Manufacturing minutes NextWave seeks carriers' carrier status >BY Jason Meyers, Wireless Networks Editor >TX Part of what made NextWave unique and somewhat controversial when it began bidding for personal communication services licenses is that it was bor

The scene is fluid, dynamic, chaotic and driving telecom execs to distraction. At least some of them. Lucent Technologies' Executive Vice President Carleton Fiorina seems content. Not everyone in her line of work is.

Some execs express growing disappointment, particularly at the pace of broadband investments. They expected network operators' broadband investments to blossom following the landmark telecom legislation. Instead, there has been a pause, a hiatus. The longer the hiatus continues, the more disappointed they become.

Fiorina isn't buying. She's selling.

"If 'hiatus' means volume, I don't see it," Fiorina says. Lucent will report all-time volume in switching this year and in March had a record month at its main transmission plant. "In terms of volume, we're not seeing a falloff. We're seeing a strong year."

And she says the hiatus in broadband investments stems from a healthy cause-and will end soon.

"Telcos and the cable companies are undergoing a fundamental rethinking about their businesses and how they want to compete," she observes. "That is natural and positive."

Fiorina dismisses the notion that network operators should have had their post-legislation investment plans set and ready to execute immediately. Why? Because dramatic change is shocking. "Fundamentally, it isn't real until it happens. All the planning in the world is theoretical until it happens."

The Lucent exec also notes that for several years the big network operators as a group had been directing much of their investment outside their base areas, where regulation limited strategic options. Now, the capital flow is reversing itself.

"You're seeing capital coming back from outside the territory to inside the territory," she says. "More and more of that money is coming back home. Companies-cable and telco-are shoring up their home markets for competition."

Broadband will be a significant part of the redirection of capital-and soon, Fiorina predicts. "You will see companies building out broadband networks this year, even while they rethink their businesses."

A major element in the rethinking process is the dramatically changing relationship between wireless and wireline networks, many of which enjoy a common corporate parentage, Fiorina notes. "Wireless-for the first time-is now being contemplated not just as a complement to wireline but as a substitute for wireline. That has fundamental implications not just for the quality and reliability of wireless systems, but for how companies put packages together.

"In this new competitive environment, with the potential technology brings and with the possibilities that the regulatory environment now permits, both sides are thinking about how to bundle those assets for the first time and thinking about those assets as substitutable for one another.

"Wireless as a substitute for wireline isn't here yet, but it is in people's thinking in a significant way."

Will this new world require new corporations-or at least corporations with new characteristics?

Her own company recently born out of a sudden and dramatic event, Fiorina identifies three key characteristics that companies need today: speed, innovation and focus on customers.

Customer focus means focusing on particular customer sectors and ensuring that your company's service for those customers is the best available.

By "speed," Fiorina means speed in all its aspects-"speed in decision-making, speed in responsiveness to competitive threats or opportunities, to changes in the customer environment. Five years ago we all thought you had to be big to prosper in this industry. Now it is clear many smaller companies are prospering just fine. What those smaller companies bring to the table is speed. We are all learning from that. The infrastructures-the systems, the processes, the way we've always done things-have to change.... That is difficult for companies that have decades and decades of infrastructure devoted to doing things in a certain way," she notes, citing Lucent as an example.

Innovation means "the willingness to rethink just about everything that a company is doing," she says. "In other words, to not be carried forward merely by momentum. The next decade for the network industry is going to be dramatic." It will be about making networks "more responsive, more flexible, more accessible, more valuable. This requires a fundamental rethinking-innovation in its broadest sense."