pipes

Why do sheep need Twitter?

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Spot the broadband user in this picture

A House of Lords committee this week declared that British taxpayers must foot the bill for an internet that nobody wants – unless perhaps they have a second home in the country.

Some observations by the committee may be accurate: Britain’s broadband is slower than its rivals. But this doesn’t seem to be what vexes our noble and learned friends. Observations don’t amount to a rational argument – what the Lords are making is a very radical proposal. Huge and open-ended taxpayer funding must be committed, they argue, to build a national utility. One that will largely be used by sheep.

As every one knows, the nation’s finances are in a dire state. The national debt is increasing. So what’s the economic argument for new public spending? The peers won’t say: their report almost completely avoids making the economic case. To our knowledge, no study, public or private, has ever shown any benefit to UK plc from expenditure on rural broadband infrastructure. The committee has a glimmer of understanding how much this will be – citing a four year old Broadband Stakeholder Group study estimating the cost of building fibre to the home to every home as £28bn.

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How to fix the broken internet economy

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How can we begin to unpick the tangled mess that the technology and creative industries have created?

There’s certainly no shortage of blame to go around. In the past every new wave of technology has delivered healthy creative markets – but today this is no longer happening.

Just 20 years since the birth of the internet economy, with the advent of the worldwide web, it’s worth asking why. It’s time we looked afresh at where both industries went wrong, and how they can get on the right track again.

Much of what follows will highlight key mistakes made – but before we do that, we need to put them in some historical context. What worked in the past is a fairly reliable indication of what can work again in the future.

The current impasse between technology and copyright sectors is certainly an odd one. Historically, war is the greatest driver of technological innovation of all, but in peacetime it’s the demand for culture and entertainment that spurs the most innovation. People want to see and hear stuff, and are prepared to pay for it.

The cash generated is ploughed into more entertainment – even creating new art forms. (Recall how the first movie dramas were starchy, filmed theatrical plays.) This creates more investment in technology so people can enjoy the entertainment in a better way. Round and round it goes.

At the heart of this virtuous circle, copyright has been the obscure back-room business-to-business mechanism that keeps the players honest. Creators demanded that their industries engage with the new technologies to create new markets, which returned more money for their talent.

As a result technology innovators needed to attract talented creative people, and induce them to produce stuff for their kit: recording their music on long-players rather than shellac, or printing their movies in Technicolor™. So the two sides need each other. Technologists’ incentives were simple: create more amazing gear to deliver the best of other people’s stuff. And each wave of innovation grew the market, and ensured the creators and workers were richer. Remember: No innovation has ever made creative industries poorer.

Unfortunately, the truth of this historical mutual dependency gets forgotten today because the incentives aren’t lined up. Investment decisions in technology services are made without a thought for the health of the creative people who generate the demand for the goods. Creative investment decisions either don’t take advantage of the technology, or are hamstrung in a way that leaves the potential of the technology untapped. Things are also complicated by another factor we’ll call the Unicorn.

I’ll open the catalogue of errors at chapter one, the music industry.

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Our ‘digital economy’ is still a circular firing squad

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The British ISP industry has spent a small fortune of its customers’ money fighting the people who would, in a saner world, be its business partners – only to suffer a crushing defeat. On Tuesday Lord Justice Richards threw out BT and TalkTalk’s judicial review against the 2010 Digital Economy Act.

Yet as trench warfare goes, they may consider it worth every penny.

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A brief keynote to Westminster Digital Forum

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My name is Andrew Orlowski from The Register, I was looking for an illustration to try and bring a very old debate to have a fresh perspective, and I came across this in my library, which is an extraordinary book written by a gentleman called Yoneji Masuda. The book was written in 1980 and it was the Japanese plan to computerise Japanese Society on Cybernetic lines.  It was a very modest project. It would have cost about $65 billion in the currency at the time, and plans included robotically controlled personal transporters, he forecast the death of the television by about 1985; an “information sharing” society would follow, democracy would be reborn.  Much of this utopian rhetoric is stuff we have heard since then, but we are in a very interesting time, I think, for digital networks and for society. 
 
We are faced with a paradox, very briefly, I will try and encapsulate it in about a minute.

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ISPs: beware of paranoid bloggers with a persecution complex, warns Ofcom

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Exclusive Ofcom will encourage ISPs to be transparent about traffic management, but won’t ask them to detail the information in a standard format, according to meeting notes seen by The Register.

The regulator is sounding out opinion from ISPs and consumer groups on traffic management, which it sees as the only aspect of the US "Net Neutrality" debates applicable to the UK.

In the US, the debate was politicized and emotive; pressure from left-wing activists attempted to push both Congress and the FTC into passing pre-emptive technical regulations. At the loonier end of the debate, some called for compulsory nationalisation of the private assets, without compensation.

Here the debate is more rational; Ofcom doesn’t agree that pre-emptive rules must be made, and favours a hands-off approach.

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Net Neutrality: the Good Guys always were white

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Delicious news from the United States, where ‘Net Neutrality’ is again being recast for a new political purpose.

The term long since ceased to mean anything – it now means anything you want it to mean. But as a rule of thumb, advocating Neutrality means giving your support to general Goodness on the internets, and opposing general Badness. Therefore, supporting Neutrality means you yourself are a Good Person, by reflection, and people who oppose Neutrality are Bad People.

This is a wonderful thing, and the beauty is, it’s all so simple. It’s like the Good Guys Wearing White – the Bad Guys oppose Neutrality. And because Neutrality is anything you want it to be, you have an all-purpose morality firehose at your disposal. Just point it and shoot at Baddies.

But best of all is that you get to define the Baddies, raise a lynch mob, catch them and hang them – before somebody has had a chance to ask "Where’s the harm, exactly?".

This time the accusation of Neutrality Violations is being turned on copyright holders, minority groups – and anyone who wants a network to run the way they want it to.

 

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Apple and the Gentlemen from the Networks (or, why it pays to turn up Really, Really Late)

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the iPhoneThis week Apple threw the kitchen sink at its iPhone/Touch software stack, removing most of the most irritating nuisances at a stroke. It’s a stunning achievement.

So Apple now finds itself where everyone else in the mobile handset business wanted to be 15 years ago. Large companies full of clever people devoted years of planning and expenditure to fail to get here. If the iPhone continues to flourish (see below for the many obstacles en route) – then both rival manufacturers and the networks have to tear up some long established strategies.

For the established handset competition, if Apple takes the lucrative high end, that leaves them scrambling around for gimmicks in a cutthroat market that’s increasingly low margin. For the networks, they’ll need to find devices that people actually want – or pray that Apple drops its carrier exclusivity policy and partners with any network that wants to sell its gear.

So how did someone with no track record in a notoriously difficult business find itself walking away with the laurels? What can explain this paradox?

For Apple, coming late to the phone business has actually been a huge advantage. The success of the iPhone is down not just to great engineering, but profiting from several years of desperate and outright stupid behaviour by the mobile phone networks, who set the terms for the manufacturers. The received wisdom of the industry – that you had to know the wiles of the mobile networks to succeed – turned out to be completely mistaken. And to explain this we find another paradox, which looks like this.

The mobile phone business is actually the most “customer friendly” or “customer responsive” in the world. This might seem a strange thing to say. Have a read of Brendon McLean’s splendid rant from two years ago – Why we hate the modern mobile phone, for a summary of customer unfriendly business. But it’s true.

That’s because the customer isn’t you or me, or the billion and a half other phone users in the world. Phone manufacturers have only 800 customers, of which only around 200 really matter: these are the gentlemen from the networks.

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