Technology Futures

Every economic developer in rural America should print out this article from Wired magazine. Read, highlight it, make paper copies, and distribute it to everyone they talk to, especially local elected leaders (who unfortunately, are probably not reading Wired in any form, paper or Web). Every region that thought they were going to win big on biotech ought to toss that old plan out in the trash and starting asking, "Do we have what we need to bring manufacturing back?"

It's not the big, old nineteen-sixties manufacturing that is coming back. It is the new, small, lean, technology-enabled start ups that are going to bring good paying manufacturing jobs back to the U.S. And they need a few things, with one of them being good, inexpensive broadband. Without it, they can't take orders, send out CAD drawings, upload CNC programs, provide customer support, and do everything else that broadband supports in the modern manufacturing business. Rural America has the best workers in the world, hands down. But without the infrastructure needed by these new companies, rural regions in the U.S. don't have a chance to play.

Here is a lengthy article, but if you are interested in cloud storage services, it is an excellent primer on the advantages and risks. Cloud services, in many ways, is no different than the old mainframe computing environment, gussied up with a snazzy interface. Here are my own thoughts on the topic.

• Cloud computing is already the latest industry buzz phrase. If you thought "Web 2.0" was mostly baloney, strap on your kidney belts, because "cloud computing" or "cloud services" is going to be tacked on to every half-witted IT start-up for the next three years. Like all IT bubbles, 90% of these lame-brain services will fail.
• If you are storing something valuable in the cloud, make sure it is backed up somewhere else, since the failure rate of these cloud businesses is going to be very high. We're already seeing these ventures fail, and by fail, I mean that if you are lucky, you get an email giving you a week to get your data off the cloud server. If you are unlucky, the cloud just stops working, and your data is gone forever.
• What this means is that either the cloud can be part of a well-thought out disaster recovery plan, or it can be an integral part of your workflow, or both. But putting all of your trust in a third party with your data stored who knows where would be foolish. You still need local backups and backups that give you physical access to your own data. There is still nothing cheaper as a backup strategy than a portable hard drive, or a set of them.
• The cloud works best when it is as close as possible to the users of the cloud. Netflix is a cloud-based service, and a major cost, if not the biggest cost that Netflix has is just hauling the video bits across the public Internet to customers. If Netflix mounted servers on modern, high performance, community-owned fiber networks, its transport costs would go down dramatically, and it could instantly deliver content in HD format instead of low-resolution SD format.
• As more cloud services become available, the value of community-owned fiber networks will increase dramatically; cloud services will be relatively high margin compared to the old "triple play" model. The incumbents don't really have a strategy to provide high performing cloud services on their antiquated DSL and cable networks. Example one is the fight Comcast is picking with Netflix. Comcast is going to lose that one, because they are basically admitting their network can't handle what their customers want.

Community-owned broadband networks have a bright future and will be the engines of economic development if they can weather the collapse of the incumbents. The fight in North Carolina is, at core, a rearguard action by the cable companies to prevent that collapse by making competition illegal at the economic expense of the communities they purportedly serve.

Just when you thought you had heard it all, North Carolina legislators are about to pass a law declaring the state a broadband-free zone. An amendment to a very bad broadband bill will declare that "broadband" is any service that is "occasionally capable of achieving 768kbps downstream and 200kbps upstream." This is 1/5 of the feeble national goal of 4 megabits downstream and 1 megabit upstream. If there was ever a declaration of war against economic development, this is it. If it were 1920, it would the equivalent of outlawing paved roads, on the theory that "our daddies rode horses, and that's good enough." If it was 1930, it would be the equivalent of outlawing community sewer systems, on the theory that "I grew up using an outhouse, and that's good enough."

Meanwhile, city leaders in Chattanooga, Tennessee and southwest and central Virginia are rubbing their hands in glee.

AT&T wants to buy T-Mobile, which would make AT&T the biggest cellular provider in the U.S. Meanwhile, CenturyTel wants to buy Qwest. The 1984 breakup of Ma Bell and the 1996 telecom deregulation is slowly being undone as telecom in the United States is re-aggregated into enormous monopolies with antiquated business models based on maintaining a monopoly by any means possible. The incumbents are not going away, and I continue to believe the telecom giants could be turned into viable, useful businesses if they changed their basic business models, but that does not seem to be happening. When small companies like Frontier (which has buying up big chunks of Verizon's rural service areas) and CenturyTel are able to buy much bigger incumbents, it is a sign that these businesses are failing. Meanwhile, legislators are eager to prop up these businesses with legislation of the kind trying to be passed in North Carolina that prohibits communities from trying to take their economic future in their own hands. It is an absolute disaster for rural America.