Wednesday, February 01, 2006
Someone must have pointed Bob Frankston to these presentations and the result is a very interesting (and recommended read) post called Assuring Scarcity on his blog.
He is commenting directly on these two presentations and it is full of interesting statements, some of them I am citing here:
The conflict between the 20th century telecom industry and the abundance demonstrated by the Internet becomes very clear when we look at cellular telephony. Unlike land line telephony, cellular telephony has, from its inception, been able to maintain control over the services provided. They’ve kept the cellular phone from becoming a real portable computing device.
He is also pointing to another very interesting document from GSMA:
There are many related documents such as http://www.3gpp.org/ftp/PCG/PCG_15/DOCS/PDF/PCG15_17.pdf which touts that the goal is to create “fully interoperable and globally connected IP with QoS value-based pricing and cascade payments”. While it says “IP” there’s a lot of concern about issues such as roaming which don’t arise in the real Internet. That document is very telling – it complains about governments stalling market by imposing taxes and license fees when this industry itself is imposing far more onerous levies by denying the user the ability to create anything that is not billable.
Perhaps this is best seen in the points from a table in the report. It uses what I call blivet logic. It seems to progress from point to point but you find that you started with one interpretation of a word and winding up at the other end with an entirely different meaning. If everyone has access to abundant and cheap bits then you’d expect that to mean everyone can innovate but somehow they say that there are fewer players. Ah – but a player is a phone company – the millions of others capable of creating new value aren’t considered to be players.
If you think about it, this is a clear and blatant call for manipulating a marketplace so that only the privileged few can create new products and they can even specialize without worrying about competition. Best of all they can charge as much as they want.
Their story is accepted because it seems necessary to pay them to give us connectivity but that’s not true. It’s like paying the railroads to build roadways. You don’t do that, you build roads based on the need for roads. You fund connectivity in the same way – so it can support other activities and not as a profit center in its own right. You’re paying people to carry your bit just like you pay them to carry your garbage – you don’t expect to sell them your garbage.
It starts out using the term “End-to-End” but in the opposite sense that it’s used for the Internet. In this it’s more like “Womb-to-Tomb” – they control every aspect of the service. It’s that QoS thing. That along with ideas like “Acceptable Usage Policy” (AUP) is a way to impose their rules on users and maintain their control and value (AKA, high prices).
I don’t think I’m exaggerating much – it’s all about assuring total control.
The slide titled “The Future” is perhaps most telling. It makes it very clear that this is the anti-Internet. They use Internet words but to mean just the opposite. George Orwell would be impressed. Unlike Big Brother this is done in plain sight almost as if they are clueless. And maybe they are.
They are bringing back circuits, AKA sessions for no purpose other than being able to charge for them and their ability to apply their own definition of quality. A circuit gives the carriers control over relationships – if you allow the relationships to be maintained outside their network they lose control.....
The purpose of a session is to create a billable event out of nothing. You don't' need them to charge for a service but you do need them if the carrier wants to get in the middle so it can meter your time and bill you. Even if you are not exchanging packets and using resources you can still be billed! That might’ve made sense in the old phone network but now it’s nothing more than a way of charging you even if you are using no resources at all!
They must prevent users from creating sessions outside the network in order to charge for them and they don’t have the concept of letting the users determine what works and what doesn’t. The carriers will decide that for the users! Notice all those proxy’s – more mechanism for no purpose other than adding complexity and when you have enough complexity it’s easy to tell any story you want and get away with it. We have layers upon layers which assures that you can’t reduce the costs be eliminating mechanisms that don’t add value to a particular application.
It’s truly the Anti-Internet. The Internet itself is accessible only in terms of external services. IP transports like EVDO and HSDPA are considered services and not fundamental transports. And they are charged at a premium – like being forced to buy bottled water rather than tap water.
And look at that – a cute little DNS of their very own! And they don't' use neutral terms like Top Level and Second Level Domains. They refer to them as Master and Slave domains and infest it with all sort of strange complexity. What is entirely and completely missing is the idea of users controlling their own domains or zone files. Can’t give the sucker (oops I mean the user) an even break can we?
I don’t really think they realize how clueless they are about the Internet. They are used to a command and control structure and the very idea that users can create their own protocols is outside their conceptual space. They are very used to defining standards and evolving them slowly. The idea that the Internet approach is to start out by playing with ideas and those that are commonly accepted become standards though even then they are not enforced except by gaining favor.
SMS and MMS are broken versions of Internet protocols. They love SIP (Session Initiation Protocol) because it looks like a tradition Telco-protocol but users can create sessions directly without a third party SIP server and they can choose other ways to initiate sessions. They like SIP because they think they can maintain a stranglehold over telephone numbers by using their own DNS.
And note: they have their special version of SIP to keep it closed. Mobile device manufacturers have to provide now two SIP stacks (e.g. Nokia with their dual-mode WiFI/UMTS E60/61/70 series)....
Why not abundance?
It’s the 21st century and we understand that we can have abundant connectivity. Why are we continuing to tolerate scarcity? How can we allow this to go on?
The operators I talk to have been through exactly the issues discussed in Bob's article. They know that they have to compete with end-user and third party provided services. Most of them are not trying to prevent those services -- they are trying to work out how they can provide services in that competitive environment which people will actually value and be willing to pay for. Just like Yahoo do in the Internet today.
There are some true scarcities, whether Bob likes them or not: wireless access is a scarce resource and handset electrical power (and hence handset capabilities) is another one. These two real scarcities will be with us for a long time and the mobile operators will certainly do their best to exploit the maximum revenue out of them! But they all know that prices for access are going to inevitably decline and they are looking for other services that we will voluntarily pay for.
One major service which operators will make money from will be priority access to the scarce wireless resource. They will increasingly make money by allowing people to pay more and get a better level of access. This may involve bumping off the people on lower tariffs when cell capacity is limited, or providing a higher frame rate on the movie clip than the guy in the next seat on the train is getting.
Operators also know that even if a service is offered by third parties they may still be able (through the power of their brand, their marketing, their billing relationship, etc.) to get, say 25% of the business. That is still worth doing. Exactly this happens today with ringtones (most of which are downloaded from internet sites but which still deliver good revenue to the operator).
In short, I think Bob has severely over-reacted to the GSMA material. Of course there is some potectionism involved and they will exploit their position as long as they can but I think he has completely misunderstood the will of most of the mobile community.