I wanted to apologize for the radio silence, a combination of too much work and a planned blog/website rethink leads to blogging paralysis.
So just to make up for it, here a hilarious video that should speak to Telecom people, probably the only ones who can really get it…
I’ve long held the idea that a short video explaining the concept of net neutrality to joe and jane average should be feasible. This isn’t a short video, but it’s the next big thing. It features a (fake) researcher doing some work for the big ISPs to establish the case for net discrimination. In the process of doing so, he interviews just about everyone who defends net neutrality to understand why. It’s fun, and it’s powerful. Take the 30mn to watch it!
I’ll be honest, I’d never heard of Bayonette until I read this article in ZDNet. I tend to be cautious around such announcements because while it’s relatively easy to get coverage in the tech press, it’s much harder to actually deploy a network at scale and hook customers to it.
So, Bayonette is taking a leaf off of Google’s Fiber book and deploying Gigabit and free broadband. Could work, although when you don’t have the Google brand backing you, I have some doubts about the effectiveness of this. In France where a number of social houses have negociated “free basic broadband” as part of their FTTH deals, the story goes that customers who subscribe to the free service never upgrade. I guess it’s just the wrong kind of demographic to expect upsell from.
There are a few things that raised my eyebrows in this piece though:
- Bayonette’s basic enterprise service is also a symmetric 1Gbps connection, but priced at 2,490 NOK per month (about €309): Good luck explaining to business customers that the service they pay 5 times as much for isn’t the same service consumers pay less for, honest gov’. That’s a recipe for cannibalization and value destruction if ever there was one.
- The company employs existing dark fibre, and runs its own-brand DWDM (dense wave division multiplexing) equipment on top of the fibre: OK, so they’re not deploying fibre (fair enough, although I’m curious how much open dark fibre actually exists in Norway for access services), but they developed in-house DWDM. Either these guys have cracked the hardest nut to crack ever (DWDM ONTs cost a bomb which is why no one has seriously deployed them in the access market to date) or there’s something I don’t get here.
My gut feeling is these guys are really small, probably sub- 20k customers today (which is kind of our threshold at Diffraction Analysis for including them in the Fiber Database) but I guess I’m intrigued enough that I want to know more. If anyone from Bayonette is reading this, or if anyone reading this can put me in touch with someone from Bayonette, I’d be keen!
A few months ago, when the coalition’s plans for the Australian NBN were announced, I wrote the following in an article on Telecom TV:
The core of Labor’s NBN plan though, which is the structural separation of networks and the equal access to a regulated wholesale platform, is retained [by the Coalition]. By staying on board with that the Coalition offers a plan that is within the continuity of what has been done.
A couple of announcements today however got me to reconsider that:
- first we learned that Telstra is trialing VDSL Vectoring with the avowed aim of bidding for the NBN build-out. In any other market, the idea that the service arm of the structurally separated incumbent would bid to build the network of the infrastructure arm would be outrageous to say the least but not in Australia, it seems. More worrying are Turnbull’s statements prior to the election on the issue, according to AFR: “Mr Turnbull said in the weeks leading up to the election it was “bizarre” Telstra had been left out of the construction project and it would be good to get the company more involved in the Coalition’s roll-out.” That sure sounds like a fair and equal assessment of sub-contractors is the most likely scenario… not?
- second, we learned that the entire board of the NBN offered its resignation and that (according to news.com.au) “Mr Turnbull said after the election that former Telstra boss Ziggy Switkowski would be well qualified for the role of NBN Co chairman.“
So in summary, the minister favors Telstra to build the NBN and an ex-Telstra CEO to head the NBN. Which makes the NBN look suspsciously like Telstra.
I have to confess I hadn’t seen this coming, but sadly I now have to say that, conspiracy theories aside, it looks like structural separation is dead as a Dodo…
Photo Credits: Eva Rinaldi
- back when structural separation was being implemented, a review of regulated prices was put in the agenda by the government. The regulator, ComCom was supposed to perform this review in 2012 and a big focus was regulated copper access prices, which were supposed to shift from retail minus to cost plus.
- the government, aware that their was a potential risk in copper prices being examined in abstract, ie. without examining the fiber investment in parallel, passed an amendment that specified that network investment should be taken into account by ComCom. However, the wording of that amendment was vague and ComCom decided it could not interpret it, so decided to ignore it. The new cost-plus principle was to be applied from December 2014.
- ComCom conducted the cost-plus review based on international benchmarking. It benchmarked New Zealand against two other similar countries in the world (Denmark and Sweden) – and not having done any cost assessment as far as I’m aware – announced they would drastically reduce the wholesale access price to copper.
- Chorus announced that such a change in the regulatory context would put them in jeopardy and certainly make the economics of the fiber network deployment suffer.
- The Government announced it would bring forward the planned 2016 policy review and in its discussion document proposed overruling the regulator on the issue and started exploring ‘graceful’ solutions to extricate itself from the mess it had created.
This is roughly where things stand today. Last week the opposition and a coalition of private businesses including some of the operators have published an ‘independant’ study that describes the differential revenues between current copper rates and ComCom’s announced rates as a “tax” to fund an already profitable private business. It is of course turning into a political story, which means that sadly reason no longer comes into it.
Here are a number of things that spring to my mind about this sad state of affair, I should stress that I’m about as detached from New Zealand politics as one can be, so the following is really my views as an industry analyst and nothing else.
- first of all, having looked at the recent impact of regulatory uncertainty in Australia and the jeopardy that Australia’s NBN plan currently is in, I find it deeply ironic that New Zealand would consider radically undoing what it started to do by destroying the delicate pricing balance that structured the UFB deal. Incidentally, this is not just an issue for Chorus: other LFCs will suffer too if the price differential between copper and fiber becomes such that Retail Service Providers simply have no incentive to consider switching customers to fiber.
- second, it should be stressed, again and again, that the government got an amazingly good deal out of Chorus and other LFCs, probably too good. At NZ$1.5bn, the amounts invested come out at a little more than 500€ per household for a 75% coverage. The following graph is one I use in NBN related conferences to show the amount per household and the scope of intervention in parallel. Obviously, the more of the territory you want to cover, the more expensive it gets as urban density decreases. As it stands, New Zealand is getting 75% of households covered for the same cost per household that gets Malaysia 20%. And building costs in Malaysia are somewhat lower than in New Zealand. And that’s not even mentioning that the NZ government isn’t subsidizing the buildout, it’s investing in it, with an expectation of return.
- third and last, this is not a case – as it might have been when EU regulation was looking into copper price adjustments – of Chorus using the copper revenues to pay dividends instead of investing in FTTH: the government has set hard targets with stiff penalties for the infrastructure to be deployed, and Chorus has met these targets (as far as I know). In fact, their deployment costs have turned out to be higher than what they had originally modelled and still they’re deploying. Put simply, the current level of copper revenues ensures that fiber deployment is possible. Take it away or reduce it dramatically and either the UFB doesn’t happen or Chorus goes belly up or the Government has to commit a lot more taxpayer money at no return.
My interpretation from far away, is that really what this is is a political coup by the opposition. Don’t get me wrong, I find the government’s behaviour here to have been really lame, to understate things a bit. They’ve opened themselves to the attacks now coming. I do find it strange though that the party that initiated the UFB is now willing to throw it under the train to score some political points…
I’m often left wondering how we ever got roads, highways, railroads and bridges built. These are amounts of public investment that dwarf what it costs to deploy a network infrastructure such as the UFB and yet they never seem to have been political liabilities…
Anyway, the real question now is: is there a way out that doesn’t make government look even more authoritarian and messy than it already does without sacrificing the UFB?
I think there is, but it requires adressing the elephant in the room: copper switchoff.
There are two issues to address here really: one is that without a decent level of copper revenues, Chorus can no longer finance the UFB deployment. The other is that with an excessive wholesale price difference between copper and fiber, RSPs will never push customers towards fiber. Then everybody loses: the government makes a bad investment, Chorus goes belly up, and New Zealand doesn’t reap any macro-economic benefits from Ultra-Fast Broadband.
By introducing a copper switchoff mechanism in fibered areas, even if copper prices are lowered, at least one of these issues is addressed: RSPs investing in unbundling will know that that investment has a limited lifetime, and even if the copper prices were lower, they will have to arbitrate between investing in a soon to be switched off cheap platform or migrate their customers to a more expensive future-proof one.
This wouldn’t solve all of Chorus’ issues, but it would create a radical long-term improvement of cost-structure as the company would no longer have to manage two networks in parallel (and the copper network is the costlier one to maintain in the first place). Chorus would still have a big cash-flow issue to get to that point and keep investing in Fiber, but I suspect that would be manageable, either through government or government-backed loans.
I’m not arrogant enough to believe that my voice will have any weight in this matter, and I have no doubt I’m simplifying things to excess, but I do think this could offer an elegant solution that, furthermore, would be effective from a nation-building point of view: it wouldn’t just be a matter of knowing that 75% of the country would be eligible for fiber in 2020 but knowing that 75% of the nation would be on fiber by 2025. That kind of certainty could allow massive local and national government rethink of the services they offer for the general good, not to mention the opportunities it would open up for the private sector.
Disclaimer: I have recently done some paid work for Chorus in New Zealand. However, I have not been asked by anyone to write the above, and the views expressed are clearly my own (I’m not sure Chorus would be too happy with the solution I propose anyway…)
By the time you read this I will be somewhere between Dubaï and Auckland on my way to New Zealand. Ironically the very week of the Australian elections, the week which will decide – amongst other things – the fate of the Australian National Broadband Network I will be as close to Australia as I’ve been in years looking at another NBN and its impact.
It’s even more ironic that the New Zealand fiber NBN, a direct consequence of Australia’s plans for fiber to the premise will likely (if the Australian polls are to be trusted) outlive it’s initiator as the Coalition shifts the ambitious fiber NBN to a run-of-the-mill copper NBN.
As I’ve written elsewhere, it’s a good thing that the Coalition had the foresight not to scrap the heart of the NBN project, ie. the structural separation. I’m not sure they could have done so, but at least they seem not to want to try. If Kevin Rudd gets ousted this week, Australia will get (according to plan) the same broadband every run-of-the-mill developed market is hoping to get by 2020. TNW has an interesting though provocative editorial on that entitled 25Mbps broadband speed by 2019: the stupidest policy ever?
In a sense, I’m not that concerned about where this goes. I have been warning people for a couple of years now that Australia should not be used as a poster child for NBNs or broadband policy. The lack of deployment performance of NBNCo – whatever the reasons – made it painfully obvious to me as an observer of all things broadband internationally that its survival was uncertain, at least in its current state. Australians, like citizens in any other democracy in the world will be voting in their next government for a whole lot of reasons other than the broadband policy each party espouses, and if the NBN in its current state is thrown out with the bathwater at least they will have made that choice knowingly.
However, this will have international consequences in the broadband market and I think it’s would be interesting to think about that for a minute. People who are trying to convince governments and regulators that National Broadband Networks are not the way to go will find fodder there. Similarly, people – and especially incumbent operators – who are trying to convince themselves that it’s better to aim for short-term decent coverage than for long-term secure coverage will also gain weight. There is a non-negligeable chance that the Australian NBN will become a sort of horror story bandied at conferences to justify lack of ambition or status quo policies.
People who like me believe that it makes sense both financially for the private players concerned and economically for the nations concerned to think about a framework that brings fiber at least within a few meters of every home in the country in a relatively short timeframe should prepare for that backlash should the Coalition win in Australia. And perhaps even if it doesn’t: the poor performance of NBNCo will have to be understood and analysed so that the impacts of bad policy decisions if they exist can be separated from the impact of bad implementation.
A couple of years back Diffraction Analysis published a report entitled The Rise and Fall of Dong Energy’s Fibernett. The market loves success stories and tends to focus on those to extremes. I believe it is just as important if not more important to be aware and understand failures in FTTx. There’s so much more to learn from them. So here’s one consequence for me personally: in the next few months, no matter in which direction Australia goes with its NBN, I need to document and analyse the reasons for the failure so far. These mistakes are the ones that other players need to ensure they avoid!
Photo: Australia 2009 (CC) Stoofstraat
To say that everything surrounding the Australian NBN is a political can of worms would be an understatement. The general elections in a few weeks, with Labor trailing in the polls, may spell if not the doom at least a radical trimming of NBN’s ambitions. In this context, I stumbled upon this interesting presentation by Simon Hackett entitled Building a Fiber NBN on a Copper Budget. I don’t know who Simon Hackett is, and if he is politically motivated (it seems like everybody is, looking from the outside), and more importantly perhaps, I haven’t done the financial analysis that would allow to assess whether his opening statement is correct.
What’s more interesting to me in this context is that he suggests some interesting ways in which a wholesaler can lower his own investment costs. In a nutshell, he offers three paths (not competing, complementary):
- Forget about QoS: basically, he argues that bandwidth trumps QoS, and since fiber offers virtually unlimited bandwidth, the complexities and costs of QoS management and more importantly QoS wholesaling should be avoided. I don’t disagree on principle with this one, although the confines of QoS should probably be better defined, but I’m assuming he means “different grades of traffic management”.
- Drop PSTN (and multiple VLAN capability): Simon’s point is that PSTN is dying and shouldn’t be carried over to the NBN. I agree with him 100% on that one although I’m pretty sure the regulator imposed PSTN continuation to the NBN anyway. But honestly, any fiber deployment done today should have two aspects embedded into its DNA: eliminate copper (long term) and eliminate legacy systems. Not sure I’m quite as bullish on eliminating the ability to deliver separate VLANs. Some services, especially around home security, healthcare, etc. are going to require a fully separated path for security reasons, and until that can be done over WDM, VLANs seem to me to be the only way to go.
- Let the ISPs pay for the ONT: that’s the most intriguing of Simon’s suggestions. Instead of imposing an ONT paid for by the NBN, he says, the set-up should assume that the ISPs will install the ONT since they will want to install some equipment inside the home anyway. On paper this looks very tempting and financially it could represent significant savings for sure, but I’m concerned this simply couldn’t work for a simple reason: first, unless the NBN forced a vendor onto the ISPs, which seems unlikely to be approved, I’d have serious misgivings about interoperability of the ONTs. This has been a known issue with GPON for a long time and while various vendors have spoken about furthering interoperability in the standards, letting the ISPs pick their ONT vendors would still be a huge leap of faith.
Still, these are some interesting ideas, and at least it’s good that they’re being asked. I’m assuming in saying that there is no political calculation behind them. In which I may very well be wrong.
Still, if Simon Hackett can convince Malcolm Trunbull that he can get a fiber network for the cost of a copper one the Coalition should be trumpeting that left, right and center!
Since the beginnings of fiberevolution, I have been blogging in response to various articles, other blog posts and informations found on the net that relate to the topics I cover.
There’s so many more of those than I can reasonably blog about however that it became something of a frustrating exercice.
In order to address this I’ve recently started trialling a service called ScoopIt which I think answers that particular issue I’ve had.
I have a boards over at ScoopIt called Connected World, which you can subscribe to through RSS or simply view when you want to. It aggregates articles I’ve found interesting with a few lines of comment at most from me.
I hope you find it interesting, please let me know if you do so!
Just a quick note to point out two recent articles on gigabit broadband.
- The first is in French and is entitled Vous Prendrez Bien un Gigabit? Its published on ZDNet France.
- The second is in English and is entitled Can I Offer You a Gigabit? It’s published on Technically Speaking.
Despite similarities in theme, the two are very different and address different facets of a same issue.
Plum Consulting has released a really excellent and concise paper on the impact of over-the-top services on the telco business model. It’s entitled (appropriately) Over-the-top – hindering or helping achieve European Digital Agenda goals? If you read me on a regular basis, you will find a lot of the arguments exposed there to be familiar. What I find interesting though is the way they’re framed.
Brian Williamson who wrote the paper notes something important, and that is that the rate of growth of internet traffic, both over fixed and mobile networks is slowing down considerably. The source for this information is Cisco’s own Visual Network Index, hardly a source that could be suspected of downplaying traffic growth. Indeed, there’s a note by Karl Bode on that same topic that’s a little more direct, shall we say. He called it So Much for that Exaflood, Huh? I wish Andrew Odlyzko was still compiling internet traffic growth data like he used to: even back in 2008-2009 he was pointing out that actual growth numbers were systematically lower than predicted growth numbers.
All this to say that the argument that telco lobbyists constantly use that traffic growth is killing them is nonsensical: traffic growth is now lower than the capacity growth enabled by equipment renewal!
Anyway, Plum Consulting’s piece is on the point and recommends three complimentary policy actions (and I quote):
- Promotion of the principle that consumers should have access to lawful applications and content of their choice.
- Limiting use of the term “internet access” to those access providers who offer full and non-discriminatory access to lawful internet based applications.
- Extending the concept of equivalence to internet applications in addition to network access and requiring equal treatment for over-the-top and vertically integrated services.
That last point goes above and beyond anything we have seen in policy circles ever on this topic, and I don’t dream of ever seeing it applied unless telcos start embracing OTT as a delivery mechanism for their own products and services (which some are doing, albeit quietly).
But even the first two bullets, which seem kind of straight-forward, I don’t believe will be implemented. As I wrote this morning in a ZDNet France article (in French) entitled Transparence n’est pas Neutralité (Transparency isn’t Neutrality), Neelie Kroes’s discourse shifted from protecting a neutral internet to demanding an internet where discrimination is transparent.
I’m not optimistic.
Photo Credits: CC Claremont Colleges Digital Library
(Apologies for non-French speakers but since this is an announcement for a French event in French, it didn’t seem to make much sense writing it in English.)
Le 24 Juin, le G9+, un Think Tank formé d’anciens élèves des Grandes Ecoles travaillant dans l’IT ou les Télécoms organise une table-ronde débat au titre provocateur:
J’y serais (a priori pas en tant qu’intervenant). Afin de mettre en avant certains des sujets qui y seront débattus, le G9+ m’a demandé de participer à une discussion vidéo avec Nicolas Martinez Dubost du G9+ et Régis Castagné d’Interoute France.Voici un court teaser de ce débat, qui est accessible en version longue sur le site du G9+ (il faut ouvrir un compte).
This is a little left field I guess in relation to the topics I normally cover here, but the subject of employee motivation is something I’ve been thinking about for a while, and so when I watched this TED Talk it resonated with me. I’ll let you watch it first and then I’ll comment.
The first thing that came to my mind after watching this was “I’m not surprised”‘. I didn’t know that social sciences invalidated the effectiveness of financial incentives for most modern work tasks. I also find it ironic that the hierarchical level in businesses where financial incentives become part of your package are exactly those at which the mix of tasks becomes negatively affected by such incentives. But I’m not surprised. It resonates with my experience.
About two thirds into the video, when Pink moves onto the “solution”, my cynical self went “yeah, right…” Then he talked about ROWE and I was intrigued again. A big part of the homeworking discussion (which is, in a way, related to this blog’s topic, phew!) revolves around measured increases in productivity that most traditional businesses simply do not want to believe.
So there’s hope. Not that I anticipate things to change overnight. I’ve been burned too many times by the inane mental constructs of HR and Management Gurus in large organisations to believe that a model, no matter how good on paper, can work accross the board. I’d be interested in seeing for example if there’s a breaking point for ROWE related to the size of the organisation or the nature of the business. Guess I’ll have to look into that.
This week another article was shared by a friend that relates to this in a sense. It’s called If you’re trying to change how your company works, you probably won’t. For years before I decided to launch Diffraction Analysis I’d be hoping for a job where I could throw myself without qualms into growing a business I believed in. I never could find one. And indeed, I discovered that changing things from the inside rarely if ever works. You even hope against hope, when you resign, that they’ll understand. They never do.
Or maybe it was me.
In any case, I tend to be cynical about the “science” of running organisations, and while Pink’s delivery is a little too over the top for me, what he says resonates with me in a way that few things in this field have before. If this starts spreading, moving back into regular employment might become appealing again, someday!
As most of you will probably know already, Telecom Italia announced last week that the board had approved a plan to separate the access network from the service business. Here is the press release.
This has been in the works for a long time, and it’s going to be interesting to look at how exactly it plays out: TI is betting – I suspect – that this can represent an influx of new cash to finance the network deployment plan (FTTC in major cities except for Milan’s FTTH). At the same time as this announcement, rumours as to the investment budget in the network have been surfacing as pointed by Telecom Paper.
The separation of course is framed as “equal access to all market players”, which is somewhat ironic, suggesting that access until now was not equal.
Still, as someone who is more and more convinced that we need to accelerate the shift towards structural separation, I see this as a positive first step. As highlighted in our report on the New Zealand FTTH Model, it’s very hard to structurally separate if you haven’t done the unraveling exercice that functional separation requires…
Photo Credit: Old Coliseum by Benoît Felten
I’ve been a fan of Jack Dee ever since I saw him on Television in the UK in the 90s (yeah, that takes me back)…
This is a more recent skit from his Live at the Appolo series, on mobile phones and interactive television.
It’s very funny. But like every piece of good humour, there’s enough reality behind it to make you think. Predictive calling ? I could see that happening. And wouldn’t it just be a nightmare…
I was having a nice lunch and involved discussion with a good friend who works with a major equipment vendor the other day, and the discussion, as if often does these days, steered towards vectoring and the impact thereof.
I was of the opinion that despite the evident potential of vectoring, I still felt there weren’t many, if any poster children for a truly successful VDSL 2 implementation. He answered that Belgacom was such a case, and I agree they are although it’s easy (perhaps too easy and misleading?) to see all the non-replicable aspects of Belgacom’s approach.
The discussion then moved on to Swisscom (another early adopter of VDSL who decided to deploy FTTH instead of vectoring) and one thing that my nameless interlocutor said has made me ponder since then: these two companies, he said, have internalised NGA to a degree that few if any others have.
What he meant, I believe, is that unlike many incumbents in Europe and North America, NGA for Belgacom and Swisscom is not a parallel stream to the main business. It’s not a toe in the water to see if it might work. It’s not a hobby: it’s the main business, and all the rest has become just a transition, even if it’s one that will have to stay for a long while.
The core issue with most of the incumbents I speak to is that even though they may have commited to broad deployment of NGA (whether FTTH or VDSL2 matters little, actually), the NGA business is a separate, and often siloed structure to the business, and this leads to a mindset that ignores or misses the impact of NGA on the core business, or even worse a minset that aims at minimizing that impact, often by mimizing the deployment or take-up.
This is nonsensical if you think of the business model implications of the most massive network investment undertaken in decades, but it’s a logical result of an organisation not internalising the fact that NGA, and the associated bandwidth abundance it promises changes everything. Every other business model in the company, every other product, every price plan, every process is one derived from scarcity. Throw scarcity out the window and you change the whole focus of the company.
Swisscom and Belgacom seem to have understood that. They are anticipating potential impacts on other business lines, they’re looking at the changes in their wholesale models, the relationships with online service providers, the impact on their sales channels, etc. They’re thinking ahead, putting NGA at the core instead of driving ahead with NGA on the next lane.
Other incumbents that understood that (I think) include Verizon and Jersey Telecom, but on the whole they are few and far between.
The importance of being earnest, as Oscar Wilde rightly stated.
As many of you savvy readers are probably aware by now, London based FTTB company Hyperoptic has secured a £50m funding from Quantum Strategic Partners, a structure owned by Soros Fund Management. The UK general and tech press are all talking about it: The Guardian, The Register, Think Broadband, etc.
This is great news for Hyperoptic. The company was initally funded solely by its founders Boris Ivanovic and Dana Tobak, but anyone with experience in FTTx payback knew that they had to find external cash sooner rather than later. This now gives them a much longer time horizon to develop on the network side and upsell on the services side.
It’s interesting to consider why they have secured the funding when other operations in Europe and even in the UK are still struggling to get funded. I suspect it’s down to three things:
- They didn’t wait for funding to get customers; by connecting buildings and customers in London, Hyperoptic demonstrated to potential funders the economics of their model, and that makes things a lot more reassuring for any funding outfit.
- From the start they targeted upmarket areas where unhappiness with BT and ability to pay combined to create a market opportunity. They also went for FTTB, which is the cheapest option to deliver speeds way faster than what FTTC or Cable can easily offer.
- They’re pragmatists. I’ve met with them only once (and spoken to a number of their people on various occasions) and these people aren’t visionaries. They’re not looking at what they do as a world changing revolution, more as catching up with what’s been done elsewhere. They’re cautious, but they know how to take decisions.
The exciting thing for those of us who have been lamenting the absence of funding for FTTx operations is that it means financiers get it, or at least some of them do. This is Soros though, and his views and choices carry significant weight. I don’t know if Quantum Strategic Partners is now looking for other similar projects to finance, but I suspect other funds will now be looking in this field with a different outlook. While Hyperoptic isn’t the first FTTx operation to be financed in this way, it is the first start-up in this field to do so as far as I’m aware, and that means a lot.
One interesting aspect of this is that Hyperoptic is purely private. It isn’t a PPP, it doesn’t rely on subsidies or public funding in any way. It might very well be that the signal this conveys doesn’t change much for municipalities and PPPs: public involvement is not always seen as a plus in the financial world (and that’s an understatement…)
Last week I had the opportunity to speak about Net Neutrality at two separate events organised for and around internet start-ups. The first was an informal gathering organised by the recently founded France Digitale, a structure devoted to carrying the voice of internet entrepreneurs to the French government (who seems to rarely understand the specifics of start-ups). The second was a broader and more formal event called Web2Day. It’s an annual gathering in Nantes, and even though I only really had half a day there, I loved every bit of it and will undoubtedly attend again.
Of particular interest to me was a panel on the collaborative economy, a euphemism for all those disruptive business models (from project financing to accomodation booking) that circumvent the established aggregation structures like banks and hotel chains to address the end-user directly. I’m fascinated by the potential of these initiatives. On the panel in particular were Kiss Kiss Bank Bank and AirBnB, two emblematic examples of such collaborative initiatives.
The potential for disruption of these initiatives is hard to assess. Of course, they themselves think they are changing the world, and maybe they are, but at the same time they’re careful to stress that by and large they are not displacing existing business models as much as complimenting them (for example AirBnB insisted that the places where they see the most supply and demand are places where there’s very little accomodation to be found anyway because these places are saturated with demand.) At first I thought that was naïve or disingeneous, but at the same time I can’t really figure out how these currently grassroots initiatives may grow in the future.
A point about the disintermediation that I found interesting was the element of trust. Kiss Kiss Bank Bank for example insisted on the fact that very few of the projects the platform finances result in crooks taking the money and bailing, simply because most of the financing comes from people who know the entrepreneur personally. The interpersonal trust is an additional layer of stability into the system.
All this connects with the work of two of my favourite people: Robin Chase and her various carsharing endeavours, and Doc Searls and his Vendor Relationship Management approach. In fact, the latter is why The Intention Economy: When Customers Take Charge is on my to read list. I’ll tell you about it once I’ve read it.
In particular, there’s one graph in there that blew my mind, I’m reproducing it here.
Source: Mobidia / Informa (2013)
This shows the proportion of mobile data traffic that is offloaded to private wifi networks (in blue) or public wifi networks (in light blue). Basically, only a quarter to a third of the data traffic consumed by mobile devices is actually delivered over mobile networks (except in Japan and India where it’s half).
Take that, “we’ll only need mobile networks in the future” posse…