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Thursday, November 15, 2007

What after the breaking of Monopoly?

One thing is inevitable in the next future: the end of the existing monopolies.
But what then?
It is clear too.
On one side we hope to have a more free, more competitive market, on the other side they hope to enlarge the top of the pyramid.
Something like a trunk cone, where, at the top, you still have monopolies like, but a slightly bigger number, the least the better...
Here is what Bob Frankston writes:

I’ve been struggling to explain the Internet dynamic and why it gives us abundant and inexpensive connectivity. And here we find the cellular carriers themselves decrying the dangers of abundance in their own slides – more bits/cheaper bits is something that they must prevent.

Perhaps they are comparing themselves to farmers who limit the amount they grow to keep the prices up but in the case of providing connectivity the problem is that the carriers represent an artificial business that is a creation of the regulatory environment – The Regulatorium.

We must embrace and encourage abundance and not let ourselves be captive of an artificial marketplace that is unable to sustain itself in the face of any competition. Do they really believe that they are the only ones capable of creating solutions?

Maybe so. After all, the US Supreme Court accepted the argument that Disney must have exclusive control over its creations because they have a special ability to be creative despite their tendency to tell stories based on others’ characters and their need to purchase outside companies, such as Pixar, to stay in business.

Amatrya Sen: no famine has ever occurred in a democratic country with a free press and regular elections.

Connectivity is the free press and the economic fuel for the 21st century. We cannot countenance a 20th century telecom regime dedicated to assuring scarcity.

Fear of Abundance

The conflict between the 20th century telecom industry and the abundance demonstrated by the Internet becomes very clear when we look at cellular telephony. Unlike land line telephony, cellular telephony has, from its inception, been able to maintain control over the services provided. They’ve kept the cellular phone from becoming a real portable computing device.

I’ve tried to argue that the current model of telecom assures scarcity and that if we shift the model we would have abundance. It’s nice to know that the carriers agree!

They are explicit in expressing their need to prevent abundance. Why do we tolerate such harmful behavior? It’s not just the rich Europeans and Americans that suffer – it’s far worse in developing countries cut off from the world.

The “strategy” of scarcity becomes very clear when viewing the “IP inter-working (IPI) Overview” from the European Radiocommunications Office. The URL for the PowerPoint report is http://www.ero.dk/0405891D-A250-46F6-9DE4-3894FBF32FDA?frames=no& but it may not be an archive URL. You can find it by searching fro “IP Inter-working GSMA ERO”. While the report itself may be only a working document the points it presents the defining characteristics of cellular telephony and make it clear that the biggest threat to the industry are empowered users.

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