Where have telecommunications “gone”?Monday, December 14th, 2009 by Roberto Saracco
I just finished to read a nice book, “the Big Switch, rewiring the world, from Edison to Google” written by Nicholas Carr.
What strikes me most is not what Nicholas is saying but what he is not saying: he never speaks of telecommunications.
He starts by looking at the rise of the electricity infrastructure and of its impact on the business and on our everyday life. Then, almost with no gaps in between he starts to speak about the new infrastructure being created by information and computers processing this information. It is this new infrastructure that we are starting to experience that is changing the business and reshaping our lives.
Has he forgotten that this infrastructure exists because there is a telecommunications infrastructure to enable it? Has he forgotten that the telecommunications infrastructure has changed the business and our life? That this infrastructure has made other infrastructures possible, like the network of transport of goods , the network of news and entertainment?
Apparently he has. Probably he considers the telecommunications infrastructure has something that has found its real dimension in the enabling of the information and processing infrastructure.
He may be right. This is something that I feared in the last part of the nineties when I wrote the book “the disappearance of telecommunications”. The success, the pervasiveness, the efficiency of telecommunications is begetting its demise from our perception, it’s making it disappear.
This fading away from the center stage is flanked by a decrease in revenues that may tend to stop once it matches the operation cost. Zero margin maybe the asymptote.
Not a nice thought of course. How can this infrastructure be leveraged by those who created it and keep investing money in it, a particularly hot question in these days when a huge amount of money would be required to move the present still largely copper infrastructure to a full optical infrastructure. The paradox, as Roberto Minerva pointed out in some of his posts, is that by moving towards the unlimited capacity offered by a full optical infrastructure and its much higher efficiency we will accelerate its demise from our perception as everyday users.
At the same time, this shift will increase enormously the growth of ecosystems that thrive on very low transaction costs.