Technology Futures

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.

The North Dakota legislature has done the right thing by making the data stored in vehicle black boxes solely the property of the vehicle owner.

When I tell people that the target for broadband ought to be 155 megabits or better, many scoff at me, even though I have plenty of information that shows we need that much for the things we all want to be doing in less than a decade.

Unfortunately, the FCC continues to prop up the incumbent telephone and cable companies by calling broadband anything faster than 256 kilobits. This allows the incumbents to tell poorly informed elected leaders and economic developers in our communities that cable modem and DSL service offerings exceed Federal government recommendations by a wide margin, when in fact the 1-3 megabit throughput of DSL and cable modems is woefully inadequate. Not knowing anything else about the issue, many leaders decide they don't need to do anything, since the community "already has broadband."

It's video that will drive much of the bandwidth needs, and with high definition (HD) programming becoming more common, you need, depending on whom you ask, somewhere between 3-8 megabits for a single HD video stream. With the average American household having 3.68 televisions, you have to design your network to support four of those video streams simultaneously, or somewhere around 40-50 megabits/second just to watch TV. And you have to be able to handle approximately a 3x "burst" capacity when you decide to watch a video downloaded via the Internet.

But my figure of 155 megabits is still setting the bar awfully low. Our Canadian (CANARIE) friends are already doing advanced testing of immersive, multi-party videoconferencing with enhanced audio services called High Definition Ultra-Videoconferencing. The system uses 3.5 gigabits/second in each direction--or about 22 times more bandwidth than my recommendation of 155 megabits/second.

Of course, it takes an all fiber system to do this. Fiber continues to be the best futureproofing a community can undertake, as it can handle whatever bandwidth needs we want to throw at it, just by swapping out the electronics at the ends.

The Free Press has released three useful reports on broadband that ought to be required reading for any citizen's group trying to convince public officials and economic developers that something needs to be done.

The IEEE (Institute of Electronic and Electrical Engineers) has issued a new white paper stating that "U.S. prosperity is at risk" if it does not become a national goal to invest heavily in Gigabit networks. The organization went on to say this:

Failure to act will "relegate the U.S. telecommunications infrastructure to an inferior competitive position" and undermine the future of the U.S. economy.

USA Today has an excellent article that summarizes the current debate moving through the courts about the future of cable television and the future of video programming generally. As usual, the FCC has muddied the waters here, with statements and policy decisions that seem to favor both sides of the argument.

It's great to see some thoughtful broadband coverage in local newspapers. This article from the Rock River Times [link no longer available] of Rockford, Illinois makes the case for communitywide telecom infrastructure. The paper makes the point that transport systems have always been important to communities and economic development, starting with canals and then the railroads. Government has always been involved, to one extent or another, and the railroads are a good example of a successful public/private partnership that reaped great results.

Loudoun County, which is located in northern Virginia, has created what may be a first--the county now has a paid position called Manager of Broadband Services. Funded from telecom use fees paid to the county, the new employee, Scott Bashore, will have the responsibility to advise the county on broadband strategies, set a vision for the county on the future use of technology, and will work closely with businesses to ensure the county has the right broadband infrastructure in place to support economic development.

Much is being made of Disney's reluctance to push its content out to viewers via Internet-based television (IPTV). The Business Week article is typical--full of handwringing and hysterical headlines like "IPTV revolution may be on hold."

Maybe not. Maybe the revolution will proceed very nicely, thank you, without Disney. Disney and all the other Hollywood content providers will likely be last to the party, while independents with fresh ideas and world class production software from Apple running on cheap Macs will create break out shows.

If anyone thinks you really need the big studios to produce content, look at the current spate of reality shows. Not only are most of them really awful, the production values are pretty low. That's one reason why they are so appealing to the studios and networks--they are cheap.

Who hasn't sat on the couch late one night watching this dreck and thought, "Gee, I could make a reality show a whole lot more interesting than this?" You can, and people already are. The fake ads circulating on the Internet are the tip of the iceberg. The Volkswagen spoof was extraordinarily well done, and there are many other examples of high quality content out there.

The entertainment industry is trying to hold back the tide by running like a bunch of crybabies to Congress to buy some new laws so they can prosecute a few more grandmothers and 14 year olds for illegal downloads. Meanwhile, they are forcing Apple to sell their songs for exactly the same price, more or less, as you'd pay for the songs on a CD, while their distribution cost, courtesy of Apple's iTunes store, is now zero.

Movies are next. Look at the Blair Witch project--a hugely successful movie that made tens of millions of dollars. The whole movie was shot with cheap handheld cameras and edited on Macs. Today, the next Blair Witch movie could be delivered via a paid download using BitTorrent, and the makers of the film would pocket even more money.

AOL has decided to jump into the VoIP marketplace. It might just save the company, which has been bleeding customers for the past couple of years as people switch to broadband.

The Internet continues to create earthquakes across the entire spectrum of society as established ways of doing things crumble under the unprecedented publishing capabilites of Internet-enabled information tools.

Elected officials, who have enjoyed a close relationship with mainstream media over the decades, are becoming increasing irrational over blogs. While the media has often had an adversarial relationship with elected leaders of one stripe or another, those elected leaders, the media, and political parties all have tended to play by a set of well-understood rules (I'm generalizing here--there are obvious exceptions).

But blogs have changed all that. Bloggers, publishing their own commentary for a worldwide audience (albeit often a small one), don't have to play by traditional rules. The blogosphere is creating an entirely new set of rules, and some politicians don't like it.

San Francisco leaders have introduced city legislation that would require bloggers to register with the city if they write about politics and candidates. What on earth are they thinking? Do they really think they can stifle criticism of city leaders and policies with this kind of heavy-handed approach?

To illustrate just how absurd this is, a transnational fight over publishing is brewing. Excerpts from a secret government hearing in Canada that allegedly is investigating fraud on the part of government officials has been published on a U.S. Web site, and Canadian leaders are seething because they can't do anything about it.

It's not at all clear who, if anyone, has committed a crime. The ban forbids publication. So the Canadian that passed the documents on may not have broken the law, and the American blog is not subject to Canadian law at all.

Ethics and the lack of them certainly play a role here, but it's always been difficult to legislate moral or ethical behavior.

For a sobering look at the future, this article on South Korea is a wake-up for anyone who thinks the United States is technology savvy.

Apple Computer CEO Steve Jobs announced today that the company has purchased CBS Television, using Apple's enormous hoard of cash. The company has been debt-free for many years, and analysts have engaged in endless speculation about what the company might do with its billions of dollars. In the press conference, Jobs indicated that because of CBS' recent problems with Dan Rather and "fake but accurate" news, Apple was able to pick up the company "for a song," which was apparently a pun on Apple's hugely popular iTunes venture.

Jobs announced sweeping changes for the venerable broadcasting firm. The biggest change is that he will have CBS abandon traditional television. Jobs said, "The old television model is dead. CBS will be the first all-Internet broadcasting company, and beginning April 1st, 2006, the company will end it's current 50 year old broadcast method and begin offering all its content via the Internet."

Analysts were skeptical that even Apple could pull off such a big change, but Jobs indicated the huge success of the tiny new Apple computer, the Mac mini, has already begun to pave the way. The Mac mini, which debuted in the fall of 2005, comes standard with an S-video out port, meaning that the tiny computer can output high quality video directly to a television set. Said Jobs, "With all the broadband users in the U.S., we've got a ready market for video via the Internet, and we'll be providing a Tivo-like piece of software called iVideo later this summer. iVideo will revolutionize the way people watch TV, just the way iTunes and the iPod has changed music."

Apple has also had a longstanding relationship with Akamai, which has banks of servers located all over the United States and already streams video for companies like Apple, usually for annual meetings and other corporate functions. Jobs indicated that Akamai would indeed play a major role as part of the all-Internet CBS. Jobs also indicated that Pixar, the movie production firm he also heads, will design the production facilities for the effort. "Nobody knows more about digital film and television production than Pixar," he said.

We've added two new handouts to the Design Nine library. Ten things a community needs to compete summarizes a column from a few months ago about what amenities a community needs to attract businesses to the area.

Community broadband step by step compares community broadband development to the construction of a new building and the development of a new water or sewer system. It's easy to see that broadband development follows exactly the same processes that communities have successfully been using for years on much more expensive projects.