Why Silicon Valley has to break the Telco/Cable Comms Cartel

Why Silicon Valley has to break the Telco/Cable Comms Cartel

Summary: Silicon Valley is teeming with established companies and startups whose services and products require communications services.Some of the startups are called Web 2.

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Silicon Valley is teeming with established companies and startups whose services and products require communications services.

Some of the startups are called Web 2.0 companies, or social networking companies, social media companies etc. It doesn't really matter what they are called, they all require a communications component to unlock the value they create.

This is also true for Silicon Valley's largest companies such as Google and Cisco, they are all increasingly reliant on being able to quickly get to their end user.

Whether it is a text message, or email, or sharing a video clip, or a myriad other many-media forms of communications--they all have to go through one of the big telecommunications or cable companies.

Last mile = Gold Mile

This Telco/Cable cartel sits smack-dab in the middle of Silicon Valley's innovation efforts. The Telco/Cable cartel control the communications gateways, they control the wireless services, and they are the most backward element in our society in terms of resisting technological progress in the US.

And control of these gateways means that it costs end users about $50 plus taxes, or about $60 per month minimum to be able to receive wireless or wired data comms. This is too much money per node and it limits the reach of Silicon Valley's companies, which effectively places a limit on innovation.

For example, Intel (a sponsor of SVW) has managed to push down the price of computing devices to levels that make them affordable to larger numbers of people than ever before. It has done this with the help of Moore's Law, by being able to reduce the number of computer components to smaller numbers of chips.

And with growing support for the Linux open source operating system, computing devices will become even cheaper.

But without cheaper data communications linking the computer devices, the development of innovative services will slow to a crawl. And the digital divide that separates the rich populations from the poor, in this country and across the globe, will shift at a snail's pace.

This is why Silicon Valley has to, and will, break the back of the Telco/Cable cartel so that communications services become cheaper and more accessible to everyone, and so that innovative companies can continue to compete based on the level playing field of net neutrality.

So how will this happen? The clues are all around us...

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Please also see:

CIO Today: New Rules Could Change Wireless Forever

Financial Post: Google: You ain't seen nothin' yet

Silicon Valley Watcher: What's Google up to? It's going to become a wireless telco with its own fat backbone... Posted by Tom Foremski on August 26, 2005 4:10 AM

Topics: Hardware, Networking, Wi-Fi

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  • Google & WiMAX

    Since Brazil is leading the way with a PHY layer for WiMAX down in the 700MHz spectrum, it would be a natural for Google to follow the Brazilian government's example and go the WiMAX route.

    http://wireless.fcc.gov/auctions/data/bandplans/700lower.pdf

    There's going to be almost 760 licenses sold, so it will be interesting to see which markets Google would buy into. Good thing Microsoft isn't sitting on the hoards of cash it once was - can you imagine a Microsoft wireless service offering?

    Seriously, though - it will be interesting to see who buys licenses, and what kind of penetration WiMAX will make against the monopoly telcos and EVDO/4G services. WiMAX is much cheaper to implement and has a slimmer stack without all the 3G baggage.
    NetArch.
    • It makes sense...

      The clues are all around us.... The Telco/Cable cartel won;t go down without a fight. This is one of the most interesting stories around.
      foremski