What Business Are AT&T and Verizon in, Really?

You might justifiably argue that the idea of “dumb pipe” scares telecom and cable TV executives, but not really for reasons often supposed. The notion implies, though it often is unstated, that dumb pipe means “low margin, commodity” access.


The problem is that the notion is partly true, and partly untrue. “Share Everything,” the new Verizon Wireless pricing policy, makes voice and text messaging a “flat-fee price of admission” to use the mobile network. Internet access, on the other hand, becomes a variable-fee feature based substantially on usage.


The point is that dumb pipe is a part of the business, not the whole business, nor is it the only business service providers already are in. But it is pointless to argue about whether dumb pipe is a business access providers must be in: they must, and will.


But that doesn't ever mean it is the only business they are in. Also, though there always is thinking and some action about access providers becoming app providers, historically, nearly all the money comes from apps that are closely tied to the core access function and network. That probably won't change.