Telepocalypse

Irreconcilable

So, Vonage is planning to launch in the UK in December.

At the same time BT are offering free VoIP calls as long as you buy their connectivity and rent a phone number from them.

Repetez apres moi, the correct price for voice service is zero. At least one of these two companies is hot bread. No prizes awarded for guessing which.

In fact, I suspect you'll never notice that the price has become zero, because voice calling will just be bundled into something else that has defensible economic value.

Benefit concert

I was up in London earlier this week, and saw some billboard adverts from Three and O2 pushing their 3G video messaging services.

Oh dear, or deary me. When will this industry ever learn? You could see the shareholder value ebbing away in front of your eyes. Both were positioning themselves based on features or mushy coolness. But consumers don't buy features. (And they certainly don't buy technology, no matter how cool -- "Now with Bonus UMTS".) They buy benefits, and none of the marketing communications illustrated a compelling situation where you would have used a video phone if you had one.

Astute readers will no doubt muse whether the promotional approach is a result of the lack of actual benefits of video messaging. Remember this isn't real-time video -- I can see what you can see -- so there's little sense of "being there" for the recipient.

I just don't get it. And, judging by their approach, the carriers' customers won't be getting it either.

Anecdotally yours

It's hardly a statistically meaningful sample, but my landline phone is a torrent of pish. Another scam call today -- fully automated telemarketing fraud, no less. And one call which went dead straight after answering.

I get people calling for take-aways, telemarketing for my former tenants, calls for Mr Spence, numerous calls that drop right away, and lord knows who else. More than half the calls I receive are of no value to me. Am I going to have to install an Asterisk PBX just to filter calls from friends and family, and do Turing tests on the rest?

"Hello, this is not a voicemail system. You still have a chance of speaking to the owner of the house. Firstly, please press 5 star hash 4 to indicate you are human. Thank you. Now please speak the name of the person with whom you wish to speak. Your entry will be compared with our database. I'm sorry, large pepperoni with extra mushrooms is not in our directory. Please try again later."

Oh the irony of the gold rush of VoIP arbitrageurs rushing to interconnect with and re-create POTS on IP. The patient is sick, terminally ill. Time for a compassionate dispatch?

Present and correct

Earlier this week I mused on how the audio component of telephony might evolve. To add some editorial balance, here's (literally) a picture of the future from the presence side of the house.

I can tell you're impressed. I am. That picture tells you all you need to know about my household, and frankly is all you're going to find out too. The rug by the door where we put our shoes. It tells you who is home. And you know the house is warm because I'm not wearing my slippers. And you know we're not asleep because the light is still on. I'm tempted to rig up a wireless webcam and make a permanent web page of it.

Forget those presence icons in your messaging client. Your grandchildren will laugh at the superficiality of it. Presence is vastly richer and more complex. There are the clearly digital extensions of presence. What TV station is on (don't call me during the movie), is the cooker on, is the bathroom light on (don't you hate the phone ringing while you're doing a dump?). And then there will be softer, fuzzier forms of presence that require human interpretation. A dozen pairs of shoes? We've got a party going.

Knowing whether I'm online is increasingly irrelevant in an always-on world. What you really want to know is my contextual situation. How likely am I to welcome an interruption? A picture of my smelly slippers is worth a thousand presence icons.

Erethizon dorsatum

I don't normally just quote other people's writings without having anything to add, but I just can't top this.

But listening to telephone company executives talk about the coming world of Internet-based communications is a bit like watching a naked man trying to hug a porcupine. It's an ugly sight, but it's darn hard to tear your eyes away.

Hat tip: Andy.

It's a cover-up!

According to Andy Abramson, Comcast are rolling out VoIP:

Five Cities will be unveiled Feb 11th with another 50% of all Comcast covered in another 6 Months. The goal is to have 100% of all Comcast covered by the end of 2005. My source says that Comcast accelerated having entire country covered by a year.

My goodness. <irony>Lucky I can get Skype coverage in my area, otherwise I'd be buggered!</irony>

Incorporated!

Haha! I'm now a CEO. Telepocalypse Ltd is officially a registered company, number 275827, listed at Companies House in Edinburgh.

Apparently someone else had already tumbled to the name I really wanted. It would have been fun asking consulting clients to make cheques payable to Slush Fund Limited.

Listening in

Oh dear. I think my daugher is going to grow up to be a telecom executive. She's taken to walking up to the mirrored wardrobe doors and giving her reflection a kiss. I know where I've seen that before.

Anyhow, here's a glimpse of how the end of telephony as we know it might look.

The olde worlde way of making a phone call has been dial-establish circuit-talk-tear down circuit. It doesn't have to be that way.

For example, insead of switching between callers, I could fade different audio streams in and out. My wife can whisper to me even while I'm in theory on a conference call. It's ambient telephony, remixed.

Or how about this. My wife can listen in on my phone for a five-second period at any time. That way she can get a general idea of whether I'm in a meeting, on a call, driving, having a piss, or whatever. It's a sense of presence, but not in the way people normally think of presence.

These things may not come to pass. But one thing is certain: once unhooked from the circuit paradigm, new modes of communication are sure to emerge.

I'm hearing some ambient screaming from my daughter in the bedroom next door. Perhaps she's just issued a profit warning. I'm off to investigate.

OPINION://Stand and deliver, your packets or your life

I was just perusing the call charges for international calling and roaming on Orange. Here's a small and abbreviated extract:

At first sight this looks like the usual telco price-gouging and service-based price discrimination between users. This works by driving business people who are price-sensitive to international call charges to business plans (with higher up-front MRC commitments); likewise, it discourages their paying these casual use charges for occasional international roaming. Your mum on holiday gets a briefly robbed by the phone companies, but not enough to do anything about it.

Yet there is something deeper going on, even in these circuit-switched price plans. Whilst you're forced to buy service and connectivity together with circuit voice, that doesn't mean we can't reason about them separately. After all, there are already distinct components of the architecture that reflect these economic functions: the provisioning system, and the call detail record generator.

The network's provisioning system detects whether you are entitled to access the network, authenticates your device, and determines on what overall basis you will be charged. The call detail records track how much service you have used, and the service addresses you have accessed. The billing system blends the connectivity and service portions together to determine the actual money charges.

Orange, along with the other carriers, is allocating all their variable charges into the "service" bucket. The monthly plan fee is fixed; they don't charge you extra to provision (and remain attached). Yet by attaching to a "foreign" chunk of network connectivity, your call charges are doubled or tripled. But an international phone call isn't a different product -- it's the same product as a local one. You dial a string of digits and talk either way. It happens to run on a differently provisioned piece of connectivity. This difference between service and connectivity is subtle but important and is obscured by traditional voice pricing.

With a circuit-based network, you're not really provisioned to have any connectivity at all until you dial. The dial tone is an illusion of connectivity, a psychological fraud. (Why is there no such thing as the "Internet dialtone"? Because you're already connected to everyone, everywhere, always, without asking!) All circuit telephony connectivity is rented on a temporary basis. You dial, and you're allocated a single point-to-point conduit. You end the call and the connection dies. Once you understand the hidden connectivity element bundled in traditional voice, the dynamics of telecom become a lot clearer.

As an aside, the prices for incoming roaming calls are lower than outgoing ones in the table above. Why? Probably a whole bunch of reasons. Maybe cultural/historical (like the difference between caller pays in the US and callee pays in Europe). Maybe the varying existence of substitute products. You can call forward a home landline for incoming calls, which isn't a big deal -- or just pick up landline voicemail. For outgoing calls you can buy a pre-paid cell phone or go to a call box, both of which could be expensive or inconvenient. Hence incoming is cheaper than outgoing.

So what happens when user-controlled VoIP comes along and eliminates service-based charging? Let's project ourselves forward a few years. Some mobile IP-friendly technology like Flarion or WiMax has become pervasive. Open WiFi access points and community networks remain too sparse to rely on. So you're still buying connectivity from an Evil Telco™. Thus the price discrimination simply switches from service to connectivity, no different to GPRS roaming extortion today.

What this also tells us is that the mobile network operators have a fundamentally different economic structure than fixed network operators. You can use the location of the connectivity as a variable in your pricing. Fixed operators can't do that so effectively. Remember, the paradox of the best network only refers to the loss of ability to price discriminate based on service. The stupid network is service-agnostic. Yet "service" isn't the only axis you can map to. To what extent can location-based price discrimination substitute for service-based pricing? And if they are substitutable, it makes you wonder: how truly quizzical is the paradox for mobile network operators?

With any access network, you can price discriminate based on two things: the service type, and the connectivity characteristics. The connectivity could be described in terms of its destination, time, volume and bandwidth. Assume service-based pricing dies with IP networking; it's too easy to bypass. Score zero out of ten for benefit to price-discriminating carrier.

The asymmetry element of incoming/outgoing connections probably dies too with it. I'm not expecting any carrier's marketing department to get away with charging by the SYN packet. This is especially true given the troubles of educating the public and gaining acceptance for the much simpler concept of metered megabyte-based pricing. What else does that leave us with?

Destination-based pricing is too hard to sell to the masses, who don't want to have to know which continent each IP address and domain name get routed to. (Heavens, if you though micropayments for content are bad, imagine if they existed for IP connectivity!) Score one out of ten. Time-based pricing was receding along with dial-up, but is re-appearing with paid WiFi and internet cafes, where you pay by the hour. Maybe give it three out of ten, with time-metered broadband a tragic reality for my parents-in-law. Volume pricing is highly prevalent, with different service caps at different price levels. A similar story applies to speed. Once IPTV becomes popular, the idea of megabit DSL and gigabyte caps will be laughably stingy. Someone will get rich offering connectivity that reflects the true value of video content. This is much the same as today's broadband revenues that rest on the value of, ahem, music content. Score eight out of ten; you lose the ability to do fine-grained pricing, but you can tier the data-hungry applications.

Thus fixed networks retain two strong forms of price discrimination (volume and bandwidth), whereas mobile networks have three by adding location. Furthermore, these factors are likely to be more variable over time on mobile networks. That tips users towards fixed all-you-can-eat bundles that potentially cost more than buying components separately when there is high variability in usage and difficulty in comparing prices.

So the summary? Whilst the fixed-line telcos remain a terrible repository for your savings, there is a little more hope for mobile networks because there are more possibilities for effective price discrimination. Furthermore, the disappearance of service-based pricing doesn't automatically mean the end of attempts at price discrimination. Someone might lay a fibre to your home, but that doesn't mean they'll offer your gigabit nirvana for without consideration to the value you get from it.

If you don't believe me, just check this one out:

One of the most innovative players in the broadband business, BellSouth is testing the on-demand concept in up to 750 homes in southeast Florida. As part of the scheduled three-month trial, which started in the Miami/Fort Lauderdale area in August, the regional Bell is offering customers an always-on, 56 kilobits per second (kbps) DSL connection with the ability to upgrade to as high as 3 Megabits per second (Mbps) speed at a moment's notice.

On-demand subscribers need only click on a "Turbo Button" icon in the corner of their screen to make use of this special "Turbozone" feature. Subscribers also enjoy the higher speeds when BellSouth or a content partner wants to provide faster downloads from its Web site. Similar to the phone company's dial-up service, the on-demand service costs trial customers anywhere from $5 to $15 a month, depending upon their bundle.

I couldn't make this sort of stuff up. I just look forward to the 56kbit fiber optic system. And you thought telcos weren't innovative?

Cattle feed

Compare and contrast! A new game for loyal readers to play alone or as a family.

Firstly, from Wired:

And yet there's something strange going on in branding land. Even as companies have spent enormous amounts of time and energy introducing new brands and defending established ones, Americans have become less loyal. ...

If you had a set of customers today, you could be pretty sure most of them would still be around two years, five years, ten years from now. That's no longer true. ...

The aristocracy of brand is dead. Long live the meritocracy of product.

(From The Decline of Brands)

Similarly, from Hugh MacLeod at gapingvoid:

Branding is dead.

Holy Shit.

Branding. Is. Dead.

We thought just marketing and advertising were dead. Nope. Branding kicked the bucket, too.

Dead, dead, and dead.

(From branding is dead with follow-up at why branding is dead)

And the other side, exhibit 2a from Andy Abramson (sorry to pick on you, Andy!):

Sure, companies like Vonage and Packet 8 have made some announcements that say some of the same things, mostly where you can buy their service, but not one of the other VoIP players has taken the kind of approach that AT&T, which with their budgets and brand equity are the only ones who can pull it all together the way they have. [my emphasis]

(From Office Depot Gets The Vantage)

And from the horse's mouth, (then) SVP of AT&T Consumer in USA Today in 2003:

"The AT&T brand is a huge asset that the company has, and it stands for quality, integrity and family values."

(From AT&T will sell prepaid cards for online Web purchases)

Spot the difference? I just couldn't resist bringing this up. I keep reading stories that say "AT&T trying to recover old glory via VoIP" and "gee, what a great brand". Each time I lower my sorry face into my outstretched hands and shake my head.

Now Andy would argue that AT&T have a superior product, so they're winning in the meritocracy space. But I just make a very satisfactory zero-cost Skype call to the US this evening, enabled by presence and IM, and with a voice quality CallVantage will never meet.

It's not just branding dying. The PSTN is dying. It's a Norwegian blue. It can't compete on features against an infinitely flexible stupid network. Sinking zillions of dollars into an inflexible centralised IP infrastructure doesn't help you. You're not building a Next Generation Network with all those session border controllers, SIP proxies and media gateways. You're building a Last Generation Network. It's the end of the line. All change please!

Just think: system A where every new feature needs to pass through the AT&T product development cycle, or system B which can build off a Skype API, or even start afresh at minimal cost if that doesn't suffice.

The kids are all chatting on XBox Live. (They'd chat via Yahoo! IM on their mobiles if only they could get hold of a decent cheap IP connection. You really think the cellular carriers will be able to co-opt WiFi in the home? You're kidding me, right?) I'm using Skype. My mum's on Skype. The big story isn't service displacement to wireless or CallVantage. It's service provider elimination. Value slipping through the fingers of network operators.

SIP is barely more involved than SMTP and HTTP. We don't expect to pay a service provider big bucks for access to simple protocols like this. Improved IP-based re-creations of last century's voice products just don't cut it any more. And your brand won't help you on bit in changing that. Five years of arbitrage won't sustain AT&T through another century. Enjoy watching the last few turns of the game. Taking a few enemy pawns and bishops late in the game doesn't matter when checkmate looms.

Verizon's glasshouse

Check out Verizon's pricing for FTTH:

Why the big kick up in price from 15 to 30Mbps? Because an HDTV channel is about 20Mbps! They want you to have to go through their video system rather than stream stuff of your friend's TiVo. They know they've lost all voice revenue when they give you fibre, and the trivial bandwidth of audio offers no easy means of clawing it back via connectivity charges. But HDTV is the big mama of bit shuffling. At least until we all have food DNA analysers in our fridges and send a few million genome scans a day to the labs to check for contaminants.

It's all about extracting the value of the communication from the user's pocket. TV is both high bandwidth and high user value. That makes service and connectivity charges substitutable. At least for as long as TV is the highest-bandwidth service people want.

If you wanted to undermine Verizon's pricing, get people hooked onto PC remote backup services. A 200Gb drive backed up every night takes 15 hours over a 30Mbps connection according to my no doubt faulty maths. Then people will suddently want 100Mbps+ connections and that value is driven by the pricing of PC backups (much less than a premium TV package, I'm sure), the $200/month is unsustainable, and TV comes as a cheap trickle on your superfat pipe.

Incidentally, has anyone questioned the logic of the inevitible "triple play" (voice, video, Internet) that underpins their business case? How many people with FTTH will stick with expensive Verizon voice service? (Yeah, they can throw it in for free with bundled mobile service, but then again so can anyone else with VoIP.) If their Internet pipe isn't overcontended, then download or streaming TV is perfectly feasible. You simply aren't tied to them for any services at all.

In the long term the triple play is a mirage -- the only bit that counts is an Internet connection. As soon as lots of people have fiber the competing video servers spring up everywhere to bypass the telco's servers. No wonder Akamai are doing well. They're selling the digital wheelbarrows to the telecom gold diggers.

OPINION://Galactic Communications Commission

Plastered absolutely everywhere today are mentions of the FCC finally making a public stance that VoIP is an interstate service. I won't even paste up a link, I'm surrounded by too much choice. Find one yourself.

Is today's announcement a good thing? Probably -- but not totally. This is for two reasons. The first is how the locus of regulation relates to geographic numbering. The second, and by far more important, is the regulation of connectivity (as opposed to service).

The regulation of PSTN-alike VoIP service is inextricably linked to the control of numbering resources. No number, no service. Numbering is generally controlled at a national level (with some exceptions), and then possibly delegated down to a local level. (The ITU really coordinates, rather than controls. They don't have troops and tanks to enforce their rules.)

National control of numbering makes supra-national regulation of VoIP service an unnatural misfit. (Hint to Brussels: to regulate VoIP you need to seize control of national numbering. You're not getting it any time soon.)

Local control of numbering doesn't really work too well, because numbers shouldn't inherit different semantics based on different local regulatory regimes. You need one set of rules on caller ID spoofing, nuisance calls, etc. Federal regulation of VoIP means federal control of numbering.

This spells death to the geographic numbering system. It's already dying, and you can get VoIP areas codes all over the place. With no local regulatory stake in area codes, there's no incentive to manage them for local benefit. Manhattanites can't keep 212 to themselves. Yet the system is losing something of some use and value -- in return for new number mobility features. It seems a good trade off, but is happening without much debate. Geographic numbering is treated merely as an anachronism of circuit switching and cellular home agents. We won't know how useful area codes were until they're gone.

Which social rituals will disappear? Will you be calling people at crazy times of day because you can't tell which coast they're on? When we don't have it, will be need to re-invent it? I suspect that the answer is yes. One day we'll again have namespaces that are forcibly tied to geography -- but they'll be a few among dozens or thousands of namespaces for personal communications. The death of distance doesn't mean the end of geography. Just try buying an ocean-facing house to discover the difference. Premium charges for certain geographies increase, while premium charges for crossing large distances are disappearing. People will want to express their geography as part of their identity. I don't know how, but they will.

The end of area codes is a minor issue. More importantly, I do fear that this regulatory announcement on service regulation will create an automatic and undesirable follow-on for connectivity regulation.

VoIP service is, indeed, inherently global. You can take your Vonage box anywhere in the world and make a call. The recipient will see a US caller ID, know that the call is being placed under some form of US jurisdiction, and can act accordingly. National regulation makes sense. But connectivity is essentially local. It's tied to a cell tower, cable terminator, fibre node or copper loop end. They're physical things in physical places. I strongly believe we're better off with local regulation of connectivity.

As an exception, you need federal resolution for areas national interest (e.g. military and emergency communications). It is also possible to argue that mobile services are inherently inter-state: the terminals move about everywhere, even if the towers don't. This would lead to central control over spectrum used for that purpose. That's only true for mobile devices that transmit, though. People can and will carry them around and create "illegal" signals outside their home jurisdiction. Receivers don't need federal regulation. Fixed transmitters likewise (save for cross-border interference).

The licensing or opening of TV spectrum should not be up to the FCC. The states should have that right. TV is read-only radio. Similarly, there's no reason why a Washington offical needs to oversee local radio in rural Nebraska. If Californians want Janet's Titty TV on 24×7 replay, that's up to them. Unbundling of local loops? A state issue. Very few loops cross a state boundary.

The big plus is a 50-fold increase in the cost of lobbying. Experiments can happen on a local scale, and the failures and successes noted on a national level. Yes, VoIP service providers shouldn't be burdened with 50 sets of regulations. But anyone planning on deploying a nationwide network in the US is already faced with 50 sets of statutes: planning, commerce and employment regulations. No change here.

If you want to give the moribund telecom industry a jolt, it has to be by tearing through the cocoon of regulation they've built for themselves. Service regulation doesn't matter much. Vonage can relocate to Canada, no problem. But connectivity if vital. That's the bit that needs reform most.

Reintermediation, Cisco-style

I don't think everyone has twigged how significant Cisco's purchase of Linksys was for the future of an open Internet.

Microsoft have mediated all value flowing between a PC application and the PC hardware by interposing Windows in the middle. By controlling the default settings such as the desktop icons, they can route customers to other Microsoft or preferred third party services. They know how to capture and monetise the value of that open hardware platform. Technical interoperability can also be used as a cudgel to blugeon competition to death.

Cisco are heading towards the same situation. Instead of the PC platform, the open hardware platform is the Internet. Linksys gateways are mediating all flows of value into and out of the home. They're even reintermediating themselves between Microsoft and the rest of the world.

As a nameless acquaintance recently told me, if people think Microsoft is a ruthless monopoly, they should try taking a look at Cisco and Intel.

How can this happen? Well, take their most recent product announcements. What if all Linksys gateways are pre-provisioned to one favoured VoIP service provider?

Even wickeder would be if Intel agreed to make the next Centrino have some, err, embrace and extend WiFi additions that only worked with Linksys gateways. Or if the big iron Cisco routers in DSL providers and cablecos had features that worked better when end users have Linksys boxes.

I was going to say that Cisco makes Bill Gates look like Mother Teresa, except that she turns out to be less than a paragon of virtue. I just hope you weren't thinking that open source, open standards and a weekly five bucks into the collection dish were going to make us all free.

Old media, old problems

Take a look at this story over at BBC News on Comcast and Microsoft.

The intersting thing is what isn't in the story. Failing to mention that Microsoft is a major Comcast shareholder transforms the meaning of the article. As written it seems like Microsoft have persuaded Comcast to use MS software in set top boxes based on the merits of the product. Armed with the extra knowledge of who owns whom, it doesn't quite look the same way.

But don't fret. There are a whole bunch of browser annotation systems evolving out there. Soon, when you read some old media news article, all puffed up with editorial gravitas, you'll automatically see the key blogosphere commentary alongside. Then you'll get the real story, fully fact-checked. Media revolution, edge style.

And if you think this is subversive, wait until we start annotating all their streaming TV and radio media. Oh. Sorry, can't do that, it breaks the law. The two-way TV set is stillborn. Murdered in the womb.

Pity we threw away our free speech just to flog a few black DRM-infected boxes sitting under the telly. But then again, since I quit watching TV fifteen years ago, I'll keep on hoping the weblog pen is mightier than the camcorder sword.

BT's blunderbuss

In respect of BT's news today that their consumer broadband offering will include unlimited free landline calls via VoIP, it's hard to top my brother's analysis:

... somewhere within BT there is one division trying to sell capacity, and somewhere else there is division trying to sell scarcity and having a really bad day.

I guess BT has worked out that as the dominant telco they can offer on-net calls cheaper than anyone else (notwithstanding the efforts of the regulator to create a level pricing field). Hence the differentiator.

Anyway, nice to see my prediction that the correct price for basic VoIP service is zero come true so fast.

Telco manager trouble

Peter Cochrane has a short opinion piece on Are IT Departments Doomed?. In the same vein, let me pose you the following conundrum.

I make zero-charge calls to friends and associates around the world on an almost daily basis. Skype just works. It's good enought for business. Or to put in another way, not having presence, IM and file transfer isn't good enough for business. This technology just works whether I'm at home or on the road. It doesn't really care much about quirky networks address translations and firewall settings.

On the other hand, business users are still paying handsomely to place ordinary boring calls. Yes, they're upgrading to IP PBXs and their brethren. The trucks are rolling in laden with session border controllers, packet probes and application proxies and gateways.

What I want to know is, how can a corporate telco manager justify her salary and millions of dollars of hardware to deliver something less functional and more expensive than the technology I use to connect my kid to her grandma?

I think you all know the answer.

OPINION://ABC retrospective

I'm trying to look for the unifying thread of the Access to Broadband Campaign's conference this week. Here's a stab at it.

There are three types of bit pipe available on the retail market today. There's the world of gushing hot geysers of fiber. Not just for drinking, but you can water your lawn, run a steam engine and fill a swimming pool with it too. Then there's the trickling spring of ADSL and cable "broadband". Not insignificant, but hardly a tourist attraction. Lurking somwhere in the middle of this lot is also a motley bunch of wireless technologies. Finally you can drink your bits drip by drip via dial-up or basic ISDN. You won't die and dessicate, but you'll need to hold your head under that tap all day to stay alive. It's the data equivalent of the twenty mile trek to obtain one pail of clean water.

In the economic sphere we already have a well-known and emotive term for the last case. We call it the Third World. It is a world of poverty and desperation. You don't want to live there. You take serious precautions even when you visit. Expect encounters with officialdom to be expensive.

The first world is one of abundance; we worry about obesity and time management, not daily bread and shortened lifespans. If the price of riches is philosophical angst, then sign me up for the next class on Aristotle and Hegel.

In the middle is an uncomfortable second world. One of educated people striving to make the most of their knowledge and verve; yet the system -- over which they have little control -- crushes innovation and change from the edge.

Some good news first. The UK isn't going to be a third world connectivity island. But on its current trajectory, it won't be in the first world either. And that is a tragedy of epic proportions for the birthplace of the industrial revolution.

There are several sorry stories to emerge, and also tales of hope.

The saddest story is the government's massive "investment" in extending dribbles of connectivity among the remoter bogs and brooks of Britain. (For overseas readers, I must explain that British governments no longer merely spend taxpayers' money. Every piece of rubbish collected from the street is now classified as an investment in our childrens' glowing future.) This is cementing the position of legacy telcos. When I hear that BT Scotland is a £16bn business employing 1 in 100 working Scots, I don't see economic triumph. I see rapacious and ruinous cost backed by inefficiency and inaction. Did you see Stefan Agamanolis of Media Lab Europe give his presentation? If so, you can't have a sliver of doubt that the applications of broadband that will drive new products, services and economic growth won't be based on a 512kbit ADSL line.

Opting for second-class status butressed by support for BT and Thus will make us suitable only for consuming the digital exports of Korean, Scandinavian and (increasingly) Chinese youth. Even worse, we only get to eat the low-bandwidth leftovers that are already past their use-by date.

I was also saddened to see Scotland suffering from remote telecom regulation from London. BT's own ADSL coverage map reveals Scotland as a tundra of the disconnected. If ever there was a case of Scotland needing Scottish solutions to Scottish problems, this is it. What sort of devolved parliament doesn't even control the radio spectrum and communications wayleaves over its own land? OFCOM needs competition. That said, the Scottish public's penchant for public sector over private capital could equally result in a new wooly and bureaucratic leech on innovation and taxpayers. But it's a risk worth taking.

Now for some rays of hope.

Most obviously, the mere existence of grassroots campaign groups and the conference itself is cause for celebration. Need I say more?

The legacy telcos are haemorraging customers. Other European countries -- the yardstick we measure ourselves by every day -- are pulling ahead in competition policy and fibre deployment. Change is in the air. The political pressure can only rise. There isn't any confidence at all in the voices of BT presenters. I sensed their fear of the audience with my own eyes and ears. They're dying, breaking up under the contradictions of their own business model. Don't sit around hoping for BT to connect you. You'll turn blue and expire. It isn't worth the wait.

I don't care whether the fiber is laid by a replacement multinational megacorp or some local collective. But people out there are connecting themselves up, thank you very much. I also met many small commercial enterprises and ISPs rolling out local connectivity. Despite all the hoo-ha about global networks, telecom is an inherently local business. It's about spanning physical geography with virtual circuits. You have to be there to do it. Furthermore, the Internet doesn't care how many IP addresses you've got under your control. You don't need to be a multinational telco to grab one and transit some packets on your own.

We're in a new phase of capitalism. My own panel presentation was partly about how fibre networks create disproportionately more value to the customer than they do profit for the network operator. In every freely entered transaction, both parties are better off. It's the bedrock of capitalism. But the relative amount to which they're better off can change. The Paradox of the Best Network merely states that in a different way. So finally, I'd like to pick up on a message from Michael Wolff, who spoke up during the scenario planning session. His point was that relationship capital is the engine of future growth. Britain's doesn't have more brains than our competitors. We don't have access to superior technology. Our comparative advantage is in relationship forming. And the intangible social capital of those relationships is precisely the same thing as the excess (unmonetised) consumer value from broadband networks. Moving back to Scotland from the US, you can't help notice we're a butt-ugly load of mongrels. Yet, despite our dowdy looks, there are things the British excel at. Forging business relationships over a beer. Spreading our English-speaking culture. Creating intimate friendships across old boundaries. Mediated by better technology and faster networks, we'll lead the world in boozing, bragging and bonking. You have my word for it.

When talk is free

A moment of zeitgeist...

I'm Skyping with my brother in the conference foyer. But we're both saying nothing because we've run out of things to say. Just stayed online, doesn't cost anyone anything. Heavy breathing noises without the premium rate call charges.

Anyhow, someone comes and looks over my shoulder to ask who won the US election. very confusing for my brother who doesn't know if it's me talking. In the old world, someone wearing a headset but not talking couldn't be making a phone call. Now, you can't tell. Ten years from now, we'll probably all be wearing devices like hearing aids, and you won't be able to tell if I'm more wired than a Bush.

Incidentally, he just sent me a file. Tried Windows Messenger, failed. Tried Skype file transfer, works. Clearly one of these two companies has P2P worked out, and it isn't the one from Redmond.

ABC Conference Day 2 Session 3

Brian Condon. Scenario Planning session: Broadband Scotland 2010

This session is audience interactive. All have red (no) and green (yes) voting cards.

Scenario planning - don't try to predict the future. Some of what speakers said is wrong and right. You don't know which bits. What you need to do is anticipate future things that WILL happen. Need a plan for these. Example, demographics. Pensions problem is illustrative. Secondly, what MIGHT happen.

Scenario worlds. We over-extrapolate. Events produce different trajectories and outcomes of history. The more events, the harder it becomes to predict the future.

Scenario planning is about detecting the events. Classifying them. Identifying most important ones.

Two axes on our graph.

Interactivity axis -- highly personalized communications choices, or fixed menu?
Timing axis. You get communications when you want it vs. when we provide it. What timing choices will be on offer?

2-axis chart with 5 blobs, described below

[Bottom left] Fixed choice, when we provide it = "commodity world". Broadcast TV, cable and satellite. What we're trying to get away from.

[Middle of chart] Mid on timing, mid on interactivity = "menu world". Packaged up, easy, customer-centric. Interavtive HDTV is an example.

[Top middle] Mid on timing, high on personalised. "linked world." Lots of WiFi, connectivity. Dominant device is PC.

[Upper middle right] High on timing, mid high on personalized = "portable world". Mobile devices.

[Far top right] Very high on both = connected future.

We will now advocate each. Goes into role play. Linked and portable are nuts. Menu world is best. Daughter, 14, Annette. Access homework server via new media centre. HDTVs, repeaters around the house. PC languishes in a corner. Watches Buffy in a sub-window. Text chat in third window. Jack is 16, has a rash. Wife looks up NHS direct on big screen. Rather unpleasant, just turns out to be acne. Later on pick blockbuster release, watch in HDTV surround

Next presenter. Linked world. World will be so linked. Live north of Inverness. Will burn a boat in about a week. Local tradition.

Have mobile, will attach to local WiFi, upload video and still of boat burning. before I get home, eldest son will have already taken it, spliced in new audio and DVD clips. Get home, review footage. Use reflection product [from earlier Media Lab presentation] to talk together.

Next presenter. Portable world. Have been to a conference. Getting back into train. Saw little new clip. All of Inverness built on volcanic rock, he says. Multi-task, manage interruptions.

Video. How will you watch TV in 10 years? Lots of interview clips with conference attendees. What will you do with your mobile in 10 years?

Q: Will BB start to isolate us [socially]?

A: Information, communication and collaboration. Maintaining trelationships is where the growth is going to happen.

Q: Believe we will continue to have the 4 screens [public, TV, PC, mobile.] But believe world of fiber to the home won't come about any time soon.

Q: One of things holding us back is focus on videal and audio. Want touch, smell, taste for richer interactive experience.

Q: Lots of people talking about technology. Icon on PC desktop called "My Stuff". Needs to be made more useable. Stop focus on technology.

Q: Environmental benefits of paper being eliminated. [Red - audience thinks in 10 years paper will still be with us]

Q: Each of three world will happen for better off in society. Predict deepening digital divide where low-income people miss out on opportunities.

Q: Four sizes of screen limits to current technology. Will future see microchips enmbedded in people. [Solid green agreement that 7% will wear microchips in 10 years] Direct nerve implants where digital feeds go right to the brain.

Q: People don't trust [biodevices] yet. ID cards too controversial. Trust issue to be overcome.

Q: View the future, need to talk to teens. What they want, on demand. We're too cautious.

Q: Ponder on services. Buy 10 channels from Sky or Telewest, and 70% never used. How will we buy and pay for them?

Dilemma resolution in scenario planning. Do I pay as I use or pay in advance. [Vote: bundle vs. fixed price. More green for bundle than red for a-la carte.]

Q: Who will win from productivity improvements. Employer or employee? More profit or more leisure?

What happens to big orgs in a world enabled by broadband. Idea of work as a place you go to is erroneous and obsolete. In 10 years, the corporate as we know it today (big orgs of permanently employed people) will not be there any more.

Q: Most people will be suppliers, not employees. 75% of audience agree.

Q: As long as can sell our services over the Net we have a big threat, but physical presence still often needed.

Q: Paper has been backwards and forwards compatible. Will same be true of digital media?

A: Digital curation services are a mess. Keep your data on paper.

Will be losing stuff because on old format machines.

Q: Strong correlation between early adoption and social ineptness. Wrong people here to predict future.

Conferences self-selecting.

Q: My 2p worth. Britain will be a broadband backwater in 10 years. [Majority of audience agree.]

Q: Lost manufacturing, losing oil revenues. Goldman Sachs predict BRIC economies soon bigger than OECD countries. Big macroeconomic changes taking place.

Q: Like to support previous point on loss of UK comparative advantage. Evenyone else has access to same technology, capital. UK needs ability engage in social relationships, build trust. These are our comparative advantage.

Vote: Will have more trust in 10 years. Yes, small majority.

Scenario world chart has hardly changed since 1995. Make predictions about 2002. But only get small signals about the future.

Rene Carayol: What’s the future going to look like?

For certain fewer in the west compared to rest of world. Dominance of English language will ebb.

Scandinavia. Moving towards living alone. 80% in Finland of homes single occupation. Driven by technology. Personalization. Growth economies are BRIC. Collaboration works. Touch and smell: more than just the technologies. Technology doesn't change the world, it people using the technology.

Living in a corrosively cynical world. "Bowling alone." People working alone. 1950s America, bowling leagues oversubscribed. Now people bowlin alone, competing against themselves. Actually, recent evidence suggests this specific anecdote in bunk, just wish I could find that link again. MG. Is technology taking us down that road? Saw 4 Cs: content, community, colleagues and customers.

Lots to do with community in the exbibition room: broadband bus, etc.

Efficiency. Did some work with Sun Microsystems. Anyone can go and log in and work anywhere. By accident people worked from home, fewer offices, less travel. GBP3m saved. 50% split with employees.

Changing towards a freelance world. Used to work in magazine business, 3000 staff, 26000 freelancers. They never stepped over the door. Each worked for us, EMAP and Conde Nast. We say "we have best technology, you can only work for us, not the competiton." They chose to work for the competition. Power lives with the people, not the organization.

Paper: will take 50 years or more to decline. "My newspaper" hasn't happened yet.

Embedded microchips. David Beckham clothing, had smart clothes with chips. Not adopted, lasted a single season. [Public not ready.]

Not living in communities any more, we live alone. The older we get, less brave we become. Want to see technology literacy, look at teens with no money. They exploit free technology.

Ask a teen how to get more out of your mobile phone. Real lesson is speaking to someone with more knowledge than you who has no power over you.

Payment. New technology, new business model? New payment models rarely stick. Customers tell you what they want. Look at mobiles and PAYG. Can't drop it, even if they want to.

Only 3% in UK work in organizations of over 5000 people. Exhibits here are about enabling small business. Local stuff. Simple things like putting interactive presentations online, a dialogue. Am personally desperate to achieve same. Don't need to have to personally go everywhere in person to present.

90% of people work in small organisations. Installation costs of much technology nothing, benefits huge.

Think of Polaroid. Still stuck with raw materials that are chemical. Have gone bankrupt twice by not adopting digital.

Should have been chief selling officer, not CIO [in earlier career]. Nobody came to buy, had to sell my services to own corporation. Conversations were bits and bytes. Need to move to people.

Quality of content an issue. 200 channels of trash. Will personalisation change this? Maybe.

Denmark, 100% literacy. But 68% income tax, 25% VAT, 180% car tax. Yet everything state of the art. Hardly anyone in the airport, check yourself in. Robot cleaning. Everything touch-screen in the auditorium. Nobody seems to be having fun, though. 5.30pm everyone in the bar smoking, the only outlet they have. I'm just getting ready to misbehave by bedtime.

Denmark, everything perfect, a scary vision of the future. Then got on plane to Botswana. Size of UK + France. 1966 independence, never been to war since. Was one of poorest countries, then GBP per capita over $10,000 from diamonds. 1.4m population. 40% of population have HIV. Average life expectancy moving below 30.

UK is the richest it has ever been. Broadband pointless on its own. Went around Barclays branches in Botswana, connected by broadband. Banks firstly for high net worth individuals. Using BB network now to educate people on HIV. Interactive booths.

Massive stigma against AIDS. Barclays offer free treatment, not taken up because of stigma. Bigger mission for broadband.

38% of Barclays staff are HIV positive. Biggest business challenge of bosses is which funerals to attend.

Ends with poems on dire state of Africa from his latest book. Puts BB issues in perspective. Implicit challenge to audience to look beyond parochial commercial interests.

ABC Conference Day 2 Session 2

Didn't get to blog this in real time as it was standing room only. But some interesting stuff about the reality of building community networks.

Had presenters from a the co-operative society (large mutual society -- read more here), satellite provider, local wireless operator, and mesh technology provider.

Take-aways:

- When all you had before is dial-up, you don't complain about latency of megabit satellite connections.
- There's a lot of detailed stuff to get right in rolling out community broadband. Naively throwing yourself into it is a recipe for pain and suffering. Local contacts and knowledge are key. Need to know community or church leaders, public servants (council, police, schools, etc.), geography, chamber of commerce members, neighbours.

- Small business users are less demanding than general consumers in terms of both bandwidth and support.

- Incremental approach is best.

- (From talk after the event.) BT is threatened by insurgence from the edge, and deployment of ADSL is used as a competitive weapon. Don't want precedents set that make the plebs want to rebel against their BT indenture. BT can preempt community initiatives by pre-announcing ADSL availability (even if it is 1/10 the speed and twice the price of a community solution).

ABC Conference Day 2 Session 1

Stefan Agamanolis Media Lab Europe

The core of his work is "When anything is possible, what really matters?"

Intro to Media Lab Europe. Sister to MIT Media Lab, shared IP, separate finance.

Researching human connectedness. Relationships mediated by technology. How we will relate to each other. How to enable presence, new forms of cultural exchange.

Two core beliefs: humans have a fundamental need for contact with other humans. Technology helps enable this.

Stories illustratin the first from psychology. In C13, Frederick II wsa king of Italy. Wanted to learn if children had an inborn language if you didn't teach them. Raised a group of infants who were never to hear speech. Foster parents not allowed to speak or handle babies. Nurses did this. Result was all the infants died. Experiment has been repeated a number of times in history. WWII in 1940s, children in institutions. Germ theory stopped babies in orphanages being handled and held. Babies became sickly, withdrawn, lost weight. 40% who caught measles died, 0.5% in general population. Lack of human contact had fatal consequences.

Part of our physiology is open loop. Theory of limbic regulation. Facial expressions -- in an angry crown. Affects you physiology.

Adults need external regulation to be stable. Cannot be stable on their own. Social relationships, and the lack thereof, constitute a major risk factor for health.

Can technologies help sustain relationships?

Personal counterexaple is you car. Isolated, even when getting petrol or going to drive-thru ATM.

Good examples. Uses iChat AV to chat with parents at Thanksgiving dinner.

UK Mirror newspaper article -- "Mobiles 'linked to teen sex'". Mobile ownership, flirting, leads to earlier sex.

Trends to watch for. Media lab all open. No private offices. Allows for fluid exchange of ideas. Eureka moments, swear words. Open communications, feeling of togetherness. Team spirit. Want to use technology to create same thing. Have a 24 hour a day media portal (iCom) between MIT Europe and MIT Boston. Can have instant video conference. Will soon be for sale.

"Habitat" project. Two connected kitchen tables. When you put things on a table it senses it and displays image on other table. Remove an object and it grows, turns grey and fades away. Gives a history of the table. Communicates the rhythm of live at the other place. A sync of daily life.

Project "open window". In a hospital room, long stay, need to be isolated (e.g. bone marrow transplant). Very dehumanizaing experience. How to create a second window. Person can keep track of a place important to them 24 hours a day. Patient makes choice. Garden, room in house, hilltop view. Looking for results like paient asking for less pain medication.

Always on connectivity, ambient presence. Mobile devices still paying my the bit/minute. A roadblock to always-on. Need to work out how to charge for these services (if at all).

Pictures of keepsakes. Important in human relationships. Wedding rings, portraits, anklets. What are the keepsakes of the future. Portraits are static things. New portrait responds to people coming close. Smile, grimace. About 50 different things the portrait can do. Richer than a static portrait. "Portrait of Cati" project.

One2One flower pot project. Sits on desk. Girlfriend logs into PC and it blooms. Logs out and it deblooms. Trend of enhanced keepsakes.

Images of walkmen and iPods. Nice to isolate yourself. Other times this can be anti-social. Might want to meet new people, but not just talk to anyone. Want an extension of walkman experience, doesn't compete.

Video of project tunA. A music player you can use as normal, as well as tune into what people around you are playing. Don't need a boombox at the beach any more. Ad-hoc radio service. Can only listen to streamed media, can't download. Can bookmark a song or a person. Can walk into a music store and be notified it's available for purchase.

"Shared reflection" project. See a reflection of yourself as well as reflections of other people. Traditional video conference somewhat adversarial. _(Imagine everyone lined in a row, shoulders overlapping. People fade in and out as they talk. Speaker seems more prominent. Can watch TV with your friends, extended family. Changes the concept of a family room.

Palimpsest. Screen in lobby with layered video. Sees everyone who passes in the past day in a short video loop.

All example of technology mediating human comms for the better.

Mobile phone experience. Disadvantages of how distracting it is. How to turn device on its head. Video of two people in sensory isolation tanks making phone call. Project "iso-phone". Totally isloates you from any distraction while making call. Like old telephone body. Water is same as body temperature. Like a gourmet restaurant experience, everything controlled. Have new tanks where you are completely submersed. Scuba mask with microphone and earphones you can use underwater. Why to do a project like this? To me a great media lab project. A BT or Orange would never touch something this weird, but we learn a lot about why we design our devices in particular ways. Enable different types of interactions. Represents a shift from flexibility to singularity in design. Cell phone tries to be all things to all people.

Scenes of sports. Propensity to bond with team mates. Breakout for two is an experiment in sports over a distance. Video - a cross between soccer, tennis and "breakout" computer game. Exertion sport. Have to throw ball at blocks overlaid on video screen. Both can see same block pattern. Win by knocking blocks out.

Recently took to San Francisco. Kids live it - like video games but physical.

Other projects? Wanderful Alcove, magic wands. iBand like active name bands. Detects when you shake hands, exchanges information. Can even tell you what friends you have in common, helps to break the ice.

CNN News. Focuses on extreme events in Africa, don't get a view of what everyday life is like there. Tried to create a different kind of recording technology, a less mediated relationship than one with media orgs with editors and producers. Project "RAW" - digital still camera, one minte of audio before an after. Gives picture context. Photographer wears earphones that are also microphones (binaural). Tool for making historical recordings. Theme/trend of minimizing of mediation, strip away layers of middlemen.

http://www.medialabeurope.org/hc

Q: Any of these becoming commercial products?
A: iCom is getting there, only been around 3 years.

Q: Psychological question on screen size. Using large screens.
A: Large screen makes a different in Breakout For Two. Life-size video conference. Need to feel physical presence of that person. Similarly in iCom portal. Feeling of linkage of architectural spaces.

Q: Negroponte said we're moving from a world of moving atoms to bits. Some seeing bits creating face-to-face meetings. Comments?
A: Seeing full circle coming round. Wouldn't necessarily make same distinctions between atoms and bits that negroponte makes.

Dr Mark Parsons, Commercial Director, EPCC, University of Edinburgh

This one is probably of less interest to Telepocalypse readers, but included for completeness.

Some history on where the Internet came from. 1960s DoD ARPANET, but 1990s WWW took it mainstream.

Email of original proposal on WWW, asking permission to go off and do HTML. Computing Lab rustled up the money to build HTML 1.0. Took about 8 staff-years of effort. A tiny amount of resources. Need to give people ability to innovate. Time to do more than they're being paid for.

WWW originally for viewing CERN phone book!

Basic business benefits of BB?

Immediate benefit is faster downloads of data. Long-term opportunities much greater. Reduce wasted time, improve customer service, reduce costs, home working, etc.

Edinburgh largest supercomputing center. Self-funding. Business pays for it. Have seen that 5 years ago vast majority lacked Internet. 2 years ago majority have dial-uo. Now many have BB. Extremely rapid take-up.

Real examples. Focus on managing customers and production scheduling; customer awareness; business communications. Many other areas.

Have visited 150 Scottish manufacturing customers. Want to do two things. What can they make that week given existing parts and invenoty; and how to schedule it through. Not classic MRP, just small scale. BB opens up a whole loads of new things. Want to give customers more knowledge. Like Amazon, when in sock, when dispatched, when will recieve order. Can take info from scheduling system, display on a secure web page. Cost of only a few thousand pounds. But nobody will give you a fixed price quote. If they won't give you one, they don't know what they're doing. If it sounds high (fixed price) it's what you would pay anyway via the other route.

Sales guy rushing around, production guy either starved of work or overloaded. Smartphone lets a salesperson know how quickly he can deliver. Set realistic customer expectations, get more business.

CCA Lts as example. Centre for Customer Awareness. Just bought broadband in. Whole business process was around getting paper-based data from outside in and re-keyed. Interesting company, do mystery shopping projects. Pay people to go to hotel with complex questionnaires. Food, bedroom, registration. Data all done by hand today. We automated. 15 page form not unusual. Not just a tick and rating. Also looking for textual info.

Paper forms at mercy of postal system. If a comment is unclear or wrong need to send back by post. Slow, people forget what they experienced.

Technology - Java. Free open source (Tomcat and MySQL).

BB enables better business communications. Video conferencing built into Windows Messenger. IM. VoIP. Sit in meeting with laptop open. Can IM with other participants. Can talk to lawyer in contract negotiations. Direct conversations in real-time.

Explanation of VoIP.

Hotel here doesn't allow you to use your VPN!

Small companies using BB for customer service. Some very professional websites make you look like a bigger company. Woman with holiday homes and croft in Highlands, web site helps keep the place full year-round. Doubled her income.

Should you host your own website or buy hosting space? At EPCC we buy hosting space, despite owning big pipes and computers. Just less hassle to have someone else manage it all for you.

A warning. Internet is a good thing. Business information is valuable. Need firewall, virus check, security packages. Get system setup checked.

A disconnect between big vendors and grass roots business. Vendors harping on about web services. Finance sector has 25 year old apps that are hard to transition to web services. An opportunity for new SME entrants.

ABC Conference Day 1 Session 4

Sorry, late to the session, my panel over-ran. And couldn't blog my own panel.

Peter Cochrane

My Life Bits. A record of your life. Now meeting a thousand people in a few months rather than a lifetime. A petabyte lifetime record.

P2P has been a massive change in the ecology of bits. But we haven't yet seen C2B unleashed. Accellerating networks. Costs dropping exponentially, value going up exponentially. Going from companies to individuals. Profit margins for companies going down. Billing systems cost more than the service they are billing for. A waste of time.

[Amusing videos done by individuals. Examples of the empowered edge. You have to pay to come to conferences to see this bit.]

UK has no broadband anywhere and not in the lead on any scale.

500 kbits shared between 50 people isn't broadband. Have to use alligator clips to subvert network to get online. Big telco fears (VoIP, mobile substitution of landline, move from 22% profit margin to 2% like Tesco). In Korea cannot have contention. Minimum 10Mb, planning on 10Gb in 2010.

Free WiFi hotspots. GBP4.5 for 15 minutes, or walk to end of block for free. Just need to know where they are. London at the top of the league for hotspots. Cities like San Jose probably higher. Will personally pay reasonable price. US: $9/day 6mbit, UK GBP4.50 for .5kbit. WiFi costs $1/day to provide. Soap and towels $6.50. UK has lost lead in computer games. Multi-player games. People pay even just to watch. Korea leads.

2006. 3G looks threatened.
2007. Telcos apandon local loop. Comunity networks take over. 2m km of dark fiber released into UK market. Free WiFi kills commercial providers.

Telepocalyptic!

2007, IT industry fights back. Smart network to hunt down worms, viruses, andti-hacker.

2007 worst fear for UK is companies and talented people leave in droves. Impossible to communicate and make wealth.

2007 greatest hope. Companies and talented people enabled. NEEDS BANDWIDTH!

2008, corporate IT and security goes the way of the typing pool. Young people bring their own equipment, and don't trust IT to do anything.

2009 - Super iPod, every single music track ever recorded, in your pocket. "Holy Shit technology". (2019 will have every movie.)

2004 have only 2Mbit home network. 2010 will have 1Gbit local loop and 2Tb of data. 2010, everything is IP access. Everything on the network. Video conferencing takes off.

2010 the hackers have jammers trying to disrupt radio, but have spread spectrum. The next generation of virus attacks. Radio spectrum.

Corporate life miserable. Enjoy yourself. Watch the movie. [Amazing blend of LOTR, Star Wars, et al., made in someone's bedroom.] http://cochrane.org.uk/, http://conceptlabs.net/.

ABC Conference Day 1 Session 2

Sorry for no blogging of the first session. Was still writing my presentation for this afternoon! Rough transcript of first afternoon session follows. My comments in italics. Hope this gives readers a perspective of broadband in the wild and windy fringes of Europe!

Intro by Sandy Cumming CBE, Chief Executive, Highlands and Islands Enterprise (HIE).

Discussion of new conference centre. Not a minor thing for a small town like Aviemore.

For those not familiar with the UK's geography, you would hardly believe that London is on the same island as places like the Isle of Skye in the Highlands. The far north of Scotland is bleak and beautiful, and economically isolated. Broadband is much more of a social issue than elsewhere. Aviemore is in the eastern Grampian mountains, near the Cairngorm National Park.

90 inhabited islands. Over 50% of households have access to ADSL (available, not subscribers.)

Target of 100% coverage to affordable BB by end of 2005. "Speak up for BB" campaign to help with demand creation.

Focus on moving from plumbing to winning the benefits. Spread the word on how it helps business and communities.

Traditional and roots music from Highlands being placed online for downloads (http://www.tradtunes.com/).

Young people using SMS instead of talk. No futurologists predicted in 1990 that tiny emails would be the future. So we can't predict future so easily.

Rt Hon Jim Wallace MSP QC, Deputy First Minister, Minister for Enterprise & Lifelong Learning

Via videolink from Edinburgh. .

Survey of businesses by Institute of Directors. 84% of businesses reported tangible business benefits. 61% cost savings. 64% linked BB to increased profits. Was low BB penetration in Scotland compared to rest of UK and elsewhere. Allocated GBP24m to get 70% of Scottish population with access. Incentive scheme for business take-up of BB. Over 8000 applications for assistance compared with initial target of 5000.

Scotland has benefited from UK govt funds (Dept of Trade and Industry). Penetration in remote ares of British Isles. Achieved 70% coverage ahead of target and within budget. Demand generation has encouraged more private sector supplier involvement. Now have 91% coverage, expect 95% by end of next summer.

Business take-up gone from 4% in 2002 to 27% in 2004. Almost 40% of businesses in Scotland are on-line (inc. dial-up and ISDN). Aiming for 100% BB availability by end of 2005.

Note that everyone will have the opportunity to talk for free, but PSTN charges linger on.!

Hard to provide commercial service in some parts of the country. Focus shifting from availability to take-up of BB. What makes people want to use BB? Content and applications. Increasingly clear many are only partly aware of what the technology can achieve.

Need to re-frame this debate around connectivity rather than BB per se. Human-centric rather than technology-centric. Faster group forming. Seed the virtual meeting spaces, much like chambers of commerce have done in meatspace.

Various UK regional development agencies working together.

Have comissioned independent research into deploying next-generation broadband for Scotland.

Q: Research into content that stimulates BB use? (Question slightly unclear.)

A: Recapped survey details. BB development as important as the physical transport. Every hotel in US with BB. Need the same expectation here.

Q: Pleased to hear 100% BB community access. I am trying to reach isolated English farms etc.

A: Have not made a commitment to 100% of people, but 100% of communities. Want to have BB access in every Scottish census area -- smallest geographical community unit. Contains about 50 households.

Q: Reference to 2nd generation BB research program. Timescales, and who? Do you have plans to create media and creative industries in parallel ways (apps and content)?

Seeing a theme here - people as concerned about creating compelling reasons to have BB as much as BB technical access. Internet is simulaneously global and parochial.

A: need to be quick, technology changing fast. HIE and Scottish Enterprise exists to support creative industries. Support for traditional music distribution to large US audience.

Video of John Baldacci, Governor of Maine

Maine like Scotland. Opportunities for regions that were once only available in places like New York. Maine overwhelmingly rural. Portland, ME fastest growing town in New England, just like Inverness in UK. Rural Maine companies every bit as cutting edge. Similar growth patterns.

Bob Downes, Director BT Scotland

Intro: a GBP16bn business

After 9/11, 3% of Internet users using web as primary news source. 26% at onset of Iraq war. Joe Trippi (Dean campaign manager) believes 2008 US election will be won and lost on Internet.

References to encouragement of blogging in Argyll region, centrally encouraged.

Euan Semple whipsers in my ear how BT still see a top-down model. Blogging is ground-up revolution.

Opportunities for NHS to use BB for telemedicine.

China rising - large proportion of computer, electronics, enginerring graduates, telecom exports.

UK BB projected entertainment spend due to explode. (Oops, centre makes content, you consume. Not.)

UK has low usage of government web sites.

A new type of literacy.

Map of US, only green areas (sparse) can get DSL. Many questions. Will DSL etc. give us the capacity we need? BT proud UK is moving to #1 globally in coverage of BB.

Map of UK showing BB coverage from BT. Not good in Scotland -- 399 of 565 unenabled exchanges are in Scotland. Many local partnerships. People used to see BB as a jargon word. No longer. Local partnerships have added 1m households to footprint.

Oh my god. Convergence, 21st Century Network. Sell any remaining BT stock, quick. Where's th fibre?!?!

Users with many software and device problems.

Can get more through with less with better compression techniques. Innovative solutions for DRM.

(If this is BT's best vision, it's a bit sad.)

Bt Rich Media enables thousands of content publishers to reach millions of people. (Lucky BT are there to help me, otherwise how else would I ever get this blog published...)

Seamless on-line experience for businesses. BT research project for monitoring elderly people. Internet helping kids do homework. Streaming sites.

For a distressing experience of legacy telco think, visit btrichmedia.com.

Technology needs to be hidden inside appliances.

Malcolm Matson, Entrepreneur and Business Dude

Many great men in Scottish history. Alexander Graeme Bell - "Watson come here". Over 100 years later. "Matson come here". First ever broadband local network in the world. 1983. Local community network. Lost my shirt.

Goals - a sharper and clearer understanding of big picture. Insighs from history. How to unlock and accellerate BB revolution. Educate you about Open Public Access Networks (OPLANs). Brief insight into Open Planet. And will try not to be oo rude or offensive. Have to speak the truth, however.

1982 was IT year. ITAP - Information Technology advisory Panel, reports to Thatcher govt. Some succinct conclusions. World going digital. Will be common digital formats. Will go over a new infrastructure, not copper. But no country in world has public policy and legal framework for network for voice, video and data. And Telecom Act 1984 and Cable & Tv Act 1984 gave birth to these networks, of which the Aberdeen one (above).

In 1982 BB was 2Mbit, symmertical. Now it's a fraction. Right them, wrong now.

1984, incumbent operator should not be anointed with power. Right them, wrong now.

Local networks vision. Right them, wrong now.

1984. country must be rewired soon. Now trying to patch up with compression and ADSL.

Carlota Perez book, Technological Revolutions and Financial Capital. Worried UK falling behind. Carla is Professor at Cambridge University. Five technology revolutions over last 100 years. Since 1971 in IT revolution. has looked at the change of pace. 20-30 year period initially where old paradigm creaks, 20-30 years of flowering and wealth creation. In the middle there's a turning point, turmoil. We are there now. Each of these revolutions has its own supportin infrastructure. Wasn't brought by any of the preceding ones. Why are we trying to extend the old paradigm? Western world stuck into a policy formulation method through industry consultation. Ask the industry if they want new technology deployed. Instead of public policy being driven by industry, we need it to be driven by technology.

1761, first canal. Lots of prosperity. 40-60 years, sensational growth. 4500 miles of canals in 1825. If we had a regulatory body and public policy. The Office of Canal Operation and Management (pub on OFCOM, UK telco regulator). Genius introduces steam engine. If that happened today canal industry would claim to see the benefit. Canal barges would have been pulled by steam engines. Seems the everyone wins. Even the horses would have loved it.

Of course, what happened was a burst of railway mania. 6500 miles of track by 1850. Uses and benefits many.

Railway reached Blackpool, gave birth to leisure industry, which in term caused street lighting.

Milk to cities, calcium in diet improves teeth. 275000 people in Uk working on railway. Canals declines and disappeared in 20 years.

Malcolm's map of telecom world. Friend who wants to make a telephone call. Signals we wants to be connected. Shows money flowing through smart network. Intelligence within the network, scarce resource is the network capacity. Riding in a train, the control is in the hands of the track authority. Doesn't matter where the users want to go.

Gneerate revenue for exclusive right to copper loop. Charge for access to long-haul network. Charge for value-added services. A $1,232 billion business in 2001. Same everywhere. www.itu.int. Runs incredible accounting system. I promise not to put wires into your country and vice-versa. Interconnect and pass money around.

Adam Smith qoute on conspiracy of minds. Book 1 Chapter X.

Circuit only lets you alk to one person, the phone company. And they might then let you connect to someone else.

Digital computer, silicon fibre, spread spectrum: 3 seminal world-changing pieces of technology.

Communications constrained by nework control replaced with one awash with abundance. _(Sonic booms from fighter aircraft!)

1976, $500k for storage, now, $1. Even bigger improvement for fiber. One strand of fiber can carry all UK traffic. Now awash with it. Now dozens of operators. 95% of it not lit, some transactlantic being decomissioned. Most of Uk public live within stonesthrow of ocean of bandwidth. Free market price without scarcity is zero.

How telcom industry deploying these great technologies? Used fiber for long-haul. Lots of computers. As we all know, digital computer invented for benefit for telcos! Ken Olsen of DEC in 1977 thought nobody would want one in their home. Wrong.

Want to interact with a dumb network that just connects us to other places -- down the street even. Telco trying to make old business model fit this new paradigm.

Started Colt to create passive optical network in City of London. No extra cost to you. Funding story, didn't fit with legacy telco model. AT&T involved, tried to go up value chain. Never got to see OPLAN vision come to fulfillment.

One of the highest-value UK companies. Boom and crash. Telecom meltdown. Patently obvious it was going to happen. There is no scarce resource. Routing of content is in hands of users.

Mother of all [business] battles. The first mile, who controls it. Will we have a toll booth? Will be we able to communicate within out communities? Doesn't need to touch the Internet. Net is just one BB service.

Free trade of good we have. But what about moving bits between ports of computers without taxes and tolls?

Bandwidth is free. It should be free. Once you've paid for the hardware. Who pays for the cabling and hub, then you've got a network. Who pays for the radio. Lots of creative answers to this. Could split cost, or pool purchases. Get somone else to buy it, lease it. But n ongoing usage charge. Wouldn't let a 3rd party own it and charge per bit.

ONCE YOU'VE PAID FOR THE HARDWARE, BANDWIDTH IS FREE.

Home owned by mortgage company. Invoice for crossings of threshold. Use of stairs bill. Use of WC and bathroom, $1 etc.

Aviemore conference, eTV broadband in room, GBP12.00. They don't charge for the light, why should they charge for this?

Industry revenues for telecom. What we pay for $6000bn on the table that wouldn't go into hands of an infrastructure owner.

ADSL IS NOT BROADBAND. Wasn't in 1984, and not now. Assumes content and value in the middle of the network to be downloaded. All value and talent is at the periphery. Highlands music has to beg someone to host their download environment.

Anything that tries to build a business model over that separates content producers and consumers will fail.

VoIP is greatest money-making opportunity of our time. Opportunity to keep the money in our pockets.

Quote from 1981 Citicorp chairman. Commercial history full of dead companies that failed to change.

Now there are millions around the world who know

Sunday Times article on BT. Telecom minnows heading to the wall. Haven't seen nothing yet of meltdown in telecom.

Should have open public access networks. Gigabit, symmetrical. Abundant low-cost connectivity. Services a real geographic community. Open for access to anyone inside that community. Infrastructure controlled separately from services.

Have 100 years of public buildings connected to telephone conpany. In 1984 saw fibre beyond central office. Also competition in biz market. But rest of us held hostage with copper. All FTTH fiber still gets channeled back to central office.

Empowers us in our existing socioeconomic relationships. Suits telecom to say about accessing other side of the world. No, it's about accessing neighbour. Networks will then branch out.

Dozens of OPLANs emerging, just not in UK. Utah, Amersterdam (450k homes). 35m euro saving because elderly people can stay longer in homes rather than going into care. Denmark, networks on farm grain silos. Some are aiming higher -- gigabit plus in California and Japan.

Many elements to being these OPLANs about in a community. A tough long-term assignment for public sector.

Q: John Wilson. Recommends Scotland establish broadband stakeholder group, like they have in Wales. Urge delegates to come together.

Q: Railways vs canals. Do we need more or less regulation?

A: Technology adopted based on its being useful. If there had been a railway stakeholder's group in 19th century, the canal owners would have been involved. In 19th century nothing stopping you beuilding railway. Nothing stopping the same in the UK. No regulatory inpediment from UK govt or Brussels [EU]. Go do it!

Highland fling

Coming across the Forth bridge on the train today, I remembered why I came back to Scotland. The week's clouds and drizzle had blown by, the sky was clear, the water calm. Winding up through the hills north of Perth the evening sun glowed on the auburn autumn hills. It's one of the most beautiful countries in the world.

Taking a break from gazing at the scenery, I noticed a couple of great features in the Financial Times newspaper.

The first was about bus deregulation. (You'll have to find the link yourself, they don't make it easy!) Back in 1986 the UK bus system was deregulated, except in London and Northern Ireland. Bus usage has recently started to climb again after decades of decline in the face of competition from the motor car. London has lead the way, but only at the cost of huge subsidy. In the rest of mainland Britain bus services are run for profit by private companies. The towns and cities where usage has increased are the ones where there has been a closer partnership between public and private bodies. For example, bus lanes have proven critical to providing buses with a competitive edge over congested car transport. Places where buses were put on a level with cars as road users saw further decline in bus usage.

Sound familiar? Rights of way for buses aren't so different from those for fibre or spectrum. Subsidy and public ownership of essential infrastructure assets? An inevitible consequence of the paradox of the best network, which erodes producer surplus and turns it into consumer surplus.

The second article of note was on BT's landline business deploying WiFi phones. This is a missed opportunity. Yes, it extends the reach of their network. That accords with the "distribution" business model archetype. First rule in telecom: reach the parts that other beers cannot reach. But the real opportunity to to add a second strategic winner, "increasing returns to scale". By making all BT broadband WiFi access points by default open to BT users, they could have created an invincible advantage. They're fluffing it.

Many super-successful businesses execute on two simultaneous business model archetypes. Dell manage a unique distribution method (direct to customer) and production method (agile supply chain with low inventory, build to order). Microsoft have "technology" + "increasing returns to scale". IBM have a unique sales method and technology integration.

The elements of telecom are subject to different natural business models. Access networks (like the retail side of broadband) are best with a unique sales or funding method. Long-haul is a capacity driven business model. Enabling platforms are technology and increasing returns to scale. For example, we all use SIP because we don't want to live in a technology desert island. Then the applications and product and distribution driven. Having more stores, real or virtual, counts for something. And these different strategic drivers explain the other FT article, on why BT is disintegrating. The wholesale and retail arms cannot coexist within one corporation, because they are trying to satisfy completely different strategic imperatives. BT can't fight on all four of the components listed above and stay in business.

Anyway, the purpose of my trip into the Scottish Highlands is to attend the Access to Broadband Campaign's conference. Watch this space!

When quality isn't job number one

Via David Isenberg I note the following screed from the poisoned pen of The Register's Andrew Orlowski:

Of course carriers have greater pretensions that that: they want to be TV channels and Wal Mart, too. Anything else to a carrier is what they call a "dumb pipe". But they'd would be wise to put aside such dreams and focus on QoS and coverage, their best weapons against insurgent VoIP-bearing data networks.

I agree totally with the coverage. It's why Verizon whipped everyone else's ass in the US wireless market. "Can you hear me now" was one of the most brilliant marketing campaigns of the decade. While others tried to push fancy data features, Verizon concentrated on the nuts and bolts. The business model archetype of telecom is "distribution", not "product". Verizon got it, and had a bigger distribution capability for their services than anyone else.

But QoS? It depends on what you mean. I think a better term would be "Quality of Experience". QoE has little or nothing to do with giving priority to certain spectral timeslots or packets. It's the end, not the means. As the network gets faster, statistical aggregation effects make network-based QoS increasingly irrelevant.

The words you use control the thoughts you have.

Peer to ... to ... peer

Just looking at a price list of discount calls to Lithuania from the UK, I notice the following:

important notice: we have been getting reports some numbers, usually the lowest cost ones are inaccessible at times due to capacity problems, this is why we supply a sorted list, use it :-)

I wonder how long it will be before there emerge "discount" internet connectivity providers with, ahem, less than comprehensive peering arrangements. You can try calling Aunt Maude in Melbourne via Skype, but the packet loss will be too horrendous for it to be practical.

In one way it wouldn't be a bad thing, because price discrimination lowers average prices and increases average consumer welfare. (You really don't want all those airline tickets to be one fixed price.) But the consumer is very unlikely to be able to know what they're really paying for here. A business class broadband connection isn't as visibly different as a business class airline seat. Whilst there are surveys published of broadband speeds, it's a bit late if you've just locked yourself into a 12 month contract based on the false promises of a broadband sales rep. And those survey speeds are just aggregated, with no breakdown into national, regional and global connectivity.

Inevitably this is going to be a case for regulation. The market failure is one of misrepresentation and asymmetry of knowledge between buyer and seller. How would I do it? Your broadband quality would be listed in the same way a new car's fuel consumption is rated. Get a third party to do independent monitoring, force each provider to participate. Rate every month based on congestion (how fast compared to advertised speed) and connectivity (how even speed is to globally dispersed points). Repeat until false.