Falling Apart?

This just in:  Vancouver has been ranked fourth on the world’s list of least affordable cities.  This is well ahead of cities like Manhattan, San Francisco, London, Paris, and Hong Kong.  As most rational people know, the city’s thundering real estate market has been bolstered by rampant speculation and constant construction of new condominiums.. but salaries, and the city’s economic development, have not kept pace.

The survey quoted in the article cites research indicating that the cost of housing in Vancouver is massively disproportionate to median salaries earned by its residents, specifically when compared to other cities around the world.  The median house price in Vancouver as of the time of the survey is 8.4 times the median income — 8.4 years’ average income to purchase a house, compared to the average median in Canada: 3.5.

What this tells you is that the fundamentals that support high real-estate prices are simply not there in Vancouver.  People just don’t earn enough income to sustain this market at such lofty prices whereas in cities like New York and San Francisco, where real estate prices are indeed higher, median incomes are substantially higher and thus can support high prices.

Vancouver is plagued by a number of problems that keep the salaries of its citizens low:

1. Affordable commerical real estate is hard to come by in the city — leading in some cases to a perverse reverse-commute where urbanites must schlep out to the suburbs to their workplaces — but more importantly this discourages companies from locating here.
2. Most large cities with expensive downtown cores operate as financial centres — the aforementioned London, Hong Kong, and New York spring to mind.  Vancouver does not, except for our storied love affair with ponzi schemes.  Without the sustaining flow of capital through our city there is highly limited opportunity for local investment.
3. We’re still a bunch of tree-cutting, pickaxe-wielding hicks.  And BC’s resource industries, the bread and butter of Vancouver for more than 150 years, are weak thanks to everything from the US softwood lumber tarriffs to Kyoto to a number of key mining company collapses.  Our province has failed to diversify its economic base substantially away from resource businesses.
4. The advanced industries like software and aerospace that keep California sizzlin’ have failed to grow in scale in this city.  Investment in this area is weak, with very little private investment and weak government support (nearly all of the Venture Capital in Vancouver is government-derived).  We did however blow >$500 million on a handful of useless fast ferries, though.  Two notable exceptions are alternative energy and biotech.  For now, at least, they are humming along.
5. The film industry, which we in BC have courted for decades, is a fickle bride.  Since productions are built for each project and torn down when completed with little long-term planning, unfavourable economic winds mean that producers can pull up stakes and shoot in South Carolina, Mexico, or wherever they can cost-optimize.  In any case, the profits are retained in New York and LA… like a Mumbai call centre, we’re just an outsourcer.
6. Drugs, and by “drugs” I mean the cultivation and distribution of marijuana, constitutes probably the largest industry in BC and it flies completely under the regulatory / taxation radar.  Conservative estimates peg this at between $5Bn and $7Bn per year.  These people have a hard time getting mortgages.  They also tend to be undesireable tenants, since they tend to get arrested/shot at/sent into hiding — that is if they don’t blow up their penthouse with a meth lab.
7. Our transportation infrastructure is pathetic, particularly when compared with major metropolitan areas (of which Vancouver is now one) such as Boston, Montreal, Toronto, New York, London, Tokyo, and others.  If we wish to become a center of commerce then we need to be able to move people around better.  Skytrain is a laughing stock and the West Coast Express, which goes to a handful of proximate suburbs from the downtown core twice a day each way, doesn’t even merit comparison with the British Urban Railway system.  Our highways (such as they are) subject people to multi-hour commutes to travel 20km.  We have failed, failed, FAILED to build infrastructure and it will continue to haunt the city for decades to come.

For those of us in the technology industry, certainly during this housing price spike, Vancouver seems an illogical place to locate our startups or ply our trades in information technology.  While the average condo price can be as high as 2x-2.5x the price of a comparable condo in Toronto or Montreal, our salary variance is just 103.5% the national average, versus 104.2% for Toronto and 103.9% for Montreal (this according to the 2009 Robert Half Salary Guide for Technology Professionals).  While we spend more to live here in Lotus Land, we sure don’t make up for it in income.

Comparing Income to Housing Prices

So how high is too high?  Right now we are finding out.

If you were blindsided by the Vancouver Real Estate crash then you were clearly in a profound state of self-delusion.  Evidently that list of deluded fools includes our civic leaders who played russian roulette with the city’s finances, underwriting the now disastrous Olympic Village project in which the taxpayers stand to lose as much as $750 Million.  Still, even amid the free-falling values, Realtors and Developers are outright lying to you… inviting you to join in their deathmatch with catch phrases like “don’t wait too long” and “strong fundamentals“.  Where have we heard that before?  Oh right, it was John McCain, about the US Economy in September – days before it collapsed.  Oops.

UPDATE: In a passionate article, former mayor Sam Sullivan says the Olympic Village is not a clusterf*ck.

Speculators and developers will beg to differ (they’re invested in fostering positive vibes) but remember:  they’re betting with your money, not their own.  Condos down the street from ours were forced into liquidation at 40% off, and there have been stories of other developers dumping their inventory at similar price cuts.  This is the beginning of a trend, not a sign of the bottom, so if you’re foolishly lining up to jump in at this point, you get what you deserve.

Not until a software engineer making $60K-$70K per year can buy a 1-Bedroom apartment in the city will the fundamentals be aligned and the market be stabilized.  This means mortgage + maintenance of less than $1500 per month using the 30% rule.  On a 25-year mortgage that probably means this 1BR apartment has to be less than $200K.  If the research that started this article can be believed, we should expect an adjustment of as much as 60% across the board to bring Vancouver back to the Canadian mean.

So in other words, wait ’til the bottom really drops out, Vancouverites..

And then we can start figuring out why no one in this city (not even the property developers, after 2007) makes any real money.

This is a critical opportunity for you to vote against Rogers with the only ballot that counts: your wallet. You too will be able to purchase unlocked 3G iPhones from him on eBay about a week later.

Why go to the trouble? Well, let’s just say I’m conflicted. I want the new iPhone (love my old one) but I don’t want Uncle Ted taking my purchase of one as an endorsement of his brutal pricing plan. The Globe & Mail makes the following comparison:

“For example, for $75 a month, Rogers provides 300 weekday voice minutes, 750 megabytes of data and 100 text messages. In the United States, a customer gets 450 weekday voice minutes, unlimited data and 200 text messages for the same price.”

750MB for a frequent iPhone user, particularly one who uses the navigation and web browsing tools, is nothing. But in particular it’s the three-year lock-in that requires the greatest consideration. At that end of the deal, Rogers has you by the short-and-curlies. And your obligation to them will almost certainly outlast your 3G iPhone. Needless to say, many of us are pissed.

So how does it work? Well, let’s just say that you can finally thank the French for something.

Thanks to French law, it is illegal for Apple (or any mobile phone handset maker or carrier) to sell a locked phone in the French marketplace without also making the same device available in the popular pay-as-you-go mode, fully unlocked and portable to any carrier.

This puts a stick in the mud for Apple’s lock-in plan and means that France will likely be selling a substantial number of 3G iPhones, until ZiPhone learns how to software unlock them, to eBay resellers like my friend.

So yes, please go and sign the petition at RuinediPhone.com but, since I know you’re going to buy one anyway, get the French iPhone instead of buckling under peer pressure to lock into Rogers’ data plan. It might cost you more in the short run (ironic) but in the long run you will force things to change.

Software unlocking has already forced several key changes in Apple’s strategy that favour the consumer. But a flop of Rogers’ package pricing on the Canadian market can send a clear signal to both companies, and their shareholders. Industry Canada, which should be paying attention, can and most definitely should censure Rogers, and its wireless competitors for a long history of market-limiting pricing (not limited to the iPhone launch in Canada) that has rendered our country a wireless backwater.

Rumours that they’re nosing around in other cities are probably based on the fact that the Swedish kick-off discussions are still preliminary and that the NHL is exploring other possibilities. Earlier reports had them starting the season in Prague. I doubt this means they’d do this on any real scale, with a bunch of teams in a bunch of cities, but most likely another one-off like they did in London and, earlier, Japan.

However, I’ve now heard and read the Swedish rumours from a bunch of sources including my friend JR (who forwarded the Swedish piece). So this seems a little more solid than the others.

If you squint a little, that’s kind of how professional hockey began, more than 125 years ago, in the ponds and rinks of Ottawa and Montreal. Ironically it was in Buffalo where the beautiful game captivated the imagination of my favourite author, F. Scott Fitzgerald, inspiring him to become a sports writer. Even with more than 45 minutes of delays for snow clearing, hole patching, and refreezing, it was a great game which took hockey back to its roots. I think that’s an important point.

Dan Barnes, an Edmontonian, gloats that this happened first at the 2003 Heritage Classic in Commonwealth Stadium, and it’s a very good article outlining the motivations and tribulations that led to that successful effort at an outdoor game. He also advocates some other changes and innovations for the NHL season schedule.

Before I read his article I had opined a few days ago to Rhys that the NHL needs to take it on the road more often. This year the season opened between Stanley Cup winners the Anaheim Ducks and the L.A. Kings in the hockey hotbed of London, England in an event which garnered more buzz on this side of the Atlantic than it did in the UK. Leading up to that game, something (I think) more significant happened… the Kings played two exhibition games in Austria against Austrian League champions Red Bull Salzburg, and against Sweden’s First Division team Farjestad.

You can bet those two squads were up for a game against an NHL team, even one whose roster was as weak as that of the LA Kings. And you can bet Austrian fans (and those that drove from Munich and nearby in Switzerland) were treated to some great (though exhibition) play. But did the NHL do anything to promote those games? Did they even learn anything from the experiment?

Not likely. And you probably won’t see a lot of these again, except for yet more outdoor games in big football stadiums with lots of fans, in the same cities teams usually play in. Here’s a key problem: Unlike any of the other of the top 10 professional sports leagues on this earth, NHL teams are primarily financed from gate revenues at the stadium. Whereas, ticket sales are pure gravy for teams in other sports, which make most of their money from broadcast licensing and avertising, these dollars at the ticket counter the meat for NHL clubs. This means that when a team sacrifices those revenues to play elsewhere, they generally lose money.

The only reason the London game happened at all was that Kings owner Philip Anschutz also owns O2 Arena, and so was able to move the cash around his various enterprises. But for that little tidbit you’d be unlikely to have seen the game there.

In 1997 and 1998 the NHL opened the season with two games each in Japan in the run-up to the Nagano Winter Olympics. Although the League declared these a success there is some evidence that they were expensive, under-supported, economic failures — and the second of these series practically ruined the San Jose Sharks’ season, resulting in the league’s longest consecutive road trip. That has made Bettman’s promise to continue the initiative difficult to fulfill.

I’m not sure that developing a fan base in Japan particularly benefits the NHL. One thing that helps an audience identify with the players is seeing people who are like them. Unfortunately, the best the NHL could offer up to Japanese fans at the time was Paul Kariya.

Moreover, the problem with these being regulation league games (for points) is that these far-flung contests have to be woven into the NHL schedule. And after playing them, teams have to make the journey back to the US and Canada, adjust to pretty considerable JetLag, and hit the ice again for a real league game within 24-48 hours. This doesn’t exactly encourage them to want to sign up.

Watching the Spengler on TV and reading Paul Romanuk’s excellent blog on the tournament reminds me that there really is something special about how professional hockey is conducted in Europe. Having played there and seen how fans react to the teams and vice-versa, it’s reminiscent of what I can only presume to have been the case during the heyday of the NHL, through the 1950s, 60s, and 70s.

You may have noticed that 30% of the players in the NHL are European, but not one of them is from the UK. In fact outside of England’s foundering attempts to create a successful hockey league, Europe has a well-supported hockey community and Sweden, Switzerland, Russia, the Czech Republic, Germany, Italy, and Denmark all have vibrant professional hockey leagues with many fans. So why not support them, and in the process pull more fans to a direct interest in the NHL?

There’s already a revolving door for players between the NHL and leagues like the DEL … why not one for the fans as well? By my observation the relationship between hockey fans in Europe and the NHL is at best superficial. When the Washington Caps made German-born Olaf Kolzig their #1 goaltender, plenty of German hockey fans went out to buy Capitals jerseys with his name on the back… but are they staying up late to watch games? Ordering an NHL channel on digital cable (if there is such a thing)? Picking their favourite players for hockey pools? Not likely.

The Exhibition season for the NHL is actually rather half-hearted. Fans generally aren’t as enthusiastic about the games because the teams field the B-squads, holding their celebrities in reserve for conditioning and in fear of injury. They are also rarely broadcast on television, and as far as selling tickets goes, teams fill the seats for these throw-away games by stacking the games into full and partial seasons’ ticket packs and with give-aways .. for many teams there’s little to no honest profit in the Exhibition season.

But there is one nice thing about Exhibition games … as the LA Kings proved, you can pretty-much do whatever you want and as a bonus, you can stagger and schedule them vis-a-vis the regular season however you’d like. Some teams see the exhibition season as a necessary evil … I see it as a potential problem-solver.

My Modest Proposal is to therefore do two things during the Exhibition season, giving each team the choice of either:

1. Exhibition games in small North American towns with able support for a larger-scale game (ie. 5000+ seats in a hockey arena). Unfortunately this is too early in the winter for elaborate outdoor games. … or …
2. Exhibition play against Tier 1 club teams in Europe, perhaps a road trip consisting of 4-5 games each with a 3-day layover prior to the season start. Share the gate revenues with them (some play in NHL-sized arenas) to cover costs.

This would be a fabulous way to enhance the dialog between fans in Europe and NHL teams, and also to support the small communities which couldn’t support an NHL team (in Mr. Bettman’s opinion) but which still have rabid fan bases built around AHL, University, or Junior hockey teams. Again, this doesn’t detract from the success of those smaller-market teams but likely adds enough water to the tide to float all boats.

Let’s not kid ourselves that big-stadium outdoor games like the Heritage Classic and today’s effort in Buffalo really do anything to enhance the market for the game. Similarly I think it could be argued successfully that both experiments in Japan and in London were not cost-effective in enhancing the league’s market reach.

If the goal is making more money on an exciting winter event, fine. Let’s embrace these pond hockey games as novelties, for sure, and by all means keep doing it (teams report making more money doing so, so within reason I say fill your boots).

But if the goal is expanding the revenue from the league and growing beyond simply operating on gate receipts, let’s also work toward a schedule that does something to enhance the game and its growth; that brings in a new active global fan base; that invigorates the game with a dash of European flavour. There is natural affinity there, and a largely untapped market.

Let’s work toward growing the sport and fostering an exchange with the European leagues that will enhance the game both on and off the ice; and which also respects the contribution made by thousands of communities around the globe that contribute players to this game.

So no surprise then that CBC Marketplace has taken the boilerplate “bust a mechanic” TV camera entrapment scheme and used it to go after the 21st century’s answer to the auto mechanic — Geeks. In this video they busted Geeks On Call Nerds on Site (thanks to the Geeks On Call pseudo-lawyers for clarifying this), Geek Squad, and the nerds in VW Beetles from a number of other smaller organizations making all kinds of wacky diagnoses of the planted problem (albeit a persnickety one) of a damaged RAM DIMM.

I for one am disappointed they didn’t show more. From my experience with (fellow) geeks, I’m surprised there weren’t even more hare-brained recommendations than the $2,000.00 “clean room” in London, Ontario.Like grease monkeys, the geeks are becoming used to dealing with customers who revere their “talents” (read: dubious obscure knowledge) and over-simplifying problems to aid in comprehension. Also like auto mechanics, the temptation to exploit this gap in understanding is tough to resist.The difference is that in the automotive world, most of us have fled to the eager arms of dealer-affiliated repair shops. The reason is the feedback loop: if we feel ripped off, if we are concerned about the qualifications of the mechanic, or if we doubt the merit of their diagnoses these can all be addressed with the regional office of the manufacturer or beyond, and the mechanics know that.

But in the Personal Computer world, the reps that are being busted are exactly the people we’re used to trusting: technicians affiliated with major retail, software, or hardware brands. And while the feedback loop appears as though it might be there, these large companies have done a much better job than the auto manufacturers of insulating themselves from the petty concerns of their customers.

What the CBC has really done is expose the entirety of the business model associated with the mobile computer repair business: the upsell. They exist largely as a customer retention program for retailers, so that the first sale becomes a platform that results in a total lifecycle of sales as your computing equipment “matures” into planned obsolescence. Of course they’re just TV reporters so they didn’t really clue into that, so there’s little about this story that will surprise any of us within the industry.

Still, it’s fun to watch self-important geeks who 30 years ago would be wiping the grease from their hands as they waxed poetic about the ailments of our family cars, come up with a plethora of totally overblown and completely irrational conclusions. That said, a blown memory DIMM is difficult to diagnose, especially if the computer boots (which is not clear in this report).

Fortunately, there are a lot of geeks out there who can fix this kind of stuff, and you probably know one. If you do, then certainly the personal accountability feedback loop will probably do more good than any corporate accountability feedback loop. Just don’t call me — my Volkswagen is a Jetta. 🙂

-Ian.

Arrogance of empire Paul Foot Wednesday August 20, 2003 The Guardian

In hospital last month for a (literally) nerve-wracking operation on my back, I was lucky enough to have with me an advance copy of Robert Harris’s novel Pompeii. At one level, the book is a thriller that kept me going through the entire sleepless night before the operation. At another, it is a thinly disguised satire on the arrogance of an empire that extended itself by force of arms so far across the world that it ignored elementary social and environmental problems at home. The fact that Pompeii before the eruption of Vesuvius was home to the richest Roman exploiters adds to the irony.

At the beginning of the book, Harris quotes, quite irrelevantly so it seems, the statistic that ancient Rome provided itself with more water than New York City did in 1995. Whether he chose this city by chance I do not know, but over last weekend, just a week before Pompeii was published, millions of citizens of New York and other US cities were plunged into darkness and chaos. They were obliged to suffer at least a tiny fragment of the agony of the people of Iraq, similarly cut off from electricity.

The Iraqi mess is the direct result of old fashioned US/British imperialism. The misery in New York and surrounding cities was caused not by terrorism – as many people there hastily assumed – but by capitalism, in particular its historic failure sufficiently to invest in unprofitable services that most people need. For a fleeting moment, likely to be repeated in the future, the citizens of Iraq and the US simultaneously became victims of the reckless greed of corporate America.

Thank heaven such horrors could not happen here. More than half a century ago, a Labour government nationalised gas, coal and electricity. Doggedly the Labour ministers responsible, led by a wild-eyed revolutionary called Hugh Gaitskell, staved off the Tory attacks on these measures. It was, those ministers argued, nonsense to talk of competition and “free enterprise” in the field of fuel and power, on whose regular supply the entire nation depended – and which were more efficiently and fairly run by publicly accountable monopolies.

Such arguments were denounced in the US as communist, and the supply of power there stayed in the hands of free enterprise. Some of the results of that were on show at the weekend in New York, Ohio and even in poor old semi-social democratic Ontario.

Is this just a North American problem? Among the harassed electricity company executives who stammered in front of television cameras on the night of the power cuts was Bill Edwards, president of Niagara Mohawk. His company supplies electricity to more than a million people in upstate New York. For six awful hours, many of them were cut off from power. Mr Edwards said he couldn’t comment on the suggestion that Niagara Mohawk had caused the blackout, at least until after a full investigation. In the meantime he warned his customers to turn down the air-conditioning and turn off unnecessary lights.

Now you might think that Niagara Mohawk is an American or a Canadian company. But you’d be wrong. Niagara Mohawk was bought in January last year for £2bn by the National Grid company, a private firm in Britain. National Grid plc merged last October with the Transco/Lattice Group, thus forming a monopoly that provides everyone in England and Wales with all their gas and electricity. More and more of the efforts of the new monopoly have been devoted to buying up power companies abroad – it has spent nearly three times as much on buying companies in the US as on capital investment in power in Britain.

How did the stale old socialist power monopoly created in the late 1940s to provide British people with gas and electricity become a brand new dynamic capitalist monopoly snapping up not altogether successful power companies abroad? Simple. Among the first and, for the City of London anyway, the most profitable of the great Thatcher privatisations were gas (don’t tell Sid) and electricity. At a stroke, parliamentary responsibility for these crucial areas of public concern was transferred to private boardrooms, whose jumped-up executives, revelling in their new power, awarded themselves fantastic salaries and bonuses.

The Labour party was outraged at the proposal, and threw itself into furious opposition. In December 1988, Labour’s young frontbench energy spokesman denounced electricity privatisation. “We are proud that we took the industry into public ownership,” he said. “When we come to power, it will be reinstated as a public service for the people of this country, and will not be run for private profit.” The young man’s name

http://www.nytimes.com/2003/07/05/business/worldbusiness/ 05VOIC.html?pagewanted=all

CCRA, Ghana, July 3 — The Internet bubble has long since popped in the United States, Europe and Asia. But in parts of Africa the Internet is serving as a powerful force for change, primarily by allowing companies and individuals to make international telephone calls far less expensively than through conventional channels.

Calls in and out of sub-Saharan Africa have long been among the world’s most costly, strangling business opportunities and burdening ordinary people. Services have been tightly controlled by government-owned telephone companies, many of which are rife with corruption and incompetence. Governments also imposed high tariffs on international calls, seeing it as a lucrative source of revenue.

But now, thanks to what is called voice-over-Internet, phone alternatives are flourishing, sharply lowering costs and expanding opportunities for business and consumers in some of the poorest places on earth — even as they pose a competitive threat to government-sanctioned telephone companies.

Sending telephone calls over the Internet is gaining ground in Africa because it makes possible a range of new services, linking the sub-Saharan to the world’s major industrial centers in ways unimaginable only a few years ago. And better digital connections, mostly via satellite, are raising the hope that Ghana — the most peaceful country in a West African region besieged by civil wars and ethnic strife — may become the regional hub for an information-technology industry.

“As Ghana improves its connectivity to the outside world, it has the potential to become for Africa what Bangalore became for India,” said Paul Maritz, a former senior executive at Microsoft who recently visited Accra to survey the nascent high-tech scene here.

Last Thursday, at a United Nations conference in New York, the secretary general, Kofi Annan, delivered a message that developing countries also need to include wireless access, known as Wi-Fi, in building an Internet system.

“It is precisely in places where no infrastructure exists that Wi-Fi can be particularly effective,” Mr. Annan said, “helping countries to leapfrog generations of telecommunications technology and empower their people.”

As the movement advances, though, many government-owned telephone companies, which dominate wired service in most African countries, are fighting a rear-guard action.

Internet telephony “is presented as the salvation for business and society in Africa,” said Oystein Bjorge, chief executive of Ghana’s national telephone carrier. “It is not.”

Mr. Bjorge, a Norwegian telecommunications consultant hired recently to do battle against the Internet telephone services, said it wreaks havoc with the economics of phone companies. Here in Ghana, the national phone company is waging a sporadic campaign against its own citizens who use the Internet to make or receive telephone calls from America and Europe, periodically turning off the lines of those suspected of doing so.

Three years ago, the government even jailed the heads of some of Ghana’s leading Internet providers. Though later exonerated by a court, the dissidents fear another crackdown. “Internet telephony is changing the whole power structure,” said Francis Quartey, chief technology officer of Intercom Data Network and one of those jailed. “The dangerous thing is that the power elite is responding out of fear and ignorance.”

Despite this opposition, American companies are experimenting with new ventures in Ghana, seeing if enthusiasm for Internet telephony can transform local technology entrepreneurs into a force for genuine economic advancement.

For example, Rising Data Solutions, which is based in Gaithersburg, Md., introduced a call center here last month, where a dozen Ghanaians — trained in American-style English — are trying to sign up customers in the northeastern United States on behalf of a wireless phone company. At least three other call centers are expected to open in Accra later this year, all relying on Internet telephony instead of telephone carriers.

Internet telephony also aids companies like Newmont Mining , which is searching for gold in Ghana, the second-largest gold producer on the continent, after South Africa. To help manage its operation, Newmont plans to link its operations within Ghana to the wider world through the Internet.

Acquiring reliable phone service is essential, foreign investors say, which is why they bypass the government-owned telephone company. Ghana Telecom has an order backlog of more than 300,000 lines; bribery is the fastest — indeed, usually the only — way to obtain new service. Even those with service suffer from frequent failures and inaccurate bills. Roughly every other call results in a busy signal, an indicator of what Ghana Telecom calls “network congestion.”

Under the circumstances, Internet telephony — which has failed so far to make serious inroads into the American telephone market because of lower voice quality — seems positively fabulous to many weaned on Africa’s creaky systems.

“Internet gives me control over my destiny,” said Sambou Makalou, chief executive of Rising Data. “My business needs to be up 24-7; we can’t get a busy signal.”

Busy signals are common in Ghana because the public phone networks are overloaded. As recently as four years ago, a dial tone was among the scarcest resources in the country, which had fewer than 200,000 phone lines in a nation of 19 million.

Few people realized how much demand for phone service was waiting to explode until Ghana’s most successful wireless company, Spacefon, was introduced in 1996. Before it started, executives thought the potential customer base was probably 3,000 people, at most 12,000. Seven years later, Spacefon has more than 300,000 subscribers.

The country’s total phone lines are now approaching 750,000, roughly two-thirds of them wireless. But completing a call is still difficult, especially between rival networks (there are five), and neither Ghana Telecom, nor the country’s legal wireless operators offer a reliable connection to the Internet.

In response to these limitations, private businesses have built scores of data networks, relying on satellite- and radio-based Internet-access systems.

But telephone service became appealing because of the high network costs: Companies typically pay from $2,000 to $5,000 a month for a robust connection to the Internet, an enormous sum when economic output per person is only about $400 a year.

“I’m paying $2,000 a month for Internet access, so I want to use the technology to the fullest,” said Austin Addo, chief information officer of Ghana Link Network Services.

Mr. Addo’s company, which began operations here early this year, helps the government calculate duties on goods imported into the country, relying on frequent updates, via the Internet, of product values. The company’s partner is based in Madrid, so Mr. Addo uses a standard device to make international calls over his computer network. He is not billed for the calls, which would otherwise cost him roughly 75 cents a minute, including the cost of line.

His telephone calls are not really free, since he pays $2,000 a month for Internet access. But he is still saving lots of money because he can speak as long as he wants without worrying about the cost. “Five years ago to get this level of communication,” he said, “I’d have to fly to Spain — several times a week.”

Such productivity gains have been a cause for celebration almost everywhere in the world. But official anxiety over Internet telephony is widespread throughout Africa and particularly rife in Ghana. At a public meeting in May, held at the largest Internet cafe in Accra, a regulator defended the government’s latest campaign against those who use the Internet to bypass authorized telephone providers. “The players have been apprehended or will be apprehended soon,” said Bernard Forson, deputy director of the National Communications Authority of Ghana.

The government is not opposed to any particular technology, Mr. Forson explained, but merely wants “regulated entities to provide telephone service,” not unlicensed and untaxed wildcatters.

Other African countries face a similar quandary, aware of the appeal of Internet voice service but fearful of its damage to the state-owned telephone company.

Neighboring Togo, for instance, allowed Internet telephony until the end of last year, when the government cracked down on behalf of Togo Telecom. So many foreign calls in tiny Togo were being routed over the Internet that a small “com” center — ubiquitous in Africa, offering calls for a fee — took in $10,000 a month from just two phones.

But some African countries have embraced Internet telephony as a way to end decades of frustration. In Nigeria, for example, the government has not officially approved telephoning over the Internet but looks the other way, partly to ease congestion on its authorized networks.

Still, the legal confusion surrounding Internet telephony has prompted some to avoid it. Affiliated Computer Services , which is based in Dallas, set up shop in Accra two years ago, relying on a private satellite connection to the Internet that supports both a data and a telephone network. Today, it is one of Ghana’s largest private employers, with 1,200 people and plans to hire another 700.

While the company runs call centers in Jamaica, Mexico and India, it does not intend to do such telephone work in Ghana. “We can’t use satellite lines” because of the brief delay in hearing a response, said Tom Blodgett, the executive who started the Ghana operation. And for now, he adds, “there is no suitable wired alternative.” A legal one, anyway.

But for all their efforts to restrain the movement, African telecom companies are probably fighting a losing battle.

“Periodically the police confiscate equipment or the telco turns off phone lines,” said Russell Southwood, a London-based consultant and publisher of a weekly newsletter on Africa’s telecom scene, Balancing Act’s News Update. “But it’s about as hopeless as Canute trying to turn

-Ian.

——- http://story.news.yahoo.com/news?tmpl=story&cidW8&ncidW8&e=9&u=/nm/ 20030625/ts_nm/britain_alsahaf_dc

Report: Iraqi Ex-Information Minister Captured 2 hours, 16 minutes ago Add Top Stories – Reuters to My Yahoo!

LONDON (Reuters) – Britain’s Daily Mirror said on Wednesday U.S. troops had arrested Iraq (news – web sites)’s information minister under Saddam Hussein (news – web sites), Mohammed Saeed al-Sahaf, at a roadblocks in a Baghdad suburb.

There was no immediate reaction from Washington.

The ex-minister, dubbed “Comical Ali” for proclaiming the defeat of U.S. forces even as they moved into Baghdad, had been hiding out at a relative’s house watching satellite TV, but was caught on Monday night, the paper said in a report from Baghdad.

“He has some serious talking to do … this time,” a “senior coalition source” was quoted as saying. There was no independent confirmation of the story and no other sourcing.

In honour of the beautiful summer we’re having DJ Heavy Smurf has created a new mix for listening to while at your local beach, tanning salon, lawn, or (if you’re Martha Stewart) in your jail cell..

Paper Thin Suntan packs 18 tracks on one mix, journeying from 92 BPM to 117 BPM over 79 minutes and 55 seconds. Insodoing it winds its way around the world from France to Norway to Lebanon to Honolulu to Brooklyn to London and Brazil,

The Smurf hopes you enjoy it at: http://heavysmurf.com

Track listing: “Paper Thin Suntan”

Air All I Need 92 BPM Jaffa Sneakin’ 94 BPM Elak Remember Me 96 BPM Royksopp Cry Baby 96 BPM Thievery Corporation Lebanese Blonde 97 BPM Bebel Gilberto Bananeira 97 BPM Fantastic Plastic Machine Honolulu, Calcutta 98 BPM Blue Boy Remember Me 99 BPM Roy Davis, Jr. Lyrical Trip 101 BPM Nightmares on Wax Ease Jimi 102 BPM Fila Brazilia Freedom 103 BPM Saint Germaine Acid Jazz 105 BPM Royksopp Eple 107 BPM Marschemellows Soulpower 110 BPM Telepopmusik Breathe 112 BPM Spiller Groove Jet 114 BPM Fred Derby 116 BPM Jamiroquai Little L 117 BPM

It’s encoded as 192kBps MP3… like most of the others…

-Enjoy!

Here are details on Version 2.0

-Ian.

——– http://story.news.yahoo.com/news?tmpl=story&u=/ap/20030513/ap_on_hi_te/ microsoft_hoax

Microsoft: ILoo No Hoax After All Tue May 13, 7:14 PM ET By HELEN JUNG, AP Business Writer

SEATTLE – What’s true with the iLoo? Microsoft Corp. and its public relations firm changed their story — again — Tuesday about whether the United Kingdom division had been developing an Internet-enabled portable toilet.

On Monday, three representatives for the software giant told news agencies, including The Associated Press, that an April 30 news release trumpeting the “iLoo” was a hoax and apologized for “any confusion or offense.”

But on Tuesday, the company reversed itself, saying the iLoo was real but now has been killed.

“We jumped the gun basically yesterday in confirming that it was a hoax, and in fact it was not,” said Lisa Gurry, MSN group product manager. “Definitely, we’re going to be taking a good look at our communication processes internally.”

It’s a public relations embarrassment for a company famous for micromanaging news releases, interviews and promotional events.

“It’s definitely not how we like to do PR at Microsoft,” Gurry said.

The iLoo was described as a portable toilet equipped with a wireless (news – web sites) keyboard and a height-adjustable plasma screen with high-speed Internet access. Microsoft’s MSN division was “in the process of converting a portable loo to create a unique experience” in time for the summer festival season, according to the release.

Several news organizations, including the AP, carried reports of the project. An AP reporter specifically asked whether it was a hoax and was assured last week by Microsoft, its Portland, Ore.-based PR firm Waggener Edstrom and another PR firm in London, Red Consultancy, that the project was real.

On Monday, technology Web site CNET, based on a tip, wrote that the iLoo was a hoax and quoted Microsoft spokesman Nouri Bernard Hasan as saying, “I can confirm it was an April Fool’s joke.”

The AP and The Wall Street Journal also were told Monday by two company spokeswomen that the iLoo was a fraud.

On Tuesday, though, Microsoft said it had relied on bad information from a Microsoft employee in the United Kingdom who said it was a hoax, Gurry said. After more talks with people in London, the company determined it was a real project, after all.

The U.K. division likes to run clever and innovative marketing campaigns, Gurry said, and had thought an iLoo would appeal to the British. MSN typically allows its units to tailor their own campaigns to their regions, she said.

But MSN’s executive team, which had heard of the iLoo through news reports, took the unusual step of killing the project on Monday, she said, believing that the portable toilet “wasn’t the best extension of our brand.”

It’s still unclear how much work was ever done on the iLoo. Gurry said she did not know how much time or money was spent on it.

The company had said it was building a prototype and was in the process of converting a portable toilet. But MSN marketing manager Tracy Blacher said Tuesday in London that the company had not done that. Rather, Blacher, who described the project in the original news release that quoted her repeatedly, said MSN had some discussions with portable toilet manufacturers, which she said she could not name because she was not at her desk.