The upcoming battle of the standards.
In a world driven by technology and innovation the never-ending battle to design forward thinking integration into our infrastructure is one that can only be measured in terms of what is in the very near future. There is almost no indication that this will slow down, in fact, the pace that obsolescence is running at seems to be steadily increasing. This creates some very interesting dynamics in the telecommunications industry because of the massive amounts of time and money it takes to revamp their networks.
However, it is not only the technology that needs to constantly be reassessed but also the business model. This is a very foreign mindset in an industry that not that long ago believed in planning construction projects that required decades from conception to completion. If we are willing to accept that the technology needs to be replaced on a much faster timetable than any time in the past, what does this mean to the business model? How can a business model plan a project over an extended time period if by the time the project is operational the technology has been obsoleted?
I believe the only honest answer to those questions are, "we don't know."
The response we are seeing is the uniform adoption of standardization by the big players on as many things as they can find. Whether you choose to highlight WiMAX as an example or Ethernet the thinking seems to be that once a standard in put in place we will all follow it and everything will continue on smoothly from there. To my way of thinking this flies in the face of what we have recently observed and considered to be a universal truth, technology will continue to innovate faster than it can be understood and adopted in any large scale. So, if any company chooses to follow a standard wouldn't that leave them open to a competitor adopting a "better" technology?
Let's look at IMS (Internet Protocol for Multimedia Subsystems) as an example. This is going to allow the ILECs/Cell Providers to "unify" their networks allowing for the convergence of not only all of the existing telecommunications services but also those which will be rolled out in the future - a future that nobody in their right mind seems willing to define.
Great, this means that cell phones will be able to talk to POTS lines without any type of conversion. Text messages will flow freely, "push-to-talk" and "push-to-photo" will work hand in hand along with your soon to be available ability to watch television on your cell phone - something I know that most Americans can't live without. Even better, we will now have the ability to retrieve programming information at will. I know when I'm driving to work, I like many Americans, need to know exactly what time Reg and Kelly are on and I'll be damned if I'm going to wait. And, as if things couldn't get any more exciting than that, Sprint is now looking at providing me access to my home digital video recorder so I can program it as necessary from afar! That's right, as God is my witness, we are going to cure that device from endlessly flashing in our lifetime! This is big, no, this is huge.
If you look at what this massive investment means to Sprint's business model we can all see the vision Sprint has laid out for their company. We also have Verizon rolling out their Fiber To The Home program (Fios) and taking heat for favoring the wealthier neighborhoods in their deployments. Redlining, as the practice is labeled, is illegal and I believe Verizon when they say that they aren't redlining but rather they are deploying in areas that meet their critieria.
Company officials say they make decisions on where to deploy the technology based on a number of factors, including how easy construction will be in an area, how quickly they think they'll be able to get local approvals and what percentage of households and businesses are likely to want the service.
This reminds me of the old John Lennon quote, "It's not so much that we're staying away from Liverpool, it's just that we aren't going there."
Now, I'm not an expert in this entire FTTH thing but as a layperson I am going to go out on a limb here and speculate that wealthier communities will probably adopt the newest and most expensive technologies faster than the one that are economically devastated. I do readily admit that I have no firm data to back this up so please feel free to dismiss my assertions.
Yet Verizon is boldly going after delivering television programming. Techdirt has a great opinion about this foray. Why is it that whenever any of these large companies decide to roll out a new service it is largely the same as everyone's else's service? Is there some kind of quiet safety in delivering the same product that everyone else does? Is this mindset a simple grab for market share without any regard for innovation? More importantly, do these geniuses read what's happening in this world? I mean, I hate to break this to Verizon but it seems like television programming is going to be delivered over the net! In other words, you guys are investing tons of money into a product that will eventually be provided over your service and it looks like the content will be supported by advertising - leaving you out of the revenue stream completely. Funny, it is a pretty good guess that voice is going to do pretty much the same thing. While it may not be free you can bet your bottom dollar the revenue you used to be able to collect from us (regular price increases included) is going away - and I can't even say I'm sorry.
How is that voice revenue doing? Well, according to this article the total dollar amount handed to you for voice services over your POTS lines decreased by 10% this year alone. But, hey, what's $50 Billion between friends? The reality is people are getting off of the gravy train and switching to VoIP or cell service. In fact, according to this article by 2010 a full 30% of POTS users will have switched to VoIP or Cell service. That's still workable for you because you are in the business of providing cell phone service, right? What happens when the combination of WiFi (or WiMAX) and VoIP become a mobile equivalent of cell service?
I guess the question I have for the telecommunications industry is, how much tolerance for pain do you have? How many customers can you afford to lose before than business plan starts to fail. How fast can you change directions and based on the products and services we are hearing about you introducing, how well do you think the general public will receive them?
From my perspective, I see a real problematic time coming for you all in the very near future. This isn't caused by external influences as much as the distinct lack of vision that is being uniformly shown at every opportunity. Add to that the incredible distaste most consumers have for the phone company and even a series of name changes won't wash that out of people's memories.
Now, if you'll excuse me, I need to grab my cell phone and get my fill of what to think today. It's a new day and that attractive woman on the TV is trying to tell me something - as long as I don't get distracted.
