Fog Creek Software
Discussion Board




Clay Shirky: last mile?

The article by Clay Shirky seemed to be missing a crucial dimension.

Even local wifi access is basically attached to the wired network.

Wired networks cost money, and therefore have to generate money, and they have to be owned by someone.  The phone companies, with their much-inflated profits and IP-based backbone are obvious candidates for this.  Whoever controls the medium can demand the price people will pay.

Cable companies will have to compete with the phone companies, and I know who I'd reckon has the deeper pockets to fuel the race!  Cable bandwidth is already contended, and richer multimedia experience will only worsen that.

Besides, for many of us not served by cable, the national telco is the only way to go.

nice
Friday, January 10, 2003

But wasn't that the same as Fax? Telco companies owned the wires it used - but it didn't really mean they would have been able to generate more cash from additional services by selling a fax service.

The point of the article is that it's unlikely that telco's will be able to create services at the consumption end when the cost of setting up on your own is so low. Yes, as bandwidth usage increases from people using wireless networks  they'll make more money - but they won't be able to make money direcly from offering wireless services.

Personally, I think wi-fi has the beating of 3G. crazy? perhaps.

As wi-fi spreads so quickly, because of the low cost and it's incremental growth nature, I think it'll end up covering large areas (already does in some cities). Just needs somebody to figure out how to utilize all these diversily owned wireless networks and how to pay the owners for sharing some of their bandwidth. Although you wouldn't get complete coverage, I don't think people would really mind dropping into a GPRS zone as you move from densely populate areas. Unless of course you're streaming a movie on the move - but, er, does anyone really want to do this??

I think this will certainly be viable until 3G gets it self sorted and affordable - probably in about 5 years??

Yandoo
Friday, January 10, 2003

well, the telcos never did add a surcharge to faxing did they?  I know for a fact that even in the early days they could differentiate between voice and fax and modem calls etc if they had wanted to.

nice
Friday, January 10, 2003

Instead of deploying 3G, why don't they just set up many cheap wi-fi access points and make cellphones that can use CDMA/GSM and VoIP?

Tim
Friday, January 10, 2003

On a related note, Lawrence Lessig has been blogging about the broadband situation in Japan.  Apparently US$25/month gets you 12 Mb/sec, US$50/month gets you 100 Mb/sec.  (For the record, I pay US$50/month for 640 Kb/sec.)  He attributes this to last-mile competition.  Puts an interesting spin on the Shirky article -- if I could get that kind of speed, I'd be more than happy to share a WiFi connection with everyone in my (12-unit) apartment complex.

(link:  http://cyberlaw.stanford.edu/lessig/blog/ )

Sam Gray
Friday, January 10, 2003

Shirky's article was right on:

1. The barriers to entry into wireless networks are very low.  The market will be owned by the likes of Linksys which already sells easy to use hardware in the $100 price range.  Just like a fax.

2. Thought they might try, phone and cable companies cannot control what the customer owns and uses on his/her own premesis.  If I NAT several word stations or even an entire neighborhood onto my cable or DSL modem, the service provider is unable to discover the fact and/or do anything about it.

What is interesting is how rapidly wireless networking has caught on at the small biz level and home user level.  Ease of use and low cost hardware have already made this point moot and Shirky is truly stating the obvious.  The only amazing thing is that anyone disputes him.

Also interesting is how easily the Linksys NAT boxes allow you to set your own MAC address into the modem - allowing for a user friendly bypassing of cable modem "registration" parameters.

Once again, commoditization wins.

Nat Ersoz
Friday, January 10, 2003

"If I NAT several word stations or even an entire neighborhood onto my cable or DSL modem, the service provider is unable to discover the fact and/or do anything about it"

They could start charging by the packet, or alternatively do a stealth degradation of your service. Someone whispered in my ear that it is common practice in the ISP industry to artificially start degrading service for the 5% of users that consume 95% of your total capacity.

Just me (Sir to you)
Monday, January 13, 2003

A few things about 3G:
1. 3G is coming in some form or other. In some respects it has reached if not critical mass, then critical business mass. There is too much money tied up in it by too many companies for nyone to allow it to fail. And there are many reasons why it is needed. The thing is, it is not just about data services, and having a max 2Mb/S download rate. It is also about capacity - UMTS has far higher capacity than GSM, and the telcos are running out of capacity. They need you to go and trade in that GSM phone for a UMTS phone, but they hav'nt made a case for you to do it yet (because the services aren't there).
2. Wi-fi will not replace 3G until someone works out how to do handover between Wi-fi nodes. It isn't easy to do handover, and most of the people who know how to do it work for telcos and telecoms manufacturers. It gets harder when you have to do handover between networks owned by different companies, because then the billing issues get hairy.
3. 4G will come, but I personally think that it will not be anew system (like GSM or UMTS), it will be seamless interconnectivity.

best regards, Steve
 

Stephen Hill
Thursday, January 16, 2003

*  Recent Topics

*  Fog Creek Home