by Dana Blankenhorn
Volume X, No. IX

This Week's Clue: Climbing the TV Barrier

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This Week's Clue: Climbing the TV Barrier
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ZDNet Open Source
Clued-in, Clueless

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For the Week of February 27, 2006

Back when the Internet was younger, and America was its leader, we laughed at Third World dictators who tried so very hard to restrict it. Most were trying to protect local phone monopolies, and the tax revenue those PTTs collected for the leadership.

Even before VOIP, e-mail could bypass these decades-old financial arrangements. People in these countries could see what prices were being paid elsewhere, and could connect with buyers and sellers in other countries for all kinds of goods and services. At first these were the things they were already making. Later product support skills became fungible, then programming skills.

It got a little less funny then.

Today American business is in the position of those Third World dictators. We have plenty of potential Internet bandwidth going into our homes to have two-way TV, unlimited phone service, anything we might want. But we can't get at it. Some think this is because the evil Bell companies are hoarding it all, and the facts back this up.

But I no longer think that's the case.

The real wall we have to climb is what Bruce Kushnick calls "The TV Barrier." That's the digital speed you need to exchange HDTV files in real-time. That sounds really fast, but your digital cable does this already. The only problem is that it's outrageously asymmetrical, and the future is symmetrical. As blogs (and an increasing number of TV shows) prove, anyone can be a star. Everyone deserves the chance, with the public - not Simon Crowell - as the gatekeeper.

The short version. Climbing the TV Barrier is a business model problem.

Think about all the money you're spending right now for services and content you don't need. Here in Atlanta, with its large local calling area, a base phone line costs nearly $60/month. (That's before long distance, which is still charged by the minute, and my calling plan has a $16/month minimum.) My cable bill comes to $75/month, and it's not an all-in package. I then spend $45/month for my Internet service. (I saved $5/month when I switched (against my will) from DSL to cable modem.) Then there's the cell bill - another $60 (if my daughter doesn't accidentally start playing with ring tones again).

What am I getting for my $230/month? From the cable, I'm getting a lot of TV channels I don't watch. Much of the phone bill is taxes, and the rest is mainly insurance against the cable going out. (I could switch back to DSL at any time -that's what I tell myself anyway.) The cell bill is locked into a "Calling Plan" that guarantees two years of cash to the company in exchange for a small discount on the phone - they will extend that any time I try to change my "Calling Plan."

Right, the Internet could replace all these services, and for a lot less. I could look at just the TV I wanted, with a fast enough connection. I hardly use the phone now anyway, and VOIP would take care of all my needs. With a WiFi cloud I wouldn't need the cell, right?

But look who gets screwed then. Not just the cable company and the phone company. It's Tellywood (Hollywood and television), plus the government. All those "junk fees" that raise your phone costs (and increasingly, cell costs) are tacked on by government, hiding its need for obvious taxes with non-obvious ones.

But the bigger problem is Tellywood. Movies are made and shows are greenlighted based not on the money coming in for success, but on the money that comes in for failure. Cable channels (and nearly everything is a cable channel now) comes with a guaranteed cash flow. You can budget against it. Put everything on broadband Internet and there's no cash flow to budget against.

Thus the dangers of having an increasingly-antiquated telecomm system are given short-shrift by the media. It's against TV's interests to talk about it, and the print guys are dieing because they failed to "lock in" revenues the way the TV guys did.

But what about the iPod, you say? What about the iPod? Yes, people are paying $1 per song for music they value. What about the music they don't value? And an artist can't really tell, when (s)he produces a 12-song CD, which tunes will really be hits and which misses. I've bought plenty of CDs for a tune or two and wound up falling in love with others.

So far, in other words, that's another cautionary tale.

Yet, like the housing bubble and the War in Iraq it's all unsustainable. It's a scheme, and we're all the victims.

What can we do about it, except scream?

The key, I think, is to devise business models that will pay for bad creativity as well as good. Then to accept that, like it or not, we're probably not going to save money on the deal.

From the consumer side, in other words, the answer is tiering. No, it doesn't cost three times as much to give you 7 Mbps downloads as 1.5 Mbps, but maybe you should pay that, for now. If I could get all the two-way Internet connectivity I could take for $200/month, dump my cell phone and regular phone line, dump my cable, just get a pipe with tons of bits for $200/month, I'd take it. So should you.

Now the question occurs, what do we do with the money? We can't just let it sit in the Bell or cable coffers based on some promise to send us fiber someday. Been there, done that, promises violated, won't get fooled again.

The best answer is a "content fund." Register with the folks who are holding the money and you'll be paid based on the traffic that passes through your pipe. A sliding scale - writers need to eat as well as sound guys, and it is hard to write something good. But a good yarn still takes just one writer to write, a good song maybe a dozen people (all told) to produce, and a TV show (any show) literally dozens of people. Sites that review, or point to, such shows might rake off a little, too. You get paid to link, but if no one comes to your site and sees the link you won't get many clicks, so there's an incentive for you to be clever, too.

It's not a perfect system, I know, but it's much better than what we have now. Something like this is necessary, far more important than fiber in the American Internet diet.

But I'm not na´ve enough to think that anything less than a crisis will cause people to seek out this new business model, with all its uncertainties, as long as they can extract monopoly rents from the present system.

So the housing crisis will come, and the budget crisis will come, and all the political crises of the next few years will come. At the end of that a much poorer, more humble America will be looking for a way forward.

This is it.


Shameless Self-Promotion

I've got a new job. I'm now editor of Atlanta, a Web start-up aimed at building a community Web platform with a real business model. I'm also all alone in writing the Open Source Blog for ZDNet. (When this started there were three of us.)

My last non-fiction book, "The Blankenhorn Effect" won the Computer/Internet category in the 2003 Independent Publisher (IPPY) awards. Write me for a PDF copy of my latest novel, "Baptists are for Dunking."

On my Mooreslore blog I've written a new novel, "The Chinese Century." It's a story told in real-time, with real characters, but entirely fictional, dealing with the consequences of the falling dollar. I'm beginning a sequal, "American Diaspora," exploring the themes of the first book but with more fictional characters. It's a true alternate history, but set in the present day.

You are encouraged to forward this newsletter widely. And if you have trouble subscribing let me know. Remember: it's journalism that keeps the Clues coming...


Best of the Week

Dana's Quick Writing Course

I've been writing for over 40 years, professionally for 30. If you're interested in doing the same, here's a simple four-step process that will make your writing all it can be.

Blog Pimple About to Pop?

Slate has another of those "blog bubble about to pop" stories out. As a business story it may be 100% accurate. As a barometer of blogging itself, it's dead wrong.

Show Trial?

During Mao's Cultural Revolution, show trials were used to cover-up the evils of the regime. Innocent parties were brought in, tried without justice, then either killed or sent to "re-education" camps. The U.S. House held its own version of such a trial today, only without the education.

Yahoo Gets Lost in Translation (Badda-Boom, Badda-Bing)

In the wake of a scandal over the fact its Chinese affiliate cooperated with authorities to silence dissidents, the story Americans were told by Yahoo today was that it will do everything it can to fight Web censorship. That's not the way the story was carried in China.

The Phony Fon Scandal

By ignoring what blogging is about, The Wall Street Journal has created a scandal out of whole cloth.



GOP's Cyber God

Utility Day at the Gold Dome

Voting Machine Opponent Claims Harassment

Leg Offers Big Bucks to Big Business

Nothing Divides GOP Like Water

House Passes Stick to your Mule Act

Ethics Needs a Supplemental

Naming and Shaming

Perdue Makes Another Run at Church-State Marriage

Nationalizing Local Bills

ZDNet Open Source

Don't Cry for Me Oh mySQL

All Open Source is Doomed

My What Big IP Teeth Open Source Has

How Corporations Accept Open Source

Linux is No Tougher to Manage Than Windows

The Oracle "Monopoly"


Clued-in, Clueless

Clued-in is Bob Frankston. Great minds keep thinking.

Clueless is Apple invoking the DMCA to stop discussions about its operating system. That just moves the discussion overseas.


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