Telecom Essay

This essay has a total of 4489 words and 22 pages.


Telecom





Introduction
We are in the midst of a global information revolution driven by the convergence and
proliferation of information and communication technologies. The telecommunications sector
is changing at warp speed, driven by technological innovation that results in new
equipment and services, and also by new entrants and alliances between companies with
experience in a wide range of information industries from telecommunications to
broadcasting to computer hardware and software to publishing. Three major trends are
driving these changes:

the rapid introduction of new technologies and services;
the restructuring of the telecommunications sector; and
globalization of economies and of communications.
Together these developments are not only changing the world of telecommunications, but the
ways people work, learn, and interact.


The Death of Distance
"The death of distance as a determinant of the cost of communications will probably be the
single most important economic force shaping society in the first half of the next
century." The death of distance could have profound implications for both individuals and
organizations. The ability to work "anytime, anywhere" allows "road warriors" to work
without offices on planes, in hotels, and at client sites, and enables information workers
to telecommute from their homes rather than traveling to work. This flexibility can be
two-edged for individuals, who can work wherever they choose but may never escape the
"virtual workplace." Organizations may reduce their overhead costs and improve their
productivity, but they must also learn how to manage their decentralized work force.


One major technological trend is the extension of "information superhighways" in the form
of broadband networks; another is the increasing ubiquity of communications using wireless
technologies (that will, however, initially provide access to squirts rather than floods
of information). Personal communications networks using microcellular technology will
allow people in urban areas not only to talk on pocket-sized telephones, but to transmit
and receive data using wireless modems. In rural and developing areas, these services may
be available from low earth-orbiting (LEO) satellite systems.


On an international level, the death of distance has profound implications for the
globalization of industries and national economies. Rural regions in Europe and North
America may lure businesses with their pleasant environment and lower labor costs;
however, they are no longer competing only with cities in their own countries. Companies
may hire information workers in developing countries where labor is far cheaper, not only
for data entry and word processing, but for writing computer programs. Conversely,
developing countries now find themselves competing in global markets, where quality and
suitability of products may be as important as price.


Global networking: Changing the geography of business
Telecommunications networks now link manufacturers with assembly plants, designers with
factories, software engineers with hardware vendors, suppliers with retailers, retailers
with customers. No longer is it necessary to have all the expertise in house. Software
engineers in Silicon Valley complain that they are laid off while contractors transmit
code from Russia and India. Freelance designers can now send clothing patterns directly to
an automated garment factory. Customers can order anything from airline tickets to winter
clothing online and do their own banking and bill paying electronically.


These trends open opportunities for innovative entrepreneurs around the world. For
consumers, they offer more choice and lower prices because there is no overhead cost for
sales clerks and order takers. Yet these changes pose threats to traditional businesses as
well as to employees. Increasingly, companies that want to compete on price will have to
"work smarter" to reduce costs and respond to market changes, while others will have to
rethink how to add value to attract customers. High levels of customer service and
individualized attention are likely to become more important. As Wells Fargo found, a bank
that offers assistance from a human twenty-four hours a day in addition to online
electronic banking can attract new customers. And computer vendors that offer free and
easy-to-reach customer support may be able to charge a premium, or at least not lose
customers to commodity discounters.


More than half the computers in U.S. offices are linked to local area networks (LANs).
Increasingly, businesses are also linking into the Internet to reach counterparts in other
organizations, specialized databases, and potential customers. Each month, some 2,000
businesses join the more than 20,000 that have already set up "virtual shop" on the
Internet.


Federal Express's 30,000 employees around the world are linked via the Internet to
"intranet" sites within the company's Memphis headquarters; some 12,000 customers a day
track their own packages using Federal Express's Internet Web site, rather than calling a
human operator. Ford Motor Company engineers in Asia, Europe and the United States worked
together electronically to design the Taurus automobile. Pharmaceutical company Eli Lilly
uses information compiled on its intranet sites to schedule clinical trials and
submissions for approval of new drugs in countries around the world. Visa International
provides an information service called Visa Vue for its 19,000 member banks on an internal
Web site.


As electronic security improves, in the form of "firewalls" to prevent unauthorized access
to private networks and encryption to protect the privacy of personal and financial data,
more companies will use the Internet to sell products and services as well as to link
their employees. The Internet opens a global market to the small business and lets low
budget nonprofit organizations reach interested parties across the country or the world.
While Reuters and Dow Jones are repackaging financial information for electronic
subscribers, a startup company in Silicon Valley called QuoteCom is selling financial
information over the Internet for as little as $10 per month. The Future Fantasy Bookstore
in Palo Alto, California, put its catalog on the Internet and suddenly became a global
firm.


Small businesses with computer expertise can also set up shop as gateways to the Internet
for their communities. In eastern Washington state, the Palouse Economic Development
Council has established Palouse Net, a World Wide Web server and Internet aggregator for
farmers and small businesses in rural Washington and Idaho.


Telecommunications networks are creating a global information workforce, as employers seek
the cheapest labor, ranging from clerical work, such as data entry, to software
programming and research and development. American Airlines uses key punch operators in
Barbados to enter data from its flight coupons, which are then fed by satellite and
telephone lines back to American's central computers in Tulsa, Oklahoma. American
reportedly saved $3.5 million on data processing in its first year. Mead Data Central, a
provider of data base services, hires overseas workers primarily in Ireland, the
Philippines, and South Korea to enter documents in its data bases. There are now at least
seventy U.S. data processing firms with overseas facilities.


In the short run, these clerical jobs offer attractive employment opportunities for
developing countries, particularly those such as the Commonwealth Caribbean countries and
the Philippines with relatively high literacy rates and an English-speaking work force.
However, not only do these jobs have the same disadvantages as similar jobs in
industrialized countries (low pay, boredom, little chance of advancement, stress from the
pressure to reach productivity targets or from computerized monitoring), but they also may
be made obsolete by optical scanners and voice recognition technology that can transform
hard copy and spoken words into digitized text.


Some countries and enterprises may together be able to use telecommunications to create a
competitive advantage at the other end of the information work continuum. India has built
software development parks equipped with satellite uplinks, so that foreign high tech
companies can hire Indian engineers and programmers at a fraction of the cost of expanding
its professional workforce in the United States, and India can retain professionals who
might otherwise join its massive brain drain. Just as North American and European laborers
complained in the 1980s about the growth of offshore manufacturing, highly skilled
information workers in Silicon Valley now fear losing their jobs to lower paid offshore
professionals.


As demand for these services grows, users will need access to more bandwidth to speed
searches, download software, and transmit video and graphics. Some telecommunications
companies, such as AT&T and MCI, are becoming Internet service providers, concluding that
the Internet must be viewed as an opportunity rather than a threat. Others fear that the
Internet will steal traffic, as users opt for flat rate voice and video transmissions
rather than paying for time or bits.


Traditional telephone companies will have to respond to the demand for new and cheaper
services as an opportunity rather than a threat if they are to survive. Rather than local
monopolies providing telephone services over copper wires, in many countries we may find
cable television companies, electric utilities and wireless operators competing with
telephone companies to reach the end user, offering a combination of voice, data, and
video services.


Toward global information infrastructure (Gill)
These technological and economic trends have led policy makers to call for the
construction of "information highways" linking communities and nations. The phenomenal
growth of the Internet as an information resource, communications tool, and electronic
marketplace has focused attention on the need for national and global "information
infrastructure" (NII and GII) to bring the Internet and other forms of electronic
communications within reach of people around the world.


The Clinton Administration announced the National Information Infrastructure Initiative
(NII) in 1993, calling for joint industry and government efforts to create a seamless and
interoperable national broadband infrastructure, an "Information Superhighway" to link all
Americans. Vice President Al Gore challenged U.S. industry to connect all of the country's
schools, libraries, hospitals and clinics to the information highway by the year 2000. The
Telecommunications Act of 1996 requires discounts for the provision of "advanced services"
to schools, health care facilities, and libraries.


Federal and state governments are funding research and pilot projects to spur innovative
applications. The High Performance Computing and Communications Program is supporting
university research. The National Telecommunications and Information Administration (NTIA)
provides funds for telecommunications applications in distance education and health care
delivery. The Rural Utilities Service (formerly the Rural Electrification Administration)
funds educational and health care projects providing advanced telecommunications
technology and services for rural Americans. Many states are offering inducements to the
carriers to accelerate the upgrading of their facilities and to provide access to schools
and other community locations. State governments are also providing seed money to
communities and economic development agencies to help them to plan and initiate projects
using telecommunications as a development tool.


The European Commission published a White Paper in 1993 on "Growth, Competitiveness and
Employment" that emphasized an urgent need to develop a European-wide information
infrastructure to help restore economic growth and competitiveness, open up new markets
and create jobs.


Acting on the White Paper's recommendations, the European Commission called on a
high-level group of information industry representatives to produce a report recommending
practical measures for implementation. This report, entitled "Europe and the Global
Information Society" urged the European Union to trust market forces and private sector
initiatives, but noted that spending on education, health and research may have to be
retargeted toward new priorities, and a new form of public/private sector partnership
would be needed to implement the group's recommended action plan. It recommended:

Accelerated liberalization of the telecommunications industry;
Identification of the degree of regulation required;
Interconnection of networks and interoperability of services to avoid fragmentation of information infrastructure;
Reduction in tariffs, to bring them in line with those of other advanced industrialized regions;
Review of the standardization process to increase its speed and responsiveness to the market.


In response, the European Commission has set out a detailed work program in four key
areas: regulation, applications, social and societal aspects, and the promotion of the
information society. The European Union has taken a major step toward liberalization by
opening the telecommunications markets of member countries to competition as of January
1998. It also approved $3.8 billion under its Fourth Framework Program to support research
and development in communications technologies and development of applications in distance
education, health care and other social services.


Canada also has plans to build a network of networks linking Canadian communities,
businesses, government agencies and institutions. The Canadian government sees the
information highway as a catalyst to help Canadians share information, and to gain an edge
in productivity and information industries in global markets. It has identified three key
objectives for the Canadian information highway:

To create jobs through innovation and investment;
To reinforce Canadian sovereignty and identity;
To ensure universal access at reasonable cost.

These objectives emphasize cultural as well as economic priorities. Canada's Information
Highway Advisory Council, composed of representatives of communications industries,
business users, academics, performers and consumers, takes a distinctively cultural
perspective: The Information Highway, in our view, is not so much about information as it
is about communication in both its narrowest and broadest senses. It is not a cold and
barren highway with exits and entrances that carry traffic, but a series of culturally
rich and dynamic intersecting communities. Rather than a highway, it is a personalized
village square where people eliminate the barriers of time and distance and interact in a
kaleidoscope of different ways.


Continues for 11 more pages >>




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