Ross Mayfield: Bandwidth

Internet Access as a Human Right

Sun, 06 Jul 2003 19:06:54 GMT

Estonia's 2000 law that declared Internet access a human right is referred to vaugely in the CS monitor and being slashdotted.

This, hot on the heels, or should I say shoulders -- of the Estonian dominance of the Wife Carrying World Championships.

"We take too many things seriously," concedes Indrek Keskyla, the mayor of Vaike-Maarja. He blames the communists who ran this Baltic nation. "In the old Soviet Union days, we had to be serious, gray people," he says. Under communist rule, the village pushed to be the best farm cooperative in Estonia. Now, it produces the best wife carriers.

Communication and Collaboration Convergence

Tue, 17 Jun 2003 20:54:45 GMT

Uh oh, there's that word again. Convergence. The solution to all our problems.

Siemens has released OpenScape, which integrates phone, voice mail, e-mail, text messaging, calendaring, instant messaging, and conferencing services. Its all centered on IM to synchronize use of different modes of communication, with a SIP server (Session Initiation Protocol) for telephony integration. OpenScape 1.0, however, requires Microsoft's forthcoming Windows Server 2003 and Greenwich collaboration server. Its the latest in a long line of communication and collaboration solutions to leverage Outlook as a platform. And its estimated to cost as much as $400 per seat.

This may just be unified messaging redux, but Mike from Techdirt is right that it has potential as a productivity tool if its simple enough for people to use. People use many modes of communication. Optimize only a one or two and you may make communication in its entirety even more sub-optimal.

With the falling cost of more traditional communcations (original videoconference sessions were $100k a pop), putting users in the driver seat is not a bad thing. Problem is this approach of deep integration creates greater costs and risks.

Corporate IM is a good center for user management of complexity, but who knows if they have gotten this right. If as advertised, its designed to fit within workflow, it may be on the wrong track. Communication is not a process, its an informal practice whose patterns cannot be pre-defined.

Free Belly I

Tue, 17 Jun 2003 16:19:03 GMT

Phase 1 of the "Free Belly" project, to rid myself of the phone company, is complete. Installed Vonage last night on our home phone. Setup, if you haven't heared, is effortless. I estimate we will save at least $200 per month (we have a huge long distance bill, particularly to one tiny country on the other side of the world).

The one negative is when I did call in to track a shipment I recieved and answering machine. Aside from marketing execution, the one thing that could kill this company is poor support.

Phase 2 is bypassing the baby bell local loop, more on that later.

Land of Stonia

Fri, 13 Jun 2003 17:07:20 GMT

So Azeem is in Tallinn, Estonia and easily finds free WiFi. What a great country. Unfortunately I had to postpone our vacation to Tallinn this summer because of work.

In other news, Beware the Estonians: First Nigeria, now Estonia. Once again an Internet scam defrauded Alaskans.

Vonage, Hacks & Arbitrage

Wed, 28 May 2003 16:06:58 GMT

The way Joi and Gen are using Vonage is a new arbitrage method for international long distance. International telephony has always been about arbitrage (risk free profit). Technology driven cost reduction outpacing regulatory regimes that prop up prices. Here's a brief history of international long distance arbitrage and a suggestion for a next stage.

International telephony was originally governed by the ITUs Global Accounting Rate system. A body of national PTTs that would convene and negotiate bilateral settlement rates. For example, the US and German would tally up the traffic imbalance as measured in minutes and agree on a settlement rate. Problem was, country code #1 had significantly greater amount of outbound call volume. With the Public Switched Telephone Network (PSTN), to this day, calls are paid by the originating carrier to transit and teminating carriers. The US negotiated volume discounts that were significant for its outbound calls.

When the PC came around some smart entreprenuers realized an arbitrage condition existed and the technology to take advantage of it was affordable. They invented Call-Back. An individual customer living abroad calls to a PC in the US, enters the country code of the final destination number (the hub country or another) and then hangs up. The individual is called back by the PC while the PC calls the destination country and recieves a dial tone for the destination country. The settlement fee is paid from the hub country (the lower outbound US rate).

Next came Refile, which turned this arbitrage method from a consumer service to a wholesale operation. Competitive carriers in foreign countries (many were cropping up because deregulation was taking place at the same time, first in the US, then the EU and culminating with the Uraguay round WTO accord that liberalized 90 countries) sent calls in aggregate over International Private Lines to the US. A re-file carrier re-originated calls from the US to foreign countries, initially saving in most cases over 500%.

Calling cards allowed re-file carriers to provide consumers a way circumvent originating carriers and get to their re-file hub.

Next came Internet Telephony. Initially it was used for transit on private lines to take advantage of compression. Then some carriers used the public Internet for transit with some sacrifice for quality. Some new businesses like ITXC leveraged redundancy in transit to increase quality.

Consumer Internet Telephony didn't prosper until now because of the variable quality of transit as well as the interface at the ends. Vonage has changed that with some success (just reached the 25,000 subscriber mark). But its primary focus is domestic long distance. It probably doesnt provide the service internationally both because of the quality of transit, complexity of serving diverse markets and potential regulatory backlash in foreign countries.

What's interesting about Joi & Gen's use, and they aren't the only ones, is they are setting up their own arbitrage method -- originating calls abroad, transiting over the Internet and terminating through Vonage's network (mostly over the Internet) and re-file agreements. Vonage's greatest value is a persistent circumvention of local monopoly carriers (where most of the cost of a call resides because of the above driving efficiency in international markets), but its value for international transit is worth consideration.

It will be interesting to see what Vonage hacks arise. There are a few options created by its bridge feature -- If you're on the phone with party A, you can flash, dial #90, dial party B's number, # and hang up. It then calls party B and the call continues between A and B. A hack that allows you to call to your Vonage box from your wireless phone and have it bridge you to an international destination seems tantilizing.

A hardware hack to make the box more portable would be invaluable (I would rather pay for a dedicated DSL connection from a hotel room and then use Vonage to bypass their telephony toll trolling). Particularly with WiFi support.

When arbitrage conditions exist, as with wireless carrier rates compared to terrestrial or hotel customer capture, the market ultimately converges upon it. Vonage has the potential to be a platform. But if regulators try to stem its diffusion another call delivery method will just take its place.

World of Ends

Fri, 07 Mar 2003 05:41:48 GMT

Dr. Weinberger and I decided to sum up a whole bunch of stuff in one big site: World of Ends: What the Internet Is and How to stop Mistaking It for Something Else. Dr. W. explains more here.[The Doc Searls Weblog]

The Nutshell

1. The Internet isn't complicated
2. The Internet isn't a thing. It's an agreement.
3. The Internet is stupid.
4. Adding value to the Internet lowers its value.
5. All the Internet's value grows on its edges.
6. Money moves to the suburbs.
7. The end of the world? Nah, the world of ends.
8. The Internet’s three virtues:
a. No one owns it
b. Everyone can use it
c. Anyone can improve it
9. If the Internet is so simple, why have so many been so boneheaded about it?
10. Some mistakes we can stop making already

It all begins with Simplicity, turns out bandwidth is a commodity, and let's be stupid and not screw it up.

Obfuscated Competition

Fri, 21 Feb 2003 16:06:37 GMT

Kevin Werbach on the FCC decision:

It re-energizes the Bells' obstructionist strategy, and it takes away near-term competitive threats from independent DSL providers that might have spurred them to invest anyway. Verizon Senior VP Tom Tauke's quote says it all: "The future of telecommunications is broadband, and on this issue the commission appears to have moved in the right direction but may have important details wrong. Moreover, the future investment in the wireline network is tied to a strong financial base for the overall business." Doesn't sound like someone planning to "jump start investment in next-generation networks," as Commissioner Martin predicted. [Werblog]

The Bells already have a core competency in obfuscation. They can continue their misrepresentation of inventory and costs between their traditional and competitive networks. Only now they dont have to hide costs, just shift inventory to get the benefits of deregulation.

Google buys Pyra

Sun, 16 Feb 2003 04:29:04 GMT

Google Buys Pyra: Blogging Goes Big-Time
• posted by Dan Gillmor 07:41 PM
• permanent link to this item

NOTE: This is a slightly edited version of a special column running in tomorrow's San Jose Mercury News. We're posting it early to get the story out.

Weblogs are going Googling.

Google, which runs the Web's premier search site, has purchased Pyra Labs, a San Francisco company that created some of the earliest technology for writing weblogs, the increasingly popular personal and opinion journals.

The buyout is a huge boost to an enormously diverse genre of online publishing that has begun to change the equations of online news and information. Weblogs are frequently updated, with items appearing in reverse chronological order (the most recent postings appear first). Typically they include links to other pages on the Internet, and the topics range from technology to politics to just about anything you can name. Many weblogs invite feedback through discussion postings, and weblogs often point to other weblogs in an ecosystem of news, opinions and ideas.

"I couldn't be more excited about this," said Evan Williams, founder of Pyra, a company that has had its share of struggles. He wouldn't discuss terms of the deal, which he said was signed on Thursday, when we spoke Saturday. But he did say it gives Pyra the "resources to build on the vision I've been working on for years."

Part of that vision, shared by other blogging pioneers, has been to help democratize the creation and flow of news in a world where giant companies control so much of what most people see, hear and read. Weblogs are also becoming a valuable communication tool for groups of people, and have begun to infiltrate the corporate, university and government spheres.

Just three and a half years old, Pyra's Blogger software has 1.1 million registered users, Williams said. He estimated that about 200,000 of them are actively running weblogs. Pyra charges for some higher-capability services not available in the base configuration, but most of its registered users don't pay.

Google is known best for its search capabilities, but the Pyra buyout isn't the company's first foray into creating or buying Internet content. Two years ago Google bought Deja.com, a company that had collected and continued to update Usenet "newsgroups," Internet discussion forums. More recently, it created Google News, a site that gauges the collective thoughts of more than 4,000 news sites on the Net.

But now Google will surge to the forefront of what David Krane, the company's director of corporate communications, called "a global self-publishing phenomenon that connects Internet users with dynamic, diverse points of view while also enabling comment and participation."

"We're thrilled about the many synergies and future opportunities between our two companies," he said in a statement on Saturday. He didn't elaborate further on what those synergies and opportunities might be, but said more details would emerge soon. Users of the Blogger software and hosting service won't see any immediate changes, he added.

For Williams and his five co-workers, now Google employees, the immediate impact will be to put their blog-hosting service, called Blog*Spot, on the vast network of server computers Google operates. This will make the service more reliable and robust.

How Google manages the Blogger software and Pyra's hosting service may present some tricky issues. The search side of Google indexes weblogs from all of the major blogging platforms, including Movable Type and Userland Radio. Any hint of proprietary favoritism would meet harsh criticism.

Blogging was moving mainstream even before this buyout. Several weblogs draw a large readership, and bloggers demonstrated their collective power to keep an issue alive even when the traditional media miss the story, as former U.S. Senate Majority Leader Trent Lott discovered to his dismay late last year.

Major technology companies are seeing the potential. Tripod, the consumer web-publishing unit of Terra Lycos, recently introduced a "Blog Builder" tool. America Online is expected to be on the verge of doing something similar, and no one will be surprised if Yahoo and Microsoft do the same. Are more buyouts of blog toolmakers in the offing?

Developers of blogging software have been finding user-friendly ways to help readers of weblogs and other information find and collect material from a variety of sites. It's in this arena that the Google-Pyra deal may have the most implications.

More than most Web companies, Google has grasped the distributed nature of the online world, and has seen that the real power of cyberspace is in what we create collectively. We are beginning to see that power brought to bear.

Modelling the Web

Wed, 05 Feb 2003 07:06:57 GMT

Just came across an interesting 'Power Law' paper, published by a team at NEC, which offers some thought-provoking data: "NEC researchers discovered that the degree of "rich get richer" or "winners take all" behavior varies in different categories and may be significantly less than previously thought." The key is competitiveness: in very competitive scenarios (NEC looked at ecommerce sites) 'preferential attachment' resulted in distributions that were very close to power law. But, in less competitive environments, the distributions moved steadily away from power law. In fact, deviation from power-law distribution becomes an index for competitiveness. I wonder what the Weblog index looks like? The team also pointed out that 'preferential attachment' did not prevent the rapid rise of a new star (they cite Google)... [Chris Gulker]

This paper makes a bold claim: "The model accurately accounts for the true connectivitydistributions of category-specific web pages, the web as a whole,and other socialnetworks."

Now its known that link structure drives traffic and traffic in e-commerce drives revenues. The chart to the right (right most point being Amazon) is a clear example of a Power-law in effect. By this example, the business of the net is in the hands of the few.

Aside from a fit and viral node's unlikely emergence, this is the world we live in. Or is it...

In "less competitive" markets, such as the one to the left for photographers, the distribution is less skewed. NEC Researchers offer geographic concentration as a possible reason for this decentralization.

But I believe the structure of the net is changing because the cost of sustained entry has fallen. Blogging, Web Services and other decentralized models allow new nodes to develop linkages at a lower cost. And these links aren't just driving traffic, they are conversations -- Micro-content forming micro-markets.

As the Net evolves, the definition of a link becomes more refined, the notion of Local blurs and the emergent pattern may trend towards more shared opportunity.

Viruses and Network Scales

Sun, 26 Jan 2003 16:13:14 GMT

A confluence of exposure to theory and a related event just happened. Yesterday I posted on Duncan Watt's view of scale-free networks and the SQL Slammer virus.

The network proved to be resilient against the SQL virus. At its peak, 20% of messages were lost in transport (10 times higher than normal) with up to 200,000 servers compromised. It was the most damaging attack in 18 months, but largely passed in about 24 hours. Its a relative blip because of the patch's availability (its been available for six months, although having a single source for it during the crisis, Microsoft, slowed recovery) and it didn't carry a damaging payload.

Network theory holds that if a network is scale-free (an uneven distribution of the scale, or connectedness, of nodes -- otherwise known as a power-law distribution) it is particularly vulnerable to attack. When a hub goes down it has cascading effects. In contrast, a network where scale properties are difussed in a typical bell-curve, proves to be more resilient because it is more of a matrix than a hub-and-spoke architecture.

Watts suggests that if a network is scale-free or not depends upon how you define links, or relationships. If a SQL server is receptive to a virus, it allows a link without restriction, forming a scale-free topology. But as patches are installed, it increases the requirements for a link to form and decreases scale-free properties of the network. So one view is the Immune Reponse shifted the properties of the network from scale-free to an even distribution.

UPDATE: See Pete's disection of the worm.

Open Spectrum FAQ

Tue, 21 Jan 2003 18:53:09 GMT

Tuesday: Free The Spectrum. Open Spectrum -- spread the meme. This is an amazing, eye-popping idea that I've been hearing David Reed and Dewayne Hendricks talk about for a while. David Weinberger has done a great job distilling the gist of the idea and its importance into the Open Spectrum FAQ. Please read it.

Interference — which we've treated as as law of nature — is an artifact of the way radio were designed 100 years ago. If interference isn't an issue, then the reasons we started to license spectrum become irrelevant.

In fact, the core premise that has undergirded our spectrum policy has dissolved: There is no scarcity of spectrum. It does not need to be doled out. On the contrary, there is an abundance of spectrum.

Our current policies prevent us from benefiting from this abundance.

[istori/log]

3rd law of thermodynamics analogy: Bandwidth is energy and spectrum is a conduit

Adopting VoIP

Tue, 07 Jan 2003 03:02:54 GMT

VoIP is a simple idea and simply works [SATN] Bob Frankston has convinced me to adopt VoIP in my home (Vonage) this year. I'll save a bundle and fight the power.

Satellite Access

Mon, 30 Dec 2002 23:39:51 GMT

Kevin Werbach comments on the $156 million investment by Kleiner Perkins and others in WildBlue, a two-way broadband satellite company:

With DirecTV and many others abandoning grand plans for satllite broadband, one must be skepical about yet another effort. By 2004, terrestrial broadband should be widespread enough to leave only a limited market for satellite. But Kleiner Perkins and the other investors who put money into WildBlue must think they know something.

I'm equally skeptical of any investment in a market that has proved impossible to profit in at the scale a DirecTV operates. Kleiner must think there is a consolidation play here, perhaps with satellite radio operators like XM and Sirius.

[RatcliffeBlog: Business, Technology & Investing]

The failure of the current FCC's policy of granting quasi-monopolies by access type (DSL, CATV, Sat.) is quickening. DirecTV is also abandoning DSL efforts. Since Satellite can't compete in telephony, they are destined to be pure play TV. Cable will continue its entry into telephony and access. Cable recently consolidated again to the point where, according the LA times this Sunday, Comcast posesses significant leverage as a distributor over content providers and will go to war next year renegotiating contracts. This may mean favorable terms for satellite providers as contracts are benchmarked.

If your average consumer is faced with only the choice between ILEC DSL or municipal monopoly CATV, there is room for a third way. Especially if by tweaking TCP/IP settings latency is resolved to provide a comparable product in Satellite. And since it bypasses many of the rollout costs and scales well it may reach competitive price points ($10-20/month), WildBlue may have something. Something attractive to Satellite operators to acquire when awarded for being acquisitive again and competitive with other quasi-monopolies.

Lack of Scarcity?

Fri, 20 Dec 2002 16:53:16 GMT

Eric Norlin is working on a thought piece that suggests that abundance on the Internet in its totality drives goods towards the public domain and makes it hard to make money. This piece with which Doc agrees that Identity could deal with the "scarcity problem" as quoted in the previous post.

Eric, in his 3rd point, comments in his draft: [this point needs work: specifically, *how* it is that a lack of scarcity drives something toward the public domain.] David Weinberger comments in his post: That seems intuitively right. But the question is: what on the Net is in such abundance that it drives goods thusly? It's not the abundance of goods but the abundance of access to goods: you don't need a lot of capital to create and/or distribute digital stuff. (BTW, in such an environment, what is the remaining virtue of capitalism?)

I am a believer in Says Law, back from your Econ 101 classes, in which the market flocks to extreme abundance or scarcity. Says Law provides a natural equilibrium for all markets. If something is abundant and cheap, it is consumed until it is in equilibrium or even tips to scarcity. But let me try to help Eric with his draft.

The Internet in totality has three significant emergent properties:

Low transaction costs: this accelerates Says Law
Inherent optionality: The Net is the most option rich medium, primarily because of its openness (free options create more free options). Every layer in the OSI networking model creates options for use by the above layers. As David Reed says in That Sneaky Exponential, "The value of potential connectivity is the value of the set of optional transactions that are afforded by the system or network." When assets have economies of scope properties (high optionality) in a low transaction cost environment it further accelerates Says Law.
Commoditization: All goods trend towards commoditization. On the Net, the scale and span of the network and diversity of interests allow otherwise fragmented markets to be pooled, further accelerating the process of commoditization. All commodities prices also trend toward zero, as markets become more efficient in how they commonly define goods and contracts as well as develop mechanisms to transact them.
Rapid Obsolecense: The openness of the Net fosters innovation. That, combined with the above, results in shorter lifecyles and rapid depreciation.

For information goods, including software, the above implies a turbulent search for equilibrium that eventually tips to the public domain. For infrastructure, the above implies a volatile physical commodity market in backwardation (future prices are lower than spot prices).

The End is Nigh

Fri, 20 Dec 2002 07:06:32 GMT

The Bush Administration proposes requiring ISP Monitoring. The Bush administration is planning to propose requiring Internet service providers to help build a centralized system to enable broad monitoring of the Internet and, potentially, surveillance of its users. [Mercury News]

Guess ISPs will be investing in packet inspection afterall, might make the QoS discussion moot.

Death of Abundance

Thu, 19 Dec 2002 16:20:42 GMT

As I mentioned, Glenn Fleishman and Bob Frankston are having an interesting discussion on QoS. Let me lob in a perspective:

The capital markets will never accept a solution of abundance for QoS. Regardless of how one might explain that excess capacity is necessary to achieve quality of service, any carrier that portends excess will be smacked for creating a bandwidth glut. Abundance is risk.
There can be numerous tiers of service. One of the common criticisms of QoS is that there are wide variants of quality and translating these into service level agreements would result in an impractical diversity of contract structures. But other commodities, after standardizing other contractual terms have diverse tiers of quality. West Texas Intermediate Crude (WTI), the most liquid natural gas contract, has over 100 grades of quality.
Defining and agreeing to quality pays. Beyond customers paying a premium for quality, QoS and SLAs determine fungible goods and enable risk management. If David Isenberg is right, that carriers must move to become commodity providers of utility service, I would suggest that the value they can create is in:
- Reducing the operational risk of their customers through SLAs
- Reducing the market risk of their customers through contracts
- Standardizing inter-carrier SLAs and transactions
- Enhancing their systems to compete on their ability to rapidly provision for diverse edge requirements at a high volume
- Providing as much control to the customer as possible

This is less of a technologist than a marketeer's perspective, but I believe what's missing is the practicality of what carriers will adopt and be valued for.

DirecTV Broadband Discontinues

Wed, 18 Dec 2002 19:21:25 GMT

Its a sad day when your ISP goes under, but particularly when you thought you had picked a winner. I shudder at the thought of going back to AT&T for cable modem service or even worse to PacBell, and fear going to an independent ISP because I may absorb switching costs yet again. DirecTV Broadband was originally Telocity, a MDV-backed startup that had a great operating model, had great synergy with its satellite parent, and was providing a real competitive offering.

Unfortunately we are stuck in a quasi-monopoly state for each product.

We have some difficult news to share. With the dramatic change in the capital markets and the significant shift in the telecom operating environment, DIRECTV Broadband can no longer stand as an independent business.

It is our sincere regret to inform you that DIRECTV Broadband will discontinue operations. This email shall constitute DIRECTV Broadband’s 30 day notice of termination to you. Please be aware that DIRECTV Broadband’s network (including your email services) will remain operational for a minimum of 30 days from the date of this notice. We are working with alternate broadband providers to determine options for your broadband service, and as a result, our network may (but is not guaranteed to) remain operational for some period beyond such 30 days as we work through those options. If you wish to terminate service before our network is discontinued, please contact us at www.directvdsl.com. No early termination or cancellation fees will apply. In any event, you will only be billed for services received through termination of your service (whether terminated by DIRECTV Broadband or at your request).

Abundance vs. Prioritization

Tue, 17 Dec 2002 19:45:38 GMT

Glenn Fleishman and Bob Frankston are having an interesting discussion on QoS. Its the age-old debate of IP Traffic Engineering: do you concentrate on achiving QoS by building an abundance of bandwidth or by prioritizing traffic?

I had a similar discussion with Bob after David Isenberg's talk. I would like to add to this discussion, but I have to run and catch a plane.

Stupid Networks & Smart Business

Thu, 12 Dec 2002 23:40:52 GMT

Meeting and seeing David Isenberg presentation at Supernova gave me a different level of respect for his views. I subscribe to his newsletter and have been a believer in Stupid Networks. The difference is seeing how over time businesses are adopting his simple and elegant vision.

However, the problem I have always had with the Stupid Network paper and resulting world view is how it fails to define a role for network operators. The strongest arguement for Stupid Networks is that you can't centrally scale service and services (this is why SG&A is the highest of any industry, at 25% of sales), and if you push service and services to the edge of the network you have greater scale as well as innovation. The role left for network operators is to operate a dumb network. The problem is:

As Adina pointed out, centralized forces (network operators) seek to retain power,
There are many network equipment and software vendors seeking to enable network-based value-added services,
Without any alternative profitable business model, telecom will go with what it knows, the old way of doing business

This is not to say that David is wrong, its just that there is a hole in his arguement and he needs to plug it. Unless he can define a business model for existing players, the theory isnt pragmatic.

So here's my suggestion. Network operators are utilities. Adopt a utility business model that focuses on lean operations, efficient infrastructure, consolidated billing and commodity management.

Take advantage of the existing asset redistribution period, liquidate any network element that cannot be managed through SMTP. Throw away as much legacy OSS as you can. Develop self-service customer interfaces that are integrated with flow-through provisioning systems. Innovate in billing to provide it as a service both to your customers and trading partners. This is different from aggregating partner services, its suppporting their billing through an efficient web service. Price volatility for commodity bandwidth will increase over time. Manage that risk for your customers and they will pay you for it.

Being a Network Utility Operator would be a great business. The first to truely embrace this model will not only be more competitive, but supported by the innovations at the edge.

Rethinking Telecom

Wed, 11 Dec 2002 02:17:13 GMT

Andrew Chapman, Narad Networks
Mike McCue, TellMe
Michael Stumm, SOMA Networks
Andrew: Building ethernet switched networks on HFC. The network shouldnt be so stupid you cant do something with it.
Mike: Call Center, Directory Assistance, Comm Functions.
Michael: Broadband wireless DSL alternative in the last mile. (Last mile $500-1500 per sub via copper)

Kevin: why is there any hope at all for any of you?

MM: Telecom is a business, where there is change there is opportunity. ILECs needing to invest.
AB: Huge industry, we are the 3rd company I did with my co-founder in this space. Everyone uses the network. Has a bet on www.longbet.org that one of the ILECs will go bankrupt in 2007. CATV is the Rodney Dangerfield of the industry, but have change alot. Twice as many subs as PSTN for IP. Cox $250m/yr in enterprise businesses. Looking to grow their business, do new things and will buy on a good ROI model.
MS: 12-16 month ROI breakeven and it will be deployed. Look for where deployments are happening. They made a good shift from CLECs to ILECs which are buying. Soma offers 12Mbps, synchronous but shared and distance sensitive.

Kevin: US Broadband vs. Rest of World?

MM: Korea has greatest penetration of broadband, but that's under the current definition. If you really have broadband you never worry about bandwidth. We build a fully switched gig Ethernet service. This audience is stuck on a narrowband platform. SIP with unlimited bandwidth, distributed end points managing services. Net needs to know priority and economic rational. VoD experiments will not scale (compression barriers, server), need CES or IT end products
MS: Putting all the services on the end users requires cooperation of all sorts. Most end users have certain kinds of software that they cannot manage. Firewalls and content filters are moving further into the network.

MM: Give up on best efforts networks. Fully capable QoS network that can read and prioritize enable rich bandwidth.
AB: You have to have a balance between De/centralization. Its not just complete decentralization. (Centralized management, decentralized infrastructure).
MM: The network's awareness of classes of service is a central function. TWC wants to offer disaster recovery services in NY, but could partner with IBM to do so -- a balance of De/centralization. You have to allow people to make people to make money and invest when they think they can. You have to find a way to allow people to share in the profits.
Doc: Cox forcing him to buy Asymetrical? (nice consumer question, yawn)
MS: Flood the network, then shut it off to terrorize your nieghbors
AB: We dont sell to humans. SMB

Kevin: What will change in terms of applications?

MM: Call center with voiceXML $3-5min to $.03-.10 per minute. Directory with more services available at 411 through automation. Voice activated dialing, email -- 5-10 from now getting a voice prompt instead of dial tone (I guess dial tone isnt God after all).
AB: Migration of enterprise applications to SMB. Depending upon network based storage. Video enriched email, storage of personal video, video conferencing..
MS: More managed as services firewall, content filtering, conference calls (ahh...remember TimeShift?).
AB: Tools need to be created to allow users to create their own applications in P2P fashion. Like Blogging.

Kevin: Incumbents fighting it?

MM: They wont change
AB: Cable winning. More apps that are PC-like will complement
MM: Blogging like tool using voice using TellMe http://studio.tellme.com

Kevin: Who pays for the minutes?

MM: Phone billing infrastructure is incumbent opportunity -- (bah, not at when billing costs are 20% of revenues)
MS: Competition drives action. Either from small greenfield deployments or large guy gets aggressive
MM: SMS integration with Voice Messaging

Kevin: Web Services?

AB: Doesnt have anything to do with the web, it does with services. Doing things at Layer 7 that are interesting and people want to pay for.
Kevin forsees a movement in OSS towards a Web Service componentized architecture
MM: telecom guys want to install eBay in their plant, they dont get web services
AB: metro ethernet deployment becuase they support the applications people want to consume. CATV more open, serving these apps and will be more dominant.
AB: QoS is not anti-consumer, but its crappy because of the network its built on. Managing flows through networks marries willingness to pay with a service -- virtuous cycle.
AB: Amphone will be created to allow Universal Service to die.
MS: Reg mandated services are expensive because of the old network they have to run on
MM: Work with wireless then shift to wireline to avoid regulatory issues

David Isenberg

Wed, 11 Dec 2002 02:16:23 GMT

Note: David doesnt use the word commodity, I stuck it in below

Kevin: In my dreams I would come up with a simple idea like Davids that is so powerful and everyone gets.

Im shocked to have never gotten below layer 7 in the discussion today and have people still call it infrastructure. That's not infrastructure. Infrastructure is important and uncertain.

Today's news:

Massive failure by PTTs and ILECs, getting worse, and I can't wait.
Distance is dead, except where its being held back by regulation and monopoly
Yahoo BB hapan giving away modems, 12Mbps/ ~0.5 upstream 12000Yen/mo=~$15USD, started in April, took to September to get first 1M customers. 5M ADSL subs in an 80M person countries. 120k Fiber to the home (FTTH) customers. Growth. Cost of customer acquisition make him cringe

The Future (not evenly distributed yet)

VON in Atlanta, small company, Global IP Sound. Shrink wrapped bundled with a Compaq Pocket PC with vanilla 802.11 with telephony that sounded better than PSTN. WITH NO TELCO IN THE LOOP.
When the net is better than POTS, the cash cow goes away
SIP (Session Initiation Protocol): what HTTP did for documents, SIP will do for communications
POTS: Sure you can do Internet on it, you can do it with smoke signals too
Simple networks provide connections, not services. Providing commodity connectivity. Services are enabled by smart edge devices.
Gilder's Law outpacing Moores Law, Depreciation iinversely nverse, Engineering effort scales according to nobody's law.
End-to-End principle, 25-30 years old, similar to stupid network -- if you can do something at the ends or at the middle, do it at the ends to preserve your options, use of the network will be different in the future.
Internetworking shifts control from network owner to end user
Telephony yet another application, Bob Cannon and Bob Pepper at FCC
Winning apps not created by telcos, most haven't been discovered yet (SIP and presence management!!)
Old biz model
- Voice-monthly income
- network subsidized
- physical subsid
Stupid model
- apps are services -- a vibrant market
- network is protocol -- a commons
- physical a not subsidized -- he says the big question is the business model? -- the commodity business
Who owns and runs the network?
- Telephone company? Difficult transition to the horizontal model
- Cable company? Difficult to give up old video entertainment model
- Municipalties? 125 experimenting
- Utilities?
- New kinds of company?
- Customers?
Politics of End-to-End...big list of ideals vs. the Dark Side
GOLIATH LOST

Q&A

I posed the utility model question and he says Im right, but there are alternatives (he is right too)
Server should be at the edge of the network

QoS vs. Open Standards

Tue, 10 Dec 2002 06:18:53 GMT

Cory on Rod Smith:

Open standards and quality of service: pick one. IBM's Rod Smith is speaking at the Supernova conference. In his intro, he cites a lot of customer demand for both open standards and quality-of-service guarantees. Aren't these antithetical? If I'm running open standards, then the software at my end of the network can be set to abide by or ignore any signals send by the software at your end (as opposed to a proprietary system where both ends are welded-shut-boxes that always and deterministically do whatever the software author thought was best). That means that even though your software requests a priority level of x and a guaranteed pipe of y, you have no way of knowing whether my software is actually delivering x and y. All you can send me is a suggestion -- not a guarantee.

Not mutually exclusive. With two clients running open systems and each buying their own service level agreements, the clients could act in a manner similar to cognitive radios with open spectrum, but that's theoretical. But what Rod was talking about was not end-to-end, but enterprise-to-enterprise (which then extends it intra-enterprise to the end, mostly machines for grid computing). This is accomplished via:

VPNs with QoS guarantees, perhaps leveraging MPLS at least in the core of the service provider network
Companies buying near wholesale IP Transit agreements with traffic specific SLAs. Each leverages multi-homing that takes into account the cost of Transit and SLAs for each provider. Or is there an open standard Im missing?

What's not open about this all yet is standardization of tiers of QoS from Layer 3 and up. But layer 2 and down is defined by ANSI (a DS-3 is a DS-3). Or is there something Im missing.

Rod Smith, IBM

Tue, 10 Dec 2002 00:41:46 GMT

Fascinating to me, but much of IBM's new commodity management model, wasn't understood enough to be explored by the audience. So the focus was from web services to the consumer in the value chain. The missing piece was data commodities to web services.

On Demand

Responsive in real-time
Variable cost structures
Focused on differentiating
Resilient, Global

Drivers for Next Gen Biz Apps: inter-enterprise, integration & QoS. Coordinating decentralization

Requirements:

Integrated
Built on open standards - what's new is standard process is quicker
Virtualized
Autonomic

Question of QoS tiers for commoditization. This is not an issue, IMHO -- there are over 150 grades of West Texas Intermediate Crude WTI -- the largest oil commodity contract. I doubt anyone in the room gets commoditization, but they will.

Great questions in the summary slide:

What if integration costs went to zero?
What if IT disolves into the fabric of a company?
What happens when integration decisions happen at <web service> deployment time or connection time... or business contract time?

The real opportunity is accelerating the Innovation-Integration cycle.

Floor questions:

Tom from UCB asks for examples of web services that delivers business value today. WebBeacons took an internal app and ASPed it to eliminate 15 people who manually proceessed their trucking procurement 3 days to 4 hour turn around time, reduced cost by $1m. e2open, UDDI and SOAP, now up to 600 companies integrated.
Dave Winer asks about Patents again. IBM has not patented what's in SOAP.
Follow Marc's question on patents, IBM asks startups they work with to adhere to open standards (which costs them considerably) -- reasonable answers.
Isen: IBM had the world by the short hairs, but is now relatively decentralized. How do we help Microsoft change like IBM did?
- language change
- connected with customers to get their view of the issues

Waves and Things

Mon, 09 Dec 2002 00:12:56 GMT

Mitch Ratcliffe puts the Next Big Thing list in perspective...

While I can appreciate the focus that a "big thing" lends to folks with a business degree, the broader and more flexible approach to decisions about resources afforded by a historical perspective tell me that it is the Next Long Move, a trend that pulls people and organizations along new paths, that provides the richest opportunities. Trends are based on collections of things, not any one thing... A focal point-like "big thing" makes you subtract everything from the picture that doesn't fit. [RatcliffeBlog]

Schumpeter's Business Cycles (1939) proposed a three-cycle model of economic fluctuations or waves. Squeezing a fourth cycle between his second and third, we get...

Kitchin inventory cycle (3-5 years)
Juglar investment cycle (7-11 years)
Kuznets infrastructural investment cycle (15-25 years)
Kondratieff long cycle (45-60 years)

For Schumpeter, three Kitchins make up one Juglar and six Juglars make up one Kondratieff. Fitting in the Kuznets, we presumably have two or three Juglars to one Kuznets and three Kuznets to one Kondratieff.

Right now we are at the beginning of the next Juglar investment cycle. I believe what Mitch calls a Long Move is a Kuznet wave, a major adoption of new infrastructure that impacts all facets of humanity. We are in the middle of a Kondratieff wave, that of IT.

The next Kondratieff wave is what Zack Lynch is blogging about, the Neurotechnology wave. Zack speaks in waves, so if you want to learn more about the concept and history of waves, follow his posts.

I agree with Mitch that Things are not enough to base an cash or time investment decision upon, larger trends, or waves, need to be taken into account. However, I like lists of Things to be sure Im not missing any I need to invest time to understand. And when you find something that interests and makes sense for you, understand the wider context -- and go for the Juglar Jugular.

Next Big Things

Sun, 08 Dec 2002 16:59:10 GMT

John Patrick's list of five candidates for the Next Big Thing. [Werblog]

	Autonomic computing
	Blogging
	Grid Computing
	Web Services
	WiFi

John is about right, IMHO. I have been trying to think in non-Next Big Thing terms, but would add: Social Software, Personal Systems, and more to come. The good thing is we will be talking about 3 out of 5 at Supernova, with the other two in the hallways.