Trying To Find The Sun

On a recent beach vacation I was sitting at a tiki bar, sipping a boat drink and trying to win as much schwag as I could in the DJ’s “Name that One Hit Wonder Artist from the 70’ and 80’s Contest.” When I went up to claim my prize - for identifying Eddy Grant as the singer of “Electric Avenue” - I mentioned to the DJ that Eddy Grant wasn’t truly a one hit wonder because he’d had some other hits in the US and UK and had actually been part of a band that had a big hit in the late ‘60’s. The DJ was dubious about the band, so I went back to my table determined to show him. Trouble was, while I could remember the song’s bass line and chorus, between the boat drinks and advancing age I couldn’t remember the name of the song or the band. So I whipped out my phone and debated between googling Eddy Grant or checking him on Wikipedia.

Wikipedia won. Why? Because I knew on Google I’d get hundreds or thousands of hits. Without some other data point to narrow the search, I might have to wade through dozens of entries to find the answer. If there was a Wikipedia entry, I’d get the answer within a couple of paragraphs because somebody had already put the information out there. I could use the wisdom of the experts (or at least those who cared enough to write an entry). It was the right choice. In 30 seconds, I knew that the band was The Equals and the song was “Baby Come Back.” (If you want to see the Equals performing it on Top of the Pops in 1968, check here.) The DJ was impressed when I went back up to enlighten him.

Why is the incident important? I think it’s a sign of how we are starting to trust and rely on freely contributed collective knowledge. The search engines use algorithms to try to create a collective wisdom about the usefulness of nuggets of individual knowledge found on the Internet. Wikipedia and wikis in general harness collective knowledge that is consciously contributed and subject to peer review. In my work, I use Wikipedia all the time as a starting point. I don’t rely solely on it, but it makes an excellent jumping off point. The governing rule, as Ronald Reagan used to say, is “trust, but verify.” (If you want to see the limitations of Wikipedia today, check out its entry for “trust, but verify.”)

Wikipedia is becoming more useful and accurate every day. Its continuing improvement can’t be good news for the business models of Google and the other search engines.

This is a man bites dog or “Paris bites John” story.

John McCain got a lot of free publicity for his ad last week comparing Obama to Paris Hilton and Britney Spears. It was a milder version of the Willie Horton attack ad that torpedoed Michael Dukakis.

But thanks to broadband and the Internet, the rules have changed completely. Willie Horton (or Paris) can respond. As of 3:30 p.m. EDT, Paris’s response has been viewed 3.5 million times in the 22 hours since it was posted. Unlike McCain’s ad, it will be on the web and available for viewing every moment from now through election day. By that time, the number of hits will be in the tens or perhaps hundreds of millions. I’d bet it will end up being the most important media piece of the campaign for the 18-30 demographic. John Stewart will be jealous.

It doesn’t matter whether you support McCain or Obama. For those who doubted the importance of the intersection of user-generated content and broadband, this ought to be all the proof you’d need. I’m not sure who should be more scared, political ad consultants or TV networks. And did I mention it’s a brilliant career move for Paris?

Now if I can just get her to do a testimonial for my website . . . If you want to see why she won’t, then just Google her name and mine together.

I’ve read the FCC’s press release and accompanying statements about its Comcast P2P network interference decision, and I’m as confused about it as everyone else. The decision itself hasn’t been released yet (and given the FCC’s track record may not be for weeks or months). But already it is being criticized as legally indefensible, internally contradictory, and a product of Chairman Martin’s political ambitions, his love for the RBOCs, or something even more nefarious .

Sure, the decision probably won’t survive an appeal. But the appeals process will not be expedited by the court, so we won’t have a decision until late 2009 at the earliest. That means at least 18 more months under this murky broadband net neutrality regime. So ignore the big legal picture for a moment. Look at the little pieces.

Fear, uncertainty and doubt have been sown among network operators. The cable incumbents are not happy, and the RBOCs (who were pressuring Comcast to do whatever it could to make this go away) are very afraid of the blowback. The FCC’s four internet freedoms have some teeth. Public interest groups will be encouraged to continue to monitor network operators’ activities and to file complaints at the FCC where warranted.

Comcast and other fixed networks will hesitate to implement new “network management practices” unilaterally. That development can already be seen in their negotiations with BitTorrent and others. If networks do implement unilateral blocking or slowing of certain types of traffic, they are far more likely to make their actions public immediately, since the FCC has put them on notice about the consequences of failing to inform customers of what they are doing. AT&T Wireless’s announcement that it can terminate (note it didn’t say it “is terminating”) customers using P2P applications over its network may be a trial balloon to see what the FCC will do. The FTC, ever protective of its jurisdiction, may well begin investigating network operators’ disclosures and activities under the FTC Act. From the point of view of most content owners, applications providers, competitive carriers and smaller ISPs, these are all good developments.

So like Jonathan Swift defending cannibalism, let me suggest that in future years this decision will be seen as a brilliant piece of strategery. Pundits will recognize that the FCC majority, its options limited by its own deregulation of DSL and cable modem services, found a path that benefited consumers, halted the possibility of broad unilateral action by the largest network operators and gave the FCC and Congress another two years to watch the broadband market develop and study the issues before making wise decisions. Did Chairman Martin have all of this in mind when he pushed the order through? Not a chance. But that just goes to show the power of the law of unintended consequences.

In an alternative universe, of course, John McCain is elected president, the Republican FCC majority decides to ask the D.C. Circuit for a voluntary remand and then withdraws the Comcast order, and sometime in the spring of 2009 the big network owners announce they are blocking P2P applications (but not their business partners’ applications that use similar amounts of bandwidth) and impose tiered bandwidth pricing for Internet access.

I’d bet those two names have rarely, if ever, been linked.

I had the good fortune to accompany my wife Mary, an artist, teacher and technology integration guru, to the Constructing Modern Knowledge seminar in Manchester, NH, last week. I spent the week working on my laptop and talking to clients from the hotel lobby and coffee shop while the educators kibbitzed, but I did go along on the field trip to MIT’s Media Lab and the One Laptop Per Child (OLPC) project. The highlight was a two hour discussion between Marvin Minsky and a small group of CMK attendees. I knew only a little about Minsky, including that he was one of the pioneers of artificial intelligence and neural networks (and a consultant on perhaps my favorite movie, 2001: A Space Odyssey). The topics ranged from education policy to religion (he’s not a big fan) to AI to sports and far beyond. Each of Minsky’s answers was provocative, usually challenging the questioner’s premises and turning the discussion in an unexpected direction. It was a riff on knowledge, not unlike a virtuoso performance by a master jazzman. Although Minsky would deny it, he clearly took pleasure in being an agent provocateur. But it worked. I walked away thinking about some issues in a different way.

Twenty minutes into Minsky’s riff, I realized where I’d seen it before. My antitrust class, second year of law school. The professor was Robert Bork, ten years ahead of his failed Supreme Court nomination. I didn’t agree with his view of antitrust or constitutional law (still don’t, for that matter), but I learned more there than in any other class I ever took. Bork, like Minsky, is a brilliant polymath with an absolute certainty that he’s right and a penchant for challenging the conventional wisdom (although both have become the conventional wisdom among many in their fields). What I learned from Bork’s class was that when you’re debating with people smarter than you, if you let them state the premises you’ll lose the argument every time. So you’d better focus on challenging their premises and assumptions, particularly the hidden or unstated ones.

It’s a lesson that’s served me well in practicing law (and arguing politics with friends). The value of questioners like Minsky and Bork is widely recognized in academia. The “real” world, including the telecom industry, could benefit from a few more people like them challenging the conventional wisdom.

I read Clayton Christensen’s “The Innovator’s Solution” recently. He made two points crucial to understanding what’s been going on in the telecom industry. First, as parts of any vertically integrated industry become more routine or modular, other segments become less integrated, and that’s where the value and the profits are created. New players enter the value chain at those points, and create new business models. Second, one way to develop a new business - even a truly disruptive new product or service - quickly is to target non-consumers of an existing service. Once non-consumers begin to buy the new service, the seller can quickly expand and improve it to take customers from existing service providers.

The pattern of industry change Christensen described has been going on in telecom in waves. Telecom was the ultimate vertically integrated industry for most of the 20th century. In the U.S., AT&T did everything from basic research to manufacturing to providing service. From the 1968 Carterfone decision through the 1984 breakup of AT&T, the industry was vertically dis-integrated by government action. Since then, modularization has continued through market forces and occasional government intervention (e.g, the 1996 Telecom Act). The most recent wave is the rise of VOIP and broadband since 2005. This has combined with what amounts to the outsourcing by large telecom carriers (the AT&Ts and Verizons) of their SOHO/ small and medium sized business sales channels to independent agents, CLECs (competitive local exchange carriers) and systems integrators. The result is that there are many new players that didn’t exist ten or even five years ago that are offering a variety of products and services to the vast middle of the market that lies between the Fortune 1000 and the household customer.

The interesting thing is the different approaches that these new competitors take. Some offer the telecom equivalent of the Kia providing the same services customers have been getting, but at a cheaper price and stripped of all the frills. Others sell Priuses, telecom services refining and combining the most useful of old and new technologies. A handful offer the telecom equivalent of the Tesla electric car (see http://www.teslamotors.com), new technology with lots of WOW!, but not really useful for day-to-day work. But in the end, they’re all selling cars (in telecom, just basic voice and data).

Few of the telecom competitors seem focused on developing new services that target non-consumers of advanced services. It seems obvious that whoever comes up with a service that combines basic voice and Internet access (data) capability with other useful services will succeed. The question is what those advanced services are and whether the disruptive provider will be a mobile network (fixed line networks by themselves can’t hope to offer the necessary innovation) or one of the software companies operating at the edge of the network, like Grand Central or another unified communications (UC) provider. In the meantime, there will be lots of money made by the sellers of telecom Kias, Priuses and Teslas.