Technology Futures

I'm not even going to try to link to them, but a flood of privacy-enabled apps and services are already beginning to appear.....heavily encrypted email apps, encrypted VPN apps, Web browsers that automatically route queries through proxy services that mask your IP address....the Internet was designed to survive a nuclear holocaust. Snooping by the NSA....anything the NSA can do, geeks can probably route around without a whole lot of effort.

This is 2007 data from the U.S. Census Bureau, which reported that half of U.S. businesses are located in the home. Half, as in 50%. Which validates what I began saying ten years ago: Neighborhoods are business districts.

Communities that ignore this data and continue to hope that marginal DSL, asymmetric cable, and too-expensive cellular data services are "good enough" are closing off their own economic future.

The incumbents have cleverly turned broadband into an entirely pointless and futile debate about speed, when speed really has very little to do with it. Here's why:

• If you are building a fiber network today, it costs virtually nothing extra to provide a Gig connection to every home and business. Gig network gear is now priced to place everywhere. The telephone and cable companies continue to talk about Gig networks as some kind of hideously expensive, esoteric option. Amazon's Kindle Fire HD tablet costs more than the Gig box we use in our networks now, but no one says the Kindle table is too expensive.
• The incumbents slyly turn every discussion of bandwidth (which again, is mis-guided) into another pointless argument by claiming, "No one needs a Gig of Internet." Agreed! But we are talking about the size of the road, not the size of one truck that uses the road. Broadband is the road, and when we deliver a Gig on our networks, it is a Gig digital road to everyone's home and business. A package of Internet is just one "truck" that uses that road. Other "trucks" include business videoconferencing, access to the company VPN from home, large file transfers, and many other services (trucks).

The incumbents have been hugely successful with these two strategies of diverting the discussion to stuff that does not really matter. Instead of talking about the real issue, everyone ends up confused and frustrated with the misinformation.

I am reminded of a household study done in a rural county in the northeast about seven years ago. This was a very large, relatively isolated area, and it was the first time economic developers had ever polled households to see if there was any business activity in the home. They were shocked to discover more than 400 businesses that had never appeared on their radar. And I continue to see that today, with a continued over-emphasis on industrial parks, retail, and other traditional lines of business. It's not that those should be neglected, but with small and start-up businesses adding most new jobs.....neighborhoods and rural roads are business districts that need time, attention, and support from economic developers and community leaders.

Via Eldo Telecom, news that in England, people are moving from the country to larger towns because of bad Internet access. As Fred Pilot of Eldo points out (correctly, I believe), rural communities in the U.S. are also at risk. It's hard to imagine how anybody can manage with a dial up connection at home, which of course leads to people parking in the McDonald's parking lot so they can retrieve their email or so their kids can do their homework. Fred also points to a 2009 study showing that home buyers in the U.S. rank fiber broadband service as the number one amenity they look for in a property.

Apple and Roku are dominating the IP set top box market, with Apple owning 56% of this still small market segment. I'm not convinced that Apple or Roku will ultimately end up with a major portion of this market, as the total number of households that have converted to OTT is still very small. Rapid market growth in the next several years could let a yet unidentified firm capture a big portion of this. As Blackberry has demonstrated so aptly, having a big marketshare early does not automatically lead to market dominance.

But I've been saying for years that traditional cable TV, and to a lesser extent, satellite TV, is dead, dead, dead. It is an antiquated business model predicated on sixty year old coax technology. And satellite TV uses the same business model over a similarly bandwidth-constrained medium.

But Apple certainly has an early lead, and Google's Chromecast seems to be off to a slow start, but Google can play the long game. And startups like SimulTV may tear off an interesting piece of the market because they have changed the interaction model completely. If companies like SimulTV can master the content license problems, a lot of people will use their services.