SMART Letter
#37
PC FORUM, MEATSPACE OF CYBERSPACE
April 12, 2000
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SMART Letter #37 - April 12, 2000
Copyright 2000 by David S. Isenberg
isen.com -- "keeping the edge sharp"
isen@isen.com -- http://isen.com/ -- 1-888-isen-com
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CONTENTS
> PC Forum -- The Meatspace of Cyberspace
> Smart Remarks from SMART People
"RantMan" on an impending wreck at Global Crossing
John Kawakami on the Independent Media Center
Barbara Esbin, a dissenting opinion on Open Access
> Conferences on my Calendar, Copyright Notice, Administrivia
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PC FORUM 2000 -- THE MEATSPACE OF CYBERSPACE
by David S. Isenberg
The people who move and shake cyberspace meet at PC Forum.
This persistent community is convened by Esther Dyson, a big-
science brat like me with science-brat sensibilities about
what the big questions are, and science-brat impudence to ask
them. It's also a well-oiled machine, a superb logistics job
executed with a sense of mission by the talented people that
Esther has gathered into EDventure. The event is best
described in superlatives.
TeraBeam's PC Forum launch made it intensely personal for me
this year. I have never launched a product, at PC Forum or
anywhere else. I have been advising TeraBeam for several
months, so as wonderful as PC Forum might have been, the rest
of the show was decidedly secondary.
TeraBeam has developed point-to-multipoint gigabit laser
technology and intends to offer broadband last-mile service.
Laser communications is completely unregulated and unlicensed
-- this, by itself makes TeraBeam disruptive to the 18, 24, 28
& 38 GHz technologies. It doesn't have to pay kilobucks per
pop in an FCC auction. It just sets up its equipment and
transmits. I generally don't follow stock prices, but the
spelling of the symbols to sell (or short) should be obvious
to the skilled practitioner.
Despite TeraBeam's rocket-science (well, satellite-science)
development efforts, it has maintained super-stealth mode for
some three years. The founder, Greg Amadon, knows his stuff --
he did two other little-bang startups, and he's learned the
pitfalls. In the months I've worked with Greg, he's forbidden
me to breathe the TeraBeam name, say the word "laser" or even
tell people that this new company I worked with was located in
Seattle. As far as I know, he never discussed it with anybody,
even venture capitalists, without putting them under a Non-
Disclosure Agreement. I think that Greg was one of the first
people to realize that the start-up scene was shifting from a
VC's market to an entrepreneur's market.
Last week TeraBeam came out of the garage to a three-gun
salute. Not only did TeraBeam debut at PC Forum, but George
Gilder devoted the March issue of Gilder Technology Report to
TeraBeam (TeraBeam Era) and TeraBeam wooed Dan Hesse away from
AT&T Wireless, where Hesse left a reported $50 million in
options on the table. (I can claim a small role in each of
these.) I was the only non-TeraBeam employee at its off-site
PC Forum success celebration -- that event ranks right up
there with losing my virginity, making landfall on the Maine
coast, getting my Ph.D., getting married, and flying my first
solo in an airplane.
So, y'know, *what* PC Forum?
. . . Actually, it was pretty good.
My personal favorite new thing (after TeraBeam) was SpotLife's
"Point, Click, Broadcast" service. SpotLife makes it easy for
every Joe and Jill PC User to become a home TV station. You
can get the SpotLife broadcast client software free with a
Logitech eyeball camera. Viewers can catch Spot-casts on their
Real Player.
It's about ease-of-use. The home-broadcaster signs up for a
persistent URL on SpotLife's website (e.g.
spotlife.com/users/~isen) where their broadcasts will appear.
Then he or she can put a hot link on their own website that
says, e.g. "Isenberg debates C. Mike Armstrong HERE 2PM
Friday." When there is no Spot-cast, the user's Spotlife
website displays a user-made banner announcing the next
broadcast time, pointing to the user's website, or whatever.
The business model is cool -- the first 25 spectators are
free, #26 goes into a queue unless you buy premium service,
which is very reasonably priced for, say, 26-50. I can't wait
to try it. If it is as simple as it looks, it will set a high
water mark for simplicity that other apps would do well to
emulate. SpotLife service begins in April.
In the main hall of PC Forum, the sessions were never boring.
As usual, there was a token Perfesser and a Hollywood icon.
Whoopie Goldberg held the Hollywood slot. Whew! Does she get
it! She's smart and articulate and witty and diplomatic (but
no bullshit!). She could be the CEO of a big company; she is
as inspiring a leader as I have experienced. She's testimony
to the saw that if you've got black skin you have to be 10
times as good to make it. Did I say 10? It's an underestimate;
she's GOOD.
First Whoopie made us all feel good about who we were. Then
she made us feel great about how we're changing the world.
Then she flattered us about how all our money hasn't changed
who we are. Then she slipped in a little reminder about the
other 99% of people who are less fortunate than we are. (Did I
say 99? That's an underestimate.) Then she made us laugh. Then
she slammed Hollywood. Then she slipped in another little tiny
reminder about taking care of our employees should our company
need to downsize. Then she marveled at the technology. (The
TeraBeam team told me that Whoopie said, "I want one!" when
she saw TeraBeam. She wanted to make her website *fast* for
the Oscars.)
Then she talked about intellectual capital. Now I am not
exactly sure if Whoopie used the words "Intellectual Capital"
or not. The concept is best represented in sports (well,
"intellectual" isn't the right word, maybe it is human
capital, or talent capital . . . if "capital" is the right
word) and in entertainment. In these endeavors, there is only
one Jordan, only one Mantle, only one Brando, only one Fonda
(whoops, ahem, only one Henry Fonda).
Whoopie explained how, "Denzel wants to make a movie, Danny
Glover wants to make a movie, Winnona Ryder wants to make a
movie." Whoopie wants to make a movie too. But they can't
under the Hollywood system -- the studio-quo has type-molded
and type-cast these people. A talent is a terrible thing.
The solution: Cut out the middleman. Go right to the people
with money and ask them for $2.5 million to make a movie.
Whoopie did this in real time, right from the podium. Probably
700 people in the room could have written a check on that
amount then and there. Do you believe Whoopie could make a
great movie? I do. But I don't think it would make money under
the current distribution system -- however, wait 'til the
Internet becomes good enough for HDTV over IP! Go Whoopie!
This idea that an artist could find money without a studio
intermediary -- and find an audience without a studio
intermediary -- should threaten Hollywood. But Richard
Bressler, the CEO of Time Warner New Media and a key AOL
merger honcho, either was in deep denial or just doesn't get
it. Despite Esther Dyson's probing questions, he didn't seem
to notice that a musician doesn't need a big contract with a
distribution dinosaur anymore. Where music is today, video
entertainment will be tomorrow. And music is just getting
started.
[By the way, in Asia last month I saw something that promises
to separate music from its physical package (and the atom-
mongers of the recording industry) even more. The Creative
Labs Nomad IV is a music appliance a bit bigger than a
Discman. It can hold about 150 hours of MP3 music -- like
maybe a year's worth of listening -- on its 6-gig disk drive.
It comes with PC software to rip, encode and download audio
CDs. There are other similar products, probably cheaper, maybe
more open, coming from Korea, too. Let's see the music
industry put the air back in *this* balloon.]
Lawrence Lessig held PC Forum's Perfesser slot this year. He's
the former Special Master in the Microsoft anti-trust trial.
Today his chief concern is AT&T's pending monopoly of the
broadband Internet. Lessig, giving credit where due, cited the
"end-to-end architecture" concept first articulated in 1981 by
Jerome Saltzer, David P. Reed, and David Clark, as the key to
the Internet boom. When end-to-end is embodied in the code,
the code itself assumes the force of law. Here, I think he
means natural law, as in "186,000 miles per second: not just a
good idea, its the law!"
Without this built-in end-to-end principle, Lessig points out
the Internet would be just another piece of infrastructure.
The Phone Company holds such "Soviet-style" control over its
network, says Lessig, that "any rational innovator would go
elsewhere. (The end-to-end concept preceded the Stupid
Network by some 16 years; David Reed, one of its co-authors,
has been a SMART Person since SMART Letter #1.)
Then Lessig started using the "S" word. "The Internet is
*Stupid*," he said. "The intelligence is at the edge." He said
it again and again -- "Stupid . . . Stupid . . . Stupid . . ."
I was beaming. Somebody leaned over and patted me on the back.
That was a Harvard law professor up there using my word! [If
you haven't read my essay "Rise of the Stupid Network", you
need to get Stupid at http://isen.com/stupid.html. It's bad!]
The Stupid Network theme popped up again. George Bell (CEO
Excite@Home) tried to make the case for a network that bundled
content and transport. By the end of his panel the other
panelists had pushed Bell into the tiniest little corner --
the best he could say was that the content'n'conduit model is
"OK for right now". (But is Excite@Home making money right
now? Nobody asked.)
"Coupling business and path is a great business if you can
hold onto it," said panelist Danny Hillis (who just turned in
his mouse ears). "In the end [Excite@Home] will lose because
the Internet has this biological vitality." Even George
Conrades (CEO Akamai) explained that Akamai's routing and
caching magic works from the edge. [Akamai's potential to
addict the net to proprietary routing scares me, though.]
Jim Crowe (CEO Level3) jumped in. "When technology moves this
fast, you can't depend on centralized planning," he said.
"It's easier to bullshit a congressman than it is to bullshit
the marketplace," Hillis agreed.
Somebody (Hillis?) said, "Nobody goes to a certain movie
because they're loyal to the theatre owner." It's the best
single-sentence summary of the content-conduit issue I've
heard.
OK. Time to stop. But I fear that I did not do PC Forum
justice. There were other great products, panels, people.
Larry Tessler raved about the web-based office suite,
ThinkFree -- I missed it. Dave Winer and Tim O'Reilly ran a
session on the screwed up, anti-innovative patent situation --
missed it too, but had a delightful cab ride to the airport
with Winer. Marjorie Scardino, CEO Pearson Group) was
impressive, but her view of education as a top-down, teacher-
to-student, fact-absorption process just doesn't jibe with the
facts (as I religiously believe them) about learning around
the water-cooler, about faith in the student being the
teacher's most valuable teaching act, etc. I enjoyed seeing
Kevin O'Connor, CEO DoubleClick, squirm and grimace as he
publicly took his medicine on the privacy panel. The "my next
career is a philanthropist" panel, aka "now that I've learned
how to make all this money, you mean I have to learn how to
give it all away?" panel, was, in my case, strictly of
academic interest. Then there were the great breakfasts,
dinners and poolside chats, the old friends, the chance
meetings, and the new relationships portending potential
partnership.
Oh, I have to mention that Daphne Kis, Esther Dyson's
conference maven, booked a couple of great bands that struck
exactly the right balance between conversation-facilitating
background ambiance and truly tasty music. And the food was
uniformly sensational! The PC Forum gang has their
infrastructure act together! My only complaint: they ran out
of softshell crabs before I made it back for seconds. Boo hoo.
Kevin Werbach once remarked that Esther Dyson had a dirty
little secret; paper newsletters still work. Clearly she has a
second secret -- there's still no cyberspace like meat-space.
---
[An earlier version of these PC Forum notes appeared on the
Metamarkets.com discussion board. I serve on the Metamarkets
Think Tank with Nicholas Negroponte, Peter Sprague, Nolan
Bushnell and Reuven Brenner. In March, the performance of
OpenFund.com, Metamarkets' first mutual fund, really stank.
Past performance is no indication of future results.]
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Smart Remarks from SMART People
From "RantMan":
Is Leo Hindery going to ruin Global Crossing, the
coolest international telco alive (and one of my
favorite investments)? "I don't want to be anyone's
dumb pipes," says Hindery in an article in The
Standard (3/27/00). "If all you do is racks and servers,
that's dumb. What we're doing is melding the network
and the content."
Oh, please! Leo's going to take the company that had a
business plan based on almost unlimited bandwidth, the
first real 21st century global telco, and turn it
into... a cable company??? Will Global Crossing now
change to do what a cable company does, i.e., control
access to content that is bought at too high a price,
limit people's bandwidth, and stifle the growth of
connectivity?
Watch. First the Global Crossing corporate
megacustomers will say "Thanks but no thanks for the
cool content, we'll just buy a mess of bandwidth,"
Then Leo will say, "We're selling the bandwidth too
cheap. Let's jack the cost way up and then bundle the
content with it, and discount the cost for people who
buy the bundle." Sound familiar? Sound depressing?
Next, we'll hear how he's going to be an ASP / E-
commerce baron, and put a portal at the end of each
fiber that customers have to go through to get an open
channel. Ugh.
Oh, well, looks like the revolution will be postponed
a bit, while we wait for Leo's "just doesn't get it"
content-is-king generation to retire. How did it come
to this? Frankly, his reputation is, shall we say,
somewhat over-burnished. When TCI tried to become a
telco, he rescued it by bringing it back to its cable
TV roots. There's no evidence that he understands any
business other than cable. His "financial magician"
part also doesn't ring true, as many insiders know the
real financial genius at TCI was Malone.
Message to Gary Winnick: You've hired a hammer. Guess
what he thinks all your problems look like. Please
smarten up before the shareholders get nailed.
---
From John Kawakami <johnk@cyberjava.com>:
I recently started working with a ragtag group
called the Independent Media Center (IMC)
http://www.indymedia.org/. This summer, during the
Democratic National Convention in Los Angeles, the
IMC will run a network of LANs connecting video and
audio workstations, maybe a small studio, and a web
server with a free publishing platform.
The IMC has two goals:
Goal #1 is to generate an alternative view of the
convention by covering demonstrations, doing
interviews with knowledgeable (but non-official)
sources, and providing independent commentary to
give a perspective that is decidedly different from
the "Official Story" of the mainstream media.
Goal #2 is to disseminate video production know-how
and experience to people who don't have it. The
software that the IMC is writing could become a
useful tool for small-group media publishing. I'm
hoping to work on that part of the project myself.
The projected budget is around $50k, and the money
hunt has started. If you know of any sympathetic
pocketbooks that would sign over a check with no
strings attached, please send them our way.
---
From Barbara Esbin, <besbin@dlalaw.com> formerly with
the FCC Cable Bureau, now an attorney with Dow, Lohnes
& Albertson, Washington, DC:
I found your remarks about the networks we ought to
have, but don't (in SMART Letter #35), provocative.
I must respond to a few points . . .
You appear to be advocating common carrier
regulation for cable in the near term. I disagree
that the automatic corollary to two-way interactive
cable service should be the imposition of mandated
interconnection, unbundling and resale . . .
Regulation is a poor substitute for competition as a
means of bringing the best services at the best
prices to consumers. (Which really is the point,
isn't it?)
As to Canada, which you describe as 'the scene of a
vibrant, competitive broadband revolution,' I think
it is not quite 'vibrant' yet. When last I checked,
only one small cable system was providing access to
more than one ISP . . . I think the jury is still
out on whether that highly regulatory approach will
bear fruit.
I also emphatically do not believe, as you imply,
that the current cable model of exclusive
arrangements with ISPs does any violence to the
wide-open nature of Internet content because, at the
end of the day, the 'creative kids, . . . ' etc. can
still put their stuff on the Internet, and be freely
accessed by people using cable modems.
[This is a key place where Barbara and I disagree. If, as the
AT&T letter of 12/6/99 says, factors like " . . . speed,
system usage, caching services . . . " are governed by
"private commercial arrangements," then the creative kid and
Disney are the two parties that must fight it out in the
market. And you know who will lose. Disney video content
will be cached at the head end or given its own private OC-
192, while the kid's videos will need to be sucked through
some tiny straw-like pipe. Maybe this is "free access", but
we'll be sucking real hard to get it. -- David I]
[Barbara continues . . . ]
"I remain steady in my belief that the way you get to
'multi-provider, multi-access' broadband is not
through regulating the one technology that appears
to have energized all the others -- cable modem
service -- and has particularly energized the ILECs
(to deploy DSL services) -- but rather, let them all
fight it out in the market.
"This point was reinforced by Supreme Court Justice
Breyer, who described the costs of sharing unbundled
network elements in terms of diminished incentives
to invest in and maintain facilities, and to do
research and development.
"Breyer wrote, 'Increased sharing by itself does not
automatically mean increased competition. It is in
the unshared, not in the shared, portions of the
enterprise that meaningful competition would likely
emerge. Rules that force firms to share every
resource or element of a business would create, not
competition, but pervasive regulation, for the
regulators, not the marketplace, would set the
relevant terms.'
"Please ponder this side of the debate . . ."
[One part of Barbara's argument can be empirically tested --
is private investment in broadband infrastructure (per capita,
or as a percentage of the GNP, or by any other fair metric)
higher in the U.S. than it is in Canada, Sweden and other
"highly regulated" countries? Anybody?
I have other deep disagreements with Barbara, but I am glad
that she took the time and effort to write her dissenting
opinion so articulately and send it to us. The outcome of
this debate will shape the future of the Internet, so it is
important to understand all sides. The SMART Letter is far
from done with this topic! What's your opinion? -- David I]
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CONFERENCES ON MY CALENDAR
May 7-12, 2000. Birmingham UK. World Telecommunications
Congress. I am an invited speaker for the session entitled,
"What's your network IQ?" Answer: Too high. For info, see
http://www.wtc2000.org/info.htm
May 23-26, 2000. Laguna Niguel CA. VORTEX. It looks like
I'll be co-kibitzing the VC panel with Bob Metcalfe, then
talking about something (tbd) for a few minutes after that.
For more info, see http://vortex2000.com/
May 27, 2000. San Diego CA. Porter Stansberry's Pirate
Investor Conference. Avast me hearties! Stansberry's a
bucko tar who can sail to windward. Don Luskin (CEO
MetaMarkets) will be aboard too! Sign the log at
(www.pirateinvestor.com), or call
800-433-1528. Pre-registration $99, or register
at the gangplank for $149.
June 7-10, 2000. Toronto ON. TED CITY. My only role here is
as a paying member of the audience, but I think that Richard
Saul Wurman does a real job with his TED conferences -- every
one I have been to has had deep lasting impact.
http://www.ted.com/
September 13-15, 2000. Lake Tahoe CA. TELECOSM. Featuring
George Gilder, Clayton Christensen, yours truly, and a cast of
geniuses, troublemakers, and people who got rich by listening
to George. This thing sells out, folks -- a word to the SMART.
http://www.forbes.com/conf/SSL/Telecosm2000/register.htm
September 22-24, 2000. Woods Hole MA. An equinoctial weekend
of active questioning, big-hook fishing and collegial thinking
for SMART People here beside the rising tide. Details soon.
Mark your calendars now.
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provided that the two lines below are reproduced with it:
Copyright 2000 by David S. Isenberg
isen@isen.com -- http://isen.com/ -- 1-888-isen-com
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