Thursday, May 26, 2011

Historical Limits to Progress

A classic example of history limiting progress is exemplified by the mobile carrier industry. These old telcos have no incentive to innovate because they own the lines and charge by the minute. They all spend millions of dollars every day advertising in media all over the country, when there’s not a dime’s worth of difference between the services they provide. How is it that you can make unlimited free VoIP calls over the internet at speeds much faster than the cell phone networks which charge an average of $50 a month for the same service?

If it weren’t for the extreme hostility between government and industry due to free market ideology we could have had fiber and hot spots along ever interstate highway in the country now and data and VoIP calling services everywhere for little or nothing. Countries like Korea and Japan, where government and industry cooperate, are decades ahead of us.

If you compare progress in bandwidth and technology on the internet to cell phone transmission technology the gap is obvious. Now the telcos want to buy off the government to latch onto the new spectrum freed up by HDTV technology to waste it on their outdated network and retro development practices.

There are some signs that Microsoft, Google, and Apple aren’t going to put up with this much longer. They are getting interested in bidding on spectrum and have developed voice network technology. Google has Google Voice and Microsoft has recently purchased Skype at a very high price. Already, much of the traffic that would normally be on the cell network has moved to WiFi when phone users are near a hot spot or have a home network. You don’t even need a phone. I make free nationwide calls on my iPod Touch at any hot spot using Google Voice.

I’m not holding my breath for things to change because the cable companies and telcos own the Congress, but sooner or later we are going to seen broadband internet carrying the bulk of voice calls, as they are video calls now.

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