It doesn’t take a genius to figure out how that selling broadband services is big business. But the landscape of selling broadband services in the future will look vastly different than it does currently or even in the past. While the use of standards has ignited broadband services growth, it has also fueled the success of patent pools as well as the business of inventing or buying patents that read on these standards or potential future standards.
MPEG4 is just now coming into prominence, but already the “licensing” cost of doing business in MPEG4 is beginning to play out. Vendors and operators alike are finding that doing business with MPEG4 requires more than just equipment and know-how, but also technology licensing fees. Long gone are the days companies pioneered their own technologies which allowed operators to simply buy their equipment from Cisco or Motorola and deploy it.
Today, the broadband service model is supported by critical standards that empower the industry to sell the latest volley of advanced services. However with building such equipment or operating a company that sells services using such equipment comes some degree of “subscribing” (so to speak) to standards inherent in the equipment or services.
While the adherence and commitment to standards based technologies have brought about greater cost savings and economies of scale for manufacturers and operators alike, such savings may well come at the expense of increased exposure of such manufacturers and operators to additional licensing fees and suits. Certainly, the the publically announced use of such standards in products and service has made identifying such “use” much easier. As a strong proponent of standards, I’m troubled by the outlook of what such exposure will have on the advancement of not only standards in general but also broadband services that use them. Could this lead us back to an area where proprietary technology once again rules?
It seems reasonable, that beyond basic connectivity and basic language of service integration which absolutely requires standards, all services cannot merely be of identical composition of one another (for competitive reasons). Rather, beyond these basic building blocks, they must largely be proprietary. Question is, for vendors, how proprietary can you get while on one level adhering to standards while customizing your product to meet individual operators desire to be “unique”?
On the other hand, if no proprietary technology exists, can one or more standards define enough “flexibility” for vendors and operators to differentiate themselves to the point where a Verizon looks significantly different than AT&T, than BT, than Comcast, etc.? While clearly, near term this is the case, but long term I’m not so sure. I believe that once a dominant design materializes for offering broadband services which is superior and everyone adopts it, it will be the applications that differentiate services not the network or the content - as all that will be ubiquitous. Meanwhile, as new standards like IPv6 see wide spread adoption few differences will exist among broadband service providers.
I draw an analogy of broadband services infancy the the power grid. In the early days, there was many different ways to do this, but eventually, a dominate design surfaced and it was quickly adopted. Now pretty much everyone uses that technology and the only thing that separates the small players from the large ones is the sheer scale. However from a users perspective the outlet, wires, and basic service look the same where ever you go - only the applications (what you plug in) is all the differentiates.
