Archive for the ‘Cool Stuff’ Category

Cool Cube

Saturday, October 24th, 2009
C is for CUBE

C is for CUBE. The School has its own hand sign.

On my trip to Japan earlier this month, I was invited by my good friend Prof. Harumasa Sato to speak to his undergraduate students at the Konan University in Kobe.  Prof. Sato did not ask me to talk about spectrum, Net Neutrality, interconnection, or some other issue in communications.  Rather, he asked me to speak to his students about my life and international career experience.  Since this is the inaugural year for the school, so I was delighted to address the students.

Prof. Sato is the Dean of the new business school and spent the past three years setting it up. And, what can I say for his efforts?  It’s totally fucking cool.  The school is referred to as “CUBE”, aptly named for the building cube-like shape.  Prof. Sato roams the halls speaking to his students. (When I was in business school, and the students saw the Dean coming, they went the other way).  Inside, the building is a fantastic mix of high-tech classrooms, work spaces, meeting spaces, and offices. The main lounge is an English-only “O-Zone” so that the students can practice their business English.  The TV in the lounge is not a TV, it’s a Mac streaming YouTube.  Everything is wireless, including room lighting controls, projection monitors, and the contactless RFID security passes, which are in cell phones. Students use their cell phones not only as security cards to gain entrance to certain areas of the building, but to buy drinks from the vending machines.

Insight:  Kids today, I tell you.  They don’t know how cool they’ve got it.  My time at CUBE got me thinking about my own undergraduate experience.  As a college student, I spent Spring and Summer semesters junior year studying in Japan.  I cannot imagine how different my education would have been had we had these technologies and the wide-spread adoption of the Internet.

Volts for Clunkers

Friday, August 7th, 2009
Source: Coneee, flickr.com, used under creative commons.

Source: Coneee, flickr.com, used under creative commons.

In the past week, there has been a lot of talk about the US federal government’s “Cash for Clunkers” program.  By most accounts, the program has been quite popular.  Indeed, the program’s original $1 billion in funding was exhausted in about two weeks, prompting Congress to vote another $2 billion for the program this past week.

Under the program, consumers can trade-in an old car which gets less than 18 MPG towards the purchase of a new car.  The consumer gets a credit equal to the scrap value of the car, plus $3,500 to $4,500.  The car dealership then takes the traded-in car, pours solvent into the engine to ruin the lubricating oil, and runs it until the engine seizes.  The car is then junked for scrap.  More than 230,000 cars have been traded in under the program so far.

Insight:  In junking the clunker cars, we are about to throw a whole bunch of babies out the bath water.  It consumes a tremendous about of  natural resources to produce an automobile.  So, while it is good to get a quarter million 18-MPG or less motors off of the road, it does not make sense to crush all of those cars to leave them to rust in a junk yard.  In fact, it is a bit of an environmental nightmare.

I suggest that the Cash for Clunkers Program consider a plan which permits rolling-up the clunkers, removing their seized engines, and converting the cars to electric vehciles.

Internal combustion engines have had their day, but sooner or later they will have to give way to a more efficient system.  Because of the ability to quickly replenish the vehicle’s energy supply with cheap oil, internal combustion engines are convenient, but they are truly wasteful. Internal combustion engines are perpetually trying to tear themselves apart from the inside and turn most of their chemical and kinetic energy to heat.

So, in light of not having to produce more steal and generate more waste in the production, the electrification of existing vehicles makes some sense. To electrify the cars, requires removing the internal combustion engine and the fuel system and replacing them with an electric motor and battery system.  Pretty much everything else in the cars stays.  The conversion to electric is not all that hard to do.  In fact, DIYers are already doing conversions in their garages – takes about 40 to 100 hours and good set of tools.  Nearly all electric cars are already conversions.  Even the macdaddy of electric vehicles – the Telsa Roadster – is just a pumped up Lotus Elise with better aerodynamics and giant cordless phone battery.  And, despite the fact that the clunkers used cars, they are still attractive for conversion.  Since an electric motor has a single moving part, a well-done electric conversion can be expected to last for over 1 million miles.  Further, used cars have already gone through a break-in period so there is a lot less friction in the bearings and drivetrains.

As a threshold problem, one would need to determine statistically which makes and models are being traded in as clunkers.  Further, one would have to determine, from an engineering stand point, which of the most makes and models could be converted to electric cars.  Finally, a business case would have to be completed in order to determine whether conversions of these vehicles could be done at minimum viable scale.

We can do this.  After all, we already own GM and it is idling factories and laying-off workers.

The electrified clunkers could then be sold a low cost to be used as daily commuter cars.  This would have a multiplier effect for both the economic and environmental dimensions of the program.

NB:  I do not argue that electric cars are an environmental panacea.  First, the electricity used to charge the cars has to be generated in a carbon-neutral way. Second, more than 90% the alloys need to make high efficiency electric motors comes from China.  This would have the effect of changing geopolitical power from oil-exporting countries to a single nation.  However, the present situation is unsustainable.

T-Mobile’s G1 Android and Apple iPhone: market power or just marketing?

Friday, February 13th, 2009

T-Mobile recently introduced its G1 mobile phone in Germany, the first to use the open Android platform. The G1 joins the more proprietary iPhone which T-Mobile has sold in Germany under an exclusive agreement with Apple. The G1 is manufactured for T-Mobile by HTC in Taiwan and the Android platform is an open standards effort of the Open Handset Alliance – a consortium comprised of Google and several mobile phone manufacturers and networks. By contrast, the iPhone is a more closed platform where modifications may result in it being rendered inoperable. Given that T-Mobile is embracing open and proprietary strategies for the operating systems, begs questions on the efficacy a hybrid business strategy and whether this is unfair competition.

Both the Apple and Android approaches have had to grapple with the optimal level of openness. No pure strategy is viable: too restrictive, and the phone is of minimal value; too open, and it becomes unprofitable. Originally, the iPhone’s operating system was derided as being overly restrictive. Apple tried to harness the energy of individuals trying to improve the iPhone by launching the App Store in July 2008. It now boasts 15,000 third party applications for sale. At the same time, the Android platform is an open standard, not full open source. The source code carries an Apache license, so some extensions to the code may be proprietary. Further, Android’s Software Development Kit might allow Google to control an Android Market in a way which resembles the App Store.

Insight: It is not necessarily unfair competition for T-Mobile to be the exclusive source for both the G1 and the iPhone in Germany. Despite the 200 patents filed for the iPhone, it is not inherently irreproducible – save its cachet as a technocrati status symbol. Both Samsung’s Instinct and the RIM’s Blackberry Storm have already been launched to compete with the iPhone. Similarly, any other network could market a phone employing the Android platform. Whether these devices are better or worse is a matter of consumer preference. The fact that T-Mobile is now marketing phones based on both open and proprietary software suggests that neither approach is the Holy Grail of business models. T-Mobile initially launched the G1 in the US in order to compete with AT&T which is the exclusive sources for the iPhone there. The decision to sell the G1 in Germany probably embraces economies of scope and scale, more then the question of openness.

A German language version of this note, authored with Christian Wernick, will be published in Wirtschaftsdienst, available at: www.wirtschaftsdienst.eu.

Obama’s Inaugural Address and the Optimal Government

Saturday, January 24th, 2009

This past week, I watched, with great excitement the Inauguration of Barack Obama as the 44th President.  In the following days, a read and listened to many blogs and news accounts of his Inaugural Address, some touting it as an exemplary piece of oration and others calling it flat, especially in light of Mr. Obama’s skill.

There was, however, one passage which to my mind received too little attention:

The question we ask today is not whether our government is too big or too small, but whether it works, whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.

Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.

And those of us who manage the public’s dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched. (Source: NYT)

Insight: If Mr. Obama truly adopts this approach to government, then it represents a major step forward for the United States and the welfare of its people.  This efficiency frontier for government is something I have written about before in Cool Stuff (The Transition and Irish Broadband Forum).  Defining the contours of this efficiency frontier is the next generation of policy research and debate.  I commend Mr. Obama for taking a truly bipartisan approach to government (“I won” comments aside).

I wonder if this explains the hit I got on my blog from a Starbucks in Washington, DC.

One Year of Cool Stuff

Tuesday, January 13th, 2009

Today marks the first anniversary of Cool Stuff (in this incarnation).  In the past year, I have made 30 posts in 10 categories and 54 tags. There are a total of 41 comments.  Cool Stuff has garnered more than 1,600 hits, with the post on John McCain and Wi-Fi being far and away the most popular post.

Insight:  I have greatly enjoyed writing Cool Stuff and will try to devote a bit more time to it.  I get jazzed when I find that people are reading my blog and that it is helping to generate thinking about the next generation of issues in communications strategy, business, and policy.  I also think it is really cool when I get a Google search hit – especially when someone hits my blog when they were might not have exactly been looking for it.  To this end, I have created the Top Ten Google Hits on Cool Stuff (all of these are real search terms reported by the WordPress blog stats plug-in).  The Top Ten Google Hits on Cool Stuff are:

10.       “pusher prop airplane”

9.         ken carter aircraft

8.         hackintosh illegal

7.         ken carter’s wife

6.         unlicensed to kill: a brief history of t

5.         irish directions advice i wouldn’t start

4.         always be sincere, whether you mean it o

3.         cool shit for browning hi power

2.         fcc working paper science fiction

And the number one Google Hit on Cool Stuff is:

recommend stuff white people like.

One Word Oxymorons

Sunday, January 11th, 2009

We’re all familiar with the term oxymoron.  Oxymorons are a subset of the expressions called contradictions in terms. The definition of an oxymoron is a figure of speech that combines two normally contradictory terms. Oxymoron is a loanword from Greek oxy (‘sharp’) and moros (‘dull’); itself an oxymoron. In popular usage, the term oxymoron is sometimes used more loosely, in the sense of a simple contradiction in terms.

One of the most famous examples of colloquial oxymorons is jumbo shrimp.  The term Jumbo, coming from the name of P.T. Barnum’s enormous African Elephant, now synonymous with ‘large’ and shrimp has taken on the meaning of ‘small’.

Insight:  The other day I got to thinking whether is there a word so confused, so self-contradictory that it is its own oxymoron.  Well, I came up with two: naturalize and favorites.  Naturalize means literally, “to put into the state of nature;” however, to be in the state of nature means to be unaffected by human intervention.  The word favorite is itself a superlative, meaning something that one likes the best.  The word favorites is then a plural superlative, itself an oxymoron.

Marketing FFTH

Wednesday, November 26th, 2008

In my last Cool Stuff post, I wrote about FFTH (or fiber from the house).  In the past week, I have had the chance to refine my idea, and I even had a chance to read the very good paper by Slater and Wu, Homes with Tails.  The more I think about the subject, the more I come to the conclusion that main issue is syndication of the risk of stranded investment.  The strategies which deal directly with spreading this risk have the greatest chance of succeeding.

Just to review FFTH, is where the homeowner buys his own Internet connection.  Under the simple scenario, Joe the Fiber Layer comes to Joe the Homeowner and offers to build him his own fiber optic Internet connection.  The cost of this construction is highly sensitive to the number of homes which take the offer in a given area.  Using Slater and Wu’s numbers regarding the Verzion FiOS roll out, the capital cost for a fiber to the home connection is about $7,000 if 20% of homes passed take the service and on the order of $3,000 to $4,000 at a 40% take-up rate.

Insight:  There is a marketing strategy which plays perfectly to this problem.  Suppose Joe the Fiber Layer comes to Joe the homeowner and makes the following offer, “I will build you your own fiber Internet connection for $5,500.  However, if 5 other homes on your line buy FFTH, I will send you a check for $500; if 10 more take it, I will send you a check for $800; 20, $1,500; etc.” I can imagine that in everywhere in America there would be neighbors leaning across the hedges saying, “Dude, we just got our FFTH connection.  It is AAAAAWSOME! You totally have to get one of these!”  Word-of-mouth is the best marketing, but peer pressure is better.

FFTH: Fiber From the House

Wednesday, November 19th, 2008

A while back, I was asked by a client how to stimulate the deployment of a fiber to the home infrastructure given the enormous risk of stranded investment and given a potentially capital-constrained incumbent. I suggested FFTH – fiber from the home. I was not being facetious, at least not totally.

When I gave my answer, I was thinking about the Netherlands. One of the major investors in fiber to the home projects in the Netherlands is a real estate developer. The reasoning is simple. Houses with access to broadband Internet services sell for a premium over comparable house without. (Lehr, Osorio, Gillett and Sirbu did an excellent TPRC paper measuring the magnitude of that premium, which I cannot find). In addition to making money as a fiber access provider, the real estate developer could capture the benefit of increased property values created by the availability of broadband Internet access.

I mentioned my FFTH idea to David Isenberg at the recent CITI 25th Anniversary Gala, and to his credit, David mentioned me in his blog posting (thanks, David). In addition, Sascha Meinrath and Michael Calabrese at the New America Foundation have organized an event for this Friday to examine the idea of FFTH. Calling it “Home with Tails”, Tim Wu and Derek Slater examine in a forthcoming paper whether this is a “customer centric” means for driving broadband adoption. Further, FFTH might possess other benefits. Eli Noam has suggested that private ownership of the access potion of the broadband network would help to solve the network neutrality problem.

Insight: When I suggested FFTH, I was not thinking about Network Neutrality and other consumer issues. I was merely thinking about distributing the risk of potentially stranded investment. However, since the idea of FFTH seems to have some merit I wanted to put a finer point on it, examine some of the potential downsides, and the policies which might be necessary to make FFTH possible.

Think about this. Instead of getting a cable modem or FiOS from Comcast or Verizon, Joe the Fiber Layer knocks on your door and offers to build you a fiber loop to the nearest Internet access node. And for less than it would cost to have Joe the Plumber remodel a bathroom (somewhere between $2,000 and $7,000), you would have your own fiber connection which greatly increase the value of the whole house at resale time.

The first thing necessary for the policies which to enable a FFTH business model is full and open interconnection to the nearest feasible Internet access point. This might be a remote terminal, street cabinet, or cable node. Creating effective access at this level is not necessarily an easy task. This may be small engineering spaces with powering and other serious engineering concerns. Thus, it might be able to accommodate every Joe or Jane the Fiber Layer who wants to put their customers’ equipment in those access points. Further, it would be simply impossible for each homeowner to have someone dig up the streets or hang fiber everywhere.

Here in Germany, we have some experience with policies for privately owned access networks. Back about 20 years ago, or so, a political decision was made to separate cable delivery from in-building plant. An artificial classification of access Level 3 and Level 4 was created. Level 4 network providers owned the cable wires inside individual buildings and there are some 700 of these companies still in existence. Level 3 providers were restricted for offering in-building wiring. This arrangement has lead to certain economic inefficiencies and may have some effect in hampering cable deployment in Germany. Thus, any policy designed to enable FFTH should not create artificial classifications and unreasonably prohibit network from providing services further up or down in the network. And who knows, you might someday find a major incumbent seeking unbundled access to your private fiber loop.

The Transition

Sunday, October 12th, 2008

The TransitionI receive any number of email newsletters, touting the next futuristic thing. This one caught my attention: The Transition. Its designers tout the Transition as not being not a flying car. Rather it is a “roadable aircraft.” With a pair of 10-foot-wide foldable wings, it is a single-engine, pusher-prop airplane which can drive on the road when it lands. As such, The Transition must meet Federal Aviation Administration standards when it is an airplane and National Highway Transportation Safety Administration and Environmental Protection Agency regulations when on the road.

What makes the Transition so interesting to me is not the flying car concept. This idea has been around for decades. What is so interesting is its regulatory origins. According to Popular Science, the Transition’s inventor, Carl Dietrich, got the idea from a 2004 Federal Aviation Administration rule change. The FAA created a new class of planes, called light-sport aircraft. To fly one, pilots would need only 20 hours of training, half that required for the most common license (haven’t gotten mine, yet).

I have made the point in a previous Cool Stuff, that there is some optimal level of regulation, which while guarding against the “morals of the marketplace”, would still enable new firms to enter. These new firms bring with them, new forms of welfare-enhancing competition and new business models not contemplated by the regulator at the time when it promulgates its rule changes.

Insight: I simply must have one. I think I will clean out my garage so I have space for it to park next to my sQuba.

TV White Spaces and the Tragedy of the Commons

Tuesday, July 29th, 2008

For more than nine decades, lawyers, engineers, and economists have argued that radio spectrum regulation is needed due to the fact that without some form of intervention, it is impossible to exclude or limit the use of a common resource such as spectrum.  Without exclusion, users consume the spectrum without regard to their usage’s impact on the benefits obtained by other would-be users.  They, therefore, tend to overuse the spectrum, causing interference to other users.  This reduction in social welfare due to overuse is referred to as the Tragedy of the Commons.However, we can now observe from the debate surrounding the TV White Spaces that the ability to exclude certain users is not sufficient to remedy the Tragedy of the Commons. A relatively small number of over-the-air TV households are able to use these spectrum bands without regard to the costs their use imposes on the rest of Americans.  Indeed, according to the most recent FCC statistics, in 2005 only about 14% (See Appendix B, Table B-1) of US TV households receive their TV over-the-air. The remaining 86% get no direct benefit from this spectrum.

The National Association of Broadcasters is now opposing tests the FCC is currently conducting which will measure the impact of unlicensed use of the White Spaces on digital TV reception. In order to protect digital TV receivers, potential White Space users must be excluded, and the NAB is throwing its weight around to ensure that outcome.  According to a quote from NAB spokesman Dennis Wharton, “We’re not going to be engaging in threats or anything, but about 70 members of Congress have already sent letters in expressing concern.” Well, as I wrote in a previous entry on Cool Stuff, at least one of those 70 letters is total bunk. Nonetheless, the cost to all of society of affording interference protection to this minority must also be considered.

Insight: If the NAB’s argument is accepted without scrutiny, the 14% of TV households will prevent the other 86% of US TV households (plus the TV-less households) from using those radio frequencies for broadband Internet, baby monitors, new forms of low-power broadcast, and other RCS (really cool stuff).  This lost benefit will not be compensated.  The exclusion of certain competing uses is necessary but not sufficient to ensure that society reaps the maximum benefit from the radio spectrum.  A means through which spectrum users can bear the costs they impose on others by excluding them is also necessary.