--Original Message-----
> > From: Marc Canter [mailto:marc@broadbandmechanics.com]
> > Sent: Sunday, October 13, 2002 11:23 PM
> > To: Mitch Ratcliffe
> > Subject: RE: Radio UserLand: Mail from Marc Canter
> >
> > >> I actually think it'll come down to bandwidth
> > > > auctioning...where the end-user chooses how fast they want
> something - or
> > > > how soon something will get sent.
> > >

[Mitch Ratcliffe]
> > >
> > > Auctioning: Too complex and it fragments the market for access to the
> > > audience, lowering the ability for the creator of the content sell
> > > coherent ad/sponsor/whatever packages that support content creation.
> >
> > No - perhaps you're not grokking what I was insinuating. This sort of
> > auctioning would be completely transparent.

[Mitch Ratcliffe]
I don't believe it will be transparent. Most companies that own
> bandwidth or the assets that deliver bandwidth can't get out of the
> bits' way and let the user experience rule. They always have to insert
> their brand into the process, and in an auctioning environment, they
> will make even more of the value-added services. Just my opinion. Could
> be wrong, but haven't seen anything yet to convince me I am wrong.

I agree that's the state of things. But remember - these folks STILL don't grok that it's about the end-user's experiences that matter. They still think it's about pushing proprietary, copyrighted family jewels down the pipe into passive, potato couch homes - via Pay-per-View rates.

But that's starting to change - as desperate times force change - whether they like it or not.  Look at the recent AOL T-W - AT&T Comcast deal.  AOL T-W has finally realized that it's about the 'content' (doh! as Homer would say.)  So now they're willing to have AT&T Comcast continue to 'own' the customer (as if that was EVER really the case) and handle the billing.  AOL T-W pays them $38 a head per month and it's up to them to hustle anything additional they can out of the customer.

So AOL's OLD model - was as you say

the world is today' - "own the customer and brand the bandwidth access."  The current scenario leads them towards what I was saying, which is "content folks do their thing, customers do their thing, bandwidth providers clamor over the traffic and offer discount rates to whoever is willing to pay CASH for it.)

>
> Then again, I haven't made soup from any dead friends recently, either,
> so my grokking capacity may be diminished. ;^)
>
> >
> > a)  Video will never go out over the free Internet.
> [Mitch Ratcliffe]
> We disagree here. You'll see why in the next comment.
>
> >
> > b) The only way Telcos will EVER dig themselves out of the hole - that
> > they've dug themselves into - (besides banks just writing off the
> > debt) is to come up with some way to CHARGE customers directly for bandwidth.
>
> > Now they need to get the rates and zeros right - but it's entirely  possible -
> > that a series of say 10 suppliers would participate in real-time
> > electronic auctioning.
[Mitch Ratcliffe]
I've spent some time in investment banking during the past couple years
> -- got the securities licenses and the whole deal. Why? I'm still not
> sure, but it was INTERESTING. What I learned was this: There is no hole,
> it's an illusion created by bankers and brokers. There is, in fact, a
> massive financial cavity, but it fills up with suckers' money -- the
> suckers being the public whose shares are devalued as the bankers work
> their demon magic on companies to "erase" or "restructure" debt.

Right on brother - I certainly agree with you there!
>
> That said, I do think there is an intelligent prioritization system that
> can happen for traffic, but this will only happen as a matter of course
> in corporate application/communications situations. In those
> environments, your auction scenario is totally viable. And, to some
> degree, the results of that auctioning process will influence pricing,
> but only to a limited degree from the consumer's perspective. No one is
> going to be comfortable paying $4.95 for a movie one day, because they
> ordered in advance, and $9.95 because they decided to watch on the spur
> of the moment. Most purchases are impulse purchases -- grocery shoppers,
> even those really organized ones with lists, still buy 70% of the items
> they walk of the store with on impulse. So, the content provider might
> price all movies somewhere between those two prices and hope they can
> manage their bandwidth auctions effectively.

That's why I made a point about decoupling the transport - from the services.  It'll become completely natural for customers to pay more for better delivery. That's the way FEDEX/DHL and the Post Office compete.  And have you paid late fees at Blockbuster recently? I bet half their revenues come from that bullshit!  So customers have been trained to accept new pricing models, with new kinds of services.

Cingular recently instituted a 'rollover' minutes plan, letting you use 'unused' minutes (as if there were such a thing) in the next month's billing period. You know why?  'CAUSE THEIR FUCKING SERVICE SUCKS SO BAD - we COULDN'T use up all our minutes!  I was making weekly calls complaining about bad service, and they refused to do anything about it.  They knew full well that they were over-subscribed and that their system couldn't handle the traffic.

So instead of (or while they were) fixing it - they've now instituted this 'rollover' plan scam.  Anyone who is a Cingular customer right now - knows that this is all prompted by the fact - that 'unused' minutes are a direct phenomena of not being able to use your phone - at all.  These sorts of 'billing plans' are just decoys for what's really going on.  The same thing will happen with bandwidth.

I also agree that it'll start in enterprise/corporate arena - as most technological advances do.  That's already going on right now - as Sprint, Level 3 and AT&T are scrambling to scoop up as many MCI/Worldcomm accounts as they can. They're doing that with LOWER rates.  But I STILL think it'll come into fruition with end-user customers.
>
> Then, however, their prices have to be more convenient than going to the
> video store -- where you get the DVD for a week for $3.50 now. And,
> until movie studios and music companies decide it is okay for people to
> keep copies of what they pay to view, there is no way the online
> provider will beat the local video store if it has to price for the
> typical ad hoc viewer. That's a major choke point in the development of
> this industry.

Agreed.  But my vision of this 'auctioning system' is AFTER that's all been worked out.  They have to embrace the fact that a big chunk of their future revenues are gonna come from on-line, as they do with videotapes and DVDs now.  Remember where Valenti was coming from in '83?  Well that's where he's at today with digital delivery.  Once they come around, and grok it - all these pricing issues will get worked out.
>
> So, bandwidth will be a variable cost and someone will make a killing
> arbitraging the variance. That creates a California power "crisis"
> opportunity that could kill any goose laying golden eggs. If your tools
> for SpeedEra and Akamai are creating accountability and audit trails,
> that'll relieve the potential for gaming the system, but based on my
> experience with venture capitalists and investment banking, there is
> always someone dedicated to finding an angle.

Again - think of this transitionary state - this constant world of change - heading towards an end-game.

All the hustling, scamming and 'arbitraging' - is a result of cracks in a system and technology moving faster than the economics.  I believe that's what derivatives is all about - as well.  There will always be people who wake up in the morning - dedicated to making money.  But they're the scum in the evolutionary ladder.

But AFTER the Warren Buffets have bottom fished, AFTER the huge killings have been made, AFTER the cat's out of the bag (on bandwidth costs and access) - well then THIS is where we'll end up.

That's my curse.  I jump over all the bullshit - real world scamming imperfections - and look at how it SHOULD be - how it will EVENTUALLY settle into.  If you would have asked me in '88 "would multimedia be relegated to videogames, animation buttons and flashy ads" - I would have screamed and yelled.  But alas - that's where we're at today.  But that's not to say that - in the future - there won't be more embedded, interactive multimedia or incredibly intuitive educational materials - it's just that there was too much money to be made in videogames - and all the VC's JUST funded that.

It's greed that corrupts and gives us the world we're in today. I caught an interesting show on TV last night on SAS - which made it clear - going public, answering to Wall St. and listening to board short term, 'profit oriented thinking - is what fucks up corporations today.  That HAS to change!
>
> This comes back to video and the free Internet. My big bone to pick with
> the infrastructure is that it is still thought of as a delivery
> mechanism and not a two-way street. We would never have built a system
> of roads that only let us receive goods but did not let us go to work.

Agreed.
> Until up and downstream capacity are synchronous, most homes will not
> adopt broadband (that is, the fabled ubiquitous penetration will not
> happen), because people need to be able to profit from the bandwidth as
> well as just get stuff over it. This will happen -- the attitude that
> one deserves a synchronous connection -- because people like us will
> talk about how great it is to work wherever we want whenever we want.
> It'll get political and newspapers will write indignant editorials about
> the inequities of the infrastructure.

Here, here!  Right on!
>
> But there is a good thing in this, and that is that once I get
> additional flexibility in my work because I can stay home one day, two
> days or more a week (reducing my employer's real estate and support
> costs), I'll be happy to pay the extra freight for broadband; not only
> that, I'll be able to expense some or all of it, because it'll be a perc
> from my employer, who is saving money elsewhere on the P&L because I
> chose to work at home sometimes.

We'll all look back and laugh that people resisted paying $40 a month - for 'mid-band'.  But you're right - only until it's true BROADBAND and video-telephony (and all it's benefits) come into fruition - can we or anybody else justify (for individuals) monthly costs of $200-$300.  And YES - anything that's work related - should be expensed and paid for - that way.
>
> This increased willingness to pay for broadband will increase total
> revenues, reducing the scarcity of bandwidth that would drive arbitrage.
> Auctioning produces less variable costs in this environment and, as a
> result, everyone is happy because companies and content providers have
> the freedom you point out, but without the increased potential for
> gaming of the system. Auctioning will increase efficiency without
> attracting the piranha.

Yes - NOW you're heading in the right direction.  Think that AFTER Warren Buffet (and the other's who are picking up the Telcos for pennies on the dollar) have sold you your expensive bandwidth - then where do we go - from there? 

Supply and demand will keep the pressure up (as long as US GUYS can show them what to do WITH the bandwidth!)  That'll be true for - up to about 30-40% of the market today. But for it to really BREAKTHROUGH - there needs to be direct ways for bandwidth to get paid for....... which whatever technique is reached - will solve the Telco problem, create new kinds of integrated services and corporate entities and HOPEFULLY leave some room for 'home brew' content and services - as well!

> > c) Customer places a videophone call, buys a movie, wants on-line video
> > help, does some video shopping - with a sales asst, makes a video doctors
> > call - at which point a dialog box comes up asking:
> >
> > "When would you like this ________ to happen?"
> >
> >     - "By tomorrow morning?"
> >     - "By midnight?"
> >     - "Within 2 hours?"
> >     - "Within 1 hour?"
> >     - "Real-time?"
> >
> > prices would be attached to each of these options - scaling up from
> > something like $.25 to $5.00 (for the transport) - the content/services
> > would be priced separately. The model is FEDEX/DHL/Post office pricing.
> > Everyone is used to having transport charges separate from the stuff
> > itself - so why wouldn't that be the natural way that broadband digital
> > distribution works?
> >
> > And on the technical side - it's all completely transparent and happens
> > automatically - within :05 seconds.  Anybody wishing to bid on the traffic
> > - can submit a bid.  Then all participants in THAT auction, can counter
> > offer, routing the 'packets' through whatever series of connections, backbone
> > they have access and control of.......
> >
> > This is the sort of UI experiences we'll be building and we'll make sure
> > that folks like SpeedEra or Akamai have intelligent routing control at
> > each major node of the web - with connections to the big 10 backbone
> > players.
> >
> > And as far as it 'getting in the way' or fragmenting anything - right now
> > - all TCP/IP packets go out and nobody cares which carrier carries their
> > data. This system has to work that way.  Totally transparent - yet actually
> > connecting suppliers to customers - in an efficient JIT properly scaled
> > scenario.
> [Mitch Ratcliffe]
> Like I said, big companies hate being transparent. They'll never be
> happy if their ads say things like "AT&T: Some of the bandwidth you use
> comes from us." They always want to be the full-service, one-stop,
> don't-go-to-the-other-guys provider. They are big dumb and full of
> themselves.

There's no better way of saying what wrong with the world today.  So I guess the question is: "when customers dial-into the 'new AOL' via their AT&T Comcast cable modem connections - will they see:   

    - AOL

    - AT&T Comcast

    - both of them or something NEW - just to REALLY confuse the poor customer?

Every content provider - advertiser - service provider - would have total
> > control on what they do - but NOW business models and efficient carriage
> > is part of the equation.
> >
> > >
> > > Time-shifting alone is going to shake the broadcast business like a 10.0
> > > earthquake in the Marina District. A great short right now would be
> > > Clear Channel.
> >
> > Those pigs need to get anti-trusted. They're personally ruined the  music
> > business.  Anyway to bust that trust is fine with me.
> [Mitch Ratcliffe]
> Nobody can stop this change. It's going to be total. It's also
> going to take a lot of meetings and cajoling. Hey, when I was with
> SoftBank Expos, we used to worry about competing with the 'old school' way of doing things.

At
> the same time, it's all just about business. (I was
> in the room with Son decided to buy Comdex -- I was also the only one to
> say he was crazy to his face, about this decision in that meeting.)
>
> >
> >
> > >
> > > >
> > > > >
> > > > > Seriously interested in the Flash platform, but don't want to be in the
> > > > > hand-holding business with clients. Hence, my comments on the blog
> > > > > about needing tools to make the business user an effective arranger of the
> > > > > resources at hand (some of which can be very high-value productions).
> > > >
> > > > Unfortunately I think you're gonna find much of the Flash designed stuff
> > > > to be pretty spongy and slow - unless you're on a 2 Gighz machine.
> > > [Mitch Ratcliffe]
> > > Agreed, but the nav and staging abilities are more advanced than
> > > anything else right now. SMIL never works like you want it to or like it
> > > appears to when you code it. If Jeremy and his crew focus on two things:
> > > optimizing performance and making the pre-production tools useful,
> > > they'll make a lot of progress.
> >
> > Agreed SMIL was still born - never offered anything - except a way for Real
> > to pretend like they were standards bearers.  300M players is a nice
> > installed base to have.  I've recently discovered some folks at a company
> > called Laszlo Systems. I'll let yah know - once I know more about them.
> >
> [Mitch Ratcliffe]
> Do let me know.
> >
> >
> > >
> > > I do want to know more about what your stuff is doing -- sounds like,
> > > from the postings and the "conversations" it is the kind of thing we
> > > could make sing, so to speak.
> >
> > :-)
> >
> > Soon......
> >
> >

As long as you sold high - everything would be fine - but I'm afraid
> > > only the Y2K conspirators and those who got lucky - actually made off with
> > > > anything.  Since we had implosions in '85, '89 and '92 - why would you
> > > > think that the world wouldn't implode even FURTHER this time around?
> > >
> > > > You're a smart guy - right?
> > > >
> > > > :-)
[Mitch Ratcliffe]
> > > Read a few postings below the one you linked to and you'll see I think
> > > we're only part of the way to the bottom. That said, there are ways to
> > > thrive if you recognize that. Entertainment is a huge winner in
> > > downturns, because people pay to fill the time they used to fill buying
> > > things, driving boats, and so on.
> > >
> > > As the Y2K expert that hung on the crucifix as ZD Net's sacrificial
> > > Pollyanna, I actually think the Y2K guys didn't benefit. Most bailed too
> > > early to get any benefit and compounded their early exit by spending
> > > time, money and energy on picking the right generator, the right rice
> > > storage bin, scaring the shit out of their wives and kids.
> > >
> > > But, basically, I think anyone who might be thinking that 2003 is going
> > > to be a good year is headed for a terrible reaming. So, it's time to run
> > > very tight ships, keep fixed costs to an absolute minimum, and to be
> > > really aggressive when negotiating when you are going to spend money.
> >
> > :-)  Agreed!
> >
> >
> > Perhaps (again my fault) you missed my insinuation to the Y2K
> > conspirators.
> >
> > Here's my conspiracy theory:
> >     - build up enough panic and fear that EVERYONE buys new hardware and software
> >     - this also brings all sorts of COBOL programmers out of retirement
> >     - which results in all sorts of extra cash, 40% growth and an embarrassing
> > level of profits
> >     - those funds are then handed to VC's or new funds are started - and/or
> > used for 'in-house' funds
> >     - those funds - of course - need fresh faced kids who will actually listen
> > to their VC's - like they're Gods
> >     - and these folks do stupid things like:
> >          - create companies who's sole purpose is to go public
> >          - create products which are really only features
> >          - and give these features away - assuming that click through
> > advertising will - somehow - I'm not sure what - create a profitable company
> >          - did I mention Henry Miller chairs, triple the rate real estate, over
> > paying young punks, and complete idiocy
> >          - hire huge sales forces with nothing to sell
> >
> > IOW - they drank the Kool-Aid - and everything goes to shit when:
> >     - on Jan. 1st, 2000 everyone wakes up and says "Gee if THAT was a
> > scam, maybe this whole dam thing is a scam?"
> >     - so everyone on the inside starts systematically selling - the first 1/4
> > of 2000.
> >
> > Does this sound strange?
> >
> > I think that's what happened.
> >
> >
[Mitch Ratcliffe]
> In large part, I agree. But I predicted the crash (without taking my own
> advice) in a column in Spring 1999 -- my thesis, which turned out to be
> the trigger that unraveled all the scams you list, was that the Y2K
> build-up, which artificially accelerated hardware and software sales,
> created the slowdown in sales in late 1999 and early 2000 (after the
> Y2K-readiness buying binge ended) that put the pin in the bubble.
> Without steady growth, the whole Ponzi scheme came unwound.
>
> It wasn't, however, all scam. It was largely *stupidity* on the tech
> industry's part, because they drank the Kool-Aid and thought the boom
> based on Y2K sales would continue. Instead, tech ate its next two
> generations of upgrade cycles, like cannibals dining on their own young,
> in 1998 and early '99 and then wondered why there was no next generation
> upgrading to step up and keep the growth going. IT budgets had been
> adjusted back to reality and almost everyone was sitting on capital
> expenses that had to be amortized for between three and five years
> before they'd be able to upgrade again.

WOW!  Cool!  I finally met someone who not only GROKS my conspiracy theory - but who's added his own 2 cents to it!

I'm sure it wasn't a conscious conspiracy (or at least I hope so) but it sure seems like a coincidence (as Osama's convenient bombing helped give George W. a decent war to hang his hat on.) 
>
> >
> >
> > >
> > > >
> > > >
> > > > >
> > > > > Have seen the XPMCE, but haven't spent enough time with Intel to find out much
> > > > > about their tv-system-on-a-chip, which is what I have heard rumblings
> > > > > about.
> > > >
> > > > http://blogs.it/0100198/2002/09/18.html#a175
> > > >
> > > > We got disclosed on it - hopefully Intel will end up being one of our
> > > > investors.
> > > >
> > > > :-)
> > > [Mitch Ratcliffe]
> > > I'm even more interested in what you've got.
> >
> > :-)
> >
> > Working hard - as we speak..........
> >
> >
> > >
> > > >
> > > >
> > > > >
> > >

Have you seen the new Stinger phones which get their public debut
> > > > > this coming week in London? 128 MB of memory, the size of a Nokia
> > > > > 3500-series but all screen? It's another step toward time-shifting
> > > > > programming like I talk about in the last part of the radio show. But only one step.
> > > >
> > > > I just don't know about any of these new Microsoft technologies.
> > > > They seem incapable of shipping anything in a  timely fashion or without
> > > > huge number of bugs and design flaws. The latest network boxes are an example.  They just sit
> > > > back, put out mediocre products and iterate until they take over a market.
> > > > The industry are such complacent cows to let them do that over and
> > > > over again:
> > > >     - Interactive TV
> > > >     - PDAs
> > > >     - Browsers
> > > >     - Servers
> > > >
> > > > Their recent Content Management System - is JUST shipping supporting XML.
> > > > It's 2002 for christ sakes!  And for the DOJ to let them get away with being a
> > > > convicted monopolist and for all intent and purposes do NOTHING about it -
> > > > is just the final straw.
> > > [Mitch Ratcliffe]
> > > Hey, they win through slow ox-like cleverness, if there is such a thing.
> > > The late-to-the-game, let-the-users-endure-the-bugs approach has worked
> > > so far, and the current DOJ is more likely to bend over and grab its
> > > knees, invite MS to fuck it, and then smile about it during the press
> > > conference.
> >
> > exactly - right on the spot.
> >

Here, here - a second time!
> >
> >
>

> >
Besides, just to take an example from what you've been saying about AOL
> > > recently -- I'm really close to some of Ted L.'s team and for years they
> > > told me they were right to go slow on broadband because it was too
> > > expensive. Now, they're going into it big time, after the cost of
> > > carriage has fallen into a reasonable range. Just like the move from
> > > hourly usage to fixed monthly charges. In retrospect, that has been
> > > pretty smart.
> >
> >
> > God I hope so!
> >
> >
> [Mitch Ratcliffe]
> My intelligence says they are asking the right questions internally. Of
> course, who knows if they'll actually execute on the right answers....

Yes - Miles Gilburne - my original VC and board member of AOL T-W has been trying for years to get us in there to help.  It's not really NIH, as much as corporate culture.  And adding T-W to the mix just multiplies the challenge!

> > >
> > >
> > >
> > > Slow can be good. Slow when you've got $40B in cash, like Microsoft, can
> > > be unstoppable, like a lava flow.

>>>
> >
> > I still think the Feds should fine them something like $20B and get it over
> > with.  Lots of that money was illegally appropriated. That's what they do to
> > drug dealers, why not monopolists?
> >
> [Mitch Ratcliffe]
> See my Social and Political blog today: I suggested exile as an
> appropriate form of punishment for crooked executives. Of course, we
> should seize their assets as they leave the country.
>
> http://www.ratcliffe.com/blog.html/2002/10/13.html/#a135
>
> >
> > >
> > > >
> >
> > > > Needless to say - what we're doing is allot like Longhorn.  And their
> > > > eHome stuff.
> > > >
> > > >> > > [Mitch Ratcliffe]
> > > Well, we're interested in filling the screens of those devices....
> >
> >
> > :-)
> >
> > Think RSS and beyond.  OPML and beyond........
> >
> >
> [Mitch Ratcliffe]
> Did you ever sign up for ON24's Personalcast? I spec'd it, and it
> allowed us to filter more than 28 hours of news productions each day
> (audio and video) and assemble a completely personalized newscast about
> investment news you were interested in, based on company tickers or
> industries or keywords you entered. It was a really primitive kernel,
> given where we are today with RSS, OPML, but it felt like the right
> direction.

My frustration with services like that - were that it didn't appear that these streams of media were being transcribed to text - for decent indexing and attaching meta-data.  So what good was a keyword I'd type in?   I seem to remember ON24 - though it's all a blur right now.  Wasn't there ALSO something called On2?  They had a proprietary codec/streaming method - and we were set up to meet with them.... I remember them complaining about YOUR domain name!

> > > > But we don't necessarily think user experiences should be rectangles
> > > > on the screen.
> > >
> > > [Mitch Ratcliffe]
> > > And we agree....
> >
> > :-)
> >
> [Mitch Ratcliffe]
>
> I think we should be seeing more oval screens, like the view screen on the pilot of the original Star Trek. And ensigns in mini skirts, too.

The kicker about Star Trek and Star Wars and all those sci-fi videophone sequences - is that they're always looking directly INTO the screen.  But we haven't perfected how to get cameras directly in the MIDDLE of our displays - so what we see now are people looking DOWN at the screen, as our cameras today are usually directly ABOVE the display.  Some sort of mirror technology could solve that, but....... it's just another ergonomic challenge ahead of us - in the road to the future.