Technology Futures

CNet writes about the next potential spam horror--voice mail spam sent to your Voice over IP telephone. VoIP phones have an IP address, just like your computer, and spammers will probably figure out a way to send spam right to your phone.

Indium sounds like one of those made up compounds, like Intel's "Itanium" or Volkswagen's "Turbonium." but indium is a little known metal that is essential to the manufacture of LCD panels. The Wall Street Journal reports on a potential shortage of the transparent, conductive metal. It's refined from the tailings of commodity metals like zinc and lead.

USA Today (Monday) has a front page article (Business section) on AT&T and its decision to get out of the consumer market for local and long distance services. Opinions are mixed on the wisdom of this approach, but the company does not really have much choice. With the FCC decision to allow the regional Bells to charge whatever they like for wholesale access to their infrastructure, AT&T could no longer profitably offer local dial tone service.

As I've said before, I think that the FCC made the right decision. If the Bells are expected to compete with unregulated companies (e.g. the cable and WiFI firms), it does not make sense to hobble them by requiring them to sell their own network to competitors below market rates. It is no coincidence that since that ruling a few months ago that the regional Bells have begun to announce FTTP (Fiber To The Premises) projects--they finally know they can make money doing so.

Buried in the article is a one line reference to the "Cable-Phone Wars." One reason the phone companies have finally jumped on the fiber bandwagon is that the cable companies have captured a large part of the broadband customer base by investing early. DSL is now selling in most of the country for about $15 less than cable service because the phone companies have to do something to get customers back--like actually compete on price and service. Horror stories abound, but generally, the cable companies, which tend to have more local offices and real service people working for them, seem to be winning the service battle.

The phone companies, in a better late than never strategy, are winning the price war right now. This is all good for consumers, up to a point. Quality of Service (QoS) is still shaky for both cable and DSL. Both are copper-based legacy systems that were never designed to deliver high speed data to homes and small businesses. Fiber and wireless can deliver data much better, but can't always provide the content (e.g. cable TV) and/or some services (like dialtone)--yet.

Information Week has an interesting article about SBC and Verizon. The two big phone companies are selling off their rural landlines to raise cash to run fiber to their higher density urban and suburban customers.

So instead of complaining about your local phone company, buy them out! The neat thing here is that if you buy out the lines, the customers come with them, so you have instant cash flow. Here's the business plan:

I'll be on vacation through August 9th, and updates may be light. Have a great week!

CNet has a terrific article on community broadband and the policy issues surrounding community development of telecom infrastructure. It's a must-read article; it's long but provides an excellent overview of community telecom landscape, including the benefits communities are seeing, the anti-competitive opposition from the big companies, and the lackluster support for these initiatives at the Federal level.

The EETimes has an interesting article on how U.S. cellular providers are choking off innovation and profits in the electronics industry. As I have long predicted, cellphones are absorbing the features of standalone gadgets like PDAs; PDA sales have been flat for some time. One of the hottest "gotta have" gadgets is the Palm Treo 600, which is a cellphone with the Palm PDA built in.

So what's the problem? Fewer things (and fewer chargers) to lug around sounds good, right? Not when you can't buy any of the new gadgets on the open market. Try buying JUST a Treo 600. You can't do it. You have to buy a cellphone plan with it; when you do so, you get a discount off the "Manufacturers Suggested Retail Price" (MSRP), which we all know means nothing in an open market.

By tying cellphones to service plans, the cellular companies have created an odd kind of monopoly, in which they have captured and now control the marketplace for handheld consumer devices. The EETimes article discusses the potential impact on the digital camera market--as cellphones get megapixel cameras built in, the digital camera marketplace will disappear. Not only that, consumers lose choice and competition, which keeps prices low. MP3 players are another threatened market; by adding extra memory, cellphones become music players, and the MP3 marketplace disappears.

Consumers are already losing in this situation, and it will only get much, much worse. Bundling, which is what the cellular providers have been doing, is a classic strategy for locking a marketplace up and creating a monopoly. In effect, gadgets like the MP3 player and the digital camera become free, in the sense that the real cost is hidden in the cellphone service contract. And the cellphone companies are now demanding two year renewals on service contract, making it harder and harder to switch.

Microsoft destroyed the market for Web browsers in exactly the same way. Internet Explorer, by giving it away, wrecked the market for every other company. But Internet Explorer is not really free; Microsoft bundles the cost of IE into the cost of Windows--you pay for IE whether you use it or not.

A Ziff-Davis news article chronicles a series of new broadband projects and applications using broadband, and calls broadband a "necessity."

I reported here last week on new data that shows that broadband is now in about 30-35% of American homes. The new study was widely reported in the media, and Anthony Townsend, who is doing an extended study in South Korea on the social and economic impacts of broadband in the country, reports that the news "...made my Korean friends laugh at how far behind the US is."

There are still plenty of community leaders and elected officials who are not taking broadband seriously. Bluntly put, it's a critical economic development issue. Ignore it at your peril.

This article that summarizes recent growth in broadband use in the U.S. is a must read for economic developers. If your community is behind in broadband use compared to the general population, you have a serious problem that demands immediate and continuous attention.

I'm always amazed at how badly some Web sites perform. Here are two examples I found yesterday.

I visited the site of a national architecture/design firm that is well known. I could overlook the annoying Flash animation on the home page that made it virtually impossible to read anything (a product of the MTV generation, undoubtly, who believe that any image that remains on a screen for than ten seconds is "old fashioned"). But within two clicks, I found myself on a page that informed me that I was using an "antique" browser and that I needed to immediately upgrade to Explorer 6.0. Yes, the one that CERT, the national Internet security folks have said is a serious hazard that should not be used. It is supremely arrogant for a company to ridicule potential customers by telling them they have "antique" browsers (I was using the latest version of FireFox, which was released about three weeks ago--hardly "antique"). It costs almost nothing to design a Web site that works well on a variety of browsers. It is intellectually lazy not to do so, and from a business perspective, just plain foolish.

But wait--it gets better. This national firm also has a Web design division. When I clicked on that link, I was taken to the home page of one of these firms that buys up domain names and sits on them. Huh? You want me to hire you to do Web design but your own Web site link doesn't work? I'll pass on that.

We're moving a few blocks away next month, and I decided to see if I could DSL from Verizon. Verizon has finally adopted the strategy of most of the other phone companies, which is to price DSL at $30 to compete with the cable companies' Internet service, which tends to run $10-$15 more. I quickly got to a page that told me to enter my area code and phone number, and in a "few moments" it would tell me if I could get DSL service. I waited a "few moments," staring at a little blinking animation that was supposed to tell me something was happening. I gave up and went on to other work, but left the browser window open. About an hour later, I checked back....still blinking, still no indication of whether or not I could get DSL at the new house. Hmmm...think I'll stick with cable modem service a while longer.

In a widely reported story, Apple's iPod will be given to all Duke University freshman this fall.

The handheld computers will be loaded with course materials, lecture notes, and other university-related materials. While at Virginia Tech, I was involved with freshman orientation (providing information on university computers and networks), and I can tell you the incoming students get an enormous stack of paper, most of which is probably never read.

We just rented a beach house for a week, and the contract had a list of amenities. To my surprise, broadband Internet access, a computer, and WiFi comes with what is a very moderately priced beach rental.

It's one more signal that your region, to be competitive in the global economy, needs to be working with your local hospitality, recreation, and travel businesses to make sure they understand this is what travelers want and expect.

We hear continually about the "problems" of the airlines. I had a few problems with an airline myself yesterday as thunderstorms buffeted the East Coast and snarled up traffic.

I was trying to leave Manchester, Vermont and get back to Roanoke, Virginia. Under normal conditions, the two leg journey (through Dulles in D.C.) takes just four hours. Yesterday, it took ten hours, mostly for no good reason.

Knowing the weather was causing problems, I showed up at the Manchester airport about four hours before my scheduled flight. At the ticket counter, United refused to book me on an earlier flight unless I paid $100 extra. I persisted, and I was told I could try standby for no extra fee, so I opted for that. I went through security and went up to the gate where the earlier flight was leaving, and discovered that the noon flight to Dulles was just getting loaded (four hours late...a bad sign).

I tried getting on, but the gate attendants refused to talk to several of us on later flights that wanted to get out. Talking among ourselves, we decided it was a lost cause, and a couple businesspeople left to go get some dinner. I lingered at the counter for another minute, and a different gate attendant walked up and asked if anyone else needed to go to D.C. I stepped up, and she said, "Oh, you need to go on this flight, because your flight is canceled." Huh? I'd been at this gate for nearly an hour, and no announcement had been made. When did they plan to tell me? She changed my ticket and put me on the plane, which had at least a dozen empty seats. They held the plane a bit longer, and filled all the seats. So far, so good, I figured...I'd get home tonight.

When I got to Dulles, I tried to repeat that. I went to the gate where an earlier Roanoke flight (late) was leaving. They had just started boarding, and I counted only about fifteen people getting on a fifty seat regional jet. Several of us tried to get rebooked on the flight, but the gate attendants ignored us. Finally the flight left, and I was able to get one of them to direct me to the gate where my flight was leaving.

State officials in New Hampshire have announced that they have "discovered" that chat, email, and other Internet services are "two way communication" and have decided that those services fall under the umbrella of a statute written in the early nineties (before the rise of the Internet) that taxes telelphone services.

I would venture to guess that the majority of my readers have broadband access, either at the office, or at home, or both. If you are someone that has to use both, you know what the differences are--for those that have broadband at the office and at home, it is easy to forget how slow dialup really is.

The Roanoke airport deserves kudos for providing free WiFi access while bigger airports like Atlanta and Charlotte still don't offer this service. Like it or not, WiFi in public places is fast becoming just another amenity, like rest rooms, water fountains, and sidewalks.

The owner of Budget Suites of America, Bob Bigleow, has had a secret operation at work for the past several years in Nevada, building a space hotel. Not surprisingly, one of his closest associates is Burt Rutan, owner and designer of SpaceShipOne, which flew into space just a couple of weeks ago.

Bigelow and Rutan together are creating synergy. Rutan's spaceships will attract a lot more paying customers if he has somewhere to take them, and Bigelow's space hotel needs an inexpensive (i.e. non-government controlled) spaceship to get folks to and from orbit.

Sound crazy? No, it's the global Knowledge Economy at work. The article is long, but well worth reading to the end, where Bigelow describes how he has cut costs ($200 million versus the $50 billion Nasa has spent) by shopping globally. Bigelow cited one example of a subsystem he needed; an American aerospace company wanted $100 million to design and build it. Instead, he bought it in Europe for $1.3 million.

Like it or not, we're at the dawn of a new age. No, it's not the Information Age; that was over 2 years ago. In the Knowledge Economy, as Bigelow is demonstrating, who you know is more important than what you know. Bigelow has been able to reach out globally, forge business relationships with firms in other countries, and design and build better and faster than NASA. NASA is stuck trying to make "old" relationships work; the government agency has had numerous failures and despite all the money it has spent, has not been able to advance its program.

What about your region? Are you still stuck trying to make "old," Manufacturing Economy relationships work? Are you helping your existing businesses learn to shop globally for the parts, products, and services they need to be competitive in a world market? Are you throwing away the rulebook and starting with a fresh sheet of paper to create your economic development strategy?

An article in today's Wall Street Journal (B1) details the success of Hutchinson Technology, a company with four plants in southern Minnesota. Hutchinson manufactures most of the world's supply of the support arms used to hold the read/write head in hard drives. Most of its output is exported to Asia, where most hard drives are manufactured now.

An article in today's Wall Street Journal (B1) discusses the growing trend, mostly among businesses, to take advantage of ability of VoIP to offer a choice of area codes. Area codes like 212 and 415 (New York and San Francisco) are very popular.