Exploring the impact of broadband and technology on our lives, our businesses, and our communities.

85% take rate for multi-service open network

The community of Nuenen, Holland has great news for those interested in multi--service open networks. The community broadband project, which had hoped for a 35% take rate, has seen much, much better results:

"The 'pitch' in Nuenen is not about 'bandwidth' 'fibre' or anything techie. Nuenen has an elderly community, consequently Ons Net aimed to appeal to a 75 year old woman who does not own a computer nor used the internet," he explained.


It is local services supporting security, home care, events on the local TV channel and improving the community that are attracting people.


In order to secure the necessary funds Ons Net was looking for an initial 35% sign-up rate. In fact it got closer to 85% and posted a £1m profit in its first year.

In Nuenen, residents get connected to a 100 megabit capacity fiber network, and buy individual services like Internet access, telephone service, and TV service. This is a fundamentally different business model that creates real competition among service providers and tends to lower service costs. Communities in the U.S. pursuing this approach include Palo Alto, California; Seattle, Washington; Gainesville, Florida; the 15 community MegaPOP project in Mississippi; Danville, Virginia; and The Wired Road project in southwestern Virginia. The last two communities are being assisted by Design Nine.

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NY governor calls for universal broadband

Eliot Spitzer, the governor of New York, has called for universal access to broadband in the state. The text of his speech is here (note that you have to scroll down past the agriculture remarks to get to the broadband stuff).

Unfortunately, Spitzer seems comfortable relegating rural areas to second class status. He calls for a minimum of 100 megabit connectivity in urban areas, but says that just one-fifth of that (20 megabits) is fine for rural areas. Cable and DSL are not going to provide universal access in rural parts of New York, so Spitzer has apparently decided that rural areas will have to make do with wireless while the cities get fiber. Rural citizens and legislators in the state should be outraged that the governor is willing to choke their economic future so easily.

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AT&T opens its network

Unlike the rest of the world, cellphones in the U.S. only work on the network for which they were originally purchased, and we have always had to buy the phones from the cellular provider. In Europe, for example, you can walk into almost any store and buy a cheap cellphone and then activate it for use on the network of your choice.

AT&T has announced that they are now taking the same approach on their GSM network in the U.S. This has apparently been an option for a while, but the company has never publicized it.

The one exception to this is the iPhone, which works only on the AT&T network. iPhone users will not be able to get their phone unlocked so it could be taken to another network.

Oddly enough, AT&T's new openness is probably due in part to the success of the iPhone. AT&T's new popularity as a cellular provider has been lifting out of last place in the U.S. cellular market, and the company probably sees this as an opportunity to bring even more customers--many of whom may not want an iPhone.

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Pay phones slowly fade away

AT&T has announced it is dumping all its payphones. The "new" AT&T says they don't make any money. Payphone use has been declining dramatically as the use of cellphones has risen. Oddly enough, Verizon claims it still makes money from pay phones.

Even stranger: AT&T had more payphones in 1902 than it does today.

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Wireless keyboards a security risk

Those handy wireless keyboards are a security risk. Researchers have discovered that they easily monitor every keystroke sent from a wireless keyboard to the computer. The keyboards use a very weak form of encryption that can be easily monitored using an inexpensive radio receiver from as much as thirty feet away, and the encryption algorithm is easy to crack using virtually any computer--no special supercomputer required.

This means hackers can easily monitor your keyboard and filter for passwords, credit cards, and other personal information.

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Rural America: 40% less costly

Here is an article about how Northrop Grumman is moving jobs to small towns and cities. The company reports that labor savings can be more than 40%--a substantial amount that pays off year after year, and more than covers the initial cost of moving facilities. One of the locations cited is the small Virginia town of Lebanon. Lebanon is a small town located deep in the heart of the Blue Ridge mountains, a good 30 minute drive from the interstate.

Why did Northrop Grumman put 600 jobs there? Lebanon had participated in a regional fiber project that assured Northrup they would have the broadband connectivity the firm needed to get its work done.

Hat tip to Ed Morrison's excellent economic development blog.

Affordable housing draws workers

In yet another indication that quality of life is increasingly affecting economic development, a HUD newsletter had the following snippet:


“California has begun losing college-educated residents, on net, to other states, in large part because of the high cost of housing,” Virginia Postrel notes in Atlantic Monthly. “The South’s population growth since the 1980s has come from the lure of cheap housing created by liberal permitting policies, according to new research by the Harvard economists Edward Glaeser and Kristina Tobin. By lowering the cost of housing, these policies give residents higher real incomes compared with similarly paid workers elsewhere – a strong incentive to move, even if you don’t like bugs or hot summers. The mobile middle class gravitates to the cities where housing is affordable.”

Smaller cities that have affordable housing and affordable broadband would seem to have a valuable edge over communities that can't offer one, the other, or either of them.

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Japan leaves the U.S. in the dust

Japan continues to rocket past the U.S. when it comes to fiber deployment. Japanese businesses and residents can get fiber broadband connections in more than a third of the country, compared to less than 2% of the U.S. Japanese broadband customers also pay much less; a 50 megabit fiber connection in Japan sells for under $30 a month.

The fiber connections are enabling all kinds of new services, including telemedicine and telehealth applications. Japan is already well beyond the tired "triple play" that still gets most of the attention in the U.S. (voice, video, and data). An open, multi-service network can provide communities with access to innovative new services far beyond the old monopoly-style services we have today.

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The Eagles boot the record companies

The somewhat elderly Eagles rock band has given record companies the boot with the band's latest album. The Eagles simply skipped working with a record company at all, and went straight to Wal-mart to sell their new CD. The two CD set is priced at a very reasonable twelve bucks. The artists get a bigger share of the sales, and music lovers spend less and get more.

Even more interesting, the two CD set is priced low enough that some music stores are simply going to Wal-mart, buying a bunch of the CDs, and then marking them up and selling them in their own stores.

This kind of deal probably frightens the music industry more than iTunes. Music publishers managed to retain much control over artists and their music despite the much lower distribution costs (virtually zero) of iTunes. But the Eagles have simply ignored the music publishers entirely.

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Will the Internet run out of capacity?

Here is yet another article proclaiming that the Internet will run out of bandwidth in two years. This article is not all that different than articles I read in 1997, 1999, 2001, 2003, and 2005. I would have to check, but I bet many of them were written around this time of year--the holiday season. Vendors save new product announcements for after the New Year, local projects slow down, and for the next six weeks or so, there is not a lot of technology news. So the writers whip out a calculator, do a little arithmetic, and proclaim that that the Internet "could" run out of bandwidth. And my dog "could" grow wings and fly.

As demand increases, companies that are making money from providing backbone connectivity have more to spend on upgrades because business keeps increasing. The good news is that fiber remains a safe bet; want to increase the capacity of your fiber network by a factor of 10? Just replace the equipment on the ends of your current network. Try that with roads, water systems, or sewer. You can't increase the capacity of roads by replacing the traffic lights, and you can't increase the capacity of a water or sewer system by replacing the pumps. But it is an easy upgrade on a fiber network.

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