McGuire’s Law

According to Red Herring, Alain Lamassoure, a French member of the European Parliament has proposed a tax of just under 2 cents on each SMS and a miniscule tax on each e-mail.  Red Herring estimates the SMS tax alone could total $5B per year across all 25 EU member countries.

As lawmakers look for new sources of revenue, telecom is constantly in their cross-hairs.

Not only would yet more taxes represent raising the barriers to building mobility into more products and processes, the accounting challenges of tracking and assessing the charges could put a huge burden on service providers.  For SMS, the issues may not be significant, since providers have typically established usage-based billing structures for texting services.  However, very few providers of e-mail services charge per message, and the nano-payments involved (is that a thousandth of a cent per message?) are increments that standard accounting and billing systems aren’t designed to handle.

Hopefully this proposal will fail and not set a global precedent, however, we should expect telecom services to continue to be targeted whenever tax revenues seem to be falling short of increasing government spending.

As reported many places, this past week Treasury Secretary John Snow finally abolished the excise tax on metered telephone service that was originally put in place at the end of the 1800s to fund the Spanish-American War. As I previously noted, this is just one of many taxes placed on “telecommunications services” that threaten the promise of the power available if mobility were added into every product and every process.

Only alcohol and tobacco are more heavily taxed than telecom services, which might imply that lawmakers hope to break us of our communications habits, but I doubt that Washington wants to give up the $92 billion the wireless industry contributes to the country’s GDP. I spent some time last week with Roger Entner, the author of that study, and he confirmed that last year’s findings are still relevant and on track. The study also estimated that “over the next 10 years, the wireless telecom industry will create an additional 2-3 million new jobs, adding a cumulative additional $450 billion in GDP.” The full study is available here.

Today, on a day that our country sets aside to honor those who have fought to preserve the freedom that we hold so dear, it is only right that those who served us so nobly in the Spanish-American War are no longer burdened with part of the blame for the continued over-taxation of the basic telecom services that provide us with the freedom of mobility!

The Law of Mobility talks about value increasing with mobility. The impact of this law is being felt because the cost of adding mobility into products is falling, making it a no-brainer for mobility to be built into everything. Here are examples of technology advances enabling this to happen:

• Bluetooth connectivity for medical devices
• Wind-up cellphone chargers
• Embeddable data modem
• Embeddable 2 megapixel camera module
• Java for Cellphones
• Web browsers for cellphones
• Data optimization for wireless networks
• Star power battery
• Surface covering OLEDs

Mobility is a wonderful thing. As mobility gets built into all products and services, businesses need to learn how to both capture the power of mobility and manage the dangers introduced through mobility. Here are some examples of how the power of mobility is being applied to create competitive advantage:

• Keeping gamblers from going mobile
• Intel achieves 5% worker productivity gain
• Keeping track of airline baggage
• Achieving 10% improvement in inventory stockfile accuracy

In order to be winners in the new mobile era, businesses will not only need to capture the power of mobility, but also manage the danger. Highlighted below are recent examples of the danger of mobility and how some firms are beginning to manage it:

• Hackers lurking on metro Wi-Fi networks
• Inappropriate content (a bad solution)
• Remote wireless data backup
• Mobile theft

The most convenient way that mobility is getting built into products is through the convergence of capabilities that previously existed as standalone products into the cellphone. That way, those products are now with you and available for your use whenever you need them wherever you go.

• Cellphone as RSS reader
• Cellphone as home monitor
• Cellphone as credit card
• Cellphone as FM radio
• Cellphone as Walkman
• Cellphone as conscience

I will present the concepts behind the Law of Mobility at the upcoming Techdirt Greenhouse on June 10 in Sunnyvale, California.  If you’re in the area, register to join in the discussion!

A new article has been published by Mobile Enterprise magazine on their website. 

Mobility: Way More Than Connectivity (click to read) talks about how capturing the power of mobility involves much more than just giving employees the ability to access stuff across a wireless link.

Let me know what you think!

Qualcomm consistently gets a bad rap in the industry.  In many ways they seem to be like the Evil Empire in the Star Wars movies - having established their dominance over virtually all meaningful 3G standards through their intellectual property in CDMA (including the EV-DO networks launched by Sprint and Verizon) and WCDMA (including the UMTS and HSDPA 3G standards for GSM networks).  Qualcomm extracts what it believes to be fair payment for its contributions to the advancement of the industry.  Clearly, this situation does not sit well with competitors and even some customers.  Qualcomm does not mind applying a little force to ensure that its subjects remain loyal and to eliminate the threat of any upstart forces.

However, many have believed that the greatest threat to the Qualcomm empire has been a pocket of Jedi-like competitors using some mystical force known as “WiMAX” to challenge the power of Qualcomm.  Some now believe that Qualcomm is preparing to aim it’s deathstar-like legal weapons at these upstarts to bring them into submission.

Here’s a collection of fairly recent articles representing the resistance to Qualcomm’s power:

• The Potential Qualcomm Obstacle To WiMax
• Qualcomm Hit with Anti-Trust Complaint
• Qualcomm files patent infringement suit against Nokia
• Telecom Leaders File Qualcomm Antitrust Compaints

Given that, over the same period, NTP and Visto have also been in the news for aggressively protecting their supposed Intellectual Property Rights against major wireless players, some might view Qualcomm, NTP, and Visto all in a similar light.  Here’s just a sampling of headlines from the NTP and Visto frontlines:

• RIM, NTP settle case
• NTP, RIM settle (no, it’s not the same settlement…)
• RIM rivals ink licensing agreement
• RIM-competitor Good sued by NTP-ally Visto
• Visto expands sync suit
• Visto sues RIM, Microsoft, Good

However, as greedy as Qualcomm may seem, comparing them to NTP and Visto is just plain unfair.  If the Evil Empire analogy at times seems to fit Qualcomm, then a comparable analogy for NTP and Visto is Jabba the Hutt.  Although there’s a clear distinction between the criminal Star Wars character and the assumed-non-criminal intellectual property companies, they both share the characteristics of wanting to get rich without doing any “real” work.

Qualcomm, on the other hand, is a “real company” with real products, with significant real business in the wireless industry.  It truly is a force to be reckoned with.  One that threatens its competitors with visible force rather than sneeking around trying to collect payments with as little fuss and as little visibility as possible.

You don’t have to like Qualcomm, but they are worthy of respect.

As always, the opinions expressed here do not necessarily reflect the opinions of my employer (although Sprint clearly agrees that Qualcomm is worthy of respect).

The Law of Mobility talks about value increasing with mobility. The impact of this law is being felt because the cost of adding mobility into products is falling, making it a no-brainer for mobility to be built into everything. Here are examples of technology advances enabling this to happen:

• Smaller chips
• Mini cell sites
• Next-gen mobile broadband technologies
• Application interoperability across handsets
• Multi-tasking Java for handsets
• Tiny gyroscopes
• Fast imaging chips
• Open Source WiFi toolkit
• “The CafePress of mobile content”