Abstraction

Somewhere toward the bottom.  I didn’t mean wireless carriers exclusively, my point was that all operators have an inherent advantage over content providers.  But point made for me, I suppose…

Finding telecoms link in the value chain.

Interesting post in Financial Times today.

Personally, I think that net neutrality will force operators to innovate a bit — this isn’t about discriminating against heaviest users, it’s about changing the business model from flat rate all-you-can-eat access to one in which heavy usage isn’t a problem that requires random throttling. Operators should offer access that does NOT include video, VOIP, or P2P unless the user pays an extra fee for access to those services (for example).

Qualcomm, the world’s biggest maker of chips for mobile phones, has entered the net neutrality debate in the US with its chief executive calling for heavy data users to be discriminated against as wireless networks reach capacity.
Paul Jacobs’ call at the CTIA wireless industry conference in San Diego came a day after Julius Genachowski, head of the Federal Communications Commission, warned that there was not enough room available on the airwaves for the “explosion” in wireless data traffic.

Mr Jacobs said he had given the FCC chairman his views on “traffic shaping” as one solution to what the FCC describes as a “looming spectrum crisis”.

He described traffic shaping as “the ability to say: ‘let’s be fair, this person’s moved a lot of data, this person’s used a little’, if they’re paying the same amount, then the person who’s used less will get more access”.
John Donovan, AT&T’s chief technology officer, told the conference that smartphones and the applications they ran had caused a 5,000 per cent increase in data usage over three years.

“We will need to manage our way through data-hungry applications or devices on our network that would degrade the experience for others,” he said.

Supporters of net neutrality say there should be no discrimination on a free and open internet.
Internet providers should not block, speed up or slow down web content based on its source, ownership or destination.

Mr Jacobs said this “more radical notion” of net neutrality was born out of the internet bubble and the notion that bits of data were free, when in fact they had now become very expensive for providers.
“Regulators may not know that, the lawmakers may not know that, and so we need to make that clear, and it’s very obvious that we are pushing the limits of the amount of capacity we have.”

Mr Jacobs said it would perhaps be too intrusive to go down the route of saying one internet service was fine on a network and another was not, but operators needed to be able to manage their networks.
In his speech, Mr Genachowski had said that the FCC had not yet decided what measures to take to preserve an open internet. Proceedings would begin this month to establish “rules of the road”.

He conceded that mobile had unique congestion issues and the last thing the FCC wanted was to impose “heavy-handed and prescriptive regulation”.

http://www.ft.com/cms/s/0/cf650104-b463-11de-bec8-00144feab49a.html

I just completed a guest blog post at Telco 2.0 pointing out that the SLAs involved in new business models, coupled with the fundamental driver behind those business models (bandwidth as a scarce and valuable resource), will put wireless operators in a position of allocating resources selectively.

That is, in times of high demand, a choice must be made as to who gets connectivity and who does not.

I argue that this will require operators to rethink their existing subscriber model, because a subscriber by definition has a right to access t he network. Put another way, the existing subscriber model precludes new business models because it eliminates operator flexibility in terms of allocation of bandwidth.

The solution is to eliminate the subscriber model, and instead bundle connectivity directly to services. People will purchase a voice service, or an email service, with associated connectivity (and SLA) bundled with it. Ad hoc access for general browsing will be provided only if bandwidth is available after servicing access connected to an SLA.

To be fair to subscribers, and to spur innovation and competition, ad hoc access must then be open — people will connect to whatever network is available at the time. This has a number of implications:

1. Any given subscriber can connect to multiple networks simultaneously, e.g. network A for email and network B for general browsing
2. Operators can find niche service areas — for example, some operators might specialize in providing ad hoc access during busy hours
3. Account management for ad hoc access will require federation. All subscribers essentially become roamers, with the HLR information maintained in a clearinghouse.

I’m curious to see reaction to this piece…

Great story in NYT today on the effect the iPhone is having on the ATT network. Directly related to my argument that wireless bandwidth is as a scarce, valuable resource will be the foundation of next generation business models.

Killer quotes:

[Because of network capacity being sucked up by iPhones] The result is dropped calls, spotty service, delayed text and voice messages and glacial download speeds as AT&T’s cellular network strains to meet the demand. Another result is outraged customers.

Just wait till all operators offer iPhones. And a full netbook line. And more dongles. And enterprise services in the cloud.

AT&T says that the majority of the nearly $18 billion it will spend this year on its networks will be diverted into upgrades and expansions to meet the surging demands on the 3G network. The company intends to erect an additional 2,100 cell towers to fill out patchy coverage, upgrade existing cell sites by adding fiber optic connectivity to deliver data faster and add other technology to provide stronger cell signals.

Wonder what the ROI will be on that 18 billion…

http://www.nytimes.com/2009/09/03/technology/companies/03att.html

Take a look

Not to beat this drum too loudly, but cloud computing is among the one or two key truly significant changes that affect the telecom industry, dramatically expanding a business’ reliance on the network and dramatically increasing data volume — particularly data volume through cell sites as roaming employees access documents and other business content heretofore maintained locally.

The other significant change, as I’ve mentioned ad nauseam, is telecom’s move completely away from business models based on services (such as voice), toward models based on connecting developers of content/services and consumers of this content.

Study: IT shops have cash in hand for cloud computing: ”

More data showing showing growth of cloud computing. Most relevant to telecom is this growth in the context of Netbooks, and the resultant deluge of data volume.

Article in PC world talks about HTML 5 in the context of the Google announcements today (http://tinyurl.com/mk8krj)

HTML5 is a standard that is still being developed and is likely to remain so for several years. Its focus on running applications within the browser is an important driver of interest in cloud computing, where applications live somewhere off on the Internet and are delivered by the browser.

The focus of future browsers will shift from “going places” to “doing things.” This will be a boon to free operating systems, which will increasingly be able to hide themselves under the browser user interface. While Windows and Mac OSX won’t go away overnight, the pressure on them will be to innovate beyond the browser, perhaps through a common set of extensions for HTML5 applications to use.

The key takeaway is that the operating system is in the cloud, in addition to office applications and everything else. Mobile operators are the most important — and to date largely unsung — players here; it is they that have the most to gain (or lose, if they succeed at screwing it up).

You’ve heard it before: remember Sun’s campaign that the “Network is the Computer. ” Back in 1995 Larry Ellison was predicting that Network Computers would replace Personal Computers as the computing equipment of choice. And Netscape said for years that the browser was the “next OS.”

The difference now is that a viable broadband mobile infrastructure is in place. Network technologies have matured, not from a technological standpoint (they’ve been mature from some time), but from a social standpoint. The network is now, finally, ready to realize it’s place as the computer because people’s lives are integrated with it more deeply than even Larry could dream more than a decade ago.

From Unstrung: http://www.unstrung.com/document.asp?doc_id=176867&

T-Mobile and Orange are both saying that LTE has many technology hurdles to overcome before it is viable for their networks (Verizon and NTT’s aggressive plans notwithstanding).

The operators’ concerns with LTE include: support for voice services; the impact on backhaul capacity; intellectual property rights; the lack of standardization for self-organizing networks (SONs); and the lack of spectrum. And those are just the chief conerns.

In addition, T-Mobile and Orange, along with other European carriers, are scarred by the disastrous early days of WCDMA (3G), when they spent billions of euros on licenses and hyped 3G downlink speeds beyond reality, leaving customers and investors sorely disappointed. They don’t want to repeat those 3G mistakes in LTE, especially in the midst of a global financial crisis.

In my mind, this reinforces my contention that mobile bandwidth will quickly and inevitably become a finite resource in the face of unprecedented demand. Business models will change from a flat-rate all-you-can-eat (or all-you-can-eat-up-to-a-point) to more complex and nuanced charging that includes dynamic tiering, utility-style billing, and so on.

I’ve read a number of reports speculating about mobile data growth lately and it strikes me that they typically omit what I believe is the most significant evolution affecting mobile data. iPhones and similar are great and have certainly accelerated the market, but they are nothing compared to the impact (and opportunity for network policy vendors) represented by netbooks with embedded cellular access.

Consider: Right now, AT&T is selling a range of laptops in Northern California at Radio Shack for $49.95 (that’s not a typo — 50 bucks; see http://tinyurl.com/oagx33) with a 2 year contract for flat rate data with a monthly cap. Netbooks are now the most popular computer type on the market (Intel expects sales to double in 2009 http://tinyurl.com/djxdrd).

Too, there’s the recent announcements of businesses standardizing on cloud office applications like Google Apps. Imagine the savings a large enterprise can enjoy by standardizing on netbooks. Laptops so cheap they are almost disposable. All data saved safely in the cloud.

Suddenly you have lots of torrent sessions and Skype calls routinely supported through the mobile network. Huge increases in youtube traffic. Hulu. Even parental control becomes much more meaningful as parents worry about inappropriate content accessed via the laptop much more than a phone.

Suddenly, despite usage caps, the GGSN is supporting data volume like no one could ever dream, with smartphone traffic a minority. Some reports say this is a long range play. We’ll see. I think it’s going to explode as we watch. And vendors that tie licensing terms to usage/seats/transactions or similar, will watch revenue explode with it…

Article in the WSJ today talks about the network impact of the iPhone: http://online.wsj.com/public/quotes/main.html?type=djn&symbol=t

Users of iPhone download games, video and other Web data at two to four times the rate of other smartphone users, according to comScore. Yet AT&T charges iPhone subscribers the same fee of $30 a month for data that it levies on other smartphone customers. And aside from restricting certain activities, like file sharing, AT&T doesn’t limit how much data can be downloaded…

Too, the iPhone is just the tiny first drop of a huge deluge that will be caused by access dongles and netbooks. The situation is pretty clear: network resources are finite; demand upon them is (as good as) infinite.

A message to those folks philosophically opposed to any kind of network management: something’s gotta give. If access remains unrestricted, physics will take over and reduce everyone’s throughput and QoS to a trickle. It’ll be a small comfort to know that the occasional packet you receive is officially “neutral.”

The net neutrality issue as currently framed is a red herring anyway. Subscriber’s don’t care if their bandwidth is restricted, as long as they have control to remove the restriction. The water supply in my sink is restricted, but I can remove that restriction at any time (for a fee) by turning a tap. The more I turn the tap, the more I pay.

And that’s really the key — allocate network resources according to those willing to pay for it. Everyone wins.

I’ve always thought that a real evolution of advertising is moving from an inferred model to a interaction model; that is, instead of inferring qualities about a person (based on demographics, buying habits, etc.), it’s much better to involve people directly.

I did a interview recently with Light Reading that touched on this topic.

http://www.lightreading.com/document.asp?doc_id=172485

Salient details to save yourself the jump:

“One of the most powerful aspects of subscriber profiles is maintaining a subscriber’s real-time context, and using that context in concert with personal preferences to drive policies across networks,” says Chris Hoover, Openet’s director of Product Management. “In this sense, the subscriber profile forms the foundation for next-generation interactive services. These are services customized based on an aggregate understanding of who the subscriber is, what the preferences are, and real-time context in which the subscriber is moving – without regard to network or device.”

Openet’s Hoover points out that, historically, advertising has tended to be targeted on the basis of inferences made from proxy data – basic demographics, for example – rather than positive identifications of definite interest. Such interest identification is near-impossible to do indirectly, as it is difficult to infer that a subscriber is, say, allergic to cats, or avoids alcohol [ed. note: or avoids alcoholic cats...], or is thinking of buying a new car. Behavioral targeting based on the inferential analysis of past behavior helps, but there is always a risk that the inference will be wrong – or even offend.

“But there is actually a new opportunity, which is to bring the subscriber into a bidirectional mode,” Hoover says. “By including the subscriber as part of the network profile – essentially, the subscriber as an active network element – the profile can be much more accurate. This isn’t, however, a profile that is built solely by the subscriber, but rather in concert with the subscriber, and including inferential data.”

“But there is actually a new opportunity, which is to bring the subscriber into a bidirectional mode,” Hoover says. “By including the subscriber as part of the network profile – essentially, the subscriber as an active network element – the profile can be much more accurate. This isn’t, however, a profile that is built solely by the subscriber, but rather in concert with the subscriber, and including inferential data.”

David Sedaris is hilarious, and he had a fantastic essay on air travel in the New Yorker recently. I particularly liked this passage, about traveling in business class. It so perfectly parallels my experience:

“May I bring you a drink to go with those warm nuts, Mr. Sedaris?” the woman looking after me asked—this as the people in coach were still boarding. The looks they gave me as they passed were the looks I give when the door of a limousine opens. You always expect to see a movie star, or, at the very least, someone better dressed than you, but time and time again it’s just a sloppy nobody. Thus the look, which translates to “Fuck you, Sloppy Nobody, for making me turn my head.”

I feel exactly that way whether I’m in coach (most of the time) or business (the occasional upgrade). Walking to my coach seat I’m always thinking about how much more comfortable these slobs in business are going to be for the next 12 hours or so, damn them. Likewise, I feel a vague sense of guilt if I’m sitting in my business class seat. I’m thinking “this trip is going to suck *so much more* for all of you.” Certainly it doesn’t help that I epitomize the sloppy nobody as I sit there in my fleece listening to an iPod while other business travelers whisper importantly into their Blackberrys.

Interesting article in Scientific American about a study that shows the brain is hardwired such that people fit into two behavioral categories. (More likely a continuum, but for purposes of illustration I’ll keep it straightforward).

In one category, people are predisposed to alter their behavior based on new information. In the other category, people are less responsive to new information, and tend to maintain the same behavior. Although the context of the study was political (this isn’t a political blog), I think that the study is equally interesting from a business perspective as well. A quote:

Amodio says that the anterior cingulate cortex (ACC), a forebrain region, “serves almost as a barometer for this degree of conflict.”"People who have more sensitive activity in that area,” he notes, “are more responsive to these cues that say they need to adapt their behavior,” reacting more quickly and accurately to the unexpected stimulus. On average, people who described themselves as politically liberal had about 2.5 times the activity in their ACCs and were more sensitive to the “No-Go cue” than their conservative friends.

“They are more sensitive to the need for change and more sensitive to the need to change their behavior,” Amodio says about the politically left-leaning subjects.

At an overall statistical level, I suspect that having a disposition one way or the other is not a good predictor of business success. All other things being equal, two entrepreneurs of opposite dispositions have an equal chance to succeed at the beginning of a new venture. Where it does matter is how a person copes with the unique challenges the new business will face.

For example, a person that tends to maintain the same behavior despite conflicting information may have the tenacity and drive to stick with a business plan no matter what until it succeeds. She will have the steadfastness necessary to keep the business moving forward even when everyone is a naysayer. In some business contexts, this is exactly the right person needed at the helm; the business would fail if the leader was endlessly second guessing and altering course.

On the other hand, a business plan into which people have poured blood, sweat, and tears, may be fatally flawed. In this case, the leader must be flexible enough to honestly appraise new information that conflicts with the existing business plan, and alter the course of the business based on this new information. Here, the leader that stubbornly maintained the status quo would fail.

How do you know which leader is right for which challenge? You don’t, except in retrospect. As Nassim Taleb points out, most of what happens in life is random; all you can do is put in your best effort. A person plays much less a role in their own success (or failure) than they give themselves credit for.

Concern over the stupidity of the average American has been a theme of intellectual pundits throughout my life, finding an initial voice in the early 60s with Richard Hofstadter’s “Anti-Intellectualism in American Life.” Since then media attention to the subject has ebbed and flowed over the years. During the early 80’s, when I was in high school, I heard constantly about the fantastic levels of moronism achieved by my peers, many of whom, it was said, struggled to find the United States on an unmarked map. Japan was opening mocking our engineering ability, and America’s competitive position seemed to sink along with our math and science scores.

For my part, I had never (to my knowledge) met someone that couldn’t identify major countries on a map; I thought it would be interesting, in a slowing-down-to-look-at-a-car-wreck kind of way, to speak with someone so fantastically stupid. In some way, I expected such a person to consider their ignorance an aspect of their personality: “I’m Sam, and I play the guitar, and I can’t find the United Kingdom on a map or describe the importance of the first amendment.”

Sadly, stupid people don’t often self-identify with their stupidity, and I never got the chance to meet my representative moron. Turns out I didn’t need to, as the election of George W. Bush and the political rise of evangelical Christianity has put a good number of them on the world stage, free to be gawked at. The election also ushered in a new cycle of intellectual hand-wringing, which has risen in pitch as the gang of Idiots seek to ensure the country is well and truly ruined before they leave office and go back to their homes and their churches.

The latest furlow: last week Susan Jacoby’s “Age of American Unreason” was released. If the review at Salon is any indication (I’ve yet to read it myself), I will probably think it’s a great book, because I’ll strongly agree with it:

The chief manifestations of this newly virulent irrationality are the rise of fundamentalist religion and the flourishing of junk science and other forms of what Jacoby calls “junk thought.” The mentally enfeebled American public can now be easily manipulated by flimsy symbolism, whether it’s George W. Bush’s bumbling, accented speaking style (labeling him as a “regular guy” despite his highly privileged background) or the successful campaign by right-wing ideologues to smear liberals as snooty “elites.”

Unable to grasp even the basic principles of statistics or the scientific method, Americans gullibly buy into a cornucopia of bogus notions, from recovered memory syndrome to intelligent design to the anti-vaccination movement.

Ms. Jacoby also has an op-ed in today’s Washington Post:

It is almost impossible to talk about the manner in which public ignorance contributes to grave national problems without being labeled an “elitist,” one of the most powerful pejoratives that can be applied to anyone aspiring to high office. Instead, our politicians repeatedly assure Americans that they are just “folks,” a patronizing term that you will search for in vain in important presidential speeches before 1980.

Truth be told, I’ve myself accepted “elitist” as a pejorative, one that I use almost unconsciously in a self-deprecating way. The main culprit, according to Jacoby, is the rise of video culture and correlated decline of reading

First and foremost among the vectors of the new anti-intellectualism is video. The decline of book, newspaper and magazine reading is by now an old story. The drop-off is most pronounced among the young, but it continues to accelerate and afflict Americans of all ages and education levels.

Not that Jacoby’s effort matters. As Laura Miller describes in her Salon review, she is only preaching to the choir. I’ll buy her book (I’ll even read it), but it’s really an exercise in narcissism in the sense that I know the book will just reinforce my own opionions. Just think: I’ll be even more elitist.

I travel to Southeast Asia on business every so often. If I have a choice, I’ll always connect through Changi airport in Singapore.

There are lots of nice things about the airport; it’s got a nice transit hotel, a gym, amazing shops, and reasonable food. But there are some things that set it apart. Top five reasons I love Singapore’s Changi Airport:

Reason Five: It’s got some beautiful areas. Here’s the orchid garden, which surrounds a koi pond complete with dabbling brook, nice wooden bridge and huge voracious koi. To give you an idea of how big this “meditation area” is, the woman at the left of the photo is sitting at the edge of the koi pond with her feet dangling above the water:

Reason Four: Free video games and free WiFi(!) throughout the airport. Lots of geeky types congregating in the XBox area, so of course I didn’t stay long.

Reason Three: The bizarro Asian soda you can get at the airport 7–11. Note that the Bird’s Nest Drink by Super brand features “The Best Good Taste,” as opposed to the inferior good taste offered by other, lesser, Bird’s Nest Drink distributors.

Reason Two: Free Movies, playing 24 hours a day in a real theater. “It’s Pat” was playing when I took this picture. Had I stuck around, I could have caught “First Blood” followed by “Porky’s.”

And the number one reason Changi is the best airport in the world:

Here’s the kicker: when I took this picture, there was no one monitoring the whiskey tasting station. Just a bunch a booze and a stack of paper cups. I’m not kidding.