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

South Koreans abandon dial-up

According to a report on the [telecom-cities] mailing list, fewer than 1% of South Koreans are still using dial-up to access the Internet; DSL, cable modem, and fiber have captured the market.

In the United States, despite a 42% increase in broadband users from 2002 to 2003, nearly half of Internet users, according to a recent Pew study, are still on dial-up. Once again, here is my favorite (tongue in cheek) marketing slogan for economic development: "Our region--almost as good as South Korea!"

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WiFi and warchalking as marketing

Schlotzky's, the popular deli chain with hundreds of stores across the country, has been rolling out their free WiFi offering with great success, apparently. The original plan had been to provide it only to the company-owned stores (95% of the stores are owned by franchisees), but the popularity of the WiFi offering has attracted the attention of the franchise owners, who want it for their stores as well.

Part of Schlotzky's marketing campaign has included "warchalking," which the WiFi user community has adapted from the old markings hobos used during the Depression to indicate where a good place to get food was, or places to avoid. There is a simple set of symbols that are literally drawn in chalk on the sidewalks in front of locations where there is free WiFi.

Texas WiFi at rest stops

A press release from the Texas Dept. of Transportation announces that they are going to put WiFi in all state-managed rest stops in Texas.

They have an interesting rationale. DOT believes it will help get people off the roads more frequently to take a break and rest. It makes sense to me. I drive a lot, and the ability to stop and check my business mail conveniently has a lot of appeal. WiFi marches on.

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Korea's Simple Vision

South Korea has announced a new initiative called Ubiquitous Korea that has a very simple vision for the country:

To transform the country into a more modern and technology-oriented society, which has been nicknamed U-Korea for Ubiquitous Korea, the government is envisioning a future that allows people to have uninterrupted access to the Internet, via fixed lines or mobile networks, any time, anywhere.

Korea has already committed $80 billion over the next five to seven years to run fiber by every home and business in the country. This vision for the citizens and businesses of South Korea is crystal clear, specifies no particular kind of transport system, protocols, or technology, and and provides a measureable benchmark for knowing when they are done.

Is it ambitious? You bet? Can it be done in a year or two? No, and they know that. But is the right stake to plant in the ground? Absolutely. How about your region? What's the vision for technology and telecommunications?

Make your own diesel fuel

I've talked in the past about the importance of the Hydrogen Economy and the potential it has to create new economic development opportunities, but I think a better term is the Energy Economy. As the price of gasoline, diesel fuel, and home heating oil rises, I don't think we're all going to end up shivering in the dark.

Instead, we're going to see alternative energy sources become not affordable, but cheaper. The U.S. has already made one successful energy transition. By the end of the 19th century, virtually every tree in the Appalachian forests up and down the East Coast had been cut down, mostly to heat homes. Most old growth trees, regrettably, were burned in fireplaces.

As the price of wood skyrocketed, coal became a cheap and useful alternative, and the country gracefully made the switch without a collapse of the economy. Today, it's going to be alternative sources like hydrogen, wind, solar, and biomass that will take the place of natural gas and oil.

Wired News has an article on the growing popularity of biodiesel fuel, and chronicles the efforts of one dedicated individual who makes biodiesel fuel for his car from used cooking oil; it costs him forty-one cents a gallon.

Is the Energy Economy on the economic development radar of your region? Do you have technology companies and other kinds of energy firms that could give your region a competitive advantage?

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TV: Coming to a Web near you

A New York Times article (registration required) details a new service from Tivo, the makers of the wildly popular DVR (digital video recorder) that records programming on a hard drive so you can watch it later.

Tivo will add a new feature to its products that will allow the recorders to download and store TV programs that come straight off the Internet--completely bypassing traditional broadcast, cable TV, and satellite providers. Because the Tivo recorder can store programs for later viewing, the company anticipates that users with DSL or cable modem broadband services will download programs overnight and watch them later.

In the future, when we all have very fast fiber connections, we won't do that very much, because it will be easier and more convenient just to watch a program in real time. But DSL and cable modems don't have the bandwidth to do that.

Tivo has identified a sweet spot that is likely to be very lucrative for the company for a number of years but also marks the beginning of the end of traditional television. The Tivo recorder is matched perfectly with the limitations of current broadband offerings, and gives consumers more choice--which is what we all want.

As Tivo builds a marketplace, content producers (of TV-based programming) will fill it, and as the product offerings develop, consumers will be able to think about just dropping cable TV or satellite services.

How will it work? Here's a business: license the reruns of "I Love Lucy" for Internet distribution, buy a fat Internet pipe, format them for Tivo, and then sit back and collect, oh, say, fifteen cents every time someone wants to watch an episode.

This is going to be fun, and some non-traditional "media" companies that aren't located in Hollywood are likely to make a lot of money. As factory jobs move offshore, whole new industries are being created.

What about the global economy, you say? Suppose you took those "I Love Lucy" reruns and dubbed them into Chinese, Spanish, and French? Buy server space in those countries and start selling. Payments will all be automated, via Paypal or some sort of Tivo mechanism, so the biggest chore of the day would be log on to your bank account every morning and see that another half million people worldwide watched your programming last night. At fifteen cents a pop, that's $150,000/day to run a server and an Internet feed.

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SBC to sell wireless at McDonald's

SBC has inked a deal to sell WiFi at 6000 McDonald's fast food restaurants. Daily access will cost $7.95, and monthly access will cost $19.95.

The daily access cost is a bit silly. Who is going to buy a $5 meal and pay $8 to surf the Web while you drip special sauce on your keyboard?

The $19.95 monthly rate is more interesting. As a frequent traveler, it might well be worth it if I know I can walk into any McDonald's and get broadband access (without buying any food).

It may or may not sell many burgers for McDonald's. I don't think it will. As the reporter notes at the end of the article, the big winner may be SBC, who just sold 6000 DSL lines at the higher business class rate. My guess is this worth at least $10 million/year or more to SBC, and SBC is probably getting a big upfront payment to be the systems integrator and equipment supplier. It will be interesting to see if McDonald's is still providing this service in two years. Remember that "free WiFi" is never free; someone is always paying. If the service does not increase food sales, McDonald's will pull it.

If communities believe that affordable WiFi access, widely available, is important to local economic development initiatives, this demonstrates the problem of leaving it entirely to the private sector--it may or may not be available over the long term, and/or there may be many areas of the community that need it and may not have it.

It's hardly good economic development marketing to tell businesspeople that they should meet in McDonald's.

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Time for the FCC to go?

Declan McCullagh, the chief political correspondent for Cnet, has an excellent article that questions the need for the FCC.

The article is well worth a read just to review the long list of head-shaking mistakes and blunders that the FCC has made dating back more than fifty years. Among the FCC initiatives McCullagh lists as problematic is the 1956 decision by the FCC to keep Americans from owning their own telephones, apparently believing that it was better to have customers pay AT&T a monthly lease fee for years after the cost of the phone had been amortized.

Like so many government initiatives that were started with the best of intentions but never seem to "finish" the job, the FCC is now trying to regulate things that don't seem to need any regulation, like Voice over IP services. In general, the FCC has seemed to favor the large incumbent providers. If there is any sense in that approach, I think the FCC thinking seems to be to avoid turbulence in the market place and to avoid disruption of services to consumers.

But at some point, as technologies change, disruption is impossible to avoid without permanently vesting obsolete systems and technologies. Currently, the FCC seems to be trying very hard to prop up the incumbent telephone and cable providers. This keeps the marketplace stable, but at what cost? That kind of policy makes it more difficult for low cost competitive providers to enter the marketplace, and denies to consumers the choice to trade stable service for lower prices and/or access to more and different kinds of services.

At worst, the FCC is taking a dim view of consumers and businesses and their ability to sort out these issues. Why not assume that customers, over time, have the capacity to figure this out on their own, and give local communities and governments more flexibility to invest appropriately to ensure that their citizens and businesses have teh right kinds of services available at affordable prices.

Apple unwires stereo

Apple once again proves it is far ahead of other computer manufacturers with its just announced Airport Express.

Apple, which really pioneered consumer and casual use of WiFi, contrary to the ads Intel runs, has created a new wireless gadget that is Swiss Army knife-like in the features it has in a little box barely the size of a pack of cards.

  • It's a wireless base station--plug it into your DSL or cable modem port and you've got instant WiFi in the house at 802.11g speeds (54 megabits/second).
  • It's a WiFi extender. If your current base station won't reach to the other end of the house, simply plug this in the wall somwhere and forget about it. Now you've got a stronger signal where you need it.
  • It's a printer sharing device. Plug a USB printer into it and every computer on your wireless home network can print on the shared printer.

But wait! There's more!!

This device also has audio jacks. Plug it in the wall and then plug an audio cable into it. Plug the other end of the audio cable into your stereo or a pair of powered speakers, and you can now listen to all the music stored on your computer--anywhere in the house where you have an Airport Express plugged in. Your computer can now wirelessly stream music anywhere in the house where you have this tiny device plugged in the wall.

Apple has leapfrogged all of the stereo manufacturers, who have been touting complicated and expensive new kinds of digital music storage devices, and made whole house stereo dead simple, inexpensive, and truly plug and play--fully integrated with Apple's existing iTunes software.

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Watch out for China

An AP article in the Sunday Roanoke Times discussed China's growing influence on the IT industry. What caught my eye was the fact that China is promoting an alternative to the DVD format called "EVD." China wants to avoid paying royalties to the Japanese developers of the DVD format.

But wait, there's more. China is also pushing a new and different cellphone protocol that they claim is better than the GSM and CDMA standards used in the rest of the world.

Here's the thing--there are 1.3 billion potential customers for IT products and services in China--the biggest market in the world. It's markets that determine protocols and standards most of the time, not standards-making bodies, and it's not outside the realm of possibility that we could, in twenty years, all be using IT products forced on the marketplace by China.

That could be good or bad. But I'm not very optimistic--China is still not an open marketplace and does not have a democratic government. Couple that with an IT industry anxious to increase profits, and we could have a Communist dictatorship telling the rest of the world what IT products to use.

Is it a problem? Not yet, but it could become one.

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