Technology Futures

Internet discussion forums and techie news sites are filled with talk about Google's latest attempt to take over the world. The search company has launched an instant messenger service (Google Talk) that is interoperable with other common IM systems like Apple's iChat, and AOL's system.

The Register reports on more delays certifying WiMax equipment. New wireless equipment has to be tested to ensure that it meets the specifications of the 802.16 standard before it can be sold.

It is just one more sign of the danger of spending too much, too fast on wireless "solutions" if you don't have a technology master plan in place. An example of this is Philadelphia's plan to cover most of the city in a WiFi blanket.

WiMac boosters like Intel think the new wireless technology is just the thing to solve everyone's broadband connectivity problems. Of course, the firm makes WiMax equipment, so you have to take their marketing hype with a grain of salt.

But WiMax and it's little brother, WiFi, offer a unified wireless model that says, "Let's use the Internet to transport everything, including voice phone calls (via VoIP)."

On the other side of the ring, we have the cellular companies, who know that VoIP and wireless have the potential to make their old-fashioned wireless systems obsolete.

The Internet crowd have technological superiority and simplicity on their side. The wireless Internet model is just a better way of doing things. The problem is that virtually no infrastructure is in place to offer those services, and it will cost billions to get enough service in enough places to create markets of paying customers.

Iowa may be the new battleground for broadband. Successful projects like the Cedar Falls fiber system and the statewide Opportunity Iowa project has shifted the battle from Louisiana, where the phone and cable companies lost a battle against the city of Lafayette.

The most interesting thing in the article is the arrogant attitude of the president of Quest:

Max Phillips, Iowa president of Qwest Communications International Inc., said the interests pushing the community fiber programs are misguided because people should focus on the speed and quality of service, not the medium that carries it.

Communities that rely on cable franchise fees to finance local government initiatives like a public access TV channel may have to find other ways to pay for those services.

As the FCC continues to level the playing field for telecom services, cable franchise fee revenues will likely disappear.

Communities will have to reposition this as a right of way fee, instead of a tax on the cable franchise but not on other right of way users. It can't just be regarded as easy money from a single company.

Much has been made in the past week or two of the rising oil prices, with much prognosticating about inflation, not being able to afford to drive to Walmart (the New York Times), and other mostly negative economic impacts.

For a different view of the situation, the authors of the book Freakonomics, a popular bestseller that deconstructs the economics of a lot of different phenomenona, see no "the sky is falling" scenarios, and in fact, forecast lots of opportunities.

Imagine if there were no public roads. We would have to pay a private company to drive to and from work, probably in the form of tolls and/or a monthly fee. We might not be able to get certain kinds of goods and services delivered to our homes and businesses because the toll fees made uneconomical for a company to provide delivery services in some areas. In many rural areas, there would be no paved roads, only dirt lanes, as no private road company could make enough money to cover the cost of paving.

What's worse, some essential public services would be limited or unavailable. Residents in rural areas would be without public safety or fire protection whenever the dirt lanes were blocked by snow or muddy from spring rains--no private company could afford to plow the snow or put gravel down.

This Newsweek article by technology writer Stephen Levy ought to be printed out and mailed to every rural legislator in the country.

The choice of the word "sticks" is unfortunate, but Levy hits the nail on the head. He compares the possibility of getting $500 million from the USF for rural telecom to the huge roads bill ($286 billion), and this gross disparity highlights the lack of understanding that legislators have of the issues facing rural communities.

It's not really a broadband crisis. And I've said so many times before, money has nothing to do with it. It's a leadership crisis. We're spending $286 billion of our tax dollars on roads--20th century transport systems. What is wrong with this picture? Why are our legislators so woefully misinformed about the issues?

USA Today has an interesting article about telco giant SBC and the company's plans to deploy IP TV to 18 million households.

In the article, SBC COO Randall Stephenson shrugs off the $4 billion cost of the effort as "not much money for us to burn." That statement ought to make FCC officials sit up and take notice, since recent FCC decisions, we are told, have been designed to help the telcos fight off competition.

If SBC can blithely shrug off a $4 billion gamble, I would say the company does not have enough competition, rather than too much.

While the music industry plays the fiddle as their 20th century distribution model burns down, some bands are not waiting around. A band called Sexohol from Los Angeles has come up with some pretty interesting ideas.

If you go to their Web site, you can buy an Apple iPod Shuffle for just $10 more than what Apple charges. It comes pre-loaded with an album of songs from the band that you can load right into iTunes (Mac and Windows) or into other digital music systems.

Want to hear what the band sounds like before buying? You can download a free Dashboard widget for Macs that streams one of the band songs right onto your computer. This is especially clever because the widget (just a small piece of software) allows the band to distribute a "click to play" version of their song without actually distributing the song itself (because it is streamed from a server).

This article on Ethiopia's countrywide broadband project, which is four years old and beginning to deliver results, puts U.S. states to shame. Impoverished Ethiopia gets what many rural states and communities in the U.S. are still trying to understand. Here is the money quote from the Ethiopian prime minister:

Because we are poor, we can’t afford not to use ICT.

Exactly. Distressed rural and urban communities in the United States can't afford not to invest in IT. What is important about the Ethiopan effort is not what they did (the technology choices they made are tied to other infrastructure issues), but the fact that they recognized a problem, created a plan, funded a plan, and followed through.

Michigan gets a hat tip for its Cool Cities program. They apparently not only read Richard Florida's Rise of the Creative Class, but also decided not to just keep doing the same old thing and expecting different results (a typical economic development response).

The Cool City principles are worth reading. Written like a vision statement, they identify key ideas and concepts that the effort intends to pursue.

With the recent FCC decisions that have classified cable modem services as an "information service," which frees it from telephone-style regulation, and the decision a week ago to drop the requirement that phone companies sell DSL access to third party providers, we now have, for all intents and purposes, a broadband duopoly in the United States.

Either you buy broadband from the cable company or from the telephone company. Not a thrilling choice.

Expect the phone companies to really push hard to sell DSL services. They will begin rolling out higher speed DSL (e.g. ADSL2, ADSL2+) that can offer download speeds of 8 megabits/second and as high as 24 megabits/second. They will try to get new phone subscribers to sign up for bundled DSL services that include voice telephone, and DSL will become the new "basic" phone service. But instead of basic phone service (e.g. local calling) costing about $25/month, "basic" service will include local, long distance, and broadband in a bundle costing $50-$60/month. Long distance will be thrown in for free, essentially, and the Bells plan to try to kill the long distance companies by doing so. And they will likely succeed.

While the 20th century telecom dinosaurs are fighting it out in places like Texas for 20th century legal rights to 20th century content distribution, the 'net is quietly solving the problem.

An Open Source effort (FOSS is becoming the accepted acronym--Free and Open Source Software) is building the 21st century video distribution system, called DTV. Participatory Culture is putting together a seamless, easy to use, end to end video distribution and viewing system that is completely free, requires no franchise fees, and can deliver any quality of video, up to and including HD TV. The software is currently in beta release, but the interface for the Mac version is excellent and easy to use. It supports downloading for later viewing, so you don't have to watch at any particular time. In other words, it is a personal Tivo-style system, but with a much wider range of material from many more sources.

Unlike a lot of other folks, I'm not greatly worried that SBC and Verizon spent millions to influence some new laws in Texas. The Texas legislature, after a lengthy fight, has agreed to give the phone companies a statewide franchise to offer television content in Texas. This saves them the trouble of going to every community in Texas and negotiating individual franchises.

But let me also be perfectly clear--I don't like this, but--but--I'm not greatly worried by it. Two different things.

Here's why I don't like it.

First, it takes authority away from local communities and gives it to the state. This actually has nothing to do with telecom per se; I am always troubled when communities lose decisionmaking power.

There was an article in yesterday's USA Today about the cellphone companies and their race to push advanced wireless services. They have to do this because basic cellphone service is not very profitable, and they also know that VoIP, enabled by WiFi and other open standard wireless systems, will inevitably eat away at cellphone use.

Sprint/Nextel, the recently merged cellphone companies, are trying to leverage 2.5 gigahertz licensed spectrum that the company owns. They bought it years ago when no one thought it was worth anything, but today, the firm thinks they have a competitor to WiMax. Sprint/Nextel owns the licenses for the spectrum in 80% of the major U.S. markets, which sounds uncomfortably like a monopoly.

Intel, the big chipmaker, has jumped on the muni broadband train and is helping communities take the issue to state legislatures.

In one sense, this is good news, because like it or not, legislators are more likely to listen to an Intel lobbyist (who can make campaign donations) than they are to the citizens that elected them (for the most part). Intel and other tech companies can provide a counterbalance to the enormous influence of the telephone and cable companies.

But has Intel just suddenly decided that they should do this for the good of communities everywhere. No. Instead, they are angry that the wireline broadband providers are busy arranging de facto service monopolies that are locking out wireless systems, which are the current darling of a lot of vendors out to make a quick buck by selling huge wireless systems to unsuspecting community leaders.

Yahoo! reports on a study that shows broadband users are watching less old-fashioned TV. The data is welcome, but this has been a trend since the early days of the Internet, more than ten years ago.

It's not hard to figure out why: you get to choose what you look at, instead of being forced into the ancient "channel" system where you have to watch something at a certain time (and Tivo, successful as it is, has a limited lifespan, since it just props up old-style TV). You also don't have to sit through 12 minutes of commercials to watch 18 minutes of tepid cable programming.

While our FCC dithers about the best way to preserve legacy telephone and cable services, Singapore has pushed VoIP into the mainstream by creating a system for managing telephone numbers assigned to VoIP service providers. Singapore is not requiring VoIP providers to give subscribers access to emergency systems (911 services), but is offering incentives to those companies that do make the effort. This is much more sensible than the confusing and potentially punitive policy the FCC is trying to enforce.

And the FCC is not really the main problem. Our Congress just passed a huge roads appropriation bill, which is terrific. We're trying to fix our twentieth century highway system, while other countries are building twenty-first century highway systems.

Lately, I've found a very simple way to find out if the economic developers in a community or region are staying current with job and employment trends. I ask them just two very simple questions.

Question one: How many people in the United States make a full time living from eBay?

Question two: How many people in your region make a full time living from eBay.

The answer to the first question is easy. Currently, about 724,000 people make a full time living from eBay, up from a half million last year.

If your economic developers don't know the answer to the first question, your region is in trouble, because it says your economic developers are not keeping their eye on microenterprise trends and the ability of microenterprises to contribute significantly to the local economy.