Exploring the impact of broadband and technology on our lives, our businesses, and our communities.
Search wars continue to heat up
The search wars continue to heat up. Just days after Google complained that it wasn't fair that Microsoft wanted to use its own search engine in the next version of IE (imagine that), Amazon's A9 search engine has dumped Google as the backend and switched to Microsoft's MSN Search. This article notes that Google has already "complained informally" about how unfair that is.
Apparently Google's notion of fairness is that everyone and every company should be required to use Google, period. Uh huh. That's fair.
What's bad for users is that we have seen consolidation in search, to the point that there are only a handful of viable and useful search sites, each of which seems determined to seek every monopolistic advantage they can grasp, instead of actually trying to offer good search services. A two tier Internet would only make this worse, because only the big companies could afford to pay the blackmail, er, I mean the "enhanced performance" fees of companies like SBC/AT&T and Verizon.
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Do it yourself fiber
Skip Skinner, the forward-thinking administrator of Wise County, Virginia, suggested do it yourself fiber to me three years ago. I've proposed it to many other groups since then, and everyone thought I was crazy.
So I was gratified to hear from Matt Wenger of Packetfront about a wildly sucessful do it yourself fiber project at the Digital Cities conference last week. A rural community in Sweden got potential broadband customers to dig a trench across their own property and install conduit (cheap plastic pipe) to the rural road, where the fiber was then blown in using compressed gas.
It worked extremely well. The effort was started and led by a single determined community member who observed, correctly, that most rural folks have or have easy access to tractors, plows, and trenching equipment, and know how to use it.
A major cost of installing fiber in rural communities is getting the fiber from the paved road up to the house, which in this Swedish community was as much as 3/4 of a mile from the road. By sharing costs across a large number of users, the cost of getting the fiber installed was greatly reduced, and the primary focus of the effort was centered on just getting the fiber down the main back roads--a much simpler problem than dealing with the logistics of installing duct to every household.
The local credit union also pitched in by agreeing to add the average $600/household cost of duct and parts to the property owner's mortgage, which increased the take rate for fiber by 25% to 40%. The credit union realized that fiber infrastructure increased the property value by several times the cost of the materials, and worked with their customers to develop a simple, streamlined process for providing the funds. A U.S. study last year showed fiber to the home adds $7,000 to $14,000 of value to a home.
The combination of shared investment, self help installation, and new forms of financing minimized the capital risk on this project and got state of the art fiber into a rural community.
So my question today is this: Are the Swedes smarter than the rural residents of the U.S.? Why not do this in your rural community? We are talking about digging shallow holes in the ground and dropping plastic pipe in the hole, then covering the hole up with dirt. I'm pretty sure we can handle that.
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Pot calls kettle black
In the bottom story of the day, heavy-handed search powerhouse Google is complaining that Microsoft doesn't play fair. In a NY Times story that probably won't be available for very long, Google is upset that Microsoft intends to make MSN Search the default search engine in the next release of Internet Explorer.
The story is good mainly for laughs, as both companies have used every monopoly trick in the book to try to pound competitors into the ground. It is comedic to read their whiny objections to each other's tactics as each company tries to assume the moral high ground while seeking to continue their "We're king of the world" hegemonies at the expense of the rest of us.
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Do high energy prices help rural areas?
Jerry Fuhrman, who writes from rural southwest Virginia, has an interesting observation today that I think is applicable to many rural areas of the country.
He notes that one of Virginia's main exports is wood (mostly to China), and one of Virginia's main imports is furniture (mainly from China). Fuhrman's question is how will high energy prices affect the cost of goods, since it takes a lot of energy to haul wood to China, turn it into furniture, and then haul it back to the U.S?
Higher energy prices are going to change things in ways we are not thinking about right now. The current focus on automobile efficiency is, I think, extremely short-sighted. Fuhrman is more on track, looking at indirect effects and trying to ferret out business opportunities. There is a business boom at the end of every downturn. Thinking in a futures context means less handwringing about the present and more consideration of where things might end up.
Virginia used to be a furniture manufacturing powerhouse. And Fuhrman may be right that it could be again.
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Congress tries to bring down the Internet
Congress is at it again. Apparently our Federal legislators don't have enough to do, so they have cooked up a new bill that would require every service provider and Web site to maintain access records indefinitely. Sponsored by Colorado Democrat Diana DeGette, the bill is supposedly to fight child pornography. But the bill would give law enforcement officials unlimited rights to snoop everywhere that anyone has ever been online, forever.
This is the most egregious abuse of privacy Congress has yet managed to think up. Lest you think it applies only to the likes of AOL and Verizon, it would apply to anyone that runs a Web site, even the Ladies Garden Club.
In the real world, this would be like requiring local stores (e.g. your local hardware store or quick-stop) to make every customer sign in, record the time and date, and then make the book available to police and Federal officials whenever they wanted it, even fifty years from now.
It is a law enforcement dream come true, but a citizen and business nightmare. One little problem--the amount of data that sites would have to maintain (over years and years, remember) will create a boom in hard drive sales and would become a backup and data retention nightmare. Big sites with lots of traffic (e.g. CNN, ESPN, etc.) throw most of their data away very quickly because it is a storage problem.
Your tax dollars at work. Call or write your Congressional reps and tell them the DeGette bill is an invasion of your privacy and that you don't want businesses turned into police snoops.
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Knowledge Democracy:
Buy low, sell high
Buy electric power when the cost is low, store it in your home or business, and use it when the price of power is high. Many electric utilities are moving toward differential pricing; during peak use hours (typically daytime and early evening), they charge more for electricity, and charge less in the middle of the night, when they have excess generating capacity.
GridPoint is a startup that makes a filing cabinet size set of batteries with a built in computer which knows your local electric rates. The computer charges the batteries when rates are low, and then automatically puts the power back out when rates are high.
As the price of power goes up, ideas like this would become increasingly attractive. It's an idea that mirrors the Internet--instead of a single huge electric generating facility (think mainframe computer), we'll see more and more decentralized electric systems (think desktop computers). It spreads the cost across a larger number of people, and in the case of Gridpoint, creates no pollution, but makes the electric grid more efficient by creating stored energy points.
Gridpoint is marketing initially to businesses that need reliable power (think Internet access and computers). The Gridpoint box acts as the primary power source during power outages, so it has a dual use, reducing electric costs continuously and by providing an alternative energy source during power interruptions. In the aftermath of Katrina, it was lack of power that crippled many businesses in the region, not flooding.
Gridpoint is a perfect example of a new business opportunity in the emerging Energy Economy. How about your regional economic development plans? Do they include a strategy for leveraging local assets for the Energy Economy? If not, why not?
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How does $15/month broadband sound?
While at the Digital Cities conference in Reston, Virginia earlier this week, I was able to get some detailed information about Vasteras, Sweden, where they have implemented the kind of open service provider communitywide broadband I advocate for communities in this country. Vasteras is a medium-sized city of about 80,000 people. In past eighteen months, they have run fiber to 7000 homes, 23,000 apartments, and 2000 businesses.
The system is run as a completely open access network--any qualified service provider may offer services over the network, and they have eighty-six (86) service providers. There are several options for Internet access, starting at a full 3 megabit (symmetric--3 meg up and 3 meg down--not offered by any cable or DSL provider in the U.S.) for $15/month. You can get a full, symmetric 100 megabit service for $45/month (about what most of us pay for 1-2 megabit cable or DSL service).
The open access system uses a single community infrastructure that offers freedom of choice for subscribers (pick from 86 different services), increased competition, and much lower costs because service providers can sell services at lower prices because the cost of the infrastructure is shared across the entire community.
Robert Kjellberg, the Managing Director of the effort, said the system has created many new work at home opportunities, helped improve the delivery of local government services, provided new opportunities for distance learning, and that local schools have been able to make much greater use of the Internet for teaching. He said that every K12 student now has their own online portfolio of school projects.
The take rate for the network has been 50% among homeowners and 50% among businesses, and demand has been very strong. They continue to hook up new customers on a weekly basis.
Service providers have been very enthusiastic, and Telia, one of the incumbent providers, sells Internet access over the network for half the price that they charge for DSL in other communities. Kjellberg emphasized that the city does not sell any services and does not compete with the private sector--all services offered over the network come from private sector providers. The service providers pay a small portion of their revenue to the city, which is used to finance debt, expansion, and operations.
Here are some links to the project. Note that as of this day, a Swedish kronor (SEK) is worth about 13 cents USD, so you can take the Swedish service prices and divide by 7.4 to get the equivalent in US dollars.
- Link to the main page of the community portal.
- Main page where you would go to select service offerings (e.g. Internet access, telephone service, TV service, etc.).
- The page of 17 different Internet access plans for homes and apartments.
- The page of 6 different TV packages delivered over the fiber network.
- The page of 6 different telephone service packages for the home, also delivered over the fiber network (starting at $10/month).
Vasteras has won numerous awards for its network and has attracted worldwide attention because it has world class broadband at affordable prices. How about your community? Instead of just one or two highly restrictive and expensive broadband offerings, would it not be better to have homes and businesses choosing from 17 plans starting at $16/month?
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Who owns and controls right of way?
Right of way issues are central to the future of communities. Right now, cable and telephone companies are trying to wrest control of right of way from local government. They want the Federal government and/or the states to control right of way, and they may well win if local officials don't get involved quickly.
The incumbent providers want to build de facto monopoly networks as quickly as possible, and one way to speed that up is to simply bypass any and all negotiations with local communities over right of way permits and franchise fees. The incumbents want "by right" access to any and all right of way without having to ask permission. They will simply pay a fee to the state or Federal government to gain access to local rights of way.
Communities lose big--they not only lose all the franchise fees, but they lose control over their own right of way--a scarce resource that can be used up quickly. Loss of right of way is an economic development issue, and economic developers should be arm in arm with local elected leaders fighting this one. Fights are brewing all over the country.
You might think that the Feds and state officials will help with this struggle, but you may want to think again. They see state and national franchising as a new source of revenue, and are going to claim this will help spread broadband more quickly, while happily taking all the franchise fees. It will only help spread the inferior, slow broadband we already have, rather than the fast, fiber-based systems we need to compete in the global economy.
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Save the Internet
A distinguished group of technology leaders has begun a Save the Internet campaign, which is intended to provide information to legislators on the network neutrality issue.
Many of the incumbent broadband providers want to start charging differential fees for access to their broadband networks. The effect will be to squeeze much of the innovation and opportunity out of the Internet, leaving only deep pocket companies that can afford to pay the tolls--and that is all they really are.
It's as if our entire Interstate Highway System, formerly free, suddenly had tollbooths at every exit. It would not be good for the economy. And a two tier Internet won't be good for the economy or for communities.
Communities need a stake in the ownership of the Internet; nothing less than their economic future is at stake. If the toll access to the Internet is too high in your community (think rural), companies won't relocate to rural areas. And that means no jobs.
There is ample precedent for communities to take on partial ownership of telecom infrastructure; done correctly, private telecom providers can make even more money, but on a level playing field that is managed for the common good.
Having trouble understanding the issues around network neutrality? Here is a short video that explains it very clearly.
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Communities do take over private utilities
There was an article in the Roanoke Times this morning about a local businessman who sold his private water utility company to the city of Roanoke--in 1949. So as recently as fifty-five years ago, we had local leaders taking on privately owned utility services.
This provides yet another example of ample precedent for communities to take on new services, like telecommunications infrastructure. But a big difference is that a digital road system will create lots of new opportunities for local and regional businesses. Current telecom service providers will use the new digital roads to sell goods and services to the private sector, reaching more customers with more services at less cost.
It's a win-win-win situation. But we need leaders who have studied the history of community development and who recognize that there are times when local government has an important, even historic role to play to support the common good--just as Roanoke leaders did in 1949.
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