E-Service: The Next E-Wave
HBS Professor Marco Iansiti and H.T. Kung, William H. Gates Professor of Computer Science at Harvard, solicited views on new directions for the Internet in a panel discussion called "e-Service: The Next e-Wave." The current shift on the 'Net, said Iansiti, is toward a service-based model for creation, production, delivery and use of the Web, as well as toward a service delivery infrastructure.
Panelist Katie Burke (HBS MBA '95) noted Web-based e-mail as a good example of how and why software is turning into a service. Web-based e-mail has become extremely popular in the consumer market thanks to the fact that anyone can access it from any computer as long as they have a browser, she said. Her company, Desktop.com, is building an integrated Internet desktop services platform and product in much the same spirit, to allow people to easily access their files and applications.
As a self-proclaimed "infrastructure guy," panelist Steve Papa (HBS MBA '99) of Optigrab.com speculated that the future of e-business services will be marked by the same pull toward uniformity that took place in industry consolidations a hundred years ago. Numerous stock exchanges have given way to very few; the lay-out of supermarkets is more or less the same no matter where you go. Various web sites today may try to differentiate themselves by offering a different experience to the consumer, Papa said, "but we find that people want all TVs to have the same remote controls."
Michael Mulica of Phone.com noted that telecommunications has traditionally been a very segmented market, but from a macro standpoint it is consolidating as well. The prospective merger between Internet portal Lycos and Spanish Internet service provider Terra Networks, Mulica said, was "a wake-up call." Added Gene Banman of Sun Microsystems, "The establishment of industry standards, protocols and APIs which allow competition in devices and services is what's going to drive services in the long run. That's where we should be aiming."
Jason Bluming (HBS MBA '99) of Bowstreet.com, a business-to-business "relationship portal," took a slightly different approach, noting that barriers to entry are not likely to become insurmountable. "As services proliferate, how do you figure out who you trust and who you do business with? Frankly, it's the same way you always have, by trusting a relationship you have and by trusting a third party. As the world gets bigger, it also gets smaller and more concise."
Telecommunications in 2010
The year is 2010. Giants AOL Time Warner and AT&T-Disney have come together in the Grand Alliance, establishing temporary control over both conduit and content into America's homes, only to see their hybrid-fiber-coaxial (HFC) network lose out to the All Fiber Network (AFN) developed by the electric power companies in concert with RCN-inspired entrepreneurs.
No, wait. It's 2010, and the channels are controlled not by any one kind of network, but by a mish-mash of competing conduits—fiber, coaxial, twisted pair, microwave, cellular and more—and an equally dizzying array of networked appliances, content and commerce sources and industry players.
What will the U.S. telecommunications infrastructure look like 10 years from now? How will we get there? What will be the implications for our economy and our global competitiveness?
The IS2K presentation "The Impact of Future Telecommunications Infrastructures" offered the two scenarios above, the result of an IEEE-USA/Cornell University project to point the way toward development of "ubiquitous, high bandwidth, digital connectivity to end-users as the basis for high-speed, digital, interactive, multimedia services." (See the project Web site for more details.) The scenarios, said moderator Scott Bradner, senior technical consultant at Harvard, were not so much predictions as a means to evaluate the next generation of technologies and to advise and educate lawmakers on the implications.
Professor Alan K. McAdams from the Johnson Graduate School of Management at Cornell presented the "All Fiber Network" scenario, with a play-by-play of old and new technologies and telecomm competitors rising, contending and falling by the wayside.
The "Global Alliance," in the AFN scenario, first "broke the back" of the DSL-based local phone companies, or ILECs (Incumbent Local Exchange Carriers), with low-cost digital telephony and broadband services. But with independent content providers squeezed out, an alternative and technically superior alternative arose as RCN and other Competitive Local Exchange Carriers (CLECs) used the electric companies' "legacy infrastructure"— rights-of-way, poles and conduits, and a highly-trained workforce—to install an all fiber network in key regions around the country.
The lower costs and technical superiority of the AFN, in this scenario, led to the collapse of the Global Alliance. That left fiber as "the infrastructure or the infrastructure" with wireless—"connectivity with mobility"—existing alongside it, but without the high bandwidth services available through the AFN.
Jean Camp, Assistant Professor of Public Policy at Harvard's John F. Kennedy School of Government, presented the second scenario, a view of a world where "the demands of networks in houses are as different as their floor plans" and where "there are a range of options depending on where you live, how you live, how you want to be connected."
Driven in part by the growing demographic diversity of the population and by open standards, the infrastructure, in this scenario, is wide open. "What planet we're all on in 2010 depends on who drives it," said Camp. "Is it the consumers, the conduit, the content, the corporations or some combination of the above?"
Marilyn Showalter, chairwoman of the Washington State Utilities and Transportation Commission, followed the presentation of the two scenarios with a look at the regulator's role.
"The telecommunications infrastructure is an essential part of our community," Showalter said. "It's not an option for people, any more than telephones or electricity are options. Because the infrastructure is that essential, that's why politics will be involved."
The role of regulation in this environment, she said, is to be both flexible and creative: "Where the markets are working, where competition is working, you get out of the way. But we also have to be prepared. Where the market fails to provide the service, we have to step in."
Genes on the Web
In a discussion moderated by HBS Professor Josh Lerner, participants in the panel on "Genes on the Web" emphasized the positive aspects of genetic research on the Internet and tried as well to clarify some common fears and misconceptions of such research's effects on privacy and intellectual property.
The positive aspects, according to panelist George Church, include the fact that the Internet has led to an open exchange of information and a community spirit among scientists that was unprecedented in human genetics research. A professor of genetics and director of Harvard Medical School's Lipper Center for Computational Genetics, Church noted that his own computer experience dates back to 1969. Until recently, he said, scientists routinely held on to their data for two years before publishing it.
"Today," he said, "the standard is 24 hours to put information on the Web; that's the rule for participating in the Genome Project." (The U.S. Human Genome Project, a joint effort of the U.S. Department of Energy and the National Institutes of Health, recently joined with the private company Celera Genomics to announce the cracking of the human genetic code.)
Increasing interest in such research has led to complex legal tangles. Patent attorney Brenda Herschbach Jarrell of Choate, Hall & Stewart, who specializes in biotechnology and earned a PhD. in biochemistry, said that even though issues regarding intellectual property and patent rights are ever more complicated by new discoveries, the language of the court remains very broad. However, there are a few basics to keep in mind, she said.
"You can't patent the [genetic] sequence … You can't patent abstract information. You can only patent physical things, methods of making things and methods of using things. Furthermore, you can't patent anything that is in nature."
"Technology is rapidly outstripping the law," added Anthony R. Kerlavage, PhD., a senior director of bioinformatics at Rockville, MD-based Celera. One of the biggest hurdles for popular understanding of such research, he said, is the fear of individuals that their privacy is going to be invaded.
"I think that's a very unfortunate thing, because there's a lot of promise in the technology," Kerlavage said. "I think there may well be a public backlash just because of the fear factor. Clearly we have to take the adequate precautions.
"Over time, there's no security that can't be broken. Over time, we're going to have instances where information may be stolen or made public; I think it's inevitable no matter how secure we get. I think it will be the exception rather than the rule. …
"There is a serious education issue here," Kerlavage continued, "and we need to have very open debates and broad dissemination about what the technologies and risks are. We also have to have our legal system catch up. We have to have laws to protect individuals if their information becomes known: Their jobs have to be protected; their health insurance has to be protected. That's the only way to solve this problem and make people feel comfortable about taking advantage of the technologies that can help them."