Technology Futures

A New York Times article (registration required) talks about the growth in the worldwide market for ringtones (alternate ring sounds for mobile phones).

Most new cellphones have the ability to download alternate ringtones, which typically sell for $2-3 each. I've never understood the appeal of them--it's a phone, for crying out loud--all I want to know is that it is ringing. I don't need a long, noisy dirge to let me know that.

Nonetheless, I'm clearly a curmudgeon when it comes to this particular little piece of IT gadgetry. Worldwide, ringtones are now a $3 billion dollar market, and growing fast as more phones are bought with this capability. In a small bit of good news, perhaps Americans are a bit more sane than the rest of the world when it comes to this stuff, as the U.S. market for ringtones lags behind Europe and Asia.

The ringtone industry is in a major lather right now because the newest cellphones have polyphonic capability (meaning they can play snippets of real songs, rather than a tinny melody of the song). The music industry is gearing up to license huge chunks of their music archives as ringtones, including some downright foul and/or insulting recordings.

There is a larger issue behind all this. Who could have predicted even three years ago that a major, multi-billion dollar market would have emerged around ringtones? As dumb as they may be, the ringtone industry is creating jobs and revenue streams across whole industries.

It's creative destruction at work. Yes, some of our factory and low level office jobs are being outsourced to low wage countries. But whole new industries are replacing them. Would you rather work in the music industry as a ringtone and license manager or work in a satellite TV call center making cold calls? Which kind of job would be better for your region?

Trying to preserve the jobs and economic development strategies of the past is an exercise in futility. Communities need to be looking ahead, and planning in a futures context, instead of the context of what worked well in 1970.

If you use Windows, here is some scary information for you. Wired reports on a study that shows an unprotected Windows computer becomes infected with some kind of malignant virus or malware just 20 minutes after being connected to a broadband connection (e.g. cable modem or DSL).

Wired wryly notes that that is not even enough time to download a typical set of patches from Microsoft.

Design Nine outgrew our old office space, and over the past week we moved into new, larger quarters--we're still in Blacksburg, Virginia, though.

I had to completely disassemble my desktop computer, something I have not had to do in over two years, when this machine was brand new. I ended up with a box of some 30+ cables for a computer and office phone, which on the face of it seems absurd for an otherwise entirely straightforward desktop machine used primarily for email and writing. In part, much of the problem has been the extraordinary success of the USB protocol as a peripheral connectivity solution.

In the "old" days, about three years ago, you typically had a couple of serial ports and two or three SCSI devices. You had a limited number of peripherals you could have hooked up at one time, and your ambitions for connected gagdets was low.

With the advent of USB, you could stick a hub on and fill it with as many things as you liked, and they would all actually work very well (most of the time). I have a seven port USB hub, and six ports are in use. Combine those USB cables with phone cables, Firewire cables, and power cables for all the devices, and you end up with a mess. It is incredibly ugly, difficult if not impossible to keep neat, and amazing that it works at all.

Firewire, in theory, should solve many of these problems. Firewire devices can be daisy-chained, so you don't have the multiple cable problem of USB, and Firewire is capable of providing more power than USB, so you can actually eliminate the AC/DC voltage converters entirely. Apple's iPod is a perfect example of this. You connect the iPod to your laptop or desktop with a single, thin Firewire cable that recharges the battery and transfers data several times faster than USB.

But Firewire has yet to reach its potential. Many PCs still do not come with Firewire (it's standard on all Macs), and even on the Mac, it does not always work as expected. My Firewire video camera (no power cable, thank you) does not get along with my Firewire hard drive (big AC power cable), and I have to unplug the camera when I back up files to the external Firewire hard drive.

Millions of people now have Paypal accounts, online access to bank accounts, and other online access to financial transactions, typically protected only by the passwords they pick themselves.

If you are still using your dog's name or some other simple four or five letter word for your password, you may want to read this short article on the various ways bad people are using to steal passwords.

An article from the July 19th issue of Newsweek talks about recent studies that indicate young adults (between 18 and 34) are now reading less than any other group. Even worse, this used to be the group that read the most.

Even worse, instead of reading, this group has become largely "passive consumers of electronic entertainment." Video games, entertainment Web sites, and TV are taking the place of exercising our brains.

Telstra, the Australian phone company, is putting WiFi hotspots in phone booths.

It's a good idea. The phone booths are underused, with so many cellphones now in use. The booths are already in public places where people tend to gather, and they have the one thing that often makes placing a hotspot costly--a wired connection. Telstra can use the existing cable to deliver a DSL line to the WiFi equipment in the booth, and the booth itself can be used to mount an antenna.

Congressman Rick Boucher (D, Virginia) represents southwest Virginia, including Blacksburg. Boucher is guest-hosting law professor Lawrence Lessig's blog this week, and there is a cogent and fascinating discussion of the Induce Act. The Induce Act would build on the already questionable DCMA law to make it more difficult (in theory) to pirate digital media.

CNet writes about the next potential spam horror--voice mail spam sent to your Voice over IP telephone. VoIP phones have an IP address, just like your computer, and spammers will probably figure out a way to send spam right to your phone.

Indium sounds like one of those made up compounds, like Intel's "Itanium" or Volkswagen's "Turbonium." but indium is a little known metal that is essential to the manufacture of LCD panels. The Wall Street Journal reports on a potential shortage of the transparent, conductive metal. It's refined from the tailings of commodity metals like zinc and lead.

USA Today (Monday) has a front page article (Business section) on AT&T and its decision to get out of the consumer market for local and long distance services. Opinions are mixed on the wisdom of this approach, but the company does not really have much choice. With the FCC decision to allow the regional Bells to charge whatever they like for wholesale access to their infrastructure, AT&T could no longer profitably offer local dial tone service.

As I've said before, I think that the FCC made the right decision. If the Bells are expected to compete with unregulated companies (e.g. the cable and WiFI firms), it does not make sense to hobble them by requiring them to sell their own network to competitors below market rates. It is no coincidence that since that ruling a few months ago that the regional Bells have begun to announce FTTP (Fiber To The Premises) projects--they finally know they can make money doing so.

Buried in the article is a one line reference to the "Cable-Phone Wars." One reason the phone companies have finally jumped on the fiber bandwagon is that the cable companies have captured a large part of the broadband customer base by investing early. DSL is now selling in most of the country for about $15 less than cable service because the phone companies have to do something to get customers back--like actually compete on price and service. Horror stories abound, but generally, the cable companies, which tend to have more local offices and real service people working for them, seem to be winning the service battle.

The phone companies, in a better late than never strategy, are winning the price war right now. This is all good for consumers, up to a point. Quality of Service (QoS) is still shaky for both cable and DSL. Both are copper-based legacy systems that were never designed to deliver high speed data to homes and small businesses. Fiber and wireless can deliver data much better, but can't always provide the content (e.g. cable TV) and/or some services (like dialtone)--yet.

Information Week has an interesting article about SBC and Verizon. The two big phone companies are selling off their rural landlines to raise cash to run fiber to their higher density urban and suburban customers.

So instead of complaining about your local phone company, buy them out! The neat thing here is that if you buy out the lines, the customers come with them, so you have instant cash flow. Here's the business plan:

I'll be on vacation through August 9th, and updates may be light. Have a great week!

CNet has a terrific article on community broadband and the policy issues surrounding community development of telecom infrastructure. It's a must-read article; it's long but provides an excellent overview of community telecom landscape, including the benefits communities are seeing, the anti-competitive opposition from the big companies, and the lackluster support for these initiatives at the Federal level.

The EETimes has an interesting article on how U.S. cellular providers are choking off innovation and profits in the electronics industry. As I have long predicted, cellphones are absorbing the features of standalone gadgets like PDAs; PDA sales have been flat for some time. One of the hottest "gotta have" gadgets is the Palm Treo 600, which is a cellphone with the Palm PDA built in.

So what's the problem? Fewer things (and fewer chargers) to lug around sounds good, right? Not when you can't buy any of the new gadgets on the open market. Try buying JUST a Treo 600. You can't do it. You have to buy a cellphone plan with it; when you do so, you get a discount off the "Manufacturers Suggested Retail Price" (MSRP), which we all know means nothing in an open market.

By tying cellphones to service plans, the cellular companies have created an odd kind of monopoly, in which they have captured and now control the marketplace for handheld consumer devices. The EETimes article discusses the potential impact on the digital camera market--as cellphones get megapixel cameras built in, the digital camera marketplace will disappear. Not only that, consumers lose choice and competition, which keeps prices low. MP3 players are another threatened market; by adding extra memory, cellphones become music players, and the MP3 marketplace disappears.

Consumers are already losing in this situation, and it will only get much, much worse. Bundling, which is what the cellular providers have been doing, is a classic strategy for locking a marketplace up and creating a monopoly. In effect, gadgets like the MP3 player and the digital camera become free, in the sense that the real cost is hidden in the cellphone service contract. And the cellphone companies are now demanding two year renewals on service contract, making it harder and harder to switch.

Microsoft destroyed the market for Web browsers in exactly the same way. Internet Explorer, by giving it away, wrecked the market for every other company. But Internet Explorer is not really free; Microsoft bundles the cost of IE into the cost of Windows--you pay for IE whether you use it or not.

A Ziff-Davis news article chronicles a series of new broadband projects and applications using broadband, and calls broadband a "necessity."

I reported here last week on new data that shows that broadband is now in about 30-35% of American homes. The new study was widely reported in the media, and Anthony Townsend, who is doing an extended study in South Korea on the social and economic impacts of broadband in the country, reports that the news "...made my Korean friends laugh at how far behind the US is."

There are still plenty of community leaders and elected officials who are not taking broadband seriously. Bluntly put, it's a critical economic development issue. Ignore it at your peril.

This article that summarizes recent growth in broadband use in the U.S. is a must read for economic developers. If your community is behind in broadband use compared to the general population, you have a serious problem that demands immediate and continuous attention.

I'm always amazed at how badly some Web sites perform. Here are two examples I found yesterday.

I visited the site of a national architecture/design firm that is well known. I could overlook the annoying Flash animation on the home page that made it virtually impossible to read anything (a product of the MTV generation, undoubtly, who believe that any image that remains on a screen for than ten seconds is "old fashioned"). But within two clicks, I found myself on a page that informed me that I was using an "antique" browser and that I needed to immediately upgrade to Explorer 6.0. Yes, the one that CERT, the national Internet security folks have said is a serious hazard that should not be used. It is supremely arrogant for a company to ridicule potential customers by telling them they have "antique" browsers (I was using the latest version of FireFox, which was released about three weeks ago--hardly "antique"). It costs almost nothing to design a Web site that works well on a variety of browsers. It is intellectually lazy not to do so, and from a business perspective, just plain foolish.

But wait--it gets better. This national firm also has a Web design division. When I clicked on that link, I was taken to the home page of one of these firms that buys up domain names and sits on them. Huh? You want me to hire you to do Web design but your own Web site link doesn't work? I'll pass on that.

We're moving a few blocks away next month, and I decided to see if I could DSL from Verizon. Verizon has finally adopted the strategy of most of the other phone companies, which is to price DSL at $30 to compete with the cable companies' Internet service, which tends to run $10-$15 more. I quickly got to a page that told me to enter my area code and phone number, and in a "few moments" it would tell me if I could get DSL service. I waited a "few moments," staring at a little blinking animation that was supposed to tell me something was happening. I gave up and went on to other work, but left the browser window open. About an hour later, I checked back....still blinking, still no indication of whether or not I could get DSL at the new house. Hmmm...think I'll stick with cable modem service a while longer.

In a widely reported story, Apple's iPod will be given to all Duke University freshman this fall.

The handheld computers will be loaded with course materials, lecture notes, and other university-related materials. While at Virginia Tech, I was involved with freshman orientation (providing information on university computers and networks), and I can tell you the incoming students get an enormous stack of paper, most of which is probably never read.

We just rented a beach house for a week, and the contract had a list of amenities. To my surprise, broadband Internet access, a computer, and WiFi comes with what is a very moderately priced beach rental.

It's one more signal that your region, to be competitive in the global economy, needs to be working with your local hospitality, recreation, and travel businesses to make sure they understand this is what travelers want and expect.