Submitted by acohill on Sun, 02/07/2010 - 12:08
Apple, as the company has in the past, has begun to upset, er, apple carts. With the announcement of the iPad, Apple also announced a book section in the iTunes Store, with a business model that is exactly the same as the hugely successful music model they use. For both books and music, Apple will collect 30% of the sales price of the item, and the publisher/seller collects 70%. The seller of the item sets the actual price. This is called the "agency model."
Whose apple cart is upset? Well, it is Amazon, who has insisted on setting prices for publishers that sell books for the Amazon Kindle. This has irritated publishers, who think that popular and fast selling items ought to be priced differently, and conversely, slow moving items should be able to be reduced in price. It is a simple, time tested model that helps keep supply and demand in balance.
Amazon got away with it for a while because they had the only popular ebook reader. But now that Apple has announced the iPad, publishers are likely to abandon the inflexible Amazon. Look for the Kindle to appear in supermarkets in a few months, mixed in with those remainder books for $4.99.
What does this have to do with community and municipal broadband? Well-designed open access, open services networks let providers set prices, and simply take a revenue share that helps pay for network operational costs. This approach encourages innovation and competition among providers. Insisting on fixed prices (the Amazon model) drives service and content providers away.
Submitted by acohill on Thu, 02/04/2010 - 09:36
A coalition of New Hampshire towns and other interested parties are encouraging state legislators to give New Hampshire towns and cities the right to bond for telecommunications infrastructure. Unsurprisingly, the incumbent providers are not excited about the notion, even though largely rural New Hampshire has tens of thousands of residents still on dial-up and one of the providers is having severe financial difficulties. The towns see it as an issue of economic survival. Who wants to live in a rural community, no matter how great the quality of life, if there is no broadband or only "little" broadband?
The towns have correctly distinguished between "little" broadband (DSL, cable, wireless) and "big" broadband. They want big broadband, because that represents the future of economic development and the ability of these towns to retain existing businesses and to attract new ones. Here is an exquisite irony: a fiber cable manufacturer in rural New Hampshire can't get the bandwidth they need to do what they want to do to manage the plant properly.
In exchange for bonding authority, the towns have wisely agreed to only build open access community broadband networks, in which all services for businesses and residents would be sold by private sector providers. So in rural parts of the state where the incumbents are saying it is too expensive to build a private network, the towns are saying, "Okay, we get it. We will build a shared network and let you, Mr. Incumbent, use it to reach customers you can't afford to build to on your own."
Why would the incumbents be opposed to that? It opens them up to competition.
Submitted by acohill on Tue, 02/02/2010 - 09:36
The iPad continues to generate enormous discussion on the Intertubes; while I have seen a lot of commentary about how it might be used in higher ed, I have seen very little about how it might be used by kids. The most obvious higher ed connection is as a replacement for textbooks, which are murderously expensive. A college student with an iPad can carry around an entire library of textbooks and should be able to save a lot of money at the same time. Textbook costs ought to decline over time, not to the $15 dollar level, but perhaps by 50% from $60 to $30 (and many technical textbooks are pushing $100 or more).
But the iPad strikes me as the perfect computer for middle school and high school. Smaller, lighter, no moving parts, much less to go wrong, and with plenty of horsepower to handle routine school assignments, which are mostly typing essays and papers. And you could do a lot of interesting basic math with a program like Apple's Numbers spreadsheet application. Apple is selling its three productivity programs for $9.99 each (word processsing, spreadsheet, presentations), about a third of the price of the cost of them for a laptop. With the dock and keyboard and wireless printing to a shared printer, kids have everything they need for school at much less than you might spend for a bare bones Apple laptop. I know there are very inexpensive Windows laptops available, but they still come with all the drawbacks of a laptop--heavy, moving parts, more susceptible to viruses, expensive software, etc.
Like the iPod, the iPad is going to change the way we do a lot of things. And like the iPod, it will create a lot of new business opportunities.
Submitted by acohill on Wed, 01/27/2010 - 16:35
I receive a lot of inquiries asking for help understanding open access. The broadband stimulus funding has raised awareness of this business model, and I have written a short paper explaining how it works and why. The PDF is attached to this article, or you can visit the Design Nine Web site to download it.
Submitted by acohill on Mon, 01/25/2010 - 17:24
A short, good analysis of six industries that Apple's tablet computer could change. Apple is expected to roll out the device next week.
Submitted by acohill on Mon, 01/25/2010 - 16:06
Some applicants for first round broadband stimulus funds report they have received their rejection letters today (1/25/2010). It does not appear that the letters provide any information about why an application was rejected, other than to note that it did not score high enough.
Submitted by acohill on Mon, 01/25/2010 - 13:32
USDA/RUS has announced an additional $313 million on stimulus funds, going mostly to rural telephone company projects.
Submitted by acohill on Thu, 01/21/2010 - 16:08
The Intelligent Community Forum announced their Smart Seven communities for 2010 yesterday.
One of Design Nine's projects, nDanville, was one of the ICF's Smart 21 communities this year, and got a mention for its success in attracting new jobs by building community fiber.
Submitted by acohill on Thu, 01/21/2010 - 10:19
A story in the Financial Times (registration may be required) suggests investments in broadband are peaking. The article is a little misleading, because it suggests that this is a sign of "maturation." Maybe. Maybe not.
Broadband investments are peaking because cable and telephone companies have spent a lot over the past decade upgrading their antiquated copper-based infrastructure, and in their view, there is not a lot left to do. Yes, fiber to the home deployments continue to grow, but large parts of the U.S. have been redlined by the incumbents as "too expensive" for fiber. So most of this investment has been focused on what the FCC calls "little broadband," not "big broadband." Big broadband requires fiber.
Small and medium-sized businesses stuck on DSL are already calling it "tomorrow's dial up" (an exact quote from an angry business person in West Virginia). To attract jobs and businesses, communities will have to make basic broadband infrastructure investments in "big broadband."
Submitted by acohill on Thu, 01/21/2010 - 09:55
A new study by the Phoenix Center indicates that job seekers with access to broadband are more likely to find jobs. The study says it best to have broadband access, but even those still stuck on dial-up do better in their job searches than those with no Internet access at all.
The cost of broadband at home (averaging between $25 and $40 a month) also highlights the importance of libraries and public computing centers for job seekers. If you are out of work, you may have to cut out luxuries like broadband at home, so you need to a place to go to do your online job searches.
Submitted by acohill on Tue, 01/19/2010 - 11:33
Steven Levy has a Wired article that illustrates some of the problems that Google, and by extension, all cellphone users face. The new Google Nexus One can be purchased unlocked and without a cellular contract. You can then (in theory) go to any provider and get a service contract. Except, as Levy points out, even if you paid $500 for your dandy new Nexus One phone, you are not likely to a) find a provider willing to sell you service, and b), if you do find a provider (T-Mobile is the only one so far), you won't get a discount on the service contract.
The only glimmer of hope is that with all the new iPhone imitations coming to market, the increased competition for smartphone customers, who tend to spend more because they buy both voice and data service, has lowered prices a bit. But the lower prices is so far limited to the unlimited contracts, which were already very expensive. The cost of these contracts is coming down by $20 to $30, but are probably still very profitable. When there is real competition, prices can and often do come down. But the cellular business looks a lot like a cartel, with cartel-like pricing.
This is an illustration of why open access networks, with community ownership, are so important. Only by making investments in owning some of the infrastructure do users (local governments, schools, businesses, residents) get some control over the market space. When telecom infrastructure is owned entirely by one company (e.g. phone/DSL, cable TV/cable Internet), the company that owns the infrastructure gets to set the pricing--and rightly so. I don't subscribe to the notion that incumbents are bad. They are making intelligent pricing decisions based on their asset and business models. Communities that want better and more affordable telecom services have to introduce different asset ownership models and different business models. It's not hard or complicated, and many communities are already doing this with excellent results. Call Design Nine (540-951-4400) if you want more information on how to get started.
Submitted by acohill on Fri, 01/15/2010 - 08:25
I have added the Benton Foundation to the blogroll on the right. Benton has been posting some very useful items on community broadband and municipal broadband projects.
Submitted by acohill on Tue, 01/12/2010 - 07:40
Hong Kong Broadband Network Ltd. is offering 100 megabit symmetric connections to its customers for $13/month. Costs are going to be lower for them because most of the customer base is living in high rise apartment buildings, which are less expensive to cable. I don't know about Hong Kong, but in Japan, the building codes require telecom duct to every apartment from the ground floor, meaning it takes under an hour to run fiber to a new customer in a Tokyo apartment. Meanwhile, in the United States, many of us are still getting our broadband via copper cable technology invented in the late 1800s.
Submitted by acohill on Thu, 01/07/2010 - 10:06
Chris Mitchell of the Institute for Local Self-Reliance has an excellent article on municipal and community broadband at Ars Technica. Mitchell discusses some of the positive outcomes from the Lafayette, Louisiana municipal network, where you can get a 50 megabit symmetrical Internet access connection for just $58/month--which would qualify it for the lowest prices in the country. A ten megabit symmetric connection is just $29/month, which is also probably the lowest price in the country for that level of service.
It is the symmetric service that is so important. Many incumbent providers will tout services "up to 50 megabits" without noting that the service is asymmetric, meaning you may have 50 megabits downstream but as little as 2-5 megabits upstream, and that both the upstream and downstream bandwidth gets shared with a bunch of your neighbors (often 25 to 50 of your neighbors).
Why is symmetric bandwidth important? It enables work from home job opportunities and enables running a business from home. The availability of symmetric bandwidth is an economic development and jobs issue. A community that does not have symmetric broadband services is cutting off jobs and business growth.
Finally, while the article highlights the positive impact in Lafayette from the municipal network, it is important to note that there are other business models for muni networks that do not involve getting local government to sell services in direct competition with private providers. The open access, open services model being pursued by local governments in Virginia and Utah are doing extremely well, although you don't hear much about them because there is tremendous pressure from incumbents and lobbyists to not talk about them--they don't want to have to tell legislators there is a "third way" that provides an appropriate role for government but keeps local governments out of direct competition. nDanville, The Wired Road, and Utopia are all doing extremely well.
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Submitted by acohill on Wed, 01/06/2010 - 09:11
This article from MacWorld does a nice job of highlighting the emerging class of the titans. Apple and Google are ramping up for an epic fight, and we all win when two big companies compete for marketshare.
Google has announced the Nexus One smartphone, just the latest of several Android-based smartphones. Android is the open source operating system developed by Google which powers not only the Google phone, but the Droid phone from Motorola (distributed by Verizon). And alongside Android, Google has also announced the Chrome operating system, which wont' see the light of day for another year. Meanwhile, Apple has purchased an online advertising firm. So Google is aiming at Apple, and Apple is aiming at Google. The next couple of years will be interesting, and both companies will be forced to work harder and be more customer-focused--especially Google, which has little experience actually selling anything except ads.
Submitted by acohill on Wed, 01/06/2010 - 09:02
New rumors about the Apple iTablet (or iSlate, or iSomething) suggest that it may come with 3G wireless network access built in. Big deal, since all smartphones already have this, right? No, the rumormongers are suggesting that iTablet owners will be able to pick and choose from several different cellular providers--but only for data, not voice.
It is likely that current cellular roaming agreements that make it possible to use your cellphone on any network would be modified to allow data roaming independent of voice contracts.
If this happens, it will be good news/bad news for the cellular industry. Good news in the sense that it will bring an entirely new stream of revenue to them--every iTablet owner who already has a cellphone contract will likely purchase a second contract for data roaming, and the cost will probably run $40 to $50 per month. The bad news is that the tablet will put even more pressure on cellular networks, as high bandwidth uses like watching TV shows, movies, YouTube videos, and video chat will explode. Want to bet that the iSlate will have Apple's iSight video webcam built in, just the way current Apple laptops have the tiny camera built in? Bet on it, and expect an explosion in video-enabled Skype use among iTablet owners.
There is potentially good news for rural communities suffering from lack of broadband and poor or nonexistent cellphone service. The new revenue streams that are likely to emerge may help improve the business case to expand wireless voice and data services into rural areas previously difficult to justify from a revenue perspective. But community broadband networks, powered by fiber, will still be needed to support commerce, jobs, and economic development.
Here's the funny thing about the iTablet--Apple had has this vision for at least 22 years--it has just taken this long for the technolgy to catch up with the Knowledge Navigator.
Submitted by acohill on Tue, 01/05/2010 - 10:15
Here is a roundup of rumors about the new Apple tablet. Apple has announced a media event late this month, but is not saying what the announcement is about. Until very recently, most pundits were guessing Apple's table computer would not be announced until June of this year, but I think the increasing interest in the Google Android phone may have caused Apple to move up their announcement to suck all the oxygen out of the room and take the media focus off Android.
If that is Apple's strategy, it is likely to work. The iTablet or iSlate (nobody really knows what the final name will be) will relegate the Amazon Kindle and other bookreaders to strictly second tier status, much like the iPod put all other MP3 music players into a permanent also-ran status, and completely transformed the music industry.
There is still much debate about whether the new device will have an iPhone style interface or a Mac style interface, with the conventional wisdom betting on the iPhone. But what a lot of people forget is that it probably does not matter very much, because the iPhone is a Macintosh underneath. Every single iPhone has the full power of a desktop or laptop Macintosh. So the iSlate may look more like an iPhone, but as it evolves, Apple can easily and quickly add more functionality just by peeling away the cover on the hidden power.
Why is this device going to be revolutionary? It won't be just the technology--Microsoft has a tablet operating system for years. What Apple is likely to unveil along with the iTablet is a new section of the iTunes Store, stocked with magazines and newspapers. iSlate owners will be able to subscribe to a wide variety of publishing content and get the content wirelessly on their iSlate. This will save the rapidly collapsing magazine and newspaper businesses, which have been unable to find or build their way out of the two century old paper-based distribution model. With the cost of distribution of a newspaper or magazine slashed to nearly zero, papers and magazines will be able to focus on high quality writing and reporting, which is always in short supply.
As with other breakthrough Apple technologies, new kinds of opportunities will emerge quickly, creating new businesses and jobs where none existed before. One big sea change will be in higher ed, where colleges and universities that are smart will simply issue every student an iSlate on the first day of freshman year. Faculty will be able to provide their students with very high quality (book quality) class notes, multimedia presentations, and even administer tests via the iTablet. Can't they do all that now? Sure, but not with the kind of high quality interface and superb usability that the iSlate will bring. And textbook prices should come down, although some textbook publishers will resist.
The iTablet will allow new college textbook writers to enter the marketplace quickly and easily, just the way the iPhone App Store has created thousands of new software publishing businesses. Writing a textbook will no longer require years of negotiation with publishing houses still operating on a business model developed during the era of Charles Dickens. Instead, textbook writers will be able to market directly to faculty at colleges and universities, with the textbook distributed at very low cost via the iSlate Textbook Store.
The big, sheet of paper size screen of the iTablet will allow colleges and universities to create "virtual registrar" interfaces that will give students the ability to fill out and submit forms quickly and easily from anywhere, with much better interfaces and ease of use than Web forms (because of the direct input pen interface).
The iSlate will also boost TV show and movie sales, with the existing iTunes TV/movies section all ready to send video content directly to a large, comfortable, easy to watch screen.
Apple has been planning this for years. Note that Apple has had wireless keyboards and mice for some time, and continues to roll out improved wireless devices like the popular Magic Mouse. Prop the iTablet up on a desk, start typing away on your wireless keyboard, and you have most of the functionality of a laptop.
If the first decade of the 21st century was dominated by Apple and the iPod, the second decade will be dominated again by Apple with the iSlate. Stand by and watch the fun begin as the publishing world is turned upside down.
Submitted by acohill on Mon, 01/04/2010 - 10:03
Via MuniNetworks, a link to a podcast that describes how Orem City, Utah is benefiting from the open access, open services, community-owned Utopia network. Local governments in Virginia that have invested in open access, open services networks are also benefiting in the same way. A community broadband network, with infrastructure owned by the community but services offered by the private sector, aggregates demand across the entire community, which leads to increased competition among private sector providers, does not compete with incumbents, and when done right, creates sharp drops in the cost of telecom services. The Wired Road network, in rural and mountainous southwest Virginia, is seeing price drops of 40% to 70% on the cost of Internet access for government and institutional customers.
Submitted by acohill on Tue, 12/29/2009 - 15:05
The recently announced Blockbuster store closings will cut about 20% of the firm's stores. Blockbuster plans to replace them with kiosks and smaller stores in more densely populated urban areas. Blockbuster also has a Netflix-style subscription service, but will only one-fifth the customer base of Netflix.
Based on my own experience, Blockbuster may have alienated too many customers with their outrageous late fees. They "eliminated" late fees two or three years ago, but replaced them by billing you for the full retail cost of the DVD if it was late. Once you returned it, they credited your account for the DVD, less a "restocking" fee, which, of course, is a late fee by any other name.
In practice, the service being sold (watching a movie) is identical no matter which company you get the movie from. So the movie rental business is based 100% on the quality of service. And so this is why Blockbuster is losing--Netflix does not have the late fee baggage of Blockbuster, and Netflix service is great--so great, you don't even think about it.
Watching movies may not seem to have much to do with economic development, but communities that don't have their eye on this ball will be losers later, in two different ways. High performance community-owned broadband is the only way some communities are going to get to watch movies over the Internet. Cable companies are just barely keeping up with the bandwidth demands now, but as more homes dump driving to the video store in favor of watching movies on demand, legacy cable and DSL networks are going to begin to influence where people WON'T live. That's right--young professionals don't want to live anywhere now where broadband is not available, and within a couple of years, they won't want to live in communities that only offer "little" broadband--that is, the low performance cable and DSL services.
So attracting and keeping the right kind of workforce is a community broadband issue. The second issue is how broadband is changing retail. Video stores have served as anchor tenants in retail shopping districts, as the stores provide a steady and predictable flow of people to a shopping area. As the video stores disappear, what happens to those retail buildings? What happens to the rest of the stores nearby that relied on that traffic?
In our broadband planning work, we continue to see too many communities clinging to a 1960s style of retail planning and economic development. Retail is going away entirely, but the combination of big box stores and the Internet has changed it drastically, and few places can lead with retail as an economic revitalization strategy--perhaps none can. Instead, communities need to think more broadly about how to put empty retail locations to new uses, including office space for entrepreneurs, start ups, and established white collar businesses. And the way to start that process is to begin placing duct and fiber in commercial and retail areas. Call Design Nine if you want help with thinking about your retail and economic development strategies.
Submitted by acohill on Thu, 12/24/2009 - 10:06
Some of you may have noticed that the search function on the site has not worked for some time. After struggling for months to get our hosting service to fix the problem, we have moved the site to a new server hosted by a different company. Not only is the site much faster, search now works. If you notice any problems, please drop me a note.
Have a great Christmas!
Andrew Cohill
Design Nine was selected as a Broadband Properties top 100 company in 2008 and 2009.
Designed by Design Nine, the nDanville fiber network has won the Intelligent Community Forum's Smart 21 award for 2010.
Design Nine provides visionary broadband architecture and engineering services to our clients. We have over seventy years of staff experience with telecom and community broadband-more than any other company in the United States.
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