The Economist
The big three-O
"The vast majority of the internet's traffic begins and ends its journey on Ethernet networks, which are found in nearly every office network and home broadband connection.
It was not supposed to be this way. Few imagined that this particular networking protocol would last as long as it has. Indeed, the landscape is littered with better-financed, better-backed rival protocols that failed against Ethernet. IBM's Token Ring system is one famous casualty. Asynchronous Transfer Mode, supported by the telephone industry, is another. So the case of Ethernet is worth examining: the reasons for its longevity may offer lessons to the information-technology industry."
7:15 PM"For the first decade of the personal computer age, most machines worked in splendid isolation. People hadn't realized that PCs wouldn't fulfill their potential until they were bound together in networks. That was Metcalfe's point. When he began pushing the idea of networks, computer users shrugged. Why not just carry information by hand from machine to machine? Why bother with a maze of wires plugged into costly circuit boards?"
"Nearly unknown a couple of years ago, WiFi is now a $2 billion market, and it's just getting warmed up. These days nobody asks why we'd buy wireless ethernet gear, when good old Category 5 cables still work fine. We're considerably more open-minded about such things, thanks in part to Bob Metcalfe."
"There are four business models out there today. The first is the vertical model exemplified in the 1980s by the IBM monopoly. The second, which dominates today, is the horizontal model dominated by AOL, Cisco, Intel and Microsoft. They are also monopolies, I might add. The third is the Linux/open-source business model. And the fourth is the Ethernet business model.
It's based on de jure standards with proprietary implementations of those de jure standards, and it is unlike open source in that competitors don't give their intellectual property away. The competition is fierce, but there is a market ethic that products will be interoperable. And the standard evolves rapidly based on market engagement in such a way to value the installed base. There is a heavy value placed on sustaining and maintaining the installed base. That's the Ethernet business model."
Washington Post
High Speed With the Highest Anxiety
"Both sides agreed on one point: Nobody has any idea how to turn Wi-Fi into a profitable business.
Of all the talk, Babbio's prickly attack on MCI -- along with his lukewarm comments about Wi-Fi -- perhaps best reflected the painful disputes consuming the troubled telecom industry. While studies show broadband Internet access has reached nearly a third of American homes, it remains unclear what kind of pricing, quality and add-on services consumers should expect from their beleaguered suppliers."
8:45 PM"AOL Time Warner's entry into voice service Thursday highlights the latest headache for regional phone companies, whose lock on the so-called local loop is looking increasingly precarious."
"Until recently, telephone companies didn't worry about cable adding voice services into their bundles. But the growing sophistication of voice over IP, which turns voice calls into digital packets for dispatch over the Internet, allows cable companies to sell cable TV, telephone service and broadband connections on one bill. That's one more service--specifically cable television--than telephone companies can offer."
"Think of it as the love child of the two hottest developments in telecom: voice over IP and wireless broadband. There are more than 3.5 million VoIP phones in the US - mostly at work - up from practically none five years ago. Meanwhile, the number of commercial Wi-Fi hot spots in the US exploded from 2,000 to 12,000 last year. Combine the two and any gadget - laptop, PDA, tablet PC, whatever - can become a voice communication device."
"For big providers like AT&T, Verizon, and T-Mobile, voice over Wi-Fi isn't pretty. Those companies blew billions on licenses for next-gen cellular networks. Now they may find themselves undercut by the same grassroots groups bringing free, unregulated Wi-Fi to the urban masses."
redux [12.16.02]
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"After all, telecommunications and technology companies lost $7.6 billion in global market value from March 2000 to September 2002, as the industry was gripped by stunning collapses, financial scandals and an effort to absorb excess capacity on globe-spanning communications systems.
But alongside the industry's search for its direction after such turmoil are trends that threaten to destabilize global telecommunications further in 2003. These trends could be described as the start of a cannibalization of established services by disruptive new technologies."
redux [08.07.02]
"Of course The Economist is not alone in this fundamental error but "Crash" story is a useful foil for addressing this misunderstanding.
It is a tragic misunderstanding since the woes of the Telecom industry are seen as representing the state of the economy rather than the collapsing of a facade of a Potemkin industry. In 1900's there was a real telecommunications industry just like in the 1800's when there was a thriving business in transporting ice from frozen lakes to warmer climes. Just as refrigeration put an end to the need for buying ice, the Internet has put an end to the need to buy telecommunications services from others. We just need commodity connectivity."
redux [07.22.02]
"The telecoms bust is some ten times bigger than the better-known dotcom crash: the rise and fall of telecoms may indeed qualify as the largest bubble in history. Telecoms firms have run up total debts of around $1 trillion. And as if this were not enough, the industry has also disgraced itself by using fraudulent accounting tricks in an attempt to conceal the scale of the disaster."
"The danger is that the traumatic scale of the telecoms crisis will cause the pendulum to swing back too far in favour of the former monopolies. In the short term, they are likely to attract investment, to pick up the assets of bankrupt rivals, and to lead the way in consolidating the industry."
redux [06.18.02]
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"The turmoil continues in telecommunications, making the long-awaited turnaround increasingly difficult to call. Indeed, in light of a wave of bad news last week and through the weekend, some analysts say the industry's problems could actually become worse before they become better."
" "I foresee a near total collapse as the endgame," said Susan Kalla, a senior telecommunications analyst at Friedman, Billings & Ramsey. "I've become more reactionary in the last month as it becomes clear that almost nothing is working in the industry's favor.""
redux [03.15.02]
"After nearly $2 trillion of investment, the build-out of the information superhighway has run out of gas. The mountain of money invested by wannabe global telecom providers continues to go up in smoke. Though the smaller upstarts were first to pull the plug, major carriers like Global Crossing are now hitting bankruptcy court. And analysts say it could be years before the industry shakes off its debt hangover, absorbs a glut of capacity and begins to grow again."
redux [02.08.02]
""Some of the more highly leveraged companies are really struggling. They don't have the cash flow to make their payments," says James Glen, a telecom economist with Economy.com."
Worse, Baby Bells such as Verizon (VZ ) and SBC (SBC ) continue to eat away at consumer long-distance monopoly of AT&T, Sprint, and WorldCom. That's on top of the woes the big three already face in operating backbone undersea and land-based networks, which they resell to other operators in some places. While Sprint, WorldCom, and AT&T don't face the type of imminent cash crunch as Global Crossing does, a consolidation among even the major long-distance providers is now a possibility."
"The fundamental health of the [telecom] sector is likely to get worse before it gets better . . . The combination of: the sector's anemic growth outlook, the cannibalizing competitive mega-trends of wireless substitution, voice to data migration, Bell entry into long distance combined with local competition, and the bubble-induced excesses in debt and over-capacity, all create a powerful wealth destroying dynamic. Telecom's 'debt spiral' has gotten so bad that even the relatively strongest players who are still able to raise significant capital (VZ, SBC, and BLS) don't want to assume any more liabilities or business risk. Consequently, Precursor is reversing its long held view that consolidation can help improve the sector from excess capacity and debt any time soon."
"Despite the darkened outlook, new communications capabilities are within reach that will make the current Internet look like tin cans and string. The technical know-how exists. Radically simplified technologies can blast bits a million times faster than the current network at a millionth of the cost. These are sitting in laboratories undeveloped, in warehouses undeployed, and in the field underutilized.
It's not even that the communications revolution has been derailed by inept or self-aggrandizing behavior by incumbent telephone companies and their government regulators. Something more fundamental is at work."
Forbes
George Soros back doing what he does best
"Financier George Soros is back doing the two things he does best -- punishing a global currency and spending some of his billions on projects that irk those in power.
This week Soros, who "broke" the British pound in 1992, helped push the U.S. dollar down to a near all-time low against the euro by announcing he was selling greenbacks.
The self-proclaimed "dissident by nature" also said he was setting up a watchdog group to make sure Washington does not misspend oil revenues from Iraq."
5:44 PM""However, this move is not designed to have much effect now. It is meant to have an effect over an extended period and is basically using the recession to redistribute income to the wealthy," Soros told CNBC financial news television.
"I think that is really not a very effective way of using a deficit. I think we do need right now both a stimulative monetary policy and a temporary deficit, not a permanent one.""
redux [05.07.02]
"George Soros has written a brilliant, powerful book, On Globalization , which goes beyond just describing the failures of the current international arrangements. He proposes concrete, practical reforms. Soros, having made his fortune on the international capital markets, should know something about them. But what makes this book so impressive is that he combines these insights with a humanity that comes through in every subject he touches on.
What makes some of his proposals so convincing, especially those concerning foreign assistance, is that he has acted on them. He has been as successful as a social entrepreneur as he has been as a financier. He has put his money where his mouth is, so to speak, and his network of Open Society foundations has had enormous influence, especially in Eastern Europe, first in supporting dissidents and then in setting up post-Communist institutions such as the Central European University in Budapest. His overall program has been far more successful--and far more influential--than those of most governments, including that of the US."
redux [03.04.01]
"George Soros is the best-known financial speculator of our time, godfather of hedge funds, those fast-moving and largely unregulated raiders in the corporate jungle that make their killings from fluctuations in the prices of stocks, commodities, currencies. When he writes books readers might reasonably expect tips on how to make money. They will be disappointed. Soros's ambitions are altogether more exalted. Having become a billionaire, he has set himself up as the philosopher and statesman of global capitalism, tirelessly telling the world that it now needs to remove the ladder by which he himself climbed to fame and fortune.""
"Remember that very embodiment of the Peter Principle, Defense Secretary Robert McNamara? Once the Ford chief executive who unveiled the Edsel, at the Pentagon he introduced body counts as quantitative measures of success in Vietnam, and a self-defeating doctrine of slow escalation. As its director, he reoriented the World Bank to giving fish to poor nations rather than teaching them to fish. And as a 1980s eminence grise he added to his nonsensical nuclear notion of "purposeful vulnerability" by proposing to foreswear first strikes.
It is this oracle who comes to mind in reading financier George Soros's latest book on the international financial system and tensions between capitalism and democracy. The guilt which inspired McNamara's commitment to a "Basic Human Needs" doctrine at the World Bank and apology for Vietnam in In Retrospect can be found in Soros as well, whose penitent critique of capitalism's inequities is probably not unrelated to his colossal success in currency speculation." ."
"One thing about George Soros everyone can agree on: He isn't worried what people think of him. Malaysian Prime Minister Mahathir Mohamad blamed the American billionaire for nearly ruining Malaysia's economy with massive currency speculation. Hard-core Russian nationalists decried as "meddling" his funding of progressive newspapers and institutions in post-Soviet Russia. Now, it's a prickly domestic cause--drug policy--that has folks taking aim at this hard-nosed financier and controversial philanthropist."
Wired News
A Spy Machine of DARPA's Dreams
"It's a memory aid! A robotic assistant! An epidemic detector! An all-seeing, ultra-intrusive spying program!
The Pentagon is about to embark on a stunningly ambitious research project designed to gather every conceivable bit of information about a person's life, index all the information and make it searchable.
What national security experts and civil libertarians want to know is, why would the Defense Department want to do such a thing?"
7:25 PMredux [05.07.03]
"Leaders of two much-criticized projects that privacy advocates fear will collect massive amounts of data on U.S. residents defended those projects before the U.S. Congress Tuesday, saying the projects will be much more limited in scope than opponents fear."
"Asked how DARPA would ensure that any information about U.S. residents caught in TIA's net would be correct, Tether said that's up to agencies like the FBI to decide. "At DARPA, we develop the tools," he said. "We don't collect any data. We're not the people who collect data; we're the people who supply the analytical tools to the people who collect the data.""
redux [03.25.03]
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"As the government gears up its domestic security program, the chief executive of a venture capital firm founded by the Central Intelligence Agency warned today of the danger of amassing a large, unified database that would be available to government investigators -- as some technology executives have advocated.
"I think it's very dangerous to give the government total access," said Gilman Louie, chief executive of In-Q-Tel, a venture fund established by the C.I.A. in 1999."
redux [02.12.03]
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"House and Senate negotiators have agreed that a Pentagon project intended to detect terrorists by monitoring Internet e-mail and commercial databases for health, financial and travel information cannot be used against Americans."
"One important factor in the breadth of the opposition is the fact that the research project is headed by Adm. John M. Poindexter. Several members of Congress have said that the admiral was an unwelcome symbol because he had been convicted of lying to Congress about weapons sales to Iran and illegal aid to Nicaraguan rebels, an issue with constitutional ramifications, the Iran-contra affair."
"If we are to defeat terrorists and their supporters, a wide range of organizations must work together. I am committed to the closest possible cooperation with the Intelligence Community and other government agencies. Accordingly, I strongly support the President's initiative to establish a Terrorist Threat Integration Center (TTIC) that will merge and analyze terrorist-related information collected domestically and abroad. This initiative will be crucially important to the success of our mission in the FBI, and it will take us to the next level in being able to prevent another terrorist attack on our nation."
redux [01.29.03]
"A forthcoming government database will compile information from all federal agencies and the private sector on people deemed possible terrorist threats, President Bush said Tuesday evening."
" The White House offered few details about how TTIC will evolve, but critics of an existing data-mining program under development by the U.S. government were quick to draw comparisons to the controversial Total Information Awareness (TIA) project."
"The Justice Department did not immediately respond to questions on Wednesday about what information on Americans would be accessible to the TTIC. One government official with knowledge of the center, who spoke on condition of anonymity, said it was not designed to supplant Poindexter's efforts but was instead "an effort by the president to bring together elements of agencies that are focused on terrorism.""
"The threat integration center will analyze intelligence and ensure the information is shared throughout the federal government as well as with state and local authorities. It also will have the authority to set requirements for all intelligence agencies and assign collection operations to the CIA, the Pentagon, the FBI and, through Homeland Security, to state and local law enforcement authorities.
"This will be the first time in our history that all of these elements come together," the official said."
"The new terrorist information center would be headed by a senior government official reporting to the director of the CIA, which raises the question of how much control over intelligence operations the FBI is being given, even in light of its expanding mission."
"Treverton added that the new intelligence structure probably reflects some battling over turf among intelligence agencies. The CIA director, George Tenet, will not cede any of his authority over intelligence collection and analysis under the new plan, nor will his access to the president decrease. Quite the opposite, Anderson said. "It will probably strengthen his role and his visibility.""
The Mercury News
Growing up wired
"In the coming weeks, the first wave in a generation of teens unlike any other will graduate from Silicon Valley high schools: The vast majority of them will remember an adolescence lived to an astonishing degree on the Internet.
These teens, some of whom have been online nearly a decade, are among the Internet's first natives, at home in the wired world to a degree their parents may never wholly understand."
6:24 PMredux [12.12.02]
""Instant messaging has just replaced the phone ... for their generation," says Mary Anne Thomas, a Houston mother on the other side of town, with two teen boys addicted to IM.
She has noticed that her oldest son, who's normally quite shy around girls, feels more comfortable talking to them online - a positive, she thinks."
"Some parents worry that teens could get into trouble by talking to so many different - and sometimes unknown - buddies. Certainly, that's happened. But Dr. Randall says he found in his study that teens are quite aware of that issue and know how to protect themselves."
redux [09.04.02]
""Text messaging is extremely powerful," Herbert said. "It is devastating for the children it affects. You don't know who did it, but you know it's someone you know. Someone who has your number and knows personal stuff about you. You start wondering if it was your best friend that did it. You can't get away from it, and two of our children got rid of their phones because of this very problem."
"SMS bullying is like stalking," said ChildLine's Turner. "It is far more insidious than other forms of bullying.""
redux [01.23.02]
"It's like a seminar - of millions. With teens spending more time online than ever, a new study finds them turning to the Web as a cultural forum, shaping their own "electronic commons.""
"The report finds 3 in 4 12-to-17-year-olds using the Web, often as an arena of unfiltered teen discussion - analysis of everything from high-school trends to the ramifications of Sept. 11."
"In many ways, teens are the defining users of this digital media culture. They are the first generation to grow up surrounded by and immersed in digital technologies. With nearly three-quarters of twelve-to-seventeen-year-olds online, teens surpass adults in their use of chat, instant messaging, and other forms of Internet communications."
"Teens are more than just consumers of media content; they are also active participants and creators of this new media culture, developing content themselves, designing personal Web sites, and launching their own online enterprises. As one trade publication observed, young people have not simply adopted digital media, they have internalized it."
redux [06.21.01]
"The Internet is the telephone, television, game console, and radio wrapped up in one for most teenagers and that means it has become a major "player" in many American families. Teens go online to chat with their friends, kill boredom, see the wider world, and follow the latest trends. Many enjoy doing all those things at the same time during their online sessions. Multitasking is their way of life. And the emotional hallmark of that life is the enthusiasm for the new ways the Internet lets them connect with friends, expand their social networks, explore their identities, and learn new things."
redux [05.09.01]
"Conversations are an important part of our daily lives. For most people, in fact, they are the most important way to acquire and spread knowledge during a normal working day."
"Conversations provide a comfortable medium in which knowledge flows in both directions, and where contributors share an inherent context through their subjects and relationships. In addition to old forms of conversations--direct interaction and communication over the phone and in person--conversations are becoming an increasingly important part of the networked world. Witness the popularity of email, chat, and instant messaging, which enable users to increase the range and scope of their conversations to reach those that they may not have before."
"Still, little attention has been paid in recent years to the popular Internet channels that most naturally support conversations."
redux [02.18.01]
"The Internet is widely regarded as primarily a content delivery system. Yet historically, connectivity has mattered much more than content. Even on the Internet, content is not as important as is often claimed, since it is e-mail that is still the true "killer app."
The primacy of connectivity over content explains phenomena that have baffled wireless industry observers, such as the enthusiastic embrace of SMS (Short Message System) and the tepid reception of WAP (Wireless Application Protocol). Combined with statistics showing low cell phone usage, this also suggests that the 3G systems that are about to be introduced will serve primarily to stimulate more voice usage, not to provide Internet access.
For the wired Internet, the secondary role of content will likely mean that the dangers of balkanization are smaller than is often feared. Further, symmetrical links to the house are likely to be in greater demand than is usually realized. The huge sums being invested by carriers in content are misdirected."
redux [02.04.00]
"Imagine the discussions that must have gone on around the invention of the telephone: a new medium for delivering content directly to households. Indeed, that was exactly how some people did use it. In Budapest you could pick up the telephone and listen to music and news until the first world war... It didn't turn out that way because people preferred listening to each other: they preferred "self-generated" content."
"Companies with a strategy that facilitates communication between people, a strategy that facilitates self-generated content, will prosper as the world becomes more interactive and broadcast becomes just one sector of a much richer media world."
“"You're not a designer, you're not a writer, and you're not an editor!"
Well, no, blogger, you're not. And therein lies your gift. Because even if it's true the vast majority of blogs would not be missed by more than a handful of people were the earth to open up and swallow them, and even if the best are still no substitute for the sustained attention of literary or journalistic works, it's also true that sustained attention is not what Web logs are about anyway. At their most interesting they embody something that exceeds attention, and transforms it: They are constructed from and pay implicit tribute to a peculiarly contemporary sort of wonder.
...[T]he Web log reflects our own attempts to assimilate the glut of immaterial data loosed upon us by the "discovery" of the networked world. And there are surely lessons for us in the parallel. For just as the cabinet of wonders took centuries to evolve into the more orderly, logically crystalline museum, so it may be a while before the chaos of the Web submits to any very tidy scheme of organization.”
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