A Practical Navigator for the Internet Economy

Shock and Awe Rule Making at FCC

Green Broadband to Be Major Tech Issue in 2008 and Beyond

We ask whether Milton Friedman is responsible for the destruction of "public interest"? As the FCC continues to rule for industry and against the public interest. How to purchase this issue. $350 or $1400 group.

January 1, Ewing, NJ -- The February issue takes on the "Chicago School" and focuses on Green broadband and Bill St Arnaud's "bits for carbon" initiative.

Executive Summary

Milton Freidman's Evil Understood pp. 1-6

I contemplate FCC rulemaking and American life and policy in the shadow of Naomi Klien's portrayal of Milton Friedman whom she calls Dr Shock and portrays as the epicenter of all that has gone wrong in the United states in the last fifty years. While I had never read any Friedman nor experienced a critique of the Chicago school and the people whom Klein calls Milton's Chicago Boys, I have just finished her 500 page book: Shock Doctrine: the Rise of Disaster Capitalism.

Klein' s book brings explains how the Chicago School and Freidman's made discussion of national interest and public interest unfashionable. In so doing she gives a foundation by means of which Bush's policies of corporatism and the privatization - not only of telecom - but also most of the functions of government may be understood.

I look in my introduction at the FCC's annual year end shredding of the truth as exposed in Commissioner Copps dissent from the December 19th ruling on media consolidation. I see Kevin Martin's gift of media consolidation to the likes Murdoch and of a handful of other media moguls as making a mockery of the most basic principles of our government. l lament the culture of greed that has removed Keynesian reforms and public or national interest from our discourse while increasing the odds of economic collapse due to the destruction of all reasonable standards of fiduciary trust in our market place.

An Introduction to Green Broadband, pp. 7 - 15

Out of no where in the last six months the idea that ICT technology may be used to enable economic activity that avoids carbon emissions has moved to front stage in discussions of new network design and the application of broadband in urban areas. I interview Bill St Arnaud who in trying to build a carrier neutral optical network in Ottawa found himself examining emerging issues of what has become known as green broadband.

Bill explains how he came to focus on the concept trading bits and bandwidth for carbon offsets. The concept involves getting users of ICT to be willing to change their patterns of use in ways that will reduce the consumption of fossil fuels. This will very often mean the use of optical networks to shift patterns of local bandwidth and hence fossil fuel consumption to remote locations where through processes of virtualization - network and CPU usage will be maximally efficient. When entities change the way they use their ICT and energy based infrastructure they are awarded carbon credits that they may resell and apply directly to the cost of new projects Bill points out than new ICT and broadband projects that gain investment will need to demonstrate their energy efficiency.

Bill takes us on a tour of some of the possibilities that these new assumptions give rise to. He ranges from the Ottawa project were home owners could get new fiber connections in exchange for buying a long term utility contract and being encourage to cut down on utility usage in order too apply the savings to the three year cost of power. He praises the Cisco 3 year CUD program - saying “I think that organizations that don't move as Cisco has done - just as Cisco dominates the Internet today - are going to be caught in the same position. Future IT business opportunities are in solving global warming. Just to give you an example of this Kleiner Perkins - the big VC firm in California - they have just hired Al Gore as one of their partner and they have now committed almost their total portfolio to developing green broadband and information and communication technologies. This is where almost all future business opportunities are.”

Apendix Alternative FFTH Plan 16- 24

I take the Canarie slide deck devoted to the explanation of the carrier neutral home run fiber pilot project Bill has underway in Ottawa and turn it into a narrative. Bill's model calls for the extension of condominium fiber from carrier neutral pops to homes and businesses. The idea is that the fiber becomes another premium that energy resellers give away. Actually they charge higher energy prices in return for high speed symmetrical internet access to those home owner who agree to pay an increased price on their utility rate. If the owner becomes “green” in his energy usage, he could receive the fiber and high speed internet connectivity for no more than he had been paying for his consumption without the dedicated fiber internet connection. The project has fascinating implications yet it is quite complex and demands the creation of the equivalent of a full time internet service provider coordinator to maintain it. I ask some questions of my own and have interspersed those into the narrative along with doubts from a short interview with Bill Mooroney that this plan will be popular with electric resellers. The deck shifts at the end from explaining the pilot project to a discussion of how communities could turn this plan into a Vasteras Sweden like architecture. Here Customer owns the last mile fiber and is free to connect to any service provider of their choice with direct fiber cross connect.

Symposium: Nov 17 - Dec 16

Meaning of Internet pp. 25-26

A discussion with John Waclawsky and others of the extent to which the Internet is an eco-system conducive to the creation of wealth.

Frankston: The Internet is about the absence of an impediment and maybe that's why it's so difficult to describe what it is.

Curran: The Internet provides an open platform at multiple layers that allows both adaptation and innovation without any central coordination or control. In my opinion, that's been the real distinguishing characteristic compared to other telecommunication efforts. The structure of the Internet is orthogonal to business models, unlike the telephony infrastructure which inherently requires a high level of central coordination to become a "service provider". . . . as an economic engine it appears to be without equal.

Divestiture 2.0 pp. 27-29

Editor: What follows is another discussion of some hypothetical ways by which the regulatory mess could be cleaned up. It would be good indeed to go back to 1984 and divest once more the local monopolists from the physical local loop. But sadly, this will be easier said than done.

Googin: Your question seems to be how a profitless wireline company would be liquidated. If only life were so simple. First you go through the margin compression phase. Then you go through the price cutting phase. Then you get into the accounting scandal phase. Then you get new management. Then they try something different. Don't forget these RBOCs are/were essential services. They snoop on us for the Feds. So they have their finger in the pot. Look at your statement. RBOCs collect taxes for everybody. Those people want them around. Liquidating the RBOCs will take an act of congress. They will keep subsidizing these folks for ever. Look at the auto industry. Don't forget ATT just paid some $40B for BLS. They got all sorts of regulatory relief breaks in the process. They will clearly go for some ugly monopoly play before they fail. Their success at this will be a function of who wins office in 2008. Is this messy enough? Love to chat more. They are doomed, however. But look how long it took Japan to fix their zombie problem. This is a huge, political hairball more than an economic one.

Google, Green Broadband, and Cloud Computing pp. 30-35

Jim Thompson: We don't know what Google is building, and they won't tell us. Robin Harris recently published a "best guess": http://blogs.zdnet.com/storage/?p?3 His math says that a full build-out of the two (existing!) buildings at Google's site in The Dalles, OR yields something over 16,000 computers (each with a dual-core CPU). I don't find it unlikely that GOOG will 'upgrade' its server farm to 10GE directly to the back of each and every CPU (system). At 40 systems per rack, a 48 port 10GE switch can connect to 8 other switches. Apparently, there is a good chance that the switch looks like this:

From NY Times 11/28 - Google said it would spend hundreds of millions of dollars, part of that to hire engineers and energy experts to investigate alternative energies like solar, geothermal and wind power. The effort is aimed at reducing Google's own mounting energy costs to run its vast data centers, while also fighting climate change and helping to reduce the world's dependence on fossil fuels.

Dirk van der Woude: quoting from Business Week: One quote:"As the sea of business and scientific data rises, computing power turns into a strategic resource, a form of capital.” "In a sense," says Yahoo Research Chief Prabhakar Raghavan, "there are only five computers on earth." He lists Google, Yahoo, Microsoft, IBM, and Amazon. Few others, he says, can turn electricity into computing power with comparable efficiency." “What is Google's cloud? It's a network made of hundreds of thousands, or by some estimates 1 million, cheap servers, each not much more powerful than the PCs we have in our homes. It stores staggering amounts of data, including numerous copies of the World Wide Web. This makes search faster, helping ferret out answers to billions of queries in a fraction of a second. Unlike many traditional supercomputers, Google's system never ages. When its individual pieces die, usually after about three years, engineers pluck them out and replace them with new, faster boxes. This means the cloud regenerates as it grows, almost like a living thing.”

COOK Report: Does the Google cloud or the Amazon cloud for that matter change the regulatory landscape?

Cecil: Ubiquitous fiber optic connectivity would change things faster and more vastly than all the computers on the planet put together. Problem is that regulations are pulling with incredible force in the opposite direction.

But think about it - what is really "the monopoly"? Isn't it true that the only "monopoly" is the one that first entrants have over dirt? So instead of fighting the monopoly - hard as that term may be to define - perhaps exploring alternatives is possible. Amsterdam, for example, offers interesting possibilities, as does Europe's approach to market power. But micro regulating each and every silo doesn't, to my mind, offer much in the way of anything other than locking markets down. . . .

1. Regulation is BOTH sword and shield

2. Regulation LAGS markets & technology

3. Substantive Regulatory Law and Processes FAVOR incumbents

Some regulation will always be necessary BUT, less is more if what you want are vibrant, competitive markets.

COOK Report: As Susan Crawford said - We must ask: “what is the baseline, the social contract that we need to have in place so that markets can operate fairly? In the telecom arena, we need to see internet access as a public utility, like water, sewage, and electricity, rather than the broadcast-model private sphere it has become.”

Texas Muni-fiber Municipal Network Prohibition Explained pp. 36-38

McCollough: we made sure that the principle was limited to "cities" and municipal entities and did not extend to state government, which was already doing a lot of what was banned to cities through the bill. We did this by basically ensuring that state government did not have to obtain regulatory permission to provide telecom services. It did not have to get a certificate, so a ban on getting a certificate would not matter. In fact, the same bill preserved the right of state universities to provide basic phone service - and even long distance, to a degree - to students in dorms. We had to choose between fighting for cities and protecting our own ability to do exactly what was about to be banned when a city did it.

CUD and Cisco Business Startegy p. 39-51

Villa: The first main benefit is about Cisco's image as good corporate citizen and as a relevant partner for government policy decision makers, especially in emerging markets. This could be eventually turned into business or not, but I do not believe this is a point to discuss here. The benefit is NOT about trying to push more sales to the partner cities but it is to understand much better elements such as what a congestion-tax compliant architecture is, or even more how technology architectures can support innovative urban planning practices, like the ones we see emerging in the "future" cities of Dongtan or Abu Dhabi. So we are indeed reporting back to our business units, in a sort of "foresight function", what we see happening on the market in terms of government programs and trends and we help our BUs understand what new solutions and architectures could be created from that in the future.

Overall, Cisco does not push for its technology within CUD, but helps the cities understand what the implications on city programs are, on the more general broadband and ICT perspectives (not only Cisco, as several of the projects in the cities do not even have a Cisco component at all). Of course if business opportunities will arise linked to those programs, Cisco will be competing for the business through the public tender local processes.

European Commission Concludes Amsterdam Fiber plan is Legal p. 51-52

After an in-depth investigation, launched in December 2006 (see IP/06/1872), the Commission concluded that the municipality participates in the project on the same terms as would a market investor. Therefore the Commission has concluded that no state aid is involved.

Photography Book Reviews pp. 53-57

These other books are really more about how to use Photoshop or Lightroom to establish techniques of mastering photographic workflows and photographic practices. Some also focus on the art of photography - the thought process and practice of the person using the camera.

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Contents

Is Milton Friedman Responsible for the Disappearance of “Public Interest” from our Political Discourse?

Some Reflections on “Shock and Awe” Rule Making at the Federal Communications Commission

Consider Media Consolidation p. 2
Freedom Without Boundaries is Chaos p. 4

Bill St. Arnaud and Green Broadband

Trading Bits and Bandwidth for Carbon Offsets

Policy Approaches to Carbon Emission Reduction p. 7
A Fourth Way: Trade Bits and Bandwidth for Carbon Offsets p. 8
For Carriers: A Change in the Business Dynamic to Transport Wholesaler p. 10
What Is the Business Model for Driving Fiber to the Home? p. 11
Other Examples including Cisco's CUD p. 13
Virtualization p. 14

An Alternate Business Strategy for FTTH

An Appendix to the Interview p.16

The Initial Premise p. 17
A Vasteras - like Business Plan Outline p. 18
An August 27, 2007 Update on the Ottawa Pilot p. 19
Customer Owns or Controls Last Mile p. 20
Some Marketing Suggestions for Trying this Approach Outside the Ottawa Area p. 20
Physical Network Details p. 22
Carrier Neutral Neighborhood Colo p. 23
Who Should be Interested p. 24

Symposium Discussion: November 16 - December 16 2007

The Meaning of “Internet” p. 25

Divestiture 2.0 p. 27

Up Google's Sleeve:

10 Gigabit Ethernet Switch and Green Broadband p. 30
Google and the Wisdom of Clouds p. 31

A Texas “Footnote“ on Municipal Fiber Legal Issues p. 36

An Introduction to the Connected Urban Development Program and Cisco Business Strategy p.39

Working on Both Long Term and Short Term Goals p. 43
Contribution of ICT Industry to Global Warming p. 45

The European Commission Blesses Amsterdam’s Fiber
Plan p.52

Wireless Nepal p. 53

Reviews of a Photographer’s
Feast from Rocky Nook and O’Reilly p.54

Executive Summary p. 58

Symposium & Interview Contributors to this Issue

Affiliation given for purposes of identification - views expressed are those of the contributors alone

 

Erik Cecil, Telecom Regulatory Attorney
Roland Cole, Director of Technology Policy at Sagamore Institute for Policy Research
Frank Coluccio, President, DTI Consulting Inc. South street Seaport, NY NY
Mark Cooper. Director of Research of the Consumer Federation. of America
Robert Cromwell, Strategic Advisor at Seattle City Light's Power Management Division,
Susan Crawford, Asist Prof Cardozo Law Cchool, Board Member ICANN
John Curran, Board Chair ARIN the RIR for North America
Johannes Ernst, CEO of NetMesh, and authority on OpenID
Susan Estrada, Ceo, First Mile.US
Bob Frankston developed Visicalc and Lotus and later home networking at Microsoft
Fred Goldstein, Principal of Ionary Consulting, author of The Great Telecom Meltdown
Roxanne Googin Editor Hi Tech Observer
Conal Henry, CEO, Enet Irish Regional Broadband Infrastructure Provider
Shant Hovnanian, CEO, Board Chair and Director of Speedus Corp.
Scott Marcus is a former FCC Official now working within the Euiropean Regualtory System
Scott McCollough, Texas Regulatory Attorney
Carolyn Purcell, consultant with Cisco Systems Inc.'s state and local government practice
Ed Pimentel, CTO AgileCo, Alpharetta Georgia
Bill St Arnaud, Director Ca*Net4, Canada's high speed research network
Jim Thompson, wireless expert, Vivarto, Wayport etc., currently in Hawaii
Nicola Villa, Global Director of Cisco’s Connected Urban Development program
Dirk van der Woude, Civil Servant Amsterdam and fiber expert
John Waclawsky, Chief Software Architect, Motorola