Emerging Communications Blog

Towards the end of last month I found myself unexpectedly interviewing Tony Jebara of Columbia University and Sense Networks. It turned out to be something more conversational than an interview; the work of Sense Networks as articulated by Tony clearly got me excited.

If you work within an operator and don't feel bullish about the future, pay attention.

You can download it as a 96kbps MP3 here (45 meg, 1 hour 7 minutes).

Additionally the full transcript is below. To distinguish between us I've indented Irv.

Transcript

Good afternoon, Tony.

Hi, Lee

How are you?

I'm doing very well, thank you.  And you?

I'm a little bit tired, because this is the third interview, today, and I think my throat is going to wear out and I'm going to become very over-caffeinated, and begin shaking, any time soon.

Okay, I'll pick up the slack if you want to ask short questions.  I can talk forever, on this stuff.

That sounds good to me.  Because of the lack of gaps, I never had time to prepare absolutely any questions for you, so my questions are going to be very elementary, to begin with.  We'll start with the most obvious; you are the associate professor at computer science at Columbia University and the Chief Scientist and Co-Founder at Sense Networks.  Sense Networks, for me personally, has a lot of interest for me.  Could you care to give an outline of what Sense Networks is doing?

Okay, great - Sense Networks was founded by Greg Skibiski, Alex Pentland, Christine Lemke, and myself.  We basically realized that cell phones and location data from cell phones is a wonderful new opportunity to get information about what people are doing, what they're interested in, and to either get this personalized or aggregate data, which enables all sorts of what we call "offline modeling". 

For the past decade or two, the online world has become a wonderful place to model what people are doing, what they're interested in, because it's all online when you're typing into your computer, or when you're declaring things on Facebook or on the website. 

What we wanted to do was say "Could we move this rich structure of networks, graphs, and connections, and analytics off of the online world and into the offline world?  We actually do spend a big chunk of our time there.  We forgot about that.

Because the mobile phone is always with us, even when it's not on, it's locating us, getting our location.  Even though we're not talking and giving actual communication information, we're revealing a lot about what we're doing in the offline world.  So, we view this as a wonderful bridge for getting real data in an unobtrusive way, about massive numbers of people, so we can do what the online world has done with the offline world.

For example, just like the online world has this wonderful network of virtual places called the Web, and ways of searching around these virtual places, we believe the phone is going to help us figure out the network of real places, and build a network or a web of the various restaurants, bars, and places you would go to, and to understand that network much the same way we're able to understand the network of the worldwide web, and to apply some of the same things we've been applying for various socially beneficial or commercially beneficial opportunities, that now work on the Web, but back in the real world, using this location sensor.

But this is - I hate to use the word "convergence", but this is the online world being applied to the offline world.  It may not be in your application example, but basically, when you look at things, you can retrieve information.  It's helping you in real world navigation so it's pulling data from the online world and mapping it to the offline world, correct?

Absolutely, and there are many different perspectives on this kind of data collection.  There are many uses of data.  For example, when we started three years ago, I was doing research in this general space, back in the early 1990's, along with Alex Pentland, where we were tracking people using computer vision and video cameras.  Of course, it's much harder to do than to track people using location and Wi-Fi positioning. 

In the past few years, our job became a lot easier and now we can start doing some of the things we dreamed about, ages ago, with the real location data that we're getting, which is super accurate, super precise.  If you compare that to pointing a camera outside of a window, onto a courtyard, to track people and say, "Where are they going; who is interacting with whom, who is influencing whom," we were trying to do these things with video sensors. 

When Greg came along, we realized this was the right time to move over to the mobile phone as a platform.  Greg Skibiski's initial idea, in starting the company, was to use this data for financial analytics.  Can we somehow use location data that's being gathered about us to help make predictions on retail sales?  Are people shopping?  Are they not shopping?  Are they drinking coffee at Starbucks, or are they not drinking coffee at Starbucks, but going across the street, to Dunkin Donuts? 

That was the initial idea behind the data.  Then, we realized it's such a rich data source that it's far beyond financial analytics.  The real opportunities are to bridge some of the amazing social tools, social networking tools, and also collaborative filtering, or recommendation tools online, into the mobile phone arena, and make them offline services instead of just online services.  That's what Sense Networks is now pushing towards and has been pushing towards, for the past two years, as its main mission.

Okay, I have to say something positive, right at the start here.  It's not a compliment I give very easily, but I have just taken a look while we're on this call - Sense Networks, and I'm looking at City Sense, at the moment.  It's perfect.  It's exactly lined up with where I saw value a number of years ago, and I'm amazed some people have got there quickly.  This is an area, which I had wanted badly two years ago, looking ahead.  I expected it to be another five years.  To see this, now, is very good.  I've just read through it and I think I'm known for not giving compliments easily, and this really is a perfect direction that you're taking, in terms of value and value going forwards to build upon.  I'm rather excited by that, and I hope you keep building in the direction in which you're going because I see a lot of value in this space.

Thanks, Lee; we're very excited about City Sense.  It's both a socially sexy application but it also has, down the road, very commercial opportunities, as well.  Basically, what we wanted to do was to make people city savvy with this tool and to give them a "sixth sense" if you will, of what's going on in the city around them. 

Let's say that I'm at home at night and I'm watching T.V., and it's 8:00 p.m.  I would like to know if I should go out.  I would like to know what's happening; where are people tonight?  Are they at a bar or is there some outdoor concert?  You can try to find that information online, but it's so much more immediate when you can see this real time sensor of where people are.  A lot of times, if you are waiting for the online summary, you've already missed the action because some things happen serendipitously. 

Another thing is, what we like about this is we're letting people vote with their feet.  When you look at City Sense, you're looking at data from, basically, hundreds of thousands of location pings, in real time.  This means if somebody has access or doesn't, but they're at this event; you'll see it.  You don't have to be a blogger.  You don't have to have your own website to post information about where you are.  It's basically this collective intelligence that anybody could contribute to by actually just showing up.

Another thing that's really great about it is it's honest.  You can't spoof the system the way you can say, "Come to this wonderful restaurant.  It got 5 stars out of 5".  If there is nobody there, there are no people generating GPS or location data.  You know that it's not a happening place.  So, there is this honesty to location data, which is much harder to spoof, which I really love about it.

One of the greatest examples was when we were in San Francisco.  We don't know our way around it very well, but we looked and realized that City Sense was recommending this bar location, which usually, is completely dead.  There are no events there.  But, it was maybe 78% above-average busyness for that time of day and that day of week.  We went there and it turned out to be a very obscure bar; no one ever goes to, but some famous band sent their fan list an email saying they were going to have a big concert there.  All the fans of this band came.  The only way to know about this concert was if you were already on the email list, as a fan of this rock band.  We showed up and people were very curious about how we found out about it.  We actually, oddly enough, told the band and the people at the bar.  We weren't fans on the list; we actually used our sensor to discover this event that would never otherwise appear on any other medium.

I think that's fantastic.  I really do.  It overlaps with efforts of mine, over the last three years.  Unfortunately, it's not my interview.  Maybe you can interview me, sometime [laughs]. 

It reminds me, though, of a conversation I had with British Telecom, I might add, a couple of years ago.  It was regarding their API.  They have an API where you can get the location of a subscriber.  You do a dip.  You get a single location.  It costs quite a bit of money.  The actual feedback I gave was, "Look, the value of this, especially at the cost, isn't so good.  You're missing the mark, here.  Where value would be is if you aggregate the masses of location information and make it available to the Web so you can do mashups and hot spots onto Google Maps".  Again, to see what's exciting, to see where people are going.  This is where value is and operators have that location information.  Make it available, not on a one-by-one basis.  Obscure it.  Make it thousands of people.  Then we can see people movement and we can build new applications just on that massive information.

I'm really surprised that you're already there. 

It was definitely a struggle.  You're absolutely right that a lot of the people who have this data aren't doing the things they could be doing with it.  There is definitely a lot of boot strapping we have to do, getting data from different sources to get this stuff going.  We're not a massive carrier that can just say, "Now, we're going to start using our own data that we've been storing for years and years."

Okay, unfortunately, with the way our interview happened, which was a call without pre-arranged questions or preparation, it's a real shame.  I would have liked to have looked over a number of things.  It's just the value space here is so incredibly high because operators, as you know, are in what we'll politely call "challenging times".  The thing is, the value that they have is really, what is officially called the "signaling running over their networks".  Who is calling whom at what time, who is in what location?  This is gold running over their networks.  Today, it's latent.  It's not being capitalized upon.  As you can see, you're beginning to look at such data and you're coming up with what I would call - you're on the road to very powerful applications from that data.

Do you see how operators have got this constant flow of location information and conversational information, as well?

Absolutely, and I think to the operators' credit, they have been using some of this information to start improving some of their churn modeling.  If you are an operator or a carrier, every morning you wake up and think about how you reduce churn and minimize churn.  They are missing these amazing opportunities that companies like Google are much more used to exploiting, which is how do we improve recommendations, search, collaborative filtering, marketing and advertising using this type of data. 

I think the carriers have the data but they don't think of all these opportunities, quite as aggressively let's say, as a company like Google, which is used to mining the data and basically closing the loop of potentially search with advertising or things like AdWords, which are a very tight loop of combining what you're interested in with what somebody would be interested to advertise to you.

You're absolutely right.  There is a massive amount of value in the data, in the aggregate sense, because you can measure what people are doing and get, first of all, statistically reliable information versus just asking one or two people.  You have millions of people who are giving you're the answer.  In addition, you don't have to aggregate everyone into one big category.  Some of the things we've been doing were actually clustering people into one of twenty categories.  You don't really reveal too much about the person, as an individual, but you can still say some very general things. 

For example, we can tell somebody where people like me go out, in San Francisco, as opposed to people like my parents.  We can automatically show you, not just the location of everybody as a generic person, but show you where the younger crowd or older crowd or the family crowd, or the business crowd or the tourist is.  All of this is something you can extract from the data without getting all the way to the level of personally identifiable information, or, the other extreme of complete aggregate statistics, but start getting what we call "tribe statistics". 

Tell me what my tribe is.  My tribe is the group of people that I hang out with.  Maybe it's some other tribe that I'm interested in.  Where do artsy people go at night, in San Francisco, or where are all the techy people, right now?  They might be at a conference or there might be a café in San Francisco, which is known to have a lot of the tech people meet up there and hang out. 

I wouldn't know about this if I looked at the aggregate data and I certainly wouldn't be able to tease it apart if I looked at every person, one-by-one.  You need something in between.  You need something to go from total aggregation, to something closer, but not all the way into individual personalization where you say, "Here is where Tony is," because that might not be very meaningful for someone who doesn't know who Tony is, immediately, but would rather know what category Tony fits in.

Okay, I have to fully agree with you, and again, I'm surprised somebody is so on the mark, so early.  It was only a few years ago that I was dreaming in these directions.  Would you be comfortable describing the work you're doing as at the intersection of sociology and computer science?

Absolutely, in fact, some of the papers we're writing describe this combination of computation or computational science and social science.  We're looking at ways of using more sophisticated algorithms and statistical tools.  There is just so much data that you can't model this using simple ad hoc techniques.  You really have to put on your statistician's hat, sometimes, and say, "It turns out there are twelve categories here.  We're not going to just write a simple description.  We're going to let the algorithm discover that there are twelve categories, on its own". 

A lot of this stuff - we've taken a data-driven approach, a little like the Google philosophy of things.  We don't go out and hand label places and people in our data.  We actually let algorithms automatically discover them and say, "It looks like this place is similar to this place, and this person is similar to this person".  We do this algorithmically.  We let the data drive the models, instead of impose some kind of ontology or structure and say, "There are forty-eight categories of people with ten sub-categories, and so on," manually.

It might be very interesting to combine both.  Combine the ontology or tagging and have your data drive, as you say.  It might be interesting, at some point, to look at both, combining the two.

Sure, yes, we're always interested in getting better ontologies, but one thing we've been doing is also looking at the real data, which has been changing our perspective on social science.  People really didn't write categories in social science when it comes to mobile phone behavior, or even location behavior.  There are categories from the traditional social science surveys, where people fill out questionnaires or they do polling, but the categories we see in our data are very different.  They're basically based on movement and mobile phone behavior, which doesn't necessarily fit into the traditional ontologies.  There might be some ways to overlap the two, but in the sense, the data is driving new twists and turns in the ontology, right now. 

I just have to jump in, at this point, because I'm very inquisitive.  Are you aware of the work of Nathan Eagle?

Oh absolutely, Nathan is a very good friend of mine.  Actually, we were together at a conference, last month, where we were both presenting some of our research.  Yes, Nathan is doing some wonderful work, especially work in Nairobi and in Africa, where he has been using mobile phone data from people who rely on their mobile phones 24/7, as their only means of communication or interaction with the electronic world.  Things like financial transactions are made through your mobile phone because you have no other choice. 

It's a very rich data set because in a way, some of these underdeveloped countries are getting better data than we are because everything is happening to their mobile phones, in one device, versus the way we live.  We have different computers, a desktop at work, a laptop at home, a mobile phone, and they all have different cookies.  How do we glue that all together?  In a way, we have a piecemeal view of our data, whereas, some of these African countries have a more complete data set of what people are doing because it's all on that one platform.

I appreciate that viewpoint.  Nathan spoke at the debut in 2008, and his video is on the Web.  It's really interesting to look at what Nathan said, look at what Marc Smith said, and again, his video is on the Web for the debut 2008, and then to take a look at City Sense.  I have to say, again, this is really fantastic.  There is just massive value, the money, potentially, in these directions is absolutely incredible.  Actually, these applications and what you're doing there will grow bigger and will actually be, in my opinion, and it's a very strong opinion, transformative of society.

To give that some teeth, or at least not to sound as if I'm blue-skying here, if you look at Google AdWords, how has Google made its money?  They've made it in online advertising.  It's been contextual advertising, but the only input to that has been a search string.  It's very little to judge somebody's intention.  That is almost as if we're at the typewriter phase of advertising.  Google only took an incremental step forwards, and the scope is almost beyond belief.  With the work that you're doing, you can see what I would call an "AdWords 2.0".  Even that is not giving it the leap forwards that is possible.  You've got so many more input parameters, almost to the point where, at least in an idealist sense, advertising doesn't exist because it's so finely tuned that it's conversation.  Would you agree?

I agree.  In fact, what we've been looking at is not just asking somebody to type in a search query, but trying to figuring out what they're interested in next.  Imagine if I pulled up a phone and it already knew that I had just had dinner, so it wasn't going to recommend a restaurant to me.  It knew that it's a Saturday night and I usually like to go out after dinner because I was some place that's labeled a restaurant, for the past two hours, and it would recommend, in this new city, maybe three different bars or lounges that I would enjoy.  If it knows my history and my personality, it can recommend these places, in a new city for me, very accurately, and know that I'm interested in that, right now, because it's 9:30 p.m. and I just finished dinner and it's Saturday night. 

In recommending those three places that are "Tony's favorites", it can also give me three sponsored links that are not too different from my favorites, but maybe are other tourist attractions that want to advertise.  Now that it's targeted towards me and it's interweaved into my recommendation engine, I'm willing to entertain these kinds of sponsored links, and go to one of these sponsored bars or sponsored lounges or some other tourist attraction, or if there is a movie or a theater.  I know that my system learned about me and gives me pretty good recommendations.  Now, I'm willing to entertain these "sponsored" links, just like when we use Google.  We know that it's learned a lot about how we use these sentence search queries to find what we're interested in, so we're willing to entertain its advertising on the sidebar and say, "Let me take a look at one of these sponsored links, as well". 

Once you're able to provide smarter search and recommendation, then you can start using that for advertising, as well, and saying, "The smarts can now be used to also pay for some actual sponsored value or ad value".  That's exactly why we are looking to use the location data for and the location history of each user for, as a way of automatically figuring out what to recommend, from your history and the place you are, right now, and to tie it to your favorites as well as some sponsored, real places that we would make mobile advertising dollars off of.

Not only the location changes in one person, as in you are in a new city that you are not normally in, but you also have the data on what people do en masse, the aggregate data.  You know that people normally, at 5:30 p.m., get in a motor vehicle and people who go on "X" road will pass by this gas station.  You begin being able to predict peoples' lives by looking at the aggregate and being able to look at the individual.  Because you know what they're going to be doing next or likely to be doing, or even being able to deduce what their wish is, you can begin advertising to that, satisfying the wish or the desire. 

Exactly

Do you think a day will ever come where you sit down and pizza comes to the door, but you didn't order pizza; it was just that time of day and you sat in the position where you normally would have dialed for pizza.  It almost becomes as if your thoughts, desires, and wishes - the ultimate is where they're getting fulfilled without you actioning them explicitly.  Do you think that's still sci-fi, going that far?

I think it's a little sci-fi, but it's not so sci-fi if you think about it.  It's already happening in the online world.  Before you even know about it, your wishes are being predicted when you log into Amazon and it recommends a book you should read, based on the previous books you've read.  All of a sudden, it's anticipated "Lee, you should be reading this book".

If you think about it, ten years ago, that would have been completely sci-fi.  Today, it's pretty much something we're used to.  We're doing the same types of things with restaurants.  Let's say you went to a fantastic Italian restaurant, I was there with you, and we both enjoyed it.  Actually, I wasn't there at the same time.  Let's say you went to an Italian restaurant, in New York, a few months ago.  I went there, last week.  You also went to another Italian restaurant and enjoyed it.  Since we both co-located in one place to begin with, maybe I should be recommended this new restaurant that you've also discovered on your own.  In a way, the smart discovery is almost like this intelligent pizza prediction.  We're using what somebody just like you wants, to make additional recommendations to you, and also your own personal history.

We can start figuring out, not just from your own data, but the aggregate, a pretty good prediction of what you're interested in, right now, and making these kind of serendipitous discoveries.  Pizza is kind of a temporal type of prediction of right now is pizza time, but there is the whole discovery type of prediction of not this pizza, but you would be interested in trying this brand new, brick oven pizza place that just opened down the street because it seems as if people like you also enjoy it.

Or, like first degree friends have been there.  That kind of gives relevancy if people are first degree or second degree or third degree, I would imagine.  Then the social graph is probably an important input parameter.

Absolutely, and at Sense Networks, we have built social graphs from location data.  We have almost 100,000 users in our social graph that we've been tracking for several years.  They're opt-in users and their data is kept very secure.  They actually own their own data, which means they can delete it.  But, we are basically building a Facebook-type application from the location data.  You have people you may not actually know, which are your first degree friends, because it turns out they're hanging out in very similar places as you are, maybe actually the same places even though you don't know that fellow's name.  He's always at the same restaurants, he goes to work in a similar place, and he always does similar types of things.  We're doing this data-driven social network. 

If somebody in your first ring of mobile friends or your mobile book ring of friends does something, chances are you'd also be interested in doing it, as well.  There is also the second layer and more and more degrees of separation as you work your way away from your most immediate friends in your network. 

I just get really excited because for me, the 1990's were about the world wide web.  The world wide web was linking pages together.  Okay, we got incrementally improved, after the year 2000, when we began seeing audio and video, especially in 2006 with YouTube etc. on the Internet.  So we were getting content put out there as well as pages hyperlinked together.  That had a lot of value, what the world wide web has done.

But that was primarily linking pages and embedding content.  What happens when you truly start linking people together, people and places, and using the data storage, data mining behind that and really trying to drive forth commerce, and prompt social interaction between people?  As you just said there, you might be in the same location as somebody or fairly often in the same location but you don't know each other.  Should it not be that your device then starts prompting social interaction because it deems that the other person may be a valuable new relation?

Absolutely and I think we're missing out on a lot of that information when we're only using online sources for it.  That person who just happens to be always in the same types of places you are, that's a person who is more like you than somebody in your Facebook network, potentially.  I've linked to family members and grandparents, on Facebook, but the reality is there are people in my network, but I have more in common with somebody who goes to the same places, works in the same environments, has coffee in the same places as me, than my grandmother, even though she is in my Facebook network and this person isn't. 

So there is a lot data being missed completely by some of these online networks versus the offline networks.  The offline data, in many ways, is richer and it doesn't involve self-reporting.  In a way everyone, when they report their personalities online, it's not the true you; it's the aspirational you.  Meanwhile, the mobile phone data is the true you.  Everybody has their online persona where they may put their flashiest pictures on Facebook and they have a very different side of themselves.  Their true you is what they're doing in the offline world.  That's much harder to fake, let's say.  We're able to collect both the aspirational you and the true you, and also serendipitously discover people like you, that you otherwise wouldn't know because of this co-location type of information.

Okay, generally speaking, you would say that the offline data - where you are, your movements in a day - it sort of straddles the border between offline and online.  The calls you make and SMS that you send, those call detail records, that location information - which VLR you're on throughout the day is owned by operators.  Operators, when it comes to their business model, it's telephony and SMS.  Both of these are pretty much saturated.  They're certainly not growth markets, over the next five years.  There are only so many minutes we can speak and call prices are heading down etc. 

I almost want to say it's unlimited value when you start taking that data, which is signaling technically, telecommunication signaling it's carried in; when you start marrying up that telecommunication signaling data with Web-style applications and so forth.  I'm wondering if you share that same hope that there can be this perfect marriage between telecom companies, because of the data they have flowing in their networks, and I believe the likes of AT&T actually record all network signaling and record terabytes of this network signaling, for many years now, but they're not doing anything with it.  Do you see such a perfect marriage between telcos and Internet companies where they can come together, let that data come in, let Internet-style companies capitalize or close loops, and create something which is fundamentally transformative, high value, and I almost want to straddle into saying a new economy?

I think a lot of people want to do this.  There are some technical and ownership values and issues like how to combine offline cookies with online cookies, and your telephony information with your online information.  Some of the issues also - it's hard to mine your actual communication when it's voice communication.  It's also, in the end, a very sparse network of people you talk to with your phone and whom you SMS with your phone versus the types of networks we see, for example, when we are building a network of how you move around similarly to how other people move around the city. 

There are issues of the "sparsity" of the call network, which is what a lot of the carriers call it; whom do you call in your calling plan on your cell phone.  That can be pretty sparse and it's harder to use that, for example, than to use a denser network like the Facebook network, which sometimes is denser.  You might have a thousand Facebook friends, but you don't phone them all up the same way.  There are some sparsity issues.

But I do think the Holy Grail is to combine all this data into a multi-dimensional perspective of the user, not just their online or offline personality but what things they buy, read, and how we can enrich their lives by making intelligent recommendations.  Just as a final thought, as an engineer, and a person who has to crunch through a lot of this data in practice, there are some hurdles because the data is always different.  The carriers are storing very different types of data than Facebook, Google, or any website.  Even with the cross-carriers, each carrier stores drastically different types of records.  There are different language barriers and so on. 

One of the reasons we focused on location data more than any other type of data source is because it's always the same.  It's always latitude, longitude, time stamp.  It's just four numbers, if you also include the user ID, as well.  There is a user ID and then there is latitude, longitude, time stamp.  That's true in New York, in England, in Tokyo, and Africa.  Everywhere anyone is on this planet; they're generating these three numbers with a user ID, or four numbers.  We ping that every so often.

What's great about that kind of data is every carrier is generating the same type of data set there.  It always means the same thing.  You don't have to convert the text interaction or the SMS from double byte to some other language.  When it comes time to integrate things across an international scale, it turns out that some types of data are much easier than others.  Location is one of the common bridges, across the board.

I really respect that must make life easier, and the more difficult side of things, you cannot help but dream of being able to link everybody's different ID's together for the ultimate aggregation to make the most powerful applications, i.e. being able to combine people's Amazon wish list and book purchases with their YouTube video subscriptions and YouTube videos that they uploaded and Last.fm songs with their location data, analyzed against a backdrop of aggregated location data. 

Do you have any of these pipedreams of combining everything so it can all be crunched together?

I do like that idea, especially because so many things are hidden redundancies in the behavior.  If I know a lot about someone's musical tastes and book tastes, that should be a pretty good prediction about their movie tastes, for example.  In many ways, each one of these websites is really storing a network of their users.  It's their own little Facebook network of who is like whom.  Who is like whom, in terms of their book preferences?  Who is like whom, in terms of their movie preferences?  Imagine that each person is a dot or a node and we draw links between them if they have similar purchasing or browsing behavior.

I think the dream, at some point, is to have this network with different layers of connectivity where you have overlap with somebody based on your book preferences, overlap with someone based on your movie preferences, your social preferences, etc.  If you can aggregate that into some giant network, I think there are a lot of very impressive things you can do.  In the end, we're actually much more similar than we think we are and we have a collective intelligence.  The smart things you do in your day can help me in my day and vice versa.  If you find an interesting book, an interesting place to eat, read something interesting online, I should be told the same thing.  There is a massive amount of information but the only way to organize it is to leverage the intelligence of your fellow users, either mobile users or online users.

I have to agree with you and we're swamped in more and more communications.  We're swamped in more and more information, media, and content.  We only have so much time and with the new scarcity being time and attention, then the more data you have, as you say, the better you can filter.  The better you can recommend.  What you're doing is cutting through this massive rise of information content and communications and only pointing out what is relevant.  You can use this data to filter calls, to filter communications generally, to filter media.  This is why, at the start, I said this is the road to what I feel is unlimited potential.

I guess I asked you about combining all the data sets.  I just wanted to know if you were a dreamer, as well.  I'm glad to hear that you are but you've been more practical just looking at the location because every operator produces it in the same format.

You talk about this sea of connectivity, which can be many layers and viewed from many dimensions.  The whole value is in the sea of connectivity and the worldwide web is really just a beginning of that.  People get excited about the Web and the phone, but that's just pages on a phone [the mobile Web].  That's not that exciting, really. 

When you start taking the data that phones are producing, aggregating it, and combining it with the online world, the Web, and vice versa - now that I've spoken to you a little bit, I think you're well aware of where the value lies.  I kind of smile because often, people are depressed about the state of telecoms and so on.  It need not be the case.  Again, I just feel it's an unlimited opportunity.

If I jump from unlimited opportunity and mention another topic in this area, because it's an area I've been thinking about for years, it's the Big Brother aspect.  Although the applications become terribly exciting, the worldwide value and it drives efficiency, the economy, and so on, there is this Big Brother issue.  It actually makes big brother seem pale.  Have you thought about the whole privacy thing when you can predict who will like whom, what time somebody will leave work, what it is they'll order, and you begin to even know what time they clean their teeth every night.  Have you thought about the whole privacy issue challenge in that basically, privacy is gone?  We just accept it.

You're absolutely right and privacy is a very challenging aspect of a lot of this.  We do think about it all the time.  At Sense Networks, we've taken some important lead steps in defining new data ownership plans.  Alex Pentland, our Chief Privacy Officer, has drafted a plan where the basic idea is that you own your own data.  We think that's the future model of how a lot of this valuable data, be it for consumer or commercial or for government types of scenarios is being collected, at the end of the day, I think the consumer or individual should own the data.  When you download City Sense, for example, you have ownership of your own data.

If, at some point, you decide, "Hey, I don't want to use the service anymore.  Delete everything you stored," we'll delete the data.  Or you can say, "Delete my last 24 hours".  At the end, the data is owned by the individual.  If it's deleted by the individual, then it's not our responsibility.  It can't be used for a subpoena because the government wants to figure out where Tony was on November 24th.  The data is deleted and we don't own it.  I think that is an important step, to provide data ownership.

The other issue is that if there is enough value, you don't mind the data being used.  Let's say you don't want to reveal to somebody that you're a diabetic because it's a violation of your privacy.  If you're being rushed to the hospital because you were just hit by a car, and you're about to be injected with something that might interact dangerously with your diabetes, you would want your doctor to know, at that point. 

You don't want to give up your information, your privacy, for nothing.  I think the worst-case scenario of that is when it's big brother.  You're giving it up for nothing.  But, if there is some real value to the exchange of private information, then it becomes a reasonable transaction.

If I'm at a party and I meet someone, and they ask me where I live, in that setting there is a social interaction and there is some value being exchanged.  I'll reveal where I live.  If somebody on the street just stops me and says, "Tony, please tell me your address".  Not Tony, because they wouldn't know my name.  "Please tell me your address."  I wouldn't reveal it because there isn't any value transaction.

The more value we can provide for the data, the less people feel bothered by giving up some privacy.  There is a dollar value to privacy, and if you don't give the value back, in terms of a social recommendation, or some smarts, then you don't get to buy the privacy.  That's our philosophy about it.

Okay, I had come to the conclusion that the more you give up privacy, the more free things you get back.  You see that, today, with how people use the Web, and Facebook.  I just saw the future as where you're almost forced to give away ever more and be ever more transparent about every micro-aspect of your life in order to gain some leverage back, as in connecting with new people, getting things cheaper, getting more relevant information.  Do you see some external - do you see some pressure coming where you really don't have an option but to make your life fully transparent, otherwise, you get harmed in creating new relations, having relevant information, better product offers, and so on?

There are two sides to that coin.  I think you do need to reveal to get more back because, especially if there is something like a targeted ad, you're never going to get that ad discount or coupon if you don't reveal that you're one person who is likely to use that promotion, for example.  It's not valuable for a company to send promotional materials to someone who will never use them.  You might miss out because they don't know that you've stated in the category of somebody, for example, who would go to a theater or an opera.  Why would they send you a flyer if you would never go?

There is also some good news from the algorithms and computer science side, which is showing that a lot of the calculations that you need to figure out if two people are similar or if they're in the same tribe or cluster, they can actually be done in a way that's privacy preserving. 

Some of our research, and this is getting fairly technical, has proven that if you and I have a list of movies we liked and didn't like, we don't have to reveal that list of movies to each other to figure out that we're similar to each other.  There is a way to send the information back and forth, in a very privacy-preserving way, so that if we don't have enough compatibility, we'll be told "Lee and Tony are below 10% compatibility," without either one of us actually exchanging our profile information. 

There are some ways of doing this, now, and my future vision is that you have the data about you stored in a safe repository.  Then, if you want to figure out who is like you or there is some other information you want to extract from the data, you don't have to reveal it all.  You can just reveal it in a piecemeal fashion so you can still get the job done.  You can still make good recommendations.  You can still find tribes of clusters without broadcasting the data totally publically.

This has been an actual breakthrough in computer science, which is basically privacy-preserving computation.  How do we figure out that we're similar or that we're linked in a network, without revealing everything about ourselves?  I think that is some good news for the consumer and the public, at large.

I agree with you and it reminds me of some work that IBM in Zurich had done.  Let me discuss that with you, offline.  When you had said that people own their data, that should be the model you do worry about people caching, and so on.  It reminds me of the Seven Laws of Identity from Kim Cameron.  I don't know if you've heard of him.

I've heard of him, but I don't know the seven laws.

Okay, he came up with seven laws of identity, but like rules of digital identity.  One of them is that people should have control of their own data.  Where are you getting this location data?  I have to ask because before you, before this surprise call, I was interviewing Russ McGuire, from Sprint.  Again, I was saying, "Why are operators not making location information available so we can merge it with the Web?"  I'm wondering how you're getting the location information.  Is it from the network, the handset, or both?  Where are you getting it?

We have subscribers that have either used City Sense and are providing the data in exchange for using City Sense.  There are a fair number of people there.  Also, there are people using our buddy finder application, where they show their location only to friends, but we're the trusted third party, which basically gets the data and shows the location to the friend.  In exchange for running this service, we collect the data but we don't sell it or reveal it to anybody.  That's where we get our users.  We also get a lot of taxi information. 

It turns out that a lot of the cities in North America, and elsewhere, as well, have been outfitting vehicles with high accuracy GPS units, for taxis and other public vehicles.  What's great about that data set is it gives us high density.  For example, in New York, we have 18,000 taxis.  Every few minutes, we get their location.  Every time they pick up someone or drop them off, we get their location.  What's great about that data is you don't have to be text savvy to generate location information.  It's a great way to de-bias the data so that it's a view of everybody versus just a view of people who have smart phones and iPhones or BlackBerry's with GPS.

In addition to our users, we have a large amount of data from vehicles and taxis.  I think you always need a bootstrap.  The taxis were an excellent bootstrap because no one wants to look at City Sense and say, "Here are twenty people, and here is me among twenty people".  What was great about the taxis is we were able to instantly give high-density information, in addition to our 100,000 users, using the taxis.  Right away, there was some immediate value for somebody, even if they were the first user of City Sense, when no one else was on there, there was still something to see because of the taxis.

I think that is true about a lot of these viral phenomena like Facebook or the Internet.  There is no value until enough people start using it.  The key trick is to do that bootstrap of getting the first 10,000 users through universities, as Facebook did, or to get the taxis in there to get things boot strapped.

I think once things are boot strapped, then it's more interesting for people to use the service and then it makes a company like Sprint think twice and say, "Wait a minute; now that this stuff is taking off, maybe we don't mind contributing our data, at this point". 

Our hope was, in starting this bootstrap, that it would release the floodgates of the carriers, which would now feel better about taking that step forward.  We're a small company.  We have less to lose by doing something like this than someone like Sprint.  Even if they lost 1% of their customers, that would be a huge nightmare for them.  We could take something risky, like this, and try it first, in the hopes that it would create this bootstrap that would start the data sharing philosophy across all the carriers.

Okay, so I'm just wondering here.  Are you guys thinking, already have thought of, or already offer data mining for operators?  I mean, looking through millions of subscribers' records, looking through the location history.  We're talking about massive data sets.  Are you guys offering that or thinking of offering it, at all?  Again, it is a big future ahead, but that's instant money.  Operators really need a firm prepared to start going through that signaling information and [0:54:11.4 unclear] out to developers, analyzing it, and helping them build towards a future with it.

Absolutely, that's a core to our business model.  What you've just described, you should be one of our chief executives because that is where we're going next.  We've been working with some carriers and some other people in the mobile arena who have this location information.  We've built an API that lets you process the information and do all sorts of analytics, much like Google Analytics analyzes Web data and Web flow information; we analyze the flow through places.  We build profiles of people that let us build social networks from the location data.  It's all integrated into an API that we've built, which is a series of software tools that let you process amounts of location data from mobile phone users in a very easy to use API, with either Web interfaces.  It uses cloud computing in a lot of the machine learning tools.

The hope is; a lot of these carriers - once these tools are available to them, they don't have to invest two, three, or four years of research time with their own research labs.  They can directly use this API and start analyzing this data.  They're already very savvy with their CRM models, churn models and network models.  Location data has been sitting idle.  I think one of the main reasons is because it's harder to work with.  With our API's we've kind of reduced that hurdle. 

If you do think about it, location data looks like spaghetti.  For every user, it's basically spaghetti of dots and trails of where they've moved around.  It's not very easy to plug into a database, the same way it is to plug into someone's zip code or age, which is a much easier database item to work with than a spaghetti trail of location data.  We've built an API that helps convert this location data into nice database fields and also builds networks and graphs out of it, making it very easy to mine the data automatically, for people who haven't.

Okay, so in my opinion - and I don't know your company except when I looked at the Web, after you called.  You have an instant way of making money, today, because I know there are a lot of operators willing to pay a lot of money for the service you just described.  I see it going long term in the future.  I kind of wish I were in your shoes.  I have to be honest; I think you're in a fantastic position.  I'm very enthusiastic about it.  Also, you're talking about location.  At least you're being concrete as in focusing on location. 

It's so exciting because you can just keep building upon that by plugging in users' Facebook social graphs.  Facebook potentially could send them a text message and they have to enter the code on Facebook.  You know it proves that their Facebook ID is linked to their mobile phone.  Then you could read your social network and plug that data until the online activity gets more married-up.  It's just almost an infinite path of development there, and it gets more powerful.  That's really exciting, but I know we've been on the call for such a long time.  I'm getting a bit conscious that I'm keeping you too long.  I would love to jump to a couple of other questions. 

For me, let's say you're in a tenement block, housing block - whatever sort of cultural terminology you want to use.  Often, these buildings have hundreds of people in them or maybe fifty at the small end.  You don't know what everybody's doing.  Is it not more natural to begin seeing the profiles of the people in your building?  You talk about City Sense, and to me, you're almost talking about a sixth social sense.  It would be nice to see the profiles of the people in your building.  Or, if you're waiting at an airport and you have time to kill, why are we not sensing what other people are interested in, what their key skills are, where they're from?  These latent connections and relationships between people may be relevant to us so maybe we should be making them explicit.  What do you think?

I agree.  In fact, your example is a very good one.  The way our algorithms work, you would actually get some linking to the people that lived in your city block or tenement, because of the co-location within a reasonable neighborhood or distance.  They might not be in your immediate circle of friends, but since they live on the same city block, they're probably going to be closer to you on your social network than any random user would be, for example, elsewhere. 

There is similarity because people co-locate because they live in the same neighborhood.  It actually turns out, and if you ask marketing people, sometimes there is a similarity by what you do, which is much more important than the similarity because of where you live.  For example, two women living in Dallas, Texas, where one woman shops at Prada and the other woman shops at Wal-Mart, have less in common with each other than that woman in Dallas, who shops at Prada, has in common with a woman who shops at Prada, in Tokyo.

In terms of a marketing standpoint, there are more commonalities by where you shop than where you live.  Of course, we don't buy that 100%.  We do look at where you live, but we also combine that in aggregate with other types of activity behavior.  You're definitely right; you want to look at your neighborhood, but also at the people who do things like you, that go to similar restaurants and have similar interests and so on.  It's a giant network.  We are six billion people on the planet so there are many ways to find commonality.  We believe there is a nice balance of all these different flavors of things. 

If you are at an airport or you are somewhere, it would be nice if a system could take the initiative and figure out "The person right next to you is your neighbor," and you could start talking to them about ...

Or, went to a conference you once went to.  There are all these potential latent connections.  When it comes to telephony, man's biggest machine - the telephone network, it's got a lot of value because it has so many potential connections.  Some connections are a huge value, like dialing emergency services.  Although you hope never to use that connection, it's the potential of that connectivity.

The thing is; the telephone network is just connecting devices together.  There might be a billion fixed-line subscribers but you don't know about them.  You only know about one hundred fifty people, say.  You've lost all that value that would be exponentially higher if you just knew what was behind the telephone, i.e. about the person behind each of these devices.  Do you see how there could be so much more exponential value in communications if you just knew more about the thing that uses the device?

Yes, I absolutely agree.  There are so many people out there, that it becomes more and more important to know something about those people.  You've got to pick who you want to talk to, out of six billion people.  It was okay when we all lived in villages and there were about three or four hundred people in the village.  You could quickly figure out who is about what and get a good model of everybody within your reach. 

The Internet and communication networks have been great because they've opened up our reach so that it is worldwide.  What we have lost, while we've grown the network, is the ability to immediately know whom we want to communicate with in the network.  It's great that we've gone from the ability to reach three hundred people to the ability to reach six billion. 

Now, we've lost the ability to figure out whom we want to reach, out of those six billion, because it's not something we can do by peeking outside our house, looking at everyone walking around the village, and say, "I want to talk to this person who looks like the blacksmith.  He looks like a young guy my age and I saw him a few times at the same pub where we all had beer.  I know we're going to get along so I'm going to start talking to him".  The idea of now being able to prioritize the people in those six-billion person networks so that you know how many degrees of similarity there are between you and them; that's something we've lost when we opened up access to six billion people.  Being able to build these networks, based on what you're doing, your mobile activity or location, helps you understand that network and where you fit in that web of six billion individuals.

I certainly agree that it's a big input parameter to work that out.  So, as you said, we've built electrical connectivity between people.  That was a fantastic engineering feat of the twentieth century, to achieve bit flow around the world, to achieve electrical paths, circuits between people so you could pick up the telephonic receiver and place a call from one end of the planet to the other end of the planet. 

Now, we take that for granted, that physical connectivity between devices.  The new value going forwards, which is many factors more value, is in what I call sociological connectivity, relevant people knowing what's behind the handset.  I think you're going to find the space you're heading into is going to produce many, what I'll call, "Google's".  I wish you a lot of luck.  I'll not ask you another question, tonight.

Thank you for the good luck wishes.  It's true; it's a very exciting arena.  I think there is a lot to learn and a lot of real, human discovery around the corner, where we're going to understand better things about people, what we're doing, and how we can help them.  I think that keeps it all very exciting.  It's not just about dollars, but it's also about the social sciences, as well.

I think it's transformative, all the way to the fundamentals of society, how we interact with people daily, how we shop, commerce, how we're governed.  The impact is right to the fundamentals of society.  That's why it's so exciting.  You're not just seeing incredible monetary opp

Towards the end of last month I had the pleasure of interviewing Russ McGuire of Sprint.

You can download it as a 96kbps MP3 here (32 meg, 47 minutes).

Additionally the full transcript is below. To distinguish between us I've indented Irv.

Transcript

Hi Russ, how are you?

I'm doing great, Lee.  How are you?

Well, I'm a little bit tired, as usual, but I'm on coffee number twelve.  I have six more to go before the day is out.  So it's just a normal day, here.  They say that the candle that burns brightest goes out the quickest, so I'm sure these eighteen cups a day is not going to give me the greatest longevity. 

Jumping into some questions I have for you, and before I begin, I would like to say I really appreciate you giving me your time and appreciate you giving me a Sprint perspective.  It means a lot to me to hear what carriers are saying.

On that note, you are Vice President of Corporate Strategy at Sprint.  Could you describe what you do in that role?

Sure, mostly I manage a team of brilliant people who make me look smart. 

That's fantastic.  That's what we all want.

What we do together, as a team, really breaks down into three different types of activities.  On one hand, we own industry analysis for the company.  We manage the portfolio of secondary research that informs our view of where the industry is going.  We take that and form it into perspectives on key topics and key competitor activities.  That feeds into our overall strategic insight, into what's happening and what's impacting us from an external perspective.

The second activity that my team leads is the strategic planning activity across the company, engaging with the leadership team of the company, to understand what those forces are, both internal and external, that are shaping the future and driving from that, what are our key strategies, what are the operational plans we need to develop around those strategies.

And all of these work together in important ways; the third is really wrestling with key strategic questions and leading the cross-functional project work to wrestle those questions to the ground and to set directions for the company on those key topics.  It's interesting work and certainly, a fun place to be.

I'm sure you are going to get a lot of input from the conference in March, from the Emerging Communications Conference.  I would like to ask why you are speaking at the Emerging Communications Conference, this coming March?

Probably the main reason that I'm speaking is so that I have a reason to be there.  I think it's going to be a great place to be.  I love being around people who know a lot of stuff that I don't know, have experienced a lot of things, are experiencing a lot of things that I can't experience, and sharing within that community, understanding where everyone is coming from, and learning from the perspectives that people have. 

The most important thing for me is to be there, to participate, to listen, to learn, to exchange, and to interact.  That is critical.  I can't imagine looking at just the group of speakers, not to mention the people who are going to be attending but won't be on the agenda.  I can't imagine another place or time, this year, where I will have the opportunity to engage with that type of group. 

Your question was why am I speaking.  That's my selfish reason; it gives me an excuse to be there.  I also see that audience as clearly an influential audience within the industry.  We, at Sprint, certainly want to be changing the way the industry operates.  We aren't happy with the way the industry operates.  We don't think it is best serving the customers' needs.  We don't think it's best serving the needs of society, as a whole.  Having the opportunity to have a platform and to share some of our perspectives on how things need to change, and what the opportunities are as we work together as an ecosystem is a great opportunity, as well.

That was quite a surprising answer, to me at least.  I expected something far less exciting.  That leads me on to throw in a question very dear to my heart, which is; do you think telecom operators have been far too slow in terms of innovation?

Oh, why would you say that, Lee?  [Laughter]

Why, yeah, I didn't know if I was allowed to say that was my opinion.  I tried to ask it impartially.

You've worked with enough of us carriers, over the years, so I know why you are asking the question.  The answer obviously is yes. 

Of course, and actually, I can even go on record and say that I've only ever earned money, my entire career, from carriers or vendors to them.  At the same time, I have certain sentiment when it comes to innovation.  I will leave that question to you.

To come back to your question a little bit differently; I came to Sprint a little over five years ago.  As I was thinking about the next step in my career, I looked at Sprint and saw something somewhat unique, which is that Sprint is a big enough player in the industry that we have the opportunity to impact how things happen.  But at the same time, Sprint has a strong heritage of innovation.  I believe we still, even today, and in the challenging times that we face, are much more innovative than most carriers are.  All that being said, the types of innovation that carriers can implement, or that carriers, by their nature implement, is nothing compared to the kinds of innovation that I think will be the focus of discussion at eComm.

Obviously, you're going to answer yes, here, but I want to ask; do you feel that Sprint is committed to innovation?  If Sprint is committed to innovation, can you shed some light on how this is going to happen?  I'm sure many of us feel frustrated at the lack of innovation because we are still playing voice mail, every day, voice mail tag, and so forth.  I personally know the way we communicate, especially by telephony, is highly inefficient.  Generally, how do you feel or what is it that gives you the belief that Sprint is going to be a driver of innovation?

I think the most important thing to realize is that carriers can't possibly innovate enough.  I do expect that Sprint will continue to innovate.  When I think about the things we introduced in 2008, that I would call innovative, they are not all technology centered.  We introduced Simply Everything as a pricing plan that allows people to not worry about their monthly bill, but to enjoy the full power of mobility. 

We introduced Ready Now; these are not technology things.  Ready Now is just the simple thought of when a customer buys a new cell phone, train them how to do everything on it that it is possible to do.  That's not the way the industry operates.  It was an innovation by Sprint.  It impacts the overall ecosystem and creates opportunity for everyone.

We also introduced some new technology-oriented things.  One is Titan, which is a Java development platform.  It is very liberating to developers.  It doesn't force them into J2ME constrained, limited view of Java, but rather enables traditional desktop Java applications to be brought to the mobile platform.

We also had innovated around the user interface with the one-click user interface.  It takes feature phones and makes them as easy to enjoy the full power of mobility as what smart phones are beginning to deliver.

There are a lot of things that we have introduced, as innovation, and I expect that will continue, going forward.  There is no reason to think it wouldn't.  But that is still not enough.  The real innovation is going to happen by freeing brilliant people, outside the company, to do the things that excite them and incent them to bring new power and capabilities to our customers, our subscribers, at the end of the day.

Sprint has been, for at least eight years, the most supportive of third-party developers in the mobile space.  We just held our eighth annual Application Developers Conference.  When I sit down with developers, they say, "Sprint has always been the best carrier to develop new applications for."  We've been very supportive of third-party device manufacturers in bringing new devices to the Sprint platform.  They are somewhere north of 220 different non-Sprint branded devices that have been certified for our network.  We've been very supportive of new business models, like the Amazon Kindle, new ways of leveraging our wireless networks to create new value for in-customers. 

It is not about the innovation that carriers can do; it's really about the innovation that we can enable or at least free developers to bring to market because we get out of their way, as much as possible.

Just on that topic and these questions are not scripted, on that topic you see how wonderful Apple has done with the App Store for the iPhone.  You also have Google's Marketplace, although it hasn't had any of the success yet, of the App Store.  To me, these make it very easy for a developer to get onto handsets.  I'm not aware of Sprint having anything that even approaches that.  When you say it is open to developers, I wonder if you can clarify what you mean.  Can a fifteen-year old kid easily get their application onto Sprint phones?

That's a great question.  We have to think about it in terms of two different worlds in which things operate.  One world is the feature phone world and the other world is the smart phone world.  Clearly, what we've seen in the last year or so is an acceleration of the support for developers of the smart phone space, with Apple clearly setting the pace. 

There is support for developers, from an API perspective.  More importantly to your point, there is support from a bringing to market.  Having visibility in the App Store or the Marketplace is great.  Sprint is very supportive of that.  Sprint has been on the leading edge of knocking down the walls so that any website can be visited.

For years, if you developed for the Palm platform or for Windows Mobile or for the BlackBerry, Sprint has been wide open, in terms of customers finding the applications that can run on those devices and installing them on those smart phone devices.

Our participation in the whole Android, open handset alliance ecosystem is an aspect of how we're supporting that, our work with Palm on the Palm Pre and what they're bringing to market as an application environment for that are examples of us being very supportive of the activities that are already happening in the smart phone space.

What is it that Sprint actually offers developers today?  Do they have a network API?  The buzzword, at the moment, is NaaS (Network as a Service).

We have a full application developers program that includes the providing of development tools and access to API's.  Sprint really, as you know and I imagine most of the folks tuning into this interview will know, is a combination of Sprint and Nextel.  Both on the Sprint side and on the Nextel side, we're very supportive of developers leveraging the full capabilities.  Nextel was the first to allow full access to the GPS capabilities on the handset, which brought to market, very early and very rapidly, a lot of really powerful applications, especially for the business marketplace.  The first piece is just core tools for the developer. 

The second piece, then, is within the application developers program, different levels of support from a business perspective.  In some cases, we will sell the application through our channels, bill on behalf of the software provider, provide the first level of customer support for the application developer, and really treat that customer as our customer for the application.  At other levels, those applications being in the catalog of available applications are being certified to run on our network and our devices.

I must admit, I'm not familiar with or haven't even heard of Sprint having any kind of developer program.

We've had it for close to ten years.  There are thousands of developers who participate in our application developers program.  Most of the activity is on the feature phone side. 

It's just a bit strange.  Are you saying that Sprint has network API's or are you just talking about some help with some handset software?  Vodafone has Betavine.  The BT has their 21CN API.  Orange has - I can't remember the name of it.  Are you saying that Sprint has a network API or just some general thing to help people put some applications on handsets?

It's both.  We have API's that are handset based.  In the location space, it's easy to talk about it in terms of user-plane versus control-plane.  We have user-plane support for location, for example, as one of the API's where you can tap into the GPS chips that are in the handset.  We provide support for that - documentation, testing services, etc. 

We also have control-plane implementations of location and other API's.  The most well established and robust version of that is what we call the "Business Mobility Framework."  I'm not the technical expert from a software/development perspective, but it's the web services architecture that is a network API for leveraging information like location, presence, etc.

Okay, you mentioned the word business there, which probably means it's cut off from most people.  I'm just not aware of even being able to get location from a Sprint phone.  At minimum, it would be nice; I would almost say essential.  It seems years of waiting that for any given telephone number to retrieve the location. 

But I'm not aware of any operators even offering something as simple as location being available.  It amazes me.  Do you have any idea why something as simple as location has not been made available?  It could massively change search results, how we use the Web, and how we connect to others.  Location would be incredibly useful but even that we don't seem to be getting.

Sprint has been providing location information for applications for a long time.  TeleNav is a company that is well established in the mobile space.  I've spent some time with the CEO of TeleNav.  He started his business because Nextel allowed access to the GPS location on the handset.  For example, for years, it was only Nextel handsets that TeleNav ran on. 

Loopt is a company you may be familiar with.  Loopt is a company that obviously is leveraging the location information of subscribers and providing a service that is highly valuable.  Loopt started with Sprint because Sprint was the most supportive of making location information available to developers.

Within that, I think the biggest reason why location information is hard to get, from a development perspective, is because of the critical need to manage the privacy and security of subscriber information.  Obviously, there are ways you can overcome that.  Working with companies like TeleNav and Loopt, we figured out the way to make incredibly powerful applications available to our subscribers while being very sensitive to their privacy needs.

Let me give you some examples on the location front.  You see many people updating their Facebook status with their location, or you will see people tweeting it.  Does it not strike you as absolutely ridiculous that your cell phone knows your location but you are having to manually go through a lot of online social tools, and manually update it or put your location in your Skype metapresence field?  You are having to go around these services manually and you forget to update them, yet the device in your pocket knows it.  The network, from the carrier, knows it.  Why can't you give permission between Facebook and the HLR to share that location information, even pay a fee, per year, to Sprint, on top of your bill just so you don't have to manually keep telling other people your location?

I totally agree; that is part of our vision.  One of the things that was recently introduced by Sprint, it's not developed by Sprint but it's a partnership, is NextMail Locator.  This is the integration of location information into a messaging application.  When a message is sent, your location is automatically integrated into that message.  If you think about that, from a Facebook or social application perspective, it's less than half a step from sending that message, such as my status, and having within that the location information for where I am, and all of that being automated.

It's just a shame that you're having to send a message.  It's a shame that Facebook or Twitter, or any other such site, cannot be linked to your phone number and have this auto-updated.  It seems so basic, and yet so useful, and something which people would pay money for.  Again, it just strikes me as one of these oddities of everyday life, that we're so blind to other's location.  Online, we are just manually having to type it in a keyboard.

Yes, that sounds like a great opportunity for some entrepreneur. 

I just happen to feel it's operators who are blocking it.  They have the location.  I get the impression they don't want to open up the information HLR and work with the likes of Facebook.  I could be wrong, but there is something stuck in this system, somewhere.

How is Loopt doing it, then?

I assume Loopt is looking on the handset for GPS, as an assumption, instead of doing it networked based.  Or, they have cut a deal with a carrier to do it networked based.  I haven't looked at Loopt, but I looked at what Loopt is doing.  It could well be GPS based.

I would say we are working with a lot of developers who are using network based location information, again, that's control-plane as opposed to user-plane.  They are building that into their applications.  Many of those tend to be more business oriented, so for years we've supported business applications that are pulling in location information from employees.  Sometimes that is control-plane, so network based.  Sometimes it's user-plane, so device based.  We certainly aren't opposed to developers leveraging that.  That's what we've built into our architecture.

Just building on that, one of the absurdities I noticed with telephone calls is that a lot of the content of the call is actually to manually exchange location data.  "Where are you?"  I think it was last year; in particular, I would place five calls a day to my teenage daughter.  Four out of the five calls a day were just to ask, "Where are you?"  Does that not strike you as odd, to be using telephony just to manually exchange location data?

I don't know if you're familiar with the Family Locator Service from Sprint.

I saw such things on other networks, like Disney Mobile, for example, back in 2006.  You would have to pay like 40 pence in the UK.  It would bring you back a map.  It would ping the other person, i.e. my daughter in this case, and say, "Do you give permission," for each and every request.  It just cost so much money.  I just can't understand why we don't have location in there. 

The reason I stay on that topic is I can't help having this feeling that if we can't get something as basic as location, which is in the network today, out there to innovators to build with and create value and co-create value with carriers, then I seem to lack hope for many other things.  Surely, location is a basic thing.

One of the things we've done to try to accelerate that innovation is we're working to try to make location information more available to developers.  I'm looking to see what we've announced and what we haven't.  In November, we announced relationships with two platform enablers, Where and Wavemarket, so that third-party developers can create location-enabled applications for our customers. 

This is "get the carrier out of the way," and we've picked, for now, two of these.  You may think of them as aggregators that can work at the speed that entrepreneurs work as opposed to the speed that carriers work to enable more and more applications, specifically to address and leverage location.

What are their names?

Where and Wavemarket.

It will be interesting to find out what it is they're offering. 

The other thing with telephone calls - so pardon this manual exchange of location data, you must notice that when you make calls - and I'm probably really leading you off track from what we're meant to be discussing - is that when we're on calls to credit card companies or any other company, really, who we have an account with, you have to manually exchange your name, your address, customer number, billing information, and so on. 

People get your fax numbers wrong when you tell them.  You have to repeat your name many times.  Classically, with me, I'm saying "Dryburgh" and for "D," they're mixing it with "B."  They're mixing the "b" with a "d."  Everyday, it's the same rigmarole going on, of trying to convey my surname, repeating my address, repeating credit card numbers.  They get it wrong; payments don't go through, etc. 

This is fixed stuff.  The operator knows my name and my address, and may even have my billing information.  Why can't I push a button, today, to release it?  I'm not saying you're the god of telecoms, with all the answers, but because you represent a carrier, I just wonder if you go through the same frustration as myself along with everybody else and why can't we innovate past these manual exchanges of billing data and repeating names to people?

That's a great point.  I think our vision is well aligned with your vision.  What we do see, especially in mobility, is a mobile phone really is a personal thing.  It's not my family's phone number; it's my phone number.  It's not my company's phone; it's my phone.  It's me; it's not this group entity.  That individuality is an important aspect.  There is a lot that the carrier knows explicitly because you've told us.  There are things we know implicitly because we can observe how you use your cell phone and your mobile device, more than your cell phone.  It's also, what you're doing from a messaging perspective or from a Web usage or application usage.  Those are things we can observe.  That gets a little bit scary, too. 

The way I describe it is that everything we know about you is a great treasure.  We need to be good stewards of that treasure.  Being good stewards has an aspect, which says, "Protect it, defend it, and don't treat it lightly.  Don't waste it."  On the other hand, there is the part of being a good steward, which is to maximize the value to you, as our subscriber of that information we have.  What you just described is a great example of how we should leverage what you have entrusted us with, whether you wanted to or not...

Or, push hash 5 if a call center asks, "What is your credit card number," or "What is your name."  Push hash 1 and it releases your name and address digitally. 

That is an opportunity that we need to figure out.  We need to figure it out in a way that best serves you as the customer, but also best serves you by creating value by working with other developers and innovators.

Okay, it wasn't meant to be an interview where I tell you my bright ideas, but I can't help but say one more thing.  The pattern of your calls - your calls are what has been called, the last couple of years, your "social graph."  From the pattern of your calls, you can even begin to deduce the type of relationship, like family, because it's usually calls post 6:00 p.m., and duration is quite long, etc.  Operators know your social graph.

Again, there seems to be no way of tying those ID's and helping tie them to the likes of Facebook, and so on, or vice versa; trying to drive Facebook contacts into phone calls.  You must feel there is a massive sea of opportunity, even just in the first thing that comes to my mind that is just not being tapped here.

Absolutely, it's not an area that we're blind to; it's an area where we have done some research so we have a sense of the opportunity.  I think part of it comes back to basic principles of should the carrier, should Sprint be chasing all of those opportunities?  Probably not because we will guess wrong.  We probably don't have the right mentality.  Maybe it's kind of a VC mentality.  We can't afford to bet on a hundred different ideas and hope that one or two of them succeed. 

Instead, our approach is to enable others to leverage what it is that we have that makes that possible.  Doing it within the constraints of protecting the privacy of our subscribers and being good stewards of that, but enable innovation so that a lot of people with great ideas ,such as what you've just described, as well as many others, can innovate leveraging the unique capabilities that the carrier brings to the table.

You must notice, every day, that when you call people and go to voice mail - this is occurring most of the time because you can't have pre-call instant messaging, for example, and use instant message as what Martin [Martin Geddes] would have called your "rendezvous".  You can't have this wrapper around your calls to signal each other, instant messaging.

Does it not frustrate you that we don't have instant messaging between mobile handsets?

I think it's a richer concept.  I think you're implying a richer concept than just instant messaging.  The core...

I feel if we had instant messaging between every mobile handset on the planet, the volume of calls would drastically shrink, especially calls to where you are, etc.  I just don't understand why we don't have instant messaging between handsets.  Everybody wants that but we're forced, again, through dialing numbers and ringing and so on.

We certainly have text messaging, which I think people use in the way that you are describing.  When I think of it, it works very similar to instant messaging.  I think the piece that is clearly missing from text messaging is presence.  I think that presence plus location plus additional information we could know, such as signal strength, battery strength, or other pieces that could factor into the application you are describing.

Just to move this on a bit now, I think I can summarize and you can hear the honesty in me, that I think I could write a book on how frustrated and unhappy I am with what I feel is a lack of innovation and how things are broken.  I feel I could talk for some time about how things are broken. 

I believe you are seeing opportunities in the mobile space.  Is that correct, in terms of innovation and in particular, do you feel that things have changed in the mobile market the last couple of years, which will help foster innovation?

Yes, absolutely and I think, getting back to core principles, there has been a lack of innovation.  There are two ways to solve that.  One way is for the carriers who control the critical pieces, to be the ones to innovate.  I think your career in telecom and my career in telecom, most of my time spent working for carriers, would tell us that if we're dependent on the carriers to innovate, maybe the pace picks up but certainly not to the level it needs to.

The second approach is the approach that I believe is the right approach, which is carriers give the freedom to true innovators to innovate, to leverage the capabilities that we have, to unlock that, to make that available in a way they can build businesses around it.

The debut eComm conference in March 2008 was the first conference to cover the iPhone and Android.  It's quite exciting what this one is going to cover, in March, and hopefully it will be a first in many ways.  When it comes to the 2008 one, I realized something was new when that debut was put together.  We were the first to cover iPhone, Android, mentioned 700 MHz, open networks, open platforms, and open mobile.  Now, others have kind of come into that space that we identified.

On the front of open mobile, do you feel that openness actually has any meaning?  That is a topic dear to me, lately, because everybody is using the word "open" now and "openness."  It's kind of been leapt on by PR.  I want to ask you about openness.  What is meant by it and does it have meaning?

Openness has a lot of meaning.  The problem is that it has different meanings for everybody.  The phrase that I prefer is "freedom."  Why does anybody want openness?  If it comes right down to it, what they really want is freedom.  From an end-user perspective, what they want is the freedom to do, with their mobile device in this case, what it is they want to do.  "Don't tell me I can't do that; just give me the freedom to do what I want to do". 

From a developer perspective, it's the same thing.  It's "I want to be able to develop without having to ask permission or without having to live within the constraints that you, carrier, or you, device manufacturer have placed on me.  Get out of my way; give me the freedom to build my business around the innovation that's possible on this platform."

Freedom, to me, is a better term than openness.

Okay so you feel that openness really means freedom.  This freedom, what kind of impact do you see it having, looking forwards?

I think the bigger opportunity is on the developer side.  If we, as carriers, give developers the freedom to pursue their visions, and that freedom comes in the form of giving them access to location, presence, status, and all kinds of aspects of the mobile experience, what can we unleash?  What can we enable them to develop, for their dreams to run wild?  That creates tremendous value for everybody.  We have to do that in a way that includes the freedom for them to build business models that are profitable for them.  We believe that by doing that, it will also be profitable for us.

From an end-user perspective, it's the freedom to enjoy all of that "wowness" that comes out of developers being set free.  It's also the freedom to go to any website, install any software, to use the device of my choice.  It's the freedom to enjoy mobility in the way that makes sense for me.

Operators are seen as the inhibitors of innovation, generally, but in this case, specifically mobile innovation.  I remember just a couple of years ago being locked out from having Wi-Fi on a Trio [Palm] because an operator had deemed that I may bypass their tollbooth.  I saw somebody else had a phone but he couldn't send the ringtone via Bluetooth because the operator wanted the subscriber to go through the tollbooth of purchasing ringtones.

What inhibitors do you see in mobile, today, that you believe will be pulled down by operators, going forwards?

That's a good question.  I think that if you look across operators, there are probably different levels of freedom, already.  I think there are some operators that are constraining what websites customers can go to, what applications they can install, where they get their ringtones.  I don't think that has ended.  I think that will continue to be pushed by carriers like Sprint, and that other carriers will continue to open up. 

I think there are still challenges to overcome, in terms of revenue sources for carriers.  There is this tension if you have a revenue stream today.  For example, Sprint operates a music store for our music-capable devices.  There is a tension between the revenue we get through that music store and the revenue from someone who had Rhapsody or some other music source they could choose from.  That could be lost revenue for Sprint.  How do we manage that? 

I think there will continue to be this shifting of revenue that is somewhat unnatural for a carrier to have, to sources that are better suited to that, and the enabling or freeing of the subscriber, making it easier and easier for the subscriber to find those other places to get games, ringers, full-track music, screen savers, or desktops, or whatever.  I think that will continue to be pushed.  Some of it is user behavior and learning how to do it.  Some of it is carriers taking away the barriers.  Some of it is carriers actually enabling and making it easier for customers to find content that they previously had to buy through the carrier - but now will be able to find it through other third party sources.

Okay, have you noticed the handsets are certainly becoming computers, like Android iPhone, etc.  Now, you're seeing this massive surge in Netbooks.  What are most people doing with Netbooks?  It's either Google Apps or it's the likes of Skype.  Does that give a "telephone" company concern when you're seeing more and more "near general purpose computers" hanging off the end of the network?  Do you see it as an opportunity?

It's certainly a tremendous opportunity, especially as a carrier like Sprint that isn't in the wire line broadband business.  We're only in the wireless broadband business, both with our 3G service, our EVDO service, as well as with Clear Wire with our Wi-Max service.  It's a tremendous opportunity for people to move from wire line broadband to wireless broadband.  That's a great thing. 

I think the challenge that needs to be managed is around network usage.  The reality is what I can do with a Netbook or any other real computer, or even a high-end smart phone, in terms of the amount of usage I can have on the network, is dramatically different from what we are used to seeing, even from 3G enabled smart phones or feature phones.

We need to have an eye on that, and understand what that drives, from a cost perspective into the network, and how do we manage that and make that work in a way that serves the customers' needs as well as keeps our economics in balance.

I know it's not your position to be asking this, but do you know if the backhaul from the BTS, from the antennas, how upgrading that is going?  Traditionally, these were just 2 Meg.

In the U.S. ...

Or, 1.5

It's a big issue.  It is one we certainly wrestle with.  There is a variety of different solutions to it.  We're pushing the envelope in all directions.  One solution is with fixed wireless technologies, microwave, Wi-Max, or LMDS.  There is a variety of different technologies to use fixed wireless.

The second is to move to fiber as opposed to copper for the cell site backhaul.  Clearly, the relationship, the partnership that we have with cable companies puts us in a position to be able to leverage their fiber throughout metro areas to make that happen.  It's going.  It's always an economic decision of what is the cost, especially if you're talking about building fiber out.  What is the cost of that build out versus what is the opportunity, in terms of revenue opportunity and cost-savings opportunity?  But, it's all moving forward.

I've just got two more questions I briefly noted to ask you.  I really feel guilty about taking you much past the time I agreed with you.  The final couple of questions here, can you shed any light on any Sprint plans with Android?  Being part of the Open Handset Alliance, I was hoping to get some detail on what the plans are with Android.  I believe that T-Mobile took on 130 people, last year, to develop on Android internally.

As you mentioned, we are one of the original members of the Open Handset Alliance.  Clearly, we're committed to Android.  We have a lot of work going on with Android.  I can't give you any specific details of when we would have handsets available, but certainly, there is active development happening there.

Finally, and it's more of an open-ended type question, I want to know what gets you excited, looking forward?  Where is the hope that you see?  I believe you're as interested in this space as I am.  Because of that, I would like to think that you are very much optimistic about the future and have hope where you see opportunity and where you see excitement.  Are you able to share any excitement you see or any hope where you see, for the communications industry - anything that gets you excited?

That's a great question.  Thanks Lee.  I think that many of the frustrations that you shared throughout this call point to the hope and excitement that I have.  I really do view mobility as the next revolution beyond the Internet and the computing revolution.  Mobility - the things that you are frustrated about, like location and knowing me, the personal nature, and data about me, that points to things being possible that weren't possible before, that aren't possible in just a wire line IP connection.  Mobility enables new things to happen that we haven't yet imagined.

To me, that's the exciting thing.  For Sprint, that's where we see tremendous opportunity, not doing those things ourselves, but enabling innovation around the unique characteristics of mobility.  I get excited.  I think some of what we're seeing in the Android marketplace and some of what we're seeing in the iPhone App Store points to the creativity that can happen that can leverage the unique characteristics of mobility.  Those are promising first signs. 

I think, unlike the Internet, where the carriers chose to ignore it, chose even to inhibit the innovation from happening; carriers like Sprint will embrace openness and embrace innovation and the enabling of innovation by others.  Not only will Sprint see it happen, but will participate as that value gets created for our customers.  That's what gives me hope and what I get excited about.  Thanks Lee.

I would like to say I appreciate the time I've had with you, particularly because I know it's easier for me to ask the questions than it is for you to answer it, considering the constraints you're under.  From knowing about you from other sources, I know you have an equal passion for the industry.  I thank you very much and really look forward to seeing you there and speaking to you in person.

Great, thanks Lee.  Go have another cup of coffee.

I shall do and that will leave five more to go.  Take care, thanks again.

Bye

With the heavy backdrop of economic doom and gloom everywhere I'd been finding it ever more strange that virtually every company I was dealing with in relation to the 2009 conference, was reporting accelerating business let alone flat or declining business.

In order to try and get a handle on why this was, I grabbed a handful of such people on my Skype buddy list and held a fairly impromptu Skype conference call on the topic last Wednesday.

• Jonathan Christensen (Skype)
• Irv Shaprio (IfByPhone)
  
• Rodrigue Ullens (Voxbone)
  
• Graham Brierton (Voicesage)
  

You can download it as a 96kbps MP3 here (18 meg, 29 minutes).

Additionally the full transcript is below.

Lee: Good morning, today we're discussing accelerating in a depressed economy.  On the call (I was on the way to say "line", but that sounds terribly old-fashioned) we have Graham from Voicesage. Graham would you like to say hello?

Graham: Good afternoon to you, Lee, or good morning, depending on what part of the world you're in.

Lee: It's actually 6:10 p.m. here, but I thought I would say good morning, since we try to run in California time.  We also have Irv, from Ifbyphone. Irv are you here?

Irv: I am here, at 11:00 Chicago time, with about 2 feet of snow on the ground.

Lee: We have Rod; I remember everybody's name.  That's impressive.  [Laughs]  You're all friends, as well.  I'm doing quite good.  We have Rod, from Voxbone...

Rod: Hello, yeah, 6pm here.

Lee: We're in the same time zone.  We also have Jonathan, from Skype.

Jonathan: In sunny, warm, wonderful Califormia.

Lee: You're basking in the sun rays, daily, there.  That sounds good.  I think I'll give an introduction and say why we've all ended up on this call.  It's simply because we have this huge economic downturn, at least according to the news and looking at figures, and so on.  Yet, I'm kind of pleased to say that the companies I speak to, who are participating in eComm are actually doing very well. 

It sounds kind of corny; it's almost like saying, "Hey, if you're participating in eComm, you're going to do well," but I couldn't help but notice that whenever I spoke the last ten days with sponsors, they said, "Oh no, we're actually doing better, due to the downturn".  I couldn't help but notice this complete opposite trend to what's going on, with these communications innovators saying actually the downturn is accelerating business. 

The first company I spoke to was Voicesage.  Paul had shared a graph.  It was amazing growth.  Then I was on an interview with Irv, with Ifbyphone, and again, just before the interview, he told me how business has never been better.  I was out to dinner with Rod of Voxbone, on Sunday, a few days back.  He also said, "Oh, business has never been better."  I was then talking with Jonathan, who mentioned the Skype figures and again said that Skype was accelerating.  I thought, "Hey, let's have a call and see what the commonalities are, here". 

I just said, before the start of this call, to Paul at Voicesage, "You guys are the only non-sponsors, so I can't say it's because you're sponsoring eComm" [laughs].  Paul came back twenty minutes later and said, "Okay, we're sponsoring".  Now, I can say, "Hey, if you sponsor eComm, you accelerate in a depressed economy".  [Laughter]

Jonathan: I think, Lee, you've just defined a recession-proof sector, the sector of eComm sponsors.

Lee: I agree, and we need many more, so if you want to accelerate - okay, I'll leave the cheesy pitch out. 

Looking at the list here, I would like to begin getting a handle on why and how your businesses are accelerating in this environment.  Maybe I could begin with Graham at Voicesage, whom I've never had a chance to speak with, yet.  Could you give some bullet points as to what it is you're doing for this acceleration.

Graham: Other than being really, really nice people, everybody loves us, Lee.  I suppose you want the business answer.  I think it has to be, I suppose, over the last eighteen months to two years, we've noticed businesses, especially in the enterprise sector, are moving more and more towards software as a service to try and cut out cost of ownership, improve efficiencies, etc., I suppose no more so than in the communications context. 

The way we operate is, while we are a communications company, it has a specific focus on moving metrics within common business processes.  I suppose reducing lags, etc, making your agents more efficient, bringing in your money earlier, improving your renewal rates on insurance policies or something like that, and communicating in a more efficient and cheap manner.

I suppose, in the current downturn, of course, that's a focus companies have on their mind, right now.  Eighteen months ago, of course, companies were always looking at this, it comes into much sharper relief, I suppose, over the last six months, that they need to move quickly and sharply on improving their costs and indeed increasing their revenue, by any way and means possible, especially low risk means.

What does low risk mean?  Low risk means you need to be able to do something, just "pay-per-use", low capital expenditure, be able to dip in, dip out.  Try it; if it works for you, great, use it.  If it doesn't work for you, move on.  You haven't exposed yourself, shall we say, too much.

Lee: One of the things you've been doing is looking at data from communications interactions, to save money.

Somebody is making a lot of noise, here, with a microphone.  Who is the guilty party?  [Laughter]  Somebody is the guilty party, with the microphone.  Behave, children, with your microphones.  [Laughter]

Back to Graham, at Voicesage, you've been looking at data from communications interactions, to save money.  That sounds kind of fancy, but if we begin just explaining that, I think what you guys are doing is you notice that somebody is available more at 6:00 p.m. as opposed to 7:00 p.m., or you notice that they're more likely to answer a call if you text them first.  It's something along these lines that you're doing.  You're noticing patterns in data in order to be able to more likely reach people.  Can you expand upon that?

Graham: Sure, when you make any intervention in a process, to move some indicator, to make things better, you need to constantly monitor and change and improve.  In monitoring, changing, and improving, you are obviously looking at data.  There are two forms of data.  You have the data that occurs within the call, and then of course, within the interaction, whether that be text, email, or voice.  You also have the data that goes along with that customer, outside. 

What we do and specialize in, at the moment, is taking both those sets of data, squishing them together, and looking for correlations within that.  Sometimes, the correlations are very obvious, such as you said there; certain people, for certain processes, are best contacted at certain times.  Sometimes, they're not so obvious. 

For example, we had a company that the key thing they wanted to do was bring in their debts cheaper and quicker, instead of reminding people to pay their bills.  Part of the paying the bill process was transferring them back into a call center to actually collect the money.  What we noticed when we analyzed the data was they were getting a hell of a lot of people that were wanting to pay between 3:55 p.m. and 4:05 p.m.  We still don't know the reason why there is a peak at that point, but there is a peak at that point. 

One of the issues that these guys had was that they couldn't actually take all of those calls because they had a shift change at 4:00 p.m.  They were unaware that because they had a shift change there were a lot of people that wanted to engage in a process with them but they weren't allowing it because of their internal business processes.  They actually changed that.  That came as a direct result of simply looking at the data generated from the interactions that their customers were having with us, and us trying to collect money from them.

Lee: Are you able to share customers or is that kind of non-disclosed?

Graham: Unfortunately, a lot of our customers don't like to have their names mentioned because we are moving metrics for them, such as improving no-shows of deliveries, improving their debt, and all that sort of thing.  That's sort of very sensitive information in the industry.

Lee: Okay, what about types of company?

Graham: Types of company, I suppose the example I was giving there, a moment ago, was the 2nd largest catalogue company in the U.K.  They're collecting money from catalog sales, online sales, and that sort of thing. 

Lee: Are you able to share the kind of growth rates that you've had?

Graham: Absolutely, I think from January last year to January this year, in rounded figures, we have 1000% growth.  Over the last quarter, we're averaging month-on-month growth of between 20% and 25%. 

Lee: How has it been the last three months, when there has been the most painful backdrop, globally?

Graham: Actually, there is an upswing in that.  Again, I suppose we're good at analyzing data.  We can make a correlation between the two. 

Lee: That was when you sponsored eComm, then. 

Graham: Exactly, it's when our conversations first started with you.  [Laughter]  Again, it's that correlation.  December was our best month, ever, by far.  Even in our projections etc., everybody allows for a little downturn in December because businesses are closed for one to two weeks, and you don't expect much business.  But no - everybody was working, every single day, except Christmas Day, collecting money, reminding people to pay their bills, telling them about deliveries.  It was a huge upswing in December.  That has continued into this month, as well.

Lee: So, you're saving delivery companies money, as well.

Graham: Absolutely

Lee: Just briefly, how are you doing that?

Graham: Around logistics, one of the key problems of people delivering to your door is making sure you are going to be there to accept the delivery.  They always add into their cost the fact that, on average, they're probably going to have to attempt 1.5 deliveries for every delivery.  It's a huge cost if someone is delivering a refrigerator to your door, you're not there to accept the refrigerator, they have to bring it back to their depot and deliver it the following day or at another date. 

What we do is allow them, in real time, from their systems, when a delivery is scheduled in their system, to communicate with the recipient; confirm they're going to be in at the estimated time of delivery, confirm they're going to be able to accept the delivery, confirm we have the right address, and only when those three things are confirmed will your refrigerator, your T.V., the new suit you've ordered, or whatever, actually be loaded onto the truck.  You're drastically improving the amount of times the person is actually at the door. 

The metric we actually got on that, I think one particular company, which was the largest white goods provider in Europe, they had a no show delivery rate or 4.7%, so 4.7% of deliveries couldn't be made, which is a huge expense.  We reduced that to naught.

Lee: I would agree with you.  We should do an interview some time, because they're meant to be fifteen minutes, unless you want to go on for an hour.  I loved your brief answer.  It means you're a good candidate for an eComm interview, later on.  [Laughter]

Again, I really like that because it was quite clear the efficiency that you are helping drive there.  I see the innovation there.  Again, it's an area that seems logical and I'm amazed that others are not in that space, that I'm aware of. 

Moving on, if we can see if Irv is still with us.  If Irv is still here, from IfByPhone, could you tell me how your growth has been?

Irv: Absolutely, Lee, our growth has been exceptionally robust.  Each month, over the past year, has been dramatically better than the prior month, with very similar numbers.  We've been growing at over 20% month-over-month.  That may in fact accelerate this quarter because January and February look like they will be exceptionally strong. 

Lee: What is it you're doing?  Are you helping white good delivery [sarcasm]?

Irv: Our business proposition is a bit different, because we do not sell to large enterprises.  We sell to thousands of small and mid-sized companies, companies that range from maybe a $1 million a year revenue, to a couple hundred million dollars of revenue.  In that sector, which employs more people around the world, in fact, than all of the so-called Fortune 500-style companies combined, you find an interesting dynamic. 

The dynamic is that the owners absolutely do not want to lay off people, even though the economy is terrible.  If you go to them with a proposition that allows them to use their in-house employees, maybe not their call center, but their in-house employees more effectively, they're delighted.  Those employees are more effective.  They keep their jobs and everyone is happy.

We use telephony in the cloud, or hosted IVR technology, in order to do exactly that.  Because all of our IVR technology, or cloud telephony, is configures or provisioned from a very easy to use Web portal, this allows a business without specialized expertise to apply these types of technologies.  That's been very successful for us.

Lee: Okay, can you tell me what it is that you're doing with the IVR technology, to save money?

Irv: I'll give you a very practical, yet very simple example.  Batteries Plus is a franchise-based business in the United States and Canada that has hundreds of retail stores that sell only batteries.  If you need a battery for anything, you go into Batteries Plus or you go to their website and you can purchase a battery. 

In many, many cases, people need a battery right away so they want to go to a store.  Batteries Plus was finding that they were fielding hundreds and hundreds of phone calls to stores asking for routine information such as "What are your hours of operation; which is the closest store to my address...?"  We automated that process for them. 

In fact, they automated it themselves by going to our website, provisioning a toll-free number, putting in a IVR on the front end that asked a couple of very simple questions to determine whether the customer was looking for information about batteries.  In that case, the call was transferred to a central call center corporate.  Were they looking for the closest location, in which a geo-coded application automatically provided them with the closest location and driving information.  If they were looking for store hours of operation, same geo-code process except in this case we retrieved the hours of operation.

They found a dramatic increase in the productivity of their in-store personnel because now those personnel could concentrate on spending time with customers in the store.  The side effect of that is they sell more batteries.  They helped their individual franchise operations be more successful; they were more responsive to their customers, and it was all done with a service that runs month-to-month, with no capital expenditure and was up and running an a very short period of time.

Lee: Turning from Irv to Rod at Voxbone, can you tell me how business has been for you?  In fact, if it's okay, can you mention growth figures?

Rod: Since January of last year and this year, in comparison, we grew about 70% in the whole year.  Now every quarter, we are adding about 15% growth on a quarterly basis [Rod later reported he meant to say monthly not quarterly]. 

Lee: How much, on a quarterly basis?

Rod: Fifteen percent, on a quarterly basis. [Rod later reported he was meaning monthly]

Lee: Okay, and has that slowed with the global economy, at all?

Rod: No, actually, as you mentioned, it's started accelerating since Q4, last year.  The reason we see for that are multiple reasons, I think.  One of the reasons is because when you look at services like the ones that have been mentioned by Ifbyphone, just now, and the one that was mentioned by Voicesage, all these services are cloud-based, Internet-based services.  At some point, they need to reach the PSTN.  Most of them actually need a telephone number to be activated.  The bigger they get, the bigger we get.  That's already one reason.  It's not necessarily because of us, but because of our customers that have services that are interesting, and we grow with them.

If you look at the way numbers were used in the past, where you had a telephone number that was just linked to a physical location, that's all you can do with it.  The cost to dial such a number is pretty expensive.  What we've done is to just completely take away the geographical link.  Now a number is just a software-based identifier that people can use to call you on.  It's very flexible.  You can just build up a service. 

First of all, that service can be completely Internet based.  You can just use telephone numbers from Voxbone to make it reachable from traditional phone networks, from mobile phones and so on.  Basically, you can be a company and have a virtual presence in a lot of countries.  From day one, you can start a service provider, in forty-five countries.  I think that's one major reason why we've grown, expecially now. 

The way I can explain that, apart from the other reasons, is because VoIP has become very mature.  That's quite recent, I would say.  We saw a lot of discussion about VoIP being just dead, being whatever you call it.  I think that's also a sign that says VoIP is mature, meaning that VoIP is reliable, sometimes more reliable than the TDM, the old telecoms world.  It's more flexible.  Sometimes the quality is as good, or sometimes even better.  There are multiple reasons that tell me, "Okay, today VoIP is very mature".  Everybody is moving to that technology.  If you have a company that is using VoIP at its core, I think you are at a good position, today.

Lee: What is it that Voxbone is doing?  As far as I understand, what Voxbone is doing is they're allowing what used to be hard-wire telephone numbers, telephone numbers were hardwired to geographic locations.  I think what Voxbone is doing is making them software based.  Numbers are not tied to a geography so you can have a virtual presence around the planet.  I guess what you're doing is allowing people to have virtual offices.  I'm assuming that this is part of the key to why you're seeing growth, particularly when the economy is fairly down.  Would you agree with that?

Rod: Yes, that's clearly a reason, but that's one argument for the business, meaning you are a business, you have customers all over the world.  Instead of having to call them or having to pay expensive ways to be reached by these customers, you can just have local numbers in a lot of countries and people can call you cheaply.  That's one reason.           

I don't think that's the only one.  You can also use numbers in many other ways to enable - I would say there are many mobile VoIP providers, as an example, that use numbers to enable their service.  It's not just businesses.  It's also service providers that have emerged and that use Voxbone behind the scenes to enable their service, in fact, to bridge the mobile part with the Internet.  As you can imagine, all these VoIP solutions are growing quickly and since we enable them, that's another way to get traction.

Lee: Okay, thank you for that, Rod.  If we finally turn to Jonathan of Skype, I believe that the other day Skype released figures, which were very good.  I've not had a chance to see them, yet.  I know others have been pouring over these numbers on the Web.  Could you briefly cover those figures?

Jonathan: Sure, no problem, as commentary - I joked about this being a sector.  Obviously, there is no whole sector that is totally recession proof.  It's just amazing, in these times; last week, there was one day in the week where seventy thousand jobs were lost, in the U.S., on a one-day tally.  It's amazing if you're a good-sized company in this environment and you can just hold your own, you can escape the layoffs and so on.  It's even more rare to see real acceleration going on. 

I think this is my own personal view, but I think there has been these constants in recessions and downturns in the past.  There are sort of three categories in my mind, that people start to consolidate their situation, companies do the same thing.  They start regrouping and are looking for efficiencies.  The other thing  is there is a pretty swift migration to value. 

I read an AP headline, yesterday, that said "The Wealthy are Turning Stealthy" and that "throwing your money around is so pre-recession".  There were a bunch of examples of companies that are also doing well in this environment, like VMware, where they have cost-efficient server infrastructures.  Virtualizing servers is popular in this kind of economy.  On the consumer side, Net books are selling like hot cakes.  It's the most pronounced shift I think we've seen in the personal computing space in a very long time, the almost immediate rise of net books. 

The third thing is this desire to escape from reality or to go looking for comfort and familiarity.  Some funny examples there are McDonalds is doing well.  Hooters is doing well.  Getting served comfort food with good-looking young women is a popular pastime.  Network gaming is booming.  NetFlix is seeing acceleration in their business.  They offer a convenient way to save money on your cable bill, maybe, but also to escape the reality around you. 

If you have a model that provides more than one of these things, that's even better.  If you are in the business of offering migration to value and efficiencies and you let people derive comfort in these bad times, you're probably recession proof or partially. 

Lee: We need efficiency and Hooters combined.  [Laughter]

Jonathan: If you can find a bunch of businesses that combine those factors, you really have a good formula in this market.

Lee: [Laughs] We'll make that a theme of 2009, driving communications towards efficiency and comfort, through pretty looking women, etc. 

Do you have the Skype numbers at hand, at all?

Jonathan: Sure, with all that as a prelude, the numbers are really compelling.  In the year-over-year growth with respect to users, our registered user numbers, we're approaching this law of big numbers.  We're growing very rapidly, Q408 was on the order of 47%, still very rapid growth.  Q4 is usually a little bit seasonally slow for us.  That was pretty astounding.  The bigger and more pronounced numbers are around Skype minutes and SkypeOut minutes, versus last quarter for example, at 63% percent with SkypeOut minutes.  Skype minutes, we had 72% growth in Q4.  On SkypOut...

Lee: What do you think is driving these minutes?  Is it businesses using Skype, for a change, in order to save money, for example?

Jonathan: We're seeing two things.  One is just consumer migration to value; people want to avoid long distance, but we also see in the consumer space a network effect around your friends being there, the quality being great, it being convenient and easy.  We have a large constituency of people where it is the convenience, free, and easy factor. 

On the business side, Gartner, for example, recently said they kind of backed off their position that Skype is dangerous, evil, and will introduce Trojans into your network, and so on.  We hear; we have a bunch of case studies and we hear more and more from corporate IT, these commandments to their workforce saying, "When you're travelling, when you're making long distance calls, when you're going to be faced with insane roaming charges, please try to use Skype.  It works, it's easy, you can download it, it's free".  We are seeing acceleration in that sector, as well.

Lee: Okay, that's fantastic.  Again, I appreciate the time the four of you have given me this morning.  It's very good to be hearing the opposite of the news we're being swamped with.  Again, to be honest, it's daily the companies I'm speaking with are telling me they're moving forwards in a positive way.  Again, I feel astounded that I get this type of news and yet if you switch on the television you get the opposite kind of news.  I guess it's because on a more macro level communications is the backbone of an economy.  Any communication innovators are obviously going to benefit from such a downturn.  I personally think it's going to feed very well and accelerate communications innovation as a whole.  Things have been too stagnant for too long.  I feel that the downturn is going to propel the ones who are innovating.  I think we've had four of them on the call, today. 

I would like to thank you, Jonathan. 

Jonathan: Thank you.

Lee: Thank you, Graham.

Graham: You're very welcome, Lee.

Lee: Thank you, Irv.

Irv: Thank you, Lee, for coordinating this.

Lee: Thank you Rod, over in Belgium.

Rod: Thanks, Lee.

Lee: Have a great day, and I hope things keep propelling forwards.  Thank you all, again.

Last Tuesday I had the pleasure of interviewing by phone, Richard Whitt, Google's Washington Telecom and Media Counsel.

We discussed such things as Richard's role at Google, the 700 MHz auction, white spaces, the change of FCC chairman, Obama's stimulus package, challenging the broadband access dualopy, and a number of other things.

You can download a recording of the telephone call as a 96kbps MP3 here (17 meg, 27 minutes).

The transcript is also available in full on the CircleID site here.

Reminder of two important event cut-off dates:

• Extended Early Bird Registration ends on Friday (30th January). Purchase tickets before then here.
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Please also note that audio and video of the event will be released over a period of 12 months (with release priority being given to talks given by event sponsors).

Don't miss the most exciting 2009 communications/telecommunications event.

Last Saturday I had the pleasure of interviewing Stefan Agamanolis via Skype.

You can download it as a 96kbps MP3 here (27 meg, 38 minutes).

Additionally the full transcript is below. To distinguish between us I've indented Stefan.


Transcript

Good afternoon, how are you?

I'm pretty well; how are you?

How am I? I don't know [laughs] you asked that in such a sincere way. I'm actually, relative to the rest of humanity, I'm actually doing pretty good.

[Laughs] That's good to know.

Everything is relative, right?

Sure, yeah

You're in Scotland, now. It's actually, where I'm originally from, so it's kind of strange to be calling back to my birthplace. Where are you from, originally?

I'm originally from Ohio, in the United States.

Okay, so we're sort of doing things backwards, [Laughter] here. It's kind of bizarre.

I'm in your homeland and you're somewhere far away; who knows where.

Who knows where, yeah, some distant land. How are you finding it, because you're way up north in Scotland, like where I would never go because it's so cold, damp, dour, and miserable. How are you finding that dark, cold place?

Actually, I'm living in the northern part of Scotland, as you know. I really think it's a very different place. It's almost like a different country compared to the so called, "central belt" of Scotland, which is mainly Glasgow and Edinburgh. The area that I'm living in is actually the sunniest part of Scotland because of some microclimate; the way the mountains and the sea work together, here. So, it doesn't necessarily feel dark to me. We even get half the rain here that they do in London, over the course of a year. I think, actually, the climate is quite good, in U.K. terms [Laughs], but yes, you're right; it does rain here. We get more weather, perhaps, than other parts of the world, sure.

You're heading up a lab called Distance Lab and you're a graduate of MIT's Media Lab. Is that correct?

That's correct, yes.

Why has the lab decided to form in northern Scotland, of all places?

There are a lot of reasons, I suppose, why we wanted to do it here. I should be clear, at first, to say that Distance Lab is not an MIT initiative. It's an independent thing. The main reason it exists at all is because there is a regional development agency that's based in the northern part of Scotland, here. It's called Highlands and Islands Enterprise. There is sort of a network of these types of regional development agencies in the U.K that get government funding to develop the economy in different parts of the U.K. The one up here, I think, is particularly progressive, compared to others. When I was working in Dublin, at Media Lab Europe, they actually sponsored Media Lab Europe in Dublin.

The Lab is "concentrating our efforts on a theme of distance". I'm sure we've got a fair amount of interest overlaps, since my passion, every day, is how people can communicate and collaborate at distance. Can you tell me more about the theme of distance?

Sure, distance just seemed to be a very nice word or term that pulled together a lot of the interests that were in this region at the time we were developing the plan.

There is a lot of interest, for example, in tele-health, in the region. You have a lot of - especially older people living in this region who are living in quite distant areas, who would benefit from that kind of thing. Distance learning has also been a very big theme in the region, for a long time, as well as other sorts of things like long-distance relationships. You have more of those here, particularly in families. A lot of the young people will leave home after they graduate from high school and go to colleges and universities in different parts of Scotland or the U.K. So, there is just a keen awareness of how distance affects peoples' lives up here.

It was a nice theme that brought together a lot of things. I guess; my own previous research also dealt with the theme of distance. I was running a group in Media Lab Europe called Human Connectedness, which was really about the future of human relationships, as mediated by technology, trying to deal with distance in new ways, to enhance those relationships, whether you're long distance from somebody or maybe in the same city and the same house and you need to be able to deal with a different kind of distance. Maybe it's an inter-personal distance or a temporal distance. It's a very flexible theme and I think it makes a nice theme to form a lab around, an easy thing to tell a story around that makes sense to people.

And the Lab has been working on something called Remote Impact. Could you describe Remote Impact?

Sure, just to give you a little context; Remote Impact is sort of in the theme of sports. We were very interested in sports because sports are a great way to introduce people to one another; they're a great way to break the ice between people. There are a lot of good effects of sports, like if you play a sport, such as a game of squash or something, with a new colleague, if you work up a sweat and get your adrenaline moving, that's a way to increase your propensity to bond with your teammates or your competitors. That's why sports are such an interesting phenomenon.

We wanted to be able to take advantage of the effects of sports but over a distance. One of the most difficult problems in communication is building a sense of trust over distance or building teams; just getting to know people for the first time is very difficult using a telephone or email. It's a little bit awkward that way.

We got very interested in sports as a way of doing that. We worked on a couple of different sports over a distance experiences. The latest one you just mentioned, called Remote Impact, is basically boxing over a distance. It's not exactly like boxing, obviously, but the point of it is that we want you to able to work up a sweat and feel like you're fighting with someone in a friendly way - you play a game.

The way it works when you stand in front of it, is it looks like a mattress standing up against the wall, like a bed-size mattress. There is a video projection on it that projects a silhouette of your competitor, who is somewhere else in the world. They could be anywhere in the world. It's connected over the Internet.

This mattress has some special sensors that we've developed inside of it; it knows how hard you're hitting it, where you're hitting it, and even knows if you're hitting it in multiple places at the same time. If you hit that persons' silhouette, you get points. If you miss, you don't get points. It's extremely fun. You can dodge the other person when you think they're going to hit you or you can sort of trick them with a kick or something. You can throw your entire body into it.

There is something to that "brute force" interaction, with an interface, that's really new, that we didn't have before. You've probably played games on the Nintendo Wii, where you have the controller and you wave it around, but you're never actually hitting anything with it. You're always waving it around in thin air. We thought it would be really fun to get full, physical contact with something, a brute force contact.

Have you ever thought about developing that into sex by distance, because I'm sure there is a lot of interest behind that.

That's not an area that we would be going into, in our research lab. I'm sure there would be a lot of keen interest in that from other organizations, especially given that we're government funded; we're not interested in doing that kind of work. [Laughs]

[Laughs] Okay, it just seems a linear progression to me, in that example. Also, I see you had a project; I think it's pronounced "See-moo-says".

It's a funny name, called SeamuSays. That's a project that's kind of like a soft toy. It has some electronics inside of it. The original purpose for developing it was to create something that would allow children to learn languages more easily, or in a different way. There would be ways that you could interact with this doll, by touching its hands together, for example, or touching its ears to its eyes. It would say something. It would replay a message that's been stored into it.

We realized that it was a fun way to leave voice messages to people. Someone could leave a message in there and then go away and someone else would get it later. It could be something fun for a parent to leave a message for their kid, which they could get out of the doll sometime later.

What we're working on right now is a version of that where you can actually leave a message for the doll, remotely. For example, Grandpa or Grandma, who lives in a different place, could call a number, theoretically, record a message, and then the grandchild, wherever they might be in the world, could get that message out by interacting with this doll, in a very simple way, rather than by pressing a button on the answering machine. It's just a product concept right now that we think would be nice to do sort of an inter-generational distance - breaking down intergenerational distance.

I do like the idea of being able to use your cell phone to "charge" your children's toys with your voice, to embed your voice in toys of your children, and being able to dynamically change that. I do like that one.

Can you tell me about @hand?

Sure, that's in the area of tele-health. For just a little background on that, we did a lot of work, background research in tele-health technologies, just to see what the state-of-the-art was. What we identified there was that there is a lot of tele-health that sort of directly used or at least affects the doctor/patient relationship, being able to speak to a doctor, for example, over your television or over your phone. There is a lot there, where you can take measurements, as well, and send them to your doctor and they go straight into your record.

What we realized was there wasn't very good support for this other persona, which is equally important in someone's overall healthcare, which is the informal caregiver - sort of caregivers that aren't paid but are typically a friend of the family, a relative like your son or daughter, who would take care of you as you're getting older.

For example, if you're an older who has a chronic condition, very often you'll be cared for by your son, daughter, or close friend, in part. There is very little support in a technology sense for those kinds of people. They're not very well recognized, if at all, by the traditional health system. They're just sort of considered to be these random people who are there but are not really taken seriously or not allowed access to any sort of data or records about the person.

We think that's actually quite wrong. These people are very important in someone's overall health equation. We're building technology to support them in caring for the people that they are caring for. @hand is a project that is kind of a touch-screen system that allows you to record measurements, for example weight or blood pressure, or other sorts of things so that a caregiver can see trends a bit more concretely than just noticing them in passing as they would have done before. They can track other things like calendar events. This can happen over a distance, so there are two screens, one in the caregiver's home, and one in the person's home who is being cared for. They actually participate together with the person they care for, in measuring their vital signs and health parameters.

Okay, am I allowed to suggest something to look at?

Sure, yeah

[Laughs] Okay

We take ideas from anyone, everyone.

It's just something that comes to mind. I find there's a lack of development in communications between people and things. For example, in Vienna, where I used to live, there is a skyscraper type of building that at night has patterns of light movement, which take place across its surface. The light is internally generated as opposed to projected. The pattern, I've watched it many times, seems to operate on a random basis. I felt kind of sad that I couldn't interact with that building. The building should have allowed polling/voting, should have allowed people to design their own light shows to take place on the building instead of being just a set algorithm that repeats nightly, every night, and seven days a week. I would have liked if I could have been connected to the building in order to vote and also see it on the Web or whatever, but I want to see more connectivity between buildings, and me for example.

Yeah

Have you looked at that?

Well, we've done one project, actually. It was a collaboration with MIT, called Urban Pixels. MIT actually developed a sort of - it's like a pixel that's about ten centimeters in diameter. It's like a single light that you can attach anywhere on a building, façade, or something like that. You can put a hundred, a thousand, or ten thousand of them up on a large façade or cityscape, and they will self-organize and you will be able to control them in a simple way so they'll display some kind of data pattern or whatever you want to put on them.

We worked with MIT on that, to sort of do an interactive building façade in Inverness, here, one time. It's quite fun to be able to affect things. I think people were quite interested and had fun having a big effect on a large façade just by sending a quick SMS on their phone. Yes, I agree with you; that's a really fun area to be working in. I think people like to have big effects on things, just by sending a quick SMS or something like that.

In just the urban space, we should be able to interact with it, more collectively, in real time. Urban spaces are often dead, command-and-control type managed. I would just like to see people being able to have an effect - connectivity to themselves and their urban environment and be able to immediately alter it. Light is one way of doing that.

I'll tell you another angle to this. Maybe you sort of feel like you'd like to be more connected to your urban environment, and I think that's certainly the way people feel. You may want to do that for fun reasons, to sort of feel like you're decorating the environment or leaving your piece of graffiti there, or whatever. But, another area we've looked into is a lot of people who live in cities would like to feel a little bit more connected to the country. When you're living in a big city, such as Tokyo or something, you don't really get a sense of the green space that's out there, where the animals are roaming that you're eating at night; where the various vegetables are growing that you're eating, as well. We're looking into ways to connect the city center to these areas in the country, in a way that you can sort of feel immersed in the places where your food comes from.

Lee: It reminds me that often, in my daily life, I notice that something is broken in what I would call the "civic social space". If you're out and about and you notice a bad hole in the road that is destroying car tires, you don't know whom to call and you can't be bothered because there is a lot of friction. You notice a light isn't working down some side alley, or a phone booth is smashed. The thing is; lots of people are seeing these things, they have mobile phones. There seems to be no immediate way of gathering that intelligence, which could be informing a local authority, "Hey, this telephone boot is smashed," or "there is a hole in the road, here". We're not capitalizing on the connectivity we have, today. Do you agree with that?

Stefan: Well, I think you're right, in a way. We're not capitalizing on that connectivity. I think there is also a sort of psychological hurdle there that has yet to be overcome. If somebody did notice a pot hole in the road or a broken traffic light, or something like that, very often I think some people might say, "Somebody else will take care of it," or "there will be a police car fairly soon that will see it and they'll take care of it," or something like that. I think that's kind of the wrong attitude. People have to start taking more responsibility for their own urban environments. The technology might exist to solve a lot of these problems, but the psychological hurdle is what really needs to be overcome there. Would you agree?

Well, I feel if that does exist, that attitude, which does exist, I feel it's not helped because you don't know which number to call. There is a high degree of friction between you, and you don't even know whom to communicate with. I just feel there is a lot of friction that could be smoothed out, so your device can instantly connect via some channel, free of charge, to communicate what is wrong. In effect, you're becoming a sensor for the local government.

It sounds like a great idea for a new service that local governments would probably buy into. If there was a simple phone number or simple button that you could program into your phone or your iPhone that allowed you to send a message straight to the transportation department, or whatever. I'm sure that would be ...

Something of this nature - I'm sure players will come in and begin to sew up that market, to make iPhone apps, which are generic, or fairly generic and be adapted to local governments around the world. I believe that local governments, through those methods, could significantly reduce costs, and also enhance quality of life service, etc., that people can give instant feedback on public services, civic spaces, etc.

You've convinced me, so you better edit out that part of the interview, because everyone's going to get the idea and steal it away from me. [Laughs]

Anyway, more onto you. You have this other project called Mutsugoto?

Yes, Mutsugoto

Can you tell me about that one? That seemed really interesting.

I think, in any project portfolio, of any research lab, you need to have a range of different kinds of projects - some that are near term products that may be commercially oriented, and other products that are a little bit more farfetched or far future, that are more about inspiring people, what's possible with technology, what's possible with communication.

Mutsugoto is really one of those projects. It's more there for the intellectual impact that it can have in the world. It's a communication environment that connects your bedroom to the bedroom of your partner, who is in a different location.

[Laughs] I will not repeat my previous question, at this point. [Laughs]

It could be - we've often talked about it as connecting the bedrooms to long-distance partners, people who are in long-distance relationships. It could also be used between two kids. It's nothing really sexual at all. It's not in that domain.

What we're trying to do is to create something that is a little bit different from the mobile telephone. We typically use the mobile phone for everything; you talk to your lawyer, to the pizza man, and you talk to your significant other on there. It doesn't make sense why we should use the same exact form of communication for every type of relationship that we might have. In the same way that it doesn't make sense that we would use the same exact chair for all of the purposes that you would want to sit down for, you have a different kind of chair for deskwork, one for watching TV, or one for eating something.

What we're proposing here is we need a little bit more variation in the types of communication technologies that are out there, that are for different purposes. So, Mutsugoto is one that was meant to connect bedrooms and beds. It's kind of like a collaborative drawing system, where you wear a special ring. You move your hand around your bed, or you can lie on it and move your hand around your own skin. The computer will project lines onto you, where you are drawing, at the same time that those lines are transmitted and drawn on the other person's bed, somewhere else in the world. It can also respond. It can sort of draw at the same time as you, so it's kind of a collaborative drawing system.

If you move your drawing in the same way as your partner, at the same time and in the same way, the color changes. The lines that are drawn turn red, as opposed to white. That's a sign for you that you are in synchrony, at that point, that you are making the same movements as your partner, in another location.

We were really looking for something that would allow a different kind of communication, not the business-like communication that telephone is very good at doing. We wanted something where you have gesture sort of reflected more visually and you could use that to express intimacy in a different way, or to sort of make fun pictures, play tic-tac-toe, or do other sorts of things.

Okay, that's very interesting. I really agree that it is strange that we're using one device, in particular one mode of communications, often telephony, for everything that we do - for our personal lives, for business contacts; there is little differentiation in the tool. The example you gave reminded me; I don't know if you're aware of it, but the plastic USB plant you can get, which springs to life when your significant other comes online?

If you're referring to - there have been a number of flower and plant related sorts of displays. We worked on one in my earlier group in Media Lab Europe. Yes, there are different ways of expressing someone's presence than just having the Skype icon light up on your screen. That's certainly the information you need but you might want to have something that's a little bit more reflective of that relationship and the importance of that person in your life. It may be something you want to carry around with you as you go around without your computer, or maybe something that's a physical plant that's sitting on your desktop. Those are just variations on the theme of the Skype icon that lights up, that are more physical, and perhaps, more meaningful to people, to represent their partners.

One of my biggest disappointments with the communications industry has been the lack of development of presence. It's still where it was ten or fifteen years ago, with online/offline or busy. It's very disappointing. Why can't we wear a ring, for example, and when we think of our significant other, we squeeze the ring and it moves a kinesthetic feeling to their hand, so they instantly know you're thinking about them?

When we communicate, every time we communicate, it's with an intention to convey something. Instead of having to call and speak for twenty minutes and trying to use tones to say, "I like you," a two-second squeeze of a ring on your hand that acts on a ring on their hand may achieve the same thing. Don't you feel that presence just has not been tapped? That's just a phenomenal market.

Absolutely, I totally agree. I think there have been a lot of concepts and prototypes developed, and different kinds of things like that, for example, hug jackets. You can hug yourself and the jacket in the other location will sort of tighten up and your partner will feel a hug there. There have been a lot of concepts like that developed, but very few of them have been commercialized as of yet. I think some of them are in the pipeline, but others of them are probably stalled because of technological issues.

For example, connectivity - how is it going to connect? Is it going to be Wi-Fi or Bluetooth? Are you going to have to charge it? Is it a piece of clothing? Is it going to be washable, with a module that comes out easily? What's the charging system? Is it going to be charged as an SMS message or some other sort of charging paradigm? There are a few things that I think haven't been worked out. As concepts, they look really interesting and people kind of express interest in them, but then when you get into the nitty gritty, there a few more things to work out than perhaps were expected. I think we're going to be seeing more and more of these types of things in the next few years, definitely.

So, there is plenty of untapped money out there. I won't even say in my opinion, because it's absolute fact; humans have a need to communicate, to convey signals, etc. to each other. Anything that improves the efficiency, the effectiveness, is worth money. Often, actually paying for communications conveys a lot of the signals you want to send anyway, the fact that you're being charged for an SMS.

Sure, the fact that you're actually spending money to send these types of signals to your girlfriend, boyfriend, or whoever it is, indicates to them that they're worth money, that they're worth that expenditure.

Yeah, so free is not always better. If I can mention SMS for a second, short messaging added another mode of functionality into the communications landscape. What was critical about that, was it was packaged and distributed extremely well so it was in every GSM handset, and every GSM network. You didn't require software to download. It was enabled out of the box, hardwired to the device. Now, the SMS market, and don't forget; SMS is something exceptionally simple, is a hundred billion or so dollars a year, which is bigger than movies, and music and the game industry all put together. I strongly suspect that operators could get lucky again by hardwiring, yet again, at the point of manufacture, another modality into devices.

I totally agree with you on that. I think it's very interesting to study the history of SMS, how it became popular, and how it was almost designed into the GSM standard, as an afterthought. It was a new way to communicate that didn't exist before. I'm positive that there will be additional venues for communication that are discovered like that, ways that we would like to communicate or times, places that we would like to communicate that we're not right now. Someone is going to discover those and I'm sure will take full advantage of them.

[Laughs] I suspect there's another hundred billion dollar a year market just waiting to be tapped. I like the experimentation you described there. It helps uncover these things. A problem I see is the Internet is given the perception that so-called "free" to the consumer is best, but actually, in the realms of communications, as we've previously mentioned, free is often far from best, for many reasons, which I won't go into. In full intimate communication's case, the receiver, just knowing the sender is paying, conveys appropriate social gestures and signals.

I'll give you an example. My teenage daughter has access to free communications. The people she hangs about with have all got broadband at home. Even when she's at home, she'll often choose to force boys she does not know, via her cell phone. It's a way for her, I think, to determine their sincerity. I notice she'll force them through the cell phone for six or so weeks. Then, if they become in her hub circle, they end up getting added to her Skype buddy list and they're permitted to have free communication. She forces them through the operator tollbooth. I think money or at least an abstraction of it is fantastic for filtering or conveying importance or urgency interest.

I see your point there, with the money flow, but actually, I don't think that is the preferred way of demonstrating someone's importance to you. At least, maybe that's not the way I would have chosen. I think that in today's day and age, time turns out to be much more important than money, in terms of expressing the importance of something.

I can tell you that from my life, right now, my time is much more valuable than the amount of money I'm spending on call or something like that. Perhaps I'm lucky to be in that position or perhaps not. I certainly don't feel, necessarily, lucky all the time.

For me, if I received a physical letter from someone, something that someone sat down and wrote out, spent the time to physically address, maybe drew a little picture on it, put a stamp on it, took it to the mailbox to send, and that kind of thing, that investment of time, to me, is much more impressive or demonstrates my importance to them in a different way than perhaps the fact they spent on a phone call for me. It's different for different people. Different people respond to different kinds of investment and different kinds of things.

I quite agree with you. That's why we need more sociologists looking at the communications space.

I will insert, for a plug, our little previous conversation about what's the next thing that's going to make zillions of dollars, just like SMS did; we're actually working on that theme now, in Distance Lab. We have a few ideas that could be big game changers, which I'm not going to talk about in the interview. If your listeners are interested, they can contact me and I'll tell them more. [Laughs]

Okay, that's great. I don't want to go off topic. I have a habit of doing that, especially on the weekend. We have a depressed economy and a lot of companies I've been speaking to, recently, and in the communications space are actually accelerating because they're helping drive efficiency, which is critical. They're helping save money. Not only that, but I feel there are massive, untapped markets in communications. Communications, today, is so broken. Even just fixing it is going to make a lot of money, but adding in other modalities to be more sensuous, to give a better sense of presence of others, is again, more money. I just feel there is so much opportunity out there and the communications space has been stagnant for so long.

I should probably ask what is exciting you about your work at Distance Lab? Where do you see opportunities? That's a final question since we've been on the call for quite a while.

Well, just to respond to your statement, I totally agree with you, again, that we're seeing a lot of very interesting development. There is still a lot of opportunity in the area of communication technology. I think the fact of the matter is that the economy might be depressed, but people still want to communicate as much as ever. That's a simple, human fact, and that's not going to be changing any time soon.

It might be that your company doesn't want to upgrade their phone system until a couple of years later, so maybe a telecom company isn't going to make as much money for a little while, but in terms of communication traffic, I don't think there is going to be any slowdown in that. In fact, we'll probably see an increase, certainly, because companies are going to be thinking about ways to be more efficient, ways to use video conferencing or tele-presence technologies. If anything, I think the communication industry could be set for further boom.

I think in Distance Lab, we're very interested in figuring out how people are going to communicate in the future. We have certain things we use quite globally now, like email, mobile phones, instant messaging is now quite a big thing, and video conferencing on the desktop. All of these are very generic in a way. As I said before, we often use the same email system or the same mobile phone to be talking to our lovers and our parents as we do to talk to our lawyers and our pizza man. It doesn't make sense why that should necessarily be. We don't really have as much of a range in communication technologies as we do in furniture, food, and that kind of thing.

At Distance Lab, we're very interested in this theme of what I'm calling "slow communication," which is kind of picking up on themes from the slow food movement, which your listeners might know about. Slow food is really a reaction to fast food, in that fast food is served to you in a very robotic way and it's not necessarily healthy. You can be distracted by any number of things while you're eating it. Slow food is about more quality, controlling the environment so you have a very good experience from beginning to end. It's about the relationships with the people that you're dining with, the quality of the food and not being distracted.

We're just extending those ideas into the design of communication technologies. Can we create something that's different from the mobile phone? The mobile phone is kind of like fast food. What's the slow food of communication? We're controlling the entire environment. We're reducing distractions. We're enhancing your relationship. We're tailoring it to the specific type of relationship that you have or the specific kind of thing you want to get done in the communication.

That's where we think the most interesting action is going to be. We know how to send bits around the Internet. We know how to send audio and video around the Internet, pretty well nowadays. If you increase your broadband width, you can send even more bits, more video, and more audio. That just really leaves the problem in design. How are we going to design new communication technologies to take advantage of all these new and different ways that people like to? I'll leave it at that.

Okay, we haven't yet seen the long tail of communications. In my mind, we're just coming out of what I would call the "Henry Ford" stage of communications; where you can have any color you want as long as it's black. That's why I'm extremely interested in the work of the Distance Lab.

On that, I would like to thank you for your time. I appreciate our "call" was free, but the fact that you are giving me your time is a great social signal that meant something. Communications establishes and nourishes relationships and the signaling on this one, by you giving me your time, has initiated one. I hope to be seeing you soon, at the March 2009 Emerging Communications Conference.

Yes, I look forward to it. Thanks very much for having me.

Thank you very much.

Last week I had the pleasure of interviewing Jan Linden via Skype. GIPS became famous by providing the Codecs which originally powered Skype. These Codecs were a major component to Skype's success not only because one was wideband but because they were "smart"; rather than just coding and decoding audio, they were creatively engineered - particularly the wideband commercial Codec - to mitigate the problems of a less than ideal underlying network (i.e. the Internet).

Jan provides us with an update on what GIPS has been doing since.

You can download it as a 96kbps MP3 here (16 meg, 22 minutes).

Additionally the full transcript is below. To distinguish between us I've indented Jan.


Transcript

Good morning, Jan.  How are you?

I'm good, thank you for having me.

Hey, welcome, especially since Global IP Solutions is a Gold Sponsor for the forthcoming Emerging Communications 2009 Conference.  Sponsorship is very appreciated, I think by everybody, because I think everybody realizes that without sponsors the tickets would be astronomical.  It would be double because of the venue prices. 

I guess, as a first question, what's best to ask is why GIPS sponsored?

That's a good question.  We look at different opportunities and this is definitely very different from your typical conference in this space.  It's all about the new stuff, what's exciting.  That's where we want to be because that what we're trying to really focus on being, at the forefront of what's happening.  This fits hand-in-glove for us. 

Excellent, so GIPS became famous because it provided the Codec, which powered Skype originally, although that's been taken in-house.  GIPS provided the wideband codec, a very smart codec that deals with packet loss, etc., exceptionally well.  The Codec still powers the likes of Gizmo.  We've not actually heard from GIPS in a while now, so I'd like to get a handle on what Global IP Solutions has been up to.

Sure, first of all, we continued in that direction.  We added many more customers, like Gizmo, but also IBM, Oracle, Google, AOL, Yahoo; the list is long, anyway, similar to Skype-type of solutions.  After that, we focused a lot on a couple of different tracks.  One is mobile.  The other one is video.  We realize that video is a big part of the future, so for the last four years we have done a lot of development in video and added customers on that side.  Then, also a little bit more on the enterprise side, so the Cisco's of IS, etc.

Most recently, as I mentioned, some mobile stuff.  One of the latest additions to our product portfolio was a voice engine, as we call it, for Apple iPhone, which is obviously a very exciting platform.  That's actually, what I'm going to talk about at eComm, later.

Okay, so in relation to the iPhone platform, what exactly are you guys offering application developers?

What we do, we are an enabling technology company.  We don't develop applications that you will see.  As you mentioned, we enabled Skype to get off the ground, and many others, by providing the media processing technology that's necessary.  The idea is that if we do that, the application developers can focus on building cool applications. 

It's very exciting to be part of this by providing very important building blocks for nice and cool applications, in this case, voice and video applications.  We can focus on getting the high quality, regardless of what network conditions you have, what device you're on.  We focus, pretty much, solely on that and therefore that's why you can get the good quality.  We give the application developer a toolbox, if you will, to add voice and video into their applications.

You guys are still engineering in what I'll call the Codec space, in terms of voice and codecs.

We are, but video as well.  We do a little bit about the actual codec.  Its things like echo cancellation, noise suppression, things that make the whole experience better.

Okay, so these are what you would term proprietary codecs, i.e. commercial codec development and then you have some kind of pricing scheme, royalty scheme, or whatever, in order to get that into developers' hands.

Yes, that's correct.  Proprietary is only part of it, I mean, we're very focused on standards.  We make sure that everything we do can interoperate with all standards.  We support, pretty much, every single standard Codec that's out there.  But, for many of our customers, there is no need to go license an expensive standard Codec.  They can use ours that are less expensive because we don't have to go to ten different companies and pay license fees.  The idea is that we provide a library you can integrate into your application and you pay us a license fee for that. 

A library of Codecs?

Codecs and other functionality, voice and video functionality.  It includes, as I mentioned, echo cancellation, file handling, a lot of things, everything you need to do in the media processing part.

Okay, so are you able to give me some kind of idea what value proposition you're giving application developers?  People could use a free codec, for example, the iLBC codec, or Speex.  What is the value proposition that GIPS offers application developers?

That's a good point because it's definitely possible to do things free.  Usually, when there is something for free, you're giving up something.  We know that.  You mentioned iLBC.  That's actually a Codec that we developed and made available, for free, to everybody.  We wanted to make sure there was a good codec available, for free.  But, on top of that, you need more things.  The value proposition is really to provide a quality level that you can't get out of the free stuff.  There are many reasons why we can achieve that.  The main reason is, of course, the amount of work we put in to do that. 

We also make it possible for the developers to really focus on their strengths.  If you get the free stuff, there is always something missing, and you need to add something.  We give a complete media processing solution, including things like handling the operating system, the sound cards on device, which is actually a very difficult task to do that, especially while maintaining good quality and low latency.

The platform you seem to have focused on, at least lately, has been the iPhone platform.  What is it that GIPS is offering on the iPhone platform?

The iPhone, obviously for us, as with everybody else, is an exciting platform.  It's really excited a whole mobile development area because it's a platform where you can do more things than in many others.  It's easier for people because it's similar to the Apple Mac development. 

We focused on it because there is a lot of excitement.  We see what we fit well, because again, where the coolest applications are developed, that's where they need our stuff.  One thing to mention, though, is that even though it's an exciting platform, there are some issues around it, in terms of not everything is available that you would like.  For example, when we want to add video here, because obviously, video conferencing is interesting, you can't get access to the video stream coming in from the camera, into the application.  These are things that it seems Apple is opening up one by one, but there are issues like that.

Okay, so if you guys can, at the moment, enable high quality audio on the iPhone, which is surprising, because it has a limited processor...

Yes, that's one of our focus things, to develop solutions that work, regardless of what type of processor you have, so we have solutions all the way from high-end PC's, and there you can do HD video.  You can't do that on an iPhone, but you have to limit yourself to what you can do.  You can do very high-quality audio.  You can actually do video, as well.

So, the iPhone ARM processor is good enough for processing quality, real-time voice, then?

Absolutely, if you have well optimized for that specific platform, you can't just take a standard PC application and port it.  You have to put a lot of effort into optimizing it for the ARM processor, which is something we've done.  That's one of the reasons why it sounds good and doesn't take all the CPU of the machine.  You still have plenty of CPU available, actually, when you're just running voice.

This is available today, for application developers on the iPhone.  Why are we not seeing Skype-type clients on the iPhone?  I haven't seen any that look any good; have you got customers who are doing this on the iPhone?  I don't know.  I'm a bit confused.

I think it takes time to get everything right.  We have several customers that are in the process of doing that, right now, Nimbus is one example.  There are some others out there.

Who's an example?

Nimbus, and there are some others that are doing applications.  I agree with you; not all of them are really good.  Some of the limitations are because of limitations of the SDK on the iPhone, but I think we have solved more than most people, in terms of getting this to work really well.  We're seeing a number of customers that are just launching or in the process of launching applications on this platform.  I think, come eComm, that we will probably be able to talk about more of those.

Okay, hopefully all the iPhone users will have a quality VoIP client, then, in the coming months?

That's what we hope and believe.  It's definitely possible with what we provide and what's possible what to develop on top of that.

Okay, with the iPhone, let's say you're not home, you're not using a Wi-Fi, and you're using 3G or 3.5G.  What's the quality like?

Actually, Apple doesn't allow you to use the 3G mostly, for this.  It depends, of course, on service providers.  That is an issue.  Otherwise, in general, we have similar solutions for other devices that do support 3G.  Our experience is that 3G - the biggest issue you will have is that you can get latency that is longer than you used to if you use the Wi-Fi.

And this is GSM-based 3G that you're speaking about?

Yes, because obviously, in Europe, 3G is much more built-out than it is here in the States.  We have much more experience of people actually using 3G for VoIP over there.  Here, myself, I use my Wi-Fi at home.  That works very, very well.

Have you tried over EVDO in the States?

We have done, not ourselves, but customers have done trials with that previously.  Again, the same issues with delay, an EVDO can also be bandwidth limited.  In essence, there is no difference for us.  We send packets, we receive packets, and we have to...

So, it's not optimized specifically to EVDO or 3G or HSDPA?

No, what we have is some technology deep inside of our engine that adapts very quickly to the type of network you're on.  From the high-level standpoint, you don't see that, but down in the middle there, we have something that quickly adapts to how much jitter there is in arrival times of packets, how much packet loss there is, and tries to compensate in the best way possible for that.  Therefore, we don't have to have a specific optimization for a certain network.  We have such a quickly adapting technology, that it will do that on the fly, which is very powerful if you are talking about fixed-mobile convergence, for example, when you switch between different networks.  You need to be able to quickly adapt to a new type of network, as well.

Okay, the FMC is an interesting point.  Obviously today, you have the likes of Truphone.  Truphone, today, will turn your iPod into a phone and let you do VoIP calls, or your N95, and it will use Wi-Fi and it will also use 3G.  So, do you feel that you're behind?

No, no, when it's available we offer the same as they do.  There is no difference in that perspective.  For example, on the iTouch, our voice engine runs there, as well.

You're not offering applications.  You're only there to aid application developers, correct?

That's correct.

You said with the iPhone, with many of the carriers you can't, or I don't know what you mean by can't.  Maybe you just mean in terms and conditions that you can't run the VoIP client.  Is that a terms and conditions thing?  I can't see a technical way of restricting it.

Actually, there is a way of restricting it for VoIP.  It's possible and they do that, at times.  Of course, even more prohibitive at times, are just fees in terms of how you pay for your data network.  There are many reasons why it's not always possible, but it depends on the scenario.  Apple has, on the iPhone, specifically made sure that you shouldn't compete with the regular ...

But, when you say Apple makes sure, do you mean contractually or in software?

In software

How do they achieve that?

By not giving you access to that part of the network for those types of applications.  It's a little bit complicated and it's changing by the day.  Next week it could be a different story.  It's been one of the struggles for people developing applications for VoIP on the iPhone, itself.  Of course, I'm not blaming Apple in any way for this.  I believe that's typically a part of the carrier scheme, here.

Okay, so are you saying that there is a lot of resistance to running VoIP applications on mobile phones coming from the mobile operators?

Yeah, there is, but it's also changing.  They are all realizing that they have to kind of jump on the train as well.  I think a couple of days ago; Verizon stated that they would be all VoIP for all their residential services.  We hear that there are a lot of 4G trials going on, where it's all going to be IP communication for the voice, as well.  Right now, there is definitely some resistance, but we also see that it's opening up.

Okay, I don't know if the Verizon one is quite true, but I suspect it's not.  Even if they did, even if you take the 4G scenario, there is a big difference between their VoIP and your VoIP, a third-party VoIP.  One will be acceptable and one won't.  I'm just saying the environment you must see is difficult, shall we say.

Yes, I agree with you, Lee, definitely not, just because a VoIP channel exists doesn't mean that it's easy for a third party.  They still want to have that control.  I think it is still going in that direction, that it is opening up.  There are other ways to make money than blocking out.

Could I get you to comment on video, generally, for mobile phones?  What do you see specifically in the iPhone?

Video is definitely a very interesting, but also schizophrenic, if you will, topic for mobile.  Depending on where in the world you are, there is very different up take on that.  In parts of Asia, there is a lot of video communication, between cell phones, going on, using a direct link.  In Europe and the U.S. there is much less of that.  But, it's definitely a very big interest in finding the right way of including it.  I think that's where we really try to focus, not to provide a pure voice or video solution.  That's not really the exciting part.  The exciting part is when it gets integrated to other applications and solutions, like social networking, gaming, collaboration, etc.  When you find a way to put it all together, that's when it gets exciting.  I think people are thinking in that way.  I think that's what's going to make the video experience really happen, and generate the market we think is there but hasn't really taken off, yet.

When do you think that will take off?  I'm not asking you, hopefully too hard, to look in a crystal ball, but you must have a feeling.  You're probably thinking in six month's time.

I think we are definitely seeing some of that happening, slowly.  Of course, it's hard to predict how much the economic downturn will affect any of these things, but I don't think it affects the development all that much.  It's more a matter of if it can be presented in the right way for the mass market.

On the iPhone, you mentioned that as well, we still are waiting for access to the video feed there as the last piece missing for us to be able to offer a video engine for the iPhone, ourselves, and then when have that you can move forward.  I believe, as you said, in about six months you will see things.  I think it's more than a year before you will see any significant volumes, though.

Okay, I'm being optimistic. 

I think that's your job, probably.

That's my job, to be optimistic.  [Laughs]  I just want to see a 'new world order', we'll call it. 

Don't we all.

Yeah, a new world order would be good for 2009.  [Laughter]

Yeah, let's try that.

[Laughter] Let's try that.  I wonder, if you guys have an API, and so on, I assume, or how do application developers work with your solutions?

We provide them an API with all sorts of functionality that they need to set up the call and influence what codec you're using, what settings you're using, etc.

Okay, so you guys should be running a tutorial at eComm.  We've been setting up tutorials as 7:30 to 8:30 in the evenings, and there are quite a few set up already.  Should we chat about that after this call?

Absolutely, let's do that.

One last question.  You're going to be speaking about enabling voice and video, with respect to the iPhone, the challenges.  Can you just give a brief outline of what you're going to be speaking about?

I'm going to talk mostly about the technical limitations we talked about.  I mentioned a couple, already, accessing the video cameras for the applications.  You can actually do two-way video conferencing.  There are some issues, in terms of the API's for voice play out and recording, that are very different from the regular Mac, which we have figured out how to work with.  There are challenges in terms of file access limited the application sandbox.  Maybe the biggest thing is this issue that you can't run applications in the background on the iPhone.  All of these things I'll talk more about and especially what has happened lately; these are constantly evolving.  Apple are coming up with new resolutions to some of them.  I think that's an important part of what's going on, here.

Okay, I very much appreciate you giving me a view of what GIPS has been up to.  I look forward to hearing about the engineering you've been doing around video, and in particular, the iPhone platform, and the challenges you've been overcoming there, to allow developers to have high-quality audio and video, particularly with the iPhone.  I look forward to that and I appreciate the time.

Thank you very much, Lee.  It was a pleasure talking to you and looking forward to seeing you soon.

Thank you very much, bye.

Call for Launch Slots

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Last Thursday I had the pleasure of interviewing Andreas Constantinou via Skype.

You can download it as a 96kbps MP3 here (27 meg, 38 minutes).

Additionally the full transcript is below. To distinguish between us I've indented Andreas.


Transcript

Good morning Andreas, how are you today?

Good morning, Lee.  I'm very good, thank you.

You are working for VisionMobile.  Could you say what you are doing there?

I'm the Research Director at VisionMobile.  We are an analyst firm doing a variety of things such as research reports, workshops, advisory work, and what we call "Market How Maps".  Basically, we specialize in mobile software, ecosystem strategy, services, open source, and definitely, I look into the forward-looking areas of the industry.

Okay, I took a quick look at the VisionMobile website.  The first blog post that hit me was "Network as a Service" (NaaS).  Could you tell me something about network as a service?

It's a very hot topic, that particular one, because it's all about reselling assets that operators have, which are mostly under exploited.  These are assets; like subscriber information, contacts, social graph, information about usage building, and what have you.  And secondly, services; exposing the likes of SMS and billing and chat and voicemail and MMS and any sort of operator service, to the mass market of developers.  That's the basic concept.

The reason why it's interesting is because it's really under exploited; i.e. there are a lot of developers and third parties who would like to tap into information about the user, such as their social graph, like ability to send messages to the user through a variety of means, voicemail, SMS, etc.  But, so far, that kind of access is limited to the top of the pyramid, meaning there are very few service providers who have aggregator agreements or very big...

Okay, so it's not available to developers on mass.

Exactly

The thing is, this notion of turning the network inside out, pretty much like Amazon has done with their infrastructure, has been on the go - that's a Telco 2.0 meme.  I know Martin and I have been speaking about that for many years, turning the network inside out. 

But the actual reality on the ground, even if you just took one core piece of information that operators have in their network, which is location, you see that they've done nothing, pretty much, with location, let alone other things.  Now, at the last eComm show, you saw Fire Eagle from Yahoo, which at least has some teeth to it.  When it comes to mobile operators, if they can't even expose location, this is just blue-sky thinking, surely.

I would say that they can expose location but for various reasons they've been very slow.  You're absolutely right; there is little out there.  In the U.K., there are location aggregators, but it's extremely difficult if you're a small developer house or a one-man-band developer, to go and approach operators.

You used to do it by aggregators, and location particularly, is on a per request charge.  It's very expensive to scale.  This is changing via what's called NaaS, meaning Network as a Service, where this is sort of moving from the top to the bottom of the pyramid.  It is happening over time, especially during 2007 and 2008, we have seen the Orange partner effort to launch many more API's, including location, Vodafone Betavine release, what is practically six API's, I believe excluding location.  There is BT Web21C, which also has five or six API's.  I think we're seeing the beginning of this NaaS market.

Okay, so the BTCN doesn't give you location.

I don't think so, no.

The Vodafone Betavine doesn't give you location, you said.

I have to double check, but I don't think it does.

Okay, does anybody give you location?

Yes, I can confirm there is now location, as it stands, on Betavine.  Orange does have a location API in what it calls "Instant API's" but it's in an Alpha stage.  It's likely that it's only available in Orange France, as well, as most Orange API's are.  In short, a location reflects, pretty much, the status of all other API's, which is that of a nascent stage, with a lot of teething problems.

Yeah, but this is 2009 and we were talking about telecom API's back in 2005, pretty strongly.  I must admit; I don't have a great deal of enthusiasm that anything quick will happen.  I think what we're doing is hitting on a key issue, which I'm sure you'll accept, and that is the lack of innovation.  I think you're in a position where you could comment on the lack of innovation in the mobile industry.  Firstly, do you agree that there is a lack of innovation, and if you do, why do you think there is a lack of innovation?

There is a lack of innovation, primarily because operators who control most of the money, around seventy percent of the revenue in the industry, and the delivery of services are the worst innovators in the industry.  They're extremely slow.  They usually have an ivory tower attitude.  The operator organizations, typically, descended from a network-centric, a closed network view where everything is tightly specified and controlled.  The lack of innovation is because there wasn't the opportunity for the bottom of the pyramid to engage and deliver services, whatever these are, voice, or data, on mobile phones.

What changes do you see?  I seem to hear a hint in your voice that the bottom of the pyramid, as in the mass developers, every man may have opportunities.  Where do you see this opportunity, again, assuming you do, but your voice seems to indicate that you do?

There is definitely an opportunity, but it's one that's going to be unfolding very slowly.  I totally agree with your criticism of the lack of innovation, particularly the slow evolution of this NaaS market.  API's are becoming available for the bottom of the pyramid, but I don't think we'll have reliable cross-operator location, for example, provided before the end of 2010.  Even that might be ambitious because there is the issue of each operator providing it independently, and secondly, someone like the GSMA having a sort of way to abstract these APIs, so essentially, you can access any subscriber, not just a single operator subscriber.

GSMA does have an initiative in place, but judging by the network speed of how services have evolved, I think NaaS will also be evolving in network speeds, and not web speeds, meaning telephony network speeds rather than Telco 2.0 speeds.

Okay, so you don't sound overly optimistic of the fast pace and innovation in mobile.  Am I correct?

Yes, you are correct.  The only place where there is innovation is where there is an "open platform".  I hesitate to use the word because it's over used.  In platforms where you have a couple of things, one is an open access to API's, whether these are network or device API's.  Secondly, there is an open route to commercialization.  That means ability for any third party, big or small, to take their service to market.  These two examples - considered the applications developers have been able to develop on Symbian systems since 2000, until recently.  Then, consider the commercial route to market that the likes of the Apple's App Store have established.  From 2008, with some exceptions, developers have had open route to market, again, from a commercial perspective rather than just API's.

Okay, so regarding application developers having a route to market, you've got the App Store.  You have Google's Marketplace.  Are you aware of cCommunity, with T-Mobile?

Each operator is trying to do their own mobile applications store.  We've done some research on this topic.  We published an article two months ago, called "The Mobile Application Store Phenomenon," where we looked at two things.  One was a side-by-side comparison of five vendors of mobile applications stores.  We saw the Apple App Store, Qualcomm Brew, Nokia Download, Handango, and GetJar. 

We also looked at what is it that makes a mobile application store successful.  What is the recipe behind a successful mobile application store, like Apple's App Store?  We came up with a five-point list, which you can read on our article, rather than me going into a discussion here.  It's a rather complicated solution to develop, for any one player, whether it is OEM or operator.

Okay, so we've had pessimism of innovation in mobile, and probably pessimism is reality.  Where do you see the opportunity, where is your hope?  You can say "none" if you like.  [Laughs]

I'm an optimist by nature so I tend to gravitate towards optimism.  I would say this optimism is in the resolution and slight convergence of choices for delivering services, and developing handsets, meaning it's easier to develop services - let's say, since 2008 onwards, and certainly moving forward.  The choices for developing smart phones today are clear, S60 or Android.  The choices for deploying services are clear, Java for mass market or if you want to have a quick demo, use Android or the iPhone platform.  The choices for [13:01.0 unclear] won't change.  There was a lot of debate whether [13:05.9 unclear] would be around.  They are around; they will be around for a long time. 

I think we have some clarity and consolidation into the multitude of OS's.  The choices a developer or an OEM had to make or had to decide upon, but nothing is clear.  So I look at this with optimism.

So, in summary, what's your optimism?

In summary, both mobile application developers will have a gradually easier way of deploying applications and services, mass market.

It doesn't get me that excited.

Well...

It sounds rather glacial.

It is exciting, only if you look at it from a high level.  You won't see a difference from one month to the next month.  The immediate differences you have seen is anyone who wants to demo something to a large audience, now goes to iPhone or Android because of the reasons I mentioned earlier.  There is a difference there in going to market. 

I know you're trying to play all even, and so on, in the way you're talking about platforms, but what you've just said there is people want to demo something, they will use the Google Store of they'll use the iTunes Store.  That, in itself, seems to be saying that the other players are screwed, going forward.

Nokia Download, is it any good, yes or no?

If we're looking at mobile application stores, Nokia Download is pretty much a disappointment, both for Nokia and a failure for everyone else.

So Nokia Download is a failure for Nokia.  Why is it a failure, briefly?

Briefly, because they failed to get four out of five ingredients of the mobile application store right.  These ingredients they failed to get are decent revenue share for developers, other than premium SMS, distribution is partial.  Provisioning on handsets is again, partial and it's only on a case-by-case basis, depending on which region the handset is sold into.  On-device discovery doesn't have a global search.  It's split down into shop and shops.  Even Nokia's own applications are hard to find.  There is no transparent way of submitting your own applications.  Pretty much, everything that the iPhone App Store got right, Nokia Download got wrong.

How could Nokia get four out of five wrong?  They had an example to look at.  They had the iPhone Store, iTunes.  How did they manage to get four out of five wrong?

If you look back, Nokia had Prime Minute up until June 2006, where it replaced this online marketplace with Nokia Content Discover (NCD).  Essentially, back then with Prime Minute, you had the very well designed, well-structured marketplace for submitting, pricing, and distributing your applications.  But that was network only.  There was no on-device storefront. 

They replaced that with NCD, which was an on-device storefront.  It was the wrong decision to start with - it all started back then with the very wrong decision to shut down Prime Minute.  Back then, the decision was, I believe, because they were having a hard time selling Prime Minute to operators.  Then, pretty much no one, perhaps with the exception of Qualcomm Brew, had a control of the entire service delivery chain, meaning controlling everything from the marketplace, to the on-device storefront.

Nokia, I think, got quite a few things wrong.  The App Store wasn't around to copy back in 2006 or 2007.  Still, they could have done things much better than they did.  It was just a quick and dirty solution.

We're now in 2009.  You would have thought; they've got something to look at.  They could have achieved something, by now.  It's just a case of them falling further and further behind, surely.

Yes, I think they will have admit to that themselves.  I remember being on an analyst call with Nokia and hearing one of their VP's say, "We definitely have a lot of things to learn from the Apple App Store". 

Okay, so you have a computer manufacturer, Apple.  You've got an Internet search engine, Google.  Both have demonstrated to the mobile industry how to do things, in terms of offering applications all the way through to delivery.  Would you agree that a computer manufacturer and a search engine, people from outside of the space, are actually leading the way, leading the march?

I would agree about Apple; I wouldn't agree about Google.  Google, I see as an advertising company, whose inventory is delivered by search mechanism, a very good search engine.  But, the Android market has still not proven itself.  It's very, very far away from the numbers that the Apple App Store is making, in terms of revenues and downloads.  It still hasn't proven itself, in terms of the success of Android, whether it will present the single platform versus a fragmented platform for developers.  We haven't seen any significant innovation in the industrial design.  So Google still has a lot of things to prove in the mobile industry.  Apple is far more of a role model.  That is because it is a single player who dictated to operators how it was going to run things.  It was able to control everything from top to bottom.

In saying that Nokia Download was a failure, out of whatever five metrics you used - four out of five; it was a failure.  How does the Android market compare?

It still is somewhat early, but from the parts of this mobile application store recipe that are clear, they have some elements they've got right, which is on-device discovery and provisioning.  Because of their lack of handsets, it's unclear how distribution will work, whether or not the application developer will be able to distribute to all Android handsets or if there will be some OEM restrictions.  It's unclear whether operators who launch more devices like the G1 will have any additional certification requirements, which creates the problem that Brew is facing, like having very stringent certification requirements.  As to a centralized billing, I cannot offer you an opinion at this stage, simply because we have not studied the particular solution in depth.

Okay, so we're beginning to see a shift in the mobile industry, in terms of power, the balance of power.  Would you care to describe how the balance of power is shifting in the mobile industry?

Absolutely, you have to look back a few years, as far back as the early 1990's, when there were the first handsets.  Where you would see the IBM model of the early 1980's, meaning the all-in-one company, which integrated everything from hardware to software, to logistics, the whole thing.  It was a vertically integrated model, similar to the one IBM had in the early 1980's. 

Over time, this has moved to a horizontal model again now that is now changing.  Trying to answer your question a bit more directly, the power now is moving back into a vertical arrangement, to the players who can put together all the necessary elements from handset, including hardware and software and the UI, to the services and the developer SDK and platform.  The players who have the resources and the ability to put together both access to these services and the handset, under one roof, we see a consistent consolidation of power along these vendors. 

Let me give you some examples.  These are vendors like Qualcomm, who controls everything from hardware and IPR, to service delivery enablers.  You have Nokia, obviously, now all on Symbian and via the Symbian Foundation has access to the complete stack.  It owns Qt for service delivery.  It owns - has SDK's go to market routes etc. 

How does Qt, Qtopia enable service delivery?

Qt is very interesting.  In fact, I would say if Qt knew that it was the only choice for Nokia during the acquisition, it would have made a much higher sale price, rather than the one hundred or so Euros that it made back then.

Hundred Euros?

Sorry, hundred million Euros.  Qt will be used for Nokia to deliver its own signature applications, its own uniquely branded, unique flavor applications.  Secondly, its Ovi services.  The reason I mentioned Qt and Trolltech's unique position is because it's the only application environment that is rich enough for someone to write core applications on top and it can be ported on both mobile and PC and MID or non-mobile environments.  It's exactly the solution that Nokia was looking for at that stage, as I said, for Ovi and its own applications.  There is no other type of solution that allows Nokia to port its services and applications on such a wide variety of handsets. 

Can you pass comment on Ovi?

At this point, Nokia is the only one with enough cash creating profits to invest massively in services.  Ovi, I think, is just unfolding.  There are a lot of deals happening with operators, with brands, with service providers behind the scenes.  I believe it's the cornerstone of Nokia's transformation into an Internet company, meaning a way from a manufacturer of handsets into an Internet company, which is providing services across any handset, competitor handsets included, PC's, home, the living room, etc.  As I said, we've only seen the tail of the lion.  We haven't seen the lion, the majority of the power of Ovi and the services that Nokia is building behind it. 

Okay, if I look at Ovi website at the moment, it reminds me a little bit of the Apple website they designed.  It looks a bit like MobileMe, some of the graphics being used here.  The last time I tried to use a Nokia service; it was downloadable for Windows only.  My few experiences - when I've tried using Nokia software hasn't actually been favorable at all, to be honest.  Do you see the likes of Ovi running up against Apple, with their App store?

I wouldn't compare Ovi to the App store.  I would compare Nokia Download, as part of Ovi, to the App Store.  I would say firstly, Ovi has S60 clients for each one of its services.  You have to give it some credit for trying to do too many things at the same time, even being such a huge corporation.  If you look at other OEM's, no other OEM's come close to releasing so many services, one after the other.  Overall, Ovi is competing with the likes of Apple, although Ovi is more of an Internet company, the services company, whereas Apple primarily makes money from manufacturing, not from subscriptions.

The interesting thing to try and predict is whether the other OEM's, the other handset OEM's will be so desperate for their own services, for service revenue ad so cash strapped, as they are today, that they will end up licensing Ovi, maybe co-brand or with a white label license.  They will have Ovi as their only, or one of the very few options available to them for generating post-sales revenue.

Have you looked at all at Xpress Music, from Nokia?  Again, I looked at that and I just personally saw failings.

The one surprising thing about Nokia's music services is the lack of or relatively lack of DRM or tied DRM.  With the new handset, you get a one-year subscription to a whole lot of music, which is not monetized, traditionally, on a per track basis but on an unlimited basis.  That makes me wonder how Nokia is going to make that money up in terms of payments to the music labels.  Other than that, I haven't played with the service myself, so I couldn't tell you if it has glitches here and there.  I imagine it has.

Okay, why do you think Nokia went in to fully acquire Symbian?

It's a rather complex argument.  If I try and simplify that, Symbian was costing Nokia over a hundred million dollars per year.  It had forty-eight percent of ownership so relative control but not one hundred percent control over the source code.  The platform was closed to innovation.  It was difficult for third-party developers to build on top of Symbian, at least substantially. 

By acquiring Symbian, for which by the way paid about the equivalent of two and a half years of royalties, by acquiring Symbian, Nokia firstly reduces its operating expenses.  Secondly, the Symbian Foundation, the operations around Symbian are much leaner.  It can control the roadmap of Symbian more effectively because it will have the most engineers working on the source code.  Also, by going open source, and zero royalty - technically that's not one hundred percent true - by going open source, it decentivizes OEM's from using Microsoft.  It sort of pushes Microsoft into becoming even more irrelevant.  More importantly, it took out UIQ and MOAP from being competitors.

Okay, have you looked at LiMo? 

Oh yes, in depth

What do you feel about LiMo?  Can you share some opinions on LiMo?

Yes, LiMo started with an extremely impressive lineup of founders, the Who's Who of open source, in both operators and manufacturers.  Over the last three years, LiMo has primarily focused on getting new members on and getting industry endorsement, with very little on actually producing a single software base for handsets. 

In fact, if you ask the LiMo Foundation whether all the handsets that are LiMo compliant have even the same piece of software, even how small that might be; you will not get a straight answer.  What I mean is that most of the LiMo efforts and most of the LiMo success is in helping software vendors get operator attention, via the foundation, and help market its members, especially the smaller ones, rather than being a standards body that mandates or defines a specific software stack for handsets, which it was supposed to be initially.

Okay, that's news to me.  You also have mentioned before that Android has a darker side.  You speak about fragmentation and control.  Tell me about the darker side of Android.

There are two main problems with Android, as it stands.  One is the fragmentation and there is a lot of debate.

Can you tell me more about the fragmentation?

The APL2 license, the Apache 2 license says that you can fork, you can branch the source code without needing to contribute any of your modifications to that source code, back to the community.  In that sense, it's a non-copyleft license.  Now, that means that essentially, you can have as many Android flavors as you have phones, which of course creates a problem that developers write one Android application and they have to port to every single handset model, which is what you have with Java.  This is the worst-case scenario.  I think things will be less fragmented but still fragmented.  Although Google is rumored to be using some sort of agreement, a non-fragmentation agreement, in practice there will be differences across OEM's.  Fundamentally, OEM's need to change the operating system software in order to create differentiation.  That is both on the UI side and on the middleware side.  Android will end up with a lot of fragmentation.

Do you see any other problems with Android?

Yes, its industrial design suffers at the moment.  People were expecting far more from the G1, a far sexier device. 

It's been selling very well.

Yes, but again, if you see the industrial design behind the mass marketed Nokia handsets, it's just amazing how Nokia has been able to slightly alter the plastics, material, and the format and buttons and everything else, and create very appealing designs. 

Companies like HTC, or generally the Asian or DM type of manufacturer do not have an edge on industrial design.  Now, at the same time, it's worth noting that HTC acquired an industrial design firm based in San Francisco, which was very well respected.  We should be seeing some far cooler handsets from HTC.  But still, given that Android does not provide any form of industrial design as part of the package, it will easily face the problems that Windows Mobile is facing, which is a lot of handsets from lesser-known ODM's, but quite boring handsets, as such.

Okay, so Android may end up being predominately on ugly handsets, shall we say?

That's correct.

How do you feel about Windows Mobile, looking forward?

It's had a lot of potential, but I think, especially since the third quarter, it's facing challenge after challenge.  In the third quarter, it was the first quarter where both iPhone and RIM had more sales than Windows Mobile, despite Windows Mobile being around since 2002. 

The major problems it's facing are; it's still an enterprise phone.  The major OEM's, the tier one OEM's will only use it as a high-end prosumer or enterprise phone.  The smaller ODM's don't have the industrial design expertise to create cool consumer phones.  Windows Mobile next generation, I believe it's 7, is way late.  We were expecting it definitely in 2008.  It won't be ready, according to several sources, before the end of 2009. 

In addition, Microsoft recently acknowledged that they are spreading themselves too thin on too many ODM's and too many manufacturers, whereas their new strategy is more resources on fewer handset models, which are higher sellers.

Almost finally, I would like to ask about Brew.  Are there any feelings there and their position of Brew in the marketplace, looking forward?

Brew, overall, in the last one or two years, and what's continually predicted for 2009, has a market share of around eleven percent of total sales, which is pretty impressive.  One in ten handsets is Brew-based.  However, if you look at the revenues the QIS division is making, last time I checked it was below eight percent of the total revenues.  If you look back at why Brew was created, it was created to drive sales of the Qualcomm chipset's QTC business, and QTL the licensing business, which make up about fifteen to thirty percent of Qualcomm revenues: which make up about fifty and thirty percent of Qualcomm revenues, respectively

Since Brew isn't making that much money, they are looking at alternatives.  There are a lot of handsets shipping with Windows Mobile on top of Qualcomm chipsets.  There is what appears to be significant movement at Qualcomm B and behind this Brew mobile platform, the new mobile platform they announced a few months ago, for which unfortunately, there isn't enough detail out yet on what exactly is being planned.  There are discussions about a deep integration of Flash on Brew, but what is not clear is what is the future for UiOne, how will Flash interact with UiOne commercially, and generally, I would say there is some uncertainty for Brew as an OS.  Certainly, not for Qualcomm as a chipset vendor, or IPR licensor.

Looking ahead, let's pretend we're putting bets on at the bookies.  Which horses are you going to back in the race circuit, and why?

I would definitely back Qualcomm, both because of the expertise - it has really strong people on board, everywhere you look at Qualcomm; the teams there are top notch; and, because of its existing investments and its ability to invest a lot of new chipsets and new platforms.

I would continue banking on Apple.  Steve Jobs, now, is apparently taking a step back, due to health issues, but it's the single company that can command everything from chipsets to services. 

I would also say Intel.  This is mostly a hunch because they are investing massively in their new Atom processor, in which case, they're competing with Qualcomm and ARM.  Obviously, we know that there is one billion plus handsets shipping a year so chipset wise, there is a huge market for anyone. 

Covering chipsets and OS's as horses here.

Yes

Okay

In the case of Intel, I would say mostly chipsets because Moblin is only good for MID's which is a really small market now.

In terms of other players, let me think; I wouldn't bank on LiMo.  It's quite clear that there is an expiry date.

And Android?

That's a difficult one to predict.  There are a lot of things in its favor, an extremely strong architecture and OEM and M&O that has operator endorsement.  At the same time, the developer stories are not clear.  As I said, whether we will have fragmentation or not, as I said, I'm still not convinced whether we will see very sexy devices, really hot sellers coming with an Android OS.

If you look at Linux, Linux didn't specify aluminum and glass computer cases, but Linux is powering the Worldwide Web.

But there you're making - you're drawing a parallel to the PC or Internet industry, which is totally different.  Users will never specify what software they want on their handsets, which is why you need to have some correlation between the OS and the industrial design, meaning a good OS will only sell if it comes into a good industrial design.

So, people are not going to be asking for an OS at the shop; they're going to be saying small and pink.

Definitely, yeah, that's never going to happen.  There is absolutely no reason for it to happen.  It would be distorting the consumer perception to say that, or to embark on such an effort.

Okay, so industrial design - us geeks might talk about OS's but the average consumer is more industrial design

It's all about the package.  It doesn't matter what you have inside; it's about the package.  Of course, I'm not saying it doesn't matter if the OS is buggy or not, of course it matters.  That's part of the package.  If the user experience is smooth, if you get what you expect, don't have any problems calling someone, it's straightforward to text a person, etc., by and large you need a strong industrial design to win, in terms of consumer preferences.

It sounds to me like the iPhone is just going to keep getting stronger. 

I would agree, with a small reservation, regarding whether Apple's ability to create innovative designs will saturate because obviously, everyone is talking about the iPhone Nano now.  That's like a small version of the iPhone.  Nokia has tens of models out every year.  How can you cater to all the different consumer tastes?  You can't do that with two or three models.

Have you looked at the Nokia Touch?

Yes

It feels it lags behind the iPhone, it doesn't have two point touch.  It isn't as simple to use.  It just doesn't feel as intuitive.  Okay, it came after the iPhone, but it certainly didn't catch up with it, let alone, go ahead of it.  I must admit, I do feel disappointed in Nokia's Touch phone.

Yeah, it's really a touch screen UI, strapped on top of a Symbian OS.

Yeah, exactly, that's the feeling that you get.

It's certainly not designed from scratch.

Okay, it's been really fantastic speaking with you.  We're just coming up for the hour here, so I better let you get on with your day.  Thank you very much, Andreas.

Thanks for the opportunity, Lee.

Last Wednesday I had the pleasure of interviewing Sascha Meinrath (who will be one of the keynote speakers) via Skype.

You can download it as a 96kbps MP3 here (32 meg, 46 minutes).

Additionally the full transcript is below. To distinguish between us I've indented Sascha.


Transcript

Good morning, Sascha.  How are you?

I'm doing well.  Good morning to you. 

What time is it where you are?

Where we are, it is now about 10:30.  I've already had my first meetings of the day.  [Laughs]

Okay, well, it's 4:30 p.m. here, and I've got large mug of coffee so I'm all good for you.  So, I'm really excited to be speaking with you.  I see that you're the Research Director for the New America Foundation's Wireless Future Program.  Could you say a few words on what the Wireless Future Program is?

Sure, Wireless Future Program has been engaged, the past seven years, in telecommunications reform.  In particular, it's been particularly focused on spectrum, the public airwaves here, in the United States, and innovation in terms of how it's allocated and used, and who has access to it.  A lot of what we've pushed for are things like opening up spectrum to unlicensed devices and reallocating spectrum for public access, things of that sort.

I also head up what is going to become the Open Technology Initiative, here at New America Foundation, which will be looking at open architecture, open source, open API, kind of the open side of these technologies that are happening.  So everything from cell phones and open networks on cellular networks, to open source software and design.

Okay, the Open Technology Initiative sound pretty interesting, so let me make a note here to circle back on you, a little later, with questions on that.  So, looking here at the New America Foundation's Board of Directors, I see the Eric Schmidt, the CEO of Google is the Chairman.

Yes, and he's actually been with New America since before his days at Google.  He's been on our board for a number of years, now.  Recently, this past year, he stepped up and decided that he wanted to put a bit more time and energy behind the Foundation, and has stepped up as Chairman of the Board.  He got a lot of press for it.  What was not really talked about so much is that he's been part of this institution for quite a number of years.

[Laughs]  Okay, I'm just laughing because obviously I picked up the sort of Google sense, the Google significance to it and what it could mean, except you're saying he's been on the board for years, anyway.

A lot of people want to really read in that this means Google in some way has its fingers in the Foundation, and the reality is that's not really true.  He happens to now be chairman of our board, and CEO of Google.  The reality is that there are some areas where some of the work we're doing aligns with what Google wants to do, as well, and we're happy to work together and partner in those areas, but Google doesn't have any official space or place inside this organization.

Okay, thanks a lot for that clarification.  I'm going to jump right into the deep end here, where I really want to go.  You talk about a status quo in communications.  Could I ask you to describe that status quo?

Sure, let me exemplify it straight out of our own historical records here, in the United States, which in terms of licensure and who has access to much needed resources, and it could be rights-of-way access, but I'll focus on the public airwaves part of things.  Starting in the 1920's and into the 1930's, when the Federal Communications Commission, sort of the highest, most important space for telecommunications policy making in the United States, when they decided, back in 1934 and onwards, that we had to divvy-up the airwaves, it was based on the newest, most important, cutting edge, technology of the pre-WWII society.  Unfortunately, that kind of licensure regime has, effectively, continued to be in place, right up through and until today.

When people get licenses, they get a specific license and a specific location and at a specific power, which ends up being incredibly inefficient.  A lot of things have changed since the 1930's.  We have transistors, computers, and digital technology.  That is not really taken into account in terms of shifts in how we allocate the public airwaves.  What this has led to, then, is an artificial scarcity, which keeps certain incumbencies in place.  In fact, we have sort of an oligopoly on a lot of the airwaves, but it also keeps most of the populace out of being able to use the airwaves, for various uses. 

The status quo is very much about maintaining this oligopolistic system of maintaining artificial scarcity, of ensuring that the incumbents still have control over this medium, and that the actual owners of the public airwaves are kept out of this medium.  What it boils down to is that we're really fighting to ensure that new technologies and innovations, things like digital computers and digital technology, are taken into account when we're setting up our spectrum licensure.

Okay, did you see the comments that Lessig made, regarding the FCC, recently?  Are you able to pass any comment on them?

The knee-jerk reaction is often to jettison everything.  I think there is a lot of jettisoning that needs to take place.  We need to shift, dramatically, how we license things.  But, you can't just throw everything out without an alternative for how to take care of incredibly important areas of telecommunications policy.  If we were to jettison the FCC, we would end up being stagnant in ways that are even worse than the current situation.  I still have hope that a new FCC will be more proactive in instituting much needed reforms.  I'm still hopeful that a new staff will be much more aligned with the public interest coalitions that have been working here, in D.C., and pushing for reforms that really meet the needs of the general populace. 

I don't want to throw out the baby and the bath water.  [Laughter]  I really want to look at how we can have meaningful reforms and interventions into a system that is clearly broken.  Lessig was very correct in that.  Still, it has a lot of positive aspects to it. 

Okay, and this status quo, you've described it as inefficient, stagnant, overpriced, command-and-control.  That is fairly - that's not a light viewpoint.  You feel very strongly that a status quo that we have is not acceptable. 

It is completely unacceptable.  I speak as somebody who has served a couple of terms as a member of the board of directors for my local community radio station.  I've set up a low power, FM radio station.  I've fought, for half a decade, to get a license for our local community to have its own radio station. 

These sorts of battles - it's very clear that media diversity has been thrown out of the window.  Local control of the media has been thrown out of the window over the last eight years.  These are reforms that need to be made.  We really need to re-empower the populace to take control over what is ours; the public airwaves are held in trust for us to use, and has been granted to corporations and entities that have made incredibly inefficient use of them. 

Government research - National Science Foundation here in the United States has conducted extensive research on actual spectrum usage.  What we found is that even though the allocations of space - this part for FM radio, that part for AM radio, this part for television broadcast - the allocations show a completely full spectrum.  When you look at the assignments, you find, "CBS gets this station, and WRFU gets that station".  These assignments show there is a lot of empty space, but then when you look at actual use, what's happening on the ground, you find that over ninety percent of the airwaves are vacant, in any specific location in any specific time.

You can imagine a resource that's being used less than ten percent efficiently, and that's what we have, today, with the public airwaves.  I look at that and I look at the scarcity, and I look at the desire to make better use of the public airwaves, by people all across the country, and I think that's egregiously unfair.

So, then, I would like to ask what alternatives do exist?

There are many alternatives.  One of the big ones we're pushing for is called "Opportunistic Spectrum Reuse".  People can think of this in terms of a Wi-Fi device that can scan and find an open channel.  Or, if you remember home telephones, radiotelephones, where you would hit the on button and it might scan a number of channels and choose the one that had the clearest signal.  These technologies have been around for quite some time. 

With the television white space and in the spaces that we used to - if you were flipping through your television, you would have snow on your screen; those spaces can be reutilized for broadband access and for all sorts of different purposes.  We've pushed very hard at the FCC to allow unused television spaces to be used by next generation hardware or software, etc.  This is a fundamental shift in how we license our spectrums, and basically says, "Look, as long as we're using less than ten percent of the space, let's reuse the unallocated space, the underutilized space, on an ad hoc basis, by next generation hardware, so people can do all sorts of new, innovative things with it".  That's a huge change. 

The second one that we've been fighting for, and have lost thus far, is what's called "Interference Temperature," which is that in the same was as a rock concert, people in the audience can whisper, or yell for that matter, and not be disruptive to the concert itself, we want to see very low powered usage on occupied channels.

The idea is if you're sitting next to a 100,000-watt television transmitter and you want to utilize a device to connect your laptop computer to your television, fifteen feet away, you should be allowed to do that in the same space.  Of course, the incumbents have said, "If you allow any of these things, it will destroy radio, or television," or whatever it is that they own or license.  Of course, time and time again, we've found that these claims of disruption have been blown way out of proportion.  The disruptions that have been promised have never come to pass.

Okay, Yochai Benkler's Wealth of Networks comes to mind.

Absolutely

So, do you have some more optimism, now that Kevin Martin has stepped down [at the FCC] and you have Julius stepping up [as chairman of the FCC]?

Yeah

Yes - more hope?

I have a lot more hope.  You know, I've worked with Julius first on the campaign, and with the transition teams, and he gets a lot of these new ideas, in terms of innovation and shifting our regulations and policies to take advantage of computers, digital technologies and other advancements that have happened in the past half century, frankly.  So I'm very hopeful that a newly constituted FCC, with him at the helm, or with somebody else at the helm, would be fantastically much more receptive to a lot of the ideas that we've been talking about for years, but it's faced a lot of resistance from regulators.

So, you see some traction coming?

Absolutely, it's very clear that they've pulled together an "A" team of thinkers and innovators to contemplate what are the new policies that we're going to be implementing or looking at, in the next few years.  That gives me a lot of hope because when you get the engineers in the same room, and they're talking off the record, there is a lot of eye-to-eye agreement on what needs to happen.  It's only once the PR spin, and what have you, gets thrown into the mix, that you end up with people on opposite sides of the table on these issues.

Okay, so what opportunities do you see?

Gosh, everything from reuse of underutilized spectrum, to rolling back some of the liberalization that has allowed for media conglomerization in unprecedented rates.  What we've seen, over the past five years - the destruction of local media, the "crisis" that's whelming in things like newspapers, here, in the United States is incredibly destructive to the health of our civil society.  That needs to be addressed. 

We need to look at everything, from how we allocate new spectrum, in terms of whether we should continue to pursue this auction system, which guarantees that corporations fight it out - whereas public interest is completely unable to afford even the licenses that are out there, or whether we look at things - everywhere from network neutrality, to how we view network management and how we view universal service fund reform, in terms of telephone versus Internet. 

All of these are issues that are going to be coming to the fore, over the next year or two, all of which are going to have to be addressed by the FCC.  Many of these have been pushed down the road by the current FCC, for the new FCC to have to deal with.

Okay, I know it's may be slightly off topic, but are you able to pass comment on 700 MHz, and your opinion of how that went?

Sure, 700 MHz was a mixed bag, to say the least.  What we have is a number of different allocations within the 700 -800 MHz range that have been auctioned off, some previously, a couple of years back, and then a huge auction that took place from January to March of 2008.  That second auction, the 2008 auction, raised close to twenty billion dollars.  The big winners were groups like Verizon, the same incumbents that have been incumbents [laughs] for quite some time now.

One of the elements that was a huge win was what's called the "Open Platform Conditions," which mandated that if you have the 20 MHz of space that Verizon won, for about 4.8 billion dollars, then you had to open up your network and you had to allow any device to be attached to this wireless network that consumers and users wanted to bring to that network.  Really, what it is, is a precedent to bring back what's called Carterphone.  On the wire line, here in the United States, there was a Supreme Court decision, in 1968, the Carterphone Decision, which mandated that you could attach what's called "foreign attachments" to any network.  What foreign attachments meant was everything from what became answering machines, to modems, which of course, is what allowed for the Internet to exist in the first place.  Without the Carterphone Decision, there would have been no Internet.

Unfortunately, in the wireless realm, we've never had a Carterphone kind of decision applied.  So, the Open Platform Mandate in the 700 MHz harkens back to this history of allowing foreign attachments, allowing devices to be attached to these networks, so long as they do not harm the network.  It is a giant leap forward, in terms of empowering customers and end users to start building next generation systems, technologies, applications, and services - all of that on a wireless medium as opposed to just the wire line medium.

On the other hand, also in the 700 MHz, you had the D Block, which was a block that was supposed to be utilized for public safety, and to create a national telecommunications infrastructure, with interoperable technologies, for public safety use.  That has been a stagnant disaster. 

I wrote an article about this for Government Technology Magazine, where I interviewed CIO's of places like New York, San Francisco, Houston, and major cities, that really desperately need an interoperable public safety network for disaster response.  They have been waiting for years for the FCC to figure out how to do this. 

In many ways, the D Block is an exemplar of how the FCC has had it's hands tied, in terms of having a mandate by Congress to have to auction this off, but also has been unable to really reinvent itself and institute innovative solutions to address the needs of public safety community, in this case, but the general populace, more generally speaking.

Okay, thanks a lot for your views there on 700 Mhz. I've got a very simple, and it could be a naïve question, but what I never understood with allowing this "foreign attachments" is that when I think of GSM, I can take my SIM card and put it in any device.  For the fancier sports cars out there, you have security systems, where you put in a SIM.  If you car is stolen, it rings you or a main center, automatically.  So, with SIM cards, you can put them into anything.  If I roam into the States, I can take any device I want and it attaches.  So, I never quite understood this because I didn't see anything different to what we have, today, except maybe on paper, it says it's okay.

You have to view it in regards of what are you allowed to do on these networks.  You can take your SIM card and move it around to any SIM-compatible, wireless telephone or similar device.  Chances are, that's actually not allowed by your terms of service with the providers, at least not in the United States, and probably internationally, for the most part.  Now, people do it en masse and it's sort of ignored.

Where you really start running into problems is when you say, "I have a data plan on my cell phone.  Why can't I use my cell phone to tether it to my laptop and get free Internet through that?  Why should I have to buy an EVDO card, or some other device for my laptop, when I'm already paying once for a data plan on my cell phone?" 

The reality is that the providers don't want you to share your data plan amongst other devices; they only want you to buy one data plan for your cell phone, one data plan for your laptop, etc.  This is where the Foreign Attachments Mandate is really important, in that you should be able to take your SIM card and not just be able to put it into your car, but to put it into any device that you want, that follows the standards of connectivity on a wireless, telephony network, and have that interoperate with that network.  You should be able to put a computer - you should be able to put - whatever it is, that should be interoperable with the cellular network, and utilize those devices as you, the consumer, the end user sees fit. 

These are places where we see the lock down that's really in place.  You can't really use any service or any application on the cellular telephony networks.  In fact, whereas that one car might use your SIM car, chances are that car's manufacturer has made some specific deal with that cellular network to allow for that usage to take place, is paying some fee or licensure, etc. 

All of this stuff really is incredibly disheartening for innovation and development of next generation applications and services.  It really stagnates that whole market sector.  When I look at all the different devices you could connect to the Internet, the wire line Internet versus the few devices you can actually connect to a cellular telephony network, I think the Carterphone versus non-Carterphone regimes really become clear.

Okay, so thanks for letting me know that.  You have said that we're at a critical juncture.

Absolutely

Do you want to describe that juncture?

Sure, there are three elements to what is creating this critical juncture.  The first is that new digital technologies are really maturing at an incredibly speedy rate, leading to all sorts of innovations and new uses.  The second is that there is an unprecedented consumer demand to make use of resources like the public airwaves, in ways we really haven't seen since the CB radio craze of the 1970's or in the 1920's, the amateur radio craze.  People really want to utilize wireless technologies in ways that are unprecedented.  The third is that we have this shift in regulatory structures and administrations.  The three of those, the regulatory shifts, the consumer demand, and the new technologies are sort of swirling together and creating this "perfect storm" that has the potential, at least, to shift the trajectory of telecommunications, of fundamental communications, for generations to come. 

Over the next year to three years, is really this moment in time that will determine what that trajectory looks like.  After that, things will really be a lot more locked down and will not be nearly as innovative an environment.  So, the battles that are being waged right now are absolutely, fundamentally important to the future of human communications.  The reality is; warts and all, what's decided here in the United States often reverberates internationally, globally. 

Okay, so you speak about fundamentally changing access to communications.  I'm obviously getting a sense of what you mean there, but do you wish to add a little more about what you mean about fundamentally changing access to communications?

Sure, I very much ascribe to the notion that communications is a fundamental human right.  Article Nineteen of the Universal Declaration of Human Rights, back in 1948, was very explicit in stating we, as a community of civil societies, understand that if you cannot communicate, one of your fundamental rights has been infringed upon. 

We stand at this moment in human history where it is possible to ensure that everyone has access to communication, where traditional barriers to entry into this communications are rapidly being torn down.  In much the same way as we have, as a society, as a human society determined that we're uninterested in world wars any longer, and we are interested in preventing famine and addressing massive health problems, etc., we need to be focusing on communications in much that same way.  When we are looking at the fundamentals of social and economic justice, on a global scale, we need to realize that from the very beginning it has been the case that communications has really determined the health and vibrancy of democratic society. 

I think that's really nice stuff and it's something I wouldn't mind talking to you a lot longer about associated topics, but if I just jump to TV white spaces - I'm surprised how many people still don't understand what's meant by TV white spaces.  Could you describe what's meant by TV white spaces, and then also say why the fairly recent FCC decision was important?

Sure, television white space, as in snow or what you see on the channels when you're flipping through a TV, where there is no signal, where there is no broadcast, what ends up happening in any city or town that has over-the-air television broadcast is you might have a channel, let's call it channel 3.  Channel 3 may be a broadcaster in that local community.  You cannot then have a station on channel 2 or channel 4.  You need to space between these broadcast channels so they don't overlap on one another, so they don't interfere with one another.

What this leads to is a very inefficient use of the television spectrum.  You might have channel 3 and then channel 5 and then channel 7.  What also ends up happening is your neighboring towns cannot use those same channels that you are using.  You can imagine that if you try to fill a piece of paper with circles, you will find there is a lot of empty space.  In much the same way that that happens, television licensure is the same way. 

They draw a circle and they say, "That's channel 3".  No matter how you stack these channels, you always end up with underutilized space.  You have space between channels within a community.  You have space between channels between communities.  All of this, when you look at it, translates to somewhere between a low of about twenty to thirty percent and a high of over eighty percent of television channels that are unutilized. 

What the Television White Space proceedings was, was look, "Rather than just allowing this space to go unutilized, let's start looking at ways we can use the blank channels for innovation, in terms of broadband service, in terms of emergency communications, in terms of all sorts of new uses of this space".  It's very elegant, in that communities that have been least served by television's broadcasters, all of a sudden have access to the most television white space. 

This has been a battle that's been going on for many years, dating back to 2002, but really picked up in 2004, with the FCC saying, "We're going to make a decision on this".  Of course, it took four years to actually achieve a decision, but the decision ended up being, "Yes, we should reutilize these unused spaces". 

Where as the National Association of Broadcasters, the incumbents, the status quo fought against this, tooth-and-nail.  It was a huge political battle to get this done.  A coalition of community organizations, public interest groups, consumer groups, and high tech firms all came out and said, "We support this, we want to see television white space utilized for new and innovative uses". 

The reason why this is important is because it sets this precedent of saying, "Look, if you're not utilizing part of the public airwaves, we should allow devices to use that same space on an opportunistic basis".  It sets a precedent for saying, "If we have this massively underutilized resource, we, the owners of the public spectrum, - it should be entirely legal for us to make use of what we own".

This, of course, scares the bejeezus out of incumbents that have poured billions of dollars into licensing space, on the assumption that they can then keep other people out of that space.  The benefits to the general populace are so enormous, that even the political power of those incumbents was not enough to prevent this decision at the FCC.

Okay, so again, this gives you hope.

My friends often say that I'm a hopeless optimist, but I'm also sort of a pragmatist and looking at the political realities and what's possible.  What I see is that there is a fundamental shift taking place.  It's a generational shift, it's a technological shift, it's a party shift, and it's a lot of things aligning to make more effective use of these sorts of resources. 

Whether it's looking at broadband stimulus, or whether it's looking at the universal service, whether it's looking at network neutrality and carriage, whether it's looking at spectrum allocation and licensure, there is a huge impetus for making more effective uses of these resources, resources that have been underutilized for years, if not decades.  Tie that then, to the notion of things like the U.S. used to lead the world in terms of use and deployment of Internet and broadband infrastructure.  We have systematically, year after year, since the turn of the millennia, fallen further and further behind a growing number of other countries. 

When we look at that, as a country, as a society, we realize that something needs to be changed, from the midst of a massive, multi-year, market failure, a catastrophic market failure.  The market fundamentalism that has driven telecommunications policy for the past eight years is now beginning to give way to a much more pragmatic, society friendly regime.

And that should be nicely timed with the new FCC chairman appointment. 

That is very much the hope.

So, we'll need to track this now.  At the start, you mentioned the Open Technology Initiative.  I'd like to ask what kind of projects the OTI is working on.

The Open Technology Initiative is working on a number of projects around open source, open architecture, and open API systems.  I work at a think-tank so a lot of what we do is looking at what are the differential assessments of open versus proprietary systems or architectures.  How will these affect people, generally, and to concretize that a bit more?

One of the things we're looking at is the different architectures of wireless telephony systems and the hardware that runs on that.  That might be a comparison between the openness of a BlackBerry versus a Google phone, versus an iPhone versus an Openmoko phone, and the pros and cons of each endeavor.  Or, for example, we might be looking at something that's very big yet has not been looked at here in the United States - our healthcare system and portability of patient records, and interoperability of medical equipment.  We might be looking at things like how can we make more efficient use of the public airwaves, and open those up? 

It's really this intersection of technology and policy.  It's an area where, in D.C., you pretty much can't walk three feet without bumping into a lawyer.  We've realized that legal help is fundamentally important to being effective here, in D.C.  In the same way that's true, we need technologists to help us understand what's coming down the pipes, and what's happening with new technologies and the intersections of these new technologies, with the policies and regulations that we're passing. 

This might be looking at what are ISP's doing, in terms of throttling user services and applications?  A classic example would be Comcast, which is a major cable provider, really blocked BitTorrent, file-sharing protocol.  Comcast claimed they were not, and we needed technologists to step in and document exactly what Comcast was doing.  They eventually capitulated [laughs] and agreed, in fact, "Yes, fine, you caught us.  We are blocking BitTorrent, and we will stop now". 

It might also be that we're looking at various ways in which fair-use rights, in terms of copyright, are being curtailed in next generation operating systems.  Windows 7 is the new one that's coming down the pipes, and may have a lot of digital rights management that doesn't just protect copyright holders, but actually infringes upon our constitutionally, guaranteed fair-use rights as a populace.

These are all areas where, until you really take a deep dive into the technologies themselves, it's very difficult to understand the impacts that these technologies have on regulations and policies that are being put in place.

It might be - well, I won't say might be.  It is off topic, but you mentioned an OS, so the geek in me can't help but ask; are you saying Windows 7 will have something worse than what Mac now has, as well, in a new Mac - HDCP.

Yes, it's unclear exactly what Windows is going to do, but from I've heard, they are aligning themselves closer and closer with the Motion Picture Association of America, the RIAA, other major copyright holders, and these copyright holders have often been so incredibly concerned about things like piracy, and protecting their copyright, that they have had no compunctions about stepping all over our fair-use rights. 

I look at that combine that is developing, where most people that buy a computer are still buying a computer with a Windows operating system, and often don't have any other choice but to buy their computer with a Window operating system.  For me, when I look at Section Eight of the Constitution, which defines copyright, and also defines fair use as an important caveat, the notion that I buy a computer that comes with an operating system that infringes upon my constitutionally protected rights is of deep concern.  As we've seen, Vista had a lot of this in place already.  As we've seen this sort of rollback of our fair-use rights, I think it's fundamentally important to understand the technologies, to understand what these technologies are doing, and to fight against this diminution of these rights that are inherent in the United States.

Okay, so you're not a big fan of the personal computer becoming a glorified DVD player, with a play button, a pause button, and a pay button.  [Laughs]

Exactly, in fact, I'm a huge proponent of empowering end users to find, for themselves, what they view as fair use, and to utilize these as tools for whatever means or needs that they have.  We are allowed, as consumers who buy CD's DVD's, etc., to make copies for our own use.  If you have a technology that prevents you from doing that because of fear that you will share those files or media with other people, the notion that you would infringe upon your rights, in order to protect you from doing something that's illegal; it's like making cars that can only go 25 mph because of the fear that you might speed.  It's a ridiculous way to treat a tool that should be open.  You can kill somebody with a hammer; we don't make hammers illegal because they're a useful tool.  When you take a computer and gut it so it can't be used for anything illegal, you take a computer and make it into a relatively useless tool. 

Again, I love this topic because my favorite book is Yochai Benkler's Wealth of Networks, and it's certainly interesting times we're living in and what's going to take place over the next two to five or six years, i's going to determine a generation or two down the line.

But, jumping back to wireless - what do you actually think is next in spectrum policy reform?

What do I expect next?

Yeah

I think that there will be a big battle, over network neutrality, in Congress.  I expect that Senator Dorgan is going to drop a new network neutrality bill, probably in early February.  That will be on a lot of peoples' agendas.  I think that at the FCC, we will be, first and foremost, looking at how do we transition into this new regime.  I think a lot of the battles there are going to be much more about educating a new staff that's being brought in.  I think through 2009, I see things like digital rights management growing in import.  I think that is one of these areas that really have not been explored to the extent it needs to be explored.  I think that we will be battling over what it means to have universal broadband access and whether we should, as a country, prioritize that or not.  Obviously, I'm hopeful that we will prioritize it but there are a lot of groups and organizations that really want to ensure that a universal service fund enriches the incumbents without necessarily creating a competitive marketplace.

Okay, you had mentioned, again at the start, opportunistic spectrum access.  How do you think that will change things?

It has the potential to allow consumers to buy equipment that, in effect, makes everyone a broadcaster.  You can imagine a much more vibrant public sphere, in terms of media production and dissemination.  It means an increased flow of communications and information.  It means that the large barrier to entry, in terms of not too many people being able to afford either to buy or build their own radio station or television station, but can webcast, can podcast, can videocast, and can do all these things that are possible with new technologies.  But, they often lack the capacity, in terms of the broadband capacity, to do really innovative stuff such as live broadcasting and all these other media.  That is going to be coming to the fore in the near future.  We will have to address this as a society.  Much the same way that we provide parks, schools, and roads to the general populace, do we also say everyone needs to have access to broadband connectivity, as well?

Okay, I have one final question for you.  I would like to know - it's kind of two questions.  What do you see as the future of telecommunications infrastructure?  What will it look like and how will we get from where we are today, to there?

The future is absolutely going to be a hybrid infrastructure.  You will have fiber connectivity.  You want the fiber because it has capacity and reliability, but it will also be this hybrid with a wireless communication system, which will provide cost efficiencies and mobility.  Together, they will hopefully look like a seamless roaming between these different media - wireline and wireless - seamless roaming across multiple, different systems and networks.  They might go from EVDO to cellular, to Wi-Fi, to a wire line plug-in, depending on what's most effective for your needs.  All of this is predicated upon an open networking system where interoperability is paramount and where users are empowered to jump amongst multiple, different networks.  That's really, where these battles are going to be fought.  The telco incumbents really want to be sure that their users stay on their network and really don't like the notion of freeing up users to jump to whatever is most effective for end users. 

If I were to point to the future of communications, it is in this tension between end-user empowerment, edge-to-edge networking and command-and-control infrastructures that attempt to lock down users and networks and keep you on a specific network. 

Okay, would you ultimately like to see a day come where we have glass between us, or what we might call "super-high broadband" and peer-to-peer?

Yes, absolutely - I would love to see a day come where we are no longer having to worry about whether we have capacity or whether we have a mobility, not just to connect from anywhere, but to connect in the most efficient and effective manner.  Cell phones as an example, there is no reason, if you and I are in the same building, that we should have to be routed through a central tower.  The only reason why that architecture has been put in place is because in the United States, I get charged on the way up that tower and you get charged on the way down from that tower.  The network owner gets to charge twice for that call, even though for you and I, we would have better, faster and cheaper communications if our devices were connected directly to one another. 

I would like to cut out middlemen whenever possible.  I'd like to cut out hierarchies that are unnecessary for effective communications, whenever possible.  I would like to cut out tolling, adding expense for no other reason than you control the network, whenever possible.  Those battles between a distributed, peer-to-peer infrastructure, an opportunistic infrastructure and a command-and-control tolled infrastructure are really where the near future - the next half decade - the battles are all going to be fought.

Well, Sascha, I can say this; I hope you come to the eComm Conference every year.

Absolutely, it sounds like a great event.  I'm very much looking forward to attending.

Okay, so I very much look forward to the keynote that you're giving there and I wholeheartedly say thank you very much for your time and sharing your expertise.

You're very welcome, my pleasure.

Okay, have a great day, and thank you again.

You too - take care.

Bye