Dana Blankenhorn

Who Wants An Alternative?

Steve Stroh writes:

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Show of hands... who wants to build alternative delivery networks so
you don't HAVE to use cableco or telco?

Bill St. Arnaud's doing it with fiber. I'm doing it with wireless. Whatever works that's NOT telco/cableco. The telco/cablecos are  STUPIDITY and CAN be routed around.

For those that have access to irresistible bandwidth bargains like FIOS, I foresee a rise of a new class of service providers - VPN end points; all of your Internet traffic from your home to a "neutral point" on the Internet is encrypted inside a VPN, and once your traffic hits that "neutral point" it's taken out of the VPN and routed to its destination. VPN used to be computationally intensive and complex to configure. Not any more - it's being bundled into routers, and Hamachi made VPN into a download no tougher to use than Skype.

If the  "crackdown" happens, use of VPNs will happen as a counter-action. From the service provider's perspective, it's an irresistible business - all that's needed is (now open source) software, bandwidth, and CPU cycles.

Hamachi seems to have it down. When they have the Mac client and offer the endpoint service, I'm signing up. Boingo's already there (when you use their client software at a Wi-Fi Hotspot). HotSpot VPN is another.

The need for VPN isn't yet widely recognized, and the services aren't very high profile - YET. All it's going to take is a mention from a Mossberg or Manes or Levy... and a tipping point will be reached in weeks.

A Close Look at Verizon

From the desk of Bruce Kushnick:

Since Ivan Seidenberg feels so strongly that Verizon needs relief, let's look at the record.

In 2000,  Verizon's domestic telecom expenditures were $12.1 billion

NOW, in 2005, Verizon is claiming to be spending all of this money on FIOS, its latest fiber to the home plan.

Yet its total domestic telecom expenditure in 2005 was $8.3 billion.

                   				      2000           2005        	2004

Revenue          			   $64,707        $ 75,112     $71,283

Cap spending  total  		     (17,633)      15,324 $      $13,259

Telecom          			    $12,100        $ 8,267        $ 7,118

Depreciation     `              				$ 8,801

Click below for the meaning:

Today's Reading

Bruce Kushnick offers some articles you should read today.

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Let There Be WiFi

By Robert McChesney and John Podesta, The Washington Monthly

Broadband is the electricity of the 21st century -- and much of America is
being left in the dark.

Interview with Verizon CEO Ivan Seidenberg

The Washington Post

"If the company does not get some relief, Seidenberg said, it will have to reconsider whether to serve small franchises and might instead focus on big ones. 'This is the only threatening comment I’ll make. . . . Remember, there are some franchises that are big. So let’s take the city of Philadelphia — it’s big,' he said. 'Then you’ve got all these oodles of them in the state of New Jersey, or Virginia."

 

Boycott This

The Columbia Institute for Tele-Information,and the School of Public Policy and Public Administration at George Washington University and the Federal Communications Bar Association present "The Telecommunications Act of 1996: Ten Years Later"

Bruce Kushnick:

Turns out that the two representatives for the CONSUMERS are Sam Simon, of TRAC,  (who runs the largest Bell Skunkworks' and astroturf group,) and APT''s Daniel Pythyon, who is also the lawyer for the Bells' lobbying arm, USTA. APT is funded by the Bell companies.

More information at our Skunkworks. Still more below the fold:

The Big Lie In The Broadband Debate

The biggest lie in the debate about broadband is that it's expensive, and that its price is rising.

NO, writes Bob Frankston:

THIS STUFF IS CHEAP CHEAP CHEAP. IT's FREE! Better, it reduces the costs so don’t pander to those who assume that pain is virtue.

1. We’ve already paid for so much and its running.
2. Savings over the current very complex billing system (such as building redundant infrastructures) would save a lot.
3. Using a common infrastructure would save a lot
4. Simply sending X-Rays as bits would save an incredible amount of time and money.
5. People should be able to buy their own local connectivity to their neighbors.
6. Wireless is becoming an amenity.

Forget the bonds, just pay for it at of pocket change. Google alone would gain a lot by having connectivity available. Just about any single application such as reducing health costs would pay for much of it.

This is not like the multizillion dollar projects. This is cheap – it saves money.

So we shouldn’t be held hostage to cheapskates. Instead focus on where there is awareness and build from there. Forget the third world burgs that would rather punish P2Pers. If they want to opt out, then go to

Bangalore

Evolution works. Those who don’t get it are simply sloughed off. You may have to move to a more connected and aware community but that’s the same as choosing a place to live by the schools that are available.

We don’t have to win every battle, just make some opportunity available and work from there.

Frankston drew this response from Michael Bookey of Pachena Light Consulting:

The Battle of Wyoming

Recently, Level 3 Regulatory Counsel Erik Cecil brought former FCC official Dale Hatfield to Wyoming in order to fight a Qwest effort to gain a virtual monopoly on Internet backhaul in that state. (Wyoming map from Wikipedia.)

Qwest went to state regulators to demand that Level 3, which offers competitive pricing on fiber-based backhaul, would have to connect everywhere in the state before it could be allowed to do business. Cecil was fighting this effort to secure an  effective monopoly, and at the last moment Hatfield agreed to testify against the Qwest effort.

Writes Gordon Cook: Spread the word.  Tell it to the farthest corners  of this land that the power of money to choke the lifeblood out of  rural communities and fuel the bank accounts of corporate magnates,  is NOT what the United States of America stands for.  Rather that it  stands for those like Eric Cecil and Dale Hatfield who will fight for  what they believe is right.  And that it stands for those who are  willing to risk their well being in order to preserve freedom of 
opportunity for their fellow citizens.

And now, Mr. Cecil:

St. Google and the Dragons

I wrote the following this evening and cross-posted at my Mooreslore blog.

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Change is the one business constant. Those who embrace it succeed, those who resist it fail.

But change also dislocates.

Workers threatened by change organize unions and seek protection from government. The Luddite movement was a call by workers to smash the new textile mills that threatened their jobs.

Business calls against change are heeded more often, because they may speak the language of change and back it up with cash. In autocratic societies the cash is called a bribe. In a democracy it’s called a campaign contribution.

History proves that in every case, the public interest governments must follow is to embrace change. This is tough when the threatened industries have enormous political power.

Yet America has done this for 200 years.

• 19th Century Whigs embraced change as “public works,” ports, canals, and (later) railroads and telegraph companies that needed scarce capital.
• Turn of the Century Progressives embraced change as antitrust, worker protection and (perhaps most important) the income tax, which replaced the tariff as the funder of government and made America the world’s business leader.
• Mid-century Europeans forged free trade agreements, starting with Iron and Steel, evolving into the European Community. America embraced this movement through the WTO and such treaties as NAFTA.

Cars replaced railroads, oil replaced coal, suburbs replaced cities, and as the American blackboard was erased, rewritten and erased again, incumbents were allowed to wither away.

Today Google is the face of corporate change. Google has become a corporate stand-in for the changes the Internet makes necessary. Thus the incumbents have their knives out for it:

 

• Telephone companies threatened by the Internet’s end-to-end principle, in which services are defined at the edge, want government to give them power to define services within their networks that everyone – including Google – will be forced to pay for.
  
• TV and movie studios threatened by the fact that video can be passed as bits have demanded, and gotten, the power to halt distribution of bits they own.
  
• Newspapers threatened by the Internet’s power to organize everything and make it available through links want government to make Google (and then the rest of us) pay for “linking rights.”

These forces are made more powerful by the fact that networks, studios, and reporters have no new business models to replace what’s lost as Google and its followers (Level 3, Craigslist, eBay, Amazon) march forward.

From the Firehose

Gordon Cook extracted the following from today's traffic on the mailing list created on behalf of the $200 Billion Broadband Scandal.

The picture is not from the list. Instead it's from Steve Borgerding, who took it on a field trip with Melrose, Minnesota Troop 68 of the Boy Scouts.

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A failure of imagination to see that It is 'just' capacity, from Erik Cecil of Level3:

The deeper irony is, of course, that as intelligence moves to the 
edge, pipe suppliers appear to be nothing more than utilities.   
Which, in all fairness, brings up an issue that I struggle with on 
behalf of my employer - how in God's name does one attract money for 
a build when all you are building is connectivity?  The backbone 
industry got crushed by excess capacity and the Bells are doing 
everything they can without regard to their own credibility to make 
sure that the same thing doesn't happen at the edge. [Cook Report,   
"Turning the edge into scarcity."]

This points to an even deeper irony - it is because of their fear 
that they have nothing of true value to sell that the fact of the 
matter - it is just capacity - will eventually become glaringly 
obvious to all.  But again, investors are driven by the same fear.   
So it is in many ways a self-fulfilling prophecy.  Typically those 
situations really have to crater big before those invested in such 
delusion wake up - viz. the Abramoff  scandal in DC.  We are probably 
years away from the full public perception of that, but maybe not.   
Like a bamboo tree - which grows for 4 years showing barely a shoot 
and then upon the 5th year rockets up 80 feet in less than 6 weeks, 
perhaps this has been growing for a very long time and may rocket up 
very quickly for reasons anticipated and unanticipated.

So coming full circle if I may, perhaps the greatest failure of 
politicians, regulators, businesspersons, lawyers, technologists and 
the public at large is a failure of imagination.   Perhaps we've 
failed to imagine a world where incentives (and disincentives) are 
aligned and drive people to do the right thing. Having spent 
the past 10 years of my career  focused solely on enabling the 1996 
Act, one thing is certain - it is not easy to force business or 
people or business to spend money.

The Bell (former / present and substantially similar) companies - as 
evil as they may appear and act at times - are extraordinarily adept 
at aligning their actions perfectly with the incentives and 
opportunities afforded by the current regulatory environment.  And 
regardless of where the next generation of regulations end up, I've 
seen little yet that convinces me they aren't already well ahead of 
that curve and likely control substantial portions of the outcome.   
The rest of the industry survives by exploiting the gaps in their 
business plans and strategies, until, as you point out, they are 
consumed by their larger rivals.

How We Got Here

How did all this intellectual firepower (and typing skills) get together on one blog?

Gordon Cook explains:

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In the first few days of January Bruce Kushnick asked me if i would  consider placing my private 'symposium' mail list behind his efforts  to get the story behind his $200 Billion Broadband Scandal drummed  into the public conscience.  I agreed and reached out to a bunch of  new people as well expanding the list from 65 to 108 members.  It is  a private list where contributors give me the right to publish what  they write.  But they also own their own  words and are free to blog  anything that they contribute.  I am happy therefore to be known as  the instigator of the effort to publicize Bruce's cause which is  really our cause as well. 

DSL Reports Nots $200 Billion Scandal

Broadband Reports flagship DSL Reports has spawned an item about the $200 Billion Broadband Scandal. It's located at.

It's reprinted below in full:

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Do American Telcos Owe You $2,000? - Kushnick attacks bells for fiber-optic trickery & deceit

According to the baby bells' least favorite critic Bruce Kushnick, the telcos have received more than $200 billion in tax cuts and other incentives to provide promised symmetrical fiber-optic connectivity to millions of Americans - connectivity that never arrived (though the incentives were never repaid).  According to Kushnick, he believes each American consumer is owed roughly $2,000 for services never rendered. 

Says Kushnick of his new report: "It is a tale of deceit, fraudulent data and gaming the regulatory system using fake consumer groups, biased research firms and campaign-financed politicians to control everything from the FCC, to Congress, to the state legislatures and commissions to vote for phone-company-financed laws that are not in the public interest."

A long discussion thread follows. Well worth reading.