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October 2007 Archive

Planning for OPLAN II

It's been awhile since I've been over to the Telco 2.0 website. Martin Geddes in the UK does a great job with that site, along with his original more personal blog, Telepocalypse. I was pleased to find that Martin's been doing some good work on telecom reform - that's what Telco 2.0 is about, to try to drive home the need for change among telecom executives.

This blog in particular set off my previous two posts about OPLANs - New Ideas for Incremental Muni-Fibre and Metro-Fibre. I like it because it pretty much spells out a practical way for private and public sector change agents to get busy now on implementing some of the ideas we talk about on MetroNetIQ.

Namely, there is no reason to wait to get it all together - to put together an RFP, to assemble a business case, to find a private partner, etc., etc. In fact, a city can start by reviewing its own telecom expenses and connecting its distributed facilities with fiber of its own.

That's precisely what the City of Gainesville, FL is doing. Last month, after visiting the Broadband Properties Summit in Dallas, I wrote about Gainesville - see Utility Forum Shows Multiple Broadband Approaches.

The next panel featured an in-depth look at the community of Gainesville, FL, home of 2006 National Champions, the University of Florida Gators. On the panel were Commission Member Ed Braddy and two representatives from the Gainesville Regional Utilities (GRU), Frank Latini, Technical Services Manager, and Dan Clark, Marketing Specialist for Gator.Net. They outlined a low-key strategy that has enabled the utility to bring new Internet opportunities to the citizens of Gainesville by incrementally extending the FTTH network on a project by project basis, without raising political objections or opposition from the incumbent cable and telecom broadband providers.

The website GRU.net provides more detailed information on the services offered. Commission Member Braddy described a communication strategy to compare the fiber network to "digital streets and roads," which he said has been an effective communication method. While the team holds a goal of engaging in an advanced deployment of a fiber optic loop for industrial purposes, their method is to engage in public private partnerships with MDUs and property developers, who share the costs of deployment. Their advice to any utilities, when asked how to manage perceived risk, is to "Go Slow."

How does Gainesville's approach compare with Geddes' recommendations in his blog? Pretty good alignment, if you ask me. Key to note here is that wireless and fiber are two sides of the same coin. Regardless of technology, a business model is needed that provides for capital recovery, as well as sustainable operations. So chalk this method up as a second example of 3.0 Emergent Customization...

What interests us most is that it provides a practical framework for realizing Malcolm Matson's open access vision of the future, where networks are funded and owned by long-term low-risk investors and any service provider can ride on top. This is called an OPLAN (Open Public Local Access Network), and implies both the end-user access and metro backhaul are part of the same open network. It's an intellectually attractive proposition. The trouble is finding the route from "here" to "there."

Some of the biggest problems with municipal fiber deployments are down to the fact that it's a big, expensive, monolithic project. The up-front cost is hefty, and its repayment means you have to be very sure there will be enough demand to pay it back. It's difficult to trial the idea of muni-fiber (or any other kind of metro-fiber roll out) without making a huge investment and therefore taking a big risk. This is the "anchor tenant" problem Dave Hughes, Director of BT's Wireless Broadband division, mentioned during the session. Other speakers noted how hard it was to co-ordinate the purchase of connectivity across multiple public services given their varying contract commitments and buying cycles.

So one way of dealing with the large costs and coordination issues of a huge capital project is to not do a huge capital project. Go incremental instead of all-at-once. Sure, there are trade-offs, but there is some wisdom in carving a larger project up into smaller bits, not the least of which is that it makes the project feasible. How about technology risk? By buying into a declining cost curve, you will get more modern equipment at an overall lower cost. The equipment makers may not like it, but it makes sense from a buyer perspective.

Nobody wants to build a metro backhaul network without access network customers; but nobody wants to build an access network without a plentiful supply of cheap metro backhaul. And few are willing to risk doing both. So, what is to be done?

Gradwell's suggestion is simple, as all the best ideas are in retrospect. There are six core elements:

1 An incremental approach to building an open-access muni metro network.
2 Shift from opex to capex - own, don't rent.
3 A multi-utility approach to cabling and ducting around town.
4 A hybrid public/private approach to access networks that connect users to the trunk.
5 A stable infrastructure investment plan to encourage private actors to invest.
6 A holistic view of end-user costs that looks beyond just out-of-pocket ISP and TV/phone service fees.

Now we're getting somewhere - this looks like a plan. Go Slow, in pieces. Buy, don't Rent. Get the most out of holes you dig. Partner where it makes sense. Invite in private money. Roll in lots of cost substitutes for a more robust business plan. I'll cut out the middle man and just copy the rest of the planning guide here - check it out!

The incremental OPLAN

He suggests that cities, or for that matter other actors, start by taking an inventory the sites they already own and their major internal networking customers. Then link up heavy traffic generators that currently use third-party connectivity. Stop shipping your internal phone, e-mail, database synchronization and video surveillance out from the LAN (where you almost certainly use at least 100Mbits/s Ethernet and probably Gigabit Ethernet) to a telecom or ISP network (at some much lower capacity and higher price) and then back in to the LAN in another building. Rather than paying for every bit, why not run the GigE direct between the switches in the two buildings?

So step one is to look for clusters of public buildings (e.g. Fire + Police) that share a connectivity need and join them together.

Shift from opex to capex

With a small capital investment, these buildings can now share a common backhaul to the Internet or outside world, rather than having to buy one each from a telco. You get an immediate drop in opex from both their internal communications as well as external traffic. The business case is easy to make, particularly where the capex is low because you're digging up the street for other reasons anyway.

Multi-utility approach

It's a sort of mixture of opportunism and foresight - opportunism in that you pick out links that happen to be needed, ducts, culverts, and the like you happen to own, and add more fibre than you need, and foresight in that you deliberately seek to add fibre whenever you dig up the road, and plan to add a node when you start a new building. By managing the physical ducting as part of a multi-utility plan, you can greatly lower your costs. Replacing the pavement? Lay a fiber. Lamp posts wiring getting old? Lay a fiber. Sewers a bit too Victorian? Lay a fiber. Gas pipes looking leaky? Lay a fiber.

Today's telecoms industry seems to be an unnatural joining of infrastructure, operations and customer relationship businesses. Who would be surprised to see them go their separate ways?

Hybrid public/private approach

And then, of course, why not hook up some more buildings? But you can do better than that; if you have all this capacity, you could link up to the company across the street and charge them for it. Then you might extend it to their other site across town. And private players may decide to hook in and build access links between businesses and residential users and the backbone, and start offering retail services.

A stable plan

By publishing a long-term plan of what "open links" are going to be deployed and when, private players can start to make investment plans to piggy-back on this network. A corporation might not be around in 20 years' time, markets change from week to week, private investment plans get canceled easily. A town or city is there permanently, and human geography changes only slowly by comparison.

Holistic view of cost

With this model for incremental deployment, you keep rolling until you cover the whole city. It has the advantage that there are no leaps of faith; you simply install links where you have a need for serious bandwidth, or where the cost of telco transit hurts. The EU and incumbents can't complain because you originally built it purely for your own needs - right? The open access tariff is a secondary motivator.

Posted on October 31, 2007 at 12:38 PM | Comments (0)

Planning for OPLAN I

A few weeks ago, in a post titled Phoenix MetroNets: Rising from the Ashes, I wrote about a new Municipal Wireless 3.0 stage that I believe we've entered this summer, which I labeled "Emergent Customization," to reflect the coming diversity of metropolitan broadband business models custom-tailored to suit local area needs.

One of the foremost models that should begin to get more traction in the coming year is the Open Local Access Network or "OPLAN," which British telecom pioneer Malcom Matson of Open Planet details in this interview on Telco 2.0.

According to the International Telecommunications Union, the world currently spends around $1,600 billion a year on telecoms. Under heavy government regulation shaped by the sector itself, this money ends up with 'operators' selling us a 'service' on terms unrelated to the capital and maintenance costs of the underlying infrastructure. The question we must ask is whether we can deploy the digital technologies of 'abundance' under a radically different business model, whereby this money could deliver greater benefit by being left with end users in their local economy. Malcom Matson at OPLAN.org

More on the interview after the jump.


The nutshell definition of an OPLAN is a privately financed access network, dedicated to serving a local geographic community (anywhere from a street or business park to an entire town or city). It is open to all-comers who wish to interconnect with it. It isn't tied to a specific technology, but typically means deploying fibre access with symmetric speeds, since many users may produce more traffic than they consume.

Access outside of the local network (e.g. Internet access) is a service which is provided by a partner on top of the access network. The OPLAN itself provides no services whatsoever beyond local transmission.

Partners in developing an OPLAN are typically municipalities although Malcolm stresses that it is their covenant as an anchor tenant, committed to using the OPLAN for all its local connectivity needs, that is the key, NOT direct municipality investment. Long-term he argues that OPLANs will become owned by passive institutional investors (e.g. pension and insurance funds) as 'the new real estate,' delivering stable returns, low risk and passive investment management costs. The key defining feature of an OPLAN is the legal and financial set-up of the network which, whatever the corporate structure, prevents the OPLAN from acting like a traditional telco.

I think it's key to note that the local municipality, as well as the school district, health care providers, and other local public sector entities play a vital role in kick-starting this process. Someone has to get things started. By committing to use this type of network as a first step, these entities provide the catalyst to get a network in place, so that the market can then take over.

"Well, if it's such a great idea, how come these OPLANs aren't popping up all over?" the interviewer asks.

Malcolm responds:

OPLANs are only a 'good idea' for the mass of citizens and businesses that are not part of the global telecoms/cable TV cartel. For the latter, OPLANs are the kiss of death to their vertically integrated service-provider business models! But because these vested interests are massive corporations (and tax generators), they have the ear of public policy makers and their now, great ally the regulator, to tilt and twist the market terrain to extend their life way beyond what a true free market would otherwise permit. But I believe we will see a collapse of the service provider model and an explosion of OPLAN developments in the next decade. 'When?' precisely, will depend on the vision and political commitment of the pioneering cities who have the courage and determination to go for an OPLAN solution.

It's in your hands, all you Change Agents and Champions for a Better Tomorrow. Let's Get Going!

Posted on October 31, 2007 at 10:50 AM | Comments (0)

And Now for Something Completely Different

I'm stepping out in the world of blogging, adding my first embedded video. You'll appreciate the ten minutes you invest in watching this - it's a TWO-BY-FOUR TO THE HEAD.

The Mother of All Battles

British telecom pioneer Malcom Matson details a squandered opportunity from back in 1984, where the UK had an opportunity to accelerate into the digital age, but failed to take advantage of it. He describes three advances in digital technology, here and ready to go now, that change the name of the game in telecommunications: 1) fiber optic technology, with infinite capacity; 2) digital chip technology, with dramatically increased capabilities to process and store data; and 3) spread spectrum wireless technology, which brings us wireless mobility.

Check it out.


The Old Telecom Business Model - a scarcity-based business model, where a vertically integrated professional network operator manages a closed network and charge retail service fees to retail consumers in exchange for providing access to a limited commodity - Internet Access (and in many cases, bundled content and applications). In today's case, broadband bandwidth is but one more service to mete out to a starving consumer class, who should be grateful for the services the telecom provides over its proprietary network in a low-competition business environment. This service is more akin to buying a ticket on a railroad line to go from point A to point B.

The New Telecom Business Model - an abundance-based business model, where a neutral network owner (city, pension fund, etc.) manages an open network and charges wholesale service fees to service providers in exchange for providing access to an abundant commodity, local network access on which to run services and applications for resale to retail consumers. In this new case, the provisioning of broadband bandwidth is separated from the retail services, content, and applications. The Open Network brings an abundance of retail service providers and the benefits of bounteous competition, turning bandwidth into a basic commodity and letting consumers pay instead for retail value-added services. This service is more akin to driving a car on a road or highway, to go wherever you damn well please.

We know who won in the battle open and closed models in transporation, don't we? Railroads with their closed models were revolutionary in their day, but then along came cars with the freedom to go anywhere there was a road. So dirt roads gave way to paved roads to highways to Interstates, and we haven't looked back. Railroads are still here, but they missed their chance and couldn't compete, because you had to go where the rail was.

So I ask you, what's so different about moving bits of data around, when compared to moving physical objects? Choice is choice, whatever it is you're moving, and enhanced competition and lower prices make it an easy decision. Sometimes we just need a 2x4 to the head to see things in a new light.

Posted on October 31, 2007 at 10:01 AM | Comments (0)

Obama to the Telecoms: Our Internet, Not Yours

The telecoms say they don't want the government telling them how to run their business, but in wanting to choose who gets to send what bits for how much through the internet (which, we may all recall, was invented in government laboratories) they want to tell individual internet businesses, plus all the hobbyists, what should and shouldn't be done on the internet.

That's a sure recipe for strangling innovation and freedom and is the opposite of what the net neutrality does. Net neutrality says "you can't control who does what with the Internet. You can't choose winners and losers." When the government says "you must obey Net Neutrality" it is saying "the Internet doesn't exist for the ISPs, it exists for the country. It's not AT&T's network. AT&T holds it in trust, same as with the phone network. It's a public asset we allow to be managed by private enterprise. In exchange for that private enterprise is expected not abuse their power." Obama To The Telecoms: You Don't Get To Tell People How To Use The Internet

See this link for a video clip of Obama taking the Net Neutrality issue head-on in an MTV forum. A web-savvy small business, an engineer no less, puts the Net Neutrality issue under the spotlight, asking Obama about Net Neutrality with a focus on FCC commissioners and their role. Obama is unequivocal in his response.

"Right now the speed with which and quality of your downloads or links are the same if you're going to the CNN or Time Warner website as if you were going to barackobama.com. But what you've been seeing is some lobbying that says that the servers and portals through which you're getting information over the Internet should be able to be gatekeepers and to charge different rates to different websites and webcasts. So now what you'd have is, potentially, you could you could get much better quality from the Fox News site and you'd be getting rotten service from some mom and pop site. And that, I think, destroys one of the best things about the Internet - which is that there is this incredible equality there.

And people, if you've got a good idea and get a great website - Facebook, MySpace, Google might not have been started if you had not had a level playing field for whoever has the best idea. And I want to maintain that basic principle in how the Internet functions and so as president I'm going to make sure that that is the principle that my FCC commissioners are applying as we move forward."

Here, Here...Huzzah, Huzzah!

Posted on October 31, 2007 at 08:47 AM | Comments (0)

John Edwards: Fight Corruption, Take Back Our Government

Our nation's founders knew that this moment would come - that at some point the power of greed and its influence over officials in our government might strain and threaten the very America they hoped would last as an ideal in the minds of all people, and as a beacon of hope for all time.

That is why they made the people sovereign. And this is why it is your responsibility to redeem the promise of America for our children and their future.

It will not be easy - sacrifice will be required of us - but it was never easy for our ancestors, and their sacrifices were far greater than any that will fall on our shoulders. John Edwards: The Moral Test of our Generation (major speech, full text)

It's a good speech, recommend you check it out.

Posted on October 31, 2007 at 08:15 AM | Comments (0)

What Would Woodward and Bernstein Do?

Continuing with the Watergate II theme ...

As much as I promote Alternative Broadband on this blog, I guess it should come as little surprise that I've really become more and more used to getting my news from Alternative Media, namely, from special interest blogs and websites. Frankly, I find the writing superb and the reporting excellent, generally a cut above what you will see from the Main Stream Media (MSM).

It's amazing that since I began reading these blogs say six-nine months ago, I consistently find myself reading old "news" the next day in the morning paper, in what you might call a summarized version. Or when I have time to watch one of the cable news shows, I realize how much detail and nuance is missing. And you might as well forget the really mainstream media such as CBS News or USA Today, which provide the viewer what could only be termed as Cliff Notes News, dumbed-down at that!

These blogs, when you get used to reading past the opinions and the informality, provide some very compelling insights into what is going on in the world. They come across as fresh, if a little obsessive. Take these two that I highlight in this post today as an example.

The Anonymous Liberal is written by an attorney, who is self-described as Who Am I? For what it's worth, I'm a litigator at a large national law firm (at least until someone offers to pay me to write about politics). Until then, I'll just have to go by A.L. As an attorney, A.L. brings a level of subject matter expertise and attention to detail that a regular reporter could only dream of. See this analysis of the telecom immunity issue in Did the Senate Intelligence Committee Disclose Key Evidence of Telecom Illegality?

Consider next these two recent posts on The Next Hurrah. These two articles are great examples of how this Alternative Media can focus on details that may be considered too arcane for the mainstream press to cover, but are nevertheless relevant to give a more complete picture.

On October 25, this post, The United States of AT&T Wants Satellites Now, Too, highlights the potential of very large well financed companies to grow ever larger and more powerful, supporting the role of government to exercise oversight and keep things in balance. Something to think about when we consider how that power can be used in light of recent revelations, like ...

On October 27, this post, The Dodge on Retroactive Immunity, provides a good summary of how a Democratic-majority congressional committee could consider acquiescing to the demand of a weak Republican administration to grant retroactive immunity to telecommunication companies that broke the law in supporting the administration's request to use the networks they manage for domestic spying. That's still a head-scratcher for me.

This post is well-written and succinct as it goes into detail examining the inner workings of the committee and its approach to the law, on this compelling constitutional issue. I found it both informative and riveting.

The law says that only the AG or someone specified in 2518(7) may provide the telecoms with the certification that their actions are legal. Here's what 2518(7) says:

(7) Notwithstanding any other provision of this chapter, any investigative or law enforcement officer, specially designated by the Attorney General, the Deputy Attorney General, the Associate Attorney General, or by the principal prosecuting attorney of any State or subdivision thereof acting pursuant to a statute of that State, who reasonably determines that— [my emphasis]

So the only people who may give telecoms the authorization that their eavesdropping is legal are: the AG, the DAG, the AAG, and any principal prosecuting attorney, such as a USA [Actually, maybe this means a State AG].

Yet, as the report informs us, for a period of time (a period of time, I might add, at some remove from 9/11), none of those people had signed off on the wiretapping program. After the Deputy Attorney General, as the Acting Attorney General refused to endorse the legality of the program, Alberto Gonzales authorized it.

The Committee can say, however, that beginning soon after September 11, 2001, the Executive branch provided written requests or directives to U.S. electronic communication service providers to obtain their assistance with communications intelligence activities that had been authorized by the President.

The Committee has reviewed all of the relevant correspondence. The letters were provided to electronic communication service providers at regular intervals. All of the letters stated that the activities had been authorized by the President. All of the letters also stated that the activities had been determined to be lawful by the Attorney General, except for one letter that covered a period of less than sixty days. That letter, which like all the others stated that the activities had been authorized by the President, stated that the activities had been determined to be lawful by the Counsel to the President. [my emphasis]

But Alberto Gonzales was not then one of the named people who could authorize such wiretaps. He was an attorney, but not a prosecuting attorney. In fact, at the time, he was not a law enforcement officer at all (unless you count someone enforcing Cheney's law as a law enforcement officer).

As I pointed out above, the committee tries to get around this inconvenient legal fact by waving around purposely vague language, using the phrase "certain other officers" to hide the fact that only specific other officers have the authority to authorize such wiretaps. They do it again in their final justification for extending immunity to the telecoms--replacing the titles of the very specific officers who can authorize wiretapping with another vague phrase, "high-level Government officials."

On the basis of the representations in the communications to providers, the Committee concluded that the providers, in the unique historical circumstances of the aftermath of September 11, 2001, had a good faith basis for responding to the requests for assistance they received. Section 202 makes no assessment about the legality of the President's program. It simply recognizes that, in the specific historical circumstances here, if the private sector relied on written representations that high-level Government officials had assessed the program to be legal, they acted in good faith and should be entitled to protection from civil suit. [my emphasis]

Effectively, the committee has rewritten the law to accommodate Bush's actions when he deliberately bypassed his own DOJ.

So, in addition to giving the Administration carte blanche to hide its own wrong-doing by invoking State Secrets and thereby depriving its accomplices of any defense, the committee has effectively rewritten the law. Where the law very clearly specifies that only a senior law enforcement officer may authorize wiretaps, they've inserted vague language that extends that authority to any hack who is willing to do the President's Vice President's bidding.

And in the process, most Democrats on the committee have written a convenient excuse for actions that amount to giving not only the telecoms, but Bush and Gonzales immunity.

So, it's not just about telecom immunity, but also about covering the tails of Bush and Gonzales. I have to think that if Woodward and Bernstein were on the trail of this current ongoing political drama, they would be writing something like what is written above at The Last Hurrah. So we have journalists pointing the way, what is missing in today's political world is a Congress with a backbone to stand up to this Administration's overreaching interpretations, subjugations of the Constitution, and abuses of power.

Posted on October 31, 2007 at 07:29 AM | Comments (0)

Unitary Executive v. Constitution - You Make the Call

Critics claim the President has used the war on terror to put himself above the law and that he has created a secret presidency of classified decisions and orders, that approve extraordinary renditions, torture, illegal detentions, and wiretapping without warrants with the collaboration of big telecom companies. This boundless secrecy and surveillance evokes images counter to American values. Bill Moyers Journal: Power and the Presidency

What good is broadband for all if this powerful new tool gets perverted and twisted into a means to repress political expression, to enable our government to flout our constitutional rights to privacy, to take away the country we love?

As much as I hate to say it, broadband policy has become more serious over the past several weeks. While the subject has always been inextricably wrapped up in national, state, and local politics, the discussion has generally been about getting access to a benefit, or on the downside, being denied a benefit. And it continues to be about benefits and consumerism, 99% of the time.

But there is a growing awareness of a new aspect to this network. We've shifted to talk about broadband networks becoming a threat to our lives and our liberty. It's not hyperbole to say that the Internet, when used as a tool and operated outside the bounds of laws, under the control of corporations that do not consider themselves to be subject to the same laws that you and I are, has become a realistic threat to democracy.

It doesn't have to be this way, and we are at the very beginning of this discussion. This is an important theme to pursue at this moment in our history.

Along with the excited talk about the potential of dual use iPhones and video over IP, we need to look at a darker underside to this broadband phenomenon. Because when comparing threats, the looming ExaFlood pales in comparison to the present subversion of the Constitution.

Check out this powerful video segment and see if you don't feel the same way. Moyers concludes his segment with this exchange, remembering a seminal moment from a mere 33 years ago.

BILL MOYERS: But listen to this voice from the past. From 1974. The Watergate scandals had revealed astonishing crimes and secret abuses of power by President Nixon and the men around him. The House Judiciary Committee was deliberating Nixon's impeachment. Congresswoman Barbara Jordan of Texas went straight to the heart of the matter:

BARBARA JORDAN: My faith in the constitution is whole it is complete it is total and I am not going to sit here and be an idle spectator to the diminution, the subversion, the destruction of the Constitution.

Posted on October 31, 2007 at 07:10 AM | Comments (0)

Tangled Webs, Wicked Ways

Oh what a tangled web we weave,
When first we practice to deceive!
Sir Walter Scott, Marmion, Canto vi. Stanza 17

I always liked the poetic element of this quote and assumed it came from Shakespeare. Thanks again to Google and Wikipedia, I discovered that Sir Walter Scott wrote this one. Of course, this quote is a classic way to describe what happens when we lie - the story gets more and more complicated. Rather than relying on the Truth, which does not change, when we lie, we create a fiction in order to deceive someone. Whether the purpose is noble or not, the deceit requires maintenance, and because it is made up out of whole cloth, there's no record - thus, things get more and more complicated as the deceit progresses, and relationships are damaged due to broken trust, and some form of chaos ensues. This societal "truth" is the foundation of every murder mystery, detective story and crime drama - it's fascinating to watch the deceiver and his carefully crafted story of deceit become ever more entangled until they're ultimately exposed, or they get away with the deception (always a short-term win, for the winner is corrupted by long-term success at deception).

In similar fashion, I've been posting articles on the unfolding scandal of FISA and Telecom Immunity, not only because it's fascinating to watch this ornate story unfold, just like the best of the detective stories, but also because it may well shine the light on a carefully constructed myth: call it "Broadband by Bell." For it is a tangled web that the incumbent broadband providers have woven, not only in the networks they've built - literal tangled webs - but also in the line they've fed society that they are the only ones able to manage broadband. Yet our large telecom (and cable) companies are here to stay and the central question for our society when it comes to broadband telecommunication is

"How shall we move our country onto a more sound footing when it comes to broadband infrastructure? For it will either be by working through these large companies, or by working around them."

For better or worse, our very complex communication web in this country is based on a history of government outsourcing development risks to the private sector, in most cases, to a regulated monopoly (AT&T). From the start, it's been a complicated yet incredibly successful venture, one that has evolved into a myth, starting with Alexander Graham Bell's "Watson Come Here" line and moving forward to Bell Labs series of technical discoveries in the 20th century.

Over the past 35 years we've watched as first deregulation, then feeble attempts at competition, and finally technological advances have challenged the myth's central truth, which is that we are best served as a society by continuing to outsource telecommunication needs to the traditional companies, leaving these complex telecommunications issues to the professionals ("don't try this at home."). We're led to believe that only a very large company can provide us with the broadband network that we need.

Tangles are a wonderful metaphor because wherever there is a line, there is a tangle that must be sorted out. I experience this primordial frustration every time I do yard work, as I struggle with the hoses and the 100-foot extension cord. Years ago in my youth, I worked on a sailboat - a guy in port told me of his time working as a cook on a long-line fishing boat and shared a key lesson: "Never serve spaghetti to a crew on a longliner."

Fishermen spent much time untangling and mending their lines and nets. There is even a myth involving tangled line from Greek times to describe an intractable problem - The Gordian Knot, - a legend associated with Alexander the Great, often used as a metaphor for an intractable problem, solved by a bold stroke ("cutting the Gordian knot").

Today in America, we face a tangled web when we consider what to do about broadband. It may be a Gordian Knot, but there appears to be no bold stroke waiting for us as a solution to our problem.

Not only do we have
- this legacy of what to do with the large and powerful corporations created out of the regulated industries;
- the complex political maneuvering and conflicting stories in public and in the backrooms to confuse the issues;
- high stakes in the outcome;
- billions of dollars at issue;
- industry changes of historic proportion;
- political careers at stake;
- entrenched stakeholders with long histories of betrayal; and
- a pervading lack of trust;

But also, we have
- new technologies like Wi Fi Mesh (802.11a,b,g,n); WiMAX, FTTH, PON that bring with them alternate ways to "skin the cat;"
- new technologies that disrupt the way we access the Internet;
- new technologies that challenge the meaning of "voice" and "video;"
- new user behaviors as the Internet matures;
- new derivative benefits from telecommunications that disrupt old ways of doing things;
- new business models that open up the industry to new players; and
- a seemingly inescapable need to invest large amounts of capital to build the infrastructure that will both meet our evolving needs and bring all these benefits.

I've borrowed a term from organizational and social theory, called the Wicked Problem, to better understand what we face as we look at broadband. I would recommend you look at my previous post from one month ago today Broadband in America: a "Wicked Game We Play".

Here's a short excerpt.

The concept of "wicked problems" was originally proposed by Horst Rittel (a pioneering theorist of design and planning, and late professor at the University of California, Berkeley) and M. Webber in a seminal treatise for social planning. Rittel expounded on the nature of ill-defined design and planning problems which he termed "wicked" (ie. messy, circular, aggressive) to contrast against the relatively "tame" problems of mathematics, chess, or puzzle solving. Wicked problem - Wikipedia

Key Aspects of The Wicked Problem
1. You don't understand the problem until you have developed a solution.
2. Wicked Problems have no stopping rule.
3. Solutions to Wicked Problems are not right or wrong.
4. Every Wicked Problem is essentially unique and novel.
5. Every solution to a Wicked Problem is a "one-shot operation."
6. Wicked Problems have no given alternative solutions.

In plain English, there are some problems whose nature is so complex and changing that the only way to solve them is through cooperation and dialogue, first to reach a shared understanding of what the problem is - how to define it - and second, to devise a series of trials that will test out potential solutions and bring back more information that can be used to develop a more refined solution. And in the end, the Wicked Problem has no conclusive solution, only one that is acceptable to the group as "good enough for now."

That's where we are with Broadband in America. We face an issue at once so critical, complex, and so dynamic that a sustainable solution for the benefit of all stakeholders in society will only be obtained if we first come together to work jointly to define the problem to our mutual satisfaction, then build on the trust we have generated to craft together a series of partial solutions that will reveal the optimal path over time.

We've been looking at broadband in much the same way that we've looked at traditional telecommunications: through different lenses that lead us to see different problems to be solved. Each stakeholder group, from communities to consumers to network operators to content providers, has vested, competing interests and different, competing priorities. We each have different levels of sophistication when it comes to being able to discuss and work on these issues, and often the issues seem even too complex to manage, so we lay them off on others to solve, or we put things off until later, and the issues don't get resolved. They only fester and grow more complicated with more time.

The time has come to face these facts and begin work on a sustainable solution. The time has come to set aside past differences and sit down together to come up with a plan that will work for all stakeholders. There will be some who will not wish to support such a joint effort at this time. There will be others who will deny the need to attack this issue in such comprehensive fashion. But that will not make the issues any simpler, nor will it make us need broadband infrastructure any less.

I'm reminded of a book we used to read to our kids, a game they used to play in PreSchool: "We're Going on a Bear Hunt." See this great video on YouTube.

We're going on a bear hunt.
We're going to catch a big one.
What a beautiful day!
We're not scared.

Uh-uh! A snowstorm!
A swirling whirling snowstorm.
We can't go over it.
We can't go under it.

Oh no!
We've got to go through it!

Hoooo woooo!
Hoooo woooo!
Hoooo woooo!

Bear Hunt Song

Only, unlike when we were kids, we can't run away at the end when we find the bear - there's no warm bed to hide under the covers waiting for us. We have to solve this problem on our own, together. It's a sobering task, being an adult.

We can run away, we can delay it, we can place blame - but then, we've been doing all these things and it hasn't gotten any better.

Or, we can decide to face our problem and deal with it head on.

When it comes to broadband, we've got to go through it, folks.

Posted on October 30, 2007 at 09:02 AM | Comments (0)

The Revolvng Door between Government and Telecom Industry

Writing in The American Prospect, Brian Beutler lays out a relationship that doesn't get a lot of attention in the Main Stream Media (that's "MSM' to regular readers of blogs.) Beutler describes in detail how the news of telecoms doing the bidding of government should not be a big surprise, because they all know each other and more than likely, have worked with each other under the same corporate or government logo at one time or another.

It seemed like shocking news last week when the telecommunications giant Verizon admitted it has readily allowed warrantless national security investigators to browse customer records on thousands of occasions. But given the revolving door between the telecom industry and federal government, no one should be surprised by their cozy relationship.

According to OpenSecrets.org, a Web site run by the Center for Responsive Politics in Washington, D.C., the worlds are well connected : There are no shortage of government officials who once worked in the telecommunications industry, and no shortage of telecommunications industry execs who once worked for the government.

This is not altogether uncommon in government and large corporate business, especially at high levels, but it seems to be especially common in telecommunications.

Many of the men and women who have hopped the fence - sometimes more than once - between government and telecom have done so via predictable channels. It's not uncommon, for instance, for aides and commissioners to the Federal Communications Commission to come from or move on to careers in telecommunications. It's arguably not even that surprising. But there are also the executives - like those who fill Verizon's ranks - who have spent years fighting for the government's right to pry into consumer data.

In an Oct. 12 letter to Democratic lawmakers, Randal S. Milch, senior vice president and general counsel to Verizon, admitted that, in tens of thousands of instances over the last two years, his company has provided government officials with subscriber information without court orders. According to the letter, that information has included subscriber names and addresses, local and long-distance telephone connection records, and methods and sources of payment.

Milch serves alongside William P. Barr, who is executive vice president and general counsel to Verizon. In Barr's past life, he was an analyst for the CIA, who went on to serve as a domestic policy adviser to President Ronald Reagan and as the attorney general of the United States under President George H.W. Bush. Throughout his esteemed government career, and well after he'd moved into the telecommunications industry, Barr has shown a voracious appetite for government surveillance.

So, it's not just that they all know each other - they share a common agenda, which is to leverage their access to data for their own purposes. In government or telecommunications, executives from both sides are in positions of public trust, so this is worrisome.

In 1995, after he'd made the switch, he told the House Judiciary Committee that "emergency wiretap authority exists under current law with respect to a range of criminal activity. Existing emergency authority has been sparingly used and I am not aware of any indication of abuse. It is clearly appropriate that the same emergency authority that applies with respect to mafia conspiracies also applies to terrorist conspiracies."

He argued that, when conducting surveillance, a single subpoena issued by the government should be sufficient to cover multiple telephones registered to an individual target. "It is impractical to identify a particular phone. This is perfectly in line with constitutional protections. After all, the right to privacy guaranteed under the Fourth Amendment is an individual's right to privacy; it is not an inanimate object's right to privacy. Roving wiretaps targeted at particular suspects rather than specific phones should not cause alarm."

Barr's testimony was cited in the House Report on the Comprehensive Antiterrorism Act of 1995 as justification for an expansion of federal wiretapping authority. The following year, he advocated on behalf of the use of intelligence information in domestic law enforcement proceedings in cases of suspected terrorism.

And that was all before Sept. 11, 2001. After the terrorist attacks, Barr re-emerged on Capitol Hill to lend his support to controversial measures such as beefed up executive privilege, broadened Foreign Intelligence Surveillance Act authority, and both the use of military tribunals in specific and the USA Patriot Act more broadly.

Barr represents perhaps the most overtly wiretap-friendly liaison between the telecom industry and the government of the United States, but he's far from alone at Verizon. Peter Davidson, Verizon's chief lobbyist, was once a staffer in the Justice Department's Office of Legal Counsel, and served as general counsel to former Texas Rep. Dick Armey when Armey was House majority leader.

Additionally, a former senior vice president at Verizon, Edward Whelan, was from mid 2001 to 2004 the principal deputy assistant attorney general for the Office of Legal Counsel. He clerked as well for Justice Antonin Scalia and, later, wrote an article defending Justice Samuel Alito who, in memos that eerily presage the current FISA debate, argued "an executive branch official who authorized the illegal wiretapping of U.S. citizens without a warrant should be immune from lawsuits," according to Charlie Savage of the Boston Globe. The Alito memos were written in his Justice Department days, before he was appointed to the Supreme Court.

None of this necessarily means Verizon and other telecom firms can't be trusted to honor our privacy, and the law. But it does show that if the executive branch wants access to nominally protected information, or the Congress wants to expand the legal framework in which surveillance is allowed, the doors are wide open and their friends are eagerly waiting.Snoops Get a Direct Line |

This type of perspective puts these events in a whole new light for me. It makes them that much more serious because it becomes hard to see where the government ends and the telecom company begins.

Posted on October 29, 2007 at 03:04 PM | Comments (0)

Laura Scher Kicks Some Assets

Laura Scher, co-founder, chairperson and CEO of Working Assets, has written a couple of blogs that beg to be shared with you.

Working Assets is a mobile and credit card company founded in 1985 "on the belief that building a business and building a better world are not mutually exclusive." The company has donated over $50 million to progressive nonprofit groups. As CEO, Laura helped Working Assets grow to more than $100 million in annual revenue. Laura now is a lecturer at Stanford University, teaching "Social Innovation and Entrepreneurship" at the undergraduate level.

In early October, Laura wrote about the propriety of an Internet Service Provider that would reach into your emails and censor you, based on their determination of what is appropriate use of "their" network. HMMMMMM....did you read the fine print of your contract?

Last week we witnessed Verizon trying to prevent a nonprofit from communicating with its own members because the company believed the content to be unsavory. Under the pressure of The New York Times front-page story and a storm of criticism, they caved.

Now it's happened again: another communications company trying to limit communications of its subscribers. This time, AT&T has added a bizarre provision in its terms of service that its network subscribers - anyone using AT&T for internet service - cannot participate in "conduct that AT&T believes...tends to damage the name or reputation of AT&T, or its parents, affiliates and subsidiaries."

So the message from AT&T is: if you're using AT&T for your e-mail, be careful what you say. Goodbye free speech. Hello, corporate censorship.

But let's be clear: the only one doing real damage to AT&T . . . is AT&T's own corporate policy .

Sadly, we have few alternative services. Over the past 10 years we have seen consolidation instead of competition. Where there were once 10 phone companies now there are but a measly four. Most of us have only two choices for Internet access and both are enormous companies. Our government has remained silent, if not complicit, as this consolidation has occurred. The FCC and Department of Justice have approved merger after merger, each of which reduced - not encouraged - competition.

Remember, today's "new" AT&T (which, not incidentally, has given over $1.8 million to Republican candidates) is really SBC, which, before it took over that telecom giant, gobbled up Ameritech, Pacific Bell, Bell South, and Cingular, among others. It's noteworthy that these companies originated as regulated utilities, charged with the rights and responsibilities of providing a public good. Yet today the regulators, instead of protecting the citizens of this country, protect and abet the companies that are eliminating consumer choice through voracious mergers.
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I leave you with one unsettling question. How does AT&T find out if we're writing e-mails that are "damaging their name? " Are they now tracking our in-boxes? If you read this and use AT&T for your Internet service, why not give this a try: e-mail this article to a friend. It's the most subversive thing AT&T thinks you can do. October 5, 2007. AT&T: Out of My In-Box!

After the jump, I've captured a more recent blog by Laura that speaks directly to the current imbroglio concerning FISA and Telecom Amnesty.

It's been all over the news that in 2007, executives at Verizon and AT&T donated over $42,000 to Senator John D. Rockefeller, IV, chairman of the Senate Intelligence Committee. Prior to 2007, Rockefeller wasn't getting any significant contributions from telecomm executives. But of course, prior to 2007, Rockefeller wasn't pushing his committee to grant retroactive immunity to phone companies that helped the NSA with its secret, warrantless surveillance on America's telephone calls.

There are so many reasons to be enraged by this.

As CEO of Working Assets, the socially responsible mobile and long distance company, I have watched for 15 years while big telecom "bought" monopoly power from Congress, from the White House and from the FCC. This is how they do business. Instead of building the best phone company, they buy politicians.

Instead of the vibrantly competitive telecom landscape promised by the deregulation of AT&T in 1984 and the Telecom Act of 1996, today we have a handful of telecommunications companies controlling legislation and policy, consolidating instead of innovating, and shutting out competitors. All with the blessing of the FCC.

Once upon a time the FCC took its role seriously, and required the phone companies to lease their networks. For a brief moment we had a competitive local telecom market offering a range of customized bundles and new features. Working Assets offered local service and doubled our donations for the customers who participated. But in due course the FCC bowed to the phone companies, and competitive local service simply vanished.

To add insult to injury, our politicians are cheap dates. For $42,000, these mega telecoms made a small but effective investment, given the magnitude of the lawsuits they are hoping to avoid, upwards of billions of dollars of damage. That's cheaper than hiring a D.C. lawyer for a week. When an issue is below the radar screen, it's easy to buy influence. But now that the issues have gone from thwarting competition to spying on Americans, I hope the public will start to pay attention, and hang up on the telecom companies' on-going campaign to buy the law that suits them best. Money Talks

Posted on October 29, 2007 at 02:43 PM | Comments (1)

A Long, Not So Gentle Backslide: Ersatz Oversight

I'm reminded of the "With Friends Like These, Who Needs Enemies" quote when I consider current events in our Democratic-majority Congress, more specifically, the Intelligence Committee and the FISA/Telecom Amnesty Issue. What passes for oversight and checks and balances these days, while a distinct improvement over the sad history of the first six years of this new century, still has a long way to go to get back to where it was a generation ago after the reforms that followed Watergate and the Nixon resignation.

Broadcast journalist, author, and social commentarian Studs Terkel has a great Op/Ed piece in the NY Times, The Wiretap This Time, where he puts recent events regarding FISA and Telecom Amnesty into perspective. And this guy has perspective:

Terkel graduated from the University of Chicago in 1934 with a law degree but says instead of practicing, he wanted to be a concierge at a hotel and also joined a theater group. He joined the Works Progress Administration's Federal Writers' Project, working in radio, doing work ranging from voicing soap opera productions and announcing news and sports, to presenting shows of recorded music and writing radio scripts and advertisements.

Terkel is well known for his radio program titled The Studs Terkel Program that aired on 98.7 WFMT Chicago between 1952 and 1997. The one-hour program appeared each weekday during all of that time. He interviewed guests as diverse as Bob Dylan, Leonard Bernstein and Alexander Frey. Wikipedia

This Op/Ed is valuable read, as Terkel reflects with first-hand experience on an inglorious past that saw the travesties of McCarthism move on to domestic spying and wiretapping of political opponents (think Martin Luther King), etc., etc. While we thought hoped we had put this behind us with the Church Amendment in the 1970s, apparently there is no rest when it comes to defending the Constitution, especially when you're defending it against assaults from within your own government.

In 1978, with broad public support, Congress passed the Foreign Intelligence Surveillance Act (FISA), which placed national security investigations, including wiretapping, under a system of warrants approved by a special court. The law was not perfect, but as a result of its enactment and a series of subsequent federal laws, a generation of Americans has come to adulthood protected by a legal structure and a social compact making clear that government will not engage in unbridled, dragnet seizure of electronic communications.

The Bush administration, however, tore apart that carefully devised legal structure and social compact. To make matters worse, after its intrusive programs were exposed, the White House and the Senate Intelligence Committee proposed a bill that legitimized blanket wiretapping without individual warrants. The legislation directly conflicts with the Fourth Amendment of the Constitution, requiring the government to obtain a warrant before reading the e-mail messages or listening to the telephone calls of its citizens, and to state with particularity where it intends to search and what it expects to find.

Compounding these wrongs, Congress is moving in a haphazard fashion to provide a "get out of jail free card" to the telephone companies that violated the rights of their subscribers. Some in Congress argue that this law-breaking is forgivable because it was done to help the government in a time of crisis. But it's impossible for Congress to know the motivations of these companies or to know how the government will use the private information it received from them.

And it is not as though the telecommunications companies did not know that their actions were illegal. Judge Vaughn Walker of federal district court in San Francisco, appointed by President George H. W. Bush, noted that in an opinion in one of the immunity provision lawsuits the "very action in question has previously been held unlawful." The Wiretap This Time

Posted on October 29, 2007 at 01:39 PM | Comments (0)

Medieval Medicine: Mortal Remedies, Suspicious Cures

I don't know about you all, but I'm not altogether impressed with the work to date of the Homeland Security agency.

I for one do not feel any safer than before this huge bureaucracy was created after 9/11. Tick off just these three items from the long list of evidence ...
- Warning us of threats - the color scheme was downright silly from the start, then became untrustworthy when it was shown that heightened alerts were timed for political effect
- Protecting us from our airplanes - The Transportation Safety Administration was smart when they sealed off airplane cockpits after 9/11, but that's where it stopped for me. I fail to see how making me take off my shoes and my belt and pull out my laptop, how frisking old ladies, how fighting with nursing mothers over their baby bottles, how confiscating shampoo, hand lotion, and nail clippers helps us more than hurts us. Have we gone crazy?
- Protecting us from our borders - The Border Patrol intends to build along the US/Mexico border, while many local officials fight off their efforts. The bad guys have to realize that a fence in Mexico would just make entry from Canada that much more attractive, or for that matter, sailing in along the coast would not be so hard. It seems we're much more afraid of the cultural threat of more illegal Hispanics than we are of terrorists.

You get the picture - it's not an inspiring track record, especially considering how much money we're spent in order to be safer.

Yet our ports for one thing remain vulnerable, as do our nation's chemical facilities, and indeed, much of the rest of our national infrastructure.

So I'm not exactly filled with warm feelings when I read today that Homeland Security is concerned about the safety of the Internet. I'm concerned too, but in a different way. And after reading this editorial in today's New York Times The Information Highway Patrol, I'm not sure this particular patient can stand this particular doctor's cure. It sounds more like applying leeches to bleed the patient to remove the evil spirits. No thanks.

Getting the NSA and 2,000 workers involved in a secret plan to "secure" our nation's vital information infrastructure sounds quite suspicious, especially in light of recent revelations on other domestic surveillance programs detailed in my recent posts on this site. And when members of the Congressional oversight committee are kept in the dark, I get even more uneasy.

I would offer one small piece of advice - the more diverse our community of Internet Service Providers, the harder it would be for anyone to tear down the Internet. The more dispersed its centers of control, the more difficult it is as a target. The way to attack a network is to go for the hubs, those critical areas of concentrated activity. So the more hubs there are, the less damage taking out one of them would cause.

I believe our security from threats to infrastructure will come more from spreading out the critical pieces, so that if one piece is lost, the body does not suffer so much. We need to get our protection from the private marketplace. I don't believe our security will be improved by letting our government keep ever more secrets or spend ever more money to gather more and more sensitive information, while at the same time putting more and more eggs into the few baskets of very large telecom and cable service providers. I don't get it.

Read the editorial below and see if you're not just a little concerned about the proposed cure to the problem of a vulnerable Internet.

No one can envy the Department of Homeland Security its multifarious responsibilities stretching from port security to cyberspace. But surely the agency is obliged to respond fully to Congressional inquiries about its murky plan to monitor government and private communications in the name of protecting the information infrastructure from terrorists. Details have been vague, but the plan reportedly involves some 2,000 workers and the expertise of the National Security Agency and other espionage specialists to guard the Internet.

It's no wonder members of Congress are curious, considering the administration's subversive track record of domestic spying. Members on the Homeland Security panels - who complain they are too much in the dark - have asked the agency to hold off on plans to unveil the program as early as next month. Constitutional and privacy questions need to be adequately answered first.

The nation remains unprepared for a major Internet crash, according to the latest accountability report from Congressional monitors. A proper defense obviously requires close cooperation from experts in government and private industry. A bit of progress was noted in the hiring of an assistant secretary to coordinate cybersecurity. But Congressional monitors find the effort lagging, with a major reason the private sector's mistrust of the leadership at the Department of Homeland Security.

The agency has a huge task, securing the communications infrastructure while protecting the government's ability to communicate in an emergency. It cannot afford to undermine that effort by withholding information from Congress. Answer the questions; make the case along the delicate ridge between national security and constitutional privacy.

The citizens are knowledgeable users of the Internet and sense both its vital role and fragility. They want it protected. They just need informed reassurances by way of their elected representatives, not vaporous edicts from the administration.

Posted on October 29, 2007 at 09:06 AM | Comments (0)

The Road to 1984, paved with good intentions

Airstrip One is part of the vast political entity Oceania, which is eternally at war with one of two other vast entities, Eurasia and Eastasia. At any moment, depending upon current alignments, all existing records show either that Oceania has always been at war with Eurasia and allied with Eastasia, or that it has always been at war with Eastasia and allied with Eurasia. Winston Smith knows this, because his work at the Ministry of Truth involves the constant "correction" of such records. "'Who controls the past,' ran the Party slogan, 'controls the future: who controls the present controls the past.'"

In a grim city and a terrifying country, where Big Brother is always Watching You and the Thought Police can practically read your mind, Winston is a man in grave danger for the simple reason that his memory still functions. He knows the Party's official image of the world is a fluid fiction. He knows the Party controls the people by feeding them lies and narrowing their imaginations through a process of bewilderment and brutalization that alienates each individual from his fellows and deprives him of every liberating human pursuit from reasoned inquiry to sexual passion. Amazon.com synopsis of George Orwell's 1984

My daughter and my wife recently read 1984, and I'm tempted to go back for a second read, having first read it back in 1973 at age 16, when 1984 seemed a long way off, both literally and figuratively. Back then, in my youth and in a more simple time, I couldn't imagine such a horrible world, but George Orwell, writing in 1948 and having just lived through the horrors of World War II totalitarianism and amid the fresh realization of the ongoing hell that Joseph Stalin had produced in the Soviet Union, had no problem imagining such a world in great detail. But it seemed so far away - could never happen in the USA - home of democracy, the balance of powers, the rule of law, where the right to privacy was sacrosanct and civil liberties were protected by the greatest legal and political system to ever walk the planet.

So I hesitate to write this post, because I don't want to seem paranoid, and I don't want to even imagine that that life from 30 years ago is gone, in any way, shape, or form, as if imagining it could make it come true. But when I connect the dots of recent events, coupled with the dots of recent history with telecom companies and the rise of the Internet, I think a little caution and a small dose of fear and foreboding is in order, because technology has finally enabled a future where the government can look into our private lives with great ease. It's only rational to look at the situation with skepticism even though we're assured that our government and the network operators only break the law with our best interests at heart. After all, we're constantly reminded, "We're in the middle of a Global War on Terror, and things are different during wartime..." But then, when I look at the administration's long-term vision, I see no end in sight - I think this Wartime footing goes on indefinitely...and so, one must assume, would the wartime suspensions of civil liberties.

If we do end up in Orwell's 1984 world, and I hope with all my heart that we don't, I don't think we'll wind up there through a revolution. It won't be sudden, rather, it will be through the gradual chipping away of our civil rights, enabled by a compliant press and a scared public, and through ever more powerful technology that lets the government gain access to information to wield ever more power and control. Who knows if it's next year, or ten years from now, or twenty? But surely we're on a path that has at least a growing potential to end in some kind of future like Orwell described in 1984...that is, if we don't steer away from this path by consciously building and maintaining safeguards against it.

What bothers me is that I don't think enough people realize the impact that the Internet and other digital technologies bring to this potential for authoritarian government. They dramatically alter the equation. The more citizens and businesses come to rely on broadband Internet, the more our lives move on-line ... the more susceptible we become as a society to abuse of our digital life data files. So where else does our current path take us? The more I think about this, the bigger it becomes.

Consider my assessment after the jump.

The Recent (and Past) History of Telecoms and the Law
(see recent posts here, here, here, here, here and here.)

1. From Monopoly to Oligopoly. Over the best intentions of the government to bring about competition during the past three decades, two very large and powerful telecom companies, AT&T and Verizon, have reorganized and pulled back together the bulk of the old Ma Bell, adding wireless and Internet and video along the way.
2. Might Makes Right. These companies have a history of seeing the law not so much as an absolute boundary to be respected, but more as a flexible, malleable boundary that they can change with enough money and enough political influence and enough time.
3. Good PR is Good Cover. These companies have demonstrated a history of well-calculated success in changing the law and regulations and then managing public opinion to suit their purposes and benefit their strategies. They're good at what they do, especially when it comes to getting their way.
4. Behind the Scenes. These companies have long enjoyed a cozy relationship with lawmakers and regulators, where together they share a desire to blur the lines between business and government.
5. You Scratch My Back ... These same companies have recently been found guilty of breaking the law for sharing private customer data with the federal government when it asked, but doing so without a warrant as the law required.
6. Get Out of Jail Free Card. Wrapped into "public security" legislation being promoted by the Bush administration in a climate of fear combined with very slick political maneuvering, is a provision to overturn the court's ruling against the telecoms with retroactive legislation that will give the telecoms immunity from prosecution for their law breaking. Some believe the reason documents requested by the Senate from the White House went to the Intelligence Committee instead of the Judiciary Committee was so that they could tie the request for records to a quid pro quo demand to immunize the telecoms.
7. Power, Attitude, Vision. The telecom companies control vast sums of money, unprecedented political influence, and through their information networks, they enjoy views into our private lives like never before. They have greater capability than ever to abuse their positions of trust. Which is not to say they will always do so, but this is not a good start.
8. Checks & Balances. The only thing that stands between routine violations of privacy, indeed total loss of privacy, by a repetition of these events is a credible legal barrier that keeps these network operators in check.
9. Big Brother - Not Yet. And that is the challenge raised by recent events, and that's why I think the Democrats will make this a big deal, starting with Sen. Dodd's filibuster and moving on to the presidential campaign next year.

The Recent History of the Bush Administration

1. Signing Statements = Line Item Veto. Throughout his administration, when Bush signs a new law, whatever the law, he generally accompanies it with a Signing Statement that says what pieces he agrees with and will enforce, and what he disagrees with and will disregard. In essence, a line-item veto, which the law does not give him, but which he takes nonetheless. What does "law" mean anymore with that kind of attitude? He neuters our law-making body, the Congress, with signing statements.
2. The Constitution - "More guidelines than rules per se". Sworn to uphold the Constitution, Bush has instead subjected it to the widest of interpretations to fit his policies, their maneuvers more often struck down than upheld by the courts, but too often not reviewed or challenged at all. And when that happens, Bush can always go back to the Congress to change the very laws his administration has been deemed in violation of, in effect, to retroactively overturn the court's ruling. What does "law" mean anymore with that kind of attitude? He neuters our court system, turning our rule of law upside down with such manipulation of the Congress.
3. Secrecy - What they don't know won't hurt them. Unlike any other administration, this one uses every power at its command to keep things behind the scenes and to avoid investigation and scrutiny. Under the cloak of National Security, any number of issues remain behind the curtain, and the cloak can cover up a lot of things.
4. Government Outsourcing - Let's Get This Party Started. From Blackwater to Halliburton, this administration has overseen a transfer of functions to the private sector and an incredible coziness with large corporate interests, from K Street to Wall Street. Government's role almost appears to have become to take care of large corporations first and the people second to screw the people. And to hear former Qwest CEO Nacchio tell it, telecoms are part of the large corporate feeding frenzy at the government trough.
5. National Security - The Mother of all Trump Cards. It's as if all legal rules and social mores have been suspended in the interests of National Security. We have lost our way when we see:
a. the US use torture and "rendition" so that it becomes commonplace and innocents are arrested, abused, then released with no apology;
b. the US suspend habeus corpus and allow their president to throw people in jail with no charges;
c. the US attack a country unprovoked, under a cloud of deception, against world opinion, and now, against US public opinion;
d. the US rattle sabers to attack another country, again in this preventative mode, in the absence of pursuing a diplomatic alternative;
e the US run up hundreds of billions of dollars to wage a war, with billions more to come, but no tax to pay for it and then those same leaders say that health care for poor children cannot be paid for, can't be afforded;
f. the US Justice Department brings charges against political opponents with impunity, even throwing a Democratic governor in jail, while ignoring Republican malfeasance in that same state; and
g. the US government and large corporations conspire to spy on their own citizens and customers on a wholesale basis, and when after such behavior has been uncovered, make strong-arm attempts to retroactively immunize those culpable.

When all these things happen in a short six years, one must ask - What happened to us and our wonderful country? What comes next? Will broadband Internet help us or hurt us even more?

The cynic in me says that until this trend is stopped, its logical to expect more law-breaking, more spying. And when that is discovered, expect more amnesties, more chipping away at the protections built into the law, more eroding of the law itself. And if the trend continues long enough, expect such behavior to become the norm and expect our government and society to lose all semblance of democratic reality. Down will have become Up, and Up, Down. Truth will be more and more Lies, Lies will be held up as Truth. Welcome to 1984. It didn't come in 36 years, as Orwell predicted, and it may not come until even one hundred years after publication - 2048, only 41 years from now, when my son will be my age. But this future awaits us if we do nothing to stem these trends.

On the bright side, and that's hard to find after writing a post like this - at least it doesn't look like this direction is widely supported. So perhaps there is hope after all. Consider this recent ACLU Poll.

A majority of likely voters in the U.S. oppose giving immunity to telephone companies who sold customer information to the government, according to a survey released Tuesday by the American Civil Liberties Union.

Telephone company advocates in Congress and the Bush administration say that if telephone companies handed over information to the government, or allowed warrantless wiretaps, it was only in response to the nation's emergency needs in the wake of the Sept. 11, 2001, terrorist attacks.

But ACLU's senior legislative counsel Tim Sparapani said money may have been the motivation and most Americans aren't happy.

According to the ACLU survey of 1,000 likely voters, 59% were either opposed or strongly opposed to the idea of giving companies that sold such information to the government civil or criminal immunity, even if that information was used to "investigate terrorism."

About 31% of those surveyed said they supported or strongly supported giving such amnesty, with the remaining percentage of voters saying they were undecided.

Posted on October 25, 2007 at 02:25 PM | Comments (0)

Obama to FCC's Martin: Slow Down and Open Up

Presidential candidate and Illinois Democratic Sen. Barack Obama wants Federal Communications Commission chairman Kevin Martin to take a series of intermediary steps before making the leap to rewrite media-ownership rules, saying that not to do so would be irresponsible.

In a letter to Martin Monday (see below), the senator asked the FCC chairman to "reconsider your proposed timeline, put out any specific change to the rules for public comment and review, move to establish an independent panel on minority and small-business media ownership and complete a proceeding on the responsibilities that broadcasters have to the communities in which they operate."

The letter came in response to the news last week that Martin had come up with a timetable for moving forward on the congressionally and court-mandated rule review, planning to put out his own proposals for media ownership rules Nov. 13, then letting the public comment for four weeks before holding a mid-November vote on the changes. Obama Calls On Martin to Slow Down on Ownership Review

Setting aside for a moment the impossibility of putting out rules on Nov. 13, having public comment for four weeks, then holding a mid-November vote - I'm sure that's a typo - this news item is noteworthy in so much as FCC actions are getting scrutiny from a leading presidential candidate.

Granted, Barack Obama is a sitting US Senator and so it's not as noteworthy for a Senator to address concerns to the head of an executive agency, but one can see how all such issues start to take on more poignancy as the political campaign cranks up.

Fof the nearly seven years of the Bush administration, the FCC has typically seen rulings among the commissioners as a three-vote Republican majority outweighing the challenges of the two-vote Democratic minority. Not so often are challenged FCC rulings and processes detailed in the main stream press.

That all may change as the political campaign heats up in a few months, with this challenge as a harbinger of things to come.

Posted on October 23, 2007 at 10:52 PM | Comments (0)

Getting More Interesting

In the long run it's unclear whether Dodd's hold and filibuster threat, whatever backing it gets from Hillary and Obama, if any, can really hold up the FISA legislation. Advisers to Senate Majority Leader Harry Reid have said that while they're willing to work with Dodd to assuage his concerns, they expect that the bill will go to the floor despite his objections. It's also unclear what the final bill will look like; the bill has only just emerged from markup in the Senate Intel committee, and there's some opposition to telecom immunity among members of the Judiciary Committee.

Either way, opposition from Hillary or Obama, or both, could throw some significant obstacles in the way of the bill. And even putting aside whatever long term impact this has on the legislation itself, such a campaign by MoveOn could at the least make telecom immunity an issue in the Dem Primary.Election Central | Talking Points Memo | MoveOn And Top Bloggers To Launch Campaign Pressuring Hillary And Obama To Back Dodd On FISA

This issue that I discussed at length in a previous post here has the potential to go on and on and on, putting the telecom / government relationship under the microscope (and potentially spilling over into broadband policy?). Stay tuned...

Posted on October 23, 2007 at 09:43 PM | Comments (0)

Where There's Smoke ... Part VI Three New Issues

My last post tried to fill in the gaps on how we got "here." As broadband Internet matures, as cellular voice and data service proliferates, as media services converge, and as new wired and wireless technologies offer new network options and new business models, at least three new issues are focusing the debate when it comes to the new Triple Play approach to networked media (Voice, Video, Internet Access). Here are the topics and some key links to learn more.

Network Neutrality - Wikipedia Reference for a good, fairly balanced overview; Washington Post Jan 2006 Overview; Good Economic Argument; Lawrence Lessig's more libertarian viewpoint; and Law Professor Tim Wu's legal viewpoint

State and National Franchise Fees - New York: Issues in Cable Franchise Fees; New Jersey: October 2005 Municipality Issues Brief; Texas SB 5 Statewide Cable Franchise and subsequent FCC Cable Franchise Order; NATOA 2005 Telecom Cable Franchise Analysis

Spectrum Policy - Field Guide to the Upcoming 700 MHz Spectrum License Auction; 2002 FCC Report on Spectrum Policy; NYCWireless on unlicensed spectrum policy reform; Software Defined Radios (SDR) and Spectrum Policy; NTIA Fact Sheet on Recommendations to Improve Spectrum Management

For a high-level layman's overview of these issues, check out my off-the-cuff summary below.

Network Neutrality

It wasn't long that a new issue arose to sit beside the proposed guarantee for municipalities to own and operate networks. The issue of Net Neutrality reared its head.

Incumbent ISPs had begun to complain that "bandwidth hogs" placed undue burdens on their networks by consuming large amounts of bandwidth from applications like video downloads and uploads and peer-to-peer file sharing. They suggested that network operators should have the right to charge such consumers different rates, but more importantly, they should be able to charge content providers like Google and others different rates to guarantee premium service levels and speedy delivery of their content. Consumer advocates warned that this would violate the spirit of the Internet, which was designed to be a dumb distributer of undifferentiated bits of data, which had until then ensured that all data was treated the same. The issues of Net Neutrality emerged.

- After all, didn't consumers already pay for Internet access in the fees that they paid to their ISPs? Additional fees charged by operators would be "double dipping."
- And what would happen when network operators discriminated by delivering their own content first?
- Or what if only large companies could guarantee delivery of their content by paying those fees to operators - a two-tier Internet would result, where good quality content delivery would be expected from large well-heeled providers like Google, but smaller companies who would not be able to pay a separate fee. Network operators would offer slower service and smaller content companies would watch their market share decline, as consumers showed a preference for the faster but more mainstream content.
- Much of what made the Internet special, its widely diverse and off-beat content offerings, would fade under this scenario, and the Internet would start to resemble the broadcast networks with their limited, mainstream content offers.

In summary then, Proponents of Net Neutrality argued that Net Neutrality legislation was needed to ensure that network operators would not abuse their positions of power and discriminate in how they delivered content. It was needed to preserve the Internet as a neutral distributor of content. Opponents of Net Neutrality argued that Net Neutrality legislation would put undue burdens on network operators, who would face increasing costs but have no offsetting fees or revenue sources to allow them to stay financially healthy.

Statewide and National Franchise Fees

Interested in entering the cable TV market to compete with cable providers in offering lucrative video services, telecommunication companies began to argue against the current system of local municipal franchises, where a large company would have to negotiate separately with hundreds or thousands of city governments for the right to offer TV service in a local market. The costs would be huge.

To offer competition and lower rates for consumers, telecom companies argued, it would make more sense to have franchise fees standardized over entire states, or better still, over the entire nation. This would eliminate a significant barrier to entry and increase competition, opening up closed markets. Cable companies objected that they had had to win all these municipal franchise agreements, and would be bound by a patchwork of agreements and fee structures, while the telecommunication companies enjoyed a new, streamlined system. Most notably in Texas in 2005, the telecommunication companies prevailed with a statewide franchise agreement law.

Spectrum Policy

The FCC regulates who can use which sets of radio wavelengths, how they can use them and where they can use them, in what locations - together, these regulations come under the heading of Spectrum Policy. For the uninitiated, spectrum is a physical trait of electromagnetic radiation. On the low end is sound , this graph below is a great introductory overview.

electromagnetic spectrum.png

More to the point, here below is the multi-colored eye chart of Frequency Allocations of Radio Spectrum produced by the US Department of Commerce, National Telecommunications and Information Administration, Office of Spectrum Management, available for download in a PDF here. As you can see (in your downloaded, blown up version, not in the miniscule eye chart below), unlicensed spectrum bands are in dark green, labeled Amateur Band - look for the Wi Fi spectrum band at 2.4 GHz.

Frequency Allocation Eye Chart.png

One key issue of spectrum policy is how much spectrum to devote to unlicensed use, based on the success enjoyed with Wi Fi equipment, creating a new industry and spurring innovation out of what had been considered "junk band" frequency, the province of baby monitors and microwave ovens. Should the FCC make more such spectrum available, or sell the spectrum licenses like so much valuable real estate, to raise funds for the federal government?

That issue jibes with another issue up for timely discussion in this area: the allocation of the 700-MHz band of spectrum licenses held for the longest time by television broadcasters. As part of the move to digital television, these bandwidth are no longer needed by those broadcasters and so they're being reallocated to new users. This is an attractive band for radio data transmission because the signals are better able to penetrate solid objects and so network designers can use fewer devices to cover more territory - these licenses make for a more efficient wireless broadband network, and more efficiency means lower costs.

There is much speculation on whether this auction of 700 MHz spectrum licenses coming up in early February 2008 will result in one of two potential outcomes: Option A - one of the incumbent players wins the auction and rights to the spectrum, in which case they may set it aside to keep it away from competitors - meaning less competition and maintenance of the status quo. Or, Option B - a new player (like Google or Apple) will spend to gain the licenses and use them to enter into competition with traditional telecom providers - meaning more competition and a challenge to the status quo.

Posted on October 22, 2007 at 11:53 AM | Comments (0)

Where There's Smoke ... Part V Summing it Up

I spent a good part of yesterday connecting a Number of Dots to better understand where we are in the current state of broadband regulation and management in the United States to better see the direction we're heading.

See the dots here and connect them yourself...this is no exhaustive bit of reporting here, just a reflection on a pattern of activity that should be disturbing to anyone who is watching. A preliminary conclusion is that nobody is really in charge; our government is ineffective at best, hopelessly compromised at worst; and we have an industry on autopilot, increasingly consolidating its gains and growing ever stronger.

Part I Open Eyes & Ears Tell a Story, If We Listen and Watch for a rundown on 35 years of telecommunication deregulation that have failed to bring about competition.

Part II One State Example goes into detail on how the large amount of lobbying dollars spent by telecommunication giants AT&T, headquartered in San Antonio, and Verizon give the big telco lobby an overwhelming presence at the State house and in local politics.

Part III FCC Regulatory Relief provides background on the Federal Communication Commission (FCC) and its singular ineffectiveness in building a national broadband infrastructure through its strategy of giving regulatory relief to large cable and telecom interests.

I finished the series with Part IV How Close is Too Close? a long discussion on the current national debate concerning the effort in the US Senate to revise the FISA law, including the potential to grant AT&T and Verizon retroactive immunity from prosecution for violating the law when they opened up their private customer records to the federal government without a warrant.

I realized this morning why these dots when connected cause me such heartburn.

1. The Internet is not like other networks.
2. The Internet ties everything together, providing our society with such compelling efficiencies that over a short period of time we have been drawn to place more and more of our data and daily business operations onto the Web.
3. The Internet has become dramatically more important than any one of the previous networks that the FCC regulated, from telephone to cable to radio stations to handheld ham radios, and its speed of development and adoption dwarfs those other networks and industries.
4. When the dominant network that we depend upon utterly, with access to all of our digital information and private secrets, is operated by a handful of companies in bed with a federal government that plays fast and loose with the laws, has an unprecedented preference for secrecy, and plays the Fear card at will, we are truly staring into George Orwell's 1984 Society as never before...

I was rattled there for a second. The good news is we're not there yet. It's more a general sense of dread of what could be if we continue down this path we're on.

There's more to the story, so let's wind things back and talk some more about a more complete view of the picture.

Way, Way Back

In the old, old days when the 1934 Act was passed, we used the telephone to talk on, AT&T held sway, and we listened to the radio networks for entertainment. The big issues were how to get telephone service out to the rural areas and how to make sure that analog radio signals didn't stomp on each other.

Way Back

Television came along, and decency standards reared their heads. Soon, cable companies built up to provide service where reception was poor. Three national TV broadcast networks served up standard fare to a mass national audience.

A While Back

Cable became more prominent as specialty content networks started offering alternatives to the national broadcast networks. Cable companies negotiated local municipal franchises with local governments, who cut deals to get some public revenue from franchise fees. Generally, one telephone company regulated by a state commission (as well as the FCC) provided service to a community. Cable meant TV and Telephone meant phone calls. Long Distance was regulated by the feds, then deregulated and competitive options sprang up, lowering the costs of calling outside your local area.

Cellular phones began to show up, but they were expensive, so many people just got pagers. In time the capabilities of cell phones began to go up, as prices began to fall.

Telephone companies began to offer high speed data service, but it was very expensive and so only businesses bought lines from the telephone companies. The Baby Bells, recently unbundled from AT&T, talked about a day when they would provide television services over high speed data lines and negotiated rate freezes with regulatory commissions to help finance that vision.

More Recently

Customers could buy dial-up modems that would let them use their phone lines and they could buy service from new companies like AOL or Prodigy to get onto the new Internet and the World Wide Web. It was a novelty to many, speeds were slow, and WWW was ridiculed as meaning "World Wide Wait." But then, Cable companies started offering a new service that provided "always on" Internet at much higher speeds as a premium add on, which came to be known as Broadband. As the curious signed up, they became hooked with a much better service and the Internet boom began to make headlines.

Fairly Recently

Seeing all the revenue that cable companies were getting, telecom companies launched aDSL services, which provided "download" speeds much faster than dial-up, but still slower than cable, and customers could use most of the available capacity to download websites and "surf" the Web. Telecom companies managed their networks and Internet Service Provider (ISP) offers so that "download" was faster, but "upload" speeds were quite slow, because they figured that few people needed to send data that way, mostly e-mails with small file sizes. DSL began to eat into Cable broadband and represent a threat. For the first time, cable and telecom companies were really in competition with each other. But often, that meant that consumers could pick from one of two options, both priced about the same, generally cable broadband was still priced a little more in most markets because it was faster.

On the sidelines, voice over Internet Protocol - VOIP - was being developed and launched. Getting your phone service over your broadband connection was primarily seen as a commercial service, but VOIP startup Vonage raised tremendous capital which it began to spend on TV ads to go after consumer business. Combined with customers who were using their cell phones and dropping their fixed telephone service, telephone companies began to see a drop in their steady Plain Old Telephone Service (POTS), a mainstay of their corporate revenue. A troubling development for a telecom company.

Cable companies saw increasing competition from the two main satellite TV companies, Dish Networks and DirecTV, which made original inroads in rural areas where cable was not avaialble, but then began to sell in urban markets in direct competition with wired cable companies, which had been enjoying steady price increases.

Cellular telephone companies offering very similar services and facing price competition in national markets began to consolidate, even as they enjoyed record subscriber growth based on flat-pricing plans for voice service. They tried to get customers interested in data plans, but customer acceptance remained weak.

How much of this fairly recent private sector competition and market development did the FCC oversee, or contribute to? Not much. One of the principal means of interaction by the FCC was to auction off bands of radio spectrum licenses for vast sums of money, which kept much of the available spectrum licenses in the hands of a small number of well capitalized telecommunication companies. In other words, they limited competition in wireless markets by focusing on spectrum as a primarily a source of revenue for the federal government, rather than a tool to create a diverse market of wireless service providers.

Most Recently

Owning a dominant share of the ever growing broadband market, cable and telecom companies acted in unison to keep municipalities interested in new municipal wireless and FTTH projects out of "their" markets. They supported state legislative initiatives in 2004 and 2005 to ban municipal ownership, and in some cases, to ban even privately provided networks in partnership with municipalities. When most of those measures were defeated, the municipal ownership issue shifted to the Congress, and three other key issues began to focus the debate.

That will be the focus of the next post...

Posted on October 22, 2007 at 10:13 AM | Comments (0)

"OnShoring" and "RuralShoring" - How Broadband "Shores Up "our Economy

So, let's say you're a city leader in a smaller town out in the sticks and you and your colleagues are wondering what to do to stimulate your economy and keep the young people from leaving town in search of greener pastures when they graduate from high school?

See this article, Some firms replace offshoring with onshoring - Los Angeles Times for more details.

This article describes how the sinking dollar and maturing overseas Outsourcing markets are making Rural American towns look more attractive to large companies seeking to lower their operating costs. They're asking themselves, "Why not look closer to home when considering where to locate a sales operation, or a call center" That's a distinct possibility when your town has broadband infrastructure to support a business operation that would depend on being connected - broadband is a prerequisite. Take a look at your current broadband infrastructure.

Time to make a plan?

Does your town have what it takes to bring in new opportunity and keep 'em down on the farm?

Posted on October 22, 2007 at 08:31 AM | Comments (0)

Where There's Smoke ... Part IV How Close is Too Close?

We are on the verge of seeing something we don't see too often: a possible filibuster in the US Senate from a Senator who is also a presidential candidate. Will this conflict actually come to this?

If it does, it should shine a bright light on the role that telecommunications companies play in national security, for the issue at hand is the cooperation that AT&T and Verizon gave to the Bush administration when they released thousands of private phone records of American citizens without the required court orders.

Interestingly, the third telecommunications "giant," Quest, refused to cooperate and turn over customer records. But here is where it gets more interesting...Quest's former CEO Joe Nacchio, not normally a darling of civil rights protectors, has claimed in other court documents in another suit that his company's refusal to cooperate with the feds ultimately led to the loss of lucrative federal contracts in retaliation ....as if there was some sort of quid pro quo at work here? Huh?

Hmmm, this could get more and more interesting, because the stakes are so high, the issue is becoming ever more public, and it may well result in public reporting of issues that normally stay in the background - namely, the back room agreements and operations of telecom giants working with the federal government.

So, let's recap... from the left-leaning and popular blog of attorney Glen Greenwald

Just think about what is really happening here. AT&T's customers sued them for violating their privacy in violation of long-standing federal laws and for violating their Fourth Amendment rights. Even with the most expensive armies of lawyers possible, AT&T and other telecoms are losing in a court of law. The federal judge presiding over the case ruled against them -- ruled that the law is so clear they could not possibly have believed that what they did was legal -- and most observers, having heard the Oral Argument on appeal, predicted that they will lose in the Court of Appeals, too.

So AT&T and other telecoms went to Washington and - led by Bush 41 Attorney General (and now Verizon General Counsel) William Barr, and in cooperation with their former colleague, Mike McConnell - began paying former government officials such as Dan Coats and Jamie Gorelick to convince political officials to whom they give money, such as Jay Rockefeller, to pass a law declaring them the victors in these lawsuits and be relieved of all liability - all based on assertions that a court of law has already rejected. They are literally buying a judicial victory in Congress - just like Carothers warned that third-world countries must avoid if they want to become functioning democracies under the "rule of law" ("Above all, government officials must refrain from interfering with judicial decision-making"). AT&T, other telecoms, buy victory in lawsuits

Here's the "money quote" from Federal Judge Vaughn Walker ruling on Tash Hepting et al, Plaintiffs vs. AT&T Corporation et al, Defendants:

Because the alleged dragnet here encompasses the communications of "all or substantially all of the communications transmitted through [AT&T's] key domestic telecommunications facilities," it cannot reasonably be said that the program as alleged is limited to tracking foreign powers. Accordingly, AT&T's alleged actions here violate the constitutional rights clearly established in Keith. Moreover, because "the very action in question has previously been held unlawful," AT&T cannot seriously contend that a reasonable entity in its position could have believed that the alleged domestic dragnet was legal. Accordingly, the court DENIES AT&T's instant motion to dismiss on the basis of qualified immunity.

Upon learning that a pending bipartisan compromise on the reworked FISA bill that included granting retroactive immunity for telecommunications companies would soon be coming out of the Senate Intelligence Committee, Democratic Senator and presidential candidate Christopher Dodd said he would place a "hold" on the bill to fight the immunity provision. An explanation on "putting a hold on a bill" here.

But there's more - it seems that Senate Majority Leader Harry Reid is not altogether pleased with this development and may not support the "hold" tactic of his colleague and fellow Democrat, which would be a gross violation of Senate protocol and could lead to an effective call of a bluff, having Sen. Dodd actually filibuster the bill if he wants to prevent it from going out to the floor for a vote. Say What? Huh? Holds typically are honored in the Senate regardless of party affiliation, and filibusters are usually the work of the minority party - seems that Down is Up in the Alice in Wonderland world of the Senate.

This kind of crap is a big part of why Congress gets an historically low approval rating of 11%. It's so confusing, and the Democratic Majority Leader Sen. Harry Reid putting his own colleague in jeopardy? I sure don't get it.

But this controversy has led to news items like this, Wired: Democratic Lawmaker Pushing Immunity Is Newly Flush With Telco Cash, where recent political contributions by executives from Verizon and then AT&T to Intelligence Committee Chairman Senator Jay Rockefeller (D-W Va) are detailed, implying a connection. It all is puzzling ....

And then there's these curious comments from Former Quest CEO Nacchio, mentioned above, described in full below...

A former Qwest Communications International executive, appealing a conviction for insider trading, has alleged that the government withdrew opportunities for contracts worth hundreds of millions of dollars after Qwest refused to participate in an unidentified National Security Agency program that the company thought might be illegal.

Former chief executive Joseph P. Nacchio, convicted in April of 19 counts of insider trading, said the NSA approached Qwest more than six months before the Sept. 11, 2001, attacks, according to court documents unsealed in Denver this week.

Details about the alleged NSA program have been redacted from the documents, but Nacchio's lawyer said last year that the NSA had approached the company about participating in a warrantless surveillance program to gather information about Americans' phone records.

In the court filings disclosed this week, Nacchio suggests that Qwest's refusal to take part in that program led the government to cancel a separate, lucrative contract with the NSA in retribution. He is using the allegation to try to show why his stock sale should not have been considered improper.

Nacchio was convicted for selling shares of Qwest stock in early 2001, just before financial problems caused the company's share price to tumble. He has claimed in court papers that he had been optimistic that Qwest would overcome weak sales because of the expected top-secret contract with the government. Nacchio said he was forbidden to mention the specifics during the trial because of secrecy restrictions, but the judge ruled that the issue was irrelevant to the charges against him.

Nacchio's account, which places the NSA proposal at a meeting on Feb. 27, 2001, suggests that the Bush administration was seeking to enlist telecommunications firms in programs without court oversight before the terrorist attacks on New York and the Pentagon. The Sept. 11 attacks have been cited by the government as the main impetus for its warrantless surveillance efforts.

The allegations could affect the debate on Capitol Hill over whether telecoms sued for disclosing customers' phone records and other data to the government after the Sept. 11 attacks should be given legal immunity, even if they did not have court authorization to do so.

Spokesmen for the Justice Department, the NSA, the White House and the director of national intelligence declined to comment, citing the ongoing legal case against Nacchio and the classified nature of the NSA's activities. Federal filings in the appeal have not yet been disclosed.

In May 2006, USA Today reported that the NSA had been secretly collecting the phone-call records of tens of millions of Americans, using data provided by major telecom firms. Qwest, it reported, declined to participate because of fears that the program lacked legal standing.

In a statement released after the story was published, Nacchio attorney Herbert Stern said that in fall 2001, Qwest was approached to give the government access to the private phone records of Qwest customers. At the time, Nacchio was chairman of the president's National Security Telecommunications Advisory Committee.

"Mr. Nacchio made inquiry as to whether a warrant or other legal process had been secured in support of that request," Stern said. "When he learned that no such authority had been granted and that there was a disinclination on the part of the authorities to use any legal process, including the Special Court which had been established to handle such matters, Mr. Nacchio concluded that these requests violated the privacy requirements of the Telecommunications Act."

Stern could not be reached for comment yesterday. Another lawyer for Nacchio, Jeffrey Speiser, declined to comment on whether the call-records program was the program discussed at the February 2001 meeting.

In a May 25, 2007, order, U.S. District Judge Edward W. Nottingham wrote that Nacchio has asserted that "Qwest entered into two classified contracts valued at hundreds of millions of dollars, without a competitive bidding process and that in 2000 and 2001, he participated in discussion with high-ranking [redacted] representatives concerning the possibility of awarding additional contracts of a similar nature." He wrote, "Those discussions led him to believe that [redacted] would award Qwest contracts valued at amounts that would more than offset the negative warnings he was receiving about Qwest's financial prospects."

The newly released court documents say that, on Feb. 27, 2001, Nacchio and James Payne, then Qwest's senior vice president of government systems, met with NSA officials at Fort Meade, expecting to discuss "Groundbreaker," a project to outsource the NSA's non-mission-critical systems.

The men came out of the meeting "with optimism about the prospect for 2001 revenue from NSA," according to an April 9, 2007, court filing by Nacchio's lawyers that was disclosed this week.

But the filing also claims that Nacchio "refused" to participate in some unidentified program or activity because it was possibly illegal and that the NSA later "expressed disappointment" about Qwest's decision.

"Nacchio said it was a legal issue and that they could not do something that their general counsel told them not to do. . . . Nacchio projected that he might do it if they could find a way to do it legally," the filing said.

Mike German, policy counsel for the American Civil Liberties Union, said the documents show "that there is more to this story about the government's relationship with the telecoms than what the administration has admitted to."

Kurt Opsahl, senior staff attorney for the Electronic Frontier Foundation, said: "It's inappropriate for the government to be awarding a contract conditioned upon an agreement to an illegal program. That truly is what's going on here."

The foundation has sued AT&T, charging that it violated privacy laws by cooperating with the government's warrantless surveillance program. Former CEO Says U.S. Punished Phone Firm - washingtonpost.com

Posted on October 21, 2007 at 11:25 PM | Comments (0)

Where There's Smoke ... Part III FCC Regulatory Relief

At the federal regulatory level, it doesn't take long to lose your way unless you are an expert. Not only is there the arcana of administrative case law and politics. Then there's the technical aspects. It takes a special kind of worker to keep track of electromagnetic radiation issues, spectrum propagation, market creation and economics. I'm nodding off even as I type these words, just one paragraph into this post...

Here I'll describe some background on this important federal agency and then detail some recent feedback on their performance in promoting a competitive broadband infrastructure for our nation.

From the 1934 Communications Act of 1934, as amended by the Telecommunications Act of 1996:

For the purpose of regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States, without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nationwide, and world-wide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of the national defense, for the purpose of promoting safety of life and property through the use of wire and radio communication, and for the purpose of securing a more effective execution of this policy by centralizing authority heretofore granted by law to several agencies and by granting additional authority with respect to interstate and foreign commerce in wire and radio communication, there is hereby created a commission to be known as the ''Federal Communications Commission,'' which shall be constituted as hereinafter provided, and which shall execute and enforce the provisions of this Act.

The Federal Communications Commission (FCC) is comprised of five commissioners appointed by the President to five year terms, with a limit of three from any one political party. So you can imagine the politics involved on this board. Thus my recent musings on how frustrating it must be to be in the minority on this particular body (See The Eternal, Infernal Disharmony in Being Half-Pregnant). From the website, here's a description of the seven operating bureaus and how they work.

Bureaus and Offices

The Commission staff is organized by function. There are seven operating Bureaus and ten Staff Offices. The Bureaus' responsibilities include: processing applications for licenses and other filings; analyzing complaints; conducting investigations; developing and implementing regulatory programs; and taking part in hearings. Our Offices provide support services. Even though the Bureaus and Offices have their individual functions, they regularly join forces and share expertise in addressing Commission issues.

1. Consumer & Governmental Affairs Bureau - educates and informs consumers about telecommunications goods and services and engages their input to help guide the work of the Commission. CGB coordinates telecommunications policy efforts with industry and with other governmental agencies - federal, tribal, state and local - in serving the public interest.
2. Enforcement Bureau - enforces the Communications Act, as well as the Commission's rules, orders and authorizations.
3. International Bureau - represents the Commission in satellite and international matters.
4. Media Bureau - regulates AM, FM radio and television broadcast stations, as well as cable television and satellite services.
5. Wireless Telecommunications - oversees cellular and PCS phones, pagers and two-way radios. This Bureau also regulates the use of radio spectrum to fulfill the communications needs of businesses, aircraft and ship operators, and individuals.
6. Public Safety & Homeland Security Bureau - addresses public safety, homeland security, national security, emergency management and preparedness, disaster management, and other related issues.
7. Wireline Competition Bureau - responsible for rules and policies concerning telephone companies that provide interstate, and under certain circumstances intrastate, telecommunications services to the public through the use of wire-based transmission.

The FCC was created in 1934, back in another era of radio and wire line communications and its task has evolved with technology advances. This part of the website has some good general information on the scope of the commission's activities. Consider this:

The FCC was established in 1934 by the Communications Act to assert control over the growing field of communications. In its first year, the FCC regulated a broadcast business which then consisted of 623 radio stations and a telephone industry with 14 million phones. The industry has grown to more than 25,000 TV and radio stations in 2001, and more than 192 million phones in 2000. The percentage of households with more than one phone line increased from 3 percent in 1988 to 29 percent in 1999. Washington Post TechNews, February 2003

Some challenge the need to continue the FCC, while others wish they were more intense in their regulatory function. With a budget of over $300 million and nearly 2000 employees, the question arises of how a regulatory agency continues to grow in size even as the areas they oversee are moving forward into deregulation. See this argument from 2000 for reform of the FCC, published by the Heritage Foundation.

So how does their track record look after all these years?

Well, not so good recently.

They got dinged by a September 2007 GAO Report for being too chummy with those they regulate (See Formal Rulemakings, Informal Rule Breakings: Our Federal Government At Work on Our Behalf).

My key position on their track record must then be this: Even as the FCC is tasked to look out for the public interest, as described in their charter above, the agency continues to relax regulations on telecommunication incumbents in the stated hopes of improving broadband infrastructure, yet in the face of a lack of results, even significant record that relaxation of regulations has not been successful in the past - continuing a pattern of actions that don't produce the intended results is neither rational nor sound policymaking. There must be something else going on...

Most recently, they again voted along party lines to relax regulations on AT&T in hopes of stimulating investment in broadband...they do keep trying.

AT&T's competitors, including Sprint Nextel Corp. and XO Holdings Inc., have vigorously lobbied federal regulators and policy makers to oppose such relief because they said competition would suffer in the broadband market. The FCC, which had until midnight Thursday to make a decision, voted 3-2 for AT&T's petition, which was originally filed July 13, 2006. FCC Chairman Kevin Martin said in a statement that removing "overly burdensome regulations" will enable AT&T to invest and deploy more broadband services. But the agency's two Democrats disagreed with the decision, saying the evidence to grant relief was "altogether underwhelming." They added granting relief could lessen competition in certain areas. MSNBC, Oct 12, 2007: AT&T wins relief from government price caps on high-speed Internet access for rivals

FCC Chairman Kevin Martin makes a claim that regulatory relief will lead to more investment in broadband infrastructure and services, but he cannot cite a past history with AT&T to demonstrate why he places such faith in this plan, nor does he tie any stringent requirements or milestones for deployment as conditions to grant such relief - he takes it on faith that they will do what they say, when history shows the opposite, at least indicating that some amount of skepticism is in order. The only conclusion I can make, you tell me if you differ - there are other motivations at work among the majority on the FCC board that drive such decisions.

Posted on October 21, 2007 at 09:04 PM | Comments (0)

Where There's Smoke ... Part II One State Example

This post continues from my previous post, which laid the groundwork for how our government and telecommunication companies work together. Click here to read that post. Perhaps it will help to look a little closer at one state example - consider then, the situation in my own state, Texas.

State Legislatures and Regulatory Commissions operate in a climate of intense pressure from telecom lobbyists to craft policies, enact laws, and make regulations that more often than not, overwhelmingly favor big telecom.

As you can see from this August 2006 document produced by the group Texans for Public Justice, entitled "Austin's Oldest Profession: Texas Top Lobby Clients and Those Who Service Them," the facts are dramatic. This well prepared document quoted extensively in this post shows how large telecommunications corporations (i.e., ATT, now including SBC, and Verizon) leave no stone unturned and are very thorough in their work, from the local level all the way up to the State Capitol.

It's a pretty clubby atmosphere among lobbyists and legislators and their staffs, as well as among the regulatory community. I spent eight years as an administrative employee of the Texas Senate (Texas Senate Research Center), two years doing regulatory interface work (lobbying) for a large regulated investor-owned electric utility, one legislative session as a registered lobbyist for a telecommunications startup owned by that same electric utility and finally, I worked the hallways during a critical month period at the end of the 2005 session when it looked like they might ban municipally-owned broadband networks, when I represented a manufacturer of wireless equipment.

I can tell you that in each instance, there were terribly long hours spent just waiting around - whether in conference rooms or hallways, there was plenty of time to get to know everyone as we waited for elected officials and state agency officials to meet, both in public meetings and while they were behind closed doors. And while the paid interface folks hang around and wait, they get to know each other. And then there is the official and unofficial time they spend visiting with legislative and regulatory staff and elected and appointed government leaders.

Lobbying is a classic insider's game, a very well paid job for a few, as this report details, and often quite a grind for the rest. It's a sales job where what you sell are ideas, information, and proximity, where everyone watches each other and gossip flies fast and thick. There are lunches and dinners at restaurants where everyone knows everyone else and keeps track of who's meeting with whom. There are endless fund raiser cocktail receptions where staff mingle for the free drinks and buffet and the professionals show up to make an appearance or drop off a check for a client. It's all quite above board much of the time and generally very pleasant, but also a tremendous amount happens behind the scenes, and after a while, it's not at all as glamorous as it might look from the outside looking in. It can also be very intense and frustrating, and very exciting, but also tremendously dull. But year in and year out, folks get to know and respect each other, and from my perspective, I often felt as if on the outside looking in, because there was always a set of lobbyists who had far better connections and access than I did, and I'd put the telecom folks in that group.

It's these connections that come to be valuable over time, that and the institutional knowledge about how things get done. The money goes to these insiders who have access to private conversations, to the golf outings and the lunches and the late night work sessions where bills get written.

Texas Lobbying Goes Up.png

This table and graph above show Texas' Escalating Lobby Spending, (1995-2005). Note the dramatic increase in lobby expenditures over the course of a decade, in just this one state, where the contract amount nearly doubles, with number of contracts and clients up 50% over the ten-year period, while the number of lobbyists stays about the same. Granted, Texas is at the peak, right up there with California for most active lobbying state (see below).

State Lobbying.png

And who is at the top of the heap when it comes to lobbying in Texas? Oil and Gas, Health Care, and Communications. But among individual corporate efforts, AT&T (incl SBC) and Verizon tradtionally come in at or near the top.

Million Dollar Clients.png

Sixteen clients spent more than $1 million apiece by the end of the 2005 legislative session on 517 lobby contracts. As it has done each year for at least a decade, SBC Corp. (now AT&T) flexed Texas' largest lobby muscle, spending up to $7 million on 129 paid contracts. In addition, several dozen SBC employees reported that they lobbied for their employer without compensation. One of these pro bono lobbyists was SBC Senior Vice President John Montford, a former state senator.

SBC now has merged with AT&T, which spent another $1.1 million lobbying in Texas in 2005. Phone giant Verizon also spent more than $2 million. Boasting more lobbyists than Texas has lawmakers, these phone companies sought to deregulate what they can charge for the local phone monopoly that they control across much of the state. At the same time they demanded entry into television markets - without paying the local franchise taxes paid by the cable industry. This gambit floundered in the regular session, partly due to opposition from cable companies and municipal governments (three municipal interests surpassed $1 million in lobby spending). Yet the phone giants pushed their legislation through in one of the special sessions that Governor Rick Perry ostensibly convened in 2005 to tackle Texas' school-funding crisis. Austin's Oldest Profession, II. Lobby Clients, C. Million Dollar Clients

Lucky for my motley consumer interest group back in 2005, the telecom firms decided that passing the statewide franchise issue was far more important to them than banning the right of a municipality to own its own broadband facilities, or else we most likely would have seen the state legislature enact the ban. Despite our best efforts, our passion, our rational approach, not to mention the justice of our cause, there would have been little we could have done to stop this lobbying juggernaut if they had been serious. They're used to getting their way in this environment, even more so than in Washington, DC, where they have relatively less influence, given all that is going on at the national level.

In Texas, every legislator is quite aware that AT&T is headquartered in San Antonio, that they are a top campaign and lobby spender with a history of winning, and that their lobbying prowess is not worth going up against, as there are very real consequences from being on the wrong side of powerful interests. There's just too much to lose from most perspectives, so these guys win more often than not, sometimes even before they begin the fight.

Posted on October 21, 2007 at 08:03 PM

Where's There's Smoke ... Part I Open Eyes & Ears Tell a Story, If We Listen and Watch

There's Fire - Big Telecom and Big Government - A Match Made in Heaven? Hell?

I resist taking on this issue because after years in state government, I just assume that big business spends its money to buy big government influence and it's just the way of the world. Call me cynical. I don't expect the world to change overnight. Part of this acceptance lies in my long-held belief in the system - the press and a measure of public servants and good government types would keep things in check. The system was in harmony and the overall result was on balance good for the public, if weighted more to the side of special interests. Besides, I could do little about it, so I accepted it and went about my business.

Besides, I think going down this path is an endless endeavor with little hope for resolution in the near term - it is, with all due apologies to the more racially sensitive among you, a Tar Baby: a trap that grabs one, and one becomes more entangled the more one struggles. Nevertheless, here I go.

Because I perceive that now there's smoke coming from the kitchen where our laws and policies are being cooked up. And where there's smoke, there must be fire, as the saying goes. The system is out of balance, the pendulum has swung too far, and things are getting out of hand.

When it comes to broadband policy and strategy, I don't think we can even begin to talk about these complex issues as a national community without including in the conversation those same government regulators, lawmakers, and large cable and telecom companies who some consider the Root of All Evil. I'm not one of those types, but I do believe in calling things like I see them. We need to start by bringing all this dirty linen out into the open. I'll try to be dispassionate, so bear with me.

If you're part of the Reality-based community, you don't say "What Smoke?" or "That's just Smog." You don't deny what your eyes see and what your brain tells you.

We must at least acknowledge that we have an underlying problem with our system. Before we can have an Open discussion on our collective broadband future, or even begin to craft solutions and a policy and a strategy that serve all interests, we first have to have Trust. We have to have Truth as the foundation for our discussion and we have to be Inclusive and engage all the parties. We have to be Honest.

Without those foundational elements, we'll continue to talk at cross purposes on the surface, casting blame and pointing fingers, while things stay the same as always in the background and under the surface. That's what I've seen so far, at least.

It's not naive either to state the need for these preliminary conditions for a dialogue. Rather, it's an acknowledgment of the depth of our problems, a statement of reality, to say at some point - and that point has long since arrived:

"As a nation we have to begin to address the climate of political influence in our society and its impact on 1) general principles for governmental regulation and oversight; 2) the relationship between government officials and telecom companies, their points of view, the resolution of issues and the impact on the structure of the industry; and 3) the actions of government officials who regulate and oversee these companies and the decisions they make."

To continue to sweep these issues under the rug while trying to move forward with solutions is to deny reality and live in a fantasy land. It's real, folks, Denial ain't just a river in Egypt, and something can and should be done about it. To begin a discussion on policy without clearing the air first and hauling these issues out into the open is to try to run a marathon while dragging a bag of bricks behind. You can do it, but it's not the recommended way, and it has a predictable outcome. You will fall behind all the other less encumbered runners in the race.

When one doesn't know where to begin, sometimes a place to start is just to jump in and offer impressions that are logical and reflect Truth as one sees it. I'll start with the argument I have heard from the Incumbents who want to keep on working incrementally.

The Argument for Continuing the Status Quo

The message I've heard from Big Telecom (and Cable) companies that currently provide the bulk of broadband services, when speaking to government regulators and lawmakers at all levels, at least remains consistent:

1. "We ask you to take care of our industry issues first, by relaxing regulations and relieving price controls, and we will then invest that extra money in broadband infrastructure and provide the services the nation needs. Trust us. It's the only efficient way that you will get what you want."
2. "Repeat #1 until you no longer agree with us and give us what we ask for."

But the facts don't support such arguments; indeed, regulators and lawmakers have done just what the industry has asked numerous times and we have not got the world-class fiber network they sought, nor competition, nor even robust wireless broadband. Instead, Cable broadband and DSL over existing legacy networks are offered in limited areas at limited speeds and at high enough prices by a handful of companies so that only parts of the nation can access and/or afford broadband that does not compare with world-class standards. Verizon plans Fiber to the Home in limited urban areas over a lengthy deployment schedule, and AT&T plans Fiber to the Curb over an even more tardy schedule.

It doesn't take a lot of digging to figure out this situation - the message is apparent with the barest of research and a modicum of common sense.

The dots are there to connect, if one only looks. This and subsequent posts are anything but an exhaustive reporting of the issues. Rather, consider them a snapshot to make the point that just a preliminary connecting of some dots I've seen over just the past few weeks makes a strong case for the most casual, but logical observer, if not a biased industry insider with a motive to continue the status quo.

The Deregulation of Telecommunications has not led to a Competitive Market, despite or because of efforts of regulators and lawmakers; it has led instead to the consolidation of market power and the entrenchment of a large corporate presence in telecommunications with very strong influence over government at all levels.

Consider Dots Number One-Five. Thirty-five years of effort led to a transfer of power and assets, from government to business.

1972. "It's broken, we need to do something." The US Justice Department files suit against AT&T to address issues of monopoly and changing technology.
1984. "We've reached a compromise - we will break up the monopoly into smaller monopolies and a larger company that we will let into the computer business." The Justice Department finally reaches a settlement with the national telecom monopoly, AT&T aka "Ma Bell." See the Bell System Divestiture Decision.
1996. "We will deregulate the Regional Bell Operating Companies (RBOCs) and bring about competition." See the Telecommunications Act of 1996.
1997. We'll create a fund (broad-based user fee/tax) to ensure that all areas of society have access to telecommunications in the absence of monopoly regulation, to be administered by a select few large companies." See Universal Service Fund.
2005. "We will separate "information services" from "telecommunication services," placing them outside of traditional regulation, and we will let information network owners, both Cable and DSL, close their networks to competitors - deny access." See Pass the Brand X Please.

In successive waves, various state and federal agencies, regulatory bodies, courts, and legislatures have sought to move our nation from a regulated monopoly model to a competitive market model, and at each step, their efforts have been stymied by a commercial industry intent on retaining control and making the most money for its shareholders. Can't blame them, they are playing to win. And all along, watchdogs, critics, and government leaders themselves have voiced misgivings and expressed outrage, to no avail. In the end, like a good movie or story moving from Act One to Act Three, we've ended up about where we've started, with some interesting action along the way.

"It Won't Work, Don't Do It ... Oh, Sh^&*t!"

The Telecommunication Competition and Deregulation Act of 1995 is the worst bill to come along in 60 years. While deregulation of media has been slowly taking place for 20 years, this bill would open a whole new era in monopolistic control of mass media. Al Gore claims that the House and Senate versions of the bill represent a giveaway to America's largest corporations: "Instead of being a commitment to the future, these bills--especially the House bill--represent a contract with a hundred companies. Instead of promoting investment and competition, it promotes mergers and concentration of power."

The bill would allow a single owner to control television stations covering 35 percent of all American homes, plus an unlimited number of radio stations in every community across the nation. It would allow this same owner to purchase newspapers and the cable system in every community, which could result in a single company dominating all news and information available to one-third of the nation. It would allow the Bell Operating Companies to buy into long-distance services before they have real competition--which almost guarantees increased rates. It would let cable and telephone companies buy out each other while removing the power of the states to regulate rates and services; a monopoly would exist in many communities and cable and telephone rates could soar. As Representative John Conyers (D., Mich.), former chairman of the House Government Operations Committee, told his colleagues on the House floor, "For American consumers, this is one big sucker punch." It will "cost our constituents, the consumers, a bundle." 1995: I'm Telling You, It Won't Work

"Whatever It Is You Were Trying To Do, I Don't Think It's Working."

In summary, the very slow implementation of the 1996 Act has resulted in a series of mergers in the telecommunications industry. The intent of the 1996 Act was to promote competition and the public interest. It will be a significant failure of the US political, legal, and regulatory systems if the interests of entrenched monopolists rather than the public interest as expressed by the US Congress dictate the future of the US telecommunications sector. Unfortunately, the lack of progress in the implementation of the 1996 Act during the last two years has been a victory for the incumbent monopolists rather than of the US Congress. If the present trend continues, the intend of the 1996 Act to open all telecommunications markets to competition will not become a reality. 1998: It's Not Working

"Man, Did Anyone See What Just Happened - How Did They Get Away With That?"

It is on the state level where one can find the greatest excesses of the Telecommunications Act. All 50 U.S. states and the District of Columbia contracted with their local telecommunication utilities for the build-out of fiber and hybrid fiber-coax networks intended to bring bidirectional digital video service to millions of homes by the year 2000. The Telecom Act set the mandate but, as it works with phone companies, the details were left to the states. Fifty-one plans were laid and 51 plans failed.

Failure is not foreign to the information technology business. Big development projects fail all the time and I have written several times about this and how those failures come to be and how they can be avoided. But I find it hard to remember any company or industry segment ever going zero for 51. This is a failure rate so amazing that any statistician would question the motives of those even entering such an endeavor. Did they actually expect to succeed? Or did they actually expect to fail? We may never know and it probably doesn't even matter, but one thing is sure: they expected to be paid and they were.

Over the decade from 1994-2004 the major telephone companies profited from higher phone rates paid by all of us, accelerated depreciation on their networks, and direct tax credits an average of $2,000 per subscriber for which the companies delivered precisely nothing in terms of service to customers. That's $200 billion with nothing to be shown for it.

In a Federal Communications Commission (FCC) report from 1994 there were requests from U.S. telephone companies to provide video dial-tone service at unprecedented levels. Bell Atlantic (now part of Verizon) wanted to install service to 3.5 million homes in its service area. Nynex (now also a part of Verizon) requested permission to install service to 400,000 homes. Pacific Bell (now part of AT&T) wanted to install service to 1.3 million homes. Ameritech (now part of AT&T) wanted to install service to 1.2 million homes. GTE (now part of Verizon) wanted to install service to 1.1 million homes.

Note that these applications were all prior to the Telecommunications Act of 1996 being passed, so they were covered under the prior 1934 Act. And by 1995 most of these applications had been withdrawn by the telephone companies, though the FCC oddly continued to act as though the applications were still valid. 2007: Not Only Did It Not Work, We Got Taken to the Cleaners

Over and over again, large telecommunication and media network (cable) companies ask for relief, they bargain with the government, they strike deals, and then they do it all over again, devoid of consequences. Lather, Rinse, Repeat.

And so here we are as 2007 winds down, nearly back to where we were in 1972, except that now the infrastructure that was viewed as a national treasure paid for by ratepayers by way of a regulated monopoly is now viewed as a sunk cost network asset owned by a set of private companies who can use it as they see fit, charge for it as they see fit, use it to thwart competition, and yet, still count on various tools of government support, whether it be funds or market protection, when they ask for it. And, we are no closer to having a national wired and wireless network to support high-speed data at state-of-the-art levels, with universal access and universal service pricing.

Some deal. "You're doing a heckuva job, Brownie."

Posted on October 21, 2007 at 02:07 PM | Comments (0)

Everything You Always Wanted to Know About Web 2.0, But Were Afraid to Ask

For the unitiated, this is a great resource of websites on the relatively new phenomenon of Web 2.0. This is interesting because it shows not only how Google is starting to make available a whole new array of tools to turn the Web into the new Desktop (supplanting functions you normally perform on your desktop with web applications), but also shows in a slide deck a variety of resources to let the viewer learn more about how Web 2.0 brings a different Internet experience to the user.

Here; then, without further ado, is a web presentation of slides on Web 2.0 resources, using the Google Docs platform to present the slides to a Web Audience. To get an eyeful, click on this Google Docs Compilation on Web 2.0 link and once at the Google Docs site, click on the link titled "View published presentation in a new window."

You may need to register as a User on Google Docs to get the link to function.

Happy hunting!

Posted on October 20, 2007 at 05:13 PM | Comments (0)

Worldwide Wi Fi Use Way Up - WOW!

All along, the long-term future of Wi Fi has depended on widespread market acceptance of the standard to drive lower production cost of equipment. That's the way that industry standards work.

It's one thing to see the client costs of Wi Fi come down, to see Wi Fi chips become embedded not only in laptops, but also in dual use cell phones, hand-held game devices, and who knows what else.

It's another thing altogether to see the next leap in advancement of the system. We've long predicted that widespread adoption of Wi Fi client devices would stimulate more widespread deployment of Wi Fi networks in the enterprise and in metropolitan area networks (MANs).

Now we see evidence of just such market penetration.

Not only is the worldwide adoption of Wi-Fi accelerating, the pace of acceptance is growing even faster than experts had anticipated. At least part of the overall growth can be attributed to rapid acceptance in international markets.

While analysts have been looking for the Wi-Fi market to expand, the rate of growth has exceeded expectations. "What surprised me the most was not just that it is growing, but the way it is growing," said Rick Bilodeau, senior director of marketing at iPass.

A global roaming service, iPass forms relationships with Internet Service Providers (ISPs) around the world, allowing travelers to gain Internet access in far-reaching locations. Bilodeau draws his observations from iPass' most recent Wi-Fi Hotspot Index, a semiannual study that summarizes data collected from across iPass' 100,000 users. It looks at more that 80,000 hot spots in over 85 countries.

The latest index covers the first half of 2007. The index show a rapidly accelerating growth rate, with the number of sessions up 68 percent in the first half of 2007, as compared to 44 percent growth in the previous half. Worldwide Wi-Fi Use Is Growing

It's encouraging when one sees events in the real world confirming academic predictions in the lab. The thought is that the more volume of client Wi Fi chips, the lower the price and the greater the temptation of consumer device manufacturers to "wire" their devices for broadband communication with Wi Fi chips. But where will the devices be used?

First, in enterprises, and we see that with this article. Second, in larger metropolitan broadband deployments, which they allude to at the conclusion of the article.

While the iPass index does not quantify enterprise growth, Bilodeau suggested that continued expansion in that sector should soon begin to generate a visible impact in the overall Wi-Fi marketplace. "We are hitting that tipping point where enterprises are taking Wi-Fi seriously and considering it as a serious means of access, and not just an end-user gimmick," he said.

Part of the recent growth also can be explained by a rapid escalation in the international markets.

While many countries got off to a slower start than the U.S. in terms of Wi-Fi deployment, the tide is turning. In Europe for example, Wi-Fi usage almost doubled as compared to the previous half, while North American usage increased by a comparatively sluggish - though still explosive - 57 percent in the first half of 2007.

But we have a long way to go with Wi Fi. Culture lags technology, and many users have become quite attached to their cellular handsets, despite the slower data throughput available from those networks.

Still, the drop-off is steep as one moves down the list of top Wi-Fi nations. The U.S. clocks in at just over one million sessions, or single user log-in events, followed by the U.K. at 260,000 sessions. Yet the Netherlands, which ranks number five on the list of Top Ten nations, records just under 61,000 sessions.

The only Asian nation to make the Top Ten list by usage was Japan, which hardly comes as a surprise, Bilodeau said. "There is more of a culture [in Asia] around the hand held mobile data service model. When people think of wireless data they think of that first, which is why we aren't seeing as much of the traction as we are seeing in other regions," he said, adding that the ease and low cost of Wi-Fi rollouts could soon begin to drive higher adoption rates in that part of the world.

But there's more to the story - these statistics are rich! As they become used to the technology, they spend more time using it. I experienced the same thing with Wi Fi - it takes time to get used to a new way of using the Internet while away from the home or office.

The real story comes through in the length of these sessions: The typical cafe user logged in for 61 minutes, up 22 percent from the previous half; restaurant users chomped and surfed for 44 minutes, up 122 percent; train stations, averaged 27 minutes per user, up 139 percent; and office services (Kinko's et al) scored just over an hour, up two percent.

That all adds up, Bilodeau said. "The amount of time someone is going to spend in a given venue makes sense. An airport [session] is 40 minutes. So how long are you going to spend between flights? Forty minutes sounds about right."

But so far, most of this article talks about Wi Fi client devices and Hot Spots. What about Wi Fi Zones and MetroNets?

Notably absent from the iPass study are municipal and metropolitan Wi-Fi deployments. That's because there aren't enough to count, Bilodeau said. "The telling fact is that there aren't a lot of them in the world right now," he said. "The big ones we have been hoping for in Philadelphia and San Francisco and other cities just haven't come through yet."

While municipal rollouts in particular have been struggling, Bilodeau said the situation could turn around fast, because of the very nature of such deployments. Due to the large number of people living in large municipalities, "it doesn't take a lot of muni usage to get you into the top five," he said. Just a few deployments could bring in a large number of users.

This confirms what we have been saying all along. The more deployments are out there, the more opportunities there are for the masses to start using their Wi Fi devices in new ways in new places. And that takes time, and it takes MANs. We need networks to be deployed so that people will use them. This is an iterative process, where more use will stimulate more feedback, which will drive more deployments.

I hope that private and public sector community leaders start to figure out that they can capture much of the excitement of Wi Fi by deploying a Hot Zone, at much lower cost and risk than a city-wide network.

We'll see, I guess. Time will tell.

Posted on October 20, 2007 at 04:46 PM | Comments (0)

Conservatives and Innovators - Wrestling for the Remote

As I concluded my last post, talking about change on a global and geological scale, I suggested that the problem (and the solution) lies in our very large brains. They got us into this mess, and they'll have to get us out of it. This is not a new story, witness this introduction to a long speech given by Ralph Waldo Emerson to some young men four to five generations ago (about 166 years ago).

The two parties which divide the state, the party of Conservatism and that of Innovation, are very old, and have disputed the possession of the world ever since it was made. This quarrel is the subject of civil history. The conservative party established the reverend hierarchies and monarchies of the most ancient world. The battle of patrician and plebeian, of parent state and colony, of old usage and accommodation to new facts, of the rich and the poor, reappears in all countries and times. The war rages not only in battle-fields, in national councils, and ecclesiastical synods, but agitates every man's bosom with opposing advantages every hour. On rolls the old world meantime, and now one, now the other gets the day, and still the fight renews itself as if for the first time, under new names and hot personalities.

Such an irreconcilable antagonism, of course, must have a correspondent depth of seat in the human constitution. It is the opposition of Past and Future, of Memory and Hope, of the Understanding and the Reason. It is the primal antagonism, the appearance in trifles of the two poles of nature. Ralph Waldo Emerson, A Lecture delivered at the Masonic Temple, Boston, December 9, 1841

To understand the context of Broadband and the public debate we're involved in, it's helpful to put the nature of change under the microscope. Because that is what is at hand - a changing of the guard in how we look at telecommunications. There are powerful forces at work in our society today, ancient forces that pit those who revere the past, who would hold fast to what we have and build on it carefully, and those who embrace the future, who would shed the constraints that bind them and race to achieve the visions that inspire them.

Ralph Waldo Emerson, a very wise man, laid out his thoughts on change and innovation in this fascinating lecture, one I recommend highly. This is also a great example of the Internet at work - I never, ever would have found something like this without Google - it is pure serendipity, but it gave me tremendous perspective to read his thoughts and discover that even then, managing the pace of change was at the top of mind in political discourse. Of course, Emerson's world was dramatically different in the days before the US Civil War, which seemed to move at a snail's pace compared to life in the 21st century.

One thing we do have in common with those young men of old is that all generations face this great divide. Hope for the Future is the realm of the Young, who have their entire lives stretching out before them and can easily imagine the impossible, much less the improbable. Not so for those of the more practical older generation, who have been beaten down by life, have gained their scars, had tremendous success, but also survived disasters and learned the limits of their powers. All those things that come under the heading of "Wisdom."

More for them to Embrace the Lessons of the Past and hold on to what is important in society, controlling it for all of our benefit (but especially so for their own benefit), because "Who better than they themselves to guide the future to a safe landing for their younger and more foolhardy colleagues, who just cannot understand the risks at hand?"

At its heart, some of the problems we face are generational, as leaders from an older generation hold the reins of power in large government and business institutions, where policy on Change and Innovation must take root, yet those same individuals are not up to speed on all the complexities that require their policy decisions, they see more risk based on their inexperience with these changes and the amount of complexity they face, and they have conflicts of interest based on all the relationships they hold and responsibilities they carry.

For a more recent view of Innovation and Change, see another source of wisdom, the Economist Magazine, which came to me courtesy of the US Postal Service the same day I stumbled upon the Emerson lecture. What a contrast, and yet so many common themes.

Some people reckon that, as the nature of innovation changes, so it is speeding up. But that's not obvious. Other periods have seen bursts of dramatic technological progress: the arrival of the telegraph, for instance, was just as disruptive as the internet is today.

Visit Wal-Mart's headquarters in Bentonville, Arkansas, and you will be greeted by a large plaque in the lobby which says: "Incrementalism is innovation's worst enemy! We don't want continuous improvement, we want radical change.” These are the words of Sam Walton, the firm's founder. And to his credit, Walton did radically change the general store with his innovative approach to low cost, high-volume supermarket retailing. But ask Linda Dillman, a senior official at the firm, about innovation at Wal-Mart today and she concedes that radical thinking was easier when the firm was young. Meg Whitman, eBay's boss, says the same. She concentrates on incremental improvement within the online auctioneer while looking outside to acquire radical ideas by buying start-up companies, including ones in other markets that imitate eBay.

Many executives feel the heat is on and that they must innovate faster just to stand still. One reason is that product cycles are undeniably getting shorter. Gil Cloyd, chief technology officer at Procter & Gamble (P&G), the world's biggest consumer-products firm, studied the life cycle of consumer goods in America from 1992 to 2002 (before the internet's full impact was felt) and found that it had fallen by half. That, he concludes, means his firm now needs to innovate twice as fast. The Economist, October 11, 2007. Revving Up: How globalization and Information technology are spurring faster innovation.

When it comes to broadband, we face an innovation that leads to ever more innovation, compounding the problem by putting the disruptions of the Internet into the hands of the masses. Thus empowered, these masses have wrought dramatic change in just over a decade and can be expected to bring about untold more disruption over time. Pandora has Left the Building!

The Economist has an entire 14-page section devoted to Innovation - I urge you to check it out, and I'll no doubt write further on my thoughts as well.

Posted on October 19, 2007 at 06:38 PM | Comments (0)

Rock of Ages v. Water of Life

What's more important, Land or Water? Is it more important to have a firm foundation, the rock you stand on, or to have life-sustaining water? That makes about as much sense as asking, "Is preserving the Past or embracing the Future more important?" The smart person resists questions like these that set up false choices. They're both important, of course, in their own ways. I'm trying to come to grips with the issue of change and innovation, and it seems how we approach this issue has a lot to do with where we fall on the Conserve the Past - Embrace the Future continuum. It doesn't have to be either or, there is a blend possible - indeed, some blend of the two is the optimal way to manage change and innovation - the key is to develop a good filter that knows when to shed the nonessentials of the past that have become outdated, as well as when to adopt the innovation of the future whose time has come. Nature has this figured out.

More and more, I find inspiration in looking at Nature with a capital N, to better understand human nature and how we live in today's world. Nature is the best example I can think of of a sustainable complex system, so when in doubt, it doesn't hurt to take a look at how things work out in Nature. Nature has much to teach us about change and innovation in particular; and what we see when we look is that like waves on the shore, change and innovation keep on coming, whether the sand on the beach acknowledges it or not. And the Earth abides.

A few weeks back, I recorded on my DVR a fascinating two-hour show on the History Channel, How the Earth Was Made. The story was compelling and the graphics amazing, as the show introduced me to terms like "Deep Time" and walked me through 4.5 Billion years of the Earth's history. I'd never been all that interested in geology, but it turns out that studying rocks has taught us some amazing things. This show not only opened my eyes to geology facts on which I was completely ignorant, but also helped me to put some issues in perspective, leading me to the long list below of key events of innovation and change. This geological walk down memory lane lays the foundation to understand where we are today, with change and innovation a constant theme, and shows how recent man's walk on the planet really is.

There are two compelling forces that have shaped our planet, which align closely with the forces that shape society, Conservatism and Innovation: Plate Tectonics - where lava from below ground emerges onto the Earth's surface to create and move continents and mountains, and Erosion - where water works on the rocks to wear them down and change them. Thus, the Yin and Yang theme plays out in geology, as the fixed object and the force that acts on it are in constant play throughout eternity in the universe, just as they are in our daily lives.

How did we get here? Through this back and forth and disruptive change, the past changed into the present, always leading to the future. We see in this list of innovations and change the forces these two factors play to drive progress in a complex system. We see how our present today becomes tomorrow's past, sometimes sooner than we'd like it to. We see an accelerating cycle of change, fostered by technology and a maturing global ecosystem.

4.5 Billion years ago - The origin of the Earth, as gases came together to form the planet, saw the natural force of gravity working to create form out of chaos, pulling in first gases, then asteroids sailing along on their merry way, ultimately creating a cauldron of nuclear activity at the core of the planet, giving us a molten rock covered with a dark crust, spewing CO2. Ice in the meteors melted to give us water, which turned to steam and rained down on the planet, creating red-tinged oceans filled with iron.

3 Billion years ago - With the origin of life on the planet bacteria began to cover the earth, first in the water, where the oxygen they produced settled out the iron in the oceans, turning both water and air blue. Then the impact of oxygenation created our modern atmosphere that gave protection from the ultraviolet rays that had previously prevented life from moving out of the ocean - "Ding ... you are now free to roam about the planet"

about 100 Million years ago - The age of dinosaurs, which enjoyed a long reign in a land of plenty, until a huge meteor trashed their planet, kicking up dust that blocked the sun and killed off their food - thus, they gave their lives so that we could have gas stations and cars, 100 million years later.

a few million years ago - The emergence of Homo Erectus, who learned to walk upright, spread out over the planet, and began to use tools in innovative fashion, giving Early Man a great advantage over the other animals.

about 10,000 years ago - The first city , a mark of civilization, fostered the development of spoken then written language. This rise of human culture began to make better use of our huge brains and the innovation of gathering in a city was copied by others until it became a common trait of civilization (see The City : A Global History by Joel Kotkin).

about 4,000 years ago - Father of three major religions, Abraham's innovation of monotheism proved highly innovative and disruptive to the world.

about 2,000 years ago - The rise of Christianity brought the disruptive innovations of Forgiveness and Love, and Open Source Religion to its parent, Judaism, ultimately impacting Rome and the entire world.

about 550 years ago - The movable type printing press took information to the masses, disrupting the power equation among the ruling clergy and royalty.

about 370 years ago - Alhacen, Bacon and Descartes devise a scientific method that rapidly accelerates the development and diffusion of scientific knowledge, propelling the West to dramatic advances in technology

231 years ago - Thomas Jefferson et al sign the US Declaration of Independence, launching a country that has proved to be a radical innovative disruption to the status quo of the ancient custom of hegemonic royalty and royal families, giving the masses a political voice in their future (the jury is out on how long this will last, as we appear to be backsliding of late!)

160 - 110 years ago - The invention of the telegraph - 1844 (Western Union), the telephone - 1876 (AT&T), the incandescent light bulb - 1880 (General Electric), the electric motor and polyphase power transmission system - 1888 (Westinghouse) and wireless radio - 1900, introduced a wave of disruptive innovations through science and technology to usher in the Modern Era and let us all communicate in ever more efficient fashion - "Can you hear me now?"

about 40 years ago - The semiconductor gives birth to the computing revolution, which began with data processing and moved on to take over more and more of our lives, like The Blob in that old Steve McQueen movie.

about 30 years ago - IP and TCP take hold as standard protocols with DARPA, laying the foundation for worldwide connectivity and the explosion of the Internet

about 20 years ago - Dial-up Internet Service Providers (ISPs like Prodigy, Compuserv, and AOL) gain traction offering a new data service: Internet access over telephone lines, a service so new it was hard to see at the time just which companies it would disrupt.

about 10 years ago - Cable companies offer high-speed internet access or "always-on broadband" at 30 times the speed of the fastest dial-up Internet connections, as a premium service.

about five years ago - Major telecom companies start to eat into the cable companies dominant broadband market position with DSL, and broadband takes off in popularity

about three years ago - Internet Search pioneer Google issues its IPO and enjoys an initial market capitalization of $23 Billion, defining the Internet as a disruptive force to reckon with (current market cap is over $200 Billion)

about two years ago - Rupert Murdoch's News Corporation bought two-year old web startup My Space for nearly $600 Million, a year later they signed their 100 millionth member, and just this year passed 200 million on-line members.

about one year ago - Google acquired two-year old web startup YouTube for $1.65 Billion in Google stock and less than nine months later, in June 2007, YouTube related traffic comprised 10% of all Internet traffic.

about two months ago - EarthLink announced its withdrawal from new municipal wireless markets leading to a refocusing of the new Municipal Wireless market

I could go on and on - this is fun - but you get the point, life and time have always been about change, always marked by some disruptive innovation that replaces the old tried and true with the new and better. One could easily graph out a similar acceleration of change in a timeline covering other events. We just live in an ever faster world.

In today's world of technology, such change and innovation is often billed as cheaper and quicker, but better? Ah, there's the rub. Because so much change has happened over the past generation, and so much more is to come, our kids' world is vastly different from our own, and they have an entirely different perspective than we do. Just as our grandparents looked at things differently than we do, so do we look at things differently than our kids do. One of the challenges we face today as a society is the very pace of change, which compresses this challenge ever tighter and makes more complex the issues society deals with as it moves through time. We lack the tools to really deal with these issues and the pace of change. Change and Innovation loom ever larger, the stakes ever higher.

When humans came along with their big brains, they just accelerated the ancient process of change and innovation. Today, the pace gets ever faster, but we still face the same challenge - how to accommodate change and innovation and balance the costs and benefits, if the stakes have grown that much higher.

It behooves us first to acknowledge that we have a problem - the first of the 12 Steps: "1. We admitted we were powerless over disruptive innovative change - that our lives had become unmanageable."

Having our eyes open to what faces us, we must then seek to understand as a society this force that drives us and acts on us, in order to deal with it more consciously than we do now. We need a plan!!

Posted on October 19, 2007 at 06:10 PM | Comments (0)

In a Pinch, Why Not Let Rock, Paper, Scissors Decide?

Lisa: Look, there's only one way to settle this. Rock-paper-scissors.
Lisa's brain: Poor predictable Bart. Always takes `rock'.
Bart's brain: Good ol' `rock'. Nuthin' beats that!
Bart: Rock!
Lisa: Paper.
Bart: D'oh!
The Simpsons Episode - The Front

As you know, the dilemma of how we'll manage to get the broadband infrastructure we need is one of the driving themes that inspires this blog. The challenge we all face is how to move our society to respond to change that many don't even recognize, and that many others see, but resist and deny. Finding a way to deal effectively with change and innovation is one of the key issues facing Americans, and to some extent, all of humanity. When it comes to my country and broadband, however, it sometimes feels like my Government is Bart Simpson and regulated industries play the role of Lisa, always at least one step ahead of the regulators. 'D'oh!"

Just how wise do our regulators turn out to be, anyway? Might we not all be better off if all government decisions were made the way that Bart and Lisa settle disputes (assuming that the government didn't always choose Rock the way that Bart does)? Who wins in this game is mostly up to luck - it's a game of chance, with a little bit of psychology thrown in. So, you play it over and over, for fun. Kills time, at least, but mostly, it's just a fun child's game.

But on reflection, it does show us in rapid cycles that winning is relative and transitory: being a winner not only depends on one's perspective, but also the environment one is in and how the competition acts. Because the future can be such a game of chance, it's become a matter of faith among conservatives especially, but more generally in free-market economies, that the market does better than the government in managing future outcomes and assigning resources. Trying to control the future and pick winners and losers is even foolish when that practice neglects to recognize the bigger picture and the limits we live with. We all win some, we all lose some. So it goes.

This childhood game I played on long car trips - remember back before there were iPods, satellite radio, and in-car DVD players? - holds lessons for us as we look at what's happening in our society and economy with regard to telecommunications and broadband. Too much focus on taking sides and winning and losing, too little focus on the bigger picture, where we can all lose the longer we delay finding consensus, making long-term plans, accepting change and preparing for it. (Are you listening, FCC and Congress?) A delay in acting to change or devise a policy - continuing the status quo, in other words - is in fact a choice for market direction, made passively.

But living in time puts us in the position of having to deal with change and innovation as facts of life. Innovation can bring about dramatic change, game-altering change, which is hard to ignore. We're acted upon by our environment and we're stuck with this conundrum of honoring the Past while taking advantage of the Future. We can ignore it or deny it, even defy it, but there it is, nonetheless.

If we're but actors on a stage then, at least shouldn't we try to understand the play and learn from the script we've been given? Where does the answer lie? I believe it's a law of nature that there are no winners or losers in the long run, there is no permanence lent to the dominant player at any one time. only a delay of the inevitable. A dominant player that preserves the status quo beyond its time will face a comeuppance at some point. Do mild CAFE standards help or hurt Detroit? When the Michigan Congressman argues for low to no mileage standards for his auto making constituents, he's protecting them from market realities and depriving them of the opportunity to get tougher, just like I would do if I did my kid's homework. My son would appreciate it, and would enjoy watching the football game on TV instead of studying, that is, until he had to take a test and flunked. Protecting others from Reality is not always a favor.

And while it may be a political maxim that power goes to those who manage to hold it and fight to keep it, it can also be argued that holding on to power as a means to an end is a short-term strategy, and that too much fight to hold on to power can end up costing everyone, even the one who "wins" short-term. Our own political history, from our forefathers onward, shows us that the wise move of the powerful is to accept change with eyes wide open, accommodate innovation where possible, and when necessary, cede power gracefully. Have we learned nothing from our past? Gradual political transition allows a society to adapt. Fostering innovation is good for everyone. Keeping old powers in charge for too long leads to stagnation.

We all have our days in the sun, and though they fade as the younger generation comes along with a new perspective, inevitably many will seek to keep a good thing going, if so allowed. As always, the wise answer on what to do in the face of dramatic change lies somewhere in the middle of all the changes swirling about us. The best accommodation of change and innovation is to find a way to marry the wisdom of the old ways with the genius of innovation and the new wonders it brings us - "I'll take both." That's easier said than done, certainly. Not all new ideas are good ideas, after all. Both conservatism and innovation have a role to play in progress, it seems, and both deserve to be heard and respected. It has ever been so.

Posted on October 19, 2007 at 04:22 PM | Comments (0)

Willful Ignorance Serves Its Purposes

In the Age of the Internet, how come good ideas don't circulate faster? Why do societies continue on for years with what they know are substandard practices, when measured against a global standard? As complex as problems seem, why don't we more readily adapt solutions from outside our traditional spheres?

A creative solution to a thorny problem arises in one country, yet even today, it remains infrequent that it gets copied and applied in another country. An article at the bottom of this post from 30 years ago blames the lack of comparative journalism - it's a failure of the press to do their jobs, in other words. I think it's that, but also, I think it's the nature of those in power in societies to preserve the status quo when it serves them, despite the loss to society.

It's no secret that we talk here on this site and countless others about the stellar status of broadband in other countries, for example, as we ponder the declining state of broadband infrastructure here in the US. Why then is there so little interest among our leaders in adopting winning approaches from abroad here at home? Were we so motivated, we could send a high level delegation around the world and gather information in a Best Practices Tour. But we're not so motivated. The FCC has handed off the reins of power to those it regulates, and they are quite content with things the way they are.

But why do we tolerate this, as a society? Don't we deserve the best of the best? Isn't that something of a tradition here in the States? The fact is, many in the US are parochial and xenophobic, content in the delusion that we have it better than those poor saps abroad. This is a myth that gets maintained in the media, as part of our culture. Societally, it's America Uber Alles. It's true in many areas, but not at all the case in many others. But if you haven't traveled much, it's not hard to remain content in that delusion that we lead the world in all things. It's what you want to believe, so you do.

Health Care is another good example, as is Energy Independence, and Climate Control. So, why do we lament that our system declines and yet we wring our hands and stand back and watch it get worse and worse? It's because parts of our society (not just Telecom & Cable, but also Insurance, Pharmaceutical, Oil & Gas, Coal, Big Business) benefit from the Status Quo and they see these problems differently than does society at large. It's quite rational, I think. They look at things and see them going just about as planned.

This type of asocial behavior by the largest corporations should at least give us pause to consider, but it's gone on so long that we often feel disempowered to effect change at the grassroots. But that is the promise of the upcoming political season. We can cross our fingers and hope, at least.

From the outside looking in, you'd think we prefer our substandard solutions, proud as we are that they're home-grown. That's part of it, but that's not all. Our feelings of being unique may lead us to say "They may be shitty solutions, but they're our shitty solutions, made right here in America!" But that doesn't answer the question sufficiently. That's too simple, too easy, and too snarky. Not altogether helpful, actually.

But I think we know the answers to these questions, we just don't talk often about it out loud, I guess because it just gets so frustrating, and we're all a little intimidated by such raw use of power. I don't know, I'm nursing this hypothesis that we have a mass public that is willfully ignorant because it serves the purposes of those in charge.

We don't change our current business practices here in the US even when we have good solutions at hand elsewhere around the globe that offer improvement because powerful interests benefit from the Status Quo. They actively work to prevent not only any full airing of issues that could accelerate change and threaten their leadership status, but also any threatening legislative or regulatory changes. It's just good business to manage change and doing so becomes what we now call "good politics."

That's where the media come in, if they cared, where their muckraking role is to highlight such situations, shining a light on other spots on the globe where people have more effectively dealt with problems. But the press has become part of the same problem. The mainstream media has grown too large, and it too has bought into the status quo concept, and reporters have become too unimaginative to dig around. It's sad to see such decline in the mainstream media, who have more tools than ever at their disposal to effect change and shine a light on such disparities.

I know that sounds paranoid, and honest, I don't regularly see conspiracies behind every bush and rock. But, this time, it's true. The media has become much more like large commercial interests, moving slowly so as not to disrupt the good thing they have. The very corporations they would expose are the ones who have ready cash to spend on advertising in their arenas, so it would not be in their self interest to dig too deeply to expose issues.

So at the bottom of this long post I've put a clip I found from over 30 years ago, decrying the poor state of media, where reporters let good solutions abroad go undiscovered here at home. I agree, it's a head scratcher...See this great site where I found this clip, for muckraking and trouble-causing, Neiman Watchdog: Questions the press should ask - it's the site of the Neiman Foundation for Journalism at Harvard University.

If we were to use this article as a guide, we'd have to conclude that the media has not improved a lot over the past several decades, Comparative Journalism remains in the toilet. But bashing the main stream media these days is about as sporting as shooting fish in a barrel, so let's save that for another column. The bottom line is that clearly, with the Internet in place, a lack of reporting these days is not for lack of knowing, but lack of caring.

Just look what I turned up in a couple of hours of digging using The Google. Put yourselves in the shoes of the CEO and you tell me what you would choose to do when faced with a better situation elsewhere. If you were CEO, would you: a) 'keep on keepin' on..." or b) embrace change with due haste!

So, let's say you're the executive at this company (results from Feb 2007) - We'll call this first one Company A.

Market Value $229.6 Billion
Profitability 10.1% (that's AVERAGE net profit over the past three years)
Sales Growth Rate = 15.0%
12-Month Sales = $63.1 Billion
12-Month Net Income = $7.4 Billion
Total Return Past 12 Months = 39.2%
Total Return Past 36 Months = 77.3%

I'm saying from where I'm sitting reporting to my Board of Directors - "It Ain't Broke, so Why Fix It."

Here's Company B.

Market Value $108.9 Billion
Profitability 13.5% (that's AVERAGE net profit over the past three years)
Sales Growth Rate = 8.1%
12-Month Sales = $88.1 Billion
12-Month Net Income = $5.5 Billion
Total Return Past 12 Months = 20.5%
Total Return Past 36 Months = 15.9%

Here's Company C.

Market Value $70.78 Billion
Profitability (EBITDA) = 27.2%
Sales Growth Rate = ?
12-Month Sales = $45.79 Billion
12-Month Net Income = $12.44 Billion

And Company D.

Market Value $74.21 Billion
Profitability (EBITDA) = 37.9%
Sales Growth Rate = ?
12-Month Sales = $28.56 Billion
12-Month Net Income = $10.81 Billion

These corporations are doing what they were formed to do - make money for their stockholders. I bet these companies are just dying to monkey with the Status Quo and bring in more competition. (note Heavy Dripping Irony here). Fact is, they're at the top of the heap, these days are the Good Times, and these four companies already control more than half of one industry that is just a part of their much broader communication and entertainment industries.

Companies A-D above are the leaders in the ISP business in the United States (see below).

Top ISPs 2007.png

ISP-Planet.com - Top 21 U.S. ISPs by Subscriber: Q2 2007

Company A is AT&T, B is Verizon, C is Time Warner (owns AOL and Road Runner), and D is ComCast. Together, these four companies alone control 56.5% of the ISP business in the US and they are largely unregulated these days, especially when it comes to broadband services.

Now I admit, this is a very unscientific, off-the-cuff analysis - this is no well-researched report by some professional journalist.

But consider the pull of the Status Quo as a Strategy. For every day that things stay the same, according to current data above, here's how much each company pockets - EACH DAY!

AT&T - $20,273,973
Verizon - $15,068,493
Time Warner - $33,972,603
ComCast- $29,616,438

Going a little further, let's figure out Net Income Per Minute. For every minute that things stay the same, these companies make this much...

AT&T - $14,079.15
Verizon - $10,464.23
Time Warner - $23,592.09
ComCast - $20,566.97

I may have misquoted some of these financial statistics, but they paint a pretty clear picture. (Please do correct me if I'm wrong on anything here.)

Don't get me wrong, I don't begrudge these folks their hard earned profits, neither these great companies, their management, their staffs, nor their shareholders. I have nothing against big companies, and certainly nothing against making money. But if our system is to maintain its integrity, I think we should all insist more loudly on a level playing field, where competitors compete fairly and earn their money by making good products and providing good services, not by lobbying state and federal legislators and regulators to continue in place rules that give them an unfair advantage. The system has gone out of balance, tilted as it is towards incumbents.

It's a stretch to say that these particular companies are operating in anything remotely resembling a competitive environment. And each minute, each day that continues with this Status Quo is another Great Day for these companies. They have it good - quite good - they are cash engines, and the formula for success when you're on top is fairly simple - "Maintain the Status Quo at all Costs." These parties have little incentive to change the rules of the game, and every incentive to maintain them. If you're CEO, you're obliged to keep the gravy train running as long as you can. It's up to the press to raise this issue when it starts to hurt society and it's up to the government to push it back to the center when it gets so far out of balance.

But what a story! Imagine the declining graph of broadband penetration, the complaints from users, in contrast to the financial results of these few companies that have it so well these days. A little more digging could make the story even more interesting.

Man, I wish some intrepid reporter would pick this one up...sighhhh. What are the odds? There are so many worthy topics to go cover, but we have:
a) breaking news about that poor former Playboy bunny who overdosed a while back;
b) Brittany may sue to win back custody of her kids;
c) Move On offended a general with a bad ad using a silly rhyme;
d) Rush said "Phony Soldiers;"
and e) Barack isn't wearing a flag lapel pin.

But first, a word from our sponsors. Triple Play. Viagra. Blaring Truck Ad. Beer and Babes.

Honestly. Individually, we're very smart, but get us together as a society and we revert to children. We can be such saps, and it's all relatively transparent.

Here's the note on the poor state of media from over 30 years ago, from Needed: better reporting on how problems are dealt with elsewhere Way to go, Morton Mintz! ... Amazing, it's as if he had a crystal ball and foresaw the rise of the Internet and the role of Blogs, way back then ...

At the Third A. J. Liebling CounterConvention, held in May of 1974, I gave the first reading before my peers of Mintz's Mass Media Proposition. I was careful to say that it is not an axiom, not a law; that it is full of loopholes, and should not be carried to extremes. I would like to repeat it here because, despite the qualifiers, it has, I believe, an essential validity. Here it is: If it's really important, it doesn't get the attention it deserves, or gets it late, or gets it only because some oddball pushes it. One little-noted manifestation of this situation is the lack of what Dan Morgan, a Washington Post colleague and friend, terms comparative journalism.

I am talking, first of all, about the kind of problems that cut close to the lives, health, and pocketbooks of our readers, such as the safety of the air we breathe, the water we drink, the food and drugs we ingest, the vehicles in which we travel, the places where we work, and the power plants which supply us with electricity.

I am also talking about the prices we pay and the taxes we pay, and what we get for our money. We - our city, our state, our country - deal unsatisfactorily with many of the problems that fall under my general descriptions, as we all know. Other cities, other states, and other countries have found better, or at least innovative, answers to some of these sample problems, as we too often don't know. Which is my point: news media, albeit with certain qualifications, do not give reliable, sustained, prominent, and priority attention to telling us who's ahead in dealing with these problems, although they consistently give such attention to who's ahead in the National League.

Responding to criticism of their foreign coverage, some news media commendably have spent substantial sums to report wars, revolutions, disasters, diplomatic developments, persecutions, and the like, but they have yet to be seriously criticized for neglecting foreign coverage of problem-solving.

To cite a homely example, I have yet to meet a person who, in buying a house, didn't feel he was taken in charges for title search and title insurance. But how many people know that in England the government keeps the records, certifies titles, and charges small fees which go into a public insurance fund that pays off for any mistakes that occur? I didn't know that until recently, when I came on the news in a book - David Hapgood's "The Screwing of the Average Man."

Again, we all know that men and women throughout the country find their jobs deadly dull and dehumanizing and their work environment authoritarian. How many of us know anything at all of the fascinating story of the experiments in industrial democracy - the possession of real decision-making power, over substantial matters, by an enterprise's employees - which have transformed workplaces in Denmark, Norway, Sweden, Israel, Britain, West Germany, and, if you please, the United States? I found that story, once again, in a book - David Jenkins's "Job Power: Blue and White Collar Democracy."

We don't always have to go abroad to find a case in point. In the 1950s, when I was an assistant city editor at the Globe Democrat in St. Louis, I had the pleasure - and it really was that - of persuading the management that we should investigate the cozy relationship between the State of Missouri and favored banks.

Essentially, it was a classic relationship in which the state, whether the governor was a Democrat or a Republican, deposited tens of millions of dollars in favored banks for long periods at no interest. The banks then invested the funds, sometimes in small loans on which the interest rate ran as high as 28 percent.

Appropriately grateful, the banks made the necessary but relatively trivial campaign contributions, always, of course, without evidencing narrow partisanship. As a result of a superb three-month investigation by Carl E. Major and Ray J. Noonan, the bank lobby not only collapsed, but was so deeply embarrassed that it ended up actually supporting a constitutional amendment requiring investment of idle funds. The amendment was adopted and, in the first year in which it was in effect, yielded the taxpayers about $1 million which, for all practical purposes, would otherwise have been stolen from them.

But where was the comparative journalism to carry Missouri's example effectively to media in other states, some of which still collect little or no interest on public funds? With happy result, The Washington Post exposed Maryland's wasteful handling of its idle state funds - but that was not until 1973.

I suspect that the lack or insufficiency of comparative journalism internationally may have graver consequences. For starters, George Orwell, in his autobiographical "The Road to Wigan Pier," warned in 1937 against sterile public housing; we here paid no heed. Again, although Scandinavia has been a pacesetter in dealing with numerous areas of common concern, this aspect has generally been as remote in our news media as the dark side of the moon;

Scandinavia has tended, instead, to become synonymous with pornography, alcoholism, suicide, and deserters. We have heard little about a system devised in Sweden for rating automobiles for insurance purposes in terms of relative collision-repair costs, about a system which pipes apartment house garbage underground, about the good housing, about delivery of health care services, about the protection of miners. (A couple of recent, noteworthy exceptions were in The New York Times: Lawrence K. Altman's pieces on hospitals in Sweden, and Agis Salpukas's articles on efforts in Scandinavia to humanize mass production.)

Not long ago I learned that the Scandinavian countries had concluded a unique treaty under which a citizen of one of them who had suffered damages from pollution originating in another of the countries acquires, for purposes of litigation, citizenship in the country which was the pollution source. But how did I learn this? From a letter - not a story - in The New York Times sent in by a man who noted that U.S. media had given the treaty no attention…

The message, I believe, is this: many countries facing problems similar to our own have pioneered new approaches and, sometimes, come up with solutions; yet our news media remain insufficiently concerned to give this kind of foreign news the coverage it obviously deserves.

Posted on October 12, 2007 at 10:58 PM | Comments (0)

The Eternal, Infernal Disharmony in Being Half-Pregnant

I've been thinking about the challenge the FCC commissioners face doing their jobs. Maintaining their current regulatory posture over telecom and broadband companies must be an effort. You can hear the frustration in the comments made by the commissioners in the minority Democratic party, Commissioners Copps and Adelstein. (see my previous blog with their comments, here).

I don't envy those guys their jobs. If they approach their jobs with any honesty, they must realize that as a nation, we're not exactly kicking butt when it comes to creating a thriving broadband marketplace, much less fulfilling the public interest. After all, don't they read the same articles I do that show our nation slipping in the global rankings on broadband penetration? It's almost as bad as the UT Longhorns slide in the AP and USA Today polls. I know how that makes me feel. Yechhh.

And nobody is pointing at the Federal Telecom Act of 1996 as a raging success in bringing competition to the telecom market, that is nobody except the last-standing RBOCs, all three of them. SBC even bought up its old parent and took their name back - the new AT&T. Take that, Judge Green! When the Congress stipulated a "move to a competitive market," I guess the RBOCs heard a "move to a deregulated market." If you haven't noticed, they're not the same thing.

So when they're kicking back having a Scotch in the FCC VIP Lounge after a hard day's regulatin' (indulge my fantasy), don't you think they acknowledge to each other that what we have is not a really robust, completive market for either of these services? I can just hear them. "Man, this regulatin' sucks." "No shit, Copps." "Hi guys!" "Kevin, yo." "Ah, what a great day, time for a scotch....say, who do you like in the playoffs? How about that Tribe."

The FCC doesn't regulate either the telecom or the broadband market enough to dictate market outcomes, but they also can't let go of either market completely - they're stuck in an eternally disharmonious state - half pregnant. They continue to give the private companies they oversee just about all that they ask for, more or less, wanting to believe them when they say that their market description is a precondition to get them to invest the billions in new infrastructure. Please, even I see through that one. They like using their existing copper. It's their desire to hold on to their markets that gets them to invest, just like any other business.

Note to the FCC - "Dudes, they're bluffin'!" And when the FCC doesn't get the market results they'd expected, well, that's got to get old. Doooohhh!

But the fact is, if anybody is in charge of this situation, the FCC commissioners are. They took the appointment, after all. And they've allowed a situation to endure where they're all half-pregnant. Neither fish nor fowl. When the only parties that benefit from this situation are those currently making lots of money in privileged market positions that don't ever change - the incumbents, that is - then any reasonable person has to at least wonder why the situation continues. Whatever their stated intentions, it's their policies that keep the barriers to entry high and allow providers to charge what they want for services, within reason. It's a sweet deal for the sellers, as long as they can ride it out.

I can't help but make the comparison to the disaster that was the partially deregulated electricity market created by the California PUC and the California Legislature. I guess the FCC looks good by comparison to that fiasco. We all know how well that experiment went. Yikes! It blew up when Enron and other energy traders gamed the system and stole billions from California citizens and businesses. Because they could. That's what happens when government creates these situations. Maybe that's what inhibits the FCC? Nahhh.

Having a market sit for any length of time right in between a clearly competitive market (lots of buyer choices, little power for sellers to gouge on prices, low barriers to entry for competitors) and a clearly regulated market (regulatory commission sets prices and monitors customer satisfaction) is quite simply, as far as I'm concerned, a recipe for long-term disharmony and dissatisfaction among the public. And if you're not careful, some serious price gouging, even criminal behavior by the sellers, may result.

Because for sellers left in that state over time, the power goes to their heads and it gets to be irresistible to abuse their position. It leads to corruption over the long haul. It's just not a healthy way to regulate.

Being Half-Pregnant is not where you would choose to be, if you were a regulator or policy maker and you had the choice and you took your job seriously. It makes for unhappy buyers, for obvious reasons, and for unhappy sellers, at least on the outside. Sellers will always complain that they're over-regulated, and they will always ask for more relief - what have you done for me lately? It's how lobbyists get a raise, seeing how far they can push the system.

So what's an unhappy regulator in a Half-Pregnant market to do then? If they go back to the basics in search of answers, they'll consult their job description and see that they're charged with guarding the public airwaves, ensuring the public good / looking out for the public benefit. That would be the public - as in you and me, the buyers. So, I'd start with thinking about creating a situation that would provide long-term Buyer Happiness. For that to happen, there needs to be stability between buyers and sellers and a sustained fair market. I think the situation that provides the most benefit for the buyer over the long haul is sustained market harmony, not an attempt to tell us that what we currently have IS fair.

When a regulator takes on the job of managing a market, even overseeing a market to ensure fair competition, they have to give some thought to what constitutes a Win for a buyer. They need to have some empathy with the buyers. What makes for happiness? Is it when they get a good deal? What makes a good deal then? When the seller is very considerate? When the buyer was really looking forward to what they were buying?

As we look at broadband as a market, an assumption we tend to make is that unless there's substantial choice, the buyers are not doing as well as they could. Sometimes we accept lack of choice as just something we have to learn to live with. Other times it leads to customer dissatisfaction. Every day we buy things and often we don't give a lot of thought to this equation, but I think it is central to the broadband economy and worth exploring a little further.

I just finished a real estate refinancing last week, and I had a very unsatisfactory experience working with the mortgage broker and the title company. It was pretty miserable, and I got to pay thousands of dollars in "service" fees for the pleasure. I think one thing that bothered me was the tremendous lack of concern about customer satisfaction, sloppy process, missed deadlines, missed documents, etc - a factor that I would say is directly correlated with the nature of that market, since this is an infrequent transaction where I have low familiarity with the purchase and little recourse if things go wrong. But I'm assured all those fees are there "because of the Legislature." So, I think that having a good buying experience is about a lot more than getting a good price. It's about a sense of fair play as well.

From the seller's perspective, I assume a sale with substantial margin is a Win. That could mean getting a high market price, or selling a product that has a low cost, which contributes to a high price. It could also mean lining up an account that will produce a long-term revenue stream. Or, landing a customer that will become a good strategic reference to lead to further business development.

I think one has a functioning market in place when there is some balance between buyers and sellers. When you think about it, isn't a successful market transaction the very definition of a Win/Win? A happy buyer and a happy seller should be the goal of every market transaction. And thinking about the longer term, I think that the overall goal should be not just market harmony, but sustainable market harmony, which implies a complex system in balance.

So backing up, going up to 50,000 feet, a long-term sustainable market can be had with competition or with no competition (but regulation), but rarely if ever with very little competition.

Market Harmony in a Market with Competition

When competition is present, competing firms work a number of angles in order to win business. They can compete on price, which is the natural way to compete if their product or service is widely available, making it hard to differentiate, even making it a commodity. They can compete on value or service, seeking a higher margin, if they have a product that is different or unique in some way. The best case for a seller is to have a product or service that has few or no substitutes, or that is difficult to switch from, so that the seller can charge a price with some flexibility, either seeking higher margins (premium pricing) or seeking larger market share (competitive pricing).

So back to what makes a happy buyer in a competitive market - that is, one with healthy competition? I'd call that a market where a substitute is readily available and where the cost to switch providers is not altogether onerous. I'd focus on two things: value and customer service experience.

a) Value. A happy buyer is one who receives fair value - that's a subjective assessment, because value has to do not only with the buyer's perception of price, but also with their perception of product or service quality. And satisfaction presumes that the purchase comes with a modicum of shopping, so that the buyer is aware of market conditions. The buyer needs to determine that they received a price that is about the same or lower than they could have received had they bought elsewhere. If the search cost is too high, often a buyer will be more satisfied even with a fairly wide margin in pricing - it just wasn't worth it to hunt for a bargain, so they opted to buy without much or any comparison shopping.

In contrast, an unhappy buyer is one who finds out after the sale that they made a bad deal, either by paying too much or by getting less than what they had expected for their money. Fear of this outcome can paralyze a buyer, or put them in the unhappy role of perpetual shopper, always looking for a better deal.

b) Customer Service Experience. A happy buyer is treated as if they were special - as if the seller really cares about their experience and wants them to return as a customer. A happy buyer should want to brag about their purchase and their seller. Conversely, an unhappy buyer gets treated like shit. They know it when the seller doesn't care about them, and they don't like it.

Market Harmony in a Market with No Competition

As long as it's managed and regulated well, a non-competitive market can still result in customer satisfaction despite the lack of choice, especially if other factors are present. A good example of such long-term stability and sustained market harmony is found with a public utility. In the absence of competition, a regulator serves to ensure that each side, both buyer and seller, receives a fair price and fair value.

So, the price should be high enough so that the seller recovers its costs and makes a rate of return sufficient to be able to raise capital to finance its operations and long-term capital expenses. And the price should be low enough so that any buyer that wishes to buy can. That is the description of the regulatory compact that electric utilities entered under in order to be granted monopoly status. And it's the system in place that enabled most of the nation's electric grid to be built. (I still don't know why that can't be a model to build a broadband infrastructure, but when I suggested it recently, I was assured that "times have changed.")

What makes a happy buyer in a regulated, non-competitive market? In a word, good, reliable service. Pleasant interaction with the seller. Personality makes a much bigger difference when the customer has no way to leave the seller, when the option is limited to either buy or not buy the product. That's why I was so dissatisfied in my real estate close. That's why I'm generally upset with my cellular carrier, because I'm locked into a two-year contract and they treat me poorly with some regularity.

Market Harmony in a Market with Very Little Competition

So, back to our Half-Pregnant scenario. I'd argue that it's difficult to achieve market harmony under circumstances of very little competition, because there's a lack of balance between the buy and sell side. The seller holds most of the cards in such a market and can charge a price set just high enough to keep the market sizable. In an untampered free market, such an inharmonious, out-of-balance market is generally a temporary situation, because the higher prices charged by sellers and the lack of harmony invites new market entrants to come in, so in the seller's view, the good times don't last too long.

And while low customer satisfaction need not be inevitable in this market scenario, it's not uncommon for sellers that enjoy such a circumstance to lower product quality to increase margins - again, it's natural and can become almost irresistible. You can just hear the argument in the board room - "why are we still spending so much on product quality when we don't even have any real competition?" - "we could be making even more margin in this market, are we nuts?!!?" "We owe it to our share holders (us) to trim costs and increase margins." And they can be less attentive to customer service as well, if they believe the customers are stuck with them. What's worse, cost cutting in that area will hurt service when reps become over stressed.

Of course, this market condition describes any number of broadband markets in the United States, and it's arguable that it also describes many telecom, cable, and cellular markets, especially in rural areas. Even in local markets where there are as many as three providers, which the FCC would deem "competitive," all have a strong incentive to keep their prices at about the same level and to avoid a price war. So, the prices stay high, the choices stay low, and that condition can persist over a long period of time.

Customers feel disempowered under these conditions and rightly so - they have little control over what they buy - for instance, I'm on my third cellular company in about five years, and I think they all provide pretty poor, pretty expensive service. Problem is, they are all about the same, I've come to realize. I try not to think about it. I find a coping strategy, and go to my happy place.

But there will come a time when there's real competition, and I will drop them like a rock. Executive management at incumbent firms in Half Pregnant markets know that customers like me feel this way, and that there are lots more like me on their roles. In their quiet moments, some of them toast each other and enjoy the good times while they last. But the smart ones are worried about their futures, because they know that however well they have things now, this condition is not sustainable over the very long term. And yet, another year goes by, and the profits roll in, and the markets consolidate further....

Posted on October 08, 2007 at 10:46 PM | Comments (0)

Phoenix MetroNets, Rising from the Ashes

Phoeni1.jpg

Out of the ashes, we will see a plethora of new business models in a newly emerging Metropolitan Broadband market. Rising from the ashes is the trademark of the legendary Phoenix...(so I'm not talking about a model based on Phoenix, AZ to replace that model of Philadelphia, PA).

Setting aside for the moment the growing convergence of wired and wireless networks - the withdrawal of EarthLink from its dominant position in this young Municipal Wireless industry has left a vacuum - and you know what happens with vacuums, right? After all, Nature Abhors a Vacuum, as the saying goes, but I tend to add, "So do Markets."

EarthLink's departure has opened up the industry to consideration of new business models, and that means that the next three to six months should see an explosion of interesting new business models. Again, for the moment, I'll make the gross assumption that what the market wants in the immediate term is Mobility, so we will focus on Wireless Broadband. The fact is that more and more attention will be paid to wired as well as wireless (Fiber (FTTH) for capacity) networks. Similarly, more and more attention will be paid to private as well as public sector deals (beyond "municipal"). So I find continuing with the term Municipal Wireless is limiting in an unnecessary way. Still, markets evolve slowly, so I'll stick with Municipal Wireless for this analysis, which is high level and introductory anyway - not intended to be the last word on changes.

With no further ado then, here's my assessment of where we are in the industry evolution, after recent events and disruptions over the past month.

To understand where we are, I think it's important and helpful first to understand where we've been. So, with apologies to all the pioneers who have so much more detail and first-hand experience than I do, and to those of you who want more accuracy in media (I'm spit-balling it here), here's my assessment of where we've come from and where we're going.

But before we get started, here's a snapshot of where existing municipal wireless networks are today, from Broadband Exchange.

This will be fun.

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Municipal Wireless 1.0 - the Pioneer Stage

In the beginning ...Intel's promotion of the Wi Fi standard and the sales efforts of early Wi Fi Mesh equipment makers and WISPs combined with inquisitive, motivated city officials to produce some very early stage projects in 2004 and 2005. Collectively, they had in common that they were making things up as they went. The gear they had was not as developed and was more expensive than it is now. Their experience with deploying and network design was next to nil. And not surprisingly, they made a lot of mistakes along the way. But that's how it is when you're learning to do something you've never done before.

Cities tended to do it themselves in these early stages, as you can see below.

In April 2004, Cerritos, CA and WISP aiirmesh launched one of the first city networks, covering 8 sq miles of this Los Angeles suburb.

In June 2004, MIlpitas, CA launched a 5 sq mile network for public safety. It has since been reworked by EarthLink and relaunched at the end of 2006.

Starting in 2002, the City of Corpus Christi began a long journey to a wireless future. They recognized a need for a gas and water meter reading solution and realized they had fiber to their traffic lights. They worked closely with whomever they could find to bring a pioneer Wi Fi Mesh solution together - at one point or another, the team included Tropos (equipment manufacturer), Public Technologies Institute - PTI (government consultant), Intel (chipmaker), Northrop Grumman (system integrator), Hexagram (Automatic Meter Infrastructure company). After the network's official launch in December 2006, the City determined to bring in a private partner, which they did in Spring 2007 - ultimately, EarthLink, ended up owning and operating the network.

Other pioneer city networks of that era, not by any means an exhaustive list, included Oklahoma City, OK (public safety); Chaska, MN and St. Cloud, FL (city-owned public access).

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Municipal Wireless 2.0 - the Trial Stage

I think when the history of the expansion of broadband across the United States is written, chroniclers will look more kindly on these efforts over the past few years than we have recently. Despite long odds and vocal opposition from entrenched interests, city leaders and industry pioneers forged ahead, with EarthLink in the lead. But that leadership came with a cost attached. Here's how this next stage of industry development unfolded, in Philadelphia.

Fall 2004: In the fall of 2004, Philadelphia gained notoriety as the first very large city to make a very public push for a citywide Municipal Wireless Network, using Wi Fi Mesh technology. They realized that they had a huge Digital Divide problem.

December 2004: The project got more air play than it probably would have when the incumbent telecom company, Verizon, aggressively pushed through legislation at the Pennsylvania statehouse to ban municipally owned wireless networks, ultimately exempting Philadelphia's network at the last minute.This kicked off a round of state legislative battles in the Spring and Summer of 2005. But all eyes were on Philadelphia for many months.

October 2005: EarthLink's unique proposal was selected by the City of Philadelphia - they offered to build, own and operate the network for a non-profit corporation, and the "EarthLink" model was off and running - cities did not have to pay to have a network built! Free Wi Fi would flow in the streets like water.

Soon, a long list of large cities formed, with exploratory efforts to emulate this "Free Wi Fi" model. It seemed that in every major city, there was a public official who began contemplating what it would sound like in a Press Release to say "___________, Nation's First and/or Largest Municipal Wireless Network!"

Again, this is no exhaustive list, but it's a start.

Anaheim
Chicago
Houston
San Francisco

Also noteworthy during this second stage were these non-EarthLink deals:

Milwaukee
Minneapolis
Portland
Tempe

As long as EarthLink and a few other large city vendors (MetroFi, Mobile Pro / Kite) were grabbing all the headlines with these major announcements in NFL cities, other industry activity was somewhat in the shadow and smaller, different, innovative deals didn't get as much attention.

In a sense, we were more or less limited to the Free Wi Fi model as we watched these city projects unfold, at least in the eyes of the mainstream media, waiting to see how they turned out. For most of us in the industry, it was increasingly difficult to get public sector leaders' attention with a model that didn't at least envision a possibility of getting a free ride from a motivated private sector partner, which became harder and harder to find in 2007.

But I've already spoken my piece on all that - see the MetroNetIQ August 2007 Archives, where I wrote a half dozen or more articles on the unraveling of that particular business model.

The bottom line from this industry stage is that these networks counted on a new private sector industry developing and taking on the risks of these projects. Big city leaders were willing to launch initiatives as long as they bore little of the risk. When that "scenario" finally began to unravel, with the withdrawal of free deals by MetroFi and EarthLink, and the sputtering of Kite, the air went out of the balloon that was Municipal Wireless, or so it seemed. The announcement of the Death of Municipal Wireless was premature, however.

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Municipal Wireless 3.0 - the Emergent Customization Stage

I think we're emerging into a new stage of this industry, where we'll see the adoption of a variety of new business models, call it "MuniWireless 3.0," which I've labeled the Emergent Customization Stage. Imagine a shotgun blast, where pellets emerge from the gun barrel and explode into a broader, widening pattern. That's where we are with business models - we've matured to the point that interested parties have a menu of options to consider, and they can browse (pardon the pun!) to get the right option for their particular needs - a Custom business model, if you will. As cities learn more, they are able to take a more autonomous role, and we will see several different paths emerge, because cities are widely divergent in their local situations and preferences. Long Live Freedom of Choice!

First, we'll see current projects that were launched in the Pioneer or Trial stages adjusting to lessons learned. On the one hand, there's Privatization, where we see EarthLink taking over in Milpitas, and we see the City of Corpus Christi, TX, selling its network in March 2007 to EarthLink and cashing out.

On the other hand, we see Municipalization when the City of Granbury, TX, buys it's network back from the private operator, to ensure that their municipal application needs are met.

As you can see by these three examples, we're in a highly dynamic mode of adjusting to Lessons Learned from the Trial Stage.

And that's not all. See also this recent analysis of the Portland , OR, network being deployed by MetroFi. It's a highly fluid situation, a good news/bad news type of deal. The Good News: the ad supported network is getting great traffic, where the network is already deployed. The Bad News: there's still no anchor tenant money flowing from the city to the operator, which challenges the pace or ultimate deployment of other areas of the city.

And then there's Charleston, South Carolina, which is struggling to find a new path for its downtown network, temporarily turning off the free version, but not giving up altogether, by any means.

And here's a recent article that's indicative of what we'll be seeing as we watch Community Networks take hold. Watch the wings of this particular Phoenix unfold from the ashes out in the Bay Area - Sharing could use community to provide free Wi-Fi. We see an organic, emergent form of municipal network that would have access points springing up from various and sundry alleyways, streets, and byways in the city like so many mushrooms popping up on the forest floor after a good Spring rain.

For more on the FON business model, see here. This company makes money by selling devices and charging a small fee. It's out of Spain, so the users of the networks are called "Foneros." The key to this model is that the city may not have to do anything about it, but stand back and let it happen! Will it work? Who knows, that's half the fun of this new phase! Bravo, Ole!

Finally, British Telecom, aka BT, perhaps the most innovative of large national telecoms globally, recently cut a deal with FON to leverage their emergent business model, creating something called BTFON.

As new deals percolate, it will be interesting to see if private sector providers are able to sell cities on the value proposition of anchor tenancy. I think some will, while other cities will take a new, fresh look at owning their own networks, seeing them as more akin to a Capital Improvement Project for a new road system, or a utility infrastructure upgrade - those are projects they're used to, so putting thee deals in those terms should bear fruit for vendors (Hint, Hint).

I think this will be an area to watch more closely in the coming months, as Stage 3 unfolds.I hope you can see by this analysis that while the EarthLink-inspired events of last month may have closed one door, they absolutely opened some others (and maybe some windows, too!).

That's it for this round of analysis, which will bear further development in later posts.

See my next blog, upcoming, where I'll take a look at what's happening with Rural Broadband Initiatives, another area of considerable activity, creativity, and emerging customization!

Posted on October 06, 2007 at 04:18 PM | Comments (0)

Formal Rulemakings, Informal Rule Breakings: Our Federal Government At Work on Our Behalf

When I see things such as these, I have to sigh. As the French say, "Plus Ca Change, Plus C'est La Meme" Here's an Inside Look at How Inside Information Works (Only for Insiders)

A stray item caught my eye on a political blog, leading me to this interesting report just released by the U.S. Government Accounting Office September 2007 - GAO: FCC Should Take Steps to Ensure Equal Access to Rulemaking Information. I recommend this short report to anyone curious about the federal regulatory process - it includes an especially good primer on how the FCC does its job, in theory - valuable background information. But then it describes how the FCC staff and commissioners interact with the industries they regulate, and other stakeholders, in practice - even more valuable current events data - read on.

A Rulemaking in a state or federal agency is a formal process whereby the agency amends or makes new rules, which then comprise the regulatory body of work they use to regulate industry. It's a big deal. Legislatures, like Congress or state legislatures grant the executive branch agencies this authority to make rules to "execute" or "administer" the laws that they enact. Rulemakings can be quite lengthy and complicated processes, and can have a tremendous impact on a regulated industry's prospects. The time right before the decision is made by the regulatory board is a time of high drama, and the meeting rooms are often packed with interested parties anxious to hear how the regulators will finally rule.

From the Report:

FCC's rulemaking process includes multiple steps as outlined by the Administrative Procedure Act of 1946 (APA) and other laws, with several opportunities for public participation.

1. FCC initiates rulemaking in response to a statute, a petition for rulemaking, or its own initiative. Any person may petition FCC to amend rules or create new rules.
2. FCC generally begins a rulemaking by releasing a Notice of Proposed Rulemaking (NPRM), and then gathers and analyzes information submitted by public participants or developed within FCC to support a rule, leading to a final rule for the commission to adopt.
3. The public may participate in the development of the rulemaking record by filing comments on FCC's notices, filing replies to other parties' comments, and meeting with FCC officials.
4. Outside parties that discuss rulemakings with FCC must file a disclosure in the public record, called an ex parte filing, including any new data or arguments presented during the meeting.
5. The FCC chairman controls the commission's agenda and decides when and how to adopt rules.
6. The commission may adopt final rules either by vote at a monthly public meeting or by circulating the proposed final rules to each commissioner for approval.

This gets interesting, and it's a fascinating look by a highly reliable and credible source on how regulated industries work the process to make sure that they exert as much control as they can over their regulators. I used to do "regulatory interface work" - that's a regulatory lobbyist, in so many words - for a large investor-owned electric utility company in front of the Texas Public Utilities Commission, so I have some distant experience on a related front. This report took me back about a dozen years, and it's very plausible.

The report describes interviews the GAO conducted with stakeholders who have regular contact with the FCC. The GAO looked at four case studies - four completed rulemakings. The interviewers met with the following stakeholders:

Regulated Industries.jpg

The interviews uncovered what can only be called the improper release of information by FCC staff just prior to Rulemakings. The key finding: Nine out of 12 stakeholders admitted to having access to agenda information in advance of the public release of such data.

However, we also were told by 9 of 12 stakeholders - both those involved with our case studies and stakeholders who regularly participated in FCC rulemakings - that they knew when proposed rules were scheduled for an upcoming vote well before FCC released the agenda to the public because they hear this information from FCC bureau staff and commissioner staff. This advance information is not supposed to be disclosed outside of FCC.

As the report describes, there is an official release of the Meeting Agenda where the Rulemaking decision may or may not be on the agenda, just one week before the actual meeting. As this report describes, an FCC rule prohibits any lobbying of decision makers one week prior to a decision - the "Sunshine Period." And to their credit, no such rule breaking of the Sunshine Period was found in terms of meeting during that one week period prior to the rulemaking decision. But there was access just prior to that week.

No doubt, this FCC Rule is intended to prevent any interruption with a well-designed regulatory process, whereby the Commissioners can make their decisions based on the facts, the arguments, and the recommendations of staff. As soon as the Public finds out about the agenda, it's too late for an interested party to have any last minute access to a decision maker. But that's not the case for the insiders, who just find out sooner, by virtue of hanging around and listening, or by virtue of relationships they have on the inside. So then, they can get in their meetings before that one-week window begins.

As this report describes, in contrast to the Official Rules, there is the Unofficial Reality of how the process works. A few weeks before the Agenda is published, the draft agenda is circulated among staff so they can prepare for the meeting. So there, in practice, is an unofficial release of the agenda, for insiders only, through back channels. This special access to information gives these insiders valuable advance warning, during which time they can schedule high level visits in front of regulators to "lobby" for their point of view. I'm sure that the commissioners are generally surprised at the timing of such meetings (heavy irony here).

The gist of this article, for me, is that when staff play favorites with lobbyists with whom they share a social relationship, in this case, by releasing information selectively, they give their friends an undue advantage in the regulatory process. It's about a lot more than a friend helping another friend out, as I'm sure that is how it is understood inside the clubby culture of a regulatory agency. You can't help but become friends with people you work with on a regular basis, see at meetings, even go out to lunch with, even if there are separate checks at the end of the meal. And that is exactly the work of the lobbyist, to use their skills and influence to gain access, to both information and decision makers, and to position their ideas and arguments at the head of the line.

It really is hard to overstate the significance of this type of behavior, which undermines the entire process as its designed to work. It's what is meant by "insider" access. Sure, the lobbyists don't always get their way, and this release of information may seem like no big deal on the surface, but this informal practice gives the professional class an advantage, and that makes a big difference in results, over time. Their client's POV gets heard more often by regulators, consistently, and in this case, just before a decision is to be made, when timing is everything.

That's more than can be said for the poor outsider who follows the rules, writes a lengthy argument well in advance of the actual rulemaking decision, perhaps gets a visit with commissioners, also well in advance, but then is prevented from communicating immediately prior to a Rulemaking.

This report shows without any doubt that - It's a stacked deck. And that's the way of the world inside the Beltway.

If you don't want to read the entire report, here are the "money" paragraphs below.

However, nine stakeholders - both those involved in the case studies we reviewed and other stakeholders with whom we spoke who regularly participate in FCC rulemakings - told us that they hear this information from both FCC bureau staff and commissioner staff. One stakeholder - representing a large organization that is involved in numerous rulemakings - told us that FCC staff call them and tell them what items are scheduled for a vote.

In contrast, a number of other stakeholders told us that they do not learn this information and do not know which items are scheduled for a vote. These stakeholders, who generally represent consumer and public-interest groups, told us that they do not know when FCC is about to vote on a rulemaking or when it would be best to meet with FCC staff to make their arguments. In contrast, stakeholders who know which items have been scheduled for a vote know when to schedule a meeting with FCC commissioners and staff because they know when FCC is about to vote on a rulemaking.

FCC officials told us that, for stakeholders to successfully make their case before FCC, "timing is everything." Specifically, if a stakeholder knows that a proposed rule has been scheduled for a vote and may be voted on in 3 weeks, that stakeholder can schedule a meeting with FCC officials before the rule is voted on. In contrast, a stakeholder who does not know that the rule is scheduled for a vote may not learn that the rule will be voted on until the agenda is announced 1 week before the public meeting. However, once the agenda has been announced, the Sunshine Period begins, and no one can lobby FCC officials about the proposed rule. As a result, the stakeholder who learns that a rule has been scheduled for a vote 3 weeks before the vote can have a distinct advantage over a stakeholder who learns about an upcoming vote through the public agenda. Our case study reviews and discussions with multiple stakeholders showed that some stakeholders know this nonpublic information and, as a result, these stakeholders may have an advantage in the rulemaking process.

The report concludes with a recommendation that the rules be reinforced and followed, and No Comment from the FCC:

Recommendation for Executive Action

To ensure a fair and transparent rulemaking process, we recommend that the Chairman of the Federal Communications Commission:
* Take steps to ensure equal access to information, particularly in regard to the disclosure of information about proposed rules that are scheduled to be considered by the commission, by developing and maintaining (1) procedures to ensure that nonpublic information will not be disclosed and (2) a series of actions that will occur if the information is disclosed, such as referral to the Inspector General and providing the information to all stakeholders.

Agency Comments

We provided FCC with a draft of this report for their review and comment. FCC had no comment on the draft report and took no position on our recommendation.

A final note from the report, in the background section: The FCC was established by the Congress in 1934 with the task of "regulating methods of electronic communication to foster a competitive environment, with an emphasis on the public interest."

73 years later, would you say the intent of Congress is being followed? Do we have a "competitive environment?" Do you feel that the "public interest" is emphasized?

While I continue to hope for improvement at the federal level, and will not let go of that hope, stories like this lead me to focus my efforts on the local and regional level. Sad to say, at this point I have no faith in my federal government to represent my interests as a U.S. citizen.

It is painful to write that down and see it in print.

Posted on October 05, 2007 at 01:11 PM | Comments (0)

Taking the Plunge

bellyflop.jpg

I just got back from swimming laps at the health club. They have a great pool, under the trees, and if I time it right, I often have the pool to myself. What a great way to start the day! I like swimming in the morning, when the sun is just coming over the horizon of buildings and trees.

As I stood at the edge of the pool, adjusted my goggles and put in my ear plugs, it occurred to me that the water was probably pretty cold. After a moment's hesitation, I shrugged my shoulders and took the plunge. Yikes! I was right, man, it was cold! But force of habit told me to just start swimming and in two laps, my body had adjusted to the temperature and what had been shocking and uncomfortable just a few minutes before had become refreshing and invigorating. As an experienced swimmer, I knew the pattern and what lay ahead for me, in two short minutes, so it wasn't all that hard - I just had a moment's hesitation. It's a different story for a beginner though. It wasn't always this easy.

It struck me that this thought process is a metaphor for Metropolitan Broadband.

(OK, OK, I'm sorry, call me weird, and you wouldn't be far off. Call me obsessed, and you're getting closer. But folks, I'm afraid this is how it works after blogging for 2.5 years on this topic. Trust me, nearly anything, with a little work, can be a metaphor for Metropolitan Broadband!)

Q. So, how is jumping in the water, Taking the Plunge, if you will, a metaphor for Metropolitan Broadband?
A. If you're a beginning swimmer especially, you have trepidations, just like you do as a beginner in metropolitan broadband. You overcome those trepidations by forging ahead, with faith and courage, understanding that you have a wellspring of talent and skills that indicate success, and that you have a support network if something should go wrong. Lucky swimmers learned this skill when they were little, with parents right there to coax them along, and skilled instructors to teach them the skills they would need, and help them to develop them, providing confidence and guidance when they needed it most. Soon enough, they were off with their friends, swimming and having fun. Adults who try to swim often must overcome a lifetime of fear of the water, which grew ever greater as basic survival instincts told them it was dangerous whenever they were near the water, since they had never learned how to swim.

Conclusion: The benefits of initiative far outweigh the risks of taking on a new task, especially if the new task is an inevitable requirement of your long-term objectives.

What could the boy in the picture above have been thinking, just before diving in, especially if he was new at swimming? I think his internal conversation would go something like this...

"I've done this before, I should just jump in."
"But it's going to be cold, and it will be shocking."
"Maybe I can just wait here on the edge of the pool for a minute."
"What if I don't remember how to stay afloat."
"What if I hit my head and sink to the bottom?"
"What if the lifeguard doesn't see me and I drown?"
"I'm too young to drown. I don't want to die."
"It's getting hot out here, I should just jump in."
"I think everyone is starting to stare at me. What a wimp!"
"I've done this before, and I've paid attention to my swimming instructor. I know how to do this."
"Swimming's not that hard if you just let yourself float."
"Even if something happens, there are a lot of people here who would help me."
"If I stay close to the edge, I'll be OK."
"I'm ready, I'm going in."
"Here I go!"
"Yeaaaaaaaaaaahhhhhhhhh!!!!"

One of the hardest things to do is to start a new activity, especially if there are some risks attached (and aren't there always some risks?), and especially if you are in the limelight, it's hard. Nobody likes to make mistakes, nobody likes to play the fool, nobody likes to admit their ignorance about something they're expected to know. It's human nature to be cautious, to avoid embarrassment, and that urge for caution goes up as the risk of a downside outcome increases. But there is also a risk posed by inactivity, and too often we tend to underestimate that risk, while overestimating the risk of taking on a new project.

It's often said, "There is no better teacher than experience." And the older I get, the more wisdom I find in that statement.

Two years ago, a city official at a round table on broadband expressed skepticism about Wi Fi and said that the municipal wireless industry was like a fast-rushing stream, and they were waiting for the current to slow down a little before jumping in. Internally, I shook my head, because our world views are so far apart. I think that that individual will be waiting for a long, long time, because I don't think the current in this stream will ever slow down - my world view is that if anything, it will speed up as time goes on. We're in a period of disruptive change, thanks to the maturing Internet, advances in digital computing, advances in mobile communications, etc., etc., etc. Technology advances and Competition combine to create pressure on us to adapt and move forward, even as the pace of change makes planning horizons ever shorter.

The choices we face are expanding over time and our decisions get more complicated over time, not less. To hope for a simpler decision is to delay taking a stand out of fear of making a mistake - I believe that is fair and understandable, especially in this industry. The only solution I can think of is to get smart and to gain experience as quickly as possible.

But as I discussed in the blog earlier this week about Wicked Problems, the nature of metropolitan broadband is that it is complex and dynamic on at least three fronts - technological, political, and business - so it is going to be complex and risky, no matter what you do. This argues for taking steps to mitigate your risk and allow you to get started sooner than later.

1. Spend a little time in study, but not too much - as with any new subject area, most of the gains come in the early stages, then the value curve gently flattens out and the more inputs made in studying a subject produce less and less value. Academic study will only take you so far, and at some point, time spent studying becomes "Paralysis by Analysis."
2. Hire a consultant - this is a way for a city official to buy immediate knowledge and experience, collapsing the learning curve, substituting money for time. (email MetroNetIQ here if you are nodding your head in agreement.)
3. Identify possible negative outcomes and prepare for them - talk to some other city officials who have gone before you, ask them - what worked and didn't? what were your lessons learned? what would you do differently if you had to do it over again? when did you know you were ready to act?
4. Start a small project with a short horizon - making the outcome less risky by design, and bringing in results sooner than later, both serve to accentuate the experience value of initiative. A project will provide an opportunity to get several stakeholders involved, produce learning across the board, stimulate dialogue, build trust, and prepare everyone to take more and bigger steps.

If you know that

a) the situation gets more complicated over time
b) there are significant advantages to moving ahead
c) the risks of moving ahead can be managed
d) the problem is a "wicked problem," one whose solution will only become apparent by trial and error

There is no substitute to getting started by jumping in, Taking the Plunge.

There is no fun in standing at the edge of the pool.

Just ask any kid who has learned to swim if they regret the decision. I think you know the answer.

Then ask an adult who never learned to swim if they regret that omission. I think you know the answer to that question as well.

There is no substitute for living life fully, and for pushing out the envelope to be all that you can be, whatever your role in life.

Remember:
1. No Risk, No Reward.
2. No Pain, No Gain.
3. Nothing Ventured, Nothing Gained.
4. The Early Bird Gets the Worm.

(OK, remember also: A. Fools Rush In, Where Angels Fear to Tread. and B. Pioneers End up with Arrows in their Backs.)

A little belatedly, it strikes me that I've been advocating the First Habit of Stephen Covey's Seven Habits of Highly Effective People . The reference is at the very bottom of the list, so scroll down.

So I'll let The 7 Habits have the last word here. These habits are always lurking in the background whenever I write, it seems.

1. "Be Proactive." Take Initiative.
2. "Begin with the End in Mind." Have your goals in front of you, know WHY you are doing what you are doing.
3. "First Things First." Make a plan and set priorities according to your values and objectives.
4. "Seek First to Understand, Then to be Understood." Listen first when you engage with others.
5. "Practice Win/Win." Look for solutions that are robust with multiple wins.
6. "Synergize." Set your goals high. Through creativity, find solutions that are better than compromise, solutions which leverage all that you bring to the table.
7. "Sharpen the Saw." Take the time to rejuvenate. Pause as you move forward to consolidate your gains, understand your Lessons Learned, and to Re-energize yourself and your team, for the new challenges that lay ahead.

Posted on October 05, 2007 at 10:32 AM | Comments (0)

Three-Minute Coffee Break, Tickle Your Funny Bone

Sometimes, all this policy stuff, technology, buisness, etc. can get a little dry.

Need a break?

I challenge you to take this three minute break, watch this video, and not crack a smile. Humanity in all its wacky glory, on display on You Tube!

WARNING: Turn down your volume first, because the video starts immediately after you click the link and hit the site!

See Save the Internet!, take a break, and smile a little.

This is a wacky world we live in.

Posted on October 05, 2007 at 10:15 AM | Comments (0)

E Pluribus, Unum: From 300M to 30K to 3141 to 50 to 1

Translated from Latin, it most closely means "Out of many, (is) One.", "One out of many" or "From many, (comes) One." Its Anglicized pronunciation is IPA: [ ˈi ˈpluɹɪbəs ˈjunəm ], Classical pronunciation IPA: [ ˈeːˈpluːribus ˈuːnum ]. It refers to the unity of the disparate states of the United States as well as (in modern times) the notion that the nation is a melting pot of peoples. E Pluribus, Unum in Wikipedia

How many people are there currently in the United States? That's a hard number to get, because, well, babies are being born. Right now. There, the number just went up again. Another one. This website says there are 301,139,947 (July 2007 est.). But that is so, well, static. Sometimes, Google doesn't steer you to the right site. This MSNBC website tool is one of my favorites, and it provides a dynamic look at our population. I found it back when the national population was about to go over 300M, and that was all over the news, and I bookmarked it. Our national population is now at 302,960,296, so that was apparently about 3 million people ago. When you read this, if you go to the link, you'll see how many have been born in a short period of time. We're a busy, busy bunch of baby makers here in the US.

Woo Hooo! Maybe that's why some want to build a fence on the border - too many babies being born. With this huge population comes an ever growing need to get organized and to build an infrastructure to support our modern lifestyle. We neglect our current infrastructure at our peril. We neglect our need for future infrastructure, at our peril. It's boring, it's expensive, but it's the foundation of everything we need to live our modern lives. A society needs an infrastructure, it's always been the case, always will be.

I think that infrastructure gets neglected because it's not sexy. I often get bored with it. But it's fundamental. Solving an infrastructure problem requires not only the technical: ingenuity, creativity, skills and innovation, but also the political and economic: patience, compromise, synergy, collaboration, planning, foresight, and leadership. This is one area where we have to find a way to work together. We will sink or swim based on our ability to find a way to work together. Infrastructure is a societal problem.

Thinking about the human condition, I've often pondered that although we're each individual human beings, we don't really exist in isolation. As interesting as the individual human being is (and that is a truly fascinating subject), the truly complex and wonderful aspect of humans is our civilization and our behavior in society. Instead of looking at the individual human, the more natural way to assess our status on the planet might be to look at the number of families, households, neighborhoods, churches, schools, communities, towns, cities, counties, etc. And don't look just at the number of groups, or the diversity of groups, look at how we interact.

The whole field of social networking is fascinating, and it's a growing field.

A social network is a social structure made of nodes (which are generally individuals or organizations) that are tied by one or more specific types of interdependency, such as values, visions, idea, financial exchange, friends, kinship, dislike, conflict, trade, web links, sexual relations, disease transmission (epidemiology), or airline routes.

This transition is happening so fast. If you're not on at least one of these sites -LinkedIn, Facebook, or MySpace - you're not included in the on-line society.

It's like not being included in the phone book thirty years ago! Imagine. Reminds me of the scene in the 1979 film The Jerk, where Steve Martin's character Navin Johnson freaks out in ecstasy on getting the new phone book.

The new phone book's here! The new phone book's here! This is the kind of spontaneous publicity I need! My name in print! That really makes me somebody! Things are going to start happening to me now. and later First I get my name in the phone book and now I'm on your ass. You know, I'll bet more people see that than the phone book. The Jerk Quotes (1979)

The next time you're stuck in a traffic jam, wishing everyone would just go away, longing to be alone, consider this: Human beings owe their big brains, their keen intelligence, and ultimately, their consciousness to the fact that we're social beings, and succeeding in society requires lots of brain power. It's a complex task. That's why we take so long to grow up - there's so much to learn.

And that's why telecommunications is so important. We need to hear each other's voices, we need to share data and compare notes, we need to "reach out and touch someone" constantly. And we need access to information now, not later. All this is why broadband is so important - I grew up in the 1960s and 1970s, and didn't get my first PC until the late 1980s. I was a late adopter. Working in state government, I had a dumb terminal connected to a mainframe, running PROFS operating system, throughout the 1980s. That was enough for me then.

But now, I can't imagine being without my laptop, my wireless network, and, my Internet connection - my BROADBAND connection. Same goes for my cellphone, although I seemed to do just fine back in the day, making sure I had pocket change before I went out, so I could make a pay phone call if I needed to. That was Then, this is Now. Times change, and we have to adapt, or get left behind.

So, what's my point?

To deny this universal need to connect at the Broadband level is to deny the march of technology and its impact on our lives, and it is to deny the impact and importance of staying in touch with each other.

We can go so far as to say that the nation that is better connected with digital infrastructure will be more competitive in the long run. Don't believe me? Make the counter argument. I'd like to hear it. With high speed connectivity comes a life and an identity on-line. Instant access via the Internet to the world's information, at your fingertips. Don't know the answer, ask our modern Oracles - from Google to Wikipedia, answers are a few keystrokes away in today's world. Need to talk to someone, anyone, anywhere, anytime? Jump on Skype and make the call. If not altogether free, your call will be Damn Cheap. It's truly amazing!

And yet, that's what we do as a society today - We Deny Change - we're busy denying this new reality about the need for universal broadband connectivity. So many seem content to say, "I've got mine, let those others use the library if they need to get on a computer." Huh? "My kids need a PC at home, but let those other kids make do with an hour a day in a computer lab, or they can go to the library if they need to get on a computer." What we are missing by denying this universal need to connect is that our society is less than it could be when it is only partially connected. We all suffer when others are still living in an off-line world, because we don't enjoy the full benefits of an on-line society. We're stuck in In Between Land, a disjointed society that's working like a V-8 engine misfiring on only six cylinders, a truly inefficient place for a society and an economy to be. The longer we stay in this Limbo, the longer it will be until we reach our potential, and the further we will fall behind. Time's a-wastin'.

In our forefather's infinite wisdom, they recognized the powerful (pardon the pun) impact that electricity would have on society and they charted a national policy of electrification, so that all of society could enjoy the benefits of light and power. It took them a while to get there, but they did, and things have never been the same since. Electricity transformed society, ushering in the Modern Era. Same goes for voice telephony. It was national policy that we would would add a fee to each family's phone bill each month, to spread the cost and to promote "Universal Service." It was seen as a national good to tax the many to bring about universal connectivity. Imagine wanting to call someone today, but then realizing they didn't have a phone. We take this level of connectivity for granted, because we had foresight years ago and we took the steps to make it happen.

And yet, with broadband, we still see it as a luxury good, a premium service that people should be willing to pay for if they feel they really need it. And the current cost is quite simply beyond so many in our society. Today's approach simply will not get us to universal broadband connectivity, and we shouldn't expect it to - that's not our policy, and it's not designed to do that. So as a society, we're behind the times when we think that way. Imagine if that had been the way we had approached electricity and telephone service. That's the most charitable way I can put it:

Our current approach to broadband in the US is inadequate to our needs as a modern society.

So when you look down on the US at night time, from up in the sky, what do you see? One amorphous mass of land? Or do you see a diverse set of points of light? How many points of light are on the map? How do we organize ourselves in this country? How we look at our country is one key to beginning to find a solution to our broadband infrastructure problem. We can look at this as a national problem needing a national solution, or we can look at this as a local issue that can be addressed by 30,000 local sets of officials. Or, we can find some combination of the two - why not a national solution AND a myriad of local solutions? What are the existing organizational elements that we can leverage?

Incorporated cities? About 30,000 of them. What if we made an assumption that there are on average 20 neighborhoods in each American city. I have no idea if that's anywhere near correct, but let's just use that as a starting point. that would give us nearly 600,000 communities, where families each share a sense of "this is where I live." All my neighbors beat a path back to this same patch of earth we call Home every night.

How about Counties? There are a little over 3,000 county governments in the United States. The Baby Bears of political subdivisions, these entities are sized "just right" - they're bigger than cities, but smaller than states. They run the gamut from very organized and activist to hardly motivated at all.

The US Postal Service divides the US into Zip Codes, our version of Postal Codes elsewhere. We got organized in order to communicate with the mail. The telecom world subdivides the nation into Area Codes. We got organized in order to communicate with the telephone. Are you connecting the dots? We have websites on the World Wide Web, and we have URLs for web addresses. But we have not yet gotten ourselves organized as a society in order to communicate with Broadband.

What about State solutions? Now it's getting easier, the units larger, they're autonomous, and yet, they're more complex than the more local organizations - there are 50 of them, as many states as there are stars on the American flag.

And yet, in the end, we are one country - a fact we often lose sight of, as many people now feel we are two - there's Us and there's Them. It's like a Dr. Seuss book - Red State, Blue State. We divide ourselves into Conservatives and Liberals, Haves and Have Nots, Rich and Poor, Educated and Uneducated. "And whatever I am, whatever my group is, you suck, your group sucks, and you are wrong." Is this really where we've come to after 231 years? It's like we're a nation of sports teams, all in competition for a limited pot of resources. It's become a Zero Sum game - if you win, that means I lose. This approach does not serve us well - it's short-sighted and in the end, we all lose when the result is that we delay on addressing our infrastructure issues.

Boy, do I get tired of this. The fact is, we have so much more in common as Americans than we are different as Republicans or Democrats, Conservatives or Liberals, or whatever other division you choose to focus on. Despite the divisiveness of the past two decades, we're still one national society, united on several fronts, culturally, linguistically, politically. It's not too late to start acting like a country again. It's not too late to grow up as a society and face reality - we need to start building our nation again, and quit bitching about who is getting more and who is getting less.

So, why all these statistics? If you read this blog on a regular basis, you're aware that I've been musing on a national broadband policy lately. See my last two posts here and here. The beginning of grappling with a solution is in understanding the problem fully, and coming to a consensus on just what the problem is. Until we have a shared view and are speaking the same language, we will not be working together on a common solution that will work for all of us.

Part of what makes America great is its diversity. But with that diversity comes complexity. And our complex society, with a diversity of viewpoints, makes it difficult to come to a consensus on just about anything. Put that together with our sheer size and diversity of geography, and you have a recipe for slow progress, if you get any progress at all.

There are strategies for dealing with complexity. One way is to start by finding some general agreement on principles. If we can do that, we can begin to generate some momentum. Another way to address the complexity is to break the problem into more digestible bits.

That's why I focused this blog on talking about who we are, how we communicate, and different tools we have at our disposal to begin to address our issues. We must start thinking about broadband infrastructure in a different way, because it's vital to our future. And it takes time to build. We are running out of time and we are falling behind. If that's not a crisis, I don't know what one is.

Posted on October 04, 2007 at 08:12 AM | Comments (0)