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Re: <nettime> Koerner: Why American teens don't want the new cellphones
Francis Hwang on Mon, 13 Jan 2003 02:26:04 +0100 (CET)


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Re: <nettime> Koerner: Why American teens don't want the new cellphones


This reply's a little late, and also it has nothing to do with race,
hip-hop, or whether or not I like Missy Elliot. My apologies.

I think there are a lot of structural reasons that USians don't use SMS
and other kind of non-voice apps on their cell phones. Many of the reasons
are cultural, but just as many have to do with law, engineering, and
business.

First, the US cell business has less cooperation and more redundancy.  If
I remember correctly, the US cell network has a number of separate,
incompatible networks whereas in Europe and Asia, different companies
decided to cooperate on building one network and then compete on service &
price. (I can't find a clear answer as to whether this is due to US
antitrust regulation, or US business culture, or both.) This means that
the network has more reach outside of the US; in most of Europe & Asia,
for example, you can use cell phones in subways 'cause transponders have
been set up in the tunnels.

Similarly, in Europe & Asia SMS is an open standard that was built into
the network early on; US companies have implemented SMS in a patchwork
manner, and it's still possible today to buy a cell phone in the US that
lets you send SMS to other cells with the same provider but not with other
providers. Cut a network in half, and its value drops by 75% (Metcalfe's
Law).

Differences in billing structure also play a part. In the US, cell phone
subscribers pay up front for using the (already inefficient)  
infrastructure: They pay high monthly fees just for having a cell at all.
Outside the US this billing structure is often different. It's quite
common to be able to pay-as-you-go for cell phones; and as a result you
become much more conscious of using the voice network since each
individual call costs more. SMS becomes a much more attractive alternative
in such a scheme, since SMS costs so much less. (It uses much less of the
network, after all.) But in the U.S., once you've paid your high monthly
fee you might as well just make voice calls since you've practically paid
for them already.

I'm not sure what it'll take to reverse this. I personally love SMS;  I
got hooked on it while I was living in Barcelona, and I love being able to
send messages from a noisy bar. Perhaps some enterprising provider will be
able to slowly ratchet down the monthly fee and the free voice minutes, in
return for lots of SMS messages in the plan?  Who's to say.

One last point, and this is pretty much blind conjecture on my part.  (As
opposed to everything above, which might quality as one-eyed conjecture.)
It seems to me that many cell companies outside the U.S.  value quality of
service over being first to market. That is, it's better to get it right
than to get there first. (U.S. business literature, especially during the
dot-com boom, overemphasized the value of network lock-in, which I think
is part of the problem.) If I were running some US cell company, I would
be _embarrassed_ to say "You can send text messages, but only to other
people with our phones!" That stinks of half-assedness, doesn't it? DoCoMo
might be the clearest example of this; you need to be approved to issue
(and make money off of) iMode content. DoCoMo approves everything itself,
at its own expense.

I can picture a US company launching their own version of iMode, and
deciding not to bother with the approval process. "What's the point?"  
the execs would ask. "Approval would cost us a lot of labor, and our users
will decide quality on their own since they're the ones paying for it."
The problem is that iMode is expensive, and if the risk of wasting money
on bad content rises past a certain level, a lot of people simply won't
participate. In economics-speak, it means transaction costs would go up
because users would have to spend a lot of time worrying about the quality
of what's behind the next link ...  In the U.S. we've talked and theorized
about microcontent for years, but in Japan they built the first working
model of it. That's because all the content lives in a network where
everything can be assured of having a minimum baseline of quality.

Francis




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