Telcos Out To Silence Net Phone Calls

from the growing-threat dept

The phone companies have shown an amazing ability to avoid offering real new services to their customers until they’re absolutely forced to. When competitors come along, they’ve used their monopoly powers or political clout to change the rules to get their wishes. This article suggests the Bells are about to

do the same thing to voice-over-IP calls, since they’re finally realizing that they present a real competitive threat. This is, yet again, another clear case of companies not understanding how disruptive technologies work. VoIP is a classic example of a disruptive technology – cheaper, but it starts off not nearly good enough to match the incumbent offerings, so the major players ignore it. However, it’s getting better over time, and is basically at the point where it’s “good enough” for many users. So, now the Bells want to block out the VoIP players. In doing so, they’re (like so many other companies) trying to shut down a “competitive” technology without realizing the opportunities it presents. The Bells see it as an alternative way to use the telephone, when, in reality, VoIP changes the very nature of what you can do with the telephone. It puts the smarts into the network so that anyone can add additional features instead of being forced to go through approved services hosted by the Bells themselves (see why they’re upset about it?). But, what the Bells refuse to see, is that by making the telephone smarter and more useful, they open up more opportunities for themselves (and others), if they would just figure out how to capitalize on them. Instead, they’re futzing around trying to figure out ways to slow down VoIP providers – while those VoIP providers figure out how to give consumers a better service. Update: In somewhat related news, the Internet Home Alliance has come out with a report telling technology companies they need to innovate or die. They say most companies focus on their traditional businesses, and miss the opportunities that come along. Seems to fit with what I said above.

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Comments on “Telcos Out To Silence Net Phone Calls”

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rj45 says:

Bell's opportunities

re: But, what the Bells refuse to see, is that by making the telephone smarter and more useful, they open up more opportunities for themselves (and others), if they would just figure out how to capitalize on them.
Bells don’t deploy new opportunities proactively. They only deploy new stuff defensively.

The new capabilities you speak of are mostly end-point-based. Bells rely on central control and on being a non-bypassable middleman. There is no reasonable way for them to capitalize on end-point-based capabilities short of blocking their passage through their network, and only allowing them to pass if you pay a toll to the gatekeeper. That no-value-add mark-up would kill the value of the new capability.

They don’t refuse to see it. They see it exactly for what it is–something that makes their monopoly services irrelevant, and makes obvious that their services are highly constrictive to innovations and hugely overpriced.

Mike (profile) says:

Re: Bell's opportunities

Ah, but the point is that this will come true no mattter what. If the Bell’s were (amazingly) to embrace it early, they could at least retain some control, and leverage their brands to offer some element of these services. Instead, they’re going to let other companies like Vonage do it instead – and then will whine and complain about it – when they had the chance to stake their own position early.

Sure, it erodes their current business model, but that happens no matter what. Shouldn’t they be positioning themselves to take advantage of it, rather than waiting to be proven obsolete?

rj45 says:

Re: Re: Bell's opportunities

ah but you are responding with logic! Only “real” companies do that. The Bells think (and have shown via the near total lack of enforcement and meaningful fines) they are above the law. Laws are mere suggestions to them. They don’t respond to competitive threats by trying to come out with more clever products and services. They respond by bribing lawmakers to make the threat illegal or so burdened in bureaucracy that it can’t successfully overtake their legacy offering. That is their core competency; innovation is not. They have something like a 10:1 spending ratio in favor of lobbiests over internal R&D. Their R&D is essentially limited to the development of defensive positions JUST IN CASE their lobby efforts fail.

jjfresh says:

Re: Re: Re: Bell's opportunities

do you think that that is the only way for the bells to do a counterstrategy? To start a Vonage for themselves? But that is spending money to do the exact same thing as the good old PSTN network.
Do you think this is inevitable for the bells to get into VoIP/SIP etc… that may potentially offer new services? But the question is what are these NEW opportunities with VoIP? Is it better to innovate from scratch wiht VoIP or innovate on top of the old PSTN network which may be good money after bad?

At least a counterstrategy to cable is get into their core business of video/tv etc..but to attack vonage is tricky coz all they have is the phone service.

Lobbying with the regulators will only buy them time and also impede on their own innovations.

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