Getting Past Telco 1.0

It's time to start fixing telecom, even as we're moving past it. If ideas are weather systems, that's the squall I'll bring to the Telco 2.0 Executive Brainstorm in London tomorrow and Wednesday. This is my first time at one (it's the fifth in their series), and I'm looking forward to it. Here's the agenda.

I like what they're thinking (here's the Telco 2.0 Manifesto) the way they think it (such as this on "two-sided markets"), and where we might run with it. By "we" I mean the Linux, open source and free software communities. Some of which live inside telcos and cablecos.

For example, Martin Geddes' The Future of Broadband precisely addresses the challenge I laid out in my Forward With Fiber piece in Publius a few days ago. There I wrote,

...new devices based on open source technologies demonstrate how easy it is to scaffold and build innovative new products and services that make money and expand the scope of civilization.

All of this is happening on the vast digital matrix we call the Internet.

The “backbones” of that matrix are fiber-optic connections. For a lucky few million U.S. households, that fiber matrix extends to them as well.

Our apartment near Boston is served by a strand of fiber from Verizon FiOS. That fiber uses a technology called GPON (Gigabit-capable Passive Optical Network), which can provide throughputs of up to 2.5Gb down and 1.2Gb up. While I am pleased with the 20Mb symmetrical Internet service I’m getting for about $60/month, I’m also aware that this is a tiny fraction of my actual bandwidth, most of which is cordoned off for television, which our family rarely watches.

How many other uses can that connection support? Think about the business possibilities here. Think production, not just consumption.

"Triple play" (telephone, TV, Internet) is a legacy offering made worse by usage restrictions and prohibitive pricing for “business” uses — a captive-market shakedown racket that was modeled by Ma Bell and that prevents far more business than it enables.

It’s time for the carriers to start thinking outside their old monopoly boxes. It’s time to wake up and smell the capacity — especially when they’re the ones brewing it.

In The Future of Broadband, Martin provides these two provocative graphics...

... and summarizes,

When you buy a new electronic gizmo, it typically comes with batteries included. The battery makers have learnt to supply batteries wholesale to consumer electronics makers, as well as to end users. Broadband needs to evolve to add “connectivity included”, with the right quality and quantity packaged up with the application or content in ways that the user finds easy to buy. Today’s product is selling users a raw unprocessed commodity, which is serving neither the interests of the users, merchants or operators.

Those other business models need to be based on abundant connectivity and capacity, not on the old scarcity plays we still curse. Here's one example of a scarcity play, from yesterday when I was passing through Frankfurt Airport:

I'm a T-Mobile customer. I pay T-Mobile $29.95 to use their wi-fi access points in coffee shops and airports everywhere. Well, not quite everywhere. The Net may be everywhere, and T-Mobile may provide access to it, but T-Mobile still can't resist the temptation to shake down captive customers for old-fashioned "roaming" charges. Earth to T-Mobile: this kind of crap makes customers hate you. There is no excuse for this stuff. If there are real additional costs at a given location, T-Mobile should say so on their login page. Customers can forgive what they understand. "Roaming charges" for Net use is oxymoronic and retro in the extreme.

The Net has no roaming. The Net is the @#$% solution to the problem of roaming. It's the cure for telco cluelessness. If telcos want to survive in a future where customers can escape their jails, they need to embrace the Net's abundance and extend it with infrastructure build-out, products and services that they're in the best position to provide. There are benefits to incumbency besides playing monopoly.

Martin's essay is addressed to telcos looking to survive in an Internetworked world. Here I'm addressing the FOSS world which, like the Internet, never would have happened if the job had been left up to big companies.

We're always going to have big companies. There are many things only big companies can do. But when those things involve the Net, those companies need outside help from free-range developers. They can't do it alone. They can't mandate it from the inside. Won't work.

Dan Frye once told me that it took IBM several years to realize that they couldn't tell their Linux kernel hackers what to do, and that in fact it was those hackers who were actually telling IBM what to do. We need similar realizations in the Internet space. We need hackers to develop new applications that make the most of a Net that's wide open and free. We need to show the telcos and cablecos of the world that the Net is a vast frontier that it is their privilege to open, that free-range developers are going to be their primary source of solutions, and that customers are more than cattle to be herded and milked.

Are we up for that? Gimme some lightning and I'll bring it to the Brainstorm.