Thursday, February 02, 2006
Teleconomics 101
If networks are to be private, with no greater duty to society than "make a profit," here are five rules of the marketplace.
1. 80% of the profits come from 20% of the customers (and, by extension, 20% of the capex). So you want those elite customers.
2. Everything is getting twice as cheap every 12-24 months except labor, power and real estate (including right-of-way).
3. Supply and demand are inoperative once there's supply, because supply is expandable and shareable.
4. Raw transport is a super-commodity, and competition will drive prices below sustainable profitability. The only way to succeed at this game is M-N-P-LY. (Anybody want to buy a vowel?)
5. The real money is made when network owners use their network to lock customers to proprietary apps and content, and vice versa. (The vowel is "O".)
1. 80% of the profits come from 20% of the customers (and, by extension, 20% of the capex). So you want those elite customers.
2. Everything is getting twice as cheap every 12-24 months except labor, power and real estate (including right-of-way).
3. Supply and demand are inoperative once there's supply, because supply is expandable and shareable.
4. Raw transport is a super-commodity, and competition will drive prices below sustainable profitability. The only way to succeed at this game is M-N-P-LY. (Anybody want to buy a vowel?)
5. The real money is made when network owners use their network to lock customers to proprietary apps and content, and vice versa. (The vowel is "O".)
Technorati Tags: Competition, Content-Conduit, F2C, NetworkNeutrality, OpenAccess, ParadoxoftheBestNetwork, Regulatorium, Stupid Network, WalledGardens
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