isen.blog

AOL and Apple are showing signs of getting it, but the Cellcos, Hollywood, and, uh, Apple, still see "value" in walls.

Kevin Werbach points out this NY Times story on the fate of AOL within the Time Warner mothership, where one AOL executive says,

"My biggest problem is the walled garden," said Mr. Kelly, who runs all of AOL's Web properties in addition to ad sales. "The world can't see the good stuff we do every day."

Kevin hits the bull's eye with this comment:

This is AOL, the company that virtually defined the model of keeping information off the public Internet and available only to its subscribers. It now realizes, at least to some extent, the positive network effects of openness, which companies such as Google and Yahoo! are tapping into. Now, if only the broadband and wireless companies who are rushing to build new walled gardens could get the same message....

The cellcos are NOT getting it. In an extraordinary WSJ column [subscription required, but try this] Walt Mossberg says,

In the U.S., the wireless phone carriers have used their ownership of networks to sharply restrict what technologies can actually reach users. I call these cellphone companies the new Soviet ministries, because they are reminiscent of the Communist bureaucracies in Russia that stood athwart the free market for decades. Like the real Soviet ministries, these technology middlemen too often believe they can decide better than the market what goods consumers need . . . U.S. carriers are exercising far too much control over the flow of new technologies into users' hands . . . [for example,] unidentified cellphone carriers are reported to have balked at allowing customers to buy a new phone, jointly designed by Motorola and Apple Computer, that would let users synchronize and play back music from Apple's iTunes computer program. One possible reason: They want to sell music themselves . . . Apple CEO Steve Jobs said he was wary of producing an Apple cellphone because, instead of selling it directly to the public, he would have to offer it through what he called the "four orifices" -- the four big U.S. cellphone carriers.

Mossberg goes on to discuss the cellcos' crippled Bluetooth implementations, etc., etc.

Mossberg and Jobs are right, of course. Then again, neither the WSJ nor Apple are paragons of openness.

Especially Apple. Wired News reports that Apple's recent announcement that the Macintosh is switching to Intel CPUs is based on orders from Hollywood! It says

But why would Apple [switch to Intel processors]? Because Apple wants Intel's new Pentium D chips. Released just few days ago, the dual-core chips include a hardware copy protection scheme that prevents "unauthorized copying and distribution of copyrighted materials from the motherboard," according to PC World. Apple -- or rather, Hollywood -- wants the Pentium D to secure an online movie store (iFlicks if you will), that will allow consumers to buy or rent new movies on demand, over the internet.

I don't think we can blame Steve Jobs directly for playing both sides of this game. What we're seeing is the "magic hand," the gnarled clenched fist of greed, of Internet-age competition. We're seeing competition with insufficient regulation.

Mr. Martin, tear down these walls!

Technorati Tags: Apple, Cellcos, Mac, AOL, WalledGardens