The NetSuds Report - September 2001

The September 25 NetSuds Evening Gathering is Co-Sponsored By

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        1.0 Heard on the Net
        2.0 Jobs in the "com and .com" Market
        3.0 NetSuds on Tour - Onvoy, Integra Telecom
        4.0 exADC.com
        5.0 Calendar of Events
        6.0 A Feature is Not a Company
        7.0 Growing Your Business in Iowa's SiliCorn Valley
        8.0 Apply to Present at a NetSuds or MedicalSuds Entrepreneurs Breakfast
        9.0 Tidbits
        10.0 IP Telephony - Outlaws in India
        11.0 Presence and Instant Messaging is now SIMPLE!
        12.0 When Will "It" Be Back?
        13.0 Guest Writers for this Report

        Please email: people@netsuds.com to report a change in your
        job status if you are moving from or to a company in the
        "com or .com" space.

        NetSudser Harvey Freeman networked his way to be a Senior Consultant
        at HeatSeeker Technology Partners. Conctact Harvey at either
        612.723.1650 or harvey.freeman@hstp.com.

        NetSudser John Feikema (formerly president of CDXC) has joined
        VisionShare Inc. as president. VisionShare - www.visionshareinc.com -
        based in St. Paul, MN, is an IT security company. John can be reached
        at either 651-645-3300 or john.feikema@visionshareinc.com.

        NetSudser Darla Kashian has moved from Account Executive at
        Straightline Technologies to Senior Sales Representative at Sprint
        Business. She can be reached at 952-896-3755 or at
        darla.j.kashian@mail.sprint.com.

        NetSudser Daniel Duty has started Duty Negotiations, a practice
        helping individuals and businesses succeed by becoming effective
        negotiators. Contact Daniel at danielduty@qwest.net or
        612-822-0900 or see him at www.danielduty.com.

        NetSudser Merle Minda, formerly SVP at Fleishman-Hillard, Inc.,
        has started an independent consulting business called Merle Minda
        Plus - concentrating on branding and brand delivery, corporate
        video and interactive projects, internal communications and
        marketing. Merle can be reached at either mminda@earthlink.net
        or at 612-377-5055.

        NetSudsers Eric Lindberg and Phil Aune have joined Alebra Technologies,
        specialists in secure networking and eProductivity, as Director of Sales
        (Eric) and Director of Business Development (Phil). Eric was most
        recently at Advanced Technologies Integration (ATI) and Phil was at NCS
        Pearson. Eric can be reached at eric.lindberg@alebra.com and Phil at
        phil.aune@alebra.com.

        NetSudser Pete Melrose, based in Brooklyn Park, recently has
        refocused his long-standing JPM International healthcare delivery
        information technology (IT) consulting practice on e-business not
        only for healthcare but also for other vertical markets. Contact
        Pete at 763-503-5626 or jpmelrose@earthlink.net.

        NetSudser Tom Guetzke recently left Coherent Solutions as their VP,
        Business Development to start MarketAdvantage, Inc. based in Eden
        Prairie. The firm assists emerging companies by developing sales
        and marketing strategies to optimize their growth. Contact Tom at
        tguetzke@mn.rr.com or 952-975-1774.

        NetSudser Maz Saeed has started EyeCon Systems, a custom software
        development and project management company based in Burnsville.
        Contact Maz Saeed, President, at either 952.250.6004 or
        max@eyeconsystems.com.

        Sanjiv G Parikh left ADC and joined NetNumber as Director of
        Business Development.

        NetSudser John Adams, johndadams@aol.com is looking for a position as
        a product manager of technology applications in the B2B marketplace
        in the Twin Cities.

        NetSudser Jeanette Sanders, former Helpdesk Support Team Leader for
        Qwest Communications, recently left as part of a mass down-sizing and
        is looking for a helpdesk support management or supervisory position.
        Jeanette can be contacted at 763-428-0172 or jesand1@yahoo.com.

        Please email: start-ups@netsuds.com to report (1) the
        formation of a new start-up, (2) momentum change at an
        existing start-up, (3) addition of key hires, or (4) a funding
        event at a start-up. Please give details on the above
        including any information you do not want made public. We
        are very discrete.

        A stealth-mode start-up in the Twin Cities is looking to hire 30
        people. Wanted: mostly software engineers with routing, OSS,
        network management and telecom backgrounds. Some marketing and
        sales people also needed. Send your resume and cover letter in
        Word format as attachments to stealth@netsuds.net. They are
        also looking for office space in the SW metro; 2500 sq. ft. with
        an option for 2500 more.

        MARKnETING, Internet marketing service owned by Miki Dzugan,
        has just purchased the iPares Marketing Group department of the
        former iPares. MARKnETING specializes in assisting companies
        to more effectively use the Internet in communicating with their
        customers, prospects and the community as a whole. The iPares
        group specializes in pay for performance advertising and building
        of online partnerships. The combined company plans to locate in
        downtown St. Paul. See http://www.markneting.com for details.

        NetSudser Ken Thoreson, President of Acumen Management has been selected
        by Microsoft Corporation to be a featured speaker at their International
        Fusion Conference, July 12th-16th, 2002. This annual event attracts over
        4,000 people from around the world to learn about the latest information
        on Microsoft's strategy/solutions. Thoreson's 2-hour Forum session is
        titled: "How to Build a High Performance Sales Team Through Effective
        Sales Management". This is the second year that Acumen Management has
        presented at Fusion. Acumen Management Group, Ltd. is based in Eden
        Prairie, MN and Knoxville, TN. Contact Ken at either 952-944-7438 or
        Ken@acumenmgmt.com.

        NetSudser Chris Hanson reports that Thedatabank has hired a new CEO as of
        August 6. Steve West, formerly of J. River, Inc. in Minneapolis will be
        the new CEO.

        Alebra Technologies Inc. (www.alebra.com) is the result of the merger of
        Secour Communication, Dubra & Associates and Morlok Research. Morlok and
        Dubra each had been in business since 1991, with Morlok providing e-Commerce
        productivity assessments and web site evaluations and Dubra providing
        network consulting and security services. Secour Communications, an IT
        consulting firm, acquired both companies and in June, 2001 changed the name
        to Alebra Technologies. Gerry Fisher, is the Chief Executive Officier of
        the new company. The company is headquartered in Shoreview, MN.

NetSuds loves on-site tours! Email me if you want to show off your
company. I can be reached at matt@netsuds.com.

        First, some background. Onvoy was formed by the marriage of MRnet
        (data, Internet) and MEANS Telecom (voice). It represented many rural
        Minnesota telecommunication service providers. Today, Onvoy has one
        of the largest fiber networks in the State, with many OC-48 links and
        some OC-192 links. Like other CLECs (competitive local exchange
        carriers) or Integrated Communication Providers (ICPs), not all the
        fiber is "lit".

        When Janice Aune was hired as CEO in 2000, Onvoy was in the midst of a
        DSL roll-out and was trialing VoDSL in certain markets. DSL has proven
        to be a tough business and Onvoy exited that market in favor of T1, T3
        and OC-X services for data, voice, Internet and video traffic. They
        are one of the few ICPs who maintain their own SS7 network elements for
        voice call routing.

        Touring their facility, it is instructive to see that, once again, no
        single supplier provides all or even close to a majority of the equipment
        in the network. ADC, Cisco, Juniper, Nortel, CAC, Octel, Lucent (Cascade,
        Livingston, etc.), Alcatel, Redback, Accelerated Networks, etc. all had
        equipment present. Best in class beats single vendor.

        Onvoy is not the new kid on the block but the battle-scarred veteran with
        lots of experience under its belt building real networks with lots of
        services in Minnesota.

        While not privy to their future plans, it is clear that 2 trends are
        present and motivating strategy: (1) IP and (2) converged networks. The
        fastest growth segment is IP; faster than TDM, frame relay or ATM. Not
        too surprisingly, T1s and OC-X pipes are still increasing and price
        pressure is occuring. Fatter pipes running converged services (IP and
        voice) seem to be the trend they are tracking. Sure, Gigabit Ethernet,
        POS and other cool technologies like MPLS (multi-protocol label switching,
        not the airport or the city) are being considered or deployed, but IP and
        convergence seem to be front-burner.

        Onvoy has done a good job in its backyard - Minnesota. Many ICPs and CLECs
        tried to be national plays quickly and found the roll-outs to be very
        difficult. I expect we will see more good things from Onvoy and Janice
        Aune. Competition is heating up and the victors will be the ones who can
        execute a great strategy and be nimble in the market.

        3.1 Integra Telecom

        CLECs are not all the same. I learned this after visiting with Carol
        Wirsbinski, Anita Legacy and Heidi Soderberg at Integra Telecom. Integra
        was built both organically and through acquisition. I visited the local
        Scott-Rice Telephone Company (acquired by Integra) and found some of the
        legacy (no pun intended) gear and some of the coolest new gear. It was
        the first Siemens central office switch I've seen in the Twin Cities but
        it must have been the sixth Cerent/Cisco optical box I've seen.

        The engineer who gave me the tour obviously had grown up with local
        loop and central office issues but was having a great time installing and
        working with the new datacom and telecom boxes. It takes a good breadth
        of expertise to work with a Siemens switch and the newest optical equipment.
        Integra's other central offices use switches from 2 other vendors and they
        all interoperate fine. Again, ADC was represented well in this office as
        were Carrier Access and Cisco. "Best in breed", not "single vendor" is a
        recurring theme at all the CLECs.

        The Integra fiber optic network is both leased and owned. Unlike many other
        CLECs, Integra is geared more towards small businesses. They don't offer
        fiber optic access to their network. In fact, the highest speed circuit
        offering is a T1. The T1 is still the workhorse of most business
        communications. A growing trend seen by Integra is convergence; mixing
        voice and data on the same T1. Don't be surprised to see more product
        offerings like this from Integra and other CLECs. It makes great sense for
        CLECs to offer converged services rather see their customers leave for CLECs
        who do offer this service. See what competition does! Just think what would
        happen if we had competition for local RESIDENTIAL phone service. Perhaps a
        single broadband pipe (DSL, cable, wireless, fiber) carrying voice, video and
        data traffic.

        I also visited Integra's Bloomington offices and saw a relatively large,
        well-organized staff tending to the ongoing business of running a phone company.
        Carol has done a good job maintaining and building a well-established CLEC which
        seems to be competing well and servicing clients. The competition is turning up
        in this market, though. Integra is headquartered in Oregon and has operations
        in a few far-flung markets. It's growth policy which seems to be based on ROI
        and not some grand scheme of conquering the world in 30 days. I'm impressed
        with Carol and her style. I've always been impressed with my NetSuds friends
        Heidi (formerly Cable & Wireless) and Anita (formerly Nextel) and the work they
        do. Integra brings a rare mix of local loop and small/medium-sized business
        services to the table. It should position them well in the CLEC wars.

        A few months ago I registered the domain name exadc.com. It's currently
        hosted on my server but I haven't had the time to do much with it. I
        offered to allow a company or individual wanting to build the website to
        profit from the exposure or advertising they could get from it. So far
        I am shocked that none of the dozen or so inquiries followed through.

        I think there is tremendous value to the website. Think of an executive
        search firm who could capture some of the 8,000-10,000 ex-ADC folks who
        have departed ADC in the last 6 months. Or a PR firm who could ...

        My offer still stands. Contact me if you're interested in building up
        the exadc.com website. My requirements are simple: (1) you must do it
        for free, (2) you must provide email forwarding, e.g. john.smith@exadc.com
        forwards to John Smith's new email address and (3) you must create a
        searchable database based on first name, last name or new company name.

by NetSudser Kim Garretson who runs Real Life, a Content Agency.

He can be reached at kimg@livinghome.net.

        Despite the market doom, there seem to be plenty of entrepreneurs still
        hatching companies, often for the first time, or with hard lessons
        learned from the last time. However, often I'm seeing one lesson not
        learned by these entrepreneur wannabe's: You can no longer build a
        company out of a 'cool little thing'. I continue to be bombarded with
        business plans centered on nothing more than a possible feature for
        enhancing a bigger business. Recent examples:

        . Putting youth sports leagues together for group buying power of
        T-shirts
        . Something called FemaleGarden.com (use your imagination)
        . The return of push technologies simply sending stuff down the pipe
        in the background

        Time out, Dreamers. While most of you now say you will not IPO your
        concept in a year, but instead will sell it to some bigger company, I
        think you're sadly delusional.

        When I ask entrepreneurs to bring me comparable stories of entrepreneurs
        who have in the last year sold a company with a cool little thing -
        even if it had managed to generate some revenue as a 'company' - I
        usually don't get much back.

        I suggest these entrepreneurs examine two paths:
        1. Am I missing something in my execution of my idea that actually is
            a bigger thing?
        2. Is there a large company that would hire me to create this feature
            within their company, and be rewarded justly if I pull it off?

        An example of the first path is a company that built a cool tool for
        marketers only to have to then develop a new way to distribute it to
        multiple Web sites. When the tool didn't sell, they looked at what had
        been an afterthought - their content transfer infrastructure system -
        and discovered a business that solves pain in the content management
        segment. Now they've just raised new money in Minnesota, secured some
        strategic partners, and appear to be on they way to success.

        In the second case, I'm seeing many smart successful companies on the
        lookout for 'bargains' in hiring the inventors of cool features to
        enhance their business. While the entrepreneur likely won't make
        millions anytime soon, he/she can fulfill their vision within a larger
        company. And that can be a win for the company, the marketplace and
        the ego of the person with the passion.

        Note: credit for this article's headline goes to Steve Larsen, ex-Net Perceptions.

        By Iowa NetSudser Patrick Bosold, Patrick@CoolCall.com or 641.470.3114.

        A hotbed of high-tech entrepreneurship in the cornfields of southeast
        Iowa? That's the calling card for Iowa's SiliCorn Valley. Located
        in Fairfield, a small town in southeast Iowa, Silicorn Valley has
        been the birthplace of more than forty software, hardware, Internet,
        telecommunications and high-tech manufacturing companies during the
        past two decades. Currently, Fairfield is home to a leading
        infomercial production company, one of the largest international
        "call back" telecommunications providers, and a direct-sales book
        marketing firm that was acquired by Reader's Digest two years ago for
        approximately $300 million.

        Burt Chojnowski is the founder and CEO of CoolCall.com, an IP
        Telephony startup based in Fairfield. Burt and the Fairfield
        Entrepreneurs Association (FEA) are hosting a one-day event on
        "Growing Your Business in Iowa's SiliCorn Valley" on September 13,
        2001. Don't be put off by the Iowa-centric title of the event. It's
        open to entrepreneurs from all over the Midwest and will feature
        prominent speakers and panelists from both coasts, including a few
        from California's Silicon Valley.

        "Growing Your Business in Iowa's SiliCorn Valley" workshops will
        include sessions with seasoned venture capitalists, business leaders,
        successful entrepreneurs and a keynote presentation on "The Early
        Stage Financing Life Cycle: From Friends, Family and Fools to Angels
        and VCs to IPO/Acquisition or Operation as an Independent Business."
        Other expected speakers include representatives from the Iowa office
        of Hopewell Ventures, a new Chicago-based VC fund whose mission
        statement is to "focus on the Midwest and the Midwestern
        entrepreneurial startups that comprise one of America's biggest
        overlooked opportunities for venture capital investment."

        Anyone who'd like to know more about how to start up and sustain a
        high-tech or Internet-based company-whether in a major metro area or
        a small Midwestern town is invited to attend "Growing Your Business
        in Iowa's SiliCorn Valley." Fairfield and SiliCorn Valley are home
        to the aforementioned software and telecommunications companies as
        well as numerous brokerage, financial advisory and other service-related
        businesses. Burt Chojnowski will be leading an "Entrepreneurs Think
        Tank" panel discussion that will feature five successful Silicorn
        Valley entrepreneurs. They will talk about the businesses they started,
        how they got them funded and how they made them successful.

        If you're interested in attending the FEA event on September 13, 2001,
        you can contact Patrick Bosold, CoolCall's Corporate Communications
        Coordinator at Patrick@CoolCall.com or 641.470.3114. See also
        http://www.fairfieldiowa.com/fea.cfm

8.0 Apply to Present at a MedicalSuds or NetSuds Entrepreneurs Breakfast

        Every month since Autumn 1999 NetSuds has had an Entrepreneurs
        Breakfast (see http://www.netsuds.com/eb/ for past and current
        events). If you are a pre-IPO "com or .com" start-up, you can apply
        to present your company to the investment community at a future
        breakfast event. Apply online at http://www.netsuds.com/eb

Apply to present at a MedicalSuds Entrepreneurs Breakfast (coming soon)
at http://formmail.to/medsuds

        From the August 03, 2001 03:59 PM Pacific Telecom Report from InfoWorld.com

        THE TECH SECTOR'S ongoing struggles have led a consumer advocacy research
        group to point a finger of blame at the RBOCs (regional Bell operating
        companies). The New Networks Institute, in New York, said in a report that
        anti-competitive behavior by the Bells and their failure to deploy
        broadband services has stifled investment and growth potential in technology.

        The report was criticized Friday by some analysts and an industry spokesman
        who said the Bells have spent billions of dollars toward the broadband rollout.

        For the full story: http://www.infoworld.com/articles/hn/xml/01/08/03/010803hnbabybells.xml?0807tuunknown

        From the August 16 issue of InternetWeek.

        Dow Chemical is setting out to disprove skeptics who say it's not worth the
        money to run data and voice over the same network.

        The $23 billion manufacturer is putting the finishing touches on DowNet, a
        converged network based on Cisco's Architecture for Voice Video and Integrated
        Data (AVVID) technology. By November, all technology choices will be finalized
        for Dow's 450 offices worldwide, and by next March all 50,000 employees will
        be connected. Dow's will be the largest known converged network and a proving
        ground for integrated voice-data networks.

        Dow says pooling its global telephony and WAN operations under a single
        contract will result in sizable -- though unspecified -- cost savings. The
        company is paying EDS $1.4 billion over seven years to build and maintain
        the network. --- Jade Boyd

        Read on: http://update.internetweek.com/cgi-bin4/flo?y=eD8P0BiHaO0V30RHx0Af

        9.3 Suds Gathering Summaries

        NetSudser and MedicalSudser Joan Moser is writing up summaries of various
        events around town and calling them and publishing them in "Twin Cities
        Speaks" Read about various events she attends at
        http://www.spokenimpact.com/newletter%20Aug%202001.htm

        9.4 Voice XML Version 2 Stalled Over IP Issue

        From the August 24, 2001 11:52 AM Pacific Telecom Report from InfoWorld.com

        VERSION 2 OF the Voice XML markup language is all but signed and sealed,
        but not quite delivered due to a snag in nailing down IP (intellectual
        property) rights.

        According to an industry analyst familiar with the issues discussed at the
        Voice XML Forum, all the specifications have been agreed upon, but there
        is a concern still that a future developer using VXML could be sued by a
        member of the Forum for infringement of IP rights.

        For the full story: http://www.infoworld.com/articles/hn/xml/01/08/24/010824hnvoice.xml?0828tuunknown

        9.5 Qwest, Loudcloud Cut Partnership Deal

        In my August issue of the NetSuds Monthly Report, I commented on the marriage
        of CLECs and ASPs; pipes and water. The marriage of ILEC (Qwest) and
        super-ASP (LoudCloud) should be a huge wake-up call to the CLECs and ASPs.
        While the bureacracy of the Qwest/LoudCloud partnership will present a great
        challenge, it's a challenge which both realize will position them stronger
        when selling to business customers. Read on ...

        From the August 29 issue of InternetWeek

        Qwest Communications and Loudcloud cut a five year preferred partner deal that
        commingles their networking and managed hosting sales and services.

        As part of the deal, both companies will co-market and sell each other's
        services. Loudcloud customers gain the benefit of Qwest's network. Qwest will
        look to Loudcloud when it sells hosting and complex Web application management
        services. Loudcloud hosting will take place in Qwest CyberCenters, the
        companies said.

        At least one Loudcloud customer was pleased by the arrangement. "The whole
        managed service provider market, as well as telecommunications, are both prime
        for consolidation," said Adriaan Bouten, vice president of technology and
        business development at USAToday.com. "As a Loudcloud customer, I think a
        strong relationship with Qwest will help Loudcloud come out as one of the
        winners. --Margie Semilof

        Get the whole story: http://update.internetweek.com/cgi-bin4/flo?y=eESV0BiHaO0V30RjT0AD

        9.6 Beer vs Nortel Stock

        from iSudser Kevin Kelly of Raleigh, NC

        On July 26, 2000, two friends, Jim and John, each got a $1000 bonus at work.
        (They both work for Nortel Networks, where in the summer of 2000, there was
        LOTS of money around for bonuses). Jim, being an intelligent, financially
        conscientious person, put the whole $1000 into Nortel Networks stock. With
        his $1000, and the transaction cost of $35, he was able to purchase 7 shares
        at $123 each. Having watched the Nortel stock climb and climb, he felt very
        good about this investment, happy that he is preparing for the future.

        John, being a more care-free sort, did something slightly different with his
        $1000. John borrowed a friend's truck, and proceeded to the Beer Store,
        where he purchased 33 cases of beer. John also felt very good about his
        investment: 33 cases x 24 = is 792 bottles of beer! John, also being an
        intelligent guy, although perhaps not as forward-thinking as Jim, calculated
        that he could drink about 15 bottles per week, and he wouldn't have to buy
        beer for a whole year.

        Jim, of course, was appalled by John's purchase, and berated him constantly
        about it. As months went by, Jim excitedly watched the stock prices, and
        saw it start to dwindle. "It'll go back up", he'd say to Jim. Jim, who has
        been reaping the benefits of his investment on a daily basis, would reply,
        "Ya, it will. Hang in there buddy <burp>".

        Months went by, and the value of the stock continued to fall, and there was
        the beginnings of a noticeable dent in the beer pile.

        Midwinter came, Jim's stock had fallen to about half of it's original value,
        and John's beer was about half gone. Jim, being sure that the stock had hit
        rock-bottom, still was berating John for his frivolous purchase, telling him
        "Your beer will be gone in six months! Who knows what my stock will be worth!!".

        Well, summer has come, and hard times at Nortel continue. Bad news: Both
        John and Jim have been affected by the layoffs. Last week, in order to raise
        some cash to help through the rough time, Jim sold his 7 shares, at that day's
        value of $12, and got $84, then after paying the $35 transaction fee, he only
        had $49.

        Jim stopped by John's house later that day (everyone needs their friend's
        during rough times), and as luck would have it, there were two bottles of
        John's beer left. John, being a good, compassionate friend, offered to share
        his last two bottles of beer with his friend. Jim appreciated the gesture,
        and enjoyed the cold beer on the hot summer's day, but he felt a bit guilty.
        "At least I got fifty bucks back out of it - you have nothing now.", he said.
        "That's ok.", replied John. "Perhaps you can help me, I need to return all
        these empties.", he added as his other friend with the truck pulled in.
        So, they loaded up the truck, and proceeded off to the beer store.

        Upon arrival at the beer store, they unloaded the empties, feeling a little
        grim. John went to the counter, and collected his refund for the bottles.
        "33 cases x 24 bottles, at 10 cents per bottle, that comes to $79.20", the
        friendly Beer Store clerk said to John as he handed him the money. Jim was
        speechless. Poor guy. Can you imagine how you would feel if you just
        discovered that over the course of the last year, your $1000 stock investment
        left you with $50, and taking same 1000, buying beer, and drinking it, would
        leave you with $80. I'll leave it up to the reader to come up with they're
        own "moral to the story".

        Have a nice day, and happy investing.

        9.7 How To Deliver A Winning Investment Pitch

        Investors see hundreds of plans a month but only a handful of presentations;
        therefore it is a critical component of raising funds. You want to showcase
        your unique story and winning concept, but what is the most effective way to
        achieve this? Joan Moser, President of Spoken Impact, specializes in
        helping start-up organizations develop winning investment pitches. She will
        share case studies of pitches that have worked and those that have not and
        why. She has invited two local entrepreneurs to also share their stories of
        what they have learned pitching to investors.

        Thursday, September 13, 2001, 9:00 AM - 11:30 AM, Minnesota Project Innovation,
        100 Mill Place, 111 Third Ave South, Minneapolis, Call to Register:
        612-338-3280 joan.moser@spokenimpact.com, www.SpokenImpact.com, 612.377.3686

        by Jeff Pulver See http://pulver.com/reports/ to subsribe to the
        best Reports in the IP Communications Industry

        Indian ISP needs the HELP of the worldwide IP Communications Community

        Internet telephony is illegal in India in order to protect the
        accounting-rate revenues of the dominant PSTN (Bharat Sanchar Nigam
        Limited) and the sole monopoly international voice carrier, Videsh
        Sanchar Nigam Limited. BSNL (the recently privatized operations and
        service wing of the Department of Telecommunications) is wholly owned
        by the government of India and the majority stake in VSNL is held by
        the Indian government.

        Anyone found indulging in real-time internet telephony is liable for
        imprisonment. (This is not a joke.)

        Indian ISPs are required, under the terms of their license, "to take
        steps to ensure that their networks are not being used for internet
        telephony". Further, Clause 1.12.3 of the ISP License Agreement
        reads: "Telephony on the Internet: is not permitted. The ISP's
        license will be liable for termination for any violation of this
        clause of the License Agreement. The Licensee shall also take
        measures on his own and as and when directed by the government at its
        own cost to *BAR* carriage of telephone traffic over the Internet."

        Indian ISPs have blocked access to the websites of Vocaltec, Net2Phone,
        DialPad etc. so that Indians cannot download the internet telephony
        software required from these sites.

        Wipro Net (http://www.wipro.net) is one of India's leading ISPs
        licensed to provide Internet Access and Internet Content Services.
        Wipro Net had provided Internet Access services to a customer named RMB
        Software Private Limited who had co-located their servers at Wipro Net's
        nodes at 5 locations. RMB had sought dial-out PSTN lines from BSNL
        connected to its servers for providing Unified Messaging Services for
        transferring web content as well as for providing e-mail to voice mail
        messaging services to its downstream customers.

        During a surprise inspection visit by officials of BSNL and Department of
        Telecommunications to Wipro Net's node in the western Indian city of
        Ahmedabad, they came to the conclusion that international voice calls
        were being received at RMB's server, which was dialing out to local
        telephone subscribers over the PSTN. They surmised that thereby real-time
        telephone conversations were being carried over the Internet, which is
        illegal in India.

        Wipro Net argued that it was not aware that RMB Software was doing this,
        and further argued that there was no practical method by which they could
        detect that their co-located customer, RMB, was indulging in internet
        telephony.

        However, BSNL immediately disconnected Wipro Net's leased lines. Criminal
        proceedings were launched in Ahmedabad Criminal Court against RMB Software,
        as well as against Wipro Net for being an accessory to the crime. The
        Ahmedabad magistrate accepted that there was enough substance in the
        prosecution's complaint for Wipro Net to be arraigned as a co-accused. He
        was of the view that, prima facie, the prime accused RMB Software could
        not have carried Internet telephone traffic unless Wipro Net had provided
        it the necessary equipment, infrastructure and operational support.

        In response to Wipro Net's preliminary oral defense arguments that there is
        at present no technical method by which an ISP can detect Internet telephony,
        the Magistrate directed it to provide affidavits from
        internationally-recognized independent technical experts clarifying the
        reasons why Internet telephony cannot be detected by an ISP. He
        formulated a four-part test to determine Wipro Net's criminal liability,
        with the possibility of jail terms for its corporate officers:

        1. Are there any direct methods to conclusively detect Internet Telephony
           traffic at an ISP's point of presence?

        2. If there are no direct methods, then would it be possible to conclusively
           determine the flow of IP telephony traffic, through any other method?

        3. Are there any commercially available standard products to detect IP
           Telephony at an ISP's point of presence?

        4. Can Internet telephony traffic be detected, even if it flows over a tunnel
           such as IPSec?

        The burden of proof is on Wipro Net to prove that it exercised due diligence
        to detect Internet Telephony by its customers. The case is currently sub-judice.

        The Department of Telecommunications of the Government of India also issued a
        legal notice to Wipro Net seeking to show cause as to why its ISP license should
        not be terminated immediately. This would drive it out of business nationwide.

        You can contact Bruce Jacobs, email: Bruce.Jacobs@shawpittman.com, who is
        working on behalf of the VON Coalition, if you would like to help provide
        evidence or would like more information.

        by Jeff Pulver See http://pulver.com/reports/ to subsribe to the
        best Reports in the IP Communications Industry

        Late July, AOL sent a "progress report" to the FCC about its efforts to allow
        other companies to interoperate with its Instant Messaging network. The AOL-
        Time Warner merger decision by the FCC required that AOL allow other companies
        to connect to its network before it could start to leverage its broadband
        assets and include features such as video in its AIM product. Significantly,
        though, the progress report announced that AOL would be using SIP for Instant
        Messaging Leverage (SIMPLE) as the basis for its interoperation, initially
        developing a gateway to a "leading technology company" later this summer,
        followed by changes in its own client software.

        Jonathan Rosenberg, Chief Scientist for dynamicsoft and co-author of the SIP
        specification and numerous related documents, and Jon Peterson, senior
        technical industry liaison at Neustar and co-chair of the SIMPLE working
        group, were understandably enthusiastic when we spoke with them at the Summer
        2001 VON Developer's Conference following the announcement. Although SIP has
        already enjoyed wide popularity as a voice signaling protocol, service
        providers and equipment manufacturers are now seeing what else it can be used
        for. "This reflects that the whole industry is very aware that SIMPLE is out
        there, and that it is the dominant approach," Peterson explained. "The IM
        wars are over." Rosenberg seconded this assessment. "With both Microsoft and
        AOL backing these things, it's clear that this is the ultimate winner," he
        said, referring to Microsoft's inclusion of SIP in the upcoming Windows XP.

        More important than the coup this represents for SIP though, is its implicit
        anticipation of converged services which will all be supported by a SIP
        infrastructure. "I think it's a validation of not just the protocol, but the
        message behind it," proclaimed Rosenberg. "More than just messaging and
        presence, it's about integrating all your communications together ... enhanced
        communications services." Interest in combining voice, video, data and
        messaging is particularly important coming from AOL, not only because of the
        size of its client base, but also because of its cable assets and recent
        diversity of investments, including Amazon.com. "They're clearly branching out
        into new ideas and shaking things up," Peterson noted.

        But what does this mean for the rest of the instant messaging world? AOL's
        decision to use SIMPLE makes interoperability technically feasible, but there
        is still another piece to the puzzle. The report's mention of "cost sharing"
        with the upcoming partner suggests that getting AOL to open its network to
        other parties will take some deal-making and will only be on a
        server-to-server basis.

        And even the technical issues will take some work: AOL mentions in the report
        that solutions related to security, reliability and privacy had to be
        improvised because the IETF work in that area is not yet done. Rosenberg
        agreed with AOL's assessment, and encouraged AOL to come join the IETF
        discussions, noting that they had already started participating in some
        online discussions. "I use the Pulver Report as an open invitation to AOL to
        come and participate," he said. "Get involved to make sure it meets your
        requirements."

        Of course, this endorsement of SIMPLE will have an impact on other PIM
        standards efforts. "Within IETF the existing chartered work will continue to
        its completion, and there are certainly good ideas that will bleed over to
        SIP for Presence," Rosenberg noted. "Not all work leads to commercial
        success." Peterson felt that it made lots of sense for smaller companies to
        "fall in line" now that SIMPLE is being acknowledged as a standard.

        by Matt Marshall

        "Success is that old ABC -- ability, breaks, and courage." - Charles Luckman

        "Average people look for ways of getting away with it; successful people
        look for ways of getting on with it." -- Jim Rohn

        "Success is finding and doing to the best of your ability, in each moment of
        your life, what you enjoy most doing, what you can do best, and what has the
        greatest possibility of providing the means to live as you would like to
        live in relation to yourself and all persons you value." -- Nido Qubein

        "Achieve success in any area of life by identifying the optimum strategies
        and repeating them until they become habits." -- Charles J. Givens

        The wise owls of the venture capital world have a disheartening message:
        Don't hold your breath waiting for a recovery, and start finding creative
        ways to survive.

        Cliff Higgerson, 61, a partner at ComVentures, sits scheming while sipping
        coffee at his office in downtown Palo Alto. Based on his experience in
        past downturns, he believes the venture capital cycle in Silicon Valley
        won't recover until 2006 at the earliest, and it could be 2008. So he's
        devising how to invest. He sums it up with one word: scavenging.

        Len Baker, a venture capitalist for almost 28 years, sits in his offices
        less than a mile away, at Sutter Hill, and mulls over similar thoughts.
        He has studied economic theory, and is convinced that laws of supply and
        demand suggest the start-up sector won't recover for another "four,
        five or six years." It's the same cycle he saw in the late 60s and the
        80s. Tech breakthroughs led to high returns for investors, who in turn
        devoted more money to venture capital. But that crowded the industry
        and the cycle turned down, causing VCs to lose money and start-ups to
        lose funding -- and it took years to clear out.

        The prophesies strike fear in the hearts of younger venture capitalists.
        Hundreds have entered Silicon Valley over the last few years, have
        planted their first investments, and are waiting for the big payback.
        "That makes my stomach churn," says Jason Green, 34, a partner at U.S.
        Venture Partners. He says he's more optimistic about the future.

        True, not all seasoned investors are as pessimistic as Baker and
        Higgerson. Others say the forces of innovation are too powerful this
        time, and a sustained recovery will appear within the next year or two.
        But even the more optimistic are accounting for the possibility of a
        prolonged downturn. "I'll be hesitating for six months," says Wu-Fu
        Chen, a partner at Crimson Ventures, who has been jump-starting firms
        for more than 20 years. He puts himself in the optimist camp -- he
        believes the Internet promises to make communications cheaper and more
        efficient, and business prospects are promising in the long-term.

        Still, the hordes of cash that swamped the valley funded too many
        companies, he says. The new ideas in one of his specialties --
        telecommunications systems companies -- have been exhausted, he says,
        so he's waiting for a period of consolidation to play out. In the
        meantime, he'll be scavenging too. He's sifting through the rubble to
        find communications companies that need follow-on financing. If
        they've survived the downturn and have some customers, they make good
        investment opportunities, he says. Since the market has bid down
        valuations for these companies, he can scoop up greater portions of
        their shares for smaller amounts of investment.

        Despite the oft-heard claim that Silicon Valley venture capitalists act
        as lemmings, many say they are following different strategies to last
        through what could be a long downturn. Higgerson, for instance, says
        he is determined to be a contrarian. A month ago, he put out word that
        he was looking to buy into one of the most forsaken industries: the
        CLECs, or competing local exchange carriers, many of which have gone out
        of business. He wanted to find the best "mom and pop shop" out there,
        and last week he might have found it, he says. A Seattle provider of
        DSL services is going bankrupt, and he wants to invest in a new company
        that will scoop up its assets for two or three cents on the dollar.

        Others, like Baker, are holding true to diversified strategies they
        implemented before the crash. Baker proclaims the advantages of staying
        a generalist. He's been able to turn to deals in the health-care sector,
        which isn't suffering as badly as technology.

        But it's often the mundane, everyday tasks that hurt the most. Gary
        Rieschel, a managing director at Softbank Venture Partners, warned
        investors in his venture fund in January that the public market wouldn't
        begin to recovery for two years. He wanted to aggressively mark down
        the values of many of the weaker companies in his portfolio, and write
        off some start-ups completely. "They were very upset with me," Rieschel
        says. "They were telling me: `You look so much worse than everyone else.'"
        It was harsh medicine, but it's been smoother sailing since, Rieschel
        said. "Eighty percent of the tough decisions have been made. Now 80
        percent of what we do is looking ahead."

        The current environment reminds Baker of the technology boom and bust in
        the valley between 1968 and 1974. A large number of hedge funds,
        investment banks, real estate companies and corporations entered the
        venture business with a vengeance. The term "venture capitalist" became
        a household word in 1968, Baker recalls. But by 1974, it had disappeared
        from public consciousness. "It was a semi-hobby to become a venture
        capitalist," Baker says. "By 1974, they all exited."

        Still, it can't have been too hard in 1974. That's when Baker became a
        venture capitalist.

        I have opened up the Monthly NetSuds Report to guest writers. If
        you have a passion for a topic, and you can write (at least no worse
        than me), send an email to me at matt@netsuds.com. You can even send
        copies of your work. It needs to be on "com and .com" topics and can
        include entrepreneur/investor activities. Good information from our
        service providers and vendors is also welcome so long as it is not a
        "commercial" for any one company or individual.

        We will consider both sponsored and unsponsored columnists and guest writers.

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