The cash model of “customer experience”
Doc Searls
112

Doc,

Good write-up; a ton here to decipher.

My 2 cents from my neck of the woods (telecom/internet service providers) is that there are 3 fundamental industry flaws contributing to this.

  1. Demand for access and applications is infinitely varied, but the service providers (overpriced due to vertical integration of capex/opex at every layer) are not in a position to differentiate marginal demand and mostly perform and price to the “average user”. In other words, they are trying to sell the same basic product a thousand different ways to a billion different people.
  2. Their “edge subscription models” add to the digital divide as they have to price everything artificially high. The gap between retail and economic cost per bit is variously 90–99%. The price arbitrage to be had by “clever” business model approaches is the best it’s been since the days of Bill McGowen and the breakup of Ma-Bell.
  3. The telco world is moving away from inter-network settlements to bill and keep, and increasingly relying on all you can eat models (albeit at very high prices). At the same time the settlement free internet/IP world is moving to metered pricing with “aaS” models (as a service) for software, platforms, apps, etc…

The best model for access is that which is centrally procured or subsidized. It’s the best way to maximize costs and pricing with respect to the customer experience. Your health insurance covers the cost of home healthcare (hopefully much cheaper). Your tuition or taxes support the cost of tele-education. Your content subscription comes with the cost of the bandwidth included. Etc… I know this sounds antithetical to the net neutrality wonks, but it’s really the only way to make “gig” access universally and inexpensively accessible across an infinite array of end user experiences.

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