NEW YORK ( TheStreet) -- Carriers hate bits. Carriers prefer services.
A decade ago, in his "Rise of the Stupid Network,"
Network owners should focus on moving as many bits as possible, he wrote, and leave translating their meaning to the edge, to user devices and Web site software.
Carriers hate the stupid network. They see the stupid network as limiting their cut from traffic. They want voice to be voice, fax to be fax, TV bits to be defined as TV channels. They prefer carrier-mediated scarcity to abundance. They want what they had before the Web was spun, the power to define, control and profit from every bit sent.The stupid network still defines today's core Internet, which is a shared infrastructure. I pay for bits you move, you pay for bits I move, and we all have an incentive to move more bits. It's a business model built for abundance. But it breaks down in the last mile. Take wireless networks. They have to buy spectrum, build out entire networks, then sell the result. Money from bits doesn't generate a positive return on this capital, especially as radios keep getting better, requiring frequent updates. This has led to consolidation among carriers. T-Mobile was nearly bought by AT&T (T - Get Report) last year until the Federal Communications Commission said no. Now, T-Mobile is buying Metro PCS (PC) in a deal that gives parent Deutsche Telekom (DT) 74% of a new, publicly-traded entity,