Ice cream and the small(est) screen

Michael Hedges December 3, 2007

Bandwidth secured, standards endorsed, investors salivating mobile TV is certain to be the next small thing. But small things can prove effective change agents. It may not be exactly what television needs, but it’s close.

And close is the operant term. If mobile TV takes off as expected, projected, hoped or prayed for entire modes of living could change. Ophthalmologists, certainly, will see a better life – or revenue stream – fixing up a new generation with a new generation of lenses. Living rooms could shrink to fractions of their current size.

The paradigm shift for television is the Web, the great content equalizer. More than the ten million satellite channels, the Web is distribution without boundaries…and without a queue for the cash register. Telecoms have vowed not to allow this grievous mistake on their playground.

Google – master Web blaster – knows this. The next big thing – wireless internet – can jump over the telecoms just as easily and with just as much vigor as the mobile phone jumped over the old fixed-line variety. Google is planning to bid on an expensive chunk of American spectrum real estate.

US telecom regulator Federal Communications Commission (FCC) will shortly auction five blocks of spectrum, the largest of which is designated ‘open’ for all devices. Openness is just not in the vocabulary of big telecoms nurtured and grown rich (and powerful) on closed systems and monopoly. Google, now rich and powerful, negotiated the ‘open’ spectrum block as part of its agreement to join in the auction. The FCC, hoping a rich and lively spectrum auction will yield as much as US$10 billion, was happy to agree.

In effect, Google’s entry into the US spectrum auction may turn out to be one of the finest examples of arbitrage in the 21st century. Merely attending the auction – GoogleMoney device in hand, red button set to send – Google forces other bidders, like Verizon Wireless, to accept a little openness and keep waving their hand at the FCC auctioneer. Google wins whether they get that spectrum block or not. Said Google CEO Eric Schmidt (Friday, November 30): “We believe it’s important to put our money where our principles are.”

It’s enough to send telecom CEO’s howling at the moon.

Telecoms lobbied the European Commission and various national regulators for exclusions on rule making that would force ‘TV-like’ services into TV rules. EC Info and Media Commissioner Viviane Reding intended to level the playing field (read: bulldoze the playground) when rewriting Europe’s rules on cross border TV. The Audiovisual Media Services (AVMS) directive, passed in final version by the European Parliament, is remarkable in many respects, not the least is that it passed.

That final version, released to envy of all Thursday (November 29), takes only a baby step toward service-neutral media regulation. But, as with all first baby steps, it is momentous. Instead of drawing a line, the line has been lifted. To keep European television broadcasters, largely incumbent government funded channels, from dissolving into irrelevance Mrs. Reding tossed them a few candy-coated bones in the rewrite of the Television Without Frontiers directive: looser ad rules, product placement and pressure on ‘TV-like’ providers to respect European content quotas.

Service-neutral regulation (and not) and ‘open’ spectrum (and not) are two lines creating a convenient grid. In the center is mobile TV.

The telecoms know this and with the power of incumbency – not to forget cash flow and friends in high places - mobile TV is attracting followers. Of course, the only followers needed are regulators (not a problem) and investors (also, not a problem). Everybody else can simply lie back and enjoy it.

Last week the aforementioned Commissioner Reding’s plan for a single mobile TV standard – Nokia’s DVB-H – was adopted by European telecom ministers. She has been arguing for the single standard for several months as a means to jump-start mobile TV because, as she said, “potentially its worth billions.” Those ‘billions’ would come from fans of the Euro2008 football championships downloading little video clips and ringing telecom cash registers. It was wishful thinking in 2004, in 2006 and it still is.

The viability of mobile TV as a ‘next big thing’ for consumers isn’t the point. The most astute consumer technology watchers believe that mobile TV – within the framework of current technology, spectrum availability and consumer appetites – doesn’t rise beyond ‘nice, but I don’t need it.’  But once spectrum is open to a wide variety of devices and media becomes service-neutral consumers will have the power to determine what and how much they want… and how they want to pay for it.

There’s a wonderful little story, attributed to everybody from Warren Buffet to Walt Disney, about an ice cream store that illustrates the power of choice.

There was once a young person with a young persons’ job of delivering newspapers. Each day as he delivered those newspapers he passed an ice cream store. The sign in front said ’53 flavors.’ He took on a second delivery job just to earn enough to try each and every one.

Years later, now a multi-millionaire, he was introduced to the man who owned that ice cream store. “I loved your store,” he said. “It was motivation for me. Tell me, is it still there?”

“Ha,” said the old man. “I followed the advice of the smartest people I knew. They told me to stop selling all but the three flavors most people bought – vanilla, chocolate and strawberry. I did and I was bankrupt within a year.”

Google may not (yet) be the worlds’ largest store. It is the worlds’ biggest newsstand. Somehow I think Eric Schmidt has heard that story.

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