lead by letting go

Andy Kessler makes some good points in this article on why Net Neutrality is a bad idea. The main one is that we need less regulation, not more. The duopoly’s main source of power comes from regulation. It’s always a bad idea whenever a smaller force attacks a larger one’s main power base.

We need to outthink the telcos and cablecos. Their costs have climbed to an unsustainable level and continue to do so. So I say, attack their revenue stream and bottom line. This is what I’m doing with Able Networks.

We have to be clear about what we want. Do we want to conquer (and replace) the duopoly or simply defeat them? Trying to conquer them forces us to play the game as it is now, and ultimately isn’t going to give us anything different. Look at all the local wireless startups that are nothing more than telco wannabes.

In the long run, defeating the duopoly is better for everybody because it leaves them mostly in place. All we want them to do is to see there is a better way, a way they can dramatically reduce their costs right now, grow sustainable top line revenues without paying exorbitant costs (really, penalties) for delivering a service over a competitor’s facilities. And, the consumer would get lower prices (a lot lower than we have now – 10MB symmetrical for $40 a month anyone?) and connectivity in more places and more devices than ever before.

By itself, Net Neutrality is not going to accomplish this. In the current reality, ISPs won’t ever achieve structural separation (a decade-long battle that’s resulted in less competition, more duopoly entrenchment) with their costly legislative and regulatory advocacy efforts. Both of these attack the duopoly at its strongest point.

The duopoly is weak in two main areas, marketing/customer service and the prices they charge. Regulation, closed facilities/structures and the primacy of the profit-maximization mindset are the single biggest reason why the Internet economy hasn’t really taken root in very many places.

In my view, a third front is the game changer.

This CBC News article (broken link removed) discusses Nortel’s plans for ‘new’ optical technology. In it, the president of Nortel’s Metro Ethernet division confirms they are “seeing significant demands for bandwidth.” [Update: 22 October 2009, the news article has been removed from the CBC web site. For an alternate version of the same story, visit this page.]

Also, he uses a phrase “hyper-connectivity, where every device that should be connected to the network, will be connected, the staggering bandwidth demands will only continue upwards.”

These statements confirm and would concur with what I see in the marketplace. And yet, they’re also misleading to a point.

What the article doesn’t mention is that this technology has actually been around for a long time. It’s been held back so that the duopoly (phone & cable cos) can figure out how to make the most money using their closed network business model.

What the article also doesn’t tell you is that this technology is targeted at operators’ – an industry word for phone and cable company – core network, not the edge, which is where the real problem is. This infrastructure, the copper phone wires and coaxial TV cable coming into people’s homes and businesses, is simply not adequate. It was never designed to handle the “current industry top standard of 10 gigabytes per second.”

Next time you have a chance, ask the folks at your local phone or cable company what their plans are to deliver 10 gigabits to your home and business.

Yes, bandwidth is exploding. All the duopoly is doing is making it cheaper for themselves to move all these bits around inside their network. They’re still not doing anything to give you and me decent bandwidth at a reasonable price.

Overheard at a major Canadian book store in Ottawa yesterday-

Customer: “Can I use your kiosk to access the wish list I created on your website?”

Employee: “No, they’re just for ordering. Sorry.”

This company has gone to great expense to build a website and brand. This site lets customers like you and I to create wish lists of items (in this case books and CDs).

This just doesn’t make sense to me. Does this company see the web as something different from its bricks and mortar stores? I suspect they do.

However to me, the Customer, it’s all part of the same buying experience. Why can’t I access my wish list from any store? For that matter, why can’t the employees also be given access to that info so that when I come into a particular store they can greet with more than the standard “Hello, can I help you find something?”

Of course you can! It just takes a different perspective, seeing things from the Customer’s point of view of the buying experience.