Recently in interviews Category

A week last Monday I had the pleasure of interviewing Gerd Leonhard via Skype.

You can download it as a 96kbps MP3 here (24.1 meg, 37 minutes).

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


Transcript

Good afternoon Gerd, how are you doing, today?

I'm doing fine.  It's snowing here, in Switzerland. 

It's always snowing in Switzerland.

Not always [Laughs]

Not always, so you have some time off.  Okay, so I know you only have a short amount of time, so let's jump into this together.  I want to start by saying thank you very much for speaking at the Emerging Communications Conference taking place next month, in March.

You're welcome.

I might as well begin by asking why you are attending and kindly speaking; what value do you see in it?

To me, of course, the Bay area is more or less a second home.  I lived there for seventeen years.  I also find that still, a lot of the great inspiration and the great people I talk to are still based in the Bay area and in the valley.  For me, it's a little like a homecoming thing, and also to get inspiration.  I'm very impressed with the program and the sheer number of interesting people.  I'm looking for this to be sort of a giant - everyone that you know from Twitter, Facebook, LinkedIn, or what have you, are probably going to be there, one way or the other.  That's what excites me.

It's a fantastic social gathering and a fantastic place.  I must admit; call me biased or not, but I'm exceptionally looking forward to it.

I want to start by asking you what is a "media futurist," this self-assigned title you've given yourself?  Do you want to expand on what a media futurist is?

Unfortunately, there is no [0:01:36.2 icon?] for titles, like an organization that gives them away.  This was essentially given to me by my clients who say, "You always talk about media content and entertainment and the future, so you're sort of a media futurist".  After this happened to me around a dozen times, I said, "Okay, that sounds like a great title."  There are a lot of futurists, but I specialize in media.

By and large, I'm not a futurist, like Paul Safo or people like that who are actually real futurists, being sort of generalists and very bright people.  I focus on media, which basically means content, technology, and entertainment business models that have to do with print, publishing, music, films, and all that stuff that is with the hairy questions of "How do you make money in the future, and what are the models?" 

I don't quite see the futurism in the same light as saying twenty years from now, we'll be living on the bottom of the ocean.  I really look at the next two to five years, so it's really more like a "presentist" in many ways, or even historian...

"Near-futurist"

It's a near futurist and it's basically a working title.  I that think sometimes people are upset with the idea that I, or anybody else, could actually predict the future, which of course, I'm not doing.

You find yourself at a more telecom/com focused conference.  What is the relationship between media and telecom/communications?

The past couple of years have shown that now that the owners of networks, ISPs, operators, and telecoms have to get involved with content and media because what's happening now is that those areas are converging.  Telco has been, traditionally, more outside of this turf.  I wouldn't call them DUN pipes, but in many cases, they've called themselves that.  They are outside the idea of social media or social interaction or content, entertainment, except for the various trials of integrating it.  Now, they're converging in the sense that they actually have to work together to create a new business.  There really is no future of the content business, I think, without making a deal with the telecoms, and probably vice versa.

I hate to jump right into the deep end, but could you expand a little upon that?  It's quite a shocking statement to be making.

Basically, we're seeing that with increasing broadband penetration around the world and the penetration of wireless devices at high speed, we're looking at a situation, in two to five years, where there is going to be a billion people networked, interacting, and trading content; first it will be music, then films, television and eventually books. 

If the networks don't work with the content owners to create new business models, essentially, we will be looking at a situation where everybody does it but nobody is legal.  Nobody could actually make a living of it because there is no real lubrication of the system.  In other words, governments will be asking the operators to clean up the networks and not have free content, or illegal content?  Content owners will be asking for sanctions and technical protection measures and in the meantime, all of the users will be doing whatever they can to circumvent.  That situation is not very fruitful for anyone.

What we're seeing, right now, is that people are trying to build, what I call, a "twenty-first century content economy," which means that it's no longer going to be about selling copies.  It's going to be about selling access and sharing the revenues, as we've seen in many different aspects on the Web; sharing revenues is a scary proposition for a lot of content owners but it may be the only way.

Sharing access - to me, you think that as soon as one person gets access, they can set up their own distribution, Peer-to-Peer, and then only one person ever needs to pay for access.

Absolutely, yes, but of course, you wouldn't do that if your access is bundled, right?  I'm not saying the access to the Web is going to be taxed for content, or charged extra; I'm saying that the smartest way to do this is to bundle access to music and then other content, into the access to create an ecosystem where money is being generated by all kinds of ways, including advertising, sponsorship, device manufacturer subsidies, and so on.  In that case, music in this case, feels like free to me but it actually makes money.

So, you're thinking it's part of your broadband monthly payment.  It's inclusive of music, for example.

Absolutely, and I think we're seeing this, already, being trialed around the world.  The Isle of Man has a trial.  This is a small island, but actually, it's a separate government right between the U.K. and Ireland.  You should know.  [Laughs]

[Laughs] I know the Isle of Man, a handy place for many.

And many other countries, including in China, Google has a flat rate at [0:06:56.4 unclear] with their own search engine.  There are many debates, all around the world, because the only solution for this problem is not to criminalize the users or to tax them but to create an economically viable system that can grow and generate revenues of all of the involved parties, which of course, includes CE device makers, mobile phone companies, manufacturers of devices, advertisers and so on.  I've written about this, many times.  My war cry on this is really taken from Larry Lesick, who says, "Compensation not control is the way that this is going to work".

So, you're not a believer in DRM, at all?

[Laughs] You wouldn't have asked that if you had read all my stuff.  [Laughs]  This business model for protecting content has nothing to do with technology.  Technology doesn't exist that can protect at least music, other content we can debate it even though I don't believe in it.  For music, DRM is dead because it has proven to be a total turnoff to any user, anytime, anywhere.

Surely, iTunes is the most popular music store ever.  I don't know what the percentage of music consumption via iTunes is, but it's DRM'd.

Yes, of course, that being the large exception, however, iTunes is a phenomenal success for selling iPods, not for selling music.  I love iTunes; I love the Apple stuff, but this is something we have to clearly see.  They have done a fabulous job doing it, but six billion songs or so that they've sold in four years is huge, but it's not going to drive the music economy.  It drives the iPod economy.  [Laughs]  If you're looking, in the end, how many songs on an iPod that have been purchased, I think that percentage last time I looked was under 5%. 

I do have to apologize.  I have not been following what's been happening with music, closely at all.  The general perception I was getting from the odd article here and there was that music itself was going to become free and there would be disintermediation between artists and consumers of music.  The music would be free and the money would be made from gigs, and so on.  It made sense to have people sharing your music on Peer-to-Peer networks, therefore, because it raised the level of awareness of the artists, which helped them sell t-shirts and gigs, and so on.  Is this some kind of totally out of sync picture that I've absorbed, somehow?

No, I think this is the right direction.  I wouldn't be as drastic as saying that music is free, in the sense of music not being paid for, for the creator.  I think it will feel like free; it will be free for the consumer because the commercial model being built around it will make it essentially a bundled experience, at least on the first level. 

When you buy your mobile phone with a certain operator, they bundle the music in it and you can do whatever you want with the music.  It's all just blessed as being part of the environment.  This is essentially like radio and T.V.  You don't have to get a license to listen to radio.  It's already bundled, obviously.  A hundred of years ago, that happened.

What we're looking at and this is what Chris Andersen is talking about in his new book, Free and also The Long Tail, of course, that the experience in itself can raise enough money to pay for the content because by and large the music industry is only a $22 billion or $23 billion business worldwide.  You can easily calculate how much it would take for all users to raise enough money in the network to pay for this.

I must admit; it's not huge.  That's not a huge mark at all.  It might sound huge, but it's actually relatively small, especially if you compare it to telecoms industry.

I essentially see the telecoms as becoming the key platform for the monetization of content because essentially, all of the artists and creators want to go direct.  They want to reach their audiences directly rather than through, necessarily, News Corp or Fox or what have you.  Of course, they will still need them and want them but ultimately, going direct is the goal, and the telcos can do this.  They have the direct connection to people who pay their bills with their mobile phones.  That exists.

So why - I'm kind of wondering why we need an operator in the picture?  Why does an operator need to know about content; just give me the pipes; artists can get their music out in Peer-to-Peer networks or however.  Why does there need to be a relationship set up with the telcos, unless your idea is to provide revenue stream from the end users?

It's quite simple; as long as the telecoms and the operators are not licensed to actually have music, which today they have music but they're not supposed to acknowledge it because the music isn't legal on the network, it's just being illegally transferred.  The key is; as long as they're not legal, they can't actually make it work because they can't build anything on it.  They can't use the data to sell anything else.  They can't up sell from the music, to concert tickets or live recordings or video on demand.  All these things can't be done because they're not supposed to even have the content, in the first place, at least not in the legal way.

You're building an awareness between the content level and transport level.  I can't help but have the feeling that the transport level maybe should be blind to what's up above, and what's up above, let them worry about providing up sell to concert tickets, and so on.

Of course, except that this system doesn't work.  Clearly, the faster and the cheaper that people connect on mobile devices; this kind of sharing of content is going to absolutely explode.  That's actually a good thing.  But, if nothing else can be built on top, then you won't see any way of monetizing this outside of the network, itself.  I always say, "Essentially, the future of content is the crowd and the cloud".  In other words, it's the people using it and the cloud where it sits.  If we can't interconnect the two and create, essentially, a new logic of how the whole thing turns around, like Google has created their own advertising logic and Twitter will probably create their own logic, as well.  If we can't do that here, then the value just drops dead, left and right of the system.

So, I have to play the Devil's advocate, a touch, here.  Do you think if that happened, that people would stop creating content?

No, I don't think so.  People create content for a lot of reasons.  [Laughs]  I mean, I should know; I used to be a musician and producer for a long time.  I think the question is not so much that they should get paid; I think the benefit of this whole thing working creates monetary and other benefits to everyone in the chain.  Governments can stop worrying about so called copyright infringement; record labels can stop worrying about distribution because it's built in; artists can stop worrying about having to find somebody to police on their behalf; and the whole system can become sort of functional again. 

Essentially, what we have now is a dysfunctional system.  That, in the end, can't really be good for anyone for social, cultural, monetary, or a lot of other reasons.  I think there is benefit in figuring this out together.  This is always what I will talk about in my speech; how will this work and why do we need this?

For example, do you feel we need record labels, still?

I feel that we need agencies.  There are many great examples.  For example, Terry McBride and his company in Vancouver, called Network Records.  They serve as an agency where they help the artists develop, select songs, and basically do the right development steps.  Then, they put them on the Web and market them and take a cash percentage off of the top, unlike most record labels, which took 90% of the revenues from all sales.  This model is an agency model and that is what the labels are going to do, become agencies.

I just can't help myself but see it become such that hits are decided via "crowd sourcing".  Surely, millions of people can decide which songs are better without having five or six people in the middle trying to help that decision.  I just find it hard not to see complete disintermediation, but maybe that's just me and maybe you can change my perception that complete disintermediation will not happen.

I think it will but at the same time, this is not an either/or process.  A lot of professionals will be involved in picking artists and songs, so early, that none of us would even see anything there.  This is an art form.  This is not a vote for a campaign. [Laughs]  This is basically not a democratic process; [Laughs] if you go to identify what people will like, two years from now, and then nurture it along, you are going to need more skills than a search engine.

I think all these things, together at the same time, will create the play list and the labels of the future.  I always say it could very well be that the bloggers and the blogs like Hype Machine and Elbows and so on, are the next labels.  They are essentially doing that too; they are selecting content.  I believe that 90% of us, in the future, will probably not go through the trouble of making our own play lists and everything; we will do it through our network.  We will be sourcing play lists and content through our network that will include professionals, professional amateurs, and total user-based voting, or even machine intelligence. 

Machine intelligence is certainly a nice one.  I wonder if you are saying that the deals will be struck, such that when you pay for broadband access, you have access to music; surely, that might end up with the situation where if you are one ISP, you have access to Sony music, but if you are on another ISP, you only have access to EMI music.  Is that not a bit strange, that situation we could end up in?

You bring up a good question.  The authority for the ISP and the operator to have music cannot be based on individual negotiations.  Then, you end up with models that are what I call "private flat rate".  [Laughs]  That wouldn't work because the consumers don't care what the label is and they wouldn't know. 

This is very much like radio or television; when you play music on radio, you can play any music you want, from any label, anywhere in the world; it's all covered.  This is called a collective license in the music business, and it has worked well for radio and many other models.  What we need for the Internet is a collective license where you can play any music you want, as long as you report the data and usage, then a pool of money is being generated, and then you are covered.

Somehow, the ISPs and telcos need to become connected to this model of sucking in revenue to pass to labels/content creators. 

When you create a model to where all of us, roughly about 1.6 billion now, but pretty soon about 3 billion people connected to networks; if we can gather around music, and actually use it and forward it and exchanges it and remix it, we create a huge opportunity for a lot of up selling, including video, audio, games, and so on, like Amazon already does, and there are many other opportunities, of course, next generation advertising, like you can see now with [0:19:32.6 unclear names] and Bacardi, that sort of interaction of brands and music.  We create a huge ecosystem that is very powerful to monetize.  We won't see it until we actually have both things in place, which is the network, the crowd, and of course, a legal way of using it.

But, the business model is only adding "a surcharge" onto your access cost. 

It's not a surcharge in that sense.  I think it is a little bit hard to understand if you haven't really looked at the music business in detail.  Radio is licensed by law.  If you start a radio station in the U.S., if you get a frequency, or whatever cable channel, you know what to pay.  There is a standard license in place.  I think it's 2.2% of the revenues or whatever.  That is what you end up paying. 

We need exactly the same license for the Internet.  If you want to stream on demand, it's x%.  If you want to download as part of the package, it's $x per user.  That can be leveraged against the money that is being made in the network.  The radio station owners don't pay for the music.  They let the advertisers pay.  We end up with free music.

Okay, that certainly is what I would call an interesting thought [0:20:50.5 unclear].  It will be really interesting at the conference, if you could expand upon that.

I think that obviously, this discussion is not widely happening, all over Europe, because the record industry association, the IFPI, has been asking governments to put laws in place to essentially disconnect people when they have been proven to download music.  Now, you are not going to go to jail.  You are going to get disconnected from the Internet if you are a downloader, which is another ludicrous way of solving the problem.

I agree with you.  Is this push to disconnect users, which is being forced on telcos and ISPs, is this only Europe or is it North America, as well?

They are trying to roll this out, worldwide.  This is the alternative to the lawsuits, which the RAA announced six weeks ago; they are going to stop suing people.  Now, instead of suing people, which has been totally unfruitful, out of the 30,000 lawsuits or so, only one went to trial.  It was then declared a mistrial.  It was a complete disaster.  Now, they are switching to a strategy of saying, "If this person downloads and uses Bit Torrent, or whatever, unplug them".  They want the government to support this law.

In Ireland, the ISP Irecom, has already said they are willing to support this, while in Germany, [0:22:23.2 unclear] in the U.K., they have all said there is no way we are going to go anywhere near this.  They know what is next.  Everybody is going to ditch them.  [Laughs]

I would agree, but again, I haven't been following the evolution you appear to be sharing, but again, the last watch on my radar was that you're getting encrypted Peer-to-Peer networks.

Here is the thing about Peer-to-Peer sharing.  People downloading from Peer-to-Peer network has become a minor activity in regards to how music is being shared and exchanged.  Now, the big thing with kids is not even download, but just share playlists on the many, many streaming on demand services, including Project Playlists, and Song Czar, and Schemer.  There are hundreds.  You don't even download, anymore.  People are sharing music through Rapid Share, through Facebook, the streaming apps through USB drives.  This whole emphasis on Peer-to-Peer networks is the past.

You've been talking about content 2.0.  Can you tell me what you are meaning by content 2.0?

Of course, it's kind of a senseless headline, very much like Web 2.0.  Nobody really knows what that means.  Basically, content 2.0, for me means a new logic in the content business.  This is really, where we are heading, right now, because it used to be quite simple; we sell units.  When you sell content, you sell units, meaning DVD's, CD's, software licenses, licenses for T.V. shows.  Those are units, basically.  When you sell units, you can count them.  You can hunt people who make units without permission, and so on.  It is all very easy, or more so than today.

The future of content, the next generation, will essentially be selling access and then the units.  We're going to have to figure out how we can make money in a model, to where the first action is a click, rather than inserting a CD into something, or a DVD that you have to buy.  When that click becomes part of my natural environment, like I'm carrying the Android phone and click on a button, and I hear my favorite artist streaming, what kind of economy of content is that?  Who gets paid for what?  What is the value chain?  This is what I call content 2.0.  Of course, it's going to be quite a debate figuring out how this kind of content creates enough juice in the ecosystem to create more stuff.

Now, when you are talking about the future of content and telcos, do you see it being a clear cut legal or tentacle solution, or both?

[Laughs] Well, clear-cut - I wish it were.  I think that what we are seeing right now, just like the switch from Bush to Obama, is essentially a switch from domination and war to collaboration, at least, from my idealistic point of view, here.  [Laughs]  I think we are looking at the very same situation here.  We are going to have to collaborate to figure this out together to create a business model that works for everyone.  This is not something that one company can fix or one piece of the ecosystem should pay for.  In other words, the payment isn't going to come from the telcos; it isn't going to come from Google; it isn't going to come from the user only; it will come from all of them, but just in a little bit.

This is where the collaboration comes in.  For that to work, we need the telcos to step up and all to take a piece of the action, just as well as the content business.  If the content business goes on as they have been, especially in music, which essentially means to refuse the license, then I don't see any way for this to go forward.

Okay, are you aware of the Martin Geddes talk, at eComm 2008, when he was talking about the double-sided business model?

Yes, I did.

Do you want to pass comment there?  I can't help but see a huge overlap.

Absolutely, I think that is basically - of course, two-sided business models, in general, are the way forward for a lot of companies, not just for telcos.  They are creating a new vortex, where you can surf the left and the right, rather than just one side.  I agree very much with the Telco 2.0 people, also with Simon Torrence, on this whole scenario of having to have this.  If it is only on one side, it isn't going to create enough revenues and future possibilities because you will become marginalized.

I'm glad you see a strong overlap.  Martin would have spoken a lot about how telcos could aid the whole distribution of content and charge for that in various ways, and that the future of telcos is to out distribute your competitors.

Let me turn back to this access model.  I know you've indicated it is more complex than what I thought was just a surcharge.  I have to say; surely, it will end up with film producers then saying, "We need films covered with this, as well". 

Sure, ultimately the power of the network is going to have enough payment in it for most of the content to be transacted upon in this way.  The difference, however, is that music is something that is basically like air.  Everybody always has music, somewhere, followed by electricity or air - or the other way around.  Movies or games are a little bit - people have to dedicate time to them, right.  Video clips, five minute things, yes, but ultimately, there is a different value chain for movies.  There is also different up selling.  I would be more than happy to pay more for HD and high quality movies, but I'm not so sure I'd pay a lot more for over sampled mp3.  Most people would feel the same way, I think.

There is a different mechanism in place, here, but you're right; in the end, of course, all of content is heading in this direction.  We have to figure out how to make this work, more or less for all of it, but it will take a lot more time for books or films.

I need to ask a typical question here because I am always looking for where opportunities are.  Do you see opportunities for telcos?

I see both the opportunity, as well as the necessity for them to get engaged.  This is a situation that has to be resolved in the next year or two; I wouldn't say on a global level, but at least on a developed-nations level.  It is a huge opportunity to get a foot in the door.  The content owners, especially in music, are desperate for new mechanisms and they like the idea of the flat rate.  If they can get over their fear of being outmoded, in the process of giving distribution into the network, this could be an extremely powerful system and a lot of people from major labels, including Rick Rubin, from Sony and Columbia records, has said, "Is music like water, like David Bowie said, ten years ago".  That is the way forward.

Finally, I would like to ask you about copyright versus usage right.  On a quick look at your blog, you seem to speak about usage right and copyright.  Can you tell me what the difference is?  That's the last question.

I think that it's quite obvious that traditional copyright, as it is right now, gives the exclusive right of reproduction and of use, to the creator and the companies that represent him.  I cannot make a copy of a song and publish it.  I'm infringing.  Because of some of these traditions being fifty years and plus old, we have a real issue that anything that we do on the Web creates constant infringement of copyright. 

The reality is that all the stuff that is fun on the Web, with music, is probably not legal.  That includes streaming on demand, remixing, synchronizing to video, because of this exclusive right.  I don't think that in particular, there is anything wrong with exclusive right; I'm just saying what we really need, in addition, is a usage right that makes money.  I would much rather see a deal in place that says, "YouTube videos can be put with music, as long as the music gets a part of the revenue share.  If it's non-commercial, let's just make a deal and collect".  That would make a lot more sense than saying, "No, you can't use it, under any circumstances," which is not realistic, and remove them all. 

I'm essentially pitching this change from control to compensation, to be enshrined in the law, as well, that gives the legal right for people to use the music and just compensate as part of the process.

I think it's well known that my favorite book is Yochai Benkler's Wealth of Networks. 

I totally agree, same here.  [Laughter]

Okay, so you love that book too.  It's an absolute art piece.  You just feel it's a lifelong piece of work behind that book.

I have a huge stack of books here, but Yochai's book is still blocking the reading of all the other ones, [Laughs] so I couldn't agree more.  [Laughs]  I think he has unlocked a lot of truth and forward thinking in that book.  I would definitely concur.  That's pretty much the bottom line.  Read the book and then we should know.

He will very much speak about the battle of the incumbents of the twentieth century.  Can you pass any last comment on if you see what we call incumbents of the twentieth century continuing, or if what we'll see, is fragmentation into smaller units collaborating and so on?

I think, in general, in media and in content, if you can't collaborate in the future and create win/win scenarios, you probably won't be there.  If you can dominate and basically run the show, if that's all you can do, you will probably be faded out.  This kind of model is as old as the Bush model was, which is to go forward and start a war. 

I think, basically, it's all about that.  If the big media companies and the incumbents can collaborate, if they can truly work out something together, rather than saying, "I win, you lose," which worked just fine.  The Russian president calls this the "economic eagle-ism" and not to sound like a socialist, here, [Laughs] but this is a solution we have to find, together.  If they can do that, I think they will be there.  I think that in music; most of the large, international companies will not be part of it because to do this, in this way, just doesn't fit their business paradigm.  It's not the ROI plan that they had in mind when they got into the music business.

Okay, I've got you, and maybe being in Switzerland too long, you're getting indoctrinated.  [Laughter]  I very much appreciate the time, and I appreciate the fact that you did it when time is very tight.  It's been very good to touch base with you and at least get a taste of where you are coming from.  I really look forward to the 20-minute keynote that you are giving, in a few weeks time.

I look forward to it, and if people want to connect before that, it's on my blog - www.mediafuturist.com, or my Twitter, which is gleonhard, just like the name.

Last Thursday I had the pleasure of interviewing David Burgess. The audio quality is not as good as I would have liked owing to infrastructure problems at David's end.

You can download it as a 96kbps MP3 here (25.8 meg, 37 minutes).

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


Transcript

Good afternoon, David, how are you doing?

Pretty good, and yourself?

I'm all the more fantastic for being able to eventually connect with you, after a few tries there.  You are dealing with an open Source BTS.  Can you tell me something about what we mean by open BTS?  If we imagine a BTS, we're imagining an antenna.  We are imagining large, physical, costly hardware, and something which propagates radio signals.  Can you tell me what open BTS is?

Yes, I guess what you're describing there, in terms of the big antennas and what they call the civil infrastructure - that's the site.  That's the BTS site, but the core of the BTS site is a piece of equipment, the Base-station Transceiver Substation.  That is the piece of equipment that actually generates the network air interface, the interface for the cellular network.  Everything else around the site exists to support the BTS. 

What open BTS is, is it's an open source implementation of the cellular air interface, for GSM.  It's a piece of software that runs, uses a piece of open source hardware, called the USRP, the Universal Software Radio Peripheral, and with the USRP and this open source software, we can generate an air interface, that to a cell phone, looks just like any other GSM cellular network. 

On the network side, it looks like an Asterisk server.  It is an Asterisk server on the backside.  What we're doing is putting a cellular air interface on an Asterisk PBX. 

Okay, so this air interface, I want to say, "Hell, is it complete?"  Are you actually, in software, supplying the whole DTAP or BSSAP app stack?

Yes

The whole signaling stack.  I mean, you're supporting GSM so you're supporting the Base Station Subsystem Mobile Application Part (BSSMAP) and DTAP at our transfer application part?

Well, we are supporting a functional equivalent to that, but that's not how we're doing it. 

I just wonder what you're doing because if I send a text message from a mobile phone, then it's going to go over the interface and it's going to send a DTAP message, or when I make a call, it's going to send a DTAP message over the air interface, a set up signal similar to Q.931.

That's right, so at layer 3, GSM call control is very much like ISDN.  Most services, at layer 3 and GSM are very ISDN-like.  What we've implemented is GSM air interface in layer 1, GSM air interface LAPDm in layer 2, and then what we have in layer 3 is very much like ISDN SIP gateway.  We take all the ISDN-like services that GSM performs in layer 3 and we translate them into corresponding SIP services.

Okay, an air interface site.  Since it's a standard mobile, it's going to be your ISDN-like layer 3 signaling.  It is going to conform to the GSM spec on the air interface site, right?

That's right.

So, you're supporting your layer 3 setups.  Is it full support that you have?  Do you even support the text message signals?

We do, now, yes.  The two things we support, right now, are speech telephony, Q.931-type call control, and text messaging.  Those are the two services we support, right now.

Okay, how many people are behind this?  The reason I jumped into the technical deep end a bit quickly, there, is I'm surprised at that degree of engineering, and with the name open.  It's pretty costly to engineer those.  How many people are behind this, and why?

It's not that complicated.  That's the big myth [laughter].  The hard part of GSM is understanding the specification.  Once you understand the specification, it's not that complicated.  We have had three people working on this project for about two years, well, for about eighteen months of actual coding.  We started coding this stuff in August of 2007. 

We had all had prior experience with GSM systems, all in a signals intelligence context, not in a telecom context.  The system we have right now, we do call controls, text messaging; we have a 3-layer stack, as I said.  The third layer is like an ISDN SIP gateway.  We let Asterisk do everything else. 

To do that, we wrote about 10,000 lines of C++.  It's not a terribly complicated system, once you have a good mental picture of how it fits together.  We used a flow-based programming model.  We coded it using a nice well-planned object hierarchy.  Granted, the object hierarchy was informed by many years of prior experience in intelligence systems.  It wasn't that complicated.  That's the funny part.  The hard part is understanding the spec.  Once you understand the spec and you have a clear mental image of how these systems - how these protocols fit together and how the layers interact with each other; it's actually not that hard to build one.

You've kind of just hit the nail on the head.  That's where I'm finding it amusing.  It takes quite a long time to get to the position that you're speaking about.  It's known as a high degree of expertise.  Then, you're kind of giving the word "open".  To me, it sounds pretty revolutionary. 

Normally, you are talking about the likes of Alcatel or Nortel, and so on, who are offering such stacks and facilities and at high cost because it's considered high engineering talent.  I like the way you say, "Hey, it's not that difficult, once you understand the spec," but the whole difficulty sn getting to that level of where you do understand the spec - if you take the spec we're talking about, the layer 3, it means you have to understand everything else.  To understand the DTAP, the Q.931-type signaling, you had to strip it out from the SCCP, for example. 

Well, that's the funny thing.  I guess that maybe part of it is that coming from the signals intelligence background, you tend to look at the rest of the network as a black box.  All that's exposed to you is the air interface.  That's all you see.  Since all you see is the air interface, you tend not to think about all the complexity in the network. 

As I said, the people involved in this project, my business partner and myself [0:08:27.5 unclear name], we both started working in cellular signals intelligence in 1999.  We've been doing this for about ten years, now.  For the first seven of those years, I never even gave much thought to network structures.  I built a mental model of how the air interface worked, but wasn't really informed by a lot of understanding of things like HLRs and MAP and TCAP and all those types of things. 

When we started to first take a crack at building our own BTS, and we started thinking about network integration, and we started looking at all the components; even in a phase 2 GSM network, which is really simple compared to a lot of stuff that's getting rolled out right now; we were horrified.  We were horrified by the complexity because a lot of that junk really didn't seem to need to be there. 

You ought to be able to build a peer-to-peer telephone system [0:09:50.0 audio breaks].

Based on what?  You broke up, slightly there.  You should be able to build it on what?

Ironically, I said based on VoIP protocols.  [Laughs]  A lot of that stuff - if you rethink the way the telephone network works, a lot of that stuff you don't really need.  You can work around it; you can build much simpler peer-to-peer mechanisms; you can leverage tools like Asterisk and simple email servers, tools like [0:10:40.1 unclear], and it just doesn't need to be as complicated as it's made out to be.  We implement in about 10,000 lines of code. 

Just a quick tech question, there.  Are you going to offer a CDMA equivalent, ANSI- 41?

Not in the foreseeable future, no.  We're concentrating on GSM.  There are some very specific reasons that we really like GSM.  We're not terribly interested in CDMA because our original goal was low-density areas in the developing world.  For those areas, CDMA is not an appropriate air interface.  It's also complicated to implement.  The computational load to implement CDMA in a software radio is much higher than for GSM, so we're not really looking at that.

Okay, now this is the first time I've spoken with you.  I'm beginning to wonder if you saw one of the talks on the debut Emerging Communications Conference, the one with our Swedish speaker.  Did you see that at all, where he was speaking about peer-to-peer GSM networks?

No, I didn't.  I wasn't aware of that.  I'd love to.

The overlap here is pretty incredible because you're talking about developing nations and that's where he was seeing the demand.  Anders Carlius spoke at '08.  His video is actually online. 

I will have to go see it.  I wasn't aware of this; that sounds great. 

I remember, I was looking at the BBC news and I saw a company which was developing peer-to-peer GSM.  Obviously, it would be illegal in developed countries.  I thought, "Hell, that technology could be stolen and somehow used in developed countries, in some other ways."  I'll link to it when we do the transcript of this, and I'll also ping you offline about that.

What is it you actually want to do with this project?

Our goal right now is to find a sponsor for a pilot deployment, of maybe six to ten cell sites, in a rural area, in the developing world.  We've talked to people in Africa, in India, and in Central America.  We still haven't had anything come together yet, but that's really - our goal right now, is to set up a pilot program.  Once we can set up a pilot program, we believe we can overcome some of the carrier resistance to this approach. 

Initially, when you present this kind of thing to an incumbent GSM carrier, they would consider it as something for green field deployment, but the truth is; there is not a lot of green field left out there.  Only in the most desperately poor areas, and they've pretty much given up on a lot of those markets.  Areas that don't have GSM service right now, probably won't get [0:14:47.3 audio skips] deployment.

To get a carrier that is accustomed to running conventional, hierarchical MSC-oriented network, to get that carrier to look at the kind of network we're talking about, it's sort of a leap of faith, on their part.  We're hoping that by setting up a good pilot deployment, we can prove this is a viable technology and we can get carriers to come and see the pilot network and maybe give this kind of technology some more serious consideration.

What I want to know, at this point, is I can see what you're doing is really technically - I think it's awesome what you're doing, just from the little I've heard from you.  I think it's very nice; I'm trying to be polite in my choice of words, here.  [Laughs]  Apart from seeing it technically very neat and very hackerish, what I don't understand is what is the value proposition, speaking to incumbents?  Why would the ever want to go near it?

The gist of it is that the type of network we're talking about is deployable at much lower costs than conventional GSM systems.  Because it can be deployed and operated at much lower costs, you have the potential to push the cost of service down into the $1 a month range.  We know, from public records and interviews with former employees of cellular carriers in Africa, we know the actual cost of service in Africa is something on the order of $5 or $6 per month, per subscriber.  We believe in those same environments, the type of network we're talking about can be operated at an order of magnitude lower cost.  You could have profitable operations at around $1 per subscriber.

What that does is it allows you to address the last remaining market, which is the three billion poorest people on Earth, who will not get telephone service otherwise.  They will not get telephone service at $6 a month because they simply cannot afford it.  There are too many of them to do it as a charity.

From a commercial standpoint, is that a great value proposition?  It probably depends on how hard your regulators are leaning on you for universal service.

It sounds to me like not only can you address the issues in poorer markets, but going by what you're dealing with there, this open source air interface, which appears on the other side as an Asterisk server, to me, it sounds like you could build some very neat applications and have some innovative development around it, let alone just cost saving.  It sounds to me like it could be some nice infrastructure, if we call it that, or platform to build some neat applications around.  Don't you see potential that way, as well?

Yeah, we can see the opportunity that you could do a lot of creative things with text messaging and with calling services that you might not be able to do in an ISDN-type world, standard GSM-like ISDN-type world.  Also, the technologies also are applicable - there are other places outside the developing world where this technology could be applicable, isolated sites like oilrigs, and ships, and those kinds of things. 

Another aspect of this technology that is attractive is that it is very rapidly deployable in the absence of any meaningful infrastructure.  If you need to deploy temporary cellular service in the wake of a natural disaster, like a hurricane or major earthquake, it lends itself to that very readily.  There are other [0:19:46.2 unclear] applications, services on airliners, campus-type... there are a lot of niche markets, too.  These are all places where we're actually more likely to get development money than going for the developing world.  In the end, our big vision is still the developing world.  Those other applications are just a means to an end.

When you say it's open BTS, does that mean somebody can go and download the source code?

Yes, there is a distribution of open BTS available from GNU Radio, right now, available for download from GNU Radio. 

Why did you decide to make it open source?

From the very beginning, we had always wanted an open source element to our project.  I think part of the thinking of that, frankly, was that we wanted to create a sort of movement mentality around this technology.  We were a little inspired by other open source projects that we've seen in this area, like Asterisk and OpenMoko.  We were really kind of inspired by those projects and we were hoping to create a kind of movement sort of mentality around Open BTS, as it evolves.

How long has open BTS become available?  I only became aware of it, myself, about seven months ago. 

That's about when it became available.  We made our first open source release in September of 2008.

So you guys are pretty fresh.

Yeah, like I said, we started actually building the software a year earlier than that, but we didn't actually start releasing things in open source until we had enough of a system to be useful and functional.  We didn't bother releasing anything in open source because your technical nature of the software is such that if it's released in an incomplete state, unless you're signal processing engineer with a lot of experience, there is nothing useful you would be able to do with it.  It's not like something somebody could tinker with at layer 1.  Nobody can tinker with it until it's complete - until it's talking to Asterisk, it's not really a tinkerable project.  [Laughs]  That's why we didn't release anything until it was fairly close to complete.

I seem to recall it was about three months ago, or maybe two; time flies and I can't remember.  Someone pointed out to me a lawsuit going on against - I don't know if it was you, named personally, but it was certainly to do with open BTS.  The quick look I took at it - are you able to comment on what this lawsuit is about?

I can tell you some.  The lawsuit is being pressed by a former consulting client of ours.  When I say ours, I mean Kestrel Signal Processing, Inc., which is the consulting company that my partner and I have, under which we've done open BTS, and a lot of prior consulting work.

Kestrel had built a GSM stack for an intelligence product for this small defense contractor.  Later, when we started writing open BTS, he made assertions that our work in open BTS was somehow based on proprietary intellectual property and trade secrets from this prior intelligence project.  Beyond that, I just have to let the declarations in the case speak for itself, and just say we deny any wrongdoing and will maintain a vigorous defense, and our declarations in that case just have to speak for themselves. 

Okay, I certainly hope that clears up for you, in the near future.  I know from other people who found themselves in similar positions, it can drag on a little bit and it's not exactly what I would call one of the things which make life better, having even these little things hanging over you.

We're hoping this case can be resolved.  We're all hoping this case can be resolved as quickly as possible. 

When I think of developing countries, I see quite a few of them aiming at using WiMAX, for example, in Sri Lanka - Sri Lanka Telecom is deploying WiMAX and connecting it to an IPv6 optical network.  It's not some kind of advanced economy, next generation network service-type scenario.  They're just saying, "We're connecting people for the first time in their life because we can't roll copper out through the jungle, so there are people who have never had a dial tone.  With WiMAX, we're beaming that somewhat into jungle territory and we're giving people their first dial tone". 

This is the kind of context I've seen WiMAX being used for in the developing world.  Why is it you're some kind of GSM evangelist?

There are a couple of things.  First of all, if you deal with a system like WiMAX, I'm not familiar with the system you described in Sri Lanka, but I'm going to assume that the customer equipment for this system in Sri Lanka is probably a rooftop antenna and a router?

It's what they call it.  It's quite funny what they call it.  They call it a "fixed mobile phone".  It's meant to be a fixed phone but it has a radio antenna and technically, it's not meant to leave the home.  It's a little bit bulky for that, but technically, you could leave the home with it.

What do those things cost?

I'm not aware of the cost, at all.  I could certainly find out and let you know, by the time I see you, in a few weeks at the eComm Conference.

I would be interested.  One of the reasons we like GSM is that the developed world produces a steady stream of recyclable handsets that can be purchased at very low cost, but are still perfectly functional.  Beyond that, there are tremendous price pressures in the GSM handset market, to drive the prices of customer equipment absolutely as low as technology will allow. 

Given all of the factors being equal, the radio for GSM is so much simpler than the radio for WiMAX or Wi-Fi, or CDMA.  It will always be cheaper.  All other factors being equal, it will always be cheaper.  It will always have lower power consumption.  It provides the basic service that people really need, which is basic speech telephony, maybe data service, its efficient rates for email.  That doesn't sound very exciting, but when you talk again, about the poorest places on Earth, the people who have never had a dial tone, that's a very big deal.  GSM can provide that service with probably the least expensive customer equipment that late twentieth, early twenty-first century technology is going to produce, the basic GSM handset.

So, while we are all buying new iPhones and discarding older phones, you're hoping that these can be sort of $5 a piece to the developed world, our old handsets.

Yes, I do.  In fact, you say $5 apiece; right now, there are companies in the United States, where you can buy refurbished, repackaged handsets, by the case - some of them for less than $5, depending on the model.  Unfortunately, those handsets tend to be North American handsets, which aren't compatible with GSM in the rest of the world, which is a whole different story.  There is no reason you couldn't do the same thing in Europe.  Again, people are discarding these things in huge numbers and replacing them with more complicated equipment.  They're still perfectly functional.

What is your grand vision, then?  Is it to provide dial tone to those who have never had?

Yes, over very large, sparsely populated areas, at very low cost.

What's in the way of this grand plan?

The main thing that's in the way of this grand plan is the fact that almost all of the cellular spectrum in the world is already licensed.  Companies already hold those licenses.  They are reluctant to let anyone else do anything with them.  In a lot of cases, they're prevented by regulation.  In some countries, you're allowed to sub-lease spectrum and do creative things.  In a lot of countries, you're not even allowed to do that. 

Carriers have no strong motivation to adopt a radically less-expensive technology.  The reason they don't is because if you start deploying $1 a month telephone service, out in a rural area, and you're still paying for your $6 month network, which you installed in the urban area a few years ago, people who live in town are going to want to know why they can't get the cheaper telephone service.  You can't afford to do it because you're still paying for that expensive network you already installed.

You can try rebranding; that's expensive.  We've talked to a few cellular carriers about this, and it's always the question that comes up.  "That's great; you can show me a network that costs less to operate.  Now what do I do with the network I just installed?  How do I leverage my existing SS7 infrastructure?"  That's an exact quote from an executive we talked to. 

The answer he wants to hear isn't "You don't; you scrap it and replace it with a packet switched network".  They don't want to hear that.  These companies have all the licenses.  They have all the spectrum.  Legally, you can't deploy these networks without their cooperation.  The challenge is to present this to them in some kind of way that makes it acceptable to them.

In a few weeks time, I see on the conference schedule that you are marked down as a demo.  Is this still going to be a demo you're doing in a few weeks?

That's a good question. 

[Laughter] Good question - I have you on schedule as doing a demo, in a couple weeks time. 

That's no problem.  I can do a demo.  In fact, if I have an Internet backhaul and no nasty firewalls getting in my way, we can connect calls to anywhere in the world.

What to do is ping me, off the call.  I'll do my best to ensure you've got the connectivity you need because I would love to see a demo in action.  A demo, to me, speaks louder than theory.

The thing about the demo of this system is that it's disappointingly mundane.  You put a little black box on the table, you pass out a couple of GSM handsets, and you just place telephone calls.  Unless you go to pains to do a few tricks to convince people otherwise, it's hard to tell that what they're using aren't just ordinary cell phones, talking to the local T-Mobile network.  The demo is disappointing in its ordinariness, unless you really want to look under...

That doesn't sound disappointing to me.  Hopefully, it doesn't sound disappointing to others, because that sounds like very good fun to place a call between two GSM handsets without using a real cellular BTS.

That's no problem; it's easy to arrange and I'll have all the equipment there and ready to go.

You mentioned spectrum.  Are you aware that the Wireless Innovation Alliance has become a media partner to the conference?

No, I've seen it but I've never really known what it meant. 

The Wireless Innovation Alliance is the most respected pushing for change in the spectrum space.  People who work in conjunction with the WIA, for example, if you take Maura, who is on schedule, she is Executive Director of the WIA.  You have others, like Richard Whitt, from Google; Sascha and Michael, both with the New America Foundation; these are all going to be spectrum-based talks.  Actually, I think one of the panels is going to be called something like "Spectrum 2.0," certainly it will be the 2.0 again [laughs].  The panel will certainly be on spectrum.  Maybe we will be able to find a way of getting you on that panel, if you're interested.  I'll put you in touch with the relevant people.

That would be fine.  I will study up on their policies and activities.  That sounds interesting.  There certainly needs to be a change in the way that spectrum is managed, in a lot of countries.  There is a lot of licensed spectrum out there that is sitting fallow.  The people who live under it can't afford the services that are being offered on it.  It becomes useless.

I'm going to do my best to make the connections there.  As one final, closing loop between people, are you aware of the work of Nathan Eagle?

No, I'm sorry; you got me there, too.

Don't be sorry, that's the whole good thing about the "community" - it all sounds like a love fest or something.  [Laughs]  He also spoke at the debut of 2008.  I'm going to need to link you up with Anders Carlius, and I'll link you up with Nathan Eagle.  We'll get the transcript of our talk we've being having about your Open Source Cellular BTS and I'll also insert the hyperlinks in there to try to close some loops for everybody. 

I really appreciate the time that you've given me in describing that because I think I've learned a lot more from chatting with you, than anything I read on the Internet about the project.

Thank you for the opportunity.

Last Friday I had the pleasure of interviewing Voxeo's CEO Jonathan Taylor via Skype. Jonathan Taylor will be added later on as a conference speaker.

You can download it as a 96kbps MP3 here (32.8 meg, 47 minutes).

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


Transcript

Good morning, Jonathan, how are you?

Good morning, Lee, I'm great.  How are you?

I'm actually very bad today.  I slept twelve hours.  That means I've only needed two coffees today, and normally, I need six in the morning to kind of jump-start.  Two coffees to begin the day is not very much.

My first question to you, it seems that people at Voxeo have two letter names, like R.J., and I see people referencing you as J.T.  Are you Jonathan, or are you J.T.?

Either one, actually.  I'm not personally working on a strong brand, so I have people who call me J.T. because my name is Jonathan Taylor.  I have people who call me J.R. because I'm Jonathan Robert.  I have people who call me Jonathan and some call me John.  It goes back to my career and a couple of places I've worked over the last twenty years, where there were other Johns and Jonathans.  I ended up being a J.R. at one company and a J.T. at another company.

So, it's not like an internal Voxeo policy to shorten everybody down to two letters?  [Laughter]

No, it might be a de fact policy that I'm not aware of, but not a formal policy.  R.J. and myself and a couple of other people - it's just one of those cultural things that happen and you never really understand why it did.

Luckily, I've only got a three character name and it's pretty monosyllable.  People just leave it as Lee.  [Laughs]

Not "La" [laughs]

It's easy to spell, as well. 

I wanted to interview you because people kept telling me that you have an interesting background and we have never spoken.  I know R.J.  I know Dan York, from Voxeo, both of them well, but you and I have never spoken.  Yet, people kept saying, "You need to speak to Jonathan from Voxeo.  He has an interesting background".  They never elaborated on that interesting background, and I don't know if you're able to on record, either.  At least, I'll try and ask you somewhat about your background and how you ended up in the communications space.

There are actually a couple of things that led me to the communications space.  First off, my father was a life-long AT&T employee, grew up in the Bell system, started off literally digging ditches and running phone lines.  I ended up helping design a large part of their digital signaling network 

I would go to the office.  It was intriguing.  It was the first place I saw computers.  It was interesting to see behind the scenes when you would use the phone.  There is all this infrastructure and machinery that, especially as a young kid, was immensely impressive.  That was the first part of it. 

The second part goes to the mid-eighties when a couple of things happened.  First off, I had my first computer, a modem, and I was really into bulletin boards.  At the same time, you had the competitive carriers like MCI and Sprint that were really just starting to get to the market in the U.S.  I had this big issue, which was like a thirteen or fourteen-year old kid, I wanted to call these BBS's but a lot of the best BBS's were a long-distance call, in California or wherever they might be.  Of course, this was back when my family would say, "We're going to call your grandmother, but let's only talk for a couple of minutes".  Long distance was expensive.  [Laughter]

It's the same sentiment here.  This is exactly how I got interested in communications, needing to download software.  The software was always in the States, and I'm being brought up in the U.K.  "No way, son, can you call America for an hour to download software" [Laughs].  You were being forced, by the telecom company, to be innovative.  [Laughs]  Tell me about your innovation.

I guess times haven't changed; carriers force innovation with their stagnant behavior.  This is when MCI and Sprint were first around.  This was before you had the capability to pick your carrier.  You had to actually dial local access codes in each market, and then enter your account code, and then the number you wanted to dial. 

These guys made the extremely silly mistake, I guess for customer convenience, of using 6-digit account codes, which were hackable.  I wrote a little program that would call the local access number, and just in sequence, go through access codes, and then try to call a number of a BBS.  If the modem got a carrier, it knew that the access code worked and if it didn't get a carrier, the access code didn't work and it would move on and try the next one.  I left this running on one of my computers, for a weekend one time, probably in 1985.  Within a couple of days, I had 800 access numbers.  [Laughs]

And then you went back to the bulletin board and uploaded your logs to share with everybody else.

I shared them with a couple of close friends that I had never met, but for online.  I was able to call and get the software that I wanted.  There were legal ambiguities, to say the least.  I was a young kid and just looking to learn a lot about BBS's and interact with people.  Unfortunately, one of the people that was in my circle took it too far.  I had a visit from the Secret Service.  It all ended up fine [laughs].  There was no big problem and no criminal history or record or anything like that.  They mostly wanted to know how we did it.  One guy that took it too far did get in trouble.  It was a very interesting experience.

What age were you, back then?  I was kind of fifteen when it was what we call "war dialing".  What age were you, back then?

I was fourteen or fifteen-years old.

That's interesting.

We were probably doing the same things on opposite sides of the ocean.  [Laughter]

Yeah, and then at fifteen, I was reading the CCITT specs, courtesy of PHRACK, which was later to go on and form the basis of my career.  You went on to form Voxeo, which is very well respected with developers.  Can you tell me something about the origins of Voxeo?

I'll give you a bit of the bigger contextual background.  After these hacking, phreaking incidents and timeframe, I continued to pursue my interest in computers, although I sort of got out of the telephony side of things for a while.  I ended up getting a job as an engineer, in high school, working for a storage technology company called Columbia Data Products.  Basically, with Columbia Data Products, I wrote what were really the first controller in software to connect SCSI controller cards up to PC's. 

When I got out of high school, I had this great job.  I said, "I can go to college, any time.  I have this great job now, so let me just run with this".  I didn't go to college.  I continued to work at Columbia Data Products.  In a very youthful way, after a year, I felt I had outgrown Columbia Data Products. 

I realized I had ideas, which were larger than my personal ability to execute.  As a nineteen-year old kid, I started my own company and I learned quickly that I was no good at running a company.  I went from fifteen people back down to just me. 

Ultimately, I figured out how to basically run a business, and I slowly built it back up.  That company was what essentially what we call now a VAR, value added reseller.  I bought a lot of equipment and added services and some custom software.  I shipped them to customers or installed them for customers. 

I had two markets, basically, that I sold to.  One was sort of city and county government in Florida.  I had just gotten some in's from friends and associates through the years.  The second was actually back to my origins, the BBS community.  There was show, at the time, called One BBS Con, which was the bulletin board operators' annual trade show.  I had a booth there and was selling storage equipment and Novell Netware LAN's for large BBS's.  At the time...

Novell netware LANS, that takes us back a little, too. [laughs]

At the time, most BBS software was not multi-line, suffering on DOS, largely.  To build a large BBS was like thirty lines.  You would actually get thirty computers with one modem on each computer and connect them together with Novell netware. 

I was at this trade show and I had encouraged all of my customers to get on email very early, again in part, because of my father's work at AT&T.  I was on the Internet very early on.  Also, in the mid-eighties, I had encouraged my customers to get on email, too.  What I would do is I offered my customers a 5% discount if they did all their ordering and most of their interaction with me via email.  I got a bunch of people at city and county governments and BBS operators to connect to Internet email so they could do orders that way with me.

I'm at One BBS Con, and this was like 1994 or 1995.  The timing was such that it was the end of the fiscal year for a lot of the county governments, so they needed to order a bunch of stuff.  I'm at One BBS Con and amazingly, at One BBS Con, in 1994, there was no Internet access.  I couldn't get to my email.  Normally, I would go get my notebook and dial in.  I'm at the booth, so people are constantly coming up to ask questions.  I thought, "Oh my God, what am I going to do?"

I called a friend of mine and said, "Here is my POP 3 username and password.  Could you login real quickly, and check my email?  Just read it to me so I can find out what orders are in there."  [Laughter]

It was very mechanized. [Laughs]

Right, "Can you check my email for me so I can read it and find out what my orders are and I'll call the distributors and get the orders out".  He did that and I hung up the call and thought, afterwards, "As more and more people start using email, a service like that is going to become very important," sort of remote access to your email via the phone.

I went through sort of three phases of design in about fifteen minutes.  I first thought, "All right, I'm going to build a call center, get all these agents..."  [Laughter]

Like Mechanical Turk style, reading it out. [Laughs]

Exactly, that was Unified Messaging 1.0, in my mind, which was call center agents, with a special email client that worked well for thousands of accounts.  Then I thought, "People are probably not going to want complete strangers reading through their email.  There must be a way you can connect a telephone to a computer". 

Phase two, and it was literally sketched out on a napkin.  I still have the napkin, somewhere.  I was trying to draw how you would wire a POTS phone line into a Sound Blaster card and do ring detection, [Laughs] and I would write software that would drive the Sound Blaster card, have a little ring-detection circuit.

Then I thought, "Somebody must have figured this part out, already.  There must be a way you can hook phone lines up to computers without getting Sound Blaster cards and putting some capacitors and different things on there, getting the impedance batch and everything".  So I said, "All right, let me do some research". 

I knew a guy that had been in the computer telephony industry.  I didn't know exactly what he did, but I knew he did stuff with telephony and computers.  I asked, "How do you do this?"  He said, "There is this whole world called computer telephony, Dialogic cards".  We got a copy of Computer Telephony Magazine and ordered a Dialogic card.

So, CTI was new to you?

Everything about computer telephony was completely new.  My background had been storage.  I had never done anything with the phone except the previous incidents with phreaking and hacking.  I said, "We'll get a Dialogic card".  We had sort of an API layer over the Dialogic card that came from a company called Stylus Innovation.  The product was called Visual Voice.  We hacked up this thing with a text to speech engine, where you could call in, enter your account code, it would grab your email, and read it to you. 

I started giving friends and associates the phone number to this thing and people loved it.  I said, "All right, let's start a company".  We started the company and said, "We need to get a voicemail system".  We looked at pricing for voicemail systems and I said, "These people are nuts!"  That was like $5000.00 for a voicemail system.  I have this computer telephony card thing.  I'll write a little voicemail thing, too.

Because I didn't know any better, I made a mistake and I put the voicemail into the email server, instead of doing it separately.  I say mistake because the company ended up being called IRDG.  When we talked to the analysts, they were literally, "No, no, you've done it all wrong.  It all needs to be proprietary so you have customer lock in.  How are you going to make money unless you can sell the hard drives for four times their actual costs, when people need more storage?"

We accidentally built a unified messaging platform.  We had no idea that there was a concept called Unified...

Naivety can sometimes be a good thing, and a clean slate, in your mind.

Yes, definitely, so we built the Unified Messaging Platform.  We did voicemail, email, fax, and paging, over the course of about a year and a half.  We added all those features.  We decided to sell it as an OEM product, and quickly licensed it to guys like Ericsson, Motorola.  There was a company in Santa Barbara called Digital Sound, which was a leading voicemail provider for ILECs in the United States.  They're now part of Unisys.  There was a company in Israel called MediaGate, which was basically the company that the people who started Rederex, which was a competitor to Dialogic, built after they sold Rederex.  We licensed technology to a bunch of companies.  We ultimately sold it to MediaGate.  I worked for MediaGate for years and then I left and took a year off.

I was thinking about what I wanted to do next.  I kept thinking back to when we first started developing the phone interface for the IRDG Unified Messaging product.  I was remembering, especially as someone not from a computer telephony or telephony background, how unbelievably arcane and difficult it was to get the Dialogic card working right, getting it to work consistently, and then dealing with phone companies to get T1 lines and Wink Start, Loop Start signaling, and DID's and literally all the stuff I had never heard about.

All good telecom stuff.

Right, but I had never heard of before.  I would sit down to have conversations with people and I literally had no idea what they were talking about.  I would just pretend I did and take notes, and then go home and try to figure it out.

So you were hit with hardcore analog signaling, back then.

Exactly.  The other amazing thing is we would go license it to these companies, like Motorola and Ericsson, leaders in telephony communications.  We would sell them a system and they would come back and say, "We don't have enough people to get all this stuff configured.  Can you fly to these locations and order the lines and install this for us?"  I'm sitting there thinking, "How is it that some of the largest companies in telecommunications don't have enough people with enough experience to get all this stuff up and running?"  We've been doing telephony for eighteen months, now.  Why are we ...

Why are we going to be supplying the bodies?  [Laughter]

After I sold the company and was taking a year off, I kept thinking back to that.  A business partner of mine that I started IRDC with, John Higgins and I, were literally brainstorming in a room.  We put three words on a white board.  These are the words that started Voxeo.  Those words were "computer telephony sucks".  We said, okay, how do we make it not suck? 

We roughly divided the problem into two domains.  First, it was incredibly difficult, especially outside of telephony, to create applications for the phone, learning all these API's and the terminology.  We said what if we take web technology and apply it to the phone so you can build a voice application the same way you build a web application.  What would that look like?

The second domain was deployment.  We said rather than selling a box or software to people, and then they have to go deal with carriers or their local phone companies and all that strange terminology and process, we will just pre-deploy it all for customers, in our own data centers, and they can access that platform over the Internet.

Essentially, it was XML-driven telephony development, hosted or what we would now call Software as a Service or cloud-based deployment.

When was this?

This was in 1999. 

This is pretty early, you must admit.

Yes, companies like IBM, Motorola, and AT&T were just starting to look at Voice XML.  Motorola had a thing called VoxML.  We looked at that and thought it was interesting but it was really driven a lot by speech scientists, and especially from an IBR perspective.  The kinds of applications that were on our mind were really about enabling the next generation of what I call personal communications.  It was things like "follow me," "find me," unified messaging.  At the time, there was Internet call waiting.  You had dial up so how do you know someone is trying to call you when they're on dial up? 

In our minds, we wanted to really build a platform so people could build next generation innovative and useful personal communication applications on the phone. 

VoiceXML was all about speech and IVR.  It literally had no call control, at all.  You couldn't start two calls, and then connect them together easily, and then drop one off or record it, basically play with call legs like you would play with Legos. 

So we built a thing called "CallXML", which was the first XML telephony language that had both call control and IVR-like media control.  I built a prototype of it.  I got pneumonia and was forced to stay at home for three weeks, so I said, "I need something to do".  I built a prototype of CallXML and just like the beginnings of IRDC, started giving the phone number and URL out to my friends.  Everybody loved it and started building these little applications.  I said, "Okay, I think we have something here".  We wrote a sensible business plan and called for about $3 million of funding to get profitable.  I was in Silicon Valley, at the time.

We went and talked with Silicon Valley VC firms.  We would go in and they would say, "We love the plan but we can't do this $3 million bit.  The minimum investment we can do now is $30 million".  The .com era was still in full effect. 

After talking to the sixth VC who told me they couldn't do a $3 million deal, I started referring to myself as Pavlov's Entrepreneur.  I rewrote the same plan to call for $30 million.  I went back to the same VC's and they said, "This is great; let's do it".  [Laughter]

Sounds fantastic.  Can you clarify Call Control XML, where it came from?  I know CCMXML.  Are you talking about the same thing?  Does it appear so?

No, CallXML was actually different.  CallXML was a single language that does call control and media control.  The W3 Standard approach to voice and call control, you have VoiceXML, which handles media, and CCXML, which handles call control.  The way that Call Control came about was it became clear within the W3C, that they needed to address call control, as well.  There was a working group set up to start working on the call control language.  We had CallXML, which was getting good progress at the time, and we had put CallXML in as a suggested foundation of the new language.

There were two other companies, Cisco, and Tolera, which I think felt a bit threatened by that.  We already had a lot of market progress behind CallXML.  They went off in sort of back corners of the working group and starting working on an alternative to the CallXML.  I didn't mention it, but in my storage days, I spent a lot of time working on storage industry standards and learning about the politics and Jujitsu of standards efforts; how people come together and want to work towards progress, but also people were looking at their own company's commercial interests. 

When R.J. was in this W3C call control effort, and told me about this second effort, I said, "All right, that's great.  Get a copy of it and we're going to get an engineer, right now, to make the world's first implementation of it, before anyone else does".  That's exactly what happened.

We built the world's first implementation of CCXML, even though we had already done CallXML.  By the time Cisco and Tolera contributed to the CCXML concepts, as another possible starting point, we said, "Hey great; we have that, too".  [Laugh]  At that point, they just kind of gave up and R.J. took over the CCCML Chair and Editorship.  Since then, we've been the leading provider of CCXML technology, as well.

How closely related, in terms of tags, is CCMXML with what you had been doing when you had pneumonia?

It's very, very different.  The W3C language, which is VoiceXML and CCXML, are designed to do everything you could possibly imagine doing with a phone.  They are also designed by committee.  CallXML was really designed by me, and it was designed with a significant focus on the 80/20 Rule.  I focused on the 80% of things that people really often do, and not the 20%, which are sort of worn-off scenarios.  I made that.  I did everything I could to make that 80% very, very easy and very approachable.  I left out telephony terminology.  I tried to make the language extremely easy for people to develop for.

CallXML, we expected CallXML to sort of die off because it was proprietary and only ran on Voxeo.  Actually, what has happened is because it brings the benefits of XML telephony, but it's extremely simple, especially compared to VoiceXML and CCXML, and it does the job for most people, we actually continue to see significant uptake and use of CallXML with our customers, even today.

That's very interesting [laughs] because I've had to spend time working with VoiceXML and Call Control XML and I've often wondered about some of the origins.  It's really nice to hear some of that background

Moving on, and asking you a question I've asked of most sponsors, I would like to say firstly, that Voxeo kindly showed support for the inaugural Emerging Communications Conference, eComm.  That was before it was even established, back in 2008.  That was fantastic and appreciated.  I think that was through R.J., who is the CTO there, and Dan York.  Again, Voxeo have kindly shown support for 2009.  Can you tell me why Voxeo have shown that level of community support?

The thing that I really liked about the eComm show is that you have great topics and great people and great energy.  It's not stale, not the same old thing.  The other shows that we've gone to and participated in, in the industry, I would sum up, as the underlying message is "Here is what the state of the industry is, today".  The thing I really love about the eComm show is the underlying message is "Here is what the state of the industry probably should be instead".  [Laughter]

Yeah, and here are the opportunities you could be cashing in on, if you move quickly. [Laughs]

Absolutely, so it's that difference, that contrast from here is the status quo; to here is the status woe that I really like about eComm.  [Laughter]

The status woe - I like that.  Talking about sponsorship, we have been joking lately, that companies that sponsor eComm are accelerating during the downturn.  It started as a joke [laughs], but it's actually seeming reality because we're yet to speak to a sponsor who doesn't come back and say, "Actually, business is better".  After I published a conference call, where we had spoken with Skype and others about accelerating during this downturn, I think it was Dan or somebody from Voxeo said to me, "Our business is also accelerating".  I'd like to ask what sort of new and unexpected opportunities Voxeo sees because of the current economic climate?

One of the biggest things - we are also seeing great business growth right now.  A good chunk of that comes from the reality that a lot of our customers, at the end of the day, use our platform to deliver various kinds of self-service solutions.  Self-service solutions are a significant cost savings over deploying call center agents. There are other pros and cons, obviously, about usability and customer preferences, but there is no doubt that they do cost a lot less. 

It's interesting; we didn't start the company, as I mentioned, we started the company with a focus on personal communications.  On the other hand, we built the company as a platform.  One of the unique things about Voxeo is we don't build any applications, at all.  We don't have professional services.  We don't build apps that run on our platform.  All the apps that run on our platform are built by partners.  We have over six hundred partners, now, that have built applications to do just that. 

We also haven't tried to steer the customer base towards one area of technology or telephony application or solution or another.  We started with the folks on personal communications.  We started finding a lot of people that were using our platform for self-service, so we followed the customer interest and started doing more in our product technology and marketing to fulfill those self-service needs.

As a result, we have a good 60% of our customer base that is really delivering very friendly self-service solutions.  We're seeing a sharp uptake in those solutions, today, as companies look at how they can reduce their costs.

That's the single biggest thing.  We're also seeing, at the same time, a rebirth in really innovative applications.  I think that the stressful and chaotic times like this are really, when a lot of the best companies are born and built.  We're starting to see early signs of that.  We've had conversations, especially in the last two months, with some entrepreneurs and people that have some very cool ideas, that we're partnering with to help them deliver those ideas to market.

That's quite interesting that you say that, because I'm aware of a number of entrepreneurs planning on launching some very interesting companies, this year.  Hopefully, some of these will be represented at eComm.  In the communications space, 2009, for me, looks like a very fantastic year, a catalyst year.

Let me test your morning awakeness skills.  I hope you've had coffee [laughter].  I want to throw in a question of vision.  What new technologies/developments do you think will disrupt the telecom industry within the next few years?

Sure, there are a couple of specific things and a couple of fundamental things, I think.  Some of which I think are personally interesting and others professionally interesting.  One of the things I hope comes about and that I'm seeing early signs of is deployment of microcell technologies for cell phones, where I can have my iPhone, use it when I'm travelling, and then when I come home, I have my own microcell and my iPhone will work with it when I'm here. 

If you compare the capabilities of a cell phone with the capabilities of a landline phone, today, there is an enormous gap.  One of the big things I've always wondered and kind of complained about is I have SMS on all my cell phones.  Why can't I have SMS on my landline?  Why can't I do my SMS easily, when I'm at home, with these devices too?  I believe that the first company that combines microcell technology with Skype-like pricing is really going to change how the home phone environment works and the features we have.  Basically, we will start using our cell phones.

Today, I see companies doing cool things on the technology with microcell, but then they're using the traditional carrier pricing models.  I don't think it's really going to take off until you can see the intersection of Skype-like pricing and microcell technology.  That, to me, is personally very interesting.  I'm looking forward to that.  I'm looking forward to seeing who the first company to do that is going to be.

The other thing I think, specifically, is going to be location-based services, location-based technologies.  I know you have talked with some folks about that, in other interviews.  The applications that are coming out of open availability of the application information are just increasingly impressive.  Google, just recently, started talking about the Latitudes product they are sort of experimenting with.  We're seeing a lot of other interesting applications out there around social connections and mapping, which I think are going to be very impressive.

The other one, which is close to Voxeo, is what we're calling unified self-service.  There has been the idea, obviously, of IVR self-service, for some time, on the voice part of a phone.  You're just starting to see companies do more and more SMS-based self-service, especially the mobile carriers, or USSD-based self-service.  USSD is a technology I had never heard of until two months ago.  I don't know if you have heard of it before.

USSD is carried on the SS7 stack.  I'm Mr. SS7 in a past life [laughs].  USSD I know, very well.

It turns out that GSM phones, if they implement the full GSM standard, which they're required to do, have support for USSD also, in addition to SMS.  The user experience is very similar, but the way it was first described to me is that SMS is sort of literally like email.  It has a store-and-forward approach to the network.  It can take five, ten, fifteen seconds or more for the message to get there. 

When you have a USSD connection in the phone, it's like having a Telnet connection to the phone.  It's pretty much real time.  When these carriers are providing their SMS-based self-service solutions, really what most of them are doing is they're using USSD under the hood for better user experience.

You have phone-based voice self-service.  You have SMS-based self-service.  We're starting to see customers that are doing effectively instant messaging or chat-based self-service.  I'm sure you've seen more and more websites where it has a "chat now" button and you can click on it and talk to a customer service agent or sales person, right there.

Finally, for example, with our voice VoiceObjects acquisition, T-Mobile is one of our customers, and T-Mobile Czechoslovakia also had kiosk-based self-service.  When you went into one of their stores, instead of having to wait for a person, you could go to a kiosk and check your balance, pay your bill, buy a new phone. 

In the past, these self-service solutions were all different development efforts.  You'd build an IVR application.  You would build an SMS application.  You would build your chat stuff.  You would build your kiosk-based self-service.  The other thing is that as these non-voice forms of self-service become more popular, especially the chat-based self-service, there is a natural drive to, "All right, we're going to chat with them, but first, let's collect their name and their account number and get an idea of what they want so we can route them to the right support person".  That's classic IVR computer telephony-integration type stuff.

We took a step back and looked at that and said, "Let's do this unified self-service.  Make it so people can build an application one time, describing a self-service dialog, and then that one application can work via voice, IM, SMS".

I really like that.  It just seems incredibly logical, again, like why is it not here, today [laughs]. 

We've summed the concept up as unified self-service, kind of playing off of unified messaging and unified communications.  We're starting to see customers like T-Mobile Czechoslovakia, who are using our technology and tools like we have with the VoiceObjects acquisition, to do just that.  I think that that, especially relative to our business, is going to be a significant area of change over the next couple of years.

Finally, the big thing I see is dis-aggregation, breaking up the services that were provided by big entities, whether they're carriers or companies like Voxeo, and sort of selling them as more piecemeal technology solutions

Dis-aggregation - that's very interesting.  Did you ever read Moshe's book, The Pebble and Avalanche?

Yes, absolutely.

He gave me a copy of that a couple of years ago, and I've always meant to go back and read it.  I read just the first few pages and thought, "Oh, this is so true.  I need to read this book".  I will get around to it, this year, I promise, Moshe - if he hears this.

No, it's a good book.  It really is.

Just jumping back on developer track a little bit, Voxeo has been around ten years.  Fitting into the last question, how do you see voice developer tools changing, over the last ten years and where do you see voice developer tools going forwards?

It's an interesting question and one I've spent a lot of time thinking about, lately.  My analysis and conclusion is that it's really repeating waves.  If you go back to the 1990's, when we first built the unified messaging platform, it was all about telephony API's, whether it was the Dialogic API, or standard attempts like S100 and TAPI, or visual basic OCX controls from companies like Visual Voice, it was very API centered, telephony development. 

Then, starting about ten years ago, right about the time Voxeo was born, there was a strong push to XML, in general, throughout the development world and to XML telephony technologies like VoiceXML and CCXML and our CallXML language.  We've been riding that wave since Voxeo's birth, to the point that the XML-centered technologies have really taken over in the enterprise, especially, and especially larger enterprises.  Large enterprises, every RFP that we're seeing out there, today, are very centered on VoiceXML and CCXML type of technology.

Interestingly, at the same time, we're seeing on the more innovative front, away from a lot of large enterprises, a move back towards API-based telephony, but with distributed architectures and focused on programming languages like Ruby and Groovy and EKLA and Python. 

We believe that over the next couple of years, you're going to see the continued success of XML-based telephony, especially in large enterprises, and more growth again of API-based telephony in the more innovative development circles and startups. 

What do you think that's happening?  What is giving that push?

I think it's a couple of things.  I think these things go in waves, in part, because new technologies come around and there is a tendency to overreact, over adopt, and over support them.  XML-based telephony is great for a lot of things but it has its disadvantages, too.  VoiceXML and CCXML tend to be relatively complex.  They're great for developing applications but they make it even harder to sort of debug applications, after the fact.  There is a general movement away from XML, again, especially in the more innovative side of programming and startups, today. 

I think part of it is just pulling back from an over-adoption of XML and going back and saying, "Look, there are places where API-based solutions work great and there are places where XML-based solutions work great.  Let's be more sensible about where we divide that".  I also think it's partially cultural.  "Hey, enterprise is all using XML-based telephony now, it's no longer cool".

So, let's start doing Ruby-based.

Exactly, and Ruby is an impressive language, so it's 100% buzzword and cool-compliant.  I can definitely understand that.  I've actually been learning Ruby, lately, myself.

Okay, so you get the "cool kid" t-shirt when you're doing it in Ruby, right?  [Laughter]

Exactly

Talking about having a cool t-shirt and so on, what are you most excited about at Voxeo, right now?

Actually, a lot mirror image what we were just talking about.  I'm very excited about our success in the enterprise.  I mean, look, we're a company literally started by a phreaker/hacker in his youth.  I started Voxeo because computer telephony sucked.  That was my viewpoint.  It's interesting; I really don't like the industry that we're in, in terms of its stagnant nature.  I have felt a strong desire for change and started Voxeo, essentially, to bring change to the industry, to the largest degree I could. 

It's very impressive, to me, personally, that we're seeing as much enterprise success as we have.  Data Monitors just came out with a report, profiling premise IVR solutions.  It's got Cisco, Avaya, Nortel, and Genesis, and InterVoice, and all of the big guys, multi-billion dollar companies. 

The conclusion of the report is that there were two leaders in the industry moving forward - Genesis and Voxeo.  I just looked at that and thought, "We've been selling a premise product since 2006.  These other guys are multi-billion dollar companies.  They've been doing this stuff for five, six, seven, eight times longer than we have.  Even analysts are starting to say, 'Look, the way Voxeo is approaching the market is disruptive and that disruptive nature is being adopted by enterprises'."  Again, not trying to give too many kudos to ourselves, but I'm personally very thrilled at the enterprise success we're seeing, and the fact that we're displacing these large vendors that I've personally despised as a potential customer, and many of the prospects despised, too.  [Laughter]

That's very amazing.  You just come across, and in fact, I don't need to say come across - are leading innovators.  It's just really fantastic to have you on board as sponsors.  It helps rubber stamp the event as being the place of innovators.  It's really funny to hear that report.

That report has been great for us.  At the same time, recognizing the waves I was talking about earlier, we have several new stealth-mode projects and products coming out over the next six months that I'm very excited about, as well.  I can't talk about it that much now, but we are launching one of them at the eComm show.  I look forward to unveiling that and talking with everybody there, but I'm also very excited about a lot of the things we're doing to really push that innovation forward, this year.

Okay, just to being drawing this to a conclusion, since I've eaten four times as much time as I was meant to have, which has become fairly standard. Voxeo has made a number of acquisitions over the last few years.  I don't think there is any secret of that.  In particular, in the second half of last year, do you think that acquisitions are good for expansion and are they working out for you?  Did you make a mistake or did you not, is the real question.

I think acquisitions are a great way to expand if they're done right.  I think that eight out of ten companies don't do acquisitions right.  We've acquired four companies in the last four years, two in the second half of last year and the plan is that we're going to acquire four companies this year, assuming we find the right deals.

The acquisitions have worked out very well for us.  First off, if you look at it from a team basis, we've got about 160 people today, and about 60 of those people have come into the company through the acquisitions.  We have a great retention rate for employees that came in on acquisitions.  It's over 98%.  We've literally built the company largely with the people and technologies that we've acquired over the years.

I said it's great if it's done right.  The biggest problem I see is that a lot of companies buy other companies and then they pretty much just trash the company they just bought.  They come into the deal with a very preset concept on how the acquisition is going to work and what the company is going to look like afterwards and what the products are going to look like, afterwards. 

We've heard that, unfortunately, about one of our competitors.  Envox was bought by Syntellect, and from what I hear, they're getting rid of all the people, they're changing the product direction to fit what Syntellect was doing before.  I think that's the exact wrong thing to do. 

We structure our acquisition process around the idea that we don't know how things are going to end up and that there is a lot of experience and a lot of best practice and contextual knowledge that we're acquiring, that unless we're careful, we'll destroy without even realizing that it was there.  We go into acquisitions with a six-month process to just learn, to ask a lot of questions and sort of sell side-by-side, and figure out what the strengths and weaknesses are of the people and the technology and marketing of the different entities and then take the best from each and combine it.  That's how we move the company forward.

We pay a lot of attention to cultural issues.  We pay a lot of attention to making sure new employees are happy.  We move slowly.  We don't bring in change so we don't lose that best practice.  In doing it that way, acquisitions have been great for us.  That's why we're looking to do several more, this year.

I hope you find new companies to cut deals with in the acquisition space, this year.  I look forward to hearing about and watching what you're doing with great interest, trying to second-guess what it is you're aiming for in the longer run.

As a final kind of question, I would like to ask what you're looking forward to most, at the Emerging Communications Conference, which starts in what feels like just a few weeks?

I think it is literally a few weeks.  The single biggest thing, I mentioned before, I really believe that leading companies are often born during times like we're seeing today.  Personally, I'm very interested to see how our industry responds to the chaos and stress that is coming from the world financial condition.  I really do believe that we're going to see the start of new leaders in our industry at the eComm show.  I think it will be very important to be there and to talk with people and see a lot of the things coming out and being launched, and watch these leaders arise.

I hope that it's okay to have this in a public domain.  I'll not say much, but I'll say you will be a speaker and you will be doing something interesting.  It will not be on the schedule.  Is that okay to mention?

That's perfectly fine.

Okay, so we have warned people that you will be speaking but you will never appear on the schedule.  We will leave it for others who do come along, to find out what it is you're going to be doing.

Yes, we're looking forward to a couple of key announcements at the show.

Okay, I would like to thank you for spending the time with me.  That was very entertaining, I must admit.  You gave me my morning laugh and I find it very interesting.  It put a big smile on my face [laughs], especially earlier on, until we got down to talking about acquisitions and so on.  I loved hearing the origins, yourself, the company, and I loved hearing the tales of how you're competing exceptionally successful, as a nimble and innovative player among giants.

I honestly enjoyed it, too.  I look forward to meeting you in person, finally, at the show.

Thank you, Jonathan, have a great day.

You too, Lee, talk with you soon.

Last Saturday I had the pleasure of interviewing Karrie Karahalios via Skype.

You can download it as a 96kbps MP3 here (22 meg, 33 minutes).

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


Transcript

Good afternoon, Karrie, how are you, today?

Good afternoon.  I'm well, how are you?

I'm fairly well.  I was up a little late, today, I must admit.  I got up at 4:00 p.m.  I've only been out of bed for three hours, now, so I feel pretty refreshed.  I'm sure by 4:00 a.m. this morning, I will be back to feeling dog tired again [laughs]. 

You are going to be a speaker at the forthcoming Emerging Communications Conference.  I see you are Assistant Professor in computer science, at the University of Illinois.  I want to ask; what do you do in that role?  I know you could answer back, "I'm professor of computer science," but can you tell me what it is you are looking into, there?

I guess my role there is three-fold.  Firstly, I'm a researcher.  My main area of research falls into the category of social computing, but my primary interest is actually communication.  That has been my passion for some time.

For some history, I actually started out in electrical engineering, as a graduate student, looking at building network switches for tele-media networks.  I guess, one thing that happened to me, there, is I was lucky enough to see the first movie playing in Mosaic browser.  After that, I realized that someone else was going to make the networks faster, the boxes smaller, and I wanted to focus on the ends.

That sort of led me into human computer interaction, which led me to a branch of it, called social computing.  My main passion is actually trying to see how people communicate in our new network media environments.  Those are the areas that I research in.  That entails several different aspects. 

One, we build new interfaces to actually allow people have different styles of back channels they may not have had before.  Two, we analyze existing tools and social networks.  Three, I named my group Social Spaces, so we're not tied to any specific thing, but we do a lot of different work with social visualization and different styles of visualizing patterns of communication and behavior.

That is sort of my role as a researcher at the university.  My second role there is as an educator.  I teach undergraduate and graduate classes in multi-media networking, human computer interaction, social spaces, and social visualization. 

Third, I feel like my role at the university is also kind of like a community broadcaster to let people know that this is a valuable area of research.  We haven't had HCI in its current instantiation at UIUC in a CS department, for a while.  It's only been like this for about six years.  I feel as if I have to go around and make it clear what we do and why it's important, to the whole community, not just to the university.

It's interesting; at the start there, you mentioned Mosaic.  I remember Mosaic, too, but we probably shouldn't get all nostalgic.  Do you remember Gopher?

Yeah, yeah, Gopher - I used to read news using TIN and RN.  That's what really got me interested.  I love the idea that there were these amazing public spaces, some of them that were quite anarchical. You could just go in and talk to people.  You kind of felt this bizarre freedom.

Did you say, "networked media environment"?

Yes

Can you explain?  I have a good clue as to what you mean by that, but could I have you describe what you mean by networked media environment?

Early on, that would entail Usenet.  It would entail email, even mailing lists.  Today, it goes further.  Today, you can take it so far as to be games, like World of Warcraft, Second Life, but even things we build ourselves. 

One example of something that we've built are the sculpture chairs; we put them in cafes.  Someone can go to a café with a friend and talk to their friend, or they could talk to someone else who possesses this chair, kind of like being in the movie Being John Malkovich, in this case, were actually logging into a chair and having discussions with people in another space.  It includes media environments that people are familiar with, on typical computers, but also things we build ourselves to try and see what cues are necessary to sustain conversation.

What cues are necessary to sustain conversation?  Can you describe that?  It sounds very interesting.

One example with our chairs - we had these chairs that had "Mr. Potato Head" faces.  We were inspired by Tony Oursler, in his projection art pieces.  What happens is you have this remote interface.  You can log into the chair.  You choose what your face looks like.  It was very abstracted.  One of the points of this was to talk to people when you felt isolated and had no one else to talk to, so you didn't show your exact face.  You got to choose one of three styles, whether it be hand drawn, a cartoon-like face, or claymation. 

Then, you are connected to the people physically present at that café.  We're trying to think of different ways to actually include back channels.  Traditional back channels might be something like the way somebody says, "Uh", "Uh-huh," or maybe with their gestures and what they're doing. 

For example, if I were talking to you and doing my nails at the same time, which might imply that maybe I wasn't as interested, but that back channel is something we would like to transmit across a media'd space so people get some idea of what is going on.

One of the things we were looking at with the chairs was based on some type of behavior, could the color of the face change?  Could something else indicate, abstractly, your level of attention or agreement, if you didn't have the "uh-huh's". 

Another example of that is with another piece we have called "telemurals".  We use abstracted video instead of photo-realistic video.  A lot of video studies have shown that there are two main reasons people like teleconferencing with video.  One is to see somebody's posture, just to get their general state.  Are they happy?  Are they sad? 

Two, is the level of attention.  By having just silhouettes of people, we can get at your posture, your mood, and you can get a general idea of somebody's level of attention, but they don't have to give up their privacy.  The idea is how can we show things that are different from the way you see them in face-to-face, but still provide some understanding to people?

Probably, the closest idea of a back channel in media, as we know it today, is just the indicator that you're typing on Skype or MSN Instant Messenger.  It's a back channel that someone's doing something or thinking, and that you're about to get a message, before you've gotten it, so you don't freak out.

It's interesting because video telephony has never taken off.  It was pushed in the 1960's, the 1970's, 1980's, and 1990's.  People have said because the cognitive load is too high.  You end up spending more time worrying, "Am I in frame; Do I look okay," rather than concentrating on the conversation.  Yet, there are important things; there are beneficial things to seeing each other.  It depends on the context. 

If it's your child, you want to see them.  If it's business-like conversation, you may just wish to know the state or the posture, or in particular, how much attention is being given here.  It sounds like a way of reducing out the parts we don't like, often in video telephony, the "Am I in frame; am I looking okay," and we don't really care what each other's color of shirt is.  That sounds like very interesting work to signal that across.

Yes, and just to emphasize your point, you're probably not going to use a system like this to do tele-medicine, or to get instructions about how to run a space shuttle.  The interface I described is more for social banter, for somebody that you know, or if it's somebody you're meeting for the first time; the nice thing about seeing an outline is that person chooses their own level of disclosure.  They get to choose how much of themselves they'd like to display.  They could start with something more abstract, something less stressful.

Are you aware of the work of Distance Lab, who I was interviewing the other week?

Yes, I actually went to graduate school with Stephan Agamanolis. 

Are you aware he is a speaker, as well?

Yes, I am.  I was very excited to see that.  I love their shadowboxing piece. 

When it comes to yourself, there is one project.  I don't know if you led it or were part of it, but certainly, from the same department - it was Visaphone.

Yes

Could you describe Visaphone, and your involvement with that?

That was actually part of my PhD thesis.  I'm going to be speaking briefly about it at the conference because it's been inspiring for a lot of our other work.  In general, one of the points of Visaphone - let me start with the motivations.

One of the main inspirations was that somewhere we were doing a lot of teleconferencing back and forth.  It was quite fascinating that people would stare at this big black box of a speakerphone, even though it provided no additional information. 

One of the reasons for that, we think, is that people just are not used to speaking to disembodied voices.  You are used to associating a voice to a body, to a being.  We figured if people were going to stare at something, we might as well give them something useful, or something that might help them in another way to stare at.

A second inspiration for that was that sometimes when you're speaking to a distant location, because you can't see them, you don't know what's going on there, you can't tell if your voice is being heard.  We wanted an interface that lets you gauge your voice with respect to somebody else's voice, as well.  You won't have the scenario where you are yelling and somebody is being deafened at the other end because you can actually see the volume of your voice in relation to the other side's volume.

I just wanted to say that with Visaphone, what we were looking at was conversational dynamics between spaces, things like conversational dominance, turn taking, and also how people would use such a thing.  If you had an object that was aesthetic, and let's say one day in your homes you could have objects that were reconfigurable instead of collecting porcelain china plates, if you had an object that was dynamic, what types of objects would you collect and what information would you put on them? 

That sounds quite interesting.  If you were asked what is exciting you, at the moment, in the sphere of communications, what would you say?

I would say, first, don't fear communication.  Two, what I am getting really excited about, lately, is our work with sentiment analysis.  We're doing a lot of work to look at levels of anxiety in communication.  I guess that ties into fear, to some degree, like you said. 

Looking at general moods, there is a lot of work, recently, in natural language processing.  We can actually look at and predict, not with perfect accuracy, but just the level of mood in different communities.  We are doing this, right now, with peoples' blogs.  We're doing sentiment analysis in different Facebook scenarios. 

One, from the research standpoint, I'm excited about the possibilities of doing this.  Two, I'm excited just by this idea of a social mirror.  For example, if you could show this to people, will they change their behavior? 

Sorry, you said "field of communications" not "fear of communications" [laughs].

Yeah, I just popped you an instant message to say I said [laughter]...  I said what gets you excited.  I thought you might say, "I'm getting married in six months," so I tried to say, "What's getting you excited in the field of communications".  Some people find my accent strange.  You thought I said "fear of communications" [laughs].  You're thinking of all this sentiment-type stuff.

Yeah, your message to me is also another example of a back channel to the conversation, so that was fitting.  Looking at a lot of the sentiment analysis for happiness, as well as anxiety and fear, I think, is fascinating.  I think there is a lot to work on there.  I think one of the reasons I'm excited about it is because if we do it right, in the beginning, it won't be misused, later on.  Depending on how you build these interfaces, you don't want to scare people. 

One of the things I get very sad about is interfaces that try to do a lie detection.  If you do anything like that, you can seriously destroy conversation if you incorrectly assume something is a lie.  I like my interfaces to be abstract enough where you let people make their own assumptions about what is going on.  You don't say this is anxiety or you don't say this is happiness, but you just show different metrics and let people make up their own minds.

You have plug-ins for Skype, which say somebody is lying.  You don't like them.

I don't like those, no.  We are working on some of our own plug-ins for Skype, where we look at patterns of communications.  Basically, after this message, what it would have shown was our turn taking, our interruptions, if we speak over each other, if we argue. 

We have some other versions, now; they're not working perfectly, with speech recognition.  It also makes these visualizations of text that was spoken, so you can see words that were spoken a lot as bigger, words that weren't spoken as much as smaller.

A tag cloud

Exactly, so it's kind of like a varied version of a tag cloud, where people can annotate onto, later.

When do you think the Skype plug-in will be available?

One of my students if finishing up her masters in May.  I'm assuming she'll graduate, so I'm going to say May.

Instead of saying this person is lying, or anxiety, how do you display or indicate something, without being explicit, to let people make their own make up their own mind?  I was imagining the color red showing if somebody is lying.  What do you mean?  How do you obscure this?

Brainstorming, the first thing you would do is have different parameters, make them different colors.  Sometimes we try to avoid red just because it signals alarm or anger.  You map each of these to different colors. 

The simplest example - you have a bar graph with several different parameters.  You just let these bars rise and fall, but you don't label them.  As people experience interface, they'll make up their own minds and their own decisions about what it means to them.

It's okay if the green bar means something different to different people.  People should adapt the interfaces as to how they want to use them.  We don't say that this is how you have to talk.  There is no right or wrong.  It's basically up to you and we provide the information.

That sounds kind of interesting.  At the moment, you can record your calls.  You can have CDR's (Call Detail Records), start time, and end time.  It kind of begins to point to the possibility of applying metrics to people.  If you call "X" person, you get talked over X% of time.  Although you might not like it being explicit, this person tends to show anxiety 20% of the time.  Maybe you could group your buddy list according to certain conditions.

I would rather not label something as anxiety, but maybe have everyone with a color stamp.  Over time, let's say you enjoy talking to people who have a lot of green and blue.  That is what you'll remember.  You're not going to say, "This person is anxious".  You'll say, "I like this fingerprint of the person and I'm going to talk to more people like that," or as an imprint, as an alternative to an avatar.

That sounds like an interesting means of discovering other people, by fingerprinting people with these conversational metrics, if it's okay to call them that.  Then, maybe being able to say, like in Skype, you can set it to "Skype Me" mode.  I'll speak to anybody, but it would be nice if it were maybe granular.  I could speak to anybody with this type of - click a contact you already know and say, "I'm willing to go on 'Skype Me' mode for people with the similar fingerprint". 

Yes, and one of the other things about this is it also teaches you things about yourself.  It also gives you some level of self-awareness as you see your own color imprint change with respect to different conversations.  You might start wondering, "Do I really talk that much?"  Maybe I talk more than I thought I spoke.  "Why do I interrupt everybody?"  Maybe I didn't realize I was being so intrusive.  "Why don't I talk at all?  Why am I so silent in conversations?"  Sometimes, one of the ways our interfaces have been described has been I showing things you know, but don't realize you know.

It sounds as if it could be used to help a few couples out.  [Laugh]

It's hilarious that you say that.  When we showed Visaphone at SIGRAPH, a couples' counselor actually came up to me and asked if we could set this up in his office.  That was not our intent, but we've had a lot of interest from that domain. 

Yeah, "You always interrupt me".  "No, I don't".  "You always do, you never listen to me," and so on.

It was really a happy surprise to see that by making something physical and visible, the level of self-awareness and level of self-fear, almost, was surprising and exciting, at the same time.  When you see something like this, people are a bit more cautious about how they behave.  It probably does affect interaction, to some degree. 

Something very similar is in the field of speech and hearing.  Mirror therapy is one common way to get children to speak with speech delays.  In many ways, this is an alternate form of a mirror.

That sounds really nice.  I must admit, earlier in the conversation you mentioned an art piece, possibly which Visaphone came out of.  Which art piece did you mention, or was it a figment of my imagination.

It really wasn't, but because of a figment of my Attention Deficit Disorder, that ...

[Laughter] I thought you mentioned an art piece, and I thought, "Did I hear an art piece?"  Which one, because although it might be a bit strange because I'm meant to be a telecommunications engineer and have an engineering background, I've actually been very interested in people representing emerging communications in art form, just because I often see paths to commercialization, people so loosely experimenting and that's kind of what we need. 

Talking of which, I'm not sure you're exactly tasked with monetization, commercialization, and so forth, but what kind of opportunities do you see being spun out of the work that you have been doing, what you call commercial nature, if any?

Some things that we're looking at are actually building applications for cell phones, which actually combine conversations and games, things to break the ice, things to introduce people.  Some of the more obvious things are applications for Facebook. 

Also, this doesn't have exactly to do with direct communication, but we're building a lot of interfaces for showing people how they use energy in their homes.  We're tying these interfaces to the community, anonymously, so that people can converse with each other about how their visualizations look and what they're doing to curtail their energy usage. 

In some ways, we're using them in what I call social catalysts, as imprints to encourage further conversation.  By no means are we trying to replace face-to-face conversation.  We're trying to provide different channels and back channels to get things across, but also to encourage more discussion.  A lot of our interfaces are meant to be interrogative, to sometimes even ask more questions.

You asked earlier about an art piece.  Visaphone has been considered an art piece, in the past, and so has Chit Chat Club, which is a telesculpture that I mentioned.  A lot of work kind of blurs the boundaries, although the work isn't originally set up as an art piece, sometimes, the pieces to end up in museums.  I like this idea of free flowing between them because you get different people to see the work and you get a lot of perspective.  In going back to my point about social catalysts, you get more people involved in the conversation.

It reminds me of David Troy, who is a speaker.  He developed FlickRVision and TwitterVision.  He ended up displayed in the New York Museum of Modern Art.  It was actually another speaker, I can't remember at this point, who ended up with their piece displayed in an art museum.  That is fairly interesting.

Can you expand a touch more, on the cell phone work you were meaning, like give a concrete example of what can be done?

One example might be for people that might want to archive a conversation and what it might look like.  I gave those archival examples earlier; taking that into the game domain might have each person represented as a little centipede.  As they move about the screen, the longer they talk to this particular person, the longer their centipede gets.  They tend to cluster around people they talk to a lot.  All of a sudden, you start seeing things like group patterns.  You start seeing behavioral patterns, conversational patterns.

For me, one of the reasons that we're doing this work with phones - if I could have my way, these would be on interactive t-shirts.  The way people leave their computers on 24/7, the way people leave cameras on 24/7, it's not unfeasible to think that you might leave a microphone and speaker on 24/7 in your home, and what way would you want to show different patterns, obscure different patterns for privacy, and how might you want to see behaviors like this, over time.

I'm really thinking about the idea of when you do have microphones on 24/7, whether they are represented on cell phones or on your clothes, to highlight your social network as you walk down the street, much in the same way kids wear t-shirts to show their favorite bands or their favorite products; how might these visualizations of conversation behavior be used to show your identity?

That sounds very fascinating, just because it ties into the whole digital identity field.  I'm not sure if that is a field of yours, at all.

Identity is a big field in psychology and sociology, and social psychology.  The idea of identity and the differences between your fragmented identities online, offline, even in your different face-to-face communities is a big research piece that we're only slow chipping at the moment.  It is something we discuss a lot.

The idea of leaving a passive microphone on doesn't seem unreasonable.  Actually, what I often wish for - it was an idea that came from Martin Geddes; we need push-to-hear. 

Often, we make a call and another person is already in a conversation with people in the room.  Wouldn't it be good if you could push a button and just hear for two seconds?  Obviously, the other person at the other end gets a blip or warning, but push-to-hear, because what we're trying to do is close time and space between people.  That is a nice form of presence, is to hear what's happening at another location.

One interesting take on that, just to flip it over a bit, is with Visaphone people oftentimes use the visualization with the sound off.  In that case, it would be push-to-see what you hear, without actually hearing it.  You would see abstracted circles of volume of sound.  You would get some idea of presence, some idea of activity, almost the equivalent of a baby monitor for adults, which actually took privacy into account. 

Like a baby monitor for adults.  Presence was a hot topic about two to four years ago, mostly about three, actually somewhere in between.  We had the likes of USB-powered plants that when your loved one came online it grew to show they were online, or lit up.  I'm not sure - the work you've been doing ties into presence.  Do you see evolution in presence?  Maybe the word has been misused because many people, by presence, mean availability management rather than sense of other at distance.

I think that what has happened is that other people have altered the word because people became frustrated with not that much progress in the area.  I think people have looked at it from different perspectives.  There has been a lot of work, recently, in disruption; when is the ideal time to disrupt someone, if there is one.  Other areas are, like you said, availability with instant messenger.  Other things are just bringing people together, what people might want to meet each other.  Facebook does this by trying to match people up on its own, trying to introduce people.

One thing that I would like to bring into the discourse about this idea of disruption is that disruption has this connotation of being bad.  What if we think of disruption as a good thing?  We just start by thinking of it in a different way.  There are great things that happen from disruption.  When I get disrupted from work, I get to have a cup of coffee and talk to somebody.  I would say that's a success.

[Laughs] Disruption is good.

Yeah, so maybe we've been thinking about it the wrong way.  I think it's good that we don't hear the word presence as much, anymore.  It just means we've started looking at different parts of it and started using different words to describe the ideas of presence.

Does it amaze you that fifteen years later we still have online and offline, busy and don't disturb?  It seems rather as if we are still living fifteen years ago in that department.

True, it is interesting but maybe that's the best solution.  We haven't shown that yet.  Sometimes with people - doors in my office, if my door is closed, people aren't as inclined to knock.  If my door is open, they're more likely to walk in.  We do those cues face-to-face.  Whenever we move to different mediums, we tend to appropriate what we know and use those before we can move on and find different social cues to use.

It doesn't surprise me.  I think we'll also come up with different things.  Probably ten years ago, if you sent somebody a message an instant messaging and they didn't reply for two hours, you would probably get more upset than you would, today, knowing that people walk around, get cups of coffee, and go to the bathroom. 

In the very beginning, we expected it to be so close to face-to-face, that if somebody had replied to you, within a second each time, and they didn't once, you immediately thought that something was wrong, didn't like you.

I agree with you.  It's kind of happened with email, now.  You're kind of expected to reply the same day.  Now, if you reply the same week, it's still okay.  It's even getting to the point where if you don't reply, it's still okay.

Email is actually stopping to work, for me.  In many ways, I could use more of a pull medium than a push medium, in that respect.  With all these spam filters out there, they're catching some important mail.  My email has turned into my newspaper.  I glance at it as opposed to reading it the way I used to.

I agree with you and I think it's getting like that for all of us, just because of the sheer rise in communications volume across growing numbers of channels.  We seem to be seeing the long tail of communications happening, more means of connecting with each other.

Speaking of which, I don't suppose you're aware of Tony, with his Sense Networks?

No, I'm not familiar with his work.

He's from Columbia University.

Oh, Tony Jebara - yes, we went to school together.

Did you know he was a speaker?

No, I didn't know.  He's amazing!

Exactly, and I was chatting with him, yesterday, and it really overlapped with many areas that got me excited.  When you mentioned discovery of others, Tony is very much focused in that area.  It's some amazing work going on, there. 

The reason I mention it was just to begin closing loops between you, Stefan at Distance Lab, Tony at Columbia stroke Sense Networks.  I just see you three - I was going to say you should sit at the same table together, at lunch [laughs], but maybe it's better since you know each other, to spread out.  I just see commonalities there.  If conversations are not happening, they should be.

I should begin finishing off by asking you - I've asked you what gets you excited.  Do you want to share any last thoughts on where you see opportunities in the communications space?  At the beginning, you said your passion was the communications field.  Where do you see communications, for example, going over the next two, three, or five years?  Where is the excitement?  Where do you see development or experimentation, or where would you like to look, personally, over the coming years?

What I'm intrigued about is the creation of new types of interfaces that might even create new social etiquette or new social behavior in communication.  Right now, we have thousands of years of experience speaking face-to-face, and we tend to adopt that in different mediums. 

The telegraph came along.  We took some of that, but we created some of our own mediums on top of that.  Then, we had radio, telephones, email.  We had little emoticons with an email.  I'm curious; if you include visualization with communication, how might you influence communication, encourage different types of communication, and what types of channels that we're not familiar with or even aware that we use, can we show using visualization?  I would love to see some sort of visual feedback with communication.  I think we're slowly on the road to that.

That's fantastic and I look forward to the Skype plug-ins.  I hope they're good.  I very much appreciate your time.

Thank you very much.  I look forward to seeing you in San Francisco.

See you in March.  Thanks, bye.

Bye

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.

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.