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Access: the achilles heel of Internet companies



Internet companies, no matter their size, are totally dependant on Internet access providers. They are vulnerable and it will come back to haunt them if they don't do something to change the current status quo. With all the talk about "net neutrality or not" this should become a point of strategic concern in the not so distant future: no business owner can be so utterly dependant on one single point of failure.

It stands to reason then that the status quo will change. We are already seeing very early signs with such initiatives as Google Fiber and their project Loon (described on their home page as: Balloon-powered Internet for Everyone) as well as other experiments being conducted by Facebook and others.

Some might say that these are very tiny initiatives designed to provide access to rural areas, but the truth is that we are seeing the laying of the foundations for the future. Product and services companies will need to control the access so as to protect their revenue stream.

So how might they do this?

1. The large US tech companies hold more than $250 billion in cash overseas. With this cash, buying a global telco is not out of the question. After all, Facebook recently paid $18 billion for messaging app WhatsApp. They could transform the acquired telco into a simple utility company by reducing all the product overhead and focus it on provide access and building infrastructure.

2. A variant on the previous idea but with a twist. Think of a joint venture between Facebook, Google and Microsoft. They buy a global telco, transform it into a simple utility company focussed on providing access and building infrastructure for the Internet world.

3. Encourage young innovative companies to bring new Internet access models to the market. The power of the Internet customer acquisition model provides opportunities to a multitude of young companies to develop and try new models. Some of the new models will utilise telco wholesale capacity, while others will further explore hardware related options.

Of course the current Internet access providers are not going to lay down and die. They will fight to counter these initiatives and even attempt flawed services offerings. In the end, it will not work and they will become what they fear most: simple utilities.

Only one thing is sure in this battleground: Internet access is the "mother" of all battles and consumers look forward to the day when access is a right and no longer the rip-off it is today.

* This post was first published on LinkedIn


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