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Monday, January 16, 2006

Why Internet Neutrality WILL win.

A detailed look suggests that the Internet is succeeding largely for the same reasons that led the PC to dominate the mainframe, and are responsible for the success of Microsoft.

While the one of the mainframe's was an expensive, but limited market, the PC was the typical mass market product, which, on one side, having an accessible price, reached the pockets and the homes of the mass, and on the other could create the huge market of software.
Like the Internet, the PC was the "dumb" infrastructure that could adapt to any need and multiple tasks when the appropriate software was produced.
Many of the factors powering the ascent of the Internet are similar to those that led the PC to displace the mainframe and were exploited by Microsoft to dominate PC software.
In both networks and computing, the end users typically care just about getting a few crucial tasks done.
However, end users are not necessarily the most important players.
In rapidly changing fields,application developers are the crucial ones, creating tools that attract users, tools that users do not know ahead of time they need.
The Internet won because it is the land of opportunities.
The rise of the PC and the Internet has resulted in a migration of intelligence towards the edges, in both networking and computing.
The result is and will be even more in the future the dawn of a new economic class: the class of small companies.
Take for example the content producers and TV broadcasting.
A PC, a cheap digital camera, the appropriate software, can produce better results than many operators and huge investments could do some years ago.
Content producing is more a matter of brain and intellectual skill than of big investments.
And the broadcasting of content is more a matter of bandwidth at the edges than of investments in frequencies or satellite bandwidth.
We will see in the near future the blooming of content broadcasted on the Internet, and we will see the economical market moving from traditional broadcasting means (TV, Satellite, cinemas) more and more to the Internet.

Nevertheless I must point it out that we are at the very early stages of this changes.
The real business on the Internet is still the "connectivity market" and the monopolistic companies that have ruled and still rule aim to keep it so.
But if History repeats, and undoubtely it does, Bill Gates should be the clear example of what the future will be.
The connectivity revenue can be compared to the Mainframe market, a slow growing, limited business.
Microsoft understood that the business was not in the hardware ( and it is not on the infrastructures) but in the software, read "content" in the Internet.
The greatest growth opportunities in telecommunications are likely to lie in services and content producing (and of course broadcasting).
And the "Internet Neutrality" in the end WILL win.

"Internet backbone traffic could in principle be carried on a single fiber strand (Odlyzko, 2003b).
The fiber glut is a major contributor to this reduction of the core of the network to a low-cost commodity.
Technology had been reducing costs in the core far faster than at the edges even in the pre-Internet days.
Even if one had to build a totally new fiber network from scratch, it would not be very expensive.
Most of that spending in telecommunications is likely to continue to be at the edges of the network.
It may also increasingly be in forms that do not produce carrier revenues, as we move to customer-owned networks. (Signs of that are the fiber strands or wavelengths that large enterprises are increasingly purchasing to reach local exchange points, as well as the WiFi and other home networking setups that residential users are buying.)
There may be more heterogeneity even in local access, with DSL, cable, and broadband all available to most users."
Cost reducing usually means a growth of competition and competition usually means the need to please the customer.
And the customer wants a "dumb" network that carries the BITS HE wants,decides and pays for.

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