A Practical Navigator for the Internet Economy

Why the Internet Must Be a Public "Good"

Thoughts on Deriving a Set of "Principles" Designed to Support a Multi-Dimensional Matrix of Connectivity - Three interviews - one presentation

How to purchase this issue. $350 or $1400 group.

May 27, 2007 Ewing, NJ -- The July issue contains interviews with Kevin Nerthercott CEO of LignUp on his use of Amazon's Elastic Computing Cloud. Roxanne Googin on how Vista destroys value, Ed Pimentel on an Hispanic social network, a BT presentation by Jerry Thompson and symposium discussion.

Executive Summary

Learning How to Value Connectivity pp 1- 8

We offer a long philosophical introduction which is designed to point out that with web services powering what Tim O?Reilly called Web 2.0 two years ago, it?s not just the internet, nor just sensor nets nor just supply chains, but that the web through XML and web services has finally become the backplane of a universal global computer.

In such a context access to this global web becomes as important for the maintenance of a modern economy as access to electricity or a telephone. We argue that supporting the build out of the basic infrastructure needed via the telcos or cable cos equity markets for sends the wrong economic signals and ensures that these companies enforce scarcity of bandwidth and other capabilities for their customers in order to extract the maximum in usage fees.

Building and maintaining this global web of IP networks that transport the world?s information demands not a Wall Street IPO but a political and economic approach as a public good. The reason for this is that this is now basic infrastructure as surely as the grids of water, electricity roads and telephones. But in the United States the old telephony utility cannot morph into local and community supported infrastructure, with a captured FCC setting the rules, while the phone company itself is run to benefit its executives and shareholders as it gives poor and non competitive service to its customers. These customers are the very muscle of the economy and because the economic system is gamed in such a way as to channel rents to shareholders, the economy that needs a vital and uninhibited infrastructure is deprived of the nutrient that it needs to grow strong.

The network is moving economic activity to the edges. Consequently, local communities must support it by building open access fiber and wireless and enforcing a horizontal divestiture where multiple companies have access to a shared infrastructure by means of which to provide services. This infrastructure must be accountable to its users in every community. Access to infrastructure is access to the new printing press and access to free speech. Because of this the courts must return the right of free speech to the people in each community. Granting such rights to corporate shareholder the majority of which may soon be in China through Chinese investment in firms like Blackstone is profoundly undemocratic.

Voice Services in Amazon?s EC pp. 9 - 15

The concept of open source applications running on a grid of shared computing over the internet represents another major shift away from proprietary applications. What extremely expensive TDM telephone switches did some years ago is now done in software running on commodity grid computers. Kevin Nethercott, CEO of LignUp, has a middleware platform that allows customers to combine voice with web services and runs the resulting applications very inexpensively using the Linux servers of Amazon?s Elastic Computing Cloud.

Kevin was using LignUp in the Japanese market. IP server connected access like it has for so many people enabled a very low overhead business in voice services where customers could connect to the net, use Lignup software and proceed, on their own net-connected application platform to code voice related services in a mater of days rather than weeks.

One of the economically most important features is that as the volume of usage demanded increases, use of Amazon?s Elastic Cloud enables the service offered to expand and contract with demand. Purchase of spare hardware to satisfy peak periods of use is no longer necessary.

Nethercott explains that in communications we ?are moving from the switches and PBX vendors to IP networks whether LANs or an international WANs like Level 3?s IP back bone. These IP networks are the new ?information bus.? This is what connects all the processes together while there ?is still a need for infrastructure? in other words hardware. Here the hardware that is replacing the dedicated vendor equipment could be Intel based servers running linux or a derivative or it could be the grid based on demand server service that Amazon offers.

What we have effectively done is create a software development tool kit with telecom at the core. There is a SIP engine and a full-featured PBX inside. What we have done is effectively insulated everyone from that and given everyone access to WSDLs (Web Service Directory Label) that they can use.

With that you can take PBX features like transfer, hold, find me follow me, visual voice mail, setting up extensions; setting up hunt groups; CTI features like record, conference, listen in ? in short, all of the things you would expect in a call center.?

?Because the servers are standard Linux machines running Redhat, we can just take our software load it up on the fly and have it work. Opensource is the key to all this since it enables us to run our software without any issues, this allows us to scale our software as deep as we need to in order to support the customer usage patterns.?

BT?s Partner Strategy p. 16 -20

Jerry Thompson Director, Value Added Services and Devices for British Telecom explains: Less than 20% of BT?s revenue comes from traditional voice. That compares with the Vodaphone?s and other traditional telcos whose revenues are 70 to 80 percent voice. BT does not have a mobile license. This leaves it free to leverage WIFI which it is doing in a major way.

?Rather than Voice embedded within the network, which was of course our original business model, we see voice as an application running outside the network. Seeing voice as an application has profound implications for how we invest and how we make our money.?

BT has a large investment in Wi-Fi capable handsets and is looking to ally with outside developers to create attractive applications.

How Microsoft Vista Destroys Value, pp. 21 - 28

We asked Roxanne Googin to comment on Vista Microsoft?s ?iron lung? designed to encapsulate and control its customers.

Robert Gutman finds that: Windows Vista includes an extensive reworking of core OS elements in order to provide content protection for so-called ?premium content?, typically HD data from Blu-Ray and HD-DVD sources. Providing this protection incurs considerable costs in terms of system performance, system stability, technical support overhead, and hardware and software cost.?

Microsoft is an excellent analogue for the local phone company. It will use Vista to imprison those people who buy it and lock down all content in DRM controlled silos. A machine running Vista will have great difficulty functioning as a productivity tool for its owner.

Gutman: ?not only will Microsoft be able to lock out any competitors, but because they will then represent the only available distribution channel they'll be able to dictate terms back to the content providers whose needs they are nominally serving.? ?The sheer obnoxiousness of Vista's content protection may end up being the biggest incentive to piracy yet created.?

Googin: The Gutman Piece was horrifying. I couldn?t put it down. What its says on the one hand its that Microsoft is a true monopolist and has no interest whatsoever in attracting new customers.

?They have 96% of the PC market and they apparently extort the OEMs because it is on every single box. You can see this in Dell?s recent behavior. What happens is that if you don?t put it on every box you pay price ?a?. If you do put it on every box you ship, you pay price ?a? divided by two. The difference in cost is most of the manufacturer?s margin. Therefore they have no choice but to go with every single box.?

Dell asked its users what they wanted and overwhelmingly the replied Linux.

?Their strategy in the past has been to always be able to say they are the standard that is on all the boxes. The corollary that they depend on is that they must also be an unstable platform. People can port to their platform but only their software really works well over time. They copy all the intellectual property of the software that runs on their box and then they make sure that their software is the only thing that is really stabile but changing the underlying OS and never informing their competitors of the changes.

COOK Report: This is documented?

Googin: By me. I don?t know why people don?t complain about it. There are some cool web pages that I could direct you that go over this that include the strategy of stealing intellectual property by means of the use of their platform. This is how they have grown for years. They have never come up with anything creative.?

Roxanne doesn?t think the Microsoft grab is going to work this time. In government offices and enterprises there is reluctance to purchase. Linux is seen as salvation. Redmond?s answer ? sue. On May 14 at CNN Money.com Fortune magazine senior editor Roger Parloff wrote: ?Microsoft claims that free software like Linux, which runs a big chunk of corporate America, violates 235 of its patents. It wants royalties from distributors and users. Users like you, maybe.?

IPTV Latino Offers Niche Market Hispanic Media and Social Network System p. 29-36

The survival of a decentralized internet enables many creative long tail content oriented business models. IPTV Latino will acquire rights to redistribute content via its web site. According to Ed Pimentel: These niche markets are very attractive and very much misunderstood. What we are doing at IPTV Latino now and bringing to this audience is much more than just carrier content. We are not going the route of YouTube or MySpace.

We are going a step beyond by mixing IPTV, Social Networking and Real Time communication.

Symposium Discussion ? April 17 ? May 17

Passive Optical Network Technology and architectures 37- 46

A quite technical discussion on the economic strengths and weaknesses of different fiber to the home or building architectures.

Dirk van Der Woude: There are basically two major types of network architectures: Point to Point and PON (Passive Optical Network). PON is a point to multi-point (tree-and-branch) architecture in which the same operator manages all the active equipment. Point-to-Point networks, on the other hand, allow several operators to install their own equipment on dark fibre and at a subscriber's house.

Hendrik Rood: However the above synopsis of Single Mode fiber evolution should give a stern warning to everyone not to overestimate the life cycle of fiber plant currently put into the ground.

A Rangaswami Mind Map and the Geospatial Forum p.47

An excellent sketch of what the world is like from Reboot/ St Arnaud: [The Open GeoSpatial Forum - www.opengeospatial.org - has a great video and web site demonstrating the use of cyber-infrastructure - platform technologies such as web services, workflows, grids and networks for emergency response applications.

Commercial Versions of UCLP Available p. 49

Bill St. Arnaud: A couple of companies are now marketing commercial versions of UCLP. It is expected that other companies will be making announcements of commercial versions as well. UCLP-User Controlled Lightpaths is a provisioning and configuration tool that allows end users such as enterprises or individual high performance user to setup and configure their own IP networks for such applications as remote peering and deploying private IP networks with virtual routers, switches, etc

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Why the Internet Must Be a Public "Good"

Thoughts on Deriving a Set of "Principles" Designed to Support a Multi-Dimensional Matrix of Connectivity

Prologue p. 1

Part One: What Has Changed from Then to Now? p. 2

What Would it Take for the Bad Guys to Win? p. 3

How to Do It Ourselves? p. 4

Part Two ? a More Detailed Examination

Rethinking the Meaning of Connectivity p. 4

Web 2.0 Is the Backplane p. 5

Then Versus Now p. 6

The Law Needs to Catch Up p. 6

The States Take the Initiative ? Vermont E-State Legislation Passes p. 7

Part Three: Time to Act p. 7

Why We Must Come Together p. 8

Running Voice Services Inside Amazon?s Elastic Computing Cloud

Kevin Nethercott Explains LignUp?s Business Model

Editor?s Introduction p. 9

Applications Run in the Computing Cloud p. 9

Our Call Center Client p. 10

Communications Supply Chain Changing p. 11

An Erector Set from Which to Build Business Solutions p. 12

The Amazon Elastic Computing Cloud and Level 3 p. 12

Reliability p. 14


British Telecom?s Partner Strategy

Absence of a Mobile Operator Frees BT to Offer Wi-Fi and all Forms of VoIP - BT Business Model Very Similar to that Advocated by John Waclawsky

A Wake up call to Telcos p. 16

No Mobile License Therefore We Love VoIP p. 16

What We Are About Now is Building Services Around Voice p. 17

For Developers the Way for New Applications is Wide Open p. 17

A Postscript from Lee Dryburgh p, 18


The Future p. 19


How Microsoft?s Vista Destroys Value

Roxanne Googin Analyzes the Behavior of the Company that Squeezes the Profits from a Commodity PC Industry - Finds that Microsoft Wants to Control Delivery of Content

A Cost Analysis of Windows Vista Content Protection p. 21

Final Thoughts p. 22

Microsoft as Monopolist p. 24

Rather Than Change Microsoft Sues p. 27

IPTV Latino Acts as Niche Market Content Delivery System and Social Network via an Innovative System of Web Services

The User Interface p. 30

The Local Infrastructure p. 34

Business Model p. 35

Symposium March 17 to April 17

A Discussion of the Technical and Economic Merits of PON FTTH Architectures

PON, the Architecture of Control p. 37

The Important Role of Local Governments p. 38

Capacity of a PON Determined by Optical Equipment Used p. 39

Point to Point or Home Run Architecture p. 42

Point-to-point Yields Superior Option Value Difference p. 43

Fiber-to-the-Building p. 44

An Architecture of Control p. 44

A JP Rangaswami Mind Map of the World and the Open Geo-Spatial Forum p. 47

The Open Geospatial Forum p. 48

Commercial Versions of UCLP Available p. 50

Scarcity Creates Value p. 50

A Case Study of UCLP at Terena: Articulated Private Networks p. 52

Executive Summary. p. 54