Clay Shirky on ZapMail and Telecommunications Industry Clay Shirky compares the offering by Telephone companies to ZapMail, a fax service offered by FedEx in 1984(Two years and billion dollars later this service vanished). FedEx failed to understand that Fax was a product and not a service and that it's competition were it's own customers and not DHL/UPS.
FedEx misunderstood who its competition was. Seeing itself in the delivery business, it thought it had only UPS and DHL to worry about. What FedEx didn't see was that its customers were its competition. ZapMail offered two hour delivery for slightly reduced prices, charged each time a message was sent. A business with a fax machine, on the other hand, could send and receive an unlimited number of messages almost instantaneously and at little cost, for a one-time hardware fee of a few hundred dollars.
Telephone companies are making the same mistake with Wifi and VoIP. He writes:
If the economics of internet connectivity lets the user rather than the network operator capture the residual value of the network, the economics likewise suggest that the user should be the builder and owner of the network infrastructure.