Technology Futures

Apple Computer CEO Steve Jobs announced today that the company has purchased CBS Television, using Apple's enormous hoard of cash. The company has been debt-free for many years, and analysts have engaged in endless speculation about what the company might do with its billions of dollars. In the press conference, Jobs indicated that because of CBS' recent problems with Dan Rather and "fake but accurate" news, Apple was able to pick up the company "for a song," which was apparently a pun on Apple's hugely popular iTunes venture.

Jobs announced sweeping changes for the venerable broadcasting firm. The biggest change is that he will have CBS abandon traditional television. Jobs said, "The old television model is dead. CBS will be the first all-Internet broadcasting company, and beginning April 1st, 2006, the company will end it's current 50 year old broadcast method and begin offering all its content via the Internet."

Analysts were skeptical that even Apple could pull off such a big change, but Jobs indicated the huge success of the tiny new Apple computer, the Mac mini, has already begun to pave the way. The Mac mini, which debuted in the fall of 2005, comes standard with an S-video out port, meaning that the tiny computer can output high quality video directly to a television set. Said Jobs, "With all the broadband users in the U.S., we've got a ready market for video via the Internet, and we'll be providing a Tivo-like piece of software called iVideo later this summer. iVideo will revolutionize the way people watch TV, just the way iTunes and the iPod has changed music."

Apple has also had a longstanding relationship with Akamai, which has banks of servers located all over the United States and already streams video for companies like Apple, usually for annual meetings and other corporate functions. Jobs indicated that Akamai would indeed play a major role as part of the all-Internet CBS. Jobs also indicated that Pixar, the movie production firm he also heads, will design the production facilities for the effort. "Nobody knows more about digital film and television production than Pixar," he said.

Jobs had little good to say about broadcast television. "Nobody watches the evening news anymore, and I can tell you that no one under 30 cares one whit about CBS' crummy line-up of half-baked reality shows, warmed over situation comedy, and that dumb show with the tick-tick-tick thing that Rather used to headline." Jobs' pointed reference to Sixty Minutes caused tsunami-like discussion in the halls of CBS, as Sixty Minutes staffers huddled around TVs watching the press event.

But Jobs did not stop there. He further promised the first thing he he would do was to sell the well-known CBS headquarters in New York and moving the entire staff to South Dakota, where he indicated he had purchased the old Gateway Computer corporate headquarters building, along with the entire company. "Gateway's manufacturing facilities will give us tstaff spenthe capacity to build the millions of Mac mini computers we will need to satisfy the marketplace, and it's about time that the CBS staff gets out of Manhattan and spends some time in a red state so they can cover news 'for the rest of us.'"

Although Gateway's current headquarters are in California, the company has always been associated with it's cowlike origins in South Dakota, and the cow spots on its boxes have become a company trademark. There was some surprise that Apple had purchased a PC company, but Jobs again indicated a master plan bigger than anyone realized. "We're saving the country from more of those awful Gateway ads with the guy in the truck singing along with his cow in the passenger seat. And we just want to pare down the competition--we're taking a page from the Microsoft playbook, which is to buy any company that gets in the way. So guess who's next?"

Despite impassioned pleas from the crowd of reporters in the room, Jobs simply clammed up and refused to say more. But characteristically, at this point Jobs smiled and said, "Oh, wait, there's one more thing." Jobs pointed behind him, and Jennifer Anniston stepped out from behind a curtain. Jobs introduced her as the new news anchor for the network. "We're going after a younger crowd, and I'm sure Bob Schieffer [Rather's replacement] has brought CBS, oh, eight or ten new viewers. With Jennifer, we're going to create a daily news program designed for the Internet generation."

Jobs refused to say any more, and after allowing Anniston to sign autographs, they both left the stage of the Apple auditorium in Cupertino.

This bill was held over in committee for more work this year. Text as of March, 2005 is below.

HB 653-FN-LOCAL – AS INTRODUCED

2005 SESSION

05-0714

06/10

HOUSE BILL 653-FN-LOCAL

AN ACT relative to bonds for construction, development, improvement, and acquisition of broadband facilities.

SPONSORS: Rep. Maxfield, Merr 6; Rep. Osborne, Merr 12; Sen. Gallus, Dist 1

COMMITTEE: Municipal and County Government

ANALYSIS

This bill grants municipalities the ability to issue bonds for the development of broadband services.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

05-0714

06/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Five

AN ACT relative to bonds for construction, development, improvement, and acquisition of broadband facilities.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Section; Broadband Infrastructure Bonds. Amend RSA 33 by inserting after section 3-f the following new section:

33:3-g Broadband Infrastructure Bonds Authorized.

I. In this section:

(a) “Broadband” means the transmission, between or among points specified by the user, of information of the user’s choosing, with or without change in the form or content of the information as sent and received, at rates of transmission as defined by the Federal Communications Commission as “Broadband”.

(b) “Broadband carrier” means any provider of broadband services, except that such term shall not include aggregators of broadband services, as defined in section 226 of the 1996 Telecommunications Act.

(c) “Broadband infrastructure” means any and all equipment and facilities, including any and all changes and modifications and expansions to existing facilities as well as the customer premises equipment, used to provide broadband, and includes any and all software integral to or related to the operations, support, facilitation, or interconnection of such equipment, including upgrades, and includes any and all installation, operations and support, maintenance and other functions as may be required to support the delivery of broadband.

(d) “Broadband service” means the offering of broadband for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.

(e) “Municipal broadband facility” means any municipality that through a separate entity owns, operates, manages, or controls any plant or equipment, or that wholly owns, operates, manages, or controls any entity that owns, operates, manages, or controls any plant or equipment, used to furnish broadband services within the state directly or indirectly to the public.

(f) “Municipality” means any city, town, county, or state entity or creation of such entities or affiliates of such entities.

(g) “Open network” means any broadband infrastructure which is open to any and all third party users in a non-discriminatory manner and on a fair and equitable basis using publicly available rates for services.

(h) “Open network interfaces” means that the technical and operational means, manners, and methods for any third party access to the broadband infrastructure shall be provided on the basis of generally acceptable industry standards as may be available at the time of access.

(i) “Separate entity” means a separate company, corporation, or other similar corporate entity established to conduct business.

II. A municipality may issue bonds for the purpose of financing the development, construction, reconstruction, renovation, improvement, and acquisition of broadband infrastructure for the purpose of public educational and governmental access channels.

III. A municipality may issue bonds for the purpose of financing the development, construction, reconstruction, renovation, improvement, and acquisition of broadband infrastructure for the purpose of providing third party access only though a separate entity. The separate entity shall be subject to same laws, rules, and regulations governing similar competitive communication carriers. The separate entity shall have separate and distinct facilities, support, operations, and any and all other elements necessary for the provision of its services and shall not use in any manner, a computer network used for municipal purposes.

IV. Repayment of the bonds issued under paragraph II shall be in accordance with applicable law for municipal bonds.

V. Repayment of the bonds issued under paragraph III shall be paid solely from revenue received from the separate entity for services provided by that entity.

VI. No municipality may enact an ordinance or adopt a resolution authorizing the municipality to construct, own, or operate any facility for providing cable service, telecommunications service, or Internet access service, directly or indirectly, to the public, unless all of the following are satisfied:

(a) The municipality holds a public hearing on the proposed ordinance or resolution.

(b) Notice of the public hearing is published in a newspaper of general circulation in the area affected by the proposed ordinance or resolution.

(c) No fewer than 30 days prior to public hearing, the municipality shall prepare and make available for public inspection a report estimating the total cost of, and revenue received from, constructing, owning, or operating the facility and including a cost–benefit analysis of the facility for a period of no fewer than 3 years. The costs that are subject to this paragraph include personnel costs and costs of acquiring, installing, maintaining, repairing, or operating any plant or equipment, and include an appropriate allocated portion of costs of personnel, plant, or equipment that are used to provide jointly both telecommunications services and other services. The costs of the separate entity shall be those normally incurred by any third party commercial communications provider in the normal course of their business, including but not limited to franchise fees, pole attachment fees, make ready fees, and similar fees. The separate entity shall not be subsidized in any manner by the municipality.

VII. Debt incurred under this section shall not be included in the debt limit prescribed in this chapter. No such debt shall be included in the net indebtedness of any municipality for the purposes of determining its borrowing capacity. Such debt shall be the sole liability of the separate entity.

VIII. Negotiations between a separate entity and a municipality shall be performed at arms length. Negotiations not performed at arms length shall be void.

IX. Pricing, selling, bundling, promoting, selling, representing in a public or private manner by the separate entity shall be performed at arms length. In addition any pricing mechanisms of the separate entity shall be based on the total costs of the entity independent of the sponsoring municipality.

X. Services provided by the separate entity shall comply with open network requirements.

XI. Notwithstanding RSA 33:2, bonds issued under the authority of this section shall be payable in annual payments so that the amount of annual payment of principal and interest in any year on account of any bond shall be not less than the amount of principal and interest payable in any subsequent year by more than 5 percent of the principal of the entire bond. The total amount of payments shall be sufficient to extinguish the entire bond at such bond’s maturity. The first payment of principal on any bond shall be made no later than 5 years and the last payment not later than 30 years after the date issued. Each authorized issue of bonds shall be separate and distinct.

2 Definition. Amend RSA 33-B:1, VI to read as follows:

VI. “Revenue-producing facilities” means water works, broadband infrastructure as defined in RSA 33:3-g, sewerage systems, sewage treatment or disposal facilities, solid waste disposal or resource recovery facilities, parking facilities, facilities for the production, generation, transmission, or distribution of electricity or gas and any other real or personal property or interests in a municipality or regional water district owned or controlled by the municipality or regional water district, from the operation of which revenues are or are expected to be derived by the municipality, or regional water district.

3 Effective Date. This act shall take effect 60 days after its passage.

LBAO

05-0714

Revised 2/4/05

HB 653 FISCAL NOTE

AN ACT relative to bonds for construction, development, improvement, and acquisition of broadband facilities.

FISCAL IMPACT:

The New Hampshire Municipal Association and Department of Revenue Administration state this bill may increase local expenditures by an indeterminable amount in FY 2005 and each year thereafter. There will be no fiscal impact on state, county, and local revenue or state and county expenditures.

METHODOLOGY:

The New Hampshire Municipal Association states this bill would allow municipalities to issue bonds for the development of broadband services. Repayment of bonds would depend on how the infrastructure is to be used. If the infrastructure is to be used for public education and government access channels, repayment is the responsibility of the municipality in accordance with “applicable law” for municipal bonds. However, if the infrastructure is to be used for the purpose of providing third party access to broadband, the repayment would be made from revenues received by the separate entity required to provide such access and the municipality would have no responsibility to repay the bonds. Debt incurred for that broadband purpose would be considered outside the municipality’s debt limit since the way it is structured, it is not a debt of the municipality and repayment is solely the responsibility of the separate entity’s revenue stream. The Association is unable to determine the exact fiscal impact at this time since it is dependent on what municipalities opt to use this bonding authority and how many would be responsible for repaying the debt.

The Department of Revenue Administration states they are unable to determine the fiscal impact of this bill on local expenditures at this time. There would be no fiscal impact on state and county revenue and expenditures.

A North Carolina paper has jumped feet first into blogging the news, with 11 news feeds written by reporters and staffers on the paper. The Greenboro News and Record thinks that the paper has no choice but to do this. I agree, as I wrote recently about this issue.

I've always thought the Web has great potential for newspapers, but they have to begin to see their role for what it really is--editing and writing, not printing black marks on paper. The Web is pure writing, and it frees newspapers to do that really well. Combined with the growing viability of advertising on the Web, newspapers can have a future.

But the most interesting thing in the article was that a newspaper is blogging. From the article:

Night cops reporter Eric Townsend, a 26-year-old who also contributes to a blog about traffic, said he's happy to post to the blog, but he thinks declining newspaper readership among the young is more a symptom of a decline in civic engagement than anything else. "Young people don't have a sense of involvement, a sense of community," he said. "It doesn't matter how many 'young' stories we do. I don't think blogs are the answer either."

What I see in under 30 people is an unhealthy attachment to their devices--their cellphones, their music players, their Gameboys--that keeps them tuned out and turned off from the world around them. Next time you walk down a town street, look at how many young people have on earphones--earphones that are blocking out the real world in favor of a world that they can manipulate.

Is this phenomenon important? It's too early to tell. But I do notice, as do many of my colleagues, the absence of young people at town meetings convened to talk about the future of the community. The ones that do show up are bright and engaged, and have typically have a lot to contribute. I just wish there were more of them.

West Virginia, just a few miles away from Blacksburg, has jumped to first in the nation with respect to intelligent, pro-community thinking about broadband.

The state legislature, unlike more than a dozen other states trying to cripple the ability of communities to promote economic development and to support existing businesses, is saying, "We don't want to do that."

Not only that, the state seems ready to give communities the tools they need to chart their own future. This article [link no longer available] has the details.

Here is evidence of West Virginia's sophisticated thinking:

David Levine, director of technology and transformation with the West Virginia Development Office, said creating a cohesive fiber optic network could create a competitive advantage and could help keep technologically inclined West Virginians from leaving the state to find work. "People will be able to work where they live," he said."

The bill would explicitly give communities the right to issue bonds to pay for telecommunications infrastructure--just as communities have done safely and securely for decades for other improvements like water, sewer, and schools. It would also explicitly give communities the right to act as a service provider.

A Verizon representative expressed skepticism over the bill. What a surprise--a phone company opposes competition. It's almost funny to see Verizon on the short end of the stick. I don't think they have expressed dismay in other states when last minute bills popped up that opposed community telecom projects. This second article notes that Ireland went from 18% unemployment to 3% unemployment because of an intense focus on telecom investments to support communities and open access networks. Ireland, which is about the size of West Virginia, has constructed a fiber ring connecting 123 towns and cities. Any service provider can use the network to deliver services.

Here's another quote that shows West Virginia legislators "get it."

Committee Chairman John Unger, D-Berkeley, said he and others did consult with Verizon, Adelphia and other companies, but he made no apologies for not releasing the bill to them before it came out of his committee.

"The special interest groups think they ought to see the legislation before the legislators see it," he said. "That's where everybody's got it backwards around here. They've got it backwards, because they think that the special interest group ought to draft the legislation and then show it to the Legislature, and that's not the way it should be."

The bigger question is why are so many legislators in other states falling for the contorted and misleading information being provided by the telcos and cable companies? And if Ireland has been successful in promoting economic development by building open access networks, why are our legislators seemingly dead set against it (except in West Virginia)?

So here's a slogan for you: "Our state--almost as good as Ireland and West Virginia."