I was talking to one of my buddies the other day and he asked what happened to the promise made fifteen years ago that we’d be able to walk up to vending machines and buy products without having to use cash or a credit card. The promise that this technology was coming was based upon a widespread technology already in use at the time in Japan. Japan has vending machines for everything and Japanese consumers had WiFi-based HandiPhones that were tied into many vending machines.
However, this technology never made it to the US, and in fact largely disappeared in Japan. Everybody there, and here converted to smartphones and the technology that used WiFi phones faded away. As with many technologies, the ability to do something like this requires a whole ecosystem of meshing parts – in this case it requires vending machines able to communicate with the customer device, apps on the consumer device able to make purchases, and a banking system ready to accept the payments. We know that smartphones can be made to do this, and in fact there has been several attempts to do so.
But the other two parts of the ecosystem are problems. First, we’ve never equipped vending machines to be able to communicate using cellular spectrum. The holdup is not the technology, but rather the fear of hacking. In today’s world we are leery about installing unmanned edge devices that are linked to the banking system for fear that such devices can become entry points for hackers. This same fear has throttled the introduction of any new financial technology and is why the US was years behind Europe in implementing the credit card readers that accept chips.
The biggest reason we don’t have cellular vending machines is that the US banking system has never gotten behind the idea of micropayments, which means accepting small cash transactions – for example, charging a nickel every time somebody reads a news article. Much of the online world is begging for a micropayment system, but the banking fee structure is unfriendly to the idea of processing small payments – even if there will be a lot of them. The security and micropayment issues have largely been responsible for the slow rollout of ApplePay and other smartphone cash payment systems.
This is a perfect example of an unfulfilled technology. One of the most common original claims for the benefits of ubiquitous cellular was a cashless society where we could wave our phone to buy things – but the entrenched old-technology banking system effectively squashed the technology, although people still want it.
I look now at the many promises being made for 5G and I already see technology promises that are not likely to be delivered. I have read hundreds of articles that are promising that 5G is going to completely transform our world. It’s supposed tp provide gigabit cellular service that will make landline connections obsolete. It will enable fleets of autonomous vehicles sitting ready to take us anywhere at a moment’s notice. It will provide the way to communicate with hordes of sensors around us that will make us safer and our world smarter.
As somebody who understands the current telecom infrastructure I can’t help but be skeptical about most of these claims. 5G technology can be made to fulfill the many promises – but the ecosystem of all of the components needed to make these things happen will create roadblocks to that future. It would take two pages just to list all of the technological hurdles that must be overcome to deliver ubiquitous gigabit cellular service. But perhaps more importantly, as somebody who understands the money side of the telecom industry, I can’t imagine who is going to pay for these promised innovations. I’ve not seen anybody promising gigabit cellular predicting that monthly cellphone rates will double to pay for the new network. In fact, the industry is instead talking about how the long-range outlook for cellular pricing is a continued drop in prices. It’s hard to imagine a motivation for the cellular companies to invest huge dollars for faster speeds for no additional revenue.
This is not to say that 5G won’t be introduced and that it won’t bring improvements to cellular service. But I believe that a decade from now that if we pull out some of the current articles written about 5G that we’ll see that most of the promised benefits were never delivered. If I’m still writing a blog I can promise this retrospective!
p.s – I can’t ignore that sometimes the big technology promises come to pass. Some of you remember the series of AT&T ads that talked about the future. One of my favorite AT&T ads asked the question “Have you ever watched the movie you wanted to the minute you wanted to?”. This ad was from 1993 and promised a future where content would be at our finger tips. That was an amazing prediction for a time when dial-up was still a new industry. Any engineer at that time would have been skeptical about our ability to deliver large bandwidth to everybody – something that is still a work in process. Of course, that same ad also promised video phone booths, a concept that is quaint in a world full of smartphones.