Way back in the early 1960s, when a Rand engineer named Paul Baran came up with the idea of a packet-switched digital communications network, his toughest opposition came from AT&T, the world's biggest telephone company. The AT&T folks were dismissive of digital gear and refused to have anything to do with it.
In the end, Baran withdrew his proposal because it would have to be implemented by AT&T, and he figured they would screw it up. It was a rational fear. "First," a senior AT&T executive said, "it can't possibly work, and if it did, damned if we are going to allow the creation of a competitor to ourselves."
In 1972, after the Arpanet was up and demonstrably running, AT&T got a second bite at the cherry. The Pentagon asked the company if it would be interested in taking on the network. Once again, AT&T declined.
Spool forward four decades, and nothing's changed. Telcos are still the corporate world's equivalent of the Ultrasauros, the dinosaur that stood six stories high, weighed 50 tonnes and had a brain the size of a walnut.
Actually, the comparison is unfair to dear old Ultrasauros, for he probably had better strategic judgement than the Telcos, who shelled out US$150 billion for third generation (3G) phone licences and are now contemplating spending a further US$150 billion to build the networks which will be necessary in order to provide 3G mobile phone services. Now nobody minds companies making massive investments if there are reasonable grounds for supposing that vast revenues will one day flow from them.
The really striking thing about the 3G gamble was the fatuity of the ideas for earning revenue from the increased bandwidth provided by the technology.
How were mobile phone operators Vodafone, BT and their peers going to get back the (borrowed) cash they paid for their 3G licences? Why, by providing subscribers with novel, must-have, cutting-edge services such as, er, sports scores, stock market prices, travel updates, news flashes, health tips, best-buy information, premium-rate porn and "localised content" based on the fact that 3G phones know where they are.
Or, to put it another way, the Telcos are going to recoup their investments by offering the kind of brain-dead content which has already proved a commercial flop on the wired Web.
And, just in case anyone thought the technology would come to their aid, the companies are discovering that delivering 3G networks is technically more difficult than expected. Apart from anything else, the phones have to be bigger because they have to be able to function as 2G phones whenever they cannot reach a 3G base station.
There are really only two conceivable uses for a 3G phone. One is as a paperweight. The other is as a high- speed modem.
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