A look at the big happenings of ’05

If you’re tracking telcos, 2005 has been a pretty momentous year. The big theme? Seismic shifts in the communications industry. Take a look at what’s happened:

Major mergers. 2005 will go down as the year that fundamentally reshaped the face of the telecommunications playing field, with SBC buying AT&T and Verizon picking up MCI. There’s more to the story than market consolidation, however. The real significance of these mergers is that they provide unassailable evidence of the flawed logic of the original 1984 division of telcos into “long-distance” and “local” carriers. Simply put, offering long-distance services alone isn’t a viable business.

Crime and punishment. This also was the year Bernie Ebbers was found guilty of accounting fraud and sentenced to 25 years in prison. Again, this story is about more than its face value. Sure, Ebbers destroyed the careers and investments of thousands of people – but his sentencing also served as an example to the high-flying CEOs of the 1990s (including a disproportionate number of tech firm leaders) who played fast and loose with the truth. Innovation alone isn’t enough for companies to succeed. Ethics and integrity count, too.

Convergence is king. 2005 marked a major inflection point in the industry when it comes to convergence. Two years ago, IT executives who wanted to converge voice and data traffic had to convince skeptical bosses and peers. These days, it’s the IT executive who doesn’t want to converge who needs to justify the decision. In other words, it’s no longer about whether to converge traffic – it’s all about when.

Mainstream MPLS. Leading-edge enterprises are now flocking to MPLS-based services, and reaping significant benefits as a result. Nemertes Research recently benchmarked best practices at 75 major enterprises, and found that 57% are deploying or planning to deploy MPLS-based services. MPLS offers optimized support for critical applications, cost savings (particularly for converged traffic) and the ability to future-proof networks.

The untethered enterprise. As with convergence, wireless has gone mainstream. The majority of attendees at Network World’s IT Roadmap technology tour in December 2004 said their companies lacked both wireless infrastructure and a mobility strategy. This year, they’ve got both: A majority of attendees at the 2005 IT Roadmap said their companies had deployed wireless, and roughly 70% of enterprises benchmarked by Nemertes Research say they’ve got a mobility strategy. In a few years, all we’ll need Ethernet cabling for is power.

No glance back would be complete without looking at what hasn’t happened this year. The biggest void is that laws and policies haven’t even begun to catch up with these seismic shifts. The FCC is still regulating as though it’s 1996 (example: the universal service fund). Courts treat voice and data as though they’re fundamentally different traffic types rather than bits on a wire. And legislators are still taxing teleworkers.

Will any of that change in 2006? We can only hope so.