Building on yesterday’s post covering network neutrality / prioritized bandwidth, here are a five things bugging me about the business models proposed by telecommunications companies:

1. Multiple Classes of Service: Telecommunications companies suggest that networks should adopt models similar to airlines, with business and economy classes. Telecommunications companies are in more trouble than I thought is they’re looking to the airline industry for business models.

2. Charging 5-10 cents for iTunes downloads: If consumers had a choice between downloading songs at current speeds, or paying an additional nickel or two for faster downloads, I think they’d stick with the former. In a download and play business model, how much does speed really effect the quality of service?

3. Differentiation degrades service: A model that makes the best margins off premium services (faster downloads in this case) would have to differentiate the services significantly enough to justify the premium rates. Would carriers hold back evolution of the non-premium services in order to entice more premium business? How often does your cable company upgrade your basic cable compared to offering additional services with attached fees?

4. Inefficiencies of Dual Networks: American telecommunications companies haven’t been able to keep up with most of Europe and Japan while running only one network. Just think how inefficient they would be running two.

5. Mission Critical Applications: Mark Cuban should take a look at how mission critical services are delivered offline. We don’t build separate roads for ambulances. We build an infrastructure that’s capable of carrying everything from a groups of teenagers to movies, to ambulances racing to save a lives. Is it perfect? No. But it’s much more efficient and cheaper than building dedicated lanes for mission critical services like emergency vehicles.

Five negatives. Frankly, I’m having a hard time thinking of any positives. Any help?

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