The Billy Joel song reference on this story's title is just to acknowledge the fact that I am not quite the first to have started the speculative "what-if" scenario regarding Global IP Sound.  Rodrigo really gets the scoop about one of the key ingredients that makes Skype attractive: a bona fide CODEC, namely GIPS (Global IP Sound).  This Swedish company is top class in the VoIP CODEC market - and its performance is great in the Internet.  No wonder Skype calls sound so great.  Not too many companies could match GIPS' quality (albeit there was a pretty good one in TeleSym - except that there were some turf battles once more VCs joined in and/or other technical issues were identified, resulting in the company having to wind down its operations).  But like Rodrigo and DG Lewis, I also wonder what kind of deal GIPS gets when it licenses its CODECs to the likes of Skype, Microsoft, etc.  And it would be a great move for some company out there to buy GIPS.  I would say that such an acquisition is not only great due to the technology being acquired, but as a bonus, to the disruption it would bring to all companies licensing the CODEC.

Skype Journal had an interesting story on "buddycasting", the newest variant of "casting" something out into cyberspace (after Podcasting and Skypecasting).  Turns out this concept by Gogelmogel's Uri Levanon is pretty neat: this Skype mini-cast would sort of work like a personal avatar, enabling a user to share a single short voice message with members of his/her contacts list.  This can be a joke, saying, or an excerpt from a favorite song or program.  In the spirit of the Business Week story, I like this idea quite a bit - since it's all about creating a personal experience. 

Business Week had a big portion of their current issue devoted to a special report (Get Creative!), and the transition from the "Knowledge Economy" to the "Creativity Economy".  The various articles deal with issues ranging from outsourcing and the commoditization of knowledge to the need to create "consumer experiences" and to innovate in new areas such as "Imagination Breakthrough projects".  This is absolutely a MUST READ edition!

BW also has in this section a ranking of the top 20 innovative companies of the world  (hat tip: Dragos from @rgumente), based on a pool taken this year of 940 senior executives in 68 countries.  The leader is Apple, with about 25% of the vote (more than the sum of the #2 and #3 players - 3M and Microsoft & GE, respectively; note that Microsoft was tied with GE).  The "end user experience" factor definitely helped Apple, but I was really surprised by the relatively low ranking of Microsoft, and wonder if this is just due to the bashing that the company suffers.  I echo Dragos' sentiment (maybe it's an opportunity for people like Robert Scoble to publicize more the Microsoft success stories).

Also noteworthy to mention that, in keeping with the spirit of the story, Business Week is launching a launching a new online Innovation & Design portal.

Earlier this month, the Luxembourg IPv6 Summit was held, and from the indications that I got from a colleague, only a moderate degree of  progress has been made on a few fronts.  The prevalent consensus was that NAT was never meant to be a long-term solution - it was just a stop-gap measure until the address space would need to be increased.  The issue is that NAT does not handle applications that need end-to-end addressing, and that could be trouble for apps that rely on DHCP (incorporating the host's IP address with app layer data).  

Furthermore, the progress of IPv6 is still slow in some regions versus others.  In Japan, for instance, the government took an active participation in helping boost the uptake of the technology, by mandating the implementation of IPv6 as part of one of its initiatives.  The EU has been actively promoting IPv6 and funding quite a few projects, whereas China and Korea expect good growth.  However, in North America, things are progressing on a much slower basis.

There was one presentation in particular that made a lot of sense to me, in addition to making me wonder how fast IPv4 addresses will run out.  I am talking about a slide deck presented by Patrick Grossetete from Cisco.  Patrick presented the next-gen broadband home vision, and on one slide, he illustrates the plethora of devices (PDAs, wireless laptops, gaming, broadband access point, etc.).  If all of those devices has an IP number, then we should be hitting the IPv4 limitation sooner rather than latter.

For those of you interested in learning more IPv6, here is an excellent resource: The IPv6 Portal. 

Fresh from my inbox today is an e-mail from Jonathan Askin, the VoIP policy czar/advisor of Pulver.com (one of his many gigs).  He is also the Acting Executive Director for the Global IP Alliance, an "international consortium of IP-based communications services and application providers committed to realizing the promise of interconnecting IP-based communications providers".

Jonathan and Jeff Pulver are spearheading an effort to develop a VoIP policy status matrix and are using a Wiki to update the information.  This will allow all industry participants (vendors, service providers, analysts, reporters, etc.) to get a quick snapshot of VoIP regulatory developments around the world.  I think it is a great initiative, and plan to make a few contributions to the cause myself.

Robert Scoble proved to be a resourceful and persistent blogger in the quest for capturing the essence of his company's CEO (Steve Ballmer).  The video is available on MSDN Channel 9 (video forum), and it comes with a complete transcript as well.  In particular, I loved Steve's answer about blogging:

Q: Microsoft has been a leader in transparency, blogging, and Channel 9. Why did you allow blogging to happen?

A: In the world of developers I don’t think it would have mattered if I wanted to allow blogging to happen or not. But I think it’s been a great way for us to communicate to our customers and for our customers, more importantly, to communicate with us. We trust our people to represent our company. That’s what they are paid to do. If they don’t want to be here they wouldn’t be here. So in a sense you don’t run any more risk letting someone express themselves on a blog than you do letting them go out and see a customer on their own anyway. It just touches more people. Hey, if people need to be trained or understand better we can do that but I find that it’s just a great way to have customer communications.

Broadband News had an interesting post giving some detail on a couple of recent TV over broadband announcements: one in South Africa, where Telkom is planning to trial a new triple play service within 3 months, and the second one in the UK, where BT is announcing consumer trials early next year.  BT will be yet another carrier to use Microsoft's IPTV, which is yet another testimony that Microsoft is slowly but surely the early winner in the IPTV sweepstakes, at least in mind share. 

But it is worthwhile pointing out that Om Malik had a great interview recently with Bill Smith (the CTO of Bell South, whom I had the opportunity to chat with at Supercomm) and when the topic of IPTV came out, here is what Mr. Smith had to say:

" We have had our eyes open on IPTV, and none of the problems you mentioned were a surprise to us. Our primary concern was scalability, and we are working with them. "

This obviously came after the Swisscom delay, and it just underscores that IPTV technology still remains a work in progress.  Some analysts are pegging the total number of homes connected to IPTV to be about 20 million by 2008 - not a big number, by any stretch of imagination.  Interestingly enough, Microsoft is going the proprietary way - pushing Windows Media 9 instead of MPEG-4 compression, despite the fact that many telcos are opting for the MPEG-4 codec.

For a more in-depth discussion of IPTV, here is an excellent resource: Roger Towne's web page.

Recent news from Brazil indicated that the adoption a surprisingly rapid proliferation of VOIP within Brazil.  Abrafix, the Brazilian association for wireline carriers (a non-profit organization that could be more or less though of as a Brazilian version of the Stentor Alliance) published some research on June 20th claiming that 36% of Brazil's outgoing international calls are being made via "unlicensed" operators selling some sort of LD (VoIP toll bypass).  "Unlicensed" in Abrafix lingo means not having the license from Anatel to participate in this sector. 

Estimates indicate that there are roughly 1,9 million VoIP users in Brazil (not including Skype), representing over 3% of the existing line base already making VOIP calls.  This is enough to begin having a measurable impact on traffic, and eventually, on pricing.  Obviously, the biggest pressure will be on the LD market, due to the exorbitant tariffs for LD calls.  However, given the growing number of subscribers making free peer-to-peer local calls, local tariffs will obviously also have to drop (it is about time! - we are so spoiled over here in Canada and in the US that we do not even know what a local impulse is). 

Also worthwhile pointing out that Skype CEO Niklas Zennström mentioned on an interview earlier this year with Valor Economico that Brazil currently is the fourth largest base of Skype users in the world, with roughly 2 million users.  This figure is only surpassed by the US, Taiwan and Poland.  More impressively, the Skype growth in Brazil has been about 7,000 new adds per day, which would translate to roughly 3.3 million users by the end of 2005 (about 6% of the installed fixed line base).  That is a huge result that can have a lot of ramifications - no wonder the telcos have already begun to actively lobby the government to update the General Law of Telecommunications, in order to address the new realities of the marketplace and issues such as convergence and the impact of VoIP.

Ben Charny had a great post on the backlash of VoIP in Germany. Vodafone Germany made it known to German telecom regulators (during a tariff filing) that it plans to disable calls from Skype and other Internet-based VoIP operators.  Obviously, wireless operators are feeling threatened by VoIP - that is pretty much a similar reaction to their wireline counterparts.  However, with the advent of seamless roaming ,VoIP running on a flat-fee based WLAN model and a pretty decent QoS (using CODECs such as GIPS) can certainly be a big problem to wireless operators.  While the article does state that "Vodafone's other 15 divisions serving nations in Europe and Asia have not enacted such a policy", French operator SFR made a similar announcement back in March (i.e. that it will block VoIP and peer-to-peer streaming traffic).

I wonder what legal recourse Skype would have against this, but these are yet another couple of examples representing proofpoints that whoever owns the last mile typically has a huge turf advantage.  And even companies such as Vonage can be quite vulnerable.  OK, so Madison River Communications was caught in the act of port blocking and got slapped on the wrist by the FCC.  But that was sloppy on Madison River's part.  What if instead of port blocking, it would have just put on additional traffic, or added some randomly generated noise / delays / jitter / etc.?  Such an action would be much harder for Vonage or any other VoIP SP to prove, and hence would create a big barrier for a wider adoption of VoIP.

Many folks trying to predict the uptake of 3G in regions such as Europe and North America are looking at the Japanese and Asian experiences in order to obtain important insights into how things will develop in their own turf.  However, wireless telecommunication is all about the subscribers' personal choices, with cultural differences definitely playing a key factor.  Therefore, extrapolating the Asia/Pacific 3G experience thus far to another continent is definitely a risky proposition.

Nevertheless, even considering this caveat, there is definitely potential for some takeaway lessons from the Asian development up to now.  One observation that is applicable elsewhere is that 3G rarely changes the popularity of apps - chances are that the same apps that were popular in the 2G world will be the most widely used in 3G as well, with the main difference just being faster download speeds. 

There is much debate on the issue of the uptake of video telephony.  In Europe, for instance, it is regarded as an important component of 3G offers, with operators such as 3 or Vodafone having it as part of their portfolios.  In Japan, despite the fact that it was one of the cornerstones of the DoCoMo 3G portfolio, the uptake has been pretty disappointing thus far.  Culture might play a role here - chances are Europeans are less intimidated by video calls than people in Asia (a similar phenomenon to VM), at least when the call is informal.

Currently, there has been no Asian "killer app" on the data side - albeit data usage is increasing.  News, entertainment, ring tones, sound clips, games and screensavers all compete for the title of most popular non-voice app, but there is no current clear winner as of yet.  This can certainly be the case in other geographies, until some more refined applications emerge. 

So these are a few "uber" conclusions that can be drawn from the Asian experience - 3G still represents a technology in flux, with much growth to come in the years ahead.

It was really interesting to see how many people jumped on the CRTC bandwagon, praising its VoIP decision as being a savvy one, and one that really promotes competition by taking ILECs such as Bell Canada and Telus out of the game (at least on their own home turf – and let’s be honest about it: many folks seriously doubt that we will see those players actively promoting and campaigning VoIP offerings outside their incumbent territories).

Amazing how none of these so-called “expert” analysts (with a few exceptions, of course) picked up on the fact that even under a full deregulation VoIP scenario, the ILECs would have faced margin pressures, and would have had to reduce prices to maintain their market standings and stay competitive. As Michael Sabia himself declared in a Globe and Mail interview a few weeks ago, the telcos would need to cannibalize their own base to keep their market shares. But the consumer would have been the winner in that case, since a new lower price equilibrium would have been reached. Competition and lower pricing is what drives progress, and Japan is a great example of that (check out this TF entry about Yahoo! BB).

However, by preemptively taking the ILECs out of the VoIP game, the CRTC pretty much assured that the existing status-quo on pricing would continue (there will be some competition, but price drops will be small compared to what they would have otherwise been. Let’s take a look at the MSO VoIP launches thus far: most cablecos have thus far been pretty “rational” and “disciplined” in their pricing (e.g. Shaw’s $55 / month offering). The lone exception is Videotron, but the fact of that matter is that the MSOs will balance profitability and volume. So it is very unlikely for us to see a major price battle happen any time soon.

There is some hope that to stem the loss in local market share, Bell and Telus might resort to offering some discounts in Internet, video (Bell Canada’s ExpressVu service) and wireless segments, or perhaps offer some bundling savings. However, thus far, Bell announced that it was taking away its $5 offer for 1,000 LD monthly minutes anywhere in North America for customers subscribing to the Bell bundle (local, wireless, Internet and satellite service).

In the meantime, the incumbents are appealing the decision to the federal cabinet, a process that can take at the very least 6 to 9 months, particularly considering the current turbulence in Ottawa.  The fact that there were two dissenting opinions should provide the ILECs with some valuable ammunition during the appeals process. 

On a separate note, Industry Canada recently formed a 3-member panel to review the Canadian telecommunications policy. This initiative is essentially a broad review and is not expected to affect current CRTC proceedings. Chances are that the panel will probably zero in on less sensitive matters like broadband access and deployment, rather than VoIP and/or competitive issues, and will provide its recommendations to Industry Canada before the end of the year. The findings may have implications on the role of the CRTC in telecom regulations in the future.

SiliconValleyWatcher reports on a brand new VC fund totally devoted to investments in RSS (Really Simple Syndication), the syndication technology that has been made so popular with the advent of blogging. RSS Investors has been launched with $100 million to finance startups "championing RSS-related technologies, including news aggregation, blogs and new classes of search engines". RSS Investors will not only examine startups using RSS for news aggregation, but also "RSS applications that aggregate data, particularly in the financial and medical industries".

It is great to see this story unfold - RSS could very much be the next big core Internet technology (as the article itself points out, it is a "push-me, pull-me" mechanism - neither e-mail nor web page, but having characteristics of both).  More importantly, I believe that the next wave is for applications that manage RSS feeds (for instance, performing searches on key words and routing news feeds containing those words to a mailbox address - where the results could be displayed in an e-mail formatted in HTML with the original links or with a brand new document containing the original text and graphics).  And after that, content-based routing, as envisioned by Solace Systems.