Wednesday, January 17, 2007

Disconnected!

For days after the December 26, 2006 Taiwan Earthquake much of South
East Asia was disconnected from today's vital utility: The Internet.
Call centers shut down, emails bounced, Christmas pictures and videos
couldn't be shared, and manufacturing plants sat idle.

Several weeks later, the Internet is still mind-numbingly slow.
Experts predict it will take at least until the end of January for the
situation to normalize.

Back-up links have been powered up, but these are apparently limited in
number and capacity. The large telcos that regulators let operate
Asia's Internet simply couldn't foresee the need for such redundancies.

Regulators couldn't foresee that the Internet works best with a
multitude of interconnected small operators, not with a handful of
giant telephone companies relying on a limited number of fat pipes
branching off the real Internet.

It is an Asian problem, a structural weakness of Asian economies as
significant as the structural weaknesses that created the financial
crisis of the late 1990s.

It is a weakness that has been embarrassingly exposed, created when
regulatory agencies gave in to large telcos claims that they needed
"protection" before making the investments to connect to the Internet.

It is a perfect example of the problems created by what Economic
Planning Secretary Romulo Neri calls "regulatory capture," when the
industries being regulated manipulate rules to their own advantage,
instead of being guided by the country's need to be competitive.

We've seen how vulnerable we are in the hands of a dominant telco that
makes a credible claim to having the country's most advanced Internet
network. Break that advanced network's link, its single point of
failure, and we might as well all go on holiday.

Originally designed by the the United States Defense Department's
Advanced Research Projects Administration (ARPA) to connect the US
military, universities, and vital businesses, the Internet is built to
survive a nuclear war through a mesh of redundant connections.

In the real Internet, each node connects to numerous other nodes, and
losing one link has little effect--the technology auto-magically finds
another route via another node.

The redundancy is strengthened by adopting alternative technologies to
easily damaged cabled connections: Broadband wireless, microwave,
cellular, and satellite. More importantly, the links are two-way, with
each node supporting traffic to other nodes.

The very nature of that structure implies that the Internet must be
predominantly hundreds of small interconnected providers. More
providers = more redundant connections to each other. Stupidly allow
the old-fashioned oligopolistic telco business models, and you've
forced the fault-tolerant mesh structure into a hierarchical structure
with single points of failure.

Asia's hierarchical Internet, like the branches on a tree during a
storm, break away easily and can't even survive a deep sea earthquake.

It may have been an earthquake that caused last month's loss of
connectivity, but consider how vulnerable we are if our major telco's
Internet link to Japan's NTT is cut intentionally, for geopolitical
reasons?

In his last column, my uncle, Max Soliven, warns that Japan, although
presently docile and a major benefactor, has a dark side and can turn
on a dime from Dr. Jekyll to Mr. Hide. As more and more businesses use
the Internet as a vital tool, have we handed over our economy's on-off
switch to a wartime adversary?

Japan may no longer go back to its militaristic ways, but the mere
possibility and the vulnerability we have foolishly allowed are real
business risks. Even risk-averse Japanese investors consider that
possibility in their country evaluations.

Attention Regulators: The real Internet is composed of hundreds of
nodes, providers, and backbones connected to each other in a mesh
network of cabled, wireless, and satellite links.

We need links to several countries, owned by a multiplicity of
providers so no single entity controls our part of the Internet. We
need to encourage two-way local interconnectivity, so that providers
and vital institutions are redundantly connected to each other via
wired and wireless technologies.

It is not enough that we are a branch off the Internet at the mercy of
a vulnerable solitary link: For the sake of national security and
economic competitiveness, bring us the real Internet, with mesh
connections across the nation, and multiple connections via cable,
wireless, and satellite to other countries across the region.

As a result of the Taiwan earthquake, China announced that it will
install multiple routes to the Internet by the middle of this year.
Previously connected only through Japan, China will encourage internal
links among its providers and connect directly to Southeast Asia (via
Hong Kong), India, Europe, Russia, and the United States.

With a superior Internet infrastructure, better access to financing,
and 1.3 billion people, all China needs to do to trample all over our
outsourcing industry is learn English.