Jean Pierre Blais, Chairman of the CRTC, asked the essential question of the hearing to the representatives of the Open Media Coalition on Monday December 1st. Why is service-based competition the way to go? he asked. I have been waiting for this question because it draws attention to the issue: where does innovation come from?
To explain, the Open Media Coalition seemed to be saying that facilities-based competition was not really the relevant zone of competition, and that it lay in services: the uses to which people would put the network or networks at their disposal. In the computer world we call these apps, applications, and it is they, not the networks, that have revolutionized everything.
To answer it, we need only look at your mobile phone/camera/geo-positioning/email device. We do not yet have a word for it: “phone” is too limited.
Look at the apps and look at the device. Neither were made devised or thought of by carriers.
Innovation does not come from carriers. Innovation comes to you through carriers from other economic actors.
Innovation comes from device makers and from applications inventors. Nothing in the modern world has been invented by carriers. They take equipment from Alcatel-Lucent, or Huahwei, they apply open standards like the TCP/IP protocol suite, and they run precisely engineered systems to provide dial-tone or IP connection, for which they are amply rewarded. Do not look to the carriers for innovation. It was not invented there.
As for applications, carriers neither create them nor do they bring them to the market.
Consider an app that I have on my device which shows the positions of stars and planets. It determines my latitude and longitude, courtesy of global positioning, which is a satellite technology. This data is transmitted to my device.
It then shows the stars and planets above and below the horizon. Point the screen through the earth and it will show the stars and planets appearing on the other side of our planet.
The whole is a combination of possibilities and technologies, including carrier technology. I do not wish to denigrate its value. But of the whole value to me of the star guide, transmission to and from my device is only a small part. Most important, the carrier did not invent the app. The carrier did not invent the device.
The issue in the essential services hearing is not about tubes into the house, whether physical or notional. Bandwidth can come on as many or as few tubes as are economically and physically feasible.
It is not about the appropriate number of competitors in the local market (ISPs with access). There is no such number. It is a central planner’s question.
It is about the ultimate effect of all physical and economic arrangements on the customer’s pocketbook and experience. In that experience the carrier is not the innovator.
The Open Media Coalition is one of the very players in the hearing talking this language. We never had magazines called Dial Tone Monthly, nor will we have popular magazines devoted to the Internet Protocol, or clean water supply, but we will continue to be interested in applications, and the devices on which they are housed, and the prices we pay for them.
Forgive me, readers, for my excessively simple expression of it, but it is the apps, stupid.