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, 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.

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Doc Searls is the Editor in Chief of Linux Journal


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Post-Brainstorm observations

Doc Searls's picture

Well, there were lots of telco folks at the Telco 2.0 brainstorm, and everybody (at least that I heard or talked to) saluted the Telco 2.0 Manifesto, which declares the current business models terminal and suggests a bunch of new alternatives:

New value lies in addressing the friction that exists in everyday interactions between businesses and consumers, and governments and citizens. Typical examples include: authenticating users, market research, targeting promotions, distributing goods and content, collecting payments and providing customer care. These processes today are often slow, inefficient and ineffective. They waste money and affect customer satisfaction.

Telcos collectively have assets that can address this situation: real-time user data, secure distribution networks, sophisticated payment processing capabilities, trusted brands, a near universal subscriber base, as well as core voice and messaging products.

Which is fine, but it doesn't go far enough. It's a bit like telling IBM in 1980 to quit trying to protect its mainframe business and to beef up its minicomputer and services businesses — and ignoring the vast potential that would be unlocked by a wide-open PC.

What they need to do is open up the Net as a platform in itself, by reducing or eliminating highly asymmetrical provisioning and pricing "business"-grade services (unblocking ports, providing IP addresses, 24/7 phone support, etc.) at levels low enough to attract interest — and, more importantly, development.

Right now most Net development is Web development, because there's nobody preventing it in the way that carriers are preventing Net development. Worse, the carriers remain stuck inside a Regulatorium that has no concept of what it takes to open up the Net Development marketplace, beyond telling the carriers to be more neutral. What's wrong with that, aside from highly debated technical concerns, is that it's all about preventing the carriers from doing bad things, rather than encouraging them to do good things. Another way of putting it: the Net may be free of regulation, but its carriers are far from it. What we need from the new administration is inspired pro-business, pro-market, pro-free-culture thinking and lawmaking (and/or law-ending).

So we have a chicken & egg situation here. The carriers are preventing development, and developers aren't developing the creative apps and service models that will get the carriers to stop valuing captured customers more than free ones, and to stop worrying about the FCC.

But it will happen. One or the other will make the move, and things will start to open up. How soon, I dunno.

Maybe the new administration can help. Here's my immodest proposal for a Net Infrastructure plan

Doc Searls is the Editor in Chief of Linux Journal

Natural Progression, Unwired

FredR's picture

I think it was a case of the natural evolution of things. When the Internet was starting to get popular and commercial, we needed wires to connect us to it. Who were the incumbent wire pros? Why the telcos and cablecos of course. So, they have this idea of, hey, it's our wire, our physical medium, no matter what travels over it, we rule it.

Wait until a technology like Wimax or something similar waiting in the white spaces of the spectrum becomes more pervasive. It's not a matter of if this revolution will happen, only when and how. I think the Telcos and cablecos will be stingy with their wires, up until that happens, then they'll be scrambling to play catch-up as all their customers jump ship. As of right now, they're taking them (us?) all for granted, because they're the only game in town.

We won't need no stinkin' wires. Of course they'll need to reinvent themselves as a hedge against future innovation. And it's coming.

-- FLR or flrichar is a superfan of Linux Journal, and goofs around in the LJ IRC Channel