Opinion: Mobile carriers ring up big money on customers' backs

25.07.2009

Network bandwidth issues. This is an issue more for carrier execs than Congress. There is an issue, especially with AT&T, of networks becoming overcrowded with too many users moving too much data. The solutions, so far, let everyone drown. I propose a better way: smart routing and packet prioritization. Carriers need to intelligently max out their networks; the cost of having a 100% utilized network vs. a 50% utilized network is minimal to the carrier -- but the benefit to the customer is huge.

Here's an option: Give the people who use the least amount of data a higher priority. Customers who want high priority will be miserly with their data usage, benefitting the entire network. The other option is sell priority plans (upsell marketing 101). People who want to watch movies on the Internet -- and can pay for it -- should have an option to move to the front of the line for a hefty price. And the carriers can use those hefty fees to keep adding wireless bandwidth. That should be their No. 1 priority.

Implementing this shouldn't be rocket science. There are some pretty talented engineers buried beneath all of those levels of marketing, middle management and sales. Packet logging and prioritization have been around for a while and putting together a system to manage user accounts should be straightforward. For users, build a nice Web interface to show you how much data you're using and where you stand in terms of priority.

In the long run, whether anyone likes it or not, here's what's going to happen -- regardless of Congress' involvement. It may take five years or it could happen in two. People are going to forgo the telecoms' "phone services" and "add-ons" altogether and start making calls using IP packets. If you've got a new iPod touch, Skype and a mobile 3G access point, why pay AT&T for iPhone service? The sound quality is better on Skype, to boot. (The carrier in the UK is way ahead of the curve on this one.)

There's a correlation here with what happened to Prodigy and Compuserve -- and to a lesser extent, AOL -- a decade ago. People simply want access to the Internet, and to the rich applications that use the Internet. The walled-garden approach with proprietary solutions didn't work then for them, and it won't work now for carriers. With a SIP VoIP service, I can use the same number on my phone, on my computer, at my Grandmother's house or over Wifi in an office in London -- all for a reasonable price. Meanwhile, Verizon and AT&T are bringing out more walled-off, doomed-to-fail services. While they're trying to sign up customers for their VCast and U-Verse video services, the plain, old Internet with Hulu offers so much more.