World Economic Forum: global digital vision is upbeat, but who picks up the tab?

Profile picture for user slauchlan By Stuart Lauchlan January 25, 2015
Summary:
Three leaders from US tech firms find themselves in optimistic agreement about digital's global potential, but their European counterpart wants to know who's paying?

Sheryl Sandberg
Sheryl Sandberg

I will answer very simply that the internet will disappear.

It was Google Executive Chairman Eric Schmidt that got the headline-grabbing top quote in the final digital-centric debate at the World Economic Forum.

It was a star-studden line up. Alongside Schmidt, was Facebook Chief Operating Officer Sheryl Sandberg, Microsoft CEO Satya Nadella and Vittorio Colao, CEO at Vodafone Group in a season nominally entitled The Digital Economy.

I say nominally because while the conversation that ensued was interesting and thought-provoking, I’m less than convinced that it stuck to its brief, with precious little hard economic content.

So, for example, Schmidt’s point and thrust was heavily built around his vision for the internet - or the ‘disappearing’ internet:

The internet will be so many IP addresses because of IPv6, so many devices, sensors, things that you're wearing, things that you're interacting with that you won’t even sense it, it will be part of your presence all the time. Imagine you walk into a room, and the room is dynamic, right?

And – again – with your permission and all of that, you're interacting with the things going on in the room, a highly personalised, highly interactive and very interesting world emerges because of the disappearance of the internet.

Eric Schmidt
Eric Schmidt

For his part, Microsoft’s Nadella pursued a ‘human impact’ angle:

The thing I’m most grounded on is the role of technology. Ultimately to me it is about the human capital and the humaSn potential. Technology empowers humans to do great things. I think there needs to be a new global consensus that allows technology to progress and find the balance with legitimate interests that individuals have, societies have, governments have. To truly see the benefits of technology, we need to get to that global consensus. To have a happy ending, that’s the discussion we need to have.

Facebook’s Sandberg also picked up on the human empowerment aspects of the digital world:

This is the shift - from the historically powerful to the historically powerless because everyone has voice. Everyone can post, everyone can share. That give voice to people who historically have not had it. There are a lot of divides that are still increasing, but if you look at the power of technology and particularly social technology it gives a more equal voice than ever before.

But this means getting the world wired up, she added:

Facebook has said that it wants to make the Internet available to new parts of the world. It has rolled out free Internet access (via the company’s Internet.org app) in countries such as Kenya, Ghana, Colombia, Zambia, and Tanzania.

The goal of Internet.org is to make internet access available to the two thirds of the world who are not yet connected, and to bring the same opportunities to everyone that the connected third of the world has today.”

This isn’t the whole answer. But it’s a way of getting some people some data for free. But fundamentally the economics has to change to get the rest of the people online. As things are currently priced, they can’t afford it.

Divided

Nadella concurred that there is a still a heavy divide:

Are the spoils of technology being spread evenly? That’s an issue that we have to tackle head on. We’ve got to get this balance between privacy and the legitimate use of data for public safety in order for governments to protect us. The last issue is this one of fragmentation. The internet is one of the greatest global goods and if we destroy it, we destroy a lot of our economic future. How do we get to the situation where we avoid that the real nightmare scenario of Balkanization of the internet and yet accommodate for legitimate interests? We need a global consensus.

Satya Nadella
Satya Nadella

Schmidt took a forthright stance on this:

Almost all of the problems we debate can be solved by more broadband connectivity in these countries. Broadband is how you address the governance issues, the information issues, the location issues, the personal security issues, the human rights issues, the women’s empowerment issues. Simple steps to make broadband occur in countries where it is lagging, are the key government and policy initiatives to benefit the majority of people. If you have a government policy to make broadband broadly available, the citizens are clever enough. Just wire them up and the citizens will take care of a lot.

Vadfone’s Colao agreed with the rest of the panel when it came to ‘the vision thing’ about digital potential, but struck a ruthless note of pragmatism when it came to talk of facebook.org or Google’s broadband balloon idea. He kicked off with:

i see a movie in front of me, I know the end of the movie. I can see in the countries where we operate where the story is today. It’s just the beginning of a great story. If you think of the movie, the movie is everybody connected with very low latency. If you move the movie to the last scene, 10-15 years from now, you can only be very optimistic.

In fact, he went further than the others when it came to extravagant analogies:

I call myself a digital plumber. There are people who build the roads and highways, but there have been people who are against roads and highways. But bring me someone who’s against water pipes. Water pipes are life. We are life.

Vittorio Colao
Vittorio Colao

But life has a price tag and Colao wanted to know who’s picking up the tab?:


I would like Sheryl to say whether she’s paying for the bandwidth or not? Of course the concept is good, but the question is who pays for the investment, the spectrum, the infrastructure that is required.

If Facebook in its generosity wants to donate part of its very large market cap into this, that’s great. But that’s your choice.

I am more a fan of finding structural ways, not commercial or promotional ways, to reduce the cost of providing data.

Free - to me - doesn’t sound like sustainable in the long term.

My take

There's an old journalist joke that seems appropriate. The joke runs that a US CMO comes out on stage and tells an audience of assembled hacks that the company's product can address 99 out of 100 problems. The US journalists rise to their feet and applaud the bright future that this presents. The one European journalist looks up and says: "So, what's the one thing it can't do?".

I was rather reminded of that as European CEO Coloa broke ranks with the US companies relentlessly upbeat vision to inject a note of pragmatism to the blue-sky thinking. That's not to say that the worldviews of Schmidt, Nadella and Sandberg are any the less admirable, but cutting to the chase of who pays is a very important question.

The one economic point on which all four panelists agreed was that broadband costs to much and there's a need to address the price point problem. A good vision.

Now how do we get there? Unfortunately that didn't make it into the session. Maybe next year?