Exploring the impact of broadband and technology on our lives, our businesses, and our communities.
$15 broadband from SBC
In what has to be a sign of desperation, SBC has dropped the price of its entry level DSL service to $14.95 a month. Claiming that the online registration "lowers costs," the telco is also giving customers a $99 credit towards home networking gear like wireless access points.
Nationally, DSL only has about 15% of the broadband marketplace, with cable a near monopoly with around 75%. Wireless and fiber offerings make up the other 10%. The biggest problem with DSL is that the ability of the phone company to deliver it to any particular home or business depends on the distance from the telephone switch, the quality of the copper cable plant, the phase of the moon, and local service techs who may or may not be able to fiddle with the line to make it work.
Cable modem service does not have those problems because the cable companies took on enormouse debt to rewire their service areas (and the debt is another issue). The phone companies tell political leaders that they are providing broadband almost everywhere by using the fictional device of counting an area as having DSL if they can provide the service to just one home in a zip code area, which is often huge. They usually know full well that many homes and businesses will never be able to get DSL with the current cable and equipment plant, but count the entire zip code as "having DSL."
So SBC has to do something to attract customers. The one thing the phone companies have going for them is bundling--they can offer local phone service, long distance, and broadband on the same bill, and not all cable companies are ready to do that. Dropping the price on broadband may bring a few people back to the phone company, and SBC will probably make a small profit by selling multiple services.
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FCC Chairman Martin says, "Broadband is top priority"
Kevin Martin, Michael Powell's replacement as the Chairman of the FCC, said in an interview that broadband is a top priority for the agency. This article [link no longer available] has some of Martin's comments, but it does not shed much light on where the FCC is likely to take the broadband issue in the future.
The FCC has been awkwardly trying to straddle the fence on broadband issues, trying to placate the incumbent providers while also trying to encourage new services. But the pushme-pullyou approach ends up with some very odd situations. The 911 requirement for VoIP phones that the agency announced last week (that the VoIP providers have 120 days to get their systems working with 911) seems particularly odd when you consider that the cellphone providers have been trying to get cellphones to work with 911 for TEN YEARS.
So one has to wonder what the point of the regulations are--is it political grandstanding to show the public that the FCC is on their side? Or are they trying to simply kill the entire VoIP industry by making impossible demands on these mostly small firms? The real headscratcher is that the FCC has said that the incumbent phone companies must provide access to existing 911 systems but the FCC has provided no rules, which sets the stage for the telcos to charge enormous fees for connections--fees so high that the VoIP competitors go out of business.
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Free WiFi has its limits
Slashdot reports on a coffee shop that has started turning it's WiFi off on weekends. WiFi "squatters" were sitting at tables for six to eight hours at a time, preventing other patrons from finding a place to sit, and worse, some squatters were not buying anything.
It might be that some clearly posted rules would also mitigate the squatters, and it's an interesting contrast to other published reports that some businesspeople have seen receipts and profits rise after installing WiFi.
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Newspapers and the Internet
Newspapers have been having a hard time with the Internet. Readership of the ink on dead trees editions decline year by year, and instead of taking any responsibility for the lack of appeal, they blame it solely on the Internet itself, although I see a few signs of change.
Our local paper, the Roanoke Times, has been adding new faces to the line up with writing that does not neatly fit the "news" model of olden times. The RT has a great weather column that I read regularly now, and they just did a week long story series on some high school students who went storm chasing in the Midwest--a kind of blogging on dead trees, but a lot more interesting than reprinted AP stories.
Meanwhile, as Internet advertising continues to be very profitable for many Web sites and ad brokers like Google, the New York Times has decided to charge for content with a $50/year subscription. Huh? It seems to me that the NYT has a wonderful opportunity to take a Google-like approach to ads and make a bundle--I suspect a lot of companies would pay to be able to place an ad on the pages of the New York Times. Instead, they have decided to choke off readership by making everyone pay in advance to see anything.
Another national paper I read regularly has just started requiring registration, so I've stopped reading it. The registration is annoying if not dangerous from a privacy issue, since you don't have any control over what they do with the information (yes, you can lie and put false information on the form, but that bothers me too).
I remain convinced that there is an important role for newspaper organizations in the future, but more change and more innovation is going to be needed, or we will start to see some papers fail.
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Seattle says "Fiber--full speed ahead."
The Seattle Post-Intelligencer has an article on a report issued by a City of Seattle task force that concluded that the city has to take broadband seriously, and must begin immediately.
This is a must read article that makes many good points. Rather than rehash them, here are some of them verbatim:
- Broadband networks will soon become what roads, electric systems and telephone networks are today: core infrastructure of society.
- The long-term problems and challenges that Seattle faces are not likely to be solved by wireless... What Seattle and all cities will need is a big, big pipe capable of 25 to 100 megabits (per second) each way.
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If Seattle does not move forward with the network, it could lose its edge to cities such as Amsterdam, Netherlands, and Seoul, South Korea, which have placed big bets on broadband....
There are areas of the globe that are light years ahead, and Seattle should want to be among the global leaders...
The city task force was originally instructed by the City Council to look at doing a citywide wireless project, but after studying the issue, came back with a different set of recommendations that focused on fiber. One city council member has proposed creating an Office of Broadband to study the problem further.
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Ohio economic development strategy
Pat Valente, the Deputy Director for the Department of Development of Ohio, spoke at the Ohio CDC Technology conference about the state's strategy for economic development. Here are the key points:
- Focus on the core competencies and strengths of the state.
- Encourage collaboration among state agencies, industry, and university researchers to help create innovative new products and services.
- Ohio intends to compete fully in the global economy, and nothing less is acceptable.
- Translate research into products; Ohio wants to help university researchers translate research results into commercial successes.
- Entrepreneurs are creating the new jobs, and it is the job of economic developers to nurture entrepreneurs.
- Provide capital for early stage ventures.
- Invest in workforce development so that Ohio has workers with the advanced skills needed to find and keep good paying Knowledge Economy jobs.
What is most interesting about Valente's remarks is what went unsaid. There was nothing about industrial recruitment or giving lavish tax breaks to big companies. Ohio is probably still doing some of those things, but the emphasis on entrepreneurs and support for innovation is refreshing. The state is also headed in the right direction by identifying assets and competencies already in the state and trying to leverage those, rather than just imitating what has worked elsewhere or just trying a lot of stuff and hoping something sticks.
As examples of this strategy, Valente mentioned a focus on fuel cells as an alternate power source. The state is funding research to use biomass as a feedstock for fuel cells, leveraging the state's agricultural industry. It is also funding the development of new polymers (plastics) from soybeans rather than fossil fuels, because the state is a big soybean producer.
If Ohio sticks to this plan, it will have an advantage over many other states that don't have the same level of focus. I thought only one thing was missing--a statement of intent to ensure that every business in the state has affordable broadband. If Ohio is serious about competing in the global economy, you can't leave this to chance.
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Technology training for the Knowledge Economy
ISUS (Improved Solutions for Urban Strategies) has an innovative alternative high school education program that helps high risk youths get a high school diploma while giving them a heavy dose of on the job construction training and high tech manufacturing skills.
The program provides proficiency-based high school classes that are integrated with work training in the construction industry. But the effort has a real high tech twist, and takes vo-tech to a whole new level by building and selling houses at market prices in distressed neighborhoods.
The program has a CAD-CAM manufacturing facility where students used computer design systms to design the homes, and these are very sophisticated homes, mirroring the traditional styles used in the nieghborhoods in the early part of the twentieth century--in other words, real style. Instead of the traditional industry approach of building on site, many of the walls and floors are built in the high tech manufacturing plant using computer controlled panel assembly equipment. Students learn to build using state of the art computer and manufacturing systems, then take the parts right to the work site and put the house together.
At risk youth are getting marketable job skills, graduating from high school, and in the neighborhood where the houses are being built, the new homes are raising property values and have encouraged others in the neighborhood to rehab and fix up other homes--a win-win-win for the kids, the homeowners, and the community.
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Ohio Community Development, Technology Conference
I am at the Ohio Community Development, Innovation, & Technology Conference in Columbus, Ohio, and I'll be posting highlights from the meeting for the next day or so. The conference is sponsored by the Ohio Community Development Corporation Association.
Ohio, which has faced some real challenges over the past several decades as manufacturing has declined, is doing a lot of things surprising well. Lt. Governor Bruce Johnson described the state's "Third Frontier" initiative, which is well-focused, and state leaders have wisely tried to first identify strengths in the state first, and then have followed up with strategic investments to leverage existing assets. That may seem obvious, but I see a lot of economic development strategies that don't really do those things.
Among the Third Frontier strategies are to look for new markets for traditional agricultural products like soybeans. Researchers in the state are looking at producing new kinds of polymers from soybeans (the state is a big producer of soybeans).
The state is also not just throwing money at projects. It insists on real, cash on the table collaboration before it will provide funds for new ventures, and says that it is getting a 13:1 match from the private sector on joint ventures--a pretty good track record. The state extends this collaborative approach to university research, insisting that if universities think they can build a better mousetrap and want money from the state, then the university has to put some of its own money on the table.
All in all, good sensible stuff from Ohio.
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How to cook a hog, Internet TV style
This article about grass roots television programming illustrates the perfect storm developing that has the potential to wreck the Hollywood-based entertainment corporations. Since the days of Milton Berle's live broadcasts, television content has been generated largely by Hollywood. It's been a tight knit cartel of writers, directors, producers, and production companies that have kept video content locked up pretty tightly, in large part because of the cozy relationship with the broadcast networks. Cable has been chipping away at that, but innovation in cable has meant largely following the same old model, but just doing everything as cheaply as possible.
The limitation has always been the same, whether you were delivering a television program over the air, by cable, or by satellite--you have only twenty-four hours per day per channel, so everything is a trade-off of demand versus air time.
Like nearly everything else it touches, the Internet just plain breaks that apart. On the Internet, content is not bound by the delivery mechanism, so we are seeing the end of CDs, the end of DVDs, the end of radio "channels," and the end of TV "channels." Channels were a construct based on the scarcity of bandwidth, and there is no scarcity on the Internet.
So for $1.99, you can download and watch a 45 minute video on how to barbecue a whole pig. But that's not even the interesting part. DaveTV, which is offering the video service, has a BBQ "channel" with more than 1000 video segments, just on barbecuing. Try doing that using the traditional television programming system. You can't. But the Internet makes it simple.
So here's the thing--Hollywood no longer has an edge--none at all. What about your region? Do you have some of the pieces in place to start some Internet TV video production companies? Is your town on a major fiber backbone that could be used to pump video to the rest of the country? Do you have some program assets that could be the basis of a channel like the BBQ channel?
Side note to my southwest Virginia readers: If I lived on a crooked road, I'd be pretty excited about the potential to market assets to a worldwide audience. And a major piece of the puzzle is just down the road in Tennessee. There's another piece over in Danville.
The beauty of the Internet is that it changes the math. With the Internet, you can add 2 + 2 and get 10 if you do it right. And there's a 10 not only in southwest Virginia but many more all over the country.
Of course, there is never a free lunch. To get to that 10, communities have to be willing to do things differently, and that's the real challenge, not the technology.
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BPL is no cure all
If your community is looking at Broadband Over Powerlines (BPL) as a cheap way to get broadband out to neighborhoods or rural areas, you should read this article over at NewsForge, which says BPL still has some issues that have to be worked out.
Among the problems this article raises are relatively high costs, the need to deploy a fiber backbone to support neighborhood level BPL, and radio interference in frequencies used by public safety (fire, police, rescue).
In short, BPL is no shortcut, and may not even be a bargain, compared to other entry level broadband systems like wireless.
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