Cook’s Collaborative Edge

A hat tip and thank you to my Economic of IP Networks List that has just begun its fifth year. I saw the following in email today. Sprint and Clearwire to Combine WiMAX Businesses, Creating a New Mobile Broadband Company

The language of the press release was glowing: (What follows are just the headlines of the release.)

Intel, Google, Comcast, Time Warner Cable and Bright House Networks to Invest $3.2 Billion in Combined Company, at Target Price of $20.00 per Share — Formation of New Company Brings Together the Nation’s Leaders in Communications, Technology Innovation and Entertainment — New Company to Speed Deployment of First Nationwide Next-Generation Mobile WiMAX Network — Transaction Designed to Unlock the Potential of Clearwire’s and Sprint’s 4G Assets — New Company to be Led by Seasoned Management Team from Clearwire and Sprint’s XOHM Business Unit; Board of Directors to Include Leading Wireless and Cable Executives

This did not sync with conversations I had in March with Peter Ecclesine of Cisco about 802.11y This link goes to the Wikipedia entry for 802.11y. I see now that it has been significantly updated since Peter first called my attention to it. It is well worth reading.

Consequently earlier today I asked my list: Any wireless folk or anyone else here willing to give their evaluation of this? i.e. the press release on Sprint and Clearwire’s new venture. I am trying to write up my Taipei research and have had other distractions - thus I admit that I have not dug into this to the degree i’d like to yet.

Is this viable because it uses licensed WiMAX? Most of Any wireless folk or anyone else here willing to give their evaluation of this? Is this viable because it uses licensed WiMAX? Most of WiMAX is licensed but not all? After Peter Ecclesine’s talk at the Cook-In more than one listener was ready to bury WiMAX, Presumably because of the alternative “licensing lite” and cognitive radio stuff 802-11y that Peter was talking about?

Is this for real or is it a prophalactic strike on the part of the WiMAX creators in an attempt to save it? Say in two years? Will there be essentially free alternatives around the time this new venture comes fully to market?

Within about two hours Harold Feld responded:

1) For Sprint&Clearwire: The universe has changed as a result of the 700 MHz auction. There is no question that AT&T and Verizon now rule the traditional wireless roost. Anyone hoping to get into mobile or stay in mobile if already there needs a strategy. So Sprint and Clearwire are desperate.

2) The cable guys also need a strategy against Verizon & AT&T’s ability to integrate wireline and wireless products. That’s not just about quadruple play to consumers, although there are elements of that as well. It is also about competing for enterprise customers and being able to respond if mobile becomes the primary growth market. In addition, Echostar’s acquisition of a serious footprint in the 700 MHz auction makes mobile television a much more likely market. While VZ and AT&T could respond relatively quickly to such a threat, Comcast and TW could not — despite their AWS spectrum holdings. Finally, with broadband maturing, and regulatory risk associated with the plans to monetize traffic by various tiering strategies, cable desperately needs an entry to the wireless world. When Spectrum Co. fell apart, Cox decided to go it alone (and did reasonably well in its effort to get a footprint). Comcast and TW have instead followed the usual path of cable wisdom and created a joint partnership. Share the risk, share the cost, and facilitate continued coordination among fellow cable operators.

3) Google lost its nerve in the 700 MHz auction. Now it finds Verizon is already playing games in C Block. They need someway to get a toehold into mobile before all the customers get grabbed. This is a much cheaper way of getting into wireless than actualy owning and operating a network, or even holding licenses and leasing spectrum.

4) Intel has already invested bilions in WiMax. Someone better start using it big time or they are in deep doo-doo.

So the parties all have incentive to make this real and make it work. But it still has a number of major hurdles to overcome, including the radically different business models and psychologies of the participants. That’s why I’m waiting to see what the FCC applications for license transfer actually say.

Relevant blog posts: Reserving Judgment on Sprint Deal

Spring Spectrum Fling http://www.wetmachine.com/totsf/item/1128

The 700 MHz Auction and the Cable/Telco War

A few minutes later Peter Ecclesine added: Here are Opinions on Clearwire deal from Deutsche Bank and Scott Moritz who is quoted here as saying “Building a network for one tenth the cost depends on who is counting.” Also, you might include the URL of the Clearwire slides

Finally Frank Coluccio offered a summation of this entire process:

This is the link to the MOMA web site on this theme.
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Note the first section on this page (URL above) devoted to John Sealy-Brown’s: Thinkering

“Many designers, scientists, and artists have turned to design to give method to their productive tinkering, or what John Seely Brown has called “thinkering.” They all belong to a new culture in which experimentation is guided by engagement with the world and open, constructive collaboration with colleagues and other specialists. Whether in the form of origami, nanofacture, or growth and aggregation, thinkering gives shape to the embryonic dialogue between design and science.”

The June issue offers an indepth examination of the stratregy behind BT’s move from its role as incumbent carrier to its new role of offering a multi-sided services platform from 1990s role of speculative capital that almost bankrupted it to a foundation of production capital where, although share holder returns will be smaller, the company will have a positive effect on the economy of areas it serves. interview with JP Rangaswami..Also March 18 to April 24 Symposium discussion. Click here to read the Executive Summary, Contents and Contributors to a 53 page June 2008 issue.

The May issue offers a detailed introduction to Carlota Perez’s analysis of five mqjor technology revolutions over the past 250 years. It points out the overwhelming need to to break the sway of speculative capital and for the state to focus on productive capital to enable full deployment of the ICT revolution. Click here for the Executive Summary, Contents and Contributors to a 50 page May 2008 issue.

Email just now from a throwback to the Internet bubble of 1999:

PRESS RELEASE
For Immediate Release
Contact: Courtney Musella
Phone: 802-857-1237
Retail Marketing Group’s New Marketing Plan
Partnership with MyWebGrocer to Launch Full Online Channels……

About MyWebGrocer: Number one in the industry, MyWebGrocer leads grocery retailers to profit in the online world since 1999.

I called Courtney and asked why I was getting spam she seemed surprised and said she was just using a software service and as I understood it using the software service to send out their press release to about 2000 so called grateful media outlets. I asked what software service. I am sorry I can’t tell you that she replied.

I did not take no for an answer and soon she said: It’s Vocus Software. They have a huge data base and you will really need good luck to get out of it. So I called Vocus and after 18 minutes of insistent exchanges got through to Julie Hollie, Manager of their TV Department (240 - 542-1962) - (they had 4 departments and weren’t quite sure where I belonged. I said just give me any with a manager who can answer the phone.) Julie was professional and helpful. Said I was added in 2005 - promised they would mark my record so they would never re-add me and said she removed me.

These 20th century operations are soooo slow to learn.

I found out last week why Kilnam Chon put me on the program in Xian China last summer.

Seems in the museum area I am a horrible raging iconoclast. Why? Because i think that archive projects should make what they archive readily available over the internet.

The Taiwan NDAP project is doing wonderful work. But what I have now found out is that the most stunning images are available to the public in the union catalogue at a resolution of about 300 by 400 pixels - this when they re archived as large as 6,000 by 4000 pixels. Follow the above link and you get to the union catalogue - in Mandarin. Look for the Catalogue link at the bottom of the screen. You have six icons with which to explore. And at this point the menu choices are all in Mandarin. I am looking now at the image of a Chinese scroll painting that is the size of my thumb on my screen. Maybe 100 by 300 pixels. To a non specialist it is meaningless. And so it goes through about 600,000 objects.

The people at the NPM were very very nice to me - i have no complaints there. They were only following rules. But the rules! LORD. The museum owns all rights to every image - will not allow photography. I manage to get special permission and got about 200 pictures under hand held conditions. Of the 200 fifty are probably pretty darn good. But I had to sign an imposing legal document not to share any!!!

And the irony is immense. The are doing the world’s leading work in digitization, digital display tech within the museum… They have a HUGE multi year long marketing campaign designed to make the museum relevant to the citizens of Taiwan and the world. This includes a feature dramatic film shot in and around the museum…. I mean what they have done is simply awesome… I am bringing back several associated DVDs and yet SADLY the directors of the museum go to GREAT lengths to be certain that the world class treasures there- in digital image form remain solely under their control and do not circulate on the internet.

They mean well but they simply, as far as i can so far tell, have not yet grasped the MEANING of the internet. They would like to have the kids interested and climbing the walls to come in and they have done world class animations…… but the animations alone will not tear down the barriers they way they could by letting the kids n the museum and giving them the run of the place with digital cameras to take pictures that interest them and share them with their friends.

I think part of the concern is a business model for sustainability…. but that model, as far as i can so far tell, is solidly pre internet.

I asked today and was shown how to find the image of the world famous jadite cabbage on the internet.

1. go to the union catalog - available so far only in Chinese and Stella Shen does a search and in 90 seconds there it was. I would guess in 200 by 300 pixel size…. To see the 2000 by 3000 or 4000 by 6000 pixel size - requires special authorization.!!!!!!

I am a raging fan of what they are doing here - don’t get me wrong but I am soooo disappointed that so far the directors of the content holdings believe that they must maintain high walls and tight control. The national palace museum is regarded as the finest single repository of Chinese art in the world - yet it is guarded as though it were a medieval castle.

Someone i greatly respect smiled and counseled patience. The time will come…they will learn. I hope so. for many reasons. Academia Sinica is awesome. Its like the institute for advanced studies only ten times the size. And for those of you who have seen the Russian Ark DVD. Acadmiia Sinica is the chinese ark in ways that i could never even begin to realize before I came.

An expert in Domain names wrote in a private list:

The .COM and .NET adjusted base surpassed 80.4 million domain name registrations at the end of 2007. Meanwhile, registry fees will rise 7% for .COM and 10% for .NET in October. That’s $.46 more for VeriSign’s bottom line for every .COM registration and $.36 more for each .NET registration. .COM+.NET are geese that lay $.5B dollar eggs for VeriSign.

Karl Auerbach replied and gave me permission to publish:

When is ICANN ever going to do an audit to learn the actual costs that Verisign incurs to deliver this registry service.

It is an abrogation of ICANN’s responsibility to the public to force that public to pay a fiat price (indirectly, but nonetheless paid by the public) without being able to provide concrete justification for that price.

My own estimate is about $0.03 per name per year. Some others have estimated as high as $2.00 per name per year. No one has ever estimated anything even close to the amount that ICANN gifts unto Verisign.

And using that very generous $2.00 estimate, ICANN is gifting unto Verisign, out of the pockets of internet users, about $400,000,000 every year, year-in, year-out.

At my estimate of $0.03 that amount rises to about $560,000,000 every year.

It is no wonder that Verisign doesn’t challenge ICANN’s legitimacy; ICANN has been a gift of wonder for Verisign.

When is ICANN’s board going to do an audit?

The change is from finance to production in the model of Carlota Perez. The old finance model is to extract tolls for use of owned and rigidly controlled resources. The purpose of the old company is to bill for minutes of use of a network designed to constrain user’s freedom because if it is not constrained then management fears that less minutes can be billed. And since finance capital demands improvements every 90 days, the circular and very narrow goal of the company becomes to figure out how to bill for more minutes.

Internet, web 2.0, open source, Moore’s law, and related developments make a switch from a finance based business model to a production model possible. They also make it possible for a company to develop a new business model with an operational ecology where an entity that owns a physical network can remodel itself by overlaying onto that network a web 2.0 based services platform that greatly broadens the scope of what it can offer its customers.

Such a world view says to customers: here is a collaborative environment where we can develop and build. We don’t own it all and act like a monopolist. We share resources. We are a magnet and a catalyst. We are the provider of a services platform on which our customers can take what they like and contribute what they want. Our services platform may in time become to look a bit like a super market given the variety of what will be possible, but we hope to make navigation and decisions simple. If we do not try to fight the tech push of the internet and related capabilities and become first to market with such a platform we may even be able to blaze a trail out of the 90 day financial capital conundrum by showing shareholders that here is a vastly better way than offering access by the billed minute to a tightly controlled wall garden.

As the world moves in this direction, proprietary solutions are out and three business roles remain. Hardware builder, software builder and open access integrator and educator. With the speed of change increasing, the amount of information overwhelming, - with John Hagel and John Seely Brown saying there will be no equilibrium where things settle down and allow a sorting out — the best of the ICT companies are recognizing that an educational and integrational role is where they will find their market value. IBM was perhaps the first to figure this out. HP and Sun have followed. Cisco by awarding itself the position of teacher of the urban world on ways to cope with global warming through its CUD program has made a very smart move. I can certainly testify that the capabilities out there are far beyond my limited ability to figure out how to use effectively. We have a problem. Without effective use, the wealth creation potential of the technology is stunted.

What we have then is an opportunity for the building of an attractor. Someone with math physics knowledge tell me if strange attractor is an apt term? An attractor that is multi dimensional? Horizontal as well as vertical. An attractor that gives access to the global ICT grid and invites customers to decide how they will use that access. But an attractor that because it offers application layer services frees the owner from dependence on selling merely commodity pipes provides a viable economic future. Indeed the closest model that I can think of now is Amazon which is selling access to utility computing. But Amazon is also selling goods and, through its web service offering to the world, a chance to use Amazon’s services platform to sell goods independently as long as Amazon gets a cut.

Now with this model, attractive business opportunities lie with an entity that can build a services platform and offer it over and global state of the art IP network. BT is the first company that has set out to do just this. (Although others to a greater or lesser degree certainly could.)

Consider JP Rangaswami’s November 2007 interview with Dan Farber

JP says there: BT is a platform based, software driven network, iT services company - we are in 190 countries with 150,000 people. A truly converged design authority puts us in the right place to attack the customers changing requirements - we have done away with the CIO title we call ourselves managing directors because we are directors of certain businesses. Part of the reason for getting rid of the CIO title is that we reflect disciplines far beyond MIS — what we represent is broader than networks… it is design… We go beyond thinking about just the technology to really include the people networks and processes. Our goal is to teach the customer to fish rather than to sell them fishes. Our aim is to expose our assets in such a way that the customer can use them to create new value for himself and for his customers. The customer does this by means of our assets as usable tools and services.

If a problem is truly generic then we use open source to solve it because that’s where the market tends to persist at the highest quality. if the problem is contained to a limited market place we use closed source. You need to expose assets as services not as products. You do it in such a way that your customers can create other services out of them. [End JP’s quotes].

Now in the March 14 2008, Telephony Online we read in an updated interview with JP
Buried about four paragraphs down we find:

“BT’s big-picture plans include exposing a wide array of capabilities via APIs and SDKs – including virtualized storage/data center capabilities, BSS/OSS capabilities and carefully-vetted access to customers and customer data – the initial SDK release is focused on the network.”

Of course to get from here to there not only will governments have to encourage capital for the use of production rather than speculation (finance), but everyone – ILEC and municipality alike will have to understand the absolute imperative of bringing fiber to the end user and doing it now. This also means that in the United States Level 3 a crown jewel of our infrastructure must embrace a broader services platform concept as outlined here so that it is no longer just a wholesale supplier.

So there you have it. Leaving aside of course questions of execution and the shaping of national policies to push the use of capital away from finance, toward development in order to enable other former carriers to follow in BT’s footsteps.

Richard Koman comments in an excellent piece called Verizon fixes P2P problem - on its network at least: Verizon has been experimenting with a new technology called P4P, which localizes P2P file transfers, as many media are reporting today. Essentially, rather than randomly pulling pieces of a file from around the world, Verizon is communicating the locations of their users, so local sources are preferred over distant ones. This reduces the number of hops from an average of 5.5 to 0.89.

To which on my economics of IP Networks list Dirk van der Woude commented: Some people @ Verizon seem to understand that P2P actually can be beneficial, especially when the network operator realises that it’s mission is to transport and not to police. When there is P2P policing to be done that is, as more and more legal content is P2P’ed.

However, the part on ‘communicating the locations of their users, so local sources are preferred over distant ones’ may well sound like music to the ears of RIAA and other trigger happy Mafiyosi…

Shortly there after Chris Savage added this:

I have long given Verizon their props for recognizing that they had to seriously upgrade their network to compete with cable. I have also opined in various places that, with a high-bandwidth Verizon network in place, you will end up with competition between two high-level business models – Verizon’s “common carrier” model and cable’s “editorial control” model.

Don’t take those terms literally. What I mean is that Verizon’s entire cultural history – its corporate DNA – is running a common carrier network where its job is to sell transmission (at various bandwidths) efficiently and not give a damn about what is being transmitted. For cable the history/corporate DNA is the reverse: total control over the transmissions. From Verizon’s perspective the Internet may be peculiar and a bit wooly around the edges, but at the end of the day it is just shipping bits in a different format. From cable’s perspective the Internet is a wonderful revenue source that is freaky and bizarre once you look under the hood.

Cook’s Edge: let’s hope more and moretelcos catch this DNA. BT with its increasing empahsis on utlity computing certainly has it.

For some months now – actually almost a year – this blog has become more peripheral as I tried something new. My private Architecture and Economics of IP Networks has become quite successful. Currently 207 members from 21 different nations. Some of the more active folks have said to me – do a conference so that we can meet face to face.

I had never done one of these, and left to my own devices could not have. But I have teamed up with Jerry Michalski, Kaliya Hamlin and Sara Wedeman and we have a small but significant event in Loma Linda California March 24-26. See the Conference Wiki for details.
We will have at least 30 people - pretty good considering the recruitment was from a global mail list of lest than 210.

We will have presentations from Peter Ecclesine Chair of the 802.11y working group and Sascha Meinrath. They will both arrive Sunday Evening and be available for the pre meeting workshop with James Hettrick Monday morning.

This has been a new experience for me…. exhilarating but I must say TIME consuming! Until you do it – you just can’t imagine the details that have to be chased down. Spare cycles that could have gone to the blog have gone to the Cook–in. I have the impression that younger folk can switch multi tasking focus at lightspeed.

Regrettably I am just a bit slower. I leave for VON San Jose on Tuesday the 18, go to Loma Linda on the 20th and arrive back home on the 27.

If anyone reading this would like to attend contact me directly and I will tell you how.

I think it is fair to say that for a long time we have all been
wondering what will emerge as the dominant business model by means of which carriers to cope with the internet? Will they try to strangle and control it as ATT is-
sticking, no matter what, to their old models about voice and billable
events or will they find more internet friendly outcomes?

Level 3 - going from about 700 to 7000 fiber connected buildings on its
network as a result of acquisitions in 2005-2006 - is in a position to
offer on net interconnection END to END to likely the largest number
of enterprise customers in North America and possibly even in Europe.
They have the utility like grid that Carr talks about in his Big
Switch. BT in its 21 CN network is building something similar.

So what can we learn from what Carr writes about the switch from
client server model to utility computing model? With Amazon EC and S3
system and with Gigaswitches and now with 3Tera’s AppLogic — generic
commodity-based, easy-to-use, grid based utility platforms are
emerging that will allow customers to port complex and power hungry in
house software systems to grid platforms running at internet connected
data centers around the globe. There enterprise customers can move
and scale their software systems encrypted and virtualized in ways
that, given the current very uncertain economy will be very cost
effective.

Carr maintains that our technology and economic future, like the
electric grid a century ago, lies in the computing grid of today.

It seems that national carriers had better turn into national grid
builders — the sooner the better.

So the question then is can the carrier metamorphose from the phone
company to the national and international grid company? Big
enterprises first and then smaller down through SMB and in 2 or 3
years through 3650 ghz licensing and 802.11y broadband enable
customers homes?

BT’s management CERTAINLY understands the important of these trends
better than most carriers. When you realize that BT is 3Tera’s
biggest customer, the possibilities become very intriguing and food
for another comment later.