CTIA is coming to Atlanta in a few weeks, and we haven't partied here since 1999. (I found this CTIA logo on a Taiwanese page selling trips to the show.)

The parties are going to be big and glorious. The liquor will flow. I expect to eat big shrimp in cocktail sauce. I have little doubt that the tchotscke (little gift) pickings will be lush. There will be toys, candy, maybe even t-shirts.

That's because the cell phone industry has figured out a business model that works. They give consumers something valuable, the cell phone, then charge them to use it.

Of course, it's not that simple behind the scenes. Even a "giveaway" phone costs money. What they're doing is charging you roughly $10/month for a $200 (retail) item in exchange for a 2-3 year service contract.

But the secret of the model goes deeper than that. The companies are balancing the sophistication and cost of the phone against the "billable events" it might reasonably generate. And they're giving consumers the power to make a higher-value choice, offering a range of models that do more than their giveaway model.

This has everything to do with the World of Always-On.

Right now carriers are trying to replicate the cell phone model in the land line world. (This picture of a wired gateway is from a C|Net review.)

They are doing it by looking at residential gateways.

A gateway combines an ADSL or cable modem with a router, enabling the owner to run a network. To make the offer practical, we're talking here of a wireless network, maybe 802.11b, maybe something better.

Thanks to Ford's Law (mass production and predatory pricing) such gateways can be produced for roughly the price of cell phones, and better gateways are on the way. Much of the complexity of building a gateway is being dealt with by the manufacturers. The risks to a carrier in having a gateway installed are being reduced.

A gateway today would not just be user-installed, it will provide high value out of the box. It will offer security, in the form of a good firewall. And of course it will extend the reach of a broadband connection throughout the home.

The best gateways will do much more, of course. They will provide "up-sell," services like parental controls, Voice over IP, maybe even video. Right now it's anticipated these would be sold by-the-month, with service tiered as cable service is tiered. The Holy Grail is to create "billable events," the equivalent of cellular's SMS and camera phone messages, and to write contracts in such a way that consumers who take "excessive" backhaul services pay extra for it.

Right now the best way to do that is to start with low, low prices, as little as $30/month, not much more than you'd pay for modem service from an ISP. (That's a "free" cell phone to the right.) Faster service costs more. Home networking support (i.e. the gateway) costs more, but perhaps, as gateway prices keep going down and the potential up-sell profit from them goes up, that charge can be eliminated for some consumers.

Phone carriers seem more motivated here than cable operators for two reasons.

First, the carriers fear that cable operators (who have an easier time delivering broadband) might steal their customers. If you get Internet service from your cable and have a cellular phone, what do you need a phone line for anyway?

Second, of course, phone carriers own the biggest cellular operators. Cingular is BellSouth and SBC, Verizon Wireless is Verizon, and VoiceStream is Deutsche Telekom. Yes, the offices are separate, and so too (sometimes) is the ownership, technically. But these people know one another, they have lunch, they're not stupid.

All of which means that the World of Always-On could come into your home free of charge. For a contract.