| |
| META TOPICPARENT | name="FirstPaper" |
|---|
| |
>
> | My first paper is ready for review. Thank you. | | |
It is strongly recommended that you include your outline in the body of your essay by using the outline as section titles. The headings below are there to remind you how section and subsection titles are formatted. | |
<
< | Paper Title | >
> | Talk is Cheap…And Getting Cheaper | | | -- By DonnaAckermann - 05 Nov 2009 | |
>
> | The citations to "Article" in my paper refer to the Forbes article that is attached below. | | | | |
<
< | Section I | >
> | Background | | | | |
<
< | Subsection A | >
> | Over the past decades, the local and long-distance phone service industries collapsed. AT&T and Verizon transitioned to the cellular phone industry to find a new market. While AT&T and Verizon managed to survive, the value of their stock decreased about four times more than the market average. Article, 102. And now, the cell phone industry itself faces collapse. Will AT&T, Verizon, Sprint Nextel, and T-Mobile be able to survive the collapse of the cell phone industry, too? Based on the principles of anarchist production that we discussed in class, and after reading the attached Forbes magazine article, I argue that the cell phone oligopoly will be forced to surrender its industry domination and will have to transform yet again. | | | | |
>
> | From my understanding of Professor Moglen’s class, where the marginal cost equals zero, digital functional goods will always be superior if they are produced anarchistically than if they are produced proprietarily. For the cell phone industry, the digital functional goods are cell phone calls. A cell phone call is a functional good because it is a bitstream that “does,” instead of just being a bitstream that “is.” As I see it, the marginal costs of producing a call are zero. Once a consumer has the necessary hardware (the cell phone – a fixed cost), and the company has set up the appropriate infrastructure to handle calls (cell phone towers/antennae – also fixed costs), then it does not cost anyone anything more to have another consumer place an additional call. The competition of cheap new wireless networks guarantees that proprietary production models will fail. It does not matter how long or how often people speak, at what time of day they speak, or to whom they speak. | | | | |
<
< | Subsub 1 | >
> | The Obsolete Business Model | | | | |
<
< | Subsection B | >
> | Companies established rules to regulate cell phone calls based on the obsolete business model of operators working switchboards, but those rules do not make sense in the cell phone context. For example, it used to cost more to call in the middle of the business day because more operators were needed to address the increased volume. Thus, people used to pay less for a long-distance call placed after 11 p.m. This practice bears a striking resemblance to the restriction on cell phone calls where minutes are "free" after 9 p.m. | | | | |
>
> | Similarly, “despite the lack of any plausible link to their underlying costs,” (Article, 96), phone companies began charging more for text messages to encourage consumers to purchase unlimited texting, which increased profits. I myself am a “victim” of AT&T’s text messaging plans, often exceeding my 200 text plan by 20-30 texts. It is unfeasible for me to expand my plan to avoid the extra charges for going over my allotment, since the next level of flat-rate text messages is 1000 texts, which far exceeds what I need. (Undoubtedly, AT&T knows the habits of its consumers well enough to determine that providing 200 texts and 1000 texts, with no option in between, is the best way to make the most money.) | | | | |
<
< | Subsub 1 | >
> | The New Business Model | | | | |
>
> | MetroPCS? has a different attitude about the cell phone industry. This company functions more like a service provider and less like a service dictator: it offers consumers unlimited talk for a flat rate of $40/month instead of locking a consumer in for a specified time period and restricting what the consumer can do during that time. See Article, 99-100. According to MetroPCS? ’s model, a customer pays to gain access to the cellular network, and then once on the network, he can do whatever he wants. | | | | |
<
< | Subsub 2 | >
> | MetroPCS? seeks to “turn cell phone calls into just another cheap digital commodity.” Article, 94. By providing the service for less money, it makes the service more accessible, which will attract more customers; while the profit margin will be lower, the volume is so much higher that MetroPCS? will make more money. MetroPCS? is already the fifth largest cell phone network behind AT&T, Verizon, Sprint Nextel, and T-Mobile—a distant fifth but gaining quickly. Article, 92. | | | | |
>
> | Faced with this competition, the oligopoly of the giant four have all followed suit to some extent, issuing unlimited, no-contract plans (except for T-Mobile who is expected to do so in the near future). Article, 100. This step turns the cell phone oligopoly into mere service providers who provide access and no longer dictate the terms of that access. Limitations on using the network (whom you can call when and for how long) will no longer work. Companies will be forced to cut their prices for service because of competition from the Big Four, and from smaller companies like MetroPCS? . Eventually, however, it is the competition from the internet itself that will doom the Big Four and other proprietary models. | | | | |
>
> | What the Future Holds | | | | |
<
< | Section II
Subsection A
Subsection B | >
> | Whereas in the past, cell networks were built to process cell phone calls and other data separately, the 4G network treats phone calls as just another kind of data to be moved around. Article, 101. Despite the Big Four’s resistance, the market will not allow them to keep VoIP? applications like Skype from operating on the cell phone network, especially as 4G will treat a Skype phone call the same as any other data communicated over the phone. Instead of making the cell phone call a cheap digital commodity, anarchist production – routing calls over the internet – will entirely eliminate the commodity of a cell phone call. Just as the Big Four had to recreate themselves after the collapse of traditional local and long-distance phone service, so too will they have to find another way to survive and profit. Consumers are discovering that all of their cell phone calls can be covered by paying for a monthly data plan (as with mobile internet), as opposed to MetroPCS? ’s unlimited talk plan which does not include internet. As the Big Four already provide data services for laptops, in time a cell phone plan will not distinguish between talk and data capabilities, and a single monthly rate will allow access to talk or surf the web. | | |
You are entitled to restrict access to your paper if you want to. But we all derive immense benefit from reading one another's work, and I hope you won't feel the need unless the subject matter is personal and its disclosure would be harmful or undesirable. |
|