Mobile Musings

Information Making Itself Free

2012-12-02T18:25:00.000-05:00

“Information Wants to Be Free” is the oft-heard rallying cry of the Internet cognoscenti. Pick up the paper over the last few days, read about the Syrian government’s shutdown of the Internet and mobile networks, and a story begins to emerge as to just how far technology has come in making information free.

This graphic from Internet delivery network Akamai tells the story of old information control techniques applied to the new uprising in Syria. On November 29, at 10:30 in the morning, the Syrian Internet was shut down.

The Syrian Minister of Information blamed “terrorists” for disrupting service. Another official blamed unspecified “technical problems.” The prevailing assumption, however, is that Syrian President Bashar al-Assad ordered the shutdown in an effort to deny opposition forces the ability to coordinate their activities and keep the outside world informed. Such a shutdown was possible by simply altering the routing tables handling connecting traffic. Mobile phone service was also shut down in selected areas.

It is a tried and true approach to controlling government opposition. Both Moammar Gadaffi in Libya and Hosni Mubarak in Egypt shut down mobile and Internet service as they struggled to cling to power. But as Egypt and Libya both proved, it is a 20^th century response whose effectiveness is limited by the multiple paths of 21^stcentury technology.

Shutting down access to information is a response as timeless as repression itself. During the original Information Revolution of the 15^th century the Church tried to throttle printing in order to stop the spread of the Reformation and the Renaissance. The practice continued as technology introduced new networks into the centuries that followed.

During the Cold War the control of information was essential to Soviet domination of the people. Over 20 years ago, in the office of the president of MTV Europe, I saw a photo on the wall that graphically illustrated this reality. In the picture a Soviet tank stood in front of a television station in a Soviet republic. As the Iron Curtain fell, the struggle for control between pro and anti-Soviet forces in the republics often revolved around who controlled the broadcast airwaves. The photo of the tank in front of the TV station was inscribed by the ultimately successful insurgent leader – who became the republic’s president – to the effect that even a tank couldn’t stop the people’s desire for freedom of information (in this case he tongue-in-cheek joked it was “I want my MTV”).

In retrospect such repression seems so simple as to be almost quaint. Prior to digital networks mass communications was a one-way street and controlling the flow of information was as simple as a few soldiers and a tank at the TV and radio station.

Today everyone with a smartphone is a potential TV station. The ability of individuals to create both video and text commentary has eliminated message control. While it may be possible to shut down some of the networks that allow the insurgents to communicate, access to multiple pathways makes total information control significantly more problematic. The nature of information control has thus evolved. Controlling information dissemination Soviet-style is ultimately futile when information proliferates from a universe of interconnected users.

Key to the irrepressible multiplicity of information creators is a similar multiplicity of pathways. In the analog days the pathways were limited; control the printing press and the airwaves and you controlled the vast majority of information movement. The ongoing experience in Syria demonstrates, however, that, even when the Internet and terrestrial mobile networks are taken down, technology opens other pathways.

“To get around a near-nationwide Internet shutdown, rebels have armed themselves with mobile satellite phones,” the New York Times reports. For months, in anticipation of just the kind of shutdown now being experienced, the opposition has been smuggling in satellite phones and alternative communications equipment. Even old dial-up modems are being pressed into service to exploit the landline network.

The digital explosion of information creators and distribution networks is the continuation of a 500-year odyssey. It has been over half a millennium since Johannes Gutenberg picked the lock that had kept ideas sequestered and controlled. In the intervening centuries the struggle for control of information has been a constant. What we are seeing in Syria is the further stretching of the continuum that dates to Gutenberg. It is a heartening manifestation that as information pathways proliferate the flow of ideas and information cannot be constrained.

SPECIAL ELECTION HISTORY EDITION - GOTV 1864

2012-11-05T07:06:00.001-05:00

The debates are over. The political commercials are (thankfully) in their last runs. The presidential campaign action now moves to GOTV - Get Out The Vote - and the ground game to get supporters to the polls.

This year the presidential campaigns - particularly the Obama campaign - have focused substantial resources on a final GOTV push. But it pales when compared to another son of Illinois’ GOTV in 1864.

Abraham Lincoln was convinced he would not be re-elected. Ten weeks before Election Day he asked his cabinet to sign the outside of a sealed document they were not allowed to read. Inside the president had written, "This morning, as for some days past, it seems exceedingly probable that this Administration will not be re-elected. Then it will be my duty to so co-operate with the President elect, as to save the Union between the election and the inauguration; as he will have secured his election on such grounds that he can not possibly save it afterwards."

The week after Lincoln passed the paper around his cabinet meeting, the Democratic Party nominated General George McClellan as their candidate for president. "The People are wild for peace," New York's powerful Thurlow Weed had previously written Secretary of State William Seward, adding, "I told Mr. Lincoln that his re-election was an impossibility."

The president who described himself as, "more of a politician than anything else," responded with proven political tactics. Winning elections was about getting your supporters to the polls. Abraham Lincoln believed his support resided in the men who were bearing arms to preserve the Union. It was difficult for many of those soldiers to vote, however. In 1864 only 17 states had changed their procedures to allow soldiers to cast absentee ballots from the field. In five states - Indiana, Illinois, Delaware, New Jersey, and Oregon - soldiers could only vote in person at home.

Thus, Lincoln wrote General William Tecumseh Sherman, "The State election of Indiana occurs on the 11th of October, and the loss of it to the friends of the government would go far towards losing the whole Union cause. The bad effect upon the November [federal] election, and especially the giving the State Government to those who will oppose the war in every possible way, are too much to risk...Indiana is the only important state whose soldiers cannot vote in the field. Any thing you can safely do to let soldiers, or any part of them, go home and vote at the State election, will be greatly in point."

Although Lincoln’s request of Sherman specifically stated that the furloughed soldiers "need not remain for the Presidential election [the following month]," Indiana governor Oliver Morton wired the president the day after the state election (and the governor's reelection), "I most earnestly ask that their furloughs be extended by a special order until after the Presidential Election." The president wired Gov. Morton in response that he had specifically told Sherman those furloughed did not have to remain for the November election. "I therefore can not press the General on this point." Then, having established the record of being good to his word, Lincoln deftly opened the door to granting the governor's wish: "All that the Sec. of War and Gen. Sherman feel they can safely do, I however, shall be glad of."

Governor Morton seized upon the opening. In a telegram to the president and secretary of war he observed, "It is my opinion that the vote of every soldier in Indiana will be required to carry this state for Mr. Lincoln in November." There were similar exchanges from other governors.

It was not, however, just a matter of non-absentee states that concerned Abraham Lincoln. Thirteen of the 17 states that allowed voting from the field segregated those votes from the "home vote" at local polls. The president worried about the impact on the credibility of an election delivered by the vote of men under his command. Therefore, his administration worked to furlough soldiers in key electoral states so they could return home to cast their vote as a "home vote" rather than an "army vote."

The result of this effort was illustrated by General George Thomas's order, a week before the election: "By direction of the honorable Secretary of War you will grant furloughs to the 15th instant to all enlisted men belonging to regiments from the following States, who are in hospitals or otherwise unfit for field duty: Pennsylvania, Indiana, Illinois, Michigan, Wisconsin, Ohio, Connecticut, and Massachusetts...Transportation to be ordered to and from their homes." All told, thousands of soldiers were furloughed to return home to vote in battleground states.

Lincoln's GOTV worked. The president carried 55 percent of the popular vote and all but three states. In the hindsight of history Lincoln probably would have won without this extraordinary effort. Making history in real time, however, provides no such hindsight opportunity. On November 6, 2012 the presidential campaigns will be practicing just what Abraham Lincoln did in November of 1864, delivering votes to the polls.

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This is adapted from my book "Mr. Lincoln's T-Mails: The Story of How Abraham Lincoln Used the Telegraph to Win the Civil War (HarperCollins 2006)

A "Mobile Payments" Election in Our Future?

2012-11-02T12:04:00.002-04:00

Just two weeks before Americans go to the polls the mobile payments venture of AT&T, TMobile, and Verizon launched in Salt Lake City and Austin. Today Isis is about shopping; before long the technology it and other mobile payment platforms are adopting could reshape the democratic process.

At the heart of all the near field communications (NFC) platforms is a SIM card with a secure element that verifies the user. The secure element expands the SIM’s normal authentication and authorization with higher-grade smartcard-like verification.

Right now, everyone is talking about the “mobile wallet.” At this point it looks like a jump ball with multiple parties maneuvering for position. In addition to the U.S. carriers in the Isis consortium, GSM carriers throughout the world are mounting their own NFC push. The action is not limited to mobile operators, however; retailers Walmart, Target, Best Buy and CVS have joined the fray with their own MCX consortium. Visa and MasterCard both have their own initiative. And, of course, the highly-valued start-up Square, as well as PayPal, Google and Apple all have their own solution.

As if this isn’t enough confusion under the jump ball, there is a Cold War between mobile operators and Google’s Android and Apple’s iOS regarding who provides gateway and mobile transaction services. Carriers want their hardware SIM to control; Google and Apple want a software-based SIM that gives them the leverage. This is no small faceoff since whoever owns the SIM also owns the customer relationship.

It will be a while before all these competing forces are resolved and there is stability in the mobile wallet world. Regardless of the ultimate outcome, however, all this activity means there will be a major push to get secure SIMs into the market. That is when really interesting other things will begin to happen.

Repeatedly, mobile applications intended for one purpose have morphed into non-obvious user-driven applications. What began as a 25-pound car phone in the trunk morphed to replace landlines and connect more citizens of the planet than any network in history. What began as a control channel Short Messaging Service for network engineers was discovered by consumers who now send billions of text messages daily. What began as a secure mobile payments platform will no doubt follow a similar path into new, non-obvious applications.

Korean mobile operators, for instance, have become the agent to secure the government’s database of all citizens. Since Internet activity in Korea requires the user to input their national ID number, those numbers were ending up in Website databases. After one of those databases was hacked in 2011 the government and carriers developed an improved process. When a mobile user registers with their ID number the phone number is automatically matched with the registered user’s SIM and sends back a one-time PIN via SMS. The user then inputs the PIN to confirm their identity. In essence, the carriers have become the administrative authority that prevents hacking and keeps valuable personal information off of Websites.

In Estonia the same kind of SIM and PIN made that country the first in the world where it is possible to vote via mobile phone in national elections. Online voting using the national identity card’s chip and a special PIN had been available since the local elections of 2005. In 2011, however, that was extended to mobile devices. In that election 24.3 percent of the electorate voted electronically without going to the polls. The Republic of Moldova is reportedly about to roll out the same mobile voting capability for its citizens. In Brazil two weeks ago voters in Rio de Janeiro’s municipal election cast ballots by secure mobile phones.

Mobile voting in municipal elections or small countries (Estonia has 1.3 million population, Moldova 3.3 million) is one thing; the expansion into a nation of 300 million would be another challenge. The absence of a national ID card, like in Korea, Estonia and Moldova, is also an issue. Secure mobile devices, however, just might provide the pathway to a solution. When passports, credit cards, and other personal-identification functions use secure chips that are verified by a hard line connection, the extension into mobile devices can’t be too big a stretch.

This election in the U.S. has seen state legislatures enacting restrictive voting rules allegedly for the purpose of stopping hypothetical voter fraud. The ultimate anti-vote fraud measure may be coming to everyone’s pocket and purse. If a secure chip is good enough to verify our citizenship at passport control it should be good enough to authorize the democratic right of citizenship. If mobile wallet security is good enough to be used for secure financial transactions it should also be capable of providing secure electoral transactions.

The Rule of Network Change

2012-10-01T07:35:00.000-04:00

“U.S. Preparing for a Long Siege of Arab Unrest,” the front page of the New York Times proclaimed. The tragic killings of American diplomats in Benghazi, Libya and the spreading of unrest throughout the Muslim world “may presage a period of sustained instability,” the article warned.

Welcome to the new networked world. Strong regimes once controlled the streets by controlling the flow of information. Now, the anarchy of openness that is the Web replicates itself in the streets.

The open Internet which helped the Arab Spring blossom has this time delivered death and destruction. An incendiary video that normally would have had the effect of a tree falling in an empty forest now races around the world masquerading as if it were relevant.

New communications technology has done it again. For 600 years new network technology has challenged social stability by reshaping the nature of human interaction. At one time the inability of ideas to travel was a source of stability. That all changed when printing technology created the original information revolution. The network of 15^th and 16^thcentury printers churned out books, pamphlets, and broadsides that took ideas and opinion on the road. In the mid-19^th century the railroad accelerated that road-trip by introducing speed to the distribution of information. Then the networks of the 20^th and 21^st centuries turned on the electronic afterburners to make the flow of information widespread and instantaneous.

The current upheaval over a stupid video is the latest manifestation of the Rule of Network Change: that new technology replaces old structures before it is sufficiently mature to provide the requisite stability. It is no wonder that throughout history new networks have produced new wars as society struggled to find new bearings. Europe was plunged into 150 years of war after the printing press propagated ideas challenging the Holy Roman Empire. The American Civil War was the bloody consequence of the railroad and telegraph dismantling the geographic isolation that had allowed one section of the country to maintain its “peculiar institution.”

The physical insulation provided by geography has always been the first victim of a new network. The ideas of Martin Luther were not new, for instance; but previous innovative thinkers lacked the ability to meaningfully distribute their ideas beyond a local area. Just as the printing press propagated Luther’s ideas across the geography to literally set Europe ablaze, so is the Internet providing scope and scale to ideas and information that were formerly physically constrained. The distribution of a video was once limited by how many copies of the physical product the producer could afford to make and mail in the hope someone would notice. Today worldwide distribution for stupid cat videos or stupid religious videos requires only network access.

The openness of the new network overcomes the structural controls developed over time to oversee the flow of information. While this is positive when it ends the information control of repressive regimes, the same technology also means bypassing the controls once exercised in a free expression environment as well. The New York Times’ famous motto, “All the news that’s fit to print,” assumed an editorial role in determining fitness. To make the front page of the paper, or the radio or television newscast, required passing through the eye of not one, but two needles. The first was a decision about credibility and relevance, the second was the limited physical space available in the newspaper or newscast. The new network has made these tests quaint artifacts of a bygone era.

The new network is one without any needle eyes. Content vetting has been delegated to the consumer, and physical scarcity no longer exists. Google, Facebook, YouTube, or any of the Internet’s information sources are collectorsof information, not curators of information. “Fit to print” has been removed from the information equation. And when YouTube reportedly receives 72 hours of uploaded video every minute (!) not only is there no space limitation, but also the concept of information curation is simply overwhelmed.

The history of new networks is the story of how prevailing practices ultimately were forced to yield to the new realities of increased interconnection. In retrospect the changes imposed by history’s networks appear evolutionary and logical. In reality, they were chaotic periods of upheaval, pain and displacement. Amidst this chaos, however, these periods were eras of such great opportunity creation that historians end up giving them special appellations: the Reformation and Renaissance (printing), and the Industrial Age (railroad and telegraph). We have named our era the Information Age as though it is already in the history books. The violence in the Arab world, however, reminds us that we are living in the chaos and confusion of an historical period that is far from concluded.

In every previous network revolution new practices have developed to balance never-imagined technology with ever-required stability. Certainly, that will be the ultimate outcome with our new network as well. History makes it clear, however, that the path to such a solution is neither swift nor painless. We are moving from an ordered and hierarchical world controlled by hierarchical networks to a world in which distributed networks disperse power in a disorderly manner. With that change comes the need for judgment and acceptance, as well as flexibility and respect – whether the recipient is ready for them or not.

The Most Important Meeting You've Never Heard Of

2012-09-03T09:14:00.000-04:00

In December the nations of the world will gather in Dubai for the UN-convened World Conference on International Telecommunications (WCIT – pronounced “wicket”). The topic of the meeting is nothing less than the regulation of the Internet.

The Internet, coupled with mobile connectivity, has vastly improved the lives of the people of the world. It wasn’t until mobile came to the developing nations of the world that the first billion people could make a phone call (2001). Today there are six billion mobile subscriptions in a world of seven billion people. What’s more, most of the world’s young people will experience the Internet for the first time on a mobile device – opening new worlds of knowledge, commerce and opportunity. In response to these beneficial breakthroughs, some of the governments of the world have decided they should take control.

Under the auspices of the International Telecommunications Union (ITU) the governments of the world will review the international treaty known as the International Telecommunications Regulations (ITR). The last review of the ITR was in 1988 when the Internet was just aborning. The remarkable and reshaping growth of the Internet provides the excuse for the new review. What’s really afoot, however, is an effort by some nations to rebalance the Internet in their favor by reinstituting telecom regulatory concepts from the last century.

For countries such as India, South Africa and Brazil, for instance, WCIT is an opportunity to get back into the action, including grabbing a piece of the Internet’s revenue. In the good old days of the telephone network, nations (and their national carrier) could apply tariffs and other regulations to those connecting with their network. Not only does the belief linger that tribute should continue be paid, but also there is a hunger to redirect the Internet’s revenue stream. It is, of course, perverse that the nations that have proportionally benefited the most from the introduction of mobile technology and need to similarly ride the wave of Internet-driven economic growth should seek to redesign the structure that has proven so successful for their people.

For other countries like China and Russia WCIT offers the chance to place controls on the freedom of the Internet. Seemingly benign proposals to allow for regulation related to “crime” and “security” would grant international imprimatur to the exertion of control over Internet content. The recent sentencing of Russian punk rockers Pussy Riot is illustrative in this regard. The Putin-protesting group was sentenced to jail for being a “crude violation of the social order,” a legal construction that WCIT could permit to be extended to the Internet and justified as “within international accords.”

For the ITU itself WCIT is an opportunity to grow its bureaucratic reach. Founded in 1850, at the dawn of the telegraph, the ITU’s power reached its apex in the era of state-run PTTs. The privatization of national phone companies and the introduction of competitive carriers sent the ITU scrambling for relevance. The predecessor of the World Trade Organization (WTO) fought in the 1980s to keep the ITU from regulating new mobile and Internet services (and won). A new set of international regulations, thus, becomes the ITU’s last gasp to reverse the earlier decision and give itself the same role in the Information Age that it enjoyed in the Industrial Age.

Up until this point, the activities of the various WCIT participants are rather predictable. Repressive governments want to curtail Internet Freedom. Developing nations want a share of the Internet revenue pie. International bureaucrats want to keep their jobs and expand their relevance.

The surprise comes from European carriers. Or perhaps, considering their lineage, it shouldn’t be a surprise.

The European Telecommunications Network Operators (ETNO) is lobbying to have the ITR regulate the so-called “over the top” users of the Internet. In a position admirable for its chutzpah if not its substance, ETNO wants the ITR not to regulate carrier activities, but to add new regulation to heretofore regulated companies such as Google, Netflix and others who use carrier networks. It is another last-ditch effort to return to the days when regulators protected carriers from the nasty realities of innovation and competition.

That mobile and the Internet stimulate all of this sturm and drang should not come as a surprise. The self-interested efforts to force the new networks into an old regulatory box are a reflection of the growing pains of a network-defined world. The insecurity and stress of change always stimulates a desire to retreat to the comfort of the past. WCIT represents a venue where the forces of the status quo can make their stand. It is a struggle between nation-states (and their vassals) created in an era when networks aggregated economic and political power, and the new era in which the network’s distributed architecture has a disaggregating effect on both economic and political power.

Interestingly, it was amidst the storm and stress of a previous network revolution that the concept of the nation-state was born. As 16^th century printers spewed forth ideas that brought down the Holy Roman Empire, Europe was plunged into more than a century of war. The conclusion of that conflagration was the Peace of Westphalia (1648) and a new world order in which nation-states replaced empires and fiefdoms.

The core of the new sovereignty was the power of geography. Physical borders coalesced groups within their boundaries while at the same time geographic space provided a buffering from outside forces. Today’s network, however, defies geography. Westphalian sovereignty, defined as control of a piece of the map, is increasingly irrelevant to an economy built on information products that can circle the globe in less time than it takes for a keystroke.

In the words of Alec Ross, a senior U.S. State Department official, “Networks are more important than nations.” And in the ultimate anti-hierarchy, the new network has organized itself to be overseen by a “multi-stakeholder process” of independent actors spread across the globe. This new stateless network, in turn, enables others to organize in a similar stateless (or perhaps supra-state) structure. Multinational corporations, non-governmental organizations (NGOs), militant non-state groups such as al Qaeda, and intergovernmental institutions (IGOs) such as the World Bank and European Commission all utilize the new network to supersede the Westphalian structure.

Meetings such as WCIT are certainly preferable to the armed conflict of previous network revolutions. But the issues being argued are in many ways the same: as technology transforms how we connect, the institutions of the day – whether governments or corporations – fight to cling to the comfy world they have known. It’s a tale as old as time.

The U.S. delegation to WCIT, led by telecom veteran Ambassador Terry Kramer, will have its hands full keeping international regulators away from the Internet. Amazingly, the processes of the ITU are traditionally conducted without public transparency. WCIT is no different. The future of the open and free Internet is being determined through a secret closed process. Fortunately, the U.S. government is making the secret submissions available to interested American parties. The open and free Internet has also sprung to its own defense through the establishment of “WCITleaks,” a Web site where the non-public submissions by various nations are exposed to the sunlight. It is a poignant example of why international regulators must not get their hands around the Internet’s throat.

What happens in Dubai is a Big Deal. Far from “just another international meeting,” the consequences of WCIT could be as far-reaching on our future as strategic arms negotiations. It is the most important meeting you’ve never heard of.

The World Turned Upside Down

2012-08-05T14:28:00.000-04:00

The British Army band played "The World Turned Upside Down" when Gen. Cornwallis surrendered to Gen. Washington at Yorktown in 1781. A similar tune should be wafting through the streets of Kansas City these days as Google rolls out its high-speed fiber network to that city.

Google's "let me show you how to build high-speed infrastructure" effort is not only thumbing its nose at the cable and telephone companies, but is also upending the 150 year old paradigm of network supremacy. Ever since the telegraph the network was in control of how it would be used and what it would offer. Over the years government policy has been instituted to control potential abuse of that power. Now, in Kansas City a network user has inverted that history. A service that rides the network now has the economic wherewithal to build its own network, offer vastly expanded capabilities, and call its own tune.

The Google all-fiber network in Kansas City will offer speeds of 1 gigabit per second for $70 per month ($120 if you want to add cable service). Google triumphantly points out this is far in excess of the U.S. national broadband average of 5.8 mbps. The Wall Street Journal reports, "the move was designed to accelerate the deployment of faster networks and show off the sort of services that high-speed connections can enable."

It has also thrown the old ideas about communications networks – and communications regulation - into a cocked hat.

Google Fiber, for instance, will not offer telephone service. Why should it? Traditional telephone service is an Alexander Graham Bell legacy. Today a voice call is an Internet application, no different from Angry Birds. Consumers subscribing to Google Fiber will be able to make phone calls, but those connections will be more like Skype than Bell; zeroes and ones no different from everything else the network carries.

Some traditional cable channels like HBO and the products of the Disney Company such as ESPN have chosen not to provide retransmission rights to Google. It’s a risky move as the Web appears primed to do for television what it did to newspapers. Google Fiber subscribers may not be able to get HBO, etc., but the Internet is full of movies and entertainment that the fiber will stream quickly. Google Fiber could mean that what today is called "over the top" content because it comes from other than network-controlled sources may soon be the standard. Google’s own video service, YouTube, has already copied HBO’s strategy of specially-produced programs.

Regulatory assumptions (many of which have advantaged Google) are particularly challenged by Google Fiber. For a century public policy has been based on assuring that network providers do not abuse their position vis a vis network users. The assumption that the network provider holds the economic upper hand, however, just went out the window in Kansas City. For the first time the economic strength of a network user is sufficient to allow it to build its own facilities.

Public policy used to worry about a network owner cross-subsidizing to control content. Now all of a sudden, a content company can cross-subsidize into the network business. Want to guess the default search engine for Google Fiber?

That cross-subsidy, however, is being put to some socially advantageous purposes. For decades the federal government and network providers have engaged in an elaborate plan to subsidize high-cost areas and populations. Recently the FCC announced its new version, called “Connect America” to support broadband deployment. Now Google is giving away basic Internet access for free. Any resident located in one of Google's “fiberhood” footprints can receive free Internet service at speeds of 5 mbps (i.e., about the national average). Five megs for zip is pretty amazing - all thanks to the cross-subsidy from the Google services those customers will use. For years we've been talking about how the Internet would make phone service free - Google just made the Internet free!

There are limits to this seeming Nirvana, however. Unlike cable and telephone companies which must provide service in all areas of a city, Google will provide service only in areas where advance signups assure the economic viability of providing the service. Imagine the outrage cable companies would face with city councils and telcos would face with PUCs if they engaged in what some would no doubt describe as “redlining.”

Google Fiber subscribers who sign up for cable service will receive an Android-powered tablet as the TV remote control. Not only will it allow Web-based interaction with the TV, but also it completes the power play for Google. Now Google services, running on Google hardware, powered by Google’s OS have moved the nexus of market power away from the network. The ultimate edge player has just integrated backwards to control the last part of what it doesn’t already own – the network itself. Indeed, the world has turned upside down.

Ubuntu

2012-07-08T12:15:00.001-04:00

Recently I participated in a program entitled, “Ubuntu and Social Media.” It was my introduction to Ubuntu, an African philosophy about community and people’s relationship with each other.

The last two Mobile Musings have heralded the confluence of pocket processing power and wireless IP networks to stand the traditional role of a network on its head. By empowering the individual to take over activities once performed by the centralized network, individual hubs have replaced network hubs as the controlling force. It is the transformation of each of us from a “client” at the end of a delivery path, to a “server” at the center of our own unique network.

What has become known as “social media” is one result of these new individual hubs. Twitter’s 400 million daily tweets originate at an individual hub for delivery to the tweeter’s own network. Similarly, pictures taken on a cameraphone propagate via Facebook to a self-assembled network. Whether it is tweeting about what I had for breakfast, or publishing personal photos, the new network has empowered a new era of “it’s all about me.”

This raises the whole question about community – Ubuntu – in the new networked world. If individual network hubs encourage “it’s all about me,” what becomes of the collective community necessary for the functioning of society?

The Founding Fathers worried whether a nation that was so spread out and sparsely connected could survive. News of the founding of the republic, for instance, took 22½ days to make its way to Charleston, S.C. This lack of interconnection meant that local behavior and traditions flourished, including what Southerners called their “peculiar institution” of slavery. Four score years later, as the railroad and telegraph networks began to knit the fabric of the nation more tightly, the practices of such isolated independence became a national discussion, followed by a national disaster.

The question we face today is whether the new network’s ability to let individuals define their interactions around themselves will return us to a similar kind of isolation, albeit electronic rather than physical. I got quite a rise out of the audience and fellow program participants at the Ubuntu program when I announced, “Tweeting is not participating.” Sending a tweet is not a community-building action, it is a self-centered “here’s what I’m interested in” statement enabled by the new network.

In his new book Confront and Conceal, David Sanger tells how the use of Twitter during the Arab Spring in Cairo’s Tahrir Square failed to translate into electoral victory for the forces of Egyptian liberalization. While Twitter and Facebook were tools for disseminating information outside of government-controlled media, they fell short of creating the kind of cohesive community necessary for permanent change. Social media’s dissemination of banned information was the kindling, but what kept the protests in Tahrir Square going, I am convinced, was the self-reinforcing nature of social media messages. “I’m at a demonstration,” although a self-centered tweet, is nonetheless encouragement for others to participate.

After the fall of the Mubarak government, however, it was organization, not individualism, which allowed the Muslim Brotherhood to win the elections and take hold of the government. The forces of liberalization that had driven the revolution broke into self-centered and bickering subgroups that were simply out organized by the Muslim Brotherhood. All the high-minded “here’s what I think” tweets in the world are no match for an organized collective conscience.

Some worry about the new network’s impact on the collective conscience of our nation. The nation’s Founders created a mediated republic rather than a direct democracy. The question arises whether such deliberative mediation is possible when each person is his or her own private network and the instant gratification of the network becomes the expectation? The deep and convoluted problems that confront us domestically and around the world simply do not lend themselves to the “it’s all about me” instant gratification of social networks.

Historically, our networks – from the railroad and telegraph, to radio and television – joined the nation into an information commons of curated and shared information. The telegraph transformed newspapers from hyper-opinionated local rags to oracles delivering a common set of news and information from afar. Radio and television did the same, adding audio and video to the common experience. Today the openness of our new networks eliminates the curation function that created a common foundation of shared information.

The information commons that bound us together has been replaced by the ability of an individual hub to both select what it wants to receive as well as publish its own perception of the facts. The controversy about President Obama’s birth certificate, for instance, was born and kept alive through the new network. Long after the documentation was provided, the new network kept the topic alive by churning out conspiracy theories. To be fair and balanced, the political left uses the network in the same manner.

Beyond the ability of individual hubs to select their own “facts,” the collection of data about each individual’s online activity has spawned a whole new business of determining what people want to hear and delivering it to them, often to the exclusion of contradictory data. When software tracks my online activity, determines my preferences, politics, and predilections and then sends to me only information that is compatible with such beliefs, the community is fractured.

The wonder and power of the new network is how it empowers its users as never before. The challenge we users face, however, is how to avoid that empowerment creating information isolation akin to the pre-Civil War era’s physical isolation. Tweeting to hear my own voice is not a substitute for collective dialog; and we have seen the results in Egypt. If being an individual hub becomes an excuse to ingest only what I want to hear, the information commons at the heart of republican government withers to the detriment of the republic.

Inherent in being an individual hub is a new responsibility not to become an isolated island in the process. Because individual hubs enable the creation of a self-selected network the choice exists whether the new network will be a gateway to an abundance of information and interconnectedness, or a long, narrow and closed hallway that is “all about me.”

The concept of Ubuntu, therefore, becomes an essential component of our new networked world. As Nobel Laureate Desmond Tutu explained, Ubuntu “speaks about our interconnectedness. You can’t be human by yourself.” The nature of that interconnectedness has been changed by history’s fourth network revolution. Like those who lived through the earlier revolutions, we are going to have to discover how community continues as the networks necessary for that community change.

Power to the People

2012-06-11T12:28:00.000-04:00

The previous Mobile Musing considered how the confluence of pocket-sized processing power and all-digital wireless LTE combined to make 2012 a watershed year in the history of networks. The practical result of this is a network that increasingly cedes its power to its users.

For the last several decades network activity has been inexorably moving to the network’s edge. With the 2012 watershed such a distributed network is moving to the ultimate edge, the individual user.

Networks have always operated around hubs where the contents of one pathway were switched to another. The hubs of railroad networks were called switching yards. The hubs of telephone networks were called switches. The hub of the new network is you and me.

The transition began subtly 30 years ago when wireless cut the phone cord. The revolution produced by early car phones and portable brick phones was that the network no longer controlled the place from which you could access its benefits. The end of place meant the user commanded the network to come to him or her rather than vice versa. As the mobile phone became ubiquitous we began to take this phenomenon for granted. Almost half the people alive today have never known a world where finding a phone and having the right change was a challenge. Separating voice telephony from a specific place was the first step towards putting the user at the center of network activity.

The next step in the user-centric transformation was the wireless delivery of more than voice. The ability to call forth information on demand was an inversion of the traditional relationship with knowledge; that if you wanted something you had to go and get it. Details about the rein of Genghis Kahn, for instance, were sequestered in a book you had to go discover. Learning was first a process of finding. Now such knowledge can be wirelessly summoned in the midst of a dinner table conversation. This kind of instantaneous access to information increases the demand for information. Genghis Kahn might get buried in the propwash of life’s other activities 10 minutes after the initial demand, but in the new wireless world the moment after the information is desired it is delivered. Mobility has produced a fundamental change in the nature and fungibility of information. Knowledge is changed when it revolves around the consuming individual.

This brings us to the new network’s greatest change – how each of us has been transformed from a “client” at the end of the delivery path to a “server” at the center of our own network.

Networks have always centralized power at the point of network activity. Where rail lines converged, urban manufacturing centers arose. New York became the media capital of the nation because it was the most interconnected city in the early days of the telegraph. The hierarchy of old networks cemented the power of a hierarchy of users ranging from information dispensers to product producers. The wired Internet’s anti-hierarchical distribution has been chipping away at such network-centralized power for the last couple of decades. The wireless IP network, coupled with pocket processing, is the completion of that transformation.

In the all-IP wireless network the flattening of distribution – and thus the flattening of power – has reached its apex. The smartphone portable processing device is the new network hub. A network hub, after all, is a point at which in and out activity occurs to route traffic. This time that node, and the control over its distribution of traffic, is literally in the hands of the individual. Historically the power of the network hub to command resources and information created other derivative powers. The new mobile network means that power is now in the hands of the people.

What we have come to know as “social media” is just one result of these new network hubs. To consider such a development as either “social,” or “media” is to miss its real impact – the placing in the hands of individuals the power of a network hub to select and route the flow of information.

Twitter’s 400 million daily tweets (!) are an example of how the network has flattened. News events and opinion were once the province of a curatorial authority that exploited the power of a network hub to determine what would be disseminated. That function is now performed by any individual with a Twitter account.

The Arab Spring was the high-profile manifestation of the new reality of individual hubs. Wireless devices on the street performed the role previously assigned to hierarchical authority to collect and distribute information. The flattening of the network put collect and connect capabilities in the hands of individuals who then created their own networks that bypassed the choke points of power.

But the concept of individual hubs is more than Twitter. Any time a consumer accesses or creates information for subsequent redistribution they have become a hub. While the wired IP network allows a degree of such configuration (e.g., blogs), it is the addition of pocket processing and high-speed mobility that adds the last step from network hubs to individual hubs. The provision of health care, for instance, is being transformed from the old hierarchical system where the patient was commanded to come to the provider, to one where a patient equipped with a wirelessly connected monitor becomes a server of information delivered to the practitioner client. Next, of course, is the “social media of machines.” Each point on the Internet of Things can become a unique hub collecting, creating, and serving information to a network of its own design.

While the one-two punch of portable processing and all-IP wireless networks is just beginning to scale, its future is becoming clear. It is a transformative moment in which the power of the network is moved from institutions to individuals. It brings new meaning to the 60’s slogan Power to the People.

Living History

2012-05-11T09:44:00.000-04:00

"History doesn't look like history when you're living it," John Gardner observed. As we deal with the chaos, confusion and change that new network technology is imposing on our business and personal lives, it is easy to miss the history of this moment. We are experiencing a network revolution that ranks alongside that which began with Samuel F.B. Morse's immortal "What hath God wrought" in 1844.

Two forces that have been developing for decades – digital processing and digital networks - have matured to make 2012 an historic watershed. Like the proverbial boiled frog, these changes have been developing in full view, but incrementally so as to hide their impact. Suddenly, the convergence of digital wireless connectivity and truly mobile computing has created a boiling point. The result is changing our lives and defining the patterns of future generations.

Electronic digital computing has been evolving since John Atanasoff first assembled such capability in the basement of the Iowa State physics building in 1938. The vacuum tubed mainframes that followed ultimately yielded to silicon mini computers, then to microchip-powered PCs, and now to pocket-sized mainframe computing power dubbed smartphones. Last year this 70-plus-year evolution hit its inflection point when smartphone deliveries outstripped that of PCs.

Portable processing alone does not a revolution make, however. Since the days of the early hunter-gatherers, the networks that connect us have been the forces that define us. Coincident with smartphone sales exceeding the sales of PCs, the network changed. The advent of LTE is more than the introduction of a new high-speed digital wireless network. It is the digital partner to the pocket processor, and their combination is synergistic

Four years after Atanasoff's computer, George Stibbitz performed a parlor trick on the stage of the American Mathematical Society's annual meeting at Dartmouth College. Using telephone lines and a modified telex machine, Stibbitz took math problems proposed by the audience and solved them on a mainframe computer in New York City, 250 miles distant. It was the first network transmission between two computing devices.

The ubiquity of the telephone network, coupled with modems that allowed digital information to be transmitted across the analog network, opened the door to connected computing and ultimately propelled the early PC-based services. From AOL to Yahoo!, networked computing power began to give a glimpse of the future in which we now reside. The subsequent arrival of Internet Protocol (IP) and its digital lingua franca created the buzzword of the late 20th century: "convergence." Suddenly, voice, video and data were all the same 0s and 1s. Networks that had been developed for a single purpose yielded to common digital deliverables.

Yet even as digital fever fueled new services and created new fortunes, the network was still the boss. While early efforts at wireless data held the promise to cut the digital cord, they suffered from the same constraints as George Stibbitz's parlor trick - the realities of imposing digital information on a network designed for analog voice.

That's why the deployment of LTE makes this year an historic watershed. While LTE means many things to many people - expanded throughput, lower cost, higher speed - its real revolution is that it is a computer network, speaking computer language, routing via computers, and connecting ever-smaller, ever more powerful smartphone computers.

The confluence of portable computing with an all-digital wireless network is a cultural course-changer. For the first time in history the relationship between networks and those who use them has changed.

Since the beginning of history networks have dictated the terms of their usage. The key power of a network has always been how it commanded the user to come to it. From the time when primitive tribes settled along animal paths and waterways, the networks upon which the human species relied have always been in control. History’s dirty little secret about networks was that users could only enjoy the network’s benefits on the network’s terms.

The first high-speed network, the railroad, built new pathways and then commanded that users come to the network to enjoy its benefits. The location of economic activity became centralized along the railroad's path and at its junctions. The same pattern held true with the first electronic network. Mr. Morse's telegraph, and its successor the telephone, continued the centralizing history of networks by specifying where a user had to be to send a telegram or place a phone call.

For the past 30 years wireless connectivity has gradually been introducing a new network paradigm where the network came to the user rather than vice versa. Starting with voice service and slowly progressing to data, wireless has brought information to the point where it could be most productively consumed rather than dictating how the user would have to behave in order to receive or send the information. This year’s marriage of mobile computing with IP connectivity means the previous slow evolution has exploded to a pervasive reality.

Information and those who consume it have seized control from the network. The multi- millennia centralizing power of the network has been stood on its head. The network is no longer in control; the user is.

The second year of the second decade of the 21^st century is our living history. As Yeats observed of an earlier time, “All changed, changed utterly.”

Like Chocolate

2012-03-05T18:19:00.000-05:00

The news from the Mobile World Congress in Barcelona last week was that LTE networks are finally a reality. It certainly is a watershed moment for the industry, but it also is a moment of peril. As mobile operators fulfill the vision of all-IP high-speed networks they are rolling out the welcome mat for over-the-top (OTT) content providers who they accuse of sucking up bandwidth while paying nothing in return.

Just before the Barcelona Congress Cisco released their annual Mobile Data Traffic Index which found that for the fourth year in a row wireless data demand more than doubled. The installation of LTE is supposed to help meet this challenge with high-speed, high-capacity networks at lower incremental costs. Already, however, forecasts are suggesting the new capacity won’t be sufficient.

But it’s not just a bandwidth squeeze operators are worrying about. There is a revenue squeeze as well. According to Ovum Research, carriers lost almost $14 billion in text revenue last year as OTT providers siphoned consumers from highly profitable proprietary SMS services to free Web-based messaging platforms.

The other news from Barcelona was how the industry’s leaders were dealing with the OTT challenge. One wireless CEO after another took to the podium to complain about over-regulation, the high cost of spectrum licenses, and how OTT was enjoying an unregulated free ride. “The operators are now formally under attack,” the noted analyst Rajeev Chand observed.

Beyond complaining about over-regulation, the CEOs’ response has been a group grope for network-based solutions. The Wholesale Applications Community (WAC) was the late-2010 response to apps stores. Last week they tried again with the introduction of Joyn, a service designed to take on the SMS cannibals with a common “Rich Communications Suite” platform.

The problem with such common solution approaches is the dichotomy between network-think and consumer-think. While the folks who think in terms of networks are spending time and effort solving for a common platform, the OTT providers have already shot out of the starting gate. Network people think in terms of perfection, consumer apps developers think in terms of getting to market quickly with a first generation service and then improving it on the fly. As a result, by the time the operators have checked all the boxes, the OTT folk have accumulated a huge following of loyal users; and from that point on the speed of their updates keeps them in front.

The great landmark of LTE deployment thus becomes the ultimate movement away from the network to what that network enables. The dirty little secret that built the wireless business was that the network was in control of what consumers received. LTE networks consign that era of network dominance to the ashcan. The most powerful and pervasive platform on the planet – the wireless network – is now subordinate to the device manufactures and applications suppliers who use it. Because LTE is all-IP everything on it – from voice, to text, to Angry Birds – is simply an app. The all-IP network thus disintermediates its builders. The dreaded “dumb pipe” looms.

It is not the first time a network provider has faced this challenge. Perhaps the experience of the cable television industry in the 1980s can be a roadmap for mobile operators. Cable, too, was facing the “dumb pipe” nightmare. Their business was transmitting someone else’s product (sound familiar?), only this time the product was television signals owned by major networks. Cable’s response was to own the next generation services. They couldn’t buy NBC, ABC, or CBS, but they could own channels that were uniquely available because of the cable pipe. From Discovery, to CNN, to QVC and more, cable operators invested in and controlled the next generation of television services. Not only did they redefine themselves to avoid the dumb pipe, but also an industry whose expertise was stringing cable exposed itself to a whole new generation of thinking.

It’s too late for a mobile operator (or consortium) to buy Facebook, Google, or Twitter. But it’s not too late to buy what’s coming next – and we all know there will be a next…and a next…and a next. As a case in point, Apple just bought Chomp, an app search engine that allows users to find apps based on their functions, not just their name. The usage statistics make it clear that smartphone owners spend more time using apps than they do searching the Web. Finding your way around over half a million apps in the iStore is virtually impossible; no wonder Apple bought Chomp. But why did it have to be Apple that was looking for the next smartphone service? Why not a mobile operator?

The cable model suggests an infrastructure provider can successfully expand beyond its network roots. Some mobile operators have begun edging in that direction by starting incubators and development centers to work with early stage app and service developers. Some have invested in new apps (Deutsche Telecom’s venture arm just invested $7.5 million in Pinger, an OTT texting company, for instance). And Verizon, AT&T and T-Mobile are reportedly investing $100 million to create a separate company, ISIS, to work its way through the morass of mobile payments.

The most interesting evolution from network pipe to content provider is happening in South Korea. Long an innovator in mobile services, South Korea Telecom has created SK Planet, a separate company for investing in and owning the next generation of wireless services – and not just for SKT subscribers. The new company will put what it owns into the mobile ecosystem for consumers to use on anyone’s network, anywhere in the world. SK Planet has turned the mobile world upside down by making a mobile operator an over-the-top provider!

Deutsche Telecom CEO Rene Obermann told a Barcelona audience that mobile data was like chocolate, “once you start eating, you can’t stop.” The new LTE networks are going to be the data chocoholic’s dream come true. The question for mobile operators is whether they want to stay in the business of making the delivery boxes for someone else’s chocolates or whether they want to develop their own recipes.

How SOP Was Undone By SOPA: The Political Maturing of the Net

2012-02-06T06:53:00.005-05:00

In the mid-1970s cable television viewers in San Diego often saw a message like this on their screen:

This program is being blocked by order of the Federal Communications

Commission. Please write your Congressman Lionel Van Deerlin, U.S.

House of Representatives, Washington, D.C. 20515 and tell him you

want more television choices.

The recent headline-grabbing dustup between Hollywood and the Internet community over the Stop Online Piracy Act (SOPA) is the reincarnation of the same battle 40 years later. The underlying issues are strikingly similar, but the way in which they were fought has certainly changed.

In the early days of cable television a cabal of Hollywood and broadcast interests combined to convince the Federal government to deny cable its competitive advantage of more channel choices for consumers. Corporate lobbyists told Congressmen and Senators how cable would mean the end of "free TV" unless it was stopped or controlled. Then these same groups recruited real people - the so-called "grassroots" - to back up their claims.

Such lobbyist-organized grassroots efforts were the Standard Operating Procedure (SOP) of political organizing - I know because I used to do it. Last month, however, everything changed. The opponents of SOPA harnessed the network the legislation was trying to constrain to produce an outpouring that blindsided SOPA's supporters and derailed the bill. The vox populi of the Netroots overwhelmed the organized grassroots. With the SOPA debate the Internet came of age politically.

Backed by Hollywood and others whose business model requires controlled scarcity of product, SOPA in many ways echoed the cable fight of 40 years earlier. The policy matter is not whether copyright holders should receive recompense for their products (they should), but whether legislation to protect that right is aircover to perpetuate old practices at the expense of new networks. There is no doubt there are honest-to-God Web pirates operating in China, Russia, and elsewhere who are stealing copyrighted product. These pirates should be stopped. But SOPA’s effort to accomplish this – which also just happened to strengthen the hand of content companies in other regards – applied concepts more applicable to the command and control networks of yesterday than to the open access networks of today. The result was an unparalleled protest and a political train wreck.

The power of the Internet is its lack of centralized control. Its distributed architecture means the network functions at the edge rather than at a central point. That edge activity, in turn, creates what the SOPA supporters were trying to constrain: access they can’t control. While its goal of stopping piracy is laudable and important, SOPA’s practical effect was to restructure through law the functionality of the Internet.

What seemed to catch everyone by surprise was how the distributed nature of the network means anyone can use the Net to express themselves and discover others of a like mind. This open-sesame for self-initiated action unleashed the real vox pop.

The old political structure operated like the network itself - a centralized system of control. Convince the right representatives and gin up the right groups to support your position and legislation was enacted. The new political structure, as demonstrated by the SOPA experience, also operates like the network. But it is a new distributed network. With the Net anyone with access to the network is now an editorialist and a political organizer. What's more, the Net aggregates previously isolated individuals into a coherent self-organized mass.

One hundred seventy-four years ago a New York painter named Samuel F. B. Morse demonstrated his electromagnetic telegraph to the Congress. It was the first electronic network and the binary precursor to the Internet. The idea that messages could move via electronic current was a revolution that was literally beyond the comprehension of many who witnessed it. “The world is coming to an end,” one congressman commented as he left Morse's demonstration.

The awe-struck congressman was right, of course. The comfortable world of doing things the way they had always been done was coming to an end. By definition, new networks always change the status quo legacy of the previous network. In Morse's time that legacy communications network was the Post Office.

Morse tried to co-opt the Post Office by offering to sell it his invention. Unable to conceive of why messages moving at the speed of light were better than messages moving at the speed of horses, the Post Office spurned the offer. The result was a precedent that echoed again in SOPA: relying on political muscle to stop that which technology enables always fails. What was interesting about the SOPA fight was how fast it failed. The heir to Morse’s racing electrons sped information across a ubiquitous network to shatter the political SOP and create a new political reality.

The on-screen message in San Diego 40 years ago was revolutionary in how it used a new network to defend itself. The problem was that it was still a top-down effort. This time the speed and ubiquity of the Internet created a self-organizing, bottoms-up capability that changed the nature of the debate. The Net spread the word from a few watchdogs to everyone who would potentially be affected. Then, the network allowed the affected to organize and deliver their messages in the other direction – to the elected officials – telling them to keep their hands off.

Those messages weren’t just email equivalents to the letter asked for in the San Diego situation. Activity at the edge of the network means creativity at the edge of the network. A seemingly limitless number of individuals were able to undertake their own creative response. Not only did collaborative sites such as Wikipedia shut down in protest, but also anyone with an Internet connection had a soapbox and a media studio. The messages from the edge soon overshadowed the muscle being applied in the middle.

I was a part of the battle for network change in the 1970's. It was a long and bloody uphill battle that ultimately prevailed. Watching the Netroots organizing around SOPA, I could only stand in awe - if only such a capability for the people to speak out had existed in the 1970s! My sense, however, is that there was a lot more to the SOPA action than SOPA itself. Centrally structured and controlled political grassroots have become distributed and open Netroots. The results echo the reaction of the 1838 congressman to seeing his first electronic network. Things will never be the same again.

Reordering the Universe

2012-01-06T13:52:00.000-05:00

2011 certainly went out with a bang! The discovery of the “God Particle” and a challenge to Einstein’s Theory could reorder quantum physics. But if you want to talk about really reorganizing the universe consider the December announcement of an unprecedented consortium between Verizon and the major cable operators.

The heretofore unidentified “God Particle” (formally the Higgs boson) turned from theory to reality in December at the Large Hadron Collider. By smashing protons together the collider simulated the universe a hairsbreadth before the Big Bang. Lo and behold, the test appears to have identified the force that gives shape and substance to everything we know.

Einstein’s Theory fell apart twice (or at least appeared to). Once in September and again in November extremely low mass particles called neutrinos appear to have broken the cosmic speed limit by moving in excess of the speed of light between the European Organization for Nuclear Research (CERN) in Switzerland and a receptor 730 km away in Italy. What if E doesn’t equal MC²?

But those developments only hold the potential to reorder quantum physics (!). At the same time the basic assumptions of science were being challenged, Verizon and the cable MSOs began to transform the physics of program content and delivery.

Verizon and four major cable television operators (Comcast, Time Warner, Cox and Bright House) entered into an agreement whereby Verizon would buy the cable companies’ AWS spectrum licenses covering 259 million pops for $3.6 billion. Other than being the definitive conclusion of cable’s flirtation with building their own mobile networks, this part of the announcement is a simple license transfer, not unlike AT&T’s $1.9 billion purchase of Qualcomm’s licenses which closed in December.

The change in the business physics came in the other part of the agreement. The cable companies and Verizon are forming a joint venture to sell each other’s services. Comcast reps selling Verizon Wireless and Verizon stores selling Comcast is one thing…but what about a new “wireless cable” service to take on the broadcasters and once again redefine video delivery?

The business physics of the 21^st century is all about screens and how to get to them.

The pioneers of cable television broke the broadcast oligopoly in the late 1970s and early 1980s by offering via a contained conduit what that era’s spectrum technology could not: consumer choice. The increased access to consumers’ screens spawned an explosion in programming. We now take for granted multiple news and sports channels and programming for every niche from science and history buffs to foodies.

The pioneers of wireless broke a monopoly, too. When mobile took off there was only The Phone Company. The subsequent introduction of digital capabilities transformed the mobile phone business into a screen business as well. According to Cisco’s annual Networking Index, mobile video was projected to exceed half of all mobile data last year and grow to two-thirds of all mobile data by 2015.

Now the nation’s dominant screen service providers and the emerging next-generation screen service are going to play together. It had to happen for multiple reasons. Telephone companies see the public switched telephone network (PSTN) going away. The programming diversity of cable operators has already become diversity of delivery to multiple wireless devices. And the Mongols (yes, that is “Mongols,” not “moguls”) of Silicon Valley are massing on the horizon.

The PSTN is a casualty of the digital world. The lifeblood of telephone companies like Verizon and the new blood of cable companies, circuit switched telephony is headed for history. Internet Protocol (IP)-based voice service is just another app on an IP wireless or wired network, no different from Angry Birds or YouTube. For a traditional telco it’s time to look to the future of how to be more that an IP “pipe” for someone else’s apps.

Cable television service is changing dramatically as well. The major operators’ “TV Everywhere” initiative to deliver their content to multiple wireless devices is all the evidence required. The shocking statistic of 2011 was that the number of television sets in America actually declined! It is no longer necessary to have a television to watch TV.

As for the Mongols, both Google and Apple have made clear their desire to be in the video business. Eric Schmidt, Google’s Executive Chairman, has indicated, “By the summer of 2012, the majority of the televisions you see in stores will have Google TV embedded.” And the rumor mill is rife with rumblings of Apple’s efforts to do to video what it has already done to music. It appears to be a “when,” not an “if” that Apple will offer consumers a subscription service that allows them to build their own customized program lineup, maybe as soon as the second or third quarter of this year.

A TV subscription service like the one Apple is proposing is the heart of what cable is all about. And whatever Google is doing, they aren’t in every TV just for the heck of it. The Mongols of Silicon Valley have been behaving just like their 13^th and 14^th century predecessors. Using new technology to their advantage, the Mongols of the Middle Ages sent invasions in every direction. Soon they had the largest contiguous empire the world has ever seen. Sound familiar?

It may be a case of “my enemy’s enemy is my friend,” but a cable-wireless alliance is an exceedingly logical response to the impending attack. Cable operators have program distribution rights (or leveraged access to them) and Verizon has the high-speed wireless network to deliver to the growing number of mobile devices. Both these players can help each other confront the coming onslaught.

An interesting sidelight to this may be the effect it could have on movie theaters. Box office revenues for 2011 were down from 2010. One of the reasons, according to film critic Roger Ebert, is “ticket prices are too high [and]… competition from other forms of delivery.” Ticket prices are high because of the limited number of screens - a market-controlling force not unlike what the broadcasters and telephone companies once had.

The competition from the new screens has produced damn good and creative new video that can be seen at home or anywhere. Breaking Bad, Mad Men, Boardwalk Empire, Homeland and other made-for-cable content is crisper, edgier, more accessible and less costly than the latest shoot-‘em up, blow-‘em up film mayhem. The cable-Verizon alliance holds the potential to expand the number of screens even more, thus continuing to expand quality video entertainment outside the movie theater.

For those of us who move through the day without thinking of the God Particle or Einstein’s Theory the late 2011 revelations were simply matters of interest. The other end-of-the-year development, however, just might upend the way we live our lives.

Making Our History

2011-12-01T15:41:00.000-05:00

On the occasion of the annual mHealth Summit in Washington it is worthwhile to pause and consider one of the unforeseen benefits of wireless connectivity; how mobile is helping to save lives and improve the quality of lives. I have the privilege of serving as the chairman of the UN Foundation’s mHealth Alliance; in that role I recently delivered these thoughts which now become this month’s Mobile Musing.

The history of the world is dotted with only a handful of transformational moments. We happen to be living through one of them right now. We are building history’s fourth great network-driven transformation:

• The first was Gutenberg’s original information revolution in the 15th century; a technology-based network of commercial print shops whose products produced not only the Renaissance and the Reformation, but also the beginning of modern medicine,

• The next revolution didn’t happen for 400 years when the first high-speed network, the railroad, conquered the forces of geography that had forever defined the activities of mankind and by bringing masses of people to ever-expanding cities created the need for hospitals and health care for the masses,

• On its heels came the first electronic network, the telegraph, whose “lightning messages” eliminated time as a determining factor in communications and whose binary signals became the precursor of the telecommunications technologies of today.

Our fourth network revolution is the result of the inexorable increase in computing power expressed in Moore’s Law and the unprecedented connectivity of wireless communications. Together, they create the most powerful and pervasive platform on the planet. Our history is on par with those earlier transformational moments, including how it is changing the practice of medicine.

John Gardner once observed, “History doesn’t look like history when you’re living it.” With that as a guidepost, let’s take stock of the progress of the revolution we are shaping.

It begins with an example of our living history; a relatively recent story, yet one that sounds so old fashioned that it gives us a measure of just how fast transformation has been happening.

In 1993 I was the CEO of the Cellular Telecommunications Industry Association (CTIA) when we crossed a momentous milestone: the 10 millionth subscriber. Now, this may seem inconsequential from where we sit today with over 320 million wireless connections in the U.S., but in 1993 it was a big deal. Less than a decade previously, AT&T had hired McKinsey & Company to do an analysis of the future of cellular; their conclusion was that by the turn of the century there would be 1 million cellular subscribers (!). There we were in 1993, with seven years before the millennium and we were ten times the size that the big-time consultants had said the industry would become.

The symbolic 10 millionth subscriber was an early example of what mHealth could become. She was a large animal veterinarian in Thibodaux, Louisiana. Over a celebratory lunch she told me how amazing it was to have been in a field the previous week tending to an injured animal only to have her phone ring with a call from a farmer who had a heifer in labor with a breached calf. We all marveled at how she could be reached in the field and how she could give instructions to the other farmer as she packed up and raced to tend to the breached calf. It was mVetHealth. Little did any of us imagine at the time how soon we’d be discussing how that kind of mobile connectivity could be one of the great breakthroughs in human health care.

And the timing for this breakthrough is pretty fortuitous. At the very time when health care costs are dominating our economy – something like 16 percent of U.S. GDP, heading to 20 percent – there emerges a transformational technology that can be applied to help mitigate the problem.

The Western concept of medicine has been built around putting people in hospital beds or constantly bringing them to the clinic for observation – two incredibly expensive activities. mHealth offers – especially in developed countries – the opportunity to eliminate those expensive means of measurement and analysis and to let the patient go about his or her daily activities while reporting in wirelessly.

• The folks who brought us the Jawbone Bluetooth earpieces now have the UP wristband with tiny sensors that monitor activity, even while asleep, and display a report on the user’s activity to their smartphone.

• Smart bandages monitor and report on infections in wounds,

• Connected clothing contains bio-sensors to monitor and report on the wearer’s vital signs,

• Diabetes monitoring can expand beyond a once a day prick to produce an ongoing real-time relationship with the patient 24-hours a day, not just a once a day “snapshot,”

What fascinates me is how medicine is basically the collection of and action upon information. When the doctor takes our pulse, or listens to our heart, or palpates our abdomen she is collecting data. I don’t understand medical diagnosis, but I do understand data collection and transmission. Marrying distributed computing power with wireless collection for monitoring, diagnostics and wellness is simply the collection of information; and in the digital world the zeroes and ones of information can be wirelessly transmitted and then manipulated to produce results.

What we’ve been talking about thus far has been mHealth in the developed world. In the developing world mHealth is characterized by the seemingly contradictory reality of lower technology producing the potential for even greater results.

Last month the United Nations announced that the world’s population had crossed 7 billion. At the same point in time the GSM Association forecast that by the end of this year there would be 6 billion wireless connections and 4 billion unique subscribers.

• It took from the beginning of time until 2001 before 1 billion people were connected on the globe,

• The second billion took only an additional four years,

• The third billionth connection took half that time and happened in 2007,

• The fourth billion in 2009,

• The fifth billion connection in 2010,

• And the six billionth connection in 2011.

That’s what living history looks like. There are now more people connected to the mobile network around the world than are connected to the electric grid. There are more people around the world using mobile phones than there are using toothbrushes.

I had a personal experience with this amazing phenomenon recently in Zambia. Along the banks of the Zambezi River is the small village of Siankaba. About 360 people live in this village of crude huts with no running water and no electricity. I wandered through Siankaba one evening as the women were cooking dinners outside their huts over open campfires. The men were setting up the evening’s entertainment by hooking up car batteries to radios.

Ubiquitous throughout this village were roaming chickens. Thus it was no real surprise when I saw a crudely painted sign nailed to a tree branch advertising “Mrs. DR’s fresh eggs.” What amazed me, however, was that the sign also contained her cellphone number! Here, in a village with no electricity or running water, there was cellphone coverage – and one villager was using it to expand the market for her eggs. It’s no wonder, then that the World Bank calculated that for every 10 percent increase in mobile phone penetration in a developing country, the country’s GDP increases by 1.2 percent.

The goal of the UN Foundation’s mHealth Alliance is to enable similar results in the area of human health. Putting that in perspective:

• Fifty-seven countries have critical shortages in health care workers (for a total deficit of 2.4 million professionals). In India, for instance, 70 percent of the population lives in rural areas and 80 percent of the doctors live in urban area. When the need is “here” and the skills are “there” how can the space be bridged? Sometimes it is as simple as a mobile phone call to a phone-based clinic where the doctor listens to the symptoms and prescribes next steps.

• Every year 4.7 million infants die in the first 30 days of life. Midwives, wanting to get the baby crying and needing to clean them wash them in cold water, with resulting pneumonia in little lungs that are just beginning to learn to operate. Sometimes it is as simple as a text message to midwives to teach them best practices.

• Every minute a woman dies from complications tied to pregnancy or childbirth (525,600 annually). Imagine the advantage of a simple phone call when a complication occurs – to get assistance from a doctor or to get an ambulance without needing to have someone run to the next village to find a phone.

Notice how none of these solutions are fancy. While in the developed world mHealth is “Moore’s Law meets mobile,” in the developing world that will also be important…but the first steps are much more basic. There is so much that can be done with simple accessibility to a voice device and text messaging.

Think back to the 10 millionth wireless subscriber, the vet in the field. It was a huge breakthrough then which we tend to overlook now because it seems so commonplace. We are at a similar point around the world; nothing fancy and people’s lives can be affected.

But mHealth is not just about technology. All the technology and dedication in the world falls apart without the proper support. It is in this area that the mHealth Alliance is especially focused. The technology is turning out to be the easy part. The challenge is to take mHealth “beyond the technology.”

First, mHealth must transition from stand-alone solutions to integrated, interoperable systems. There are n+1 trials that are interesting, important, and producing worthwhile results – but not all of them are scalable. It is time to move from trials and silos of activity to implementation at scale. This is going to require that mHealth applications are integrated with national health systems as well as the infrastructure of mobile carriers; that there are open standards, and open APIs; and that there is interoperability that allows for the aggregation and sharing of data.

Second, that for mHealth to move from demonstrations to decisive results the key stakeholders in the existing health care structure are going to have to see and support what is possible. I was depressed, for instance, to be in one African country recently and learn that the local association of health care professionals had added a new position to their staff: Director of Unnecessary Technology. Clearly, until mHealth proponents solve the first issue of scale-less silos it is going to be difficult to get the attention of the medical and governmental establishment. Yet at the same time, the establishment has a responsibility to assist rather than resist the potential represented by mHealth.

Thirdly, mHealth investments need to stand up to cost-benefit analysis. The trials to date have been principally funded by private donors; it is now time to apply the harsh discipline of the business world. Unfortunately, not every well-meaning idea is sustainable and scalable. It is time to learn from the trials, decide what works and what does not, and feed the winners and shoot the losers. This is the harsh reality of every other innovative activity and just because something is “doing good” is no excuse for it to avoid such realities. As a venture capitalist I am forced to do this with companies all the time; it is neither easy nor fun, but it is essential to the proper allocation of resources so that the greatest good can be done for the greatest number.

Finally, the key stakeholders from government, NGOs, and wireless carriers need to come together on a framework that will allow the first three suggestions to take place. This is what the UN Foundation’s mHealth Alliance is attempting to do. We are the forum, the convener, the mHealth “commons,” if you will, to identify the agenda, build a shared knowledge base, and facilitate the kinds of activities I’ve identified.

These challenges are non-trivial; but they are not non-solvable. The three great network revolutions that preceded our history-making experience all faced similar realities. Technological innovation always produces problems before it provides stability. The challenge for those of us living history at this moment is to step forward, embrace the challenge and implement the solutions that the miracle of wireless connectivity enables.

The Last Hurrah

2011-11-03T15:26:00.000-04:00

Could the Sprint purchase of $20 billion worth of iPhones be the apogee of the mobile handset market? After pressing their nose to the iStore glass the folks in Kansas City finally gained admittance. It just might be the last hurrah for hardware.

Back in 2007 (was it really only four years ago?) Steve Jobs changed the wireless paradigm. For a quarter century the mobile network had been king. Handsets were simply carrier-controlled on-ramps to the network. The iPhone flipped that formula because it did so many cool things so easily. Suddenly it was a handset that stipulated which carrier to use.

For the first iPhone Apple offered “any app so long as we’re in control.” Walter Isaacson’s biography of Steve Jobs tells how Jobs quashed the idea of third party apps. The iPhone’s design functionality was his obsession. One of Apple’s board members, however, kept pushing to allow third parties to develop for the iPhone platform. Jobs finally relented.

When the iPhone 3G debuted in mid-2008 it was more than a functionally beautiful device – it was the portal to a world of possibilities created by people outside of Apple. It also kept Apple out front as the leader. As everyone rushed to emulate the iPhone’s design the touch screen and app-friendly browser became commoditized.

Jobs had already had his epiphany, however. The perfect piece of hardware was simply a gateway. The day before the iPhone 3G launch Apple opened the App Store. The new device then came to market with an economic model that allowed Apple to make money off the third-party apps it was facilitating. Apple reduced it’s net on each iPhone by 20 percent (over $160) but replaced it with a 30 percent off-the-top fee on the revenue generated by apps developers. Thus far 18 billion downloads to the iPhone have generated almost $1 billion in fees to Apple. And the beauty is those fees just keep coming long after the device has been purchased.

We’ve been to this rodeo before. No one should be surprised that as mobile handsets become mobile computers they will become as commoditized as PCs. Just ask Michael Dell. At the same time the apps store’s walled garden days are also numbered. Just ask wireless operators how easy it is to maintain a wall between consumers and the Internet.

Perversely, it is the proliferation of smart devices that will bring about the demise of the app store. CTIA now reports there are more wireless subscriptions than people in the U.S. If consumers own more than one smart device their information needs to follow them seamlessly across all devices, not be locked up in an app.

Information rules, not the device and not the network. Faster networks and more powerful mobile devices only expedite the revolution away from the lock-up of apps and app stores to the free flow of an individual’s information across all his/her devices.

Jeff Bezos gets it. “We don’t think of the Kindle Fire as a tablet,” he explained. “We think of it as a service.” That service is information access. Amazon.com delivers information formerly known as a “book” to multiple devices that are anywhere because they are wireless.

The information in a book used to have a pesky requirement for paper and binding. Johann Gutenberg mechanized the production and distribution of this information in 1450. It drove revolutions as diverse as the Reformation, the Renaissance, and scientific inquiry. It wasn’t the physical book that was important, however, it was the information in its printed container. The “app” of knowledge drove the printed medium and changed the world.

Jeff Bezos has broken the 560 year-old Gutenberg tradition that a book is a container of ink on paper – and he’s delivering it to whatever digital container the user finds convenient. The device doesn’t dictate. The information is in control.

The fabric that connects information across multiple devices has been dubbed “the cloud.” It is the logical extension of the revolution that wireless connectivity began. Wireless untethered individuals from their connections. Now wireless access from smart devices is untethering users from hardware-defines uses.

“There’s an app for that” is being replaced by, “I don’t need an app, my data follows me everywhere.”

Updating Spectrum Policy

2011-10-03T15:56:00.000-04:00

The Federal Communications Commission’s Technological Advisory Council (TAC) has recommended the agency begin preparing for the end of the analog public switched telephone network (PSTN). It’s time to begin thinking the same way about another analog era legacy - the allocation of spectrum.

The pressure on the existing spectrum allocated for commercial purposes is undeniable. A smartphone creates 24-times the data traffic as a feature phone and laptops create 22-times the data as a smartphone. The demands this kind of usage puts on the finite allocation of spectrum is obvious. That pressure is forecast to continue to grow. By 2015 Cisco projects global mobile data demand will be 26-times last year’s level!

President Obama has called for an additional 500MHz of spectrum to be reallocated to wireless purposes. Not surprisingly, those with current spectrum assignments are less than thrilled about the potential of its reassignment. Beyond reallocating spectrum, however, there is a bigger question before us: could a large part of the shortage be resolved by leaving behind the analog physics of the current allocation plan in favor of updated digital physics? In other words, is it the allocation rules built for an analog era that inhibits solutions to the current shortage?

Spectrum has always been allocated based on the physics of analog signals. Blocks of megahertz were allocated and then licenses were assigned within those allocations based on a single overriding purpose: to keep the signals from interfering with each other. Guard bands were often added to make doubly sure a signal licensed for one purpose didn’t interfere with a signal authorized for another purpose.

The spectrum allocation chart, as a result, is a rainbow of colors representing special purpose spectrum slices that are all “so 20th century.” Our spectrum policies are analogous to the old days when a unique circuit was required for every wired connection. Spectrum is allocated on the analog network model to come as close as possible to transmission perfection. Digital networks, in contrast, eschew perfection in favor of self-ordered chaos and from that chaos come greater capabilities and expanded capacity.

Exhibit A for 21st century spectrum planning is WiFi. Operating in unlicensed spectrum, WiFi is a cacophony of competing claims for use of the spectrum. The characteristics of Internet Protocol (IP) packets allow WiFi in a Starbucks hotspot, for instance, to operate more efficiently that the licensed spectrum on the sidewalk outside.

Because data packets are the disassembled pieces of an analog whole they can fit themselves into the nooks and crannies of available spectrum. A data packet containing a piece of email from one user sits right next to a packet of video from YouTube, which sits next to a packet of music from Pandora; each packet pushing its way on to the spectrum like a throng of commuters packing into a congested bus.

The legacy analog approach to spectrum allocation was to assure each user a comfortable seat on the bus where they didn’t bump into other passengers. As WiFi has demonstrated, the digital reality allows many more people to be loaded on the transport vehicle. It may not be as comfortable and orderly, but the bus is much more efficient than it would otherwise be. Outside a WiFi hotspot analog rules assure a comfortable spectrum seat. Inside the hotspot digital anarchy reigns with data packets contesting for carriage; yet the consumer seldom knows the difference.

Exhibit B for the end of analog spectrum policy is how wireless carriers have embraced the chaos of WiFi as a solution to their licensed spectrum capacity challenge. The idea of mobile operators offloading service to something they didn’t control was once heresy. Today, according to Cisco, over 30 percent of mobile operators’ data traffic is handled by WiFi digital chaos on a network the operators don’t own but which has increased their overall capacity and improved their consumers’ experiences.

It is time to abandon the concept of perfection in spectrum allocation. The rules for 21st century spectrum allocation need to evolve from the avoidance of interference to interference tolerance. We’ve seen this evolution in the wired network; it’s now time to bring the chaotic efficiency of Internet Protocol to wireless spectrum policy. What the FCC’s TAC is proposing is that we officially wean ourselves from the old wireline switched circuit world to embrace the reality of IP and its benefits. It’s time to start down the same road with spectrum allocation.

Such a reanalysis of spectrum policy should begin with government spectrum. By all means continue with the voluntary incentive auction of broadcast spectrum (if Congress will ever get on with it), but at the same time begin to innovate on government spectrum. The government as the single largest user of spectrum; there is ample opportunity for experimentation and innovation.

Historically communications innovation has started with government initiatives. The telegraph began with a government-sponsored trial, the railroad grew because of government incentives, digital packetization was developed on a government grant and ultimately implemented by the government to evolve into the Internet. Government has always led the path to new communications realities. Now is the time to continue that leadership legacy with spectrum.

Awaiting the Final Aria

2011-09-02T08:44:00.000-04:00

The government’s decision to block AT&T’s acquisition of T-Mobile will have more than structural repercussions for the wireless industry. If the Justice Department prevails in court the backdoor to imposing a new regulatory regime on wireless will have swung shut. On the other hand, an AT&T court win will trigger government regulation that could ultimately spread to all wireless carriers.

Back in April, shortly after AT&T announced the acquisition agreement, I wrote in this space how it laid the foundation for a 21st century Kingsbury Commitment, the 1913 accord between AT&T and the Justice Department that shaped a century of telecommunications policy. My theory was that the conditions ultimately imposed on AT&T by the government would not only establish rules for Ma Bell, but would then expand from the largest carrier to all others. (http://www.mobilemusings.net/2011_04_01_archive.html)

Now we have the perverse situation where a government win means less regulation while a victory for the corporate interest opens the door to more. Absent a court ruling reversing the Justice Department the regulatory oversight of wireless carriers will continue to atrophy as the digital nature of the wireless business separates it from the legal nexus with traditional analog telecom regulation.

This is because mobile broadband has for several years now been classified by the Federal Communications Commission (FCC) as an “information service” as opposed to a “telecommunications service.” An “information service” is not subject to traditional regulatory requirements such as just and reasonable rates and the prohibition of unreasonable discrimination. Escaping these two historical cornerstones of regulatory policy was a huge win for the wireless industry’s new broadband offerings.

The Communications Act and its enforcer the FCC are analog legacies in a digital world. Of course, there will remain jurisdiction in areas such as the Universal Service Fund, rights of way, and Title I “ancillary jurisdiction,” but absent a new vehicle the regulation of marketplace behavior that has characterized telecom regulation for almost a century is headed towards the same fate as the dial tone – another fatality of digital zeroes and ones.

This trend could have been reversed by the conditions imposed by the government on an AT&T/T-Mobile merger. Skirting the regulatory authority issue in favor of a more flexible public interest standard, AT&T and the FCC/Justice Department would simply agree via a consent decree to pseudo-regulatory behavioral standards. Even though consent decrees are traditionally for a limited duration, such concepts once established with the largest carrier could have been lifted into subsequent consent decrees for other carriers and even into the terms for subsequent spectrum auctions (“If AT&T can live with them so can everyone else”). Ultimately, the more it was imposed on some carriers the greater would be the pressure for a “level playing field” to make the rules the same for everyone. Reportedly, other wireless operators were concerned about this kind of regulatory contagion. Absent a consent decree, however, the predicate for the infection has disappeared.

Thus, the long-term impact of the Justice Department’s decision would appear to be the growing irrelevance of traditional telecommunications regulatory concepts on mobile broadband providers.

Not so fast!

AT&T’s response to the Justice Department decision could breathe new life into wireless regulation. Bloomberg reports that AT&T may be planning to propose consent decree terms to try and entice the Justice Department to change its mind. Surely, such a proposal would contain both structural and behavioral concessions. Even if that does not come to pass, however, an AT&T victory in the appeal of the Justice Department decision would reopen the FCC’s ability to determine appropriate public interest protections.

This saga is better than opera. On stage high tensions abound. Yet, the audience – the FCC and other wireless carriers – is also a participant. Waiting for the final aria will be a nail-biter.

A Trout in the Milk

2011-08-03T08:35:00.001-04:00

For the first time in recent history the Congress of the United States has not sold spectrum to help solve a budget problem. I would have bet everything in my pockets that the recent debt ceiling legislation would have included revenue generated by the sale of broadcast spectrum as a part of the trillion dollars of deficit reduction.

Sure glad I didn't bet!

Going into the recent tumult the Democratic controlled Senate Commerce Committee had sent a bill to the floor to sell the broadcast spectrum. The Republican "Ryan Plan" adopted by the House of Representatives similarly included spectrum as a revenue-raiser. The Obama Administration, likewise, had a voluntary incentive auction of broadcast spectrum in its budget. The President even had an event extolling the virtues of repurposing spectrum from broadcast to wireless use. All the stars were in alignment - but nothing happened.

Henry David Thoreau once observed, "Circumstantial evidence is very strong, as when you find a trout in the milk." The absence of spectrum in the budget deal isn't a trout, it's a whale! How did it get there?

As a former practitioner of the legislative art I look in awe at the National Association of Broadcasters (NAB) and their new president former Republican Senator Gordon Smith. Their hands must have a slight odor of fish - trout to be specific.

Suddenly, when a spectrum sale seemed a fait accompli as a payment on the debt, it vanished. No one is talking about it, but these things don't happen by accident.

Back when I was working to free up spectrum a member of the Senate Budget Committee told me about the special role spectrum plays in budget negotiations. "We sit there looking for more money," he said, "then someone suggests we sell some spectrum. We all laugh and then we vote it through." Except this time that formula fell apart.

The wireless industry once battled the mighty Defense Department over their spectrum and won, principally because of the need to generate more revenue (which, it was agreed, would go to the Defense Department). The NAB has proven themselves more powerful than generals and tanks.

The very first spectrum auction was tied to a debt ceiling increase. The 1993 Omnibus Budget Reconciliation Act not only raised the debt limit, but also authorized the FCC to hold the first spectrum auction and deregulated the wireless industry (thus driving the demand that has created the current spectrum crunch). The budget math has worked that way ever since: sell spectrum to pay for other budget desires.

For almost two decades budget demands have worked to free up spectrum. Suddenly that process fell off the tracks. Precisely when precedent, the President, and votes in both houses of Congress had teed up the sale of spectrum to deliver billions of dollars into reducing the deficit...it was gone.

What this means for telecommunications policy will now play out. One thing is for sure: it’s a whole new ballgame.

Having walked away from taking the easy money, will the Congress remain as committed as they were to selling spectrum?

What will be the light at the end of the tunnel for wireless carriers who see their spectrum capacity being consumed by huge increases in demand?

Will the resulting shortage mean that usage based mobile pricing becomes a demand dampening and profit increasing tool?

Will the AT&T-TMobile merger get new wind at its back because of the spectrum efficiencies it advertises?

Will broadcasters finally get off the dime and begin deploying mobile services in their spectrum?

Will the lack of new spectrum enhance the position of wanna-be wireless players like Clearwire and LightSquared who already have the precious stuff?

The ramifications of the trout in the milk will take a while to sort out. Suffice it to say, all the conventional wisdom about the future of the wireless market went down the drain when the conventional wisdom that Congress would authorize a spectrum auction vaporized.

Many years ago the then-Chairman of the Senate Budget, Bob Packwood of Oregon, complained the NAB "couldn't lobby its way out of a paper bag." It appears as though another former Oregon Republican Senator has answered that complaint once and for all. It was a whale of a coup!

Game Change in Aisle Three

2011-07-08T07:20:00.000-04:00

An awful lot of ink has been spilled recently about the imminent arrival of the era of mobile payments. Just what fits under that rubric, however, is a work in progress. “Mobile payments” seems to be a description in search of a definition, and the ultimate opportunity may have nothing to do with “payments.”

PayPal recently announced 100 million “mobile payment users” conducting as much as $10 million in mobile transactions a day. By this definition, a mobile payment is any Web-based transaction conducted from a mobile device.

Square, the hot startup from Twitter founder Jack Dorsey, just raised $100 million in new capital that valued the company at over $1 billion. The Square device plugs into a mobile phone to make it a credit card reader. Sure, it’s “mobile,” and it is “payments,” but is this the growth future of “mobile payments”?

Mobile operators are defining mobile payments as near field communications (NFC) where a chip in the phone registers on an NFC reader much like a credit card swipe. AT&T, T-Mobile and Verizon have banded into the joint venture ISIS which recently announced 2012 trials in Salt Lake City and Austin. ISIS isn’t a substitute for credit cards but rather a new means of storing existing credit card information. Pull up the ISIS app on a smartphone, select the credit card, and wave the phone in front of the NFC terminal.

I must admit, I haven’t figured out what’s wrong with the credit cards in my wallet…or why I want to replace my wallet in the first place. So long as the government requires me to carry a driver’s license I’m going to need something to carry it in. And while I’m doing that, why not a few pieces of plastic as well? The very fact that the much-discussed mobile payment platforms are credit card based illustrates the pervasive power of plastic. It is, after all, a pretty efficient method for conducting commerce; the readers are ubiquitous, the platform is standardized, and the capital cost of the infrastructure is paid for.

I love the idea of waving my phone in front of a point of sale terminal, or using a mobile Web payment platform – but it’s an additive function, not a replacement function.

So, why all the current excitement about mobile payments? Could it be that “mobile payments” has nothing to do with payments at all? Could it be that the power of mobile is not that it can substitute for plastic, but that it holds the ability to change the consumer’s retail experience in far more powerful ways?

David Messenger, head of mobile and online for American Express, recently pointed out the first of those new retail realities. Consumer product companies have moved the responsibility for payment systems from the CTO or CIO to the CMO. It’s no longer about the systems, or even about the money; it’s now about how the IP-based information generated by a purchase can allow marketing dollars to be tracked all the way to the transaction.

If the first opportunity for mobile in the marketplace is as an information optimization mechanism, the second new retail reality is how mobile can also be a vehicle for maximizing transactions both in number and value.

Martha Stewart is in the aisle at Home Depot…every day. Mobile app Scanbuy uses the camera on a phone to connect the consumer directly to Martha. Just snap a photo of the optical code on the label of the Martha Stewart product and a video is downloaded to the phone in which Martha extols the virtue of the product and offers helpful hints – right there in the aisle. So much for the guy in the Home Depot red vest who never quite seems to be around when you need him (as if he could offer Martha’s special tips anyway). Now Martha speaks for herself, and what’s more she owns the relationship with her customer, even though the customer is in someone else’s store.

The Scanbuy application is not “mobile payments” per se, but it is symbolic of the power at the root of what everyone is calling mobile payments. It’s not the payment that is important, but rather the information from the phone and the delivery of additional information to the phone at the point of purchase that is the game-changer.

Jaymee Johnson, ISIS’ head of marketing, explained “mobile payments” this way: “You probably carry a loyalty card that hangs off your keyring…Some people clip coupons too. You swipe once to pay, you swipe a second time with your loyalty card and then maybe you swipe a third time for a coupon…we’re basically putting all those transactions on the phone.” The value of mobile retail isn’t about eliminating swipes, however. Rather, it is about changing the way the information from those swipes is generated and then making that information in-store actionable.

The online world is currently frothing over coupon platforms such as Groupon or Living Social. Imagine that kind of promotional capability as a service on a mobile device and tied to relevant consumer information (on an opt-in basis of course). Such an information-based application is the true power of “mobile payments” – something quite different than “payments” and a lot more than the historical retail experience thanks to the power of “mobile.”

Chasing Broadcasting's Future?

2011-05-31T07:44:00.000-04:00

“Broadcasting’s Future Is All About Mobile” the headline proclaimed in TVNewsCheck, the daily commentary on all things broadcast related. “[T]he future of broadcasting is personal, mobile devices – smart phones and tablets.”

The author, Harry Jessell, a perceptive commentator on and protector of the broadcasting business, attributes this conclusion to an “epiphany” he had while reading stories of how streaming broadcast information was delivered by mobile networks during the recent epidemic of tornadoes. He was moved by one family’s report that they huddled in their bathtub while keeping abreast of developments by watching TV reports on their iPhone. “They saw it as a lifeline.”

Amazingly, of course, the people huddled in the bathtub weren’t benefiting from the use of the broadcast spectrum; they were receiving it in a much less efficient manner over the wireless network. Instead of this important common information being broadcast to multiple mobile devices at once it was instead streamed individually to each viewer on a traditional one-to-one wireless channel. It is precisely this kind of one-to-one rather than one-to-many delivery of video content that is exacerbating the spectrum shortage in this country.

“All the great technology and expertise that broadcasters can bring together to cover storms mean nothing, if they can’t deliver it to people where and when they need it,” the article wisely observed. “Where and when they need it” clearly wasn’t in the TV room or the bedroom on a big screen set; it was in the bathtub as a frightened family huddled together around their iPhone.

But American television broadcasters have thus far failed in their promise to bring television to the mobile device on a widespread basis.

Ask any laptop, or tablet, or handset manufacturer why they don’t add the antenna and software necessary for mobile digital television (mDTV) and they’ll tell you it’s because there is a dearth of content available from the local TV stations. Sure, there was a much ballyhooed test of mDTV in Washington over a year ago, and a handful of stations across the country are actually transmitting, but the promise of using television spectrum to deliver to devices that aren’t in the bedroom or kitchen is just that, only an unrealized promise.

Without a doubt, broadcasting is the most efficient means of delivering common content to a large audience. Yet television broadcasters are not stepping up to take advantage of their spectrum to provide mobile services. Meanwhile mobile carriers such as Verizon Wireless are embracing broadcast concepts. The CTO of that mobile operator recently announced that their new high-speed, high-capacity LTE network would include a one-to-many broadcast component.

Television broadcasters continue to promise they’ll eventually do something. “Coming up later this year or early next is mobile DTV,” the TVNewsCheck article claims. That refrain has been playing so long that it’s now in reruns. Major device manufacturers took broadcasters’ assurances at face value a couple of years back, only to be burned when the content never materialized. mDTV was much ballyhooed at April’s NAB Show, but little beyond “Stay tuned for updates” PR has followed. [Note: my firm, Core Capital Partners, invested in mDTV technology].

Which brings us to the topic of the highest and best usage of broadcast spectrum. Verizon Wireless is investing billions in a new LTE network that will include point-to-multipoint broadcast capabilities. The vast majority of broadcasters, however, haven’t invested the less than $100,000 necessary to begin distributing mobile DTV. And all the while broadcasters rail at the Obama Administration’s proposal to allow some of them to voluntarily sell the spectrum the government gave them for free (while permitting them to exploit digital technology and move their signal on to another channel).

I’ve been mystified why broadcasters have declared jihad against the voluntary spectrum auction. Getting big dollars for an asset for which you paid nothing while still being able to run your traditional business over cable (the vast majority of its reach anyway) and maintain a broadcast signal at another point on the dial seems a pretty good business proposition – unless you really are serious about providing new and innovative services and need all that spectrum.

Actions speak louder than words and the broadcasters’ inaction on mDTV resounds like a thunderclap. The reruns of “mDTV is just around the corner” are, like an over-exposed sitcom, growing stale. Absent action the “we’re special, we’re innovative, we can’t quit using this valuable spectrum” argument rings hollow.

I still believe that many broadcasters are planning to offer mDTV and will not sell their spectrum. But they sure have a strange way of going about that. Harry Jessell is right, broadcasting’s future is all about mobile. What’s hard to understand is why so many broadcasters are running away from that future and in the process discouraging manufacturers from putting mDTV devices in the hands of consumers – even when they’re huddled in the bathtub.

Consumer-Facing Carriers

2011-05-03T07:07:00.000-04:00

“Never Pay for the Internet” the window posters proclaimed all over London last week. This simple five word declaratory statement sums up the challenge in the escalating debate between wireless network operators (especially in Europe) and the offspring of Silicon Valley.

Wireless carriers (in Europe they prefer to be called “operators,” a term that eschews the concept of carriage while emphasizing participation in a broader ecosystem) have been calling for the Internet companies to pay for access to their networks. This so-called “two-sided” revenue model has both the consumer and the content provider paying for use of the network. The operators argue that Google, et al, pay content delivery networks (CDNs) such as Akamai to facilitate the delivery of their content before it is handed off to the wireless network; thus, why shouldn’t they also pay for the wireless last mile?

The Internet companies, in response, point to the consumer as the appropriate party to pay the carriers. If the consumer wants the ability to receive ever-increasing amounts of data services they should pay for it, just like the consumer pays for more legroom on an airplane.

This is where the sign in the windows of London identifies the problem. Competition among networks for customers has put the consumer in the enviable position of being told they won’t have to pay for access to Internet services. “Free It” the advertisements of British network operator 3 proclaim to promote their unlimited data plan, for instance. The policies that created wireless network competition have trapped operators between holding market share and giving away capacity for ever-increasing data demands. So long as there is one carrier willing to offer its capacity at a low price (or for free), the other carriers must play along thus bringing those who run networks to loggerheads with those who use the networks.

While wireless operators are pinned down fighting other network competitors the folks from Silicon Valley have been operating behind the lines to gut the networks’ major asset. Knowledge of how the network is laid out and how consumers are using that infrastructure has been ripped off by Google and Apple. While the recent news media kerfuffle about Google and Apple devices storing and reporting user location information has been portrayed as a “bug” or a software “mistake” it is far from such an accident in reality. When Google pings its Android software 1,000 times a day with instructions to send information back to Google’s computers, it I hardly a “bug.” [Admittedly, “bug” was a description used by Apple, Google’s canned statement prattled about “a better consumer experience”].

One would think that the most important information a network operator has is information about the network itself and the behavior of its users. Google and Apple, however, got the network to rat itself out by collecting and transporting this information to be accessible by Apple’s and Google’s computers. The amazing thing is that the network operators allowed it to happen – but the fact that it did happen is prima facie evidence of how network operators are culpable for the decreasing importance of the networks themselves.

Perhaps it is understandable how a network operator could see the world differently from a consumer service provider. Nevertheless, the wireless world has moved from a network-facing business to a consumer-facing business. “I run a network” has been replaced by “I relate to consumers.” How services interface with subscribers in the differentiator – and there is still an opportunity for network operators to regain this lost ground.

Since Apple and Google have shown their true colors regarding consumer privacy, network operators could become the consumers’ privacy protector by not allowing such information to pass without consumer consent. It’s not that the use of information is bad – it’s whether I as a consumer have any control over the use of the information I create. A trusted wireless operator could become my information banker, securing my privacy and permitting withdrawals on my terms rather than Silicon Valley’s terms.

If wireless carriers are truly going to become “operators” participating in the broader ecosystem their focus needs to shift from running networks to managing the information created by the 21^st Century’s digital networks. The Silicon Valley mafia hijacked that information, but they could quite possibly be in the process of blowing their escape with the goods by exposing what they were really up to.

Rather than a Quixotic search for the two-sided payment Holy Grail wireless companies can go for the gold of the 21^st Century – a new paradigm for use of the information created by an all-IP network. The key to that shift is the information in the network itself. A company with a consumer-facing orientation would recognize it’s all about information, not infrastructure.

Channeling Nathan Kingsbury

2011-04-01T16:29:00.000-04:00

Theodore Vail must be grinning from ear-to-ear! Randall Stephenson, the current CEO of AT&T, is channeling Vail’s leadership of a century ago that built AT&T into the nation’s dominant telecommunications provider. The $39 billion agreement for AT&T to acquire T-Mobile leapfrogs AT&T into the leadership of the telecommunications medium of the future.

There is, of course, a “small” detail that must be resolved on the way to consummating that vision. The U.S. Department of Justice and Federal Communications Commission will have to approve the merger. The Justice Department’s review will focus on the merger’s impact on competition. The FCC’s review targets a more amorphous public interest standard. It is just possible that these reviews could establish new policy expectations that will govern all wireless carriers for the coming decades.

Theodore Vail is well known as the man who created AT&T by buying up other carriers and championing the concept of a “natural monopoly.” Less well known is Nathan Kingsbury, an AT&T vice president working for Vail, whose negotiations with the Federal government established the parameters of the regulatory framework that allowed Vail’s vision to flourish.

The so-called “Kingsbury Commitment” was a 1913 letter to the U.S. Department of Justice. In that letter Kingsbury, in behalf of AT&T, agreed to a turn-of-the-century equivalent of Net Neutrality by agreeing to allow independent telephone companies to connect with AT&T’s long distance monopoly. It also stipulated that AT&T would divest Western Union. As the AT&T/T-Mobile merger goes through the government’s review process the Justice Department, and particularly the FCC, will have the opportunity to establish terms and conditions which could become the Wireless Age equivalent to the Kingsbury Commitment.

The key tool used by government to oversee Theodore Vail’s “natural monopoly” was rate regulation. Such regulation is unavailable in the wireless arena, however, because Section 332 of the Communications Act prohibits its imposition on wireless carriers. As wireless rates have plunged for both voice and data such regulation has less impact than it did in the wireline era anyway. When each connection required an analog circuit, the cost of such a connection, and the return on that investment was a more logical nexus than today’s digital networks where the incremental cost of a packet of information approaches zero.

The Communications Act, however, does not prohibit the regulation of the “terms and conditions” of wireless offerings, nor does it prohibit the FCC from imposing merger terms and spectrum auction rules that might seem to be regulation in another guise. It is this authority which offers the Federal government the opportunity to impose on AT&T merger conditions that could define the four corners of wireless regulation going forward; rules that would ultimately impact all wireless carriers.

Telecommunications regulation is presently mired in a debate regarding the Communications Act’s Title II authority that was created to deal with analog, switched circuit wired networks, and the wireless digital networks that will define the future. Regulation designed around early 20th Century technology and monopoly market structure isn’t a perfect tool for dealing with distributed digital networks and multiple service providers. As the recent kerfuffle around Net Neutrality/Open Internet demonstrates, the courts look to the law (even if it’s outdated), and politics makes updating that law a challenge. Into this regulatory neverworld strides the AT&T/T-Mobile merger review.

The most important times in any merger approval process are the first two weeks when the acquiring company gets to define the discussion and the last four weeks when the concerns raised by others and the analysis by the government congeals to define the issues to be negotiated in the final outcome. AT&T shot out of the blocks brilliantly, framing their action in terms of the spectrum shortage and President Obama’s desire to provide wireless broadband to rural areas. Over the coming months those who were caught by surprise, as well as those who would use the review process to gain their own advantages, will have organized to present their messages. At the same time, the staffs of the Justice Department and FCC will be doing their analysis and reaching their conclusions. At the end of the day, if successful, AT&T will sign a Consent Decree with the Federal government dictating the terms under which the acquisition may proceed.

AT&T’s recent negotiations with the FCC on the Net Neutrality/Open Internet issue provide an insight into how the company deals with such a complex issue. Jim Cicconi, AT&T’s Senior Executive Vice President, is one of the smartest and shrewdest policy mavens in the capital. His negotiations with the FCC were key to the ultimate Open Internet Rule that AT&T endorsed and Verizon opposed. Recently, when House Republicans took out after the FCC’s decision AT&T stood firm in its support. While many Washington policy debates are approached as quasi-religious issues, negotiating with Cicconi is a matter of rational deliberation, not religious zeal. Cicconi led AT&T to find a middle ground on Net Neutrality/Open Internet with which they could live; there is no reason to suspect his skills won’t produce the same result again in the negotiations over the terms for the AT&T/T-Mobile merger.

Given the statutory paralysis preventing the Communications Act from keeping pace with new technology and market structures, a mutually-agreed-to set of merger terms could become the de facto regulatory template for the wireless industry. While most merger terms last for a limited period, a Kingsbury Commitment-like agreement can have a longer shelf life. The FCC has the opportunity to follow the new template in reviewing all future mergers, as well as in establishing the rules for future spectrum auctions. Finally, future policy debates would be shaped by an attitude of “we’re already having to do it,” which could dull opposing arguments.

Randall Stephenson may be channeling Theodore Vail, but Jim Cicconi sits astride a process that could determine the future of wireless policy, first for AT&T and then by extension for everyone else. Quite possibly the result of this merger decision will be far wider than the merger itself. At the end of the day we may be talking about a new era of wireless policy based on the Cicconi Commitment.

Paul Baran (1926-2011)

2011-03-29T16:44:00.001-04:00

A quiet giant died Saturday. The fact that you are reading this can be sourced to Paul Baran’s breakthrough concept of what became known as packet switching. Baran’s idea of a distributed digital network became the backbone design of the networks that define today and are redirecting the future.

During the Cold War U.S. defense planners became concerned that the central switching of the telephone network was vulnerable in the event of a Soviet attack. Because the message to launch an American counterstrike used the telephone network, an enemy first strike could easily destroy the critical switches necessary for a launch message to reach its destination. The Defense Department commissioned Rand Corporation, a California research institution, to come up with a solution.

In 1964 Baran, then a young Rand engineer, published “On Distributed Communications.” His idea was that instead of an end-to-end circuit that could be broken by destroying a switching point, the launch message should be digitized, broken into multiple pieces (“packets”), each containing digital instructions as to its destination, and routed through a hub-less network. Should an attack take out one link the network would simply reform using connections that bypassed the problem. The fishnet-like digital network of today was born.

Baran’s distributed network became the cornerstone of the doctrine of Mutually Assured Destruction (MAD) that by keeping the world on the brink of nuclear destruction successfully avoided annihilation. The ability of the U.S. command and control network to survive a preemptive strike and respond in force was so important that the U.S. government openly shared the details of the new network with the Soviet government so they could understand the folly of a first strike.

Paul Baran overturned the common knowledge about networks that had existed since hunter-gatherers had followed the paths of their prey. Networks had always been a point-to-point open pathway. The new network design was especially an anathema to those who ran traditional networks. The first-strike risk that Baran’s plan overcame was the consequence of the telephone company’s centralized architecture. Yet AT&T, the monopoly long distance provider of the time, refused the Defense Department’s request to solve that problem by building a distributed network. In the end the government built the network itself; after multiple iterations it became ARPANET and ultimately the model for the Internet.

I had the privilege of discussing the history of those days of discovery with Paul Baran many times. He would laugh as he recalled the challenge of trying to explain the distributed network concept to engineers at the telephone company. He said it was as if he was “speaking Swahili.” The engineers at the telephone company had been raised in an analog world and only thought in terms of setting up and taking down end-to-end circuits. The idea that connections could be made without maintaining a constant open circuit was beyond the scope of their imagination. The idea that messages would be sent by constantly establishing and then destroying a connection was incomprehensible. At one point in the effort to try and get AT&T to build the new network it was necessary to enlist the scientists at Bell Laboratories who were doing pioneering work in digital technology (but who understood analog) to act as interpreters so the analog engineers at AT&T could understand the concepts Baran was advancing.

One of the most endearing qualities of this giant of a man was his modesty. “The Internet is really the work of a thousand people,” he once explained. He likened the developments that followed his as like “building a cathedral.” “Over the course of several hundred years, new people come along and each lays down a block on top of the old foundations, each saying, ‘I built a cathedral.’” Paul Baran did not invent the Internet, but his discovery did enable what became the Internet. If we are to follow his cathedral metaphor, someone had to lay the cornerstone.

It was my privilege to call Paul Baran a friend. Imagine the unique honor of learning about digital networks from the man who developed the concept that made them possible. Consider the marvel of sitting with Paul when he would say, “I’ve got a new idea” (he started seven companies, five of which went public). He was a quiet man in his demeanor, but oh so loud in what he accomplished and contributed. We stand on the precipice of great new things because what Paul Baran left us.

Shooting Behind the Ducks

2011-03-01T07:58:00.000-05:00

“Europe Loses the Mobile Phone War” the front cover of The Economist declared the same week as 60,000 people converged on Barcelona for the annual Mobile World Congress.

The root cause of this development, the magazine observed, was that the mobile telephone had become a hand-held computer. Whereas telephones were all about networks and devices, portable computing is all about software and services. “This is where America, in particular Silicon Valley, is hard to beat,” the magazine concluded. “Companies like Apple and Google know how to build overarching technology platforms.”

The movement from a telephone to a computer has brought to the wireless carriers a double-dose of the earlier experience of their wireline brethren. Like the wireline carriers who chafed at their lines being used to enable high-margin Internet businesses, wireless carriers are channeling then-AT&T CEO Ed Whitacre’s famous 2005 comment, “For anybody to expect to use these pipes for free is nuts.” The double-dose that hits wireless carriers, however, is how the flood of new wireless apps (particularly video) over which they have no control is forcing them to spend billions of dollars on new “pipes” in order to keep their existing customers.

Bloomberg Business Week warned in December the relationship between wireless carriers and Internet companies “could turn into a cold war.” Certainly the buzz around Barcelona was all about whether the cold war would escalate to a hot one. European carriers, for instance, were calling on Internet companies to step up and pay for the infrastructure upon which they rely and on which their products are placing ever-increasing demands. “Without us, there is no Google,” France Telecom CEO Stéphane Richard told the International Herald Tribune.

The world’s wireless carriers have also banded together to challenge the apps providers at their own game. The 68-carrier Wholesale Applications Community (WAC) is a new carrier-based apps market which the carriers promise will be “open” in contrast to Apple and Google’s “closed” platforms. The fact that so many carriers could come together to provide an indistinguishable service reflects how they fear competition from each other far less than from the Internet companies. Once there were Holy Wars between carriers fighting for each point of market share through service differentiation. Now such differentiation efforts take a back seat to a collective response to the Apple iStore and Google Android Market.

When I asked a senior American carrier executive about these developments his comment was, “They’re shooting behind the ducks, don’t you think?” Not only was this a catchy metaphor, but it also had the added advantage of implicitly asking the question, “How do carriers get ahead of the Internet companies rather than always having to play catch up?”

One of the ways of adjusting aim is to use the information assets inherent in each carrier’s network. To date the ducks have been flying faster than the carriers in this area. Google stole the march on location-based information by getting each user’s phone to rat out its cell site information so it could be captured, stored, and subsequently reused by Google. Then, in a similar effort to disintermediate carriers the app stores collect (and seldom share) information on purchasers and their patterns. In an Internet Protocol (IP) world this kind of data about the user is the most valuable commodity – even more valuable than the data that drives the application.

The wireless success of the Internet companies has now recreated the problem that Google was created to overcome. There is too much available out there, including the 350,000 apps on the iStore and 150,000 at Android Market. Someone needs to help the consumer find their way through this morass to the best possible experience. Someone needs to leverage the personalization opportunities of IP to help the consumer have a better online experience. No one is better positioned to do this than the carrier who knows the behavior of each user across multiple platforms, as well as his or her demographic and billing information. With appropriate privacy protection, it’s an asset of value to Google, Apple and everyone else using the network.

Let the Internet folks do what they do best. It’s problematic whether any carrier or group of carriers could build up the head of steam necessary to out innovate the folks in Silicon Valley. Similarly, let the carriers do what they do best to manage the information necessary to optimize their network and the consumer’s experience. Efforts by app providers to know about their customer will always play catch-up to the information carriers already have. The carriers could help the apps world do their jobs better – and collect revenue from the apps companies – all the while helping consumers have a better experience.

In the process the carriers would also pick up an important bargaining chip that puts them on the side of the consumer. The Internet companies want the carrier to be the bad guy and recoup their investment on the backs of the consumer by increasing rates and charging for speed and throughput. The information asset strategy, however, creates an opportunity for carriers to turn the tables and stand with consumers. The wireless app experience can be improved and consumer costs constrained if Apple, Google and other app providers will purchase information from the carrier.

Nokia CEO Stephen Elop caught the mobile world’s attention with his February “Burning Platform” email to Nokia employees. The image of jumping from such a platform overshadowed another important message in the email which, although specifically referring to devices, could just as easily be referring to carriers. “The battle of devices [and networks] has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device [and network], but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices [or networks]; they are taking our market share with an entire ecosystem.” The bracketed references to networks are my additions to Elop’s text, but they don’t change the message. In the mobile telephone era it was all about networks and devices. In the mobile computing era it is all about the ecosystem. And the mother’s milk of that ecosystem is information.

There may be a cold war brewing between the wireless carriers and the Silicon Valley folks, but they each need the other to succeed. No one has more information about users and network activity than does the wireless carrier. No one is more expansive and creative in the development of new applications and services than the Internet folks. It’s time for a détente and the way to reach that point is through the strength of network knowledge. Leveraging that asset to produce a better product for consumers, new revenue for carriers, and new opportunities for Silicon Valley would shift the balance of power by redefining the target so as to no longer be shooting behind the ducks.

Networks are More Powerful than Nations

2011-01-28T16:16:00.001-05:00

“Internet and mobile phones cut off as Egypt braces for fresh wave of protests,” the headline blared. The unthinkable had happened – an entire nation’s online economy has been stopped in order to keep the people from communicating.

At the dawn of the Wireless Century, in 2001, the text message “Go 2 EDSA Wear blk” sparked demonstrations that brought done the Philippine government. Such text messages are now impossible in Egypt.

In 2009 the world watched as the “Twitter Revolution” took hold in Iran. The Egyptian government blocked Twitter as soon as the protests erupted.

Last week, for the first time in half a century, an Arab police state was overthrown in Tunisia. The organizing force for the revolution was Facebook. Cut off from the Internet, there is no Facebook in Egypt today.

To control people it is first necessary to control the flow of information among them. Penetrating that control is a key to dissent. During the Cold War fax machines and photocopiers were smuggled to Soviet dissidents to allow them to communicate. What seemed high-tech subversion in mid-20th Century appears quaint in today’s world of distributed digital networks and constant connectivity.

The actions of the Egyptian government, however, establish that network technology is not a panacea for progress. A new book, The Net Delusion, by Evgeny Morozov challenges those who assert that the new digital and wireless networks represent nothing but upside for freedom and human rights. Such a belief is “cyber-utopianism,” he writes, and is based on “a naïve belief in the emancipatory nature of online communication that rests on a stubborn refusal to acknowledge its downside.” Of course the new technologies aren’t all upside, and drinking the cyber Kool-Aid straight is certainly unwarranted. But history’s narrative is clear that the free flow of information can only be slowed down, not stopped.

The first mechanized information network – the printing press – gave the world the Renaissance, Reformation, and the Scientific Method. But it also propagated lies and was subject to content control by the church and governments of the 16th Century. When the Vicar of Croydon warned, “We must root out printing or printing will root us out,” he could have just as well been speaking in behalf of the Egyptian government’s reaction to digital and wireless networks.

The Vicar’s forces failed to suppress printing and his prediction proved prescient. The inherent freedom of information is enhanced by the multiplicity of its pathways to the people. Even today information is still getting out of Egypt. Certain DSL lines, kept up for governmental purposes, have reportedly been surreptitiously accessed. Dial up connections, while poor, are still operational. Creative dissidents have been able to access alternative pathways to report what is happening. Of course, the government’s repression means it is no longer possible to use Facebook or Twitter for organizing, but the genie was out of that bottle by the time the people took to the streets. Protest messages distributed widely before the crackdown alerted people to action and made it possible for them to organize. Putting the stopper back I the jug now is too late.

Shortly after the fall of the Berlin Wall, while visiting the CEO of MTV Europe, I was captivated by an inscribed photograph on his office wall of Soviet tank in front of a low, nondescript concrete building. The tank was guarding the TV station to deny freedom fighters the ability to communicate with their fellow countrymen. The revolutionaries, however, prevailed in taking back their country and the TV station. The inscription was from the republic’s new president, a play on MTV’s famous advertising campaign. The people had spoken, he wrote, that “I want my MTV!”

Controlling communication isn’t quite as easy as controlling the television station anymore. Networks empower the connected. The greater the network connectivity, the greater that empowerment. There was a revolution in Tunisia last week and an attempted revolution is underway in Egypt today. The underpinning revolution, however, is one we are all living – a connectivity revolution.

The networks that connect us also define us. One of those definitions is revolution. On a daily basis we live with how digital and wireless networks revolutionize commerce and culture. It takes events like those in Tunisia and Egypt to remind us that the new networks aren’t just changing how we order books and find friends. The digital revolution and wireless connectivity have opened an era when, as a state department official recently commented, networks have become more powerful than nations.

Let the Spectrum Market Work

2011-01-11T10:06:00.000-05:00

At first blush the crowds at this year’s International Consumer Electronics Show prompt the question, “Where’s the recession?” The cheek-to-jowl throngs were nowhere thicker than around the new generation of televisions and mobile devices.

The design of the mammoth LG booth physically delivered the message. On one side were digital televisions that connected to the Internet. On the other side were mobile devices, also connected to the Internet and also delivering video (including 3D). My bet is that at a future CES the wall separating the two areas of the exhibit will be gone. The concept of a specific product for television and another for mobility is so 20th Century.

One of the unsubstantiated rumors circulating around the show was that consumers were not buying as many TV sets for their homes as they once did. In part this was attributed to kids not brow-beating their parents for a TV in their room anymore because they watch video on their laptops and tablets (typically through WiFi). Inside that factoid resides the remaking of the television business.

Concurrent with the CES show, a headline in the Los Angeles Times announced, “Turner CEO says heavy Web exposure made company lose interest in reruns of ‘Modern Family.’” The fascinating nuance of this statement is that the flagship Turner service, TBS, became a “superstation” precisely because it offered time-shifting for syndicated programs that previously were licensed exclusively to one station in each market. Cable television was the choice alternative of 30 years ago; breaking the economics of scarcity to provide alternative viewing options. Now the business built on choice has been “out-choiced” by the on demand nature of the Web.

The tectonic plates of video distribution are shifting. Broadcasters used to complain about cable upsetting their applecart, now cable services are feeling the same new-technology pinch. The once solid and staid medium we called “television”, once again, has to come to grips with its future. Ultimately at the heart of those changes will be the wireless distribution of video product. Cicso forecasts that by 2014 wireless networks in North America will carry 50 times the data traffic they carry today and the vast majority of that throughput will be video.

This brings us to the issue that stands between today and the wireless broadband future: whether there will be enough spectrum available to carry the increased traffic demanded of wireless networks. While at CES I participated in a panel discussion regarding proposals for the Federal Communications Commission (FCC) to run a voluntary incentive auction that would reallocate broadcast spectrum for broadband wireless purposes. My comments were that the future looked bright for entrepreneurial broadcasters as well as for those who wanted to continue delivering the traditional single channel linear service – but individual broadcasters have to move beyond “we’ve always done it this way” and decide in which vision of the future they want to participate. When broadcasters “just say no” to any repurposing of the spectrum assigned to them by the government they are exacerbating what could become a national crisis as well as missing a business opportunity.

Broadcasting is the most efficient means of distributing content. The one-to-many delivery is what makes it broadcasting. How consumers are accessing video, however, makes it clear broadcasting is not the most efficient means of consuming video. The linear concept of, “This is what you’ll watch and when you’ll watch it,” was first challenged by cable, then by DVRs such as TiVo, and now by the on demand reality of content residing in the network cloud.

This isn’t to suggest broadcasting is a bad business proposition. The ability to deliver one channel of linear content both over-the-air and through mandated carriage on cable systems remains a viable business providing a public service. When television signals went digital, however, the ability to do so much more with the broadcast capacity opened up. As we approach the second anniversary of the digital conversion, however, broadcasters have done little to support the proposition that they can use the efficiency of broadcasting to satisfy the demand from consumers for flexible video consumption as opposed to when the broadcaster chooses to deliver the program.

Now, two years may seem a short time to expect action – but in a digital world it is a lifetime. Therein lies one of the issues: broadcast spectrum is being kept out of the hands of rapid-paced innovators, while those who hold the spectrum appear to be taking their time embracing the opportunities digital presents. During the time that broadcasters have been doing little with their digital capacity the cable industry has developed “TV Everywhere” to respond to consumers’ demands for viewing flexibility. In a similar period Android and iPhone have changed the nature of wireless services (and increased the demand for spectrum capacity to satisfy those services).

Under the digital television standard a single broadcast channel is 19.4 Mbps of throughput. A standard definition TV signal requires only about 2 Mbps of that throughput. What’s to become of the other 17+ Mbps – almost 90 percent of the digital capacity – to address the message being sent by consumers for choice in their video programming? The digital standard allows for non-real time (NRT) downloading of content that would help satisfy consumer demand. Thus far, however, no broadcaster has even tried to offer such a commercial service on their digital spectrum.

Gary Shapiro, CEO of the Consumer Electronics Association, accused broadcasters of “squatting” on their spectrum during his CES opening remarks. FCC Chairman Julius Genachowski reminded the CES audience that the percentage of viewers who watch television over the air as opposed to via cable or satellite has fallen from 100 percent when the broadcasters first received their spectrum licenses to “under 10%.” Yet a huge swath of 300MHz of prime spectrum continues to be occupied by broadcasters. Both men believe that spectrum could be repurposed through a voluntary incentive auction in which a broadcaster is given the choice of doing nothing, selling all or part of the assignment, or offering innovative services over the capacity.

For almost four decades I have listened to businesspeople tell government policy makers to “let the marketplace work.” There is no more effective marketplace than a voluntary auction where everyone is free to decide whether to sell, how much to sell, and at what price to sell. The marketplace for wireless spectrum has spoken through its explosion; now it’s time for the marketplace to be able to decide the best use of spectrum. There is no doubt that some broadcasters will opt to use their spectrum in innovative ways [my firm, Core Capital Partners, has invested in such a belief]. Bully for the broadcast entrepreneurs! The FCC should be encouraging and rewarding of entrepreneurial initiative. Just as clearly, however, some broadcasters will choose other options. It is essential that we get on with offering that option quickly so we can nip the spectrum crunch in the bud, spur innovation, stimulate investment, create jobs, and continue American leadership in wireless services.