Telepocalypse

Intermission

We interrupt this transmission to inform you that Telepocalypse is away on business and family travel until 4 July. Posting will be somewhere between nothing and zero, no doubt much to your combined relief.

It's not what you do, it's...

Oops. BT have blown it with their new BT Fusion dual-mode device.

What's wrong?

There should have been two numbers for the device, a mobile and a geographic one. Sometime you really do want to call the place, not the person. ("Can I borrow an egg" type calls.) I suspect the real motivation of avoiding a geographic number is to try to slip into the less-regulated mobile space and finesse or delay some of the unbundling that's about to hit. Damn the customer.

Secondly, the billing is screwed. It misunderstands how value is created in mobility. It comes from the inbound calls, not the outbound ones. Payphones and general blagging and borrowing made an inferior but acceptable substitute for mobile-originated calls. But the ability to be reached anywhere is unique. Thus the outbound calls should have been all at landline rates. Having to worry about which network you're on is ridiculous. Doesn't need to be the cheapest, just mid-range competitive. OK, some people get to call a lot for lower rates -- but the US cellular industry thrives quite nicely in such conditions. [The difference in population densities and spectrum availability means crowded Europe can't go as far, though.] BT should be able to negotiate a cracking MVNO deal, and the strategy should be to get all BT broadband or PSTN customers to participate in some way to ensure high volumes.

It'll kill them on customer service costs, with endless billing queries. Their brand will get hammered, too, for example when someone gets a billing surprise because their home connection is down. Betcha this one ends up on Watchdog.

Inbound calls would mostly be to the mobile number, for which there is a high termination fee. That's your revenue source. You want to incentivise people to give out only their mobile number, especially when they might otherwise have quoted the landline. How? Give them a kick-back; make the cost vary with how many inbound minutes you receive, or just give 'em a direct revenue share. Anything -- Tesco points, Air Miles, cold cash, whatever.

While you're at it, offer mobile numbers to all your landline customers, offer an open platform for access (so anyone can build a Bluephone), and make some excuse to the regulator that you can't tell anymore which users are genuinely mobile in the house versus those wanting to just get the kick-backs. (Evil? Moi?)

The fact that this product is also tied to BT's own broadband offering suggests they just don't get it. That's monopolist incumbent-think. Just work on taking a small slice of lots of value chains, not large slices of a few.

Whoever built the technology for this product should get a bonus. The person in marketing should be sacked. And the person in corporate strategy should be shot.

While I'm on about BT, they should be thinking about Yahoo!'s Dialpad acquisition and thinking, "That could have been you". Not as a buyout, but as the default partner for global VoIP/PSTN interconnect. What was stopping BT being the attack-dog against foreign incumbents? They should be getting fabulous wholesale interconnect rates. (It costs less at retail to call the US from here than it did from Kansas City long-distance!) They understand incumbency like nobody else.

I guess it's the same cultural reason none of the canal operators managed to run railways, and none of the railways managed to become airlines.

Ah, BT - "It's good to pontificate". I love blogging, and am so grateful for them supplying the material! I really don't know where I'd be without them...

Over to you...

3G guru Tomi Ahonen thinks that...

[By 2020] the "free" non-Mobile phone based "old-fashioned" internet has all but vanished.

What do you think? Sounds like he's forecasting a complete victory for IMS and that a whole generation will suckle at the teat of the mobile carriers -- regardless of the cost and Soviet economic outlook.

What do you think?

UPDATE: Tomi has written back in response, and rather than let his comment languish in obscurity in the comments section, I've upped it into the extended section of this post, deleted the original comment, and appended my further rambling observations.

Posted by: Tomi Ahonen at June 14, 2005 08:03 PM

Dear Telepocalypse,

Its funny you would pick up on that point on my 20 year forecast (which was focused on the future of the cellphone, not the internet or IT industry). But yes, I did say that by 2020 the "free" internet model will be extinguished and confined to the heaps of history.

This is no new point by me, and in fact strongly endorsed by many who bought my second bestseller - the world's only book on the business of advanced cellular telecoms, m-Profits (global bestseller in October and December 2003). I clearly stated back then that this trend was inevitable. There are more users on the (paid) mobile internet. There is no built-in payment mechanism on the fixed (free) internet (ie you have to use a credit card etc) but there is built-in payment on the mobile internet. And the users on the mobile internet are totally agreeable to paying for content, while on the free internet the content owners are beggers.

Let me see? More users. A built-in payment mechanism? And the users are willing to pay? Of COURSE all best content migrates to the mobile internet as soon as the mainstream population gets "smart phones" that allow that use.

Note first on the "communist" model - it is the EXACT opposite of what I posted. The current free internet model is the closest thing to communist ideals - having all content and all applications free, shareware, etc. Just like in the defunct Soviet Union, if nobody pays for it, nobody maintains it. Services disappear and websites are often loaded with obsolete content.

Consider this. In Japan and Korea today, more users are on the mobile paid content internet than on fixed "free" internet. 84% of Japanese cellphone users already PAY for news content on their cellphones. 30% of Japanese use cellphone services while watching TV. And if you think blogging is the future, think again. MOBILE blogging is the future. In Korea already 5.6% of all cellphone users are active mobile bloggers. In America only about 1% of all fixed internet users are active bloggers.

No, it is not at all my point that a communistic view is approacing. The EXACT opposite. A robust, money and profits based, fully commercial internet is coming. Not through IPV6. No, it is already here, in the form of the advanced wireless internet. And that future exists only in Korea and Japan today.

So yes, by 2020 I am certain the last vestiges of the old fixed internet will be turned off, just like today nobody uses Gopher and nobody talks about the Arpanet. There are almost 2 billion cellphone users already today. They replace their phones every 24 months. In only a few years these all will be very advanced 3G and 3.5G smartphones with fast access, color screens etc. With built-in payment, of course the best content will also be there.

I know it is difficult for Americans to accept that the future of the cellphone is not run by American companies. Yes, the cellphone was invented in America, but Japan, Korea, Finland, Italy, Israel, Hong Kong etc are 5 years ahead of you. Visit those countries and see the future.

Or read one of my books. I recommend my latest, Communities Dominate Brands, available at Amazon.com and any major booksellers.

And visit our blogsite for more of this future at www.communities-dominate.blogs.com

Thank you and keep up the excellent work

Dominate !

Tomi Ahonen :-)

Tomi

Wow! That was quick! Thanks for the reply. But I beg to differ in several -- but not all -- aspects. Critically, I see the world through a connectivity/service divide, rather than a fixed/mobile one.

It is possible we are using the word "Internet" to mean wholly different things. I see it merely as a service-agnostic connectivity layer. Do you really believe that in 20 years we'll still need the permission of a cellco to get the features we want on a handset, be able to run the applications we desire, and send whatever data we need without being price discriminated to death? I think not; which implies there’s an ability to make unmediated connections between peers, who can choose to communicate any messages of their choosing. That’s the Internet in anything but name. Granted, it will have to evolve from the current one which is a lab experiment that escaped before the trials were finished.

The “free internet” model you refer to must be one solely at the service/content layer; the connectivity is happily paid-for by the users on a capitalist basis. When you use the term I believe it refers to both service and connectivity, with implicit cross-subsidy. My contention is that this model will unravel.

The power of billing is indeed a strong attractor. But that the power of commercial providers of connectivity -- and their consequent ability to bill -- will be preserved across the next twenty years seems suspect on several counts. Services will be billed for, but by whom is a more open question.

In the early days of mobile connectivity, with paging, the connectivity was the vast bulk of the value being delivered. The service -- of storing and forwarding small strings of text -- required little IT infrastructure or intellectual effort. Thousands of cell towers and trenches needed a lot of work.

By the time of 2G cellular, little had changed. The network was optimised for one simple duplex audio-stream application. The great majority of the value still came from the connectivity provision, effectively rented on a call-by-call basis.

Now we're seeing two things happen that are turning the tide. I'm calling the apogee of the model you describe.

Firstly, the value of the services is starting to rival and exceed that of the connectivity. The connectivity is becoming ever-cheaper because of technological progress; the services represent both a claim on human intellect and entrepreneurialism -- which doesn't follow Moore's law -- as well as access to certain well-defended economic assets (e.g. the eBay marketplace) which can charge high rents.

The service providers are therefore unlikely to be willing to be fleeced by the carriers who in turn wish to turn themselves into banks with huge free cash floats bearing zero interest. That doesn’t mean the handset won’t be a payment token – it will – but that the carrier is not dead certain to be the mediator of those payments.

Indeed, we may start to see “reverse-subsidy”: services like Skype, with whom you have a billing relationship, will partner with connectivity providers like Boeing Connexion. $30 for unlimited Wi-Fi on you flight, but use your Skype account and only pay $5/hour for Skype access. Companies like Yahoo! will likewise aggregate large numbers of services and do deals with telcos and hotspot aggregators to hide the access charges in the service fees. Superficially this looks the same, but the locus of power has moved a huge distance.

The second driving force is that the connectivity you describe as arriving in 2020 and beyond is likely to be delivered in radically different ways. The 5km haul to the nearest tower is going to be replaced with 30m hauls to your nearest Wi-Fi (or technology successor) access point -- at least when you're in the "home" and "work" domains. By 2025 we can expect mobile mesh networks to be common in the "other" domain, again reducing the power of network operators. (Check out Microsoft's R&D in this space as a precursor for how Windows PC will effectively create a "WinNet" -- access fee to B Gates Esq., Redmond, WA. How long till we see MotoMesh and NokiaConnect as rival public networks?)

This is simply a matter of physics and economics -- faster speeds are easier over shorter ranges; free unlicensed spectrum is noisier and only allows shorter range anyway; and broadband in the home and office is becoming a norm already, providing a ready-made back-haul. Thus the connectivity becomes fragmented in its supply. Those who build and operate networks are not guaranteed to be the ones who assemble the cross-network provisioning or do the billing and retailing. Concurrently, we are likely to see a significant growth in municipal or sub-divisional open access networks; personally I believe self-interest in rising property prices will drive people to vote and demand these.

We’re already seeing horizontal layers emerge where companies focus on simply doing one or two layers of the stack well: Boingo and Wayport doing provisioning across networks, plus retail; cellcos offering more and more MVNOs, and being left to do only network build-out and provisioning. I do not believe that attempts of cellular operators will be able to achieve a “reverse takeover” of all these landline connections that are used for local mobile connectivity.

There are also some external forces at work that argue against the cellcos being your bank: companies with whom you have an even stronger financial and customer intimacy bonding (e.g. Tesco in the UK); banks, who are unlikely to be passive in watching their payments business get eaten away from underneath; and governments, who may come to heavily regulate money-taking by telcos (and already do; see California regs on third-party charges on telephone bills).

I also think the power of the operators will be eroded by the “Skyping” and “Craigslisting” of the Net. Most of the value to users comes from interaction with close friends and family – not from glugging media content. Once you’ve paid for connectivity, the service element is trivial; so trivial you can give it away for free – like Skype. Even the “meeting places” that are left – many of which used to have entry fees – may get replaced by nearly-free alternatives. Thus the power of billing is again weakened; the story is really of a vast consumer surplus being generated from mostly peer-to-peer interaction. Because by definition this isn’t monetized, wheras much of the media content is, one can be distracted into watching only the money and assuming that’s what is driving the user behavior. Instead, you need to watch the gleam in their eyes as they use tools like Skype.

If you drop the price of “idea capital” by three, six or nine orders of magnitude, even a few motivated commies can keep a lot of people fed!

Your comment on mobile blogging is entirely correct. Indeed, it's unfortunate that "word blogging" and "event blogging" have got confused; we can use a pen for writing and drawing, but they're distinct activities. (I can't do the latter at all!) Mobile blogging fits Douglas Galbi's presence model of "being there". It lets you share the experience, unlike MMS which merely allows a technocratic sending of a picture.

As a British national and resident who lived in Kansas City for a while (“an island city surrounded by nothing but hundreds of miles of land”), I’m cautious of extrapolating from isolated cultural groups.

In summary, I think the forces that are separating service and connectivity for fixed access, and severing the cross-subsidy, will also apply to mobile access. The same crises will unfold, only slower. The answer will be new ownership and financing models for connectivity. And yes, that connectivity will be global, service-agnostic, and cheap – just like the Internet. Even if the cellcos manage to sustain the role of billing agent – which is uncertain -- it doesn’t automatically follow that they will be able to cross-subsidise connectivity. And if they can’t, the business outlook for mobile operators is as sick are wireline’s is today, certainly over the periods you were asked to foresee.

And yes, I’m going to keep reading your blog (already well established in my reading), commend it to my readers, and look forward to posting some reviews of your books in the future.

Subserviently and long-windedly,
Martin

Social outcast

Stowe Boyd has a wish list of social network features he'd like, as well as a lament for current public social network services.

My feature request? A telephony++ application that gives you the chance of calling someone's boss, secretary or deputy. Just the first level of awareness of corporate social structure.

Or am I asking too much?

OPINION://Choices, choices

The iPod was a success for many reasons: sleek design, uniquely large capacity, brand, content availability, and so on.

But what fascinates me is the scroll wheel. It enables you to rapidly navigate a large menu space very quickly. But cellphones seem to have got stuck with "microswitch mania". Just lots of binary on/off switches arranged in standard or crazy layouts. Ever wondered why the Blackberry is so popular when anybody can get e-mail dirt cheap on a normal smartphone? Look at that little analogue-feeling wheel. That's the secret sauce.

Without the scroll-wheel, the iPod would have failed. And the competition is barely catching up.

Reading through Russell Beattie's encyclopedia of Symbian Series 60 applications, you can't but help be struck with the though, "My Grandma! What a lot of applications you've got!". He does explain how he orders them, and bends the default folder structure to his needs. But that's a lot of clicks for him to fire up an app and do a simple task.

Now the application paradigm is broken for mass-market mobility in many ways I'll go into another day. But just imagine for a moment how much better a user interface we could make to explore these complex data structures. I don't know what the answer is -- it could be some combination of clicked, haptic, and orientation functions we've barely dreamed of. But I'm sure one key to unlocking the value of these devices is improved navigation of data structures -- as well as a better information architecture of those data structures in the first place.

Interestingly, we have never seen intelligent user interface components develop even for today's clickety-click user interfaces. Take an apparently simple thing like entering a US state into a phone. There are several naive approaches. Get someone to triple-tap the state abbreviation (hope you know your AR from your AS). Or have a drop-down list with all 48/50/59/65 of them (what, you didn't know?) -- lots of fun pressing the down key three dozen times. Even doing the simplest UI tasks across multiple devices and their form factors and software profiles is a nightmare.

What the developer needs is a UI component that will adapt itself to the device in question:

• On a touch-sensitive screen, you might show a map with the general regions (west, central, etc.); and then a second map where you select the individual state.
• On a device with a scrolly wheel, the drop-down list might be OK. On a device with a keyboard, offering the shortcut abbreviation with an option to to a look-up makes sense.
• On a simple 5-way joystick, you need something different. In that case it might be a smart algorithm that looks at the number of lines the screen has (say 8), and then divides the states into 8 buckets according to first-letter distribution frequencies: "What is the first letter of the state: A-C, D-H, I-L, M [lots begin with "M"], N, O-S, T-W." -- you can even use the keypad as a shortcut. The maximum subsequent length of the menu to select the state is ten, again fitting the keypad for a short-cut.

This kind of stuff isn't obvious. We have an opportunity to improve the basic user experience, and it isn't being seized.

I understand Microsoft have made quite a bit of headway in their development tools for hiding these device complexity issues. But their actual influence in the real world of mobile devices seems slim outside of the enterprise. At least they deserve a pat on the back for trying -- even if the motivation is classic embrace and extend of everyone else's platform by mediating with an abstraction layer.

Once you have such UI components, and they are embedded in the devices, the developer is freed from having to worry about it. Just include a tag in your application "Insert date here". Even better, the handset maker is freed to explore new user interfaces without having to worry about annoying the developers with custom code to support it.

What I want to see come to life are standard UI components for five essential things:

• Specify a person or respondent. Classic address book selection.
• Specify a place. Harder -- more degrees of freedom in this information architecture.
• Specify a time or period.
• Specify an action. Russel's problem is finding an action -- the right app to solve his problem.
• Specify a message or object. A more subtle one; a conversation needs you to be able to refer forwards and backwards among the messages you have exchanged across all media (e-mail, IM, voicemail, Skype, etc) or the objects you have (URLs, files). The Blackberry does this well, too.

The goal is to enable us to quickly navigate broader and deeper information architectures; and where there's a switching point that requires richer user input to decide which branch to take, it should be as utterly seamless and device-aware as possible.

Once we've got these "back to basics" issues sorted, it should help invigorate the mobile handset as a communications device, and divert attention from trying to make it into a rich media device that it doesn't want to become.

An impossible vision? I think not.

Click here to disintermediate

I compiled the following data for a recent client report, and thought I'd share it with you all, my dear unidirectional content consumers. I was just trying to illustrate that every telco attempt at tolling at the service layer (as opposed to just connectivity) results in a complementary industry that deals with disintermediating and arbitraging those toll booths.

If you've got more ideas or examples, just stick'em in below as comments and I'll assemble the better ones into an updated table. If this really gets big I'll think about making a wiki page.

UPDATE: Maybe I should call this "Newton's third law of telecom: for every mediation there is an equal and opposite disintermediation." (The first two are "An incumbent telco will keep sucking its customers dry unless an external force is applied", and "Profit = lobbyists x lawyers").

Why Skype is beating the crap out of MSN

Me and my brother give MSN a go. You might think we're unreasonably Skype-mad here, but it's not like we don't try the alternatives...

OPINION://Can I see your ID, please?

I've long taken an interest in what is called, for want of a better term, "digital identity". This little vignette by Scott Lemon triggered a thought:

I believe that one of the biggest hurdles that is impacting the successful creation and deployment of Identity Management Solutions is this complete misunderstanding of the origins of our identity. [...] If my identity is given to me by some community, how I can I be the owner of it? I am the recipient of it ... I have a community pointing their finger at me saying that it is true and accurate ... I even have to refer anyone asking for verification back to that community to have it proven.

The Intelligent Network is also a complete misunderstanding of how value is created in communications. I'm wondering if there's a link here.

The end-to-end principle works to maximise the option value of a network:

• Don't do in the core what you can do at the edge.
• Don't do at a lower layer what you can do at a higher layer.

Here's the way we preserve option value for identities:

• Don't manage an identity centrally that can be managed in a distributed manner.
• Don't do in hardware what you can do in software.

Here in the UK the government is planning the mother of all IT disasters with a vast central identity federation system across all government systems, and a physical ID card that is (eventually) compulsory for all citizens.

This is stupid for many reasons I won't recount here. It goes against both my principles above: it's centralised, and it specifies the hardware.

But there's a better way.

Why not invert the whole problem? What if instead of a central database, there were merely bits of data scattered around and "managed" by the users. (As Scott notes, "ownership" of identity is a fraught philosophical problem.) So when I get a passport I get sent a digitally signed set of assertions by the passport office:

• We saw this picture on date X.
• We issued a passport with number Y on date Z.
• The application was processed by agent A.

And so on. And I get to choose what instrument I store these assertions on. If I pay my utility bill, I get a digitally signed receipt in return. Eventually I accumulate my own personal store of digitally notarised assertions. I can control who gets to see these, and they control what inference they will make from it.

Now, if it turns out that Agent A at the passport office turns out to be a crook -- and someone else notices that passports issued by Agent A are correlated with fraud -- the distributed system can react to this data. A centralised government-owned database cannot, since it assumes the truth of all the data it stores.

Call it the firewall fantasy -- that the world inside the firewall is good and safe, and that outside is evil and dangerous. We put identity data behind an institutional firewall, and only good and true changes can be made. But that just confuses the ownership and management of the data. We can manage data in a distributed manner whose truth is centrally controlled.

By decentralising and uncoupling from a specific hardware solution we cure a lot of problems at a stroke. We've eliminated most of the "big brother" privacy issues, security risk of a central data store, and billions of dollars of IT expense. We can still have smart cards that store our ID -- but you and I get to choose what form of smart card we adopt. If I want to use my credit card, cell phone, or a USB key as the conveyor, that's my choice. We get the benefits of a strong ID system, without the dangers of assuming that a government stamp on a piece of data makes it true.

For instance, my ID kit might include an assertion that a birth certificate was issued in the name of Martin Geddes on a certain date in the early 1970s. Just because I turn up with a card holding that piece of information doesn't mean that the person is Martin Geddes. But that's what a government ID card is asking you to do.

It isn't hard to protect privacy when you share your "assertions". We don't need to reveal the actual data for some third party to be able to make trust inferences. They don't need to know my name; just that I've got a UK-issued birth certificate. (Or that a particular notary of government office claims to have seen the tatty piece of paper I have.) They don't need to know how much I paid for my electricity, or even to whom; just that someone called Martin Geddes has been interacting with society under that name for a considerable period. We just adjust the aperture to reveal the right amount of ID data.

The system becomes even stronger when these assertions are networked together. If I used my birth certificate key to open my utility account, that fact should be recorded. To lie about my birth certificate then requires me to abandon all derived identity data -- I can't use my utility bill assertion because I can no longer provide my birth certificate assertion.

I'm asking you to trust me because I've assembled a collection of data about myself that can be correlated by third parties who need not be present at the point of transaction. This system doesn't eliminate identity fraud -- you never can. It's a diffent layer of the identity stack.

There's a telecom angle to all this too. What communities do I engage with and pass through when carrying a cell phone? What identities should that device be a bearer for?

There are many examples of use of cellphone as identity token: mobile wallets, phone as authentication system (e.g. "tickets by SMS"), season tickets, or phone as affinity signal (football club face plates). More innovation is on its way. In fact, it's one area where the industry has so far got it more-or-less right.

One of my favourite patents I co-authored at Sprint was identity-based. Interchangeable faceplates are old-hat; "smart" faceplates have also been done. Our innovation was to make your faceplate smart in a unique way. Plug an Dungbeetle University faceplate on your phone and a proportion of your spending goes to the affinity partner (as well as the UI adopting elements of the affinity partner's branding). Just like an MBNA affinity credit card giving a 1% cut, but on your mobile.

You only have to ask yourself why we aren't using our mobile phones for carrying our identity around more. Maybe there's too much centralised control by telcos and lock-in into fixed hardware? Perhaps this requires a multi-generational cultural change?

The network is becoming a bottleneck to the exchange of value, because telcos can't figure out how to charge for it. They're addicted to rationing out scarcity. Proximity-based transactions seem like an obvious outlet for the creativity of the handset makers. Every one of them is going to have identity at its core.

And the telcos are possibly winners too: there's no Paradox of the Best Network if there's no network to worry about. They're nicely positioned to help you manage the storage and presentation of this data. Can they execute? I'll let you decide the truth of that -- on your own, decentralised.

OPINION://Teh wrogn kiind f niens

I've been reading more on IMS and its apologists.

In a nutshell, IMS is an open architecture designed for the convergence of data, real-time media, and networks. IMS can encompass all the wireline and wireless networks we employ at home, in the office or on the move. In other words, it enables the creation of converged, unified domains.

That's obviously not the meaning of "open" you would colloquially use: the technology is in principle open, the deployment most certainly isn't. In tribute to artist René Magritte, ceci n'est pas une pipe: IMS isn't an open standard, just an illusion of one.

Errr, and last time I checked the thing that encompassed all the networks was called the Internet, and the real-time media and networks were diverging at a rapid rate of knots. IMS is not a very compelling illusion, I have to say.

If your retirement dollars are invested in a telco, you should be urgently asking yourself what this stuff does that Skype doesn't do -- and Skype's only a whiff of what's possible.

Ah, here it is:

These are historic IP comms issues. Traffic on the Internet is subject to delay and jitter but there are various QoS workaround mechanisms and solutions. The IMS, however, addresses the problem head on.

During a SIP session the user’s device negotiates its capabilities and expresses its QoS requirements. When this process is finished, the device reserves suitable resources from the access network and when end-to-end QoS is established, the packets are encoded with the relevant protocol (e.g. RTP).

So I guess that conversation I had with my brother las night while he was downloading a ton of BitTorrent stuff and my wife was playing a networked game on our PC was just an illusion, too. Yeah, the voice quality dipped to good cell-phone levels from Skype's best-quality FM-like offerings. But who cares?

IMS's sole justification is quality of service bonded with application intelligence. Take that away and the house of cards falls down.

There's more:

There is a caveat: operators must have Service Level Agreements (SLAs) in order to guarantee the QoS in the interconnecting backbone.

Oops! So if your IMS stream traverses a single packet network that doesn't participate in some pointless bandwidth-reservation scheme, it's over. Hope your internet cafe, hotel, school and coffee shop are all wired up to the scheme. Don't forget to tell your mum to upgrade to an IMS provider, too, so everything works smoothly when you're visiting.

And heaven help you if your requirements change mid-session or you don't have a constant bitrate application, 'cos you're going to be sending a lot of signalling messages up and down trying to renegotiate paths all the time. ATM to the home failed for good reasons, folks. Sprint ION was the billion-dollar experiment that showed us that road is closed. IMS is ATM mk 2 -- now failing at a screen near you. Different technology, same business model.

Even more important is: what's the point of reliability and quality of service? What I want is successful communications. This is not the same as reliable single links in the chain. David Isenberg once wrote about buying as many nines as you need by bonding together different access networks. This is true, but my argument is you additionally need to look at the application layer to see how value is created. Connectivity alone isn't end-user value. Value is created by sequences of interactions that meet a user need at the least effort and expense. (Or to put it another way, the option value of the stupid connectivity has to be redeemed by an application at some point to make the option worth having.)

In traditional PSTN and mobile networks, you spend a lot of time manually working around the limitations: no presence; strange numbering schemes that confuse people, places, devices and services; awful UIs to messaging systems; lack of directory integration, and so on.

The result is voicemail ping-pong, unresolved converations, unheld conference calls, missed messages, forgotten replies, pointless calls to your secretary to get contact numbers, inappropriate interruptions, and so on.

Forget five nines. From the perspective of the user, voice telephony doesn't yet deliver one nine of success. Do you really believe over 90% of the calls you place meet their "objective" first time?

Now some might argue that IMS will deliver on all this too. Bollocks, I say. We don't know how advanced forms of presence and new UIs should be blended together. The MIT Media lab is still working on it. IMS requires all operators everywhere to co-ordinate on deploying new features if they're going to be useful to users. What's the point of a feature that only people who bought connectivity from the same source can access? It's like having a supermarket only catering to drivers of Toyota cars.

Skype is barely any better. You can use a common address book to IM me and see if I'm good to chat; and you can see I'm online and you have a chance of not getting voicemail. But what's with just the red and green answer/decline buttons? Where's the amber "will call you back later" button? The "screen to voicemail" button? I believe we can deliver these things without making the UI too complex for new users. But if Skype screws up, someone else can quickly take its place. IMS doesn't admit that possibility; it's stuck in the "telco as feudal overlord" mode of thinking.

Telcos as gatekeepers to new functionality doesn't exactly have a great track record. Expect the commercial damage that is IMS to be routed around. The idea that "surely they must know what they're doing when spending all these billions" just dosn't hold any more. Telecom has destroyed enough shareholder value via bloated spectrum auctions, overpriced take-overs and outright accounting fraud. Don't feed the monster with you own money, because IMS is the hope you're betting on. And IMS is fucked.

UPDATE 1: Just in case anyone gets the wrong end of the stick, Bob's got a great new blog and I read all his stuff, as well as the other VON Magazine colmnists. I'm just using his text to illustrate the standard IMS story that's being spun. Bob knows the real deal.

UPDATE 2: IMS will, in my opinion, still be deployed. But it won't create any premium service revenues of merit or any pricing power. The price of "voice service" within trust domains (among friends, same company, etc.) will be zero. Just a very expensive inflexible infrastructure which requires an army of people to negotiate and monitor interconnect agreements which are an order of magnitude more complex than today's peering/routing. More cost. Less revenue. Profit!

UPDATE 3: Is anyone else a bit suspicious of the claims from BT that their 21st Century Network will save a bucket of cash? Isn't the capex already fully depreciated on their current switches? Can't they do a phased replacement and cannibalise spares bit by bit when vendor support ends? Is their electricity bill for old iron switches really that big? Can't they automate away any of the management costs? Won't they have to retrain a ton of people to manage an IMS network? Why not let the workforce age out along with the obsolete equipment? I don't get it -- why the rush to IMS? Genuine question, answers please!

Baby babble

What I want: a Skype "phone" I can give to my daughter which is battery powered and lets her talk to her grandparents and -- in future -- her cousins.

Up to five buttons, one for each person. When they're online, the button glows green. When you're talking to that person, it glows red. Press the button to connect and disconnect. Press multiple buttons for a conference call between all grandparents. Totally under the initiative of your kid, no parents needed. Incoming calls? Probably not, or at least a parent-selectable option (naturally, only from pre-approved buddies). Auto power-off after 5 mins of relative silence.

Provisioned either remotely or via USB. Client could be running on an always-on PC and using the Skype API -- doesn't need local compute power, just ability to communicate button presses and 2-way audio. Bluetooth would do if it wasn't a hopelessly crippled "smart network" standard. Maybe even just a slightly hacked version of DECT or FRS radio technology instead. Should be tumbling out of Chinese factory for $10-15 or less. Retail for $80-100 this year, $49.99 in Costco next year, $29.99 in Wal-Mart year after. (Uniden can sell me 2 cordless phones and a base station for $80 at retail right now, and Wal-Mart 2 FRS radios for $8. This is a high-margin device in year 1.)

Device is not for holding to the head -- mama won't like that. Just a speakerphone-like device that sits on the floor.

The paradox: you get more value by not being able to initiate calls to any phone in the world. Less is more.

I don't want a smartphone for Christmas. I want a Fisher Price phone that works.

There's still time. Anyone dare?

Today's wonderful tale of woe

Sometimes I feel a bit sheepish introducing myself as the author of a blog called "Telepocalypse" or the director of "Telepocalypse Ltd." -- it seems rather pretentious to have transformed what was just a joke between myself and my brother into its own micro-brand under such a provocative and un-corporate name. (I guess it also doesn't exactly help the cause of selling consultancy to telcos wanting rescue advice, but it's a happy living, nonetheless.) What if telecom soldiers on quite nicely thank-you, the weed-free walled gardens bloom and prosper, and I'm left with more egg than Sainsbury's?

But then again, there are days when I read articles like this one on the Mobile Technology Weblog, and I have to grin wickedly with schaudenfreude.

Mobile Content Purchased Off-Portal Grows

... [Selling content via an operator's mobile portal] required little risk (other than the cost of developing the content) but the operators took a massive cut of the revenues - around 50%. And since about 70% of content was sold this way, that was probably the best route, provided you could persuade the operators to co-operate. This wasn't easy without an existing relationship and a track record and it was excruciatingly slow.

... But according to Vodafone and Orange in the UK, off-portal now accounts for some 70% of all content sold. This is an important trend.

As the CEO of Ryanair said, they'll crawl across broken glass butt-naked to get low prices.

... Finally, it rather proves Gareth Jones, the COO of UK's 3 network, wrong when he said last year:

"People don't want open access, that's not what our customers tell us they want. Anyone in their right mind who tries to do anything on the Internet with a screen that size has to be nuts."

It looks like either all the other networks' customers are different from 3's, or 3's walled garden approach may not last too much longer, if they're wise.

Telepocalypse prediction: within the next 18 months at least one tier-one mobile operator will abandon its own portal offering and partner with MSN, AOL, Yahoo! or a locally-strong equivalent. (And this is assuming, in my ignorance, none already have.)

Unbundle me

Whilst telcos rush towards bundling dodecatuple-plays as a defensive measure, budget airlines (i.e. the profitable ones) rush towards unbundling. From my inbox today:

easyJet has teamed up with Servisair/GlobeGround, one of the world’s leading providers of aviation services and Europe’s leading independent operator of airport lounges to launch easyJetLounges, giving you excellent opportunity to escape the hustle and bustle of busy airport terminals when travelling. You can relax in our comfortable Executive Lounges before your flight. Prices start from just £12.00 per passenger including VAT.

Somehow the standard bundling theory -- smooth out differential willingness to pay by aggregating the uncertainty -- isn't playing out at the hyper-competitive bums-on-seats network business. Are information goods fundamentally different? What's really going on here?

First law of telecom

Spotted at Keele services on the M6 motorway going home last night:

Apologies for the crapcam picture; the clouds and sunset are actually a reflection of the real clouds and sunset. The moons and planets are a reflection of the deranged touchy-feely-spacey marketing of mobile operator O2.

The top priority for every telco marketing department is to obfuscate the real price of the product. In this case, if all you've got is a lookalike GSM network with the usual indifferent customer service, the last thing you want is the punters shopping around based on price.

Hence wheezes like this one.

One of the great marketing innovations while I was at Sprint was the "Fair and Flexible" plans (PR regurgitation here). The perfect foil for comparison shopping -- a differently-structured plan that doesn't use the normal bucket break-points.

Incidentally, these pay-as-you-go plans are a bit of a pain for operators. People are increasingly expecting all-you-can-eat pricing for other media and communications. I'd expect PAYG to go the same way, where instead of the payment period being monthly, it becomes daily. First call of the day costs you -- but the rest are "free".

There's a little hint of this with Vodafone's price plans in the UK. Their old PAYG plans came in vanilla and "smartstep":

Calls to standard UK landlines and Vodafone mobiles: 30p per minute for first 3 minutes each day and 5p per minute after that.

So not quite "free", but getting there.

Their new option is called "Stop the Clock":

If you talk for more than an hour, you'll just pay for the first three minutes plus any extra time. [Even if you call for less than 3 minutes -- Telepocalypse.] This will be taken from your monthly inclusive minutes if you pay monthly, or if you're on pay as you talk, you'll need at least three minutes of credit.

Once your hour is up you'll go back to your inclusive minutes or standard rate charges. So you can make as many calls as you like, chat for up to 60 minutes and only be charged for the first three minutes of each call.

(Vodafone's web site is utterly beyond crap with all sorts of content management errors, timeouts, loops, and un-linkable URLs that embed your session ID. I'll rant about it in full another day.)

Stop the Clock is rather sneaky; Vodafone knows that the average call length is a minute or so. (How often do you terminate immediately when you get through to voicemail or an answerphone?) So when their copy says "Where's the catch: There isn't one.", you have to mentally append "(except you'll pay three times the usual price)".

Summary: Expect more of this price plan complexity to emerge. And don't let your mum change price plans without asking your advice first.

Emperor's wardrobe malfunction

I enjoyed reading this one on Ryanair, the zero-frills European budget airline.

Money quotes:

The Scotsman, quoting Ryanair's own figures, writes that the carrier handles 10,000 passengers per employee, compared to no-frills rivals EasyJet's 6,300 and British Airways' 760.

Note to sell-side telecom analysts: don't forget to ask your telco friends how they plan to slash 90% of their labour costs. You mean, they haven't told you already?

... On Lufthansa, [Ryanair CEO Mike O'Leary] has this to say about chief executive Jurgen Weber: "Weber says Germans don't like low fares. How does he know? He's never offered them any. The Germans will crawl bollock-naked over broken glass to get them."

Note to buy-side telecom analysts: spotted anyone offering low, low prices recently? If they've also slashed 90% of their labour costs, they're a buy.

E911 the easy way

Did you know that almost everywhere you can pick up a cell phone -- even if unactivated -- and make an emergency call?

The simple Telepocalypse solution to E911: make incumbent telecom operators unbundle E911 service and offer it both wholesale and retail as a stand-alone product.

Even better, make it free at the point of use. Got a POTS line? Just enforce a rule that says it'll always do 911. (These days there's no need to de-provision dialtone for disconnected customers; just disconnect them in software at the digital exchange.) If the benefit is mostly a social good driven by a positive externality (you call the ambulance on your phone when I get pains in my chest outside your house) then it's a classic case for taxpayer funding.