Hey telcos and cablecos: Create local S3s!

Let's connect these two dots: (1) Cisco buys WebEx for $3.2 billion; and (2) Scoble says "Watch what happens after Ray Ozzie jumps into the market" where "Amazon S3 charges right now about $.15 per gigabyte of stuff delivered".

The first item tells us there is big value in services that run on the Net. The second item tells us there is leverage in abundant storage on which back-end busienss services can be hosted.

So here's an idea for telcos and cablecos: leapfrog Amazon, Google and Microsoft by putting Big Storage as close to customers as possible, and then work partnering deals with local outsourced IT companies to provide back-end services to local individual and business customers.

While it's true that the Net yearns to make everything zero distance from everything else, there are physical advantages to proximity. There is value in reducing latencies. There is value in providing local backup, local server capacity and local business services that require four, five and six nines of uptime and reliability.

There is value in providing local deployment of national and worldwide services as well. Consinder what will happen when the television content delivery services we call "networks" start looking for more efficient ways to distribute high-definition programs. At some point the cost of running transmitters will exceed the cost of running services and buying capacity from carriers. There's a good business for carriers and their partners to be ready with the server capacity, in buildings long since paid off, that no longer have to house telco switches of cable head-ends.

Hell, the carriers should be doing deals with Amazon and Google and Akamai to deploy whatever-it-takes to make the largest possible pile of services available to local customers that don't depend on making capacity scarce — but instead depend on an abundance of existing capacity.

There are benefits to incumbency other than charging for scarcities that are -- once fiber goes out all the way -- artificial.

Until the Webex/Cisco deal, that wasn't readily apparent. Now it is.