An Open Call for Internet Access
Recent news that Alibaba and Tencent are investing $10B into China’s second largest mobile operator — China Unicom, got me thinking.
Are we approaching a tipping point for software eating telecom?
Think about what’s happened in the last few years.
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SoftBank’s cash cow is their mobile operator in Japan. But they are betting their future on the $93B Vision Fund.
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Google acquired Motorola — which in its heyday was one of the top technology companies in the U.S.
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Social Capital is making a big bet with Rama Corp.
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Lux Capital, Bill Gates and others have invested in Kymeta.
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The FCC is trying to foster community broadband (CBRS).
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Facebook is investing in drone technology to deliver rural access.
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Some of the big incumbents in the US have come out in support of LTE-U.
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Greg Wyler just got permission to use satellites for Internet Access via OneWeb.
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USV has invested in publicly traded Tucows.
I am not sure what all of these data points mean individually. But collectively, a constellation is forming. Transformation in any industry takes time, with small progress hitting a tipping point and turning into rapid adoption. The speed software is impacting telecom has clearly hit a new level. It’s exciting to watch.
Another thing I know for sure: Internet access is massively important for productivity and the broader economy. It’s the 21st Century equivalent of electricity. Yet current internet connections in many parts of rural America have barely improved in the last 25 years. The United States sits behind Japan, Switzerland, Norway, Hong Kong, South Korea, Sweden, Norway, and Finland in average Internet speed – at an average cost higher than all of those countries. This is an impediment to bringing the entire U.S. economy into the 21st Century, and helps explain everything from wealth inequality to political dynamics. The Wall Street Journal recently wrote:
“Having access to broadband is simply keeping up,” said Sharon Strover, a University of Texas professor who studies rural communication. “Not having it means sinking.”
It’s both an opportunity and a national necessity to fix this problem.
As an investor in early-stage businesses, there are some other dynamics worth highlighting:
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Internet folks are very different from telecom folks. There is little overlap between the two, both culturally and in terms of product development and execution.
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Capital needs are far different, which means a different group of investors with different skills are willing and able to back the new players.
Collaborative Fund has invested in several companies in or around internet access, including goTenna, Tazca Connects, and Common Networks.
But we are eager to do more.
We’ve created an open Google Sheet to track cool initiatives in this space.
If you are aware of anyone working on something cool in the space, please contribute by adding to the spreadsheet!