One of the things that I have been thinking about lately is the growing tension between tech companies and the Internet service providers: this is playing out publicly with Netflix, which recently agreed to pay a “toll” to Comcast. My question is this: as cars become more connected, will we see an alliance between these large tech companies and car makers coalesce to offset the control that telecommunication companies have over the price we pay and the speed at which we access the Web?
This train of thought is rooted in a couple articles:
- Chris Davies, writing over at Slashgear, wrote about how the National Highway Traffic Safety Administration has framed a plan requiring all new vehicles to communicate wirelessly in a bid to make the roads safer. Worth noting: 1.1 million new cars were sold last month, according to the International Business Times…
- Chris Ziegler’s “Cars are the New Smart Phones,” which covered General Motors announcement at the Consumer Electronics Show that “…next year’s lineup with be available with built-in LTE and an app store.”
- Jerry Hirsch’s “Five ways Tesla Motors pushes technology change in auto industry.” Three of the items relate to the Web: large “infotainment” touchscreens, embedded telematics, and cloud based software,
Safer roads with better connectivity to the Web? Sign me up. I look forward to the day where I can catch an episode of Archer or The Clone Wars on the way to work in my driverless vehicle…but I digress.
Now back to traditional telecoms. Tim Wu, writing “The Real Problem with the Comcast Merger” for The New Yorker last month, brought up two facts that stuck with me:
- “…the merger would leave Comcast in a better position to wage war on those annoying Internet firms like Netflix, YouTube, or Amazon TV, all of whom, by cable standards, deliver way too much stuff for way too little money.” And
- “…a larger footprint will yield interesting new ways to get more money out of broadband, which is already ludicrously profitable (it costs less than five dollars a month to provide, and is sold for between forty and sixty dollars a month).”
Thinking back to the first bit on Netflix’s toll to Comcast, it’s worth looking at another telecom. AT&T, despite announcing $6.9 billion in fourth quarter profits, is threatening to rise prices if net neutrality stands (rather than improve service, as The Washington Post‘s Brian Fung notes).
Thus begins my musing: Google, with Google Fiber, already has fired a shot across the bow of traditional telecoms, In this case, the shot across the bow seems to be good for consumers. As Brian Fung wrote in “This is what a competitive broadband market looks like” this past February:
When Google said it was going to bring its high-speed fiber optic service to Austin, it probably didn’t expect to touch off a race to switch on the cheapest, fastest Internet service around. But within a year of announcing the move, AT&T followed suit. And now a third company has beaten them both.
Worth noting is the scale of Google’s effort: Brian Nichols, over at The Motley Fool, notes that “…Google is keeping costs in check on a project that was originally estimated to cost $20 billion-$28 billion over five to 10 years.”
My question is this: what if Microsoft, Apple, Netflix, Amazon, and Facebook…and ultimately Volkswagen, Toyota, Daimler AG, General Motors and Ford…join Google in an alliance to dramatically improve the coverage, increase the speed, and lower (if not eliminate) the cost at which we access the Internet in our homes and, soon, on the roads?
[“Eliminate” the costs on the notion that the value of the data that we, as consumers, generate might offset the cost of providing access to us.]
It would be an odd alliance, to be sure, but each company is likely to have a vested interested in ensuring that consumers can access their services and content with faster speeds and without being bound to the whims of legacy players that control the flow of traffic.