Walled Gardens and Network Effects

This article appeared as my column for Connect Magazine in November 2004.

"Walled garden" is the term that industry uses for online communities that capture users inside a Web that is anything but world-wide. The services inside the walled garden are the ones the service provider chooses and they almost always involve increased revenue for the service provider. When I was at Excite@Home, we had a project to build set-top boxes for our cable partners that included a cable modem, but kept subscribers who didn't sign on for broadband services inside a walled garden of for-pay services. The idea of walled gardens is far from dead. You live with them everyday on your cell phone. I hardly ever use the network services on my ATT cell phone because it's all about shoving ringtones and wallpaper down my throat rather than letting me easily get to the information that I need.

In the Sept 16 issue of the Gillmor Gang (see www.gillmorgang.com), Ray Ozzie, of Notes and Groove fame, talks about how hard it is to create collaborative environments for portable devices. As noted by Ozzie, the operating systems on portable devices are too fractured and the interactions too limited to support network effects. By network effects, Ozzie is referring to the phenomenon that we frequently notice with social systems where the network of users grows geometrically because of user interaction. The applications being built for mobile devices are mostly used for personal productivity, not collaboration. The problem is that each mobile provider is trying to capture customers and create lock-in for their network instead of maximizing utility for users.

In a similar vein, one of my biggest complaints about broadband providers is that they put their users in walled gardens, of sorts. These are not the same closed off containers created by the mobile phone companies, but rather gardens with one-way glass. You can get anything you like, but you'd better not want to produce any content yourself. Comcast's view of the world is that they produce services and you consume them-and of course, you're also responsible for sending them a bag of money every month. They're not alone, DSL and Wi-Fi networks use the same strategy. The world would be richer without these artificial boundaries and restrictions. Blogging is proof that people want personalized, two-way experience on the net.

Sometimes I wonder how the Web even came to be. I think its because the Web happened in an academic environment that was not just unappreciative of commercial applications, but largely hostile to such use. By the time the Web had become a household name, it was too large to recast. When you think about how the natural tendency of business is to create sugar-coated, weak imitations of real networked environments, you realize what an amazing place the Web is. It's not that companies haven't tried to take over the Web and turn it into their own private venue, but it just hasn't worked.

I think businesses have to be extremely careful to preserve the environments where network effect flourish. They're too easy to kill. There may be too much altruism required in many cases. My primary reason for supporting UTOPIA and other community broadband plays is that the critics are simply wrong: left alone, private industry will not build the kind of networks that we need-the kind where network effects can exist.

The same is patently true in mobile networks. The possibilities are so much greater than what we're getting right now. I'm not advocating government intervention-the FCC would likely do more harm than good-but I know what we've got now simply isn't all that we need. I have hope that the mobile world will fix itself as infrastructure costs come down, so long as the FCC provides access to the airwaves. WiMax could, for example, help solve this problem as long as it can use bandwidth outside the 2.4 and 5 GHz bands. Otherwise, its just crowding in with wireless phones, Wi-Fi, and microwave ovens.

UTOPIA gives Utahns hope of having a truly open broadband experience. With luck, we'll eventually get the mobile network we deserve.

Phillip J. Windley is an Associate Professor of Computer Science at BYU. He is the former CIO for Utah and writes a daily blog at www.windley.com. Contact him at phil@windley.com.

Last Modified: Friday, 31-Dec-2004 16:27:08 MST