The folks at ABI Research have an interesting report examining how application developers might create Always-On applications using cellular.

It's not good.

The "problem" is that an Always-On data appilcation (say a heart monitor which phones the doctor when there are potential problems) won't use the network very often. (ABI calls these applications M2M, for "machine to machine.") As a "user" a heart monitor is a $10/month account (maybe). The distribution channels used for cellular, which depend on people, can't deal with that kind of account. (I'd always thought you piggybacked on your individual account, but never mind...)

The direct route is for the carrier to create a gateway, as Orange has in the UK. The problem with that is the carrier is only going to deal with large-scale developers. They might sign a deal with an ADT (for security) or a Honeywell (for home management), but not with a small, local guy -- too much trouble. The indirect route is to have someone else run a gateway equivalent, allowing the creation of a Movile Virtual Network Operator (MVNO) to handle data services. The trouble with that is that the operator gets cut out of some of the revenue, which they find unacceptable.

The result is nothing. There are no big application developers because there are no small scale successes. And there aren't any small scale successes because the carriers won't do business with them directly.

The solution should be, simply, to have more carriers, but the trends are in the opposite direction, with smaller carriers being "consolidated" by roll-ups like AllTel. The roll-ups, in turn, are likely to be acquired by one of the Bells in an attempt to boost their flagging stock.

The systematic destruction of competition is also the systematic destruction of American competitiveness and opportunity. If you want Always-On applications (or any other entrepreneurial telecom applications) break up the Bells.