The Big Debate at the Inter-Company Working Group

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Presentations by Howard Lichtman of the HPL, Brent Houlahan of Unisys, Aaron Roe of Deloitte and Peter Brockmann of Brockmann & Company, were well received by the nearly 30 attendees from Canada, the US and Europe. After the final presentation, Howard led a working group discussion with executives from a number of leading Video Managed Service Providers in attendance (iVCI, iFormata, York Telecom, BCS Global and the carrier MASERGY to name a few) to review the state of inter-company telepresence and video conferencing issues.

The hottest question was around the economics of inter-company telepresence. Several VMSPs argued that enabling inter-company services for each of the customers of two different VMSPs meant that both customers were satisfied, and the mission of both service providers were correctly fulfilled. The point: inter-company depends on inter-VMSP too.

Some service providers suggested that the carriers with video services (who were not in attendance) would support inter-company services only by charging their customers and the connecting VMSP and their customers some kind of fee. The VMSPs in attendance felt that carriers would argue that their networks of customers are so much greater than the networks of the VMSPs and therefore should be compensated for the greater value of their contribution to the larger combined network. Much of this argument is reminiscent of the FCC mandated termination charge (although each phone company negotiated it's own termination fee) paid by long distance telephone companies to local phone companies to terminate long distance traffic.

This giant accounting gimmick enables substantial market distortions such as the arbitrage application of free conference calls. And, of course, this narrow-minded thinking impedes the growth of the inter-company market by excluding the carrier customers from inter-company communications (aka off-net telepresence and video conferencing).

In the face of this narrow thinking by the classic telephone companies, the independent VMSPs will do is what they have done before - they will INNOVATE. They will interoperate as their customers and business practices demand. Brockmann & Company predicts that many will band together along a set of standardized terms and practices such as the BCS Global-led Public Switched Video Network framework.

Besides, how much market share of video and telepresence services do the carriers really have?

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