SMART Letter #52
February 16, 2001

!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*() ------------------------------------------------------------            SMART Letter #52 -- February 16, 2001 Copyright 2001 by David S. Isenberg -- "truth in labeling" -- -- 1-888-isen-com ------------------------------------------------------------ !@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*()!@#$%^&*() CONTENTS > Quote of Note: George Gilder > Accenture? Bullshient! > Quote of Note: Columbia Records' Don Ienner > More on "100 Mbit/s for $100" > Site for Sore Eyes -- > Quote of Note -- Zigurd Mednieks > Quote of Note -- FCC Chairman Mike Powell > The 2001 World Tour > Copyright Notice, Administrivia ------- QUOTE OF NOTE: GEORGE GILDER "The fastest way to spread broadband is to deregulate the local loop and halt the effort to impose the kind of 'open' administered competition in which no one is allowed to win or make any money except the communications bar and the politicians. Yes, that means to free the regional bells and the cable vendors to compete any broadband way they like." George Gilder & Charles Burger in the Gilder Technology Report, January 2001. [Geooorrge!!! Who are these poor repressed Bells going to compete **against**?? Each other? "Freed to compete" they'll buy each other. ILEC senior managers were selected by patrimonial bureaucracy, not business acumen. The "freed" Bells will lead us back to the copper age when cellular costed two bucks a minute, when ISDN took two decades to fail and DSL would be available in your neighborhood -- but only until you tried to order it. Granted, the current system (Telecom Act, FCC, congress, courts, PTT-like local monopolies, and all 50 state PUCs) is a stagnant and polluted environment for innovation. Nevertheless, there has to be a *market* before competition can occur. Maybe you were expecting the "freed" Bells would tune into the Telecosm? Fuggedaboudit! Clayton Christensen (You called him 'the next Peter Drucker', remember?) showed that incumbents never lead the disruption parade. I think you've been listening to your buddies Henry Nicholas (smart engineer with big Bell-shaped customers) and Peter Huber (smart lawyer with big Bell-shaped clients) too much. But if you "listen to the technology," you'll hear deathly quiet in telcoland. If the freed Bells are such repressed dynamos of telecosmic competition, why aren't any of them on your Telecosm list? George? -- David I] ------- ACCENTURE? BULLSHIENT! -- NAME KONSULTANTS IN KORPORATE AMERIKA, by David S. Isenberg Dear ????, I don't know where to begin if I don't know your name. Even when I'm writing to a faceless, bodiless entity on the other side of the Internet, it helps me break writer's block if I can begin with 'Dear Joe' (Sunil, Miko, Prashanta, Jane, . . ..). I may be writing to a bot or a list or a board, but it helps immeasurably to have a name. Furthermore, my name is Isenberg. I get irrational dry puckers when somebody spells my name Isenburg or Eisenberg, even when it is perfectly clear they're writing about me. I identify with my name. David S. Isenberg, that's me. A name is just a label. But if you're going to label me, then spell that sucker right. Back in '78, when bits were a lot scarcer, I needed a unix login. Somebody suggested isen. It stuck. I've been isen on line ever since. Made sense to name my business It was only the second I ever heard of (after Other business names march to a different drummer, but to me it sounds like an amateur trombone. An employee of Avaya, the Lucent PBX spinoff, told me, "I don't know what Avaya means. I think they paid somebody a lot of money to find a word that means nothing in as many languages as possible." Eeeeeyuck!! I like names that mean something. TeleGlobe, Network Engines, Packeteer, LinkSys, SS8, Global Crossing, Worldwide Packets -- these names I can dig. If Lucent's managers had groked their semantic roots, they might have caught the OC-192 wave. But Lucent's naming agency didn't know optics from emetics. They didn't design Lucent to mean anything, and now it doesn't. Accenture is the silliest. You can't even type it right -- it has a little sideways caret right above the 't' that is not represented on anybody's keyboard. Accenture used to be Andersen consulting. I imagine Andersen was a wise, gray- haired Norwegian gent with a pipe and a tweed jacket at a blackboard. He's the kind of guy I might want to ask for advice. But Accenture? Maybe the reason that Accenture is in and Andersen is out is that consultants can't afford to stand for anything. If their client has a billable job, they want it. They'll even spend the client's time and money telling it why outsourcing to consultants is a strategic necessity. The client then outsources its most precious jewels -- often including strategic thinking, operational technology, customer support, marketing information and communication up and down the management hierarchy. Client companies become pathologically codependent drools -- and the consultant loves every dripping dollar. Then client fail, turn to consultant and say, "What we do now?" Consultant say, "What you mean *we*, boss-man?" Consultant ride off to 'help' next client. So here are some names-that-mean-something for consulting firms: Arrogantrix, BillableHours Inc., Bullshient, Embezzalon, Fucturanus, MyopX, Outsorx2us, Stupiture and XpenZV. By the way,, inc. is changing its name to ChainJyrx. At least it means something, Accenture. ------- QUOTE OF NOTE: Don Ienner "Remember all those articles about how the Web was going to free artists from the chains of record companies and allow them to rule their own creative destiny? How many new acts have broken on the Internet so far? I'll tell you how many, zero. Thousands of sites and not a single hit. . . . People on the Internet don't have a clue what goes into marketing and promoting a hit record. They have no idea how hard it is to get people to pay attention." Columbia Records Chairman Don Ienner in the Los Angeles Times, 1/29/01 [In Ienner's world, there's no music but hit music. Pass the bubble gum. -- David I] ------- MORE ON "100 MEGABITS FOR $100 A MONTH" by David S. Isenberg I *never* take red-eye flights, but I made an exception earlier this week to visit Brian Andrew, co-founder of e- xpedient in Orlando, Florida. My sleep pattern is still out of kilter and my eyes are still red but it hurts so good. In SMART Letter #51, I was enthusiastic but skeptical about e- xpedient's claim that it could make money delivering 100 megabit access for $100/mo using fixed-wireless technology. After this week's visit I am more enthusiastic and less skeptical, and I'm hoping that Brian and I can find ways to work together, because he's a rooftop guerilla fighting on the right side of the communications revolution. He's selling honest connectivity, not trying to compete against potential customers by climbing a value-added revenue chain. One of my big concerns in SMART Letter #51 was about the bit budget. Here's the scoop. For $100 a month you get one gigabyte of e-xpedient throughput a month. SMART People like to talk about gigabits per *second* (terabits and petabits too) so a gigabyte a *month* didn't seem like much to me -- at first. But I just looked at my last year of email. (I'm a heavy email user, and I save everything.) I've received about 0.06 gigabytes of email and 0.12 gigabytes of attachments in the last 12 months. Maybe I've done an equivalent amount of email sending and web browsing. Then there's the SMART Letter -- I estimate that I've sent about 0.10 gigabytes of SMART Mail. That'd put me at 50% of e-xpedient's low-tier quota. So my one-man multinational corporation has headroom at e- xpedient's first tier. Not bad. I also saw the e-xpedient self-provisioning demo. You plug in your laptop Ethernet card, set the IP address, plug your RJ-45 into the e-xpedient customer interface unit in the wiring closet and fire up your web browser. Up comes the sign-up page with a simple form, including credit card. Ba-da-bing, your credit card gets hit for $100 and you've got 100 instant, pulsating megabits dancing on your screen. Now, $100 a month is a way-lower barrier than $1000. Last month I got a call from an on-the-ball Cogent salesman who noticed that I was an advisor to a company in a building Cogent was entering. Cogent sells 100-megabit fiber service (with *no* bit budget) for $1000 a month. They wanted to sell to my advisee, an investment group. I dig fat pipes, so I stepped into the breech, but my advisee does dial-up. The advisee asked me, "What would we do with 100 megabits?" In other words, "Why should we spend $1000 a month?" I didn't have a good answer for them. Selling e-xpedient service would've been ten times easier. E-xpedient CEO Brian Andrew has learned from the evolution of the computer industry. For years PCs cost $3000. Every year you got more PC for your $3000, but nobody asked PC owners to spend $10,000. Andrew thinks the same principles apply to connectivity; you can't ask the customer to spend radically more than they're already spending for connectivity. So he charges $100 a month. He's hoping to get 60% to 80% of the customers in each building he enters. I didn't see that take rate in Orlando, but they've only been up a few weeks. My biggest remaining concern with e-xpedient service is how they can provision buildings cost-effectively enough to make money at such low price points. I saw an efficient, centralized provisioning operation in an Orlando warehouse. All the specs for a building -- radio transcievers, wire lengths, cabinets, routers, power supplies, cable ties, mounting bolts -- are reduced to a parts list. The parts are put on a pallet, shrink-wrapped and dropped at the to-be- provisioned building. They call it POP-on-a-pallet. Installation, the e-xpedient folks say, takes five days. I have not seen the numbers, but I remain skeptical on this one. Here's the bottom line: if they build it, will the customers come? We shall see. From what I've seen so far, e-xpedient is a name that actually means something. ------- SITE FOR SORE EYES Picturephone -- if listening is so profitable, then looking and listening must be better. It is so obvious. Why test it in the market? 40 years later the Picturephone is still a flagrant example of soviet-style assumption-laden top-down telco market ignorance. (Oh sorry, George, I meant good clean Bell-headed competition.) Objectively, Picturephone is a leading candidate for the longest product development mistake ever made. Check out "Picturephone: the Billion Dollar Hang Up" at While you're there, check out the sounds of Voder, the world's first voice synthesizer and get the skinny on zero-G sex in space -- David I ------- QUOTE OF NOTE -- Zigurd Mednieks [The Telirati Newsletter is one of the more literate, gliterate, and digerate reads around, but its perpetrator is anything but anti-Microsoft. So when Zigurd criticizes Redmond, it is not light reading. -- David I] "Phrases like 'rights management' and 'trusted systems' are weasel words that . . . are easy to read for what they really mean: You get less rights, we don't trust you, and forget about trusting your computer - we are in control. DRM [Digital Rights Management] technologies are inherently in conflict with security because they enable software to live in your system outside of your control. OK for an appliance you can buy or avoid as you choose, but entirely at odds with the definition of a personal computer, and fundamentally threatening to the value proposition of personal computing. Microsoft has long toiled, since the beginning of development of Windows NT, to build a secure operating system. [Microsoft] will have to convince .NET users that they are secure [when] their computers are constantly chattering over the Internet with other computers . . . Perhaps more importantly, [Microsoft] will have to convince the opinion leaders that are the foundation of the personal computing culture that Microsoft has not abandoned truly personal computing, leaving the fundamental characteristics of personal computing to Linux. [snip] "DRM is going nowhere in [the] open source [community] not because open source enthusiasts are a bunch of pirates. DRM is going nowhere . . . because open source supporters are deeply concerned with system integrity, and DRM is just too dicey to apply to situations where open source review of the soundness of security is an important factor. Zigurd Mednieks in Telerati Newsletter #61, 2/9/01 -- To subscribe to Telirati (it's free) contact ------- QUOTE OF NOTE: Michael Powell "I think there is a Mercedes divide . . . I'd like to have one; I can't afford one. I'm not meaning to be completely flip about this. I think it's an important social issue. But it shouldn't be used to justify the notion of essentially the socialization of the deployment of the infrastructure." FCC Chairman Michael Powell, quoted in the New York Times, February 7, 2001. [This raises an important question: is broadband communications a luxury or a necessity? If Chairman Powell had referred to a "food divide" instead of a Mercedes divide, he'd have conveyed a different message. -- David I] ------- THE ISEN.COM 2001 WORLD TOUR If the world is, indeed, round, I should be able to travel west constantly and return to the same spot I left. I'll test this hypothesis beginning Monday 2/16, returning to the World Headquarters of, inc. on Thursday March 8. Here's the schedule: February 21-25, I'll be in New Zealand helping United Networks (heretofore an electricity and gas company) launch fiber optic services (Feb 22) in Auckland and Wellington. I'm hoping to meet SMART Kiwis on Feb 23-24, tba. If interested, please email, Subject: SMART KIWI. February 25 - March 1, I'll be keynoting APRICOT (Feb 28), the Asia Pacific Regional Internet Conference on Operating Technologies, in Kuala Lumpur, Malaysia. See Happy to meet with SMART people from any continent on Feb 27-28. If you're interested, please email, Subject: SMART APRICOT March 2-4, I'll be in Israel for a family bar mitzvah. I'm hoping to meet with SMART Israelis on the afternoon of March 4 in my brother's Triangle Technologies offices in Ramat Gan. If you're interested, please email, Subject: SMART ISRAELI. March 5-7, I'll be in Europe with a client, unfortunately no time to meet. I'll be doing travel notes -- look for them in SMART Letter #53 and following. (On the other hand, if this SMART Letter is the last one you get, it will be evidence that the world is flat. After all, "round world" is just a hypothesis, and SMART People will remain open to contrary data.) ------- COPYRIGHT NOTICE: Redistribution of this document, or any part of it, is permitted for non-commercial purposes, provided that the two lines below are reproduced with it: Copyright 2001 by David S. Isenberg -- -- 1-888-isen-com ------- [to subscribe to the SMART Letter, please send a brief, PERSONAL statement to (put "SMART" in the Subject field) saying who you are, what you do, maybe who you work for, maybe how you see your work connecting to mine, and why you are interested in joining the SMART List.] [to unsubscribe to the SMART List, send a brief unsubscribe message to] [for past SMART Letters, see] [Policy on reader contributions: Write to me. I won't quote you without your explicitly stated permission. If you're writing to me for inclusion in the SMART Letter, *please* say so. I'll probably edit your writing for brevity and clarity. If you ask for anonymity, you'll get it. ] ** David S. Isenberg, inc. 888-isen-com 908-654-0772 ** -- The brains behind the Stupid Network -- **