Dancing on AT&T's grave in the Wall Street Journal
The Wall Street Journal's editorial board and I disagree about almost everything, including the legacy of the late Robert Novak.
The op-ed page, however, is a different matter. And on Tuesday the Journal ran a guest commentary by Andy Kessler that says what many of us have been thinking about AT&T's (T) role in Apple's (AAPL) rejection of Google's (GOOG) Google Voice app — the universal telephone number and voice mail system the telcos should have offered us years ago. (See here.)
Like most observers, Kessler, a former hedge fund manager, blames AT&T for forcing Apple's hand, and he doesn't mince words. [UPDATE: In letters to the FCC, Apple and AT&T make it clear that it was Apple that decided not to accept the app, no AT&T. See here.]
"What this episode really uncovers," he writes, "is that AT&T is dying … cling[ing] to the old business of charging for voice calls in minutes."
Unlike, we imagine, the Journal's editorial board, Kessler welcomes the intervention of the FCC and its new Chairman Julius Genachowski, arguing that the United States can't just rethink its communications policy — even that is obsolete. What we need, he says, is a new national data policy, and he offers four suggestions:
- End phone exclusivity. Any device should work on any network. Data flows freely.
- Transition away from "owning" airwaves. As we've seen with license-free bandwidth via Wi-Fi networking, we can share the airwaves without interfering with each other.
- End municipal exclusivity deals for cable companies. TV channels are like voice pipes, part of an era that is about to pass.
- Encourage faster and faster data connections to our homes and phones. It should more than double every two years.
"Data is toxic to old communications and media pipes," Kessler writes. "Instead, data gains value as it hops around in the packets that make up the Internet structure."
He's calling for nothing less than the end of the 135-year-old Alexander Graham Bell era. And not a moment too soon.
Capitalism = Monopoly. And vice versa?
Comcast has the cable monopoly in our town, but supposedly the city oversees it. A laugh. Write a complaint to the city over pricing, for example, and who answers? Comcast does. The city oversight is limited to mail forwarding. And what is Comcast's answer? "Too bad for you."
So when will the FCC refund the $billions from spectrum auctions, and what will the municipalities do to make up for the loss of $millions in cable franchise fees?
Remember how no one bid on the D-Block in the auction of freed-up TV spectrum because Google lobbied to attach strings?
Ignoring those huge gaps in logic from an allegedly finance-focused publication, it is equally plausible that the Google app was pulled due to the Apple/Google feud, rather than the Apple/AT&T relationship.
Google produces very little of its own and destroys much that belongs to others. Â Why is this behemoth of a company with a hand in every cookie jar so celebrated as a champion of the little guy?
As I noted in commenting on the WSJ piece the deeper question is why are we a clinging to the 19th century idea of telecom modeled on railroads? The FCC itself is modeled on the ICC. We need to revisit the defining promises and recognize that the Internet demonstrates that we don’t need networks as a service. More at http://frankston.com/public including http://frankston.com/?n=BroadbandInternet&pdf=t and http://frankston.com/?n=Railroads.
Many have said it, but John from VA just said it best. There's a fundamental lack of understanding of what's happening here.
Why should data speeds double every year? Is that what customers want? Regardless of the cost or method or whether the customer needs or wants it? Julius might be better served letting the buyers and sellers make the big thinky decisions from now on.
I've read past postings and it's clear this guy is just terrible.
This is a ridiculous argument. Google is a service not an ISP. They deliver online services not the internet itself to peoples homes. All that they should pay for is their bandwidth just like any other broadband customer in this world. There are many other services ie Facebook, Twitter, You Tube, etc. These companies add value to the internet and without them there would be no draw. AT&T is the gateway, not the destination. They cannot afford to forget that if others allow access to services people want then people will go somewhere else. Also, it certainly does cost money to build infrastructure. As a company making money off of their ISP business, they had better keep building infrastructure with their profits or they do not deserve to stay in business. Listen to the consumers. Customers are never wrong.
is this guy serious? while I read this I was thought: "Umm, ok..who is this guy?"
Do you not realize how effing retarded that blog is?! why would fortune post this ish?
There's a reason why over 300,000 employees work for at&t.
We just brought back 12,000 jobs from overseas to help stimulate the economy and get people working. Now you want to loose all of the jobs people have working for these companies to create free flowing Disaster w/a capital D!!
dammmn boy!
I can guess what is in Mr. Kessler's portfolio. Its guys like this who do whatever it takes to make money even if it means destroying an industry. I wonder if he had mortgage backed securities in his hedge funds…
AT&T is a nasty company run by nasty people. I'm glad I no longer have to deal with their arrogance. I'll wait for the iPhone to be offered on a comp-etitor's network.
AT&T=the WORST cell phone coverage in the USA. iPhone is basically an iPod in Los Angeles and Columbus, OH. I am back to Verizon where i get service in areas that no other carrier covers.
AT&T is ruining their business, with overbilling their bundled customers bill each month. I AM ONE THAT IS BEING OVERBILLED AND WILL SOON QUIT AT&T completely.
Obviously the author stating such moronic comments is from planet Pluto. AT&T and its less than favorable competitor (VZ) will be in business for years and must stave off any kind of competition from Google and everyone else (Sprint being 3rd). I trade currencies at night, and the U.S. market and it doesn't take a rocket scientist to figure out that both will increase margins with apps and other services.
Maybe this author should go back to grade school to re-learn the economics of this business, along with how the economy and large companies work. It's obvious that the author’s facts are just plain retarded – yes I said retarded so deal with it. It's what you get when someone make incompetent comments and then gets paid for it.
Ex ped. I appreciate the input but lets not allow posts stating obvious deceptions. There is a reason why 85000 ATT employees are working without a contract right now and None of them work overseas. ATT should block Google until Google decides to pay the freight or build their own network. Lets see how fast their stock drops when they have to spend 100 billion dollars to build and maintain the network like we have.
To the MORON who says 1st or 2nd level reps at ATT are foreign born evidently hasnt called them lately. Im ATT and union and I am a rep and last I checked Florida was in the USA you idiot. We have over 1000 reps just in our state alone. Probably another 10k in rep in the other 21 states in the ATT footprint so SHUT UP if you dont know what you are talking about. Im happy Apple told Google to pound sand. They need to pay the freight too and if they dont want to, They should build their OWN network instead of stealing from ATT COMCAST VERIZON SPRINT or any other carrier.
ex ped: John, in the future could you try to express your point of view without calling people idiots and morons and telling them to shut up?
Gary ptak, read carefully and re-read below. Google " wants a free ride". They are positioning to pay less. Don't be so amazingly naive. Google is a Corp that is looking to increase profit.
Some of these comments are so amazing, one wonders if they were written by people from another planet! The FCC sells spectrum for billions of $$$ to the Telecom companies, who then spend additional billions of $$$ of capital, etc., to offer services but they are supposed to give out the services for free. Wow!!!
How about we let the government take over the upkeep of the lines, government programs worked well for New Orleans! I am sure the Government will keep the maintenance costs down, just look at how low my California Registrations are!
And who exactly is going to pay for all this networking once AT&T and Verizon and the Cable companies go out of business because they no longer can make money? Laying and maintaining this physical network is PHENOMINALLY EXPENSIVE.
You think you watch a YouTube video and the data is magically transported to your monitor? It passes through billions and billions of dollars of copper and fiber, and without it say goodbye to your next Facebook update.
John Smith and Paul and others have changed the topic. And the noise about just supporting AT&T because they wave an American flag and have a union is nonsense.
The question AT&T and other mega-carriers don't have an answer to is why haven't they delivered the services that Google is offering? They don't require a lot of imagination or research. The features are pretty obvious.
Don't twist it into a POTS or backbone conversation, that's not what it's about. It's about carriers restricting use of the Internet. It's about carriers who don't want to innovate, so they don't let others innovate either. It's about gouging for SMS, which they stumbled into at no cost. And even there, AT&T can't provide MMS for the iPhone!
If AT&T is going to block their customers from using Google Voice the least they could do is offer competing services.
And please stop retransmitting the noise about the carriers not getting paid. One way or another they get paid. If I'm using Google for voice services the carrier gets paid for use of their pipes on both ends. Voice or data, they get paid.
A more interesting question: When only the dialing party pays in this country when using a landline why is there a different model for wireless? The receiving party on the landline was consuming resources too.
Please educate yourself on HOW mobility & wifi works. From the most basic standpoint. This topic is old and has been written about several times. Google wants a free ride. Remove any connection to a "network" and see if your mobile or Internet works. Guy is a moron who dislikes AT&T.
Actually, you do have to have a different receiver for cable, directv, dish tv, verizon and at&t tv systems. They are called receivers which equate to your cell phones. Your mouth and ear equal your tv-get your info straight. It sounds good to make everyting work together, the problem is you have to have people to work on these systems and they don't work for the same company and the systems aren't necessarily compatible. Sounds good in theory but you have to make it work in the real world at a reasonable cost.
Yes, let's kill AT&T's circuit switched POTS. Does this mean we will have all VoIP? Does this mean that we will have reliability on par with the internet? Does that mean that Lucent's target of 2hours downtime max for 40 years of switching is out the door? Who will support the backbone network that D0D has relied on? What will be the target reliability rate of VoIP and internet? Enquiring minds want to Know!
I am so sick and tired of the numbskulls who equate every government program with socialism!
Look, we need government. That is not open to discussion. For Pete's sake, this whole friggin' economic meltdown can be laid at the feet of a LACK of government intervention!
Look, there's plenty of dumb bunnies out there who you can feed your propaganda to. So please stop polluting this site with your nonsense.
So when you "SO CALL" kill AT&T .. what backbone is going to support all your "FREE" service? You think its all MAGIC? I think this guy needs to do a little research before opening his pie hole.
R.E., "Paul" "AT&T paying Americans American wages"???? Try calling their 1st & 2nd level help desk sometime!! You'll see just how many "Americans" are really working for this company!!
P.E.D.:
I disagree!!!
Bob Novak was a great American.
+
Apple knows what it is doing.
Next year may be different.
We shall see what Verizon and Sprint and the others have to offer to Apple
Thanks for the link to that Novak article, PED…damn. There is a difference between not speaking ill of the dead and blatantly lying about his "accomplishments". Trying to paint Novak as anything other than a mouthpiece for the conservative movement is just dishonest.
On topic, Kessler is right on with his assessments. Just not sure how the "any network" thing really plays out in reality, given the multiple standards. We are going to force companies to make GSM/CDMA/WiMax/4G compatible models of all their phones?
One person noted that the netowork platforms are different and inter-operabiitly is precluded…if TV worked like the cell services do, you would have to buy one kind of TV if you were on Comcast and another if you used Directv. That is a better system??? They should be made to all work together.
Interesting article:
– End phone exclusivity – CHECK ! This should have been done years ago.
– Transition away from "owning" airwaves – keep in mind that wireless is mostly wired. Only the first 100 feet of WiFi is wireless, until the signal reaches the access point. WiFi is highly dependent on the existence of powerful, reliable, wired networks from companies like … AT&T !
– End municipal exclusivity deals for cable companies – CHECK ! Anyone ever gotten headaches from Comcast ?
– Encourage faster and faster data connections to our homes and phones – hold your horses. This is very expensive to provide. The service providers, such as AT&T, have to charge for it somewhere. This point needs a LOT more thought.
Overall, a very thought-provoking article. Give yourself a raise, promotion, and pat-on-the-back.
It would be nice to see a single calling plan that includes everthing, and is around fifty dollars. Wait, Metro PCS and Cricket offer that, well it sounds attractive, the consumer will pay for the lack of voice and data capacity and quality hence the all circuits are busy or your out of your coverage area. As other readers have commented who is goning to pay for the infrastructue, that is the core bases to anything, it will need upgrades and maintanence. A fixed rate national calling plan is to immature, cause most companies need to own fiber lines to support the capacity, and then they have to expand into rule america, where majority is serviced by microwave relay nodes, not fiber. The end of Graham Bell is not near, it just needs to be overhauled. There needs to be less interference, in laying of new fiber lines, and the upgrades to microwave serviced areas, to allow for both adequent voice and data capacity. Once your core infrastructure is in place, and has the ability to sustain usage growth over 5 years to seven, then a lower flat rate will be more in tune, but it has to be low but yet enough to cover upgrades and expansions, if not we end up with an obsolete network that will need to be overhauled again.
Let's think about what you are saying. Let's take private companies investments (R&D, capital, etc), and nationalize them. We will let the same government that wants to listen in to you conversations, and read your emails, run the system.
Obviously, the write of this article should have lived in Moscow about 60 years ago. He would have been very happy, because they already have had this system.
Those who do not learn from history are doomed to repeat it.
How do you suppose this will effect the government revenue windfall that auctioning off the proprietary bandwidth to competing companies is expected to generate? Does everyone figure the Feds are just going to pass on this money?
AT&T forcing Apple to remove Google Voice would be like Verizon blocking Skype on their FIOS service since it would/does endanger their opportunity to charge for long distance calls.
Haven't we been through this before with the Telecommunication Act of 1998? The ATT and Verizons have profitable business plans with millions of shareholders. Take away that profit and who pays for the infrastructure and tech. upgrades…….the government? I think they're spending enough elsewhere.
Interesting topic, is freedom of speach included. I have A.T.&.T contract because of my purchase of a iPhone. I knew about the contract, and accepted the terms. I did not know that either A.T.& T. or Apple could determine what applications I use on my paid for Iphone.. In fact at the time I purchased the iPhone, the Google Voice app. was available. I did not down load it, because I was just learning how to use the iPhone system. I wonder what happened to those who did download G.V. and have to give it up when the system removed the app. It seems like a restrenth on right to free speack..
if AT&T is so much faster than Sprint, then why are they is last place in every 3G data test conducted in the USA this year? And by a wide margin?
Obviously Mr. Kessler does not know what he does not know. All wireless network platforms are not the same and therefore inter-operability is precluded. I hope I live long enough to ask Kessler how much he likes his government run health care!
These guys truly know nothing about wireless technology. Let the government get involved with AT&T again so they can rwrite another apology in the Washington Post about how they raised phone prices by splitting up AT&T in '84. Yeah I'm for that. Whatever?
Paul mistakently wrote . . .
This is very interesting. Let the government get involved with the few successful companies we have, ATT, and let government screw that up. Here we have an American ICON of a company,
–
Actually, Paul, this is not your father's AT&T. Despite the re-use of the iconic "T" stock exchange symbol,
this new incarnation is actually the "old" SBC Communications that purchased the remaining assets of the old, doddering "original" AT&T.
So, in a backwards way, your point somewhat supports the author's view that "old-school" voice communications are a thing of the past
To FED UP: First, your comment about VZW upgrading to GSM discredited your post. VZW is NOT upgrading to GSM but to LTE. GSM carriers will also upgrade to LTE at some point.
Second, nobody said the new bussines model will be free for the users. The users will still pay for the services they received, however, will be more free to move their devices around.
Wi-Fi is interference free at your house? I guess mine would be, too, if nobody used baby monitors, garage remotes, blenders, microwaves or any other consumer elctronics. Can I come over for a cup of mobile internet?
Consumers will continue to drive this process – if we can get what we really want from someone else, we will. The established companies will cling to their cash cows as long as possible, but it's only a matter of time before the old models crumble. But it would be nice if the government could accellerate the process…
This is very interesting. Let the government get involved with the few successful companies we have, ATT, and let government screw that up. Here we have an American ICON of a company, successful, not looking for handout, having worked and paid for an exclusive relationship, and now people want government involved so we all have more Wal-marts to serve us. Trust me, there is Sprint, go join if you want, but i doubt you want to have calls not connected. Here is a company with premium service, union workers, at the highest highs of technology paying Americans American wages, and this nonsense gets published in that mecca of American enterperunrial newspapers (WSJ). And people comment here jumping on an American company. i guess we be happy of Deutshe Telecom and Nippon Telecom take over. Get real people
OK; then how does one recover costs for building and maintaining the networks that provide for the flow of voice and data? There is no free ride out there. If you want state of the art, someone has to pay for it.
Sure and who will pay for the infrastructure improvements needed. Lets let the government run it like USPS or Motor Vehicles. Are you people nuts?? There is not one network in this country that is faster than the current ATT network and that is a fact. (I build the infrastructure for all and know who has what) Sprint's 4G is a joke over WiMAX and Verizon doesnt come close and upgrades to GSM will cost a lot and show little ROI in the near future (The same for any) If Kessler knew anything about technonlogy he would not be writing the stupid OP ED and how the editors @WSJ let it passed showed there ignorance on the subject as well as the many who post to these sites.
WOW! Kessler has really nailed it.
AT&T is the ball and chain around the iPhone's ankle. The cell phone industry is the ball and chain around the wireless internet's ankle.
What Kessler failed to mention is that this problem is international. Try international roaming with Google Maps on your iPhone sometime and then check out your end of month billing statement. You'll get the picture.
Slow down everyone here, I am going to first address the the AT&T Lover, who apparently does not have a clue about how AT&T Operates. This discussion is ALL ABOUT Business Conduct, Morals, how does AT&T conduct business? Well, with someone who is VERY Famaliar after the last 5 years, hint, I will tell you the issue/s at hand here. First, the gentleman said something about bringing jobs back to the United States, they never should have left in the first place. Second, AT&T laid off 12,000 people on December 4, 2008, BUT IN TURN gives their former CEO a $175 Million Dollar wave goodbye as a retirement package. Please, do not tell me how AT&T is good for anyone, except the people who run AT&T. I can name countless incidents where AT&T is so focused on how mitigating their managment decisions by hiding behind their vast legal team, INSTEAD of doing the right thing. This company is a public trust, we own the company, the investor, shareholders, employees, did someone forget that over there? Many executive management decisions they make are short term reactionary decision focused on short term stock price, their decisions, and conduct are criminal. IT is these executive's duty, see that word, DUTY, to act upon the best long term interests of the company, shareholder, and employee. It is apparent that AT&T, time and time again, makes decisions on what they think they can get away with, instead of just being moral and ethical. Look in the news on a daily basis and you will see how many times AT&T is getting sued, latest one is about age discrimination, see the pattern of behaivor?
The Apple iPhone, which I own, is the most ground breaking mobile communication device ever invented to this day, there are knock off's, NONE are close. The argument here is this is a product that anyone should be able to buy without getting strong armed into having to buy AT&T Wireless services, they have eliminated the choice of the consumer, the right to choose and let the free market determin and the customer who they want to use for their service provider, it has slowed the growth of the product overall, but took the choice away from us, the customers. The Google App is a clear example, someone said something about be an ISP, they deliver LARGE amounts of content, I am sure they have enough bandwidth. The concern here, and the product Google has is long overdue, is that all of us that have an iPhone and pay $99 a month for unlimited voice, we could cancel that, and just have our internet and text messaging, cutting the bill into more than half. We should be able to have, yes, you got it, that choice. VOIP is easily run, takes minimal bandwidth, and uses the 3G connection on the phone, it is a revelolutionary service Google has that is GOOD for the customer, never losing their number, along with many other features as well. I can guarantee you one thing, Apple did not block this for any other reason than to protect AT&T and then AT&T can force it's customers to spend money with them when better services are available elsewhere. AT&T said it had nothing to do with this decision, if your stupid enough to believe that, get your head examined. The google application has ZERO effect on Apple's Business, Apple sells the phone, and more importantly, wants to sell it's content from iTunes, Apple does not care about voice and how it is provided, the Google Application would only affect, yep, AT&T, and then AT&T lied by making those statements regarding this issue to the FCC. They are monopolizing the customer, yet again, slowed technology growth by this kind of conduct! The bandwidth doubling question is based on Moore's Law of technology increasing at that rate, Moore says 18 months. Moore was one of the founders of Intel. Maybe it is time for our government to pull the plug on AT&T, but for good this time for good.