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
    Shawn, 10 Aug 2006 @ 6:20am

    Good Job, Mike...

    I'm glad you pointed out the horrible analogies that A. Coward was making.

    To refute them, I was thinking more in terms of a Flea Market renting out booths (All booths being equal), then upping the rent of successfull vendors, thus putting the brakes on them and reducing the overall value proposition of the entry fee (Typical Telco behavior as of late).

    Not that my analogy is great or anything, but A. Coward's were terrible, to the point of not actually being an analogy at all (I wonder what AC scored on his/her ACT/SAT?)... Not to mention the straw-man arguments... As I was reading them, I was laughing at how illogical the comments and arguments were. It reminded me of a heated religious debate in some ways...

    :)

    I like hearing people arguing all sides of a debate, as long as its rational. It seems that some people watch too much FOX news and delve into the realm of pseudo-debate/framing/flamebait comments. That doesn't help anyone...

    Keep up the good work, Mike!

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