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

Lucent buys VoIP manufacturer

Lucent, the manufacturing arm of AT&T, just bought Telica, a manufacturer of VoIP equipment. As I've written recently, AT&T seems to understand the potential of VoIP to revive the companies fortunes. AT&T has floundered ever since the breakup in the mid-eighties.

The most recent mess was at AT&T Wireless, which was apparently run by a hapless and arrogant group of what former AT&T folks call "Bellheads," which are company people that can't step outside the traditional boundaries of the the "old" telephone business.

But AT&T is making all the right moves--they recently announced $20 unlimited local AND long distance VoIP service, firing a shot across the bows of the regional phone companies (e.g. Verizon, SBC, Qwest, etc).

The purchase of Telica gives them the ability to sell their own equipment to their VoIP customers--a nice double play.

The most interesting part of the article was that Telica says they have sold three million VoIP handsets. Yes, that means three million VoIP users from just this one company. That matches up pretty well with estimates of 4-5 million VoIP users in the United States.

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IT bubble coming?

Cnet discusses a Gartner Group report that says all those computers purchased in 1999-2000 are going to be replaced soon, and that the number of new machines going out the doors of manufacturers will actually exceed the number sold to fix Y2K problems.

With demand increasing, we'll see fewer price cuts, and some modest price increases. But it also represents an opportunity for local computer manufacturing operations that imitate the very successful Hornet Technologies model. For a rural community, the Hornet model makes a lot of sense--it's a much better idea than putting hundreds of thousands of dollars in envelopes and mailing that money to Texas and California.

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Nintendo handheld will drive WiFi

Nintendo's new DS handheld will include WiFi. The successor to the wildly successful GameBoy will allow DS owners to play games with other nearby DS users and/or access the Internet via a WiFi hotspot.

That may sound ho-hum, but kids with WiFi devices will change the way we think about WiFi. Kids will want it at the candy store, at the gas station (download some new games while Dad is gassing up), at parks and recreation centers--in short, everywhere.

Communities should start thinking now about WiFi zones and WiFi blankets (collections of hotspots). And guess what? Whole families will want WiFi access, and many will happily pay for a family subscription.

Anything that expands the marketplace for services is a good thing. Along with that, we've also got to think about the implications of kids being connected to the Internet anywhere they go, and in many places where Mom and Dad can't supervise. It's a whole problem itself, and we need to think in parallel. We can't stop this new technology, but we do have an obligation, to our own families and children, and to the community at large, to make sure we use it sensibly, and that our kids are prepared to use these new information portals appropriately.

Where the spam comes from (and goes to...)

Here is an interesting little report on where email spam originates, and where all those Web sites in the spam are located.

As it turns out, most email spam originates in the United States, but most of the Web server links that the spammers want you to click on are in....China.

Why, you ask? The email starts in the U.S. because we Americans have this terrific entrepreneurial spirit. In other words, it is easy to start a spam business here. In most other parts of the world, it takes months and months and a ton of red tape.

The servers, though, are located in China because that country still has a pretty sturdy Cold War attitude toward certain kinds of international law. What I mean is that even if you can identify the Web site selling enlargement products, you are not likely to have much success prosecuting the site or shutting it down if it is in Communist China.

China also happens to be the worst copyright violator in the world.

Just another example of the global economy at work.

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Number portability reaches rural areas

CNN reports that cellphone number portability is about to reach rural and less populous areas of the country. The introduction of the service has been phased in, with the 100 most populous parts of the country getting it first. Customers will be able to move their cellphone number from one company to another, and will also be able to move a landline number to a cellphone, with certain restrictions on area codes.

All in all, this is a small but important step to making the telephone network more like the Internet. Domain names belong to you, not your Web hosting company, and you can move your domain name from one provider to another, based on price and quality of service, etc. We want the same kind of flexibility with phone numbers. The current situation is particularly difficult for businesses, who can't easily change phone numbers without disrupting customer service.

In the old days (pre-Internet), phone number truly did have to be tied to infrastructure. But not anymore. We will all benefit in the coming years from increased competition for dial tone services, which is already bringing lower priceas and more/better services.

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WiFi startup stops

Cometa, a startup national WiFi hotspot firm, has shut down. Cometa was bankrolled by Intel, AT&T, and IBM, and planned to create 20,000 hotspots nationwide and wholesale them to other companies who would actually provide the end user service.

It was a good plan, but apparently poorly executed. No doubt the company was stuffed with execs from Intel, AT&T, and IBM, who apparently acted arrogantly and spent too much money too soon.

The problem with all of the firms planning national networks is twofold. First, WiFi will not take off, really take off, until there are widespread roaming agreements in place. Right now, if I'm at O'Hare in Chicago and want to check my mail via WiFi, I probably have to spend $10 for 15 minutes of access. Two hours later, in Omaha, some other company will want $10 for another 15 minutes. Even dumber, T-Mobile thinks I'll happily pay yet another $10 two days later as I pass back through o'Hare.

That's the state of WiFi right now. National roaming agreements, just the way cellphones can roam, where you pay a fixed monthly subscription, is the only thing that makes sense. Why are so many firms in the market despite the lack of roaming? Because WiFi is in a growth phase; for every customer who stops paying T-Mobile $10/day, two new ones pop up. It's exactly like the early days of dial-up modem access. But it won't last. Cometa is the first of many firms that will go out of business after wasting a lot of investor funds.

But I said there were two problems. The second is local, rather than national. Communities need ubiquitous WiFi to make it really useful, and just putting hotspots in hotels and McDonald's is not enough. Rural communities are especially unlikely to get much attention from the big national firms. The sensible approach is for communities to get involved in identifying appropriate antenna locations, mapping out a hotspot grid so that everyone in the community can get service, and in that fashion creating the incentives that will attract local and regional wireless providers to come into the market and sell services.

VoIP gets cheaper

Forbes reports that Vonage, the start-up Voice over IP company, has dropped prices while adding new customers at a furious rate.

Forbes speculates that pressure from AT&T's VoIP offering (six months of unlimited local and long distance service for $20) has forced Vonage to adjust their prices. Competition is a wonderful thing. Vonage now has 155,000 customers and is adding new ones at a rate of 666 per day.

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Where the jobs are

The Thursday New York Times had a fascinating article on the op-ed page (page A27) that is worth chasing down if you can snag a copy. It's a graphic and a couple of paragraphs on data from the Federal Reserve Bank about where the jobs are and are not. The bar graph really helps clarify and make understandable the changes we have been seeing in the job market over the past several years. It's no surprise that in the "Manual Dexterity," "Muscle Power," and "Formulaic Intelligence" categories, steep declines are being registered (Formulaic Intelligence includes jobs like bookkeepers, clerks, and typists--work that technology is shifting).

Steep increases have been registered in "People Skills and Emotional Intelligence" (financial services sales, nurses, recreation workers, lawyers), "Imagination and Creativity" (actors, architects, designers, photographers, cosmetologists), and "Analytic Reasoning" (legal assistants, scientists, engineers).

The authors, who include the chief economist at the Federal Reserve, note that Americans have, many times in the past, adjusted to changing economic conditions and have learned new skills. They also note that whenever these shifts take place, in the long run, people end up with better jobs that pay more. Finally, they note that "trying to preserve existing jobs will prove futile."

Communities need to learn what the jobs of the future are and make sure the training is available for them. The best thing about this--many of these jobs do NOT require four years of college. Two year colleges and trade institutes can provide the skills for many of these jobs.

India market crash not a surprise...

If you had read our recent book of the month Adventure Capitalist, you would not have been surprised by the market crash and unrest in India following elections. The author, Jim Rogers, predicted that India's rise in economic status would be bumpy because of the huge disparity between the rising middle class that has been fueling the economic development there and the desperately poor in rural areas, who represent a majority.

India potentially has a very bright future, but the country has to create economic conditions that most people can access, not just a few. America has, by and large, done a good job providing opportunities for people that are willing to work hard. That's why so many people want to migrate here.

Closer to home, our rural communities also face some challenges, but unfortunately, the population of U.S. rural areas is a minority, making it more difficult to influence politics and state and Federal spending. That's why I think rural communities need to look to the future, set a vision, and execute--with whatever resources can be mustered.

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A la carte cable television?

An article in the business section of the Sunday Roanoke Times talks about cable TV and the growing clamor for a la carte rates--in other words, instead of paying for 60,70, or 200 channels at a flat rate, you could pick and choose which channels you want to watch, and pay only for those.

I see two problems with that approach. The first is that it probably would not lower rates. It would increase the cost of billing, and since we are already paying fifty cents a month per channel (or less) now, just the cost of tracking which channels a household watches and billing for that would probably result in a net increase in the cost of programming. It would also probably reduce the number of channels available, but it's debatable whether that is a good thing or a bad thing.

My real objection is this: Why bother trying to force more rules and regulation on a dying medium? Cable TV is based on forty year old copper technology, and the current rate structure is based on what was technically possible in 1960 or so.

We already have a new, completely unregulated medium that is technologically ready for pay by the drink, consumer-choice driven television programming. It's called the Internet. Affordable, high capacity broadband (which we will all have in the next decade) is technologically able to deliver HDTV quality TV programming right now.

Let the cable companies continue to tinker with a dying and obsolete model. We don't need to waste time and effort at the local, state, and national level fussing with something that will be gone in ten years.

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