A Networked World

Ross Gittins on the Money

The SMH's economics guy Ross Gittins does some pretty good stuff on a regular basis, Howard's crossed line on Telstra is one of the best. He sets sail with this gem.

WHAT was that about the Howard Government being a great economic manager? It has stuffed up the sale of Telstra from the beginning and there's probably more disarray and disaffection to come. The root cause of its mismanagement of the telco is clear: its obsession with privatisation for its own sake.

And hammers pretty well every nail all the way in.

Worth your 5 minutes.

Yellow Pages Does it Again

Maybe there is something that happens when you are the predominant life form that atrophies the brain in the face of new, more agile, more distributed forms. Being the Yellow Pages certainly seems to have a blinkering effect.

   

She started it as a hobby - a listings website that was inspired by Wikipedia and Craigslist. But 15-year-old Rosa Blaus' initiative appeared to have backfired yesterday when she learned her website had infuriated the company behind Yellow Pages.

   

The teenager, who set up the Yellowikis site with her father Paul Youlden, has been accused of attempting to pass it off as a legitimate arm of the telephone directory. Yell, which owns the Yellow Pages brand in the UK, this week confirmed that it was taking legal action to force Miss Blaus to hand over the Yellowikis name and the site's contents.

The crucial mistake here was not to try and "protect" the brand, which in any case comes off as petulant and unjustifiable, but in trying to steal the intellectual property of the Wiki.

Not only does Yell not have any right to the information aggregated on Yellowiki, but Yellowiki doesn't have any right to it either. The infomration is added, updated and owned by the people who put it there; but Yell doesn't get that and couldn't resist the temptation to score an easy win and get someone else to do their work for them.

I mean, monstering a 15 year old? Stealing her candy? How hard could that be? Harder, and more damaging than it looked. First of all, there is no sign that Yellowiki is trying to pass itself off as anything but a business directory. As for stealing someone's brand, give us a break

It even looks as if Yell has abdicated its use of the terms Yellow Pages and even a claim to the name of the colour Yellow.

By the way, as Yellowiki helpfully reminds us, "the term "Yellow Pages" and the "walking fingers" logo were trademarks, but have been in the public domain since the 1950s when AT&T failed to renew the trademark registrations. This gave rise to a small but fast-growing "independent yellow pages" industry.

Tom Evslin at the Stanford Summit, talking about Telcos and VoIP (and worth a read in its own right) encapsulates the problem.

   

The telcos are afflicted with the incumbent’s dilemma:  they could embrace the new technology and hasten the death of their traditional wireless cash cow. They might survive better that way.  But they’ll be worse off next quarter and the quarter after that. And might have to write-off the assets currently on their books if they recognize the disruption.

That’s why upstarts who enable the disruption won’t have to worry about marketplace competition from the incumbents early on. Regulatory “competition”, of course, is another story.

By the time the incumbent feels the disruption, the problem is already too big to control and demands too many resources to compete and, in any case, wrecks the economics of the business model. The only recourse (taken by telcos, RIAA, MPAA, MS, the media businesses etc) is to call in the lawyers.

But in espousing the capitalist free market, they have already bought into the final stage of the process, (Evslin again) "the rates they’ll be able to charge in competition .. won’t pay the interest on the debt incurred to build those networks. So bankruptcies will be required to lower the cost basis of these assets and make them affordable.

It all sounds so simple when its someone else's business circling the drain, its not so much fun when the requirement for bankruptcy is pointing at you, and a 15 year old kid has her finger on the trigger.

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A Fight to the Death

Gordon Cook quotes Tom Vest in a response to Doc Searl's Zero in the Middle follow-up on World of Ends because Tom nails the problem that besets everything since the beginning of the dotcom boom and permeates the whole discussion on Net Netrality.

This thing is a fight to the death for the Telcos. There will be, there can be, no quarter given by them or to them; and everything is at stake; everything. Either they control what information we can have access to, rationed by price, or they collapse as an industry.

In many critical ways although the distance across the net from one end to another should be blazzingly (sic) fast, the middle is not empty and the current owners of the end LEC and MSO have a territorial imperative on which their survival depends. They must defend their monopoly on the end points in order to enforce scarecity and keep their rents high by making sure that the bandwidth reaching the ends is rationed.

If the Telcos fail to keep their controls in place they will not just settle into some gentle middle age; they are already stretched as thin as a party balloon, their debt loads are significant and their margins are already having the daylights kicked out of them. All they have in the locker is the right to tax the traffic and control the speed.

No, it is not fair that they want to tax data according to its economic value, any more than a toll road gets to tax a truck load of chickens or a truckload of bullion or an ambulance on its way to an emergency differently based on the economic value of their contents or their purpose. But that doesn't matter, when we talk about network neutrality, when we insist that packets get handled equally we are leaning a sword against the heart of the telecommunications companies and demanding that they fall on it.

For the first, and possibly the last time, those who see the internet as an open, democratic, inclusive, participatory environment are going to have to say, "these ideas, these people, these organisations, these policies and practices stand between us and what we want, and there is no reasoning with them nor negotiating with them nor compromise with them, it is them or us".

They have bought off the political process, they are lying to the people using their media mouthpieces and they are in cahoots with those who want to control not our use and access, but our information; the policitians who want alternative voices silenced so they can get on with the job of owning and ruinning the planet.

And you can be sure that if it takes killing the internet to achieve those ends, they will kill the internet, in a heartbeat. Gordon says,

The lesson so far in North America is that a telco simply cannot compete on an open access basis. They must either maintain their strangle hold over the local loop or die. I am happy for them to DIE. I think the next five to ten years will see a global struggle to kill them off.

Without their transformation, killing them is the only choice. The ones in the US i don’t believe are capable of transformation.

He is right. But being happy for them to die is no longer enough. It is them or us.

Tags: network neutrality, world of ends, telecommunications policy

The Swedes Do It Again

You may have gathered that Sweden is one of my favourite places, mostly because of the great people I meet there, but in part because as a nation, Sweden gets telecommunications in a way that most other countries don't. And they are doing it again. From today's SMH Overseas mobile call costs set to tumble.

Swedish company Rebtel will launch the service in 30 countries, including Australia, on Tuesday.

Australian customers travelling overseas who sign up for the service will pay about $1.36 a week to call home, plus 5 cents a minute for mobile-to-landline calls and 20 cents a minute for mobile-to-mobile calls.

More Media Mashups

Jon Husband pointed me this morning to Thermo[SAT] which touts itself as

an initiative from The Society for Arts and Technology [SAT], explores the evolution of internet-based media and the ways it is enabling individuals and groups to produce and share what they create. It will also offer analysis and opinion on the related potential for social, cultural and economic impacts.

More specifically, the first phase of Thermo[SAT]’s life will focus on a set of developments that is already underway - the Web-based transformation of the traditional radio, TV and cinema industries and the emerging arena for services like IPtv, podcasting, photostreaming and videoblogging

These developments are creating an environment in which individuals and small groups can produce and distribute their work as easily as the large networks. This capability is a recipe for creative disruption and innovation. At the other end of the changing distribution channels … the increasingly interactive media users, who can choose what they want to watch or listen to, and increasingly when, how and where.

They are going to be V Busy as we all try to figure out what on earth is going on in the media space. After years of declaiming, "The Internet Changes Everything" we really are seeing what that means, in the business models of media companies on the money end through to the democratisation of production and the distribution of distribution.

The World Cup is already a testbed for FIFA, now it looks like its also an R&D project for Lycos. Frank Barnako reports that

Almost nine months ago, the CEO of Lycos Inc. said he had plans to turn his company around and eventually take it public. One strategy would be to earn money allowing people to upload homemade video. Back then, few people had heard of YouTube.com, but what Alfred Tolle described sounded a bit like what YouTube is today.

Except that it accepts files. Lycos, Tolle said, would provide audio and video editing and production tools for people to produce their programming online.

Tomorrow, when FIFA World Cup kicks off in Germany, Tolle's company will have four "embedded" reporters who will be the focus of an effort by Lycos to do more than report scores and show highlights. "They will be testing new technologies, kind of an 'alpha' platform, for products to be introduced in the next three to four months," explained Brian Kalinowski, operating chief of the Waltham, Mass.-based company.

Their job is to produce daily vignettes, "with a lighthearted and satirical approach to the culture of World Cup," Kalinowski said. "They will also be testing techniques to let us deliver high-quality, even high-definition, video from our platform, which consumers may eventually be able to use to distribute and monetize their content."

What? Can we read that again please? Consumers get to use these tools to distribute and monetize their own content?. Is this what Rupert Murdoch meant when he said that he wanted his site to "be the destination" for bloggers? It certainly looks a lot like Shirky's Mass Amateurisation of Publishing from 2002. It might even be the kosher offspring of the Chevy Tahoe Fiasco.

"We need to position ourselves as the content destination for creators and consumers," he continued. "I would like to give people the opportunity to share in advertising revenue we would get from people watching and listening."

Suddenly the idea of a "content destination" has a different ring, not a place I go to get content, but maybe a place to which I take content.

In light of the development of YouTube.com, Tolle clearly saw the wave before many other people. His idea, however, includes something extra -- a profit incentive.

I'm sceptical about the last bit, I think if his tools are good, he will see all the traffic he could wish for as people upload their stuff and have fun, and other people take the stuff that is already there and make something else of it again. And what will it be for, all this endless mashing?

Snacks. Consumers Turn to Web for 'Media Snack' Fix. From TechNewsWorld.com.

"Consumer-generated content [such as] YouTube is the millennial version of 'America's Funniest Home Videos,'" said Jack MacKenzie, senior vice president of Frank N. Magid Associates, a media research firm. However, now it's portable and offers users a huge community to interact with.

Charlie Todd, 27, posts to video sites because he enjoys "the ability for your users to rate and comment on your work," he said. He also posts because he doesn't have the server space or bandwidth to host memory-intensive video. Todd is the founder of Improv Everywhere, a New York-based improvisational comedy troupe that organizes heavily planned "missions" around the city to make people laugh, and then posts the results on the different video Web sites. They garner high ratings in the process.

Higher ratings means more views, which push the videos onto the front pages of the sites, which then guarantees more views. If it's good, it stays on the home page, said Arik Czerniak, CEO of Metacafe. At Metacafe, a top video could get half a million views in 24 hours. "You don't need to get lucky ... because we've streamlined the viral process, if something is good it will be noticed by the community. You don't need to have 1,000 people on your mailing list," he said.

The fundamental question is why this is so much better than traditional media fare and an answer is that it lets us do something that has been smacked out of our lives for too long, it lets US Play. Call me a Philistine if you like, but there are no redeeming social or humanitarian values to be gained from "Everybody Loves Raymond" and its ilk, none. Numa Numa, or the Brokeback Mountain trailer for Back to the Future or many of the hard case snippets on YouTube are no better as great art, nor any worse; but they are great generators of social currency, both directly for their creators and for those who email the links to their mates or blog about them or talk about them over the water cooler.

The revolution may not be televised, it may come in a torrent instead.

The Video Phone Fallacy

I got thinking about the Video phone thing when I saw an item today on the BBC about 3GSM in Barcelona. Despite the rep's insistence that video wasn't the be all and end all of 3G and that operators would be offering services, he then went on to talk exclusively about video clips, TV programmes, video calls and not a single word about services that 3G might be able to implement.

It reminded me of all the talk in the past about how people could get services to their cell phones and the ones quoted were always share prices, weather and TV guides. And deep down we knew that, like Iridium phones, the demand for those services was, and is trivial beyond words.

I think I can see how we keep gravitating back to the idea of video calls and equally, I think I can see why, in fact, we really aren't interested.

Video calls are a technology driven outcome, as companies compete to offer ever more technical enhancements to their products, be they handsets or networks, inevitably the race becomes one of gadgets at one end and bandwidth at the other. Cramming the most possible functions into the smallest handset connected to the fattest pipe is the only technologically way they have of competing because there is an absolute limit to the size game unless we want to have the think surgically implanted.

The challenge then is to find streams that eat the broader bandwidth so we go from skinny 3k voice calls to higher fi music and eventually we are forced to look at video as the only kind of stream that doesn't fit into a smaller pipe and, making a virtue of necessity, they announce mobile video as the next killer app.

BS.

From a purely human psychological perspective video phones encroach nastily on an area that we are very uncomfortable in. Many people don't like having others take photos of them, the idea that turning a camera on themselves just so someone else can watch them talk is terrifying. Remember that public speaking is one of the most frightening things most people ever contemplate and most of them head for the hills.

Entailed in public speaking are two concepts that scare us a lot, witness and record. I've seen it for years as a broadcaster, slap a microphone in front of the most voluble opinionated joker and they turn instantly into bumbling dribbling idiots. People hate the idea that their words are being recorded and witnessed by people somewhere outside their control. Cameras are even worse, hence the many hours of video garbage shot doing vox pops for TV.

The other personal issue is privacy; holding a device to our ears, or talking into an earpiece cord is fine, we even forget how public we are and rave on at the top of our voices because the intimacy of the process acts as a security blanket. But force us to hold the device out in front of us, pointing in our direction, while we talk into it, and the whole thing gets disturbingly demonstrative and most of us ain't. Oh, and while we're at it, making sure that it IS pointed at our faces while we talk, and at the same time watch the other person on the screen and gesturing with it all and we need to be exhibitionist octopuses before it will work, let alone be a selling point.

The other game is downloading video and here there is a whole new set of problems.

The first is that we have followed with video/TV the same trajectory as we did with music, a steadily rising level of technical excellence until we reached, with CD in the audio case and flat screen TV in the other case, a level of technical reproduction that exceeded both our sensory capacities and the inherent quality of the content.

The music business underestimated the threat of MP3 because it was a lower technical standard than CD and, since all "progress" had been measured in technical terms thus far, they assumed that technical standards was what we wanted because that is what they could provide.

But it wasn't. MP3 is a perfectly acceptable technical quality because most music is worth listening to at about that standard and most of us can't hear the difference. I have three flavours of tinnitis myself and my top end cilia are long dead. Younger people, brought up in a high volume world are probably worse off than me.

Same with video. One reason we haven't rushed to mortgage our souls for digital is that the quality of the content is pretty well matched by the visual reproduction of a good flat screen TV, and that's it.

On the other hand, nobody is going back to 78's in audio and we sure as hell aren't flocking to 3cm screens to watch the footy. And we wont, they both fail on the other end of the content/ technical quality continuum.

Network operators are planting themselves in a Pareto trap if they depend on "content" to make a profit. They will find themselves drawn inexorably into having on tap the kind of "content" they think their customers might want. Far from charging content providers for the delivery, they will end up having to buy it themselves; and then they will stuck with the reality that 80% of the revenue comes from 20% of the content, while the other 80% of the content is the profit.

Not only will it be a hiding to nothing on the buying end, it still wont deliver the kind of transaction volume that will turn a profit for the network. Nevertheless we still get people like Bill Gajda, chief marketing officer, GSM Association delivering a page of sleeping draft that keeps saying;

The fact that we can now watch television on the mobile phone is an arresting one. Technologically, it's brilliant. As a new market medium, it's unassailable. Yet mobile TV is just one application from a whole new armoury of content and services becoming available to the mobile user.

Yet can't, in several hundred words, find a single one to mention beyond TV to your mobile. In language that, frankly doesn't belong in polite company. On the other hand Andy Oram at O'Reilly Media gets it pretty well right. Network Neutrality and an Internet with Vision

Meanwhile the guys at FON are in the process of implementing David Reed's realisation that there will be no business case at all when each new connection to the network brings more bandwidth than it uses.

Australian Telco Deathwatch

Because the telecommunications business has enormous economic momentum, it takes a while to turn it aside and even longer to stop it dead, but Australia's Telstra looks like it is entering the final stages.

After the installation of what the Sydney Morning Herald calls an American junta [Gang of Four's revolution backfires] to oversee the business, said Junta has opened up with all guns on the regulatory environment, trying to turn Australia into the kind of telco free fire zone that is wrecking the US business.

Despite his religious (ie undemonstrable) faith in privatisation Aussie Prime Minister John Howard finally spat the dummy. But the Yanks at least have dumped this mess into the open, the previous Telstra regime turns out to have been wallpaperers of real skill.

The Revolution will be Small, Fast, Cheap, Distributed

Last night I went to a small Spanish restaurant in Sydney, the waitress whipped out her HP WiFi PDA, tapped the table number, the items on its menu, entered the numbers for each dish and sent it straight to the kitchen via the accounting system and moved on to the next table to take their orders.

Sometime soon I expect to be able top login to their system, forward an invite to a bunch of friends who can check out the menu and prices before agreeing on the time to join me for dinner, and probably order their dishes at the same time. It will be cool, but it will be trivial to the difference that this technology, small, light, handheld, cheap and networked, will make in places where poverty is the main dish, with a side order of exclusion and poor health is the dessert.

On Skype, Nobody Knows Where Their Dog Is

LOL

I was on Skype last night with my colleague Ulla Skiden at the Stockholm Challenge when my dog, who is given to these things, burst out barking on the other side of the room.

In Sweden, Ulla, who also has a dog, immediately yelled at Alice to shut up. It says something for the audio quality of another great, free, Internet tool that a dog in Sweden can get bawled out for barking in Sydney.

News Corp Bustup -Was Lachlan Pushed or Did He ESkype

Its pretty clear that the recent bust at the top in News Corp was connected to a possible deal between the media company and the Internet phone leader. And frankly it would have been the best possible link for those of us interested in a free (as in speech) and open Internet.

As David Isenberg has been chronicling in all its sordid glory, the incumbents in both Cable and Telecoms in the US are marching steadily towards destroying the economic and social value of the Internet to protect the profits of companies whose time has gone but whose political contrib.. ahem, connections, are still strong.

The possibility that the biggest media hammer on the planet might have had a vested interest in an open system to protect one of its investments could have brought Murdoch's clout to bear in ways that no telco could resist.