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

Broadcast flag yanked down

In a great victory for the rest of us, a Federal appellate court told the FCC to quit mucking with television receivers and to stop meddling in areas for which the Commission has no authorization. If that sounds harsh, it's mild compared to what the judge actually said:

You're out there in the whole world, regulating. Are washing machines next?" asked Judge Harry Edwards. Quipped Judge David Sentelle: "You can't regulate washing machines. You can't rule the world."

Back in 2003, the FCC had declared that all television tuners and receivers sold in the U.S. after July 1st, 2005, had to respect the "broadcast flag," which is a gimmick dreamed up by Hollywood (the Motion Picture Association) to control content unfairly and to force everyone in the country to eventually buy a new TV, among other problems. The broadcast flag, a digital code that would be included on every television broadcast, would tell VCRs, Tivo-type devices, computers, and anything else capable of recording video that the material could NOT be recorded, or if it could, under very limited circumstances.

The FCC rules flew in the face of decades of court rulings that generally said consumers had the right to make recordings for their own use and certain other uses (in libraries, as one example). The "fair use" doctrine has consistently been supported and extended by the courts, even for related technologies like photocopying.

The court ruling will keep some manufacturers from having to drop whole product lines because the cost to add the complicated broadcast flag circuitry was prohibitive.

Knowledge Democracy:

Has the economy turned a corner?

This article (via InstaPundit) says online advertising has passed the levels seen during the dot-com era. That's interesting, because advertisers want to see a return on their marketing expenditures--if ads don't turn into sales, they don't keep throwing more money into a particular medium.

What's a big driver? It's broadband, which as I noted recently, has pulled even with dial up in terms of households using it. Broadband connections make ads less annoying because they download faster and don't slow down the display of a Web page the way they do on dialup. And broadband enables newer, richer kinds of ads with embedded movies and other multimedia widgets that don't work at all on dialup. And finally, Internet ads provide incredible feedback to advertisers, compared to the "black hole" of traditional media, where it's often quite difficult to determine who saw and ad and if they were interested in it.

All the advertising also means people are buying more....a sign of a strong economy.

Technology News:

SpaceX gets Air Force contract

Space Exploration Technologies, Inc., or SpaceX, has received a $100 million dollar Air Force contract to build and supply launch vehicles for the Defense Department. This could be a breakthrough for the emerging Space Economy, as the Department of Defense had apparently decided it can't keep all its launch eggs in the costly technology of the sixties (traditional booster rockets) and the now thirty year old Space Shuttle.

This could play out like some other hard to fund from the private sector projects that explode once government steps in and puts money on the table. The funding for SpaceX will likely attract venture capital to both SpaceX and to other fledgling space vehicle companies. The competition will keep innovation high and prices low, and will open space to nongovernment activities like tourism, although the FAA is meddling already with Virgin Galactic's plans to use new designs from Bert Rutan's Scaled Composites, which won the X Prize last year. The FAA is determined to make sure that space tourists know that space flight is "dangerous." Unless you have lived under a rock for the past thirty years, I don't think that needs a lot of explaining.

Most of the Wright Brother's early test pilots died in crashes, as did many others anxious for a joy ride in the new flying machines. If the FAA had been around then, the Wright Brothers never would have been able to cut through the red tape that would have been required for the Kitty Hawk flights, and we'd still be taking steamships across the ocean because flying through the air is "dangerous."

Keep an eye on the Space Economy. As it unfolds over the next thirty years, it will dwarf any previous economic boom in history, and make the dot-com bubble look like a an awfully small bubble.

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High gas prices create booming markets

What you will rarely see in the mainstream media when they report on high gas prices is the booming new markets that are already emerging. This Wired article reports on the potential of ethanol as a fossil fuel replacement.

You can buy cars and trucks now that run on E85 fuel, which is 85% ethanol. In Illinois, where a lot of the corn that is used to produce ethanol is grown, the state is already buying E85 vehicles, and is about to start a statewide program to get more gas stations to install an E85 pump.

But the most interesting thing in the Wired article is the research already well under way to convert ethanol to hydrogen. Scientists have a process that is nearly 80% efficient, or almost as good as natural gas processing. An ethanol to hydrogen conversion process neatly solves one of the big conundrums of using hydrogen widely, which is transporting it long distances. If ethanol was used as a feedstock for hydrogen, the long haul transport issue may be solved by moving the conversion closer to users. What would be interesting is having gas stations able to convert ethanol to hydrogen on site, just before a hydrogen vehicle gets a fill up.

Does your region have an economic development strategy for the hydrogen economy? What about ethanol? Do you have business or other strategic assets in your region that could be leveraged into an energy business cluster? The communities that recognize the hidden opportunities in high gas prices could become economic development powerhouses as the Energy Economy heats up.

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New York Times to charge for access

The Wall Street Journal reports that the New York Times is considering a new approach to providing access to its news articles. Currently, you can view any article less than a week old. After that, you have to pay an absurd $2.95 to see the article.

Under the new scheme, you would pay $50/year to get access to any article in the past 365 days. They are apparently also considering an alternate scheme that would give you full access to the whole NYT archive.

With newspaper circulation in free fall, the Times is only one of numerous papers that must be trying to figure out what to do. While "the Internet" is often blamed for the general decline in newspaper circulation, I think the problem is more basic. I travel a lot, and try to read local papers wherever I go. What I see is a general lack of innovation, creativity, and news. I see this as the ClearChannel problem (ClearChannel owns 1000+ radion stations in the U.S.). As large chains have bought out more and more papers, those papers look more and more alike. Bean counters at the corporate level cut local staffs and budgets, force papers to use more syndicated content, and the result is dull newspapers with all the same (word for word) stories you can find on the Internet.

Newspapers don't look that different than they did one hundred years ago--the big innovation of the last twenty years is color pictures. I'm actually bullish on the future of newspapers; we still need someone to edit the news for us. In fact, I would argue that the role of newspapers--editing the news and providing quality control--is more important now with so many alternate sources available to us. Who has time to check dozens of Web sites daily? Papers condense many news sources and help us sort out the important issues. Newspapers and TV news will never again be primary sources of information, but I see the editorial function as still very relevant.

As for the Times and their $50/year subscription, I don't think it makes sense. Most people won't subscribe at that level, and I think they are missing a huge market opportunity. In the Internet age, it is the market, more than ever, that determines the value of something. Too many businesses are trying to set costs based on past Manufacturing Economy metrics of value. The distribution cost of an online NY Times article is nearly zero--so small that is barely measurable.

Here's the math. Which would you rather have? A million subscribers at $50/year, or 20 million subscribers at $10/year? I'd rather have the latter, because I'd have four times as much money in hand. For $10/year, or less than the price of one large pizza, you'll get a lot more subscribers. And a lot more money.

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Knowledge Democracy:

Colorado interested in a "Qwest Monopoly Protection Act"

Dave Hughes, one of the true pioneers of community broadband, has a hard-hitting article about the "Qwest Monopoly Protection Act" that is close to being passed in Colorado. Like a similar and very bad Pennsylvania law, it would bar communities from investing in their own future. The most sobering part of the article is Hughes' point that some communities in Nepal have better broadband services than some rural communities in Colorado. I know Hughes is right about that because I saw Dave make a phone call to Nepal last year in Austin, using a cheap laptop, the conference center WiFi service, and Voice over IP. We got a guy out of bed in Nepal to answer the phone at 4 in them morning, but the point is the service works. The Nepal system was designed and installed by Dave himself, using inexpensive off the shelf equipment.

I guess Colorado lawmakers think their state slogan for economic development should be, "Colorado--almost as good as Nepal."

Community news and projects:

Michigan muni wireless project

Oakland County, Michigan (via Muni Wireless) has issued an RFQ for wireless services to provide broadband throughout the region. It's a public/private partnership, which is the right way to go--government provides leadership and helps ensure universal (or nearly universal service) and the private sector creates jobs and pays taxes. Here's an excerpt from the County's Web site, which shows these county leaders "get it."

"....[the wireless service] will enhance Oakland County's ability to attract and retain high-tech and nanotechnology corporations.

Wireless Oakland will also enhance the residential character of our local communities and further distinguish Oakland County as a great place to live, work, and play. It will support a growing mobile workforce and elevate the technical knowledge of its current and future workforces."

Oakland County has identified a technology cluster (nanotechnology), recognized that they have to invest to make that economic development cluster grow, and goes further to recognize that technology enhances quality of life.

This is the competition, right here in America. Some U.S. communities are getting smart about this, and are going to start pulling businesses from other regions.

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Broadband use up again, TV loses

Yesterday's Wall Street Journal (print edition, p. B8) had an article by Brian Steinberg about broadband and its effect on people's habits. According to Steinberg, broadband connections are now used by 48% of Internet users, the same number of people on dialup. This is a big jump from last fall, when data was suggesting that about 35% of Internet users were on broadband (the other 4% are probably using non-standard connections like satellite, cellphones, etc.).

As broadband use increases, traditional analog television is the big loser. Here's an interesting quote from Jeffery Godsick, the executive VP of 20th Century Fox:

"...TV is not their [the broadband users] primary way of finding out about movies or anything."

In a move that must frighten the pants off TV execs, movie studios are planning to release full screen movie trailers over the Internet. Now, you might ask what the big deal is; movie trailers have been available on the Internet for years. But these have been smaller files that play in small to medium size windows on your monitor. What's new is that these upcoming movie trailers are going to be close to DVD quality--massive files that are ready for viewing on big screen and HD monitors.

It's a test of the network, and of viewers--the movie studios, using the trailers, can study the distribution and performance costs of making these big files available, and they can see how many people make the effort to download them. The next step will be to make movies available for download, streaming, and/or sale.

The movie industry is slowing adapting to the new all digital, all IP converged model of entertainment. Apple has shown that you can make money with legal file downloads, and Apple has also shown that most people, when presented with a reasonable DRM (Digital Rights Management) system and fair prices, will download legally.

Within the next twelve months, we are going to see a breakout IP "TV" show become available only on the Internet. Count on it. And at the introduction of that first IP "Desperate Housewives" or "The Simpsons," the fifty year hegemony of broadcast TV will come to an end.

Technology News:

Are cities at war over broadband?

CNet has an article that provides a good summary of some of the current issues surrounding community-financed broadband. On one side, you have the cable companies and telcos, determined to prevent communities from controlling their own destiny. On the other side, you have communities getting limited or no access to broadband services, with those towns and cities at a serious disadvantage in the global economy as 15 other countries have better broadband than the United States.

If the incumbents had their way fifty to seventy-five years ago, we'd have no paved roads, no clean water, no sewer services, no libraries, no sidewalks, no streetlights, and no plowed streets in winter. All of those services could be provided by the private sector. But we decided that for the common good, it was better to have local government provide those.

This Little Light of Ours

Frank Maguire is the cofounder of FedEx, and this article reports on a recent speech he gave about passion, success, and the determination to make things work. Among his comments was this statement.

"There's a light in each one of you and it's bigger than you ever thought and it's on your side," he said. "Turn on your light. You can do it, regardless of your circumstances."

Maguire's comments apply equally well to communities. We are in a period of rapid and often troubling change, fraught with both peril and opportunity. Our communities face a variety of challenges, and I think that the communities that want to be around in twenty, or thirty, or fifty years need the kind of passion, devotion, and commitment that Maguire says made the difference in his life. Particularly in economic development, it's not enough to be mediocre.

That worked when the competition was the mediocre county next door, but when the competition is from communities, provinces, and countries across the globe, mediocre is not good enough. Communities need to find their passion, hire the best people they can find, and stick to it until they are successful.

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