The Body Politech

A Single Pipe to Rule Them All

2009-12-08T15:20:00.000-08:00

The FCC is now seeking comment on the transition from the legacy circuit switched voice network to a future all-IP network. This announcement is the beginning of a long and arduous process that will have profound financial and regulatory implications for, if history is any guide, the next 50-100 years.

The elephant in the room in any discussion of upgrading or replacing the old publicly switched telephone network (PSTN) to an IP network is Universal Service. Universal telephone service has long been a political sacred cow for the simple reason that running telephone cables to rural areas is expensive and under basic economic principles the cost could not be recovered at the price for service. The Universal Service Fund (USF) was established to compensate rural telephone companies for their costs. If you pay a phone bill, you pay into the USF in addition to your carrier. Rural telcos can then keep the prices down, at levels deemed acceptable by state public utilities commissions. Since most Senators and many Representatives have rural constituencies, messing with the USF is political kryptonite.

Since IP networks carry digital data which may be used for voice services (VoIP), but are not dedicated to telephone service they do not currently qualify for Universal Service where an existing voice circuit currently exists. When we hear of the need for Universal Broadband, this is why we don't have it. The economic costs are too high for the price and the internet isn't covered under the USF. However, many rural carriers are providing IP services to their customers at sustainable costs. They can do this by running fiber optic cable subsidized by the USF as a telephony service to homes where they are the local exchange carrier. They can then provide these homes with broadband internet over fiber optic cable at market prices without losing money. However, once the data network is in place, the homeowner can use an phone service they want, not necessarily the local providers. They pay the provider for the broadband only.

The end game here is twofold.

1) Because of both the politics and the fact that data can be anything - a phone call, a TV show, a web page - the USF provision will need to be transferred from the telephone "pipe" to the "data" pipe.

2) Applying the USF to data pipes, will create a subsidy and subsequent price regulation for Universal Broadband, something that many policy makers have been hoping for, for a long time.

I agree. We can no longer view the wires (or wireless signals) that come in to our homes as service-specific. They are all just data and capable of being any of the services we might subscribe to. Just as at the beginning of the twentieth century, the cost of running cables to sparsely populated rural areas, can not be recovered in the prices charged for their usage. Therefore, these new data pipes should be built and regulated under the USF or similar newly constructed mechanism.

The FCC Starts Wondering What Granddad's Beach Cottage Might Be Worth...

2009-12-04T14:52:00.000-08:00

Is the FCC ready to look at renovating the beachfront property? The folks at the CommLaw Blog think so. They are daring to ask the question "What is more in the public's interest? Using the beachfront spectrum for more broadband internet or for free over-the-air broadcasting?." Their vehicle for gauging the public interest is in the economic value to society in the form of jobs, growth and innovation. By casting their net in this manner, the FCC appears to have front-loaded the argument in favor of the innovation bringing broadband over the buggy-whip driven local television broadcasts.

Once this debate gets outside the walls of the FCC, expect the hand-wringing, flag-waving and the tea-partying to begin. Although, yet again we will undoubtedly find some strange bedfellows. After all, what would be more libertarian and free market driven than letting the use of these airwaves find their highest value on the open market?

Comcast/NBC is Good for Net Neutrality Because It's Bad for Net Neutrality

2009-12-03T14:16:00.000-08:00

The Comcast/NBC partnership is good for Net Neutrality. Why? Because it provides the clearest possible example to the greatest number of people of the dangers of a walled internet without the neutrality principle. Owning NBC, Comcast now has a clear incentive to charge other internet providers like ATT and Verizon for the right to provide access to NBC/Universal content over the internet or simply to provide better, faster or higher definition content to Comcast subscribers, providing a switching incentive.

The high visibility of the NBC/Universal content in the public's eye will ensure that this does not happen. Acting as Congress's agent for the public interest, the FCC or FTC in conjunction with the Department of Justice will not permit this merger to move forward without a binding agreement that non-Comcast users will receive both the same full access and equal treatment as Comcast customers. With these conditions in place, it will set a clear precedent for the first time for internet video content, echoing the FCC's Madison River decision which protected VoIP content.

Perhaps, the clearest precedent to the current case, though, lies in the FTC's handling of Time-Warner's 1995 acquisition of CNN. As a condition of the merger, the FTC required Time-Warner to carry a second 24 hour news channel in order to provide competition to its own CNN. Time Warner chose to carry a fledgling joint venture between Microsoft and NBC - MSNBC. Rupert Murdoch took issue with this choice, made over his equally young 24 hour news channel - Fox News. Several lawsuits later Time Warner settled and agreed to carry Fox News in the New York City market. This event ultimately led to the prominence and reach that Fox News has today.

Comcast customers currently have equal and non-discriminatory access to content from NBC, Disney, Viacom and countless other providers. This merger will not occur unless Comcast agrees to preserve this status quo, which will provide the highest profile real world affirmation of the doctrine of Net Neutrality to date.

It is Immoral to Allow Wealth to be the Deciding Factor in the Provision of Medicine

2009-05-19T07:48:00.000-07:00

Two areas of policy that I don't ordinarily touch are Education and Healthcare. I just don't know enough about the economics or deep underlying theories to have as informed opinions as I would like. However, with Healthcare reform once again in our leaders' crosshairs, I'm going to go out on a limb. Any national health care policy should follow this first principle:

It is immoral to allow personal wealth to be the deciding factor in the provision of timely life-saving medicine.

I don't know what single-payer health care means. Socialized medicine and European-style health care are just phrases that are meant to provoke feeling rather than describe an actual policy approach. So I don't have a policy solution to recommend. Paying for medical insurance, however it's carved out of my income (by my employer, by myself, through tax rebates), seems reasonable enough to me economically. However, it is probably more expensive than it should be, and for many people in our country, simply unaffordable when compared to the more immediate needs of food and shelter. So as our leaders once again try to reform the health care system, I hope that first principles are always foremost in their minds. We can not make the availability of medicine dependent on the ability to pay for it, nor can we saddle people with an immense financial burden after the medicine is provided.

A Worthy Joust for Google?

2009-05-18T09:21:00.000-07:00

Henry Blodget boldly writes the obituary for the latest Google competitor, the Wolfram Alpha Computational Engine, this morning in the Business Insider. Blodget is absolutely right as is this commentator that Google has too much of a head start and has enough of the search problem solved that any incremental improvement a competitor provides will quickly be incorporated in their own product.

Google will find its match some day, and as the comment states it might be mobile, but I doubt it. Google has won the HTML platform search, which means that any web page that renders in a browser, including mobile browsers will still most easily be searched using Google. Search will not be all about HTML and browsers forever. The next web platform is where the innovator that beats Google will arise - the television. Specifically, the internet is coming to your TV, through devices like Tivo, Roku and the game consoles; through cable and satellite set top boxes; and through the TVs themselves. The TV UI does not automatically seem suited for browser based HTML documents. Rather the norm is likely to be a combination of transparent menus, scrolling tickers, sidebars, headers and footers. HTML pages may still be viewed as in the web, or there may be a completely new paradigm. This is where the Google competitor will have their day.

That said, Wolfram Alpha, does not index HTML web pages, it gathers, consolidates, organizes and displays information. So Blodget does not have this one precisely correct. While a Google competitor will not emerge in the HTML/Browser-verse, a better organizer of knowledge, that organizes information from multiple sources including web pages could. Wolfram Alpha is a step in that direction.

Is it News or is it Paper?

2009-05-04T08:09:00.000-07:00

Lively post this morning on Tech Crunch about the coming debut of paper sized e-readers, including a new Kindle, and whether these devices will save newspapers. Internet journalists have their long knives out more than ever for print journalists. It has become axiomatic in online media that the ink-stained wretch is a dinosaur and should slowly slink back to their caves to be done in once and for all by the irresistible force of evolution and the withering gale of creative destruction.

Ok, so lets take it from the top. News as printed on paper, updated no later then 2:00 AM, distributed in the morning, with no updates until the next day, and no reader comments until at least the next day can not compete with news as published to a web site, which can be updated in real time, distributed world-wide immediately with insightful commentary from readers available for addition mere moments after publication. Thus the argument continues, replacing paper with a portable screen, no matter what size can not save the newspaper. Whither then the news?

Instant news of course has been around for 80 years. Radio and TV did not kill the newspaper. The internet may indeed kill the newspaper but like radio and TV before it, it will not kill the value of reading information vs. viewing or hearing information. The gathering, editing and distribution of written information is still a viable economic good and public good. The vast scope of the web saturates us with information. It becomes commoditized and cheapened. We access it all at our fingertips and become our own editors, filtering the data and making editorial judgments as to the importance of one story over another. The editor who used to feed us the story is looking for work. Is this what we really want? Of course not. We still rely on journalists and editors to gather and filter the information for us. Who has time to do it all themselves? As the market for printed paper slides down to the long tail, the same forces that made the great newspaper and magazine brands prevail, will make winners out of many online news sources. The brands of The NY Times, The Washington Post, The Wall Street Journal, Time and Newsweek can continue to have value and even prevail without a paper publication, and eventually they will be able to get readers to pay for their online distribution. It may take the deaths of many competitors before it happens, but good journalism will find a price and then can still be sold - even on the internet.

The Three Goals of the Web

2009-05-01T08:31:00.000-07:00

With the internet economy clearly in only the strong survive mode, I think it is helpful to review the internet business model at its most basic. Those executing this plan well will make money and survive. Those executing it poorly will fail.

1) Get people to your site.

2) Keep people on your site.

3) Get paid for the people who visit.

The first two items require capital expenditure and labor in the form of ads, SEO, page design and content creation.

The revenues generated by #3 need to exceed the expenses incurred by #1 and #2 or you will fail. There are three ways to generate this revenue.

1) People buying something.

2) People leaving the site by a paid channel..

3) People watching something with an ad.

The third way is the hardest to achieve, but the most ideal in terms of revenue generation. If your content is so good that people will stay and view ads, advertisers may pay you regardless of the click action. This means you do not have to pepper the site with paid exits nor do you have to worry about surfing away. As long as people get to your site, you get paid regardless of whether they buy something or leave.. This model is the equivalent of TV advertising. Most internet sites don't harvest enough attention span to survive on this model. Sites with video content and the better magazine sites may be an exception.

The second way is the easiest to achieve, and the least ideal in terms of revenue vs. cost. If you can't make money by selling something and you can't make money just on ads viewed, then you need to make money whenever someone leaves your site. This means that they better not close their browser, enter a new address, or click a bookmark. They need to leave by clicking on your page. The eternal problem is that you can't get users to your page without some kind of quality unpaid content. Therefore you need to find the magic balance between paid and unpaid to make your site attractive and yet try to make sure that the bulk of the exits are paid. Search engines of all stripes use this model. The problem is the margins are so small and a small miscalculation in the mix of expenditure to attract people, the quality of the content and the paid exits will spell failure. The pure play here is the domain park. All click exits are paid and the cost of entry is buying a domain name that people will type or mistype into their browser off the top of their head. But domain parks suck and only pure arbitrageurs are really interested in that game.

The first way is just the old brick and mortar model. Build a better mousetrap, hire a better mousetrap marketing team, or sell all the best mousetraps in one place and people will pay you while they are on your site. The problem with this model is that the building and marketing require huge capital expenditures with high risk of failure. Selling other's products on the other hand is cheap to start but the revenues are only good at volume. The barriers to entry are so low that this business either gets diluted in the long tail or dominated by the volume players like Amazon. Companies that have overcome these obstacles and succeeded include Netflix and Zynga.

Making a little money on the internet is easy, making lots of money on the internet is hard and making money while creating something durable, beneficial and lasting is really hard. But first you have to remember the basics:

Get Them + Keep Them < Get Paid

Is Page Rank Part of a Nutritious, Well-Balanced Internet?

2009-03-23T08:20:00.000-07:00

An interesting post in the Insider, highlights an issue with Google that I believe will not go away. The rules behind Google's Page Rank are completely non-transparent and must be ferreted out by SEO deep-divers, who spend their careers trying to reverse engineer the page rank system. Where the rules are known, as the media companies are claiming, the SEO arbitrageurs and secondary content providers get precedence over paid content.

In a free market, Google would clearly be incentivized to adapt its product - search results - to the demands of the market. However, their effective monopoly means they do not have to respond to market demand. This is a thorny situation. I have spoken with some search experts who believe that an open Page Rank algorthim would destroy the internet and the highest ranked content for any subject would be the most precisely sculpted to meet the Page Rank rules and neither the most useful nor relevant. The most professional paid content with the biggest marketing budgets behind it, would then bubble up to the first page and the Wikipedias et al, would be relegated to the second tier. The fear is that the the fundamental openess, democracy and neutrality of the internet would be destroyed.

I do not wish to see the internet destroyed and the long tail of content remain perpetually in the margins. However, unless a big external disruptor arises soon, I do feel that that the time is coming when the all-powerful Page Rank will come under stricter scrutiny, especially given the current administration's predilection for transparency.

The Anti-Trust Clouds Gather Around Google

2009-02-18T09:04:00.000-08:00

I have been making predictions in private that Google is likely to come under Justice department scrutiny for anti-trust in the next year or two. Regardless of their intentions Google has achieved a de facto monopoly on search and search advertising and those with monopoly power generally are driven to use it. Even if they are not yet violating anti-trust laws, they are dictating the rules of the game for a massive sector of the economy. A couple of pieces this morning highlight the gathering clouds:

NY Times: Lawsuit Says Google Was Unfair To Rival Site - NYTimes.com
Bloomberg: Antitrust Pick Varney Saw Google as Next Microsoft

I don't believe in Google's guilt or innocence under Anti-trust Law at this point in time - just that there are red flags in their market position and behavior. Additionally one can argue that they are a "good" monopoly as ATT was seen to be in the mid-20th century. Nevertheless, we have a history of letting monopolies flourish in this country up until they start preventing innovation. With innovation cycles becoming faster and faster, Google and their shareholders should enjoy their dominance while they can.

Astonishingly Bad Best Buy Experience

2008-06-27T13:23:00.000-07:00

So I live in Colorado and have a data center in Northern Virginia. I need to upgrade a Dell server to 8 GB of memory in a hurry - overnight shipping won't do. Dell provides me with the exact Kingston memory part number I need. All I need to do is find a store near the data center that has it and I can get it delivered to the facility - by courier if necessary.

I call the Best Buy in Sterling. Press "3" to talk to a Sales Associate. Wait about 10 rings and get an answer. I explain that I need Kingston part number KTD-WS667/2G. He checks the system and says we are sold out - I have nothing here for KVR-WT....

No, I say that is KTD-WS667/2G. He says we just had a sale on it and I think we are sold out. No I can't find that part number in the system. We have nothing matching KLS-66 etc.

Hmmm, I say, you keep mentioning the wrong number, maybe you have a different number in your system or something - why don't you Google it so you can see which one I am talking about - I am looking at the Google results for it right here.

Ok, he says...Google returns nothing. Well, I'm looking at results here, I say. Maybe it's my Proxy he says, I'll try the Kingston site.

Cool, so I repeat the part number. That's K as in Ken, T as in Tony, D as in Dave, etc.

Well I can't find anything under WLR-KS67 at all, he says.

By now I am sure that either:

a) He is a complete moron.
b) He is completely f***ing with me.
c) I somehow got lost in Idiocracy.

I politely say, well I guess you don't have it, I'll try one of the other Best Buy stores.

So I call each of the closest Best Buy stores in turn pressing "3" to speak to an associate each time. No answer whatsoever. One just goes click after 20 rings and leaves me in oblivion. At this point, I am convinced that this guy is answering the phone for all the local stores and won't even pick up the 303 area code he sees coming in on Caller ID.

Wow. I'm speechless. But as this post attests, not wordless...

Extra, Extra! Future Wireless Technology Promises Amazing Mobile Speeds!

2008-05-12T06:23:00.000-07:00

This morning, the Denver Post picks up a Washington Post story and headlines - WiMax technology promises faster wireless service. Why is this important? The news about the Clearwire/Sprint/Intel/Google/Comcast/Time Warner/Bright House deal started its life last week in the Wall Street Journal and quickly moved to the tech blogs like GigaOm and TechCrunch. For the remainder of the week and through the weekend it bounced around the tech and policy blogs with everyone revising opinions and emphasizing different angles. On Monday morning it is now a headline in a big city daily, with the bulk of the tech and policy implications cleansed and the story promising users all the neat things they will be able to do within two years as the service rolls out.

Clearly, the fact that this story has such legs is a big win for the stakeholders. A few weeks ago, Sprint and Clearwire were getting the media raspberry for playing coy on the rollout of the then titled Xohm service at CTIA. LTE was all the news with ATT and Verizon promising LTE networks coming soon. Now with CTIA in the rearview mirror, WiMax is dominating the wireless news and garnering prominent mentions in the mainstream media. The goal for the WiMax Gang of Six of course, is to have people asking, "That's great, when can I get it?" That goal appears to be well on its way. While perhaps not the best technology available, WiMax now is off life support and breathing while LTE and other 4G tech is still riding around on Big Wheels. I'm guessing the gang planned their timing this way.

The Brick and Byte Play

2008-03-28T15:11:00.000-07:00

In comparison shopping land, we like to throw some big numbers around. Stuff like the market for online transactions reached $175 billion in 2007 and is expected to reach $335 billion by 2012. The shopping comparison game is simple - we provide a service that makes it easy for consumers to compare prices and decide where they want to buy. When they click through to the retailer after conducting the research on our site, they are more likely to buy from that retailer than the consumer who has not done the price research first, say by simply searching for the product in Google or Yahoo. The retailers gladly pay us back for sending these pre-qualified shoppers their direction and we earn our cut of the $175 billion.

How many of us, though, research online and purchase offline? Plenty according to an Accenture study. 67% in fact. In other words 2/3 of us are more likely to conduct research on sites like Pronto and then purchase the product in a retail store. So how to get a slice of that bigger pie and provide ever more useful searching for you? Start including local results in the search results.

Disclosure: I, of course, work for Pronto and yes, I know, local is the new global so we are not alone here. Dig around though, and see the future. Brick and mortar is becoming brick and byte.

Ways to Limit Free Speech on the Web by Promoting Free Speech

2008-03-03T07:50:00.000-08:00

Paul Kapustka formerly of GigaOm now with his own cutting blog, Sidecut Reports, has an excellent post up regarding some fake "news" created as a PR effort by internet providers to suggest that there is a grass roots movement against network neutrality on free speech grounds.

He was particularly bemused that mainstream media outlets picked up on it as news rather than the flogging it actually was. However, it is worth noting here that the free speech implications of the network neutrality debate are particularly pointed. At only one time in our history have we let our government restrict speech in public communications and that was for over the air broadcasting. In particular, the FCC believed that over the air broadcasting a) was in the public interest to promote and b) utilized a scarce resource (wireless spectrum). As such, they believed that they had to create strict rules on what broadcasters could and could not say in order to ensure that the scarce airwaves were used to their maximum public benefit. Without the scarcity of the airwaves, all things that wanted to get published to the airwaves, in theory, would have been.

Those who argue that P2P file sharing creates scarcity on the internet and thus limits the freedom of speech are playing right into the public interest/scarcity trap that gave the FCC the right to regulate speech in the 1940s to the present day. And that, my friends, would be killing the goose that laid the golden egg.

Network Solutions Wants to Make Sure that Nothing Unfortunate Happens to Your Domain

2008-02-28T15:42:00.000-08:00

Network Solutions has hit on an ingenious business strategy. If you ask them if a domain name is available and it is, they'll hold it for 4 days so you can only purchase it from them. No need for any pesky shopping around - you can't. If you want it, you need to fork over $34 instead of cruising over to GoDaddy or some other site and paying $10.

They say this practice combats folks who capitalize on Domain Name Front Running or finding lists of domains that were recently queried and buying them in advance, so they can extract a higher cost in resale. In an extraordinary act of Chutzpah, Network Solutions insists that its practice prevents such front running by keeping a customer's recent query from being purchased by another party who could then charge them a premium or otherwise keep them from purchasing the name.

Now correct me if I'm wrong, people, but Network Solutions is holding the name so that they can charge a premium over other providers. That is the definition of Domain Name Front Running. Thank goodness they are protecting me from the bad guys.

Not surprisingly, I'm not the only one who's noticed and they are subject to a class action suit. Now to wait four days to register our wedding site with GoDaddy. Glad I didn't just order all the Save the Date cards with the domain name printed on them after checking first on Network Solutions to see if it was available or anything and then getting the bright idea to shop somewhere else. Really that would have been quite foolish.

All Along It Really Has Been All About the Eyeballs

2008-02-21T12:40:00.000-08:00

When I moved from working in the internet B2B space to the internet B2C space in the summer of 2006, I quickly grasped what I had only partially comprehended previously - that the "free" consumer internet economy is entirely based on people clicking through sponsored search listings, banner ads and other paid placements. I quickly concluded that were two types of people in the world - those that clicked on sponsored listings and those that didn't. Recent market research directly illustrates that point. 6% of internet users generate 50% of the ad clicks. Furthermore, those clickers constitute the demographic least likely to complete an online purchase.

The more finally honed this research becomes over time, the more internet advertisers will learn that the inputs don't equal the outputs in the click ad model. In fact, the whole business is much like the greater fool theory in which the existing players profit off the willingness of new players to enter and profit themselves. If ever, new entrants start to decline or find new and inventive ways to drive traffic to their sites and capitalize on their presence, then the click market as a whole will begin to dry up and the master click arbitrager at the top will need to innovate or die.

All this brings me to the idea of internet advertising as a whole and its relationship to television advertising. Why has television advertising been wildly successful and internet advertising not so much as reported above? For instance, an advertiser will pay a lot more for 30 seconds on network television, while relying on old fashioned methods to determine the impact they've had on the viewer and the subsequent return on investment, where as web ads come a lot cheaper but offer far more information regarding their actual utility to the advertiser. What web advertisers are coming to realize as television advertisers did as well generations ago is that it is all about the eyeballs after all, which is of course what we all said at the dawn of the internet anyway. As clicks come to be devalued as junk, the cost of spot based advertising will rise. Thus companies with something to sell online will compete to have their ads displayed in as many prominent locations on the web as possible and not be nearly as concerned as making sure that the click through is monetized. In fact, they may not even pay for the click at all.

Spot based advertising on the web of course has a much higher value than it does in old media, as we know so much more about you from the scripts running on the site while you are there. The effectiveness of the campaign will be far more easy to characterize for the advertiser then it ever was on TV. And as old and new media inevitably converge, web ads are becoming more and more like their television predecessors. The circle is complete.

Smokin' Third Pipe

2008-02-08T09:33:00.000-08:00

GigaOm reports today that Stelera Wireless is offering high speed rural broadband services over the AWS-1 spectrum it picked up at auction in 2006.

Rural Texas Gets Superfast Wireless Broadband - GigaOM

Stelera currently owns all the AWS-1 rural licenses here in Colorado, so we are particularly interested to see how their rollout progresses. The success of offerings such as these will go a long way toward delivering the long promised third broadband pipe.

Stick a Fork in the 700 MHz C Block Bidding

2008-02-05T12:36:00.000-08:00

It looks like the bidding for the national C Block is complete and the regional bidders have won. Round 34 is complete and no new bids were entered for any of the crucial regions encompassing the 50 states since round 30 meaning that any bidders three waivers were used up. Whether one bidder won them all or they were split is unknown, but the Open Access rules for which Google and others heavily lobbied will go into effect as the block did crest its 4.6 billion dollar minimum.

There is a small chance given the complex auction rules that another bidder in the A or B blocks has bid enough since round 30 to qualify to enter another bid for one of the C Block regions but that possibility seems far fetched. Saul Hansell of the NY Times Bits Blog, Erick Schonfeld of TechCrunch and Tim Farrar of TMF Associates have all offered expert analysis leading up to this point.

700 MHz Auction Drama

2008-01-30T19:59:00.000-08:00

Saul Hansell of the NY Times Bits Technology Blog offers an insightful take on the current status of the 700 MHz auction - Spectrum Auction Teeters on the Brink of Success - Bits - Technology - New York Times Blog. Someone is sitting on a 4.3 billion dollar bid for the nationwide C Block and they need to bid tomorrow or they risk being out of the auction. If the total doesn't hit 4.6 billion by the end of the auction, then the FCC will have to re-auction this block off in the future.

73 Bids Sail Out

2008-01-24T15:55:00.000-08:00

FCC auction #73 for the 700 MHz Spectrum to be vacated by the broadcasters in 2009 opened today. The days two opening rounds of bids netted 2.4 billion of an estimated 10 billion bound for the US Treasury. Notably, there was a 472 million dollar bid on the D Block, which any provider must give over to the government for use as public safety frequency during an emergency. With Frontline Wireless bowing out, many had speculated that this spectrum would go unbid.

The largest bid of the day was over 1 billion for 8 combined areas of the C Block covering all 50 states. Google led a coalition of organizations who lobbied for open device access in this band. The auction could last weeks. Stay tuned for further updates.

Ask.com Promises Not to Tell

2007-12-11T05:59:00.000-08:00

I found this NY Times headline interesting this morning partially because it arrived so late in the game.

Ask.com Puts a Bet on Privacy - New York Times

Why shouldn't privacy be a market differentiator? Why did it take so long for someone to market it? Lately Ask (disclosure, I work for a separate IAC business) has been trying the spaghetti approach to marketing, throwing it up against the wall and seeing what sticks. My feeling is that they have done a nice job with their marketing. Even the tremendous failure of the "algorithm" campaign got them headlines proving the old adage that there's no such thing as bad publicity. I think privacy is good tool to pull out of the box out this point in time. On the heels of the Facebook beacon fiasco and growing legislative and regulatory scrutiny privacy is in the game.

Internet consumers may start to realize that they transact in their privacy every day. Every time I perform a Google search, I am selling a bit of my privacy on the market in exchange for the information that Google provides. In effect, Ask is telling us they are going to charge us less for each search. If they can get this point across to enough of the marketplace then they may get another few points of market share.

Google Asks "Who's Going to Win the Spectrum Auction?" Could it Be...the US Treasury.

2007-11-30T08:45:00.000-08:00

It's official. Google is in.

Official Google Blog: Who's going to win the spectrum auction? Consumers.

Google would like to be your telco. Well its not actually clear what they want to do, but if they do succeed in winning their chosen swaths of Spectrum in the 700 MHz auction, they will be able to offer an array of mobile services that could easily googleize our mobile existence to the same extent or more that our static web existence has. A tremendous opportunity that we will have to wait until 2009 to see.

In his post Chris Sacca points out that the big winner in all this is the consumer. A mantra that Google has been repeating over and over again during their push for open access and one that the FCC certainly doesn't mind hearing. Remember they are charged with acting in the "public interest." The biggest winner from Google joining the game, though, is of course the US Treasury. With Google's giant coffers, they can drive up the price on lots they don't buy and competitors can drive up the price on the lots that they do. As we know so well, Google does no evil, so there's no way they would kick up the price on certain lots out of spite or competitive zeal. Nevertheless, their big stake can have the effect of driving prices up in lots where they do compete.

It's official. The FCC gave concessions to Google on open access and the ROI is on the way.

M2Z Offers Free Horses, FCC Nixes

2007-09-13T06:50:00.000-07:00

Infoworld reports that M2Z Networks, the startup co-founded by John Muleta, the former head of the FCC's Wireless Bureau is prepared to sue after the FCC turned down it's request for 20 MHz of currently fallow spectrum. The spectrum between 2155MHz and 2175MHz was to be used to provide free wireless broadband at speeds of 384Kbps downstream and 128Kbps up. In today's broadband marketplace, these speeds are roughly the equivalent of riding a horse compared to driving a car.

Startup may sue FCC over handling of wireless plan

Muleta appears to have read his FCC history when he offered free universal service for broadband with voluntary censorship of inappropriate content if the FCC would provide the necessary spectrum in exchange for 5% of revenue being deposited in the US treasury. In the past such an offer might have been a slam dunk or at least a bank shot of the backboard. The FCC has long used their mission to protect the "public interest" as a means to get concessions from license holders, without ever having to explicitly dictate terms. Free, Universal Service, "Family Friendly", wireless and broadband is surely a litany of desirable goals for the FCC, so why the foot dragging?

First, as I've mentioned previously, the success of the 700 MHz auction will be Chairman Martin's legacy. Until this auction is in the books, the Chairman has no desire to offer an alternate means of spectrum allocation. Approving the M2Z deal would devalue the spectrum being sold in January.

Second, as Sascha Meinrath of the New America Foundation points out, 384 Kbps down and 128 Kbps up is not really a broadband service by today's standards. Certainly, folks with a mule would take a horse for free, even if you could only ride the horse certain places, but the car industry might have something to say. When current technologies can provide faster wireless broadband, what is in the public interest about licensing an inefficient service?

The Nobility of Mobility

2007-09-12T07:47:00.000-07:00

Arrington posts on TechCrunch regarding some companies and applications making a go of the Mobile Social Networking space.

The Holy Grail For Mobile Social Networks

He correctly identifies what he calls the "chicken and egg problem" with regard mobile applications - a critical mass of users is required for any one user to find any utility. Of course, economists frame this situation in the theory of network effects and Metcalfe's law. A telecommunications network's value is proportional to the square of the number of users.

The goal for any entrant into this space should be to ensure they have enough users so that their usage reaches a tipping point. The best way to acheive a critical user mass for tipping is to ensure that your application is bundled with an existing mobile provider's product. We are also very likely to see vertical integration of mobile social networking apps from Apple and Microsoft and Google as well if they enter the service provider space through the 700 MHz Auction.

On the Stalled M2Z Spectrum Giveaway

2007-08-16T06:12:00.000-07:00

Om posts today on the scuffle surrounding the dormant M2Z Networks proposal for the FCC to give it 20 MHz of unused spectrum, with which M2Z will build a nationwide wireless broadband network. The network will be managed as a wholesale entity and in exchange for the commission's largesse, M2Z will give 5% of its gross revenue to the US treasury. It has also promised out of the gate to adhere to strict decency standards - a premise that plays in some respect to the FCC but also against the thus far intact stance on network neutrality.

GigaOM M2Z Networks Sticks It To The Martin Man �

I suspect that the commission's "inactivity" is directly related to the upcoming 700 MHz auction. Having already introduced an amount of innovation to the auction process going against ATT and Verizon, and given that the auction finally monetizes a swath that was largely given away as a boondoggle, I doubt that Chairman Martin is eager to hand over 20 MHz to a former FCC official throwing more mud in the eye of ATT and Verizon all for some unspecified future return. To act on this one way or another is about as nice as picking up a sharp stick and poking oneself repeatedly in the eye.

Google Follows The Golden Rule

2007-07-20T12:39:00.000-07:00

I was chatting with my father this morning about the upcoming spectrum auction and how the potential "open-access" rule marks a bit of a departure for the FCC with regard to their treatment of the big telcos thus far. My father, as keen and jaded a political observer as you will find, commented that these sorts of things usually come down to "The Golden Rule" as in "He who has the gold makes the rules." Prescient as always. The fact that Google was willing to open its coffers to ensure that the open access rules were met appeared later in the day. Here is OM's always insightful take on the news:

GigaOM Google will bid for Wireless Spectrum �

Pocket Dialing - Mind Your P's and Q's

2007-07-13T08:05:00.000-07:00

I have noticed that my Blackberry 8830 has a proclivity for Pocket Dialing - a phenomenon for which I just learned the name:

Pocket Dialing - Wikipedia, the free encyclopedia

The P and Q keys are the most commonly pressed which pulls up contacts beginning with one of those letters. This morning it accidentally dialed a sales contact in my address book and we ended up discussing potential firewall solutions that his firm is offering.

Lesson for sales people - change your name to Pamela or Quentin.

The 700 Club - Members Only

2007-07-12T09:47:00.000-07:00

So GigaOm reports that Verizon is opposed to the "Google Block's" recommendations for the 700 Mhz auction rules. Big surprise.

GigaOM Verizon: Play fair in wireless auctions, as long as VZ wins �

I think it is very likely that this upcoming auction will be the defining moment for the current regulatory regime. The opportunity exists to set standards for the next decade. As the date approaches things will only get more interesting. Keep your eyes and ears open...

Tailgate Party

2007-07-12T09:22:00.000-07:00

So TechCrunch highlighted this new product today:

Tailgate: Fully Transactional Web 2.0 Banners

One of those lightbulbs went off in my head - "Why didn't I think of this..." Really slick way to embed ads that I can interact with in another page. I hate advertising, of course, but if I was reading about Bob Dylan's latest tour on a news site and an ad appeared allowing me to buy tix to Red Rocks without leaving the page, that would be a useful service, indeed.

Failing Grades for Interoperability from the DHS

2007-01-23T15:26:00.000-08:00

The Department of Homeland Security's Tactical Interoperabilty assessment can be found here: http://www.dhs.gov/xprepresp/gc_1167770109789.shtm.

The report found deficiencies in all but 6 of 75 of major urban areas surveyed with the Denver Metro area ranking near the bottom. It seems like there is a huge opportunity for the adoption of SDR and CR systems to plug the gaps.

How Would You Describe a Web Browser to a Martian?

2005-10-24T19:54:00.000-07:00

Seeing as how we can all get very excited, very quickly about Web 2.0, AJAX, Mash-ups, Social Applications, etc., it is wise every so often to step back and brew up a couple of rain clouds in order to see what happens to the parade. Try out this little thought experiment, for instance.

Q: How would you describe a Web Browser to a Martian? Assume the Martian can speak English and has a rudimentary knowledge of computing.

A: A web browser is a tool that displays text and image files stored on a computer, typically at a location remote from the viewer, on a "web" page. It uses a descriptive language called HTML to position the images on the page and to format the text in a variety of ways such as size, color and location. It also recognizes a light-weight software language called JavaScript that can be used to manipulate the text and images on the page in ways that a simple descriptive language like HTML can not, for example finding the sum of a list of numbers on the page. A third native language called CSS is used to place the formatting instructions for HTML into a centralized location allowing them to be reused for many different pages stored in the same location on the remote computer. Browsers may be enhanced by fitting them with additional modules that allow them to do more than read HTML, JavaScript and CSS. These modules may be manipulated to create a more interactive experience for the user and the content on the page. One of the most common of these modules is called Flash which is frequently utilized to embed games and movies on the page. Another very common module is called Java. Java is a more heavyweight program as it is an entirely separate operating system running on top of the one your computer has, of which the part that the browser uses is relatively small. Java has been used to create applications that communicate directly with a remote computer in order to allow the text and images on a page to change as the changes happen, without the need to use HTML, JavaScript or CSS to display them.

Now ask yourself if you were building a new internet application that was going to replace a common desktop application, say a spreadsheet, and the Web Browser had not yet been invented, would your final product resemble the tool described above.

Should we be concerned about creating new applications for the Web and the Web Browser when the Web and the Web Browser may not be the best tool for our applications? Will the real Web 2.0 killer app be the replacement for IE, Firefox and the rest?

Netflix - Your Broadband Content Provider

2005-10-12T08:43:00.000-07:00

Newsweek wonders if Neflix has what it takes to survive with the coming of the "Broadband Age." The answer, as always, is who knows. Here is their take on the Netflix story:

As a tech company, Netflix was a contrarian play. Even at the height of the dot-com boom, when Silicon Valley buzzed with the promise of "transformative technologies" and "fat pipes" that would allow consumers to quickly download all manner of content, Hastings built Netflix on two disarmingly retro technologies: the DVD and the United States Postal Service. For a monthly subscription fee averaging $17.99, consumers would be treated to an unlimited number of rented DVDs, most delivered within a day of being ordered online. "People were talking about beaming movies to wristwatches," [Reed] Hastings says. "We tried not to get drunk on the future, but actually to predict it accurately."

While they continue on in the article to write about how eventually the current content distributors will be able to control what you receive and they imply that the Long Tail customers will get shut out unless Netflix evolves to meet these challenges, they miss a fundamental point in Netflix's story only hinted at above.

Netflix has already always been about selecting and downloading movies online. You choose a movie online and "download" it to your mailbox. Given even a nice moderately fast 2 Mbps connection and an equivalent upstream connection, an 8 GB DVD would take 10 hours to download - hardly a practical improvement over next day delivery. What if you order three 8 GB movies at 12:00 PM and they arrive at 12:00 PM the next day? You would have received 24 GB in 24 Hours or roughly 2.4 Mbps. This is a typical DSL or Cable Modem speed given today's technology.

The conclusion here is that Netflix is already a Broadband Service Provider. At what point will home broadband speeds, digital compression technologies, upstream bandwidth availability and on-demand streaming technologies evolve to the point where next day delivery can finally be beaten? Again, who knows, but my guess is quite a while and by then Netflix has as good or better a chance as anyone of leveraging these new technolologies to deliver the same service they do today.

More on Sun/Google from Gartner

2005-10-11T11:54:00.000-07:00

Gartner presents a quick topical analysis of the Sun/Google partnership along with a few plugs for some other AJAX apps. Interestingly, Gartner sees an 80% probability that IT Departments will begin to adopt these lightweight web-based apps to supplement or replace existing tools by late 2006.

Barbarians at the Gates?

2005-10-11T05:48:00.000-07:00

Microsoft is publicly responding to the Google/Sun deal with typical confidence, stating that the Office suite is not threatened by OpenOffice and that they don't envision future web-based Office software (neither does Google, evidently). Microsoft believes that with enhancements to its CRM and Office applications, it can integrate current web-based services such as AOL Instant Messenger with its own products and by adding collaborative features such as Groove to Office, it will be able to keep the focus on the desktop. Perhaps this is still where the smart money lies, however, there are several reasons why this may yet tip in favor of a combination of Open standards and web services.

Microsoft claims that they have always competed with OpenOffice. Sure they have. In the game space of the technorati and the innovators, certainly, but when US State governments get behind the Open document movement what does that tell us?

OpenOffice and StarOffice are maturing applications that are starting to create a buzz outside of innovation circles, compared to MS Office which as a mature application is more lumbering having accumulated many different features stapled on by different design teams over the last two decades.

Those who have worked with OpenOffice and StarOffice, and perhaps businesses in countries and industries that have not been dominated by Microsoft might say these applications are far past the early adopter phase but for most business users MS Office has been the rule of thumb since at least 1995. During this cycle, the late majority has become more technically savvy and some will have less trepidation about joining the early adopters, at least in applications that they completely understand - email, documents, spreadsheets, and presentations.

Standards organizations are beating the drum louder and louder for de jure rather than de facto document standards.

Five years ago, even three years ago, would there have even been a discussion about Microsofts dominance in the business application space?

Much more to come...

AJAX Office

2005-10-05T08:43:00.000-07:00

I can't go five minutes without stumbling across a post somewhere about AJAX.

What is it?

2005-10-04T06:02:00.000-07:00

Web 2.0 that is. I have to agree with O'Reilly's point that Web 2.0 sounds like a marketing buzzword being used by a lot of companies to describe their wares without really knowing what it means. Since he helped coin the term he has an idea of what it means and he shares it here.

I am working on a paper for an interdisciplinary law and technology class at CU that will focus on Web 2.0, its origins, the core technologies that power it, and its prospects for the future. I hope to be able to offer a scholarly look at the Web 2.0 phenomenon to complement the hype.

Life of O'Reilly

2005-10-02T02:21:00.000-07:00

More about Web 2.0 and the "architecture of participation." After reading this piece, maybe you'll think that Tim O'Reilly is a little out there. Maybe you already did. I can't argue too much with someone who has built a high tech empire on paperback books with woodcut animal characters on the front. It is a testament to the "O'Reilly Standard" that a software/networking/database/programming technology might as well not exist until it has an O'Reilly published about it. For what it's worth, I had the phrase "The Internet is the Operating System" bouncing around in my head for a long time before I found someone who attributed it to O'Reilly.

Overview of AJAX Apps

2005-09-29T06:03:00.000-07:00

This ZDNET article is a good overview of some AJAX office applications currently availble and coming soon. I haven't had the opportunity to test any of them out yet, but as I do there will be more posts on the way.

SkypeBay

2005-09-27T07:10:00.000-07:00

Steven Levy from Newsweek checks in with his take on the eBay purchase of Skype. He claims that the purchase validates the idea that the internet is soon to contain all sorts of embedded voice applications. What he doesn't say is that this purchase might mean something more - an acknowledgement by eBay that an online garage sale isn't the killer app to keep moving this company forward.

Google TV

2005-09-27T06:24:00.000-07:00

Check it out.

Google is broadcasting the new Chris Rock UPN show, Everybody Hates Chris via "streamcast" over the next four days. The shots over the bow of old fashined television are increasing rapidly.

37 Signals

2005-08-10T08:24:00.000-07:00

Salon's technology writer, Farhad Manjoo, has a very good overview today of Chicago software company, 37 Signals.

In recent weeks, I've been talking to many clever people who are using creative programming techniques to build a better World Wide Web. The online experience they envision is more responsive than the Web we use today, and it's more useful and fun, too. On this better Web, you can drag and drop items to rearrange them, see a search box fill up while you type a query, and prompt an action as soon as you press a button. The model works, in other words, as intuitively as the best software in our lives. You've likely seen bits of it already. These new techniques power Gmail, Google's fine Web e-mail system, allow you to drag maps in Google Maps, annotate pictures in Flickr, and use your mouse to reorder your movie queue in Netflix.

In addition to better software, I discovered something else about the new Web: Creativity is back. The idea that the Web is a giant get-rich-quick vehicle no longer pervades the business. Instead, recalling the mid-1990s, a host of truly talented people are looking at the Web as a canvas for their creativity. And there's one small company that's emblematic of this effort to build better applications, and, indeed, is pioneering an entire business philosophy designed to make the Web great. The firm is called 37 Signals, and if you've never heard of it, don't worry. You're likely to start using its software any day now.