Heading east on I-70 into the Denver metro area, one encounters several large, blinking signs telling truckers that steep grades into Denver last longer and are more treacherous than they look. The repetition of "No, you are not down yet!" can unnerve even the driver of a subcompact, convinced that Denver is 10 hairpin catastrophes away.
Forgive those of us covering telecommunications, wondering in the wake of SEC probes of Lucent and Nortel if there is any such thing as bottom. The only solace we have is the same one Japanese bankers cling to about collapsing interest rates, since numbers tied to tangible assets can't fall below zero. The sober executives still employed in the carrier or equipment industry were simply keeping their heads down, prepared to ride at the bottom of the trough-provided they could see an edge ramping upward in the distance.
In reality, we have hit that inflection point. Orders are picking up in Asia for switching and routing equipment of all kinds. Europe is following suit, and even North America is showing tentative signs of life. The problem is that the publicly traded telecom OEM is now treated like the kid in detention. A minor infraction that would be unnoticed in the transportation or construction industries is magnified a thousandfold here.
Telcordia veteran Bob Lucky, who keynoted the recent Communication Design Conference, came to eerily similar conclusions as market analyst Tom Nolle. If you think the public bit-transport business is as low as it can be, watch out for voice-over-Internet Protocol (VoIP) service providers like Skype or Vonage that set an expectation of free service.
Carriers realize that data transport is a commodity business without differentiated service. If the Session Initiation Protocol model of VoIP becomes popular, the ability to make money on packet voice disappears. Yet they are following the lemmings into profitless oblivion.
Lucky ended his speech with serious doubts as to whether a viable business can be managed in IP transport. As carriers and OEMs struggle to prove otherwise, the SEC will be watching them closely. And the signs along the side of the road will continue to blink, warning, "You are not down yet!" Let's hope that means spirits and not business conditions.
Loring Wirbel is Communications editorial director for EE Times and its network publications.