ATT's Plight is our Plight
Bob Frankston June 23, 2011 Updated: July 22, 2011
Abstract
ATT's planned acquisition of T-Mobile is an occasion to look at the fundamental issues facing the entire telecommunications industry. The business model that worked for telegrams does not work for bits.
Very simply - we are asking providers to add capacity but we're not willing to let them share in the value created (as with a VoIP call). Worse, the more capacity there is the less valuable the carriers' own services are.
Telecommunications is a funding model based on the assumption that a network service provider is adding the value as in days when the network carried voice and not just bits.
We need to shift to a funding model that doesn't work at cross purposes with the Internet's generativity. This generativity comes from decoupling our ability to exchange bits from what we create using those bits. It requires that we fund the whole, i.e. infrastructure, rather than having to make each part profitable in its own right as we do now.
Imagine if we tried to fund public pavements as a profit center by making people pay for each walk they took.
With telecommunications, we take the abundant and inexpensive wires and radios and then pay large amounts of money to confine bits to billable paths.
Just as we pay for the wires and radios in homes, offices and campuses we can fund the wires and radios in our neighborhoods and cities.
We can do this by acting locally within our communities by creating a local commons and aggregating our purchase of transit outside the neighborhood. Eventually these local efforts will interconnect to form a new global commons.
We need to recognize that the limits on capacity are driven by markets and not fundamental limits of technology.
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