(FORTUNE Magazine) – Okay, so we all agree that a revolution is under way, and it's all about converged, next-generation broadband networks. But many folks can't understand why phone companies aren't moving at Internet speed to invest the really big bucks necessary to make it all a reality. Maybe it's because telco CEOs don't have good answers to questions like these:

1. What exactly is a broadband network anyway? Take your choice from an alphabet soup of technologies. Is it a SONET/ATM network with IP routers, or pure IP? Or gigabit routers with no ATM? Will DWDM make SONET obsolete? They're all broadband technologies, and there's not a lot of consensus about which to implement. The picture is even foggier for billing and operations support systems. With no standards in place, telcos will have problems interconnecting with other networks and settling bills with overseas carriers. Given those uncertainties, the decision to make large capital expenditures causes most CEOs to lose a lot of sleep.

2. Is there a bulletproof business case for broadband services? I guess I'm old-fashioned. I believe if you provide a service that people find of value and you do it well, you can make a profit. But several telco CEOs say they still can't see how they will make enough from new voice, data, Web-access, and value-added services to justify multibillion-dollar investments. Broadband networks promise to facilitate the rapid and seamless creation of applications. But then, so did ISDN, which now looks like a dead-end. Some CEOs have long memories.

3. Are broadband networks worth building just to cut costs? Telco CEOs have been down this road before without getting the results they expected. They know that the case for voice over the Internet relies on assumptions about avoiding access charges from other carriers. Once you have broadband, though, customers can get their voice service almost anywhere. So you may cut your costs, but you could lose your paying customers.

4. When will broadband be as reliable as today's networks? Telco CEOs don't trust Internet culture. They feel it values informality, individuality, unfettered competition, price slashing, and risk taking, while they worry more about reliability, robustness, and security. The diversity of broadband technologies leads to complexity, which makes hooking up to other networks more difficult. And with different network-management systems proliferating in the open market, broadband networks will be more vulnerable to attack and harder to restore when service goes down. Some argue that the superhigh reliability of the phone system is a goldplating residue of the monopoly era and that the market has already accepted lower standards, as in cellular service. Try telling this to eBay and other companies that rely on the Net for e-commerce.

5. Will broadband make customer service cheaper? It may well be more expensive for some time. Key pieces of the technology aren't reliable enough yet. Back-office and network-management systems aren't standardized. Diagnostic procedures are immature. Yet customers' expectations of reliability and quality are based on their experience with the existing system. If the new network is less robust, complaint calls will rise. And with a network of networks, who ya gonna call?

No wonder the telcos are going slowly.

--George H. Heilmeier

GEORGE H. HEILMEIER is chairman emeritus and ex-CEO of Telcordia Technologies (formerly Bellcore), a telecom R&D firm.