Technology Futures

USA Today has an article today on the front page of the Life section about Microsoft's bid to sink its tentacles into every kind of digital entertainment. There is a quote in the article from an analyst at at Morgan Wedbush Securities, and he said:

"Microsoft...recognize[s] their software needs to be the gatekeeper to that kind of commerce."

Huh? This is complete rubbish. Microsoft may WANT to be the gatekeeper, but there is certainly no NEED for Microsoft to be the gatekeeper. Why should Microsoft get some of my money every time I buy some music or a video over the Internet?

And to be fair, Apple is trying to position itself the same way, and whether you are talking about Apple or Microsoft or some other company, it is never good for consumers when you have a single company with monopoly or near monopoly marketshare. I hate Digital Rights Management (DRM), and I still buy most of my music the old fashioned way, on CDs. I'll have to give that up eventually, since CDs are going the way of the dodo, but in the meantime, I'm going to try to avoid DRM schemes.

Apple actually is mostly on the side of consumers. It recently won a battle with record companies, who wanted to introduce variable pricing in the iTunes music store. What this meant was that record companies wanted to charge more for new music ($2 to $3 a song), and less for old music (perhaps fifty or seventy-five cents).

While the music companies touted the benefits of "cheaper" music (the older songs), what it really meant was massive profits for the record companies if they were able to double or triple the cost of new releases. Apple barely breaks even on the iTunes store; the record companies get most of the price of a song, and the artists get no more than they do when a CD is sold.

The entertainment industry is desperately trying to prop up prices for things like music and videos even while their distribution costs have essentially dropped to zero. It's crazy. And the idea that Micrsoft "needs" to get their hands into our wallets is even more goofy. Don't fall for it.

I'm on location this week, planning a major fiber build for a region of eight communities that have decided they can't wait any longer for world class connectivity and services. It's a rural area with lots of two lane roads. One of the things Design Nine is doing is surveying right of way and existing pole infrastructure.

It's a gloomy picture. The phone company has not invested much here, ever, and as new capacity was needed, they just lashed more copper cables to the poles, rather than running fiber closer to customers and using remote switches to provide better services, like DSL. In many locations, we have picture of poles with 4 phone cables lashed to them, meaning there is no pole space left for community fiber. We also have pictures where the phone cable sag is more than three feet, meaning that even if there is space on the pole itself to add another cable, the sag would have to be corrected first. That is very costly.

A bill called COPE (HR 5252) is currently being debated in Congress, and it is a mixed bag for communities, with mostly negative consequences. COPE would allow video providers to obtain national franchises for video services, which would open up competition; basically, it would enable the phone companies to quickly get start offering the equivalent of CATV/satellite TV in many places, and would provide alternatives in both rural and urban areas. That's the good part of the bill.

The bad part of the bill is that communities would lost most control over their own rights of way. The FCC would become the arbiter, and the big companies could come into any community and demand right of way access. Some of the national franchise fees would be returned to the community, but arbitration and disputes would be handled by the FCC, which would be a nightmare for smaller communities that don't have big budgets for extended legal battles in Washington, D.C.

Local elected and appointed officials need to get on the phone and talk to their Federal congressmen and Senators and tell them to protect the rights of communities before giving the store to the phone companies. In the next 3 to 5 years, the telecom battle, as I have been warning communities since the late nineties, is going to be over real estate (right of way), and not whether WiMax is going to be better than fiber. Don't let hardware vendors sell your community a bill of goods (literally) while ignoring the more important and broader telecom planning issues like right of way and economic development strategies.

Dell has been pre-installing spyware on their computers that is apparently quite difficult to remove, and then asking customers to pay $49 to have it removed.

The company installs a program called My Way Search Assistant which tracks where you go on the Web and sends the results back to a central server, where the data is used to send customized pop-up ads to your machine. According to the writer of the article, it is very difficult to uninstall the software, and a call to Dell revealed that the support group at Dell seems to be unaware that the company is doing this. Once you tell them you have spyware, they send your call to the Dell spyware hotline, where they ask for $49 to help you remove it.

You might think that's bad enough, to charge to remove software installed deliberately by the company. But wait! There's more!

Dell gets paid by My Way to put the software on the machine.

That's right...Dell collects cash to put the snooping software on your machine, then wants you to pay them to take it off. Good work if you can get it, I guess, but a sure fire way to alienate your customers.

What this really reveals, aside from the fact that Dell has no ethics at all, is that profit margins on Dell equipment are so thin that they have to resort to doing this sort of thing.

Add Dell to the IT Hall of Shame, along with Google, Yahoo!, and Microsoft.

Skip Skinner, the forward-thinking administrator of Wise County, Virginia, suggested do it yourself fiber to me three years ago. I've proposed it to many other groups since then, and everyone thought I was crazy.

So I was gratified to hear from Matt Wenger of Packetfront about a wildly sucessful do it yourself fiber project at the Digital Cities conference last week. A rural community in Sweden got potential broadband customers to dig a trench across their own property and install conduit (cheap plastic pipe) to the rural road, where the fiber was then blown in using compressed gas.

It worked extremely well. The effort was started and led by a single determined community member who observed, correctly, that most rural folks have or have easy access to tractors, plows, and trenching equipment, and know how to use it.

A major cost of installing fiber in rural communities is getting the fiber from the paved road up to the house, which in this Swedish community was as much as 3/4 of a mile from the road. By sharing costs across a large number of users, the cost of getting the fiber installed was greatly reduced, and the primary focus of the effort was centered on just getting the fiber down the main back roads--a much simpler problem than dealing with the logistics of installing duct to every household.

The local credit union also pitched in by agreeing to add the average $600/household cost of duct and parts to the property owner's mortgage, which increased the take rate for fiber by 25% to 40%. The credit union realized that fiber infrastructure increased the property value by several times the cost of the materials, and worked with their customers to develop a simple, streamlined process for providing the funds. A U.S. study last year showed fiber to the home adds $7,000 to $14,000 of value to a home.

The combination of shared investment, self help installation, and new forms of financing minimized the capital risk on this project and got state of the art fiber into a rural community.

So my question today is this: Are the Swedes smarter than the rural residents of the U.S.? Why not do this in your rural community? We are talking about digging shallow holes in the ground and dropping plastic pipe in the hole, then covering the hole up with dirt. I'm pretty sure we can handle that.