Rick Falkvinge, founder of the first Pirate Party (in Sweden) says telcos won’t be around for long because of the shift to mobile handsets, political pressure to make Internet access a basic urban utility and the ability of mobile devices to make calls over the Internet, bypassing the telco network. Falkvinge was in the Netherlands where he was charged an exorbitant amount of money for data roaming and he lashes out at politicians who have been too cozy in bed in the telecom operators:
When I was in the Netherlands this week, a major source of irritation was Vodafone NL, who charged me by the megabyte (!!) of 3G internet traffic. To quote Christian Engström, Member of European Parliament: Megabytes? I didn’t know they still made those. 80M cost €20. That is an exorbitant price: 25 cents per meg. It is not an exorbitant price because it’s the market price, but because it isn’t the market price. The production cost of transferring one gigabyte over a 3G network is approximately one euro. Or was, a year ago; there is no reason to believe prices have risen like oil … For the same reason, governments have been absolutely insane giving telcos subsidies to roll out broadband. Telcos will never roll out broadband to a level where it threatens their existing business; this is holding back society’s technology levels because politicians are trusting vested interests with being in charge of disruptive technology. Why would you do that?
We’ve been predicting the death of telcos for some many years now, but they continue to survive and I dare say, to thrive and take advantage of people’s desire to communicate. Just look at how much money the cellular operators around the world are making from charging people like Rick Falkvinge for the privilege of moving his “bits” of data.
I’m afraid telcos will be around as long as we’re stuck thinking of data as “bits” that need to be moved around, like crates of strawberries, requiring some kind of transport, transportation companies, and roads (the “information superhighway”). These “transportation” companies are regulated by the government whose task is to give them rights of way and to monitor how they use these rights of way, as well as the rates they charge for transporting our strawberry bits and so on.
As you can see, this mode of thinking has nothing to do with the reality but it is convenient for the telcos because it allows them to charge each one of us per crate of “strawberries”, and according to distance (sending crates of strawberries to the Netherlands instead of around the United States). It is obvious to me that sending strawberries from the US to the Netherlands is more expensive than moving strawberries within the Netherlands. But this price-distance factor clearly does not apply to data. We are still thinking in terms of ANALOG in a world that is DIGITAL. The way we think about the Internet and communications – and the words we use – shape the world and make it what it is. Unless we stop, the telcos will continue to be around and continue to charge ever larger amounts of money because, as they claim, people are consuming more data (read: strawberries), that need to be moved around!
Required reading:
Bob Frankston, founder of Visicalc, has been one of the most outspoken opponents of the telecom Regulatorium and his commentaries are worth reading. Here are two articles posted on MuniWireless.
Commentary: what does telecom have to do with the Internet anyway?
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