Telepocalypse

A Starmap with no point

Does anyone else see the irony in the last three words of this Techdirt story...?

Starmap Mobile Alliance Offers Inter-Carrier Data Services

Starmap, [a carrier alliance] including mmO2, Wind, Amena, One, Sunrise, Telenor Mobile and Pannon GSM, offers flat rate roaming rates and interoperable picture messaging [my emphasis].

Oh Lordy Lord, please don't make we wait any longer for carriers to agree what services I can use. Give me packet data or give me darkness.

Pretty talk

Hmmm, a left-handed cellphone. Nice bit of niche marketing. But what impressed me more were the looks of the device. OK, my tastes may be aesthetically challenged, but increasingly people make choices based on what their lifestyle products say about them as what they do for them.

This is Virginia Postrel's thesis in her recent book The Substance of Style. She argues that an increasing proportion of the perceived value of products comes from their form rather than their function.

Which is a problem if you're a telco supplying connectivity. Because you're stuck with a formless product. OK, you might be a cellular operator hoping to own-label some nice-looking phones. But anyone with design ability is unlikely to want to brand their creations under a telco banner.

Will anyone ever show their friends and neighbours around their new house and boast of the wonderfully luxuriant broadband service that Vodafone or Verizon have supplied? I think not.

Older and wiser

The Techdirt site has a pointed analysis of how the US carrier Nextel has outwitted its competitors by superior products, segmentation and marketing. A targeted vertical approach works wonders when executed well.

This brings to mind a lunchtime conversation today with some colleagues. I was asked what the biggest opportunities in telecom are. My immediate thoughts were firstly with low-end subscribers in developing countries. If I can buy two cordless handsets and a base station from Costco for 80 bucks, surely cheap manufacturing and a low-cost disruptive IP-based wireless network infrastructure should make a killer entry into the rural third-world communications space.

But the one that relates to Nextel was prompted by a visit from my parents last month. Some time ago, we bought a small digital camera for my mother. She loves it, but the screen and buttons are too small for her to see well. Where's the grannycam, Sony?

I'm sure there's an opportunity for the mass-market carrier to address the senior end of the cellular market. The obvious features are things like phones with bigger screens, keys without any tiny lettering for unused texting services, no frilly feature creep, simple UI and strong back-lighting. But the user experience goes much beyond that. I need to be able to add my address to my mother's phone book without her having to learn about triple tapping or web sites. I need to be able to see what's on her phone screen and do remote help. (Maybe she won't call the carrier for help -- that involves confessing to being an old person confused by badly designed new technology). Even the marketing and sales channels need revamping. A mature demonstrator in the supermarket foyer is much more appropriate than a bored teenager in an electronics shop.

Isn't it ironic to see the execs of telcos bleating to their shareholders about how cut-throat competition is eroding margins when they're failing the needs of the quickest-growing demographic segment? Perhaps their marketing departments are too inebriated with the glamour of media content marketing to the teens to care about real users with everyday needs.

A packet of rice cereal

My baby daughter understands stickiness. She explores its potential every day. Rice cereal all over her face and hands. The table. Her high chair. The ping pong ball she holds and plays with. The spoon we feed her with. The other spoon we give her to keep the last remaining hand busy and stop her grabbing the first spoon and flinging rice cereal over us too.

Looks like Vonage are getting into the stickiness game. They've clearly seen that there's no barriers to churn in their voice service. So they've always had a cunning exit fee to put some icky goo near the doorway.

4.6 Disconnect Fee
Customer will be charged a disconnect fee of $39.99 per voice line upon termination of Service for any reason or for convenience by Customer. The disconnect fee becomes due and payable immediately upon termination and will billed directly to Customer's credit card. If Customer has multiple lines, Customer will be charged a disconnect fee of $39.99 per line for each line disconnected.

[Special note to cellular subscribers who signed up via a call center: those $150 early termination fees are hogwash because most carriers have no means of retrieving the recorded voice conversation where you agreed to the terms, so they can't make the fee stick, if you excuse the pun.]

Today's announcement is they are issuing a WiFi phone. Presumably locked down to their service. They are taking a leaf from the cellular companies' book here. Once you've bought all their proprietary kit, offered at subsidised prices to drive adoption, you're less likely to leave. Even better for Vonage, a WiFi phone is less of a fashion item than a cell phone, and has an easier life, so natural obsolescence and decay of lock-in is weaker.

The trick is to charge a bit more than the market rate to existing subscribers, keep prices low for new subscribers via special offers, and keep the pay-back period for switching just a bit too long for most people to bother.

By co-incidence I referred a colleague to Vonage yesterday. His payback period for abandoning his traditional landline carrier for VoIP was about two months. A no-brainer.

So, my expert telecom advice to Vonage is this. If you want to know even more about stickiness, I'm willing to help. Just go to the contact page, and my daughter's consulting skills are only a call away. Very reasonable fees. Travel expenses and rice cereal supplies not included.

Peerless

We'll start today's Vonage news with their lower international rates:

United Kingdom 44 $0.02
United Kingdom (Cellular) 447 $0.22

Phew! A 1000% increase in price for calling a cell phone. Of course, it's not nearly as good as zero-cost VoIP, but landline calling is almost too cheap to bother cutting a bill for.

This price difference relates to an important behind-the-scenes part of the economics of telecom, which is how network traffic is peered. James Seng writes artfully about this as it relates to Internet connectivity. Somehow money needs to flow in the opposite direction to the bits.

The price differential here is that UK cellular subscribers are getting charged low prices to interconnect to the US phone network, but inbound calls face hefty fees. Furthermore, the end customer of a UK cellular network doesn't carry that cost personally.

As has often been noted elsewhere, the numbering schemes also help to drive this behaviour. In the US you can't tell a cellular and landline number apart, and the receiving party pays for incoming cellular calls. In the UK, cellular and personal services numbers begin 07xxx. The European SMS phenomenon is largely a consequence of high voice interconnect fees, which are in turn an effect of the regulated numbering system. The ubiquity of GSM phones and a determination to make children learn triple-tapping before they can daub their names in play paint are distant secondary causes.

Now, imagine you were a wicked telephone wanna-be oligopolist CEO stroking your groomed and oiled beard aboard the corporate jet. You are deep in thought, comtemplating the next way you're going to Zed your customer Gimps. Unfortunately those awful IP services that are undermining your closed telco products seem to have the wrong numbering system. Some fool didn't tie the IP address to the service provider or network! Oh, if only the first byte was the country code, the second the service provider, the third was the network type, and so on. Price discrimination would have been much easier. The fools! Anyway, we'll do what we can. Let's rewrite some of those peering contracts for our mobile data users. They can make outbound TCP and UDP connections under the old rules. But inbound need to be charged a premium. Unless your peer networks sign a deal, their customers can't initiate contact with yours without going through a metered telco gateway. You want to push the cost onto peers of your customer. And if you're the first mover, this could be a really sweet hidden little earner.

Of course, no telecom company is ever run this way. Ever. Really. Which is why calls to UK cell phones are so cheap. Not.

Circuit tripped

Don't you just love the co-incidence?

Verizon Plans Steps to Prevent Another Shutdown of 911 Line (via Slashdot.)

BT fire disrupts emergency services

So, in the New York case the network smarts get corrupted and raw bits spill all over the central office floor to drain into the Hudson river. I hope Verizon are working hard on a solution, because that two hour outage means they're going to have to keep the network up without any failures for over 500 years to reach five-nines again.

The Manchester example probably runs like this: fire damages cable, calls are re-routed, other routes become overloaded and congested. Root cause: I can't degrade on the PSTN to a simpler service like instant messaging.

Given all the incumbent noise about how VoIP and IP communications will support access to emergency infrastructure, isn't it about time someone questioned whether circuit telephony is a suitable means of summoning help?

OPINION://Marketing freedom

FTP isn't very sexy any more. After a long reign, it is overshadowed by its step child, HTTP. Web page delivery (and all those status codes and headers) paradoxically turned out to be a superset of uncomplicated general-purpose file transfer. FTP is even slowly losing ground on it's home turf of getting large bags of bits from A to B with the least possible commotion. Peer-to-peer (P2P) file transfer such as BitTorrent is a more attractive way of distributing large binary files without running up bandwidth bills or being bottlenecked. Grandchildren like SIP have fled the nest and don't visit as often as they used to.

But FTP will go down in the history books as a technology that changed the world. Why will is not be forgotten? Because it filled a need complementary to another phenomenon of its time, open source software (OSS). I can remember being a coder out on a client site as recently as 1994 and gagging for a copy of emacs. I didn't have any questions as to what text editor I needed since the alternatives were too awful to contemplate.

In the end I managed to grab a copy from a cover CD of a magazine, and carried that CD with me for several years afterwards -- a decent scriptable text editor saved the day on several occasions. I'd been using the Internet and FTP since 1989, but such connectivity was unheard of outside of an academic environment. GNU software was an obscure backwater of Unix systems development, and Linux had barely crawled out of the primodial bit soup. Nobody expected to get an Internet connection to be able to do software development.

FTP (as will as HTTP, P2P and SIP) would not have become ubiquitous if we were made to wait for a telco to build a file transfer network for us. We'd be waiting for the marketing department to to focus groups, market segmentation and pricing plans for every file type. The network group would have gold-plated the implementation (at ten times the cost) to include guaranteed delivery for high-end business clients. The standards groups would have won a jackpot on their frequent flyer miles to Geneva and Hawaii.

The value chain of OSS wasn't complete without two additional essential elements. The first was cheap networked distribution unencumbered by telco service-based price discrimination. Indeed, OSS is a two-way street -- someone has to write all that software as well as download and install it. The supply side was bottlenecked by access of the general coding public to technical resources, and to development community co-ordination sites like Sourceforce. If you were around in the era of bulletin boards, you'll have a vivid memory of what sort of cost and difficulty communicating in the pre-Internet era was like.

The second part of the value chain was distribution. For this you needed a pervasive protocol for file transfer, as well as universally available and interoperable server and client software. Generous universities (often funded in the background by hardware vendors like Sun) provided hosting and connectivity. FTP was (and still is) the technology that fills the distribution need.

The explosion in popularity of OSS has seen most of the software you need to perform everyday computing tasks fall to a price of zero. The exceptions are at the high-end: big iron databases, critical enterprise operational systems, and the unglamorous middleware that glues it all together. Even Microsoft Windows, despite the billions of dollars of cash it throws off, doesn't cost nearly as much as you would expect from a product in such a monopoly position. The wicked monopolist can't constrict supply to raise prices because there is an unlimited supply on hand of a good-enough substitute OSS product.

In short, the stupid network concept enabled FTP, and together they enabled OSS to occur and change the world of computing.

But the increase in supply and usage of OSS has seen its own problems. And we can probably learn from this experience, since the problems OSS products have had in a world of zero marginal cost and superabundance may come to afflict communications services in the same way. The same dynamics are in place, even if the suppliers offer proprietary solutions.

To take a product example, I recently decided to install an OSS spam filter on my home mail server. There are plenty to choose from. In the end I picked DSPAM (nice software, shame about the documentation). But the process of getting the right thing for my needs was frustrating and time-consuming. The problem is that at a price of zero the concept of marketing disappears. OSS has torn away the marketing barriers, and sites like Freshmeat and Download.com haven't really filled their place. Who is going to pay to analyze the needs of people like me, and pay to promote their message ahead of every other marketer who wants my attention to switch to their message?

Sites like Freshmeat do make an effort. They have download popularity indexes for different software. There are feedback scores. But there's a huge amount of noise from abandoned, irrelevant, duplicative or inadequate OSS projects. And ultimately, they aren't attempting to have any form of relationship with me. There's nothing that says you've already downloaded Postfix, Apache and Courier, and run a a two-user mail server accessed from multiple clients, so maybe server-based DSPAM is the spam filter for you.

The fully commercial Download.com server lacks context from which to advertise to me. All they know is I'm looking for some anti-spam software ('cos thats what I searched for). I'm not in the market for shareware (those Scottish genes keep my wallet tightly shut). The one thing they can't advertise is anti-spam software! So they're left with generic stuff like cars and gambling adverts that don't generate enough revenue to do any in-depth relationship marketing.

Lastly there's the supplier of the Linux distribution I happen to use (which happens to be Mandrake, selected largely at random). In principle they should be the ones bundling and marketing a pre-integrated OS to me. But their marketing department seems to have omitted to address the home server market. And one glance at their web site will tell you that marketing communications isn't their strongest point. Plus, of course, they've utterly failed to get their product pre-loaded onto PCs and into mass-market distribution channels. Blaming Microsoft sounds like a lame excuse for inaction, and a lack of boldness and innovation at distribution. There are plenty of alternative white box manufacturers and retails channels. Just ask Lindows and Wal-Mart.

At the end of the day, most core communications services boil down to a list of user authentication and profile data, a bunch of session protocols (remember our friend, FTP?) and a graphical user interface. If your data isn't particularly proprietary, and your protocol and user interface aren't plastered with patents, the service can be replicated easily. And the experience of Skype suggests that some (if not yet all) of the service can be distributed, removing all operational cost. Although Skype doesn't distribute authentication and routing, these will happen too with time. We're already seeing things like distributed P2P disk backup that were unthinkable until recently. Trusted computing technologies might have a bright side and resolve a lot of the integrity and security issues of distributed computing in an unsafe world.

Once you've eliminated the need for a central server and associated costs, any kid with a text editor and compiler can become a phone company. Communications adopt the same economics as open source software. There might be some rough edges, but these services will be good enough for most friends and family use or commercial internal use. They'll certainly fall within the acceptable performance range for a free product. They'll get better over time and subsume paid-for products.

Then Voompf! An explosion of simulacra communications services. None of which is popular enough to support the secondary ecosystem of services and customization that drives adoption success. We've seen this (writ small) with the X Window system and the infinitude of Linux desktops. Or photo albums. Or email clients. Or text editors. Ad nauseam.

Some will have proprietary data or technology and won't be OSS'd. Some will be too nimble for the OSS crowd to keep up. Some will tie their offering to some other money-making enterprise (which could be pipe provision, or server sales). Niches will need to be filled. There's enough of that to make Eli Noam's predictions of infopocalypse unlikely to be fulfilled. The low-end of the market may disappear, but new layers will always be added on top. But basic communications service (*not* connectivity) when implemented in a distributed peer-to-peer fashion is fundamentally a non-rivalrous resource which is to be priced at zero.

The advantage of the PSTN is that there's only one to choose from. Everyone orbits the same target. The fatal flaw is the same. Nobody can orbit a new target. If an endless cacophany of "free" communications services (VoIP, push-to-talk, IM, chat, etc.) continue to proliferate, the opposite may occur, and users may simply throw up their hands in frustration. They'll stop thinking for themselves, and submit their communications needs to an aggregator like AOL, Yahoo! or MSN. These are guaranteed to have other agendas than maximized user communication freedom and service innovation. (Think: futile media cross-selling, adverts and Windows lock-in respectively.) We're already seeing multiple Skype-alikes in the offing.

The biggest problems of OSS come from the weak execution of the functions usually done by sales, marketing and distribution. Understanding user needs. Communicating the existence of solutions to those needs back to users. Getting the solutions delivered into the user's hands. That isn't solved by any fancy new protocols or technology, since at heart it's a people coordination problem. If you are a young coder today looking to make a name in OSS, please bear in mind the biggest unsolved problem today isn't yet another son-of-a-son-of-FTP.

The same problem may be about to afflict personal communications. For the communications revolution to meet its true potential, it's time to think of how to automate ("open source") marketing. All those cell phone stores and TV adverts aren't for nothing. Believe it or not, that distribution system has a useful purpose. Only products that have real value get to cut through the clutter and justify their marketing and distribution costs. But once you cut out the telco rent seeking, how does the customer get the service they need, even if it is free?

One scenario is that the market just works its magic. Apple comes along with a seamless package of iChat etc., you pay your dollar to Mr Jobs and come away happy. Or someone like Google launches a better service, the message spreads fast by word of mouth without any marketing effort, and they win the race. Or Lindows innovates the distribution model and (maybe) cracks the market.

On the other hand, you end up with a dozen competing Skypes, just like you have a dozen competing Linux distributions. You end up in a dead-end coordination failure. Low barriers to entry, abundance and competition are good only as long as the competition leads to clear winners and losers.

To summarize, there's a danger that IP communications will veer down the path of open source software and become too fragmented. This will be because of a market breakdown in the absence of paid service. User demand cannot be communication to suppliers through the price mechanism, and suppliers that fail to meet user demand are not easily eliminated. The result is an unintended consequence of reinforcing the power of paid-for services in adjacent markets (e.g. hardware, operating systems, content and connectivity). This fate is far from inevitable, but the threat is real.

Governments and communications freedom

Two related links over at Smart Mobs:

Spreading rumors vis SMS could lead to arrest in Malaysia

Tax on SMS proposed in Philippines

The ability of everyday people to communicate peer-to-peer without routing their messages through a central authority is a direct challenge to, err, central authority. They want to monitor and tax your communication. Fully distributed systems like Skype, KaZaA and BitTorrent challenge that ability.

The distribution of smarts to the network edges is going to be a major test for (small 'l') liberal democracy (which is somewhat incomplete in both the above countries.) Will the rights of the individual right to communicate freely survive the entenched interests of the powerful central bureaucracy?

I wonder if the First Amendment in the US will mean anything in a world where you can say anything you like but you're deprived of the means of getting the message to its audience. Are we witnessing a re-run of the McCarthyite era, with the reactionary forces of copyright, indecent speech and monopolies of content and distribution? The communist era was about centralized vs. distributes control of economic resources. Is the central control of information resources the new communism?

Click your way to the clink

According to the wise men of Slashdot we bring you the following belated news story:

Man Accused of Attempting to Extort Google

A programmer has been arrested on charges of attempting to threaten Google with a software program he devised that creates phony clicks on pop-up advertisements delivered by Google.

This suggests that there is a market need for what you might call "negative digital identity". Rather than demanding to know exactly who you are and compromise privacy (full digital identity), it would only try to establish who you aren't. Confused? OK, here's how it works.

When you click a link at Google, they want to know if you've clicked it before. Advertisers will not use Google if they believe they are being gamed into paying for fake clicks by fraudsters or competitors. Are you not one of the people who've been here before? Yes, my head hurts too.

Google can try to fake negative identity through things like requesting IP address, but that fails in the face of so many proxies and NAT boxes. Two identical requests from the same IP address could indeed be from two different people. Cookies aren't secure in the face of fraud because of the client is untrusted.

I guess the technology would center around a third party who would have to issue the user with redeemable tokens. Your ISP would be the natural source. The tokens would be unique and do not identify the requesting individual or enable tracking of repeat individual visits. However, the issuer would offer a (paid for?) service that would test for set membership. Is this token in this set? (In other words, is this user in the set of users who have clicked this link? Google doesn't care when you clicked before, if you did.)

An economic incentive is required to encourage user and ISP participation. I guess the value this provides to the end customer (advertisers with Google, sellers on eBay, etc.) is the economic pull that can make the value chain work. Maybe kickbacks to the user from the ISP. There needs to be a way to associate the tokens with HTTP requests. Plus disincentives to users to share their identity (due to potential personal financial or reputational loss.)

Ta da! Preblem solved. Anonymity preserved, abuse of service curtailed. Except the minor detail of about twenty years waiting for the infrastructure to catch up. Yes, the system might leak a bit if you keep swithcing ISP and identity providers. But it's about managing fraud, not eliminating it.

The same technology could be applied to other sensitive situations like account registration. Have you already got an account? Only people whose negative identity is "not in the set of people who've registered before" are let through.

There surely must be a way of preventing repeat fraud without forcing everyone to reveal their true identity all the time. We have to find a way of enabling people to create digital identities at will, but not abuse and abandon them without consequence. Technologies like Project Liberty just aren't going there -- it's all about centralized (but distributed) corporate control over who you are, not personal control over who you might be. We need something better.

Kith and kin

I just want to pick up on a few things that at first glance seem unrelated, but may have a common thread.

David Weinberger notes how the the Internet has imposed the informal "Dave" name on him, rather than the "David" he is used to as his moniker. The use of a colloquial name is just a symptom of a much deeper shift in term of how people in (for want of a better term) "online communities" relate to each other. You can have a semi-personal relationship with a much wider social circle.

Moving on from this very individual example, Howard Rheingold famously documents how personal wireless technology is creating changes in how social interaction happens. I've experienced this myself. Once my brother was picking me up at Heathrow airport, and our arrangements consisted of a flight number and "see you there". So I was standing outside arrivals with my mobile phone, trying to locate him. "You're next to the Heathrow Express lifts?" "Yeah" "Well so am I and I can't see you!" "Near WH Smith?" "Yes!" "By the arrivals escalators?" "Yes". Eventually we twigged that the Terminal One domestic and international arrivals are on different levels, and we were only 10 meters apart -- vertically, not horizontally. The phenomenon of such ambiguous meeting rituals is well documented. Distance is a function of more than geometry.

An unanticipated consequence of the Internet is change to the human genome. Yep. You read that right. Sat opposite me is my Lithuanian wife, and sleeping soundly in the room next door is our daughter. It's no secret among friends and family that I met my wife on-line while she was doing her PhD in Edinburgh. No Internet, no chance we would be together. No wife, and our wee monster would have remained a twinkle in the eye. And that would be one less Anglo-Lithuanian-American in the world. (Oh yeah, and if it wasn't for email I wouldn't have stayed in touch with the friend who encouraged me over to the USA, so the Uncle Sam would have one less citizen by birth...)

The ability to meet with like-minded people over greater geographic distance is changing how we mix our DNA into future generations. On one hand we're less likely to marry the cousin twice removed next door. On the other, maybe we're more likely to marry someone with extremely similar interests and outlook, because we can filter the field more tightly. (Perhaps one day when bar flirting our Bluetooth phones will be negotiating a genetic match with each other as well as passing phone numbers back and forth?)

So, what's the common communications industry thread to these? The profundity of the social, economic and demographic change wrought by the Internet and wireless technology is only just beginning to be seen. Wikis at conferences that change the dynamics between platform and audience, blogs that cause political change, instant messaging in the enterprise changing the power structure during meetings. Some brought about by the end-to-end freedom of the Internet. Some a by-product of closed -- but unwired -- carrier services. But the changes we're seeing are much deeper and harder to predict that the relatively superficial services conceived in the initial boom era. What we're called. Who we know. Who we are. We most certainly live in interesting times.

The conseqence of this complexity is that it is almost impossible to understand the uses and drivers of new technology. The most successful communications products tend to be simple ones that can be bent and hacked into multiple uses. Think text messaging and camera phones. Complex products that have all the use cases burned in at conception are likely to fail.

Threats and menaces

Two coincidental threats to end-to-endism have appeared on Slashdot recently. The first says that AOL are planning on blocking access to the retail web sites of spammers. At first sight this makes one want to whoop with joy as the baddies get a good kicking. But it sets a dangerous precedent, because at what point will AOL deem some commercial or political speech off-limits to its users?

The second is about how the FCC is looking to extend its regulation of profane speech. The focus is on traditional non-interactive media. (Hey, you can still remember the stuff you used to watch to zombify your brain, before you found the Internet, can't you?) It isn't a big leap to imagining these sorts of speech-impeding regulations arriving on-line. Whilst the USA may have first amendment rights to squash such government intrustion, much of the rest of the world does not. The end-to-end nature of the Internet is as much threatened by misguided social regulation as technical filtering.

The end-to-end network isn't supposed to (overtly) discriminate against any particular message passing over it. But network is not just a set of cables and routers; the highest layer of abstraction is a connection of people and ideas. Unwanted filtering can occur at any level of the stack, even levels not modelled in the traditional network architecture stack.

UPDATE: This article on how the CAN-SPAM act has done nothing but legitimize spam contains a related nugget.

The Can-Spam Act gives spam recipients no recourse against spammers, even when a message does clearly violate the law's requirements for legal unsolicited commercial e-mail. Only government agencies and Internet Service Providers (ISPs) have any enforcement rights under Can-Spam.

That means the end points have been dis-empowered in favor of placing control in the hands of those at the center. Again, end-to-end is subverted by social and legal means, not technological ones.

Skyperlicious

I've noticed that Skype has changed the way my household communicates with the rest of our family. Even though we still have PSTN access to each other, we very rarely use it. We've become reluctant to interrupt each other without some form of presence indicator telling us it's OK. If someone is online, they're not depooing babies or watching a movie. We talk for much longer, but in a more relaxed way. The PC in our living/dining area has speakers and a webcam -- we don't use headsets. My wife can chat to both her parents at once, not serially. It doesn't feel like a phone call when your family are chatting with you while you make dinner. When my parents were over in Kansas City, we were sat around the dinner table chomping away, nattering with my brother in London. The whole anxiety that you need to say something meaningful to justify the payment of money to a phone company evaporates.

Some of these things could be done with the PSTN and a speakerphone, but most cannot. We could have done it with earlier VoIP products, but the installation effort was too much. My parents can operate Skype without me having to remote access their PC using VNC to drive everything for them.

The endless association of telephony with the PSTN has had an unintended effect of damaging the vocabulary we use to describe voice communication. The words you use constrain the way you think. Is Skype telephony? I think Bob Frankston nailed the problem of terminology in this article.

I was reading about Skype's business plans and had an evil thought. A lot of those PCs on the Skype network have a back-up dial-up modem connection as well as broadband connection. If my wife wants to call a friend in Lithuania (usual price from USA: 14 cents/minute), why can't she just Skype her parents' PC in Vilnius which would then bridge her into a local-rate PSTN call? Obviously, only nodes that trust you would be willing to let you place calls with their outbound caller ID, but it would totally undermine the economics of long-distance toll calls. The phone company can't detect it, even if they tried to outlaw it.

The funniest thing is how user-generated content is the ultimate driver of P2P networks, because the users (and not a media company) own the copyright the all the content.

Dislocated

This quote (under "considerations") hidden in the comments of The Feature on location-enabled presence had me guffawing in my executive swivel chair:

This technology might do for stalking what hand guns did for murder.

Oh! The unforseen consequences of technological progress...

Arnie's namesake?

According to Jeff Pulver, a profile has appeared for Arnold Schwarzenegger on the Orkut social networking service. Somehow, I suspect that being Governor of the state of California doesn't leave much time for e-mingling with undersexed and overconnected Valley geeks. In this case it doesn't matter much. But if you're engaging in a blind date or first-time business transaction, truth in identity is a matter of real concern.

This really echoes my earlier point: digital identity matters. And the hook from digital identity to the analog you is what really really matters, because ultimately value is only created in the physical world, not the virtual one. That hook could be endogenous, where Orkut directly verify your real identity (or get a third party to do it for them). Or it could be externally supplied, where the Arnie profile on Orkut gets a reputation through another channel as truly being that of the man himself. Since I don't see too many mentions of Orkut in Arnie's official bio, I'd recommend you reserve a table for one if Orkut-Arnie drops you a line offering an intimate luncheon date.

The telco angle? There's a copper wire or two heading into your home. The true value of that wire may not be in the data that can be sent over it. After all, the physical wire is better off being melted for scrap and replaced with a strand of glass. The value comes from the fact that it's a real pain to fake the physical end-point of the network. That physcial end point, validated by a 3rd party, is super-important data. (See last year's article on a value model for identity for more details.) Yeah, there's clip-on fraud where someone hooks into the network at an unauthorized point. But I suspect that there's a limited number of people willing to scrabble about in the bushes outside the Governor's mansion with a set of crocodile clips just so they can pretend to live there and create an Orkut profile attached to that address.

So not only has the identity system for future real-time communications yet to be built, I don't think we've even begun to analyze the requirement that system will have to meet.

Knowing me, knowing you

Someone else is also having problems with nuisance calls. This tells us that the identity infrastructure of telephony needs updating or replacing. I only want to receive calls from people who are willing to assert their identity. Today's telephone system doesn't enable that. Technically, it could on the current switched infrastructure, and it is a matter of governance that holds us back. In reality, it won't happen that way. The hardest part if creating identites that can be persistently pinned onto real people, who then carry liability for what they do. Services like Hotmail only have a weak value to the identities created because the only barrier to getting one is a turing test to prevent automated registrations. I can create and abuse as many accounts as I like.

Will it take government action to solve this, or can the market do it? The problem is that creating a compelling match between a biometric identity and a virtual one has traditionally been the role of government. Think driving licences, passports, social security numbers, and so on. Should governement try to make those into platforms for commerce? Sounds like a complex trade-off between the interests of the state, its population and it the commercial sphere. A political quagmire.

Or is the credit card in my pocket with my photo on it and a chip embedded a better basis for a communications identity solution? In the tradition of branded brands will your future cell phone say "Handset by Nokia, Network by Verizon, Identity by Citibank"?

The identity infrastructure for the future of communications has clearly yet to be built.

Madrid

One short comment on the disgusting massacre in Madrid. The Register notes that yet again the phone network can't cope in emergency situations. Will the authorities eventually come to see the cause of the problem? All those voice calls and messages had to be routed through centralized telco systems. They are inflexible and capacity-constrained. Handsets are unable to peer directly, and the messaging applications are unable to degrade gracefully under network load.

What if someone had spotted one of the later bombs but couldn't phone emergency services due to network load? What if there was an instruction to clear certain areas but no means of distribution?

Moving beyond traditional telephony is becoming an issue of national security. Two changes are needed. The obvious one is open end-to-end networks. The less obvious one is an identity infrastrcture that encourages people use the resulting possibilities in a responsible manner. If you cry wolf, you had better be serious.

Anyway, I'm sure there are many people today with more serious issues than the lousy phone system, and my thoughts are with them.

Open network, closed identities

Caught in my inbox today was this snippet from Wireless Week:

Wireless Seeking Own Internet Name Structure

Mobile Internet sites of the future likely will have their own domain names, much like the .com and .net names everyone is used to for the wired Internet. [...] What the naming structure will be hasn't been decided, but it falls under the general heading of a "mobile Top Level Domain" and could turn out to be ".mobile" or something else. [...] The initial investors in the effort include three carriers -- 3, Orange and Vodafone, plus the GSM Association, HP, Microsoft, Nokia, Samsung Electronics and Sun Microsystems.

This could be a very sneaky way to bypass the open infrastructure of the Internet. What if the network were open and end-to-end, but the resources on it are only locatable once you've paid your fiduciary tributes to the mobile operators? What if different naming sub-domains were allocated to specific services, and you could price discriminate that way?

Very, very, evil. I'm impressed.

All your customer are belong to us

Saw this advert in my Yahoo! mail account:

Well, can't say I didn't tell you. How do any of these carriers think they're providing differentiation and lock-in? How can they justify to their shareholders handing over the customer relationship for a few short-lived measly bucks a month?

Ah! What whacky world of telecom! Doncha just love it?

Networked insecurity

I've been reading an interminable discussion over at El Reg on cyber-terrorism.

Now, there only seem to be two really significant threats:

• A small number of systems that control important analog things (e.g. water treatment, nuclear power stations, air traffic control) get attacked.
• A large number of generic PCs get their hard drives wiped.

The first threat is fairly easily contained. Such systems tend to be bespoke, complex and relatively simple to secure using well-known techniques. Thus they are amenable to only localized attack. Serious as that is, it won't end civilization as we know it.

The second threat can be contained too. Separation of applications was achieved in mainframes and Unix in the 1970s. Journalization of changes and the ability to replay changes was a solved problem when I was still working out how walk and talk. The only missing piece is for Bill Gates's minions to pull their fingers out and implement an operating system where the OS and applications are safe from stomping on each other; each piece of data has a responsible application (which we have today with default handlers); any application can read data; but applications that don't own the data need the permission of the user or controlling application to make updates; and any updates can be reversed ('cos storage is cheap cheap cheap, and we can store a lot of changes in our undo buffer.)

Hey! Sounds like an Oracle database...

The always-on hyper-connected world isn't going to result in a cataclysm. It's a telepocalypse for the voice carriers, not a telegeddon for the public.

I don't get it

So, Vonage are upping their distribution ante by selling through Circuit City (via GigaOm).

PSTN-alike VoIP telephony is a business with essentially zero marginal product cost, and is open and competitive with no significant barriers to entry. The appropriate unit price in such a market is ... zero. The only costs are associated with the formal setup procedure of issuing a telephone number. Telephone numbers are (sadly) a finite resource and can only be issed to real people in real places, a check that costs money to do using a credit check or real-world distribution channel that can verify identity and eliminate duplicate requests. Thus users will pay for their own equipment, and an up-front fee to join the PSTN-alike network.

As VoIP increases, interconnect costs to the PSTN evaporate: users can route their calls over the connectivity they've already paid for (a-la Skype). No need for centralized SIP proxies and the like. Just a directory service like Free World Dialup, just populated with E164 (i.e. telephone) numbers, shared between VoIP providers. (This all looks suspiciously like ENUM, a tragicomic farce of the circuit-switched voice industry to "get" packet data. Another day.)

There is no future service revenue in vanilla voice. It's a fools gold rush.

Replacing telephony

My eye was caught by this quote over at Corante from Paul Haverstock, Architect, Real-Time Collaboration Business Unit at Microsoft:

RTC Vision: to enable information workers to work together in real-time to solve business problems more effectively and rapidly by providing software and services that provide

* presence-based multi-modal collaboration, in context, with seamless transition to non-real-time [slow-time]
* easy to use integrated contextual extensible end user experience

* a server-service continuum providing universal availability

* servers integrated seamlessly...

* enable same place, remote attendee, and mixed collaboration

[...]

Q: SIP/Simple
Paul: Yes, Microsoft has built on SIP/Simple, and we are committed to moving forward with it.

Now he doesn't mention voice explicitly, but it's clear that voice is part of the plan. Just look at first generation tools like NetMeeting. I can tell you now that the telco I'm sitting in isn't even beginning to see this for what it really is: a pitch to replace telephony as current performed. Goodbye clunky conference calls. Goodbye unusable voicemail systems. Goodbye voice service revenues.

People often say that voice calling is just an application that runs on a general-purpose packet transport. But from Microsoft's perspective they're wrong. Voice isn't even an application -- it's just a feature of a collaboration suite. The exchange of presence data and synchronization of a collaboration over time is where all the action is. Talk of creating business advantage in legacy telcos by integrating wireline and wireless PSTN service is hilariously naive in the face of the challenge that Microsoft presents.