Electric Currents

Apple and the Peril of Success0
JR posted in Operating Systems, Web news, Devices on September 30th, 2008

I’ve (somewhat enviously) been following the success of Apple and their iPhone/iTouch success with the applications store.  Lots of good programs there and many of the small makers are receiving remarkable amounts of money from their creations.  This has been undeniably good for the software makers and the iPhone community.  More importantly, Apple has provided a single, convenient and reliable source for acquiring software for their device.

There have been some drawbacks to this.  First was that Apple was taking 30% of the price on any of the “for pay” applications.  When the initial wave of applications hit and about half were free and almost all of the remainder was priced under $5, this wasn’t much of an issue.  After all, how much was actually going to be involved with this App Store?  It couldn’t really amount to much revenue when compared to the devices themselves.

Then we started hearing about the success of the iPhone 3G and with it the success of the Apps Store.  Five millions iPhones quickly sold and just as quickly came the reports of 100 million applications downloaded.  Whoa.  That’s a lot of apps, even if half were free.  And the party hasn’t stopped.  Sales from the Apps Store appear to be continuing at that same pace as new iPhone buyers discover the universe of software they can download.

Watching this and comparing it to the rest of Apple now has me worried.  Sure the obvious reason for concern is the widely reported instances in which Apple has denied applications for the Apps Store.  There is also the developer concerns about the wide coverage of the very restrictive parts of the NDA.  But that isn’t what worries me.

The real source of concern is the success that the Apps Store has had in providing the very convenient and controlled single place to get applications for Apple’s devices.  This just feeds into the Apple tendency to want to tightly control and optimize the experience for the user.  They want to make everything so smooth and easy for us; while taking a reasonable profit for themselves.

Apple fans are long aware that one of the problems with being an Apple user is that it is more difficult to find software for their preferred platform.  Sure, they are comfortable with downloading and installing applications from the makers, but it isn’t easy to find software when most retail outlets only carry a tiny amount of Mac software, if any.

Now we start seeing the way that the Apps Store might change this.  What if there was an Apps Store that Apple managed for Mac software?  Just like with the iPhone, it could easily tap into your iTunes account for billing information.  Apple could control the offered software and insure that there was not hostile malware that was offered.  Wider exposure to the Mac community would be good for many software publishers and they wouldn’t have to fight with the software distributors for shelf space in retail stores.

But this leads even further to the ghettoization of the Mac just when it is starting to grow in popularity.  Just as more people are buying Macs and there is a growing demand for Mac software that the retail stores will want to serve, Apple could be taking in all the applications to the App Store, leaving no reason for retail distribution.  And Apple would modestly take a slice of the sale price (albeit less than the normal distribution chain would).  (Incidentally, getting a slice of the revenue that independent developers create has to be something that would make Microsoft salivate enviously.)

So a Mac Apps Store is unlikely at this point.  What will happen next?

Just recently, Apple instructed retailers to remove AppleTV displays and get ready for something new starting today (September 30).  AppleTV was a nice front end to the iTunes store and brought the elegant Apple experience to the HDTV, but it never really caught on with the public.  Popular with the hacking community, many people have expanded AppleTV’s capabilities greatly from the original product.

What if Apple brought the App Store to AppleTV?  Because the platform hasn’t been successful to date, it  is a good test area for whether adding the Apps Store will expand its market.  If successful there, the Apps Store concept could be expanded to the Mac itself.

Let’s see what happens.

Net Neutrality, not Net Stupidity0
JR posted in Web news on June 5th, 2007

George Ou, on ZDNet’s blogs, has an interesting article titled: “A rational debate on Net Neutrality“. In it, he makes excellent points about how the debate and proposed legislation regarding Net Neutrality are not always well thought out.

He rightly points out that when most people think of Net Neutrality, they are thinking about avoiding what he calls “off-ramp” prioritization. He labels the proposals from AT&T’s Ed Whitacre about charging Internet destination sites (like Amazon or Google) for access to AT&T’s customers as being foolish. He feels that the Internet destination sites have more power to punish a company that attempts to demand payment for access to their subscribers because if they cut off that access (or even degrade that access), the customers would rightly complain to the ISP.

Rather than mandate a strict net neutrality, he proposes to make illegal the deliberate degradation of traffic below “best traffic” service. Responding to the argument that this is a subtle and difficult to detect activity, he proposes that the fine for such be made very large (he named it a million dollars) and that a whistleblower receive half the fine as a reward for cooperating with government investigators. An engineer or auditor would have to know about the degradation and would therefore be strongly motivated to turn it over to the government.

Though he does not think that this is needed at this time, he feels that at most there would be an argument for a law against offering prioritization services to companies not directly connected to that service provider.

His statements reveal an excellent knowledge of the the way the Internet has worked to date and a balanced way of handling the increasing need for a means of handling the need for some means of handling the flood of traffic that video and other high-bandwidth services will demand.

The Web 2.0 Steamroller0
JR posted in Web news on November 6th, 2006

Any Kessler has been writing an astonishingly insiteful series of articles about the Web 2.0 challenge that is being faced by the historic Media Moguls (you’ll see what he means by this) in the US. Today, he gathered the 4 together in a summary article.

He points out that the Internet has broken the proprietary “pipes” that allowed the vertical integration that has traditionally driven the success of media. That vertical integration allows them monopolies on reaching a certain segment of customers. This in turn fed the mogul with enormous amounts of money by businesses that wanted to sell these people something.

Net Neutrality insight0
JR posted in Web news on July 24th, 2006

CNet had published an excellent defense of Net Neutrality by Caroline Frefrickson of the ACLU.  She is responding to Congressman Dick Armey’s contention that secure private property rights and consumer choice would preserve free speech on the Internet.

She makes the important point that Net Neutrality isn’t something new, but rather was US policy until 2005 when the FCC and Supreme Court effectively abolished that policy.  With that ruling the phone companies (with the quiet consent of the cable companies) began to talk about their desire to prioritize delivery of content to their customers.

To date, the US has maintained a remarkably hands-off approach to the Internet and it has worked well.  In the late 90’s, a similar proposal was made that there should be a regulation to ensure that ISPs didn’t interfere with the delivery of Internet content.  That regulation was rejected because there were dozens of ISPs in a given city all competing fiercely to provide unfettered access to the Internet.  If a particular ISP did not provide such access, it was easy to select another.

Times have changed in the broadband era.  What has come to be in most US communities is at best a two-headed monopoly with little ability for competition to move in.  Cable Intenet access can’t easily be replicated without the prohibitively expensive duplicate wiring to a community’s homes and the additional burden of applying to each community for a franchise to do that wiring.  The phone company’s broadband solution, DSL, was exempted from the requirements to give competitors access to their central offices which they were required to allow for competitive local exchange carriers.

Now both cable and the phone companies are beginning to look at their customers as a product to market to other large companies.  If Amazon wants to reach to our customers, Amazon should have to pay the ISP directly for that privilege.

Caroline Fredrickson correctly points out the incorrectness of this argument and the danger it represents.

Why we blog0
JR posted in Writing, Web news on July 19th, 2006

CNet is showing a summary version of a Reuters article about a report from the Pew Internet & American Life Project.  The subject is blogging and why we do it.

Not surprisingly, given the personal nature of blogs, the report found that 77% of bloggers post to express themselves creatively, not to get noticed or paid.  The primary subject (37%) was the blogger’s own life and experiences, followed distantly by politics and government (at 11%) with other topics at lower percentages.

In the ongoing debate about the popularity of blogs, the report found that 39% of US Web users read blogs on a regular basis.  This is much different from another recent report from Gartner which found much lower popularity.

To go with my personal take on things, I fall in that lesser group of people that blog to get noticed.  While I am not too concerned about my readership at the moment, I’ll admit that I have enough ego to want to be seen.  Ideally, my awesome insights into Internet and tech news should become a regular stop for people’s RSS readers.

Spyware: The Scourage0
JR posted in Privacy, Web news on July 7th, 2006

BusinessWeek has and excellent cover story on spyware illustrated by one of its chief creators, Direct Revenue (deliberately unlinked).

I don’t think that there are words strong enough to adequately describe how hated these parasitic programs and the people who make and distribute them have become.  The article starts off with the casual notation that the company received e-mail that included the word “die” 103 times, in a single month.  Other less savory terms are nearly as common.

The company is presently under investigation by the New York Attorney General, but claims it cleaned up its behavior several months ago.  From what the article claims, however, it may merely be a pause in the ongoing difficulty with this type of software.

Guaranteed Payola-Free0
JR posted in Web news on July 5th, 2006

Rafe Needleman of CNet wrote about PayPerPost, which allows bloggers to be paid for posting about particular products, events or services.  He feels that this will taint the trustworthiness of blog postings with undisclosed commercials disguised as independent reviews.

While certainly a risk, I don’t think that this is much of an issue.  Most bloggers are already hypersensitive about their reputation and readily disclose when they have received any freeby in relation to a particular posting.  In the Attention economy, reputation is a paramount concern.

All the same, a later post by Rafe pointed to some nice logos by Tim King for explicitly stating that one’s site is “payola free”.  I’m not certain if I’m concerned enough to add those to my site at this time, nor am I certain if the term “payola” is sufficiently universally understandable to be meaningful to an Internet audience.  Further, as Rafe points out, there isn’t yet a good way of enforcing the claim of being payola free.

We’ll see if this takes off.

Compromise on Net Neutrality0
JR posted in Web news on June 19th, 2006

CNet has an updated report on the Senate consideration of the communications bill.  A key point of debate in the Senate (and the US House of Representatives before it) was on the matter of net neutrality.

A recent amendment to the Senate bill would mandate a consumer “bill of rights” that would have the FCC police 9 principles (allowing consumers to access and post any lawful content they please;
to access and run any Web page, search engine or application that they
choose (including voice and video programs); and to connect any legal
devices they please to the network).

As the article notes, what these principles specifically don’t cover is the issue of charging for priority of traffic.  Many fear that with key deals to prioritize traffic for some favored sites, the remainder will immediately become less desireable.  Essentially the US broadband providers would be able to “pick winners” in any given market.  It is argued that this would stifle new, upcoming challengers when confronting well-funded established companies.

A simple example would be in VoIP.  Vonage wants to provide phone service, but your provider has their own service or a contract with a competitor and so gives network priority to packets from that provider leaving Vonage with poorer performance.

One solution would be to regulate broadband providers so they offer such services at the same price to all competitors of that particular service.  I have some doubts on this.  Given the phone companies behavior regarding behind the scenes subsidies of other divisions, I could see them charging unmanagable fees for service knowing that their own division could be subsidized by their other profits (or even the fees charged to other providers).  It is a start, but not an ideal.

Others point to the fact that the Internet has succeeded directly because there was no priority of packets, i.e., that it is a “dumb network” that treats all packets equally.  They believe that this practice should be promoted to law and thus the campaign in the US Congress.

I have to agree more with the latter opinion.  The desire by the broadband providers to make additional money by prioritizing packets seems on its face to be sensible; after all they need to pay for infrastructure upgrades to handle additional traffic.  What it doesn’t note is that other countries are doing infrastructure improvements without this prioritization and are even more successful in distributing high bandwidth content while simultaneously delivering better speeds than any US provider at lower prices than a standard US plan.

We should do better.

The Return of Turkey Guts0
JR posted in Web news on June 19th, 2006

We haven’t heard much from the world of turkey guts in recent months.  Late in 2003, a company called Changing World Technologies received a lot of science press coverage for their pilot plant in Philadelphia that was converting organic waste from a turkey processing plant into a high quality oil.  The oil was so good that it could be produced for an estimated $40 per barrel and was easily refined for anything that conventional oil could be used for.  They were in the midst of building a demonstrator plant in Missouri.

Like many readers pained by the rising price of gasoline, I wondered what had happened to the project.  After all, $40 per barrel sounds pretty good considering that crude is presently at just under $70 per barrel today.  Discover magazine’s April 2006 edition has answered the questions.

First, it turns out that scaling up the plant wasn’t as easy as the developers originally thought.  Building took more than a year longer than originally planned.  Then there was the tweaking which is still going on.

One of the problems was that the process was sensitive to differences in what was being fed to the plant.  Too much fluid in one batch required different tweaks than when they received truckloads of feathers.  Eventually they settled that by simply blending a number of loads into a more consistent gruel.

Second, their estimated price of product was well short of the $40 they were expecting.  One of these was understandable; they had originally thought that they were going to be paid to dispose of the turkey waste.  After a ruling from the FDA that allowed turkey producers to use their waste as part of the feedstock for turkey feed (something that is suspected to have lead to mad cow disease when done with beef), they actually have to pay the turkey producers for their waste.

Third, they were competing with products like biodiesel which has a $1 per gallon subsidy from the US federal government. Just recently they started receiving the same subsidy and started managing a profit of about $4 per barrel of oil produced.  Not a huge profit, but if the rules on waste change, a tremendous profit again.

Good news for the company is that there are several European countries that already have very restrictive waste rules and higher fuel costs.  There, the company would already be very profitable and doing the good work of getting rid of the waste.

Internet Neutrality - Tough Issue0
JR posted in Web news on June 16th, 2006

Ran across an excellent article about the need for neutral flow of packets on the Internet.  But this article isn’t just the latest in the normal doom and gloom of how bad things will be.  Rather Richard Bennet finds the balance to recognize that regulating the Internet at all carries its own peril as well.

What is his conclusion?  Oppose monopolies (and duopolies) at every turn, but in those instances in which you can’t prevent them, regulate them so they can’t abuse that monopoly.