Exploring the impact of broadband and technology on our lives, our businesses, and our communities.

AOL dumps broadband services

AOL has announced that it is dumping its broadband customers in nine states. AOL has been in decline for years, and this is one more indication that the company is completely adrift. AOL's foray into broadband service was a mystery to me in the first place, since they had to resell access purchased wholesale from other providers.

I don't think AOL has ever really understood what it is about. For too long, it thought it was an access company because people bought AOL accounts to get Internet access. But I could told them that was doomed in 1997, if they had wanted to listen. Dial-up is over--growth in dialup peaked at least two years ago, and the DSL, cable, and other broadband providers have been taking AOL's customers since then.

AOL, in my mind, has always been a content company, but I don't think AOL has ever really embraced that as a strategy. They had it too easy for too long, with the Internet build-up dumping buckets of cash into their coffers while the Internet was hot. The problem for AOL has always been that it never was and still is not an Internet access provider. They've always maintained their own personal coccoon for users that was designed and developed long before the Internet took off, and they've never figured out an exit strategy. AOL's Web browser used to drive Web designers nuts because it was so bad--bad because AOL squeezed Internet data through an AOL sieve and still does. No one else does that anymore.

For certain kinds of users, AOL provides a good environment. They've done a nice job of providing a family-friendly interface, as one example. But unless they can finally let go of their legacy systems and reinvent themselves, the company will slowly go out of business.

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More VoIP good news

The FCC released another ruling on VoIP. The Federal Communications Commission has barred states from imposing telecom regulations on Voice over IP telephony providers.

This is additional good news for businesses and consumers who are saving money by using VoIP services (estimated to be well over 4 million customers). State and local taxes on telephone services with no local infrastructure or presence is simply taxation without representation in another form, and revenue-hungry governments ought to keep their hands off VoIP. Taxing things like that just makes the state or locality less competitive globally and retards economic development.

Unfortunately, the FCC has still not ruled on whether VoIP is an information service or a telephone service. If it is considered a telephone service, VoIP would be subject to the no longer relevant telephone regulation of the last century. But so far, the FCC rulings on VoIP have all been in the right direction.

Rollin', rollin', rollin', keep those new phones rollin'

The FCC has ruled that VoIP is an interstate service, in response to a petition from Vonage, one of the best known national VoIP providers.

This is very significant, because it snatches VoIP out of the clutches of state by state regulation (we've got 50) that could have easily sunk the service before it got started. State regulation would have been a nightmare, and at the least, would have increased the cost of service. At the worst, some VoIP companies would have just quit the business and potentially sunk the industry. There is no way VoIP could be competitive if each VoIP provider had to deal with 50 different sets of taxes and regulation.

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Historic meeting in Vancouver, British Columbia

I had the privilege of attending what I think was a historic and potentially revolutionary meeting in Vancouver, British Columbia, on Tuesday. The provincial government had convened an all day conversation about the broadband needs of rural communities, and how to best get affordable broadband connections to those communities.

It was Garth Graham, one of the real pioneers of the community technology movement, who grabbed me after lunch and pointed out that as far as he knew, it was the first time ever that four different groups of people met in the same room to talk about rural broadband problems. Represented at the meeting were:

  • Provincial government leaders, who had convened the meeting and wanted to explore ways to use the telecom buying power of the provincial government to get better broadband services into rural communities.
  • Large and small telecom access and service providers, including the incumbent telecom providers Bell and Telus.
  • Community network managers and leaders; in British Columbia, community networks play a key role in providing Internet access in rural parts of the country, and collectively they have thousands of customers.
  • Community leaders, who were there to share their needs, goals, and aspirations, and to learn about what they can do to get affordable broadband to their communities more quickly.

It was a remarkable meeting, with open, frank, and stimulating dialogue from all four groups. The fact that it happened, that so many people attended (over 50 people), and that there was such honest speaking, listening, and understanding, suggests that we have truly turned a corner in beginning to identify and actually implement community telecom solutions that have a chance of meeting both public needs (the common good) and private needs (increasing shareholder value).

The group agreed that more meetings were needed to hash out details, but there was remarkable consensus that the problem is largely one of policy, administration, and management, and that this is not a technology problem, in the sense that it is NOT a matter of just picking wireless, or fiber, or Gigabit Ethernet, or so on. All parties agreed that communities and regions need some new and yet to be determined entity to help with telecommunications issues (infrastructure, access, services, policy, regulation).

British Columbia has long been a leader in this area, and I was fortunate to have the opportunity to witness history in the making. If British Columbia is able to provide some working examples of new ways for public and private partners to work together to make the telecom pie bigger and more affordable, it truly will be revolutionary.

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MPAA to sue movie downloaders

The MPAA (Motion Picture Association of America) has decided to sue grandmothers and fourteen year old kids who are allegedly downloading bootleg copies of movies.

Like the music industry attempts at litigation, it accomplished little except prove the stupidity of these movie execs. When "millions" of people are trying to watch your movies, that's called a market opportunity, not a field day for lawyers.

If you haven't heard much about the evils of music sharing lately, it's because Apple (not a music company) is making the music industry millions of dollars through Apple's online music store. Competitors with similar legal music download services are also stuffing millions into the pockets of music company execs.

On the artist side, some bands and musicians now don't bother to even sign a recording contract. Instead, they market their music online, burn their own CDs and sell them online and at concerts, and are free of the tyranny of the music industry.

The movie industry is going through the same convolutions. The Blair Witch Project, an enormously profitable movie, was shot with cheap cameras and edited and produced on some Macintosh computers--no expensive movie industry post-production needed. Apple's Final Cut Pro is now being used to edit and produce big screen movies--changing the entire post production process that used to be dominated by high-priced Hollywood firms. The new technologies are putting much more control in the hands of musicians, directors, and writers--a good thing, unless you are an exec at one of the old Manufacturing Economy businesses that thinking sueing customers is great public relations.

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eBay and business

There is the old joke that goes like this:

"There are two kinds of people in the world--those that divide people into two groups, and those that don't."

At the risk of self parody, there are two kinds of people in the world (and I'm broadly overgeneralizing, of course)--those that use eBay and those that don't.

For those that don't, the eBay phenomenon is a bit of mystery. From a certain distance, EBay is cluttered with junk, trivia, excess, and silliness. But it also is a terrific business transaction mechanism, for both formal and informal business.

I just bought a part for my breadmaker. The manufacturer has been out of business for four years, and parts are no longer available through "normal" channels--that is to say, the Manufacturing Economy manufacturer--distributor--dealer supply chain.

But I found the part I needed for $9 (new cost was $15 when it was available) from a guy in Nebraska whose machine had burned up. Instead of throwing it in the landfill, he's selling usable parts from it and making a few extra bucks. It's not only reducing the amount of waste going into landfills (parts of his machine and all of mine), he's profiting from it, and I'm able to keep a perfectly good machine working.

It's amazing when you think about it. A scant ten years ago, the notion of linking a buyer for a very obscure machine part in Virginia with a seller in Nebraska was inconceivable. Today, we take it for granted.

Many small businesses are now using eBay as a strategic part of their business, putting both normal stock and overstocks there for sale. It's a cheap and easy mail order strategy that has virtually no downside.

Does your region's economic development strategy include workshops to help businesspeople learn how to use eBay? I bet not, and business growth opportunities are being missed.

Mac OS X the "safest" computing environment

A London computer security firm has just completed an extensive, year-long study of hundreds of thousands of security breaches against computers running a variety of operating systems, and OS X was found to be the most secure. OS X is a Unix computing environment running the BSD variant.

Surprisingly, Linux was found to be the target of many security attacks, although the Windows platform also recorded very high numbers of breaches.

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More on videoconferncing

I wrote yesterday about Apple's excellent and free videoconferencing software. Last night, I saw a Microsoft ad touting the advantages of their LiveMeeting product. It's interesting to look at the two very different approaches to the same market space.

Apple has chosen to build value into the basic operating system by providing the software for free. It's functionality is basic, but it works very well, and the next upgrade will suppposedly support videoconferencing with multiple site (the equivalent of a conference call). However, there is no support for document sharing, which would really enhance the value of the service. There are several third party products for the Macintosh would do provide some document sharing and whiteboard functions.

Microsoft's LiveMeeting is a fee-based service that provides some meeting management tools, document sharing, and the ability to include several sites, but there is no videoconferencing. You apparently have to use traditional telephone conference calls to provide the audio portion of the meeting. I say "apparently" because I could not find that information on the site without watching a thirty minute presentation online.

LiveMeeting is a slick product that offers a lot of useful services, but it's really a broadcast medium--which would be quite useful in many situations. The document sharing and whiteboarding won't scale up (on any platform) beyond a few people. Microsoft seems to be aiming for the corporate market, where you might want to make a company presentation to hundreds of people at once in several locations.

Apple is more focused on relationships. In the Knowledge Economy, who you know is more important than what you know, and the ability to maintain and support face to face meetings is going to be increasingly important. From our current book of the month on social networks:

"This is not so much about pushing more information through a group but about developing relationships that can be rapidly sought out when needed."

The other difference between the two models is that Apple, by making their software part of the operating system (and free) is trying to empower their customers to use it freely for whatever purpose they choose, whenever they choose. Microsoft wants to charge you every time you have a meeting. Admittedly, the products are somewhat different, so you can't make too much of my comparison, but I do think the two companies have a very different philosophy toward their customers.

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Google's Gmail already needed a security fix

Google's popular Gmail has already required a security patch that allowed a third party to easily log in and gain full access to one's mail.

I'm amazed at people's willingness to hand over all their private and/or business correspondance to a third party that can do anything it likes with it. Yes, they have a privacy policy, but they also reserve the right to change the privacy policy without your permission.

Gmail, by all accounts, has done a great job with the interface for the software, and in general, email clients desperately need better design in this area. But the risk is just too high. I'm keeping my email on my own machine, under my own control.

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ADSL2+ increases the digital divide

A flurry of articles like this are talking about ADSL2+, a new standard for DSL service over old copper phone lines. ADSL2+ is not only too long as an acronym, it offers too little, and ironically increases the digital divide, in my opinion.

In short, the new service will provide increased bandwidth over copper phone lines, but only if you are about one and a half miles from the telephone switch, as opposed to the three miles of the current DSL offering. ADSL2+ also will go further than the old three mile limitation, but only at low data rates--about four times dial up speeds.

So a few subscribers may get DSL service where they could not before, but only at much slower than "normal" DSL. And a few subscribers may get much faster service, but only if they are very close to the telephone central office. And it's important to remember that the distance rule of thumb is not line of sight, but cable feet; not only that, the ability to deliver DSL is highly dependent on the quality of the copper cable. In many rural areas, DSL just does not work on older cable plant, even inside the distance limits.

It's hard to see how this benefits anyone, even the phone company. It further segments their own customer base and prevents them from offering the same set of services to all customers. For example, some ADSL2+ customers might be able to get a single channel of high quality high defintion TV (HDTV), but others will not. How you market that is a mystery to me--"HDTV--it might work in your area, but maybe not!"

The phone companies are still very fixated on market share, rather than on offering good services in a competitive marketplace. So in their minds, anything that continues to allow them to lock customers up over copper is good, even if it's bad. Does that make sense to you? It doesn't to me either, but that's their strategy until they can figure out a way to justify running fiber to neighborhood.

As I've said repeatedly, the notion of having each provider overbuild their own infrastructure is not only expensive, it will simply create marketplace monopolies that serve neither businesses nor the community at large well. Whoever captures a community market first "wins," in the sense that there is little incentive for another company to come in and build out a new infrastructure.

The only answer is for communities to make investments to help level the playing field. Remember what happened to communities that were too far from an interstate highway? Business collapsed over a period of years. Communities need to make sure they are doing what is needed to stay on the Knowledge Economy highway.

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