Robert Cringely is a fairly well known columnist. In a May 2004 essay, Cringely argued that it is cheaper than you think to replace land-line telephone services. He refers to the new technology as `disruptive'.
Clearly, one way for susceptible companies to defend themselves is to stop progress by influencing governments. But if progress is permitted, users can benefit.
Cringely is mostly technical, but parts of his column speak towards money:
There is an obvious business opportunity here, ... If I was running a [Voice over IP, VoIP] company, I'd find a way to sell my service through all these new Wireless ISPs. The typical neighborhood WISP [Wireless Internet Service Provider] doesn't really want to DO anything beyond keeping the router plugged-in and the bills paid, so I as a VoIP vendor would offer a bundled phone-Internet service ...
In the next part of his essay, Cringely specifies set up and running costs which I think are low. Moreover, every `micro-franchisee' should be concerned with depreciation, operating costs, and so on. But even with overly optimistic costs, a franchisee's initial rate of return is high albeit small in size. Moreover the franchisee's investment is low. The micro-franchisee goes into the business to supplement his living, not to make a living.
I [meaning the solid ISP/VoIP company] handle the phone [and Internet] part, do all the billing and split the gross sales with the WISP based the traffic on his router or routers.
In other words, it is easy for the `WISP'.
As for `gross sales', I have not figured out what Cringely means. Perhaps he thinks in terms of sharing VoIP revenue — he is mainly focusing on traditional VoIP; I am mainly focusing on high speed Internet access.
Perhaps Cringely thinks of the bandwidth as gratis, but that customers who want traditional VoIP pay for it. This business model succeeds only so long as VoIP remains a revenue generator. That may not be for long — maybe no more than several years. However, everything needed for this kind of operation already exists and is inexpensive so it is a good short term idea.
Over the long run, I think it makes more sense for `micro-franchisees' to resell bandwidth, and have the ISP keep track of which node a roamer uses, whether within the area covered by an ISP or outside. This way revenue can be spread fairly.
This revenue sharing method is similar to the way interconnecting railroads learned to handle freight cars in the 19th century, except that nowadays computers track movement, not clerks. The software for this is more or less straightforward. It may already exist. The big question is governance: will you be permitted to pay a competitive amount for a high speed Internet connection anywhere you go?
Cringely goes on to say,
A well-funded VoIP company like Vonage could today start WISP-based deployment one city at a time. .... Since each node costs the [ISP/VoIP provider] exactly nothing, the problem of flaky franchisees is eliminated by over-building ... conscientious franchisees make more money ...
Voice over IP companies like Vonage offer telephones that you plug into the Internet rather than tnto a regular telephone company line. You pay Vonage a monthly fee and can dial any telephone, regular or Internet.
The large, existing communications providers could enter the business, like Verizon, a big telephone company, or Adelphia, a big cable company. On the one hand, their efforts would cannibalize on their existing operations; on the other hand, they would start doing business in a new way that may well replace their current business models.
If Clayton M. Christensen and Michael E. Raynor are right 1, such existing providers will have to set up new divisions whose managers are physically separate from current managers. Otherwise, the managers' efforts will be unintentionally sabotaged by company procedures that have been profitable in the past.
Organizationally, it may well be easier for smaller Internet Service Providers or Voice over IP companies to adapt.
In any event, I have used my Webcam, built-in microphone, speaker, and freely available software to talk with and see my brother-in-law over a high speed Local Area Network. I did this when visiting my sister. (I have never run video successfully over my slow, telephone dial up, although I wonder whether updated software at the other end would make a difference.)
At least one company provides a service, at no charge, that enables you to call other people on the Internet. They provide this service as a way to inspire you to hire them to connect you to regular telephones. When you call other people on the Internet, you can use video. When you call other people on a regular telephone, you can use only voice.
With my equipment and software, video and voice came over the LAN after a 1/4 second or more delay; I presume the same goes for a voice-only connection, but maybe not. This means that this kind of connection is not as good as a regular telephone. It is a classic `disruptive technology': lower quality, lower price ...
The point for me is that if I had a high speed Internet connection, I could communicate `well enough' with both video and sound to anyone else with a high speed connection, anywhere in the world, at no extra incremental cost to me.
If my neighbor ran a `micro-franchise', I could pay him an amount that corresponds to the cost of my second telephone line — or maybe less — for a faster Internet connection.
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