Thursday, September 6, 2012

Those Dumb Pipes

This is an older idea which had been floating around in my head, half-finished for a few years.

I was inspired by this Ars Technica article to think about the relationship between network operators — both cellular and landline — and consumers. The key quote from the article is by "one mobile operator" and is:

Some people like 3 may be in a position where it could make sense to accept that. But if you spend upwards of £40m per year building your brand, you don't want to be just a dumb pipe do you?

This is the fundamental tension between consumers and network operators: one wants internet access to be a commodity, the other doesn't. Why should I care about their brand? Electricity or water utilities don't have a brand. In most (all?) cases, they are government-granted monopolies, so there isn't any choice, but still, the only time I think about a water or electric company is once a month when the bill comes due. The only thing in the world I want from those companies is that when I plug in a lamp or turn the faucet, electricity or water comes out, (hopefully!) respectively. I want the same to be true of ISPs. It annoys me that the word "Verizon" is printed on back of my phone; we would think it bizarre if refrigerators had "National Grid" printed on the doors.

Luckily, we have been moving in this direction since the article was written. The incredible explosion of smartphones has put huge competitive pressure on text messaging, to the point where basically all plans have unlimited voice time and text messages, removing that significant avenue of differentiation. There's less and less room for the networks to do much of anything aside from providing a pipe to the public internet. Despite the fears of Network Neutrality advocates (of which I was formerly one) and a lack of legislative action, no traffic discrimination has taken place. Gradually, the carriers are being ground down into commodities, forced to compete only on quality, coverage, and price, and having their profit margins squeezed ever tighter.

We live in glorious times.