Communications

Customer owned fiber in Ottawa

Arstechnica had a nice article yesterday by Timothy Lee entitled The Long Tail following up on Derek Slater's article last week on the Google Public Policy Blog entitled What if you could own your Internet connection?  Both articles are about a pilot project in Ottawa.

The "tail" in Timothy's article is the "last mile" (or as I prefer, "first mile") fiber connection from individual homes to a network peering point or other aggregation point where individuals can then choose from among multiple competing ISPs.  The importance is, as Timothy Lee puts it,

Without the expense of rolling out last mile infrastructure to every home, many more ISPs could afford to serve a given neighborhood by running wiring to the peering point, leading to more competition and lower prices. Perhaps best of all, the growth of customer-owned fiber could make debates over "open access" and network neutrality moot, as robust telecom competition should prevent the worst of the monopolistic behavior exhibited by telco and cable incumbents.

Typical costs run below $3000 per household depending on density and the number of households that agree to participate.  Considering the cost of a home, this is one investment that should easily increase the value of the home, most likely by much more than the cost!

Mentioned by Derek although unmentioned by Timothy is the most important person here, Bill St. Arnaud, Chief Research Officer at CANARIE, a Canadian nonprofit that focuses on network infrastructure.

Bill is driving the Ottawa trial and is the leading proponent of condominium fiber as described in his presentations here.  His work has also had a major impact on my thinking about "layer zero" competition.

Either way, articles on the Google blog and at Arstechnica will help promote this excellent concept and, hopefully, improve the quality of discussion in policy circles.

A year of travel history on Dopplr — Brough moves as fast as a chicken

In May of 2005 I joined the beta for Dopplr, a Web 2.0 travel site.  Of 2 or 3 travel sites I've played with, Dopplr is the one I've come to use.  It's the source of the travel schedule at the bottom of the right column in this blog and now it's the source of some interesting travel history as listed in my public profile.

But despite visiting all those cities and taking all those pictures, it appears my average velocity was fairly modest.

One patent justifies Microsoft's interest in Yahoo

I've watched coverage of Microsoft's bid for Yahoo! and the related maneuvering between Google and Yahoo!.  The explanations are not very convincing.  Microsoft doesn't need Yahoo's search technology or their morale-impacted work force.  Yahoo's search market share continues to decline and there's little of strategic relevance in the rest of their business.  What's the attraction?

Usman Latif has the first interesting explanation I've seen, which he explores in depth in a ten page article at Techuser.  The issue he uncovers is US patent 6,269,361 on the bid-for-position paid-for search mechanism that funds Google and indeed all of the Web 2.0 phenomena.  Patent '361 was issued to GoTo.com, later called Overture, in 2001.  Yahoo! acquired Overture in 2003 and used the '361 patent in litigation with Google shortly thereafter.

Usman is uniquely positioned to recognize the importance of this patent as he has followed paid-for search patents for years and has previously written (in 2005) about the strange settlement between Google and Yahoo, reached on the eve of Google's IPO.  Google negotiated a perpetual, royalty-free license to this patent, but it is not irrevocable!  Usman's surmise is that Google's license would be revoked if they sue Yahoo over any other intellectual property.  That's a commonly requested clause in such agreements and, on the eve of their IPO, one that Google likely had to submit to.

If you are at all interested in patents or in the current Microsoft-Yahoo-Google machinations, take a look at Usman's paper.  It makes more sense that all the fluff that's been written in the financial press.

Another analyst under estimates mobile subscriber growth

From a recent press release

Worldwide mobile subscriptions will rise from 3.9 billion in 2008 to 5.6 billion in 2013, according to a new Strategy Analytics report.

Sorry guys, you're forecast has fallen into the same trap as almost all the five year forecasts I've seen since 1995.  About the only credible analyst's statement in this area is one by Mark Newman, head of research at Informa, who said (in 2007):

The mobile industry has constantly outperformed even the most optimistic forecasts for subscriber growth.

The problem is analysts' forecasts are consistently pessimistic.  Consider Strategy Analytics' numbers.  They project 1.7 billion new subscribers in 5 years (60 months).  By every measurement I've seen, mobile subscription growth has been over 50M per month at least since 2004-2005.  For example, 2 billion subscriptions in September 2005 and 3.3 billion subscriptions in November 2007 comes out at 52 million new subscriptions per month.  If you believe Strategy Analytics' forecast of 3.9 billion by the end of 2008, that's 54 million more per month for the balance of 2008.  If we merely sustain current rates, we will hit Strategy Analytics' December 2013 forecast in just 31 months, i.e. in July 2011.  So they expect current growth rates to decline rather substantially in coming years. 

Why would they think this?  I haven't spoken with anyone at Strategy Analytics, but in discussions with other analysts over the past ten+ years, a frequent answer is "current growth rates will have to slow as we're running out of people who can afford mobile phone service."  Wrong!  This is the view of someone who doesn't understand Moore's law.  Whether it's transistor density or wireless performance, innovation drives exponential improvements in price-performance.  Per-capita GDP is improving slowly, but the cost of mobile phone infrastructure and mobile handsets is dropping substantially every year.  Today, those at the bottom of the pyramid are in a position to at least use a phone and increasingly to acquire their own mobile phone.

In addition to innovation ― at work since the introduction of mobile services ― political obstacles are falling in many countries.  Since 2000 it's become clear, mobile phone adoption brings significant economic advantages, and the best way to get mobile phone adoption is to attract multiple competitive mobile phone operators to your country.  Increasingly, even the most backward dictators are realizing there's more money to be made taxing multiple competitive mobile phone services than in keeping all the profits from one government phone company.  So country after country are encouraging competitive mobile phone operators and allowing substantial foreign investment.  This political trend serves to increase mobile phone adoption rates.

Of course, adoption rates will saturate at some point.  When might that be?  The best evidence we have is for 2G and 2.5G services in developed countries.  It appears things slow down a bit around 120 subscriptions per 100 people.  Of course this may change with 3G.  It's too early to tell.

Technology adoption generally follow an S-curve:

If saturation is at 120 or above, and we're currently around 50, we have at least another five years of rapid growth.  Perhaps a five year forecast made in 2013 will be justified in projecting a decrease in adoption rates.  But by then we'll also understand the impact of 3G.  Who knows? 3G may drive things even faster. 

Or perhaps by 2013, I will have a single mobile data subscription for a gateway device on my body, that in turn provides connectivity for all my other devices.

In any event, I expect 5.6 billion mobile phone subscriptions by the summer of 2011 and more than 6 billion by mid 2012.