Exploring the impact of broadband and technology on our lives, our businesses, and our communities.
Missed opportunity in Minneapolis
The city of Minneapolis negotiated a deal with the wireless provider US Internet last year to provide a citywide wireless system. As part of that deal, the city is receiving about a half a million dollars a year for ten years. The funds will be used to support community portals for neighborhoods in the city. Planning for those portals is taking place right now. It is a great idea, but the city left a lot of money on the table.
Over the next thirty years, the residents and businesses of Minneapolis (Minneapolis only, not St. Paul) will spend 8.4 billion dollars ($8,403,268,500.00) on telecom services, and so there is plenty of money to build not just wireless but the world's best, full integrated fiber and wireless system, to every home and business in the city. Over thirty years, such a city-managed multi-service open network, designed with end to end automated Layer 3 provisioning, could put nearly 600 million dollars in city coffers ($594,041,030.00). That's a bit more than the projected $11 million from wireless.
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iPhone users happy
The iPhone has broken all customer satisfaction records, with 82% of iPhone owners saying they are "Very satisfied" with the device. This is the highest rating that any cellphone has ever received, and an indication that Apple once again has raised the bar for a market.
If you have not had a chance to try out an iPhone or an iPod touch, stop in an Apple store or an AT&T and store and play with it, especially the Web browser. Browsing the Web on cellphones, even phones with relatively large screens like the Treo, has always been an exercise in frustration. But on the iPhone or iPod touch, it is effortless to navigate and easy to read. Apple's multi-touch interface makes it simple to move around a Web page, scroll down as you read, and make the text bigger or smaller.
The iPhone is not just a better cellular phone, it is an entirely new device that, like the iPod, is going to change the entire marketplace for portable devices.
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Google search is slipping
Newsweek reports that Google search may be slipping. I have complained for a long time that Google searches tend to have too many results, and many of those results are not relevant. It turns out lots of other people have noticed that as well. More and more Internet searches are being performed by other search engines like Ask, Dogpile, Yahoo, and Microsoft.
One of Google's weaknesses is that a primary criteria it uses for search results is the number of other links that point to a site. This worked very well when Google was starting up, but it is easy to create links, and this has led to link farming, which is setting up sites with nothing but links to other sites. Link farm sites improve the Google rating score, but also typically carry Google ads, so link farmers get ad revenue and can artificially force their own sites to the top of Google searches.
Google search has proved more resistant to competition than I expected, but as other search engines get better, Google could lose ground quickly if the tide turns. Just ask former giants like AOL.
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Is Apple the new IBM?
Apple released its quarterly earnings statement, and some analysts have noted that its market cap has surpassed that of IBM. Market cap is calculated from the stock price, and Apple has left computer rival Dell in the dust; Dell is barely one third the value of Apple right now. Dell's founder, Michael Dell, is famous for stating a decade ago that Apple had no future and should be just shut down.
Apple reported it is selling 3 million iPods a month, and has sold over a million iPhones in a four months. Sales of Macintosh computers are also up sharply, and Apple is selling nearly double the number of Macs as it was three or four years ago.
Apple continues to out-perform the other computer makers because the firm understands how important design is to users. Apple crafts both its software and hardware with exquisite care, resulting in products that are easy to use and often seem effortless, like the new multi-touch interface on the iPhone and iPod touch. Apple designs for both form and function, and it is paying off big for the company, as millions of people become new Apple customers every month.
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Have we re-invented TV?
Pundit Bruce Nussbaum writes about a report by analyst Bill Tancer that suggests most of us are using the 'net as a kind of glorified TV, meaning we sit and watch. Only a small percentage of 'net users are actively participating in online "social networking" sites and an even smaller number is actually creating content and posting it.
It is an interesting look at some hard data about what we are doing online, and near the end of the article, an important point is made but perhaps not emphasized enough. While it is true that the percentage of people blogging and posting pictures and video is small, it is still a very large group of people: perhaps 2 million or more in the U.S. and 20 million or more worldwide. Fifteen years ago, when the first community broadband network was started in Blacksburg, the idea that millions of people would be writing and making videos viewed by tens of millions more people was regarded as sheer fantasy. But it has come to pass.
Other studies, notably by the Pew Foundation, show that most of the online creative work is being done by younger people. As the Internet Age matures, the percentage of people actively participating will increase.
From a community perspective, if you are concerned about attracting and retaining young people in your community, what economic development and community development strategies do you have to ensure that younger workers view your community as a "connected" community? What makes them want to live in your town?
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Cable companies block customer traffic
This news report suggests that some cable companies are actively blocking certain kinds of traffic on their networks. The target of such blocking is peer to peer file sharing, in which the subscribers are often sharing very large files like movies and TV shows. From a network operator perspective, what you see is a very small number of your customers using a disproportionately large chunk of your network bandwidth, which can degrade service for other customers and increase costs.
Of course, the whole issue of net neutrality comes into play here, where the argument is that Internet access providers should not block traffic or offer preferential treatment to certain kinds of data over other kinds. But the access providers are on the horns of a dilemma, because the peer to peer sharing does have a measurable impact on their network.
But almost all of the arguments for and against traffic blocking, the rights of access providers to manage their own traffic, and free speech issues are red herrings. The real problem is the outdated and obsolete business model that nearly every access provider is still using.
It made sense, more than a decade ago, to sell bandwidth by the bucket to users because all folks were doing back then was email and some light Web browsing. And the Web in the mid-nineties was most text and a few pictures. Today, the media-rich Web is filled with sound and movie files of all kinds, and everyone uses them--look at the popularity of YouTube.
The current business model does not provide any cost information to consumers; that is, the "cost" of downloading a few emails is exactly the same as the "cost" of downloading an entire movie in DVD format. This is a classic and well-understood economics problem. Current pricing, to users, makes it appear as if there is unlimited supply (of bandwidth), which in turn creates unlimited demand.
The solution is simple. Rather than trying to discourage customers from doing things they want to do, you change the pricing model so that it conveys more information about the real cost of downloading things like movies.
In other words, you move from a business model of networks based on bandwidth, which we know is not working, to a business model based on unlimited bandwidth but where pricing is based on the service you want to use. So users that like to do peer to peer file sharing subscribe not to a bucket of bandwidth but instead subscribe to a service designed specifically to support high performance file sharing, and the price of that service will be based on the real cost of providing the service.
It is simple economics. Communities like Danville, Virginia are already rolling out networks that do this. These multi-service, open networks support real competition and will start driving innovation on the network because the business model support innovation, rather than stifling it.
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Leadership Resources
There are no technology problems when it comes to community broadband. In my work with hundreds of communities, success usually comes down to the kind of leaders that a community has, well, leading. Ed Batista has a great set of resources for leaders, and it is a short list of annotated references, not a two hundred item laundry list. Well worth a look.
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Corporate spam collusion
I have an American Express business card, and got an email to take part in an online survey. I spent ten minutes or so answering questions about my satisfaction with the company. Many of the questions were related to promotional offers and other solicitations the company sends out. Fine so far.
The last page of the survey thanked me for my participation, and offered me a $15 gift card from Amazon, if I would enter my email address. I don't buy from Amazon because I don't like the way they use and resell customer information, so I tried to click past this page and complete the survey. I could not.
So I have to assume that Amex probably negotiated a deal with Amazon. "You give us some $15 gift cards that we can use to make it look like we are giving our customers something of value, and in return, we'll harvest email addresses so that you can spam our customers for the rest of their lives."
What makes this so sad and pathetic is that the survey was about the amount of unsolicited offers the company sends out, and whether or not Amex users thought it was too much (or too little, though I doubt anyone checked that box). So the "reward" for answering the question, "Do we send you too many unsolicited offers?" is to manipulate us into signing up for more spam.
The way the survey was designed, you could not complete the survey without entering an email address. So I just closed the browser window. I then went to the American Express Web site to try to find out who I could complain to, and of course, there was no way to do that. All they had was a Web form and no indication of where the inquiries go or who might read them.
This is all symptomatic of a bigger issue that we see mostly with large corporations, who have simply abandoned real customer service simply because the technology allows them to. Bean counters "prove" how much money can be saved by firing customer service reps and replacing them with voice response systems (which rarely work). They "prove" how much can be saved by eliminating all contact information from company Web sites. But it seems that few CEOs ask the converse question: "How much business are we losing by alienating our customers with lousy service?"
Why is there a steady increase in the creation of new, small businesses? In part because technology enables small businesses to compete with big businesses, and in part because big businesses do such a fine job of driving customers away by the mis-use of technology and complete disregard for customers.
But wait, there's more. I tried to call Amex to get a mailing address so I could write a letter about this, and after fighting the voice response system for a while, I got a live person--from some other country! With an accent so thick that I could barely understand them. They had to literally spell out, letter by letter, the entire address. After two or three tries on each word, I still did not have the correct address and gave up. But I was able to use what information I did have to do an online search and make corrections. My prediction: Like many other companies, Amex will eventually discover that offshoring customer support hurts the bottom line, and will bring that operation back "onshore." There is a booming new kind of job opportunity, where customer service reps work directly from their homes for these kinds of customer service operations. It's a great opportunity for workers in rural areas....if they have reliable, affordable broadband.
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Rural Telecon: "Industrial" development is dead
Morning keynote speaker Rex Nelson, who is the alternate Federal Co-chair of the Delta Regional Authority, delivered a lively, tough love talk this morning at the 10th Annual Rural Telecommunications Congress. Nelson said that too many rural communities have economic development programs that are "stuck in the fifties and sixties," with strategies that amount to little more than trying to sell "pastures....with water and sewer."
Nelson calls for programs similar to the ones undertaken in the first half of the twentieth century, when state and Federal officials invested heavily in essential infrastructure like roads and levees. Nelson drew heavily on the history of the Mississippi River region and the profound effect that levees had on taming the river, controlling flooding, and thereby enabling more stable local economies all up and down the river.
Today, Nelson said that telecom is an essential infrastructure for rural region that is the only hope of holding back "...a flood of poverty, poor health, and despair."
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Net speeds challenged
Internet access providers in the UK are being challenged on their broadband speeds, which their customers claim are not as advertised. An independent study showed that 62% of customers were getting less than half the advertised bandwidth that their provider had promised.
The article has an unintentionally humorous quote from a member of the commission studying the problem, who said, "...there were good technical reasons for the gulf between advertised and actual speeds." Yes, like the service providers have not bothered to provision their equipment to actually deliver the advertised bandwidth.
Network architecture is important, and communities looking at making investments have to make sure they pick the right network architecture. A properly designed Layer 3 multi-service, open access network can easily deliver advertised bandwidth to customers, and some communities in America are already moving to this architecture, and away from the older systems that have been used for the last fifteen years. Design Nine designs ONLY multi-service networks that can deliver advertised speeds, because if communities are going to make these investments, businesses and residents need to know they are going to get their money's worth, rather than empty promises from equipment vendors selling systems that can't deliver.
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