Tuesday, September 13, 2005

A bit of perspective

As the members of Spinal Tap said at Elvis' grave, "Too much f*cking perspective." I'm not sure precisely what prompted this particular Diamond Cluster mega-value reader to chime in with the amazing anecdote below, but many thanks to him in any event for allowing me to publish it. I imagine it is a combination of the SkypeBay deal, my post chastizing telcos in its aftermath, and perhaps, at the margin, my earlier post soliciting experiences of telco victims. Whatever the motivations, read it and weep...

It was the summer of 1997, AOL had only just released something called an Instant Messaging client four weeks previously. eBay was 18 months old, and XML was an acronym that would not mean anything for at least half a year.

Eight members of UUNET's European strategy team sat in an office in London's King Street, a stone's throw from the Bank of England. They chatted cheerfully and shook hands enthusiastically, as many of them had not met face-to-face since their respective start-ups were acquired by UUNET the previous year, creating the worlds largest ISP. The sun shone brightly through the inadequate vertical blinds. The occupants positioned themselves so as not to catch the odd stray ray of light, but it was impossible.

The meeting was scheduled to start at 11.00am, with attendees from all the major European operating companies of the time, UK, France, Germany, Belgium, the Netherlands. Talk turned to their new pay-master, WorldCom. Bernie Ebbers had acquired UUNET as part of the MFS transaction six months previously. How would the company change? Would this mean huge cost benefits for the UUNET business, given WorldCom's extensive international fiber network? Would we finally have the budget to do that TV advertising we'd always talked about? The WorldCom side of the company had been invited, but did not return phone calls or emails by the time of the meeting. They sent no delegate. Perhaps they were leaving us to sort this one out - in any case the future looked very exciting.

The meeting would decide the European VOIP strategy of the world's largest ISP.

Under considerable pressure from Cisco, engineers had rigged up a test network for their new VOIP technology. It was clumsy and expensive by present day standards, but the verdict from engineering was that basically it worked pretty well, and they felt confident in dealing with any latency and bandwidth demands. As the last participant arrived, sandwiches were brought in, and the meeting finally got underway. It was 11.45am. A mobile phone rang - it belonged to one of the two UK delegates.

The conversation went like this:

"Hello, [name], this is [name], I am the VP Europe for WorldCom"
"Yes, I know who you are, what can I do for you?"
"This VOIP meeting you are having today, I've just seen the Email"
"Yes, we're just about to get started actually. I'm sorry nobody from WorldCom made it, but we..."
"Look, voice customers are our customers, not yours, so any new product for them or talk of migration, it's going to come from the WorldCom side, got it?"
"Well, at the moment we're just testing the technology...we..."
"I (WorldCom) own the revenue line for voice, so I (WorldCom) own the customers, not you. You are Internet, we are voice, OK?"
"There is to be no more work carried out on this VOIP stuff until we (WorldCom) decide, and we (WorldCom) will be managing it, OK?"
"OK, you've made that clear."

Conversation ends. The attendees have this relayed to them in silence, and there is much head shaking. I reflect for a moment... it seems this "being bought out for billions by a traditional telco" isn't going to be all good. With little else to discuss, the lunch is eaten at a relaxing pace, and the delegates shuffle off with plenty of time for shopping before catching their flights home.

WorldCom (now MCI) launched its VOIP product in Europe in Mid 2004, seven years after that phone call.

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