Technology Futures

The state of Kentucky has set a bold goal to get broadband to every business and resident by 2007. This news article discusses ConnectKentucky, the statewide initiative. The governor sees it as an economic development issue, worth as many as 14,000 new jobs statewide.

How about your state? Has the governor made broadband a strategic priority?

Here is a must-read article [link no longer available] that does a better job at articulating the battle between communities and anti-muni legislators and telcos than anything else I have seen. If you are trying to convice legislators to support community projects, take them out to lunch and review the six points in this article with them.

VoIP Weekly reports that 40% of international phone calls are now carried by VoIP services, up from 2-3% in 2000. The article also states that VoIP has killed the calling card market. College kids have been a key demographic for that market, and apparently tech savvy youth are very comfortable using free services like FreeWorld Dialup and Skype to make phone calls. It's also a boon for parents of college kids who may have been buying some of those calling cards.

Years ago, one of my favorite authors, Neal Stephenson, wrote a book called The Diamond Age. Set in the near future, technology had progressed to a point where most homes had a refrigerator size machine that could make virtually any common household item, most often out of diamond. Why diamond? Because the raw material is as cheap as, well, dirt--it's just carbon. Advanced microfabrication at the molecular level enabled the machine to build an item layer by layer at the molecular level. One thing that was handy in the book was diamond knives that never got dull.

Sound far-fetched? It's not. Industrial designers have been using polymer-based rapid prototyping machines for years to create three dimensional objects out of a soup of light-sensitive liquid plastic. A laser, driven by CAD/CAM information, hardens the plastic layer by layer, and the object "grows" right out of a container of goop.

More recently, some scientists have been using modified ink-jet printers to spray bio-compounds onto a sheet of plastic to create things like cartilage-based ear replacements for people that have suffered injuries.

Now we have the Replicating Rapid Prototyping Project, or RepRap. This UK-based university effort intends to build an Open Source system that can build complex objects. We won't have these in our homes any time soon, but our kids may. The Open Source approach--making it available for anyone in the world to both use and improve--has the potential to transform the world economy. What are some of the implications? Well, China might not have the economic clout it has now if common household items can be fabricated cheaply near the user of the item. The current "consumption" society would change radically as anyone could acquire almost any common household object for the cost of the raw materials--the cost of shipping, advertising, distributing, warehousing, and retailing would disappear.

Via the CANARIE mailing list, there is news that NTT, the Japanese phone company, has broken new ground with Wave Division Multiplexing, or WDM. In "old" fiber systems, a single channel of information travels over a fiber pair. With WDM, you can have multiple channels of information on a single fiber.

As the gadgets to capture audio and video get smaller and lighter, and as the tools to edit that content and then distribute it via the Internet become easier to use, I think there is a danger of narcissism, or what I call the "look at me" phenomenon.

Lately I've been getting more email that goes something like this: "Look what I just did! It's great! Stop by my Web site and watch the video (or listen to the audio)."

The subtext is "Whatever I just did is way more important than anything you happen to be doing, so stop what you are doing and look at what I am doing."

CNet has an article about the future of newspapers. It says that some papers, like the New York Times, have more people reading the paper online than on paper. But the papers are mad because they are giving away the content for free. They want to start charging for online subscriptions (note that a few papers, like the Wall Street Journal, have been doing this for years).

The papers have it wrong in several ways. In the first place, it's ads that cover most of the cost of newspapers, not subscriptions. An online edition has essentially zero distribution costs, compared to the massive expense required to print news on paper and distribute those paper copies. With the boom in online advertising, it seems like better ad management might actually make online newspapers profitable. But you'd have to let go of the idea that "real" news is better on paper.

The other problem most papers have is that their capacity to generate original news is extremely limited. Many mid-size local papers simply fill their pages with AP reprints, and sprinkle in a few local articles along the way. I'd like to see a paper embrace the blogging model, where you simply turn reporters loose with a well-designed blog framework. If you did so, you could fire most of the editors, who have a limited function in an online edition. The original purpose of editors was to decide what "fit," literally, in the paper. You don't need editors in the same way because you don't have limits in online publishing. Editors could still fill a vital function by keeping reporters focused and by identifying important stories, but my guess is most mid-size city papers could get by with just a couple of editors--and could cut costs substantially.

But I think some papers would rather go out of business first. Blogging is a tool, not a medium, and it's a tool that would work well for newspapers

I purchase items online all the time, but I've never bought anything from Amazon. In my opinion, they collect too much information about their customers and use it in unethical ways. This CNet article notes even more intrusive data collection by the online giant.

Princeton, Illinois provides some helpful data on a successful community fiber project. So why did the community decide to install 15 miles of fiber cable? Here's what the head of the municipal project said:

"Our primary goal was economic stability and some hope for economic growth," Baird said, noting that one of the largest companies in town moved out, taking with it more than 300 jobs. "We had some concerns from our customers that they were in the same boat because of a lack of telecom services."

Worried that state legislators are going to write the best laws that money can buy and pass an anti-muni telecom bill purportedly authored by the phone company, officials in the City of Chicago are trying to speed approval of a citywide plan to offer public WiFi throughout the city. The Register has a story on it, and here's another. [link no longer available]

Certain parts of the 'net have begun talking about building your own TV. Back when I was a kid, one of my favorite pastimes on rainy days was poring over the Heathkit catalogue. Heath of Benton Harbor, Michigan had a whole catalogue full of electronic kits, ranging from simple transistor radios to things like electronic keyboards and color televisions. I eventually built a shortware receiver, among other home-designed projects.

But with the advent of the microchip, Heath went out of business. Electronic stuff got so cheap no one was interested in putting things together themselves. So why the sudden interest?

We're beginning to see "perfect storms" in several areas. The phone business is becoming a perfect storm. Skype's CEO announced the other day that the company has 29 million users and is adding 155,000 PER DAY. Skype is free for Skype to Skype calls, and they charge a small fee for completing calls to non-Skype users. Skype is using the Google model--mostly free service and offering an optional fee-based service. And we all know what happened to Google.

But Google was not disruptive in the same way that Voice over IP is destroying the phone business because there was no global search business before Google. But the steady increase in broadband users, excellent voice telephony software from companies like Skype, and monopoly pricing from the telecoms has created a perfect storm in telephony that will shortly also swallow the entire cellphone industry, since WiFi carries Skype and other VoIP calls just as easily.

Similarly, the television business is also on very rough seas that will build quickly to a perfect storm. Again, broadband winds have increased the wave height. We're very close to a time when some innovative and brash content developer says, "Heck with the TV industry. We're going to produce a "tv" show and broadcast it over the Internet." The show will be so compelling (I'm guessing a comedy will be first) that millions will download and watch it, even if the picture quality is a little fuzzy. Once we have a single breakout show, the wave height will only get higher and eventually the existing model for television will be swallowed by the monster wave of Internet TV. This storm could start anytime in the next year or so, and TV as we know it will hang for a few years, but with fewer and fewer viewers day by day.

One definition of insanity is doing the same thing over and over again and expecting different results.

I still see many regions continuing to build shell buildings designed for manufacturing. It used to bring jobs to the area, so why not just keep doing it? The problem is that kind of strategy is competing for fewer and fewer jobs (as few as 10% of all new jobs) against more and more regions willing to throw enormous tax incentives at manufacturers. Meanwhile, more and more manufacturing is going to other countries.

We are just at the dawn of the computer age. I know that because we are finally seeing computers that are not just, well, computers. The $99 iPod shuffle, barely larger than a stick of gum, is thousands of times more powerful computationally than my first hand-built personal computer from 1977. And we don't think of an iPod as a computer at all, but it is. Cellphones are handheld computers that have been programmed to behave like phones (and cameras, and calendars, etc.).

I started thinking about this when I read about Asterisk, which is an Open Source software project that makes a cheap Linux or Macintosh computer behave like a PBX. PBX is an old phone company acronym for Private Branch Exchange, or a small telephone switch normally owned only by medium and large companies because they have been very expensive.

But now any small business can afford a PBX simply by downloading this free software and installing it. It works with most popular Voice over IP protocols, and interoperates with other common telephone equipment. It's an incredible piece of work that is the result of probably hundreds of people working collaboratively for the common good.

And it must scare the pants off companies like Lucent, Alcatel, and others that still make a lot of money selling telephone switches. The world we knew is crumbling around us, and dazzling new opportunities are emerging.

I've been reading a lot of historical fiction and nonfiction recently. I've slowly been ploughing through Neal Stephenson's three book opus on the late 1600s and early 1700s. I'm just finishing up book two, ,The Confusion. It's a fictional account of those turbulent times when the first global economy began to emerge and innovations like paper money changed the rules of nations and commerce simultaneously. Stephenson is a genius of a writer, rooting his story firmly in the real history of the time, including figures like Isaac Newton and Leibniz, both of whom had a profound effect on that era.

USA Today has an unintentionally funny article (page 3B) about Microsoft's "maniacally focused" effort to provide converged instant messaging, email, and voice communications on the Windows platform. The writer apparently fell hook, line, and sinker for Microsoft's PR flack about breakthroughs.

Millions of people have been using converged IM, email, voice, AND video communications for more than a year--it's called iChatAV, and Apple provides it for free on every Mac.

The blogging community is abuzz with the latest threat to writing and journalism on the Web. There is a move afoot to extend the controversial 2002 Federal campaign laws to bloggers writing about politics. At this point, I don't know enough about the law itself to do much more than merely mention the controversy as an example of how the Law of Unintended Consequences continues to work in the age of the Internet.

According to most reports that I have seen, the Heartland Institute is an "astroturf" organization (the term refers to a group that has a hidden agenda--in other words, it's appearance is fake, like Astroturf).

Add Texas to the list of states that has some legislators who want to keep communities from managing their own economic future. This article documents the very successful WiFi project led by technology visionary Will Reed, and the legislators who apparently think "free" broadband somehow subverts capitalism.

One of the big flaws in the whole telecom debate is a chronic focus on the past. The telecom companies and the FCC both tend to rely on looking backward, and by extension, it's a problem at the state level because the incumbent providers have been much better at getting their message to state legislators than purchasers of telecom services.

Here's a concrete example of what I mean. The Times-Picayune has a story today on the fast-growing "iPod Economy," which is the exploding market for iPod accessories. According to one researcher, iPod owners spend half as much as the cost of their iPod on accessories. With most iPods selling for between $200 and $300, that's a lot of money. And iPod sales itself grew 525% last year. By some estimates, iPods account for as much as 80% of the total portable audio player market.

So what's the point? The point is that very few people could have predicted this three years ago. Technology innovation is creating incredible business opportunities. If you browse through the companies selling accessories, none of them are "big name" companies, and many of them are garage start-ups, especially those that make protective sleeves and cases for the iPod.

The telecom discussion tends to be framed by what is called the "triple play," which is voice telephony, video, and (Internet) data. I've seen a lot of business cases that "prove" that communities can't recover their costs using a triple play model. I think the reports are right, but for the wrong reason (which makes them wrong overall).

It's really a quadruple play, with voice, video, data, and what I call "advanced services." Advanced services are anything that will be delivered via the Internet that we have either not thought of yet or just are not including. My favorite example is network backups. Knowledge Economy startups like Data Ensure are growing rapidly by playing in the Advanced Services arena, and Data Ensure, in particular, is creating jobs in a remote part of southwest Virginia. They just happen to be in a vertical business incubator with fiber in the basement--part of a regional fiber project.

Congresswoman Heather Wilson of New Mexico calls it the "emerging duopoly. This Washington Post article discusses the impact the telephone mergers may have on communities and telephone users. The duopoly refers to a community that has just two telecom companies--one large phone company and one large cable company. These big firms can engage in cartel-like behavior, and the pattern so far has been not to compete on a level playing field but rather to simply buy competitors.

James Carlini has a must-read article that has some solid data on the value of municipal investments in broadband, as well as some fascinating historical data that shows community investments in "new" infrastructure pay off.