convergence revisited

gonna be another long one. buckle up... what with '05 drawing to an end, figured i'd do a final mind-dump on this topic.

as said before, there're just too many definitions for convergence. to some it means intelligent swiss-army-knife-like all-purpose devices or, conversely, featherweight, ultra-thin-client browser-like devices that rely on server- or network-based intelligence. to others it applies more simply to the concept of ip-based networks and communications. to yet others, it speaks to the broader integration of the telecommunications, information technology and content industries. truth be told, it means all of these things and more...

but for me, i guess first and foremost, it comes down to "access" evolving into a utility business, a variation of sorts on the ip-based networks theme. a lot of the rest of it cascades down from there.

setting the stage... we all pay a bunch of recurring utility charges on a monthly basis. electric bill, gas bill, water bill, telephone bill, wireless bill, cable/satellite bill (tv/content), broadband bill (internet access via cable, dsl, fiber, satellite, whatever), etc. and...there probably aren't too many of us that have any special brand relationship with the electric co., the water co. or the gas co. (they're utilities after all. just pipes into the house. odds are we didn't even have a choice in who might provide such services). and, the majority of us probably aren't terribly focused on our kilowatt, gallon or cubic foot usage since we have a general idea of what our utility costs should be on a monthly basis and, barring significant deviations from our expectations, we just pay up when the bill comes. oh, and we never have to worry about our water company confusing us with offers to start piping gas into the house.

but when it comes to those other monthly bills - telephone, wireless, content and broadband - we do have choices, we do have brand affinities, we do (in some cases) carefully monitor usage, and we do, increasingly, have one or another supplier offering us services that we already receive from a third party and/or marketing entirely new offerings, e.g. internet services and applications. wouldn't it be simpler if we could just pay an "access" bill to an access provider the way we manage our other utilities and then be free to attach to the pipe whatever device we might prefer in order to benefit from whatever service we might value? after all, in the ip-based network world, access is just another set of pipes into our lives. wouldn't it seem silly to pay one electric bill for your lamps, another for the kitchen appliances and a third for your audio-visual gear?

good news is, with a little help from an evolving regulatory environment, we're increasingly seeing bundled access offerings that do indeed lump together fixed telephone, wireless, broadband and cable/satellite, in effect allowing for that unified access bill.

notwithstanding that, however, access-as-utility isn't perceived as terribly good news by those in the access business who reject the "value" business model of a utility for the promise of the now-almost-mythical-but-really-only-five-years-gone internet-boom-era "growth" business model. but hey, shit happens, right? gotta go with the flow, right? you have a long term - not just short term - obligation to your investors, right? which means the race is on for today's access players to embrace the utility model, deliver a high quality, reliable bit pipe service and cement a nice value business for years to come, right?

nope. 'course not. easier to just muck it all up, try to block and/or replace our preferred services with acesss-provider branded alternatives. so, we get telecoms companies objecting to cable co.s offering voice (voip) services. cable co.s in turn objecting to or blocking virtual providers from offering their own internet voice packages, wireless operators erecting retro-styled walled gardens, blocking third party services and mandating a stingy selection of devices when the existing pool is in fact much deeper. and, again, we get any and all of the above investing in and force-feeding us ill-conceived or sub-par content and service when what we really want are the perfectly good (better) alternatives available from established content and services leaders with which we may already have affinity relationships.

odds are the bitpipes will keep scrambling to drag this out as long as they can, and we can't begrudge them trying to build new businesses (i'm sure some will succeed at least in some measure), but not at the expense of alternatives. see, the thing is, like it or not, access is already a utility, it's just the business models that have yet to catch up. beyond the fact that the debate over a common (carrier) regulatory environment is already underway (which, if done right, should ultimately undermine any advantages that one or another access mode may enjoy over another and, more importantly, knock down the walls the access providers are building to preclude competitive attachments to and offerings over the pipes - check out the net neutrality debate in the Congress), the reality is that over the last couple of years value has been steadily shifting from the pipes to the content and services flowing through them, and, to some lesser extent, devices.

notably, there's a potential threat to the latter once access goes utility and the device business starts to resemble a traditional CPE and/or commodity model. after all, how many people really care who made their fixed-line phone or, for that matter, their PC? often as not, such decisions are made based on cost (although a reputation for quality and design will carry a hardware player a long, long way). and, the jury's still out re: the software/operating system value proposition. what's needed are open, non-proprietary, interoperable platforms (true plug-and-play ala the electricity grid) which may not be entirely consistent with the traditional business model of your average software giant (can "one" be averaged?).

so what's the end game? from a consumer perspective, we get a suite of terminals both fixed and mobile (tv's, handhelds, pc's - some of which we own, some of which are "common") that rely on open, interoperable software/middleware and that "attach" to one or another or a suite of bundled broadband pipes (e.g. cellular, wifi, wimax, uwb, dvb-c/t/h, dsl, fiber, cable, satellite) offered as a utility service (all-you-can-eat or metered or in some cases "free") by individual access providers, aggregators or virtual operators, and through which we'll be able to tap into services (including good old-fashioned "voice") or content offered, again, by independent venders with which we may have brand affinity or by content/service aggregators who may or may not be aligned with the previously mentioned access aggregators...

...ok, so as ugly as that sounds, the good news is that for all practical purposes it's transparent to those of us on the using end.... what it really comes down to is being able to use the device of your choice to connect to friends, read, browse or watch content and access the services you value from virtually anywhere at any time. and yeah, you'll have a monthly bill to pay - same as you do to cover the costs associated with all of those electric appliances you have plugged in all over your house.

phew. a bit long-winded, i know...