by Dana Blankenhorn
Volume VI, No. IX
For the Week of March 4, 2001

This Week's Clue: Moore's Law Triumphant

Everyone knows Moore's Law. Chips get twice as fast (or half as cheap) every 18 months. This has been a fact of silicon life for 35 years. Microsoft hid this from us by adding complexity to Windows so users had to replace their machines (and operating systems) every few years to take advantage of the "latest and greatest" (which is always late, and often not that great).

The WinTel game has, for 20 years, kept the economy from feeling the full effect of Moore's Law, which is spelled d-e-f-l-a-t-i-o-n.

The rise of the Web has shown us the deflation that was always there. My 333 MHz laptop works fine, even while 2.2 GHz machines are available at popular prices. My upgrade has been to get broadband, a faster connection to the Net than available via modem.

And that's the rub. Getting broadband into neighborhoods through DSL or cable costs billions of dollars, we're told, money that telephone and cable operators can only find by regaining monopoly rights over their subsidized lines and pretending "competition" means you get to choose between them.

They're not evil. They're just basing their thinking on the 30-year depreciation schedules they've used since the 19th century to deliver their services. Word up: the 19th century is over. Welcome to the 21st.

The key law for the 21st century is Moore's Law. It's not a scientific law, or even an economic law, but an engineering law that may (eventually) be repealed. And there's more to Moore than meets the blinking eye. A lot more. Here are the latest findings, and what they mean:

1. Moore was a pessimist.

"No one in the volume PC space today needs a 1-GHz processor," said analyst Keith Diefendorff  in 2000. "It's just useless." Moore thought his Law would "hit the wall" after 1995. Instead the pace of improvement has accelerated.

2. Moore's Law applies to bandwidth.

This is sometimes called "Nielsen's Law," after usability guru Jakob Nielsen, who coined it back in 1998. His pronouncement drew skeptics.

But then Bell Labs discovered "Wave Division Multiplexing". Fiber cables were designed to send a single white light down the line. The lab found colors. By 1999 Bell was able to transmit over 1,000 separate colors over fiber in a lab. Change the electronics at each end of a link and you change its capacity. Those electronics are subject to Moore's Law. Thus fiber capacity is subject to Moore's Law.

3. Moore's Law does not apply to copper.

Moore's Law involves semiconductors, not conductive materials. The wires owned by telephone and cable companies, and the equipment they attach to, are all based on copper. DSL did allow a jump in copper capacity by linking two identical modems on a line, but DSL is expensive to deliver, and its capacity diminishes with distance. The cable upgrades needed for broadband service involve running fiber toward thick copper lines, which still suffer the limits of their breed. Only when fiber runs to every home can wires compete, but then they have to extract the cost of all that fiber from customers over a 30-year life. The economics doesn't work.

4. Moore's Law applies to radios

This is the most important fact of all. You can see it in that disposable cell phone that cost hundreds of dollars a few years ago. Data radios are the same way, getting better and cheaper with time.

A few years ago we assumed that each cycle of frequency could take one bit per second of traffic - 1 b/s/h. Not only does that appear inaccurate, but there are other technologies available to increase wireless capacity. Spread-spectrum technology (already used for CDMA cellphones) let many radios share the same frequencies without interference. Cellularizing and sectorizing, using low power equipment, can make the data-carrying capacity of a radio network practically infinite.

What's needed to take advantage of this is better equipment, and Moore's Law guarantees its arrival. Instead of putting $1,500 into wires (the present estimated cost of delivering broadband to a home), tomorrow's $300 radios can bring broadband to the neighborhood. You upgrade by changing radios. A little engineering can bring data signals from subscribers to fiber runs at very low cost. And the cost is just going to get lower.

5. Moore's Law is Irresistible

This is the most important point of all. Governments can't repeal Moore's Law. Corporations can't fight Moore's Law.

This means all the actions of the Powell FCC aimed at protecting wired monopolies are doomed to fail. Keeping ISPs off Bell wires won't protect the Bells. Even the current attempt to force 802.11 providers to subsidize their wired competitors, by "contributing" to a "universal service fund" (which radios make unnecessary) will only delay the inevitable.

The value of wired networks is going to hit zero long before the wires can be depreciated. This will hit the markets like a dozen Enrons going off at once. There's no way to prevent it - those with a Clue prepare for it.

Just look around you. AT&T Broadband cable, upgraded for digital service, goes down my street, yet an increasing portion of my new neighbors have satellite dishes, including oblong dishes for broadband data. Why? Because it costs less - everyone gets upgraded when the satellite is changed, and satellites are subject to Moore's Law. Cellular calling plans already cost less than those for wired phones - why have a wired phone?

The right public policy for Moore's Law is to let the market (and science) work its will. Increase the amount of "unlicensed" spectrum available for things like 802.11 and make the FCC more of an arbitrator where cases of interference can be decided. The current policy of the Powell FCC, aimed at protecting incumbents and monopolists based on old assumptions, is as wrong as was the Kennard policy of trying to "auction" frequencies like they were train rights-of-way.

Your Clue is to get behind Moore's Law, now, in communications as well as computing. Don't look back.

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You may have noticed that I've increased my coverage of 802.11 and wireless broadband technology lately. It's the coming thing. The markets for e-commerce, e-advertising and e-content won't boom again until we get massive acceptance of broadband. Wireless technologies offer the promise of cheap, universal (indoors and outdoor) broadband, with huge implications for every technology market. So you'll see more of this from me in the future - a lot more.

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This month I opened a new market for my articles with Ray Fix of Wildwood Marketing. The first one appeared here . More exciting deals are on the way. You can join the A-Clue.Com discussion at I-Strategy , our shared e-mail digest produced with Adventive.Com. You can also read me at ClickZ , BtoB , and Boardwatch . I'm also on the mast-head at Bottom Line Personal , a great print newsletter.

Remember that it's journalism that keeps the Clues coming...

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Takes on the News

Major Moves in Wireless Broadband

There are two keys in wireless broadband this week. Major equipment vendors are introducing products to the space, and they're getting serious about reaching fiber, not just extending DSL.

Nokia made the big splash with its multimode radio card. The Nokia 211 combines General Packet Radio Service (GPRS), High Speed Circuit Switched Data (HSCSD) and 802.11 service in one unit for a laptop computer that runs on anything from Windows 98 through XP to Linux. (Just plug it into the PCMCIA slot.) The target market consists of corporations with Virtual Private Networks (VPNs).

GPRS, which runs packets at speeds to 40.2 Kbps, and HSCSD, which runs at 42.3 Kbps, are the two main technologies being offered for faster mobile data by cellular phone companies. Glenn Fleishman and Alan Reiter, the two best bloggers in this space, call this "Holy Grail" time, "the beginning of the beginning of cell telco/WISP alignment." My Clue from all this is that cell companies need WISP more than WISP needs cell, and if the equipment makers can drive this message home, so much the better.

To my mind Western Multiplex' Lynx announcement may be more important. Lynx OC-3 is a wireless bridge running in the unlicensed 5.3-5.8 GHz band that can zip data point-to-point at 155 Mbps at distances to seven miles. This means you could hop directly from a fiber loop to a mesh of 802.11 antennae, bypassing telco networks entirely and delivering fast connections at low cost.

Western Multiplex is pushing this gear on hospitals and corporate campuses as a way to jump from their internal networks to nearby fiber runs. I think this could really jump-start the WISP market.

Copyright vs. Speech

The final legal collision between copyright and speech is here. The U.S. Supreme Court decided to take on the constitutionality of the Bono Copyright Extension Act.

This matters a lot. The Bono Act (named for the late ex-Cher husband (and Congressman) Sonny Bono, not U-2 singer Bono) extends copyrights practically to infinity (life of the creator plus 75 years sounds like infinity to any reasonable person), allowing Disney to keep Mickey Mouse private. What's wrong with that?

What's wrong with it is it transforms copyright from the "limited" right envisioned by the framers (to encourage the creation of more for the public good) into a property right that can stop other work from being created (try drawing a new black mouse cartoon). But if nothing is in the public commons then freedom of speech becomes a toll booth. You may want to look at the filings.

The importance of this case is multiplied by efforts of copyright holders to overturn the Betamax case, by declaring that Personal Video Recorders like TiVo have "crossed a line" in letting people skip commercials. Combine the two cases - perpetual copyright plus absolute rights to control how copyright material is used - and you see the First Amendment implications.

You also see why Supreme Court nominations matter.

Zigbee: A Remote by Any Other Name

A host of large vendors have given a new name to the standard formerly called Home RF Lite - Zigbee. This is becoming the "consumer electronics" glue (as opposed to 802.11 - the "computer glue") to the electronic home. It will move instructions, not shows, so it can be fairly slow - no faster than 115.2 Kbps. But it could also be standardized on a single chip, making it a successor to current remote control devices. Since it would be a radio rather than an infrared link, it wouldn't require line-of-sight for activation.

There's nothing wrong with Zigbee per se. It would cost just $2 per unit, it would be hidden from consumer view, and as people replace home electronics it would in theory become ubiquitous. What it lacks is a reason for being. There's no central user interface, no functionality anyone feels they must have. It's a solution in search of a problem, which would be defined by an application. This means it's an opportunity for someone.

Clued-in, Clueless

Clued-in is Chilling Effects, a new Electronic Frontier Foundation site that helps users fight cease-and-desist letters. Of course, it takes more than that sometimes, which is why New York Attorney General Eliot Spitzer had to sue Network Associates for attempts to prevent negative reviews of its software as part of "license agreements" on its disks and Web site.

Clueless are the selfish (mostly Murdoch-owned) media trying to stop the BBC's online efforts, calling them "unfair competition." The BBC's independence and integrity are vital to the world. They keep Great Britain relevant, in fact they are its foreign policy (and thus great value-for-money). The BBC is vital as a broadcaster, and vital to the online world as well. Gutting it would be unilateral disarmament in the war of ideas.

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