Item the First: Amazon Kindle complete with Sprint EV-DO

The week of Thanksgiving Amazon entered the tumultuous space of e-book readers with the Kindle.  A lot has been written about the status of e-books in general and the utility of the Kindle in specific.  Some have caught on to what I think is one of the most revolutionary elements of the service: bundled Sprint high-speed EV-DO wireless data service.

The real revolution here is the wireless service bundled with another device and service and sold as an element completely independent from traditional mobile telephone or data services.  Kindle points us to a day when standard devices will have on-board mobile data connectivity as a bundled service element.  You won’t need to migrate your phone carrier from AT&T to T-Mobile in order to take advantage of the discrete connectivity provided by some new gadget or doo-dad.  This is an example of the new business model.

Item the Second: Verizon Wireless says they will open their network to any device

In a completely unexpected move, Verizon Wireless announced that they will open up access to their wireless network to any device that is approved through a technical review process to ensure the integrity of the network.  Once again the whole tech world asked “WTF?” all at once, but this time with a great sense of optimism.  While a number of details need to be hammered out, this move does represent a truly game-changing development.  Obviously the wireless industry is going to be turned upside-down.  Other industries and business models are going to be revolutionized as wireless connectivity becomes ubiquitous (two industries that jump immediately to mind are consumer electronics and automotive).

Two major details that need to be hammered out are what the vetting process will look like and what pricing models will be made available.  If the barriers to technical certification are set too high or take too long innovation will be greatly slowed.  I fully expect other carriers to announce plans to open their own networks as well, and getting the best and most demanded gadgets on your network is going to be a dimension of competition among the wireless carriers.  

The second issue to be addressed is pricing.  Already AT&T have tried to make the case that their network is already open because any device that uses a SIM can be connected to their network.  While there is an element of truth to this (one reason I’ve always preferred GSM to CDMA is the flexibility offered by a SIM card), the SIM card model is still based on pricing built around the concept of the mobile phone service.  

The real revolution in the pricing of open wireless wide-area connectivity is going to be a move away from the traditional mobile phone pricing models.  This is important because the truly game-changing element of open networks is creating opportunities for machine-to-machine connectivity.  One the wireless network of the future a large percentage of the traffic will be computers talking to one another.  Pricing models will need to be developed, either directly or indirectly, that support a mix of constant and variable connectivity requirements for a wide array of devices.  The per-bit charges must be sufficiently low for device manufacturers and value-added services to be priced at levels that will deliver value for end customers.

We are on the verge of a very exciting time in the wireless space.  Other carriers are going to follow VzW’s lead, and if Google wins any piece of the airwaves in the upcoming 700 MHz spectrum auction we can expect them to be a very aggressive and innovative competitor in this space.  Within a couple of years we will come to take ubiquitous connectivity of certain devices for granted.  Some product/service combinations we can easily foresee:

* Constant diagnostic data from cars and other durable goods
* Improved energy efficiency of home heating and cooling
* Real-time remote home security
* Internet audio and video in your car or through mobile devices
* Location-based services, such as luggage that is never lost

These are just some of the concepts off the top of my head.  I have no doubt that I am only scratching the surface and not even tapping into the deep veins of opportunities that some very imaginative people will develop.

“We have to make sure that they [application providers] don’t sit on our network and chew up bandwidth,” Seidenberg said. “We need to pay for the pipe.”

These are the words of Verizon CEO Ivan Seidenberg at CES according to this article from TechWeb.

The article continues…

“We would not do that [block specific applications], and it shouldn’t be done,” said [Executive Vice President for Public Affairs] Tauke, who said that Verizon is actually in favor of codifying so-called “network neutrality” rules, as long as there are provisions for parallel private networks, like Verizon’s nascent fiber-based television services. At CES, Verizon announced plans for an online gaming network that would also likely be segmented away from the “open” Internet, so that Verizon could better control the performance of the network.

The paralell network mentioned by Tauke could reflect a similar concept to how cable companies today seperate out the delivery of television content and broadband Internet. The benefit of this is that it would ensure the throughput of both services. Cable television is not delivered over the same layer 2 network that delivers broadband cable Internet, and RBOCs offering television services should certainly be free to deliver their television service in a similar manner.

I’m still a little concerned about the comments that application providers “chewing up bandwidth.” My major problem with comments like this is that they continue to ignore the fact that each customer pays for their broadband service. Likewise application providers pay for their connections to the Internet. In each instance, each customer can only be expected to get what they pay for, an amount which is hopefully communicated upfront in terms of a bandiwdth capacity or amount of traffic I can download. If I purchase a certain broadband capacity from my cable company or RBOC I should be able to fill up my alloted capacity with whatever it is that I want. Presumably this also gives me a claim to some (very small) percentage of the total capacity of the broadband provider’s backbone network. If it all comes from Google, Yahoo, or AOL then who is to complain about that? If my net usage causes a problem for other subscribers then it is up to the broadband provider to throttle back my capacity for all applications and services, not to do so discriminately based on who has paid a premium. Of course all of this throttling should be done in a transparent manner, as well.

We should all probably expect to see more of this as FTTP buildouts progress. Ugly, ugly trenches dug along the front of each of our yards and residential streets torn assunder. Ah well… such is the price to pay for wicked fast broadband.

In a Wall Street Journal on-line article today on all the deal-making there’s a throw-away comment that yesterday AT&T announced that they’ll walk away from their wireless resale deal with Sprint. A quick look around the web doesn’t give me any information that confirms that, but there you go. Should we suspect AT&T will start over again with a Cingular resale deal? I still don’t think this is a very good idea for AT&T.

But it looks like the service will have a downlink of 15 Mbps and an uplink of 2 Mbps, at least according to that headline on the FIOS page. The price is $49.95 a month. Perhaps a bit pricier that I want to spend on broadband, but damn if that’s not a big connection, and I’ve read some reports that lead me to believe that FTTH is uncontended, so all of that capacity is yours. One would have to actively look for content to use it all up.