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

Do high energy prices help rural areas?

Jerry Fuhrman, who writes from rural southwest Virginia, has an interesting observation today that I think is applicable to many rural areas of the country.

He notes that one of Virginia's main exports is wood (mostly to China), and one of Virginia's main imports is furniture (mainly from China). Fuhrman's question is how will high energy prices affect the cost of goods, since it takes a lot of energy to haul wood to China, turn it into furniture, and then haul it back to the U.S?

Higher energy prices are going to change things in ways we are not thinking about right now. The current focus on automobile efficiency is, I think, extremely short-sighted. Fuhrman is more on track, looking at indirect effects and trying to ferret out business opportunities. There is a business boom at the end of every downturn. Thinking in a futures context means less handwringing about the present and more consideration of where things might end up.

Virginia used to be a furniture manufacturing powerhouse. And Fuhrman may be right that it could be again.

Congress tries to bring down the Internet

Congress is at it again. Apparently our Federal legislators don't have enough to do, so they have cooked up a new bill that would require every service provider and Web site to maintain access records indefinitely. Sponsored by Colorado Democrat Diana DeGette, the bill is supposedly to fight child pornography. But the bill would give law enforcement officials unlimited rights to snoop everywhere that anyone has ever been online, forever.

This is the most egregious abuse of privacy Congress has yet managed to think up. Lest you think it applies only to the likes of AOL and Verizon, it would apply to anyone that runs a Web site, even the Ladies Garden Club.

In the real world, this would be like requiring local stores (e.g. your local hardware store or quick-stop) to make every customer sign in, record the time and date, and then make the book available to police and Federal officials whenever they wanted it, even fifty years from now.

It is a law enforcement dream come true, but a citizen and business nightmare. One little problem--the amount of data that sites would have to maintain (over years and years, remember) will create a boom in hard drive sales and would become a backup and data retention nightmare. Big sites with lots of traffic (e.g. CNN, ESPN, etc.) throw most of their data away very quickly because it is a storage problem.

Your tax dollars at work. Call or write your Congressional reps and tell them the DeGette bill is an invasion of your privacy and that you don't want businesses turned into police snoops.

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Buy low, sell high

Buy electric power when the cost is low, store it in your home or business, and use it when the price of power is high. Many electric utilities are moving toward differential pricing; during peak use hours (typically daytime and early evening), they charge more for electricity, and charge less in the middle of the night, when they have excess generating capacity.

GridPoint is a startup that makes a filing cabinet size set of batteries with a built in computer which knows your local electric rates. The computer charges the batteries when rates are low, and then automatically puts the power back out when rates are high.

As the price of power goes up, ideas like this would become increasingly attractive. It's an idea that mirrors the Internet--instead of a single huge electric generating facility (think mainframe computer), we'll see more and more decentralized electric systems (think desktop computers). It spreads the cost across a larger number of people, and in the case of Gridpoint, creates no pollution, but makes the electric grid more efficient by creating stored energy points.

Gridpoint is marketing initially to businesses that need reliable power (think Internet access and computers). The Gridpoint box acts as the primary power source during power outages, so it has a dual use, reducing electric costs continuously and by providing an alternative energy source during power interruptions. In the aftermath of Katrina, it was lack of power that crippled many businesses in the region, not flooding.

Gridpoint is a perfect example of a new business opportunity in the emerging Energy Economy. How about your regional economic development plans? Do they include a strategy for leveraging local assets for the Energy Economy? If not, why not?

How does $15/month broadband sound?

While at the Digital Cities conference in Reston, Virginia earlier this week, I was able to get some detailed information about Vasteras, Sweden, where they have implemented the kind of open service provider communitywide broadband I advocate for communities in this country. Vasteras is a medium-sized city of about 80,000 people. In past eighteen months, they have run fiber to 7000 homes, 23,000 apartments, and 2000 businesses.

The system is run as a completely open access network--any qualified service provider may offer services over the network, and they have eighty-six (86) service providers. There are several options for Internet access, starting at a full 3 megabit (symmetric--3 meg up and 3 meg down--not offered by any cable or DSL provider in the U.S.) for $15/month. You can get a full, symmetric 100 megabit service for $45/month (about what most of us pay for 1-2 megabit cable or DSL service).

The open access system uses a single community infrastructure that offers freedom of choice for subscribers (pick from 86 different services), increased competition, and much lower costs because service providers can sell services at lower prices because the cost of the infrastructure is shared across the entire community.

Robert Kjellberg, the Managing Director of the effort, said the system has created many new work at home opportunities, helped improve the delivery of local government services, provided new opportunities for distance learning, and that local schools have been able to make much greater use of the Internet for teaching. He said that every K12 student now has their own online portfolio of school projects.

The take rate for the network has been 50% among homeowners and 50% among businesses, and demand has been very strong. They continue to hook up new customers on a weekly basis.

Service providers have been very enthusiastic, and Telia, one of the incumbent providers, sells Internet access over the network for half the price that they charge for DSL in other communities. Kjellberg emphasized that the city does not sell any services and does not compete with the private sector--all services offered over the network come from private sector providers. The service providers pay a small portion of their revenue to the city, which is used to finance debt, expansion, and operations.

Here are some links to the project. Note that as of this day, a Swedish kronor (SEK) is worth about 13 cents USD, so you can take the Swedish service prices and divide by 7.4 to get the equivalent in US dollars.

Vasteras has won numerous awards for its network and has attracted worldwide attention because it has world class broadband at affordable prices. How about your community? Instead of just one or two highly restrictive and expensive broadband offerings, would it not be better to have homes and businesses choosing from 17 plans starting at $16/month?

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Who owns and controls right of way?

Right of way issues are central to the future of communities. Right now, cable and telephone companies are trying to wrest control of right of way from local government. They want the Federal government and/or the states to control right of way, and they may well win if local officials don't get involved quickly.

The incumbent providers want to build de facto monopoly networks as quickly as possible, and one way to speed that up is to simply bypass any and all negotiations with local communities over right of way permits and franchise fees. The incumbents want "by right" access to any and all right of way without having to ask permission. They will simply pay a fee to the state or Federal government to gain access to local rights of way.

Communities lose big--they not only lose all the franchise fees, but they lose control over their own right of way--a scarce resource that can be used up quickly. Loss of right of way is an economic development issue, and economic developers should be arm in arm with local elected leaders fighting this one. Fights are brewing all over the country.

You might think that the Feds and state officials will help with this struggle, but you may want to think again. They see state and national franchising as a new source of revenue, and are going to claim this will help spread broadband more quickly, while happily taking all the franchise fees. It will only help spread the inferior, slow broadband we already have, rather than the fast, fiber-based systems we need to compete in the global economy.

Save the Internet

A distinguished group of technology leaders has begun a Save the Internet campaign, which is intended to provide information to legislators on the network neutrality issue.

Many of the incumbent broadband providers want to start charging differential fees for access to their broadband networks. The effect will be to squeeze much of the innovation and opportunity out of the Internet, leaving only deep pocket companies that can afford to pay the tolls--and that is all they really are.

It's as if our entire Interstate Highway System, formerly free, suddenly had tollbooths at every exit. It would not be good for the economy. And a two tier Internet won't be good for the economy or for communities.

Communities need a stake in the ownership of the Internet; nothing less than their economic future is at stake. If the toll access to the Internet is too high in your community (think rural), companies won't relocate to rural areas. And that means no jobs.

There is ample precedent for communities to take on partial ownership of telecom infrastructure; done correctly, private telecom providers can make even more money, but on a level playing field that is managed for the common good.

Having trouble understanding the issues around network neutrality? Here is a short video that explains it very clearly.

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Communities do take over private utilities

There was an article in the Roanoke Times this morning about a local businessman who sold his private water utility company to the city of Roanoke--in 1949. So as recently as fifty-five years ago, we had local leaders taking on privately owned utility services.

This provides yet another example of ample precedent for communities to take on new services, like telecommunications infrastructure. But a big difference is that a digital road system will create lots of new opportunities for local and regional businesses. Current telecom service providers will use the new digital roads to sell goods and services to the private sector, reaching more customers with more services at less cost.

It's a win-win-win situation. But we need leaders who have studied the history of community development and who recognize that there are times when local government has an important, even historic role to play to support the common good--just as Roanoke leaders did in 1949.

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Community wireless contract issues

Anthony Townsend, an expert on the social impacts of technology, has written an important article about community WiFi projects. Townsend is concerned that community leaders, in the rush to show some progress in broadband, are inking deals that give away too much.

As an example, community wireless systems usually have some kind of sign on portal Web page. Often, this space is used for ad insertion, which is fine because it helps to support the cost of the system and can provide visibility to local merchants. But Townsend feels that a significant portion of the page should be allocated for community use--links to the community Web site, community calendar, notices of community events, and so on. A poorly executed contract may lose that community presence for many years.

Townsend also has a problem, as many others do, with the intrusive location monitoring now being implemented in some community wireless systems. Google's San Francisco system will be able to track a WiFi user around the city, and will use that data (where you are, where you have been) to target ads. It sounds innocuous, but this is essentially a loss of privacy. It could have serious consequences if the data is sold to third parties and/or if available to the government. Townsend thinks, and I agree, that location tracking should be an opt-in choice--the WiFi provider can do that only if you give express permission.

Finally, Townsend thinks that some bandwidth should be available to the community for experimental use, particularly as we see new and innovative uses for Internet-connected devices (e.g. parking meters, cars, etc.). The community should retain some control over the WiFi spectrum, and not just give it away to the first company that offers a "free" WiFi deal. It's worth remembering the old adage, "There is no such thing as a free lunch." Make sure community leaders, when making technology decisions, remember this.

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National franchises work against communities

A fight is brewing in Congress over COPE, a new telecom bill that seeks to create national franchise agreements for video. As the phone companies try to get into the video services marketplace, they are at a severe disadvantage--the cable companies have had decades to negotiate local cable TV franchises. For every community the phone companies want to approach with video, they have to negotiate a franchise, which can take six months to a year.

If you don't think about it very much, a national franchise seems to make sense; we all want more competition in the telecom marketplace, and so one way to achieve that is to reduce the amount of legal paperwork needed. But there are so many things wrong with this bill, on both sides, that it is hard to list them all. But I'll try:

  • Franchises as we know them are dead. The problem I have with cable franchises is that they have never had much of a direct relationship between the real cost of managing community right of way and what the companies are charged. This is problematic. Companies that use community infrastructure like right of way should pay for that privilege, but the franchise fee needs to be tied to real costs, not just "we'd like some money, so please tax your customers on our behalf."
  • The Internet has severed the connection between infrastructure and service, so why are we even talking about this? A company in California (e.g. Disney) can sell video programming (known as "TV") to me in Virginia without ever having a physical presence in the state. So why should some companies pay and other get away scot free? This is also known as the "satellite TV provider argument."
  • Some opponents of COPE oppose it because it may cause funding problems for community television. And it may, because franchise fees have often been used to fund community television. But if community television is a good thing, it is a good thing whether or not franchise fees are there to support it. Expecting one or a few companies to collect taxes for the community television station but not others is a bad strategy.
  • Trying to preserve old, analog-based community television is just as wrong as trying to preserve old, pre-deregulation franchise fees. Community television is poised for a renaissance (expanded programming, more variety, more viewers) if it makes the jump to broadband, but that means letting go of the old, broadcast/cable TV distribution model.

Part of the confusion about all this is a stubborn refusal by Congress and state legislators to have an honest and informed discussion about the rights of communities to determine their own economic destiny. Telecom companies that want to use community right of way should pay the true cost of that service, so in that sense, I support franchise fees vigorously (but I think we need a new name for them).

But legislators often look for simplistic solutions to complex problems, or inversely cook up complex solutions to simple problems. There is a little of both going on here, and communities are being left out. National franchising will inevitably lead to national franchise fees, with a single check written to the Feds, rather than the community. This is bad, bad, bad. Communities will be forced by the Feds to provide right of way access but will likely see very little of the franchise fee. And we'll have a new Federal bureacracy--the Federal Bureau of Community Right of Way.

Communities have to start today, build their own infrastructure, manage their own right of way, and take control before all is lost. Communities without a right of way and franchise fee strategy will be the biggest losers.

OLED bulbs will save us money

A new kind of LED, the OLED (Organic Light Emitting Diode), provides a brilliant white light that will replace incandescent and flourescent bulbs in many homes and businesses. 20% of all the electricity generated in the United States is used to power light bulbs, and more than 90% of that power is wasted as heat, not light.

The new bulbs are highly efficient, and are the exact opposite of incandescent bulbs. OLEDs convert more than 90% of their energy into usable light, and some scientists think they can be made 100% efficient. Imagine the impact on oil prices if we cut our energy use by 20%.

There are some stunning business opportunities emerging from the Energy Economy. And we'll all save money.

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