Yours is a nice "engineer" point of view. Why not spend $1200 to wire a store so that one data user can log on for free. Great. Now why would some person have a laptop or PDA there and why would they hang around MY $1200 box long enough to make ME (the store owner) money? To buy stuff in my store? Has not been the case, but has been the pipe dream of alot of 802.11 people.
Oh, and now that I installed this $1200 thing, do I know how to keep it running? What happens when the Access Point (AP) goes bad? How about when the store next door decides to use it for their store and they get all my customers when I do not? How about when they decide to run a server and load it up and send the library of congress to their brother in Argentina? Do I even know how to find it or track this down? How much do I pay someone to come out and fix this for me a year? Ok, so my $1200 thing just started costing me $4500-$10k a year. Now how do I generate revenue from someone who I allow on my system for free? Who pays for my $100 a month DSL connection? Do I take time to stop my business when some data user wants access and knows I have teh wireless thing and wants me to fix it right now...
Or take the case of Starbucs. They have these little tiny stores which are always crowded and built a business plan around fast service, fast turnover of customer base, low paid, low trained operators, small staff, 45 seconds per customer contact time. They put in this nice wireless thing. It is in conflict with their basic customer premise, which is to serve alot of people fast, get them in, get them out. So now does Starbucs change the store fronts, by adding a giant seating space with alot of tables? do they change teh business plan to allow a different lease arrangement in the 10,000 stores they already have? Do they add staff and overhead to get more business? Do they hire more trained peopl who can fix and maintain and answer questions on the wireless thing? do they sell wireless things at the store so that customers who come in can get on teh system while there with point of sale? Do they now need trained wireless installers working there? Will the time at the cash register increase? Will the line time increase for coffee? Or do they just add helter skelter some new wireless thing expecting to increase the number of customers who come in, but thereby piss off the existing customers since there will never be any place to sit or enjoy a cup of coffee, lines will be longer, stores will be more crowded, operators will have to drop everything so that a few engineer technotypes can get stock quotes and read the internet while standing in line..........
Nobody is arguing that this would be nice to have a world where there are connections everywhere. the argument is that it is not wihtin business ideas to have this because without some form of subscription and authentication, the person who invests in this has no payback on the investment. It does NOT drive customer base to your store in the general case. And as the density grows in this, it will be less and less special as time goes on. It is exactly like the Yahoo ads Click rate that they used to charge for. Now that everyone went out and copied the Yahoo model, nobody gets ad click revenue from web pages any more. Or NetZero.
I don't write this because I am ignorant in this, I write this because I spent a year working in this very field. There is a great difference between engineering ideas and business ideas. I don't write this because I want to downplay teh industry, but rather I can report to you the actual HISTORY of the industry. There are literally 100, if not 500 new little companies out there which came on the scene with just about the same fresh idea that you have put forth only to find out they cannot recoup their operating costs, lose about $100M in sunk costs, and then file chapter 11 and go out of business. The naieve veiw from the consumer that data is free is not the same one that is needed to fund the infrastructure, pay for maintenece, support, and recurring charges. I am absolutely serious that Cisco found a nice place to dump alot of inventory and thus create an accounting writeoff for the Starbucs deal. Starbucs did not pay for $100M in infrastrucutre. Again, there is no business return there. If there were, why didn't Mobilestar make money at it? They were the first mover advantage in teh Starbucs deal.
There are also about 30-40 different types of 802.11 systems, many of them totally independently different than the next one and do not interoperate. 3COM does not work with most others or pretty much with itself either, LU stuff is in a class of it's own, the Wi-Lan stuff is in it's own space. Only those that are based on the Intersil chips seems to have the ability to be used between alot of manufacturers and be consistent until they add their own software stack on top of it that changes this. the technical side of the industry is somewhat of a mess and the incompatibilites make the non technical person scared of the tehcnology. You buying a box at the electronics store for your own personal house for about $300-400 is a much differnt proposition that projecting it to millions of devices and customers and making a real business out of it. So even if I were the store owner and decided that I can get a very cheap 3com box in there, how do I deal with all the people who come in with an 802.11 sticker on thier "thing" and demand to know why they can't get on this system...
Sorry to burst your bubble. Just look at NetZero. that is just about their entire corporate return as well. The Internet is NOT free. Just about everyone who gets on it has to pay an ISP a fee like $10-$50 a month. those people pay GIANT acces fees to get on the internet. The faster the line, the more you pay. It has to do with how much of a fibre channel you take up. If you want 10 Mb lines, your going to pay $300-500 a month. the 2 GB line behind that to support you costs way way more than that per month for the operator to maintain, plus line termination charges at some internet node site plus access fees. they don't just give that to you for free on the ISP business side.
Did you know that the line to your house is only guaranteed to be 21.8k BPS BY LAW? And that at any time, the operator of that switch can DOWNGRADE it to that number? You see right behind the dialup line is a digital converter and when you sign on at 56k, you consume more bandwidth in thier fibre than you do if you sign on at 21.8k, so in cost cutting they MAY turn all the lines down to 21.8k. then when you want faster lines, they tell you to buy a DSL connection or get cable modems. but these are $50-$200 a month. Can't happen? Sure did at my house in rural Colorado. Qwest Communications did it one day. Can't do a thing about it except to buy the DSL line at $1500 install plus $150 a month. Or help the town buy their own fibre cable into town for $750k and then route it around using cable, 802.11, and Airfiber repeaters.
Also by law, they can require you to pay a different rate for data than for voice. that was in teh 1996 telecom bill. Just that right now, most of the old wireline systems cannot deal with the complexity of tracking down data users, installing the needed blocking equipment, dealing wiht the customer service and complaints involved with changing the data requirements to your house, etc. Your just operating on this "data is free" thing because of where we are in technology. Enjoy it but don;t expect that the industry will keep on passing up this opportunity to charge you.
I spent almost 6 years at Qualcomm working on data and data things. I agree that data has been held down for a long time, but exactly your idea that it should be free is why it has always been treated as a second class citizen for all this time. Users expect data to be free, since they have for so long dialed in on a telephone line which up until now has been unmetered at their home and spent hours, if not days on the internet. their expectatiosn is that it is free and they cannot be stopped. But the wireless carriers do not have all these wires to carry loads back to their main office, they have this precious frequency that has some giant capacity limitations. If the data users keep up how they have been for the last few years, then they do not know how the data usage will turn out. Will the users stay logged in for 24 hours? Will they take alot of time away from voice minutes? How will the size of the data group grow over time? At what point will the data users overtake and use more time than the voice minutes? How can I keep the revenue on my carrier system growing if this user population grows in a way that I did not predict? What happenes if I charge by the minute at some point in teh future, as I would have already ticked off my voice users by offering lowered availability to accomodate my data users, but my data users now expect a "one fee for unlimted access" deal. My data users are now consuming more bandwidth than I can handle. How do I place real limitations on data bandwidth in my contracts such that nobody can make a repeater box and resell my data lines (this covers the HDR to 802.11 store box that you talked about above to bypass the $150 a month DSL with a $50 a month HDR).
Data is more than just technology, it is business.
(PS: I also spent 4 years working on cable TV business stuff for General Instruments and making the cable TV scramblers. This was also an industry in which eveyrone felt that it should be "free". What has happened now after 16 years is that the industry offers so much more that your wiling to pay the extra $30 a month for all the extra stuff and this drives the subscription fees. The industry had to change alot. Your still able to get the "over teh air" channels, but this is limited to about 10 in San Diego and more than half of those are not strong enough to get to your house in a good fashion. The size and strength of TV transmitters is going down in major metro areas since almost eveyrone is covered by either cable TV or sat TV these days. In less than 5 years, we may see less and less use of actual over the air TV transmission and more conversion to wireless uses of that same freq space. Go examine how this industry changed and how the it is now.) |
