Computer to computer applications – silicon cockroaches – will be the single biggest driver of bandwidth demand in future, according to John Sidgmore, vice chair of MCI WorldCom Inc and chair of UUNet. Taking the form of shopping agents, dynamic search engines and so on, these applications will generate bursty, high-volume traffic very different in character from voice. But Sidgmore insists that telcos must embrace change, not fight it.

His confidence stems in part from his company’s business model. Unlike its competitors, MCI WorldCom believes it is important to own the physical network. We believe we’re the only ones in the world to have this vision, Sidgmore told Internet World on Friday. More and more customers are asking us to guarantee quality of service. The only way you can offer that is if you own the facilities, he said.

The capital investment is not as significant a part of the business as it was in the past. The cost of transmission is going through the floor, Sidgmore said. Switching and transport account for only 6% of the cost of completing a telephone circuit. At 11%, the cost of providing operational sales and service is almost twice the size. It would be cheaper for me to give bandwidth away and not bill you, Sidgmore admitted, to the audience’s evident glee.

Indeed, some have called for just that. Bill Gates has said that bandwidth should be free, Sidgmore noted, we think software should be free. The threat telcos face is that the exponentially increasing demand for bandwidth is in conflict with consumer expectations that internet access should not be expensive.

Unlike traditional telcos, however, Sidgmore says MCI WorldCom will face this challenge head-on. He reasons that there has to be a profitable business in owning a data network, especially as silicon cockroaches start to multiply. Defending voice monoopolies is not the answer. We fundamentally believe the other large telephone companies will fail because they try to protect their base revenues, he said, if we’re going to go over the cliff, so be it. We’re not going to go down worrying about our base. รก