Just a quick time stamp while the Government and Telecom play chicken, though in this case Telecom is the chicken crossing the road and the Government is a thirty-eight wheel truck coming down the infrastructure highway, on my opinion of the outcome.

Two pieces of news:

1. "Analysts say Telecom's latest quarterly result shows just how dependent the company is on the profits of network arm Chorus, and how vulnerable it would be to competing fibre access networks built as a result of the ultrafast broadband plan."

2. "A string of local and international groups have expressed interest in partnering the Government in its $1.5 billion internet broadband roll-out. Communications and Information Technology Minister Steven Joyce said 38 groups had expressed an interest, and the Government was getting close to selecting private sector partners to build the infrastructure and get the roll-out under way."

So Telecom Group can wait till the UFB establishes competitive wholesale and retail markets, both within the UBF and against Telecom Group's Chorus/Wholesale/Retail monopsony, which should be bloody. Or it can co-operate.

Chorus can have a role building (but not owning) passive infrastructure for the Local Fibre Companies, being the local fibre company complying with the open access requirements, or being a shareholder, albeit a minority one in as many LFCs as it can.

Or it can stand staunch and sweat it out in truly sunset industry style.

If I were a shareholder, I know what I'd do.

Andrew Odlyzko's "Content is not King" finally reminded me that the critical difference in revenue is the change from broadcast (publication) to interaction. Not just interaction between a broadcaster and the audience (talk radio, letters to the editor) but a wholesale change from that dichotomy to everyone having the opportunity to be both or either. His example:

The primacy of connectivity over content explains phenomena that have baffled wireless industry observers, such as the enthusiastic embrace of SMS (Short Message System) and the tepid reception of WAP (Wireless Application Protocol). Combined with statistics showing low cell phone usage, this also suggests that the 3G systems that are about to be introduced will serve primarily to stimulate more voice usage, not to provide Internet access.

I disagree with the second conclusion, data connectivity will be an important part of the result.

The Commerce Commission's STD (apt TLA) on sub-loop unbundling, ie, how much to get in a cabinet, is out, 26% above the price for LLU (the price to connect to the copper in the exchange), and then the cost of backhaul from the cabinet to... an exchange I guess, needs to be factored in.

The additional cost has been lamely justified by ComCom due to the misapprehension "that service providers will be able to provide customers with higher-value services over sub-loop services, resulting in a higher return on investment."

Excuse me, but the services I get over the connectivity I rent from an ISP have little, and getting less, to do with the ISP (who have always been misnamed, IMHO, they are ITPs, Internet Transit Providers, a commodity with a Help Desk.)

ISPs are not going to get any additional high-margin services revenue, from me, whether they are in a cabinet or the exchange. The services, Google, Facebook, et al, aren't an ISP matter.

Serendipitously while visiting Laurence Millar's freshly released blog, I notice a link in his sidebar to a Slashdot story, "Should Wikipedians Edit Stories For Pay?"

My first thought was, "should programmers edit open source for pay," to which I believe the overwhelming answer is yes. It is core to the benefits of free software that those who can't program and want changes or to contribute can pay someone to perform on their behalf.

How is an open source encyclopedia different?

Particularly since, I noticed in the comments a link to this:

The reward board is an informal page where users who want a specific task related to Wikipedia (such as the promotion of an article to featured article status or the editing of an image) can offer a reward to editors willing to take on the task. The execution and details of the transaction are the responsibility of the participating parties, and the reward can be monetary, goods (books, cookies, etc.), barnstars, or tit-for-tat editing (like improving another article).Wikipedia:Reward board

The answer is, they do.

Just another predictive stake in the ground, this time regarding Twitter. Unless it federates it will fail.

While Facebook has recently announced 200 million users world-wide, and Twitter, who does not release official user population figures has maybe eight million, the chances of the latter reaching or surpassing the former are slim.

Why can't Twitter do it if Facebook already has?

Because Twitter is more like SMTP, the simple mail transfer protocol, while Facebook is more like AOL. Or to put it another way, you could build a Facebook over Twitter, but despite Mark Zuckerbergs best efforts you can't build Twitter out of, or in, Facebook.

Facebook is a closed platform that allows some development. Twitter is a very simple API. The simplicity and lack of features "feature" of the service and the fact the Twitter web interface to the service is mediocre has generated a lot of external services and third-party clients.

This has led to the recreation of the "Browser Wars" as "Twitter Client Wars." Tweetdeck vs SeesmicDesktop the first contenders.

Thus Twitter is a protocol and implementation by one company surrounded by an ever enlarging ecosystem which Twitter does not control. They do throttle third-party clients, but this impacts on the user experience and should be avoided. When Twitter flies the Fail Whale, the whole ecosystem dies.

The question then is can Twitter scale. And I believe the answer is no, the answer is federation via an open standard and distributed servers, the way we do email.

Will Twitter survive? Definitely, there will always be a market for their approach combined with mind-share, lack of concern about choices if its good enough and existing network effects will ensure a living can be made. The outer edges of the federation, populated by Laconica installations, Identi.ca being the leading example, along with Leo Laporte's Twit Army among others, will distribute the burden, and to a degree blur the population and services market, but at least it will work.

Two similar articles in close succession prompted this post, our vendor cousins helping out the poor helpless consumer (wielder of the invisible hand, but still helpless) with advice:

Used Video Games Aren't Good For Consumers and Free Content “Bad for the Consumer” (Says Cable).

Typical bought and paid for tosh from the self-serving. Don't worry, however stupid you consider the consumer to be, I'm very confident they can tell just who the second-hand market (which the copyright industry is keen to get its snout into) and free content is bad for.

After numerous swerves and excitement, S92A has been withdrawn, and the National led Government has instructed MED officials to amend Section 92A.


Regrettably, CFF has also adopted this approach, rather than supporting the original recommendation of both the Select Committee and MED Officials that Section 92A be dropped entirely.

I posted to this effect on the CFF Forum consulting on their amendment proposal :

"While commending CFF's efforts and empirically its critical role in the success of the roll back of S92A, I think it extremely unwise to so quickly move into "repair mode."

As patches set upon a little breach
Discredit more in hiding of the fault
Than did the fault before it was so patch'd.

Shakespeare - King John, Act IV, scene II

During the campaign against S92A very clear direction about the issues that were of concern and needed consideration was given and these would be ignored at considerable peril.

The risks are these:

1. Jumping in to repair S92A validates that any such legislation is required. Confirming that the Internet and for that matter ISPs are some sort of special case that deserves special consideration. They are not. Sufficient avenues exist for rights holders, they are merely too lazy and incompetent to use them, as the American experience attests.

2. Repairing S92A further assumes that the infringements of copyright involved are damaging to the rights holders, something which remains to be proven IMHO.

3. A solution proposed by CFF will carry the weight of CFF's reputation and will become something that CFF will find it difficult to resile from if some flaw should arise in respect of it. Having suggested solutions, if they are accepted by the rights holders, how can CFF change their position without compromising credibility?

4. The focus on S92A has been necessary, but it has obscured the many other flaws in the amending Act, which have only served to further complicate the ugly legacy patchwork of privileges and submission to special economic interests that the Copyright Act represents. The amending Act took eight years to pass. It can hardly be called a success. A rush job now is even less likely to produce satisfactory code.

The correct approach I believe, is to cease the small patches, and deal with the kruft that has accumulated around this
legislation on a first principals basis at arms length from mercenary self-interest and legacy beneficiaries. Their time is over."

Apparently questioning the wisdom of amending (except by deletion) Section 92A was deemed off-topic and the post can now be found here.

Partially a topical subject with the Pukekohe situation, but also a response to a posting elsewhere on the Internet.

I imagine the Pukekohe incident is even more galling where the failure of the 5 Nines PSTN occurred while broadband services and the telephony alternatives it supports continued to operate.

The point I guess is that less complex systems with intelligence at the edge can survive when the complex central switch has a conniption.

Don't get me wrong, in its time, where one system was all that could efficiently be supported, a system used by first responders and emergency services, 5 Nines was essential. If you couldn't effectively build a two-tier system, the one had to be as reliable as possible.

"If your reliable system depends on reliable human beings, it is not reliable" - if it can function in the presence of unreliable humans, it has a chance.

Centralised systems have a single point of failure and despite all the attempts to protect it, without redundancy, it will fail.

In addition to VoIP services, cellular, and how few Nines that service provides I shudder to guess, but as a back up when the "telco grade" service failed, I suspect it was very helpful.

It may be that at the technology stage of that system, centralisation is the only risk/cost/benefit option, but keep an eye out for the day when two independent 99.9 systems are cheaper (or even a little more expensive) than one 99.999 system, do the math, buy as many 9s as you need.

The new anti-spam Act joins the ranks of "something must be done, something has been done" cosmetic legislation that intimidates the innocent and does little to protect victims, like the spanking and dog chipping Acts.

The Department of Internal Affairs gains another content control role to join their censorship enforcement duties, and one wonders if they'll be the home of the election speech suppression.

But what will be the benefit of the anti-spam bill?

At best, compliance by NZ senders of email. That's worth the trouble?

What does it mean to the receiver? Nothing, spam will continue to be sent from other jurisdictions.

In any case, the reason none of this has been on my radar is that I don't suffer from spam. GMail effectively solves the problem for me without the need of Nanny State to stop all those bad senders. It is the only way.

Among the benefits of the current plummet of the NZ US dollar exchange rate is its proximity to the wailings, gnashing and rending of garments during its rise. So close one can almost hear the echo of the outcry at the intolerable climb of the NZ dollar against the greenback as the same stories of gloom are rolled out with the words "export" replaced by "import."

Even the shortest of short term memories must be struck by the media (and others) behaviour:

Exchange Rate Climbs: WOE!

Exchange Rate Falls: WOE!

The search for bad news to attract the eye and ear sometimes needs to be moderated by the risk of appearing stupid as you bewail first one thing, then its opposite.

Perhaps its the volatility. In any case, expect that exchange rates will be news what ever they do, and the "victims" will find a willing ear on the wailing wall of the media.

Kevin Kelly talks about the Technium and William Paley finds proof of God in a watch.

If you find a watch, it implies the existence of a watchmaker. Quite, because watches don't make themselves. Life does, and this is also why at this point I think Kelly's Technium is an illusion. Sure, we'll all go out if the sun died, but machines stop much sooner than that. He argues, via the continued existence of flint arrowheads, that technological "species" never die. True, they don't, nor do they live.

At this stage technology is so far from any kind of self-sustainability it barely meets the Movement; Respiration; Sensitivity; Growth; Reproduction; Excretion; Nutrition (MRS GREN) criteria.

Yes, at this stage.

I suppose there are enough reasons to think this is possible. And it is possible, like the gPC and gTelco when the news got out that they'd leased a bit of fibre, and goodness knows anyone with dark fibre wants to be a Telco. Wake up, not even Telcos want to be telcos any more. They want to be TV stations, or Video hire outlets or Malls. I suppose a gBrowser and the oft bet gOS are also possible.

But its my firm conviction that Google is both too clever and too wise to invade the Russias of all those markets any time, not soon, ever.

Dark fibre is a customer option, not the first step to Telco-hood. Google contributes financially to Mozilla Firefox for search engine placement. Google is using its weight in the 700MHz auction in the US to get a better deal for its customers, which indirectly, unlike Apple, will benefit Google. The phones its shopping around, AFAIK, are not the result of "hundreds of millions of dollars into developing mobile phone designs," instead they are demo applications on the OpenMoko platform. As for "leaked images," puh-leeze. The alignment with Sprint is I suspect both a pose/feint and one of those non-exclusive things Google does.

If a big beneficiary wants to contribute to some 3rd party open standards for handsets, good for them 3GPP seems obsessed with reinventing in a proprietary way stuff that works just fine already. Products to features, as Doc Searls and others assert, its not about making money with X, but making money because of X.

Google is already suffering staff and product bloat, acknowledged by Eric Schmidt (perhaps its his presence on the Apple board that gives impetus to all this "me too" gNonsense) and if it goes any further down that rat hole, it'll turn the same pear shape all the greedy eventually assume.

(The difference between the clever and the wise:
The clever know how to get out of situations which
the wise wouldn't have gotten into in the first place.)

Tim O'Reilly wrote that piracy was a form of progressive taxation, now Jason Calacanis exemplifies that social network fatigue is a similar effect.

The perils of success.

# AIR NZ SECURES $45M CONTRACT
# KIWI HITS US81C

Sooo, the exchange rate is "too high" and exporters are being hurt and outsourcing to cheap labour countries is the go?

Its only one data point but the coincidence seemed worth noticing, silver lining perhaps.

AIA, the scene of the next infrastructural blunder?

Already the shareholder-driven monopoly has announced increases in landing fees for the next five years, the kind of planning you can do when your the only game in town.

Ports, of the air and sea type, are typical infrastructural monopolies and it was with some relief I noted the Tauranga/Auckland ports amalgamation didn't occur. At least with competitive land transport one could ameliorate in the market any attempt at extorting additional monopoly rents. Same I guess in a sense with airports, though passengers are probably less tolerant of the addtional travel than logs.

I agree with Winston, but probably for different reasons. Our infatuation with FDI (Foreign Direct Investment, a euphamism for "borrowing," and something that will be repaid, plus interest, offshore) may be part of the reason for even considering putting yet another critical infrastructure in the hands of overseas owners. Rod Oram can talk about regulation, what a crashing success that has been in the telecommunications market for example. Big infrastructure monopolies can chip in to "think-tanks" like NZISCR, leveraging off the reputation of VUW, to almost monotonically argue that regulation is wrong. I stand to be corrected, if there are papers on the site that advocate regulation (excepting against competitors to incumbents), I'll recant.

It would seem the Air New Zealand and Tranzrail lessons are not completely learned yet, and in a world driven by cheap credit (everywhere but here it would seem) one can pony up a monster stack of cheese to get mice into the trap.

We continue to endure an historic legacy model of telecommunications, based on the age when it was required to be an integrated solution. Like railways, structurally integrated. And when the standards and operations were externalised in open standards the Internet was possible. Like the private automobile and roads, structurally separated. The next analogy, I think will be the ocean, and who should pop up with that one too?

"The Net needs to be an ocean that lifts all boats - including countless businesses. Not a network of canals owned by trench-diggers and container cargo haulers."

Doc Searls

and following on from that

"Requiring Google to bid on spectrum in order to get decent carriage of its bits, is like requiring GM to bid on road construction projects to ensure it cars will be allowed on the highway. It is a sad commentary on how badly policy makers in Washington have lost sight of the fundamental principles of open communications."

Mark Cooper, Research Director of Consumer Federation of America, by private correspondence today, reprinted by his permission.

The road analogy is gaining traction, the idea that the collective is best positioned to build and operate a competitive platform that has the lowest possible barriers to entry. We don't want the State to operate services, just make the roads impartial and let competition flourish.

(Thanks for the encouragement, "post more stuff. I'm getting sick of reading this one.")

Everyone's opinions are shaped by their experiences and perhaps even more so by their desires for a favourable truth. Wi-Fi, and particularly Muni Wi-Fi got the hammer from Andrew Seybold, who needs no introduction and Mike Iandolo of Alcatel-Lucent.

The phrase of the day, repeated ad nauseum was "There is no free lunch." I resisted the temptation to observe a monopoly is probably as close to a free (certainly of effective competition) lunch as you can get, but that's not the point. No one expects something for nothing, but they reasonably expect cost-plus pricing, which cellular clearly isn't and Wi-Fi, subsidised by collateral sales or as a public good certainly is.

"Worldwide, the wireless telephony broadband service providers don't want to acknowledge the possibility that mobile/portable/nomadic Broadband Internet Access will default to Wi-Fi. But every new portable/ mobile/nomadic communications or communications device sold that incorporates Wi-Fi increases the likelihood that Wi-Fi will become... or most chillingly to them... perhaps already is, the dominant "final delivery" technology of Broadband Wireless Internet Access."

Steve Stroh

"The Googles of the world, they are the Custer of the modern world. We are the Sioux nation"

Richard Parsons, Time Warner Inc. Chief Executive (Referring to the Civil War American general George Custer who was defeated by Native Americans in a battle dubbed "Custer's Last Stand.")

"I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone."

Jack Valenti, President, Motion Picture Association Of America, Inc. (in 1982 in testimony to the House of Representatives)

Incumbents are never wrong.

Some posts are just here to illustrate browsing coincidences, that make a point:

New Zealanders are more concerned with identify theft than other forms of personal, financial, national or internet security.

Stuff

VS

According to the Internet Crime Complaint Center and reported in U.S. News and World Report, auction fraud and non-delivery of items purchased are far and away the most common Internet crimes. Identity theft is way down near the bottom.

Bruce Schneier

Perhaps that is rational, perhaps losing one's identity, despite the lesser likelihood is worse than the more likely but potentially less impactful events. Maybe. I'd be impressed if those surveyed had put that much work into it. More likely I suspect the reason is more about the information supplied to the random samples by the "selection for sales" of commercial media.

Even worse:

A new survey from the C.S. Mott Children’s Hospital, The National Poll on Children’s Health, has found that US parents rate Internet Safety as being a more serious health threat to children than school violence, sexually transmitted diseases, abuse and neglect.

Yes, the Internet.

No, I’m not kidding.

TechCrunch

I don't blame people for making decisions based on the rough formula of:

^{IntensityxImpact}/_{Understanding}

but let's not forget that is the formula and the less you know, the more the drum is beaten, the more vile the outcome, the more it will loom in our primate brains as a real threat.

One of the more galling mantras recited by the property absolutists, those who would prolong monopoly, is the Right to a Return on Investement. It's absurd, return on investment is a risk, and the reward is supposed to be related to the level of the risk. Telco's that require guarantees that they will gain all the return off their infrastructures are wanting (and while we might all want such a sinecure, wanting isn't getting, unless you are big enough to threaten the State) champagne returns for beer investment.

Capitalism is the right to choose your investment against the choice made for you by command and control centralised models. This does not protect our brave captains of commerce from the risk of regulatory or legislative change. Holding the State to ransom isn't something many companies can contemplate, I can't think of another description for what Telstra did in Australia. Change is a given, it doesn't come with a guarantee, nor does return on investment.

There is little risk in infrastructure, I expect frequencies, in the air, and in glass, will be returning at a rate correlated to the risk for ever. The risk at the services level will be shared, but the rewards will not be with infrastructure operators. The dairy that sells the winning Lotto ticket gets no share of the proceeds, it may gain valuable reputation, but that's all. Monopoly infrastructure operators definitely believe they have a right to a share in the rewards for the risk taken by their customers.

I've wanted for some time to have a full post RSS feed, which one might hope would be a simple option, but if it is, its not simple to find. Rather than populate the excerpt with the full post, I've set up an account to route posting notifications, which appear to contain the full post to an EmailRSS gateway which this post is intended to test.

Despite the accolades of luminaries like Rod Drury, Paul Budde and Ernie Newman, the "structural separation" offered by Telecom is little more than disposing of what has become a liability, ULL copper, and getting paid for someone else to solve the ULL puzzle. In their own words:

This Netco would own the physical copper access assets (but not
electronics). It must be able to receive an adequate (regulated) rate of
return in order to provide it with the cash flow necessary to invest to meet
customer demand. It would be prevented from investing upstream and
re-integrating. It could also potentially be protected by regulation from
network bypass if that was considered desirable to allow access cross-
subsidies.
Telecom high level proposal

Very clearly and very explicitly the proposed Netco is in fact a CopperCo. In roading terms, when Telecom was told to allow other suppliers up your drive way, they said fine, we'll just keep the streets. Let's look again in more detail.

1. "Netco would own the physical copper access assets"
   
   That's all, not any fibre assets.
   
   
2. "It would be prevented from investing upstream and
   re-integrating."
   
   A kind suggestion, lest we fall again under monopoly, but of course the monopoly has moved "upstream" and Telecom suggests this new Netco be prevented from investing there. The last thing they would want is a legacy last-mile operator entering competition with them.
   
   
3. "It could also potentially be protected by regulation from
   network bypass if that was considered desirable to allow access cross-
   subsidies."
   
   Now I can't be sure what that means, but I get the feeling its offering the temptation of monopoly to the Netco investors, Telecom, State and Industry among them. None have shown much stomach for competition on their own patches.

Its a smart move, like all of Telecom's, and I can't imagine a greater irony than Telecom funding a greenfields monopoly fibre infrastructure from the proceeds of disposing of an asset thats value is compromised by its age and complexity now that the property of exclusive access has been removed, to those who have tormented it for the last decade.

1. "Peering" is a confusing term
   
   While I agree there are some unfortunate connotations of the word, that are ruthlessly exploited by some, it is globally recognised and dealt with in other countries, New Zealand need not set itself apart from this.
   
   Confusion is best addressed by definition not switching terminology. The chosen alternative, oddly selected by InternetNZ and Telecom, is "Internet Interconnect." "Interconnect" brings its own set of connotations, PT&T PSTN interconnect for example, that are better avoided as they are quite misleading in this context. If Wikipedia is to be believed and "The Internet" is a contraction of "The Internet is a worldwide, publicly accessible network of interconnected computer networks," "Internet Interconnect" expands to "Interconnected Network Interconnection" which is prima facae redundant and illustrates that interconnect is intrinsic to the Internet, not a tack-on the way PSTN "Interconnect" has been with the entry of competitors.
   
   
2. Peering is about "Equals"
   
   Peering not about *being* equals, but *behaving* like equals.
   
   
3. Peering is complex
   
   If we examine the longest operating and largest open peering exchange, WIX, we find 160 odd participants of diverse sizes and skills. If peering was complex, it is unlikely that this number of autonomous networks would participate.
   
   While it is possible to elaborate and complicate even the simplest concepts, look at string compared to macramé, the fundamental of peering, which is the fundamental principle of the Internet is:

   the exchange of traffic between members of different, directly connected, networks.

   As noted here, there are a number of other considerations that some are motivated to mix in, but these don't change the basic meaning.
   
   
4. Peering is about "Circuits"
   
   Historically peering (and most other networking) was implemented with circuits, point to point connections, and for reasons of efficiency and administrative simplicity, there were often pairs of circuits, established by each of the peering networks.
   
   This is before the era of cheap metropolitan switched services like CityLINK's PublicLAN which have allowed multiple connections over a single connection with very high performance at relatively low cost. Plus the circuit model doesn't scale, to provide the connections WIX does to 160 participants would require 25,440 such circuits.
   
   What was once canonical is now historical.
   
   
5. Peering is for Service Providers
   
   Empirically false as demonstrated by this list of registrations for the WIX, note, not all registered autonomous networks currently participate.
   
   The fact that changes in networking technology (the move from circuits to switches), costs of equipment (cheap BGP capable routers) has reduced the cost of entry and meant that customers are now intruding on service provider turf. Like most incumbents, this is regarded with concern.
   
   
6. Peering is about cost saving
   
   Peering has a number of other benefits including performance and resiliency. Peering is often deprecated as less important as transit (global rather than local delivery) costs decline. With recent outages in NZ so topical, the benefit of alternative delivery paths to local services is illustrated.
   
   
7. Peering is about carrying another network's traffic
   
   The argument runs that Network B is carrying Network A's traffic when they peer (and vice versa, but "The Folly Of Peering Ratios" by Bill Norton scotches that debate so I won't address it).
   
   The perspective of this view is completely wrong, Network B is carrying its customer's traffic, which is what it is paid to do. Same for the traffic while it is in Network A, it is traffic their customer has paid to send.
   
   Traffic does not belong to the network, it is the customers'.

In "The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations" I finally read a line I've been pushing for a while about the changes being wrought by cheap high-performance computing and telecommunications (and the associated software). IANAE, but Ronald Coase collected his Nobel Memorial Prize in Economic Sciences from the Bank of Sweden for his work on the nature of the Firm. Essentially, AFAIK, it illustrated that the firm exists to reduce transaction and co-ordination costs. Back in the industrial day, that was by getting larger and forming close-packed command and control structures.

But that advantage is now available at a much smaller scale, down even to the individual, and so the compulsion to cram into a single building in order to ease organisation, despite the costs of such an architecture, is gone. Further, in a rapidly changing environment, the rigidity and inertia of large tightly bound organisations leads to a diseconomy of scale as responsiveness rather than perpetuity is rewarded.

It's still possible to be big, but you will be flat. Stovepiping up the stack from your infrastructure will not be rewarding. The shearing stress of the different rates of change, increasing as you go higher in the stack, will tear you apart. Something Microsoft, newspapers, telcos, and perhaps eventually Google, suffer from. Big infrastructure, as long as it remains just that, will persist, and so no doubt will the temptation to rise into services. Resist that temptation and all is well, fall victim to it and suffer the consequences. The most damaging consequence to an infrastructure provider entering the services market is they have made themselves a competitor of all their customers, which most customers don't like.

While I applaud the "small pieces, loosely joined" model, there is still a sweet spot for the large infrastructure utility, question is, how far down the stack do you need to go to find it?

Check out the book, while it is overly gushy, and ignores a more nuanced investigation of some of the claims, and provides one of the worst analogies for copying I've read outside of the recording industry's propaganda, there is much useful in it.

Large, vertically integrated information organisations are suffering, this book is one illustration and attempt at explanation, for a more oblique example, listen to this and think of Telecom.

Peering is an important, complex subject. There is strong anecdotal evidence emerging that the de-peering that has occurred since 2004 has resulted in additional complexity and inefficiency in New Zealand's Internet and data-exchange capabliities. The Government's view has hitherto been that a preferred approach should be for industry to resolve technical issues without undue intervention. However, in response to strong feedback from the sector, I have asked officials to further investigate this issue, with a focus on the national interest of having efficient and robust Internet services within New Zealand.

Hon. David Cunliffe, Minister of Communications, 2007

1. Peering is not complex, otherwise lots of small and medium sized businesses wouldn't be doing it. Arguably the transit pricing of Telcos probably acts as an incentive, but peering is the simplest most straightforward solution to the fact not everyone is connected to a single network. It is simpler for customers as they aren't trying to levy monopoly rents and so for Telco's peering is complex, Telco's are complex.
2. The technical issues are long resolved, peering has been operating for the willing for years, what remains are personality problems in telco culture, the hubris that they are so good they deserve to be paid twice; once by their customer and again by someone else's customer.

There is an argument that holds separation of services revenues from network operation will result in a decline in investment in the latter. I am not an Economist, but what is unseen in this analysis, IMHO, is the declining return services are providing. The network monopoly is being monotonously and inevitably erased by improved technology, and legacy returns from vertically integrated telcos, despite the "Triple (or Quad) Play" new clothes for the Emperor, are declining.

The two businesses are now starkly different and need to be performed by different organisations. Network infrastructure is near guaranteed utility, services are now competitive and too diverse for a single organisation to efficiently supply. Telecommunications isn't just voice anymore, not just a voltage in a wire.

But thought is a very inertial thing, despite its intangibility. For an example of how poorly a new paradigm can be percieved by incumbent models, look at this.

An interview by Telco 2.0, a group of consultants who believe the "conglomerate vertically integrated telcos" can be reinvented to thrive in the new environment, of Malcolm Matson from OpenPlanet who believes in a fundamentally different way of building access networks: Open Local Access Networks (OPLANs).

The degree of disbelief that things could be different is epitomised by this question from T2:

"If you're a monopoly provider, won't you capture monopoly rents?"

For the interviewer its inconceivable that one does not imply the other...

Fortunately Telecom has seen the future and made a choice rather than continue to straddle the divergent businesses telecommunications is splitting into, to focus on the services layer and divest entirely the network infrastructure operation.

On the network infrastructure, OPLAN, side, WCC is also taking an appropriate step, a belated one after the very precocious CityLink initiative in 1996, but they appear to have recovered their footing and are now moving on and into accepting their responsibility for transport infrastructure of all kinds, the world has moved on from roads, drains, and power lines and the WCC is about to lead.

Two different businesses, two models of investment, one long term and practically risk free, the other of an ever shortening cycle with much greater risk and concommitant reward. Looking around the overheated investment climate, where is the shortage that would avoid reliability in a world of risk?

Interesting perspective from Mary Wong of Franklin Pierce Law Center discussing the growing discourse around such topics as “the commons,” “free culture,” and “open content.”

Essentially she's drawing a resonance between Human Rights "Law" and "Copy Rights" The reason is to advocate User rights that balance the growing extent and duration of proprietary rights producers are being granted, for the benefit of "The Author."

Please forgive all the caps and quotes, but there are a lot of questions about "The Author," particularly in a world where nothing is truly original.

The producer's right, particularly the French concept of Auteur (?) rights, has always been sheeted home to inviolable human right of possession of work, however for cultural products, there has been a failure to include the audience in the deal and while the audience was critical it was excluded. Back in the day when the audience had no capability for commentary and critique it wasn't a big right to cede, but that day has gone. The audience is going to participate, and "The Author" had better get used to it, and Governments need to start working on frameworks that support both the performer and the audience.

In granting a human right, one must assure all humans benefit from it. In granting exclusive rights, this is clearly problematic.

Paul McGovern is horrified, scandalised, that Telecom is going to use its windfall profits from the sale of the Yellow Pages in its perception of its own best interest. Following the AAPT debacle, good money is to be sent after bad, and in true Telco fashion, they're trying to buy into infrastructure because Telstra treats them as well in Australia as TCNZ treats TCL here. There's no hypocrisy in business, speaking out of different sides of your mouth depending which side of the Tasman you are on is par for the course.

Regrettable, but I care less about this than a quote attributed to David Cunliffe (the Minister following the Telecom party-line on peering, ie, it is complex, but more of than in another post)

Privatise the profit, socialise the risk.

If this is truly Cunliffe's opinion I'm more than scandalised [UPDATE: Fortunately I have the wrong end of the stick, see Paul's comment]. As a repetitive and vocal advocate for structural separation, I agree, but the rewards of capitalism are for those who take the risk so the quote should be:

Socialise the certainty, privatise the risk

And be assured that glass and RF are certain. Until there's some kind of quantum signaling that removes the need for ducted or free-space RF, they will be without risk.

The services that run over those carriers, perhaps bearers is the better term, thats where the risk, and properly, the profit, reside. Roads haven't fallen into obsolescence as new vehicles and services have developed, nor will fibre or frequencies.

Collectively we have RF as a commons, the faux scarcity and illusion of "interference" has allowed the State to grant itself a role, in collusion with the comfortable incumbents of broadcasting and telecommunications in regulating and making revenue from these collective public goods That time must surely be over as private properties have failed to deliver Government the policy outcomes they have sought.

Government, local and central need to approach the next generation of infrastructure as they did road and now do with rail and electricity lines. Local government builds, manages and operates roads, sewer and water pipes. The new pipe is fibre, the new reticulation, the new transport lanes.

Intra-city fibre to the councils, inter-city to central government. Incumbents are not excluded from continuing their stove-piped service/infrastructure model, any more than books shops are banned while the council operates a library. If they think they can do it better, their decision. But the availability under RAND conditions of fibre to anyone who has the wherewithal and complies with the "fibre code" may make that vanity uneconomic.

We owe no protection to Telecom or any other private enterprise, they are risky, and that is why they are rewarded. We provide the shared infrastructures, they compete on them.

Public certainty, private risk, structural separation.

In line with noting down a few long held beliefs, here's one you may have heard me drone on about before.

The end of the integrated carrier incumbents began the instant voice was digitised and set free from the analogue prison of the proprietary bearer, copper, RF or other.

From that moment on, the service subsidising the network was in decline. When you had to have a wire, or a string between two cans, to carry the cash cow of voice, you could milk it. Once any old infrastructure would do, it was doomed. This is the source of all the hysteria of QoS, IMS and other "complications," its a way to keep out competition.

Telco 2.0 have a series on the subject, so far:

• The communications industry is part of a distribution system for bits — ones and zeros.
• Those bits have value to the users, and sometimes (but not always) there is payment for those bits.
• There are many “bit delivery systems” (e.g. broadcast, Internet, SMS) with varying degrees of vertical integration. The weaker the integration, and the more modular the technology, the more vendors there are and the more control the user has.
• There are also many degrees of commercial integration between the services and the content delivery, with payment varying from fully integrated and automatic (e.g. SMS) to completely separate (e.g. fixed-line Web).
• Strong technical forces are separating bit delivery from the services those bits represent.
• The under-explored territory is where that separation occurs technically, but the commercial side remains integrated.

The Telco 2.0 ‘Business Model Map’

Suck it up

The debate on amendments to NZ copyright law in regard to technology is generating some pithy comment. For example, consultant Hamish MacEwan, in conversation after InternetNZ’s workshop on the topic, protested at the special status accorded librarians et cetera, that allow them to get round technological copy-protection mechanisms to execute “permitted use” rights. “They’re allowed to do it, but Joe Blow [the average user] isn’t,” he said. “No, I’m not even going to call him Joe Blow — he’s Joe Suck. He’s expected just to sit there and consume.” You could have given a catch-phrase to the world there, Hamish.

Stephen Bell

The notion that innovation proceeds through the recombination of existing ideas to form something new is not unique to the Web, or even the last century. In fact, it was Isaac Newton who famously said in a letter dated February 5, 1675, "If I have seen a little further it is by standing on the shoulders of giants," His modest explanation for how he achieved such incredible insight into natural phenomena has come to represent the idea that all innovations are ultimately cumulative, with each generation of advances resting on the previous.

Today, with open platforms for innovation inviting unprecedented participation in value creation, cumulative innovation is going into ores drive. Growing numbers of professional and amateur developers are crest ing their own content and applications by combining various fragments the find freely scattered across the Web. As described in Chapter 2, this fluids combinatorial approach to innovation is making the Web look inc easing1 like a traditional librarian's nightmare-a noisy library full of chatty compo vents that interact and communicate with one another. "Wikinomics: How Mass Collaboration Changes Everything"

While criticising the books lack of walking the talk, it still is the best business book on the changes that are being wrought by the success of small pieces, loosely joined by cheap high-performance communication, on open platforms, supported by cheap high-performance computing.

I posted a new photo to Photos.

Time to get on record my long held belief about the future of proprietary cellular services. Transactions, that's it. Voice if totally essential, but otherwise transactions. Everything else that can, to non-proprietary meshes.

The GSMA initiative, shrouded in immigrants and the poor, will grow up the wealth curve and down the magnitude curve, all the way to micropayments probably.

DCMX is another step.