A pipe is a pipe, and the Internet is the Internet

[Andy Sjostrom]

This is not my favorite subject, but one that surprises me a lot. It surprises because people, even experienced and smart, continue to get it wrong. First, however, I must give my kudos to Östen Mäkitalo, father of mobile phones and senior wireless strategist of Swedish carrier Telia. He has spent the last few years evangelizing "the Mobile Internet" as something different that the Internet. But in the last issue of Computer Sweden he concludes he has been wrong, and that he now thinks about the Internet and different ways of accessing it. It is cool to see someone of his rank admit he's been wrong in his own area of expertise, and it deserves respect to do so. Hats off.<br /><br />I, on the other hand, am not bigger than this: What did I tell you? In the same magazine (Computer Sweden), Chris Forsberg and myself wrote an article stating: "There is only one Internet, and it is the Internet", and that this fact is a real threat to carriers that do not understand this. In fact, already in December 2000 I wrote: "In my world, there is only one Internet, and it is the Internet," in the PocketPC.com article <a href="http://www.microsoft.com/mobile/pocketpc/club/columns/wap.asp">"Pocket PC Claims Stake in the Mobile Business"</a>.<br /><br />Why do I bring this up today? Well, in a recent ZDNet article, <a href="http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2880809,00.html">"The chicken and the app"</a>, Tiffany Kary totally buys into the network operator myths:<br />"Which has to come first--the mobile application, or demand? The answer is neither, and it's time developers and network operators rethought the entire question. There's only one player in the game that can call a truce: The network operator. "The onus is on the operator to make this happen" said Jackson. "There needs to be a concerted effort to streamline the development process, provide device roadmaps and (network) rollout roadmaps," he added."<br /><br />I wonder if Tiffany Kary thinks her ISP was the only one player that made the Internet what it is today, or if perhaps software developers, service providers, hardware manufacturers, and so on have also had anything to do with it. In fact, does Tiffany think that her ISP is the one making it all happen even today?<br /><br />In my world, the carrier that believes it is the only player that can make things happen is the one we'll find in the dust bin tomorrow. In my world, the carrier that first makes sure it has the fastest, most stable and price efficient Internet pipe and then (perhaps) moves on and makes available Internet services and mobile devices to mobile users, will win. A pipe is a pipe. The Internet is the Internet.

[Ed Hansberry]

I agree 100% - except the part where you say this isn't your favorite subject. I think it is your favorite subject, or favorite rant anyway. :wink:

[dochall]

While I agree with you. I've been using the mobile internet since 1995 but it was then a 2110, laptop and a datacard. It doesn't make any difference as to the presentation required as long as sites support it.

However put yourself in the shoes of the operators for one moment. They have paid $billions for 3g licences (in a lot of countries). No if you were the ceo would you want to claim that the what you've actually done if paid for a system which is basically a pipe and that your users will pay a fee but you might see the profits from the videos you're allowing people to watch to mtv.com or driving directions to multimap.com.

The pots of gold you promised your investers has just disappeared and you're still a mobile network operator not anything more.

[EricMCarson]

Telephone network operators should have figured out that $3B+ on bandwidth was just ridiculous anyway. If a company looked at the economic profit of this decision, it would have been very easy to realize that there is no way to turn a profit on this decision unless they became the only carrier in the nation. Since this is obviously not going to happen (one wireless carrier in the U.S., dear me, that might require only one standard, then what would we do?), bids should have been substantially lower across the board for this spectrum. This ridiculousness about charging per megabyte is only because of some poor sap's horrible business decision back when his company thought the wireless market was going to expand forever. This whole issue of wireless internet will get figured out once someone figures out that it was the carrier's problem for paying too much, and consumers aren't willing to pay for errors in the business model (long-range 802.11 anyone?).

[Andy Sjostrom]

dochall!
That very same line of reasoning was just by a mr Strand of Strand Consulting, a respected analyst in this field. He said that if I was right, then many carriers will go bankrupt and cause major financial damage throughout the world. Thus I must be wrong.

I am sorry, but reality is reality is reality. If "carrier equals pipe" is true, and that leads to "carrier goes bankrupt", then that will be the case.

I wrote in an article for Swedish PDA site, Handdator.com, more than a year ago that the huge 3G costs will lead to either carriers going bankrupt or carriers being liars (ie not delivering on time/promise).

[Andy Sjostrom]

I agree 100% - except the part where you say this isn't your favorite subject. I think it is your favorite subject, or favorite rant anyway. :wink:

Nah! Why would believe that!? 8O

[SassKwatch]

In my world, the carrier that believes it is the only one player that can make things happen is the one we'll find in the dust bin tomorrow. In my world, the carrier that first makes sure it has the fastest, most stable and price efficient Internet pipe and then (perhaps) moves on and makes available Internet services and mobile devices available to mobile users will win. A pipe is a pipe. The Internet is the Internet.
Couldn't agree more.

Phone service (particularly mobile service) in the US sucks swamp gas these days. I'd rather go and out and buy a new car than figure which 'plan' to purchase. And just when you think you've got it figured out, you read the fine print and discover that you can really only utilize that cutesy little messaging tool with other users of the same service. Doesn't take a genius to see the stupidity in that...or so one would think. But as you say, there certainly seem to be quite a number of folk who just don't 'get it'.

[mobileMike]

I slightly disagree (I think). The pipe analogy works better for a fixed line network. If you build a house you run a water pipe to it because you know someone will pay. With fixed line access, someone requests bandwidth and you run a line to that person at a limited cost. Of course you had to build some infrastructure first and connect to a backbone. What you do not do is run wires to everyone's house and then see if people will use it. This is why it is different for mobile operators. They must provide the service over a vast area (basically running wires to everyone) or no one will take it into use. The risks are much greater. So how does this affect wireless? For a long time you could make a dialup connection with a cell phone but the speed was really slow (~9.6K) and not really used. Today, they have upgraded networks supporting GPRS (~36K) and the operators are still not see a big payback. Next, there will be 3G and yes they are already committed to the licenses but should they also invest in the hardware if the users will not come?

This is why the operators are not just building bigger pipes. They also want to offer services to make some money. It is not that they are the only player (playing everyrole). They are ONE of the players, but they are the only player which can player every role. They do not want to put out the money and let everyone else make the profit.

Don't missunderstand, I think it was stupid for the operators to spend so much money on the licenses. I think there should have been more study/forcasting and less dreaming. I also think the governments should have taken action when the prices ran so high. Instead the governments only thought about all the money they will never see. I can see the impact on society (economy, unemployment) everyday in the news. Now the governements have to deal with these troubled companies and the unemployed.

I agree that the Internet is the Internet. I also believe that only when you get beyond your ISP's network are you on the Internet. Therefore, if my ISP offers some services and prevents me from getting the same services from outside their network, then I am not using the Internet. Another historical example is AOL. The service they first offered was not the Internet. It was more like AOL's LAN access. It just happened to be a very big LAN.

- mike

[dochall]

dochall!
That very same line of reasoning was just by a mr Strand of Strand Consulting, a respected analyst in this field. He said that if I was right, then many carriers will go bankrupt and cause major financial damage throughout the world. Thus I must be wrong.

I am sorry, but reality is reality is reality. If "carrier equals pipe" is true, and that leads to "carrier goes bankrupt", then that will be the case.

I wrote in an article for Swedish PDA site, Handdator.com, more than a year ago that the huge 3G costs will lead to either carriers going bankrupt or carriers being liars (ie not delivering on time/promise).

I can't tell exactly where the sarcasm is pointed but you do realise that the last three letters of analyst are silent. I don't often agree with any analysts.

I'm not sure if I wasn't clear but basically I'm saying you're right and they can't admit it and watch their share price drop through the floor. I think a lot of carriers either know that they're in trouble or should know it is the case.

Ultimately I believe that were going to see a couple of attempts at ring fencing their revenue stream.

The first area is where straight IP doesn't necessarily fit with the service. I'm thinking here of location services and potentially applications that could be killed by latency and the ipv4 lack of qos, video being the typical example. These services could potentially be better served by servers that operate within a controlled network rather than across the congested
net. (TBH - I am not totally au fait with the G3 protocols- does the phone have location info or is it just the base station that knows. If the fomer we could simply see apps that inform the web server where they are)

Here I think is where the legitimate carrier service revenue could come from. Whether these are actually worthwhile revenue streams only time will tell. While I'm sure that a lot of polling and focus group work has been done we have yet to see any established user base for these applications and I'm sure many of those that have asked have thought cool idea but whether they actually use them when they have a g3 handset is open to question.


The second is to actually limit the availability of true internet access as they interactive TV services have done. Charge the user a shed load of cash and also charge the service provider to enter the fence. This has really limited entry into interactive TV in the UK at least. I have worked with many financial institutes that have been put off by the entry costs and decided not to bother.

This should be perfectly possible even simply by not actually connecting the IP services to the internet at all but by building a standalone network. This is perhaps the most horrible thought. The 2mb pipes were promised don't end up being to the real internet but some ersatz network provided by the carriers. While I think as user this would be a terrible idea if the carriers don't see their revenue forecasts being met you can be sure they will try something similar to it rather than go bust.

Horrible thoughts but if they're all forced to do it the mobile internet and mcommerce could end up being a horrible mess.