Sunday, September 20, 2009

Unleashing the New Ether: Likely FCC Net Neutrality Ruling on Wireless Resets Content Stage

In the early days of radio, the signals that shot out from station transmitters went into what was then termed the "ether," the invisible and universal medium that carried radio waves through the air to whatever device could receive them. While we don't talk about the "ether" of radio much these days, it's clear that the concept of a universal and transparent transmission medium has not worn out its appeal. The infrastructure that carries much of today's hard-wired Web, for example, is based on Ethernet networking technology, a term that underscores Web technologies as an important analogy to radio's universal capabilities. Better than radio, there are virtually limitless Web "frequencies" - network addresses - that can broadcast on relatively clear Web channels on a global basis, frequencies that can accommodate hundreds of millions of broadcasters simultaneously.

The better-than-radio nature of the Web is a fairly constant source of frustration to telecommunications carriers, which are used to fee structures developed in the 20th century based on scarce transmission and connection resources. For these companies, the flat-rate nature of most Web access fees based on total available bandwidth limits their ability to charge for access to content based on whatever scheme suits their goals. This so-called "Net Neutrality" concept is therefore the target of much lobbying and jockeying by telecomms carriers interested in upping their profits from the Web. The debate over Net Neutrality is particularly keen in the United States because of proposed regulations by the U.S. Federal Communications Commission to support Net Neutrality concepts, and is about to get more keen as the FCC begins to roll out its proposed Net Neutrality stance. The Wall Street Journal reports along with others that FCC Chairman Julius Genachowski will announce in a speech on Monday that the FCC will target not only hard-wired connections to the Web for Net Neutrality governance but will as well put Web connections provided by wireless Web carriers under the same policy.

This is unhappy news for telecommunications companies, especially those such as AT&T who are struggling already to make advanced Web-browsing mobile devices such as the iPhone work on their already overburdened mobile wireless networks. To many of these companies, the concept of treating the Web as an infinite ether seems to run contrary to their ability to deliver services effectively. Yet here I sit, in the boarding lounge of an airline terminal, typing away happily on a high-quality broadband Web connection provided by a major telecommunications carrier. Moreover, if I were in an airport far from home, I might use my mobile Web connection to use Skype, now the world's largest international telephone call carrier, to avoid the stiff fees charged by traditional telecommunications companies. The mobile Web may be a little shaky, still, but it's a consistent enough medium in enough places that the FCC's argument for flat-fee network access is likely to hold water easily as a long-term policy for governing the growth of Web-based content and communications.

At the end of the day, though, this will be great news for publishers, who are struggling with an increasingly complex array of technology and marketing partners who are interested in taking their own share of the mobile pie from their efforts to get content to their audiences. As both consumer and business-oriented content suppliers get more adept at mobile Web distribution, it becomes more clear that while telecommunications carriers were necessary partners for the early days of mobile Web distribution, they will become increasingly onerous as the mobile Web comes into its own as a neutral carrier for their own sophisticated services. This doesn't leave much room for sympathy when it comes to the carriers, though: they get pretty hefty fees already from mobile Web services and can expect that the shift from hard-wired connections to the increasingly mobile Web is going to take care of them well in many ways.

Looking at Skype and the looming presence of Google Voice, though, it may tend to undercut telecommunications carriers' profits from traditional phone services that have helped to underwrite the growth of sophisticated mobile technologies. But by the time that this happens, most devices carrying mobile Web services will be affordable enough that today's premium prices for most devices are unlikely to be necessary, making it far more likely that we will enter an era in which Web-based phone calls will be a standard and not the exception. When this starts to happen, it's likely that mobile carriers will be making enough off of Web access that they won't care too much that many people will have foregone traditional phone access in favor of Web-only mobile access that also carries their phone calls.

I do think that the timing on the FCC's policies is just right, given the rapid development of Web services via mobile channels. It comes at a time that will help to accelerate both competition and useful services while still enabling carriers an important piece of the action while they ease their way into the Web-first mobile world. Good luck to Chairman Genachowski with his speech on Monday - and may the best ether win.
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