Fearing Canada: Is Google Our Last Hope?
Digital entertainment, gaming included, would seem to be entering a golden age. Access, usage, diversity of content and audiences, sound financial models -- all of these things should be taking us to a nirvana of sorts, populated by iPads, flat-screen TVs and advanced set-top boxes, and smartphones.
There's just one problem. The foundation of our digital paradise has been built on a swamp. That swamp consists of the cable companies and telecoms that have vested interests in the continued employment of obsolete, traditional media delivery.
It's ironic really. These companies built up data networks as an added service on the infrastructure of their core business. Always seeing data as an additional service, they prospered with two revenue streams for one basic product. Now, they are freaking out with the realization that this "added service" has outpaced their core business, and is about to put that core revenue stream out of business. Wireless telecoms are threatened by VoIP, and cable companies are threatened by video streaming. Services in which, for both cases, the digital offering can provide a far superior user experience than the traditional form.
This week, Canada's been seeing the fallout. First, it turns out that one of the country's major ISPs was throttling "World of Warcraft" to a point where it became unplayable, due to their P2P blocking equipment not being able to determine "good" traffic from "bad" traffic. Then, Netflix announced that it is downgrading the default video quality for Canadian subscribers in order to help prevent our northern friends from going over their alarmingly low data caps. Kind of makes me want to send a love letter to the FCC.
The devices we use to play games are increasingly becoming all-purpose digital entertainment hubs. This is such a wonderful thing that it's kind of scary to look at how easily the system can collapse. Because it all comes down to a physical infrastructure, cable companies have a monopoly on our data. Monopolies tend not to intrinsically gravitate toward fair business practices. There is some hope down the road as wireless telecoms ramp up their data capabilities (already, Verizon's 4G LTE is providing top tier home cable speeds in some consumer tests), but is still a ways off in being able to compete in speed, throughput, and pricing. Also, those industries have their own internal chaos to manage. It really gets one wondering...is there no hope?
Well, not quite. A while back, Google announced it was going to roll out a super-fast network to a city in the U.S., essentially just to demonstrate that it can be done and that our ISPs are a bunch of lazy bums (though this isn't quite how they worded it). Well, lucky Kansas City is in for a treat, as in early 2012 they will be having 1Gbps speeds (100 times faster than most home broadband today) for "competitive pricing" with local ISPs. There is also some indication that this may end up as a continued rollout, with other areas also getting some Google love.
With a little luck, there's hope we'll avoid Canada's fate, and there will be sufficient competition in the business of data by the time cable's core business loses its profitability. Still, it's worth remembering that seemingly technical jargon like data caps and consumption-based pricing have real-world consequences, especially in relation to the devices this column covers so frequently. A minor update to an ISP's pricing could have far-reaching effects on the whole industry.