McNealy Says Telcos Falling Behind in Net Race 168
BobB-nw writes "Telecommunication companies need to go beyond just providing bandwidth and look into acquiring Internet destination sites that are heavily trafficked, says Sun Microsystems Chairman Scott McNealy. "I have explained to every telco that either you become a destination site, or the destination site will become a telco," McNealy said at a news conference at Sun Microsystems' Worldwide Education and Research Conference in San Francisco on Wednesday."
No way! (Score:5, Insightful)
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Oh for the love of.. (Score:5, Insightful)
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I have explained to every telco that either you become a destination site, or the destination site will become a telco
I didn;t actually RTFA but I'm going to have to, just to see how in the hell a web site will become an ISP.
I think the telcos have to make sure they don't get marginalized to being just bit providers and bandwidth providers
That's exactly what an ISP is supposed to be!
WTF is wrong with that guy, besides being a lying asshat who will say anything to sell his company's crap?
Re:Oh for the love of.. (Score:5, Insightful)
Re:Oh for the love of.. (Score:5, Insightful)
The only way to make a profit will be to own the pipes.
Historical parallels (Score:5, Insightful)
The difference is, I think, that security through diversification and outsourcing requires a fairly mature business environment with many players to choose from. If you're the bakery who's considering eliminating your delivery department and going with an outside vendor for that purpose, you'd want to make sure there were many choices of delivery services, so that you're not tied too closely to one. If lots of choices and diversity don't exist, it might make sense to keep it in-house. Since Internet services are a relatively immature business environment, and a large content-provider like Google has few backbone providers to choose from, it makes sense that they're looking to secure their position by bringing things in-house.
What's ironic is that the one thing that the telcos absolutely oppose -- network neutrality enforced by legislation -- would probably remove much of Google's incentive to build out backbone capacity. If the telcos were forced to provide nondiscriminatory service, suddenly there's no risk for Google of being extorted. With the disappearance of that risk also goes the impetus to be their own backbone provider. (I think there are historical parallels in the early 20th century with the passage of the Interstate Commerce Act and its accompanying regulation of goods transport, although the waters are muddied by the power that the transportation and industry cartels held in the ICC and in government.)
Re:Historical parallels (Score:5, Interesting)
The result is that data providers are now at the mercy of pipe providers. Without net neutrality, it will pay to be a pipe provider. You can extort fees from data providers so that they have access to users at the end of the pipes.
What I foresee is the return of free ISPs, and maybe Google will be one of them. They will pay for all that (probably wireless) infrastructure through deals with data providers who want access to all the people who connect to the internet through Google. The laws allow "pay to play" and that's how Google would be paid for providing their ISP service. I think this could work and I want it to happen, because US ISP's are dicks and they deserve to die.
It wasn't regulation that killed them. (Score:3, Insightful)
It was considered a reasonably good business practice until fairly recently
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Good insight and gr
McNealy: Just Be Evil (Score:5, Interesting)
I think that he is referring to long term and big sites. Honestly it's not too unreasonable. If Comcast is fucking me up the ass and I can get my internet from Google why wouldn't I?
The problem with that thinking is that his proposed *solution* is what's causing the problem in the first place, pretty much exactly as you lay it out. If the carriers stop screwing people, Google wouldn't have anything better to offer as a carrier. The message should be "if you don't stop being a bunch of dicks, someone will step in and kill you." McNealy's message, on the other hand, is basically "Since people want to get away from you because you're a bunch of dicks, you could become even bigger dicks, get a monopoly on all the media, and give people no recource but to do business with you."
Which seems like better business - make people want to use your service, or try to get a monopoly so people have to use your service? Problem with the second choice is that 1) only one company can "win", and 2) people don't want canned content anymore, so you can't win at that anyway.
Re:McNealy: Just Be Evil (Score:5, Interesting)
Re:McNealy: Just Be Evil (Score:4, Insightful)
you need to do something valuable to justify you being a bunch of dicks
Right, that's what it all hinges on. I'm betting - and I think the subtext of his message supports the notion - that their method of offering something valuable is to buy somebody else who's currently doing something valuable, locking it up, and probably crippling it. Like if Google didn't own YouTube, one of those clowns could buy it and try to make it an "exclusive". That's not value, that's still being dicks.
Now if they want to actually offer something new that people would want, that would make me see things differently. But I'm betting their thinking is more along the lines of Verizon's craptastic V-cast junk.
But that still makes me wonder why it wouldn't just be easier to just stop being dicks in the first place. But that concept seems completely alien to these guys.
Introducing... (Score:2)
Along with the Concastic(TM) Goggles (notice, only one letter off from Google), users will be trapped in the endless fascination that is meaningless content and "taking it!"
Now that's lock-in.
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You want "led." When pronounced with a short 'e', "lead" is heavy metal.
Of course, I apologize if what you wanted to communicate was that Google's connectivity problems weigh as heavily on it as a fishing weight. Or perhaps you wanted to highlight the subtle poisoning that such a problem causes over time for a corporation, much as the element does for mammals.
What I like about what
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Search engine portals - Their web spiders spend their lifetime crawling the web downloading and analyzing web pages. Buying high-speed internet access for this level of usage is usually charged according to how much data is transferred. It makes sense for such multinational companies to set up their own network and have a flat-rate maintainence overhead.
If any other web site has high data transfer rate
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Yes, this is stupid. Companies have their own internal telephone system, and some of the larger ones have their own connection between sites, but the telcos are still around.
What kind of crack is this guy smoking? Crack: the super ultimate kan ban SCO edition. Become a member of AOL: get yours now!
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He's telling the telcos that if they don't adapt, they aren't going to be carrying calls. Folk will buy bandwidth and use one of the above as their telco.
I know Embarq has received not a cent more than their minimum for DSL + a phone line from me in years, yet I make hours of calls each day, most of which are international. Every call is by VoIP and is routed on a lowest cost basis.
Unless telcos adapt, it
I'm guessing he has a server supplier in mind? (Score:5, Insightful)
How kind for pointing this out.
Re:I'm guessing he has a server supplier in mind? (Score:4, Insightful)
AOL (Score:4, Insightful)
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Yahoo (Score:3, Interesting)
he is quite right (Score:5, Insightful)
Re:he is quite right (Score:5, Funny)
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incidentally, the linked article talks about sending 16.4 tpbs(pirate bays per second) so its gotta be good.
Re:he is quite right (Score:5, Informative)
You already can: http://en.wikipedia.org/wiki/PRQ [wikipedia.org]
The ISP is owned by The Pirate Bay guys.
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The already provide an anonymous VPN service [relakks.com], so it seems like a perfectly reasonable next step.
Why not? (Score:2)
Wi-Fi coverage is so broad and overlapping that suitable reprogramming of certain models of routers could easily implement an ad-hoc wide-area uncontrolled network grid serving their major markets - rapidly creating a vast "backbone" mesh almost completely independent of major telcos.
Only because telcos aren't doing their job (Score:5, Insightful)
As long touted, the Internet is designed to work around breakdowns and bottlenecks. Current telcos ARE breaking links and implementing bottlenecks
Funny thing is, if the telcos would just focus on getting packets from point X to Y quickly and cheaply, and pass that speed and savings on to the customer, they would make more money and not have to consider going into businesses they're not suited to.
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They might well make more money. But would they have as much power? I'd like to think that the ability to control a large section of a universal communication network is somewhat similar to the Catholic church buying out Gutenburg from the day he was (literal
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Telecommunications, along with music, are probably the best current examples of industries whose decades-old business models are being mangled by digital technology. Just as it no longer matters by what means you get the 0s and 1s that comprise your music, it no longer matters by what means you get the 0s and 1s that comprise your telecommunications - that's not just phone, but internet, TV, messaging, etc.
The
Customers want bandwidth from telcos, not content (Score:2)
No, what they want is a telco that's going to deliver what they want, NOW. What they want will largely come from the "long tail" that a single provider won't.
Phone is just getting data from one specialized (audio i/o) device to another; if somebody can just map phone numbers to IP addresses and get an audio data stream from one to another, we don't need a "phone service".
TV? 300 channels and only 3 I want to
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At the moment, as I understand it Comcast has a near monopoly in the US and so doesn't yet face that kind of competition, but it will happen
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Whether we like it or not, there will need to be serious changes to the internet that mean anonymity is a thing of the past. At least as its thought of now. I don't mean all your private information being broadcast (or sold), I mean that it won't be possible to hide where you're coming from, or who you are, even if that 'who' is just a l
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The older telcos are scrambling because owning twisted copper pair lines is no longer enough to ensure a profitable revenue stream - there are several other ways into people's homes now: co-axial, satellite, wireless, powerlines, and fiber.
Yes, it does matter. The examples you provided have varying speeds of 0s and
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While there are differences in the bandwidth capacities of different lines, they are all grossly underutilized in the marketplace. Twisted copper pair lines can easily support 100MB/s when correctly implemented. So can powerlines. Japan just launched a satellite service that will provide 1GB/s. Local wi-fi can easily achieve 100MB/s as well.
As I said, consumers - including yourself as you outl
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Part of the problem is also we don't have a great infrastructure in place to handle all the new services coming online. The bandwidth crunch is what companies are fighting agai
Still need those damned wires (Score:5, Insightful)
For all of Google's and other "destination sites'" talk about buying all this wireless spectrum, the fact is that wireless will just never be able to match wired for speed or quality (a 20-year-old corded phone still sounds better than even the best cordless or cell phone). You just can't get around the fact that a wire (fiberoptic or copper) still has to be laid out there for the best results. And no "destination site" is going to be laying that line anytime soon.
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You can change this, you know. Since the free market is apparently failing, you (the people, in the end: the government) can force the last-mile companies to split up, and force them to rent their last-mile connections to anyone for the same price. It's just a question of politics, as usual.
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I'm really glad my city is rolling out its own fiber lines, because Verizon and Adelphia/Comcast have done nothing to provide better service.
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1. Telcos charge the same for the last-mile connection to company X as they do to themselves. This means, they can't charge $40 for DSL access line rental and then offer DSL for $35 themselves. They need to offer their own DSL *if* they paid that $40 to another company. Anything else is anti-competitive.
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Don't confuse "becoming their own ISP" with "becoming your ISP".
The average user's home server does not count as a "destination", as used here. ISPs don't threaten to make you pay more if you want all that wonderful ad revenue to keep flowing your way.
Instead, this deals with only the biggest of players (such as Google), where the telecos have basically done their best to make the cost of Google actin
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Maybe you should try telling that to Google. [slashdot.org] I bet they'd be pretty surprised.
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Wrong on so many levels (Score:2, Interesting)
Stick to your core (Score:5, Interesting)
Retailers do not build major roads to facilitate reaching their stores.
Road-building contractors do not go into the retail business.
For a _few_ businesses, expanding into infrastructure construction may be required - but only to jump-start the market, at which point they need to get out of the infrastructure business
Electricity, natural gas, etc. providers have largely given up their infrastructure business.
Internet backbone service providers simply do not have what it takes to go into the content/destination business. It's simply not what they do, and others do it far better so long as there is sufficient infrastructure to support them. Google may be getting into the infrastructure business, but only to boost infrastructure capacity to match where they want to go in their core business; when Google gets the infrastructure to where they need it, they will have to let go of the infrastructure business because, simply, it's not what they do.
Re:Stick to your core (Score:5, Interesting)
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Lately they have been doing quite well I thought. They made a decent profit last four quarters in a row [theregister.co.uk].
McNealy is a shitty CEO, and should have been canned a long time ago.
Er, you know that Jonathan Schwarz [sun.com] has been the CEO of Sun for quite some time now?
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Hmmmm; "Fred's Fill Dirt & Croissants"?
Re:Stick to your core (Score:4, Insightful)
True, but the bigger ones certainly have a hand in what gets build where and with what money. Wal-Mart frequently gets involved in legislation and appropriations to get government to pay for roads to/from their shipping centers and retail outlets. For example, the 2005 federal highway bill [progress.org] - "The federal highway bill contains $37 million for widening and extending the road in Bentonville, Arkansas that is the main access point to the headquarters of Wal-Mart Stores Inc." The key is that they don't build the roads themselves. They simply lobby their reps in Congress (and the state legislatures and local boards/councils) to get funds to build and widen highways that are important to their retail and shipping businesses.
A similar story played out in my neck of the woods, when Wal-Mart offered to put forward some funds upfront to get a state/local project going to widen a portion of NH state Rt. 28. This would've improved access to their existing store in Salem, NH, as well as a planned SuperCenter in Derry. Eventually, the plans were put aside after Wal-Mart walked away from the new building plan, but millions in tax dollars and tax incentives to Wal-Mart were on the line due to this highway building project.
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Your anti-walmart rants do not belong in the topic.
For the record Wal-Mart does have shitty practices, but it doesn't belong here.
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IBM used to sell hardware but as the hardware business turned into a commodity market (driven largely by cheaper IBM compatibles) they shifted into a services/consultancy business and sold off the original hardware side to Lenovo.
Microsoft fears that the operating system market may eventually be turned into a commodity market (even with all the desperate lock-in attempts so it is looking to hedge it's bets by investing in web technologies.
If margins get too
Exceptions are rare (Score:5, Interesting)
GE came into being, and largely succeeded, by having the core competency "general electric": they did pretty much anything that had to do with electricity, and that at a time when a company _could_ (broadly speaking) do anything and everything having to do with electricity (kinda like IBM and computers for a long time). They stuck to their core competency, and it worked. As the company flourished, they were able to branch somewhat into other stuff - but kept that core alive, without which all would fail.
Eventually, the "electrical stuff" business got so vast and detailed and nuanced and competetive that General Electric had to largely get out of both the "general" and "electric" parts of the business. In came Jack Welch, who managed to do something _rarely_ done: change the core competency of a business, and survive. Since GE's massive growth had branched into so many subjects (not all electrical), and had gotten so successful at some of them (again, not all electrical), Mr. Welch re-wrote the core competency to "#1, #2, or not in the business". Everything GE (no longer an acronym, just a meaningless couple of letters) was not best, or second best, at was mercilessly pruned. "Neutron Jack" got his nick for vacating life from vast swaths of the company, but leaving the buildings standing. Plastics? Jet engines? Financing? not electrical, but darn good at it - so it stayed, adhering to the new core competency. Most consumer products (tape players, radios, TVs, etc.)? electrical, but losing out to Sony and other competetors, so cut the losses, don't fight where you won't win, dump the business. Train engines? actually giant electrical generators on wheels, and the department was really good at it, so that business stayed. Hydroponic farming? not electrical, they weren't good at it, and it was dropped - you probably didn't even know they tried it. #1, #2, or get out - that became the new core competency, and on a dime GE turned mercilessly to implementing it.
Yes, companies can survive changing their core competencies. To do so, they must make the change wholesale - and _stick_to_it_. Most try but fail because they didn't really change, they just branched, got lopsided, and fell over. "Do or do not, there is no try."
To the thread's point:
Telling a telco to get into the destination website business is lunacy. They're not in that business, they didn't develop competency in that business as facilitating their core, and the suggestion they try it comes directly from failing to succeed in their core competency - switching won't help because frankly they suck at both. GE succeeded in switching from making electrics to, well, making money because they were GOOD at the original core competency, and when they had to switch they had a good tangent to switch _to_, and they _made_ the switch _totally_. If telcos want to "win", they need to get GOOD at their core competency of bandwidth delivery; if they want to switch, it must be _to_ something they're already good at, developed as a tangent to the prior competency - and they have to switch completely, without mercy.
Other way around (Score:5, Interesting)
Having the access and content sides of the internet separated means that things like VOIP providers get an equal playing field. The internet provider no longer has the incentive to sabotage them. In a couple years, it will keep them from messing with video download providers in the same way.
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Arg. (Score:3, Insightful)
This is rather like the phone company cutting off your calls to inform you of all the great 900 numbers you could be calling instead.
Belkin (Score:2)
For a while they sold a router that would, occasionally, take you to a Belkin ad page instead of the website you wanted.
Years later I still won't buy any Belkin products. I'm not the only one. That stunt cost them far more than they made.
borderline diffuses (Score:2)
ISPs competing with their customers? (Score:2, Insightful)
CHANGE IS BAD! (Score:2)
Do we want content providers to own the net? (Score:2)
Guess whose content they are going to throttle and whose they are not?
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Destination becoming ISP ... (Score:3, Insightful)
"Some" people are way ahead [google.com] of the curve [slashdot.org] on being an internet of its own [news.com], but not only the telco wired land [slashdot.org].
After all, the network is the computer [sun.com] ... BHWAHAHA ! ;)
Bandwidth is a commodity (Score:3, Insightful)
eg. mail is still a cost for, and from, most ISPs yet you can get a better a/c than they offer free from GMail.
The solution of course is, not to have an auction for the latest, soon to be extinct, DotBomb 2.0 bauble (Facebook I'm looking at you), but rather to develop a useful portal for your users,
Integrate Webmail and WAPmail, offer file hosting/backup facilities, offer file sharing facilities, offer community building facilities and generally cater your service to your user base so that they see you as providing their favourite car rather than just a road, (c'mon it's /. I had to stick in a car analogy)
In short it isn't enough just to offer connectivity any more, though if you're selling 16.4Tbps you may have an advantage for a while.
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You know what's funny? That's what I remember ISPs doing in "t
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As the expanded userbase has started to get bored of looking at cute pussy cats they are developing an interest in the technology itself and what else they can use it for, hence a return to ~'96 style services/portals but that market has moved on in the meantime so IPSs will need to buy in frameworks/expertise to achieve credible modern ser
This "stuff" can change extremely quickly (Score:5, Insightful)
Things change very fast in the world of telecommunications.
So could it happen that companies like google, yahoo etc. become partly telecoms? Will, what google is trying to do, become a megatrend? I don't have a magic sphere, but from what I can see, I'd say it's more likely than not. And if/once this ball starts rolling, the telcos better have a good strategy or they'll be wiped out or "considerably diminished".
Is this really true? (Score:3, Informative)
I don't live in Finland, so I can't speak from personal experience, but your statement is at odds with news reports [cellular-news.com]. As I understand it, while cellphone penetration is very high in Europe, so is landline penetration. IIn both Europe and the US, about 80 percent have a cellphone. And a comparable percentage have landlines. In the US, many of my friends have tried dropping their landlines
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Yeah I tried VOIP too. It was great at first. Th
Could be dangerous (Score:2)
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Please muzzle this imbecile! (Score:4, Interesting)
Second, I don't want any of these skeevy telcos acquiring popular web sites, because it is inevitable that they will ruin them. Here's why:
A hypothetical company XYZCom, who provides my residential broadband connection, buys out and operates Slashdot. They now control both ends of my internet experience. What's can stop them from automatically charging me a nickel every time I hit "Reply" ? Nothing, it's incredibly easy for them and they can trivially word something in their contract to that effect. Then XYZCom decides it is unprofitable to serve outside users, restricts Slashdot to telco members only. I get burned, everyone leaves Slashdot and go post mindless drivel on Kuro5hin, world collapses under the sheer weight of inflated art-school dropout egos. Then the best part is when the telcos whine to the guv't about being so poor since Slashdot died, and get some new bill passed to defraud the general population even harder. Lather, rinse, repeat.
Besides, it just feels wrong to give the telcos even more power. That's like getting mugged by some wigger, and handing the little suburban faux-thug a bigger knife with which to threaten you. We already have few defenses against these corporate sellout behemoths, we don't need to be giving away our beloved internet.
Goodbye network neutrality (Score:2, Insightful)
If anything, there ought to be anti-trust legislation preventing the same company to own transport and content, and preferable not "enabling technology" (browsers, operating systems) either.
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Vertical monopolies are bad for the economy, generally speaking.
Earth to Scott: we already tried bundling access and content. Remember online services like AOL and Compuserve? They got their asses handed to them by the openness of the Internet.
What kind of cretinous, drooling idiot, outside of a CEO of a company offering broadband, wants to go back that way again?
Doesn't make any sense (Score:2, Insightful)
Portals! (Score:2)
It's the convergeance answer for every business problem! Portals!
So why is AT&T doing the exact opposite? (Score:5, Insightful)
I think scott is just talking out of his anus and is afraid he is going to sell less servers to the telco's to provide all these media services.
in business it's usually not a good idea to get into too many things that aren't related because you lose focus and start being bad at everything. very few companies are like GE that can compete in many fields successfuly
Gee, someone else gave this speech 2 weeks ago (Score:2)
Oh geez not portals, NOT AGAIN. (Score:5, Insightful)
Goddamn, someone needs to kill this guy before any execs fresh to the job pick up on this idea. I say fresh to the job because any old hand will have seen this before. Portals. The days when the idea was that the web started at your ISP's home page. When every ISP had a newsfeed, poorly implemented, with no depth, but a ISP portal had to have the news, and so they bought the cheapest feed they could, implemented it badly and put it on the front page.
Filled offcourse with all sorts of content you could buy from the ISP, but not the actuall content that actually is bought on the net, PORN. Hell, I worked for one ISP were they had special code for the frontpage that would only display the porn links during the late hours. Not that it really worked, because invariable the ISP content sucked compared to what was available on the real net. McNealy? The 1980's called, they want their AOL back.
The problem is that it sounds so logical. If you do not provide food services on your train stations dear transport company, then someone else will. It forms quit a bit of income, all those stands, often at least partially owned by the train company itself. It used to be they even provided pretty decent service.
Ever seen a gas station that just sold gas?
So why doesn't the same go for ISP's selling content? Because the train station example has one simple advantage. LOCATION. When I travel by train it is easier to use the supplied services at the station then go outside and get food there.
The same does NOT go for ISP's. I can switch between content sides at the press of a button, there is absolutly no reason for me to visit my ISP's newsfeed when I can go straight to the source. Why should I buy music from my ISP when iTunes is just a click away? Why should I use their branded search engine when google is just a click away?
IF ISP's had a form of lockin it makes sense, say that visiting the BBC news site cost me money and my ISP's Reuters newsfeed was free then I could easily see that some people would choose the inferior but cheap option.
Just a couple of minutes from Arnhem train station was a fast food shop with really good self-made snacks, cheaper as well, compared to the concesion stand at the station itself, but still, because it is hassle to walk the detour the crappy snacks at the station fetched a higher price.
The idea itself works, it just doesn't work for the Internet.
The older people among us know this, because it has been tried. In fact many a customer got so fed up with it, that entirely new companies jumped in the market ADVERTISING with the fact that they offered JUST internet access and nothing more.
And lets face it, it is a lot easier for the ISP's. If they sell music then they got to haggle with record companies, invest in servers, deal with complaints. If they don't sell music, they collect for the transmission of the music their customers get from whatever company is wiling to risk it. You know, my ISP EVEN gets its money when I pirate music. Let iTunes worry about what the record labels will do next, my ISP just transmits the data and gets paid for it.
No McNealy, you sometimes seem almost clever, but this article marks you as just another tie without a clue.
You are trying to sell portals. No thanks.
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Telcos are trying to make themselves the train-station. Without net-neutrality, your ISP can limit your access to the places you'd prefer to go. They can sell a lot of sandwiches if you're locked in the train station!
perhaps the telcos need more retroactive stuff (Score:2)
Telcos should be common carriers again (Score:2)
Telcos should be made regulated common carriers again. All they should be allowed to do is run data pipes. Everything else they do, they do badly anyway.
It's not necessarily the truth (Score:2)
The services available has been crippled or limited in functionality or even requiring a specific version of a specific brand of web browser to work. And everything has been centered around the telco and not around what the users have been looking for.
Of course - there are services that a telco can provide and some that actually are useful, but the portal era is a blind all
BAD IDEA!!! (Score:2)
Mixing the businesses of common carrier and content provider is a BAD IDEA! The ultimate effect would be to narrows your choices regarding that very content. (If all your sources of information -- signals AND content -- were all provided by a few bi
No, Scott. The job of the telco is: (Score:2)
* Always on.
* Get out of the way.
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No, he's trying to sell hardware and hopes that YOUR (or rather, whoever runs a telco) brain is disconnected from reality.
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Hasn't Sun been falling behind in the just-about-everything race for quite a few years now?
Yep, too much Java beans I think. They have to get the lead out of Java. I have learned over the years when Nealy's makes comments like this next quarter sales announcements at Sun are not going to be good.
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Better analogy: Disneyland will buy up all of the highways, or the highway system will buy up Disneyland.
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