(Wednesday, April 12)

Telco's Preparing to Extract the Bullet from the Foot.

I have written about network neutrality and the peril that if the telcos (Bellsouth, Verizon, & AT&T) were to introduce fees to the service provider it would cripple innovation and also stifle new businesses ideas across the country. If an entrepreneur has a kick ass idea for something like Zillow that would have high bandwidth costs for data aggregation then the idea of creating said app (if they were indeed going to be hosting some of that data) may not be worth the cost of invention. As of now, when creating something off "web 2.0" apis for data aggregation the bandwidth is "generally" utilized from the api provider's end (ie the main service offering the data [ie Google, Amz, ebay, etc]) Now if carriers want to charge the providers for this "extra bandwidth" (generalized term) then I believe it will force these companies to be unable to provide their api for free, which hurts everyone, developers, idea harbors, and users alike (basically, no more fun web stuff). Basically the carriers want a piece of the pie here in this 'web2.0' economy, the only problem is that technically they already got a slice ("pass the cake, Milton") because they charge each of us monthly fees to utilize their pipes that go into out homes. This is very akin in my mind to George vs the non-Double Dipping wake attendee. I would be considered the attendee, the carriers would be George. Now I wrote about GoogleNet towards the end of last year, and I must admit that it has been progressing a lot slower than I honestly thought it would. I believe I just read a few days ago that Google and Earthlink maybe? was awarded the ability to start blanketing downtown San Fran with what I believe is the first stages of 'GoogleNet'. San Fran might be the beta testers, if you will, for an entire nationwide coverage of wifi. Now To accomplish this Google is expected to pick up some new frequencies (to carry this new wifi channel) from the FTC. I expected that they would try to do this for this specific reason. What I didn't expect was that rumors are flying that it might not be only Google attempting this. From reading this article and also this article at IBD, some people are thinking that the carrier's wanting of charge for the providers bandwidth might also warrant a consortium of companies (virtual large scale enemies if you take into acct Microsoft and Google) to form a consortium to purchase these frequencies for a large wifi blanket that would probably come much sooner with multiple players involved. So if this were to happen, what do I think it would mean for the avg consumer? 1.) Competition is always great, for me personally I think that this consortium could faaaaar better innovate than some of the hulking telcos in regards to creating better service for customers. When it comes to customer service though I think avg Joe would be screwed either way. But a non-end point service (ie wifi) would be much easier to provide to a consumer (with less hassle) than an end point pipe (telcos wires running to your door where a service man needs to come check on). there would still be overhead with the wifi, but I think it would be smaller just with the nature of a centralized broadcasting system for any given area. 2.) I think eventually it would kill the telcos. Unfortunately they started this fight, but if from what I was saying would happen in the next few years it would obliterate them. I do not believe they could out-innovate this consortium, especially if it came down to developing new advertising models for this service (by providing this service for free you agree to see some advertising) because telcos have had that ability for years, and nothing has come of it (that I am aware of). I know I still pay $65 a month for my cable modem. 3.) Privacy/Security issues, I personally would feel safer knowing that my data is going over the wire instead of floating through the air. So I think this is a positive for the telcos, but eventually everything will be flowing through our bodies on waves so there really is nothing that I can do about it. 4.) A wifi VOIP network would eliminate the need for cellular services, and could double as mapping, gps devices related to the servies offered by the companies's providing the apis. It is a very interesting time for broadband providers (and some that might become broadband proviers) I am eager to see how it all plays out and if any of these predictions might be correct. Internet, Media Outfits Could Bid For Spectrum Links to Places that might be commenting on this further: Om Malik's Broadband (GigaOM) A VC SiliconBeat Ars Technica Wired Federated Media I, Cringley