Technology Futures

USA Today has an unintentionally funny article (page 3B) about Microsoft's "maniacally focused" effort to provide converged instant messaging, email, and voice communications on the Windows platform. The writer apparently fell hook, line, and sinker for Microsoft's PR flack about breakthroughs.

Millions of people have been using converged IM, email, voice, AND video communications for more than a year--it's called iChatAV, and Apple provides it for free on every Mac.

The blogging community is abuzz with the latest threat to writing and journalism on the Web. There is a move afoot to extend the controversial 2002 Federal campaign laws to bloggers writing about politics. At this point, I don't know enough about the law itself to do much more than merely mention the controversy as an example of how the Law of Unintended Consequences continues to work in the age of the Internet.

According to most reports that I have seen, the Heartland Institute is an "astroturf" organization (the term refers to a group that has a hidden agenda--in other words, it's appearance is fake, like Astroturf).

Add Texas to the list of states that has some legislators who want to keep communities from managing their own economic future. This article documents the very successful WiFi project led by technology visionary Will Reed, and the legislators who apparently think "free" broadband somehow subverts capitalism.

One of the big flaws in the whole telecom debate is a chronic focus on the past. The telecom companies and the FCC both tend to rely on looking backward, and by extension, it's a problem at the state level because the incumbent providers have been much better at getting their message to state legislators than purchasers of telecom services.

Here's a concrete example of what I mean. The Times-Picayune has a story today on the fast-growing "iPod Economy," which is the exploding market for iPod accessories. According to one researcher, iPod owners spend half as much as the cost of their iPod on accessories. With most iPods selling for between $200 and $300, that's a lot of money. And iPod sales itself grew 525% last year. By some estimates, iPods account for as much as 80% of the total portable audio player market.

So what's the point? The point is that very few people could have predicted this three years ago. Technology innovation is creating incredible business opportunities. If you browse through the companies selling accessories, none of them are "big name" companies, and many of them are garage start-ups, especially those that make protective sleeves and cases for the iPod.

The telecom discussion tends to be framed by what is called the "triple play," which is voice telephony, video, and (Internet) data. I've seen a lot of business cases that "prove" that communities can't recover their costs using a triple play model. I think the reports are right, but for the wrong reason (which makes them wrong overall).

It's really a quadruple play, with voice, video, data, and what I call "advanced services." Advanced services are anything that will be delivered via the Internet that we have either not thought of yet or just are not including. My favorite example is network backups. Knowledge Economy startups like Data Ensure are growing rapidly by playing in the Advanced Services arena, and Data Ensure, in particular, is creating jobs in a remote part of southwest Virginia. They just happen to be in a vertical business incubator with fiber in the basement--part of a regional fiber project.

Congresswoman Heather Wilson of New Mexico calls it the "emerging duopoly. This Washington Post article discusses the impact the telephone mergers may have on communities and telephone users. The duopoly refers to a community that has just two telecom companies--one large phone company and one large cable company. These big firms can engage in cartel-like behavior, and the pattern so far has been not to compete on a level playing field but rather to simply buy competitors.

James Carlini has a must-read article that has some solid data on the value of municipal investments in broadband, as well as some fascinating historical data that shows community investments in "new" infrastructure pay off.

A bill under consideration by the New Hampshire legislature would give municipalities and regions the statutory authority to use bonds to build out telecom infrastructure. This is exactly the right approach. For one, it's a familiar and successful model that has been used for decades to finance other kinds of public facilities (e.g. roads, water, sewer, industrial parks, etc.). More importantly, it recognizes that there is an issue of the common good here, and that community investments are important to the future of communities.

A lot of phones are beginning to look a lot like iPods, and I don't think that is a coincidence. By some estimates, Apple has as much as 80% of the portable music player market, and the latest entry, the iPod Shuffle, which is incredibly small, is enormously popular, despite a lot of naysaying from competitors who claim it lacks features. Apparently they don't read the reviews of their own products, in which a frequent criticism is that there are too many controls and widgets that are too hard to figure out.

Costa Rica's countrywide telephone monopoly is trying to make it a crime to make a Voice over IP telephone call. From the article:

"One Costa Rican official of an agency seeking to promote the Central American country's software industry said last week that ICE's proposal would be "disastrous" to the country's efforts to grow its software development and outsourcing businesses."

Google has wads of cash, and has to spend it on something. So the company has been experimenting with Orkut, a "social software" platform similar to other services like LinkedIn. It has also started offering Google Maps, which now works with more browsers. Unlike Mapquest and some other similar services, Google Maps is fast and produces legible maps. I've always found Mapquest an exercise in frustration; not only are the maps fuzzy and hard to read, the zooming feature is extremely slow.

Broadband legal policy expert Lawrence Lessig has a nice summary of the issues swirling around community investments in broadband.

There are many advantages to working out of the home, but snow days are not one of them.

Normally, the neighborhood cable network is reasonably responsive during the day, because kids and parents are at work. I can get done what I need to do without waiting.

But with six inches of snow on the ground and more falling, schools and many businesses are closed, and apparently many people have headed for the Internet, completely bogging down the cable modem service. It's very pokey, with long waits for simple things like loading a Web page.

Here is an excellent article on the growing movement in Washington to take another look at the 1996 Telecom Deregulation Act. There is growing agreement that a) the law worked poorly, if at all, and b) it's now beginning to make things much worse.

Unlikely advocates are emerging to support new legislation. The phone companies want to get into the TV business, which was formerly the exclusive playground of the cable companies. The phone companies are going to go straight to Internet TV. They can do this because more people are tossing dial up over the side of the boat every day and signing up for broadband. And the protocols for delivering video have improved immensely over the past several years. Broadband can deliver TV, at least in a limited way, but the phone companies have realized it is their only way out of the mess they are in--free or very low cost phone service via VoIP is killing them.

The cable companies always tend to be a bit behind, which is pretty damning when you think about it. Would you want to claim you are almost as forward thinking as the phone company? The cable companies want to get into the telephony business, and already claim to have millions of customers. This is a bad direction to head because as I just said, the phone business is dead on the vine. The cable companies have decided to pick some very rotten fruit.

The '96 Telecom Act complicates all this tremendously because the government, in '96, treated TV and telephony differently. Today, both those services are just a stream of electrons shooting down the broadband pipe. It's absurd to view telephony as something deserving of special regulation and a pile of really dumb taxes.

Communities lack a strong, clear voice in Washington, although a few legislators realize this is important stuff. The really smart thing to get rid of the FCC entirely, but there are too many sacred cows who depend on complex rules and complicated taxes. It's hard to know what the current administration will do; when free markets and special interest business monopolies collide, the results are not often pretty.

Esme Vos at MuniWireless reports that Arizona has been testing VoIP via wireless on highways, and that telephone calls have been made successfully at speeds of 80 MPH. The effort uses equipment from a company called RoamAD. The mesh network system is able to hand off the signal from one cell to another without losing the telephone call.

EWeek reports that a cellphone virus that originated in the Phillipines has been found on cellphones in the United States.

Add Florida to the list of states with bills pending to stop municipal and local government investments in telecom.

Across the country, legislators, prodded by the phone and cable companies, are trying to outlaw community investments in telecom. One of the problems is that the discussion is one-sided. There are few consumer and local government advocates getting involved in educating legislators about the benefits of local telecom investments.

Barry Moline, head of the Florida Municipal Electric Association, summed up the debate from the community perspective.

The New York Times (registration required) has a very biased article about Philadelphia's plan for citywide wireless broadband. The paper interviewed mainly opponents of the plan, and seemed to go to great lengths to interview those opponents, while trivializing successful community projects. Worth a read just to understand the anti-community sentiment out there.

WiFi Net News has a long but informative roundup of all the anti-community legislation in process around the country. While it appears some legislators are resisting teh lobbyist-led push to keep communities at the mercy of the incumbents, it appears that the Philadelphia project (where the City wanted to do a citywide WiFi effort) has motivated the telcos and cable companies to get busy to protect their marketplace monopolies.

While most of the news sites are calling this "anti-muni" legislation, I'm deliberately calling it something else--"antic-community" legislation, because I think that's a better term.

This is an out and out assault on the rights of communities to control their economic future. If the incumbents were open and honest about their plans and were offering good and affordable services, none of these community projects would be underway. But this is an issue of community survival. When Hong Kong is running fiber past a million homes, are communities in the U.S. supposed to sit back and be content with either twenty year old copper technology (DSL, cable modems) or nothing at all?

Affordable broadband is the economic lifeblood of communities. Without affordable broadband, the small businesses of America (remember that small businesses create 75-90% of new jobs) cannot compete in the global economy. While the incumbents are protecting marketshare, communities are becoming increasingly less competitive from and economic development perspective.

Finally, I think communities ought to be regarding their investments like they manage roads, and not like water and sewer. My first choice for communities is to build digital roads and let the private sector create jobs, deliver services, and use those roads to create prosperity in the community.

Creating a new municipal monopoly (i.e. the way water, sewer, and electric is handled) is my second choice. In either case, communities should have the right to make those choices.