The NewGround Blog

Competition in the “Last Mile”

Via Susan Crawford, we learn that at least one government official understands what’s at stake in the telecom regulatory environment in Washington.  In support of a recent report from the FTC’s Internet Access Task Force Commissioner Jon Leibowitz opines:

Let me begin by commending the staff for this Report. It begins the process of identifying guiding principles for our growing Internet competition mission. At least as importantly, to my mind the Report provides a powerful basis for the Commission to oppose, as part of our advocacy program, future attempts by states to limit or prohibit municipalities from offering broadband to their own residents. Some of these proposed laws address legitimate questions, but others are simply unconscionable.

In the same report, he also observes:

As an agency charged with enforcing the antitrust laws, we know the importance of competition well. Increased competition means lower prices and higher quality for consumers. But the lack of competition along the “last mile” of the Internet to consumers can have an even more profound effect than high prices in local markets. It can interfere with the growth and development of the Internet everywhere.

I suppose we should be happy that at least one commissioner "gets" it, and that his commission’s mission is to promote and advance the cause of fair competition, especially when the competitors and regulators in the communications industry seem to prefer unfair competition in spite of the harm it brings to our country, its commerce and its citizens.

Digital Storage & the Second Gutenberg

n response to Wretchard’s post regarding the Second Gutenberg Revolution, I would submit that there is no need to worry about books as containers for human thought/history. Given the continually accelerating and exponentially declining cost of digital storage, I-Pods and similar devices with terabyte and petabyte storage capabilities are just around the corner.  Consequently, it will soon be as easy for people to carry the Library of Congress plus the entire historical catalog of recorded music as it is to carry one’s cell phone.  The Library of Congress would require approximately 80 terabytes of storage capacity, which at today’s cost of approximately $.40/GB, would cost about $30,000. Continued progression down this cost curve is certain, short of nuclear war, which means that the price/GB for data storage in 5 years will be under $.02/GB, at which point the Library could be stored for $1600. Another five years and the cost will be $1/TB (terabyte), or $80.  Remember, an I-Pod is essentially a hard drive with earphones, and now a small video monitor, attached.  Over 2 billion people currently own cell phones, and assuming trends for the last five years continue,  that number will exceed 3 billion by 2010. The rate of decline in storage costs blows away the rate of decline in either cell phone costs or cost/minute of call time, so you can see where its all headed (eg, Apple’s announcement yesterday re: movie downloads).  If your find these figures hard to fathom, remember that the first IBM PC included 64 MB of RAM; the current PC standard is 1 GB.  Future archaelogists should not have to look too hard to find these devices. Furthermore, Google has already scanned all non-copyright protected books into its database, and others will follow suit.  Finally, for those who don’t know about it, the Internet Archives (aka Wayback Machine) already contains an impressive database of historical Internet pageviews, music and other digital information (including most of the live performances of the Grateful Dead in high quality audio format).  Check it out!

Caravan – Van Morrison & The Band

Thanks to Scott at Powerline for this post celebrating Van Morrison’s 61st birthday and tipping me off to a video on YouTube of Van Morrison singing "Caravan" with The Band during their "Last Waltz".  He makes the following observation about this particular performance:

Van’s performance with the Band is memorably documented on film in Martin Scorsese’s "The Last Waltz." Below, courtesy of YouTube, is the clip with Van and the Band performing "Caravan" from "The Last Waltz." Van steals the show. The camera catches Van with the barest hint of a smile as he triumphantly leaves the stage. "Hey, Van the Man," Robbie Robertson exults.

Here’s the YouTube vid:

New Business Ideas

Although a bit dated, this post by Michael Arrington at TechCrunch provides a great list of seriously legitimate web-based business ideas.  Will follow up on some of these later, but I thought this was a good link from which to begin my blogging here at NewGround Technologies.

Danger Ahead! Telcos Seek to Destroy the Internet

These quotes aren’t linked because they were carried in numerous publications.  The first one is a "mashup" of irrelevant irrationality, economic idiocy, and illogical childish "that’s not fair!" temper tantrum.  Said differently, its just stupid!

"During the hurricanes, Google didn’t pay to have the DSL restored," said BellSouth spokesman Jeff Battcher. "We’re paying all that money."

Additional quotes from Bill Smith (BellSouth), Whitacre (SBC/att) and Seidenberg (Verizon) to be added later

Beam Me Up, Scotty!!!

Scotsman.com News – Sci-Tech – Welcome to Mars express: only a three hour trip.

AN EXTRAORDINARY "hyperspace" engine that could make interstellar space travel a reality by flying into other dimensions is being investigated by the United States government.

The hypothetical device, which has been outlined in principle but is based on a controversial theory about the fabric of the universe, could potentially allow a spacecraft to travel to Mars in three hours and journey to a star 11 light years away in just 80 days, according to a report in today’s New Scientist magazine.

Lots of Lessons

Tom Evslin discusses Yahoo’s purchase of del.icio.us and touches on several issues of interest and/ or lessons to be learned.  First, he uses this deal as an example to put down the the notion that a company must be built to generate earnings/cash flow in order to create value.  Tom says:

Even if Joshua and company built del.icio.us only for resale, they created real value in aggregating users and creating a folksonomy – a user defined categorization and ranking of web content.  They did a brilliant job of solving the dilemma of all network-value businesses – how do you get to critical mass when there is NO network value for the first users?

Real estate analogy holds, but lots more to it – risk, sub-market knowledge, etc.

Remember Metcalfe’s Law that the value of a network scales with the square of the number of users.  This implies that big networks have huge value but also that small networks have almost no value at all,  Makes it hard to get started.

Del.icio.us had value for user #1 even if it wasn’t “network” value.  Tagging is a good way to remember all the web pages you may want to find again.  That use doesn’t depend on any one else doing any tagging.  So more and more people used del.icio.us to bookmark web pages for later retrieval.

Network value – build it and they will come?

Since the tags are public, anyone can use everyone else’s tags as a way to find information.  So, as soon as enough people tagged for their own selfish purpose, their tags became useful to other people looking for web content.  Moreover, there is information in how many people tagged a particular web site or blog.  Popularity means something although it’s not always clear what.  Soon del.icio.us had real network value and was off to the races.

First to market – ?

Del.icio.us got to a critical mass of users before its competitors.  That’s crucial to a network business because this lead kicks off a virtuous circle. The network service with the most users has the most value to each new user.  Other things being anywhere near equal, the larger network therefore gets more than its share of new users and grows faster than its would-be competitors.  Aggregating users faster than anyone else is why Skype succeeded and it’s why del.icio.us succeeded as well.

"Cellular Networks Suck"

From Broadband Reports:

"Cellular networks haven’t taken off [for data] because cellular networks currently suck. Badly. It’s our fault – we’ve done it badly," states Nokia’s Markku Hollstr�m to Silicon.com. Hollstr�m insists that while Wimax wireless broadband will have its niche, "WiMax is hype at the moment – and it’s pretty bad hype."