Technology Futures

I've been getting a lot of questions lately about community Web portals. There is a lot of confusion about what they are, the benefits of having one, and how to go about setting one up and running it.

It is being widely reported that Verizon has purchased MCI. This was widely predicted once the news came out that SBC was purchasing AT&T.

MCI, as you may recall, was the company that took on AT&T in the early eighties and caused the giant to be split up into seven regional phone companies, with long distance wide open. The result was that long distance rates began dropping, and local service prices went up.

But twenty years later, here we are again with essentially monopoly phone service, although it is now Balkanized. Although there are multiple phone companies, each enjoys marketplace monopoly in its own area.

There is good and bad news in all this. The bad news is that legal deregulation, as practiced by the FCC in 1984 (AT&T breakup) and 1996 (Telecom Dereg Act) does not work BY ITSELF. It is necessary but not sufficient. In both cases, it did not work as expected because the infrastructure to deliver services in communities remained in monopoly control of a single company.

As Alan McAdam, a Cornell economist, has shown in extensive study and research, the only way to counter these marketplace monopolies is to have shared ownership of the infrastructure, with property owners, the community, and the private sector all owning parts of the network.

What is the good news? The good news, of a sort, is that telephone companies are going the way of the dinosaurs. Anyone connected to the Internet has an IP address which uniquely identifies you...kind of like a phone number. The emerging ENUM system maps IP addresses to a personal identifier so that you can take your phone number with you wherever you go, and anyone, using any software that is ENUM-aware, can call you no matter where you are in the world--no phone company required.

It is going to take another five to ten years, but phone companies (including the cellular companies) will be reme

Dianah Neff, the CIO of the City of Philadelphia, has written an interesting article on municipalities and WiFi for CNet.

Philadelphia had ambitious plans to provide WiFi citywide until Verizon jumped into the discussion and got the Pennsylvania legislature to pass a law requiring municipalities to ask Verizon's permission before going into the service business (Philadelphia was exempted, but the whole debacle put the brakes on Philadelphia's effort).

Many of the VoIP services like Skype and iChat use "softphones," which means the phone is really a program on your computer. You still need a headset of somekind, but the whole set up is a bit clumsy compared to the time-tested "telephone" interface we've been using for, oh, a hundred years or so.

Engadget has an article on an inexpensive (about $45) VoIP phone that actually looks and acts like a phone. The neat thing is that you don't plug it in the wall, you plug it into a USB port on your computer.

Run, don't walk, to the nearest store and pick up a copy of USA Today. If you live in a rural community and are involved with economic and community development issues, you need to read the cover story today.

Small towns in the Great Plains are finally starting to give up "elephant hunting" and instead are using an "economic gardening" strategy. This is exactly what I have been saying in our Knowledge Economy Roadshow for the past several years.

This CNet article says that businesses are realizing the value of dark fiber, and are willing to pay for it.

Here is the money quote:

"....Ford [Motor Company] found that it would cost less to lay its own optical fiber lines than to subscribe to a service from the local phone company."

A quote from the Governor of Maine's State of the State address:

...Tonight I am announcing 'Connect Maine,' a broad and aggressive telecommunications strategy for this state. Connect Maine will give nearly every Mainer the opportunity to plug into the global economy from their community. It will ensure that 90 percent of Maine communities have broadband access by 2010; 100 percent of Maine communities have quality wireless service by 2008; and Maine's education system has the technology infrastructure that leads the nation.

The Space Economy continues its upward trend (literally). NASA appears to have awoken from a deep sleep with an ambitious new program to use the private sector to build next generation space exploration vehicles for low earth orbit (the space station), the moon, and Mars.

eWeek has a good article that provides a useful snapshot of anti-muni telecom investment legislation that is that is making the rounds of legislatures (Pennsylvania, Ohio, Indiana).

Back on October 31, 2003, I wrote about supercomputers as the economic development infrastructure. I suggested that regions that wanted to have a real marketing edge invest in a modest supercomputer cluster and rent it out to businesses that wanted occasional access to such equipment but could not justify the cost of owning it.

Add Indiana to a growing list of states that have legislatures turning their backs on communities. Legislations is being considered there that would prohibit communities from providing telecom services.

Even though I think that communities ought to stay out of the service business and limit their investments to telecom infrastructure, I think that decision ought to be left to the community, and not be pre-empted by the state legislature.

If your heartburn is not acting up now, it probably will be after you read this analysis by Om Malik. Malik, like me, see the phone companies as running scared, and part of the emerging phone landscape will be the re-monopolization of the existing "old" telephone network.

Cnet has a story about how businesses are grabbing onto Skype, the free telephone service that works over the Internet.

We're just at the beginning of the biggest change in telecommunications since voice telephone service became available 100 years ago.

A Business Week story highlights the growing popularity of the Firefox browser. Business Week says the browser is easy to install and easy to use. Among Firefox's most popular features is tabbed browsing. If you have not used a tabbed browser, you are really missing out. Instead of having multiple browser windows open, you have a single browser window with a row of tabs along the top. Each tab represents an open Web page.

Take rate is an industry term for the number of customers that agree to buy a service. Take rates are notoriously hard to predict, and historically, take rates for services like telephone and cable service have been very low (e.g. 10%, 15%), meaning it takes years to get most households connected to a new service.

The town of Nuenen, Holland recently installed a blown fiber to the home, open access network, and had a remarkable 96% take rate. This means that essentially, every household that is likely to be a customer became one as soon as the service became available.

If we did not have enough to worry about, we now have cars infected with computer viruses. Cnet has the story about a security firm that reports it has been asked to debug several Lexus cars that had apparently been infected via a Bluetooth phone, which transmitted the virus wirelessly to the car navigation system.

Maybe my next car should be a nice, vintage, '66 Mustang 2+2--good, reliable transportation, classic look, and no onboard electronics.

Here is an excerpt from a brochure about a project in Southside Virginia, a rural area that has traditionally relied on tobacco as a primary engine of its economy. Furniture and textile manufacturing were also mainstays for jobs and development, but over the past twenty years, all three have declined sharply.

The low cost of living, combined with the proximity to Greensboro and the North Carolina Research Triangle, may make Southside one of the best places to work in America, once this infrastructure is in place.

Also included as a service will be MSAPs in some locations, which create very high performance community intranets that support next generation multimedia services. The MSAP concept was pioneered by me while I was Director of the Blacksburg Electronic Village. Blacksburg has had an MSAP in operation since 1999, and Danville, Virginia also has an MSAP.

Note the emphasis on leasing capacity to "all interested providers," which includes incumbents, who, if they are smart, will realize they can lower their costs by leasing instead of overbuilding.

The Mid-Atlantic Broadband Cooperative (MBC), a non-profit cooperative with funding from the Economic Development Authority (EDA) and the Virginia Tobacco Commission (VTC), has contracted to deploy an advanced open-access wholesale broadband network in Southside Virginia. The RBI is a 700-mile fiber-optic network with 48 strands of dedicated fiber backbone, Synchronous Optical Network (SONET) architecture, dual rings with 13 OC-192 backbone sites and 65 satellite locations providing low speed & high speed interconnect facilities (OC-3, OC-12, OC-48, STS, VT). In addition to the turn-key implementation of the RBI, MBC has invested in building a new state of the art Network Operations Control Center (NOCC) in South Boston, Virginia.

The RBI network will connect four cities, 20 counties and 56 industrial parks providing access to nearly 700,000 citizens and more than 19,000 businesses throughout Southside Virginia. The goal of this project is to promote economic development opportunities for the region, attracting technologybased business and industry. Network construction begins in January 2005 and will be turned-up in phases. MBC plans to have the entire network fully operational by December 2006. MBC will be selling/leasing fiber and services on a wholesale basis to all interested providers.

Northern Illinois, which is surprisingly rural in nature despite being a relatively easy drive to Chicago, has grabbed hold of the future. Below is a press release announcing an ambitious regional project to get affordable, high capacity broadband throughout that area. In announcing the effort, an official connected with the effort said, "The communication infrastructure we're talking about will be as important as electricity, water."

Northern Illinois Technology Triangle Unlocks New Opportunities for Northern Illinois Communities

Rochelle Municipal Utilities announces plans for a multi-gigabit capacity fiber optic ring to serve local rural communities

Rochelle, IL - Today, Rochelle Mayor Chet Olson unveiled plans for a superior fiber-optic telecommunications network labeled the Northern Illinois Technology Triangle (NITT). The network will provide multi-gigabit capacity to the Northern Illinois region, connecting communities across Northern Illinois and opening new opportunities for growth in education, research and business.

The NITT is a joint venture between Rochelle Municipal Utilities (RMU) and the Illinois Municipal Broadband Communications Association (IMBCA). It will provide a looped broadband fiber network in a triangle along I-88 from Rock Falls to Naperville, with a section north to St. Charles, and from St. Charles along I-90 to Rockford, and then along I-39 from Rockford to Rochelle. The physical infrastructure will be implemented in three parts. IMBCA has already leased existing fiber along I-88 from Naperville west to Rock Falls and is now negotiating leases for existing fiber on I-90. Rochelle Municipal Utilities plans on installing the remaining leg of the triangle, from Rochelle to Rockford, where no fiber exits. The NITT is the first municipal utility fiber optic network consortium in Illinois.

Chet Olson, Rochelle's Mayor, said, "We're pleased to play a part in bringing about the Northern Illinois Technology Triangle. NITT is the beginning of a new era, not only for Rochelle, but for all communities in this region that choose to access this network. For my community, it means an opportunity to expand our economic base from manufacturing and rail service to technology services and support." The network ring is based upon fiber optic cable and will offer 33 (or more) wavelengths, each with the capacity to carry data at a rate up to 40 Gigabits per second. With just one Gigabit connection, a family can download their favorite DVD movie in less than one (1) minute, something which would normally take 13 days to download using a telephone dial-up connection.

In my talks to community leaders, I talk about the ability to sell goods and services that are, literally, weightless, via the Internet. I get a lot of blank stares, as some folks still have trouble understanding the revolution in business.

The latest news comes from Apple, which reports it sells more than one million songs PER DAY from its online music store, or nearly half a billion songs per year.