In Order to Have a Free Market, You Need to Have Choices

One of the great things about a “Free Market” is that if you don’t like the company you are getting services from, you can always go somewhere else. 

Well, except if you’re dealing with Internet Service Providers and live in North Carolina.  Then you’re pretty much screwed.  You see, Governor Bev Purdue says that she will neither sign nor veto H.129.  Now for those who do not know, H.129 is a bill that would put restrictions on cities that currently provide internet service to its citizens (Wilson, Salisbury, Morganton, Davidson, and Mooresville), and would significantly hinder any efforts by other cities to pursue their own municipal internet services. The obvious winners in this action are Time-Warner cable and AT&T, who have spent a lot of money improving their services, er, buying politicians, er, let’s just say, they’ve spent a lot of money over this. 

Some of the provisions in H.129 state that cities:

• Shall provide nondiscriminatory access to private communications service providers on a first-come, first-served basis to rights-of-way, poles, or conduits owned, leased, or operated by the city unless the facilities have insufficient capacity for the access and additional capacity cannot reasonably be added to the facilities.
• Shall not use city resources that are not allocated for cost accounting purposes to the city-owned communications service  to promote city-owned communications service in comparison to private services or, directly or indirectly, require city employees, officers, or contractors to purchase city services
• Shall not subsidize the provision of communications service with funds from any other noncommunications service, operation, or other revenue source, including any funds or revenue generated from electric, gas, water, sewer, or garbage services.
• Shall not price any communications service below the cost of providing the service, including any direct or indirect subsidies received by the city-owned communications service provider and allocation of costs associated with any shared use of buildings, equipment, vehicles, and personnel with other city departments.

The bill ensures that companies like Time Warner Cable and AT&T will continue to be the dominant players in most North Carolina markets, even with higher pricing and speeds that often lag far behind what cities themselves can provide for its residents.

Never mind the fact that these municipalities decided to vote to band together and provide its own municipal services.  And why did they do that?  Because the Internet service providers were dragging their feet and underserving the market.  The community did not have a choice that was fast and inexpensive, so they created one.  And because they are offering their community an alternative that is better, the telecoms run and pay off politicians to curtail it. Because as we all know, municipalities should not have an “unfair advantage” over the private sector.  In this case the unfair advantage is a service that is better, faster and cheaper.  You know, those same arguments that are used when a government decides to outsource a municipal service to a private company. 

Funny how that works.

I Will Not Be Ignored, Steve…

Q: Steve,

Could you please explain the necessity of the passive location-tracking tool embedded in my iPhone? It’s kind of unnerving knowing that my exact location is being recorded at all times. Maybe you could shed some light on this for me before I switch to a Droid. They don’t track me.

A: Oh yes they do. We don’t track anyone. The info circulating around is false.

The hew and cry that has circulated around the fact that the iPhone is indeed recording your approximate location has increased in the last few days, and during this time, Apple has kept relatively quiet.  So someone decided to ask Steve directly.  And as always, Steve’s brief answer asks more questions than it answers. 

Of course there has been the blowback that Android does it too. Yes, Android has been shown to also gather location information, but the database is limited to a much smaller list of entries and is regularly wiped by the system. But to use Steve’s own logic, Google is not tracking you either. 

So, no one is doing anything with that unencrypted by default database on my phone showing basically where I’ve been.

So, why is it there?

Of course all of this could easily be bypassed with some simple common sense.  Over the last ten to fifteen years, our privacy has morphed due to all the wonderful little gadgets out there that allow us to be the attention whores we have become.  Some of us, however, still cling to the notion that what I do, where I go and what I think is no one’s business but my own.  And there is a large number of us that really do not like the idea that people, companies, and governments are just getting bits and pieces of our lives without out immediate knowledge.  So I propose to all companies out there a simple solution.  You want to know how I am living my life?  You want to know everything about me, even the bits you really didn’t want to know? 

Pay me.

Money soothes a lot of psychic wounds.  You offer enough cash and people will allow you to set up cameras in their bathroom.   Call it “The Magic Christian” effect.  After all, Steve, you are making money off knowing more about me; all I am suggesting is a real time partnership.  You pimp me out to as many companies as you want, and I will live my life like a Kardashian.  You want to know more, pay me more.  I know, why buy the cow when you’re getting the milk for free, but time’s are changing, Steve.  The more people come to dislike the fact that this is being done without their knowledge, the more my little scenario will make good business sense. Why face a revolt, especially in times like these? 

T-Mobile Bobsleds Into Facebook

If you’re T-Mobile, you can either sit and wait for the US Government to OK the sale between you and AT&T or you can actually do something big.  T-Mobile opted for Big.  As in Facebook’s 500 million users big.  And Skype may have taken the mortal hit because of it. 

You see, today, T-Mobile announced their new Facebook application, Bobsled.  Teamed with developer Vivox, Bobsled is a web-based voice chat app that runs in Facebook .  That’s right, this lets you start voice chats with your Facebook friends from within Facebook’s chat window. All you need is a mike and speakers. You can leave a voice message for your friends and family when they are not available. You do not need to have Bobsled in order to receive a voice message. Did I mention this was free? And since approximately 88 percent of Facebook users have said that voice chat is something they want, that’s a lot of users.

How does it work?  The app is natively integrated into Facebook’s chat system. When you pull up a Facebook chat window, you can see a phone icon. If you click on that, you can call your friend. It’s instantaneous. I’ve been playing with it this afternoon.  The call quality is OK. 

So what does this mean for Skype? A previously announced partnership between Facebook and Skype has left many people expecting the two would be taking care of intra-Facebook calls, which makes the announcement by T-Mobile all the more interesting.  Apparently, someone wasn’t moving fast enough.  A possible 500 million plus users, and you know that T-Mobile is going to expand into video chat, the ability to place VoIP calls to mobile and landline U.S. numbers, and apps on all devices.  T-Mobile appears to be getting aggressive and fast.  This does not bode well for Skype. 

But besides the business of business, this is a nice to have. 

Somewhere Over the Google Rainbow

Google has finally announced the winner of its1GB fiber-to-the-home network extravaganza.  The winner is Kansas City, Kansas.

Google announced in February, 2010 that it would build and operate its own fiber test network.  Over 1,000 US town applied.  There were all kinds of ways to get Google’s attention.  Google plans to start building the Kansas City network later this year, offering service to residents in the first quarter of 2012. Pricing is said to be “competitive”.

So how did Kansas City do it?  First, KC had a lot going for it in the competition.  But, if you read the story in the Kansas City Star, it speaks of “staying below the radar and keeping the team very tight”.  It talks of confidentiality agreements.  It meant being secretive and not letting anyone know about it until the very end.  Because Google wanted it that way.

Excuse my progressive side here for a moment, but basically, the government of Kansas City was as transparent about this as a brick wall.  This is one of those deals that could be seen as having been done in a back room without any input from the people.  Oh, wait, that is exactly what happened.  The fact that not even executive assistants were clued in as to what was going on should give people pause.  This is government.  These are officials elected by the people to do the people’s business.  Shouldn’t the people get to know what is going on before the announcement?  The fact that this is a great win for a great city notwithstanding, the point is that if the deal turns out to be a proverbial pig in a poke somewhere down the line, what do you do?  You were not invited to the deal making.

But we all know that Google does no evil and therefore, this should be seen as a golden ticket to the chocolate factory.  But it is not.  It is a deal between a corporation and city and county government.  There were more than enough cities out there willing to be up front and honest about what they were doing.  They didn’t win.

Apparently being open about doing business is being evil these days.

And Then There Were Three (for now)

Is it really surprising that AT&T’s plan of innovation includes buying out T-Mobile, their competitor in the GSM arena?  As Om Malik points out in his post about the merger:

T-Mobile has been pretty experimental and innovative. … AT&T, on the other hand, has the innovation of a lead pencil.

So what does this mean, other than the probable demise of some really great commercials featuring Charles Barkley?  Let’s look at this, shall we?  This leaves AT&T, Verizon and Sprint as the three major wireless companies in the US.  There are smaller companies out there, but we’re not talking about them.  Three major companies.  For the whole US.  Don’t like AT&T?  You would have Two other major choices.  So much for that invisble hand

Now before we go any further, let me point out that we have all ready heard AT&T say that in no way would this affect prices.  As their press release said so quickly:

“The U.S. wireless industry is one of the most fiercely competitive markets in the world and will remain so after this deal. … The U.S. is one of the few countries in the world where a large majority of consumers can choose from five or more wireless providers.”

Only one small problem with that. It always seems as if less competition allows companies to drive the price up whenever they please, since there is no incentive for them to keep prices low.  T-Mobile USA has been fairly aggressive in offering cheaper voice and data plans which has kept the prices in the market low enough. That thorn in AT&T’s side will be gone.  After that, where are you going to go?  Verizon?  Why? They will be following suit with the same excuses as AT&T because suddenly they can.  Sprint?  Possibly, but for how long before Verizon buys them?  Cricket?  US Cellular?  Pardon me while I laugh, French-like at you. 

No, the only real winners here are AT&T and Deutsche Telekom.  And given the climate in Washington, this deal will pass.  It may take a few months until all the screaming from consumers dies down, but it will indeed pass.  So enjoy the Barkley commercial while you can.

Reach Out And Cap Someone

Oh, AT&T.  The company that gave us Ernestine Tomlin’s famous line “We don’t care, we don’t have to.  We’re the Phone Company” is at it again.  If you stream over Netflix, expect to be pissed off, because this really applies to you.  If this goes forward without a huge fight from consumers, expect every other telecommunication an cable company out there to follow suit. 

According to DSL Reports, AT&T will be sending out notices this week informing their customers that starting in May, the company will be implementing a new 150GB monthly usage cap for all DSL customers and a new 250 GB cap on all U-Verse users.  This is how it will work: only users who exceed the new usage cap three times — across the life of your account, not per month — will be forced to pay these new per byte overages. Overages will be $10 for every 50GB over the 150 GB or 250GB limit they travel. 

The company says the caps will only affect about 2 percent of their DSL customers, asserting that the average customer uses about 18 GB each month . A statement AT&T provided to GigaOm also noted that “importantly, we are not reducing the speeds, terminating service or limiting available data like some others in the industry.”

No, nothing like that.  By the way, the average High-definition movie is around 3GB.  So if you watch one HD movie per evening, you’re taking up over half of your allotment per month.  If you have a family, that could start to add up.  Quickly.

Keep in mind that AT&T is an investor in bandwidth-intensive services like OnLive’s HD game streaming platform. And of course included in that bandwidth cap are all those advertisements that people slog through in order to get what they need over the net.  But the predominant question that DSL Reports asks is the one we know the answer to:

…does AT&T scale these caps and overages to accommodate for the dropping cost of bandwidth and hardware moving forward, or will they bend to inevitable investor pressure and continually tighten the metered billing noose?

If you don’t know, ask Ernestine Tomlin.  She’ll be more than happy to answer your question.

Net Neutrality – Put Up (Your App) or Shut Up

A few weeks ago, the FCC established Net Neutrality Guidelines.  While landlines were affected, wireless (read the more lucrative business) was left unscathed. 

But don’t think that the fight is over.  Far from it.  And so, the FCC is looking for help.  From us.  Wednesday, the FCC announced a competition for apps that will check if mobile carriers are blocking online video sites, slowing down VOIP services that compete with them or are monkeying around with the sites a user is trying to visit.  This certainly beats spending millions of governmental dollars on such a thing, and allows those of us in the community who can do this to do this. 

The Open Internet Challenge is asking for submissions from two groups: developers, who can create apps that measure Internet openness, and researchers, who may want to submit academic papers analyzing ways to measure and police Internet openness.  As FCC Chairman Julius Genachowski in a statement:

“This challenge is about using the open Internet to protect the open Internet. Our goal is to foster user-developed applications that shine light on any practice that might be inconsistent with the free and open Internet. Empowering consumers with information about their own connections will promote a vibrant, innovative, world-leading broadband ecosystem.”

The winners, chosen by a public vote and a select panel at the FCC, will receive a free trip to the FCC’s headquarters in Washington D.C.. They will present their work to the Commission and receive an FCC Chairman’s reception. The winning apps and papers will also be published on the FCC’s website.  An airline ticket dinner with the FCC Chairman and a hotel room for a couple of nights.  Pretty inexpensive way to do this. 

While empowering consumers with improved tools to better understand the connections they’re buying is perfectly fine, those tools won’t mean much if the FCC doesn’t enforce infractions.  But that is another story for another time.  In the mean time, you have until June 1, 2011 to submit your ideas.  Have fun.