Dana Blankenhorn

Routing Around The Bells

The evils of the Bell monopoly continue to get worse-and-worse.

Yet I remain optimistic. But first, let me vent a little.

So-called "broadband" users are still paying the same price for the same speeds as a decade ago, while the costs of actually moving the bits have fallen by more than a thousand-fold. Koreans consider our "broadband" a joke. And our wireless situation is no better. Every new auction is dominated by the same frequency hoarders, so we still pay $100 or more a month for what's essentially narrow-band wireless service. And nothing has been added to the unlicensed 802.11 spectrum, nor is it likely to be.

With the Bells facing a Congress which has other, more pressing business, and little appetite for more subsidies, it's getting what it wants from the states, where officials are incredibly ignorant. No one seems to understand that the AT&T push into "cable" is just an excuse not to liberate any bandwidth for true broadband Internet service.  Everything gets defined as a "service," with  an added monthly fee whether you use it or not, and nothing gets better, as it should under Moore's Law.

I'm facing nothing but crap from my cellular provider, Sprint. They only sell, they never service. They hid a $10/month "data" charge on my camera phone, they sold me a phone their other stores knew was a piece of crap (Motorola, you can go Chapter 7 now) and I'm paying $160/month for services I was told would cost $90/month, when their junk fees are added in. Trying to change anything in a store is impossible -- you have to go on-hold for an hour to talk with anyone. And this is the only national carrier alternative to the AT&T-Verizon duopoly -- it makes me want to spit.

Yet I remain optimistic. Here's why.

Destroying Net Neutrality, Piece by Piece

Net neutrality, a cause I support wholeheartedly, is already (in many ways) a myth.

It's a myth because, since the Web was spun, we have encouraged third parties to act as censors of the resource, with no controls and no accountability. Programs like NetNanny claim they're just filtering out porn, but there's really no way to tell what they're filtering, save by trial and error. (And since NetNanny is now part of ContentWatch, which uses what it calls "dynamic filtering," there is no way to produce a list.)

Here is an example. It's a block against the DailyKos political community, put in by Motorola's Netopia unit, on a wireless hotspot it is managing. I happen to know this company, and centralized censorware has been a part of its 802.11 business from the beginning. Its original business model was to sell censoring as an upgrade, called parental controls, on wireless routers it would install on behalf of phone companies.

No Longer Number One In Tech

The U.S. has lost its place as the leading technology nation.

That's the news from an annual survey of technology policy known as the World Economic Forum's "networked readiness index," which previously had the U.S. on top.

Now we're 7th. Denmark, Sweden, Singapore, Finland, Switzerland and the Netherlands all scored ahead of the U.S. in the annual survey.

Ironically these countries, and others, have spent the decade copying the tech policies the U.S. had in the 1990s. They have broken up telecomm monopolies, pushed competition for all forms of bit traffic, and encouraged rapid write-offs of all investments.

The committee producing the report was headed by Chilean economist Augusto Lopez-Claros (left, above). This is ironic because throughout the 1990s Republicans held up Chile's forced privatization under Pinochet as a model for Latin American development. In this decade, Chile's performance has not been as good.

This Week's Clue: Promises Gone Missing

The following should be called Vo. 11, No. V of a-clue.com, my free weekly e-mail newsletter. Enjoy.

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Where does e-commerce stand, 13 years after the Web was spun? (Picture from SercomGroup.)

I date the beginning from 1994 because that's when I first started covering the field, at the old Interactive Age Daily.

The promise was e-commerce could cut costs by eliminating middlemen, and expand choices by making one-off merchandise profitable.

In some ways this has been achieved. Middlemen have been eliminated. E-commerce has marched like a locust swarm through the travel market, the video market, the music market, the book market. But the savings have mainly been pocketed by new, larger merchants based far away (Amazon) or re-captured by the sellers who treated the Web as the middleman (Southwest Air).

The Long Tail does a better job than I have in detailing how choices are expanded through the Web.  Sites like eBay are great for one-off goods, bringing the maximum number of buyers in, killing another traditional market (auction houses) in the process.

But in terms of technology we could be much, much further along than we are. Internet-based systems let you manage demand from the point of supply and it has been traditional merchants, like Wal-Mart, not online merchants, who have taken advantage. As a result rather than promoting diversity and local provisioning Internet technology has actually promoted the opposite, sameness and foreign provisioning. So far.

What are the two key factors slowing Internet commerce in 2007? It comes down to two words.

This Week's Clue: Final Five: Always On

I am folding A-Clue.Com into this blog as of January. To celebrate the end of 10 years in e-mail publishing I am posting 5 essays covering the letter's main topics.

This week I talk about The World of Always On, an idea I considered "the next big boom" after finishing work on my Moore's Law book, but one that has yet to come to pass. Enjoy.

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By all rights we should be in the middle stage of a tech revolution as important as the commercial Internet itself.

I am talking here about what I call The World of Always On. (To the right is the current state of the art in active heart monitors.)

The vision is simple. Extend applications into the air by using 802.11 WiFi routers as application platforms. Use sensors and motes to collect data on our bodies, our homes, and our property, creating new valuable applications that live in the air. Use Internet standards to let you control these applications from anywhere.

I first began exploring this idea in 2003, after the dot-boom went dot-bust. Having explained (for myself if no one else) how progress was inevitable with Moore's Law, I sought out the new direction it would take.

I was struck by two things. First, how small powerful chips were getting, with line widths reaching the nano-level. Second by the need for people to "age in place," and the monitoring requirements of that.

I posited a true "killer app," a heart monitor linked to an 802.11 router. Perhaps, I speculated, it might have a bluetooth link to a cellphone, so the whole thing could live wherever the user went? At the same time, I noticed, Intel was doing fascinating work with Alzheimer's patients, creating multi-chip systems that could identify when a patient was acting confused, and when they were not, lowering the load on care-givers.

A Real Turning Point on WiFi

The FCC's decision refusing to give the owners of Boston's Logan Airport exclusive control of WiFi frequencies could be a real turning point.

On the surface, as Glenn Fleischman notes, the decision merely repeats existing rules, asserting FCC control of the frequency spectrum. But this wasn't as clear-cut a case as it seems. Massport (which owns the airport) was the landlord of Continental Air (which put in a free hotspot competing with Massport's paid franchise).

But consider the implications:

1. Property owners can't sign broadband "exclusives" and force renters to pay for access.
2. Cities can't sign WiFi "franchises" (like Google's in San Francisco) and force others off the frequencies.

Always-On Comes To China

Three years ago, I wrote often about The World of Always-On. This consisted of wireless applications which lived in the air, sensors and motes that could collect data from your home, your yard, your stuff, even your body and evaluate it using your WiFi connection.

It didn't happen. I guess I didn't shout loud enough. (Yes, I know. This is actually the cover art to a Blink182 song.)

Or did it? Jude  Jake Ludington has been to Demo in China and comes back with a report on an outfit called Beijing Perfect Sky Information Technology Co. Ltd.

Here is how he described it:

The system monitors health data for cardiogram readings, pulse, blood pressure, body temperature and a number of other factors to track changes in vital signs. Data is sent wirelessly to a server that tracks patient information to check for any changes that represent an out-of-normal condition. In the event of a dramatic change in health status, the service will alert physicians, family and anyone else scheduled to be notified in an emergency.

Bingo! This is an Always-On medical application, which I called a "killer app." The patient wears sensors which take regular readings. The WiFi network sends these to a computer for analysis. When an alarm condition exists, a text message can be sent to a designated person, or a list of persons.

The Bells Will Take Nothing (And Like It Very Much)

By trying for a complete telecomm overhaul, under a bill called S.2686 Sen. Ted Stevens has managed to stall the debate about net neutrality, the Bells’ efforts to get a national cable franchise, and everything else.

The likely result is no bill at all will come out. Unless there’s something from the Senate, there can be no conference. Thus no telecomm bill.  The clock is ticking,  the campaign trail is calling, and Stevens is still locked in a committee room, with hundreds of amendments to get through. No time for a floor fight.

The Bells will say this is bad, terrible in fact. They will then be called upon, by Stevens and others, to put up whatever is needed to re-elect the Republican Congress. And they will likely put up enough to be a power should the Democrats win.

So who wins?

The Bells. (That's Ed Whitacre of AT&T, nee SBC, at right.)

By having the FCC expand the “Universal Service Fee” and impose it on Voice Over IP, the Bells gain new subsidies without any obligation to be fair to their competitors. Remember, net neutrality language was designed to keep the Bells from doing things. No bill means they can do what they want.

But don’t despair. The bill Stevens was working on was worse than nothing. As Bruce Kushnick notes, the Stevens bill would increase USF fees – all of which go to the Bells – by 233%.

And what would the Bells do for that money? Nothing. They’ve been making money by doing nothing for a decade. Qwest was paid to wire Arizona schools for broadband  and did nothing. The same promises were made in Hawaii, in Alaska – everywhere the Bells wanted to consolidate, and buy one another out, they made big promises of fiber everywhere.

They built none of it.

10 Reasons for the Lack of Competition

On Dave Farber’s list today Gerry Faulhaber of the Wharton School (right) asked an intriguing question concerning wireless broadband.

Where are the competitors?

Five years ago I spent a lot of time covering Wireless ISPs, entrepreneurs (mostly in rural areas) who were using 802.11 to deliver broadband service, often against the Bells.

Given the political contempt people feel for the Bells, there should be more of them. Why aren’t there?

Here are 10 reasons:

1. Uncertainty. The Bells have been using the agencies of government to change regulations and drive competitors out of business for several years now. Their monopolies are actually subsidized, through programs like the Universal Service Fund, which by law must flow to the Bells if the Bells want the money.
2. Backhaul. In many rural areas the Bells offer the only backhaul for a WISP, and they charge prices geared toward keeping their monopoly for it.
3. Price Wars. As with cable “overbuilds” in the 1990s, incumbents can drop prices and improve service where competition exists, subsidized by captive monopoly customers.
4. Frequency. If the FCC would open up more unlicensed spectrum, instead of selling every hertz it sees to the incumbents, we’d have more WISPs.
5. Power limits. The FCC has uniform power limits for unlicensed equipment, which must operate at microwave frequencies. If rural areas had higher limits, WISPs would benefit.
6. Bandwidth Hogs. A very small minority of WISP customers, mainly engaged in music and/or video hoarding, pushed the industry toward bandwidth limits, limiting their competitiveness.
7. Rural Industry. The present WISP industry is very rural. Thus the suppliers concentrate on rural WISP problems. Economics of scale have not yet been brought to bear on the mesh gear that would fit suburban or urban environments.
8. Municipal Broadband Most companies that want to provide WISP services in cities are trying to get concessions in order to become sole providers.  This discourages truly competitive entrants.
9. Sponsors. The owners of competitive backhaul – Level 3 and Google – have not been aggressive in enabling mesh technology sales to entrepreneurs.
10. Wall Street. Bankers don’t want to bank competitive broadband when they see the low profits being reported by the monopolists.

How the Bell Monopoly is Maintained

The Bell monopoly is maintained by claiming rural areas must have a "carrier of last resort," and only the Bells can provide this service.

This is a lie.

The latest example of this lie in action is a "paper" from the so-called National Exchange Carrier Association (a rural phone group that shills for the Bells -- think of them as Baby Bells).  Titled "The Packet Train Needs to Stop at Every Door,"  it makes the same tired argument that rural communities can't get modern infrastructure without subsidies from captive urban customers.

This is a lie.

I can get these people fast Internet service in the time it takes to drink this beer.

Want to know how?