Technology Futures

The Register reports on a new law enacted in Holland that can charitably only be described as "stupid." In a misguided effort to prop up the ailing music industry, the Netherlands has decided to impose a per megabyte tax on all hard drive-based music players, with the proceeds going to the music industry.

This means, according to the article, that the 60 gigabyte model of the iPod would have a tax of $235! According to the Register, Germany also has a tax on computer hard drives, and as they get bigger, the hard drive tax could exceed the base cost of the computer (that is, the tax will be several thousand dollars).

There are so many things wrong with this approach that it is hard to know where to begin. In the first place, the Holland law assumes that all music stored on portable music players is stolen, when in fact only a very small percentage is. So music lovers have to pay royalties twice--once when they buy the music, and again when they buy the music player. It's a windfall for the music industry, since only a small part of royalties actually go to the artist. It forces the music player retailers to become tax collectors, which is always a bad idea. And it will simply drive the purchase of music players out of the country. Holland is an easy drive from a half dozen other countries, and it's barely an afternoon trip to take the train to France, pick up an iPod, and go home.

The music industry does not have a "right" to make money. As markets and technologies change, businesses have to change too. This business of using laws to protect monopolies hurts communities and whole countries, as innovation and new products are simply driven elsewhere. It's a global economy, and Dutch lawmakers are naive in extreme to believe this law will work. It will only hurt the country's economic development as businesses see their customers go elsewhere, and not just for iPods. While they are across the border, they are likely to shop for other items as well.

I'm a big fan of microduct and blown fiber, and Emtelle is one of the world leaders in the technology. I think it is an ideal solution for community and neighborhood fiber projects, as it works with both passive and active optical network equipment, it's easy to install, and easy to repair--essential qualities for community-managed systems. But it's always been hard to explain without actually seeing it. This movie on the Emtelle site is short and illustrates how it works end to end (you need a Flash player plug-in for your browser).

Wired reports that a San Francisco AM radio station is going to an all-podcast format. The station is inviting people to create their own content and send it to the station, which will screen it and then make it available for download.

On another mailing list, I heard about a T-Mobile Web page that would tell you what kind of signal you are likely to get at a given street address in the U.S. Because U.S. Cellular offers nothing but bottom of the bin cellphones (they are not big enough to get deals to sell phones like the Treo 650), I thought I'd check T-Mobile.

The company has never had coverage in Blacksburg, but I thought I'd try again, since I have not checked with them lately. So I went to the page, typed in my street address, city, state, and zip code, pressed the button, and voila.

I got back a message saying "Input zip code is invalid."

Wow. That's interesting. Either T-Mobile is trying to tell me I live in an "invalid" place, or there is a bug in their code, or it's a really awful way of saying they have no coverage in my area.

Pick any one of those three choices, and you get to the same conclusion--somebody screwed up, either by not testing it adequately and/or by failing utterly to do a basic software ergonomics review to make sure the "error" messages made sense.

My guess: This little app was outsourced to a software shop in India, which did a bang up job of banging out the code cheaply and producing a slick little application. But you get what you pay for. Outsourced contractors rarely care much about little details like this; they are under the gun to get the work done quickly and cheaply for the client, and so they don't have the luxury of dotting the i's and crossing the t's.

At the same time that we see big companies getting bigger by relentless costcutting and globalization of production, why is there a parallel rise in small, entreprenuerial enterprises? Because the small entrepreneur has more skin in the game--he or she has to produce high quality stuff to be competitive. A two hundred person coding shop in India just has to get the next job. It's not either/or here....both have their place, and both can provide useful services.

Xerox wins some kind of special prize for the worst telephone support I've ever encountered. How bad is it?

It's worse than Verizon! (Note--not any more--see my updated note at the end of this article. Verizon, on the other hand, still has terrible customer service)

I have a Xerox printer/copier, and the hinge on the cover broke a few days ago. I bought a Xerox in part because I was assured that I could get service for it. I was tired of having to discard cheap printers because you could not get minor repairs.

GovTech has an article on Missouri's new CIO (Chief Information Officer), who was given the daunting task of improving state government IT services, in part by consolidating 16 separate IT fiefdoms. IT folks are notoriously resistant to service aggregation, because it usually means smaller staffs and smaller budgets. Some IT folks like big, complicated, hard to use systems because it justifies big IT staffs and budgets.

After I got horribly lost in rural New Hampshire (the day after a blizzard, with six inches of snow still on some roads), I swore off Mapquest forever. I've never been fond of their directions, which always have too many directions. You know the ones....drive .1 miles and veer to the left...continue for .05 miles and bear left....and so on. It takes longer to read the directions than it does to travel a tenth of mile, and a more accurate instruction would be something like "take the left fork."

The straw that broke this camel's back in New Hampshire was when I found myself in some picturesque little New England town and stopped in the local quick stop for directions. I told them where I was going, and everyone in the store burst out laughing. I asked them what the joke was, and they said, "You must have Mapquest directions." I said, "Yea," and there was another round of laughter. They finally explained that for some reason, the Mapquest directions from Manchester to Conway (my destination) were backwards (left turns were right turns, and so on) for part of the trip, and everyone ended up at this store. I finally got where I was going, and discovered that Mapquest's 18 separate instructions could have been boiled down to three if written out by a human being.

But, like steak knives, there's more! I had to go to Reston last week to the Digital Cities conferences, and I'd never been to that particular hotel before. I did not want to use Mapquest, so I decided to use the new Google Maps feature (part of Google's quest to dominate the universe).

That also turned out to be a really bad idea. Google has much better maps on the screen than Mapquest, but they print out horribly fuzzy. Their directions were much like Mapquest's, but I gave it the old college try.

They were horribly wrong. They dumped me off the highway two exits before the correct one, and the last five or six instructions were, as I found out, quite garbled. Like my previous Mapquest adventure, a human would have produced instructions that were no more than three lines.

Anne Byers, of the Nebraska Information Technology Commission, and one of the most knowledgeable people in the country on rural technology issues, has written an excellent article that not only summarizes some of the anti-muni legislation pending in that state, but also provides some very useful analysis of other projects around the country.

Among Anne's cogent analysis is the point that whether a community broadband project has "failed" or "succeeded" depends on who you talk to, with some projects being ranked by different organizations as both a success and a failure.

Apple's new Tiger operating system will debut this Friday, and details are beginning to leak out. One of the most talked about features is called Spotlight, a new search engine built into the operating system. Spotlight will index and search virtually your entire hard drive--emails, PDF files, all word processing files, and "knows" about the file formats of things like images, which can have keywords and subject descriptors attached to them, but could rarely be searched.

New York City has announced an ambitious plan to boost fiber capacity in the city and to make all public facilities "wireless friendly."

Google's founders are fond of their corporate slogan, "Do nothing evil," but the lady doth protest too much, to borrow an old phrase.

I've written about Google's Gmail service, in which the company happily stores every email you have ever sent or received, mainly so they can snoop through your mail and figure out what ads to show you (e.g. correspond with a friend about an upcoming hiking trip, and you'll start seeing ads for outdoor gear).

Ray Buzzard, of Dalton Utilities, spoke about the Dalton, Georgia community broadband project. Dalton's community fiber project, only about two years old, has already had very positive economic development effects by keeping hundreds of manufacturing jobs in the community. The high performance, low cost network persuaded some local manufacturers to stay in the community rather than moving elsewhere.

Local government was a key anchor tenant by making an early commitment to use the system.

Clark McLeod, the CEO of FiberUtilities of Iowa and the head of OpportunityIowa, gave a stunning keynote address at the Digital Cities conference on Tuesday. What follows is a summary of his remarks.

The incumbent telephone and cable companies have monopolized both infrastructure and services, and they will do anything--ANYTHING--to stop threats to those monopolies. Nonetheless, the incumbents are not the enemy. The enemy is the complacency of American communities, who are letting the incumbents win the battle.

OpportunityIowa is a statewide effort to educate citizens and elected leaders about the importance of broadband to the future of the community, and it is trying to address the urgent need to help those citizens and elected leaders understand that broadband is tightly tied to economic development. The project has made over 1000 presentations across the state to educate communities about the issues.

OpportunityIowa has a simple answer to the question of why communities should invest in broadband: To reverse the downward economic trends (fewer and fewer jobs year after year); to build 21st century community infrastructure; and because community broadband is primarily a local problem. One of Iowa's main exports are college graduates, who leave the state and never come back because of the lack of opportunity.

McCleod says that education is the core problem (or the lack of it).

Communities need a fiber utility; it will drive the cost of telecom down. Creating a fiber utility (just the legal entity, not building anything) gets the attention of the incumbents and often has immediate positive results because communities that create these fiber utility entities often get better service quickly, even if they have not spent any money to build out a network. The first step for any community is to create the legal entity that could and would own and manage a community fiber network.

McLeod suggests that the legal entity be created without any commitment to actually spending any money or building any infrastructure. The mistake many communities make is to rush to build something without having an appropriate community legal entity in place.

The Monday afternoon keynote was by Keith Wilson, the CEO of Dynamic City, which has the contract to design, build, and operate the Utah UTOPIA project (an 18 community fiber project serving 300,000 homes).

The U.S. has the most expensive broadband in the world; the per megabit cost of broadband in Japan is ninety cents. In Korea, it's $2.50. In the U.S., it averages $25-$30 per megabit, or thirty times higher than the lowest. Clearly, the current reliance on incumbents to provide broadband is not working.

Wilson identified four characteristics of a viable communitywide network:

• Open and interoperable
• Wholesale access available to multiple service providers
• High quality carrier class equivalent to commercial networks
• Highly scalable bandwidth to meet any kind of service need

A wholesale business model that allows for many service providers (as opposed to just one voice provider, one video on demand provider, etc.) reduces the risk for the network owner--if a service vendor fails or pulls out, the financial health of the network is less at risk.

Networks are like airports--a shared facility built by the community and used by multiple service providers (airlines) to offer a variety of services. Airports are good for communities because no airline would come to a community and build their own airport.

Communities need a "communications utility," and no less than the future of the community is at stake. A successful network must have widespread availability, must be affordable, and must offer customers choice. A closed network cannot offer all three, because the incumbent providers don't want competition. Private buildouts (the current situation with incumbents) capture the future of a community because no other provider will come, so the community becomes hostage to a single company.

If regulated monopolies have not worked in the past in terms of affordability and choice, why do we think unregulated monopolies (what we have now, in effect) will work better? What is best for a single company is not necessarily best for the businesses and residents of a community.

Scott Wilkinson, a VP for Hitachi Telecom, gave a talk about broadband in Japan. The typical broadband fiber connection in Japan is 100 megabits/second, and typically costs about $58/month; costs have dropped 66% in the past four years. Most broadband connections in Japan are data only, so the "triple play" is not a big consideration. The connections support video on demand, which is very popular, but there is no broadcast television content. The connections work very well for video on demand, with near real time viewing (i.e. no long wait to download before viewing).

Fiber To The Home (FTTH) is growing rapidly in Japan, and the big loser is cable modem service. The electric companies in Japan are NOT offering Broadband over Powerline (BPL), but instead are selling fiber service, which should be a clue to communities that think BPL is the way to go.

ADSL is seen as a problem in Japan, even though it has a high subscriber base. ADSL and VDSL are both available and offer much higher data rates than typical DSL services in the U.S., but the distance senstivity is a big issue, as subscribers just a few blocks away from each other can end up with very different levels of service.

The typical range of applications in Japan are very similar to the applications and services in the U.S., but the Japanese service providers have found that when people are given more bandwidth, they use it, which refutes the telco argument that no one has a need for high bandwidth connections. One of the trends is more work from home and from remote locations; the high bandwidth supports high quality videoconferencing and actually often provides a better level of service than is available in some business offices. So affordable broadband has become an engine for new kinds of work opportunities.

Services in Japan are driving demand, not connections. As more services ae available, more people sign up for high speed connections. The installation fee for fiber averages $150, so that can be a source of funding to help pay for community fiber builds. Fiber systems in Japan are profitable, with fees distributed this way:

PacketFront is a vendor of network equipment designed specifically for community broadband projects. Matt Wenger, an expert in communitywide broadband and senior analyst for the company, gave the talk.

Wenger strongly advocated a services orientation for community broadband projects. His thesis throughout the talk was the current connection-based model used by the telcos and the cable companies discourages innovation and use of broadband.

Berge Ayvasian, a VP at the Yankee Group, a technology forecasting group, gave the morning keynote. Ayvasian had some interesting data: the Yankee Group projects that the number of households served by broadband will double over the next three years, from about 30 million to 60 million. Households served by community broadband projects are expected to grow by more than 600%, much faster than DSL growth (100%) or cable modem (75%). Cable is growing slowest because cable companies already have much of the market locked. up.

I'll be blogging at the Digital Cities conference for the next couple of days (Monday and Tuesday). The meeting is being held in Reston, Virginia, near D.C., and promises to be a lively meeting. Stay tuned.

This CNN story demonstrates perfectly why the telcos are terrified of cheap community broadband. The story highlights a businessman who cut his $800/month business phone bill by 80% and is able to give better service to his customers at the same time--cheaper and better with VoIP. And he now has an extra $640/month to plow back into the business itself.

Here is an excellent article [link no longer available] on how the telcos are strangling communities and denying them the economic development benefits that come from affordable broadband.