.
(1) Globalisation of large firms
Globalisation of economic sectors has broughtnew market opportunities to PTOs.Communications networks are critical for
The views expressed in this paper are those ofthe author and do not necessarily reflect thoseof the OECD or its Member countries.
BEST COPY AVAILLE609
management of multinational enterprises (MNEs).Cost effectiveness, reliability and enhancedcommunications functions to support specificrequirement of their individual sectors arestrongly required for their networks. Intechnical terms, NMEs have a high level of needfor so-called "End-to-end systems" intelecommunications. A provider of such servicesshould have enough experience in networkplanning, construction and operation, i.e. anexpertise usually found amongst PTOs.
(2) Technology development
The technologies that are needed for globalcorporate network systems are increasinglybecoming available on a commercial basis2.Synchronous Optical Network (SONET), SynchronousDigital Hierarchy (SDH) and AsynchronousTransfer Mode (ATM) are becoming widely used fora high bandwidth transmission system and willenhance interconnection between corporatenetworks built in different countries.Technologies that allow access to networkintelligence are growing out of nationalnetworks to the global sphere.
(3) Competition in information systemsservices
PTOs are involved in an inter-sectorialcompetition. Large-scale corporate networksusually transmit both voice and data, such asthe one generated by Computer Aided Design (CAD)systems. So-called "system integrators" providespecialised know-how to develop and manage suchnetworks that may be sourced from a variety offirms, such as specialised firms (e.g.Electronics Data Systems Corp.), computer systemvendors (e.g. IBM and DEC) and even subsidiariesof accounting firms (e.g. Andersen Consulting).PTOs are merely one of these competitors.
(4) Pressure from domestic markets
a. Less growth in the domestic market
The profit margin for basic telecommunicationsservice is decreasing. The market growth isalready saturated. While some new services areemerging, they are providing relatively smallerprofit margins. Market liberalisation has givenbirth to an increasing level of competition,that is leading to price rebalancing andcost-based tariffs. Many of the OECD countries,however, prohibit PTOs to enter business areas
that are not directly related totelecommunications. Because of the lack of newpossibilities to increase revenues domestically,PTOs have turned eyes to new businessopportunities abroad.
b. Preparation for possible competition inthe home country
The provision of services in foreign marketsprovide opportunities for PTOs to improve skills(i.e. management and operation know-how) toprepare for the entry to new business areas inthe home country that are likely to be opened tocompetition in the future. Some RegionalHolding Companies (RHCs) in the US investing inCATV services in UK are examples of this case.
(5) Scale economies
PTOs may benefit from scale economies byoperating globally. The costs of procurement,R&D for new technologies and the supply offinancial resources are shared between domesticand foreign business activities. Intangibleresources, such as management know-how incertain markets, may also be shared.
(6) The opening of new telecommunicationsmarkets in developing countries
Many countries in the world need access toforeign capital and operational know-how for thedevelopment of telecommunicationsinfrastructure. The infrastructure isconsidered to be indispensable for economicdevelopment and is urgently needed in manycountries in Asia, Latin America, the Centraland East European Countries, the Baltic Statesand New Independent States of the ex-SovietUnion. These countries intend to facilitate theintroduction of foreign capital through the saleof shares to international investors. The saleof the shares of PTOs in Mexico, Argentina,Venezuela, etc. to the North American andEuropean PTOs illustrates this case. A similarplan is also being discussed in Hungary.
(7) Competition in internationaltelecommunications services
Resale and shared use of leased circuits havebecome allowed by the changes to the CCITT D1Recommendation made in 1991. This hasstimulated competition in internationaltelecommunications services, both in voice andvalue added services.
Excess capacity in international trunk-linesfacilitated by fibre optic cable motivates PTOsto continue price competition to obtain moreinternational traffic to fill the capacity.Pressure from regulators, such as OFTEL in theUK and FCC in the US, is increasing to requirePTOs to restructure tariffs based on costs.
4. TWO DIMENSIONS OF GLOBALISATION
4.1 "OUTGOING" DIMENSION
Co-operation between common carriers was themajor way of organisation for globalisation
610
until recently, for example, joint account
management (JAM) agreements. Under JAM, twoPTOs in different countries mutually take careof the partner PTO's corporate customers thathave branches in each other's country. In thissystem the customers may construct and maintaininternational corporate network systems onlywith the support of their home country's PTO.
The development of JAM agreements has lead toso-called "one-stop-shopping" (OSS). While JAMis a bilateral agreement merely for the
customers of the countries concerned, OSSproviders are no longer concerned about thecustomers' nationalities. These alliances areintended to serve MNEs that develop informationnetworks via telecommunications infrastructureworld-wide. Examples of providers of OSS areEutelcom (FT and DBP Telekom, started in 1992),Syncordia (BT, started in 19913) and Unisource(PTT Telecom in the Netherlands and SwedishTelecom, started in 1992). The emergence of OSSindicates that large PTOs are using theirdomestic networks to expand services to foreigncustomers.
The outgoing dimension of securing customers hasgrown rapidly since the end of the 1980s with anincrease in the level of overseas investment bymajor OECD PTOs. Such investment is in the formof a joint venture (JV) with a firm in the hostcountry, purchases of shares of existingtelecommunications firms and mergers andacquisitions (MBA). Direct investment has anadvantage for PTOs in that they become globallyknown (i.e. global presence) in a relativelyshort time and is a means of quickly enteringthe telecommunications market. Examples oflarge scale direct investment include thepurchase of shares of the PTO in New Zealand(Telecom New Zealand) in 1990 by a consortium ofAmeritech and Bell Atlantic (both from the US)and the purchase of 51 per cent of the shares ofMexican PTO, Telefonos de Mexico (Telmer) by aconsortium including South Western Bell and FTin 1991.
In some cases PTOs are installing
telecommunications facilities abroad to ensureend-to-end operation of global corporatenetworks, notablly the installation of packetswitches by BT in France and the US, and by FTin the UK.
4.2 "INCOMING" DIMENSION
A PTO may take advantage of internationalnetwork users without going abroad. One way todo so is to invite the users of internationalcorporate networks to locate their hubs in thePTO's home country. The PTO may obtain highprofit from the increased international traffic.Another way is to transmit international tollcalls that originate and terminate in othercountries. For example in Figure 1, a PTO incountry A has a cable for international trafficbetween countries A and B. The PTO obtainsprofit by providing toll call transmissionservice to international calls from countries C,D and E to country B through the cable. Thelocation of the cables also give incentives forMNEs to locate their communications hubs in
country A. The PTO in country A thus obtainsmarkets for international traffic both fromusers in the domestic and foreign markets.
The "incoming" dimension creates potentialcompetition between PTOs. In the former exampleabove, a PTO may obtain a large source ofrevenue, if foreign firms locate their hubs inthe PTO's country. Several PTOs will compete toobtain a hub of an international network oflarge users, since this provides new businessopportunities4. In the latter example, if there
Figure 1Current condition
Country C
is another country P that has its own cable toconnect with country B, the countries A and Pare in competition in trying to obtain trafficfrom the countries D and E. Some MNEs maylocate their hubs in country P, rather than A,if it is more cost-efficient (Figure 2).
Country D
a %.
-)Cables for international traffi
MNE b
Country A
NN
MNE * a
Country EMNE: Multi National Enterprise
Figure 2Potential competition between PTOs A and P
CountryCountry A Country B
N\'Cables for international traffic.t.......
Country D
Country E i\iv)
Country P
New cables for international traffic
MNE 'a
611
MNE: Multi National Enterprise
5. HOW MUCH EXISTING TELECOMMUNICATIONSPOLICIES COPE WITH NEW ISSUES?
5.1 REGULATORY CONDITIONS OF OUTGOING FOREIGNINVESTMENT
Most of the OECD Member countries do not havespecific rules for its PTO investment abroad.Some Member countries have restrictions onoutgoing investment by PTOs but these rules arevulnerable. In Germany, for example, thecurrent law defines DBP Telekom as the FederalAdministrative body and for this reason limitsits activity within the boundary of the country.It is, however, expected that, after theamendment of the law, foreign investment by thePTO will become possible through itssubsidiary5.
5.2 REGULATORY CONDITIONS ON INCOMING FOREIGNINVESTMENT
Countries are more sensitive to in-coming directinvestment by foreign PTOs in the domestictelecommunications market. Some seem to feelthat they need some regulatory safeguards tomaintain control of national PTOs, even if, atthe same time, their national PTOs are active ininvesting abroad.
Table 1
a. Foreign ownership
Regulation of foreign ownership of domestic PTOsis the most direct measure to limit inwardforeign investment in telecommunicationsmarkets. The regulation (or deregulation) offoreign ownership of PTOs is currently underdiscussion in many OECD countries. New ruleshave been established in countries such asAustralia and New Zealand. Foreign ownershiprestrictions on NTT and KDD in Japan wererelaxed at the beginning of 1992.
Generally speaking, those countries whose PSTNoperator(s) are legal corporate entities andjoint stock companies need regulations onownership. This applies, at present, to eightcountries (Australia, Canada, Denmark, Finland,Japan, New Zealand, the UK and the US). Thelevel of the percentage of shares that may beowned by foreigners differs widely, from norestriction (New Zealand and the UK) to 49 percent maximum (Australia for the second carrierand Denmark).
The type of services provided by those PTOsfully or partly owned by foreigners differs fromone country to another (Table 1). Therestrictions are generally more strict on voicetelephony services via fixed link networks than
Restrictions of foreign ownership:Matrix showing the principal PTO and its competitors in the domestic market(as of October 1992)
Foreign ownership of competitors to the principal PTO
Yes No
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Canada*Denmark*Finland*Japan*New Zealand*UKUS*
*: With some restrictions/exceptions.
Italy (SIP, Italcable)Portugal (CPRM)Spain
2
(
PSTN:M:M-V:
Australia (PSTN, M, V)Belgium (V)France (M,V)Germany (M, V)Italy (V)The Netherlands (M-, V)Norway (M-)Sweden (PSTN, M, V)
) -- Services open to competition.Public Switched Telecommunications Services
Mobile Services: The second mobile operator not yet selected.Value Added Netwotk services
AustriaIcelandIrelandItaly (IRITEL, Telespazio)LuxembourgPortugal (Telecom Portugal, TLP)SwitzerlandTurkey
Network
Source: Compiled by the author from various sources.
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those for mobile, satellite or value-addedservices. The ceiling on ownership is differentbetween services in different countries. Forexample, France allows less than 20 per cent offoreign ownership in mobile and value addedservices, while Germany has no restriction.
b. Other measures for the control of PTOs
Some countries that have rules on foreignownership have several other measures to ensure
the minimum control of national PTOs.Governments in some countries own a special
share that has veto power in decision-making forcritically important issues. The "Golden share"held by the UK and the "Kiwi share" by NewZealand governments are examples of such cases.Restriction on nationality of the members of theBoard of Directors is another measure of PTOcontrol. There are yet other measures that infact limit foreign ownership of PTO. Closure ofthe share to the investors currently undertakenby Optus Communications (Australia) and PTTNetherlands (the Netherlands) and generalrestrictions on foreign investment that mayapply to telecommunications sector, such as theExon-Florio provision in the 1988 Omnibus TradeAct (the US), are examples of other measures.In most countries, more than two measures areused for control.
6. POLICY ISSUES
6.1 NATIONAL INTERESTS
Pros and cons exist in national interests in PTOglobalisation. Positive results such asincrease in revenue from trade are expected fromout-going investments. In- coming investmentwill bring some advantages, such as access tothe capital for domestic PTOs and increasedoption to users due to competition fromforeign-owned PTOs. National security andconservation of R&Dcapability are, in contrast, major reasons thatjustify limitation to in-coming investment.
Difficulty arise from the fact that manycountries have contradictory interests, such ashaving an interest in making but not inreceiving investments. A distinction betweentwo groups of countries, i.e. those that investin telecommunications market in foreigncountries and those that receive investment fromabroad, is not possible and unrealistic in theanalysis of possible policy issues.
Asymmetry in existing regulations between OECDcountries is likely to give birth to a set ofpolicy issues relevant to all countries.National telecommunications policy, whileoriginally developed to set rules for domesticmatters, now has broader cross-borderimplications.
6.2 ISSUES
Several policy issues arise from the policy
vacuum in existing telecommunications policy.
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a. Competition !ssues
Possibility of subsidised competition:
Where do monopoly (or near-monopoly) PTOs obtainfinancial resources to invest abroad? Is therea possibility of "subsidised competition" whenthese PTOs compete with non-monopoly PTOs in thetelecommunications market in third countries(i.e. those countries that receive investment)?How can one avoid "subsidised competition" mostefficiently?
Viewed from the investing countries, can PTOsuse profit from the home country to investabroad, instead of sufficiently using profits toimprove services and reduce tariffs to domesticusers?
A private firm owned by a foreigngovernment:
Would the purposes of privatisation be achievedif the new (major) owner of a PTO is a foreignPTO, either fully or partly owned by the foreignGovernment? Would it guarantee benefits ofprivatisation, such as improved management andquick response to customer needs, for the hostcountry?
b. Trade issues
Non discrimination in market access:
Is the same level of accessibility to the marketin the country concerned assured for bothdomestic and foreign PTOs? Are currentregulatory systems opened to foreign-owned PTOsin terms of the availability of informationneeded to access national markets, such asnetwork information and minimum customer data?
Reciprocity
Is it appropriate to apply a rule of reciprocityto investment in telecommunications? If so, towhat degree should trade reciprocity rules beapplied to foreign investment by PTOs?
Liberalisation in telecommunicationsequipment interconnection:
If new entrants are limited in their options inequipment, such conditions may work as a defacto entry barrier to the service market.Although it has been a fact that PTOs often hadcertain manufacturers who provided equipmentalmost exclusively to them, such practices willhave to end. The policy of maintaining monopolyin telecommunications infrastructure may need tobe reviewed in this context.
c. Other issues
Beneficiaries of profit from the hostcountry
Viewed from the countries receiving investment,what mechanism is needed for the public to takethe best advantage of profits fromtelecommunications markets in its own country?
Is there a need for a mechanism to prohibit theprofits (some or all) from going abroad?
7. CONCLUSION
What is important is to investigate the rightframework to analyse policy issues. Existingrules in telecommunications are only partlyinstrumental to handle market access issues.Policy vacuum in telecommunications is seen inhandling questions such as:
What instrument, other thantelecommunications policy, do we have toanalyse possible issues?
What international rules do we need tohandle policy issues associated with PTOglobalisation?
All the PTOs are, either explicitly orimplicitly, in a competitive situation under theglobalising economy. Rules originallyformulated for domestic markets are now factorsof competitiveness for PTOs, that account formuch of their revenue. Those rules, such astariff levels, liberalisation and quality oftelecommunications services, including bothprivate and public networks, and availability ofnetwork information, are critical factors forcorporate users for the planning andconstruction of their information networks. Theformulation of telecommunications policy thattakes into account a globalising economy will
inevitably lead to further liberalisation ofdomestic telecommunications, if a country wishesto take advantage of globalisation.
Notes
1. Booz.Allen & Hamilton (1991),International Diversification Strategies forTelecommunications Service Companies, the UK.2. Source: Uhlig, R.P. and Bartosewicz, J.(1992), The Evolution of Global Networks andIntelligent Networking, (a paper presented atthe Eleventh International Conference onComputer Communication).3. Its associating PTOs are yet to beobtained as of October 1992.4. Such a type of competition isincreasingly being seen between major EuropeanPTOs.
5. Information as of October 1992.
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TIPS, TRICKS, AND TECHNIQUES FOR TROUBLE-FREE TELEWORK
Gil E. GordonGil Gordon Associates
Monmouth Junction, New Jersey USA
1. ABSTRACT
For all of the discussion about the benefits and valueof telework (or telecommuting) in recent years, littleof this discussion has been devoted to practical suggestionsfor actually implementing telework in an organization.Now that the telecommunications and IT tools are generallyin place in many Pacific Rim countries to adequatelysupport telework, this paper is offered to .give somespecific guidance about the "do's" and "don'ts" forsuccessful telework.
2. INTRODUCTION
For many years, telework has been aninteresting innovation around the world.In the last few years, however, it hasbecome more popular and more widelyaccepted. Much of the telework in placealready is of the work-at-home variety,although there is also growing use ofsatellite offices and "telework centers"as alternative work sites.
Many of these telework initiatives haveresulted from "do-it-yourself" approachesin which employers have invented orre-invented the methods for managingthese programs. This approach is admirablebecause it is the best kind of innovation,but it is also somewhat unsatisfactorybecause of the potential for wasted timeand effort to discover the solutions toimplementation problems that have beenlearned by others in other settings.
This paper will provide suggested solutionsfor some of these problems, and attemptto share some knowledge that has beenobtained from more than ten years ofimplementation of telework programs aroundthe world, in both private and public-sectororganizations. Much of this experiencecomes from the work-at-home form oftelework, and the special implicationsfor satellite office or telework centersettings will be noted.
The word "telework" has been used in manyways. For the purpose of this paper, itrefers to salaried employees who normallywork in a central or head office, but whoinstead work part of every work week intheir homes or in a satellite office or"telework center." This paper will notrefer to self-employed individuals, or topeople doing work at home after the normalworking hours, or to sales representativesor other employees who traditionally spendlittle time in a regular office setting.
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Also, this paper will presume that thereader has already made the decision toimplement telework in some form, andunderstands the basic concepts andbenefits. Thus, there will be little orno discussion about the organizational orsocietal benefits of telework.(1)
3. WHAT JOBS ARE SUITED FOR TELEW)RK?
There is a surprisingly wide range ofjobs that can be done away from thetraditional office setting. The historyof telework suggests that most of theseare in the data processing area forexample, programmers, systems engineers,data entry clerks, and technicaldocumentation writers. While these arestill quite common, we have seen growthin professional-level knowledge worker jobs(such as marketing research, financialanalysis, engineering, and variousgovernment staff jobs) and in inboundcall center jobs (such as airline orhotel reservations agents). Also, we areseeing a much wider range of uses oftechnology in telework; the much-publicized"electronic cottage" view of remote work(with extensive, and expensive, forms oftechnology) does not always represent theway that telework is practiced today.
Here are some guidelinesjobs for telework. Keepthese apply to all formsthough the first point isto work at home:
for selectingin mind thatof telework,more relevant
A. Choose jobs that are physically portal-Lewhatever the person needs to do the job
can be taken from the office in a briefcaseor a box, or can be accessed over thephone line. Thus, the person who mustget up to take papers from a file cabinetseveral times each day would not be agood teleworker.
B. Choose jobs that have well-definedbeainnina and ending points an importantfeature because it will be much easierfor the manager to manage remotely whenthe assigned tasks are easily measuredand defined. This doesn't mean thatteleworking jobs must only be low-leveljobs with unit measures of performance,e.g., fifteen forms processed every hour.We are trying to avoid jobs whose outcomesare so vague and hard to specify that themanager will find it almost impossible tobe clear about what the remote worker isexpected to do.
C. Choose jobs that require a minimum ofunplanned face-to-face contact with co-workers or clients. Teleworkers typicallyspend at least one day in the centraloffice each week, and during that timethey can attend meetings as needed. Whilethey are away from the office, they remainin contact as needed via telephone, voicemail, electronic mail, and (as pricescontinue to drop and availabilityincreases), video.
There are many more jobs suited for teleworkthan most people realize. Teleworkersare not at home (or in a satellite office)five days a week, and even when they arein one of those locations, they remain incontact with the office in many ways.Just as most organizations have survivedvery well when managers travel or attendmeetings off-site, they can survive justas well when employees work away from theoffice. We are no longer in the IndustrialAge, when everyone must be at the samework location at the same time it orderto be productive.
4. WHICH EMPLOYEES WILL BE THE BESTTELEWORRERS?
The answer to this question depends onwhich form of telework is involved. Forsatellite offices, there is virtually nodifference from how people are selectedto work in the central office. In somecases, organizations select these peoplebased on their commuting times or distancesfrom the central office; the longer thecommute, the more likely the person is tobe a teleworker.
No matter which remote location is selected,the objective is to select employees whohave demonstrated the skills that showthey can self-manage when away from thecentral location. Since they will beworking much more on their own, it isimportant to choose employees who:
A. Can manage their own workload andschedules effectively;
B. Can recognize when they are (or arenot) doing the job well, and are able tocontinue or change their work accordingly;
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C. Are self-disciplined enough to beginand complete their work day without needingthe manager standing around to providedirect supervision;
D. Have needs for socialization which areonly moderate, so they will not feelisolated or alienated when working awayfrom the office for part of the week.
As can be seen in the first three ofthese four items, this selection processgenerally means that the better employeesare often chosen for teleworking. Thisis not a random selection process; infact, quite the opposite is true. Mostorganizations quickly acknowledge that theyare "cheating' when they set up teleworkprograms; that is, they are carefullyselecting teleworkers who are most likelyto be successful, instead of taking amore random approach. This is done in anattempt to give the better (or best)workers a chance to do their jobs in amore flexible setting, and with much greatercontrol over their own work processes.
In some ways, the characteristics ofsuccessful teleworkers are similar to thoseof successful entrepreneurs: a willingnessto be held accountable for results, adesire to have higher degree of controlover the work methods, and less desirefor high levels of organizationalsocializing and politics. In short, theyare concerned with the products, not theprocess, of the job.
5. WHAT RINDS OF MANAGERS CAN MANAGEFROM A DISTANCE?
To answer this question, we can begin bylooking at the profile of successful remotemanagers who are not involved inteleworking. For example, the manager ofa field sales organization or the principalof a school have to manage at a distance.Those who succeed at these and otherforms of remote management have thefollowing characteristics in common:
A. They believe that remote management isnot only Possible but even desirable, insome cases. They don't need to be lookingover someone's shoulder to feel that theyare doing their job as a manager.
B. They have abovg=avermelachnicaLandmanagerial skills. These are needed becausemanaging from a distance puts additionalpressure on the manager. If he/she is nota good manager to begin with, the remoteworkers will not be productive.
C. They see their role as manager asbeing more of a coach than a boss. Whenremote workers are selected according tothe criteria listed above, the managerneeds to make sure that the workers haveall the materials and information they
need. The manager also must be availableto solve problems and remove obstaclesbut they do not need to be giving ordersevery moment and otherwise control thework methods instead of facilitating thework results.
Just as teleworking is not for everyemployee, managing (or accepting) teleworkis not for every manager. This is muchmore of an important issue for work-at-homethan for satellite office work. Somemanagers cannot understand how a personcould be productive when working at home
and others cannot understand how aperson can be productive when working ina noisy, crowded office. We must allowthese two kinds of managers to have thechoice that suits them.
6. WHAT RINDS OF TRAINING ARE REQUIREDFOR MANAGERS OF TELEWORRERS?
To answer this question, we must look atthe differences between work in the centraloffice and telework. In the centraloffice, managers have the opportunity (or,we might say, the luxury) of frequent,close contact with subordinates. This issometimes known as "hallway management"as the manager passes by the subordinatesin the hallway, he or she asks, "How isthe project going ?" or "Have you completedthat report yet ?" This is a satisfactorymanagement style but it is far from thebest way to manage. This kind of"hallway management" has several drawbacks:
A. It depends on those chance encountersin the hallway (or other locations) forthe vital communication to occur; if managerand subordinate don't happen to encountereach other, the risk is that the subordinatedrifts away from the desired work path.
B. Very often, "hallway management" dealswith determining progress toward the goal,rather than trying to be more specificabout what the goal is in the firstplace.
C. By allowing these managerial encountersto happen by chance, instead of choice,the manager essentially abdicates onhis/her responsibility to provide ongoingdirection and performance feedback. Thisis, in the author's opinion, a seriousfailing.
The training for managers of teleworkersis intended to overcome these problems.The goal is to help managers understandtheir role in specifying:
Outcomes and setting goals: defining thewhat of the task;
Deadlines and interim benchmarks: definingthe when of the task;
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Acceptable quality guidelines: definingthe how well of the task.
Note that there is nothing about thesethree aspects of supervision (i.e., what,when, and how well) that is differentfrom what we should expect managers to bedoing as a matter of routine in theoffice. The only difference is thateffective supervision of teleworkersdemands that managers be specific aboutthese elements. Interestingly, we hearfrom managers of teleworkers that theirprocess of being specific about thesethree elements for teleworkers "spillsover" to their management of their workersin the office as well. This is animportant (and unexpected) benefit oftelework programs.
These three basic managerial skills areimportant for all forms of teleworking.There is the temptation to believe thatsince satellite offices or telework centersappear to be very similar to the traditionalcentral offices, there is no differencein the role of the manager. This isgenerally not true, because supervisorsof satellite office workers typically workin the central office, and in many waysare as distant from their subordinates asif they were working at home.
There are two additional training topicsto be mentioned here. First, it isimportant for managers of teleworkers totake extra efforts to include theteleworkers in every aspect of officelife, and to make sure they feel thatthey are full members of the organization.
For example, the manager must surethat training programs, careeropportunities, and access to company socialevents is equally available for teleworkersas for central-office workers.
Second, the manager has to pay specialattention to the career goals of theseremote workers. It is often said thatone drawback of telework is the risk thatbecause you are "out of sight" you are"out of mind,", or out of consideration,for desirable promotions and job transfers.Managers must be sure that teleworkers donot become "second-class citizens" in thisregard. Two of the things the managerscan do are:
A. Be sure that teleworkers are invitedto and included in important corporateevents, such as staff meetings and projectreview meetings. These are excellentopportunities for recognizing theaccomplishments and contributions of remoteworkers who otherwise are not as visibleto their co-workers and senior management.
B. Provide opportunities for theteleworkers to take on new responsibilitiesor projects that might otherwise bedelegated to central-office workers. Theproblem here is that the manager mightfind it easier to delegate these tasks topeople in the office simply because theyare close at hand. It may take someextra effort to arrange to bring theteleworkers in so these projects can beassigned, but this effort will be rewardedbecause it results in a more competentstaff overall.
7. WHAT TRAINING IS REQUIRED FOR THETELEWORKERS THEMSELVES?
This depends on whether the teleworkersare working at home or in a satelliteoffice or telework center. Since much ofthe telework now in place or being plannedfor the Pacific Rim region is not theat-home variety, this section will addressthe satellite office training.(2)
Here are some of the important trainingtopics for teleworkers:
A.. ORGANIZATION SKILLS - Since teleworkerswill be working much more independently(i.e., away from the direct supervisionfrom and access to their manager), theywill have to manage their time moreeffectively, learn to schedule their taskseffectively, and place more attention onstaying on schedule. In essence, theseteleworkers take on a more entrepreneurialattitude - working remotely is, in someways, very similar to being your ownboss.
B. COMMUNICATION SKILLS - Teleworkers beginto rely more on phone, fax, and electronicmail communications in place of face-to-face communications. This means theymust consider the information needs ofco-workers, they must write with moreprecision and clarity than is common inmost verbal communications, and they mustbe very diligent in replying to theseelectronic messages. For example, faxand e-mail are very effectivecommunications tools but they areworthless if they are not read and respondedto on a timely basis. This is why manyorganizations require teleworkers topromise they will check (and reply to)their e-mail messages twice in the morningand twice in the afternoon, for example.By doing so, the teleworkersthey are doing their best tocontact with co-workers even iflocated somewhere else.
can showstay inthey are
C. TECHNICAL SKILLS - Finally, it isimportant for teleworkers to be competentin the use of software, remote LAN access,and other technical "tools~ that allowthem to do their work. The differencebetween teleworkers and other workers in
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this regard is that teleworkers will notalways have easy access to the technicalexperts in their departments who can provideanswers and solve problems. Since theteleworkers are working more independently,they must be able to solve these problemson their own most of the time.
8. WHAT ARE THE IMPORTANT TECHNICALPLANNING CONSIDERATIONS?
It is not possible in this paper todescribe all the technical elements oftelework, since every situation isdifferent. Instead, the following generalguidelines are offered:
A. PROVIDE FULL FUNCTIONALITY Teleworkerswho are used to having easy access tomultiple systems in the office, and toworking at high data transfer speeds (9600bps or faster) will be frustrated iftheir remote work setting does not givethem the same access. This is more of aproblem for work-at-home than for satelliteoffices, in general. The author's beliefis that it is better to avoid teleworkingcompletely than to do it in a sub-standardfashion. That is, unless the company canprovide the tools that allow the teleworkersto do the job in the same way as if theywere in the central office, it might bebetter to forget about setting up theseremote workers.
B. HAVE FEWER AND BETTER TELEWORKERSFollowing the same thinking, it is betterto have 20 teleworkers that are fullyequipped to be productive, than to have50 teleworkers who are required to usesub-standard technology. Very often thisbecomes a matter of budget priorities.
For example, consider the decision aboutthe type of laptop PC to be given toteleworkers. The lower the price of thelaptop (in general), the slower theprocessor speed, the worse the displayquality, and the less comfortable thekeyboard. Telework will not be assuccessful if the company chooses topurchase a lower-cost laptop that is harderand more frustrating to use. It isadvisable to purchase fewer of the bettermodels so that this smaller number ofteleworkers will be fully successfuland then it will be easier to justify theexpense of purchasing more of these betterlaptops for future teleworkers.
C. TAKE ADVANTAGE OF EMERGING TECHNOLOGIESTelework programs are often the test
sites for new software, ISDN applications,wireless communications, enhanced faxservices, and other new hardware/softwaresolutions. One common mistake with teleworkprograms is to simply duplicate thetechnology solutions that are in use inthe central office, instead of usingtelework as the opportunity to innovateand try new solutions.
Some of these new solutions, however,might be more attractive than they aretruly valuable. For example, much hasbeen written about the possible role ofvideoconferencing in telework. It issuggested that the ability to have videoaccess will make remote work more practical.The author's opinion is that video doeshave a role in telework, but it is differentfrom what many managers imagine. Ifvideo is used simply as a kind of long-distance supervision, it will not beeffective and will be a waste of money.But if video is used to make it easier toconduct multi-location staff or projectmeetings, or to enable remote teleworkersto see a physical object that they couldotherwise not see (such as a productcoming off of a manufacturing line), thenit will be useful.
The other issue with videoconferencing isthe big difference in cost and bandwidthrequirements between freeze-frame or slow-scan video, and full-motion, broadcast-quality video. We would likevideoconferencing images to be just likewhat we see on our television sets athome, but this expectation is oftenunrealistic based on the budgetaryrealities of the 1990s.
9. HOW CAN AN ORGANIZATION EVALUATEITS TELEWORR EFFORTS?
The answer to this question depends onthe original objectives for telework. Itis rare that these objectives are purelyscientific in nature. If they were,organizations would randomly selectteleworkers and give them little or notraining. The results would be measured,and the "value" of telework would bedetermined.
In reality, most organizations are notinterested in scientific experiments. Theyare in the business of increasing salesand profits, increasing productivity ofknowledge workers, and reducing operatingexpenses. Telework must be assessed againstthese objectives.
The author suggests the following criteriafor evaluating telework, though all willnot apply in every situation. This listof seven items is meant to suggest thetype of evaluation measures to consider:
A. ARE WORK QUALITY AND QUANTITY KEPT THESAME? This is a "break-even" philosophy,i.e., if quality and quantity of work areno less than before telework, it issometimes assumed that telework is asuccess. This evaluation usually dependson the presence of other benefits, suchas those listed below.
It has often been reported that employeeproductivity increases with telework
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programs sometimes as much as 25% ormore. The author has become somewhatskeptical about these claims, but onlybecause of the difficulty of defining andmeasuring white-collar workerproductivity. Without a doubt, mosttelework programs have produced increasesin output; the problem is that the outputof professionals does not always make iteasy to find precise output measures.
In general, we look for a combination ofmeasures that include level of output,quality, number of projects assigned atthe same time, and progress againstdeadlines. These combine to form a moregeneral measure of "employeeeffectiveness, and it is on this measurethat we see great success in well-managedtelework programs.
B. ARE OFFICE SPACE EXPENSES REDUCED?This, of course, is one of the biggestattractions of telework. Depending onthe mixture of work-at-home and satelliteoffice telework, and on the number ofdays the teleworkers are away from thehead office, the actual space savingswill vary widely. Also, there will be nosavings at all if the employer retainsthe teleworker's's desk or office spaceeven if the person is working somewhereelse. This is why many telework programsare starting to experiment with a shared-office concept in which few, if any,people have their own assigned work areas.
Depending on the local real estate marketand vacancy rates, the ability to reducethe need for office space or even tcmove to lower-cost office space insatellite office can be a very importantreasons to use telework.
C. ARE CYCLE TIMES REDUCED? If teleworkersare able to work with fewer interruptionsand with greater concentration, it ispossible that they can complete projectsor assignments in shorter time. In today'sdownsized organizations, this letsmanagement make better utilization ofexisting employees because teleworkingemployees can get the same job done inless time.
D. ARE VALUABLE EMPLOYEES RETAINED LONGER?Sometimes, employees find it difficult tocontinue in their jobs because of familyor medical problems, because of very longcommuting, or other reasons. In thesecases, telework can be helpful if itallow the employee to continue workingwithout having to come to the centraloffice every day. As many Pacific Rimcountries begin to face a shortage ofqualified professionals, the need to retaincurrent employees is becoming more evident.Therefore, telework can become popularbecause it helps employers avoid costlyand disruptive employee turnover.
E. ARE NEW EMPLOYEES RECRUITED MORE EASILY?Similarly, employers who offer the teleworkoption will find it easier to recruit newemployees who find that option attractive.Even though telework is becoming morepopular, it is not very widely used.Therefore, an employer who offers teleworkcan have a competitive advantage whenrecruiting for new employees.
F. DO MANAGERS HAVE MORE TIME TO PLAN?One interesting aspect of telework isthat it reduces the amount of time themanager needs to directly supervise theemployees. When they are teleworking,these employees are, in effect, supervisingthemselves. The manager is stillresponsible for their performance, butdoes not have to spend as much time onthe direct supervision. This should allowmanagers to have some additional timeavailable for the other parts of theirjobs that often are not done as well ascan be. Specifically the manager nowhas time to do some longer-term planning,instead of having to concentrate only onthe daily workload.
G. DOES CUSTOMER SERVICE IMPROVE? - Finally,we have seen cases where the teleworkoption allows the organization to providebetter customer service and thereforeincrease sales. For example, sometimestelework is used to extend the hours ofservice for telephone-based jobs such ashotel or airline reservations, or acceptingorders from customers. This happens becausethe teleworkers find it easier to workearly in the morning or later in theevening, compared to the traditionalbusiness hours in the central office.These extended hours of service can resultin higher satisfaction of customers whoprefer to contact the company in theearly morning or in the evening somethingthey perhaps could not do when all theemployees were working during normalbusiness hours in the central office.
10. DEALING WITH THE MANAGER'SRESISTANCE TO TELEWORK
It has been the author's experience thatmost resistance to telework is based onmyths and misinformation. The idea oftelework is, in some ways, very new andperhaps upsetting to many managers. Thetruth is that the basic concept of telework
allowing people to work away from thedirect supervision of tlie manager isnot really very new. Consider, for example,sales representatives who work away fromthe office, or even jobs like truck driversand repair technicians. In these cases,the manager does not supervise directly,by watching the work of the employee.This is the same with telework forknowledge-based jobs.
620
The most common source of resistance totelework is the manager who says, "Howcan I manage people if I can't see themhere in the office?" We must remind thismanager that just because we can seepeople, it does not mean we are managingthem effectively. We also ask this manager,"How do you manage your people when youcan see them in the office?" Thismanager will probably admit that he orshe manages them according to the resultsthat they produce and this is exactlyhow teleworkers are managed also.
Another reason why managers resist teleworkis because they are afraid that everyonewill want to do it. The truth is thateveryone does not want to do it. Manypeople like to come to the office, andmany people prefer the office (even withthe commuting problems) instead of working
at home or in a satellite office. Also,we remind the manager that he/she will beable to control who becomes a teleworl:er.Telework is not a benefit that everyonereceives. It is only a specific kind ofjob assignment. Like all job assignments,some people are qualified for it andothers are not. It is 'he manager's job- and his/her responsibility to selectonly the correct people for telework.
The last major reason why managers resisttelework is because they are afraidemployees working at home or in a satelliteoffice will not work very hard. Theywill be tempted by the television orother distractions at home, or they willspend all day socializing with co-workersin a satellite office. In teleworkexperiences around the world, this hasnot been a problem if the manager makesit clear that permission for teleworkingwill be taken away if job performancegoes down. Telework is a privilege, andas long as the employee shows that he/sheis worthy of this privilege (by maintaininggood work performance), then the privilegecan continue.
11. SUMMARY
Telework is primarily a managerialchallenge, not a technical one. Thepurpose of this paper is to respond tothe need for managerial guidance thatwill be useful for successful telework.The Pacific Rim region has a tremendousamount of computer and communicationstechnology available to support telework.This technology, together with appropriatemanagement methods, will cause teleworkto grow in the region.
The "office" as we know it willdisappear. Telework does not meaneveryone will be working at home injeans. Unfortunately, it does not
notthatbluemean
that all the commuter problems and trafficcongestion will disappear. Telework isonly a tool something that is one ofmany management methods to use in thebusiness of the 1990's and beyond. we nolonger need to have everyone come to onecentral location as we did at the time ofthe Industrial Revolution. The office isa good place to work, but it is no longerthe only place, or even the best place,for today's knowledge workers to work.
(1) For more details on telework conceptsas applied to the Pacific Rim, see thefollowing papers in prior PTC proceedings:
"Contrasting Roles of Public Policy inTelework Development in the United Statesand Japan," by Gil Gordon, William Eagle,and Norihiro Katada (PTC 1991)
Telework Troubles, Traumas, and Triumphs:Confessions from Telework Planners Aroundthe Pacific Rim," by Gil Gordon, WendySpinks, and Norihiro Katada (PTC 1992)
(2) Readers who would like more detailedinformation about training for teleworkersand their managers in work-at-home settings(or any other aspect of teleworking) areinvited to contact the author at GilGordon Associates, 10 Donner Court,Monmouth Junction, NJ 08852 USA. Phone(908) 329-2266 or fax (908) 329-2703.
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Global Teaming: Meeting the Challenge of Global Business withHelp from Telecommunications and Information Technology
and a Lot of Management Savvy!
Pamela J. JohnsonDigital's Corporate Organization Consulting Group
PK03-1/143, 129 Parker Street Maynard, Massachusetts 01754, USA
ABSTRACT
Today's business environment is more challenging than ever before. Time is of the essence. Many products require the as-similation of multiple technologies and a wide variety of specialized skills and knowledge . These are unlikely to be found iione location or even within one company, The challenge for managers is to create flexible, adaptable organizations that carrespond rapidly to shifting needs and take advantage of knowledge and skill wherever it is found: tocreate teams of teamsthat are multi-discipline, meltinational, possibly multi-company, and which are geographically dispersed.
Let me quickly introduce myself. I am a Management Con-sultant employed by Digital Equipment Corporation work-ing \Nith customers and also with internal groups. Much ofmy past experience is of line management, a lot of it man-aging large, international, product development groups.
I'd like to start by posing three questions about how life inyour company today compares with what it was 10 yearsago:
is the pace slower?
are the management problems easier to solve?
is the technology more simple and straightforward?
I'd be very surprised if anyone were able to answer thosequestions with a resounding "Yes!" In the computer in-dustry, we face tough global competition and we have tomake continuous dramatic improvements in product priceand performance to stay in business. This requires the useof many different technologies, each of which is changingever more quickly. The management problems we faceare multi-dimensional. To continue to be competitive inthis demanding environment, we have to react faster: tofill a customer's order in hours or days. not quote a deliv-ery date that is weeks or months ahead to develop newproducts in months, not years, and so on. From my workas a Management consultant, I see that our customers injust about every industry are under similar pressure.
How then, do you both speed up your corporate reactiontime and handle increased complexity? Not by demandingthat everyone work harder! You have to do things differ-ently. You have to re-design the process by which the workis done. Two of the fundamental changes we believe payoff are:
to move from serial to parallel processes, that is, towork concurrently on what previously had been han-dled in separate phases, and
to create cross-functional. cross-organizational teams.
In discussing these changes, I'm going to focus on productdevelopment, as that is what I am most familiar with, but itis only one of the processes we are re-designing thewhole supply chain is another.. In the old days. the engi-neers did the design and built a prototype and when theywere satisfied they started talking to people in Manufactur-ing about how to build it and got some Marketing people to
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think about who might buy it, and when they were justabout ready to put the product on the market they talked tothe Services people about maintaining it. A product builtin this serial fashion might not have been quite what cus-tomers wanted, was probably expensive and not very reli-able, but it still sold. After it had been on the market a yearor two and we had done some enhancements, we wereprobably close to having what customers really wanted.But that is not good enough today. To sell a product in to-day's competitive market, we have to get it right first time,with the features, the reliability and the price the customerknows they can command. This needs the combinedknowledge of many technologists, marketing, manufactur-ing, sales and service people. They have to work as ateam.
Getting people with such different perspectives to work to-gether is hard enough, but it is made immensely morecomplicated because it is highly unlikely that they are all inone place. They probably aren't even on the same conti-nent! To give you some specific examples:
For Digital to design and build just one piece of a com-plex computer system, namely the central processor orCPU module, takes cooperation between the semi-conductor design groups in Massachusetts and Israel.the manufacturing process design teams in Massachu-setts and Scotland and the people who assemble andtest modules in Ireland. To speed time to market theproduct and process designers work concurrently tosimulate the operation of the chips in the system, in-cluding bringing up the operating software before theyproduce even a single chip in silicon. Further, as they
design the chips, they build the test patterns that willlater be used for verification and they build test struc-tures into the chips to help with module testing.
The International Systems Engineering group ensure thatour software products are available in all the languagesour customers speak - like Chinese, French, Arabic andthese days, Russian. This group has people in II coun-tries, speaking 16 languages and spread across 8 timezones. They work with the product developers, whothemselves are spread around the world, and with themarketing groups in each country to identify what prod-ucts are required. In the past. a product would he de-signed and introduced in the USA. without regard to theneeds of the international community. so inevitably the
product had to be re-engineered before it could be intro-duced into Japan or Germany, say, and this could take acouple of years. As you might imagine, customers inthose countries were not happy about this delay, espe-cially if they were multinational corporations andwanted the same software to be available worldwide.The re-designed process allows a global team of engi-neers to work in parallel on the different language ver-sions and bring them to market at the same time. Cus-tomers are happy and Digital's product developmentcosts are much lower.
Why are these and other product development teamsglobal? Because the competencies we need to be successfulare spread around the globe. The technical experts, the re-search associates, the people with the market knowledge,the manufacturing capacity, and so on are not all to befound in one place.
Having recognized our dependency on cross-functionalglobal teams, we set out to study how to make them success-ful. Our first discovery was that we could not find anybooks on how to do it! Digital seems to be very much on theleading edge. So we reviewed our own experience for les-sons learned. I have time to mention only a few of them to-day.
Perhaps the most important lesson is that true commitmentto a common purpose by all project members is absolutelyessential - whether the project in question is a multi-year de-velopment project or a task lasting a few weeks. It cannotbe overstated. It is hard in the best of conditions to keep alarge, diverse team working productively. When they are indifferent places and from different cultures it is muchharder. Having a common vision, clear goals and objectivesis vital. We know that people are most committed to a vi-sion or purpose which they helped to shape. Achievingbroad scale participation in setting the vision, mission , ob-jectives and so on may he more difficult for a dispersed or-ganization, but it is vitally important. There is a lot of po-tential for rapid escalation of political infighting indistributed groups when they are not so aligned. Skimpingthe process of getting to agreement on purpose. or ignoringunderlying differences around objectives is very dangerous.The more task-focused, the more concrete the goals in termsof what is to be delivered, by whom and when, the easier tt
will be for a distributed group to sustain commitment to ashared purpose.
As consultants, we have been able to help aroups establish ashared vision and strategy using some efficient large-groupmeeting techniques. A common cause of failure in productdevelopment groups is being inwardly focused: being tootechnology driven and failing to test at an early stagewhether there will he a demand for what they arc makingand paying too little attention to what is important to theirpotential customers. We strongly encourage group., to in-clude in the vision/objective-setting stage representatiesfrom all the affected parties internal and external customers, related projects, people providing funds. people providing support services or doing sub-contract work everyonethey need to develop a sound strategy and to gain suppon lotit. Bringing people back together periodically to retresh
their commitment, to the goals and to working with eachother, is also essential for lengthy projects.
Another critical success factor is selecting the right kind ofleader, someone who is flexible and skilled enough to lead adispersed, cross-organizational team with people of manynationalities, from multiple functional disciplines, workingwith many technologies and over whom he or she will atbest have only shared authority. Team-building takes con-scious effort in the dispersed team where circumstancemakes it harder for that naturally to occur. A typical trap finthe leader is to try to be the sole integrator, and it takesmuch skill to build a self-sustaining dispersed team. Lead-ers also have to create an environment that allows culturaldifferences to be a benefit rather than a problem. Multi-cultural teams can be among the most creative, if the differ-ent perspectives and experience of the members can be har-nessed. But those very differences can make it hard for de-cisions to be made unless there is sensitivity to the diversityof assumptions across national cultures. Leaders also havea delicate balancing act to play between establishing a"group" style and adapting their management style to thenorms of each culture. We have a number of programs un-der way to help educate and develop our managers for thesekinds of assignments.
Suprisingly, we found that groups did not adequately takeinto account the problems of geographic separation whenthey decided who would do each piece of work. There isinherently less flexibility around reassigning work whenpeople are dispersed, and the consequences of makingchanges are more significant, perhaps requiring key peopleto relocate or leaving a site with insufficient work for itspeople It is advisable to think through before finalizing as-signments whether a proposed division of labor will makecoordination too difficult or expensive. In consulting we usea graphical mapping technique to help groups work throughsome alternatives and literally sec the consequences of vari-ous organizational choices.
Communication and information technology has an im-portant role to play in support of integration. "Meetings" cantake place without people being in the same place usingphone, video, or computer-augmented real-time conferenc-ing. Electronic mail, fax. bulletin boards and Notes-stylecomputer conferences let people "talk" to each other when indifferent cities, countries and radically different time-zones.Electronic dataLases. combined with sophisticated informa-tion agents for search and retrieval, support knowledge shar-ing across the organisation. Project management systems.electronic work-flow tools and virtual notebooks supportproject planning, coordination and administration. Tools thatsupport the communication, coordination and collaborationneeds of dispersed work teams are one of the primary growthareas in the computer softv, are industry as are the devicesthat allow one to be almost any place and still connect toone's office environment. Another important learning is thatintroducing such technology without redesigning the workprocesses. and without the full cooperation of the target us-ers. will probably tail. On the other hand, when those in-volved are able to participate in the design of how mfonnaflint will flow and in selecting the most useful tools. thewill readily embrace new ways of working.
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However, invaluable as such technology is, it is no substitutefor face to face meetings to work through difficult issues.The electronic tools can help the group to do its routine workwhile separated, saving the precious time they spend to-gether for more creative activities or for solving complexproblems. We strongly believe that people need to spendtime together at the beginning of the project to build trustand establish the relationships that will allow them laterto work together, while apart. The amount of time neededfor this can be dramatically reduced through carefully de-signed and facilitated events. We have also found that peo-ple do need to meet periodically or relationships deteriorate:distance breeds distrust and over-reliance on electronic com-munications can ferment it.
Managing dispersed groups is certainly challenging! onecan't get away with muddling through much more has tobe done very deliberately. But it can be exciting and fun, andmore important, the business payoff is there if it is done well.As management consultants, we are applying what we havelearned from our own experience to help our customers it-design their business processes and to build global teams toenhance their market competitiveness.
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BANDWIDTH ON DEMAND METERED SERVICE
PAUL A. STERNCOMSAT WORLD SYSTEMS
WASHINGTON, D.C.
Abstract
Introduction of bandwidth on demand (ROD) metered services via satellite can provide advantages to satellite usersand help spur the growth of private line communications. COMSAT World Systems (CWS) is planning to introducealow-rate TIAL4. network to provide such services in 1993 in the Atlantic Ocean Region and in 1994 in the Pacific OceanRegion. Participants in these networks will have the ability to provide private line voice, data and videoconferencingservices on a seamless, on-demand basis, and pay only for the space segment capacity used during actual transmission.
1.0 INTRODUCTION
Private line telecommunications customers are increasinglydemanding flexible, custom-tailored networks designed tomeet their unique requirements. These demands haveresulted in the growing popularity of software-drivennetworks which often combine facilities into a seamlessnetwork providing on-demand capacity and metered "pay-asyou-go" pricing. In order to bring the benefits of theseservices to international satellite users, COMSAT WorldSystems (CWS) is developing a Bandwidth on Demand(BOD) metered service offering which will allow flexiblepoint-to-point and point-to-multipoint communicationsaround the globe. This service will provide private-line usersof the INTELSAT system with the ability to obtain satellitecapacity on demand in increments of 64 kbps up to T-1 or E-1 circuits and pay only for the capacity used.
2.0 PROPOSED LOW-RATE TDMA ROD NETWORK
Currently, international satellite customers must acquire full-time private- line capacity and pay a flat rate regardless ofactual usage. While part time and occasional use services areoffered, generally they must be arranged in advance and arenot truly "bandwidth on demand" type service offerings.
CWS' proposed BOD service will provide customers withon-demand capacity and give them the ability to "pay as theygo" for communications space segment. The network willallow for dynamic reconfiguration of capacity so thatcustomers will be able to communicate with several differentoverseas locations without installing separate "chains" ofequipment for each telecommunications channel. Thus, forexample, a customer in Los Angeles will be able to haveprivate-line voice communications to Japan at 64 kbps,switch to data communications to Hong Kong at 256 kbpsand then conduct a videoconfercnce to Korea at T-1, all inrapid succession with instantaneous demand-assigned set-upfor each communications channel. antra- Pacific and Intra-American communications will also be supported.
The proposed network will be based upon low-rate TDMAtechnology being developed at COMSAT Laboratories.Transmission rates will range from one to eight Mbps on a
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burst by burst basis, giving large and small users the abilityto communicate with each other in the same network. Thisnetwork will operate with a decentralized hub, i.e. eachterminal will have identical capabilities, including thecapability to act as a reference terminal and to providenetwork management and billing support. The terminals willalso allow for frequency and transponder hopping so that thenetwork can be easily expanded.
3.0 IMPLEMENTATION SCHEDULE
Under CWS' current schedule for BOD serviceimplementation, laboratory testing of the TDMA BODterminal is slated for the second quarter of 1993. This will befollowed by a field demonstration between the U.S. and twoEuropean countries in mid-1993. Service will be introducedin the Atlantic Ocean region in the fourth quarter of 1993,and in the Pacific Ocean region in 1994.
4.0 ADVANTAGES OF ROD NETWORK
Bandwidth on Demand, usage-sensitive pricing will allowusers to determine for themselves whether they require full-time or on-demand services. Since users will pay for spacesegment only when "off-hook", their overall bill may beless. Also, many smaller users for whom a dedicated line istoo expensive, will now be able to obtain private-lineservices on a more affordable "pay-as-you-go" basis.
The proposed BOD network will also increase theoperational flexibility of the current IBS network bychanging it from a fundamentally point-to-point network to apoint-to-multipoint network. Unlike the current IBSnetwork, which requires separate "chains" of equipment foreach destination, users of the proposed ROD network will heable to communicate to any point within the network withoutneed for additional modems, multiplexers or other costlyequipment. CWS' analysis of earth station costs indicatesthat a low-rate TDMA user with as few as two destinationswill save on earth station costs compared with a user with atraditional IBS earth station configuration. Thus,participants in the BOD network will have cost-effective, on-demand access to other participants in the network, greatl>expanding their options.
This basic difference in architecture between the current lBS earth station configuration and the proposed low-rate TDMA configura-tion, is illustrated by the following block diagrams.
FIGURE 1
Typical IBS Networking
Customer PremisesA
VF
Data -
VFDataVideoConf.
T-1
Country X
Occ. IBS
ToTerrestrialInterface
T-1
FIGURE 2
Modem]
Gateway Earth Station
Proposed Bandwidth on DemandNetworking,cp
rCustomer PremisesA
Data
LIVFDataVideoConf.
T-1
L I
0 0E0.74 t0 c
..- 1
I Assigned I
I Network I
Management
Gateway Earth Station
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Country X
TDMATerminal
Secondary ToRef Station TerrestrialInterface
Country y
TDMATerminal
This architecture is designed to minimize equipment changesby either the end user or the gateway provider. In a gatewayconfiguration, as is shown above, the customer premiseequipment remains identical to that of current IBS equipmentso that no additional investment by the customer is required.In a "rooftop-to-rooftop" configuration, the customer would,of course, require a TDMA terminal and the necessary radiofrequency (RF) equipment. However, since the network willoperate at relatively low rates and include burst by bursttransmission and forward error correction (1±.C) ratechanges, the cost of the RF equipment can be minimized.Current cost projections for the equipment (excluding RFequipment) are approximately $150,000 for a fullyredundant gateway terminal and approximately $35,000 for anon-redundant "rooftop" model.
Another advantage of the proposed network is that it willprovide for a decentralized hub, with each terminal in thenetwork having capabilities identical to every other terminal.Thus, any terminal will be able to act as a reference terminal,and this function could be rotated among the networkparticipants. In addition, each terminal will have thecapability to maintain its own call records data, and thus willnot have to rely upon other terminals or telecommunicationsadministrations to generate bills to customers. This designwill avoid potential conflicts over hub location and beconsistent with the dekre of most administrations to retaincontrol over their own traffic and billing procedures.
While there will be a need for a network control center(NCC), its function will be largely administrative, ratherthan operational. For example, the NCC will retain overalldata on the network and provide input into the signatoryparticipants in order to reach administrative decisionsregarding loading and network expansion. The NCC will notgenerally be required for day-to-day operation of thenetwork.
5.0 SPACE SEGMENT
Under the proposed BOD network, Signatories will jointlylease full-time, non-preemptible space segment fromINTELSAT and provide such capacity to users on a per-minute or other time-sensitive basis. Space segment for theNorth Ane-trica-Pacific network will be acquired fromINTELSAT in the West - East/East - West directions withthe costs shared by participating signatories based uponusage or some other agreed formula. This trans-Pacificnetwork could also easily be expanded to include West/Westcapacity for intra Pacific communications and East/Fastcapacity for intra-North American communications.Because of the carrier-hopping capabilities of the TDMAterminals, capacity added in this manner would be integratedinto a single seamless "etwork of BOD users.
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The space segment acquired from INTELSAT in this mannerwill be dedicated by the network participants exclusively foruse in the BOD network. Users will have access to thiscapacity either on an on-demand or alternative basis,depending upon the customer's preference. The networkmanager and signatories involved in the network will jointlydetermine the amount of space segment required to insureminimal blocking of communications channels. Asexperience with the network grows, and administrationsbecome familiar with the patterns of use, the efficiency ofthe network will likely also grow.
6.0 PRICING
Tariffs for half circuits in the BOD network would beestablished by each signatory on an independent basis andthen combined to provide both halves of the satellite circuit.Thus, for example, a rate for 64 kbps BOD communicationsbetween the U.S. and Japan would be published; priceswould also be established for multiples of 64 kbps up to T-1and E-1 circuits. In addition, bulk discount, off-peak andother pricing incentives could be developed as the needarises.
Similarly, prices would be developed for calls between Japanand Singapore, the U.S. and Singapore and for each route in theBOD network. In this manner a schedule of tariffs would becreated and published which would allow all users in thenetwork to know in advance the space segment costs involvedin communications to the various points in the network.
7.0 CONCLUSION
The proposed bandwidth on demand, metered network willallow users to have instantaneous access to all other users inthe network and to pay only for the time during which spacesegment is utilized. For many current IBS users, who areleasing full-time IBS capacity but utilizing it only smallportion of the time, this service could provide significantsavings. In addition, many smaller companies, that cannotcurrently justify the cost of full-time space segment capacitywill now be able to enjoy the benefits of "pay-as-you-go"private line satellite communications.
8.0 CONTACT
For further information about COMS AT's bandwidth ondemand services, please contact:
Paul A. SternManager, Service Development950 L'Enfant Plaza S.W.Washington, D.C. 20024Tel: 202-863-6228Fax: 202-488-3814 or 3819
BROADBAND NODE CONTROL ARCHITECTUREFOR MULTIMEDIA SERVICES
Hisashi Manabe and Tatsuhiko YamazakiNEC Corporation
Tokyo, Japan
ABSTRACTATM-based broadband networks provide the capability transporting a wide range of multimedia services.This paper focuses, not on bandwidth, but on the number of calls loaded to the broadband network, anddiscusses how to optimize the call processing capacity for a wide range of varying load in the multimediaservices network.
1. INTRODUCTION
With the use of Asynchronous Transfer Mode (ATM)technology for the Broadband ISDN (BISDN)services, there is growing interest in multimediaservices taking advantage of this technology. TheATM technology offers the flexibility, that is, thetechnology allows one physical line to support anygiven number of channels at a wide range ofdifferent bandwidths of up to 150 Mbps. Thisadvantage of multiple channels at multiplebandwidths well meets the requirement ofmultimedia services.In terms of the switching technique to be used for theprocessing of multimedia services (connection-oriented) there is the complicated issue ofcalculating the number of calls for the facilitydesign. While the number of calls for each individualservice can be estimated roughly by past experience,predicting what services will be activatedsimultaneously is extremely difficult. Because thecombination of services will widely vary dependingon the user's purpose. Widely varying service usagemeans a great difference in the number of calls. Thisvarying factor is posing technological and economicdifficulty in the design of switching facilities formultimedia services.
This paper examines the problem of multimediaservices, focusing on the number of calls rather thanthe bandwidth. (The number of connections alsoneeds to be considered, but the number of callsherewith represents factors of issues on themultimedia services.) And its purpose is to present amethod of controlling the number of calls for themultimedia services while introducing possiblesolutions to the economic problem in terms ofmanagement of medium- and small-size networks.
2. BASIC ISSUES OF MULTIMEDIA SERVICES
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The application of BISDN technology for multimediaservices allows one physical line to deal withcommunication services from low speed to high speedinformation at a bandwidth of 150Mbps. As examples,low speed services may include text mail and tele-metry. As for high speed services, high resolutionimage database access, video program, video-telephony, video-conference, and high speed facsimile,etc. may be provided. Table 1 shows the maximumnumber of channels that can be handled by a 150Mbps line. The wide range of numbers is the basicpoint of the issue discussed in this paper.
In the case of H4 rate (135Mbps) high resolution videoprogram services, a 150-Mbps line supports only onechannel. [Fig.1(a)] When the duration of service is 30minutes, the maximum number of calls will be 2 C/H(call per hour). In the case of low-speed data services(e.g. text mail) which require a bandwidth of 9.6 kbps,the 150-Mbps line can support up to 14,000 channels.[Fig.1(b)] Given the per-call holding time of 20seconds, the maximum number of calls will be2,500,000 C/H. The problem here is that the numberof calls which can be handled varies depending on theservices. For example, designing a switching facilitybased on the requirement for the 114 rate highresolution video program service can result in thefailure of the entire plan to introduce multimediaservices because of the lack of capacity. On the otherhand, a switching facility designed for the text mailservice will have a capacity of 2,500,000 C/H. If thisfacility with such large capacity is used for handling acall load of 2C/H, it is very uneconomical, even takinginto account the reduction in the equipment cost inthe future. As explicit in these examples, the problemof the introduction of multimedia services lies in thefacility design and the calculation of the number ofcalls has a significant impact on the provision ofmultimedia services. A similar problem is found withthe 2B +D line of narrowband ISDN (NISDN), where
the combined traffic of voice and datacommunications must be calculated. However, sincethe bandwidth of BISDN is more than 1,000 timesgreater than that of NISDN, the traffic load canwidely vary, thus making it difficult to calculate thenumber of calls for BISDN services.
In reality, a 150 Mbps line at a user-networkinterface will never set up 14,000 channelssimultaneously, but extreme examples are used hereto stress the basic issues of multimedia services.
3. CALCULATION OF NUMBER-OF-CALLS FORMULTIMEDIA SERVICES
This section explains how to calculate the number ofcalls required for multimedia services. Let us assumethat there is a workstation connected to a localswitch. The workstation supports the bandwidth of150 Mbps (B) and is capable of providing themultimedia services of S types. The local switchaccommodates K subscriber lines, all of which areintended for use of multimedia services. Such localswitches as this one and toll switches interconnectingthem comprise a regional network (the number ofnodes in the region : R). Here, let us assume that theuser of the workstation uses the S type of serviceswithin the 150 Mbps bandwidth (B) by occupying Cchannels of bandwidth b for the duration of h,generating traffic load of e. Tables 2 and 3 showexamples of applying this assumption to individualbusiness users, along with the calculated number ofcalls during busy hour (BHC). In these examples, thedifference of the total number of calls is 27.5. Thepurpose of this paper is to present a method toachieve a cost-effective facility design consideringthis difference.
With multimedia services, it is difficult to determinethe BHC value per line with accuracy. This is becausemeasuring the BHC value for each individual serviceand calculating the sum of the value for eachindividual service and calculating the sum of thevalues (N) does not always equal the BHC value ofthe entire multimedia services. [Fig.2] The busyhour can differ for each individual service. Inaddition, the combination of services and the numberof channels, simultaneously occupied for one service,are difficult to predict. Therefore, the simple sum ofthe BHC values of individual services is usuallygreater than the BHC value per line.
In the future, it is expected that, by measuring theactual number of calls on the multimedia subscriberline, the accuracy for predicting the number of callsduring the busy hour, and the margin for peak loadcan be improved. However this paper does not aim to
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predict such numbers, so the numbers are notdiscussed in detail. In order to proceed with theanalysis, the following formulae are used herewith.When the number of calls for a service is Ni, the totalnumber of calls N(t) handled at the node for one hourfrom time t can be expressed as follows :
S C
N(t) = 2 E Nik j i
and
biCj B
Where C is the number of channels connectedsimultaneously for different calls,
S is the number of service types, andL is the number of lines accommodated in
the switch.
Next, the number of calls in the busy-hour period(NBHC) is chosen from the largest one of N(t)s :
NBIIC = [N(0),N(1), N(23) 1 max
Then, the total call processing capacity (NNW)required for the network with R nodes is obtained by :
NNW = IENBHC
4. SOLUTIONS
4.1 NODE HANDLING UP TO PEAK LOAD
The basic concept is to handle the busy hour calls byproviding each node with enough capacity forprocessing the multimedia services. However. thisapproach is uneconomical, for a large margin may berequired to insure the flexibility in the multimediaservices provision.
R S CNNW = 2. 2. 1Ni
N Blic calculation is omitted.
4.2 NUMBER-OF-CALLS RESTRICTION
In general, an economic solution is to apply anumber-of-calls restriction and to avoid excessfacilities. The call restriction is activated at a level ofa predetermined call processing upper-limit. Twopreliminary solutions are discussed, and a proposedsolution (4.2.3) is presented.
4.2.1 RESTRICTION ON SUBSCRIBER LINEBASIS
The call processing upper-limit is set on a per-subscriber-line basis to restrict the number of calls
flowing to the switching system. This eventuallylimits the flexibility in the multimedia servicesbecause the restriction is applied to some lines evenwhen the local switch is still capable of handlingmore calls. A possible improvement may be to relaxthe restriction by applying a high-rate-billing to theservices exceeding the upper-limit. With this high-rate-billing, however, one foreseer problem is that asubscriber may be charged at the expensive rate evenwhen they are not provided with sufficient qualityservices during the congestion period.
R L IS CNNW = 2 2 2 Ni UL
UL : Upper Limit
4.2.2 RESTRICTION ON PER-NODE BASIS(WITH CONGESTION RELIEF APPLIED)
The upper-limit is set on a per node basis to restrictthe number of calls flowing to the switching system.The restriction is applied based on the sum of callsper node. The switch initiates call-origination andcall-termination restrictions to relieve thecongestion.This allows more flexible use of subscriber lines forthe services, to the 4.2.1 solution.
R IL S CNNW =
4.2.3 RESTRICTION ON NODE-GROUP(NETWORK) BASIS
This method enhances the service flexibility byrestricting calls on a node-group basis, rather than ona per-node basis. Call processing, which isconventionally performed at each individual node, iscentralized to one control point called the RegionalControl Node (RCN). [Fig.3] The RCN performs callprocessing for all the nodes in the same node-group.
The RCN equips an extra capacity to be commonlyused by the nodes in the group. When traffic loadexceeds the capacity of a node because of the use ofmultimedia services, this extra capacity is used toassist that over-loaded node. Unlike the methoddescribed in 4.2.2. which per-node call restriction,this method provides network-wide call restriction.
R L S CNNW =Z Ni I UL
The purpose of this node-group restriction approachis to deal with the excess fluctuation in the load. Thiscentralized control approach may be seen as identicalto the host-remote control, as far as system configu-ration is concerned. But this approach is not intendedto centralize O&M functions fully to the RCN. On the
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other hand, this centralized approach has a strongaffinity with the Intelligent Network architecture inthe light of the services processing.
The following is the guideline to calculate the RCNcapacity.
PO= (Nr + Mr) = EP& + 2 Mr
wherePo is the required capacity for the regionalnetwork,Nr is the capacity to handle the busy hour callsat Node r, andMr is the margin for the excessive load ( or thecapacity for the excess fluctuation at Node r )
Po is the sum of the required capacity at individualnodes plus the sum of the margin for the excessiveload at individual nodes. The result is equivalent tothe physical transfer of the capacity and the marginfrom individual nodes to the RCN. Hence, the resulthere is equal to that of the 4.1 method.
The multimedia service requires a relatively highermargin ratio than the single media service. Reducingthe margin ratio can produce economic effects.
To reduce the margin ratio, the margin is centralizedto the RCN, considering the balance between theflexibility and the economy. The required capacity ofthe RCN can be calculated in the following formulae:
Pl = Nr Mr
R R
P2 = Nr -L a 2 Mr + ( 1-a ) IMr 'maxPi is the sum of required capacity for all the nodes inthe node group plus the average margin value for anode. The resulting capacity is centralized to theRCN.
4- mrnodes.
is the common capacity shared by all the
This means some nodes in the group may not satisfythe originally required level of margin at the peakload.P2 is the sum of required capacity for the nodes in thenode group, a times the margin value for all nodes,and ( 1 a ) times the largest margin value amongnodes. ( 0 14,- a < 1 ) The resulting capacity iscentralized to the RCN.When a = 0,
P2 = Nr IMr !max
P2 here means the sum of required capacity for thenodes plus IMArnax shared by all the nodes. Thismeans any node in the group satisfies the originallyrequired level of margin under exclusive use.When a=1,
P2 = PO
This means any node in the group can satisfy theoriginally required level of margin.
The costs for the above cases can be compared asfollows on the assumption that the cost is linearlyproportional to the capacity:
P1 < P2 < P2 < PO(a=0) (0<a<1)
For economical solution with maximum flexibility for
multimedia services, P2 is suggested for the RCN'scapacity .Then the a is determined by the number ofservice types available in the regional network.
5. CONCLUSION
The number of calls widely varies for multimediaservices because channels of different bandwidths areused for different services. This paper proposes thecontrol architecture centralizing call processingfunctions for several switching nodes in a regionalnetwork into a control point named a RegionalControl Node (RCN).
By the RCN, spare network capacity can be allocateddynamically to the node which needs excessive powertemporarily, thus ensuring both the flexibility andthe economic advantage of multimedia services.
Table.l Maximum number of calls per one physical 150 Mous
H4 rate video 135.0 Mb/s 1 ch 1800 sec 2 CM
High speed data 1.5 Mb/s 87 ch 10 sec 31000 CM
Voice 64.0 Kb/s 2100 ch 180 sec 42000 C/H
Low speed data 9.6 Kb/s 14000 ch 20 sec 2500000 CM
Trble.2 One 150 MbiVs subscriber line used for a single business user(who uses video services Usually)
b c h e BHC
H4 rate high resolution video service 135.0 Mb/s 1 ch 30 min 1.0 2.0 BHC
Videoconference 10.0 Mb.% 1 ch 90 min 1.0 0.7 BHC
Electronic newspaper 1.5 Mb/s 1 cr. 10 min 0.1 0.6 BHC
Telephone 64.0 Kb/s 1 ch 3 min 0.2 4 0 BHC
Document DB 64.0 WS 1 ch 10 min 0.01 0.1 BHC
Ca4 facsimile 64.0 Kb/s 1 ch 10 sec 0.01 3.6 BHC
Text mail 9.6 Kb/s 1 ch 10 sec 0.01 3.6 BHC
14.6 BHC
Table.3 One 150 Mbit/s subscriber line used for a single business user(who uses data services usually)
b c h e BHC
H4 rate high resolution video service 135.0 Mb/s I ch 30 min 0.1 0.2 BHC
Videoconterence 10.0 Mb/s 1 ch 90 min 0 1 0.1 BFI/'
Electronic newspaper 1.5 Mb/s 1 ch 10 min 0.1 0.6 BHC
Telephone 64.0 Kb/s 1 ch 3 min 0 2 4.0 BHC
Document DB 64 0 Kb/s 4 ch 10 min 0 5 12 0 BHC
G4 facsimile 64.0 Kb/s 1 ch 10 sec 0.02 7.2 BHC
Text mail 9 6 Kt:Us 1 ch 10 sec 0 05 18 0 BHC
42 1 BHC
631
150Mb/s135Mb/s
150Mb/s9.6Kb/s
1ch 14,000ch
2 calls/hour
SwitchController
(a)
Number of call
BHi
FIG. 1
2.5Mcalls/hour
(b)
0 noon
FIG. 2
Tandem Switch
23 Day Time
FIG. 3
632
ART AND TECHNOLOGY:BRIDGES TO A MULTICULTURAL SOCIETY
Joyce M. Gattas, DeanCollege of Professional Studies and Fine Arts
San Diego State University
John M. Eger, DirectorInternational Center for Communications
San Diego State UniversitySan Diego, CA, U.S.A.
The elimination of artificial cultural, social, and political barriers created by the cold war has addedmomentum to the technological forces that are rapidly uniting the world in a single global economy.However, the world's growing interdependence cannot guarantee peace or productivity where historicalseparatism and cultural ignorance persist. Fortunately, the same information revolution that is energizingworld economic integration can be directed toward promoting multicultural understanding. In this paperwe explore the use of art, our shared human language, in conjunction with interactive multimedia, virtualreality, and other new telecomputer technologies as a means to bridge disparate cultures, thereby creating atruly global society.
Long heralded by visionaries, the Information Agehas arrived at last. A revolution without geographic,political, or cultural boundaries, it has overtaken us withno end in sight. New communications and telecomputertechnologies are making it possible for us to manipulateand move vast quantities of information to learn, create,and interact in ways considered impossible only a fewyears ago. Teleconferencing and global computernetworks offer unprecedented possibilities for humaninteraction. Historic upheavals, too, are furtheringfreedom of communications. While countless details arestill being worked out, the globalization of markets --whether of goods or ideas -- is a reality.
Regrettably, the barriers dividing countries andpeoples are not entirely gone. Even where walls have beenphysically dismantled, ancient enmities and strife continueto threaten world peace. In spite of the fact that a globaleconomy already exists -- with shared scientific andtechnological ideas, a single electronics industry,communications relay satellites, and a growinginternational fiber optics network -- historical and culturaldistances continue to divide people and nations.
On the eve of the twenty-first century, the world isso inextricably interconnected that cultural and economicisolationism is unthinkable, even if it were desirab. Thefuture that can be built together, with respect andunderstanding for every contributing culture, is far richer,materially and spiritually, than any that can be envisionedalone. Global and individual wealth and well-beingdepend upon mutual respect and understanding.
Perhaps the most effective thing that can be done topromote multicultural understanding is to use the newtechnologies -- with their powerful capacity for shapingand delivering human interchange as virtual bridgesacross the vast distances separating cultures. However, ifthe information revolution is to fulfill its promise, thesebridges must carry information that truly enriches andenlightens humanity. While the new technologies are stillyoung and malleable, and their applications unlimited, it isessential that they be harnessed to a universal languagethrough which our most deeply held values, aspirations,and beliefs can be communicated. Taking intoconsideration the special attributes, temporary limitations,and enormous potentials of the information revolution, wepropose art as that language. Combining ancient andcontemporary arts with the new technologies will greatlyenhance multicultural learning and understanding.
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ART AS THE LANGUAGE OF MULTICULTURALLEARNING
There can be no more distilled expression of aculture than its works of art. In creating art, consciouslyor not, artists are attempting to communicate at a powerfulemotional level to those within their own culture. The bestwork transcends its cultural matrix and speaks directly toour common humanity. This is why art serves so superblyas a universal language -- as a means towardunderstanding the history, culture, and values of otherpeoples (1).
White there are countless disciplines which mightreasonably serve as a means to understanding culture, suchas history, sociology, mathematics, and science, only artlends itself to the full range of experiential capabilitiesoffered by the new technologies. Numerous seminalprojects explore art's natural capacity for communicationthrough visual, aural, and spatial means -- the very meansInformation Age technologies so powerfully enhance.Furthermore, there are philosophically compelling reasonswhy art is uniquely suited as the language of a newmulticultural learning.
Art has always been central to human society, ourown late twentieth-century American tendency to treat it asperipheral to the main concerns of life notwithstanding.From the day man began to dwell in caves and hunt largebeasts, drawing pictographs on cavern walls, art hasserved both as material evidence of our vision and as anessential means of transmitting our values from onegeneration to the next. Life is celebrated in song, film,narrative, dance, and myriad other art forms, from theimplements and ritual of the Japanese tea-ceremony to theexpressive form of Michelangelo's David to the line andcolor of an O'Keefe.
Historically, art has been a significant force for thepreservation of culture; yet it has also been a primary agentin the transformation and revitalization of civilizations.For example, the art of the Italian Renaissance did notmerely document the intellectual and cultural revolutionthen occurring; it fueled the changes in perception thatredefined humanity for European civilization well beyondthe bounds of the Italian peninsula and the fifteenthcentury. Art is no less appropriate to fuel the revolution athand. Mankind is redefined in terms of an expandedworld view.
COMBINING ART AND TECHNOLOGY: WHATSBEING DONE NOW
Interactive multimedia technologies offerremarkable possibilities for learning through art. A reviewof current projects clearly demonstrates that art linked withand enhanced by telecomputer technologies has thepotential to serve as a primary vehicle for increasingmulticultural understanding. In these projects the verynature of learning is being expanded and democratized.Beyond them, the new virtual reality (VR) technologyoffers visions of art encounters that were previouslyunimaginable: virtual walks around the precincts of anancient temple-city; dances with partners in other time-zones; entirely new meanings for theater-in-the-round.While skeptics may believe we are years away fromrealizing such possibilities, American researchers arecurrently touring virtual architecture (2), and Japanesedepartment store customers are renovating their kitchens incyberspace (3). For all the new technologies, advances arebeing made at an astonishing pace.
A National Gallery in Every School:Interactive Video
Museums, universities, businesses, foundations,artists, and others are engaged in ongoing research intocomputer-aided art exploration and its positive implicationsfor society. Already, efforts such as the NationalGallery's American art videodisk project offer the publicsignificant learning opportunities beyond those available amere two or three years ago. The museum has digitized alibrary of 10,000 images from its American art collectiononto a single high-resolution videodisk, making itsholdings widely accessible to students not only of art, butof American history and culture. (The museum isdistributing 2,500 disks to American schools free ofcharge.) The superior image quality and durability of themedium are obvious advantages over other methods ofpresentation and preservation (such as traditional slidelibraries or videotape). What's more, the student canaccess images quickly in any desired order, requestenlarged details, and retrieve and study information at hisor her own pace (4).
Although definitive research has yet to be doneregarding the effect of interactive technologies on learning,it is arguable that the capacity for interaction is thisproject's most important benefit. Ample experientialevidence supports the concept that interactivity improvesthe learning process. Active as opposed to passivetechniques of participation and exploration produce ahigher level of involvement on the part of the learner andtherefore a greater depth of emotional, as well asintellectual, understanding (5).
The National Gallery is not alone in exploring thepossibilities of interactive videodisk; among others,institutions as venerable and diverse as the Louvre, theLondon National Gallery, and the Art Institute of Chicagohave produced (or are now producing) not onlyvideodisks, but more complex multimedia systems thatallow their users to explore interactively such things as anartist's complete oeuvre, biography, techniques andmaterials; as well as historical maps and textualinformation about the period during which the artistworked (6). The Tama Techno-Art Museum, currentlydevoted to high-definition, interactive exploration of thepaintings of Vincent Van Gogh, opened in November,1990, near Tokyo. Its designers plan to extend interactive
capabilities to the works of other artists as well (7).
Exploring Ancient China, the M.yan Empire. and More:Interactive Multimedia
Numerous interactive multimedia systems arealready up and running, among them the remarkableEmperor Qin project, produced under the direction ofChing-chih Chen of Simmons College School of Libraryand Information Sciences, and currently in use at theUniversity of Tennessee at Knoxville. Much excitementwas generated by the discovery in 1973 of nearly life-sizeterracotta warrior figures in a field outside the ancientcapital of Xian, China. This project allows a multifacetedexploration of the archaeological excavation of that find,and of the lifetime of the first Chinese emperor, Qin ShiHuang Di. Emperor Qin's vast third century B.C. burialsite was found to contain an army of over 2000 of thewarrior figures -- each with individual features of face andcostume -- as well as other artifacts and works of art.Combining still and full-motion video, audio, and text inEnglish and Chinese, two impeccably researched double-sided videodisks (already being converted to alternativeformats) con ain hundreds of thousands of still and motionimages of the excavation process and its artifacts.Included are oral interviews with Qin scholars whoelucidate the significance of the find, as well as extensivetext from previously unavailable Chinese sources andAmerican publications treating the subject. An index (inEnglish and Chinese) points the way to use at varyinglevels of knowledge, so that scholarly researchers, high-school students, and the interested general public all maybenefit optimally from the videodisks. The individual usercan browse as desired or rapidly access informationanywhere in the program; peruse such information for anylength of time; and rotate, zoom in on, and otherwisemanipulate images and text (8).
Palenque, a program produced by the Center forChildren and Technology at Bank Street College ofEducation in New York City, allows children to learnabout Mayan art and culture through ma riy of the samekinds of multimedia interaction. The progr.im, for which achild narrator acts as a guide (at the main menu-level) tothe Mayan city of Palenque, is built explicitly upon thethesis that an understanding of an entire culture can beachieved through initial exploration of its art (9).
A Poem. a Painting, and a Symphony:The Individual Masterwork as a Gateway to the World
Contrasting with information projects like EmperorQin and Palenque, which begin with relatively broadsubject matter (an archaeological dig; a Mayan city-plan),are projects designed to radiate outward from a singlework of art. For IBM Educational Systems, Morgr.nNewman and Allen De Bevoise have produced aprototypical interactive multimedia system designed arounda single poem, Alfred Lord Tenn"son's "Ulysses" (10).At a conference convened by the San DiegoCommunications Council in October 1990, Mr. JamesDezell, IBM Vice President and General Manager,Educational Systems demonstrated this project. Designedprimarily with high-school students in mind, the Ulyssesproject allows an individual to read, listen to, or see any ofseveral different actors' dramatic readings of the poem --making it possible, among many other things, to note andcompare interpretations. The student can requestdefinitions of words and explanations of unfamiliar
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phrases and literary allusions; access historical backgroundinformation on the Trojan War and the poem's namesake;observe as one of several literary critics discusses thepoem's significance, or ask to witness dialogues betweengiven critics. The student can also select collateralinformation on various poetic forms, Greek mythology,nineteenth-century English literature, Tennyson's life andliterary oeuvre, and the social and cultural environment ofVictorian Britain. The project incorporates text, tapedinterviews, music, still images of art from the Homericperiod, dramatic film footage, and clips from televisionnews and other contemporary documentary sources.Information is layered, via icons and hypertext (indexedwords), in such a way that students can pursue to varyingdepths issues and matters of individual interest, andbypass information considered irrelevant or tangential to agiven purpose (11).
La Guernica, produced by Robert Abel and hispartners, is another interactive multimedia project with asingle art work at its core. An image of the Picassopainting inspired by the infamous bombing attack on thetown of Guernica during the Spanish Civil War serves asthe base of a program allowing exploration from artformal, art historical, biographical, political, and largerhistorical perspectives. The student can ask to hearPicasso or any one of several critics discuss the painting;access text regarding its formal qualities or its place inPicasso's career, listen to eyewitness accounts of the actualattack on Guernica; and ask for additional informationregarding the event's historical context and political impact(12). Ultimately, this project and others like it allowstudents to synthesize related information and build aunified vision of a particular passage in human history farmore quickly than they might have done via traditionalstudy of isolated disciplines.
Music projects built around single works includeVoyager Company's compact disks allowing explorationof Beethoven's Ninth Symphony and Stravinsky's Rite ofSpring. These works can be accessed at various skilllevels via musical, historical, cultural, or politicalinformation pathways. Of special benefit to the student ofmusic is the capability to retrieve and read textualinformation regarding a specific musical passage whilesynchronously listening to it (13).
Among other capabilities, users of the Beethovendisk can search for individual themes, request a display ofBeethoven's original score, and refer to textualcommentary by Robert Winter, a musician and Beethovenscholar at the University of California at Los Angeles (14).It is also possible to leap from a glossary containingmusical concepts such as "dotted rhythm," to a textualdefinition of the concept, to an aural example of "dottedrhythm" within the symphony. According to ProfessorJack Logan, whose music students at San Diego StateUniversity use the interactive multimedia Ninth Symphonydisk, it encourages students to "go beyond passivelistening and become involved in discoverir,g why thesymphony unfolds as it does (15)."
Using Multimedia to Promote Multi, ,,ral Understanding:The Ojibwe Curriculum Cr, ,roads Project
There are also new projects incorporating use ofinteractive multimedia technologies in larger learningcontexts. One of these, the Ojibwe CurriculumCrossroads Project, is being developed by Corinne Nasonand Yvonne M. Wilson for exploration of Ojibwe cultureby native and non-native American students. An
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interactive multimedia component on Ojibwe art andculture is used in conjunction with an oral history projectinvolving Ojibwe elders and etas :mom visits from Ojibwestorytellers and artists. The project addresses issues ofcultural pride and self-esteem, and encourages students incooperative problem-solving, learning through experience,writing, and active participation in the creation of newaspects of the program. Increased multiculturalunderstanding is an explicit goal of the project (16).
Bringing the Learner into the Creative Process:IsiewBook/Warsaw 1939
While not technically involving multimedia, aprogram of interest because of its high degree ofinteractivity is New Book Editor, developed at theUniversity of San Diego (USD). New Book allows itsusers to read electronic "books" designed with multiplebranching plots, and at the same time create a record ofthoughts and decisions regarding the path taken throughthe book. A teacher can be present electronically tocontribute discourse or to comment "in the margins" of thestudent's investigation. The program operates in real time,so that student and teacher immediately affect each other'swriting. The reader can try out various interpretations ofthe material from various points of view, and receiveimmediate critical guidance (17).
The first experimental "book" created for (andwith) New Book Editor is a history/ethics/creative analysisproject called Warsaw 1939, dealing with events in Polandprior to World War II. According to the project'sdevelopers, "It is interactive to the point that it will notfunction unless the student reads and thinks" (18).NewBookiWarsaw 1939 is designed for use at threelevels. The first level offers historical backgroundinformation incorporating hypertext which allows thestudent to select and pursue at will information ofparticular individual irterest. Level two assumes thereader is inside the Warsaw ghetto in 1939; he or she isasked to make decisions (via hypertext) that determinewhat happens next. While other projects currently offerboth the hypertext and role-playing scenario capabilities ofWarsaw 1939, level three distinguishes thi2 project byallowing users to reread a compilation of the textual pathsand ethical decisions taken thus fat; comment upon it;select passages from it; and incorporate these passages asdesired in their own analytical essays. Furthermore,students can link their writing to the existing text, andthereby create composite or "new books" (19)
Expand'ng Cinema An:Creating Interactive Multimedia in i_t_ts_ClassaKm
Beyond providing the opportunity to select,pursue, and absorb information at an individual's ownpace -- even beyond enhancing the learner's mentalengagement -- interactivity's ultimate value may lie in itsencouragement of creativity. A project of a type entirelydifferent from those just discussed, and having a longdevelopmental history in an educational setting, is theRowland Animation program. Originated fifteen years agoby Dave Master, an art teacher in the Rowland UnifiedSchool District of Los Angeles, the program began with astudent production of a 20-second animated film, madewith little more than a Super-8 camera. Now the much-lauded program has evolved so that students can combineoriginal drawings and clay figures with computer graphics,still and full-motion video, and natural and synthesized
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audio (20). Although Rowland films have won manyawards, the benefits to the students producing them maybe even more impressive than the films themselves.Among these benefits are improved critical-thinking skills,increased self-esteem, and assurance in learning and usingnew technologies as creative tools (21).
Most recently acquired technological tools includeMacintosh-based video-editing and production systems(gifts from Digital F/X and Apple Computer) and anetwork of PS/2 computers awarded by IBM. Accordingto Master, the video-editing systems will be used inconjunction with computers and VCRs for frame-accurateediting, graphics importation, and titling; and the PS/2swill be used in producing interactive multimedia projectslike the Ulysses project previously discussed (22). In thiscase the new technology is making it possible for its usersto create end products incorporating and exploiting thevery technology used in production. This is aphenomenon of the Information Age, and a primarymechanism of its acceleration.
Stepping into the Video Display:Current Virtual Reality Projects
Few in communications-related fields will not haveheard virtual reality described. Using a computer withpowerful graphics and sound generation capabilities,position and motion sensors, a mask that shuts outeverything but stereoscopic images from two graphicsdisplays, and a glove or full body suit that allows sensoryfeedback, it is possible to experience the sensation ofentering a three-dimensional space or "virtual reality" inwhich one can move around, "feel" and manipulateobjects, and interact with others who have "entered" thespace. Research and development efforts for the newvirtual reality (VR) technology are already producingmedical, military, aeronautic/space, architectural, design,and fine art applications (23).
In his book, Virtual Reality, Howard Rheingolddescribes a walk he took through a virtual version ofSitterson Hall at the University of North Carolina inChapel Hill, where VR research has proceeded since thelate 1960s. The actual building, now being used as the siteof further VR research, incorporates changes made to thearchitectural plans as the result of earlier virtual walk-throughs by architects and prospective occupants (24). Itis only a matter of time before experimental applicationslike this one become purchasable products. According toRhcingold, "With the 1989 entry into the VR industry of(California software companies) Autodesk and VPL . .
the notion of architectural walk-throughs left the realm ofresearch and entered the world of commercialdevelopment" (25).
Together, Japanese and American companies arealso exploring VR's capabilities for virtual interiordesign/decoration. In mid-1990, VPL and MatsushitaElectric Works began exploring a joint venture to allowJapanese department store customers to use a VR systemto select kitchen appliances (26). A year ago the systembecame available to customers in one Tokyo showroom;within the first six months it proved so nopular andeffective in selling new appliances that Matsushita madethe decision to expand to cne hundred showrooms withinfive to ten years.
In a virtual kitchen whose dimensions and decorarc identical to his kitchen at home, a customer can seehow various appliances sold in the store would look and
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fit. He can even open appliance doors to check for properclearance. VPL is continuing to work with the Japanesefirm on enhancements to the system, which will includegiving the customer the ability to quickly repositionappliances; change color schemes, surface textures, andlighting effects; and "try out" insulation against unwantedenvironmental noise (27).
Creating Virtual Works of Art:The Banff Centre for the Arts
Research into fine arts applications for VRtechnology is also under way. The Banff Centre for theArts in Alberta, Canada, is hosting an ongoing "Art andVirtual Environments" project, with a goal of providingartists not only with state-of-the-art VR tools, but ofmoving "beyond the constraints of goggles and gloves toinclude pertinent developments in telepresence, audiovirtuality, collaboration at a distance and interactivemultimedia" (28).
Via this project, several artists have alreadycompleted virtual reality works. Lawrence Paul, a nativeCanadian of the Salish tribe, created a VR environmentcalled "Inherent Rights, Vision Rights," that has sincebeen exhibited at the National Gallery of Canada inOttawa. The viewer/virtual reality explorer enters a virtualspirit lodge inhabited by figures derived from the artist'spaintings. These figures take on various behaviorsdependent on the action of the VR explorer, and togetherall "participants" move about in a complex, three-dimensional soundscape (29).
The Banff Centre has also begun working on thetechnical problems involved in transferring multimediainformation, with the ultimate goal of allowing interactionon the same project by artists in widely separated locations(30).
THE NEXT STEP:MAKING THE NEW TECHNOLOGIES MORE
POWERFUL AND ACCESSIBLE
Technology is already being used to enhance artlearning and teaching in a multicultural framework. Thelogical next step is to make systems based on thistechnology more capable and accessible to peopleeverywhere. These enhanced systems will assist inunderstanding not just a single art tradition and the culturein which it arose, but a multiplicity of traditions andcultures and the relationships between them. Thisinteractive multimedia, multicultural education willultimately allow human beings to redefine themselves andtheir place in a global society.
It is of utmost importance that the new generationof systems be readily accessible and affordable for peoplein many countries and diverse learning environments:otherwise, it will benefit only a narrow elite. What can bedone to ensure that the next generation of systems willmeet these goals? The following five broad areas ofactivity illustrates the task at hand:
Expanding the Information Space
More areas of knowledge can he integrated into thesoftware information space. Currently existing projectsdemonstrate the concept of using art as a starting point forthe investigation of a single culture. The Qin project, for
example, allows the individual using it to begin with astudy of the Qin warrior figures and other artifacts, andfrom them explore outward to an understanding of theculture of the Qin dynasty limited only by the amount ofinformation in the database -- which, given thethoroughness of the project, may not be much less than thetotal information available anywhere on the subject at thepresent time. However, when the culture to be explored isone for which more information exists (for instance, thelong and productive Tang dynasty of China), newchallenges are created by the radically increased size of thedatabase and the correspondingly increased complexity ofthe information links within that database. The size of thedatabase increases even more dramatically wheninformation about multiple cultures is linked.
The challenge is to fashion an information base thatallows the highly idiosyncratic and creative linkages madein the human mind, so that its users can follow curiositywherever it leads. For example, a student might beginexploring imperial architecture of the Qin era, follow linksto Mayan architecture in Palenque, and from there progressto a study of other indigenous North American cultures,including the Ojibwe. Alternatively, the student mightbegin with an Ojibwe carving, proceed to Mayansculpture, and from there to the terracotta warrior figuresof Xian. Finally, the student might compare the art andculture of the Qin dynasty with later Chinese dynasties,such as the Tang, and possibly even "browse" forward intime to Chairman Mao's Peoples' Republic and the presentday.
Fortunately, new high-capacity storage devicesmake large databases feasible. However, because of thenumber of independent researchers and their locations atvarious international sites, the database envisioned will beboth physically distributed and stored in a variety offormats. "Information highways" -- the high-bandwidth,optical fiber data channels needed to tie this distributedinformation base together into an integrated network -- arenow beginning to be put in place (31).
To recapitulate, the hardware to support very large,distributed, multimedia databases is already available or inthe final stages of development. The software required tosupport these databases still needs to be developed.Currently much work is being done on organizing andaccessing very large, distributed databases. However, todate, the vast majority of this work focuses exclusively ontextual and nume-ic data. The work being done on verylarge, distributed databases needs to be extended andlinked to the work being done on multimedia databases, inorder to develop data storage techniques, rapid retrievalstrategies and algorithms, and standardized interfaceprotocols, so that information from distributed,independently developed multimedia databases can beaccessed and merged in a seamless fashion.
Expanding Opportunities for Multimedia Creativity
The active and creative aspects of the interactivelearning experience can be enhanced. Most of the projectsreviewed here support the research component of thelearning experience; using one of these is analogous todoing research in a large library with a well-designed cardcatalog. The student's transition from doing research,through performing analysis, to creating a reflective orbold new work, is not supported.
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While the Rowland Animation project is distinctfrom the others discussed, in that it does support creativeproduction, the initial research/gathering of materials forstudent productions is done through traditional methodsrather than through interactive multimedia systems.(Although the students are producing multimedia and eveninteractive multimedia products, they are learning the waypeople have always learned.)
To a degree, the USD NewBook project doesaddress the integration of interactive informationacquisition with the creation of an intellectual/creativeproduct by the learner. However, this end product isessentially a traditional essay; it contains neither nontextualelements nor hypertext links.
The full benefit of interactive multimedia learningwill only be realized when it is possible for users, in theirown analytical or creative products, to reflect theintellectual and sensory richness of the learningexperience. That is, interactive multimedia "term papers"and creative products are the natural (and necessary)corollary to interactive multimedia "textbooks."
To write multimedia "term papers" multimedia"word processors" are needed. Essentially, these areauthoring systems for interactive multimedia documentswhich will allow nonprogrammers to create and edit thesedocuments as easily as text is now manipulated with wordprocessors. In fact, the large-scale creation of interactivemultimedia textbooks in itself requires such authoringsystems.
Work on this problem is currently being done invarious locations. One such project is the MAEstroMultimedia Authoring Environment under development atStanford University. MAEstro is designed to facilitate theaddition of new media and/or new media formats to theauthoring system. However, it is limited in that it isdesigned for linear presentations requiring no interactionon the viewer's part (32). For the new generation ofsystems, projects like MAEstro can be extended to providesupport for the full range of interactive multimediacapabilities.
Enhancing Interpersonal Interaction in MultimediaEnvironments
Interpersonal interaction can be enhanced andintegrated with the interactive multimedia learningenvironment. There are two major approaches toachieving the interpersonal interaction envisioned. One isdirect realtime interaction, conceptually an extension of thecurrent teleconferencing technology; the other isnonrealtime interaction, L.onceptually an extension of thecurrent computer networks with their personal E-mail andspecial interest group capabilities.
In the long run, direct realtime interaction offersgreat promise for enhancing the learning experience andallowing it to be shared between people of variouscultures. The nonverbal aspects of this interaction would.for example, allow a saxophonist in Osaka to sit in on ajam session in San Francisco without the musicians havingto know each other's languages. However, mostintellectual and much artistic communication will requirethe use of language. Given the linguistic diversity of theworld's citizens, it is unreasonable to expect that allparticipants will understand any single common language.
Machine translation of natural languages has proved to be adifficult problem, but one which is beginning to yield tofaster computer hardware and advanced software designtechniques. The NEC corporation, for example, hasdeveloped a prototype two-way interpretation systemwhich directly translates between spoken English andJapanese. The company plans to expand the system toinclude Thai, Chinese, French, and Korean (33).
While in some ways more constrained than realtimeinteraction, nonrealtime interaction will, in the near future,probably play a more significant role in enhancinginterpersonal communication and collaboration.Nonrealtime interaction presents fewer technologicalchallenges than does full realtime teleconferencing, andalso has certain intrinsic advantages. It allows participantsin the information exchange to review messages from otherparticipants and to formulate their own messages at a paceand time convenient to them. When participantscommunicate across many time zones -- as they do, forinstance, in the Pacific-Rim area time differences of halfa day make normal realtime communications (such asphone calls) difficult to arrange. Finding a mutuallyconvenient time for communication becomes moreawkward when several people from scattered time zonesare involved; cost and logistical difficulties aside,teleconferencing is so hard to arrange simply because oftime differences that it cannot be used for routinemultiparticipant interaction.
The form of nonrealtime interaction proposed hereis a radical extension of current E-mail systems. Themessages will in fact be interactive multimedia documents,rather than simple text documents, as is the case withcurrent E-mail. For example, using the new system, amusicologist in Lima might incorporate passages ofPeruvian flute music in an E-mail communication with acolleague in Jakarta or Sydney.
The previously described user-friendly multimediaauthoring capability will be an integral component ofmultimedia E-mail. We envision some form of machinetranslation capability as another component allowing thenew E-mail systems to effectively link participants frommultiple cultures. Fortunately, due to the elimination ofthe voice recognition challenge and the relaxation of timingconstraints, the nonrealtime translation of written languageis much less difficult than realtime (instantaneous) speechtranslation. Even before solving the problem of automatictranslation, work can begin on the data communicationprotocols required for exchanging interactive multimediadocuments via E-mail.
Zooming into the Virtual_Future
Research on virtual reality and attempts to integratel'R with other multimedia learning techniques can beexpanded and accelerated. The enhancements suggestedthus far involve using pieces of available technology innew combinations, possibly adding layers of complexity inthe development process. But they arc enhancements thatcan be done in the near future, with widely available,relatively inexpensive equipment.
VR requires a significant amount of special-purpose hardware, and will therefore be less available thanthe other new technologies discussed. On the other hand,VR is beginning to leave the laboratory and enter themarket place. and -- if the history of other compute'- relatedproducts is any guide -- once sales reach a certain criticalvolume, economies of scale will lead to a rapid decrease in
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the cost of VR systems. When that happens, virtual realitywill offer the promise of even more dramatic changes inthe ways we learn and create. Tom Furness, director ofthe Human Interface Technology Laboratory (HITL) at theUniversity of Washington, believes the impact oneducation/experiential learning could be enormous (34).
With regard to implications for original art, an artistmay ultimately be able to create an entire virtual world forothers to explore -- a world that not only looks and feelsand sounds the artist would have it, but that has its ownhistory and laws of physics; is described by its ownmathematics; and in which certain sociological and politicalbehaviors are appropriate. Perhaps automatic machinetranslation of human languages will be possible in thisworld, so that people from various backgrounds may eveninteract verbally.
While VR applications represent a slightly moredistant future than the other new technologies, it is worthnoting that development of an experimental national virtualtelecommunication network is in progress, with theultimate goal of creating a high-bandwidth international VRtelecommunication channel (35). The important point isthat, when and as they are developed, VR capabilitieslike technologies deemed more feasible for the near term --can also enhance learning, creating, and human/culturalinteraction.
Increasing Accessibility and Reducing Cost
A global high-bandwidth communications networkand standardized, moderately priced multimediaworkstations can be developed. Although high-capacityinformation highways are beginning to be put in place,connecting cities and countries around the world, in orderto support the broad-based interactive multimedia learningenvisioned, these information highways must serve theentire global village. A critical goal is to expand theexisting network so that information available at remotesites can be transmitted to locations with no on-sitedatabase capability, such as small schools and officesand ultimately, private I omes (36).
Another important goal is the development of thestandardized, low-cost, multimedia workstation/personalcomputer also required to make interactive multimedialearning widely accessible. The computer industry isalready beginning to address this challenge. For example.companies including Analog Devices and IBM/TexasInstruments/Intermetrics (the last-named three workingjointly) are in the process of developing digital signalprocessor (DSP) chips together with standardized interfacesoftware for inclusion in the next generation of personalcomputers. These integrated DSPs will greatly increasethe capacity of personal computers to process realtimevideo images (37). A
Barring unforeseen technical difficulties or changesin the economic climate, workstations capable ofsupporting an interactive multimedia learning environmentwill be available in a timely fashion.
The End Result:A Revolution in Learning
The cumulative effect of enhancing the capabilitiesof interactive multimedia and other new technologysystems in the ways described, will make possible a
revolutionary reformation of education as we know it, interms of form, content, and accessibility. The widespreadavailability and self-directed nature of interactivemultimedia learning will make it useful beyond thetraditional school setting. It will be especially valuable forthe independent, lifelong learning crucial to inhabitants of afast-changing world.
The vision is of people everywhere activelypursuing their own interests through the intellectual andsensory richness of the art-centered global multimediainformation base. Foreseen is the universal ability ofchildren and adults alike to interact and collaborate withfellow explorers in the multimedia environment, and tocreate and exchange original multimedia products. Ashuman beings build and cross virtual bridges intounknown cultural territory -- and there learn, sharedreams, and creatively work together -- mankind willknow itself as citizens of a rich and truly global society.
MAKING IT HAPPEN
If citizens of a global society are to live in peace,not only goods, services, and technical information mustbe exchanged, but values and visions, as well. Why doAmericans feel uncomfortable unless they're calling eachother by their first names? Why do Japanese find itunacceptably rude to say no? Why, in both these cultures,are family farmers esteemed beyond the limits of apparentreason? Such questions exist for every culture on Earth,and no matter how seemingly inconsequential or foolish,begin to penetrate to the heart of cultural identity. Whenwe can answer a thousand questions about each other, thedreams binding us together will begin to be stronger thanthe history dividing us.
NOTES
1. Harold M. Williams, "The Language of Civilization:the Vital Role of the Arts in Education" (transcriptof remarks presented to the President's Committeeon the Arts and the Humanities of the J. Paul GettyTrust, New York City, October 3, 1991), passim.
2. Howard Rheingold, Virtual Reality (New York,1991), pp. 29-30.
3. Ken Yamada, "Almost Like Being There," Wall StreetJournal, April 6, 1992, p. R10. See alsoRheingold, pp. 170-171, for a description of thisjoint Matsushita/VPL project when it was still inthe planning stage.
4. Vicki Goldberg, "On a Pizza-Size Disk, the History ofAmerican Art," New York Times, March 1, 1992,pp. H35-36.
5. Isabelle Bruder, "Multimedia: How it Changes theWay We Teach and Learn," Electronic Learning,"September 1991, pp. 22-26, passim.
6. Goldberg, p. 36.
7. Techno-Art Museum (pamphlet published by NewMedia, Inc.), February 1, 1990.
8. Beverly T. Watkins, "Videodisks Offer a DetailedPortrait of Qin, the first Chinese Emperor,"Chronicle of Higher Education, February 5, 1992,pp. A20-A23.
639
9. "Panel Presentations: Multimedia and Arts Education:Palenque and the Museum Education ConsortiumDisc" (Kathleen S. Wilson, presenter), in FutureTense: Arts Education Technology ConferenceSummary, (Getty Center for Education in the Arts,1991), pp. 10-11.
10. "Interactive Hypermedia and the New EmpowermentTools" (Allen De Bevoise and Morgan Newman,speakers), in Future Tense: Arts EducationTechnology Conference Summary (Getty Centerfor Education in the Arts, 1991), pp. 8-9.
11. James E. Dezell, "The Fusion of Education &Technology" in The Uncertain Future: NewDirections for Communications Technology &Public Policy (San Diego CommunicationsCouncil, 1990 conference proceedings), pp. 3-8.
12. "Interactive Hypermedia and the New EmpowermentTools" (Robert Abel, speaker), in Future Tense:Arts Education Technology Conference Summary(Getty Center for Education in the Arts, 1991), p.8.
13. "Interactive Hypermedia and the New EmpowermentTools" (Robert Winter, speaker), in Future Tense:Arts Education Technology Conference Summary(Getty Center for Education in the Arts, 1991), p.8
14. Keith Schneider, "Theaters of High Tech/Washington:Interactive Multimedia for the 2000's," New YorkTimes, January 12, 1992, Sec. 5, pp. 14, 23.
15. Dr. Jack D. Logan, Interview regarding use ofinteractive multimedia in music education, SanDiego State University, November 17, 1992.
16. "Multicultural Education" (Corinne Nason andYvonne M. Wilson, speakers), in Future Tense:Arts Education Technology Conference Summary(Getty Center for Education in the Arts, 1991), p.19
17. D:. Barton D. Thurber,'Dr. Gary Macy, and Dr. JackPope, "The Book, the Computer and theHumanities," Technological Horizons in Education(T.H.E.) Journal, August 1991, pp. 57-61.
18. Thurber et al., p. 60.
19. Thurber et al., pp. 59-60.
20. Ted M. Kahn and Dave Master, "Multimedia Literacyat Rowland: 'A Good Story, Well Told',"Technological Horizons in Education (T.H.E.)Journal, February 1992, pp. 77-83.
21. Kahn and Master, pp. 79-80.
22. Kahn and Master, p. 82.
23. Ryuji Katayama, "Virtual Dynamite," BusinessTokyo, February 1991, p. 24. See alsoRheingold, passim.
24. Rheingold, pp. 29-30.
25. Rheingold, p. 30.
26. Rheingold, pp. 170-171.
27. Yamada, p. R10.
28. Douglas MacLeod, The Art and VirtualEnvironments Project at the Banff Centre for theArts" (call for proposals), Banff Centre for theArts, September 20, 1992, p. 2.
29. MacLeod, p. 1.
30. MacLeod, p. 2.
31. John M. Eger, ''New Communications TechnologyCould Make Area a Powerhouse," San DiegoUnion, November 17, 1991, p. C-3.
32. George D. Drapeau, "The MAEstro MultimediaAuthoring Environment," Technological Horizonsin Education (T.H.E.) Journal, February 1992, pp.64-68.
33. "The Communications R & D Situation in Japan, Part6: NEC Corp. Bridging Language and DistanceBarriers with Computers and Communications,"New Breeze, Summer 1991, pp. 12-14.
34. Katayama, p. 23.
35. Rheingold, pp. 172-173.
36. John M. Eger, "Beyond Psychographics: Fiber Opticsand the Future of Television" (transcript of remarkspresented to the 1st World Symposium on theElectronic Media, United Nations' InternationalTelecommunications Union, Geneva, October 2,1989), passim.
37. Ron Wilson, "DSP Multimedia Solutions Emerge,"Electronic Engineering Times, October 12, 1992,pp. 1, 98.
REFERENCES
Bruder, Isabelle. "Multimedia: How it Changes the WayWe Teach and Learn," Electronic Learning,"September 1991, pp. 22-26.
-. "The Communications R & D Situation inJapan, Part 6: NEC Corp. Bridging Language andDistance Barriers with Computers andCommunications," New Breeze, Summer 1991,pp. 12-14.
Drapeau, George D. "The MAEstro Multimedia AuthoringEnvironment." Technological Horizons inEducation (T.H.E.) Journal, February 1997., pp.64-68.
Dezell, James E. "The Fusion of Education &Technology" in The Uncertain Future: NewDirections for Communications Technology &Public Policy (San Diego CommunicationsCouncil, 1990 conference proceedings), pp. 3-8.
Eger, John M. "Beyond Psychographics: Fiber Optics andthe Future of Television" (transcript of remarkspresented to the 1st World Symposium on theElectronic Media, United Nations' InternationalTelecommunications Union, Geneva, October 2,1989).
Eger, John M. "New Communications Technology CouldMake Area a Powerhouse," San Diego Union,November 17, 1991, p. C-3.
. Future Tense: Arts Education TechnologyConference Sununary (Getty Center for Educationin the Arts, 1991).
Goldberg, Vicki. "On a Pizza-Size Disk, the History ofAmerican An," New York Times, March 1, 1992,pp. H35-36.
Kahn, Ted M., and Dave Master. "Multimedia Literacy atRowland: 'A Good Story, Well Told',"Technological Horizons in Education (T.H.E.)Journal, February 1992, pp. 77-83.
Katayama, Ryuji. "Virtual Dynamite," Business Tokyo,February 1991, pp. 22-27.
Logan, Dr. Jack D. Interview regarding use of interactivemultimedia in music education, San Diego StateUniversity, November 17, 1992.
MacLeod, Douglas. "The Art and Virtual EnvironmentsProject at the Banff Centre for the Arts" (call forproposals), Banff Centre for the Arts, September20, 1992.
Rheingold, Howard. Virtual Reality (New York, 1991).
Schneider, Keith. "Theaters of High Tech/Washington:Interactive Multimedia for the 2000's," New YorkTimes, January 12, 1992, Sec. 5, pp. 14, 23.
Techno-Art Museum (pamphlet published byNew Media, Inc.), February 1, 1990.
Thurber, Dr. Barton D., Dr. Gary Macy, and Dr. JackPope. "The Book, the Computer and theHumanities," Technological Horizons in Education(T.H.E.) Journal, August 1991, pp. 57-61.
Watkins, Beverly T. "Videodisks Offer a Detailed Portraitof Qin, the first Chinese Emperor," Chronicle ofHigher Education, February 5, 1992, pp. A20-A23.
Williams, Harold M. "The Language of Civilization: theVital Role of the Arts in Education" (transcript ofremarks presented to the President's Committee onthe Arts and the Humanities of the J. Paul GettyTrust, New York City, October 3, 1991).
Wilson, Ron. "DSP Multimedia Solutions Emerge,"Electronic Engineering Times, October 12, 1992,pp. I, 98.
Yamada, Ken. "Almost Like being There," Wall StreetJournal, April 6, 1992, p. RIO.
640 c
Social Impact of Cellular Telephone U-age in Hawaii
Dineh M. DavisDepartment of CommunicationUniversity of Hawaii at Manoa
Honolulu, Hawaii, U. S. A.
1. ABSTRACT
Hawaii is noted to have the highest penetration rate of cellular telephones in the UnitedStates. This sudden surge in the use of anew technology has been accompanied byquestions related to social and lifestyle impact, especially in the area of driver safety.The following study reports on the analysis of exploratory data gathered from highschool and university students, on-duty police officers, as well as other Oahu residentsusing cellular phones for a variety of business and personal applications.
2. BACKGROUND
In less than a decade from its introduction into themarketplace, the cellular telephone has found awelcome home in the hearts and minds of theAmerican public. Though application of celltechnology may be relatively new, its human interfaceis, in fact, a familiar reminder to an alreadycomfortable mode of communication, beloved by atleast three generations. Conceptually, the telephoneis also the perfect companion piece to another all-timeAmerican favorite: the automobile.
This seemingly made-in-heaven match capitalizes onan illusion of freedom and independence: two of thestrongest elements defining American culture. Acombination of maintaining accessibility viatelecommunication while remaining physically free ina moving vehicle provides a sense of personal controlover space and time. It is a powerful temptationwithin the reach of many: those who may havealready lost other forms of control over their dailylives, as well as those in power who are simplyseeking to preserve the status quo. For some, itserves as an efficient business tool that will help thembetter perform their designated duties; for others, isa transformational technology that opens a new andpreviously unattainable dimension in their lives.
Respondents: The following study is a preliminaryforay into the attitudes and impressions of two sets ofOahu residents concerning cellular telephones. It
represents the aggregate views of 169 high schooland university students as well as 945 Honolulu policeofficers on traffic-related duty who were surveyedduring the period of May through November, 1992.The survey instrument included closed and open-ended questions on a variety of portablecommunication technologies, from which cellulartelephone data has been extracted for this report.
641
In addition, ten in-depth, open-ended interviews wereconducted with representative users of cellulartelephones; from strictly business users through thenow-prevalent continuum of mixed business andsocial use, to the strictly "safety & security" mindedusers. It should be noted that the student sample isnot representative of the total student population inHawaii and may, in fact, be biased toward a moreaffluent and sophisticated sub-set of the youngerpopulation. Although all students were attendingpublic institutions of education (Kalani High Schooland University of Hawaii at Manoa) no extrapolationscan be made to a wider population base. Additionalinformation on the police sample is provided inSection 5.
3. HAWAII'S CASE
Hawaii's unique geography, limited road system,premium property costs, and more traditional familyvalues may have put it ahead of many other states inthe applications of this new technology.
Hawaii is noted for two distinctions in the cellulartelephone market. First, it seems to have the highestpenetration rate of cellulars in the United States;approximately 9% (anticipated 10% by first quarter of1992), compared to the highest mainland rate of 7-8%in Las Vegas.(1) Second, while mainland cellulartelephone users seem to prefer mobile units,Hawaiians are firmly committed to portables. Thedifference in portable use rates are quite startling: anestimated 90-95% in Hawaii compared to 26%portable use on the mainland in the second half of1992.(2)
One line of reasoning that would explain both of thesephenomena would be the timing of the introduction ofthis service and the physical layout of the populatedareas of the islands. One must note that cellulartechnology was not introduced into the islands untilmid-1986 three years after the granting of the firstFCC licenses on some mainland locations.
Yet, because of the FCC's west-to-east granting ofRural Service Area (RSA) licenses, the island ofKauai became the first benefactor of such a licensethrough a GTE Mobilnet application.
Thus, by getting a relatively "late" start but with morecomprehensive coverage, Hawaiians may have beenintroduced to this technology by more experiencedmarketers and may have skipped the earliest (andbulkiest) generation of the equipment. In addition,because of limited road systems, people are notspending as much time "on the road" as they wouldon many mainland states. To make their investmentin cellular technology more worthwhile, it makessense to have a portable unit that can be used in avariety of circumstances and not just in a car. For ayounger or less affluent market segment this alsotranslates into keeping in touch when the primarynode of transportation is not a car at all but a bike,moped, or motorcycle.
4. PRIVATE IMPRESSIONS
One of the tasks for all those surveyed was to ratetheir own frequency of use of cellular telephones andtheir impressions of this technology on a five pointscale (frequency of use from "never' to "regularly" andimpressions from "negative" to "positive"). Resultsfrom both groups, as can be seen in Figures 1 and 2,show a relatively large number of individuals whohave used cellular phones (71% for police and 66%for students) with a majority in each group having apositive impression of this technology. Negativeimpressions range from 11% for the student group to17% for the police officers.(3)
100
90
R 80e 70
60
50
40d
30e
20
t 10
Policeusers I nonusers
S..
Studentusers I nonusers
ri regularly "fa sometimes
often te infrequently1121 never
FIGURE 1. FREQUENCY OF CELLULAR PHONEUSE BY STUDENTS AND POLICE OFFICERS
642
Impression of Cellular Phones
50% positive 66%
Police
33% neutral 23%
17% negative 11%
Students
FIGURE 2. POLICE & STUDENT IMPRESSIONSOF CELLULAR TELEPHONES
A full range of attitudes and impressions toward thistechnology were recorded, from negative toambivalent to positive. In addition, between 23-33%of the populations studied remained neutral in theirimpressions.
Negative Impressions: Typically, negative attitudestoward the cellular phone come from those who arenot cellular phone users themselves, and if they are,their objections are generally limited to theinappropriate use of the instrument by others. Themost often-heard complaint is danger to safety on theroad; followed by lack of social etiquette in publicplaces such as restaurants, theaters, meetings, andclassrooms. The younger generation is almostunanimous in its praise of cellular telephones. Two ofthe often-cited negative issues related to thistechnology, that of privacy and matters of traditionaletiquette do not appear to be of major concern to thisgroup. Of over 150 students surveyed in thiscategory, fewer than 4% had strongly negativeimpressions of this technology. This number climbedto almost 9% for police officers.
In the police data, a positive relationship existsbetween the frequency of use and a positiveimpression of the technology; the more frequent theuse, the more positive the impression. In fact, out of231 respondents who used cellular telephones withany regularity, only 15 (or less than 7%) had anegative opinion of this device whereas at the low-uselevel the numbers were almost equally dividedbetween negative and positive impressions, with aslight leaning toward the negative (51% to 49%).
Ambivalent: The best example in this categoryillustrates how a simple chore, given the chance, cancreate an ambiguous social behavior. A high schoolstudent on a very tight schedule had borrowed hermother's cellular telephone for the day so that shewould not miss a deadline for calling in her order forsenior-year photographs. As she was making the callfrom her car. she commented with great misgiving tothose sharing the ride: "I feel like a yuppy scum." Ofcourse, this person should be pleased to know that arecent market survey in
London has put "yuppies" fifth on the list of top cellularphone users, behind "people who travel, busy people,entrepreneurs and 'wheelerdealers.'"(4) It would not be unreasonable toassume that some of our collective impressions of atechnology will be based on the image we conjure upof its user population. This image itself seems tospan a wide spectrum of positive, negative, and"shaky" adult characters, ultimately leaving one withan ambiguous perception of cellular phone users.
Positive: Any number of factors may account for themore positive image that cellular telephones enjoywith the student group, including their receptivity tonew technologies based on greater exposure to avariety of such technologies throughout their lives andthe specific professional experiences of the lawenforcement officers.
The most often-cited positive impression of thisdevice is related to its convenience. Many who see itas an indispensable tool for safety and security areadamant about classifying it as a necessity, ratherthan a luxury.
5. SAFETY AND SECURITY
5.1 ON THE ROAD
One of the most controversial social issues regardingthe use of cellular telephones is road and highwaysafety. The most vocal critics of this new technologywill invariably point to the hazards of being in thevicinity of a driver weaving from lane to lane whiledialing a number or being engrossed in a telephoneconversation.
While earlier research shows that the safety benefitsof cellular telephones in cars may offset potentialhazards,(5) it could not be automatically assumedthat such results are generalizable to the currentsituation in Hawaii. Several conditions haveprompted a re-evaluation in this state: first,contemporary use of cellular telephones in Hawaii isno longer limited to the business community butextends to the general public; second, the number ofindividuals with access to such devices has increaseddramatically over the last several years; and, finally,with the increase in number and variety of users, theuse patterns may have shifted, both in terms of thepurpose of calls and their number and duration. Inaddition, the roads and driving conditions on Oahuare quite different from those on the U.S. Mainland.
"House Concurrent Resolution Relating To HighwaySafety," of Hawaii's Sixteenth State Legislature (1992)acknowledged the need "to obtain statistics on thepotential dangers and the extent to which ... cellularphone use while driving has contributed to traffic andpedestrian accidents in the State."(6) As neither thestate's Department of Transportation nor the HonoluluPolice Department had collected any statistics thatwould allow for a retrospective search and analysis ofrelevant traffic accidents, it was decided to conduct an
exploratory survey to determine the extent to whichon-duty traffic officers have observed the interferenceof cellular telephone use with safe drivi.ig habits onOahu's roads. Because of the exploratory nature ofthis study and in the interest of time for reporting tothe next legislative session, it was decided to acceptthe inherent shortcomings of a self-administeredinstrument.
To this end, 1700 questionnaires were distributed inlate October, 1992 through the Honolulu PoliceDepartment's Records & Identification Division to allpolice officers with traffic-related duties. In addition toinquiring about cellular telephone-related accidents orunsafe driving habits observed, thi3 three-partquestionnaire also dealt with frequency of personaluse, impressions, and safety-related aspects of othermobile or portable telecommunication media such asradio head-sets, multiple radio speakers, boomboxes, laptop computers, and portable television sets.Of the 945 valid forms returned by early November,questions in Part II of the survey (personalexperiences as police officers) have been analyzedand will be reported in this paper.
643
The reader is urged to keep in mind that therespondents were not asked to report doc;:mentedfacts. but to simply state their own perceptions.impressions. and personal experiences.
Questions which appear in bold italics in theremainder of this paper have been taken directly fromthe survey instrument and represent a subset of the26 questions asked of the HPD officers.
In your experience, does cellular or mobiletelephone use contr!bute to or cause automobileaccidents?Never / Seldom / Occasionally / Often / Very Often
III Never: 16%Seldom: 31%
Occasionally: 44%Often: 6%
Very often: 3%III'
FIGURE 3: POLICE OPINION of CELLULARPHONES CONTRIBUTING TO AUTO ACCIDENTS
Of the 892 police officers responding to this question,only 16% (or 142) felt that cellular phones were nevera contributing factor in accidents. While 280 (31%)thought that this technology was seldom involved inserious safety violations, 390 or 44% of therespondents saw cellular phones as an occasionalcontributor to auto accidents. Of the remaining 9%who had reason to believe that there was a muchgreater safety hazard associated with cellular phoneuse on the road, 6% registered "often" and 3 %chose "very often" as their category of response tothis first question. See Figure 3 above.
In the past twelve months of investigatingaccidents, in your opinion how many accidentsseemed to involve cellular phones as acontributing cause to the accident?None / 1-2 / 3-4 / 5 or more
This follow-up question was answered by 742 of therespondents. This lower number in some measurereflects the assignment status of some of the officerswithin the last twelve months. Of this number, 17 or2% reported having investigated five or moreaccidents in which cellular telephones were acontributing cause. Another 54 (7%) had seen 3-4telephone-related accidents while an additional 27%had investigated one or two such accidents. Themajority of the respondents (64%), however, had notinvestigated any accidents in the previous 12-monthperiod in which cellular phones could be considered acontributing cause to accidents. See Figure 4.
111 none 64%1-2 27%
3-4
1,71; 5 or more 2%
:22! 7%
FIGURE 4: NUMBER OF ACCIDENTS IN WHICHPOLICE IMPLICATE CELLULAR PHONES AS
CONTRIBUTORY CAUSE (12-MONTH PERIOD)
Is cellular or mobile telephone use while drivingless or more risky than eating while driving?Less Risky / As Risky / More Risky
Many of the advocates of cellular telephones arguethat automobile drivers engage in a variety ofbehaviors that lead to at least equally if not morehazardous driving conditions. Among the activitiescited are drinking hot beverages, eating, smoking,and applying cosmetics (or shaving). The surveyapproached this issue from several differentperspectives, including a parallel set of questions
644
involving such distractions as noisy children,unrestrained pets, and smoking. This line ofreasoning led at least one officer to propose thebanning of noisy, bouncy, children from movingvehicles while it prompted another to defend pets ashighly desirable companions in cars! Figure 5 showsa wide variation of opinions on the risks of cellularphone use as compared to eating while driving.
A comment from a "strictly business" cellular phoneuser was that drivers have an inherent knowledge ofwhat they are capable of doing behind the wheel andthat their use of cellular telephones will follow thesame pattern of behavior. In other words, "If youknow how carefully you need to bite into yourhamburger and how long it takes you to accomplishthis task without endangering others, then you willfollow the same rules when trying to make a phonecall." Of course, if not all drivers are as conscientiousas this respondent while eating, the presumption isthat they will also have the same failings in their useof the telephore.
less risky than eating & driving 25%as risky as eating & driving 55%
0 more risky than eating & driving 20%
FIGURE 5. CELLULAR PHONES:POLICE OPINIONS OF RISK
Do the benefits of cellular phones (such asreporting drunk drivers or accidents) outweighany risks caused by their use (such as driverinattention)? Yes / No
benefits outweigh risks 66%
risks outweigh benefits 34%
FIGURE 6. POLICE OPINION OF THE BALANCEOF BENEFITS AND RISKS OF CELLULAR PHONES
5.2 PUBLIC AND PRIVATE SAFETY
A growing number of subscribers nationwide and inHawaii report their primary use of this technology as asafety net in times of crisis. Statistics for thisphenomenon abound in the industry and can be seenin nearly every issue of the industry's trade journals.For example, a survey of cellular phone users inOctober of 1991 revealed that 40% of currentsubscribers considered themselves exclusivelybusiness users, but "only 17% of non-users interestedin cellular say they would use it solely for thatpurpose."(7) Cellular Marketing's 1992 mid-yearcellular carriers survey results show a steady trend of18% decline in subscriber phone bills even as theindustry is reporting a 57% subscriber growth rate.(8) This indicates that new subscribers to this serviceare more likely to be non-business users. Toillustrate, when the business and non-businesscustomers are lumped together (as in CellularMarketing's survey noted above), the average bill isestimated to be $77.88 down from $87.40 six monthsago and $95.00 in 1991.(9) In Hawaii, the averagephone bill for those who are subscribing to cellular Torsafety reasons alone is approximately $30.(10)Individual interviews have shown the lower range tobe approximately $16-$20 per month, or just a fewdollars more than the minimum monthly subscriptionrate offered by the companies.
One way to assess the public's image of the cellulartelephone as a safety tool is to look at patterns ofcellular sales and local occurrences of crimes ordisasters. Reports from mainland states haveindicated an unprecedented surge in cellular phonesales and subscriptions after well-publicized crimessuch as the Zywicki murder case.(11) Ron Nissen,former press secretary to President Ford and now aspokesman for the Cellular TelecommunicationsIndustry Association in Washington was quoted assaying, "Every time somebody gets their car stolen orgets hurt or killed in a carjacking, there's an increasein customers."(12)
Hawaii cellular telephone companies have also noteda surge in demand for portable communicationassociated with a local crime against a young womanduring Christmas of 1991 as well as the more widelypublicized case of hurricane Iniki during the Fall of1992.(13)
6. LEGISLATION
6.1. POLICE RESPONSE
Would you support or oppose legislationregulating the use of cellular and mobiletelephones by the driver while the car is inmotion? Support / Oppose / No Opinion
Because the Honolulu Police Department testifiedbefore the Legislature on behalf of this study and the
645
questionnaires were distributed from the Captain'soffice, there was some concern that the respondentsmight feel obligated to reflect what they may havebelieved to be the views of the top administrators.Although some regional patterns became evident inthe process of data entry, there was no indication ofan overall bias and the aggregate result seems toconfirm the independence of individual respondents.
Of the 909 officers responding to this question, 295or 32% would oppose legislation limiting the driver'suse of cellular telephones in a moving vehiclo., while355 or 39% would support such legislation (SeeFigure 7). Some of those supporting such legislationplaced contingencies on their positive responses,such as "reasonableness of legislation." On the otherhand, a number of those who opposed legislationseemed to find more pressing safety issues onHawaii's roads; for example, banning the use of radioheadsets or political "sign waving" during politicalcampaigns. The most-often cited reason for notmandating new regulations is that there are alreadyample laws addressing this issue through the "driverinattention" category. The advantage of such acatch-all category is that it can be extended equally toall future technological additions to vehicles which canpotentially cause even greater distractions thantelephones.
In the latter category we can already place emergingtechnologies such as the extended mobile office,including a variety of laptop computers, fax machines,and "personal communicators."
support 39%
oppose 32%
Mno opinion 29%
FIGURE 7: POLICE SUPPORT OF LEGISLATION
6.2 OTHER RESPONDENTS
A subset of the University of Hawaii samplepopulation participated in a semester-long computer-mediated discussion of the pros and cons oflegislative action related to the use of all phones inmoving vehicles. These respondents wereunanimously against such legislation. The following
comments are typical of the many received from thestudent population and the larger public sample:
"It is the responsibility of the driver to makesure they are capable of using a phone while driving.If they are not, then they should not [or will not] useit." "I think it would not be practical and fair to cellularphone users to make such a restriction. If they dothat, they should put a ban on CB radios, and policescanners, or any form of mobile communications thatis used while driving also. But they would never dothat. Why pick on cellular phone users only?"(14)
6.3 PROSPECTS FOR LEGISLATION
There is currently a gridlock in the state court systemcaused by mandatory sentencing requirementsimposed by the legislature and a rising number ofdrunk driving, child abuse, and spouse abuse casesbeing brought to trial. The courts are seeking somerelief from the legislature for granting morediscretionary options for the judges and are clearlystating that any additional legislation which affects theworkload of the courts should be supplemented bybudgetary allocations to defray the costs of thejudicial process.(15)
At a time when Hawaii is facing diminishing revenuesand the state budget is being scrutinized for everypossible cutback, it would seem unlikely that thelegislature will consider legislative action againstcellular telephone use when many in the field of lawenforcement believe that the current catch-allcategory of "inattention to driving" can be used andenforced against unsafe cellular phone use. On theother hand, some police officers believe that even ifcellular-related legislation is difficult to enforce, itshould still be placed "on the books" to discouragefrivolous use of the telephone while a vehicle is inmotion.
7. OTHER SOCIAL ISSUES
There are a variety of social issues related to the useof cellular telephones. Some, such as privacy andfraud, have received extensive publicity. Others, suchas personal and societal costs of the technology,unethical or illegal uses, and the inherent limitedavailability of the current services are argued away interms of future technical or social fixes. The latterconcerns are not limited to cellular telephones, butapply to the vast majority of communicationtechnologies introduced into the American cultureduring the past decade. As all of these areas areworthy of lengthy discussions, any tokenism will bedispensed with here. Instead, the remainder of thispaper will focus on identifying certain emergingthemes as potential areas for further research.
A synthesis of results from over 1100 respondentsbegins to establish some behavioral patterns ofcellular telephone use. Such patterns are not only
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apparent to the users themselves, but also equallyapparent to the non-users, as may be witnessed bythe growing trend toward establishing "socialprotocols" in public places. Such patterns of use andbehavior can take on positive or negative overtones,or can be classified as impulsive or spontaneousbehavior which may have both positive and negativeconnotations. The following categories are a firstattempt at identifying themes and are not intended tobe mutually exclusive.
;mpulsiveness and Spontaneity: To check (up) onpeople on the spur of the moment. There is a greaterten'4ency to keep in touch with "significant others."On the one hand this may lead to strongerinterpersonal relationships; on the other, it may borderon overprotectiveness and result in a total lack ofprivate time. It may soon become difficult to draw theline between impulsive spontaneity and compulsivetendencies of the "need to know" variety. Althoughthe majority of normal phone users will report thatthey keep their telephone "shut down" to avoidreceiving calls, others will report that they must leavethe phone on, and are effectively "on call" at all times
not for business, but for personal relationships.. Insuch cases a spontaneous changing of plans can justas easily lead to negative as to positive results in arelationship.
Adventuresomeness and risk taking: To go placesand not feel afraid; to go places never gone before,being secure in finding directions. The portablephone serves, in effect, as a safety net which allowsmore risky activities such as travelling late at night,unaccompanied, and in unfamiliar territories.Spontaneous behavior can also be classified underthis heading for many individuals who areunaccustomed to this form of decision-making.
Responsive & responsible behavior Someresponsibilities become more bearable, or perhapsless burdensome and thus more possible whenportable telephones are used. Keeping in touch witha baby-sitter while enjoying a night out can reduce thenew parents' guilt or anxiety. Networking withhomebound people in the community becomes easierand more streamlined from the road. The father-to-becan be reached at any time when the crucial callcomes in. Examples are as varied as theresponsibilities we assume in our daily lives.
Control and power: Fundamentally, this technologycan be used as a powerful instrument of control. Itspower is dependent on the dominance of theindividual subscriber in existing or potentialrelationships:
Being in control. Many use this device as anenabling tool that allows them to remain in control ofan environment broader than their immediate physicalsurroundings. By forwarding calls from land-linephones, individuals can expect to be reached fordecision-making at all times. One interviewee in law
enforcement has combined several unconnected (inthe sense that no call forwarding takes place from onedevice to another) telecommunication technologies tomaximize this control. A pager is used for screeningsecond-level priority calls; the portable cellulartelephone number is shared with immediate familymembers and close friends but is otherwise used forbusiness purposes; the mobile phone is used for highpriority business calls only; and the 2-way radio isused for the highest level business-related emergencyuse. The individual stressed the importance of beingin total control of the communication process.Although he receives incoming calls on the cellularphone, the conversations are generally kept longenough to screen the importance of the call. In mostcases the calls are returned "when and where" hechooses at a later time.
Being controlled. At the opposite extreme, theportable phone is also used, in a sense, as an"electronic leash." At a time of rising crimes,especially against young women, it is notunreasonable to have a caring father or spouseprovide a gift of this instrument. Whether there areany cultural or ethnic overtones to this practiceremains to be studied. Although he rate of womensubscribers is increasing across the nation, thereseems to be even a greater preponderance of thisoccurrence in Hawaii. As mentioned under theheading of impulsiveness above, there may be cross-over of intentions from safety considerations to controlwhet, the individual feels obligated to keep the phoneon at all times for incoming calls. That is, if there arefe lings of shame or embarrassment associated withcarrying a telephone, then the point of caring mayhave been crossed into invasion of privacy regardlessof the original good intentions.
Bonding and Caring. The antithesis to the control andpower perspective is that of loving, fun loving, andbinding family ties. In a culture where traditionalfamily values are quite strong and daily contacts spanseveral generations, the cellular phone hasstrengthened this bond. Family members will keep intouch to arrange many social gatherings, and to stayin touch with those who may have no traditionalaccess to telephones. For example, one familysubscribed to a cellular phone service for an elderlyfamily member who was confined to a long-term carefacility with no in-room land-line telephone. In theaftermath of the Iniki hurricane, many extendedfamilies kept in touch by cellular phone and kept trackof food and supplies being relayed from one island toanother. Cellulars are also used regularly byfishermen and others who spend time on water ornear shore.
A final phenomenon which is unique to cellularphones and fits best in this category is that of the"paid for" allotment of air-time (usually about 15minutes per month) which may as well be used forpurely social reasons.
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An obsession with "connectivity": There is a euphoricfeeling experienced by some users especiallynewcomers to the service which they attribute to thecreation of a different temporal and spatial world. Forsome, this is a spacious and timeless utopic worldfrom which they don't wish to escape. For others, it isan experience that can only lead farther and fartheraway from "normal" life, to where the instrumentbecomes the controlling and dominant force. Whenthat final point is reached, most will pull back toreassess and redefine their relationship with the"tool." The addictive behavior this device seems tocreate in some seems to be a reflection of theindividual's character rather than any inherent trait inthe instrument. Yet, this is the perfect tool forconstant connectivity and in that sense nothing like ithad ever existed before.
8. OTHER MOTIVATIONAL FACTORS
Motivation for early adoption of cellular telephones, aswith other new communication technologies, can betraced to internal and external factors. The externalmotivations, such as job requirements or potential forcareer advancement are relatively easy to identify andcategorize. In these areas Hawaii seems to befollowing the same patterns as other states, with highusage of cellular telephones among individuals whosework does not confine them to an office desk orrequires them to be outdoors: contractors,construction workers and builders; sales staff andsales executives; and real estate agents. Otherprofessionals who consider themselves "on-call," willalso avail themselves of a tool that guaranteesinteractive contact regardless of whether they are in aboard room or on a golf course.
The more clearly identifiable internal motivationsseem to fall within the context of gaining social status,or exploring new "toys." Few among the youngergeneration doubt the value of the cellular telephoneas a status symbol. In a state that has more than itsper capita share of wealthy residents and tourists,there is no scarcity of role models for early adoptersof cellular phones.
It may be more difficult, however, to identify thoseindividuals with an inherent desire for a aifferentlife-style. Taken individually, members of the lattergroup may be hard to locate or to cateciorize. Butwhen their numbers reach a critical mass, they mayportend a trend that is difficult to dismiss. Perhaps wehave reached such a threshold in Hawaii
In more uncertain times, we grasp at anything thatmight improve our quality of life. In an environmentwhere larger goals for independence are denied,there is a tendency to seek and accept alternativesymbols. In Hawaii, perhaps even more so thanmany other states, two additional external factors maybe providing the impetus for cellular telephoneownership. When the ultimate American dream ofhome ownership is closed to a large segment of the
working population, it may create a greater need formore achievable and visible consumer goals.Coupled with a hospitable climate which allows forlong-term stays outdoors or in one's automobile, thismay account for some of the local variations incellular telephone penetration and use in this state. Inan environment where many live with their extendedfamilies in cramped quarters, a well-furnished car maybe the next best option to the privacy andindependence generally afforded to single-residenthome owners, a cellular telephone becomes as muchof a necessity as would a land-line phone in aconventional home.
Thus, portable cellular telephones have found awelcome home in Hawaii, overcoming the physicalisolation of its land mass; limited and increasinglymore congested road system; premium land andproperty values; and a more traditional outlook onfamily togetherness and bonding.
END NOTES
(1) Scott Silvey, Market Manager, GTEMobilnet, personal interview, Nov. 11, 1992.
(2) Ibid, for Hawaii figures. Maxine Carter-Lome, ed. "New Users Soar While Subscriber BillsPlummet," Cellular Marketing, Vol. 7, No. 9 (Sept.1992), p. 25.
(3) Throughout this paper, statistics related tothis study which appear in percentage form havebeen rounded to the nearest one percent.
f4) "UK: Mobile Phones No Longer for'Yuppies,- From: News Bytes (online news service),25 Nov 92, 20:51:38 GMT. Researchers at MillwardBrown, a market research company commissioned byCellnet, asked their interviewees to describe the topfive types of character who were most likely to use amobile phone.
(5)Mobile Telep hone Safety Study: Report tothe Legislature, Department of California HighwayPatrol, March 1987.
(6) Excerpt from letter to Hon. Daniel J.Kihano, Speaker, House of Representatives,Sixteenth State Legislature, from Committee onLegislative Management, Re: House ConcurrentResolution No. 377, dated April 16, 1992.
(7) "Is That a Personal Call?" RCR (RadioCommunications Report) Vol. 10, No. 20 (Oct. 21,1991) p. 1.
(8) Maxine Carter-Lome, ed. "New Users SoarWhile Subscriber Bills Plummet," Cellular Marketing,Vol. 7, No. 9 (Sept. 1992), p. 24.
(9)Ibid.
(10) Both local cellular telephone companies,GTE Mobilnet and Honolulu Cellular TelephoneCompany, have informally confirmed this figure.
(11) Zywicki, a student at Grinnell College inIowa was killed while driving to college and her bodywas found alongside a highway in Missouri. Co-incident with this report, Cellutech's sales for thatmonth doubled from 3000 to 6000 compared to theprevious month, and Cellular One reported a 50percent increase in phone calls to its toll-freeinformation line. (Chicago-Sun Times; NewsByteService)
(12) "Crime up; so are car phone sales,"[email protected] (UPI) (online news service)12 Nov 92 6:10:55 PST.
(13) Although no formal studies were conductedat the time to ascertain a direct link between thehomicide and increased demand for cellular phones,GTE Mobilnet registered an unusual rise insubscriptions coincidental with this crime. (Silvey)The case of hurricane Iniki has been well documentedby the local press in terms of the cellular companies'public service assistance in providing the only meansof communication with the island of Kauai residentswhen primary telecommunication services weredisrupted for several weeks.
(14)Computer conferencing comments fromstudents in a telecommunication services course. Fallsemester, 1992. Almost identical comments appearon survey forms of both students and police officers;as well as interview transcripts from other cellulartelephone users.
(15) Hawaii Public Radio newscast, 11/25/92.
REFERENCES
Carter-Lome, Maxine, ed. "New Users Soar WhileSubscriber Bills Plummet," Cellular Marketing, Vol. 7,No. 9 (Sept. 1992), p. 24-26.
[email protected] (on-line news service),various electronic postings.
Committee on Legislative Management, letter to Hon.Daniel J. Kihano, Speaker, House of Representatives,Sixteenth State Legislature, Re: House ConcurrentResolution No. 377, dated April 16, 1992.
"Crime up; so are car phone sales,"[email protected] (UPI) (on-line news service)12 Nov 92 6:10:55 PST.
"Is That a Personal Call?" RCR (RadioCommunications Report) Vol. 10, No. 20 (Oct. 21,1991) p. 1.
Mobile Telephone Safety Study: Report to theLegislature, Department of California Highway Patrol,March 1987.
NewsByte On-Line News Service, various electronicpostings, August-November, 1992.
Silvey, Scott, Market Manager, GTE Mobilnet,personal interview, Nov. 11, 1992.
"UK: Mobile Phones No Longer for 'Yuppies,'"NewsBytes (on-line news service), 25 Nov 92,20:51:38 GMT.
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Imparja Television Pty. Ltd.Australia's Aboriginal Owned Commercial Television Company
Lorraine Liddle,
Jim Wilkinson,
Chairperson, Imparja Television Pty. Ltd.,Alice Springs, Northern Territory, Australia.
Director, Imparja Television Pty. Ltd., AliceSprings , N.T.
1. ABSTRACT
The very remote areas of Central, North East, and Western Australiaare served by satellite delivered Government and privately owned
(Commercial) television services using three "footprints" of theAussat satellite network (which is now privately owned by the Optus
Corporation, Australia's second monopoly carrier).
The licence to operate the Commercial television service to theCentral Zone footprint was granted to an Aboriginal owned company,
Imparja Television Pty. Ltd., in 1987, following an application andsubmission of evidence to a Licence Grant Hearing of the AustralianBroadcasting Tribunal by the Central Australian Aboriginal MediaAssociation (C.A.A.M.A.) from which Imparja Television Pty. Ltd.
was formed.
2. FEATURES OF THE IMPARJATELEVISION SERVICE
2.1 GENERAL.
It took almost forty years for the thinly populated"outback" areas of Northern and CentralAustralia to be provided with the televisionservices that had become available to residents incapital cities and larger regional to cities from themid 19f )s to the late 1960s (typically, in countryareas, one channel carrying the programs of thegovernment owned Australian BroadcastingCorporation and one channel carrying anadvertising supported "Commercial" program).Because of the grossly uneven distribution of thepopulation (85% of households contained withinabout 15% of the land area) it was not possible, inAustralia, to contemplate the provision of even theGovernment, much less a commercial televisionservice, in the "real" outback until satellitedistribution of programs became possible.
The then Government owned Australian domesticsatellite network, Aussat, which was establishedin the early 1980's, provided four spot beams fortelevision services to remote locations. The beamscovered the following zones: -
Western ZoneCentral ZoneNorth East ZoneSouth East Zone
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Each zone was to have a satellite distributed ABCTelevision Service and a commercial (privatelyowned, advertising supported) service. In theevent, although a commercial licence was grantedto the South East Zone, the licence was not taken.ABC services were established in all four zones.The Imparja beam power contours are shown inFig. 1.
The Imparja TV service commencedtransmissions early in 1988 after surviving anAppeal to the High Court of Australia by the rivalapplicant for the licence (the then licensee of theexisting Commercial TV service in Darwin)which challenged the validity of the BroadcastingTribunal's Decision on grounds of questionableviability of the proposed service.
3. OBJECTS OF IMPARJA TELEVISION
The major objects of Imparja Television, as set outwithin the Memorandum of Association, are to:
(a) provide adequate and comprehensivebroadcasting and satellite services withinand around the Central Zone RemoteCommercial Television Service Area andelsewhere;
(b) provide educational broadcasting andsatellite program services in the areas ofhealth, law, social security and items of
public interest, and in so doing attempt toovercome the problems of low literacylevels existent within the Aboriginalcommunities within the Central ZoneCommercial Television Service Area andelsewhere;
(c) arrest social disintegration within theAboriginal society by the provision ofprograms in Aboriginal languages withemphasis upon Aboriginal traditionalculture and music;
(d) by the dissemination of information asregards employment opportunities andwork programs, assist in alleviatingsignificant economic problems that existwithin Aboriginal communities;
(e) promote knowledge and understandingby the Australian community ofAboriginal culture and tradition and ofthe special difficulties experienced byAboriginal people as a minority withinthat community;
(f) engage in and conduct research intoareas of application of the broadcastingmedia and satellite program services toand for the benefit of Aboriginal people;
(g) ensure access by Aboriginal people toexisting and forthcomingcommunications facilities in order thatthey may benefit in accordance with theobjects;
(h) record and preserve Aboriginal oralhistory and music;
(h) employ and train Aboriginal people inthe areas of broadcasting, satelliteprogram services and the electronicmedia; and
(i) undertake and implement activitieswhich further the economic and socialdevelopment of Aboriginals and whichare conducive to the advancement ofAboriginals.
In addition to the above-mentioned objectives,Imparja Television has other significant objects ofa commercial television nature. One of theprincipal commercial objectives of ImparjaTelevision is commercial viability within the longterm.
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4. ABORIGINAL OWNERSHIP OF IMPARJA
All the A and B class shareholders in ImparjaTelevision Pty. Ltd. are Aboriginal interests.Whilst a controlling management interest is heldby CAAMA, the balance of the A classmanagement shares are held by a variety ofAboriginal interests located throughout theImparja TV service area in the NorthernTerritory and South Australia.
A.T.S.I.C. (Aboriginal and Torres Strait IslanderCommission) is the current sole equityshareholder in Imparja Television, with B classpreferential shares.
Imparja Television is a 100% Aboriginal ownedbusiness enterprise and a very important questionin this regard is what are the legitimate returnsfor the investment of the shareholders in Imparja.
5. COMPATIBILITY OF IMPARJAOBJECTIVES
It is appreciated that the potential may exist forsome conflict or incompatibility between some ofthe above-mentioned objectives of a social orcultural nature and the objective of commercialviability.
It is the firm conviction of the Imparja Companyhowever, that the Imparja social and culturalobjectives are not necessarily in conflict with theImparja objectives of commercial viability.
In terms of the struggle of Aboriginal people forreal self-determination, self-sufficiency, economicindependence and future survival as a viableracial minority within the dominant Australiansociety, it is possible that Imparja may effectivelypromote the social, economic and cultural aims ofAboriginal people within the Imparja viewingarea whilst at the same time effectively pursuingthe important objective of economic viability in thelong term.
Indeed, the aim for and achievement of economicviability by Imparja in the foreseeable long term islikely, in turn, to assist and contribute towards thepromotion of Aboriginal social, economic andcultural aims. An economically viable, profitable,independent and strong Imparja Televisionenterprise, surviving without being dependentupon government hand-outs, will substantiallyfurther the significant social, economic andcultural aims of Aboriginal people.
Moreover, it is possible that real Aboriginal self-determination, empowerment and economicindependence will be achieved when Imparja
, -
becomes a viable business enterprise fully owned,operated and controlled by Aboriginal people.
The success of Imparja TV as a business venturewill be dependent upon an appropriateaccommodation and balance between thecommercial viability and the Aboriginal social andcultural objects of Imparja. The rightaccommodation and balance in these respects willlargely benefit Aboriginal social, cultural andeconomic development in the future.
6. SIGNIFICANT IMPARJAACHIEVEMENTS SINCE JANUARY 1988
Since 2 January 1988, when Imparja commencedtransmission and operations as an Aboriginalowned television enterprise, there have been anumber of achievements of significancespecifically to Aboriginal social, cultural andeconomic development throughout the CentralZone Remote Commercial Television Service Area,which encompasses the most part of the NorthernTerritory, South Australia, north western NewSouth Wales and some parts of Victoria.
Specifically, the operation and development ofImparja has already achieved the following social,economic and cultural benefits for Aboriginalpeople within the viewing area.
1. The existence of Imparja Television asan Aboriginal owned enterprise,managed by a predominantly AboriginalBoard of Directors, has empoweredAboriginal people especially in relation toAboriginal people managing a valuableenterprise or resource within themainstream private corporate sector.
2. The opportunity for a diverse group ofAboriginal people to come together fromaround the large Imparja viewing areato run Imparja Television as a privateenterprise with common corporate goals.
3. A policy of applying no charges to theCentral Australian Aboriginal MediaAssociation (CAAMA), the parent body,for all Aboriginal programs provided byCAAMA for transmission on ImparjaTelevision, often foregoing revenueraising opportunities which would helpthe commercial viability of Imparja.
4. Imparja Television provides tangibletraining and employment opportunitiesfor Aboriginal people. At present, some12 Aboriginal people out of a totalworkforce of 38, or 31.57%, are employedor involved in training programs at
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Imparja, where a variety ofmanagement, administrative, technical,engineering, accounting, computing,sales, journalist ar i professional mediapositions are on the establishment.
5. Imparja prc ides opportunities forAboriginal people to be trained in seniormanagement positions, such as therecent appointment by the Imparja Boardof a Senior Aboriginal Executive intraining.
6. There are positive public perceptions orbenefits to Aboriginal people arising fromthe running and control of a successfulmainstream television asset.
7. Strategic advantages accruing toAboriginal people in terms of Aboriginalcommunity leadership and responsibilityon such major community issues as theadvertising or non-advertising of alcoholon Imparja Television.
7. IMPARJA'S BATTLE TO ACHIEVEVIABILITY
In the case of the Imparja Television service(using the Central Zone footprint of the Aussat,now Optus, satellite network) it is still not possibleto obtain sufficient advertising income, with anaudience of only 120,000 viewers, to meet theoperating expenses. These expenses, for the1991/92 financial year, totalled almost A$8.0millions of which A$4.4 millions represented thecost of hiring a 30Watt transponder.
Fortunately for the Imparja company, themajority of the satellite hire charges have beenmet, to date, by Federal Government subsidies.Th company's advertising income of some A$3.6million / annum, or about A$30.0 / annum /potential viewer compares with the nationalaverage for Australian commercial TV services ofA$100.0 / annum / viewer. Although there wouldappear to be some scope for some threefoldincrease in advertising income the nature of theoutback lifestyle, with the lack of consumer choice,simpler needs for consumer goods, etc, mitigatesagainst much stronger advertiser support in thefuture and Imparja's views is that its target ofA$50.0 / annum / viewer is unlikely to be exceeded.
The advent of the Second Generation AustralianSatellite Network, with its higher powered andwider bandwidth transponders will lead to areduction in Imparja's transponder hire costsfrom about A$4.4 millions to about A$2.7 millions(approx 38%). Coupled with the aimed at 66%increase in advertising income (from A$3.6
millions to A$6.0 millions) the expected reductionin transponder charge could permit Imparja toachieve independence from Government subsidiesby 1994/95.
8. TECHNICAL FEATURES OF THEIMPARJA SERVICE
The major technical features of the Imparjasatellite delivered Remote Commercial TelevisionService (R.C.T.S.) are:-
(a) although generally referred to as satellitedelivered services the Australian RCTSare Community Reception Servicesrather than Direct Broadcasting Services(DBS). In Imparja's case less than 1000of its viewers depend on a TelevisionReceive Only (TVRO) satellite receptionfacility at their homes. The majority areserved by conventional VHF or UHFterrestrial transmissions from re-transmission installations with satellitereceive facilities (including B-MACdecoder and controlled access decryptionunit) connected to a low height and lowgain vertically or horizontally polarisedtransmitting antenna. There are over100 such re-transmission installationswithin the Imparja system, servingaudiences from as low as 10 householdsto the largest serving about 5000homes.(Fig 2.) The largest singleaudience of some 24,000 people at AliceSprings are served by a higher poweredterrestrial transmitting installationoperating on VHF Channel 9 located at ahigh point on the Mac Donnell Range andwith a studio to transmitter radio relaysystem
(b) the satellite uplink terminal adjoiningthe Alice Springs studio facility uses a 6.8metre diameter parabolic reflectorantenna, 300 Watts travelling wave tubeamplifier to deliver the 14 Ghz. uplinktransmission to the Optus satellite at the160° East orbital position.
(c) the Imparja transmission uses the PAL-B colour standard but the satellite uplink(and therefore the downlink) are alsoprocessed by B-MAC encoding whichenhances the satellite signal reception inareas of low power flux density. Theencoding unit also provides accesscontrol by encrypting which preventsunauthorised reception outside thedefined Imparja service area andprovides multiplexed channels for stereosound for the TV program and for other
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stereo and mono sound broadcastingservices within the satellite footprint. Anauxiliary data channel is also provided bythe B-MAC unit.
(d) the satellite transmission facilities at theImparja station in Alice Springs includevarious antennas, receivers, andrecording equipment to permit optimumuse of the Australian Satellite ProgramService transmissions of the Channel 7,9, 10, Network programs from NetworkHeadquarters stations in Sydney.
References:
1. Paltridge, Sam, 'Australian Remote AreaTelevision Services', CIRCIT PolicyResearch Paper, October 1990
2. Weston, Dion, 'Comments from a remotearea Service Provider', Proceedings fromCIRCIT Workshop Australian Satellites:Policy Options for the Future, March 1990
Telecommunications Applications for Education and Rural Development:A Comparison of the Australian Outback and Canadian North
Heather E. Hudson, Ph.D.Director, Telecommunications Management and Policy Program
McLaren School of BusinessUniversity of San Francisco
Abstract
This paper examines the use of telecommunications technology for education and ruraldevelopment in the Australian Outback and in Arctic and subArctic Canada. The papercompares technology and applications including distance education, cultural programming,and commercial uses. The paper then analyzes the political and economic factors whichappear to have influenced the development and utilization of telecommunicationstechnologies in the two remote regions. It concludes with lessons that may be important forother isolated and developing areas in the Asia/Pacific region.
1. Introduction
Canada and Australia both have domestic satellitesystems that provide communication services to remoteregions. In both countries, Aboriginal peoples make upa significant proportion of the remote population. Inboth countries, the benefits of satellites for Aboriginaldevelopment have also been widely touted, but theresults to date have been mixed.
1.1 The Geographical Context
Canada is a geographical and cultural anomaly. Eightyper cent of the population live within 100 miles of theU.S. border; these Canadians have long been exposed toU.S. television which can often be received over the air,and for nearly 30 years has been available on Canadiancable systems. The remaining 20 percent are scatteredover Canada's 10 million square kilometers and 7 timezones. Native people make up about 2.1 percent of theCanadian population, and include Indians, Metis (peopleof mixed white and Indian ancestry) and Inuit. In theNorthwest Territories (NWT), they make up 58.2percent of the population, and a significant percentagein the northern parts of seven provinces. Fifty threenative languages are spoken in Canada, belonging to 11language groups. Many are considered endangered(Stiles and Litwack, pp. 17-18).
In terms of size and population distribution, Australia issimilar to Canada. About 80 percent of Australia'spopulation live along its eastern and south-eastern coast.The rest are scattered in a few cities and large towns,and in isolated farms, sheep stations, and aboriginalsettlements. About 300,000 live in rural regions outsidethe coverage areas on the national broadcasting stationsand conventional telecommunications.
The 1986 census estimated that Aboriginal and TorresStrait Islanders make up about 1.5 percent (228,000) ofthe Australian population of 1.5 million. There areAboriginal communities in rural and urban areas, but
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only in remote Australia do Aborigines form a significantpart of the population. The Aboriginal population isextremely diverse, with at least 40 languages beingspoken in remote communities and another 100languages dying out with the older population (Molnar,1992, p.2). In addition, Torres Strait Islanders are adistinct group that consider themselves Melanesian, anddifferent from mainland
1.2 Media Use
In Canada and Australia, radio has been the major focusof Aboriginal broadcasting. In Canada, there are nowmore than 200 hundred native community radio stations.Eleven native communications organizations produceradio programs for regional distribution. In Australia,five regional Aboriginal media associations produce radioprograms in various languages that are transmittedthrough the ABC, local radio stations, and short wave,and via satellite.
Video has also be used for information, communitydevelopment, and cultural awareness. Aborigines quicklyadopted video recorders in rural communities, even asthey rejected print (Michaels, 1985). In the 1980'sAboriginal leaders saw access and control of the mediaas a means of addressing issues of cultural survival andmanagement of their own affairs. Yuendumu in CentralAustralia, which began video production in the early1980's has produced programs about dances, stories,bush food, arts and crafts, as well as a children'sprogram. Groups which have received training fromregional media associations and/or assistance from localresource people have also produced videos covering awide range of topics of local interest, and involvingsports teams, school classes, elders, health workers, etc.(Molnar, 1992).
2. Satellite Systems and their Origins
Canada became the first country to use a geostationarysatellite for domestic communications with the launch ofAnik A-1 in 1972, and its backup Anik A-2 in 1973. The
name Anik which means "brother" in Inuktitut, thelanguage of the Inuit or Eskimos, was chose to symbolizethe government's commitment to use satellites toimprove communications in the far north. However,several years passed before that promise was fulfilled.Canada is now using its fourth generation of satellites,the Anik D series.
The first generation of Aussat satellites was built byHughes Aircraft, and closely resembles the SBS satellitesand Canada's Anik C. Aussat 1 and 2 were launched in1985, with Aussat 3 (the original on ground spare)launched in August 1987. Each satellite has eleven 12-watt transponders and four 30-watt transponders, allusing Ku -hand frequencies.
With the advent of Anik came the first live televisiontransmissions to the far North. CBC networkprogramming, most of which originated in Toronto, wastransmitted to the Arctic on two transponders in Atlanticand Pacific time. Regional news from St. John's,Newfoundland, or Vancouver was inserted, but there wasno northern oriented or native language programming.
Television quickly became popular among native andnon native northerners alike. Indeed, the primarybeneficiary was likely the Hudson's Bay Company withgeneral stores (the modern version of the fur tradingnost) throughout the North. Early Hudson Bayadvertisements proclaimed: "Magic from the Sky!Television from Anik! Get your TV set at the Bay." Asearly as 1970 native leaders expressed concern about thelikely impacts of "southern" television and stated thatthere must be content about the North and in nativelanguages (Hudson, 1990).
3. Development of Aboriginal Satellite Services inCanada
3.1 A Community Development Approach
It took more than a decade for native people in thenorth to obtain the benefits promised by the governmentin the late 1960's. However, during that period, a solidfoundation for native broadcasting in the form ofcommunity radio and a development-oriented approachto media was built. One strong influence was theNational Film Board's Challenge for Change programwhich used film as a participatory communitydevelopment tool. The French concept of "animateur"or animator was applied to media projects from urbanvideo and cable access to remote community radio.
The Department of Communications funded a pilotproject in northern communications in the early 1970'swith a community development approach. The CBCsupported community radio through facilitating access toCBC radio transmitters. Pilot projects with federal andprovincial support explored a range of community mediamodels from local access to TV transmitters to portablevideo to community radio. Thus, when native peoplebegan to gain access to satellites, thecommunity-oriented developmental model was alreadywell in place.
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Although Canadian network television was beamed tothe North where it was both popular and largelyirrelevant, radio by satellite was treated quite differently.From the earliest days, the CBC Northern Service usedthe satellite to feed programming including nativelanguage content to isolated communities. The differencewas that CBC radio was already established in the North,with five radio stations across the Arctic. With theadvent of Anik, these local stations became regionalnetwork hubs and redistributed their signals out to thevillages in their region. Thus the communities receiveda mixture of national and regional content with asignificant native language component.
Under an innovative CBC community radio project, eachlocal community could contract with the CBC to producea limited amount of local programming which could besubstituted for network programs. In many cases theCBC trained local people and provided a small studioplaced in a building supplied by the community. Moststations were run by volunteers with operating expensescovered with locally raised funds.
3.2 Experimental Satellites: CTS and ANIK-B
Northern television took much longer to evolve, despitecontinued protests from native leaders about thenegative cultural and linguistic impact of CBC networktelevision. The opportunity to demonstrate an alternativeapproach came with the experimental CommunicationsTechnology Satellite (CTS) or Hermes satellite, followedclosely t.y Anik B.
Wawatay, a native communications organization,conducted a pilot project on Hermes that producednative language radio programming in Sioux Lookout,Ontario and delivered the programs via satellite toremote Indian communities with their own communityradio stations that rebroadcast the programs to theircommunities and originated programs themselves on arotating basis. Listeners were very enthusiastic about theregional programming, but Wawatay was unable tocontinue the project because the tariffs set by Telesatand Bell Canada were far beyond the means of theorganization. Eventually an agreement was reached withTV Ontario that enables Wawatay to piggyback its audiosignal on TVO's educational television transponder. Atthe community, the signal is split, with the TVcomponent being rebroadcast over a low powertransmitter and the radio signal delivered to thecommunity radio station where it is retransmitted.Inuit also used the experimental era to demonstrate and
implement new broadcasting services for the North. InuitTapirisat of Canada, the national Eskimo organization,carried out a pilot project on Anik B which linkedcommunities and produced programs. Anotherexperiment on CTS linked eight Inuit communities inArctic Quebec with an audio conferencing network. Thenetwork was used to broadcast two hours of Inuktitutlanguage programming every other night for two monthsin 1978.
The Inuit used the Anik B project as a springboard toestablish the Inuit Broadcasting Corporation (IBC) in1981, using time on the CBC Northern TelevisionService channels.
3.3 Canada's Northern Native BroadcastAccess Program
(NNBAP)
The Canadian government formulated a NorthernBroadcast Policy in 1982, stating that to maintain anddevelop native languages and cultures, northern nativepeople should receive relevant broadcast programming,including ct..aent they produced themselves. As part of
the policy, the government established the NorthernNative Broadcast Access Program (NNBAP) in April1982, a $40.3 million fund to be expended over fouryears to underwrite production costs for regional radio
and television in native languages. In 1988, the
government provided additional funding, of up to C$10million over four years for facilities and C$3.5 millionper year to operate them.
The primary objective of NNBAP was "To contribute tothe protection and enhancement of Native languages and
cultures in the North, and to facilitate northern nativeparticipation in activities and developments related tothe North" (NNBAP, p.1). It funds three activities:
production: radio: up to 20 hours per week, based on
costs of cs500 per hour; and television: up to 5 hoursper week, based on costs of C$8,500 per hour;
distribution: funds to help societies distribute programsin remote northern areas:media research and development: funds for audience
surveys to evaluate programming, conducted every three
years by independent consultants.
The NNBAP funds one communications organization in
each of 13 northern cultural and linguistic regions in the
northern parts of the provinces and in the Yukon andNWT. Together, the societies serve 224,100 CanadianAboriginal people (about 30 percent of the totalaboriginal population; programming produced by the
societies reaches approximately 320 communities(NNBAP, p. 1). Six societies produce radio only; twoproduce television only, and five produce both. NNBAP
is staffed by a program chief and four regional
coordinators.
Several of the societies use the Anik satellite system forprogram distribution and net- corking. IBC produces fivehours of television per week, with a production center inIqaluit (Frobisher Bay) and 3 smaller production units
across Arctic. It provides Inuktitut TV programming to30,000 Inuit in 48 communities in the NWT, ArcticQuebec and Labrador. Its programming is a mixture of
news and current affairs, cultural, educational andentertainment programming.
Wawatay produces 21 hours per week of native languageradio programming and 3 hours of television distributedto 20,000 Cree and Ojihway people in northern Ontario.
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Building on its capabilities, but with separate funding,
Wawatay has started audio conferencing network to
enable students to complete high school. Wawatay
distributes 38 hours per week of distance education
programs in conjunction with Ontario government.
A new satellite network has been formed to distribute
programs produced by several native organizations, as
well as educational programs. TVNC (TV Northern
Canada) began distributing 38 hours per week of
programming in January 1992; half is produced by native
communications organizations and half is educationalprogramming. The goal is to reach 100,000 people across
the North with broadcasts in English, seven Indian
languages and three Inuit dialects. TVNC will also sell
commercial time (its license allows it to sell up to 12
minutes per hour) and lease production facilities, but
revenue is expected to be low.
4. Development of Aborigink., Satellite Services in
Australia
4.1 Origins of Remote Area Television Service
A historical analysis of the positions and interactions of
the major broadcasting players concerning commercial
television options for delivery by Aussat are complex and
beyond the scope of this paper. I However, the key
elements are important to a comparison of the
Australian and Canadian contexts. While AUSSAT
planned the technical parameters of the satellite system,
including shaping of footprints for service to remote
areas, the Australian Broadcasting Tribunal conducted
an inquiry in 1984 into the regulation of the Satellite
Program Services during which it expressed concern
about concentration and control of the commercial
broadcasting industry.
A parallel review of localism policy by the Department
of Communications concluded that localism was
'paramount' as a structural element in the continuation
of localism (Paltridge, 1990, pp. 11-12). Having decided
that there should be a commercial equivalent to the
ABC's proposed Outback service-, 2 the Hawke
government stated that "the Tribunal should reject any
application ... which clearly exacerbated concentration of
ownership or control in the Service Area concerned"
(Paltridge, 1990, p. 13). It also recognized that the
services would be uneconomic, but stated that there
would be no federal subsidy, and encouraged
"entrepreneurs that wish to take a strategic position in
the broadcast system" (Paltridge, 1990, p. 13).
Faced with demands from rural Australians for access to
more channels than the ABC, the Australian
Broadcasting Tribunal decided to award a commercial
franchise in each of the four regions where the ABC was
to be distributed via a high powered transponder direct
to viewers. The three RCTS nroviders are Golden West
Network (GWN) in Western Australia, Imparja serving
the Northern Territory and parts of South Australia, and
Queensland Satellite Television (QSTV) in the northeast.
The most interesting case was the Northern Territory.
An aboriginal communications organization called
CAAMA (Central Australian Aboriginal MediaAssociation) had started a radio station in Alice Springs
to broadcast programming in aboriginal languages and to
assist aboriginal people scattered in small settlementsand on the land throughout the vast territory to obtain
improved communication services.
The specifications for the RCTS licenses included the
following:
a. licensees shall provide commercial television services
h. the areas served shall be those parts of each of theregions ... which are not included in the Service Areas ofexisting commercial television stations or commercial
television translator stations;
c. the purpose of the licenses shall be to provide servicesappropriate to the needs of the residents of the areasreferred to in (b) above;
d. licensees shall provide services utilizing 30 watttransponders in zonal beams .... (ABT, 1986, p. xiii)
These specifications are virtually impossible in thecentral region. Specifications a and c. may not beattainable: i.e. the service is commercial, but to serveresidents' needs. Not only is the population too small to
be a viable market, but a significant proportion ofresidents are Aborigines many of whose needs may notbe served by commercial programming.
In addition, the requirement to use a 30 watttransponder (to be HACBSS transmission standard)resulted in transponder charges that were 180 percenthigher than if a 12 watt transponder could have beenused, which would have been adequate for communityreception, an option which is actually used to reach an
estimated 92,000 of the total 98,000 Imparja viewers(data derived from Paltridge, 1990).
4.2 The Imparja Network
Despite their concerns about the possibility of meeting
these requirements, CAAMA applied for the NorthernTerritory television license, with support from Australian
public broadcasters, in competition with a private
consortium from Darwin. The aboriginal group's
proposal for a television system called Imparja wasaccepted, and the decision to award Imparja the license
was upheld on appeal from the Darwin applicant.
Imparja estimated that 38 percent of the population in
the service region was Aboriginal and stated that there
are at least 2(1 aboriginal languages spoken by at least
500 people in the central region, and that the Aboriginal
population was generally more isolated and
disadvantaged in terms of communications than the non-aboriginal population of the region (ABT. p. 7),Imparjaproposed to produce 3.4 hours or 6 percent of programtime per week, and to obtain a further 10.6 hours or 19
percent IR t regional and independent sources, for a
total of 25 percent of regionally produced programs and
programs selected for rele%ance and interest to theregion (ART. p. 138 ). promised to nroduce news
programs in three aboriginal languages in addition toEnglish, pointing out that B-MAC channels could carryatkiitional signals and could direct signals to specificreceivers (ABT p. 157).
Despite its reservations about Imparja's financialviability, ABT awarded the license to Imparja, based on
its "innovative proposal to provide a commercialtelevision service sensitive to the diverse needs andinterests in Central Australia" (ABT, p. 151). Imparja,however, has limited resources for production andoperation of the network. While it has received funding
from various government sources, there is no ongoing
government program for support of aboriginalcommunications, as has been established for nativecommunications in Canada.
4.3 Community Access using BRACS
In response to concerns about the potential impact ofsatellite-delivered television, the Australian governmentestablished a Task Force on Aboriginal Broadcasting andCommunications, which published a report entitled Outof the Silent Land in 1984. The report'srecommendations included:
the coordinated introduction of satellite radio andtelevision reception and rebroadcasting facilities to
Aboriginal and Torres Strait Islander (A&TSI)communities;
the provision of facilities to enable A&TSI people tocontrol programs broadcast in their own communities:
the encouragement of A&TSI broadcasting in radioand television production (Wilmot quoted in Molnar,1992, p. 11).
The Broadcasting for Remote Aboriginal CommunitiesScheme (BRACS) was introduced in response to theserecommendations. BRACS is administered by theAboriginal and Torres Strait Islander Commission(ATSIC), the successor the Department of AboriginalAffairs. BRACS equipment combines satellite reception,local retransmission, and simple audio and videoproduction equipment. Communities can receive all ABCprogramming and one remote commercial channel; theycan produce their own programs and substitute them fornetwork programming.
As Molnar points out, the significance of BRACS is thathas the potential to give Aboriginal communities accessto. and control over, their own media and information ata local level (Molnar. 1992, p. 12). To qualify for aBRACS unit, remote communities must meet thefollowing conditions:
population of at least 200 people:80 percent or more of the community to he Aboriginal
or Torres Strait Islander;community has not been provided with any terrestrial
ABC or commercial television service (Molnar, 1992, p.13).
656
The BRAGS package, which costs about $A45,000installed, consists of an AUSSAT receiver and antenna.decoder, transmitter with rarwr of 3 to 5 km., and simple
radio and TV equipment including microphone, audiocassette recorder, two video cassette recorders, TVmonitor, video camera, speakers, and control units. ByAugust 1991, 82 BRAGS units had been installed(Molnar, 1992, p. 14).
4.4 Compressed Video: The Tanami Project
The Tanami network is a digital compressed videosatellite network linking four aboriginal communities incentral Australia, with links to Alice Springs and Darwinand other non-Aboriginal networks. The cost of theequipment was more than $A2 million; however,transmission costs via AUSSAT are minimized throughuse of compressed video, typically transmitted at 128kilobits per second. The communities have used thenetwork for personal communications among elders andother community members, meetings among thecommunities, and other informal exchanges.
The equipment was installed on a turnkey basis, aftersolicitation of competitive bids. The communities plan tocontribute $350,000 themselves, and raise the remainingfunds from user agreements (Toyne, 1992).To recovercosts, they plan to contract with government agenciesand educational organizations for interactiveconferencing and program delivery for a variety ofapplications including adult education, community-basedsecondary courses, practical training, in service supportfor agency employees, interviews with social workers andother social service providers, etc. As of mid 1992,eleven government agencies had subscribed (Catlin,1992, p.1).
There is growing recognition that telecommunicationscan be a cost effective means of providing services toremote communities: the alternative is infrequent visitsfrom regional centers, where staff typically spend severaltimes as many hours traveling to and from thecommunities as they uo on ite. HS is true with mostapplications, videoconferencing is not likely to substitutecompletely for travel, but to supplement infrequenttravel, and to bring opportunities to communities whichhave been too remote to receive many services.
S. Comparative Analysis
5.1 Policy follow:ng Technology
Both Anik and Aussat were justified on the basis ofproviding services to remote areas. In both cases, theneed for reliable communications was clear, but thedemand was not great enough to cover costs.
In Canada, it took more than a decade for Aboriginalpeople to gain access to the ANIK system to distributeAboriginal programming and offer other communicationsservices. The AUSSAT system is less than a decade old,so that comparisons may not seem apt. However, ananalysis of similarities and differences to Aboriginalaccess and broadcastina policy in the two countries can
657
help to explain the type and extent of Aboriginal use tnesatellite systems for broadcasting and educationalservices.
5.2. The Government's Response
The government's response in the two countries wasquite different. The Canadian government focusedexclusively on the CBC for several years, with projects toextend service to communities without television andradio. The CBC began to increase its amount of nativelanguage programming.
However, in parallel with extension of services, the CBCbegan to encourage community access to radio (andoccasionally) television transmitters. The Department ofCommunications (DOC) also supported projects thattook a community development approach with fieldworkers, training, and community responsibility forfacilities.
The Canadian access model appears similar to theAustralian BRACS approach. However, in Canada, theterms of participation were more extensive, with the goalof ensuring community participation and responsibility.For example, in Canada:the community had to set up an incorporated nonprofit organization to do local broadcasting;
the community had to provide space for equipmentand people for training;
the community had to make a formal request andnegotiate with the CBC in order to reach an agreementto preempt CBC programs.
Canadian Aboriginal broadcasters were also able to takeadvantage of opportunities to gain first hand experiencewith satellite network production and operation throughprojects on CTS (Hermes) and Anik B. In addition tooffering learning opportunities, these projects providedpolitical visibility for Aboriginal broadcasting. The Inuitwere particularly effective in using this visibility toestablish IBC.
5.3 Financial Constraints
Transponder Lease Charges
It appears that the RCTS services are not viable, evenwith government subsidies. The total audience in areaswithout commercial services is estimated at about500,000 of which 98,000 are served by Imparja throughapproximate!). 1,000 direct reception sites and 83retransmission sites. The biggest single expense is the 30watt transponder, for which AUSSAT charges more than$A4 million per year.
The original charge per transponder was estimated to he$A2.7 million, rising by 4 percent per year. In factAUSSAT has increased the charges by 10 percent. Hadthe ABT known that the increases would ho 10 percent,"it court hardly have avoided the conclusion that the
project would have been rendered unviable" (Quoted inPaltridge, 1990, p. 17).
Government Licensing and Funding
There are two critical differences between governmentpolicies on Aboriginal satellite broadcasting in Canadaand Australia -- both of which relate to financing. First,Canadian regulators did not make commercial viabilitya condition of licensing for Aboriginal broadcasters.Second, the Canadian government established a program(the NNBAP) which funds production and distributioncosts of native language programming.
Funding problems seem to be the heart of difficulties indeveloping and sustaining Aboriginal programming inAustralia. Imparja faces a commercial imperative whichis the most crucial difference between Australian andCanadian aboriginal media policies, and I believedifferentiates the Australian approach from othercountries. In Alaska, native programming is carried overpublic radio stations that are supported by theCorporation for Public Broadcasting and other nationaland state funds for programming. Saame (Lap) programsin northern Scandinavia are also supported withgovernment funds and distributed over state fundednetworks. Community media take a variety of forms indifferent countries -- including support from governmentagencies, foundations, churches, community fund raising.local advertising, or some combination of these. Butwithout exception to my knowledge, network distributionof aboriginal programming is not expected to becommercially viable.
53 The Third World Dilemma
Imparja has found itself facing a classic dilemma sharedby many Third World broadcasters who see their role asserving the information and cultural needs of theirpeople, but who lack the resources to meet these needs.They find themselves turning to inexpensive importedprograms that fill air time. Imparja has an addedincentive to seek out popular entertainment: its waslicensed to provide a commercial service that viewers payto receive. Caucasian and probably some Aboriginalviewers expect to see a programming mix similar to thatoffered on commercial channels in urban centers.
5.4 Opportunities for Diversifying Funding SourcpcIn both countries there is a need to build a diversifiedfunding base. While government support continues inCanada, native organizations face a danger of becomingtoo dependent on government funding. In fact, nativecommunications funding has been cut substantially in
recent years, forcing native newspapers to seek moreadvertising and to raise their subscription rates.Diversified funding for broadcasting will also be needed.
In Australia, the Tanami network may become asuccessful model for diversifying funding without giving
up local control, through its contracts with governmentagencies for network access and services. In Canada,Wawatay has introduced distance education as anadditional service and source of funding support.
658
Canada's TVNC faces problems similar to Imparja, as itattempts to generate revenue through a combination ofeducational programming and advertising in addition tonative programming. However, a critical difference isthat the native broadcasters using TVNC have fundingfor distribution from NNBAP, whereas in Australia,Imparja must continually negotiate with governmentagencies to secure funding to pay for its transponderlease charges.
Innovative models
Aboriginal organizations in both countries havedeveloped innovative approaches to programming andfund-raising that could be more widely used, and perhapsbecome models for Aboriginal media services in othercountries. They include:
use of programs from community sources (BRACS,Yuendumu);
use of programs produced by government agencies andother organizations (Tanami);
development of inexpensive Aboriginal programs suchas children's programs (IBC, Wawatay);
leasing of transponder time to other users for distanrp
education, training, etc.
selling programs to the other networks (CAAMA);
producing programs under contract for governmentdepartments (CAAMA);
using spare satellite capacity for radio (Wawatay);
leasing blocks of time on another channel to distributeprograms (IBC leasing from CBC)
selling time on the network (Imparja, TVNC).
6. Conclusion
Each new technology that comes along, from satellites tooptical fiber to multi media, is accompanied by claims
of myriad potential benefits that can be derived fromthem. M I pointed out in Communication Satellites(19901, the operative word is can. Whether they will heused for developmental purposes depends on factorsother than the technology, which are largely political and
economic, rather than cultural.
In Canada, the continued federal support for nativecommunications through the NNBAP or its successormay be the single most important factor for thesustainahility of native broadcasting. However, several
native broadcasters have built strong politicalconstituencies and are attempting to diversify their
sources of funding.
In Australia, the commercial structure of the RCTSnetworks needs to be reassessed. It appears that thesenetworks cannot be viable without an infusion ofgovernment funding, and that their attempts to be self-supporting force them to violate their commitment tomeeting the needs of Aboriginal people.
Another unknown factor is how Optus will positionAussat in the new duopoly environment. At first glance,Optus would appear to have the incentive to marketAussat capacity aggressively, giving users theopportunityto take advantage of flexible satellite capacity tointerconnect any number of sites at affordable prices.Yet if Optus regards Aussat as a monopoly provider ofbroadcast services and incidental to their competitivestrategy, Aussat prices may not decline significantly.Remote broadcasting may collapse under the burden oftransponders costing $A4 million or more per year. Thuswhether Optus regards Aussat as an asset or an albatrosscould have a major impact on the viability of Aboriginalsatellite services in Outback Australia.
1. For a detailed analysis of the origins of Australianrural satellite services, see Paltridge, 1990.
2. This service was called HACBSS for Homestead andCommunity Broadcasting Service.
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Atherton, Tony. "Canada's Third National Network?"Ottawa Citizen, June 23, 1991, p. DI.
Australian Broadcasting Tribunal. Remote CommercialTelevision Services: Fourth Report Central Region.Canberra: Australian Government Publishing Service,1986.
Catlin, Jamie. "New Telecommunication Developments:The Tanami Network." Melbourne: CIRCIT Newsletter,Vol. 4, No. 4, June 1992.
Hudson, Heather E. Communication Satellites: TheirDevelopment and Impact. New York: Free Press, 1990.
Hudson, Heather E. When Telephones Reach theVillage. Norwood, NJ: Ablex, 1984.
Imparja. "Imparja Television Program Guide." AliceSprings, May/June 1992.
Michaels, Eric. "New Technologies in the Outback andtheir Implications." Media Information Australia, No. 38,November 1985.
Michaels, Eric. The Aboriginal Invention of Television inCentral Australia, 1982-1986. Canberra: AustralianInstitute of Aboriginal Studies, 1986.
Molnar, Helen. "Remote Aboriginal CommunityBroadcasting in Australia: Developments and Priorities."(Unpublished, 1992)
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"Northern Native Broadcast Access Program." Ottawa:Native Citizens Directorate, Department of Secretary ofState, April 1982.
Paltridge, Sam. Australian Remote Area TelevisionServices. Melbourne: CIRCIT Policy Research Paper No.8, October 1990.
Paltridge, Sam. Australian Satellites: Promise,
Performance and the Next Generation. Melbourne:CIRCIT Policy Research Paper No. 1, December 1989.
Parker, Edwin B. and Heather E. Hudson. ElectronicByways: State Policies for Rural Development throughTelecommunications. Boulder, CO: Westview, 1992.
Parker, Edwin B., Heather E. Hudson, Don A. Dillman,
and Andrew D. Roscoe. Rural America in theInformation Age: Telecommunications Policy for RuralDevelopment. The Aspen Institute and University Pressof America, Lanham, MD, 1989.
Stiles, J. Mark and William Litwack. Native Broadcastingin the North of Canada: A New and Potent Force.Ottawa: Canadian Commission for UNESCO, 1986.
Tanami Network Pty Ltd. "The Tanami Network:Submission to the Aboriginal and Torres Strait IslandersCommission," Yuendumu, Australia, March 1992.
Toyne, Peter. "The Tanami Network." Paper presentedat the "Service Delivery and Communications in the1990's" Conference, Darwin, March 17-19, 1992.
U.S. Congress, Office of Technology Assessment. Linkingfor Learning: A New Course for Education, OTA-SET-430. Washington, DC: Government Printing Office,
November 1989.
U.S. Congress, Office of Technology Assessment. RuralAmerica at the Crossroads: Networking for the FutureOTA-TCT-471. U.S. Government Printing Office,Washington DC, April 1991.
U.S. Congress, House of Representatives. Bringing theInformation Age to Rural America. Hearings before theGovernment Information, Justice, and AgricultureSubcommittee of the Committee on GovernmentOperations. Washington, DC: U.S. Government PrintingOffice, 1991.
Wilmot, Eric, Chairman. Out of the Silent Land. Reportof the Task Force on Aboriginal and Islander
Broadcasting and Communication. Canberra: AustralianGovernment Publishing Service, 1984.
THE ROLE OF GLOBALSTAR, A SATELLITE-BASEDPERSONAL COMMUNICATIONS SYSTEM,
IN THE WIRELESS REVOLUTION
Robert A. WiedemanVice President, Engineering
Loral Aerospace Corporation3925 Fabian Way
Palo Alto, California 94303(415) 852-6201
Abstract
Loral Aerospace Corporation along with Qualcomm Inc. have developed a satellite systemwhich offers global mobile voice an data services to and from hand-held and mobile userterminals with omni-directional antennas. By combining the use of low-earth orbit (LEO)satellites with existing terrestrial communications systems and innovative, highly efficientspread spectrum techniques, the GLOBALSTAR system provides users with low-cost,reliable communications throughout the world. The GLOBALSTAR system is designed tooperate as a complement to existing local, long-distance, public, private and specializedtelecommunications networks. GLOBALSTAR is not a bypass network but rather asystem which will fulfill currently unmet telecommunications needs. This paper describesthe present status and other aspects of the GLOBALSTAR system.
WHAT ARE THE WINNINGTECHNOLOGICAL STRATEGIESAS THE WORLD MOVESTOWARDS WIRELESS PERSONALCOMMUNICATIONS?
A new era in telecommunications isbeginning. The emergence of digitalcellular telephones will soon usher inaffordable, lightweight wirelesscommunications. These new technologicalwonders wi;: revolutionize the market ofmobile personal communications. Thisnew market ultimately will realize apersonal communications vision -- wherean untethered user will usecommunications devices for business andpersonal use in supplement to, and at timesbypass or possibly replace, the wirelinehandset.
Success for service providers depends onhow they respond to the forces that affectthe industry. The forces of technology,markets and services, competition andmanagement shape the future. Much of thedebate over the so-called "personalcommunications services" centers ontechnology issues. However, the users ofthese technologies do not czire with what orhow the services are deiivred. On theother hand, the issues that the users areconcerned with are: quality, value,services, and seamless expansion ofgeographic coverage.
Technology tradeoffs and operatingeconomies require operators to maketradeoffs and choose systems and coveragewhich support their largest customers'needs and expectations. Until now, theoperators have been selecting technologieswhich can help make the quality of servicebetter than "snap, crackle and drop" andhave been trying to solve issues of cellcosts. capital investment for expansion, andhow to lower operating expenses.
Cellular service in the U.S. and Europe areon the verge of introducing the 2ndgeneration Digital Technology and arebeginning to investigate the futureexpansion that this technology will allow.The new questions that will now be askedare:
660
how can the low population densityareas be serviced?
how and at what pace should PCS bedeployed?
what technologies should be used tothe introduction of digital voice anddata?
what new services such as enhancedmessaging, ubiquitous roaming andposition location will be iequired?
WHAT ARE PERSONALCOMMUNICATIONS SERVICES?
Life in the world of personalcommunications is not simple anymore.Not only is there cellular, paging andspecialized mobile radio, but now CT-2,CT-3, DECT and something looselydefined as Personal CommunicationServices (PCS). Managers of systems suchas cellular operations recognize the need toshift from the build mode of the industryto a re-engineering mode that is sensitiveto a wider range of customer expectations.As operators scramble to meet thesechallenges, it is possible to becomeoverwhelmed by the possibilities.
There are, however, four broad marketdevelopment directions. These are cellularpremium service, digital high-end portablecellular, microcellular portable personalcommunications services and mass marketpersonal communications services.
Cellular Premium Services
Cellular Premium Service is characterizedby present-day analog cellular servicesoperating at 450 MHz, 800 MHz or 900MHz, providing vehicular and portablehandheld voice and voice paging.Competition in the U.S. and elsewhere isgenerally by duopolies or monopolies withprices higher than wireline service.Primary users are upper income andbusiness users.
Digital High End Portable
Digital cellular services reflect technicaladvances beyond analog premium services.These services can satisfy the enormousdemand for cellular service and resolve thecapacity problems of the first generationsystems. In Europe, a standardized systemcalled Group Speciale Mobile (GSM) hasbeen developed to increase capacity for thelimited NMT-450 and TACS-900 systems.GSM is developed to provide digital voice,ubiquitous roaming in Europe, and newdata services.
661
Meanwhile, in the USA, the developmentof digital systems using the 800 MHz bandis proceeding in an unregulated manner.Early standardization schemes endorsed bythe Cellular Telephone IndustryAssociation (CTIA) were based on TDMAtechnology and are now being challengedby operators seeking larger capacityincreases. Recent validation trials of CodeDivision Multiple Access (CDMA) andspread spectrum technologies demonstrateits viability and large capacity increaseover analog and TDMA. With such digitalcellular systems, however, the marketcharacteristics of monopoly or duopolyservice providers, high price for servicesand a market of primarily business usersremain the same as for Cellular Premiumservices.
Micro-cellular PersonalCommunications
A new personal communications service israpidly approaching based in part on theevolution of cellular telephone productsand services but using new frequencies (1.7to 2.3 GHz) and technologies (CDMA).These systems, encompassed by the PCSconcept, use predominantly microcellstructures and wireless PBX technologies.User equipment is expected to be a verysmall, lightweight communicator typedevice. Provisions of digital voice withadvanced calling features, such asmessaging, data transmission and othernew concepts are expected.
While some of the current cellularproviders undoubtedly will be providers ofPCS, the competition will mostly be multi-provider in nature. The price for servicesis expected to be high initially, but willgradually become less than the price ofcellular service. The marketcharacteristics are broader than cellularand are expected to include the residentialmarket. PCS is expected to be a factor inproviding competition to the wirelinetelecommunications infrastructure.
Mass-market PersonalCommunications
The future mass market focus for personalcommunications will be on low costequipment and very inexpensive prices forservices. Technologies will be outgrowthsof microcellular PCS and wireless PBXbased upon wireless access with digitalfiber and/or satellite bypass providing longhaul capabilities.
User devices are expected to be very smallcredit card phones with personalnumbering, using intelligent networksproviding ubiquitous seamlesscommunications.
THE NEED FOR AN EXPANSIONROUTE STRATEGY
As the mass markets are approached withpredicted penetrations as high as 25percent, voice communications willmigrate to wireless. This will result in anew playing field with no guarantees forexisting players. Rapid transition (withinthe next 5 years) to digital technologies,GSM in Europe, CDMA in the USA andelsewhere, will offer feature-rich networkswhich will require innovative systems tokeep up with customer desires.
As these new technologies are deployed,the ability to conn:ct service areas, thusproviding ubiquitous wide area services,and to interconnect these new technologiesto each other and to previous technologieswill be very important. The successfuloperators will alter sales channels andadopt operationally efficient systems whichwill generate more value than previouspremium services.
Loral Qualcomm Satellite Services(LQSS), a partnership of Loral AerospaceCorporation and Qualcomm, Inc, isdeveloping GLOBALSTAR technologiesand the infra-structure that will allowoperators to efficiently extend currentcellular premium services and digitalcellular services to cover areas which arenot able to be economically covered, and tointroduce ubiquitous micro-cellular PCSsystems when they come on line.GLOBALSTAR provides the operator withnew sales channels and new, excitingservices such as international roaming,rural and wilderness connectivity, positionlocation, maritime roaming, and digitalservices.
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THE ROLE OF MOBILESATELLITE SERVICES INPERSONAL COMMUNICATIONS
Mobile Satellite Service (MSS) is nostranger to the mobile communicationscommunity. However, the systems thathave been developed with synchronousorbit satellite technologies which wereborrowed from the fixed satellite service(FSS). Early on, the maritime mobile usercommunity required service, and thus the65-member nation consortium calledINMARSAT was created.
Originally developed for the maritimemarket, INMARSAT today is authorized toprovide maritime and aeronauticalservices. In the future, INMARSATundoubtedly will be authorized to provideland mobile services but not on anexclusive basis. INMARSAT will berequired to share frequencies with othersystem operators such as GLOBALSTAR.
Current MSS systems (existing andplanned) have been developed usinggeosynchronous satellite designs and assuch, except for INMARSAT, provide onlyregional services. Technical limitations ofsatellite power and antenna size limits theuse of the system to user equipment withdirectional antennas which must bepointed, at all times, toward the satellite.
New satellite designs in low-earth orbit,such as GLOBALSTAR, can supplyservices to low power user equipment withunobtrusive, small, omni-directionalantennas, facilitating handheld units andconsumer automobile applications. Thisallows the use of satellite communicationsby existing cellular telephone subscribersand at the same time facilitates an easytransition to PCS.
The difference in signal path length forcommunications between a low-earth orbitsatellite system and a geosynchronoussatellite is a major contributor to theability of LEO satellites to be a naturalcomponent of PCS. A geosynchronoussatellite is positioned at a fixed distancefrom the earth of 22,500 miles (36,000km) while low earth orbit systems such asGLOBALSTAR operate at an altitude ofless than 900 miles. The difference in pathloss is 22 to 28 dB (over 100 timPs less
power is received at the ground usingcomparable antenna diameters and satelliteRF power). Certainly, some compensationfor this path loss may be made in thegeosynchronous satellite system but notwithout employment of risk laden,er.nrmous, deployable satellite antennas.Geosynchronous systems will neverapproach the technological advantages oflow-earth orbit systems.
Low-earth orbit systems have the ability tocover the entire world rather than aportion of the world with a constellation ofsatellites. This makes it possible toamortize the cost of a single satellitesystem over the world market. Finally,using new GLOBALSTAR digitaltechnologies for CDMA modulation andvocoders developed by Qualcomm, Inc.,with user prices near cellular, the spectrummay be shared between several satellitesystems providing multiple access formillions of users worldwide. Thiscompetition and worldwide deploymentwill allow service prices near cellular.
THE GLOBALSTAR LOW EARTHORBIT SATELLITE SYSTEMSOLVES THE TERRESTRIALUBIQUITOUS COVERAGEPROBLEM
Terrestrial systems, such as cellular andPCS, can only expand their coverage areasto the extent that it is cost effective toinvest capital in cells, MTSOs andtransmission equipment. These limitationsforce operators to consider carefully thetechnology that will be used to build out awireless network, the capability of thatnetwork to be competitive and profitable,and the value that can be generated.Wireless operators must focus on valuewhen developing their company strategy.For instance, a cellular operator's capitalto revenue ratio is generally between 0.8and 1.0 today.1 Maintaining this level ofefficiency requires keeping capitalinvestment for a cell to within the$200,000 to $500,000 range. Withterrestrial coverage of only 10 to 20 milesfor a cell, the likelihood of eventualseamless ubiquitous coverage is low inmost rural areas.
I"Growing the Wireless Segment,"Cellular Business Volume 9, No. 13,December 1991.
663
GLOBALSTAR, with a single $350,000gateway in the operator's market allowsthe operator to offer services in his entirearea, thereby eliminating the great capitalexpense required to provide ubiquitousterrestrial cell coverage. In addition, theoperator can offer new services such aspaging, messaging, position location anddigital data while maintaining his existingcustomer base since the GLOBALSTARgateway equipment allowing satellitecommunication to users is added to theoperator's existing equipment and usesdifferent frequencies for transmission.
Dual mode mobile phones compatible withGLOBALSTAR satellites and either analogor digital cellular terrestrial services allowubiquitous roaming between localterrestrial and the wide area satellitecoverage. Switching between these systemsis accomplished without the user knowing,just as he is handed off between terrestrialcells today.
Microcellular PCS systems, expected todevelop in high density areas, will requirethe wide area coverage afforded by theGLOBALSTAR system even more than theterrestrial cellular operators.
In addition to the wide area coverage,which will bring additional customers intothe cellular and PCS market, the satellitesystem brings new services. Wide arearoaming is only one example. Byexchanging databases of users, withvalidation provided by GLOBALSTAR,operators can facilitate roaming of theirusers, not only from the owner's system toanother owner's system, but in betweensystems as well. Furthermore,GLOBALSTAR allows roaming fromcellular to PCS and vice versa.International roaming is facilitated as wellby exchanging user databases allowingusers to make or receive calls anywhere.Numerous other advantages ofGLOBALSTAR are too lengthy toenumerate here, but all are made possibleby the addition of a single, low-costgateway in the operator's area.
WB AT IS NEEDED F 0 RGLOBALSTAR SA TE LL IT ESERVICES TO BE LAUNCHEDAND PROLIFERATE
The user equipment and gatewaytechnologies have been reduced to chipsets. These have been developed byQualcomm, Inc., and have been tested andvalidated fo- the digital cellular telephoneindustry in the USA. Similar digitaltechnologies using TDMA have beendeveloped in Europe for GSM, much ofwhich will be usable through theGLOBALSTAR satellite. The satellitetechnologies are well within the state of theart. GLOBALSTAR uses tried and provensatellite repeater technologies which havebeen in production for over 20 years.
The World Administrative RadioConference of 1992 (WARC-92) has takenup the issue of satellite communicationsbelow 3 GHz and frequencies have beenallocated along with developing proceduresfor coordinating LEO MSS systems. Theonly development now required is thelicensing of the GLOBALSTAR system.This licensing is entering the final phaseand will be completed in 1993. The U.S.government has indicated it plans to licenseall applicants.
Although PCS developments are not yetmature, services to the premium urbancellular customers who wish wide area andinternational roaming and services in ruralareas can be established now. The newlyallocated MSS bands are mostly unusedworldwide and are available worldwide.
Current proposals, by the USA and others,allocate these bands (1610-1626.5 MHz and2483.5-2500 MHz) to MSS as well asretaining the RDSS allocation. Technicalrules are in progress which will allow theextension If existing and planned cellularsystems and prepare for the future widearea extension of microcellular PCS.
SUMMARY
The LEO satellite systems, such asGLOBALSTAR, offer ubiquitous widearea coverage, services to low powerhandheld or vehicle mounted terminalswhich cannot be economically provided byGEO satellite systems presently under
construction or planned. The muchshorter signal path length gives betterquality, lower cost, higher capacity, anddelay free transmission of communicationsfor the mobile telephone user.GLOBALSTAR which utilizes CDMA andspread spectrum modulation techniquesbrings new services and easy access tospectrum for communications providers.LQSS will be offering wholesale capacityon demand to any and all providers ofmobile services by adding a singleGLOBALSTAR gateway to their existingterrestrial system. This enables providersto serve new customers that are now noteconomically practical to serve.
LEO systems are more robust, providingcapacity even when a satellite fails, due tothe rotation of the constellation. GEOsystems, by contract, suffer entire regionalsystem loss when an operational satellitefails.
LEO satellites are here to stay. Theycapitalize on digital technology andadvances in the cellular industry such asthe recently completed validation of theCDMA cellular system by Qualcomm, Inc.in San Diego, California. The economicsthey offer along with new services andubiquitous wide area coverage make LEOsystems a viable new and excitingtechnology.
664 L.;
TAOS, a new low-cost mobile-user LEO satellite networkfor positioning and messaging
J.J.BlochAerospatiale, Espace et Defense
Cannes, France
1. ABSTRACT
This paper describes briefly the missions of the LEO-MSS network, TAOS.The conclusions of a study on the selection of a low-cost satellite platform are given.
2. MISSIONS
The French National Center for Space Studies (CNES)has been involved for 20 years in space-basednetworks for position-report and data collection, withsuch systems as ARGOS or COSPAS-SARSAT.This experience together with the recent availability ofnew MSS bands at VHF/UHF allocated at WARC-92 andwith the positive conclusions of market surveys haveprompted CNES to set up a new satellite -basedworldwide network ,called TAOS, (see reference 1) toachieve the following missions:-Position report of a mobile towards a base station,initiated by either end (examples of potential userinclude car rental companies, the trucking industry,the railways transport)-transmission of short digital messages with aresponse time of up to one hour (voice and real timemessage exchangeare excluded)The initial studies have taken into account somefundamental constraints: low-cost of the mobile userterminal (about $500), low-cost satellites andlaunches, high traffic capacity.The initial market areas envisaged include NorthAmerica, South-East Asia and Europe; the systemshould offer capacity for around 500 000 terminals ineach of these areas.
3. NETWORK ARCHITECTURE
The mission specifications described above have led tothe selection of a constellation (see figure 2) of 5
small satellites, each on a low circular orbit of 1300km altitude with an inclination of 57°.Five orbitalplanes are at 72° from each other. The constellation iscontrolled,i.e. the variation of the relative position ofthe satellites and their respective orbital planes ismaintained within a limited angular range.In the outbound link (figure 1), base to mobile, the basestation message is routed to the mobile through thePSTN to a dedicated regional operation center and thento the gateway serving the area.To comply with theone-hour response time, one gateway is necessary forEurope, another for South-East Asia while two areenvisaged for North America.
Cross-area traffic requires connexion of the variousregional operation centers.From the gateway , the message is uplinked at VHF(148-150.05 MHz) to the overhead satellite anddownlinked to the mot-le terminal at VHF (137.0-138.0MHz ) or UHF (400.15-401.0 MHZ).The inbound link, mobile to base, makes use of the samefrequency bands, possibly segmented, for up anddownlinks.All links use a spread spectrum modulation technique.Positioning is achieved through Doppler and propagationdelay measurement within the network.
665
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Figure 1 overall system architecture
4. THE SATELLITES
An optimization study has been conducted byAEROSPATIALE/ALCATEL for the TAOS satellites withthe following intial constraints:-low recurring cost-launch by PEGASUS with the associated hydrazineauxiliary propulsion system (HAPS)-Launch mass around 150 KG-Required satellite lifetime of 5 years and systemlifetime of 20 years-shaped VHF/UHF antenna gain diagram to compensatefor the free space loss dynamic range.
The platform has been defined around two components,the solar generator and the attitude control subsystem.Indeed the solar generator is the most expensive,volume consuming and dimensioning element for thesatellite architecture and the selection of an attitudecontrol design is closely related to the chosen solargenerator.A thorough investigation of more than 45 differentdesigns has led to the selection of the followingcombination:-omnidirectional solar array composed of 4 deployablepetal -like wings covered on both sides with siliciumsolar cells,-attitude control based on momentum wheels
Figure 2 The TAOS constellation
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Figure 3 Satellite in orbit
Figure 4 Stored configuration for launch
Here is a brief review of the subsystems mainfeatur6s:The structure is a box-like body, 650 x 650 x 800mm,and use aluminium honeycomb sandwich panels; thethermal control is passive with a U-shaped heat-pipebetween the two dissipating walls. Power generation isachieved through the solar generator delivering 270 Win daylight while during eclipose a Ni-Cd battery isused.The attitude control maintains all axes within 3°.The propulsion uses six cold-gas 0.1N thrusters ,thenitrogene is stored in 2 high pressure metallic tanks.Acentralized computer is used for platform and payloaddata management. Command and telemetry is carriedout in the frequency bands of the mission.
The repeater consists basically in signal amplificationand frequency translation. The antenna selected is afixed assembly on the Earth-panel with a UHF helix anda VHF rhombic element.A deployable ground plane improves the antenna gaindiagram.(see figure 3).
The total launch mass of the saellite is less than 150KG (around 20 Kg for repeater and antenna), theplatform needs 170W and the payload 100 W.
5. SYSTEM ASPECTS
Two potentially critical areas have been identifiedduring the preliminary studies:-availability of the frequency bands, in particular the148-149.9 MHz allocation to MSS has a secondarystatus in 75 countries,-impact of ionospheric propagation disturbances at VHFon Doppler measurementsInvestigation on both aspects are carried out using aminisatellite, S80T, launched in mid-92 with ARIANE.
6. CONCLUSIONS
After demonstration of the feasibility of the systemand confirmation of the market, the network TAOSwill be gradually implemented during the late 90's.(Regulatory filing with ITU has been engaged under thename S80)
FEFEFEINEE
(1)"A LEO-MSS system for position reporting and datamessaging services." A.Gautier & P. Dumont,1AF-92-0424, 43rd congress of the IAF, 1992.
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WEDNESDAY, January 20, 1993
Morning Plenary
NOTES
TELEPHONE DEVELOPMENT PROJECT FOR VALLE DEL CAUCASTATE
COLOMBIA, S.A.
Dr. Fernando Garcks LloredaGeneral Manager
Empresa Regional de Telecomunicaciones del Valle del Cauca S.A.E.R.T. SA
1. INTRODUCTION
Colombia's geographic position within the Pacific Rim, its stageof development and rate of economic growth are solid factors inthe process of economic liberalization which the country isundergoing.
2. COLOMBIA
As shown on figure 1, Colombia is geographically positioned inthe north-western corner of South America, quite near thePanama Canal and has coastal extensions both in the Pacific andAtlantic Oceans. The country is crossed by the same meridian asNew York and by the Equator. This strategic location makesColombia a Pacific Rim country as well as a well situated transitpoint among South America, Europe and North America.
Internationally, Colombia is recognized as a responsible memberof the economic community and is engaged in a policy ofintegration with major countries and regional economic groups,among which arc Mexico, Venezuela and Chile. Colombian laboris relatively low-cost within the international context and offersthe characteristics of ingenuity and responsibility.
3. VALLE DEL CAUCA
Valle del Cauca (see fig.2) is a Colombian State located in thewestern side of the national territory and covers an area of21,(X10 square kilometers, which is mostly flat. It derives its namefrom the Cauca River, which bisects the state from north tosouth. Its coastal extension along the Pacific Ocean includes theport of Buenaventura where over 60'7.: of national maritimeshipments take place.
Valle del Cauca generates 14':; of the gross national product,mostly agricultural production well -known internationally, suchas sugar and fruits, and is in the process of sustainedindustralization.
Within the region, there is a firm believe that the futureeconomic opportunities are related to the Pacific Rim andconsequently that all efforts must be made to build the necessaryinfrastructures, among which telecommunications is a
fundamental one, to achieve the region's economic take-off. Thishas motivated us to join hands with The PacificTelecommunications Council and to offer this presentation.
4. TELECOMMUNICATIONS SITUATION IN THEVALLE DEL CAUCA
Cali, the state capital, with 2 million inhabitants, hastelephone density of 18 per hundred. Its metropolitan networkis digital in its majority. The remainder of the region has atelephone density of only 4.4, and its network is almost totallyvintage analog. Although these statistics compare aeceptahlywithin Latin America, they arc well below what the regionrequires to achieve any significant economic development.
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To attack the problem, in June 1990 Empresa Regional deTelecomunicaciones del Valle del Cauca - E.R.T. S.A. - wasestablished as a commercial and industrial entity of the State ofValle dcl Cauca. It includes, among its shareholders, themunicipal telephone companies operating within the state.Presently, E.R.T. is undergoing a process of progressiveprivatization from a state-owned entity into one with localprivate capital participation.
E.R.T.'s major objective is to promptly bridge the presentunfulfilled telephone demand and to offer new added-valueservices.
E.R.T.'s first management decision was to retain a U.S.consultant, Dr. Eitel M. Rizzoni & Associates, to perform acomprehensive feasibility study and network plan for the newcorporation. Through the use of the NETPLAN and NETCOSTcomputer programs, developed by Dr. Mario Pictrogrande, theE.R.T. network configuration was planned and optimized bothtechnically and economically.
5. TELECOMMUNICATIONS SYSTEM
The E.R.T. project covers the entire area of Valle del Caucawith exception of the city of Cali. Telephone service in Cali isprovided by Empresas Municipales Dc Cali (EMCALI), a state-owned public corporation. The metropolitan network is 7(Y;digital in switching and interexchange transmission. Theinterconnection with the national long-distance and internationalcarrier is also digital. partly cable and partly optical fiber
E.R.T.'s projected network will interconnect with themetropolitan Cali network as well as with the national long-distance and international networks operated by EmpresaNacional de Telecomunicaciones (TELECOM). Similarly, E.R.T.can interconnect with future networks offering value-addedservices.
5.1. E.R.T. Network Planning
Starting from the existing and projected telephone demand interms of type of services, quantity and qua! and has mgdeveloped community-of-interest factors betv.ecn s xchant!p >hepresent and future traffic matrices were desetopcd lot fillet:points in time: 1993, 1995 and 2()00. Also, potential new servicesto he provided by E.R.T. were estimated.
Several switching, transmission and routing alternatise networkconfigurations were analyzed and their relanse advantages serecompared. On the basis of traffic flow efficiency, networkflexibility, grade of service, transmission qualm and first andrecurring costs, the most convenient configuration was selectedand the new digital E.R.T. network was planned.
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The planning included the interconnection between the digitalE.R.T. fixed network and the future E.R.T. Cellular mobilenetwork, for total integration with the national and internationalsystems.
In addition, the economic viability was determined, as well as theproject's financial rate of return, including a sensitivity analysisof financial parameters to determine the influence of theirvariability on the investment.
5.2. The ERT. Project
Eight network alternatives were configured and analyzed. Thealternative technically optimized and of least cost was selected.The selected alternative utilizes one single transit exchange forthe entire region, vis a vis more conventional solutionsemploying a number of transit exchanges.
The single transit exchange, located in Cali and totallyduplicated for reliability requirements, will switch the entirelong-distance traffic of the region. Traffic administration,network management and operation, and computerized billingare thus all centralized at this single transit center.
The E.R.T. network (see fig.3) will connect 56 towns, most ofwhich are presently served with step-by-step equipment. Theunfulfilled demand will require more than doubling the capacityin terms of switching lines and outside plant. The plan calls fortotal replacement of existing switching and outside plantequipment with modern digital equipment.
Inherent in the design is the future introduction of the digitalsynchronous standard. The implementation is planned in threephases:
Phase One 1992-1994: The back-bone transmission system willconsist of a 170 kilometer, 140 Mb/s optical fiber route fromCali t ' artago and a 140 Mb/s microwave system between Caliand Buenaventura (see figure 4). This long-distance system willcarry about 70% of all long-distance traffic, as well as value-added services required by business customers.
The transit exchange to be implemented in Cali will switch alllong-distance traffic and interconnect with the Mobile TelephoneSwitch of E.R.T. Cellular.
Phase Two 1995-1996: 100,000 digital exchange lines will beprocured to serve 41 towns, as an addition to the existing 23,871digital exchange lines. The transmission network will beaugmented with a low-capacity digital microwave network toreach the secondary locations from the main trunk line (seefigure 5). During this phase, the entire replacement of theoutside plant will begin.
Phase Three 1997-200th All remaining analog exchanges will bereplaced by digital ones of larger capacity and 11 new locationswill be provided with modern telephone service. In the year2000, the E.R.T. network will consist of 196,000 digitaltelephones lines and oversized transmission capacity, to providemodern telecommunications services in the region.
53. Economic and financial viability
As a result of the optimization process of financial parametersvia the NETCOST software, the following financial highlightswere obtained over the 8 -year period 1992-2000:
The consolidated statement of income shows a profit marginstarting in the second year of operation, which could result inshareholders' dividend distribution starting in the third year.
The consolidated statement of cash flow shows positiveaccumulated cash flow for all years of operation.
The consolidated balance sheet shows solid shareo.vner's equityat the end of 8 years of operation.
The viability of the overall investment and satisfactoryprofitability are assured by the internal rate of return of 19%,over the eight years of operation.
6. A LOOK AT '11-1E FUTURE
It is expected that the rapid economic growth of Valle del Caucawill result in the evolution of the E.R.T. network into asynchronous standard and ring configuration, including locationsin the region at present unserved, as well as areas outside of thestate limits. In this manner, variable bandwidth services can beextended on demand to cities requiring it.
Moreover, the growing commercial and economic importance ofthe port of Buenaventura within the context of internationaltrade, leads to the consideration of a future internationalconection from Buenaventura, via a submarine optical fibercable, to Lima and Santiago and from there to the possibleoptical fiber submarine extension to South East Asia. Similarly,a northern submarine fiber connection along the Pacific Coastto Mexico and the U.S.A. may be considered. These forescablcprojects are presently discussed in international forums, such asthe current PTC annual meeting.
7. CONCLUSION
Finally, it should be noted that this project may serve as a modelfor the planning of other regional telecommunications networksin Colombia in accordance ith the national economicliberalization program, as well as in other developing countries.
Recently, new telecommunications regulation has taken place inColombia including the demonopolization oftelecommunications services and the introduction of privateinvestment, both national and external.
I have no doubt that commercial and institutional opportunitieswill develop which will facilitate our purpose of communicatingefficiently anywhere on our planet.
To close, I wish to thank warmly the PTC organization and allof you for letting me speak about this Colombian Project.
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704674
Personal Communication ServicesNow That I Can Have Them, Why Do I Really Want Them?
And Thoughts on the Future of PCS in the Marketplace
Brad BaxterU.S. Intelco NetworksOlympia, WA USA
This paper discusses the main issues and concerns surrounding the imminent introduction ofPersonal Communication Services. From the concept of the service through its practical
applications, the paper looks at how PCS may impact our lives. It questions how PCS will bereceived in the marketplace and, without drawing judgment on its current status, emphasizes thatpreparing the consumer market is just as important as the development of the services themselves.
Preface
That basic question why do I really want them?enters every consumer's mind as he or she looks at new
products and wonders if buying them is a good idea. Everysavvy marketer tries the question out while pretending tostand in the consumer's shoes. The answer could catapult anew product to success or seal its defeat. And the time hascome to ask the question in reference to Personal Com-munication Services.
The history of new product introductions like PCSlies strewn with great concepts that failed to hit targetmarkets. Some elegant and inventive ideas were commit-ted to the development process but scrapped after a shortintroduction to the marketplace. Some of these failurescan be attributed to poor timing, some to inefficient mar-keting, and others to a combination of the two with anadded sprinkling of misfortune. This paper attempts topoint out some possible concerns facing equipment manu-facturers, wireless carriers, network operators and a hand-ful of legislative decision makers that make up the PCS in-dustry. Once common ground is n:ached among these in-terest groups, the consumer public and service subscriberswill have the decisive judgment on whether PCS becomesanother casualty along the new product road or reachesthe heights of product acceptance and financial success.
This approach is not meant to condone or con-demn any of the suggested solutions or technologies thetelecommunication industry is considering for PCS. It ismeant simply to look at the various parts of PCS, clarifythe issues and shed light on the many possible outcomes,so we can reach an objective vision of the future of PCS.
The paper will first present a review of the historyleading to PCS and a look at the basic philosophy of thepersonal communication service concept. From this dis-cussion, it will move on to examine the introduction ofPCS technologies and services. But above all, this paperwill attempt to address some of the haunting and over-shadowing questions that could lead to service acceptanceor rejection by the potential PCS subscriber.
.
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Section 1: Personal Communication Services AnOverview
What is it? Philosophy of PCS
The philosophy of Personal Communication Serv-ice (PCS) is a concept still under construction. Terms havebeen coined to break it down into parts (Personal Mobil-ity, Terminal Mobility and Service Mobility), yet theseterms imply that a person using telecommunication serv-ices while in a state of motion is performing a form of per-sonal communications. But PCS philosophy is about morethan connecting telephone or data service to someone thatis in motion. It is based on the idea that a single, uniquenumber assigned to each user allows that user to send orreceive telecommunication services from any telecommu-nication access point or device. In practice, PCS wouldgive subscribers universal network access using personalservices.
The concept of the Universal Personal Telecom-munications Identifier (UPT), or the single universal tele-phone number, may be the cornerstone of PCS philosophy.This single number with an incorporated personalized se-cret code similar to a Personal Identification Number(PIN), identifies the PCS subscriber to the telecommuni-cation networks wherever he or she goes. The networkswill use the UPT identifier to recognize and track the sub-scriber's location and alert the supporting rp:.twork node towhat type of service the subscriber is entitled.
The ability to connect to people in plxces, not justto places with people, opens many possibilities. Tetheredtelecommunication services, whether the tether be an RFinterface or local loop, links originating and/or terminatingcommunication to a specific station or device. With truePersonal Communication Service, the subscriber will beable to use the tethered stations or devices simply aspoints of access to send or receive calls in the form ofvoice or data communications.
Here are a few simple definitions of the major PCS con-cepts:
'705
Personal Mobility: The user's ability to access telecom-munication services at any terminal (telephone, cellularphone, pocket phone, etc.) based on a personal identifier.Also: the network's ability to locate the terminal associatedwith the user.
Terminal Mobility: The terminal's ability to access anyof the telecommunications network services anywhere orany place while in motion. The network will be able to de-liver any telecommunication services to the terminal identi-fied by its network address.
Service Mobility: The telecommunication network'sability to deliver the user's customer service profile(identified by a personal identifier) to any intelligent net-work element requesting the information.
More on mobility as it relates to PCS appears in Section 3,"PCS Applications."
How did it get here? Evolution of PCS
Existing technology often acts as the kernel ofcreation for the "next generation" of systems or devices.The telegraph inspired Alexander Graham Bell to eventu-ally patent his invention the telephone in 1876.Similarly, the piston motion of the steam engine providedthe basis for the reciprocating piston action gasoline-powered engine.
PCS has followed the same type of evolutionaryupbringing. We can trace its family tree from the originalpatent issuance of Marconis' wireless telcgt.ithy in'1896all the way to the first operating cellular telephone Metro-politan Statistical Area (MSA) in the U.S. in 1983. PCStechnology follows cellular technology; it results fromblending evolving technologies of radio frequency engi-neering, telecommunication switching and micro comput-ers. The technology that might claim PCS as its forerunnercould possibly push communications technology to thelimits of the imagination. Co-mingled voice, data andvideo capabilities may become universally available at asimple touch or whisper of a command.
Why continue? Commitment to Developing PCS
Why would anyone want to commit to developingPCS, considering all the associated risk and uncertainties?The reasons could range from corporate egos sometimesassociated with leaders in the field of ',.;reless communi-cations to the opportunity of capitaliziag on a successfulwonder-widget that will turn the wireless communicationworld on its collective ear. Whatever the developer's moti-vation, it is understood that PCS is coming and will beavailable to the consumer market. Corporate leaders arealready demonstrating commitment to the developmenteffort, which will eventually produce the devices and sys-tems that support PCS opportuaities.
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Section 2: PCS Implementation
The PCS "Birth" Environment
The development environment of PCS technologyrefle -As the environment of the standards-setting bodiesthemselves. Standards groups are developing PCS stan-dards in an open, consensus-by-committee atmosphere.This approach is a far cry from the traditional, sterilelaboratory environment usually controlled and designed toreflect the single wishes of one dominant presence. In thisnew product birth environment, the wishes and opinions ofthe many are heard and documented, producing a "mixedbag" of documented input and possible "standardized"approaches. Combined with the hybrid nature of the PCSsystem, the new birth environment makes the determina-tion of multiple standards possible. Such is the presentcase in PCS development.
The standards bodies for PCS have created asituation that is often referred to as the "M A wars". "MA" refers to the term Multiple Access. Multiple Access inthis case refers to the common air interface between thePCS pocket phone device and the supporting radio basestations. The different "flavors" of M A are FrequencyDivision Multiple Access (FDMA), Time Division Multi-ple Access (1DMA) and Code Division Multiple Access(CDMA). Not that any of these forms of multiplexing areto he defined or judged as positive or negative; the stan-dards-setting bodies simply have created a mish-mash asthey have tried to define a common interface between PCSpocket devices and the PCS network base stations. Cur-rently no single common air interface exists that the ma-jority of cellular carriers have endorsed. As the implemen-tation of PCS begins, the dominant multiple access multi-plexing scheme must still be determined and then adheredto.
A similar situation in the U.S. occurred with theintroduction of Video Cassette Recorders. Two differentformats for VCRs appeared almost simultaneously on theconsumer market. One of the formats was Beta and theother was VHS. After years of competition, the VHS-for-matted VCRs have prevailed. A similar scenario could oc-cur with PCS devices. PCS pocket phones, in satisfyingthe multiple M A interfaces, could operate in dual mode oreven tri mode as they attempt to satisfy all competing RFinterfaces. Then, as one or the other RF interface prevails,a switch within the pocket phone could deactivate thelooser RF interface. The winning interface would remainto suck up all the available power left as a result of such anengineering fiasco.
706
PCS Network and Device Development
Much is being printed concerning PCS device re-quirements. A fairly accurate, early profile of the base re-quirements, from a service/subscriber perspective, is stillunder development. We can, however, lay out some ofthe envisioned requirements:
The cost of the pocket phone device is generally pro-jected to be less than the average cost of portable cellularhandsets we see today. That projection would place thecost of the pocket phone device somewhere around$50.00 - $150.00 (U.S.).
The envisioned operating criteria for battery life is to be24 - 48 hours of standby with 4 hours of actual poweravailable for talk time. This standard would allow the PCSsubscriber to recharge the battery of the PCS pocketphone overnight.
The pocket phone device must be small enough to con-veniently fit into an inside jacket pocket and must notweigh more than a deck of playing cards.
The quality of the voice connection must be near "landline quality and at least 10 times better than currentAMPS cellular service.
Capacities of the PCS network are envisioned to ac-commodate 4,000 to 10,000 voice channels per squaremile using base stations that are no larger than a shoe box.These channels should be able to support voice and datacommunications at a possible user variable bandwidth re-flecting the type of data or voice being transmitted.
The PCS network and pocket phones will be equippedto guarantee security of the information being transmittedand received, as well as the authentication of the user ac-cessing the network.
The PCS network must be able to determine the loca-tion of PCS users at any given time while directing calls tothose individual users through logical routing addresses.The network must provide this routing information with-out user intervention or action.
The network cost of implementing such service isenvisioned to be roughly one eighth the cost of implement-ing an AMPS cellular system. This projection takes intoconsideration the reuse of some imbedded cellular switch-ing functions, such as the mobile switching center (MSC).Given the implementation costs of the PCS network beingone eighth the cost of current cellular carrier implementa-tion, the average air time per minute will also decline to areasonable level. Casual home PCS subscribers should beable to afford the service, which in turn should lead to in-crease usage and economies related to scale for PCS car-riers.
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Market Preparation
The Pavlovian customer response to PCS networkand services implementation will occur only if the cus-tomer market is fed intelligent and systematic informationabout available PCS services. The incredible growth in thecellular market demonstrates that customers are aware ofand accept mobile communications in an increasingly mo-bile society. The next challenge is to introduce servicesthat genuinely have a perceived added value to the mobileservice subscriber market. The successful ven-dor/manufacturer of PCS products may reap substantialrewards. Current telecommunications providers are at-tracted to the opportunity of becoming PCS carriers them-selves. The market entry opportunity appeals to manytelecommunication service provider "wanna-bees."
The potential down sides of the PCS opportunityrevolve around companies that don't develop the rightproduct or don't offer the right service. Those types ofcompanies stand to face significant risk. For an example,look to Wang Laboratories Inc. of Lowell, Massachusetts,a company that entered bankruptcy proceedings in August,1992. Wang had previously dominated the 1970's word-processing market with computer systems of their owndesign. Wang did not anticipate the market transition topersonal computers, a blunder that all but wiped out a $3billion-a-year corporation.
RF "Turf" battles Spectrum Allocation
The allocation and controlled licensing of the pre-cious commodity known as radio frequency (or spectrum)has both U.S. regulatory agencies and European regula-tory bodies either in a constant state of proposed rulemaking or eternally reviewing comments submitted duringthe proposed rule making process. The goal of this legis-lative effort is to provide or allocate a designated radiofrequency band in which PCS devices may operate withoutdisrupting existing radio devices. Obviously, this is not aneasy task. Along with defining an operating frequency, theregulatory bodies intend to establish an International PCSdevice operating frequency that will truly provide the PCSsubscriber universal network access wherever he or shemay roam. In the U.S., the FCC has issued a Notificationof Proposed Rule Making (NPRM), which designates forPCS use specific radio frequencies within the 1850 -1990MHz range. The European Common Proposal (ECP) fromthe CEPT Ad-Hoc92 group specifies radio frequency allo-cation of 1900 - 2025 MHz as the assigned operatingspectrum for PCS devices. Between these two frequencyallocations, 60 MHz is assumed to be the common bandwidth, available on both continents, within which PCSpocket phones can freely move and operate.
Spectrum and licensing issues also concern opera-tors of the "Pico cell" PCS networks. "Pico Cells" are cellswithin Micro cells, which compose the cellular structure ofPCS. The issues impacting these PCS devices are specific
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to the private network operators introducing "wireless"LANs and RF voice systems. The systems will have a lowpower operating range of a few hundred feet, providingPico-cell operators with limited but effective single floorwireless operation. Pico Cell operations still require spe-cial attention to licensing and business issues relating tothe use of the RF frequency at which Pico Cell base sta-tions will operate while supporting PCS pocket phones.
Section 3: PCS Applications
The services envisioned for PCS use the theme ofmobility as the basis for service description. When talkingabout specific services, that theme recurs throughout theexplanation to reaffirm that these services are indeed forpeople in motion. Motion, incidentally, can mean either"walk about" or "zoom about" motion, as in the case oftraveling at high speed.
We have identified at least three types of mobility:Personal, Service and Terminal. We will now revisit theseterms to further examine the practical applications of PCS.
Personal Mobility
Personal Mobility-type services consist of tele-phone numbers, processes to authenticate and locate theperson in motion, and services offered specifically to usergroups that allow group function or privilege.
To reach a PCS subscriber, the network needs toknow the subscriber's telephone numbers for work andhome, a forwarding number to reach the subscriber whileat an interim number, cellular numbers, PCS numbers or avoice mail number. Any of these numbers can be used todeliver the terminating call. The key to these terminatingcall services is the single Universal Personal Telecommu-nication Identifier, the one number that identifies the PCSsubscriber to the network. Through the UPT Identifier, thenetwork can locate the PCS subscriber and determinewhat telephone number (home, work, cellular, etc.) to usewhen routing the call to that location. All these functionsthe network will perform automatically, without manualPCS subscriber intervention unless the subscriber desirescertain specific nonpresubscribed routing instructions.
The network also uses the UPT Identifier toauthenticate the PcS subscriber. In order for this processto work, however, the UPT Identifier first needs to beregistered with an entity called an "authentication center."The authent:..a.lon center acts as a validation point, rein-forcing the control of fraud. UPT Identifier registrationoccurs at the initiation of the subscriber's service. Alsoregistered with the authentication center is a coded secu-rity number embedded in the subscriber's pocket phone.Algorithms included in the security number provide accu-rate verification of the PCS subscriber.
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As the subscriber moves throughout the telecom-munication network, the network will automatically rec-ognize the subscriber based on these security numbers(this process is called "autonomous registration").Autonomous registration could be accomplished by usingthe paging frequencies of the wireless network. This reg-istration activity then notifies a location database (anotherinformation checkpoint) and the authentication centerwhere the subscriber is located. At the same time, thecoded security number sequence imbedded in the PCSpocket phone is shared with the authentication center.
A group of consumers can also subscribe to groupservice with group UPT Identifiers. In this situation, PCSfunctions are controlled through a main number, then aredistributed to the appropriate individuals within the groupbased on their specific UPT Identifiers. The UPT Identifierqualifies each user in the group for any special features(voice mail, call screening, etc.) associated with the mainservice. These service groupings could be family group-ings or business groupings.
Service Mobility
Service Mobility services should guarantee thatservice groupings or individual services can be received orinitiated anywhere, any place, at any time. The services towhich the PCS customer has subscribed at his or her placeof service activation will guarantee the delivery of thoseservices throughout the PCS network. Some of theseservices could be voice mail, custom calling features, dis-tinctive ringing and selection of grouped UPT Identifiers.
Call screening will also be available where calleridentification information is available in the network andcan be processed. Call screening will let subscribers de-termine the importance of an incoming call. The call origi-nator can prompt the subscriber during call setup by enter-ing a coded number sequence. This special sequenceidentifies the call's level of importance. For instance, familymembers could override a screening table by entering apassword that has been shared only among the familymembers.
Call delivery is an adjustable option based upon apredetermined call level priority, caller profile or calleroption profile. This feature will allow the PCS subscriberto have the network send some calls to his or her cellularphone, some calls to voice mail, etc., based on each call'spriority or profile. The PCS subscriber can include voiceprompts such as greetings or announcements to informcalling parties of certain conditions, or that the call is beingforwarded to voice mail because the subscriber is notavailable.
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Terminal Mobility
Terminal Mobility services will enable PCS sub-scribers to identify the specific features available or appli-cable from a specific terminal. For example, a terminal thathas identification through a certain ID or PIN could re-ceive video text and voice services simultaneously, while aterminal without such identification could not. The PCSsubscriber would be able to identify the possible terminalmobility constraints or applications that would controlwhat type of communication was possible from that termi-nal.
Terminal mobility will receive support from a loca-tion database. The location database will deliver networkidentification, routing information and any special billinginformation (usually applicable when terminals are sepa-rated and specified to their capabilities, uses or user groupprivileges).
Billing for terminal mobility services will providespecial billing information based upon either special billingplans or the need for delivery of billing detail from oneterminal to another, tracking possible discounts or useractivity on the identified terminal.
Section 4: New PCS Services versus the Ford Edsel
Developing Personal Communication Services,devices and networks that everyone wants takes vision,sound engineering, commitment and tenacity. The services'and devices' ability to actually fulfill PCS subscriber needsand meet standards with which they associate value issomething different. The perceived value of the servicewill be the key to the subscriber's willingness to pay andPCS' ultimate success.
An example of creative engineering and inventivedesign gone wrong occurred in the mid 1950s, courtesy ofthe Ford Motor Company. The company's developmentprogram and introduction for the Ford Edsel was reportedto be one of the most extensive, state-of-the-art effortsthat Ford had ever undertaken. Engineers incorporated thenewest, most advanced design and engineering technolo-gies into the development effort. They introduced ergo-nomics advanced for the time, intending to give the poten-tial Edsel buyers gadgets, special features anything thatwould make operating the vehicle easier. This new line ofautomobiles was even named after the son of the owner ofFord Motor Corporation. What more could anyone askfor!
The result of the Edsel's new product introductionis also well referenced and documented, more so thananyone would like to admit. The Ford Edsel was a failure.Despite all its wonder-gadgets, it was visually unappeal-ing. Customers saw no real use for it. They had not beenprepared at all for this new product; Ford expected people
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to automatically buy it for what it was, and thus virtuallyignored a marketing effort. After a few years of disap-pointing sales, this state-of-the-art product was aban-doned, leaving the few purchased Edsels to become curi-osities in garages and backyards.
Then what do consumers want?
The story of the Edsel shows us that the customermarket and/or service users will make or break the newproduct regardless of the previous process or lackthereof that developers have put into the new productdevelopment. Which brings us to the next questionwhat are some of the expectations out there in the mar-ketplace that impact new product introduction?
A few are critical, the first being: how does theuser perceive the service itself? The second: how does theuser perceive the value of the service? The third: is theservice easy for the subscriber to us::! And the fourth:does the service do what it is supposed to do?
As these questions relate :o PCS, the first concernsthe subscriber's overall impression of the service. With auniversal service such as telecommunications, the PCSsubscriber might be concerned about his or her privacy.The subscriber might perceive being constantly available asboon to his or her creativity and productivity or a nuisancemandated by a corporation, a personal responsibility or thenecessity of a job. The perception of this service will bepositive if the productivity and creativity points add up tobe greater than the necessary nuisance issues of the job orresponsibility.
The second point perceived user value of theservice involves how many times the service or devicehas really assisted the user in the way he or she wishes. Ifthe service has satisfied a significant critical situation or animmediate need, a one-time successful operation mightgenerate a feeling of well-being about the service and a"what if I need it again and I don't have it" type of mindset.
Thirdly, the service should be easy to operate. Itshould locate subscribers and route calls quickly, effi-ciently and invisibly. Most service users operate in a "don'tknow, don't care" mode, demonstrating little interest in theoverall Common Air Interface or Network support issuesgoing on behind the scenes. The service user will onlywant ease of operation and as little manual administrativeintervention as possible.
And the fourth point PCS service operationmust truly provide the service that the subscriber isexpecting to receive. If calls are to receive a prioritizedprescreening before they are delivered to the called party,then the service had better live up to those expectationsand deliver only the screened calls. If the user location isto be forwarded to a centralized location database so thatthe subscriber can receive important calls while on the golf
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course, then the calls should be delivered to the place theyare expected. If the UPT Identifier guarantees the sub-scriber security against fraudulent use of his or her UPTID, then fraud should virtually not exist in the PCS netwo-rk.
Pricing, service availability and other issues such asinvasion of privacy are also points that the subscribershould be aware of. Subscribers can be educated on allthese issues through proper market preparation. Such edu-cation, including the distribution of information about theservice's advantages and how to use the devices, will di-minish potential rejection. If PCS subscribers know thetruth about what the service will and will not perform,their expectations will be in line with service's capabilities,thus increasing the chances that they will be pleased andthe service will be a success. Like the example of the Ed-sel, all the best design, engineering and development willnot guarantee new product success without customer edu-cation and market preparation.
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COMPETITION FOR ELECTRONIC SUPERHIGHWAYS IN THE PACIFIC
E. Jean BishopEconomics Department
The University of Queensland
Abstract
Information is increasingly seen as an economic resource essential for worldtrade and national income. Control of information networks can be asimportant for the flow of trading information as control of the scalanes wasin early colonial days. The growth area for today's trade is the Pacific Rimregion and control of the information network in this region is a target ofthe telecommunications giants.
Introduction
The economic resource, information,whether transmitted by voice, data orimage, is increasingly seen as essentialfor world trade, exports and nationalincome. Electronic highways for thecarriage of this resource can be regardedas the 21st century equivalent of thecarriage of resources on the 19th centuryrail networks and 20th century motorhighways. Trade was increased by thedevelopment of those railways and roads.Today, electronic information networkowners arc anticipating an increasedmarket in the carriage of information andthey arc competing on a world-widebasis for this important informationmarket. They have seen motorsuperhighways used to facilitate trade bycarrying traffic at high speed andavoiding bottlenecks, and now for theimportant resource, information, theywish to establish superhighways..
Electronic Information Networks
Electronic information networks are thehighways of the information economybecause they carry telecommunicationsservices which arc vital for the businessventures of today and the 21st century, as
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organisations arc becoming moredependent on a continual flow ofaccurate and timely information. It is notsurprising therefore that these networks,like motor highways, are subject tocontinuous change and upgrading. Thisarises from the rapid change in thetechnology offered and the increaseddemand flowing from the growth in theservice sector.
Electronic networks have changeddramatically in recent years, and thetechnical advances are so pervasive, andso much a part of our environment, thatit is difficult to remember that many ofthe services did not exist in the first halfof the twentieth century. For inter-national telephone traffic the first longdistance submarine cable suitable forgood quality telephone conversations waslaid across the Atlantic in 1956. Thefirst Intelsat telecommunication satellitewas launched in 1964. Since that timemicrowave networks have challenged theland-line networks in the birthplace oftelecommunications America - andhave had a major impact on networksworldwide. In more recent time cellulartelephony has made it increasinglydifficult to escape from the telephonecall, and pagers have become an essential
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accessory for many people. In additionthe advent of fibre optic cables hasmassively increased the carrying capacityof land lines and submarine cables andthe increases in capacity continue. Awealth of conduits now exists for thetransmission of information.
The sets of information being forwardedover these networks arc becoming morecomplex as business consumers seek totransmit not only the traditional voicemessages of the precomputer age, butalso text, data, video and image services.Expectations have changed. Consumershave high expectations of these newelectronic information networks. Thepatient telephone consumer who a decadeago would wait all day to obtain atelephone connection to a relativeoverseas is now impatient if theconnection is not as instantaneous as acall to a neighbouring suburb oradjoining town.
Information
The information which is the resourcecarried by the networks varies with thesource and the demand, it also differsfrom other resources. Informatioa dotsnot have the same exclusive possessionaspects that other resources have. It isnot like a tangible exhaustible item suchas an apple or a cake. Because of itsinexhaustibility it can be sold or given,yet still retained. It can be us ..d manytimes, yet be available to use again. Itcan be used without permission or stolenwith the original owner unaware of itsloss or use.
Many information suppliers have realisedthis uniqueness about the resource'information' and its place in theworldwide marketplace. The intcrlinkingof the computer and telecommunicationsand the establishment of electronicinformation networks, permit the
transference of databases over greatdistances at great speed. World trade inthe provision of information for sharetrading, banking, shipping, security etc.has now become big business. Thoughsome of us working in the informationfield are astonished at the naivety of thepeople paying for information which iseither extremely wrong or extremely outof date. Some people do not appear tobe aware of the 'garbage in, garbage out'factor.
However, the sale of databanks aboutconsumers and businesses can be veryprofitable indeed. Despite therequirements of privacy principles whichmost countries enforce on carriers andservice providers a large industry existsworldwide for the collection, storage andrelease of information.(1) The generalpublic appears to be oblivious of wherethe personal information collected by aneverincreasing number of bureaucracies,financial institutions, consumer surveygroups, clubs, magazines, etc. ends up.
Chaum (1992) states "it is almostimpossible to learn the full extent of thefiles that various organizations keep onyou, much less to assure their accuracyor to control who may gain access tothem ".(2) Notwithstanding legal attemptsto curb the flow of this information intoirresponsible hands, the restrictionsimposed by limited membership ofinformation provision networks (e.g.recent changes in Australia re creditinformation)(3) can be overcome bysurreptitious use of the photocopier, thetelephone or the computer. The need toprotect information about individualsfrom improper disclosure or use, hasbeen taken up by the writers oncommunications law issues andtransbordcr data flows, (4) who recognisethat although the physical capabilities forthe transmission of information on aglobal basis exist, there remain many
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issues for nations and consumers aboutthe legal aspects of that transmission.
Global companies
Yet information is the lifeblood of theglobal company and its branch system,these companies expect to be able totransmit information across nationalboundaries and even complain about therestrictions of today's borders. They alsorequire communication networks securefrom the threat of industrial espionage.(5)Global companies are searching foreconomic efficiencies, reliability andsecurity in the transmission ofinformation.
Is this as 'new' as the companies wouldhave us believe? Lamberton (1992)realistically sees the worldwide networkmodel as more like "--- a medievalMediterranean trade route model" than "--- the technological wonderland modelof the global village" (6) because ofpsychological distance and the limits oforganization.(7) It would be wise toremember that traders have always had todeal with the handicaps of theorganizational structure, and in theinformation market that applies to globalcompanies on both sides of the marketbuyers and sellers.
Changing Organisational Structure
Many changes have been made in theorganisational structure of informationindustries in recent times. Much hasbeen written abut this change. A heavyemphasis has been placed on the supplyside of the information market by manyof these writers, but this should notdetract from the change in organisationstructure which has occurred on thedemand side of the market. Economistslook at supply and demand.
The services of electronic information
networks arc sought by global tradingcompanies operating in global markets.They require efficient modern telecommunication services and they seeknetworks which can concentrate oncompany requirements of quality,capacity and advanced functions. Butthey require those attributes across theglobe, not just in their home country.
Companies have tended to see thenational telecommunications operators asbeing unable, or unwilling, to supply therapidly changing technology of businesscommunications. While the telecommunication operators (PTTs) haveseen the global companies as selfinterested entities which expect to bleedthe national telecommunication coffersfor their own interest in stateofthearttechnology for which the network'sresidential user (and even small business)has little use and perhaps littleknowledge.
The companies paint a picture of thetraditional telecommunication networkoperators as not keeping up withdevelopments and constrained byfinancial limits and community serviceobligations. The PTTs, with a centurylong history see their critics asnewcomers who may or may not be inexistence in ten years time.
The International TelecommunicationsUnion (ITU) works to ensure a highquality telecommunications network,however it must be admitted that theworld's telecommunication networks havevaried in the past, and will vary in thefuture. Yet both developed and lessdeveloped nations have made hugestrides in upgrading their communicationsnetworks in recent ycars. It shouldtherefore be recognised that the line ofargument used in the debate abouttelecommunications sometimesconcentrates on past organisational
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structural faults without recognisingrecent improvements.
Network Environment Change
The network environment is changing,competitive telecommunications networksare emerging. The opportunity to moveoutside the traditional national boundariesof the telecommunications regulatedmonopoly structure has been presentedby satellite technology, which can easilycross national borders, by deregulationand by the evolution of telecommunications technology. Telecommunicationsoperators, once tied to their hometerritory are now promoting their networkinfrastructural expertise in a steppingstone exercise towards global networks.Newcomers are forming partnerships toinvade markets. Advances in digitaltechnology are presenting opportunities toboth the old and the new operators ofcommunication networks.
Governments are encouraging theirtelecommunication suppliers to takeadvantage of the competitive climate inthe industry. In the United Kingdom asecond telecommunications network(Mercury) has been granted the right tocompete with the traditional PITmonopoly, British Telecom (BT).(8)This network utilises digital technologyand has the ambition of a global digitalhighway across the Atlantic, into theUnited States and then into the Pacific.A partner in the network is the powerfulCable & Wireless, a name wellknown inthe industry.(9)
The French telecommunications industryof the 1990s is a far cry from that of the1960s-70s before the Nora and MincReport (1978) and the FrenchGovernment's determined action at thattime to take the national system into theinformation agc.(10) Today, FranceTelecom is one of the world's largest
telecommunications companies. It isaggressively marketing for a share of theglobal information network market andits name is often mentioned in reports ofconsortia vying in the new networkmarket. Recently it has been aiming atthe establishment of a Pacific Rimtelecommunications superhighway.
In the United States the divestituredecision by Judge Greene in 1982 alteredUS telecommunications profoundly.(11)Those outside the US now see a range ofUS telecommunications companiescompeting for contracts in their countries.No longer is AT&T seen as the one andonly PTT for the United States. Ofcourse US residents and informedforeigners know that AT&T was not theonly one', instead it was the dominantfirm in the industry. But the messagewhich has been given over time totelevision viewers of other countries,especially by competitors lobbying incountries where governments have beenpressured to introduce deregulation (12)has been that AT&T has during the 20thcentury been the sole provider oftelecommunications in the USA untilrecent legal decisions.
Other Pacific Rim countries have alsoderegulated their telecommunicationsindustries. In Japan NTT and KDD nowhave rivals in their previously protectedmarkets.(13) In Australia a secondpublic telecommunications networkOptus has been licensed as a nationaltelecommunications carrier. Theconsortium involved in Optus includingCable & Wireless, Bell South (one of theUS 'Baby Bells.), and the Australiancompanies Mayne Nick less, AMP andNational Mutual had to purchase theloss making Aussat satellite system aspart of the deal.(14) In New Zealand thenational telecommunications network hasbeen purchased by a group including twoUS 'Baby Bells' Ameritech and Bell
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Atlantic. This internationalisation of thepostdivestiture Baby Bells demonstratesthe global ambitions of the newcompetitors in the industry and, as willbe shown later, can lead to someinteresting affiliations.
Private Networks
It should be acknowledged that tradingcompanies have had private lines fortransmission of their information forsome time. Dixon (1991) describes howFord of Europe decided in the mid-1980sthat their telecommunications networkwas not up to the job. Their existingEuropean networks lacked the quality andin some instances the capacity to meettheir requirements of graphics (fax andCAD/CAM drawings), data and voicetraffic. In 1991 Ford Europe became thefirst company to implement a private alldigital network crossing internationalboundaries. This network designed,delivered and serviced by Siemens, is anISDNbased Wide Area Network(WAN), it replaced six dedicatednetworks, four private and twopublic.(15) Siemens advise that it wasdesigned to support CAD/CAMterminals, together with 14,000 digitaland 3000 analog telephone handsets.(16)
The Important Services Sector
The structure of world economies haschanged during the 20th century, theimportance of the primary and secondarysectors for employment and grossdomestic product has been downgradedby the rise in importance of the servicessector. Indeed, the services sector is thefastest growing sector of worldeconomics, and information services arethe fastest growing segment of theservices sector.(17)
An important and growing segment ofthe services sector is the information
services sector. 'Information services'can be defined in many ways. Aninformation service is provided when anetwork carries a message conduit, ormode of delivery alternatively aninformation service is provided whenfinancial information content issupplied. This is one field where boththe medium and the message arcimportant.(18)
Riddle claims that developed countries, ingeneral dominate world trade in services(19) but she secs service industries asgrowth leaders in the Pacific Rim.(20)
Pacific Rim Services
There are many definitions for the term'Pacific Rim' but for this paper it refers toEast Asia, Japan, the ASEAN nations,Australasia and North America. EastAsia includes China, South Korea, HongKong and Taiwan. The ASEAN nationsarc Indonesia, Malaysia, Philippines,Singapore and Thailand. Australasiacovers Australia and New Zealand whileNorth America includes the United Statesof America and Canada.
Pacific trade in services, such as finance,tourism and transport is increasing, anddepends on the telecommunicationsnetwork available in the region. Whensatellite technology networks startedoperating in the region they expandedmarket capacity, but also threatened thesecure markets of incumbent cablenetworks. Now the new optical fibrenetworks with greater capacity threatenboth types of transmission networks.
Crew (1988) discussed telecommunications in the Pacific Basin and showedthe planned optical fibre cables in thePacific area, and their potential capacity.It is obvious that the global digitalhighway has reached the Pacific Rim andwe must expect the trade
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consequences.(21)
An international telecommunicationssuperhighway to carry voice, data andimage traffic at high speed acrossinternational boundaries could facilitatetrade in the Pacific Rim area. As Peltonand Lida (1992) stated "--- the keymachinery that makes this vast economicregion a reality is not fleets of planes. orships, or stock markets, or banks, butrather the ever increasing information and-.-Accommunications systems that enablesand empowers all these services andmore."(22)
This area requires electronic highwaysbecause it has the potential to becomeone of the biggest telecommunicationsmarkets in the world. The regionalpopulation requiring basic telecommunic-ations facilities is immense and growingrapidly. In addition, the rising standardof living in the area is bringing a demandfor telecommunications services forconsumers. The area's industrial growthis also responsible for a demand for themost advanced telecommunicationsproducts for business enterprises."Nevertheless, initiatives must be takenin order to forestall complete dominanceof world markets by service trans-nationals from developed marketeconomies"(23) states Riddell.
Growth in the usage of telecommunic-ations in the Pacific Rim area is beingpushed also by technological change andderegulation. The numbers of cellularphones in use are rising dramatically,submarine optical-fibre cables are beinglaid and more domestic communicationssatellites are operating. In additionpreviousl closed national markets arebeing opened to competitive operators.Langdale (1989) saw telecommunicationsand trade in electronic informationservices as prominent international policyissues, (24) and Fell (1990) agreed.(25)
Global Links: End To EndTransmission
Aspiring global supercarricrs are usingchanges in market structure to formlinkages which can facilitate theestablishment of global networks for theinformation requirements of the 21stcentury. They recognise that globalcompanies rely on information flows, andthat in the end-to-end transmission ofthat information the standard of servicehas varied widely. In this market bothbuyers and sellers are searching foreconomic efficiencies and reliability inthe transmission of their information.
Cable & Wireless advertises its globaldigital network and proclaims itself 'TheWorld Telephone Company'. Thiscompany which has been in internationalcommunications for over a century iswell aware of the importance oftelecommunications to the rapidlygrowing Pacific Rim area, and to theglobal companies operating in the region.It has a strong base in Hong Kong withthe Hong Kong telecommunicationscompany (HKTI) and is present in themarkets of the US and Japan.Bakunowicz (1990) stated that HKTIowns around 60% of the Asia/Pacifictelecommunications hubbing market.(26)Yet Hong Kong is in an ownershiptransition phase. Cable & Wireless, has abase in the Australian market with its24.5% shareholding in OptusCommunications, the recently appointedsecond public telecommunications carrier.Ownership of the Aussat satellite systemwas a government requirement of theOptus contract. In addition it has a onethird holding in Asia Sat 1 which hasfootprints over northern and southernAsia.
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American Telephone and Telegraph Co.(AT&T) is spreading outside the US withjoint ventures in many countries. It is
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continuing its history of expertise in
R&D by conducting joint research withJapan's KDD on what is described as " --- the world's longest optically amplifiedfibre optic cable system."(27) It will beinteresting to watch future actions takenby these partners. In 1991 AT&Tentered into a joint venture withHutchison Telecom of Hong Kong whichlinked Hong Kong into the AT&TEasy Link Global Network. Stine (1991)of The Asian Wall Street Journal claimedthat AT&T controlled nearly 40% of theworld's electronic-mail market.(28)
MCI has operations in 50 countries andits international networks cover Europe,the US and Hong Kong. In Australia itis associated with AAP in AAP Tele-communications, and in New Zealandwith New Zealand, second carrier, ClearCommunications. With Hong KongTelecom it operates a virtual privatenetwork service between the UnitedStates and Hong Kong providing lowerper call rates than direct dial services.(29)
France Telecom has been forming linksaround the Pacific for end-to-endtransmission. Deregulation of tele-communications in Japan has allowedFrance Telecom to form an alliance withInternational Telecom Japan (1TJ), and ithas been making use of deregulation inother national markets. In August 1991it took a ten per cent stake in an
international consortium - KaloriCommunications Group - of Bell
Atlantic Corporation, AmericanInformation Technologies Corporation(Ameritech), and Hutchison Tele-communications (Hong Kong). TheGroup hoped to become Australia'ssecond telecommunications company,however it was not to be, the KaloriCommunications Group lost out to OptusCommunications.(30) As someconsortium members already hadinvolvement in Telecom Corporation of
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New Zealand, France Telecom had beenpositioning itself for the creation of aPacific Rim telecommunications highway,linking Japan, Hong Kong, Australia,New Zealand, and the USA.
Hutchison Telecom is a recent newcomercompared to the other competitors and itconcentrates on non-wire services.However it is an aggressive competitor intelecommunications and has established aworld base in mobile telecommunic-ations. It has a one third share inAsia Sat 1 with Cable & Wireless and hasjoint ventures with other globaltelecommunications companies.
Low Earth Orbit - Iridium
Iridium presents the potential of a newsatellite based global communicationssystem to challenge the economics of theexisting transmission technology.Designed by Motorola and expected tobecome fully operational in 1996 Iridiumwill allow communication via cellularmobile telephone type low-cost handheldreceivers and use a constellation of smallsmart satellites that are placed in a lowearth orbit to provide continuous line-of-sight coverage.(31) Hutchison Telecomhas joined forces with Motorola in theventure.(32)
National Interest
Governments in the area arc aware thatthe international carriers arc interested inthe Pacific Rim region. They know thatimproved telecommunications will bringmore global companies to their area andthey are eager for those companies tolocate in their region to increase trade,production and employment, and raisestandards of living.
Conclusion
This communications infrastructure which
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is so necessary for business is thecompetitive area of the future. Entry intonational telecommunications systems inthe Pacific Rim region has beenfacilitated recently with the opening upof the telecommunication marketstructure, the technological changes, theinternationalisation oftelecommunications and the growth ofglobal information networks. The globalcarriers are interested in the area, butwhat will be the consequences and whowill own the information?
References
Sweeney, M. (1992), 'Privacy andTelecommunications: AUSTELReport', Communications Update,July, pp.16-17.Sec also evidence given at theHouse of Representatives'Standing Committee on legal andconstitutional affairs investigationof New South Wales IndependentCommission Against Corruptionreports on unauthorised disclosureof information. 'Private info leakclaim', CourierMail, 22 Oct.1992, p. 14.
(2) Chaum, D. (1992), 'AchievingElectronic Privacy',ScicntificAmerican, Vol. 267, No. 2, pp.76-81.
(3) There have been recentamendments to the Privacy Act inAustralia which limit the legalavailability of customerinformation.
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ganization and regulation,NorthHolland, New York.
(12) In Australia BTS and 'SixtyMinutes'.
(13) The Japanese Research Institute
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(1991), 'Trade in services andJapanese Economy', in UNCTAD(1991), Services in Asia and thePacific: Selected Papers, Vol.2,UN, New York, pp.258-291.
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(15) Dixon, W. (1991), 'How Ford isbuilding a communicationssuperhighway' Siemens Review,2/91, pp.4-8.
(16) hid
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Tucker, K.A. (ed ), Economics ofthe Australian Service Sector,Croom Helm, London, pp. 143-66.Tucker, K. and M. Sundberg(1988), international Trade inServices, ioutledge, London.Porat, M. (1977), The InformationEconomy: Definition andMeasurement, US Department ofCommerce, Office of Tele-communications, Washington,Special Publication 77-12(1).
(18) McLuhan, M. (1964),Understanding Media TheFxtensions of Man, Mentor, NewYork.
(19) Riddle, D.I. (1991), 'Fostering theGrowth of New Service Exportsfrom Developing Countries', inUNCTAD(1991), ServieesinAsiaand the Pacific: Selected Papers,Vol. 2, pp. 292-340.
(20) Riddle, D. and M. Sours (1984),'Service Industries as GrowthLeaders in the Pacific Rim', AsiaPacific Journal of Management,Vol. 1, No. 13, pp. 190-99.
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(22) Pclton, J.N. and T. Lida (1992),'21st Century Satellite Options forthe Asia-Pacific: A Co-operativeUS-Japanese Study', ETIL2Proceedings, pp.801-814.
(23) Riddle, op.cit p.294.
(24) Langdale, J.V. (1989),'International telecommunicationsand trade in services',Telecommunications Policy, Vol.13 (3), Sept., pp.203-221.
(25) Fell, L. (1990), 'The GATTCrossroads', Hub, May, pp. 6-7.
(26) Bakunowicz, G. (1990), 'CanAustralia become the Asia/Pacifichub?', Australian Communicat-ions, Nov. pp. 44-56, see p. 47.
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(28) Stine, S.F. (1991), 'Hong Kong'sHutchison Telecom, AT&T setJoint-Venture Accord', The AsiauWall Street Journal, June 21-22.
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(30) Gray, J. and B. Brown (1991),'Kalori to put up against Telecom',Australian Financial Review, 8Nov. p.5.
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(32) Hutchison Telecom personalcommunication
7 19
The Market for Multimedia Distance Education for Corporate Training
in Japan-US Business & the Management of Information Technology
by
Larry R. Cross, Ph.D.Japan-America Institute of Management Science (JAIMS)
Honolulu, Hawaii .
1. ABSTRACT
Some telecommunications project in the Pacific region fail due to an
inadequate understanding of product/service initiatives vis-a-vis
the global marketplace. This paper studies the marketing ofdistance education for students of business in the Asia-Pacific
region. The educational impact and management of new information
technologies such as cyberspace are explored. Related issues such
as intercultural groupware and Moore's Law are also considered.
Key Terms: Market, Multimedia, Intercultural Distance (Adult)
Education, Corporate Training, Telelearning, Cross-cultural
Management, Groupware, MUDs(Multi-User Dimensions), VirtualEnvironments, Artificial Realities, Moore's Law, & Cyberspace.
2. INTRODUCTION, METHODOLOGY, & HISTORICALCONTEXT
When I originally submitted this paperproposal shortly after the successfulconclusion of PTC 1992, I thought this wouldbe a relatively easy paper to write anddeliver. Building on our January 1992demonstration of the JAIMS videoconferencingsystem (VCS) and network, I was under theimpression that it would be comparativelytrivial to extend, refine, and furtherdevelop our educational applications for awider audience. How wrong I was! In retro-spect this has been one of my most challeng-ing endeavors, primarily because of thecontinual revolutions and speed of advancein the emerging technologies of multimediain particular and information technologies(IT) in general. Moore's Law of computingpower doubling approximately every year iscertainly alive and well in Hawaii aselsewhere. Let me give you a recent exampleof our purchasing decision for a laserprinter. The new model was enhanced from300 to 600 dpi which is twice the resolution(for the same price of $1595) as last year'smodel, but now equipped with 8 megabytes ofRAM. This is more RAM than the internalmemory of the computer to which it was beingattached as only a high-quality outputdevice!
At the outset it is important to define ourkey terms. Definitions of other vital wordsin the title of this paper will be statedbelow. However, at the beginning it shouldbe understood that education is broadlyconstrued for the purposes of this paper.We do not make a big distinction betweentraining and education as they arecomponents in the spectrum of human resourcedevelopment activities that are criticalcomponents of the life-long learningprocess. Some authors maintain thateducation is longterm; whereas, training iswhat you do to dogs in the short-run. Theneat compartmentalization of post secondaryeducation into a 4-year degree followed bygraduate school is rapidly breaking down.In many parts of the world a 3-year under-graduate degree is the norm. The shelf life
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of any degree having to do with informationsystems management, especially in thecontext of the significant bilateralrelationship between Japan and the US isdecreasing at an alarming rate.
Allow me to offer one example to illustratethis crucial point. One year ago, a well-respected professor of Decision Sciencesreceived teaching awards for his instructionin telecommunications at the graduate level.This Ph.D. was particularly well-versed inLANs and traveled throughout the Asia-Pacific region delivering seminars on LANsand related topics. However, his researchinterests shifted and his teachingassignments were changed. As a result afteronly one year of benign neglect, he becameunqualified to speak on the same topic foronly a 2 hour presentation. Somepsychologists tell us that the average humancan learn at the rate of 4 chunks per second(whatever a chunk is). For a professionalto remain abreast of the fast-movingdevelopments in the management of infor-mation technology s/he must be continuously"chunking down" bits and bytes of newinformation. So where does training end andeducation begin? I think it is largely amoot point. Whatever we choose to call it -
- education, training, or learningsuccessful corporations in the future mustdo more of it, faster, cheaper, and better.
By way of chronological perspective, in theglobal recessionary environment of spring1992, JAIMS was encouraged to conduct marketresearch into the satellite business oppor-tunity for extending our core competenciesin cross-cultural management and communi-cation. We employed a tradi-tional surveyquestionnaire methodology but conducted thesurvey using telecommuni-cations technologyby administering an untraditional one-minuteFAX/FAX back form. The form was sent to 250of the Fortune 500 companies with which ourmanagement partner already had establishedgood business relations. Even though themethodology was intriguing, the response wasdiscouraging. The deployment of business TVfor cross-cultural corporate training toimprove US-Japan business may be viewed as
7 2 U
an example of technology push rather than
demand pull or in other words, atechnological solution in search of aproblem.
Next, in response to several ongoingexpressions of interest from ASEANcountries, in the summer of 1992, JAIMSdecided to conduct a pilot study of themarket for high-quality, MBA-type courseworkelectronically delivered on-site to one ormore ASEAN nations. The results wereencouraging but not indicative of a strongdemand-side pull for the technologies ofdistance education in the region. Thisrelatively weak demand coupled with stillunsatisfactory telecommunicationsinfrastructure in the region caused us toput this project on the backburner alongwith the aforementioned satellite businessTV possibility.
Even though we put these projects on hold,JAIMS continued to experiment and innovatein the utilization of our VCS. Forinstance, in June 1992 we co-hosted a high-level conference with a representativecross-section of participants from academic,governmental, and corporate communities ofdifferent regions to facilitate thereunification of North and South Korea. At
one point in the discussions, is becameimportant to contact a specific member ofPrime Minister Kiichi Miyazawa's Cabinet.This we accomplished at the flip of switchon our VCS console in order to capture thefull meaning of the intended communicationsin both directions, including subtle, non-verbal cues which research indicatesaccounts for approximately 93% of thecommunication from facial movements andvoice tones.
Another path-breaking distance educationapplication occurred in the following month(July 1992). A professor of marketing wasteaching an AACSB-accredited course inJapanese marketing in the cooperativeprogram between the University of Hawaii andJAIMS, known as the JEMBA/JMP (Japan-focusedExecutive MBA/Japan-focused ManagementProgram). As part of his curriculum heassigned the Harvard Business School casestudy on SONY. Our international MBAstudents drawn from over 15 countries ineach cohort class, presented their analysisnot only to their fellow classmates, butalso in real-time to the current productmanagers at SONY in Tokyo while the studentsand teacher remained in sunny Honolulu,thanks to the "magic" of VCS.
In the Asia-Pacific region there are otherschools, programs, and projects making gooduse of instructional technologies at thegraduate level. One of the more innovativeenterprises in this regard is the FieldingInstitute which was recently written up inTechnological Horizons in Education (1).Other noteworthy educational efforts thathave come to our attention are the NetworkCommunication College of the Pacific (NCCP)and the distance education proaram at theNee Ann Polytechnic Institute of Singapore.The Asia Pacific Economic Cooperation (APEC)is also studying significant enhancements toits existing electronic network.
These and other mind-amplification initia-tives could benefit from the emergingcompression/ decompression technologies suchas Wavephore which can piggyback viaimbedding in existing video signals to reachthe entire Pacific Basin. This breakthrough technology was announced at the endof summer 1992. By acting as a "parasite"on existing signals distance educators couldreach the entire Asia-Pacific Region (Figure1) .
Subsequently, during fall 1992, I firstheard the term cyberspace. Cyberspace hasmany definitions, but the following montageis indicative of the revolutionary breadthand depth of this unique, generic conceptwhich is not just another pretty technologyas I originally thought:
"Cyberspace: ... a new stage, anew irresistible development inthe elaboration of human cultureand business under the sign oftechnology. A new universe, aparallel universe created andsustained by the world'scomputers and communication lines... Accessed through any computerlinked into the system; a place,one place, limitless; enteredequally from a basement inVancouver, a boat in Port-au-Prir.-.e, a cab in New York, agarage in Texas City, anapartment in Rome, an office inHong Kong, a bar in Kyoto, a cafein Kinshasa, a laboratory on theMoon ... Everywhere and nowhere,a place where nothing isforgotten and yet everythingchanges ... A common mentalgeography, built, in turn, byconsensus and revolution, canonand experiment; a territoryswarming with data and lies, withmind stuff and memories ofnature, with a million voices andtwo million ayes in a silent,invisible concert of enquiry,deal-making, dream sharing, andsimple beholdingcorridors form whereverelectricity runs withintelligence. Through itsmyriad, unblinking video eyes,distant places and faces, real orunreal, actual or long gone, canbe summoned to presence. Fromvast databases that constitutethe culture's deposited wealth,every document is available,every recording is playable, andevery picture viewable. Aroundevery participant, this: alaboratory, an instrumentedbridge; taking no space, a homepresiding over a world ... and adog under the table. From simpleeconomic survival through theestablishment of security andlegitimacy, from trade in tokensof approval and confidence andliberty to the pursuit ofinfluence, knowledge, andentertainmen for their ownsakes, everything informationaland important to the life of
691 7 21
individuals -- and organizations-- will be found for sale, or forthe taking, in cyberspace. Therealm of pure information,filling like a lake, siphoningthe jangle of messages trans-figuring the physical world,decontaminating the natural andurban landscapes, redeeming themsaving them from the chaindragging bulldozers of the paperindustry, from the diesel smokeof courier and post officetrucks, from jet fuel fumes andclogged airtoorts, from bill-boards, trashy and pretentiousarchitecture, hour-long freewaycommutes, ticket lines, andchoked subways ... from all theinefficiencies, pollutions(chemical and informational), andcorruptions attendant to theprocess of moving informationattached to things -- from paperto brains -- across, over, andunder the vast and bumpy surfaceof the earth rather than lettingit fly free in the soft hail ofelectrons that is cyberspace.(2)
The above are merely indicative highlightsof an intensive literature review that Iconducted (3). One thing that emerged loudand clear from this review of the relevantliterature is that multimedia is but onesubset of a long list of subsets within theover-arching superset now being calved byspontaneous consensus, cyberspace.
During the remainder of this short piece,I'll focus on some of the issues andimplications arising from an in-depthinquiry into the key words and constructsutilized in the title of this paper. Thenew technologies of virtual reality andartificial environments cause us to questionour very understanding of such common termsof distance (adult) education, multimedia,and global management. Nonetheless, let'sstart with a consideration of thefundamentals of marketing.
3. MARKETING & THE MARKETPLACE
A basic marketing plan should at leastaddress the 4 Ps: 1) Price, 2) Product, 3)Promotion, and 4) Position. Perhaps thefirst order of business is to formulate acrystal clear image of the product. For thepurposes of this paper our "product" isIntercultural, Multi-media, Distance (Adult)Education.
For the past 20 years, JAIMS has beenengaged in intercultural education forglobal managers. In our graduate programsour adult student body has had an averageage of about 30. This cross-culturalmanagement component of our "product," whichis really a service activity in this case,is positioned historically quite appro-priately as a high-quality experience thatbuilds practical application via internshipson top of a solid theoretical foundation.However, the new dimensions have to do withextending the availability of the productvia distance education and enhancing itsquality via the multimedia format.
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Okay, but a) what specifically constitutesdistance education and b) how multimediashould it be? To utilize some technicaljargon we could rephrase the questionsomewhat as follows: "How much bandwidth isreally required for educational communi-cation and how much of full-motion video ofhuman interaction is redundant, distracting,and irrelevant?"
To pursue this point a bit further we shouldrealize that the market size for a givenproduct e.g., FAX, is a function of thecost/performance ratio. Consequently, howmuch greater would be the market for anydesired multimedia distance education ifdelivered in an edutainment format on a pay-per-view basis anytime. anywhere e.g., TVscreens at home, PC displays at the office,wireless laptops in the air, PersonalDigital Assistants (PDAs) while waiting intraffic jams, and so on? This is thecentral question that will be addressed inthe remainder of this paper, as we'llpospone a consideration of our pricing andpromotional policies for another time andplace.
4. MANAGEMENT
Just as marketing is generally conceived tohave four main components so does theclassical definition of management as: 1)
planning, 2) organizing, 3) delegating, and4) controlling. Even though it is difficultto manage the turbulent nature of theburgeoning constellation of informationtechnologies, we must do our best to copefor our organizations very survivals are atstake in academia as well as the businesssector. Information can be viewed as astrategic asset and deployed as acompetitive weapon. Even in education, thesuperior management of information tech-nologies would enable an enterprise to"benchmark" best in class professors,curriculum, courseware, etc., and deliverthese high-quality educational products andservices by competing in time, convenienceand cost to a wider audience than thoseschools utilizing inferior informationassets.
5. CYBERSPACE ENCOMPASSES ALL INFORMATIONTECHNOLOGIES
So, why and how does the sudden appearanceof cyberspace as a virtual reality affectthe topics under discussion in this paper insuch a fundamental and profound manner? Letus begin by realizing that text-basedcyberspace systems are already in dailyusage at JAIMS and elsewhere in theeducational world. For example, as part ofour regular curriculum and alumni networkcommunications our participants usebilingual word processors to break thelanguage barrier between Japanese citizensand the rest of the world, utilizing suchinformation utilities as Nifty-Serve (theJapanese counterpart to CompuServe).
Consequently, text-based cyberspace isalready here and everywhere. The heavyusers logged worldwide every minute on theInterNet is an example of this text-orientedvirtual reality. However, in the realm of
722
text-based cyberspace such as coursewaredelivered and "discussed" via some vendor'sversion of E-mail merely "tells;" whereas,some experts would argue that multimedia"shows" (2, 3). Now the revolutionary ideaof cyberspace is that it changes thepedagogical methodology of education (adultdistance education in particular) to one of"exploration" rather than (or in additionto) being told or shown. Preliminaryresults from primitive Multi-User Dimentions(MUDs) like HABITAT (5) process of explora-tion extends the categories of intelligencesengaged from symbolic telling, through thevisual senses which are shown, and indeedbeyond the visual into the kinesthetic realmof feelings and emotions. Business week (6)
reported, "Carnegie Mellon University'sJoseph Bates has created animated charactersthat exhibit emotions based on theories ofhuman behavior. The next step: Virtualworlds filled with creatures that caninteract with humans."
Many people are waiting for Moore's Law tocome to the rescue once again as currentlythese virtual creatures require the powerand speed of Silicon Graphic's Iris Indigomachine or even more sophisticated models toanimate the beginnings of the evolution ofartificial life. In fact, entire companiesare springing up to explore the implicationsof Moore's Law within the next millennium.
Perhaps an example from the proposed virtualJAIMS Juku will illustrate these importantdistinctions. As part of JAIMS newstrategic direction into Multimedia ResourceDevelopment (mRD) we have been creating,packaging, marketing, and distributing ourown Computer-Assisted Language Learning(CALL) software. Currently, our multimediaexplorer series software is largely text-based with some limited animation sequencesand sound bites. Consequently, this isprimarily in the telling and hearing modes.However, with high resolution, fast 3-Dcolor animation enhancements our softwarecould be upgraded into the visual mode.Yet, if such visually-oriented softw,,,recould be further upgraded to runinteractively in a MUD such as Fujitsu'simproved version of HABITAT, players (atlast count more than 10,000 worldwide)interested in learning the Japaneselanguage, practicing business protocol/etiquette, or exploring the Japanesemindscape could interact with computerprograms and/or icons and earconsrepresenting real teachers, characterized tolook like Japanese sensei. Naturally, thestudent-participants can stop by the nearest"headshop" to obtain whatever icon theychoose to represent themselves from merely agreen dot to a fire-breathing Godzilla.Therefore, the instructional designer andcurriculum developer will be evolving froman author/ wordsmith through a film-maker toarrive at the highest level of space-makeror environmental architect in the broadestsense of the words. The challenge for suchcurriculum designers is to truly use thegraphics and other unique features of a MUDsuch as "persona modification" to justifythe additional bandwidth requirements overand above existing text-based distanceeducation networks.
693
6. THE FUTURE
Obviously, one of the key components of anyeducational system is a first-rate, compre-hensive library. So what will the Libraryof the Future look like in CyberspaceUniversity (CyberU)? Not only will allsymbols be on-line and accessible fromanyplace at anytime, but images will also beconveniently searchable and able to beeasily spliced into video reports and otherdocudramas and so forth. Not only willexploring students seek out desiredinformation, but the library will pro-actively seek to inform the student whensome new information is entered intocyberspace that is useful for the student'sparticular selected path of developing theirhuman potential to the fullest possibleextent. In this regard, Xerox's recentannouncement of a 1/4 ounce "classroom"addressing information using a copyrightedpicta-glyph system will certainly find manyeducational applications.
Currently available is technology that willsimulate cross-cultural business negotia-tions that attempt to ascertain trueintentions, deception and lies, as well asthe accurate interpretation of stated orspoken content which only accounts for 7% offace-to-face total communication. Suchtechnology raises ethical concerns andquestions regarding whether it is per-missible to lie on substantive matters incyberspace. Certainly, the technologyexists already to detect such deceptions.Should it be deployed with or without theconsent of the observed?
So how far in the future is cyberspace?According to Faith Popcorn, one of the mostaccurate forecasters of future corporateprofit opportunities:
Some call it "cyberspace," otherscall it "artificial reality."What Virtual Reality is, is atechnology that makes it possibleto synthesize a world a3-dimensional, touchable,feelable, hearable, visible,interactive world computer-generated images and sensation.
To enter this world, aperson puts on some sort ofspecial clothing (at the moment,gloves and goggles)-- that getsconnected to a computer theexperts are calling a "HomeReality Engine." Gloves receiveand transmit data (Nintendo hasalready licensed a simple versionof it for its home games);goggles (some call them"eyephones") situate you by sightand by sound in the synthesizedspace. Pointing a gloved fingertransports you through the space-grasping an "artificial object"In artificial space sends veryreal sensations back to you viathe glove. Sounds very StarTrek, but Virtual Realitytechnology exists right now.(NASA and the military have themost serious applications at themoment..) Jaron Lanier of VPL
X23
Research in Redwood City,California, said in 1989 thatVirtual Reality could be inpeople's homes by the turn of thecentury. And that, of course, isless than ten years away.(7)
3-D is already up and running on SUN work-stations with inexpensive "filters andglasses."
Regarding the future for multimedia distanceeducation, the last thing I'd like to reporton was a very stimulating briefing Ireceived from Mr. Murakami at Fujitsu's newKawasaki reseirch facility in December 1992.I'm only now beginning to appreciate some ofthe implications of what I was shown.
Allow me to summarize some of the moresignificant developments one-by-one. A newgenre of entertainment via a Virtual RealityTheater (10' x 30' screen) with artificiallife-forms (virtual creatures) was recentlypublicly demonstrated. However, the educa-tional possibilities were also immediatelyapparent to some of the high-rankingexecutives in attendance. These virtualcreatures, known as Charlottes and Blobs(Binary Large Objects) display emotionfollowing a psychologically sound model ofbehavior. A general observation is that acommon hardware (HMDs, head-mounted-displays, datagloves, bodysuits--etc.)fixation is overemphasized. A lot of thebenefits of virtual reality can be obtainedby more comfortable human interfaces--e.g.,voice, keyboard, joy stick, or electricwand.
Speaking of an electronic baton, one of themost impressive demonstrations I witnessedwas two virtual families (like the tradi-tional Hatfields and McCoys) who didn't likeeach ether, but were eventually conducted tosing together via a human maestro onlywaving an electric stick. Naturally, theseare only the beginning steps, butdistributed CSCW (Computer SupportedCooperative Work) and other groupware forinternational project teams would seem to bea logical extension of this pioneeringprototype.
Not only do these "blobs" display emotion bychanging the color of their skins, puffingup their body, and so on, but they alsodemonstrated primitive rote learningcapabilities such as "follow the leader."Each blob was endowed with a certainpersonality; however, such traits can easilybe altered via pull-down menus asillustrated by Dr. John Bates of Carnegie-Mellon University (CMU) in the USA. Notonly are persona modifications relativelyeasy, but also environmental engineering incyberspace is comparatively easy andinexpensive. Consequently, a participant-student can create his or her preferredlearning environment and even alter it fromtime to time. Or a meeting/manager-facil-itator could rearrange the bargaining tableand chairs, negotiating environment, andpresentation room to fit each particularsituation.
7. CONCLUDING REMARKS
So given all of this chaos in globalmanagement and intercultural communication,what will JAIMS do in 1993? JAIMS intendsto keep "swimming into" cyberspace using theoptimal mix of IT available in ourtechnological environment at each purchasingpoint in time. If in doubt, we'll wait forMoore's Law to run its course which isprojected to start leveling-off by the mid-90s, at which time Fujitsu is planning onhaving Virtual Reality widely available onFM Towns PCs.
How much will edutainment in cyberspacecost? Nobody knows for sure. However, it'svirtually certain to cost less and be betterthan in the past. What will be the size ofthe market by the beginning of the nextmillennium? As discussed above, this is analmost impossible question to answer, butsuffice it to say that it's already growingrapidly and will be huge by the turn of thecentury.
ENDNOTES
1. Shapiro, Jeremy J., & Hughes, Shelley.(1992, June). Networked InformationResources in Distance Graduate Education forAdults.Education Journal Vol. 19, Number 11, p.67.
8- OS . got
2. Benedikt, Michael (Ed.) (1992). Caber
Space First Steps. Cambridge, MA: The MITPress.
3. Miller, Robert L., (Prod.) (1991).Virtual Reality promise. Tape 3 of 3.Westport, CT: Meckler Video.
4. Leebaert, Derek. (Ed.) (1991).Technology 2001 The Future of Computingand Communications. Cambridge, MA: The MITPress.
5. Rheingold, Howard. (1991). VirtualReality. p. 67, 309. New York, NY: Summit
Books.
6. Cover Story. (1992, October 2)."Business Week". p. 102.
7. Popcorn, Faith. (1992). The PopcornReport.. p. 109-110. New York, NY: HarperBusiness.
72694
New Directions in Asian Telecommunications II -- Russia'sReach for Global Impact Integration or Devolution?
By Steven A. Levy & Deirdre BuellCole Corette & AbrutynWashington, DC, USA
1. ABSTRACT
Since PTC '92, Russia has leapt forward with zeal to meet, and begin the hard work of overcoming, thelooming challenge of reconstructing its national and international telecommunications infrastructure.
Progress has required policymakers and commercial entities alike to address complex jurisdictional issueswithin and without the Russian Federation. Such issues include harmonization of the roles of governmentalauthorities and private enterprise; "privatization" of national and regional operations; creation ofregulatory structures and approaches at the national and regional level; inclusion of foreign participationin basic infrastructure. Add to these requirements 1) the taunting challenge of financing internaldevelopment without a fully convertible revenue source from domestic operations, and 2) the inherentdifficulty of meeting rising expectations of the domestic and international market in the face of limitedfinancial resources and sheer man power limitations.
Nevertheless, as summarized herein, Russia has developed a master plan for network development: an apparentregulatory blue print for a coexisting national infrastructure and interim, short-term service upgradesfor prime customers; a tentative, evolving resolution of the roles of domestic and foreign industrialparticipants and governmental bodies. More definitive solutions are in process within the Parliament.And, in terms of meeting operational objectives, Russia is at a point where future plans for a completenew basic network complex can at least be discussed as initial major upgrades move into the procurementphase and beyond.
presence must continue to overcome several
2. INTRODUCTION conflicting factors. Political fragmentationwithin Russia threatens the establishment of a
Following the collapse of the Soviet system in stable economy, and economic disintegrationDecember, 1991, Russia has begun in earnest the could deprive the telecommunications effort oftask of rationalizing its telecommunications important economies of scale and coordinatedinfrastructure and the institutions that support administration. At the same time, Russia'sthat sector. dependence on western technology requires
accommodation of western investment andAlthough one element of this rationalization is maintenance of a stable climate for jointthe de-evolution of vestiges of central planning development. Furthermore, Russia's full
through the sponsorship of telecommunications international presence requires capital to
joint ventures and joint stock companies of acquire through capacity on interconnectedvarious regional significance, there is a facilities used to terminate traffic at distantcountervailing trend toward centralized destinations.management and control of key internationalfacilities and network centers. Russia appears The Russian national carrier, Intertelecom'to have accepted the assumption that its global (formerly Sovtelecom), and its regionalreach depends upon its ability to leverage the affiliates seek to preserve its front line
scale of its market through the effective status in this market as the major interface forconsolidation under state enterprise control of Russia in the international realm. Beneath the
the major gateway systems and associated surface, however, lies growing pressure forinfrastructure. The need to attract Western autonomy on the part of Intertelecom's localtechnology has also been incorporated into affiliates, and on the part of joint ventures.Russia's planning, and new CoCom policies and In addition, municipalities and regions arestructures has allowed progress in this seeking their own independent status and
direction. identity in the realm of telecommunications.Moreover, Russia remains dependent on foreign
The consolidation of Russia's telecommunications partners (e.g., Japan and Korea) to whom it mustnetwork supports five main objectives: hand off traffic for international termination.
These partners, in turn, are competing for the1) To ensure a coordinated internal primary right to provide this service.development;
2) To reinforce Russia's privileged status asa telecommunications bridge among the nowindependent Republics of the former USSR;
3) To exploit nationwide geographiccircumstances through reconstituted nationalprograms, such as TSL (the "Trans-SiberianLine"), which may generate earnings andinvestment attributable to Russia's natural roleas a telecommunications "transit" bridge betweenEurope and Asia;
4) To fully integrate Russia into the globalcable and satellite grid, so that Russia maybecome a "player" in the world market;
5) To develop a technology base.
Russia's drive toward self-sufficiency intelecommunications and a more active global
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The acid test will come in 1993 when the mainenterprises are privatized. As structured, theprivatization program will provide incentives tomaintain centralized, nationwide establishments,but there is the potential of equal magnitudefor fragmentation. The fragile balance betweennationwide networks and new regional players,some with western investment support, will beplayed out, as will the opportunities forforeign interests to assert a role in theevolving development of Russia'stelecommunications structure. At stake in thefinal analysis will be Russia's ability tocommand the glc'.al market in proportion to thepotential scale and scope of its traffic andnational economy.
3. HISTORICAL OBSERVATIONS
Before turning to the current situation, it isimportant to acknowledge certain historicalfeatures that have shaped the existing
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telecommunications baseline. Historically, thetelecommunication sector was neglected in theformer Soviet economy because of a prejudiceagainst "nonproductive" activities. In thehighly centralized economy, a publictelecommunication network was not required forbusiness purposes and Soviet leaders were waryof citizen access to communications facilities.The system was designed to serve official andadministrative rather than consumer, needs. TheSoviet network thus evolved as a rigidhierarchical structure that responded poorly touser demands.
Telecommunication development first appeared inthe former Soviet Union's 1966-1970 Five YearPlan, which called for a unified automatedsystem of telecommunication ("EASS").' The EASSwas intended to be an integrated network withthe capacity to carry voice, video, and datatraffic. Little integration took place,however, during the five-year period.
The focus intensified when, in 1985, the CentralCommittee and t1.2 Congress of the SovietCommunist Party called for a restructuring ofMinSviaz, the Ministry of Communications. ThePrime Minister initiated a program for telecomgrowth and converted some militarycommunications manufacturing to civilianproduction. The plan from 1986 to 1990 soughtto incorporate 12.1 million new lines, initiatea move to semi-electronic exchanges, andintroduce optical fibre and digital technology.The plan's emphasis was on residential systems,with 75% of the new installations to beresidential lines. The goal of MinSviaz was toreach 90 to 100 per cent urban penetration and50 percent rural penetration by the turn of thecentury. Attaining this goal would require theinstallation of 60 million lines during the1990's.
Former President Mikhail Gorbachev initiatedreforms of the highly centralized structure, andthe administration placed telecommunication atthe forefront of development and growth. Onemillion new lines were installed each year from1980 to 1985, and two million lines were addedeach year from 1986 to 1990. The network wasaltered to make residential service a priority.
While impressive, these developments did littleto remedy the fundamental deficiencies in thepublic network. At the present time, it isprojected by the InternationalTelecommunications Union, for example, thatcompletion of a core network will require theaddition of 26.5 million lines at a cost of$39.9 billion over the next eight years.
4. RUSSIAN TELECOMMUNICATION TODAY
Despite the centralized Soviet structure, theRussian Republic oversaw telecom policies,procurement, and network installation within itsown boundaries, and had its own technicalresearch and development institutes. Today,Russia's control over its own telecom system hasexpanded further with the dissolution of theall-Union MinsViaz.
In Moscow, local communications are organized byMGTS, which serves 3.8 million local phonesthrough a network of terminal and districtPABXs. Interdistrict bridges are connection tonine intercity bridges under Intertelecomthrough a combination of satellite, microwaveand ground cables. Calls are routed within theintercity network through 12 automatic switches,one for each NIS region. Special industry anddepartment networks are connected to the 12 maintrunks. Trunks exist between the variousswitches and the Moscow intercity network, which
Intertelecom used for diverse routing. Theinternational switches are the Intertelecomswitch number 10, as well as the Kiev switch,which is operated with AT&T.
These will be replaced with high capacity,digital switches at Moscow and St. Petersburg,sized to handle the inflow of traffic from newinternational cables (e.g., Russia-Denmark)under project finance and revenue leasearrangements. Intertelecom, while ensconced asthe gateway operator, must pay over a share ofthe hard currency earnings from theinternational settlements to (1) the lessor ofthe switches (U.S. West) and (2) theunderwriters of the cable link. Similararrangements will be implemented for other
international trunk lines, switches, andconnecting routes.
Intertelecom is a joint stock company formedinitially on an all-Union basis. It is in theprocess of being reconstituted, and ultimately,it is slated for privatization. Russia holds 72percent of the shares, with the remaining 28percent allocated amongst 25 long-distanceoperating companies across the NIS. Seventy percent of Intertelecom's facilities are in Russia,although the company owns equipment andinstallations in other former Republics.
The current Russian master plan anticipates thecreation of a major backbone system, consistingof int..?mational fiber optic undersea feederlines and land extensions in northwest andsouthwest Russia, and in the Russian Far East.A connecting microwave trunk among these lineswill extend from Moscow across the Urals andSiberia, on to Khabarovsk. In 1992, theRussians began the construction of the Denmark-USSR undersea link through the Baltic, and theinstallation of land extensions to St.Petersburg and Moscow (via fiber to St.Petersburg and microwave to Moscow). The links'completion is expected in 1993. The southwestundersea/terrestrial cable link from Italythrough the Black Sea to Moscow is entering theprocurement phase, and there is a tenderoutstanding for the Russia-Japan-Korea underseasystem that will link eastern Russia (Nakhodka,Vladivostok, and Khabarovsk) with Korea andJapan and, eventually, the Pacific cable grid.The final bridge, connecting all the otherelements of the backbone, will be TSL ("Trans-Siberian Line") from Moscow to Khaborovsk, whichis in its initial procurement phase withtenderers invited for the design, supply,installation and commission of a microwave linkextending approximately 7500 kilometers andproviding 8 X 155 Mega-bit traffic channels.Intertelecom plans to synchronize the start-upof TSL with the projected early 1995 servicedate for the Russian Federation optical fibersystem in the West and the internationalgateway/Russia-Japan-Korea submarine cableproject.
In sum, these projects represent a grossinvestment total of at least $500 million. Thegoal is to provide initially internationalconnectivity by connecting these facilities viainternational switching centers supplied by U.S.West at St. Petersburg, Moscow and in the FarEast. The associated revenue will cover thefinancing costs. Upon completion of TSL, Russiahopes not only to connect the far ends of itsterritory, but to also position itself to earnlucrative transit revenue stemming from Asian-European traffic. Russia would sell "droits depassage" ("DDP") and thereby fuel the cashrequirements for further improvements.
7PC696 ""
Intertelecom is the sole Russian entity in theseprojects, and it has maintained a steadfastresistance to the participation of Westernpartners in the operation and direct earningsfrom the planned network, although foreignparticipants have been tapped to front thecapital costs in exchange for a specifiedrevenue share.
Significantly, this master plan for what willemerge as the "Vzamavyazanoy syetee svyazee," or"Integrated National Network," (known by theRussian acronym "VSS") does not and cannotaddress specific regional requirements and localline needs. Local networks remain under thejurisdiction of municipal phone companies, suchas MGTS. Regional systems have been ceded toforeign joint ventures, such as C&W's "MCC"venture with Intertelecom in Tyumen and GoldenRing.
As far as immediate "fixes" to problems ofinternational connectivity in major urban areas,"overlay" operators have been licensed toprovide international calling service. Clientssubscribe to special access arrangements tothese operations' switching centers. Theseoperators such as the GTE joint venture,"Sovintel," or the Belgium ATT venture,"Combellga," do not provide service to or fromthe Russian public at large, but they do fill aninterim need for premium business customers.The companies also do not interconnect domesticRussian subscribers internally. Theinternational service needs of these companiesand the public at large will ultimately requirethe full-scale development of the nationalinfrastructure under the "VSS" umbrella.
Other important potential network operatorsinclude various ministries that have access to
nationwide rights-of-way grids, such as theMinistry of Railways and the Ministry ofElectricity. The latter has alreadyparticipated in a new line from Finland to St.Petersburg. The former, in theory, couldprovide a resource for a trans-Siberiancrossing.
The legal right, however, to access of right-of-way for one purpose is not an automatic licenseto run a telecommunications operation. All suchactivities are subject to licensing. Thelicensing process determines not only the rightto operate, but also the status of a facility interms of its relation to the basic "VSS"network. Without proper and complete authority,there is no way that an operator can legally layclaim to participate in the internationalswitched traffic revenue and associated tollsettlements. Nor can an operator carry trafficto and from the public at large via the publicswitched network.
Absent such licensing, however, overlay"operators," may by-pass switches and provideinternational call-completion services to selectclients (hotels and businesses) that aretypically charged in hard currency. But suchservices require dedicated, separateinternational trunk lines organized by theoverlay company (usually via satellite) and acontract or, at least, a billing arrangementwith the local user. At the distant end aswell, such operations may be limited in theirability to reach the called party destination.Usually operators "resell" the terminatingsegment which is operated by a licensed PSTNentity. Return traffic to Russia can only berouted to connected subscribers, andopportunities for such operators are verylimited. Licenses must be obtained fromMinsviaz, which is not at all bashful aboutshutting down unlicensed operators. In late
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October, for example, Telecom Finland acceded toRussian demands and closed international linesserving the joint stock company "SovAmer," whichused Finland as a hub for completion ofinternational calls to the West. In the FarEast, a similar operator of OTC, which claimedlocal sanction in Vladivostok, was ordered shutdown for want of a federal license.
S. PROVISIONAL REGULATION IN THE RUSSIANFEDERATION
The diversity and complexity of the emergingtelecommunication market within Russia has
forced authorities to attempt a legal
rationalization of various cross-currentsoperating within the telecommunication sector.The first approximation was the Presidential 31July 1992 ukase (decree) which introduced theconcept of the "VSS" and promulgated acomprehensive set of "provisional" regulationson telecommunication networks in the RussianFederation. Most recently, the RussianParliament drafted a more comprehensive law thatelaborates upon the general framework by 1)
defining more clearly the distribution of
regulatory powers assigned to national,territorial and local levels, and 2) clarifyingregulations with respect to licenses, rates, anduser rights.
The initial legislation attempts to impose orderon an increasingly fragmented universe, while atthe same time it encourages the participation ofmultiple suppliers in the construction of the"VSS". The state, while no longer able orwilling to assert a monopoly over the supply ofbasic telecommunication services, neverthelessseeks to enforce network integration andnational standardization through regulatorysurrogates for collective ownership of basicfacilities and networks. The recent lawclarifies these objectives by providing adetailed break-down of each regulating body'srole in developing an integrated, reliable andcontrolled network. The envisioned "VSS" willbe a consensus of 1) the national backbone,coordinated by the President, Parliament and theMinistry of Communications (or a successor'Federal Communications Agency' ) ; 2) territorialor regional components, under the supervision ofthe oblast and other administrative units; and3) local units, under the operating control ofmunicipal bodies and individual enterprises.
A fundamental concept behind the emerging bodyof legislation is the basic recognition that the"VSS" is itself a complex of diverse networkswhich, with some key exceptions, must besubjected to regulatory discipline to ensuretechnical compatibility, fair pricing, anduniversal access. Detailed provisions are setforth pertaining to the establishment ofseparate networks serving the special interestsof national defense, security and state
administration. The legislation also reflectsa very progressive notion of user autonomy, bywhich specialized "departmental" communicationnetworks may be established by variousenterprises, ministries, institutions, and legaland physical persons, including foreign jointventures. Such networks would be comparable toWestern private networks and, subject to
compliance with technical compatibilitystandards, could be interconnected with the VSSand offered to the public, provided (as in theUS) no harm is caused to the network. The laweven allows resale of excess capacity to the
general public.
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In the scheme, none of the various elements ofthe "VSS" complex are permitted specialprivileges. The law declare, that allcommunication enterprises are estolished andfunction on the basis of diversity, equality offorms of ownership, and free competition. Thereis equal treatment under the new law,irrespective of whether the provider is a stateorganization or a private company, includingjoint ventures having foreign participation inaccordance with the general law -- providing, ofcourse, that such parties obtain officialsanction through the licensing process.
Regulators are charged with harmonization of thenetwork through standards-setting and complianceprograms supervised by the Ministry of Post andTelecommunications. In special cases, theMinistry can exercise some limitedresponsibility for the smooth operation of theintegrated network. Fundamental powers aregiven to the Ministry to ensure that no newlines, expansion of old lines, or management ofcomponents of the integrated network may beundertaken without specific authorization.Naturally, the Ministry also enjoys traditionallicensing authority over the use of the radiofrequency spectrum and the assignment ofsatellite orbiting facilities. Provisions ofthe law also permit regulation of incidentalelectromagnetic interference of non-telecommunication devices.
The recent proposals imply that, for the mostpart, rates are under the control of thecommunications administration. Aside from
services "of great social importance," however,the new law leaves it to the communicationenterprise to establish its rate. In thesecases the enterprise must inform theadministrative body of its rates during thelicense application and when any subsequentchanges are made. The legislation also reflectsmeasures to combat corruption, althoughinstances where providers engage in favoritismor rate discrimination are not expresslyprohibited. In special cases, free or reducedrate services may be provided, under thecondition that the administrative body whoseconstituency benefits from such dispensationmakes the service provider whole in terms ofoverall revenue. Thus, the interim law attemptsto balance public subsidization with an emerging"commercial" imperative. The owners of thecommunications enterprise must ensure that suchdispensations do not undercut the overallcommercial viability of the network; they mustobtain contributions for the enterprise tooffset revenue losses or reductions resultingfrom such discounts. In addition, the lawprovides a "consumer" bill of rights.
It is apparent that the Russians have attemptedto derive a unique system to meet their ownneeds on the basis of models drawn from diversesources in Western law and regulation. In fact,in some instances, the legislation transcendsWestern standards of progressive regulation; thediversity and competition model of the telecomnetwork is also extended to encompasscompetition into he delivery of mail. TheRussian market will thus be a very interestingone in which to operate, provided there issufficient resolve to pursue the legal regime toits logical conclusion and establish aneffective marketplace for basic and specializedservices alike. Success will also require thatthe economy as a whole be transformed into amarketplace system.
6. THE 10LE OF JOINT VENTURES
Currently, the ultimate source of developmentfunds and energies are Western carriers andtheir customer bases. The objective is forrevenue to fulfill general economic goals atnational and local levels, as well as thoseneeds that pertain to telecommunications.Historically, traffic imbalances have yielded a
net inflow of hard currency. This imbalancewill be preserved even as the circuit shortageis relieved, which otherwise should make iteasier, theoretically, to call out as well asin. Russia will probably suppress outgoingdemand in favor of incoming traffic, oralternatively, Russia will encourage overlays toenable outgoing collections from procuringcustomers to be levied in dollars. On theWestern side, the cost of using theinternational circuit will rise; an improvedservice will legitimize this price increase, andRussia will earn a higher percentage of hardcurrency from their ventures. Within Russia,costs to the customer will be kept at a minimum,as the government wishes to keep the service
affordable to the general public.
In the new climate, business dealings are lesscomplicated by an overtly political agenda,aside from the pressure placed on joint venturesto address social development priorities in
designated zones whose commercial potential mayrequire significant lead time to develop. Tooffset this problem, the Russians are preparedto offer long-term franchises and otherconcessions, but where short-term profits are athand, licenses of short duration are normal. Anexample of the former is the Cable & Wirelessjoint venture, Metropolitan CommunicationsCompany, which operates in the Western Siberianregion of Tyumen and the "Golden Ring" aroundMoscow. The latter is typified by the Sovintelventure which provides international voiceservices primarily to hard currency hotels andwestern businesses. Otherwise, the currencypotential in major traffic corridors is suchthat over the past year, the emphasis hasshifted from centralized structures towardsdiversity so as to increase the sources offoreign earnings. As concerns exclusivity, theRussians have begun to realize that multiplegateways may bring geometric increases in
revenue. In the Far East, for example, varioussponsors of fibre optic networks to Korea,Japan, and beyond are under consideration. Aslong as telecommunication is regarded as areliable source of hard currency, however, it
will be difficult to develop a viable,comprehensive strategy for structuring jointventures. The Russian side requires solepossession of the hard currency earnings frominternational activities.
Given all of the changes, the role of projectfinance will be the key to investment.Utilizing a sort of nonrecourse financing, bankswill obtain payments through the enterprise'shard currency profits, if the Republics do ,ot
pay the financiers otherwise. Other relatedissues include privatization and a new pricingmodel. All depends, however, on themacroeconomic transformation of Russia as awhole, including the construction of aconvertible currency as the ultimate measure ofasset and enterprise value.
7. PRIVATIZATION AND CURRENCY REFORMS
As the USSR disintegrated into its sovereignRepublics partly overseen by the NIS, so thetelecom infrastructure became a collection ofvarious fragments of former all-Union, republic,and local oblast-level ministries. Conflictingand parallel interests are at work
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simultaneously, and many developments appearunplanned and ad hoc. It is not always clear towhom potential foreign investors should betalking, or who owns the assets in question.Irrespective of what may emerge on a cooperativebasis, Russia has initiated substantive measureswith broad economic impact and particularrelevance to telecommunications. These measuresinclude the recent edicts related to foreignexchange and privatization.
Under the privatization program, both the publicand workers' collectives have the opportunity toparticipate in the ownership of large companies,such as Intertelecom, through statutorilyreserved blocks of stock (35 percent for
workers) or stock vouchers for the public.Managers can purchase a smaller (5 per cent)reserved block. A controlling block will besold through tender or auction, unless themanagement and work force can organize a
majority purchase at a price set by the
privatization authorities. If no Russian buyercan be found for control of the existingnationwide enterprise, then there s atheoretical potential for break up. Conversely,there is the possibility that the telephonesystem may become subsidiary to foreigninvestment. Indeed, recent rulings have made itclear that vouchers, which have been distributedto Russian citizens for use in the purchase ofphones in privatized entities, may be soldsecondarily to foreigners of "pooled" in managedinvestment funds.
With respect to controlling legal standards,Russia is clearly attempting to take charge ofits economic destiny. As a basic element ofsovereignty, the November 1991 edict governingthe liberalization of foreign economic activityestablishes the primacy of Russian currency.This principle is intended to minimize the hardcurrency exposure of telecommunication and otherjoint ventures to local service organizations,thereby conserving foreign exchange for theimportation of Western goods and services.Nonetheless, local jurisdictions willundoubtedly press for a stake in the hardcurrency earnings derived from internationalforeign exchange settlements.
Local telephone companies will be limited,however, in their purchase of foreign exchangefor imports, as it is fair to assume a seriousdeficit of foreign exchange reserves untilRussia is able to balance its foreign trade,hence there will be limited licensing. The
ultimate regulations may impede the localtelecos' ability to overhaul their systemswithout an import license for equipment andservices. The granting of such licenses may besubject to uncertain foreign exchangeavailability at the Central Bank. The savinggrace may be that telecoms is identifiedconsistently as a priority sector; it may begranted, either formally or informally, specialrecognition in the context of any licensingregime.
Perhaps tensions surrounding the currencyrestriction on local operators will be eased bypolicies to link all joint ventures with asocial improvement mission in local areas.Since its political reorganization, Russia hasbegun emphasizing the creation of "developmentzones." Telecommunication systems for suchregions are being initiated through jointventures. Recent negotiations with the RussianMinistry of Telecommunications indicate that,for proposed joint ventures seeking a long termconcession, Russia will advocate the inclusionof a telecom branch to a targeted developmentzone.
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1. To be renamed "Russcom" pursuant to its
privatization.
'1 2,
Visions of the Information Age - 2021 AD
Robert M. JanowiakNational Engineering ConsortiumChicago, Illinois, USA
1. Abstract
Dr. Jagdish N. ShethEmory UniversityAtlanta, Georgia, USA
Summarizing a delphi research study, forecasts are presented on quality of life,quality of work, technology, economics, government, regulation, markets,
corporations, security, education, energy and the environment.
2.0 Executive Summary
This research project was recommended by theNational Engineering Consortium's executivecouncil members. This paper is condensed from the"Research Study, included in the Consortium'spublication, "2021 AD: Visions of the Future".
The Consortium has an ongoing initiative, "CreatingOur Common Future", consisting of research,cooperative workshops, and symposia such as 2021AD, TechNeeds 2000, and InfoVision.
Recognizing that day-to-day management presentsmany challenges, often distracting from developingand focussing on a longer term vision, theseexecutives suggested a research study andsymposium to help them look into the future.
By looking far enough ahead, many shorter termconstraints are removed and visions of the futureemerge. What might the future hold for thecommunications and information industry? Willtoday's impediments still exist? What will the worldof 2021 AD be like?
Why 30 years? For many products, 30 years is aboutthe time from research laboratory to broadmarketplace acceptance. Touch tone deploymentwas offered to the marketplace nearly 30 years ago
i today has over 80% penetration. Facsimilemachines and VCRs have had shorter marketpenetration cycles but their underlying technologiesbegan in the 1950s.
To develop forecasts for 2021 AD: Visions of theFuture, the Consortium invited participation ofexecutives, researchers and academics who are veryknowledgeable in the communications andinformation fields. An extremely competent panel of136 provided the forecasts.
The panel developed 235 scenarios of the futurewhich were rated as to the likelihood of occurrenceand impact on world, society or customers.
The experts predict improved quality of life andimproved quality of work. Major forces forecastedinclude:
2.1 Global: World Right - Area Might.Communications and better relations between worldleaders will identify and focus on global problems
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resulting in agreements, regulations and laws.Regional areas will develop and mature includingthe European Economic Community, Pacific Rim,North America and potentially, the Middle East andSouth America.
2.2 Government: Fiscal Pain - Business Gain.Dissatisfaction with U.S. federal government andcongressional performance will result in requiredfiscal responsibility. The business sector will beencouraged to develop economic resources throughrelaxed antitrust laws and telecommunicationregulations. New forms of pricing and opencompetition will stimulate the development ofproducts and services.
2.3 Business: Market Needs - Corporate Deeds.The business environment will be more competitiveglobally with highly demanding customers. This willforce corporations to become market-driven andthink globally while acting locally. Corporations willdevelop a longer term focus and improve theirinfrastructure. Information and robotics will bewidely used to make individual custom productsefficient to manufacture. Over 90% of the Fortune500 companies will use ISDN.
2.4 Technology: Person Reach - People Teach.Technology will permit contact with a person via asingle phone number anywhere, anytime. Homeentertainment systems with supercomputer powerlinked to information services will result in ablurring of highly-effective entertainment andeducation.
2.5 Quality of Life - Quality of Work.Improvements in lifestyle, workstyle, security,education, environment, energy andcommunications/information will result in longer,more productive, and stimulating lives.
3.0 The World of 1961
To achieve a perspective of 2021 AD, it is interestingto look back thirty years to 1961. What was theworld like? What were promising newdevelopments? Could we have predicted the 1991world? Some of the 1961 statistics provideinteresting insights.
In the U.S., first class letters cost 4 cents andengineering graduates enjoyed hearty $7,000 annualsalaries. Women engineering graduates were almostnon-existent, numbering only 3 per 1000 graduates.
Just 16 years had passed since the end of World WarII. The rebuilding of Germany and Japan wascompleted but neither was a major economic power.
Japan had a breakeven balance of trade while theU.S. enjoyed a surplus balance of $2.5 billion. Thebeginnings of Japanese automobile and consumerelectronics were seen throughout the world. Small,uncomfortable, low quality cars and transistor radiosoffered only modest competition to marketdominant U.S. automotive and consumer electroniccompanies.
Germany enjoyed success at the low end of theautomobile market. The Volkswagon "Beetle"costing about $2000 offered reliable transportationand an air cooled engine. Americans bought thebeetle in spite of its origin as Hitler's car of thepeople.
Transistors were new and finding applications inconsumer and industrial products. In addition toJapanese transistor radios, Motorola and Philcointroduced transistorized televisions. Thus, a majortechnological shift began reducing size and cost ofconsumer electronics.
Color television was showing slow progress. Only$100 million was spent on station equipment andcolor televisions in 1961. Most consumers balked atthe high price and said "who needs it".
Television cameras and recorders were very large,restricting use to studio setting and requiring highwattage lighting. Richard Nixon's perspirationduring the television debate with John Kennedy wasattributed to these hot lights.
Portable camcorders and video recorders were notyet available. Consumer VCRs/camcorders wereproducts that would probably not have beenpredicted. Of course, no one predicted thesensational success of walkman.
Transistors were making inroads into a relativelynew area-digital computers. Some researchlaboratories were developing the predecessors tolarge scale integrated circuits.
The National Engineering Consortium held the 1961National Electronics Conference in Chicago. Manyof the 12,000 attendees were interested in a varietyof papers on digital computers.
One particularly well attended session discusseddiscrete control systems, an area principally donatedby analog technology. In fact, analog and digitalcomputers received about equal emphasis.
A paper was presented with a title that could verywell be billed today: Speech Recognition by NeuralNetworks. Also a new field called Synnoeticsattracted capacity attendance. This was an early
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discussion of the current artificial intelligence/expertsystems area.
At a plenary session, the young president ofMotorola, Robert Galvin, spoke of the need forcompanies to expand their markets globally. I lowprophetic these words were is clearly seen thirtyyears later.
In looking into the future, could the personalcomputer have been forecast in 1961? It wassomewhat uncertain that the digital computer wouldhave such far reaching applications especially inscience and engineering.
The microcomputer, required technologicaldevelopments in silicon and integrated circuittechnology, computer architectures and software.Entrepreneurial startups were necessary to exploitthe personal computer, since mainframemanufacturers showed little interest. Improvementsin disk memory and a wide variety of applicationssoftware were key ingredients.
Competition in the components industry includingthe Far East was necessary to fuel rapid developmentof the personal computer. All of these ingredientswere necessary to achieve the present status of thepersonal computer.
Even more difficult would have been predicting theAT&T divestiture. Of the events prior to 1961, theHush-A-Phone case was most telling. An FCC rulingthat the cup-shaped mouthpiece would "harm thenetwork" was overruled by the District Court ofAppeals. This ruling was a small but significantchange in AT&T's complete hold on the network.The Hush-A-Phone decision was soon followed bythe Carterfone and MCI decisions.
As this research project looks to 2021 AD, there willbe many factors unseen at this time which couldhave even more significant impact than the personalcomputer and divestiture. It is with this spirit ofventuring into the unknown that we assembled theexpert panel and sought collective visions of 2021AD.
4.0 2021 AD Study - An Introduction
The National Engineering Consortium's council ofexecutives recommended a study and symposium onthe future.
A 30 year time frame was chosen as typical fromresearch laboratory to broad deployment of product.Touch tone telephone service was at the researchstage in the 1950s. Today, nearly 30 years later,touch tone has over 80% telephone subscriberpenetration. Both black/white and color televisionshad similar penetration patterns.
Although the video recorder and facsimileexperienced shorter consumer penetration cycles,their research origins were in the 1950s. Today'sresearch may result in similar new products in 2021AD.
The project scope looked broadly at the
communications and Information fields includingmedia, broadcasting, publishing, newspaper,printing, computer, telecommunications andsemiconductors.
Invitations to leading corporations, researchlaboratories and universities sought panel memoerswilling to participate in a two wave, delphi-likeresearch project. A total of 136 panel membersprovided thoughtful contributions to the study.
The first wave questionnaire asked seven open endquestions:
What major scientific advances do you fo-ecastto have the largest impact on your organizationand what do you envision the impact to be?
What global changes and or events do youpredict and what will be their impact?
What will your customer of 2021 AD be like andwant?
What changes do you envision in thecompetitive environment?
What regulatory or government changes do youenvision and what will be their impact?
What changes do you envision in your industry'sproducts and services?
Other changes you believe important? Whatmajor events do you see as possible that wouldsignificantly alter your answers to priorquestions?
The richness of the responses provided the basis forthe second wave questionnaire. A total of 235 futurescenarios were developed within nine categories:
. Applications
. Competition
. Corporation
. Customer
. Education
. Energy and Environment. Government. International. Technical
For each scenario, panelists were asked to judge thelikelihood of occurrence by the year 2021 ADtogether with the impact on world, society orcustomers. Comments on each scenario weresolicited.
Scenarios were plotted on a likelihood/impact gridfor each of the nine categories. The grid axes werethe mean of the data for each of the twocoordinates.
This provided four quadrants:
3 High Impact I High Impact
LOw LikelthoOd High likelihood
4 Low Impact 2 Low Impact
Low Lkeliticod High Likelihood
Quadrant 1 is most important since panelists judgedthe scenarios both higher than average likelihood ofoccurrence and impact. Quadrant 2 also was higherthan average likelihood but less than average impact.The high impact Quadrant 3 scenarios were judgedto have lower likelihood. Finally, Quadrant 4scenarios were rated to be both low likelihood andimpact.
Analysis of both questionnaire waves and theirimplications produced very interesting visions of theworld of 2021 AD.
A logical model was developed centered on theindividual. What will the quality of life and quality ofwork be 30 years from now? The major impacts onthe individual are shown in below.
Energy -Environment
CommumcaDonsand Information
Lifestyle
Quality o Life
Quality of Work
Education Workstyle
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In a broader framework, society will have macro-forces which are reflected in the following model.
GovernmentRegulatory
Pam: -Bus.ness Gar.
Global
Wond Rgt -Area MO:
Quality of life
Quality of Woeic
Technology
Person ReaV, -People Teach
5.0 2021 AD Macro-Forces
Business
Market Neees -CorporXe Neap
Examining each element of the Macro-Force Model,the major impacts forecast by the panel are woveninto a vision of 2021 AD.
5.1 Global: World Right - Area Might
The global forecast for 2021 is basically upbeat.World Right presents a picture of improvedrelationships, communications, cooperation andinternational agreements. Area Might forecastsworld economic development and areadevelopment, as ideology is replaced by pragmatism.
Communications and better relations between worldleaders will identify and focus on global problemsresulting in agreements, regulations and laws.Regional areas will develop and mature includingthe European Economic Community, Pacific Rim,North America and potentially, the Middle East andSouth America. In other words, global competitionand alliances will be less on a country basis andmore on an area basis.
5.2 World Right
Leaders of major countries will meet frequently tofocus on world wide problems. Thiscommunications will further understanding andprevent major conflicts.
Global warfare will not have occurred, principallybecause nations and leaders communicate morefreely. Also, there is low probability that a war willtake place in which nuclear arms are used. In short,warfare will be localized and swiftly containedsimilar to what happened in the recent gulf war.
On the other hand, there is a high likelihood thatwar between the Arab states and Israel will haveoccurred. Such a conflict will involve the UnitedStates. Panelists from outside the United States ratedthe likelihood and impact of this occurrence highest,possibly because of the Iraq invasion of Kuwait andthe formation of U.N. Alliance.
Increased communications will highlight disparitiesin living standards. Countries who have standards of
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living lower than the aspirations of theirpopulations will see increased national tensions andrevolutions.
Governments will find it more difficult to maintainpoor standards of living as the inexpensive free flowof information informs both their populations aswell as overall world opinion. Terrorism will mostlikely continue but not have a major impact onsociety.
Nuclear, biological or other environmental disasterswill become more important to the nations of theworld. Global regulations and laws will bedeveloped to curb future disasters. The twenty firstcentury will be preoccupied with protection of theenvironment on a global basis.
Growing world populations will be moreconcentrated in urban settings. Ten cities will likelyhave populations in access of 20 million and anadditional ten cities will have 10-20 million people.Global hub cities will be formed for the free flow ofproducts, services, money, people and information.The growing world population will result in majorproblems in the food supply environmenr. Ourpanel considered this trend to have one of thehighest impacts on the overall world society.
5.3 Area Might
National economies will depend more and more oninterrelationships with other countries in the world.Over the next thirty years, worldwide markets will bemore open. Reduced trade restrictions andimpediments will stimulate trade among nations.
The world will be united into specific geographicareas having collaborative relationships similar tothe European Economic Community. Examplesinclude Asia, North America, and possibly LatinAmerica in addition to 1993 Europe.
The Pacific Rim is seen as highest likelihood tobecome a major political, economic, industrial andcultural power. Within Pacific Rim countries, Chinais unlikely to become a democratic country.
The European Economic Community will continueto unite and will remove nearly all transnationalbarriers. The EEC will have a common currencywhich will further trade and communications.
The remaining western European countries will jointhe EEC. It is also forecast that eastern Europeancountries including Russia will become members.
The United States, Canada and Mexico will develop acooperative consortium to compete with theEuropean Economic Community and Pacific RimConsortium. Within the world, the United Stateswill continue as a political and economic power, butits leadership role will be shared with othersuperpowers.
5.4 Government: Fiscal Pain - Business Gain
Dissatisfaction with U.S. federal government andcongressional performance will result in required
fiscal responsibility. The business sector will beencouraged to develop economic resources throughrealized antitrust laws and telecommunicationregulations. New forms of pricing and opencompetition will stimulate the development ofproduct and services.
5.5 Fiscal Pain
The U.S. government will undergo substantialchange over the next thirty years. Lack of leadershipand inability to curtail massive spending will triggermajor crises.
As Americans become more dissatisfied with thefederal government and congress, sweeping changeswill occur. Americans will demand congressionalterm limitations and more accountability.
Closely linked with the dissatisfaction of governmentwill be a rebellion and significant change in the U.S.legal system. The large burden on our economyforced by legal actions and liability claims will bereduced.
Americans will demand forced fiscal responsibilityfrom congress. Most likely, this will have resultedfrom the U.S. government's inability to curtailspending. Also, U.S. deficits will seriously affect boththe value of the dollar and economic stability.
Citizens will have to pay significantly higher taxesbut it is unlikely that the U.S. personal tax rate willbe greater than sixty percent.
As a response to these economic pressures, theUnited States will emphasize fiscal policy to controlthe economy, industry and social programs.Privatizing government functions may be one of theanswers. Our panel predicts that the U.S. Post Officewill have been privatized by 2021 AD.
The United States will become much more socializedin the areas of medicine, retirement and education.It is not clear how the economics of these forecastswill develop. Potentially, the government will workmore closely with the private sector in cooperativesocial ventures.
5.6 Business Gain
As the global market place becomes more of areality, the U.S. government will recognize thatcooperation between corporations will be vital tomarket success. The government will encourageintercompany cooperation to achieve globalcompetitiveness.
This will require working relationships betweencompetitors. Anti-trust laws will be relaxed so thatmore economic power can be applied for globalcompetitiveness.
Government and regulatory bodies will also realizethe importance of global competitiveness within theinformation industry. A new Communications Actwill have been enacted providing a coherent policythat fosters advances in all aspects ofcommunications services and products. The panel
did not foresee a new federal government regulatoryagency for the telecommunications industry.
Overall, a more cooperative environment betweenfederal government and industry will exist becausethe public will require economic gains that thegovernment is unable to provide except through theprivate sector. Also, the significant financialpressures facing the U.S. budget will require growthin gross national product to generate added taxrevenues for government programs.
5.7 Business: Market Needs - Corporate Deeds
The business environment will be more competitiveglobally with highly demanding customers. This willforce corporations to become market-driven andthink globally while acting locally. Corporations willdevelop a longer term focus and improve theirinfrastructures. Information and robotics will bewidely used to make individualized custom productsefficient to manufacture. Over 90% of the Fortune500 companies will use ISDN.
5.8 Market Needs
The customer of 2021 will be more demanding andpurchase only those products and services whicheffectively meet their specific needs. Informationand communication products and services will bemuch more readily available on competitiveofferings; thus, customers will purchase the bestvalue.
As the world becomes more complex and a broaderrange of products are offered, emphasis will be onsimplifying customer choices and meeting theirneeds.
Publishers and information providers will formalliances to serve customer needs. Workingagreements between cable, satellite, entertainment,publisher/information providers and telephonecompanies will be structured to offer effectivecustomer delivery of products and services.
Government deregulation and subsequent removalof regional holding company restrictions will permitboth competition and cooperation between majorindustry groups.
The demand and competition will foster continualupdating and new generations of products. Productlifetimes are predicted to average half of currentlifetimes. The impact on the corporate research,development, manufacturing and marketing will hesignificant.
Companies will be forced to develop uniqueorganizational structures, processes and marketdelivery mechanisms to achieve these objectives. Acurrent example is the personal computer industrywhere product life times are measured from monthsto a maximum of only a few years.
As technology becomes increasingly more availableto all, service will become a major distinguishingfeature between competitors. Service competitionwill intensify. Globally, deregulation and open
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markets especially within trading groups will meanthat the safety of protected home markets will besignificantly lessened.
Competition will be on a worldwide basis. Marketdifferences between nations will blur due tohomogenization of cultures. Art, music,entertainment, fashion and potentially language willbecome similar in most parts of the industrializedworld. Even lesser developed countries will haveaccess to inexpensive communications and beginemulating the western way of life. At the same time,market differences within a nation will increase asdemographic diversity increases.
This will result in products and services that will bedesigned globally but customized locally. Marketing,sales and services will still be major local issues andof more importance than the product.
There will be several competitive worldwidenetworks with interconnections to a network ofnetworks. Competition between the networks willbe fierce with commodity-like pricing. In theinformation industry, significant competitive trendswill result from cable, telephone and broadcastingcompanies all competing to proviue entertainment-information services to the home.
5.9 Corporate Deeds
Global competition will force corporations toassume the strategies of the most successfulworldwide companies. Successful U.S. corporationswill emphasize long term business and technicalstrategies similar to Japanese corporations. Theintense concern for quarter-to-quarter financialperformance will he lessened. The financialcommunity will respect Ind economically valuecorporations maintaining long term strategies.
Regarding corporate structures, the panel projectedthat both large conglomerates and niche marketfocused corporations will compete as they do today.There will be mergers, restructuring andacquisitions.
Mergers will occur between cable and telephonecompanies. At least two of the regional holdingcompanies will be merged or acquired. The highvolume printing industry will incur a majorshakeout and consolidation of companies.
Independent telephone companies will continue tobe acquired, although it was less likely that theseacquisitions would be principally by regionalholding companies.
Major telecommunication companies will notspecialize but will provide broad services in severalof the following areas: local exchange,interexchange, customer premise equipment, centraloffice equipment, and wireless.
Today's emphasis on quality will result in mostcorporations imbedding total quality conceptsthroughout their organizations. Quality will nolonger be an organizational unit but rather a way oflife for all employees.
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The variety of products and services available will besignificant. Through distribution channels,customers will be able to select products customizedto their individual needs.
Corporations will offer both custom andcustomizable products. An example of customproducts might be individually stylednewspaper/newsletter for specific market niches.Customizable products might include a customerdeveloped newsletter based upon the person'scurrent and changing interests.
Demographics will continue to put a premium onhuman resource management. The work force willbecome more distributed with telecommuting widelyused.
5.10 Technology: Person Reach - People Teach
Technology will permit contact with a person via asingle phone number anywhere, anytime. Homeentertainment systems with supercomputer powerlinked to information services will result in ablurring of highly-effective entertainment, educationand communications.
5.11 Person Reach
Customers will no longer be bound to the wirelinenetwork as they are today. Wireless personalcommunications will be commonplace. People willbe able to be reached anywhere, anytime.
A single phone number will be assigned to a person.Communications will shift from calling a place tocalling a person.
This easy wireless access will require sociallyacceptable methods of achieving privacy. Callscreening, redirection, storage and answering will allbe part of personal communications systems.
Personal communicators of the future will usecomputer and electronics technologies and be smallin size, possibly wrist watch configurations. Thetechnologies within the communicator will performbasic communications and also help organize andprovide information in harmony with the network.
Wireless personal communications will become partof worldwide intelligent networks which willmaintain person-location data bases. Many of theservices desired by the customer will be madeavailable through the intelligence in the network.
Nearly unlimited personal and data communicationswill be available because of new modulationtechniques and spectrum allocations. Also, wirelessaccess to local area networks and private telephoneexchanges will be preferred.
Improved battery performance resulting in a 10-50times increase in watt hours per kilogram willenable smaller portable phones with longercommunications talk time.
Personal communications may link to pocket sized
cL)
computers having workstation performancecapabilities.
5.12 People Teach
The title of this section is very much customeroriented rather than technology driven. PeopleTeach was chosen since our panel envisions asubstantially different home communicationsenvironment than exists today.
Undoubtedly, a new word will be added to theEnglish language which defines the integration ofpersonal computers, communications andentertainment systems.
These systems will be more advanced than today'ssupercomputers. Inexpensive, multi-terabytestorage will permit these systems to store extremelylarge amounts of information,
High speed data transfer to these mass storagedevices will permit downloading of video, audio andmulti-media information. Playback by consumerswill be on demand.
Education will be delivered to the home.Communications will permit interaction between astudent and teacher, other classmates or computers.
Panelists from telecommunications companiesforecasted that broadband switching and deliveryofinformation to over 50 percent of the householdswill occur by 2021.
Customers will have access to an enormous amountof information. Many more media channels will beavailable specializing in news, sports, comedy,cooking, home repair and a variety of other subjects.
Newspapers will be delivered electronically to thehome in printed or video displayed formats. Therewill be a blurring between entertainment andinformation. Interesting and entertaining formatswill make education fun.
People will communicate with their home systems byvoice. The new home systems will have builtininformation agents to easily find specific informationand handle many administrative chores.
A majority of entertainment and information usagewill be when the customer wants it as to opposed tocurrent direct broadcast schedules. People will beable to interact, play, communicate and haveteleconferences using the new systems coupled tobroadband networks.
Information will be easily available anywhere atanytime much like electric power and dial tone aretoday. Customers obtain customized information,sophisticated analysis and fast answers to questions.
Throughout the U.S. people will communicate byreal time video.
New computer/communications/entertainmentsystems will have life sized video displays which willbe flat, picture-like and three dimensional. These
new displays will be the next generation after highdefinition television.
5.13 Quality of Life - Quality of Work.
The hub of the macro-force model is quality of life --quality of work. Improvements in lifestyle,workstyle, security, education, environment, energyand communications/information will result inlonger, more productive, and stimulating lives. Thefollowing is the quality of life quality of workmodel:
Communicationsand Information
litesye
Quality of Life
Quality of Work
Education
5.14 Lifestyle
Aspects of lifestyle were discussed in the section:Person Reach -- People Teach. Technologies willplay an important role in communicating, educatingand enriching lives.
In the year 2021 AD, life expectancy will besubstantially higher than it is today. Medicalresearch will have made major strides. Diseasesfaced by the population today will be of lesserimpact. Devices will be implanted in the body tohelp provide medical diagnosis. Electricalstimulations of auditory nerves will allow manyhearing impaired people to hear.
The increasing life expectancy will present economicchallenges. Needs-based social retirement programswill be in existence. Other social institutions may beorganized to serve the aging population. There maybe a return to the extended family unit, possibly byadult children returning home to live with theiraffluent parents.
Of high impact but judged 50 percent likely is thedemographic shift, where the proportion of U.S.middle class will shrink with growth in both rich andpoor population segments. This scenario wouldresult in the U.S. population becoming more "haveand have not.''
The population will be more computer literate andreasonably comfortable with informationtechnology. Technology will interface more easilywith people so that a comfortable relationship willexist between persons and their machines.
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People will value services that simplify their lives.Technology will be an important supportingresource. People will request information in voice,written, graphical and video forms.
Talking to the intelligent agent (computer valets)within home systems will be much the dealing with atrusted assistant who can help in many ways.
Barriers of language communications will bereduced as automated translation systems become areality. Communications will be voice-to-computer-to-voice translation.
The pervasive amount and depth of information willmake privacy and security important issuers. Lawswill be enacted with strict penalties.
Personal communications will permit private timesduring which contact with other persons will beconducted effectively through screening andmessaging.
5.15 Workstyle
The work environment of 2021 will change fromtoday. Competition for highly skilled employees willbecome more intense. Companies will value theiremployees more. Increased training, education,security and incentives will be more commonplacethan today.
Lower level supervisory and managerial jobs willchange. Computer technologies will replace manyof the functions. These management levels willemphasize employee and customer relationshipsrather than information handling and processing.
Intelligent systems will offer support to managementat all levels. This capability will make analysis, riskassessment and decision making much morecomputer assisted than today.
Training will be very important. The acceleratedpace of business, changing technologies and globalcompetition will require a commitment bycorporations and employees to lifelong learning.
Employees will work about the same number ofhours per week as they do today. The most dramaticchange will be where they will work.
Corporations will encourage telecommuting ordistributed office environments. Work at home willincrease for many people especially those in thecreative and external contact segment parts of thebusiness. Effective person-to-personcommunications including telzconferencing willenhance work-at-home environments.
Engineers will perform design functions utilizinghome work stations and telecommunications.Service representatives will effectively interact withcustomers using corporate data bases.
There also may be work centers geographicallydispersed in communities. Employees will work insmall group environments.
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5.16 Security - Economic and Personal
By valuing employees more, corporations will beincreasingly concerned about their security.Retirement plans will become more important.
As the government restructures social retirementprograms, individuals will have to plan one or morecareers so that they might have sufficient lifetimeincomes.
Although taxes will most likely increase, they will beat manageable levels. Government programs toencourage retirement savings will be necessary toshift the economic burden from federal to personalretirement programs.
Additional government social programs will beneeds based. It will become evident that thegovernment is unable to solve many of the country'ssocial problems. Local community groups andcorporations will tackle problems such as educationand social services.
Privacy and security will be further facilitatedthrough the wide use of physiological identificationtechnologies including fingerprints, voice or retina.A variety of security systems will be available for bothpersonal and home use.
5.17 Environment - Energy
Over the next thirty years, there will be increasingconcern about energy and the environment.
The growing world population will result in majorenvironmental problems. Even in countries havinglesser population growth rates, risk management,pollution and other environmental effects must behandled.
The U.S. government will have enacted lawsspecifying a variety of environmental actions. Thesewill affect corporations and consumers.
Concerns about the environment will result in awide variety of programs. Conservation, recyclingand environmental controls will be effected inindustrialized countries. As problems become moreglobal, third world nations will follow.
Manufacturers will emphasize products andpackaging which will minimize environmentaleffects. Most products and packaging will hebiodegradable. Over 50 percent of products andpackaging will be recycled.
The panel forecasts a serious oil crisis which willaccelerate the further development andimplementation of alternate energy sources.Potentially a major redirection towards solar,nuclear and electric power will occur. Electricvehicles will be commonly used. We believe thisforecast may have been influenced by the gulf crisisat the time of study.
5.18 Education
The quality of the U.S. kindergarten through twelfth
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grade education system will still not be world classin 2021 AD. The panel forecasts that there is lessthan 50 percent likelihood that the U.S. K-12 systemwill be one of the best in the world. The presenteducation system will probably fail in its attempts toimprove K-12 education.
Private initiatives offer the best hope to improveelementary and secondary schools. Local citizens,corporations, businesses, and professionalorganizations will work together on this criticalnational problem.
Most states will require K-12 teacher certification.Good teachers will be recognized and rewarded.
There is greater than 50 percent likelihood thatstudents and parents will be able to choose theirpublic K-12 schools. Competition for students willfoster improved education.
Electronic technology will be increasingly importantin improving educational environments.Communications and computer systems will bewidely used in schools. Teachers will guide multi-media learning experiences.
There will be a blurring between entertainment andeducation. Information technology will presentlearning environments that will be both effective andfun.
Since over 50 percent of the U.S. households willhave computer-communications systems, educationin the home will be an extension of the schoolexperience.
Simpler methods of video publishing will encourageentrepreneurs to offer learning informationproducts. There may well be a similar phenomenonin multi-media learning products as exists today incomputer games.
Students will be encouraged to enjoy groupcommunications as well as person-to-personthrough life sized wall video displays.
5.19 Communications and Information
Under Macroforces: Person Reach People Teach,many of the technology trends applied to Quality ofLife Quality of Work were explored. Impacts onpersons, families and society beyond the technologywill be very significant.
The ability for a person to be always in contactthrough personal communications has simple butvery significant ramifications. Contacts and actionscan be handled whenever a person feels so inclined.These contacts do not have to be person-to-person.They could very well be person to messaging centersor to an intelligent agent for handling.
Even when a person desires privacy, a person couldbe reached by loved ones and professionalcolleagues. Alerts would occur in case of anemergency. Timely interactions will improve boththe quality of life and quality of work. Decisionmaking will be easier and relationships between
people will be improved.
Within home environments, artificial intelligence,fuzzy logic and advanced sensors will detectabnormal operation, diagnose and cause repair ofmost home products.
The captivating computer-communications-entertainment systems described before will be afocus for a rich set of interactions and services.
Entertainment and education will be blurred in thefuture. Many opportunities will be available to play,learn and create.
Interactions between individuals or groups will becommonplace. Electronic family gatherings willoccur to share experiences and see each other.Competitive games such as bridge may very well beplayed among four people in remote locations.
The drudgery of food shopping will be handled bythe intelligent agent. Just in time delivery ofgroceries will minimize home smiage and inventorycosts.
Since corporations will have to adjust to this newenvironment, focused marketing will emphasizeeffective techniques. Direct marketing will presentproducts and services not only to people but also tointelligent agents. The agent may well screenoffering sand make known only those that havepossible interest.
All of these impacts on quality of life are possible.There may well be other, even more powerfulopportunities. As the macro-forces of economicsand deregulation permit increased competition inthe information field a large variety of affordableservices will be available.
Since the presentation of information on demand isso new, the specific roles of advertisers, suppliersand consumers have yet to be established. Pricinglevels will change radically as marketing learns moreabout consumer price elasticity. Also, competitionwill drive prices close to costs.
Principal Investigators
Jagdish N. Sheth, Charles H. Kellstadt, Professor ofMarketing, Emory Business School, Emory University
Robert M. Janowiak, Executive Director, NationalEngineering Consortium.
The Principal Investigators thank the 136participants who developed and evaluated the 235scenarios. Their insights and visions provided therich forecast presented in 2021 AD: The ResearchStudy.
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DEVELOPING STRATEGIES FOR PACIFIC COMMUNICATIONS
John 11 ErbettaIndependent Telecommunications Consultant
Ipsden, Oxford, England
1. ABSTRACT
Trans-Pacific telecommunications is growing at a rapid rate,with the development of both Satellite and Submarine Cable Systems.
However, few of the Pacific Islands have derived real benefits. Thispaper reviews the issues involved, both technical and societal, andconsiders the basis on which a regional strategy could be developed.
2. INTRODUCTION
2.1 SCOPE OF PAPER
This paper considers the way in which strategicthinking can be applied to the development ofcommunications in the Pacific Region. In part-
icular it looks at some of the issues relatingto the Pacific Island states, both with regardto the rapid development of technology and toinfrastructure requirements.
The paper considers the particular needs of theislands, with special consideration of theirsize and geographical remoteness. This is alsoset against the requirements of the region as awhole.
Effective strategy should be closely tied intoaction and the need to further develop technologyand to provide adequate resourcing is examined.
2.2 PACIFIC ISLANDS
The precise definition of the extent of thePacific Region and hence the number of PacificIslands varies from one authority to another.Table 1 lists the islands which have been theprimary focus of this paper.
Seven of these island groups Fiji, Kiribati,Marshall Islands, Solomon Islands, Tonga, Vanuatuand Western Samoa are Pacific Island membercountries of the World Bank. The Bank noted (1)that the average growth rate of these countrieswas lower than other comparable countries andthat their substantial growth potential was notbeing achieved. Four reasons were put forwardas impediments to growth:
* Natural Disasters* Political issues (in some countries)* Concentration on building economic and
social infrastructure* Lack of private sector investment
Whilst most of the Pacific Islands are
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independent, a number prefer to remain asdependencies. Tokelau is one and is currentlydebating its position. One factor is that ofaid packages (2) a key component in the economyof many of the Pacific Islands.
2.3 TECHNOLOGY ISSUES
The development of new telecommunication systemsis primarily targetted at large users havingcomplex operational requirements. Economicallytheir complexity and high development costs canbe justified by increased capacity. This meansthat the cost per circuit actually reduces inreal terms. Submarine Cable Systems are a goodexample of this. In 1983 ANZCAN represented thelatest (analogue) technology. Now currentsystems such as NPC (using fibre optics) offercapacity over an order of magnitude greater.Costs have not increased by anything approachingthis level. For the future systems with substan-tially greater capacity are in development.
However, when considering a Pacific Island witheven a population of, say, 100,000, thesecapacities are irrelevant (NPC can provide around8,000 circuits per fibre). Special developmentsto meet the particular requirements of thePacific Islands are, however, impractical from amanufacturers viewpoint as such systems wouldhave to bear an unreasonable R&D conponent in thefinal equipment price.
2.4 SOCIETAL ISSUES
If the Pacific Islands are to keep in step withthe rest of the region then continuing investmentwill be needed to maintain that position.Failure will result in a widening gap. The realissue for communications development is firstlyhow that development can be co-ordinated across anumber of independent countries and secondly, howit can be supported in financial and politicalterms. The Acapulco Declaration (3) coveringLatin America and the Caribbean demonstrates onepattern - through national objective setting.
One factor that should not be forgottenis that improved communications may not
7 3 9
Status No of Islands Population
American Somoa US unincorporated T 7 36,260
Cook Islands NZ self-governing T 12 17,185
Easter Island Chile 1 2,060
Fiji Republic 110 727,104
French Polynesia French 30 188,814
Galapagos Islands Ecuador 6 7,994
Guam US unincorporated T 1 130,400
Hawaii USA 7 1,053,900
Kiribati Republic 21 63,883
Marshall Islands Republic 12 43,755
Niue New Zealand 1 2,531
New Caledonia French 6 164,173
Nauru Republic 1 8,100
Northern Marianas Independent - US T 16 20,591
Palau US Trust Territory 26 14,106
Pitcairn Island British 1 54
Solomon IslandsConstitutional
Monarchy20 285,796
States of Micronesia Federation 607 86,094
Tokelau NZ 3 1,690
Tonga Kingdom 169 95,200
Tuvalu Independent 9 8,229
Vanuatu Republic 80 142,630
Wallis and Futuna French 2 15,400
Western Samoa Independent 4 163,000
N.B. 1. No of islands indicates populated islands2. T is abbreviation for Territory3. All information is indicative only
TABLE I: Profile of Pacific Island Countries
be universally welcomed! The main con-concern is that of the smaller and remoter areaswho consider that good communications will leadto greater, but remote, bureaucracy. The placeof the subsistence sector is important in manyof the islands, indeed a study (4) of thissector in Tuvalu, the Solomon Islands, Kiribati,Western Samoa and the Federated States ofMicronesia indicated that 50 to 80 per cent ofthe population still get a major part of theirbasic need from non-monetary subsistence. In
these areas it is perhaps worth emphasising theother benefits that telecommunications can bringsuch as facilitating improved health and educa-tional services.
3. TECHNICAL INNOVATION
3.1 MIXED TECHNOLOGIES
In considering the development of telecommuni-cations technology it is important to recognisethe fact that almost all systems will comprisea mixture of both technology and standards.
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Currently both analogue and digital transmissionsystems frequently co-exist. In the area ofswitching various technologies are likely to beutilised and a variety of inter-exchange signal-ling protocols implemented. Whilst these itemsare under the ccrtrol of the local administra-tion the interface with International Circuitswill not be and in terrritories with small pop-ulations this is a more dominant factor than inmost of the world.
An additional issue is the use of radio systemsreaching the further, and less populated,islands and which can inhibit their integrationinto the global village concept.
3.2 SATELLITE SYSTEMS
The development of satellite systems for theregion is discussed in detail elsewhere. Suchsystems are becoming increasingly appropriateas the cost and size of earth terminals decreasewhilst ease of use increases.
Communications is not limited to voice contactbut can be extended to a wide range of appli-
cations and it is possibly this area that offersthe most interesting possibilities. PEACESAT
(Pan-Pacific Education and CommunicationExperiments using Satellites, a joint projectbetween the University of Hawaii and NASA is anexample of the potential for such systems.
However it must be recognised that, even bysatellite coverage standards, the Pacific is avast region and providing services targettedsolely at the Pacific Island countries is notlikely to be a self-financing operation. Thus
Pacific Rim countries are likely to continueas prime instigators of projects.
3 3 SUBMARINE CABLE SYSTEMS
Over recent years dramatic strides have been madein the development of long-haul systems movingto fibre-optic systems using, for current systems,regenerative repeaters but with optical ampli-fiers being in the advanced state of developmentfor trans-oceanic systems and with more advanceddevices in the research phase. However the maineffort is focussed on increasing capacity perfibre for long-haul systems. This has resultedin the cable capacity within the Pacific beingthe prerogative of the Pacific Rim nations, withcables being routed directly across the Pacific.The primary reason for the direct routing is thatthe cables are most at risk of damage in shallowwater where there is a risk of damage from fish-ing activity and at landing points.
The use of unrepeatered cables is becoming moreattractive as spans are gradually increasing.This approach to linking island chains is alsomore practical with the development of synchron-ous technology as 'rings' and 'drop and insert'facilities are available with little extracomplexity. However more studies are neededbefore such schemes can proceed.
3.4 RADIO SYSTEMS
The use of radio systems is widely used forcommunication in the region and covers a rangeof systems.
Microwave systems can provide 'backbone' linksbetween fairly close islands. As they areeffectively Lirv? of Sight systems they are moresuited to use in the mountainous islands, ratherthan atolls where range will be more restricted.As with other frquency bands, the propagationcharacteristics need local survey as the Regiondoes have some anomalies.
HF communication can provide fairly reliablemedium to long distance communications but withrestricted channel capacity. However it doesgive low cost linkages to remote areas.
Potentially there are a range of new techniquesthat could be investigated in the Region. Thepressure on bandwidth that exists in most of theworld is much more relaxed. Therefore studiescould be carried out into the use of variousforms of digitally based radios.
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3.5 SYNCHRONOUS SYSTEMS AND STANDARDS
Within the telecommunications world there areeffectively 3 groupings, European, NorthAmerican and Japanese. Each has an interest inthe Pacific. The latest set of standards fortelecommunications transmission were publishedby CCITT in 1989 as G.707, G.708 and G.709 andare known as the Synchronous Digital Hierarchy(SDH). In North America ANSI published itsSONET standards which are compatible with SDH.Variations still exist at the lower levels butmapping to higher levels can, in theory, bemixed.
Synchronous systems are designed to acceptexisting, plesiochronous, interfaces and willsupport future services such AsynchronousTransfer Mode (ATM), Broadband ISDN and Metro-politan Area Networks (MAN). However the mainbenefit is that it is possible to extract and/orinsert part of the capacity without having todemultiplex the whole. In addition a degree ofnetwork management functionality is integral tothe system and this permits the systems to bedesigned with inbuilt and automatic protection.
The impact of this technology is of mixedadvantage to the island nations. On the creditside is the fact that it is possible to conceiveof networks embracing many islands, providingroutings over satellite, submarine cables andradio, being remotely managed and providingresilient services. On the debit side is theproblem that probably no one country on its ownwould be able to justify such a scheme purelyfor its own needs (this is based on the trafficneeds that can be deduced from Table 1). Asolution depends on a co-operative venture as isdiscussed later.
3.6 NETWORK MANAGLMENT
Modern equipment is both complex and reliable.The inbuilt facilities of SDH further mean thatif a fault occurs then there is a high probabil-ity that it will be automatically recovered. In
such circumstances Network Management providinga friendly user interface to the system isessential.
Definitions of network tiers within a PacificIsland country will be on a different basis tothat normally considered. From a pure network-ing viewpoint it could be advantageous to treatthe entire grouping of the Islands as a singleentity. As will be seen from Table 1, thepopulation and hence traffic levels could bereadily accommodated in this manner. Howeverthe implications on sovereignty of the nationsis considerable.
A factor that impacts on this area is thepossibility of utilising the regional networkfor enhanced services as is discussed later.Network management is by no means mature and theissues of managing global networks are by nomeans insignificant. Even managing a corporatenetwork across a number of countries gives riseto a number of challenges (5). To manage aPacific wide network with interfaces to thePacific Rim countries is even more demanding.
4. DEVELOPMENT OF INFRASTRUCTURE
4.1 THE NEED
In considering the requirements fortelecommunications the most frequentbasis is to take existing usage and toproject future demand from this. Thisforms a reasonable assumption for thesituations where services and facilitiesremain at similar levels. However whena significant change occurs then demandincreases by a step and growth continuesfrom this new base. The introduction ofdirect dialling is a good example.
An alternative approach is to look atthe areas where telecommunications canbe developed in a wider sphere. This iseffectively exploring the possiblediscontinuities in demand for capacityand consideration is given in the follow-ing paragraphs to applications benefit-ing the region as a whole. Therationale behind this approach is thattraffic originating from person toperson calls is limited by the popula-tion whereas other applications haveeffectively no limit on their requirementfor capacity.
4.2 WEATHER FORECASTING
The issue of weather forecasting hasreceived an added impetus with thedebates on global warming. Three areascan be identified as being pertinent:
* Improved Regional forecasts* Monitoring of global warming factors* Monitoring the impact of regional
weather on the rest of the world
The impact of severe storms on low lyingatolls can be devastating. Substantialdamage to other islands also occurs fromtime to time plus the effect on thoseinvolved in fishing and transportbetween islands. Provision of a weatherforecasting system of the sophisticationof those in Europe or many other partsof the world will be a complex task butmay well be achieved, especially in viewof the following factors.
The recent, high profile, internationalgathering on climate change and globalwarming has had a major impact on thoughtacross the world. Within the Pacific this hasan importance on two fronts. Firstly some ofthe predictions indicate that global warmingcould result in a number of atolls, includingTokelau (3), becoming permanently submerged.This moves the issue from the academic to thepractical! The second area is the value ofmeasurements in the Pacific where it is possibleto make measurements unimpeded by industrialpollution.
Weather is not isolated to a particular regionbut is now recognised as a global system. It
is now recognised that a meteorological eventin the middle of the Pacific can have a major
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impact and lead to effects around the world.There is therefore value in increasing the amountof monitoring throughout the Pacific.
4.3 HEALTH
Despite the image of the Pacific being an idyllicparadise, the reality is that for many of thecountries the health prognosis is not good. Life
expectancy in Kiribati, for example, is 52 years.Whilst considerable variation exists between theislands it is clear that there is a real need.This is not to imply any criticism of those pro-viding health services in the islands. The
problem is that of scale and distance. Tuvalu
with its 8,229 population is an independentcountry with a 36 bed hospital and 4 doctors (7)covering 9 islands. Larger islands are betteroff in having greater number of medical personnelbut the problem remains that in smaller countriesit is almost impossible to provide the level ofhealth care that is enjoyed by larger nations.The reason is that whilst primary health care isavailable the higher levels are very restricted.
In studies of these issues (6) the need for'remote' tertiary health care provision isrecognised. The use of telecommunications forsupporting island health care teams is alreadyrecognised as a possibility and can be illust-rated in the potential of transmitting an X-rayimage for remote diagnosis. Obviously there are
more complex applications.
4.4 TRANSPORT
As air traffic increases across the Pacific sodoes the need for air traffic management systems.In a similar way shipping looks increasingly tothe use of communications and navigational aids.Both of these activities are closely safetyrelated.
Aircraft and ships carry both cargo and passeng-ers, indeed, in the commercial sector profitmargins are such that high load factors need tobe achieved if the operation is to remain inbusiness. To achieve these targets computerisedreservation systems are key and these aresupported by reliable communications. Many ofthe islands states now have their own airlinesand are seeking strategic alliances to buildtheir operations. This is then likely to betied in to the national tourist operation andthe hotels.
4.5 EDUCATION
In a similar way to health care, education canbe restricted by the small communities withinthe Pacific. Whilst basic educational (primary)facilities are good, bearing in mind the ruralsituation of the islands, provision at secondarylevels and above can vary. The University ofthe South Pacific, based at Suva, Fiji providesexcellent facilities for the II countries itserves. Its special importance is that itrecognises the difficulties of the countries itserves.
The potential for distance learning has increasedsignificantly as both technology and technique
have developed over recent years. This provides
the opportunity of developing advanced educationfacilities within the islands but withoutsignificant organisational overhead.
4.6 BUSINESS DEVELOPMENT
Earlier in this paper (Para 2.2) reference wasmade to the fact that one inhibiting factor inthe development of the Pacific islands was thelack of private sector investment. Modernbusiness is heavily dependent on reliablecommunications and this is likely to be anarea of their focus.
5. POLITICAL AND FINANCIAL INITIATIVES
5.1 REGIONAL CO-ORDINATION
One of the features of the region is the
plethora of intergovernmental organisations,each of which provides a different perspectiveon the region. However, whilst many of theseorganisations have a direct interest in thedevelopment of communications none of them isable to provide a comprehensive regional over-view. The South Pacific Forum, with its 15member states (Australia, Cook Islands, Feder-ated States of Micronesia, Fiji, Kiribati, Nauru,New Zealand, Niue, Papua New Guinea, Republic ofthe Marshall islands, Solomon Islands, Tonga,Tuvalu, Vanuatu and Western Samoa) provides thebest representation of the South Pacific regionbut does not pretend to look at the Northernand Eastern boundaries of the Pacific.
The World Bank and the United Nations bodiescan provide a independent (i.e. non-aligned)stance. However to maintain this independencerequires a careful balance to keep a consensus.
"Sometimes social and cultural factors may out-weigh sound economic reasoning in the develop-ment of public policy" (8). This principle canbe applied to both Pacific Island countries andalso to Pacrim countries.
Other major bodies include the APEC (Asia-PacificEconomic Committee) working group on telecom-_munications, COTAT (ASEAN Committee on (land)transportation and telecommunications, APT (theAsia-Pacific Telecommunity established under theauspices of the Economic and Social Commissionfor Asia and the Pacific, not forgetting CCITT(Consultative Committee on InternationalTelegraphy and Telephony) and INTELSAT (Inter-national Telecommunications Satellite Organis-ation).
5.2 AID
Aid is an important component of many of thePacific Island budgets. Tokelau received someUS$1,420 of New Zealand aid per person comparedwith export earnings of US$222 per person (2).Whilst this is extreme many islands receivelevels of aid amounting to several hundredUS dollars per capita from a variety of nationswith interests in the Pacific.
The current world recession means that aidpackages are under more stringent review thanpreviously. What the outcome will be over the
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next few years remains to be seen. It may wellbe that the cash will be more tightly tied intodevelopment objectives and that could be bene-
ficial in the long term.
5.3 PRIVATE INVESTMENT
It seems unlikely that, apart from the touristindustry and possibly some mineral extraction,major, direct private sector investment will bemade in the region. However the possibilityof joint ventures between one or more of theislands and the private se -tor is more likely.Joint operations between Continental countriesand the Pacific islands are also possible. Care
will be needed to ensure structured developmentbetween the islands.
5.4 TECHNOLOGICAL DEVELOPMENT
Earlier in the paper it has been noted thatdramatic strides have been taken in developingcommunications technology. Equally it has beenobserved that the technology has not been focus-ed on either "long thin" routes which constitutethe island links or on systems for countriesthat do not have a tiered network structure.There is scope for driving telecommunicationsdevelopment in this direction. Some work hasbeen funded by the European Community but thereis a need to look in more depth at the Pacificrequirements. Commercial demand for suchfacilities are unlikely to be recouped in salesand therefore adequate funding is required.
6. CONCLUSIONS
6.1 SUMMARY
The objective of this paper has been to look atsome of the new technology that is available forPacific Communications It has been observedthat this may not always be appropriate for theneeds of the Pacific islands.
The potential uses of the technology were thenexplored, recognising that conventionaltelephony alone will produce a rather differentset of needs from consideration of the widerissues. Broadening the review also offers thepotential of a wider funding base.
Having established the potential for develop-ment and also the fact that action is needed tokeep the Pacific islands in step with the restof the developing world, a brief look was takenat the political and financial initiatives thatare needed to move the concepts forward.
6.2 A SYSTEMS APPROACH
There are a wide range of viewpoints within thePacific. Each country, both island nations andPacrim nations, have particular national inter-ests, and rightly so. However it is believed
that a long term solution, that will enable thewhole region to keep in step, will be a systemssolution, i.e. one that has been derived froma top down analysis. It will take into accountthe interfaces with the major countriessurrounding the Pacific and derive a coherentapproach to inter-island linkages.
The view is taken that a piecemeal approach tothe issues of developing strategies for communi-cations in the region will not produce theoptimum solution and will not allow the PacificIslands to benefit from tae potential investmentin communications within the region.
6.3 THE WAY FORWARD
This paper has developed the view that thePacific Region has specialised requirements interms of telecommunications development. Successwill be aided by planning within a strategy thattakes full account of all potential users, thatfacilitates suppliers developing suitable eqt1p-ment and that promotes a systems approach at uothlocal and regional level.
Development of that strategy will requireco-operation between the nations and agenciesInvolved. Once developed this strategy must beunderpinned by political resolve and appropriatefinancial backing.
7. ACKNOWLEDGEMENTS
The author would like to thank the staff of theLibrary of the Institute of Development Studiesat the University of Sussex, the Library of theAustralian National University in Canberra andthe Library of the Institution of ElectricalEngineers in London for their help in the prepar-ation of this paper.
8. REFERENCES
I. The World Bank Annual Report 1992 p. 123
2. The Economist, November 21st 1992 - p.100
3. Telecommunications Journal, Vol 59, 1992
4. Pacific Islands Monthly, June 1992 p. 40"A Subsistance Alternative" by Bill McCabe
5. IEEE Communications Magazine, October 1992 -p. 78 "The Five Challenges of ManagingGlobal Networks" by William E. Gilbert
6. Regional Development Dialogue, Vol 11 No 4,Winter 1990 (pub United Nations Centre forRegional Development, Nagoya, Japan) - "Morethan Health Services: Health for PacificPeoples" by Nancy Davis Lewis
7. The Statesman's Year-Book, 127th Edition
8. Media Asia, Vol 19 No 1, 1992 "StructuralChange of Telecommunications in South-EastAsia" by Jussawalla, N. and Hukill, M.A.
714 x
IS MULTIMEDIA READY FOR PRIMETIME?STUMBLING BLOCKS TO MULTIMEDIA DIFFUSION
Gwang-Jub HanHoward University, School of Communications
Washington, D.C. USA
Jong-Duck JungUniversity of Wisconsin, School of Business
Eau Claire, Wisconsin, USA
1. ABSTRACT
Misunderstanding of multimedia in the computer industry, the confusion of consumers, and thelack of understanding of technology in the human context provide an impetus for examining andspeculating on the future of multimedia. 'What can a multimedia technology do?" is not a sufficientquestion for consumers until we add "for whom" and "how" and possibly "when." Both how therelevant techology is likely to develop and how human choices would be made are examined with afocus on historical trend in media technology adoption.
2. Problem
2.1 Rosy Projections
Multimedia has received a great deal of press in the pastyears as the hottest technology in the computerindustry. Multimedia is claimed as one of the top fivedeveloping technologies that will drastically influencecorporations in the following years, according to a reportby Anderson Consulting (Alexander, 1991 Sep.). IBM isinvesting $100 million in microcomputer-basedmultimedia systems, and forming cooperative ventureswith Apple ' and Time-Warner! Microsoft is spending$15 million onmultimedia research and products in 1992 (Sullivan,1992). Apple is aggressively moving into multimediaproducts by introducing a new kind of personal computerthat John Sculley, CEO and chairman, refers to as the'personal digital assistant.' ' At the same time, severalJapanese manufacturers and US corporations arepursuing multimedia as co-adventure (See Figure 11.
Furthermore, there have been many technical
I Apple's pint venture with IBM rs not only intended to create anobject-oriented operating system but also a multimedia - Kaleida Kaleidapitched its Bento plan to representatives of 15 companies at a meeting inCupertino, CA, in late April 1992 (See lnforworld ,May 11, 14/19. pp. 1-2,Parker. 1992. July 6; Quinlan & Sdanell. 1992, May 11)
2 IBM made a $500 million offer for an equity position in Time-Warner Entertainment in an attempt to make a place for itsell in newmarkets for consumer electronics products that combine text, data, voice.and images for home (See Electronic News, 1992, May 11, 38/1911. pp1-2).
While John Scully painted a vivid picture of the Personal DigitalAssistant (PDA) fast January, it is now clear that n won't be available until1995 (See Rebell() & Amst. 1992, Nov 30)
such as Apple's Quicktime,' Intels' Digital VideoInterface (DVI) - video compression technology, andMotion Picture Experts Group (MPEG)'s compressionstandard which was finalized in 1991. Consequently,many rosy projections have been made. TechnologyFutures forecasts that the domestic market formultimedia products is expected to exceed $20 billion in1994 (F1-171V, 1992). Sales of multimedia PC equipment tothe corporate sector are projected to increase from $4.7billion in 1991' to $22 billion in 1995, according to IntecoCorp., an industry reseach firm (Kim, 1991). InsightResearch estimated that 77% of all industrial andeducational workstations or microcomputers shipped in1997 will come bundled with communications functions,and 21% will be outfitted for networked multimediaapplications, compared to 4.8% in 1992 (Booker, 1992).
A great demand for MPEG chips' nd the introduction ofbasic outline of MPEG 2 were expected to be in place bythe end of 1992 (VM, , 1992, Jan. 6). The installed baseof CD-ROM drives used for multimedia application shouldreach 6.8 million units in 1997, and a cumulative averagegrowth rate of 46.4% for the installed base of CD-ROMdrives between 1992-97 (See Table 1). If it happens asprojected, finding a PC without multimedia will be liketrying to find a new car in Texas without air-conditioning,as some industry expert said (Kim, 1991).
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Quicklime extentions for the Macintosh let users display moviefiles on their machines with no additional hardware
About 2 million multimedia units will have been sold by the end of1992, mostly to business users, according to the Optical PublishingAssociation (Potts, 1992. October 25). This figure is a 30% increase from1991
?-1 J
2.2 Skepticism
While marketers see multimedia computing as the sparkfor sales of new PCs and upgrade-kits, severalquestions persist about whether multimedia will evercatch on with the buying public. Some feel that thebenefits of multimedia systems have been exaggerated(Blackwell, 1991). Zackmann (1990) pointed out the lackof a standard and applications and high cost. RickWarren, a syndicated audio-visual columnist, disputesindustry predictions by declaring that "We have passedthe era of revolutionary products." (Wood, 1992, Jan.23). At a cultural level. Postman (1992, Nov. 1) arguedthat Americans are obsessed with what technology cando, rarely even interested in what it may undo. He furtherclaimed that when it comes to technology, "our defensesare weak, our need insatiable, our judgement unreliable,and our perspective short-sighted."
2.3 Research question
Considering that the rosy projections appear to be drivenmore by technology/industry push than by consumers'needs, a systematic examination of the stumbling blocksto multimedia diffusion is of importance. Despite theindustry push, consumers would not 'snap up' theseproducts solely for the love of technology; they need andwant to know what the technology can offer them andhow. Therefore, "what can a technology do?" is not asufficient question until we add "for whom" and "how" andpossibly "when." In this context, we attempt to provideanswers for the following questions: What are possiblescenarios for the US multimedia market in the year 2000?Will there be a mass market for multimedia or not? If notlikely to emerge, why not? If it will be some time, whenwill the time be and what will it look like?
In order to investigate both how the relevant techology islikely to develop and how human choices are made,historical analogy will be employed. We will first look atwhat multimedia can do based upon technologicalfunctions (i.e. hardware), followed by how the industryapproaches the market (i.e. software), and howconsumers have responded to the media technologies inthe past. Then, finally, to foresee the future ofmultimedia in the following years in the US, bothtechnological dimension will be synthesized together,and speculations will be projected.
3 Technology Push: Hardware
3.1 The concept
In a sense, defining multimedia only limits the scope ofmultimedia. At its simplest, multimedia means theaddition of sound and video to personal computers. Atits grandest, it means the melding of different mediatechnologies such as PCs, TVs and telephones, as well
the melding of the computer, consumer electronics andtelephone industries (Johnson, 1991). At a workinglevel, a multimedia system comprises a powerfulprocessor, frame-grabber and full-motion video boards,audio circuitry, data and video compression technology,large-capacity storage devices, high-bandwidthnetworking equipment and customized software. So, theconcept can be defined at two different levels. First, anypersonal computer equipped with a CD-ROM drive andsound capabilities so that it can run programs or accessdata that contains sound and still and moving pictures atthe hardware side. Second, a program or data sourcethat includes sound and still and moving pictures at thesoftware side (Nicholson, 1992, Nov. 1).
Generally speaking, the term multimedia refers to anynewer way of combining television monitors andcomputers with the promise of education, information,and entertainment (Wood, 1992, Feb. 18). Then,multimedia becomes a vague word, conjuring up differentmeanings for different people because of its multiplecharacteristics of functions (Seymour, 1992, June 8).According to Zachmann (1990), multimedia is a 'buzz-word' that vaguely covers any software or hardware thathelps create audio-visual presentations. Unlike otherconsumer electronic products, it is difficult to explainexactly what a multimedia interactive system does.
3.2 Technological trends
3.2.1 Digitization
In the past, different forms of information have all beentraveling on different tracks. There is no single standardthat they will all fit, nor are the existing tracks wideenough to accommodate so much traffic. Now,digitization of data means conversion of text, numerics,sound, and visual images to binary signals that can bemanipulated, stored, transmitted, and reconverted to itsoriginal form for delivery (Coates, 1992). In other words,digitization of data makes inevitable convergencebetween competing and complementary transmissiontechnologies microwave, cellular radio, fiber opticcable, and satellite transmission - and betweentelecommunication systems - telegraphy, telephony,radio communications, and broadcast. This makespossible integrated service digital networks (ISDN) thatcan carry voice, data, text, and video signalssimultaneously.
Accordingly, the continued blending of communicationsand computer technology will eventually blur thedistinctions between the computing and communication,entertainment and news industries. It is thereforeuncertain whether the new market will be led by computercompanies, telephone companies, entertainmentcompanies or toy companies (Press, 1990). While thelong-range trend toward technological convergence is
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clear, to users it can seem a longway off. According toCoates (1992), it is delayed by segmented markets, bythe failure to achieve interoperability, and by thepersistence of obsolete regulatory categories.
3.2.2 Compression and Storage
An ordinary telephone line can transmit data at between1,200 bits per second (bps) and 4,800 bps.' Anuncompressed color television picture uses 75-90 millionbits per second (Pool, 1990, p. 20). In short, a televisionpicture takes about 1,000 times as much bandwidth as avoice phone. AT&T's Videophone 2500 which squeezesvideo signals so much that they can fit over a standardtelephone line is a example of the progress of the videocompression technology. Bell Atlantic's 'video dial tone'by using Asymetric Digital Subscriber Line is anotherexample of the progress. The SkyPix Corp., which wasformed to provide up to 80 pay-per-view TV channels bydirect broadcast by satellite, would have not beenfounded if the compression technology were notavailable. The cable television industry has also beenbacking up the research on the video compression.
Picture quality on the multimedia is worse than VHS.Full-motion video integration in multimedia technology islacking due to limitations to memory and speed, whichrequires 30 images or frames per second (fps). A 1,280-x- 1,024 -pixel image has approximately 1,310,720 pixels.each of which requires one byte for eight-bit color orthree bytes for 24-bit color. Compression is a partialsolution to the storage problem, but there is no simpleanswer (Name & Catchings, 1992, May 18).
CD-ROM ' players for personal computers have been onthe market for years, most at premium prices, and havefound a strong niche for storing huge amount of text andother data. The disk's huge storage capacity (560megabytes of data can fit on a single one an amountequal to the contents of several large personal computerhard-disk drives) allows computer programmers to writecomplex applications that combine many kinds of mediawith which a user can interact.
While compression techniques can reduce the bandwidthrequired for full-motion video to 1.5M bit/sec, today's
6 11 conditioned, it may operate at somewhat higher rates. such as
9.600 bps7
The terminology used to describe data storage in computersystems can be applied to traditional consumer goods (Miles, 1988)Printed materials and conventional audio records - and now compactdiscs are ROM (Read Only Memory) devices the data they contain maybe degraded. but they cannot be modified in any usetut way Audio andnow video tapes are RAM (Random Access Memory) in that data may herecorded and released repeatedly on the same medium -rather like achalkboard. Less familiar are WORM (Write Once Read Manytimes)media. which allows users to add data up to the limits of capacity of themedium, but not to rewrite it A conventional notebook is effectively aWORM system, as photographic film Where the information is not suchas to require rapid and frequent updating. optical ROM systems haveprovided a viable approach, especially as cost of CD -RUM systems havecome within the reach of even small businesses
networks still have difficulty supporting multimediainformation because of the different ways data, audioand video consume bandwidth on a network. Most userstoday run parallel networks in which data, video andaudio run on separate networks.
3.2.3 Speed
More processing power based on microchip design andmore storage capacity provided by CD-ROM havebecome technological trends in the industry. Engineershave moved from simple integrated circuits to large-scale-integration (LSI), then to very large-scaleintegration (VLSI) which has made it possible to putmillions of components on a chip, and we are now poisedto move toward ultra-large-scale integration (ULSI)(Gazis, 1991).
More specifically, early microprocessors had about 2300transistors. Today's most popular microprocessor chipshave about 300,00C- transistors on a chip, and aperformance of a few millions of instructions per second(MIPS) - the standard measure of computerperformance. Intel's new 486 personal computer has 1.2million. The 586 computer, with about 4 milliontransistors, should be able to perform billions ofinstructions per second (Coates, 1992). In short, we areable to quadruple the density of memory chips roughlyevery three years (See Figure 2).
Consequently, between 1980 and 1985, the averageMIPS declined in cost from $250,000 to $25,000. From1985 through 1990, the average price per MIPS fell from$25,000 to less than $2,500 (Rappapert & Halevi, 1991).Put another way for comparison, the $2,665 that IBMcharged for its first generation PC in 1981 today buys acomputer with 35 times the processing power, 1,200times the disc capacity, a high quality monitor, and more(Schlender, 1991). Speed of processing alreadyexceeds the speed of input and accessing. According toGazis (1991), we can expect billion-bit chips around theyear 2000.
3.2.4 Networking
According to Information Strategies Group (Eckerson,1992), most companies by the turn of the century will beimplementing multimedia applications that pull digitizedaudio, full-motion video, image and text information fromdistributed servers across E.1 enterprise network. Thereport predicts that network-based multimediaapplications will make the same inroads into corporationsthat desktop publishing did in the 1980s. It is furtherdescribed that four applications will accelerate thegrowth of networked multimedia: education and training,
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personal communications, kiosk and businesspresentations, and information repositories, such aselectronic catalogs, libraries and manuals.
The emergence of high-speed networks based on fiberdistributed data interface (FDDI) and asynchronoustransfer mode (ATM) standards will enable companies todistribute multimedia information on demand fromnetwork servers instead of physically distributing CD-ROMs to every desktop. IBM has developed technologythat creates high-speed network that can transmit datafaster than a billion bits per second b (Markoff, 1992,May 22). The regulatory branches are moving towardmore competition between the cable television industryand the telephone industry to accelerate theconstruction of information highways via fiber optics.So, it is not surprising to find that workstation companiesare likely to push into multimedia with videoconferencingin such areas as multimedia online help screens. Localarea network (LAN) and wide-area network (WAN)companies will be eyeing multimedia offerings.
Thus, Insight Research Corp. projected that sales ofhigh-speed data communications equipment and publicnetwork services will be encouraged by the penetrationof real-time multimedia and transmitted multimedia files(Booke, 1992). Markoff (1992, May 1) agrees withInsight Research by projecting that mass marketing ofintegrated services digital network (ISDN) andbroadband fiber optic cables will help usher multimediatechnology into the mainstream.
4. Market Push: Software
4.1 Hardware vs. software
Once any medium technology is introduced into amarket, the space or time of the medium must be filled upwith different forms of information. That is why therecording industry was the prerequisite for thedevelopment of FM radio, as the movie industry was forTV and the VCR. Cable television did not take off untilHBO started in 1975 to provide a variety of programs viasatellite link. VCRs started to take off during the mid1980s when alternative programs began to be offeredthrough video rental shops. Japan's efforts to sell itshigh definition television (HDTV) as the next generationTV set are impaired by its inability to produce compellingprograms again (Jones, 1992, March 16), as Sonyexperienced when it introduced Betamax to the USmarket.
In many fields, the biggest bottleneck to abundance ofcommunication is not the hardware but the software. It isparticularly true in the multimedia industry. Unlike radio
8 Experiments are being done with Rogers Cable. Canada's biggestcable company The first system will be deployed in Toronto. where bankswill be linked for various applications, such as videoconterencing andelectronic mail.
and television industries which have been able to takeadvantage of other existing software industries such asrecording and Hollywood for their mediums, all newcomputer models must be followed by a variety ofapplications software. John Scully said in Tokyo lastFebruary that hardware-based consumer electronicsfirms need to understand that the industry is now drivenmainly by developments in software (Jones, 1992).
4.2 Applications
It appears that multimedia can do everything for all. Bypresenting a message in various media, multimediacomputers can be used to enliven lessons in schoolclassrooms. In business, it can be used to createpresentations, train employees and provide data toconsumers through interactive store kiosks. And in thehome, they would be used for entertainment, learningand at-home work. The NBC Desktop News, the latestadvance in multimedia technology, will be tested with anunidentified group of corporations in New York areathrough 1993, and is going to be introduced tosubscribers in 1994 (Skrzycki, 1992, Nov. 10). Thus, itis not surprising to find that the "four multimedia gospels"- Commodore, Apple, IBM/Intel, and Sony/Philips - takea different technological approach to intrriducemultimedia capabilities in their product liles.
For example, the Commodore Amiga pioneeredmultimedia by using custom processors for graphics,multichannel audio, and fast input/output (I/O) to createa video-compatible architecture. Apple sees multimediaas the logical next step for its Macintosh line after thedevelopment of desktop publishing and presentation-graphics systems based on Hypercard and newperipheral-control standards. IBM and Intel are usingDVI compression technology to move from today'sauthoring software to full -motion digital video. And Sonyand Philips hope to create a new market with compact-disk interactive (CD-I) technology.
While the industry's marketing strategies are various,the overall markets can be classified into four maingroups: 1) the business market with focus on trainingand presentation capabilities; 2) the educational marketwith emphasis on classroom instruction; 3) the consumermarket with emphasis on entertainment value; and 4) theforgotten market including museums, libraries, andcustomized customers at home.
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4.2.1 Business market
In the business market, training and presentations aswell as desktop publishing and electronic mail are seenas key areas where multimedia technology is likely toshine (Scannel & Picarille, 1992; Alexander, 1992;Making, 1992; Laplante, 1992 May). For example, policedepartments in California are using multimedia to
7 8
minimize training expenses (Wiegner & Schlax, 1991).Multimedia training is particularly cost-effective in blue-collar worker training (Alexander, 1992). One homeimprovement firm has watched sales increase becauseof a multimedia home-decorating application by usingtouch-screen terminals.(Wiegner & Schlax, 1991). Inaddition, Karpinski (1991) projected the increasingpopularity of integrated multimedia voice processing - acombination of voice messaging, interactive voiceresponse, and facsimile, data, and image technologiesduring the 1990s.
IBM is planning a major rollout of multimedia hardwareand software products as well as an intensive marketingcampaign aimed at selling multimedia to corporateAmerica. A new PS/2 Model 57M will include manymultimedia features. Acer introduced the PersonalActivity Center, a $2,300 multimedia IBM clone, thatincludes alarm clock, answering machine.speakerphone, facsimile machine, compact-disc player,and AM/FM radio. Stenograph Legal Services introducedthe Discovery Video system. The $4,700 desktop videosoftware allows stenographers, lawyers and judges toautomatically synchronize the court transcript with thetestimony of the witness in a video of the proceedings.Personal Travel Technologies is developing a softwarepackage that functions as a travel guide for variouscities, which offers detailed directions for users to followby car, subway, or foot (Bhargava, 1992).
4.2.2 Educational market
Michael Swaine (1991 August) projected that the popularacceptance of computer video will be educational andhome-based rather than business-based. For example,Kentucky recently required that all public schoolclassrooms have a telephone line for computer hookups.In some school districts around the country, principalshave begun setting up fax lines for parents and'homework hot lines.' According to a member of thedesign team of the Edison Project, a proposed chain ofprivate schools that are to be equipped with the latasttechnology, some schools aound the country alreadyhave dazzling equipment (Jordan, 1992). The EastLansing, Michigan, School Distict raised $6 mill:on via athree-year bond to initiate an educational program ofbuying personal computers and multimedia equipment foruse in classrooms and libraries (Amthor, 1992 April). The$2 billion market for schools and libraries (Winkler,1992), the largest commercial sector in 1992, appears tosupport Swaine.
However, while magnet and other specialized schoolsmay have changed, the typical classroom has not. In
schools, there is only about one computer for every 20students. And many of those are obsolete or rarelyused. In the District of Columbia, the school districttypically spends slightly more than $1 million on
computer hardware and nearly $150,000 for softwareeach year, depending on the availability of the schoolsystem's annual budget which is more than half a billiondoll 'rs. According to Perelman (1992), over 93% of the$4.:3 billion on education in America goes to payeducation's bureaucrats while only 1% goes to hands-ontools and materials students can use for learning.
A new visual encyclopedia by CEL EducationalResources, consisting of 11 videodiscs that store filmfootage and the text of historic 20th century events,costs $11,000. IBM's PS/2 25SX, targeting educationalenvironment at $1,249, comes with 1 megabyte ofsystem memory expandable to 16 megabytes. But the25SX does not include components needed for runningmultimedia programs: sound cards, CD-ROM drives orvideodisc players have to be added. Further, an 80386SX microprocessor with 1 megabyte RAM is an absoluteminimum configuration for running multimediaapplications. To run IBM's Columbus and Ulyssesprograms, a more powerful microcomputer is needed.That is why IBM recommends its PS/2 57 SLC whichincludes everything needed to run multimedia program.Then, the basic education price for the bundled productwill be $8,240. With a read/wite optical drive, theproduct will cost educators $9,317 (Brady, 1992 March).
In addition to the economic issue, the interpretation ofthe role of communication technologies in education isanother concern. Lewis Perelman claims that the role ofmodern technology in education is precisely the same asthe role of the automobile in the horse economy:replacement. So, a growing new wave of technology willtotally replace education. in contrast, Neil Postmanargue:, that it is a billion dollar American illusion that theapplication of computers will make a significantdifference in what happens in the classroom. Atpractical level, time-consuming program developmentjeopardizes the realization of multimedia use inclassroom (Jacobs, 1992, May 11). As Susan Goldmanat the Learning Technology Center at VanderbiltUniversity notes, each educational software packagehas to be evaluated and each teacher trained to use it(Jordan, 1992, Nov. 28).
4.2.3 Home market
Three incompatible CD-ROM platforms aimed at theaverage consumer were introduced to the market:Commodore's CDTV; Philips's CD-I; and Tandy's VideoInformation System. All of them are consumer versionsof interactive hardware to pair with television sets andoffer dozens of titles of software from paint to sports,arts, and gardening.
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Commodore earlier in 1991 repackaged its Amigamultimedia computer as the CDTV Multimedia Player,designed to be part of a home entertainment center.
7
Commodore's CDTV (about $800) is run with an Amiga500 computer that can expand into a home video-editingsystem, print hard copies, and interface with musiccomposition equipment. Commodore was the first toenter the consumer end of multimedia offerings withAmiga 500, which is owned by 3 million people worldwide.
According to the preliminary technical specificationsfrom the Philips Consumer Electronics, their player willcarry a 6-inch color LCD display and will be compatiblewith PAL or NTSC, and will be able to read Photo CD discsas well as CD-I discs and CD audio discs (FNIN, 1992,July 13). Philips is pushing its CD-I Imagination Machine(about $800) as the hardware that would become theworld standard, already followed with prototype fromMatsushita, Sony. Technics, Sanyo, Toshiba, andYamaha (Wood, 1992, Feb.). The industry estimates thatPhilips has invested $500 to 700 million in CD-I.
Tandy Corp. introduced its Video Information System(VIS), which is an interactive vidbomachine that playscompact discs and plugs directly into a television set.The new product incorporates specially designedmicrochips and a version of the Microsoft Windowsgraphical user interface (GUI). According to aspokeperson for Tandy, the new product is a user-friendly, and 50 companies have promised to developmore than 100 programs that will run on the VIS (Pope,1992, Aug.28).
In addition, Nintendo Co. and Sony Corp. announced anagreement under which Sony will make and market a newhome video game system combining Super NintendoEntertainment System game with a CD-ROM drive.Sony's Electronic Publishing Co. unit will developsoftware for the new system; Nintendo will make andmarket a CD accessory for attachment to the Super NES(Nintendo, 1992, October 14). IBM made an a $500million offer for an 12.5% of equity position in Time-Warner Entertainment, which involves two-wayinteractive television (Collier, 1992, May 11).
.:orgotten market
Despite its potential, the library market was beingignored even at the 1992 International Conference onMultimedia and CD-ROM (Rogers, 1992, Apr. 15).Similarly, interactive museums as a niche market has notbeen seriously considered. For example, a new exhibitat the American Museum of Natural History features fourinteractive multimedia programs including 'Globalwarming' (Wertheim, 1992 May). Paul Allen, the co-founi.;er of the Microsoft, plans to build a Jimi Hendrixmuseum in Seattle by featuring interactive technolgydesigned to bring Hendrix and his perfomance to life(Yang & Rebello, 1992, Nov. 30; Johnston, 1992, July27). In South Korea, the general public will enjoy avariety of cultural perfomances and displays in their
living room via ISDN by the year 2000 when theconstruction of the Information Center for Culture andArts is finished. A variety of cultural arts will be stored inthe multimedia format at the center (All performances,1992, Oct. 24). In addition, customized, home-entertainment installation for those willing to spend about$15,000 on simplicity and aesthetics has been ignored.Though the high price tag does not appeal to themasses,' the high-end segment is much larger thanpeople think (R-ITN, 1992, June 1).
5 Consumer Pull: Human Context
5.1 Leisuretime use "'
Leisure time has been increased in the US in the longterm. For example, an American worker now puts in1,800 hours a year as compared to 3,300 hours in theearly years of the century (Bennington, 1989, p. 56).John Robinson (1991 September) also found that freetime of Americans has increased significantly over thepast quarter century, from about 35 hours a week in 1965to about 40 hours a week in 1985."
While being entertained is an important part of theirleisure time (Liberman, 1991, p. 60), very little of the newleisure is used for intellectual pursuits (Drucker, 1989, p.178). Much of that extra free time has gone intoincreased TV watching, physical exercise, and sportsactivities. Robinson estimated that 40%, or 2.2 hours ofthe 5.5 hours of daily free time of Americans is devotedto television viewing. Kubey and Csikzentmihalyi (1990)arrived at the same estimate, falling somewhere between2 and 4 hours per day. Reading has stayed about thesame, with the exception of newspaper reading, whichhas gone down considerably. Recordings may be up abit, and radio may be down a bit, but they are not largeconsumers of time. Using these non-TV media is usuallydone as a secondary activity.
Then, how will leisure-timechoices be made as we headinto the 21st century? If current trends are anyindication, home-based activities will likely characterizeAmerican entertainment preferences in the future. Whileout-of-home entertainment grew only modestly in the1980s, in-home entertainment spending exploded during
9 Despite improvements in quality and relative decreases In prices,the market penetration of hi-ti audio component systems Is less than thatof console stereo in the '60s.
I° Leisure or tree time has been differently perceived and usedbased on different societal situations and ideo- jical predispositions.Generally speaking, leisure as a concept arises out of a dialecticalopposition to obligatory work (Dumazedier, 1974; Gunter & Gunter,1980). According to a recent Roper poll, leisure has replaced work as themost important thing in most Americans' lives.
Ironically, a recent study found an increased amount of workingtime among the American public. For example, according to Schor(1991), lime on the job for the average employed American Increased by163 hours a year, or an extra month between 1969 and 1987,despite theexpectations about the would-be-increased leisure time towardpost industrialization
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the same period. For example, film box office revenuesincreased by 3%; attendance at professional sportingevents grew by 5%; and revenues for Broadway theaterswere actually down by nearly 4%. In contrast, half of a':Americans find their at-home entertainment options moreappealing than the traditional "night out at the movies"(Liberman, 1991).
A recent survey by the Electronic Industries Association(EIA) also found that the percentage margin betweenpeople preferring to stay home to be entertained andthose who prefer going out has widened in the past twoyears (Tuyl, 1992). "Go to nightclub to enjoy music", forexample, decreased from 39% in 1989 to 21% in 1991,while "Stay home and listen to music" increased from48% to 68% during the same period. "Go out to a movie"declined from a 38% to 22% against the increase "Watcha movie at home" from 50% to 67%. As for sportspreferences, "Go to sports event" shrunk from 33% to27%, 'Watch sports on TV at home" gained from 49% to56% during the same period.
Watching TV is not one of people's favorite ways ofspending time, even though it has been one of the majorgainers in free time. While socializing is one of the mostenjoyable things that people do during the course of theday, interpersonal get-togethers have declined between15% and 25% over a 20-year period (How Americans,1991). At the personal level, people have a strongtendency to spend more time on activities that they liketo do.
5.2 Spending on the media
We can describe the economic support of mass media asfalling along a continuum ranging from direct to indirectconsumer support (Jeffres, 1986, p. 73). At one end wehave 100% direct support through consumer purchases.Here we can find both the book and the film industrieswhich derive most of their revenues from publicpurchases. At the other end is the broadcasting industry- both radio and television where most of the support is
indirect through either advertising or institutional supportsuch as that given private foundations or thegovernment. Magazines and newspapers can bepositioned in between these extremes. We now shouldadd computers, VCRs, cable television, and stereos -whether it is CD- or LP- or tape-player to an extreme endof the 100% direct support. As we are moving toward thepay-per-society, virtually all media use are turning intoutility-like services.
Considering a transition from industrial to informationsocieties, it seems naturally assumed that expenditureon mass media will increase more rapidly than otherexpenditure. However, the pattern of economic supportfor mass communication is approximately constantrelative to the general economy. McCombs and Eyal
(1980) found that spending on mass communication ishighly constant during the period of 1927 and 1968, andremained the same between 1968 and 1977. Accordingto McCombs and Eyal (1980), while spending onnewspapers and magazines nearly tripled, spending onbooks and maps did not even double during 1968-1977.Even with the proliferation of audio-visual media devicesand services over the same period, the historicalpatterns of spending on print and other mass media interms of constant dollars remained stable. Thus, thePrinciple of Relative Constancy concluded that society'suse of mass communication seems remarkably resilientin the face of rapid technological change.
Werner (1986) also supports the Principle with his recentresearch in Norway during the period of 1958-1982. Hehas shown that low-consumption households spend onlya small proportion cf what high-consumption householdsspend on mass media, even though expenditure on massmedia accounts for a considerably higher proportion oftotal expenditure in low- rather than high-consumptionhouseholds. Whereas expenditure on the "necessary"media, such as radio, TV and newspapers, accounted for72% of the low-consumption household's mediaexpenditure, in high-consumption households it onlycomprised 32%, even though the latter spent twice asmuch on such "necessary" media. As for the "exclusive"media, such as books and records/ tapes/cassettes, incontrast, the former spent only 8% on these as against40% for the latter.
It is projected that the percentage of expenditure onmedia will be likely to rise more rapidly in high-consumption households as new media technology arebeing introduced. A common finding in research on newcommunication technologies is that only 10% of theusers present 50% of all uses, with the other 90% ofusers making up other 50% of uses (Rogers, 1987, p.125).
5.3 Behavioral patterns
5.3.1 Simplicity
At the 1992 Summer Consumer Electronics Show,strategic planners in both the consumer electronics andtelephone industries about the new technologies warnedthat simplicity, not rampant product proliferation, is thekey to success (F1-17N, 1992, June 1). How simple issimple enough to the critical mass of consumers?
In the past, even the job of a telegraph operator wasgenerally regarded as a highly skilled occupation(Aronson, 1977, p. 17). The telephone users were saidto suffer 'stage fright,' an anticipation of microphone andtelevision devices (Briggs, 1977). Matsushita's VCRbased on supermarket bar codes. VCR Plus by Gemstar,Insight Telecast, and Sony's double-sided controller are
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just few examples for easing VCR programming(Johnstone, 1992, July 23).
The print media had to wait longer than 400 years to beaccepted by the general public who had to learn the skillto use them how to read. In contrast, both radio andtelevision which did not require any specific skill exceptturning them on and off and listening or watching,reached 30% of the general public within 5 to 7 years ofintroduction. Communication via computers still requiresnot only the ability to read or write but also the capabilityto operate the machine, including typing skills. Greatefforts have been made to go into the elimination of inputdevices that tie the user to the technology in ways thatimpede other movements and activities. As availableprocessing power increase,* we expect that today'sinput devices will give away to more convenient modes ofinteraction with computers, through natural languageinput, touch-screen computing, eye-tracking interface,and handwriting.
If the computer industry can advance the handwriting-recognition technology, a wide range of companies andgovernment agencies are sure to be interested. The IRSplans to award a $1 billion contract for technology thatwill enable it to scan all tax forms by computers by theyear 2000. The US Postal Service handles 555 millionpieces of mail a day, 20% of it with handwrittenaddresses (Levyn, 1992, Dec. 7).
In fact, considerable progress has been made in thisarea since 1970 by Fred Jelinek and his colleagues atIBM Research. Their prototype can recognize avocabulary of 20,000 words with an accuracy of at least97%, and it does this in real time (permitting immediatecorrection of mistakes). It is thus expected that someversion of sophisticated speech input will be using duringthe 1990s. For $5,000, Dragon Systems offers softwarepackage that it claims enable a computer to record with90% accuracy what is dictated by a human operator.Verbex Voice Systems for the Wall Street traders andBell Lab's prototype system for translation are similarexamples (Burgess, 1992, Nov. 11).
At the practical level, however, many people shy awayfrom the still quirky machines, finding them too prone tomistake or just too hard to use. Most systems recognizeonly slow, clearly enunciated speech or have a limitedvocabulary. Despite the technological developmentsachieved in the computer industry, the current simplicityis not likely to be a widely accepted practical reality bythe year 2000. Then, maybe, people would rather justwatch television.
12 Most of their processing power is used to present a convenientinterface to the user with improved quality of presentation and improvedmodes of computer interaction. Today's input/output devices are dnvenby processing power well under 1 MIPS (Gazis, 1991)
5.3.2 Portability
As computers become a primary means ofcommunication beyond telephones, cellular phones,faxes, and even live video hookups, portable personalcomputers are expected to reshape American businessin the 1990s. The PC evolution is classified into threegroups in terms of size: desktop, laptop, and palmtop. Anumber of new smaller-than-laptop computers currentlyencompasses three basic types again: notebooklaptops, pen-based computers, and pocket or palmtopcomputers. Rappaport and Halevi (1991) predicted thatopportunities for meaningful hardware differentiation willvirtually disappear.
NEC even envisions a future in which people will wearpersonal computers like clothing, and they havedesigned a gaggle of prototypes to help PCs leap fromdesk to neck. According to a NEC premise, electronicminiaturization over the next 10 to 15 years makecomputers highly portable devices to recognize voiceand handwriting, and to incorporate keyboards,telephones, display screens, faxes, CD memories evencameras and satellite transmitters (Kirkpatrick, 1992).However, computers cannot be truly portable until theycan be folded and crash-free from dropping as the printmedia are, which is hardly to be achieved in the following10 years.
5.3.3. Improvements or Newness
Media history appears to support a modest view ofacceptance of new media.' The older media merelyadapted themselves to new market pressures, findingnew ways to appeal to audiences. Motion pictures, forexample, have tried several strategies: specializing(Black films, the youth market) and demassifying theaudience (pornography, wilderness films), graphicviolence, and special effects (Jeffres, 1986, p. 46). Aswe know, TV did not kill radio or cinema as radio did notkill newspapers. VCRs did not kill TV or motion pictures.Also, the rapidly adopted media technologies are add-ons to already existing hardwares such as TV (forVCRs), telephone (for answering machines) and stereos(for CD players show).
From a newer medium's perspective, however, each newmedium must provide its own special quality to get intothe existing media environment to survive. Radio addedspeed to newspapers; TV gave picture to radio andconvenience to motion pictures; cable televisionprovided more channel choice and better picture quality;VCR freed people from the primetime with privacy; andNintendo games added more fun through frustrated
13 This trend is not limited to media. We can see from the exampleof the classical Industrial Revolution, old technologies do not immediatelydie, nor do they quickly lade away. Instead, the new technologies aresuperimposed upon them and in many cases are used to augment theolder capabilities (See Kranzberg, 1989, p. 26).
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excitement. CDs not only improve the conventionalrecord player in terms of sound quality and size but alsoprovide new levels of programmability via random accesscapability. In contrast, current multimedia products aremerely improvements on old media and lack theexcitement and originality that was present on pastgenerations of me'ia (Rosen, 1991 September). Then,what can a multimedia add to the current mediaenvironment?
The elements of multimedia technology have beenavailable for several years, but a system of linking themall together hall= been lacking. This packaging trend isnot new. We tlave long been aware of tndencies to putdifferent devices together, often in one box - rangingfrom the integrated music center to the TV-VCR combo tothe simple combination of a clock and radio in the samehousing. The use of microelectronics and digital controlsnot only makes it more feasible to consider relatingtogether the operation of devices that are in the samebox, but also increases the utility of interrelating devicesthat are not in the same box, by getting them tocommunicate with each other through the home. Therationale for this integration may be convenience.
5.3.4 Compatibility
5.3.4.1 Hardware
The incompatibility among personal computers includingCD-ROM players reminds us of a historical lesson fromboth the US recording industry and the VCR industry.During the battle of the speed when Columbia introduced33 rpm record in 1948 and RCA brought out its 45 rpm in1949, records sales dropped to $50 million below the1947 level as people waited to see which format woulddominate. During the late 1970s consumers, uncertainto which of the two systems would be adopted, boughtneither VHS nor Beta. Later, they showed theirpreference of VHS over Beta more based on machineuniversality than on technical superiority.
There were as many as 10 different hardware standardswere introduced to the 1992 International Conference onMultimedia and CD-ROM (Hilts, 1992, April 27). Whilethe Interactive Multimedia Association (IMA) has startedthe Compatibility Project which.aims at developingmultimedia software-compatibility standards, it is unclearwhether software developers catering to these hardwarestandards would rewrite their products once the projectis completed (Filipczak, 1991 August). A group ofleading computer firms, including DEC, HP and IBM, areworking on a project that could standardize applicationprogram distribution via CD-ROM. But Apple andMicrosoft have decided to proceed with their ownseparate hardware standards for multimedia (Bits &bytes, 1992. Sep. 14). Currently. multiple standards infile formats, communications protocols, disk-storage
formats, and full-motion video schemes, and thenecessity of addressing more than one these at thesame time, is preventing multimedia technology fromprogressing at significant speed (Curran, 1992 March;Scisco, 1992 May).
5.3.4.2. Software: Business versus consumer market
In addition to hardware incompatibility, differentapplications for different purposes remain the marketsseparate. For example, when videotex was born in themid-1970s it was seen as primarily a domestic ratherthan a business service. The recent revival of videotexinterest can be attributed to more business applications.The failure of residential users to embrace theinstrumental aspects of Prestel as well as Captain led tothe shift in its marketing toward business users. EvenTeletel, the largest videotex services in the world, hasshifted its emphasis toward business users, who payhigher rates. In fact, interactive text in the form of onlinedata-bases in the US grew rapidly as commercialinformation vendors joined government and non-profitagencies in the production and marketing of highlyspecialized electronic information services, most ofthem directed toward business, science, and theprofessionals, instead of homes.
It seems historically and cross-culturally common thatinformation as news or data is the first concern of thebusiness sector, whereas entertainment value isstrongly preferred by the general public. For example,the television industry itself suffered in the early daysfrom lack of programming and crude presentation but ftlived to become the highest consumption medium everwith the quality of convenient, cheap, and 'novelentertainment' (Bennington, 1989, p. 155). Consumers'fun-orientation in their videotex use was already found inPrestel in Britain, Captain in Japan, Gateway trials in theUS, and Teletel in France.
Business customers are willing to and, most times, haveto pay for goods and services that save time and moneybecause they need (rather than want) to be competitive.While personal users also value time and money, they, inaddition, seek (whether need or want) entertainment,physical security, and alternative ways spend largeblocks of leisure time. It is the lack of compatibilitybetween a specialty market and a mass market whichkeeps them apart.
Telephone use has two dimensions: the instrumental(getting things done as in ordering an airplane ticket) andthe intrinsic (talking on the telephone for its own sake)(Keller, 1977). Classie and Rowie (1987) distinguishbetween relational (intrinsic) and functional(instrumental) calls, but also add mixture of these twocategories. An ethnographic study of telephone usesrevealed that people tend to differentiate very much
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between business and pleasure calls.
5.3.5 Functional alternatives
According to an estimate based on 94.6 million UShouseholds by the Electronic Industries Association,radio is owned 98%, color TV 97%, audio system 94%,VCR 77%, answering machine 46%, CD player 35%,home computer 33%, color TV with stereo 31%, videogame systems 31%, and camcorders 17% (Wood, 1992,January 23). So, the main reason for the failure ofvideotex in the US has been related to the abundance ofalternative information sources (Kramer, 1991).Commodore's CDTV and Philips' CD-I have not done wellin the marketplace mainly due to the popularity ofNintendo and Sega. The share of the Big Threenetworks has declined from 92% in 1979 to 64% in 1991.Since previewing Newton, a prototype of the first Applepersonal digital assistant, introduction of the PDA fromApple has to step back." Many specific technologiescan have regretful consequencies not because thetechnology is "in the saddle," but because of the ways inwhich users quite reasonably employ new devices(Fischer, 1992, p. 271).
In addition, the consumer industry already has digitalprocessing inside the TV set (picture-in-picture). TheFroxvision multimedia system creates high definitionimages for home use. The system, a video-processingcomputer, is marketed as a television (Gottschalk, 1992,April 6). Features include user interface, movie-qualityimages, on-line information and single-button control.Currently, big sellers are rear-projection televisions andlaser disc players.
5.3.6 New Use
William Ogburn (1964) postulated the concept of culturallag in terms of human response to technical capabilities,by saying that cultural systems and human institutionstend to lag in responding to new oportunities offered bytechnological innovations. Similarly, almost alltechnological progress begins with a breakthrough insome form of basic hardware, followed by a period beforesoftware appropriate to the hardware is invented. At thepoint progress takes form in the development andperfection of products in which both the software andhardware are applied, while the humanware is still beingcultivated (Sakaiya, 1992, p. 231).
Given the cultural lag, it is common for some of thegeneral applications to be quite different from those
14In 1990, experts were predicting that sales of new portable
computers, which can read hand printing, would hit $800 million in 1992and pass conventional PCs by the year 2000. Sales this year will hit S100million. Recently, analysts have reset their projections, saying PDAs willinch into the market next year with sales of 528 million, according to BISStategic, That is substantially different from the 5125 million revenuesthat one Apple bull on Wall Street predicted for Newton alone (Rebell° &Arnst. 1992, Nov. 30)
anticipated at the time the particular hardware wasinvented. For example, a phonograph recording wasassumed to be used as a record of speech. So the firstrecording made for a practical purpose after theinvention of the gramaphone was of a speech byBismarck. It took 15 years for records to become amedium for music. Early fims were newsreels orphotography of moving objects. So, the early motionpicture makers had spent twenty-some years beforethey produced dramatic films. The telephone as a meansfor 'trivia gossip' was not envisioned by the telephoneindustry but was invented by the users (Marvin, 1988;Fisher, 1988). The VCR was introduced for recordingfrom TV or cable TV. Until the mid 1980s, use forrecording versus replaying prerecorded videotapes wasapproximately half and half, with only 3% recording today(Johnstone, 1992, p. 26).
This trend is known as the Kranzberg' First Law:Technology is neither good not bad nor neutral. Thismeans that technology's interaction with both the socialand cultural milieus some times lead to developmentsthemselves that are far removed from the original goalsof the technical elements themselves (Kranzberg, 1989).Marvin (1988) simply stated that people usecommunications in new and unpredictable patterns if it isto their advantage and will even change their ways to doso. Rogers (1983 8 1986, p. 121) explains this processas 'reinvention in diffusion theory' which refers to thedegree to which an innovation is changed or modified bya user in the process of its adoption and implementation.In his extensive study on the telephone use, Fischerconcludes:
we might consider a technology, such as telephone, not as aforce impelling 'modernity,' but as a tool modem people haveused to various ends, including perhaps the maintenance,even enhancement, of past practices (1992, p. 272).
In short, we invariably think of a new piece of equipmentin terms of expanding the range of functions ofequipment already in existence. Soon, however, thetechnology itself create new spheres utilizing functionsunique to it.
In this context, computerized communications arecurrently conceived of as extensions of postal services,telephones, or television sets. In 10 or 20 years, thesesystems, with appropriate improvements, will give birthto completely new areas of application. In other words,the various functions that multimedia serves suggeststhat their consequences will be mixed, unevenlydistributed, and diffused, assimilated, and modified atuneven rates, as the tool goes far beyond the task ofnumber-crunching and instantaneous communication ofdata. Therefore, no one can guess what these newapplications will be. One thing clear is that they are toolsfor storing, processing, and communicating (Sakaiya,1992, pp. 222-3). Again, people utilize the multimediatechnology for their different purposes as people do with
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TVs and VCRs now.
6 Speculations
6.1 The primetime for the multimedia has not come yetand will not even by the year 2000. Despite theaggressive introduction of the interactive media, themost passive media will remain among the most popular.lit may make some difference if future generations growup with devices at hand that allow them, at an affordableeffort, to actively invlove themselves in meaningfulendeavors rather than simply accepting a mass product.
6.2 In order to make it happen, the multimedia systemwill need to be something of exceptional value, comparedwith what the consumer has in 1993. The product needsto be radical enough that consumers see the difference,and yet offer tremendous benefits including easyhandling, stellar sound, impressive picture, resistance toshock and great mobility.
6.3 Applications driving the popular acceptance ofcomputer video appear to be home-based rather thanbusiness-based. Despite the diversified applications ofmultimedia, however, consumers and business, the twoends of the multimedia spectrum (entertainment versusniche market), will likely remain distinct. Libraries andmuseums are more likely to be popular users of themultimedia than classrooms.
6.4 While consumers are more likely to stay at home tobe entertained, home entertainment will maximize theconsumer's enjoyment with quality while minimizing theinevitable "downtime" of planning, organizing, andarranging the entertainment event.
6.5 The percentage of expenditure on the multimedia willlikely rise more rapidly in high-consumption householdsas new media technology are introduced. However,overall society's use of mass communication appearsremarkably resilient in the face of rapid technologicalchange.
6.6 Industry's unrealistic near-term expectations couldturn CD-ROM into a consumer electronicsdisappointment. The technology is still in its infancywith several competing and mostly incompatiblemachines.
6.7 The next generation multimedia computer may nolonger look like a home computer. The Japaneseelectronic giants could edge out traditional PC leaders inthe US when multimPdia turns personal computers intoconsumer electronics because people would rather justwatch television.
6.8 Any clearcut prediction as to the use of multimediacannot be made when it comes to considering the
Kranzberg's First Law, or Roger's reinvention process ofdiffusion theory, or simply describe it as uncertainty asMarvin did. People simply do not change their mediahabits or keep on considering a technology as a toolmodern people have used to various ends - maintenanceor enhancement of past practices. Human beings do notstop talking when they learn how to write.
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Nintendo, Sony join to make CD-ROM home video games (1992. October14). The Washington Post, F2.
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7
(1992. Jan. 13). Electronic manufacturers hope for a revolution.The Christian Science Monitor. 8.
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Table I Forecast of CU-ROM drives fur multimedia applications
1992 1997 CAGR %
Installed base (000s) 1.012 6.800 46.4%Shipped units (000s) 415 3,150 50.0%Unit price $650 5390 -9.7%Shipped value (Smiltions) $270 SI .229 35.4%
CD-ROM disks, shipped units 680,000 15000,000 85.7%
Source: Future Home Technology News. 1992. August 10. p. 7Note: End-user prices for pressed CD-ROMs in 1992 were less than$1.90 in volume.
Figure 1 The map of multimedia development
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7j y
PECC Triple-T Port (Teleport) for Developing Economies
Second Phase Report -- Case Studies
Professor Kenji Saga
Asia University
Tokyo, Japan
The following report contains the conclusions and policy recommendationsthat emerged from an investigation trip to Indonesia and Thailand carriedout by the international project team of the Pacific Economic CooperationCouncil (PECC) Triple-T Port (Teleport) for Developing Economies Project.
Introduction
In September 1990, the PECC Triple-T Task Forceinitiated the Triple-I Port (Teleport) for
Developing Economies project (hereafter referredto as the Triple-I Port (Teleport) project) asone of its task force action plans.
In December 1990, a survey of the developmentof the Triple-T Port concept (as described inthe full Second Phase Report), some examplesand some locations illustrating the concept,
was carried out in Indonesia, Singapore,
Thailand and Malaysia. The survey formed thebasis of the first phase of the Triple-T Port(Teleport) project.
In this survey, it became clear that in eachdevelopment project, telecommunicationsinfrastructure in particular lags behind, so
the development of telecommunicationsinfrastructure became the main focus of the
project. Based on the results of this survey,the First Phase Report was presented to the
Triple-T Task Force Seoul Conference in March1991.
Having received this report, the Triple-T TaskForce decided to carry out case studies as thesecond phase of the project. In the secondphase, the number of participants grew, an
international project team was organised frominterested parties in the respective PECC membereconomies and work continued on the project.A JANCPEC (Japan National Committee for PacificEconomic Cooperation) study team supported theactivities of the International Project Team.
It was decided that the Batam Island DevelopmentProject in Indonesia and the Eastern Seaboardof Thailand, which were recognised as
illustrations of the Triple-T Port conceptduring the first phase, should be the case studyareas for the second phase. In September 1991,the sites of these two development projects werevisited and a video was made about theirdevelopment.
The first meeting of the international projectteam was held on November 18, 1991, in Bali,Indonesia. The video was shown to introduce
728
the sites, and members of the project team
presented reports. From March 3 to 11, 1992,
the international project team sent an
investigation group to Indonesia and Thailandto interview those responsible for governmentpolicy as well as to survey the two developmentproject sites.
1. The Triple-T Revolution and the Triple-TPortThe Concept of the Triple-T Port
To illustrate the concept of the Triple-T Port,we formulated two conceptual diagrams, ConceptA and Concept B. According to Concept A, shownin Figure 1, Triple-T Port development plansorganise Triple-T infrastructure. Here, theconstruction of housing, seaports, airports,teleports and resort areas will become part ofthe Triple-T Port project. Such a developmentproject requires vast amounts of capitalinvestment and time, therefore limiting theareas where it can be carried out.
So we then developed Concept B, shown in Figure2. Here, a teleport is included in a Triple-T Port development plan with effective access(roads, railways, etc.) to residential areas,seaports, airports and resort areas ensured.With the introduction of Concept B, thepossibility of constructing Triple-T Ports maybe extended to many of the existing or plannedindustrial parks in the developing economies.
Of the inoustrial park projects we investigated,the development project in Batam Island in
Indonesia (Figure 3) is an example of ConceptA. The Batam Industrial Development Projectcontained a plan for a harbour and an airport,but none for the construction of a teleport atthe time we undertook our first phase study.We pointed out in our First Phase Report, If
teleport is included, this could become a
Triple-T Port plan fulfilling the conceptdescribed in Concept A." When our internationalinvestigation team visited Batam Island in March1992, however, we found that Indonesia's thirdinternational gateway exchange was underconstruction by PT INDOSAT.
JUL)
An example of the type of Triple-T Port
indicated in Concept B is provided by the jointCommunications Authority of Thailand(CAT)/Telephone Organisation of Thailand (TOT)Teleport Project that covers the area of theEastern Seaboard Development Project in
Thailand, as shown in Figure 4. According tothis plan, an international switchboard will
be located in the satellite earth station centreof CAT in Sri Racha and will then be linked tothe telecommunications centres to be built inLaem Chabang and Map Ta Phut Industrial Estates.
A local network will be constructed in both
estates with optic fibre cables and a digital
microwave system as its main links.
2. Fundamental Aspects of Teleport Projects
in Developing Economies
As already noted, we have focused our study on
the development of telecommunications
infrastructure, which lags behind the
development of infrastructure for the other two
Ts. Our two case study projects are models of
strategic point development projects to promote
the growth of the national economy for the
governments of both Indonesia and Thailand.
In our First Phase Report, we recommended that
the construction of teleport-type
telecommunications infrastructure is most
suitable for such strategic point developmentprojects. This idea was also carried over to
to our second phase study.
A teleport is defined in the constitution ofthe World Teleport Association as "...an access
facility to a full-scale telecommunicationsmedium incorporating a distribution network and
telecommunications business services to serve
the greater regional community and associated
with, including or within a comprehensive
related real estate or other economic
development" (Article 4).
More than seventy teleport projects exist
throughout the world at present and, of these,
more than twenty are actually in operation.
Teleports are found in London, Amsterdam, Paris,
San Francisco, Toronto and Osaka, as well as
in New York, with the majority located in the
metropolitan areas of developed economies, and
are undertaken as part of city redevelopment
projects or plans for new industrial locations.
The World Teleport Association has indicated,
however, that "to develop methods to enhance
opportunities for teleports in developing
countries" is one of its objectives. The
actualisation of teleports in developing
economies is anticipated.
We concluded that developing economies that
build teleports must take into account the
differences between their construction and that
of existing teleports in developed economies.
Thu fundamental aspects of teleport in
developing economies are as follows:
729
i. Such teleports must combine basic
telecommunications infrastructure with enhanced
and value-added network services capability.
ii. Construction of national telecommunications
infrastructure and strategic point regional
development must proceed in unison.
iii. International telecommunications
gateways should be constructed to provide
domestic users with direct access to
international gateways.
iv. The latest telecommunications technologiesshould be used to best meet the needs of
developing economies.
Basic Elements to be Considered for Teleportsin Developing Economies
When constructing a teleport in a developing
economy based on the fundamental aspects
described above, it is necessary to consider
the following points to determine the most
appropriate system:
i. The organisation of market-oriented
management functions
ii. The evaluation of the existing state ofTriple-T infrastructure and existing plans for
development
iii. The design of a compact, low-cost and
reliable system requiring minimum initial
investment
iv. The design of a flexible and expan,able
system according to the level of area
development, telecommunications traffic and new
services needs
v. The ability to adapt to future global
networks (ISDN)
3. Analysis, Policy Recommendations and
Conclusions
i. Telecommunications Demand Forecast and
Development of Facilities
According to the demand forecasts for telephonetraffic on Batam Island and taking 1990 as astarting point, a growth over the previous year
of 157, in domestic traffic and of 20% in
international traffic is forecast for each year.There are no statistics available for comparisonof domestic traffic, but as for internationaltelephone traffic, the growth rate forBatam is estimated as being lower than the 30%increase in international telephone traffic forthe whole of Indonesia over the last three
years.
When placing greatest importance on theprofitability of teleports, it may be consideredsound planning to make conservative estimatesof low growth in traffic; but when planning fromthe point of view of telecommunicationsfacilities, conservative estimates result in
a high possibility of those facilities becominginadequate sooner than predicted. To make
flexible demand forecasts in this kind ofsituation, rather than following one narrow lineof demand forecasting, it is preferable toforecast demand in a long, broad strip, likeforecasting the route of a typhoon, and whenplanning the timing of reinforcement offacilities to match actual demand, it is alsobest to be flexible. The same also applies tothe Eastern Seaboard Development Project.Flexibility and expandability are importantelements in planning teleports.
ii. Evaluation of Demand for Value-addedServices in Case Study Areas
There is little demand for value-added servicesin either Batam Island or the Eastern Seaboarddevelopment areas. This is because thesedevelopment projects are still at their initialstage. There will, however, be rapid growthin value-added services needs.
There is an idea to introduce an EDI (electronicdata interchange) system at the Laem Chabangport to expedite customs procedures. The needfor such value-added services will become a
reality in many fields, such as automatedwarehousing systems, tourist information andreservation systems.
Recognising the importance of EDI, the APECWorking Group on Telecommunications agreed in
July 1990 to establish a project on EDI as oneof its long-term projects.
iii. Expansion of Teleport Functions to ReachWider Territorial Areas -- Efficient Utilisationof the Small-scale Model
There are many private industrial estates in
the Eastern Seaboard development area, such asChonbu;i Industrial Estate, BangpakongIndustrial Estate, Eastern Industrial Estate
and Sri Racha Industrial Estate. Theseindustrial estates are also suffering frominadequate telecommunications infrastructure.If efficient access from these privateindustrial estates to international gatewaysand domestic telecommunications centres is
achieved by using the small-scale model systemshown in Figure 5, the status of theseindustrial estates will be improved markedly.In addition, to gather more international anddomestic traffic from these small-scaleteleports will contribute to the businessfeasibility of the teleport project as a whole.Therefore, we recommend application of thesmall-scale model in a wider area of the EasternSeaboard.
In the case of the Batam Island developmentproject, we recommend application of the sameconcept. To gather international and domestictelecommunications traffic from other islandsin Riau Province, such as Bintan Island, by
using the small-scale model system will enhancethe role of the Batam Industrial DevelopmentProject. Bintan Island Development Project willfollow the development of Batam Island.
730
iv. Technology Transfer,__ Human kesourcres
Development and Financing
Technology transfer, human resources developmentano financing are the three biggest problems
to be solved in the development of
telecommunicationsdeveloping economies.
As regards financing, during the fifth and sixthFive Year Development Plans (FYDP) in Indonesia,PT TELKOM's capacity for internal financing is20 - 25,. Both Indonesia and Thailand are
suffering from over-borrowing from foreign
countries, including ODA loans. ODA resourcesfrom developed economies are also limited.
However, financial needs for the development
of telecommunications infrastructure will
increase rapidly. For example, the amount of
investment needed during the fifth FYDP is
estimated by PT TELKOM at 3 billion US dollarsand during the sixth FYDP at 8 billion US
dollars.
infrastructure in the
Under such circumstances, both governments havebeen inviting private sector investment in thedevelopment of telecommunications infrastructuresince the late 1980s. The Indonesian government
introduced a revenue-sharing scheme known as
"PBH" in the fifth FYDP, and is currentlyconsidering the introduction of the BOT and/orBOO formula during the sixth FYDP. In Thailand,
concession contracts based on the BTO formulahave been introduced into the development oftelecommunications sectors.
a. Benefits to Developing Economies of Private
Sector Investment
- To solve financial difficulties without
increasing government loans
To introduce efficient construction and
operation methods using state-of-the-art
technology
To expedite the development of
telecommunications infrastructure
- To realise technology transf T and human
resources development
To create new opportunities for employment
b. Problems Facing Developing Economies
- Private sectors will focus their investment
on lucrative areas, leaving behind the
development of remote areas.
- There is uncertainty about the revenue from
telecommunications networks constructed under
the above-mentioned formulae. The estimationord sharing of revenue remain problematic
There may be conflict in settingtelephone charges. Private sector investorswish to set a higher rate, while the governmentsof developing economies wish to keep lower
3
charges for universal telephone services.
- The above-mentioned formulae are still
premature and their applications differ from
country to country, and sometimes from industry
to industry. Investors require a consistent
policy.
c. Necessities and Benefits for Private SectorInvestors from Developed Economies
Private sector investment from developed
economies is essential to eliminate the
disparity between developed and developingeconomies. ODA requirements. such as
environmental problems, are increasing rapidlywhile ODA resources are limited.
- For the development of telecommunications-information networks throughout the Asia-Pacificregion, it is essential to develop the
telecommunications infrastructure of the
developing economies in the region. Privatesector investment is essential to expedite thedevelopment of telecommunications infrastructurein developing economies.
- Private sector investment using the aboveformulae will promote international cooperationin the fields of technology transfer and humanresources development to a far greater extentthan plant exports do.
- Private sector investment will createexpansion of world trade.
d. Problems Facing Private Sector Investorsfrom Developed Economies
- Inconsistent policies in developing economies
- Money transfer from developing economies
- The necessity for close investigation andcareful feasibility studies
- Country risk
- The risk of exchange rate fluctuation
In order to promote private sector investment,it is crucially important to seek and to findsolutions to the above demerits. Related
parties, including the governments of both thedeveloped and the developing economies, shouldmake sincere efforts and give careful
consideration to means of overcoming theseproblems.
An example of such a solution under
consideration by the government of Indonesia
is the introduction of PBH project packages.According to this idea, each package consistsof a combination of lucrative area developmentand rural area development projects.
e. Expected Benefits of Triple-T Port
(Tf2leport)_, for Developing_ Economies
As a conclusion to our second phase study, wewish to stress the expected benefits of the
lriplc -T Port (Teleport) for Developing
731
Economies as follows:
To ensure the global and regional
connectivity of Triple-T networks and to realise
efficient flows of people, goods and
information;
- To support respective national goals of
economic development;
- To encourage the expansion of internationaltrade by creating new opportunities;
- To enhance a highly amenity-oriented urban
environment;
- To create opportunities for employment; and
To accelerate technology transfer and humanresources development from developed economies
to developing economies.
We believe that the Batam Industrial Development
Project and the Eastern Seaboard Development
Project, which we adopted as case studies inour second phase study, will function as models
of Triple-T Port (Teleport) for Developing
Economies and that many Triple-T Port projectswill follow in the Asia-Pacific region.
4. Follow-up Activities
While the project leader has stated that the
project will not proceed to a third phase,
follow-up activities are under consideration,
thus:
i. Consideration of Triple-T Port (Teleport)
application China and Russia, or in any other
Triple-T Port project, in response to requestsfrom PECC member committees and with the projectteam in an advisory role
ii. Consideration of a "Concept C" Triple-T
Port applicable to small economies, such as
Pacific islands, with a focus on tourism-relatedapplications rather than industrial developmentprojects
iii. While project activities may be concludedat Phase Two, progress of the two case studyareas (Batam Island in Indonesia and the EasternSeaboard of Thailand) should be monitored andreassessed by the project team in two or threeyears' time.
Figure 1Concept A
Figure 2Concept B
CONCEPTUAL DIAGRAMS OF TRIPLE-T PORT
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1.0
Video Dialtone Access to Multimedia
A.C. Harrison-SurgeonNew York, U.S.A.
Video dialtone is a video transport service hich transmits video programmingboth intrastate and interstate via private line or point to multipoint arrange-ments over the existing public switched narrowband netwtwork currently operatedby local exhange carriers and interexchange carriers in the United States. Theconcept of video dialtone and its deployment issues are discussed as they relateto the United States infrastructural changes which affect provisioning and oper-ations of shared access facilities which allow multimedia applications.
INTRODUCTION
Advanced Technological opportunities have broughtabout change in the human interaction processwith respect to information access methods,contents, and ethics. As new technologies arediscovered, and as additional applications andusages unfold, man kind will continue to battlethe cause and effect methods endured by thenatural phenomena associated with change.Phenomena can be described as problems associatedwith change, it can be theoretically capsulatedby using principles of reasoning models found intextbooks.
However, the economic, political, social, andcultural impacts caused by the adoption of newideas (technology) under the cause and effectmodels, do not result in balanced changes. Theingenious invention of one person will effectanother person and it is important to understandthe climate and try to balance the consequencesbefore a determination can be made regarding whatis best for the man-kind.
The introduction of video dial-tone is a directresult of the evolution of information processingand new telecommunications practices, world-wide.The United States decision to divest the AmericanTelephone & Telegraph, AT&T, Bell System, hasattributed to the advancement of new technologiessuch as video dialtone which provides access tomultimedia applications by a diverse number ofsuppliers. The United States decision to divestcontinues to influence telecommunications today.Several developing countries have referenced theUnited States paradigm shift (divestiture) as amodel promoting privatization and liberalizationpractices in regards to achieving greatereconomic and national empowerment.
Advocacy for and against divestiture,privatization of liberalization processes cantake years to finalize, however according to theauthor, the 1984 AT&T Bell System divestiture wasnot an overnight decision. The United StatesHouse of Representatives and The Senate 1 heldhearings and testimonies coneerning theramifications of Bell System's divestiture datin.1back to the mid 1970's.
The divestiture brought alv.ut change that aftecisthe entire United States. The tie inde,t1;
was the primary focal Point during tk-0 pet LThe AT&T Bell Operating Companies were,
result of the divest lure, divided int,. sevenindividual companies that provide s(tvices whichare rest t ict to regional jut isdtct ns
providing local services. lhe long dist.no.i
phone service component (d the hell System wai.granted to AT&T to pt uv i,le c.mpot it ive inter
exchange cattier service in a market with t1H tcarriers which include for example, WI andSprint_ Several ramifications c..nt.inue to imi,J,1
functional components of telecommunications suchas alregulations and pol Wimplementat 1,n andprovisioning, clinftastructure and design,dlmarketability and Service, Opricing andcompetitiveness.
The intent of this paper is to recognize theimportance of the ramifications of the neededparadigm shift as exemplified by the UnitedStates when it introduced video dialtone.
2.0 VIDEO DIALTOUE AS PROPOSED BY THE FCC'
"Video dialtone is a video transport servicewhich transmits video programming both intrastateand interstate via private line, or point tomultipoint arrangements over the existing publi-switched nartowband network operated by LocalExchange Carriers, LECs, and Inter ExchangeCarriers, IECs,(e.g., AT&T MCI, Sprint etc.common carriage). Video Dialtone expet(mentalswitched access is currently being tested usingthe narrow band facilities."1 The deployment (fintegrated broad band networks, (1BN), (dferingvideo dialtone is anticipated after the initialimplementation of video dialtone technologybecause it means building a new networkinfrastructure which will ultimately ref, lace manynarrow-band applications.
The Federal Communications Cemmission, (FCC),proposed the vide, dialtone policy to pfvide
C(4updlly cable televusI.ti doss
"40"Ishie. Hrric.r ttie r.ropes,d video dialtenep, 1 icy to it her the 1.1..c, which would taowt,i, the
dtalt.n, not a vidiL progratuma, wh.use the 1F.c ptovided diltotie, scold n,d I.Amt ..a ,h. U ti c.11
cmmunicat ion- Policy A.1 -I 1)44, filet,. may 1,
ht t 1, s 011.:aate and t(dtal gvernment policy. !hit-
papr It mat i ly examines the ti-gulat to. y
t. 11-1 14, into. t .111 .,1In t I let: th, 1!1:ops sult..luldiho the
imprt "int
736
understand the total impact which the videodialtone policy will have on the cable industry.Regulation of cable operators at the local levelis accomplished through the franchising process.The franchising authority is usually a localmunicipality and requires an annual operating feefrom the cable system provider. In addition, thefranchising authority may have some interest inthe subscriber rates charge by the cableprovider.3
Franchises are typically contracts which containthe terms and conditions under which franchisesare awarded. Franchise regulations determine thecriteria and requirements for the cablecompanies' operations which include theprovisioning of facilities and equipment. Therequirements include a broad range of videoprogramming and other services which adhere tocopyright laws and national technical standardsspecified by the federal agencies as they relateto equipment and facilities.4
In its Further Notice cf Proposed Rulemaking onthe video dialtone proposal, the FCC requestscomments on specific issues, including:
1 The investment and development costassociated with LEC deployment of videodialtone.5
2 A minimum broadband switching requirementshould be enforced and if it is feasiblefor the LECs to be able to implement sucha requirement.6
3 The development of a single transportfacility (voice, video and data).?
4 The cost of constructing a system withbroadband switching capability.8
5 The technological advances and benefits ofcompetitiveness.9
6 Public opinion about LECs acquiring thefacilities cf a cable franchise andoperating facilities under the videodialtone regulatory structure, with itsattendant nondiscrimination obliaationsenhancing comporition among serviceprovidots."
'I The impact fiber-based and othertransmission technologies might have onthe evolution of advanced networks."
it The nature of services and markets thatmay develop as the advanced networkelm 1"
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11 On regulatory distinctions between videoand non-video services which may becomeproblematic as technologies converge.15
This paper will identify industries which have aninterest in the video dialtone policy. It will
discuss specific comments on the FCC's proposal
submitted by industry representatives andinterpret the tactics used in araument for andagainst the telephone company/cable companycross-ownership rules. The FCC's proposal, ifadopted in some form, can provide advantages forall communication and information providing
industries. The primary focus will be on theimpact of the proposed policy, if adopted, on the
cable industry.
3.0 CABLE TELEVISION IMPACT-BACKGROUND
The FCC's video dialtone policy initially poses athreat to the cable industry. Cable was borne in
1948, when the first community antennatelevision, CATV, systems was built to providebetter quality television reception for broadcasttelevision signals in rural areas. The first
CATV systems carried 3 or 4 broadcast signals andsubscribers were charged $3 $5 per month.16 By
contrast, today, cable operators offer as many as100 channels of video programming, most of whichis delivered by satellite, and cable service isno longer confined to rural communities.
According to a household subscriber study withbasic cable service trom 1965-1990 conducted byA.C. Nielson Co. in 1990, "Cable television isavailable to nine out of ten televisionhouseholds in the United States. Six in tenhouseholds, or more than 53 million subscribers,have chosen to subscribe to cable, with theaverage subscriber receiving over 40 channels."17
Since its beginnings the cable industry hasexpanded and continued to provide more and moreprogramming opportunities, which greatly enhancedits popularity and attracted many subscribers.Today, the cable industry is threatened by theelimination of telephone company cable companycross-ownership rules, which will not only forcethe cable industry to become competitive, butwill also change all communication, media andinformation industries. Fundamental operationalchanges will occur regarding program content andprogram access, if the cable industry is to stayafloat and be competitive. Cable organizationsraif.se excellent points as to the validity of the('CC's authority and jurisdiction to proposeservices related to intra-lata, intra-stateboundaries although video dialtone may not belimited to those boundaries and may cross interIota, infra -state connections as well as inter-state connections.
4.0 VIDEO ntALTouE REGULATORY ISSUES
This section will focus on the important issueswhich die reptosenled in the comments made byrpros,nt.itives from the following industries.Tele.-ommunicat ions service providers such as
-* !)
C.-, 0
inter-exchange carriers, local exchange carriers,Regional Bell Operating Companies, computerinformation providers, local governments,broadcast industry associations and the telephoneindustrial associations. Note that the cableindustry commentors did not go into detail alAnregulatory issues in response to the FurtherNotice of Proposed Rulemaking, FIIPRM. The eahleindustry commentors maintain focus on the LCentry into video dialtone and other businessrelated issues which will be discussed later.
The National Association of Regulatory UtilityCommissioners, (NARUC), comments state "NARLICcontinues to note that the provision of videodialtone service, on an intrastate basis, is
subject to State regula'eion pursuant of theCommunications Act. To the extent BOCs canprovide an interstate video dialtone service,under the current jurisdictional scheme of theCommunications Act, the rules concerningjurisdictional separations must be examined."18The NARUC comments indicate that States should beallowed to regulate the allocation of costsbetween the telcos regulated telephone serviceand cable television services, including theright to order structural separations wherenecessary.19
Cincinnati Bell Telephone's External Affairsoffice reports that there is a need for a certainlevel of regulatory symmetry in order to promoteeffective competition between LECs and cableoperators. Since LECs are already heavilyregulated, cable operators would have atremendous competitive advantage if their currentstatus remains the same. Cincinnati Bell'scomment suggests that a greater level ofregulatory symmetry could be achieved byincreasing the regulations applicable to cableoperators to the extent that cable operators areinvolved in the business of video commoncarriage. In essence, Cincinnati Bell feels thatthe cable operator should be regulated to thesame extent as any other common carrier.29
[The FNPRM presents two regulatory approaches forimplementing video dialtone. The two levelapproach offers better protection against EEC'suse of discriminatory practices. As interpretedfrom comments by th National Association ofBroadcasters, NAB, (CC Docket No. 90-623, filedMarch 8, 1991, at 7-8, Computer III Remand),other industries have experienced discriminatorypractices which could be used by telephonecompanies to impede competition in enhancedservices. For example, a federal court recentlydetermined that some companies in the airlineindustry engaged in anti-competitive activitiesin connection with the display of flightinformation on computer services provided totravel agents. (In Re Air Passenger Computer
Reservation System Antitrust Litigation, 946 F.Supp. 1443 (C.D. Ca. 1988)). The companiesengaged in a practice, known as "displaybiasing," whereby the flights of one airline werealways displayed first, with flights operated bvcompeting airlines often being difficult toaccess. The result, the court feund, was thitconsumer choices were nut always based solely ofthe merits of a particular flight, and the vain,of the vendor airline's flights was artiliially
int tat od. Disl ty ifitl. 111 '..1;t I un,r e:;ti Its in A t 1.110 14- t lie ',1S11111,1 .ind an
tint easott t(;41 t en /,111/.,1 it i.n.he (VI j .1r,,1 1. H
.1 v .111 ti ti Sia i CtS, 'anti kitfit.0't "'COS C1.11.1 1) I)/ 1 IV( oft Illit A 1
adva.. age It, t hilt .11 V set S I .s.ot compttitots. It this, services wore t - he
offered ttuoluth monus ac.-essibl tfuowitt4-i)trituoni,.dt k.ris ei.nttolled by t 114 I 11,1 sir 1 1
be all Ifl',(11 I \N lest the IF,. I I
SOI ic,s 41411t 1,11 111,1111 111,10 , t
del I ittterit 01 (-4-Atipct it 4,./ s
['.'ideo program suppliers may lie tiaowiti
interstate communications, with dial it video
tape rental libraries. The potent i.iI m.v(imr0 e t
services steering away ir,m the traditterritorial basis for its ittrisdi'l ion. Ill'
(:(mmuissi,u should dtrmine offerings that aresubject Sect ion 201 and 214 and which are
not..j22
5.0 IHFRASTPUCTUkE CoUSIDEI(ATIoNS
The video dialtone mdel represents a change toall interested patties, palliculatly thetelephone companies and the cable televisioncompanies, whose current infrasttuctures aredifferent from each other. The public telephonenetwork is structured in thtee layers. Thephysical layer supports infrastructure Icatelephone services. It is the facility orphysical wire used to send electronic signals.The transport layer provides passage for switchedtraffic information. It is the data which isconverted into messages sent (voiceconversations). The value-added services orapplications layer stores, retrieves, andgenerates or processes the information that wastransported. This is the information whichcontains where the message is going to and whosent it.23
By contrast, the cable television infrastructurepartly consists of transport distribution ofinformation to stbscribers. This is the abilityto send information to mosses of receivers. Thecable television network also consists of a valueadded television programming services whichprovisions entertainment or other information.(Whereas telephone companies ordinarily do netcontrol the content of information sent overtheir network, cable operators typically control,the rent ent ttansmitted over their net works.Unlikc telephone companies, cable operators knowwhat. is to be transmitted in advance.24
The two infrastructures ore therefore, verydifferent. It is important to note that thetelephone infrastructure in its ptesnt matrixlorm and its future packet form is a two way,11111111111Cat ions exchange. Ph, matrix torm allews
t 1,e inter cenneeted from one point ti-
fmtnY Points OS W,11 AS point to point ,u multipoint . by CHltaS!, 1.111. system is built .11
.1 point t mu I t tit , one wdy c,flituuni,dt itc,nsntwerk.
It is imprtant tc. net, that the FCC's call for
738d 4
1-7' U
comments seek information regarding the LECincentives for updating current infrastru,.tur sto accommodate fiber optics and mile advancedbroadband applications. The concern is that byallowing LECs to enter into the programmingarena, they would have more incentive CO investsooner in the infrastructure upgrades.
Many political issues are involved in theinfrastructure changes required to offer videodialtone in the suggested manner of the finalNotice. The position on Capitol Hill is verycontroversial. For example, an infrastructureissue, H.R.3515, Sec. 101, Title I, (h)
Telecommunications Act of 1991: InfrastructureDevelopment: Network Standards: Study;
No later than 279 days after the enactment of theTelecommunications Act of 1991, the Commissionshall initiate an inquiry to examine the effectsof competition in the provision of telephoneexchange access and telephone exchange service onthe availability and rates for telephone exchangeservice furnished by rural exchange carriers.
The bill was approved by The House ofRepresentatives however did not gain approval byThe Senate. It is suspected that theramifications of investigating the effects ofprovisioning access and services can beenlightening at this preliminary stage. However,
United States citizens may be concerned about thedeployment of this bill resulting in higher
taxation.
The cable infrastructure as previously mentioned,transports over a coaxial cable and optical fiber
networks. It uses antennas constructed on highground to pick up signals from broadcastairwaves, microwave transmitters, or satellitesand transfers them to headend sites where theyare converted into pulses and transmitted viaterrestrial cable (coaxial or fiber) undergrounduntil they roaches the channel to the television
set in the home.4''
Cable services are typically divided into twocategtnies, "basic" and "premium/pay", althoughthe boundaries have begun to blur. Basic service
consists of a general package of televisionchannel acc't's.: including the Incal affiliates of
the major lai,aitast studios and at least one PBS
star ion and kwdl independent bteadiaststar ion. Advert iset suported, satelliteservices such as chit and SPII, dS Well as not-
for ptofii re Itgi-us ntwiaks, at, also included.twal oridinat 1-n -mmunity and public,government and educational access channelsPt'AIt,gnmod by memt.ts id the 'ittlimunitY,
government officials ig educational institutic,fis
are ,rise T ypical ly avai !able as par t of
cable :.,*1 V . I teneum Si I V iCoS I Mit! movies,I S .110 mule lr cable specials As well dS
Premium s.-tvlces like HBu, Showt ime, and
rh, 1 isto'y channel which it colitmetial f tee, and
kri.,wn as pay setvices. Pay srvices dre
yr t,'1 I Ilily ch,i/
sod t h. no,nt hly 11110, hdssetVicc. Many Stil,SctlietS c.111 ptase cable
Ptiotramming en a pay It view basis. Channel
.0, '' thh tang,' I r,qh 12 ti,
lug "1' m.ge depending "n where the abh system
BEST COPY kiliiihiiLE 7"
is located. The older systems are much morelimited. Most of the advertising-supportedsatellite delivered cable networks are madeavailable to cable operators at a specific feeper basic cable service subscriber(e.g. 10cents) .26
If the telephone companies can expand theirmarkets to provide service to the rural areasthat are currently serviced by the cableindustry, by nature of their networks andinfrastructure, the public would undoubtedly wantservice from the best quality service provider.
Ultimately, the FCC's forecast is that videocommon carriage could be offered over a broadbandnetwork analogous to the existing nation-widenarrowband telephone switched network. Such anetwork would enable any subscriber to transmitand receive a video signal to or from any othersubscriber. Broadband video common carriagenetworks might run parallel to the narrowbandnetworks, or they might be integrated withswitched narrowband communications.27
Cable industry officials say that the cross-ownership restriction is strictly for telephonecompanies involvement in providing programmingcontent, not in transmission facilities. Cableofficials feel that the deployment of fiber bythe telephone industry has already begun and isnot dependent on whether telcos are permitted toprovide progrcc content. "When people talk abouta broadband local network, they often refer to'fiber to the home', which one day may be thepreferred technique. Meanwhile, Ameritech andthe other regional companies have beenexperimenting with ways to transmit broadbandsignals to residences without using fiber theentire length."28
S.1200 is a bill introduced by Senators' Burns,Gore and Dole which proposes that the UnitedStates allocate funds to modernize thecommunications infrastructure to include anationwide, advanced, interactive, interoperablenetwork to satisfy the information handling needsof our citizen. now and in the future. TheUnited States has led the increased deployment offiber optic cable to date. Projected fiber opticsales between 1991 and 2000 show North Americacurrently at 1.29 billion dollars and 3.41billion dollars by year 2000. It also showsEurope at 1.23 billion dollars now and by year2000 Europe is expected to lead the world withG.21 billion dollars in fiber sales.27
The goal of 5.1200, cited as the 'CommunicationsCompetitiveness and Infrastructure ModernizationAct. of 1991" is To advance the national interestby promoting and encouraging the mcre rapiddevelopment of a nationwide, advanced,interactive, interoperable, broadbandcommunications infrastructure on or before 2015and by ensuring the greater availability of,access to, investment in, and by ensuring thegreater availability of, access to, investmentin, and use of emerging communicationstechnologies, and for other purposes. "28 ThisBill has currently been referred to the SenateCommittee on Commerce, Science, andTransportation.
1.7 2
g 6 I
Highlights of the Legisl,:tion include:1. Economy is becoming more dependent -n
provision of services that requitetransport and distribution of information.
2. 50% of US workers are currently employedin information intensive serviceindustries heavily relying oncommunications
3. Manufacturing companies are as affected bychange as are the Service Industries.
4. Communications has become a highly visibleand valuable measure of informationdistribution and dissemination.
5. The communications infrastructure of thefuture will be as important as thetransportation infrastructure has been tothe industrial economy.
In 1990, the cable industry invested 18 milliondollars installing fiber optics throughout theU.S. existing Cable Systems according to theNCTA.
5.1 MULTIMEDIA ACCESS OVER EXISTING TECHNOLOGY
1110SL/comer twisted pairBellcore is exploring a preliminary view of aninitial set of generic requirements for High -bit.-rate Digital Subscriber Line, HDSL, transmissiontechnology. Currently, the existing coppertwisted pair of wires that are used in mostresidential areas to provide basic telephoneservice transmit signals within a spectral rangeof 0 4 khz. The narrow bandwidth is directlyattributable to the intrinsic properties of theelectronics that are used to transport signals.HDSL technology utilizes recent technologicaladvancements in echo-cancellation techniques andtighter tolerances in component devices to expandthe usable bandwidth of the embedded coppettwisted pair to 1.54mbps. Although the bandwidthcapability with HDSL still falls below highbroadband speeds, it far exceeds the narrowbandwidths currently available over coppertwisted pairs. This technology can allow manyinteractive and interoperable applications as astepping stone to the future. HUSL will providean alternative to repeatered Ti lines forBellcore customers to support repeaterless DS1rate access over copper loops that conform toCarrier Serving Area design rules. Arepeaterless HDSL will allow DS1 access within aCSA environment. An optional outside plant IIDSLrepeater would allow extension of the coveragebeyond a CSA on non-loaded loops. The overalloperations approach for MDSI systems mustconsider the existing environment into which HDSI,will be deployed.
ADSL/coober wireAsynchronous Digital Subscriber Line, (ADS1.1, ran
be used for a variety of image and audio 1.1sed
services that reach into the education,entertainment and home business realms.Videoconferencing will be made possible withcomputer workstations that the rustr,mer cat
740
t i t :id arid i t . : : ,
t attits ati I r t., n: mitt ed t lit tuth t lit
wit tk.
The AbSI- line is sliuht ly hioht than the DS]
tate t Nhis Lot is twe t.
Mbis DS1 channel, a 11 kl,'s .,aatol channel 11.411
the ruawotk to the itst.rhet and abto Dr.%
overhead fur forward tarot t.atet1 1.m It it
VAN coding. Today, vide, ...tderetwingapplications are bein0 transmrtted from RolIal, ut
code: units dIld desktop yid,. aillicat i-n:. over
BR1 15141 at mutt iple tat.; of flt plus Ir. 'Meteare some systems which ate St ill e-st ly that ate
available over PRI ISDN which ttansmits 2i (.4kbps typo channels simultaneously In d
full motion picture quality.
6.0 PROPOSED IMPLEMENTATION STRATEtlY
The FCC's video dialtone model is emprised oftwo levels. Level ono: At this level LECs merelyoffet basic transmission service to a setviceprovider enabling them to reach homes. LEn's will
also provide service providers with access towhat ever information is needed to performbilling and collection for their service. LECs
will further provide access for the subscriber toreach the service provider and provide a basicmenu with tutorial and help functions which willbe useful to subscribers as they use theplatform.
Level 2 : This level will allow the serviceprovider and the LEC to both offer value addedservices , which are referred to as advancedgateway services. This level allows the LEC tobecome the agent or broker for the serviceprovider. The LEC handles the operations andmaintenance of the service which is owned by theservice provider. The LEC provides advancedvideo gateway and related services, which areconsidered unregulated services, subject tocompetition from other gateways and videoservices for which the LEC acts as agent. It is
this level that the LEC can enter into thecompetition of providing its own programs whichwill be offered to the same potential subscribetbase, as with its clients, the service providers.
6.1 COMMENTERS VIEWS ABOUT IMPLEMENTATIONSTRATEGIES
As already noted, the FCC has asked for publiccomments on the implementation and deployment ofthe video dial tone. The main issues on which theFCC seeks cotments include: The cost 01construct inn a system with broadband switching
9110 natute of services and marketsthat may develop as the advanced network emergesunder tile video dial lone model; Whet het itsvideo dialtotu. prepsal is consistent withSrt ion 613 (10 (11 of the Cable Act and addresspotent ial difficult ies which may arise in thefuture in applying the pc-Hey as new servicesdevelt
Th. F" 1. Id I t, --1,11 it y in t he 1,111 Ito
7 '
provisioning issues, service celli...ti"ns, cl, andwiring when referencing non-couution carrierofferings in the interest of ditect conflict tothe Cable Act.29AT&T supports the Commission's prop,sd two levr-1video dials one gateway. The AT&T comments statethat a twolevel gateway reduces thr risk of LECdiscrimination against enhanced service providerswhich compete with the LECs' own enhancedservices that use the gateway. They urge thatthe LECs would provide tarifted access servicesand menus in the first level of the gateway. Theservice menus in the first level would not.contain any LEC enhanced service offerings. AT&Tsuggests that the LEC enhanced services wouldonly be available to the second level gateway.'A clear demarcation between enhanced and basicservices is important because the FCC's presentnon-structural safeguards, such as Open NetworkArchitecture and joint cost accounting, applyonly to enhanced services, not basic services.Independent enhanced service providers such asCompuServe need protection against the RBOCs'demonstrated ability and incentive to cross-subsidize and discriminate.30
The National Association of Broadcasters, NAB,contends that the prohibition against telephonecompanies providing content for video programmingwithin their telephone service areas should beretained. Further, any limitation short of anoutright ban would be unworkable orconstitutionally suspect. Adequate safeguardsare not in place to protect. LEC competitors fromanti-competitive activities. NAB also arguesthat LECs already have sufficient incentive tofurther the Commission's video dialtono goalswithout generating content for video programmingwithin their telephone service areas.31
If video dialt.one service is to generate themaximum public interest benefits, LECs should notbe allowed to favor their own informationservices over those of their competitors, andaccessing the service should be easy for thesubscriber to use. The implementation of videodials one would allow more interested patties, theopportunity to provide video programming t.i thehom.2 Northern Telecom indicated that currentopen network architecture pricing must considerthe marginal cost when providing services andequipment to make video dialtone a reality. The1.C will he expected to provide excellent qualitytransmission I,t. i I it les for the lowest possibleptre,.
1.1..cs would lo 1,11116 t pt behalf of.toy id, .i set 1.tovid. is (Itti,1 t.roresstrill,it 1 I if1(1 and ..ol It ion, rush emir i nst al l,et i -iris,
and eust met IA. 0,111i r111,111 f or theuntular od vidr :,etvices, pursuant tc (X
1,,V11,0 y provision,. To If, extent
Ecs I.r ,i1 Iheru r.,,ries to their own vide,,),II,1111111111,1 .,:`? i , , 11,"/ I kiwis, r..t
t he .
0!,,s,i0Ird with I,E ,n1f(0-ih0
provider 4qdfq tao,essino, hillino and.ill, 1 ion, , usaomet inst.tl kit ion:, .ffid
untroulat ,d vide,,1 . r/ he di I 1 i,111 1,0 th. lit 1,, 111.1i it di
in working en trek]] I
741
competitor's service.
2. May cease opportunities to use comparativeinformation such as billing and pricingschemes to solicit service provider'ssubscribers to change their minds andsubscribe to LEC's service instead.
3. Unless existing commission regulatoryprovisions include the regulating andmonitoring of the LEC's involvement withservice provider service handling, therewill be no way to tell if the LEC is trulyhandling the processing of the orderfairly and without offering its ownservice.
4. LEC has direct contact to the customerunder this model. The service providershould have more control.
Advantages associated with LEC offering serviceprovider order processing, billing andcollection, customer installs and CPE forunregulated video service:
1. Customer may want to use more than oneservice provider and the LEC provides forone point of contact.
7.0 MARKET SEGMENTATION
a. Consumers- Receive competitive programmingand ease of use for video and non-videoservices to the home. Quicken thedeployment of fiber optic transmission.Lower cost to entertainment programmingand increase home marketability.
b. Businesses- Video conferencing, desktopapplications, ease of transitioning tofiber technology. Higher bandwidths atgreater speeds provide for increased dataflow and file transfer applications.
c. Not for profit organizations-Competitivepricing on public audiences and access toinformation and dissemination ofinformation.
Economic Development(Al Current reports focus on the deliverance ofintegrated broadband networks, (ION), switched,and interactive video for the residential market.Although residential markets are the primaryfocus for the dissemination of information andservices available through use of the IBNtechnology, it is argued that due Co economic andsocial forces, advertisers will cater newproduct and service promotions to preferredmarkets. This is known as market segmentation.31
Traditionally, network television programming hasbeen primarily considered a vehicle fordelivering sponsors' advertising messages.Programming differentiation and quality has notbeen a major concern, since the televisionaudience has been seen to be a mass market.However, with cable television, satellitecommunications, and home video options, thetelevision viewing market is becoming segmented.Viewers are no longer captive audiences fornetwork programming and their advertising
$ ii
messages and now have a wide range of program:linooptions to satisfy their entertainment andinformation needs. Trends toward televisionmarket segmentation suggest that the networkswill need to develop programming targeted toconsumer tastes. Ratings data will be inadequatefor programming and advertising decision makingbecause they lack qualitative detail.Segmentation research into the characteristics oftelevision viewers and their programmingpreferences will be necessary to make effectiveprogramming and scheduling decisions, as well asto determine which programs will be effectivevehicles for different types of advertising.34
(B) Penetrating broadband applications and newmarkets such as video dialtone will aid theadvertising industry by providing productpromotions, in most cases which are moreeffective than its traditional presentation. Theadvertiser will benefit by getting specificgeographical and financial information about theviewer from the service provider or agent thatprovides billing to the residential subscriber.As billing agent for the service, there is a lotof statistical information available to determinea particular market penetration. ANI 'calleridentification, (caller Id)' features ateavailable today on the public switched telephonenetwork. It is currently being offered onapplication interfaces such as Call Path/400,IBM, in conjunction with major Private BranchExchange, (PBX), vendors. Call Path/400 providesa broad application program interface, (API),
which integrates voice and data communicationsfunctions and information into the AS/400applications.
To date, the Call Path/400 application allowscapability for ANI/DNIS features. ANI is theability of the interstate telephone network toCrap and transport a record of the phone numberoriginating a call. This transport is part ofthe telephone network's billing and controlfunction and is also a specific element of toeISDN standard which cannot be stopped bysubscribers.35 The local delivery of a caller'snumber to a receiver's telephone is a billabletelco service generally called 'caller id' whichcan be blocked if the telco allows it.Statistical information provided by caller Idwould be the advertiser's database to a newrating scheme. This information is valuable toresearching methods in that the level of accuracyin identifying markets will become greater.Unfortunately, the new technology and surge forinformation access is forcing all communicationmedia to enter into new ranges of informationofferings even if it isn't their traditionalbusiness.
In the newspaper industry, editors finally arelearning to serve the needs of readers. Althoughhousehold growth has been rapid in the last fewdecades, daily newspaper circulation has beenflat for 45 years. In a fight for survival, newsexecutives are changing to reach more househaldfaNewspapers are beginning to understand that they
cannot survive unless they compete in theinformation industry against such rivals astelevision, radio, and computers. if a
redefinition of newspapers catches on, trite
BEST COPY AVAILELE 742
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local steies. The u,,il is l,a n,wspap, a t
t 41,)s t ion I lo quso 1 -:-. as t lo n, WS s,uf,,
in the matkt . Market research is previdingnewspapers with intetmat ian -n suf,sctihers
want .16 A dan,1,1,115 .1s1', ''t Jini till I hiS[If ot mat i.tn by way el In I I k(1 -it nempt at ions at b,,t h t .idv It i s.I .111,1 h is
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realities:1. Visuaiizat nn: s medium of
cemmunicaf lens has t he p.wer t., simulate
the pi acbiCal at/licat inns el the prothiet
or service being pt,,mot tat IBN suggest.that video wouldn't replace magazines but
that advertisers will shift certainpfoducts to video particularly where theyare well matched te program content andaudience profile.'"
2. Loss of marketing resources: The shift tovideo will decrease the customer list tit
marketing and research for publishers.This may also be true for video providersbecause customer access methods may bedesigned in ways to limit privatedemographic and financial information."'
Market segmentation can be dangerous ifadvertisers are making broad assumptions aboutwhat subscribers are like. A subscriber can notbe assumed to be within a certain income bracketjust because they subscribe to IBM services. If
for argument sake, consumers find that the valuesof the available programming and services do notreflect their life style, wants, needs anddesires, they will make choices to seeksubscriptions which meet their needs, else where.
It is projected that, by the year 2000, minorityconsumers will constitute a roajority ofpopulation in 1/3 of the US' 50 largest cities.The top 3 minority groups African Americans,Hispanics, and Asians represent a $300-billionmarket now, according to Deloitte and Touche andImpact Resources. The size and power of theminority market is not reflected in strategicthinking and planning in most businesses.Efforts to provide products and services tominority segments will fail unless businessesknow and understand, respect, and correctlyaddress minority needs and wants. Some commonlyheld myths about minority segments are1.inorities are monolithic groups. 2.Companiesdo not have to target minority markets becausethey can reach them with general media. 3.
Language is a minor consideration. 4.Minoritiesare lew.ieaeme eonsumers. Those seekingmarketing upputtunitios among minority segmentsmust sh,,w a sensitivity to their culture, values,and lifes'yles.")
H.° CONCLIISIM
Adan, meets in t,ehn-legy and the divi.:stiture of
the telecommunications indurry cont inuos itscause and effect. impact.. Deregulation of theCable industry was passed in accordance with theCable Communications Act of 1984 and became lawin 1986. Today, the industry is facing a toregulation which will bring its efforts in a 7$60rotation. The year 1992 marks a presidentialelection year to the United States government.Major issues are before Capital Hill.Unfortunately, the cable industry has not beenable to fair well in the press, and instead,receives continuous remarks about its rateincreases and poor customer service.
Since 1986, when deregulation became law, cableoperators raised rates and did not educate thepublic about the reason why rate increases werenecessary. Basic service increased 56% between1986 to 1991. Enhanced or popular cable serviceincreased 61%.
The public was not informed about the increasesin programming cost, nor were they aware that theincrease in accessing channels also increases thecable operators cost for providing free access toadditional basic service channels to the public.
The cable industry has indirectly competed withother industries such as national television,PBS, movie theaters, and home entertainmentvideo's which are also programming alternativesavailable to toe consumer. It has also competedwith the print medium which includes, magazines,books, and newspapers.
Actually, the competition doesn't stop there,depending on the individual interests andhobbies, other electronic media can be included.The cable indu -'try has yet to educate the publicthat using cab.e services is more than a valueadded service, that it is a necessity. Onlyrecently, attributed to project 'Desert Storm',cable television subscribers were faced withidentifying that CNN, a cable provided broadcastchannel, had the best coverage of national andinternational news. Understanding the value ofthe technology is very important to the public.The telephone companies continue to raise prices.The public continuos to pay for telephonesorviros. One could ask why is telephone anecessity opposed to using other media.Actually, the teloco's public relationsstrategies include long range planning which thecable industry hasn't yet begun to visualize thevalue of cable sotviro CI for i rigs to the public.
The'r'e ..ro a mult itudo of issuos sutroundinq theimpact on the cablo industry as it relates to theadoption of video, dialtono. As the champion ofproviding recept ion and quality to rural andurban subscribers, the cable industry must stopand look at. it market and re ovaluato itsmission. Markots it changing and as statedabove the flow of infotmal ion is sogmentino. Thinajot concern of the cable industry should lvthat it knows how to Motility and roach itsmat kol . Advott ising sttatogios ate not going tocontinue spoils.t tat it's tti its tradit imitator ,
instoad it will adopt now ways t., toach tho tightmarket tor its offotod prothict of soivico.Evontually, consumts will Lo sophist icatodon,figli to seek advert isomonts Lased on nood.
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This will become an evolution in the advent of"advertisement on demand", a prodigy for theeducated consumer.
The comments presented above reflect interestedparties of two industries which are destined tocombine. Transformation is difficult however,the beginning is the best time to air concernsand to take the best qualifications from eachside to provide the video dialtone service in themost appropriate and cost effective way to theAmerican consumer.
There are financial considerations which willdetermine if offering this service in the way inwhich the FCC proposes is the most beneficial forthe future of the technology. It is alsoproposed that the LEC incentives for deployingthe infrastructure for the video dialtoneplatform will be the leading resource forproviding other broadband services.
1FCC Docket 87-266 Farther Notice of PrOOOSei Rulemaking
Erst llonort and Order and Second Further Notice of
,nouiry(FNPRMI: pg.7;Our view of video dialtone is that it
is an enriched version of video common carriage under which
LECS will offer various non-programming services in addition
to the underlying video transport. Video common carriage
encompasses the transmission of entertainment video
programming and other forms of video communications, both
interstate and intrastate. Video common carriage may be a
private line, or point-tomultipoint offering, or it may be
switched. although switched systems still are largely
experimental..
2Further NOttiCe of PrOIXISeLL-BaileMasino First Report and Order
And Second Further Not,re of (unwary (FNPRM): Docket No. 87-
266: Adopted: October 24. 1991, Released: November 22. 1991
by the Commission: Commissioners (Nell°, Marshall, Barrett
and Duggan issuing separate statements.
3Natlonal Cable Television Association, (NCTA),
Ielev's 2 Primer Fart V Frarchistng Auherities pg 41.
Under the Cable Act, franchising authorities generally maynot regulate rates, except that the rates for basic service
tiers may be regulated by local officials in those
communities where the cable system is not subject to
effective competition as that term is defined by the FCC.
4NCTA A Cable Television Primer Fart V Eransblaing
AtehoritieS pg.
8See. FNPRM: pg. 9. No.13. (a) Infrastructure Considerations
We invite comments on the nature of LEC incentives and the
likely infrastructure benefits and costs of proceeding with
video dialtone at this time.'
8ibid pg.10
'ibid pg.10
8,bid pg.10
9ibid pg.10 No.16
18ibid pg.11 No. 17. C. Diversity COnSiderattesS
111bid pg.12 Part 2.
Ze)lign, Nu. 18
pg.12 No. 19
13idid pg.I3 No. 21 'Section 613 (b) (1) of the Cable Act
Olt states that it is unlawful for a common carrier subject
to Title II to 'provide video programming directly to
subscribers in its telephone service area.1341 While the
tom 'provide video programming directly to subscribers. It
)r nowhere defined in the Act, a review of the legislati e
history evidences the Congressional concern behind the
prohibition: to bar local exchange carriers from becoming
caM operacls in their service areas.(35) This ban was
intended to eto-ture that LECs do not provide video programming
directly to subscribers in the same Manner as traditional
cable operators in order to prevent the development of ic,a:
media monopolies and to encourage
14ibid Part 3. Authority to Implement Video f.altone
Oaf Mod;fimatipn of Final JudgMent. No...2. 'we smliit
comment on the way such services may develop and the
applicability of this restriction to video dialtone'.
1Sibid Section (c) Implementation of Video Dialtone No. :3
'We invite parties to comment on this tentative conclusion
and to suggest alternative ways in which video dialtone ctii
be implemented.'
"National Cable Television Association; A cable
Primer: Chapter 1 cable TV:ComIng c),Lage, pg. 6-7,1900
'During its first decade, cable grew at a modest pate.
largely due to a FCC ban from 1948 to 1952 on the
establishment of new broadcast television stations.'
17ilsid. 'This dramatic growth reflects both the cable
industry's willingness to seize new technologies and the
government's decision in 1984 to deregulate the industry.
creating an environment that bolstered new investment in
technology and programming.'
18Nattonal Association of Regulatory Utility Commissioners,
comments 'n tle Matter of Telephone flermeny - Cable
Television Cross-Ownership Rules' 2/6/92: pg. 7
20Stonebraker. Barbara J External Affairs Cincinnati Bell
Telephone comments 'n the Matter 0 Te)enone Commany-Cable
Television Cross -Ownership Rules. Sections 61.54 - 63 50
pg2-6
21National Association of Broadcasters, (NAB). commeot. '-
the Matter of Telephone Company -Cable Televsion cro=s-
ramershtp Robes. ;err ions 63.54 - 63.56- pg 17-18
22National Telephone Cooperative Association, (NTCAl.
levisio-
cross-Ownership R,les. Sections 63.54-0.58 pg.3-4
23Datapro Information Services Croup. Delran NJ 0E075 USA
Wag= Manaoement of International Telocommunicat)ons
Regulatory Hurdles in Realizing Broadband Convernence. 6,91.
pg. MIT 40-250-502.'Multiple suppliers can compete to provide
value added service (and to a lesser extent transport
services) in the telecommunications environment. and
subscribers have the capability to choose freely between
them.'
24ibid 'A single operator provides the cable network,
transport and broadcast programming services to the
subscriber although the supplier generally constructs a
multi-channel package of TV programming material from many
competing sources.'
25National Cable Television Association' A Cable Television
Primer. le
Television pg 11 - 1426,d
27Datapro Management of International Telecommunications:
Fiber Optic Cabling, pg. MIT20-600-402, 'Fiber component
sales have increased with cable growth. North American
component volume projections estimates by industry market
segment illustrate the market's shift: Telecommunications
(year 1991) 67% - (year 2000) 34% : CATV lyear 1991, 5%
(year 2000) 6%.'
2Bibid
29BellSouth Corporation and BellSouth TeloccmmunicatIons.
Inc. COOMeot- In rite matter of Telephongt_Com-rixtas
Television rros.c Ownership Rules Section 63.54_63_,LL
February 3. 1192 pg.30 'BellSouth concurs it the :ore
objectives which the Commission tentatively cono1Q1e, s!4,17
guide the implementation of its video dialton policy. Jr.
particular: (I) that access to video dia.tor, fir
program and other service provide, should he tr. A
discriminatory basis to encourage competitio, , .
diver-Eu.4,, (2) that video dialtone should Go .Asy ff.r ff.
average person to use .n accessing a plethora ( ! vtlo-
744irT:sr COPY AVAILABLE
I
would .p.rt,natfof f o t No, or.fv, t ! . , ', . . , . . t
vide, progiammirg to :mice hore.
with to : t!ost LE. 't .Go
transmissio, facil.t.e a,o, to prct..1, ;:.;f0maff.;
services would dire:tly contrtbite to toe devel';.op-r). f
nationwide, advanced tvlenocr,nicaiurs infrastru-,:ro.
is increasingly important to the pertornar, c of the U.F.
econcry and to he Cl a:: Amerl,ans..
33E:tr- Mar. In Fflfcr
Ito 51.701s 7s,sNes
3'Dc-n7.al, Teresa J.NerrAIG. Jerome P. Zelttylslon'_s_Lfw
-e_CL:12-i_baAwore E'ustwittyla-y2zi, Sumter 196:
35Integiated Services Ligltal Network. ISDN provIdes a ,ser
network interface specification for Basic Rate Interfaces.
BPI. which ale configured as 2 B 1 D channels an f)r
primary Rate Interface. PEI. which are configured as :3 P 1
D channels. Broadband application usages such as video, dial
tone would require FRI capable bandwidth which provide end-
to-end services at certain miltioles cf 64 kbps up to 1.644
Hbps. A customer may have multiple interfaces. The full
information bearing capacity of an interface reed not be
provisioned. The facility is organized into :4 time slots of
64 kbps each. A customer cr video dialtone subscriber can
use only 13 tine slots for calls plus the necessary time slot
for out-of-band signaling or could share the 1.544 Mps
facility with inband-signaled private line channels.
36Fost. Dan Neb-Spane,s Forel- r.e Age of ir,o,rwacc_latelucaz
DercaraphIrs vl2n9, Sep 1990
37ibid pg. 24-37
38ibid pg. 24-25
39Snuggs. Thelma L. Kinoritv Ma-tes_Oerine_l_Lt_Consorner of
the list Credit' vl8n1,0an/Feb 1092
e u
TELECOMMUNICATIONSAND
COMPUTER INDUSTRIESCOLLABORATION
Primary Author: Carol BurkeDigital Equipment CorporationSecondary Author: Joan KellySheppard MoscowMass/NH USA
Abstract:
The relationship between the telecommunications andcomputer industries has changed dramatically over thepast ten years. The needs of the two industries are con-verging with increasing dependencies on one another.In recognition of the importance of the two industriesworking the most effectively together, we propose amodel for their collaboration.
IntroductionThe telecommunications industry has changed dramati-cally, especially in the last ten years. In addition toregulatory changes, the technology has also changedrapidly forcing more collaboration with vendors andcompetitors. The corni. industry is one of thetelecommunications vendors where the relationship ischanging daily.
In parallel, the computer industry finds itself in a verydifferent relationship with its customers. Those thatwere customers are now competitors, partners, or ven-dors. Especially with telecommunications, the bounda-ries between the two industries are blurred and are inconstant motion, requiring redefinitions.
This paper briefly describes the history of the relation-ship of the two industries, the current needs of thetelecommunications industry, and what collaborationsare occurring. Noting how the two industries arechanging to achieve technology and services conver-gence to meet market demands, it then recommends amodel for the most effective collaboration between thetwo industries, recognizing that collaboration will prob-ably be different with telecommunications serviceproviders and telecommunications equipment manufac-turers.
Much of the data presented here is from the CustomerCollaboration Program that Digital's
745
Telecommunications Business Group sponsors. This
program focuses on Digital understanding itstelecommunications customers better to lead to moreeffective collaborative efforts with them. It is con-ducted with Digital's sales organizations. Executives inthe telecommunications companies are interviewed andthe data is evaluated within Digital and with the cus-tomer. To date, the program has been implemented inJapan, Australia, Canada, United States, Sweden, andFrance.
This paper also reflects the experience of SheppardMoscow Consultants in organizational development intheir work on collaborative multinationals around theworld.
1. Brief history of the two industries' relationship
Both the telecommunications and computer industrieshave undergone significant changes in the last ten yearsdue to competition and rapid technological changes.For the telecommunications carriers, many of the coun-tries have or are moving from state owned or monopo-lies operated under strict government control to anunregulated environment. Privatization has pushed theacceleration of change to a necessity.
With deregulation for tie telecommunications serviceproviders and the break up of the market monopolies ofthe telecommunications equipment manufacturers, thecompetition is now a significant factor. Start-up serv-ice providers entering the market are challenging the in-flated cost structures of the mega-telecommunicationscorporations. New wireline operators are going afterthe most profitable segments of the market. Bothwireline and wireless operators are "cream skimming"the Fortune 100 and high usage residential customer,leaving the high cost business to semiregalated entities.
Start-up entities are able to leap frog the antiquated net-works and organizations developed by governmentowned telecommunications companies with cuttingedge computer technology.
In Europe, two service providers, Televerket (Sweden)and the Dutch PIT, have formed a new company,Unisource, to protect their installed base and to protecttheir global multinational customers, like Philips.
For the telecommunications equipment manufacturers,new entrants into the market are providing more dedi-cated cost effective solutions, for example, NetworkSystems.
With AT&T's World Direct Service from country tocountry, the local PTT's in Europe are bypassed and arelosing a significant part of their international calls.
Wireless services are growing by leaps and bounds andare being developed and formed in all parts of theworld. Even with a small population like Sweden's ofeight and a half million, there are three wireless opera-tors: Televerket Radio, Comvik, and Nordic Tele.
In the computer industry, the rapid changes in technol-ogy and consumer needs have driven the large compa-nies like IBM, HP and Digital to drastically changetheir focus fron products to services and business so-lutions for specific customers. The smaller computercompanies with more flexibility to respond to custom-ers have grown to be formidable forces in certain mar-kets such as telecommunications.
Computer companies have had years of extremely rapidgrowth and controlling the market in certain areas.Now their products are more and more a commodityand what they offer their customers is changing dra-matically.
Competition looks very different than ten years ago.
To illustrate, each industry was an entity selling itsservices and products with very little needs overlappingbetween the two.
yendoTi.
customer
As the technologies change and each industry's cus-tomers demand both lower cost services and productsand better solutions to their business problems, the twoindustries are viewing each other differently. They arefinding the c.mstomertvendor relationship is limited andno longer meets their business requirements.
Digital as a customer of telecommunications has devel-oped the capability internally to rivaltelecommunications' services. The company no longerneeds telecommunications as a service provider in thesame ways.
Telecommunications as a customer of Digital oncebought its hardware products for specific uses.Telecommunications now requires more complex solu-tions in the area of both hardware and software andfinds that Digital may be a competitor with some itscustomers.
The relationship now takes on much more complexity.
.Vendor;
Customer
Cipmpetilor
Partner
Selling to same customer
The technology, common needs, and common custom-ers are driving more comergence between the two.Telecommunications finds that it needs the computerindustry to develop, produce, and distribute its servicesand products to a broader market. The computer indus-try, is learning that the convergence of its technologywith telecommunications brings a similar value addedin opening up new markets.
Whose Customer?Both Industries
Collaboration is not only a strategy endorsed by each,but a necessity because they are both so dependent onone another.
The telecommunications industry exists by deliveringcustomer service and maintaining customer informationdata base files. The computer industry, in turn, pro-vides the capabilities to deliver the services, maintainthe network and sort and apply the customer-data basefiles. Without computer intelligence, thetelecommunications industry cannot maintain a com-petitive edge, and quickly bring to market value addedservices.
The delivery mechanism deployed by MCI for "Friendsand Family Service has been a critical strategy to in-crease market share. Deployment of this service wasrealized from inception to deliverance in three months.Without intelligent network computerization this wouldnot have been possible.
The telecommunications industry is redefining its needsand finding that competitors, vendors, partners, alli-ances, and joint ventures are all necessary to compete intoday's market.
746 9 "
2. Telecommunications industry needs and currentcollaborations
Telecommunications companies are saying they need awide range of support in their growth opportunities. Inaddition, they have specific expectations from theircomputer vendors or partners. The data below is asummary of telecommunications needs and expecta-tions from interviews with customers of Digital Equip-ment Corporation in Japan, Korea, Australia, Canada,United States, Sweden, and France. This data was col-lected as part of Digital's Customer Collaboration Pro-gram.
Telecommunications companies are focusing on thefollowing business priorities:
1. New revenue development - hope to gain fromglobal expansion and new markets
2. Improvement of infrastructure of networks3. Improvement of employee morale, capability and
motivation4. Sizable cost reduction5. Financial performance6. Customer needs
These comparies are also focusing ,'.ut what will makethem more successful.
1. Market and customer focus vs. product orientation:Presently people are technically oriented whichrequires major "reskilling" of the workforce"We should go to 'paradigm college' with all oursuppliers and customers."Reorganizing and re-engineering whole corpo-rate capabilities and internal systemsMaturing industry moving towards a commoditymarket
2. Need to shift internal systems:The message is "help us align ourselves to be globaland customer responsive. This is the biggest barrier toreaching our strategic goals, and is as important as ourproducts and services to our customers." This focus issupported by large current and future budget commit-ments.
3. The focus has expanded to succeeding globally:help us sell to global marketshelp us in countries you know and we don't
. need 'open systems' products
. new markets are key to strategic success
4. Slimming of supplier base from hundreds to 3-5:There is a shift in purchasing from all over the corn-
747
pany to centralized "strategic" purchasing. The changeis in business partner vs. vendor role. These businesspartners must:
understand our needs and deliver to them.focus on our performance, not just what youcan sell us.
. vendor to business partner - The way you dealwith us is as important as what you sell.bring us business thinkers, not sales people.partnerships/alliances forming around servicecapabilities and enhancements. Bring us ideasfor new services, not products.promote and maintain honest, open and dedi-cated relationshipsyou must know telecommunications and shareyour expertise with usbring economic value to our customers
. must be "open systems"
. support broad range of products and services onworldwide scale.
5. Financial stability of potential partners and solu-tions providers is critical.
The above statements clearly suggest thattelecommunications' expectations and needs of com-puter companies have vastly changed. To shift fromvendor to business partner requires a very different wayfor the computer companies to relate and work withtelecommunications. The shift is to move from selling"boxes" to bringing value to the telecommunicationsbusiness in technology, services, and markets.
For examples of current collaborative endeavors intelecommunications, some of the 1992 literature wassurveyed. These endeavors are with vendors, custom-ers, and former and present competitors from the com-puter industry and other industries. The sheer numberis impressive. In one search, over seventy articles werefound about specific collaborative ventures. The over-riding purpose for the telecommunications companiesin each venture is combining technologies to offerwider services in a broader market to be more competi-tive.
These are some examples:
Network integration: US West Inc. of Englewood,CO, is finally getting serious about being a network in-tegrator.... US West's Advanced CommunicationsServices group has signed contracts to sell hardwarefrom Cisco Systems Inc., Advanced Computer Com-munications Inc. and plans to sign a contract withTeleglobe Communications. US West will sell itself as
rt A
a one-stop shop for integrating local area networks(LANs). (Computer Reseller News, Aug. 10, 1992 486)
Competitive edge: "More and more, businesses areusing technology to give them a competitive edge," saidCurtis Weeks, PBX markets vice president for AT&T'sBusiness Communications Systems group. "Applica-tions that link telephone systems and computers helpcompanies improve customer service, increase agents'productivity and hold down operating costs."
"HP and AT&T are working closely together to givecompanies the ability to provide the high-qualitycustomer-service that is crucial to the success of theirbusiness," said William P. Roelandts, vice presidentand general manager of HP's Networked SystemsGroup. "Companies want their phone conversationswith their customers to be pleasant, productive, and ef-ficient -- HP and AT&T are offering an integrated solu-tion to allow them to do this."
AT&T also has agreements with other major computervendors, including IBM, Digital Equipment Corp., Stra-tus Computer, and Tandem Computers. These compa-nies market systems that support AT&T's ASAI stan-dard to link their computers with AT&T's telephonesystems. (EDGE on & about AT&T, July 6, 1992 v7n206 p22)
Collaboration agreement: Northern Telecom deEspana S.A. and Telefonica de Espana S.A. last weeksigned a collaborative agreement to establish a businessrelationship in data networking.
...Telefonica, Spain's national telecommunications car-rier, will distribute Northern Telecom's advanced datanetworking technology, including its DPN-100 productfamily. The agreement underscores NorthernTelecom's commitment to the growing market for ad-vanced data network systems in Spain. (EDGE on &about AT&T, June 8,1992 v7 n202 p4)
Strategic alliance: Dow Jones & Co. Inc. andBellSouth Corp. have jointly developed a new interac-tive advertising service. The Reader Service Line isthe second service announced by Dow Jones andBellSouth as part of their recently formed strategic alli-ance to jointly explore and develop new business op-portunities in the information services market. (EDGEon & about AT&T, May 18, 1992 v7 n199 p3)
Agreements: DEC is expected to disclose agreementswith RAM Mobile Data and BellSouth Enterprises Inc.
to offer users wireless electronic-mail services as wellas plans to develop E-mail software for portable com-puters that will let users exchange messages over awireless, radio-based packet network. (NetworkWorld, May 18, 1992 v9 n20 p8)
Merger: The 1991 merger bete. cen AT&T and NCRrequires that executives from each company make aneffort to understand the corporate cultures involved andto cooperate amidst differing philosophies and policies.AT&T and NCR have combined computer revenues ofan estimated $9 billion, and now represent the fifth-largest computer manufacturer in the US. (BusinessWeek, Jan. 20, 1992 n3248 p63)
Successful collaborations philosophy: Coming Irhas evolved into a creative, flexible organization thatknows how to make sure it gets its creations to market-- and quickly. Roger Ackermann. president and chiefoperating officer, was interviewed in Enterprise (1992October, pp 10-14)
Telecommunications is one of Coming's four m,.;ormarkets.
Ackermann says that joint ventures for him denotesome form of joint-equity ownership, not just in a legalsense. "What's unique about us is that we believe thatin a 50-50 venture one party can't control or dominatethe other. Rather, we expect it to be between equal par-ties."
Thirty percent of Coming's equity ventures fail. "It'suivally because of mismatched goals."The technologymust be commercially viable. "If the technology isn'tvery good, the business fails whether it's a joint ventureor not."
In these alliances, "you just need to stick to the funda-mentals -- you bring something to the party that is valu-able to the other person, who brings something that isvaluable to you. But you have to do your homeworkand pick your partners carefully."
"For a joint venture to work, both partners must have adifferential advantage that they are bringing to the ta-ble. You take it and leverage it all of the way to themarketplace as quickly as possible, before somebodyelse gets there with the same thing. You have to get tothe market faster and faster, the way the world is goingnow, so in a sense, it's a race."
In summary, telecommunications companies are ac-.ively seeking collaboration as a critical means of add-ing value to their customers. In the current exploding
7 3748
marketplace, the real competitive advantage is time;getting technology and new products to the marketplace first. Organizations in the industry know theycannot consistently do this alone.
Yet the success rate of joint ventures and other formsof collaboration is low. Precious time and huge sumsof money have been lost in ventures that have pro-duced nothing.
Our findings suggest a framework from which thetelecommunications and computer industries can viewcollaborative efforts, and apply criteria and support fac-tors that make the difference between success and fail-ure.
3. Conclusions from the study
In reviewing Digital's experience, and the experienceof its telecommunications customers as they search forcollaborative relationships, a number of key pointsemerge.
To be productive, collaborative formations need to beappropriate to the outcome desired. For example, ifjoint product creation is what two organizations want toform together, it is a mistake to dump two sets of de-sign engineers in a room and close the door. The teamsrequite "stage setting", and upfront support to workwell. In general, we find that expectations of partnersentering negotiations is high, but support (senior man-agement buy-in, time, resources) is relatively less expe-rienced. Management sees collaboration efforts hap..pening with great frequency and makes theassumptions that it is quite easy. In fact, the successrates for collaborative efforts is quite low; 1:4 or less.
The graph below demonstrates the relationship betweenthe two most critical elements to be considered whenassessing how to approach joint partnering: the com-plexity of the relationship, and the level of sunnort re-quired. We will then discuss each element in terms of acontinuum, offering examples of differing approachesthat produce successful outcomes.
MaximumSupportRequired
MinimumSupportRequired
THE RELATIONSHIP BETWEENCOMPLEXITY AND SUPPORT
Low complexityof relationship
High complexity
749
4. Barriers to collaboration -- understanding whatthey are, and breaking them down.
Our findings suggest that organizations have researchedthe many different types of collaborative an -ngementsavailable to them, and through their own experience un-derstand the value and problems inherent in "jointness."What they consistently underestimate is the type andamount of support required for successful outcomes.There are several reasons for this, all of which arefirmly embedded in the fiber of most organizations.
1. Organizations each develop a way of working inter-nally that requires adaptation if any form of partneringis to be effective.
2. Alliances require the ability to tap into multifacetedcorporate resources which are typically organized verti-cally in a "stove pipe" fashion. Establishing horizontalcapabilities for decision making and input is difficult atbest.
3. Remote geographies are often barriers rather thanconduits to communication, common goals and metrics.Yet, opportunities for alliances often appear first in ge-ographies.
4. Organizational metrics often do net a supportsystem-wide focus that would allow alliances to form.
5. Strategic plans are understood and valued by onlythose who created them, making them difficult to botharticulate and to act upon.
6. Organizations struggle to deliver one clear, consis-tent message from multilevels of the company, causingconfusion and mistrust in those inside and outside theorganization.
The formation of joint working relationships betweencompanies requires an organization to tackle its ownweaknesses internally. Those who are the greatestchampions for alliance development are often corporateentrepreneurs who may not have the necessary clout todrive internal changes. Joint efforts can thus easily bekilled off at the very start.
Our findings among Digital's telecommunications cus-tomers, as well as the extensive activity in alliance de-velopment among Sheppard Moscow's clients, suggesttwo umbrella strategies for successful partnership for-mations that help to overcome the inherent dilemmaslisted above.
1. New ventures need to create a "hybrid culture" at thepoint of convergence that sets them apart from the dayto day operations of both parent companies.
Hybrid
This creates a seedbed environment releasing the newformation from the encumbrances of the parents' or-ganizational problems, and helps to remove barriersthat will disable the effort. It also creates flexibilityand mobility impossible in the old structures.
2. The new formation needs to be placed above operat-ing or functional division control, into the arena wherethe "highest common benefit" for the corporation canbe realized. Coming Inc., a company with high successin developing joint ventures, has created a CorporateAlliance Program Office, directly attached to the presi-dent. This arrangement helps ensure cross-organizational commitment and follow through, align-ment of joint ventures with the organization's businessstrategy, and quick decision making. It also avoidswasted or duplicated efforts and resources.
With the above capabilities in place, we can now take acloser look at the elements of complexity and supportin evaluating how to approach various forms of col-laboration.
5. A Collaborative Approach Model
Complexity of Relationships: The Alliance Contin-uum Organizations engaged in partnership activityrecognize the hierarchies or continuum nature of theserelationships. Some companies offer guidelines to ven-dors as to what is expected of them at diffeimt pointsalong the continuum. Though each company ap-proaches this a bit differently, the graph below showsthe basic collaborative formations, moving from simpleto complex.
750
The Alliance Continuum
Levels of Complexity
High Complexity -- (High gain, high risk)
ConvergenceOrganizations
Partner/JointVenture
Contractual-1Alliances
Associationsand Consortia
Memoranda ofUnderstanding
InformationAlliance
PreferredVendor
V
Low Complexity
Temporary or permanentmulti-organizationalformationsEquity participationJoint Development
OEMSupplierJoint Selling Licensing
Standard SettingSOE
Marketing Alliances
Selling agreementsChannel Development
Selected small groupof highly trusted vendors
-- (Low risk, small gain)
Scanning the continuum, several things are evident:The majority of joint work is in the low complexity ,low risk category. The further corporations travel upthe continuum, the more demand there is to step out ofconventional thinking and practice. The top of the con-tinuum is unachievable without some form of creativetechnological and relationship leap.
The continuum represents different types of collabora-tion formations that telecommunications and computerscompanies currently engage in.
1. They begin with simple but meaningful relationshipsof preferred vendor status. This represents the industryshift mentioned by telecommunications customers ear-lier regarding their intent to reduce key vendors to 3-5.The relationship developed at this level sets the stagefor more complex collaboration and companies oftenturn to key vendors (and vice versa) as potential part-ners. This collaboration represents small risk on every-
one's part, and roles and expectations are usually ex-plicit.
2. Informal alliances are often developed as a means oftesting more formal relationships. They involve agree-ments to serve markets jointly, ''shadow" or consultduring bidding processes, share information on distri-bution channels, etc.
3. Memoranda of under are used to solidify in-formal agreements, but also begin to imply commit-ment to a specific relationship and outcome.
4. Consortia and Associations have increased in impor-tance as a means of "leveling the field" for standards,operating platforms, and other components of the Stan-dard Operating Environment. Corporatio is interact andintegrate with others in an increasinzt; sophisticatedmanner, and work hard to influence SOS's in their fa-vor. These associations are also used to build relation-ships between organizations that can turn into more for-mal collaborations.
5. Contract alliances, long familiar to companies in theform of OEM's and licensing arrangements, now arebecoming springboards for even more complex rela-tionships. Alliances are high in risk and gain for every-one. They require a lot of attention and forethought,and those that work well and worth their weight ingold.
6. Partnerships and Joint Ventures involving equityparticipation and joint developments are where some ofthe greatest gains in collaboration are taking place.Companies work hard to select partners, usually fromthe pool of relationships already in place on this contin-uum. Risk and potential gain are very high, and for theventures pursuing creative technological outcomes, asignificant "leap" must occur that allows the partners tothink, act, and deliver as one unit.
7. Convergent Organizations, defined as temporary orpermanent multi-organizational formations, are beingcreated to a) serve market needs unmet by any onecompany or b) create new products and technologies re-quiring convergence of one or more industries. Theserelationships because of multiplicity cross-cultural na-ture, wide geographical global span, and technologicalconvergence present a challenge unknown to virtuallyall organizations. Yet, the pay-off for the industry andsociety at large has fantastic potential. These organiza-tions require a massive leap of technological and rela-tionship faith; as it is impossible to say at the start whatmight emerge. They are created for both specific out-comes and unknown advancements in technology thatsolve heretofore unsolved problems.
751
We found that while all organizations in this study un-derstood the necessity and critical nature of providingsupport for partnerships, few were successful in pullingtogether and maintaining support structure long enoughto achieve desired outcomes.
Unlike the continuum of complexity, where organiza-tions can enter agreement along the continuum with noprevious relationship, support must be perceived as ad-ditive.
As complexity of relationships increase, ever increasingand expanding support is required. If at any time sup-port is diminished or perceived to be withdrawn, thejoint effort will be at risk. So for example, while dedi-cated and consistent staff are required to form contrac-tual alliances, they become critical for joint develop-ment.
In viewing the Support Required Graph that follows, itis important to keep in mind thai the higher the level ofsupport required, the higher the number and frequencyof critical support factors needed to ensure a successfuloutcome.
Maximum Support Levels
8.
7.
6.
5.
4.
3.
2.
1.
Relationship Management
Corporate Services:Finance, Legal, Process Consulting
Hybrid Creations
High level commitmentChampions, Corp. Sponsorshipat CEO and Board level
Corporate Allioance ProgramOffice for Decision Making
Collaborative Mindset
Process of Teaming
Mutually Beneficial Outcomes
BaseLineSupport
Organization CommitmentTime, Resources, Probing Sessions
Clearly defined and articulatedbusiness strategy understood byall players
Minimal Support Levels Required
CritcalSupponFactors
Support Levels: The Basics Clearly defined businessstrategies, organizational commitment and mutual out-comes are three factors which are critical to all collabo-rative formations. Without these at appropriate levels,all attempts at collaboration seem to flounder, searchfor meaning, and ultimately fizzle1. Each player must have a clear understanding of howtheir activities adds value to their own organizationsbusiness goals, and what the other player (s) goals andneeds are. This requires time, interest, and a lot ofshared understanding of what each other needs to makecollaboration worthwhile. In addition, parties musthave some level of commitment from their organiza-tions to evidence interest such as time, resources andmeetings that permit 'probing' of needs, expectationsand desired outcomes. The third 'basic' is for parties tohave an idea or concrete expectation of mutual benefit.If one party benefits and the other does not, no furthercollaboration is likely to happen.
2. As parties join to probe and investigate areas for col-laboration, they need to ensure that sufficient time isprovided, the right players are present, and the most im-portant matters are discussed. This process needs toreflect a climate of genuine interest and openness,mindful of the fact that both parties come from differ-ent environments, and are usually regarded for differentthings. The amount of process focus ranges from mini-mal to highly structured, depending on the complexityinvolved.
3. As opposed to negotiation or "deal-making" collabo-ration requires a mindset that genuinely values and be-lieves in what the other parties offer. A "not invented"culture can dampen and fizzle efforts and players arenot likely to try again.
4. Corporate Alliance Program Offices which are runfrom CEO or board level provide an excellent screeningand commitment mechanism to block unwanted or du-plicated efforts and to ensure the nurturing and internalcross-functional commitments necessary for success.
5. High -itvel commitments are required for any jointeffort to reach an investment or equity stage, and cham-pions who personally believe in the efficacy of a ven-ture will greatly increase the success rate. Dedicatedteams become increasingly important as complexity in-creases.
6. We discussed earlier the necessity and value of cre-ating a "hybrid" formation to separate the new venturesfrom the encumbrances of the old. These can takemany shapes - separate offices mutual co-locations,joint metrics, public goals and measurements, etc. The
"hybrid" can be simple or complex, matching the needof the collaboration.
7. Corning Inc. provides only three services to theirnew ventures; finance, legal and process consulting.these services should be provided out of a high levelAlliance Program Office, and be sufficient to launchand maintain new ventures.
8. Relationship Management is what replaces structure,hierarchy, rules and regulations in collaborative com-plex relationships. It ensures a stable and mutuallybeneficial relationship that can respond flexibly tochanging goals, market requirements and technology.It is what remains after one venture has succeeded in itsgoals, allowing many more to follow. It is also whatenables the creative techno-leaps to take place, neces-sary to convergent organizations and creative joint ven-tures.
Final Summary
Hi
S
U
P0RT
Lo
COLLABORATIVE FORMATIONS
COMPLEXITYHi
Support is adapted modified and increased as relation-ships become more or less complex. It is offered con-sistently over time, not once and then withdrawn. It isnegotiated among players, management andstakeholders on an ongoing basis and must be seen asan essential cost of investment, not a remedial resource.
Coming and numerous other companies have raisedcollaborative success rates dramatically by keeping theafore mentioned support structures in place. In the con-vergence of multiple industries trying to add value toworldwide telecommunications networks and services,the payoff of success is enormous for us all.
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Converging Telecommunications Technologies: Challenges FacingGovernment and Regulators in Australia and New Zealand
Richard A. JosephInformation Technology and Communication UnitFaculty of Informatics, University of Wollongong
Wollongong, 2522, Australia
1. ABSTRACT
Converging technologies in telecommunications, computing and broadcasting are creatingchallenges as well as opportunities for governments and regulatory agencies. This paperreviews different meanings of the term 'convergence' and considers the relevance of thesemeanings to policy and regulatory issues. From this perspective, policy developments asthey relate to 'convergence' in Australia and New Zealand are discussed. Comment ismade on various issues arising from the different regulatory approaches adopted in thetwo countries.
2. CONVERGENCE AND POLITICS INTHE INFORMATION INDUSTRY
2.1 Convergence
Technological change, historically, has been attributed toplay an enabling role in the shaping of new political,economic and social relationships. This enabling role ismost evident today in lthel broadly defined informationindustry whose primary sectors - telecommunications,computing. broadcasting and publishing are becomingmore integrated at the level of technology but morecompetitive at the market level'(I).
The information industry is at the leading-edge ofinternational competition with revenues in worldtelecommunications services alone estimated to be as highas US $1200 billion by 2()05 (2). Information andcommunication technologies are now well established asbeing central to economic competitiveness and industrialrestructuring (3).
The magnitude and importance of the transformation in theglobal information industry has meant that theinterpretation of these changes becomes very difficult.One concept which has been around for many years is thatof 'convergence'. which is often interpreted to reflect thecentral, if not deterministic. role played by technology inindustrial restructuring. However, no one definition of'convergence' exists despite many attempts to label theconcept in particular ways or give it particular attributes. Itwould seem as though the term has a function not toodissimilar from 'high technology', a popular term inpolitical debate throughout the 1980s. Macdonald'sobservation that 'high technology would lose most of itspuliucai impoitance if it ever were neatly labelled and
differentiated from other economic activity appliesIs ) to 'convergence'( -li. This point becomes clear if
sot to examples of definitions of 'convergence' arecoiisidered.
A recent Organisation tor 1'A:0110'11k Cooperation andI )evelopment (01:.CD) discussion paper notes that'convergence, as a general concept, may be defined as thetechnical process whereby technologies or productionfunctions that are a priori separate begin tomerge...Whereas the marriage betweentelecommunications am! computer technology no%1/4 seetnsto lase lice n cnsu .11.:d. the co is ergence bet5,een
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telecommunications and broadcasting is still in theplanning stage'(5). It is argued that evidence of thistransition is the emergence of hybrid services (which maybe supplied either through broadcasting ortelecommunications networks), services which use amixture of broadcasting and telecommunications (e.g.mobile phone communications) and progress ininfrastructure development (e.g. interactive services anddata transmission on telecommunications networks). Thetechnologies of digitisation, fibre optics and mobilecommunications are seen as enabling these changes tocome about. The focus in this case is on new technologybringing abeat the historical evolution of the informationindustry culminating in a convergence betweenbroadcasting and telecommunications.
In contrast to the above, another OECD discussion paperhas identified three levels at which convergence ofdifferent sectors of the information industry can beunderstood: networks, service provision and corporateorganisation (6). At the network level, convergence isseen to imply the sharing of resources such as switches,the competition for finite resources such as frequencyspectrum and geo-stationary orbits, and the integration ofnetworks as well as network providers. At the serviceprovision level. convergence is used to describe hybridservices such as datacasting or video-conferencing as wellas the use of existing services in new ways (e.g. junk faxand audiotex). Finally, corporate organisation can refer tothe cross-ownership of services and facilities inbroadcasting and telecommunications by the one companyor the dual manufacture of equipment for both thecommunications and the consumer electronic industries.This interpretation of 'convergence' is somewhat broaderas it emphasises the economic, political and organisationalaspects of change.
The definitional uacertaity in 'convergence' ishighlighted by other commentators. Free, for example,notes that while convergence is a significant phenomenon,'less attention has been given to other substantive trendswhich might be reasonably Jescribed as divergence' (7).He points to the increasing multiplicity of options for thedeliver), of television programs through technologies suchas video tapes, direct broadcast satellite (DBS), and
vlitpoint distribution services (MDS) as examples ofdivergence'. Leonard takes a different perspective byemphasising applications and use of technology. Hear:utes that 'although this (the blurring of divisionsbetween telecommunications, broadcasting and
radiocommunications] is usually referred to astechnological convergence, the process is better describedas applications convergence, since it is the use oftechnologies which is now overlapping...'(8).
No one definition of 'convergence' exists and m I e term hasnumerous meanings. While the phenomenon of rapiiitechnological and economic change in the informationindustry cannot be denied, the potential exists for the term'convergence to obscure many of the fundamental issuesat stake here. 'High technology' and 'convergence', aspolitical terms, have that potential (9). What then are someof the fundamental political issues associated with'convergence'?
2.2 Policy and Regulatory Issues Relating toConvergence
The state has a fundamental role in maintaining nationalsecurity, ensuring that the appropriate conditions are setfor capital accumulation, and also maintaining a degree ofsocial order by legitimating its actions. The technologicaland economic restructuring currently underway in theinformation industry is forging new relationships betweenthe state and industry. Old institutions, which had evolvedto accommodate a particular set of conditions for capitalaccumulation are now being reformed. Newcommunication and information technologies are providingincreasingly more opportunities for the exploitation ofinformation as a commodity and for the successfulmonitoring and measuring of existing economic activities(10). New technology is also enabling business toreorganise and globalise its activities. A number ofsignificant changes in the information industry can belinked to 'convergence'.
First, the traditional control of a state monopoly Post,Telegraph and Telecommunications (PTT) provider hascome under threat since the 1960s as business soughtgreater economic flexibility in the provision of newservices and cost-cutting. The response of the state inmany countries has been to liberalise regulations intelecommunications and to privatise the network.Reorganisation was seen as necessary for 'converging'technological opportunities to be exploited and economicgrowth assured. Since competition was considered to bethe best way of encouraging technological innovation,there is now considerable debate on the way thatcompetition is organised and who benefits from it. Theentry of broadcasting into the picture represents anextension of areas where economic exploitation ofinformation can be achieved and this is often explained by'convergence'. The scale and scope of these economicopportunities are often so large that no one firm orgovernment is able to fully exploit them. Globalisationand international alliances are becoming important factorsfor the state to deal with as it aims to maintain a degree ofautonomy. As a result, questions of program diversityand ownership (as well as investment) take on even greatersignificance. The issue of indigenous industrydevelopment is another area of importance to the state.For example, multinational companies without anynational loyalties in program production and delivery canundermine the cultural basis for political cohesiveness.The 'convergence' of company ownership in broadcastingand telecommunications can threaten the viability ofnational systems of innovation.
Second, the growth of information as a central resource inthe economy also creates various social and wealthdistribution problems. For example, the ownership ofintellectual property takes on a special significance a'
754
ni101 Illation is turned into a commodity. The state has to;eg:-.late in the area of intellectual property to an ever
acing extent to protect the rights of investors. Thedistribution and control of information is another areasklie..e state regulation is required. specifically in privacy.In an environment v, here competition is seen as the best
v of organising markets, the prospect of informationrich and information poor consumers becomes a reality.Debates about the value of a publicly-owned broadcastingservice are now becoming more pronounced in manycountries (11). The social costs of massive change totelecommunications networks are also acknowledged bygovernments through regulation aimed at social andeconomic conditions (e.g. the provision of universaltelephone service).
One of the fundamental issues facing the state in thecurrent environment of change is the organisation andlegitimation of who benefits from technological change.In the information industry, this translates into policies andregulations which determine who can do what by means ofwhat infrastructure. Regulation has to deal withlegitimation as well as the allocation of scarce resourcesand how competition for these resources are organised(12).
From the above perspective on definitions and politics.'convergence' is therefore closely connected with debateson the way markets, competition and regulations areorganised in the information industry (13). This paperaims to explore some of the regulatory and political issuesfacing governments and regulators in Australia and NCV.Zealand as they try to deal with 'convergence'. The focuswill be on the telecommunications (includingradiocommunications) and broadcasting sectors wheremost attention is currently focussed. However, it shouldbe emphasised that change is also now actively underwayin publishing, which also involves advertising. The'convergence' between computing and telecommunication,has been taking place for some time now.
3. AUSTRALIA
3.1 Recent Policy Changes in Australia
Changes made to Australian Government policies intelecommunications, broadcasting andradiocommunications have reflected a trend towardsliberalisation and competition. The approach in all threeareas has been 'to look to regulatory instruments that are,as far as possible: technologically neutral; which allow andindeed facilitate commercially viable innovation; and whichdo not require an intrusive role by government (14). Themajor acts of parliament affecting communications policyare the Telecommunications Act 1991 which regulatestelecommunications networks operated by the carriers andservices supplied over those networks: the BroadcastingServices Act 1992 which regulates the supply of radio ortelevision programs and the Radiocomnumications Act1983 which regulates the use of the radio frequencyspectrum. New radiocommunication,, legislation v, asintroduced into the Australian prliament as recently asNovember 1992 (15). The Cioverliment has recentlysignalled its intention to set up a Spectrum ManagementAgency (SMA) to manage the sale of pans of theradiocommunications spectrum (16).
In telecommunications limited competition was introducedinto certain pans of the market in 1988 and an industryregulator, the Australian Telecommunications Authority
STF1.1 was established. Under the1 t h cmununt«ItionA Act 1991. further changes were made
to industry structure and network competition in the formof a duopoly. The publicly-owned Australian andOverseas Telecommunications Corporation (AUTC). themonopoly provider of basic services until 1991, nowcompetes with Optus Communications (partly owned byBellSouth and Cable and Wireless). Optus purchased thedebt-laden AUSSAT satellite from the Government in1991.
In broadcasting, the Broadcasting Services Act 1992 cameinto force in October 1992. The focus here is on a'technologically neutral' definition of broadcasting servicewhere a range of specified sers ices can be delivered by avariety of means. The degree of regulation for the sixbroadcasting services in the Act depends on the 'degree ofinfluence' the services have in the community. The sixbroadcasting services listed in the Act are: nationalbroadcasting services: commercial broadcasting services:community broadcasting services; subscriptionbroadcasting services: subscription narrowcastingservices: and open narrowcasting services. The newly-created Australian Broadcasting Authority (ABA) monitorsthe licence conditions of broadcasting service suppliers, acontent related matter (17). As part of broadcastingreform, the Government legislated for the introduction ofPay TV in October 1992. Specific provision has beenmade for three Optus satellite-based licences for Pay TVusing digital compression technology.
In radiocommunications, new legislation has only recentlybeen introduced into parliament. The Government's aim isto introduce a market-based system of spectrummanagement into selected areas of the spectrum andestablish a specialist spectrum management agency. TheRadioconununications Act and the TelecomnzunicationsAct are concerned with regulating the carriage ofbroadcasting services.
All the major Acts affecting communications areadministered by the Department of Transport andCommunications (DOTAC) with relevant powers vested inthe Minister for Transport and Communications. TheDepartment of Industry, Technology and Commerce(DITAC) has responsibility for monitoring industrydevelopment aspects of telecommunications.
3.2 Issues Facing Government in Australia
The rapid introduction of change to Australia'scommunication policies has inevitably meant thatimplementation has taken precedence over long-termissues. There have been numerous government reports oncommunications but 'there are no official statementssuggesting that fostering the convergence oftelecommunications and broadcasting is an explicit goal ofgosernment communications policy' (18). What reportshave been undertaken could not really be described ascomprehensive technology assessment studies. Fromrecent debate in Australia. a number of long-term issuescan be identified.
First, the implementation of communications policywears to he taking place without sufficient attention tothe changing role of information in the Australian economyor to inlOrmation policy development. A recentparliamentary report noted that long -term informationissues and policy, which includes telecommunications andmedia, are not on the Government's or bureaucracy's
ional agenda. The Australian situation is characterisedbs a lack of co.ordination, fragmentation andcomprehension of issues relating to ifflormation poi ic(191. The report points out that 'policies seem to be
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developed on the run, in response to a crisis. No broadcommunications or information philosophy has beenworked out (20). Progress towards a nationalinformation policy or strategy may be slow but if Australiais to follow the lead of other countries, this area could welltake a higher profile on the political agenda in the future(21).
Second, the emphasis given to competition and the market-based approach in government policy could well comeunder closer scrutiny in the future. The assumption thatincreased competition in the communications sector willlead to improved economic performance is by no meanscertain (22). Some major issues still need to be resolved.For example, Australia may not be able to compete in allinternational markets with the same services as thoseoffered by other developed countries. In addition, thesimple restructuring of domestic communications marketsmay not be enough to contribute to innovation andindustry development. National systems of innovationhave to be considered and the linkages between particularsectors are important (23). Australian policy does notalways recognise this complexity. Australia is movingaway from an active role for the state intelecommunications but the likelihood of a single, unifiednational broadband network could raise planning issues inthe future (24). In the same way, redefinitions of theconcept of universal service could hinder the diffusion ofnew technologies to the home and hence retard the demandfor information.
3.3 Issues Facing Regulatory Bodies in Australia
Apart form the broad issues raised above, there are manyof a more specific nature facing the major regulatoryagencies, in particular AUSTEL and the ABA.
First, despite the recent legislative reforms, there isincreasing pressure for radical change to the wholesystem. For example, Free argues that an 'all- embracingCommunications Act is the only way to readily providesensible regulation for existing and future services as theyevolve' (25). The Evatt Foundation has called for theestablishment of an Australian Broadcasting andTelecommunications Authority which would have thepower to deal with the overlap betweentelecommunications and broadcasting (26). There has alsobeen discussion of a US-style Federal CommunicationsCommission (FCC) as a possible regulatory frameworkfor Australia (27). However, the Minister for Transportand Communications and DOTAC essentially have hisrole now (28). There seems every likelihood that thepresent regulatory structures are far from settled and still ina process of active change.
Second, numerous regulatory gaps between theTelecommunications Act and the Broadcasting ServicesAct will require ongoing attention and will certainlyprovide considerable opportunities for the legalprofession. Apart from the obvious problem of defining aservice under the Broadcasting Services Act, theconsequences of a service falling outside the Act will meanthat the content remains essentially unregulated. TheTelecommunications Act does not regulate content. Ashigher-level telecommunications services will increasinglyinvolve greater levels of information and entertainmentservices, the issue of content regulation oftelecommunications services could become a problem(29). There has already been considerable community..on,orn about offensive material on the '0055' service inAustralia which is a non-broadcasting telecommunicationsservice (30). Another issue which cuts across
t-)'
telecommunications and broadcasting is the prospect oftelecommunications carriers becoming integrated into thesupply of video services (31). Access to a carrier'snetwork could well become an area of anti-competitiveactivity and this would require legislation. AOTC isalready involved in supplying video and news services tohotels in Sydney through its Laser Cast service (32).
The introduction of Pay TV into Australia will also bringregulatory problems. Despite a 'technologically-neutral'approach in the Broadcasting Services Act, an internationalstandard for the mandated digital compression technolouymay only be resolved by 1995 (33). While Australiancontent regulations apply to the satellite licences, MDS(multipoint distribution service) licence holders could be ina position to supply pay TV well before 1995. As theMDS service has no content or other forms of programregulation (as opposed to the satellite licences), thetraditional distinction between carriage and content isunder threat. Pay TV also raises the issue of theinvolvement of the Australian Broadcasting Corporation asa provider. Involvement in Pay TV is likely to put furtherstress on the Australian Broadcasting Corporation'sfinancial constraints in carrying out its public broadcastrole (34). The above points only touch the surface of themany regulatory gap issues that are likely to arise.
Finally, intellectual property is already seen as a verysignificant area as technologies converge. Leonard haspointed out that there is a need for more flexible copyrightlaws to take into account the fact that new technology hasmultiplied and extended the possible way a creator'scopyright may be utilised or exploited (35). For example,Lindsay notes that there is currently no copyrightprovision for cable television under the Copyright Act1968 (36). The issue of how far copyright protectionshould be extendee and whether it should covernarrowcasting and non-broadcasting telecommunicationsservices will need to be resolved (37).
4. NEW ZEALAND
4.1 Recent Policy Changes in New Zealand
Since 1987, New Zealand has radically changed the way itregulates its communications sector. There has been aconsistent emphasis on the market, c2-npetition and awithdrawal of government involvement in regulation.Ideological commitment to the free-market has been amajor guiding force for change in New Zealand togetherwith increasing national debt as a result of a deterioratingeconomy. New Zealand 'has shifted the locus ofregulation from specific agencies to the Ministry ofCommerce, where broadcasting, telecommunications andradiocommunications are not distinguishes': in policyterms, nor generally from other areas of commercialactivity' (38). For example, there are no lines of businessrestriction within telecommunications or betweentelecommunications and related activities such as cabletelevision. The Commerce Act 1986 is the key legislationand this deals with general competition law in NewZealand. The Commerce Act is enforced by anindependent statutory authority, the CommerceCommission. Within the Ministry of Commerce, theCommunications Division is responsible for polic ads iceto the Government.
The telecommunications sector has undergone progressivestages of corporatisation, deregulation and privatisationsince 1987. In 1987 the Telecom Corporation of Ne vZealand (Telecom NZ) was established as a State-Ow redEnterprise (SOE) following the abolition of the Nev.
'dank! Post ()MCC. From December 1957, progress'.!;iegulation of the sector occurred. culminating in thek slit:on of Tele.:om NZ's monopoly of the provision ofnetwork sers ices in April 1989. In September 1990Telecom NZ was privatised for NZ 54.25 billion. being,old to a consortium Ied by Ameritech, Bell Atlantic andthe Ness Zealand companies, Fity Richwhite I loldings Ltdand Freightways Holdings Ltd. In 1991, competition inthe provision of network services commenced with theentry of Clear Communications, a consortium comprisingBell Canada International. MCI International, TelevisionNew Zealand Ltd, Todd Corporation and New ZealandRail Ltd. Telecom NZ is rapidly diversifying Itsinformation activities with a plan to trial cable teleision inthe Auckland area (39).
The Broadcasting Act 1989 introduced substantialderegulation to a previously heavily regulated sector.Competition was introduced into television and a market-based system for the allocation of the radio frequencyspectrum was established (40). The old regime of theBroadcasting Tribunal and the Broadcasting Corporationof New Zealand was converted into Radio New Zealandand Television New Zealand (TVNZ). TVNZ is now aState-Owned Enterprise. The emphasis in broadcastingreform has been on selfregulation although someregulatory responsibilities in the standards area reside withthe Broadcasting Standards Authority. Foreign-ownershiprestrictions were removed in broadcasting (hiring 199(1.
Reforms to spectrum management have led to competitionin the mobile telephone market with Telecom NZ andBellSouth obtaining licences. Also resulting fromderegulation was the entry into the market of Sky TV, apay TV service that came out of the auctioning of UHFfrequencies in early 1990 (41). Sky TV's shareholdersinclude Ameritech and Bell Atlantic (major owners ofTelecom NZ), TVNZ and Todd Corporation. TVNZ alsohas a wholly-owned subsidiary BroadcastCommunications Ltd (BCL) which has a business role ofproviding a major interface between broadcasting and thetelecommunications industry (42). TVNZ is rapidlypositioning and diversifying its activities so that it canbecome a 'commercially successful electronic tele-communications business' (43).
Since no ownership restrictions exist, there is nowconsiderable cross-ownership in the New Zealandinformation industry. TVNZ which is still state-ownedhas a share in Sky TV (a possible alternativetelecommunications network), Clear Communications(Telecom NZ's competitor) as well as BCL. Telecom NZhas a share in Sky TV and Sky TV is linked to ClearCommunications through TVNZ.
4.2 Issues Facing Government and Regulators in NewZealand
New Zealand is facing a number of issues as a result of itsextensive liberalisation program.
First, the retreat of the state from regulatory involvementhas inevitably focussed attention on the implementation ofcompetition and away from long-term issues such asinformation, industry and communications policy.Maharey, Opposition Spokesperson on Communication.has claimed that long-term issues are not being dealt withby the New Zealand Government and there is a need to'ask how the market can he better organised so as toensure competition and a rapid movement toward aninformation society....(44 ). As in Australia. this issue islikely to grow in importance.
756 ti
Second, the social costs of rapid change in New Zealandstill has to be counted. For example, Telecom NZ's staffnumbers fell from 25,00 in 1987 to 14,500 in 1991 andwith tariff rebalancing, residential telephone rentals haveincreased by 56 per cent since 1987 (45). It is likely thatthe legitimation of competition in New Zealand will be anongoing matter for legal and political debate. This mayrequire active intervention by the state in the future.
Third, the complex nature of cross ownership that hasevolved together with continuing national debt problemsare likely to put the Government under pressure toprivatise TVNZ. A contradiction exists in that throughTVNZ, the Government has a share in Sky TV and ClearCommunications. The fact that the Government has ashare in Clear Communications when it is trying topromote competition in the telecommunications marketwith Telecom NZ would suggest some inconsistency.However, in selling TVNZ, the Government would notonly be selling the national broadcaster but also disposingof an alternative telecommunications network.
Fourth, the deree.alated environment places considerablepressure on the Government to provide adequateopportunities for the exploitation of new technologies bythe private sector. However, this 'technology push' raisesthe question of the potential demand for information andinformation services. A recent consultancy reportcompleted for the Department of the Prime Minister andCabinet which highlighted the opportunities of'converging technologies recommended that fundingmechanisms of education in all sectors should be reviewedto ensure that distance and open learning providers are ableto gain access to appropriate technology (46). In order topay for the use of these converging technologies ineducation the report notes that the 'fee in tertiary educationshould also be reviewed at the institutional level to ensurethat it does not impede the use of cost effective deliverymechanisms' (47). The shifting of the burden of cost ontothe consumer (i.e. students) in an already strainedeconomic environment for educational institutionsindicates the extent to which technology is being placedwell ahead of legitimate social or educational concerns.The Government's decision in June 1992 to establish aWorld Telecommunications Laboratory with funding ofNZ $80,(X)0 to promote commercial initiatives for abroadband public communications network also indicatesthat demand considerations may be secondary (48). Thesetrends tend to confirm the suggestion that big US buyershave stated that the size of our I New Zealand's] marketmakes us an ideal testing ground for new technologies'(49). While overseas control of the i:ew Zealandeconomy has a long history, converging' technologiesprovide an increasingly intruske fon» ()I' control. This isan issue w filch is only slowly manifesting itself in NewZealand.
Finally, the lack of an industry specific regulator in NewZealand does not mean that regulatory problems do notexist. In the deregulated environment, Telecom NZ hasexercised its market power to take legal action to protect itsposition. As a result, drawn out legal battles have retardedthe introduction of competition in a number of areas,including mobile communications (50). Concern overThlecom NZ's role in competition has resulted in anongoing dispute between the Conimerce Commission andTelecom Ni. (51).
757
. COMMENTS ON AUSTRALIAN ANDNEW ZEALAND EXPERIENCE
Both countries can learn much from their attempts to dealwith 'converging' technologies.
A preoccupation with organising for competition in theinformation industry can focus attention on theimplementation of mechanisms to create competition ratherthat on longer-term planning. In this regard, bothcountries could benefit from a better understanding of therole of infonnation in their economies and a more seriousattitude towards appropriate information policies.'Convergence' can play a useful role by focussingattention on technology assessment issues but could divertattention if used as a simple justification for liberalisation.A closer scrutiny of the concepts of 'competition' and'diversity' in communications policy-making is thereforeneeded.
New Zealand's strategy of liberalisation and privatisationmay not be easily transferable to countries with morecomplex governmental and industry structures. Forexample, the sale of the radio frequency spectrum in NewZealand has shown that this can be done but the socialcosts have yet to be determined (52). As a result, theapproach adopted by Australia to establish a SpectrumManagement Agency to manage sale of parts of thespectrum could represent a workable compromise forsome countries.
The pace of change in New Zealand has been more rapidthan in Australia and it could be argued that New Zealandis now well placed to take advantage of 'converging'technologies. This may be partly true but the complexcross-ownership arrangements which exist in NewZealand and the size of the market can create its own set ofrroblems, especially for maintaining competition.Demand for services based on 'converging' technologiesmay be easier to establish in a more regulatedenvironment. The market has yet to determine the level ofdemand for these services (e.g. interactive education) inNew Zealand but the social costs of expensive businessfailures may well fall on the consumer. Direct social costsare already being borne through the rebalancing oftelecommunications tariffs and unemployment. The pointis that 'convergence' offers opportunities but that does notalways translate into economic growth or an equitabledistribution of wealth.
The traditional distinction between carriage and content isbecoming increasingly difficult to maintain. The range ofbusiness activities in which New Zealand's major playersarc involved is evidence of this. Attempts by Australianlegislators to maintain this distinction will come underincreasing pressure from industry in the future. A similarcomment can be made about 'technologically-neutral'legislation such as the Broadcasting Services Act inAustralia. It is fine in principle but the reality of themarket provides for unpredictable outcomes for policy(e.g. the possible delivery of Pay TV in Australia byMDS).
Finally, the reform process in New Zealana is likely togive added impetus to the reform agenda in Australia.Ownership patterns which have already evolved in NewZealand favour the prospect of international companiesusing New Zealand as a launching pad into the Australianmarket (53). The New Zealand and Australia Free TradeAgreement (NAM) is another vehicle for fosteringchange in Australia. Cross-ownership patterns betweenAustralia and New Zealand could well intensify with the
further liberalisation of the Australian market and the needfor greater market reach to meet the costs of newtech! o agy.
6. CONCLUSION
This paper has looked at the political meaning of'convergence' and applied that to current policy changes inAustralia and New Zealand. Both countries havedifferences in their regulatory approaches to'convergence'. The New Zealand experience confirmsthat a reliance on deregulation and competition does notnecessarily solve regulatory and policy problems. Theissue of linking technology to economic growth still needsto be resolved.
New Zealand's experience does provide Australia with aninsight into emerging patterns within the informationindustry encouraged by a largely unregulated environment.With a better understanding of these patterns, moreinformed policy-making may be possible.
Acknowledgements
I wish to thank the Telecom 4ustralia Fund for Social andPolicy Research in Telecommunications for financiallysupporting a research project, of which this paper is a part.I also wish to thank Graham Wagner, Keith Oliver, DavidLindsay and Peter Leonard for their assistance as well asmany others too numerous to mention who participated ininterviews and discussion. The AustralianTelecommunications Users Group (ATUG) and theTelecommunications Users Association of New Zealand(TUANZ) were also helpful in providing literature.
NOTES AND REFERENCES
1. U Mansfield and R A Joseph, 'Restructuring of theGlobal Information Industry and the Resulting Demandfor New Skills', in M D Lofstrom and D J Wedemeyer(eds.), Regional Interests and Global Issues: TheChallenge of Telecommunications Integration for thePacific, Proceedings of the Pacific TelecommunicationsCouncil Annual Conference, Hawaii, 12-15 January1992, Pacific Telecommunications Council, Hawaii.1992, pp. 615-621
2. Allen Consulting Group Pty Ltd, DevelopingTelecommunications Industry Strategies in Australia,report to the Department of Industry. Technology andCommerce (51 Allara St, Canberra, ACT, 2601), DITAC,Canberra, 1991, p. 13
3. US Department of Commerce, NationalTelecommunications and Information Administration,NTIA Telecom 2000. Charting the Course far a NewCentury, US Government Printing Office, Washington,USA, 1988, p.4
4. S Macdonald, Technology and the Tyranny of EtportControls: Whisper Who Dares, Macmillan, London.1990, p. 57
5. OECD, Committee for Information, Computer andCommunications Policy. Convergence BetweenTelecommunications and Broadcasting: Con:1)11111,o) at theLocal Level. DSTII1CCPITISP (90)13. OECD. Paris,1990. pp.8-9
6. OECD (Committee for Information. Computer andCommunications Policy). Convergence BetweenCommunications Technologies: A Policy ReviettDSTI/ICCP/CISP(90)6/REVI, OECD, Paris, 1991. p. 9
7. L Free. 'Convergence and Communications Policy'.in T Stevenson and J Lennie (eds.), Australia'sComnzunicatiotis Futures, Communication Centre.Queensland University of Technology, Brisbane, 1992,p. 101
8. P Leonard, 'New Communications Technologies andthe Music Industry', Entertainment Law Review. 2(3),1991, p. 73
9. R A Joseph, 'The politics of defining high technologyin Australia', Science and Public Policy, 15(5). 1988, pp.343-53
10. V Mosco, 'Une Drole de Guerre', Media StudiesJournal (The Freedom Forum Media Studies Center,Columbia University in the City of New York), Spring1992
11. See for example the November 1992 issue of MediaInformation Australia.12. C Offe, Disorganised Capitalism, Polity Press,Oxford, 1985, p.3(8)
13. N Garnham and G Mulgan, "Broadband and theBarriers to Convergence in the European Community',Telecommunications Policy, 15(3). pp. 182-194 cited inD Lindsay, When Cultures Collide: Regulating theConvergence of Telecommunications and Broadcasting.Centre for International Research on Communication andInformation Technologies (CIRCIT) Policy ResearchPaper No 29 (draft), CIRC1T, (Riverside Quay. 4 ByrneSt, South Melbourne, Vic.. 3205, Australia), 1992, p.40
14. A J Shaw. 'The Environment for New Services inTelecommunications and Broadcasting in Australia',Address to the IIR Conference, 'Telecommunications andInformation Industries', (HR Pty Ltd, 33 Berry St, NorthSydney, 2060), Sydney, 30 November - 1 December1992
15. Australia. Parliamentary Debates, Senate, 12November 1992, pp. 2841-2847
16. Department of Transport and Communications,Radiocomnzunications Spectrum Management Reform.DOTAC, Canberra. September 1992
17. D Lindsay, When Cultures Collide, op. cit., p.22
18. Lindsay, 0 p.cit.. p.31. It should be noted that theBureau of Transport and Communications Economics inDOTAC is currently preparing a report on convergence.
19. Australia. House of Representatives StandingCommittee for Long Tenn Strategies, Australia as anInformation Society: Grasping New Paradigm.Australian Government Publishing Service, Canberra,1991, p. xiv
20. ibid., 11. 1 3
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21. D Lamberton, 'Information Policy: A NationalImperative', in M Costa and M Easson reds), AustralianIndustry: Wat Policy?, Pluto Press, Leichhardt, NSW,1992, pp. 207-218
22. D Lindsay, op. cit., p. 39
23. U Hilpert, The State, Science and Techno-IndustrialInnovation', in U Hilpert (ed), State policies and techno-industrial innovation, Rout ledge, New York, 1991
24. V Mosco, 'Transforming Telecommunications:Political Economy and Public Policy', Paper prepared forthe Conference on Canadian Political Economy in the Eraof Free Trade, Carleton University, April 6-8, 1990,mimeo, Program in Mass Communication, CarletonUniversity, Ottawa, Canada, 1990, p. 25
25. L Free, op. cit., p. 104
26. Evatt Foundation, Telefutures: Who Foots the Bill?.Evan Foundation (750a George St, Sydney, 2000),Sydney, 19 I, p.7
27. M Armstrong, Implementing CommunicationsPolicy: Who Makes the Decisions and How, CIRCITPolicy Research Paper No 14, CIRCIT (4 RiversideQuay, South Melbourne, 3205), Melbourne, 1991, p. 23
28. ibid., p. 25
29. D Lindsay, 'The Broadcasting - Narrowcasting -Telecommunications Continuum: Regulating NewCommunications Services', Paper presented to "Workingwith the Broadcasting Services Act: a seminar on the NewLaw", Law School, University of Melbourne,Melbourne, 7-8 November 1992
30. ibid., p.4
31. ibid., p. 5
32. D Pitt, 'Pay TV Emerging Opportunities', Nddressto the IIR Conference, 'Telecommunications andInformation Industries, (IIR Pty Ltd, 33 Berry St, NorthSydney, 2060), Sydney, 30 November - 1December1992
33. Anon., 'More Services, More Headaches,Communications Update. ( Communications Law Centre.PO Box 1, Kensington, NSW, 2033), Issue 83,November 1992. pp. 1-2
34. J Craik and G Davis, 'Why Pay TV?: the ABC in the1990s', Media It:pit-motion Australia. No. 66, November1992, pp. 36-42
35. P Leonard, op. cis., p. 73
36. D Lindsay, ti /ten Cultures Collide, op. cit., p. 33
37. ibid., p. 34
38. II Wilson, 'New Zealand. Deregulation and theSpectrum, Media I njOnnation Australia, No. 62,November 1991, pp. 60-66
39. Anon. 'TCNZ to begin cable trials in Auckland',Communications Report. (1/515 Kent St. Sydney.20(H)). 5 (7). 2 November 1992, p. 7
BEST COPY AVAILIME 759
40. M Mueller, 'Reform of Spectrum Management:Lesson from New Zealand', Policy Insight, No 135,(Reason Foundation, Suite 400, 3415 S. SepulvedaBlvd., Los Angeles, CA 90034, USA, November 1991
41. H Wilson, op. cit. , p. 64
42. Television New Zealand Ltd, Annt d Report 1991,TVNZ, Auckland, 1991, pp. 21-22
43. Television New Zealand, 1991 Statement ofCorporate Intent, TVNZ, Auckland, 1991, p.1
44. S Maharey, ' Toward's the Information Society:Labour's Communication Policy', Paper presented to thePacific Telecommunications New Zealand Seminar,Auckland, 15-16 October 1992
45. H Donaldson, 'A Deregulationist/Free MarketApproach: New Zealand's Different Road to Reform',Paper presented to the IBC InternationalTelecommunications Law and Policy Conference,Sydney, 1992, (mimeo, Ministry of Commerce, NewZealand, Wellington, 1992), p.6
46. Consutel Telecommunications and IT Services, TheUse of Telecommunications Technologies for theEnhancement of Educational Services, Report toDepartment of the Prime Minister and Cabinet, Consultel,Wellington, 1992, p. 12
47. ibid., p. 109
48. New Zealand. Minister of Communications, 'WorldCommunications Laboratory to be established, PressRelease, Wellington, 18 June 1992
49. F Macdonald, 'Remote control', Listener and TVTimes, 20 May 1991, cited in H Wilson, op. cit., p. 62
50. H Donaldson, op. cit., p.6
51. New Zealand. Commerce Commission,Telecommunications Industry Inquiry Report, CommerceCommission, Wellington, June 1992
52. Communications Law Centre, Management of theRadio Frequency Spectrum, Submission by theCommunications Law Centre to the House ofRepresentatives Standing Committee on Transport,Communications and Infrastructure, CommunicationsLaw Centre (The White House, PO Box 1, Kensington,NSW, 2033), Sydney, January 1991
53. H Wilson, op. cit.. p. 66
Harnessing Convergence for Development:Industrial Policy and IT Development in Australia
John W. HoughtonCentre for International Research or. Communication
and Information Technologies (CIAC1T)Melbourne, Australia
Abstract
The convergence of computing and communications towards digital technology and the deregulation oftelecommunications are affecting a convergence of industry orientation and structures. Australia is set to exploit
the current comply and multi-faceted convergence of computing and communications in the pursuit of ITindustry development. This paper explores the conditions underlying this process. examines the mechanics and
details of its unfolding to date, and assess the likelihood of its success as an industrial development policy.
Introduction
For the purposes of examining the way in whichAustralia is attempting, more or less consciously.to harness the forces of convergence to further ITindustry development this paper will focus on justtwo aspects of the multi-faceted concept ofconvergence. Namely, the technological andstructural convergence of the computing andcommunications industries.
For many years telecommunications wasdependent on a relatively stable electro-mechanicaltechnology, but recently this has been replaced bya semiconductor technology base that has broughtthe industry close to the cutting-edge of scientificand technological development. Among the mostimportant aspects of this technological convergenceof communications and computing are thecommoditisation of hardware and an increasingdependence on software for product and servicedifferentiation and competitive advantage.
The deregulation of telecommunications markets isalso bringing profound changes. Not only arecarriers facing competition from other carriers andvalue-added network services suppliers, but theenterprises in the carriers' supplier chain are alsofacing new competitive forces. There is an openingglobal market for communications equipment andthe software that supports emerging networkservices. These changes are precipitating afundamental reformation of industry structure.
While communications carriers were organised asnational monopoly PTTs, their suppliers tended tobe domestically operating and oriented enterprises.The forces of change are now pushing carriers andtheir suppliers towards a global restructuring.Communications is evolving towards thetransnational type of globalise industry structurethat has been characteristic of the computerindustry for many years.
To further the development of the informationindustries it will be essential to keep these aspectsof convergence in mind, and to seek to exploit theemerging synergies that result from thetechnological and structural convergence ofcomputing and communications.
This paper will briefly examine the informationindustries in Australia in order to identify areas ofpotential synergy and to set the scene for a reviewof the IT industrial policy context in whichconvergence might be exploited.
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Australian IT Industry Capability andPerformance
The history of the computer hardware industry inAustralia could be said to be one of lostopportunity. From an early post World War IItechnical lead in computing (1) Australia quicklydrifted to a dependence on imported hardware. The(elative strength that Australia enjoys in computersoftware and services evolved. in part, out of ademand to customise solutions for the importedhardware base. It is only recently that computerhardware manufacturing, largely PersonalComputer (PC) assembly, has (re)emerged inAustralia.
The computer software and services industry, incontrast, has developed a relatively high level ofexpertise and a significant export competitivepresence (2). Areas of market strength exist inmining related software, insurance and otherservices related software and in a wide range ofcomputer services activities. It is the historicalstrength in customisation that still underpins theindustry. Hence the larger indigenous software andservices companies in Australia tend to be servicessuppliers, rather than specialist packaged softwaresuppliers.
In telecommunications the focus of Australiancarriers has historically been domestic, althoughover recent years they have increasingly becomeinvolved in export activities. The communicatinsequipment industry in Australia, through theimpact of implicit and explicit procurement policiesand the exacting demands of Telecom Australia,has developed a significant capability andpresence.
The IT industries in Australia are dominated by themajor transnationals operating wcrld-wide. Of theTop 20 IT companies (ranked by sales revenue) inAustralia in 1991 only 6 were indigenousenterprises. Of these. Telecom (rank 5) is thelargest and only communications sector companyrepresented. Exicom (rank 22) is the largest of theindigenous communications equipment companies.Computer Power (rank 7), Paxus (rank 10) andFerntree (rank equal 12) reflect the relativestrength of indigenous software and servicesenterprises, and Tech Pacific (rank 15), which wasformerly Imagineering, and the recently collapsedHi Soft (rank 19) are the indigenous players in thedistribution sector (3).
Table I.Australasian IT Top 20 by Sales, 1991 ($Am)
Company Sales
IBM 1460.0Alcatel 597.0Digital 482.2Ericsson 450.0Telecom 435.0Unisys 331.8Computer Power 312.0Siemens 250.6Fujitsu 250.0Paxus Corp. 240.4NCR (Aust) 240.0Ferntree 220.0Hewlett-Packard 220.0Apple 208.0Tech Pacific 200.0Xerox (Aust) 200.0Wang 195.0Bull HN 190.0Hi Soft 180.0ICL 158.6
Estimated.
Source: Today's Computers. 1992.
The recent economic recession has had asignificant impact on the IT industries in Australia.During 1991-92 they experienced a decliningmarket for the first time. The combined sales of theTop 50 IT companies in Australia and New Zealandfor 1991 was some 10% down on 1990. Sixty percent of the fall is attributable to the poorperformance of IBM alone (4). The othermultinational majors account for the bulk of theremaining decline.
While the multinationals continue to dominate.Australian companies are playing an increasingrole. The 13 indigenous companies in the 1991 ITTop 50 increased their share of Top 50 salesrevenues by 29%. from $A 1.4 billion to $A 1.8billion. over the previous year (5).
In software and services leading indigenous playersComputer Power and Paxus both managed amodest increase in revenue during 1991, mainly byconcentrating on export sales and big ticketcontracts (6). Other strong performances wererecorded by indigenous companies just outside theIT Top 20. such as BHP-IT, Andersen Consultingand Computer Sciences of Australia (CSA).
BHP-IT is among the industry's fastest growingcompanies with a sales revenue increase between1990 and 1991 of 163% from $A 41 million to $A108 million. Andersen Consulting, an Australianmanagement buy out of the IT consulting part ofthe Arthur Andersen business in Australia, hasincreased its sales revenue 20% from $A 100million to approximately $A 120 million over thesame period (7).
Telecommunication equipment sales are alsodominated by the major multinationals operating inthe industry globally. These include: Alcatel.Ericsson, Siemens. Fujitsu. NEC, Philips andNorthern Telecom (NorTel). Most have somemanufacturing presence in Australia (8).
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Alcatel has recently performed well. rasingAustralian sales revenue by 24% from $A 448million to $A 554 million between 1990 and 1991.Alcatel has recently completed construction of newfactory facilities for the production of digitalexchanges, it has been heavily involved in supplyfor the construction of the Tasman 2 submarinefibre link between Australia and New Zealand, andis now gearing up production for the PacRim Eastfibre cable's southern link (9). Ericsson alsoremains strong, although suffering a decline inrevenues during 1991.
The recession has had greater effect onmanufacturers targeting the customer premisesequipment (CPE) end of the market, with reversalsfor GPT (GEC Plessey Telecommunications). NECand Fujitsu. All have suffered declining salesrevenues since 1990.
GPT has been shedding staff from manufacturingand R&D activities. The PABX and Small BusinessSystems subsidiary arm of NEC is also sufferingcuts, while the Fujitsu-Telecom joint venture.Information Switching Technologies, hasabandoned its R&D activities, which were aimed atthe development of peripheral equipment for PABXinstallations (10).
The indigenous companies have also felt the effectsof the recession, with sales revenue falls during1991. CPE manufacturer Exicom has recentlydeclared losses equivalent to more than 10% ofsales revenue. Scitec Communications has seen itsexport revenue halved. and Datacraft reports aweak Asian market, but is still managing to expandslowly.
Trade Performance
One key indicator of the competitiveness of anindustry, the success of export promotion policiesand locational incentives in the globalisingeconomy, is trade performance.
Over the decade from 1980-81 to 1990-91 thecomputer hardware import/export ratio began todecline in the mid-1980s. Exports/imports per centhas increased from 7.5 in 1980-81 to 19 in 1990-91. Nevertheless, the hardware trade deficitcontinued to increase in dollar terms until thecurrent recession. The annual hardware tradedeficit is now approximately $A 2.4 billion.
Table 2.Computing Equipment Imports and Exports,1980-81 to 1990-91 ($Am)
Year Exports Imports
1980-81 35.47 474.81981-82 55.02 517.41982-83 65.24 618.01983-84 87.28 871.01984-85 130.8 13321985-86 184.6 17811986-87 351.3 21691987-88 381.8 22321988-89 365.7 28601989-90 499.0 30921990-91 574.6 2980
Source: The Australian Bureau of Statistics.
There are enormous difficulties of categorisationand definition involved in developing computersoftware and services trade figures. So much sothat the exercise is of limited value. In so far as onecan make anything of the statistics it seems thatsoftware and services exports have grown stronglysince the mid-1980s. Federal government figuressuggest an increase in exports from around $A 20million to more than $A 400 million 1991-92.
Table 3.Computer Software Imports and Exports,1980-81 to 1991-92 ($Am)
Year Exports Imports t-
1980-811981-821982-83
5.58.3
11.81983-84 10.6* 17.41984-85 23.2* 57.21985-86 47.6 92.11986-87 101.3* 128.21987-88 180# 133.91988-89 225# 170.21989-90 266# 239.71990-91 340# 256.41991-92 450# 309.8
Department of Industry Technology andCommerce.# The Australian Trade Commission.+ The Australian Bureau of Statistics.
Telecommunications equipment exports rose from$A 31 million in 1980-81 to $A 216 million in1990-91: an increase of some 700% over thedecade (11). While the increase in exports has beenimpressive, imports have also grown rapidly.Imports rose from $A 111 million in 1980-81 tojust over $A 600 million in 1991-92. Even thoughthere has been a very considerable deficit intelecommunications equipment trade over the lastdecade, some comfort can be taken from the trendimport/export ratio. Exports/imports per cent hasincreased from 18 in 1981-82 to 44 in 1990-91.
Table 4.Telecommunication Equipment Imports &Exports. 1980-81 to 1991-92 ($Am)
Year Exports Imports
1980-81 31.39 111.01981-82 31.37 175.91982-83 62.92 194.31983-84 39.44 211.01984-85 46.34 324.01985-86 53.95 426.61986-87 56.95 496.11987-88 66.86 484.71988-89 89.63 528.51989-90 153.5 602.21990-91 216.3 489.81991-92 198.4 604.3
Source: The Australian Bureau of Statistics.
The recent trade performance of AustralianInformation Industries Association (AIIA) membersis indicative of the health of the IT industries inAustralia. Both exports as a percentage of revenueand exports as a percentage of imports haveincreased steadily since the mid-1980s (12).
Table 5.AIIA Member Company Performance Indicators
Year Exports as a Exports/imports% of Revenue per cent
1986 1.1 7.61990 2.9 18.91991 4.5 29.31992 6.2 52.8
Source: The Australian Information IndustriesAssociation. 1992.
In 1987-88 Australia had an IT current accountdeficit of more than $A 4 billion when the marketwas worth around $A 8.5 billion. In the last year,with the national market now worth around $A11.5 billion, Australia's current account deficit hasfallen to $A 3.5 billion (13). One can hardly becomplacent about such a level of importpenetration, and one must also consider the effectsof the recession on these figures. but overall theAustralian IT industry shows some encouragingsigns of competitiveness.
The Industrial Policy Context
Industrial policy in the OECD countries over recentyears has been shaped as a response to a commonset of economic challenges and pressures (14). Thefundamental policy shift since the late 1970s hasbeen away from defending mature industries.towards promoting newer, more promisingindustries. Notwithstanding a much more freemarket approach in English speaking than in non-English speaking countries, most OECD countriesare now focusing on removing impediments tocompetitiveness, shifting from a defended to acompetitive environment, regulatory reform andmicro-economic reform aimed at reducingenterprise costs (15).
Much greater attention is being paid to innovationas a determining influence on competitiveadvantage. Indeed R&D is a target of incentives inmost OECD countries. Virtually all OECD countrieshave identified IT, biotechnology and new materialsas key enabling technologies worthy of specialsupport in the pre-competitive research andcommercialisation stages (16). Greater focus is alsobeing placed on investment in human capital: oneducation, training and life long skills formation.
The switch to "competitiveness" policies has beenprovoked, in part, by an observed change in thtcorrelates of investment and employment.Enterprise size and industry sector are no longerindicators of a firm's ability to invest, and therebycreate employment and growth. In the context ofthe evolving capital market the critical factorgoverning the rate on investment is now theperformance and profitability of enterprises in theirown markets, irrespective of size( I 7).
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In Australia the Information Industries Strategy(IIS) is the major policy program that coverscomputer and communications hardware, softwareand services production. It aims to promoteinternational links and opportunities through thereduction of protection and regulation; to developintegrated export strategies. and internationalalliances in R&D and marketing; to promoteproduct development through incentives,innovation and international agreements; and tocreate competitive advantage through investmentin resources and generic technologies (18).
A central element of this strategy has been thePartnerships for Development Program (ND). Underthe program transnational corporations (TNCs)enter into agreements with the governmentregarding their levels of R&D and exports inexchange for a commitment from governments tocontinue the development of industryinfrastructure, especially skills, and exemptionfrom obligations under the civil offsets program.The aim is to encourage the transnationals toexpand their long term operations in Australia (19).
All companies with government IT sales exceeding$A 40 million annually are required to participate.Suppliers with government sales between $A 10million and $A 40 million per annum are requiredto enter Fixed Term Agreements, which involvespending 15% of their projected government salesrevenue on industry development activities suchas those recognised in the partnerships scheme.
The early members of the partnerships schemewere predominantly computer hardwaremanufacturers, but the focus has recently widenedto include communications and software. Membersnow include; LM Ericsson. Noi Tel (NorthernTelecom), NEC. Fujitsu, Siemens-Nixdorf, GPT andMicrosoft.
Table 6.Company Annual Commitments under thePartnerships Scheme, as at June 1992 ($Am)
Company Exports R&D By
Bull HN 34 8 1994HP 89 17 1995Apple 84 13 1994Digital 100 25 1992Wang 11 1995Cincom 2 1 1992IBM 340 75 1993Sun 68 10 1995Unisys 45 14 1994Siemens 9 4 1995ICL 28 10 1995Pyramid 12 1 1995CPT 12 4 1996NEC 185 40 1996Microsoft 20 5 1996Nor Tel 27 5 1996Ericsson 156 30 1996Tandem 36 9 1996Amdahl 37 7 1996Oracle 13 4 1997Fujitsu 126 26 1997
Source: Department of Industry 'technology &Commerce.
Similar aims underlie the Industry DevelopmentArrangements (IDAs) for the CPE manufacturingsector (20). The IDAs have experienced only a very
mixed success in promoting manufacturing activityand export. but it is important to see the I As as atransitional scheme that seeks to provide theenvironment for a more orderly restructuring of theCPE industry (21). In a sense the partnershipsscheme is also transitional. It aims to create theenvironment for the location of globally strategicproduction in Australia by the leadingtansnationals.
It seems likely that long-term partnership styleagreements will be the basis of Australia'sInformation Industries Strategy for some time tocome.
Is the Australian Information IndustriesStrategy the Right One?
To be successful industrial policy must affectcorporate decision-making. So it is essential toknow where, and under what strategic orientationdecisions are made.
Until recently telecommunications had beencharacterised by nationally based monopolycarriers that were required to, or simply chose tofavour local equipment suppliers. This resulted inthe development of an industry structure that wascharacteristically multidomestic.
The deregulation of telecommunication services hasbegun to break down the conditions under whichthe purchasing arrangements of national carriersare subject to imposed or de facto governmentcontrol. This is opening up the communicationequipment market. The emergence of a globalmarket is propelling the communications industryalong the path of conversion from acharacteristically multidomestic structure towardsthe characteristically transnational structure thatthe computer industry exhibits.
In a multidomestically structured industrycompanies operate within national boundaries.with a national focus and with a relatively hiirhlevel of national autonomy. In a transnationallystructured industry a company is a global systemin which subsidiaries are inter-dependent, co-ordination is centralised, and actions globallystrategic.
The emerging transnational structure allows thedevelopment of centres of excellence anywherethroughout the global corporate network. Thismeans that rather than being the site of a numberof nationally oriented multidomestic production ordistribution establishments, Australia mustbecome the regionally or globally strategic siting ofone or more of the core activities of transnationals.
OECD analysts have summarized the situation asfollows. The relative decline of the traditionalmultinational company (MNC) form is generating anew environment for governments in which theirrelations with, and means of action vis-a-vis boththeir own major industrial enterprises and theforeign ones they host may change in nature, andmay in some respects converge (in new forms ofpartnerships). Particularly effected will be nationaland international policies aimed at encouragingR&D (22).
The corporate partnership approach, decliningprotection and internationalisation, and a generalfocus on innovation. education and strategicinvestment in Australia, are appropriate in thecontext of a globalising economy ot the conceptual
763 7 C-' t.)
level. So the basic elements of industrial policy arein place: but does it work?
Does it Work?
In 1987 the companies now party to thepartnerships scheme exported $A 190 millionworth of goods and services and undertook $A 63million worth of R&D in Australia. During 1991-92partners' exports reached $A 513 million and R&Dexpenditure $A 200 million. This year's resultsexceed targets for exports by 14% and R&Dexpenditure by 12% (23).
Table 7.Performance of Partnership Companies, 1990($Am)
Sector Exports R&D
Hardware 334.2 71.7Software 146.2 123.2Services 31.6 5.5Tech Support 18.0 3.3
Total 512 200
Source: Department of Industry Technology &Commerce.
As well as promoting export and R&D activity inAustralia the partnership scheme seeks to integratethe indigenous industry into global marketstructures. At the end of the financial year 1990-91there were 131 local companies supplyingpartnership companies. Of these, 6 were supplyingPCBs. 57 components. 8 cables, 17 services, and43 were supplying other requirements. There were4 joint-ventures. In addition there were 116 localcompanies undertaking R&D for partnershipcompanies 7 in relation to hardware and 109 inrelation to software - and 91 local companies hadhad exports facilitated by partner companies. Ninelocal companies were receiving venture capital (24).
Of the 21 partner companies during 1990-91, 6contracted out R&D in relation to hardware, 15 inrelation to software and 6 contractedmanufacturing out. Sixteen of the partnercompanies were involved in export facilitation forlocal companies (25).
These figures suggest that there is a growing levelof interaction, integration and inter-dependencebetween transnational and indigenous companiesin the Australian IT industries. There is prima faciaevidence that indigenous Australian companies arebeing integrated into the global operations of thetransnationals and thus into global markets, andthat the transnationals are extending both theiractivity in Australia and their involvement withAustralian IT industry players.
Notwithstanding the dominance of IBM in theAustralian industry, export figures do not suggestthe development of undue dependence. Fiveindigenous companies appear among Australia'sTop 10 IT exporters during 1991, compared to 3 inthe Top 10 by sales revenue. They are: Paxus (rank2), Computer Power (rank 4), Andersen Consulting(rank 5), Datacraft (rank 8) and Telecom Australia(rank 10) (26).
Table 8.Australia's Top 10 IT Exporters, 1991
Company Exports ($Am)
IBM 317.0Paxus Corp. 133.7Alcatel 60.0Computer Power 50.0Andersen Consulting 48.0Ericsson 40.0Fujitsu 32.0Datacraft 31.3Unisys 30.7Telecom 26.5
Source: Today's Computers. 1992.
There are two aspects to the 1991 results that areparticularly encouraging. First, only 2 indigenouscompanies ranked in the 1990 Top 10 IT exporterscompared to 5 in 1991 (27). Second. the Top 101Texporters earned a total of more than $A 700million in 1991 compared to only $A 450 million in1990 (28).
What is also encouraging is the way in whichrecent ventures are playing to the relative strengthsof Australia's IT industries. Namely. software andcommunications equipment.
Paxus Corp. with software and services export salesof almost $A 134 million in 1991, now claim to bethe world's largest supplier of applications softwareto the insurance industry outside the USA. Incommunications Datacraft continue to developexport markets, especially in Asia. Exportsaccounted for some 38% of Datacraft's salesrevenue in 1991 (29).
Most encouraging of all is that there are signs thatventures are emerging in Australia which seek toexploit the synergies that the technologicalconvergence of computing and communicationsoffers.
In 1991 Fujitsu Australia. which doubled itsexports between 1990 and 1991, released theAIM/Bridge software product developed at itsAustralian Software Centre. The Fujitsu centre inAustralia was set up for the specific purpose ofdeveloping communications and connectivitysoftware for sale world-wide (30).Bull HN also focuses on communications relatedsoftware development in Australia, including thejoint development of 'Transerve" with TelecomAustralia (31).
Digital has a Network and Communications R&Dcentre on the campus of Bond University where itis undertaking joint development. As the primecontractor for the new carrier OptusCommunications Digital will be undertaking thedevelopment of Optus's Operational SupportSystems (OSS) in conjunction with ComputerSciences of Australia, Computer Power, IBM andWhitesmiths in a project expected to be worth abillion dollars over the next ten years. Digital willbe establishing a global OSS Support andDevelopment Centre in Australia. and hascommitted its marketing resources to selling thesystems produced world-wide (32).
764 c 2"--)
Similarly, the Australian Centre for UnisysSoftware (ACUS) has become the internationalhome for Unisys's R&D work for datacommunications products conforming to OpenSystems Interconnection (OSI) standards (33).
These and other ventures reveal a focus on theexploitation of possible synergies arising from theconvergence of computing and communications,and a determination to build on Australia's relativestrengths in communication equipmentmanufacturing and software and services.
Summary and Conclusions
There is support at the analytical level for thepartnership approach to industrial policy which theAustralian government is pursuing in theInformation Industry Strategy. Bringingcommunications and computing into a singlepartnerships scheme, a single industrial policyprogram for the information industries, is anessential aspect of managing the convergence ofcomputing and communications, and of attemptingto maximise the potential synergies between thesectors of the IT industries in which Australia hassome competitive strengths.
There is also prima facia evidence that theapproach is beginning to work. Australia isrelatively well placed to exploit the focus of thetechnological convergence of computing andcommunications in communications equipmentand software. and there is some evidence thatenterprises, both transnational and indigenous, are
,ning to do so. There are. nevertheless, somepoints of fragility in the present situation inAustralia.
One immediate problem is to manage the transitionthat the communications sector of the industry isexperiencing, and to maintain a relatively strongcommunications equipment manufacturing base inAustralia during the industry's transformation.
It is not yet clear that the industry developmentplans that the duopoly carriers have undertaken asa condition of their licence can be effectivelyimplemented. It may have been better, and may yetprove necessary to bring the carriers into acorporate partnership scheme rather than relyingon a regulatory approach that is somewhatanomalous in the context of deregulation. Clearlysome other arrangement will have to be in placebefore the end of the carrier duopoly period in1997.
Another concern is the extent of Australia'sdependence engendered by such an industrialpolicy approach. IBM's exports account for aroundhalf Australia's total computer hardware exports,and some 60% of the partnerships scheme's exportachievements. IBM's Australasian IT sales in 1991were almost two-and-a-half times those of itsnearest rival, Alcatel. IBM's partnershipcommitments end in 1993. and they clearly have astrong bargaining position from which to negotiatetheir next agreement with the Australiangovernment. It is also noticeable thatrepresentatives of IBM and Alcatel have recentlyemerged as leaders in setting the IT policy agendain Australia. Such indicators of dependence, bethey statistical or participatory, must be a causefor some concern.
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Finally, one must always be concerned with theevolutionary adjustment of industrial policystrategies. Where have we come from? What are wedoing now? Where are we going? These areperennial questions.
There are some important issues to considerrelating to industrial policy focus and enterprisesize. Analysts suggest that profitability is becomingthe main indicator of investment performance. Nolonger are enterprise size or industry sector majorcorrelates of investment. This suggests two things.
First. sectoral industrial policies should be phasedout, or, perhaps, harmonised and merged into anoverall "competitiveness" strategy. A sectoralstrategic focus on IT, biotechnology, or whateverelse may not be appropriate over the comingdecade. Second, industrial policies that focus onenterprise consolidation and/or working with themajor transnational corporations, as IT policies inAustralia over the last decade have tended to do.should give way to a "competitiveness" strategy thatworks with competitive players. irrespective of theirsize.
In relation to the broader evolutionary trajectory ofindustrial policy the current trend is relativelyclear. The telecommunications era in which theregulated monopoly structure focused on universalaccess based on technology as the facilitator ofuniversalisation is at an end. The micro-economiccost of communications is now driving consumerdemands for competition. Carriers and theirsuppliers are now undergoing the painfultransformation from a technology paradigm to amarket paradigm (34). This is the context in whichan overall "competitiveness" strategy in industrialpolicy is apposite.
Where to next? The obvious response to thisquestion is that we are entering an information age.The likely overriding customer demand in such acontext will be access to information. What are theimplications of this for industrial policy?
In an interesting series of articles recentlypublished in Telephony (35) it was suggested thatthe true value of regulated competition has notbeen its ability to increase technology or even inadding efficiency to industry, but rather its role inforcing the telecommunications industry to makethe transition to a market paradigm. The authorsobserved that hardware, software and content arebecoming so interwoven that the artificialseparation of those industries will delay a country'sentry into the information age. and its ability tocompete globally. Continuing to separateinformation (content) from the infrastructuraltechnology only prolongs the old technologyparadigm (36). It would follow that some broaderconvergence of industrial policy and competitionand content regulation in communications mustcome.
Put into this wider perspective it is clear that thespecific aspects of convergence that have been thefocus of this paper are only a small part of theoverall phenomenon of convergence. At this stageone can see only the broad outlines of the requisiteregulatory. institutional and policy structures forthe development of successful industrial policy intothe next century, but it is clear that harnessingconvergence will be a key factor.
1. Pearcey, T. 1988. A History of AustralianComputing, Chisholm Institute of Technology.Melbourne.
2. Refer to Department of Industry Technology andCommerce. 1987. The Australian SoftwareIndustry; A Report to the Industry and TechnologyCouncil, AGPS, Canberra; Houghton, J.W. 1991,The Australian Information Industries; Part I -Identifying the Opportunities, Working Paper1991/2, CIRCIT, Melbourne: Houghton, J.W.1991, The Australian Information Industries; Part
- Barriers to Development and Policy Issues inthe Computer Services Industry, Working Paper1991/4, CIRCIT. Melbourne: etc.
3. Plunkett, S. 1992, IT Top 50, Todays Computers.June 5, 1992. pp7-34.
4. ibicL, p6.5. ibid., pp6-13.6. ibid., p7.7. ibid., pp7-8.8. Australian Electronics Industries Association
(ASIA), 1991. The Future Development of theAustralian Telecommunications Industry. AEEMA.Canberra. p2.
9. Plunkett, S. 1992, op.ciL, p9; and Meredith, H.1992. "Alcatel's Web Weaves one PacRim Tribe."The Australian. 12 October. 1992. p41.
10. Plunkett, S. 1992, op.cit.. p9.11. Australian Bureau of Statistics data, analysis by
CIRCIT,12. Australian Information Industries Association.
1992. Annual Reports. AIIA, Canberra. p16. AIIAmembership represents approximately 85% ofthe Australian IT marketplace.
13. Chong. Florence. 1992. "Computer Whiz," TheAustrallan, 17 November. 1992, p41.
14. Deprtment of Industry Technology andCommerce. 1988, Annual Report 1987-88. AGPS,Canberra. pp150-153.
13. Stanford. J. (Ed.) 1992. Industrial Policy inAustralia and Europe, AGPS. Canberra, pviii.
16. Department of Industry Technology andCommerce. 1988, op.cit.. pp151-152.
17. OECD, 1990, Industrial Policy in OECD Countries.Annual Review. OECD. Paris, p13.
18. Deprtment of Industry Technology andCommerce, 1988. op.cit.. p28.
19. Transnationals are expected to spend 5% of theirannual local turnover on R&D in Australia,achieve annual exports equivalent to 50% ofimports for 1.ardware companies and 20% ofturnover for software companies, and achieve anaverage of 70% local value-added across allexports by the seventh year (Deprtment ofIndustry Technology and Commerce, 1988,op.cit., p28). Since the March 1991 industrystatement the partnerships scheme has beenextended to recognise such developmentactivities as; strategic infrastructuredevelopment, third party indigenous industrycapability development, and investment inindustry capacity through approved venturecapital funds (Building a Competitive Australia.Industry Statement, March 12th., 1991, AGPS,Canberra).
20. The IDAs have applied since July 1st 1989 to thefirst phone, PABX.s, small business systems/keysystems and cellular mobile telephone handsets.Under the arrangements suppliers must meetspecific targets in respect of R&D, exports andAustralian based production and content. Thesearrangements are due to end In July 1993.
21. Orderly departures from the scheme byDatacraft, Philips and Hatadi reflect thisrestructuring (See Austel, 1992, IndustryDevelopment Arrangements. Customer Equipment,Year Three Report, Austel, Melbourne).
22. OECD, 1990. op.ciL, p12.23. Deprtment of Industry Technology and
Commerce. 1991, Annual Report 1990-91. AGPS,Canberra, p38: and Deprtment of IndustryTechnology and Commerce, 1992, AustralianCivil Offsets Annual Report 1991-92. AGPS.Canberra. p31.
24. Deprtment of Industry Technology andCommerce. 1992. Australian Civil Offsets AnnualReport 1991-92. AGPS, Canberra. pp73-82.
25. ibid.. pp73-82.26. Plunkett. S. 1992, op.cit.. p14.27. ibid.. p5.28. ibid.. p14.29. ibid., p14.30. ibid.. p14.31. Deprtment of Industry Technology and
Commerce, 1992, Australian Civil Offsets AnnualReport 1991-92. AGPS. Canberra. p33.
32. Dptus. 1992, The Oplus Plan for the Developmentof the Australian Telecommunications Industry.Optus Communications. Sydney. p3.
33. Plunkett, S. 1992. op.cit., p14.34. Farrah, B.J. and Maxwell. D.M. 1992. "Is
Technology Leading Us Astray?," Telephony.September 9. 1992. pp18-20.
35. Farrah, 15.J. and Maxwell. D.M. 1991, "IsTechnology Leading Us Astray?." Telephony.September 9, 1991. pp18-20; Farrah, B.J. andMaxwell. D.M. 1992, "Rethinking the TelecomField of Dreams." Telephony. March 9, 1992,pp50-58; Farrah. B.J. and Maxwell. D.M. 1992."Building Infostructure: Public Policy in theInformation Age," Telephony. April 20. 1992.pp44-54; Farrah. B.J. and Maxwell. D.M. 1992."Market-based Public Policy." Telephony. June15. pp72-80.
36. Farrah, B.J. and Maxwell. D.M. 1992. "BuildingInfostructure: Public Policy in the InformationAge." Telephony, April 20. 1992, p54
References
Austel, 1992, Industry Development Arrangements,Customer Equipment. Year Three Report. Austel,Melbourne.
Australian Electronics Industries Association (AEIA).1991. The Future Development of the AustralianTelecommunications Industry, AEEMA, Canberra.
Australian Information Industries Association (AIIA),1992, Annual Reports. AIIA, Canberra.
Building a Competitive Australia. Industry Statement.March 12th., 1991. AGPS, Canberra.
Chong, Florence. 1992. "Computer Whiz," TheAustralian. 17 November. 1992. p41.
Department of Industry Technology and Commerce,1987, The Australian Software Industry; A Reportto the Industry and Technology Council, AGPS,Canberra.
Deprtment of Industry Technology and Commerce,1988. Annual Report 1987-88, AOPS, Canberra.
Deprtment of Industry Technology and Commerce.1991. Annual Report 1990-91. AGPS, Canberra.
Deprtment of Industry Technology and Commerce,1992. Australian Civil Offsets Annual Report1991-92, AGPS, Canberra.
Farrah. B.J. and Maxwell. D.M. 1991, Is TechnologyLeading Us Astray?," Telephony. September 9.1991, pp18-20.
Farrah. B.J. and Maxwell, D.M. 1992, "Rethinking CieTelecom Field of Dreams." Tel Mani- 9,1992. pp50-58.
rti
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Farrah. B.J. and Maxwell. D.M. 1992. "BuildingInfostructure: Public Policy in the InformationAge," Telephony, April 20. 1992, pp44-54.
Farrah, B.J. and Maxwell. D.M. 1992, "Market-basedPublic Policy." Telephony, June 15. pp72-80.
Houghton, J.W. 1991. The Australian InformationIndustries; Part I Identlfying the Opportunities.Working Paper 1991/2, CIRCIT, Melbourne.
Houghton, J.W. 1991, The Australian InformationIndustries: Part II Barriers to Development andPolicy Issues in the Computer Services Industry.Working Paper 1991/4, CIRCIT, Melbourne.
Meredith. H. 1992, "Alcatel's Web Weaves one PacRimTribe." The Australian, 12 October, 1992, p41.
OECD. 1990. Industrial Policy in OECD Countries,Annual Review, OECD. Paris.
Optus, 1992, The Optus Plan for the Development of theAustralian Telecommunications Industry, OptusCommunications. Sydney.
Pearcey. T. 1988. A History of Australian Computing.Chisholm Institute of Technology. Melbourne.
Plunkett. S. 1992. ITTop 50, Todays Computers, June 5.1992. pp7-34.
Stanford, J. (Ed.) 1992. Industrial Policy in Australia andEurope, AGPS, Canberra.
767
HIGH DEFINITION TELEVISION:THE KEY TO MULTIMEDIA AND BROADBAND NETWORKS
Dennis W. ElliottElliott Communications Co.Great Falls, Virginia USA
1. ABSTRACT
HDTV is not just about television! Current developments and definition in highdefinition television (HDTV) and its relationship to alternative applications and itsrelationship to the various delivery media will change forever the way wecommunicate in the U.S. and throughout the world. This will not be "hometelevision entertainment'. as we know it but a much broader, image-basedcommunication medium. In fact, HDTV will play a key enabling role in thedevelopment of multimedia beyond the rudimentary level of today and in providingthe economic backbone for the development of a world-wide broadband network.
2. INTRODUCTION
Why do we say that high definition television (HDTV)is not just about television? And why is it the key tomultimedia and broadband networks?
We all know that HDTV will give us much improved,motion picture quality television pictures when it iswidely available at the eod of the decade. But theprocess through which HDTV is now being defined inthe U.S. includes a substantial opening up to allowinclusion of a far more robust digital, image-orientedtransmission and processing. No longer will thepersonal computer necessarily be a separate entity. Nolonger will we really have separate telecommunicationfacilities for telephone, television and computers. Infact, in part through the development process of HDTV,these three entities are merging.
The entertainment, business, health, education andother sectors focused upon HDTV will provide thelarge application base by which multimedia andbroadband networks can be based. Without a large,growing application base, these networks cannot beeconomically justified in other than limited situations.
The purpose of this talk is not to wildly toss around"blue sky" ideas. What I am talking about is somethingthat will be real and widely used by the end of thisdecade, only a few years away.
3. DEVELOPMENTS
Jules Bellisio, executive director of the Video Systemsand Signal Processing Research Department at Bellcorehas emphasized that the so-called television receivers ofdigital HDTV will possess capabilities for severalapplications beyond broadcast television. "What wehave is the basis for a multimedia system."
Martin Hoffman of Digital Equipment Corp. has statedthat the U.S. FCC will soon back "technical standardsthat would speed a merger of computer and TVtechnology, making possible an array of new services...."He said he expected "a number of common technologieslinking computers and the proposed advanced digital -broadcast TV signals, including high-speed packet-switching of data, special identifiers for data streams toallow computers to store and manipulate images andsound ...."2
Fundamentally, what is occurring now is thedevelopment stage of a new, image-basedcommunications medium which some people callHDTV, some people call multimedia, some people callvideo telephone and other people are not sure what tocall it. Conceptually, the motion image and audioassociated with today's television (and for that mattermotion pictures) is merging with today's personalcomputer and computer networking technologies whichare merging with today's telecommunicationstechnologies to form a whole new way ofcommunicating not only for entertainment but for allforms of communication.
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Actions principally in the United States, but also athrough a number of entities in several other countriessuch as Japan, Taiwan, South Korea, Singapore, Canadaand the Netherlands, are pushing this environment.The U.S. is leading the way with Japan and the otherAsian countries likely to quickly follow and theEuropean Community more slowly recognizing thesedevelopments.
The Driving Forces
What is the driving force behind this? It's really twothings. One is the current strain and stress of havingtelevision, computers and telecommunications inseparate "baskets". Today, we work and play with thesetools as separate things. The human being naturallylikes things to .be more integrated and natural so thatthere is little "work" associated with receiving andsending information. Before now, we had technologicaland economic as well as artificial barriers to making it"easy".
The other driving force is the tremendous development.1 digital technology in the world but especially the U.S.Microprocessors get smaller and cheaper and morepowerful by tremendous amounts every year! Thehuman interface through image displays, now fairlybulky and expensive, will soon become far better withthe developments of large and small solid state displaysand other interface mechanisms. These developmentallow for the integration of all these communicationsforms through affordable, digital technology.
Open. Interoperable Systems
Another element of the current developments is thepush for open systems and common standards to allowthe hardware to interoperate together, no matter whatthe application. The current difficulty of operatingpersonal computers with an entertainment television,for example, will be no more.
A necessary component of this openness andinteroperability is the incorporation of headers anddescriptors into the digital data streams for HDTV andother image and non-image based applications.Headers and descriptors provide a periodic andstructured labeling of the digital image data whichallows for identification of the types and components ofdata in the digital data stream by a receiver/processorno matter what type of network is employed. This willallow processors at any point along the way to identifythe type or types of applications represented in a givendata stream and the type of coding and otherinformation embedded in the data for each application.
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The idea is that an entertainment program could betransmitted through the same telecom/computernetwork that a game or video conference or any numberof new applications. The receiver/processor at thereceiver end(s) would quickly determine the type ofapplication and process it accordingly to decode anddisplay the signal.
Standards
There is a great deal of work in the television areafocusing on international standards for this newmedium.
In the U.S., the FCC's Advisory Committee onAdvanced Television Service (ACATS) is close to itsfinal recommendations to the FCC regarding over-the-air transmission of HDTV. A significant element of thisrecommendation will be the emphasis oninteroperability (with alternative delivery means andwith alternative applications), scope of services andfeatures, and extensibility (based on futuredevelopments). These three parameters are three outof ten evaluation factors employed by ACATS.
The Motion Picture Experts Group (MPEG) of theInternational Organization for Standardization (ISO) isin the final processes of developing a set ofinternational standards called MPEG-2 which willencompass digital motion pictures/television fromtoday's quality levels to tomorrow's HDTV. There issome likelihood that this standard will be employed incomputer processing and the U.S., Japanese andEuropean HDTV standards.
The Society of Motion Picture and Television Engineers(SMPTE) is intensely investigating standards forheaders and descriptors as well as architecturalapproaches to digital imaging.
Networks
There is a tremendous activity today regardingtelecommunications/computer networks of the future.Substantial world-wide activity is under way todayleading to standards and technology for broadband,packetized networks such as Broadband IntegratedServices Digital Network (B-ISDN) using cell-basedinformation transfer. Substantial, politically-backedefforts are being made for broadband, packetizednetworks such as the U.S. National Research AndEducation Network (NREN) and fiber-based networksin Japan. There is growing activity in the U.S. regardingthe development of a whole, new informationinfrastructure, especially with the new political
administration entering office with a new infrastructureprogram. This will coalesce by the end of the 90's to amot, fungible broad band networking commodityavailable to all at a reasonable economic price.
Image Compression
In order to transmit, process and store high qualityimages in an image-based communicationsenvironment, a substantial amount of compression mustbe performed for both still and motion images. Asignificant number of companies world-wide areworking on this area and the first major efforts arebeing solidified through the MPEG-2 and FCCAdvanced Television efforts. The compressionapproaches which will initially be employed willgenerally employ discrete cosine transform (DCT) typecompression schemes. Other different compressionapproaches may be expected in the future.
The result of this, for example, will be to allow a digitalhigh definition television image of movie quality to betransmitted over the same transmission channel that themoderate resolution entertainment television signal oftoday. Or conversely, allowing multiple televisionsignals be transmitted within a single channel of today'stelevision.
Do We Want This?
Do we want this? It's beginning to appear that peopleare starved for this. 13ut they want something that is nota hassle and easily performs many functions. Ashardware and software begin arriving into people'soffices, homes and other locations, that which iseconomical and most "usable" will become what peopleselect and use.
4. THE PROBABLE/POSSIBLE
What will the world look like in the years 2000 to 2005(only 7 years from now)? First, most of ourcommunications will be over broadband digitalpacketized networks. Much of our businesscommunication and a growing amount of our personalcommunication will be image based - both moving andstill images. Television sets will probably be componentsystems (like our stereos today) containing a small butpowerful digital processor. The sets will incorporateour video, audio, computer and telephone systems.These functions will be tied together through the broadband network. Much of our business and entertainmentactivity will be interactive.
In the entertainment area, we will see the advent ofmovies/television on demand at movie quality, exoticnew interactive games (watch Nintendo, Microsoft andothers) and perhaps interactive movies. We will see theability for the viewer to control the individual viewingangle in a network televised sports event. We will seepersonalized television combining a broadcast programwith personalized viewer information to create apersonalized program such as is being worked on by thePersonalized Mass Media Corporation.
In the interpersonal communications area, bothbusiness and consumer, we will have high quality videotelephones (that many people are working on) andvideo snapshots and database albums (like KodakPhoto CD but more).
In the business area, we will see video databases whichinclude text, image audio and maybe other informationwhich can be accessed without cumbersome keyboardsand displayed on wall-sized displays. Companies inJapan and the U.S. lead the way here. We will see newarchitectures to control the movement of image-baseddata within a corporation.
In the education area, dynamic image-based multimedialearning systems which might employ large, networkedmultimedia data bases will come into being.
In the health area, doctors will be able to diagnoseremotely and compare image and other data withreference data from around the world in making adiagnoses.
In fact, these examples are only a small fraction of whatwe will see by the year 2000. As the components of thisimage-based communications approach begin to jell inthe next several years, more intensive thought will beput to applications. The result will be applications inplace in, say, ten years that are broadly based but thatno one today has thought of.
5. CONCLUSIONS
As we have seen, HDTV is not just about television butabout a whole new communications paradigm. Two-way image communications for a broad number ofapplications will be inserting itself into the fabric of ourlives. Countries of the Pacific Basin are likely to thefirst to experience this because of the leading edgetechnologies being developed in North America andAsia. The Europe will follow soon thereafter.
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This is particularly important to the people of thePacific Telecommunications Conference because thisnew paradigm will impact this conference before theend of this decade in a way of great significance becauseof the extraordinary shift in the human capability tocommunicate.
I " HDTV Experts Offer Outlooks During A Videoconference OnThe Technology", HDTV REPORT, v2 no23, November 11, 19922 "FCC Expected To Back Steps To Make TV, ComputersCompatible", Wall Street Journal, November 30, 1992
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The Current Status and Future ProspectsKDD's International ISDN Service
with the Focus on Typical Application Examples
Syuji Kanazawa
Senior ManagerMarketing and Sales Headquarters
Kokusai Kenshin Denwa Co., Ltd. (KDD)
ABSTRACTKDD in cooperation with AT&T and BT launched the first international ISDN service in the world on June1, 1989.The network growth since the inauguration of international ISDN service includes the interconnectionwith NTT's domestic INS-Net and the overseas expansion to fourteen countries: USA, UK, Singapore,Australia, France, Italy, Germany, Hong Kong, Belgium, Spain, the Netherlands, Sweden, Switzerlandand Denmark as of December 1992.Regarding international ISDN applications, the use of videoconferencing and Group 4 facsimile has beensteadily increasing in every business category while still picture transmission and wide bandwidth audiotransmission have been also put into use mainly by the press and broadcasting businesses.This paper introduces the current status and future prospects of international ISDN applications focusingon such 1992 world events as the Albertville Winter Olympic Games, the Munich Summit and theBarcelona Summer Olympic Games.The information in the paper is based on facts and studies as of December 1992.
1. International ISDN Service in Japan1.1 Direct Access and Switched Access
KDD's international ISDN service is the firstinternational service to offer 64Kbps cleardigital channel transmission to selectedcountries in the dial-up mode.
The international ISDN service was developedto meet the needs of customers for cost-effective, high quality digital services.
There are two types of contract for theinternational ISDN Service.
@Direct access contract with which KDDinstalls a direct subscriber tie-line tocustomer's location.
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@Switched access contract with which thedomestic INS network is used for internationalaccess.KDD's international ISDN offers variousservices as follows:
@64Kbps circuit switched service@International telephone service@HI-BITLINK(International leased circuitservice) X@VENUS- P(International packet-switchedservice)eVENUS-LP(International high speed datatransfer service) X©F- Port(International store-and-forwardfacsimile service)@Messavia(International electronic mailboxservice)
X Only direct access customers areaccessible.
1.2 Network structure
1.2.1 Development Stages
ISDN services are perceived by the customer asone set, of services offered over a common accessof basic or primary rate interface. However,
the traffic of each service may actually be carriedon existing separate international networks.
(1)Stage 1 (TUPJ)The stage 1 network provides end-to-endswitched 64Kbitis unrestricted connectivity, anduses the CCITT No.7 Telephone User Part withJ-bit on (TUP J) as the signalling protocol forinterconnection of international ISDN. ThePUP J between KDD and its partner networkproviders has been adopted most as its networkinterconnection protocol. This type ofinterconnections may remain existed until suchnetwork providers' shift to using ISUP.
(2)Stage 2 (Q767 ISUP)In order to provide the international ISDNsupplementary services, the CCITT No.7 Q.767ISUP signalling protocol is used as theinternational signalling protocol.
The protocol has been applied to theinternational link with AT & T since March1992.
1.2.2 Services
The international ISDN supplementary servicesare made possible only by the implementation ofCCITT No.7 Q.767 ISUP on the internationalconnections. KDD supports the followingservices.
(1)Bearer service:®64kbit/s unrestricted digital03.1kHz audioespeech
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(2)Supplementary service:OCL1P/CLIR0Subaddressing()User to User Signalling Service 1
(3)In addition, the following user informationcan also be supported:OLow layer compatibility()High layer compatibility
The terminal compatibility information above ifreceived from the user will be transported end-to-end by the network.
1.3 Routing
For the circuit switched digital bearer .9,rvice,both dedicated TUP J circuit and ISUP circuitare used in the international section. Circuitswitched speech (and 3.1 Khz audio) callsoriginated or terminated at ISDN users arecarried by PSTN.
1.4 International Link
The table 1 shows the current status ofinternational links for ISDN. Signalling withU.K. is scheduled to be changed to ISUP in 1993.
1.5 User-Network Interface
1.5.1 Local Network Structure
Fig. 1 shows KDD's local network structure forinternational ISDN in Japan.
Both Basic Rate Interface (BRI) and 1.5MbpsPrimary Rate Interface(PRI) are supported byKDD's ISDN. The ISDN user-networkinterface specifications conform to the TTC*standards, which are completely in line with theCCITT Recommendations.
bu).-
Table 1 International link
Country Signalling Speed Country Signalling Speed
Australia TUP J 64Kbps Netherlands TUP J 64Kbps
Belgium TUP J 64Kbps Singapore TUP J 64Kbps
France TUP J 64Kbps Spain TUP J 64Kbps
Hong Kong TUP J 64Kbps BT TUP J 64Kbps
Italy TUP J 64Kbps AT&T ISUP 64Kbps
Sweden TUP J 64Kbps MCI TUP J 64Kbps
Germany via France 64Kbps Switzerland TUP J 64Kbps
Denmark TUP J 64Kbps New Zealand TUP J 64Kbps
ft In-band
1.420
NT2(ISPBX)
NT
BRI
Q.931
41.421
NT1Q.931
PRI
KDDLS
No.7 ISUP
STP
KDDISC
International
KDD
In-band
NT2(ISPBX)
NT
NT1
PRI
BRI
ISMNTT
LS NTTTS
In-bandand/orNo.7ISUP
Fig. 1 Local Network Structure for International ISDN
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NTT
ISDN switched access via INS-Net (NTT'sdomestic ISI)N) is made available by theinterconnection between KDD's internationalISI)N and NTT's national ISDN with TTC-standard ISUP circuits.
'FTC : Telecommunication TechnicalCommittee is a Japanese entity forstandardization of telecommunication.
1.5.2 Numbering Structure
E.163/164 number starting with "81" as thecountry code of Japan is assigned to JapaneseISDN customer, though the maximum length ofnumber is still twelve digits (not fixednumbering).
Therefore, the numbering structure of KDD'sISDN customers in Japan is as follows.
+81 Xi X2 X3 X4 X5 X6 X7 Xg X9 X10
Area codes "3117" and "6117" in nationalsignificant number are used to designate KDD'sdirect access customers as well as for KDD'sinternational telephone direct customers, RouteKDD customers. "3117" is for KDD's directcustomers in the eastern area of Japan and"6117" is for customers in the western area ofJapan.
Therefore, the numbering structure for KDD'sdirect customers is as follows.
+ 81 3117 XXXXXX (Eastern area)
+ 81 6117 X XXX X X (Western area)
1.5.3 Dialing Number
Owing to the adoption of standard Q.931 protocolat user-network interface, the dialing numberfor international switched digital call is thesame as for international telephone calls, i.e.
001 (prefix for MD) - CC (country code) -NN (national number)
1.6. International and Local Coverage
1.6.1 International Coverage
Table 2 shows the international coverage of64Kbps circuit switched service as of November
1992.
Table 2 International ISDN Coverage
Country Commencement
USA (AT&T) 1 June, 1989
UK (BT) 1 June, 1989
Singapore 28 Dec, 1989
Australia (AOTC) 15 Jan, 1990
France 26 Apr, 1990
Italy (ItalCable) 20 Dec, 1990
Germany 1 Apr, 1991
Hong Kong 1 Apr, 1991
Belgium 23 Apr, 1991
Spain 14 May, 1992
Netherlands 15 June, 1992
Sweden 3 August, 1992
USA(MCI) 1 Sept, 1992
Switzerland 6 Nov, 1992
Denmark 1 Dec, 1992
New Zealand 8 Dec 1992
The network expansion is being made to thosecountries where 64Kbps circuit switched serviceis provided in the form of pre-ISDN or ISDN. Itis foreseen to be expanded to Canada, Finlandand Norway in 1993, and Korea and other Asiancountires in 1994 or later.
1.6.2 Local Coverage
@Direct access
The service coverage of direct access is currentlylimited to Tokyo 23 wards. It is scheduled toextend other major cities in Japan.
®Switched access via NTT's INS network
The service area has already covered everymajor cities throughout Japan. This meansthat international ISDN lines have already
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become ubiquitous and can be accessed in almostall over the country.
2. International Applications
This section describes major applications andequipment available on the market in Japan forinternational use as opposed to domestic use.
Because type-approval regulations on terminalequipment, marketing coverage of terminalequipment and user-network interface vary fromone country to another, international usage ofISDN terminal equipment has its owncharacteristics in many ways.
In addition, the variety of users' demands causesa difference in popular applications in eachcountry. One example is the popularity ofGroup 4 facsimile ISDN usage in Japan whereasin other countries PC-to-PC communication isthe most common use of ISDN.
Each subsection below details characteristics ofterminal equipment and KDD's contribution ineach application domain.
2.1 Still Picture Transmission
(1)Characteristics of the equipment
The transmission of full color still pictures hasbecome very convenient with the use of a stillpicture transmission system on ISDN. Picturesignal is normally compressed by a factor of 1/10compared to the original signal withoutdegradation. The high quality compressiontechnique makes it possible to dramatically saveon transmission time and the necessary storagecapacity of filing systems. The equipmentusually transmits various picture signals inputfrom such as digital cameras, digital color copierand PCs.
(2)KDD's contribution
KDD Technology, a subsidiary of KDD, havedeveloped "cpMuncell" digital full color visualdata processing and communications equipment.
cpMuncell has capabilities of a visual datacommunication, a visual data input/outputprocessing, a data compression anddecompression using LSI chips with adaptivevector quantization techniques. Using highperformance compression and decompressiontechniques without degradation of visual imagequality, it enables the reduction ofcommunication time to 1/10 and provides 10times larger filing capacity for the same memorystorage.
Using cpMuncell as a central unit, CS-3000 asshown in Fig.2 works as a integrated graphicstation for editing, storing, and transmittingcolor imaging. CS-3000 is composed ofMacintoch a3 a system control, Pixel Dio adigital color copier as a data input/output device,magneto-optical disc drive as a data filing deviceand terminal adaptor for the ISDNcommunications.
2.2 Wide Bandwidth Audio Transmission
(1)Characteristics of the equipment
The terminal equipment carries 50 to 7,000 Herzfrequency audio as opposed to the conventionaltelephone system with 300 to 3,400 herz. Theequipment meets the demands from radiobroadcasting companies because of the highquality sound equal to AM radios. Even thoughall the 7Khz audio codecs available in themarket conforms to G.722 CCITT standard, theyare not assured interoperability among differentmanufacturers.
Some recent models of audio codec transmit evenup to 22Khz audio using several 64Kbps circuitsin conjunction with an inverse-multiplexor for
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integrating several 64Kbps circuits intoNx64Kbps transmission stream.
(2)KDD's contribution
KDD developed a newly designed 7Khz stereoaudio codec for international ISDN service.The codec allows to enjoy high quality stereotransmission via two B-channels of internationalISDN at the rates of 64Kbps or 56Kbps with aISDN terminal adaptor. The codec cantransmit the stereo sound ranging from 50hz to7Khz which is more than twice wider than theconventional telephone's bandwidth. For thebenefit of live program transmission system inhe broadcasting community, the codec offers anextremely economical way of high quality stereoprogram transmission on a dial-up, time-sensitive basis.
The codec features H.221 framing recommendedby CCITT to combine two independent lines asone integrated line. The codec can compensate
up to 0.64 second of differential delay betweenthe two independent channels, and allows thetransmission with no differential delay betweenthem even if one of the paths is routed viasatellite and other via submarine cable.
Also, this codec has a unique feature whichallows it to intercommunicate with monaural7Khz audio codecs from different manufacturesif they use CCITT G.722 coding.
2.3 Group 4 Facsimile
(1)Characteristics of the equipment
The demands for facsimile communicationsservices have lately grown very rapidly in Japandue to the transmission capability for graphics,Kanji and other Japanese characters and non-alphabet is writing. Of all internationalsubscriber dialling traffics, the volume offacsimile calls reaches up to as much as 70%.
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The number of G4 facsimiles installed at offices
in Japan is increasing as its high transmissionspeed and image quality started to be perceivedby facsimile users.
(2)KDD's contribution
Because of the G4 facsimile with T.70 protocolavailable in other countries, G4 facsimileinstalled in Japan must have T.70 protocol inaddition to T.90 protocol for ISDN use. 56 Kbps
transmission speed is absolutely necessary whencommunicating with Accunet Switched 56service or the 56 Kbps switched network in Hong
Kong.
In line with the possible incompatibilities thatshould be solved in international environments,KDD developed in cooperation withmanufacturers G4 facsimile prototype machineswith V.110 rate adoption capability andT.70NL/T.90 protocols.
Among G4 facsimile terminals Japanesefacsimile manufacturers have been marketing,KDD recommends users to purchase only thosewhich are equipped with two functions:T.70/T.90 protocols and 56 K bps/64 Kbpstransmission speeds.
2.4 Videoconferencing
(1)Characteristics of the equipment
Videoconferencing, an example of multimediacommunications, offers the exchange of not onlyaudio but also visual information of participantsin the videoconferencing.
The videoconferencing on ISDN has been gettingmore and more popular and prevalent as theISDN network expands and the interoperabilityis obtained among different manufacturers. In
the domain of the international ISDN service,PictureTel and CLI codecs are currently mostavailable, however, the codecs in accordance
80i
with H.261 are expected to become available andpopular very soon. Videoconferencing is amongothers most expected to increase theinternational ISDN traffic.
(2)KDD's contribution
KDD R&D laboratories have developed avideoconferencing system with the followingconfigurations. In this video codec, audio, videoand data signals are multiplexed into 128 Kbpslink. In addition, Forward Error Correction(FEC) coding is performed for the coded videosignals. The videocodec is connected throughISDN lines with two B channels of the basic rateinterface. Two B channels are synchronized toeach other by the codec so as to use them as asingle 128Kbps link. Two B channels areframed into 80 octets conforming to CCITTRecommendation H.221 and are synchronizedusing the channel numbering and multi-framenumbering scheme provided by FAS(FrameAlignment Signal) of H.221 frames. In H.221frame, one B channel is divided into 8subchannls of 8 Kbps: 1.6Kbps of 8thsubchannels is assigned to the framing signaland residual 6.4 Kbps is available.
The internal channel structure, i.e. theallocation of each subchannel is indicated byBAS(Bit rate Allocation Signal). In thesimplest case, 56 Kbps in the first B channel isassigned to audio signal and all of the rest exceptFAS and BAS are assigned to video signal.
For intercommunications betweenvideoconferencing systems with differentconfigurations and capabilities, and end-to-endprotocol is defined as follows. At the start ofcommunications, information on capabilities ofboth remote and local terminals are exchangedusing BAS codes and then the terminalcommences the transmission of video, audio anddata in the mode which is decodable to the otherparty. This communication mode can be
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changed at any time during the call by sendingappropriate BAS codes.
(3)Use of international videoconferencing
The videoconferencing allows the reduction oftime and cost spent for business trips and it isexpected to supplement face-to-facecommunications. As for internationalvideoconferencing with different time zones, thetime difference among involved locations affectsits convenience for participants. It may beconcluded that the time difference is the lastobstacle to be solved in the expansion ofvideoconferencing use because equipment pricegets more economical, and picture and voice getbetter in quality every year .
The convenience in relation with the timedifference may be classified into the followingthree grades.
1) If the time difference is less than 4 hours,videoconferencing is consideredconvenientbecause about half of the normal workinghours a day could be allocated for meetinghours for videoconferencing.
2) If the time difference is less than 8 hours,videoconferencing is considered limitedbecause about quarter of the normalworking hours a day could be allocated formeeting hours for videoconferencing.
3) If the time difference is more than 8 hours,videoconferencing is consideredinconvenientbecause the normal working hours a daycould not be allocated at all for meetinghours for videoconferencing. In thiscase, either party should always be attheir office late at night or very early inthe morning to meet its counterpart of thevideoconferencing.
81
Inco
ours
venientTime
Convent'fference
Limited
n
8 hours 4 hours
2.5 PC to PC
(1)Characteristics of the equipment
Businesses have been introducing rapidly PC-to-PC communications on ISDN. The types of the
communications may be classified based onmodels of personal computers: IBM PC,Macintosh, NEC PC98 and others.
PC board together with those PCs and softwareoffers the abilities of file transfers, fileexchanges, batch transmission and filemanipulation of the distant site's hard disk atthe transmission rate of 64Kbps.
(2)KDD's contribution
1) p- OSI /ISDN board
OSI, open systems interconnection, whichdefines a framework or discipline forinterworking of heterogeneous computers in adistributed processing environment is anotherkey technology for advanced datacommunications.
KDD R&D has developed a number of OSIcommunications software including FileTransfer, Access and Manipulation(FTAM),Message Handling Systems(MHS), DirectorySystem(DS) and Transaction Processing(TP).The significantly increased processing power ofPersonal Computers and WorkStations whichare the majority in number of computers has
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made it possible to implement OSI applicationson PCs and WSs.
p-OSUISDN board, a communications board asshown in Fig. 3 developed by KDD R&D, pluggedinto PCs and WSs, enables OSI protocolcommunications up to the session layer andpropriety protocols for presentation andapplication layers.
PCs with the p-OSUISDN board establishesthree types of OSI-based data communicationson ISDN as shown in Fig. 4.
(DX.31 case A: The p-OSUISDN system canaccess the other PSPDNs via access unit usingISDN circuit switched mode service.
02X.31 case B: The p-OSUISDN system can useISDN packet-mode services on B channels and D
channel.
(DDTE-DTE packet mode communications: Theu- OSI/ISDN system can directly communicatewith another p-OSUISDN system using ISDNcircuit switched mode service.
2)Quick-CUICK ISDN
Quick-CUICK ISDN system which KDD R&Dhas developed has the capabilities oftransmitting color still pictures, voice andtelewriting data on ISDN. The system isapplicable to image database retrieval, audiographic conference and remote monitoringsystems. The system is composed of a personalcomputer, the p-OSUISDN board and a videoprocessing unit which implements aninternational standard encoding system. Insending visual data, the system first transmits arough outline which is gradually filled in tocreate a high-quality image. The progressivebuildup feature is considered effective for imagesearch systems since it is possible at a glance totell whether the image is needed or not. Thesystem is expected to be used as a consultation
system in the printing, publishing and fashionindustries.
2.6 LAN Interconnect
(1)Characteristics of the equipment
Local area networks are being introduced intobusiness environments. With LAN routers,these LANs are interconnected only when it isnecessary on ISDN and data for host computeraccess, interactive editing, file transfer andimaging can be transferred at low cost. LAN
interconnect on ISDN does not require a costlyhigh speed leased circuit.
(2)KDD's contribution
In comparison with LAN interconnect on highspeed leased circuits, that on ISDN generallydoes not include any deterioration in the qualityof data throughput.
The data throughput is, however, affected by aselected international route, either satellite linkor submarine link on a call by call basis. We
have conducted experiments on the transmissiontime with varied parameters of transmissiondelay time and file size.
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Tables 3 and 4 show the results of theexperiments. Conclusions may be drawn asfollows.
©The transmission time with 300 msecondsdelay becomes 6 to 7 times longer than the casewith no delay.
()The above condition is the same for thetransmission rates of 64Kbps and 1.5Mbps.
()The increased transmission rate from 64Kbpsto 1.5Mbps decreases the transmission time withthe case of no delay on the link as opposed to thecase of 300 mseconds delay indicating littlereduction of time from 36 seconds to 32 seconds.
The little reduction of time from 36 to 32seconds is because the window size is small andthe receiving buffer size is 1,024 bytes, thereforeit causes too frequent responseacknowledgements. When the window size andthe buffer size of the receiving end areappropriately larger than that, the transmissiontime would be shorter than 32 seconds.
The transmission delay affects thoseapplications requesting frequent responseacknowledgements and those with a smallwindow size and buffer at the receiving end. Itmay be advisable that a buffer size and windowsize should be adjustable depending on thetransmission delay of a selected internationallink on a call by call basis.
8 ,
(--MODISC
SCSI
GPIB/SCSI
PIXEL DIO LiCopy
Machine
SCSI
cpMunsellMacintosh
TA V35, V10/11
mil 1ASDN
Fig.2 Color graphic station CS-300 standard configuration
PC9801personal computer
plugged intoExpansion slot9.
p - OSI I ISDN System
Host Interface
[CPU 1__ (512KB)(V50)
ROM
LAPB controller.RAM
(512KB)
IISDN controller I
CODEC
II
Fig.3 p - OSI / ISDN Board
781
=1111=111,
1!11111111
11111
NMIIMIllis
e-OSUISDNsystem e X.31
case B
0/ IP\ 0 DTE-DTE
HostComputer
CX : Circuit eXchangeAU: Access Unit
PH : Packet Handler
- - X.31 Case A(Circuit-mode ISDN service)X.31 Case B(Packet-mode ISDN service)
- - - DTE-DTE communications(Circuit-mode ISDN service)
Fig. 4 OSI-based data communications with p - OSI 1 ISDN systems
Table 3 File transmission time for file size of 2671 bytes
PacketTerminal
Transmission speedTransmission delay
(0 msec)Transmission delay
(300 msec)
64Kbps 1.1 seconds 6.4 seconds
1.5Mbps 0.8 seconds 5.9 seconds
1) 300 mseconds is assumed a delay on satellite link.2) File size is 2671 bytes.
Table 4 File transmission time for file size of 25345 bytes
Transmission speedTransmission delay
(0 msec)Transmission delay
(300 msec)
64Kbps 5.0 seconds 36 seconds
1.5Mbps 1.5 seconds 32 seconds
1) 300 mseconds is assumed a delay on satellite link.
2) File size is 2671 bytes.
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3. World EventsThis section spotlights some world events inwhich ISDN played an important role inproviding the press and broadcasters with high-speed digital transmission at economical costs.
The advent of ISDN with the property of a publicswitched network starts alleviating the burdenborn by the press and broadcasters in orderingthe installation of temporary internationaldigital leased circuits for world events.
The introduction of ISDN in these world eventsshows that ISDN is penetrating more and moreinto the marketing domain of digital leasedcircuits as it is proved that ISDN rivals leasedcircuits in quality.
Each subsection below details applications,performances and users' analysis of ISDN usage.
3.1 Albertville Winter Olympic Games inFrance from 8 to 23 Febr,-Ary, 1992
(1)Application for newspaper printing
It is quite important for newspaper cameramento send most up-to-minute pictures to meet thethe deadline requirement of each paper printing.
At the Albertville Games, eight-hour timedifference between France and Japan made itdifficult to send pictures of the opening ceremonyheld in the evening in France for the purpose ofprinting morning papers in Japan because aconventional telephone line takes too long timeto transmit. cpMuncell with the associatedequipment on ISDN solved the problem andbrought a success for Japanese newspapers incarrying vivid and clear pictures taken at theopening ceremony.
cpMuncell transmitted a numerous digitalpictures not only at the opening ceremony but atmany games for newspapers to Japan fromFrance. It enabled 20 minutes faster printingprocess per one picture than the case on a
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conventional telephone line. All the processfrom picture-taking with camera tointernational transmission to the editing andprinting at newspapers are digitalized and it hasprovided pictures with such a higher resolutionas that each one of the audience can be clearly
recognized.
Such big games like Olympics, games andcompetitions are held in many places. The
situation makes the use of leased circuits costlyand ISDN with the properties of a public circuitswitched network provides more economical,simple and convenient use of high speed digitalnetwork.
(2)Application for radio broadcasting
A radio station in Japan transmitted liveprograms of the Games by connecting studios atin France and in Tokyo. The equipment for thetransmission is 15Khz monaural audio codecs,inverse multiplexors to produce 128Kbpsbandwidth from 2 channels of 64Kbps switchedcircuit.
It provided such a high quality sound to listenersthat those who were accustomed to the soundwith 4Khz bandwidth complained that the soundfrom France was too clear as overseas sound.
One episode shows the property of ISDN asconvenience: the Japanese bronze medalist offigure skating, Miss Midori Ito had left hermusic tape for an exhibition skating. Sherealized the fact on the night before theexhibition game and asked the radio station totransmit the music from Japan to Albertville.The audio equipment on ISDN explained abovesaved her trouble and she played her exhibitionskating in her best conditions.
3.2 Munich Summit in Germany from 6 to 9July, 1992
A news agency in Japan introduced ISDN for thefirst time for their transmission system at such abig event.
In addition to conventional communicationsequipment, a full color still picture transmissionsystem and G4 facsimile on ISDN contributed totheir news releasing.
The full color still picture transmission systemreduced the necessary time to transmit picturesby 25% so that news correspondents were able tosend more pictures within a limited time by theirdeadline and it reduced the communicationscharges by 25% as well.
The G4 facsimile installed in Munich whichhandles B5 paper size, the standard size of thenews agency, came handy operations, and itreduced the transmission time to 10%. Thecapabilities provided faster and more economicalmeans of transmission of their manuscripts in annormal way of operation.
The news agency found the use of ISDN as asuccess and they intends to continue to use ISDNin conjunction with leased circuits. They haveconcluded that an appropriate combination ofthose two transmission means would providemost effective supports to correspondents.
3.3 Barcelona Summer Olympic Games inSpain from 26 July to 10 August, 1992
The ISDN international link which wasinaugurated in May, 1992 between Spain andJapan made possible the convenienttransmission of audio and video informationduring the Games.
A TV station in Japan introduced avideoconferencing for monitoring the programsactually aired on TV. Those programs actuallyaired on TV were selected and edited at the TVstation in Tokyo from many video programswhich correspondents gathered and transmited
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on the circuits for TV transmissions.Videoconferencing on ISDN has provided aneconomical means of monitoring actually airedTV programs for TV correspondents overseas.Though the images of ISDN videoconferencingdo not have equal quality to images on TV, theTV station was satisfied with the images onISDN because of the purpose.
4. The Network Expansion of 64KbpsCircuit Switched Network
KDD has been expanding ISDN networkinterconnections aggressively to the world. As
a result, the ISDN interconnections from Japanreach as many countries as the coverage ofinternational digital leased circuits. In 1994,ISDN expansion to Asian countries is expected togain more momentum.
The shifting of international signaling systemfrom TUP J to ISUP facilitates the use ofcooperative supplementary services betweencountries and meets the demands of highlysophisticated applications.
5. Close Cooperation with InternationalCarriers and Terminal Vendors tobetter meet Users' Demands
In order to meet users' demands and toencourage users to further introduce ISDN intotheir global communications networks,international carriers are required to provideusers with more application-orientedconsultation consisting of information not onlyon network but also on terminal equipment inboth domestic and foreign countries. To thisend, KDD has been making constant efforts inhaving closer cooperation with internationalcarriers and terminal vendors.
8 ."
TELCO VISION:DELIVERING DISTANCE EDUCATION
PAUL KUHAREDWIN J. SHIMIZU
GTE Telephone OperationsIrving, Texas
ABSTRACT
This paper discusses what the power of telecommunications in the 21st century can mean foreducation and the regulatory changes needed to unleash this power. GTE's perspective ofemerging telecommunications what we call "Telco Vision" is that we are experiencing aconvergence of technologies. Future telecommunications will combine characteristics of thetelephone, television and computer in essence, a "telecomputer." Connecting these tele-computers would be a nationwide public switched broadband network. This paper discusseshow regulatory roadblocks have slowed deployment of a switched broadband network acrossAmerica and delayed delivery of a wide variety of innovative video services, includingeducational applications.
1. INTRODUCTION
What role in education will telecommunicationsplay in the 21st century? If emerging trends con-tinue, telecommunications could well become anindispensable tool in the classroom of the future.
In this paper, we will describe:
GTE's vision of the future broadband network;
Regulatory considerations that affect deploy-ment of a broadband network by telephonecompanies; and
Innovative broadband services for education.
2. GTE'S "TELCO VISION"
Now, what is "Telco Vision"? It is our view ofwhat telecommunications will be like in the 21stcentury. Our perspective of emerging telecommu-nications is that we are experiencing a convergenceof technologies. Future telecommunications willcombine these characteristics:
The switching capability of the telephone;
The picture tube of the television; and
The data-crunching power of the computer.
You would have what futurist George Gilder calls a"telecomputer" or John Scully of Apple Computercalls a "smart TV." In the 21st century, you wouldfind a telecomputer sitting in virtually every class-room, office and living room across America
Rut what would connect these telecomputern? At
GTE, we envision a nationwide public switchedbroadband network to make the connections. Fromour perspective, the critical issue is not whethertelephone companies will deploy a broadbandnetwork, but when. Deployment of a broadbandnetwork is a virtual inevitability. It already makessense for telephone companies to use fiber optics intheir networks just to carry voice and data traffic.
In fact, the industry has been installing fiber opticssince 1977 and is increasing its use each year.According to Corning Industries, telephone com-panies had installed 1.4 million miles by the start of1991, about 73% of the fiber in America. And theindustry is investing about $20 billion annually incapital equipment.
But it will take another 40-50 years to fully deploy afiber-based broadband network founded on voiceand data use alone. That means America wouldnot have a switched broadband network until,perhaps, the year 2035.
We could cut this time in half if telephone compa-nies were allowed to provide video services. By theturn of the century, the market for cable TV, videorentals and pay-per-view entertainment is projectedto exceed $50 billion in annual revenues. Suchvideo revenues could help to underwrite the costsof deploying a broadband network. Under currentlaw, however, telephone companies are precludedfrom providing such video programming.
Accelerated deployment could mean a target date of2015 the same year targeted by some Japanesepolicymakers for a broadband network in JapanThe difference of some 20 years between thesedeployment dates represents lost opportunity forU.S. students, educators, consumers and businesses,
785:
(5 ;
when they could be enjoying innovative broadbandservices and a decisive edge in global competition.
Telco Vision is more than telephone companies be-coming just another species of cable TV operators.Using the analogy of an electronic mall, TelcoVision would lead to a full-service shopping center.This center could have several anchor tenants, suchas a telephone company programming entity, anindependent programmer, or even an existing cableTV operator.
The key to success of such a shopping mall is theexistence of an anchor tenant. A telephone com-pany programming entity would guarantee theexistence of such an anchor tenant. With such ananchor tenant, the financial prospects of the mallwould be enhanced. Revenue from transportingthe video programming of the programming entitywould help to pay for the telephone company'sbroadband network.
Because the telephone company's broadband net-work would be an open network, other specialty orniche programmers could be a part of the mall.And, a variety of government and social agenciescould also participate. Imagine these activities overa broadband network: taking foreign languageclasses, diagnosing patients with 3-D medicalimages, accessing movies on demand, renewing adriver's license or applying for a building permit.
The Telco Vision electronic mall can be the plat-form to offer an exciting array of diverse servicesthat are not widely available today. But as wewill discuss in the next section federal law cur-rently prohibits telephone companies from enter-ing the video programming business, thus delayingthe electronic-malling of America.
3. REGULATORY CONSIDERATIONS FOR THEBROADBAND HIGHWAY
What are the rules that govern telephone compa-nies in the United States in the video business andthe implications of federal policy on educationalapplications in telecommunications?
The Cable Act of 1984 generally prevents telephonecompanies from offering video programming ser-vices in the same areas where they provide tele-phone service. We believe this restriction hasslowed the deployment of a switched broadbandnetwork across America. And this has delayeddelivery of a wide variety of innovative videoservices, including educational applications.
Ever since they came into existence, the RegionalBell Operating Companies (RBOCs)'have had twohurdles to overcome to enter video programming
the Modified Final Judgment (MFJ) and theCable Act of 1984.
The MFJ prohibited the RBOCs from engaging ininformation services, which includes videoprogramming. However, in July 1991, U.S. DistrictCourt Judge Harold Greene lifted that prohibitionand allowed the RBOCs to enter informationservices. While that decision is under appeal, theRBOCs are free to offer information services, butnot video programming services.
In contrast with the RBOCs, independent telephonecompanies, such as GTE, have had just a singlehurdle to overcome the Cable Act.
For the past several years, GTE has been workingwith the United States Congress and the FederalCommunications Commission (FCC) in seekingrelief from this restriction.
Legislation amending the Cable Act was introducedin the 1991-92 congressional session to encouragecompetition in the cable TV industry by allowingtelephone company entry into video programming.Congress held public hearings on the bill, butdecided to hold the legislation. Lawmakers choseinstead to enact a measure on October 5, 1992, thatwould permit local governments to re-regulate thecable TV industry where meaningful competitiondoes not exist.
This complemented the FCC's July 16, 1992, action,when it came out in favor of "video dialtone" fortelephone companies to encourage a competitivevideo marketplace. In its order, the FCC clarifiedthe rules by which telephone companies couldtransport video programming of third-parties. TheFCC also allowed telephone companies to engage inrelated activities with programmers that werepreviously prohibited.
4. THE "VIDEO DIALTONE" CONCEPT
What is "video dialtone"? Simply put, video dial-tone is the transport and switching of video signals;it is not video programming.
As the FCC views it, video dialtone is a common-carrier service provided by telephone companies.The FCC recognizes that telephone companiesalready are transporting voice and data signals ontheir networks, as well as video signals by way ofchannel service for specific customers.
Moreover, new technology is blurring the linesbetween voice, data and video transmissions. Withfiber optics, each of these signals is in the form oflight pulses. Some pulse streams are digitallyencoded voices, while others are encoded still- ormotion-pictures. The FCC decided that as long asthe telephone company is carrying these signals on
common-carrier basis, the rules applied should beessentially the same
786
The common-carrier aspect of video dialtonemeans that any programmer can gain access to thetelephone company network at non-discriminatory,tariffed rates. And, the telephone company cannotexercise any control over programming carried onits network.
With a common-carrier approach, video dialtoneoffers programmers a direct pipeline to consumers.Programmers no longer need to convince cable TVoperators to carry their material; instead, they canreach their audience through video dialtone.
As part of its video dialtone ruling, the FCC alsodecided that telephone companies could provideancillary services and engage in cooperative ven-tures with cable operators and other video pro-grammers, including securing up to a five percentinterest in such entities. This will open up newopportunities for telephone companies to maketheir networks more useful and accommodating tovideo programmers.
But, the FCC's video dialtone order does not placetelephone companies into the video programmingbusiness. The Cable Act defines "programming" toinclude not only creation of content, but alsoscheduling and packaging program content createdby others.
Time will tell whether video dialtone alone will besufficient to deliver on the promises of TelcoVision.
5. THE FUTURE IS NOW AT CERRITOS
GTE is not just talking about the future ofAmerica's telecommunications networks; we areworking on delivering the future at a variety ofsites across the country.
Perhaps GTE's most visible success is our testbed inCerritos, California. This project began in 1988 andis scheduled to run through mid-1994, under awaiver granted by the FCC of its rules prohibitingany relationship between a telephone company anda programmer beyond a "carrier-customer." Earlier,the city of Cerritos had solicited proposals for anadvanced cable TV system. GTE and Apollo CableVision developed a proposal acceptable to the city.
In August 1991, GTE wired two schools in Cerritosthe Joe A. Gonsalves Elementary School and the
Benito Juarez Elementary School with fiberoptics and connected them to a broadband switchdeveloped by GTE Labs. Six teachers and 190students have been using several special features:
Full-motion videoconferencing All of the sixclassrooms have the ability to hold videoconfer-ences with each other. This allows a teacherwho is a specialist in one subject to teach several
787
classes simultaneously. Children in differentclasses also can interact with each other.
Video-on-demand Each teacher has access toa video-on-demand library of more than 200titles from the Greater Los Angeles SchoolDistrict catalog. Normally, teachers would haveto order a videotape and then wait days or evenweeks before getting delivery. Today, they cansimply punch-up the desired video when theyneed it and control it with VCR-like features ofpause, fast-forward and rewind.
Video microscope This allows a teacher toposition a specimen on a microscope and displayit on the television monitor. The teacher thencan discuss what is on the screen with the class,rather than taking the time for each student tolook at the specimen on a standard microscope.
Electronic tablet Teachers can highlightmaterial on the television monitor by writingcomments or drawing diagrams over videoimages. This technology is similar to that usedby sports announcers giving "chalk talks" ontelevision replays.
All of these features can be accessed through a user-friendly remote control developed by GTE Labs.Teachers do not have to be computer wizards ortechnology buffs. They do not have to manipulatea keyboard or even a mouse. All they have to do ispoint the remote control and punch a button.
To the teachers, this "point-and-punch" technologyis virtually invisible. But, the technology empow-ers teachers to accomplish more with their classes.They have embraced the technology, weaving itthrough their lessons. With the video-on-demandfeature, for example, teachers accessed more than300 titles in the first two months of the currentschool year.
Video-on-demand gives teachers control over pro-gramming. They can select just the segment theywant and show it to their classes when it makes themost sense in their lesson plans. In contrast, tradi-tional network or cable TV educational programsare broadcast at specific times. Teachers have toeither arrange their lessons around the broadcast ortape the program and show it when it is more con-venient.
One of the teachers, Ron Bridgette, confirmed thebenefits of this service: "Video-on-demand hasproven its worth in my classroom. It doesn'treplace me as a teacher, but it does make me moreeffective."
With the video technology, students are discover-ing that they are not confined by the walls of theirclassrooms. Much to their delight, they have accessto a wide range of outside resources. They can see
John F. Kennedy deliver his inaugural address,witness the launch of a space shuttle or follow themovements of a cursive handwriting expert. Withthe help of a broadband network, the televisionmonitor literally has become a video "window tothe world" for the classes.
Another Cerritos teacher, Betty Hyatt, observed,"This test brings everything that's available in theworld right into the classroom, and we can't affordto lose that."
To analyze the effects of the video technology onstudents, the Annenberg School for Communi-cations at the University of Southern California isconducting a study at Cerritos. This study willreflect the consequences of learning via video-on-demand, interactive lessons and distance learning.Results are expected in July 1993.
6. OTHER EDUCATIONAL VENTURES
GTE is not relying solely on Cerritos to determineeffective ways of delivering educational services.While the Cerritos testbed is our most publicizedproject, GTE is taking a variety of approaches indeveloping telecommunications solutions for edu-cational applications. Here is a sampling:
Westfield, Indiana On October 14, 1992, U.S.Secretary of Education Lamar Alexander presentedhis "A+ for Breaking the Mold" award to theWestfield-Washington School Corporation inIndiana for bringing high technology to the class-room. Working with GTE, Northern Telecom,Southwestern Communications, Dynacom, Steele& Associates, and Ball State University, the schoolcorporation installed computer and communica-tions technology to link three schools in the districtwith a total of 2,000 students through a fiber-opticnetwork, provide computer voice mail and set-upsatellite down links.
Now, each teacher has an individual voice mailbox.Teachers can send notes or homework by voicemail to students in the building or district, whileparents can leave detailed messages for teachers.
For video resources, each teacher can call up video-tapes, laser discs, CD discs and even satellite mate-rial on a television monitor that is connected to thedistrict technology center. The district also hasinstalled large-screen systems in cafeterias, gymsand large classrooms.
For data needs, each classroom is plugged into thedistrict network, allowing access to 'a central fileserver containing educational, productivity andschool administration software.
Athens, Ohio In 1992, GTE worked with OhioBell and the College of Education at Ohio Univer-
788
sity to build a fiber-optic network connecting theuniversity with three elementary schools insoutheast Ohio. This effort has been named theAppalachian Distance Learning Project.
One elementary school, Athens East, is just a fewmiles from the university. The others, IrontonWhitwell and Dawson-Bryant, are 120 miles awayon the Kentucky border. GTE installed the videomaster switch for the network at its Athens centraloffice.
The Appalachian Distance Learning Project createsa classroom with aspects of a television studio.Elementary students work in small groups andinteract with other children and teachers in distantclassrooms via two-way, broadcast-quality video.College students who hope to become teachersassist on-site, while their professors observe from astudio at the university.
A typical classroom is partitioned into learning cen-ters in which groups of five or six students work onscience, math, social studies or language arts pro-jects. Learning centers are equipped with cameras,monitors, microphones and personal computers.
Jennifer Hoffman, an Athens East teacher involvedin the project, said, "Children discover thingsthemselves and learn from their peers, not justfrom a teacher lecturing to them and then givingthem a test. The teachers are there as facilitators,but the students can take control of learning."
Lexington, Kentucky In 1991, the Universityof Kentucky began an ambitious project to install acompressed video digital network, linking themain campus with 14 community colleges dis-persed throughout the state. To date, four commu-nity colleges have been connected Paducah andOwensboro in the west and Ashland and Hazard inthe east. Helping to make it happen are GTE andSouth Central Bell.
The goal of the project is to bring doctoral pro-grams, medical training and other graduate-levelcourses to students in remote areas of the state.Andy Spears, associate director of media design andproduction for the university, noted, "The Councilon Higher Education, our governing body, man-dated that the University of Kentucky would creategraduate centers in the state. For the most part,n'e'z'e done so via compressed video."
Each site has one classroom equipped for distancelearning and is linked to other sites through dedi-cated digital video service. Each classroom has twovoice-activated cameras, one to focus on theinstructor or students and the other for visual aids.Also in each classroom are several 35-inch televi-sion monitors.
Steve Patton, director of information systems at the
,
University of Kentucky, said, "Interactivity is a crit-ical element of the learning process. At the gradu-ate level, exchange of ideas is as much a part oflearning as the standard lecture. Two-way videoraises the students' comfort level and allows theinstructor to read the faces of students at the distantlocation. At the same time, it gives students thefreedom to speak to the instructor as if they were inthe classroom."
The university also uses the network to offer non-credit classes in agriculture and continuing educa-tion courses in law and pharmacy. Universityadministrators routinely use it to meet via video.
Glen Rose, Texas In 1989, GTE installed fiberoptic cables, along with academic and data man-agement software, in the Glen Rose IndependentSchool District, connecting more than 400 personalcomputers and 100 printers.
The 1,400 students in elementary through highschool complete math, science, language and artlessons on computers located in labs and class-rooms. When students graduate, they will takewith them, not just a diploma, but also a portfolioon disk containing course work and school records.
Teachers and administrative staff can keep recordscurrent on these networked computers as needed,rather than waiting to have information input bythe school district. Martin Yarborough, technologydirector for the school district, said, "We werehiring temporaries to enter all the information byhand. We had to get all our eggs in one basket, tobring that information to the computer at onetime."
Instead of lunch money, students carry bar-codedidentification cards to their cafeterias. The foodservice director gathers food orders electronicallyfrom cafeteria managers at each school.
The football coach tracks weight-training schedulesand player statistics, teachers exchange electronicmail and students produce newsletters and the highschool yearbook on computers.
The bottom line is that these projects are helping torealize the promise of the broadband network.And, through these projects, GTE is working tomeet distance learning objectives identified byeducators throughout the United States.
7. W HAT DO EDUCATORS WANT FROMTELECOMMUNICATIONS?
In April 1992, the Roper Organization released theresults of a poll of leading policymakers and admin-istrators in education that was commissioned byGTE. Hai iy O'Neill, vice chairman of the RoperOrganization, said, "The survey shows widespread
789
endorsement by the academic community of anadvanced public telecommunications system and ofpublic policy changes that would make this systemavailable to all Americans."
The survey showed that 79% believe that a nation-wide, public, advanced fiber-optic communicationssystem should be made available for educationalapplications. The survey also showed that 79%favor legislation to create such a system. Regardingcompetition, 84% believe telephone companiesshould be allowed to provide advanced videoservices in competition with cable TV companies.
Educators also were asked to rate the importance ofvarious applications to the educational community,using a scale of zero to ten. "Zero" meant "not atall important," while "ten" meant "very impor-tant." All of the applications were rated high inimportance:
National interactive educational systems, wherestudents in rural areas could take classes fromurban colleges and all students could sample theunique offerings of various institutions. [Score:83]
Campus-wide interactive data networks linkingstudents' computers, classroom computers, thesecurity desk, the library, and other systems witheach other and with the school's central main-frame computer. [Score: 8.1]
Interactive "distance learning" systems, wherelectures are broadcast from campus to campus orto the homes of non-traditional students, suchas senior citizens, working professionals and thedisabled. [Score: 8.0]
Immediate access to up-to-the-minute researchfindings, rare documents and hard-to-locatejournals. (Score: 7.9]
Classroom teleconferencing available for the useof community public education systems, whereteachers, parents and administrators could con-duct video meetings. [Score: 7.1]
The findings of the Roper survey echo the policyrecommendations adopted at a national forum bythe United States Distance Learning Association(USDLA) in July 1991. Among these recommenda-tions are:
In order to accelerate and fult;11 the tremendouspotential of distance learning and educationaltechnology, federal, state and local governmentshould develop a vision for a national infra-structure, recognizing the critical importanceand interdependence of systemic educationalreform and advanced telecommunicationsservices.
C'
Recognizing that all forms of advanced tele-communications services are critical to support-ing distance learning and educational reform,federal, state and local government shouldfacilitate the development of a broadband educa-tional network utilizing the public networkwith an open system architecture and guaranteeequal access and governance responsibilities forall educational constituencies.
& LESSONS TO BE LEARNED
The educational projects across the country involv-ing GTE are demonstrating the value that tele-communications can add to t1-. classroom. But, thelimitation of these projects is that they areessentially private networks. Only those sites thatare specifically tied into the system have access.
Under a Telco Vision scenario, the entire countrywould be served by a public switched br,2f.bandnetwork. As noted above, the USDLA and others
REFERENCES
Cohen, Robert B., The Impact of Broadband Commu-nications on the U.S. Economy and on Competitiveness,Economic Strategy Institute, 1992.
Federal Communications Commission, Further Noticeof Proposed Rulemaking, First Report and Order, andSecond Further Notice of Inquiry, In the Matter ofTelephone Company-Cable Television Cross-OwnershipRules, CC Docket 87-266, Released November 22, 1991.
Federal Communications Commission, Second Reportand Order, Recommendation to Congress, and SecondFurther Notice of Proposed Rulemaking, In the Matterof Telephone Company-Cable Television Cross-Owner-ship Rules, CC Docket 87-266, Released August 14, 1992.
Gilder, George, Now or Never, Forbes, October 14, 1991,pp. 188-198.
GTE Telephone Operations, Going the Distance forLearning, Forum Magazine, Winter 1992.
GTE Telephone Operations, Cerritos Annual Report,March 31, 1992.
Roper Organization, New Health, Education ServicesResult of Advanced Phone System, survey of 200 educa-tion policymakers and administrators, April 21, 1992.
United States Distance Learning Association, NationalPolicy Recommendations, July 1991.
United States Telephone Association, Telecommuni-cations: The Vital Link to America's Future, 1991.
790
in the education community are strong proponentsof such a public network. Just about anyone couldget onto the system to interact with anyone elseHow the network is used whether for education,health care, entertainment, business would IN.up to the individual.
But, as we have previously discussed, the currentregulatory environment is slowing deployment ofan advanced broadband network. Clearly, changesto the Cable Act are needed to remove roadblocks toTelco Vision. In turn, Telco Vision would help toaccelerate delivery of innovative video services ineducation.
The challenge for policvmakers in Washington is totake the necessary action to accelerate deploymentof a broadband network, which can help in the dis-semination of knowledge through the nation AsDaniel J. Boorstin, Librarian of Congress, once said,"Knowledge is not simply another comniodity. Onthe contrary. Knowledge is never used up Itincreases by diffitsi,.n and grows by dispersion
AUTHORS
Paul Kuhar is Director - Federal Regulatory & IndustryRelations for GTE Telephone Operations, headquarteredin Irving, Texas. Kuhar is responsible for directing thedevelopment and advocacy of federal regulatory andindustry plans designed to achieve GTE's policyobjectives. Kuhar is a member of the United StatesDistance Learning Association and helped formulate theorganization's national policy recommendations at aforum in July 1991. He has a B.S. degree in Accountingfrom Pennsylvania State University and an M.B.A. fromCannon University.
Edwin j. Shimizu is Manager - Federal RegulatoryRelations on the headquarters staff for GTE TelephoneOperations in Irving, Texas. He executes advocacyprograms before the FCC, NARUC and other regulatoryforums. Prior to joining GTE in 1988, Shimizu served asVice President for Government Affairs for the Chamberof Commerce of Hawaii. He has a Juris Doctor from theUniversity of San Francisco and a B.A. degree in Englishfrom the University of Hawaii.
.1
HIGH-RELIABILITY IAN WITH NEW RAS FUNCTIONS
Takaaki Suga
Fujitsu Limited, Tokyo, Japan
Many Japanese factories, universities, and laboratories are
installing backbones for their key local area networks (LAN)
. Fujitsu makes MHLINK, a multimedia highway line network
with a transmission capacity of 400 Mops, and ?SLINK; both
conform to the international standards of FDDI (ISO 9314).
These LAN backbones were well received by users.
As LAN capacit increases and multimedia applications become
more common LAN reliability will become more important.
This paper introduces a highly reliable LAN system concept,
and discusses future large-capacity multimedia LANs.
1. LAN RELIABILITY REQUIREMENTS
In Japan, optical-loop LANs of the time division multiplex
type became popular in the first half of 1980s. They are
used as internal networks in factories and laboratories
where here are strong electromagnetic fields. Fujitsu has
installed more than 300 of its F2880 optical data highway
systems, ich are 8- and 33-Mbps optical loop LANs.
In the late 1980s, very-high-speed optical LANs appeared,
faster than 100 Mbps. Fujitsu has MHLINK, a 400-Mbps mult-
media LAN backbone, which now has many users.
Optical-loop LANs are used as general office systems, as
production and application development systems in large
factries, and as part of railway and expressway systems
where communication lines run outside. LANs for office
systemsshould be low cost and compact. For production
systems in factories and railway and expressway systems,
priority is given to reliability.
Below, we discuss LAN reliability requirements in various
environments.
(1) Large factory (see fig. 1.)
A large factory may contain many different systems, for
production control, operation, application development, and
in offices. There is a great deal of communication between
the host computer and the process computers and terminals at
work positions. A LAN is needed to connect the communi-
cation acilities, but a LAN failure, would directly affect
production and cause a costly holdup.
Large factories often use optical LANs to link private ex-
changes and remote units, used to connect remote extension
trunk 'nes. Video conference systems are becoming more
popular, and there is an increasing demand for image
communication.
Large factories would benefit from multimedia communications
for data, voice, image, and video. It is uneconomic and un-
wieldy, however, to have an independent LAN for each informa
tion type.
791
A LAN which integrates many media must meet the following
reliability requirements.
0 Prevent a fault in one device causing a system failure
A failure in the backbone LAN which integrates factory sys-
tems would be very costly. Such a failure must be prevented.
A system which has control functions assigned to nodes is
better than the centralized control system of a conventional
LAN. In a centralized control system, all nodes are con-
trol led by one supervisory node.
Minimize disruption during automatic recovery
A fault in the telephone system, which is lower priority
than the production system, must not affect production.
A new automatic recovery function is needed to avoid momen-
tary disconnection of all lines. Lines are momentarily dis-
connected in a conventional LAN when the automatic recovery
function is activated to fix loopback or other faults.
® Minimize the affect of system alterations
Like in CD, we cannot allow a change to the telephone system
to affect production and we need some mechanism to prevent
this happening.
® Prevent multiple faults causing a system failure
If the power supply to one node is disconnected for routine
maintenance, a fault at another node should not cause a sys-
tem failure. Communication between the working nodes must
be maintained even when the LAN connection is broken in two
places.
A LAN which satisfies the reliability requirements listed
here can be used to integrate an entire system with a back-
bone, without risking a complete system failure.
(2) Railway (See Figure 2.)
Railways are installing LANs as transmission lines for train
LAN property Conventional LAN Highly reliable LAN User needs
1
Internal
components
Only repeaters (E/0,
0/E) duplicated
Fully duplicated Duplicated node
components
( Railway l()
2
Supervisory node Centralized contr
system with a super-
visory node
Receive select system
with no supervisory node
Avoiding system
failure
(Large factory if
3
Influence of
optical loop
fault
Momentary disconnection
of all lines by optical
loop switching
Disruption avoided by
receive select system
Minimized influ-
ence of automatic
recovery
(Large factory z®)
4
Influence of
node fault
Influence of node fault Momentary disconnection
of all lines by loopback
Minimized influ-
ence of automatic
recovery
5
Momentary dis-
connection by
RAS function
Communication disconne-
ction of several seconds
when optical loop is
switched or loopback is
executed, or of more
than 10 seconds when a
duplicated supervisory
node is switched
Full switching after a
momentary disconne econd
or less
Minimized line
disconnection time
(Railway())
6
Influence of
dou'l fault
Renders unusable a node
physically disconnected
from the supervisory node
Normal functioning of
non-faulty nodes
That multiple fault
do not cause a
system failure
(Large factory®)
7
Monitoring Monitors connection to
supervisory node only
Monitors connection to
any node
Several monitors
(Railway 3)
8
Influence of
node addition
Momentary disconnection
by loopback
Disruption avoided by
receive select system
Minimized influence
of system
alteration
(Large factory())
t.792
service control, power control, and railway telephones.
Optical cables are immune to electron gnetic interference.
and long-distance transmission is possible without repeaters
Since reliability requirements forlarge factories are simi-
lar to those for railway LANs, only additional requirements
are listed here.
QD Duplexing node components
Because of the importance ofsafety. components in each LAN
node must be duplexed.
CD Minimize the line disconnection time
A railway service control systemchecks train locations at
very short intervals. Even a momentary power failure caused
by a LAN fault may paralyze the service control system. If
there is a fault, the system must be switched immediately to
a spare one.
CD Have several monitors
In a railway system, the parent facilities for train serv-
ices, remote power, and telephone control may be distributed
between several locations. Because these management func-
tions are distributed, LAN supervision may also have to be
distributed. It is desirable that more than one LAN monitor
can be installed, and can be connected to any node.
-2. HIGHLY RELIABLE LAN SYSTEM
This section compares the reliability, availability, and
serviceability (RAS) functions of a conceptual highly
reliable LAN with those of a conventional LAN. We show how
a LAN can meet the seven requirements above.
(A conventional LAN means Fujitsu's F2880-series and MHLINK)
(1) Receive select system
A conventional optical-loop LAN has a supervisory node for
each single, or double in a duplex configuration, system
which controls and supervises the entire LAN. This is call-
ed centralized control.
Current and spare optical loops are clearly distinguished in
a conventional LAN. Usually, all lines use the current op-
tical loop.
As fig. 3 shows, if the supervisory node detects a fault in
the current optical loop, it instructs all nodes to switch
to the spare optical loop.
This loop switching causes a momentary line disconnection.
We propose the receive select system for our high-reliabil-
ity LAN.
In fig. 4, terminal node A transmits data to the terminal at
node C simultaneously in two directions, through clockwise
and counterclockwise optical loops. Sender A adds monitor
signals to data at transmission time. Receiver C reads the
monitor signals received through the clockwise and counter-
clockwise loops an uses them to select a working channel.
In fig. 4, the monitor signal received through the clockwise
loop is abnormal. Communication can be restored simply by
switching to the counterclockwise loop. If the interface
switch is already set to the counterclockwise loop, there
is no need to change the switch setting. Communication is
completely unaffected.
(2) Node fault processing
In fig. 5, node B is faulty. In a conventional LAN. all
nodes loop signals back together when instructed to do so by
the supervisory node (fig. 4). This momentarily stops com-
munication in all lines.
In our high-reliability IAN, if there is a fault at node B,
only the interface switch needs to be operated to restore
communication. If the interface switch at terminal C is
already set to counterclockwise loop, communication will be
unaffected by a fault at node B (fig. 4).
(3) Multiple faults
Multiple faults are assumed in the conventional LAN in fig.
7. The node disconnected from the supervisory node can no
longer communicate because only the supervisory node can
create communication frames.
The highly reliable LAN, however, can maintain communication
within the physically connected range, despite multiple
faults (fig. 8). This is because the LAN has no super-
visory node and each node can create communication frames
independently.
(4) Internal block
Fig. 9 is a block diagram of the highly reliable LAN. The i
nternal components are all duplicated.
3. COMPARISON OF RAS FUNCTIONS
The table below compares the RAS functions of the conven
tional optical LAN and of the highly reliable LAN. The"User
needs" column shows the corresponding reliability require-
ments of large factories and railways described in the pre-
vious sections.
4. FUTURE TOPICS FOR HIGH-RELIABILITY LANS
In future, there will be more kinds of information communi-
cation systems and capacity will increase.
The need for multimedia communication is accelerating LAN
development and highly reliable LANs are essential to multi-
media applications.
Below, we discuss the outlook for highly reliable LANs for
multimedia communications.
(1) Multimedia services
In Japan, multimedia communications began as integrating
many media, including data, voice, image, and video, on a
single transmission line. This idea of multimedia has,
however, always been an environment where people can fetch,
process, and transmit information of any.form.
Multimedia LANs should provide transmission lines, and also
link host computers, multimedia personal computers, and
display equipment.
As an example, consider image processing services on a
multi-media LAN.
Dynamic image services can be divided into those which
require realtime processing, and those that do not. Realtime
,793 6,.;<3
processing is not usually needed for services such as
dynamic image mail and retrieving images from a database.
Dynamic images are generally compressed by a workstation or
personal computer when they are transmitted through a LAN.
Video conferencing, videophone, and other communication that
uses dynamic images requires realtime processing (fig. 10).
To provide these services, a LAN must have a low-cost codec
function which compresses images and support internal image
exchange.
An image exchange service will enable efficient use of the
transmission area and extend LAN applications. If the LAN
can only transmit images on fixed basis, a dedicated
path must be provided for all communication and the LAN is
always completely occupied. If the LAN has an internal image
exchange service, the number of lines simultaneously
available may be limited, but, free exchange of images bet-
ween any two parties will be possible. This will realize the
services in fig. 10.
Image exchange in a LAN has the following two technical
requirements:
1) Visual equipment haildling dynamic images must be able to
specify a communication party to the LAN. The equipment must
,therefore, be free to change the address of a communication
party in the LAN.
2) A backbone LAN handles dynamic images and also data and
voice. This means the LAN must be flexible enough to cope wi
with large changes in the transmission capacity. Dividing
the transmission area in the LAN into each information type
is nefficient equipment handling visual information must be
able to secure the transmission area in the LAN it needs for
image communication.
A standard protocol is required for communication between
the LAN and any multimedia equipment that may be connected.
It must, therefore, be possible to control equipment from
the LAN.
(2) Very-high-speed processing
As multimedia becomes more popular and image communication
needs grow, faster LANs will be developed. The Synchronous
Digital Hierarchy (SDH) standard recommended for multiplexed
transmission will be a key technology.
150 Mbps, 600 Mbps, and 2.4 Gbps LANs can be connected in
ahierarchical structure if they support an optical trans-
mission interface which conforms to SDH. It will also be
possible to make these LANs compatible with B-ISDN.
Fujitsu is developing the kind of highly reliable LANs
described in this paper, staying at the forefront of pro-
viding multimedia services.
( .
794 C''.,t)
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795
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Node F
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Rpm I Multiple faults m highly reGabk LAN
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Flgtra 9 Block diagram of a highly reliabic LAN
(ay) N:tsrnIching(one-channel erne slot in loop) (Private CATV) N.N Infoadcam(reccnve channel selecuon)
(Video conference rx videophone)1:11sicirectional switching
(Remote lecure) I tiswitching(switching when there are severalsources at many points)
Figure 10 Image exchange services on a multimedia LAN
796
The Customer in Product Development: A Marketing Perspective
Noe lia GordonProduct Management
AT&T Submarine Systems, Inc.Morristown, New JerseyUnited States of America
ABSTRACT
Although the development of telecommunications products is a highly technical activity, technologyalone is not enough to satisfy customer demands. The research and development resources of AT&TSubmarine Systems, inc. (SSI) have combined with marketing to create a series of products whichsatisfy customers' varied requirements. This paper will show the process in which SSI matchesaproduct to the market by focusing on customer demands. It covers the evolution of fiber opticsubmarine cable technology beginning with S1280 through today's diverse product offerings: SL100,SL560, and SL2000 cable systems.
Introduction
Conventional wisdom provides the long-held view ofmarketing as a business activity which identifiescustomers' needs and then sets about to satisfy thoseneeds. The problem with this view is that it is fairly one-sided and simplistic. Although it properly describesmarketing as a product development function, it oversimplifies the process. It presumes that needs areuniformly consistent and identifiable. It further presumesthat the entity performing these marketing functions hasthe resources required to devise a solution capable ofsatisfying those identified needs. Finally, it makes thecustomer a passive agent in the process, with all of theproduct development activity centered around thevendor.One can see businesses following this conventionalwisdom every day. In periods of economic recession,such as this, fewer businesses are actually following thispractice, because its flaws can lead to business failure.Even if needs were so easily identifiable and static, fewvendors have the resources to develop a productsolution that will truly satisfy those needs. Instead ofdeveloping products for their customers, they offercustomers the products they happen to have available.One result of this approach to the marketplace is theniche solution. Niche vendors are challenged to findcustomers with needs that match their solutions. A morecommon approach is to try to convince the customer thata vendor's available solution will satisfy a need whetherit does or not. This approach leaves opportunities forcompetitors to try to come closer to the mark.
AT&T's experiences depict a marketplace that is farmore dynamic, multi-faceted, and sophisticated thantraditional wisdom allows. Instead of a one-waymovement from the vendor to the customer, we find thatproduct development is a relationship in which thecustomer becomes intimately involved. True satisfactionof customer needs requires more than a slogan aboutbeing committed to customer satisfaction. It recognizesthe necessity of a continuing dialogue with customersduring development and it requires having a breath ofresources and expertise available to offer products thatactually meet customer needs.
797
Effective product development to satisfy customer needsrequires the willingness to include the customer as aparticipant in the product development process. SSIhas found that it is the dedication to work with customersduring development as much as the technical resourcesthat has given the company a competitive edge inproduct development. The benefit of customerinvolvement in the beginning stages of productdevelopment is evidenced by a steady evolution of fiberoptic submarine cable systems across a spectrum offeature capabilities.
Although the newer developments maybe moretechnologically advanced, the succeeding products donot necessarily make their predecessors obsolete.Rather, they expand and shift the spectrum in such ways
as to give customers more choices. As the productspectrum expands, so does the marketplace. Thebreadth of AT&T's product line opens the door ofopportunity to telecommunications service providers that
have never operated submarine cable systems before.These customers will use submarine cable technology in
new ways to expand their own ability to provide servicesin the areas ranging from local phone service to broad
band digital capabilities.
SL2000 is the first AT&T SSI product to be developedfully with the customer as a dynamic partner in theprocess. SL2000 pushes the technology envelopefarther out in terms of expanded capabilities with lessmaintenance and eventually lower operating costs.However, SL2000 does not make its predecessorsobsolete. Rather, it responds to specific customerdemands. SSI's experiences with customer involvementshares a significant responsibility for expanding ourproduct spectrum.
0 , J
How Needs Evolve Into Demands
In approaching product development, SSI realized earlythat a more sophisticated understanding of customerwants, needs, and demands was required. Philip Kotler,world-renowned expert in the area of marketing andcustomer satisfaction, provides an interesting insight intothe dynamics that lead to customer demands:
A human need is a state of felt deprivation ofsome basic satisfaction; wants are desires forspecific satisfiers of these deeper needs;demands are wants for specific products that arebacked up by the ability and willingness to buythem.Kotler simplifies this observation by saying that"wants become demands when backed up bypurchasing power."
Based on Kotler's explanations, SSI recognized that wecould fulfill requirements with real products only whenthe customer's needs evolved into real demands. To putourselves in a position to offer a product solution whenthe customer reached the point of demand requireddeveloping a strategy to translate the customer's needsinto wants and wants into real demands. Obviously, bydirectly engaging the customer in the productdevelopment process, the customer's realization of ademand also coincides with the availability of the productspecifically to satisfy that demand. In other words,purchase decisions are made when customer needsevolve together with product development. The bottomline measurement of success for this philosophy is SSI'scurrent inventory of orders valued in excess of $1.0billion (US). Moreover, that inventory of orders includesproducts serving the entire spectrum of customerneeds.
Talking With Customers
SSI's success in developing products serving thesubmarine cable market comes after many years oftalking directly with customers and studying theirbusiness goals. A critical aspect of this process involvedpaying continuing attention to the customers' needsrather than to just the products and services we had tooffer. SSI appreciated the imperative to understand thecustomer's view point in order to compete successfully ina global marketplace. Looking at the marketplacecritically, we discovered that it is really a diversecollection of many smaller markets, each requiringunique products to satisfy its needs. To becomerecognized as a global telecommunications provider. itwas very important to develop a group of diverseproducts. One product cannot satisfy the totalmarketplace.
L798
We looked at each customers' characteristics andvarious stages of development and sought wherecommunities of interest lie. Segmenting this universe intocommon communities of interest helped simplify themarket development task. In addition to talking directlywith our customers, we also took advantage of traditionalresearch techniques to identify common bonds ofinterest among different customers. The researchincluded analyzing trade journals, news releases, salesforce debriefings, and customer interviews. We identifiedcurrent and potential customers for transoceanic,regional, inter-regional, and national cable systems.As we identified gaps in current product capabilities. we
simultaneously identified opportunities to develop newproducts to fill those gaps. The results include expandingour fiber optic submarine cable products from ouroriginal SL280 base to a complete line of systems:SL100, SL560, and SL2000.
Expanding the Marketplace
AT&T's traditional submarine cable systems marketcomprises those administrations and entities that havealways provided submarine cable service, beginning withthe early days of coaxial cables. They began to deployfiber optic submarine cable systems a decade ago. Backthen, AT&T's SL280 product was the first and remains abenchmark for quality and service. A key concept thatwe address is the customers' need for connectivity to theglobal network. During the last few years, themarketplace for submarine cable systems has expandedrapidly as more national telecommunications providersseek access to the global network through national andregional submarine systems. Market research showsthat more money will be spent on improvingtelecommunications infrastructure in the next ten yearsthan in the last hundred years combined. Researcherssuggest this investment will reach $200 billion (US) bythe year 2000.
Newcomers to the submarine cable systemsmarketplace have slightly different priorities thanestablished customers. Although each customer has itsown unique set of priorities, the following requirementsaddressed these issues:
Price Although every customer is sensitive tothe price they pay for equipment and services, the costsof submarine cable systems have reached a level wherethis market pays more attention to questions of value.
Reliability For experienced operators ofsubmarine systems, demonstrated reliability is measuredin terms of both system availability as well as inmaintenance costs.
On-Time Delivery The revenue-drivenaspects of this business elevate the importance of thevendor's ability to meet the date when the system isscheduled for service. Every days delay meansthousands of dollars in lost revenue opportunities.
Shorter Delivery Cycle This requirement isalso revenue driven. Rather than a three-year cycle fromcontract to installation. customers want to cut this to oneand a-one-half years In April 1992. AT&T was able to
pull together its vast internal engineering. installation,and technical support resources to install TAT 10, aSL560 transatlantic link between the United States andGermany system, in less than 30 days. Not only fast, theinstallation was also flawless.
System Performance Error-freetransmissions also impact revenues. Therefore, mostsystem tenders include stringent performancerequirements measured in bit-error rates.
World-class Resources
As noted earlier, SSI recognized long ago that one of thekey ingredients to being able to continuously meetcustomers emerging and evolving need for sophisticatedfiber optic submarine cable based products was a richmix of resources and expertise:
Partnership Tradition Until 1984, AT&T'sprimary customers for telecommunications equipmentand services were within the AT&T family. It was routineto talk with one another about needs and requirements.Therefore, our traditional corporate culture developed asone of cooperation and partnership. It remains one ofthe pillars of how we do business today. We take thispractice to the point of reviewing where our customersmay identify gaps in their expectations of SSI, even if aproject goes to a different vendor.
World-class Experience SSI has theadvantage of being part of the largest and mostexperienced operator of telecommunication networks.Many of the technologies that evolved into internationalor industry standards originated in AT&T's operatingnetworks. More than a century of global experiencegives us a unique perspective and enables SSI to relatesubmarine cable systems to the larger networkimplications. We can easily understand our cusximer'sneeds from a operator's point of view.
Comprehensive Technology Base AT&Tdevelops, manufacturers, installs, maintains, andoperates every aspect of telecommunicationstechnology. Although we are at the forefront of opensystems and multi-vendor initiatives, we are capable ofdelivering every piece of a submarine system from theinterface with the national network to the transmissionequipment. the operations. systems, and the cables.This means that we can help customers developcomplete systems tailored precisely to their needswithout compromising either the technology or thestandards.
Turnkey Services From idea to operations,AT&T SSI is capable of providing it all. Comprehensiveservices include engineering, design, delivery,installation. training. operations, and maintenance. Forcustomers new to submarine systems ownership andoperations, the availability of turnkey services andplanning support is very appealing. For others, AT&Tprovides the confidence that we can work with theirteam, supplementing their resources with those of ourown.
AT&T Bell Laboratories When we speak ofunique resources. none are more widely recognized andappreciated than AT&T Bell Laboratories. Many vendorshave fine research and development capabilities. The
element that distinguishes Bell Laboratories is a level ofbasic research comparable to that sponsored by nationalgovernments. This is the only industrial research anddevelopment organization to boast seven Nobellaureates.
Many competitors in the information movement andmanagement industry do not have this breadth ofresources available. Developing, building, installing,operating, and maintaining submarine cable systems isbeyond the scope of many telecommunications vendors.Many vendors can offer pieces of a solution only.Submarine cable systems require a breadth of expertiselimited to a handful of companies around the world. Evenamong the world leaders, few compare with AT&T inavailable resources. However, sometimes what theothers may lack internally can be acquired through jointventures and creative partnerships. The one resourcethat others cannot acquire is the technologicalleadership of Bell Laboratories.
Choices AT&T's Breadth of Products
AT&T's product development efforts began more than adecade ago when we realized that to meet the marketrequirements for higher quality, higher capacity andmore economical long haul transmission systems,analog coaxial cables had to be replaced with fiber opticundersea facilities. Our SL280 was introduced in the1980's as the first fiber optic light wave system capableof transmitting up to 20,000 voice circuits per fiber pair. Itis from this foundation that we have engaged ourcustomers in further advances in light wave technology.The next major development was the introduction ofSL560, an optical fiber based system capable of carryingup to 40,000 voice circuits per fiber pair. SL560represents a fundamental advance in quality andperformance in addition to its expanded capacity. Withappropriate multiplexing technology, its capacity can befurther extended to 80,000 circuits. This system usesproven design techniques with a robust operationscapability that includes automated surveillance controland maintenance systems as well as equipmentredundancy. The first SL560 system is TAT 9, which wasinstalled in 1991 and went into service in 1992. Thistechnology will continue to serve as a proven, reliablework-horse in systems around the world for many yearsto come.
With some newer customers, we have identified anemerging need for non-repeaiered systems as thepreferred telecommunications medium for shorter haulsystems. Non-repeatered systems are ideal formainland-to-island, festoons of coastal loops, island-to-island, and river, bay, or lake crossings. Theseapplications, which are growing in importance all aroundthe world can provide national connectivity to a regionalsystem. AT&T's SL100 is a non-repeatered system thatdelivers tremendous flexibility at a very attractive cost.Without the need for repeaters, the terminal equipmentbecomes the key determinant of bandwidth. Once theundersea plant is installed, the system is capable ofoperating at a variety bit rates. This is especially ideal forapplications that must start small and that can grow asrequirements grow.
.
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Building on this experience in customer-based productdevelopment, AT&T SSI fully engaged ourunderstanding of customer demands for reliability andperformance in the development of the SL2000 product.This system has advanced reliability features that alsolead to lower operating and per-circuit costs. TheSL2000 system takes advantage of optical amplificationtechnology. This advancement eliminates the need toconvert the optical signal to electronic and back tooptical again at repeater sites. This results in highquality and reliability, because fewer components arerequired at each repeater location. AT&T's amplifiertechnology can span distances of up to 9,000kilometers. Capable of transmitting at 5.0 gigabits persecond, SL2000 will offer up to 300,000 voice circuitsper fiber pair using the appropriate multiplexing
equipment. This system also supports CCITT-Synchronous Digital Hierarchy (SDH) standardcapabilities, including end-to-end surveillance and linemonitoring. As part of the customer-driven developmentof this product, a comprehensive installation processassures on-time delivery of a fully-testedsystem thatperforms as required from day one.
The first SL2000 system will go into service in 1994.However, SSI will not wait that long to know how thisnew product will perform in service. Part of thedevelopment process includes constructing an actual9000 km model consisting of fiber and electronics todemonstrate, not simulate, optical transmissionperformance at 5 gigabits per second. This test bedsystem has been operating for several months.
Summary
These products, SL100, SL560 and SL2000 are end toend system solutions that respond directly to customersproblems. More than technological solutions, theseproducts represent total response to customersdemands- turnkey solutions for which SSI assumes fullresponsibility for manufacturing, assembly, construction,testing, and maintenance. Responding totally tocustomer demands is fundamental to a corporate wideAT&T commitment to quality. SSI follows thiscommitment through the use of multiple measurementsto tell us how well we respond, from customer interviewsto Malcolm Baldridge National Quality Awardmeasurements process. The ultimate measure of oursuccess is that two of AT&T's business units,Transmission Systems and American Transtech, wonthe Malcolm Baldridge National Quality Award in 1992an absolutely unheard of feat that has earned nationalrecognition for our unparalleled devotion to customersatisfaction.
ReferencesKotler, Philip, Marketing ManagementAnalysis,Planning, Implementing and Control
800 G -;
1993 Pacific Telecommunications ConferenceSession 4.2.6.1
The Technology-Human Factor RelationshipDonald M.Lamberton
Urban Research Program, Research School of Social Sciences, Australian National University,Canberra and CIRCIT, Melbourne
ABSTRACT
In the adaptation of telecommunications technology to societal applications, the importanceof 'technology push' in both the rapid development of telecommunications and relatedinformation technology and their diffusion nationally and internationally, receives someacknowledgement. However, the neglect of the demand side is seldom mentioned. Threeinterrelated aspects are explored in this paper. First, the nature of demand forinformation as opposed to IT; second, the complementarity between new technology and humanand organizational resources; and, third, the need to combine the 'technology push' supplyside aspects with demand considerations in the context of a theory of economic growth. Inthis way some progress can be made in clarifying major claims made for telecommunicationstechnology; namely, that it makes a significant contribution to economic growth and thatthere is an equitable sharing of the benefits of the Information Age. The dominance oftechnology in analysis has led to policies and resource allocations that inhibit thebenefits of investment in IT. All too often problems arising from neglect of the basiccomplementarity between human and organizational resources and technology are viewed asmerely roadblocks on the way to the technological utopia roadblocks that can be removedat low or even zero cost. Analysis, policy formulation, and their supporting researchagenda are in need of substantial revision.
1945 WAS A GOOD VINTAGEWe need historical perspective on theway these processes are conceptualized,on the 'pushes' and 'pulls' that areinvolved. For information society buffsand especially IT ones, 1945 was a goodvintage, even if few had the vision totake full advantage of the mix of richperceptions that were on offer. Forexample:(i) Arthur Clarke's paper, "Extra-Terrestrial Relays Can Rocket StationsGive World-wide Coverage?", waspublished in Wireless World (1),showing that satellite communicationwas possible. There were, of course,the inevitable denials by 'experts' butthe first satellite of the 19603 was togrow in size, complexity and output.Diffusion of the new technologygenerated great expectations andprobably did more than anything else tofoster 'the global' myth;
(ii) Hayek's "The Use of Knowledge inSociety" had appeared the previousmonth (2). I think someone describedHayek as "the most intellectualdefender of capitalism" and that essay,a significant milestone on the road todevelopment of information economics,was a defence of the market system, forhe attributed to that system thecapability of handling the use ofknowledge in society.
(iii) Mid-1945 Vannevar Bush sprung thenotion of information overload upon usin his paper, "As We May Think":
There is a growing mountain ofresearch. But there is increasedevidence that we are being boggeddown today as specialization extends.The investigator is staggered by thefindings and conclusions of thousandsof other workers - conclusions whichhe cannot find time to grasp, muchless to remember, as they appear. Yet
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specialization becomes increasinglynecessary for progress, and theeffort to bridge between disciplinescorrespondingly superficial. Thedifficulty seems to be, not so muchthat we publish unduly in view of theextent and variety of present-dayinterests, but rather thatpublication has been extended farbeyond our present ability to makereal use of the records (3).
Bush's solution was a "memex": "a sortof mechanized private file and library",storing all the individual's "books,records, and communications", whichcould be consulted "with exceeding speedand flexibility-an enlarged intimatesupplement to his memory" (4).
So half a century ago there were:Technological foresight coupled withoptimism about the development ofcommunication technologies;
A seeming reconciliation of thiskind of technological change withthe basic market model on whichWestern societies were operated; and
Promise that the new technologiescould be harnessed to serve science,through new specializations and theindustrialization of informationprocessing and research activity.
I do not need to stress the unresolvednature of the debate about the possibleoutcomes from this interacting set offorces. I believe it helpful to thinkin terms of 'technology push' and'demand pull'(5). No doubt there is anelement of each whenever technologicalinnovation takes place. Modern times,however, seem to have witnessed thedominance of 'technology push', to theneglect of the human factor, perhapsespecially in the case of communications
C)
technology but also in, for example,medicine.
Consider a recent occasion: the Geneva1991 World Telecommunication Exhibitionand Forum, the latest in a 20-yearseries reflecting the growth of thetelecommunications industry. Howsuccessful was Telecom 91? Theorganizers judged success in terms ofthe number of visitors; the total amountspent on exhibits, travel, entertainmentand other expenses ( i.e., more than SUS0.5 bn); the presence of the "stars ofthe industry" (i.e., 1,000 ministers,chairmen and other top officials); andthe conduct of business "at a dizzyingpace"(6). But even the Telecom 91 Dailycould see a down side: the conferencewould be remembered "for its inattentionto the needs of developing nations", theabsence of a "clear theme", and the"technical pornography"(1).
This major event was directed towards"An interconnected world: improving thequality of life for all"(8). I wasreminded of the Du Pont slogan: "Betterthings for better living...throughchemistry". The Du Pont painting for the1939 World's Fair, now hanging in thecompany lobby in Wilmington, Delaware,made very clear that the better livingwas "for all", the poor and downtroddencoming on stage from the left aretransformed into a happy, enlargedfamily with a basket of goodies movingoff to the right. Of course,telecommunications is spoken of as abenign technology when compared with DuPont products, which included blackpowder, dynamite, management servicesfor the Manhattan Project,tetraethyllead, and CFCs, so creating "amerchant of death image" (9).
Perhaps it is as well to remember thatDu Pont and nearly everyone else usestelephones and the associated IT, beforebeing swept up by the Telecom 91 "visionfor a Borderless Planet" promoted inGeneva. After all, 15 per cent of theworld population has access to 85 percent of telecommunication services andtwo thirds of that population have notelephone services available (10).
We find much the same mix of 'technologypush' and neglect of equityconsiderations if we look to the futurewith the cyberspace experts. The worldthey contemplate and seek does not yetexist; it is the ultimate human-computerinterface - a world behind the computerscreen as magical and marvellous as theone Alice discovered behind her lookingglass. It gives access to "vast databases that constitute the culture'sdeposited wealth, every document isavailable, every recording is playable,and every picture is viewable"(11).This is 'technology push' in theextreme. There are no economicconstraints in a "harsh, nightmarish","man-made information jungle"(12).There is an added Orwellian threat:"With the thrill of free acess tounlimited corridors of information comesthe complementary threat of total
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organization"(13). Of course, the PVws(Personal Virtual Workplaces) and CVWs(Corporate Virtual Workplaces), oncloser scrutiny, bear quite aresemblance to Bush's memex.
THE DEMAND FOR INFORMATIONLet me turn to the first of theinterrelated aspects I wish to introduce- the demand for information.Developments in information economicshave focussed attention on thecharacteristics of information, in sharpcontrast to mainstream economics whichwas somehow able to transformuncertainty into a perfect certaintyequivalent. Now we try to unbundle theuncertainty, to look at the variouscharacteristics: receiving the desiredinformation at the time required, in thebriefest form and in order ofimportance, with necessary auxiliaryinformation, all with the reliabilityand sources indicated. The effort orcost should be minimized. The processshould not be cluttered with unwantedmaterial. And finally, no responseshould, in an ideal information system,mean very definitely that it doesn'texist. This list dates back to the1950s (14).
There are further complications to thenotion of rational use of information.Choice theory favours optimization whilesatisficing theory recognizes the limitsto information and sees optimization asimpossible. These approaches have incommon the good and effective use ofinformation. We must also allow thepossibility that decision-makers fallinto error: they may fail to select thecorrect action even when the messagesare appropriate; and they may respond tothe wrong information. The influence oftheir experience, of their attitudes,must be added to such factors astransactions costs, search costs, andasymmetries (15) .
HUMAN AND ORGANIZATIONAL RESOURCESNot only do decision-makers havehistories, they also exist in anorganizational context, or rather manyorganizational contexts family,workplace, community, State, etc. Eachbrings to a decision the learning andskills of experience; each operates inan organizational context. This canlead to the Kenneth Arrow argument that"the combination of uncertainty,indivisibility, and capital intensityassociated with information channels andtheir use imply (a) that the actualstructure and behavior of anorganization may depend heavily uponrandom events, in other words onhistory, and (b) the very pursuit ofefficiency may lead to rigidity andunresponsiveness to further change"(16).In effect, Arrow is providing aneconomist's version of cognitivedissonance (17).
TECHNOLOGY, THE HUMAN FACTOR AND GROWTHTHEORY
1 am trying to contrast thetechnological utopias with an emphasisupon human and organizational resources.
What is needed is recognition that theseinputs are complementary; and thatrecognition can come, I believe, from anunderstanding of the economic growthcontext.
It is fashionable to assigntelecommunications a leading role ineconomic growth. The new systems enablerap.i.d and flexible adjustment tochanging market conditions; coordinationis improved and extended; everyone canoperate globally - whatever they takethat to mean. While the multipliereffects of telecommunicationsexpenditures are comparatively small,those effects are spread widely throughbackward and forward linkages; scale,scope, growth and network economies areachieved; greater expectations aregenerated; competitive edge is conferred
although Schumpeterian imitators mightbe quickly off the mark to erode theprofits.
More generally, so the argument goes,cheap and easy communication helpscreate wealth. 19th-century towns grewaround railway stations; 20th-centuryones need good, cheap telephone service.Information flow around the world isitself part of trade, and a means oftrading. Even investment is moredifficult with poor phone service.Reasoning like this, despite its appealto many actors in the telecommunicationsindustries and to many of thoseresponsible for policy matters, stillneeds to be put into the context of atheory of economic growth.
The mystery of economic growth is,according to a recent article in TheEconomist (18) about to be solved. Anew orthodoxy stemming from the work ofPaul Romer and like-minded thinkers issaid to be discernible. To theneoclassical theory's capital and labourhas now been added another factor ofproduction: knowledge. This is said tobe yielding more plausible conclusions.Knowledge can raise the return oninvestment, but like the acquisition ofother productive assets, there arecosts. Because knowledge is productive,success can fund further investment inknowledge creation which in turn canmake further investment more productive.This purported breakthrough might comeas a surprise to those familiar with thework of the pioneers of informationeconomics, who analyzed the role ofinformation in decision-making andgrowth. Certainly their efforts havelinked information with organization-with Arrow's information channels- andthis plays a vital part in growth. Therole of knowledge has been recognizedfor a long, long time but we haveneglected the interaction betweenknowledge and economic activity.Knowledge must be operative; there mustbe capability of using knowledge foridentified ends; technology must becomplemented by human and organizationalresources (19).
It looks as if we have identified thebuilding blocks: organizational capital,
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incentive structures, stocks and flowsof information. But we have been contentto give the design prize fororganizational form to the "market",despite the importance of what goes oninside organizations.
CONCLUSIONSIt is time to revise research agenda anddecision-making practices to focus onthe potentially very rewarding activityof design of organizations, with a viewto fitting together ways of organizing,innovation, and new technology. This isa genuinely interdisciplinary task:scientists and technologists, socialscientisis, management and policy-makersmust all be involved.
These are not abstract, irrelevanttheory issues; they translate intodecisions about the world we live in andthe world we would like to live in.
The basic complementarity betweentechnology and human resources helpsclarify the major claims made fortelecommunications technology, i.e.,that it makes an important contributionto growth and that it facilitates anequitable sharing of the benefits of theInformation Age.
The concept of capital is complex.Schumpeter warned us long ago thatcapital is "neither homogeneous nor anamorphous heap"(20). Questions I askedalmost 20 years ago still seempertinent:
We should ask how various kinds ofinformation, both the existing stocksand current flows, complement botheach other and other resources. Canwe say that those complementaryrelationships are understood as soonas we hear of books, data bases,computers, land lines, andsatellites? Do we know which partsmust be available before we canoperate others? Do we know thevarious sequences and lags betweeneconomic actions imposed by moderninformation technology? (21)
Investment in technology, or morespecifically in IT, does not guaranteegrowth benefits, any more than anincrease in R&D expenditures does so.Analysis and policy must take account ofthe complex complementarities, the leadsand lags, and the ongoing substitutionprocess. This consideration extends tothe equity aspects. There will be noequitable sharing unless thosecomplementarities and leads and lags canbe so managed that the benefits of theinterconnected world reach all parts ofsociety and all countries. Such anoutcome seems improbable: the globaleconomy as seen from New York, Tokyo andLondon is not the economy seen fromwithin Africa and South America (22).
You may prefer to think these are justtransition problems, roadblocks to bebrushed aside with ease (23) as we learnhow to use these marvellous enablingtechnologies. If so, I ask you toreflect on the 1945 vintage and ask how
much progress we have made in thisdebate - a debate that goes back muchfurther if we look to the history ofother technologies.
REFERENCItS1.Arthur C.Clarke,"Extra-Terrestrial
Relays Can Rocket Stations Give aWorld-wide Radio Coverage?",Wireless World, LI, October 1945,pp.305-8.
2. Friedrich A. von Hayek, "The Use ofKnowledge in Society", AmericanEconomic Review, 35, September1945, pp.519-30.
3. Vannevar Bush, "As We May Think",Atlantic Monthly, July 1945,pp.101-8 as reprinted inA.E.Cawkell (ed.), Evolution of anInformation Society, Aslib,London, 1987, p.165.
4. Vannevar Bush, "Memex Revisited", inScience is not Enough, ApolloEditions, New York, 1969, pp.75-101 as reprinted in Cawkell, op.cit., p.186.
5. N.Rosenberg, "How Exogenous isScience?", in Inside the BlackBox: Technology and Economics,Cambridge University Press,Melbourne, 1982, pp.141-59.
6. Telecom 91 Daily, 15 October 1991,p.l.
7. ibid p.70.
8. Telecom 91 Programme Booklet.
9. D.A.Hounshell and J.K.Smith, Jr.,Science and Corporate Strategy: DuPont R&D 1902-1980, CambridgeUniversity Press,Melbourne, 1988.
10. B.G.Goedegebuure et al.(eds),Information, A Resource forDevelopment, Elsevier, Amsterdam,1991, p.5.
11. Michael Benedikt (ed.), CyberspaceFirst Steps, MIT Press, Cambridge,Mass., 1991, dust jacket.
12. ibid, p.77.
13. ibid, p.79.
14. See articles from Special LibrariesJournal and Bulletin of theAmerican Society for InformationScience quoted in D.Lamberton,"Information Policy: A NationalImperative?", in M.Costa andM.Easson (eds), AustralianIndustry What Policy?, PlutoPress, Sydney, 1991, pp.207-18.
15. See Review Article on "EconomicPsychology" by Peter E.Earl,Prometheus, 6,1, June 1988,pp142-9.
16. Kenneth J.Arrow, The Limits ofOrganization, Norton, NewYork,1974, p.49.
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17. See G.A.Akerlof, "The economicconsequences of cognitivedissonance", with w.T.Dickens, :nAn Economic Theorist's Book ofTales, Cambridge University Press,Melbourne, 1984, pp.123-44.
18. The Economist, "Economic Growth:Explaining the Mystery", January4, 1992, pp.17-18,20.
19. D.M.Lamberton, "Information,Exploratory Behaviour and theDesign of Organizations", HumanSysters Management, 11,2, Summer1992, pp.61-5.
20. J.A.Schumpeter, History of EconomicAnalysis, Oxford University Press,New York, 1953, p.631.
21. D.M.Lamberton, Who Owns theUnexpected? A Perspective on theNation's Information Industry,University of Queensland Press,Brisbane, 1975, p.16.
22. See Hazel J.Johnson, Dispelling theMyth of Globalization: The Casefor Regionalization, Praeger, NewYork, 1991.
23. Paul A.David and W.E.Steinmueller,"The Impact of InformationTechnology upon Economic Science",Prometheus, 9,1, June 1991, 35-61.
The Human Impact of Converging Communication Technologies:Entertainmentisation, Social Change and Saturation.
Greg HearnCommunication Centre, QUT.
Brisbane, Australia.
1. ABSTRACT
Interviews and pla...ang workshops helped define the meaning of convergence for Australian users in terms ofchanges in perception, interactivity, feedback and other capacities. Unintended counterproductive humanconsequences are then considered. These include continued entertainmentisation of basic institutions and
dilution of what might be termed, psychological and cultural infrastructure. An adequate response to thesehuman impacts will depend not on technologies themselves but on the ability of stakeholders to access new
ways of socially constructing media and communication syste4s.
2.0 INTRODUCTION
Human beings embarking on the implementation ofnew technologies typically are seeking to achievecertain outcomes. Often these are motivated bytechnical, economic or political imperatives.As well, new technology usually engendersunintended consequences, not imagined by theoriginal advocates of the technology. They areunintended because they are not foreseen. Indeedsometimes they are unforeseeable. Often theyoccur in domains which are distanced from theoriginal intended outcomes in space, time or theknowledge base required to foresee then. Socialand psychological impacts are frequently cases inpoint. Sometimes they are damaging and sometimesthey are productive. When they are potentiallydamaging it would seem even more important topredict then. The focus in this paper is onunintended potentially damaging impacts, notbecause these will be the only outcomes of aconverged communication system, but because theyneed to be made visible to designers andstakeholders in the convergence process.
Of course, anticipatory studies are inherentlyspeculative. Therefore, anticipating the humanimpact of the convergence of telecommunications,information technology and broadcasting mist be aspeculative analysis. Arguably, speculation ismore likely to be valid if it is informed bysound theory and reflections of those whootentially will be affected. Consequently, inthis paper we develop a scenario of human impactdriven by a theoretical analysis of whatconverged communication technologies wi.1 meanfor individual human users. This analysis wasinformed by interviews with stakeholders drivingthe technology of convergence within Australia,which helped to define the emerging technologiesand products and the way stakeholders framedthem. We then report on concerns articulated byrepresentatives from the Australian community ina series of workshops where the futuretelecommunication system was described anddebated. Next, we compare the theory drivenscenario with that derived inductively and pointto compatible themes of concern. Finally, webriefly describe and evaluate possible responsesto these concerns.
2.1. DESCRIBING CONVERGENCE
Initially, we sought to describe intechnological terms, what was emerging
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technically in Australia and what this would meanfor individual consumers. To this end, as wellas examining the international technicalliterature (Free, Stevenson, Mandeville, Hearnand MacKenzie, 1992), we accessed interviews withkey stakeholders in the convergence process inindustry and government. The stakeholderinterviews, which were sponsored by theAustralian Coalition of Service Industries, DITACand AOTC, were part of a broader scoping studyseeking to ascertain the extent of activityrelated to convergence across Australia (Free etal, 1992).1 These interviews focussed ontechnical and commercial, as well as socialissues. Because scoping studies seek to isolaterelatively rare information which is spreadthroughout a large system, the key proceduralissue is the identification of respondents forthe study.
Initially, we analysed industry sectors suggestedas those likely to hold important interests inthe convergence of communication technologies.Major organisations within each industry werethen targeted and key individuals who were mostrelevant and accessible were approached. Theanalysis of industry sectors was based on aninvestigation of existing users of ana;.oguecommunication and other media, a review of theInternational Consultative Committee '.:orTelephone and Telegraph (CCITT) on fm.turepossible services for broad-bandtelecommunications, a review of the literatureand consideration of users of relevanttechnologies. The final list of contributorsincluded representatives from electronicmanufacturing companies, computer andcommunications manufacturers, the airlineindustry, software companies, service industries,government departments, libraries, and,engineering, architectural and advertisingconsultancies.
The interviews were conducted in a semi-structured format and focused primarily onconvergence-related activities that therespondents were involved in.2 The interviewswere not directly concerned to evaluate orexplore issues of human impact. However, theynonetheless chronicle the attitudes and waysstakeholders are currently constructing themeaning of the convergence process. They give aninsight into the metaphors, models and drivingimages which are guiding stakeholders in theconvergence process.
^-)
On the basis of these interviews and literaturewe developed an understanding of the dimensionsof convergence and a first principles analysis c-the impact of this convergence on humancommunication. The term we use to describe thecommunication systems arising from convergence isdigital video communication (DVC). DVC is notjust an extrapolation of our current visual
media. The term advanced video communicationmight capture this. But the term digital videocommunication implies a quantum shift not just an
extrapolation. DVC marries the power of currentvisual media with the power of the computer andinjects it into a network which connects vastnumbers of humans around the globe. Becausedevelopments are happening at such a rapid paceand many alternative scenarios are hypothesised,it is difficult to be precise about just whatchanges are in train. Ultimately, political,technical and market considerations will shapethe exact nature of the products and servicesmade available. This analysis is therefore basedon the general notion of a convergedcommunication system consisting of increasedbandwidth, increased intelligence viacomputerisation, increased visual facility, andintegration of video, text, voice and data. Wemake no precise prediction about the exact formof technology and the likely timing of itsemergence though numerous studies suggest thegeneral description is accurate (Free et al,1992).
3.0 INDIVIDUAL IMPACTS
In trying to understand the human impact ofconvergence in communication technology, onestarting point is to ask what would be differentfor the individual human communicator in thecommunication environment engendered byconvergence. Human beings relate in an intimate
way to their immediate informational andcommunicative environment. They exist in acocoon of space and time which is defined largelyby the information and communication theyreceive. Existing media have already radicallychanged the nature of the space-time habitat ofindividual humans (Hearn, 1991).
However, an analysis of the essential componentsof digitalisation, visualisation and networkingsuggests a number of even more fundamentalchanges to the communication environment ofindividual users that may result fromconvergence. These include:-
-hyper-realistic perception-increased interactivity-integration of communication channels-increased storage of communication history-increased descriptive capacity for complexityand detail-increased capacity for experimentation-greater elaboration of communication feedbackloops
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Let us examine each in turn:
17:PFT, PEF.:EPTI'N
dinitir.tion i .:1,1
ass.-ciated technology of high (iefinitintelevision (Ham has teen hel.lded as prt.).pidingan equivalent increase in viewing quality t(. theincrease in quality compact discs have pt(:i6e,1for audio communication. However, therelationship between increased definition andenhanced viewing experience is not necessard:y .simple and direct one. (See Lupker, AlenHearty, 1988; and Neuman, l98.) Viewerreactions to the new quality of picture have tntbeen adequately assessed. The main reason forthis is that the quality of the viewingexperience will ultimately depend not solely up=the picture quality per se, but upon the picturequality in conjunction with new genres of picturecontent. Put simply, suitable test materials havebeen lacking. Viewers may experience a highdefinition picture of an orange as notparticularly more dramatic than an ordinary 7:picture of an orange. However, a snowstormsequence in a dramatic film on a large flatscreen may in fact be perceived as a quantum leapin viewing experience. The development of suchfilms capitalising on HDTV is under way (Hallett,1991). Moreover, the enhanced quality of image isexpected to have applications in printing,medicine, public display, computing, educationand the military (Bedford, 1991). When combinedwith digital technology, applications and genresare likely to be developed which exploit thehigher image quality. In Japan, the Gifu ArtGallery is a good example of such an application.The enhanced picture quality allows visitors toappreciate not only composition, but brushstrokeand texture of paintings chosen from a databaseof masterpieces.
It is fair to say, therefore, that despite someevidence of only moderate reactions frompotential consumers, it is clear that DVC willenhance the "quality" of the image and soundpackages we receive. That is, the package will bemore attractive to eye and ear; smoother and moreseamless. The Nippon Telegraph and Telephonecorporation (NTT) vision for the 21st centurysuggests the key word to describe the newtechnologies is "ultra" (NTT, 1990). Indeed itcould be argued that the perceptual quality ofDVC will actually surpass the perceptual qualityof reality. A digitally constructed video of awalk through a rain forest will feature greenerfoliage, more detailed textures, clearer twigsnaps and so on, than an actual walk: DVC willallow us to achieve an artificially heightenedawareness. As such, will digital take us a stepcloser to realities we are attempting torepresent or a step toward a different dimensionaltogether? Are we changing our perception ratherthan supplementing it?
3.2 INCREASED INTERACTIVITY
In addition to altering perceptual qualities, DVCalso alters the nature of the interaction betweenthe communicator and the medium. Consumers'interaction with television sets is limited toswitching it on, changing channels and
occasionally talking to it. For the most part thecommunication is initiated by the producer andreceived by the consumer, notwithstanding thefact that consumers may process this material indiverse and idiosyncratic ways.9 DVC opens newopportunities for interaction. These includeexpanding repertoires of choices (e.g. viadigital delivery systems), both of content andorder of presentation (e.g. interactive videodisc), the ability to change content and image(e.g. CAD) and ultimately perhaps total emersionin completely synthesised sensory experience(i.e. virtual reality) (Rheingold, 1991). Aswell, videoconferencing applications provide forincreased interaction, at a distance, in thetraditional sense of communication interaction.
Although some of the enhancement of interactivitywill be initially trivial e.g. an extra ending ona movie, the range of interactivity available mayexpand exponentially in time (Rheingold, 1991).This interactivity will change the communicationexperience of users. But interactivity will notautomatically guarantee the human communicator isadvantaged. On the one hand, the increasedinteractivity will lend itself to a dramaticallyincreased ability to engage in problem solvingactivities e.g. in the case of a designerexperimenting with different structures andforms. On the other hand the increasedinteractivity may lead to hyper-passivity e.g. asurrogate traveller choosing among views from amountain. In this case, arguably, the involvementis less, only the illusion of involvement isgreater. Interactive educational media willassist in routine information acquisition butwill not necessarily provide higher levelanalytical skills. Clearly, industry,entertainment and educational uses need to beevaluated separately.
Perhaps the overriding conclusion is that theincreased interactivity which the technology willpotentially provide will be used in differentways by the humans involved. The human variablesremain unchanged. The new technology will magnifytheir manifestation.
3.3 INTEGRATION OF COMMUNICATION CHANNELS
Existing communication technologies tend tooperate using only one or perhaps two of thecommunication sensory channels which humancommunicators have at their disposal. Forexample, telephones operate by voice, newspapersoperate by sight, television operates visuallyand so on. DVC will provide the opportunity forthe integration of video, text and voice in bothone-way and two-way communication processes. Assuch, DVC opens up a new paradigm ofcommunication possibilities: a communicationenvironment where all channels are integratedmore closely, parallels our experience of normalperception and unmediated communication. Thiswould possibly make utilisation of the newtechnologies more transparent. In a real sensethey become an extension of our normal selves,our normal means of operating and communicatingon a day to day basis. As well, this integrationprovides for a restoration of a holistic approachto communication. That is, it better provides fora more complete analysis of problems or
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presentation of ideas from all perspectives notjust those able to be communicated visually orthose able to be argued for logically. Instead,it invites us to develop a multi-dimensionalperspective in our communication. This mayenhance our ability to deal with the many complexproblems that face industry and societygenerally. This integration of communicationchannels could conceivably impact on our timingand arrangement of communication. For example, itmay be no longer necessary to fax preliminaryprinted material as a precursor to a completepictorial document, to precede a verbaldiscussion. The new media will allow thecompression of the separate types ofcommunication. As such they open up newapproaches to decision making and education :norganisations.
3.4 INCREASED STORAGE OF COMMUNICATION HISTORY
Digitalisation brings about an increased capacityfor storage. This will mean more communicationhistories are available. All relationships have ahistory. All communication automaticallygenerates a history. In sane contexts therecording of what has been said is of crucialimportance, for example in parliamentary andlegal contexts. Our current communicationtechnologies are capable of storage to a limiteddegree. Video tapes may be recorded and kept ortranscripts may be entered into ,lomputers. DVCwill generally enhance the capabilit,, of storageof recorded communication. More importantly, itwill enhance the ability to retrieve suchinformation. This may be accomplished via sortingand database processes which are an extension ofcurrent technologies. It is likely that, giventheir caisson digitisable form, current storagecapacities for text will be paralleled by storageof visual and data forms. As well, theirintegration will be possible. Scientific reportsmay utilise an integrated visual and text-basedformat as a better guide to replication than thetraditional report (Davies, Bathurst andBathurst, 1990).
Speculatively, it would be a relatively simplematter to record every public utterance ofpoliticians, for example, and to sort, access andprocess this material in sophisticated ways.Meeting minutes, whether in organisations orparliament, could be superseded by completestorage of all interactions. Replays of previousmeetings will be instantly accessible andrepayable at the request of any futureparticipant in a meeting procedure. Whereascurrent methods of retrieval are lengthy and ofnecessity sequential, digitised visual storagecan be accessed more quickly and more randomly.Communication history is important because itprovides the context for the perception ofmeaning of any communication. Access tocommunication histories enable multiple samplingof that background from different perspectivesand under different emotional and socialcircumstances. Although the exact storagecapacity of DVC systems is still technicallyuncertain, at the very least, INC will offer anenhancement of current storage capabilities. Eventhough the exact extent and nature of the use of
(
C. 4
such storage is difficult to predict, the issuesraised here are not unrealistic.
3.5 INCREASED DESCRIPTIVE CAPACITY FORCOMPLEXITY AND DETAIL
As a consequence of increased storage capacityand integration of channels, as well as theincreased visual facility of DVC, the capacity ofthe human communicator to deal with complexityand detail will be enhanced. A picture is worth athousand words because it is a much moreeconomical and natural way of describingsomething in detail. HDTV will allow thebrushstrokes of a work of art to be discerned.Geographical Information Systems (GIS) databaseswill allow us to zoom in on a designated districtto extract whate'er details we require. Advancedmedical applications will allow for more fine-grained analysis of symptomatology.
Not only will DVC allow us to focus on detail butit will allow for the rapid juxtaposition ofdifferent frames of information. This enables amore complex picture to be built up over time.For example, drought patterns, erosion patterns,stock disease patterns as well as urbanisationtrends could be juxtaposed to gain a betterunderstanding of complex social, economic andtechnical systems. Thus DVC will make possibleboth convergent and divergent treatment ofdetail. Convergent by allowing for greater andgreater focus and divergent by building more andmore layers of information.
3.6 INCREASED CAPACITY FOR EXPERIMENTATION
As a result of all the preceding capacities thatDVC provides, DVC brings with it an unparalleledcapacity to manipulate the pictorial symbolsystem. Visual experimentation is alreadyimpacting dramatically on the sciences, designprocesses and entertainment (Freidhof and Benzon,1990). Two processes facilitate this. Firstly,human experimentation proceeds essentially viaextrapolation and guessing. Computer drivenvisualisation allows humans to see theconsequences of their guesses much more quickly.Secondly, and partly as a result, this allows thetime saved in picturing the consequences ofguessing to be devoted to more guessing, analysisand synthesis of ideas. In a related way, it canbe argued that pictorial communication issuperior to the word-based and numericalcommunication for initial stages of problemsolving, particularly for those requiring openended or fuzzy analysis rather than strictlydeductive logic (Davies et al, 1990).
Davies et al (1990) provide an example of how DVCaids in the process of experimentation inbiochemistry, where traditional ball and stickmodel building has been replaced by computergraphic simulations of moving molecules which canbe observed, analysed and then discarded or builtupon. Computer-aided design allows engineers todiscern how components will fa.... and to assess nownew designs will cope with compression, tensionand twist. Applications of this enhanced at:liyare already extensive.
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In a sense then, the examples described useenhanced experimental capability to lead to amore accurate understanding of reality and morecomplex interventions on reality. The sametechnical capabilities that allow us tospeculate, see from a different perspective, and"play with" reality will also allow for moreelaborate manufacturing of unreality as well.Rich and complex fantasy scenarios could beconstructed and experienced (Rheingold, 1990).This capacity presents a number of problems whichwill be returned to in the final section.
3.7 GREATER ELABORATION OF FEEDBACK
Feedback is an important component of the humancommunication system. Feedback is essential toour capacity to learn. It enables thecommunicator to monitor the consequences of theirintended communication to make adjustmentsaccordingly. DVC enhances feedback capability intwo ways.
Firstly, many of the consequences ofcommunication are invisible. For example, when wecommunicate with someone else we do not see theiremotional reaction in its entirety. We certainlydo not see the thoughts that accompany thatemotional reaction. Feedback consequences ofcommunication may also be complex, subtle anddissipated e.g. the consequences of anenvironmental communication campaign may bedifficult to encapsulate directly. DVC thusenhances the feedback process by (a) makingcomplex processes visible (for example, data canbe collected over a long period of time fromdiverse sources and translated into graphs ordirect pictorial simulations), and (b) speedingup processes that would normally take manymonths. For example, erosion patterns which occurslowly and imperceptibly can be speeded up andmade visible. DVC would enable heart rate, EEG,GSR, and other biofeedback indicators to bedisplayed for remote medical diagnosis. Indistance education DVC may allow for morecomplete feedback to be provided for studentsmore opportunely.
4.0 SYSTEMIC CHANGES
While this assessment of what DVC may mean forindividual users is instructive, it has a majorlimitation. Namely, it treats both users andchanges largely in isolation. Human impacts willneed to be understood in a systemic way as well.For example, the impact of interactivity willdepend in part on a critical mass of willinginteractants. As well, the final shape ofcommunication services will depend on a dynamiccombination of political, technological andeconomic factors. Given DVC is pervasive andinfrastructural, unforeseen systemic humanimpacts also need to be predicted. Given this, wesought to include some form of systemicconsiderations in cur initial analysis as well.
One avenue of analysis of systemic affects isprovided by the tradition of analysts who havec-onsidered societal effects of new media "arms as.:Ipposed to contents (McLuhan, 1964; Meyrowitz,3965; Ong, 1982). Most recently, Mitroff and. (1989) have advanced an argument that
existing media are having subtle yet dramaticsocietal effects. Indeed they argue thatexisting media have fundamentally changed basicsocietal institutions. The mechanisms of thisdynamic include the enhanced capacity forfantasy; the juxtaposition of radically differentcontents and some subsequent warping oftraditional content boundaries; the engineeringof bizarre images; the overloading of informationand subsequent radical simplification of ideas;incestuous recycling and dilution of ideas andimages; the reversal of natural patterns ofcausality by image manipulation; the accentuationof the visual and emotional leading to thedevelopment of personality and celebrity cultism.
4.1 ENTERTAINMENTISED INSTITUTIONS
What results is a "massive infusion ofentertainment into every realm of human affairs,to the point that everything threatens to becomenothing but a sub-branch of it" (Mitroff andBennis, 1989). Politics, education, religion andbusiness have become significantlyentertainmentised. Further a society so infusedwith entertainment has become dependent on it inorder to distract it from the complex problemswhich require solution. Its impact can be arguedto be economic as well as social. If it is truethat DVC entertainment products will beexponentially more engaging than television(Rheingold, 1991), an increasing rate of slide tounreality is a reasonable prediction. In otherwords such an analysis based on existing mediacan be extended into the realm of convergedcommunication technologies given the way we haveargued these technologies will affect theindividual human communicator.
4.2 PSYCHO-SOCIAL INFRASTRUCTURE
At a more basic level we can ask what will be theeffect of this new century communicativeenvironment on much of the basic culturalinfrastructure now taken for granted. Everyculture depends on basic infrastructure oflanguage cognition and arousal management whichare very expensive for a culture to produce andmaintain. Partly this infrastructure has to dowith literacy. Literacy in numerical and wordbase communication represents a gigantic culturalinfrastructure which is easy to take for granted(Bathurst at al, 1990). Traditional mediarequires many years of development of therequisite skills for participation in productionand consumption. Visual media requires noliteracy to begin consumption and different formsof literacy to exploit the media (Postman, 1985).Current media involve consumers, especiallychildren, spending large amounts of time inconsumption. Children watch 20 to 25 hours perweek television. DVC promises new experienceswhich will be even more engaging. Will we see afundamental shift in the literacy infrastructureas a result of the immersion of a generation ofconsumers in the environment that convergedcommunication systems provide?
Moreover the cultural infrastructure we arespeaking of is much more than print literacy. It
relates to even more fundamental processes ofarousal, motivation and time orientation. Those
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are the very building blocks of culture. It can
be argued (Hearn, 1991) for example, thatexisting media have altered the way peopleallocate their time between obligatory anddiscretionary activities. Currently, peoplespend most of their time either working orengaged in other obligatory activities. The 20thcentury has seen an increase in what might becalled left-over time or discretionary time.Large chunks of this discretionary time arecurrently absorbed in media consumption. Mediaconsumption has displaced many discretionaryactivities, for example crafts, reading, and so
on. Moreover, media consumption has renderedsolitude a thing of the past. The displacementof solitude and discretionary activities in whichhumans can be reflective and creative is alsopart of the change in the cultural infrastructurethat we are speaking of. DVC will continue toChange this cultural infrastructure providingmore variety, more engaging and influential mediaand simply more quantity of material forconsumption. This is likely to increase timespent in media consumption and accelerate thedilution of the traditional culturalinfrastructures.
This analysis foreshadows sane systemic changesthat are predictable given the impact of DVC onindividual human communicators. With thistheoretically derived scenario in mind weconducted sane basic research to begin to derivecommunity perceptions of this emerging technologyand associated issues. This research wasintentionally inductive. By giving a voice tothose who will be affected by the new technologywe sought to inform our analyses with a differentperspective from that of the stakeholders ortheorists. It was carried out by a team ofresearchers who represented different viewpointsto the theoretical analysis so far described.
5.0 PLANNING WORKSHOPS
This phase of research comprised a series offuture planning workshops involving a crosssection of community, corporate and governmentrepresentatives. The process was intended to be aparticipatory and anticipatory consideration offuture communication systems. It was designed asan active, learning process in which allparticipants were encouraged to criticallyappraise the alternative futures open to them andlearn to judge the issues, opportunities andproblems associated with such options (Morgan andRamirez, 1983). These search seminars, as yet notcompleted, brought together a cross section ofthe Australian community to discuss and debatefuture social and policy implications of futuretelecommunication services. The focus was onbroadband intelligent network services, butwithin the context of convergence more generally.
The design of the discussion sessions began byencouraging participants to sketch a broadpicture of desirable futures for society.Generally, this formed a bench mark for the nextday and a half of discussion, debate, analysis ofissues and formulation of description of socialand policy implications of new telecommunicationservices. To date, two workshops have been held
in South East Queensland with a total of fifty-two participants involved in these forums.
6.0 INDUCTIVE SCENARIOS
Many issues were raised by participants. Someissues were extensions of issues from the currenttelecommunication environment (e.g. cost,subsidisation, equitable access, publicparticipation and accountability, basiccommunication rights, and ethical services).Others were technical, economic or regulatory innature (e.g. privacy, ownership and control ofinformation, and impact on jobs).
Three themes, however, recurred which aredirectly relevant to our focus on human impacts,especially unintended ones. These were theimpact of technology on social structures, theneed for enhanced customer control of personalinformation and services and thirdly the impact
on leisure time.
6.1 IMPACT OF TECHNOLOGIES ON SOCIAL STRUCTURES
A fundamental concern revolved around the issueof whether new technology would impact onfundamental and valued social structures. Issuesof alienation, fragmentation and the dilution ofexisting community were emphasised. Relatedthemes revolved around the meaning ofindividuality and the loss of anonymity in theinformation age. It was seen that individualsfashion their sense of identity in community withothers. While it was acknowledged thatcommunicative technologies could in factcontribute to a sense of community, it was feltthat this depended on the way technology wasimplemented and understood in the community.Most technologies, for example, home shopping orother interactive services could be seen toprovide potential to either enhance or decreasethe sense of community felt by consumers to bealready greatly eroded and fragile.
What then will be the impact of increasingtechnologisation of this process of community andidentity formation? The technology of theinformation age seems to be committed toincreasing individuality and fragmentation. Howwill the new system design for integration andunderstanding between people - for an increasing
sense of "usness". How will newtelecommunication systems provide for thisprocess and prevent people from becoming morehousebound and even further isolated?
6.2 PERSONAL CONTROL OF INFORMATION AND SERVICES
A fundamental human need is to feel in control.Consumers already feel deluged by an over complex
information environment. New services threaten
to exacerbate this problem. A fundamental designconsideration therefore is the type of controlWhich the new system allows. Further, controlmay not be achieved by more information or morelevels of choice. Rather, it may be achieved bysimpler information with more attention paid toeducative processes instead of technology. Someways in which new technology might enhancecustomer control would be through knowledge of
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progressive billing, smarter identification ofphone calls and more intelligent billing systems.
6.3 IMPACT ON LEISURE
Leisure time is seen to be fundamentallyimplicated in these technological changes. New
leisured services are part of people's imaginingsabout new telecommunication services. Included
are accessing of video and music databases,cinematic quality and virtual reality activities.The location and form of leisure is seen to bechanging.
7.0 ANALYSIS AND CONCLUSION
Clearly, in terms of theoretical analysis andrespondents' reflections, a central image in thefuture scenario we are considering is that ofindividuals as they exist in their immediatesensory/informational/communicative environment.Consumers describing and contemplating the newcommunication systems intuitively sense a change
to this basic unit of existence. This change isengendered by the volume, complexity, and rate ofchange of the informational environment that theywill inhabit. In the face of this change a senseof control over what is happening (or lack of it)is fundamental to a sense of well being. In
particular, attributions made regarding whethercontrol resides in us or in the environment arecrucial. To the extent that we feel controlresides with the technology of the communicationsystem rather than with us, we will feel somedisquiet to our sense of well-being. As well,this attribution will eventually trigger morecomplex beliefs about disenfranchisement from thecommunication system and alienation from othersin the system. At the heart of this dynamic is afundamental link between human beings' sense ofwell being in their immediate space and timeenvironment and the way they construct theirsocial milieu (Giddens, 1984).
A fundamental dimension of the social milieu isthe distinction between private and public space.Understanding and feeling comfortable with thisdistinction between private and public space isbasic to a sense of well being. Perhapsrespondents sense that convergence threatens tochange our notions of private and public space(Meyrowitz, 1985). For example, on line databasesearching would mean we spend less time in publicspaces, such as libraries, for example. At thesame time other areas of our life once consideredprivate become public space. Video phones forexample make our home more public space. Eventhe inside of our body becomes public space atthe hand of sophisticated visual monitoringsystems.
The redefinition of the boundary between work andleisure is another example of shift in thenotions of private and public space. Not onlywill the sites where work and leisure are engagedbe blurred through telecommuting andtelecottages, but shifts in the form of leisurewill also blur the boundary between private andpublic. Interactive fantasy scenarios ofpreviously unparalleled realism will engagepeople for large amounts of time in experiences
, . ;
in "virtual locations", limited only byimagination. These experiences will shiftperceptions, change arousal management habits,change the base line of acceptable stimulation inleisure time and generally distort the boundarybetween reality and fantasy, private and public.
As we change the basic notion of private andpublic we also change the way we see ourselvesconnected and disconnected from our fellowhumans. Notions of private and public spheresare about connection and disconnection fromothers and control over these two processes. Newcommunication media potentially change ourconnection to our fellow humans. It is evenarguable that once this basic relationship ischanged our whole social structure is alsopotentially changed. It is in relationship toothers that we derive much of our sense of who weare. Thus when workshop participants articulatedconcerns that future telecommunication serviceswould impact on their sense of community, andtheir experience of their own individuality and asense of meaning in their lives, it may be thismechanism they are intuitively implicating.
In a nutshell, new telecommunication serviceswill provide a dramatically more complexcommunicative environment for individualconsumers. It will arguably impact on ourrelationship with our immediate sensory/informational environment, changing boundariesbetween private and public, and work and leisure.Basic constructions of our social and communitymilieus will be redefined. Some respondentsquestioned whether we were already beyond thelimit of our ability to cope with complexity.Moreover, in the face of this rapid escalation inthe complexity of our communication andinformation environment what are the copingmechanisms?
The answer to this question must itself becomplex. However, there are two broad themesdiscernible amongst stakeholders and communitymembers which help scope possible futurereactions. One response is a continuation of ourexisting reaction to an already complex media andinformation environment which Mitroff and Bennis(1989) and Postman(1985) have described. Thisinvolves the continued radical simplification ofideas and diversion from complexity by denial andescape into fantasy and idealisation. Technologyis constructed as having more sensory richr2ss,as being more seamless, more controlling arjencompassing than our current media. Suchidealisation is a defence which prevents us fromunderstanding the potential of new media cochange human variables in more optimistic,learning oriented ways. An alternative route isto look for new models of dealing withcomplexity. Central to this response is greaterreliance on others to share and learn about thecomplex information environment, greaterselectivity, and better scrutiny of theinformational environment via both more rigorousanalysis as well as intuition. The bench mark ofa learning oriented approech are humanconnection, curiosity and problem solving. Itoffers the potential for the development of newforms of community operating in new and moreeffective ways.
811
As Mitroff and Bennis (1989) argue, our existingparadigm of dealing with complex communicationsystems is failing us. If their argument isright, it is essential that the development ofnew communication systems be decoupled from theexisting entertainment driven paradigm ofccmmunication. However, this is unlikely in theextreme. Firstly, there is now a well entrenchedmarket for current styles of entertainment.Secondly, much of the platform technology fornon-entertainment application of DVC is alreadybeing developed in the entertainment industry3.Finally, entertainment media conglomerates areone of only a few corporations with thewherewithal to provide the infrastructurerequired to bring about the technologicalconvergence which is enormous in financial andtechnical terms.
Of course, it is likely that the new system willbe driven by other players as well and that therewill be an inter-marrying of corporate entities(MUlgan, 1991). But the key variable which willshape the new communication system may be therelative contribution of the existingentertainment driven paradigm. The crucialquestion is how effectively can new corporateplayers harness new ways of thinking about thepossibilities generated by this new communicationsystem.
Any analysis of the human impact of technologyhas embedded within it the seeds of atechnological determinist argument. But, by wayof conclusion, it is important to reiterate thatit is not technology in and of itself which willbring about such impacts. Rather, new technologymerely provides a catalyst for change which isessentially social rather than technological. It
offers a window of opportunity in whichunderlying social and philosophicalinfrastructures can be challenged. Within thatwindow of opportunity it is the way technology issocially constructed the images metaphors andmeanings it becomes encased in - that willdetermine the ultimate human impact of aconverged communication system.
NOTES
1 The first half of this paper is based on areport by the author to Australian Coalitionof Service Industries in conjunction with astudy by Free et al, 1992.
2 The author gratefully acknowledges thecontributions of Les Free who conducted theinterviews and Jan Chalustowski who assistedin analysing the interviews.
3 Animation techniques developed in theentertainment industry made possible thedevelopment of applications in medicine andscience. (See Davies et al, 1992).
REFERENCES
Bedford, R.A. "Industrial application of HDTV".IF.P.R Communications Magazine, August, pp 25-27,1991.
Davies, D., Bathurst, D. and Bathurst, R. TheTelling Image: The Changing Balance BetweenPictures and Words in a Technological Age,Clarendon, Oxford, 1990.
Free, L., Stevenson, T., Mandeville, T., Hearn,G., and McKenzie, A. Public Policy Issues andService Industries Opportunities for Australia inDigital Video Communications. AustralianCoalition of Service Industries ServiceIndustries Research Program, Report No.4, 1992.
Friedhoff, R.M. and Benzon, W. Visualisation: TheSecond Computes Revolution, H.N. Abrams, NewYork, 1990.
Giddens, A. The Constitution of Society. PolityPress, CaMbridge, 1984.
HalleHallett, B. "HDTV: Where film artistry meetsscience". The Australian, January 15, 1991; pp31, 42.
Hearn, G. Media: The Killing of Time, The Deathof Solitude and the Packaging of the Soul. Paperpresented to the 1991 Conference of theAustralian Communication Association, Sydney,1991.
Lupker, S.J., Allen, N.J. and Hearty, P.J. TheNorth American High Definition TelevisionDemonstrations to the Public: An Overview ofSurvey Results, Committee for the North AmericanHDTV Demonstrations to the Public, 1988.
McLuhan, M. Understanding Media. Signet, New
York, 1964.
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geyrowitz, J. No Sense of Place: The Impact ofElectronic Media on Social Behavior. Oxford, NewYork, 1985.
Mitroff, I.I and Bennis, w. The UnrealityIndustry: The Deliberate Manufacturing ofFalsehood and What it is Doing to Our Lives,Birch Lane Press, New York, 1989.
Morgan, G and Ramirez, R. Action Learning: AHolographic metaphor for Guiding Social Change.Human Relations, Vol 37. pp. 1-28, 1983.
MUlgan, G.J. Communication and Control: Networksand the New Economies of Communication. GuilfordPress, New York, 1991.
Neuman, R.W. "The mass audience looks at HDTV: Anearly experiment". Paper resented to the NationalAssociation of Broadcasters Annual Convention,Las Vegas, Nevada, 1988.
NTTC Report " Realisation of visual, intelligentand personal communications service". NipponTelegraph and Telephone Corporation - A servicevision for the 21st century, March 1990.
Ong, W. Orality and Literacy: The Technologisingof the Word. Methuen, London, 1982.
Postman, N. Amusing Ourselves to Death: PublicDiscourse in the Age of Show Business, Viking,New York, 1985.
Rheingold, H. Virtual Reality, Secker andWarburg, London, 1991.
THE IMPACT OF THE NEW SERVICES OF TELECOMMUNICATIONSIN DEVELOPING COUNTRIES
Miguel C. De la SottaENTEL-CHILE
SANTIAGO,CHILE
The author's concepts and opinions do not compromise ENTEL-CHILE
ABSTRACT
The developing countries are incorporating new services of telecommunication in theexisting networks. In this paper, the social and economical impact of these newservices is analized. It is possible to point out that celular and satelitalcommunications plus the introduction of optical fibers cause the main effect on theeconomy and the society.
SUMMARY
There are clearly two main areas where the impactof new services of telecommunications takes place,the economical and social environment.
In the economical aspect, we have a greatimprovement in industry, commerce, government,agriculture and scientific activities, due to thevelocity in the management of information. On theother hand, it can be proved that, the applicationof new services in telecommunications are changingthe concept of information to the individual andgroup of people, because of the elaborated andsophisticated information that they receive.
A significant aspect in the application of newservices of telecommunications in developingcountries, is the effect that these countries canjump certain steps in the development and the newservices can be applied at the moment that theyemerge, with the condition that telecommunicationand economical policies a,e well defined and tendto the free open market.
Some important cases that characterize theapplication of telecommunications new services indeveloping countries are the following.
- In the practice, radio celular communicationscan complement and satisfy some telephonicdemand without installing external networks. Wefind this situation in cities, where are noavailable telephonic lines, but themajoriwpactis in rural areas, near of the highways, at thebeaches, etc., this leads to an enormousdevelopment in agriculture and tourismwithwelloriented plans.
- The impact of the FAX in the management of
different activities is well known, but this
form of communication is being uses to personalcommunications reducing dramatically the costpor unit of information (compare one minute of
FAX information with one minute of telephonicinformation). This is a real social impact.
- In the trunk lines of the countries which serveto carry all communications around (or along,inChilean case) the country, developing countriescan jump directly to fiber optics u-ine existingmicrowaves links as back up. With this
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application all new services can be potenciallyapplied in everywhere, increasing thecommunications facilities, i.e. producing a greatgrowing in the economy.
- Currently, developing countries have been a lotof problems with the access to the scientificinformation. High prices, little diversity anddelay in the arriving of the scientificinformation were serious problems. Now, the FAX,the electronic mail and the access tointernational data bases make the scientificsaround the world can work together, in realtime. Obviously, this effect cause influenceson the technology and economy of the country.
- However, there are some debatable effects ofapplication of new services of thetelecommunications in developing countries suchas:
Developing countries lose their culturalidentity due to the internationalization of theinformation.
In fact, a lot of i.formation on one person notnecessarily make him more communicative orfriendly, then we can see the opposite effect.
Communications break frontiers between countries(for example, latinoamerican case) and permitsocial and economic integration.
- Finally, we can say that it is very important toanalize the effect of application of thetelecommunications new services in developingcountries, because the "global village"is takingplace, and it would be necessary to use thesimplest concept "exchange" instead of "import"and "export".
INTRODUCTION
It is well known that there is clearly a directcorrelation between telecommunications and thesocial and economical development of a country andthe phenomenon of cause and effect that can beverified between them.
The new services of telecommunications are playingday to day a very import role respect to the best
use of the present systems of telecommunications,in the incorporation of new technologies in thesesystems and in the social and economical effectsof the telecomunications.
On the other hand, in developing countries havein this context, an unique and importantadvantage on the developed countries: Thepossibility to avoid certain steps in the
improvement of services, jumping directly to thetested technology and lower costs.
For that reason, it is important to analize howthese new services can be applied in developingcountries to facilitate the economical growingand to prosecute the social effects.
In this work is presented some definitions ..nd
principles under which will be carried out thefuture analysis.
Then, it will be presented the new services of
telecommunication in according to an arbitrarybut adequate division to study their directeffects.
Also, it will be indicated the most importanteffects of each one of these services in
economical, government and social aspects at
individual and group levels.
Finally, this work presents the main conclusionsthat derive from the performed analysis,enhancing the most direct and useful actions to
apply in developing countries to obtain the bestprofit of the new services of telecommunications.
BASIC PRINCIPLES AND DEFINITIONS
Information: Any kind of signal that arrives to
the human brain through the sensors of the body.These signals use the association capability andthe memory of the brain (i.e. audio and imagesignals). On the other hand, information is alsoany kind of signal generated in the human brainand expressed through the human body.
According to this definition, the datatransmission letween computers is a particularcodification of the information received(generated) from (to) computer CPU . These unitshave a small associa-i,n capability, but they canperform the operations at a very high speed.
Communication: Information exchange between anemitter (man or machine) and a receiver (man ormachine). The information can be generated inseveral forms, such as voice, image, graphics,physical signal representing a specific phenomenon,etc.
The information can not be transmitted in itsnatural form through the communication systems.For this reason, it is necessary to modulate a
physical signal prepared to propagate by thechoose channel which is between the emitter andthe receiver.
In the modern communication systems thisphysical signal is an electromagnetic wave witha symbolical (digital) representation of theinformation.
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THE IMPACT OF NEW SERVICES ...
Communication systems: The above conceptsenfatize the known definition: the communicationsystems are the extension of the man beyond of
his local sensorial capacities.
Telecommunication: is a communication between anemittier and a receiver separated for a distanceso that the exchange of information can not be
directly verified. Therefore, it is used the
following variables and channels:
Electric signals: copper wireRadioelectrical signal;: coaxial cablefree space.Optical signals: optical fibers.
or
Local communication: antiquated concept aboutphysical limit to a voice transmission. Thisdefinition was specified using the simplestphysical line: the copper telephonic line.
At this moment, with the enormous technologicaldevelopment of fiber optics and opticalamplifiers, all communications the world wouldbe local communications.
Telecommunications demand: Persons and entitiesclaim their needs of telecommunications systemsthrougn this process.This concept has aparticular characteristic in telecommunications:It is not possible to separate the demand withthe offer. In fact, offer in telecommunicationsproduces demand, making a progressive cause -effects phenomemon.
Specifically, all new useful service which canbe massified in the market produces anexponential increase in demand because the need ofintegration between the users.
Hierarchical networks: The hierarchicalorganization existing at the present in themanagement of the telecommunications tends to
decrease due to the utilization of optical.fibers, synchronous networks and digital crossconnect(DCS) equipment.
Competence: The accumulated experiences in the
world by the communications administrationsindicate that the telecommunication increasesstrongly in volume and quality in a competitiveenvironment, making the prices go down and thequality go up to the users.
Telecommunication services: If there is aconsolidated telecommunication network with a
real competence between enterprises, it is betterto say that they are selling "reliability"instead of "services".
In fact, the cost of a short interruption of thecommunication represents monetary, through the
enterprise image, more money than the price ofthe service for a long period of time.
SERVICES DIVISION
A useful form of separating the telecommunicationsservices that permits to analize the impact ofthe new services in developing countries is the
following:
Traditional services: They are those servicesvery extended in the world by public users, suchas: voice transmission by telephonic line, videotransmission through radioelectric waves, datatransmission by switched public network, etc.
Introducing services: These services have bornas an extension of the facilities of thetraditional services plus new services that canbecome possible due to new technologies appliedin transmission or in other part of the network.
Future services: In this case, we are talkingabout services that could have some possibilitiesof massive introduction in the market, impactingstrongly in the demand. (Some of they could beno possible with the up-date technology).
In the Table 1 are presented introducing servicesas a derivation from the traditional services.
Future services ideas:
HDTV video-telephone by lineCelular video-telephone (standard and HDTVquality)HDTV by radioIntegrated services ofdigital newtworks(ISDN)by optical fibers. (These systems include alltraditional services and the introducingservices by physical line indicated in theTable 1).
TECHNICAL AND ECONOMICAL EFFECTS OF NEW SERVICES
1. The celular telephony complements thestationary telephony:
- At the city, celular telephony makes the
prices of stationary telephony go down. Incases where there is a strong competencebetween celular companies, (Chile is anexample) the cost of celular telephone is
near of the stationary telephone.
- The celular antennas installed alonghighways make possible to use this kind ofcommunication in medium size rural areas. Inthis case, the cellular telephonyincentivateseconomical activities, as agriculture andother related works.
On the other hand, the private networks in thecellular area can be integrated to the publicand international networks.
- Another impact of cellular telephony can beverified in the tourism. In fact,a lot ofbeautiful places in developing countries havecellular telephony to satisfy to touristswith more resources. However, this form ofcommunication can be used not only by the
rich persons, because medium resourcestourists can share the cost of the service.Particularly, in Chile it is a very commonfact to use a cellular telephone as a publicone at the beachey or in another touristicplaces, with a great demand.
815
THE IMPACT OF NEW SERVICES ...
2. Computers and the associated networks (LAN,MAN, WAN) have had a great impact in themanagement of the different entities such asthe following:
- A very good interaction between the centraland thn regional government,producing higheradministrative order.
- Improvement of the data bases of the taxentity and civil register, making possible aa good service in any phace of the countrywithout bureaucracy.
- Banks and financial institutions, which werenot very efficient in the past, now they havean excellent management and they offer themost advanced technology to the users.(automatic cashier, FAX and telephoneinformations about accounts, etc.). Allservices can be used in any place of thecountry through in line, on real time networks.
- The industry and the commerce haveexperimented a continuous growing due to thecomputers and the associated networks. In thiscase,the technical,commercial and managementactivities use computers and networks.(stocks,customer files, CAD/CAM systems. etc.)
- Finally, in public and private institutionsof health also have marked important advances,mainly in the institution management, clinichistorical, telemedicine, etc.
3. The use of the FAX is very known, meanwhile itseconomical impact represents, nowadays, a toolof work almost so important as the telephone,all this considered in a stationary or a movilsystem.
However, it is easy to think that the use of theFAX will be more massive when all the countriesconsider the FAX print a legal document. Thissituation will help to eliminate the bureaucracyand to produce economy.
4. The satellital rural communications produceeconomic effects because they integrate to themarket to a great number of people and improvethe production through teletraining programs.
5. The parabolical antennas to free reception fromsatellites have done an important impulse of thetourismm, although is necessary to regulatein both national and international level thesereceptions.There are two aspects to consider inservices regulation: legal installation ofantennas and the payment of rights.
6. The electronic mail have produced a revolutionin the possibilities of communication to theusers of personal computers (with have day today more penetration in different groups andsocial levels) because they dispose a globalsystem to national and international exchangeof information.
Due to the low cost of electronic mail, the useof this service have impulsed the research inuniversities and center of technological
THE IMPACT OF NEW SERVICES
Traditionalservice
MediumCapacity(Bandwidth)
CharacterIntroducingservice
telephony physicalline (L)
narrow bilateral PC communication
telephonyL
narrow bilateralIntelligent public telephone
telephony radio (R) narrow bilateral Satellital rural
communications
telephony L narrow bilateral FAX
Datatransmission
L/R narrow bilateral Electronic mail
Datatransmission
L narrow bilateral Local area networks (LAN)
Datatransmission
L/R wide bilateralMetropolitan area networks(MAN)
Datatransmission
L/R wide bilateral Wide area networks (WAN)
Television L/R wide bilateral Video-telephone
Radio R narrow unilateral International radio (1)
Satelliteservice R narrow unilateral Navigation aids (2)
Public telephonyby radio
R narrow bilateral Cellular telephony
Teleaction L/R wide unilateral Telesurvillance
Teleaction L/R narrow unilateral Telecontrol
feleaction L/R narrow unilateral Telemeasurements
(1) International transmission in local programms(2) Airplanes, ships and tors
Table 1. Telecommunication services classification.
development in the catch of the information asin the contact and team work in the groups withscientist of other countries.
An important aspect of the electronic mail is
that, when there is a high penetration ofpersonal computers would transformer in amassiveuse service in the future.
The impact of the electronic mail can be comparedwith the that have had the FAX but to moreselected users.
7. The system of teleaction have an importantuse in the automatisation of process (for
example, in the generation of electric energy),but no represent a great impact to nationallevel, neither in the economic, nor in the
social viewpoint.
8. The phone video is a new service that wouldno have been for technical and economicalreason in developing countries, it isconsidered that developing countries does norepresent an aspiration of short form and,
therefore, it will not verify as impact in
the inmediate future.
9. Other services like: cable television, highdefinition television via satellite forhelping navigation; these services will behardly massive in developping countries sincethey would be a restringed market due totheir high cost; therefore, their nationaleconomical influence is not considered animportant one.
816 L.0` - 4
SOCIAL EFFECTS OF NEW SERVICES
1. Telephone cellular, linked to fax, electronicmail, teleaction represent for individuals a
simultaneous and virtual presence in manyplaces, fact that converts people who possessthese media in a high category human beingsfor whom space and time have absolutelydifferent measure.
Nevertheless, each individual privacydiminish when shares transmission media in
open space with other people.
2. Cable television, international televisionvia radio, and international radio produce,asit is already known, a cultural identity lostof less developing countries, chat it means anew colonisation through maintaining hegemonyin cultural and commercial values.
In this case, the international radiointroduction in local radiodifussion and newsand entertainment programs in local televisionhas a greatly powerful socio-cultural effectsince accesibilitYto those media is nearlyuniversal in developing countries.
3. Anyway new telecommunication services givemore wellbeing and entertainment to differentsocial levels; for example, intelligenttelephones that allow people communicatedirectly to other different places from theircity and, in a small degree, but sociallyimportant, these telephones allow receivingcalls without necessity of having a telephoneline. These aspects represent an implicitvalue of human being, mainly for lower-wagesgroups that tends to insert themselves in a
completely unknown society.
4. Fax use in social ground also allows a human
revalorisation from delivering the possibility
of manuscript texts, draws, etc. Thischaracteristric makes more friendly the use
of communication machines; notwithstanding,traditional mail concept wins newly actualitybut with a different carrier.
5. Many studies have been carried out about the
integration effect mainly directed to ruraland/or marginal sectors, ethnic groups, etc.,that can be performed through satellites. A
main criticism is the strong cultural shockthat is produced on individuals and socialgroups, that ends in the own question aboutits function in the environment they act.
Some harmful effects are country-citymigration, creation of false values and evenseriously identity disorders.
Teleducation and teletraining are rationalways of introducing integration to economicalsociety that can bring them a best lifestandard (health, primary provision, etc.)without losing cultural and ecological values.
The described social effect is also producedto macroscopic level between developed and
817
THE IMPACT OF NEW SERVICES
developing countries.
6. A particular social impact on the individualis produced in the case of "managers", whopractice in a lesser degree personalcommunication due to selection that they do
of useful means. In this case, they use morepersonal computer, telephone, andvideoconference (in all fixed or moviblecases) and they communicate with othermanagers who have the same means what diminishthe diversification of inf., increasing the
communication through devices. All that
implies a lesser degree of communicationbetween members in the family, humancommunication, and, in general, lessersensibility what means an isolation of real
world and of cultural values of theirenvironment.
7. For a lower-wage person who accounts for
unilateral communication (radio and television)
it is possible to verify a loss of spontaneity,adoption of inexplicable life ethic pattern and
isolation feelings.
8. For people who live in a developed country,the fact of having a bilateral communicationmedia (for example, telephone) is converted ina life necessity rather than a mere business.
9. In the developed countries' integration context,it is interesting distinguish that satelliteservices allow such integration mainly to
cultural level but that are costly for massiveuse in small-scale business.
Arrival of optical fibers in submarine wiringaround continents open borders and eliminateslegal problems, acceding gradually to suchcable all countries according their technical-economical possibilities. It is wellknown thatonce amortized transmission systems via opticalfibers, these are cheaper than satellitesystems; therefore, large perspectives ofregional integration to social, economical andpolitical level are opened.
An example of what we mention above is UNISURcables in the Athlantic Ocean that will linkBrazil, Argentina, Chile and the Americas II
on the Pacific Ocean, and that besides wouldlink Peru, Ecuador, Colombia, Caribe and
Mgxico completing the integration ofLatinoamerican communication medias and,therefore, of economical-financial means.
A high level of communication are the basis ofregional cooperation markets and simplify theburocratic frontiers between developingcountries.
CONCLUSIONS
The complementation of the traditional and newservices of telecommunications allows to the
man to be present in many places at the same
time, so that this requires a review of the
social and economical schemes of developingcountries to verify that they do not stop thisgreat capability, but prosecute it to obtainthe development that everybody wishes.
There are services of telecommunications thatgive additional profits containing many moreusers and solving problems of external plantssuch as: cellular telephony and rural satellitalcommunications. The telecommunicationsadministrations of developing countries couldmake comparative studies to promote investmentsin such services. The same case is verified innew methods of transmission, such as: theoptical fibers.
Itisavery important fact the transference of
the point to point traffic from satellites to
the optical fiber wich is allowing to disposefree capacity to rural communications.
Traditional services such as FAX and theelectronic mail should be massified in developingcountries in order to improve the management andthe creation, aspects that normally present greatdeficiencies in such countries.
The optical fit-er submarine cable installationrepresents a very attactive cooperativeinvestment between the latinoamerican developingcountries, because they have advantages ofgradual access and they eliminate the cablepassing across different cities on which dependsthe reliability of the links.
It is absolutely necessary that the increase ofthe methods of telecommunications not became in aunilateral increment of the information receivedfrom developing countries, but promote the greatactivity of communications in the region, so thatit increases the economical development and alsothe maintenance of the cultural identity.
REFERENCES
1) Carlos Rojas, Miguel de la Sotta, Efectos so-ciales de las Telecomunicaciones. Proyecto deInvestigation en proposici6n. Universidad deSantiago. Chile 1991.
2) Miguel de la Sotta, "Fiber Optics applicationsin developing countries". British ColumbiaUniversity. Vancouver, Canada. (Conferencia),agosto 1991.
3) De la Sotta M. "Fibre gptica en Chile, una propuesta tecnolggica". Congreso: La Ingenieriachilena en el siglo XXI. Institute de Ingenie-ros. 23 al 26 de mayo de 1989. Santiago. (r'u-blicado en 1990).
4) De la Sotta M. "Fibre Optica, nueva via de de-sarrollo". Anuario de ComputaciOn e Informgti-ca. Diciembre 1989.
818
THE IMPACT OF NEW SERVICES .
5) Miguel de la Sotta, lnforme sobre "Efectes delas Nuevos Tecnologias y en Formackin sobrelos Paises en Desarrollo" para el "Centre d,
Ciencias y Tecnologia para el Desarrollo" d,
las Naciones Unidas. N.C. 1986.
6) Seminario "Las Telecomunicaciones y -.0 in,i
dencia en el desarrollo ccon6mice social d.
Amgrica Latina y el Caribe". TELNLCA'86.Organizan: Uni6n Internacional (I( T,lecoraini-
caciones, Ministerio de Transport, v 1,1ecomunicaciones, Comisign Econ6mica para AmgricaLatina y el Caribe. CEPAL. Mayo 1986. Santi.1-go, Chile.
7) Seminario "Las Telecomunicaciones come fa,,1-de desarrollo". Universidad de Santiago. !'11%,1985. Santiago, Chile.
8) De la Sotta M. "The fiber optics role in the
development of communication facilities".Second LASTED International Conference,Telecommunication and Control" 10 al 17 de
diciembre de 1985. Rio de Janeiro, Brasil.
9) De la Sotta M. "Aspectos bgsicos de la introducci6n de la tecnologia de la fibra Apticaen paises en via de desarrollo" 2° Simposiobrasileiro de telecomunicaciones. (CPQDTELEBRAS) 3 al 6 de septiembre de 1984. (am-pines, Brasil.
10) Seminario sobre "Nuevos Servicios en Teleco-municaciones" (AHCIET, ENTEL, CTC. Autor. Mayo 1984. Santiago, Chile.
11) De la Sotta M. "La fibra 6ptica y la extcnsi6n de los servicios de telecomunicaciones"I Seminario Nacional de Telecomunicaciones.Instituto Profesional de Valdivia. 21 al 24
de noviembre de 1984. Valdivia.
The author
Miguel C. De la Sotta was horn in Santiago deChile in 1948. He received his ElectricalEngineer title in 1975 frog Universidad Tgcnicadel Estado, Santiago Chile. qe own his Masterdegree from Universidade Federal de Rio de Ja-neiro, Brazil in 1981. Mr. De la Sotta workedas professor and researcher from 1970 to 1991at the Universidad de Santiago de Chile in thetelecommunications department. He has about 20publications in fiber optics and related areas.In 1992 he jointed ENTEL -CHILL working in theOptical Projects section.
A StudyThe Telephone in Daily Life:
of Personal Telephone Use in the United
Robert LaRose, Ph.D.Michigan State University
East Lansing, MI USA
Herbert DordickTemple University
Philadelphia, PA USA
1. ABSTRACT
States
The results o'' a national diary survey of personal telephone use in the UnitedStates are presented. Basic statistics about individual telephone usage patternsand adoption of innovative telephone services and products are included.Implications for policy, marketing and future multinational research areexamined.
2. TOWARD THE PERSONAL TELEPHONE
Advances in telephone technology and services arealtering the character of telephone use in manycountries around the world. Once a sharedhousehold appliance, the telephone is evolvinginto a highly personalized communications medium.Multi-line phones, multiple extensions andcordless phones give many telephone users a senseof having their own personal telephone even inmulti-person households. The diffusion ofanswering machines, unlisted numbers and customcalling features gives users new abilities tocontrol their communications to match individuallife styles. New services such as the IntegratedServices Digital Network (ISDN), Custom LocalArea Signalling Services (CLASS), voice mail andPersonal Communication Networks (PCN5) will makeit possible to further adapt the operation of thetelephone for personal needs. The telephone isevolving away from McLuhan's characterization (1)as the, "irresistible intruder" and is turninginto an automated personal assistant which helpsus to manage our social environment.
In the century since the telephone was introducedthere has been little sustained social researchinto the personal uses of the telephone (2). Theavailable published research is based on highlylocalized samples, uses the household rather thanthe individual as the unit of analysis or reliesupon potentially unreliable retrospective selfreports of individual telephone use (3).Unpublished proprietary market research studiesabout telephone use abound within the corporateannals of the telephone industry, but often alsoshare one or more of these limitations.
The primary goal of the present study is to fillthis void in published research about telephonebehavior. This paper focuses on describing thebasic dimensions cif personal telephone use andexplores interest in new services that are justnow being introduced into public networks in theUnited States. Implications of the findings forpolicy and marketing issues are discussed. Thedata were collected in the spring of 1991 under agrant from the Bell Atlantic Corporation.However, the opinions expressed in this paper arethose of the authors and do not necessarilyreflect those of Bell Atlantic.
3. RESEARCH METHODS
The survey was directed to a national sample oftelephone households, with an over-sampling ofhomes located in the Bell Atlantic Region.Random digit dialing techniques were used torecruit the respondents by phone. At the time ofthe initial contact, a brief questionnaire wasadministered to the telephone decision maker ineach household to determine householdcharacteristics. The telephone deci ion makerwas defined as that person in the household
BEST frin AMU:EU819
responsible for making decisions about telephoneservice. A package containing cash incentivesfor the respondents, a cover letter, a separatediary for each member of the household age 12 andolder, and a return envelope was mailed to eachhousehold that agreed to cooperate with thestudy. Specimen questionnaires and details ofthe research methods and findings of the studyare available in a technical report (4).
Completed mail surveys or diaries were receivedfrom 503 households, or 45 percent of those whoagreed to receive the package. In all, 747responses were received from these households,including those completed by the telephonedecision maker and other household members age 12or older. Since the overall response rate waslow and an intentional bias had been built in tooversample homes in the Bell Atlantic region, thesample was weighted against available census andsurvey data. The age and sex characteristics ofthe sample were compared with 1988 U.S. Censusestimates (5). Data about householdcharacteristics, including household size, incomeand location (by Bell operating region) werecompared with data from the Current PopulationSurvey, as compiled by the Federal CommunicationsCommission to examine the characteristics oftelephone households in the United States (6).
4. THE TELEPHONE IN THE AMERICAN HOME
The telephone is a commonplace item in theAmerican home. Only about one-quarter (24%) ofthe respondents had a single telephone in theirhomes. Almost two-fifths (38%) had twotelephones and nearly as many (37%) had three ormore telephones in their households. The averagenumber of telephones per household in the surveywas 2.55. The kitchen (44%) and the living room(22%) are the most common locations for theprimary telephone. Ten percent of the homes inthe survey reported that they had more than onetelephone line in the home. American homes arefilled with various telephone-relatedparaphernalia, including about two-fifths (39%)with an answering machine or a cordless phone(38%). One in twenty homes had personalcomputers with modems and facsimile machines hadmade an appearance in one percent of the homessurveyed at the time of the study. The Americanconsumer's telephone is relatively "featurerich." Over half of the homes surveyed havephone instruments with touch-tone (67%), lastnumber redial (69%), ringer switch (69%) or speeddialing (50%) capabilities.
The telephone is the largest single householdtelecommunications expenditure. The averagemonthly total expenditure for telephone servicesand equipment in a "typical month" was $49.83.The average expenditure for cable televisionservice was $24.06, while an average of $7.61 wasspent on home video.
(
Abuse of the telephone by children is animportant concern in many U.S. households. Inonly about a fourth (26%) of the households withchildren were there no rules governing the use ofthe telephone. Half (54% reported a ban on 900,540 and 976 calls. In thcee-fifths (58%) of thehomes with children present, calls were notpermitted at certain times. "Local calls only"was the rule in two-fifths of these households.
There are also growing concerns in the UnitedStates about unwanted calls that enter the home.Over three-fifths (62%) of the respondentsreceived telephone solicitations from acharitable organization during the monthpreceding the survey. Nearly two-thirds (65%)had problems with callers who hang up on themwhen they answer the phone. About six-tenthsalso received telemarketing calls (59%) andalmost a fourth (23%) were surveyed by telephone(not including our survey) during the previousmonth. Almost three-tenths (28%) of therespondents reported receiving unwanted callsfrom someone they knew while an eighth hadabusive or obscene calls.
5. INDIVIDUAL USAGE PATTERNS
All participants in the study were asked to makenote of the phone calls they made and received intheir homes for a period of one week. Eachhousehold member age 12 or older was providedwith a personal telephone diary in which theyrecorded the time and date of each call, the areacode and exchange of the other party to the calland its length. They also identified the outcomeof the call, their relationship to the othercaller and the purpose of the call. Finally,they made note of the activation of any specialcall features associated with each call.
Three different types of analyses were conductedto characterize calling patterns. First, theoutcomes, relationships, purposes and featuresused in almost 13,000 calls recorded in thediaries were tabulated by select individual andhousehold characteristics. These analyses werebased on the total number of calls, rather thanon the total number of respondents contained inthe sample. Next, numerical indices ofindividual telephone use were computed from thediary data and these were cross-classified byselected individual and householdcharacteristics. Finally, multiple regressionanalysis related the quantitative measures oftelephone usage obtained from the diaries todemographic and household characteristics.
5.1 CALL CHARACTERISTICS -- WHO, HOW, WHY?
Who do Americans call, for what purposes, withwhat means and with what results? Family membersaccounted for over a third of all calls placed orreceived in the home. Personal friends accountedfor about three tenths of all calls. Business orprofessional calls were another fifth of allcalls made (Figure 1A). Calling patterns diZferedmarkedly by individual and householdcharacteristics. Older adults, ages 50 to 64,communicated by phone with family members morethan other age groups, concentrating overtwo-fifths of their calls in this category.Young respondents under age 25 made about halftheir calls to personal friends.
Why do they call? About a fourth of all thecalls recorded were to chat or socialize.Another fifth involved the exchange ofinformation. Calls in which appointments weremade, news was exchanged, tasks were coordinatedor problems discussed each accounted for about atenth of the calls recorded in the diaries(Figure 1B). Call purposes varied almostlinearly by age, with the most marked departuresfrom the average at either end of the age
820
spectrum. Teen respondents devoted two-fifths oftheir calls to socializing, while respondentsover age 75 had socializing as the primarypurpose in only about a seventh of their calls.Both teens and older seniors shared 3 higher thanaverage propensity to exchange news in the callsthey made. Teens seldom had calls in whichappointments were arranged, tasks coordinated orproblems discussed. Females used the phone tochat or socialize more often that did males.
How do they call? Four-fifths of all calls werecompleted without the activation of any specialcall features. Answering machines, SpeedDialing and Call Waiting were each reported usedin about one call in twenty. Call features wereactivated most often by young adults, 18 to 24,but hardly ever by those over age 75 or between50 and 64. Speed dialing was especially popularamong younger seniors, age 65 to 74.
5.2 INDIVIDUAL CONSUMPTION PATTERNS
A series of individual telephone usage statisticswere compiled from diary data (7):
Total Calls are the total number of callsrecorded in the diary. A maximum of 60 callscould be recorded. Twenty respondents completedmore than 60 calls during the survey week.
Total Minutes are the total number of callminutes aggregated across all calls listed.
Intra-Exchange Minutes are the minutes of callsin the same local exchange and area code as therespondent.
Local Inter-Exchange Minutes are the number ofminutes in the survey week spent on calls thatare in the same area code as the respondent, butnot in the same local exchange.
Distant Inter-Exchange Minutes are the number ofminutes spent on calls to other area codes.
Note that the latter three categories are bothmutually exclusive and exhaustive, but do notconform to conventional definitions of the scopeof calls in the United States. For example,distant interexchange calls do not include allcalls that pass between Local Access andTransport Areas (LATAs). since some area codesinclude multiple LATAs. Thus, these are not thesame as "long distance" calls as usually defined.International calls (there were about thirty ofthese in all of the 12,000 calls) were countedtogether with other distant interexchange calls.
On average, respondents recorded about nineteentotal calls (Mean = 18.81) during the surveyweek. The average time spent on the phone wasslightly over two hours (Mean = 126.29 minutes),or about 18 minutes per day. This is almostexactly half the amount of time that respondentsthemselves estimated they spend on the phone in atypical day (Mean = 37.83 minutes). About halfthis time (Mean = 69.58 minutes) was spent onlocal inter-exchange calls, defined as thoseinside the same area code as the respondents butoutside their local exchanges. The remainderwere split between local intra exchange (Mean =27.54 minutes) calls and distant interexchangecalls to other area codes (Mean = 28.98 minutes).
5.3 MULTIPLE REGRESSION ANALYSIS OF PHONECONSUMPTION
To better understand patterns of relationshipbetween individual and household characteristicsand patterns of telephone usage, a series ofmultiple regression analyses were performed.Multiple regression is a statistical techniquewhich allows the researcher to explain variationin a dependent variable of interest from a
RELATIONSHIPSOF CALL PARTNERS
FIGURE 1A
' BASED ON 12,902 CALLS.
(27.-1L.P1,55
COLLEA44'A4%
PURPOSESOF CALLS
FIGURE 1B
BASED 014 12.902 CALLS
combination of independent, or predictor,
variables. The independent variables included a
wide array of standard personal and mediacharacteristics (8). The dependent variableswere the telephone consumption statistics.
In addition to standard demographic and householdcharacteristics, the independent variable setincluded three types of variables of specialinterest. Respondents were classified accordingto the family life style of the home in whichthey lived. For example, Starting Out Singlesare singles between 20 and 34 with no children.In the same classification scheme, Empty Nestersare married couples in which the telephonedecision maker is between 50 and 64 but in whichthere are no young children. Families withChildren, Families with Teens, Young Couples,Mature Singles, Young Seniors and Older Seniorsare the other categories in this set.
821
Respondents were also classified according totheir orientr.tion to two basic motives for usingthe telephone. Social Enjoyment Seekers arethose who agree with statements like "I use thephone because I enjoy it," and "To show others Icare." Utilitarians are those who agree "Thephone is good in emergencies," and that they usethe phone to save time or money (9). Finally,respondents were classified as Social Networkersor Information Processors according to patternsof telephone set and service features found intheir homes, as described below.
What groups have much higher than average levelsof weekly telephone use? These includehomemakers (203 minutes per week), females (174),persons aged 25 to 34 (158), Social EnjoymentSeekers (185) and persons in homes that score inthe mid range of the Social Networkers innovationcluster (170). Other groups had much lower thanaverage levels of telephone use. These arepersons those who scored low on Social EnjoymentSeeking (76 minutes per week) or Utilitarian (90)phone usage motivations, males (83) andindividuals over age 75 (62). Only group meansthat differed from the overall mean by twostandard error units were regarded to have asignificant difference from the group means.
Multiple regression results help to clarify thesecomplex patterns of relationships. Figure 2
shows the multiple regression results for totalphone consumption. Total telephone minutesrecorded in respondent diaries were bestpredicted by sex, age, Utilitarian and SocialEnjoyment phone motives and media habits.Females, heavy moviegoers and those scoring highon utilitarian and enjoyment motives also tendedto have high levels of telephone consumption.Teens and persons age 75 or older had relativelylow levels of total telephone use.
Total calls (not shown in figures) were predictedby sex, age, family life style, marital status,and utilitarian motives. Females, persons
between the ages of 25 and 34, Starting OutSingles and Utilitarians tended to have morecalla while singles (apart from those living inStarting Out Single households) and those overage 75 had lower calling levels. Distant inter-exchange minutes were predicted by maritalstatus, education, sex and enjoyment motives.Females, better educated respondents, those withhigh phone enjoyment scores, young adults 25 to34 and females tended to have more long distanceminutes. Singles and persons with more than acollege education (after controlling for othervariables) tended to have lower long distanceusage. Time spent on local intra-exchange callswas predicted by sex, education, media habits andtelephone motives. Females, those with somecollege education and those scoring high onutilitarian and enjoyment motives also tended tohave high local calling levels.
S. TELEPHONE INNOVATIONS
The public telephone network is in the midst of atransformation from "plain old telephone service"to an all-digital "intelligent" broadbandnetwork. As these new technologies are deployed,there is a danger that economically disadvantagehouseholds will be left behind, further wideningthe gap between rich and poor. Therefore, animportant issue is equitable access to newtelecommunications products and services. Toexamine this issue, household income was used tocross-classify selected results presented below.
With respect to currently telephone set andservice features that are currently available,the gap between rich an poor is relativelymodest. In homes were the total annual income is510,000 or less, the incidence of features likeanswering machines, ringer switches, last number
TOTAL MINUTESMULTIPLE REGRESSION RESULTS
FIGURE 2PREDICTORS
FEMALE
JOY SEEKER
MOVIEGOING
UTILITARIAN 0.1
TEENAGER -0.082
OVER 76 -0.096
SINGLE -0.098
COLLEGE 0.069
-0.2 -0.1 0 0.1
0.231
0.2 ;
0.2 0.3
STANDARDIZED BETASMULTIPLE 11..52SIGNIFICANT PREDICTORS. p < .001
redial and call waiting is about the same as itis in the general population. However, theavailability of cordless phones, touch tonephones and speed dialing features is considerablyunder the overall average incidence rate.
5.1 INTEREST IN NEW TECHNOLOGIES
To establish patterns of interest in newtechnologies, telephone decision makers wereasked to rate eight telecommunicationsinnovations on a seven-point scale, with 1
meaning "no interest" and a 7 "very interested."The services were described as follows:
4 Voice Nail which functions much like ananswering machine, allowing you to record andretrieve messages from home and remote locations.You will also be able to transmit messages tomultiple patties simultaneously and to leavepersonalized messages for individual callers.
4 Videophone which will allow you to seepictures of the people you call as you talk tothem.
4 Personal Communications Networks (PCNs)which allow you to carry a lightweight cordlessphone with you and place calls from wherever yougo.
Caller ID which will display the number ofthe parties who call you on a miniature computerscreen next to your phone.
Data Base Gateway, offering access to avariety of computerized banking, shopping,entertainment and home information services.
Digital Telephone (ISDN), which will letyou conduct telephone conversations andhigh-speed data transfers simultaneously on asingle phone line.
4 Energy Monitoring will let you monitorutilities and control heating and coolilig systemsin your home and give reduced rates to users wholimit their energy consumption at times of peakdemand.
Fire and burglar alarms connected to yourhome phone.
Of the services tested, fire and burglar alarmservice attracted the most interest, with three-fifths of the telephone decision makers ratingthem above the midpoint of the scale (Figure 3).About half are interested in Caller ID and energymonitoring, while two-fifths are interested inPersonal Communication Networks. A third of thetelephone decision makers are interested invideophone service, and a fourth are interestedin voice mail, videotext gateways and ISDN.
Figure 3 also shows interest in new technologiesby household income. The most striking aspect ofthese results is the high levels of interestexpressed by telephone decision-makers in lowincome households. Their interest in voice mail,ISDN and data base gateways is particularly keen,almost twice the levels of the entire sample.Homes in the lowest income category include asurprising number with personal computers, so itappears that many of the low income respondentsare interested in telephone services that willextend the power of computer technology. About athird of the low income homes are comprised ofstudents, which helps to explain this somewhatsurprising finding. However, interest in thesenew technologies is still much higher thanaverage in the non-student low income homes.Perhaps others saw these services as a means tosubstitute for investments in answering machinesand computer technology. It should also be notedthat no prices were mentioned for the various newproducts and services.
Homes with between $35,001 and $50,000 in annualhousehold income were generally the leastinterested in new products and services.Personal communication networks were the singleexception. Upper income homes generally hadabout average levels of interest in all of theinnovations tested, with the pointed exception ofvideo telephone service. Perhaps upper incomeconsumers can better afford to substitute travelfor telecommunications and may be more familiarwith the prices (and technical limitations) ofthe videophones currently available.
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NEW TECHNOLOGIESAND LOW INCOME HOMES
FIGURE 3
VOICE MAIL
VIDEOPHONE
PCN
CALLER ID
GATEWAY
ISDN
ENERGY MONITOR
.011M VA% \tal. \111,
\ V.\\%'%\\IM.
SIM\ II,EBEMBE
40
40
SO
\\MOtittl&Wili.
02
87
yr ss "ALARM SERVICE 't12
s`\.:L.-
0 10 20 30 40 50 60 70 80
PERCENT INTERESTED
rT Total EL-T.:410.001
5.3 INNOVATION CLUSTERS
Are there "innovation clusters" which may predictthe adoption of new products and servicescomparable with those already adopted? Priorresearch (10) suggests the existence ofinterrelated subsets of information technologyand service products which may predict theadoption of new products which are compatiblewith those already adopted. In the presentstudy, awareness and adoption of telephone setfeatures and custom calling services were factoranalyzed to detect underlying clusters ofinnovations. Two distinct factors were found:
Social Networkers are consumers who have alreadyadopted or who have high levels of awarenessabout products and services that are especiallyuseful in managing and maintaining socialcommunication networks. These include answeringmachines and phone sets with speed dial,speakerphone, conference call, and last numberredial capability. The currently availablecustom calling features (speed dialing, 3-waycalling, call waiting and call forwarding) arealso included.
Information Processors are consumers who have orhave heard of telephone features and serviceswhich give them access to information processingand display functions which are used to managetelephonic communication. Many of these alsoseem to have a privacy management function incommon. These include lock out devices, andtimer and called party number displays. Therelated network services are CLASS services suchas Call Trace, Caller ID, Call Block andDistinctive Ring -- but not automatic redial.
To examine the relationship of these two segmentsto other characteristics, a categorization schemewas created based on taking the interquartileranges of an additive scale based on the numberof innovations in each category that had beenadopted in the household. That is, SocialNetworker homes were defined as those in the topquartile of scores on a numeric scale formed bycounting the number of innovations in thatcategory that were present in the home.
Social Networkers had distinctive telephone usagepatterns. They tended to use the telephone morefrequently than respondents in the total samplewhen they had somethini important to say or hadgood news to report and when they wanted tocommunicate anger. They also tended to calltoll-free 800 numbers from home more frequentlythan others. Social Networkers were likely toseek information from the telephone network.When not wishing to receive call at certain time,they were likely to screen calls with theiranswering machines rather than turn the ringeroff. In Social Networker homes with children, aspecial set of rules prevailed. Restrictions onaudiotext calls were almost universal andrestrictions on the time of calls and the scopeof calls (i.e., local calls only) were alsohighly prevalent. Social Networkers tended to beconcentrated in blue collar occupations.
Among respondents who have been categorized asInformation Processors, there was a greaternumber of households with personal computers andmodems than among the total sample. MoreInformation Processor households had monthlytotal telephone bills less than $35 than in thetotal sample. They were less interested thanaverage in the various new telephone servicesdescribed in the preceding section. Informationprocessors appear to prefer using the telephoneto communicate anger more than other groups inthe sample, although they were more likely tostate that there were no situations in which theyparticularly prefer the telephone. In theirhomes, the rules for children tended toward time
823
of nay and call length restrictions (hence, thecall timers and phone displays?). When notwishing to receive call at certain time, theywould turn the ringer off or unplug the telephonerather than screen calls. When problem callspersisted, they notified the phone company ratherthan rely on their answering machines. Theyseldom used information-oriented audiotextservices but seem to be very heavy users of adultentertainment, dial-it polls and contests offeredover 900 and 976 numbers. Demographically, theInformation Processors included concentrations ofprofessionals and persons with graduate degrees.
6. DISCUSSION
Finally, we turn to the potential marketing andpolicy implications of these results andsuggestions for future research.
6.1 MARKETING IMPLICATIONS
What changes in consumer telecommunicationsmarketing practices might be in order as we makethe transition to the personal telephone in theUnited States? Perhaps the most obviousimplication is to refine the focus on heavytelephone users and to move away from simplisticdemographic and usage-based marketing strategies.For quite some time now, long distance carriersin the United States all seemed to concentrate onvolume-based discounts aimed at heavy longdistance users. Recently, long distance consumermarketing has taken a new tack, focusing onrecruiting entire networks of telephone userswith plans like MCI's "Friends and Family." Inthe context of the current study, these appealsare likely to work well with the "SocialNetworkers" and "Social Enjoyment Seekers," butare likely to miss those with more practical andinformation-related orientations to the telephonethat are more common in upscale homes.
In the U.S. local exchange service market therehas been little incentive to concentrate on highvolume callers, since local telephone calls areusually not subject to message unit or per-callcharges and are typically included in the flatmonthly charge. This is beginning to change withthe advent of usage-sensitive consumer tariffsand local exchange competition. In three-fifthsof the homes in the survey, the heaviest phoneuser and the telephone decision-maker were oneand the same. Thus, even where usage sensitivepricing is not found there is still an incentiveto develop customer relationships with the heavyusers to protect against competitive marketing.
The apparent existence of two distinct"innovation clusters" for telecommunicationsequipment and services also has some potentialmarketing implications. The appeal of newconsumer telephones and network services might beenhanced by packaging them with other, similarservice features. For example, the most "featurerich" consumer telephones today tend to have amixed bag of features 'hat are likely to appealto both the Social Networkers (e.g., speakerphonecapability) and Information Processors (e.g., LCDdisplays) among us. However, it is possible tofind consumer telephones with seemingly everypossible variation of feature combinations. Theinnovation cluster concept suggests that fourbasic configurations might be the most efficient:a basic "plain old telephone," one with SocialNetworker features, one with InformationProcessor features and one with both sets.
Looking forward to new telephone features whichwill be possible with the future evolution of thepublic network, phones marketed with the SocialNetworkers in mind should have "feature buttons"that will substitute for network services thatappeal to the social networkers, such as a 3-waycalling capability, call forwarding and call
waiting, which today are available only asnetwork services. For the InformationProcessors, feature buttons and display optionsshould be provided for the so-called CLASSservices (e.g., Caller ID, Call Block,Distinctive Ring). Equipment manufacturers mightwish to create phones that perform thesefunctiona themselves with internal software whichoperates on Automatic Number Identificationinformation, rather than leaving network serviceproviders to program these functions on theircentral office switches.
For their part, network service providers alsohave some obvious "packaging" opportunities. Atthis point, it appears that bundling all the newCLASS services with existing custom callingfeatures is NOT an especially good idea, sincethese two feature sets seem to reflect quitedifferent sets of needs. To counter the abilityof equipment manufacturers to create hardwaresubstitutes for network services,telecommunications carriers might think aboutbundling the auto redial CLASS feature -- theonly such feature which fits into the SocialNetworker cluster -- and voice mail with existingcustom calling features. Auto redial as atelephone set feature seems to fit well with theSocial Networker life style and they seem to relyheavily on their answering machines, so autoredial and voice messaging as telephone servicefeatures could work well here. Telephoneservices for the Information Processors mightentail new varieties of information to project onthe telephone display screen. Calling Party Name-- in addition to calling party number -- is oneobvious possibility. Displays of actual connecttime (as opposed to off-hook time that telephonesets display), the running total cost of a longdistance calls in progress and the time of day atthe calling destination are some otherpossibilities. Telephone lock out devices alsofit into the Information Processor innovationcluster. In the form of a network service, thismight translate into a personal identificationnumber that would enact varying levels of servicerestrictions (e.g., local calls only, no 800 or900 calls).
The extension of the present research to the manyother countries comprising the world consumertelecommunications markei; might also proveinsightful, especially as a means of adjustingassumptions about telephone use developed indomestic markets to international markets. Tocite but one example, the results of a recentstudy in Japan showed remarkable differences intelephone behavior between U.S. and Japanesehouseholds (11). Only half of Japanese homes,compared with three-fourths of U.S. homes havemultiple telephone sets, for example. Callingbehavior also differs considerably. Total weeklytelephone consumption is slightly higher inJapan, but there are very marked sex differences,with extremely low usage for males over 30, aboutan eighth of the usage rate for females. Thereare sex differences in the United States, too,but they are much less pronounced, more on theorder of two or three to one.
If, as a Japanese consumer electronicsmanufacturer, we took our cue from the domesticmarket we might churn out phones laden with"Social Networker" features that appealespecially to the female heavy telephone user,but neglect the male information processors whoconstitute a large slice of the U.S. market.Likewise, comparing our U.S. data to thatcollected in Germany and France (12), it appearsthat Americans are much heavier telephone usersoverall and that telephone instruments are muchmore ubiquitous in the American home than inWestern Europe. A European-based manufactureraiming for the international consumer telephonemarket might well miscalculate by offering
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expensive, but durable and aesthetically pleasinginstruments suitable for use as the household"main station," but unsuitable for the role ofubiquitous -- but virtually disposable -- phonesthat fit in with American life styles.
6.2 POLICY IMPLICATIONS
The present study has possible implications forseveral important policy issues relating to thefuture of telephone policy in the United States:local calling plans, privacy, and the futuredevelopment of Universal Service.
Regarding local calling plans, an important issueis their potential impact on groups with limitedor fixed incomes. In the present study we foundthat members of low income households were ratherheavy telephone users. Persons living inhouseholds with annual incomes of $10,000 or lessmade about fifty percent more calls than theaverage and the time spent on intra-exchangecalls was also well above average. Thus, callingplans which impose message unit or per-callcharges could substantially increase the cost ofservice for those who are least able to affordit. In fact, time spent on intra-exchange callsgenerally exhibited an inverse relationship tohousehold income -- the lower the householdincome, the more time spent on local calls. Thisincome pattern did not hold for local inter-exchange calls, however. Senior citizens ages 65to 74 have average levels of intra-exchangecalling, but are well above average in the localinter-exchange category, so they might also beadversely affected by message unit charges.
The present study has several interestingimplications for the current controversies abouttelephone privacy. First, the overall incidenceof nuisance calls is quite high on a monthlybasis. Current measures aimed at curbingtelemarketing calls only address one of the threemost frequent types of problem calls, however.Solicitations from charitable organizations andhang ups are even more frequent, but havereceived relatively little attention.Significantly, the incidence of problem calls wasrelatively low in the Bell Atlantic region, whichat the time of the survey was the region with thewidest availability of Caller ID. It isinteresting to speculate whether thisavailability and the attendant publicity was thecause of the lower nuisance call rates. In thissame vein, there is considerable interest inCaller ID throughout the entire sample, perhapssuggesting that the average telephone consumer ismuch more receptive to the service than the civilliberties and consumer advocates who have sovigorously opposed it.
Finally, regarding the future evolution ofuniversal service, it is interesting to note therelatively widespread interest in severalprospective new services, even among lower incomehouseholds. Results such as these could be usedto argue for a relatively "feature rich"Universal Service, perhaps one that would includeISDN, voice mail and alarm servic.?.
6.3 RESEARCH IMPLICATIONS
In closing, we call upon our academic colleaguesand telecommunications professionals in PacificRim countries to assist us to replicate andextend our study within their own nationalterritories. The value of data like these astools in marketing and policy decisions hasalready been discussed. In fact, we suspect thatthe value is so obvious that many telephoneadministrations around the Pacific Rim havealready carried out studies of their own onrelated issues. By making more such studiespublic and by replicating them in the spirit ofcross-cultural scholarship, we can perhaps create
a shared body of knowledge that can guide thefuture evolution of the world's telephone serviceto the benefit of all.
Further replication of this research also offersfertile ground for comparative research with morescholarly ends in view. For example, it would beinteresting to understand the factors that areresponsible for the marked difference in maletelephone behavior between Japan and the U.S. orwhich lead Americans to be much heavier telephoneusers than Europeans. A host of economic, policyand cultural hypotheses come to mind, which theaddition of further "cells" of the study in othercountries might help to sort out.
With the entire world now on the threshold of theage of the personal telephone, we also have aunique opportunity to examine the social andeconomic effects of the telephone. In thislight, it would be instructive to comparetelephone behavior in countries with the mostadvanced telecommunications infrastructures, suchas Singapore and France, with those, such as theUnited States, who are now somewhat "behind thecurve." This would answer questions about thesocial impacts of the telephone which are ofintrinsic interest to social scientists, butmight also give policy makers in variouscountries useful information as they makedecision about the future development of theirown information infrastructures. Additional timepoints and more narrowly focused metropolitanarea studies would also help to examine theeffects of the introduction of new technologieson human behavior.
7. NOTES
1. McLuhan, Marshall. Understanding Media:The Extensions of Man. New York: The NewAmerican Library, 1964.
2. Following the ground breaking collection ofessays edited by Ithiel de Sole Pool, The SocialImpact of the Telephone, in 1976 (Cambridge, MA,MIT Press), Herbert Dordick reported on "TheSocial Uses of the Telephone" in InterMedia in1983 (Vol.11, No. 3), followed by FrederickWilliams and Dordick's 1985 study, "SocialResearch and the Telephone" (Annenberg School ofCommunications, University of SouthernCalifornia).
3. For example: Singer, Benjamin D., TheSocial Functions of the Telephone. Palo Alto,CA: R&E Research Associates, 1981.Taylor, Lester D., Telecommunications Demand: ASurvey and Critique. Cambridge, MA: Ballinger,1980.Mahan, Gary P. The Demand for ResidentialTelephone Service. East Lansing, MI: Instituteof Public Utilities, 1979.LaRose, Robert and Jennifer Mettler, "Social andAntisocial Uses of the Telephone," Paperpresented to the International CommunicationAssociation, Dublin, Ireland, 1990.
4. Dordick, Herbert and LaRose, Robert. TheTelephone in Daily Life. Michigan StateUniversity Department of Telecommunication, EastLansing, Michigan, April, 1992.
5. U.S. Bureau of the Census, CurrentPopulations Reports, Series P-25, Nos. 519, 917.
6. Belinfante, Alexander, "TelephonePenetration and Household and FamilyCharacteristics", Common Carrier Bureau, FederalCommunications Commission, May, 1989.
7. About five percent of the calls recordeddid not have area code information, while sevenpercent lacked local exchanges.
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8. The following independent variables wereincluded in these analyses. Stepwise multipleregression was used with a minimum F to enter of3.84.
AGE 12-17, coded 1 if between 12 and 17, 0 ifnot.AGE 25-34, coded 1 if between 25 and 34, 0 ifnot.AGE 75 UP, coded 1 if 75 or over, 0 if not.
COLLEGE, coded 1 if attended college withoutgraduating, 0 if not.EDUCATION, a seven-level ordinal scale ofeducational attainment.GRAD, coded 1 if more than a college education, 0if not.TELEPHONE ENJOYMENT, an additive scale ofenjoyment motives for telephone use.MOVIES, the number of movies attended in thepreceding month.NSI SEGMENTS, coded 1 if a member of a group, 0if not.
KIDS are families with young childrenTEENS are families with teensSTART are starting out singlesCOUPLES are young couplesMATURE are mature singlesEMPTY are empty nestersSENIORS are young seniorsOLDERS are older seniors, 75 or older.PAPER TIME, the amount of time spentreading the newspaper the previous day.RADIO TIME, the time spent listening toradio the previous day, in minutes.SEX, coded 1 if female, 2 if male.SINGLE, coded 1 if never married, 0 if not.TELEPHONE APPREHENSIVE, an additive scalemeasuring telephone apprehension.UTILITARIAN, an additive scale ofutilitarian motives for telephone use.WORK AT HOME, scored 1 if there is a homeworker, 0 if not.WORK STATUS, scored 1 if employed, 0 ifnot.
9 Additive scales were constructed throughthe process of factor analyses.. The SocialEnjoyment scale was constructed from nine items,while the Utilitarian scale had six items.
10. Rogers, E. Communication Technologies, NewYork, The Free Press, 1987.LaRose, R. and D. Atkin, "Audiotext: Discoveringa new mass medium" Journalism Quarterly, 68(3),1991, pp. 354-362.Wolinsky, Carol. "Residence TelecommunicationsPatterns Study," Washington, DC, Bell AtlanticCorporation, 1986.
11. Ogha, Kimiko. "Changing CommunicationsActivities with the Progress of TelephoneServicls." Paper delivered at the 23rd AnnualConference of the International Institute ofCommunications, Montreal, Canada, September,1992.
12. See Dordick and LaRose, op. cit.
IS THE WORLD READY FOR THE GO-ANYWHERE TELEPHONE?
Alan BrunstromInmarsat
London, United Kingdom
Inmarsat's introduction of the world's first truly mobile, global telephone system, offersthe prospect of huge new markets and great benefits for telecoms agencies trying to
provide wide-area coverage of thin-route markets; but these opportunities can only herealised if regulatory, administrative and licensing issues are resolved.
Inmarsat has just started operation of the first telephonesystem that is not only truly mobile but that can alsoprovide seamless, global coverage. The introduction of thissystem, which is known as Inmarsat-M, coincides withhigh profile publicity for hand-held satellite telephonesystems that are planned for the late 1990s.
Many such systems have been mooted, most of theminvolving new satellite constellations in low earth orbits.What they all have in common is that they are intended tooffer convenient, low cost voice, facsimile and datacommunications via terminals that are small, light andcheap enough to be fitted onto any vehicle or small boat,besides being hand carried or used in fixed roles.
It has been widely hypothesized that the market for such aproduct may be in the millions of users. It is certain thatit will take billion dollar investments and several yearsbefore such market potential can be realised. Yet it ispossible to achieve many of the objectives of such systemsright now and at very low cost, by the application ofInmarsat-M and its existing global satellite network,complete with an international support infrastructure that isalready well-developed.
In terms of basic services and functionality there is littledifference between what Inmarsat-M offers today and whatis being proposed for hand-held systems towards the end ..of the decade. Digital voice services will be provided at avocoded data rate of 4.8 kbit/s, producing a speech qualitythat has proved highly satisfactory.
Voice quality has indeed proved to be one of the earlytriumphs of the Inmarsat-M system. Originally it wasintended to provide only communications quality voice butdue in no small part to the voice codec developed by UScompany DVSI, what has actually been achieved issomething much closer to toll quality.
The proof lies in customer perceptions, and exhaustivetests of the new system have been made, from smallyachts and fishing boats in rough northern seas to testsaboard the world's most famous luxury liner, the QE2; andfrom vehicle-mounted systems driven across the length ofEurope between Norway and Spain to a system mountedon a railway carriage and used along the length of theTrans-Siberian railway and right into China.
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Customer perceptions of telephone call quality haveconsistently rated the service as being superior to cellularradio and in many cases have placed it as beimg as goodas or better than any other international telephone calls thecustomer had made by other means. As these customershave included users of twenty different languages. as wellas a broad range of ages and of course both sexes, we canassert with some confidence that acceptance of thego-anywhere telephone will not he held back by anyconsiderations of voice quality.
In addition to the telephone, Inmarsat-M will supportGroup-3 facsimile at a data rate of 2.4 kbit/s, as well asreal-time data communications at the same data rate.
A fax rate of 2.4 kbit/s is rather slow of course but quiteadequate for someone who wants to send just a couple ofpages and in any case there are many parts of thedeveloping world where the terrestrial networks may notbe able to deliver a faster service. On the data side,Inmarsat-M will be ideal for linking to well establishedE-mail systems such as. X.400 and to the X.25 datanetworks.-
.The'lelephone service, is operational now, whereas the faxand,data,seryi.ces:will come into operation during the
year.'This'reflettsilie fact d-that Inmarsat-Mfirsi.ap_dforemost a telephone system. Although .many
other se:ryiCes, are to be offered on both it and thehand-held systems of the future-, customer surveys showthat it is a good, basic, reliable telephone service that isfar and away the most important requirement.
Indeed, the guiding principle in the development ofInmarsat-M has been that is should work like thetelephone or fax machine in the office. The user will notrequire any training in order to make a telephone call orsend a fax and the way the calls are routed from themobile terminal via the satellite to a land earth station andthence into the international switched telephone or datanetworks will 1,e invisible to him (see system diagramattached).
Terminals can he readily integrated with GPS chip sets toprovide position fixing and many will have an integralInmarsat pager, part of the world's first global pagingservice which is due to start operation in 1994. This will
be particularly important for the international businesstraveller, enabling him to receive messages even when theterminal is switched off or when he is inside a buildingand out of sight of the satellite.
The terminal equipment is available in a wide range ofversions to suit many different market sectors. The mostnumerous are expected to be briefcase versions, someexamples of which are shown in the photographsassociated with this paper and in the conferenceexhibitions. These are intended for international businesstravellers and also for aid workers, journalists, emergencyservices and anyone who has to operate in areas wherefixed communications systems are unavailable orunreliable.
Briefcase terminals of this type weigh under 10 kilos andcan easily be carried aboard an aircraft as hand luggage.They will become even lighter and more compact over thenext few years, just as had happened with portable PCs.Thay are entering the market at prices of betweenUS$12,000 and US$20,000 and again, prices will fallwithin a year or two as volume production is achieved.
Usage charges start at US$5 to US$6 per minute (a hugereduction on the US$8 to US$10 per minute charged forthe system's predecessor Inmarsat-A) and these chargeswill fall as traffic volume increases until a level of aroundUS$3 per minute is likely to be reached in the late 1990s.Inmarsat operates an open-access system, which meansthat competition between service providers will ensurekeen pricing with concomitant benefits to the customer.
It is anticipated that the number of users of this kind ofterminal will pass 100,000 by the late 1990s and could beas high as 250,000. A very high proportion of these userswould be operating some or all of the time within thePacific Rim area and even the most conservative estimateswould indicate that there will be some thousands of peopleowning or renting these terminals and wishing to use themin the countries of the region within the next two years.The implications for regulatory, billing and administrativesystems are the central issue of this paper.
The markets for Inmarsat-M and the issues that it raisesare not limited to briefcase terminals, however. There areat least three other large and important market sectors.
Inmarsat-M is essentially a Mobile communications systemand thousands of terminals are being built specifically forinstallation on road vehicles, including not only heavycommercial vehicles such as long-distance trucks but alsoluxury private cars. In this respect the s}stem's role willhe identical to that of cellular radio but aimed principallyat areas where that service is not available, althoughlnmarsat-M may make more widespread use of datacommunications than has been the case with cellular.
Inmarsat has already experienced large numbers ofcustomers fitting then %chides ih its low-cost datacommunications terminal Inmarsat-C for use in
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trans-border communications between fleets of trucks andtheir head offices. This is proving a major benefit notonly to commercial efficiency but also to security againsthijack, theft and for the monitoring of dangerous loads.
In the European Community there has already been anagreement allowing the use of such terminals in any ECmember state provided that they have been licensed byany other member state. Similar agreements are underconsideration in several other regions and are of coursesimilar to those being reviewed for cellular radio wherecompatible systems are operational in different countries.
This is an important consideration, for it is unlikely that asingle global digital cellular standard will emerge anddeveloping countries, in striving to meet pressing mobilecommunications demand, tend to have diverse analoguecellular systems which make technical compatibility anadditional factor limiting international roamingagreements. Inmarsat-M, in contrast, is a global standardrequiring only commercial and political agreements toachieve international roaming. Furthermore, it is plannedto make future versions of the Inmarsat-M system capableof interworking or dual mode operation with a variety ofdigital cellular systems.
Two types of Inmarsat-M antenna systems are beingdeveloped for vehicle mounted operation. Terminals withflat, plate-type, phased array antennas have beendeveloped that can be readily built into the sun roof ofcars. Other terminals use low-profile directional antennasthat use azimuth steering to track the satellite. These willbe commonly seen on truck cab roofs.
As with briefcase versions, within a year or two nationalofficials such as customs officers and telecoms licensingagencies will be faced with thousands of customersarriving at their frontiers with sophisticated two-waycommunications systems, in this case built into theirvehicles, which are difficult to recognise and of greatcommercial and personal benefit to the users and thecompanies and organisations of which they are a part.
Maritime applications are similar to the vehicle mountedor land-mobile ones and here at least the regulatory andlicensing arrangements are well established, followingmore than ten years of operation of the Inmarsat-Acommunications system.
However, whilst Inmarsat-A is fitted to about 15,G00 ofthe world's largest ships and follows long-establishedprecedents for licencing and billing that were developedfor conventional radio systems decades ago, Inmarsat-Mwill be fitted on scores of thousands of small fishing boatsand private yachts and will precipitate significant changesin the established practices.
Firstly. they will often not he familiar with the billingprocess used for international maritime communicationswhereby all hills are sent to a recognised InternationalAccounting Authority which pays the hills and reclaims
3
the money, plus a commission, from the customer.Instead they will want to pay the service provider directly.probably by credit card. In this they reflect therequirements of the land mobile customers also.
Secondly, they will fit the new terminals in such numbersthat existing staff and facilities in the national routingorganizations responsible for issuing licences may proveinadequate to the task, especially in countries that haveonly ever processed one or two applications for satellitecommunications systems a year in the past. Worldwide.Inmarsat systems are operational today in 120 countries,but. only 50 of these have more than 10 applications ayear. By the mid 1990s these numbers are likely to swellto hundreds of applications a year in most countries of thePacific Rim.
Finally, they will be fitting terminals that are small andeasily moved from boat to boat or from boat to land.Whilst maritime terminals are not really suitable for landmobile or portable applications, they are very suitable forinstallation in, for instance, the head office of the shippingcompany, on the roof of the yacht owner's office, at theport authority, the customs house or the ship chandler.
These types of installation will be very popular, becausethey will enable quick, secure and reliable communicationsdirectly between boats at sea and their most commoncommunications partners ashore, without going through thenational fixed telecoms networks. This raises the vexedquestion of bypass.
The bypass issue is critical for the last major marketsector, which is the application of Inmarsat-M to rural orthin-route telephony schemes.
Inmarsat-M is not intended as a direct competitor to eithercellular radio or conventional fixed telecoms networks.The terminal costs and usage charges clearly preclude that.It does, however, offer a means of providing telecomsservices to rural or remote areas prior to the developmentof those conventional services and by giving instantcoverage of areas not yet covered by them, it enablesservice providers to develop an optimised strategy for theexpansion of cellular and fixed systems. In short, byinstant provision of essential thin-route services it canallow expensive investments in cellular and fixed networksto be concentrated in high traffic areas that justify thecost.
One of the key advantages of Inmarsat-M is that it is partof a global system whose infrastructure costs have alreadybeen met. The satellites and network coordination centresare in operation, the land earth stations or hubs are inplace or being built and anyone, whether or not theircountry is a member of Inmarsat, can buy a terminal anduse the system. It is not necessary to have a land earthstation within the country, since there is open access to thesystem via the international switched networks and landearth stations in other countries. It is not necessary tolease capacity that may be greater than the initial demand,
828
bee:vise ,ystem works on it pay-as-you-use basis.
Thus the benefits of mobile communications with globalreach can he realised now, with low capital investment.low risk and incremental build-up of services in line withactual market demand. The real question thus becomesnot the site of the market or the size of the investmentrequired to realise it. but whether or not the world'stelecommunications, regulatory and administrative bodiesare ready to meet the challenge of allowing access tosystems such as Inmarsat-M. In fact, Inmarsat-M posesthe immediate challenge of making possible the changes inthe telecoms environment that will he absolutely essentialif the proposed global hand-held telephone systems of thefuture are ever to become viable.
Let us examine each of the key issues in turn and proposesome ways of meeting the challenge.
INTERNATIONAL TRAVELLERS & BRIEFCASETERMINALS
If the issue is customs import regulations oncommunications equipment that stop the traveller frombringing his terminal into the country, one simple answeris to set up rental agencies that will rent a portablebriefcase terminal to travellers at the airport, just like acar. This is often better for the traveller he doesn't haveto take the thing on the plane. If he does want to use hisown terminal, then set up a standard licence fee that canbe paid in advance or at the airport on arrival. The moneymade from either of these approaches should offset anyloss of revenues from bypass of fixed networks.
VEHICLE-MOUNTED TERMINALS &TRANS-BORDER USE
If there is substantial trans-border trade, then thecommercial benefit to both countries of allowing mobilecommunications across the border should he obvious. Thesolution is equally so: a mutual agreement between theneighbouring countries to recognise licences granted ineither country for use of specified terminal equipment thatis type-approved for use in the Inmarsat system. Thereare good examples already in place in the Pacific Rim forcellular roaming; for instance between Singapore, HongKong, Australia, New Zealand and Canada and betweenThailand and Malaysia.
If the equipment also has position reporting facilities (aswill generally he the case), this could actually help makesecurity and policing of international road transport betterthan it is at present.
INCREASE IN NUMBER OF LICENSE APPLICATIONS
Every license granted represents a commercial opportunity,not just for increased telecoms traffic between the mobileterminal and the country's fixeu networks, but also forlicence fees. The administrative burden can he greatlyreduced by a facility Inmarsat provides known as the
Routing Organization Electronic Commissioning System(RO ECS), basically a computerised means of processingapplications with minimum effort.
MOBILE-TO-MOBILE COMMUNICATIONS
This should be seen as the biggest opportunity presentedby the new system, rather than as the biggest threat. Theessence of the demand for mobile communications is thatit is NEW demand, not a replacement for existing systems.Customers want mobile satellite terminals because theyoffer something that is not available at all currently.
A recent market research workshop among nationaltelecoms organizations from the Asia/Pacific regionhighlighted this point. The conclusions of the workshopincluded the statement that the expansion of cellularsystems has a natural limit based on cost of setting up acell, the terrain as well as the population density to beserved. In addition, cellular systems are showing aworsening profile for revenue per subscriber, a decliningcustomer growth rate, as well as higher costs due todeclining cell sizes, hostile economics re populationdensity and difficult geographical terrain.
The workshop went on to observe that while somecountries are investing substantial sums into building upthe telecoms infrastructure, the pace of economicdevelopment outstrips that of infrastructure growth. Thiscreates a pent-up demand for both fixed and mobilecommunications. As the transport networks improve,much intra-country business travel will prevail, leading tofurther demand for mobile communications within thecountry and to some extent within the region. (Report ofInmarsat Project 21 Asia Pacific Market ResearchWorkshop, 3-4 August 1992, attended by representativesof 13 national telecoms companies in the region.)
Inmarsat-M offers the chance to build up this marketdemand until cellular or fixed networks becomeeconomically viable. It also enables service providers toconcentrate their cellular and fixed investments on areasthat are profitable, rather than having to spend huge sumsfor socio-political reasons on supplying uneconomicservice to thin-route areas. Most important of all,Inmarsat-M makes it possible to take action on meetingdemand in these areas NOW, without either largeinvestments or long delays.
OPERATING A NATIONAL LAND EARTH STATION
One further possibility is to build and operate anlnmarsat-M land earth station within the country. Thiswill cost around US.I4 to US$5 million from any one ofnine potential suppliers and will give the opportunity notonly to avoid bypass of national networks but also to bringin substantial revenue from foreign markets. As theInmarsat system is truly global and each LES operates to asatellite that covers about a third of the earth's surface.there is major potential for providing service not just
829
across the whole country but to neighbouring countriesand adjacent sea areas as well.
CONCLUSION
By the end of 1993 there will be thousands of briefcaseterminals being carried around the world by privateindividuals and thousands of vehicles fitted withunobtrusive terminals, all of which will be capable ofmaking and receiving calls to and from anywhere in theworld. There will also be thousands of terminals fittedaboard small boats operating within territorial waters andthe potential to meet thin-route telecommunicationsdemand through small transportable or semi-fixedterminals with antennas of less than one metre diameter.
Given the explosive growth that continues in the mobilecommunications markets, the proliferation of suchequipment will require national regulatory andadministrative bodies to develop their response veryquickly, for the well-proven link betweentelecommunications development and economic growthwill count heavily against countries that adopt a restrictiveposition against the spread of global, mobilecommunications, whether by intent or by slowness toadapt to change.
We do not have to wait until the late 1990s for the era oftruly global, truly mobile communications. Indeed, we donot have that luxury. The technology already exists, theinfrastructure is already in place and the product is alreadybeing marketed. The demand is undoubtedly strong andthe services and prices are right to meet it. The realquestion is simply, are we ready to profit by it?
LIST OF ILLUSTRATIONS
Number I:Number 2:Number 3:Number 4:
Number 5:
Elements of the Inmarsat systemCoverage map of Inmarsat satellitesInmarsat-M briefcase telephoneInmarsat-M land mobile terminal mounted onChinese railway carriage, with Inmarsat-Cantennas in the foregroundInmarsat-M maritime ship earth station onboard a small commercial vessel
INMARSAT - THE SYSTEM
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INMARSLT M PORTABLE MES
Ram SUBRAMANIAN
Inmarsat
40 Melton Street. London NW1 2EQ, United Kingdom
Akihiro ISHIDE Nchuhiro ENDO Colin SMITH
NEC Corporation
4035 lkebe-cho Midori-ku Yokohama 226, Japan
1. ABSTRACT
An overview of the lnmarsat-M Portable Earth Station(PES) design is presented in this paper.
The antenna, modulator / demodulator, power subsystem and packaging are some of the critical
elements whose design influence the size, weight and operation of the terminal. The trade-off
between the antenna gain, power amplifier size and the overall dimegsion is described in the
paper. This PES is designed for lower production cost along with acceptable weight and size.
Ease of set-up and operation is one of the consideration given in designing this terminal
which is also outlined in this paper.
2.INTRODUCTION
This paper describes the new mobile satellite
communication system Inmarsat M , being imple-
mented by Inmarsat. The critical element of the
system is the Portable Earth Station (PES), the
development of which is detailed in this paper.
The paper concentrate on the techinical aspect
of the Portable MES design and the trade-off
parameters and key technologies used to achieve
a compact, light weight portable terminal.
Inmarsat has been providing communication to
ships from late 70s and is now actively imple-
menting new systems for use on land, in air and
at sea. These new systems can provide near global
communication for anyone on the move. By 1993
four new systems will provide telephony, telex,
data, group calls and facsimile at affordable
costs to a very wide range of users. Inmarsat A
is an analog based voice system which has been
designed primarily for maritime use. However, in
recent years, Inmarsat A has been extensively
used in land based applications, mainly in news
gathering and reporting. There are numerous ap-
plications other than voice, have been developed
for Inmarsat A.
Two other systems are in operation for the past
two years ; one to serve the aeronautical commu-
nity with voice, data and facsimile ; the other,
Inmarsat C, low speed data only, service to serve
the land and maritime community. lnmarsat has
been developing Inmarsat M. a digital based
voice, facsimile and data system, which will be
compact in size, but will provide adequate voice
quality in the mobile environment and serve a
wide range of maritime and land users.
3. Inmarsat-M Network Overview
The Inmarsat -M system is the new mobile satel-
lite communicatons system, being implemented by
Inmarsat. This system provides the following
major services to its terrestrial based and
mobile subscribers.
(1)Duplex telephony service using 6.4kb/sec IMBE
digital voice coding scheme.
(2)Group-3 facsimile service at 2.4 kb/sec in
both duplex and terrestrial originated simplex
modes.
(3)2.4kb/sec data service in both duplex and
and terrestrial originated simplex modes.
In addition to these services, the system pro-
vides several additional services such as group
call (broadcast call originated from the terres-
trial subscribers) and distress call (SOS call
originated from the maritime mobile users).
The Inmarsat-l4 system consists of four basic
elements for each satellite ocean regions, an
operational satellite, MES(Mobile Earth Station)
a Network Co-ordination Station(NCS) and Land
Earth Stations(LES).
Figure-1 illustrates the Inmarsat-M network con-
figuration.
An operational satellite
The Inmarsat-M system uses the same satellite
which is currently used for other systems such
as Inmarsat-A and share the same frequency bands
assigned to the satellite mobile communication
systems. The expanded frequency band based on
the definition at WARC MOB 92' will be available
from the 3rd generation satellite.
835s
Network Coordination Station (NCS)
NCS is the reference earth station which con-
trols and monitors the overall Inmarsat-M net-
work and includes the following functions.
Transmission of the signaling messages for
channel assignments for SCPC communications
channel
Channel assignment for SCPC channels
-Transmission of the Bulletin boards with global
system status information
Reception of the MES-originated signaling
messages
inter- station signalling with each LES
-Maintaining lists including MES "Busy" status
within the network, and frequecy assignment
for each satellite network.
Land Earth Station (LES)
LES is the satellite gateway earth station
which is installed between the satellite and
terrestrial gateway facilities such as the in-
ternational telephony exchange or international
telex exchange. Therefore LES provides access
to the international terrestrial communications
networks for the mobile terminal subscribers.
Mobile Earth Station (MES)
Two classes of Inmarsat-M mobile earth stations
are supported in the system.
(1) Maritime Class MESs
(2) Land Mobile Class MESs
This paper describes the Inmarsat-M portable
terminal which is categorized as one of the
land mobile class MRS.
4. Main features of the developed Inmarsat-M
Portable MRS
The developed new portable satellite terminal is
designed to be carried easily and to provide the
medium quality telephony, facsimile and data
services throughout the world. In order to
make the unit compact, compromise between
an HPA and an antenna gain is required.
Although high output power can reduce the
size of the antenna, it increaces the power
consumption and the size of the terminal and
reduces the battery operational period.
To solve this problem, this terminal adopted the
folded type flat antenna to minimize the
size of the antenna and increase the gain.
(I)Compact design
The small compact terminal with its telephone
can either be installed outdoors or inside
by a window. The single package terminal
incorporates a flat antenna, transceiver and
rechargeable battery pack.
Because of its compactness, it is extremely easy
for an international business traveler to carry
the terminal by himself.
la addition, setup of the terminal on site be-
fore operation is not necessary because all the
components are integrated into a single unit.
(2)Easy antenna pointing
The elevation angle adjustor is provided so that
the antenna pointing car. ue accomplished very
easily with the use of the attached compass and
signal level ind.cator, and communication ser-
vices can be established within a few minutes.
(3)Folded type antenna design
In order to reduce the total power consumption,
the two-folded type antenna design is adopted.
With this design approach, longer battery oper-
ation pe,;2A. and smaller mechanical size are
achieved.
(4)Multiple power source
In addition to the battery operation, it is also
possible to use the AC mains with AC/DC adaptor.
The major advantages of the Inmarsat-M portable
terminals compared with Inmarsat-A or Inmarsat-C
terminals are as follows.
(1)Cospared with Inmarsat-A terminals
The mechanical size and total weight are sig-
nificantly reduced so that it is much easier to
carry the terminal.
It is also expected that the communications
charge(tariff) will be reduced greatly, compared
to that of the Inmarsat-A service, because the
occupied satellite bandwidth per SCPC channel
is much narrower than Inmarsat-A.
(2)Compared with Inmarsat-C terminals
The Inmarsat-C terminal is very useful for the
message communications, however it can not sup-
port voice communications which on some occa-
sions is essential and very useful for actual
field operation. The Inmarsat-M terminal provide
voice communications .
5. Overall terminal configuration
The developed Inmarsat-M portable terminal con-
sists of the flat antenna, duplexer, High Power
Amplifier(HPA), Low Noise Amplifier(LNA), modu-
lator, downconverter, Baseband processor(BBP)
with access control software, voice interface
unit and handset. The accomodation space and the
interface for the future addition of the facsim-
ile and data interface units are also provided.
Figure-3 shows the overall block diagram of the
portable terminal and Table-1 summarizes the
the major performance.
-,,r,
836
6. Equipment Description
Antenna
A fold type antenna achieves high gain of 18
dBic with patch array. It reduces the power con-
sumption extremely and achieves high G/T of
-9dB/K. The power fed to each of the antenna
elements is controlled to achieve low sidelobe
performance, especially in the vertical plane,
because the antenna length in vertical plane
is shorter than that of the horizontal plane. It
also gets a good axial ratio less than 2 dB
by adjusting the phase fed to each element.
HPA & LNA
HPA & LNA are connected to the antenna via a low
loss compact dielectric duplexer which achieves
the compact RF block and high G/T. The output
power of the HPA was set to meet the lower level
in the specified eirp range so as to reduce the
power consumption. The output power of the HPA
can be switched down by 6 dB for the spot beam
application.
Nodulator & Dorn Converter
The newly developed Hybrid Integrated Circuit is
adopted as the modulator which can directly con-
vert the base band signal to the RF signal and
modulate. In the down converter, the RF signal is
converted to baseband signal via 100 MHz IF
signal and it is sent to BBP to be demodulated.
Baseband Processor
Baseband processing is implemented with Digital
Signal Processors (DSP). The DSP provides the
flexibility and speed required to operate. The
functions executed in BBP are transmit frame in-
formation,multiplexing data and control signals,
demodulation, receiving frame syncronization, and
demultiplexing data and signals. Considerable use
of custom LSI's in the BBP has enabled the over-
all size of the BBP to reduce.
ACS controller
The ACS controller, using NEC's V50 microproces-
or. provides all the signalling protocol for call
establishment as defined by lnmarsat-M system
requirements. It also provides the control of the
user interface (LCD and switches ) as well as
monitoring and controlling all the terminal com-
ponents. The ACS portion is physically incorpo-
rated into the BBP and closely monitors the BBP
functions. It also acts as the control interface
to the voice codec, handling hook, call type and
service address type information. The ACS con-
trols both call setup and clearing of all ser-
vice types for both MES originated and Fixed or-
iginated calls.
837BEST COPY AVAILABLE
Voice Codec
The Voice codec provides the voice, fax and data
interface to the terminal. The voice codec uses
the 6.4kbps IRE algorithm developed by DVSI.The
voice codec consists of one 2-wire port for
telephony and fax use as well as an RS232 type
contor for data service use. To differentiate be-
tween telephony and fax calls initiated from the
2-wire port, the user must first select the call
type they wish to use i.e telephone or fax.
This is done through a push type switch on the
terminal unit. This voice codec is capable of
detecting DTMF digits received from the 2-wire
port as well as regenerating any terminal re-
ceived digits to the 2-wire port. It also pro-
vides a ring signal to the 2-wire port. Other
features of the voice codec include on/off-hook
detection, service tone generation.
Furthermore, it performs the echo-cancellation,
and can adjust the tone level by 2 dB steps.
Fully compatible G3 facsimile is also supported.
The data port will appear as a modem to an at-
tached terminal and will conform to a selected
set of hayes compatible commands.
Porer Supply
The newly developed power supply can achieve
high efficiency of greater than 85 % and the
total power consumption can be greatly sup-
pressed. The Nickel-Cadmium rechargeable battery
can also be installed inside the unit and it can
be charged by an AC/DC adaptor attached as an
accesory in an hour.
7. Conclusion
A portable type terminal which meets the
Inmarsat-M specification was developed. This
terminal was designed for land mobile use and
easy to set-up. To achieve this purpose, the
folded flat type antenna was adopted and al-.)
the high effciency power source was developed.
It can provide medium quality telephony communi-
cations, G3 compatible facsimile and data commu-
nications with light weight and compactsize. It
is suitable to carry it to areas where telecom-
munications fascilities are neither available
nor reliable.
It will be possible to reduce the size and
weight furthermore in the future by using the
custom LSI technology, low loss duplexer and
high efficiency battery like Nickel-Hydrigen
etc.
4/62
NATIONALAND
INTERNATIONALNETWORKS
Fig.I The Inmarsat-M Network Configuration
Fig.2 The Outside View of the Developed Inmarsat-M Portable Terminal
838 s
0 AC Power Source
G3 Facsimile
Handset
IIPA ; High Power Amplifier BBP ; Base Band
LNA ; Low Noise Amplifier Processor
MOD ; Modulator VFDU ; Voice. Facsimile
D/C ; Down Converter & Data
ACS Acess Control Software Interface Unit
Fig.3 Block Diagram of Portable Terminal
Items Performance
1) Frequency TX; 1626.5 -- 1660.5 MHz
RX; 1525.0 -- 1559.0 MHz
2) UT -9.0 dB/K
3) Eirp 23 dBW
4) Polarization Right Hand Circular Polarization
5) Axial Ratio 6 2.0 dB
6) Modulation Forward Signaling Channel
BPSK 6Kbps
(FEC; R =1/2 Convolutional
Encoding
Constraint Length= 7)
Return Signaling Channel
BPSK 3Kbps
(FEC; R=3/4 Convolutional
Encoding)
Communication Channel
OQPSK 8Kbps
7) Channel Voice Channel
Coding Algorithm;
Improved Multi-Band Excited
(IMBE) Coding
Voice Coded Data Rate;
6.4 Kbps
Facsimile /Data Channel
Data Rate; 2.4 Kbps
8) Power Supply +12V DC
9) Operational Transmission Mode ; 1 hour
Period withBuilt-in Receiving Mode ; 2 hours
Battery
10) Satellite
Elevation 5 0 -- 90°
Range
839
Table-1 Summary of the Major Performance
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BEST COPY AVAILABLE 840
BRIDGING THE GAP
J C BellManager, Regional Business Development
Inmarsat
ABSTRACT
For more than a decade Inmarsat has operated the world's only global mobile satellite system.
The paper looks at the development of mobile satellite communications, its applications and
the recent introduction of the Inmarsat-M system, which will bring telephone, fax and dataservices within the reach of many new users.
Historically, due to the size and cost of earlier systems, satellite communications for mobile
users could only address a limited market. Now, the Inmarsat-M system makes it feasible toinstall such equipment on small sailing boats, in a car, truck or when packed in a briefcase to
be carried by an individual. For those within the Pacific Basin, it will, for the first time,provide individuals in remote areas with reliable direct dial telephony and data
communications with the rest of the world at an affordable price.
INTRODUCTION
When Satellite communications were introduced somethirty years ago a new era began as, for the first time,people worldwide were able to contact each other bytelephone any time of the day or night and in anyweather conditions. The ability to beam televisionbetween continents overnight changed our view of newsand other world events. Today we take such things forgranted with many homes now able to receive directbroadcast satellite services. However, direct access to theinternational public switched telephone network throughpersonal satellite earth stations has until now been limitedto the privileged few. The first users were at sea, wherein the late seventies Ship Earth Stations operating firstthrough the Marisat system enabled vessels at sea tomake and receive calls. Unfortunately, the size and costof the equipment precluded its widespread use until morerecent times when technical developments and lowercosts brought the benefits of satellite communications toa much wider user community. Now with over 20,000Inmarsat-As in worldwide use mobile satellitecommunications has become an accepted part of life.Undoubtedly this awareness was accelerated by reporterswidespread use during the Gulf War which brought it tothe wider attention of the public and business community.
Today, the Inmarsat system is used by all types ofvessels, trucks, trains, business users, and now civil andgeneral aviation. Already a large number of corporatejets are able to make and receive calls anywhere in theworld and over the coming years such capability willbecome commonplace on virtually all the major long-haulairlines.
During the last few years data communications throughthe Inmarsat-C system has brought tremendous benefit totrucks, ships and journalists who need to be in contact atany time. Such small equipments with their low powerconsumption have brought the advantages and awareness
841
of satellite communications to a wider user communityalthough the absence of a telephone service has been adrawback to some potential users.Now with the introduction of the Inmarsat-M system,personnel satellite communications (with direct dialtelephony, data and facsimile) are finally able to bridgethe gap and address the needs of the average business and
industrial user on land and at sea. Size, weight andr'wer consumption have been minimized so that a costeffective solution now exists for those not directlyconnected to the public network to keep in touch at alltimes from anywhere in the world.
BACKGROUND
Till now, the technology available meant that to be costeffective, a mobile satellite terminal carrying voice traffichad to be fairly substantial. The large antenna wasrequired to enable the satellite transmit power to beminimised and so keep call costs down. The Inmarsat-Auses 50kHz of bandwidth for its FM telephony channelsand this limits the number of calls that can take placesimultaneously in the 7.5 MHz of bandwidth originallyallocated. The new Inmarsat-M system is able to takeadvantage of the latest digital techniques so that only onefifth the bandwidth is required for a call while at thesame time the satellite power is almost halved. Like somany good ideas the Inmarsat-M concept has beenaround for a long time, but it is only the recent maturityof the technologies employed that have enabled a costeffective solution.
THE INMARSAT -M SYSTEM
Inmarsat-M is an all digital mobile satellitecommunication system providing telephony, fax and dataconnections with any terrestrial subscriber via theInternational public
C. ) 4
followed by the country, area code and subscribernumber. In practical terms the Inmarsat-M mobile issimply an extension of the global terrestrial network butinstead of plugging the phone into the wall socket theantenna is pointed towards the satellite. In this way theInmarsat-M may be compared to a cordless phone butwith unlimited range.
VOICE rODING ALGORITHM
To keep user costs down it is necessary to digitallycompress the spoken word as much as possible while stillretaining speech quality and voice recognition. This wasachieved using an improved multiband excitation modelvoice coding algorithm specially developed (and selectedfollowing an intematio la/ competition in 1990) by DigitalVoice Systems Inc (LJ NISI). The algorithm uses a voicecoke operating at 4.2 kbps which with the addition ofFEC results in a coding rate of 6.4 kbps. Sub-bandsignalling and preambles then take the overall channelrate up to 8 kbps. Unlike voice coding algorithmspreviously used in fixed links this one had to be robustenough to operate in the difficult land mobileenvironment where fading of the incoming signal andoccasional blockage will impact performance. The finalresults indicate that speech intelligibility can bemaintained in channels with an error rate up to 6% and aburst error rate to 20%.
CHANNEL CHARACTERISTICS
Digital modulation is used for the Inmarsat-M signallingand communication channels. The basic modulation andcoding is filtered off -set quadrature phase-shift keying(O -QPSK) used in both directions to carry thecommunications on Single Carrier Per Channel (SCPC)carriers. The signalling channels use binary phase-shiftkeying (BPSK) which is filtered in the forward direction(calling the mobile) and unfiltered in the return direction(calls originating at the mobile).
The Channel format is specially designed to be robust in
the land mobile environment. A frame length of 240msis used while a short CW preamble in each 60mssubframe allows the demodulator to reacquire veryquickly after short blockages. Forward Error Correction(FEC) convolutional coding of constraint length K = 7with rate 1/2 and N is used in all signalling and sub-bandchannels to improve error rate.
0-111 Group 3 facsimile and data are transmitted at 2.4
kbps over an 8 kbps channel using O-QPSK modulationand punctured coding at rate 3/4 FEC (with timediversity).
Channel spacing in the Inmarsat-M system is 10kHzthough the synthesizer steps are in 5k1iz steps across thewhole 34.5 MHz of spectrum allocated to maritime andland mobile communications.
842
A satellite EIRP of 17 dEW is used in the forwarddirection. Mobile Earth Stations (MES) transmits aminimum EIRP of 25 dBW in land versions and 27 dBWfor maritime ones. This leads to a G/T of -10 dB/K formaritime terminals and -12 dB/K for the land mobileversions. The practical effect is that a small antennaabout 0.5m diameter can be built to meet these criteria.With so many manufacturers developing terminals it isinteresting to see the ingenuity that has occurred in thisarea with technology being pushed to the limit. Typicalantennas range from planar arrays to short backfiredesigns for the maritime versions and from linear cavity-backed types to electronic beam formed mobile versions.This latter type results in a very low profile antenna thathas been successfully trialed in a Volvo estate car in thespace nonnally occupied by the sunroof.
NETWORK CONFIGURATION
The Inmarsat-M system comprises four independentcommunications networks (Satellite Ocean Regions), eachnetwork containing an operational satellite, mobile earthstations (MESs), a network coordination station (NCS)and land earth stations (LESs), the latter providing accessto the international terrestrial communications networks.
LAND EARTH STATION (LES)
Land earth stations act as gateway between the PSTN andInmarsat space segment. These are owned and operatedby Signatories, who are also responsible for land lineconnections to the PSTN. Each LES has a parabolicantenna with a diameter in the range of 10-13m fortransmission to /from the satellites. Uplink is at C-bandand includes Automatic Frequency Compensation (AFC)System. LES transmit and receive frequencies areunpaired and operate in bands compatible with theInmarsat satellite transponder characteristics. The LESsynthesizer step (5 kHz maximum) is compatiblewith the minimum operational SCPC channel spacingused in the Inmarsat-M system of 10 kHz.
NETWORK CO-ORDINATION STATION (NCS)
Inmarsat-M NCS Services are provided at a designatedLand Earth Station in each of the four satellite networkregions. Each network co-ordination station is connectedvia terrestrial links to the Inmarsat Network ControlCentre (NCC) in London. The NCS plays a key role inthe network and is responsible for co-ordinating theaccess to communications channels between all LESs andMESs within the network, thereby ensuring fullconnectivity. The major NCS functions include SCPCcall processing, monitoring of proper operation ofsignalling channels, database management andhousekeeping, etc.
In the event of NCS failure, each stand-alone LES withinthe network is able to maintain the full capability forserving mobile-originated calls. Announcements for land-originated calls are transmitted by individual stand-alone
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845
FIGURE o.
GRINAKER INMARSAT-M BRIEFCASE
LESs. Although full connectivity for land-originatedcalls is not maintained, the network is not disrupted byNCS failure.
MOBILE EARTH STATIONS
The mobile equipment can be designed and manufacturedby any company. Inmarsat provides such companies witha System Definition Manual (SDM) which is freelyavailable and provides the specifications required todesign equipment to work with the systems. When thedevelopment is essentially complete and before theequipment can operate through the satellite it must firstbe type approved by Inmarsat. This is to ensure that itcomplies with the system defuiltioi. and will not causeharmful interference to other users, the satellites or theLand Earth Stations. No licensing or royalty fees arepayable to Inmarsat so once type approval is obtainedmanufacturers compete with each other in a free globalmarket which helps ensure a healthy and competitivemarket environment.
About twenty companies are or have developed MESs forthe maritime, land mobile and transportable markets. Anupdate of the models which have been type approved canbe found in the Transat and Ocean Voice publications ofInmarsat which are freely available (see footnote).
A major determining factor is the overall system designwas the land mobile antenna requirements where the sizeof antennas dominated the consideration. These practicalconstraints, giving drastic size reduction limit the gain toaround 12.5 dBi to 13 dBi. Also, the small antenna sizereduction makes antenna pointing less critical, thusallowing the antenna tracking system to be simplified.
As in the maritime environment land mobile systemsrequire an antenna that can be steered in the direction ofthe satellite to compensate for heading changes. Asvehicles generally operate in a given region for a longperiod of time it is normally not necessary to adjust forelevation as the vertical beam width of the antenna iswide enough to cope with a substantial range.Transportable systems employ a fixed antenna whichneeds to be manually aligned to the satellite. This caneasily be accomplished from a general knowledge ofsatellite location and the users orientation. Once thesatellite is acquired a signal strength indication allowsmore accurate pointing of the antenna. (Figures 1, 2 & 3show typical land mobile antennas while figures 4, 5 & 6show a transportable configuration.) The electronicsrequired in a Inmarsat-M are small enabling them to beeasily packaged into a briefcase or small enclosure formounting out of the way in a vehicle under or behind thedrivers seat. A cellular or conventional type of telephonehandset can be connected to the MES to make andreceive phone calls while standard auxiliary connectorsallows a fax machine or personal computer to interfacewith the terminal.
846
For vehicle installation the equipments are designed torun off 12/24 VDC battery supplies while transportablesmay have an internal battery for limited use plus chargingfacilities able to operate from any mains voltage or froma vehicles DC supply while others may run permanentlyoff a solar power system. Initial costs for equiproeni areexpected to be around twenty thousand US dollars, butthis is expected to drop significantly as more equipmentreaches the market in the coming year. Most terminalswill be single channel systems i.e. they can only handleone telephone, fax or data call at a time. For those withrequirements for handling multiple simultaneoustelephone, fax and data calls, special versions are alreadybeing developed which will be capable of handling up totwelve calls at a time. This type of terminal uses anantenna about 2.2 metres in diameter, it will also attractlower user charges making it ideal for those applicationswhere high volumes of traffic may by generated.
Typically land-mobile MESs will be expected to workover a wide range of temperatures, from -25°C to +50°Cand with relative humidity up to 95% at 40°C.Externally mounted equipment (EME) will be specified towithstand the effects of ice, rain, snow, wind andsunlight, as well as enabling the antenna to maintain trackunder the influences of vehicle motion, vibration andpower supply fluctuations.
APPLICATIONS
The availability of low cost easy to operate MESs forland and maritime use will create a whole new categoryof users. In particular the significantly lower userscharges (Ref.l) will make the system much moreattractive to the general public who work, live, holiday ortake recreation in areas not served by fixed or cellularservices.
TRANSPORTABLE USERS
For the businessman, engineer, surveyor, reporter, publicand emergency services and even an individualholidaying in remote areas the availability of an Inmarsat-M transportable (briefcase) MES will be lifeline. Nolonger will people need to be worried or concerned aboutbeing out of contact as the ease and speed with whichsuch terminals can be set up will ensure they are neverbeyond reach.
Many different designs of briefcase terminals exist.Some have their antenna built into the lid of the casewhich simply needs to be elevated and pointed towardsthe satellite to establish communication. Others haveremovable antennas that can be set up away from theelectronics, telephone and fax. Some use bigger antennasthan is technically necessary so that power consumptionis minimized which in turn enables the unit to operate forlonger periods of time on its own internal battery. Novelapproaches have also been adopted including antenna
designs which open like a book to increase the surfacearea when transmitting and receiving yet able to fold upinto a small case for transport.
THIN ROUTE OPERATIONS
Many transportable and other versions of the L-unarsat-Mterminals will find their way into remote area thin routeservice where other forms of telecommunications are notavailable. For those isolated land locked or small islandcommunities the introduction of the new Inmarsat-Msystem heralds a breakthrough that makes it feasible toprovide them with an affordable and reliable direct dialtelephone service with the rest of the world.
The availability of good communications is a majorfactor in the development of trade, industry and tourismin remote areas while for those living in areas subject tothe threat of natural hazards such as cyclones, hurricanes,storm surges, flooding. tsunami, earthquakes and volcaniceruptions, the availability of an Inmarsat-M could providean essential lifeline. In particular it could help ensureboth early warning of an impending disaster and assist inestablishing appropriate co-ordination of subsequent reliefoperations. In other remote areas facilities such as gameparks, rural hotels, lodges and farms will benefit from theavailability of cost effective communications for theirown purposes and their guests. For tourists theavailability of an hunarsat-M at a game park or lodgewill also make it easy for a travel agent anywhere in theworld to confirm a reservation in real time. This in turnshould lead to better occupancy rates and increase touristrevenues. For such tourists the ability to communicatewith the outside world by phone, fax or data could beimportant or even a determining factor in whether or notto take the holiday. For the game parks, lodge owners,hotel or farm it will also make provisioning more reliableand when an accident does occur, ensure that medicalassistance or evacuation can be promptly organized.Likewise, farms and small mining and industrialcomplexes in remote areas will achieve substantialcommercial benefits from the availability of a time realtelephone, fax or data service.
Although power may be a problem in many remote areasthe ability of the lnmarsat-M system to operate from aDC power supply means that it can be left operationaltwenty-four hours a day when connected to a solar orthermoelectric power generator.
LAND MOBILE USERS
It is likely that the majority of long distance truckoperators will rely on Inma-sat-C for their communicationneeds because the data readily lends itself to direct inputto computer fleet management systems. This also
reduces costs as base stations manpower can beminimized. There does however, remain a substantialnumber of other users for whom voice communications
847
are very important. Such users can be categorized aspublic services including police, fire and ambulance inremote areas, forestry personnel, utility field teamsinspecting power lines on water systems along with oiland gas pipeline teams. Also, some trucks carryingcertain cargoes may benefit from having a driver able tocommunicate verbally to identify problems. Furtherunder some conditions the dispatcher may even be able todetect stress in the drivers voice.
Private vehicles operating in remote areas can also installIrunarsat-M without spoiling the vehicles appearance bythe installation of a low profile antenna. It is interestingto note how many vehicle installed Inmarsat-As arealready in service in spite of their very high cost. Itwould therefore not seem unreasonable to assume thatthis previously small and specialized market could besignificantly increased by the availability of Inmarsat-M.In the future, such uses may extend to vehicles used bygovernment officials operating outside urban areas whilein the same context embassy staff and heads of statecould similarly benefit when travelling in lessordeveloped areas.
RAILWAYS
There are many applications for hunarsat-M in therailway environment. These include communicationswith the driver and the provision of passenger telephone,fax and data services on the train. Already a number ofrailway operators around the world have plans or areinvestigating the possibility of such installations.
Inmarsat has already conducted extensive trials ofInmarsat-M and C on railways in China, Russia andAustralia with great success. Further trials are nowunderway or planned in Southern Africa and Europe.
Where trains operate in the open, installation of antennasposes no problem but many trains pass through tunnelswith minimal clearance so it will be necessary tocarefully consider the profile of the antenna and itsprojection before installation.
Track maintenance crews operate under very difficultconditions and safety risks are high when trains areoperating in the area and the crews cannot be reached.Transportable or vehicle mounted Inmarsat-Ms wouldprovide a reliable way of being able to contact themaintenance crews at any time.
Accidents also occur on railways and frequently happenin remote areas void of any viable communications.Again, transportable Inmarsat-Ms would provide an idealcommunications solution for the accident teams, repaircrews and inspectors who need to communicate from the
incident site.
THE INMARSAT ORGANIZATION
Inmarsat is an internationally-owned cooperative whichprovides worldwide mobile satellite communications.Established in 1979 to initially serve the maritimecommunity its role has evolved and its Convention hasbeen amended so that it is a global provider of mobilesatellite communications for commercial, distress &safety applications at sea, in the air and on land.
The Inmarsat organisation is headquartered in Londonand as of November 1992 has 66 member countries. TheInmarsat services are usually provided to the end user bythese signatories (international telecom operators).
The Inmarsat systems are able to support servicesincluding direct-dial telephone, telex, facsimile, electronicmail and data communications. Other specialistapplications include automatic position reporting, highspeed data (56/64 kbit/s) & pnint-to-multipoint dataservices. Other custom service capabilities can beprovided when required to meet specialist applications ofthe user.
Public services provided through the Inmarsat systemconform to agreed international standards. This enablesthe mobile user to roam and operate throughout theworld, subject only to national licensing requirementswhere applicable. This has very important benefits forthe user whose tenninal can be used anywhere thussimplifying operating procedures and minimising capitalcosts by reducing the number of different equipments thatwould otherwise be required to operate in differentcountries and regions. Manufacturers also benefit bybeing able to build equipment for a worldwide marketwhere economy of scale can have a dramatic impact onthe production and eventual cost of user hardware.
THE 1NMARSAT SYSTEM
The three essential components of the Inmarsat systemare:-
the Inmarsat space segment - the satellites andground support facilities - which is theresponsibility of Inmarsat and funded bySignatories;
the Land Earth Stations (LES) which provide aninterface between the space segment and thenational and international fixedtelecommunications networks and are funded,generally, by Signatories;
the Mobile Earth Stations (MES) - the satellitecommunications terminals, which are purchasedor leased by individual owners/operators.
Fixed-to-Mobile communications are in the 6 GHz band(C-band) from the LES to satellite and in the 1.5 GHz
848
band (L-band) from satellite to mobile. Mobile-to-Fixedcommunications are in the 1.6 GHz band from mobile tosatellite and in the 4 GHz hand between the satellite andLES.
THE SPACE SEGMENT
To provide the space segment required to operate aglobal mobile communications system, Inmarsat currentlyuses its own dedicated satellites as well as capacityleased from three other organisations.These are:-
Inmarsat-2 satellites which provide theoperational capacity in all ocean regions, namelythe Atlantic (W) at 55°W longitude, theAtlantic (E) at 15.5°W, the Indian Ocean Regionat 64.5°E and in the Pacific Ocean region at178 °E. The Inmarsat-2 spacecraft were built bya consortium headed by British Aerospace andhave three to four times the capacity of the firstgeneration satellites used by Inmarsat.
The European Space Agency (ESA) for the leaseof the MARECS-B2 spacecraft which is used asa "spare" in the Atlantic at 55.5°W.
The International Telecommunications SatelliteOrganisation (INTELSAT) for the lease of themaritime communications sub-systems (MCS) onthree spacecraft. MCS-D is the spare in thePacific at 180°E; MCS-B is the spare Atlanticsatellite at 34.5°W while MCS-A is the IndianOcean spare at 66°E.
Comsat General for the lease of two originalMARISAT spacecraft which provide capacity at72.5°E and 106°W.
Inmarsat's total of ten operational and spare satellitesensures that sufficient capacity is available to meetcurrent user needs. The launch of the fourth and finallnmarsat -2 in April 1992 and its deployment into theAtlantic Ocean (W) region completed Inmarsat's currentlaunch plans to provide sufficient global satellite capacityfor the coming years.
To provide additional capacity in the second half of thedecade Inmarsat has signed a US$350 Million contractfor four Inmarsat-3 satellites to be launched from 1994onwards. These satellites will be eight times morepowerful than the Inmarsat-2s now carrying service.Each Inmarsat-3 will have a global beam and fivespot-beams. The power and bandwidth can bedynamically reallocated between antennas dependingupon communications traffic requirements. Inmarsat-3will also be the first commercial satellite system to beable to support mobile-to mobile links and in additionwill also carry a navigation payload.
C
CONCLUSION
The introduction of Inmarsat-M brings mobile satellitetelephone, data and facsimile communications withinreach of most potential users on land and at sea. Thecommercial benefits that are derived from goodcommunications are well known and Inmarsat-M willplay a major role in overcoming the difficultiespreviously faced by those not well served by fixedtelephone or cellular radio services.
FOOTNOTE:
Inmarsat publishes 'TRANSAT' a free bi-monthlypublication. That provides interested narties with the bestway of keeping informed of all the latest developments inthe field of land mobile satellite services. Regular
ures provide details of ways in which the system isbeing used, LESs in operation, new equipment availableand lists manufacturers who supply equipment. Copiescan be obtained by writing to: The Editor, 'Transat',Inmarsat, 40 Melton Street, London NW1 2EQ, England.Tel: +44 71 728 1450. Fax: +44 71 728 1179. Telex:297201 INMSAT G.
Ref.1 Comsat in the USA has announced a tariff ofUS$ 5.50 per minute for the initial service andUS$ 3.95 per minute for calls originating frombig-dish multichannel systems.
FIGURES
1. Volvo estate car used to trial Ball Aerospace lowprofile antenna.
2. Ball Aerospace low profile antenna installed invehicle sunroof apature.
3. NEC Prototype Inmarsat-M installed in testvehicle with antenna radome removed.
4. NEC Briefcase Inmarsat-M.
5. GLOCOM Irunarsat-M briefcase terminal.
6. GRINAKER Inmarsat-M briefcase.
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DIAL N FOR SERVICEBY
EDWARD R. SLACKCOMSAT MOBILE COMMUNICATIONS
WASHINGTON, D.C., USA
1. ABSTRACT
At the end of 1992 an advanced form of mobile satellite service wasintroduced which reduced the cost of voice communications by almost50%. The start of Inmarsat-M service was not due to any suddentechnological breakthrough, but resulted from years of developmentinvolving service providers, equipment manufacturers, systemsengineers and end users which enabled this new service to evolve.The same approach is now being taken in evaluating the move to thenext stage of evolution--hand held communications receivers.
2. INTRODUCTION
Mobile satellite communications advancedbeyond the image portrayed by sciencefiction writers to reality in 1976 whenCOMSAT introduced its MARISAT systemwhich enabled voice and data communica-tions to take place from ships at sea toany place in the world through the publicswitched telephone network. By the endof 1976, three operational satellitesprovided an essentially global service,covering the Atlantic, Pacific and IndianOcean Regions. This was made possible bytaking a low-risk strategy towards serv-ing an uncertain marketplace, whereinCOMSAT piggy-backed a commercial communi-cations payload onto the UHF satellitesit was providing to the U.S. Navy toprovide communications on a novel leasedservice approach. The initial contractfor service to the Navy was for the At-lantic and Pacific Ocean regions, with aspare satellite constructed for use inthe event of a launch failure. Thesuccess of the first two launches and thegrowing requirement for military communi-cations resulted in the launch of thespare to cover the Indian Ocean region.
Concurrent with the manufacture of thesatellites, COMSAT also undertook thedevelopment of mobile equipment to permitusers to have the necessary technology tocommunicate. After running a competitiveprocurement for the first 200 units ofequipment, it was decided to permit othermanufacturers to develop equipment tooperate with the system, provided theequipment met the specifications estab-lished for system operation and becametype-approved. This permitted othermanufacturers to develop their ownequipment and encouraged competition forthe sale of user hardware.
Within two years, agreement had beenreached to establish a new InternationalMaritime Satellite Organization, knowngenerally as Inmarsat. Today, Inmarsat,through its 66 member countries andSignatories and coast earth stationoperators, provides service to mobile
users on sea, land and in the air. Theoriginal service introduced by COMSAT in1976 is now known as Inmarsat-A, and had19323 users as of end November 1992, ofwhich 4860 (25%) were land-based users.Inmarsat-C, which was introduced onlythree years ago, had a subscriber base of5433 as of the same date, with 2055 (38%)operating in the land mobile environment.Aeronautical satellite service, whichrecently completed its second year ofservice, is available on a total of 177airplanes--103 commercial aircraft (4 ofwhich are equipped for both voice anddata), and 74 general aviation planes.Figure 1 shows the growth of users in theInmarsat system.
FIGURE 1.INMARSAT USER STATIONS BY TYPE'976-1992
76 77 78 75 80 81 82 83 8, 85 86 87 se 89 90 91 92
YEAR
0 55D -A S,D-C o A[40
3. NEED FOR EVOLUTION
The continuing battle for the marketplaceputs pressure on suppliers to improvetheir product and/or performance, and toreduce costs. We have seen in the com-munications industry over the past 20years substantial changes/improvements intechnology brought about by competition.Many of today's service providers werenot in business 20 years ago, and therehave been a substantial number of newentrants even in the past two years.
850 &,
Inmarsat and Intelsat, the two majorinternational satellite organizations,have found a number of new competitorsfor service. Particularly, in the cas?.of Inmarsat, its success in developingmohae satellite communications serviceshas been recognized by others who wouldlike to capitalize on that success, andhave proposed a number of alternativecommunications systems and services.
Inmarsat has long been aware that inorder to satisfy increased marketrequirements and customer desire forlower priced service, changes would berequired in both technology and cost.One of the pressing requirements on bothInmarsat and its competitors had been theavailability of frequency spectrum andthe efficient use thereof. The last WARChelped somewhat with respect to thefrequency spectrum problem. On thematter of more efficient use of thatspectrum, Inmarsat and its rivals havemoved towards digital techniques forcommunications and the use of spot beamson satellites to permit frequency reuse,as well as other factors such as use ofspread spectrum. The various Inmarsatservices introduced in the last severalyears have been based upon digital means,as with Inmarsat-C and Aeronauticalcommunications. Inmarsat has undertakenfurther developmental work, and is nowintroducing its Inmarsat-M service, whichis also digitally based.
4. INMARSAT-M
Inmarsat-M is a new service availableinitially through COMSAT and laterthrough other coast earth stationoperators which will permit the cost ofcommunications to be almost halved.Developed concurrently with Inmarsat-B,also a digitally based technology,telephony services including facsimileand data can be provided through theInmarsat satellites and the publicswitched telephone system to any point inthe world. The service is a naturalevolution of the Inmarsat-A service.Figures 2 and 3 show the progression oftechnological change in the Inmarsatsystem.
71001E 2. PROGRESSION OF INNARSAT STANDARDS
Characteristic Iiam=ti Inamg InaI-S Ism-1
Type of Communications Analog Digital Digital DigitalYear Introduced 1976 1989 1992 1993Antenna Type Stab. Fixed Stab. Stab.
Direct. Omni Direct. Direct.Above Deck Equipment
Site of Antenna (in.) 548004W 68017W 2411x24W 541(017WWeight (lb.) 200 <10 80 200
Belom Deck EquipmentSize (W01(00 in.) 14x18014 506010 6x16x10 TBDWeight (lb.) 80 5 10 TBD
Voice CapabilityType FM N/A 4.8kbps 16kbpsQuality Excellent N/A
Data CapabilityMaximum Rate 56kbps 600bps 2.4kbps 16kbpsFax Rate FM TBD 2.4kbps 9.6kbps
Approximate End Deer Coate (08$):Terminal Price 30-40K 6-10K 15 -20K TBDTelephony/Minute 7-10 NIA 4-5.50 4-7Telox/Minute 4-5 4-5 N,A T132
Good Excellent
BEST COPY AVAILABLE 851
As was the case for its -A said -C stan-dards, Inmarsat-M has been designed tooperate in both marine and land-basedenvironments. The substantial reductionin antenna diameter from 0.8 to 1.0meters to 0.4 to 0.45 meters and cuttingthe weight of equipment from approxi-mately 100 kg to only 25 kg makes theinstallation attractive for smallervessels such as yachts and fishingvessels. Additionally, the reduction incost from the Inmarsat-A level ofUS$30,000-$40,000 to only US$15,000-$20,000 makes the installation moreaffordable. Coupled with service costreductions of almost 50% of the US$8.00to $10.00 per minute charges for -Aservice, users will be able to placeinternational calls to any place in theworld at prices less than they pay inmany hotels.
The land based environment is whereInmarsat-M is expected to far outstripthe use of Inmarsat-A. The lower costsmean the service is within reach of usersin thin route locations, and who oftensuffer from poor quality service becauseof the high cost associated with moreadvanced technologies. The Pacific Rimis the very type of environment for whichthis service was designed. The manyislands with poor interconnectivity tolarge centers of population and inter-national networking capability can nowachieve high quality service at afford-able prices. The ability to connect suchsystems to a small local network can makethe service available over a largergeographic area than a single location.
COMSAT has developed a variation of the-M design to accommodate users with highcommunications requirements, similar toan approach taken for Standard-A. Underthis variation, a multi-channel Inmarsat-M unit utilizing a large antenna will beable to handle 4 or more calls simul-taneously. Because of the ability to useless satellite power per transmission,the cost of a telephone call will be lessthan US$4.00 per minute, making this avery desirable form of service for suchlocations.
Most service requirements can be satis-fied. The telephony capability enablescomputer data transmission as well asfacsimile and basic voice service and isespecially well-suited for languagesbased upon use of characters rather thana Western-type alphabet. The broadcastgroup call features also permit a widearea dissemination of information, sim-ilar to that used in both Inmarsat-A and-C. One of the important applicationsfor service is expected to be in conjunc-tion with aviation requirements, whichare woefully inadequately served on mostof the Pacific islands.
A key element of the Inmarsat approach todeveloping services is the open invita-
FIGUAl 3. INMARSAT SHIP EARTH STATIONS
Inmarsat A Inmarsat B
100 KG
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16 KBPS Voice Channel 6.4 KBPS Voice ChannelFAX (up to 9.6 KBPS) FAX (up to 2.4 KBPS)Data up to 9.6 KBPS Data up to 2.4 KBPSTELEX56/64 KBPS Option
tion to manufacturers to participate inthe development of service specificationsand to have available those requirementsin order to provide their own version ofa standardized product meeting theseinternationally agreed designs. Thistechnique has served Inmarsat well byletting it be known that no manufacturerneed be excluded from serving the marketif they are able to meet the designcriteria established by the organization.This helps the system as a whole throughcreating competition (by loweringprices), and results in substantiallyincreased sales calls to customers forInmarsat equipment as the manufacturersseek to sell their products. As withearlier standards, a number of manufac-turers have stated their intention toprovide equipment. To date, this listincludes the following 11 companies:
ABB NeraFurunoJapan Radio Co. (JRC)GlocomMagnavox/NavComMobile Telesystems, Inc. (MTI)NECRockwell T ternationalScientific AtlantaSperry MarineToshiba
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It is expected a number of additionalmanufacturers will come forth withadditional models and features.
Obtaining permission from nationalauthorities to use Inmarsat-M equipmentin a marine environment will be similarto use of Inmarsat-A or -C. The situa-tion for land-based operation has beenvery different. National authoritiesexpress substantial concern about use ofcommunications equipment within theirareas of jurisdiction. Those concernsare generally based upon either nationalsecurity issues or loss of revenues dueto bypassing of the domestic and inter-national communications networks.
Inmarsat has undertaken initiatives inthe various regions of the world todevelop cross-border agreements underwhich individual users will be permittedto take the equipment in and out ofcountries without the difficulties en-countered in the past. With 66 countriesnow members of Inmarsat, the chances ofdeveloping such agreements on regionalbases are enhanced.
5. FUTURE DEVELOPMENTS
e
-ogression of service capabilitiesInmarsat system has been an
evolution of technologies driven bymarket forces. Even at this point when anew service is being implemented, work isprogressing on further future capabil-ities. The industry is currently focusedon development of hand-held user equip-ment, and much is made of interconnec-tivity with cellular systems. The truthof the matter is that Inmarsat systemshave had such capability for years.COMSAT has provided equipment for useaboard ships which can also communicatethrough cellular systems when in range.They have also entered into arrangementsfor aeronautical service under whichplanes will have telephones which willuse satellite or terrestrial systemsbased upon the service available.
Project 21 is still under consideration,with final decisions to be made early inthe second half of 1993. As in the past,the defining of this service is going to
853
be based upon the form of technologywhich makes economical sense to satisfyuser requirements. Yet, as we have seenwith Inmarsat-A and Inmarsat-C, theinitial designs of Inmarsat-M will beimproved upon by manufacturers during thenext several years with additional ser-vice features incorporated to accommodateuser needs.
6. CONCLUSIONS
Communications technology for mobilesatellite communications is not standingstill, and will continue to evolve foryears to come. Market forces will servethe user as equipment and service costsare lowered to compete for revenues, withattendant improvements in quality ofservice. The user will have broaderchoice to obtain the equipment which bestserves his requirements.
Telecommunications Infrastructure - Is It a Catalyst for Growth in Malaysia?
Omar Charles Abdul lahAsia Manager, Network Services, ICL Malaysia
7th Floor, Wisma Damasara, Jalan Semantan50490 Kuala Lumpur, Malaysia
Tel : +60-3-2543644Fax : +60-3-2556116
Internet : o.charles@mya 0101.wins.icl.co.uk
1. ABSTRACT
This paper examines the effect of investment in Telecommunications infrastructure on domestic growth and overseas
investment in Malaysia. Malaysia is moving from a primary commodity-based economy to a manufacturing-and
industrial-based one. Te;ecommunications is one of the factors influencing overseas investment decisions and a
domestic telecommunications industry is developing in parallel.
2.0 Introduction
The development of telecommunications infrastructurecontributes to economic growth in two ways by
developing the domestic telecommunications equipmentand service markets, and by encouraging overseas
investment by multinational corporations.
Malaysia at the time of independence had an economydependent solely on primary commodities, mainly rubberand tin. To these were added petroleum, palm oil andcocoa. The Government policy has been to shift to amanufacturing based economy and this has now beenlargely accomplished as primary commodities (excludingpetroleum) now amount for less than 10% of the GDP(Gross Domestic Product).
In attracting investment by foreign multinationals, themain factors are political stability, fiscal environment,availability of labour and infrastructure.
The Malaysian telecommunications, network was
previously operated as a Government department. In 1987it was privatised, and 1990 the shares were on the floatedon the KLSE (Kuala Lumpur Stock Exchange). This hasoccured at a time of rapidly increasing demand for basicand value-added telecommunications services, resulting inthe opening of opportunities for local companies to enterthe market as service or equipment provider:.
854
3.0 Growth Through Foreign Investment
The South-East Asean countries can be classifiedaccording the level of telecommunications infrastructure,as in Table 1.
Table 1: Classification of S.E. Asian Countries
Hong Kong
Singapore
Highly developedinfrastructure - matching orexceeding developedcountries.
Malaysia Intermediate development
Taiwanof infrastructure.
South Korea
Thailand Low level of infrastructure
Indonesiadevelopment.
Phillipines
Vietnam
Cambodia (Kampuchea)
Laos
Burma (Myanmar)
North Korea
(-;C
Hong Kong and Singapore are both city states, and bothhave focused on telecommunications as a key industry toencourage entre* activities, such as regional networkingheadquarters. They have telecommunications facilitieswhich exceed many developed countries as a result of theirbeing small urban environments.
The remaining "Asian Tigers", Malaysia, South Korea andTaiwan have telecommunications infrastructures generallyhigher than most developing countries and it is thesecountries that are rapidly industrializing. Taiwan andKorea have largely relied on domestic industrial growth,whilst Malaysia has attracted foreign investment,
especially in the semiconductor and electronics sectors.
Consequently Malaysia finds itself competing with
Indonesia, Thailand and the Philippines for such
investment. Prospective investors face a choice of goodinfrastructure but limited and expensive labour in
Singapore and Hong Kong at one extreme, and cheaplabour but poor infrastructure, as in the Philippines andThailand, at the other extreme.
Malaysia lies between the two positions, having relativelycheap labour, but reasonably developed infrastructure, andso has been successful in attracting 'higher technology'investment, such as semiconductor manufacturing.
The dynamics of this scale are expected to change asindustry becomes more dependent on informationtechnology and global networking.
The garment and toy industries in Hong Kong provide aforetaste of this, where designs from the U.S.A. or Europeare sent electronically to Hong Kong factories, as areorders.
This electronic transfer of design information, as well asthe adoption of EDI, will increasingly favour countrieswho can provide both cheap labour and developedinfrastructure.
Incident ly, Malaysia is now suffering from fullemployment, a problem which many countries would wishto have, but which restricts availability of labour for newfactories.
The number of foreign investment projects has grown as isshown in figure 5. Electronics and semiconductor sectorsaccount for about 25% of these projects.
The capital investment over this period (1986 - 1991) hasrisen from M$5 billion to M$28 billion. The effect of theworldwide recession starting in 1991 was to hold the 1991level to the same as the 1990 leve1141.
G55 ,
4.0 The Domestic Telecommunications Industry
This market has been opened following the privatisation ofthe PTT, and currently the successor company, Telekoi..Malaysia Berhad, has an equity structure of 82.4%Government ownership, 17.6% private ownership111. Itretains monopoly rights for basic telephone services.
The basic network capacity has grown quickly over thisperiod (see figures 1-4), at approximately 10% per year.
The provision of services is regulated by a Governmentagency, Jabatan Telekom Malaysia, which awards licensesfor basic and value-added networks.
Amongst the projects that Telekom have implementedover this period are a nationwide digital radio (microware)network, a nationwide fibre-optic backbone, parts of theASEAN submarine fibre network, VSAT, digital leasedline (64 Kbps and 2 Mbps) service.
There has been, however, an explosive growth in
value-added and data services.
The market has been opened to other carriers, and severallocal companies are providing services: TRI (TechnologyResource Industries) with a 900 MHz cellular radionetwork, Binariang with a proposed VSAT network basedon a to-be-launched Malaysia Satellite system(MEASAT-1 and -2)121 and INC (Information NetworkingCorporation) with a VSAT network based on Palapasatellites.
A license is expected to be awarded for an 800 MHzcellular radio network and for EDI services.
Telekom Malaysia, and other local telecommunicationscompanies, including TRI and Sapura (a local equipmentmanufacturer) are now looking to expand their marketsoverseas, especially to developing countries, in the areasof consultancy and equipment supply. An example of thisis the recent award of a contract by the LaotionGovernment to TRI to build-operate-transfer a telephonenetwork in Laos.
An interesting side-effect of privatisation and liberalizationof the telecommunications industry can be seen in theinvestment figures.
For the five year period, 1986-1990, the total investmentin the telecommunications Sector was M$4,211 Million, ofwhich M$779 Million was Government investment. Forthe five year period 1991-1995 the total investment isprojected as M$5,352 Million, but only M$41.3 Millionwill be Government investment, the balance in each casebeing the private sector investment131.
4.1 Projections of Future Growth
During the period 1991 to 1995, the number of directexchange lines is projected to rise from 1.5 Million to 3.0Million. In the same period the number of leased circuitsis projected to grow from 15,000 to 40,000, and thenumber of public X.25 subscribers is projected to growfrom 1,125 to 2,640.
This level of growth and the investment of over MS1billion per year will obviously spur local development. Anexample of such development is the opening of aMalaysian Fibre-optic cable factory at the end of 1992.
Growth in the diversity of services is expected, forexample, an ISDN network will be launched in 1993, aswell as 800 MHz cellular radio service.
Table 2 Value Added Services in Malaysia
Name Type Provider
MAYPAC X.25 Network Telekoms Malaysia Bhd
MAYCIS X.2I Network Telekoms Malaysia Bhd
Telemail E-Mail Telekoms Malaysia Bhd
Telita Viewdata Telekoms Malaysia Bhd
ATOR 450 450MHz Telekoms Malaysia BhdCellutar
(not yetlaunched)
(to belaunched in
VSAT
VSAT
Telekoms Malaysia Bhd
Binariang
1995)
INC X.25 Information NetworkingCorporation Sdn Bhd
INC Database Information NetworkingAccess Corporation Sdn Bhd
INC FAX Information Networkingmessaging Corporation Sdn Bhd
INC E-Mail Information NetworkingCorporation Sdn Bhd
EDI Malaysia EDI Electronic DataInterchange (M) Sdn Bhd
VANS EDI Value Added NetworkServices
Celcom 900 MHz Technology ResourcesART900 Incorporated (TRI)
Video Video Telekom Malaysia Bhdconferencing conferencing
856
5.0 Conclusions
The rapid development of telecommunicationsinfrastructure encourages growth in two ways: by makingthe country more attractive for foreign investment and byencouraging the local telecommunications industry.
To make a developing country attractive for foreigninvestment, good infrastructure, includingtelecommunications, needs to be coupled with availabilityof labour and other factors.
The importance of telecommunications infrastructure as afactor will increase as technologies such as CAD(Computer Aided Design), CAM (Computer AidedManufacturing) and EDI (Electronic Data Interchange)become key in more and more industries.
The privatisation of the PTT and the opening of market tothe service providers, has encouraged the growth of thedomestic telecommunications industry, and has allowedthe level of overall investment to be raised.
References
[1] Telekom Malaysia Annual Report, 1990, pp10-11
[2] Malaysia Business Novermber 1992, pp 34-35
[3] Sixth Malaysia Plan 1991-1995 (RancanganMalaysia Kenam 1991-1995), 1991,Government Printing Office
[4] Statistics on the Manufacturing Sector inMalaysia (1986 - May 1992), MIDA(Malaysian Industrial Development Authority)
Figure 1 : Growth in Basic Telecom Services (Malaysia)
Direct Exchange Lines (X 1000)1,200
1,000
80'
600
400
200
1987 1988 1989 1990(Source : Telekom Malaysia)
60
50
40
30
20
10
0
Figure 2 : Growth in Other Telecom Services (Malaysia)
Subscribers (X 1000)
"c" ATUR450 Cellular Radio
Datel Dial-up data
X Leased Circuits
1987 1988 1989 1990(Source : Telekom Malaysia)
Figure 3 : Growth in Data Network Services (Malaysia)
Subscribers1,200
1,000
800
600
400
200
'MAYPAC (Public X.25)
.+Telita. (Viewdata)
MAYCIS (Public X.21)
111Telemail (Public X400)....
01987 1988 1989 1990
(Source : Telekom Malaysia)
Figure 4 : Telephones per 100 Population (Malaysia)14
12
10
8
01986 1987 1988 1989 1990 1991 1995
(Source: Telekoms Malaysia)
858
Figure 5 : Foreign Investment in Malaysia Manufacturing
11000
800
600
400
200
0
Number of Projects Approved
1986 1987 1988
859
1989
0
1990 1991(Source : MIDA)
COMMUNICATIONS IN THE RUSSIAN FAR EAST
Chuck SchumannGeorge Sapov
AmRussComAnchorage, Alaska USA
Moscow, Russia
ABSTRACT
Russia faces many obstacles in trying to develop a viable economy. Business developmentis hampered by the current lack of communications. This paper describes the presentcommunications infra-structure in the Russian Far East and Siberian Regions. A model formodernization is presented along with the current Russian communications policy.
INTRODUCTION
The global society in which we live was created by the twotechnologies of transportation and cornmunicationsl. The needfor modem and efficient communications is a major obstacle inRussia's struggle to develop a democratic society and a marketeconomy. Communications is the most important factor of theeconomic infrastructure of any country2. Without communica-tions, economic development is difficult.
GEOGRAPHICAL PERSPECTIVE AND RESOURCES
The Russian Far East is an area of over six million squarekilometers. It is most closely compared to Australia for an areaof similar size and population.
It is not a separate physical region, and its borders with easternSi,>eria are arbitrary (SeeMap). The Russian government consid-ers it as a planning region and a unified economic entity within theRussian Republic.
The Russian Far East is sparsely populated. The majority of thepopulation is concentrated in the southern areas of the territory.Similarities in distribution of population can be made to Canadaand Alaska where the majority of the population lives in thesouthern extremes.
Political Dates Area Sq.Km.
Populates Papule Uon Densityper Sq. Km
Maritime Kray 165.9 2,260 13.6
Khabarovsk Kray 824.6 1.824 2.2
Amur Oblast 363.7 1.058 2.9
Kamchatka Oblast 472.3 466 0.9
Magadan Oblast 1,199.3 543 0.5
Sakhalin Oblast 87.1 709 8.1
Yakut ASSR 3,103.2 1,081 0.3
Russian Far East 6,216.1 7,941 1.3
In Thousands
860
Colonization of the Russian Far East took place during the finalstage of the Russian expansion that began in the late 16th century.The Russian Far East provided a large amount of natural wealth.First furs, and later minerals, provided some of the impetus forexpansion.
Country Population SquareMiles
PopulationPer Square
Mile
Russian Far East 7,941,000 2,400,094 3.3
China 1,130,065,000 3,696,100 305.7
Australia 16,646,000 2,966,200 5.6
Source; Pravda 1989
The Russian Far East is isolated from the day-to-day activities ofEuropean Russia by virtue of its distance. There is a seven to tenhour time difference from Moscow depending on the particulararea of the Russian Far East being considered. Air travel fromMoscow is equivalent to a transoceanic flight. Flying time fromKhabarovsk to Moscow is approximately nine hours and twentyminutes. In comparison, it is approximately two hours to Seoulor Tokyo from Khabarovsk and six hours to Anchorage.
The land is rich in gold, coal, diamonds, and oil. Gold and coalreplaced furs as the primary economic opportunits, during the19th century. During the Soviet period, the number of differentminerals extracted in the region increased from seven to almosteighty3. Fishing is another important resource of the Russian FarEast. Varieties include herring, salmon, and cld. Exportation ofall these natural resources is proving to be a major source ofrevenue for the local and national economies.
Oil and gas development will likely prove to be the most domi-nant resource related activity during the next two to three de-cades. The area on and around Sakhalin Island is rich inpetrochemical deposits. Other areas within the Russian Far Eastprobably contain large deposits as well. Unlike areas in Siberiaand the Northern KoMi region, the previous petrochemical devel-opment has been rather minimal. New development by major oilcompanies is occurring today on Sakhalin Island. Further lease
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sales are planned for the near future.
RUSSIAN COMMUNICATIONS HISTORY
The following is a brief outline of the history of telecommunica-tions in Russia according to the Russian Ministry of Comm unica-tions4:
1855 The first telegraph was established between St. Petersburgand Moscow.
1882 The first city telephone stations began to work in St.Petersburg, Moscow, Odessa, and Riga.
1899 The first rural telephone network was erected in Labedinskydistrict of Kharkovsk province.
1926 The first automatic telephone switch was put into operationin Russia.
1939 The longest area intercity telephone in the world wasconstructed between Moscow and Khabarovsk (approximately9000 kilometers).
1959 The first multiplexed city telephone channels were put intooperation.
*1962 The first system of mobile radio telephone communicationswas put into operation.
1965 The first communications satellite was launched. The firstinternational automatic telephone communication between Mos-cow, Warsaw, Prague, and Berlin was put into effect.
1975 The first geostationary communications satellite waslaunched.
RUSSIAN COMMUNICATIONS STATISTICS
The Russian Ministry of Communications estimates that 1,100,000people are involved in the communications field within Russian.There are 21.2 million installed telephones within the RussianFederation. The number of installed telephones per 100 individu-als in Russia places them in 33rd place with respect to othercountries6.
There are currently about 15 million requests from people whowant a telephone installed in their home. The Ministry estimatesthat 50 - 60 million people are waiting to get telephone service.Currently, the annual increase of installed telephone apparatusesis 1.000.000. This equates to a 15 year wait for a telephone at thecurrent annual increase.
The current system 41,000,000 international telephone calls peryear8. Until recently, all international telephonecommunicationswas made through one automatic station in Moscow. There areapproximately 4000 communications channels for thepurpose ofproviding international telephone calls. International telephonetines are provided through a network of ground channels throughthe Ukrainian and Belarussian territory, radio-relay transmissionto Finland, underwater cable from Nakhodka to Japan, and satel-lite access through Intersputnik, Intelsat, and Eutelsat.
862
There are about 33,500 automatic telephone switches in (pet alion in the country. The switches have a total capacity of 22million numbers. Of the 15, 00(1 automatic telephone stations(ATS) serving local networks, the overwhelming majority arecoordinate mechanical systems. The Intercity network is c..niposed of approximately 270,000 channels. Approximately o5'1.are operated on cable, 30% by radio -relay and 3% throughsatellite9. Radio-relay includes microwave and st on- w as:2. trans-mission.
COMMUNICATIONS IN THE RUSSIAN FAR EAST
The automatic telephone switches (ATS) that arc in operation inthe Russian Far East today consist of step relay and strowger typeinstallations. Until recently, there has been no direct dial inter-national telephone service available. The direct dial service thatis available today is confined to the overlay networks. All otherinternational calls arc routed through operators with a wait offrom several hours to days before being able to obtain aninternational circuit.
Only 50 percent of Siberian and Russian Far East intercitytelephone communications a:. e automated. More than 30 percentof the regional centers have no automatic intercity telephonestation guaranteeing connections for subscribers in districtcen-ters. The average intercity telephone network serves approxi-mately one billion conversations per year. Comparable figuresfor other countries are the USA at 68 billion and Germanyat 12.6billion10.
Intercity channels using digital transmission systems compriseless than 1 percent of the overall number. Fiber optic cables arenot yet in use in the Far East Region of Russia. Internationalpublic switched voice communications to and from the RussianFar East and Siberia transit through a single Moscow station withonly 4,000 channels. This station serves 41 million calls peryear".
Individuals who do not have telephones or are on the waiting listto obtain one use one of the phone centers located in the urbanareas. The telephone centers are typically located in conjunctionwith a central office and provide a mixture of intercity and localtelephones that are available for use. The centers are all wellused. There is usually a wait for people to access the availablephones.
The Russian Ministry plans to construct fiber optic lines be tweenRussia and three countries. The first line will connect Russia toDenmark. The second will be installed between Palermo, Italyand Novorossiysk, and the third is to connect Nahodka withJapan and Korea12. The latter is a joint project of KDD, KoreanTelecom, and Telecom Denmark.
Three new international telephone stations are also currentlybeing constructed. Two of these are located in Moscow,and oneis in St. Petersburg. The total design capacity of these stations isapproximately 10,000 channels. Additionally, internationaltelephone stations are planned for construction in Ekaterinburg,Novos:oirsk, Samara, Khabarovsk, and Nogerod.
Currently, many independent overlay networks are being con-structed throughout the Russian Republic. The overlay networkis a telecommunications system that does not provide regularaccess to the Russian Public Switched Telephone Network
(PSTN). The overlay networks are being used to provide cledi-ci..,e4 services to clients that reqtdre international telephoneservice and access to advanced communications services (ISDN).
I nmarsat terminals are being used in most developing economiczire.p. and urban centers. Many companies involved in the naturalrt.:sot/ice industry use Inmarsat terminals to make their interna-Carnal telephone calls. These companies find Inmarsat as thepractical and immediate solution to their international communi-(.Ltiorts needs. Installation of Inmarsat terminals became a major5asiness activity for startup communications companies withinthe Russian Republic during the past two years.
N . w internationally accessible overlay networks have been com-_Acted in Khabarovsk and on Sakhalin Island. Thesenetworks arepr ently extending themselves to urban centers tru-oughout theRussian Far East. Additionally, a major international satellitestation is planned for Vladivostok for 1993. Currently, there are
international earth stations operating in Khabarovsk, one in.sakhodka, one in Anadyr, and three on Sakhalin Island.
Competition is already finding its way in:o the communicationsmarketplace. This has drastically changed the cost of an inte,-na-tional telephone call in the Russian Far East region. It isal.ticipatea that connections between some of these satellite..ornmunications facilities will provide enhancement of the do-mestic communications network as well. Plans for cellulartelephone systems are already being drawn up for all of the majorurban areas in the Russian Far East. Khabarovsk and Vladivostokarc included on the recent Federal cellular licensing lottery. USWest was the only applicant to bid on all of the locations currentlyavailable as of the writing of this paper.
RUSSIAN COMMUNICATIONS POLICY
Inc Russian Ministry understands that communications net-orks are an integral part of the market economy of the country.
The Ministry of Communications of Russia has stated that itintends to employ the following policy of reforms in the field ofcom:nunications.
I . Flexible tariffs for communications services.2. Introduction of liberal tariffs to the extent of deepening andenlarging of economic reform.
Establishment of dedicated communications networks furing services to market structures of the economy.
4 Privatization of communications enterprises to the fullestextent possible.S. Foundation of joint-stock and private communications compa-nies. This includes those with allocated foreign capital.6. Application of modem western know-how in the field ofcommunications at the expense of bringing in the foreign capitaland modem industrial technologies.7. Working with foreign partners to conceptualize and engineercommunications projects.rt. T-ining of Russian communications specialists in educationalcenters of western countries.
IMPLEMENTATION
We propose that the fastest and most efficient method of imple:nenting a major upgrade of the telecommunications within theRussian Far East is to accomplish the following.
1. Decentralization of the existing international network configu-ration by running fiber optic cables and building satellite earthstations and new International Gateway Stations.2. Creation of a regional VSAT network.3. Construction of cellular radio systems and mobila telt phonecommunications occupying the 830 - 890 MHz frequency withVSAT connections between cells.4. Opening business centers with advanced communicationsnetworks.5. Support the establishment of private information systems.
Decentralization Of The International Network
In Figure 1, we present the conceptual configuration for the futureSiberian and Russian Far East network. Fiber optic cable fromSeoul and Tokyo will run to Nakhodka and on to an international
Ootiorl 6 63. Iftelsal 13.
13
Gov. 103° No's. ,7
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sk
Figure 1 Tokyo
station in Khabarovsk. The proposed international telephonestations in Vladivostok, Novosibirsk, and Irkutsk are connectedby fiber optic cable between Novosibirsk and Khabarovsk.Emergency restoral of the fiber optic line is provided by Gorizontor Intelsat satellite circuits. This allows the provision of a secureand highly reliable network.
Regional VSAT networks
The Russian Far East has seen a rapid rise in the use of satellitecommunications to meet network development needs.AmRussCom, using the latest technology, has designed a lowcost, multichannel digital earth station, for use with the world'scommercial communications satellite systems; Gorizont, Intelsat,and Eutelsat. Our two way satellite terminal uses an advancedmicrowave radio link system from Skydata, Inc. Modular solidstate electronic components and digital transmission technologyare used to provide network operators with a dynamic system.The terminal supports connections for telephone trunks, synchro-nous data, and digital video for public switched or private linenetworks.
In the Khabarovsk region, we will start with a Star network. Ina Star network configuration, network heirarchy becomes a factoras the hub station uses a larger antenna and often higher powertransmitters than remote site terminals.
Transmission between the remote node and the hub can occur atvarious data rates ranging from 9.6 Kbps through 128 Kbps. Themost satisfactory 16 Kbps voice quality currently available isobtained using a frequency-domain hybrid coding technique
863 JBEST COPY AVAILABLE
known as Adaptive Transform Coding (ATC). At 16 Kbps, mostusers rate the voice quality as equal to a local call. We are usingthe CS8000 voice and data multiplexing equipment manufac-tured by Pacific Communications Sciences, Inc. (PCSI). TheCS8000 provides a minimum of 4 data ports with up to 8 voicecards. Transparent support of Group Ill fax transmission isprovided on the voice paths.
The Star network is ideal for thin-route applications. A typicalproject is linking remote villages, mining camps or oil platf firmsinto the switched network. This often occurs through a so called"mini-hub". A Star network is useful in the beginning and canfulfill basic network requirements without large investments inmaster stations. Transition to a more highly interconnectednetwork topology like DAMA can occur as the traffic warrants it.A typical mini-hub can accommodate up to 20 SCPC circuits toremote terminals. Each channel is permanently assigned to acorresponding VSAT terminal.
When network traffic grows, or as more locations are added, theneed to move from a Star network to a full mesh DAMA networkmay become an operational requirement. A full mesh networkwill allow any station to connect to any other station through alimited channel pool allocated on demand by a master controlstation. For DAMA network applications, VSAT terminals arecombined with a DAMA master station controller, digital 16Kbps modems, and remote DAMA controllers. This type ofVSAT network can meet the needs of the largest regional net-work.
Cellular Telephone with VSAT Connectivity.
The global growth of cellular telephony has driven the cost
downward. This fact makes cellular a rural network developmenttool. For AmRussCom projects, a standard 830 - 890 Mhz AMPScellular telephone system has been chosen. Microwave andsatellite connections among the cells and the Base Station Con-troller (BSC) are used.
Private Company Information Systems
Russian experts in production and management are sure thatintroducing new means of communications will raise labor pro-ductivity by at least 40 percent. This approach is particularlyimportant in Siberia and the Russian Far East. It is becomingincreasingly clear that in order to operate in the bordcrlcssinternational market, Russian businesses will require high capac-ity networks that provide real time global links. As a result, thereis an increasing demand for more reliable networks. The movetoward integration of voice, images and data in multimediaenvironments provides ever increasing demand on the facilitiesof the most modem telecommunications network.
864
Business Centers
The building of business centers with advanced communicationsservices provides a temporary solution to provide con:mimicstions necessary for economic expansion. The business center isnot a core of the future information and communications developmcnt. It can provide a significant pinion of the immediateneeds of given area. The following communication services arcincluded as components of advanced, ISDN I ype. business centernetworks:
LAN (office network)WANVideotextVideo phone/Video ConfercncingImage processing systemG4 FacsimileElectronic newspaperElectronic mail
Due to the lack of digital terrestrial channels, a technicalapproach is required that can economically accommodate ISDNsabscribers in an area that is far from the service access point. Forimmediate nationwide and international connection of ISDNservices satellite communications is the method of choice. ISDN
Figure 2Business Center System
CS8000
Skydata RFT
Modem
subscribers can be accommodated by installing an earth station atthe customer's premises. Figure 2 shows the network structureusing satellite communications systems. We are assuming thatISDN services will become universally available and will be adominant factor in the now rapidly emerging world of publicswitched, data, and data related communications.
CASE STUDY-SAKHALIN ISLAND
This example provides a glimpse of one emerging overlay net-work located on Sakhalin Island. This network is located within
Sakhalin Island
Yuzhno Sakhalinsk
Japan
"I"
the Sakhincentr business complex in the city of Yuzhno-Sakhalinsk. The Salchincentr "Business Center" is equipped withan overlay advanced communications network built byAmRussCom.
Sakhincentr offers clients the following services:office space;advanced telecommunication services;commercial information about the Russian Pacific region;representation of commercial interests;international congresses and seminars;fairs, exhibitions, auctions, and sales;commercial advertising and mediator services.
Initially, this network connects Sakhalin Island to the worldthrough Brewster, Washington. Further network connections areplanned for the first quarter of 1993 to Japan.
The installation consists of a 4.6 meter Fl Earth Station operatingon the Intelsat 177 degree POR satellite. The facility uses GeneralI) ,taComm multiplexer equipment and PCSI voice compression(l)CM E) equipment. The system supports voice and data at this
The voice circuits are capable of 9.6 Kbps data and Group3 facsimile. A videoconferencing link is planned in the nearto ; ere.
Copper interfaces are used between the local switch and clients!ocated within the Sakhincentr business center. There are severaltypes of wireline and wireless interconnection facilities beingused to connect remote clients to this facility. These includemodems and DSU's on existing installed copper and microwaveand 900 Mhz links where copper is unavailable.
The facility is characterized by its small aggregate channel size.Thus, the PCSI DCME equipment was chosen in order to providethe economy of compression for each link as well as the flexibilityto oprate small aggregate carriers.
CONCLUSION
!sdodemization of the telephone and telecommunications systemwithin the Russian Far East is required to provide the infrastruc-:ure necessary to develop the Russian economy. Developing theeconomy is important to the survival of democracy. Foreignparticipation in this development is occurring, and more isnzeded. More participation is necessary to stimulate the develop-ment and push it forward. Technical training and training in the%kills of marketing and customer service are necessary in order toImplement successful programs.
AntRussCom is working toward implementation of a modernRussian Far East network. This is being accomplished throughthe numerous projects in which we are involved. The projectsInclude building satellite earth stations for the Russian interna-tional and domestic trunk system. The systems incorporate main-tenance and operational functions that respond to client demandfor more sophisticated services. AmRussCom is working withPacific Rim carriers to develop new technologies necessary forthe implementation of the modernization project.
BIBLIOGRAPHY
1 Clarke, Arthur C. "How The World Was One." New York:Bantam 1992 p.viii
2 Russian Ministry Of Communications "On The DevelopmentOf A Communications System With The Participation Of For-eign Investors To Improve The Business Infrastructure In theCountry" A Report From The Ministry Of Communications OfRussian Federation. Munich: October 1992
3 Rodgers, Allan, ed. "The Soviet Far East - GeographicalPerspectives On Development." London: Routledge, 1990.Minakir, P.A. (1983) Ekonomicheskaya razvitiya regiona:prograrnmnyi podkhod.
4 Russian Ministry Of Communications "On The DevelopmentOf A Communications System With The Participation Of For-eign Investors To Improve The Business Infrastructure In theCountry" A Report From The Ministry Of Communications OfRussian Federation. Munich: October 1992
5 ibid.
6 ibid.
7 ibid.
8 ibid.
9 ibid.
10 ibid.
11 ibid.
12 ibid.
,
865
Utilization of Developing Country Resources forResearch and Development Related to Telecommunication Products and Systems
A D V N KularatnaPrincipal Research EngineerArthur C Clarke CentreSri Lanka
M KalyanapalaResearch EngineerArthur C Clarke CentreSri Lanka
by
and
1. ABSTRACT
Shantha FernandoSenior Design EngineerExicom Australia Pty LtdAustralia
Parakum FernandoDesign EngineerStanilite Electronics Pty LtdAustralia
The paper highlights the experiences gained by a research and development team in a developing country,who were heavily involved with the design and development of telecom products and systems
to cater for very specialized needs of telecom service providers and telecom systems manufacturers.Specific experiences and problems discussed in the article are related to
design and development, manpower problems, procurement problems and other related issues.
2. SRI LANKA, ITS TELECOM INFRASTRUCTURE ANDINSTITUTIONAL REFORMS
Sri Lanka is an island nation with a populationof 16.9 million concentrated into 65,607 sq km.
It is relatively poor, with a per capita GNP of
US$ 418 in 1990. A former British colony, SriLanka has been independent since 1948. Itseconomic policies may be periodized as
traditional plantation export based policies(1948-56), import substituting industrializationpolicies (1956-77), and export oriented openeconomy policies (1977 to the present). SriLanka generally scores high on Physical Qualityof Life (PQLI) type indexes because of relativelywell developed educational and health systems.Literacy levels are high for a third worldcountry and population growth rates are low (1.3%in 1989). Sri Lanka has a tradition of civilianled, democratic governance, with multiplepolitical parties and more or less regularelections. Sri Lanka's telecommunication has ahistory as far back as to year 1858.
At the early stages of development towards 1966,23 strowger exchanges were installed in
metropolitan Colombo areas for introduction ofsubscriber trunk dialing. The Outer Colombo AreaDevelopment Project 1 (OCADS 1) was completed in1973, equipping major cities outside the capitalarea with cross bar switches and establishingmicrowave and cable inter exchange links. In1976 Sri Lanka was linked to foreign countriesvia INTELSAT and first international gateway wascommissioned providing a limited capability forinternational direct dialing. In 1980 littleover 60,000 direct exchange lines were in
operation with total number of telephones over80,000. Exchange capacity at this time wasapprximately 93,000 lines and there were nodigital exchanges. After 1977 normal growth ofdemand had been accelerated by the open economicpolicies of the government and high usage ofavailable telephone lines contributed to
866
difficulties in completing calls. Towards early'80s digital exchanges of the types El0 (CITAlcatel), NEAX (Japaneese) were introduced to thetelecom infrastructure and the Colombometropolitan areas were getting updated withthese new Exchanges. As at today 85% of thetotal telephones (approximately 150,000) areserved by digital exchanges and almost island-wide subscriber trunk dialing facilities areavailable. With regard to transmission systems85% are based on terrestial microwave links andPCM systems which couple four El0 exchanges, tenNEAX exchanges and five DX200 (Nokia) providingthe island-wide network. The country has a telexservice with over 1,500 telexes, faxes and a
limited amount of data communications links.Within the past several years a cellulartelephone service was established to service theColombo metropolitan area and the suburbs.
With the open economic policies and thegovernment placing high priority on export ledgrowth it has realized the need for higherpenetration of telephone services and datacommunication. In July 1991 the Department ofTelecommunications was converted to a governmentcorporation - Sri Lanka Telecom (SLT) with a viewto provide better service and to increase thepenetration. As prior to 1991 Sri Lanka had notelecommunication regulations as the service wasprovided by a government department. With theformation of telecommunciation authority aseparate regulatory body was also formulated.With the formation of SLT (where entire serviceresponsibilities of former Department ofTelecommunications was handed over) licenseissued to SLT specified the ranges of authorizedservices namely telephone service, publictelegraph service, telex service, datatransmission, maritime mobile service, facsimileservice, international television transmission,international photo telegram service, voice casttransmission, IDS (SATNET) service [low volumedata transmission using very small aperture
satellite terminals] and INMARSAT service.However services such as pay phones, cellularservice and data transmission etc are left out ofthe license. Presently cellular service is
provided by a private company Celltel Lanka andfor data services two private sector firms namelyDatanet and Electroteks (Pvt) Limited arecompeting. With most of the banks establishingautomatic tellers etc and lot of foreigninvestors investing in Sri Lankan projects, a
heavy demand is generated for data communicationsservices in the country. With the new reforms,the government is desirous of seekingparticipation on a joint venture basis with SriLanka Telecom of prospective investors /
operators, local and / or foreign for
accelerating the development of the
telecommunication network to meet the growingdemand for telephone services, which is expectedto reach 500,000 / 750,000 in 1995. To reachthese higher penetration levels the relatively
untried strategy of Build, Operate and Transfer(BOT) is what appears to be the government's mainstrategy. For further details reader may referto reference 1.
3. NEED FOR RESEARCH AND DEVELOPMENT ON TELECOMPRODUCTS AND SYSTEMS
In developing countries such as Sri Lanka the
reasons for low telecom penetration may be
related to factors such as need for large capitalfunds, inadequate technical know-how related tosystem management or engineering and the lowcapital investment on R&D etc. If the needs ofdeveloping countries are carefully analyzed one
could certainly see that demand for voicechannels is the primary requirement and providingthis basic service need be done at an extremelylow cost. Most telecom vendors price their
'state of the art' products and systems usingmultiplying factors with base costs than a
percentage profit margin. At the procurement
stages of modern telecom systems users may pay avery large sum of money for tne most moderntelecom engineering techniques be trialled by themultinational telecom giants using largeinfrastructural and expert environments.
However demands by the developing countries to
increase the telecom penetration may not need
those modern systems and what is necessary is
that more basic designs which could he purchasedor even developed at a lower cost within the
developing country itself. Most electronic /
telecom engineering undergraduate and graduateprogrammes in developing country universities arereasonably advanced enough to cater for the needsof basic design and development of telecomsystems. If the costs for product / systemdevelopment R&D could be lowered by utilizing
these engineers from developing countries with
some assistance from the relevant telecom
authorities it may he a definite advantage for
the telecom authorities in providing higherpenetration levels.
4. RELATED PROJECTS
While telecom reforms were progressing in Sri
867
Lanka within the past 2 - 3 years, the Arthur C.
Clarke Centre (ACC) was awarded with few R&D
contracts for designing and developing telecomproducts and systems such as Single Channel RadioSystems, Data Multiplexers, Pair Gain Systems etcand these contracts not only gave the opportunity
for the R&D team to gain extremely valuable
research and development experience but also
challenged the team to solve very peculiar
problems.
The generalized experiences and related issues
discussed in this paper are quite closely relatedto work carried out at ACC in relation to the
following major projects. Most projects detailed
under the next few paragraphs are either
completed or presently being completed.
4.1 10 CHANNEL PCM SYSTEMS
In Sri Lanka, telecom authorities receive a heavycritisism from the 'waiting list public' who are
forced to wait from few months to few years to
get a new phone connection, primarily due to the
fact that old outside plants are quite congested
and there are hardly any free telephone pairs
from Exchange Main Distribution Frames (MDF) to
subscriber premises. In combating this problem
telecom authorities have started installing 1+1
carrier systems (commonly known in Sri Lanka as
'SPAY' systems) where one physical pair of wiresis used with a low frequency carrier (24 KHz / 48KHz) to achieve a pair gain of 2. However these
units which were mostly imported were neither
cheap nor reliable and the compalints from
subscribers were quite heavy.
This 10 Channel PCM System was to propose a
locally designed, tested and manufacturable
system to achieve a pair gain of 5 adoptingtechniques used on common 32 channel PCM systems.System proposed was to achieve 10 voice channels
using two physical pairs of wires, using a
digital bit stream transmitted at 704 kbps over
ordinary pairs of wires extending up to few
kilometres from the nearest Exchange. Blockdiagram of the system is shown in Figure 1. Fora detailed technical description reader may referto reference 2.
Initial version was totally designed using CMOSintegrated circuits with a view to keep the powerconsumption at a low level. First prototype wasa quite complex system with about 15 individual
PCB modules. In order to achieve more compact
packaging the circuit modules designed withstandard components families are to be convertedusing the Programmable Logic Devices (PLD) etc.
This project was commenced as an in-house projectof the Centre with the need and demand be
justified by the Sri Lanka Telecommunication
Department. As there was no external fundingavailable for the project it was carried out at aslower speed with two engineers. One primary
problem faced by the team was the procurement ofspecialized telecom components from foreignsuppliers.
4.2 SINGLE CHANNEL RADIO SYSTEMS
Single channel radio equipment is normally used
to provide telephone facilities to remotesubscribers where a physical pair of wires is notavailable or practicable. In effect this
equipment replaces a pair of wires laid betweenthe subscriber premises and the Exchange.
In 1988 Sri Lanka Telecommunication Department(SLTD) has purchased 50 single channel radioequipment from a company in USA at a cost of US$2,300/= each. However it was revealed later thatthis equipment does not confirm to thespecifications as required by SLTD. Further SLTDfailed to commission these equipment and soughtthe assistance of the Arthur C. Clarke Centre torepair these equipment. The ACC agreed to
investigate and subsequently one system wasbrought to ACC labs for inspection. The testswere then carried out at the Centre.
Essentially each set consists of two systemsnamely exchange end system and subscriber end
system. Both these systems incorporate a radiotransceiver and a telephone interface circuit.Radio transceivers operate on duplex mode in VHFfrequency band and are similar in both systemsbut the interface circuits functionally differ.It was found that these interface circuits werenot specifically designed for the requirements inSri Lanka. Supplier has selected few PCBsdeveloped for some other applications and hasattempted to configure the requirement utilizingcircuit blocks available on these PCBs. It wasobserved that due to this 'adaptation' of variousPCB modules used for other systems the finalinterfaces were not compatible with Sri LankanExchanges. Further in the subscriber end system,the logic that determines the subscriber statuswas not designed adhering to standard digitaldesign practice and it was confirmed that thiscircuit would never function properly.Considering the above it was decided by theproject staff of ACC that it was necessary toredesign the telephone interface circuits. Alsoit was observed that there was a need to redesigneven the power supplies. Basic system blockdiagram is shown in Figure 2 and for furthertechnical details on the project one may refer toreference 3.
Finally SLTD was informed that it is not possibleto repair this equipment due to the abovementioned shortcomings and subsequently SLTDagreed to consider our proposal to redesign theequipment. This 'design modification' projectwas commenced with a commitment from the SLTD forapproximately US$ 17,000/= for modifying 50
systems which includes the design and developmentcosts as well as manufacturing costs of the newinterfaces. A prototype system was then designedby ACC and it is now in operation between the ACCand a nearby Exchange. Presently ACC has startedassembling the final interfaces with a view to
deliver 50 numbers of these modified systems. In
this particular attempt of redesigning the
interfaces, it was a great burden on the R&D teamto procure specialized telecom components fromforeign suppliers. For example once when theSubscriber Line Interface Circuits (SLIC) wereconfigured using few samples of (Motorola) chips
868
and when the field trial / manufacturing sta.escommenced it was observed that the procurement .1100+ quantities of the same components Iron
component retailers (or Motorola agents
themselves) were almost an impossible task.
However project managers finally succeeded
procuring these from a Singapore supplier. This
delayed the project by several months. Another
problem worth highlighting here is that the
reliability problems faced at field trials due topoor PCB quality. This problem was ultimately
cleared by rearranging the components on the PCBsand avoiding close tolerances on the PCB track
widths and spaces. (However the problem could
have been avoided totally if it was economical
for the team to order PCBs from a foreign PCB
manufacturer. Most local companies who are
manufacturing telecom / electronic products do
not have PCB manufacturing plants with doublesided through hole facilities.)
4.3 DESIGN OF A TDM SYSTEM FOR TELEXMULTIPLEXING BASED ON CCITT R101
Towards first quarter of 1991 one of the
successful telecom manufacturers in Sri Lanka -
Electroteks (Pvt) Limited reached the Arthur C.
Clarke Centre for R&D assistance in developing atelex mux system based on CCITT specificationR101/1988.
This system presently known as ETX-48 is a 46
channel maximum capacity telex multiplexer systembased on the CCITT recommendation R101.According to CCITT specifications the system was
to multiplex 50 - 300 baud telex channels and toultimately transfer the multiplexed bit stream ona 2.4 kbps over voice grade telephone pairs usingindustry standard modems based on CCITT V.26.
The system block diagram is shown in Figure 3.
Main blocks include
(a)
(b)
(c)
(d)
(e)
1 Transmitter Board1 Receiver Board6 Telex Channel Cards1 Modem based on V.26 standard1 Personal Computer (via RS232)
The system was designed using state of the art
components from fast TTL / HCMOS logic familiestogether with Programmable Logic Devices from theGeneric Array Logic (GAL) families. Furtherreceive module is based on an industry standard
Microcontroller Z8800 (Super 8) from ZilogCorporation. Transmit module containsapproximately 9 programmed GAL devices togetherwith other support logic chips. Channel cards ofthe system contains 8 channels per module andprovide total electrical isolation from the line
side using opto isolator devices. The system isconfigured in an Euro Card system with 240 mm x220 mm PCBs. For the purposes of local and
remote programming an IBM PC AT / XT or a
compatible could be used.
The transmitter board which contains fast TTL /
HCMOS logic and several customized chips is
occupying one board position on the Euro CardCage. This board in one direction communicateswith the Modem forwarding the multiplexed channel
data and clock signals while receiving the telex
characters from telex channel cards. Thetransmission board communicates with the receive
board via the processor buses of the
microprocessor subsystem on the receive board.
On the receive board the microcontroller runs ata clock rate of 10 MHz derived from a 20 MHz
crystal. This board takes care of the functionof receiving the multiplexed bit stream from the
Modem (receive channel data), demultiplexes andwrites telex characters towards the telex channelcards. Further the receive board has an RS232connection which couples the system to an IBM PC
or compatible for the remote programming and
subscriber channel data changes. Receive board
constantly communicates with the transmit modulevia the processor buses.
The Modem is a V.26 based state of the art modulewhich is used to transmit multiplexed telex data
on the voice grade line. Channel cards are 6 in
total and each card carries hardware to couple 8telexes with necessary line isolation and signal
conversion and conditioning demanded by the
receive and transmit modules. The power supply
based on a PWM technique provides the necessarypower rails for logic and telegraph circuits.
For further technical details please refe: to
reference 4.
The design team was responsible for the design
and development of the two most complex modulesof the system namely the transmit module and thereceive module where it was necessary to commencethe basic design work from hardware concepts to
final implementation of the system utilizingsemicustom components mixed with standard
component families. In order to save time the
team decided to utilize commercially availableModems, channel cards and the other hardwarealready utilized by the client Electroteks
(Pvt) Limited. Design staff was faced with usuallearning curve problems related to varioussophisticated engineering software packages to
programme semicustom chips etc.
This project is now being commissioned in anotherAsian country where the client of the ACC has wona competitive bid for supply, installation and
commissioning of 40 numbers of ETX-48 systems.
Funds needed for the project was negotiated and
agreed with the client and the project staff wasgiven the freedom to select the suitable
technology. This gave the R&D team the
opportunity of getting more advanced design
knowhow where the project work demanded the use
of several modern software packages for design
and simulation of various circuit blocks.
However in order to keep the overall R&D costs ata minimum, design and development tools wereselected using careful planning.
5. GAINING CONFIDENCE ON DESIGNING TELECOMSYSTEMS
0ne key point worth noting in this article is
that via carrying out design and developmentrelated to above projects (and other relatedprojects too) it was quite possible to prove thatif a suitably qualified group of developing
869
country R&D engineers are employed and given the
basic design tools and othc.r instrumentation, therelevant telecom authorities could attempt to
design and manufacture the 'less sophisticated'system components which are needed in few hundres
or thousands.
Examples of such systems are
(a)
(b)
(c)
(d)
Pair Gain SystemsPower Equipment for ExchangesData MultiplexersSingle Channel Radio Systems
In most of the above systems the necessary numberof working R&D engineers per project could vary
from one to several and hence could be easily co-ordianted by design team leaders who are less
experienced with the design and development of
large telecom plants (such as Digital Exchanges,
Datacom Systems etc).
Further with the systems with modest levels of
technical complexity (where overall system needsfew PCBs only) manufacturing is not a too complextask and assembly, testing and installation couldbe done with minimal infrastructural expenses forthe manufacturers.
6. LEVEL OF INVOLVEMENT BY TELECOM AUTHORITIES
Most telecom authorities in developing countriesnegotiate with the manufacturers in developedcountries for staff training when they procure
large telecom systems. For this reason these
telecom authorities have reasonably trained
engineers for installation, commissioning and
maintaining large and medium size telecomfacilities. Even though these engineers do notget an opportunity for detailing the designs or
the design methodologies used to develop these
systems they get an excellent opportunity to
elaborate on systems related aspects such as
relevant international standards, systemsconfigurations, reliability and long term
management etc. If these engineers could
collaborate with small R&D teams in institutionsin developing countries where electronic /
telecom / computer hardware design experiencedengineers are available, design of telecomproducts and systems to suit the specializedneeds of developing countries will not be
difficult. However it is necessary to arrangesuitable mechanisms for constant supervision,
discussions and close relationships to be
maintained between these groups at all stages of
such projects.
For example such close relationships may help thetelecom authorities to understand the peculiar
technical problems faced by R&D team engineerswhich relate to slipped deadlines etc. Anotherexample may be the demand for co-ordinated field
trials before the prototype designs are approvedfor manufacturing.
7. DESIGNERS' PROBLEMS DURING DEVELOPMENT STAGES
Some peculiar problems faced by the designers in
developing country R&D institutions may be not
9
similar to the experiences of design teams
working with large companies in developed
countries. The following may be few examples.
(a) The difficulties in getting the most up to
date information on electronic components orthe technology updates.
(b) Communication problems with developedcountry component suppliers due to distancesand costs involved.
(c) Difficulties in procuring small quantitiesof specialized telecom chips and otherhardware components for prototype building.
(d) Lack of sufficient funds for procuring R&Dtools with the 'state of the art' tagsattached on to same.
(e) Lack of sufficient hands-on experience or
senior staff to assist design teams whenthey face 'practical' difficulties at the
product development stages.
8. MANUFACTURE OF PRODUCTS
When a particular product development is
completed or field trials are successful and
manufacturing stages commence, teams may face
different problems such as reliability,repeatability, testing etc.
For example, when a prototype PCB is necessary atthe design and development stage, quality is notan important factor. However when manufacturingcommences the quality and reliability are most
important factors. For example, sometimesdeveloping country institutions and smallcorporations may not own proper PCB manufacturingfacilities with multilayer or even double sidedthrough hole types. Then it may be necessary totransfer the PCB layout to foreign manufacturersand the local parties may have to face deadlineproblems. (For a peculiar case of using e-mailfor urgent manufacture of some PCBs reader may
refer to reference 5.)
Sometimes when the product is nearing the
prototype / field trial stages the componentsused may become obsolete and the systemmanufacturer may face the demand for furtherdesign changes and this may sometimes lead to
very unplesant problems related to deliverydeadlines. (For example, the new families of
components needed to replace the obsolete onesmay have to be reimported.)
9. MANPOWER PROBLEMS
Based on the experiences gained through these
projects one could highlight that the most
peculiar and difficult problems to solve are themanpower related problems. Few particularproblems worth mentioning are
(a) Offering attractive remuneration packagesfor qualified, experienced and talentedengineering personnel.
870
(b) Maintaining good staff morale in supportingthe projects.
(c) Provision of very specialized technical
trainings for statt who are actively engagedin high tech related projects.
(d) Clearing various procedure related problems
in manning day to day activities.
(e) Loss of qualified and experienced
engineering manpower to greener pastures
within the country or abroad.
With regard to items (a) and (b) it is worth
mentioning that when R&D work need be progressedin environments governed by various financialrestrictions as well as procedural barriers it isextremely difficult to keep a high morale and a
team spirit in the interest of ultimate project
targets. For example, our experiences within thepast several years show that most qualified and
development oriented electronic engineers always
demand higher remuneration packages (compared tothe remuneration packages which could be given
within procedural and institutional
restrictions). One possible solution to overcomethis problem is to introduce incentive schemeswhere project funds could be utilized to provide
additional remuneration.
Another severe problem faced by the research teamat ACC is that experienced and qualified
technical staff are 'brain-drained' towardsdeveloped countries or oil rich middle east
countries during the middle of the projects.
This really creates very difficult situations forteam leaders who are pressurized by the clientsin relation to deadlines.
10. ACHIEVEMENTS
With the experiences gained by the design team itis clearly evident that following clearobjectives can be achieved as major successfactors.
(a) Reduce the cost of telecom products and
systems.
(b) Guarantee the final operation andcompatibility with existing systems.
Cost of a telecom product designed locally could
be very much lower compared to an imported
product from a developed country wheredevelopment / R&D labour costs are comparativelyhigher. Further the large corporations and theircorporate expenses are highly reflected on the
products and systems they sell. This is a
definite reason why a developing country shouldconcentrate on making use of their R&Dinstitutions with a view to utilize their limitedfinancial resources (sometimes borrowed or
received as a grant for infrastructuraldevelopments) for achieving more systems for lessamount of money.
When the product is developed in the userenvironment or close to user environment itselfthe compatibility and operational reliability is
(ii
always guaranteed. This is a definite plus
factor for telecom authorities to considerdeveloping a certain amount of telecomaccessories and subsystems.
11. CONCLUSION
The experiences gained by the ACC team who were
working closely with the telecom industry in SriLanka clearly showed that there is a very highpotential for the use of local R&D talents as aneffective measure for lowering the demand for
capital funds for telecom systems as well asassisting local industrialists who are willing tomanufacture and supply telecom systems andsubsystems for local telecom authorities. If
means and measures are identified to overcomevarious problems related to R&D, there is nodoubt that developing countries could becomeself-reliant in manufacturing a substantialpercentage of their telecom systems demanded.
12. REFERENCES
1. Rohan Samarajiva; Institutional Reform in
Sri Lanka's Telecommunication System :
Regulation, Corporatization and competition- Chapter for Book on TelecommunicationSystems in Western Asia; edited by Eli Noam(to be published)
2. W N P Fernando; Project Report on 10 ChannelPCM System; Arthur C Clarke Centre - SriLanka (internal publication)
3. W N P Fernando; Project Report on SingleChannel Radio System; Arthur C Clarke Centre- Sri Lanka (internal publication)
4. Technical Manual of ETX-48 Telex MultiplexerSystem; Electroteks (Pvt) Ltd - Sri Lanka
5. ADVNKularatna and Martin Allard; LowCost Means for Global Data Transfers HelpSophisticated Technical Tasks; Proceedingsof PTC '92; pages 293 - 297
871a
EXCHANGE
CO
1)
MAIN
DISTRIBUTION
FRAME
SUB1
SUB2
SUB3
SUB10
PCM MUX
DMUX
EXCHANGE
END
EQUIPMENT
TX
DATA RATE
704 KBits/s
RX
PCM
MUX
DMUX
SUBEND
EQUIPMENT
SUB1
SUB2
SUB3
FIGURE NO .1
- BLOCK DIAGRAM OF 10 CHANNEL PCM SYSTEM
EXCHANGE
MAIN
DISTRIBUTION
FRAME
(MDF)
EXCHANGE
INTERFACE
CIRCUIT
DUPLEX
11.0
.RADIO
TRANCEIUER
o r,
DUPLEX
RADIO
TRANCEIVER
SUBSCRIBER
END
INTERFACE
CIRCUIT
SUBIO
EXCHANGE
END EQUIPMENT
SUB ENO EQUIPMENT
FIGURE NO.2 - BLOCK DIAGRAM OF SINGLE CHANNEL RADIO TELEPHONEEQUIPMENT
TELEPHONE
TXCS
46 --1-
1
BOARDI. 1 e a - ilO.,! CHANNEL:
lai:L271.
"'; 1;: CAP.DS r- 'OHt :
il I i
tll'. RX 0BOARD
K--EXCS
0DEM
M
0D
M
RX
II
4i BOARD
Tx
I BOARD
TXCS
LOCAL END REMOTE END
FIGURE 1\-0,3 BLOCK DIAGRAM OF ETX 45
The Political Economy of Deregulating Telecommunicationsin Houg Kong
Paul S. N. Lee, Ph.D.Department of Journalism & Communication
Chinese University of Hong KongHong Kong
1. Abstract
The deregulation of telecom services in Hong Kong reached a point ofending the Hong Kong Telephone Company's monopoly in local voicecommunication in 1995. Nearly six years have passed since the firstproposal for a second telecom network was submitted. In these six years, thealignment of different business interests and political forces affected thedevelopment of the second telecom network. After 1990, the control of thedevelopment has fallen into the hands of China. The most likely winner ofthe second network in Hong Kong will be one which ensures secure controlof China in its operation. Minority foreign partners with telecom expertiseto offer would also be included in the play. The existing telecom player willbe put at a disadvantaged position if the new network is not operated in abusiness-like manner.
2. INTRODUCTION
Hong Kong people is aninformation-conscious species asevidenced by the high penetrationrate of radio paging services andthe rapid growth of facsimile. ByDecember 1991, 877,000 pagerswere licensed in Hong Kong; 1 outof 6.6 people was using a pager.This figure puts Hong Kong at thetop of the list of radio pagingpenetration in the world.' Thegrowth of fax lines in the pastdecade was also amazing. In 1984,there were only 1,024 fax lines; byMarch 1992, the number wasincreased to 146,116, with anaverage growth of 1,771% per year.As of September 1992, out of 100telephone lines, 17 were fax lines.This fax density is second highestin the world, only after Japan
874
which has 26 fax lines out of 100.2Today, Hong Kong has more than3.5 million telephones in service,with 61 telephones per 100population.'
The growth of mobile telephoneservices is also tremendous. Inmid-1992, there were about 200,000subscribers of cellular phoneservices, reaching the point ofsaturation. It represented anincrease of 40% from last year.The Hong Kong government hadto issue five licenses in July 1992for digital mobile telephoneservices in addition to the oldanalog cellular services. Twolicenses will use the AmericanAMPS standard while three willuse the European GSM. This is tomaximize the capacity of theservices.'
A year ago, the governmentalready issued four licenses forCT2 (Cordless Telephone 2)services. These services have beenavailable since the end of 1992.More people in Hong Kong areusing data communication as well.In 1991, the connections to HongKong Telecom's switched servicesgrew by 18% and non-switchedservices by 24%.'
3. DEREGULATINGTELECOM NETWORK
In face of the surging demands formodern telecommunicationfacilities, the Hong Konggovernment, after dragging theirfeet for years, finally made up hermind in May 1992 to open up thelocal telecom market for fullcompetition by 1995 when theexclusive franchise of Hong KongTelephone Company, a subsidiaryof Hong Kong Telecom, in voicecommunication expires. InSeptember 1992, the governmentcalled for bids for the secondtelecommunication network whichcan provide non-exclusive data andfax services before June 30, 1995and voice services after that date.The license holder can alsoconnect to Hong Kong Telecom'sinternational network, sharing therevenues of international calls withHong Kong Telecom which stillhas monopoly in internationaltelephone and data services until2006.
This last provision for connectingwith Hong Kong Telecom'sinternational network and sharingthe revenues is very important. Itmakes the construction of a secondnetwork in Hong Kong financiallyviable. In their first study on thetelecom industry of Hong Kong,
875 c.
the Booz Allen and Hamilton hadthe following comment:
"It is only if internationalcompetition is permitted indue course that we canconclude with confidencethat network construction ofa second telecommunicationnetwork is desirable"6
The hesitation of government interminating the voice monopoly ofthe Hong Kong TelephoneCompany before was one factorcontributing to the demise of thecable project in 1990. Without apromise of revenues frominternational calls, thecommitment of HK$7 billion inconstructing an optical fibrenetwork merely for cable televisionand data services could hardly bejustified.
Now a second telecom network ison the agenda. The forces at workbehind the deregulation oftelecommunication network isworthy of study. Because of thedelay in decision, an alternativenetwork for competition has beenshelved for more than five yearsand the cable television projectwas almost abandoned for good.
4. FORCES AT PLAY
To understand the politicaleconomy of deregulating telecomnetwork in Hong Kong, we have toidentify the major players first.The players can be identified interms of capital ownership. Theconstruction of a second telecomnetwork requires a huge amount ofinvestment. Without adequatecapital, no company can competewith the dominant incumbentoperator - Hong Kong Telecom.The identification of capital
interests in deregulation helps usto analyze the complexity in thederegulating process. Theownership of capital indicates theinterests represented by thecapital.
There are six major types ofcapital interests in Hong Kong.They are British, local-Chinese,PRC-Chinese (People's Republic ofChina), Taiwan, American andJapanese. Among them, the mostimportant are the British, local-Chinese and PRC-Chinese capital.
By the end of June 1992, the totalvalue of the companies in theHong Kong Stock ExchangeMarket was HK$1,389 billion. Tenbig families accounted for 53% ofthe total values. Among them, theKeswick (Jardine Matheson),Swire (Swire-Cathay PacificGroup) and Kardoorie (ChinaLight-HK Hotel Group) Familywere British while the rest werelocal-Chinese.'
Apart from these family holdings,the Hong Kong Telecom, HongKong & Shanghai BankingCorporation and Hang Seng Bank(a subsidiary of HK & ShanghaiBank) accounted for another 18%of the total market values of thestocks.' In other words, over 70%of the capital market and businessactivities were controlled by 12groups (as Hang Seng wascontrolled by Hong Kong Bank).The remaining 30% values of thestocks were shared by more than300 companies listed on themarket. From this we can see thatthe capital in Hong Kong is highlyconcentrated.
876
4.1 British Capital
Before 1980s, the British capitalwas dominant in Hong Kong. Inthe late 70s and 80s, however, theBritish capital was challenged andout-shone by the emerging localChinese. At present, the mostimportant British corporations inHong Kong are Hong Kong andShanghai Banking Corporation,Hong Kong Telecom, JardineMatheson, Swire and China Light.
The Hong Kong and ShanghaiBanking Corporation hasovertaken Hong Kong Telecom asthe company with the highestmarket value in the stock marketsince its merger with the MidlandBank of the United Kingdom inmid-1992. Hong Kong Telecom is asubsidiary of the Cable andWireless, Plc. of Britain. Its valuesin the market has declined in faceof the ending of monopoly in thelocal market in 1995. China Light,Jardine and Swire were still on thetop ten or top fifteen list in thestock market in 1992.
4.2 Local-Chinese Capital
The influence of local-Chinesecapital was achieved in the 70sand 80s out of the boom of localproperty market. The mostinfluential ones in the 90s are LiKa-shing's Cheung Kong group,Sir Yue-kong Pao's Wharf group,Kwok's Sun Hung Kai Propertiesgroup and Lee's Hang LungProperties group. By the end ofJune 1992, Li Ka-shing's groupwhich included the Cheung Kong(Holdings) and HutchisonWhampoa Ltd. valued at HK$165
billion, accounting for 12% of thetotal market values of the stocksin Hong Kong, ranking at the topof the top ten families list.In thesame period, the Wharf groupranked fourth only after Li's,Keswick's and Swire's, accountingfor 5% of the total market saluesof all listed companies.9
43 PRC-Chinese Capital
China has invested heavily inHong Kong particularly since1978.10 The most importantcorn panics with PRC-Chinesecapital are the China Bankinggroup, China Resources and ChinaInternational Trust andInvestment Corporation (CITIC).The last one is a major investmentarm of China in Hong, Kong. It isthe company which bought 20%shares of the Hong Kong Telecomin 1989, becoming the secondlargest shareholder, only after theCable and Wireless which owned58.5% of Hong Kong Telecom.
It was estimated that by 1988, thetotal capital investment of PRC inHong Kong already reachedHK$60 billion." The heavyinvestment of China in Hong Kongcan also be seen in the value ofher most important listed companyin the Hong Kong Stock Exchange- CITIC Pacific. The total value ofthis corporation in the stockmarket was HK$17 billion,accounting for 1.2% of the totalsalues of the market in June 1992.In terms of ranking, it was on thetop fifteen list.' Many PRCcompanies in Hong Kong are notlisted in the stock exchangemarket. The actual amount of PRCcapital in Hong Kong is thusdifficult to estimate.
877
4.4. Other Capital
The other sources of capital inHong Kong include the American,Japanese, Taiwan, Southeast Asianand Australian. It was estimatedthat up to early 1990, the totalU.S. investment in Hong Kong wasabout HK$48 billion, the Japanesewas a little more than $48 billionand Taiwan was about $16 billion.In the years between 1986 and1988, the Southeast Asian capitalincreased to HK$22.14 billion andthat of Australian was $12.46
Among all these capital, only theBritish, local-Chinese, PRC-Chinese and the U.S. wereinterested in telecom business inthe 1980s and early 90s.
5. PARTIES INVOLVED INSECOND NETWORK
5.1 First Stage (1986-88)
Those who were initially interestedin a second telecommunicationnetwork in Hong Kong were a localcompany and a British company.The hiring of the Booz Allen andHamilton (BAH) to study thetelecommunication development inHong Kong in 1987 was startedwith the government's invitation ofexpression of interest in theprovision of a territory-wide cabletelevision service. The governmentreceived substantial submissionsfrom two companies: the CableTelevision Hong Kong Ltd (CTHK)and the Hutchison CableVisionLtd. (HCV). The former was asubsidiary of Hong Kong Telecom.It proposed the use of a cabletelevision network to beconstructed by the main existing
local telecommunications serviceprovider, the Hong KongTelephone Company (HKT). TheHCV, on the other hand, proposedthe construction of a cabletelevision network independent ofHKT's facilities. And this newnetwork could subsequently beused to provide telecom services incompetition to HKT. Theseproposals raised serious issues oftelecom policy. As the BAH Reportremarks,
"The HVC proposal wouldbring into being a second,competing,telecommunicationsnetwork,while the CTHK proposalwould result in acontinuation of the existingtelecommunicationsmonopoly.""
The issues involved in theconstruction of a second telecomnetwork prompted the governmentto initiate a study on the telecomdevelopment in Hong Kong by theBooz Allen & Hamiltonconsultancy company.
Apparently, the government bythat time had no policy on theopening up of localtelecommunication market for fullcompetition. This is evidenced bythe fact that the government didnot limit the ownership of the newcable company by the existingnetwork to 15% until 1988 whenthe BAH recommended to breakthe existing telecom monopoly. TheHong Kong Telecom had todisband its cable company(CTHK) after setting it up fornearly two years.
The Hutch Vision was the potentialwinner once the government madethe decision to have a secondnetwork for the transmission for
878
cable television and the CITIKwithdrew from the play. The HVChad a strong backing from theBritish Telecom plc (WI') in theU.K. which had 40% shares of theHCV.
The British Telecom is thedominant telecom service providerin the U.K. Since 1984 it has tocompete with a second networkoperated by the Mercury which isowned by the Cable & Wirelessplc. In other words, the Cable &Wireless is the second telecomnetwork operator in the U.K. whilemaintaining an unchallengedmonopoly in Hong Kong. Thecoincidence of BT's alignment withHutchison Whampoa Ltd. inchallenging Cable & Wireless'ssubsidiary - Hong Kong Telecom'smonopoly can be construed to be aspillover of deregulation from theU.K. to her colony - Hong Kong.Yet all these happened before theTiananmen Massacre in 1989.
5.2 Second Stage (1988-90)
Two months after the TiananmenMassacre, the Hutch Vision had tomake a decision whether or not tocommit more than HK$5 billion inconstructing an optical fibrenetwork which would make a profitonly after 1997. Hutchison'sconfidence in Hong Kong by thattime was apparently shaken andrefused to increase further capitalcommitment in the last minute.And the bid of the Cable Projectwas won by the Hong Kong CableCommunication (HKCC) whichhad the Wharf group as thelargest shareholder, with the U.S.IVest and other three local andforeign companies as minorpartners. The HKCC agreed to
nearly every term stipulated by theHong Kong government.
Hence at the second stage, theBritish players, the Cable &Wireless and the British Telecom,were all out. Now it was theAmerican and local-Chinesecapital involved in the constructionof the second telecom network.
But the HKCC in retrospect didnot seem to have preparedthemselves well and the projectwas delayed more than a year afterthe license was awarded in 1989.While little progress was made, theAsia Sat I was launched in mid-1990 and the Hutchison group,one-third of AsiaSat's shareholder,quickly applied for uplink anddownlink licenses for satellitetelevision.
This provoked strong oppositionfrom the HKCC which claimed tohave been promised by thegovernment of monopoly inproviding television services otherthan those provided by the twoexisting operators. Meanwhile, theshareholders of the HKCC shareddifferent views and had seriousconflicts among themselves.Finally, after the governmentannounced the deregulation ofsatellite television in Hong Kongwith restriction on subscriptionand use of Cantoneseprogramming, the HKCC quittedthe project in November 1990. Atthe end of this stage, the U.S.capital withdrew from the secondtelecom network.
Apart from internal strife and thepossible threat of competition fromsatellite television, the governmentindecision in allowing the secondnetwork to compete in local voiceservice after 1995 was also areason for the failure of the cableproject in 1990.
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At the second stage, we can seethat the Hutchison company thistime re-aligned with the HongKong Telecom in discouraging theset-up of a second telecom networkand cable television, consciously orunconsciously. The AsiaSat I wasowned one-third respectively byHutchison, Cable & Wireless andCITIC. It is an alignment ofBritish, local-Chinese and PRC-Chinese capital.
At the second stage, the attitude ofPRC-Chinese capital is ambiguous.1n 1990 the CITIC already becamethe second largest shareholder ofHong Kong Telecom which has themonopoly of local voicecommunication. Business-wise, theCIT1C should not be willing to seecompetition from the secondnetwork which will cut the profitsof Hong Kong Telecom. On theother hand, the Chineseauthorities have strong reason tobe concerned about the control ofthe only telecom network in HongKong by a British company - theCable & Wireless.
To "nationalize the existingnetwork by buying out all theshares from the Cable & Wirelesswould be a clumsy political movesince Cable & Wireless canprovide valuable technologicalexpertise and managementexperience to China on the onehand, the business confidence inHong Kong would be hit badly onthe other. Moreover, the HongKong Telecom has forged verygood links with China in telecomdevelopment over the years,especially in the GuangdongProvince. Strategically, the openingup of a second telecom networkunder PRC's control is an optionto reduce the dominance of Cable& Wireless in Hong Kong'stelecom activities.
During the second stage, however,the Chinese authorities did notseem to have a firm position onthe set-up of a second telecomnetwork or not. It was onlyreported that the CITIC had anagreement with the Hong KongGovernment in maintaining theHong Kong Telecom's monopolybefore 1997.'5 But neither partyhas ever confirmed openly thatthey had such an agreement.
53 Third Stage (1990-92)
After the HKCC disbanded in1990, the policy on cable televisionand the second telecom networkdragged on. To many people'ssurprise, the Wharf lined up withNynex and continued to pursue thecable television project. This timeWharf was the dominantshareholder of the new companyWharf Cable. During the periodbetween 1990 and 1992, thegovernment was hard pressed bythe Hutchison group to relax therestrictions on the satellitetelevision in Hong Kong. A tug ofwar was developed among theTelevision Broadcast Ltd. which isthe existing dominant wirelesstelevision, the Hutchison's STARTV and Wharf's new cable project.
Finally, in June 1992, thegovernment opted for the issue ofa subscription television licensewith exclusivity for the first threeyears. Preference was stated to becable technology. STAR TV wasallowed to charge subscription feesvia the new subscription TVlicensee and Cantoneseprogramming will be allowed afterthe exclusivity period of thesubscription television.'
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At about the same time when thedecision on subscription televisionwas made, the decision for settingup a second network wasannounced. This decision onopening up the local telecommarket for full competition after1995 obviously boosted theconfidence of the Wharf in usingoptical fibre for transmission ofcable television.
Since the government did not tiethe cable TV license together withthat of second telecom networkthis time, it would be pointless forthose who are interested only intelecom to bid for the cable TVlicense, although this may increasethe weight in bidding for thesecond telecom network. Not manypotential second telecom networkoperators were well prepared forcable television except theHutchison group which hadprevious experience. For unknownreason, however, the Hutchisongroup gave up the bid for the cabletelevision in the last minute. Andthere was finally only one bidderfor the cable TV license - theWharf Cable.
At the time of writing, the deadline(February 1, 1993) for the bid ofthe second telecom network hasnot come yet, the number ofbidders is still unknown. From thepress, we know that the followingparties are interested: Wharf,Hutchison, Taiwan Pacific Cable,CITIC Pacific, British Telecom,Nynex, Rogers Cantel, OTC andAlcatel." The AT&T wasoriginally reported as interestedbut denied such a report in lateOctober 1992.'s It is often thecase no one really knows who willbe the bidders until the lastminute.
;
The announcement of the bid for asecond telecom network could betaken as a "go-ahead" sign givennot only by the Hong Konggovernment, but also by the PRC.At the end of 1990 when a rowdeveloped between China andBritain over the expenditure onthe plan for a new port andairport, the Chinese governmentmade it clearly that all Hong Kongaffairs and infrastructural projectscrossing 1997 must consult China.In fact many people attributed thedelayed decision on the secondtelecom network to the need ofobtaining the blessing of China.After the announcement of thedecision on the second telecomnetwork, no objection was heardfrom China. Obviously, thedecision for the cable televisionproject and second telecomnetwork already got the"understanding" of China.
Whether or not the latest rowdeveloped between China and theUnited Kingdom over thedemocratization of Hong Kong willchange the attitude of China onthe second telecom network is
unknown. Up to the end of 1992,China had not made the secondnetwork an issue though it pickedup the contract of a new containerport as the bullet firing at theUnited Kingdom.
6. THE ALIGNMENT OFINTERESTS
It is still unknown who will bid forthe second telecom network, fromthe eviting alignment of differentinterests in other telecom servicesin Hong Kong, however, we willstill be able to get sonic ideasabout the politico-economicgroupings in telecom in future.
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The alignment of interests can beseen most obviously in the mobiletelephone services.
In the bid for digital mobiletelephone services in mid-1992,four local winners were Wharf,Sun Hung Kai, CITIC Pacific andChevalier. All of them lined upwith foreign telecom operators.The Wharf lined up with theNynex (U.S.); Sun Hung Kai withMacCaw (U.S.) and Tong Qiang(subsidiary of China Ministry ofPost and Telecom in Hong Kong);CITIC Pacific with NIT (Japan)and Chevalier with OTC(Australia).
Hutchison is the most active localcompany in telecommunication. Ithas developed into a multinationalcorporation since the 1980s. Intelecommunication, it has interestsin the U.K, Australia, Korea,China in addition to Hong Kong.In Hong Kong, it lined up withMotorola in providing mobiletelephone services, and with AT&Tin VANS (Value-Added NetworkServices). In Canton, Hutchisonworked with a local company tooperate paging. Li Ka-shinghimself is on good terms with thesenior Chinese leadership.
The Wharf, a main localcompetitor of Hutchison in telecomas well as in other businesses, isnot slow in building up its Chinaconnection. Although thealignment with PRC capital intelecom is not obvious yet, it hasactively sought links with PRCcapital. The most ambitiousproject is the containerization ofCentral Chinas' port of Wuhan,which will provide dynamic growthfor the trade within and withoutChina.
It should be noted that Hong KongTelecom has intensified its
0:2;
cooperation with China in recentyears. In 1990 it agreed to trainthe telecommunication workers inChina for a period of three years.In November 1992, it set up itsfirst office in Beijing. Up to 1990,the Hong Kong Telecom hadtransferred over 520,000 exchangelines to China' and a secondfibre optic cable between HongKong and Shenzhen wasconstructed and put into use inearly 1991.
7. IMPLICATIONS
In these 6 years of deregulation oftelecom services and setting up asecond network, we can see thatthe initial move was made by thelocal-Chinese capital together withthe British under the trend ofderegulation in the U.K. and theworld. At the outset, the HongKong government took control ofthe development. But thedevelopment of events quicklyturned the control away from theHong Kong government.
The Hong Kong government lost achance in keeping the initiatives in1989-90. When it awarded thelicense for the second telecomnetwork, it limited its service onlyto the non-franchised telecomservices and refused to make anycommitment as regards the endingof Hong Kong Telecom's monopolyin telephone and internationaldata services. This indecisionmade the investment in the secondtelecom network highly risky,contributing partly to thewithdrawal of Hutchison group inthe first place and the demise ofHKCC in the second. Once thetime was lost, it was lost forever.
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Since 1990, China has started totighten its grips on Hong Kong,probably due to her unpleasantexperience with Hong Kong in thedemocratic movement of 1989.After 1990 when the communistsstood on their feet again after thecrackdown of the students, Chinastarted to intervene all-out intoHong Kong's affairs. There wasprobably a shift of her Hong Kongpolicy after 1989.
The political situation in Chinaand I-long Kong overtook theworldwide deregulatory trend inshaping the development oftelecom in Hong Kong. WithoutTiananmen Massacre in 1989, thedevelopment of events in telecomwould definitely be different andless political. Hutchison group andthe British Telecom wouldprobably have got the license ofcable TV and run the secondtelecom network. If Hutchisongroup and the BT had started thesecond telecom network before1990, the PRC would not have hadso great an influence on thesecond telecom network.
It was only after 1990 when Chinabecame sensitive to allinfrastructural projects crossing1997 as a result of Hong Konggovernment's design to spend allits reserves on a new port andairport. With a shift of policy onHong Kong from one of "non-intervention" to "meddling in everypossible way", the China factor hasbecome most crucial in the build-up of the second network. Nocompany can operate telecomnetwork without the blessing of theChinese authorities. In the comingfew years, the links with China willbe most crucial intelecommunication sector, be itstrategic or genuine link.
The corporation which is likely toget the license of the secondtelecom network will be one whichensures the secure control of PRCover its operation. Once thishappens, the existing telecomnetwork, Hong Kong Telecom, willbe placed at a relativelydisadvantaged position in the longrun. In the PRC's eyes, the valuesfor the existence of Hong KongTelecom's network in Hong Kongwill lie mainly in its expertise andmanagement.
To say this, it does not mean thatforeign interests will be excludedfrom the second telecom network.If the foreign interests are onlyminority shareholders and able tocontribute greatly to Hong Kong'sand China's technologicaladvancement, they would still bechosen. Among these foreigninterests, the American areprobably the most welcomepartners since they could providenot only technological expertise forChina, but good links with U.S.political interests. Strategic-wise,China's relationship with the U.S.is valued more than any othercountries.
Whether or not Hong KongTelecom's network can continue tooperate profitably depends on themaintenance of competition in abusiness-like manner in HongKong. No one knows whether thenew network under the PRC'scontrol will operate in a business-like manner. Great uncertaintyensues in telecommunication in theforthcoming years. Probably, theCable & Wireless and Hong KongTelecom will put their eyes on theChina market more than the HongKong in the years to come.
In the period of sovereigntychange, all telecommunicationplayers have to adapt to the rulesset down by the new master.Economic decision has to bejuxtaposed with politics. The finaloutcome of this decision will not bethe most rational one. The policyconsideration intelecommunication is never purelyeconomic. In a transitional periodof political power, this is evenmore so; the politicalconsiderations would overrideeconomics. It is most interestingthat we will see what will reallyhappen very soon.
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Reference
1. Hong Kong Government.Hong Kong 1992: AReview of 1991. HongKong: Government Printer,1992, p. 293.
2. Ming Pao. November 11,1992.
3. Hong Kong Telecom. HongKong Telecom AnnualReport 1992. Hong Kong:Hong Kong Telecom,1992, p. 52.
4. Hong Kong EconomicJournal. July 4, 1992.
5. Hong Kong Telecom. Op.Cit. p. 18.
6. Booz Allen & Hamilton.TelecommunicationsDevelopment in HongKong. London: BAH, 1988(A consultancy reportcommissioned by the PostOffice of Hong KongGovernment).
7. Hong Kong EconomicJournal. July 1, 1992, p.16.
8. Hong Kong EconomicJournal Monthly. 185(August 1992), 128.
9. Hong Kong EconomicJournal. July 1. 1992, p.16.
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10. Hong Kong Government.Hong Kong 1992: AReview of 1991. HongKong: Government Printer,1992, p. 54.
11. Wah Kiu Yat Po. Banking,Finance & InvestmentReview - 1988. (A specialsupplement of Wah KiuYat Po on October 5,1992), p. 22.
12. Hong Kong EconomicJournal Monthly. 185(August 1992), 129; HongKong Economic Journal.July 1, 1992, p. 17.
13. Yang Chi. Ed. Introductionto Hong Kong. (InChinese). Hong Kong:Joint Publishing, 1990, pp.121-35.
14. Booz Allen & Hamilton.Op. Cit. p. i.
15. Chan Kai-cheung & ChanWing-hung. "The causesand consequences of thefailure of cable television".Hong Kong EconomicJournal Monthly. 165(December 1990), p. 42.
16. For details of theregulations, refer to PaulS. N. Lee. "Media andCommunication" in JosephY. S. Cheng and Paul C.K. Kwong. Eds. The OtherHong Kong Report 1992.Hong Kong: ChineseUniversity Press, 1992, pp.383-403.
17. Hong Kong EconomicJournal. June 13, 1992.
18. Ming Pao. October 31,1992.
19. Hong Kong Telecom. HongKong Telecom AnnualReport 1991. Hong Kong:Hong Kong Telecom,1991, p. 10.
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NEW "HAVE NOTS" AND THE OLD PROBLEMS?How the East European Countries
and the Republics of the Former Soviet UnionIntegrate into the World Communication Order
Prof. Dr. Wolfgang KleinwachterNetcom Institute Media City Leipzig e.V.
IAMCR Law Section President, Leipzig/Germany
ABSTRACT
The fundamental changes which have taken place in the last fewyears in Eastern and Central Europe as well as in the republics ofthe former Soviet Union have wide ranging consequences not only forthe media, and in particular for the broadcasting system withinthese countries, but also for the world communication system andthe global media marketplace in general.
On the one hand, domestically, a new broadcasting system and newbroadcasting structures are developing. In the old orderbroadcasting was more or less centralized, state owned and understrict control of the communist party. Now, the new system becomesdecentralized, independent from the state and commercialized.
On the other hand, internationally, the world communication marketgets new producers and new consumers, new providers and new users.In the old world communication order there was strict barrierbetween the former East bloc and the rest of the world as far asthe flow of information and the production, distribution andconsumption of radio and television was concerned. Now the worldbroadcasting market becomes really global. The East, representingan area of about 150 million television and radio households, isintegrating, step by step, into the global communication system.New national broadcasters are looking for international jointventures.
A new regional fragmentation which goes beyond the old politicaland ideological frontiers is developing along geographical,economic, cultural and linguistic lines in Europe, Central Asia andthe Pacific Rim. Not a special ideology but the footprint of abroadcasting satellite constitutes new coalitions. At the sametime the global flow of information will become even moreunbalanced. The majority of the new countries are new "Have-Nots"and will remain "information-poor" states. Although all the formerEast bloc countries have a developed national broadcasting systemand the majority of the individual households are well equippedwith radio and television sets, the capacities for the productionof national television programs will remain limited and themajority of the new countries will become, sooner or later,dependent on the big transnational broadcasting corporations in theWest.
Domestic developments
After the velvet revolutions and theradical reforms of the late 80s and theearly 90s, all the new democracies arenow recognizing the fundamental humanright to freedom of expression as it islaid down in Article 19 of the UnitedNations Human Rights Declaration of 1948.Relevant paragraphs were incorporatedinto the new constitutions andgovernmental censorship over the mediawas declared as illegal. The FinalDocument of the CSCE Conference on theHuman Dimension, which took place in
Copenhagen in June 1990, confirmed thisnew consensus. The CSCE Helsinki Summitin summer 1992, showed that mediaquestions, for more than half a century abattlefield between the East and the
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West, are no longer a controversialissue.
Theoretically and practically, theway is free for the development of a
democratic broadcasting system. Thecollapse of the old system has openedindeed the door for the establishment ofa "free marketplace of ideas" from Sofiato Riga as well as from Budapest toMoscow. The ideas of John Milton'sclassical "Aeropagitica" have "conquered"the East. But the process of change isdifficult and things are lookingdifferent if reality takes you for themountains of perspectives to the valleysof problems. The wind of change didn'tchange everything. There are stillbarriers, new and old ones.
r,
New and Old Barriers
There is lack of historical legaltradition concerning free and independentmedia in a democratic society. The realmeaning of the idea of a "publicbroadcasting service" is widely unknownand partly misunderstood. The existingbroadcasting corporations (still mainlystate owned) are lacking financial andtechnical resources, they are overstaffed(very often with the old personnel) anduse outdated broadcasting technology.There are new efforts of the newgovernments to get back or to maintaincontrol in particular over television. k
new kind of independent and investigativejournalism has to be developed in a timewhich is overshadowed by social andeconomic problems, also for the workingjournalists. There are no experienceswith advertising and domestic as well asforeign private broadcasting. Frequencyallocation procedures are not yetestablished. Rules for cable andsatellite radio and television are veryoften not existing and internationalcopyright regulation is often ignored.
The situation is different fromcountry to country, but although all thenew states are now looking for specialnational arrangements, the problems theyare dealing with, are more or less thesame. The most urgent things are thefollowing ten tasks:
the elaboration of a new media policyand a regulatory framework forbroadcasting
the reorganization of the old centraland state owned broadcasting system
the creation of national broadcastingauthorities and broadcasting councils
the establishment of a financial basisfor public broadcasting
the allocation of frequencies to andlicensing of private broadcasters
the regulation of cable and satellitetelevisions
the adoption of rules for advertisingthe introduction of copyright
legislationthe modernization of broadcasting
equipmentthe development and improvement of the
telecommunication infrastructure
The individual regulatory activitieson the national basis have to be seen ina wider international context. In the"information age" radio and television donot know any national frontiers.Globalization is a main tendency ininternational communication. But at thesame time, and this is the other side ofthe coin, there is also a tendencytowards localization and regionalizationin broadcasting. The "global village" ofthe 21st century calls for a certain kindof international harmonization ofbroadcasting systems and structures, butthis transnational harmonization has to
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take into consideration both the nationaleconomic needs and cultural identities aswell as the international trends anddevelopments.
New National Broadcasting Legislation
One fundamental precondition for anintegration of the new nationalbroadcasting systems into the worldcommunication order is a nationalbroadcasting legislation which is
compatible with the internationalregulatory framework. In all the newdemocracies, regardless of their specificnational conditions, new broadcastinglaws are under discussion or alreadyadopted by the national parliaments.International regulation like ITU Radioregulations or the European conventionson human rights (1950) and ontransfrontier television (1989) are takenas general guidelines. There is a
declared political will to follow"western experiences". But if it comesto the concrete details, different kindsof problems .arise.
The broad variety of differentmodels in the West creates a lot ofproblems for the East. Whom to follow?Some of the new democracies, inparticular the Central Europeancountries, try to introduce the "WestEuropean dual system", that means tochange the state-owned broadcastingsystem into a public broadcasting systemand to open the frequency spectrum forprivate broadcasters. Others, likeBulgaria or some of the republics of theformer Soviet Union, prefer the "Americanmodel", that means to introduce a
constitutional guarantee for freedom ofthe media (like the first amendment), toestablish a more technically orientedregulatory authority (like the FCC) andto privatize the broadcasting market.
Regardless of the discussion of thedifferent models, the development ismainly overshadowed by new internalconflicts within the countries, inparticular between the new governmentsand the media. This conflict is deeprooted in the concrete historicalexperiences. The last forty (or seventy)years have produced a special politicalculture and a structural behavior whichdoes not disappe'r after thedisappearance of the old powerstructures.
In the old Stalinist system, themedia were seen as "instruments" of theparty/the government which have to give"guidance" to the people. Oppositevoices did not have access tobroadcasting. Now, after therevolutions, the new governments, theformer opposition, has for the first timeaccess to radio and television. Being inpower, the new rulers realize veryquickly that it is not so bad for anadministration, in particular in an
CA
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un-'able situation of a transitionperiod, to have control over television.The new governments rediscover thebenefits of using television "to explain"their own policy to "the masses" and tocreate a public opinion which is
favorable for a reelection. And theyfeel themselves very justified to dothat. They argue, that after freeelections they are now democraticallylegitimized to "use" the media for theirown political purposes. In the past,television was "theirs", now it is"ours".
This misunderstanding of the role ofthe media in a democratic society has itshistorical explanations. In all theEastern countries there were noexperiences with a broadcasting system,independent from the government, serving(more or less) the interest of thepublic, criticizing the government,functioning as a "watchdog" and a "forthpower" in a democratic society andfollowing the rules of the market.
That the "peoples right to know"determines the use of the media freedomsis a new experience which has still to bemade. This "missing experience"influences the process of change and canconstitute another new barrier for thecontinuation of the reform of thebroadcasting system. While changes ofprograms and persons took place veryrapidly immediately after therevolutions, changes of structures andmechanisms did not follow soon.
To refer to a drastic example: Afterthe changes in Latvia, new seniorofficials for the national broadcastingcorporation were nominated and instead ofRussian films, American films and serieswere shown on the evening program. Butat the same time the new director generalof LTV got the order from the newgovernment in Riga to reserve two of thefour available Betacam cameras. One tocover the daily activities of the primeminister and the ,Ither one to cover thedaily activities of the president of theparliament.
Government versus opposition
The question how far governmentalinfluence (or control) should go in thenew broadcasting system is in the centerof the discussion around the broadcastinglaws.
Key controversial issues are thefollowing three questions:
the composition of broadcastingauthorities/councils
the nomination procedure for thedirector general for radio andbroadcasting
the procedures for the allocation offrequencies to private broadcasters.
In all the three areas, generallyspeaking, the same basic conflict betweenthe government and the opposition can beobserved.
Firstly, the governments prefer abroadcasting council, nominated mainly bythe executive to guarantee that thegovernment has a majority in it, whilethe opposition wants to have and"Independent Broadcasting Authority",elected by a two third majority by theparliament to guarantee independence fromthe government.
Secondly, the prime minister wantsto reserve the right to nominate theDirector General for radio and televisionwhile the opposition wants to establish aprocedure where the parliament on thebasis of a two third majority or anindependent broadcasting authority hasthe right to elect the seniorbroadcasting officials.
And thirdly, the governments want tomaintain control over the frequencyspectrum as much as possible while theopposition favors the establishment ofanother independent institution forfrequency management and allocation.
Like many other governments both inthe West and South, also the newgovernments in the former East bloc arebasically not interested that theirpolicy is criticized publicly by anindependent broadcasting watchdog.Insofar they do not have to hurry tointroduce a new broadcasting legislationwhich would undermine the governmentalinfluence in radio, and in particular,television. This explains to a highdegree why even in Hungary and Poland,where a certain democratic traditionstill exists, the adoption of a newbroadcasting legislation was postponedagain and again since the changes startedin 1989.
Private Broadcasters Have to Wait inEastern and Central Europe
The delay in the adoption ofbroadcasting legislation slows down theprocess of demonopolization of thenational broadcasting system and preventsin particular, private broadcasters toenter the market. In all the newdemocracies there is still a statemonopoly in the field of broadcastingwhile a hundred of private initiatives,mainly in radio, are waiting for theallocation of a terrestrial frequency.In nearly all Eastern countries, socalled "frequency moratoriums" haveblocked a breakthrough so far.
In Poland, a frequency moratoriumwas in force since 1990. Several effortsto adopt a broadcasting law under thegovernments of Mazowiecki, Bielecki,Olszewski and Pawlak failed. Under thegovernment of prime minister BarbaraSuchocka, the "Polish Iron Lady", thebroadcasting law was adopted by the Sejmthe 15th of October 1992. The Senatepassed the broadcasting law in lateNovember 1992, but asked for the adoptionof nearly forty amendments. SenateAmendments can be rejected by the Sejmwith a two-thirds majority. After the
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final adoption by the Sejm and thesigning by President Walesa, the billwill enter into force, probably inJanuary 1993. The "Polish Law on Radioand Television" establishes a "NationalBroadcasting Council" as the highestbroadcasting authority in the country.The Council will be responsible both forpublic and private broadcasting. TheCouncil will have nine members, threenominated by the president, two by theSenate and four by the Sejm. TheChairman of the Council will be nominatedby the president of the republic.
In Hungary the broadcasting bill hasbeen under discussion already since late1989. According to the constitution thebroadcasting bill needs a two-thirdsmajority in the parliament. This hasblocked so far its adoption becausegovernment and opposition were not ableto bridge their conflicts concerning thecomposition of the broadcastingauthority, the nomination of the seniorofficials of the new Hungarian publicradio and television companies and theprocedure for frequency allocation by acompromise. The ruling parties want toreserve a possibility for the governmentto maintain a certain kind of finalcontrol over radio and television, theopposition wants to give more influenceto the parliament where they have a rightto participate in decision-making on thebasis of a two-thirds majority clause.
The split of Czechoslovakia haschanged fundamentally the broadcastingsituation in this country. Federalbroadcasting comes to an end. A "FederalBroadcasting Law", adopted. in October1991, which created a legal possibilityfor the allocation of terrestrialfrequencies also to private broadcasters,does no longer constitute a legal basis.Both the Czech and the Slovak republicwill redraft their own broadcastinglegislation, will reestablish their ownnational broadcasting authorities andeach will have their own national publicchannel. There will not be an"information union" between the twocountries as proposed by the Slovak primeminister Meciar. The Czech primeminister Vaclav Klaus prefers instead ofthis "union" a general "privatization" ofthe broadcasting landscape.
In Romania, where television playeda central role in the revolution of 1989,a broadcasting law was adopted in March1992. The "National Audio VisualCouncil", which was establish by law, haseleven members. Two are nominated by thepresident of the republic, three by thegovernment and six by the two chambers ofthe parliament. Private broadcasting ispossible. Besides a number of privatenational radio and televisionbroadcasters, an international jointventure "Atlantic Television" has alreadyovertaken the second national TV channel.But the law was criticized strongly bynational broadcasters. The law includes
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some unclear formulations like theprohibition of defamation of the nationand its representatives, which can bemisused again for governmentalcensorship.
In Bulgaria, foreign radio programslike BBC, Voice of America and DeutscheWelle as well as domestic private radiobroadcasters got licenses withoutbroadcasting legislation on the basis ofdecisions by the government or by themedia commission of the parliament, a
body which seems to be the highestbroadcasting authority in the country forthe time being.
Unclear Perspectives in the Republics ofthe Former Soviet Union
In the republics of the formerSoviet Union, the most interestingdevelopment can be seen in the RussianFederation.
After the coup in August 1991,president Yeltsin, under the pressure ofsome private broadcasters like "EchoMoscow", the only voice in the air whenthe tanks were on the red square, openedthe door for private broadcasting by aspecial "Ukas". The Ukas No. 500,adopted in September 23, 1992,established an "Interim BroadcastingCommission" which got the right toallocate frequencies on the basis of acompetition to private broadcasters.
The "Russian Law on the Mass Media"from December 1991, stated that aseparate "Law on Radio and Television ofthe Russian Federation" should beelaborated. Several drafts of the newbroadcasting bill has been discussed bythe parliament since January 1992, butthe law is still waiting for adoption.The key part of the law is theestablishment of a "Russian BroadcastingCommission" which looks very similar tothe American FCC. According to the draftof the law from October 1992, the"Russian Broadcasting Commission" will bethe highest broadcasting authority in thecountry, responsible not only for theallocation of frequencies but also forgeneral broadcasting policy, includingradio and television programs. TheCommission will have eight members, fournoninated by the president of the RussianFederation and four by the two chambersof the Supreme Soviet.
For the moment it is difficult tosay, when the new law will be adopted andwhich effects the law will have inpractice. The whole development can bestopped and channeled in anotherdirection by unforeseen events within theRussian Federation. In early December,President Yeltsin recalled the Ministerof Information, Mr. Poltoranin, and theDirector General of the first TV channel,Mr. Yakolev. How the media policy willbe determined after the Russian congressis at the moment, (6th of December) whenthis paper was written, an open question.
New broadcasting laws are also underdiscussion in the other republics of theformer Soviet Union. In the Balticcountries, Latvia has already adopted abroadcasting law in May 1992. Theadoption of the Estonian broadcasting lawis expected for spring 1993. Thesituation in Lithuania is unclear afterthe last elections.
In the Ukraine, in Belarus andMoldova, the old soviet media law fromAugust 1990, is still in force, but firstdrafts of a national broadcastinglegislation are circulating in the mediacommissions of the national parliaments.The situation is similar in the threeCaucasian republics (Georgia, Armenia andAzerbaijan) and the five Asian republics(Uzbekistan, Kirgizia, Tadzhikistan,Turkmenistan and Kazhakstan).
Ostankino - A Russian Company or anInternational Channel?
Regardless of the political strugglearound the broadcasting laws, thebroadcasting landscape is dramaticallychanging also without any legislation inthe former Soviet Union. Two maindevelopments determine the generalpicture.
Firstly, the search for a new statusof the former first soviet televisionchannel, today's "Ostankino TV", theworlds biggest television company withmore than 25,000 employees and secondly,the development of national broadcastingsystems in the republics of the formerSoviet Union.
After the disappearance of theSoviet Union in late 1991, PresidentYeltsin transformed the former "SovietGosteradio" into a Russian company"Ostankino" which got the mandate todistribute a Russian language program toall the former members of the SovietUnion.
At the first meeting of thepresidents of the members of the"Commonwealth of Independent States"(CIS) it was agreed to internationalizethe status of "Ostankino". Two optionswere discussed: first, the conclusion ofan international agreement and theestablishment of an "Euro-AsianBroadcasting Company" and secondly, thetransformation of Ostankino into a semi-private corporation where member-statesof the CIS could become shareholders.
One year of controversialnegotiations between the CIS members didnot produce a final agreement. The non-members of the CIS - Estonia, Latvia,Lithuania, Georgia and Azerbaijan -indicated that they were not interestedto become neither a member of an "Euro-Asian Broadcasting Union" nor ashareholder in an "Ostankino LTD". Otherrepublics, like the Ukraine, articulatedstrong political reservations againstOstankino. The president of the Ukraineblamed Ostankino as a "Russian Voice"
which "interferes into internal affairsof the Ukraine". Other republics likeKirgizia or Turmenistan, are ready toparticipate into a joint international"Ostankino" venture, but declared thatthey do not have the financial means tocontribute to the budget.
In the meeting of the CIS presidentsin October 1992, the Heads of States ofeight republics decided to elaborate atreaty for a transformation of Ostankinointo a private company in which"interested states" can buy a share. TheUkraine and Tadzhikistan, both CISmembers, declared that they are notinterested in participating in such anagreement. It is planned to sign thetreaty at the meeting of the CISpresidents in late December 1992 inMinsk. Whether the Russian Federationand maybe Belarus will finally the onlyshareholders, has to be seen.
New National Broadcasting Companies
The discussion on the future of"Ostankino" is paralleled by thedevelopment of new national broadcastingsystems in all the republics of theformer Soviet Union, including theRussian Federation.
Already in the past every republicof the former Soviet Union had its ownnational broadcasting company. This"national company" was theoretically"independent" from Moscow and played therole of a "regional program" under thecontrol of the local party committees.Although the studios and transmitterswere not badly equipped, the quality ofthe service was on a low level. The mostcreative journalists and programsproducers left the country and tried tojoin "Gosteleradio" in the past. thisexplains also, why "Ostankino" has, evenafter the disappearance of the SovietUnion, a privileged role. The programsproduced by Ostankino are, regardless ofits political orientation, moreprofessional and represent a higherquality in both technical and programcontent standards.
The strongest competitor for"Ostankino" can be found now in theRussian Federation itself. A new company
the "Russian Radio and TelevisionCompany" (RTR) - has been establishedalready in late 1990. RTR, the formersecond soviet channel, was seen underGorbachev as Yeltsin's voice. RTR becamesoon a success story and expanded itsprogram from six hours to 16 hours dailyand has now a share of about 35 to 40percent of the daily viewers. RTR seesitself, meanwhile, as the real firstRussian television channel. RTR, whichhas to share at the moment the so-callededucational channel (the third channel)with Ostankino, plans to overtake thewhole third channel as its ownresponsibility and to produce its ownsecond program.
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With "Moscow TV" and "St. PetersburgTV" the Russian Federation has two othertelevision programs. The Russiantelevision market has become colorful.Each of the four companies - Ostankino,RTR, Moscow TV and St. Petersburg TV -declare that they are "independent"today. But the independence remainslimited for the time being because allthe four companies are paid by the state.There is no license fee system in theRussian Federation and the income fromadvertising is on a very low 2evel.
Non-state television is only in itsfirst stage of development. The mostinteresting project is an initiative,started by Eduard Sagalazhev, a DeputyDirector General of Ostankino, already in1991 and called "Independent RussianTelevision" (IRTV). IRTV wants to becomea totally privately financed televisioncompany. The shareholders of this newcompany are private banks and someRussian individuals. In summer 1992,IRTV has concluded a cooperationagreement with Ted Turner and it isfighting now for the allocation of a freefrequency, the sixth television channelin Moscow, which is not yet in use.
The "Interim BroadcastingCommission" has opened a competition forthe sixth channel in summer 1992 on thebasis of "Ukas No. 500". Sagalazhev andTurner are obviously the favorites amongthe six candidates. An allocation of thesixth channel to IRTV would beundoubtfully a turning point in theRussian broadcasting policy. But thequestion is still undecided. The presentparliament denies the right of the"Interim Commission" to allocate thefrequency. It argues that only the new"Russian Broadcasting Commission" willhave the right for such a strategicdecision.
Besides Russia, the most interestingbroadcasting market is the Ukraine withmore than 20 million radio and televisionhouseholds. In the Ukraine, the oldstate monopoly is still alive. The stateowned "Ukrainian Radio and Televisioncompany" (URTC) has occupied the majorityof the frequencies. A first commercialtelevision channel has started in themiddle of 1992 but even in this "privatecompany" the URTC has more than fiftypercent of the share. An "UkrainianUnion of Independent Television" has beenestablished in late 1991. The Unioncalls for a "demonopolization", but thereis no hurry in the Ukrainian parliamentto elaborate a new broadcasting bill.
Also, in the other republics,broadcasting is still mainly state-ownedand monopolized by the government.Private broadcasters have difficulties inmobilizing the financial and materialmeans for the production of radio andtelevision programs as well as to get theneeded frequencies for the distributionof their programs.
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Regardless of the more restrictivetendencies in frequency allocation forprivate broadcasters, privatization is
developing. The most promising field isat the moment cable television. Localand regional networks are managed byprivate entrepreneurs who distributelocal and regional news as well asinternational films, very often withoutany permission and by violatinginternational copyright regulation, butwith high viewing rates.
The new CTV companies are very oftenlinked with broadcasting equipmentmanufacturers who are looking forprivatization of their factories. Someof these companies even try to get theirown private satellites. where the moneyof these "new companies" is coming fromremains often unclear, but there is a
tendency, that a new kind of"transnational" broadcasting business isdeveloping by establishing new networksof private radio and television companiesin the different republics of the formerSoviet Union. There is certainly a longway to go to have an alternative private"Ostankino", but, under conditions of asuccessful economic reform, this couldindeed be more than an only theoreticaloption.
How far the new state-owned orprivate companies, which succeed theformer unique soviet broadcasting system,will look for international cooperationstill remains unclear. On the one hand,there is a growing tendency for
isolation. Language and culturalbarriers promote such a disintegration-development. On the other hand, theformer Soviet Union is a big market andthe new national companies need financialand material cooperation with foreignbroadcasting corporations. It is
obviously too early to make any forecastshow new joint ventures will influence theinternational broadcasting market. Butin the long run, the disappearance of theSoviet Union will certainly provoke arearrangement of the global broadcastingmarket, at least in three regions:Europe, Central Asia and the Pacific Rim.
International Consequences: NewTransnational Actors?
In Europe all the former OIRTmembers are joining the "EuropeanBroadcasting Union" January 1, 1993. TheEBU will become the most powerfulinternational broadcasting organizationin the world. The broadcastingcompanies, united in the EBU, reach apopulation of more than 350 millionpeople. One satellite like "Astra" cancover the whole region not only from theNorth Gap to Gibraltar, but also from theAtlantic to the Urals. The "closed East"is now more or less open and ready for anexpansion of private broadcastingcompanies. Berlusconi, Murdoch and other
transnational corporations are alreadyknocking at Eastern broadcasting doors.
But on the other hand, the newmembers constitute also a new burden forthe EBU. Broadcasting companies fromLatvia, the Slovak Republic or Belaruseven have difficulties to pay theirmembership fees. In some of the new lawsthere are restrictive rules concerningforeign participation in nationalbroadcasting. Quota systems, both forprogram and capital, are incorporatedinto the new broadcasting bills. And itis still open, how far the growingnationalism in Europe will have alsoconsequences for the broadcastinglandscape and the development oftransnational joint ventures in privateradio and television.
In Central Asia, new coalitions arein the process of birth. The five Asianrepublics Uzbekistan, Kirgizia,Ka s a chs ta n , Tadzhikistan andTurkmenistan, still members of the CIS,and the Caucasian republic ofAzerbijdshan, are strengthening theircooperation with Turkey, Iran, andAfghanistan. The six republics joinedthe Islamic "Organization of EconomicCooperation" (OEC) in late November 1992.The Turkish television satellite"Turksat" distributes already itsprograms to the Asian republics of theformer Soviet Union. The new nationalbroadcasting corporations in thesecountries, while still cooperating with"Ostankino" in Moscow, are looking forcloser links with broadcasting companiesin Teheran and Istanbul. A newbroadcasting area with a population ofabout 200 million people is in the stageof emergence in Central Asia. Could thislead to the development of newtransnational actors in this area?
At least, there will also beconsequences for the Pacific Rim. At themoment, there are still unsolvedpolitical problems between Russia andSouth Korea and Japan. But in thefuture, both South Korean and Japan willsee Russia (if the political problemshave been settled and the Russian reformswill have led to a successful economicdevelopment) as an attractive potentialmarket for broadcasting equipment andtelevision programs. New transnationalbroadcasting actors also in the PacificRim?
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(-;L' . I
Creating Tomorrow's Telecommunications Infrastructures:Cultural Needs and Economic Realities
Joe Arden FlickingerRadford UniversityRadford, VA 24142
1. ABSTRACT
Historically, telecommunications policy-making emphasizes subsidies, extensivecollaboration, and temporary protection. This approach impedes the implemen-tation of new technologies and fails to address pressing social needs,especially in developing countries. Focusing on new digital technologiesand their diverse delivery systems, this political-economic study examinesthe tensions which exist in today's regulatory environment where newtechnologies and standards are used as competitive tools. Suggestions forachieving long-term cultural goals by separating infrastructure requirements
from competitive objectives are presented.
2. INTRODUCTION
Many nations are experiencing unsettling politi-cal and economic changes as they move fromindustrial-based to information-based societies.Successful businesses in nations with advancedeconomies are now based on specially tailoredproducts and services. The new barrier toentry is not volume or price, it is skill infinding the right fit between particular tech-nologies and particular markets. According toHarvard political economist Robert Reich:"Core corporations no longer focus on productsas such; their business strategies increasinglycenter upon specialized knowledge: (1).
Reich identifies three groups of workers who areresponsible for providing most of the value tocore corporations:(1) problem solvers,(2) problem identifiers, and(3) strategic brokers. In order to take advan-tage of new discoveries and new opportunities,these three groups must be in continuous contactwith one another:
Speed and agility are so important to thehigh value enterprise that it cannot beweighed down with large overhead costs likeoffice buildings, plant, equipment and pay-roll. It must be able to switch directionquickly, pursue options when they arise,discover new linkages between problems andsolutions wherever they may be (2).
Although corporations have always searched forfaster and more efficient means of transportationand communication, their need for instantaneous,worldwide information to support their new globalcompetitive strategies is responsible forelevating telecommunications technologies andinformation processing to their new roles asdistinct and critical commodities (3). Whilethese economic needs arc driving the develop-ment and deployment of new communicationssystems, cultural differences and politicalniessures are subtly modifying individual partsof these tystems, affecting their ability tocreate a truly global communications network.
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But these modifications, in turn, transform thevery culture that brought about the changes inthe first place (4). Because of this interde-pendence between culture and technology,choosing a particular technical standard orcreating a seamless telecommunications infra-structure is, in effect, a political and economictime bomb, which seems destined to exploderegardless of the direction a nation's telecom-munications program and policies may take.
On the one hand, a government must ask itself ifthe ability to communicate freely with othernations outweighs the advantages gained byadopting incompatible systems. The incompatiblesystems approach not only helps preserve anation's culture, but also gives it an economicadvantage by effectively keeping incompatibleforeign systems out of the domestic market (5).On the other hand, nations can no longer sub-stantially enhance the wealth of their citizens
...by subsidizing, protecting, or otherwiseincreasing their profitability of "their"corporations; the connection betweencorporate profitability and the standardof living of a nation's people is growingever more attenuated (6).
For example, in 1990 more than half of theexports and imports in the U.S. (by value)were transfers of problem - solving (research anddesign), problem- identifying (marketing andadvertising), and brokerage (7). Therefore,rather than asking "which nation's citizensown what, governments must now ask themselves iftheir citizens are learning how to do what, sothat they are capable of adding more value tothe world economy" (8). This requires develop-ing modern telecommunications infrastructures tosupport the free flow of information and therapid dissemination of all types of data.
These opposing philosophies have created bothpolitical and economic dilemmas for corporationsand governments and have thus far thwarted thedevelopment of a truly efficient global tele-communications network based on emerging digitaltechnologies.
3. POLITICAL-ECONOMIC ASSESSMENT OF ISSUES
Today, governments use technical standards as ameans of stimulating private-sector industriesor of protecting a specific mai:1.er from foreign
domination. This approach is especially commonin the case of digital technologies (e.g., B-ISDN, advanced television or HDTV, and digital
radio). While the issues raised by these poli-cies are not trivial, they have a tendency toconceal the broader issue of world market domi-nation (or the preconceived fear held by mostgovernments concerning their loss of world mar-ket domination within a specific industry).
This political-economic analysis focuses on onesegment of the digital industry, digital radio,as a means of exploring this issue. The thesisdeveloped within this framework suggests that apolicy of deregulation and privatization carriedout without considering a society's culturalnorms hinders the development of national andinternational technical standards (9).
4. DIGITAL TECHNOLOGIES
The buzz word of the '90s is "digital." You are
not "up-to-date" or "fastest" or the "best"unless you have invested in the latest digitaltechnology. Everything from audio tape playersto food processors is marketed touting "new,improved digital features"--whatever that means.But regardless of the sales hype, digital sys-tems are rapidly replacing their analog counter-parts, especially in the field of communica-tions. New digital audio and video equipment isbeing developed daily, while older informationtransmission systems employing coaxial cable ortwisted-pair copper wire are performing beyondegpectations due to the development of new datacompression techniques.
Meanwhile, government agencies are setting ambi-tious goals--mandating the commercial use ofmany of these new technologies by the year 2015(10). The conflicts surrounding the rollout of "Telecom 2000" (11) or its equivalentare best exemplified by looking at the problemsencountered in establishing digital radio broad-casting.
4.1 DIGITAL AUDIO BROADCASTING
Digital Audio Broadcasting (DAB) actually existsin many forms. Trying to understand what it isand how it functions can be a daunting task,because each country and each potential providersees it in somewhat different terms.
4.1.1 PROJECT "ACORN"
Project "Acorn" is an experimental terrestrialbroadcast system developed by USA Digital(12). It supposedly offers AM broadcasters a96 dB signal-to-noise ratio, stereo and a fre-quency response from 20 Hz to 15 kHz. In addi-tion, the technology can also be applied to FMbroadcasting. In this case, a digitally encodedaudio signal is sent within a station's RE maskproviding in-band digital FM. On the receivingend, this digital signal is decoded using a chiporiginally developed by the military (13).
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4.1.2 DIGITAL CABLE RADIO
Another form of terrestrial digital radio beganwith tests conducted by Jerrold Communications
in 1988. Digital radio signals were transmittedover cable television systems and feedback con-cerning the programming was gathered from sub-scribers to the test. Today, approximately35,000 households subscribe to Digital CableRadio (DCR) (14), which is carried on morethan 60 U.S. cable systems. DCR offers 19 discjockey and commercial free CD-quality musicchannels as well as digital stereo simulcastfeeds of HBO, Cinemax, Showtime, MTV, and VH-1
(15).
4.1.3 SATELLITE DIGITAL AUDIO SYSTEMS
Digital audio services are not limited to ter-restrial delivery systems, of course. Some
satellite providers are now offering DigitalAudio Transmission Service (DATS) in the C- andKu-bands. This technology employs pulse codemodulation (PCM) and time division multiplexing(TDM) techniques to saturate a satellite tran-sponder using a single carrier in order to avoidpotential inter-satellite and terrestrial inter-ference problems. Recent developments in SingleChannel Per Carrier (SCPC) channels allow for avariety of data rates (128 kbps to 384 kbps),providing 10 kHz or 20 kHz audio channels(16). Presently, this system is used pri-marily to furnish radio stations with networkand syndication feeds.
4.2 OTHER DIGITAL SYSTEM FEATURES
A number of other features will be available tothe consumer using digital radio once functionsand standards are agreed upon by the industry.One example is RBDS (Radio Broadcast Date Sys-tems). Based on a technology developed in Eu-rope, RBDS uses a 57-kHz data stream broadcaston an FM subcarrier. Once this subcarrier isdecoded by the receiver, it can provide the userwith such information as the station's callletters, its frequency, the type of programmingbroadcast by the station and any emergency situ-ations existing in the immediate vicinity.Moreover, if users are in an unfamiliar loca-tioL, they can take advantage of a program typecode (PTY) broadcast on the subcarrier. Bypressing a button corresponding to a particularradio program format, the user can use thereceiver's search function to lock into anylocal stations broadcasting the listener's pre-ferred style of programming. When used in con-junction with AM radio broadcasting, the pro-posed system is referred to as ID Logic B(17).
4.3 OTHER SYSTEM PROPOSALS
The above systems are just a few of the digitalradio technologies available now or in the nearfuture. In fact eleven Digital Audio Radio Ser-vices (DARS) have been submitted so far. Compa-
nies proposing systems include: Amati Communi-cation Corporation, AT&T Bell Labs, DigitalPlanet, General Instruments, Kintel Technolo-gies, Mercury Digital Communications,
Massachusetts Institute of Technology (MIT),NASA/Voice of America (VOA), Strother LinCom,Thomson Consumer Electronics, and USA DigitalRadio. Testing of these various systems isscheduled to begin in April of 1993, and theElectronic Industry Association (EIA) plans toselect a standard by the end of 1993.
Another service which is very similar to digitalradio is being planned by NBC in conjunctionwith IBM and NuMedia Corporation. These compan-ies plan to provide NBC News and CNBC cablecastnews on personal computers. The experimentdubbed "Desktop News" will consist of a feed ofdaily programming to corporate customers viasatellite, although it can also be sent on coax-ial and fiber optic cables.
Michael Wheeler, NBC consultant and former pres-ident of the Financial News Network (predecessorto CNBC) said that the network will have
. . . an industry-tailored newswire [sic],using news staff and vertical publica-tions. As technology develops this willbe another alternative in which peoplewill get information (18).
The video program is compressed and decompressedusing a $1,400 computer card, called DigitalVideo Interactive, from Intel Corporation. It
plays back at 30 frames per second. A slowerversion will also be available. Corporate cus-tomers can review the latest news on demand,backed up with related text from industry maga-zines. The typical feed would last no longer
than two minutes and would be continuously up-dated (19).
Finally, new VSAT technologies are lowering thecoat of using satellites for smaller groups ofradio stations. While program distribution viasatellite has been around for a number of yearsthe high recurring monthly satellite fees haveprecluded their use by small users. New digitalaudio techniques have now lowered the cost ofsending high-quality digital programming acrossthe U.S. to about $1,200 to $2,500 per month inthe Ku-band (20).
4.4 DIGITAL SYSTEMS: BLURRING THE LINESBETWEEN TYPES OF SERVICES
As the world moves from analog to digital infor-mation systems, the line between types of ser-vices begins to blur considerably. What distin-guishes "AM" digital radio from "FM" digitalradio? What's the difference between receivingnews programming on a computer or a high-definition TV set? and What's the differencebetween conducting a videoconference over afiber optic network or linking up several WideArea Networks using B-ISDN (Broadband IntegratedServices Digital Network)?
The answer, of course, is that there is reallylittle difference among these applications--allof their information is contained in digitalpackets. Bandwidth and propagation (or latency)vary depending on the amount of informationsent, but most of these technical problems havebeen solved or nearly so. The nagging question
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that remains, then, is Why can't these varioussystems be integrated into a national or inter-national network capable of disseminating alltypes of information almost instantaneously?The answer to this question depends less ontechnology than on corporate decisions to pursuethese areas of development. The following exam-ples will show how political and economic fac-tors are retarding the development and deploy-ment of digital radio.
5. TELECOMMUNICATIONS POLICIES ANDDIGITAL RADIO
The people responsible for shaping telecommuni-cations policy are members of one or more of thefollowing groups: standards organizations, lob-bying organizations, the various branches ofgovernment (in the case of the United Statesthese branches are the Judicial, Executive, andLegislative--including Congressional committeesand subcommittees, regulatory agencies, and theDepartment of Defense), domestic and foreignmanufacturers and distributors, and consumers.Because each of these groups has its own agenda,conflicts arise when trying to develop standardsbased on reaching a consensus among the variousfactions. These conflicts are especially appar-ent in the case of digital radio.
5.1 IN-BAND OR OUT-OF-BAND DIGITAL RADIO
The biggest issue facing proponents of digitalaudio broadcasting is whether or not the serviceshould be offered within the existing FM band.This issue was addressed at the Inter-AmericanCommittee on Telecommunications (CITEL) meetingheld in Mexico City in mid-August of 1992.Members were split, with the Mexican andCanadian delegations opting for an out-of-bandservice similar to the European Eureka 147 DABsystem while the U.4. was pushing for an in-bandsystem similar to "Project Acorn" funded byCBS, Group W and !iannett Broadcasting.
While the Mexican and Canadian representativeswere strongly in favor of L-band development,they eventually agreed to form an Ad hoc CITELworking group on DAB to address the concernsraised by Voice of America and National Associa-tion of Broadcasters (NAB) delegates, who feltthat nations committed to L-band DAB should nottry to "short-circuit the development of in-band(DAB] in the Western Hemisphere" (21)
Michael Tremblay, executive vice president ofthe Canadian Association of Broadcasters repliedthat "any criticism of in-band is based on sci-entific evidence" (22). He also said that"the USA Digital Radio Consortium has done somevery good work on in-band, but that it will notprovide the capability of Eureka because of thespectrum constraints" (23).
The possibility for telemetry conflicts betweenCanada and the U.S. is another potential prob-lem. The L-band is used for military telemetryand testing in the United States, while Canadauses the S-band. The S-band issue also raisesconcerns among current users of the spectrum inthe U.S. and is presently being addressed by theFederal Communications Commission (FCC).
5.2 REGULATORS AND NEW TECHNOLOGIES:FORWARD INTO THE PAST
Defining and then regulating new technologies is
one of the greatest challenges facing most coun-
tries having a mature telecommunications infra-
structure. In the case of the U.S., long-termplanning decisions and policy-making is furtherhampered by a set of laws originally formulated
in 1934. As a result, most policy-making be-comes reactionary in the sense that rules and
regulations address problems based on past expe-
riences and situations. While this approach maymake excellent legal sense, it generally stifles
creative solutions to problems and opens up theentire regulatory process to aggressive (andusually) successful lobbying by powerful groupsinterested in maintaining the status quo.
The United States is not the only country whosetelecommunications philosophy is shaped in this
way, however. Although the specific politicalstructures of policy formation differ from coun-try to country, many of the same, arguments canbe heard from politicians, manufacturers, andproviders wherever they are located in theworld. In the 1980s "privatization" and "deregu-lation" were touted as the saviors of nationaleconomies and industries. While the trend con-
tinues worldwide, in the United States (wherederegulation had its roots) there seems to be a
shift toward re-regulating some communicationsindustries, driven by a demand from consumersfor more accountability in some services such as
cable TV. This clash of philosophies can be
seen in the way regulatory agencies are handling
the digital audio broadcast situation.
5.2.1 DIGITAL RADIO AND THE FCC
The FCC has approved a Notice of Proposed Rule-making (NPRM) on digital audio broadcasting,giving satellite-based technology a portion of
the S-band. Under the NPRM, the FCC would re-allocate the 2310-2360 MHz portion of the spec-trum to satellite digital audio services while
current users of the spectrum (mobile and radio-
location services) would be reaccommodated atthe upper end of the S-band (2360-2390 MHz).
Meanwhile, these services would be allowed tooperate in their present location untilJanuary 1, 1997.
The FCC also approved a Further Notice ofInquiry (FNOI) pertaining to terrestrial DABsystems, acknowledging what it termed "wide-
spread interest" in terrestrial DAB, especiallyin-band technology (24).
In discussing the NPRM, Dr. Thomas Stanley,chief of the Office of Engineering and Techno-logy, suggested that satellite DAB might beimplemented "toward the end of the 1990s," whilea "truly successful" terrestrial system may not
be in place until after the year 2000 (25).These statements by Stanley raised a number of
questions at the FCC.
Commissioner James Quello asked Stanley aboutthe effect of proposing S-band for U.S. DAB whenboth Mexico and Canada seem intent on using L-
band. Stanley replied that "the U.S. willparticipate in coordination efforts with [those)countries," noting the possibility of "power and
coverage tradeoffs" (26).
Commissioner Ervin Duggan then asked Stanleywhether the action undertaken in the NPRM wouldbe a threat to localism, and how the conceptcould be preserved in the face of satellite-based DAB implementation. Stanley's responsewas the "the issue raises a question of relative
values--that is, localism versus quality"
(27).
5.2.2 A EUROPEAN FCC AND EC SATELLITEREGULATION
A single European telecommunications servicelicense is being proposed by the Commission ofthe European Communities. If approved, thislicense would permit companies to avoid licens-ing procedures in each country within the EC,thus cutting down on paperwork and expenses.
The proposal would also create a pan-Europeanregulatory body which would wield a substantialamount of direct regulatory authority over tele-communications providers at the expense of na-tional authorities (28). While the proposaldoes not currently apply to satellite services,it does set up a structure that officials saywill be modified in the future to accommodatesatellite licensing. The EC Commission arguesthat current satellite regulations in Europewere created decades ago and fail to deal withrapidly advancing technologies (29).
According to Gerald E. Oberst, Jr. (30):
The intent . . . is to permit single li-censes to extend into other European coun-tries represented in the European Confer-ence of Postal and Telecommunications Ad-ministrations (CEPT). Thus, this proposalcould affect licensing conditions for atotal population area of over 350 million
customers. . . .
To assist in the administration of thesystem, the Commission proposes to estab-lish a Community Telecommunications Com-mittee (CTC), composed of representativesof national telecom regulatory agenciesfrom all EC countries. . . . In fact, theCommission would obtain a new and signifi-cant level of regulatory power under thecurrent proposals (31).
The new structure does not address satelliteservices, because the Commission believes thatsatellite licensing requires consideration offrequency coordination, access to space segmentand interconnection with the public networks(32).
While this proposal should simplify licensingprocedures, it also will be a test of poweramong the various EC governments and the power-ful PTTs and those agencies who control Europeanand international telecommunications satellites.
BEST COPY AVAILABLE 896 `'
5.3 LOBBYISTS, MANUFACTURERS ANDDISTRIBUTORS
While issues concerning cross-border interfer-ence and localism versus quality are being ad-dressed by various government agencies, techni-cal standards, patents and copyrights are cur-rently stalling the implementation of DAB in theUnited States.
For example, the REDS standard was originallyexpected to be approved by the April 1992 NABconvention, but it became stalled when the NABthreatened to pull its support. The NAB's REDScommittee felt that the standard was being driv-en by receiver manufacturers, represented by theElectronics Industry Association (EIA), and ar-gued that it offered no benefit to AM stations.
Even after the two groups compromised by workingID Logic B for AM into the standard, NAB Managerfor Technical Regulatory Affairs, John Marino,said that these was broadcaster resistance tothe FM format scanning feature. According to
Marino:
A lot of broadcasters just don't wantformat scanning at all. They feel thattheir station may actually be missed inany format scanning [by listeners](33).
One of the problems with the scanning feature isthat only 10 specific categories of programmingare identified, and many stations have said thatthey don't want to be rigidly categorized in one
format. For instance, there are several varia-tions of the country format, but only one coun-try format code is presently available; thus,all types of country stations would be lumpedtogether and selected during listener scanning.
On the other hand, proponents argue that theproposed standard already has 21 PTY formalcodes with two spare codes, and as formal scan-ning is a primary feature of the system, theybelieve that without it most consumer, would notbuy the receivers (34).
Meanwhile, the EIA is setting up a testing fa-cility to select a DAB standard. The organiza-tion is supposed to test all systems that arereceived for evaluation by April of 1993 and se-lect one of them by the end of 1993. However,the NAB and other critics of this plan arguethat the committee overseeing the testing doesnot involve broadcasters to the same degree asothers. In fact, the proposed voting bloc givesbroadcasters two votes, the receiver industryfour and one vote each for satellite interests,software manufacturers, broadcast equipmentmanufacturers, radio networks, the semiconductorindustry, and the computer industry. However,
the EIA said that the subcommittee will recom-mend a standard only by consensus, and thevoting bloc only comes into play when the stan-dard is sent to the FCC (35).
On another front, DAB is being assailed by theRecording Industry Association of America(RIAA). This organization is urging the FCC to
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take a cautious approach to satellite digitalaudio broadcasting.
Citing the FCC's acceptance of Satellite CDRadio's application to have a satellite DABservice up and running by 1996, the RIAA toldthe FCC that
. . . without adequate protection, thesedigital audio broadcasting services couldhave a devastating impact on the recordingindustry, and ulr.,mately on the listeningpublic as well.
For example, unless subject to certaincontrols, a digital radio service couldtransmit with CD quality an entire albumof a popular artist, such as R.E.M.'s newhit album 'Automatic for the People,' onthe day of its release, thereby making itavailable to millions of R.E.M. fansthroughout the country.
One can readily see how this capabilitycould virtually wipe out the economicincentives now afforded to record creatorsto produce new recordings by eliminatingthe market for the sale of prerecordedmusic--the only existing means for provid-ing compensation to the record producersend the artists whose performances arefixed on the recording (36).
The RIAA went on to recommend that the FCC"fully protect the copyright interests" of themusic industry and to limit satellite radio DAB
transmissions to "an individual selection from aparticular album during a limited time period"(37).
In its filing at the FCC the RIAA renewed itsrequest for performance-rights royalties forperforming artists, a request that the organiza-tion has made on several occasions during thelast ten years, but which has never gained muchsupport in Congress. The concept calls forbroadcasters to pay royalties to the music in-dustry for their use of prerecorded music beyondthe licensing fees they pay each year to ASCAPand BMI (38).
5.4 STANDARDS ORGANIZATIONS
Although professional societies such as theInstitute of Electrical and Electronic Engineers(IEEE) and the Society of Motion Picture andTelevision Engineers (SMPTE) develop many of themanufacturing standards used in the U.S. tele-communications industry, the coordination ofthese standards is carried out by the AmericanNational Standards Institute (ANSI). While ANSIlicenses manufacturers whose products conform toits standards, their guideline. are still only
recommendations In fact, they do not enjoy thesame status as government regulations. Manufac-turers are free to develop their own "standards"and often do. Examples of "selective standard-ization" include VHS and Beta videocassettemachines and IBM-type and Apple personal comput-ers.
Relying on voluntary cooperation and the market-place to determine "standards" produces customerconfusion. Consumers become wary of buyingexpensive products which may quickly become
obsolete. Manufacturers hesitate to investheavily in research and development, and manyfinancial institutions and investors are unwill-ing to lend capital for low-return, high-riskventures.
One example is AM-stereo radio. After choosinga standard, the FCC reversed itself and opted tolet the marketplace select the standard. Now,
the FCC has decided to re-open the matter and,perhaps, choose a system after all, having de-cided that the marketplace approach was actuallyhindering the implementation of the service.DAB also faces many of the same hurdles thatcaused AM-stereo to stumble.
Bob Finger, Vice Chairmen of the AES's standardssubcommittee, says that
[The] problems in developing a standard[are that] the standards process is a"voluntary activity," and that "geograph-ic" problems make regular communicationsdifficult. More importantly the AES is
not a compliance organization. Therefore,
it is up to the manufacturers to "policethemselves" (39).
As a result, the digital interface standardbeing proposed by the AES actually has twoparts: the electrical portion and the channelstatus portion. But there are levels in theimplementation of the interface, divided alongprofessional and consumer lines. So the AES set
up "minimum," "standard," and "enhanced" cr!te-
ria for implementation (40).
5.5 FOREIGN ORGANIZATIONS
The Mexican broadcasters association, CamoraNacional de la Industrie de Radio y Television(CIRT), is negotiating to join the Eureka 147digital audio broadcasting consortium and ismoving ahead with plans to begin testing andintroducing digital radio to Mexico by 1998.The Mexicans are coordinating test schedulingwith the Canadians, the most active proponentsof the Eureka system at L-band outside of Eu-rope. Canada has conducted tests since 1990.
This action establishes Mexico as a digitalradio broadcasting leader among nations that itis connected with culturally, such as those inCentral and South America, because of commit-ments it made to these countries to help themdevelop digital radio as part of the World Ad-ministrative Radio Conference (WARC) in 1992.
A key aspect of the CIRT plan is extensive lob-bying of the United States. A spokesperson forthe group said:
We will insist in our lobbying effortswith NAB, that it change its current posi-tion [support of S-band for satellite andpossible implementation of in-band forterrestrial] and assist them [the U.S.] inobtaining the spectrum and the assignment
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to the broadcasters in their country(41).
Australia is another country that many believewill soon commit itself to digital audio broad-
casting. The earliest starting date for DAB inAustralia seems likely to be between 1995 and1996 for experimental broadcasts with simulcastsuntil 2010 and digital broadcasts by 2015
(42). (This is approximately the same timeframe proposed by the U.S. Congress to have anationwide, advanced, interactive, interoper-able, broadband telecommunications infrastruc-ture in place.) (43)
Australian officials believe that having asingle transmission standard (L-band) will lowerthe cost of receivers by simplifying their con-struction, thus making them more appealing to
consumers. Receiver costs were cited as beingthe principal reason for AM-stereo's failure inAustralia as consumers were not willing to pur-chase a receiver to listen to a service theycould already receive with analog and digital
simulcasts. The same problem could occur again
with DAB.
Another possible problem that may retard thegrowth of DAB in Australia, particularly satel-lite DAB, is the economy. Although there seems
to be a great deal of enthusiasm for DAB amongmembers of the Federation of Australian RadioBroadcasters (FARB), many radio stations areoperating at a loss, and the nation is still inthe grip of recession. Therefore, the prospectof investing heavily to keep pace with techno-
logical change is not an attractive proposition
for everyone (44).
5.6 CONSUMERS
The success of any advanced digital information
system: radio, television, data--whatever,eventually depends on consumer acceptance.Determining what consumers need versus what theywant is critical in any venture, especiallyduring periods of economic recession, when con-sumers spend less for "wants" and concentratemore on their actual "needs". An editorial incommunications Week aptly sums up this philoso-phy of purchasing in the case of high-data-rateservices:
Users want fast data services, but don'twant them immediately. Or they want themimmediately, but don't want to pay dearly
for them. . . . Switched multimegabitdata services are becoming available, butwe don't hear a mad rush of users askingto get them. And analysts say that salesof switched data services that operate at384 kilobits per second or above are slug-
gish.
The pattern is not new. ISDN services arespeedier than rgular phone lines for PCcommunications and facsimile transmis-sions, yet ISDN has not sold well. And
45-megabit-per-second services are widelyavailable from interexchange carriers, butthey are not widely used (45).
5.7 COMPETITION
In effect, competition i3 a two-edged sword.It is responsible for providing consumers with avariety of new and better services. But it hasalso prevented their full implementation, be-cause it has forced providers to cut their basicofferings. Faced with a stagnant economy, mostusers have opted for slower, but cheaper ser-vices. In addition, because many new technol-ogies are only now being introduced at the con-sumer level, most purchasers are waiting to seethe industry shake itself out--to see what"standards" survive and what "bugs" are in thesystems.
For example, just when everyone thought ISDN wasgoing to get off the ground with the NI-1 speci-fications defined by Bell Communications Re-search and endorsed by all the Bell companies inFebruary 1991, ISDN users were surprised to hearthat Southwestern Bell and US West do not planto install NI-1 software (46).
On another front, HDTV seemed ready to enter theconsumer market. Then, new digital systems sup-planted the analog systems originally underconsideration for tearing in the U.S. Japansoon followed suit, and NTT has been promotingR&D for a Super HDTV (SHD) that will have aresolution of 1,125 scanning lines, approximate-ly twice that of the current Hi-Vision system(47). In Europe a new digital HDTV systemhas also been proposed. The standard, known asHD-DIVINE (Digital Video Narrowband Emission),was supported by James C. McKinney, chairman ofthe U.S. Advanced Television Systems Committee,who chastised the European Commission for itspursuit of the enhanced TV system D-2 MAC as astepping stone to analog HD-MAC. McKinney ar-
gued that "to withhold HDTV from the publicsimply to sell them first an enhanced televisionreceiver is a matter of unconscionable greed onthe part of the equipment manufacturers"(48).
6. DEVELOPING THE TELECOMMUNICATIONS INFRA-STRUCTURES OF THE FUTURE: SUMMARY ANDCONCLUSIONS
While this paper has concentrated on recentdevelopments in digital audio broadcasting as areference point for discussing emerging informa-tion delivery systems, it is obvious that manyof the same problems are confronting those whowish to implement any of the new technologies:radio, ISDN, HDTV, LANs, WANe, or satellites.
Having examined such areas as governmentalpolicy-making, lobbying groups, standards or-ganizations, foreign competition, and economicconstraints, one can begin to see certain com-monalities among nations and groups that contin-ually effect the deployment of new technologies.
6.1 PAST APPROACHES
Any country with a mature telecommunicationsinfrastructure is hampered by the preconceivednotion that existing technologies must be pro-
tected. This is true in the area of software
development as well.
BEST COPY AVAILABLE 899
Furthermore, most industries and associationsrepresenting those industries lobby for unre-strained trade and competition--until they findthemselves being undercut by competitors. Thisphilosophy also carries over to the area of R&D.Many firms actively seek out public funds forresearch, yet decry public control of the infra-structure as overburdensome and anti-competitive.
Most regulatory agencies try to formulate rulesgoverning new technologies based on past prac-tices and reactive rule-making procedures. In
the U.S. the FCC still categorizes technologicalsystems by application (cable, telephone, tele-vision--broadcast or common carrier) even thoughmost technologies, and certainly digital tech-nologies, make these distinctions irrelevant.
Finally, a global capitalist economic systemgenerates a number of forces which can no longerbe controlled at a national level. Protective
tariffs, unique "standards," and subsidizationof certain businesses to protect a state's domi-nance no longer work in a world in which multi-national corporations are linked by instanta-neous communications. Recent events in EasternEurope have shown the fallacy in this line ofreasoning.
6.2 THE UTOPIAN FUTURE
Returning to the issues raised by RobertReich in the beginning of this paper, nationswishing to remain competitive must develop bet-ter ways to develop problem-identifying,problem-solving workers and better ways of link-ing them together. These goals can only beachieved by selecting the right combination oftechnologies for a given situation.
6.2.1 AVAILABLE TECHNOLOGIES
Today, the principal forms of delivering infor-mation around the world include twisted-paircopper wires, fiber optics, terrestrial broad-casting and two-way radios (including cellularand "Sky" phones), coaxial cable and satellites.All of these technologies can handle some amountand some form of digital information.
After information is turned into a digital for-mat, we can no longer tell whether the informa-tion is radio, TV, supercomputer data or any-thing else. Therefore, the ideal approach wouldbe to allocate the various parts of the electro-magnetic spectrum based on transmission effi-ciency, rather than on pre-existing sub-bands.
Once the spectrum is assigned using thesecriteria, nations could then develop an infra-structure based on community needs. For
example, remote areas may need satellite cover-age, whereas cities could be served by fiber.Low-data rate users could benefit from packetradio and low-cost receivers. Only by re-evaluating the services provided to consumersbased on actual needs, rather than on overlyoptimistic "wants" (as defined by overenthus-iastic marketing departments) can a state ornation develop a truly workabletelecommunications infrastructure.
6.3 REALITY CHECK
The utopian vision of developing a working tele-communications infrastructure is just that- -
utopian. In reality established services willcontinue to lobby for protection, and governmentofficials will continue to regulate the industrybased on preconceived and past practices.Nevertheless, certain actions can be taken now
to improve the overall situation.
First, everyone must recognize that no one tele-communications infrastructure will work in all
cases. Cultural considerations and needs ulti-mately decide what a society will or will notaccept, advertising and marketing executives'beliefs to the contrary.
Second, governing bodies must realize that theshift from analog to digital information deliv-ery systems is giving us the opportunity to viewinformation applications from a new perspective.We can use this opportunity to break away fromour rigid approaches to spectrum planning.
If we can accomplish this feat, we can thenexplore ways in which to integrate various digi-tal technologies into seamless telecommunica-
tions infrastructures. Our goal is to organizethe market in such a way that it will motivatethe problem solvers or "symbolic analysts"(49) to discover new ways of helping societywhile inflicting the least amount of harm on our
global environment.
NOTES
1. Robert Reich, The Work of Nations:Preparing Ourselves for 21-st Century Capitalism(New York: Alfred A. Knopf, 1991), 84.
2. Ibid., 87.
3. James R. Beniger, The Control Revolu-tion: Technological and Economic Origins of theInformation Society (Cambridge, MA: Harvard
University Press, 1986), vi.
4. Eileen Meehan, "Technical CapabilityVersus Corporate Imperatives: Toward a Political
Economy of Cable Television and InformationDiversity," in The Political Economy of Informa-
tiOn, ed. Vincent Mosco and Janet Wasko
(Madison,WI: The University of Wisconsin Press,
1988), 167-68.
5. Rhonda J. Crane, The Politics of Inter-national Standards: France and the color TV War
(Norwood, NJ: ABLEX Publishing Corporation,
1979), 2-7.
6. Reich, 153.
7. Amir Mahini, "A New Look at Trade,"The McKinsey Quarterly, Winter 1990, 42.
8. Reich, 148.
900
9. 1.K. Hopkins, "The Study of the Capi-
talist Wolld-Economy, "War.11-_.5Y.St_ems An.e1ya.k
Theory and Methodology, ed. T.K. Hopkins
and Immanuel Wallerstein et al. (Beverly Hills,
CA: Sage, 1982), 13.
10. Congress, House, fainnainiSia.rions _Con-Delltiveness and infrAmucture Modernization Actat_1291, 102d Cong., 2d sess., H.R. 2546, 2.
11. Department of Commerce, National
Telecommunications and Information Administra-tion, NTIA Telecom 2000: Charting_ a Course far aNew Century, ([Washington, D.C.): U.S. Department
of Commerce, National Telecommunications and
Information Administration, October 1988), 15-20.
12. USA Digital is a consortium whosemembers are CBS, Group W, and Gannett Broadcast-
ing.
13. Alex Zavistovich, "Earwaves: DAB
Surprise a la Acorn," Radio World,
19 August 1992, 4.
14. Five of the nation's largest MSOs holdan ownership interest in DCR.
15. Frank Beacham, "Digital Cable Radio
Attracts Listeners," Radio World,9 September 1992, 9-10.
16. Fred Cain, "Up in the Sky . . . DATS
Not Just a Bird!" Radio World, 23 September 1992,37.
17. John Gatski, "NRSC Plans Vote on RDS,"
Radio World, 19 August 1992, 1, 7.
18. Matt Rothman, "NBC brings the news to
PC's," Daily Variety, 12 November 1992, 3-4.
19. Ibid.
20. Huffy Montemayor, "A View of the
Future with 'Vision'," Radio World,
23 September 1992, 43.
21. Alex Zavistovich, "DAB and the Race
Run," Radio World, 23 September 1992, 4.
22. John Gatski, "Canada Skeptical AboutIn-Band DAB," Radio World, 21 October 1992, 8,10.
23. Ibid.
24. Alex Zavistovich, "FCC Wants S-BandFor Satellite DAB," Radio World, 4 November
1992, 1, 11.
25. Ibid.
26. Ibid.
27. Ibid.
28. Gerald E. Oberst, Jr. "RegulatoryUpdate: A European FCC?" Via Satellite, December
1992, 23.
29. Ibid.
-
30. Attorney working on telecommunicationsmatters in Hogan & Hartson's Brussels office.
31. Oberst, 24.
32. Ibid.
33. John Gatski, "NRSC Plans Vote on RDS,"Radio World, 19 August 1992, 1,7.
34. Ibid.
35. John Gatski, "EIA Focuses on DifficultTimetable," Radio World, 4 October 1992, 1, 3.
36. Dennis Wharton, "RIAA Wary of RadioVia Satellite," Daily Variety, 17 November 1992,3.
37. Ibid.
38. Ibid.
39. Alex 2avistovich, "Earwaves: AlphabetSoup and DAB," Radio World, 4 November 1992, 4.
40. Ibid.
41. Lucia Cobo, "Course for DAB Set inMexico," Radio World, 9 September 1992, 1, 7.
42. Max, Thrower, "Australia EvaluatesFuture DAB Service," Radio World,9 September 1992, 7-8.
43. Congress, House, Communications Com-petitiveness and Infrastructure Modernization Actof 1991, 102d Cong., 2d Bess., H.R. 2546, 2.
44. Ibid.
45. "The Slow Road to High-SpeedServices," Communications Week, 23 November 1992,
36.
46. "Two Bells Frustrate National ISDNEffort," Communications Week, 23 November 1992,1, 51.
47. "Super HDTV: NTT Doing Research onPrototype SHD toward the Greater Integration ofMedia," New Breeze, 4, no. 3 (October 1992), 6-7.
48. Phil Parker, "Europe Considers HD-DIVINE," TV Technology, October 1992, 1, 10.
49. Reich, 186.
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Converging Telecommunications Technologies and Business Efficiency
Ronald P. UhligNorthern Telecom Asia/Pacific, USA
and
Bill JollNorthern Telecom Asia/Pacific, Singapore
1. ABSTRACT
The role of telecommunications in improving business efficiency is
reviewed. Two examples: automatic call screening and audioconferencing, are explored through a typical business scenario. The
impact of several new telecommunications business capabilitiesresulting from converging technologies is then explored. New
capabilities discussed include store and forward facsimile, voiceannotated facsimile, dial-up video conferencing and video mail.
2. INTRODUCTION
During the past decade, it has been widelyrecognized that a strong telecommunicationsinfrastructure is essential to economicdevelopment. Major investments arecurrently being made in developing andexpanding telecommunications throughoutthe Asia/Pacific region, and in many otherparts of the world. This investment is a
response to the need for better people topeople communication - particularly inbusiness.
The role of personal relationships isimportant in business everywhere, but it canbe argued that this is the single mostimportant element of conducting business in
Asia. The role of telecommunications inbuilding and maintaining these relationshipshas continually increased in importance o erthe years.
Initially, the telephcne was a poor substitutefor a face to face meeting. Calls weredifficult to set up. Quality was often poor.And the service was expensive. Theintroduction of modern equipment with suchcapabilities as stored program control anddigital communications, has drasticallyimproved communications both within Asiaand between Asia and other regions.
As these improvements have taken place, thetelephone call has changed from a poorsecond choice for holding a meeting, to anindispensable tool for conducting business inAsia/Pacific. One indicator is the wide
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spread of wireless personal communications.In major Asian cities today, more than in anyother part of the world, one, encounters largenumbers of people using portable h?.ndheldwireless terminals. The traffic jams of someAsian cities are legendary, and these toolshave already become essential tomaintaining contact, and building andmaintaining the relationships on whichAsian business depends.
The basic telephone call provides a majorimprovement to business efficiency by itself.It would be literally impossible to meet faceto face with the number of people one talkswith in a typical business day. But this is
only the beginning of the businessefficiencies which come from moderntelecommunications systems. Many suchimprovements were introduced first in theadvanced private telecommunication systemsinstalled in large corporations. As thesecapabilities spread into the public networks,and become available more widely to allsectors of business, the effectiveness of Asianbusiness will increase. Beyond this, newfeatures and capabilities from convergingtelecommunication technologies will provideeven further economic stimulus throughfurther improvements in business efficiencyand effectiveness. It is some of these newfeatures and capabilities which are the focusof this paper.
3. BUSiNESS EFFICIENCY SCENARIO
Two examples of business applicationsimplemented first on advanced private
I;_
business communications systems includeautomatic call screening and conferencecalling. As with most telecommunicationsimprovements these applications areconcerned with more efficient use of timeand people.
3.1 Automatic Call Screening
Call screening allows an individual to specifyhow incoming calls are to be handled, basedon the identity of the calling party. Forexample, an individual may be workingagainst a tight deadline to prepare a bid.Only calls from departments concerned withthe bid preparation are to be accepted. Inaddition, of course, calls from the boss will beaccepted. The departments from which callswill be accepted, and the identity of the bossare entered into the system. These calls will'ring" on the individual's desk, with a specialringing pattern to identify them. All othercalls will be forwarded to the individual'svoice mail system. This allows the individualto concentrate on the task at hand, withoutinterruption, except for calls which areneeded to complete the immediate task.
During one of the calls, an issue is raisedwhich requires resolution among severaldepartments, before the final bid can beprepared. The individual immediately placesa conference call to four key people inseveral different cities and the issue isresolved in about an hour.
3.2 Audio Conference Calling
Conference calling is also concerned withtime and people. Setting up a face to facemeeting among the people involved in theconference call would require both time andexpense for travel. And the deadline forsubmitting the bid could be missed, becauseof scheduling conflicts. Conference calls don'teliminate scheduling conflicts, but theyreduce them, because the time required istypically reduced to one to two hours,instead of the one to two days typicallyrequired for travel to and from a face to facemeeting.
4. IMPACT OF CONVERGING TECHNOLOGIES
4.1 Convergence Of Voice And Fax With StoreAnd Forward Technology
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It is quite likely that some facsimilecommunications would also be used in theprocess of preparing the bid. Following theexplosive growth of the last decade, it is hardto imagine conducting business inAsia/Pacific today without fax. Ease of use,reliability and low cost are a few of thereasons facsimile communication hasexploded globally. The fact that anylanguage can make use of facsimile,regardless of the writing system, has beenparticularly important in Asia/Pacific.Closely related is the fact that voicetelephony is independent of language.Bringing voice and fax technologies together,and combining them with store and forwardtechnology will provide a powerful extensionto an already powerful communications tool.
Store and Forward Facsimile
Store and forward technology, facsimiletechnology and voice technology areconverging, and the result will be a strongpositive impact on business productivity andefficiency. This convergence will improvepeople to people communications.Continuing improvements in memory sizetogether with continuing reductions in costwill make it feasible to combine digital voiceannotations with digitally stored facsimiledocuments.The concept is shown in Figure
STORE & FORWARD FACSIMILE CONCEPT
Figure 1
It could be argued that facsimile is basicallya "store and forward" mechanism. Themessage is stored on paper, then transmittedto the receiver, where it is "stored" onanother piece of paper. So there is a natural
synergy with the advances of the pastdecade in store and forward voice mail andtext messaging.
Voice Annotated Facsimile
A basic capability of message store andforward systems which will enhancefacsimile is the ability to forward a storedfax message to another person, with orwithout annotations. The annotations maybe text. But, further integration of store andforward facsimile with voice mail systemswill give senders and recipients thecapability to add voice instructions orcomments before sending or forwarding thefax.
No matter how good the writer's writingskills, more complete comments anddirections can be given with voice. The userinterface can be as simple as any telephoneset with a DTMF interface. Using acombination of keys, the recipient of the faxcan begin recording, pause, edit, etc. - all thesame capabilities typically available with atape recorder or dictation unit.
This need not require special facsimileequipment. All modern voice communicationsystems send and receive digital bit streams.Bit streams which contain the carrier plusthe fax information can be captured and heldin memory associated with a PBX or a CentralOffice switch, and then transmittea to afacsimile unit or a CRT screen at a later time,under user control.
Additional Efficiencies From Store AndForward Fax
Several capabilities associated with voicemail systems today, will make store andforward facsimile more effective thanstandard fax. A simple example is thecapability to turn on a "message waitinglamp" on the recipient's telephone set.Facsimile equipment is typically located in aspecial room which may not be attended.The individual expecting an urgent messageby fax can waste time going back and forthbetween office and fax room. A messagewaiting lamp on the telephone set to alertthe recipient that a facsimile has arrived, willeliminate this inefficiency. Yet anothercapability likely to be added to facsimilestore and forward systems is integration
with a paging system to notify a recipient ofthe arrival of an urgent facsimile message.
One of the most valuable features of a voicemail system today is its ubiquity. A user canaccess his voice mail and receive messagesanywhere there is a phone. Store andforward fax has a similar capability. Theuser can access the facsimile messages bydialing in from any fax terminal. Faxterminals are already common in airportsand fax interfaces have become common inportable personal computers. These toolsbecome even more powerful when used in
conjunction with a fax store and forwardsystem. It is not difficult to imagine a faxpay phone in many locations in the future,when fax store and forward systems becomewidespread. This effectively provides theability to route a fax to wherever therecipient is located, even if he is movingamong several locations.
4.2 Evolution of Business Video Conferencing
Many different communications technologieshave converged to make business videoconferencing a reality. Video communicationis the most recent advance available to thegeneral user.. Reasonably good quality dial-up video , using two 64 kb/s circuits, isemerging globally, using the technologyshown in Figure 2.
DIALABLE WIDEBAND SERVICES
Loop
DS1
AccessLoop
Communications Network
Multifabric
Switch
Mute fabric
Smith
CustomerPremises
Stgitailng
4.0v106, (007)Customer
Premises
End User Dialabie (DTMF or ISDN Signalling)
Logical Association of POTS Loop or ISDN D Channel with Video DS,Access Loop
Access and Interoffice Connection Options:
Sub DS1 DS1 DS1. Multiple
Figure 2
The cost is affordable to all the nations ofAsia/Pacific and the impact is dramatic.
904
This relatively low bandwidth video does forreal time communications what facsimiledoes for store and forward communications.The video camera allows individuals atmultiple locations to communicate images,drawings, and text, in real time conferences,and to discuss what is displayed. Dia; -upvideo conferencing, combining real timeimages with real time voice, is bothindependent of the character sets of thelanguages being used and works equally wellfor all languages.
Video conferencing has begun to be widelyused for conferences involving peopledistributed around Asia/Pacific in theauthors' organization. The vast distances inthe region make video conferencing aparticularly effective tool. Video conferencerooms at our corporate locations in Sydney,Singapore, Hong Kong and Tokyo are inheavy use both for conferences onlyinvolving people within Asia/Pacific, as wellas for meetings involving people in ourEuropean and North American locations.
Video Mail
In the relatively near future, video camerasand scanning devices will be available on thedesk top, so that people will not even have togo to a specially equipped room to have avideo conference meeting. As this occurs,and as the technology continues to evolve,video mail will emerge as a naturalconvergence of the fax mail and videotechnologies. This will allow a sender to senddocuments containing live video annotationsand voice annotations. This will be thepinnacle of multi-media communications.
5. CONCLUSION
These are only a few examples of the ways inwhich converging technologies will greatlyexpand the impact of telecommunications.The capabilities discussed will beimplemented as extensions to the capabilitiesof telecommunications switching equipment(both central office switches and PBXs).Some additional equipment will be required,such as video cameras, video codecs, andadditional memory to store the digital voiceand facsimile images. But, the cost will beminimized by exploiting synergies withexisting telecommunications equipmentcapabilities. The additional equipment
905
required may reside either in the publictelephone network or on the premises ofbusinesses.
It is these kinds of capabilities which willmake Asia/Pacific business both moreeffective and more efficient in servingdomestic needs, and in competing in theglobal economy of the 90's.
The Telcos Move Toward A Global Market: Economic AndCultural Implications for the Pacific Island Nations
Ronnie G. BankstonUniversity of Northern IowaCedar Falls, Iowa USA
This study examines the changing nature of U.S. telcosfrom an economic and regulatory perspective and identifiesproblems and possibilities with their potential applicationin the Pacific Island Nations. The study places asignificant emphasis on the transfer and application of atelco's video distribution capabilities.
Multiplicity of cultures and anarray of political systems make thePacific Island Nations (PINs) one of themost diverse regions in the world.However, the PINs do share a commonchallenge: the development of acommunications infrastructure.
Fundamental economic, political andsocial problems have forced most PINs toapproach the communicationsinfrastructure challenge from adevelopment perspective. As a result,the development of a communicationsinfrastructure is tied to political,social, economic and educationaldevelopment.
A possible communications model forPINs may be the telco. Telcos in theUnited States (U.S.) have the capabilityto distribute video, voice, and data.However, the transfer of technology is acomplex process that is dependent uponneeds, resources, technical skills andpolitical and economic factors thatinfluence the development and transferof the technology.
U.S. telcos may provide acommunications model that is useful toPINs. However, the evaluation of atelco model must take into accountmovement into a global market and theeconomic, political and regulatoryfactors that are driving this movement.
This study examines the changingnature of U.S. telcos from an economicand regulatory perspective andidentifies problems and possibilitieswith their potential application in thePINs. The study places a significantemphasis on the transfer and applicationof a telco's video distributioncapabilities.
TELCO'S IN THE UNITED STATES
The Regional Holding Companies(RHC's) continue to examine domesticopportunities while actively pursuingventures and operations outside of theU.S.. The RHC's are pursuinginternational agendas by owning cableoperations or pay-television services.
NYNEX has been providing cable
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television services to customers in theUnited Kingdom (U.K.) since 1991. Thecompany plans to integrate telephoneservices with cable networks (1).
In 1988, Pacific Telesis and JonesIntercable Incorporated acquired aprinc'pal interest in East LondonTelecommunications Ltd., a cable andtelephone company (2). Since thatacquisition, Pacific Telesis hasincreased its cable holdings to fourteenfranchise areas (3).
Southwestern Bell has an equityposition in the Oyston CableCommunications Group. The companyprovides financial and marketingexpertise to Oyston's cable systems inEngland. Day-to-day operations arehandled by a management team hired bythe Oyston Group. In a second venture,Southwestern Bell and Golden ChannelsLtd. hold franchise areas in Israel (4).
In 1988, U.S. West acquired a tenpercent interest in a French cablecompany, Lyonnaise Communications.Since that acquisition the company hasacquired an interest in cable operationsin the U.K., Hungary, Sweden and Norway.The systems in the U.K. integrate phoneand video services (5). U.S. West didsuffer one notable setback when itwithdrew from a cable operation inHong Kong.
Ameritech, Bell Atlantic, TimeWarner and Tele-CommunicationsIncorporated have acquired a fifty-onepercent interest in Sky NetworkTelevision, a New Zealand pay-televisionservice. The service uses three UHFchannels to provide news, movies andsports programming to approximately50,000 customers (6).
By acquiring interest in pay-television services, such as Sky NetworkTelevision, or cable systems the telcosare moving toward a global market. Theprimary forces pushing the telcos acrossthe globe are the perceived hopes andpromises of a global market and anunstable regulatory environment in theUnited States.
HOPES AND PROMISES OF A GLOBAL MARKET
The telcos are changing. Tney haveimplemented corporate diversificationstrategies that have resulted in theownership of cable systems in Europe,fiber optic cable consortiums, cellularnetworks and interest in foreigntelephone operations. In essence, thetelcos are positioning themselves to bedominant communications organizations ina global market that has high speed,high quality communication systems thatwill provide numerous services intohomes and businesses.
In relation to video, internationalholdings and operations provide anopportunity for telcos to conductexperiments and field tests, integratecommunications services, bypassownership barriers that exist in theU.S., gain valuable experience aboutcable systems and operations and preparefor future ownership and operation ofsystems in the U.S..
UNSTABLE REGULATORY ENVIRONMENTLEGISLATIVE BACKGROUND (7)
Divestiture of AT&T
On November 24, 1974, the U.S.Department of Justice filed suit againstAT&T for antitrust violations (8). Thesuit alleged that AT&T monopolized long-distance services, the market forcustomer premises terminal equipment,and the market for telecommunicationsequipment (9). The trial began January15, 1981, with U.S. District Court JudgeHarold Greene at the bench. The JusticeDepartment's presentation of evidencebegan on March 4, 1981 (10). AT&T'spresentation of evidence began onAugust 3, 1981 (11). On January 8,1982, AT&T and the Justice Departmentannounced a negotiated consent decreethat required AT&T to divest its BellOperating Companies (BOC's) (12). Thesettlement, commonly identified as"Modified Final Judgment" (MFJ), wasapproved by Judge Greene on August 24,1982, after several modifications (13).In December of 1982, AT&T submitted areorganization plan to Judge Greene,which he approved on August 5, 1983.The Supreme Court upheld thereorganization plan or December 5, 1983(14).
The MFJ transferred ownership ofthe twenty-two BOC's from AT&T to sevenRHC's and placed business restrictionson AT&T and the RHC's. Theserestrictions prohibited the RHC's fromproviding long distance services,manufacturing certain types ofequipment, and owning informationservices distributed through phonesystems. The MFJ did not specifically
907
identify cable television as aninformation service. However, mostindustry observers assumed that cabletelevision was a restricted informationservice (15).
In September of 1987, Judge Greene,who has the responsibility of over-seeing the MFJ, ruled that the RHC'scould transmit information services.However, Judge Greene refused to liftrestrictions that prohibited the RHC'sfrom providing content or having afinancial interest in the content (16).On March 7, 1988, Judge Greene issued anorder that permitted the RHC's toestablish telephone-computer systemsthat connect an information provider anduser together. Also, Judge Greeneallowed the RHC's to distribute alimited number of electronic messagingservices, such as electronic mail andvoice storage and retrieval services(17). These rulings by Judge Greeneallowed the RHC's to provide theinfrastructure for information servicesand reinforced ownership and contentrestrictions contained in the MFJ.
In April of 1989, AT&T submitted arequest to Judge Greene for entry intoelectronic publishing. The request,which asked for the termination of aseven-year ban in the MFJ, was approvedby the Judge and became effective onAugust 24, 1989 (18). The RHC's, whichreceived no relief in this ruling,wrapped themselves in the FirstAmendment and moved to the U.S. Court ofAppeals in Washington.
On December 6, 1989, the RHC'sappeared before the court and presenteda case that promoted freedom of speech
over telephone lines (19). In April of1990, the court ruled that Judge Greenehad been using the wrong standard toprohibit the RHC's from providinginformation services, such as cabletelevision and electronic yellow pages(20). This ruling, which asked JudgeGreene to reconsider his rulingspertaining to information services, didnot remove the ban. On August 17, 1990,the RHC's filed a response requestingthe removal of the information servicesban (21).
On July 25, 1991, Judge Greenelifted the information servicesrestriction. However, the Judge"stayed" his decision until an appellatereview was completed (22). The U.S.Court of Appeals reached a decisionwithin a matter of months. On October7, 1991, the Court ruled that JudgeGreene did not have grounds to delay theremoval of the information servicesrestriction (23). As a result, theRHC's entered the information servicesbusiness.
r.CJ
Telco-Cable Cross-Ownership Rules
In 1970 the Federal CommunicationsCommission (FCC) adopted a cross-ownership rule that prohibited telephonecompanies from operating cabletelevision systems. Telephone companiesthat were operating cable systems at thetime were forced to sell the cableoperations. However, there was oneexception to this rule: the FCC allowedtelephone companies, which wereoperating cable systems in ruralcommunities that had a low densityfactor of homes per mile, to request awaiver of the rule (24). In 1981, theFCC adopted a general waiver of thecross-ownership rule for ruraltelephone-cable operations that met tworequirements. First, the ruralpopulation that could gain access to thecable system had to be 2,500 or less.Second, the telephone company would haveto be the only company interested inproviding cable service to the community(25).
The 1970 cross-ownership rule andthe 1981 waiver were codified byCongress when it passed the CableCommunications Policy Act of 1984. Thislegislation, which was incorporated intothe Communications Act of 1934 as TitleVI, codified the cross-ownership rule byprohibiting telephone companies fromproviding cable television service intheir telephone service area and fromhaving an ownership interest in a cablesystem that uses the re3ources of thetelephone company to distribute itsservice. The Act states:
(b)(1) It shall be unlawfulfor any common carrier subjectin whole or in part to titleII of this Act, to providevideo programming directly tosubscribers in its telephoneservice area, either directlyor indirectly through anaffiliate owned by, operatedby, controlled by, or undercommon control with thecommon carrier.(2) It shall be unlawful forany common carrier, subjectin whole or in part to titleII of this Act, to providechannels of communicationsor pole line conduit space,or other rental arrangements,to any entity which isdirectly or indirectly ownedby, operated by, controlledby, or under common controlwith such common carrier,if such facilities orarrangements are to be usedfor, or in connection with,the provision of video
programming directly tosubscribers in the telephoneservice area of the commoncarrier. (26)
The Cable Communications Policy Act of1984 codified the 1981 waiver byproviding an exemption for ruralcommunities.
(3) This subsection shall notapply to any common carrier tothe extent such carrierprovides telephone exchangeservice in any rural area (asdefined by the Commission).(4) In those areas where theprovision of video programmingdirectly to subscribersthrough a cable system ownedby, operated by, controlledby, or affiliated with thecommon carrier involved, orupon other showing of goodcause, the Commission may,on petition for waiver, waivethe applicability ofparagraphs (1) and (2) ofthis subsection. (27)
Video Dial Tone Rules
In October of 1991, the FCCinitiated an inquiry about its videodial tone proposal. Under the proposal,telcos could transport video for cablenetworks and other video programproviders on a common carrier basis.Telcos, operating as common carriers,would have to provide services on afirst come, first serve basis, whilehaving no control or ownership overprogramming content (28).
As part of the inquiry, the FCCasked for comments about telco ownershiprestrictions. Should telcos be able toown a percentage of video programming?Should telcos providing video dial toneservice be allowed to own a percentageof the programming distributed throughthe service?
In July of 1992, the FCC adoptedvideo dial tone rules that were similarto the original proposal. These rulesallow telcos to transmit videoprogramming provided by cable networksor other program providers withoutobtaining a municipal cable franchise.In addition, telcos can own as much as afive perc.nt equity in programmingservices they carry (29).
UNSTABLE REGULATORY ENVIRONMENT-CURRENT CONDITIONS
At the present time telephonecompanies are allowed to compete in thecable television business bydistributing programming in a common
908 0
carrier capacity. However, theregulatory environment for telcoparticipation in cable is anything butstable. The RHC's, Judge Greene,Congress, the FCC, the NationalAssociation of Broadcasters, theNational Cable Television Association,the National Telephone CooperativeAssociation, the Community AntennaAssociation, the United States TelephoneAssociation, and numerous other partiesare trying to have an impact on thefuture role of telcos. Differencesbetween these organizations and partiescan be reduced to four primary points ofcontention.
Common Carrier vs InformationProvider
Should telcos be allowed todistribute video programming tosubscribers? The distribution of videoby telcos has been perceived as aninevitable step by numerousorganizations and parties. For example,in December of 1988, the FCC released areport that concluded telephonecompanies would inevitably move into thecable television business (30). If theprimary point of contention is not theentry issue then what is it?
The conditions and circumstancesunder which the telcos enter the cabletelevision business has been the primarypoint of contention. Should telcos beallowed to own a significant percentageof a programming service they distributeto subscribers? Or should telcosdistribute programming to subscribers ina common carrier/conduit capacity?
The RHC's and proponents of asystem that has telephone ownership ofcontent argue for a modern, high speedinformation system into homes andbusinesses. A fiber star-switchednetwork would provide high definitiontelevision, home banking, home shopping,video-on-demand, interactive video forphone users and access to a variety ofdata bases. In essence, RHC's couldintegrate broadcasting, cable,computerF., film exhibition andnewspapers into one system (31).
According to Bell Atlantic an advancedfiber optic system could be availablewithin fifteen years.
Within 15 years-given afavorable regulatory climate-Bell Atlantic's deployment ofdigital and opticaltechnologies, will reach homesand businesses region-wide,providing a virtuallylimitlIss number of highspeed, high quality channelscapahle of transmitting suchservices as high definitiontelevision and fell- motioninteractive video. Thepotential benefits in
909
education, work, health care-and other vital areas- areenormous. (32)
The cable industry and opponents oftelephone ownership of content arguethat a competitive cable/videomarketplace is dependent upon telcosbeing assigned a common carrier status.According to their position, Congressplaced a "strict" ban on telco ownershipwhen it passed the Cable CommunicationsPolicy Act of 1984. This regulatory banwas codified because of problems andconcerns that would arise if telcoownership were permitted. To allowtelcos to own video services or buyexisting cable systems would only openthe door to problems that have beenidentified in the past.
Competition vs Monopoly
The second point of contentionfocuses on the impact that telcos willhave on the cable marketplace. Willtelco participation create a competitivevideo distribution market? Or willtelco participation lead to anti-competitive practices and monopolisticbehavior?
RHC's and proponents of a telcosystem argue for a competitivemarketplace between telcos and cableoperators (33). According to theirposition, competition between serviceswould ultimately lead to a lower or morestable pricing scheme, a greater numberof programming choices, and greatersubscriber satisfaction.
The cable industry and opponents ofa telco system say telcos would cross-subsidize video operations to gaincontrol of the marketplace (34).According to their position, telcoswould cross-subsidize video operationswith revenue generated from telephoneservices. The telcos, operating from aposition of power, could lowersubscriber costs to a point equal to orbelow a cable operator's break-evenpoint. Over a period of time the telcoswould gain control of the cableindustry.
Some opponents, such as CongressmanDan Schaefer, don't think telcos will besatisfied until they control the entirecommunications industry.
The one thing broadcasters andcable should fear more thananything is not each other butthe seven RBOC's. These arethe one's sitting back withtheir pockets so much deeperthan both of you put togetherthat eventually...they willcontrol basically everything,and that is what they want.They want complete control ofthe communications industry.(35)
Incastrial Policy vs Marketplace
The third point of contentionfocuses on the development of a nationalcommunications infrastructure. Shouldtelcos be allowed to compete in thecable television industry, with minimalrestrictions, in return for thedevelopment of a high speed, highquality communications infrastructure?Should the development of a modern, highspeed communications infrastructure bedriven by marketplace factors or thepolitical system? What problems orconsequences will the country face ifthe development of a moderncommunications infrastructure ispostponed for 25 to 30 years?
Proponents of a telco system arguethat the U.S. is in desperate need of a
modern communications infrastructure(36). According to their position, theU.S. is falling behind other countriesin this area. They claim that if anational fiber optic network is notconstructed the country will be hinderedin its ability to compete in globalmarkets in the future. Further, theyassert that if the construction of thenetwork is delayed too long then theU.S. could become a second classtelecommunication society (37).
Proponents contend that thecountry's future competiveness in globalmarkets cannot be tied to the uncertainrhythms and nuances of the market.Congress, via legislation, or the FCC,via rules and regulations, must provideincentives for telcos to construct anational fiber optic network. Entryinto the cable television industry, withminimal restrictions, is believed to bean incentive tha,- could promoteinfrastructure development (38).
Opponents of telco systems view anyattempt, by Congress or the FCC to linktelco entry into the cable industry withthe development of a nationalinfrastructure as industrial policy(39). According to their position,telco movement into the cable industryshould be driven by market factors andnot industrial policy. If Congress orthe FCC create an industrial policy thatignores market factors, opponents arguethat the end result could hurtsubscribers and create billions ofdollars of underutilized facilities.
Cooperation vs Competition
The fourth point of contentionfocuses on the relationship betweentelcos and the cable industry. Shouldtelcos develop a fiber optic or coaxialsystem that would provide directcompetition against the cable industry?Or should telcos work with the cableindustry to provide homes with a modern,sophisticated communications system?
910
As not'd earlier, telcos would liketo play a malcr role in thecommunications industry or the future:a world where homes and businesses haveinstant access to information andentertainment. To construct this visionof the future, telcos argue forownership rights in the areas ofdistribution and content production.The acquisition of such rights wouldrequire eliminating existing regulatorybarriers. The key question: when willregulatory barriers be removed?
The uncertainty of the regulatoryenvironment has resulted in calls forcooperation between telcos and cablecompanies (40). Raymond Smith, chairmanand chief executive officer of AtlanticBell and Richard McCormick, presidentand chief executive officer of U.S. Westhave called for an end to turf warsbetween telcos and cable (41).According to Smith and McCormick, jointventures would allow the two to sharecosts, risks and rewards and enhance thedevelopment of a national communicationsnetwork.
However, the cooperative approachmay not be as beneficial to telcos as itis to cable operators. A cooperativeapproach reinforces the distributor roleof the telco. In essence, it reducesthe urgency for regulatory changes thatwould allow telcos to own a percentageof programming services or acquireexisting cable operationF.
TELCOS IN THE PACIFIC ISLAND NATIONS
The telco offers Pacific IslandNations a high speed, high qualitycommunications system that can eliminateor reduce distance barriers and timeconstraints. In addition, the telcooffers a communication technology thatcan easily be expanded and/orincorporate technological innovations.
On the other hand, the telco systemwould be costly and force PINs to remaindependent upon the system provider forequipment.
The key question is: how canPacific Island Nations strategicallyutilize a telco system to meetdevelopmental needs without remainingdependent upon the system provider orforeign programming services? The U.S.telco model, which is market driven, maynot provide the best solution to theproblem.
Telecommunications organizations,such as the RHC's and cable operators,are driven by market forces. Theypursue capital by controlling marketsand lobby extensively to maintain theircurrent market control or to createconditions that will be favorable forenhanced control in the future. Theconstant struggle between theseorganizations obscures or minimizesdevelopmental needs, such as the
deployment of a fiber optictelecommunications network in the U.S..
In addition, the U.S. telco modelis tied to the development and controlof information and entertainmentservices that are perceived to belucrative markets somewhere down theroad. How well these services willaddress the developmental needs of thePINs is yet to be seen.
(1) NYNEX Corporation, 1991 AnnualReport, New York: NYNEX Corporation,1992, p. 12.(2) K. Donow & S. Douglas, "ThePotential Impact of Telephone RegionalHolding Companies' Diversification andVideo Service Strategies on theBroadcasting Industry," Washington, DC:National Association of Broadcasters,1990, p.38.(3) Pacific Telesis Group, 1991 AnnualReport, San Francisco: Pacific TelesisGroup, 1992, p. 23.(4) Donow & Douglas, pp. 47-48.(5) Donow & Douglas, p. 54; "The CondoApproach to Telco Entry," Broadcasting,3 February 1992, p. 26.(6) Ameritech, Ameritech 1991 InvestorFactbook, Chicago: Ameritech, 1992,p. 36; Bell Atlantic, 1991 AnnualReport, Philadelphia: Bell Atlantic,1992, p. 34.(7) Portions of this section arepresented in M. Tolstedt & R. Bankston,"The Telcos Are Coming, The Telcos AreComing: Economic and CulturalImplications for the Pacific Islands,"Pacific Telecommunications 1991Conference Proceedings, Honolulu:Pacific Telecommunications Council,1991, pp. 95-101.(8) B. Ennis & T. Sullivan, "The AT&TSettlement: Legal Summary, EconomicAnalysis, and Marketing Implications,"Journal of Marketing, Winter 1985,p. 127; National Association ofBroadcasters, "Telephone Company MarketEntry," Background Paper, Washington,D.C.: National Association ofBroadcasters, 1989a, p. 3.
(9) Ennis & Sullivan, p. 128.(10) S. Coll, The Deal of the Century:The Breakup of AT&T, New York:Atheneum, 1986, pp. 158 & 173; B.Tunstall, Disconnecting Parties:Managing the Bell System Break-Up,New York: McGraw-Hill, 1985, p. 13;Enis & Sullivan, p. 128.(11) Ennis & Sullivan, p. 128.(12) Tunstall, p. 16.
(13) Tunstall, p. 42.(14) Ennis & Sullivan, p. 132;Tunstall, p. 86.(.15) National Association ofBroadcasters, 1989a, p. 5.(16) "Less Than Half A Load: JudgeGreene Refuses to Unleash the Regional
911
Holding Companies ," Public UtilitiesFortnightly, 15 October 1987, pp. 30-31;P. Huber, "Free Speech for PhoneCompanies," Forbes, 19 March 1990, p.172; "Federal Judge Retains Ban onInformation Services by BOC's,"Broadcasting, 14 September 1987, p. 41.(17) National Association ofBroadcasters, 1989a, p. 6; "Videotex:Rediscovering its niche," Broadcasting,20 June 1988, p. 72.(18) C. Ferris, F. Lloyd & T. Casey,Cable Television Law: A VideoCommunications Practice Guide--CableCommunications Policy Act of 1984,New York: Mathew Bender Company, 1985,p. 85.(19) "AT&T Asks Judge to Allow It IntoElectronic Publishing," Broadcasting,1 May 1989, p. 135; "A Boost for theElectronic Press," Fortune, 28 August1989, p. 14; M. Carnevale & J. Lopez,"In Electronic Publishing All Eyes AreFixed on AT&T," The Wall Street Journal,2 August 1989, p. B1.(20) Huber, p. 172.(21) "Court Sends Telco Ban Back toJudge Greene," Broadcasting, 9 April1990, p. 66.(22) J. Jaben, "Bracing for aDonnybrook," Business Marketing,November 1991, p. 50; A. Stewart, "HowJudge Greene's Recent Decision ChangesBusiness Telecom," Communication News,November 1991, p. 42.(23) "Baby Bells Get Green Light,"Direct Marketing, November 1991, p. 10;Jaben, p. 50.(24) National Association ofBroadcasters, 1989a, p. 6; D. Drialo,"Telephone-Cable Crossownership:Replacing Prohibition," RuralTelecommunications, Winter 1989, p. 55.(25) Drialo, p. 56.(26) Drialo, p. 55.(27) Ferris, Lloyd & Casey, p. 85.(28) H. Jessel, "Telcos to Go for Halfa Loaf on Cable Entry," Broadcasting,2 December 1991, p. 51; C. Mason, "VideoDial Tone Plan Pleases Few," Telephony,10 February 1992, p.11.(29) "Companies, Regulators SuggestChanges in Video Dial-Tone," FCC Report,November 1992, p. 4.(30) National Association ofBroadcasters, 1989a, p. 7.(31) National Association ofBroadcasters, "Telco/Video: CompetitiveIssues & Broadcast Directions,"Background Paper, Washington, D.C.:National Association of Broadcasters,1989b, p. 11.(32) Bell Atlantic, 1990 Annual Report,Philadelphia: Bell Atlantic, 1991,p. 10.(33) R. Sukow, "Telco Ardor for CableOwnership Cools," Broadcasting, 2 March1992, p. 10; H. Jessell, "White HouseCall for Video Dialtone," Broadcasting,1 June 1992, p. 26.
(34) R. Sukow, "Telco Entry May Lead toCable Bill Veto," Broadcasting, 20 April1992, p.27; C. Mason, "Regulators SlamTelcos Over CATV," Telephony, 1 April1991, p. 11; R. Loube, "TheInstitutional Conditions forTechnological Change: Fiber to theHome," Journal of Economic Issues,December 1991, p. 1013.(35) Sukow, 20 April 1992, p. 27.(36) "Burns Boosting a BroadbandNetwork," Broadcasting, 2 March 1992,p. 10; C. Mason, "LEC's, RegulatorsConfront Infrastructure Issues,"Telephony, 11 November 1991, p. 8; "BillWould Give Phone Companies Limited RoleIn Interactive TV," Marketing News,28 October 1991, p. 6; "NTIA Calls ForTelco Entry Into Cable," Broadcasting,28 October 1991, p. 59.(37) National Association ofBroadcasters, 1989b, p. 10.(38) "NTIA Calls For Telco Entry IntoCable," Broadcasting, 28 October 1991,p. 59.(39) Mason, 11 November 1991, p. 8.(40) Mason, 10 February 1992, p. 11;H. Schlossberg, "Interactive TV ForgesAhead," Marketing News, 28 October 1991,p. 6; "The Condo Approach to TelcoEntry," Broadcasting, 3 February 1992,p. 26; "Telco CEO Urges Joint VenturesWith Cable," Broadcasting, 7 October1991, p. 30.(41) "The Condo Approach to TelcoEntry," Broadcasting, 3 February 1992,p. 26; "Telco CEO Urges Joint VenturesWith Cable," broadcasting, 7 October1991, p. 30.
912
THE CHALLENGE OF TRANSFERRING A STATEOF THE ART TELECOMMUNICATION SYSTEM
MANUFACTURING TECHNOLOGY
GEORGES KREBSALCATEL SUBMARCOM ASIA PACIFIC
SYDNEY, AUSTRALIA
1. ABSTRACT
Design and manufacture of Optical Submarine Cable Transmission Systems involves very advanced
technologies and a small number of competitors worldwide. It was traditionally considered that this
activity would remain restricted to a small number of very advanced nations. Until recently, Japan
was the sole centre involved in such an activity in the Asia-Pacific region. However, with the
installation of a full submarine cable system capability by Alcatel, Australia and New-Zealand have
now established themselves as a second activity centre in the Asia-Pacific region.This paper describes how this technology transfer was planned and implemented and draws some
conclusions from this experience.
2. THE INITIATIVE
The initiative of promoting the concept of a large scaletechnology transfer for submarine cable systems in Australiaand New-Zealand came from the OverseasTelecommunications Commission (OTC) in Australia and theTelecommunications of New-Zealand (TCNZ). This initiativewas based on the requirement to build a high capacity opticalsubmarine cable loop in the South Pacific.
2.1 THE PACRIM PROGRAM
There was a need for a high capacity digital connectionbetween Australia and New-Zealand, and from these countriesto the United States and Japan. Instead of implementing a
series of cables independently, it was decided to construct acomplete loop connecting Australia, New-Zealand. Hawai andGuam. This was one of the early applications of the loopconcept in the field of submarine cables. Since then, thisconcept has experienced a large development.This loop is described in Figure 1.
In total, the PacRim loop represent about 17,200 kilometresof cable and about 140 submerged repeaters (excluding theTranspacific 4 cable segment between Hawai and Guamwhich forms part of a different program). It was consideredby OTC and TCNZ that such a large program could form thebasis for a technology and manufacturing transfer.
2.2 BEYOND THE CONCEPT OF NATIONALCONTENT
There is a prior history of submarine cable manufacturing in
Australia. In the framework of the ANZCAN (Australia,New-Zealand, Canada) cable system construction, repeaters
were assembled in Australia and some local raw materialswere incorporated in cables manufactured in the United-Kingdom. Such local activity continued in the framework ofthe AIS (Australia, Indonesia, Singapore) cable systemconsiniction.This local manufacturing activity remained partial and didnot involve hea y in% eminent,. I t did not survive themassive changes brought forward by the development of thenew optical transmission techtb,logies.From this expeneme, it was apparent that the concept ofnational content needed to he greatly enhanced to embrace acomplete technology transfer. The major challenge was tofind a manuf aLturer willing to implement such a technologytiansler at condthons which would remain competitive.
913
2.3 THE TASMAN 2 TENDER
It was not practical to consider assigning the construction ofthe entire PacRim system to a local manufacturer before thismanufacturer had proven its local capabilities. Therefore itwas decided to issue a procurement Tender for the Tasman 2cable system connecting Australia and New-Zealand as a firstseparate segment of the PacRim loop. This tender was to beadjudicated on technical merit, price competitiveness and
extent of technology transfer. The Tender was issued in 1986at a time when not even a handful of short haul experimentaloptical submarine cable systems were in operation. This veryinnovative and ambitious Tender attracted considerableattention in the submarine cable industry worldwide. At thetime, however, it was hard to predict if the vision put forwardby OTC and TCNZ would actually materialise.
3. THE RESPONSE
Among many others, this Tender drew the attention ofAlcatel. Alcatel experience in submarine cablemanufacturing dated back over one hundred years but thescope of this activity had remained, for the main part, locatedin France and the surrounding waters (Atlantic, North Seaand the Mediterrauean). Alcatel saw in the Tasman 2Tender a strategic opportunity that could not be neglectedand decided to match, as closely as possible, the ambitions ofits promoters.
3.1 THE SYSTEM APPROACH
A submarine cable is not a cable : it is a System. Therefore,it was strongly felt that a technology transfer would not besolid and meaningful if it did not embrace a full systemcapacity. This aspect was considered fundamental for thelong term success of the transfer.Alcatel offered to manufacture cables and submergedrepeaters in Australia and to manufacture land basedTerminal Transmission Equipment (TIM) and Power FeedingEquipment (PFE) in New Zealand. Manufacture of the cablewas to be based, as largely as practical, on locally sourcedmaterials. Because of the very stringent reliabilityrequirements and the high as.ociated costs, components forrepeaters and Terminal Equipment were to be sourcedtogether with those used in the French factories.In addition to the manufacturing facilities, the establishmentof a local engineering and installation capability was alsoplanned. This was planned, not only to increase the level oflocal activity but because the level of interaction betweenmanufacturing, engineering and installation is very high. it
was not considered practical to "remote control' suchactivities from the existing French base.
Figure 1
ASIA
THE PACRIM LOOP(Not to Scale)
JAPAN
HAWAIGUAM TRANSPACIFIC 4 USA
PACRIMWEST PACRIMEAST(2 X 560 Mbit/s) (2 X 560 Mbit/s)7500 Km 7500 Km
AUSTRALIA
Sydney ' TASMAN 2
El PORT OTANY (3 X 560 Mibt/s)LIVERPOOL (cable factory) 2200 km
(cable facto
914
PER HUT(Terminal Equipement factory)
Wellington
NEW ZEALAND
fl
It would have been very dangerous not to establish a stronglocal engineering and project management group because wecould have manufactured perfect cables and perfect repeatersand Terminal Equipment and discover, in the end, that theydid not really fit together.
3.2 BEYOND THE 'LATEST TECHNOLOGY"CONCEPT
The initial idea was to transfer the Alcatel 5280 (280Mbit/sec) technology. At a time when only a very shortsystem based on this Alcatel technology was in the water, thiscould already appear as ambitious.However, it had to be very quickly recognized that this wasnot ambitious enough : transferring the latest technology'would be equivalent to transferring yesterday's technology.What was required was the transfer of tomorrow's technology.Recognizing this fact, Alcatel, OTC and TCNZ agreed totransfer the Alcatel S560 (560 Mbit/sec) technology and a newsmall diameter submarine cable design. It is worth notingthat neither the S560 system nor the small diameter cablehad been yet manufactured in France: the technologies whichwere offered and accepted for transfer were technologies still
under development ! In the traditionally prudent andconservative submarine cable world, such an idea would nothave even been conceivable a few years before. It is not anoverstatement to say that this decision has contributed toshaking this traditional conservatism.
3.3 ESTABLISHEMENT OF A NEW COMPANY
The Tasman 2 System was due for commissioning on 1stNovember 1991. The contract for its implementation was
signed in December 1987. J res than four years wereavailable to manufacture and install a major submarine cablesystem on the basis of a technology which was not yetavailable and in factories which did not exist. To meet such achallenge it was decided to create a new company whichwould concentrate all its effort in the sole implementation ofthis task.This company was established and called 'Tasman CableCompany' which can be abbreviated to 'Alcatel TCC'.The establishment of a separate company to implement thisproject was an effective way to create a team which woulddedicate all its efforts to the timely and successful completionof Tasman 2 and to the successful implementation of thetechnology transfer. A deep sense of responsibility and pridewas required to implement the task as well as an excellentcooperation among all parties involved (factory constructionteams, cable team, repeater team, terminal equipment team,
etc...)The establishment of a company solely dedicated to theconstruction of submarine cable system was innovative andAlcatel TCC was the first company in the world dedicatedonly to submarine cable systems and having a fullmanufacturing capability covering cable, repeaters an
terminal equipment. The company shareholders are AlcatelAustralia, Alcatel Cable (bringing the cable technology), andAlcatel CIT (bringing the system technology).
4. THE IMPLEMENTATION
4.1 TRAINING AND CONSTRUCTION PHASE
As soon as the company was established, recruitment of
adequate personnel started in Australia. New - Zealand,France. the United Kingdom and other countries. Very
quickly, teams were established and sent for long termtraining (about one year) in the French factories.
BEST C""4,1 Ai VII r.iz 915et4b6AJOAC.
In parallel, the cable factory was constructed in a record timeat Port Botany in the suburbs of Sydney (Australia). Thefactory is located next to a deep sea harbour on virginreclaimed land. This has permitted Alcatel TCC to plan andengineer the factory space without having to compromise withhistorical constraints generally related with old factories. Asa consequence, the Port-Botany factory is one of the mostmodem cable factories in the world. Its initial manufacturingcapacity was 3000 kilometres of cable per year. This has beensubsequently increased to 6000 km/year. The machinery usedin the factory is brand new equipment. The TerminalEquipment is manufactured in Upper Hut, next to the City ofWellington (New-Zealand) in the premises of an alreadyexisting Alcatel facility.The Repeaters are manufactured at Liverpool in the suburbsof Sydney (Australia) in the premises of another alreadyexisting Alcatel manufacturing facility. The Repeaters aremanufactured in a clean room which was the only elementleft from the previous repeater assembly activity in Australia.The factory has been expanded to provide office space for atechnical and engineering team as well as for all Departmentsof a well organized company. An R&D laboratory has beenestablished and equipped.
4.2 DIFFICULTIES ENCOUNTERED.
It is obvious that many obstacles and difficulties wereencountered along the way.A first set of predicaments were of technical nature. Itincluded all the usual surprises and problems of adevelopment period. The manufacturing and testingequipment for repeaters and Terminal Equipment had to bedefined (and redefined) gradually as the developments wereprogressing. This did not proceed without unexpectedmodifications and variations.Another type of L.laical complications was related to theselection of raw materials which is very difficult because ofthe manufacturing and long term reliability constraints.
A second set of difficulties was more of a cultural nature :
people from various origins and nationalities had to bebrought together to form a united and structured team.There are more than 30 different nationalities at Alcatel TCC.Also, two rather different cultures had to interact together
an anglo-saxon culture relying more on written instructionsand procedures and a latin culture relying more on individualinitiative and experience.All these difficulties were aggravated by the pressure of timeand the fundamental requirement of meeting the TASMAN 2Ready for Service date.
4.3 ACHIEVEMENTS
The size of the challenge acted as a catalyst and unifyingforce among all people involved and this has permitted thesuccess of the technology transfer. The TASMAN 2 CableSystem was commissioned at the end of January 1992, with adelay not exceeding three months. It has not beencommissioned later than the first 560 Mbit/s submarine cablesystems commissioned elsewhere in the world. The systemhas been working to the date of this article without any majorproblem.In December 1990, Alcatel TCC was awarded the constructionof approximately 3500 kilometres of the PacRimEast Systemlinking New-Zealand to Hawai and the entire 7500 kilometreslong PacRimWest System. The PacRimEast System has beenmanufactured and was being laid when this article waswritten. The construction of PacRimWest is on schedule tomeet the October 1994 Ready for Service date.
(e
As a result of these achievements, Alcatel decided to invokeAlcatel TCC in the construction of the SEA-ME-WE 2submarine cable system linking Singapore to France. AlcatelTCC is currently manufacturing about 2500 kilometres ofcable to be laid in the Indian Ocean from Jakarta (Indonesia)and some Terminal Equipment for the Cable Stations ofJakarta and Colombo (Sri Lanka).The factories now run at their full capacity : 7500 km:)cat for
the cable (far more than was initially expected) and 50Repeaters/year.
5. NEW CHALLENGES
The most stimulating outlook of a technology transfer is thatit always has to be renewed.The rapid emergence of very large capacity optically amplifiedsystem will require the transfer in the near future of a newcable design and of an entirely new type of transmissionsystem.The other challenge to be faced by Alcatel TCC is theexpansion of its activity from an Australian base (PacRim) toan Asia-Pacific base covering the entire region.The manufacture of SEA-ME-WE 2 is the first step in thisdirection but it will need to be followed by many others. Weare confident that this will happen because the size of ourinvestment and the strength of our determination willconvince users in the region that we represent a real, locallybased, alternative in the Asia Pacific.
6. SUMMARY
The establishment in record time of an optical submarinecable system capability in Australasia shows that even themost ambitious technology transfer is possible. As a result ofthis surcPv.sful experience, Alcatel is conducting anothertechnology transfer in the field of submarine cable systemfrom Norway to Greece and is prepared to consider any otherpotential case.
From our experience, however, there are four prerequisiteswhich must be met for the successful implementation and
continuatizm of a complex technology transfer :
. a market
. a long term view (no 'corner cutting')
. a very strong relationship among all parties involved,including the end user(s)
. an absolute determination of all parties.
All the rest is negotiable....
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CALLER ID AND PRIVACY: NEW OPTIONS
Peter B. WhiteLa Trobe University
Bundoora, Victoria, Australia
1. ABSTRACT
The privacy implications of Calling Number Display (CND) or Caller ID and otherintelligent network-based services have been a central concern in regulatory debates. Thispaper argues that a generalised privacy regime, such as the one proposed by theClinton/Gore administration would be in the long term strategic interests oftelecommunications carriers.
2. INTRODUCTION
In the closing stages of the recent United StatesPresidential campaign, Governor Clinton and SenatorGore committed themselves to the development of aConsumer Bill of Rights should they be elected. This Billof Rights would include consumer safety, consumerinformation, the protection of a competitive market placefor products and services, and the right to he heard whengovernment policy is being formulated and whenadministrative decisions are being made. They alsocommitted their incoming administration to the support ofconsumer education (Computer Professionals for SocialResponsibility, November 2, 1992).
But the most significant pledge from atelecommunications perspective, was to support a right toprivacy. According to the Clinton/Gore Consumer Bill ofRights, information provided by consumers for onepurpose could not he used for a separate purpose withoutthe consumer's knowledge and consent.
The initial response of the telecommunications carriers tothis proposal, is likely to he negative. Many carriers havefought, or arc still fighting, long battles with regulatorsand privacy activists over the introduction of new servicessuch as Calling Number Display (CND) or Caller ID as itis popularly known. In these regulatory fora, privacyconcerns have been the central theme of the debate.
In this paper I will argue that appropriately framedprivacy legislation, which is not restricted totelecommunications, is in the hest interests oftelecommunications carriers and their customers. So ratherthan opposing such general purpose privacy legislation.carriers should embrace it. The argument will hepresented in terms of the telecommunications privacydebate underway in the United Suites ar ustralia.
3. THE DIMENSIONS OF TIIETELECOMMUNICATIONS PRIVACY DEBATE
CND, is a telecommunications service which displays thenumber of the caller on a screen attached to the called
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party's telephone. Because the caller's number isdisplayed before the call has been answered, the calledparty has the ability to decide whether or not to answerthe call from that particular number. The caller's numbercan be recorded or directly linked to a personal orcorporate database.
Where calls are made from listed numbers CND takes onadded significance. CND information linked to reversedirectories can be used to rapidly identify the address andowner of the telephone service. This information can becross-linked to other public and private data bases tocreate profiles of callers. CND becomes the first link inthe identification chain. Clearly identification of callerscan lead to harassment, but in extreme situations suchidentification can lead to personal risk on the part of the
CND has been the focus of heated regulatory debate inthe US (White, 1992). Almost all of the discussion hasfocussed on the privacy issues raised by this service.These privacy relate] discussions concern the right ofcallers to make calls which dc not lead to the revelationof their identity or location, and the ability of receivers ofcalls to re-use telephone number information wnich isrevealed by incoming calls.
The regulatory debate about CND is important becauseCND is just one of a range of new services whith takeadvantage of the new capabilities of digital telephoneswitches or exchanges. Transformation of the ways inwhich telephone calls are routed through the networkmeans that Calling Line Identification (CLI) informationwhich was once used for network purposes oiily, such asbilling and routing, is now being used to create a new setof enhanced telephone services.
These Custom Local Area Switching Services (CLASS)include, automatic call return, selective call rejection,distinctive ringing, anonymous call rejection and selectivecall forwarding. Each of these services relies on theexistence of CLI within the network. The softwarecontrolled local telephone exchange can capture, store andprocess the CLI of incoming calls based on the request ofthe called party. CND has been the most controversial
CLASS service because it reveals the telephone numberof the caller to the called party. III
These new services are of real significance to carriersbecause they increase the proportion of completed callsand, in many tariff regimes, carrier revenue. At the sametime, subscription fees for these services provide forrevenue growth for Local Exchange Carriers (LECs).Another attraction for carriers is that tariffs for theseservices are less onerously regulated than the bulk ofother LEC tariffs. While carriers would have invested inswitch upgrades as a means of achieving greaterefficiency, the present and potential revenue implicationsof CLASS services explain why carriers have argued theircases with such vigour.
The regulatory debate about CND has revolved aroundthe following questions:
- Under what circumstances should a caller be able tomake a call which denies the ability of the called party tosee their calling number details if the called partysubscribes to CND? In other words should callers be ableto mask or block CND under any circumstances?
- If masking is possible. what should the default conditionbe? In other words, if callers do nothing more than dial anumber in the ordinary manner, should their CLI beavailable for display, or masked from display. if thecalled party subscribes to CND.
- What charges should be levied against subscribers whowish to withhold their CLI on either a per-call or per-linebasis?
4. REGULATORY RESPONSES IN THE UNITEDSTATES
The brief history of regulatory responses to thesequestions is turbulent and reveals rapid change. Thesignificant changes in regulatory approach can beexplained by growing consumer awareness of the socialissues raised by these services. This has forced regulatorsand telephone companies to acknowledge that the privacyimplications of enhanced telephone services must beconsidered when these services are introduced. Regulatorychange has also been made possible by technclogicaldevelopments which allow for more flexibleimplementation of these enhanced services. For exampleblocking or masking was not possible with earlyimplementations of CND. This is now a standard elementof switching software.
During the first phase of CND implementation in the US.carriers and regulators assumed that the services wereunproblematic for telephone users. This assumption, and alack of interest on the part of consumer advocates,allowed the Federal Communications Commission (FCC)to authorise the delivery of CND-like information tointer-state toll free 800 numbers in the U.S. This CNDinformation can not be masked or blocked by callers, and
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the existence of this facility vas unknown to almost allStX1 line callers. Abuse of this CND-derived informationthrough the selling of lists comaining the telephonenumbers and other personal information relating toindividuals who have called these numbers has led to theintroduction of legislation which would severely limitwhat could he done with that information without theexplicit consent of the caller.
Soon after, New Jersey regulators authorised the offeringof unmaskable CND. That service is still being offered inthat way. Other States have introduced CND with onlyper-line masking available to individuals andorganisations who could he placed at risk by thedisclosure of their telephone number.
In recent months. regulatory stances have shifted. BothNew York and California have authorised the introductionof CND on the condition that all subscribers have accessto either free or low cost per-call or per-line masking, andthat subscribers with unlisted numbers are given per-linemasking unless they choose otherwise. In other wordsthere is unrestricted access to line masking. Excepting forsilent line subscribers, subscribers who did not elect tohave line masking would have per-call masking as thedefault for their service.
This means that in the United Stated CND regulatoryregimes include:
a) No block.b) No block with line block to "at risk" groups only.c) Per-call block with line block to "at risk" groups.d) Per-call block/unblock, unrestricted line block, withper-call block as the default unless requested otherwise.
Most new offerings of CND in the US now involveOption c). This entails free per-call blocking which resultsin less than 1% of calls being blocked(TELECOMMUNICATIONS REPORTS, November 4,1991). One US industry view is that offering minorvariations of Option c) has allowed the service to becomenon-controversial. As a trade newsletter comments.
...after two years on the market, the oncecontroversial Caller ID ser. ice, now gets no morethan routine attention from state regulators whowere once concerned that the service raised far-reaching privacy issues. Per-call blocking hasapparently defused the issue that ir.itiallythreatened to stall the technology.."(TELEPHONE NEWS, August 10. 1992)
But the situation is probably still fluid. Some of the largerStates with more active consumer advocates such as NewYork, California and Ohio have proposed Option d).Pacifi.: Bell has declined to offer CND service on thoseterms and is seeking a rule change with the regulator. Onthe other hand, Nynex in New York and Cincinatti Bell inOhio are proceeding under Option d) regimes (AINREPORT, September 2. 1992; TELEPHONE WEEK,August 31. 1992).
As a result of carrier/regulator negotiations it is possiblethat variations of Option c) and d) combined withsupervised customer education campaigns will emerge asthe new standard in the United States. This is despite thefact that regulatory regimes which provide ready access toline masking have been opposed by some carriers on thegrounds that liberal access to line masking reduces thepossibility that CND will he available to callers, and, as aconsequence, the commercial viability of the CND will hereduced. And in California, two of the carriers have askedthe regulator to reconsider their ruling on ready access toline masking.
5. AUSTRALIAN REGULATORY PROPOSALS
Austel, the Australian telecommunications regulator hasissued a Draft Report on Telecommunications Privacywhich recommends that a "telecommunications specific"privacy regime be developed, and that CND be offeredwith free and unrestricted access to both per-line and per-call masking (Australian Telecommunications Authority,1992). Following the schema introduced earlier, thiswould be described as Option e)
e) Per-call block/unblock, unrestricted line block, withline block as the default unless requested otherwise.
Before introducing the service, the carriers must conductan approved educational campaign and conduct a ballot ofall customers asking whether they wish to have per-linemasking or per-line blocking as their default. Forcustomers who do not respond to the ballot, Austelproposes that they should be given per-line masking as adefault. This is in line with a proposal made bySamarajiva (1992:49). Austel's reasoning is that iftelephone subscribers do not respond to the ballot, theyare probably unlikely to understand the implications ofrevealing their number to other subscribers who subscribeto CND. Austel argues that if the CND service is asdesirable as its proponents claim, subscribers will opt forper-call masking.
Austel has taken a position which allows for easy accessto per-line masking and a presumption that per-linemasking should prevail for those who make no choice. Inthe language of US regulators, they have chosen"presumptive line masking". What is the underlyingrationale, and what are the social implications of theregime which Austel is proposing?
The regulatory regime which Austel has endorsed hadbeen proposed by a number of consumer organisationsand one reading of the proposed decision would see it asa victory for consumers. But the question, which must heraised is which group of telephone users is likely tobene lit?
II' previous telephone-related consumer behaviour t.. anyindication, there is every reason to expect a low returnrate if a ballot of Australian telephone subscribers was tohe conducted. 121 This would result in the status quo
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prevailing. In other words, per-line masking would be thedefault for the bulk of subscribers. Most calls wouldhave CND masked.
Under this regulatory regime there would be littleincentive for anyone to subscribe to CND if most callsbeing made did not reveal CND. Of course some businessand private subscribers would notify their regulartelephone callers that CND was in operation, and that therevelation of their CND would result in some kind ofpreferential treatment for their calls. For example, airlinecompanies might be able to process incoming reservationrequests more quickly, and private subscribers might useCND as a way of screening incoming calls. And othergroups of individuals or even family members couldarrange to use CND as a way of alerting them to theexistence of an incoming call from a member of thefamily or the group. Other subscribers who were "privacyaware" could either subscribe to the network-basedAnonymous Call Rejection (ACR) service which notifiedthe caller that masked calls were not accepted, or add thatfacility to their personal telephone.[3] But apart frompockets of use, for the bulk of calls, CND would bemasked and unavailable to receivers of calls.
In essence Austel has proposed a regulatory regime whichis designed to protect telephone callers. The regime isensures that them is little likelihood of a caller'stelephone number being revealed without the callermaking a conscious decision. But in protecting the caller,it is important to consider the implications of thatprotection for the called party.
Is this predominantly "caller perspective" in the bestinterests of all telephone users? In its decision on CND(Caller ID as it is named in the U.S.) the New YorkPublic Service Commission (PSC) argued that
"...Caller ID presents not an issue of good or evil,but a clash of two goods; the privacy rights ofcallers (which include, for example, the right toconceal their phone numbers from telemarketers,but not the right to harass with anonymity) andthe privacy rights of call recipients (whichinclude, for example, the right to be left alone huinot the right to spy on a spouse). Seen in thatlight, the blocking issue should be resolved in away that offers each custe.ner the greatestopportunity to advance his or her own interestswithout unduly compromising the interests ofothers." (State of New York, Public ServiceCommission, 1992:28)
But does the Austel proposal "offer each customer thegreatest opportunity to advance his or her own interestswithout unduly compromising the interests of others"?One reading of Austel's draft decision is that it placesgreater emphasis on the anonymity of the caller, and acorrespondingly lesser emphasis on the needs of calledparties to use CND for call management purposes, and asa solution to problems raised by telephone intrusion.
)
It is clear that callers should have the right to mask theirCND in circumstances which they choose. And it is alsoclear that it is in the interests of those who are called tohave the identity of callers revealed under certaincircumstances.
How then should the issue be resolved? Them seem to heat least three generic approaches. The first would he toaccept Austel's recommendation for default masking, andthen promote Anonymous Call Rejection (ACR) as a wayfor people who are "privacy sensitive" to encourageothers to unmask their CND when they are calling them.(This facility would not have to he offered by the carriersbecause customer premises equipment manufacturers offerthis facility as a simple, inexpensive "add on" to domesticCND equipment.) Such a solution increases the power ofthe called party, but may not be optimal because it couldconfuse callers and unnecessarily congest the network.
Another solution would be to promote the defaultunmasking of CND by telephone callers through anextensive educational campaign. In fact the New YorkPublic Service Commission placed great store in the valueof an educational campaign as an argument against"presumptive line blocking". They state that:
... presumptive per-line blocking is important onlyif one assumes, with the Consumer ProtectionBoard and the Department of Law, that educationwill be ineffective and customers wanting orneeding blocking cannot be counted on to electper-line blocking if that better suits their needs.That assumption is unwarranted, however, and weshall require an effective education program.Since the need for presumptive line-blocking hasnot been established and the option may wellhave the capacity to undermine the Caller IDoffering, a fair balancing of the interests suggeststhat it should not be selected." (State of NewYork, Public Service Commission, 1992:30)
But there is a third approach which would result inbenefits for both carriers and consumers. This is thepromotion of a generalised privacy regime which is notspecifically tied to telecommunications. It is the kind ofprivacy regime being promised by the incomingClinton/Gore administration. The benefits of this approachto telecommunications carriers and users will be outlinedin the next section.
6. THE BENEFITS OF A GENERALISED PRIVACYREGIME.
Reducing the possibility of a caller inadvertentlyrevealing their telephone number is one way of protectingthe rights of the caller. But limiting the ways in whichthat revealed telephone number can be used by the calledparty is another technique for protecting the caller. Putsimply, a telecommunications privacy regime which limitsthe use or re-use of CND derived information without the
920
explicit consent of the caller, could overcome many of theproblems which can arise from the disclosure of CND.
Experience in the United States suggests that the reuse ofCND (or ANT) derived information without the awarenessor permission of telephone callers is the major problemwhich has arisen from this service. Inbound telemarketingusing 8(X) timbers allows for the capture and reuse ofCND-ANT information and the linking of that telephonenumber ir.'"ormation to consumer interests, and name andaddress information. At some later time this informationcan be cross-linked to other information held in privateand public data banks. So a simple response to an 800number in search of consumer information, or for thepurchase of goods or services can become the first link ina chain of transactions leading to unwanted solicitationfor goods and services. 141
So what could he the benefits of a generalised privacyregime which places consumers in control of personalinformation generated by their telephone transactions?
- CND is essentially a form of transaction generatedinformation (TGI). Many other forms of TGI are beinggenerated through activities such as the use ofsupermarket discount cards, mail order transactions,ordinary credit card use, and real estate transactions, toname just a few. Many of these activities are unregulated,or at most subject to self-regulatory codes. As aconsequence it is in the interests of thetelecommunications industry to ensure thattelecommunications privacy regimes do not disadvantagethat industry by placing restrictions on the use oftelecommunications derived TGI while other transactiondata remains unregulated. For example mailing listscreated by mail order transactions remain unregulated.while a telecommunications-specific privacy regime couldrestrict the secondary use of information. A generalisedprivacy regime which covers TGI would place all TGI-based industries on an equal footing.
- As the Universal Personal Telecommunications Number(UPTN) initiatives mature, telecommunications carrierswill be able to move into a range of new activities. In thepast, some of these have been associated with the bankingindustry. With individuals having a UPTN and associatedsecurity and verification arrangements,telecommunications carriers will be able to developservices which encompass the whole chain of consumertransactions from order taking, customer verification,credit assessment and billing.151 For these kinds ofactivities to occur, carriers need to be able to assure theircustomers that there arc adequate privacy protectionschemes in place. And in a potentially competitivemarket, carriers will also need to ensure that they are notdisadvantaged by telecommunication-specific privacyregimes. Again, a generalised privacy scheme is to hedesired.
Regulation often develops as a result of a specific wellpublicised instance or abuse. (Take for example the
regulation of video rental records and cable televisionsubscriber records in the United States which wereresponses to misuse of information relating to a publicfigure.) This ad hoc regulation might appear to solve aspecific problem, but more often than not, it does notaddress the wider issues. It is only a matter of time befc,rea paradigmatic Caller ID abuse case emerges in themedia. This will lead for calls for more stringenttelecommunications-specific privacy regulation. Again, ageneralised privacy regime would make such regulationunnecessary.
Ruggles (forthcoming) presents a cogent case forpersonal data protection based on the ways in whichindividuals define and protect their personal boundaries.Privacy protection could become a competitive issuegiven increasing competition at the local exchange level.As a consequence carriers will need to assure theircustomers that their privacy expectations are not beingviolated.
- Proposals currently being considered within theEuropean Community would restrict the transfer ofpersonal data across international boundaries if dataprotection and privacy regimes were not in place. If theseproposals are enacted it would severely restrictcommunication and trade with jurisdictions where dataand privacy protection was inadequate.
7. CONCLUSIONS
Privacy protection can he seen as a strategic issue fortelecommunications carriers. It has the possibility ofimpinging on consumer relations, the development oftelecommunications transaction-based businesses, thedevelopment of strategic business opportunities, and onthe ability of companies to transact business with theEuropean Economic Community. As a consequence, thedevelopment of a generalised privacy regimes in theUnited States and Australia would he in the interests oftelecommunications carriers.
REFERENCES
Australian Telecommunications Authority. PrivacyInquiry: Draft Report, Melbourne, 1992.
Flaherty, David. Telecommunications Privacy: A report tothe Canadian Radio-Television and TelecommunicationsCommission. May, 1992. (mimeo)
Computer Professionals for Social Responsibility Release,November 2. 1992 "Excerpts from Clinton/GoreCampaign Pledges Strong Consumer Protections; BlastsBush/Quayle Record - (k:t. 26".
Ruggles, Myles. "Mixed Signals: Personal data controland the intelligent network". Media Information Australia.(forthcoming).
Samarajiva, Rohan. "The Intelligent Network:Implications for Expression. Privacy and Competition" in
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Bill Melody (ed.) The Intelligent TelecommunicationsNetwork: Privacy and Policy Implications of Calling LineIdentification and Emerging Information Services,(Proceedings of a CIRCIT conference, December 3,1991), CIRCIT, Melbourne, January 1992.
State of New York, Public Service Commission, Case 91-C -0428 Proceeding on the Motion to Investigate NewYork Telephone Company's Proposal to Institute CallerID Service. April 9, 1992.
White, Peter B. "Your Number, Please?" Calling LineIdentification and Calling Number Display in Australia:An issues paper, (CIRCIT Policy Research Paper No. 20),CIRCIT, Melbourne, 1992.
NOTES
I. Most of the other CLASS services process calls frompre-determined numbers in ways which have been pre-specified by the called party. These services do not revealthe number of the caller to the called party. But it shouldbe noted that certain configurations of Automatic CallReturn (ACR) also raise the same issues as CND.
2. Experience with balloting for a long distance carrier inthe early stages of competitive long distance carriage inthe US, and in the Australian experience when TelecomAustralia's first phone monopoly was removed, resultedin no action on the majority of subscribers, and a defaultmaintenance of the status quo.
3. Anonymous Call Rejection only allows calls whichhave CND attached to be received by the called party.Calls with CND masked are routed to a recorded messagewhich adviser the caller that masked calls are notaccepted anri diat the call should be made again with CLIunmasked.
4. It should be noted that the use of 800 numbers is notrestricted to the telmarketing of goods and services.Candidates in the 1992 United States Presidentialcampaign used 800 numbers, and ANI derivedinformation as a means of developing lists of potentialcampaign contributors, and as a means of generatingpolitical support. The advertising, chanting andpresentation of 800 numbers became an integral part ofthe campaign.
5. A variation on this proposal is made by Samarajiva(1992;52). In an argument which supports default linemasking. he proposes that carriers could positionthemselves as an "authenticator" information.
SOFTWARE PATENTS_ OWNERSHIP ANDINFRINGEMENT CRIMES; NEW DEVELOPMENTS
By Stephen Glazier'
Abstract
Most advances in telecommunications are eitherhardware/software hybrids, or pure software inventions.Software can now be patented in the U.S. Softwareinfringement can now be a crime, and corporate officersand directors can be personally liable for triple damagesand jail sentences; however, steps can be taken withindependent patent counsel to insulate from suchpersonal liablity. Ownership of patents is slippery andcan be easily lost.
Many of the new advances in telecommunicationstechnology are software inventions, orsoftware/hardware hybrid inventions.
In the U.S., software can be both patented andcopyrighted. (See In Re Iwahashi. and Arrhythmiav.Corazonix, below.) Do both if possible.
Infringement of software copyrights in the U.S.can be a federal and state crime. (See 18 USC 2319and §31.05(a)(4) Texas Penal Code.) Employees ofinfringing companies, including officers and directors,can be liable for prison sentences. (See Schalk v.Texas, Tex. Ct. Crim. App., 2 October 1991.)
Willful infringement of patents (for hardware andsoftware) can make an infringer liable for tripledamages. (35 USC 284) Officers and directors ofinfringer corporations can be personally liable for thesetriple damages, even if they did not personally infringe,and did not know of the infringement, and even if theywere advised by in-house counsel that infringement didnot exist. Data Products v. Reppart, (U.S. Dist. Kan.,29 November 1990, Lexis 16330) and 3M Corp. v.Johnson and Johnson. Inc. (CAFC, 30 September 1992),
USPQ2d .
Independent patent counsel can often act with acorporation to insulate its officers and directors frompossible personal liability for payment of triple damagesand jail sentences for corporate infringement. Theseprophylactic steps, when available, should be taken assoon as possible; but the vary with each specific caseand should be discussed in confidence with independentcounsel.
Stephen Glazier practices law at Reid & Priest inWashington, D.C. He specializes in patents,copyrights, trade secrets, and business transactions intechnology. He can be contacted at: 202-508-4334.
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There is further good news regarding this
personal liability for corporate civil and criminalinfringement. By making infringement more dangerous,these developments make patents and copyrights morevaluable for their proper owners.
It is easy to lose ownership to patents andcopyrights, especially software patents. Use writtencontracts giving the corporation ownership of allinnovations by employees, consultants and partners.(See Community v. Reid below.) Use writtenconfidentiality agreements with all business associates.Otherwise, ownership of your technology may end up inthe hands of your employees, not your corporation.
Record written assignments to the corporation forall patents and copyrights. Record them in the PatentOffice and Copyright Office. (See 18 USC 261.)
Implement a confidentiality program for all yourtrade secrets, or else you may lose ownership to them.
It is not clear how to create a lien on intellectualproperty in the U.S. Follow a dual track, using boththe UCC (state law) and federal filing. (See 18 USC261.)
Title searches for intellectual property in theU.S. cannot be reliable because of deficiencies in thestatutes. Proceed with great care when reviewing theownership of patents and copyrights in a mergersituation.
There are many proposals before Congress tofurther change the U.S. patent laws. This is part of ageneral trend to make patents and copyrights morevaluable and enforceable for all. U.S. patent law willbecome more like patent law in the rest of the world,and foreigners will be treated more equally with U.S.citizens regarding patent applications and infringement.However, these changes in U.S. law must be watchedclosely, because they will change the proper procedurefor protecting intellectual property rights.
I. The New Rules in Software Patents
The coming advances in software/hardwarehybrid patents in telecommunications can be seen inmany areas. One example is the recent discovery ofhow high quality real time audio/visual signals can besent over conventional coppt phone wire. This allowsfull bandwidth video signals to be sent straight to theconsumers home over existing phone wires, without re-wiring the pilule grid. Also, the FCC has recentlyallowed the phone companies to provide this service andcompete with the cable television companies. A race isnow on to combine this function with other existingphone hardware and services, such as push buttonphones. 900 numbers, faxes, televisions, and home PC'sto create new profitable businesses. These innovationswill then be protected by patents for new software
inventions that tie together conventional hardware andoperate the new hybrid in new ways. (In fact, thiswriter is currently working on a pending patentapplication to provide video on demand on an automatedbasis, over existing telephone lines.) Similar frontiersrecently opened in mobil nhoncs, interactivecommunications, home shopping, airbornecommunications, and automated switching control.
It is well known that patents are available fordevices. It is less commonly understood that processesmay be patented, including computer processes (that is,software programs and algorithms). Additionally,patentable devices may include traditional equipmentimproved by incorporating new computer controls ormicro-processor chips. Indeed, recent legaldevelopments clarify that pure software patents andhardware/software hybrid patents are available andenforceable, and that patents (where obtainable) aresuperior to copyright protection for software andhardware/software combinations.
Many of these patents claim and patent, at themacro-flow chart level, software algorithms used byspecific programs for specit:c computer applications,sometimes in association with known hardwareelements.
Patent applications of this class of technology atthe U.S. Patent Office have been growing at about 30%per year for the last four years.
U.S. and Foreign Patents
The U.S. patent statutes specify that a new anduseful invention may receive a patent, if it is notobvious, if it has not been sold or publicly disclosedmore than a year before an application is made in theUnited States, and if a patent application is properlydrafted and prosecuted. A U.S. patent, once issued,gives the patent holder an absolute monopoly in thiscountry to prevent others from making, using andselling the invention for a period of seventeen years.Licensees, if sold a license from the patent holder, mayuse the invention if they satisfy the license requirements,including payment of royalties.
Foreign patents may also be applied for in mostdeveloped countries. Note here one commonmisconception. Upon public use or publication, aninventor has a one year grace period to file a U.S.application before he loses his patent rights. However,this grace period does not apply to applications inforeign countries. (In addition, treaties undernegotiation may abolish the U.S. grace period.) Hence,new developments should be kept confidential until aU.S. patent application is filed, or else the option offoreign patents may be lost.
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The Old Law of Software Patents
For a long time it was thought to be an openlegal question whether pure software inventions, andhardware/software inventions, were patentable. Untilrecently, patent law in the United States was unclear onthis issue, but tended to be negative. Traditional legalprinciples state that mental processes, mathematicalalgorithms, and methods of doing business were notpatentable. With the development of sophisticatedcomputer software, it was thought by many that thesetraditional principles prevented the patenting of puresoftware inventions. Further inhibiting softwarepatenting was the fact that prior to 1983, about 75% ofall patents that were attempted to be enforced in thefederal courts were ruled to be invalid and the courtsrefused to enforce them.
However, in 1983, the new Federal Circuit Courtof Appeals was created with exclusive jurisdictioi. overpatent appeals cases. This court was created to be pro-patent and began enforcing the majority of patentsbrought before it. The court tremendously strengthenedthe legal presumption that all patents issued by the U.S.Patent Office are valid. Furthermore, various legalcases have developed over the last ten years to make itclear that computer inventions, even pure softwareinventions, can be patentable and enforceable. Thesecomputer and software inventions only have to meet theconventional requirements for patents of being new,useful, non-obvious, and without prior use orpublication.
The old legal confusion as to software patentswas found in Gottschalk v. Benson, 409 U.S. 63 (1972).This case took the naive view that computer software isnothing much more than a complicated calculator andruled that a computer process in a patent did little morethan manipulate numbers. As such, the computerprocess would only preempt a mathematical algorithm,and therefore was not patentable. However, the caserefused to rule whether or not all computer programswere unpatentable.
Things got better in Parker v. Flook, 437 U.S.584 (1978), by a more sophisticated Court. Here, apure mathematical formula was not allowed to bepdtented, where no physical activity took place in theprocess and where computers and computerization werenot part of the claims. In rejecting these claims of apure mathematics patent without computerization, theCourt did say that new and useful computer programsmay be patentable. The Court reiterated an oldprinciple, though, that an invention that uses amathematical algorithm can not be considered new (andhence patentable) if the only new part of the inventionis the new mathematics.
Things got even better in Diamond v. Diehr, 450U.S. 175 (1981), when the Court strictly limited
n ,1
Gottschalk. This case seemed to move away from theGottschalk holding in several respects. First, itacknowledged that computers and software have afunction in various industrial processes that is unrelatedto mere mathematical calculation. Specifically, this caseupheld a patent for an industrial process incorporatingcomputers and computer software even though one ofthe steps in the patented process recited a particularmathematical algorithm. The old anti-software problemabout "thou shalt not patent mathematics" had beeneroded. However, this case dealt with a computersoftware application incorporated within a physicalprocess for curing rubber. The case did not commenton pure computer prcgramming or data processingpatents that did not physically alter matter, although theCourt did say that the Patent Act applied to "anythingunder the sun that is made by man." However, withthis case, the lower courts went forward with the newpro-patent direction of the law.
The New pro-Software Patent Law
In a case in the Court of Customs and PatentAppeals (the predecessor to the Federal Circuit), In RePardo, 684 F.2d 912, 214 USPQ 673 (CCPA 1982), thecourt ruled that pure programming technique waspatentable, in this case an algorithm for a computercompiler. The court stated that there is a differencebetween a mathematical algorithm (which is a mentalprocess) and a computer algorithm (which is notsomething that can be performed by the mind). Thisfollows earlier hints from Application of Knowlton, 481F.2d 1357 (CCPA 1973). This case dealt with afundamental patent for the programming techniques ofrelational data bases. Although this case focused on thequestion of what constituted an adequate description ofsoftware for patent purposes, it refused to be offendedby the concept that pure software was patentable.
This trend was carried further by Paine Webberv. Merrill Lynch, 564 F. Supp. 1358 (D. Del. 1983).In this case, the court upheld a pure software patent forthe Merrill Lynch CMA account, which case favorablycited the Pardo, Gjttschalk, and Diehr cases. In PaineWebber, the court stated that although business methodsare not patentable (and hence the CMA account is notpatentable), the patent in question merely patented acomputerization of a business method, not the businessmethod itself. Therefore, the patent was upheld. Thiswas a pure software patent to implement a businessmethod where the method could not itself be patented.The case is a major step forward for softwarepatentability. The court was unconcerned that as apractical matter, no mass market brokerage account,such as the CMA account, can today be offered andserviced without a computerized system. Hence, theypermitted a software patent that as a practical matter,wholly preempted the business method that was notpatentable. The court felt comfortable in taking thisstep despite the fact that in Gottschalk, the Courtseemed to imply that merely computerizing a
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mathematical algorithm (in a way that wholly preemptedthe mathematical algorithm) would not be patentable.
Software Patents Without Source Code
Various court cases pursue the interpretation thatdisclosure of source code is usually not required insoftware patents. In Re Ghiron, 442 F.2d 985, (CCPA1971) indicates that flowcharts rather than source codeare satisfactory in software patents. The patentapplication should explain each box and arrow of theflowchart and the hardware platform required to executethe program. Ghiron states that enablement should beprovided to the expert reader by the patent with only areasonable degree of routine experimentation. It is ourjudgment that normal debugging usually is permitted asroutine experimentation, and hence debugged sourcecode need not be provided. Obtaining a software patentwithout disclosing source code may be like having yourcake while eating it too. Where the bulk of softwaredevelopment costs may lay in coding and debuggingsource code, one may often earn a software patentmonopoly without worrying about the possibility ofgiving an unscrupulous, but underfinanced, infringer hissource code through the patent itself.
Knowlton dealt with a software patent that didcontain a few lines of key sections of source code.However, the judges reacted rather negatively to that,pointing out that the statute requires "concise" patentsand that they prefer to deal with just flowcharts and notsource code.
Hirschfeld v. Banner, 462 F. Supp. 135, (DCDC1978) made it clear that a patent claim cannot recite aprogram without describing the program in somemanner in the patent. But there was no indication thatsource code was required in the patent.
1990 Patent Cases
The case law is continuing to develop on a dailybasis to further elaborate important questions regardinghow to best patent software. In particular, cases aredeveloping to further support the patentability ofsoftware and clarify the level of detail of disclosurerequired in a software patent.
In general in a patent, the invention must bedescribed in adequate detail to permit the expert readerto implement the software invention in its best versionknown at the time of the patent. Northern Telecom,Inc. v. Data Point Corporation, 908 F.2d 931, 15USPQ2d 1311 (CAFC 1990) indicates that the amountof required detail of disclosure of the software dependson the difficulty of the software. Hence, the amount ofrequired disclosure is a judgment call on the part of thepatent attorney drafting the software patent. For thisreason, the patent attorney should be knowledgeable insoftware and computer patent applications to make thesejudgments. It is our judgment that it is usually not
required to disclose source code for an adequatesoftware patent, provided that the inventive feature ofthe patent is adequately disclosed at the flowchart level.(However, if the software owner sees no competitivedownside, it may help the patent to include the sourcecode.)
The patentability of software was furthersupported by In Re Iwahashi, 888 F.2d 1370, 12USPQ2d 1980 (Fed. Cir. 1989) . The patent in thiscase covered a computer program that calculated acoefficient pursuant to a mathematical formula andstored the answer in memory. This is the type of"calculator" program that might be most susceptible toattack as merely preempting a mathematical formula.However, the court saw this as no problem and upheldthe patent. The court reasoned that a mathematicalformula was not preempted, and instead a device waspatented. This was because the claims included the solephysical element of computer memory and the step ofstoring the results of the calculation in memory.Obviously, this requirement for a mathematical softwarepatent is no barrier to even the most mathematicalprogram; the sophisticated patent lawyer must vimplyinclude in the patent application this step of storing theanswer in memory. This surely is done by any programin any case, and would not represent a practicallimitation on the invention. Since this case almosteliminates, as a practical matter, any subject matterbarrier to mathematical software patents (if verycarefully drafted), the easier case of the non-mathematical software patent remains even more secure.
In a contemporaneous case by the same court, InRe Grams, 888 F.2d 835, 12 USPQ2d 1824 (Fed. Cir.1989), the bounds of a computerized mathematicalalgorithm patent are set. In this case, the court denieda patent where a mathematical algorithm was merelycomputerized. The only physical step in this patent wascollecting data generally to feed the algorithm, and nospecial or detailed data collection steps were claimed.Hence Grams tells us that data collection and calculationis not quite enough, but Iwahashi tells us that calculationand recording the answer in memory is enough, for themerely mathematical program.
1992 Patent Case
Arrhythmia Research Technology, Inc. v.Corazonix Corp., 22 USPQ2d 1033 (CAFC, March 12,1992), carefully tracks the evolution of software patentlaw from Gottschalk forward. In Arrhythmia, the courtreviewed an issued patent for a software algorithm foranalyzing electro-cardiographic signals to predict heartattacks. The court held that this is patentable subjectmatter, overturning a lower court decision to thecontrary. The court felt that this was in the mainstreamof the trerd csf the ....seF on point, and the concurringopinion expressly noted the limitation on the anti-software orientation of Gottschalk.
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1990 Copyright and Software Cases
Two cases developed in 1990 indicating theimportance of proper contractual provisions dealing withcopyright law for software products.
Gershwind v. Garrick, 16 USPQ2d 1707 (D.C.,SDNY, 1990), held that a consultant hired to producecertain computer graphic animation for a producer, inthe absence of contractual provisions to the contrary,was the owner or joint owner of the resulting computerproduct. As such the owner/consultant could proceed touse the product without permission or payment to hisclient, in the absence of provisions in his consultingagreement to the contrary. Fmdter, Community forCreative Non-Violence v. Reid, 109 S.Ct. 2166 (1988)indicated that such contract provisions must be verycarefully drafted in order to be effective (that is, only awritten assignment of all rights may be effective, ifotherwise enforceable).
Copyright protection and patent protection can besimultaneously obtained for a software invention.However, in most ways, patent protection whenavailable, is superior to copyright protection forsoftware. Copyright originates as a program is writtenand belongs to the writer, and lasts for the life of theauthor plus 50 years. Registration is not required forcopyright, but is beneficial. Copyright protects onlyagainst copying of the protected source code, screendisplay, and command sequence, but not against reverseengineering of the product. Novelty is not needed forcopyright. However, patents protect against reverseengineering regardless of what source code is used, andhence can be much broader. Note, though, that patentrights arise only upon application and grant by thePatent Office, after review of points such as novelty,prior art, obviousness and adequate disclosure.
Thi.: emphasizes the need to specify explicitly theownership of any computer software that may begenerated through a consultant, employment or supplyagreement. This is true even where the employerprovided detailed specifications for the computerproduct, as was the case in Gershwind.
In Lasercomb America. Inc. v. Reynolds, 911F.2d 970 (CA 4, 1990) it was held that d programmer'scopyright to his program was invalidated due toprohibited anti-competitive clauses in a subsequentlicense agreement for the software that constitutedcopyright misuse. An analogous danger would lie in alicense agreement with prohibited anti-competitiveclauses regarding a software or software/hardwarepatent. This emphasizes the need to properly draft alicense regarding patents or copyrights in the softwareor computer area since one possible penalty forprohibited provisions would be a punitive destruction ofthe entire patent or copyright property. This loss ofrights would not run merely to the licensees, but would
(".
also return all the subject rights to the public domain forthe use of all.
Lotus and the Failure of Software Copyright
Note that a software patent, once issued, protectsagainst "reverse engineering"by a competitor whodevelops independently written source code. This isprotection that a mere copyright of software will notprovide. As discussed below, mere copyright does littleother than protect against copying of the literal sourcecode.
The recent case Lotus Development Corp. v.Paperback Software Publishing, 15 USPQ2d (D.C. !,`,,iss1990), indicates the prevailing inadequacy of merecopyright protected software without patent protection.In this case, Lotus had no patent protection for itsspreadsheet Program. (Indeed, none of the originalspreadsheet companies obtained such a patent, to theirgreat detriment.) Lotus sued Paperback software forinfringement of copyright only. The very sympatheticcourt cut new ground in extending the copyright ofsoftware in a patent-like direction. It found thatPaperback software's V.P. planner had copied thestructure, sequence and organizatior of the Lotus menucommand system, including the choice of commandterms, the structure and order of those terms, thepresentation on the screen, and certain long prompts.The court found that this was a copyrightable non-literalelement of the computer program, and that Paperbackhad comraitted nonliteral copyright infringement ofLotus 1-2-3. Although Paperback did not copy theactual source code of Lotus, Paperback had reverseengineered Lotus 1-2-3's function to the user withindependently developed source code. After this case,however, anyone presumably remains free to developand sell spreadsheet programs as long as they usedifferent command structures and presentations on thescreen. Hence, Lotus 1-2-3, rather than having a 17year patent monopoly on the entire spreadsheet marketwith a basic patent on the concept of the computerizedspreadsheet, instead merely has a copyright on thecommand structure and appearance of 1-2-3.Presumably, if Paperback merely changed the commandstructure by the use of synonyms (for example,replacing "delete" with "erase" or "replace") then theywould be free to continue selling a spreadsheet program.
Legal Uncertainty. Defensive Patenting andInfringement Searches
Software patent law and business practice isdeveloping rapidly. It must be watched for furtherdevelopments regarding unclear issues. For example,the U.S. Supreme Court has yet to rule on a Pardo typecase and clearly state that a computer algorithm isdistinct from a mathematical algorithm and is patentable.Furthermore, the law remains unclear on how to createvalid liens and security interests in patents, and thisissue could be decided at any time.
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hie upshot of enforceable software patents isthat the major players in the computer industry arerushing to obtain software patents on their current (andpast) work. These patents are then used to inhibitcompetitors, or as sources of royalty income, or toexchange for other patent rights.
This rush to patent takes place in a regulatoryenvironment in which the majority of patent applicationsthat are filed are being granted in some form by thePatent Office. As a result, in some computer fields aprofusion cf overlapping and redundant patents mayhave been incorrectly granted to different conflictingparties. The result of this may be that in some of thesefields, until the situation is sorted out, software patentsmay be of less interest for offensive purposes, but usefulfor defensive purposes for any company wanting to beactive in the software or software/hardware market.That is, in an area where overlapping patents are beingincorrectly issued, it is of some use to maintain aproduct in the marketplace to have at least a narrowpatent covering the product.
This situation puts additional importance on theneed :o do a patent infringement search prior to bringinga software product to market, to assess the risk ofinfringing on an existing patent of a competitor. (Sucha patent infringement search should be accompaniedwhen possible by an opinion of counsel regarding non-infringement, to reduce the possibilities of a judgmentfor triple damages for knowing infringement.)
The bottom line conclusions from thesedevelopments are several: Increasingly a portfolio ofsoftware and software/ hardware patent assets willbecome an important part of the assets of technologycompanies and can be made a profit center through anactive licensing program. Furthermore, wheresubstantial sums of money have been spent to developsoftware or hardware with software, an additional costin the order of $10,000.00 to obtain a patent may addexcellent marginal returns by reducing competition, byincreasing revenues from licensing, and by providingchips to trade for other patent rights. A well draftedpatent by a patent attorney knowledgeable in softwareand computer patent applications can be a profitablecash flowing asset and effective protection for lucrativesoftware and hardware products.
II. Who Really Owns "Your" Software: NewDevelopments
Even though a company may have conceptualizedits software, written the specifications for it, and paidthe programmers to write it and debug it, that companymay not own "its" software. The software may be theproperty of the programmers. This is most likely thecase if independent consultants were used to write thesource code and no written contract with them was used.
t:
Or to put it another way, if a programmer orsoftware consulting company has written a lot ofsoftware for clients without written contracts, then thatconsulting company may be the owner of a large libraryof software assets (which it may have thought belongedto its various clients) and which may be protectable bycopyright and patent laws.
Ownership of software written by employees orconsultants can be controlled by properly draftedcontracts. However, if contracts were omitted or draftedusing old language (and not reflecting recent changes inthe federal statutes), then the resulting ownership of thesoftware may not be as intended by the parties that paidfor the development of the source code.
The legal concepts behind this situation can besummarized simply enough, but are not generallyunderstood. Potential legal rights in software cansimultaneously include copyrights and patents.Copyrights are automatically created in any written workat the time of creation, and can be registered if desired.A patent to an invention may be issued to the firstinventor, but only if properly applied for and pursued bythe invzntor. After recent legal developments, patentscan now be obtained for software programs that arenew, useful, and not obvious. A patent gives the ownersa 17 year monopoly to the patented software concept orapplication. This monopoly includes the right to prohibitprograms by others that do basically the same thing butwith re-written, reverse-engineered source code.
Copyrights: The Leading Case
The original owner of copyrights in software isthe programmer/author. The programmer/author must bean individual or group of people; corporations cannot beauthors (although they can obtain eventual ownership).The programmer/author by contract can transfer andagree to transfer all copyrights by assignment orexclusive license.
Some older contracts use language that deems thework of a consultant/programmer to be a "work forhire". The concept is that a "work for hire", from thetime of creation, is not the property of the author, butinstead is the property of the employer of the author.However, recent changes in federal law (see the 1989U.S. Supreme Court case, Community for CreativeNon-Violence v. Reid 109 S. Ct. 2166, herein calledReid) clarified that "works for hire" may arise only inemployer/employee situations. The "work for hire",except for a few exceptions specified in the statute,cannot arise in the consultant/independent contractorsituation. That is, where a consultant writes software fora client, the consultant initially owns the copyright tothe software, not the client. The consultant willcontinue to own the software unless he licenses orassigns it in writing to someone else (who may or maynot be the client).
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Reid correctly interpreted the Copyright Act of1976 as amended. Copyrights are originally owned bythe author, 17 U.S.C. 201(a), but in the case of a "workfor hire", the employer is considered the author, unlessownership is otherwise determined by contract, 17
U.S.C. 201(b). However, the statute defines "work forhire", as a "work prepared by an employee..." and nocor.tract may alter that definition, 17 U.S.C. 101. Thestatute, however, does not define "employee". Thecoml. in Reid defined "employee", setting out a 12factor test.
In the Reid 12 factor test, no one factor orcombination of factors is necessarily determinative. The12 factors are (1) he skill required for the job, (2) thesource of the tools used, (3) the location of the work inquestion, (4) the duration of the relationship between theparties on the project, (5) did the paying party have theright to assign other work to the paid party, (6) howmuch discretion did the paid party have over when andhow long to work, (7) when and how was the pricepaid, (8) could the paid party hire and pay assistants, (9)was the work part of the regular work of the payingparty, (10) was the paying party in business, (11) whatemployee benefits were provided, and (12) what was thetax treatment of the paid party.
Many, but perhaps not all, consultants would notbe an employee, and hence would own their work underthis test, unless their contracts said otherwise.
The New Software Ownership Cases
Reid clarified the copyright statute, but it actuallydealt with the copyright for a statue, not software.Recently, two federal cases have applied the Reid test tosoftware, one for a consultant, and one for an employee.
In MacLean v. Mercer, 18 USPQ2d 1807(December 1991), the Third U.S. Circuit Court ofAppeals, correctly applied the Reid 12 factor test to aconsultant who wrote software. The court decided thatthe consultant owned the software copyright, not theclient. The software program was not a "work forhire", and the consultant was not an employee, becausethe consultant controlled the "manner and means" ofhow he wrote the software. There was no contract thatassigned the copyright to the client. The court went onto comment that only the copyright owner may licenseto copy, distribute, or display the work, 17 U.S.C. 106.Furthermore, an effective exclusive license from theowner of the copyright can be made only in writing, 17U.S.C. 101, 204(a).
In Aymes v. Brenelli, November 12, 1991,(Copyright Law Decisions, CCH 126,828), the U.S.District Court for the Southern District of New Yorkcorrectly applied the Reid test. It found that anemployee programmer did not own the program that hewrote because he was an employee, it was therefore a
%%ork for hire. There was no contract that assigned thecopyright to the employee.
Since the statute defines "work for hire", aconsulting contract that deems software to be a "workfor hire" owned by the client is probably not effective,and ownership of the program would remain with theconsultant despite the contract. Where such anunenforceable contract clause is used, the consultingclient may have only a non-exclusive license to use thesoftware, and the consultant/creator would be free tosell, license, or use the software with other parties. Toavoid this problem, the consultant's client should becareful to draft the consulting contract to assign andagree to assign all copyrights to the client, without usingthe work for hire concept.
Patents: A Similar Problem
A similar situation arises with patent rights insoftware. The original ownership of a software inventionis with the inventor. In any particular case, the softwareinventor may be the programmer, the employer, theconsultant client, or others, depending on the facts. Awritten agreement can determine ownership in anymanner agreed to, by using language of assignment orlicense. In the absence of a written agreement, aninvention within the scope of employment of theinventor may equitably belong to the employer, andpursuant to case law, the employee would have anobligation to assign the invention to the employer. Aninvention outside the scope of employment would belongto the employee, but if the employee used assets of theemployer to help develop the invention, then theemployer may have a limited non-exclusive right to usethe invention without royalty (often called "shoprights"). There are probably no shop rights for theinvention of a consultant or vendor, although there maybe an implied oral license of some scope of the client.
The bottom line is that in the absence of awritten agreement, assignment or license, the employeror consulting client may have at best a nonexclusivelicense to use the patent (it the employer or client canprevail on the necessary questions of fact), but theinventor would retain all other rights to make, use, sellor license the invention to other parties.
The Solution: Prior Contract
Therefore, whenever an employee and consultantdevzlops software for a company, that company shouldin advance seek a written agreement which among otherthings specifies where ownership of all the rights,including copyrights and patents, will finally rest. Thiscan usually be done by an assignment or agreement toassign all intellectual property rights.
Note, however, that many software developmentcontracts that handie eventual ownership deal only withthe copyrights. This is a major oversight since it is now
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clear that software inventions have the possibility ofsimultaneous parallel protection by both copyright andpatents. Therefore, a software development contractthat merely assigns copyrights in a program, but doesnot mention patents, would leave the consulting client inthe strange position of owning the copyrights to thesource code, but not the patent rights to the softwareinvention. In this case, the client-copyright-owner ofthe source code could not use the source code withoutinfringing someone else's patent. In a practicalsituation, this is as useful as buying half a pair of shoes,and leaves the copyright owner hopping around on onefoot with little in the way of useful (or exclusive)ownership rights.
A similar "ownership surprise" can arise wheresoftware is written by an employee, instead of aconsultant, although there are some distinctions. The"work for hire" language will work to convey copyrightin a contract with a true employee and a writtenassignment will convey patent rights of an employee.But the basic rule holds that without a proper writtencontract, the employee may own an important interest inthe software that he writes, to the surprise and chagrinof his employer.
An Approach for All Technologies
The situation described here for software patentsapplies generally to all inventions and patents (includingmechanical devices, processes, and drugs) and is notlimited only to software.
The conclusion from this state of the law is thatwhenever proprietary software (or any new technology)may be developed, well written modern contractualprovisions should be used to clarify the ultimateownership of all the rights in the eventual software.Otherwise the parties may be surprised, pleasantly orotherwise, regarding the identity of the actual owner ofthe proprietary programs. Indeed, this step should bepart of a larger program to identify, develop, protectand exploit intangible intellectual property assets of allkinds.
ti
Managing the Privacy Implications of New Technology
Brian G. Milton, National Director - Social PolicyStentor Telecom Policy Inc.
Ottawa, Ontario, Canada
1. ABSTRACT
A recent national privacy survey undertaken by a consortium of Canadian companies, associationsand government departments reveals that invasion of privacy ranks with environmental,educational and employment issues as a major concern for Canadians. In this paper, Brian Miltonoutlines the results of this survey and describes the initiatives of Canada's majortelecommunications companies in addressing this growing problem. He then illustrates how theprivacy issue is simply one link in a chain of events and perceptions that require a fundamentalshift in the way the telecommunications industry has managed the social implications of itstechnologies.
2. INTRODUCTION
In business today, social factors have become inseparablefrom the more traditional benefits of price, value andconvenience. As a result, showing leadership intelecommunications now requires a new level ofsophistication and sensitivity to a more complex set ofcustomer needs and requirements.
The partner companies in the Stentor Alliance, the newconsortium of Canada's major telecommunicationscompanies, have long been cognizant of their socialresponsibilities. The practice of subsidizing local rates withlong distance reve..ues, for example, has allowed Canada toachieve the second highest penetration rate of telephones inthe world (after Sweden) despite our country's formidablegeography. However, a new class of social issues has arisenwhere the concern is focused not so much on pricing oraccess but rather on the purely social or culturalimplications of new technologies and new services.
In Canada, automated dialing devices and telemarketingscams have increased customer annoyance withtelemarketers, raising perceptions of privacy invasion andinviting the attention of governments. The introduction of976 services in Canada has caused considerable controversyas well, raising a cluster of social questions from themorality of carrying "pornography" over telephone lines tothe problem of irresponsible or uninformed householdmembers generating huge, unexpected telephone bills.
Call Management Services, particularly Call Display, haveprobably provided the most challenging and vocalexpression of service-related social issues to date. Cellularand mobile radio services which pose the risk ofeavesdropping have also generated publicity. In the future,Personal Communications Services, among otherinnovations, will undoubtedly carry potential privacy andconfidentiality implications.
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As these examples make clear, by far the most persistentand widespread concern throughout these newer socialissues has to do with privacy and the perceived threats toindividual autonomy posed by new telecommunicationstechnologies. Indeed, a Consumer Affairs report released byPrice Waterhouse argues that privacy issues associated withCaller ID, debit cards, telemarketing and the sale of lists,smart cards, E-mail, Voice-mail and interactivecommunications technology will dominate Canada'sconsumer agenda during the 1990s.
There are two equally important aspects to the privacyissue. One is ensuring an individual's protection fromunwarranted intrusions -- what could be called the "leaveme alone" variety. The second is ensuring an individual'sability to control the flow of information from and abouthim or herself -- or the "none of your business" type. Theseareas have not been problematical for thetelecommunications industry in the past.
But, the future promises a wide array of new, profitableservices capable of generating vast amounts of informationabout an individual or an organization. For example, CallManagement Services and new telemarketing technologies,which are currently perceived by some groups as privacyinvasive, are both high growth and high profit areas.
In forming the Stentor Alliance, the major telephonecompanies in Canada recognized that they needed a clearfocus to effectively manage these new and emerging issues.As a result, Stentor Telecom Policy was established anddirected to centrally manage these aud other issues onbehalf of its shareholder companies across Canada.
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Stentor Telecom Policy believes the Canadiantelecommunications industry must take proactive measures .
to effectively manage the privacy issue, otherwise our abilityto offer new services may be hurt. Our overall goal todevelop a policy framework that would promote the rapiddeployment of new technology while safeguarding customerprivacy -- would reduce the regulatory, legal and publicimage costs of launching new services. This represents animportant advantage to our shareholder companies as theystrive to meet the needs of their customers in anincreasingly competitive and challenging market.
3. CANADIAN PRIVACY SURVEY RESULTS
To assess and respond to the concerns of Canadiansregarding privacy, Stentor, the Canadian BankersAssociation, American Express, Equifax Canada, togetherwith the federal government's Department ofCommunications, Privacy Commission, Consumer andCorporate Affairs Canada and Statistics Canada sponsoredthe Canadian Privacy Survey.
Conducted between October 28 and November 5, 1992 byEkos Research Associates Inc., the sample consisted of over3,000 Canadians, weighted to 1991 Census figures on sex,language, area code and education. The 90-item surveypolled respondents on their concerns in general andspecifically regarding privacy relative to the impact ofinformation and telecommunications technology on theirpersonal and working lives.
The results indicated that privacy concerns are remarkablyhigh with only three per cent of the respondents "not at all"concerned and 52 per cent extremely concerned. Indeed,invasion of privacy ranks with environmental, educationaland employment issues as a major concern of Canadians.
Overall, 92 per cent are at least moderately concernedacross all major socio-demographic segments. Concern ishighest amongst the poorly educated (high school educationor less 59 per cent extremely concerned compared to 47 percent some post-secondary and 44 per cent graduates of postsecondary institutions) and women (56 per cent versus 46per cent of men).
Moreover, the survey revealed a broad sense of erodingprivacy paralleled by a trend towards less trust ingovernment and big business. There's an "Orwellian" fearof being watched or controlled without an individual'sknowledge. Aspects of invasion of privacy which involvedlack of control, consent or awareness were among the mosttroublesome to the majority of respondents.
On the other hand, disturbances such as unwanted telephonecalls and visitors at the door (which are announced and canbe curtailed) are viewed as much less important. Peopleclearly distinguish between the two types If privacyproblems. The "leave me alone" type is considered anuisance more than anything else while the "none of yourbusiness" type is viewed much more seriously.
It should come as no surprise that the growing concernsregarding privacy are fueled by the proliferation of newtechnologies and services. The survey indicated a generalacknowledgment that new technologies -- particularlycomputers -- pose an increasing threat to privacy.
Clearly, with the growing complexity and sophistication oftechnology, Canadians are worried about their privacy.However, a rational disentanglement of level of threats isalso apparent from the survey results. For example, there islittle concern about being monitored by utilities, moderateconcern with cable monitoring and serious concernregarding the linking and/or sharing of personal data.Interestingly, concern is also reduced when two conditionsapply: one, the implications for privacy are explicit andtransparent and two, clear benefits are perceived in theservice.
In sununary, general concern regarding privacy is alwayshigher than specific or concrete concerns; the relativelypowerless are significantly more concerned than moremainstream groups; control of personal information is muchmore problematic than traditional privacy intrusions; andconcern is highest where the author, purpose andconsequences of privacy invasion are unknown.
Americans appear to share the concerns of Canadians in thisarea. A 1991 survey conducted by Louis Harris andAssociates found that 71 per cent of U.S. consumersbelieve that "consumers have lost all control over howpersonal information about them is circulated and used bycompanies" and are concerned about loss of their personalprivacy.
4. BENEFITS AND DRAWBACKS OFFORMALIZING A PRIVACY POLICY
Stentor Telecom Policy is spearheading its shareholdercompanies' efforts to address these privacy concernsthrough a formalized privacy policy whose frameworkincludes a Model Code of Fair Information Practices as wellas a more telecommunications-specific set of privacyprinciples and guidelines for marketing and public affairs.
Without a formal, coordinated policy, we risked delaying orlimiting the introduction of new services. Individualshareholder companies could have also developed different.or even conflicting, policies. Most importantly, without anational coordinated policy, the Stentor shareholder wouldhave certainly lost their ability to effectively manage theprivacy issue. That control would have passed toregulators, legislators or the courts.
On the other hand, with this overall coordinated policyconcerning privacy, the shareholders of Stentor will perhapsenhance their corporate reputation. At the same time,Stentor has the opportunity to influence the public debateabout privacy and contribute our expertise to help shape thelaws and regulat;ons that will affect how we offer newservices.
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Equally essential, with a formal privacy policy, the Stentorshareholders can reassure their customers about current andfuture service offerings. It also provides the guidelines thatwill inevitably ease new product development and serviceintroduction.
With time, the shareholders of Stentor may be viewed asleaders in the shaping of a national agenda on informationpolicy. And that prestige could he used to leverage otherpolicy initiatives.
Of course, there are risks to this approach. Short-termproFts and expenditures will be affected. There is also thepotential for embarrassment if the policy is not upheld.Nevertheless, by educating employees and other interestedparties and by working with regulators and legislators toensure they understand our initiatives, these risks can beminimized.
5. MODEL CODE OF FAIR INFORMATIONPRACTICES
The first thrust in Stentor's privacy policy framework wasthe development of a privacy code, modeled on the OECDGuidelines on the Protection of Privacy and TransborderFlows of Personal Data. The Model Code of FairInformation Practices created by Stentor Telecom PolicyInc. is a comprehensive and formal statement of principlesand guidelines for the protection of personal informationthroughout the policies and operations of each shareholdercompany of Stentor Telecom Policy. It is currently beingadapted by each company to meet their individual needs.
The Model Code deals specifically with the collection,storage, protection, use, disclosure, individual verificationand correction of personal information. Essentially, itensures the responsible handling of personal informationprovided to the Stentor companies by their customers andemployees. It also reflects the many existing companypolicies and regulations already in place throughout ourcompanies.
The Code formally ensures that Stentor companies will usepersonal information only for lawful, clearly understoodpurposes relevant to the conduct of business and not for anyother reasons without the individual's consent. As a result,companies will not divulge anything other than the name,address and listed telephone number of a customer (exceptto authorized and clearly identified third parties) andanything other than an employee's or pensioner's name,position and duration of employment. In addition,disclosures will be bound by formal contracts stipulatinghow the information can be used.
The Code also entrenches the right of customers andemployees to examine and, if appropriate, challengepersonal information about them in the member company'smaster files. It emphatically requires that all employees withaccess to personal information protect its confidentiality.
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Ultimately, responsibility for ensuring compliance with theprovisions of this Code rests with the senior management ofeach company.
Each Stentor company will formally review and update theirindividual Codes at least every five years to guarantee thatCode provisions remain current and meet the evolving needsof the company, its employees and customers.
6. PRIVACY PRINCIPLES IN NEW SERVICEDEVELOPMENT
As a supplement to the Privacy Code, a more detz.:,edtelecommunications-specific set of privacy principles wasdeveloped to serve as the basis for ensuring privacyprotection in the development and provisioning of newservices in our industry.
To establish the credibility of these principles and provideguidance to key employee groups, they were furtherincorporated into a module of the new "Integrated ProductManagement Plan (IPMP)", a comprehensive series ofmanagement procedures and practices guiding thedevelopment of new products and services. In effect,product and service managers are now required toundertake social impact assessments much as they currentlydo economic evaluations. This is similar to the situation inNew York and in Canada's province of Manitoba. But,unlike these jurisdictions, we undertake these assessmentson a voluntary basis.
The purpose of this assess'aent is to identify at an earlystage the extent to which a proposed product or service mayaffect the privacy and/or personal security of customers -not only users and end-users, but non-users as well. Theassessment addresses expected change(s) in the level ofprivacy for customers and identifies options and measuresthat would allow customers to re-establish their personalexpectations of privacy and the effort and expense ofmaking that possible.
It also evaluates the type and extent of information thatshould be provided to customers to enable them to makeinformed decisions regarding the use of the proposedproduct or service. It further determines whether advanceconsultations with customers should be undertaken toclarify any vague implications and identify additionaloptions.
In assessing any expected changes in privacy during theproduct development cycle, both facets of the issue areconsidered -- freedom from intrusion and control overinformation on and about oneself. In this case, freedomfrom intrusion refers to uninvited sales calls, electronicmonitoring and any invasion of what would commonly beconsidered as a person's intimate, personal or private life.
n '
lJ 1/4.)
Control over information is defined in terms of commonlyaccepted rules that include: minimizing the informationcollected; collecting it directly from the person involved,restricting its use to an openly stated purpose; keeping theinformation secure and not providing it to a third partywithout the customer's consent; and allowed the customeraccess to the data and the opportunity to verify its accuracy.
7. FUTURE CHALLENGES
James Katz, a Bellcore authority on the social implicationsof telecommunications, anticipates that social issues likeprivacy will continue to migrate from the periphery of thebusiness to centre-stage. Telecommunications has become ahighly visible and important component of personal andbusiness life. Network changes and the frequentintroduction of new (and different) services are thereforemore visible and generate greater public scrutiny.
However, while such changes to the network have auniform impact on subscribers, the needs of subscribers arebecoming increasingly diverse, and at times exclusive.Nevertheless, newer services are usually mass marketedrather than custom marketed and, as a result, can be viewedas intrusive of threatening by sometimes significantminorities of subscribers.
For example, groups such as the disabled, the elderly, andwomen's groups are asserting themselves in themarketplace and regulatory arena by equating threats totheir consumer rights with an assault on their humanrights. In seeking to influence the agenda, these groupsoften seek the help of the media, local politicians and thecourts to politicize the issue and pressure regulators.
Balancing these diverse and often conflicting needs with theequally pressing demands of a more competitive and fastchanging market is perhaps the most difficult aspect ,-;fmanaging the social implications of new technologies. Whatis more important - the benefits of a new service to a vastmajority of customers or the potential drawbacks to a small,albeit important, group?
Perhaps even more important is the way thetelecommunications industry tends to manage these issues inthe first place. Instead of examining the issue from avariety of perspectives and then deciding what is best forthis group and that group, wouldn't it make more sense tohave special interest and consumer groups involved fromthe beginning. Wouldn't it be easier -- at least in the longerterm -- to have concerned groups help make the decisions,instead of arbitrarily making decisions for them. The realchallenge, then, becomes to move from an "them-us"mentality to the more constructive "we" approach to issuesmanagement.
Another growing challenge for the telecommunicationsindustry stems from a growing lag between technology andpolicy. The Economist, in its 1991 survey oftelecommunications, highlighted the problem as follows:
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"For most people, telephones have been taken for grantedfor too long for them to be associated wit., other joltingapplications of mo:;em science...the danger in this is thata telecom industry driven by bold entrepreneurs withincreasingly potent technology could race far ahead ofsocieties that have only just woken up to the fact that bigcompanies are in it for the money. So regulators,politicians and lawyers need to get off to a good start onsome of the complex issues involved."
Belicore's Katz agrees, observing that, ..."all the goodsolutions require technology and policy to proceed hand inhand. To do one without reference to the other is not a verysound way to go about creating new services that willsatisfy market and social needs."
The most pressing danger associated with a continuation ofthis technology/policy lag is that the regulator will be forcedinto adopting a cautious and overly restrictive attitude tonew service deployment.
In other words, unless the industry demonstrates sensitivityto the social impacts of new technology, legislators andregulators, in their own political self-interest, may adoptstrategies that are not necessarily conducive to a rationaldevelopment of telecommunications policy. In any event,regulators will likely respond more readily to public voicesof complaint than industry voices for the benefits of newtechnology.
To close the growing gap between technology and policy,Stentor Telecom Policy believes the best approach is pro-active company measures, self-regulation and broaderconsultation. Failing this, new regulation or, more likely,protracted and longer regulatory investigation will likelybecome the norm.
8. CONCLUSION
Clearly, social issues are moving to the forefront astelecommunications become more indispensable and astechnology becomes more socially intrusive. Privacy,however, is only the first wave of this movement. Thenumber of issues is multiplying, their individual complexityis growing, and so is the complexity and dynamics of theinterrelationships among those issues.
In other words, privacy cannot be viewed in isolation. Asthe national privacy survey conducted in Canada revealed,there's a growing anxiety bordering on fear that goes farbeyond a loss of privacy. A substantial number of peoplefeel disenfranchised. They do not quite know what theproblem is or how to handle it. But, it exists neverthelessand they want something done to give them back a sense ofcontrol over their lives.
There are two ways to dissipate this type of fear. One is toprovide the assurance that there are no hidden agendas andthe other is to clearly demonstrate that something willprovide a clear benefit. To succeed in the increasinglycompetitive and global market for telecommunicationsservices, companies must get their customers moreintimately involved in assessing the social impacts of newtechnologies. Indeed, customers should become what AlvinTaller called "prosumers" in the product developmentprocess.
This new emphasis will not be tidy or simple and it will notalways provide trouble-f-ee services or perfect solutions.But it is clear that it is becoming a necessary part of doingbusiness in the Information Age.
In its September 1991 review of "Computers, Networks andPublic Policy", the Scientific American summarized thefuture challenges this way:
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"The road to the global village is a bumpy one. Ascomputing and communications technologies fuse, theycreate ways to express it !as, generate knowledge and shareinformation. The new technologies also redefine time andplace in a manner than can confound the traditional legalconcepts of property, ownership, originality privacy andintellectual freedom. Government must address such issues,and it must also build a framework of policy that enables theeconomic and intellectual opportunities of the emergingtechnologies to be realized."
The telecommunications industry must also address suchissues and participate fully in molding the framework thatwill cushion the ride into the future. First, though, bothgovernment and business must remember that the bestpolicy frameworks and solutions result when the rightprocesses and people are involved in the first place.
THE PERSONAL DATA PROTECTION REGIME EMERGING IN KOREA
Jisuk WooUniversity of Pennsylvania
Philadelphia, U.S.A.
1. Abstract
The collection and use of personal information by the public and private bureaucracies have been considered athreat to privacy in most Western industrialized countries and recently in the less developed countries as well.Studies on regulatory ways to protect personal information have focused on the cases in the highly industrializedWestern democratic countries despite the fact that the possible invasion of privacy and surveillance is no lessserious in other countries including those in Asia. This study examines how the particular political, economic andcultural circumstances of Korea are reflected in the Korean data protection policy which has been formulated since1991, and at the same time, may influence the effectiveness of the implementation of the policy.
2. Introduction
The protection of personal information has long been thesubject of controversial debate in most Western democracies,but little agreement or solution has been reached due to theconstantly changing technological and social environment.Privacy is also a difficult concept to define since it deals withsubjective matters whose meaning vary from country to countryand from time to time. Samuel D. Warren and Louis D. Brandeisare often acknowledged to have proposed the definition of the"right to be let alone' in their seminal law review article, 'TheRight to Privacy,' published in 1890. In 1967, Professor Alan F.Westin of Columbia University defines in his book Privacy andafiestm, that "Privacy is the claim of individuals, groups, orinstitutions to determine for themselves when, how, and to whatextent information about them is communicated to others." Hisdefinition applies the notion of "privacy" to the issue of collectionand use of personal information, and hence, shifts the focus ofthe issue of privacy from giving individuals a "right to privacy' togranting rights specifically related to personal information (13).
Personal information consists of those facts,communications, or opinions which relate to the individual andwhich would be reasonable to expect a person to regard asintimate or sensitive and thus to wart to withhold or restrict hercollection, use, or circulation (15). Governments, bureaucracies,and organizations collect and store personal information in orderto reduce uncertainty and risk in making decisions. Althoughpublic and private bureaucracies have been collecting andmaintaining information on individuals for centuries, thedevelopment of computer technology and telecommunicationshas dramatically changed the nature and the capacity ofinformation handing. New information technology which allowscomputerized data processing provides the potential fororganizations to more easily collect, store, manipulate andcommunicate great amounts of data about individuals (1). Inaddition, there also has been a qualitative increase in thesensitivity and personal nature of the information contained inrecords (13).
This increased ability for governments and businesses tocollect and use information is considered a threat to privacy inthat more aspects of an individual's life are known to more peopleand more organizations and that the individual loses control overpersonal information (11, 13). Decreases in individual privacy areparalleled by increases in bureaucratic knowledge and control.Several observers identify a significant problem in the magnifiedpotential power of modem bureaucratic organizations in relationto individuals (1, 5, 13). The computerized collection and use ofpersonal information by bureaucracies in turn has increasedpublic concern for protection of personal information (6, 10). Theconcern has been that individuals can no longer adequatelyprotect their own privacy without the assistance of regulation andregulatory authorities, especially with respect to the information-handling activities of the bureaucracies (1). The issue of privacyor data protection has risen to the political agenda of most liberaldemocracies and some other countries (1) and many amongthem have Instituted some kind of data protection regime. Theexistence and the nature of personal data protection policy couldgenerate greet social, political, and cultural influences on theways in which intonational privacy is protected in the society.
Various actors in a society including the pubic bureaucrats,private bureaucrats, and incividuals try to influence the outcome
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of data protection policy due to different interests regarding thecollection and use of personal information. Since allbureaucracies regard information as critical to their internaldynamics and to their relationship with other organizations andindividuals, bureaucracies tend to resist the efforts of outsidebodies to enact laws of data protection and try to ensure a weakenforcement framework (1). On the other hand, individualsgenerally want data protection regulation so that personalinformation is not used against their own interests. The issue ofpersonal data protection becomes more complicated in that theright to privacy is bound to come into conflict with other rightssuch as the right of the pubic to know, and legal rights offreedom of expression and freedom of the press. Also, the rightto privacy often seems to conflict with efficient practices ofgovernment. The conflict gives rise to considerable practicaldifficulty in drawing the legal boundary between these rights.Establishing a data protection regime is thus inherently a processof balancing various competing rights or values and of balancinginterests of various actors. Different types of data protectionpolicy are the results of decision making, which reflects valuejudgements and power relationships among the actors in eachcountry. The examination of similarities and differences in dataprotection policies in different countries will contribute toenhancing our understanding of important factors that influencethe implementation of data protection policy.
In countries that have not developed democraticgovernments and industrialized societies, the acquisition ofinformation technology including computers have often beenused as a useful tool for repression of political and social activity.ft has been argued that many governments in Latin America,Asia, and I- iiica have supplied computer systems for the purposeof repress:on and surveillance of their populations (9). Moreover,the privacy of the individual is not considered a high priority bymost Asian governments or their citizens (9). In this situation,establishing data protection policies in these countries wouldhave significant impacts on the issue of privacy in terms of theways in which personal information is allowed to be gathered andused. Despite this importance of the data protection policy in lessdeveloped countries, previous studies exclusively focused onhighly industrialized, liberal Western democracies, thus failing tofully consider some important factors that might influence theformation of data protection policy such as external pressuresand cultural factors.
Examining the ways in which the data protection policy isimplemented in those countries with less economicdevelopment and/or a different cultural background fromWestern democracies would provide an insight not only on thetheoretical knowledge of the data protection policy process butalso on the possible type of data protection policies in othercountries in which the policy has not yet fully emerged . In Korea,as an example of a relatively less developed country, the concernfor the use of personal information has recently arisen, and a dataprotection policy has been formulated by the government. SinceKorea has begun to use new information technology to manageinformation on its citizens and is in a quite different cultural andeconomic circumstances from the Western industrializedcountries, the emerging Korean data protection policy wouldprovide a valuable site for a case study.
This study starts with identifying several different types ofdata protection policy. The cases of four countries of the UnitedStates, Britain, Sweden, and West Germany -- which have been
f 1 '
examined in previous studies -- will be compared in order toexamine how nations with different structural, historical, andcultural features have responded to the problem posed bypersonal information. I will explain the similarities and differencesin each country's data protection legislation as influenced bytechnological factors, internationalization, political structures,economic situation, and cultural influences. These factorsprovide an analytical framework for examining the data protectionregulation and policy in Korea.
2. Characteristics of Personal Data Protection Poky
2.1 Principles of Personal Data Protection
Previous studies agree that the principles of data protectionpolicy are similar among countries (1,3,13). For example,Bennett, in his comparative study on the data protection regimesof four Western democracies, finds that data protection or privacystatutes all embody a common set of lair information principles':the right of the data subject to see, copy and correct personalrecords; the right to know and control how and to whom thatInformation may be transmitted; Imitations on collection to"relevant and necessary" information; the registration with somecentral authority of all manual and/or automatic personal record-keeping systems; and procedures for challenging and correctingabuses. However, many of these principles are subject to avariety of exemptions in the implementation of the policy (1). TheImplementation of data protection varies in terms of manyaspects: what aspect of personal information problem the policyis designed to correct primarily, what type of agency (if any) isestablished to lead the protection, what are the characteristics ofthe agency In terms of its responsibilities and enforcing power,and what is the scope of regulation (1, 3,10).
2.2 Objective of Legislation
Regan suggested that approaches to personal informationhandling can be categorized as the 'civil liberties approach" andthe information control approach; These two approaches differin their definition of the problem and their impact on thebvreaucracy collecting and using personal information. The civilliberties approach views the major problem resulting frombureaucratic personal information practices as the weakening ofthe individual in dealings with a bureaucracy collecting and usingsuch Information. The solution then is to give individuals newrights or to extend existing legal actions so that individuals canprotect their interests in personal information. However, sincethis approach relies on the individual as initiator of any action toprotect her interests, it requires that the individual be aware ofher rights, understand the potential threats posed bybureaucratic collection and use of such information, and bewilling to invest the time and money to protect her Interests. Inaddition, this approach only provides remedies once misuseshave occurred.
The information control approach views the problems arisingfrom the collection and use of personal information as the resultof the information policies of bureaucracies, thus the solution issought in terms of regulating bureaucratic collection and use ofsuch information. The principle means of providing for suchregulation is the establishment of an independent non-operatingagency specifically concerned with the task of monitoringinformation systems and preventing its abuse. Between thesetwo approaches, the information control approach is regarded asmore effective in addressing the effects of personal informationalcollection and use on individuals than the civil liberties approach.
2.3 Data Protection Agency of Implementation
As discussed above, the existence of an independent,separate agency for personal data protection is essential to makethe data protection regulation work in practice. Without aspecialized mediating structure between individuals and record-keeping organizations, data protection legislation dependsentirely upon the data subject's participation. According toBennett, this approach is called the "subject control model; asdistinguished from the Institutional control model' whichrequires separate control mechanism. Subject participation takestwo forms under personal data protection policy. The first is
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BEST COPY AVAFt 4.1
control through the specified rights of access and correction.However, as discussed in the civil liberties approach, this entailscomplicated processes: that people must know about theexistence of databanks, their purposes and contents; thatindividuals should have the right to be informed on demand ofthe information registered about them; etc (1). The second formof the subject control model is the enforcement of dataprotection rights through the courts. To the extent to which thecitizens are not prone to the participation either directly to therecord-keeping organizations or indirectly through the courts,however, this control model can be ineffective.
On the contrary, the Institutional control model requires theestablishment of an institution which can both regulate therecord keeper and assist data subjects in the purr lit of theirrights. The nature of an institution can be divided kit() threetypes: licensing agency, registration agency, and datacommissioner. With a licensing agency all operators must registertheir information systems, and without the permission of theagency no personal data may be processed. Registration differsfrom licensing in that control agency would have no authority toblock the establishment of an information system. A DataCommissioner acts as an agent of the legislature to inter mediatea citizen and a record-keeper. With no power of enforcement andregulation, a Data Commissioner reties on complaints fromcitizens (1). The regulatory power depending on the nature of anagency is important, but the power Is also subject to the actualworking in practice in the relationship with other forces in asociety.
2.4 Scope of Regulation
Data protection poky also varies in terms of the scope oflegislation. Whether the same principles and regulation areapplied to both the pubic and the private sectors or only one ofthese is an important question. it often reflects the relationshipbetween the government and private sector, and the extent ofthe Independence of the policy making entity from other pubicor private bureaucracies. Also, whether the regulation coversboth computer record systems and manual files or computer filesexclusively could make substantial differences in the way thatdata protection policy is exercised. Although the problem iscreated by the automated record-keeping systems, manualrecord-keeping systems can pose just as much of a threat. If theregulation only covers computer record systems, many datasubjects remain unprotected and users can evade dataprotection simply by transferring personal data into manualrecords.
Various aspects of implementation of data protectionlegislation could influence the effectiveness of the dataprotection pokey. Some implementation methods seem to havethe potential to be more effective than others, although theeffectiveness of any data protection policy cannot beautomatically determined by formal classification ofimplementation strategies.
3. Four Examples of Personal Data Protection Regime
The experiences of the United States, Britain, WestGermany, and Sweden provide a background for an analyticalframework which will allow us to study the Korean case. As notedearlier, the principle of data protection legislation has been foundto be similar in each of these countries, thus it is not discussed indetail in this section. Table 1 shows a summary of the comparisonof the implementation formats in the four countries. Since Iconducted secondary data analysis using other scholars'analyses and reports on the poky In these countries, some ofthese forms may have been modified. However, I believe thistable provides some insight into the ways in which privacy policyis implemented.
3.1 United States
The United States takes a civil liberties approach whichfocuses on giving individuals rights of access, correction, andknowledge (13). The Privacy Acts of 1974 and 1980 and otherprivacy acts are primarily designed to regulate the government: toprohibit federal agencies from disclosing records of individuals;to prevent government access to individual financial records
except for certain purposes; or to limit government officials oremployees from searching for or seizing any work productmaterials used for public communication (11). But no separateagency was established to implement the data protection poicy.Without an institutional control mechanism, the, only means ofenforcing informational privacy are through jucicial enforcementand oversight by Congress and the Office of Management andBudget, which has been criticized for its laxity in data protection.The United States Is the only country that restricts its dataprotection laws primarily to government bodies. Only the PrivacyProtection Study Commission as a speciaftzed, BalmCommission investigates and makes recommendations for theprotection of personal Information in the private sector on avoluntary approach, rather than a legislative or regulatoryapproach. With few exceptions, private organizations that collectand use personal Information are only subject to voluntaryinternal codes for data protection. No cistinction is madebetween regulation on computerized and manual records.
32 Britain
Britain has passed the most recent comprehensive dataprotection legislation among the four countries. Since concernsabout privacy and computers were aired in 1960's, the Britishpolicy process was characterized by procrastination andcontroversy (1). Constitutional law does not state positiveprotection for privacy. Common law had developed noindependent protections for privacy, nor were there othercommon law principles that could be extended easi* to theprotection of personal information. In addition, the judiciary is notactive in setting disputes on personal information protection.Due to the Council of Europe Convention on international dataflow, however, Britain received much pressure to develop aformal data protection poicy. Without data protection Britain wasin danger of being excluded from lucrative European matkets.The Act relied on the requirement that all users of data systemswhich process automatically information relating to identifiableindividuals be registered (1). The Data Protection Registrar Is anindependent body with the powers to draft and enforce codes ofpractices of pubic and private information systems and to requireregistration of all pubic and selective private information. But witha small staff, the bulk of the Registrars responsibilities is relatedto estabishing and updating the Register and compliance withdata protection principles is largely voluntary. British policy gaveup direct control in both sectors, but it was able to maintain someindirect control over a special committee in the private sectorwhile its ability to exert any indirect control in the pubic sectorwas virtually non-existent. The Act does not cover manual files,but only protects computerized information.
3.3 West Germany
West Germany has introduced comprehensive dataprotection legislation focusing more on regulating the flow ofpersonal intimation than on providing individual rights (3). TheFederal Data Protection Act became law for the pubic and privatesectors in 1977. The law created an independent DataProtection Commissioner who, by advising the federalgovernment and incividual ministers, is supposed to ensure thatthe Data Protection Act is implemented. The Data ProtectionCommissioners only have supervisory authority, compared withBritain and Sweden where a data protection agency has authorityfor registratiomand licensing respectively. Both pubic and privatesectors are subject to the personal Information protection, butregulated differently. Private sector information systems are theresponsibility of the traditional regulatory agency for the sectorconcerned. Therefore, the West German data protection policyseems to regulate the public sector more strictly than the privatesector. It covers both manual and computerized systems.
3.4 Sweden
The Swedish Data Inspection Board, an independentagency, pays special attention to the nature and quantity of thepersonal data being collected, how and from whom the data arebeing acquired, and the attitudes of the data subjects. The DataInspection Board has strong regulatory authority and power inthis area and has the authority to icense all computerized public
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or private systems and to enforce compiance with its regulations.tt is unlawful to start or maintain a data base of personalinformation in machine-readable form without applying for andobtaining a license from the Data Inspection Board, unless theCabinet or legislature creates it. The Swedish data protectionpolicy does not make distinction between the pubic and privatesector, although many exceptions are given for governmentaluse of personal Information. The scope of the Data Act isrestricted to file, Isis, or other notes kept In automated andidentifiable form. Manual files are not regulated. Despite thestrong licensing approach of data protection In Sweden, variousIssues remain unresolved. Sweden is an example of a countrythat exhibits differences in the data protection approachappearing on the Data Protection Act and actual practices. I willdiscuss this later In relation to cultural factors Influencing dataprotection implementation.
4. Explanatory Factors of Personal Data Protection Poicy
I have ciscussed various approaches to implementing dataprotection policy in the United States, Britain, Germany, andSweden. The similarities and afferences in the personal dataprotection regulation in these countries can be explained by thedifferent political structural, economic, cultural, technological,and international factors in each country. It should be noted thatsince the etudes of personal data protection poicy have focusedon highly Industrialized Western democratic countries, thestudies tend to emphasize more on political and structural factorsin explaining afferent data protect on poicies, and either to de-emphasize the differences in economic and cultural factorsamong the countries, or to conclude that these factors are notcritical in shaping the personal data protection policy. ft should beemphasized that depending on the developmental stage ofwhich a country estabishes a data protection poicy, the samekind of factors seem to influence the data protection poicy indifferent days. In addition, any attempt to Explain data protectionpoicy in relation to these features of countries will be moresuccessful when appied to the policy formation process than tothe poicy outcome itself since a afferent combination of otherfactors comes Into play at that stage in each country.
4.1 Technological factor
In the previous iterature it has been argued that technologynot only generates policy problems initially, but also causes theconvergence of data principles among countries (1).The argument is that societies at the same level of technologicaldevelopment will face the same problems and poicy makers havea strong Incentive to formulate laws with sufficient latitude toembrace future eventuakties. It is certain that the data protectionproblem is one created by technology. But since the same kindof technology might be used differently in a country with afferentcultural background and economic development, the question isnot so much about technology itself but the application oftechnology. The argument that the technology influences theconvergence of data protection principles might apply only to theWestern liberal democracies which share similar levels ofeconomic development and similar cultural backgrounds.Therefore, if the characteristics of technology influence theconvergence of data protection policy at all, it does so more bygiving policy makers incentives to learn from other countries thanby the nature of the technology itself.
4.2 Internationalization
Previous studies have suggested that the internationalpolicy community plays a significant role in guiding convergencein the data protection principles among countries (1). Butinternational factors influence the poicy making process in aafferent way depending upon the extent to which the policy ismade by autonomous choice of poicy makers, and upon thetemporal stage in which data protection poicy is legislated.Countries that legislated eerier tend to have made relatively moreautonomous decisions than those made by countries adoptingpolicies in later years. Some scholars supporting a harmonizationtheory argue that international organizations, especially theOrganization for Economic Cooperation and Development(OECD) and the Council of Europe, played an Important role Insuggesting data protection principle guideines and taking
authoritative actions. According to these scholars, the similarity ofprinciples largely reflects the guidelines suggested by OECD:collection limitation; data quality; purpose specialization; uselimitation; security safeguards; openness; individual participation;and accountability (12). The Council of Europe's conventionallows data protection authorities to refuse the transborder flowof data to countries that do not have adequate data protection.Therefore the Convention may have had a direct impact on thesecountries that legislated late. Certainly the way Britain, the onecountry among the four that most recently established personaldata protection legislation, adopted data protection policysupports this argument.
But international pressure does not explain how countriesthat legislated earlier developed similar data protection principles.In the case of Sweden and West Germany, which legislatedpersonal data practice relatively early, active cooperation of policymakers seem to have played a critical role in developing similarprinciples. There is an alternative argument which suggests thatpolicy convergence has been caused more by autonomouschoice than external constrain ;.r. The argument is that policymakers not only had these motivations to learn, but also hadopportunities for continual learning about different views andexperiences through intense participation in internationalbodies. What is less clear, however, is the effect of internationalharmonization and cooperation efforts on those countries that donot show any motivation to cooperate. For example, the UnitedStates, which was not party to the discussion in the Council ofEurope, had developed a similar model in its Privacy Act of 1974.There is no clear evidence or good reason to bet, 3V0 that UnitedStates policy makers felt pressures for conformity or weremotivated to learn from its peers. Neither technological difficulty,ubiquity of the problem, nor international pressure orharmonization completely explains the similarity of dataprotection principles found in these four countries which haddifferent level of international participation and different historiesof developing data protection regimes. Another alternativeexplanation is in the nature of the value or right that the dataprotection legislation tries to protect. Since the value of privacy isa basic human right, no country would argue against thelegitimacy of the fair information principles. Therefore, many ofthese principles would be subject to a variety of exceptions at thelevel of implementation, depending on the country and type oforganization concerned. The variance in data protection policieswould thus lie in specific applications of these principles.
4.3 Political structures
Political structures are the most frequently discussed factorsin the literature on personal data protection policy. Regan hastried to explain the difference in policy choices for data protectionbetween the United States and Britain as a function of the natureof liberal democracies. Her measure of liberalism involves fourprominent features of democracy; limited government,separation of power between the executive and legislature,protection for individual rights, and the role of the judiciary.Regan argues that all these elements of liberalism make liberaldemocracies choose the civil liberties approach rather than themore effective information control approach. According to her,European continental countries with more integratedgovernments adopt the information control approach, while theUnited States and Britain, which she identifies as more liberaldemocracies adopt the civil liberties approach or are unable tochoose an appropriate approach. Between the two liberaldemocracies, the United States which is the more liberal has aless effective data protection policy than Britain because she hasnot chosen an independent non-operating agency withregulatory power, which is the primary technique of informationcontrol.
However, Regan does not distinguish between he structuralelements and philosophical or cultural elements in her measuresof the liberalism. Thus even if her hypothesis is supported by heranalysis, it is not clear whether philosophies or institutions are themain influence on the policy choice. Given that philosophies arenot always necessarily translated into institutional forms, thisapproach of liberalism has a limitation in explaining policyformation of other countries.
Bennett suggests a somewhat conflicting argument withRegan. He points out administrative structures, which he defines
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as the level of structural integration of national bureaucracies, asthe most influential factor in explaining different implementationsof a data protection policy. He argues that since all bureaucracieswill ?refer non-regulation or weaker regulation imposed onthemselves, the more integrated the national bureaucracies, thehigher would be their resistance to data protection policy, and asa result, the weaker the implementation of the data protectionpolicy. This argument seems to contradict Regan's view that themore fragmented national bureaucracy, the weaker theimplementation methods. This apparent cltemrna is solved whenwe consider policy actors more carefully and define the legislativebody in each country. In Britain, the development of policy takesplace in the Cabinet, which has a fusion of powers. Parliament isnot a law-making body in the same way as the Congress in theUnited States. Therefore, the major policy-making entity in Britainis the public bureaucracy while the American policy-making bodyis the Congress, within which power is limited due to theseparation of powers between the executive and legislature.Therefore, differences in the authority of the policy making bodyin the two countries may have resulted in different policycontents.
Political structures are also closely Inked to the scope ofregulation. Regan argues that the more liberal a democracy, thegreater the legislative regulation over the public bureaucracythan over private bureaucracies. According to her, because ofthe fragmented bureaucratic power in the United States, controland authority over legislation in the public sector was possible,while control and authority over that in the private sector wasdelegated to an ad hoc advisory Commission. In contrast, Britaingave up direct control in both sectors, but was able to maintainsome indirect control over a special committee in the privatesector while indirect control in the public sector was virtually non-existent. It is suggested that what influences the form of dataprotection policy is the relationship between policy actorsreflecting or resulting from these structures rather than theinstitutional structures themselves.
4.4 Economic factor
Economic factors involve various different aspects of acountry's economic situation. Here I discuss two broad aspects;the level of economic development of a country and economicstructure in terms of the role of government in the marketplace.With regard to economic development, Bennett argues thateconomic constraint has been found to play a limited role in thechoice of principles to be legislated as well as in theimplementation of data protection policy. According to him,economic constraint is relatively less important because dataprotection is not an 'expensive- policy which requires thedistribution or redistribution of vast sums of public money.However, it is possible that this economic constraint was notfound to generate differences In implementation because all thecountries that have been studied were industrialized, relativelywealthy countries. The role of economic constraint might bemore significant in less wealthy countries. The importance ofexamining the data protection policy formation in developingcountries is suggested here again.
Probably as related to the political structural factor, the extentto which the government could Intervene in the functions of themarketplace would influence regulation of the private sector. Forexample, West Germany, Britain, and Sweden, more integratedgovernments or paternalistic states that control the economicsector to a relatively !awe extent, regulate the private sector andthe public sector under the same Data Protection Act or evenregulate the private sector more strictly than the public sector. Incontrast, the United States has the tradition of a "free"marketplace, and does not expect the government to intervenein markets absent a compelling reason. This tradition not onlyprovides a rationale for not regulating the private sector, but alsohas contributed to the great power of private sector industries inthe policy arena. Thus, the power of the private sector combinedwith the fragmented nature of the bureaucratic power led theU.S. data protection policy to have no enforcement duties withregard to the private sector. Since it Is certain that privateindustries would prefer weaker enforcement on themselves andtry to influence the policy decision, policy variation in the privatesector depends upon the relationships between the privatesector and other policy actors and upon the private sector's ability
to subsidize Information needed for data protection legislation ina way that favors the actors' interests (4). This argument not onlysupports the proposition that examining the policy formationprocess in terms of the relations among various actors isimportant, ilut also suggests that inequalities lily the informationenvironment could have a critical influence on theimplementation of the policy.
4.5 Cultural factor
A country's culture consists of a great many elements.Among them, hero I choose to ciscuss the political culture and'Value culture in relation to data protection policyimplementation. Poetical culture can be defined as theconfiguration of cognitive, effective, and evaluative orientationstoward poetics (1). Although it is difficult to conceptualize andmeasure poetical culture or to present clear arguments aboutwhat processes or policies night be explained by differentpolitical cultures, some arguments have been made about thepossible influence of two elements of the political culture: citizenparticipation and fear of the government. Regarding citizenparticipation, Bennett hypothesized that countries categorizedas having a more "panicipant" civic culture night place a heavieremphasis on citizen action in the implementation scheme. Heexpected that the relatively more participant culture of the UnitedStates and Sweden helps explain why citizen action andinitiatives are stressed more in those countries than in Britain andWest Germany. But there is no clear evidence beyond a simpleassociation that this participant orientation is the reason whysubject control methods emphasizing individual actions werechosen. Also, the ways in which "participatory culture" is definedand measured are often vague. For example, it does not seemobvious to categorize the United States as a participatory countrywhen only a fourth of Americans vote in federal elections.Therefore, it may be expected that if the degree of citizenparticipation has any influence, it Is on the effective enforcementof the poicy in terms of the citizens' wilingness to use themethods available to protect their own information.
Personal data protection deals directly with central questionsabout citizens' otientation toward government. Cultural bellesabout trust In government can be inked to the differences In theimplementation of data protection poicies. In West Germany,historical experiences with Nazi, Communists, and repressivegovernments are beieved to have inspired a need for cheeks onthe state (3). In the United States, fear of an overpowerfulgovernment is deeply engraved in the Americanconsciousness and Is reflected in the fragmented anddecentraized distribution of authority in government. In contrast,Swedes tend to trust their government and to regard it as abenign force since their government has not engaged In anygreat breach of pubic trust or confidence (3). It is clearlysuggested that countries with a history of fear of the governmenttend to regulate the pubic bureaucracy more, and to protectpersonal information broadly in manual as well as in computerizedsystems. The data protection policy in the United States andWest Germany regulates information practices by the pubicbureaucracies only, while in Sweden both the pubic and privatebureaucracies are regulated and in Britain no direct control overthe pubic bureaucracies has been legislated. Also, the UnitedStates and West Germany protect both manual andcomputerized information systems while the other two countries'data protection policies apply only to computerized information.The trust In government is related to the scope of regulation.
The United States' and West Germany' very different politicalstructures in terms of the integration of government raise aninteresting question. How could the United States with itsfragmented bureaucratic power and West Germany with itsintegrated bureaucracy have established such similar controlsthrough greater regulation of the public bureaucracy and morecomprehensive regulation of manual and computerized files? Itposits a question of whether the structural constraint thatgenerates a certain relationship between policy actors or thecultural belief that relates to the citizen's orientation towardgovernment Is the important factor influencing theImplementation of the policy.
The role of the 'value culture" in the policy process has notreceived much attention in the literature despite its relationshipto the core Issue of data protection. As I discussed earlier, the
938
value of individual privacy often conflicts with the value of the freeflow of information and/or the value of efficiency. What I mean bythe value culture is how these often conflicting values have beenbalanced in a society, and on what values a country has placed epriority in a given situation. The United States and Sweden areconsidered to be countries whose culture traditionally has valuedthe right of the pubic to know. In the United States, the fact thatthe right to know and the value of a free flow of information is saidto be guaranteed by the First Amendment may have it lluencedthe policy outcome through the private sectors efforts to use thiscompeting value as a tool to resist the data protection regulation.Then why does Sweden have such a strong data protectionpolicy characterized by an independent agency with licensingauthority on both the public and the private sectors? In this case,the cultural difference regarding the value of the right to knowinfluences the actual practices of policy implementation ratherthan the formal policy. An example illustrated by Flaherty on thecase of Sweden shows how its data protection approach which issupposed to be effective has not been able to work effectively inactual practice, because the data protection policy conflicts withthe Swedish culture that values the free flow of information;
The Principles of accessible government informationprevres over the principle of personal privacy; the Data Actis subordinate to the constitutional right of access toinformation... The faith in government combined with anacceptance of the primacy of collective interests creates aserious dilemma for the DIB, since it means that citizensare not a partictearly loyal constituency for data protectionwhen it appears to confect with specific surveillanceinitiatives of the Social Democratic Government.... Thebalance between openness and privacy protection is outof control. .. The integration of these competingimperatives are not as well developed... (3, p. 98 -99)
The value of privacy could ,s'iso confect with the value ofefficiency. it is expected that in developing countries prioritiesnight be given to the value of economic efficiency over the valueof personal privacy, since the primary goal of the whole society ofthose countries would be to make themselves moreeconomically advanced countries. In that situation, privacy mightbe considered more of a luxury than a necessity, and might bereflected in the weaker implementation of an existing dataprotection policy.
4.6 Public Concern
It is widely recognized that pubic concern stimulated bytechnology largely influences the nese' for regulation onpersonal information practices. Since pubic awareness isincreased by the collection and publication of individual horrorstories about how people can be denied rights and privileges (1),the critical incident that generates public, media, or legal concernmight not always be the same across countries. Therefore, thenature of a critical incident would Influence the type of dataprotection in the initial status, because this incident wouldcontribute to framing the issue of "privacy' or "data protection" toa large extent. Some policy actors strategically try to frame theissue. For example, private organizations in the United States,with their information superiority and organized power,succeeded in obtaining weaker regulations by making argumentsabout the unique differences in their information needs,insufficient evidence of abuses of personal information, highcosts of the data protection regulation, and policy options (13).The private sector also tries to frame the issue of data protectionpolicy -- of which the original main concern was to protectindividual control over personal information by knifing thecollection and use of the information -- in terms of values of"efficiency" and "free flow of information." Examining the publicdiscourse in the legal documents and media presentations wouldprovide us with information about what kind of arguments areprovided by which interests, and how these arguments influencepolicy implementations.
5. Analytical Framework
Previous studies of the data protection regime, byexclusively focusing on highly industrialized, iberal Western
democracies, have failed to consider some important featuresthat might influence the formation of data protection policy suchas various economic and cultural factors. I argue for theimportance of examining the ways that the personal dataprotection policy is implemented in those countries with lesseconomic development and different cultural background fromWestern democracies. The literature reviewed above provides ananalytical framework to examine the Korean data protectionlegislation which is yet emerging. Employing what has beenknown and suggested to the data protection policy formationprocess in Korea would not only suggest a criteria to evaluate thepolicy but also provide an insight on the validity of the theory andpropositions.
The analytical framework provides some expectations basedon the structural and cultural situation of Korea. Korea hasachieved economic development to the point where she startedto use advanced computer technology for management in boththe pubic and private bureaucracies. However, she is neither adeveloping country nor a highly industrialized country as theWestern countries of which data protection policy has beenexamined by previous studies. In an economically developingsituation, the primary goal of policy in general is economicadvancement, and in the process, efficiency of government andprivate enterprises is highly emphasized. How the primacy givento the efficiercy may function as an obstacle to regulate personaldata processing in bureaucracies will be examined.
The political structure of Korea can be characterized as anextremely powerful central bureaucracy, with the apparentlyindependent, but practically government-controlled legislatureand the police. The formation of a data protection policy would beled by the government, not by the legislature. Therefore, thepubic bureaucracy would have a strong policy-making power tolegislate the data protection policy, but on the other hand, theregulation on the pubk: bureaucracy itself would face strongresistance. How the public bureaucracy's policy-making powerand the resistance to the policy by itself generate a controversialsituation and how this contradiction influences the policy makingwill be examined.
Korea certainly has a different value culture from Westerncountries. Fear of government has been high at least in modemhistory; a series of government abuses of human rights tomaintain its power and status have been publicized andcommunicated among citizens. But fear of government is nostronger than the fear of North Korea. Actually the existence ofNorth Korea has provided the legitimacy for intensivesurveillance on the citizen due to the government's fear of thecitizens' ideological alignment to communism. Therefore, Isuspect that the regulation on the public bureaucracy would notbe firmly exercised. Also, the meaning and the value of general"privacy" in Korea is different from those in Western countries.Although it is difficult to measure how much the individual right toprivacy is valued compared with other values, there are manyexamples where an individual's privacy is sacrificed for someother values. For instance, many high schools publicly poststudents' grades as a strategy to provide students an incentive toimprove their grades. Some schools even assign seats in theclass according to students' grades. This is very unlikely tohappen in Western countries. Also, as a country whose primarygoal is still economic advancement, economic efficiency oftenreceives priorities over privacy. The value of "free flow ofinformation" or "freedom of expression" is also very likely to bevalued more than that of individual privacy, because in the kinghistory of oppression of the mass media and the freedom ofexpression, the value of free flow of information may beconsidered "the most important value' yet to be achieved inKorea. How these priorities given to the other values arereflected in the legislated data protection policy and in policymakers' sense of the issue is worthy of examination.
In order to examine Korean personal data protectionregulation, the legal documents on the personal data protectionpolicy of Korea are analyzed. Since data protection legislationhas been relatively underdeveloped in Korea, two governmentofficials responsible for data protection policy one from theMinistry of Government Administration and the other from theMinistry of Communication -- were interviewed to understandtheir sense of the importance of the issue, the reasons, and theactors. About an hour of open interview with each governmentofficial was conducted. Their names and specific positions arenot revealed per their request.
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6. Korean Personal Data Protection Policy
While the Korean constitution dearly indicates the right toprivacy as a fundamental right of human beings, no specifiedattempt was made to construct an integrated law on privacy.Individual laws in other general areas such as the Libel Law andthe Law on the National Governmental Officials, can be appliedfor the protection of privacy, but they are not targeted directly toprivacy protection, nor can they cope with issues arising from thecollection and use of personal information in the moderninformation society. Thus no institutional methods to control ormanage uses of personal information were sought until theproposal of the Bill on Protection of Personal Information inPublic Institutions and Others in 1991.
6.1 The Bill on Protection of Personal Information in PublicInstitutions and Others
The Bill was initiated as a part of the Project onComputerization of Administrative Data Network. Thegovernment announced the enactment of the Bill in May, 1991but has not yet enacted it (December, 1992), while the Act onExpansion of Dissemination and Promotion of Utilization ofIhformation System, which is also a part of the Project wasenacted on June 30, 1992. The purpose of the Bill was identifiedas "to facilitate the accomplishment of pubic enterprises mg(emphasis added) to protect people's rights and interests bydeciding matters necessary for computer processing of personalinformation in pubic institutions and others' This statementshows that the efficient accomplishment of pubic enterprisesand people's privacy are not viewed as conflicting. While in otherWestern countries personal data protection becameacknowledged as necessary because of the abuses and misusesof the personal information by the government and privatebureaucracies, in Korea personal data protection was plannedand promoted by the pubic bureaucracy as a way to facilitate theaccomplishment of its own enterprises through computerizationof the networks.
The Bill combines both the information control approach andthe subject control approach in its principle. It deals with thecollection and processing of personal information by nationaladministrative Institutions, local self-governing administrativeinstitutions, and other institutions that the president decides tobe closely related to the accompishment of pubic enterprises.The public Institutions that plan to construct and use personalinformation files must notify the Minister of GovernmentAdministration. Then the Minister of Government Administrationmust publicly announce about the notified files more than once ayear. However, this obligation to pubic announcement andofficial publication could be exempted by the president when it isadmitted that the appropriate accompishment of publicinstitutions can be hindered by this obligation. In addition,advance notification itself is "not meant for control of information,but only a way to give confirmation (accorcing to the official fromthe Ministry of Communication)," The Bill also allows individuals tosee and ask for correction of information about themselves.However, the reasons for exemption are numerous, usuallyrelated to the efficiency of the pubic enterprises such as taximposition and collection, inspection and investigation of otherlaws, medical examinations and treatments, etc.
6.2 Public Concern
The Korean government has for years gathered vastamounts of personal irni.mation on Koreans, but has beencollecting even mre personal information since the Project onComputerization started in 1983. The resident registration datacollected in the computerized governmental network consist of78 items including education, blood type, marital status, divorcehistory, and welfare eligibility for the Uveihood Protection Law aswell as basic demographics such as place of birth, permanentdomicile, sex, age, occupation, and family members. Moreover,each district's regional medical insurance associations recordfinancial status and monthly income in addition to demographicsin order to calculate insurance rates. There have been manyexamples suggesting unauthorized uses and misuses ofpersonal information in Korea. Recently the mass media havebegun to report on the use of personal information, especially
-
since the election campaign in 1987 when many politicalcandidates began to systematically use information about voters.
Dong-A libo, one of the largest daily newspapers in Korea,published an article in which many experts suspected thatpersonal data in the governmental network and in computers ofmedcal insurance associations can circulate without any controlor restraint (2). It was reported that the data gathered in thesecomputers were released to Direct Mail firms and to song districtparty chapters to be used for election strategy planning.According to the article, the largest Direct Mail firm in Korea hasretained Information on 15 trillion people by obtaininginformation from the computerized governmental network,alumni rosters, isms of credit card members, birth reports inhospitals, apartment tenants' cards, etc. It was also reported thatthese data were released to members of the National Assembly,the City Assembles, and of District Assemblies who ask for thesedata under the pretext of inspection. Hangyeorae Newspaperalso reported that political candidates, especially majority partycandidates who are closely related to the government, managedetailed personal information on voters including their finanda'status, marital status, information related to military service,birthdays and school year of their children, etc (7). The exactorigin of these data is not known and the government stronglydenies the accusation of releasing personal information to theoutside. However, experts cited anonymously in the articlesuspected that the Information collected in the computerizedgovernmental network must have been released to the majorityparty based upon the fact that there could be no other sourcesmaintaining such detailed information on a large number ofpeople except for the government, and upon the attestation ofsome Direct Mail firms that they obtained some information fromthe majority party.
It is not clear whether the pubic concern stimulated by morecollection and use of personal information actually "made thedata protection policy existence." The government officials Insistthat the Bill was being prepared as a part of the Project onComputerization. But the Project started in 1983, and it was notuntil 1991 and 1992 that the government began to formulate andpropose the Bill. It can be concluded that the public concernreflected in the media coverage at least accelerated the time ofthe proposal of the Bill eerier than it might have been withoutpublic concern.
6.3 Political Structure (poicy-making entity)
Because the Bill was initiated as a part of the governmentproject, the main poicy-making entities have been the ones thatlead the project: the Ministry of Government Administration andthe Ministry of Continunication. To be effective, the Bill must beenacted by the legislature. But as noted eerier, the Koreanlegislature has been considered bureaucratic-dependent inmany aspects. A government official from the Ministry ofCommunication mentioned that usually agreements are easy toreach. The centralized poicy-making power of the publicbureaucracy enables it to formulate the policy without facingexternal pressures or objections. However, the regulation on thepubic bureaucracy itself faces strong resistance from the pubicinstitutions themselves.
For instance, the Ministry of Government Administrationposited at first that the Bill should apply to financial institutions aswell as other pubic institutions. In contrast, the Ministry ofFinance, other related pubic institutions, and financialinstitutions insisted that given the special characteristics offinancial information financial institutions should be excludedfrom being subject to the Bill (8). The different positions areclearly reflected in the forum on the Bill that the government heldon the April 30, 1992. In this forum, the Ministry of Financeproposed that financial institutions be excluded from theapplication of the Bill and the Agency of National Taxation askedthat matters related to tax imposition and collection be excludedfrom the obligation of advance reporting to the Minister ofGovernment Administration and official pubication (14).
The concerns of these policy actors were reflected exactly inthe modified BIN (June 1992). How did the public bureaucracywith such a centralized policy-making power accept suggestionsfrom the other policy actors completely? it has to do with thesimilarity of policy principles and interests of the policy makingbody and other pubic Institutions. Both of whom resist any
inhibitions on increasing efficiency of their enterprises; even thepolicy-making bureaucracy has proposed the data protectionpolicy as a part of the project to facilitate administrative efficiency.Their shared interests and perspectives are reflected in theremark of the official in the Ministry of Communication: 'They dorecognize the need for data protection law, but they ask us tomake a law which would not interrupt their enterprises. It is not anobjection but rather a process of negotiation. We also would tryour best to make this Bill in the way they want."
Thus it does not seem very likely that the policy makingbureaucracy would have changed its original position had thearguments of other actors contradicted its own policy principles.In other words, exemptions of activities of financial institutionsand tax imposition and collection were possible because grantingexemptions fits the idea of emphasizing efficiency - the primarygoal of the Project of Computerization, of which the dataprotection policy is a part. Also, the reason that the Bill has notyet been enacted is not as much due to the difficulty faced by thegovernment as due to the emphasis given to the efficiency bythe government itself.
6.4 Economic Factor
Korea is a country whose primary goal is still economicadvancement. In this situation, economic efficiency receivespriorities over privacy. The very fact that the data protection policyis promoted as a part of the Project of Computerization ofAdministrative Data Network reflects the importance of economicand technological development in Korea. Despite the powerfulgovernment and the tradition of government intervention in themarketplace, regulating information flow in the private sectorwhile trying to emphasize economic efficiency is difficult. Thisdifficulty is reflected in the Bill's rejection at regulation on theprivate sector. The official in the Ministry of Communicationconsiders this natural, because "it is too difficult to control theprivate sector and other countries also do not regulateinformation used in the private sector." In addition, the Bill grantsmany exceptions if applying the data protection law assumes apossibility to interfere with efficiency. Under this circumstance, itis difficult to expect the Bill to be enacted in the future or tobe effectively enforced in a practical sense even if the Bill ispassed.
6.5 Cultural Factor
Fear of the government that has existed in Korea may havecontributed to regulating the public bureaucracy without similarregulation on the private sector. However, information activitiesrelated to "national security" are easily excluded from theapplication of the data protection law. This suggests that fear ofthe North Korea may be still higher than that of the government atleast as understood by the government, thus it can be used as arationale for granting exceptions. Although Korea does not havea high degree of citizen participation as in the Western liberalsocieties, the Bill consists of subject control methods as well asinformation control methods. However, given the presumablyless participatory culture, it is not likely that Koreans are willing toinitiate action to protect their own information rights eitherthrough the government or the courts. Therefore, although theextent of citizen participation was not reflected in the formalcontent of the policy, it certainly would have an influence on theeffectiveness of the policy enforcement.
In the discussion of economic factors, it was found that thestage of economic development of Korea contributes to theemphasis on efficiency in the policy making process and thecontent. This emphasis given to efficiency over privacy seems tobe prevalent among both policy makers and the citizens who mayhave conflicting interests through the data protection policy. Byallowing any possibility of disturbing efficient performance oforganizational activities to be used is a rationale to createexceptions from the law, the Bill does not provide the protectionof personal information as it could have otherwise.
Many policy actors other than policy makers also seem to givethe priority to economic efficiency over privacy. In the forum onthe Bill, representatives of financial institutions, the Ministry ofFinance, and the Agency of National Taxation shared therationale of efficiency for exclusion of financial institutions. Butarguments of other attendants of the forum, newspaper editors,are more striking: 'Since the personal information protection
940 ci
policy and the information access policy conflict with each other,information protection policy should be made in such a way toencourage mutual symmetry. We should not hurry too much forinformation protection policy but should rather draw opinionsmore widely from private institutions and modify the policyaccordingly."; and "Given that the personal informationprotection policy is in its infancy, we should be careful since itcould posit many problems if we make a strong protection policyto the degree of those in developed countries. . . We shouldstrive for harmix.y in cyder not to interfere with the wholeeconomic flow or with a transition to the credit society" (14).
It seems that for these poicy actors as well as for pokymakers, making Korea an "information society" is perceived asthe ultimate goal. The computerization of the network whichmaintain and process vast amount of personal information is thegoal to be achieved without any question as soon as possible,while personal data protection is perceived as some kind ofluxury to be very cautiously considered before any enactment ofa related policy. This is why the Act on Expansion ofDissemination and Promotion of Utilization of InformationSystem, which facilitates the computerized use of personalinformation, has been enacted, but the Bill on Protection ofPersonal Information, which can inhibit the use of personalinformation, has not.
No systematic study has examined whether this kind of .allitE,culture de-emphasizing privacy is still prevalent among citizens aswell, but their interests, positions and arguments do not seem tobe represented very well in the policy making process, as shownin the Forum on the Bill in 1992. tf this value culture is stillprevalent in the society, and privacy protection is not a familiarconcept for Koreans, it is likely that people are not ready toparticipate in the process by requesting to read and correct theirinformation or are ignorant of the procedure itself. The civilliberties approach which gives individuals rights to monitorinformation activities voluntarily and protect their own privacy maynot work as well as intended. The relative emphasis on the valueof efficiency seems to influence both the policy formation andenforcement by influencing the perceptions and behaviors ofpolicy makers, other policy actors, and citizens.
7. Discussion and Conclusion
The Korean personal data protection policy has beendebated since 1991 as a part of the Project on Computerizationof Administrative Data Network. The Bill combines the informationcontrol approach and the civil liberties approach. However, noseparate agency of implementation was established. The Billgrants numerous exceptions ham the obligation of reporting tothe Ministry of Government Administration about information filesor of official publication when it is regarded to have a possibility ofinterrupting the efficient performance of enterprises. Theexceptions are also given from the obligation to show and correctinformation when requested. The Korean government could notformulate an effective data protection policy and was unable toenact the proposed Bill despite its strong policy-making power.This contradicts the proposition that the more centralized andstronger the policy making body is, the stronger data protectionpolicy can be legislated. The reason for this involves both the factthat the poicy is initiated as a part of the project oncomputerization of government information and the value cultureshared by policy makers and actors. The efficiency goal of theProject in which the Bill was formulated and the cultureemphasizing efficiency over privacy are reflected in the proposeddata protection policy. Consequently, the policy ironicallyemphasizes efficiency over privacy, the very value it wasdesigned to protect.
Since this case study is based upon an exploratory analysisof the Bill on Protection of Personal Information which is still inthe process of formulation, the generalization of the result andsuggestions made from the result may be limited. Future studyon data protection policies in other developing countries withdifferent economic stage and cultural elements would contributeto enhancing our understanding of the ways in which dataprotection policy is implemented and can be enforced asdesigned. Within its Imitations, the Korean case providesparticular suggestions for less developed countries in Asia thatmay begin to develop a data protection policy. The economicsituation and the particular value culture in Korea turn out to be
the critical factors influencing the policy making process andcontent, in contrast to the arguments of other studies ondeveloped coin dries that economic constraints play a bitted rolein the implementation of personal data protection policy. tt issuggested that copying or adopting other developed countries'law or implementation methods without considering the country'sparticular characteristics does not automatically lead to theadoption of similar kinds of data protection policies as developedcountries. Rather, a data protection poky formulated andimplemented in this way can provide the pubic and privatebureaucracies with the legitimacy to encourage the collectionand use of greater amounts of personal information instead.Unfortunately, this comes at the expense of individuals' privacyand the protection of personal information - the original mainconcerns of such policies.
REFERENCES
1. Bennett, Collin John. 1986. Flegulating the Computer: AComparative Study of Personal Data Protection Policy. Ph.D.Dissertation, University of Illinois at Urbana-Champaign.
2. Dong-A Ilbo. 1992. 'Data in the Administrative ComputerizedNetwork Hazardously Flow Around,' March 2.
3. Flaherty, David H. 1989. Protecting Privacy in SurveillanceSocieties. Chapel Hill and London: The University of NorthCarolina Press.
4. Gandy, Oscar. 1982. Beyond Agenda Setting: InformationSubsidies and Pubic Policy. New Jersey: Ablex PublishingCompany.
5. Gandy, Oscar. 1989. "The Surveillance Society: lInformationTechnology and Bureaucratic Social Control ,Journal ofCommunication, 39: 61-76.
6. Gandy, Oscar. in press. The Panoptic Sort: A PoliticalE2212111Xsti2easonalInfamato.
7. Hangyeorae Newspaper. 1992. "Personal Infomiation on thePalm of Political Candidates,' May.
8. Jung-Mg lbo. 1992. 'On Protection of Financial Information,"May 15.
9. Madsen, Wayne. 1992. J-landbook of Personal Dataprotection. New York: Stockton Press.
10. Mellors, Coin, and David Polit. 1984. "Legislating for Privacy:Data Protection in Western Europe EarljameriMaks. 37:199-215.
11. Mendes, Meredith W. 1988. "Privacy and Computer-BasedInformation Systems,' in Benjamin M. Compaine, ed., Issuesin News Information Technology. New Jersey: AblexPublishing Corporation.
12. OECD. 1981. Guidelines on the Protection of Privacy andTransborder Flows of Personal D.
13. Regan, Priscilla Marie. 1981. public Use of PrivateJrifomiation: A Comparison of Personal Information Policies inIheliniasLatalesanaglain. Ph.D. Dissertation, CornellUniversity.
14. Seoul Economic Newspaper. 1992. 'In-advanceCounterplan to Prohibit Abuses is Urgently Needed,' May 1.
15. Weeks, Raymond. 1989. personal Information: Privacy andthe Law. (Mord: Clarendon Press.
16. Warren, Samuel D., and Louis D. Brandeis. 1890. "The Rightto Privacy "Harvard Law Review. 14 (5).
17. Westin, Allan F. 1967. Freedom and Privacy. New York:Atheneum.
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Table 1: implementation of Data Protection Policy in Five Countries
Approach Agency of
Implementation
Characteristics of
Agency
Scope of
Regulation
United States
Incfividual rights.
(Privacy Act of
1974, 1980)
No separate
agency .
Individual suits
and oversight by
Congress and
OMB.
X Public only.
No distinction
between
computerized
and manual files.
Britain
Information
control.
(Data Protection
Act)
Data Protection
Registrar.
Registration.
Inspection.
Ombudsman.
(No enforcing
power)
No direct control
on public /
Indirect control
on private.
Computerized
only.
West Germany
Comprehensive
Information
Control with
Detailed Law.
(Data Protection
Act)
F:_s,..ral Data
Protection
Commissioner.
Supervision.
Inspection.
Ombudsman.
(Use of power
varies depending
on political
climate)
Public. (Private
by traditional
agency)
Manual and
Computerized.
Sweden
Information
Control.
(Data Act)
Data Inspection
Board.
Licensing.
Registration.
Supervision.
Inspection.
Ombudsman.
Independent)
No distinction
between public
and private.
Computerized
only.
Korea
Information
Control.
Mill of Data
Protection)
No Separate
Agency. (Ministry
of Government
Administration)
X Public only.
Computerized
only.
942
Building Successful Distance Learning Networks
John Mahoney and Richard BesseyNorthern Telecom Inc.Raleigh, N.C., USA
ABSTRACT
Education improvement in the United States is one of the most importantchallenges of the 1990s. Our industry has the means as well as theresponsibility to share in the improvement effort. One vital componentin the equation is Distance Learning, the ability to compress time andspace between teachers and students through the judicious application of
technology. This capability maximizes the best use of scarce, highquality educational resources and brings equity to students.
INTRODUCTION
Researcher: have discovered that learning isa transformational process in which newknowledge is built on previous knowledge andexperiences. By contrast, in part because ofthe classroom's isolation from the rest ofthe world, today's education is moretransmissional in nature, with knowledge fed"one-way" from teacher to student. Eventhough today's transmission media bring avariety of classes into schools and homes,this communication is still primarily one-wayas well. Here then is an excellentopportunity for interactive distance learningtechnology to erase the barrier of bricks andmortar as well as enhance thetransformational process.
Today the issue of isolation is ascomplicated as our ever-changing society.Although it sometimes is easy to think ofrural America as idyllic and complete, somerural students are among our mostdisadvantaged and isolated. Many rural areasare experiencing education crises that rivalthose of the inner cities. Declining ruralpopulation decreases funding; which leads tofewer classes. Students may not be able totake the special or advanced classes theyneed, and schools may be forced to close.Distance learning helps to make more classesavailable to students and, with theavailability of required classes, somecommunities can keep their schools open.
Even in crowded urban schools, some studentsmay experience isolation. While educatorsspend resources on the majority of students,the needs of exceptional students may beignored. And, although equity is a hotnational issue, the reality is that manyinner city schools still lack the resourcesof schools in wealthier districts. Distancelearning is helping to solve these problemsby providing college prep and advancedclasses from other high schools, communitycolleges, or universities, while freeingteachers to spend time with students who needmore personal attention.
So how does a Distance Learning network getstarted? The principle requirement is thebelief and commitment of all the stakeholdersinvolved, from educators, students andparents, to equipment and service providersand government officials. The coalition must
943
guide the process, set goals and priorities,pursue funding, and keep things moving. Thereasons for building the network must beabsolutely clear to every stakeholder, andall of those stakeholders should beidentified and involved at a very earlystage. "What are we trying to accomplish?"must be satisfactorily answered, and the goalmust remain uppermost through the entireprogram. This goal should not be stated interms of technology, for the technology mustalways be driven by educational needs ratherthan the other way around.
COMMUNITY INVOLVEMENT IS KEY
Northern Telecom, in association with variouscarriers, vendors, and educationalorganizations, has had the good fortune to beinvolved in the installation of severallaading networks. In Mississippi, theMississippi FiberNet 2000 project saw SouthCentral Bell, Northern Telecom, and severalother vendors install the first switcheddigital broadband education network. InNorth Carolina, the Vision Carolina networkwas installed in association with SouthernBell and Videoconferencing Systems, Inc.(VSI) and showed the power of true turnkeypartnerships. These networks have givenNorthern some insight into the building ofdistance learning networks, and one of themost powerful lessons to be learned is quitesimple: without a partnership the projectwill not succeed.
This need for a committed partnership amongall the stakeholders cannot beoveremphasized. A few of the constituentsthat must be involved are these:
- A carrier, such as a phone company oralternative carrier- Equipment vendors, such as Northern Telecom- Educators and administrators in theinvolved districts- Parents and students- Teachers' union- Educational TV authorities- Local businesses- Regional universities and colleges- State PUC officials- State, local and federal legislators
It is obviously impossible to satisfy everyone of these stakeholders in all respectsbut, at the very least, each of them must beconsulted and involved at the earliest
stages. Issues of territory andinstitutional sovereignty will sink adivance learning project faster than anytechnological hiccup imaginable.
The close involvement of all affected partieswill also pay benefits in terms of financialcooperation. If, for example, a network isplanned by a school district, the networkwill likely be underutilized during theevening. A local community college which isturning away students for lack of space wouldbe delighted to hook up to the network andpay "rent" for each evening student it couldaccommodate using the network. Since thejunior college would get tuition from thosestudents, both the college and the schooldistrict would profit. And multiple relatedapplications will be only a step away:
1. Medical training/consultation2. In-service training for teachers3. Teacher preparation before class4. Observation of student teachers5. Remote arraignment6. Continuing educeton7. Organization meetings after school
Each of the "consuming" stakeholders is alsovitally interested in a one-stop shoppingapproach to network installation. Despiteincreased technological sophistication on thepart of educators, they generally have nodesire to be their own systems integrator.Northern's success in this field is in nosmall measure due to the "turnkey" alliancesmade with the carriers in the networksinstalled so far.
The definitions of "Distance Learning" are asvaried as the number of people asked todescribe it. The range of possibilitiesvaries from correspondence courses taken viathe mail all the way up to live, interactiveclassrooms with full motion video, fullSpectrum audio, and integrated dataconnectivity. In between are an array ofone-way and interactive voice and videotechniques that vary in terms of theirquality and objectives.
A requirement for high video quality is basedon the fact that for day-in, day-outclassroom activity extremely high gradepictures are a necessity. For occasionalmeetings or limited mentoring applications,lower quality video can easily be tolerated.But experienced ITV (Interactive Television)
teachers express the need for picture qualitygood enough to see facial expressions and thenuances of body language. They want to seethe "glimmer of understanding" (or gleam ofmischief) in the student's eye. This is onlyachievable on higher bandwidth systemscapable of faithfully reproducing the videosignal. From the student's perspective, goodquality image and sound are taken for grantedas a simple extension of the home TVenvironment.
A digital fiber optic network is built onindustry-standard transport and switchingtechnology and takes advantage of definedinterfaces. The network can thus convert ananalog NTSC (National Television SystemsCommittee) video signal into a digital bitstream, transmit the data over the network,
and then reconstruct the signal back into theoriginal analog signal; or at least close tothe original. This process is done in adevice called a CODEC, an acronym forCOder/DECoder. All CODECs compress thesignal to some degree in this transformationto a digital format. However, the lower thebit rate of transmission, the more difficultis the task of faithfully transmitting andreproducing the original signal. The morethe compression, the more computer processingis required to accurately predictreconstruction of the original video image.This tends to drive up the cost of CODECs asthe transmission rate goes down.
CODEC technology has been advancing rapidlyand some of the algorithms for DS1transmission are subjectively acceptable forcertain applications. However, the imagesstill suffer the phenomenon of "artifacts", ajerky motion caused by lack of image data,and cannot achieve full luminance and clarityavailable on NTSC television. Often theseDS1 pictures are degraded even further whenvoice traffic, transmitted over the samebandwidth, steals image data for its own use.In addition, DS1 compressed video does nothold up well on very large televisionscreens, which have been identified as anecessity by educators to achieve the desiredsense of presence in the classroom. This isnot to demean lower bandwidth compressiontechniques. The sophistication of thosealgorithms is not to be denied, and there isa host of applications where compressed videois valid, not the least of which isvideoconferencing. Dialable WidebandServices, desktop video, multimediaapplications, and other services represent ahuge market for video.
Why digital fiber instead of analog? One ofthe advantages of digital fiber is the highpicture quality. Even over long distances,digital fiber networks produce clear, crispvideo images. Another advantage of digitalfiber is that the piece of equipment thattransmits the signal over the fiber also actsas a multiplexor. This means that thedigital video signal can be combined withother digital signals--permitting entry tothe multi-media world--and transmitted overthe same fiber.
The most compelling argument for switcheddigital broadband networks is evolution ofcommunications itself. The networks of the90s will be based on SONET (SynchronousOptical NETwork) technology, which is arevolutionary way of transmittinginformation. The SONET environment willeasily support digital video services as theyemerge. Digital video represents the nextmajor wave in imaging services which willallow Isers to choose the picture qualitythey wish. This "scalability" will requirethe network to deliver bandwidth-on-demand sousers can, for instance, watch CNN at NTSCquality and then watch a movie at HDTVquality and format. Only the flexibility ofa SONET architecture will support this typeof on-demand delivery, and only digital videowill be scalable.
SWITCHED NETWORKING
In small, point-to-point networks each school
944c.;
is connected to every other school by aseparate fiber. As the networks grow, thenumber of fibers and the quantity ofequipment become expensive and unwieldy. Ina switched network though each school isconnected to a centrally-located switch.Rather than have a strand of fiber that goesdirectly from one location to another, thisspecial type of switch can switch the videosignal much like a normal telephone companycentral office switch. The versatility addedby the switch makes the network even moreusable by allowing simultaneous classes tomultiple schools.
As shown in Figur* 1, each link has a port onthe video switch so that any classroom can beconnected to any other classroom or broadcastto multiple classrooms. This any-to-anyclassroom connectivity capability is anextremely powerful and flexible feature ofthe system. The switch is under control of acomputer which directs connections (time,day, origination point, etc.) for each classsession. The switch control computer is incommunication with a computer in eachclassroom so that teachers or facilitatorscan control certain aspects of the classsession. The switch controller also keeps alog on system performance and alarmconditions. An additional feature, called"quad-split" or continuous presence, allowsup to four classrooms to participate in openinteraction without manual intervention tocontrol the audio and video.
Data connectivity and ancillary voicecommunication are supported through aninterface called the Data Comm Sync unit.With up to four DS1s which are embedded inthe same DS3 as the video and audio, data canbe separated from the video by the DSC unitat the central switch site for furtherrouting or switching. Teachers or studentscan access external d.ta bases such aselectronic mail, library resources, etc.This platform is ideal for supportingcomputer based student response systems.
Because the classroom (a typical example isshown in Tigure 2) is the point whereeducation meets technology, the classroom'slayout and design are critical. It is herethat the "turnkey" effort of the systemprovider must be most evident, beginning witha site survey. Every classroom will bedifferent in terms of size, floor plan,lighting and acoustic quality, and the teammust design the best layout for each room.For example, cameras should be placed closeto monitors to improve eye contact. Becausea natural reaction is to look directly at themonitor displaying the distant person in theconversation, placing the camera next to themonitor relieves the near end person fromhaving to consciously think about lookingdirectly at the camera. Lighting, acoustics,and audio systems must come under the samescrutiny.
Choosing the proper video equipment isanother important aspect of good interactiveperformance. Although cost is major concern,the cheapest bid is not always the rightchoice for the video classroom setup. Thisis particularly true for interactive distancelearning applications where picture quality
945
is important. The equipment in the classroomshould be matched to the system andapplication. For instance, in the VisionCarolina system three-chip CCD cameras werechosen for picking up student and teacherimages because of their high resolutionqualities. Since the fiber network (and DV-45 CODEC) can easily reproduce the fullmotion, full bandwidth signal, the three-chipdesign was properly matched to the system.Fast action motor drives are required for thepan, tilt, zoom, and focus functions of thestudent and teacher cameras so that delaysare minimized in focusing on specificstudents.
Selecting the television monitors forclassroom viewing is also an economic andsubjective exercise. In general, the largerthe screen the better, but this brings in theeconomic consideration. In most new systems,it is recommended that two twenty-seven inchmonitors be placed at the front of theclassrooms for student viewing and onethirty-five inch monitor be placed at theback for teacher viewing.
Classroom equipment is controlled from asmall keyboard that interfaces to the videoand audio electronics. A facilitator canoperate camera controls, image selection,graphics camera selection, and audiocontrols. Camera position can bepreselected, allowing one-button aiming whenmoving the camera from one student toanother. The computer-based, classroom videocontroller and its interaction with thebroadband switch provide teachers with theversatility that makes Northern Telecom'sdistance learning networks so unique.Classrooms can operate in one of severalmodes (Lecture, Speak, Listen, Interactive,or Continuous Presence (Quad Split)), and theteacher or classroom facilitator uses aMacintosh equipped with a touch screen tocontrol video access to other classrooms.The keyboard control system and the classroomcontroller are both designed to let theteacher manage the network without a costlycontrol room setup.
And to complete the turnkey service, networkbuilders should be prepared to providetraining, service, curriculum adaptationassistance, and go well beyond the classicaldefinition of "systems integration" in termsof user support.
While all of this sounds long and laborious,the long-term benefits to all parties areundeniable. A community coalition foreducation yields a community network thatlocal and regional businesses will want toaccess. And many such networks,interconnected across the country, willenhance our competitiveness at a time whenit's truly needed.
ClassroomMonitors
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Figure 2
f
946`
2. OVERVIEW
CREATING AN ISDN DISTANCE EDUCATION NETWORK
Betty Mitchell, Open Learning AgencyDeb Reidlinger, B.C. Telephone Company
Burnaby, British Columbia, Canada
1. ABSTRACT
The Open Learning Agency (OLA) of British Columbia, Canada, in cooperation withB.C. Tel, MPR Teltech and the Vancouver School Board, conducted a major project in
1991/92 to test the ability of Basic Rate ISDN for distance education applications. Thispaper reports on the results of the ISDN Distance Education Network Project and
discusses network configuration, peripheral equipment set-up, instructor preparationand instructional applications.
development and implementation.
The team approach provided 'forums' for educator/technologist interaction, resulting in an appreciationof the different knowledge and skills of participantsand a technology and network that over time evolvedto better meet instructional needs. At the centre ofthe process was the "Champion" whose role was tomanage the project and to look beyond the specificproject findings to its impact on distance educationcourse delivery in B.C. (See Figure 1).
During 1991/92, the Open Learning Agency (OLA)tested the use of B.C. Tel's new ISDN (IntegratedServices Digital Network) service to link four adultlearning centres in the Vancouver School Board (VSB).With extra telephone line capacity made possible byISDN and new voice, data and image conferencingworkstations created by B.C.'s MPR Teltech, studentsdialed into classes across town.
ISDN and multi-media workstations enabled schoolboard centres to increase course offerings and shareexpertise. Courses traditionally not offered at centresdue to low enrollment were offered to individual orsmall grouts of students via the ISDN workstation.Students working on independent study material alsoused the workstation to "work through" their problemwith a subject specialist at another centre.
OLA, along with Simon Fraser University, used thisproject to evaluate how ISDN communication servicescould ultimately benefit distance education studentsin both urban and remote areas.
3. THE PARTNERSHIP MODEL
The ISDN Distance Education Trial was based on acollaborative model which included the VancouverSchool Board, Open Learning Agency, MPR Teltech,B.C. Tel, Simon Fraser University and funders:Communications Canada, and the British ColumbiaMinistry of Advanced Education, Training andTechnology. Each organization assumed particularroles and responsibilities yet each also participated incross-organizational planning and implementationteams.
F: pm the outset of the project it became apparent thatthe trial was less about testing the ISDN service andthe multi-media workstations and more aboutdetermining, integrating, and evaluating theinstructional capabilities they provided. This meantthat all those connected with the project:stakeholders, teachers, learning centre coordinators,and students must also be engaged in p: .ject design,
947
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By collaborating to identify instructional needs andmatch these needs with system and technologycapabilities, project participants were able to makeinformed decisions regarding the impact of systemson instruction and were able to input needed changesinto the network and technology configuration. Thepositive relationship that developed among thepartners was the 'cornerstone' of the project.
4. INSTRUCTIONAL APPLICATION
The Program Team decided on applications to testthree instructional methodologies: one-on-onetutorials, small group seminars, and an extendedclassroom (large group). The program scheduleincluded Math tutorials in Fall 1991 followed by theintroduction of small group Math seminars andHistory lectures in Spring 1992.
Instructional sessions took place starting in lateOctober 1991 through to summer 1992. Starting in
October 1991 independent study students in Mathwere able to use the workstations to "work through"problems with content experts at other centres. InJanuary 1992 these help sessions continued with theaddition of formal Math and History courses. Twiceweekly Grade 11 Math tutorials linked sites for smallgroup interaction while a History grade 12 lecturestyle course tested the large group extended"classroom" capabilities of ISDN and multi-mediatechnology. (Note: Due to problems with the graphicstablet interface for the Math sessions, the class waschanged to a face-to-face format mid-semester.)
Teachers in the selected subject areas were contractedto deliver the courses, and were trained on DOS,Windows, and graphic creation software to assistthem with materials development. Training also tookplace in August and September 1991 on the mechanicsof using the workstation and input devices such as thescanner, camera and laser disc. Following these"hands-on" sessions instructors participated in a seriesof instructional design workshops on multi-mediacourse development. Course-related activitiesinvolving teachers and students included tutorials,problem solving sessions, presentations andinteractive small and large group participation.
Fall 1991
Spring 1991/Summer 1992
RolandMA-12CSpeaker
Site-to-site Senior Math tutorials.Site-to-site Math tutorials.Math group seminars(to March 1992).History lectures (extendedclassroom format).
Commodore 1950Multi-sync. Monitor
5. THE APPLICATIONS SYSTEM
The workstations consisted of IBM-compatible 386PCs running Windows 3.0. The components of thebasic workstation are illustrated in Figure 2. At theinstructors' site, the basic configuration wasaugmented by an Epson color scanner and VCR forimage input and recording. A larger 26" RCAmonitor was also used in some sites. PC cards weredeveloped by MPR Teltech, a member of the B.C. Telgroup. The cards provide JPEG-compatible imagecompression, high quality 7khz audio, and ISDNaudio and data communications.
MPR Teltech also developed the application software.Three major features are provided: imageconferencing, file transfer and high quality audio.
The image conferencing facility enables two or moreworkstations to share high resolution imageinformation. Images may be captured from connectedscanners, VCR's, video camera and laser disc players.All participants in an image conference are able todiscuss a common image displayed on their terminals.A full set of drawing tools are provided; as one personannotates, the image is updated simultaneously onthe other terminals.
High speed file transfers can be simply performedbetween workstations. Images can be pre-shipped tominimize wait times for large image files during aclass. An image not pre-shipped is automaticallytransferred when referred to during a conference.
CommodorePC60-111('386 PC Tower)
Keyboard
Sum ma Sketch IIGraphics Tabletand Stylus
Note:
Shure 819Microphone
Symetrix SX202MicrophonePreamplifier
PC 60-111 is equipped with MPR Teltech's MI-100, MI-200, MI-300, MI-302,MI-700 cards and MI-800 software
Figure 2. Multi-media Distance Learning Workstation
948
There are two types of audio calls available: standardand high quality. Standard audio calls allow users toparticipate in calls with other ISDN and non-ISDNtelephones as well as to the other distance learningworkstations. High quality audio calls use studioquality microphones, high performance speakers, anda digital acoustic echo canceller to provide a handsfree 7khz audio connection among workstations. Thehigh quality audio significantly improved theeffectiveness of the audio component in coursedelivery.
The communications interface was provided by cardsand software developed by MPR Teltech. The MI-300ISDN Audio Data Communication card is a terminaladapter card which supports both audio and datainterfaces to both ISDN Basic Rate lines and switched56kbps data lines. These cards were also utilized inthe multi-point bridge, another PC which providesthe voice and data bridging over ISDN lines.
6. THE COMMUNICATIONS NETWORK
The ISDN Distance Education Network comprisesfour Adult Learning Centres in the Vancouver, B.C.area, plus a communications bridge which links them.(See Figure 3). ISDN Basic Rate was chosen because itsupports audio and image conferencing, and becauseit will be available at a more affordable price than theemerging broadband technologies.
Early in the project it became apparent that onecannot just "sell ISDN". Instead, ISDN is just onecomponent in a "package of capabilities" whichcomprise the distance education application. Several
CARNEGIELEARNINGCENTRE
ROBERTSLEARNINGCENTRE
technologies and several functional groups had to bebrought together to make the project viable.
An early taste of reality faced the project when itbecame apparent that one of the learning centres wasout of reach of B.C. Tel's ISDN switch. Since theinstructors taught from that learning centre, it wasnecessary to incorporate it into the network. Thesolution was to use switched 56kbps data linesextended beyond their normal reach through the useof intelligent channel banks.
This "special assembly" introduced the project to newchallenges, but ones which are representative of thenetworks of the nineties:
Additional application development wasrequired to support switched 56kpbs data linesas well as ISDN lines.It was necessary to ensure that the networksupported the interworking of ISDN andswitched 56kpbs data lines.The special assembly demanded special testingtechniques in the event of trouble on the lines.
7. OUTCOMES
The final project report "The ISDN Distance LearningTrial" prepared by D. Black and L. Harasim, 1992,reported on a number of key findings for projectparticipants:
A. B.C. Telephone learned more about theeducational market for ISDN and were able to resolvetechnical and operational problems.
ISDN
BR DGEISDN LAB
Figure 3. Adult Learning Centre Network
949
HASTINGSLEARNINGCENTRE
JOHN OLIVERLEARNINGCENTRE
"ISDN has potential in this marketplace. From aB.C. Tel perspective we have a better feel for whatkinds of benefits and problems relate to themarketplace, and the importance of geographicavailability."
"Definitely it helped us sort out technical andoperational issues and problems in ourprovisioning and maintenance of the service,another of our objectives."
"It also confirmed the inter-operability of Switch 56and ISDN, an important finding given that Switch56 will be a necessary component in the ISDNnetwork for some time, at least for distanceeducation applications."
Switch 56 is a technical alternative, and in the shortterm it is a necessary component in B.C. and Canadain applications such as this. Right now Switch 56 ismore broadly available but that will change with time.Switch 56 is more expensive to provide and buy, andit isn't as versatile as ISDN capable lines.
B. The major findings of the trial for MPR Teltechare:
High quality audio is required. Standard audioconnections do not offer an adequate level of soundquality for a multiple site conference.
The 26 inch TV monitors should be used forconferences with more than three or fourparticipants at a site.
A 200 megabyte hard drive, at the very least, isrequired for this application; an erasable opticaldrive, capable of storing 600 megabytes on a singleoptical disk is preferable.
The graphics tablet is not acceptable for theteaching of mathematics online.
The trial "served to drive home the point that acustomer needs a systems integrator to look afterall aspects of a system such as the four workstationsand conference bridge ... A customer needs to referany and all troubles to a single point of contact.This role was assumed by MPR during this trial butthe amount and type of support had probably beenunderestimated by MPR." (MPR, Observations on theMultimedia Distance Learning Workstation, August,1992)
C. The educational partners, OLA and VSB, receivedvaluable feedback from students and instructors.
Students were asked to rate aspects of the course: thestability and effectiveness of the learning centrenetwork; the degree of student interaction and classparticipation; and other course related issues, on ascale of 1 to 5 (where 1 is terrible and 5 is great), and
to compare the online course to face-to-face coursesthey had taken.
Due to changes mid-semester in the Math classformat, student information was collected from the"Western Civilization" class only.
The course completers gave the ISDN network andthe multimedia workstations a positive evaluation. Ascan be seen in Panel 1 of Figure 4, the audio qualitywas the aspect of the system most likely to be ratednegatively, while the video quality was rated assatisfactory or better by all respondents. The negativeevaluation of the audio quality reflects the fact thatthe high quality audio system was not installed untilthe last online class.
1terrible
2 3 4 5great
1. ISDN Networka) technicalperformance
1 4 6 4 1
b) audio quality 4 6 6c) video quality 4 7 5d) ease of use 1 4 9 2e) set-up ofworkstation
2 2 9 3
f) ISDN classes 1 1 8 4 1
2. Interaction & Participationa) studentinteraction
1 4 9 1
b) studentparticipation
2 4 7 3
c) individualparticipation
5 3 8
d) access to teacher 3 4 I 93. Othera) lectures 1 4 7 4
teacher 1 4 11c) visuals 1 6 2 7d) course content 1 4 5 6e) work load 1 4 6 40 assignments 1 4 7 4g) group work 1 4 1 7 3h) field trips 5 3 8i) studentpresentations
1 4 3 8
j) textbook 6 1 7 1 1
Figure 4. Student Evaluation of the Western Civilization Course
Most of the completers felt that the degree of studentinteraction and participation was satisfactory. As canbe seen in Panel 2 of Figure 4, most rated the amountof student interaction and participation assatisfactory, and all said that their opportunity forpersonal participation in the ISDN classes wassatisfactory or better.
The amount of interaction and participation in theISDN classes compared favourably with face-to-faceclasses taken by the students. As can be seen in Figure5, almost all of the respondents said that the amountof interaction between students, the amount ofstudent participation, and the opportunity forpersonal participation was the same as or better thanin face-to-face courses they had taken.
950 r-d ,
Overall, the student evaluation of the ISDN classeswas favourable, as can be seen in Figures 5 and 6.Almost all of the students interviewed said that theISDN course was the same as or better than othercourses they had taken, that they would recommendthe course to others, and that they would take anotherISDN course.
Worse Same Better
a) student interaction 3 5 8
b) student participation 2 11 3
c) student participation 2 8 6
d) access to teacher 3 7 6
e) lectures 3 9 4
0 assignments 3 9 4
g) group work 3 6 7
h) student presentations 6 10
i) student enjoyment of the course 2 1 13
j) course as a whole 2 10 4
Figure 5. Student Evaluation of the Western Civilization CourseCompared with Other Courses
No Maybe Yes
a) would recommend the ISDN class
to others
2 1 13
b) would take another ISDN course 3 13
Figure 6. Student Evaluation of the Western Civilization Course(Recommend to Others and Take Again)
Teachers who used the system reported that:
Class preparation time increased.
"To set up a slide from scratch can take 20 - 30minutes. With practice it became 15 minutes."
"Scanning images took about 30 minutes to processand save. With practice this was reduced to 15 - 20minutes."
"Copyright was a real issue and meant that muchof the pictures, diagrams and text needed to be re-produced by hand."
In all, the Western Civilization teacher found the on-line dasses the same or better than instructing face-to-face.
WesternCivilization
a) amount of student participation sameb) quality of student participation samec) amount of student interaction samed) quality of student interaction samee) amount of teacher-student interaction betterf) quality of teacher-student interaction betterg) level of student interest sameh) degree of student involvement samei) quality of student work samej) pace of instruction worsek) amount of teacher preparation time worseI) student enjoyment of the course betterm) overall sameFigure 7. Teacher Evaluation of Online Course Comparedto Other Courses
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8. THE FUTURE
In Phase 2 (September 1992 - January 1993) theWestern Civilization and Math courses will berepeated. As stated in the final project report, MPRTeltech and the project team are now making anumber of changes to the multimedia workstationsfor Phase 2 of the project
a light pen will replace the graphics tablet as theprimary input device for the instructor. A 31 inchmulti-sync monitor will be added to theinstructor's workstation. (see Figure 8)
One wireless mic forInstructor, and onemic centrally locatedin the classroom
Figure 8. Phase 2 Instructor Workstation
the image conferencing application will be revisedto maximize use of the screen area on the monitor;multiple, scrollable "whiteboards" will also beavailable.
a wireless microphone will be used by theinstructors. One microphone will be used to pickup audio from students at the instruction site; thisshould make it easier for remote students to hearon-site students, and should facilitate greaterstudent interaction between sites.
The workstations at the remote sites will beinstalled on top of a round table and a light penwill be used as the primary input device. This newconfiguration should allow a group of fivestudents to interact comfortably with theworkstation. (see Figure 9).
As we look further into the future, this project hasdemonstrated that the capabilities of ISDN combinedwith the capabilities of multi-media technology willprovide new valuable tools for distance educators.Research must continue to explore instructionaldesign issues around combinations of media, studentgroupings, and types of interaction.
(.1
Pore t. Pima 2 ISDN Remote Site Workstation Set-Up
952
9. CONCLUSION
In the 1990's, we are moving into a new era ofcommunications. The convergence oftelecommunications with information technology hasenabled applications barely dreamed of as little as fiveyears ago. These technologies offer powerful newcapabilities in support of applications such as distanceeducation.Yet, this new world also brings new complexity. Withintelligence in both the network and the personalcomputer, and with these technologies being adoptedin new fields, a successful undertaking demands anew way of thinking and working together.Parnerships aie mandatory. Sharing of knowledgeand experience is critical. The application becomespart of the network, and vice versa. Networkproviders, equipment vendors and applicationdevelopers must work together in support of the userof the application.
The ISDN Distance Education project, a collaborationof several British Columbia companies andeducational institutions, is an example of this newreality.
MULTI-CULTURAL ISSUES IN THE DELIVERY OF DISTANCEEDUCATION
By Barry WillisStatewide Director of Distance Education
University of Alaska SystemAnchorage, Alaska USA
ABSTRACT
By any measure, teaching at a distance is challenging. Thesechallenges increase exponentially when instruction is delivered toa multi-cultural audience. To increase instructional effectiveness,distance educators must gain an understanding of the uniqueproblems and opportunities facing the multi-cultural learner.Towards this end, this paper explores a number of strategies thatcan increase distant faculty effectiveness in a multi-culturalsetting.
Without exception, effective distanceeducation programs begin with carefulplanning and an understanding of courserequirements and student needs and multi-cultural characteristics. Appropriatetechnology can only be selected once theseelements are u- :'erstood in detail.
There is nothing magical about effectivedistance education programs. They don't justhappen, they are planned with an attention todetail often exceeding that required intraditional face-to-face teaching.
Before faculty and course developers canadequately meet the diverse needs of multi-cultural learners, they need to thoroughlyunderstand what makes distance-deliveredinstruction different from face-to-face teaching.
DISTANCE IS DIFFERENT
Whether they realize it or not, effectiveclassroom teachers rely on a number of visualand unobtrusive cues and clues from theirstudents. A quick glance, for example, revealswho is attentively taking notes, pondering adifficult concept, or enthusiastically preparingto make a comment. The student who isfrustrated, confused, tired, or bored is equallyevident. The attentive teacher consciously andsubconsciously receives and analyzes thesevisual cues. As a result, the delivery ofinformation, and often the course content itself,
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is adapted to meet the unique characteristicsand needs of the class during any particularlesson (1).
The student coming to class withorganized class notes, a well-used text, andobvious enthusiasm reveals something quitedifferent from the withdrawn student arrivingwithout class materials or a receptive attitude.Again, alert face-to-face teachers factor theseunobtrusive cues into their class planning anddelivery.
A traditional classroom setting offers theteacher and students many opportunities forinteraction outside of class. Maybe they talkbetween classes, meet on a class assignmentover lunch, or have mutual interests. Justliving in the same community provides acommon frame of reference that leads tounderstanding and familiarity.
Finally, face-to-face interaction takesplace without any technological linkage.Communication is free Lowing andspontaneous, without the need to manipulateswitches, ignore static, look into a camera, orrely on a piece of technical equipment linkingteacher and students for purposes ofcommunication and feedback.
In contrast, distance teachers have few, ifany, visual cues. Even the visual cues that doexist are filtered through technological devicessuch as video monitors. The effortless flow of astimulating teacher-class conversation can feel
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contrived when spontaneity is altered bytechnical requirements and distance.
Without the use of a real-time visualmedium such as television, the teacher receivesno visual information from the distar sites.The teacher never really knows if, for example,students are asleep, talking among themselves,or even in the room. Separation by distancecan also affect the general rapport of the class.Living in different communities, geographicregions, or even states deprives the teacherand students of a common community link.
Until the faculty member becomesfamiliar with the delivery technologies beingused, there is vague discomfort that theinstructional message is not coming across asintended, or that the technology is reducing theeffectiveness of the course for teacher andstudents alike.
Distance education is challenging underany circumstance. When combined with thechallenges of multi-cultural teaching andlearning, however, it can be an especiallydaunting task. Still, much of what we knowabout distant teaching in general can beapplied, with some modification, to the multi-cultural classroom. When this is done withsensitivity and compassion the end result canbe effective and rewarding.
Over the past several years, researchexploring effective distance teaching strategiesas well as student attitudes towards the use ofdistance delivery methods in a multi-culturalsettings has resulted in some fairly consistentfindings. These findings are worth consideringwhen planning and implementing distanceeducation programs for the multi-culturallearner.
Select Contextually Relevant ExamplesInstruction is presented through the use
of content examples. These content examplesmust be relevant to the intended audience.This is often difficult for teachers who havelittle background and experience with themulti-cultural learners they'll be teaching.
Instructors tend to teach using the sameexamples that were used when they receivedtheir content area training. For distancelearning to be effective, however, instrur*orsmust discover examples that are relevant totheir multi-cultural distant learners. A relatedstrategy is to encourage students to find ordevelop culturally relevant examplesillustrating the content points made in thecourse.
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Understand Urban & Rural DifferencesUrban students often have similar
backgrounds and a common frame of reference.This enables the instructor to use "mass media"instructional approaches and technologies suchas prepackaged telecourses that capitalize onthis common background. In contrast, rurallearners often have culturally diversebackgrounds and limited shared experiences.Meeting the needs of these students typicallyrequires a more targeted instructional andtechnological approach that enables theinstructor to individualize distance teachingstrategies to meet specific needs.
Family Support Is CriticalDistant students, especially in multi-
cultural settings, often balance manyresponsibilities, including employment andraising children. Often their involvement indistance learning is unknown to tnose theywork with locally, and goes unnoticed at home.Student performance is enhanced if learnersset time aside for their instructional activitiesand if they receive family support in theiracademic endeavors.
Create Suitable Learning EnvironmentsDistance learning is enhanced when local
facilities are available for class and study.These facilities should include adequatelearning resources (voice, video, and data) anda communal learning environment.
Provide Timely FeedbackTimely and informative feedback is
essential. It is critical for teachers to respondto students' questions, assignments, andconcerns in a personalized and pleasantmanner, using appropriate technology such asfax, phone, or computer. Informativecomments that elaborate on individualperformance and relate content to the student'scultural context are especially helpful.
Promote Student-Student InteractionStudents in multi-cultural learning
environments often learn most effectivelywhen they have the opportunity to interactwith other students with shared and diversebackgrounds. Interaction among studentstypically leads to group problem solving andshould be encouraged. When students reside indifferent rural settings, appropriate interactivetechnology such as electronic mail should beprovided to encourage small group and
individual communication. Considerassignments in which students from differentcultural backgrounds work together and thenreport back or present to the class as a whole.
If multiple students reside in the samecommunity, every effort should be made tohave them participate as a class as often aspossible. This group interaction is critical, evenif available technology permits individualparticipation from home.
Enhance Student MotivationHigh student motivation is required to
complete distant courses because the day-to-day contact with teachers and other students istypically lacking. Insteuctors can help tomotivate students by providing consistent andtimely feedback, encouraging discussion amongstudents, being well prepared for class, and byencouraging and reinforcing effective studentstudy habits.
Foster Face-To-Face ContactDistance delivery is no replacement for
in-person contact. If possible, teach fromdistant sites early in the course and meetindividually with students. If this isimpossible, arrange to meet with studentswhen other business brings them to yourcommunity or vice versa.
Provide On-Site FacilitationAn on-site facilitator who shares the
same cultural background as the distantlearners can be an effective bridge linkingteacher and students. While a facilitator withcontent expertise is especially valuable, evennon-content facilitation can help the instructorgain a better understanding of the students anddevelop more responsive instruction. This isespecially critical when urban instructors froma different cultural background teach ruralstudents.
Reduce AttritionStudent attrition is typically higher in
distance-delivered courses than in on-siteinstruction. This can result from variousfactors, including limited student advising andcounseling, poor family support, inadequatefeedback, late return of assignments, and lackof personalized teacher-student and student-student interaction. The best way to reduceattrition is to treat each student as anindividual, communicate with them often, andassist in establishing local or regional studentsupport networks.
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Help Students Keep UpUnclear performance expectations and a
failure to keep up with assignments early in acourse are primary causes of student attrition.Providing adequate time to completeassignments and making performancestandards explicit, especially early in a course,will discourage students from falling behind.
Put Time Into Course AdaptationEven a course taught often in a traditional
format will typically require significantadaptation for delivery at a distance. The sameis true for newly developed courses and isespecially apparent when the course will bedelivered to a multi-cultural audience.
Provide Advising And CounselingAs with traditionally delivered
instruction, advising and counseling is criticalfor the distant learner. The distances involvedand the lack of common experiences amongcounselors and students makes the task of
-providing effective advising and counselingeven more challenging. When possible,counselors should share a common culturalbackground with the students they will beadvising.
To enhance advising and counseling at adistance, consider using a toll-free phonenumber before, during, and after the coursehas been completed.
Be Sensitive To Hearing ProblemsDistance learning is often critically
dependent on a student's hearing ability.Unfortunately, hearing problems typically goundiagnosed. Occasionally, both in and outsideof class, ask students if they can hear clearlyand make arrangements for hearing testswhere potential difficulties exist (2).
Deal Directly With Technical ProblemsRegardless of the cultural background of
the student's and the technology being used,technical problems will occur. Discuss potentialproblems and solutions with students prior tothe start of class. Focus on joint problemsolving, not placing blame for the occasionaltechnical difficulty.
Provide hands-On Training For FacultyIn-service training for faculty on the
technical equipment used in the course(audioconferencing, television, computing, etc.)is essential. This trajning should be practical innature and include hands-on experiences (3).
In addition, it is important for faculty tounderstand the roles being played by otherteam members, such as control room personnel(directors, camera operators) and supportservice staff (materials duplication anddistribution personnel)..
Understand Communication DifferencesBe sensitive to different communication
styles and varied cultural backgrounds.Remember, for example, that students mayhave different language skills and that humoris culturally specific and won't translateequally well to all students.
Increase Cultural SensitivityDistance faculty must be trained to
understand and appreciate the diversebackgrounds and needs of multi-culturallearners. Counselors and peers who share thecultural backgrounds of the target audience canprovide insights, as can representatives of thetarget audience itself.
In Summary
There is no denying that effectivedistance education in a multi-cultural setting ischallenging to both faculty and students. Itpresents obstacles to overcome and logisticalconcerns to address. Still, many feel theopportunities of .ered by distance educationoutweigh the obstacles. In fact, manyinstructors feel that the experience of teachingat a distance improves their overall teachingability and cultural sensitivity.
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References
(11 Sponder, B. M. (1991). Distance educationin rural Alaska: An overview of teachingand learning practices in audioconferencecourses (2nd Ed.). Fairbanks, AK:University of Alaska Fairbanks, Center forCross-Cultural Studies.
(2) Willis, B. D. (1992). Effective distanceeducation. A primer for faculty andadministrators (2nd Ed.). Fairbanks, AK:University of Alaska Fairbanks, Center forCross-Cultural Studies.
(3) Willis, B. D. (1993). Distance education: Apractical guide. Englewood Cliffs, NJ:Educational Technology Publications.
ACADEMIC INTERNETWORKING IN MEXICOThe world at the reach of a keyboard
Mario M. Arreola-SantanderConsorcio Red UNo
Mexico City, Mexico
ABSTRACT
This paper presents the development of the Mexican Academic Internet,as a result of the growing telecomunications infraestructure of thecountry, Government support and converging telecommunicationstechnology.
BACKGROUND
Before 1985 the data communicationsinfrastructure in Mexico consistedmainly of switched telephone or leasedlines, and TELEPAC an X.25 packet switchpublic data transport network providingspeeds suposedly up to 9600 bps. Thedomestic Morelos Satellite System (MSS)launched in mid '85 provided Ku & C bandcapability giving way for satellitebased data networks at speeds tipicallyof 19200, 64000 & 128 Kbps. It was notuntil 1990 That TELMEX, the monopolyphone company began offering digitallinks up to El speeds via its overlaydigital network mainly in Mexico Cityand Monterrey, later Guadalajara andother cities were included.
ITESM network
The Instituto Tecnologico y de EstudiosSuperiores de Monterrey (ITESM), asuccesful private academic institutionbased in Monterrey was founded by GrupoVisa one of the leading Industrialgroups of Mexico. The ITESM System hasan operating budget of $319.2 MDD, with57000 students, 4000 CPUs includingMainframes, Workstations and PCs, and 26campuses spreaded all over the country.A Morelos Satellite based network wasthe ideal solution to its communicationneeds.
The ITESM began communications tests in1986 with SCPC technology at 64 Kbpsusing 1.8 m antennas. By 1987 they had 9nodes up and running and by 1990 thefull 26 bridge based Campuses wereinterconnected over the MSS. TheSystem's Hub antenna is located at theEstado de Mexico Campus. As for the landbased communications they leased fromTELMEX an El link between Estado deMexico and Monterrey and a 56 Kbpsdedicated line between Monterrey and ANSat Houston Texas were they connect tothe Internet. A second link to the
Internet goes from Estado de MexicoCampus via satellite to the National
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Science Fundation in Boulder Colorado at64 Kbps, assuring in this way alternatepaths.
The communications protocol of choice isTCP/IP. The current aplications offeredare the tipical E-mail, Remote Terminal,and File Transfers, plus education viaSatellite: a voice and image applicationnamed "Sistema de Interaccion Remota" ineffect since 1991, it is based on
Spectrum Saver CLI Full Motiontechnology.
UNAM network
The Universidad Nacional Autonoma deMexico founded in 1551 as the Royal andPontifical University of Mexico,nowadays with a population of 350,000students, is the largest and oldest inthe continent. At the end of 1989 anambicious project was set up tomodernize the University's voice anddata communications infrastructure to becompleted in 36 months.
At the end of 1991, together with theinstalation of what would be the firstsupercomputer in Latin America a CRAYYMP, the Mexico City Campus LAN beganswitching from a coaxial cable basedBridged Network to a Fiber Optic basedMultiprotocol Routed Network with anFDDI backbone between the three mainnodes: DGSCA the Cray site at theAcademic Computing Center; ASTROS, atthe Astronomy Institute where the linkto the NSF via satellite was set up fewyears before, and IIMAS the Institutefor Applied Mathematics and Systems. Theinfrastructure has an instaled capacityto handle 110 LANs. Actually itinterconnects 1400 computers within theUNAM.
The Fiber Optic cables run a distance of62.5 Km. In each cable there are 8
fibers giving a total distance of 500 Kmof operational Fiber.
C
In the Metropolitan Area Network thereare seven UNAM instlations linked tothe Ciudad Universitaria campus at thesouth of Mexico City. Four of them viamicrowave links with speeds ranging from2 to 10 Mbps and three other via TelmexEl links.
There are several academic and researchinstitutions connected via serial linksto UNAM network, as it is the Colegio deMexici: Instituto Mexicano del Petroleoand others.
In its Wide Area Network there are 12Satellite Earth Stations using FDMA, allover the country providing connectivityto other UNAM locations as well as toother academic networks as MEXNET viaITESM, RUTyC via U. de Guanajuato andSESIC, and the link to NSF.
Connectivity to other Academic networks:To NSF-net via satellite link to NCAR atBoulder CO., also via CICESE Ensenada-SDSU San Diego, and via ITESM Monterrey-ANS Houston TX.
This network provides for remote accessvia plain old telephone asynchronousserial lines through a bank of modemsconnected to a communications server.
RED UNIVERSITARIA DE TELEINFORMATICA YCOMPUTO (RUTyC)
The Ministry of Education'sUndersecretariat for Higher Educationand Scientific Research (SEP-SESIC) putforward a project to build a satellitebased network with the StateUniversities.
It began in 1991 with a point to pointSCPC star shaped pilot network with fivenodes: U. de Guanajuato (Salamanca), U.de Colima (Colima), U. de Chiapas(Tuxtla Gz.), U. de Tabasco(Villahermosa), U. de Nuevo Leon(Monterrey) and SESIC (Mexico City). TheNetwork 'Control Center was located atSalamanca, mainly because of itsgeographical location at the center ofthe country as well as its potential forqualified human resources.
For the complete network, a study doneby SESIC's Advir-rs revealed thebenefits of using a Ku band, TDMA, VSATtechnology, leaning on the X.25 serviceprovided by Telecomm's operated MorelosSatellite System. For this second phaseof the project, ownership of the
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satellite communications equipment,savings in monthly fees and not havingto pay for an expensive Hub antennawhere key factors, offseting the may beslow speed of the X.25 transmission. Theprotocol of choice was TCP/IP over X.25for the WAN.
A third phase may include terrestrial Ellinks between four to five maincomputing centers that will act as
feeder nodes for nearby institutions,provide redundant data paths and benefitfrom their routers infrastructure.
A fourth phase, or when traffic demandedit, may include a Hub antenna and aspeed upgrade to 64 Kbps using adifferent transmission scheme. This willrequire upgrading the satellite earthequipment, provision taken before it waspurchased therefore included in thespecs to the supplier.
From a total of 32 Universities, 16 ofthem had their system up and running byearly December 1992.
MEXnet
MEXnet is a non profit entity,incorporated in 1992. Its mission is toprovide to the Mexican Academic andScientific community with an electroniccommunications network to fosterresearch and technology development inthe country.
Its 22 members as of Dec. 1992 arecomposed of 7 private institutions:ITESM, ITESO, ITAM, LANIA, UDLA, UDEM &Inst. de Ecologia.15 public institutions: U. deGuadalajara, IPN, CIQA, Col. dePosgraduados, U. de Guanajuato, ITMexicali, U.A. de Coahuila and U.
Veracruzana, U.A. de Puebla, INAOE, U.Antonio Narro Coah., CINVESTAV, U. A. deGuadalajara, UNIVA, IT Veracruz. Thismeans some 700 000 potencial users.
Its infrastructure is mainly terrestrialbased on leased lines at speeds goingfrom 9600 to 64 Kbps, for data only. AMultiprotocol Routed network, its NICwill be located for the first year atthe ITESM.
In Mexico it has links to UNAM, RUTyC,ITESM and CONACyT. To the US withCERFnet, NSFnet and NCAR.
Among its goals there is to provideconnectivity to interested privateenterprises for non comercial purposes,the connexion fee is US$7,500 a year.The physical link set up costs to thenearest node have to be covered by thenew user. The minimum link speed is 9600bps. A new member or affiliate mustprovide an aditional communications portat no cost, to wich another member oraffiliate could connect. There are otherrestrictions and recomendationsregarding protocols, node operation timeetcetera.
All enquires should be addressed to theNetwork Information Center at:
Centro de Informacion de MEXnet (CIM)Departamento de TelecomunicacionesRedesITESM Campus MonterreySucursal de Correos ".71,Monterrey, N.L.Mexico, C.P. 64849Tel: (83) 58-2000FAX: (83) 58-8931
CONACyT network
y
CONACyT, the National Council forScience and Technology has coordinatedsince 1989 a series of meetings amongthe academic community to set up a
country wide network, in wich at somepoint in time all institutions willinterconnect.
Its effort is begining to materializelate in 1992 in its new building inMexico City were the Hub antenna wasplaced.
It is planed that the router basednetwork will start with 18 nodes; sevenin Mexico City to be connected via radiomodems at 19200 bps: SPP-INEGI, CECODES,Inst. de Ecologia, INFOTEC, SECIL,CINVESTAV, SPP and twelve remote nodesvia SCPC satellite links: CICY inYucatan, CICESE in Ensenada B.C., CIMATin Guanajuato, CIB in Baja CaliforniaSur, CIES in Chiapas, CIATEQ inQueretaro, IMEC in San Luis Potosi, CIQAin Saltillo, CIATEJ in Guadalajara,CIATEG in Guanajuato and SPP-INEGI in
Aguascalientes.
At some nodes a connexion to othernetworks is inminent: CINVESTAV-MEXnet,CIQA-MEXnet, CICESE-MEXnet, and Via
MEXnet to RUTyC, UNAM, and to the
Internet.
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SATEX network
This network was promoted by the
Instituto Mexicano de Comunicaciones(IMC), for the purpose ofinterconnecting mexican researchinstitutions that participate in spaceresearch activities.
The first two nodes set up in 1989 werethe CICESE in Ensenada and UNAM'sEngineering Institute in Mexico City.
The Hub antenna is located at the IMCfacilities in Mexico City.
The technology used is satellite basedFDMA/SCPC at 64 Kbps, offering data andvoice services.
The other four locations to be installedwill be the IPN in Mexico City, IIE inCuernavaca, INAOE and UAP in Puebla.
As it can be noticed this network caninterconnect to all the others in onenode or another, eventually reaching theInternet.
INTERNET
Along this paper it is mentioned thatmost networks reach the Internet. Forthose who are not familiar with it, theInternet was sponsored by the U.S.Department of Defense and the NationalScience Fundation. Actually it consistsof more than 5,000 networks across 35countries servicing more than 3 millionusers. It is based on the TCP/IPprotocol suite, defined as the de factostandard for interoperability. Here theimportance of becoming a part of it.
CONCLUSION
The convergence of telecommunicationtechnologies has been particularlybeneficial to the academic community inMexico. After years of isolation, in arecord time of 3 to 5 years almost allimportant academic institutions of thecountry are or will soon beinterconnected, literally bringing apotencial of hundreths of thousands ofstudents, teachers and researchers tothe Information Technologies era. This Isee as opening gateways to the rest ofthe world's knowledge. Let us hope welearn to use it for good.
a.)
What could be the social implications ofthis internetworking?. Besides thechance of improving the communicationand learning processes among the users,I am not sure yet in how many ways, ifthere are any, and in how long, thisspill of technology and informationcould help toward speeding up thedeveloping process of the differentlocalities involved, further improvingthe quality of life, thus preventingpeople to migrate to biger Cities insearch of better schools and betterjobs. In this sense it will be muchhealthier to live in the countrysidethan contribute to the pollution of themain Cities.
SOURCES OF INFORMATION
This paper was written based on firsthand information by iterviews to thenetwork managers, network coordinators,or responsables, and documents handedout by these persons.
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The HI-NEST Model: An International Computer Network for Support of Program Implementation
D B. Young, M Gullickson-Morfitt, and J. H. SouthworthCurriculum Research and Development Group
University of HawaiiHonolulu, Hawaii, USA
1. ABSTRACT
The Hawaii Network for Education in Science and Technology (HI-NEST) is an international computer networkdesigned to support the implementation and use of the Foundational Approaches in Science Teaching (FAST)program. FAST is an exemplary middle-school science program developed by the Curriculum Research andDevelopment Group (CRDG) of the University of Hawaii.
HI-NEST provides a new and potentially powerful tool to assist teachers in implementing the program moreeffectively in their classrooms by providing continuing follow-up services as they struggle with adapting to newteaching strategies.
2. BACKGROUND
2.1 DEVELOPMENT OF MULTIMEDIA COMPUTER-BASED TELECOMMUNICATIONS
Previous papers (1) have reported on our work in exploringand developing integrated multimedia telecommunicationsfor educational applications. Early efforts by Southworthtested the communication capabilities of PEACESAT foreducational conferencing, coupling conferencing withelectronic computer mail for asynchronous communi-cations, and establishing the Hawaii Global TELEclassProject using integrated videophones and electronic mail toenrich foreign language classes. These laid the groundworkfor later explorations of the use of facsimile and video slowscan images. Project MENTOR (2) successfullydemonstrated the capability for educators in the marinesciences to communicate with one another in the UnitedStates and overseas. MENTOR, funded by the NationalScience Foundation under its Information Dissemination forScience Education program, was one of the firsttelecommunications efforts (in 1980-81). It was based on asecondary marine science program developed by theCurriculum Research & Development Group (CRDG) of theUniversity of Hawaii.
Building on these pioneering experierces, CRDG in 1988began a joint project with the New Jersey Institute ofTechnology (NJIT) called the International Network forEducation in Science and Technology (NEST). Theemergence of applications software and inexpensivehardware suddenly made computer networking affordable ona large scale for individual schools. Funded by the HitachiFoundation, NEST was designed to develop cross-culturaland environmental awareness by linking schools in Hawaii,New Jersey, North Carolina, Maine, Minnesota, California,Singapore, Hungary, and Japan. In these locations studentsof middle-school age were using the FoundationalApproaches in Science Teaching (FAST) programdeveloped by the CRDG. Students involved in the pilotproject communicated with one another via the ElectronicInformation Exchange System (EIES) using computerfacilities at NJIT. Students shared data they collected onenvironmental topics such as weather patterns, acid rain, soilanalysis, ozone depletion, and similar topics. Dataconection was coordinated by the I lawaii site; EIEStechnical assistance was provided by NJIT.
2.1.1 EIES
Since the early 1970s scientists and engineers have usedwide-area telecommunications as one method ofcommunicating with each other. EIES1, a state-of-the-artcomputerized conferencing system based at the NJIT was
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developed under National Science Foundation sponsorshipin the late 1970s. Its advantages include involvement at thesite, time, and pace of the participants' choice, a variety ofexperts as resources, interaction with peers and experts, awritten transcript of the proceedings, and minimal costscompared with telephone, mail, and travel. By using thisnetwork students expand their experiences beyond, but notexcluding, textbooks and local activities to developstrategies that will help develop a world view. With thecomputer used to store and organize their communications,students are able to carry out a variety of projects despite thefact the they are located in different states and/or countries.In 1991 a new system with enhanced features called EIES2replaced EIES1.
There are four main communications capabilities orstructures within the EIES2 system to replicate existingforms of communications. Figure 1 displays how traditionalmeans of communications are replaced by EIES2communication features (3).
ETES 2 Structures and features ReplacesMessages Letters
TelephoneConferences/meetings
Conferences Conferences/meetingsSending or drafts or
preprintsNecessity for co-
authors to beco-located
NewslettersJournals and abstracts
Activities
Notifications
QuestionnairesRemote assignments
Receipt of message
FIGURE 1. COMMUNICATIONS FEATURES OF EIES2
These features allow participants to address messages to oneindividual, several individuals, a conference or a group. Themessages may be signed or anonymous. This allowsmembers to get individual attention or assistance and offerother members advice.
Conferences are spaces for group discussion in which thecomputer stores the comments in the order in which they areentered and keeps track of where each member is in theproceedings. When entering a conference members are tokl
(
how many new items are waiting. EIES2 permits multiple"threads" of discussion to allow tracking of related items.
2.1.2. Variables Affecting Participation
Our research verifies that of others (4) regarding theweaknesses of telecommunications systems such as NEST.Three variables appear to affect NEST participation. Thesecan be categorized technical, social, and topical. There aretechnical issues of communications that are inherent in themedium. A characteristic of computer-based conferencingis that messages are stored in the host computer until it isconvenient for members to receive them. The time lapsebetween the entry of a comment and when it is read by eachmember is unpredictable. This implies that it cannot beused for information needed immediately.
In addition, if participation is a goal, topics of discussionmust be interesting and relevant for the community ofmembers. The use of a common science program appearsto enhance participation, however, once again, technicaldifficulties emerge as the most overwhelming obstacle.
Another feature of EIES is that the audience is unseen. Thepotential audience for a conference comment is unknown.Topics of messages, both private and conference, play amore critical role in the beginning of interaction incomputer-based communications than in face-to-facecommunications (5). In a face-to-face meeting anintroduction, or sheer proximity, may initiate interactions.In computer-based communications proximity is irrelevant.The content of the messages plays a larger role indetermining whether interactions will begin. Kerr and Hiltzhave stated that reliance on message content as acharacteristic of new users in particular.
The importance of an active and structured moderator inproducing successful group discussions cannot beoveremphasized. The moderator is responsible for settingcommunications agendas, issuing warm invitations, sendingencouraging messages to compliment individual membersand comment on their entries, suggesting what they may beuniquely qualified to contribute to.
2.2 CURRICULUM RESEARCH & DEVELOPMENTGROUP
The Curriculum Research & Development Group (CRDG)conducts systematic research, design, development,publication, staff development, and related services forelementary and secondary schools. The group hascurriculum development projects in science, mathematics,English, Pacific and Asian studies, Hawaiian andPolynesian studies, Japanese language and culture, music,health and nutrition, art, drama, technology, and computereducation. Research and school service projects focus oneducational evaluation, teacher development, reduction ofin-school segregation of students, and programs forstudents educationally at risk. The work of CRDG is tofind ways to put research findings into practice inclassrooms. A theoretically sound curriculum that does notmeet the test of usability and productivity in schools isjudged only a partial success, because CRDG expects itscourses to change what happens in schools.
The curricula that CRDG develops arc expected to produce"paradigm shifts" in how subjects are taught, not merelyimproved versions of standard approaches. Typical of suchshifts arc (1) teaching students to use inquiry proceduresrather than memorize or "master" the subject matter, and(2) integration of subject areas within courses, or (3)helping teachers to change their teaching theories and
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approaches, not merely the content they teach. Thesechanges in instructional patterns are typical of CRDG'sFoundational ApproacheA in Science Teaching (FAST)program which departs radically from conventionalapproaches to science teaching at the middle school level.It has taken 20 years for its approach to catch on nationally;now over 2,5()0 schools in 36 states are committed to theprogram and it is in use in 8 foreign countries. FAST hasbeen cited as an exemplary science program by theNational Science Teachers Association and the U.S.Department of Education's National Diffusion Network(NDN) program. Professional associations such asAmerican Association for the Advancement of Science(AAAS) and National Science Teachers Association(NSTA) are now calling for similar approaches in theteaching of science at the secondary level.
2.3 FOUNDATIONAL APPROACHES IN SCIENCETEACHING (FAST)
The Foundational Approaches in Science Teaching (FAST)program is a second-generation inquiry science curriculumdesigned specifically for middle-school students. FASThas been designed for students to replicate the activitiescharacteristic of the science disciplines at a levelappropriate to the developmental stages of 12 to 14 year-old students. Content is organized into three strands calledphysical science, ecology, and relational study. Relationalstudy focuses on the interrelationships of the sciencedisciplines and the interactions of science and society. Theprogram consists of three 1-year courses intended to bestudied sequentially.
FAST is designed to provide investigative experiences andinquiry activities in the physical, biological, and earthsciences as well as in the application of the knowledge ofthese sciences to environmental issues. The goal of FASTis the development of a scientifically literate student whohas 1) the background necessary for understanding theenvironmental concerns arising in our technologicalsociety, and 2) the foundational tools for further study inthe sciences. The principal objectives of FAST are todevelop thinking skills, laboratory skills, and knowledge offoundational concepts of the disciplines of science.
FAST instructional strategies were formulated to takeadvantage of the major characteristics of middle-schoolstudentstheir high energy level and curiosity, their needfor social interaction, and their developing ability to dealwith abstract thinking. Students work in small groupswhere they are encouraged to talk with one another abouttheir experiences and ideas, thus directing their need to talktoward meaningful communication and learning. Thedevelopmental structuring of FAST begins with concrete,real experiences from which students derive concepts andlanguage, thus facilitating their development of abstractthinking.
Of particular importance to NEST are the ecology andrelational study strands of FAST. Students learn how tocollect environmental data, how to analyze it and how toreport their findings. They also learn how to use referencematerial to supplement their studies. The relational studystrand serves several purposes within the program. Itscontent is drawn from the fields of philosophy and historyof science as well as from the study of currentenvironmental issues. Relational study shows theconnections between the sciences, technology, and theworld of the citizen. At the end of each of the three coursesthere is a relational study unit that is designed to causestudents to draw on all their experiences in physical scienceand ecology and to apply their new knowledge to the study
_
of an environmental issue. Relational study exposes thelimitations of scientific knowledge in the arena of socialdecision making. The input of the sciences is seen as butone of the many factors (moral, ethical, aesthetic,economic, political, and others).
Students using FAST already collect local environmentaldata on weather, air quality, and water quality as part oftheir studies. However, before NEST no mechanism hadbeen utilized to enable students to share and compareenvironmental data. Utilizing the EIES system providesthat valuable component.
FAST was also selected because of the diversity oflocations available for data collection. FAST has beenadopted by schools in 36 states and is also used in schoolsin the Virgin Islands, Pohnpei, Kosrae, Australia, Japan,Abu Dhabi, Singapore, Jakarta, and Budapest. Thesevarious locations provide environmentally diversemeasurements as well as an opportunity to develop globalunderstanding of environmental issues and culturaldiversity.
2.4 HINEST
The expanded project that builds on our previous work iscalled the Hawaii Network for Education in Science andTechnology (HINEST). In addition to serving studentsand teachers using the FAST program, HINEST is beingdesigned as a network that can provide invaluableassistance in the dissemination, implementation, andsupport of other CRDG programs. Though theenvironmental data sharing activities among students andthe communications among teachers using FAST in theUnited States and elsewhere continues in HINEST, muchgreater attention is being directed to the use of thecomputer network in support of new teachers using FASTfor the first time and to keeping the FAST CertifiedTrainers continually up-to-date on program development,issues, and evaluations.
The use of FAST is growing at an unprecedented rate.Some fifty ten-day teacher institutes were conducted insummer 1992 bringing the total number of FAST teachersworldwide to over 4,500. In 1992-1993 it is estimated thatover 450,000 students are taking one of the three courses inthe FAST program. Projected figures indicate that by 1995over 8,000 teachers will be teaching FAST with more than600,000 students. Currently schools in 36 states and 8foreign countries are using the FAST program. It has beentranslated into Braille and Japanese and efforts arecurrently underway to translate FAST into Russian,Hawaiian and Slovak languages.
The central question being explored through HINEST atthis time is how multimedia telecommunications can beused to meet the diversity of needs of teachers and certifiedtrainers in ensuring successful and effective programimplementation. Project staff have designed the HI-NESTcomputer network as a powerful support tool to ensure thesuccess of FAST as it expands and provide for meaningfulinteractions among FAST students, FAST teachers, andFAST trainers. Not only are participants linked with theirpeers around the world, but they also benefit fromdeveloping understanding of global issues andcommunications technologies.
Specifically, HI-NEST is designed toprovide student-to-student conferences in whichstudents share the environmental data they collect intheir FAST investigations, collaborate in ideas, andconduct research with other students around the world.
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provide teacher-to-teacher conferences in whichteachers not only work with their students in sharingdata, but where teachers can communicate regularly andas needed with one another and with the FAST projectstaff about program use and issues.provide certified trainer conferences through whichFAST trainers participate in the student and teacherconferences described above and in addition cancommunicate with other trainers and with project staffabout training and support issues. FAST trainers alsouse the telecommunications network to communicatedirectly with the teachers they trained in FASTinstitutes.provide support for translating and adapting FAST toother locations and cultures.evaluate the potential of telecommunications to supportteachers in group situations and in independent, isolatedsituations.examine the types of network users and theirmotivations and aspirations including the use of acommon science program as the basis fortelecommunications among participants who have neverhad face-to-face contact.evaluate the use of emerging technologies such as FAX,video phone, videodisk, and others for providingfollow-up support to program users, providing feedbackto program developers for the improvement of bothprogram and training components, and developingglobal awareness.
3. PROGRAM DISSEMINATION ANDIMPLEMENTATION
The process of research and development of CRDG scienceprograms is lengthy and inc:Jdes researching, developing,testing, redesigning, retesting, and refining. The averagelength of time for development is 5-10 years. When we aresatisfied that the program works well with the targetaudience(s), it is ready for dissemination.
Our experience with dissemination, implementation, andinstitutionalization verifies the findings from the researchreported in the literature (6). The availability of innovativeprograms by themselves has little impact on changingteacher behaviors or improving instruction. Withoutcareful attention to staff development and ongoing,continuous support, little change or improvement is likely.Programs that do not attend to these human factors willhave little effect. The most important conclusions aboutwhat is necessary for successful implementation andimprovement are the following:
The most powerful factor in implementation is locallyavailable, on-going inservice.A variety of follow-up services is essential. Users willneed different services at different times in their owndevelopment and professional growth. Not all sitesrequire follow-up.Two factors determine the degree of implementation:the quality and amount of follow-up services; andsustained local support.Successful implementation is an individual develop-ment process within the organizational constraints andsupports provided.Effective implementation requires opportunities forpeople involved to talk to one another. Comprehensionand mastery come with time and with teachers talkingwith teachers about what they are doing.Changes in attitudes and beliefs follow changes inbehavior (7).
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Complex programs are harder to understand,comprehend, and master, but are also more likely toresult in non-trivial results.Successful implementation takes time; 3 to 5 years formost worthwhile efforts. Follow-up services should beprovided through the institutionalization phase whenschools take ownership of the program.
Through our research efforts we have designed a model forimplementing meaningful change in schools through ourscience programs. The model consists of 4 phases, Entry,Goal Setting, Inservice Training and Coaching, andInstitutionalization and Maintenance. Completion of allphases is expected to take from three to five years.
The model is currently being used in the nationaldissemination of three innovative science programs,Developmental Approaches in Science & Health (DASH)for grades K-6, Foundational Approaches in ScienceTeaching (FAST) for grades 6-10, and Hawaii MarineScience Studies (HMSS) for grades 9-12. In order tounderstand the context of the use of the model it isimportant to note that each of these science programs iscomplex. Each is intended to replace the existing scienceprogram in schools, not just supplement it. Each requireschanges in the approach to teaching science, in teacherbehaviors and in student behaviors, and in expectations ofstudents. Each requires 10 days of training prior toclassroom use.
3.1 ENTRYGETTING TO KNOW YOU
The entry phase of the dissemination/implementationmodel includes a variety of ways that have proven effectivein making potential adopters aware that a new programexists. These include direct mailings to schools, teachers,and administrators, journal advertising, journal articles,personal contacts, conference presentations, conferenceexhibits, computer conferences, awareness workshops forteachers, and awareness workshops for administrators.
A most effective dissemination strategy is what we call the"infection model." It starts with a quality implementationand spreads by word of mouth. It has a personal touch.Our experience is that when teachers and administratorsfind a program that works well they want to share theirexcitement and enthusiasm with others.
The entry phase ends with either a rejection of a program asnot meeting local needs, or a request for more in-depthinformation and assistance in planning for possibleadoption.
3.2 GOAL SETTING--MAKING COMMITMENTS
During this stage, objectives of the program and school areclarified, costs of implementation and maintenance areanalyzed, a timeline for inservice training and follow-up isdeveloped, and time commitments are made. For ourscience programs, the goal-setting phase ends with writtenagreements of responsibilities for training and follow-up(an adoption agreement) and contracts for initial training.Written statements are important public evidence that eachparty, CRDG and the adopting school or district, have madecommitments to one another over time.
3.3 INSERVICE TRAINING AND COACHING
All CRDG science programs require intensive, program-specific teacher training prior to implementation. Theseteacher institutes are designed to provide hands-onexperience as a learner in the program with extensive
modeling and discussion of the teaching strategies inherentin each program. Opportunities to practice the newteaching strategies are provided as well. In essenceteachers go through each entire program so that they knowthe activities and investigations well.
Teacher institutes are taught by certified trainers who :-.aveactual classroom experience and success in teaching thenew science program and have received additional trainingin how to train teachers. Each of our science programs hasa cadre of certified trainers in various geographic locationsavailable to assist in the inservice and coaching stage ofimplementation.
However, we have learned that pre-implementation trainingalone is not sufficient for successful use. What is needed ison-going follow-up, coaching, and inservice duringimplementation. Follow-up services provided during theimplementation stage include those described in Figure 2.It is in the inservice and coaching aspects ofimplementation that the research on changing teachers'classroom behaviors is most relevant. We had to learnthrough bitter experience to be patient, to listen, and todesign inservice and follow-up activities that respond to thelevels of concern of users.
For example, we now know that teachers' concerns aremostly at the personal stage prior to and during initialtraining. Our teacher institutes are designed to focus onthese levels of concern through modeling of the appropriateteaching strategies by the certified trainer and throughdiscussion of what was done, how it was taught, and theeffect on learning. The trainers focus on the t xcitementand enthusiasm of the new activities. Knowing that there isgreat self-doubt about whether "I" can do it, the trainersencourage teachers to take some risks in trying out newteaching strategies. They are supportive and, because theyhave been in the same position themselves, are empathetic.
As teachers begin to implement the new science program,they begin to shift to a concern over actual use. Becausethey have experienced how the new program was intendedto be taught in the pre-implementation training, teachersgenerally begin by repeating what they did in their trainingsession. One of the clearest implications here is that thedesign of the initial training must focus on the mostimportant and exemplary aspects of the new program. Ingeneral, during the first year of implementation, teacher useis mechanical. They do with their students what they did ininitial training.
During this period of initial use communication amongteachers and between teachers and program developers isessential. Support must be provided to be sure that theequipment and supplies are available and present; thatteachers have opportunities to observe one another teachand to meet and discuss their successes and problems withone another; that follow-up inservice is available as needed;that communication with the CRDG staff is open andresponsive; and that teachers are encouraged to continueeven when the new style of teaching feels awkward or evenfrustrating. This stage of teacher development and supportservices lasts from 1 to 3 years. During this time, the fullrange of follow-up activities shown in Figure 2 are oftenemployed, though not necessarily all at one time. Servicesare roughly listed in order of increasing expense.
3.4 INSTITUTIONALIZATIONMAKING IT OURS
As teachers master the new science program, their concernsshift to student impact. In FAST, for example, teachersbegin to adjust their teaching. The new style of teaching
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through inquiry feels more comfortable, and in fact fewwould ever go back to their old ways of teaching. It is atthis stage that we have successfully engaged teachers in aseries of professional development seminars designed toexplore areas beyond the day-to-day use of the program intheir classrooms. Group meetings that previously dealtwith the mechanical problems of implementation oftenbegin to deal with philosophical issues such as what isworth teaching and what is the nature of science or toresearch applications such as how can the research onlearning styles or cooperative learning or thinking skillshelp teachers to teach their program more effectively tomore students. It takes 3 to 5 years for most teachers toreach this level of mastery. It is in at this stage thatevaluation of the impact of the program is mostappropriate, when teachers are no longer struggling withunderstanding the innovation, but are refining it andpersonalizing it.
Follow-up TypeDirect mail
Phone contact
Teleconference
Computer Network
Certified Trainers
Site Visitations
Conferences
Institutions ofHigher Education
ExamplesCertificates; Newsletters; Updates;Advisories; Adaptations; Recognitions;Parent letters; Evaluation data.
Administrative follow-up to see thatmaterials have arrived; Project hotlineto answer immediate questions oninvestigations or teaching; Servicefrom developer on evaluation,proposals, parent concerns, etc.
School department with developer,Regional meetings of users withdeveloper; Conference meetings withdeveloper.
Communication from local coordin-ators, teachers, and administrators;Bulletinboards; Sharing environ-mental data among users.
Providing continuous follow-up andsupport for own district and local area;Continuous training of new staff.
Classroom, by developer, localcoordinator, or certified trainer,Administrative, to build understandingand support for program; Observationand feedback using ClassroomObservation Instrument; Additionaltraining if necessary.
Drive-in conferences by region;Group meetings at state scienceconferences; NSTA Share-a-Thons;Exhibit booth where users can meetone another and developer.
Provide research and credit forprofessional growth; local adaptations;Provide for development, localadaptations, and evaluation; Providesubject area experts as needed.
FIGURE 2. FOLLOW-UP ACTIVITIES IN TI IE CRDGIMPLEMENTATION MODEL
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4.0 THE HINEST MODEL IN SUPPORT OFPROGRAM IMPLEMENTATION
The FAST project staff have always been committed toproviding training and follow-up support services toteachers. However, as use of the program has grown innumbers worldwide, this has become increasingly difficult.
HI-NEST is a powerful support tool to ensure the successof FAST as it grows and provide for meaningfulinteractions among FAST and nonFAST teat hers. HI-NEST provides a progressive network whereby project staffcan more readily support all teachers and trainers involvedwith the program. Not only do teachers and studentsbenefit from an understanding of global issues andcommunications technology, they are linked with theirpeers from around the world.
The HI-NEST model is based on a hierarchy of usersengaging in increasingly complex and rich sets ofinteractions. These are diagrammed in Figure 3 anddescribed below.
HINEST MODELPROJECT STAFF
Follow-up Support Servicesand Research
CERTIFIEDTRAINER
Program, CERTIFIEDTraining, TRAINERS
and Support Issue
TEACHERS Environmental and TEACHERSProgram Issues
STUDENTS Environmerual Issues STUDENTS
FIGURE 3. THE HINEST MODEL
4.1 STUDENT-STUDENT CONFERENCEThrough the student conference HI-NEST providesstudents the opportunity to share environmental data andobservations, collaborate on ideas, and conduct researchwith other students throughout the United States andaround the world. This aspect of the project continues theactivities begun under the original NEST project funded bythe Hitachi Foundation.
4.2 TEACHER-TEACHER CONFERENCE
Participating teachers working with their students share thebenefits of conducting research and sharing environmentaldata on a national and global basis. In addition, HI-NESTprovides a network whereby teachers can communicateregularly with one another and with project staff aboutprogram issues.
4.3 CERTIFIED TRAINER-TRAINER CONFERENCE
As described in the previous section, teacher institutes andfollow-up support services are an integral part of the FASTprogram. Classroom sets of materials are only madeavailable to teachers who have been trained to use them.FAST teacher institutes are a combination of theory andapplication which includes intensive study and engagement
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with the FAST program. Teacher institutes are conductedby FAST project staff and certified trainers. These trainersare experienced, highly motivated FAST teachers who havehad additional training from FAST staff in conductingteacher institutes.
The HI-NEST certified trainer conference serves multiplepurposes. First, since all FAST-certified trainers are alsoclassroom teachers, they too share in the excitement withtheir students of engaging in study of globally relevantissues and communicating with other FAST students andteachers worldwide. Second, the HI-NEST creates anetwork of certified trainers who can communicateregularly with one another and with project staff abouttraining and support issues relevant to providing timely andup-to-date teacher institutes. Third, and perhaps mostimportantly, HI-NEST provides an opportunity for certifiedtrainers to communicate with and support those teachersthat they trained in FAST teacher institutes. Fourth, allFAST-certified trainers are active ETES users andbeginning in 1993 will incorporate computer networktraining into the FAST teacher institutes they conduct.
4.4 PROJECT STAFFFAST project staff members include program developers,content and training experts, field support personnel,technical advisors, and the HI-NEST network moderator.The network moderator provides the link between projectstaff, certified trainers, and network participants.
Specifically, HI-NEST enables FAST project staff tocommunicate directly with certified trainers providingprogram updates, revised and improved teacher instituteschedules and approaches, and general informationdesigned to keep certified trainers at the cutting edge ofprogram improvement.provide support directly to middle-school teachers.Support includes assistance with the content, pedagogy,objectives, investigations, and other program issues.provide service directly to middle-school teachers.Service includes technical assistance withtelecommunications software and connections, computerand modem, and EIES in general.expand and improve follow-up services by engagingFAST-certified trainers in providing directcommunications with teachers they have trained.provide a network moderator who monitors student,teacher, and certified trainer conferences, analyzes andsummarizes student-collected data, and links teachersand certified trainers with appropriate FAST project stafffor follow-up support services.
4.5 RESEARCH
An integral part of HI-NEST is the on-going research intothe use of emerging technologies. Of particular interest arethe following:
evaluate the use of emerging technologies such astelecommunications networks, FAX, videophone,satellite synchronous and asynchronous communi-cations, videodisk, videotape, and others for developingglobal awareness, providing follow-up support servicesto program users, and providing feedback to projectstaff for program and training improvement.examine the types of network users and their motivationsand aspirations including the use of a common programas the basis of communications among participants whohave not had face-to-face contact.evaluate the potential of telecommunications to supportteachers in group situations and as independent,dispersed users of a common program.
III-NEST uses FAST as the unifying, common scienceprogram from which the initial environmentalinvestigations selected and adapted for use by students andteachers. Implementation of FAST represents a significantchange in teacher and student behaviors. In addition, IIINEST itself requires teachers to become involved with andmaster technologies that are unfamiliar. It is wellestablished and recognized by the project staff that there areseveral barriers to the implementation of any program suchas FAST and HI-NEST on a universal basis. Among thesebarriers are the
lack of funds to support any science program changes.reluctance to embark upon new and significant changesin curriculum design among those in key administrativeor decision-making positions.reluctance of teachers to actually change their teachingmethods from content orientation toinquiry/discovery teaching involving students inconducting science investigations.state textbook adoption and framework policies.reluctance of teachers to spend time in in-servicetraining.unwillingness of districts to financially support in-service training.
The project staff also recognize that 1) students andteachers should not be excluded from participation becauseof these barriers, 2) teachers of programs other than FASTwill want to participate in HI-NEST and use the FASTinvestigations, and 3) nonFAST teachers have many ideasand functional environmental investigations that they canshare with their FAST colleagues. These facts were wellestablished in the NEST pilot project. Therefore, we arecurrently researching the impact of the HI-NEST modelacross four distinctly different groups of teachers.
Group 1. FAST teachers meeting regularly in groupsetting to design and plan student activities, carry outdata collection, and communicate with others teachersand FAST project staff.Group 2. FAST teachers who are isolated and unable tomeet with other teachers, but want to participate andshare student data and communicate with other FASTteachers.Group 3. NonFAST teachers meeting regularly ingroup setting to design and plan student activities, carryout data collection, and communicate with otherteachers.Group 4. NonFAST teachers who are isolated andunable to meet with other teachers, but want toparticipate and share student data and communicatewith others.
Each group poses special problems and opportunities forcontinuing research into the use of these emergingtechnologies for global and multicultural awareness.Groups 1 and 3 share the tradition of knowing one anotherthrough face-to-face contact. HI-NEST provides a way forthem to communicate with each other and other membersof the network following their regular meetings.
Group 2 teachers are isolated either geographically orsocially. They may be the only FAST teacher in a districtor the only one in Singapore. These teachers are crying outfor opportunities for their students to share and compare theenvironmental data they are collecting and to communicatewith other FAST users and with project staff for support onprogram issues.
Group 4 teachers share the same sense of isolation as theGroup 2 teachers, but in addition do not have a commonprogram like FAST to link them with other teachers. These
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teachers wishing to participate in HI-NEST are providedcopies of the FAST investigations to use with their studentsand provided both support and technical assistance in usingHI-NEST capabilities. This has been the case in theparticipation of Russia and Japan in the pilot NEST project.
Group 1 includes locations where FAST certified trainersalready exist. These trainers serve as facilitators of regulargroup meetings of FAST teachers in their respectiveregions to share environmental data, provide program andbackground information updates, and encourageparticipation in HI-NEST. There are currently 66 trainerslocated in California, Connecticut, Florida, Hawaii, Illinois,Maine, Minnesota, Missouri, New Jersey, New York, NorthCarolina, South Carolina, Vermont, Virginia, andWashington.
The intent of the research on four groups of users is todevelop knowledge on how best to serve the needs ofstudents and teachers that each group represents. Atpresent, NJIT has extensive experience in working withgroups of teachers in face-to-face meetings followed byelectronic communications when they return to theirclassrooms. Similarly, the FAST project has extensiveexperience in designing effective, quality instructionalmaterials and teacher development institutes relevant tousing these materials. Little is known about how to mosteffectively incorporate telecommunications technologywith an exemplary science program that is being used bystudents and teachers on a global basis. No other existingnetwork is using a proven science program as the basis forcommunication electronically.
The operating hypothesis is that if teachers no matter wherethey are located share a common training, teachingphilosophy, and quality program as well as training in howto use the technology of HI-NEST that they will morelikely become involved in telecommunications activities,will further develop their skills and knowledge as teachers,and will involve their students in examining globalextensions of the investigations they are conducting in theirclasses.
4.6 INTERNATIONAL TRANSLATIONS
International participants currently include students andteachers in Jakarta, Japan, Singapore, and Budapest. HI-NEST staff are currently working on adding participantsfrom Bangkok, Moscow, Paris as well as Townsville inAustralia, Nitra in Slovakia, and both Kosrae and Pohnpeiin the Federated States of Micronesia.
A recent agreement between the Ministry of Education andCRDG has been executed to translate FAST into Russianand to pilot test its use in schools in Moscow. A similaragreement exists between the University of Nitra andCRDG for use of FAST in Slovakia. We believe that this isthe only science education program currently beingconsidered fo, such international exchange in Russia andSlovakia. FAST is currently being translated into Hawaiianand we are considering developing a Spanish edition.
These new research endeavors create new problems ofcommunication. For example, in programs such as FAST,a central concern is the translation of the spirit of inquiry inaddition to the problems of literal translation. HI-NEST isalready serving a vital communications link during thistranslation process and will be even more important as thepilot testing of the program begins in these foreignlocations.
Participants from each group will be monitored closely bythe HI-NEST moderator to determine their degree ofparticipation, the barriers to participation, the degree ofsuccess students and teachers experience, and the kinds andlevel of support and services required to maintainparticipation. These data will enable project staff to designa more functional network capable of responding toindividual and group needs.
A further significant involvement is the interface of HI-NEST with TeleClass International, a non-profit,educational telecommunications program based in Hawaii.TeleClass International is designed to connect nativelanguage speakers in the United States with students intheir home country. HI-NEST provides substantivescience, environmental, and global issues for these studentsto discuss. Through TeleClass International we have thepotential of adding participants in Korea, the Philippines,Germany, and many other countries.
4.7 IMPACT ON THE CRDG DISSEMINATION ANDIMPLEMENTATION MODEL
Though not intended in the original design, HI-NEST hasbecome increasingly important in all phases of the CRDGdissemination and implementation model. At the entryphase, for example, HI-NEST is already serving as a newand effective program awareness tool. Since there aremany teachers using the EIES system who are not FASTteachers, the visibility of the HI-NEST activities in thenetwork has attracted numerc-r inquiries from teacherswishing to learn more about FAST.
At the goal setting phase, HI-NEST has the potential ofproviding instant communications between potentialadopters of FAST and the FAST project staff as schoolpersonnel consider the advantages of using FAST and itspotential impact on students, teachers, classrooms, and theschool community. At this early stage of review, schoolshave many questions that need carefully consideredanswers before commitment to training and implementationcan take place.
We have already described the importance of HI-NEST inkeeping open communications with FAST trainers andkeeping them up to date on program developments.Training in how to access the computer network services isnow being incorporated into the FAST teacher institutes.Active participation at this level will also includecommunications among trainers and teachers during thesummer teacher institutes.
During the early stages of classroom implementation, HI-NEST will provide invaluable services. In addition toproviding a network for teachers to communicate with theFAST project staff on implementation successes, problems,and questions HI-NEST also provides for FAST trainers tocommunicate directly with the teachers they trained toassist them through the implementation process. Futuredevelopments include an on-line newsletter and journal forFAST teachers and students, professional developmentseminars conducted on-line, as well as via live, interactivemultimedia technologies (e.g. Hawaii Interactive TelevisionSystem (HITS), a statewide, full-motion instructional TVsystem) and collecting student impact data on programeffectiveness.
5. CONCLUDING REMARKS
HI-NEST is a practical, cost-effective model in support ofprogram implementation. It addresses the topical, social,and technical issues identified in other research projects as
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barriers to effective use of telecommunications networks.Topical problems are addressed through the use of acommon science program among all users. Topics aredirectly relevant to everyday classroom activities ofstudents and teachers. Social issues are addressed throughdirect familiarity of teachers with the instructors they knowand trust and through relevant and timely support inimplementation. Technical issues are addressed throughface-to-face training of participants in the FAST teacherinstitutes and providing accurate and responsive help on-line and by phone. The project provides a variety offollow-up support services including a HI-NEST moderatorwho is responsible for energizing, guiding, and monitoringactivities using the telecommunications network. Futuredevelopments will include a HINEST newsletter,educational journal, and staff development seminars.
HINEST will undoubtedly play an important role in thetranslation of FAST into other languages and cultures andin monitoring its implementation in other countries. Themodel has potential applications beyond FAST. OtherCRDG curriculum development projects in science andmath will be added to the system as they are available.
At this point several observations are clear. First, aninternational network connecting science teachers involvedin teaching the same program is feasible. Second, there is agreat deal of interest in and excitement about sharing datacollected on environmental issues on a global basis and inteachers sharing classroom experiences. Third, HINESTis a viable way to improve global awareness ofenvironmental issues, understanding of other cultures,learning about new communications technologies, andsupporting the widespread implementation and use ofexemplary science programs.
6. ENDNOTES
(1) See Kingan, val., 1990; Southworth, 1977; Wollstein, 1986;Gullickson-Morfitt, etal., 1992
(2) See Southworth and Klemm, 1985; Klemm, 1990(3) See Hiltz and Turoff, 1978(4) See Gullickson-Morfitt, 1991; Hiltz, 1988; Hiltz and Kerr, 1982;
Kerr, 1983(5) See Katz, M. etal., 1987(6) See Fullan, 1987; Huberman and Miles, 1984, Joyce and Showers,
1984; Crandall, etal., 1983(7) See Fullan, 1987
7. REFERENCES
Crandall, D. etal., People, Policies, and Practices: Examining theChain of School Improvement. Andover, MA.: The Network, 1983.
Fullan, M., Implementing Educational Change: What We Know.Ontario Institute for Studies in Education, 1987.
Hiltz, S.Z. and E.B. Kerr Computer-mediated Communic -ationSystems. New York: Academic Press. 1982.
Gullickson-Morfitt, A Formative Study of the International Networkfor Education in Science and Technology Project. A papersubmitted to the Department of Curriculum and Instruction,University of Hawaii, 1991.
Gullickson-Morfitt, M., J. H. Southworth, D.B. Young, D.L. Moore, J.Nozato, and A. Uvarov, "Development of Integrated MultimediaTelecommunication Utilization for Project Management: TheInternational Network for Education in Science and Technology(NEST)", Proceedings of the Pacific Telecom-municationsConference. Honolulu, HI, January 1992.
Hiltz, S. and M. Turoff, The Network Nation, Addison-WesleyPublishing Company, Inc., Reading, MA, 1978.
Hiltz, S.R. and E.B. Kerr Computer-mediated Communication Systems.New York: Academic Press. 1982.
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Huberman, M. and Miles, M., Innovation Up Close: How SchoolImprovement Works. New York: Plenum. 1984.
Joyce, B. and Showers, 13., Power in .Staff Development ThroughResearch on Training, Alexandria, VA: Association forSupervision and Curriculum Development, 1984.
Katz, M. cud., Facilitating Collegial Exchange Among ScienceTeachers: An Experiment in Computer-Based Conferencing,Technical Report 86-14 by the Educational Technology Center,Cambridge, MA, sponsored by the U.S. Department of Education,Office of Educational Research and Improvement, Washington,D.C., 1987.
Kerr, Elaine B. Moderating On-line Conferences. Research Report#20 a final report to the National Science Foundation by theComputer Conferencing Center, Newark, New Jersey. 1983.
Kingan, G., J. Flanigan. G. Knezek, and J. Southworth, TheApplications Technology Satellite Networks: Twenty Years ofDistance Education in the Pacific Basin, paper given at the WorldConference on Computers in Education, Sydney. Australia, July1990.
Klemm, E.B. "Teleteaching." Current. 9: 11-17. 1990.Southworth, J., Use of Multi-Media Technology in Cross-Cultural
Education, World Educators Conference, Honolulu, HI, July 1977.Southworth, J., and E. B. Klemm. "Increasing Global Understanding
Through Telecommunications." National Association of SecondarySchools Bulletin. April 1985.
Wolistein, J., Hawaii Global TELEclass Becomes of Age, paper given atthe FLINT Conference on Computers in Education sponsored bythe Goethe Institute, San Francisco, CA, October 1986.
Young. D., M. Gullickson-Morfitt. and J. Southworth, NEST: AnInternational Electronic Information Exchange Network onEnvironmental Data, paper given a the National Science TeachersAssociation conference, Houston, TX, March 1991.
8. AUTHOR BIODATA
Donald B. Young is Co-Director of the FAST Program, CurriculumResearch and Development Group, University of Hawaii College ofEducation in Honolulu, Hawaii, USA. He has been involved for 21years in the development , dissemination, and evaluation of the FASTprogram. His doctoral thesis was based on learning styles associatedwith the success of FAST instruction in middle schools. His recentresearch activities have been in learning and teaching science, programimplementation and maintenance in schools, and multidimensionalassessmentPhone: (808) 956 -7863e-mail: [email protected]
Mary Gullicicson-Morfitt is FAST Science Program Field ServicesSpecialist with the Curriculum Research and Development Group,University of Hawaii College of Education in Honolulu, Hawaii, USA.She has over six years experience in teaching secondary and middleSchool science. She also been involved with instructionaldevelopment, science education and educational telecommunications.Phone: (808) 956-4951e-mail: [email protected]
John H. Southworth is Educational Associate with the CurriculumResearch and Development Group, University of Hawaii College ofEducation in Honolulu, Hawaii, USA. He has been active for over twodecades in educational telecommunications program research anddevelopment He served as Senior Investigator of the Hawaii GlobalTELEclass Project of the Hawaii State Department of Education. Hewas invited to participate in the East/West Seminars in NewTechnologies in Education that have taken place in the USSR andCzechoslovakia in 1988, 1990 and 1991. He is currently networkmoderator for the HI-NEST Project.Phone: (808) 956 --6871e-mail: [email protected]
Address: Curriculum Research and Development Group,College of Education, 1776 University Avenue,Honolulu, HI, 96822
Facsimile: (808) 956-4114
A System Architecture for ideographic Language Support
Andrew Pan, James BarnesAmerican Express
Phoenix, USA
Roen HoggADIA Information Technologies
Phoenix, USA
1. Abstract
This paper describes the development of a system architecture to supportideographic languages. Since each country expects vendors tocommunicate using the correct names and addresses of its members, thissupport of local Asian languages will meet the cultural and regional needsof the American Express card members in Asia.
2. Introduction
American Express is recognized as aquality supplier of financial servicesthroughout the world. In Asia, arequirement for quality services is thesupport of local languages. Customersexpect vendors to communicate to them inthe language of their choice. In Asia, thisentails support for ideographic languages(comprised of symbols) which includeChinese, Japanese and Korean in theirwritten forms.
The strategy in Asia and the Pacific is todevelop a solid technological platform andsystem architecture that supportsideographic languages at the same levelthat the company supports English. Thesystem includes the following concepts: anautomated and integrated approach, flexibleand interactive graphic user interfacesacross countries and business units, aportable and scalable system design, andon-line help and on-line referencecapabilities. A system incorporating theseconcepts enables an agent to conductbusiness at a workstation in an ideographiclanguage in the same way as an Englishspeaking counterpart.
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3. Project Scope
The Ideographic Language Support projectis a three year, three phased project withdeliverables at the end of each phase.
Phase 1 provides improved linguisticsupport for card members, ServiceEstablishments and clients of AmericanExpress. This includes fixing currentlanguage code set incompatibility problems,automating present font creation processes,expanding font libraries, providingideographic language translation on namesand addresses, and enhancing the qualityof printed output.
Phase 2 will develop client/serverarchitectures which optimize ideographiclanguage support in the operations groups.This phase will apply new technology toscalability of fonts, expansion of fonts inworkstations and printers, and theinteractive addition to font databases andmachine recognition of unique languageproblems.
Phase 3 will apply voice, image scanningtechniques, artificial intelligence andmultimedia technologies. Advancedprocessing will utilize server resident expertparadigms to form the correct mix ofideographic characters. Also included aremultiple language support for English,
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Chinese, Japanese and Korean in printersand workstations.
4. System Environment
The alphabets of the ideographic languagesare very large. Hanzi, the language spokenin the People's Republic of China andSingapore, has 7,445 characters; Hanyu,spoken in Hong Kong and Taiwan has13,735 characters in normal use (10 timesas many in total); Kanji, spoken in Japan,has 12,800 characters; and Hanja andHangul, spoken in Korea, have a total of8,224 characters. [Pan 1991] In addition tohaving to deal with the large number ofcharacters, the processing of information inan ideographic language is made evenmore difficult since the languages havenumerous characters with complexpatterns, ambiguous word segmentations,and multiple homonyms. [Matsuda 1985]Consequently, to provide ideographiclanguage support, a new systemarchitecture is required for databasestructure, data input, data processing, anddata output.
Database structure: Although two-byterepresentation is adequate for Japanese,additional bits are required for Chinesefonts. Techniques to create, update andretrieve characters were investigated. Sincesome languages (e.g., Chinese) don't havealphabetic order, search and sort issuesneeded to be addressed.
Data Input: The large number ofideographic characters have madetraditional keyboards inadequate. [Huang1985, Broker 1985] Keyboard alternativeshave resulted in linguistic advances in inputwhich assist this complex problem. Theuse of graphical interfaces facilitate thecomplete support of the language. Pastadvances have affected computing in othernations. Scanning for instance, wasperfected to support Japanese, andexpanded to handle other graphics work.
Data Processing: Additional processingpower is required to handle the expandedcharacters. Unique versions of operatingsystems compensate for double-bytesupport and provide the capacity to handle
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ideographic and non-ideographiclanguages. Programming languages andapplications must be modified to reflect theenhanced data and textual requirements.Applications such as word-processors mustbe adopted to the ideographic languagerequirements.
Ideographic Name and Address Support:To provide ideographic language support,we need to develop dictionaries and dataprocessing techniques to map from onelanguage representation to another. This isnot a new problem and a wide variety oftechniques currently exist. However, weneed to identify and develop the particularideographic support that would satisfy ourbusiness and system requirements. Ourapproach is to develop a multi-lingualdatabase that has the capability ofdisplaying names and addresses of allAmerican Express Card Members andService Establishments and has all theinternal code information for the user that isaccessing the data. Once we create thesupporting dictionaries, we can develop anAmerican Express specific translationsystem which contains business relatedwords, phrases and other necessaryinformation. The American Expresstranslation system would be based oncurrent translation technology with addedAmerican Express specific vocabulary.
Data Output: Printers and the operationalsoftware must be defined which support thefull range of the language. Output is alsoaffected by automated language translatioras results are shifted across countries.Cash dispensing terminals use multiplelanguages including Japanese andChinese. Precision translation betweenEnglish and Japanese or between Englishand Chinese is a requirement which can beassisted by technology developments.
5. Major System Components
In developing a system that takes intoconsideration these environmentalrequirements, our approach is to alwaysthink globally but realize that sometimes aunique local solution will be required. Thiswill allow us to reuse existing facilities whenpossible. With these thoughts in mind, the
major components of our system are asfollows:
Client/Server Environment Direction
Client/server computing is an architecturalconcept that supports the division of anapplication into its component parts. Eachportion of the application can then run onthe appropriate platform. Although modularprogramming techniques have existed forsome time, client/server computing isrelatively new. This new processingconcept has seemingly unlimited potentialfor converting the current mainframe-basedenvironment into one which can supportAmerican Express' information processingneeds well into the next century. Keycomponents of the client/server computingenvironment include the deployment of ultrahigh-speed networks, the industry-widemove toward open systems, and theavailability of mainframe-equivalentprocessing power in workstations.However, the client/server architecture willnot replace the mainframe.
To identify an appropriate client/serverarchitecture. we worked with our offices inthe local regions. Based on our initialdiscussions, the client/server architecturewill include a Font Server, Display Server,File Server, Printer Server, and DatabaseServer. A Token-Ring Network could beused for the client/server architecture.Considering the performance, local regionsmay need several LANs with an appropriatenumber of workstations. How many LANsare required and their relationship with eachdepartment needs to be further studied.With a relatively low investment in LANequipment, users can achieve the followingbenefits: distributed processing, lowercosts through shared resources, access toshared data, better use of existingresources. display/workstation freedom ofchoice, centralized back-up,interconnectivity, and high-speedcommunication.
Since the client/server architecture will befor all applications (including ideographic),we need to build up this foundation for allregions so that everyone can obtain locallanguage support from the same
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environment. As such, the client/serverarchitecture must be in accordance withAmerican Express' Technical InfrastructureRoadmap developed by OperationalSystems Planning Worldwide InformationProcessing and Telecommunications. Weare extending this roadmap to include anarchitecture that supports double bytecharacters (and possibly 3 or 4 bytecharacters ) for Chinese and Japanese.
In essence, our long-term strategy is todeploy a fully distributed environment on aworldwide bases. In this integratedenvironment, all processing functions will beprovided with the same standardprocessing platforms. These platforms willinclude RS/6000s, STRATUS Fault-tolerantProcessors, and other DCE-compliantservers. In this project, we will work withour Taiwan office to develop a RS/6000client/server prototype. Since client/severissues involved with supporting a Chineseenvironment is a more complicatedproblem, we will be able to migrate oursolution to other regions.
The client/server architecture that supportstwo to four byte characters for Chinese andJapanese can be defined as follows:
Font Server: PS/55, PS/2 or IBMcompatible PC can be the font server for aJapanese, Chinese, or other Asian regionsystem. For IBM AIX, the font files arestored in a RS/6000 and are loaded into Xstations whenever it is requested by users.
Display Server: Since X windows is basedon a client/server architecture, besides Xstations, PCs can also become displayservers by installing X server.
File Server: RS/6000 will be used for fileservers.
Printer Server: Either AS/400 or RS/6000will be used for printer servers.
Database Server: RS/6000 will be used fordatabase servers.
Databases: Since American Express hasselected Sybase as our database partner,we will use Sybase with Chinese/Japanese
client/server architecture. Sybase supportsDOS, OS/2, AIX and Macintosh.
Internal Codes for Different Regions: EUC(Extended UNIX Code) is recommended forworkstations since American Express isusing IBM AIX. IBM AIX uses EUC as theinternal code and has defined 14,023Chinese characters. Each Chinesecharacter can take two or four byes. EUCdefines a total of 141,376 Chinesecharacters. This is enough for anylanguage. Since same characters mayhave different appearance in Chinese andJapanese and may have different meaning,it is hard to define unique code for bothChinese and Kanji characters. To accessdata in other areas among different regions,we will use IBM AIX to provide multiplelanguages environments.
Intelligent Letter Generation
We have started to develop an intelligentletter generation system that will facilitatethe process of generating letters inJapanese or Chinese to card members inJapan, Taiwan and Hong Kong. Such asystem will allow the user to input customerspecific information. The system will thenretrieve any additional needed informationregarding the customer from the hostcomputer database. The system will thendecided which type of letter template shouldbe used and then merge the customerinformation into the letter template. Thesystem will then open an ideographiclanguage word processor to allow the userto make any modifications to the generatedletter. Once the letter has been finalized,the system will print the letter. In addition,the system will automatically store the letterin a database along with such informationas the date it was written and the author'sname.
To ensure the development of onestandardized personalized correspondencesystem, we will use an expert systemAmerican Express is currently developing.This system will address all issues ofcustomer correspondence includingautomatic letter generation and networkissues. Once this system is completed, itwill be translated into Japanese to support
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our Tokyo office. We will then translate thesystem into Chinese to support othermarkets. This approach will result in onestandardized system for all regions.
The development of a truly multilingualinput/output system would be the next step.Such a system would not simply be acollection of language-specific I/O routinesto suit specific applications. Instead, itwould contain a formulation of how tospecify characters in different languages.This would enable an application to performcharacter I/O in any language on an equalbasis. [Kataoka et al., 1991]
Resolve Chinese code set incompatibilities
In the system currently being used by ourTaiwan office, the internal code set is notcompatible across different computers. Thegoal of this task is to find a package andcustomize it to resolve this incompatibility.
Character/Font Management
There is a need to develop a tool set whichsupports creating, managing anddistributing the DBCS character font sets.Currently, whenever a new Chinesecharacter is required, a Xerox has to berequested to create the corresponding font.The font and associated internal code mustthen be added to workstations, data captureequipment and the remote mainframe aswell as printers in Taiwan and Hong Kong.The problem is that the font may not becreated in timely manner resulting ininconsistencies among the fonts in themainframe, PC, printers and data captureequipment.
We are studying the market to identifysolutions for character/font management.Since the character/font managementneeds of Taiwan and Japan differ, twosolutions will need to be developed. Forinstance, in Taiwan the Ming font style ispopular for Chinese characters. OurTaiwan office has little requirement ofmultiple font support for Chinese characteroutput. In Japan, the Mincho and Gothicfont styles are popular for Kanji characters,and the Italic and Script font styles areavailable for non-Kanji characters. Our
Japan office expects to have multiple fontsupport for Kanji character output, such asMincho, Gothic, Italic and Script font style.
We are looking at this problem globally aswe work with the local regions to find a toolset for them. However, it is unclearwhether a global solution exists forcharacter/font management since it doesnot appear that any one software companyoffers one management solution for bothChinese and Japanese. However, there isa possibility that a large corporation (e.g.,IBM) may have a global solution. We arestill investigating this issue.
Intelligent Chinese Input System
We are developing an intelligent method toinput information into the client/serverenvironment. By utilizing one virtualstandardized keying method andtransparent internal Chinese representation,Management Services keying staff couldshare and backup workloads. Furthermore,incorpo.ating off-line local data entrieswould speed up data entry and reduce thesystem's response waiting time caused byinteracting with the remote mainframesystem. In addition, this would allow forlocalized design of input screens that couldbe tailored to meet local requirements.
This task consists of the following majorefforts: (1) determine an intelligent inputmethod and (2) develop an off-line localentry system that is integrated with theclient/server environment. To develop anintelligent method to input Chinese we willneed to decide whether to use OpticalCharacter Recognition (OCR) and/orIntelligent Character Recognition (ICR),decide whether to use hand-written Chinesecharacters for input for on-line data capture,select a platform, determine which vendor'sChinese character input system to adopt,and we will need to port the input method tothe desired platform.
Research continues in this field az to whatconstitutes an optimal internationallanguage interface [Morisaki et al., 1991],an optimal ideographic keyboard [Sheng1985], and an optimal ideographic character
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input and processing scheme [Hsu 1991,Tien 1985].
6. Future Directions
There are several new technologies thatcan enhance an ideographic architecture.These include pattern recognition, naturallanguage machine translation, and newinput methods.
Pattern recognition is a technique to matchan input pattern against stored patterns todetermine the closest match. Thistechnology would be useful in developing achop verification system. The chop is anitem unique to Asia. It is carved with thereversed image of a person's name which isused for official documents. It serves thesame purpose as signatures for westerncountries. Pattern recognition could beused to recognize the chop pattern and thusenable depositors to easily and securelywithdraw funds from branch bank offices.
To provide multi-lingual support to itscustomers, some form of natural languagemachine translation could be used. Thistechnology could be used to orovide welltranslated multi-lingual dccuments.However, due to technology constraints, afully automatic translation system is notavailable in the near future. However, anunderstandable translated document isavailable between some languages and it isuseful for previewing untranslateddocuments.
New input methods such as pen-basedcomputing, speech recognition, and opticalcharacter recognition offer alternatives tothe conventional keyboard. This isespecially important for ideographiclanguages since keyboard input in not veryconvenient. Currently, people who useideographic languages try to map thepronunciations, strokes, or the shapes ofthe characters to the keyboard. [Cui 1985]These systems are generally not easy tolearn or use. In addition, these systems donot provide fast input speed and theyrequire considerable system resources.
7. Conclusion
It is only natural that people expect to havesupport in their own language. This isparticularly true in high growth marketssuch as Japan, Taiwan, Hong Kong andKorea where over 90% of the preferredlanguage is the national language.American Express is committed to meetboth the internal and external requirementsfor language support. Externally we mustcommunicate with our customers in thelanguage of choice in these markets and wemust be capable of supporting their nationallanguages efficiently and effectively. Toprovide such support, we had to addressthe client/server environment issues as wellas develop software systems that will utilizethis architecture. In addition, we had toensure that the selected client/serverarchitecture as well as developed softwaresystems were in accordance with theAmerican Express world-wide architecturalstandards. In taking a global approach tothe problem, we can ensure that our Asiancard members will receive the same qualityservices as any other card member.
The effective use of ideographic languageis still in a rudimentary stage. A good dealof research is needed to facilitate the long-term goal of effective ideographic languagesupport within the various AmericanExpress business units. The architectureproposed in this paper, along withideographic support software, will improveour ability to communicate with cardmembers in their local languages. As newtechnologies mature, we can expect tofurther improve the quality of our services toall our card members worldwide.
8. References
Becker, J. Typing Chinese, Japanese, andKorean, Computer, pp. 27-34,January 1985.
Cui, W. Evaluation of Chinese CharacterKeyboards, Computer, pp. 54-59,January 1985.
Hsu, S. A Flexible Chinese Character InputScheme, in Proceedings of the ACMSymposium on User Interface
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Software and Technology, pp. 195-200, November 11-13, 1991.
Huang, J. The Input and Output of Chineseand Japanese Characters,Computer, pp. 18-24, January 1985.
Kataoka, Y., M. Morisaki, H. Kuribayashi,and Hi. Ohara. A Model for Inputand Output of Multilingual Text in aWindowing Environment, inProceedings of the ACM Symposiumon User Interface Software andTechnology, pp. 175-183, November11-13, 1991.
Pan, A. Communications with Character,Connect TRS Technologies, pp. 6-7, October 1991.
Matsuda, R. Processing Information inJapanese, Computer, pp. 37-45,January 1985.
Morisaki, M., E. Kawada, H. Kuribayashi, S.Kuwari, M. Narita. XJp System: AnInternationalized Language Interfacefor the X Window System, inProceedings of the ACM Symposiumon User Interface Software andTechnology, pp. 185-193. November11-13, 1991.
Sheng, J. A Pinyin Keyboard for InputtingChinese Characters, Computer, pp.60-63, January 1985.
Tien, H. The Pinxxiee Chinese WordProcessor, Computer, pp. 65-66,January 1985.
Architectural Consideration in the Design ofNetwork Based Educational Systems (NBES)
S. V. AhamedCity University of New YorkCollege Of Staten IslandStaten Island, N.Y.10301
V. B. LawrenceA T& T Bell Laboratories
200 Laurel RoadMiddletown, New Jersey, 07748
ABSTRACT
In this paper we enhance the architectures of both the telecommunication networksand intelligent networks to incorporate substantial component of "knowledge processing".It is then reconfigured to meet the needs of educational and research communities.Processing of knowledge occurs as information flows through the network in two distinctways. First when the initial interrogation takes place, the subject matter is identified andlinked to other knowledge by forward and backward chaining. Second, the function to beperformed on this subject matter is also identified and a operator-operand relationship isestablished to facilitate the network response.
1. Introduction
Network based educational systems (NBES) have startedto emerge and isolated cases of a broad spectrum of suchnetworks facilitate distance learning, interactive distanceclassrooms and video based participation of distantclassrooms. Such applications (1, 2) need high bandwidthcommunication links to permit bidirectional video facilities tobe implemented. Such techniques have been operationaland proven successful in creating a classroom environmentfor college education.
Whilst, we commend the progress in this direction, we arealso alarmed that the progress in the crucial direction ofintelligent networks is not being harnessed for the innovationand development of educational networks. This type ofnetwork processes knowledge and its segments intelligently andfabricates the response from a large cross-section ofknowledge bases (banks). This network uses thecommunication capability of the network to collect queries fromstudents in an interactive mode and then poses the question toa "knowledge ring" comprising of numerous knowledge basesarranged hierarchically, and then bursts the response back froman "artificially intelligent instructor". Such a response wouldbe consistent with the response of an extremelyknowledgeable instructor but needing streamlined languageinterface to comprehend the precise needs of the student.Once the query is understood, the system would restate thequestion back to the student in the way the particularknowledge base is interrogated. Upon confirmation, thesystem would deliver the response back to the student. In amanner of speaking, this is how the human instructor wouldhave responded in a classroom. We do not promise that thismethodology of teaching is applicable in every situation, butthere appears to be niche for such an NBES where thestudents are eager and intelligent to interact constructivelywith the system. Typical of this environment is the researchand development facility of any organization or the graduateresearch center of any university.
In this paper we present an architectural configuration of the(NBES) system and its components which have all theadvantages and features of any intelligent network (3, 4, 5, 6).We also present the areas where these networks differ fromconventional intelligent networks and the need for syntacticrule-based "knowledge processing" and the need for"knowledge control point" rather than a service control point(SCP, See Ref 7) of the traditional intelligent network. Finally,
we present how these systems (NBES's) are compatible withevolving networks such as the SONET (8, 9), campusnetworks or any high speed digital network in the circuit orpacket mode of function. The asynchronous transmissionmode of the ATM or the hierarchy of the SONET rates do notconstitute any problem to the evolution of NBES.
We hasten to add that this type of network may be futile andoverpriced for environments where the emotionalinvolvement between the student and teacher is high andeducation is much more than the textual or graphicalexchange of information. It is likely to retain some of thepitfalls that the Al techniques are known to have. Overlyintelligent abusers can cause serious problems in thefunctionality of NBES and bring it to "dead-locked" halt!However, NBES can be as useful to the educational communityas intelligent network is to the society.
The rest of this paper is divided in two parts. In the first part,we present the educator's point of conceptualization of theNBES. In the second part, we present the networks andcommunications aspects in the proposed NBES and finallywe project how the NBES may be evolved over the next twodecades to take full advantage of the already committednetworks such as IN/1 (10), IN/1+ (11), IN/2 (12), AIN (13),USIN (14, 15), together with ISDN (16), SONET (8, 9), ATM(17, 18) already appearing in the horizons of our society.
PART I. The Educator's Perspective
2. Features Common to Educational Environments.
If exchange of information and knowledge has been a ageold propcsition in schools and universities, then the disciplineof communication is at work. The impact of a new field ofdata communication upon the oldest institution of the teacher-student relation is very likely to cause resistance and frictionBe as it may, if the two are going tr., be merged, thenknowledge bases can be installed, interfaces can bedesigned, and the learning steps can be compiled inprocessing increments of information which will be collated,sorted, merged, rearranged, graphed, and evolved as abody of knowledge which will be retained in the minds ofthe learners. Thus knowledge engineering is the concern ofevery teacher and of every student.
Fortunately, computer science has stream lined somethese basic function in all exchange of information and data.
BEST Cf41,71;l'al:LAUE975 1 _
More important is the man-machine communication viastructured language which can be parsed based upon the rulesof syntax, analyzed based upon the rules of the semantics, andif the entire module of communication (i.e., the program) isconsistent then the process of assembly and linking can bestarted to generated the executable codes which themachine simply executes as an independent module or as abinary machine instruction.
Flexibility of language facilitates communicationenormously. Now, if a fault tolerant super compiler can beinstituted at every man-machine interface then any studentcan talk to the machine and any machine can become anunderstanding teacher. The installation of fault tolerant supercompiler is an outrageously expensive proposition. But thestudent can go half way in working with a realistic interface ariaan inexpensive computer.
3. Role of Networks in Education Environments
Ideally an instructor will able to answer any query on an:subject instantly and provide a platform for interactivehierarchy of knowledge. Since the instructor is human.students learn to compromise. If the logical and retrieval partof the instructor function can be automated, then the source ofinformation can be in distant knowledge banks and the rolenetworks to communicate information over long distancesbecomes evident. In this mechanized environment,creativity of the instructor to foresee implications, the forwardvision, the integration of concepts still remains human. But thecapacity to store, monitor and retrieve information over longdistances brings memory technology and communicationengineering within the realm of teacher-student relationship.
When the role of networks is only to gap the physicaldistance between teacher and student via video and audiochannels, distance learning ensues. In addition, when the role ofnetworks becomes intelligent and human in processingand controlling the information communicated, the featuresof intelligent network ensue. When the role of the networkfurther includes the processing of knowledge by dissecting(parsing) and reforming the syntactic and semantic context ofthe network queries to assemble a logical response fromdistributed knowledge bases, then the network based educationsystem (NBES) emerges.
4. Role of Knowledge Bases in Educational Environments
Mechanized storage and retrieval of information offers welldocumented (19, 20, 21) and distinct advantages to theeducational community. In this paper, we shall not reiteratethese benefits, instead we will discuss the management andupdating of such vast electronic devices that serve the interestsof the teaching community. Knowledge is dynamic,quantifiable, and classifiable. If the aforementioned aspectsare accepted, then knowledge bases need to be maintained,stored in discrete blocks at finite addresses and can beseparated out by the relationship that any finite quantity (e.g. apaper by its title, keywords, etc.; a book by its title, chapters,references, etc; a concept by its origin,its use, its application,etc;, etc.) of knowledge has with respect to prior knowledgeabout the subject (whose address is known or accessible to thesoftware knowledge-bank managers).
In conjunction with the proposed NBES, knowledge basesneed to be addressed by subject and need to be maintained andmanaged by experts in the field This concept has been wellrecognized in the telecommunication, credit-card, car-rental, etc., industries and trained staff maintains suchdatabases. In context to the intelligent networks, the servicemanagement systems (SMS, see Ref. 22) is viewed as anessential element to maintain, monitor, update, and optimize theservice control point (SCP, see Ref. 23). And this SCP isitself a large network database. This SCP has 800. 911, ABS.etc related information in IN/1, and 900, 700, CLASS, etc,related information in the ememing IN/1+, IN/2 networks
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PART II. The Network Designees Perspective
5. Proposed Architecture of NBES
5.1 Basic Existing Building Blocks
5.1.1 Campus Networks (CN): NBES is network based. Itinterconnects numerous campus networks like MAN's andWAN's interconnect LAN's. Network nodes and gateways incampus networks monitor and direct the flow of information inand out of campus networks to a knowledge query point (SeeSec. 5.3.1) and then on to a knowledge ring (See Sec 5.2.1).The outflow of solocitations or commands from students flowsup to the knowledge query point and specifically compiledinformation from the knowledge ring is received in the campusnetworks.
5.1.2 Very High Speed Data Networks (VHSDN):Classic circuit switched telephone type networks arebidirectional with generally the same data rates. These arelikely to become saturated (especially during the peak traffichours) with the high volume of personalized data traffic in theNBES. However, evolving high speed networks dedicated tothe transport of large blocks data offer enormous promise. Itcan be seen that the student queries need initial processing toremove inaccuracy of the language or uncertainty of thequestions posed. But when the formation of the query iscomplete the database is communicated by a packet by thebackbone packet switched educational network (equivalent tothe CSS-7 (see Ref. 24) network for intelligent networks). Inthe conventional sense these CCS-7 colitrol and facilitate thenew services and control the circuit switched channels withinthe SSP's. In the NBES, the knowledge ring now cantransmit a large blocks of customized data in theresponse to the solicitation/command also via a high speedpacket network linking the "knowledge ring" and the numerouscampus networks. Fast packet transmission technology (25) isalso emerging through the national and international networks.It is interesting to note that the normal flow of informationbecomes unidirectional in NBES as opposed the thebidirectional flow of control information in the conventionalintelligent networks. Bandwidth allocation can thus be madeoptimal in NBES.
5.1.3 Knowledge Bases (KB): If the information containedin the knowledge bases is highly specialized and current and atthe state of technology, then a large number of the knowledgebases may become essential. These may be networkedor independent. In any case an individual knowledgemaintenance system (KMS) for every KB is necessary.Small independent dynamic databases such as stock-marketdatabase, airline database, or even patient database existand can be suitably modified for store modules of knowledge(e.g., papers, equations, technologies, etc., in variable lengthdata structures) to function as rudimentary knowledge bases.Ample literature exists (19, 21) about the existence andfabrication of such bases and will not be discussed any further.
5.2. Other Elements of the Network
5.2.1 Knowledge Ring (KR): Isolated knowledge basescan become too expensive to dispense specializedmodules of information. Conversely very widely documentedsubjects can need multiterabytes of storage space. To containand manage the storage of very vast bases or very tiny bases,a knowledge ring provides a viable compromise. This ring.capable of accessing numerous bases, caters to growingknowledge and new areas of research by adding a node onthe ring. New nodes may also be added to this ring as newdisciplines emerge and evolve. Conversely old nodes maybe deleted, when it is no longer necessary to retain obsoletebases, or when that particular base is no longer economicallyviable to sustain. The access and cost of access may then bothbe controlled by software and protocols as they are used in thenodes that access long distance and trunk facilities of any
communication system.
If the knowledge ring is itself designed as network, then itsnodes can be assigned logical addresses to correspond to thehigh level classification of the Dewey decimal system or theLibrary of Congress classification of the subject matters. Theapproach permits the designers of the NBES to build anelectronic library of any size, in any expertise, and as easilycomposed as a physical library to by changing the contentsof the data structures in the knowledge bases addressed aslogical nodes on the knowledge ring.
5.2 2 Knowledge Management System (KMS): knowledgehas vague frontiers and it is actively modified, processedand expanded. For this reason the updating of the knowledgebases is crucial. Hence a group of experts to update andmodify such a knowledge base is essential. This functionality ishuman in most organizations, libraries, or even computersystems. Operating System techniques may sometimes beused to retain the most recently used variable/file, mostfrequently used variable/file, nearest context variable/file, etc.(as they are used in memory and Cache managementsystems). However implemented, the functionality of KMSin NBES is necessary. At this stage of the development ofNBES, we foresee these KMS's to be staffed by humanbeings (1 rather than a self renovating information system.
There is another side of the KB's and KMS's. When thesources of active knowledge generation (such as researchlaborrtories, satellite tracking stations, Rand Corporations,Research Institutions, etc.,) centers are networked to feed theKB's directly, then the updating can be automatic. Examplesof such automated environments exist. For example, a stockmarket transaction is automatically entered in the stockmarket database. Weather satellites automatically updatemeteorological centers. Defense radar trackers automaticallywarn national defense networks, etc.. In an paperiess societywe can foresee the sources of knowledge being in directcommunication with the consumers of knowledge via theNBES environments. Check points analogous to the KQP areseen as being essential to the entry of only the authenticatedand authorized information in the KB's and in the KR.
5.3 New Key Elements in the Network
5.3.1 Knowledge Query Point (KQP) or Software interfacebetween NBES and CN: In order for the NBES toperform intelligent functions in responding to queries fromcampus networks, an interpretive interface is necessary toaccept structured queries and infer which knowledge base toaddress in order to generate a response. In conventionalintelligent networks the network response in initiated whenthe service switching point (SSP, see Ref. 26) detects a triggercondition (i.e., the dialing of 800, 911, 700, etc.,) from thesubscriber. We see KQP as a new element to the generalarchitecture of networks. The functionality of the KQP iscritical to the success of this network environment. Itaccomplishes the function of a preprocessor (or the very firstcheck point of legitimate users and their transactions (inthe form of questions/retrieval that may be initiated) of thequeries through the network. In a sense this is softwareequivalent of the physical door placed at money access center(MAC) systems. At the entry to the network, the KQPperform:, the student validation function, authorization code,access authorization and billing information, credit cardinformation for the service provided. Transactions of illegalusers, hackers, virus planters are terminated at this level by thenetwork.
( For a network of KB's one KMS with numerous specialistsfor each KB with one common interfacing may be sufficient andperhaps more economical. The size of the KB and thedynamic nature of stored information will influence this choice.
This software barrier at KQP also has a query processorwhich identifies what is asked about which subject matter. Theparser in KQP separates the solicitation and/or command fromthe subject matter in the query. The solicitation can be in theform of what, how, what, why, when. etc., or combinationsthereof, about the particular subject matter in the query. Thecommand can be in the form of lookup, retrieve, expand,instances, analogize, etc., the subject matter. Every queryand/or command is an operation code with its customizedprotocol. And every subject matter can be viewed as anoperand. Together they form an NBES network instruction. Atransaction can be a single instruction or an assembly of suchinstructions depending upon what the user wishes to accomplish.This assembly is then executed or interpreted by the network.Every instruction accomplishes a finite step in "knowledgeprocessing" in the network.
5.3.2. The Knowledge Transfer Point (KTP): This softwaresystem acts as a second check before any transaction withthe network takes place. It identifies the subject matter via amodified english language dictionary. Valid dictionary words(including proper names of people, places, materials, objects,about whom information exists in the KB's) are checked to seeif they belong to classification of knowledge in the KR. In asense, KTP identifies the subject matter in context to thestructure of the overall knowledge by identifying the"generalized knowledge address" (the Dewey Decimalnumber, the Library of Congress identifier, etc.; see Ref. 27)of the subject matter sought. Misspelled words, nonsensesubject matters and improper query in context to the subjectmatter are returned to the users. Unauthorized users of theparticular subject matter, sneakers, browsers, and accidentalinformation leaks, etc. are expelled for network security.
The modified dictionary identifies the subjects in theknowledge bases within the knowledge ring (KR). Thesubject matter is itself classified and cataloged according to asubject hierarchy such as the Dewey Decimal System, theLibrary of Congress system, the Asian Library system, or eventhe Princeton classification system. The two syntacticalcomponents of the initiators query are reconstructed here.Only and only if the KR can handle the interrogation from theCN will the syntactical components of the query be allowed toproceed in the network. This procedure is similar to theoperating system procedure of any computer system whichdoes not permit the execution phase of a program, if there werefatal errors in compilation.
5.3.3 KQP-KTP Combination: whereas the KQP identifieswhat is to done, the KTP has a knowledge address of thesubject matter. Together they are a complete legitimateinstruction to the network. Typically, the query is converted toa machine language instruction which has two components in itnamely, the operation code (identified by KQP) and theoperand/operands (identified by KTP). It is this single instructionor a group of such instructions that drives the NBES like thebasic instruction or the microprogram associated with theinstructions that drive any computer. We see a lot of flexibilityin the implementation of the KQP (such as found in theimplementation of basic hardwired or microprogrammed CPU),and this flexibility may used to used to design an optimalKQP for any application (by selecting the most suitablecpcodes and/or network microcode for the application.
5.3.4. Knowledge Control Point (KCP): This element finallyconverts the "knowledge address identifier" to the actualphysical or logical address of the locations in knowledge baseswhere that knowledge is embedded. The knowledge address inany of the knowledge classification systems (such as theDewey, Library of Congress, etc.) is converted to a networkaddress of the knowledge base. It is necessary to see thatthis address translation is hierarchical, i.e., the first segment ofaddress alone can identify the KB and the latter segment orsegments can actually locate the exact track-sector address
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of the mass storage system. We foresee the possibility ofbuilding massive RAMs which have memory addresses tocorrespond to the knowledge address of the subject matter, thusreducing the time for address translation further.
5.3.5. Knowledge Logic Interpreter (KLI): When theoperation code (query/command) and operands (hierarchicalnumber, e.g., Dewey decimal number of the subject matter)are both identified and validated, the KLI becomesinstrumental in dispatching the executable binary languageinstruction (in any appropriate format or protocol) to thenetwork components. The network components carry out theirrespective function (as they are performed during call-processing in traditional telecommunications networks) tosend the answer back to the initiator of the query. Theinformation sought is extracted from the appropriate knowledgebase or ring, and the high speed digital network is used toburst this information the campus network (CN) via itsgateway to the VHSDN. At this stage the conventional CCITTX.25, BX.25 or any other suitable network protocol may beimplemented. Once again we see the the function of the KLIis not exactly the same as that of the SLI (28) in IN/2.
5 3 6. KCP-KR Protocol: Wherever the physical or logicaladdress of the actual knowledge (the subject matter) may belocated, the command (i.e., opcode) for that piece ofknowledge has to be communicated to the KB where thatsubject matter has been located. This network instructionreceived at the KB is executed in its entirety at its appropriateKB. The protocol can be in the form of operation codes or it canbe further cnndensed to make the best use of the networktransmission and protocol processing facilities. If these KB'shave central processor units +hat are function on a standardmicrocode, then the KCP neeus to communicate the address ofthe microprogram in the control memory of the CPU.Typically we expect the complex queries to have more thanone "instruction" to the network.
5.3.6 NBES Network Protocol: We envision that this protocolhas its network functions distinct from the common channelinteroffice signaling system (CCISS, see Ref. 29) protocol andalso distinct from open system interconnect (OSI, see Ref. 30)communications protocol. The functions of the NBES can notbe elegantly mapped into the functions of either (CCISS orOSI) environments. The functions of NBES also can not beassembled as a superset from the functions of both CCISSand OSI subfunctions. This protocol has to eventually evolvein its right as any of the other protocol. But at this stage we donot see it as a major problem since the evolution of NBES isstill embryonic.
5.4. Existing Platform for NBES
There is some analogy between the functions andcomponents of the conventional intelligent networks (such asIN/2, USIN, etc.) and those of the NBES. But we also foreseethat forcing NBES functions from IN/2 architecture issuboptimal if not its misuse. The concept of recognizing thestructure of knowledge and then being able to compose aresponse form the network offers some distinct advantages.Properly designed NBES can eventually combine all theadvantage the distance leaming, and mass media systemshave to offer. We present some of the unique functions inSection 7. For these reason, the implementation of the NBEScan be seen as an enhancement of the implementation ofthe conventional intelligent networks.
6. Architecture of NBES
Two architectural drawings are presented. In Figure 1. aspecialized topology is presented. A transactions request isinitiated at any of the campus networks. This request flows in-wards via the KQR, into the knowledge query ring via thedialog formatter DF. The query format is verified here in DF.
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The user and operational legitimacy is established in KQR.The information is then fed into the KCP to establish thevalidity of the subject matter being transacted. The syntax ofthe command is formulated and verified to check who is doingwhat to which piece of knowledge.
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If such a legitimacy is valid, the knowledge identifiernumber is translated to the logical or physical address of theknowledge base within the KCP, which dispatches thefunction (in executable binary code) that the particularknowledge base has to perform. This command to theappropriate KB is dispatched by the KTP via the typical high-speed backbone packet network of the NBES.
The KTP-KB communication is depicted by the outwardradial lines to the KB at the outer rim of the diagram. The KMSassociated with each KB is also depicted. Clusteredknowledge bases and their common knowledge managementsystem (not shown) may also be used here.
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Fig. 2 Implementation of the NBES using existing public domainnetworks and ISDN lines. CN Campus Networks, KLI. KnowledgeLogic Interpretters; DP: Dialog Processors, PBX: Private BranchExchange; KTP/STP: Knowledge Transfer Point/Service TransferPoint, SMS: Service Management Systems: SCP/E: Service ControlPoint/Educational environment; ADR.DB: Address databases of theKnowledge Bases: KB. Knowledge Bases: SSP's Conventional ServiceSwitching Points; ISDN. Integrated Services Digital Network TheISDN lines become essential for communication between the variousNBES elements since the channel control information is necessary forthe newly recovered information to be relayed back from theKnowledge Bases
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individual instructions or complex transactions needingmultiple instructions are executed at the knowledge base. Whenthe response packet of information associated with the NBESinstruction is secured from the KB, then that packet is sent tooriginating CN with user identification (i.e., the actual terminaladdress) at which the transaction was initiated. Whereas theconventional STP's in intelligent networks function twice inthe address translation at SCP, the KTP functions only once.The completion of the transaction takes place via any VHSDNand not the CSS backbone network of conventionalcommunication networks. This is seen as a fundamentaldifference between NBES and IN's thus leading to much moreflexible architecture of the NBES compared to the architectureof IN's.
In Figure 2, the conventional communication networks areused. Three new components KQP, KTP and SCP /E are addedsince the existing networks do need the NBES functions.Numerous campus networks have access to this computernetwork that performs the functions of three componentsdiscussed earlier. The response from the KB's iscommunicated via any existing packet network. Even thoughthis suboptimal configuration can work, we see prolongednetwork response times and suboptimal use of circuit switchednetworks, if ISDN is used to communicate between KB's andSCP/E's.
7. Intelligent (Al) functions of NBES
7.1 Supplementary Knowledge:
When the KCP has executed a series of transactions forany participant (or student), it has information about the userID and how the network was queried. Since the informationsought by the student follows a certain pattern ofinterrogation, the network can detect which aspects of thesubject matter the student is ill informed and recommendor initiate further instructions to the KB to furnish "readings"rather than the reading lists that the human instructor provides.The pattern of pursuit of knowledge is used to determine thelack of expertise of the interrogator. This function is basedupon the sequence of queries flowing through the KCP.
7.2 Complementary Knowledge:
When the KCP has caught on to a line of interrogation, thepossible ultimate goal(s) of the participant can be extrapolated(from the the knowledge tree or hierarchy). This gives NBESthe distinct capability to be exhaustive about all outcomesrather than the limited search that humans make. Theknowledge processing of the network is thus intertwined with thecreativity of the participant. In knowledge engineering, forwardchaining permits a much wider routine knowledge search thanwhat the mind can perform routinely. We hasten to add thatthe network acts as a powerful complement rather than achallenge to human creativity.
7.3 Inductive Knowledge:
The KCP can also detect the relationships between thequeries, i.e., detect the forward chaining and backward chaining(carried out routinely in knowledge engineering) of the subjectmatter pursued and lead the student to areas known in literature(and embedded in knowledge bases) which the student may notknow. In a sense, the network now becomes an "artificiallyintelligent instructor identifying and detecting the cause-and-effect relating the subjects being pursued and indicateother causes or other effects related to the same event/subjectmatter.
7.4 Analogical Knowledge:
When a researcher uses a chain of interrelationships in whathe is pursuing, the KCP is able to detect other disciplines or
situations in which such relationships exist. Supposing ananthropologist is seeking certain species in certain geographicalregions, the CPU's in the KCP's can list all the commonweather pattern in the regions and indicate where else suchpatterns exist. As a second example, if a petrochemicalengineer is exploring a polymer chain, the KCP can alert thechemist where else such chains exist and all the supportingdocumentation. This functionality is most easily achieved bystoring the information in the KB's as relational data structures.Whereas searches based upon byte-strings is commonlydone in most databases, the searches that the NBES canperform are based upon the structure of knowledge queried andits relationships to the previous knowledge that has beensought.
7.5 Deadlocked (Self Contradictory) Pursuits:
When the pattern of interrogation is partly established bythe researcher at the KCP, its CPU's can complete the linkageof information to provide all the answers sought. However, ifthe line of interrogation is futile (e.g., list all situations whereenergy has been created and not transformed), the KCP canprovide alternate approach to the problem and inform theuser about fundamental laws of conservation of energy ifapplicable.
The functions that NBES can perform are based upon theknowledge and its structure (via forward and backwardchaining) rather than the retrieval of data and it can becomemuch more powerful teaching and service tool in mosteducational environments. It can also verify the logicalinference the student has drawn from the knowledge thestudent has gained from his interaction with the NBES. Thisis based upon the logic embedded in the knowledge it hasfurnished to the student. Any miscommunication andmisunderstanding that the student may have gained during theinteraction with NBES is thus eliminated.
8. Conclusions
In this paper we have presented two possible architecturesof the network based educational systems. Unlike massmedia systems, these systems compile and compose theinformation returned. They are knowledge based and querydriven. They respond and monitor the progress of eachtransaction in context with the capability of the network andthe in context with the prior interrogation. They respond bydetecting the english language like queries from campus andlocal area networks. The flow of information is alwaysunidirectional through out the network and duplex mode ofdata transmission may be completely eliminated. The channelcapacities may thus be adjusted much more optimally in thevarious links of the network.
From a distant perspective this network performs well ashigh level educator at graduate centers or artificiallyintelligent knowledge bank to research laboratories. It respondsroutinely the very first question but immediately picks up theforward or the backward linkages of that particular informationthat has been transacted by the network. Alternatively, thenetworks may be programmed to retain a knowledge profile ofeach student and answer according to the IQ of the student.We see this aspect of the network function to be a challengeto the intelligence and the curiosity of the student basedupon the individual traits. This makes the network monitor thelearning process of the student like any university or a school.
References:
1. F. Barry Brown, "A Primer on Telecommunication inDistance Learning", Proceedings of the PacificTelecommunications Council, January 12-15, 1992, Paper2.3.6.1. pp 308-317.
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2. Patricia L. Taylor, 'The Global Classroom: ATelecommunications Event for Educators", Proceeding ofthe Pacific Telecommunications Council, January 12-15, Paper2.3.6.2. pp 318-323.3. S. V. Ahamed, "Intelligent Networks", Chapter 9,Encyclopedia of Telecommunications, Academic Press, January1989, pp. 159-174.4. S. V. Ahamed and V. B. Lawrence, "Intelligent Networks:Architecture and Implications", to be published in theEncyclopedia of Physical Science and Technology, AcademicPress, 1992.5. R. P. Weber, "Data base Communication Call ProcessingMethod", U.S. Patent 4,191,860 March 4, 1980.6. W. D. Ambrosch, A. Maher, and B. Sasscer, "TheIntelligent Network', Springer Verlag, 1989.7. McMahon, C. S., "Service Control Point GenericRequirements, Bell Communications Research, TM-TSY003059, June 30, 1987.8. R. Ballad, Y.C. Ching, "SONET: Now It's the Standard OpticalNetwork", IEEE Communications Magazine, March 1989, pp. 8-15.9. N. B. Sandesera, G, R. Ritchie, B.E. Smith, "Plans andConsiderations for SONET Deployment", IEEE CommunicationsMagazine, August 1990, pp 26-33.10. J. Meurling, "An Intelligent Network Perspective",Bellcore's Symposium on Intelligent Networks", Brussels,Belgium, January 1988.11. Bell Communications Research, "IN/1+ NetworkBaseline Architecture", Bellcore Special Report SR-NPL 00152,May 1988.12. P. Miller, "Intelligent Network/2: A Flexible Framework forExchanging Services," Bellcore EXCHANGE, 5/6, 1987.13. R. K. Berrnam and J. H. Brewster, 'Perspectives on theAIN Architecture", IEEE Communications Magazine, SpecialEdition on Intelligent Networks, Feb., 1992, pp. 27-33.14. Beaty, A., Jr., "The Evolution of Intelligent Network",Telecommunications, February 1989.15. A. Heiber, "An Overview of Universal InformationServices: Concepts and Technologies of Future Networks", A T& T Technical Journal, March/April 1989, pp. 5-13.16. R. F. Linfield, D. V. Glen, E. M. Gray, "In ISDN Primer",Chapter 1, in ISDN, DECnet, and SNA Communications,Howard W. Sams and Co., 1989.17. G. Woodruff and R. Kositpaiboon, "Multimedia TrafficManagement Principles for Guaranteed ATM NetworkPerformance," IEEE Journal on Selected Areas inCommunications, April 1990.
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18. H. Gilbert, 0. A. Magd and V. Phung, 'Developing aCohesive Traffic Management Strategy for ATM Networks,'IEEE Communications Magazine, October 1991, pp. 36-45.19. L. Kerschberg, Ed. "Expert Databases Systems:Proceedings of the First International Workshop",Benjamin/cummings, 1986.20. W. Kim and F. Lochovsky, "Object-OrientedConcepts, Databases, and Applications", Addison-WesleyPublishing Co. 1989.21. M. Morgestren, "The Role of Constraints in Databases,Expert Systems, and Knowledge Representation", Proceedingsof the First International Workshop, Benjamin and Cummings,1986 pp. 469-483.22. Bell Communication Research, "IN/1+ Network Plan",Bellcore, Special Report, SR-NPL-001034, Issue 1, September1988.23. J. 0. Boese and R. B. Robrock, "SCP, The BrainsBehind Intelligent Networks", Bellcore Exchange, 11/12, 1987.24. Bell Communication Research, "Signaling System 7InterLATA Carrier and International Carrier InterconnectionSwitching System Requirements", TR-TSY 000394, Issue 1,March 1987.25. J. J. Deagan, Jr., G. W. R. Luderer, and A. K. Vaidya, "FastPacket Technology for Future Switches", A T & T TechnicalJournal, March/April 1989.26. Bell Communication Research, "Service Switching Pointand End Office Use of Signaling System 7 To SupportAdditional Capabilities," TA-TSY-000877, Bellore, Issue 1,February 1988.27. Comaroni, J. P., "Dewey Decimal Classification", 18thEdition, 1976, Forest Press, Albany, New York.28. Bell Communications Research, "Service LogicInterpreter (SLI)," Bellcore SR-TSY-000778, Issue 1, Jan.1988. Also see "Service Logic Interpreter PreliminaryDescription," Bellcore Special Report, SR-TSY-000778, Issue 1,1987.29. Bell Communications Research, "Signaling TransferPoint Generic Requirements", TR-TSY-000082, Bellcore.Issue 2, June 1987, also see TA-TSY-000082, Issue 3, January1988.30. Bell Communication Research, "OSI ProtocolRequirement and Objectives For Operations Systems andNetwork Element Interfaces," TA-TSY-000285, Bellcore, Issue3, December 1987.
Anticipating and Estimating Adoption and Resistance of Interactive Instructional Technology:A Look at Multimedia in Higher Education
Louis Leung, Ph.D.Assistant Professor
Department of CommunicationUniversity of Hawaii at Manoa
Honolulu, HI 96822U.S.A.
1. Abstract
The purpose of this study was to examine the perception of college professors aboutmultimedia instructional technology (MIT), and the factors that are perceived by them thatfacilitates or hinders the adoption of MIT in the classroom. Results indicated thatindividual factors such as awareness, interest, attitude, evaluation, involvement ofinformation technology are common predictors for both early and late adoption. Externalfactors such as perceived administrative and organizational barriers were found, by large,not significant predictors in adoption decisions.
2. Introduction
The idea of transforming classroom teachingand learning through the use of advancedtechnology is older than the idea of computers inclassroom. From textbooks and chalkboards toradio, film, and television, claims predictingextraordinary changes in teacher practice andstudent learning, mixed with promotional tactics,dominated the literature in the initial wave ofenthusiasm for each new technology (Cuban, 1986).Computers joined the list of technologies promotedfor use in school more than 20 years ago; but then,after an initial flurry of interest in computerassisted instruction (CAI), the use of computerlanguished in schools until 1980s. Today, with theadvent of multimedia instructional technology(MIT), there has been a resurgent interest inradically reforming schools to allow for moreactive, hands-on, student-directed learning,independently or in groups; and computers inclassrooms are now often seen as both a catalyst anda support for making this transformation(Pearlman, 1989).
However, contrary to this excitingphenomenon, government studies reported thatmany teachers are not adopting the technology intheir teaching. In an unpublished survey by theCenter for Social Organization of Schools, it isreported that, between 1983 and 1985, the number ofcomputers in U.S. schools quadrupled fromapproximately 250,000 to over one million. Thisnumber doubled again by 1989 to reach 2,355,000computers. In 1985, 86 percent of the nation'sschools had access to computers, with 24 percenthaving 15 or more. By 1989, the number of schoolswith computers had climbed to 96 percent; 57percent of these schools had 15 or more computers(Center for Social Organization of Schools, 1986 and1989). In a separate study by the Congressional
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Office of Technology Assessment (OTA, 1988), it isnoted that "schools have acquired computersrapidly... but most elements of the instructionalprocess remain the same. This contrasts with othersectors of society, where technology changed theway business is transacted, medical problems areanalyzed, and products are produced." Moreover,"despite the presence of computers in most allAmerican public schools, only half of the nations'teachers report having ever used computers (OTA,1988)." This astonishing finding suggests thatsupplying teachers with computers does not assurethat they will become used as part of theinstructional program at school. It seems thatteachers are reluctant to alter their teachingapproaches. Graubard (1972) pointed out that thetask for educational reform and social change is notto put more computers in schools and to initiatefurther studies but to equip individuals with themeans to understand and struggle against structuraland attitudinal impediments to implementingknown solutions. In the largest view, therefore, agauge of teachers' attitudes and evaluation aboutinstructional technology is in part a measure oftheir commitment to educational reform.
Since World War II, there have beensystematic studies undertaken in Western Europe(Rabier and Inglehardt, 1977, 1978; Inglehardt, 1977)as well as in the United States on public attitudeabout science and technology (Pion, George, andLipsey, 1981; Etzioni and Nunn, 1974; Laporte andMet lay, 1975; Marshall, 1979; Yankelovich, 1982).The rationale underlying such studies is generallyas follows. A positive attitude about science andtechnology is a necessary value in the cultural andpolitical milieu of a nation undergoingmodernization. Not only must political attitudessupport leaders favoring the advancement ofscience but public expenditures for suchadvancements must be made. Following the same
line of reasoning, it would be most appropriate tosay that a positive attitude about instructionaltechnology is also a necessary value in the culturaland political milieu of an educational systemundergoing advancement and modification.
A review of literature shows that numerousstudies have addressed the danger of oureducational system being inferior to many westerncountries such as Japan and Germany. Manystudies emphasized how the use of computers canreinforce or enhance the traditional basic skills (i.e.,reading and math). But most of these studies focusalmost entirely on the measurement of studentperformance outcome through the use oftechnologies. Advocates for educationalcomputing, such as Weir (1989), Cohen (1988),Cuban (1989), LaFrenz & Friedman (1989), Pearlman(1989), all have doubt whether transformations inteaching and learning can occur withoutaccompanying social, attitudinal, cultural, political,and organizational changes in school environment.These equally important issues are the focus of thepresent study. One fundamental question, asidefrom political and organizational reform,educational reformers must ask is how "individualfactors" such as perception, attitude, teachers'theoretical orientations toward teaching andlearning, their customary approaches to instructionand classroom management, and genuine interestof instructional technology can affect adoptionbehavior.
Studies of instructional technology adoptionby teachers is not a new undertaking. Teachers'adoption of computers, their configurations ofcomputer use, and their levels of implementationquality, all would be influenced by teachers'personal attitudes, interest, and their evaluation ofthe technology as well as by administrativesupports and constraints seen mostly from theirperspective. Critical factors, real or perceived,affecting the adoption or non-adoption ofinstructional technologies have been examined by(Kell, et al., 1990; and Tucker, et al., 1990). Cited byCollins (1990), Andee Rubin suggested 4 factors thataffect the likelihood of adoption for anyinstructional technology. Rubin noted that (1) maleteachers tend to be motivated by their interest inthe technology particularly if they have a computerat home, (2) if the teacher feels technology can helpstudents learn a certain subject better, she/he ismore likely to adopt the technology, (3) if theteacher feels administrators expect or would valuethe use of technology, he/she is more likely to do it,and (4) if the teacher has the desire to try somethingnew, then the technology has the appeal. Alsosuggested by Rubin (1990) are 5 other factors that
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affect institutionalization and continued use of anytechnology. These include coordination betweendecision makers, powerful advocates, studententhusiasm, student learning, and teacherenthusiasm. Rubin explained that computercoordinators, curriculum specialists, and teachersshould all be involved in making decisions abouthow technology is used. Institutionalization willoccur if teachers receive strong support frombudget-controlling administrators or powerfuladvocates. Enthusiasm is one important factorwhich affects both students and teachers. Ifstudents are enthusiastic and self-motivated towork on tasks, teachers see tangible effects onlearning, teachers are rewarded and will use thetechnology. Finally, Rubin added that if the teachershows interest in the technology and feels itimproves his/her teaching, teachers will be morelikely to continue use of the technology.
Resistors of instructional technologies haveused various symbolic strategies to resistinnovations. Some perceived technology as athreat to institutionalized power. The morecomprehensive the technology, the greater thepotential threat. Resistors view teaching astraditionally been a personal process, an intimaterelationship between instructor and student. Theinstructor is the dispenser of knowledge and thestudent the passive receiver of the knowledge.Jwaidch and Marker (1973) identified some of the"external barriers" commonly perceived by teachersto adoption of instructional technologies and foundthat many teachers expressed the need, beforeadoption, for training and support beyond the oneor two days seminars or demonstrations, providingencouragement, recognition, time incentive,technical assistance, strong leadership, andhandling disturbances.
While a great many factors can influenceindividual variations in use of instructionaltechnology, this study was particularly concernedwith the "external factors." Individual factors willalso be examined to gain greater understanding thatcould be hypothesized to account for variations inlevels of adoptions. In sum, these factors were themotives for a survey at the University of Hawaii atManoa regarding university professors' sense ofchange in the educational environment over thepast 20 years, their interest, attitudes, andevaluation of instructional technologies, and therelationship of these individual factors and otherperceived external barriers to adoption andresistance of, specifically, multimedia instructionaltechnology (MIT). Of particular interest in thisstudy was the determination of which specificfactors, individual or external, are most associated
t
with early adoption and potential future adoption.This is expressed in the following 2 hypotheses.
Hl: Professors' early adoption of MIT is positivelyand significantly associated with individualfactors.
H2: Professors' potential future adoption of MITare positively and significantly associated withindividual factors, and are not significantlycorrelated to perceived external factors.
3. Method
The survey instrument was constructed andprogrammed to create an electronic questionnaireby using the CATI (Computer Assisted TelephoneInterviewing) software using 4 IBM PS/2 Model 30personal computers. The use of an electronicquestionnaire minimizes data transcription errors,prevents the accidental entry of out-of-rangenumbers and allows for the automatic execution ofskip patterns of the instrument.
3.1 Sampling
The survey respondents were selectedthrough a systematic random sample from theUniversity of Hawaii at Manoa (1992) telephonedirectory. There are approximately 1500 faculty atthe University. 6.8% of the sample points wereinstructors, 4.2% lecturers, 20.1% assistantprofessors, 22.6% associate professor, 45.7% fullprofessors, and the remaining 0.4% were emeritusprofessors. The fielded period for data collectionran from October 19, 1992 to October 30, 1992. Atotal of 389 respondents were called and 240telephone interviews were completed in the study.A response rate of 61.7% percent was achieved.
3.2 Plan for Analysis
After responses to the questions wereevaluated using usual survey analysis procedures,several indices were created to serve as a basis for amore detailed statistical model of the relationshipsbetween "individual factors" and "external factors"toward multimedia instructional technologiesadoption or resistance. First, a descriptive analysisof responses to questions on awareness of change,attitude, evaluation, interest and involvement oftechnologies will be presented. Second, a series ofdiscriminant analyses were performed using eachof the indices as independent variables and earlyadopter/non-adopters as dependent variable.Third, a regression analysis will be presented toexamine factors that best predict likely-future-adoptor and unlikely-future-adoptors.
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3.3 Construction of Variables
In order to assess and compare collegeprofessors' progress in implementing instructionaltechnologies in the classroom, a measure wasneeded that somehow captures differences in thedegree to which teachers made use of thetechnologies.
3.3.1 Dependent Variables: Current Adopters andFuture Adopters
Respondents were asked if they have been afrequent-user of multimedia instructionaltechnology in their teaching. Of the 218 respondedto the question, almost 50% considered themselvesas frequent-users (early adopters) of MIT. Theremaining half were considered as non-adopters orpotential future adopters. Seventy-three percent ofthe potential future adopters reported that they willtry MIT in the future (likely-future-adopters) afterthey have read and heard so much about thebenefits of the technology and 27% said they willnot (unlikely-future-adopters).
3.3.2 Independent Variables: Internal and ExternalFactors
Six independent variables were constructedfrom the data set to reflect the awareness, attitudes,evaluation, interest, use of old instructionaltechnology, and personal involvement in newinformation technologies. Their construction issummarized as follows.
(1) Awareness: Awareness of change in theeducational environment was measured by askingrespondents whether they agree or disagree withthe fol!owing 2 statements: (1) Over the past 20years, instructional methods in higher education inthe U.S. has, in general, changed a great deal, and(2) Considering the changes that have come aboutin the last 20 years, instructional technologies (suchas microcomputer and multimedia) have beenplaying a very important role. A factor analysis ofthe questions suggested that there was indeed asingle underlying dimension structuring responses(eigenvalue=1.27 and accounted for 42.8% of thevariance). Summation of these 2 variables yieldedan index ranging from 2, representing a high levelof awareness, to 8, representing little awareness ofchange in the educational environment.
(2) Attitude: To determine attitude towardsinstructional technologies, respondents were askedwhether they agree or disagree with: (1) "I believethat the computer 'as a teacher' can facilitate
student learning," (2) "Since computer can visiblyincrease office productivity, we should attemptsimilar applications in the instructionalenvironment," and (3' "I like the idea thatcomputer-aided learning promotes discovery,creative thinking and problem-solving."Agreement was taken as a positive attitude towardsinstructional technologies, and disagreement fornegative attitude. Summation yielded an indexranging from 3, representing the most positiveattitude toward instructional technologies, to 12,representing the most negative attitude. A factoranalysis of these 3 items resulted an eigenvalue of2.31 and explained 19.3% of the variance.
(3) Evaluation: The index for evaluation ofinstructional technology (IT) was measured bysumming the positive responses for the statementsabout "IT changes learners' experience from passiveto active" and "increased use of IT has been a greatbenefit to education." The index ranges from a "2,"meaning a positive evaluation, and an "8"meaning a negative evaluation of instructionaltechnologies. A similar factor analysis had aneigenvalue of 1.55 and accounted for 32.2% of thevariance.
(4) Interest: In measuring interest ininstructional technology, respondents were askedwhether (1) respondents like technology andexperimentation and often try something new intheir teaching and (2) respondents are skepticalabout technology in the effectiveness in teaching.Summation of these two questions yielded an indexranging from 2, representing the highest level ofinterest, to 8, representing the lowest level ofinterest in instructional technologies.
(5) Use of Old Technology: In assessingprofessors' use of old instructional technologies,respondents were asked if they have been veryoften, sometimes, rarely, or never using sometraditional teaching tools such as transparencies,slides, and educational films or videotapes. Theindex ranges from a 3, meaning "often use,' and a12 meaning "never use."
(6) Involvement of New InformationTechnology: The measure of the use of newinformation technology was assessed using a seriesof additional questions that asked how oftenrespondents used (1) computers at work or at homeand (2) e-mail for correspondence with colleagues.The involvement of new technology measure wasthen transformed from the original questions to anindex ranging from 2 to 8, with 2 meaning highinvolvement and 8 meaning low involvementwith new information technologies.
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4. Analysis and Results
4.1 Basic Attitudes and Sample Characteristics
Table 1 shows that, in general, early-adoptersand potential future-adopters have a positiveattitude and evaluation, keen interest, and highawareness of change as opposed to non-adoptersand unlikely-future-adopters. Over 73% of thesample felt that instructional methods in highereducation in the U.S. has changed a great deal andhave been playing a very important role over thepast 20 years. However, over 57% of therespondents said that they find it difficult to talkabout instructional technologies because they don'tknow enough about it. About 71% of therespondents reported their academic department isequipped with a computer laboratory. With regardto experience, 44% were full-professors and about56% were tenured or tenured-track non-full
Table 1Individual Difference in Early and Non-Adoption
(in percentage)
Early Non- Likely UnlikelyAdopter Adopter Adopter AdopterN=108 N=101 N=71 N=30
Individual FactorsAwarenessa 73 51 59 35Interesta 78 43 68 24Attitudea 80 65 74 52Evaluationa 59 37 54 27Use of old technologyb 78 48 57 31
Use of new technologyb 57 38 44 31Years of teaching 39 27 35 30
External Factors (perceived barriers)Lack of successful application
in the educational markets 32 70Lack of time and incentives
for me to experiment withnew instructional methodsc 59 64
Lack of leadership supportfrom administrations 53 48
Lack of personalized trainingand support by star 50 56
Lack of assistance and supportby colleagues in the facultyc 42 44
Lack of microcomputers on carnpusc 57 54
NOTE:a. Percentage responding either "strongly agree" or "agree"before indices were created.b. Percentage responding either "very often" or "sometime"before indices were created.c. Percentage responding either "strongly agree" or "agree" to "Ihave not been using multimedia instructional technology in myteaching because:"
professors. One interesting note is that more than65% of the respondents in the survey had morethan 10 years of teaching experience. In addition,82% reported that they use a personal computervery often at work or at home and about 50% saidthey use e-mail very often or sometimes to docorrespondence with colleagues (Table 1 showsdetailed individual and external differences in eachsub-groups of the sample).
4.2 Early Adopters
Table 2 presents the results of a discriminantanalysis treating the whole sample as 2 groups:early-adopters and non-adopters of multimediainstructional technology. Discriminant analysisconstructs a dimension that maximally separatesthe groups. Thus the contribution of any givenvariable to the discriminating dimension can beevaluated holding all others constant. Theawareness, interest, attitude, evaluation ofinstructional technology, technology use, andexperience variables were used as predictors, and astepwise procedure of discriminant analyF:s wasemployed to eliminate those variables withoutsatisfactory discriminating power. The procedurelocates the variables that best discriminates betweenthe groups, finds the next best discriminator giventhe first, and so on.
Table 2Discriminant Analysis of Multimedia Instructional TechnologyEarly Adoption Croups with Individual Factors as Predictors
Function 1(N=207)
Interest .51 (.66)Awareness .25 (.44)Use of Old Technology .43 (.51)Evaluation .33 (.55)Attitude .08 (.41)Use of New Technology .36 (.20)Years in teaching .18 (.27)
Eigenvalue .44Canonical Correlation .55Degree of freedom 7Wilks's lambda .69Significance p=.0000
NOTE: A stepwise procedure was used to identify thesignificant discriminating variables in the order of theircontribution: interest, awareness, use of old technology,evaluation, attitude, use of new technology, and teachingexperience. Variables are ordered above based on their functionloadings. Standardized canonical coefficients and structurecoefficients (in parentheses) are reported.
Multiple discriminant function analysisbased on the remaining variables yielded onesignificant discriminating function (Wilks's lambda= .69, p<.0000). Table 2 reports standardized
canonical coefficient, which may be interpreted likebeta weight in multiple regression. The structurecoefficient reported are analogous to loading infactor analysis and represents the correlation of avariable with the underlying function. Pehadzur(1982) notes that these loadings with values of .30and above be treated as meaningful. As shown inTable 2, the canonical discriminant function wassignificant, X2 (7,1)=73.34, p<.0000.
Based on the discriminating power of eachvariable in the discriminant function, resultsindicated that early-adopters of multimediainstructional technology tend to like andexperiment with technology in general, and areindividuals who are less skeptical abouttechnologies in their effectiveness in teaching.Early-adopters tend to be more aware of the role ofinstructional technology in higher education in thepast 20 years. Early-adopters of MIT also arefrequent users of transparences, slides, film andvideotape regularly as aids in their classroominstructions, they also tend to have a very positiveevaluation and attitude toward instructionaltechnology. The use of new informationtechnology and teaching experience did not yield asignificant contribution in the function. As a test ofclassification accuracy, the discriminant functionyielded a hit-ratio of 75.73% for the analysis samplewith 77.7% for the early-adopter and 76.9% of thenon-adopters groups correctly classified.
4.3 Potential Future Adopters
To respond to the second hypothesis, astepwise multiple regression procedure wasperformed to determine how individual factors andother perceived external factors were related to thelikelihood of multimedia instructional technologyadoption in professors' future methods ofinstruction. Criteria for inclusion were highestinitial correlation and subsequent highestcorrelation with the dependent variable. Table 3presents a summary of the results.
Based on the standardized beta weights,results indicated that likely-adopters tend to agreethat instructional methods in higher education inthe U.S. has changed a great deal and instructionaltechnologies, such as microcomputers, have beenplaying a very important role. Likely-adopters ofMIT in the future tend also to have a keen interestin technology, use transparences, slides, film andvideotape regularly as aids in their classroominstructions, and believe instructional technologieshave great benefits and have changed learnerexperience from passive to active partner in the
educational process. In addition, results alsoshowed that likely-adopters often use computers at
Table 3Multiple Regression Analysis of Multimedia Instructional
Technology Future Adoption Using Individual andExternal Factors as Predictors
Standard Beta
Individual FactorsAwareness
InterestAttitude
Evaluation
Use of old technology
Use of new technologyYears in teaching
External Factors (perceived barriers)Lack of successful application in the
educational marketLack of time and incentives for me to
experiment with new instructional methods .15Lack of leadership support from administration .10Lack of personalized training and support by staff -.03Lack of assistance and support by colleagues
in the faculty .12Lack of microcomputers on campus -.04
.20a
.19a
.15
22a
.26b
.11
-.21a
Total R2 .33
NOTE: Figures are standardized beta coefficients for variablesentered hierarchically ((N = 96).
Variables entered as 6 external factorsa. p<.05b. p<.01
work and at home; and believe that they will usethe technology if there were more applicable orsuccessful application in the educational market.
External factors (administrative, bureaucratic,or organizational), as suggested by Rubin (1990),perceived to be important factors associated withadoption behavior for future-adopters were found,by large, not to be significant predictors for adoptiondecisions. With the exception of "lack of successfulapplication in the educational market" indicated asignificant relationship to future adopters, all otherperceived external factors were found not powerfulpredictors of adoption behavior in the future.
5. Discussion and Recommendations
The goals of this study were (a) to examineprofessor awareness, interest, attitude, andevaluation of instructional technologies, (b) todetermine factors that could explain why professorsare early-adopter or non-adopters of multimediainstructional technology, and (c) to determineindividual or external, real or perceived, factors
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that best discriminate individuals who will likelyand unlikely adopt multimedia instructionaltechnology in the future.
According to Cohen (1987) and Cuban (1986),a review of the history of previous technologicalinnovations in education reveals at least twodistressing observations: we have "inflated hopesfor their effects" and "few of these technicalinnovations "were adopted, or widely used"(Cohen, 1987). LaFrenz and Friedman (1989) addedthat there is little doubt that the vision of thecomputer's power to transform education has notbeen fulfilled. The hard fact is that the impact ofthe computer on the teaching and learning processhas not yet been significant. Public schools anduniversity administrators have long recognized theneed to provide computers for teachers andprofessors to aid their classroom instructions, butbeing "available" or "accessible" is a far cry frombeing successfully implemented and usedeffectively affect students. Why are computersconstantly in use in some classes by some teachersand idle in others? Why do some efforts to usetechnology in instruction succeed while others fail?While it has been established that external factors,suggested by Rubin (1990) and others, wereimportant criteria associated with instructionaltechnology adoption decisions, this study foundthat the relationship between adoption or resistanceof MIT to individual factors such as awareness ofchange in the educational system, interest, attitude,and evaluation of instructional technology are to bemuch stronger than external factors.
In a rapidly changing and growing field, it isimperative that all involved must stay abreast ofinnovations or changes in the field. This meansthat professors, likely-future-adopters and unlikely-future-adopters, must be alerted to relevantseminars, workshops, literature, and resources thatare available to generate high levels of awareness,interest, positive attitude and positive evaluationtoward instructional technology. Finally, practicalapplication of this research to budget-controllingpower-advocates or administrators is to create ashared vision of teaching and learning, opportunityfor communication and debate and even nurturethe resistant colleagues. Only then, appropriatesupports with hardware and software will seefruitful results.
6. References
Center for Social Organization of Schools (1986).Instructional uses of school computers. Reportsfrom 1985 National Survey. Baltimore, MD: JohnHopkins University.
Collins, A. (1990). Toward a design science ofeducation. New York: NY, Center for Technology inEducation.
Cuban, L. (1986). Teachers and machines: Theclassroom use of Technology since 1920. New York:Teacher College Press.
Cuban, L. (1989). Neoprogressive visions andorganizational realities. Harvard EducationalReview, 59(2):217-222.
Etzioni, A. & C. Nunn. (1974). The publicappreciation of science in contemporary America.Daedalus, 103:191-205.
Graudard, A. (1972). Free the Children. New York,NY: Pantheon Books.
Inglehardt, R. (1977). The silent revolution:Changing values and styles among western publics.Princeton, NJ: Princeton University Press.
Kell, D., Harvey, G., & Drexler, N. (1990). Evaluatingtechnology in schools: Implications of a researchstudy. Paper presented at the Annual Meeting ofthe American Educational Research Association.Boston, MA: April 16-20.
Knirk, F. & Christinaz, D. (1990). Instructionaltechnology adoption in the best adult trainingorganization. Annual Meeting of the AmericanEducational Research Association, Boston: MA.
LaFrenz, D. & Friedman, J. (1989). Computer don'tchange education, teachers do! Harvard EducationalReview, 59(2), 222-225.
LaPorte, T. & Met lay, D. (1975). Technologyobserved: Attitudes of a wary public. Science, 188(April):53-59, 121-127.
Marshall, E. (1979). Public attitudes to technologicalprogress. Science, 205:281-285.
McGrath, E. (1983). To stem a 'Tide of Mediocrity,"Time, May 9, p.62.
Pearlman, R. (1989). Technology's role inrestructuring schools. Electronic Learning, 18:20-24.
Pehadzur, E. (1982). Multiple regression inbehavioral research. New York: Holt, Rinhart &Winston.
Pion, M., George, B. & Lipsey, M.W. (1981). Publicattitudes toward science and technology: What
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have the survey told us? Public Opinion Quarterly,pp. 303-316.
Rabier, A.J. & Inglehardt, R. (1977). Euro-Barometer7: Science and Technology in the EuropeanCommunity. Ann Arbor, MI: Inter-UniversityConsortium for Political and Social Research.
(1978). Euro-Barometer 10A:Science and Technology in the EuropeanCommunity. Ann Arbor, MI: Inter-UniversityConsortium for Political and Social Research.
Tucker, S.A., Dempsey, J.V., & Strange, J.H. (1990).Training University Faculty to IntegrateHypermedia into the Teacher Training Curriculum.Paper presented at the International Conference onTechnology and Education, Brussels: Belgium, Mar20-22.
United States Congress, Office of TechnologyAssessment (1988). Power on! New tools forteaching and learning. Report No. OTA-SET. 379.Washington, D.C.: United States Government PrintOffice, 41-65.
Weir, S. (1989). The computer in schools: Machineas humanizer. Harvard Educational Review,59(1):61-73.
Yankelovich, D. (1982). Changing attitudes toscience and the quality of life: Edited excerpts from aseminar. Science, Technology, and Human Values,7:23-29.
1r.
DEVELOPMENT AND TELECOMMUNICATIONS TECHNOLOGY
IN PACIFIC ISLAND MICROSTATES
Michael R. OgdenCenter for Pacific Islands Studies
University of Hawaii at Manoa
1. ABSTRACTSummarized in this paper are some of the preliminary results of a comparative study of the role and impact oftelecommunications technology on development aspirations in the Republic of the Marshall Islands (RMI) and the Cook Islands;two freely associated Pacific Island countries (with the United States and New Zealand respectively). The broader social,economic, and political impact of recent telecommunications developments are briefly examined in light of the two country'sseperate development programs and their desire to increase their respective participation in the global economy. In theconclusion, two 30 year scenario projections are outlined which present different policy options which must be considered ifeither country is to realize their preferred course of develciment. It is argued that if the positive aspects of the scenarios are tobe realized, their respective national telecommunication policies must attempt to achieve multiple objectives, some economicand some social. Thus, a balance must be reached so that the pursuit of one set of policy objectives do not harm theachievement of the others. This will call for creative and "forward visioned" policy formulation by both respective governments.
2. INTRODUCTION
The new telecommunications and information technologieshave come to be seen by many, both inside and outside theindustry, as facilitators of economic development. Theyhave also been increasingly viewed as sources of globalcompetitive advantage, as providers of social and welfarebenefits, as contributing to reducing urban-rural disparities,and as providers of information for the general edification ofthe population. However, even in the more developedcountries of the Pacific Rim, telecommunicationtechnologies have only recently become dominant concernsin the formulation of national development policies; even asthe Uruguay Round of GATT negotiations served toillustrate that information and knowledge are increasinglybeing considered strategic resources andtelecommunications the primary means determining theiravailability (Pipe 1990). It is also increasingly evident thattelecommunication matters are becoming important fornational, economic, and social policy formulation in allcountries. As such, it seems equally important that a policyframework for making telecommunications a truly universalresource will need to emerge in the near future (Hansen, eta! 1989).
Yet, for many developing countries - the Pacific Islands notwithstanding - one of the central problems is how to ensurethat the existing telecommunications infrastructureincorporates new technical developments efficiently tosatisfy urban users, while at the same time maintainingprovisions of the more "traditional" servicestelex, IT andsingle side band radio for examplewhere such services arethe most effective, and sometimes the only service availableto many rural users. No where are such concerns of morepressing importance than in the Smaller Island States ( I) ofthe Pacific Basin.
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With such concerns in mind, a research project was initiatedwith support from the Pacific Telecommunications Councilduring the final quarter of 1991 to explore these issues intwo of the smaller Pacific Islands countries. The initialterms of reference included a comparison of all aspects ofrecent telecommunications developments in the Republic ofthe Marshall Islands (RMI) and the Cook Islands; two freelyassociated states (United States and New Zealandrespectively) which have recently embarked upon ambitiousupgrades to their telecommunications infrastructure, but indecidedly different ways. As well, the broader social,economic, and political impact of such developments wereto be examined in light of the two country's developmentprograms and their desire to increase their respectiveparticipation in the global economy.
The field work consisted of extensive interviews withgovernment officials, business leaders and individuals in bothcountries Government representatives, academicians andIslanders residing in Hawaii and New Zealand were alsocontacted for their input. Relevant documents from theUniversity of Hawaii's Pacific Collection, the NationalArchives in Wellington, New Zealand and at the SouthPacific Collection at the University of Auckland Library,provided necessary background material. As well, historicaldocuments, development plans and other related materialswere examined in the respective countries under studyField visits took place from early-November through mid-December 1991, and again from late-February throughearly-April 1992.
This paper reports, in encapsulated form, some of thefindings of this work and builds on the preliminary reportsubmitted earlier (2). The two alternative scenarios alsotake-off from projections developed earlier and benefitedgreatly from structured feedback in the form of a Delphi
questionnaire sent to aproximately 50 informants (with a45% response rate) and informal feedback to the publishedpreliminary report.
3. REPUBLIC OF THE MARSHALL ISLANDS (3)
The RMI consists of 29 atolls and 5 coral islands in theCentral Pacific. There are some 26 populated islands,distributed along two roughly parallel chains; the easternRatak (Sunrise) group, and the western Ralik (Sunset)group. The total land area is approximately 70 square milesscattered over a sea area of 750,000 square miles. The 1988census put the population at 43,380 with an annual growthrate of 3.8 percent per annum. The projected population forthe year 2000 is estimated to be 68,415. Almost half of thepopulation lives in the capital on Majuro Atoll, whileanother 20 percent reside on Ebeye Island in KwajaleinAtoll. The other 40 percent are scattered among what havecome to be called the "outer islands."
As in the case of similar atoll countries, RMI's developmentis limited by its small and scattered land area, lack of on-shore resources, distances to overseas markets, problems ofcommunications, and risks to natural disasters. Land,minerals, energy resources, fresh water, flora and fauna, areall limited in amount and variety. The major agricultur,.:1resource is 22,000 acres of coconut plantations of whichonly 16,000 acres are currently productive, yet coconutproducts accounts for 90 percent of exports (coconut oil andcopra). It is the territorial waters of the Marshall Islandsthat provide abundant marine resources and what thegovernment considers, along with tourism, to he the greatestpotential for future economic growth.
The modern sector, based almost exclusively in Majuro andKwajalein, is sustained largely by the RMI Government andthe US missile range on Kwajalein through theirexpenditures. Wages, salaries and other compensation paidto employees from these two sources are the majordeterminants of the country's GDP and contributed over 50percent in 1990. The service sector of the economyaccounts for 69 percent of all employment, while agricultureand fishing make up just over 21 percent and manufacturing9 percent (4).
Development efforts in the RMI, since ratification of theCompact of Free Association in 1986, has focusedspecifically on fostering economic growth. Primarily, thegovernment has chosen to concentrate on three areas;fisheries and marine resources, tourism, and light industry.Discussion has focused on developing a local fishing fleet toservice, primarily, the sashimi market for fresh tunaPurchase of a DC-8 to add to the government ownednational airline (Airline of the Marshall Islands) wasjustified on the grounds that its larger cargo hold will beused to fly tuna to the fish auction in Hawaii. It was alsoexpected that the larger seating capacity would contribute toincreasing tourist traffic. Aquaculture projects such as giantclams, trochus, pearls and eatable seaweed, have also beendiscussed as showing economic viability but have not beenvigorously pursued
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Tourism is really in its infancy in the RMI and much is beinginvested to increase hotel accommodations (primarily onMajuro), promote the construction of outer island "guesthouses," and to develop and promote tourist attractions.Sport fishing, diving and the RMI as a "tourism adventure,"are some of the promotional alternatives being discussed. Ithas been argued that the RMI's beaches and clear lagoons,with WWII relics and friendly people, are its mainattractions; particularly in the outer islands, since theurbanized areas of Majuro and Ebeye suffer from extremeenvironmental degradation.
In both of these cases, marine resources and tourism, issuessurrounding the environment and environmentalpreservation are seen as central to "sustainabledevelopment." The RMI government, in the past,entertained various ideas and schemes which had createdsubstantial outcries, both internationally and locally, overtheir potential negative impact on the environment;including, most recently, the shipping of oil-contaminatedsoil to be "treated" and used as fill on the Ebeye toGugeegue causway on Kwajalein (Polhemus 1992,November 22; see also Fujii 1990, September 2).Environmental issues have now come to be of suchincreasing political and popular concern that it has become amatter of public policy that all development efforts must firsthave an environmental impact assessment before starting andthe national development plans must contain a "state of theenvironment" report. Likewise, the RMI EnvironmentalProtection Authority has had its powers increased and itsrole expanded. On the more ominous side, issues of globalwarming and potential sea level rise have cast a shadow overpresent development efforts and raised much concern overfuture national viability.
Light industry developments have focused mostly onpromoting support services for a national fishing fleet, shiprepair and fuel depot, cannery facilities, etc. Some recentefforts have also been put into upgrading the copraprocessing facilities in conjunction with increasing powergeneration capacity on Majuro. Large construction projectslike the new capital building complex and urbaninfrastructure improvements have also been undertaken.
3.1 TELECOMMUNICATIONS
A modern telecommunications infrastructure in the RMIpresently exist only in the urbanized areas of Majuro Atolland the islands of Ebeye and Kwajalein on Kwajalein AtollOther than the periodic mail service by sea and/or air, theremainder of the populated atolls rely exclusively on HF orsingle side band radio to meet their communication needs Itis argued that if tourism is ever going to be developed in theouter islands, this situation must be improved.
By some estimates, computer usage in government andbusiness in the Marshall Islands is well below its potentialwith only about 10 percent penetration; this is despite theincreasing popularity of computer training courses Manybelieve the RM1 could significantly benefit from an increaseddiffusion of both computers and telephones; especially if it is
ever going to develop in a "positive and open way." Part ofthe perceived problem is that information is very "secretive"in the RMI because it has traditionally been seen as a sourceof power or control; those who know certain things thatothers do not can use it to their advantage. Computers,particularly, are seen as an "equalizing agent" in that anyonewith a little training, regardless of traditional title, can gainaccess to important information and know how to use it.Knowing what the resources are and how to use them wiselyis perceived to be an important part of local communityempowerment, particularly for the outer islands, and may beseen as a potential threat by members of the centralgovernmentthe majority of whom are traditional titleholders. The mass media, specifically radio and television,are expected by many to be the future vanguard insupporting education and the spread of information andknowledge. Likewise, satellites, telephones and facsimileshave provided a way for the RMI to communicate with theoutside world more efficiently than even 10 years ago. Thishas helped to foster the outward expansion of Marshalleseas they seek education and employment opportunitiesoverseas (primarily in the United States), while at the sametime maintaining important kinship ties with family back inthe RMI. The general opinion is that the RMI is no longer
just a small isolated country, it is fast becoming a part of theglobal community and can no longer afford to be isolated.
In 1987, a government statutory authority, the NationalTelecommunications Authority (NTA), was created toassume ownership of the outside plant and the responsibilityof providing telecommunications services previouslyprovided directly by the Ministry of Transportation andCommunications, which had inherited the task from theformer U.S. Trust Territory of the Pacific Islandsadministration (TTPI). At the time the NTA was formed,the satellite earth stations on Majuro and Ebeye were ownedand operated by the US based Communications SatelliteCorporation (COMSAT). These earth stations werepurchased by the RMI government in 1989 and turned overto the NTA to manage. In 1990, the NTA was restructuredas a Marshall Islands corporation with all assets transferredto the NTA by the government (Nilijeta, P.L. 1990-105). AU. S . Rural Electrification Administration (REA) loan forUS$18.8 million was later secured to fund a 3 yearexpansion and modernization program. In a move to furtherthe process of privatization, a board of directors was put into place and the sale of shares to RMI citizens initiated inearly-December 1991. Of the total 360,000 shares to beissued, 90,000 shares were issued to the RMI government,equal to approximately 25 percent of the total andrepresenting a controlling share in NTA. The governmentwill also retain control over any unsold shares.
A 1987 survey indicated that NTA had a total of 587telephone subscribers; 206 residential subscriber and 256business subscribers on Majuro, and 39 residential and 86business subscribers on Ebeye. According to more recentdata, after the installation of a new digital switch on Majuro,total subscriber numbers nearly doubled to around 1,000overall. Such growth is expected to continue because of thesubstantial backlog of prospective telephone subscribers
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which cannot currently be accommodated. It is anticipatedthat by the end of the 3 year REA funded modernizationprogram, NTA's subscriber base will expand to just over3,000 and that this will further increase to around 3,600within another 2 years. It is likewise anticipated that, withinthe next 3 years, the international connections will also beupgraded from an analog to a digital format, substantiallyincreasing present capacity. Later, as consumer demandrequires, additional international capacity may also beinstalled.
The NTA currently has the exclusive right to erect, install,maintain, operate, and manage domestic and internationaltelecommunications services in the RMI. While severalindividuals and companies from the RMI and elsewhere havesought permission from the government to install cellulartelephone systems and provide other telecommunicationsservices in the RMI, the NTA's management is reasonablyconfident that the high start-up costs of providing alternativetelecommunications infrastructure and the limited exclusivitygranted them under public law, has thus far been enough todiscourage entry by newcomers. However, NTA is equallyconfident that if the government does grant such requests inthe future, their experience and efficiency in thetelecommunications field will ensure their dominant positionin the RMI.
3.2 DEVELOPMENT CONCERNS
When examining the issues of development, and the role oftelecommunications in facilitating development, severalconcerns on the part of RMI citizens come to the surface.First, much concern was expressed (especially during theweeks leading up to and immediately after the nationalelection!) over the seemingly disproportionate amount ofmoney being spent on "large" development projects. Pastand present policy has tended to cater to large-scaledevelopment projects relying on joint-venture foreign capitaland/or overseas development loans to build office buildirgs,resorts, and industrial projects. This has resulted in acurrent debt load of nearly US$600 million by someestimates, and the apparent diversion of monies from socialservices to fund such government "priority" projects. It hasbeen argued that, over the last 40 years of TTPIadministration, nothing really happened to significantlydevelop the MI. Now, the impression is the presentgovernment is trying to make-up for lost time and has thusfallen "victim" to donor country ideas of what developmentshould bea condition some critics of the presentgovernment have termed "new country syndrome " Many,alternatively, have argued for small-scale fisheries,diversified marine resource developments, and a "go slow,"cottage-based approach to tourism as more appropriate inthe RMI context and as being a more "affordable" type ofdevelopment; economically, ecologically, socially, andculturally.
Second, human resource development has been perceived astaking a back-seat to economic development despitegovernment rhetoric to the contrary. Presently, theeducation department reports some staggering figures. In
broad terms; 25 percent of first grade students are droppingout before finishing junior high school. For those whograduate junior high, 30 percent do not even get into highschools because there is not enough room for them. Ofthose who do get into public high schools, 50 percent drop-out before graduation (a total of 30 percent when combinedwith private high schools). Only 10 percent of all highschool graduates go on to college, and of theseapproximately 50 percent drop-out within their first twoyears. With the RMPs present population (over 50 percentunder 15 years of age) and the rapid population growth rate,this situation is seen as untenable and a potential "social timebomb." The Ministry of Education now has a ten yearmaster plan (in its fourth year of implementation) designedto improve education and human resource development,including the possible use of satellite based instruction forthe outer islands. However, they admit that without thebudget to realize the goals outline in the master plan, "...it isjust so much paper."
Compounding this problem is the lack of visibleimprovements to the standard of living in the outer islandscausing many to migrate into the district centers (Majuroand Ebeye) seeking employment possibilities. But the lowlevels of skilled labor in the RMI (despite the relatively largepool of unskilled and semi-skilled labor) has resulted inmany jobs in the construction and service industries going tooverseas nationals (mainly Korean and Filipino contractworkers). There is a perceived need, addressed by theEducation master plan, for increased focus on vocationaltraining to reverse this trend. However, for those who dofind employment, many face frustration because of a lack ofupward mobility and a degradation of their standard of livingdue to an increasing dependency ratio (the result of anexplosive population growth rate, and relatives moving infrom the outer islands). Those with marketable skills arefrequently deciding to leave for the United States where theyhave free migration access and can get higher paying jobs.These people end up staying for prolonged periods of time,usually returning only for brief visits, because of the betterducational opportunities presented for their children in the
uS in comparison with the RMI.
Finally, telecommunications receives mixed reviev.s. Manyare fearful that the US$18.8 million REA loan is just anotherone of the RMI government's "big bang" developmentprojects, that it will increase the national debt burden butwill not result in any real improvements in the standard ofliving. On the other hand, there is an equal number who arealso of the opinion that telecommunications infrastructureexpansion is important in fostering economic developmentand national unity; particularly if the sub-district centers ofJaluit and Wotje are ever to be develop to their fullpotential. The outer islands increasingly want telephonecommunications without restrictions; initially, this will nodoubt require some kind of subsidy. If tourism is also to befostered, than data links will also need to be established fortravel and accommodation reservations.
Likewise, government administration, tourism and localbusiness developments are seen as requiring timely
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information. For the RMI, and particularly if the outerislands are to benefit, satellite deliverable domestic andinternational telecommunications are seen as a cost effectiveand necessary infrastructural development going hand-in-hand with reliable domestic and international transportation.
4. COOK ISLANDS (5)
The Cook Islands comprise 15 islands divided into aNorthern Group of predominantly atolls, and a SouthernGroup of mostly high volcanic and/or raised coral islandsThe total land area is approximately 94 square miles in a seaarea of 714,000 square miles. The main island is Rarotonga,on which the capital Avarua is located, and accounts fornearly 60 percent of the population with the remainder ofthe Southern Group accounting for another 29 percent whilethe Northern Group comprises the remaining 12 percent ofthe total Cook Islands population. The 1991 census puts thepopulation of the Cook Islands at 18,552 reflecting nearly a6 percent increase since the last census in 1986 (much of thisdue to return migration). This counters a long standingtrend of negative net population growth as large numbers ofCook Islanders migrated to either New Zealand or Australiaseeking better employment and education opportunities.There are presently estimated to be over 20,000 CookIslanders living in New Zealand and/or Australia.
As was discussed earlier with regard to the RMI, the CookIslands also experience constraints on their developmentprimarily due to the scattered nature of the archipelago,remoteness from markets, dis-economies of scale intransportation and increasing competition for market sharewith other developing agricultural countries in the Pacificregion. In the past, the main export cash crops have beenbananas, pineapples, papayas, citrus, and other fruits alongwith vegetables and root crops. The pineapple industry hasbasically collapsed, banana exports ceased due mainly toinconsistency in quality and the irregular nature of shipping,and while citrus continues to be produced for the localmarket, exports of fresh fruit and juice have not been able tosuccessfully compete with South American produce. Thus,the agricultural production of the Cook Islands in 1989 wasreported to have fallen by approximately 20 percent from1981 levels and further decline is expected. The Ministry ofAgriculture is attempting to lead away from bulky,perishable crops which had been the mainstay of exportagriculture in the past, to those with longer storage life andease of transport without quarantine restrictions, such asarabica coffee and vanilla. This is currently being met with amodest amount of success.
However, it is the backward and forward linkages associatedwith the tourism industry that has caused the Cook Islandsgovernment to identify it as the lead sector for economicdevelopment. Between 1972 and the end of 1991, visitornumbers to the Cook Islands have more than trebled fromapproximately 10,000 to over 30,000 arrivals per year. Thetourism industry is estimated to be worth approximatelyUS$18.4 million annually, making it the major foreignexchange earner for the Cook Islands economy.
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The significance of this industry is most obviouslyrepresented by the shift in the structure of local employmentpatterns. The tourism and related services sector nowaccounts for over 65 percent of total employment comparedwith 55 percent in 1971. The primary and secondary levelseach account for 16 percent of total Cook Islandsemployment with an additional 6 percent remainingunspecified. It is expected that the importance of thetourism industry to future economic growth is likely tocontinue; provided the special attractions which drawtourists to the Cook Islands in the first place are notdestroyed in the process (CITA 1991). It is ventured thatthe appeal of the Cook Islands is derived mostly from ablend of the friendly and hospitable people and theresplendent scenery.
Environmental issues have recently come to dominate muchdevelopment discussion in the Cook Islands focusing mainlyon the degradation of the costal zones. Protected areasdevelopment in the Cook islands has also been characterizedby "too many words and not enough action." Education andpublicity efforts from local organizations such as PublicHealth and the Cook Islands Conservation Service (CICS)have, in the past, been marred by the lack of funds andexpertise to provide a continous flow of information andcommunication. Government policies on the environmentare presently provided for under the ruling Cook Islandsgovernment manifesto and are covered principally under thepolicies of the CICS and to a lesser extent by the Ministriesof Marine Resources, Culture, Beautification, and Works(respectively). Likewise, many of the outer island councilshave their own environmental and conservation by-laws(Rongo 1991).
Although the marine resources of the Cook Islands havereceived increased attention in the past few years, there hasbeen only limited harvest of pelagic fish resources within its200 mile exclusive economic zone (EEZ) and an even morelimited exploitation of artisanal fisheriesprimarily forpersonal consumption or to supply the local market. It is,however, the lucrative and expanding pearl industry in theNorthern Group which has received the most attention.Currently, and since 1985, the focus has been on the farmingof pearl oysters for both cultured pearl and shell onManihiki, with Penryhn and Suwarrow currently underinvestigation for possible expansion sites. Other commerciallagoon fisheries include trochus and the re-introduction ofgiant clams. Eatable seaweed was introduced several yearsago, but was wiped out by hurricane Sally several years agoand never restarted. The Cook Islands also control withinits 200 mile EEZ, an estimated 25 percent of the worldscobalt reserves (in the form of crust deposits on seamountsand the ocean floor). Whereas the cost of accessing thispotential mineral resource is presently prohibitive, it isexpected that in the future the Cook Islands will be able tosuccessfully exploit these deposits to their economic benefit.
Economic development in the Cook Islands has been quitevolatile, but on a general upward trend. There has beennoticeable increases in per capita income, but typically onlyfor the residents on Rarotonga, with little improvement
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being realized in the outer islands (Manihiki with its pearlindustry, and Aitutaki with tourism, being the notableexceptions). GDP growth between 1983 and 1990 averaged6 percent with sharp upward and downward surges withdrops of between 7 and 11 percent; further illustrating theenormous volatility of the GDP growth rate to globalconditions and the "boom" or "bust" nature of economicdevelopment. As well, this also serves to illustrate thesignificant role government infrastructure and developmentinvestments have played in Cook Islands economic activity.
Finally, the Cook Islands offshore financial center is creditedwith infusing new life into the finance and business servicessector which has grown from approximately 2.5 percent ofGDP in 1982, to 12 percent in 1990. When taken togetherwith other service related sectors, including tourism andgovernment activities, value-added services account foralmost 77 percent of GDP in 1990, while agriculture andfishing contributed less than 18 percent. This indicates ashift from a predominantly agriculture production orientedeconomy, to a tourism lead service economy over the courseof the past decade.
4.1 TELECOMMUNICATIONS
As the Cook Islands shifts more and more into a tourismlead service economy, good quality, reliable internationaland domestic telecommunications have become veryimportant. The feeling is that the Cook Islands need to be"plugged in" to the global telecommunications system forhotel reservations, air transportation, international businesscommunications, etc. It is further perceived that suchdevelopments would also go a long way towards fosteringcontinued growth in offshore banking. The Cook Islands iscurrently the only off-shore facility in the Pacific withregistered listed companies approved by the Hong Kongstock exchange and only the third jurisdiction, followingBermuda and the Cayman Islands, to obtain such approval(Miller 1991). Obviously, good quality and reliableinternational teleconnectivity on demand is required tofacilitate such connections. Likewise, the growing pearlindustry and tourism's expansion into the outer islands alsorequires extending the same type and calibre ofcommunication services that are available in Rarotonga intothese locations. Proponents argue that if the Cook Islandswant to be part of the global network, and if it wants thetourist industry to grow and succeedespecially in theouter islandsthan it must have efficient and reliabletelecommunications.
This argument, along with expressed political will (6), hasbeen used by the present government to justify not only theintroduction and expansion of broadcast television serviceson Rarotonga and to the outer :stands, but also a US$8million loan from the Asian Development Bank (ADB) andExport Credit Finance organization of Australia for thecountry's telecommunications development. Likewise,following the setting up of a joint-venturetelecommunications corporation, Telecom Cook Islands,Ltd. (TCI) in 1989 (7), the government then forced earlycontract termination and compulsory acquisition of Cable
and Wireless operations in the Cook Islands by legislativeact in 1991 (8). It was argued that the Cable and Wirelessmonopoly prevented the government from putting in toplace its plans for the joint development of the outer islandsand international telecommunications. Therefore, theprovision of telecommunications services were determinedto constitute a "public purpose," and the monopolyagreement was terminated with a decision on adequatecompensation to Cable and Wireless going to arbitration.
By Christmas 1989, Rarotonga had broadcast televisioncoverage as a "Christmas gift" from the government. InDecember 1990, Aitutaki became the first of the outerislands to be provided broadcast television coverage (withservice again being offered by Christmas). Just prior to theinitiation of television service in Aitutaki, the old manualtelephone exchange with 200 lines was upgraded to anautomatic exchange with 300 line capacity (upgradable to600) and is now provided with international direct dial forthe first time. Mitiaro, another island in the SouthernGroup, also received an earth station and a small automaticexchange with international direct dial expected to be addedsoon. In total, approximately 8 outer islands will beconnected via satellite to the domestic (and international)telecommunication system via the Pacific Area CooperativeTelecommunications (PACT) Network, while one will beconnected via UHF (line of sight microwave) and the otherswill continue to be served by HF and single side band radio.The PAC T Network is a regionally focused and operatedDAMA (demand assigned multiple access) satellite servicedesigned and maintained by the OverseasTelecommunications Corporation, Inc. of Australia (OTCI),and put into service in 1989 (cf, Masterton 1989). All of theinhabited islands in both the Northern and Southern Groupsare expected to be connected into the nationaltelecommunications system by as early as March 1993.
Presently, The Cook Islands have a total of 25 incoming and35 outgoing trunk lines available for international service viathe (now) TCI Standard B earth station in Rarotonga.International direct dial accounts for 66 percent of theselines. Rarotonga, Aitutaki and most recently Mitiaro, arepresently the only islands with telephone service, butexpansion is proceeding to connect another 6 islands.Rarotonga presently has over 2000 subscribers withresidential subscribers comprising approximately 72 percent,business subscribers 26 percent, and the remaining 2 percentbeing public pay phones. There are an estimated 40-50facsimile machines, mostly in Rarotonga, currently operatedby Cook Islands businesses. Until the ADB loan wasacquired, telecommunications growth in the Cook Islandswaf nrimarily a function of the ability of TCI to supply theservice, since the waiting list for telephone hook-up wasseveral years backlogged and the network was near capacity.In other words, capacity could not keep pace with demand.With the initiation of the current modernization andexpansion program, network capacity is expected to keeppace with subscriber demand with sufficient surplus andnetwork expandability to meet future needs as they arise.
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4.2 DEVELOPMENT CONCERNS
Issues of the future direction of Cook Islands developmentand the possible role of telecommunications technology infacilitating development reflect some of the same concernson the part of Cook Islanders as were expressed by theMarshallese. Like the RMI, the Cook Islands have incurreda substantial debt load to finance several large developmentprojects; such as the Sheraton Hotel, the SEDEP electricityproject, and the construction of the Cultural Centre for the1992 South Pacific Festival of Arts. Prior to 1988, theCook Islands had borrowed little and since self-governmentin 1965 (in free association with New Zealand), had neverhad a national debt to speak of Development loans takenout since 1988 to finance "big" projects amount to anestimated current national debt of around USS150 million.It has been argued that the current "boom" in the CookIslands economy is really a result of deficit spending on thepart of the present government and is argued by some to bebuilding a weak foundation for further economic growthwhich may result in collapse when it comes time to repay theloans. The government argues that, over the next 10 years,such public sector investments will result in an expansion ofthe private sector that would more than match the overseasdebts with concomitant increases in government revenues.Opponents argue that it appears as if the Cook Islands have"jumped on the 'think big' band wagon" and are pursuing acourse of development more in line with lending countriesthan Cook Islander aspirations.
There is also growing concern that too much emphasis ontourism and the pearl industry will result in unbalancedgrowth, highly vulnerable to the vagaries of global eventsand weather conditions, and that the fruits of this economicdevelopment will not be evenly distributed. Many argue that"equality" of economic development is a more appropriatecourse for the Cook Islands to follow. Emphasis onagricultural development, focusing on small scale,"intensive," family farming of a diverse range of food andcash crops, was often mentioned as a direction thegovernment should pursue in leu of large scale agriculturalprojects supplying the export industry, or speciality cropsfor tourists Such a policy would also reduce the number ofpart-time farmersthough never eliminating the familygardenforcing many to choose between full-time farmingor full-time non-agricultural employment; further readjustingemployment patterns. In the outer islands, agricultureshould continue to be encouraged as a part of the life-stylewhile some efforts are made to encourage small businessdevelopment.
With the substantial impact that tourism has had in the CookIslands, it is interesting to note that many outside theindustry do not like the direction it is going. It is arguedthat the Cook Islands have enough "big" resort-type hotelsWhat is now needed is to encourage cottage-based "eco-tourism" (nebulously defined) in the outer islands. This isseen as a move away from "numbers" tourism and towards"quality" tourism. Likewise, it is suggested that small scaletourism developments encourage the largest amount of local
I (-I.s..
participation in the industry and "keep the dollars at home"rather than expatriating the profits.
The pearl industry is seen as only benefiting the very few.Whereas many believe it should be continued and evenexpanded, others feel that the Cook Islands should seek todiversify its marine resource base.
Finally, telecommunications, having become a governmentpriority, have come to be viewed as a positive contributionto present and future development. The perception oftelecommunications' positive contribution in support oftourism and off-shore banking were often stressed.Likewise, the outer islands are anxious to have moderncommunication capabilities without restrictions. However,the bottom line is, who is going to pay for these services?Broadcast television was introduced into the Cook Islandson the heels of a very controversial increase in the localincome tax; primarily for "cultural development." But it wasindicated that a portion of the funds raised would also gotoward the establishment of the Cook Islands BroadcastingCorporation for the provision of television service, and willlikely continue until the service becomes self-financingNow many wonder if the same will eventually apply to thepresent telecommunications expansion. Whereas this seemsunlikely, there is, nonetheless, substantial public concern.
5. SUMMARY AND PRELIMINARY SCENARIOS
Given the above discussion, the following two scenariostake the present and preferred course of development androle of telecommunications technology for each country andprojects them approximately 30 years into the future. Thesescenarios are a composite "sketch" for both countries and, assuch, are broad brush strokes. Nevertheless, they representthe common aspirations, fears and desires expressed in theprevious sections.
Several factors have been taken out for the sake of brevityand clarity. First, the possible impact of global warming andsea level rise have not been factored into the scenarios. Ifthe "worst case" scientific predictions are correct, within thenext 30 years the RMI and Cook Islands will begin to feelthe effects of these environmental conditions (Kabua 1991)and this could, of course, significantly alter (if not discountall together!) the following scenarios. The likelihood thatsuch environmental catastrophy would out weigh any otherdevelopment concerns, should they eventuate, has alsocontributed to the decision not to present a "negative"scenario. This is also due in part to some of the perceived"dysfunctional" attributes of the status quo. Finally, there isalso the possibility of "wild card" occurrences that cannoteasily be accounted for in building the following scenarios(e.g , global conflict, collapse of associated metropolitaneconomies, large meteor striking the earth, etc.). Whatcould possibly be said with reasonable certainty is that theactual outcome would conceivably contain aspects of bothscenarios, and yet be completely different from either.
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5.1 DIE STATUS QUO
In both countries, there is a general recognition of theirrelative developmental limitations in terms of land area,population, and low real GDP growth rates resulting fromtheir remoteness from major markets, dependence on fewexport commodities, high cost of transport, limitedeconomies of scale, a high dependency ratio, and the highcost of government administration. However, the respectivegovernment's development philosophies espouse arhetoricand to some degree a beliefthat "self-reliance isself-respect." Government development efforts aspire tofocus on marine resource development, infrastructureimprovements, and expansion of tourism in order to solveeconomic and social problems as well as build national prideand unity. Unfortunately, the general impression is that thepursuit of some "big" development projects on the part ofgovernment (usually financed through an increasing numberof international loans and unlikely to be economically viable)is "over-morgaging" their respective country's future andtaking scarce funding away from other needy sectors (mostlyin productivity and social services). Likewise, there is aperception that some of the projects being pursued are likelyto produce a cycle of more dependency instead of lessThere is also continuing doubt that emphasizing themonetary side of economic development will result ingenuine and equitable improvements to the standard ofliving in both urban and rural areas and has created anatmosphere of "expectation" which may be difficult toactualize. Social stratification has intensified markedly overthe past decade and is expected to intensify further.Generally, there is a feeling of guarded (hopeful?) optimism,but many feel insecure and pessimistic about extendingpresent practices too far into the future.
Telecommunications has frequently been viewed by therespective governments as an adjunct to the transportationsector in its contribution to respective national development.Recently, the telecommunications sector in both countrieshave undergone a "corpratization" and consolidation processin an attempt to modernize the organizational structure andto operate domestic and international communicationservices more efficiently and with a view towardsgovernment gaining more direct revenue from it. Fullprivatization has often been mentioned as the ultimate goal.It has always been realized that an efficiently run,corporately responsible (to make a profit for its private shareholders and/or the gov,rnment) telecommunicationsorganization which can provide good quality, reliable, localand international telecommunications will have positive"spin-off effects" throughout the economy As such, theprimary concern of the respective governments has thusshifted towards how best to achieve a bigger share oftelecommunications revenue, and secondly, to accomplish anexpansion of basic telephone services for the bulk of theirrespective populations. Since placing a relatively highpriority on improving the adequacy and efficiency of 'hebasic national network, "favorable" development loans fromoutside the country have recently been secured; a strategybeing pursued by other Pacific Island countries. However,
the respective governments have also placed equal emphasison telecommunication's social responsibility; such that,improvements to the urban infrastructure and extension ofservices to rural areas are seen as being of equal importanceand contributing to their respective national unity. Thus,participation in a regional satellite network for meetingdomestic and regional communication needs has beenviewed by both countries as the most cost effective way foreach to service their widely scattered populations.
5.2 PREFERRED DEVELOPMENT
An alternative vision of development takes off from thesame recognition of each countries respective limitations,but outlines a preferred course of development in eachcountry which pays much closer attention to the social andphysical environment ( in the latter case this includes thegreenhouse effect, environmental degradation, lagoonpollution, etc.) and focuses on issues of ''sustainability."This course of development is seen as being less concernedwith "short-run" development projects and/or stabilizationproblems, and instead, places more attention on the "long-run" fundamentals of development; such as resourceendowments, income and trade entitlements, productivity,technological progress, social structures and institutions, andcultural preservation (Bertram 1991, September). Key tothis course of development is the "wise" use of a diverserange of marine resources, the promotion of indigenousagricultural production, continuing to develop (but notoverly emphasize) "flag of convenience" industries (e.g.,foreign ship registry and off-shore banking), and a generally"go slow, stay small" attitude towards tourism. Equalityacross urban and rural sectors is also stressed forinfrastructure developments (transport, telecommunications,electricity, waste treatment, and potable water) and incomedistribution in order to lessen the disparity between urbandistrict centers and rural outer islands as one measure toprevent rural-urban drift. Furthermore, recognizing that themajor resource in each country is the development potentialof their respective populations, more funding is put intoeducation in order to prepare the young to copevocationally, intellectually, and culturally as the countryincreases its participation in the global economy. However,given present development practices, there is expected to beonly a 25 percent likelihood of such a benevolent futureeventuating.
In this somewhat more positive scenario,telecommunications increasingly becomes one of the leadingsectors helping to foster developmentand this becomesextremely important for smaller Pacific Island countries (likethe Cook Islands or the RMI) which would depend oninformation-based industries (off-shore banking, foreign shipregistry, tourism, etc.) in the employment of thierpopulation. Telecommunications also comes to be seen as anational asset and as such, would be protected as a "naturalmonopoly" from foreign take-over or preditory competitionThrough cross-subsidizing profits from internationalcommunications, the domesticand particularlyruraltelecommunications infrastructure is greatly
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expanded. The increased penetration of primarily telephoneand facsimile services into the more remote outer islandareas of each country is seen as mandatory if the preferreddevelopment goals are to be met. General developmentprojects in rural areas are greatly speeded-up and operatedmore efficiently because of the improved communicationslinks. As a result, there is a general improvement in theliving conditions in rural areas which further attractsadditional project development aid. Improvements ininternational telecommunication connectivity also begin toattract more local and foreign business investments in suchsectors as data processing, off -shore banking and in marinefisheries as well as undersea mineral resource identificationand acquisition; thus, providing jobs for an increasinglymore skilled and technically sophisticated local work forceSatellite based distance education at the secondary andtertiary level, tele-medicine providing remote diagnosis ofmedical ailments, improvements inter-island transportation,and a general upgrading of disaster warning andpreparedness likewise provide for a higher and moreequitable standard of living. However, the cost of buildingand maintaining such a telecommunications infrastructure inthe face of an increasing national debt load out of allproportion to the size of the economy in either country, hasmany concerned that such a preferred future could beaborted before it is established.
5.3 POLICY CONSIDERATIONS
It may perhaps seem obvious that the main concerns andpriorities of telecommunication policy makers in PacificIsland microstates differ significantly from those in highlyindustrialized and post-industrialized countries. Progress inestablishing and expanding a telecommunicationsinfrastructure in these two countries has been extremelydifficult due to the specific conditions of their smallness andtheir isolation. But telecommunication network expansionin the RMI and the Cook Islands differs also in respect totheir need to accommodate the new technological demandsof their urban subscribers while attempting to provide basicservices to remote communities. For both of thesecountries, the problem is attempting to create a set ofinstitutional relations that will achieve these two objectives.
If the positive aspects of either of the above scenarios are tobe realized, national telecommunication policies mustattempt to achieve multiple objectives, some economic andsome social. A balance must be reached so that the pursuitof one set of policy objectives do not harm the achievementof the others. Obviously, in either scenario, the highestpriority for telecommunications investment must be inbuilding up the national infrastructure. This calls forcreativity in financing and pricing such services so as not toincrease the national and/or corporate debt burden. Thisshould be possible, given that investments intelecommunications infrastructure have yielded, in the past,internal rates of return of 15 percent or more, and if thesocial externalities are factored into the equation, the returnsare even greater (Jussawalla & Ogden 1989) Expandinguser access to international teleconnectivity should become
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the next priority as each country seeks their "competitiveadvantage" in the global market.
Issues of "direct competition," which are of increasingimportance in metropolitan countries, become moot in suchmicrostates as the RMI and the Cook Islands (indeed, evenin other Pacific Island countries). Given their lack ofeconomies of scale, such issues really take attention awayfrom the main task at hand; i.e., national network expansionand increased international teleconnectivity. However,policy decisions should be taken to outline the priority areasfor future desired development and the respective role thattelecommunications is expected to play. Then, if deemedappropriateand in cooperation with the nationaltelecommunication network operatorcircumstances inwhich other suppliers could be encouraged to enter themarket as a means of extending the capability and capacityof the total telecommunication system could be explored.
6. Notes
(1) The Smaller Island States, as defined by the SouthPacific Forum, include the Cook Islands, Kiribati, Nauru,Niue, and Tuvalu. Also included in this definition, butnot formal members of the Summit of Smaller IslandStates, whose inaugural meeting was held in January1992, are the Republic of the Marshall Islands and theNew Zealand dependency of Tokelau.
(2) The preliminary report was submitted to PTC in August1992 and published in abridged form as; Ogden, M.(1992, September). Communications technology anddevelopment in Pacific Island microstates. PacificTelecommunications Review, 14, (1), 9-16.
(3) Unless otherwise indicated, all data related to theMarshall Islands comes from the RMI Office of Planningand Statistics, Majuro.
(4) As a point of clarification, manufacturing consists mostlyof handicrafts and copra processing, and accounts forless than one percent of GDP.
(5) Unless otherwise indicated, all data related to the CookIslands comes from the Cook Islands Statistics Office,Rarotonga.
(6) The present ruling party, the Cook Islands Party, statedin their manifesto that improvements to communicationsbetween islands through the upgrading of thetelecommunication system utilizing modern satellitefacilities (as well as adding automatic telephoneexchanges, telex, and facsimile services to outer islandcommunication facilities) would be a matter of priority.Likewise, the current Prime Minister has promisedseveral outer island communities television service as a"Christmas present" at various times during hisadministration.
(7) The Cook Islands government owns all physical assetswhich it leases to ICI. The government also owns a 60
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percent interest in the company with the remaining 40percent owned by Telecom Networks International, aTelecom New Zealand owned corporation.
(8) The British company, Cable and Wireless plc, hadnegotiated an exclusive external telecommunicationsagreement with the government of the Cook Islands in1979 to provide international communication services asthe monopoly carrier until 31 March 1995.
7. References
Bertram, G. (1991, September). Sustainability, aid andmaterial welfare in small South Pacific island economies1900-1990. Victoria Economic Commentaries, 8, (2), 17-32.
Booth, H. (1989). Marshall Islands: A statistical profile ofmen and women. (Report prepared for theUNDP/LJNIFEM Pacific Mainstreaming Project),Majuro: Office of Planning and Statistics.
Cook Islands Statistics Office (1992). Cook islands censusof population and dwellings 1991. Rarotonga, CookIslands: Statistics Office.
Cook Islands Statistics Office (1991, March) Cook Islandsstatistical bulletin: Economic indicators. Rarotonga, CookIslands: Statistics Office.
Cook Islands Statistics Office (1990, September) CookIslands quarterly statistical bulletin. Rarotonga, CookIslands: Statistics Office.
Cook Islands Statistics Office (1991, March) Cook Islandsquarterly statistical bulletin. Rarotonga, Cook Islands:Statistics Office.
Cook Islands Tourism Authority (CITA) (1991, August).Tourism master plan: Cook Islands final report.Rarotonga, Cook Islands: Government of the CookIslands.
Fujii, C. (1990, September 2). Islands at risk. The SeattleTimes/Seattle Post- Intelligencer, pp.8-13, 17-19, 26.
Hansen, P., et al (1989). The changing telecommunication- environment: Policy considerations for the members of
the ITU. Report of the Advisory Group onTelecommunication Policy, Geneva: InternationalTelecommunications Union.
Jussawalla, M. & Ogden, M. (1989). Pacific Islands. Policyoptions for telecommunications investment.Telecommunications Policy, 13, (1), 40-50.
Kabua, A. (1991, October 4). Global warming could becatastrophe for us - Excerpts from President Kabua'sspeech to the general assembly. Marshall Islands Journal,p.10
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Masterton, It. (1989). Pacific ocean VISTA system usingDAMA technology. In Harms, L.S. & D. Wedemeyer(Eds), PTC'89 Proceedings, Pp. , Honolulu, HI: PacificTelecommunications Council.
Miller, a. (1991, May/June). The Cook Islands. The CCHJournal of Asian Pacific Taxation, 3, (3), 43.
Nitijela of the Marshall Islands (1990). The Marshall IslandsNational Telecommunications Authority Act of 1990,(P.L. 1990-105). Majuro: Attorney General's Office.
NTA (1991, November). Prospectus. (for sale of publicshares), Majuro: Marshall Islands NationalTelecommunications Authority.
Office of Planning and Statistics (1990). Republic of theMarshall Islands statistical abstract 1989/1990. Majuro:Office of Planning and Statistics.
Office of Planning and Statistics (1990, July). Nationalpopulation policy. Majuro: Office of Planning andStatistics.
Parliament of the Cook Islands (1991, June). Cable andWireless (external telecommunications agreement)Termination and Compulsory Acquisition Act,(Ammendment No. 13). Rarotonga: Crown Law Office.
Pipe, G. R. (1990). Telecommunications. In Messerlin, P. &K. Sauvant (Eds.), The Uruguay Round: Services in theworld economy, Pp. 105-113. Washington, D.C.: TheWorld Bank & United Nations Center on TransnationalCorporations.
Polhemus, D. (1992, November 22). Oily soil: Slick solutionor a dirty deal? Honolulu Sunday Star-Bulletin &Advertiser. pp. Al-A2.
Rongo, T. (1991). Cook Islands State of the environmentreport. (Report prepared for the South Pacific RegionalEnvironmental Programme and the Asian DevelopmentBank Regional Environmental Technical AssistanceProject), Rarotonga: Cook Islands Conservation Service.
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Assessing Videotex Diffusion and Usage Patternsin a Manufacturing Organization: A Case Study
Michel G. ElasmarDepartment of Telecommunication
Michigan State UniversityEast Lansing, Michigan, U.S.A.
1. ABSTRACT
Analysts have suggested that the adoption and use of newcomputer-based information technologies in the workplace canfacilitate and enhance the efficiency of various tasks. Thispaper addresses the human factor in the diffusion and use ofcomputer-based communication systems. After a discussion of theimportance of evaluation research in an organizational setting, acase study is presented.
2. BACKGROUND
During the last decade, the use ofcomputers in organizations has becomestandard practice. Increasingly,computers are being interconnected andcommunication-oriented applications suchas E-mail and videotex systems are beingadopted by companies'-.
A recent report by International DataCorp. maintains that, among Fortur.c 500corporations, E-mail penetration jumpedfrom 67% in 1990 to 98% in 19913.Business analysts relate the successstories of such large companies as XeroxCorp. who implemented computer-basedinformation systems. In the case ofXerox, the implemented system was saidto have improved the company's capacityto communicate and modified itsmanagerial transaction procedures4.Similar accounts are given concerningEastman Kodaks, Deere & Co., HughesAircraft Co., and Chase Manhattan Bank6.
The stories of success with computer-based information systems suggest thatsuch systems can indeed contribute to anincrease in efficiency in anorganizational setting. Thesetechnologies can be utilized to simplifyotherwise multi-step transactions suchas sending messages, filling outapplications, placing orders, checkinginventory etc.
Analysts have cited the many benefitsthat computer-based information systemscan have in an organizational setting.Among these benefits are:
i. helping to increase sales andreduce costs;
ii. offering new marketopportunities;'
iii. tracking product flow;
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iv. producing general andcomprehensive reports onproduction;
v. combining engineering andstatistical process controldata with product flow datafor product history and thestudy of process trends;
vi. informing people of factoryand product issues8;
In this sense, it is argued, suchinformation technologies can contributeto the competitive advantage of acompany.
Researchers, however, agree that themain prerequisite for such potentialcontribution to materialize is E.:thievingwhat is termed "critical mass "9. Simplyput, critical mass, as applied tocomputer-based information technology,is the point at which collective usejustifies the costs of implementationand leads to an exponential growth insystem utilization.
The importance of "collective use" inachieving "critical mass" highlights theinfluence of the individual users whoform the collective entity. The humanfactor, therefore, influences the degreeto which a computer-based informationsystem can achieve its potential in anorganizational setting.
3. THE HUMAN FACTOR
Despite the importance of the humanfactor in computer-based informationsystem usage and diffusion, this humanelement has traditionally receivedinadequate attention by informationsystem managers. In fact, a glance atthe leading handbooks and manuals oninformation system management revealsthat these references pay virtually noattention to the human factor followinga system's implementation°. Asimplified process for information
system management recommended by thesereferences consists of three mainstages:
a) Needs assessment;b) Design;c) Implementation.
The human factor is taken intoconsideration at the needs assessmentand design stages of the process. Thisis where the particular needs of theorganization are assessed in order tobuild an appropriate information systemto cater to those specific needs. Forexample, a manufacturing organizationfinds that its field sales staff spendstoo much time on the phone inquiringabout product information. Theinformation system manager would beginto assess the firms' needs. Thisassessment stage may reveal the need fora centralized system that field salesstaff can remotely access in order tocheck inventory, pricing or otherproduct features. If the system isapproved, then the system's design wouldtake into consideration the type ofinformation required by field staffpersonnel in order to make such dataavailable to them on-line. Once thetechnical aspe,:ts of the system havebeen developed, the help of a fewemployees is enlisted to test the easeof the system's use. Implementation ofthe new system usually ensues.
After inclrring the heavy costs ofimplementing a computer-basedinformation system, companies seldombother to assess the users' reactionsand feedback regarding the new system.Companies assume that since thedesigners have determined that thesystem is easy to use, the actual userswill find little or no difficultylearning and using the system. In theabsence of post-implementation userassessments, and since the users areoften not motivated to volunteer theiropinions, the company risks having itshefty investment in equipment be under-utilized. In such a case, computer-based information technologies would notbe conducive to more efficiency as theextent of their utilization determinestheir contribution to the competitiveadvantage of the organization.
The lack of attention given to the humanfactor following a system'simplementation is perhaps due to thefact that early use of computer-basecainformation systems in organizations wasconfined to those te7.hnically orscientifically trained and orienteu.During the last decad, however, theusers' profile has dramatically changed.When a computer-based information syste,,,is nowadays implemented, employees fromall departments, levels of education,backgrounds, and specializations are
given access to it.
Another reason for the lack of attentionto the human factor could also be thatinformation system managers are almostalways technological experts and are nottrained to study human-machineinteractions. With the changes in userprofile, however, it is essential thatan expert in the study of human-machineinteractions be available to assess anyemployee problems in using the newlyimplemented computer-based informationsystem.
After all, it is the degree to whichthese employees utilize the system thatdetermines whether a critical mass willever be achieved, whether the investmentin equipment will ever be justified, andwhether the system will ever be able tocontribute to a company's competitiveadvantage.
4. FACTORS INFLUENCING HUMAN USAGE OFCOMPUTER-BASED INFORMATION TECHNOLOGIES
The literature on information systemmanagement does not adequately addressthe issue of the human factor. Otherareas of human behavior study, however,have devoted considerable attention tothis very topic. The following willlook at some key factors that contributeto the lack of collective usage of acomputer-based information system.Since "collective", in this context,means numerous individuals, the unit ofanalysis in the paragraphs that followis the individual.
Using a computer-based informationsystems necessitates interacting with acomputer. A number of studies, haveattempted to asses, the variables thatinfluence individuals' use ofcomputersTM. Researchers argue that atypical model that explains and predictscomputer use is12:
Figure 1
In Figure I, the characteristics of thesystem design (interface, accessibility,availability, etc...) would influence an
individual's beliefs and evaluations ofthe consequences of system use. This,in turn, would influence the attitude ofthat individual toward the system. Theindividual's attitudes then influencethat person's decision making andintention of use which, in turn,influence the person's actual usage ofthe technology.
There are many reasons an employee wouldbe reluctant to utilize a computer -basedinformation system:
External factors include:
a) Information on system is useless orirrelevant to employee's job;
b) Inadequate or complex interface orapplications;
c) Inappropriate and/or insufficientformative training;
d) Lack of sufficient technical support;
e) Lack of periodic training refreshers;
f) Lack of incentives.
Beside external factors, the possibilityalso exists that internal factors wouldinfluence an individual's system usage.These internal factors include:
a) Technostress;
b) Computer anxiety.
The reasons cited above are typical.There may be others. It would virtuallybe impossible for an information systemmanager to diagnose the variables thatmay be affecting the employee's lack ofusage of the company's computer-basedinformation system. The need for post-implementation evaluation is thereforecritical. Unfortinately, manyinformation systerh :aanagers are nottrained to diagnose such problems.Hence the need for an informationspecialist that would make use of thecurrent research and methods to developa custom-made evaluation program for theparticular organization.
The specialist would utilize bothcurrent research knowledge and data fromthe evaluation to recommend to theinformation system manager to:
a) modify the system characteristics ofrelevance to users;
b) develop training programs that takeinto consideration the level ofknowledge and skills of all employees;
c) develop incentives that wouldfacilitate an employee's evaluation vis-
a-vis the consequences of using thesystem; later these same incentivescould be used to encourage the intentionto use;
d) create special hands-on trainingseminars in order to help users developpositive attitudes toward the system;
e) Reinforce usage in order to encouragerepeat behavior.
After taking each of the above steps, aseparate evaluation would be necessary.Evaluation, in fact, would need to beperiodic. Progress monitoring isessential and stage repetitionsimperative as new employees are hired.
By looking at the list of internal andexternal factors presented above, itwould seem, at first, that the externalfactors that affect an employee'sutilization of a computer-basedinformation system would be easier toalter than internal factors such astechnostress or computer anxiety.
Researchers, however, have found thatprolonged and repeated usage ofcomputers does reduce individuals'computer anxiety (r=-.20, p<.05) anddoes improve individuals' attitudestoward computer-based systems (r=.42,p<.01)". Researchers have also foundthat the quantity of E-mailcommunication is correlated withattitudes toward E-mail (r=.25,p<.05)14. The more a person uses E-mail, the better that person's attitudestoward E-mail will be.
These findings suggest the existence ofan association between an individual'slength of experience using a computersystem and a reduction in thatindividual's computer anxiety. Thelonger the individual's experience, thelower the anxiety. Length ofexperience, however, could, in turn, beinfluenced by some or all of theexternal factors identified earlier.
In sum, both external and internalfactor may be interrelated in a complexmanner. Only evaluation research wouldbe able to diagnose the factors specificto a particular organizational settingand indicate the priority of attentionnecessary for each.
5. ADDING ANOTHER STAGE IN THE PROCESSOF INFORMATION SYSTEMS MANAGEMENT
From the discussion in the aboveparagraphs it becomes clear that a stageneeds to be added to the process ofinformation system management givenearlier. The new process wouldtherefore consist of:
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a)b)
c)
d)
Needs AssessmentDesignImplementationEvaluation
While evaluation was added to the aboveprocess, the method of evaluations arecomplex.. It is beyond the scope of thispaper to address the differentevaluation strategies and procedures.Post-implementation evaluationnecessitates the hiring of a specialistin human-computer interaction.
It is preferable that the specialist bean outsider (i.e. not a permanentemployee but a contracted specialist) inorder to objectively evaluate thesituation and not get tangled in the webof organizational politics.While hiring an outside specialist mayseem like an additional financial burdenfor an organization, the benefits reapedfrom that specialist's assessment woulddefinitely be worth the investment.After all, sound and reliable evaluationof the users of a computer-basedinformation system can significantlyhelp a company achieve the critical massdiscussed earlier. Since users dodetermine the extent to which acomputer-based information systemcontributes to a company's competitiveadvantage, exceptional attention needsto be given to the human factor.
6. A CASE STUDY
The case study focuses on a largemultinational manufacturing organizationwhich utilizes the services of a U.S.nationwide network that provides privatecompany videotex services over its hostcomputers. The company engages in themanufacturing of machinery and parts.It provides access to the network to allof its field personnel, marketing staffand dealers from various states. Userscan access a large database of prices,product availability and description, inaddition to being able to processtransactions, send and receiveelectronic mail messages, browse throughcompany news, job openings, trainingavailability and post productadvertisements.
As part of an evaluation of thecompany's implemented computer-basedinformation system, an exploratorysurvey was conducted. The survey wasdesigned to examine user profile, usagepatterns and user reactions to theopportunities that the system offers.Users were given the chance to respondto both quantitative and qualitativequestions ".
7. SURVEY RESULTS
i. Users' Profile:
The survey respondents were mostly males(76%) with an undergraduate collegedegree (57%) or some college education(25%). 'Aeir average age was 39, theyoungest being 24 and the oldest 62.These respondents had spent an averageof 11 years working for theorganization. The majority were non-managers (53%), with the next largestgroups being middle managers (21%) andupper managers (13%). The terminal theyuse to access the company's informationsystem was mostly either on their desk(46%) or near their desk (46%). Atypical user shared a terminal with anaverage of 3 other individuals.
Most users were told about theavailability of the system by a coworker(54%), a company representative (28%),or a supervisor (16%). Users weretrained to use the system by a coworker(49%) or by reading written instructions(22%). Only 9% of the respondentsindicated attending a formal trainingclass; 19% did not receive any trainingwhatsoever.
ii. System Access and Usage:
The average user accessed the system(both E-mail and other services) anaverage of 12 times a week. Thisindicates low overall usage given thefact that the system was designed tomake key information available for theusers' day-to-day operations.
E-mail use averaged 8 outgoing and 20incoming messages per week.Individuals, therefore, received moremessages than they did send.
Beyond E-mail use, however, the systemappears to be dramatically under-utilized. Note that the system wasprimarily intended to facilitate accessto product information, placing ordersand other general company announcementsand services. Given the uses that thesystem was designed to make available,the exploratory survey has foand that:
a. A significant number of respondentsdid not access the system to getinformation on the price of a product orpart (69%), to locate (68%), check thedelivery schedule for (36%),availability of (58%), or features of(71%) a product or part. In addition,59% did not order a product or part viathe system.
h. Beside product-based information, asizeable number of individuals did notutilize the system to get company policyinformation (81%), company news (G2%),
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or find out about job openings elsewherein the company (95%).
From the above observations, one canconclude that aside from utilizing thesystem for E-mail, the system isextremely under-utilized.
As indicated earlier in this paper, thereasons that a computer-basedinformation system vary and may be verycomplex in nature. It was hoped thatadditional responses would reveal someof the factors at work.
iii. Problem Diagnosis
Since this survey was exploratory, nomeasures of computer anxiety ortechnostress were included. Internalfactors, therefore, could not beexplored. The respondents' open-endedfeedback, however, revealed a number ofpotential external factors:
a. Formative training: Many respondentswere not aware of the numerous servicesavailable via the company system.Others did not feel they had enoughinformation to access the system. Whenlooking at all open-ended user feedback,demands for training or trainingrefreshers stand out. Typical commentsincluded "Show us more in depthtraining, not just you punch this andthis and you get that"; or "We were onlyshown how to use only one segment of thesystem". The inadequacy of training isalso apparent in the fact that asignificant number of users reportedbeing trained to use the system by acoworker.
b. Interface: A recurring complaint wasabout the menus involved in accessingthe system and the difficulty and lack,f flexibility of certain systempplications. The menus were describedis "complicated" and certainapplications as "not user friendly".Some respondents also complained aboutthe profusion of screen codes that theycould not understand the meaning of.
c. System-related characteristics: Onepotentially problematic area pointed outby some users is the delay in updatingthe information on the system. Theseusers complained that the informationthat they retrieve is often out of date.If these users are correct, then this isa very serious problem that the companywould need to find a solution for. Ifthe users are not correct, but theyperceive the information to be out-of-date, then their perception wouldprejudice their usage of the system. Inthe latter caso, the company would needto engage in a communication campaignreassuring the users of the accuracy ofthe data that they retrieve.
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d. Incentives: Another potential problemthat was also pointed out concerns thetimeliness of feedback when users sendinquiries to the company via the system.After sending such an inquiry, one usercomplained about "waiting days and daysand days... and days for the much neededinformation". If this is indeed arecurring problem, then the companyshould revise its procedures forhandling requests transmitted via thesystem. If the user finds that making atelephone call results in a more timelyresponse, then the company would beinadvertently providing incentives touse the telephone and not its computer-based information system for makinginquiries.
iv. Assessment
The exploratory survey conductedindicated that the system that thecompany has spent significant sums ofmoney implementing and maintaining isseverely under-utilized. As part of amore complex post-implementationevaluation, the exploratory surveygenerated a number of leads aboutpotential factors that contribute to thesystem's under-utilization. Follow-upsurveys and further investigation ofboth users and company procedures wouldyield more precise data for makingrecommendations.
8. CONCLUSION:
At the start of this paper, it wasargued that the human factor influencesthe degree to which a computer-basedinformation system can achieve itspotential in an organizational setting.
It was also argued that, in the absenceof post-implementation user assessments,and since the users are often notmotivated to volunteer their opinions,the company risks having its heftyinvestment in equipment be under-utilized.
The case study presented in the lastportion of this paper illustrates anexample of under-utilization. Theexploratory survey conducted as part ofthe post-implementation evaluation hasyielded several potential factors thatinfluence the under-utilization of thecompany's computer-based informationsystem.
Pursuing the post-implementationevaluation will further identify andisolate problem areas. The evaluationwould subsequently enable the analyst togenerate a set of recommendations to theinformation system manager or others incharge. Periodic post-implementationevaluation can assist a business
organization in its quest for achievinga critical mass for its computer-basedinformation system. A critical masswould, in turn, help maximize thecomputer-based information system'scontribution to the company'scompetitive advantage.
ENDNOTES
1. See, for example, Reark, 1989;Ekerson, 1990; de Jager, 1991.
2. See O'Brien, 1992.
3. See O'Brien, 1992.
4. See Allaire, 1989.
5. See Keefe, 1988.
6. See Cavanagh, 1990.
7. Items i and ii are from Carroll, 1992,p. 40.
8. Items iii through vi are taken fromDean & Trahan, 1990, pp. 48-49.
9. See Oliver, et al., 1985; Markus,1990.
10. See, for example, Zmud, 1988.
11. See, for example, Crable et al.,1991; Hudiburg, 1989; Kernan & Howard,1990; Cohen & Waugh, 1989; Hudiburg,1990.
12. Bagozzi, Davis & Warshaw, 1992, p.660.
13. Hudiburg, 1990, p. 313. See alsoCohen & Waugh, 1989.
14. Trevino & Webster, 1992, p. 560.
15. I would like to credit Dr. CharlesSteinfield for initiating the survey uponwhich this section of the paper is based.I would also like to thank my colleagueKazumi Hasegawa for her conscientioushelp in preparing the data for analysis.
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Allaire, P.A. (1989). Electronicinformation in the executive office.Executive Excellence, 6(6), 5-6.
Bagozzi, R.P., Davis, F.D., & Warshaw,(1992). Development and test of a
theory of technological learning andusage. Human Relations, 45(7), 659-686.
Carroll, J. (1992). Convincingmanagement of the business case for E-mail. Computing Canada, 18(18), 40.
Cavanagh, N.F. (1990). E-mail bonding.CIO, 3(6), 72-76.
Crable, E.A. Drodzinski, J.D. & Scherer,R.F. (1991). Psychology of computer use:XXII. Preliminary developments of ameasure of concerns about computers.Psychological Reports, 69(1), 235-236.
Cohen, B.A. & Waugh, G.W. (1989).Assessing computer anxiety.Psychological Reports, 65(3), 735-738.
Dean, K.A. & Trahan, R.J. (1990).Tracking product flow with E-mail.Automation, 37(8), 48-49.
de Jager, P. (1991). It's time to jumpon the E-mail bandwagon. ComputingCanada, 17(14), 18.
Ekerson, W. (1990). Hughes jets throughred tape via E-mail. Network World,7(42), 27-28.
Hudiberg, R.A. (1989). Psychology ofcomputer use: XVII. The computertechnology hassles scale: revision,reliability and some correlates.Psychological Reports, 65(3), 1387-1394.
Hudiberg, R.A. (1990). Relatingcomputer-associated stress tocomputerphobia. Psychological Reports,67(1), 311-314.
Keefe, P. (1988). Kodak develops E-mailfor 47,000. Computerworld, 22(48), 1,120.
Kernan, M.C. & Howard, G.S. (1990).Computer anxiety and computer attitudes:an investigation of constructs andpredictive validity issues. Educationaland Psychological Measurement, 50(3),681-690.
Markus, M.L. (1990). Toward a criticalmass theory of interactive media. In J.Fulk & C. Steinfield, (Eds.).Organizations and CommunicationTechnology. Newbury Park, CA: SagePublications, Inc.
O'Brien, T. (1992). E-mail to befoundation of new information highways.Network World, 9(21), 23-24.
Oliver, P., Marwell, G. & Teixeira, R.(1985). A theory of the critical mass.I. Interdependence, group heterogeneityand the production of collective action.American Journal of Sociology, 91(3),522-526.
Reark, R. (1989). Electronic mail speedsbusiness communications. Small BusinessReports. 14(2), 73-75.
Trevino, L.K. & Webster, J. (1992). Flowin computer-mediated communication.Communication Research, 19(5), 539-573.
Zmud, R.W. (1988). Information Systemsin Organizations. Glenview, IL: Scott,Foresman and Company.
1004
AN EMPIRICAL INVESTIGATION OF TELEX DATAAS A USEFUL PREDICTOR OF SOCIOECONOMIC DEVELOPMENT
AMONG LESS DEVELOPED COUNTRIES
Meredith Shuttleworth GlennDepartment of CommunicationTelecommunication Program
Barry UniversityMiami Shores, Florida 33161
1. ABSTRACT
This paper considered the relationship between telecom-munications and socioeconomic development in LessDeveloped Countries (LDCs), defined as countries where theper capita gross national product or gross domesticproduct is low relative to industrial market economies.Examined were the effect of telecommunications on thesocial and economic activities of LDCs and theunderstanding of the contribution the telecommunicationsinfrastructure provides to socioeconomic growth.
2. INTRODUCTION
The issue examined in this study was theeconomic effect of telecommunications asa factor in sustained growth rates ofhighly developed regions, and whethertelecommunications is essential to thedevelopment of LDCs, particularly inbeing part of global markets.
2.1 BACKGROUNb
The provision and proper utilization of abasic infrastructure for the benefit ofthe community has become a key task forplanners. Pioneering work was done in thepast by individual researchers (Hudson,Goidshmidt, Hardy et al) demonstratingthe disparity between the many millionsof people who have not participated inglobal socioeconomic development, versusthose who have. Other organizations suchas the United Nations International Tele-communication Union (ITU), The Develop-ment Centre of the Organization forEconomic
Cooperation ad DevelopTent (OECD) andthe World Ban): nave sponsored or cond-ucted research on a global perspective.In addition the Center for InternationalBusiness Cycle Research, ColumbiaUniversity, New York, has developed andmaintained economic indicators forcountries in the developing Pacific rimarea such as Australia, Korea and Taiwan.The aim of the individual authors andorganizations has been to contribute tothe general knowledge about and to ident-ify the resources and structural changesnecessary, to provide basic comtunica-tions infrastructure for the urderdev-
1005
eloped regions, in order for them toachieve basic health services, social,and business activities.
2.2 IMPACT OF TECHNOLOGY SERVICES
The new telecommunication services whichare now being introduced inindustrialized nations are informationcentered, involving global networks(World Bank, Wellenius, 1987). The incr-easing world-wide demand for competit-ively priced manufactured products,commodities and services requires globalnetworks organized and coordinated on aworldwide basis. In order for rural areasand developing nation states to parti-cipate in this competitive environment,they need reliable and timely informationto gain access to these markets. Carefulplanning and implementation of telecom-munications systems may be essential tchigh quality business communications,both within the country and as part 3f aninternational network (World Bank,Wellenius, 1987).
2.3 PROBLEMS IN PLANNING DUE TO CHANGINGTECHNOLOGY
In developing countries the real cost ofproviding and maintaining telecommunica-tions services has declined in the lastseveral decades and is expected to cont-inue to decline in the foreseeable future(Saunders, Warford, anl Wellenius, :963).
r.
Modern digital technologies, as developedprincipally for developed countries,however, are not always optimal for ruralareas or developing countries. Theseareas are, by necessi y switching to newdigital capabilities pecause such systemshave a number of advantages includingimprovement of financial control andquality of service (Schware, 1987).Digital systems also permit improvednetwork maintenance and have a higherdegree of reliability.
In most countries the benefits associatedwith technological change are controlledthrough polices of the government andmanagers of individual entities, in thatthey must plan the adaptation of the mostappropriate technology to provide tele-communications services. This is parti-cularly important in developing countrieswhere the relatively small size of theinitial system coupled with the potentialfor high growth rates often justifyadoption of the newest commerciallyavailable technology. Yet if one looksat the distribution of loans made by theWorld Bank, (the principal source offinance for telecommunications in deve-loping countries), the loans and creditsamounted to less than 3.0 percent of itstotal bank lending since 1960 (Saunders,Warford, and Wellenius, 1983).
2.4 AGGREGATE STUDIES
In examining the relationship betweenGross National Product (GNP) and telecom-munications, the simplest study is comp-aring telephone density with GNP (Pelton,Toward a Law of Global CommunicationsNetworks p. 40). The positive slopeindicating the higher GDP or GNP percapita for an individual country thegreater the density of telephones per,:nit population.
Cross-sectional and time series studiesby CCITT have also been developed bothhistorically for individual countries andfor a set of countries in various stagesof economic development (Saunders,Warford and Wellenius, 1983). A study byYatrakis (Telecom Journal, 1972) analyzedthe relationship between internationaltelephone, telex, arid telegram and twentyeconomic indicators including tourism andtrade. Telex traffic was found to beclosely correlated. Similarly, telexdensity has also been studied byWellenius, Budinich and Moral (Saunderset. al, 1983) and compared in terms ofGDP per capita, value of exports, valueof imports, bank deposits, telephonelines, telephones, and energyconsumption.
These studies also supported thetelephone studies and partic-larly show astrong correlation with the value ofimports since telex has been, in the lastthree decades, an important element forinternational trade. This study supportsthe idea that measurements relating toGross Domestic Prod...let per capita providean insight into the relationship betweentelecommunications and socioeconomicgrowth of LDC's and provide a beginningpoint for analysis (Saunders, Warford,and Wellenius. 1983).
2.5 LIMITATIONS OF AGGREGATE STUDIES
Although the use of statisticalregression and correlation analysis isuseful because of the simplicity ofapproach and the relative ease inobtaining aggregate data, use of a singleequation to describe a complex situationwith very dissimilar data and manyrelated variables may be overly simpl-istic (Saunders, Warford, and Wellenius,1983). Snow (1987) suggests theassumption that telecommunicationsinfrastructure accelerated economicdevelopment implies that key individualsand entities such as researchers,practitioners, policy makers and fundingprograms were active in the process.Another argument against the singleequation approach is that for underdev-eloped countries the telecommunicationssystems have (1) a large number ofapplicants for new service which cannotbe filled, (2) heavy congestion duringbusiness hours and, (3) in some caselimited service throughout the country.Developed countries on the other handhave very low waiting times (days ratherthan months or years) and highly advancedtelephone networks and exchange systemsusing modern quantitative methods such asqueuing theory.
Additional work by Hardy (Hudson, 1986)examined whether increase in telephonedensity contributed to distribution ofincome. His conclusion was that develop-ment of the telecommunications infra-structure as represented by density oftelephones contributes to the equitabledistribution of wealth in nations. Hisbasic premise was that telecommunicationsdoes contribute or encourages developmentof a middle class by moving wealth awayfrom the highest income bracket.
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2.6 STRUCTURAL ECONOMIC ANALYSIS
Although correlation analysis applies tovirtually all countries, such analysisprovides only an insight into thebenefits of telecommunications to ruraland underdeveloped countries. Saunders,Warford, and Wellenius (1983) suggestthis approach is similar to examining thetelecommunications structure as an inputto a production process. Telecommunica-tions can been analyzed at the level ofnation-states and by statistical corre-lation or regression. This analysis dev-eloped a model showing the relationshipbetween economic growth and telecommun-ication capability. Similarly, oilrefining or electrical power generationcan be tracked through various stages ofproduction until it is consumed in itsfinal form. This type of analysis, how-ever, does not fully describe thecontribution made by the product (and theexamination of the economic s-ructure).
2.7 INTERNATIONAL ECONOMIC INDICATORS
Large-scale econometric models have beendeveloped and are being used to modeleconomies and selected industries ofindustrialized countries within theeconomy and in some cases specific firmswithin an industry (Pfaffenberger andPatterson, 1987). Using these techniques,an index of economic indicators has beendeveloped by economists to explain andforecast the level and fluctuations ineconomic activity and to identify theimpact of cyclical activity on differentsectors of the economy. Growth cyclechronologies and their turning points areimportant for two reasons. First, thepeaks of growth cycles or "turningpoints" generally precede business cyclepeaks while the low points or recessiontrends tend to coincide with businesstroughs (CIBCR, 1988) Using this analy-tical technique, analysts are able toprovide advance warning for cyclicalchanges which may lead to recessions.Second, the analysis may also identifyless severe setbacks in the economicgrowth which do not develop into declinesin level but are rather sustained, low-level rates of growth. This technique hasbeen used in the United States for overfifty years through the U.E. GovernmentNational Bureau of Economic Research(Moore, 1960).
The growth cycle analytical approachincludes two elements. The first elementis the establishment of the cyclicalindicator identifying a reference cycleor a set of references such as periods ofrecessions and peaks or "turning points"of expansion periods. These periods arerepresented historically by specificdates and appear as peaks and troughs. Inthis manner the cyclical indicatortechnique permits an identification ofkey economic factors in a time series,including those which lead and thosewhich coincide with aggregate economicactivity.
1007
Second, these key economic indicators aresegregated into lead and coincident timeseries and combined into aggregateindices (leading and coincident).Typical key indicators are employment,industrial production, stock price index,exports, housin7 starts, and new businessstarts.
3. BUSINESS CYCLE APPROACH TO ECONOMICANALYSIS
An important task of economists is topredict the level of economic growth andcyclic changes tha' may take place withinthe general economy and sectors ofbusiness. Economic analysts divide theeconomy into phases (Samuelson, 1985)marking the highest and lowest point inthe aggregate economic activity of acountry. These peaks and valleys indicatea turning point in the economy and showthe period of time of "recession andexpansion". The change in businessactivities associated with these periodsinclude important activities which affectthe entire economy. For example, in timesof recession inventories are in generalreduced, demand for labor falls,commodity prices fall, and businessprofits are reduced (Samuelson, 1985).
The U.S. Government National Bureau ofEconomic Research (NBER) has been one ofthe organizations which has studiedbusiness cycles and developed thecyclical indicator approach (Pfaffer.gerand Patterson, 1987). Economic cycleshave been analyzed using a number of keyparameters as indicators to representthe performance of a country's economy.These indicators comprise two categories,i.e., (1) a set of coincident index ofindicators representing current economicactivity, and (2) an index of leadingindicators showing the predicted movementin the aggregate economy. The indicatortechnique of analysis can be divided intotwo phases with the first phase ident-
ifyina specific dates where the aggregatelevel of the economy has reached itshighest or lowest point (peak or valley)and secondly to identify the relation-ships with the key parameter's peak orvalley of the reference cycle. In thistechnique the cyclic parameter identifiesa certain economic time series as thosewhich lead and those which coincide withthe overall economic activity(Pfaffenberger and Patterson, 1987).Jsefulness of the leading series is insignaling a passible downturn inaggregate economic activity so thatappropriate action can be taken before achange in activity occurs in thefollowing:
1). Employment.2). Inventories and Inventory
investment.3). Consumption, trade, orders,
prices, cost, and profits anddeliveries.
4). Fixed capital investment. Moneyand credit.
A separate project was initiated byGeoffrey Moore in 1973 [see Moore (1980)3to provide an international indicatorusing the techniques developed by theNBER. This project has been continued bythe Center for International BusinessCycle Research at Columbia University. Anumber of industrialized countries havebeen included in the project. In 1977Australia was added to the program listand a set of leading and coincidentindicators were developed by Boehm andMoore (1984).
3.1 AUSTRALIAN STUDY
Defris, Layton and Zehnwirth (1986) usedthese indexes to determine if telecommun-Lcations traffic was responsive tofluctuations in the economic activity andwhether the technique, applied totelecommunications, would assisttelecommunications organizations inpredicting telecommunications trafficactivity (number of calls, outgoing telexmessages, etc.) and aid in financialplanning to augment suitable increases(or decreases) in telecommunicationcapacity. The principal purpose of theirstudy was to examine and investigate therelationship between telecommunicationstraffic and the leafing indicator indexusing cross-spectral techniques. Threecator index using cross-spectral tech-niques. Three telecommunications trafficseries were used including the volume ofsocial telephone traffic, the volume ofbusiness telephone traffic, and thevolume of telex traffic outbound fromAustralia. The results of their studyshowed a strong association with thecomposite leading indicator index. This
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was measured by the spectral coherencebetween the three telecommunicationstraffic series and the composite leadingindex.
Defris, Layton and Zehnwirth (1986)concluded their study supports the hypo-thesis that telecommunications trafficdoes respond to fluctuation in aggregateactivity and can be included as an expla-natory variable for developing aforecasting model of telecommunicationstraffic.
3.2 INTERNATIONAL ECONOMIC INDICATOR FORSOUTH KOREA
An international economic indicator forSouth Korea was compiled by the ColumbiaUniversity Center for InternationalBusiness Cycle Research (CIBCR). in 1987.The CIBCR included fourteen reportingcountries, three of which were Pacificrim countries (Japan, Taiwan, andAustralia). In 1988 Korea was added tothe data base. The index developed byGeoffery H. Moore (1980) followed thesame methodology for selecting andevaluating indicators as used by the U.S.economy and published by the U.S.Department of Commerce.
This index provides a monthly observationof the economic time series for Koreaincluding the following:
Table 3-1: Korean leading and coincidentindicators
Leading Indicators Remarks
1. Monthly Hours Worked2. Manufacturing Rate3. Value of Machinery Orders
4. Stock Price Index5. Letter of Credit Arrivals
Number1980=100Billion Won (in1980 value)January 1980 =10010 Million U.S. $(in 1980 value)
6. Ratio of Inventories to (1980=100)Inverted Shipments, Manufacturing
3.3 STATISTICAL PROCEDURE
The statistical procedure, cross-spectralanalysis, is derived from physics appli-cations where light is passed through aprism and divided into the components ofits "spectrum". In examining businessactivities as represented by a timeseries of economic indicators and tele-communications activity as representedby telex message traffic, the variationin each series is examined by "passing"the time series through a series of"prisms" or "filters" in order to asso-ciate the most important component ofvariation with a particular period (orfrequency), where each component isstatistically independent (Pfaffenbergerand Patterson, 1987).
In the spectral analysis, the totalvariability of the series is broken downinto variability components due to thesinusoidal contribution at each freq-uency, Sine and cosine functions areused to model periodic movements of thedata.
The cross-spectral analysis examines thetwo series to see if there is asignificant association between theseries at frequency bands whichsimultaneously account for a largeproportion of the variation in each ofthe observed series.
3.4 SPECTRAL DENSITY FUNCTION
The spectral density function is a methodof considering the frequency propertiesof a time series. An example of theimportance of the frequency may be wherethe time series varies over several dif-ferent frequencies, For example, salesfigures may have weekly, monthly, yearlyor other cyclical variations.Chatfield (1984) notes that the adjective"power" is sometimes made part of the"spectral distribution function" and itoriginated from the electrical engin-eering process of measuring the relat-ionship of electrical current in acircuit. For example, for a sinusoidalinput, the power is directly proportionalto the amplitude squared of theoscillation, For more general inputs,however, the power spectral distributionfunction describes how the power isdistributed w:.th respect to frequency.In the case of a time series, thevariance is the total power. The term"spectral density function' is oftenshortened to spectrum. The actualmeaning of spectrum is the function thatrepresents the contribution to the
BEST cuissy rrnr- pi- 1009Pi tri i
variance of components with frequency. Apeak in the spectrum indicates animportant contribution to variance atfrequencies in the appropriate region.
3.5 CROSS-SPECTRAL MATHEMATICAL MODEL
The leading index indicator and telexdata series can be analyzed where leadingindex series may be thought of as inputand telex series as output. To determinethe degree of
association between the leading indicatorand telex data series at different cyclelengths or time periods, a cross-spectralanalysis is carried out.
The economic indicator series may show acyclic or oscillating change with respectto time due to the economic fluctuationsin the world and individual country'scomposite economic conditions(Pfaffenberger and Patterson, 1987). Asnoted above the overall cyclic patternmay be presented by a series of sinusoid-al functions, each representing a partic-ular frequency that can be translatedinto months or years. By examining thefrequencies and their strengths oramplitude (e.g.. using spectralanalysis), the true contribution to thetotal variation can be determined foreach frequency (or period).
4. SUMMARY
The purpose of the analysis is to assessthe contribution or correlation betweenthe leading indicator and telex dataseries at each frequency component whichmake up the total cyclic series. Inanalyzing the cross-spectral results ofthe two series (coherence between inputseries-the leading indicator and outputseries-telex traffic), the most importantelement is the frequency band whichaccounts for major variation in theoutput series. The area under theestimated cross-spectrum range offrequencies indicates the degree cfrelationship between the leadingindicator to telex series (internationaltelecommunications activity) at the bandof frequencies.
f
5. DATA
The telex data was expressed in totaltelex messages-minutes as recorded inJune 1971 compared with telex message-minutes in each month. The leading indexindicator data is 'expressed as acomposite in the form of a deviation oftrend (for example, the change in growthin June 1980 can be compared with June1981 with any average growth trend withinthe period removed).
The economic data for South Korea hasbeen provided by the editor, Ms. JeanMaltz, of the monthly publicationInternational Economic Indicators,developed and maintained by the ColumbiaUniversity Center for InternationalBusiness Cycle Research. The data is inthe form of deviation from trend on amonthly basis for the period January 1970to January 1987.
Through the kindness of Mr. Jae mo Kah,Director of International Business,Department of the Korean Telecommun-ication Authority, the monthly compositeof outgoing telex data has been providedto the author for the period 1971 through1985 in the form of message-minutes.
Statistical techniques for analyzing timeseries such as the index, are mainlyconcerned with decomposing a series intoa sum of components: a long term growthtrend, a seasonal component and other"irregular" variations. The differentsources of variation will be summarized.
6. CONCLUSIONS
The principal purpose of this researchwas to to examine telex data,representing internationaltelecommunications traffic, as a usefulpredictor of socioeconomic development inSouth Korea. The approach, using timedomain methodology or cross-spectraltechniques compared the composite leadingindicator index developed by CIBCR withtelex data from the period 1971 to 1985.From this analysis the followingconclusions may be derived.
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First, that there is an associationbetween international telextelecommunications traffic and acomposite cyclical economic indicatorindex, developed by the CIBCR, using theKorean telex data. Examination of thecoherence spectrum indicates strong andrelatively consistent coherence (abouttwo and one half years or 30 monthscycle-length) or greatest for the longcycle lengths similar to the Defris et al(Defris, Layton, and Zehnwirth, 1986)study for Australia. The indicator ismost useful in anticipating longer termmovements. The results are shown in Table6-1.
Table 6-1: Coherence between telex andleading index for South Korea
Cycle-LengthAverage for high level
Traffic Leading lead time of coherenceseries Index (months) (months) Coherence
Telex South Korea 4Economy
30 0.65
Second, construction of a time-domainforecasting model using the cross-spectral methodology, is shown as auseful approach to a study of theeconomic behavior in the telecom-munications sector and its importantrelationship to the other economicfactors. In Less Developed Countriesusing telex as a representation ofoverall telecommunications traffic hasmerit since there is a need to provide anaccurate measure of the effect ofadequate telecommunications onsocioeconomic development.
7. REFERENCES
Chambers, J.C. Mullick, S.K. and Smith,D.D. (1971) How to choose the rightforecasting technique, HarvardBusiness Review, 49, No. 4, pp 45-74.
Chatfield, C. (1984) The Analysis ofTime Series. An Introduction. ThirdEdition. Chapman & Hall. London.
Defris, Lorraine V.; Allan P. Layton; BenZehnrith. (1986) . The impact ofeconomic cycles on the demand forinternational telecommunications inAustralia. Information Economics &policy (Netherlands) 2(2) pp 105-117.June.
Coldschmidt, Douglas. (1979). Telephone,communications, collective supply, andpublic goods: A case study of theAlaskan telephone system.Dissertation Information Service.(University Microfilms InternationalNo. 7928132).
Hardy, Andrew Peter. (1980). The role ofthe telephone in economic development.Institute for. Communication Research,Stanford University, Stanford,California.
Hudson, Heather E. (1984). WhenTelephones Reach the Village. AblexNorwood, New Jersey.
Hudson, Heather E. (1988). ADibliogr4phy of Telecommunication andSocioeconomic Development. Ablex,Norwood, New Jersey.
Moore, Geoffrey H. (1980). "The Case forInternational Business CycleResearch", Atlantic Economic JournalVol. 8, No. 3, pp. 5-16.
Pelton, Joseph N. (1986). Toward a Law ofSo. on
Chapter 1. Longman, New York
Pfaffenger, Roger C.., and James H.Patterson (1987). Statistical methodsfor business and economics. Irwin,Homewood, Illinois.
Samuelson, Paul A. , and William D.Nordhaus (1985). Economics, TwelfthEdition. McGraw-Hill, New York.
Saunders, Robert J., Jeremy J. Warford,and Bjorn Wellenius. (1983)Telecommunications and economicdevelopment. Baltimore Md.: JohnHopkins University Press.
Snow, Marcelius S. and Jussawalla,Meheroo (1986). TelecommunicAUOLaeconomics and international regulatorypolicy. Greenwo,A Press, Wesport,Connecticut.
Wellenius, Bjorn, (1987)Telecommunications Policies for LessDeveloped Countries (LDCs), July 8,1987. World Bank Files.
Yatrakis, P.G. (1972) "Determinants ofthe Demand for InternationalTelecommunications."Telecommunications Journal, Vol. 39(December).
Framing our Common Future: Strategies for PromotingCooperation among Stakeholders
Angelina T. Wong, Ph.D.The University of Saskatchewan
Saskatoon, Canada
ABSTRACT
The successful incorporation of telecommunication technologies intohigher education requires the orchestration of different types ofexpertise and reflective dialogue among the stakeholders. This paperwill highlight some of the lessons learned by the author and hercolleagues during six years of development and delivery of province-wide televised courses an enterprise which required thecooperation of academics, media specialists, instructional designers.university and college administrators, community-based coordinatorsand government representatives. The focus will be on the strategiesthat can help to overcome the barriers to collaboration.
Introduction
Access to higher education has become astrong political issue in many developed anddeveloping countries. Like many othercountries. Canada has been experiencingsocial and political pressure to increaseaccess to higher education and trainingamong adults who cannot attend classes atconventional campuses. It is the largestcountry in the world in terms of land area butranks 31st in terms of population. Withalmost all our institutions of higher educationconcentrated in the urban centers near thesouthern fringe of the country, it is difficult toprovide equitable access to people living inthe rural regions and in the far north. Almostall of the ten provincial governments havesupported the development oftelecommunication systems which have thepotential of expanding access to highereducation and training. In recent years, therehas been a growing recognition of the need toaddress the disadvantages of various groups,especially those of Canada's indigenouspeoples. Various forms of distance educationhave been adopted by universities, collegesand secondary schools to improve the equalityof education opportunity.
In 1987. the University of Saskatchewanadopted satellite-transmitted interactivetelevision in an attempt to extend first yearuniversity courses to students living in ruralareas. The successful incorporation oftelevision as part of the teaching/learningprocess required the orchestration ofdifferent types of expertise. The purpose ofthis paper is to describe the cooperativeefforts of academics, instructional designers,administrators, community-basedcoordinators, and government representativesto design, develop, produce and deliver our
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telecourses. The mix of dissimilarorganizations that constituted themembership of this distance educationenterprise was both a strength and aweakness. The paper will highlight some ofthe barriers to cooperation and the strategiesused to facilitate acceptance of a new deliverysystem.
The Context for Collaboration
Saskatchewan, one of Canada's ten provinces,is located in central Canada and shares withAlberta, our western neighbor, the feature ofhaving no salt water boundary. The provincehas only one million people and ageographical area of over 600,000 squarekilometers. Indigenous peoples make up over10 percent of the population, the highestproportion among all the provinces.Agriculture is the largest single industry:other major industries include mining andpetroleum refining. There are twouniversities, the University of Saskatchewanand the University of Regina, respectivelylocated in the two largest cities, Saskatoonand Regina. In the late 1980s, droppingcommodity and livestock prices forced manyfamilies to move from once prosperous ruralcommunities to the cities to look for a stableincome and education opportunities for theirchildren. For every family that moved, therewas another that could not afford to move butwas just as desirous of opportunities for re-training and higher education.
The challenge faced by the University ofSaskatchewan in the late 1980s was: In aperiod of restraint in the provincial economy.with corresponding budget cutbacks ineducation funding, how can we cooperate withother institutions to meet the surge ofdemand for access to higher education?
Beginning with the university's agriculturalextension services, we have had a 75-yearhistory of taking education directly to small,rural communities. With the introduction ofregional community colleges in 1973, theuniversity cooperated with these institutionsto offer university classes taught by travellinginstructors. The number of off -campusclasses that could feasibly be delivered wasrestricted by the vast distances betweencommunities, the small population, and thenumber of qualified instructors who werewilling to drive an average of 200 kilometers,often under harsh winter conditions.Correspondence courses in the humanitiesand social science areas filled part of the void.By the mid-1980s, the obstacles associatedwith providing access to people who could notattend the main campus were accentuated byburgeoning enrollment at the Saskatooncampus.
Could the university use a mix of technology-mediated instruction and traditional deliverymethods to solve the problem? Saskatchewanalready had a fibre optics broadband networkcapable of carrying audio-conferencing,educational television, and computer-assistedinstruction. However, because fibre linescannot be buried underground in thepermafrost in the north, the network couldpotentially reach only sixty percent of theprovince's population. An alternative wassatellite programming, which was being usedin four other Canadian provinces. Althoughthe university, through the sponsorship of thefederal Department of Communications, hadsuccessfully participated in satellitetransmission field trials in 1981 and 1984,there was no provincially coordinatedadministrative structure for distanceeducation delivery.
In 1986, a group of "occasional" users ofsatellite programming banded together toform the Saskatchewan Tele-LearningAssociation Inc. (STELLA). The foundingmembers included the two universities, atechnical institute, several communitycolleges, and Saskatchewan Health, with thechair held by the Director of Extension of theUniversity of Saskatchewan. A total of 45programs were developed and aired by 14education and community organizationsduring that first programming year. By thefall of 1987, the University of Saskatchewanhad decided to invest in satellite technologyto deliver its first year arts and sciencedegree courses. This decision wassimultaneously influenced by a "seat sale" onthe satellite Anik C offered by Telesat Canadaand a political problem facing the university atthe time. After several years of increasingenrollment with no corresponding programbudget increase, the university's largest
faculty, the College of Arts and Science, had toimpose a quota for the first time in 80 yearsand turned away several hundred qualifiedstudents. Amidst the turbulent sea of protest,the offer from Telesat Canada appeared to be ameans of meeting demands for access.
Within six months, the Extension Division haddeveloped and delivered two degree courses,English 110.6 and History 112.6, to 13locations in the province via the university'sstudio facilities. The positive feedback (Wong,1988) encouraged the university to develop athird telecourse, Psychology 110.6, which asdelivered to 25 locations in the fall of 1988(Wong, 1989). By 1989, a provincial distanceeducation agency, the SaskatchewanCommunications Network (SCN) was in placeto sponsor the development of two morecourses in Mathematics and Native Studies,and the number of receiving centersincreased dramatically to 52. Each receivingcenter, in addition to being equipped withKu-band satellite receiving dishes, hasclassroom space for discussion groups tomeet. By 1992, the number of receiving sitesnumbered 95 (including duplicateclassrooms) and the University ofSaskatchewan was contributing over 500hours of televised instruction.
A combination of several teaching/learningmodes were used to achieve three functions:(1) present information to the learners; (2)assist the learners in finding the contexts forunderstanding the new information; and (3)monitor the learners' incorporation of theinformation into their perceptions of reality.Information was presented to the learners viatelevised lectures, which varied between 60to 90 minutes, and a variety of print material,including several textbooks and a courseguide. Information was also shared in localdiscussion groups led by a tutor. The learnerswere assisted in their search forunderstanding by the television instructor, alocal tutor, and their learning peers. Thisassistance was provided via the interactivelectures, the printed course guide, the localdiscussions, and toll-free telephoneconsultations with the instructor anddesignated tutors. The learners' progress inunderstanding and integrating theinformation was monitored via theirparticipation in the discussion groups andtheir input into written assignments andexaminations.
The Stakeholders: Orchestrating DifferentExpertise
The implementation of this teaching/learningmodel involved the orchestration of severaltypes of expertise. A key component is the
n
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instructor each telecourse was preparedand presented by a professor who isconsidered to be an excellent teacher as wellas a scholar in his/her field. This wasimportant as the telecourses had to achievecredibility within the university community.The Extension Division paid for the release ofthe instructor from all other teaching dutiesduring preparation of the pilot course;"repeaters" were given release time for twicethe amount of an on-campus course.
A second important component of the systemis the local facilitator hired by the ExtensionDiViS1.311. This role is performed by a tutor ora proctor, both of whom are expected tofacilitate local discussions during the off -airperiods and assist the students in posingquestions during the on-air periods. "Tutors"hold master degrees in the subject area andare paid an additional stipend to markassignments and provide feedback to thelearners. "Proctors" hold bachelor degrees inthe subject area in small rural communities,it was not always possible to find resourcepersons with advanced degrees. In the courseevaluations, some proctors were rated evenhigher than the tutors because of theiroutstanding interpersonal skills. On the otherhand, some tutors were not re-hired becausethey failed to provide the kind of empatheticsupport needed by the learners.
The third key component involves thetechnical experts from the university'sDivision of Audio Visual Services (DAVS) whomake possible the weekly "live" delivery ofthe lectures and pre-produce supportingvideo clips and visual materials. Eachtelecourse was assigned a televisionproducer/director who was supported by acrew of eight technicians, over half of whomwere university students. The use of studentshelped to keep the cost down but alsoresulted in some uneven camera work, whichwas often compensated by a high level ofenthusiasm and camaraderie, a factor muchappreciated by both the instructors and thestudio audience.
The on-site coordinators cot_stitute the fourthimportant component of the system. Thenine participating regional communitycolleges assigned their own staff to coordinatethe publicity about the telecourses and thelocal facilities. In some cases, they helped toidentify potential tutors or proctors fromtheir communities. The coordinators areessential in identifying local problems(whether human, logistical or technical) andalerting the Extension Division office aboutthem. However, because the colleges helddifferent values about the telecourses, somelocal support were outstanding while otherswere less than adequate.
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Although many successful programs haveserved to demonstrate thattelecommunication technologies can enhancethe teaching/learning process, manyeducators are still wary of the cost-benefitimplications of adopting such technologies.The Extension Division, as the principalcoordinating unit, played a key role inenlisting support from the university andcommunity colleges. As a team, the Extensionadministrators and instructional designerswere responsible for conceptualizing theteaching/learning model, developing andproducing the course guide and other studentsupport material, recruiting and orientingtutors and proctors, liaising with SCN, DAVSand the community colleges re coursedelivery and reception, and solving problemsassociated with student registration anddelivery breakdowns.
Because the first two pilot courses weredeveloped and implemented within a shorttime frame of six months, someadministrative and technical mistakes weremade but were fortunately corrected by thesecond year. A major problem was time thesenior administrators had underestimated thetime it takes to develop a high qualitytelecourse and corresponding student supportservices. Part-time project workers werehired to fill the gaps but they required muchsupervision and additional space andequipment. After SCN began to providefunding for the courses, the grant scheduleand the course development schedule wereoften incongruent. As the number of courses,course teams members and studentsincreased, the juggling of human resourcesbecame more precarious.
SCN (Saskatchewan CommunicationsNetwork) was created in 1989 as a full-scaleprovincial satellite and fibre optic networkwith joint federal and provincial support.There are two distinct networks: the SCNTraining Network, a "narrowcast" networkdedicated to distance education and training,and the SCN Cable Network, an educationaltelevision channel distributed to cablesubscribers. Funding for the development andproduction of televised courses is dispersedvia a deputy minister's working group, withmembers drawn from the post-secondaryeducation sector. The emergence of SCNprovided a much needed stable source offunding and a provincial infrastructure todeliver distance education courses.
The Politics of Collaboration
The relationships among the instructional,administrative, and technical team memberswere both enhanced and impeded by thedifferent perceptions of the new delivery
system and the value attached to it. Anysystem can be seen as being at once part of alarger system and as having smaller systemswithin it. An analogy is how we see differentrealities depending on whether we focus oureyes on a sheaf of wheat or the wholewheatfield. Ideally, the synergy that comesfrom collaboration can often yield benefitsbeyond those originally envisioned, butsometimes the reverse can happen (Paul,1990).
The academic staff in various departments,the media specialists in DAVS, and theExtension Division administrators and coursedesigners belonged to different units withinthe same university, but attached differentsignificance to the telecourse delivery system.The instructors, while excited by a whole newway of teaching, were also concerned abouttradition and how credible the coursesappeared to their academic peers. The DAVSmembers were keen to produce high qualitypresentations to "showcase" the technicalcapability of their staff and facilities. TheExtension Division had invested base budgetand staff resources in a high risk project withthe hope that the increased access touniversity courses would justify long-termsupport for distance education from theuniversity and the provincial government.
The regional community colleges, whichrepresented the interests of over 50 ruralcommunities, varied in their support for thedelivery system. Some were highlysupportive, as the system provided the firstopportunity for university courses to beoffered in small communities within their"territory." Other colleges which had atradition of collaborating with the universityto offer face-to-face classes were reluctant togive up this option, as prestige derives fromthe local populace associating these classeswith the college. Telecourses originatingfrom the university campus "diluted" theimpact of the local college and also decreasedthe justification for new capital spending onlocal facilities.
SCN, as the fledgling government-sponsoreddistance education network, was eager tocapitalize on the experience of the Universityof Saskatchewan but at the same timeencouraged other educational institutions tocontribute to the network's programming.The committee that was set up to adjudicateproposals and distribute development fundsexperienced some growing pains andconsequently generated frustration for theuniversity course development team, whichhad to work under very tight timelines. SCNwanted high quality televised courses for theirmoney, but did not want to pay for theaccompanying print-based support materialsand student support services which the
Extension designers considered essential forthe teaching/learning process.
The stakeholders, while acknowledging theneed for an alternative delivery system tomeet the higher education needs of theprovince's rural population, differed in theirperception and support for the system. Theyconverged to share their expertise but stillfocused their priorities on different aspects ofthe system. The Extension Division, as theprincipal coordinating unity, had to adopt amore centralized style than was experiencedin previous collaborations. This resulted inincreased efficiency but also ruffled somefeathers in the process.
Facilitating Dialogue and Cooperation
It has been five years since we initiated ourfirst televised courses. Our experienceconfirms the observation of some educatorsthat collaboration, especially within thecontext of adopting "innovative" procedures,is a process fraught with potential pitfalls(Offerman, 1985: Le Sage, 1988: Konrad &Small, 1989). The "lessons" we learned as aresult of our experience include the following.
The goals and rationale of the projectshould be clearly described, written down,and communicated to all the participants.
Because of the tight timeline fordevelopment of the pilot courses, therewas no time to document the goals andrationale for communication to all levels ofstaff among the partner institutions anduniversity units. Senior administrators ofthe Extension Division paid personal visitsto their counterparts among the regionalcommunity colleges, but many of the staffwho had to assist in implementing theproject were not aware of the long-termgoals and rationale for the projectstrategies. As a result, some participatingstaff were not supportive of the innovation.In subsequent years, the Extension Divisionhosted orientation workshops whichintroduced the process to all the newpersonnel among the participatingstakeholders. These workshops alsoserved as a social function for bringingtogether new and veteran staff membersand acknowledging them for theircontribution to the project.
There has a be a clearly established benefitfor every participating institution or unit.Participating staff must understand andsupport the anticipated benefits or gainsome personal satisfaction from theproject.
The University of Saskatchewan was
1015 .1!.
perceived to be the "winner" in thisproject because of the favorable publicitygenerated over the use of a new technologyto increase access to higher education.Some regional colleges with very smallpopulations also benefited from theinnovation. Other colleges consideredthemselves as losers" because the optionof travelling instructors was withdrawnfrom content areas which were offeredelectronically in their communities. There-introduction of this option two yearslater (in addition to the televised format)mollified these colleges somewhat, but theproject managers were not able to capturethe sense of community that was builtamong the "satisfied" partners in the pilotyear. The instructors who participated inthe pilot courses became strong supportersof distance education and managed to"convert" some of their colleagues withinthe university. SCN was satisfied with thequality of the televised courses and usedthem as a model for encouraging othereducational agencies to contribute to theirTraining Network.
There must be a champion of theinnovative project in every participatinginstitution or unit. These individuals musttrust each other and be prepared to spendtime in building support within their ownorganizations.
In retrospect, the Extension Divisionadministrators can identify specificcolleges and units where they could expectactive opposition or benign neglect in thedelivery of the televised courses. Theseunits usually do not have a "champion" whopersonally supports the project. Incontrast, good personal relationshipsamong certain principal players greatlyfacilitated the marketing and delivery ofthe program in specific regions. There arenow champions among most of thea operating units. Their presence helps towiden the base of political support forusing telecommunication technologies toincrease access to post-secondaryeducation.
References:
Konrad, A., & Small, J. (1989). Collaborationin distance education. In Post-secondarydistance education in Canada: Policies,practices and priorities. _Edited by R.Sweet. Athabasca, Alberta: AthabascaUniversity and Canadian Society for Studiesin Education.
LeSage Jr., E. C. (1988). Three problemsfacing continuing educators in cooperativeenterprises. Canadian Journal of UniversityContinuing Education, 14 (2), 5-21.
Offerman, M. J. (1985). The pitfalls ofcooperation. Washington, D. C.: TheCouncil for Interinstitutional Leadership.
Paul, R. H. (1990). Open learning and openmanagement: Leadership and integrity indistance education. London: Kogan Page.
Wong, A. T. (1988). An experiment intelevised university courses: Evaluation ofEnglish 110.6 and History 112.6. Saskatoon:Division of Extension and CommunityRelations Research Report, The University of
Saskatchewan.
Wong, A. T. (1989). Televised courses at theUniversity of Saskatchewan: Somethingold, something new. Saskatoon:Division of Extension and CommunityRelations Research Report, TheUniversity of Saskatchewan.
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VSAT SOLUTIONS FOR INNOVATIVE INTERNATIONAL ANDDOMESTIC SERVICFS
B. K. SYNGAL
CHAIRMAN AND MANAGING DIRECTORVIDESH SANCHAR NIGAM LIMITED
INDIA
ABSTRACT:
The paper describesapplications of VSAT networks for
realization of innovative and cost effective networks. In
developing countries with inadequately developed communications
networks, the use of VSATS can provide quickly implementable
solutions for trade networks, tourist and banking networks.
Overlay networks for advanced services such as Video conferencing
and ISDN are also well achieved using VSAT technology. The paper
also highlights the current developments in this field and the
need for developing countries to opt for easily adaptable VSAT
solutions.
INTRODUCTION:
The potential of VSATs for providingreliable communications over widespreadlocations has been recognized since thevery inception of SatelliteCommunications. VSAT networks serve aniche area in the spectrum ofcommunications facilities. The ease andrapidity with which VSATs can be installedand their independence from traditionalterrestrial communication networks hasbeen perceived by the users to beparticularly attractive for applicationswhere the terrestrial networks areinadequately developed or where the delaysinherent in providing terrestrial linesare unacceptable. The reliability andquality is also generally superior toterrestrial alternatives.
VSATS - A BRIEF IHSTORYVSATS have indeed a very brief history,dating back to no earlier than the 1980s,prior to which the satellite powerlimitations did not really allow practicalimplementations.The first generation of VSATs thusappeared in 1980. These were generallyreceive only VSATs operating in C-band andused for one way data applications such asnews services (Associated priors, UPI
etc.). Based upon spread spectrummodulation and Aloha contentiontechniques, their use was limited to lowspeed data services.Quick to realize the suitability of VSATsfor interactive rather than one way datacommunications, rapid developments wereushered in by manufacturers to bring forth
the second generation VSATs. These VSATsavailable around 1984 could operate in Cas well as Ku band to take advantage oflarge bandwidth available and provide twoay communications.By now a large number of users wereentering the market with their individualhardware, networking & connectivityrequirements. Proprietary network and hubtechniques were clearly unsuitable forsuch multivendor hardware and software andshared hub requirements.The third generation of VSATs, availablearound 1987 overcome these limitations byproviding open networking operatingarchitectures (OSI conformance) capable ofsupporting interoperability it multivendoroperating environment. Bet'.er satelliteaccess and bandwidth manage:,ent techniques(slotted Aloha, TDMA) together withnetwork management capabilities today makefor more cost effective and flexibleimplementation of VSAT networks.Users in advanced countries like USA andCanada were quick to recognize the uniqueadvantages of VSATs for their businessnetworks which spanned multiple locationsspread over a number of cities and ruralareas. The VSAT networks were recognizedto enable the users to avail of advanceddigital services in places where theterrestrial network is not sufficientlydeveloped. Being self contained the VSATnetworks are also fully user controlledand lend themselves well to provide a
uniform range of services and end to endnetwork management. The high flexibility,quick installation and reliable operationmake the VSAT's an indispensablealternative for public and businessnetworks.
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2.VSAT TECHNOLOGY-THROUGH THEGATES OF REGULATION
The availability of reliable and Costeffective technology alone does not ensureits optimum utilization. Nowhere is thismore evident than in the use of VSATtechnology worldwide.In the US, the use of VSATs for privatenetworks and business applications hasbeen free of regulatory restraints sincetheir very inception in the eighties.This has led to their widespread use.Large VSAT networks such as those of K-mart, GM,Ford and Dow-Jones areindispensable today for the conduct theirbusiness.In developing countries, which couldpotentially derive maximum benefit fromVSAT networks to provide advanced digitalservices, unfortunately this technologywas seen as a threat to the monopolies ofthe Telecommunications authorities. Theability of the VSATs to by pass theterrestrial networks and the facilitiesprovided by the Telecommunicationsadministrator were simply not acceptableand were stifled by the regulatoryframework. This virtually ensured thestifling of innovative and cost effectiveuses of VSAT technology thus denying thesebenefits to their users.In fact, the situation in Europe was thesame till the turn of this decade when therestrictions on the use of VSATs werelifted. Rapid developments are now takingplace in Europe and multi-national andPan-European VSAT networks are soonexpected to be common place for businessand private use.
INTERACTIVE COMMUNICATIONSNETWORKS-THE VSAT ALTERNATIVE:
There is an urgent need to have a closelook at the VSAT technology beyond theframe work of regulation and restrictivepractices, particularly in developingcountries where the telecommunicationsinfrastructure is inadequate or overloadedthrough the need for provisioning of basictelecommunications services.The vicious cycle of underdevelopment andglobally uncompetitive business can be
broken only through the provision of thestate of the art communications tools suchas advanced digital services, ISDN ,
videoconferencing etc. to trade andbusiness establishments operating in thesecountries. The provision of such
facilities is also essential forattracting foreign investment and businessfirms. For, who would like to invest ina country where their plants and officesremain virtually isolated from theirglobal operations and services like CreditCard verification, Videoconferencing,Computer Aided Manufacturing inventorycontrol can not be implemented ?
Telecommunications Administrations inunderdeveloped countries usually do a lotof lip service by unveiling grandioseplans of imple -ientation of digitization,ISDN and other services in the network.However, by their own estimates, theamounts involved in implementing even afraction of these plans are staggering andno one is in any doubt that an earlyimplementation is well-high impossible.Even overlay networks, often promised forearly implementation are costly, limitedin reach to metropolitan areas, difficultto interface to existing overburdenednetworks and are still time consuming toimplement.Today we need to look atinnovative solutions to provide state ofthe art telecommunication facilities whichcan be rapidly implemented at low costeven in far flung areas.The VSAT technology, with its provencapability of being able to providedigital bearers supporting a host ofadvanced digital services which can bemade operational over time frames as shortas 24 hours is a candidate meriting primeconsideration for such applications.The unhindered pr7ision of suchfacilities can bring about dramaticchanges in the operating environment andprovide innovative services which aretruly cost effective. Moreover, where theinvestments for such facilities are madeby private operators who set up their ownbusiness networks, the telecommunicationsauthorities need not make large resourcedraining investments.
3.VSATS IN DEVELOPING COUNTRIES-THE INDIAN EXPERIENCE
The advantages of VSATs are well knowneven in developing countries, though theregulators are by and large, are unwillingto let go their hold on the networks.In India, there are two major VSATnetworks, the Remote Area Business andMessage Network (RABMN) and the NationalInformatics Centre Network (NICNET). TheRABMN is operated by the Department ofTelecommunications (DOT) while the NICNETis operated by the National InformaticsCentre, a Government agency and thusregulatory problems have been avoided. Noother private operators have beenpermitted to operate any network in India.Both RABMN and NICNET are based upon thespread spectrum Multiple Access (SSMA).The VSATs employ the Code DivisionMultiplexing technique to encode the VSATsignals. The VSAT terminals operate at1200 bits per second. The networksoperate in the C-band on Transpondersprovided by the Indian National Satellite(INSAT).The NICNET is an information network tointerconnect all the districts in India tothe hub station located at New Delhi.This is basically a government Informationnetwork. The networks presently coversabout 550 locations and is expected toincrease to over 3000 VSAT nodes. It
1018
permits facilities like simple messagingusing computer Terminals and is expectedto be helpful to create a nationaldatabase.The RABMN has an initial capacity of about1000 VSAT terminals. The users, can set uptheir own private networks by sharing thehub station.The C-200 series VSATs used in the networkcan be put to a variety of users such asAccess to X.25 network, simple messagingand remote telex operation through thehub.The VSATs are manufactured in Indiathrough a Joint Venture Company Called ITIEquational Satcom Ltd, which is a jointventure between the India TelephoneIndustries (ITI), and CONTEL ASC (formerlyEquatorial Communications Company, USA.)While the VSAT networks in Indiaundoubtedly serve an important businessneed of bank and commercial establishmentsin rural and remote areas, the choice oftechnology is an example of howtechnologies at the verge of obsolescenceare sometimes selected by developingcountries at high cost to the users. Ata time when third generation VSATs withhigh speed data capability are readilyavailable at low costs ranging from $
5000-10000 per installation, the use of1200 Bps terminals does not seem to be thebest solution.
VSAT TECHNOLOGY-TODAY ANDTOMORROW
The VSAT technology has today come a longway since the 1980's where low speed oneway data services were made possiblethrough C-band receive only VSATs based onspread spectrum modulation techniques.Such VSATs found ready applications bynews services.Two way, interactive system soon appearedfirst, in the C-band, and later in theKU-band (11-14 GHz) where higher speedservices were possible. The advent ofhigh powered satellite and improvedtechnologies used in antennas, receiver6and modems permit reliable operations ofVSAT equipment at digital rates of 64Kbps, 128 Kbps and above. This improvedperformance is available at steadilyfalling costs.The network architectures available intoday's VSAT networks are also more openin contrast to hardware defined fixedaccess modes and protocols in earlierversions. These permit users to haveaccess to switched network architectureslike X.25 which opens a vast range ofapplications for VSAT networks.The VSAT networks operating beyondnational boundaries using open systemsInterconnect (OSI) conformance are indeedsuitable for providing a host ofapplications ranging form switched data,Electronic Mail EDI file transfer andother services.
Continued developments in satellitetechnology, access techniques and VSATterrestrial technology promise muchsuperior performance in the days to comewith a potential to open a host of newapplications.Speeds approaching primary rate (1.5 or2.048 Mb) with 1.8M (or slightly largerantennas) are expected to be available.Spar Aerospace have already developed aterminal operating at T1 rates with 2.4 Mantenna. The use of demand assigned TDMAtechniques should make possible very hightraffic capacities on the satellite.The availability of advanced VSATterminals at reasonable costs makepossible the availability of voice, data,fax, telex and videoconferencing servicesover wide areas. This is the option thatneeds to be looked at for innovative andcost effective solutions.
FACTORS GOVERNING THE USE OFVSATS IN DEVELOPING COUNTRIES
A number of factors have turned favourableform increasing application of VSATs inthe global scenario including thedeveloping countries.First of all, there is an increasingrecognizat4.on that regulation should notcome in the way of provision of essentialtelecommunications facilities for businessdevelopment. Most countries are keen tocreate a favourable climate for investmentand trade and easier licensing of VSATnetworks is on the cards.The European community Green paper on theregulation, provision and operation ofsatellite services in serving as anexample to the developing countries.Secondly the availability of a largenumber of regional and national satellitesystems means that satellite capacity canbe hired at very competitive rates, withpossibility of multiple options to networkoperators.Thirdly, the VSAT network costs are on acontinuous decline. The costs of spacesegment are also declining with datacompression ann video overlay techniques.VSAT Terminal costs below $ 5000 mark andHub station costs of below $ 100,000 markare realizable depending upon the type ofnetwork.Fourthly, VSAT networks are no longerbeing perceived as low bit rate devicescapable of only stray applications likedata gathering and not really suited forbusiness applications like corporatenetworking and LAN interconnections.
The capabilities available in the VSATnetworks today, which include high speeddigital operation, permit a full spectrumof business applications ranging fromvideoconferencing, computer networking,Fax and voice networking. This coupledwith the inherent capability of VSAT's todeliver the services without boundaries
10191(T:6
make it the single most attractivealternative for rapid provision of basicand advanced communication services.
A VSAT SOLUTION FOR TRADENETWORKS IN DEVELOPINGECONOMIES:
The use of value added services likeElectroni:: Data Interchange and Computer-Computer communications have becomeindispensable for competitive and costeffective operations. Value addednetworks providing services to Trade andIndustry have come up in developed andmany developing countries to meet theserequirements. Countries in Asia-Pacific,Europe and Africa wishing to remain at theforefront of international trade likeSingapore Korea etc. have scrambled toform Trade networks to provide theseservices.(TRADENET, KT-NET)These Trade networks need to serve theneeds of the major players in industry andtrade-manufacturers, cargo agents,transport carriers warehousing agents andport trusts etc. While setting upcountrywide trade-nets may be a simplematter for small countries like Singapore,the same is not true for larger nationslike India. The facilities needing to belinked via a trade-net could include thefollowing:Port TrustrAirport AuthoritiesTrunk TerminalsRailwaysInland container DepotsCustoms AgenciesExcise Central Taxation authoritiesCargo and customs agentsInsurance agenciesMany of these places are widely dispersedthroughout the Indian Subcontinent and aregenerally serviced by inadequatetelecommunication facilities.At the same time, the Indian Business andexporters organisations are today in astrategic position to dramatically improvethe exports and overseas trade of costeffective techniques can be implementedleading to strategic and competitiveadvantages. Most developing countries inAsia and Africa are in this stage wherestreamlining of procedures and the use ofInformation Technology can make all thedifference between success and failure.All agencies including government agenciesare fully aware of the urgent need ofnetwork for trade and keen to provide allsupport to make a trade network possible.
However the main bottleneck usually facedfor realizing truly effective tradenetwork is the lack of basiccommunications infrastructure at far flunglocations. Low speed analog networks cannot mert the requirements of thevoluminous transactions expected to be
1020
handled daily on these networks. At thesame time, it is unrealistic to expect thelocal telecom infrastructure toimmediately provide high speed digitalservices.A VSAT network is ideally suited to createa trade-network in such situations. VSATterminals can be installed at all keylocations such as Railway depots, InlandContainer Depots (ICD's) Port, Customsagencies and Airports. The hub stationcan be integrated with a Centre providingvalue added services such as EDI. Such anetwork can be rapidly implemented at amuch lower cost than traditionalterrestrial alternatives. High qualitydigital services with high reliability canbe provided to ensure optimum performanceof the trade network.
VSAT TECHNOLOGY FOR TOURIST -NET
Another area which can potentially derivebenefits from VSAT technology is thenetworking for the tourist, hotel andresorts industry. Countries like Indiaabound in tourist places, wildlifereserves, forest resorts and other placeson the tourist trail. Tourism is high onthe priority list of most developingcountries, yet most of these placeslocated in far flung areas are notadequately served by even basiccommunications facilities such as hoteland flight reservations. For these
reasons they are usually not on the
preferred lists of foreign tourists. A
low cost VSAT network linked to the
worldwide Airline and Hotel reservation
network (SITA) is an ideal alternative.The network can be a shared hub networkwith the resultant cost savings to its
customer agencies.
VSAT NETWORK FOR BANKING AND
FINANCIAL SECTOR:
There is no sector in the economy which
stands to benefit so much from the
infusion of Information Technology andnetworking as the Banking Sector. This
sector, in India and perhaps in many otherdeveloping countries is characterized bythousands of branches in remote locations
and rural areas. Post is primary mediumof financial transactions. No countrywideservice like ATM's can be introduced as
the operations are manual. Even in
cities, where computerization is making
progress networking is by and large in adismal state due to inadequate and timelyavailability of communication links. The
problems of security in financialtransactions further limit any significant
use of the telecommunications networks.Dedicated private VSAT networks operated
for ATM's and interbranch funds transfer
and management have the potential to
effect startling economics with thepossibilities of recovering investmentsmade within a short time. Such facilitiescan be installed rapidly where needed andwould be fully under the control of theusers providing a secure and reliableservice.The solution of networking ATM's ingeographically diverse locations usingVSATs has been recently implemented inMexico by Banco Serf in. The Morelos Ku-band satellites were used with 64 Kbpsdata links to network more than 172mainland branches and head offices. Higheconomies could be achieved through theuse of upto sixty VSAT stations on asingle 64 Kbps bearer.
VSATS FOR ISDN SERVICES:
There is an urgent need to provideadvanced digital services like high speedleased circuits and ISDN services tocompanies wishing to set up shop in acountry. This is particularly true whenfirms with global connectivity wish tooperate in far flung areas.The investment required to set up ISDNexchanges in all regions of a country canbe unacceptable, not to say of the timeneeded for such provisioning.Setting up of hubs providing an ISDNswitch and linking to remote sites viaVASTs is however a more feasiblealternative. Such a hub can link to theinternational network to provide globalconnectivity. Services available on ISDNsuch as G4 FAX, videophones, switchedvideoconferencing and value added servicescan be all provided in a flexible manner.VSAT technology has already been exploitedfor ISDN services. NTT in Japan is usingVSATs to provide services to users locatedbeyond the areas served by terrestrialISDN infrastructure.A flexible mix of advanced digitalservices such as "occasional use" leasedcircuits, file transfer facilities andcomputer networking can be bundledtogether to provide a working environmentfor business which is at par with theworld.
VSAT NETWORKS FORVIDEOCONFERENCING:
The Videoconferencing technology hasundergone a dramatic change over the lastfew years. The application of hightechnology in codec has led to therealization of videoconferencingtechnology which can be used over speedsof 64 Kbps, 128 Kbps and 256 Kbps. Thesestandards are gaining increasingacceptance for switched video services.The CCITT has standardized these servicesfor international use in H.261 as Px 64services for 64-2048 Kbps use.VSAT networks constitute an ideal mediumfor providing videoconferencing services
in remote areas not served by digitalfacilities.The utility of such _networks can be
manifold, particularly in developingcountries. Videoconferencing with one wayvideo and two way audio can be used ininteractive educational programs like the`Class' program in India. The interactivefacility makes it a much more attractiveand effective medium of education.
INTEGRATED FAX GATEWAY ANDMESSAGING RAMIFIES:-
Fax is an ideal medium for messaging inmultilingual countries like India.Telegrams cannot handle these messagingrequirements particularly where messagesare delivered in diverse regions.The use of Telephone networks is howeverexpansive for Fax. The quality of analogtelephone line available in various remoteregions of a country does not also permiteffective use of fax technology. The useof hubs acting as fax gateways can providean elegant and cost effective solution.An implementation of such a faci_ity e.gat all distinct centres can serve asimportant communications need serving bothrural and urban communities.
CURRENT DEVELOPMENTS IN VSATTECHNOLOGY
The third generation VSAT technologyavailable today provides high speedinteractive data and voice communicationsand is capable of supporting applicationssuch as distributed computer networks,mobile data communications, videoconfer.mcing, LAN - interconnections andelectronic messaging (X.400) andElectronic Data Interchange (EDI).Rapid developments continue atbreathtaking pace to bring forth thefourth generation technologies expected torevolutionize the VSAT scene once again.Ultra Small Aperture Terminals (USATs) areexpected to be available in the nearfuture, their operation being madepossible by more powerful satellites andadvances in component technology. Thegain and directivity requirements placedon terminals are rapidly diminishing suchthat advanced antenna design techniquessuch as phased array can provide betteralternatives. The availability of suchterminals, in fact, is expected to lead toa seamless bridging of mobile & fixednetwork technologies & terminals.
1021 1
OPEN NETWORK MANAGEMENT
The vast increase in the number ofterminals as well as networks usuallyoperating across national boundaries in amultivendor environment means the need forthe availability of totally open networksmanagement systems. The increasedavailability of such technology would meanthat all components even in the failcircuits could be modified and configuredby the network management facility.
SOFTWARE DEFINED VSAT NETWORKS
The high rate of technical obsolescencehas brought forth the need of moreflexible software architectures. Infact,the trend is towards totally softwaredefined networks where the remote sitesoftware is also downloaded from the hub.This permits entire network operatingconfiguration to be altered at will.Networks can thus transform and evolvecontinuously without disruptingoperations, through a regular upgrade ofsoftware from a central or remote site.Direct communication between remote VSATsobviating the need for central hubs arealso emerging. This together withappropriate regulatory provisions to allowinterconnection of VSAT systems to publicnetworks would revolutionize the range ofapplications supported & force atransformation of network technologies.Ultimately, the seamless integration ofmixed satellite, terrestrial, cellular andsatellite mobile services is definitely onthe cards, thus providing totalcommunication solutions to users.
VSAT TECHNOLOGY AT CROSSROADS:
A number of parallel developments in thefield of telecommunications have broughtforth alternative solutions in areas onceconsidered exclusive domain oftechnologies such as VSATs. Remote Areaand thin route fixed, satelliteapplications conventionally served byfixed VSAT terminals can equally well be
served by mobile satellite terminals.Mobile Satellite Technologies initiallyintroduced for Maritime mobile (e.g.Inmarsat-A) have evolved rapidly to thestage where medium speed data services canbe provided by mobile terminals smallerthan a conventional VSAT. The satellitemobile technology developed isspecifically suited for marketing theneeds of a vary large number of mobileterminals operating at low radiated powersand using services such as fax, datatext messaging. the Inmarsat-M is anexample of this technology. Manyapplications, implementated a couple ofyears back using VSATs can today be
equally well implemented using Inmarsatstandard-C terminals, with the possibilityof saving costs associated withimplementing a private VSAT network.The "niche" areas for VSATs have thusshifted away from low traffic low bit rateapplications towards high traffic highbandwidth applications (usually in the Kuband) where they appear to rule supreme.However, this too may not last for ever.
THE GRAVE YARDS OF TECHNOLOGY:LESSONS FOR DEVELOPING COUNTRIES
How does a VSAT user feel if he gets anoffer for a last option on VSAT terminalsintroduced by him a couple of years back,as the manufacturer decides to globallycease production the terminal due totechnological obsolescence ? And yet,such incidences are becoming increasinglycommon. It is happening today, to theuser of C-100 and C-200 terminals, such asthose used in India.The rapid advances on the forefronts oftechnology are leaving behind a graveyardof technologies rendered obsolete withoutattaining their prime. The users,particularly in developing countries needto look at alternatives solutions andtechnologies which have a potential to bealtered and adapted with ease.Technologies which are based on openstandards, rather than proprietary arebest adapted to survive technologicalchange.Yet, it must be said that the realchallenges which deveoping countries faceare not only due to technological issuesbut also managerial issues. A clear sent-of direction and approach which is
essential in this era of rapid changes isusually lacking. The usual approach is togo on implementing the aged plans fortelecoms expansion while seeming totallyignore the global developments in thefield. However, such an approach togetherwith stifling deregulation only serves toenlarge the graveyards of technology. Itis imperative that the developingcountries break this vicious circle andlook at the most innovative solutionsavailable for implementing an application.
WHAT DO THE STARS FORETELL?
It is not wise to indulge in crystalgazing particularly in the field oftelecommunications, where the newdevelopments seem to consistently gobeyond the wildest imaginations of theprophets of the future.It is for example difficult to imagine,what would be the relevance of VSATs inera of globally mobile personalcommunications such as Iridium andInmarsat Project 21. The availability ofLEOs (Low Earth Orbit Satellites), meansthat the mobile terminals need to operate
1022
at much lower powers. A small handhledterminal with a phased array antenna wouldthan be able to provide all thecapabilities of a VSAT and more. These"Personally Mobile VSATs" would then meetthe needs of information of the individualin the information age.The merger of the fixed and mobilesatellite technologies thus continues togain momentum and promises to bring forthan era of unhindered information exchange.
CONCLUSION :-
VSAT is a technology whose potential hasbeen scarcely recognized in providing costeffective & flexible advancedcommunication services. Even in advancedcountries 9f Europe, barely the tip of theproverbial iceberg has been unveiled. Theprime reason for slow realization of thebenefits of this technology have been selfimposed regulations - regulations whichhave served the interests of no-one.It is time that the unique advantages ofVSAT networks are recognized and thecurtain of restrictions lifted to realizea new communications dream.
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VSATs - An Efficient Option for Voiceand Data Networking
Carol A. Politi
Sr. Marketing SpecialistHughes Network Systems, Inc.
ABSTRACT
With over 5.000 VSATs installed and ordered to date, the Pacific Rim is one of the most rapidly growingmarkets for VSATs today. This rapid growth has been spurred by the dramatic growth in demand fortelecommunications services in the region - both basic infrastructure services and sophisticated datanetworking services. VSATs provide an excellent solution for this need, offering the capability torapidly deploy cost effective voice and data networking capabilities to regions in cities as well as remoterural areas.
VSATs have traditionally been viewed as a high quality data communications alternative. Over the pastfew years, however, technology advances have led to an expansion of the VSAT market, enabling VSATnetworks to serve an array of new applications. VSATs are enabling businesses to effectively op2rate inregions where it previously was difficult to obtain reliable, high quality telephone service. And they areenabling the extension of basic telephone service to regions without an established telephonyinfrastructure. The data applications supported by VSATs are also dramatically expanding. VSATs arenow supporting data applications ranging from high data rate LAN interconnection and imagetransmission to lower data rate point-of-sale and supervisory control and data acquisition (SCADA)applications.
VSATs - Ar. Efficient Option For Voice and DataNetworking
Nearly 1000)0 VSATs (very small aperture terminals) are beingdeployed throughout the world, supporting a wide variety ofapplications including public telephony services, informationservices (e.g.. broadcasting of news), and retail and branchbanking communications. Over 5,000 of these VSATs are beinginstalled throughout the Pacific Rim (Figure I), including over500 in Australia. over 6(X) in Indonesia, over 800 in China. andover 300 in the Philippines. Additional VSATs are beingdeployed in Japan, Thailand, Taiwan, and Koreaorganizations within virtually every country are implementingsatellite networks to obtain an efficient solution for voice anddata networking.
FIGURE 1. VSATs IN THE ASIA-PACIFIC REGION
1026
The rapid growth of the Pacific telecommunications market isevident in the dramatic increase in demand for satelliteequipment and services within the region. The strong increasein business activity within the region, complemented by theliberalization of the telecommunications infrastructure in manycountries. has made available service alternatives that extendtelecommunications beyond the economic feasibility of currentterrestrial infrastructures. Progressive rural telephony programsbeing implemented by many governments are expanding theneed for basic telephone service to those remote, hard to reachareas that are well served by satellite technology.
The latest technological advances have resulted in a series ofVSAT product alternatives, some optimized for data networkingapplications and others enabling the expansion of voicenetworks into areas lacking a basic telecommunicationsinfrastructure.
This paper provides a view into the VSAT market, including adescription of some representative network services availablewithin the Asia-Pacific region today. An introduction to VSATsis provided for those unfamiliar with the technology or therecent advances that have expanded the potential markets forVSAT networks.
Why are VSATs the Technology of Choice for ManyOrganizations?
VSAT networks provide users with a number of strategicadvantages. including an average availability of 99.5 percent andcaNe of rapid deployment in remote or hard-to-reach areas. Inaddition, with a VSAT network. organization have control overand insight into their entire network from a single point, an
'-
r
especially important feature for an organization with a numberof remote locations distributed over a large area.
VSATs are typically used by organizations that require data orvoice communications between sites distributed over a widegeographical area, making terrestrial links expensive to set up.While terrestrial links are economical over short distances (e.g.,within a city), their cost climbs quickly as the distance betweenlocations increases.
VSAT networks are also often used in those areas wheretelephone links are overloaded, unreliable, or difficult to obtain.While terrestrial data and voice links are often readily availablein large, metropolitan cities, in smaller urban and remote ruralareas these links are often difficult, if not impossible, to obtain.
VSAT Network Topologies
There are two types of VSAT networks, mesh and star. Starnetworks (Figure 2) are used for point-to-multipointcommunications such as communications between a bankheadquarters and its remote branch offices. These networkshave a larger hub station located at the user's data center orheadquarters to enable communications into small, inexpensiveVSATs located at remote branch offices. Star networks are mostoften installed to support corporate data communicationsrequirements and also support interactive voice and broadcastvideo services where regulations permit.
With mesh VSATs the sites communicate directly with eachother as opposed to going through a central hub location(Figure 3). Mesh VSATs are most often used for voice traffic,although they also carry data and broadcast video. These areparticularly attractive in regions with an underdevelopedtelecommut ications infrastructure where it is often difficult, ifnot impossible, to obtain links for voice or facsimile service.Mesh network applications include:
Private voice networks, connecting a number of privatebranch exchanges (PBXs)Public network extension, to extend public networksinto rural areasLong-haul connectivity among switching sites ofcellular telephone base stationsEmergency communications/disaster recovery
4-0.
4
STAR
CENTRALNULL SITE
CENTRAL SITECOMMUNICATES WITHMANY REMOTE SITES
FIGURE 2. STAR NETWORK
1027
FIGURE 3. MESH NETWORK
Star Networks
Star networks consist of three primary components (Figure 4):
1) Hub Earth Station - In areas where regulations allow privatenetwork ownership and the user has elected to manage his or herown network, the hub is located at the user's headquarters or datacenter location. In many cases, however, users elect to utilize aVSAT network as a service, sharing a hub owned by a serviceprovider with other users to minimize the larger capital cost ofthe hub and t,, alleviate responsibility of managing the network.The hub provides the interface-to-user host equipment and has alarger antenna (typically between 6 and 9 meters in diameter)that enables communications with the smaller, remote VSATs.
2) Remote VSATs - A small remote VSAT is located at eachremote network location to provide the interface-to-user data andvoice communications equipment, transmit information to thehub station, and receive information transmitted from the hubstation. These remote VSATs interface to a wide variety of usercommunications equipment, including LANs (local areanetworks), minicomputers, terminal controllers, and PBXs. Thisequipment also interfaces to equipment using a wide variety ofdisparate communications protocols. including X.25. SDLC,
Token-Ring, and Ethernetel. The remote VSATs typicallyhave antennas ranging between 1.0 and 2.4 meters in diameter.
3) Network Management - The network is managed by theuserif the user owns its own hub facility and by its service providerif the user receives the network as a shared huh service. In eithercase, the network can be managed ,:ntirely from a centrallocation. Shared huh customers are often provided with anetwork management terminal to enable them to monitor andcontrol their own locations via terminals located at theirheadquarters or at a remote location.
Satellite capacity is provided by the satellite providing the bestcoverage of the region - AsiaSat. Palapa, and AUSSAT are allcarrying VSAT traffic. The network is asymmetrical, with alarge outbound link supporting information transmitted from thehub location to the remotes and a number of small inbound linkssupporting information transmitted from remote stations to thecentral huh. The outbound link is shared via time divisionmultiplexing (TDM). Information from host computers attached
to the hub is transmitted to remotes as it is received by the hub.Each remote station "reads" only that data addressed to it andpasses the data on to the attached user equipment.
Inbound links are also shared by a number of remote locations.The number of remotes on an inbound link is allocated by thenetwork operator and is dependent upon the level of traffictransmitted by the user computer. The network operator can alsoreallocate capacity from the central network managementconsole as changes require (e.g.. addition of sites, changes inapplications, or traffic levels at a site). Remotes access capacityon these inbound links upon demand (i.e., as they have data orvoice traffic to send) and release this capacity for use by otherlocations after their transmission is complete, enabling efficientuse of satellite capacity.
Mesh Networks
Mesh networks consist of two primary components, the remoteVSATs and a network management center (Figure 5).
The primary difference between various mesh networkarchitectures is the efficiency with which the satellite capacity isused. Some networks are based upon preassignment of satellitecapacity whereby capacity is preassigned and dedicated todifferent sites in the network. These preassigned networks arecost-effective and simple to operate where there are less thanfour or five sites with high traffic volumes per location. Forexample, mesh networks using preassignment are often used fortrunking applications where traffic from a number of locations orusers has already been consolidated for long-haul transmission.
In recent years, mesh networks using demand assignedtechniques have been developed to provide thin routeconnectivity. These mesh networks efficiently support networkswith many locations having a low to medium level of traffic perremote as they make use of the fact that no site uses capacity100 percent of the time. When a site does not need capacity(e.g.. when the site is not involved in a call), the capacity isreleased for use by other locations. Remote locations are
outfitted with antennas and power amplifiers that vary in size,depending upon the traffic (e.g., number of channels) that mustbe supported at the remote. The vast maiarity of sites are servedwith 1.8- or 2.4-meter antennas.
In addition to demand assignment. these new mesh networksoften incorporate the following techniques to increase efficiency:
Voice activation Capacity is used only when aconversation is actually in process: it is released for useby other locations when there are pauses during speech.
Voice compression Voice is transmitted at rates as lowas 9.6 kbps, minimizing the capacity required for eachcircuit.
A centralized network management system is used to providefull control of the network, allocating capacity when it receivescall requests from remote locations, and coordinatingfrequency/capacity assignments between remote locations. Thenetwork management system also provides a centralized pointfor collecting statistics and billing information and to performremote software downloads.
Some VSAT Users
VSATs are being used throughout the Pacific Rim by a widevariety of industries for a diverse group of applications, a few ofwhich are profiled below.
`mob
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REMOTE OFFICE
The Salim Group
I1NS Personal Earth StationTh (PE,Sn4) VSA1\. are beingused by the Salim Group for communications between bankbranches and the Salim Group headquarters location,enabling online, interactive banking transactions (Figure 6).This network is providing high quality data communicationsfor Bank Central Asia. a subsidiary of the Salim Group,throughout Indonesia. Bank Central Asia can now providethe identical high quality data (including E-mail) and voice
IbmIRETNETWORKWANROENENT
CENTRAL HOB FACILITY
FIGURE 4. STAR NETWORK ARCHITECTURE
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FIGURES. MESH NETWORK ARCHITECTURE
RINTIS SEJALVERA/BANK CENTRAL ASIAHEADQUARTERS
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FIGURE 6. THE SALIM GROUP/RANK CENTRAL ASIA
1029
services to 250 branches, independent of location. Inaddition to carrying traffic related to banking applications,the network also supports credit verification for localretailers. The retailers dial the nearest bank branch, and thecredit information is transferred over the VSAT network forverification.
Bank Central Asia is also using HNS' Telephony EarthStation (TEST'') to obtain full-mesh voice services amongnearly 40 regional bank offices. The resulting hybridnetwork allows full-mesh voice and data services between allregional bank offices, and interactive data and voice servicesamong remote hank branches, headquarters, and the regionaloffices.
Globe-MacKay - Data and Telephony Services
Globe-MacKay is providing telecommunications services fora wide variety of organizations within the Philippines. Thehub is at Globe -Mac Kay's facility located in Manila and maybe linked to customer data centers (or headquarters locations)via terrestrial leased lines, satellite, or microwave facilities(Figure 7). The network uses FINS' Personal Earth StationVSATs located at customer branch offices, warehouses, andother remote facilities to provide communications with thehub location.
Globe-MacKay currently has over 100 VSATs installed forapplications including banking, government services, anddisaster recovery. In fact, when Mount Pinatubo erupted onJune 9th, several of HNS' VSATs were pressed into service
FIGURE 7. GLOBE-MACKAY VSAT NETWORK
1030
to aid government relief efforts for local inhabitants andbusinesses. The terminals were used to transmit seismic datato geologists and to relay information used for processing therelief claims of those left homeless. The network alsosupported voice calls during the crisis.
Acumen
Acumen, located in Bangkok, Thailand, uses an HNSPersonal Earth Station VSAT network to offer datacommunications services throughout Thailand. Targetingapplications, including banking and governmenttelecommunications, Acumen is deploying 180 PES VSATsto provide data services for its customers. Acumen also usesan HNS Telephony Earth Station VSAT network to supporttelephony services throughout Thailand. The TES network,which uses capacity from the Palapa B2 satellite, currentlyconsists of 70 remote locations with 170 voice channels.
NN,
FIGURE 8. ACUMEN NETWORK SERVICES
People's Daily
People's Daily, headquartered in Beijing, uses its PESnetwork to communicate with over 30 regional printingoffices throughout the Republic of China. The networksupports the printing of newspapers in remote regionalprinting ,enters, from which they are distributed tosubscribers throughout the local area. People's Daily alsooffers printing services for other publishing organizations.Soon, a number of other organizations will be linked toPeople's Daily's network to enable localized printing of theirpublications. The People's Daily network also supportsinteractive voice as well as broadcast video communications.
The network also supports a return link from the printingoffices to People's Daily, which indicates the status of thetransfer. If a file transfer is unsuccessful, People's Daily willbe notified to resend the document, and the region's newswill still be delivered. In a country where telephoneconnections are not always available, this guaranteed filedelivery capability ensures that the company will be notifiedif the news is not properly transferred.
The return link fmm the printing offices to People's Daily'sheadquarters will soon be carrying regional news from eachregion to People's Daily, assisting the organization withcoverage of local interest stories within China.
FIGURE 9. PEOPLE'S DAILY NETWORK
1031
Conclusion
VSAT networks are assisting users in obtaining high quality,highly available communications links for network sites -especially in those locations without establishedtelecommunications infrastructures. Even in locations withestablished network services, high quality VSAT links can beprovided for costs below those of te. .tstrial networks, especiallyif the need is for higher rate links over large geographic areas.With the further deregulation of telecommunications markets,continued rapid growth of the business infrastructure, andcontinuing government investments in rural communicationsprograms. VSAT networks will increasingly be deployedthroughout the Pacific Rim.
l Ethernet is a registered trademark of Xerox Corporation.
(-)
VSAT in Local Administration Communication Network
.Noda Y .Onda T.KihutaJapan Radio Company (JRC)
Tokyo, Japan
1. ABSTRACT
The Japanese market for Very Small Aperture Terminals (VSAT) is graduallyexpanding after the infrastructure for satellite communications wasestablished by the launches of JASAT-1 and -2 in 1989.This report introduces the nationwide satellite communications system forlocal administration and disaster prevention and outlines the technicalfeatures of the multi-media VSATs.
2. INTRODUCTION
In December, 1991, the Administrative andAnti-Disaster Satellite CommunicationsSystem using VSATs was phased in under theguidance of the Japanese Government. Thissystem will be implemented in phases underthe independent responsibility of eachPrefecture. 7 Prefectures have put about400 VSATs into operation by the end of1992. The VSAT network will link about5000 terminals nationwide in 10 years.The major goals of this network are to:
(1) Construct multi-media administrativecommunications network
(2) Strengthen anti-disaster communica-tions network
(3) Refresh local ares with informationexchange
That is, this is a multi-purpose networkused not only for general administrationbut also for collecting information fromlocal areas by linking up systematicallywith existing anti-disaster administra-tion radio networks.
3. NETWORK CONFIGURATION
3.1 Configuration of Network
Satellite - based Local AdministrationCommunication Network is composed ofSatellite, Central Control Station,Prefectural Office Station that roles Hubstation for this VSAT system, and manyVSATs. Figure 3.1 shows the configurationof the satellite communication network.The main roles and functions are asfollows:
1032
a. Satellite
Ku-band Satellite : Superbird-BTransponder : 2 for communication
1 for TVb. Central Control Station
Located in Yamaguchi for main and inHokkaido for sub.
System ManagementDAMA ControlCharging
c. Prefectural Office Station
Main station of a municipality located inthe administrative center of eachPrefecture.
d.
Network managementCentralized function for VSAT networkOMC
Anti-disaster controlBroad casting (Voice and Facsimile)
- Hot-lineControlled Assignment
- Re-routingCut -off
Analogue/Digital TV Transmission
VSAT
Each VSAT has typical functions of- Broad casting channelVoice/Facsimile channelPacket Data channelAnaiogue TV reception
In addition, mobile stations are providedto relay events, etc.
3.2 Size and Capacity of Earth Station
Table 3.1 shows the Size and capability ofeach earth station in one prefecture. In
this case, Prefectural Office roles as Hubstation. Dam, City, Town, Village and Firedepart -meet station are treated as VSAT.
Ui
Table I Si:. and Capacity of Earth Station
.1d
RISK If 11,0CM MI IWO.
Fig. 3.1 Configuration of tFe satellite communication network
Stetson ".4,.......
Transmission capacity
AnalogTV
AntenPA
output
V4.4f4tMill
,Ideraf4.1.
Packet data DigitalTV
(384kbpsI
Broadcasting
(3,kbpsikbps
12Rkepi%
19 4
(R1I
m1
MD2 1
ITRI4 5rndii 125W 4
125W
RrenchOmce
9 11 1
ITII
iRII
IR1
I 1
(RI2 4mip 15W
Dam
ElantISIon
10 2 1
m1
(R)1
IR)1 8rnip 4W
Citystation
9 2 1
(11I
(RI1:1 I 8rnis 4W
loanstation
18 1 1
(T11
IR/: 1
DO1.8m!. 2W
Villagestation
8 1 1
(Ti (811 I
tit)I 8m0 2W
Firedepartmeat
station
22 1 IM (11
I IIR;
i 8rnip 2W
Satellitemobiiestation
(TI1 I
am1 4rnip 125W
3.3 Services and Quality
The features of this network are multi-media communication in daily base whichcan handle various customers request andbroadcasting/controlled communicationfacilities in disaster or emergency.
Table 3.2 shows the design target for thisnetwork.
Main services are as follows;
1) Voice services
Operated in SCPC -DAMA(Mesh system)
High-quality 32kbps ADPCM with FECHot line in pre-assignedFacsimile (G-3)Dala up to 9.6kbps
BEST COPY AVAILABLE
2) Packet data services
- Star configuration, PrefecturalOffice as Hub station.
- Out bound (Hub- *VSAT)
128kbps X1 TDMInbound (VSAT -.Hub)
32kbpsx4 Slotted ALOHA
3) Broadcasting Services(Voice and Facsimile)
1CH pre-assigned for government toprefectural office.1CH pre-assigned for prefecturaloffice to VSATs.
- Verification for receiptWhole party or Group callingAsking to prefectural office whenVSAT want to do.Voice/Facsimile storage equipment.
4) Analogue TV Services
Half-or Full-transponderFM transmissionNTSC/PCM Audio (Japanese BS Standard)Descrambler/Tuner equipped in eachVSATTV sent from prefectural officestation or mobile station.
5) Digital Video Services
Transmission speed 384kbpsVideo sent from prefectural officestation or mobile station.
6) Facsimile mail services
Store and broadcast to specifiedstations
- CCITT G3 standard.
7) Still-picture transmission services
Uses voice channel
8) Video conferencing services
Transmission speed 64kbps or 384kbps.
Table 3.2 Design Target
Service Target Value
Voice/ FAX BER . 10.5 or lessat Eb/ No = l tB
Packet data Same as above
Analog TV S/N of full transponder:45 dB or more
SIN of half transponder:42 dB or more
AvailabilityVoice / FAXPacket dataAnalogue TV
99.95% per year or more99.90% per year or wore99.90% per year or wore
4. SATELLITE LINK BUDGET
This network is required to be highreliability and high availability fromthat purpose. In other hand VSATs areexpected as small as possible from theeconomic reason.The satellite link is designed consideringthe most of traffic in this network isgenerated between Prefectural Office andVSAT.
Table 4.1 lists the technical data onSuper bird - B satellite used in linkcalculation.
Table 4.2 lists the link calculationbetween VSAT and VSAT (worst case) fordigital circuit.
Table 4.3 lists the technical parametersfor Analog TV transmission.
Figure 4.1 shows the satellite coverage.
Table 4 1 Technical Data on Satellite
Frequency band Ku band 14.0-14.5Glizt 12 25 -12 MHz
Polarization Horizontal (Uplink)Vertical (Downlink)
El RP / GET / SFD Refer to Fig2.2
Inc utloutput backer Digital circuit
Analog TV circuit
TIROTOBOTWOTOBO
2 4 dB5 0 dBS 3 dB2 0 dB
Carrier-to-intermodulationnoise ratio (CIIM)
Digital circuitAnalog TV circuit
18 0 dBo.
Noise allocation Digital circuitThermal noise andintermodulation noiseOthers
Analog TVThermal noise andintermodulation noiseOthers
55%
45%
70%
30%
TIOB Total Input Rackoff TOBO Output Basket
BEST COPY MAW E
Tat, 4 2 Tee/Aural Data on Analog TV Tra emiseion
Item
TV transrni sion system
Fuli transpondertrenrnission
Mitt transpondertransmission
Occupied band o idth 01110 39 0 17 5
Equisalent noise bandwidth (7.111u 300 15 75
Maximum modulation frequency (1611x) 45 45
Maximum frel&ory deviation 0111.P.P1 21 5 13 5
Over deviation WEN 0 60
FM improvernont fertor RIM 23 4 16 7
Emphasis factor (481 70 30
Weighting factor (on) . 112 1 1 2
S/St to CM conversion factor (dill 37 6 30 9
Dispersal (Mlisp-p) 3 0 1 0
Emphasis characteristic eccording to CCIR Rec 405. Curse A.Weighting factor according to CCIR Rec 637.3
Table 4 3 Link Calculation 19SAT.VSAT .32kbpel
Description LindClear
SkyUplinkRain
DownlinkRain
Up Imle VSAT EIRPAntenna pointing Error
dBWdB
3950 3
40.9 390
Free Space (Ass dB 207 0Absorption Logs dB 01Rain Attenuation dB -- 64Satellite Antenna Cain dBi 39 9Satellite Receiving Power dBW .127 7 .133 0 .127 7System Beim Power dBW .1530Uplink C./N dB 253 201 251
Downlink Satellite EIRP dBW 19 6 14.3 19 6Output Back of dB .336 J89 .336Free Space Loss dB 205 9Absorption Loss dB 0 1Rain Attenuation dd13 68Noise Degradation by Rain 27Antenna Pointing Error dB 02VSAT Antenna Cain dBi 44 8VSAT' Receiving Power dBW .1418 .1471 151 3System Noise Power dBW .108 2Downlink ON dB 16 4 I I I 6 9
Total Satellite CfIH dB 180 121 180Total GN .IM dB 138 85 65Total Cfl dB 147 94 147Total C/N 4. IM 4. I dB 112 5.9 59Required CeN 4. IM +1 dB 59Threshold Margin dB 53 00 00
;
(/ y 1 941% -9) 7474,
((((
9 9431K. -97 /414...
7 9.110 -0S 7,(s
5 '63,0 -97 '&4,1
7,134.. -09 'RN:,
S.9 4 I K. Bard 11/T and SF Dint marl/num iv, COntOvt(Veetica Ily POlanz ed Wave)
1 (f1034
5. COMMUNICATION FACILITIES
5.1 VSAT
Figure 5.1 shows ptotograph of typicalVSAT and Figure 5.2 shows the simplifiedelectrical blockdiagram.Specifications for VSAT are as follows:
a. ODU (Out Door Unit)
Antenna 1.8m0 offsetAntenna gain
Transmitting 48.6 dBi or moreReceiving 47.7 dBi or more
Cross polarization 32 dB or morediscriminationFrequency rangeTransmitting 14.00 - 14.50 CHzReceiving 12.25 - 12.75 CHz
Transmission Within±1 kHz/year
b. IDU (In Door Unit)
IF freuency
Modulation
Modulation speedDemodulation
Carrier spacingError correctionCoding rateConstraint L
Error correctiondecodingBase band signalsVoice signalFacsimile
Data
TX 140 MHz +/-36 MHzRX 950 - 1450 MHzAbsolute 4-phasemodulation (QPSK)35k symbols/sec.Synchronousd,tection5u kHzConvolutional code1/27
3-bit soft-decisionViterbi decoding
32kbps ADPCMG3 facsimile signalsat 9.6 kbps trans-mitted in voicesignal bandUp to 9.6 kbps
frequency stability c. Packet Data Transmission FacilitiesSSPA 4W (nominal)
- Outbound: TDMReceiver's Lower than 180 deg.K Inbound: RA (Slotted ALOHA)equivalentnoise
at +25 deg.0 Modulation- Data Speed
QPSK Burst
temperature Out bound 140kbpsIF frequency TX 140 MHz +/- 36 MHz In bound 35kbps
RX 950 - 1450 MHz FEC Convolutional coda1/2Soft-decision
Figure 5.1 a) Antenna/ODU
k
OIM
i.,,
Viterbi decoding
Figure 5.1 b) IDU
TVRO DSCR TV
TELSCPCODU MODEM
61
EXC dpiyPACKETMODEM
FAX
1
BroadcastingMODEM
Fig.5.2 Simplified electrical blockdiagram
101035
DATA
5.2 DAMA
DANA control is performed in nation-widebase by Central Control Station.The DANA scheme uses an algorithm in whicheach subscriber requests a connectionthrough Common Signalling Ch..nnel (CSC).As the electrical parameter between CSCand digital voice channel is same, slave-DAMA for VSAT is equipped on each SCPCboard.
Every SCPC channel is hearing the CSCchannel transmitted from Central :ontrolStatir: and responds to it (Healtn check).Once the assignment comes to certainchannel, then he goes to specifiedfrequency and returns to CSC channel afterfinishing the communication.In this way, channel capacity of VSAT ismade high.
Main parameters as follows:
Outbound : TDM
35kbps Information Rate
Inbound : Slotted-ALOHA35kbps Information Rate
5.3 OMC (Operation Maintenance Center)
OMC is placed in Prefectural Office, andperforms monitoring, controling and statusdata collection for VSAT network.Necessary data from VSAT is collected viaPacket Data channel or Broad-castingchannel.
- Monitor
To monitor the operation status of thesatellite communication facilities,satellite end office equipment, andpacket switching equipment.
To take up the monitoring datacollected by the monitor and controlequipment.
To monitor the volume of traffic onpacket data circuits.
- Control
To give control indications to thesatellite communication equipment andsatellite end office equipment.
Major display items
Block diagram for full systemBlock diagram for station equipmentStation definitionsFrequency allocationCurrent data on monitor itemsAbnormality judgment recordTraffic dataOperation record (Chronological)Logical error record
6. ELECTRICAL CHARACTERISTICS
6.1 Antenna
Antenna used in VSAT is a type of offsetparabola in order to obtain high-gain,low - sidelobe characteristics and ease ofinstallation.
In northern area in Japan, De-icingdetector and heater are attached to theantenna.
Antenna noise temperature is shown inFigure 6.1 and typical sidelobe pattern inFigure 6.2.
SO
.S -
0
o tt 20
(err,e1
F.) 6 1 Antenna nose temperature
c
gilqin Li Si,-.
- 3. s ussrn 1.
rq 67 T M I odek.,
6.2 ODU (Out Dt.,v Unit)
ODU includes primary horn, orthomodecoupler, filters, solid state amplifier(SSPA), low noise amplifier, synthesizeddual-converter and is housed in a water-proof cannon bullet.Figure 6.3 shows electrical blockdiagramof ODU.
Figure 6.4 shows photograph of ODU.Figure 6.5 shows Frequency Response ofODU.
Figure 6.6 shows Input/Outputcharacteristics of ODU.
1036 "
IAOMNrTX SIG HELOCAL REF IN
IGNERE SIG OUT, "4LOCAL REF. IN NJ
TempSensor
LOCAL
IFA LNA
Fig.6.3 ODU electrical blockdiagram
Figure 6.4 VSAT ODU
140M15 ZRX IN
SCPC MODEM
140MH zRX IN
140MHTX OUT
PACKET MODEM
Co
SYNTH
FG
n/2
7 240
200
a.)aE 160
toN6 120
Gain [dB]
Noise Temperature [k]
68
64 .s
60
56
I I I 5280 12.24 12.36 12.48 12.6 12.72Frequency [MHz]
Fig6.5 Frequency Response of ODU (RX)
40m
36
321
28
O
24
20 -34
DCR
-30 -26 -22 -18 - 4Input Level (dBm]
Fig6.6 Input/Output Characteristics of ODU
REH E/C D/A
FG :FREQUENCY GENERATORUW :UNIQUE WORD DETECTSCR :SCRAMBLEROCR :DESCRANBL ERE/C :ECHO CANCELER
ADPCM E/C
Figure6 7 Detail of SCPC Modem
LSI FEC
UW OCR
FG R QUENCY GENERATORUW -UN QUE WORD DETECTSCR :SCRAMBLEROCR .DE CRANE LERNAM :NETWORK ACCESS MODULE
UW SCR
NAM
TEL IN
COM
TCON
TEL OUT
-I BSC
Figure6 9 Detail el PACKET Transmission MODEM
10370 :1,x
HCiLC
6.3 IDU (In Door Unit)
Typical IDU for VSAT is composed ofHybrid/combiner, SCPC Modems, PacketTransimission Modems, Broadcasting Modems.TV tuner with Descrambler, Link Re-routingEquipment and others.The key devices, SCPC Modem and Packettransmission Modem are described in detailbelow.
(1) SCPC ModemSCPC modem is composed 3 PC boards,modulator, demodulator and interfaceboard. Modulator includes channelsynthesizer for 2 transponder,authogonal modulator, digital filter,signal processor and others.Demodulator includes similar functionswith modulator.Interface includes Unique Word/CarrierDetector, 32 kbps ADPCM in which C3Facsimile can be handled, EchoCancellor and others.Fig 6.7 shows the electricalblockdiagram of SCPC Moedm.Fig 6.8 shows input C/N versus BitError Rate characteristics.
10-2
a
a:0 0-4
w
10-
rTheory Experiment
I 1 15 10
Eb/NO [dB]Fig 6.8 Bit Error Rate Characteristics
Figure 7.1 75 cm USAT
(2) Packet Transmission ModemThe difference between SCPC Modem andPacket Transmission Modem is verysmall, ex i.SI high speed demodulatorfor 128 kbps Outbound TDM and base-band processor for slotted ALOHA32kbps Inbound modulator.Packetize and De-packetize is per-formed in Network Access Module.Figure 6.9 shows the electricalblockdiagram of Packet TransmissonModem.
7. CONCLUSION
In addition to the JCSAT1 and JCSAT2commercial satellite launched in 1989,Japan launched Super Bird-B in February1992.
She further plans to launch and Super Bird-A in December 1992. Satellite Japan andNTT plan to launch NSTAR in 1994 to 1995.As mentioned in this paper, Japan has juststarted to develop VSAT systems underfederal initiative.
Since the licensing standards of theMinistry of Posts and Telecommunicationswere relaxed for VSATs, the regulations forthe following points are significantlyrelaxed in the VSAT technical compatibilitytest system:
Antenna gain less than 50 dBiOutput of less than 10 wattsServices of less than 3.3 Mbps
From the viewpoint of hardware, full-menumedia conceivable today are prepared.The remaining problems are miniaturizationof VSATs, etc.Recently Ultra Small Aperture Terminal(USAT) which has 75cm antenna is developedand used in another system, as shown inFigure 6.1.
Whether or not the VSAT market expands inJapan depends on the progress ofapplication software development, thereforeboth government and private developers arestudying this carefully.
Finally, I would like to thank you all,both institutes and personnel, that havegiven me the opportunity for thispresentation.
References
1. JAPAN LOCAL AUTHORITIES SATELLITECOMMUNICATIONS ORGANIZATION"BASIC DESIGN OF TOTAL SYSTEM FOR LOCALSATELLITE COMMUNICATIONS"
Issued August 1991
1038-:
Television in Papua New Guinea:Policies and Practice
Amos Owenares ThomasUniversity of TasmaniaLaunceston, Australia
ABSTRACT
This paper traces the development of broadcasting policy and theevents leading up to the introduction of commercial television inPapua New Guinea. Content analysis of programming will be used asthe basis for comparison between policy and practice, and for adiscussion of its social impact on its citizens. Alternative models oftel. .rision broadcasting adopted by other developing countries will becited briefly in analysing policy options for broadcasting decision-makers.
1. INTRODUCTION
Television was introduced into Papua New Guineain an uneventful incremental fashion thatcircumvented the law and pre-empted policy-making. Neighbourhood sharing of satelliteequipment led to commercial cable operations inthe early 1980s which remain unregulated today.The application for licenses to operate commercialbroadcast television led to a parliamentary attemptto ban or at least postpone its introduction, but thiswas over-ruled by the judiciary. Of the twocommercial stations that entered th , market, onlyone survives today However its programmingpractices do not reflect the broadcasting policies ofthe PNG government, as encapsulated in thereports of its commissions of inquiry on television.
2. COUNTRY BACKGROUND
2.1 Geography
Papua New Guinea (PNG) lies between the north ofAustralia and the equator. To its west is Indonesiaand to its east is the island-dotted Pacific Ocean.PNG comprises the eastern half of the island ofNew Guinea, the world's second largest, and anumber of smaller islands. The mainland makesup 85% of its territory. The total population of thecountry is estimated to be 2.5 million.
The geography of PNG explains some of its culturaldiversity and limited socio-economic development.The central spine of the mainland is amountainous region, the Highlands, with peaksover 4,000 metres. The terrain restrictedmovement and resulted in the existence of over700 distinct language groups, many still retainingtheir traditional animosity or, at least, mistrust.
1039
2.2 Modern history
In the late 19th centuury, the British colonised thesouth-eastern quarter of the island, known asPapua, the Germans the north-eastern quarter,known as New Guinea, and the Dutch the westernhalf, known as West Irian. In the First World War,the German territory was captured by theAustralians, which in turn lost it to the Japanese inthe Second. After that War, both Papua and NewGuinea were administered as a joint territory byAustralia under a UN trusteeship (Hoadley, 1992).
A UN visiting mission in 1962 was critical of thelack of progress towards self-government in PNGand this resulted in the formation of an assemblyand political parties. This led eventually toindependence in 1975, though continuing to havethe Queen of England as head of state. A year afterindependence, as a concession to regional rivalriesand successionist movements, the constitution wasamended to provide for 19 provincialgovernments. Due to the multiplicity of politicalparties in unstable coalitions, PNG has seen rapidchanges of government, though power seems to berotated among the same group of four men.
2.3 Economy
Approximately half of the the population aged 10years and above are involved in farming andfishing, and only 10% have a wage-earning job.The average per capita income is US$520. Still,agriculture, fishery and forestry resources arerelatively untapped (Census, 1980).
Though the world's largest copper mine in theprovince of Bouganville is closed due to asuccessionist rebellion, discoveries of gold, silverand oil made in the late 1980s and are beginning tocome on-stream. PNG is expected to be the 6thlargest gold-producing nation in the world.
0
According to World Bank estimates, governmentrevenues from minerals will rise to US$751million by 1993. Thus in comparison to otherdeveloping nations, PNG has great potential fordevelopment. But it must overcome a growingbreakdown of law-and-order due in part to thegrowing disparity between the urban 'haves' andthe rural 'have-nots'.
2.4 Media
The mass media of PNG comprises 3 newspapers, 2national radio networks, a number of regionalradio services and one commercial televisionstation. Only one newspaper, the Post-Courier, is adaily, published on weekdays and in English.With a circulation of 39,000 and a pass-on rateaveraging 5.5, t has a readership of 215,000 or lessthan 10% of tl e population. The two other papersare weeklies, one published in English and theother in Pidgin.
The two national radio networks are both owned bythe government and run by its NationalBroadcasting Corporation. One is Radio Karai, thepublic service which does not accept advertising,and the other Radio Ka lang, an FM station run as acommercial station. According to NBC marketingmaterials its potential listenership is estimated at1.5 million or 83% of the population of the semi-urban areas.
Television is the most recent entrant to the mediascene. EMTV is the sole survivor of two stationthat entered PNG in 1987. It is transmitted bymicrowave to urban centres, mostly around theprovincial capitals where electricity is available.There are plans to expand TV reception to n. :alareas via satellite transmission (Post-Courier, 1990).Proprietary market research estimates the potentialviewership of EMTV at 300,000 (Taylor, 1990).
3. COMMISSIONS OF INQUIRY
Various commissions of inquiry were covenedfrom as early as the 1960s in anticipation of theintroduction of television. These commissionsenvisaged the establishment of a broadcastingtribunal, comprehensive legislation, a publicbroadcasting / educational channel, and PNG-majority owned commercial stations.
3.1 The 1966 Inquiry
Although the terms of this commission inclu.'edmass communication and entertainment, itsprimary focus was on television as an educationalmedium (Broadbent, 1966). It saw television as ameans of supplementing teaching in primary andsecondary schools, especially given the teachershortage and inadequate facilities. Health
1040
education was also given priority, particularlypreventative medicine such as child-care andsanitation.
In the view of the then colonial administration anadditional category of extra-mural and enrichmenteducation needed to be emphasised. Its aims wereto overcome any cargo-cult mentality, illiteracy,political ignorance and lack of craft skills. The 1966commission perceived as important thecounteracting of the offerings of commercialcinema.
The commission did not look into appropriatelegislation as it was informed that the actsgovLrning Australian broadcasting would apply tothis territory, as it was then. But the commissiondid recommend the establishment of a singleterritory-based television authority overseeingbroadcasting, with input on programming from thedepartments of education, health and agriculture.
3.2 The 1978 Advisory Committee
Recognising that television would be just one ofmany media used for public communication, thiscommittee recommended the establishment of amedia development council. Its aims would be toco-ordinate private and government bodies in themore integrated use of television in attainingnational development objectives. It would do solargely through the telecasting of national /provincial extension activities, communitydevelopment programs and formal/non-formaleducation.
The committee saw the existing radio-basedNational Broadcasting Corporation (NBC) as thesole provider of a national television service. Italso recommended satellite systems as the bestmeans of providing a truly nation-wide service. Iturged the government to ensure that the majorityof programmes are locally produced and thatimported programmes are appropriate to PNGsociety, without being culturally isolationist (TVAdvisory Committee, 1978).
3.3 The 1987 Board of Inquiry
The Kalo inquiry of 1987 was convened soon afterthe government's abortive attempt to prohibitcommercial television stations from gaininglicenses. Its extensive terms of referenceincorporated legislation, ownership, licensing,programming and advertising. This commissionnoted the inadequacies of existing legislation andthe need for comprehensive new legic1A.tion to takeinto account both the new technology and thelikely participation of commercial operators. Abroadcast tribunal was suggested as a body forlicensing ownership, including that of cablenetworks, and for controlling programming.
Strong emphasis was placed on the preservation ofPNG's multi-cultures through their reflection inthe broadcast media. Nothing was mentionedspecifically about restricting for gn programmes,though. The television medium was anticipated toplay a large educational role both in disciplinessuch as agriculture and health, and in thedevelopment of balanced programmes in news,religion and sports. It is the policy recommend-ations of this last inquiry which will be comparedwith the actual practice of commercial televisionbroadcasting in PNG.
4. ARRIVAL OF COMMERCIAL TELEVISION
4.1 Unregulated systems
Prior to the establishment of local commercialtelevision networks, urban areas in PNG had accessto foreign television via subscriber clubs usingillegal satellite dishes and cable systems, whichproliferated due to the lack of legislation to governthem. In one remote capital alone, there were 13clubs and their subscribers had a choice ofAustralian Broadcasting Corporation, AmericanArmed Forces, Malaysian TV as well as 2 videochannels (Ka lo, 1986).
4.2 Early negotiations
As early as 1984, NBN of Australia lodged a formalapplication with the PNG Post andTelecommunications Corporation (PTC), whichsought guidance from the National BroadcastingCorporation, which agreed to the application. PTCthen sought policy direction from the NationalExecutive Council of the government, whichconvened inter-department committee to makerecommendations. However, the NEC rejectedthose recommendations for the setting up of atribunal and formed instead a state negotiatingteam for the introduction of commercial television(Ka lo, 1987).
Under the direction of the government, PTC issuedlicenses in December 1984 to Niugini TelevisionNetwork (NTN), 90% Australian-owned and asubsidiary NBN. In 1985, Media Niugini, 50%owned by Publishing & Broadcasting Ltd (PBL),later Bond Media, made a submission to thegovernment (Stewart, 1991). Media Niugini hadbeen a Port Moresby-based video operation since1984 and was seeking to extend its 'marketplacetelevision' to Lae, Goroka and Mount Hagen, thelarger provincial capitals on the mainland (Maddenand White, 1987).
4.3 Regulation debacle
In November 1985, the government of MichaelSomare was replaced by one led by Paius Wingti.When the new government reaffirmed that it
1041
would honour the agreement with NTN, PTCissued new licenses to both NTN and MediaNiugini in March 1986. But in July the PrimeMinister requested NTN not to commencebroadcasting as scheduled the same month, theRadiocommunication Act was amended to prohibitTV broadcasting and a board of iniquiry convened(Ka lo, 1987).
In August 1986, after NTN mounted a courtchallenge to the prohibition of television, thegovernment passed new legislation, the Television(Control and Prohibition) Act which sought todelay the introduction of television to 31 January1988. However, the Supreme Court ruled in favourof NTN and the latter began broadcasting inJanuary 1987, followed by Media Niugini's EMTVin August the same year.
The commission of inquiry reported its findings inJanuary 1987, too late to influence policy or practiceof television broadcasting. NTN ceasedbroadcasting in February 1988, due to the financialproblems of its corporate parent. EMTV continuesas the sole broadcaster and its programming isanalysed in this paper in comparison to the 1987commission's iniquiry's recommendations.
5. ANALYSIS OF PROGRAMMING
5.1 Channels and hours
Citing the dangers of a monopoly in televisionbroadcasting and the necessity of a public service,the commission recommended that twocommercial channels be introduced from the start,followed as soon as practicable by a publicbroadcasting channel. In its opinion, no morecommercial channels should be licensed till thatpublic channel was firmly established. Aware ofthe temptation for commercial broadcasters to usecheap imported material for more expensive localproductions, the commission recommended thatthey be limited to 5 hours programming per day,presumably per channel. It recommended furtherthat ownership of the stations by non-PNGinterests not exceed 49% and that the majority ofsenior management be Papua New Guineans (Ka lo,1987).
With NTN ceasing to broadcast in February 1988,after just over a year's operations, EMTV remainsthe sole television broadcaster. No publicbroadcasting service has been set up, nor evenseriously proposed. The NBC continues to operatesolely as a radio service and faces financialconstraints in maintaining that alone. Nobroadcasting tribunal was ever set up despiteconsistent recommendations to that effect by thevarious commissions of inquiry. EMTV hasmoved subtly to position itself as the nationaltelevision service, through the nomenclature of itsprogrammes and lyrics of its signature tune. EMTV
10
broadcasts an average of 60 hours per week, usuallyfrom 3:00pm to 11:30pm (8.5 hours) daily, which isapproximately 42% more than the commissionenvisaged. The senior management of EMTV hasbeen totally expatriate, a situation explained bythem as the lack of local television expertise.
5.2 Programmes by category
All inquiries into broadcasting in PNG haveemphasised cultural and educational purposes towhich the television medium ought to put. The1987 commission specifically mentioneddocumentaries relevant to PNG cultural,commercial, agricultural, health and religiousneeds. It urged the Education Department andtertiary education institutions to produceeducational programmes, either on their own or inconjunction with broadcasters.
Analysis of a week's programming from each of 6months over the period 1990-91, reveals a situationquite opposite to that recommended by thecommission (Table 1). The highest proportion ofprogrammes were situation comedies and soapoperas, totalling 21.5% of programming. Crime andwesterns comprise the second highest category at20.8% of total programming and are a controversialissue, given the law-and-order problems of thecountry.
Children's shows and cartoons come next at 15.8%,though it must be conceded that the 11.4 hours ofthis category includes 5 hours of Sesame Streetwhich may be classified as 'educational'. But itshould also be mentioned that much of theremaining children's programmes are of a highlycommercial nature. Movies, averaging four innumber per week, and the periodic drama mini-series add up to 14.7%, while musical shows, gameshows and other light entertainment are anaddtional 3.0%. While sports programmes aresurprisingly low for a sports-loving country at 3.8%,they are a regular and extended feature in newsprogrammes.
By contrast, programmes of a non-entertainmentcharacter occupy a much smaller proportion ofprogramming. News and news magazine-styleprogrammes head the list at 14.0%, but aregenerally not of an indepth or investigative nature.Educational and documentary programmesamount to only 2.5% of total programming, or anaverage of 1.5 hours per week, a quite differentscenario to that proposed by the policy-makers.
With me possible exception of two programmes,EMTV has not addressed the educational needs ofPNG. The first is 'Tingim Holt', a public healthprogramme produced by a governmentdepartment, and aired at a late hour such as11:00prr. when it is watched by about 28% of the
potential audience (Taylor, 1990). The other was'Yumi', billed as PNG's first locally-produceddrama though not produced by EMTV itself but bythe local Lutheran church. It dealt with socialissues with a moral undertone and was aired atprime-time, though it was on for only a limitedseason.
Religious programming constitutes 1.0% ofprogramming, and that only because a BillyGraham crusade elsewhere was being shown livein November during one of the weeks researched.This is a particularly significant anomaly in PNGwhere over 95% of the population would considerthemselves Christian and the constitutionproclaims the nation to be a Christian one. In aspecific section on religion, the 1987 commissionrecommended that the broadcasting tribunal giveadequate emphasis to religious programming. Butin 1990-91, religious broadcasting was confined to a3-minute epilogue at closing time each night,which failed to register in the research count. In itsdefence, the management of EMTV claim to haveoffered air-time gratis, but that the churches havebeen reluctant to undertake their own production(Taylor, 1990).
5.3 Programming by country-of-origin
As might be expected of most countries, especially adeveloping and English-speaking one, the USAheads the list as the source of over half of allprogrammes (Table 2). Almost all of thecrime/western programmes, and movies/ dramamini-series, as well as the majority of children'sprogrammes/cartoons and soap operas/sitcoms areof US origin. They are often of at least a decade'svintage and thus of quite minimal cost. Thedomination by US-exported programes ofprogramming worldwide is well documented andanalysed (Hoskins and Mirus, 1988; Mattelart, 1983).
Australia, as PNG's nearest developed-nationneighbour, former colonial ruler and country ofpermanent residence of most broadcast executivesand expatriate viewers, features quite naturally asthe runner-up. But at 25.0% it adds up to less thanhalf of the US share. Britain is an even moredistant third at 3.2%. The classification'international' refers to programmes which are amontage of clips from various countries includingthe US, Autralia and Britain, and/or fromcountries other than those in the categories above.It amounts to only 2.6%, the smallest proportion,and it should be noted that it does not includeprogramming from any other developing, non-western country. Although there is a growingcultural industry in Latin America which isexporting programming to other Spanish-speakingregions (Sinclair, 1991), no equivalent trend isevident among English-speaking countries.
1044_ r;
TABLE 1: EMTV PROGRAMMING BY PROGRAM CATEGORY, 1990/91
Program category Aug Sep Oct Nov Jan Feb Ave. hrsj^er week
Sit Com/Soap 11.0 11.0 14.0 14.5 14.0 14.0 1 i. 1'Crime/Western 14.0 12.0 13.0 13.5 14.0 9.5 1 2 . iChildren/Cartoons 12.5 13.5 12.0 8.5 11.0 11.0 11.4Movie Drama,etc 8.5 11.0 9.0 6.5 7.5 11.0 8 . 9News/Magazine 7.0 4.0 10.0 6.5 10.0 13.5 3.5Sorts 3.0 4.0 3.5 0.5 0.5 2.5 2.3
m II ..1_cag,kgjsagig, 1 2.1 2 S 2.0 1,0 ._2.5 1Dps,unglgualug 2. OIS 1.1 1 0 1. 1 1.5
0.0Religion 0.0 0.0 3.5 0.0 0.0 0 . 6Total3 59.5 59.5 64.5 56.5 59.5 65.5 60.8
TABLE 2: EMTV PROGRAMMING BY COUNTRY-OF ORIGIN, 1990/91
Country of origin Aug Sep Oct Nov Jan Feb
29.5
Ave. hrsLper week
3 2 . 9USA 39.0 35.5 30.0 33.0 1 30.5Australia 7.5 9.0 24.5 13.5 1 14.5 21.0
0.0r1 5 .0
1.9Britain 2.5 3.5 2.0 0.0 3.5International 1.0 2.0 0.0 2.5 1.0 3.0' 1 : 6Papua New Guinea 9.5 9.5 3.0 7.5 10.0 12.0 9 . 4Totals 59.5 59.5 64.5 56.5 59.5 035.5 60.8
Ostensibly, programmes of PNG origin are asignificant proportion at 15.5% for a developingcountry. However, the figures are deceptive on 2counts. Firstly, although programmes such asnews, sports, children and music are producedlocally, they are collations of both local and foreignmaterial, the latter usually far exceeding the formerwhich may be simply the use of local anchorpersons. Secondly, many programmes of localorigin are repeated frequently unlike those offoreign origin, thus misrepresenting its proportionof total programming (Stewart, 1991).
5.4 Social impact
The 1987 commission raised concerns about theerosion of PNG's rich cultural traditions byunregulated television broadcasting. No formalresearch on its social impact has been carried out.However, research on viewership conducted forEMTV in 1989 indicates that approximately 60% ofhomes having television have it on between7:00pm and 10pm, with approximately 40% in the 2hours preceeding and 1 hour following thisextended prime-time (Taylor, 1990). Given thehigh proportion of foreign, particularly U.S.,programming depicting western lifestyles (movies,sitcoms and soap operas) and violence (crime,westerns) all of which enjoy viewership rates inthe high 60% bracket, one might reasonably inferthat there is some significant effect. One of thedifficulties of social impact research in separatingthe effect of television from that of other economicdevelopment. It would be reasonable to suggestthat television is at least a partial cause of PNG'ssocial problems such as the decline of traditionalsocial control mechanisms, urban drift andconsequent unemployment, and crime.
A special concern of the 1987 commission was ofthe amount of violence then on the illegal cablesystems and pre-recorded videotapes, andanticipated to be on broadcast television. Whileacknowledging that depiction of violence may havea legitimate place in dramatic productions, thecommission was persuaded of the New ZealandRoyal Commission on Broadcasting findings ofcommunity perception of a link between televisionportrayal of violence and the incidence of violencein society, despite the equivocal findings of formalsocial research (Ka lo, 1987).
Anecdoctal evidence from both expatriates andnationals, as %yell as content analysis of newspapersindicates a significant rise of the incidence of crimefrom the mid-1980s, coinciding approximately withthe introduction of private cable systems.Managements of the two television stationscounter that impression by stating that televis:onhas actually reduced the incidence of crime Ixkeeping people off the streets at night (Stewart,1991). One senior executive suggested to this
author that Papua New Guineans have apredilection for 'action' programmes, but are ableto discern make-believe and exagerration in violentprogrammes. In the light of increasing criticism ofits violent programmes in a society in which therehas been a tradition of violent confrontationbetween tribes, the commercial stations appeardetermined to defend their highest-rating andprofitable programmes.
6. ALTERNATIVE MODELS
Papua New Guinea is a relative latecomer totelevision broadcasting and might have benefittedfrom the experience of other developing countries,especially those of the Asia-Pacific region. Thissection seeks to survey the historical developmentof television broadcasting in a select group ofcountries which may have relevance to PNG.
6.1 American Samoa
Television was introduced in American Samoa in1964, the first of the Pacific islands to have theservice for the ambitious purpose of upgradingschool-level education to the standard of the U.S.Conflicts between state governors and theeducational broadcasters over the next decaderesulted in the dramatic scaling down of theproject.
A secondary agenda was the provision ofinformation on health, agriculture, news andchildren's entertainment through broadcasting tohomes after school hours. Conceived initially as agovernment funded station it initially broadcastprimarily PBS programmes, then began purchasingprogrammes from US commercial networks(complete with US advertising) and grew to 6channels before being cut back to 3. In 1978-79,only 14 hours of programming per week were oflocal origin compared with 174 hours imported(Schramm el al, 1981). With the decline ofeducational television, entertainment came topredominate American Samoa television.
In 1977 a study conducted 5 years earlier on culturalvalues was replicated and it found that AmericanSamoa teenagers had become more westernised inthat period. They were also found to be morewesternised than Western Samoan teenagersresearched concurrently in 1977, who hadexperienced a much lower exposure to television.A similar result would probably be obtained if theresearch were to be conducted in PNG periodicallysince the introduction of television. Quite simply,the American Samoan experience is one that thePNG policy-makers may not have wished toemulate, but aye done so by policy default. Incontrast to American Samoa, television in PNGbegan as a commercial operation with only a tokencommittment to educational objectives. This
1044-i_
ought to have signalled the policy-makers thattheir educational objectives were even less likely tobe fulfilled than American Samoa's.
6.2 Indonesia
In 1976 government-sponsored satellite televisionwas introduced in Indonesia in a controlled fashionto support its developmental goals in education,health, agriculture and family planning amongothers. Despite the fact that most programmingwas local and was largely informational in nature,Chu et al (1991) report that television viewing waspopular. Television appeared to have hadsignificant effects in promoting the consumption ofadvertised goods, adoption of new agriculturalmethods, use of health services, practice of familyplanning and learning of the national language.
Introduction of satellite television in Indonesia wasclosely associated with the implementation ofnumerous development projects, and it is thereforenot clear what the effects of television areindependent of other stimuli. While PNG policy-makers have stated the need for television tosupport national development objectives, noeconomic blue-print of how this might beaccomplished was produced. Though it is of animmensely larger size and better resourced,Indonesia's approach to the provision of televisionacross its widely spread island provinces may beinstructive to Pacific island nations collectively.
6.3 Chile
Although it may seem an unusual choice of amodel, Chile is a developing country on the PacificRim and brings a unique perspective with a LatinAmerican flavour. Historically, television stationsin the country have had an association withuniversities because of early trials of thetechnology. Through legislation, stationscontinued to be neither commercially orgovernment controlled, had a mandate to offervaried programming including both education andentertainment, and were free to compete with oneanother. Regulation of broadcasting was by a 5-tiersystem in which the government, universities, thechurch and television industry were represented.The Pinochet regime trimmed down theserepresentatives bodies, filled them with politicalappointments and paved the way, not forgovernment propaganda so much as unfetteredcommercialism: entertainment programmingincreased while informational programmingdecreased (Fuenzalida, 1988).
Universities and schools in PNG have long beenconsidered by the various commissions of inquiryto be likely major players in the provision and useof educational broadcasting, though not of generalprogramming. Though one of the two universities
1045
has journalism and drama schools and the otherengineering departments, neither have shownstrong interest in developing an alternative tocommercial broadcasting, nor has the governmentbeen encouraging with financial grants. The otherlesson from Chile would be that governments withan interventionist broadcasting policy will notnecessarily promote informational programming.They may collude with commercial broadcasters topromote programming which merely entertains asa means of discouraging political fervour. Theoptimal solution is that of a plural andindependent tribunal overseeing the regulation ofall television broadcasting.
7. CONCLUSION
This paper has chronicled the introduction oftelevision into a developing nation in the Pacific.More specifically, the PNG experience illustratesthe divergent agendas of multinational providersof commercial television and government policy-makers on broadcasting, and the dominance of theformer when the latter are unprepared or lackingthe political will, despite numerous commissionsof inquiry or consultations, as often is the case withsmaller developing countries. The paper has alsolooked at some other models of televisionbroadcasting which have attained a more equitablebalance, even a convergence, between commercialand national agendas.
Developing countries face a dilemma inintroducing TV broadcasting. The cost of providingpublicly-funded TV broadcasting to their citizens isprohibitive. Also, the local expertise is lacking andlocally produced programmes do not draw theviewerhip needed to attract advertising revenue.Yet if governments allow commercial stations tooperate they lose control over programming.Commercial TV stations lobby against governmentregulation of programming arguing that it wouldaffect their profitability and continued operation.Though often this is done indirectly by presentingthemselves as defenders of the freedom ofexpression and information.
UNESCO addressed these issues in its Mac BrideCommission (1980) report which recommendedthat developing countries establish and developtheir own broadcast systems, including training andproduction facilities. It added that nationalproduction of broadcast materials is crucial toreducing over-dependency on external sources.Since many developing countries are not in aposition financially to do so, an effectivepartnership with multinational commercialbroadcasters may be the solution for achievingfinancially viability and development goals.
The extent to which governments can regulate isbeing further eroded by the advent of newtechnologies, particularly satellite and cablesystems, which permit transborder broadcastingwith impunity. Quite evidently, the political-legalstructures of developing nation-states do lag behindthe technological prowess and economic power ofmultinational broadcasters. Perhaps a betterbalance in negotiations and collaboration betweencommercial broadcasters and governments could beachieved through smaller nations, such as thePacific islands, grouping to formulate regionaltelevision broadcasting policies.
References
Broadbent, Derek (ed.), Report of the Commissionof Inquiry into television in the Territory of Papuaand New Guinea Port Moresby, 1966.
Chu, Godwin, Alfian and Wilbur Schramm, Socialimpact of satellite television in rural Indonesia.Singapore: Asian Mass Communications Researchand Information Centre, 1991.
Hoadley, Steve, The South Pacific Foreign AffairsHandbook Sydney: Allen & Unwin, 1992.
Hoskins, Colin and Rolf Mirus, 'Reasons for the USdominance of the international trade in televisionprogrammes', Media, Culture and Society Van(1988).
Ka lo, Kwamala (ed.), Report of the Board of Inquiryinto broadcasting (including television in PapuaNew Guinea, Port Moresby, 1987.
Mac Bride, Sean (ed.), Many voices, one world:report of the international commission for thestudy of communications problems. Paris:Unesco,1980.
Madden, Julia and Stewart White, 'Theintroduction of television services in Papua NewGuinea and other Pacific countries', Media Law andPractice, July 1987.
Mattelart, Armand, Transnationals and the ThirdWorld: the struggle for culture, Massachusetts:Bergin & Garvey Publishers, 1983.
Schram, Wilbur, Lyle M. Nelson and Mere Betham,Bold experiment: the story of educationaltelevision in American Samoa, Stanford: StanfordUniversity Press, 1981.
Sinclair, John, 'The decentering of culturalimperialism: Televisa-ion and Globo-ization in theLatin world'. Paper presented to the symposium,'Globalisation and Culture', University ofTechnology Sydney, August 1991.
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Stewart, Juliane, 'Corporate television strategies inPapua New Guinea', Pacific TelecommunicationsProject Working Paper No. 2, Toowoomba:University of Southern Queensland, 1991.
Report of the TV Advisory Committee to theMinister for Media. Fort Moresby, Papua NewGuinea, 1978.
WEDNESDAY, January 20, 1993
Afternoon Plenary
NOTES
10
GLOBAL TELECOMMUNICATIONS DEVELOPMENT
MARKET FORCES OR MULTI-LATERAL PLANNING?
Chris C VonwillerAustralian Overseas Telecommunications Corporation Limited
Sydney, Australia
1. ABSTRACT
The Maitland Commission in 1984 formulated recommendations for the development ofglobal telecommunications, including multi-lateral initiatives. This paperreviews progress since the Commission's report and contrasts some of the planningassumptions for telecommunications services in developed countries against thosemore appropriate in developing nations.
Eight years have now passed since therelease of the Report of the IndependentCommission for World WideTelecommunications Development, and thisConference seems an ideal opportunity totake stock of what has been achieved, andwhat experience has taught us, in thecourse of those eight years.
The issues that Sir Donald Maitland and hisdistinguished Commission raised in "TheMissing Link" are not only still relevantin 1992, but perhaps even more urgent andpressing than they were then.
Ths Maitland Report forms the context -rather than the agenda of my contributionto this forum. What I would like to do isto foe_ Ad some of the Commission's lines ofthought, and avenues of inquiry, to posesome questions about the role of globaltelecommunications in the world today.
That path will require some questioning,not only of the specific recommendationsmade by Sif Donald and his fellowCommissioners, but of a couple of theassumptions that underlie "The MissingLink"
Eight years' hindsight may show thattelecommunications has developed just asquitkly under a regime of laissez faire andmarket influences as it might have underthe multilateral overlay proposed by theMaitland Commission.
I will also argue that the unevendistribution of telephones around the worldmay not create quite so glaring a disparityas the simple ratio of telephones topopulations seems to indicate, if thedifferences in social organisation thatexist in different parts of the world isfactored into the statistics.
My third theme is really a corollary of thelast. Even in countries with a hightelephone penetration rate, there may notbe even distribution of services. It mayalso be argued that the current trendtowards competitive service provision inmature markets, such as has recently beenlegislated in Australia, can potentiallycreate new disparities in access toservices.
Finally and here I depart from theMaitland agenda - it seems to me that theevolution of technology has created thepotential for solutions that couldeffectively jump the gap between theinformation-rich and information-poor.Certain advanced applications now beingtrialed, in Australia and elsewhere, maymake the notion of telephones per person anobsolete means of measuring access totelecommunications.
At the same time, solutions that have beendeveloped for the high end of the businessmarket in mature networks may create short-cuts that can be adapted to provide lower-cost solutions in places where access iscurrently very limited.
My illustrations for these arguments willcome, naturally enough, from certainexperiences that Telecom Australia and OTC,respectively Australia's traditionaldomestic and international carriers, havebeen through, notably in providingtelecommunications to rural and remoteAustralia, and to Indo-China and thePacific Islands.
Several years ago, a seniortelecommunications official from adeveloping nation visited Australia. Wepresented him with an overview ofAustralia's telecommunications regime, andenjoyed a mutually profitable discussion ofthe differences between our two countries'systems.
We inquired of him when he thought hiscountry would reach the stage of having atelephone in every household. His responsewas instructive. Why," he asked, "wouldevery household want a telephone? One inevery village, maybe."
That answer made us realise how blinkeredour view was. Most industrialised nationsare characterised by a highly mobilepopulations, with families and interestgroups often separated from each other byconsiderable distances, either permanentlyor for frequent short intervals. Ourmarkets tend to be centralised, andbusiness operates across a wide range ofsites, both domestic and offshore.
10491.)
Both of these features have driven our needfor individual rather than collectivecommunications, and they are still drivingthe way technologies are developing. PCNtechnology will take this tendency to itslogical end.
But in a nation whose population is stilloverwhelmingly rural, where generationshave remained and still remain within thesame relatively small geographic area,where local, decentralised markets carrythe bulk of commerce, the idea ofindividual telephone access is a nonsense.
To put it another way, the fashionable ideaof "appropriate technologies" should notjust refer to the technical nature of thenetwork infrastructure, but moreimportantly - to the social and economicneeds that the network will be required tosupport which are more various than many ofus in the information-dependent countriesare often prepared to recognise.
In Australia - which is at once one of themost urbanised countries in the world, andat the same time characterised by a vastand sparsely populated land mass, withwidely divergent climates and terrains -the challenge of providing universaltelecommunications services has recentlybeen met.
Telecom's Australia's Rural and Remote AreaProgramme (RRAP) began in 1984, with threeobjectives: (1) to convert the last 26,000manual services in Australia to automatic;(2) to replace over 10,000 privatelyerected lines with Telecom provided andmaintained automatic services; and (3) toprovide 7,700 new services in areas notpreviously serviced.
In June 1992, the RRAP was successfullyfinalised, at a cost in 1989/90 of $AUD530Man average cost per service of $12,000.
In the most remote areas, the averageinstallation cost was $28,000. A mix oftechnologies was employed, includingcertain solutions developed specifically tomeet special circumstances: our DigitalRadio Concentrator System and solar-poweredpayphones, for instance.
We are proud of this achievement. But itmust be admitted that Australia hasachieved universal service for its people95o in the centres of population, 93% inremote areas at a very high capital cost,which can never be redeemed in profits fromthe traffic generated. It is a relativelyrich nation's solution to the need tocommunicate.
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Just as the RRAP was drawing to aconclusion, competition began on theAustralian network. A second carrier,Optus Communications, was licensed tocompete against Telecom and OTC in allcarriage markets, domestic, internationaland mobile. (A third mobile licence is tobe issued in 1993; the network will becomeopenly competitive in 1997, according tothe current legislation.)
Competition has been introduced in such away as to speed the market penetration ofthe new entrant, which has full access tothe established network at a veryfavourable interconnect rate.
While Optus will share the cost of ourUniversal Service Obligations - the duty toprovide the Standard Telephone Service,including Payphones, to all Australianson a pro rate basis, it is under nocompulsion to provide competitive servicesin low margin areas of the business.
Our competitor will build its revenuestream in the heavy traffic, high margintraffic routes, as any rational commercialoperator would do. But the effect will belimited competition with possible discountsbeing offered between major populationcentres and internationally, while localservices and rural customers will miss out.
Some degree of inequality is thereforeinevitable - just as the whole populationhas achieved equitable access to thestandard service. This sketch does notapply exclusively in Australia, of course.It is becoming increasingly characteristicof mature markets around the world - yet itis a disparity entirely masked by theyardstick of telephones per head ofpopulation.
I have gone into this situation in somedetail because it seems to me to provide ananalogy to the way telecommunicationsservices are being introduced in developingnations. Access is following business -and that means it is gravitating to thecities, and it may be contributing to theurban drift that appears to be acceleratingin places like Mexico City, Calcutta andRio de Janeiro.
Ironically, the creation of these mega-cities is occurring at the same time as thepossibilities of telecommunications-baseddecentralisation are beginning to berealised in countries like Australia.
Tele-cottages and tele-working from homeare just beginning to emerge as realpossibilities for us, as the disadvantagesof commuting are being realised by workers,and the high cost of central city officesis affecting the business sector, in thewake of a severe recession in Australia.
Yet, as often happens in a world where (asI think it was Voltaire who said) "systemsoffend reason", solutions are beingdeveloped in and for places where theproblems they address are least pressing,while commercial considerations increasethe tendency towards urban agglomeration indeveloping nations.
These ironies suggest a possible solutionor rather a range of solutions, based onthe specific and particular needs ofcountries or regions, looking for themultiplier effect of communicationsinfrastructure on their economies.
My main point of divergence from theMaitland Commission's approach lies here.The flexibility needed to solve for thewide range of different needs andpriorities in different countries andregions is virtually impossible to solve ona multi-lateral basis.
Bi-lateral solutions developed betweenneighbours at unequal levels oftelecommunications sophistication cangenerate results more quickly, moresensitively and more appropriately. Tostrive for a global solution, especially ina world where trade competition is becomingso intense, risks achieving nothing, albeitin a very high-minded and well intentionedmanner.
PACT is a thin-route regional niche servicedeveloped by OTC Australia in consultationwith the member countries of the SouthPacific Forum to complement the localnetworks of member countries, with a demandassigned multiple access satellite linkoperated from our Sydney earth station.
PACT is small - currently less than 1/4 ofa transponder - and ideal both for domesticcommunications between isolated islandcommunities and for international callsbetween Forum Island Countries.
Eleven nations are now PACT signatories,though the Solomon Islands, Fiji and PapuaNew Guinea are still awaiting equipmentinstallation, which should be in service inMarch 1993. The central idea behind PACT'Sdesign - the small earth station/villagetelephone - is yet to be realised, butseveral exciting applications are alreadyemerging from the technology.
The ennanced services already developed forPACT include Demand Data Services to allowbanking, airline bookings and credit cardvalidation at a cost 60% lower than aconventional system. The service is underactive consideration for monitoringcommercial fishing in the region, forground to air use in aviation, for airtraffic control and for the University ofthe South Pacific as a low cost satelliteteaching network.
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we nave learnt a great deal from theprocess of establishing PACT successfully.One key is consultation, with Government aswell as local carriers; a second crucialissue is pricing (we have recentlynegotiated a rebalanced and much moreattractive domestic/international pricingregime); and the third is the need tocreate applications which overlay theexisting systems, and enhance rather thanduplicate what is currently available.
The situation in Indo-China another areawhere OTC Australia has concentrated itsattention was and is quite different.Telecommunications infrastructure has beenvirtually non-existent. Tourism, whichleads to a net inflow of hard currency fromoutside for local carriers, has beenrestricted to very small :.umbers of theintrepid traveller type.
The political history of the region has notencouraged the inflow of foreign capitalfor development, and the reconstruction ofsocial and economic life has been slow andpainful.
So far, OTC Australia has built oneInternational Telecommunications Centre inHo Chi Minh City and a second in Hanoi,under a ten year contract to assist in thedevelopment and management cf Vietnam'sinternational network. The same contractprovides for exactly what the MaitlandCommission recommended a substantialprogramme of technical and managerialtraining to create a strong indigenous basefor longer term development.
OTC has also provided Cambodia's first IDDservice, through INTELSAT, and has signed afive year agreement to provideinternational telecommunications for theLaos People's Republic, increasing thenumber of international circuits toVientiane from 8 to 30, and reconfiguringthe telephone exchange for IDD.
OTC's aims and intentions in Indo-Chinavery closely follow what you might call the"Maitland line": to facilitate the growthof each nation's social and commerciallinks with the world, to serve commercial,diplomatic and administrative needs, and toprovide a mechanism for outside investmentin the region.
These examples are not designed to paint useither as brilliant operators or asgenerous, caring benefactors. My point isthat we have followed the prescriptionrecommended in "The Missing Link", but on abilateral basis, rather than under someglobal umbrella or system. It seems to beworking, and it seems to hold out realpotential for the future.
I
Sir Donald Maitland and his fellowCommissioners handed all of us a politicalhot potato in 1984. In terms of therecommendations made in that Report, wehave probably failed, as a group, to graspthe opportunities or to meet theobligations identified there.
However, the results that the MaitlandCommission envisaged might be achievednevertheless.
-;;
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TECHNOLOGY TRANSFERIN THE ASIA PACIFIC REGION
Setyanto P. SantosaCEO of PT. Telkom and Former CEO of PT. INTI
Bandung, Indonesia
ABSTRACT
The goal of telecommunications policy in developing countries in theAsia-Pacific region seems to stimulate economic growth, since it is believed thateconomic growth cannot be sustained unless the economy's supportinginfrastructures including telecommunications grows at a greater rate. Besideincreasing the telecommunication facilities, some governments in the AsiaPacific Region also put the development of telecommunication manufacturingindustry as the priority in developing telecommunications sector. An importantissue in this process is transfer of technology. Some experiences of transfer oftechnology in the Asia Pacific region such as Indonesia, Korea and Indiaespecially in the telephone switching industries will be presented briefly. Theseexperiences show that transfer of technology involves many challenges, inhuman resources as well as financial matters.
INTRODUCTION
It is well accepted that telecommuni-cations is a very important means in de-veloping the economy. Countries in theAsia Pacific region - particularly developingcountries - put telecommunications intopriority to create this necessary infrastruc-ture.
The steady economic growth in theAsia Pacific region has attracted many de-veloped countries to invest in t h etelecommunications business in this re-gion. As a result, there has been interac-tions, among the governments, compa-nies and other constituencies. And one ofthe important things in the interactions istechnology transfer.
Transfer of technology happens inmany forms. There is simple forms such asseminar, training, documentation etc.Another form is the physical relocation ofproduction system to local production facil-ities, as technology may be embodied in theform of capital goods, such as machinery,equipment, and physical structures(Dicken, 1988, p. 361).
But the most effective way of trans-ferring the technology is undoubtedly theexecution of R&D program. This programis getting its popularity worldwide and it isknown as the globalization of R&D activity.However it has been organized mainly, ifnot merely between advanced countries 0,industries for the sake of efficiency andeconomy.
Joint R&D program should be en-couraged to happen also between devel-oped and developing countries and amongthe developing countries. There are fortu-nately some 'success story' which can be re-ferred such as software development indus-tries in India (for varieties of softwareproducts) and New Zealand (for NEAXNEC digital switching software). The pre-requisite for the joint R&D program to suc-cessfully take place is actually R&D man-agement capability of the concerned parties.R&D management is a unique branch ofmanagement where creativity, intellectualactivities, and great funding and risks arethe main elements.
The process of transfer of technologyin developing countries in the Asia-PacificRegion becomes a concern of governmentsand industries, because there are some ex-pectations and opportunities to be gainedfrom this high-tech industry. Generally,governments support local industries insome ways that is unique to each country inthe region.
This paper presents particularlyIndonesian, Korean, and Indian experi-ences in telecommunication technologytransfer as samples in the Asia Pacific re-gion. The emphasis will be on the searchfor suitable and appropriate technologytransfer specially in the switching systemindustry.
I.
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INDONESIA
It is rather difficult to imagine, howbig and spread is Indonesia. Indonesia is thelargest archipelago country in the worldwith more than 13,667 islands extending forsome 3000 km from North-West coast ofSumatra to the Papua New Guinea border.If the Indonesian map is superimposedwith that of USA, it will stretch from thewest coast to the east coast of the USA.
Although Indonesia is rich withmineral and natural resources, the devel-opment of telecommunications infrastruc-ture remains very low. There was only 1.1phones for 100 people, which StephenMcClelland (1991) said comparable to acountry such as Bangladesh. But nowIndonesia is trying to catch up. Indonesia,now the fourth most populous country inthe world, through its government policyplays an important role to stimulate the lo-cal production facilities in return to one ofthe biggest telecommunications market inthe region.
Based on the average growth of GDPby 5 % and the expectation on telecommu-nications to increase the GDP by 1.5 per centto 1.8 per cent and net foreign exchange bybetween US $525 million to US $675 mil-lion (McClelland, 1991), since the end of1980s the face of telecommunications hasbeen changed dramatically. Indonesiaplans to add some 2.1 millions telephonelines on the top of about one million in thefifth 5-year plan 1989-1994. The govern-ment will further increase this number fur-ther by extra 5 million subscriber in thesixth 5-year plan (1994-1998) bringing thenumber of 3.7 phones per 100 people.
The new telecommunications law,introduced in 1989, allows private sectorparticipation in providing basic services incooperation with telecommunications au-thority (PT. Telkom). Some 30 foreigncompanies have expressed interest last yearin partnerships with PT. Telkom for rev-enue s:.aiing arrangement. In this scheme,the private sector partner having investedin telephone network is entitled to 70 °,4. ofrevenue in a set period (approximately 7-9years) and after that the facilities will betransferred to PT. Telkom.
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Equipment Manufacturing
The Maitland Report recommendedthat developing countries should considerthe possibilities of local or regional manu-facture. This will reduce foreign exchangeproblems and dependence on the TNCs.Moreover, beside some obvious benefitssuch as job opportunity and domestic valueadded, equipment and spare parts whichare no longer available can be producedcontinuously.
In 1984 INTI (IndonesianTelecommunication Industry), a stateowned telecommunications industry wasawarded a contract to produce the 'flegship'of telecommunications products : digitalswitching system. Under the licence fromSiemens Germany, the Electronic DigitalSwitching System (EWSD) has been manu-factured from the initial production of11,000 line units in 1984 to 150,000 in 1988and it has grown to 400,000 line units lastyear. In 1990, AT&T and NEC were eachawarded for 350,000 lines.
Indonesia's aims of the equipmentmanufacturing capability are:
The capability to operate or utilise the productionmachines/ facilities.- The capability to understand the design.
The capability to select and to find the substitutioncomponents through multi-sourcing program.
The capability to achieve the level of efficiency inthe production.- The establishment of work discipline, corporate cul-ture, and standard application.
However it is understood that tomaster the technology, the need is not onlyto know-how (production engineering) butalso to know why (basic design, researchand development) . Due to the fact that rel-atively little R&D has been relocated to de-veloping countries, strategies for technol-ogy transfer must be developed.
Telecommunications Technology Transfer
Since Prof Dr. B.J. Habibie has beenthe Minister of Research and Technology,the task of technology transfer in Indonesiais better structured and well organized. Hewas formerly a vice president of theGerman aircraft company, MesscrschmittBolkow-Bloehm (MBB) in Munich.
Dr. Habibie, also chairman of theAgency for Assessment and Application ofTechnology, has laid down the principles oftechnology transfer. His philosophy is 'tostart from the end and to end at the begin-ning'. In other words, Indonesia should becapable first in the final products and finishby mastering the initial components.
The process of technology transfor-mation, which becomes a standard for de-veloping 'strategic industries' in Indonesia,has four stages:
-Technology transfer through licence production ,i.e.,the use of existing production and management tech-nologies to produce goods already in the market;
- Technology integration, i.e., the use of existingtechnologies in the design and production of com-pletely new products;
technology development, i.e., the further develop-ment of existing technologies and investment in newtechnologies; and
large scale basic research to support the first threestages and to defend the technological superiority al-ready attained
A popular example is the develop-ment of the IPTN aircraft company inBandung, Java. In the first stage, 1PTN hadbeen licensed to produce commuter aircraftC-212 Aviocar from Spain. In the secondstage, IPTN developed together with CASASpain a new aircraft for 35 passengers calledCN-235 (1984). And at this time, in the thirdstage, IPTN is working on its own aircraft, a50-passenger N-250.
However in the public switching in-dustry, it is almost impossible to develop anew large switching system and compete inthe world market. Muskens (1988) predictedthat each manufacturer should have atleast 16 % of world market share in order toexist, because of high Research a n dDevelopment cost. In other words, if theworld market would be a single market,there might only be six manufacturers left.
Therefore, another approach totransfer of technology should be workedout. One possible answer is to focus thetransfer only in the software area. With thisstrategy, INTI for example with its own ini-tiatives had sent 20 engineers to Germanyto work in Siemens environment foraround two years. They worked, togetherwith Siemens engineers on how to de-velop, integrate and maintain the FIVSDsoftware.
It was realised, from the firstmonths, that EWSD software is very exten-sive. EWSD, as a telephone exchange, mustoperate 24 hours without attendance andwithout failure. If there were errors, thesystem must be capable of self correction.Another point is that the basic EWSD soft-ware is completed. The variations of thesoftware are only in the national projects(e.g., for Indonesia, Columbia, Pakistan). So,there was no sense in concentrating onstudying the 'core' software (operating sys-tem, data-base, etc.)
Because of that EWSD softwarestructure, INTI concluded that the possibledevelopment was to 'adapt' EWSD periph-eral software and 'modify' it co the nationaltelecommunications environment. Thistype of development is often called'Software Adaptation.' With this capabil-ity, in the future INTI will be responsiblefor software adaptation for Indonesia (oreven in the Asia Pacific Region).
Although INTI wants to develop itssoftware development towards the higherlevel of R&D laboratory (i.e., to develop lo-cal products) through joint or independentdevelopment, INTI argues that the otherpossibility for the telecommunications in-dustry in Indonesia is to search and de-velop small-scale products, which suchlarge TNCs will never interested. The mar-ket for this product is also very encourag-ing. In this case INTI is now having a smallpublic exchange up to 1000 subscriberscalled STDI-K (Small Digital TelephoneExchange).
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The development of STDI-K begunin 1987 when there is a need from PT.Telkom to provide rural areas of Indonesiawith small exchanges. We know that withthe scattered and vast rural areas, the bigEWSD is not so effective to supply linesunder 1000. Therefore a new small switch-ing system is necessary.
STD1-K was jointly developed basedon the EWSD digital concentrator, by in-stalling special control modules whichmakes this concentrator becomes intelli-gent. To control the exchange, STDI-K justneeds a common IBM compatible personalcomputer STDI -K does also not require airconditioning facility and special raised flooras large exchanges. All of these reduce de-velopment time needed if INTI developsfrom 'scratch.' A trial run in Karnal, 1988
(Madura Island, East Java), proved to besuccessful. Now STDI-K is 'everywhere' inIndonesia, and INTI is still developing byenhancing the capability of STDI -K b yadding some new features, such as OSS(Operator Services System).
Transfer of Technology in TelecomOperating Company
People do not talk so much transferof technology in the telecommunicationsservice providers. Indeed, as users o ftelecommunications products the transferof technology is some what different. In PT.Telkom's view, transfer of technologyshould not be focused only in products butalso operation, set-up and business ar-rangement.
Therefore at least three types oftransfer of technology are possible between:
Supplier - Operator(equipment technology)
Overseas operator - Local operator(network administration), and
- Standardization body - Operator(techniques and philosopy)
In developing countries, focus has sofar been directed to transfer from theequipment supplier to the operator. Here,the technology transferred has everythingto do with the product but very minor at-tention has been given to the technology ashow to provide the service by utilizing theproduct. This is part of the reason whytelecommunication the service in develop-ing countries is usually substandard.
To improve the situations, telecomoperating company in developing countriesshould seek for better partnership with de-veloped operating companies and thereforebetter opportunity in transfer of technology.This is in fact a two way interest since stan-dard quality of global telecommunicationsservice will improve the number of callscros!,ing the nations borders. The technol-ogy which is transferred is different thanthe equipment oriented one, it is more tothe technology of service provisioning.Technically it could mean the networkingsense of different elements (products) andthe arrangement as how to operate thenetwork and interact with external entitiessuch as the investors, suppliers, traders andcustomers.
Participation of telecom operatingcompanies in the international standard-ization activities is one of the key strategiesto be always up to date with the growingtechnology, the concepts and the technol-ogy behind. From the experience, this kindof technology transfer will most effectivelyoccurs when operating companies are ac-tively involved in standardization meet-ings of international agencies.
Telecom operating company in de-veloping country can play a very importantrole in directing and coordinating the localequipment manufacturers to cooperate andto design their R&D program towards a na-tional long term R&D achievement. Koreais a good case to refer (see the Korea sec-tion). As the user of products resulted from
the R&D program of the manufacturers,telecom operating company has a veryunique and potential position to foster thetransfer of technology to happen in thecountry from overseas donor as well as toorganize the local manufacturer R&D pro-gram to focus on a long term and strategicalgoal.
In any case the unsuccessful transferof technology to the developing countriesoperating company may result in an unac-ceptable quality of the telecommunicationinfrastructure and service and in turn thiswill hamper the growth of it in terms of ca-pacity and technology. In turn this will af-fect the opportunity that the donor countryshould have to contribute.
KOREA
Korea, one of the advanced develop-ing countries in Asia, is already successfulin developing its own switching industry,after some years of TNCs presence. Backedwith the rapid growth of economy and themassive increasing demands of telecom-munications service, Korea is now able toproduce and export various indigenous dig-ital switching called TDX series from therange of 10,000 to 100,000 subscribers.
From 1985 until 1992, there are al-ready 5,885,000 lines have been supplied tothe Korean TelecommunicationsAuthority. There has been export too tocountries such as Philippine (1990, 6,150lines), Nicaragua (1991, 5,500 lines) and Iran(1991, 19,000 lines).
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flow did Korea create its own re-search, development and manufacturing inthe switching system industry ? The answeris in the research institute called ETRI(Electronics & TelecommunicationsResearch Institute). ETRI had conducted abasic research since 1978 and in 1981, a labo-ratory model was completed and put into a
field trial in a rural area of Korea. The re-sult is a production model TDX-1 with themaximum capacity of 10,000 lines.
It can be said that ETRI acts as an'architect'. ETRI set-up the system architec-ture, hardware devices, and softwareneeded for call processing, maintenance,and administration. With full support ofthe government through the funds pro-vided by Korean Telecom, ETRI was able totransfer the know-how to four local manu-facturers i.e. Gold Star Information andCommunications, DaeWoo Telecommuni-cations, Oriental Communications, andSam Sung Electronics.
The success of TDX-1 had encour-aged Korea to continue with new productin 1987: T1)X-l0 (maximum of 100,000lines). Again Korean Telecom and FTRIplay a major role. This collaboration, KT asa project coordinator in term of funds, userrequirement, qualification test/ commercialservice and ETRI as designer, developmentcontrol and ';\ stem integration and testproved to be appropriate.
ee and 13ahk of ETRI (1988) de-scribes some transfers of documents(system design, functional block design,unit design and others) and supporting sys-tems for design and production to the localmanufacturers (software development sys-tem, CAD environment, automatic test environment, dimensioning system, trafficanalysis packages). In addition lee said thatpeople from manufacturers yere sent toEIRI and have worked together. 'I histransfer of lechnolopy shows the 'true'complete transfer of technology.
Manufacturers, with its e xpertise inproduction and technology developmentput the laboratory model into macs produc-tion. Specially in this TDX-10 development,the role of universities and other researchinstitutes come up xvith the support of de-velopment environment, future directionsand basic research.
Hun Lee and Hang Gu Bahk said inan Asian ISDN Council (AK') meeting,Manila 1988 that what Korea has done is aconcerted effort to build the necessary in-frastructure to achieve a self-relianttelecommunications technology base. Theeffort is such that the accumulation of re-sources including well educated engineersat ETRI and other organisation is necessary.
The development of indigenousswitching system will reduce the depen-dence on major international firm. It clearcuts the difficulties that might happen ifKorea had developed the system from theexisting one. Nevertheless the former anal-ysis remain, could Korea sustain the devel-opment of digital switch after it fulfil thedome..tic market ?
INDIA
India is a special case. ,\ quote fromPitroda from C-DOT (Centre f o rDevelopment of Telematics) ma'.' reflect theIndian policy on technology: Tven sinceindependence, India has been emphasisingindigenous development and self-reliancein several major technologies for basic necessities such as agriculture, transportationand communication. India, with stronr, in-dustrial base and scientific manpower, im-pressive in quality and range of skills, iiastcannot rely on imported technologies andproducts to build her infrastructure to leapfrog into the future."
Vith those philosophy, India doi.,everything, with their ol1n, however oinetimes with old technologies they acquiredin the past An example is their main ex-changes (above 2000 Imes) factories 1 hereare still 4 factories set up b\ ill (Indiantelephone Industries 1 imited) that useL;trowger technology from 19.48 and
rossbar technolop from ntil 1"s7.'10'; of Indian telephone lines are still us-ing these type of technologic, (\air, lorm
The problem emerged as the Indianelephone Industries tries to replace those
main exchanges with the Alcatel I -10I3switches. But "...nearly 12,00(1 persons arebecoming surplus', said Nair. .1s a resultthe Indian Government reserved the mar-ket for for main exchanges (more than2000 lines) until such time that all themanpower and infrastructure are utilised.
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However for switching systemwhich has the capacity under 2000 lines,India has its own indigenous products.Started in 1984 under a centre called C-DOT(Centre for Development of Telematics),India was able to produce 128 port PABXand rural exchange. There is also 512 portversion. ITI has also produced exchangescalled 'ILT' (Integrated Local TrunkSwitches) with the configuration from 1n00to 2000 lines.
The development of C-DOT ex-changes started when Sarin committee wasappointed in 1980 to analyse the telecom-munications problems in India. He cameup with recommendation of digital tech-nology for the future switching and trans-mission facilities. In line with this, it wasdecided to develop new digital switchingsystem indigenously.
Aga In, the same as Korea, the gov-ernment of India accumulates the resourcesin two and half years, and agrees to spendsome Rs. 35 crores to develop a family ofdigital switches in 36 months with 300 en-gineers. A new company was set up inAugust 25, 1984: Centre for Developmentof Telematics (C-DOT) (Pitroda). The taskwas not only to design but also to producein a complete production line. C-DOT ruralexchange with 128 port was exhibited atAfrica Telecom 1986. The commercial pro-duction is due by the end of 1987.
CONCLUSION
We have seen examples fromIndonesia, Korea and India in technologytransfer, especially in the switching systemindustry in the Asia Pacific Region. InIndonesia, INTI develops small digitalexchange in addition to support laboratoryor even locally integrated research anddevelopment laboratory.
Korea, backed with a strongeconomy, has already set-up a goodmanufacturing base of switching systemindustry. Korea made this happen with theconcerted effort and strong commitment ofKorean Government through its KoreanTelecom. ETRI /Universities, otherresearch institutes and manufacturers.
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India started to develop its o w ndigital switch after looking that 90% of ittelephone were from old technologies.With the philosophy of self-reliance, Indiaproduces switching system by setting up acentre called C-DOT (Centre forDevelopment of Telematics).
We can see that the challenges oftechnology transfer require commitmentsin human resources, financial support andof course, reliable research anddevelopment organisation. Technologytransfer must be acquired with efforts fromthe industry itself as well as thegovernment through its policies.Moreover, industry should also have thecapability to translate the development oftechnology into development ofmanufacturing as recommended by theMaitland Report.
BIBLIOGRAPHY
Dicken, Peter (1988), Global Shift: Indwtrial Changein a Turbulent World, Paul ChapmanPublishing Ltd, London
ETRI (1991), Development of TDX Digital SwitchingSystem in Korea, ETRI, Korea
Fell, Liz (1992), The Drive to Liberalise AsianCommunications,' AustralianCommunication, pp. 51-60
Habibie, B.J. (1989), Sophisticated Technologies:Taking Root in Developing Countries,'Siemens Review,No. 4, pp. 4-9
Hardono, A. and Setiawan, B. (1990), STDI-K :AReal Rural Digital Telephone Fxchangethe Indonesian Telecommunication Network,Second International Conference on RuralTelecommunications, London
Lee, Hun and Bahk, Hang Cu (1988), TDX DigitalSwitching System Development in Korea,Asian ISDN Council, Doc. No. 25, WG 2ndMeeting, Manila
McClelland, Stephen (1991), Indonesia: ACommunications Overview,' PacificTelecommunications, June, pp. 73-R-73-TMuskens, George and Gruppelaar, JacobNetworks: Strategic Considerations, KluwerAcademic Publishers, Dordrecht
Nair, N.G. (1989), 'Telecommunication in India -Problems and Prospects'. APT Telecomlournal,Vol I. No. 1, July
Pitroda, S.C. Indian Initiative in IndigenousDevelopment - C-DOT (brochure)
Santosa, Setyanto P. (1991), 'Manufacturing ofTelecommunications Equipment in theDeveloping Countries in the Asia PacificRegion : Indonesian Case,' Meeting onTechnological Co-operation for theDevelopment of the TelecommunicationsIndustry in The Asia-Pacific Region,Bangalore, India
ACKNOWLEDGMENT
The author thanks to Mr. Gatot Mardianto, staff engineer at PT. 1NTI and Mr. SuryatinSetiawan, Head of Planning and Research of PT. Telkom who helped me and provided somedata during the preparation of this paper.
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COOPERATION TASKS OF TELECOMMUNICATIONSIN THE ASIA-PACIFIC REGION
Dr. Shin Yun-sikDACOM Corporation
Seoul, Korea
1. Introduction
The telecommunications were largely dependent on the telephone andtelegraph in the past but today, their services are fast expandingthanks to the rapid development of technology, the advent ofversatile computers and the linked usage of telecommunications andcomputers.
Accordingly, the telecommunications have become more essential intoday's economic activities. In fact, telecommunication servicesenable enterprises to be internationalized by overcoming thegeographical barriers and thus expand their production and tradesby exchanging information faster.
The information network will play the pivotal role in exchangingand distributing information, which is so essential in commerce andindustry.
As the technologies for telecommunication and information arefurther developed, their role will be more crucial in industriesand eventually they will lead us to an information society.
In particular, the necessity of the information network is evengreater in the Asia-Pacific region and suggest some cooperativeactivities deemed necessary among the countries in the region.
2. The telecommunication environment inthe Asia-Pacific region and the presentstatus in Korea.
The countries in the Asia-Pacificregion can be classified into four groupsin view of the structure of thetelecommunication providers and theservices.
Included in the first group areChina, Thailand, Indonesia, Taiwan, etc.whose telecommunication services arebeing provided exclusively by thegovernment or public enterprises. Thesecond group embraces those countrieswhich have privatized thetelecommunication service providers butthe service is still a monopoly. HongKong, telecommunication service providersbut the service is still a monopoly.Hong Kong, Singapore and Malaysia belongto this group. The third group includessuch countries as Korea, Japan,Australia, etc., where competition ispartly introduced and the carriers arealmost privatized. In countries fallinginto the fourth group, telecommunicationservices are fully transferred to privatedomain and competition is widely inpractice. In this group are suchcountries as USA, Canada, Philippines andNew Zealand.
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Generally speaking, however, thecountries in the Asia-Pacific regionfollow on a similar pattern in reformingtheir telecommunication structures inthat, at the beginning stage, the serviceis provided by a government body and thenit is provided by a public enterprise andat last the service is privatized whilecompetition is introduced.
Contrary to the trend in basictelecommunication services mentionedabove, however, the mobile service hasbeen developed in a different style. Asthe mobile service was regarded as aspecial type of alternative servicerather than a kind of public service liketelephone and was also thought to besomewhat confined in the use for arestricted group of customers, theparticipation of private corporations wasallowed from the initial stage.
Apart from privatization andliberalization, another important aspectin the telecommunication field isinternalization. As you are well aware,such multi-national negotiations asUruguay Round are frequently held in thistelecommunication business. In the longterm view, it seems to be inevitable toopen the telecommunication marketinternationally and in this respect, theAsia Pacific countries should makerenovations in their telecommunicationstructure or service so as to copeeffectively with such international-ization trend.
In terms of facilities, Asia-Pacificcountries can be divided into two groups;the first one has such countries as USA,Canada, Japan, Hong Kong, Singapore,Taiwan, Korea, Australia and New Zealandwhose telephone supply has alreadyexceeded the demands. On the other hand,the countries in the second group couldnot provide the public with sufficienttelephone facilities yet, hence it is noteasy for ordinary customers to gainaccess to telephone services.
The former group now have to paytheir attention to providing a variety ofnew services and the enhancement of theservice quality, while the latter groupshould accelerate the expansion offacilities in the first place.
From the point of view ofindustrialized countries, the fact thatthere exists considerable gap in thedegree of facility installation among theAsia Pacific countries would seem to bean attractive telecommunication equipmentmarket. In reality, however, it wouldgive a bad effect to that region inrespect to the promotion of commerce andevolution of the industries due to thelack of fast and sufficientcommunications among the countries.
In the case of Korea, continuousinvestments have been made year afteryear in expanding the total scale ofnational telecommunication capabilitiessince last decade. As a result, thedemand for basic telecommunicationservice has been fulfilled to someextent. In addition, we have achieved agreat goal for the technology level-up.For example, Korea has developed a full-digital exchange, named TDX, thus rankingitself among the top ten countries in theworld.
As the facilities are enriched andthe service is diversified, it becomes nolonger suitable to remain a monopoly.Moreover the pressure for opening thetelecommunications market is gettingstronger from outside. Hence it isalmost inevitable to reform thetelecommunication structure including theregulatory aspects as well as the servicecategories. In this connection, the areaof value-added services was brought intocompetition to a far extent already andeven the telephone service stands incompetition partly. In the case ofmobile telecommunication service, newcompetitors are expected to be opening inthe near future.
Despite the dramatic development inthe basic telecommunication service areain Korea, other specific services arestill poor in its scale of facilities andpenetration into day-to-day life of thepublic. The sum of mobiletelecommunication service and othervalue-added services accounts for a meretwelve percent of the totaltelecommunication market of Korea atpresent.
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In respect to technology, such areasas digital mobile communication, portablephones, satellite communication and datacommunications are still underdeveloped.In addition, the key technologiesrequired for the forthcoming integratedtelecommunication service era in the 21stCentury, including fibre optictransmission, high speed/broad bandtransmission and intelligent network arestill to be upgraded.
3. The necessity for telecommunicationcooperation in the Asia-Pacific regionand current status
From the position of Korea, thenecessity for telecommunicationcooperation with Asia Pacific countriesis viewed as follows.
First, out of the total inter-national telecommunication traffic, thesegment of the Asia Pacific regionaccounts for 69 percent and 73 percentfor outgoing and incoming respectively sothat the Asia-Pacific region is of vitalimportance to us. Second, the potentialof the Asia-Pacific area is great enoughto give us some motivations for thedevelopment of data communication servicein view of the demand for not only thedata communication service itself butalso the commercial utilization of it.
Third, Asia Pacific countries canachieve the technology development andtransfer with less effort and costthrough cooperative ties among them.
We think, such cooperative effortsare still needed for other countries aswell, for it will cause the total volumeof telecommunication utility to beincreased and in turn, enhance theeconomy in the region as a whole.
In order to attain such objectives,the countries' mutual cooperation isrequired especially in the followingactivities.
First, the establishment of a globaldata communication network with a view toensuring diverse and free exchange ofinformation. It means not only theexpansion of the network itself but theupgrade of the service quality.
Second, in order to utilize datacommunication freely, all thetechnological and regulatory environmentshould be reshaped or broadened.
Third, to set up telecommunicationstandards commonly applicable to anycountry in the region so as to ensureeffective interconnectivity of the datacommunication networks between countries.Viewed in this light, we need systemizedtools in the region.
Fourth, in view of the balanceddevelopment of telecommunications, everycountry should cultivate human resources,especially for the areas of relativelyless developed technologies. This is thearea in which the regional cooperationsystem is most required.
There already exists severalregional cooperative organizations inoperation in the Asia Pacific. And Iunderstand some of other economicorganizations are also developing severalprograms to boost the telecommunicationindustries of the region.
In the former, there are such bodiesas the Asia Pacific Telecommunity, thePacific Telecommunications Council andthe Asia ISDN Council. The latterincludes the telecommunicationdevelopment program of APEC, the Triple Tproject of PECC and the committeeactivities of ESCAP.
4. Tasks ofTelecommunicationsregion
Cooperation inin the Asia-Pacific
4.1 Exchange of information in thetelecommunication sector.
The first thing to do in'the Asia-Pacific region is to exchange informationon each country's current status oftelecommunications.
In the latter part of the 20thCentury, the technological advances havebeen accelerated year after year.Keeping pace with this, the circumstanceof telecommunication services andregulations are being restructured ineach country. Such variations are shownto us as the privatization, competitionand deregulation.
In order to keep abreast with suchcircumstantial changes, every countryshould modify or reform itstelecommunication structure regardingboth technical issues and regulatorymatters. In doing this, we really needto know of other countries' experiencesand applications.
At present, some regionalorganizations are running specificprograms for gathering database of eachcountry's telecommunications environment.APEC and PECC have completed theirrespective information gathering and APTis also going through this process.
APEC' s committee fo rtelecommunication has launched a projectnamed Data Compilation through which APECmember countries are exchanginginformation related t otelecommunications. Under this project,materials are gathered from all themember countries such as telecomregulations, investment plans, conditionsfor penetration into telecom market,education programs and facilities. Itplans to draw a master plan ontelecommunication cooperation policy onthe basis of the data compiled.
On the other hand, PECC's Committeefor Telecommunications, Transportationand Tourism has conducted a rather broadsurvey on these three areas under thetitle of Triple T Survey. PECC's surveyis unique in that it includes opinionsfrom experts in the field.
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This information gathering anddistributing work is an on-going projectand is expected to be carried out in thefuture, even more actively and quicklyfor the purpose of achieving realcooperation in the region.
4.2 Establishment of a DataCommunications Network in Asia Pacific
As the economic structure istransforming itself into the serviceoriented one, the need for information aswell as data communication is on the risein proportion but present PSTN cannotfully support such complexcommunications.
Therefore it is urgently required toset up a renewed data communicationnetwork as an economic infrastructure inthe region which links all the countriesin the Asia Pacific together, comprisingsuch facilities as exchange andtransmission systems, and software likeEDI or E-mail as well.
In relation to the theme"Establishment of Data CommunicationNetwork in Asia Pacific Region", Teleportplan was drawn up and has been carriedout by APEC. And another project named"Triple T Port for Developing Economies"is underway in PECC.
APEC's Teleport plan is drawn up intwo directions; one is to establish theconcept that Teleport plays an importantrole as a center of telecommunications toregional economy development and, theother is to discuss the items to beinvestigated or examined preliminarilyprior to the installation of the network.APEC's Teleport plan is progressingcomparatively slowly because there arevarious opinions in regard to the patternand scale of the teleport system whichshould reflect such factors as the degreeof facility deployment, communicationdemand and regulatory circumstance.
PECC has come up with a teleportmodel as reviewing the construction plansof telecommunication infrastructure inIndonesia, Malaysia and Thailand whichhave the construction plans of"Industrial Parks".
The viewpoints from the countriesinvolved in the Teleport project haveshown a conflict of interest.Industrialized countries are interestedin providing equipment required for theconstruction of Teleport network, whileunderdeveloped countries look forreceiving technical and financial supportthrough this Teleport project.
For the successful establishment ofdata communication network in the AsiaPacific region, these two aspects shouldbe harmonized smoothly.
4.3 Utilization of Data CommunicationNetwork
Another important thing in regard tothe establishment of data communicationnetwork in Asia Pacific region is how toutilize the network well.
The services to be thought of on thefirst hand are EDI, E-mail, Videotex,Audiotex, etc.. In particular, EDI isexpected to be utilized extensively intrade and commerce and other economicactivities as a whole.
As a utility program of theinternational data communication networkin Asia Pacific, "EDI plan" of APEC and"Pacific Communication Network" of PECChave been drawn up. Of these, EDI planof APEC is in progress in two ways, oneis to provide EDI education program tomember countries and to draw theirattention by doing so and, the other is ademonstration program which shows thereal benefits from using EDI. On theother hand, PECC's interest is onelectronic mail and bulletin service.
EDI itself is, of course, to bewelcomed for both industrializedcountries and under-developed countriesin consideration of its usefulness, butthe situation of the countries are notall the same. It is because EDI or datacommunication is closely related toservice industries such as finance,insurance, advertisement, tourism andthat if utilization of the network iswide-spread, it makes easier to penetrateinto the service market of developingcountries by developed countries.
In the circumstances, USA, Canada,Australia, New Zealand, Japan, Singapore,Hong Kong, etc., are emphasizing theearlier implementation of EDI, whereasother countries which do not havesufficient technical or servicecapability are rather passive in thisregard. Accordingly, the matter ofintroduction and utilization of the datacommunication network in Asia Pacificarea should be preceded by deepconsidLrations on the harmoniouscombinations of above two seeminglyconflicting standpoints.
4.4 Development of Human Resources
As the cycles of new technologiesare getting shortened due to renovationsin services and relevant technologies, itbecomes the key task to develop andobtain sufficient professional manpowerpossessing upgraded skills.
Even in this matter of datacommunication network build-up andsubsequent use of it in Asia Pacific,human resources development is verycrucial and therefore requiressubstantial cooperation and supports.
Such cooperation in Asia Pacificregion can be achieved in two ways; moreconvenient way is the technology transferin the course of telecom equipmentimports, which is a rather private andbilateral method between the vendor and
vendee. The other approach is to promotecooperation through internationalorganizations.
As you are well aware, APT and APECare conducting training program. APT'sprogram is focused on the technicaltraining for the people from developingcountries, while APEC's program has beentargeting the management class of theservice providers.
When it comes to organizing thetraining program, the field of interestis contingent on the situation of eachcountry. In the case of less developedcountries, whose priority is to expandthe telecommunication facilities andservices, the training is focused oncultivating the general technical man-power capable of installation, operationand maintenance of the equipment andfacilities. Compared with this, newlyindustrialized countries such as Korea,Hong Kong, Singapore and Taiwan needprofessional engineers for state-of-the-art technologies as they already haveenough human resources for handling othergeneral and besides, they cancultivate the required technicians bythemselves to some extent. On the otherhand, advanced countries are notinterested in the training itself, but inother benefits derived from such trainingprograms. They are in a position toprovide other countries with their owndeveloped education systems and so, theymay expect the increase of demands fortheir manufactured telecommunicationfacilities in connection with thetraining courses.
4.5 Standardization
Needless to say, communications arepossible only when the terminals andassociated facilities' in both sidessatisfy required technicalspecifications.
In the countries of the Asia Pacificregion, both old and new systems withupdated technical standard are commonlyused and yet, some countries are usingthe materials of their own standard.
It could be easily seen that if eachcountry is producing and using its owntype of facilities, it will givedisadvantages to internationaltelecommunications on a global scale andthis is especially true of datacommunications.
In order to absorb rapidly upgradingtechnologies with less effort, it shallbe emphasized to produce an environmentfor setting up telecommunicationstandards on a regional basis.
I understand there is no regionalorganization for telecommunicationstandards in Asia Pacific like ETSI inEurope yet. Though there exists suchorganizations as PTC and APT, they arenot directly related to the matter ofstandardization.
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PTC is open to any issue concernedwith telecommunications including thestandardization matters, but is ratheroriented to the exchange of informationand APT's role is focused on the balanceddevelopment of all the countries in theAsia Pacific region, the standardizationis left out in the dead angle.
The subject of standardizationincludes not only technical aspects buteconomic points. As the standardizationof materials are being treated as non-tariff trade barriers, this matter isvery sensitive to trade and commercealso.
Due to such economic concerns ofeach country, setting up a regionalstandard organization is a very difficulttask. However, considering the fact thatour primary purpose in thistelecommunication business is to maximizethe fulfillment of communication needs inkeeping with the development of all theindustries, it still seems to benecessary to establish a standardizationbody in the Asia Pacific area so as tocome up with useful standards commonlyapplicable to all the countries. Supportand cooperation are badly needed in thisregard.
5. Closing Remarks
The telecommunication cooperation inthe Asia-Pacific region should beprogressed toward the direction that thetechnology renovations in the field oftelecommunications are being reflected toa maximum extent in improving the socialand economic standard in the region.
It is in this context that I havementioned some tasks of cooperation forthe telecommunications in the Asia-Pacific region. They are; Exchange ofInformation sector, Establishment andutilization of Data CommunicationNetwork, Development of Human Resourcesand Standardization.
As PTC has played an important roleso far in promoting a free exchange ofinformation in regard totelecommunications, I count on the PTC tocontinue to carry out such functions inthe future so that it will contribute alot to the development of the AsiaPacific society.
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Pacific Telecommunications Council2454 South Beretania Street, Suite 302Honolulu, Hawaii 96826 USA
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