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back to article Public internet threatened by private telcos

What will the internet look like in 20 years? No one knows. But this morning at the Stanford Summit, an annual tech industry conference in Palo Alto, a panel of Silicon Valley experts laid down a few guesses. The trio of big-name panelists - Sun Microsystems co-founder Andy Bechtolsheim, HP personal systems group CTO Phil …

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Challenge to Internet

I agree completely that wireless telco service is going to be a challenge to the internet. First, they have a built-in notion of identity and billing capability that is missing from the internet. You can actually practice capitalism (for better or worse) in this domain, and we're seeing an explosion of creative new products as a result. Because you have identity and billing, you can do micropayments, and you can get a better handle on spam and crime (not that those are entirely absent in mobile phone systems of course).

The downside is that the system is less open to the general public. It's a pity that the internet, email and the web were not designed with more foresight about issues like identity and spamming and abuse. CERN was thinking about how to put physics journals online when they invented the web, they weren't thinking about Islamic terrorists posting video of beheadings.

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Not First "Real Web Browser with "Real" Search results"

From the Article:

He then held up his iPhone as an example of where things are going - yes, he had it on stage, and yes, he held it up - calling it the first mobile device that lets him "use a real browser to get real search results on the real internet." But we couldn’t help but see his personal Apple status symbol as proof that the wireless internet is still in the dark ages.

It is NOT the first mobile device that lets one use a real browser and get real search results. What is this guy getting paid by Apple!?!?!

I have been using my Treo 700wx since their release. Which was months before the iPhone came out. It uses Sprint's EVDO data network for its connection and has IE (yes I like other browers too but it is a REAL brower) that you can run in full mode which displays the pages as they where intended by the web developer. There is a little scrolling involved but it's the full page on the "REAL" internet and I have google as my preffered search agent which is on my home screen. So I want to google search on the "REAL" internet I unlock my Treo select the search bar, type hit search there this are my real google search results on the "REAL" internet. So this expert is simpley wrong.

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Telcos not making money???

Ok, someone needs to go back to real world school. Telcos are making money on the infrastructure. We get charged for access. Content providers get charged by bandwidth usage.

So exactly how are the telcos not making money?

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Basic economics lesson needed by telcos

Commodiity products and services are governed by the simple supply and demand laws of economics. There are no super profits on commodities. Where a service has unique properties the supplier can enjoy some monopoly excess profits. As any Economics major.

This is like a salt manufacturer complaining that Egon Ronay make all the profit from his salt!

The pity is politician often fall for this special pleading!

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Telcos Clinging to a Prehistoric Business Model

The real problem with the Telcos is that they are vigorously defending (monopolistic practices) their tired old subscription based revenue model which severely limits their ability to grow and make money. The fact that they can't, or simply refuse to change may eventually drive them to extinction.

The funny thing to me is that their growth potential is actually CAPPED by their own business model! Those businesses that are built on the advertising based revenue model are free to grow as fast and as large as they can (Google, Yahoo, etc.). Once Google or someone else starts offering free wired or unwired internet access, the Telcos days in that business are numbered.

Another way to look at it is that Google wants to make it cheaper and easier to get EVERYONE on the Internet so they can sell more advertising, whereas the Telcos want to limit what you can do and raise the price of Internet access in order to make more money per subscriber.

Wake up! This is the age of free or low cost Internet Access subsidized by advertising!

Hippster

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"real browser to get real search results on the real internet"

Um... I'm not exactly all-knowing, but haven't we had various Symbian and WM platforms for a long time now which have been able to do this since before the iPhone was even a public thing?

Ah c***, I feel the reality distorsion field overwhelming me... help..! Heee...iWaaaant... iAnythiiing...

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Silver badge

Who do you work for ......?

I agree, Hippster. The telcos are like the ageing, has been singer, wanting to milk a generous copyright provision for even longer. Money for nothing and the chicks for free stuff taken to the absurd greed level.

"With telcos like AT&T and Verizon refusing to foot the bill for the public internet without ample compensation, things will soon come to a head." ..... probably with the head dead wood at those two dinosaur companies being replaced with a team that knows the Internet Environment/Virtual World....... for that statement, which is akin to a covert ransom threat, surely indicates that they do not know how to monetise their participation.

And McKeown must have been 'avin' a larf too, when he said .."One possibility, he guessed, is the internet collapsing into "a government-regulated monopoly" where one company controls the whole thing." ...... Although one S.M.A.R.Ter Intelligence may be the Predominant Force which controls the whole thing 42 Regulate Governments Monopolisation and Ignorant and Arrogant Expansionisms.

They do seem to have forgotten that They Work for Us.

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"use a real browser to get real search results on the real internet."

"He then held up his iPhone as an example of where things are going - yes, he had it on stage, and yes, he held it up - calling it the first mobile device that lets him 'use a real browser to get real search results on the real internet.' "

Dream on and welcome to the 21st Century....

As said above many many of us have been using a real browser (my preference is for Opera) to browse the real internet from our PDAs for years. Just like Apple also claimed 'iPhone is a revolutionary new mobile phone that allows you to make a call by simply pointing your finger at a name or number in your address book' Again as many small factor PDA/PDA users will tell you, bollocks Apple, total bollocks.

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Anonymous Coward

So exactly how are the telcos not making money?

Mostly because there will always be someone in the market willing to burn hundreds of millions of $$$ on building a customer base for other reasons than making money on access. See how much money Sky lost on their Broadband exercise (£169 million according to http://phx.corporate-ir.net/phoenix.zhtml?c=104016&p=irol-newsArticle_Print&ID=1032447&highlight=), but I'm sure they more than made up for that in new TV subscriptions, higher ARPU etc.

If you don't have the TV with the right content deals, or shops around the UK selling mobiles and flat rate call contacts, how is a 'traditional' telco going to compete? Combine that with some frankly disastrous business decisions in the past, and you'll find most telcos are on their knees at the moment.

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Doh!

"What has been missing is mobile wireless that works across the country - for the internet, not just for cell phone service.""

Overall, it sounds like the speakers and telcos are implying that we really screwed up: the public should have taken control of the basic infrastructure - much like we control our own roads, water, sewage, etc - and provided municipal fibre and WiFi at the outset. It would be cheaper, more timely, and we'd have avoided hitching our cart the old mule of the telcos and kooky wireless companies that want to charge us £5 for the IT equivalent of a glass of water.

(I went to Starbucks recently to check my email and found they didn't have WiFi! They had a T-Mobile access point. T-Mobile wanted to charge me £5 to use WiFi for 5 minutes! I choked on my expensive latte and foam came out my nose. Nice customer service eh? I don't think I'll see the inside of Starbucks again.)

T-Mobile and their ilk are exactly why an iPhone is a dodgy proposition.

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Anonymous Coward

the real real problem for the telcos...

...is that their infrastructure isn't expensive enough.

It is orders of magnitude cheaper to send bits around the world today than it was in 1977. Wires (well fiber nowadays actually) is cheaper and higher capacity. The signalling hardware is cheaper and higher capacity. And customers know it, so prices have to come down.

It's hard to look shareholders in the eye and say, "We're making a hundredth as much as we did in 1977, but we are just as successful today as we were then." It's hard to stay in your same fancy HQ building, and take home your same fancy pay when the value of what you provide has imploded. You can't use the same fancy direct sales force with big commission costs to sell services that are only worth 1% of their traditional value. It's a big change to take in.

I do feel sorry for the telcos. I really do. But I don't worry about them all that much. It is so inexpensive to acquire long haul network infrastructure these days that if the telcos refuse to provide it, then the big internet companies like google and microsoft, who don't have preconceived notions about telecom infrastructure costs, will just *become* telcos, and cut the traditional telcos out of the most lucretive remaining part of their shattered old market.

It sucks to be a telco. Boo Hoo.

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Telcos vs cable

There are two major classes of broadband provider in the US. The telco and the cable company. Any have your choice of one each in most locales. Assuming you have a choice at all.

Recently had my cable interrupted for three days when my telco, while in the process of installing fiber in the neighborhood (they just installed a new CO), dug up the cable backbone. And the other good news is that the cable company will be installing fiber, along the same ROW, in about three months.

And we have our choice of four major wireless carriers, all with vastly different technologies. All closed.

With the carriers whining about charging for bandwidth, one of two things will happen. Either we'll start paying for services from providers like Google that we've been getting for the price of reading ads, or we'll start paying more, lots more, for our internet access (or not getting as much, if we choose not to). Either way, guess who loses. Third choice, third party providers go out of business and the carriers become out sole source for these services. Things like IPTV. Which is exactly what Congress has had in mind. Of course, we'll pay a hefty fee bump, since they still have to expand their infrastructure.

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