the world turned upside down
march 3, 2010
By Tom Wheeler
There in front of a crowd approaching 50,000, two wireless industry shibboleths fell by the wayside with hardly anyone noticing. In both instances the newsmaker was Verizon Wireless.
“Verizon Teams Up With Skype To Drive Smartphone and Data Plan Sales,” the headline read. Beginning this month a free app called Skype Mobile will be available on Verizon Blackberries, Droids, and other smartphones to allow users to bypass the traditional telephone network with Voice Over Internet Protocol, or “VoIP.”
Imagine it: a phone company enabling the bypassing of its voice network! Shall wonders never cease!
Verizon’s actions make it pretty clear they no longer view themselves as just a phone company – data and Internet Protocol now rule the day. “Can you hear me now?” has become “Can you get my data now?” While it appears Skype Mobile runs to the Internet on Verizon’s switched circuit network rather than true VoIP, nonetheless the wall has been breached. Hell starts chilling at the thought of a phone company offering free voice service.
As phone companies become data companies they are entering a contested environment. Those small, struggling empires Google and Apple consider IP to be their turf and wireless but a means of access. Another message from Barcelona was Google CEO Eric Schmidt heralding his company’s “Mobile First” mantra every chance he got. It’s fair for the mobile industry to ask whether Google’s definition of “first” means a gold medal or being the entrée for a big meal.
Which brings us to the second hell freezing over event in Barcelona: Verizon, a CDMA carrier, joined the GSM Association. For years there was a Holy War between the proponents of time division air interfaces and those favoring code division wireless systems. At one point in the mid-90s CDMA proponents even mounted a ham-handed effort to have GSM outlawed in the U.S. on the trumped-up grounds the pulsing signal interfered with poorly shielded devices such as hearing aids. The animosity between the Hatfields and McCoys paled in comparison to the warfare between the TD and CD folks.
With the next generation of networks using WCDMA you could argue that technological convergence brought about political convergence. Qualcomm long ago became actively involved in the GSM Association. Clearly, the common vision of an LTE future also was a driving force in bringing everyone together.
These hell-chilling developments – the end of a 25 year feud and the beginning of a data-first business orientation – have happened in the nick of time. The mobile industry’s need to coalesce around a recast vision has never been greater.
There is a huge difference between Google’s role as a data company and that of mobile carriers. Start with the fact that while Google and Apple are Intergalactic Brands with universal reach and a common platform, wireless carriers are regional companies with local brands and disparate platforms. Even more problematic, mobile carriers are fiercely competitive, spend their marketing dollars trashing each other, and as a result find it challenging to work together. benefits. Limits were placed on how many animals a town member could graze and fences were erected against commercial herds. Identifying similar antidotes to protect the 21st Century’s shared space will be more difficult, however, because the new commons is not a defined place.
Another announcement in Barcelona – the Wholesale Access Coalition – garnered much fanfare, yet demonstrated the difficulty the industry has in developing a common strategy. Bringing together companies representing something like 3 billion subscribers on a common application platform is no small feat – but that is the point. It took three years to get to reach this consensus. Apple had a universal app store platform the day the iPhone launched in June 2007 – and they aren’t alone. Because the wireless industry is a collection of competitive fiefdoms it took three years before carriers could overcome their individual orientations and their fierce competitive nature to develop something that meets customer needs in a manner similar to Apple.illustrate it with a fluffy drawing. Yet, ultimately it is the nature of the asset that must define the solution.
In a world that moves at Internet speed the wireless industry needs to be in front of change. The movement from a phone company to a data company and the end of the technology wars is an important milestone, but it is only a milestone, not an endpoint. In Barcelona I met one of the earliest members of the iPhone development team. Innocently, I asked him how long it had taken from the day he joined the effort until the product was shipped. The answer was six months! Six months from nothing to redefining the wireless experience, that is the warp speed world in which the mobile carriers must now operate. “place,” the Soviet Union. We responded by fencing off the threat with both offensive and defensive efforts. This was possible because our Cold War adversary still had the characteristics of “place” – a reality dictated by the nature of the networks that connected it. Because the communications networks of the time hauled activity to a central switch other activities symbiotically grew around that point. We could identify such points and target them for both offensive and defensive efforts.
When Cornwallis surrendered to Washington at Yorktown the British Band played a tune called “The World Turned Upside Down.” The formerly mighty British Empire had been humbled by a group of upstarts. The Internet turned the wireless world upside down. The early skirmishes with the new forces have not been particularly encouraging. The question remains to be answered whether the breakthroughs in Barcelona will herald a new beginning that can successfully affect the course of events. them to hide in a distributed network architecture.
Tom Wheeler is Managing Director of Core Capital Partners, a venture capital firm specializing in early stage companies, including next generation wireless services. For almost a dozen years prior to joining Core Capital he was the president of the Cellular Telecommunications & Internet Association.