None of the flash benefits described by the article are impossible to replicate in HTML5/browser/javascript, and it's naive to assume that the new ecosystem wont continue to evolve over time just as flash has.
Yes you are correct, it is really just a difference in terminology though, we mean the same thing. If the service they are providing becomes effectively commoditized and they begin competing on price their profit margins will shrink dramatically, possibly even to a level where they will not be able to afford to perform dramatic network upgrades as frequently as they are now. Of course, if that were to happen it would probably only be after the networks provided sufficient bandwidth to satisfy pretty much everyone or a new superior technology had emerged which did not require the massive infrastructure and spectrum investments that the entrenched firms have already made to reach the consumers.
That's what they are afraid of. If their bits are commoditized, they wont make nearly as much money. Don't worry though, if it's going to happen, there probably isn't anything they can do to stop it in the long run. In the short run however, "the death star strikes back"
Two thoughts. One, the risk with checks is much more of a "you can get ripped off" risk than a "your privacy could be invaded risk" although I suppose both risks do exist. In terms of the government getting into your business, well, that's always been an issue with government. Even without all these fancy tools that consolidate your information into one neat little pile that they can just pick up on their way to lunch they have always had the ability to know everything they want to know about you (including searching everything you have) if they had any real reason to be curious (I mean, what is a search warrant other than a piece of paper certifying their curiosity as justified?)
But if the adoption rates for Google Apps (e-mail service specifically) are any indication, we're getting there, and faster than some people think. E-Mail is a highly sensitive service all things considered from a data security perspective, but companies have already proven surprisingly willing to migrate to hosted third party services -- even before the emergence of Google Apps (lots of hosted exchange providers out there). Sure not many big firms have done it, but an increasing number of large universities have. Large universities are not that unlike large companies (at least as far as data security goes, the e-mail accounts of school or university staff members are filled with all kinds of sensitive information about students among other things).
I agree with you, we are not there yet. But in the not too distant future...
But in the case of broadband wired service providers and power companies cases where they actually compete directly in the same markets are rare. At the end of the day with power you're paying a big "delivery" charge which is for the maintenance of the grid which brings the power to your actual house, you dont have a choice when it comes to that, there is no real competition. When you consider broadband wired service providers there is usually only one in your area in any given class of bandwidth and service, not two or more. In places where there are similar products they do actually compete quite fiercely on price (FiOS / cablevision in the NYC metro area, comcast and FiOS in other areas).
What about standard office productivity tasks? What percentage of the world's windows computers do you think sit on people's desks at work? That's where the real money is anyway. Sure there will be certain applications for which the browser is just not a good substitute for a client application but do those applications cover the vast majority of use cases?
What I want is the ability to save my browser session back to google somehow "in the cloud" or whatever so that I can close my browser on one computer, start up a generic copy of chrome somewhere else, login, and get my entire session restored. If that happened the whole system would just become much more useful, particularly if you are in a landscape littered with what are effectively thin terminals. Imagine that kind of functionality with a mobile device like the iPad or something (ignoring all of the limitations that exist today). Close out on my desktop, transfer to my portable device, go to meetings and w/e without missing a beat or having to take the time to open things on one device that I was already interacting with on another.
And why is it impossible to solve the privacy issues in the long run? The way I look at it, if the economic benefits of the "cloud" model are good enough, it's only a matter of time until the other issues are solved over time. Consider checks as an example of this idea. Initially, they seem retarded (I'm going to give you this little piece of paper which is a promise from me to you that my bank will give you this amount of gold if you go there to call on it). Stupid. However, when you consider that the same innovation (banks and checks) allowed you to draw on your account from anywhere that bank had a branch, and enabled you to perform large transactions without having to carry all of your gold with you all of the time, it is obvious that the transactions enabled by the innovation are valuable enough on average to outweigh the risks inherent in the system. Even today there is a tremendous amount of check fraud, but by god, we use them like there is no tomorrow. Why? because without them (and their equivalent financial instruments) our modern society could not exist.
The new "store everything somewhere else and access it from anywhere" model has very similar risks, but also very similar benefits. Sure, it's not perfect, but it's a lot better than the old model in many ways and will, over time, enable valuable use cases that we have not even imagined yet.
so, returning to my original question, why can't we solve these concerns in the long run? Because if it's not impossible, it is simply inevitable.
That is happening in regions that are serviced by multiple high bandwidth competitors. Look at what has been happening in the NYC metro region with FiOS, Comcast and Cablevision. They all now offer packages with more bandwidth than most customers would ever use (particularly on the up-side) and they are certainly competing on price (all their advertisements are aimed at being cheaper than the competition when you purchase bundled services). However in areas that are serviced by only one high bandwidth provider the firms just behave as you would expect them to -- like monopolists -- restrict supply, increase price.
You are right. What's interesting here is that the result can be the same as that of perfect competition but with a duopoly. In this case it would be very difficult if not impossible for a company to decide today that they want to be a national wireless service provider built on their own infrastructure. The problem is even if they could finance the construction of all of the network infrastructure they would never be able to compete on price. They would have to pay off the debt they used to construct the network, but they are competing against companies that have been amortizing those costs over a decade or more. They wouldn't have a prayer.
Just as an additional point, you could also make the argument that in extreme case wireless network service providers conform to the specifications of natural monopolists, and that the existence of multiple firms covering the same geographic areas is just an aberration. The costs are in building the networks, not operating them. At some point when it is possible to build a network that has sufficient capacity to meet regional demand, there will be no reason to have two of them, let alone three of them (or four of them, or more of them). I for one see no reason why wireless ISPs wouldn't end up as government regulated regional monopolists within the next 10-15 years, if that.
Bertrand specifically assumes that it is a duopoly (meaning high barriers to entry, other firms are not just coming in and out, that's a structural phenomenon) which is de facto not perfect competition. What's interesting about Bertrand is that it says given all of those conditions that you just specified which you would intuitively believe lead to something other than the result you would find in perfect competition, it happens anyway.
The only nash equilibrium in Bertrand is where they do not cooperate. In practice this happens pretty reliably in the conditions where it is possible. It always makes sense for them to collude and fix prices, but it very rarely if ever happens and when it does the government usually picks up on it and shuts that effort down. If the cell carriers could effectively collude, we probably would have never ended up with unlimited text messages (for example) and stuff like the iPhone exclusive wouldn't happen (let alone the manufacturer controlled app store that the carriers can't get their little hands into). You raised a good objection, but it does not hold water. Think it through a bit more, this stuff is interesting.
I'm not sure that changing their pricing model quite qualifies as "unscrupulous." The decision to change their rate structure probably has more to do with long term planning and getting in on some of the action (in terms of people making tons of cash selling big media files over their networks to portable devices and them not seeing a dime from that) than anything else. If they are getting effectively screwed now (by all the value being created by their networks which they can't capture) imagine what it will be like with 4G and beyond when people really do start streaming large amounts of rich media.
It's not untenable, we're just in a transition phase. At some point wireless networks will have capacity that far exceeds demand, and the carriers will collapse into a price war (Bertrand Competition) which will result in what we would now probably consider a good data-plan becoming virtually free at some point. This is the same thing that happened to phone companies with local and then long distance service, as well as a host of other industries over time. Sucks for AT&T, and Verizon though (Sprint probably wont make it). Sure, they're making stupid amounts of cash (billions and billions of profit per quarter) but they know where this road goes and they are trying really hard to change course to keep from getting right back to where they all started -- in the POTS business of the future.
They are in danger of becoming dumb, fat, pipes and then collapsing into Bertrand. Artificially restricting service to produce multiple levels is just the first step in a whole big plan to can-opener themselves back into a more powerful spot in the value chain for mobile.
AT&T knows that it will lose its shirt selling unlimited dataplans in the long run, particularly on a device like the iPad which will probably be even worse for them in terms of bandwidth consumption than the iPhone. Still sucks though, and still has that unsavory characteristic of a bait-and-switch. Well folks, it looks like AT&T decided to show up for the "get rich quick off the iPad party" after all. He makes a foul guest.
This method of radio-location is not special or unusual in any way. If anything, it is rather common and not even innovative on google's part. Several firms have exited for _years_ which focus on location based services as determined by nearby hotspots. Also, Latitude is littered with warnings about the nature of the service, and the fact that your location information will be sent back to Google. Of course, this is even less interesting when you consider the fact that your cell phone carrier already knows all of this information all the time and always has, which nobody makes any fuss about whatsoever.
Even further, if they are reverse engineering cisco products to create their own, it's entirely possible that they have accumulated a number of valuable zero day exploits that can be used against the firmware which they have extensively studied as part of their duplication efforts.
Slashdot Mirror
None of the flash benefits described by the article are impossible to replicate in HTML5/browser/javascript, and it's naive to assume that the new ecosystem wont continue to evolve over time just as flash has.
Yes you are correct, it is really just a difference in terminology though, we mean the same thing. If the service they are providing becomes effectively commoditized and they begin competing on price their profit margins will shrink dramatically, possibly even to a level where they will not be able to afford to perform dramatic network upgrades as frequently as they are now. Of course, if that were to happen it would probably only be after the networks provided sufficient bandwidth to satisfy pretty much everyone or a new superior technology had emerged which did not require the massive infrastructure and spectrum investments that the entrenched firms have already made to reach the consumers.
That's what they are afraid of. If their bits are commoditized, they wont make nearly as much money. Don't worry though, if it's going to happen, there probably isn't anything they can do to stop it in the long run. In the short run however, "the death star strikes back"
Two thoughts. One, the risk with checks is much more of a "you can get ripped off" risk than a "your privacy could be invaded risk" although I suppose both risks do exist. In terms of the government getting into your business, well, that's always been an issue with government. Even without all these fancy tools that consolidate your information into one neat little pile that they can just pick up on their way to lunch they have always had the ability to know everything they want to know about you (including searching everything you have) if they had any real reason to be curious (I mean, what is a search warrant other than a piece of paper certifying their curiosity as justified?)
Sweet. Now if I could only get Android 2.2 rolled out to my phone... Thanks for the link! Very informative.
But if the adoption rates for Google Apps (e-mail service specifically) are any indication, we're getting there, and faster than some people think. E-Mail is a highly sensitive service all things considered from a data security perspective, but companies have already proven surprisingly willing to migrate to hosted third party services -- even before the emergence of Google Apps (lots of hosted exchange providers out there). Sure not many big firms have done it, but an increasing number of large universities have. Large universities are not that unlike large companies (at least as far as data security goes, the e-mail accounts of school or university staff members are filled with all kinds of sensitive information about students among other things).
I agree with you, we are not there yet. But in the not too distant future...
But in the case of broadband wired service providers and power companies cases where they actually compete directly in the same markets are rare. At the end of the day with power you're paying a big "delivery" charge which is for the maintenance of the grid which brings the power to your actual house, you dont have a choice when it comes to that, there is no real competition. When you consider broadband wired service providers there is usually only one in your area in any given class of bandwidth and service, not two or more. In places where there are similar products they do actually compete quite fiercely on price (FiOS / cablevision in the NYC metro area, comcast and FiOS in other areas).
What about standard office productivity tasks? What percentage of the world's windows computers do you think sit on people's desks at work? That's where the real money is anyway. Sure there will be certain applications for which the browser is just not a good substitute for a client application but do those applications cover the vast majority of use cases?
Yes, this has happened before in almost the same industry with long distance lines and local service provider colocation.
Do you have an alternative that you could switch to easily for superior service terms at a similar price level?
What I want is the ability to save my browser session back to google somehow "in the cloud" or whatever so that I can close my browser on one computer, start up a generic copy of chrome somewhere else, login, and get my entire session restored. If that happened the whole system would just become much more useful, particularly if you are in a landscape littered with what are effectively thin terminals. Imagine that kind of functionality with a mobile device like the iPad or something (ignoring all of the limitations that exist today). Close out on my desktop, transfer to my portable device, go to meetings and w/e without missing a beat or having to take the time to open things on one device that I was already interacting with on another.
And why is it impossible to solve the privacy issues in the long run? The way I look at it, if the economic benefits of the "cloud" model are good enough, it's only a matter of time until the other issues are solved over time. Consider checks as an example of this idea. Initially, they seem retarded (I'm going to give you this little piece of paper which is a promise from me to you that my bank will give you this amount of gold if you go there to call on it). Stupid. However, when you consider that the same innovation (banks and checks) allowed you to draw on your account from anywhere that bank had a branch, and enabled you to perform large transactions without having to carry all of your gold with you all of the time, it is obvious that the transactions enabled by the innovation are valuable enough on average to outweigh the risks inherent in the system. Even today there is a tremendous amount of check fraud, but by god, we use them like there is no tomorrow. Why? because without them (and their equivalent financial instruments) our modern society could not exist.
The new "store everything somewhere else and access it from anywhere" model has very similar risks, but also very similar benefits. Sure, it's not perfect, but it's a lot better than the old model in many ways and will, over time, enable valuable use cases that we have not even imagined yet.
so, returning to my original question, why can't we solve these concerns in the long run? Because if it's not impossible, it is simply inevitable.
That is happening in regions that are serviced by multiple high bandwidth competitors. Look at what has been happening in the NYC metro region with FiOS, Comcast and Cablevision. They all now offer packages with more bandwidth than most customers would ever use (particularly on the up-side) and they are certainly competing on price (all their advertisements are aimed at being cheaper than the competition when you purchase bundled services). However in areas that are serviced by only one high bandwidth provider the firms just behave as you would expect them to -- like monopolists -- restrict supply, increase price.
You are right. What's interesting here is that the result can be the same as that of perfect competition but with a duopoly. In this case it would be very difficult if not impossible for a company to decide today that they want to be a national wireless service provider built on their own infrastructure. The problem is even if they could finance the construction of all of the network infrastructure they would never be able to compete on price. They would have to pay off the debt they used to construct the network, but they are competing against companies that have been amortizing those costs over a decade or more. They wouldn't have a prayer.
Just as an additional point, you could also make the argument that in extreme case wireless network service providers conform to the specifications of natural monopolists, and that the existence of multiple firms covering the same geographic areas is just an aberration. The costs are in building the networks, not operating them. At some point when it is possible to build a network that has sufficient capacity to meet regional demand, there will be no reason to have two of them, let alone three of them (or four of them, or more of them). I for one see no reason why wireless ISPs wouldn't end up as government regulated regional monopolists within the next 10-15 years, if that.
Bertrand specifically assumes that it is a duopoly (meaning high barriers to entry, other firms are not just coming in and out, that's a structural phenomenon) which is de facto not perfect competition. What's interesting about Bertrand is that it says given all of those conditions that you just specified which you would intuitively believe lead to something other than the result you would find in perfect competition, it happens anyway.
The only nash equilibrium in Bertrand is where they do not cooperate. In practice this happens pretty reliably in the conditions where it is possible. It always makes sense for them to collude and fix prices, but it very rarely if ever happens and when it does the government usually picks up on it and shuts that effort down. If the cell carriers could effectively collude, we probably would have never ended up with unlimited text messages (for example) and stuff like the iPhone exclusive wouldn't happen (let alone the manufacturer controlled app store that the carriers can't get their little hands into). You raised a good objection, but it does not hold water. Think it through a bit more, this stuff is interesting.
I'm not sure that changing their pricing model quite qualifies as "unscrupulous." The decision to change their rate structure probably has more to do with long term planning and getting in on some of the action (in terms of people making tons of cash selling big media files over their networks to portable devices and them not seeing a dime from that) than anything else. If they are getting effectively screwed now (by all the value being created by their networks which they can't capture) imagine what it will be like with 4G and beyond when people really do start streaming large amounts of rich media.
Sometimes an apple is just an apple.
It's not untenable, we're just in a transition phase. At some point wireless networks will have capacity that far exceeds demand, and the carriers will collapse into a price war (Bertrand Competition) which will result in what we would now probably consider a good data-plan becoming virtually free at some point. This is the same thing that happened to phone companies with local and then long distance service, as well as a host of other industries over time. Sucks for AT&T, and Verizon though (Sprint probably wont make it). Sure, they're making stupid amounts of cash (billions and billions of profit per quarter) but they know where this road goes and they are trying really hard to change course to keep from getting right back to where they all started -- in the POTS business of the future.
They are in danger of becoming dumb, fat, pipes and then collapsing into Bertrand. Artificially restricting service to produce multiple levels is just the first step in a whole big plan to can-opener themselves back into a more powerful spot in the value chain for mobile.
AT&T knows that it will lose its shirt selling unlimited dataplans in the long run, particularly on a device like the iPad which will probably be even worse for them in terms of bandwidth consumption than the iPhone. Still sucks though, and still has that unsavory characteristic of a bait-and-switch. Well folks, it looks like AT&T decided to show up for the "get rich quick off the iPad party" after all. He makes a foul guest.
This method of radio-location is not special or unusual in any way. If anything, it is rather common and not even innovative on google's part. Several firms have exited for _years_ which focus on location based services as determined by nearby hotspots. Also, Latitude is littered with warnings about the nature of the service, and the fact that your location information will be sent back to Google. Of course, this is even less interesting when you consider the fact that your cell phone carrier already knows all of this information all the time and always has, which nobody makes any fuss about whatsoever.
I don't get it, what point are you trying to make?
Even further, if they are reverse engineering cisco products to create their own, it's entirely possible that they have accumulated a number of valuable zero day exploits that can be used against the firmware which they have extensively studied as part of their duplication efforts.