Words to survive by

"The challenge we face is that we control very little. Sometimes it feels like we're always punching above our weight." - Robert Knowling, former Covad Communications CEO

At the beginning of a new year that is certain to be marked by tremendously more sober sensibilities than years past, it seems appropriate to reflect on the musings of a man who seemed to go from competitive exemplar to industry pariah in a matter of months.

In retrospect, the declaration Robert Knowling made at Supercomm 2000 in June was eerily prescient. At the time, Covad was just beginning to suffer the collective effects of a DSL downturn, precipitous capital markets, deadbeat ISPs and uncooperative incumbents. The end of Knowling's eminence was imminent.

Six months later, Knowling is gone, Covad's stock is hovering just above its 52-week low of a little more than a buck a share, and the company's remaining management is scurrying to shift its capital consumption, network buildout plans and customer acquisition strategies into survival mode.

Covad's troubles are certainly not novel, and in fact typify the plight of DSL providers and even competitive service providers overall. Whether there was something about Knowling's methods of management that contributed directly to Covad's demise probably will never be known to anyone but the company's board members and Knowling himself.

What's worth examining, though, is the meaning behind Knowling's Supercomm words. The context of his message was the incompetence of both the incumbents from which DSL wholesalers like Covad rely on to get access lines and the hardware and software suppliers whose gear helps transform those lines into Covad's bread and butter.

The concepts of control and the eternally secondary stature of the competitive class are central to how that service provider sector must transform to stave off extinction. To ensure their own survival, competitive service providers will need to become far more technologically flexible.

That means the designation of "DSL provider"must be cast away, taking with it some of the technological ramifications that go along with being beholden to an incumbent. DSL, for all its capabilities and speed-to-market characteristics, should be considered by competitive challengers to be a entry point first and ultimately just one element in a network that leverages multiple technologies.

Consider the alternative directions an outfit such as Covad - or, to be fair, any of the other struggling competitive service providers - would have had available to it in times of trouble if technologies such as broadband fixed wireless or free-space optics had been at its disposal. The task of connecting a network to customers, interconnecting with other networks or simply connecting a network to itself certainly must become at least somewhat less complex when multiple, varied technologies are available as deployment options.

Operations support is another area where technological flexibility is a requirement. It always has been, but for some reason, many members of the competitive carrier set have long considered proper OSS preparation somewhat of an afterthought. That stance results not only in provisioning snafus and greatly increased network technician costs but also in disillusioned customers and dried-up revenue streams.

To its credit, Covad is developing new distribution channels that could potentially help diversify its revenue streams. The next step for it and other emerging service providers is to similarly diversify its network to the point that the frustrating lack of control that made Knowling feel like he was flailing ceases to be a common competitive characteristic.