IP: comment on -- Time to do this in the USA : CANADA LEADS THE WAY IN SMS COMPATIBILITY

[David Farber <dave () farber net>]

> Date: Thu, 8 Nov 2001 11:27:47 -0800
> From: Brad Templeton <brad () templetons com>
> To: farber () cis upenn edu
>
> On Thu, Nov 08, 2001 at 05:20:01AM -0500, David Farber wrote:
> >
> > >From: Dewayne Hendricks <dewayne () warpspeed com>
> > >
> > >CANADA LEADS THE WAY IN SMS COMPATIBILITY
> > >
> > >Four Canadian wireless carriers -- Bell Mobility, Microcell Connexions,
> > >Rogers AT&T Wireless and Telus Mobility -- have made it possible for
> > >millions of Canadian wireless subscribers to use short messaging (SMS) to
> > >communicate with each other, regardless of which carrier they use. 
> Industry
> > >analysts say yesterday's announcement could prod U.S. wireless carriers
>
>
> Time not to do this.  SMS will be the death of us.  In 2001, users will
> send over 300 billion SMS messages, and the rate is forecast to grow
> into the trillions by 2004.
>
> And carriers bill for each message in most markets, usually a few pennies
> to a nickle.
>
> That translates to around $15 BILLION dollars in revenue for traffic that
> is billed per message.  Billing by usage is what telephone carriers know
> and love.   It is their model of the way the world should be.
> I just came from speaking a conference on instant messaging with lots of
> telco attendees.  They dream of this revenue.
>
> And $15B in revenues fights hard to protect itself.  Very, very hard.
>
> At the same time, other forces will be pushing for an internet style way
> of doing things.  Always on connectivity.  End-to-end applications where
> all the network does is route packets and the endpoint devices (sometimes
> in concert with servers provided either by the telco or the third party)
> have the smarts that provide the application.
>
> We all know, and I hope understand the arguments why this is the source
> of the best innovation.   Phones with things like J2ME and BREW engines that
> can run arbitrary applications, sending arbitrary packets.
>
> But as you might guess, instant messaging is a pretty trivial application
> with an end-to-end packet network.  It's very efficient and sends little
> data.   And if you have and end-to-end architecture with always-on, there's
> no way instant messaging can be anything but free.  Even if you charge by
> the packet the way telcos like to do, it you want a decent price for
> high-bandwidth applications like say, voice or web browsing, you in effect
> make the price of instant messaging insignificant.   That kills the SMS
> revenue stream.
>
> That's bad news.  The growth of SMS means that a $15B division of the
> telcos will fight the division offering unproved applications that the
> customers really want.   The SMS division is the telco way -- everything
> the customer does goes through the carrier.  Unauthorized apps are bad.
>
> Let's keep SMS from working!


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