OPTIMISTIC OUTLOOK

There haven't been a lot of blue-sky days in telecom lately. Every bit of silver lining has come with a cloud attached. Reasons for optimism are growing, however — and in unlikely places. First, there is a renewed sense among those outside the industry that advanced telecommunications is again a critical business. Although many may see the municipal interest in building broadband networks to be a dangerous trend, the underlying reasons for that interest are very positive. Businessmen and politicians, at least at the local level, are realizing the critical nature of telecom infrastructure and making it a priority. Second, there is a renewed level of innovation in the industry that we haven't seen since before the telecom bubble burst in 2001. In areas including voice-over-IP, IPTV and IP multimedia subsystems, smaller companies are again springing up with creative solutions to nagging problems. And they are finding investors willing to fund product development. Innovation was what fueled much of the go-go 1990s, from the early Internet players to the companies such as Ciena, Redback Networks and Cerent, which saw critical problems arise and developed solutions. It's exciting to consider what could lie ahead. Third, consolidation, while disruptive, has been seen as inevitable for so long that the fact it finally arrived is a positive sign, as well, that the industry is moving forward in a rational way. There is still no need for mindless euphoria, but telecom is entitled to its more upbeat outlook.