Last week I gave the keynotes at the Sydney and Melbourne relaunch events of Nextgen Group, which has restructured and rebranded with the acquisition of 70% of the group by Ontario Teachers Pension Plan (OTPP) from Leighton Holdings. The group provides networks, data centers, and hosting services, including a 100Gbps link between major Australian cities, and is building a submarine fibre cable linking Australia to Singapore.
The theme of my keynote was The Future of a Connected World, showcasing some of most interesting implications and potential of connectivity.
To provide some context for the future I spent a moment looking at the past of connectivity, which unfortunately is not always as happy a story as the future.
One of the most important dates in our connected world was January 1, 1984, when the US communications monopoly AT&T was forcibly broken into 8 ‘Baby Bells’. In the following 12 years 44 state-owned telecommunications companies were privatized and exposed to competition for the first time.
Yet even after all of this deregulation and heightened competition it was still an enormously lucrative business.
In 1997 Qwest President and CEO Joseph P. Nacchio was quoted by BusinessWeek saying: “Long distance is still the most profitable business in America, next to importing illegal cocaine.”.
The truth is that prior to 1990s connectivity pricing was insanely high relative to true costs, driven by a combination of national telecoms monopolies and excessive international exchange costs.
This was an extraordinary crime, holding humanity back from its potential.
People who were far from their family members could only afford to speak perhaps once a year, often trying to call on Christmas day for a few minutes but not getting through because the lines were jammed. The potential of human connection was cut off.
Businesses were severely constrained in being able to communicate with – or even set up – remote offices. Communication was often by mail, leading to massive lost opportunities on all fronts.
As new, cheaper communications technologies have emerged, telecoms firms in the main have tried to do all they can to maintain their super-normal profits, with a few last holdouts such as international roaming only now finally being normalized.
So fortunately, extortionate telecoms pricing is now largely history.
However, lest we forget, it was long an extraordinary crime holding back human potential.