Just about everything you see on TV is presented by one of a handful of media conglomerates. A similarly small number of telecommunication companies provides your cable service. If you have Comcast and you’re watching NBC, the content and the delivery infrastructure are owned by the same people. This tiny world will concentrate further if regulators approve ATT’s acquisition of Time Warner.
Facebook’s Grand Plan to Connect Every Corner of the World Takes Flight
The internet was supposed to alleviate this. Instead, it may compound it. Amazon, Facebook, Google, and a handful of others are displacing media companies and telcos. They already host much of the content you consume, and produce more and more of it. They own much of the infrastructure carrying that data, and they’re starting to sell Internet access.
These tech titans didn’t plan to take down the telcos. But they depend upon you having fast, reliable internet, so they’re bringing everything in-house. This promises to make things drastically better for you as a consumer, so if you hate big telecoms, you’ll feel schadenfreude at their demise. But you might end up with more of the same as the new guard becomes the old guard.
May the Best Signal Win
You’ve probably heard about Google Fiber and its shift toward wireless Internet over fiber-optic cables. Google Fi mobile service could be even more radical. Instead of building cell towers, Google resells access to Sprint and T-Mobile networks. Companies like Cricket and TracFone do this too, but Google-Fi lets your phone use the best signal available at any moment.
Granted, most mobile devices hop among networks as you roam—but only if your carrier’s signal is unavailable. If you’ve got one lousy bar of signal with your carrier, tough luck. Traditional roaming won’t let you switch to another carrier’s stronger signal. Google-Fi offers the best signal, period, no matter where you are.
That could change the economics of wireless service. Instead of signing up with a single carrier, you’d sign-up with a broker—called a mobile virtual network provider—and use the best network available. Today’s carriers would become invisible wholesalers competing to offer access at the cheapest rates. That could save you big money while providing superior service.
Falling in Line
The big carriers will resist this, of course, but it creates opportunities for smaller players like Artemis Networks. The company created a wireless network using what it calls pCell technology. Traditionally, it would have to offer people service plans, just like ATT and Verizon. Instead, founder Steve Perlman plans to sell the service to virtual network providers.
Related Stories
Google is also building a service that would let people connect to public Wi-Fi using a common login. Obviously, a blanket of public WiFi connections will make Google-Fi more viable. But before Google can stitch this massive network together, others must build pieces of that network. That’s where Facebook comes in.
Earlier this year, Facebook unveiled networking gear designed to beam the internet into remote locations and dense urban areas. It isn’t interested in becoming an internet service provider; instead it sees others using these open source tools to deliver high-speed wireless internet to new areas.
As new technologies and expanded access to the wireless spectrum drive down the cost of operating cell services, Google and other wireless brokers will be able to create nationwide–even worldwide–networks. That would make wireless service a commodity and shift the balance of power from incumbents like ATT to companies like Google.
Dark Fiber
Even if tech companies don’t wrest wireless service from the telco’s grasp, they can weaken the giants in other ways.  Amazon, Facebook and Google have long built their data centers and leased or bought unused fiber-optic infrastructure–so-called “dark fiberâ€â€“to connect them, bypassing traditional telcos.
This has big implications. Amazon, for example, runs what most experts consider the world’s biggest cloud hosting service. Untold numbers of apps and websites rely upon this service to carry their data. Traditional telcos have no part of that. Google and Facebook hope to lure more companies into hosting content on their AMP and Instant Articles services, respectively.
It’s hard to determine the scale of this private infrastructure. The Wall Street Journal reported in 2013 that Google had about 100,000 miles miles of fiber-optic routes–far more than Sprint’s 40,000 miles. Meanwhile, the research firm Telegeography reports that private networks account for about 60 percent of trans-Atlantic data traffic. If Amazon, Google and Facebook don’t already control more telecommunications infrastructure than the largest national telcos, they soon will.
Oligopoly
Put it all together and you can see a day when you’re watching content that Google produced disseminated via infrastructure that Google owns on a phone that Google made using wireless service Google brokered.
Many people find this appealing. Its hard to find an industry loathed more than telcos, which have a reputation for lousy service, opaque billing, and rising rates. Tech companies, on the other hand, generally are seen as innovators. And they’re making things better. Comcast and ATT already offer faster connections in areas where they compete with Google Fiber.
Google-Fi, Amazon’s rumored Internet service and Facebook’s open source hardware could spur greater innovation from entrenched telcos. The risk, of course, is that those tech companies simply replace telcos as the new oligopoly.
Go Back to Top. Skip To: Start of Article.