Brilliant. Absolutely brilliant.

My thoughts on the essay -- if anyone cares to read them -- may be found at DoxPara Research. This started out a BoingBoing post; it just failed to *stop* :-) So forgive the self-link.

If nothing else, people need to be aware that Vonage has one hell of a competitor -- MCI. Flat rate telephone service managed to arrive without any of us knowing -- there's a million people using it! It's called The Neighborhood. $50-$70/mo, and you're done.

--Dan

I really have to wonder about this article's logic.

I very occasionally have to send a fax, mostly when someone I'm communicating with insists on receiving one. (My preference is to send documents as attached e-mail.) That hardly makes it worthwhile for me to buy a fax machine. So I go to Kinko's, which offers by-the-piece fax service, something like Zapmail.

Similarly, as a person who's not on the phone that much, and whose major usage of one is local dial-up to my ISP, I really wonder why I should invest a measely few hundred dollars for WiFi, when I already have a phone that cost pocket change, and I get all the local phone service I can use for $20/month, which is the same that my ISP charges for my account. (Less than cable TV costs, which I won't buy because it's too expensive.)

Of course if VoIP really were a product rather than a service, Vonage wouldn't be able to charge $40 a month for it, would they? Not much logic there.

But as far as WiFi, Shirky and others are making a huge mistake about the economics. All the ISPs have to do is to start enforcing the clauses in most contracts limiting reselling of the service, and they can eliminate the competition from bootleg wireless. They have every incentive to do this because this will allow them to enter the WiFi market and charge for the service.

Even for home networks there are already reports of ISPs deploying detectors for NAT technology (which lets users put multiple computers online while paying for a single IP address). It's the same problem - users are violating the bandwidth models which the ISP used to set prices, and so the ISP has to start charging them more.

Sooner or later the ISPs are going to stop sitting idly by while users violate their terms of service and undercut the ISPs profit margins. No doubt the "online freedom" crowd will cry bloody hell about how this is putting them into chains or something, but that's not going to change the economic reality. Free WiFi rests on an unstable foundation; the costs it imposes are being eaten by the ISPs now, but they won't stand for it much longer, I predict.

VoIP may be a great deal for businesses. For home use, it's not so great. For $40 a month you can get a cell phone with a boatload of minutes including, most likely, unlimited calling on evenings and/or weekends, with long distance included, Plus you get text messaging, voice mail, and more. And you can take your phone with you, unlike with VoIP. Compared to that, Vonage is not really a deal at all.

Shirky can't be unfamiliar with the way cellular service has virtually replaced land-line telephone networks in other parts of the world. Surely that's more likely to happen here than VoIP via 802.11 hotspots.

Shirky seems to have borrowed from this December 20 BusinessWeek Online article, http://techupdate.zdnet.com/techupdate/sto...179,2907369,00.html. There, Jane Black talks about the problems facing the commercial WiFi service providers and draws the analogy with FedEx's failed ZapMail experiment of the 1980s. Shirkey echoes and expands upon her analysis but never mentions the article from two weeks earlier.

It seems that in the new "open" world, where we take other people's work without compensation, ideas are up for grabs as well. Apparently old-fashioned notions like attributions and credit are passe.

Shirky says "Vonage prices the phone like an ISP subscription". Unfortunately, where I live, the reliability of the service my ISP provides is very different than that of my local Telco. In fact, my ISP is my cable TV company; they also offer phone service (I'm not sure if it's VoIP, or something proprietary). Given their record as an ISP, there's no way I'd rely on them for telephone service. My expectations for reliability of IP service are not very high, whereas my expectations for reliability of phone service are.

In the long term I think he's probably right, but in the short term, he's comparing apples and oranges.

> All the ISPs have to do is to start enforcing the clauses in most contracts limiting reselling of the service, and they can eliminate the competition from bootleg wireless.

Many WiFi users aren't reselling--they're giving away WiFi access, free. Plus, not all ISPs have such a clause. People will migrate to those ISPs that let them run NAT, WiFi, etc. ISPs that don't will either loose customers or have to change their policy.

Edited by author 01-08-2003 04:04 PM
Somewhere this thread wandered off into the disucssion of private and free access points. As interesting as that discussion is, I can't see how it came from Clay's article.

As I see it, he's talking about how WiFi is being built on to the edges at home and at work, and isn't really going to work as a third party service.

And the VoIP is the same thing - it's an at-home discussion. The idea there is that you can get a single high bandwidth link (even 128kb/s will do) and switch to a VoIP provider for phone service. Because the VoIP provider doesn't have to pay anybody for classic "voice over copper" to your house, the model is closer to pure IP, less costly than the Bellhead model, and likely to clobber Plain Old Telephone Service.

Whuffies to Dan Kaminsky for his 'out of control' reply...
http://www.doxpara.com/read.php/misc/zapmail.html

As for the wifi nay-sayers...well, whatever dude :-) The experience of opening my iBook and being connected in many places has spoiled me. I now actively dislike restaurants and public spaces where I can't be connected when I want to be connected.

Am I imposing a cost on the ISP's? Maybe...but then the answer is for them to price the product based on what the market is doing, not based on what they _want_ the market to do!

And in reality, the huge majority of value of ubiquitous wifi comes from being connected everywhere, not from having lots of bandwidth.

If your location has an issue, run NoCat to throttle the 'public' class of users, and then we all win.

(as a side note: I run an open node at home, with the tacit blessing of my ISP, so I'm walking my walk on this one)

This isn't the first time Shirky has borrowed without attribution. He wrote an article about naming which borrowed heavily from an article by Zooko "Mojo Nation/Mnet" Ozoko with a similar title without attribution.

There are dozens of ISPs who are delighted to sell their service to people for the purpose of operating community wireless networks. I got a door hanger on my doorknob just today from Speakeasy telling me that they'd be glad of my connection-sharing business. I'm using Earthlink, though, which is one of the largest ISPs in the world, and is also delighted to have me share my connection. In an open market, companies that offer competitive services that their customers demand win.