RatcliffeBlog - Mitch Thinking Out Loud

California to Regulate VoIP

Following the lead of Minnesota and Wisconsin, the state of California is reportedly going to regulate voice over IP (VoIP) services, according to CNET.

"They sure look like a phone company in nearly every regard," said John Leutza, director of the California Public Utilities Commission's telecommunications division. "This will be California's policy going forward."

This would be a good example of why California is having trouble cultivating new innovative technology industries; the urgency to collect irrational regulatory fees drives away innovators.

What was the reason for regulating telephony? For almost a century, voice services were delivered on lines owned exclusively by one company whose rates had to be controlled in the public interest, later that had to be forced open to competitors. But VoIP is just another kind of data, even if the companies providing interconnections to the plain old telephone system do issue a bill that looks like a phone bill (VoIP services might have a number associated with them or they may not, but numeric services are certainly what will succeed, because there are a lot of old numeric phones around). Imposing an old model on a service that is indistinguishable from other data carried on an IP network does not make sense, since you should have to regulate all the data services in order to treat telephony equally. But we don't regulate streaming content, nor Excel files sent between coworkers. For some reason, VoIP traffic on the network is "different." Vonage may connect calls to the switched network, but it doesn't hold any monopoly position in the market and its user interface on the Web is oriented toward message management, just like email. So, what is the rational explanation for regulating VoIP other than "it looks like voice telephony"?

It seems that all California is doing is looking for state revenues to solve its budget crisis. There is no monopoly and prices for these services are already falling as new competitors bring VoIP applications and services to market.

By contrast, California does need to reregulate its energy industry in order to avoid collusion among competitors who are, in fact, not competitors, but who work together to keep the prices of electricity artificially high, which led to the California budget crisis in the first place. How about a little more success in that market before inflicting this stupidity on VoIP.

The Freedom To Listen?

"I think most people, though, came here to listen and I think the people who don't allow people to listen are infringing on their civil liberties."

--Deputy Secretary of Defense Paul Wolfowitz, responding to hecklers at the New Yorker Festival, defining a new responsibility in America, the obligation to shut up and listen.

Why Protect Reporter's Notes?

Dan Gillmor comments on reports that the Department of Justice is sending letters to journalists telling them to be prepared to hand over their notes for use in investigations: "This is wrong, pure and simple."

It is a short step from obliterating the First Amendment protection of a free press to wiping out freedom of speech completely. Everyone should be resisting these erosions of liberty in little bits every day. Start today by sending a letter to your Congressional delegation asking them to fight Ashcroft's trampling of the First Amendment. Here's a template letter:

Dear [Representative/Senator],

I am writing to urge you to introduce legislation that prevents the Department of Justice from demanding access to reporters' notes, email and source contact information for use in criminal investigations. This is a flagrant violation of the First Amendment and risks not only the freedom of the press but the right to free speech.

The Federal Bureau of Investigation has sent letters to a group of reporters who covered the case of Adrian Lamo, according to Mark Rasch, a writer for The Register, a British information technology Web site. "e letters warn them to expect subpoenas for all documents relating to the hacker, including, apparently, their own notes, e-mails, impressions, interviews with third parties, independent investigations, privileged conversations and communications, off the record statements, and expense and travel reports related to stories about Lamo."

While I do not approve of the computer intrusions Mr. Lamo is accused of undertaking, it is the tradition and law of the United States to protect the press from intrusions by police investigations -- the police, if they have not successfully built a case against an accused person have never had recourse to substitute the research conducted by journalists for their own investigative efforts. In other words, as a citizen of the United States, I appeal to you to re-establish the rule of law that has sustained our democracy for more than 210 years.

I urge you specifically to reverse all portions of the USA Patriot Act that contravene American political and social values in the interest of increased security. I am not willing to trade freedom for a modicum of comfort in my day to day life. The Congress has granted the Department of Justice, the Department of Homeland Security and other police and intelligence agencies substantially increased budgets since the attacks on the World Trade Center and Pentagon; please, require that these agencies do their jobs legally and with the greatest respect for liberty, starting with the freedom of the press.

I thank you for your attention to this matter and will be watching your actions attentively as we enter another election year.

Sincerely,

Is Technology Killing Jobs?

Joi Ito has a pointer to a Slashdot discussion about this O'Reilly article on the impact of computers on the work opportunities available for people today.

My personal opinion is that short term quarter-by-quarter capitalism can't possibly think long term enough to deal with many of the larger social issues. I don't think it's just about creating jobs. I think issues such as the environment, poverty, privacy, even computer architectures defy short term profits/gains thinking sometimes. I think it's a good idea for computer professionals to be socially responsible and think long term whenever possible. (See CPSR and EFF ).

I think the idea of creating jobs directly by writing software for small businesses is a bit complex. I think that "good jobs" come from innovation and new industries. Many old industries such as the restaurant business are rather zero-sum. I think that increasing the public domain and the commons (spectrum, computer software, creative content...) is the best way to allow people to innovate and be entrepreneurial without being shackled in the well-funded proprietary world. I think that focusing on creating and sharing intellectual wealth in the commons is the best way to create jobs.

Computers do eliminate some jobs every day, but that's been true of every technology along the way, since someone stopped carrying hay up a hill and, instead, the farmer got a cart to haul 10 times as much. But the question of what will people do with the time their replaced-labors create is an important one. I agree with Joi that quarter-by-quarter capitalism can't even deal with these questions. However, I think quarter-by-quarter capitalism does more to destroy jobs than any technology, because it is so shortsighted. Short-term changes in demand are often met with permanent reductions in employment, costing companies years worth of investment in individual workers and loyalty-building. We need a form of organization that keeps networks of contributors together (and lets them go where they want to go) even as the shape of business processes change.

Robert Scoble has a few thoughts on this today, as well:

The new world, though, will have more customers than our Windows XP-based one does today. It'll have people doing new things, and people building new worlds.

Anyway, one little sense that there's still immense opportunity out there: my son Patrick told me his school in Petaluma does not have a computer lab and the teachers there don't use computers or have one on their desks. That's in stark contrast to the private school that he attended in rich Los Altos. So, why is it important for "rich private" schools to have computers, but "public" schools don't?

Any question where the future leaders will come from? Any question why parents will shell out $6000 a year to send their kids to private schools?

See what I think about this issue in my previous posting about the Bush "economic policy," which amounts to gutting our ability to invest together in public resources, like schools.

Amidst the prosperity of the late 20th century, when the basic services available in advanced economies are sufficient to support widespread risk-taking, people are able to undertake entrepreneurial ventures as an alternative to regular employment. Yet, paradoxically, many families must undertake second or third jobs to provide a sufficient income. Both these trends point to the end of single-job workforces, a society where connections are forged by semi-free agent workers to bridge companies and industries through the exercise of plural talents. To attract and retain these liberated workers, companies will have to be heard and have a fulfilling role in corporate life and governance.

An organizational model that supports these new workers will combine the features of a partnership and a polity, an organized group under a consensual form of governance. It will also invite the customer into the governance of the companies that serve them, increasing dialogue with the market to provide vastly improved efficiency in reaching an optimal social outcome. This form of economic collaboration is sufficiently flexible to acknowledge a wider range of costs and benefits than a bottom-line oriented business. It allows investments to support social and economic goals based on a deliberative process, as evidenced by the appearance of social investing, collective ownership arrangements, and non-governmental organizations, which are treated as the equals of government in international venues. As companies expand beyond the borders of individual nations or as networks of independent workers form transnational partnerships, the emergent polity business model will facilitate an environment of dialogue and decision-making that incorporates broadly defined goals and criteria for success. The realization that society is information-dependent (as it has always been, though previous forms of critical information were mythical, religious or related to fungible resources) will radically alter the idea of the organization, forcing open the boundaries of the corporation to bring ideas and analysis to bear from many sources that cannot be permanently employed.

I don't understand Joi's comments about restaurant investment or other labor-intensive companies being "zero-sum," except as a general denigration of the value of labor itself, and I don't think that is what he means. Joi eats at too many good restaurants not to recognize the skill and art of food preparation and service. Code is one form of value, but so is an understanding of the interaction of spices and seafood, to name just one of the things people do that creates value in the economy that has very little or nothing to do with computing.

Ultimately, work will come from recognizing the value of individuals to the richness of our lives. Nerds contribute a lot, especially in the venues that Joi and others in this blogomowhatsit experience every day. That doesn't mean everyone will be cutting code in the future -- it would be like having a world made up of only auto mechanics.

Investing in creating systems of support and value distribution are perhaps even more powerful than writing software. Software that ties the individual contributor to the economy into global systems of value--software for small business--can have a huge impact. We just shouldn't make the mistake of measuring that impact only in the aggregate. If the individual is the basic measure of society, which I think is the case, we have to change lives one at a time with the tools and educational services facilitated by the Net.

Jobless Recovery, Lower Consumer Confidence

Here's the thing I've been warning about for a couple months come to pass. Consumer confidence cratered last month, reaching a ten year low after the third round of misguided tax cuts had their lingering effect on consumer spending. Having shoveled billions into unproductive manufacturing -- of bombs and things that, once you build them you have to pay to maintain -- while ignoring the larger issue of American competitiveness, education and trade-oriented production, consumers are seeing that their futures isn't what the Bush tax plans have at heart.

If we want not only to experience an economic recovery (a purely short-term issue), but also prepare the American people to compete in the 21st century, we have to do more to promote lasting employment in industries that export value to other economies. That means a recommitment to education at all ages, the ability for any worker to write off investments in learning, just as a company writes off capital expenses that will produce profits at a later date. Simply cutting taxes for investors, whose primary goal is return of capital, does nothing to promote growth, because they will put there money to work anywhere, not just in the United States. Since the U.S. is being gutted at every level of government, crippling the people's ability to work together through political organizing (since winning an election does nothing if the ability to tax and invest socially has been eliminated), the only option is a wholesale change in the American political process, starting with individuals banding together to invest in one another. We, all of us, not just the top one percent, will get out of this hole together or we will sink together, to paraphrase Ben Franklin.

This month, consumers showed that they see the Bush Administration is not in this economy with them, but against them. And what will the President do? Another tax cut, increasing the debt our children will pay off?

Interesting move from Disney

Disney is beginning direct distribution of movies to homes, through a device that catches data sent through existing broadcast sidebands. In other words, using space that's sitting vacant in TV spectrum, Disney will blast its movie catalog into homes and let people pay for what they want, storing only those titles on the devices, which has a capacity to hold 100 movies. The technology can be placed in a market for just $200,000 to $250,000, according to the Financial Times.

Dean's Truly Enlightened Internet Policy

Here is why I think Howard Dean would be a good president: He is comfortable with change.

Check out this Internet Policy from the Dean camp.

Dig this: Everyone should be connected; the Internet's value comes from its openness and that should be promoted; the Internet is a democracy of voices; and, most importantly, the Internet is not perfectible. This is a clear signal that he doesn't wish to dictate right and wrong, that Howard Dean believes Americans are capable of making their own choices -- the kind of stuff that my Republican grandparents believed, not because they were Republican but because they were confident about their fellow man's ability to think and reason for themself.

As A Citizen Let Me Just Say, I'd Like An Investigation

The Bush Administration refuses to cooperate with or ask for any independent investigation of the leaking of the name of a CIA operative, Virginia Plame, whose husband, former ambassador Joe Wilson, was critical of the Bush war stance.

We're not talking about a blow job in the Oval Office, which is not an actual crime, but actual disregard for the life of an American serving their country.

Revealing Plame's identity could very well be a felony punishable by up to 10 years in prison -- this is no petty crime or common adultery, it's a felony offense against an American who put their life at risk for their country. This is a reason to investigate if there ever was one and, after all the rhetorical bluster of the Republican party and the Bush Administration about its moral clarity, this refusal to at least look into who put this woman's life at risk is the height of hypocrisy.

How about if we just remove Condaleeza Rice to an undisclosed location and question her for six months without access to an attorney? That's fair, based on the civil liberties record of the Bush Administration -- after all, we wouldn't actually have to arrest her, but just detain her incommunicado, like the Bush Administration treats people.

Bushylvania is not the United States anymore, as our leaders can now accuse people of anything and detain them while simultaneously refusing to have their own actions in the public service scrutinized by an independent objective investigation when a felony has been committed by someone. Let's at least find out who committed the felony.

P2P: All Grown Up Now

The peer-to-peer software industry has its own trade group and P2P Industry Code of Conduct. Just what the downloadable music industry needs, another trade organization.

It reminds me of the line from the Pogo comic strip: "We have met the enemy and they is us."

Two Good Skype Ideas

Even if the company behind Skype is probably going to struggle for a viable business model and will see its technology replaced by a standards-compliant open soruce SIP-based VoIP service, Phil Wolff has two good ideas:

Record A Call Yes! I like this idea. I've had trouble keeping a Gentner working to record calls directly to disc and this would be a great tool.

Conference Calling This may not be possible for most Skype clients to support, since it requires multiple IP tunnels run simultaneously and that may overwhelm the processor or bandwidth available for many users. Since Skype is a peer-to-peer technology, the company could charge a modest fee for a Skype bridge that handled multiple callers. Say $5 a month or $2 a month for conferencing?

On another note, during a Skype call today, the sound faded in and out for both myself and the other call. It was strange, though, because it was not broken and static-sounding like packets were being dropped, but just seemed to fade in and out at one end or the other. Often, one of us could hear the other but could not be heard. It was as though each of our systems were losing their audio resources periodically, which isn't easily explained. Vonage, while it doesn't have the voice quality Skype offers, has not dropped calls on me or done one of these audio fade-outs (it's also nice to have a real phone number with Vonage). However, Vonage is definitely feeling the pressure of nascent VoIP competitors -- last week they cut my bill from $39.95 a month to $34.99 a month for unlimited calling.

There's a long way to go with VoIP. A long way.

Corporate Corruption At The White House

While former investment banker Frank Quattrone is on trial starting today for routing IPO shares to hedge funds that paid a premium price, Vice President Dick Cheney sits on value-accruing stock options from Halliburton that become more valuable every time the company wins a no-bid contract for the reconstruction of Iraq. The Nation has a solid screed on the question of Cheney's ethics, pointing to this exchange a couple weeks back on Meet The Press about Halliburton's $7 billion Iraq contract, which was awarded without competitive bidding:

TIM RUSSERT: Why is there no bidding?

VICE PRESIDENT CHENEY: I have no idea. Go ask the Corps of Engineers.

Considering Cheney has publicly stated he has no ties with Halliburton, yet receives deferred compensation and has the option to buy shares at a discount to their current price, he is no less corrupt than the corporate executives his government is prosecuting now.

Participatory Innovation

Good piece in the Times today about the pace of innovation and the cost of keeping up, even for large companies. A couple key quotes:

At the General Motors Corporation , research spending has stayed about the same in recent years, but Lawrence F. Burns, vice president for research and development and planning, said he has achieved better results by working with knowledgeable (and less expensive) researchers in China, India, Israel and Russia. Sharing is also a virtue, as in the research lab G.M. owns with the Boeing Company and the Raytheon Company .

Lucien P. Hughes, research director for the technology labs at Accenture , the consulting company, agreed that alliances in research are now the norm.

"The days of the large-scale insular lab - not talking to the rest of the world - I think are over for now," he said.

Finding the technology - either through internal ingenuity, outsourcing or acquisition - is only the beginning. For a time-honored company, breakthrough technologies can be as disruptive inside the company as they are externally. Too many companies are not structurally prepared to handle them, said Professor Roberts of M.I.T.

"It's not all a question of a willingness to spend," he said. "It's a willingness to participate."

Yes, it is a simple fact that you cannot employ most of the talent in the world. In fact, you can afford to employ only a fraction of the best talent, just as any baseball team can afford only a few stars. Amidst the prosperity of the late 20th century, when the basic services available in advanced economies are sufficient to support widespread risk-taking, people are able to undertake entrepreneurial ventures as an alternative to regular employment. Yet, paradoxically, many families must undertake second or third jobs to provide a sufficient income. Both these trends point to the end of single-job workforces, a society where connections are forged by semi-free agent workers to bridge companies and industries through the exercise of plural talents. To attract and retain these liberated workers, companies will have to be heard and have a fulfilling role in corporate life and governance.

An organizational model that supports these new workers will combine the features of a partnership and a polity, an organized group under a consensual form of governance. It will also invite the customer into the governance of the companies that serve them, increasing dialogue with the market to provide vastly improved efficiency in reaching an optimal social outcome. This form of economic collaboration is sufficiently flexible to acknowledge a wider range of costs and benefits than a bottom-line oriented business. It allows investments to support social and economic goals based on a deliberative process, as evidenced by the appearance of social investing, collective ownership arrangements, and non-governmental organizations, which are treated as the equals of government in international venues. As companies expand beyond the borders of individual nations or as networks of independent workers form transnational partnerships, the emergent polity business model will facilitate an environment of dialogue and decision-making that incorporates broadly defined goals and criteria for success. The realization that society is information-dependent (as it has always been, though previous forms of critical information were mythical, religious or related to fungible resources) will radically alter the idea of the organization, forcing open the boundaries the corporation to bring ideas and analysis to bear from many sources that cannot be permanently employed.

Knowing When To Fold 'Em

Baltimore Technologies launched last year and sold most of its assets this year, because, in the company's words:

Since the launch of the controlled sale process in May, Baltimore has believed that the Company lacks critical mass. During the course of the past two years the Company has succeeded in significantly reducing operational cash burn. However, Baltimore alone does not represent a platform on which to consolidate. The need for scale in today's infrastructure software market makes the disposal of Baltimore's core PKI business an obvious proposal.

I applaud their honesty. Instead of plowing more capital into a losing proposition, they did the right thing.

A Natural User Interface

Kai-Fu Lee, who worked on notable products at Apple including QuickTime and PlainTalk speech technology, is heading Microsoft's Natural Interactive Services Division, which is charged with developing a "natural user interface" for the upcoming (three years out) Longhorn operating system, according to Mary Jo Foley of Microsoft Watch.

"Our approach is not to replace the GUI (graphical user interface)," Lee told Foley. "It is to augment it. We want to find new places where natural language can add value." In other words, they don't want to recreate Microsoft BOB, the awful UI that Melinda Gates introduced around the time she was engaged to Bill Gates. BOB, which was supposed to stand for "best of both worlds (windows and a UI that looked like Bill Gates' house)" was truly the worst operating system UI ever trotted out by a major company, so Lee and his team are not making the mistake of focusing on specific physical metaphors for a "natural user interface."

But Lee is really only talking about adding voice commands, which have been available from Apple (the PlainTalk continuous speech technology, which he invented at Carnegie Mellon University) and IBM, among others, for many years. This is continuing proof that what Microsoft does, besides hiring people from other companies to catch up to those companies, is stick to a slow-and-steady approach to incremental improvements to lure customers. But if anyone has ever actually tried talking to their computer all day, especially in a crowded office, it isn't very natural. It's like talking to your car when stuck in traffic.

Economics For Emerging Economies Points To Emerging Polities

There is a passage at the end of a recent Economist article about the debt problems faced by developing economies that suggests a more flexible form of financing is possible not only for countries, but regions, industries and even individual businesses (including the self-employed individual):

"...the IMF finds that most of the recent increase in emerging-market government debt has been due not to bigger primary budget deficits, but to large swings in exchange rates and interest rates. Emerging economies need to reduce their reliance on foreign-currency and short-term debt to make interest payments less volatile. Another interesting idea suggested by the IMF economists is that governments could issue bonds on which the interest payments would be linked to a country's growth rate: the faster the rate of growth, the higher would be the interest rate paid in any year. If growth slowed, interest payments would fall, providing a useful cushion in times of economic stress. It is an idea well worth further consideration."

The International Monetary Fund report referenced is available as a PDF here, for free. The notion of a variable interest system based on growth rates could be applied across a wide variety of economic situations. Consider, for example, financing of college educations, in which the economic value of a chosen major were later applied to the interest rates of student loans -- if a student chose a very risky major and the jobs vanished due to obsolescence, loans could be forgiven completely to facilitate a return to college to study a different area. Business that strived to clean up polluted sites could be financed based on the risk and reward to society, with lower rates if the work was not as profitable (or at all profitable). Society, since it provides the capital used in banking, can set these kinds of priorities and, as a result, emergent polities, groups who invest together and in one another to accomplish some social goal, can become a viable economic entity in an environment in which the cost of money is variable based on other factors than simple bottom-line economics.

Two good books on this subject are:

Semiconductor Sales: Up, But A Mixed Picture

Global semiconductor sales grew by four percent month over month in August, totaling $13.42, according to the Semiconductor Industry Association, but U.S./Americas sales were down one-half of one percent year over year. This is the sixth consecutive month of growth and most of the growth is attributed to microprocessors and DRAM sales growth, which were up 7.8 percent and 11 percent respectively. Consumer device processors are also reported to be up 5.3 percent. See the detailed PDF for the regional numbers, which aren't as encouraging as the overall report.

This is happening for two reasons, but only one is clearly visible in the release: Christmas. Inventories for an expected stronger Christmas sales season are built today. This inventory surge happens every year, but the year-over-year sales in the United States are down, indicating that U.S. PC OEMs are not recovering while Asian and European OEMs may be. But, what is not visible in the report is the impact of defense spending, which has been accelerating for most of the year. I am not sure there is a legitimate recovery in electronics going on; it may be simply a matter of inventory build-up for a Christmas that could be worse than normal, based on declining consumer confidence and uncertainty about employment.

If You Can't Be There, Be There

Bloggercon will be Webcast. I'll be watching and IRC'ing.

I Want My Fish Phone?

Gotta wonder about the industrial design here. A fish-shaped cell phone with a high-rez screen and a truly unusual key arrangement, the Nokia 7600 will be available everywhere but the U.S. does video and audio capture but is designed specifically not to handle videoconferencing, which had been thought to be the key to 3G success. So, okay, no videophone, but it is fish shaped. Cool? I guess.

But if the phone isn't cool enough for you, check out imageware, jewelry that displays photos. This is the locket of the 21st century.

Jailing Spammers -- Maybe We Don't Need A War On Spam

Internet Advertising Report relates the content of a House Judiciary Committee move to enact the Criminal Spam Act of 2003. A second Senate Bill, the Can Spam Act of 2003, will likely be combined with the final House bill to make a final version of legislation that will put maximum penalties on fraudulent and deceptive spam deliver (that is, as far as I can tell, the sending of spam which claims you opted in when you didn't) at up five years in prison for repeat offenders. First-time spammers can get a year in prison.

Okay, now I know spam is a pain in the ass, but jail time for what amounts to the same thing that fills our postal mailboxes everyday? Can we think of a way to deal with spam--or anything--that doesn't involve jailing someone? Since a lot of spam originates overseas, what will the bill do to our actual ability to reduce spam? Seems like the answer is "nothing," unless we want to extradite spammers, which I seriously doubt falls in the scope of most extradition treaties.

Very steep financial penalties, which can be applied to foreign companies by restricting their U.S. bank accounts and transfers to their accounts overseas is certainly a more effective way to deal with unwanted email. Jail is just over the top, when the question is how to make the economics of sending spam so unattractive that most spammers will stop. Let's bankrupt these people, but not throw them in jail. Jeez, the jails are already full of a hundred other categories of non-violent offenders who are brutally abused by real violent offenders. www

Radio, Radio

I did an appearance this weekend on the WebTalkGuys, which I used to co-host. Rob and Dana wanted to talk politics, and I did -- you can listen here to a Real stream, here to a MP3 file (I am on the first half of the show, about 31 minutes).

So, this evening I got the following from Dana about the reaction to the show: "Thought you might be interested to know that we have been recieving nasty emails about the negative Bush comments. You know, the typical "move to Iraq...horrible, immoral ideas...won't ever listen again".  I've written everyone back so that now I pretty much use a templated apology and explanation. I think we've only received this kind of feedback on two other shows in five years - one when we interviewed PETA and one when you were talking about Bush back in 2000."

It is apparently unpatriotic to have an opinion not handed down from the White House, according to some people. The only good thing I can think of that would come out of a second Bush administration is that these anti-Americans who condemn free speech will probably be illiterate and unable to write their hate mail after Bush has gutted the educational system completely. You know what they say about people who can't take a joke? Right at you, dimwits.

Bush in 2004!

I got an email from ebsthompson@earthlink.net consisting in toto of: "Bush in 2004!"

Okay, so why? At least I and other bloggers, extremely conservative or among the vast radical middle, take the time to explain why we think a particular candidate or president is qualified or unqualified for office. Shouting a slogan doesn't add to the debate, it obscures it.

Why not Bush in 2004? The man has no sense of diplomacy. He genuinely seems to think that being President of the United States is akin to being the autocratic CEO of his father's generation. For all the economic reasons, read past postings or just consider these, albeit they are parodies:

or this:

Content or Communication, People are Paying More

Clay Shirky, Barry Parr and others are discussing the paid content numbers released by the Online Publishers Association, which I commented on the other day. Clay says most of the "content" that was paid for is actually "communication" and Barry says it is "advertising." I'd argue, having sat on the board of directors of Match.com for several years and watched how a mesh of messages formed into a substantial amount of the content of a successful service, that it is "advertorial" and that this is content, not communication.

Communication is a verb in the sense Clay means when he says the stuff being paid for is "social life." But what flows over a medium is content, the message, the massage, in short, a noun in contrast to the verb "communication" that conveys social life. When you describe what someone pays for, they pay for the delivery of something and for something that is delivered. It is often hard to make the kinds of distinctions Clay tosses off, like "The pattern you are describing is called lurking, and lurkers are part of the social fabric as much as the other participants." While the second clause of this sentence makes complete sense, the distinction between what is communicated and what is consumed, a different one than the idea that communication is not content or that it is somehow content free, does not hold up.

Clay says publishers are desperate to 'tell the Kontent is King story." I think the story is that people are paying for more stuff that can be experienced only through the Net. The same interactions in their face-to-face modes cost money, too. Dating happens in bars, where you pay a cover or for too many drinks to screw up the nerve to talk to someone. Hooking up for sex, when paid for and not conducted as the end result of a night in a bar, is legal only in Nevada. The fact is, though, if there is nothing on the Net, no one pays. They pay for the noun object in communication, what is said, the content of communication.

I would urge anyone thinking about this to see Jerry Michalski's excellent piece on social networking at Red Herring. He talks about two problems, the fact that services add complexity rather than reducing it and the problem of explicitness. It is the second, explicitness, that demonstrates that the content of communication becomes a thing apart from the channel communicating that information:

The second pragmatic design problem is explicitness. Making relationships explicit, available to any virtual passerby, creates subtle complications. Long ago, when SixDegrees was in full swing, I wrote its CEO, Andrew Weinreich, that people like me were unlikely to enter their important first-degree contacts, because those contacts would be exposed to solicitations from strangers pinging them, saying, "I'm five degrees from Andrew, so we should talk." I take care when I recommend people to one another; SixDegrees disrupts that process and devalues it completely.

Bizarre Turn: Hiding the Truth By Dismissing Moussaoui Charges

This is astonishing. The U.S. government has moved the dismissal of all charges against Zacarias Moussaoui, the alleged "20th hijacker," in order to stop him from questioning prisoners held at Guantanamo Bay. According to the DoJ:

"We believe that the Constitution does not require, and national security will not permit, the Government to allow Moussaoui, an avowed terrorist, to have direct access to his terrorist confederates who have been detained abroad as enemy combatants in the midst of a war. We believe there are other ways in which to assure Moussaoui the fundamentally fair trial that the Constitution does require. If the district court now dismisses the indictment -- which is the procedural step contemplated by both the earlier ruling of the Court of Appeals in this case and by the laws governing classified information -- the Government will be ensured its opportunity to obtain prompt appellate review of the direct access issue. The same procedures will ensure that Moussaoui stays detained pending appeal. We believe this will allow the Department of Justice to resolve the impediments to trial. We remain confident in the ability of our judicial system to try this case, and we look forward to bringing Moussaoui to justice."

This is astonishing. It also raises serious questions about what is going on at Guantanamo, since allowing a defendant to question detained persons hardly constitutes a risk to national security, since there is no way that communication could be conveyed to the leaders of al Queda to act upon. The recent charges of treason against to Muslims who worked at Guantanamo, too, should be examined to see if these men are being charged simply because they observed and were prepared to expose inhumane conditions at the base. If the government would drop capital charges against Moussaoui (while still detaining him as a terrorist -- violating habeus corpus, a foundational American right), then would it charge two soldiers with treason for blowing the whistle on unconstitutional treatment of prisoners?

The Constitution does not use the word "terrorist," but it did use the word "accused" and guaranteed the same rights to all persons accused of crimes in the United States. This bizarre twist, which, if carried to its logical conclusion, could result in the perpetual detention of Moussaoui because he cannot be tried fairly, is a clear indication that the time has come to demand open and fair trials for all persons accused in the "War on Terror" in the tradition of American courts and not those of tyrannies.

Segway pile up!

All Segways have been recalled. Ouch! Seems the auto-balancing scooters are just too hard for some people to ride. President Bush fell off when he tried. This is not a guy to be trifled with, because the Consumer Product Safety Commission answers to him.

Seems that when people ride their Segway after the battery runs low -- when they ignore the battery warning -- the scooter can crash. There's a software upgrade, but what it does isn't described. How much do you want to bet the upgrade simply stops the Segway when its batteries are too low to maintain its balance? So, now, you've got a scooter that stops when it's unsafe, which make sense and, compared to cars, which most folks drive with warning lights flashing sometimes, seem utterly impractical.

Yahoo IM stupidity

Yesterday, I noticed that Yahoo! IM was refusing my connection through Fire, the multi-protocol IM client I run on OS X. It seems Yahoo has decided to stop providing access to non-Yahoo client software. CNET says this affects Cerulean Studios Trillian IM client for Windows, but I can confirm it is also true of other non-Yahoo clients.

This is an incredibly dumb move. Raising walls to connectivity at a time when they are falling and anyone hoping to add value needs to address the larger IM world rather than just a small disconnected corner. When disconnected, networks die a bit.

Note to Yahoo: You've lost a customer for your IM services. If I represent any future revenue in your projections, strike it from the books, because closing the door to my Yahoo IM connectivity makes your portal less useful to me, too. Let me be clear how stupid this is: AT&T used to require people use its hardware on its telephone network. Look what happened to AT&T, and it all started with the 1968 Carter phone decision that broke the end-to-end Bell equipment monopoly. Yahoo just took a 35 year step backwards.

Kids Know They Aren't Pirates

Correspondences.org just began working with high school journalism programs to bring the voices of young people into the civic journalism project. Rob La Gatta of Redwood High School writes a piece that sums up the major issues in the digital rights management debate and demonstrates that young music fans are quite aware that their support of a band doesn't begin at the music store but comes at concerts and the souvenir stand.

Dave and NPR

I am not sure what sparked Dave Winer's comments about National Public Radio, but they are way off base. I've been close to an NPR station for a number of years and they simply do not "sell speaking spots." Furthermore, I have heard both national and local NPR broadcasts disclose potential conflicts, such as when reporting about the Bill and Melinda Gates Foundation's gifts to fight malaria the other day, when All Things Considered's anchor said something to the effect of "we are obliged to say that the Bill and Melinda Gates Foundation supports coverage of health issues on this program."

Dave recently discovered that potential conference sponsors want something for their money. Having produced a goodly number of conferences in my day, this is hardly news. This raises the question of what Dave's BloggerCon event will be, a discussion of "authenticity of voice" and "no shills" or a quasi-religious revival of Dave's definition of a blog. He assumes blogging is journalism, but that's like saying that all music is rock and roll. This thing I am typing into now is a tool that can be applied to various modes of expression, not just journalism. What I think Dave means is that we are increasingly living life on the record -- this is something that professional journalists, who do withhold comments made by sources in order to maintain relationships, have to understand. Even our sources can scoop us now, reaching a large audience at a very low cost compared to the cost of publishing, for instance, a newspaper.

What Dave is finding out is that money comes at a price, the reality that publishers and journalists have lived with for ages. The challenge is to find ways to articulate what value there is in what Dave describes as an "appropriate (unspecified) way to thank the sponsors for their contribution." NPR has a very clear way of thanking sponsors -- they do so by name at the top and bottom of the hour. That hardly makes NPR shills for corporate America -- what sometimes makes NPR seem to be shills for corporate America is the occasions when editorial judgment lapses and marketing messages become news. But, they are two different things, these acknowledgments and the lapses in judgment made by all people, not just journalists, occasionally.

This is the reason that there is an ethical code for journalism and that, when acting as a journalist a blogger needs to be aware of and acknowledge. Dave and I have agreed on this for a long time, but it isn't something that should define all blogging. Nothing and no one should define all blogging, nor any other medium. It should all be open to citizens to use to communicate, and as cost barriers fall because of digitization, they will increasingly be opened to novel use by individuals and companies.

Weblogs Inc. Follow-up

Jason McCabe Calcanis replied by email to my post about the launch of WeblogsInc.com. I suggested he post in the comments section of the posting and he said he would, but to save him time here is the thread:

Very insightful comments... thank you for taking the time, we're flattered. I've cced our CEO Brian Alvey on this if you don't mind. I think you've brought up a very important point about content ownership and something we have worked really hard on.
 

Granted, that sounds fair, but what if the partnership hasn't worked? Is the injured party, should some financial or ethical transgression have occurred, obliged to leave their work in the partnership?

Granted, that sounds fair, but what if the partnership hasn't worked? Is the injured party, should some financial or ethical transgression have occurred, obliged to leave their work in the partnership? There is something to be said for ownership (really, we're talking about control over our reputation) that allows us to refuse to be associated with another party if we've decided that the business relationship hasn't worked. If I feel the value of my contribution hasn't been honored and leave the partnership, why should what I was not compensatead for continue to be the property of another? Typically, partners separating agree on how to split the assets of the partnership. For the small business or the freelance journalist, the continuing control over the product of their labor is one of the few bits of leverage they have and it should not be forfeited lightly.

  Certainly if either party did something illegal the courts would be a way to remedy this (i.e. if we were to cook the books or if a writer were to plagiarize). Now, we don't think it would not come to this because a) we're not looking to do anything shady and our model is based upon having hundreds of happy partners. If they are not happy they go away. We both know that bloggers are not the silent types, word will spread instantly if we are jerks.   Also, I think/hope that the dual-license concept (I don't think that is a legal term, I just made it up) solve some of this issue. We're not saying we own it at all. Someone can take their content back and do whatever they want with it and we still have the historical archive so we don't build a house of cards in WeblogsInc that would collapse if, say, all our webloggers decided to go work for a similar concept at Google. The only reason I can see to take the content out of our system is because you were, as you allude to, angry at us.   Now, if our deal isn't acceptable to someone they can certainly a) do their own blog and do the business side themselves (which many will do, I'm sure) or b) partner with someone else (although I don't know of anyone out there offering a deal, certainly not with the terms spelled out on their website... I looked!).    Like you say our business is based on successful partnership. Some people will love this deal, others will hate it. We want to see where this collaborative model takes us with an open mind.   Either way we're going to give this our full effort and try to do something truly innovative.   best jason

Jason,

I understand the distinction you are making and it is a very natural one. Not sure it will work, but I am glad you are trying it.

Mitch

Look, Red Herring Is Back

A number of friends have been working to rebirth Red Herring, and here it is, back from the dead. Congrats to everyone over at the Herring, especially David and Florian.

In just one day, the founder of Silicon Alley Reporter launched WeblogsInc.com and Red Herring returns. Feels like, I don't know.... 2000 all over again?

Creating impetus for change

Seth Godin has launched WhoWillBeatBush.com, a way of wagering on the election that lets the person who correctly picks the winning Democratic candidate and the margin of victory (presumably in popular votes -- do they mean electoral votes, which have counted more in previous Bush elections?) Each entrant earns one cent toward a pot that will be awarded to the charity of the winner's choice. I like this idea, because it gives you just one more reason to go and vote -- sometimes just being able to hope you'll win the opportunity to give a large amount of money to a charity is enough for the liberal voter to get off his or her rump and go to the polls.

Thanks for the link to Joi Ito.

Microsoft Shutters IRC

I guess I can't blame Microsoft for shutting down its Internet Relay Chat (IRC) servers, because the company could have opened itself to liabilities based on the behavior of people using its servers to communicate. According to Geoff Sutton, Microsoft's general manager for Europe: "The straightforward truth of the matter is free unmoderated chat isn't safe." And where there is risk, a company with $49 billion in cash on its books can't afford to be.

Microsoft has had these problems for a long time. In 1997 and 1998, I was interim CEO of a company that policed Microsoft's NetMeeting servers for people who were dropping their pants. We literally had a group of "beat cops" who could boot a user who appeared nude. The curious thing, though, is that by making these beat cops a part of the communities they policed, we had huge support from users who appreciated not only the lowered chance of genitals being wagged about, but also the personalities and character of the people policing the room. We were very open about the role they played, but they also kept conversation going.

Is the threat of pedophiles in IRC real? Yes, but it's hardly the kind of "danger" the press makes it out to be. I also wouldn't let my kids into an IRC chat without sitting with them for a long while, to teach them what they need to do, what to watch out for and how much information about themselves they can share. I've explained to my 10-year-old, who just got his first IP connection in his room (and has had it taken away again for breaking the rules Mom and Dad laid down) that this is like getting a driver's license. He has to learn the rules of the road and he can get on the Net before he drives because there is a lot lower chance that he'll hurt someone else than behind the wheel of a car.

But is the Net a wild west of pedophiles and predators? I don't think so. It's not, as one story put it, "a signal that some of the joyful early days of the Internet have moved on a bit," according to Microsoft's Sutton, who went on to characterize the Net as a place of lost innocence. "Chat was one of those things that was a bit hippyish. It was free and open. But a small minority have changed that for everyone. It's very sad."

A Net that is free of risk is a Net without life. You prepare your kids for life, prepare them for the Net.

Daddy Like These Paid Content Numbers

Who knows how much paid content is actually porn-related (since these figures weren't broken out), but the Online Publishers Association reports that U.S. Net users spent $748 million on content in the first half of 2003. This InternetNews story reports growth is slowing, but that's really missing the point -- growth always slows as you move away from zero revenues.

The top three paid content categories - Personals/Dating, Business/Investment and Entertainment/Lifestyles - accounted for 65 percent of online content spending in the first half of 2003, up from 61 percent in 2002. Online Personals/Dating remained the leading paid content category, accounting for nearly 30 percent of all paid content spending. U.S. consumers spent $214.3 million on Personals/Dating content in the first half of 2003, up a robust 76 percent from the first two quarters of 2002. However, this percentage increase was eclipsed by the Personal Growth category, in which spending nearly doubled from $20.8 million in the first half of 2002 to $41.4 million in the same period this year.

In other words, Tony Robbins, Dr. Phil, Deepak Chopra and evangelicals are probably looking at the best growth opportunities.

Interesting to note that micro-payments (one-off payments in cents or a few dollars) are staying steady at eight percent of total spending, so there is still a long way to go before the micro-content market starts to take off. We want our information in subscription-sized chunks.

Internet Law By Mail

The Stanford Law School Center for Internet and Society has launched a cyberlaw newsletter, packets, which includes short news reports linked to source legal documents. Good stuff. Subscribe here.

See, Bowie has figured out how to earn a living despite piracy

Lisa Rein has posted a Daily Show excerpt about the RIAA settlement with a 12-year-old girl "pirate" in which David Bowie shares his opinion that "it's crazy, just crazy out there. Most industries out there are in decline at the moment." As Jon Stewart points out, Bowie seems to be doing a coffee commercial as he says this.

Years ago, at Digital World, the poet and NPR commentator Andre Codrescu was on a panel I moderated and said "Someday, people will just pay me to be me." Bowie figured that out years ago, but Codrescu was right in a larger sense (and, note, they both have Web sites today). As we change from an information-based to an information-dependent society, the people we rely on for filtering and insight into events will become more and more like the local priest, who was basically paid to read and translate Latin phrases into homilies that dealt with the death of a child or the recent outbreak of smallpox. And, you know, it's crazy, just crazy out there.

Now, in that context, is Jason Calcanis' new Weblogs Inc. the answer for business people who want to know what it all means? The mission statement on the site repeats what we know or, at least, tend to believe if we spend time blogging, that journalism is broken and that talent wants to be free and partnering is better than owning. This last idea, that partnering is better than owning, is actually an non-twist that means very little as partnership is shared ownership; the real question is how to provide a foundation for new thinking that is extensibly ownable, so that new participants can take shares of revenue for their added contributions to previous thoughts. The whole idea of the Creative Commons is that we can share ideas and, if we choose, through a Share and Share Alike non-commercial use license collect for any commercial re-use of original ideas while leaving them in the public domain for non-commerical use by others.

The end of the Weblogs Inc. pitch to would-be blogger-partners is this:

We also allow bloggers to leave our network at any time, for any reason, and take their content with them. The concept behind our agreement is that if you partner with us on a Weblog and leave a year later you can take all your content with you and do whatever you want with it. Our only condition is that we keep our copy of the content that is already in our archive. We think this is the fairest arrangement possible and that it promotes the kind of partnership we want to have with our bloggers.

Granted, that sounds fair, but what if the partnership hasn't worked? Is the injured party, should some financial or ethical transgression have occurred, obliged to leave their work in the partnership? There is something to be said for ownership (really, we're talking about control over our reputation) that allows us to refuse to be associated with another party if we've decided that the business relationship hasn't worked. If I feel the value of my contribution hasn't been honored and leave the partnership, why should what I was not compensated for continue to be the property of another? Typically, partners separating agree on how to split the assets of the partnership. For the small business or the freelance journalist, the continuing control over the product of their labor is one of the few bits of leverage they have and it should not be forfeited lightly.

I'm glad to see Weblogs Inc. says it "sincerely hope[s] to help this field mature," but it isn't clear how that will happen because they host a collection of blogs. Marketing is important, and Jason Calcanis has marketed successfully in the past. What can't be predicted is whether posting calls for bloggers, industry professional contributors and sponsors is going to provide the catalyst for a new type of trade publication, which is what the Weblogs Inc. mission statement seems to be getting at. It is certainly a nervy way to start, admitting upfront that without partners the company has nothing.

Taking Product Placement To The Limit

There is no limit how far broadcasters will go to turn a profit -- broadcasting is a profit-driven business. Two stories in the news today show some of the limits that can crop up. According to Editor and Publisher, unionized Wall Street Journal, Barron's and other Dow Jones publication writers are refusing to do on-air appearances on CNBC because they are not paid for the extra work, even though the company is paid. This is plainly unfair, since the company redefined the role of the writer to include performance and did not change the compensation for the job.

At the same time, Nokia is buying placement in a European reality show, Fashion House, in which teams of designers compete to create the most fashionable home, talking all the while on Nokia cell phones, with Nokia messaging in the show's titles, credits and bumpers at commercial breaks. This is the predictable track for product placement, but the Dow Jones practice of demanding print reporters go on-air is simple abuse of the power to hire and fire.

If Dow Jones doesn't compensate these writers, they'll be leaving and Dow Jones will either have to train up replacements, risking the editorial integrity of its publications in the meantime, or hire broadcast-trained reporters at broadcast reporter salaries. Either way, it's going to cost more than paying writers for the extra work they do for CNBC.

Consumers Ready For Net Video Subscriptions?

In-Stat/MDR says consumers are going to be spending $4.5 billion on subscription video services over the Net by 2007. I'm skeptical about the number, which represents a 460 percent increase in three years. Subscription services will require that the money come from somewhere else, given constricting consumer spending on media--complaints about the high cost of cable are a clear indicator that people are tired of paying more for content constantly. So, if consumers are going to be spending on video, it will probably come out of cable expenditures.

EFF urges the IEEE to back away from electronic voting standards

The Electronic Frontier Foundation is asking that the IEEE standards effort aimed at developing an electronic voting technology be slowed down and reconsidered. The would-be standard, IEEE 1583, is heavily influenced by the Department of Defense, which is providing the technology that will be used by a number of states in the 2004 election. Voters cannot verify their votes, eliminating any chance of auditing elections fairly.

"Members of the security community report that the current standard is flawed. P1583 is largely a design standard, describing how to configure current electronic voting machines, instead of a performance standard setting benchmarks and processes for testing the security, reliability, accessibility, and accuracy of these machines. "

As I reported at Correspondences.org on July 15, the Department of Defense is behind the technology that a dozen states will use in 2004, which is troubling in a number of dimensions. This story has been underreported by the press--the most politicized department of the Bush Administration should not be handling election technology.

Maven Media -- Narrative Expanded

I met Hilmi Ozguc when he was at Lotus and, later, Narrative Communications, one of the early Web marketing technology companies. Now he is back with Maven Networks, a DVD-quality video system currently targeted at online marketing companies. Interesting stuff, which Jeremy Allaire has been backing for some time.

It's very slick stuff, just a Narrative pushed the boundaries of earlier marketing. Narrative was acquired by @Home for $89 million in 1998. The new Russell Crowe flick from 20th Century Fox will be one of the first to use Maven's technology for online promotions. Jeremy has some useful notes about why he and General Catalyst Partners invested in Maven Networks.

The question is whether the stark difference between the jaggy quality of video on the Net with marketing surrounding or punctuating it at a much higher quality resolution will underscore exactly how crappy video on the Net is today. The technology is designed for marketing and repurposing network video and, based on the positioning, can be applied in a variety of markets to create advertorial content that, I believe, will attempt to play the part of real content on corporate-controlled networks. At some point, people tire of marketing and we need to move both original creative and editorial video technologies forward while making advances in marketing tools. I would expect that in the short term we'll see Maven introduce more tools for creators of content that lowers the production threshold, which would open the Net to a wider range of original content.

Candidate Camera?

David Hume Kennerly, a Pulitzer Prize winning photojournalist, is offering a digital camera to everyone running for governor of California so they can record their campaigns. I think we need to go much further. Photojournalism is a largely objective art, in that a camera can occasionally happen to be in the right place at the right time to capture an image of real truth. Photos taken by or of candidates are like home movies that only accidentally tell us something. We need to enable citizens to capture their experience of the candidates, which can tell us something about the issues and the people contending to lead the state. And the thing is, if the six million or so people watching CNN right now were to contribute $50 a year, a people's CNN could be launched and run in a radically new experiment in news capture and dissemination.

Skype or Hype?

Stuart Henshall summarizes continuing discussion about the Skype service, including a long posting at Blogcritics by TDavid, who introduced me to the "callto" tag that allows emdedded VoIP telephony in Web pages. The debate now is over what Skype is worth, since there is no business model for calling services. Either Skype goes flat-rate or it gets built on spyware, TDavid concludes, because people who use services like blogrolling seldom pay.

Skype is a short burst at the beginning of something big, but it isn't going to be a proprietary application like Skype. VoIP telephony can be--is--built into a variety of applications already. The address book features of Skype, which are Skype-centric, are not hosted by a centralized server, as with blogrolling, so there should be no cost other than continuing development. A P2P system depends on distributed directories. If your peer doesn't know an address, it asks another peer and another until it finds the address--you can see this in the time it takes to propagate a Skype account across the Net. The real challenge is in making a peered system aware of and easily connected to the plain old telephone network.

TDavid writes that Skype is easy to configure through firewalls, and this is true. But I know of four companies that are doing secure IP peering without the need to provision. Essentially, phone companies have tried to retain control of secure layers of the IP stack to justify charging people to use virtual private networks and this gave programmers a target that produced this wave of unprovisioned secure connections. Thus, Skype's facility with firewalls is a short-lived advantage. Additionally, its non-standard implementation of the Session Initiation Protocol seems like a play to corral users that will become a disadvantage as the market develops. As I said the other day, I don't think the service is the default winner by a long shot. The real business model is in linking VoIP to plain old telephones, including 911, which would make a broadband connection into a true phone instead of a closed P2P system like Skype. Stuart Henshall is hosting a dinner to discuss Skype on Wednesday; I can't come down for it, but I'll be listening -- maybe via Skype. Does anyone know if the restaurant where Stuart and gang are meeting has Wi-Fi? Skype me (you'll need to download Skype and install it before clicking that link) if you know.

The Hard Part Is the Easy Part Is the Hard Part

I've been working for several weeks on the next installment of my emergent polities essay and, well, it's hard to get out. The reason it is hard is the answer is so simple: the world isn't black/white, right/wrong. There is a vast middle way but, for some reason, people insist we drive off the shoulders of the road, take an extreme unreflective position about issues, about things and, if you choose wrong, you are on the outs. You'd better watch it. This makes it hard to discuss things that have a place in our world, which are self-evident, like the value of government or the value of a free market, without running into the blank wall of absolutism. If you are for government, the free-marketers say, you are against the free market, and vice versa, as many people think that when one says there is a role for government it is an expression of consent to totalitarianism. But the world is greatly larger than those extremes.

Part of the problem, too, is the fact that much of the discussion of ideas has been reduced to slogans. This is the problem with the notion of emergence as the sum of unconscious decisions rather than conscious decisions that add up to a social system -- the society as anthill metaphor reduces the person to "profane trivialization of his or her humanity, and to utilitarianism," as Våclav Havel put it in his The Power of the Powerless.

Yet, slogans sell. To my mind, the more I wrap my mind around the question of how to transform even small corners of the market or society (and they are different, yet related things) to begin something new, the sloganeering of management theorists, while rousing, is just a distraction from the real issues. As the United States begins a dramatic transformation to a knowledge-dependent (as compared to knowledge-based) society, we are educating fewer and fewer people to think creatively, making more tradesmen who can do simple math; and in that context, the slogans of a Tom Peters, who I've always enjoyed reading and whose ideas I have used to manage and motivate people successfully, are revealed as a mere distraction. We need to change the notion of ownership and partnership which invests us all in society, not simply the way we manage people. This is the idea we hear fleetingly in slogans, but seldom in fully fleshed out ideas that deal with many perspectives and dimensions of our social reality.

And I cannot drive on the shoulder, ploughing over false opponents, people whom I have nothing against and every reason to want to draw into constructive discussion, yet who insist on seeing everything from the edge of reality, where all the accidents happen. Right or left, free or enslaved, disaster lurks at the extremes of human history. This is the hard part of writing about change, everyone is against it to one degree or another.

I was talking today with Tom Munnecke, of GivingSpace and who launched the September 12 Project and has thought extensively about how to explore positive alternatives. He sent a great essay along, Nothing Is Missing, that raises this issue of extremes and degrees of separation that are largely mythic and, yet, seem very real on the ground of experience. It's a great read, because it slowly strips away the cognitive dissonance that Tom experienced as his linguistic and cultural boundaries expanded to conclude that there is, in fact, nothing missing that prevents us from seeing beyond the mythic and cultural limits, but there is nothing, an absence of commonality in perspective that prevents us from seeing everything as a whole together at the same time, in other words, no central decision can produce results that apply everywhere at all times. We have to hold that paradox in our minds to recognize the hard part of any discussion with other peoples about how to move into the future, and then it is easy, because we have to come to accept a plurality of experience and opinions is necessary in a just society.

I sent Tom the first couple pages of the essay I am writing. Here is the text, with the changes he suggested in bold italics to make it a more positive discourse:

How can society institutionalize change? Assuming that a system which has become static is no longer alive, this is the demand of the rebel seeking to remediate injustice—they want a change—and the curse of the revolutionary, who moves from making a change in government to instituting a new order. The order becomes rigid almost from the moment it is suggested as political forces struggle to obtain and retain power. What about the U.S. Constitution? [My answer is that the Constitution is the greatest document on which government has been founded, but that it is under attack from people who fear the change represented by the flexibility of that document.] The French Revolution’s Terror and Russian Revolution’s purges are just two examples of how “every revolutionary ends by becoming either an oppressor or a heretic.” The question, then, is how can contemporary man transcend the historical pattern of rebellion that is extinguished in failure or that consumes itself in the flames of revolutionary absolutism? What can we do to answer these questions in a way that all can comprehend and participate in the resulting social organizations?

The answer is quite simple: Start amplifying those aspects of civilization which are positive, adaptive, and help make the world a better place. [Yes! This needed a positive start, rather than the negative statement that follows.] Stop killing and punishing dissent while embracing differences in a marketplace of ideas that leads people to a self-organizing regime of narrowly and, consequently, low-social-power polities that implement social policy in local and transnational systems that can adjust peacefully through democratic debate. Simple to say, but, so far, it has been very difficult to put into practice in the world. Even Gandhi’s India, which overthrew the British Empire through non-violence descended into domestic genocide; the “Velvet Revolution” in Eastern Europe and the South African liberation from apartheid led by Nelson Mandela have come the closest to change without post-revolutionary slaughter.

In the case of the United States, the Bush II Administration notwithstanding, the system is generally affirming of the values of democracy. Yet, any system of governance that will transcend the us/them politics of the 20th century, in which nations and minorities have struggled with one another for supremacy, will have to succeed in bringing change in spite of presence of borders. Moreover, the success of new democratic institutions demands they be successful in a variety of social and religious contexts—in other words, is there a system or practice that can work in conjunction with social and religious institutions that are relatively inflexible. If we can conceive a system in which groups of people with common interest or cause can organize to address their needs while co-existing with Islamic law or Chinese communist economics, then there is, at least, an opportunity for incremental improvements in local and transnational coordination of social efforts without having to spill a lot of blood. [END]

The problem is that whenever someone decides to rebel against a situation they find intolerable or unjust, they set up an enemy, even if the enemy is simply someone who doesn't agree with their definition of justice or tolerance. Yet, we need rebellion to pursue change. As Albert Camus wrote: "Rebellion, though apparently negative, since it creates nothing, is profoundly positive in that it reveals the part of man which must always be defended." When you institutionalize change, that is, when you turn from rebellion to revolution that gives form and permanence to the change, even the rebels turn on one another. We barely skirted self-immolation during the post-Revolutionary years in the United States, especially in the last years of John Adams' presidency and again during the 1840s to 1860s, the period leading up to, including and following the Civil War. Justice is such a fleeting thing, because we tend to drive on the shoulder of the road, shaking our fists at everyone who won't take and defend our position.

More on Skype

AKMA asked me if I expect to see an OS X client for Skype. See my answer here. But the important thing to note is that Skype is non-standard in a couple ways:

The "callto:" tag I mentioned the other day is not unique to Skype and, unless you associate the "callto:" tag with Skype during set up it will open other applications, like NetMeeting. This and the fact that Skype doesn't implement the Session Initiation Protocol in a standard way, indicates that there is a wide hole in this product, big enough for a truck to drive through, because the Skype client can succeed only by shutting out other VoIP applications.

I was on the phone yesterday with a friend at AOL who installed Skype while we talked. We could see the directory information propagate across a set of peers and it took a few minutes for us to find one another and, finally connect. Voice quality was excellent, but better voice quality than other services is merely a feature, not a complete application. Unlike the IM world, where proprietary systems could co-exist, I think VoIP applications are not going to succeed unless they connect to all other voice services, simply because the interconnectivity is a basic expectation in voice services. Look at the way wireless carriers have implemented their services -- you can call any phone out of the box but text messaging had to migrate through several generations of proprietary archipelagos before one could send a text message to a friend using a different carrier.

There are huge opportunities here, but not for a closed system (Skype has said it will open its code, but the non-standard SIP implementation is a barrier to connectivity that will not stand).

A Fairly Bad Economy

One of the best indicators of economic conditions in my neck of the woods is the Western Washington State Fair, or "the Puyallup" to us locals. It is one of the three largest fairs in the United States and in the top five in North America (yes, those Canadians can throw a hell of a fair). This year we went on a pleasant Friday night, the parking was easier and cheaper than in other years and while at the fair did not wait in line for any ride or for food. The only crowded areas were the livestock barns, where folks were coming to show their animals not just for the fun of coming to Puyallup.

Washington has the third highest unemployment in the nation and the Western Washington State Fair shows it. No crowds, most of the concerts were open seating rather than ticketed, which is unusual. On one ride, the Rotor, the kids were the only ones on the ride and the roller coaster, an old and creaky wooden rail shaker that will be torn down about about 70 years of service after the fair ends, was a quick walk up the ramp rather than the usual 30 to 40 minute wait. Attendance, according to the people working the rides, is reportedly down by 75,000 to 100,000 so far. This is a lousy economy, regardless of what we're hearing about recovery.

Top 10 fairs

North America's largest fairs, as measured by total attendance in 2002:

1. Minnesota State Fair, St. Paul 1,762,976
2. Canadian National Exhibition, Toronto 1,403,000
3. Houston Livestock Show & Rodeo 1,382,183
4. Calgary Exhibition & Stampede 1,206,111
5. Western Washington Fair, Puyallup 1,205,175
6. Los Angeles County Fair, Pomona 1,171,304
7. Eastern States Exposition, West Springfield, Mass. 1,135,480
8. Illinois State Fair, Springfield 1,130,000
9. San Diego County Fair, Del Mar 1,126,204
10. Arizona State Fair, Phoenix 1,079,508

Source: International Association of Fairs and Expositions

Isen Risin'

Good to see David Isenberg, of Rise of the Stupid Network fame, has started a blog. I met David way, way back when, just as he was starting to realize that it was time to get out of Bell Labs. Actually, shortly before, and he invited me back to give a talk on the Internet to a gathering of engineers. Thinking back to that event, the faces of people at many startups stand out, as well as many who did not leave and have not been heard from since.... Oh, the humanity.

General Electric adds incentives, fools rave

The Head Lemur points me to this story from The Motley Fool: "In very exciting news to us at The Motley Fool and to all investors,  General Electric (NYSE: GE) announced that CEO Jeffrey Immelt will receive a new form of compensation tied to performance targets achieved over five years. And when the nation's number one company by market capitalization makes such a move, others may follow. The board will award Immelt 250,000 performance share units (PSUs) with a present value of $7.5 million -- 8.5% more than Immelt's 2002 salary and bonus."

Now, let's see, he already makes $6.9 million in bonuses and salary (2002 actuals, according to the Motley Fool, but not according to other sources), so this extra $7.5 million in potential bonuses is good for investors exactly how?

It seems to me that if corporate leaders want to make a real change they should be getting into the same barrel with the investor entirely, where they make a base salary that is more or less normal for a "white collar" worker, not 150 times the typical manager's salary. Then, if they do perform, driving up stock values, hell, give them millions in gains along with the rest of of the investors. But, just adding more incentives atop an existing package that is astronomical doesn't cut it for me, in terms of perceived fairness.

As the Motley Fools explains, Immelt will receive these incentive shares based on their current value -- essentially, it is money on the table for him already and, if the price of GE stock rises 10 percent (easy to achieve when you're coming out of a bear market), he gets half those shares at their increased value or $3,385,000 in extra compensation, bringing his compensation to approximately $18 million.

What the Motley Fool fails to mention, saying that Immelt's compensation last year was approximately $6.9 million, is that Mr. immelt's actual total compensation for the last fiscal year was $14,438,350. Now, compared to the mean income received by the top 5 percent of U.S. households of $260,464 in 2001, he is earning about 55 times what your richest neighbors do if you live in the top five percent of U.S. neighborhoods.

What will the effect of the additional compensation be, other than a bonus for actually delivering additional value to shareholders on top of a generous compensation package? Mr. Immelt makes a fabulously large salary, more than the recently deposed chairman of the New York Stock Exchange, Richard Grasso. Real income for U.S. households has been falling for years, but Jeff Immelt has seen his income rise, even through the worst of economic times. Increased risk, not simply increased incentives, are the experience of the typical investor, so let's see executives share the risks, not just the rewards.

Global Knowledge Development Database

For those of you interested in expanding markets for information technology and the attendant problems, controversies and and changes, a very good database was announced yesterday. Highly recommended for research into every aspect of global infrastructure development.

Bushies: An Epic Photolog

Beginning today, Correspondences.org will be carrying "Bushies," the epic photolog of a young man with a dream. Actually, it was his father's dream, but it came true, despite young George's skipping out on military duty in Vietnam, the carousing, the drinking, the drugs. Not only did he become President, he's a Naval Aviator, to boot.

Bush/Cheney 2004: Restoring Civil Liberties Around the World

Oh Boy, New Toy....

My George W. Bush, U.S. President and Naval Aviator, doll has just arrived. Time for high satire. Note: The doll comes with an external spine that makes the President stand up straight.

More on McLuhan

Reader Simon Sheppard, who can make comments himself now that RatcliffeBlog is hosted on Moveable Type, responds to my reply to his email....

"For the 'content' of a medium is like the juicy piece of meat carried by the burglar to distract the watchdog of the mind. The effect of the medium is made strong and intense just because it is given another medium as 'content.'" So, I stick by my comments the other day, that the reduction of the value of communication to the medium used rather than the content delivered is wrong-headed.

Here's my way of thinking about this - imagine two websites, one with horrible usability and one with great usability - they both have the same content.

The site with good usability will gather visitors faster, you can't say this is because of the content, and yet it's not purely from the better usability either - without the content there would be nothing - you need both. I think this is roughly what Marshall was trying to say.

This is a good point, because there are effects of a medium, about which McLuhan is quite correct, on the uncritical audience member -- we know this from the experience of art in museums or novels that bother even stupid people, nagging them with their power even after the direct experience of the message. But there are two things I object to in McLuhan's analysis. First, he is an elitist with regard to whom he acknowledges can understand and manipulate media and, second, he applies too heavy an emphasis to the medium throughout his work. By focusing on the "hot" media, he missed how all media start relatively "hot" and become cooler, more democratic over time.

Sporadic posting during migration

Sporadic posting during migration

I've been threatening to move my blog to Moveable Type and am actually attempting it, beginning right now. Who knows how big a can of worms I've opened, but it will be painfully clear to you if over the next couple days I suddenly vanish, blogaphorically speaking. In any case, I'll be backed up and, MT or not, I'll be here when this journey is done.

So, you can Skype me

So, you can Skype me

TDavid of www.makeyougohmm.com answers my request for a "Skype me" link. Here's his explanation and the HTML tag and here's my "Skype me" link. You'll need to download and install Skype.

On the "this looks like a viral winner" scale, Skype's rising pretty fast in my estimation. Now, for Technorati and Google integration....

Tie Skype to social software...

Tie Skype to social software and you have automagical experience

Stuart Henshall and I were talking today via Skype, the P2P voice over IP (VoIP) application, and agreed that a Skype tag that allowed someone reading a blog entry, a Web page of any sort, or any document that supported calls to Web resources, to click a link to open a VoIP connection with the author would be a powerful foundation for a business model in social software. Imagine being able to talk to someone when your trackbacks show a new connection from their blog -- instant social connection, instant business connection. Technorati and Google APIs would become phone listings. Blog pages would be self-organizing phone books. Connections would proliferate, but of course there would be other issues to work out (that being the really great thing about technology: one begets another begats another like genealogical lists in the Bible).

Tie expertise to follow-ups, so that you could ask a blogger a follow-up question or ping a lawyer for a bit of advice after reading their Web page; the key being that there could be a fee for real-time personal connections -- or not, as it is also easy to see how the recipient of the call (the author) could use the right query to unlock more information and, so, would not want or need to get paid.

Stuart writes comprehensively about this. Here is a key sample:

Thus blogging / knowledge assets would also have a Skype contact number capability and whether they could be reached now or if they are offline you could offer a notification service perhaps even using Skype that so’n so is now online. Potentially you could make this a Technorati call. You become the call forwarder thus brokering the intro. Ie this person has linked to your blog and is available to talk to you. Similarly when I send a trackback pin, should I have an option to ping Technorati that I'd be willing to talk to the pinged author? There's a lot that could be done here. I imagine Feedster too could start searching online Skype users and link back to retrieved postings.

What I want right here at the end of a posting is a "Skype me" link. Now, the problem is Skype is proprietary, so what I expect to see is either Skype going open source or that an open source alternative will emerge. What, then, is Skype's business? Being the best aggregator of social links and providing a fee-based bridge to the switched telephone network.

IT spending still uncertain

IT spending still uncertain

Goldman Sachs has released a report that suggests IT spending expectations among Fortune 1000 CIOs have actually trended downward since June. They may buy more IT, but they expect to pay less for it.

McLuhan: What did he write...

McLuhan: What did he write and what did he mean?

Reader Simon Sheppard points out that the title of Marshall McLuhan's book, The Medium is the Massage, is misspelled in my recent posting about the primacy of the message over medium. The meaning of that title is speculated about well here and here and as the latter article that part-rightly points out, McLuhan's thought is "frequently reduced to one-liners, and small sound bites, which sum up the more complicated content of this probing and rigorous examiniation of the media, a word he coined." In fact, McLuhan did not coin the word media, which has been in general usage since 1923, according to the Oxford English Dictionary, but McLuhan did change our understanding of the word substantially.

McLuhan's word play resulted in a widespread misunderstanding that resulted in the most famous of his pronouncments look like a typo. Everyone I know refers to "the medium is the message," because it was wordplay and reinforced McLuhan's repeated denigration of content throughout his work. I think he knew this, as he did not go to any lengths to correct the misquotation in his lifetime.

Furthermore, and acknowledging that I am placing myself in the camp of McLuhan's "technological idiots," he wrote in Understanding Media: "Our conventional response to all media, namely that it is how they are used that counts, is the numb stance of the technological idiot. For the 'content' of a medium is like the juicy piece of meat carried by the burglar to distract the watchdog of the mind. The effect of the medium is made strong and intense just because it is given another medium as 'content.'" So, I stick by my comments the other day, that the reduction of the value of communication to the medium used rather than the content delivered is wrong-headed.

This is not to say that McLuhan is wrong-headed and not worth reading. He is a tremendously important theorist and, more importantly, myth-maker who helped explain what we are doing to ourselves, just as Greek myth explained the transition from uncivilized bucolic society to sophisticated city life.

He is wrong-headed specifically because he establishes an elitest view of media and technology, when he writes that "The serious artist is the only person able to encounter technology with impunity, just because he is an expert aware of the changes in sense perception." He is wrong, because this presumes as an ineluctable truth that most people are incapable of addressing changes in their communicative environment; the rise of the Net, the sudden influx of new messages into the mass media that have come from jazz, rock and hip-hop music, the simple progress of human storytelling from Homer to today, all disprove the elitist idea McLuhan puts forward in Understanding Media. We are led to new horizons by artists, but it requires intelligence to follow and become productive in those new worlds, which everyone can, and often, do. The flourishing service economy and the vast expansion of small home-based businesses demonstrate that many non-serious artists have addressed this technological shift effectively. And, frankly, the fact that I've worked in media for years, adjusting to new technologies constantly (at the first paper I worked at, we did layout using wax and an X-acto blade), proves that ordinary people and not just serious artists are encountering and learning to use technology all the time. We live in a post-elitist era, when the voices of many can be heard and my point the other day was that we should not be constrained by the definitions of what is a blog and what isn't, just as we should no longer trust media professionals to deliver a one-way stream of information into our home, insisting our voices be heard, too.

In McLuhan's words, after the frantic build out of the Web, the medium is cooling down: "Hot media are... low in participation, and cool media are high in participation or completion by the audience."

UI insults

UI insults

Designing application interfaces that make people want to immediately jump in and use the software is an art. I've just downloaded Skype, the hot-right-now peer-to-peer voice over IP application. After installing, the first actual message I get from this software is...

You have: No friends online

Well, thanks for that existential moment. Wow, and I thought I had some friends online. Wouldn't "Find your friends" or "Start connecting" have been better choices for the first message the user sees? It's a well-designed application, but someone should talk to these people about how to use language to create an inviting user experience.

Take a note from the experience of, I believe it was Toyota, which used to wear away at people's nerves with the message "Your door is ajar," which became an epistemological joke.

Taxes...

Taxes...

A note I made in the margin of Karl Popper's The Open Society and Its Enemies, Vol II tonight: Okay, so people are willing to send their children to die for the country's goals, but they won't pay taxes to contribute to the general welfare, to invest together in the future, the future of those selfsame children, should they be spared the call to war? How do these two stances coincide in neoconservative thought?

Thinking about Johnny Cash

Thinking about Johnny Cash

You've got to wonder about our priorities. Johnny Cash, 71 years young and a former drug and alcohol abuser, is considered a national treasure, but our government is full of people incapable of admitting even the smallest error. Heck, George W. Bush still hasn't admitted he had a coke problem. I've been listening to American IV for a few months steadily -- my kids like to listen to "Damn Your Eyes" on the way to school. His was music about life, especially the mistakes with which we live. Yet, today's country music seems lost in a cosmos of unquestioning patriotism and support for our leaders, who are revered by many of the same people who loved Johnny Cash for his Christian perspective on life. But they are incapable of the same humanity that Cash exemplified, because they can't see the duality that characterized this person. It was the capacity for carrying on despite the horrors of life, the humility combined with a boldness, that made Johnny Cash an American treasure.

Proving that the message is...

Proving that the message is the message and not the slave of the medium

Ever since Marshall McLuhan proclaimed that "the medium is the message" people have had this notion that the channel we communicate through is more important than the content of the channel. This is what raises the whole "blogging is different" argument to a level nearing religious fervor. But blogging as a format is just a chronologically reversed display of postings; what people do with the tools they have available is what matters. Proof? Look at the Reverse Cowgirl's Blog.

Susannah's gone. As a result, her blog URL, which for all intents and purposes is the medium, brings up a directory tree that has been stripped bare. So, is the medium the message, other than to convey that the Reverse Cowgirl has left the building? Claiming that the medium is making the message more than the person communicating through the medium is like really seriously arguing that a tree falling in the forest doesn't make a sound if no one is there to hear it. In fact, it is how we choose to use media that makes the meaning, and that is the message.

Let's look at another medium, the freeway, once the metaphor of choice for the Net (you remember the Information Superhighway, don't you?) What does this picture tell you about freeways?

Does it say that freeways turn us into slaves or does it tell you that a lot of people make bad choices about how to get around? Isn't the real point of a traffic jam that we all have decided to put our butts in cars to get somewhere? That's the choice, the freeway doesn't enslave us to hours of sitting in traffic listening to bad radio (and some few instances of very good radio that is unique to a region, full of cultural nuance that disappears when a radio conglomerate fills the airwaves with the same old schlocky crap no matter where one is listening). We make our decisions, we live with the results. We communicate, whether by blog or telephone, television or radio, and most of us treat communication like it is happening to us rather than as something we participate in. We can choose to communicte differently, to blog honestly or dishonestly, to blog for money or love or friendship, but the blog doesn't make us, it merely lowers the barrier to getting the message out; it does not make the message itself substantially different, unless you really do treat everything you see and hear as happening to you rather than part of the life you are living. We participate or we don't, regardless of the medium.

September 11

September 11

It was two years ago today that I turned on the computer as the kids were getting up and saw a story on MyYahoo that said a plane had crashed into the World Trade Center. It was vague, early information and before the second plane hit. I turned on the TV as the second plane was approaching. The rest is, well, history that we all shared.

I called my wife, who was getting the kids ready for their first day of school. School opened with the national anthem and a prayer, it was also the grand opening of a new building and I remember sitting with a Walkman trying to understand what was happening while the principle and the mayor talked about the future with the kids. A plane had also crashed into the Pentagon; my neighbors are largely military, as we live near two large bases. Many of the people in the crowd at school were wearing fatigues and flight suits.

Today, the headline on the Tacoma News Tribune is "America copes in a world of change." The Associated Press story starts:

Yellow is still yellow, orange is still orange, red still red.

But these colors now have other, ominous meanings - just as a cloudless blue sky, once an uncomplicated pleasure, now suggests to many in New York and Washington a morning two years ago when a clear sky gave way to an unimaginable horror.

In so very many ways, the world has changed since Sept. 11, 2001.

This makes me think we've gone astray, that we are not responding to the attacks, to the world the right way. Before 9/11, America was the embodiment of change and we thrived along with the world amidst change. We loved change and embraced it. Now, trying to protect ourselves, we seem to have become something inflexible and monolithic, a country of one and one way rather than a dynamic environment full of growth, courage, and welcoming of any challenge.

It is good that we memorialize the dead and honor the people who gave their lives trying to help others, but the solemnity of these events is troubling. Think about the celebrations of Independence Day, by contrast, when there is real joy at being American -- we remember Pearl Harbor but moved on and do not re-enact the grief over the loss each year. If we are going to institutionalize a funeral service every year, we have buried what Americ was. We have turned back and left the path we were on, not just in terms of what we were ignorant of before 9/11, but also the deep commitment to pulling together to overcome, to move forward, to create together. That is the United States. We are united in grief, but it is time to move on.

Lousy Wi-Fi...

Lousy Wi-Fi...

My two days in San Francisco were plagued by poor Wi-Fi connections. No kudos to Wayport or Blue Wireless, especially the lousy performance of Wayport at the San Jose airport. The only time it worked reliably was when I was entering my payment information, then it just sucked, and that only sporadically when it was actually visible to my Airport card.

Anyhow, I am back online. In the IRC channel, too.

The single without the vinyl

The single without the vinyl

At last, a music company that sees something positive about the Net. Virgin Megastores, the retail arm of Richard Branson's Virgin empire, which started with a record label and still has one, said Net downloads could save the music "single," the two-song package that used to be delivered on a 45 RPM vinyl disc (for you kids out there, these were played on a spinning platter with a diamond needle). But the price wars get more intense, as Virgin bills its downloads as the cheapest yet at 95 cents a song.

RIP, Warren Zevon

RIP, Warren Zevon

The singer and songwriter has passed away.

IMF: Watch For Deflation In...

IMF: Watch For Deflation In Japan

The International Monetary Fund is warning that Japan's economic progress is under a serious threat from deflation. I've been saying it for a long time, but here it is from the IMF (a PDF file).

FOLLOW-UP: Japanese Prime Minister Junichiro Koizumi is promising two percent economic growth by 2006. That's compared with the average annual growth of 3.6 percent Japan experienced between 1970 and 1995 (and that, of course, is a figure that includes almost six years of poor economic performance between 1990 and 1995).

CNN Pre-Bush Speech Proselytizing

CNN Pre-Bush Speech Proselytizing

I am astonished that CNN is running a special on 9/11 about the "people story," as Aaron Brown puts it, in advance of President Bush's speech on Iraq. Already, 70 percent of Americans believe Saddam Hussein had something to do with the attack on the World Trade Center, when no such connection has ever been proved -- I spent a half hour talking with my nephew this morning, who thinks Saddam helped plan and execute the attack against the World Trade Center. Yet, here, simply by their programming decision, is CNN reinforcing that link. Astonishing. It's a disgusting crypto-propaganda exercise less than an hour before the President speaks on Iraq.

FOLLOW-UP: My analysis of Mr. Bush's speech is at Correspondences.org.

The Decline and Fall of...

The Decline and Fall of Print?

MediaPost has a story, dated tomorrow, that suggests newspapers and magazines are losing advertising to online and more niche cable stations. Advertisers, seeing audiences fragment, are choosing their ad spending for more targeted access to customers. This makes sense for two reasons: 1.) online and cable spends are less expensive than major print and the major broadcast networks, and; 2.) as audiences self-select into niches, the breadth of ads in general interest publications will decrease as niche advertisers flee to more targeted media.

This also suggests that advertising on blogs and other focused sites will eventually grow into a significant sector. That's not to say they will rival mainstream publications, but that they will become self-sustaining publications. After all, for a blogger to make a living, their blog usually a second or third income, a full year's revenue of $10,000 or $30,000 would be a huge windfall. Will a blog be a million-dollar business? Not many, if any, but blogs don't need to generate that much revenue.

It may also be too early to declare the end of print, but this is certainly an indication that general interest pubs are going to be thinner or that ad rates will come down to support higher page counts (and, concurrently, shrinking editorial space, which will eat away at readership, too). In the future, most publications will be more specialized.

Doc wants his local news...

Doc wants his local news extreme

As I've been prepping to write the next and probably most ideologically charged part of the Emergentism series, I've been playing with how various workstyles have already paved the way for emergent polities in which people self-organize to address specific issues. Extreme programming, which is singular in its focus on a specific user requirement and relies heavily on feedback is one of the key ideas in work organization I am relying on. This is the type of orgnaization that Doc Searls wants when he writes: "What I really wish, though, is that we (the citizens of Santa Barbara) would find a way to come up with a local public radio station. I've carped about this before, so I'll let that link spare us repetition." This is what Correspondences.org is aiming at, what we're talking with a number of folks about forging; not just a local NPR station, but an international public news organization.

The Future Is Open

The Future Is Open

Open source. Open media. Open communication. It's not just Linux, but IBM is pulling out the stops for Linux. Check out this ad (choose your own media format) if you think the closed systems of the past are the way of the future.

Those Lost Jobs Aren't Coming...

Those Lost Jobs Aren't Coming Back

The Federal Reserve Bank of New York has published a report that suggests the jobless recovery is a result of a fundamental change in the structure of the U.S. economy. A novel result of this change is a productivity driven recovery, in which job creation takes much longer because it is new positions (and, hence, new capital to be put to work) rather than rehiring to fill laid-off workers' jobs.

If job growth now depends on the creation of new positions in different firms and industries, then we would expect a long lag before employment rebounded. Employers incur risks in creating new jobs, and require additional time to establish and fill positions.

Job Adjustments by Industries during the 2001 Recession and Subsequent Recovery

How, then, do the job flows in the 2001 recession and subsequent recovery compare with those in the early 1980s? Chart 4 shows the distribution of major U.S. industries for the recent period. The difference from the pattern of the early 1980s is quite stark: now, the industries cluster heavily in the two structural quadrants. Most of the industries that lost jobs during the recession—for example, communications, electronic equipment, and securities and commodities brokers—are still losing jobs. Balancing the structural losses of these industries, however, are the structural gains of others. For example, nondepository financial institutions, an industry grouping that includes mortgage brokers, added jobs during both the recession and the recovery. The trend revealed in Chart 4 is one in which jobs are relocated from some industries to others, not reclaimed by the same industries that had lost them earlier. The chart provides persuasive evidence that structural change predominated in the most recent recession.

Without jobs, it's not a...

Without jobs, it's not a recovery

Households bouyed the economy through the worst of the economic downturn, but individual workers aren't getting any relief with the so-called recovery. The Bureau of Labor Statistics this morning reported that unemployment increased by 93,000. In a kind of disengenuous exercise, the BLS says the "unemployment rate was essentially unchanged at 6.1 percent." Well, yes, there are so many people unemployed that a hundred thousand more doesn't make a statistical difference.

Consumer sentiment had already been reported to have fallen in August; now we know that consumers are reading the situation more accurately than the stock market. Given the comments yesterday by Federal Reserve Board member Ben Bernake that the Fed doesn't expect employment to improve before the end of the year, this suggests retail sales may be weak enough through Christmas that inventories will not fall far enough to spur new business investment. The burst of spending during the past couple months seems to have been a short-lived reaction to the Bush tax refund checks sent in July.

The downside of emergent polity...

The downside of emergent polity is the same as plain old democracy

Doc Searls points to Steven Clift's posting about the E-Democracy, E-Governance and Public Net-Work, especially this excerpt:

Ultimately, the main challenge for governance in the information age will be accommodating the will of the people in many small and large ways online. The great unknown is whether citizen and political institutional use of this new medium will lead to more responsive government or whether the noise generated by competing interests online will make governance more difficult.  It is possible that current use of ICTs in government and politics, which are often not formulated with democratic intent, will actually make governance less responsive.

Indeed, the failure of government to be responsive is the very problem digitally mediated government seeks to reform, and because of invisible dogmas and the normal propensity of people in power to hold information and power closely, there is no guarantee the results of introducing technology qua technology will do anything other than reinforce existing power structures.

One of the key ideas I am focusing on in the next part of my emergent polity series is the idea that, given all the failings in human nature, a widely democratic system of narrowly focused projects organized and operated by the people rather than bureaucrats imposing top-down solutions on the people is our best chance, but by no means a guarantee, that digitally mediated governance will improve our situation. The diversity of communication channels and topical focii on the Net do suggest this is a social environment that is open to many more egalitarian self-organizing solutions to social problems.

America's Not an Growth Entertainment...

America's Not an Growth Entertainment Market?

Even as Sony announced it will compete in the U.S. with iTunes in the downloadable music market, the company is realigning its business units to reduce its reliance on U.S. revenues. In all the hoo-haa about its music service, most of the press is missing a clear statement that the U.S. is perceived as providing companies only marginal growth opportunities. This will be good for U.S. consumers, because hardware and software prices will start to be oriented to Asian markets that support lower prices with much larger sales volumes, but they might need to learn Cantonese to play their games.

In the music market, saying one will compete with another retailer is like saying that they will sell for less, since there is no good reason to restrict one's own product exposure by stopping sales by a competing music retailer. Sony didn't stop selling music through Tower Records when it opened the Sony stores and neither will it stop selling through iTunes; this means it will be price-based competition. And, as I pointed out with regard the Rolling Stones' "exclusive" agreement with Rhapsody, there is no such thing as an exclusive in the music business -- the Stones' music is on iTunes already.

So, you can see why growth in U.S. entertainment revenues might look rather unattractive to media companies. CD prices are being slashed, though some music companies will fight the trend. Downloadable music, while cheaper to deliver, has to compete with piracy, at least in music execs' minds -- it's really just a matter of pricing fairly. And digital video is perceived as a similarly disadvantaged market environment for film.

Microsoft everywhere, Motorola underneath?

Microsoft everywhere, Motorola underneath?

A couple days back, Motorola dumped its investment in Symbian, the long-doomed portable OS backed primarily by Nokia and Psion. Symbian's is a fine little OS, but it has never lived comfortably with Microsoft and for reasons that are hard to explain, primarily related to design expectations, never caught on with American consumers. Now, Motorola has licensed the Microsoft smartphone OS, and will launch a phone for European carrier Orange. After Nokia, Moto is the next largest maker of cell phones and it seems to have opted to make its hardware an exchangeable commodity, which is probably the right move.

Smartphone development has been so fragmented that hardware regularly introduces major incompatibilities into the consumer experience and a commodity hardware approach that lets people switch phones and migrate their data quickly and easily (as Palm as tried to do without gaining hardware makers' support) is a logical end of the differentiation wars in mobile telephony. One wonders how long it will take a Samsung, Sony or, even, Nokia, to fall on the other side of the fence with Palm. But, ultimately, phone hardware will turn to a platform for both Microsoft and Palm's OSes, along with Symbian offerings in Europe and Asia.

Note, too, that Motorola added (more) media processing capabilities to its carrier systems yesterday, suggesting it is moving to a platform-neutral but robust hardware strategy in the carrier market.

Welcome to the PC stage of the smartphone market.

Fed Governor: No backing off...

Fed Governor: No backing off on inflation hawkishness

Federal Reserve Governor Ben Bernake gave a talk at the Bloomberg Panel for the Outlook on the U.S. Economy this morning. It's interesting for a number of reasons, including his suggestion that the unemployment rate will stay where it is through the end of the year (confirming the conclusion that those manufacturing jobs aren't coming back) and that rates will stay low, perhaps even into 2005. With all this easy money out there, why aren't companies substantially increasing investment? Bernake says he "doesn't fully understand the sources of this conservative behavior on the part of company management."

What comes through in his words is a consistent concern that deflation ("disinflation" in the marketing speak of the Fed) is a continuing concern. He describes a jobless recovery because companies will not turn to U.S. manufacturing for additional capacity, even though he doesn't say that explicitly.

Key excerpts:

The central tendency of FOMC forecasts for the unemployment rate, as of the end of this past June, called for the rate to fall to between 6 and 6-1/4 percent in the fourth quarter of this year and to decline to between 5-1/2 and 6 percent in the fourth quarter of 2004.... I have been of the view for quite a while that acceleration of growth to 4 percent or better in 2004 is plausible; and I agree also that the decline in the unemployment rate, though steady, is likely to be slow.

Looking beyond the very near term, I see some grounds for optimism that the revival in business investment will persist, laying the foundation for continuing rapid expansion in 2004. First, the strong growth in demand already in train should provide incentives to corporate managers to expand productive capacity, particularly given the efforts that they have already made to reduce costs and increase the efficiency of production within existing plants. In that regard, I think it is worth pointing out that firms have been meeting demand recently not only by getting greater productivity out of their existing capital and labor resources but also by running down inventory stocks relative to sales. If the past is a guide, we may soon see a quarter or two of inventory building that provides a powerful boost to the growth rate of output.

The current policy of ease results from concerns that inflation will fall below that acceptable range. But at some point in the future, disinflationary forces will abate, and the risks to inflation may turn upwards. At that point I expect that the FOMC will act forcefully to ensure that inflation remains low and stable.

MyYahoo! adds blog/RSS module

MyYahoo! adds blog/RSS module

Interesting. Check this out -- see your blog content alongside the rest of the stuff that fills a MyYahoo! page. Or just click here to add the module to your MyYahoo! home page. It's integrated rather nicely and includes summaries for recent postings and links for those more than a day old in two columns.

Thanks to LibraryStuff for the link.

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Underfunded pensions: Another nail in...

Underfunded pensions: Another nail in the cross of economic recovery?

That the American worker is paying the majority of the cost of the excesses and abuses of the past decade is disgusting. That's not just factory workers, but service workers and information workers. Steven Kandarian, executive director of the Pension Benefit Guaranty Corp. (PBGC), a public entitity that ensures more than $1.5 trillion in retirement benefits told the Committee on Education and the Workforce this morning that "there has been a sharp deterioration in the funded status of pension plans, and the PBGC now has a record deficit as the result of the recent terminations of large underfunded plans."

Remember, this is an entity that serves as a stop-gap for private companies, which are failing to fund their retirement funds at record levels; by the end of the year, the PBGC expects that companies will be $80 billion behind their obligations. It has hit the PBGC hard this year:

During FY 2002, PBGC's single-employer insurance program went from a surplus of $7.7 billion to a deficit of $3.6 billion - a loss of $11.3 billion in just one year. The $11.3 billion loss is more than five times larger than any previous one-year loss in the agency's 28-year history. Moreover, based on our latest unaudited financial report, the deficit had grown to $5.7 billion as of July 31, 2003.

Republican administrations consistently build a worse situation for future retirees, as this graph demonstrates:

This is another example of how the Bush Administration is strangling our future. As Kandarian put it: "Mr. Chairman, we should not pass off the cost of today's pension problems to future generations. If companies do not fund the pension promises they make, someone else will have to pay -- either workers in the form of reduced benefits, other companies in the form of higher PBGC premiums, or taxpayers in the form of a PBGC bailout."

Shades of emergent polity

Shades of emergent polity

Nick Jones, writing for Ariadne Capital reports that the United Kingdom's Office of the eEnvoy is seeking ways to create a mixed economy of public/private solutions to social challenges. Tony Blair describes the effort as: “Not top down, one size fits all, a sort of command and control Public Service, but instead setting an enabling framework and letting local innovation, diversity, choice, services built around the consumer and the citizen, be of paramount consideration”.

Understanding diplomacy

Understanding diplomacy

The Bush Administration has proved beyond a shadow of doubt that it doesn't understand the first thing about diplomacy. It rides roughshod over would-be allies and squandered a historic opportunity to unite the world after 9/11. Now, our Arab friends are jockeying for position to counter U.S. power, paying visits to Moscow to begin the building of a substantial anti-U.S. coalition while Don Rumsfeld and his neocon legion scoff at negotiating with the United Nations about its role in Iraq. At a town hall meeting with troops on August 25th, Rumsfeld had this to say:

"...what is the likelihood of our forces serving under a blue-hatted United Nations leadership? And I think that's not going to happen."

Having seen the Department of Defense botch the peace in Iraq, you'd wonder why any of the "chocolate-making countries" would tolerate taking orders from ol' Don Rumsfeld.

Lawrence Kaplan, writing in the The New Republic (sorry, it's a subscription page), suggests that U.S. citizens are perfectly content to lose their children for a good cause, citing a number of research findings that suggest this is the case. TNR is decidedly hawkish on Iraq. I think we could be sitting comfortably on the no-fly zones actually enforcing the peace today and forcing delivery of oil-dollars backed relief to Iraqi citizens by U.N. forces if we hadn't been so eager to find and destroy an enemy (one still without any links to our real enemy, al Queda). But, I agree with Kaplan that the American people, having seen how badly we've screwed the Iraqi people, now believe they need to make good on the promises of peace and democracy. Were we to simply stick to that goal, admitting our forces are unable to deliver these goals on their own and opening a legitimate dialog with the U.N. and the Arab Street to find a way to restore peace and increase prosperity in Iraq, the U.S. could pull this out and see far fewer of its children killed in the effort. But the Bush Administration, especially the big dick-swinging Rummy and Cowboy George, refuse to cede any potential for taking credit for a real success. As France and Germany put it today, the U.S. proposal to the U.N. is "rather far from the main objective," that is creating a democratic and free Iraq.

This administration is incapable of leading peaceful change. We need a change in regime to achieve the goals that, having screwed Iraq and now obligated to marry it, the U.S. is obligated by its traditions of egality and prosperity to deliver Iraq. If we don't, the worst is in store as Arab leaders use their diplomatic efforts to create an anti-U.S. alignment in the world.

You have to pay attention to this passage from Arab News, a Saudi government-controlled site, which reads like a warning:

Saudi Arabia and Russia have a great deal in common. The two countries’ views are close on a range of political issues and, on the Middle East, almost identical. Russia endorsed Prince Abdullah’s Middle East peace proposals as the only means to end conflict between Palestinians and Israelis; both opposed the invasion of Iraq; both have the same view on the need for an internationally agreed postwar settlement there. It is this common political stand that has provided the foundation for closer commercial relations.

FOLLOW-UP: This posting ignited an energetic series of comments at Correspondences.org.

Columbia Journalism Review: Amateur journalists...

Columbia Journalism Review: Amateur journalists weigh in

Matt Welch has a piece in the new Columbia Journalism Review on bloggers, the amateurs reinvigorating his profession, based on observations at the recent Association of Alternative Newsweeklies conference. What is avocation today becomes vocation tomorrow--people pursue work they enjoy--so the professionals need to be aware that the energy animating civic journalism efforts they noticed today will provide their competition by 6 PM tonight. Welch's conclusion to a long piece:

For those with time to notice, blogs are also a great cheap farm system for talent. You've got tens of thousands of potential columnists writing for free, fueled by passion, operating in a free market where the cream rises quickly.

Best of all, perhaps, the phenomenon is simply entertaining. When do you last recall reading some writer and thinking "damn, he sure looks like he's having fun"? It's what buttoned-down reporters thought of their long-haired brethren back in the 1960s. The 2003 version may not be so immediately identifiable on sight — and that may be the most promising development of all.

Patent value analysis

Patent value analysis

There is an intense discussion of the Eolas Technologies/University of California patent infringement suit against Microsoft for its use of plug-ins in Internet Explorer. The W3C mailing list is interesting reading, since the real question seems to be whether Microsoft will use this to shoulder key plug-ins out of IE. Eolas walks away with a $521 million award, but it also seems to hold a key patent for most any call to an external resource from within a Web browser, which is just plain dumb, since the idea that a program can call external code is older than dirt.

In the September edition of TRIZ Journal, an online publication about the Theory of Inventive Problem Solving, there is an interesting piece by Barry Winkless on the analysis of patent values, both from the perspective of the asset value in a patent and how it relates to national competitiveness. The paper is flawed for a number of reaons, I think, particilarly because it emphasizes the "increasing importance of patents" while ignoring the implications of open source and services-based business (that is, those in which business process patents aren't used to protect competitive advantages). Did you know Finland has the highest per capita rate of patent applications? It's worth a read (the article is available only as a PDF file).

Switch fun

Switch fun

From Joi Ito's #joiito chump blog, this wretchedly funny story of life with a Mac.

Counter-intuitive: Savings justified Grasso payout

Counter-intuitive: Savings justified Grasso payout

The New York Stock Exchange said its $140 million payout of Richard Grasso will save it $3.5 million this year. That's great, but what justifies paying a CEO $1.4 million a year in salary with guaranteed bonus of at least $1 million when the company he operates earns just $28 million a year? This is the wrong precedent to set, methinks.

China: Don't look for relief,...

China: Don't look for relief, just a Snow job

U.S. Secretary of the Treasury John Snow is headed to Beijing to work on his balancing act, asking the Chinese to let the yuan float against the dollar and other concessions to compensate for the country's rising trade surplus with the United States. Don't look for success as much as an offer to defray the impact in the form of more Chinse purchases of U.S. Treasury bonds--this, in effect, allows us to pay interest to get the surplus reduced.

Bush and Snow: Looking where the U.S. economy is going - down
Source: U.S. Department of Treasury Web site

The Treasury press release devotes the following to the description of his mission in China:

Secretary Snow will then travel to Beijing to meet with the Chinese leadership and their top economic officials as well as representatives from the business community and private economists.  Secretary Snow will discuss a broad range of issues important to the country's economic relationship with the United States, including liberalization and reform of the financial sector, trade, and exchange rate issues.

The New York Times reports that "China's economy now is more open to foreign investment than Japan's was then, and multinational companies like Dell and Wal-Mart influence China's low-cost production as big employers and purchasers." While it is true the Chinese economy is much more open than it was, these companies have small market shares and face fierce competition from domestic companies. In PCs, for example, domestic-made PCs account for 56 percent of all Chinese PC purchases. Further, the tarriffs that prevent the use of foreign-manufactured parts in technology products need to be reduced; lowering the subsidies to Chinese exporters (think of it as bonuses for success) is not enough, because other countries need to have the ability to provide components to Chinese manufacturers on an even footing.

While the administration is at it, it should pay attention to the fact that China increased its educational spending by 24 percent last year. Twenty-four percent.