TechSpot

Service providers still act like utilities

By Jos
Oct 4, 2016
Post New Reply
  1. If you ever want to enliven a cocktail party filled with executives from the telco or cable industry, just start talking about dumb pipes. As in, “your service doesn’t offer anything more than a simple connection from my devices to the internet content I want—it’s a dumb pipe.”

    Of course, most of you will never have to worry about going through such an awkward social encounter, but if you do—that zinger is bound to get things going.

    All kidding aside, the notion that carriers and other service providers offer little more than basic connectivity has been an industry hot button for some time. Even now, despite a number of efforts to spice things up, most telcos and cable service providers are seen as companies that provide a very indistinct connectivity service that people only reluctantly pay for.

    The primary differentiators for competitive players in this space are price, price and, oh yeah, price, with maybe a bit of coverage or service quality thrown in for good measure. It’s little wonder that many consumers hold these companies in such low esteem—they just don’t see the value in the services beyond basic connectivity. It’s also not surprising that so many people are looking at cord-cutting, cord replacement, or other options.

    But it doesn’t have to be this way.

    The amount of data that telco and cable service providers have access to should allow them to generate some very interesting, useful and valuable services that consumers should be happy to pay for. Now, admittedly, there are some serious privacy and regulatory concerns that have to be taken into consideration, but with appropriate anonymizing techniques, there are some very intriguing possibilities.

    For example, by leveraging new machine learning or artificial intelligence algorithms, service providers should be able to aggregate data usage patterns to help determine everything from traffic patterns, to breaking news algorithms, program recommendation engines, and more.

    At a more basic level, who better to manage things like my contacts, or offer an intelligent, unified communications service that lets me see and manage all my various forms of communication, than the companies over whose network those messages travel?

    Ironically, for those who are particularly privacy sensitive, the notion of paying for a highly secure, completely anonymized truly “dumb pipe” could also be an attractive option. While certain levels of privacy and security should be expected (nee demanded) from service providers, the notion of paying for extra security is something I believe most consumers will start to really appreciate.

    More critically, there is a crying need to provide some kind of smart hub inside our homes so that we can easily see, connect and manage all the potential connected devices and services in our homes: from smartphones, PCs and tablets, to TVs, lights, HVAC controls and even smart cars. But instead of offering an intuitive, friendly device similar to something I wrote about a few weeks back (“Rethinking Smart Home Gateways”), service providers continue to offer non-descript black boxes whose very designs belie their archaic, impenetrable means of operation.

    The fundamental problem is that service providers act more like utilities than companies that offer services people are happy to pay for, such as Netflix.

    The fundamental problem is that service providers act more like utilities than companies that offer services people are happy to pay for, such as Netflix. There’s little sense of personalization or differentiation from service providers and the aforementioned router/gateway boxes they currently force into consumers’ homes are a classic example of that utility-style of thinking. Honestly, if your power company was to put a box into your home, do you think it would look much different?

    In order to break this cycle, and avoid the risk of being cut straight out of people’s lives through various types of cord-cutting/replacement mechanisms, service providers need to start thinking very differently about the types of services they offer. They need to create, discover and deliver services that people actually value, and do so in a more personal, non-utility like way.

    To their credit, a number of the major US telco and cable providers are making efforts to reach these goals, but they still primarily reflect a utility mindset. To break that means of thinking, they would be wise to look at how providers of services on the Internet—whether that be someone like Spotify, Uber, or Amazon—build and sell the kinds of services that consumers are more than happy to pay for. Only with that kind of out-of-the-box thinking can they truly move past their utility-driven focus and stop being little more than “dumb pipes.”

    Bob O’Donnell is the founder and chief analyst of TECHnalysis Research, LLC a technology consulting and market research firm. You can follow him on Twitter . This article was originally published on Tech.pinions.

    Permalink to story.

     
  2. Cycloid Torus

    Cycloid Torus TS Evangelist Posts: 1,657   +309

    Maybe best if they become 'utility' dumb pipes.
     
    Omnidon, Evernessince and DerekA like this.
  3. Theinsanegamer

    Theinsanegamer TS Guru Posts: 374   +329

    but but but that would be SOCIALISM, WHICH IS COMMUNISM!!!11!1!! /s

    In the end, you are correct. Having a dumb pipe feeding ISPs is the only true way to get actual proper competition, because the massive cost of overbuilding an area with multiple lines for multiple ISPs is ridiculously expensive. Local loop unbundling would fix this issue, but good luck getting government to actually pass that law.
     
    Reehahs and wiyosaya like this.
  4. Reachable

    Reachable TS Enthusiast Posts: 55   +8

    The ISPs are public utilities and that's all they should ever be regarded as. They should be regulated just like traditional telephone and electric utilities. That means price controls and other restrictions and obligations in the public interest. The author of this piece seems to be acting as an advocate for the ISPs, trying to come up with ways to rationalize their continued lack of responsible oversight and regulation.
     
    Omnidon, Reehahs, Raoul Duke and 2 others like this.
  5. Evernessince

    Evernessince TS Evangelist Posts: 1,186   +580

    The cost of aggregating massive amounts of data from each and every customer would be an IT nightmare. It would be on a data collection scale even larger than the NSA. Regardless of the privacy concerns, said data would have to be collected thoughtfully (so that personal information is not added) and it would have to be very secure. Another huge problem with this is said data is mostly worthless to an ISP. As the author states, that would have to form entirely new services just to find a use. If a company is allowed to collect this data the most economical use is going to be selling it off to companies or governments who can use it.
     
  6. wiyosaya

    wiyosaya TS Evangelist Posts: 1,038   +269

    I found myself thinking the same thing when I was reading this article.

    Why I as a consumer of an ISP hold them in such low esteem goes far beyond that which this author puts forth. Start with blaming e-mail problems within their network on my system, slamming elderly adults with no technical knowledge onto their phone service, telling me that they do not make mistakes, providing minimal data rates with no indication that they desire to upgrade their service, trying to sell me more service when I am on the phone with them complaining about their service in the first place as if to say, I see you are unhappy with our garbage service; we have more garbage service for you to buy if you want to.

    @Mr. O'Donnell, what planet are you from? Why on Earth would I want to pay my ISP for some service I could care less about and, better yet, do not need?

    Better yet, stop writing articles like this as it seems your reality is grounded firmly in a fantasy world.
     
    Omnidon, Reehahs and MonsterZero like this.
  7. MonsterZero

    MonsterZero TS Addict Posts: 229   +89

    They need to be regulated like utility companies otherwise they turn into money hungry services, look at TWC. The reason they should be regarded as utilities are for the same reason your water, gas, and electricity are regarded as such, they are basic necessities that everyone has the right to enjoy.
     
    Omnidon and Reehahs like this.
  8. Raoul Duke

    Raoul Duke TS Guru Posts: 930   +354

    I have no interest in them being anything other than "the dumb pipe" and I hope they stay that way
     
    Omnidon likes this.
  9. Branded

    Branded TS Rookie Posts: 23   +12

    Most ISP's in America (the author's subject country) can't even do "dumb pipe" well. It is the dumb pipe that should be offended to be associated with the ISP's.
     
    wiyosaya likes this.
  10. ScubaRhys

    ScubaRhys TS Enthusiast Posts: 62   +16

    I work for southern electrics telco department and I completely agree, it's actually our strategy. We even use the same software and processes that we use for our gas and electric customers.

    I must say however that customers seem to expect much more from their broadband provider compared to their expectations from a utility provider.
     
  11. Barry Rogoff

    Barry Rogoff TS Rookie

    The most important thing an ISP can do for its users is to provide education and support with respect to registering a domain name with an email address (MX record). When a typical user signs up with an ISP, they're given an email address based on the ISP's domain name with no explanation as to why using it is a terrible idea, and that they won't find out until it's too late to undo the mistake.

    This has gone on for decades because it's an effective form of customer lock-in. Changing to different ISP or a different email address requires informing everyone you know or do business with. Moving email messages to another service provider is also a chore. Both tasks are so painful that customers remain with an ISP simply to avoid having to address the problems.

    It's easy and generally quite inexpensive to register a domain name with an email address you'll never have to change, no matter who provides your Internet service or email service. If one ISP is truthful about domain names and helps you register one for yourself, your family, or your business, and another is disingenuous about it, which would you sign up with?
     
  12. treetops

    treetops TS Evangelist Posts: 1,953   +162

    The internet is not a basic necessity.
     
  13. JohnMoser

    JohnMoser TS Rookie

    "Belie" should be betray.
     
  14. Reachable

    Reachable TS Enthusiast Posts: 55   +8

    The telephone is not a basic necessity either. Except that it is. At first only a small percentage of people had phones, but then more and more human interaction took place over the phone, until it got to the point where somebody without one was cut off. More and more human interaction, more and more commerce, more and more everything, really, is moving to the Internet, and somebody without it in their home is at a disadvantage. Those who want an equitable society advocate for having good quality Internet access by all.
     
  15. ScubaRhys

    ScubaRhys TS Enthusiast Posts: 62   +16

    Gas and/or electric is viewed as a necessity because people can die if the supply is cut off. A phone line however is not the same, unless you require a telephone line as a lifeline for a pendant alarm etc.

    As for commerce, most consumer grade broadband explicitly states in the terms and conditions that it is not a commercial grade product and consumers should not use it for business purposes. Certainly after seeing how frequently the average home connection can drop in a day I certainly wouldn't want to base my income on it.
     
  16. Reachable

    Reachable TS Enthusiast Posts: 55   +8

    Water, and more recently, electricity, are vital necessities. (Thankfully [to my knowledge] there aren't any private companies in the U.S. in the water utility business.) Electricity was soon seen as being too necessary to allow the unmitigated claws of capitalism to deny and exploit everyone, so electric companies became regulated monopolies, whose prices and practices were determined by regulatory agencies. But it's not just vital necessities that are necessities. Telephony was viewed the same way, and until the '80s there was a single regulated monopoly phone company in the U.S., whose prices for local service were kept in check. AT&T has long since been cleaved, but regulation remains, and for people who are qualified there is a "Lifeline" discount on their phone service.

    When I was a young adult (an increasingly long time ago) there were periods when I didn't have a phone. I could still get in touch with people by going to pay phones which were never too far away. Now the pay phones are almost completely gone, and without a land line or a cell phone you're pretty much on an island. The Internet is rapidly becoming the same way, and it's time for oversight of the ISPs, who often have unregulated monopolies in their service areas and who have been known to neglect new technology upgrades that would give better access to all simply because they have no motivation to do so.
     
  17. ScubaRhys

    ScubaRhys TS Enthusiast Posts: 62   +16

    I dont actually agree with you. I agree that most people need a phone but I don't think that most people need to have a landline. Perhaps in areas with no mobile reception but it's a lot easier to provide communications with a £10 mobile phone instead of running a hard line to that individual. Its actually not that unusual, service providers who sell broadband without the phone line (currently only virgin) are having a lot of success. Most people only use their landline to carry a broaband signal. I haven't plugged a handset into my wall socket for years.

    There are only a very small handful of cases of people who rely on a landline and that number is getting smaller as more and more medical equipment interfaces over IP as oppose to over an analogue phone line. I think there is more of a case to be made for Broadband to be defined as a necessity however it's hard to convince anyone that they require Broadband to live.
     
  18. treetops

    treetops TS Evangelist Posts: 1,953   +162

    people use their phone to call for emergency help, 911

    water to drink...

    electricity for heat so they do not freeze to death....

    food to well you guessed it to eat so they don't die

    All these items have one thing in common preventing death. The internet does not.
     
  19. Reachable

    Reachable TS Enthusiast Posts: 55   +8

    Schooling is not a vital necessity. You can grow up without having attended school and still survive. But what a disadvantage you would be at in the developed world! Society has made sure that everyone has access to education. The Internet is becoming the same way. Those who have access to it are the "haves", and those who don't are the "have nots". It's referred to as the Digital Divide, and it worries people who realize that access to information is what separates the able from the helpless. If you want to be a part of the current every-man-for-himself Reagan/Thatcher Darwinistic attitude, that is your choice, but you won't be helping to see the end of societal problems that affect you as much as anyone.
     
  20. ScubaRhys

    ScubaRhys TS Enthusiast Posts: 62   +16

    You don't need a landline to dial the emergency services.

    The only cases where people can claim that they rely on telephone lines for survival are for medical reasons, when an outpatient has equipment hooked up to the phone line. In these cases customers are managed to ensure their service never drops, even when changing providers. At least that's our company policy but I would dare say that it's probably better than most other providers.

    I work in phone and broadband provision and I make decisions about whether we can or should provide to vulnerable people all the time. Customers often request that we speed up the time it takes to provide a service to them because they are vulnerable and claim they rely on the phone line - something we can only do if we delay the broadband provision to their property but when customers find that out they usually turn out to not rely on their telephone line as it's the broadband that they are really after! We have to be careful as customers that do actually require a phone line cost us considerably more than we will ever make off them but literally almost every customer will claim they require the service for one reason or another.
     
  21. Techstar

    Techstar TS Member Posts: 88   +16

    I am very happy with mine. I just switched to a new service and get gigabit net for under $10.00 a month. That seems reasonable to me.
     
  22. Techstar

    Techstar TS Member Posts: 88   +16

    There is a "connect to compete" service offered for those that are receiving assistance and have school aged children which allows access for next to nothing. They also have computers you can get through the organization as well. It's not high end gaming gear, but it will get the kids on the net for school work and research.
     

Similar Topics

Add New Comment

You need to be a member to leave a comment. Join thousands of tech enthusiasts and participate.
TechSpot Account You may also...