Technology Futures

In a widely carried AP report, AT&T has announced it is getting out of local dial tone and long distance in several states, and may abandon most other states shortly. There are two things going on here, and only one of them was discussed in the article.

The article correctly notes that the proximate cause for the AT&T pullback is the FCC ruling that allows the local phone companies to charge higher wholesale rates for their antique copper telephone lines. AT&T has been leasing these in bulk to provide local dialtone. The higher rates make it unprofitable for AT&T to do so.

On the face of it, this looks bad for local communities, as there seems to be less competition, and puts the local phone companies back near their previous monopoly status for dialtone.

What was not covered well in the AP article is the fact that AT&T is making a major push for Voice over IP local and long distance services. The company has wisely decided to abandon the antique phone service market and concentrate on selling what is going to count in the future. It's a smart move.

Some of the phone companies are not standing still, however. SBC has announced it will spend billions on fiber to the neighborhood and fiber to the premises, although the latter will be done only in new neighborhoods for now. The new system will have the capacity for a single channel of HD TV--much higher capacity than existing DSL lines, but still not what will be needed in the future. But the fiber has the carrying capacity--SBC is reluctant to put in the electronics, probably because of cost and because they are trying to control access.

Communities getting these new systems may breathe a sigh of relief that they don't need to do that telecom planning after all, but their headaches are simply being deferred to the future. A monopoly is a monopoly, and it does not matter much if it is a legal monopoly (the old, pre-1996 approach) or a de facto marketplace monopoly. Either way, the community, and especially businesses, may not have the range of prices and services they need.

Day by day, new technologies add more and more complexity to our lives while simultaneously making things better.

Internet radio has extended the reach of many local stations to literally, a worldwide audience. Expatriates can listen to hometown programming and news from anywhere in the world. The radio stations benefit from a broader audience, which allows them to raise advertising rates. Advertisers are happy because Internet radio provides better information on how many people are actually listening to the radio.

So what's the problem? HD radio (High Definition), or digital radio, both broadcast over the air or over the Internet, offers higher fidelity. But the music industry is flummoxed because as HD radio becomes more common, it will be possible to make excellent, high quality recordings off the air (which you can do now with any good FM signal, but most people don't bother).

If that is not enough to give record company officials nightmares, the thought of having listeners then use filesharing to "share" all those recordings over the Internet is about to send them right over the edge.

This situation has been building since CDs first became popular twenty years ago, but the Internet, giving music lovers the ability to share music, has made it worse. Amid the smoke and heat of the discussion, there is a legitimate issue about what constitutes fair use. Unfortunately, we have two polarized points of view. The recording industry wants to take back fair use rights consumers have had since Edison started making recordings. In their ideal world, we'd have to pay every time we listen or watch anything (not a good thing). On the other side a a group of mostly college age music listeners who think there is nothing wrong with sharing copyrighted music with the whole world (also not a good or thoughtful thing).

In the middle are a lot of people who think that the music industry is going to have to face the fact that the world has changed, and how record and movie companies make money will have to change along with the world. In the meantime, the entertainment industry is trying furiously to buy the best laws they can afford. Some Congressional reps and Senators, desperate to fill campaign coffers, are all to eager to help out.

What can we do? We need to talk to our own elected leaders--local, state, and Federal, and make sure they are knowledgeable about the issues. We all have a lot to learn, and avoiding all these issues makes the problem worse--ignoring the problems won't make them go away. It's just life these days--fast-paced, complex, interconnected, and all part of a global marketplace. Is it the end of the music industry? Not really, if they are willing to adapt. Apple's iTunes sold 800,000 songs in the first week in Europe--16 times more songs than the number two music download service. People are quite willing to pay for music, if the licensing and digital rights is done correctly.

Congressman Rick Boucher (D) of southwest Virginia has a broad coalition of industry and consumer rights groups for his
reform of the DCMA law.

Boucher's proposal to fix the worst excesses of the Digital Millenium Copyright Act would legalize the distribution and use of descrambling utilties and circumvention of copy protection schemes as long as no copyright violation takes place. Put another way, consumers would be no longer arrested for breaking and entering simply because they possess a crowbar, which is the way the current DCMA is written.

Boucher also wants to give the FTC broad new powers to police the labeling of CDs, DVDs, and other digital media. Currently, some CDs and DVDs have copy protection schemes that limit the buyer's ability to make copies, but the CDs are not always labeled to indicate that. This part of Boucher's plan is more controversial, since it expands the government's role in the entertainment industry.

It will be interesting to see how this effort progresses in Congress. The entertainment industry will likely spend heavily to defeat this bill, but the DMCA, as it stands, has limited innovation and dramatically curtailed the rights of consumers (i.e. voters) while giving enormous power to a few corporate conglomerates (which do not vote but donate a lot of money to political campaigns).

The always thoughtful Dan Gillmor has an article about Sprint's move to make the popular Treo handheld phone/PDA without a camera. Apparently corporate buyers don't want their employees using them to steal company secrets.

Gillmore raises an important point--how do we behave in a world where there are cameras wherever we go? In Blacksburg, nearly every streetcorner with a light now has a traffic camera that can be reconfigured quickly to become a surveillance camera, and Blacksburg is not a special case. These cameras are being installed all over the country and throughout the world.

Even places like lockerrooms now require rules about cameras, since a person can easily take photographs surreptitiously in a locker room now. Camera manufacturers are responding to criticism by having the phones make an audible "shutter" click to alert others.

Here we have a clear case of technology outstripping the rules and mores of civil society. Our leaders need to lead by encouraging thoughtful discussion and debate about what is appropriate.