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How Google Voice Could Change Everything
And become a nightmare for phone company executives
by Karl Bode 10:33AM Friday Oct 16 2009
If you needed any further evidence as to why AT&T and Verizon are so worried about Google Voice, Lifehacker highlights how users have been using Google Voice to make unlimited wireless calls, something many of our users have been doing for a while now. You of course know that most carriers have plans that allow you to call certain favorite numbers without eroding your minutes (Friends & Family, MyFaves, A-List). So what happens when you make one of those favorite numbers your Google Voice number?

As we've explored, this is precisely the kind of threat that terrifies AT&T and Verizon. Once you've got a truly open network with open devices, voice simply becomes data, SMS becomes irrelevant, and the "phone company," at least as we know it today, dies. Companies like AT&T and Verizon's role in the ecosystem shifts from being content and service companies, to simply being less profitable dumb pipes.

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In a dumb pipe world, AT&T or Verizon simply run the network and charge for bandwidth. Everything simply becomes data. With consumers picking the device, applications, IM platform, and calling mechanism of their choice over the network of their choice. The existing minutes and SMS bundle pricing structure gets obliterated.

What Google's doing is only the clunky beginning of a major shift. Once you've got more bandwidth, and truly open devices and networks, other content companies will follow suit in trying to take over the "service" portion of the equation. If my phone is like my PC with an open OS and applications I chose, why use AT&T and Verizon's dialing mechanisms? Eventually, the phone company's only option in such an open wireless ecosystem will be to constrict the pipe and charge more for bandwidth to balance billions in lost SMS, content and voice revenues.

What's an old phone company's recourse to preserve power in that kind of environment? Well, they can fight opening up their networks every step of the way (which they've done). They can engage in a game of cat and mouse to try and disable these kinds of workarounds (surely already underway). They can also attack Google for being mean to nuns and corn farmers, lobby to impose new restrictive regulations on these companies, and pass off this organic shift as the work of communists and ne'er do wells. This will work. For a while. Maybe for years.

Aside from a few public relations platitudes, carriers continue to fight against truly open networks. Phone company unions are crying out for more regulations on Google. Apple and AT&T balk at approving Google Voice for the iPhone. Why? Control. If you step back and really appreciate what's happening here, you can see that products like Google Voice could be to AT&T and Verizon what broadband was to the music industry: a business ecosystem atomic bomb.

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