 As CTO of WorldCom, Fred Briggs does a lot of globetrotting. When he landed in Tokyo recently, we hooked up with him in hopes of seeing where Japan's telecom scene fits in the big picture. Briggs has been in telecommunications for 20 years, including 17 with WorldCom and three with AT&T earlier in his career. A graduate of Oregon State, he spent seven years working on nuclear subs for the US Navy. While he lived in Japan for four years (in Yokosuka) during his military stint, he says he's forgotten most of the Japanese he learned. These days Japan is one of his primary stops for two reasons: it's one of the largest telecom markets in the world, and it's home to some of WorldCom's largest suppliers (the company spends around $8 billion a year on its network worldwide). Steve Mollman spoke to Briggs in the headquarters of MCI WorldCom Japan.
What strikes you about Japan's telecom market?
I think what you see in the Japanese market -- and in many of the markets around the world -- is that the pace of liberalization and deregulation, the progress in ecommerce and the Internet, is gated along with how rapidly it's liberalizing and deregulating to provide broadband access. While clearly Japan has made progress, we would also like to see that accelerate, to move that along, for a broader range of services.
Tell us about the dark fiber issue, or gaining access to NTT's unused fiber.
Actually, there are several different ways we'll provide broadband. The first choice, if you have the concentration of traffic, is fiber. We have five metro rings in Tokyo that pass thousands of buildings. But that won't hit every customer. Satellite will play a role, but primarily in the developing countries. Cable will play a role, but more to residential areas. Third-generation wireless will play a role. And DSL, we think, also plays a significant role. If you look at it around the world, there are a billion copper lines in the world today. Those could all become broadband pipes into the Net. With the right support in the local markets, you could turn that over the next couple of years into VDSL, with 50 megabits per second. Today it's more of a regulatory issue, in terms of can you get the right interconnection point to provide that, as opposed to a technical issue. We'd like to keep pressing for further deregulation.
I understand you're a customer of NTT for some things. How does that work?
Ours is a funny industry -- at times we compete, and then we'll cooperate. We do lease bandwidth from NTT locally, where we need that to connect some of our locations into our customers, since we don't have network everywhere. So we will lease facilities from them.
How many data centers have you built in Japan?
We currently have two and are building our third.
I recently interviewed the CEO of a Tokyo-based ASP startup who told me he'd like one of his investors to be a data center. Does WorldCom support the local venture community in this way?
We have a venture capital fund group where we invest in startups. We can trade for services, where we might trade data center space to put their application online and do some type of commercial arrangement there. So, in this business, you can have everything from a straight commercial relationship to some form of investment, to some type of barter arrangement where we trade to get that capability that we can integrate into our package.
It would seem to be in your own interest to foster the venture community here.
It's in everybody's interest. What you're looking for is a win-win relationship. We're not an ASP. That's where we draw the line. We are not going to compete against the ASPs. We will partner with many ASPs to bring their capability into our portfolio, to add that capability on top of our infrastructure.
Why do you draw the line?
If you look at our strength, we can essentially build the back plane of the network operating system that people can plug capability in to. We want to provide that underlying infrastructure, and provide the network and the hosting and the basic capabilities of doing transaction-processing, security-messaging, et cetera. Then I would rather have, just as you said, those very dynamic, very aggressive entrepreneurs building thousands of ASP applications, that will plug into our back plane or our infrastructure, which will drive our core business and make them successful. We're not smart enough to build every application for customers in the world.
You know your limits. So what is your forecast for the ASP market in Japan? Do you have any numbers/projections?
I don't know about Japan in particular. If you look at hosting worldwide, in just a couple of years that's projected to be a $30 billion market. What I find even more interesting, though, is that ecommerce worldwide is projected to be a $7 trillion market in 2004. One of the projections I've seen, and I haven't been able to validate it, is that Japan should represent roughly a tenth of that. Which is in fact an enormous market. And that is candidly one of the reasons I am here.
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