By Ben Charny Staff Writer, CNET News.com January 27, 2003, 4:00 AM PT

Read more about VoIP

A group of telecommunications giants is quietly pushing a proposal that could create hang-ups for up-and-coming Internet-telephone rivals.

At stake are rules used to divvy up the 5.2 billion unassigned phone numbers set aside for use in North America, one of the biggest potential markets for Internet, or voice over IP (VoIP), telephone services.

VoIP technology allows people to make phones calls that travel over the Internet rather than solely across wires owned by long-distance phone companies. Such calls can be made from telephone systems that tap into the Internet, and from PCs.

The cost of making such calls is significantly less than that of basic long-distance service because the calls bypass the phone companies’ lines. As a result, many large corporations and tech-savvy consumers are using VoIP to make long-distance calls.

Net telephony providers such as Vonage and Net2Phone enjoy an unfettered stream of new numbers passed down from other carriers, which they can hand out to customers as they wish. Now, Verizon Communications, BellSouth and Qwest Communications International want federal regulators to tell the newcomers to heel.

Verizon and the others raised their concerns most recently at a meeting Wednesday of the North American Numbering Council (NANC). The industry group is chartered by the Federal Communications Commission and is charged with developing policies on how to distribute telephone numbers.

If successful, some observers warn, the lobbying push could dampen the market for Internet-telephone service in the United States.

“The results could choke off the industry before it really gets going,” according to a source familiar with the ongoing debate.

The looming fight over phone number allocations comes amid a supply crunch , just as VoIP services are shaping up as a significant new challenge to both local and long-distance carriers.

Once denigrated for spotty reception more similar to that of a CB radio than that of a phone, Internet calling has improved in quality to the point where analysts expect the industry to soar over the next few years. TeleGeography , a phone industry analysis firm, estimates that there were 18 billion minutes of VoIP phone calls in 2002, or about 10 percent of all the calls made.

As VoIP makes up a bigger proportion of the overall phone market, it is poised to join a growing field of competitors that are vying for an increasingly limited phone-number pool.

Your number’s up U.S. government reports estimate that the United States, Canada, Guam, Bermuda and Trinidad will run out of 10-digit numbers by the year 2025, driven by demand for cell phones, faxes and other devices. The coming crunch has led at least one industry organization to draw up a plan for a 12-digit future that could add some 640 billion new numbers to the pool.

In the meantime, the FCC composed two conservation measures, both opposed by the phone carriers. One, “number portability,” would let people keep their phone numbers even if they switch carriers. The second would force carriers to be assigned a smaller amount of telephone numbers at a time.

Against this backdrop, some carriers said they are concerned about what they see as unorthodox number allocation practices among VoIP providers.

At the Jan. 22 NANC meeting, proponents of VoIP phone number regulation said they want agencies including the FCC to examine the Internet-phone industry’s use of “designer numbers,” among other things. Because of the nature of the Web, computer phone providers can offer customers a choice of different area codes, regardless of where they live.

“The idea is not to choke this thing off, but to explore the issues and reach some agreements so we can go forward,” said Randy Sanders, BellSouth’s director of regulatory and external affairs.

NANC members were interested enough in the problems to order a subcommittee to come up with some of the possible technical problems involved with telephone numbers and VoIP.

Others, however, have dismissed the concerns as overblown for an industry that is barely getting its legs in North America.

In a white paper called “Much Ado About Nothing,” AT&T recently argued that Internet phone providers aren’t attracting enough customers now to even pose a possible problem to be addressed.

“The sky is not falling,” AT&T wrote to the NANC in a follow-up to the white paper.

Worldwide, there were around 2.93 million cable telephony subscribers in 2001, more than the 2.5 million most analysts were predicting, according to a study last year by Allied Business Intelligence, an Oyster Bay, N.Y.-based research firm. That number was expected to almost double by the end of 2002, reaching 5.2 million subscribers, the study predicted.

By contrast, only a handful of companies sell computer telephone service in the United States, with fewer than 100,000 people now using broadband connections to make phone calls. The leading computer phone provider is Vonage, which has about 10,000 customers.

NANC and the North America Numbering Plan Administrator (NANPA) distribute phone numbers in blocks to so-called incumbent local exchange carriers (ILECs), which then transfer some of those numbers to competitive local exchange carriers, or CLECs, that ride on their lines.

Vonage representative Brooke Shultz said the company gets its telephone numbers from CLECs, although she declined to name the suppliers or the terms of the transfer deals.

Shultz dismissed the lobbying effort as a competitive tactic.

“This is really the first sort of tactic to get us regulated,” said Shultz. “We’re not misusing numbers.”

Industrywide makeover Regardless of where the industry stands now, there is no doubt of the momentum behind a new way of delivering voice communications at a fraction of the cost of traditional phone networks.

VoIP providers generally require two things–a broadband connection and either an adapter for a landline phone or a microphone and speaker device for computers.

The calls travel mostly over the Web, avoiding the toll roads that are traditional phone lines. As a result, computer phone services can offer plans with unlimited dialing and no long-distance charges. The average monthly price is $40.

VoIP’s efficiencies come through its use of packet-switching technology, which breaks up communications into small bits that are dispersed to find the fastest path across the network and recombined at the end point. Traditional telephony, by contrast, is “circuit-switched,” creating a dedicated channel for the duration of the call.

Analysts have cautioned that traditional phone companies could get squeezed out of VoIP technology. Responding to the threat, big carriers, including Verizon and Qwest, have been inking billion-dollar deals with equipment makers such as Nortel Networks, to add packet-switching capabilities. Sprint began adding packet switching to its network in 2002, after a $1.1 billion deal with Nortel. Qwest has also announced that it will adopt packet-switching technology.

Norm Bogen, a communications infrastructure and services analyst with Cahners In-Stat, expects the sale of media gateways, the equipment needed to install VoIP systems, to increase from $883 million in 2003 to $2.74 billion in 2006.

Even as the big carriers race to get into this area, however, Bogen tipped the advantage to the upstart VoIP providers.

“They are replacing the local phone company,” Bogen said.

washingtonpost.com

Dissertation Could Be Security Threat Student’s Maps Illustrate Concerns About Public Information

By Laura Blumenfeld Washington Post Staff Writer Tuesday, July 8, 2003; Page A01

Sean Gorman’s professor called his dissertation “tedious and unimportant.” Gorman didn’t talk about it when he went on dates because “it was so boring they’d start staring up at the ceiling.” But since the Sept. 11, 2001, attacks, Gorman’s work has become so compelling that companies want to seize it, government officials want to suppress it, and al Qaeda operatives — if they could get their hands on it — would find a terrorist treasure map.

Tinkering on a laptop, wearing a rumpled T-shirt and a soul patch goatee, this George Mason University graduate student has mapped every business and industrial sector in the American economy, layering on top the fiber-optic network that connects them.

He can click on a bank in Manhattan and see who has communication lines running into it and where. He can zoom in on Baltimore and find the choke point for trucking warehouses. He can drill into a cable trench between Kansas and Colorado and determine how to create the most havoc with a hedge clipper. Using mathematical formulas, he probes for critical links, trying to answer the question: “If I were Osama bin Laden, where would I want to attack?” In the background, he plays the Beastie Boys.

For this, Gorman has become part of an expanding field of researchers whose work is coming under scrutiny for national security reasons. His story illustrates new ripples in the old tension between an open society and a secure society.

“I’m this grad student,” said Gorman, 29, amazed by his transformation from geek to cybercommando. “Never in my wildest dreams would I have imagined I’d be briefing government officials and private-sector CEOs.”

Invariably, he said, they suggest his work be classified. “Classify my dissertation? Crap. Does this mean I have to redo my PhD?” he said. “They’re worried about national security. I’m worried about getting my degree.” For academics, there always has been the imperative to publish or perish. In Gorman’s case, there’s a new concern: publish and perish.

“He should turn it in to his professor, get his grade — and then they both should burn it,” said Richard Clarke, who until recently was the White House cyberterrorism chief. “The fiber-optic network is our country’s nervous system.” Every fiber, thin as a hair, carries the impulses responsible for Internet traffic, telephones, cell phones, military communications, bank transfers, air traffic control, signals to the power grids and water systems, among other things.

“You don’t want to give terrorists a road map to blow that up,” he said.

The Washington Post has agreed not to print the results of Gorman’s research, at the insistence of GMU. Some argue that the critical targets should be publicized, because it would force the government and industry to protect them. “It’s a tricky balance,” said Michael Vatis, founder and first director of the National Infrastructure Protection Center. Vatis noted the dangerous time gap between exposing the weaknesses and patching them: “But I don’t think security through obscurity is a winning strategy.”

Gorman compiled his mega-map using publicly available material he found on the Internet. None of it was classified. His interest in maps evolved from his childhood, he said, because he “grew up all over the place.” Hunched in the back seat of the family car, he would puzzle over maps, trying to figure out where they should turn. Five years ago, he began work on a master’s degree in geography. His original intention was to map the physical infrastructure of the Internet, to see who was connected, who was not, and to measure its economic impact.

“We just had this research idea, and thought, ‘Okay,’ ” said his research partner, Laurie Schintler, an assistant professor at GMU. “I wasn’t even thinking about implications.”

The implications, however, in the post-Sept. 11 world, were enough to knock the wind out of John M. Derrick Jr., chairman of the board of Pepco Holdings Inc., which provides power to 1.8 million customers. When a reporter showed him sample pages of Gorman’s findings, he exhaled sharply.

“This is why CEOs of major power companies don’t sleep well these days,” Derrick said, flattening the pages with his fist. “Why in the world have we been so stupid as a country to have all this information in the public domain? Does that openness still make sense? It sure as hell doesn’t to me.”

Recently, Derrick received an e-mail from an atlas company offering to sell him a color-coded map of the United States with all the electric power generation and transmission systems. He hit the reply button on his e-mail and typed: “With friends like you, we don’t need any enemies in the world.”

Toward the other end of the free speech spectrum are such people as John Young, a New York architect who created a Web site with a friend, featuring aerial pictures of nuclear weapons storage areas, military bases, ports, dams and secret government bunkers, along with driving directions from Mapquest.com. He has been contacted by the FBI, he said, but the site is still up.

“It gives us a great thrill,” Young said. “If it’s banned, it should be published. We like defying authority as a matter of principle.”

This is a time when people are rethinking the idea of innocent information. But it is hardly the first time a university has entangled itself in a war. John McCarthy, who oversees Gorman’s project at GMU’s National Center for Technology and Law, compared this period to World War II, when academics worked on code-breaking and atomic research. McCarthy introduced Gorman to some national security contacts. Gorman’s critical infrastructure project, he said, has opened a dialogue among academia, the public sector and the private sector. The challenge? “Getting everyone to trust each other,” McCarthy said. “It’s a three-way tension that tugs and pulls.”

When Gorman and Schintler presented their findings to government officials, McCarthy recalled, “they said, ‘Pssh, let’s scarf this up and classify it.’ ”

And when they presented them at a forum of chief information officers of the country’s largest financial services companies — clicking on a single cable running into a Manhattan office, for example, and revealing the names of 25 telecommunications providers — the executives suggested that Gorman and Schintler not be allowed to leave the building with the laptop.

Businesses are particularly sensitive about such data. They don’t want to lose consumer confidence, don’t want to be liable for security lapses and don’t want competitors to know about their weaknesses. The CIOs for Wells Fargo and Mellon Financial Corp. attended the meeting. Neither would comment for this story.

Catherine Allen, chief executive of BITS, the technology group for the financial services roundtable, said the attendees were “amazed” and “concerned” to see how interdependent their systems were. Following the presentation, she said, they decided to hold an exercise in an undisclosed Midwestern city this summer. They plan to simulate a cyber assault and a bomb attack jointly with the telecommunications industry and the National Communications System to measure the impact on financial services.

McCarthy hopes that by identifying vulnerabilities, the GMU research will help solve a risk management problem: “We know we can’t have a policeman at every bank and switching facility, so what things do you secure?”

Terrorists, presumably, are exploring the question from the other end. In December 2001, bin Laden appeared in a videotape and urged the destruction of the U.S. economy. He smiled occasionally, leaned into the camera and said, “This economic hemorrhaging continues until today, but requires more blows. And the youth should try to find the joints of the American economy and hit the enemy in these joints, with God’s permission.”

Every day, Gorman tries to identify those “joints,” sitting in a gray cinderblock lab secured by an electronic lock, multiple sign-on codes and a paper shredder. No one other than Gorman, Schintler or their research instructor, Rajendra Kulkarni, is allowed inside; they even take out their own trash. When their computer crashed, they removed the hard drive, froze it, smashed it and rubbed magnets over the surface to erase the data.

The university has imposed the security guidelines. It is trying to build a cooperative relationship with the Department of Homeland Security. Brenton Greene, director for infrastructure coordination at DHS, described the project as “a cookbook of how to exploit the vulnerabilities of our nation’s infrastructure.” He applauds Gorman’s work, as long as he refrains from publishing details. “We would recommend this not be openly distributed,” he said.

Greene is trying to help the center get federal funding. (“The government uses research funding as a carrot to induce people to refrain from speech they would otherwise engage in,” said Kathleen Sullivan, dean of Stanford Law School. “If it were a command, it would be unconstitutional.”)

All this is a bit heavy for Gorman, who is in many ways a typical student. His Christmas lights are still up in July; his living room couch came from a trash pile on the curb. Twice a day, Gorman rows on the Potomac. Out on the water, pulling the oars, he can stop thinking about how someone could bring down the New York Stock Exchange or cripple the Federal Reserve’s ability to transfer money.

On a recent afternoon, he drove his Jeep from the Fairfax campus toward the river. Along the way he talked about his dilemma: not wanting to hurt national security; not wanting to ruin his career as an academic.

“Is this going to completely squash me?” he said, biting his fingernail. GMU has determined that he will publish only the most general aspects of his work. “Academics make their name as an expert in something. . . . If I can’t talk about it, it’s hard to get hired. It’s hard to put ‘classified’ on your list of publications on your résumé.”

As he drove along Route 50, he pointed out a satellite tower and a Verizon installation. Somewhere in Arlington he took a wrong turn and stopped to ask for directions. It has always been that way with him. He’s great at maps, but somehow he ends up lost.

Instead, they’re hedgehogs, rolling up into a spiky ball every time anyone “threatens” the crutches they use to sustain their faltering businesses. Only by systematically removing these artificial retention tools can we force these carriers to become creative, innovative marketers who bring us services we actually need.

In the meantime, fuck ’em. Let’s force them to jump through expensive hoops and remove all of their spikes. They’ve been milking captive markets for too long.

-Ian.

—- http://story.news.yahoo.com/news?tmpl=story&u=/ap/20030416/ap_on_hi_te/ cell_phone_numbers

Wireless Cos. Fight Rule on Phone Numbers Wed Apr 16, 9:15 AM ET Add Technology – AP to My Yahoo!

By DAVID HO, Associated Press Writer

WASHINGTON – Despite static, dropped calls and dead zones, Jeff Danielson sticks with his cell phone service, not out of loyalty but because he can’t stand the thought of asking clients to call a new phone number.

“I’ve been unhappy with the service, but I’ve given up doing anything about it because I really don’t want to lose the number,” said Danielson, 27, a Washington technology consultant. “I’m afraid I would lose clients that way.”

Federal regulators are sympathetic with Danielson’s plight and have ordered cell phone companies to let people take their numbers with them when they switch to a competitor. The wireless providers asked a federal appeals court Tuesday to block the regulation, arguing that keeping the same phone number is a convenience, not a necessity.

The cell phone companies told a three-judge panel of the U.S. Court of Appeals for the District of Columbia that the Federal Communications Commission (news – web sites)’s “number portability” rules will raise costs while doing little to increase competition.

“It’s very speculative to say this even offers consumer benefits,” said Andrew McBride, an attorney representing Verizon Wireless and the Cellular Telecommunications and Internet Association.

McBride asserted the FCC (news – web sites) overstepped its authority and made legal errors in its order. Retaining the same phone number is not an essential service like making wireless providers supply enhanced 911 systems to help authorities locate cell phone users during emergencies, he argued.

The judges are not expected to rule for several months. Without court intervention, the regulations are to take effect Nov. 24.

Congress decided in 1996 that people can keep their traditional local phone numbers when they change phone companies. The FCC decided soon after that wireless carriers should offer that same ability to people in the largest 100 U.S. cities by June 1999.

The FCC extended that deadline three times, most recently granting a yearlong extension last summer after Verizon Wireless asked the commission to eliminate the requirement.

“Wireless companies will have stronger incentives to provide better service and lower prices if consumers can take their numbers,” said Chris Murray, an attorney for Consumers Union, publisher of Consumer Reports magazine. He said small businesses and self-employed people are particularly harmed when switching carriers because they lose numbers known by customers.

Most wireless companies argue that their industry is competitive enough and doesn’t need a regulatory boost. They say about 145 million people subscribe to U.S. cell phone systems, and about a third of them change carriers each year.

“The wireless industry is the most competitive telecommunications market on the planet,” McBride said after the hearing. He said the expense of providing the number switching service will take money away from better cell phone coverage and cheaper phones.

The wireless industry estimates the requirement will cost more than $1 billion in the first year and $500 million each year after that.

The industry also says the FCC’s number portability rules are unclear regarding traditional landline phone companies and give them an unfair advantage. The wireless companies want the FCC to declare that traditional landline phone companies must allow their customers to keep numbers when switching to cell phones.

Many cell phone users outside the United States, in Britain, Australia, Hong Kong and other places, already have the option of keeping their numbers when they switch carriers.

My suspicions are that Syria is in fact supporting the Saddam regime and are allowing them to transit SCUDs and other weapons systems safely across the border into Syria. Further, I suspect that the US knows this, and the additional 200,000 troops on their way to the Persian Gulf from the US and Britain are indeed on their way to invade Syria. One they’re in position I’d expect to see Rumsfeld throttling up the rhetoric denouncing Syria.

In fact, Rumsfeld has already intimated that Syria may be harbouring what little remains of Saddam’s chemical and/or plutonium weapons making capability (my editorial, not his). This is probable, and I suspect that unless the US Military hires Mark Fuhrman, that there won’t be much evidence of actual Weapons of Mass Destruction when the smoke clears in Baghdad.

Debka itself is an interesting source for information on the Middle East, I highly recommend checking it frequently.

-Ian.

——– http://www.debka.com/article_print.php?aidE6

Is Saddam in Syria?

From DEBKAfile War Diary – Day 15, April 3, 2003

April 5, 2003, 1:58 PM (GMT+02:00)

DEBKAfile’s Exclusive Middle East sources have tracked down the top Iraqi leadership’s bolt-hole. It is a large 1,600-room luxury resort with 600 meters of private sandy beach in the Mediterranean coastal town of Latakiya called Cote d’Azur De Cham Resort, prepaid and chartered in toto by Baghdad.

The group may include Saddam Hussein or his sons, but this is not confirmed.

The hotel is located close to the Assad family villa.

Top Iraqi officials are reported hiding there since March 23, four days after the US-led coalition invaded Iraq. They are guarded by a Syrian commando unit armed with anti-air missiles while Syrian naval missile boats secure the port.

DEBKAfile’s military sources also report: The Iraqi troops sent to reinforce Baghdad’s international airport are members of the Iraqi 26th Brigade’s special commando unit, whose sole task is to defend lives of Saddam Hussein and close family. These commandos take orders from no one but Iraqi ruler and sons, who are unlikely to have stripped themselves of this protection if they were still present in the capital. This outward movement from Baghdad is further indication of drastic changes in the Iraqi government’s top level

Saddam Departs Baghdad

On the exact 14th day of the Iraq War, Wednesday, April 2, the Saddam regime looked as though it had breathed its last. Its primary military props, the Special Republic Guards divisions, Saddam’s Fedayeen suicides and Iraqi intelligence’s special commando units, were clearly losing their grip as a functioning command in control of a coherent force of resistance. Iraqi elite units were letting key positions drop into the hands of the coalition forces already dangerously close to Baghdad, without lifting a finger. The SRG Baghdad Division did nothing to stop allied forces crossing the Tigris bridges from west to east although it was their job to blow them up and prevent the allied advance. Commanders were rumored to have been summarily fired; others disappeared.

During the day, DEBKAfile’s military sources describe a procession on Iraqi television of division and brigade commanders who assured the troops that all was well and the battle was going on. They looked tense and harassed. This unusual demonstration looked as though it was intended to betoken its participants’ loyalty to whoever is in charge in Baghdad, possibly a new ruling clique, or an attempt to draw attention to the men with whom the United States must discuss capitulation terms or deal with as the future leaders of the New Iraq.

In a move that smacked of panic, Iraqi intelligence agents went round the capital impounding cell phones to cut off contact with the outside world as wild rumors swirled around the fate of Saddam Hussein, his sons and his regime.

The little hard information reaching DEBKAfile’s most reliable intelligence sources is that Saddam and his sons departed Baghdad some days ago. They do not know where he went, or in what state of health, whether he traveled abroad for medical treatment or the family headed for a safe berth prepared in advance, or even if they arrived safely at their destination.

But it is safe to say that Saddam and the senior members of his family are no longer at the helm of government. Iraq is undoubtedly in the process of regime change, the main objective of the Iraq War. Anything beyond that is hazy. Other members of the Saddam regime may have seized power after the ruler himself departed. The new ruling caste may be divided between a faction negotiating terms of surrender with the Americans and a second, which is determined to fight on. The whole truth of the day’s events on April 2 may never be fully discovered. The war may come to an abrupt end, but not the Iraq crisis which promises more upheaval ahead.

Permanet, Nearlynet, and Wireless Data First published March 28, 2003 on the “Networks, Economics, and Culture” mailing list. Subscribe to the mailing list.

“The future always comes too fast and in the wrong order.” — Alvin Toffler

For most of the past year, on many US airlines, those phones inserted into the middle seat have borne a label reading “Service Disconnected.” Those labels tell a simple story — people don’t like to make $40 phone calls. They tell a more complicated one as well, about the economics of connectivity and about two competing visions for access to our various networks. One of these visions is the one everyone wants — ubiquitous and convenient — and the other vision is the one we get — spotty and cobbled together.

Call the first network “perma-net,” a world where connectivity is like air, where anyone can send or receive data anytime anywhere. Call the second network “nearly-net”, an archipelago of connectivity in an ocean of disconnection. Everyone wants permanet — the providers want to provide it, the customers want to use it, and every few years, someone announces that they are going to build some version of it. The lesson of in-flight phones is that nearlynet is better aligned with the technological, economic, and social forces that help networks actually get built. The most illustrative failure of permanet is the airphone. The most spectacular was Iridium. The most expensive will be 3G.

“I’m (Not) Calling From 35,000 Feet”

The airphone business model was obvious — the business traveler needs to stay in contact with the home office, with the next meeting, with the potential customer. When 5 hours of the day disappears on a flight, value is lost, and business customers, the airlines reasoned, would pay a premium to recapture that value.

The airlines knew, of course, that the required investment would make in-flight calls expensive at first, but they had two forces on their side. The first was a captive audience — when a plane was in the air, they had a monopoly on communication with the outside world. The second was that, as use increased, they would pay off the initial investment, and could start lowering the cost of making a call, further increasing use.

What they hadn’t factored in was the zone of connectivity between the runway and the gate, where potential airphone users were physically captive, but where their cell phones still worked. The time spent between the gate and the runway can account for a fifth of even long domestic flights, and since that is when flight delays tend to appear, it is a disproportionately valuable time in which to make calls.

This was their first miscalculation. The other was that they didn’t know that competitive pressures in the cell phone market would drive the price of cellular service down so fast that the airphone would become more expensive, in relative terms, after it launched.

The negative feedback loop created by this pair of miscalculations marginalized the airphone business. Since price displaces usage, every increase in the availability on cell phones or reduction in the cost of a cellular call meant that some potential users of the airphone would opt out. As users opted out, the projected revenues shrank. This in turn postponed the date at which the original investment in the airphone system could be paid back. The delay in paying back the investment delayed the date at which the cost of a call could be reduced, making the airphone an even less attractive offer as the number of cell phones increased and prices shrank still further.

66 Tears

This is the general pattern of the defeat of permanet by nearlynet. In the context of any given system, permanet is the pattern that makes communication ubiquitous. For a plane ride, the airphone is permanet, always available but always expensive, while the cell phone is nearlynet, only intermittently connected but cheap and under the user’s control.

The characteristics of the permanet scenario — big upfront investment by few enough companies that they get something like monopoly pricing power — is usually justified by the assumption that users will accept nothing less than total connectivity, and will pay a significant premium to get it. This may be true in scenarios where there is no alternative, but in scenarios where users can displace even some use from high- to low-priced communications tools, they will.

This marginal displacement matters because a permanet network doesn’t have to be unused to fail. It simply has to be underused enough to be unprofitable. Builders of large networks typically overestimate the degree to which high cost deflects use, and underestimate the number of alternatives users have in the ways they communicate. And in the really long haul, the inability to pay off the initial investment in a timely fashion stifles later investment in upgrading the network.

This was the pattern of Iridium, Motorola’s famously disastrous network of 66 satellites that would allow the owner of an Iridium phone to make a phone call from literally anywhere in the world. This was permanet on a global scale. Building and launching the satellites cost billions of dollars, the handsets cost hundreds, the service cost dollars a minute, all so the busy executive could make a call from the veldt.

Unfortunately, busy executives don’t work in the veldt. They work in Pasedena, or Manchester, or Caracas. This is the SUV pattern — most SUV ads feature empty mountain roads but most actual SUVs are stuck in traffic. Iridium was a bet on a single phone that could be used anywhere, but its high cost eroded any reason use an Iridium phone in most of the perfectly prosaic places phone calls actually get made.

3G: Going, Going, Gone

The biggest and most expensive permanet effort right now is wireless data services, principally 3G, the so-called 3rd generation wireless service, and GPRS, the General Packet Radio Service (though the two services are frequently lumped together under the 3G label.) 3G data services provide always on connections and much higher data rates to mobile devices than the widely deployed GSM networks do, and the wireless carriers have spent tens of billions worldwide to own and operate such services. Because 3G requires licensed spectrum, the artificial scarcity created by treating the airwaves like physical property guarantees limited competition among 3G providers.

The idea here is that users want to be able to access data any time anywhere. This is of course true in the abstract, but there are two caveats: the first is that they do not want it at any cost, and the second and more worrying one is that if they won’t use 3G in environments where they have other ways of connecting more cheaply.

The nearlynet to 3G’s permanet is Wifi (and, to a lesser extent, flat-rate priced services like email on the Blackberry.) 3G partisans will tell you that there is no competition between 3G and Wifi, because the services do different things, but of course that is exactly the problem. If they did the same thing, the costs and use patterns would also be similar. It’s precisely the ways in which Wifi differs from 3G that makes it so damaging.

The 3G model is based on two permanetish assumptions — one, that users have an unlimited demand for data while traveling, and two, that once they get used to using data on their phone, they will use it everywhere. Both assumptions are wrong.

First, users don’t have an unlimited demand for data while traveling, just as they didn’t have an unlimited demand for talking on the phone while flying. While the mobile industry has been telling us for years that internet-accessible cellphones will soon outnumber PCs, they fail to note that for internet use, measured in either hours or megabytes, the PC dwarfs the phone as a tool. Furthermore, in the cases where users do demonstrate high demand for mobile data services by getting 3G cards for their laptops, the network operators have been forced to raise their prices, the opposite of the strategy that would drive use. Charging more for laptop use makes 3G worse relative to Wifi, whose prices are constantly falling (access points and Wifi cards are now both around $60.)

The second problem is that 3G services don’t just have the wrong prices, they have the wrong kind of prices — metered — while Wifi is flat-rate. Metered data gives the user an incentive to wait out the cab ride or commute and save their data intensive applications for home or office, where sending or receiving large files creates no additional cost. The more data intensive a users needs are, the greater the price advantage of Wifi, and the greater their incentive to buy Wifi equipment. At current prices, a user can buy a Wifi access point for the cost of receiving a few PDF files over a 3G network, and the access point, once paid for, will allow for unlimited use at much higher speeds.

The Vicious Circle

In airline terms, 3G is like the airphone, an expensive bet that users in transit, captive to their 3G provider, will be happy to pay a premium for data communications. Wifi is like the cell phone, only useful at either end of travel, but providing better connectivity at a fraction of the price. This matches the negative feedback loop of the airphone — the cheaper Wifi gets, both in real dollars and in comparison to 3G, the greater the displacement away from 3G, the longer it will take to pay back the hardware investment (and, in countries that auctioned 3G licenses, the stupefying purchase price), and the later the day the operators can lower their prices.

More worryingly for the operators, the hardware manufacturers are only now starting to toy with Wifi in mobile devices. While the picture phone is a huge success as a data capture device, the most common use is “Take picture. Show friends. Delete.” Only a fraction of the photos that are taken are sent over 3G now, and if the device manufacturers start making either digital cameras or picture phones with Wifi, the willingness to save a picture for free upload later will increase.

Not all permanets end in total failure, of course. Unlike Iridium, 3G is seeing some use, and that use will grow. The displacement of use to cheaper means of connecting, however, means that 3G will not grow as fast as predicted, raising the risk of being too little used to be profitable.

Partial Results from Partial Implementation

In any given situation, the builders of permanet and nearlynet both intend to give the customers what they want, but since what customers want is good cheap service, it is usually impossible to get there right away. Permanet and nearlynet are alternate strategies for evolving over time.

The permanet strategy is to start with a service that is good but expensive, and to make it cheaper. The nearlynet strategy is to start with a service that is lousy but cheap, and to make it better. The permanet strategy assumes that quality is the key driver of a new service, and permanet has the advantage of being good at every iteration. Nearlynet assumes that cheapness is the essential characteristic, and that users will forgo quality for a sufficient break in price.

What the permanet people have going for them is that good vs. lousy is not a hard choice to make, and if things stayed that way, permanet would win every time. What they have going against them, however, is incentive. The operator of a cheap but lousy service has more incentive to improve quality than the operator of a good but expensive service does to cut prices. And incremental improvements to quality can produce disproportionate returns on investment when a cheap but lousy service becomes cheap but adequate. The good enough is the enemy of the good, giving an edge over time to systems that produce partial results when partially implemented.

Permanet is as Permanet Does

The reason the nearlynet strategy is so effective is that coverage over cost is often an exponential curve — as the coverage you want rises, the cost rises far faster. It’s easier to connect homes and offices than roads and streets, easier to connect cities than suburbs, suburbs than rural areas, and so forth. Thus permanet as a technological condition is tough to get to, since it involves biting off a whole problem at once. Permanet as a personal condition, however, is a different story. From the user’s point of view, a kind of permanet exists when they can get to the internet whenever they like.

For many people in the laptop tribe, permanet is almost a reality now, with home and office wired, and any hotel or conference they attend Wifi- or ethernet-enabled, at speeds that far outstrip 3G. And since these are the people who reliably adopt new technology first, their ability to send a spreadsheet or receive a web page faster and at no incremental cost erodes the early use the 3G operators imagined building their data services on.

In fact, for many business people who are the logical customers for 3G data services, there is only one environment where there is significant long-term disconnection from the network: on an airplane. As with the airphone itself, the sky may be a connection-poor environment for some time to come, not because it isn’t possible to connect it, but because the environment on the plane isn’t nearly nearlynet enough, which is to say it is not amenable to inexpensive and partial solutions. The lesson of nearlynet is that connectivity is rarely an all or nothing proposition, much as would-be monopolists might like it to be. Instead, small improvements in connectivity can generally be accomplished at much less cost than large improvements, and so we continue growing towards permanet one nearlynet at a time. First published March 28, 2003 on the “Networks, Economics, and Culture” mailing list. Subscribe to the mailing list.

> From: Jeff Bone
> Date: Mon Mar 24, 2003 10:45:59 PM US/Pacific
> To: fork [at] xent [dot] com
> Subject: [SPORK?] The Rise of the Reporters
>
>
> It’s been evident (IMHO) for a long time that the “big story” of the
> 90s wasn’t computers, or the Web, or buddy lists, or cell phones, or
> PDAs, or blogs, or any of the stuff us pure geeks probably immediately
> think of. Some of those stories might be the big stories of this
> decade — but the effects of all of the above, really, on a global
> scale, were in the 90s wildly overstated.
>
> The big story of the 90s went largely unreported — because news
> itself isn’t usually news. Seems to me that the big story of the 90s
> was the meteoric rise in global importance of television news networks
> in shaping world opinion, shaping the course of world events, and
> making the conduct of international relations a real-time endeavor.
> And of course, CNN really started this and came of age in the crucible
> of Baghdad ’91. To an even greater extent, global media is coming of
> age in this current conflict.
>
> This whole “embedding” thing has me totally fascinated. I heard a top
> Pentagon official on one of the networks a night or two ago talking
> about how they get real-time battle intel from these networks more
> often than through the chain of command. And the embedding thing
> isn’t just our reporters: I’m watching Aaron Brown on CNN talking to
> reporters from many countries and outlets — including Muslim media
> and *France* — that are embedded with our forces. (FWIW, the Arabic
> news networks have forces embedded w/ Iraqi forces, too. Ironically,
> the viewers of Al Jazeera and some of the other 9 or so similar
> networks *potentially* have better access to more balanced information
> than we do.)
>
> Real-time, largely non-partisan (face it, most at least try for some
> level of objectivity, though they succeed to degrees according to
> different agendas; but in general their value is diminished to the
> extent that they editorialize and spin the bitstream) private sector
> intelligence agencies.
>
> And they’ve become almost sacrosanct — they go everywhere, see
> everything, say whatever, and are pretty much untouched and unhindered
> by the national collective organisms and interests they operate
> within. Bizarre.
>
> Truly fascinating. Powerful force for good. Powerful force for evil.
> Suspicion warranted, but I can’t help but feel kind of awed. A
> 30-minute scan of CNN, Fox, etc. today — supplemented with broad
> reading of international online newspapers to triangulate and balance
> — probably gives any one of us access to more information of equal
> or superior quality than the information that intelligence officers in
> this or any other country had from a year’s intelligence gathering two
> decades ago. We’re more immediately and better informed more than the
> guys that made global policy during our parents’ era.
>
> Wow. Go CNN, et. al. 😉
>
> jb

Service Providers suck. They hire guys like me to figure out how to maximize the share-of-wallet while containing the growth and supporting their other, boneheaded, legacy products. Generally speaking, carriers are obstacles to the adoption of technology, rather than instigators of it.

What this article hints at is a mesh of ad-hoc mobile phone users each sharing their network capacity and organically frequency-hopping to avoid network trouble zones. Whereas it has proven impossible for mobile phone network dweebs to engineer reliable wireless services in North America, this could be the answer.

More and more spectrum will be made available to the general public around this world, or we will figure out better ways to use that which is already allocated. In the end, the Return On Investment that carriers expect for their 3G licenses, which already has an event horizon measured in decades, may never happen.

Regulatory bodies will be faced with bolstering floundering wireless carriers, which are clearly obstacles to growth, or enabling an ecosystem of radical technologies to flower into a jungle of new technologies, applications, and networks. The trend of technology and invention clearly favours the latter.

-Ian.

——— http://story.news.yahoo.com/news?tmpl=story&ncidR8&e=4&cidR8&u=/ap/ 20021125/ap_on_hi_te/the_new_spectrum

New Gadgets May Spark Deregulation Mon Nov 25, 7:38 AM ET Add Technology – AP to My Yahoo!

By BRIAN BERGSTEIN, AP Business Writer

NEW YORK (AP) – It almost sounds too “Star Trek” to be possible: A multipurpose cell phone that also serves as an FM radio, walkie-talkie, garage door opener and TV remote control.

And what if every time you made a call with that handset it increased the performance of other phones already in use — instead of competing for airwaves with them?

While such wireless wizardry remains a few years off, those days could be coming faster now, thanks to a rare confluence of technology breakthroughs and a rethinking of airwave regulation by the federal government.

“It is kind of an interesting point in time when it comes to wireless networks,” said Dallas Nash, co-founder of Mississippi-based SIGFX LLC, a player in the impending wireless revolution.

SIGFX figured out how to transmit cell phone calls in a thin part of the airwave spectrum already used by TV stations. By dramatically reducing the cost and increasing the range of wireless phone networks, the invention could bring reliable service to rural areas and developing countries.

Vanu Bose has big dreams, too: to create that new generation of radios — that’s really all that cell phones and garage-door openers are — that can move between various functions with an icon click. The trick is to replace much of the circuitry found in radios with flexible software.

Bose began working at it in a military-sponsored communications project at the Massachusetts Institute of Technology (news – web sites). After graduating in 1998, he started his own company, Vanu Inc., to further develop the technology.

Now Cambridge, Mass.-based Vanu Inc. has created an all-software base station — which relays calls from wireless phones on cellular networks. Vanu also has built a prototype handheld computer that can make calls on different kinds of wireless networks and work as a walkie-talkie, baby monitor, FM radio — “whatever you want,” Bose said.

The big challenge is that the device is limited to 10 to 20 hours of battery life. Bose — son of the stereo engineer who founded Bose Corp. — believes that with more development and improvements in low-power microprocessors, the device could be the size of a cell phone and have a much longer battery life.

At the same time, other researchers are making progress in developing “smart” radio receivers that can, on their own, determine instantaneously when and where a bit of spectrum is going unused and switch their communications accordingly to avoid interference. (A method of doing that is already employed in cellular networks and cordless phones).

In fact, advocates of an “open spectrum” or a “commons” policy believe new generations of radio receivers will routinely handle their own conversations and help relay others at the same time.

“If every radio is both a transmitter and a receiver, as you add more, you add capacity to the network,” said David P. Reed, a former chief scientist at Lotus Development Corp. and a leader of the “open spectrum” movement.

“My gut feeling,” Reed said, “is that in 10 or 20 years this will be as big as the Internet.”

That may seem a wide-eyed prediction, but ideas like this are not just grass-roots dreams.

Intel Corp. backs software-defined radio in hopes it will ignite an explosion of demand for wireless chips. The military’s Defense Advanced Research Projects Agency (DARPA) is working on several ways to “increase spectrum usage by dynamically sensing and adapting in frequency, time and space.”

Researchers at Bell Laboratories, part of Lucent Technologies Inc., recently announced a breakthrough in their BLAST technology, which takes advantage of interference on a network to increase the rates at which data can be sent.

Many technology experts say such breakthroughs should force a revolution in how we treat the airwaves. Since the 1920s, electromagnetic spectrum has been handled like real estate. The government licenses use of slices of spectrum and tightly regulates what can be done in those bands.

Much of the spectrum is tied up — largely by the military — and there’s only so much room for experimental and innovative new technologies in unlicensed bands, such as those occupied by cordless phones and the wireless networking system known as WiFi.

But in what looks like the beginning of a historic policy shift, the Federal Communications Commission (news – web sites) has been listening closely to the technology crowd — and to cellular carriers that spent tens of billions of dollars for spectrum licenses and want more freedom to use or trade them as they see fit.

“We have perhaps the most interesting debate in spectrum governance taking place in America since the 1930s,” said Adam Thierer, director of telecommunications studies at the Cato Institute, a libertarian think tank.

This month, a task force appointed by FCC (news – web sites) Chairman Michael Powell — and headed by the former leader of DARPA’s communications research — offered a framework for a spectrum policy overhaul expected to begin next year.

The group said the government should grant wireless carriers more flexibility with their expensive spectrum licenses so they may lease portions of the airwaves that go unused at certain times, for example.

It also endorsed the “commons” concept in some circumstances, saying new technologies should have more freedom to operate in regulated bands — as long as they don’t interfere with cellular conversations or radio broadcasts — and in unlicensed parts of the spectrum as well.

In essence, the FCC finally would be treating spectrum like real estate in the physical world, where the public has easements and parks alongside private property, and airplanes can fly overhead.

Such monumental changes probably will provoke some fights in Washington.

“Certain ossified licensees will inherently be resistant to change,” said Bryan Tramont, Powell’s senior legal adviser.

Even parties who are clamoring for change are circumspect. Wireless phone carriers, for example, praise the FCC’s efforts to modernize spectrum policy. But some say technologies such as software-defined radio might be too unproven to form the basis of policy changes.

They also worry that low-power transmissions by rival technologies on or near already-licensed frequencies could interfere with wireless phone conversations.

“It’s hard to oppose looking at spectrum policy anew,” said Doug Brandon, AT&T Wireless’ vice president of federal affairs. But, he added, eventually, “someone will say, `My ox just got gored.'”

———–

NEW YORK (AP) –Here’s another reason to check your telephone bill closely.

A subtle realignment this fall in the nation’s inscrutable tangle of phone systems could cause a surprising increase in what some consumers pay to call cell phones from traditional landlines.

The change, rooted in the different ways landline and wireless phone networks are laid out, means some calls to cell phones that were once considered local now incur higher toll charges.

For most people, the increases will be negligible. Verizon Inc., the largest regional phone company, estimates that in the 33 million households it serves, the average bill will rise pennies per month.

Even so, Verizon warned customers about the new policy in an insert with September phone bills and acknowledged that some people’s monthly charges could jump $10 or $20 unless they change their calling habits.

“This change may come as a shock to many wireline customers the first time they see it on their bills, and could cause callers to hesitate next time they reach for the phone and want to dial a wireless number,” said Travis Larson, spokesman for the Cellular Telecommunications and Internet Association, a trade organization for wireless carriers.

No serious trouble reported

The billing change doesn’t appear to have caused serious trouble where it already has been in effect, mainly in the West and Midwest.

“I’m not aware that this is an issue that we get a lot of consumer complaints on,” said Federal Communications Commission spokeswoman Meribeth McCarrick.

Why is this happening?

Area codes are divided into “rate centers” with their own number prefixes. Calls to nearby rate centers are considered local, while those to further rate centers generate intra-state or regional toll prices. Calls between more spread-out points count as long-distance.

Because of differences in how wireless networks are set up, wireless carriers don’t need to get phone numbers in every local rate center. So your cell phone could have a number from a rate center distant from your home.

For such customers, a call from home to their cell phone could incur per-minute toll charges.

To stimulate use of mobile phones, wireless carriers years ago got landline companies to treat such calls as local. Wireless carriers reimbursed landline companies for the lost toll revenue — a process known as reverse billing or wide-area calling.

Reverse billing diminishes

Reverse billing has diminished over time, largely because wireless companies acquired numbers in more rate centers as their customer base exploded.

For example, in New York state, fewer than 6 percent of wireless phone exchanges still employ reverse billing, said Michael O’Connor, a director of federal regulatory issues at Verizon.

Similarly, Sprint PCS estimates that wireless billing covers fewer than 5 percent of its customers, said Jack Weyforth, manager of carrier interconnection. AT&T Wireless spokeswoman Rochelle Cohen said “a very small percentage of our customers have these sorts of phone numbers.”

On Nov. 24, reverse billing will begin to die altogether. The FCC is changing how phone numbers are allocated to different providers and in many cases reverse-billing systems aren’t sophisticated enough to deal with that switch.

The final blow to reverse-billing should come next year as consumers get “number portability,” the right to keep their mobile numbers if they switch carriers.

Michael Altschul, general counsel for the cell-phone industry group, said local phone companies asked regulators in several states to let them kill reverse billing.

That forced wireless companies to establish their own connections in local rate centers by leasing costly equipment and space from landline companies, he said.

“We’re disappointed with the (local phone companies) that they’re discontinuing this service, because it was meeting the needs of customers,” added Diane Rainey, a spokeswoman for wireless carrier Nextel Corp. Unclear how many affected

Sam Simon, chairman of the Telecommunications Research & Action Center, a consumer rights group, said complexities of the phone system make it unclear how widespread the new charges will be.

No phone company would give details on where people could be affected.

All nine states where BellSouth Corp. is the local phone provider got rid of the old billing system by Oct. 1, spokesman Jeff Battcher said.

In the 14 states served by Qwest Communications International Inc., the change is scheduled to take effect in November, though Qwest is working on ways to extend the old system wherever possible, spokeswoman Carey Brandt said.

Many SBC Communications Inc. customers experienced the change several years ago. People in Texas, Oklahoma, Arkansas, Missouri and Kansas will begin to see it this fall, SBC spokesman Kevin Belgrade said.

Copyright 2002 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

———–

-Ian.

—– http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020828/tc_nm/ telecoms_wireless_dc

Technology – Reuters U.S. Wireless Internet Users Reach 10 Million Wed Aug 28,12:05 PM ET

RESTON, Va. (Reuters) – Nearly 10 million active Internet users in the United States check e-mail or surf the Web for news or local services via mobile phones and handheld computers, a research group said on Wednesday.

ComScore Media Metrix, best known for its monthly surveys of most-popular Web sites, said it found that 5 million of the 19.1 million users of handheld computers and 5.8 million of the 67.2 million U.S. mobile users have wireless Internet access.

Dual use of both wireless Internet phones and handheld computers by some consumers shrinks the absolute number of U.S. wireless Internet users to 9.9 million, the market research group said of its initial effort to survey the extent of wireless Internet use in the United States. The 9.9 million figure represents 11 percent of U.S. wireless users.

Males make up 72 percent (6.5 million) of wireless Internet users, compared with overall Internet usage, where 48 percent are men and 52 percent are women, according to comScore’s studies of adult Internet use.

“Although wireless Internet usage is still in its relative infancy, these data prove there already is a significant wireless Web audience,” said Peter Daboll, president of the comScore Media Metrix Internet measurement unit.

“While there are more Internet users with cell phones, a much higher proportion of PDA owners report using those devices to go online,” he said in a statement summarizing the results.

The survey also found that 53 percent of online wireless users are between the ages of 18 and 34, while 42 percent are between 35 and 54. Just 4 percent of people over age 55 have joined the trend.

The figures again contrast with general Internet usage via computer, television and other outlets, where 40 percent of Internet users are between 18 and 34, 46 percent are between 35 and 54 and 14 percent are 55 and older, comScore said.

The survey was conducted among its group of 60,000 active Internet users aged over 18. Participants in the survey were asked what devices they carried with them and specifically whether they used these devices to access the Internet.

Wireless Internet devices counted in the survey include mobile phones with built-in Internet browsers, handheld electronic organizers running Palm, Microsoft or Linux ( news – web sites) software, and also some of the newer Blackberry e-mail pagers.

The company said the survey was the first in a planned quarterly survey of wireless Internet usage among its group of personal computer users. It is studying ways that it could eventually track actual mobile phone usage, a spokesman said.

———–

——- http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020828/wr_nm/ autos_toyota_internet_dc_1

Toyota Unveils New Car Internet Network Wed Aug 28, 5:46 AM ET

By Edwina Gibbs

TOKYO (Reuters) – Toyota Motor Corp unveiled on Wednesday a second-generation car Internet network which offers a wide range of interactive ( news – external web site) services from downloading music and playing games to e-mail and e-commerce.

Japan’s largest automaker said its new network, called “G-Book,” had advanced in leaps and bounds from its current service “Monet,” which had primarily offered basic information and car navigation services.

Unlike its predecessor and other conventional car-Net services offered by Japanese automakers, “G-Book” does not require a cell phone to connect, using instead a data communication module.

That allows Toyota to offer a flat-fee service, meaning subscribers do not have to worry about log-on time costs.

In addition to the terminal on the dashboard, the network will also be accessible from cell phones, personal computers and personal digital assistants.

The automaker declined to disclose how much it would be charging for the new services or the amount it had and would be investing to develop the network.

“We are aiming for it to be a very affordable service,” managing director Akio Toyoda told a news conference. He added that more would be revealed when the automaker releases its first model with the terminal this autumn.

He emphasized that the network in itself was not necessarily intended to be profitable but rather that Toyota saw it as part of a natural development in the business of selling cars.

BUT WILL IT SELL?

Despite the technical advancements and greater range of features, Toyota is expected to have a tough time convincing Japanese consumers they need the network. Many of the services are already available on cell phones and its current service “Monet” never got far off the ground. Toyoda said around half of Toyota’s passenger car drivers used some kind of car navigation service and that he hoped around 30 to 40 percent of them would eventually become subscribers of “G-Book.”

Other features offered by “G-Book” include driver assistance if the car breaks down, with Toyota setting up a new call center. It also offers navigation and information services, with the terminal able to read out customized news such as stock market updates and offer restaurant information near where the car is been driven.

Information such as navigational maps, basic software, music and games can be stored in small secure digital cards. New information can be downloaded from Toyota’s stand-alone terminals installed at convenience stores and gas stations.

In the future, drivers will also be able to control home appliances from their vehicles, for example turning on the air conditioner shortly before arriving home.

The G-Book will be installed as a standard feature in the first vehicle released in autumn. In subsequent models it will either be standard, or an option depending on the car.

The network will be, at least for the time being, a Japan-only service.

“Japan digital technology is two to three years ahead of the rest of the world and it’s only in Japan that we have 40 percent of the market. In other countries, it’s not clear whether firms would be so willing to develop content for us,” he said.

Toyota has an agreement with General Motors Corp to look at offering its Internet services on the U.S. automaker’s cars in Japan, and the two firms are still considering the move.

Rival Honda Motor Co will also be unveiling a new Internet and navigation service on Thursday.

———–