Future Market Value of Voice, Storage: Exactly €0

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The ongoing debate on net neutrality among mobile phone carriers is amazing, and shows just how nonfunctioning that market is. I’m referring to whether they will “allow” telephony over IP and mobile internet, bypassing the SS7 standard telephony stack.

The future market value of voice calls — any voice calls — is exactly zero. And it would have been the current market value if the telecom industry hadn’t been so overbroken and oligopolized.

Same thing with future market value of storage. It, too, is exactly zero. According to every market law we know.

Of course, you can’t sustain a business selling something for more than the market value. Therefore, the mobile telecom carriers need to rethink their business model entirely. I’m predicting that the Asian model of budget carriers will soon arrive in Europe and do to the mobile carrier industry what budget airlines did to the airline industry (hint: slashed prices by about 90%).

The actual market value of voice calls, any voice calls, have been zero since 2005. That’s five years ago. How do we know this? It’s based on two undeniable facts:

One, the market price for something is the cheapest seller’s price. On a functioning market, that’s the price.

Two, while mobile carriers are still preoccupied charging about €1 per minute on some lines, Skype has been providing voice calls for exactly €0 per forever since 2005.

Now, one could argue that Internet connectivity is a precondition for making those free phone calls through Skype, and one would be right. Maybe the price wasn’t zero in 2005, or maybe it was just zero if you already had Internet connectivity.

So, do you see a future world where everybody doesn’t already have Internet connectivity?

Meaning, the current theoretical and future practical market value for voice calls is exactly zero.

Meaning, in turn, that the mobile carriers had better rethink their business model, fast. (Not to mention the landline phone companies. Anybody still uses telephones with cords attached to walls?)

On a separate topic, that also means that law enforcement will see their coveted “lawful interception” (read built-in and systemized wiretapping) go up in a puff of magic smoke as the end users take control of the actual voice app, which will also certainly have end-to-end encryption. More on that later in a separate blog post.

Going back on topic, the same thing applies to online storage. Anybody recalls the webmail wars between Hotmail (hotmail who?), Gmail and Yahoo (yahoo who)? They were competing with how much online storage every (nonpaying) user would get.

Yahoo ended the wars by giving everybody infinite storage. That means the market price for online storage is €0 per infinity, which again amounts to exactly zero.

We’re seeing a continuation of this revaluation with public dropboxen such as RapidShare and similar. The market price of online storage is still zero. Even though in some cases it’s €0 per 20 gigabytes, that’s still the same end number as Yahoo’s €0 per infinity.

Chris Anderson uses the Yahoo example in his book Free!, and the same market laws increasingly apply to voice calls as well.

Telecom industry and SS7, get out of the way. The swarm is building a voice infrastructure without a central point of control.

Rick Falkvinge

Rick is the founder of the first Pirate Party and a low-altitude motorcycle pilot.

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  1. […] This post was mentioned on Twitter by Falkvinge, Falkvinge, Piratpartiet Live!, lillebrorsan, Razor and others. Razor said: Falkvinge: Future Market Value of Voice, Storage: Exactly €0 http://bit.ly/i8a5No […]

    1. Rick Falkvinge

      Indeed. Well done, Mr. Marlinspike.

  2. von

    I looked at online backup providers some months ago. The free providers, indeed all the cheap providers, either required you to install closed-source software, or (for those who allowed uploading by webpage) had rules in their terms of service that forbade encryption. I think one even had a rule against exotic file formats.

    The price of online storage isn’t exactly free. The price is your right to privacy. (It is of course _possible_ that the proprietary software is not spyware, but there is no way of knowing. All providers that allow ordinary rsync, SSH, FTP or HTTP access have been very expensive.)

    1. ANNM

      Yes, the examples given aren’t exactly ideal for any serious persistent storage use such as backup. Sure, you could write a script that mailed encypted incremental backups to a Gmail account or use a filesystem with a complex backend that accessed data over IMAP, but it’s pretty much always going to be slower and more error-prone than pushing data over FTP or SSHFS, and sites like RapidShare are prone to delete your data after a while. Storage only seems to be free if it’s used for specialised applications such as mail or temporary public distribution.

  3. […] ties well in with our previous observations that the future sales value of voice and storage is exactly zero, but the OECD is arguably a much heavier voice than this site.) Their ability to do this – to […]

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