Why The Telcos Hate Innovation

from the it's-a-threat dept

Business Week is running a fascinating essay that highlights all the reasons why the telcos hate innovation. They're not technology companies, which is highlighted by how little they spend on research. They're in the business of extracting as much money as they can from their network right now -- which is a short-sighted and eventually self-destructive plan. They view real innovation as a threat, not an opportunity, because tech innovation is usually about driving down the cost of infrastructure. That doesn't help them squeeze more money out of it. As the writer of the essay points out, this is evident in the telcos continued fight against things like muni-WiFi, even as they quietly get involved in muni-WiFi projects themselves.

The article also highlights how this lack of technological innovation from within the telcos means that even in areas where they have every opportunity to innovate, such as IPTV, all they're doing is catching up to what the cable providers already deliver. They're missing the opportunity to do much more. In fact, this is a great way to view the net neutrality issue. If the telcos were really about promoting innovation (and the author makes fun of AT&T for claiming it needs to merge with BellSouth to be able to innovate), then network neutrality wouldn't be an issue at all. The company would focus on making its platform (the network) as accessible and as fast as possible -- to encourage more innovation and development from third parties. Instead, the telcos focus, not on encouraging innovation, but on setting up roadblocks. The roadblocks give them the power to squeeze more money out of the network -- but at the expense of actual innovation that would make their networks that much more valuable.

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  1. identicon
    Man In Black, 21 Jul 2006 @ 11:01am

    Re: hhhmmm

    If the telcos really were interested in innovation of services they would themselves be using their own network for VoIP. Digital phones would be from them (and would have been for years now) and they would be ahead of what the cable copmpanies are doing now, converting their analog infrastructure to dual use and offering digital services, not behind. There was digital capability on telco hardware long before cable and satellite digital services came along but telcos chose not to fully extend that capability to the consumer level. If it weren’t for the cable companies offering broadband they would probably still have consumers using modems and paying extra for the high analog usage of those lines as well as offering only leased digital lines to business for horrendous amounts of money. (oh yah, they still do)

    Why shouldn't someone else be allowed to use their own infrastructure to do what telcos specifically and deliberately chose not to do. What the telcos are doing with roadblocks and lobbying now is nothing short of protectionism and sour grapes over their own failure to use their own invention. They chose to reach for my wallet instead of reaching for the future, why shouldn't they pay for it, I already did.

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