Phone companies are becoming dumb. Get used to it.

Phone companies need to wake up to the fact that in the not so distant future, they’re just going to be a commodity.

Never has there been a time when consumers and businesses have had as much choice as they do now. Over the top services like Netflix, Google Hangouts, FaceTime voice, and the hundreds of VoIP providers are a testament to this. They all have one thing in common: an internet connection. Another thing they all having in common is that they are disruptive to the very companies providing the internet service, namely telephone and cable companies.

Despite their best efforts phone companies are doomed to becoming dumb data pipes and this is a prospect that terrifies them. And this fact is what the net neutrality debate is ultimately about. The incumbent players are trying to flex their muscle to remain relevant and by attempting to make disruptive services to pay what amounts to a toll. They are protecting their moat from the new services by making their competitor services more expensive. For example, Bell Mobility’s mobile tv option doesn’t use the data that’s included in the plan in order to make their service cheaper than a company like Netflix who eat into data plans.

So what’s the solution? In my opinion, it’s not stringent regulation. Due to the pace of technological change I feel that putting in absolute net neutrality laws is not the right path to go down. There is an argument to be made about the fact that some services (such as a heart monitor) should be given higher priority than someone trying to stream Youtube. Furthermore, overly strict rules can prevent innovation for things like Netflix Open Connect which help reduce the network overhead by keeping heavily used content closer to the end users.

In fact, 100% net neutrality would gum up the works for providing things like VoIP since technologies like MPLS rely on the prioritizing some types of data over others. Obviously this is inside a private network, but if overly strict rules are put in place it could create unnecessary hurdles for private businesses to operate on private networks.

This isn’t to say that there shouldn’t be a framework in place to prevent incumbents from degrading services to make their own services better. The CRTC and FCC do not have an easy task in making regulations that are both fair to consumers, but also not restrictive of technologies that make the internet better.

About the author

Andrew Seipp is the principal consultant for Telclarity. His company helps small to enterprise clients navigate the world of telecom and find significant savings. Having worked in the telecom industry for nearly 8 years he brings unparalleled insider knowledge to the table.

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Andrew Seipp

Principal Consultant at Telclarity
Andrew Seipp is the principal consultant for Telclarity. His company helps small to enterprise clients navigate the world of telecom and find significant savings. Having worked in the telecom industry for nearly a decade he brings unparalleled insider knowledge to the table.

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