Wednesday, May 30, 2012

Why Has The Internet Failed Us Here?

Back in the 90s, we were promised that the Internet would change everything. It did. Many articles have been written about what our children will never encounter because of the Internet: CD players, copiers, modems, diskettes, plane tickets, encyclopedias, classified ads etc. Yet there are things that should have been made obsolete by now and they are not. Here is where the Internet has failed us:

In North America, checks (or cheques) are still used everywhere. To pay bills, to pay in a store, or to pay money to a friend. While most banks allow online payments, there are still plenty of utility companies, county tax collectors, and newspapers that only accept checks. And while we all think that European banking is about to go back to the Neanderthal era any day now, most Europeans have not written a check in a decade as online payments and even mobile payments are quite common.

Back in my German days in the 90s, when you needed to send me money, I’d give you my account number and the bank routing number and you’d just do it online via a free instant transfer. That was possible long before the Web by using services such as the French Minitel or the German BTX. Don’t believe that the expensive wire transfers that require a 2 page form with a $35 fee are the same thing. They might be when the Buffetts transfer money to the Gates but most American bank customers have never used a wire transfer. They write checks. Frankly, I am shocked that the banks have left the door wide open for services such as Paypal and Square.

“We need the signed original mailed back to us...” - how many more times will I hear this request? Signatures are still required for many transactions, including many credit card purchases. As if the “wet” signature made the transaction somehow magically secure.

While a fax is generally regarded as a legally binding transaction, sending the same signed document via email is usually not acceptable. Why a fax is more legal than an email attachment, I don’t understand. Why a wet signature is considered more secure than any form of electronic authentication is completely beyond me. Any transaction conducted online should be faster, more secure and convenient and yet the Internet has failed to eradicate the paper-based, wet signature dependant transactions used today.

Car dealers
I get it why we need a showroom where I can test drive a car I want to check out. I also know why we - unfortunately - still need a car service center (to replace the tail light bulbs once every 4 years, right?). But why do I need to negotiate with a car salesman who knows that I know the exact invoice price of the car? And please, don’t try that “I have to talk to my manager” routine on me. I want to select, configure and buy my car online and have it delivered to my house. Delivering a washing machine costs $50 which covers the removal of the old one. The $500 you are charging for a vehicle delivery should easily cover your parking the car in my garage and registering it on the way.

Cable TV
Cable and satellite based TV entertainment with preset programming uses a completely obsolete model in the era of on-demand entertainment. Yet, they continue to exist, making viewers pay twice - once for a monthly subscription fee and then again through endlessly annoying commercials. This has to change and I am confident it will. Entertainment delivered on-demand over the Internet is becoming a more and more viable alternative and the ranks of cordcutters are on the rise. Yet still, I would have expected cable to be dead for at least 5 years by now.

Buying a house is a ridiculous experience. Pages and pages of meaningless reports, statements and disclosures complemented by mysterious fees for pro-forma inspections and mysterious services like ‘title insurance’. The realtors get up to 6% for ...what exactly? Driving me around to a bunch of lame houses only to make sure I have no choice but to put an offer in for the most expensive one? In the age of Google Earth, Zillow, and Craigslist, who needs a realtor? Both, the seller and the buyer would be better off closing the transaction directly with the title company still acting as the secure clearing house. Yes, the Internet has failed us here.

The Internet was expected to obliterate country borders. After all, I can access any web site in the world from my iPhone, right? Well, sort of. Web sites providing entertainment content from NBC to Netflix and from Pandora to Amazon are restricting the access to their content from abroad. Even when I pay for a monthly subscription, I am precluded from accessing the content as soon as I cross the border. These are artificial frontiers that have been set up to enforce the country-based content distribution rights - a rather obsolete concept in the age of the Internet. As a frequent traveler, the Internet has failed me big time on this one.

Smart appliances
The smart refrigerator that would automatically re-order milk when I’m running low might indeed not be that useful. But smart appliances would make a lot of sense and yet they are nowhere. Part of the reason why Apple killed off the entire industry of home entertainment devices is the fact that all those amplifiers, decks, equalizers, and tuners were pretty dumb - the manufacturers never considered connecting them to the Internet. How about remotely setting my thermostat to warm up the place before I arrive at home? Makes sense, doesn’t it? I cannot fathom why Honeywell and GE have not thought of that. Today, there are rumors about the perhaps-soon-to-be-announced Apple TV. If it comes, you can bet that it will be a smart, Internet appliance that will change the way we watch TV.

These are a few examples of everyday items and activities that I would have expected to be completely changed by the Internet by now. Yet it didn’t happen so far - the Internet has failed us here. There are probably many more examples you can think of - please do share them in the comments below.

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