by Dana Blankenhorn
Volume X, No. XXXV

This Week's Clue: Taking It to the Streets

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This Week's Clue: Taking It to the Streets
SSP (Shameless Self Promotion)
Best of the Week
Voic.us
ZDNet Open Source
Clued-in, Clueless
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For the Week of August 28, 2006

Over the last few years, while America has been obsessed with politics and war, Moore's Law has remained in the background, working its magic.

Chips are getting faster. Radios are getting better. Optical fiber and disks get more powerful. Hard drives get bigger, the cost of storage continuing to plunge.

Thanks to open source we're even starting to see some progress on software. Not that software is any easier to write. But by making their development process transparent, open source companies can produce new, well-tested versions more quickly than their closed-source rivals, who have to rely on a beta test and QA process.

The chief bottleneck in this whole virtuous system remains the duopoly of cable and telephony. AT&T and Comcast continue to raise prices for the same services, using that money to buy other companies and pay down debt, rather than increase their Internet bandwidth. Instead, they hoard that bandwidth, define it as "services," (TV, telephony) and keep squeezing in Washington, in state capitols, in municipalities to maintain that shared monopoly.

Thanks to the Bush Administration they have been remarkably successful in this. Some states have even passed laws banning municipalities from competing with the duopoly, from delivering to citizens the bandwidth they need to grow. We're now down to 3 Bells, with the pending gobbling-up of BellSouth, and wireless spectrum is still being auctioned off into the same small number of hands, which can reduce that number further by simply buying one another with monopoly profits.

Yet Moore's Law survives. It thrives. It moves forward, maybe not here, in our telecommunications market. But it thrives.

Eurotelcom reports on something amazing happening in the little town of Hillegom, in the Netherlands. A company called Lijbrandt, owned by construction magnate Dik Wessels, has been digging up streets and laying fiber directly to homes for 1,200 Euros/home about $1,500.

Think about that a moment. At $100/month for a package of TV, telephony and fast broadband services, you can pay off that investment in under two years, even if you get yourself a big office with a gorgeous secretary who can't type and lets you smoke fat cigars. (I presently pay $150/month for a poor imitation of those services.) Forget the services, you can easily get $100/month for 20 Mbps symmetric bandwidth, from home consumers, who can then use it to create their own cable and telephony, customized to their individual tastes. And with fiber, you can increase that speed at a stroke.

Once Lijbrandt lays this fiber, it offers a better deal than incumbent telcos and cable operators on the same bundle of services. This "overbuilding" has a market share in Hillegom of 73%, according to the Dutch paper Trouw, which headlines this as "the Waterloo of KPN," the local equivalent of AT&T. Wessels, meanwhile, is expanding his operations, and looking leery at a KPN come-on to partner-up. Since they want a fortune to put the streets back together he suspects a rat (quite rightly).

This is a technology story. This is a business story. Most important, it's a story that can be replicated anywhere. I don't know exactly what Wessels is doing to keep his costs down (a recent network there sold for 1,700 Euros per home, about 50% more than it costs him to build). The point is that technology breakthroughs aren't always where you expect them to be. They're not just in the fiber. The benefits of increased computer capacity can be used to create breakthroughs in other areas, like construction.

This too is a virtuous cycle. More bandwidth, more computing capacity, means breakthroughs in every direction, even in areas where you thought progress was settled.

Just look around you. Breakthroughs are coming to market all the time. Magic Erasers. Four-headed shavers. Higher-mileage, cheap-to-make cars like my Toyota Scion.

The cost of failing to keep up technologically does not just mean losing share in technology. It means fewer breakthroughs in all areas.

But breakthroughs can be imported, not just exported. There is nothing to stop someone from licensing Wessels' technology and bringing the benefits of his cheaper Fiber To The Home solution here, overbuilding (as the term goes) a network where the duopoly now operate, taking their customers away, creating real competition. Given America's longer distances, I can easily see Wessels' cheaper fiber build technology used first to extend fiber just into neighborhoods, with final service provided by 802.11n gear, at speeds to 100 Mbps, and that revenue paying for the rest of the build. I can also see someone looking at what Wessels is doing and going him one-better, lowering costs still further.

Competition is coming, in other words. It can't be stopped. And with it, so will die the current bottlenecks on change. Without politics.

Boy, do I want to stop writing about politics.

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Shameless Self-Promotion

Please do me a favor. DanaBlankenhorn gets fewer visits each week than this newsletter has subscribers. If you could drop by (by clicking your choice of links below) and say hi I'd sure appreciate it. If you have an RSS reader, you can easily subscribe to the blog's feed.

I'm continuing to produce a special blog on Open Sourcefor ZDNet. I am pleased to say it has grown into a real money-maker. I work as a freelance writer in Atlanta, and am on the development team for Voic.Us, which aims to become a political "super-site" and offer mobile marketing services. Please visit that blog as well.

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...

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Best of the Week

Iraq vs. Vietnam: Hold Them Accountable

Vietnam was a defensive war. Iraq is an offensive war.

Today's Newest Democrats

Wall Street is slowly moving left.

Bush is not an Idiot

He just plays one on TV.

War, What is it Good for?

Plenty.

Settling the George Allen Mess

Can you head-butt a sitting U.S. Senator?

The Rise of Spam Blogs

A spam blog is a page created with blog software that is designed to attract traffic to a related page created by a spammer or other crook.

Nick Lemann is a Wanker

I don't have Nick Lemann's credits, but I can do his job better than he can.

The S&L Crisis of Our Time

When the history of our time is written, the current spectrum auctions will be its S&L Crisis.

The Limits of Net Censorship

If viruses can spread, so can ideas. And to tyrants that's just what freedom is a virus.

The Goal of Broadband is a Grid

The world is becoming one giant computer.

As Israel Learns, So Does the US

As Israel learns to change its tactics, and rejects the "kill 'em all" policy, this will have a huge political impact in the U.S.

The 1971 Strategy (and how to beat it)

What we need, as I've said, is a new thesis. The demand for one is almost palpable.

Sam Tanenhaus Gets It

In this week's Review of the Week, he correctly identifies the Netroots as a less-ideological heir to the Goldwater tradition, not the "McGovern Wing" of the 1972 Democrats the GOP seeks to paint them as.

Mencken-izing

One of the curious side-effects of a Political Crisis is that it does not just strike politicians. It goes after pundits, too. With a vengeance.

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Voic.Us

Georgia: Gatorgate Fading

Georgia: Athens Races Heat Up

Georgia Gov: Calling Mr. Baker

Georgia 1st CD: It's Hard Out There

Georgia: Democrats Building a Mystery

Alabama: Strange Days Indeed

Mississippi: Assume the Tuck Position

Georgia DOT Angers Both Sides of Blogosphere

North Carolina: Fire in the Mountain

Georgia: Problems Real and Fake

ZDNet Open Source

Open Source Makes Development Faster

Phipps Calls for Patent Reform

Open Source Seeks the Top of the Stack

The Tip of the Open Source Spear

Toward an Honest GPL

OSS Goes Beyond Storage

Is Linux Getting Comdex-ed?

Business Intelligence for the Masses

A Database Without an Operating System?

Slashdot the Apache of Open Source

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Clued-in, Clueless

Clued-in is Jon Stewart. Him funny. And these days he covers more stories than CNN. (Two is more than one.)

Clueless is coverage of the Jon Benet-Ramsey murder, especially that which ignores the press' role in hounding the victim's family.


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